UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

for the quarterly period ended ~~September 30, 2022~~March 31, 2023


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

for the transition period from _________ to _________

Commission file number: 001-36153

Criteo S.A.

(Exact name of registrant as specified in its charter)


France			Not Applicable
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification Number)

32 Rue Blanche	Paris	France	75009
(Address of principal executive offices)			(Zip Code)

+33 1 75 85 09 39

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

American Depositary Shares, each representing one Ordinary Share,
nominal value €0.025 per share

CRTO

Nasdaq Global Select Market

Ordinary Shares, nominal value €0.025 per share

Nasdaq Global Select Market

* Not for trading, but only in connection with the registration of the American Depositary Shares.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer, ”“accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.


Large Accelerated Filer	☒	Accelerated Filer	☐
Non-accelerated Filer	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No x

As of ~~October 31, 2022,~~April 28, 2023, the registrant had ~~60,210,797~~56,136,498 ordinary shares, nominal value €0.025 per share, outstanding.

TABLE OF CONTENTS

General

Except where the context otherwise requires, all references in this Quarterly Report on Form 10-Q ("Form 10-Q") to the "Company," "Criteo," "we," "us," "our" or similar words or phrases are to Criteo S.A. and its subsidiaries, taken together. In this Form 10-Q, references to "$" and "US$" are to United States dollars. Our unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, or "U.S. GAAP."

Trademarks

“Criteo,” the Criteo logo and other trademarks or service marks of Criteo appearing in this Form 10-Q are the property of Criteo. Trade names, trademarks and service marks of other companies appearing in this Form 10-Q are the property of their respective holders.

Special Note Regarding Forward-Looking Statements

This Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that are based on our management’s beliefs and assumptions and on information currently available to our management. All statements other than present and historical facts and conditions contained in this Form 10-Q, including statements regarding our future results of operations and financial position, business strategy, plans and objectives for future operations, are forward-looking statements. When used in this Form 10-Q, the words “anticipate,” “believe,” “can,” “could,” “estimate,” “expect,” “intend,” “is designed to,” “may,” “might,” “plan,” “potential,” “predict,” “objective,” “should,” or the negative of these and similar expressions identify forward-looking statements. Forward-looking statements include, but are not limited to, statements about:

•the ongoing ~~effect of the COVID-19 pandemic and potential~~ effect of inflation and rising interest rates in the U.S., including the macroeconomic effects, on our business, operations, and financial results;

•the ability of the Criteo Artificial Intelligence (AI) Engine to accurately predict engagement by a user;

•our ability to predict and adapt to changes in widely adopted industry platforms and other new technologies, including without limitation the proposed changes to and enhancements of the Chrome browser announced by Google;

•our ability to continue to collect and utilize data about user behavior and interaction with advertisers and publishers;

•our ability to acquire an adequate supply of advertising inventory from publishers on terms that are favorable to us;

•our ability to meet the challenges of a growing and international company in a rapidly developing and changing industry, including our ability to forecast accurately;

•our ability to maintain an adequate rate of revenue growth and sustain profitability;

•our ability to manage our international operations and expansion and the integration of our acquisitions;

•the effects of increased competition in our market;

•our ability to adapt to regulatory, legislative or self-regulatory developments regarding internet privacy matters;

•our ability to protect users’ information and adequately address privacy concerns;

•our ability to enhance our brand;

•the invasion of Ukraine by Russia and the effect of resulting sanctions on our business;

•our ability to enter new marketing channels and new geographies;

•our ability to effectively scale our technology platform;

•our ability to attract and retain qualified employees and key personnel;

•our ability to maintain, protect and enhance our brand and intellectual property; and

•failures in our systems or infrastructure.

You should also refer to Item 1A “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, ~~2021,~~2022, and to ~~Part II, Item 1A "Risk Factors" of~~ our subsequent quarterly reports on Form 10-Q for a discussion of important factors that may cause our actual results to differ materially from those expressed or implied by our forward-looking statements. As a result of these factors, we cannot assure you that the forward-looking statements in this Form 10-Q will prove to be accurate. Furthermore, if our forward-looking statements prove to be inaccurate, the inaccuracy may be material. In light of the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified time frame or at all. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

You should read this Form 10-Q and the documents that we reference in this Form 10-Q and have filed as exhibits to this Form 10-Q completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary factors.

This Form 10-Q may contain market data and industry forecasts that were obtained from industry publications. These data and forecasts involve a number of assumptions and limitations, and you are cautioned not to give undue weight to such information. We have not independently verified any third-party information. While we believe the market position, market opportunity and market size information included in this Form 10-Q is generally reliable, such information is inherently imprecise.

PART I

Item 1. Financial Statements

CRITEO S.A. CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (UNAUDITED)


		Notes	September 30, 2022		December 31, 2021				March 31, 2023		December 31, 2022
			(in thousands)						(in thousands)
Assets	Assets						Assets
Current assets:	Current assets:						Current assets:
Cash and cash equivalents	Cash and cash equivalents	4	$	307,323	$	515,527	Cash and cash equivalents	4	$	305,662	$	348,200
Trade receivables, net of allowances of $57.6 million and $45.4 million at September 30, 2022 and December 31, 2021, respectively		5	576,082		581,988
Trade receivables, net of allowances of $50.5 million and $47.8 million at March 31, 2023 and December 31, 2022, respectively							Trade receivables, net of allowances of $50.5 million and $47.8 million at March 31, 2023 and December 31, 2022, respectively	5	545,840		708,949
Income taxes	Income taxes	13	16,474		8,784		Income taxes	13	28,008		23,609
Other taxes	Other taxes		75,795		73,388		Other taxes		91,354		78,274
Other current assets	Other current assets	6	34,347		34,182		Other current assets	6	58,116		51,866
Restricted cash - current	Restricted cash - current	4	25,000		—		Restricted cash - current	4	75,001		25,000
Marketable securities - current portion	Marketable securities - current portion	4	10,000		50,299		Marketable securities - current portion	4	21,168		25,098
Total current assets	Total current assets		1,045,021		1,264,168		Total current assets		1,125,149		1,260,996
Property, plant and equipment, net	Property, plant and equipment, net		114,493		139,961		Property, plant and equipment, net		146,211		131,207
Intangible assets, net	Intangible assets, net		77,464		82,627		Intangible assets, net		179,877		175,983
Goodwill	Goodwill	2	597,781		329,699		Goodwill	2	522,788		515,140
Right of use assets - operating lease	Right of use assets - operating lease	8	101,982		120,257		Right of use assets - operating lease	8	107,749		102,176
Restricted cash - non-current	Restricted cash - non-current	4	75,000		—		Restricted cash - non-current	4	—		75,000
Marketable securities - non-current portion	Marketable securities - non-current portion	4	—		5,000		Marketable securities - non-current portion	4	10,875		—
Non-current financial assets	Non-current financial assets		6,864		6,436		Non-current financial assets		4,542		5,928
Other non-current assets	Other non-current assets		54,478		—		Other non-current assets		50,000		50,818
Deferred tax assets	Deferred tax assets		49,487		35,443		Deferred tax assets		44,296		31,646
Total non-current assets	Total non-current assets		1,077,549		719,423		Total non-current assets		1,066,338		1,087,898
Total assets	Total assets		$	2,122,570	$	1,983,591	Total assets		$	2,191,487	$	2,348,894

Liabilities and shareholders' equity	Liabilities and shareholders' equity						Liabilities and shareholders' equity
Current liabilities:	Current liabilities:						Current liabilities:
Trade payables	Trade payables		$	576,762	$	430,245	Trade payables		$	602,180	$	742,918
Contingencies - current portion	Contingencies - current portion	15	60,038		3,059		Contingencies - current portion	15	67,149		65,759
Income taxes	Income taxes	13	5,602		6,641		Income taxes	13	16,815		13,037
Financial liabilities - current portion	Financial liabilities - current portion	4	—		642		Financial liabilities - current portion	4	4,208		219
Lease liability - operating - current portion	Lease liability - operating - current portion	8	30,469		34,066		Lease liability - operating - current portion	8	33,287		31,003
Other taxes	Other taxes		56,894		60,236		Other taxes		60,294		58,031
Employee - related payables	Employee - related payables		72,897		98,136		Employee - related payables		99,616		85,569
Other current liabilities	Other current liabilities	7	60,810		39,523		Other current liabilities	7	109,367		83,457
Total current liabilities	Total current liabilities		863,472		672,548		Total current liabilities		992,916		1,079,993
Deferred tax liabilities	Deferred tax liabilities		2,842		3,053		Deferred tax liabilities		3,877		3,463
Defined benefit plans	Defined benefit plans	9	2,836		5,531		Defined benefit plans	9	4,138		3,708
Financial liabilities - non-current portion	Financial liabilities - non-current portion	4	270		360		Financial liabilities - non-current portion	4	76		74
Lease liability - operating - non-current portion	Lease liability - operating - non-current portion	8	77,901		93,893		Lease liability - operating - non-current portion	8	80,762		77,536
Contingencies - non-current portion	Contingencies - non-current portion	15	32,731		—		Contingencies - non-current portion	15	33,244		33,788
Other non-current liabilities	Other non-current liabilities	7	65,618		9,886		Other non-current liabilities	7	26,285		69,226
Total non-current liabilities	Total non-current liabilities		182,198		112,723		Total non-current liabilities		148,382		187,795
Total liabilities	Total liabilities		1,045,670		785,271		Total liabilities		1,141,298		1,267,788
Commitments and contingencies	Commitments and contingencies						Commitments and contingencies
Shareholders' equity:	Shareholders' equity:						Shareholders' equity:
Common shares, €0.025 par value, 64,985,388 and 65,883,347 shares authorized, issued and outstanding at September 30, 2022, and December 31, 2021, respectively.			2,125		2,149
Treasury stock, 5,049,409 and 5,207,873 shares at cost as of September 30, 2022 and December 31, 2021, respectively.			(152,889)		(131,560)
Common shares, €0.025 par value, 63,316,696 and 63,248,728 shares authorized, issued and outstanding at March 31, 2023, and December 31, 2022, respectively.							Common shares, €0.025 par value, 63,316,696 and 63,248,728 shares authorized, issued and outstanding at March 31, 2023, and December 31, 2022, respectively.		2,081		2,079
Treasury stock, 7,323,153 and 5,985,104 shares at cost as of March 31, 2023 and December 31, 2022, respectively.							Treasury stock, 7,323,153 and 5,985,104 shares at cost as of March 31, 2023 and December 31, 2022, respectively.		(211,400)		(174,293)
Additional paid-in capital	Additional paid-in capital		760,666		731,248		Additional paid-in capital		760,397		734,492
Accumulated other comprehensive income (loss)	Accumulated other comprehensive income (loss)		(131,651)		(40,294)		Accumulated other comprehensive income (loss)		(85,415)		(91,890)
Retained earnings	Retained earnings		569,218		601,588		Retained earnings		551,922		577,653
Equity-attributable to shareholders of Criteo S.A.	Equity-attributable to shareholders of Criteo S.A.		1,047,469		1,163,131		Equity-attributable to shareholders of Criteo S.A.		1,017,585		1,048,041
Non-controlling interests	Non-controlling interests		29,431		35,189		Non-controlling interests		32,604		33,065
Total equity	Total equity		1,076,900		1,198,320		Total equity		1,050,189		1,081,106
Total equity and liabilities	Total equity and liabilities		$	2,122,570	$	1,983,591	Total equity and liabilities		$	2,191,487	$	2,348,894

The accompanying notes form an integral part of these unaudited condensed consolidated financial statements.

CRITEO S.A.

CONDENSED CONSOLIDATED STATEMENTS OF ~~INCOME~~OPERATIONS (UNAUDITED)
Three Months Ended Nine Months Ended
Notes September 30,
2022 September 30,
2021 September 30,
2022 September 30,
2021
(in thousands, except share per data)
Revenue 10 $ 446,921 $ 508,580 $ 1,452,578 $ 1,600,968
Cost of revenue:
Traffic acquisition costs (233,543) (297,619) (807,758) (956,364)
Other cost of revenue (33,771) (34,935) (96,214) (107,011)
Gross profit 179,607 176,026 548,606 537,593
Operating expenses:
Research and development expenses (42,725) (33,345) (118,248) (106,957)
Sales and operations expenses (90,051) (75,619) (278,363) (235,724)
General and administrative expenses (42,353) (34,877) (176,361) (108,779)
Total operating expenses (175,129) (143,841) (572,972) (451,460)
Income (loss) from operations 4,478 32,185 (24,366) 86,133
Financial and Other income (expense) 12 3,485 (154) 23,927 (1,391)
Income (loss) before taxes 7,963 32,031 (439) 84,742
Provision for income taxes 13 (1,442) (7,801) (4,735) (22,033)
Net income (loss) $ 6,521 $ 24,230 $ (5,174) $ 62,709
Net income (loss) available to shareholders of Criteo S.A. $ 6,579 $ 23,481 $ (6,448) $ 60,691
Net income (loss) available to non-controlling interests $ (58) $ 749 $ 1,274 $ 2,018
Weighted average shares outstanding used in computing per share amounts:
Basic 14 60,318,114 60,873,594 60,431,597 60,759,613
Diluted 14 63,235,811 64,197,686 63,050,355 64,313,526
Net income (loss) allocated to shareholders per share:
Basic 14 $ 0.11 $ 0.39 $ (0.11) $ 1.00
Diluted 14 $ 0.10 $ 0.37 $ (0.10) $ 0.94


			Three Months Ended
	Notes			March 31, 2023		March 31, 2022
		(in thousands, except share per data)

Revenue	10			$	445,016	$	510,567

Cost of revenue:
Traffic acquisition costs				(224,398)		(293,650)
Other cost of revenue				(39,109)		(32,893)

Gross profit				181,509		184,024

Operating expenses:
Research and development expenses				(63,590)		(34,027)
Sales and operations expenses				(101,242)		(88,999)
General and administrative expenses				(40,170)		(33,336)
Total operating expenses				(205,002)		(156,362)
Income (loss) from operations				(23,493)		27,662
Financial and Other income (expense)	12			6,827		4,030
Income (loss) before taxes				(16,666)		31,692
Provision for income taxes	13			4,595		(10,414)
Net income (loss)				$	(12,071)	$	21,278

Net income (loss) available to shareholders of Criteo S.A.				$	(11,809)	$	20,587
Net income (loss) available to non-controlling interests				$	(262)	$	691

Weighted average shares outstanding used in computing per share amounts:
Basic	14			56,256,082		60,738,299
Diluted	14			60,494,827		63,613,550

Net income (loss) allocated to shareholders per share:
Basic	14			$	(0.21)	$	0.34
Diluted	14			$	(0.20)	$	0.32

The accompanying notes form an integral part of these unaudited condensed consolidated financial statements.

CRITEO S.A.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE ~~INCOME~~OPERATIONS (UNAUDITED)


		Three Months Ended				Nine Months Ended					Three Months Ended
		September 30, 2022		September 30, 2021		September 30, 2022		September 30, 2021				March 31, 2023		March 31, 2022
		(in thousands)										(in thousands)

Net income (loss)	Net income (loss)	$	6,521	$	24,230	$	(5,174)	$	62,709	Net income (loss)		$	(12,071)	$	21,278
Foreign currency translation differences, net of taxes	Foreign currency translation differences, net of taxes	(30,896)		(18,394)		(101,624)		(44,934)		Foreign currency translation differences, net of taxes		6,315		(19,218)
Actuarial gains on employee benefits, net of taxes		409		25		2,944		683
Actuarial gains (losses) on employee benefits, net of taxes										Actuarial gains (losses) on employee benefits, net of taxes		(136)		1,086
Other comprehensive income (loss)	Other comprehensive income (loss)	$	(30,487)	$	(18,369)	$	(98,680)	$	(44,251)	Other comprehensive income (loss)		$	6,179	$	(18,132)
Total comprehensive income (loss)	Total comprehensive income (loss)	$	(23,966)	$	5,861	$	(103,854)	$	18,458	Total comprehensive income (loss)		$	(5,892)	$	3,146
Attributable to shareholders of Criteo S.A.	Attributable to shareholders of Criteo S.A.	$	(22,142)	$	5,569	$	(97,806)	$	19,314	Attributable to shareholders of Criteo S.A.		$	(5,334)	$	4,380
Attributable to non-controlling interests	Attributable to non-controlling interests	$	(1,824)	$	292	$	(6,048)	$	(856)	Attributable to non-controlling interests		$	(558)	$	(1,234)

The accompanying notes form an integral part of these unaudited condensed consolidated financial statements.

CRITEO S.A.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (UNAUDITED)


		Share capital		Treasury Stock		Additional paid-in capital	Accumulated Other Comprehensive Income (Loss)	Retained Earnings	Equity - attributable to shareholders of Criteo S.A.	Non controlling interest	Total equity		Share capital		Treasury Stock		Additional paid-in capital	Accumulated Other Comprehensive Income (Loss)	Retained Earnings	Equity - attributable to shareholders of Criteo S.A.	Non controlling interest	Total equity
		Common shares		Shares									Common shares		Shares
		(in thousands, except share amounts )											(in thousands, except share amounts )
Balance at December 31, 2020		66,272,106	$2,161	(5,632,536)	$(85,570)	$693,164	$16,027	$491,359	$1,117,142	$35,545	$1,152,687
Balance at December 31, 2021												Balance at December 31, 2021	65,883,347	$2,149	(5,207,873)	$(131,560)	$731,248	$(40,294)	$601,588	$1,163,131	$35,189	$1,198,320
Net income (loss)	Net income (loss)	—						22,406		1,044	23,450	Net income (loss)	—						20,587		691	21,278
Other comprehensive income (loss)	Other comprehensive income (loss)	—					(33,852)	—	(33,852)	(2,502)	(36,354)	Other comprehensive income (loss)	—					(16,207)	—	(16,207)	(1,925)	(18,132)
Issuance of ordinary shares	Issuance of ordinary shares	119,800	3	—		2,148	—		2,151	—	2,151	Issuance of ordinary shares	22,047	1	—		319	—		320	—	320
Change in treasury stocks		—		34,935	(1,693)	—		(3,237)	(4,930)	—	(4,930)
Change in treasury stocks(*)												Change in treasury stocks(*)	—		(119,771)	(5,770)	—		(2,534)	(8,304)	—	(8,304)
Share-Based Compensation	Share-Based Compensation	—				6,710	—		6,710	50	6,760	Share-Based Compensation	—				8,948	—		8,948	93	9,041
Other changes in equity	Other changes in equity	—										Other changes in equity	—
Balance at March 31, 2021		66,391,906	$2,164	(5,597,601)	$(87,263)	$702,022	$(17,825)	$510,528	$1,109,626	$34,137	$1,143,763
Net income (loss)		—						14,804		225	15,029
Other comprehensive income (loss)		—					10,387	—	10,387	85	10,472
Issuance of ordinary shares		305,454	9	—		7,568	—		7,577	—	7,577
Change in treasury stocks		—		(482,407)	(24,560)	—		(5,439)	(29,999)	—	(29,999)
Share-Based Compensation		—				11,172	—		11,172	55	11,227
Other changes in equity		—
Balance at June 30, 2021		66,697,360	$2,173	(6,080,008)	(111,823)	$720,762	$(7,438)	$519,893	$1,123,567	$34,502	$1,158,069
Net income (loss)		—						23,481		749	24,230
Other comprehensive income (loss)		—					(17,911)	—	(17,911)	(458)	(18,369)
Issuance of ordinary shares		(382,341)	16	—		12,167	—		12,183	—	12,183
Change in treasury stocks		—	(27)	535,481	(10,567)	(18,036)	—	(9,054)	(37,684)	—	(37,684)
Share-Based Compensation		—				12,720	—		12,720	103	12,823
Other changes in equity		—
Balance at September 30, 2021		66,315,019	$2,162	(5,544,527)	(122,390)	$727,613	$(25,349)	$534,320	$1,116,356	$34,896	$1,151,252
Balance at March 31, 2022												Balance at March 31, 2022	65,905,394	$2,150	(5,327,644)	$(137,330)	$740,515	$(56,501)	$619,641	$1,168,475	$34,048	$1,202,523

(*) From January 1, 2020, we adopted ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost issued by the Financial Accounting Standards Board (FASB).

~~(**)~~ ~~Deferred consideration in the context of Storetail Marketing SAS acquisition in 2018.~~

Share capital Treasury Stock Additional paid-in capital Accumulated Other Comprehensive Income (Loss) Retained Earnings Equity - attributable to shareholders of Criteo S.A. Non controlling interest Total equity
Common shares Shares
(in thousands, except share amounts )
Balance at December 31, 2021 65,883,347 $2,149 (5,207,873) $(131,560) $731,248 $(40,294) $601,588 $1,163,131 $35,189 $1,198,320
Net income (loss) — — — — — — 20,587 20,587 691 21,278
Other comprehensive income (loss) — — — — — (16,207) — (16,207) (1,925) (18,132)
Issuance of ordinary shares 22,047 1 — — 319 — — 320 — 320
Change in treasury stocks(*)
— — (119,771) (5,770) — — (2,534) (8,304) — (8,304)
Share-Based Compensation — — — — 8,948 — — 8,948 93 9,041
Other changes in equity — — — — — — — — — —
Balance at March 31, 2022 65,905,394 $2,150 (5,327,644) $(137,330) $740,515 $(56,501) $619,641 $1,168,475 $34,048 $1,202,523
Net income (loss) — — — — — — (33,613) (33,613) 641 (32,972)
Other comprehensive income (loss) — — — — — (46,430) — (46,430) (3,631) (50,061)
Issuance of ordinary shares (111,362) — — — 110 — — 110 — 110
Change in treasury stocks(*)
— (3) 62,251 (11,179) (1,342) — (8,509) (21,033) — (21,033)
Share-Based Compensation — — — — 11,452 — — 11,452 97 11,549
Other changes in equity — — — — 39 — 33 72 — 72
Balance at June 30, 2022 65,794,032 $2,147 (5,265,393) $(148,509) $750,774 $(102,931) $577,552 $1,079,033 $31,155 $1,110,188
Net income (loss) — — — — — — 6,579 6,579 (58) 6,521
Other comprehensive income (loss) — — — — — (28,720) — (28,720) (1,767) (30,487)
Issuance of ordinary shares (808,644) 1 — — — — — 1 — 1
Change in treasury stocks(*)
— (23) 215,984 (4,380) (10,530) — (14,913) (29,846) — (29,846)
Share-Based Compensation — — — — 20,422 — — 20,422 101 20,523
Other changes in equity — — — — — — — — — —
Balance at September 30, 2022 64,985,388 $2,125 (5,049,409) $(152,889) $760,666 $(131,651) $569,218 $1,047,469 $29,431 $1,076,900

~~(*)~~ On February 3, 2022, Criteo's board of directors authorized an extension of the share repurchase program to up to $280.0 million of the Company's outstanding American Depositary Shares. The change in treasury stocks is comprised of ~~2,195,411~~303,342 shares repurchased at an average price of ~~$26.7~~$27.4 offset by ~~1,401,489~~183,571 treasury shares used for RSUs ~~and LUSs vesting, 952,386~~vesting.


	Share capital		Treasury Stock		Additional paid-in capital	Accumulated Other Comprehensive Income (Loss)	Retained Earnings	Equity - attributable to shareholders of Criteo S.A.	Non controlling interest	Total equity
	Common shares		Shares
	(in thousands, except share amounts )
Balance at December 31, 2022	63,248,728	$2,079	(5,985,104)	$(174,293)	$734,492	$(91,890)	$577,653	$1,048,041	$33,065	$1,081,106
Net income (loss)	—	—	—	—	—	—	(11,809)	(11,809)	(262)	(12,071)
Other comprehensive income (loss)	—	—	—	—	—	6,475	—	6,475	(296)	6,179
Issuance of ordinary shares	67,968	2	—	—	1,295	—	—	1,297	—	1,297
Change in treasury stocks(*)	—	—	(1,338,049)	(37,107)	—	—	(13,922)	(51,029)	—	(51,029)
Share-Based Compensation	—	—	—	—	24,610	—	—	24,610	97	24,707
Other changes in equity	—	—	—	—	—	—	—	—	—	—
Balance at March 31, 2023	63,316,696	$2,081	(7,323,153)	$(211,400)	$760,397	$(85,415)	$551,922	$1,017,585	$32,604	$1,050,189

(*) On February 5, 2022, Criteo's board of directors authorized an extension of the share repurchase program to up to $480.0 million of the Company's outstanding American Depositary Shares. The change in treasury stocks is comprised of 1,731,634 shares ~~retired.~~repurchased at an average price of $29.9 offset by 393,585 treasury shares used for RSUs vesting.

The accompanying notes form an integral part of these unaudited condensed consolidated financial statements.

CRITEO S.A.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)


			Nine Months Ended						Three Months Ended
			September 30, 2022		September 30, 2021				March 31, 2023		March 31, 2022
		(in thousands)						(in thousands)
Net income (loss)	Net income (loss)		$	(5,174)	$	62,709	Net income (loss)		$	(12,071)	$	21,278
Non-cash and non-operating items	Non-cash and non-operating items		122,043		103,573		Non-cash and non-operating items		31,947		34,726
- Amortization and provisions	- Amortization and provisions		134,650		67,919		- Amortization and provisions		27,311		26,611

- Net gain or (loss) on disposal of non-current assets			(361)		4,694
- Net (gain) or loss on disposal of non-current assets							- Net (gain) or loss on disposal of non-current assets		(8,790)		9
- Equity awards compensation expense (1)	- Equity awards compensation expense (1)		42,594		32,174		- Equity awards compensation expense (1)		25,168		9,489
- Interest accrued and non-cash financial income and expenses			(2,244)		—

- Change in deferred taxes	- Change in deferred taxes		(16,051)		4,568		- Change in deferred taxes		(12,297)		2,868
- Change in income taxes	- Change in income taxes		(12,899)		(5,820)		- Change in income taxes		(137)		(432)
- Other (2)	- Other (2)		(23,646)		38		- Other (2)		692		(3,819)
Changes in working capital related to operating activities	Changes in working capital related to operating activities		13,661		(11,381)		Changes in working capital related to operating activities		22,088		18,926
- (Increase) / Decrease in trade receivables	- (Increase) / Decrease in trade receivables		75,399		16,654		- (Increase) / Decrease in trade receivables		164,120		92,738
- Increase / (Decrease) in trade payables	- Increase / (Decrease) in trade payables		(19,526)		(5,693)		- Increase / (Decrease) in trade payables		(145,011)		(49,672)
- (Increase) / Decrease in other current assets	- (Increase) / Decrease in other current assets		(23,224)		(12,710)		- (Increase) / Decrease in other current assets		(13,594)		(18,947)
- Increase/ (Decrease) in other current liabilities	- Increase/ (Decrease) in other current liabilities		(20,178)		(5,774)		- Increase/ (Decrease) in other current liabilities		16,666		(3,182)
- Change in operating lease liabilities and right of use assets	- Change in operating lease liabilities and right of use assets		1,190		(3,858)		- Change in operating lease liabilities and right of use assets		(93)		(2,011)

Cash from operating activities	Cash from operating activities		130,530		154,901		Cash from operating activities		41,964		74,930
Acquisition of intangible assets, property, plant and equipment	Acquisition of intangible assets, property, plant and equipment		(48,955)		(44,383)		Acquisition of intangible assets, property, plant and equipment		(37,195)		(10,857)
Change in accounts payable related to intangible assets, property, plant and equipment	Change in accounts payable related to intangible assets, property, plant and equipment		7,632		1,518		Change in accounts payable related to intangible assets, property, plant and equipment		3,976		5,293
Payment for business, net of cash acquired							Payment for business, net of cash acquired		(6,500)		—
Proceeds from disposition of investments							Proceeds from disposition of investments		9,625		—

Payment for a business, net of cash acquired			(135,453)		(9,527)
Change in other non-current financial assets	Change in other non-current financial assets		43,052		(13,803)		Change in other non-current financial assets		(6,008)		22,489
Cash (used for) from investing activities	Cash (used for) from investing activities		(133,724)		(66,195)		Cash (used for) from investing activities		(36,102)		16,925
Proceeds from borrowings under line-of-credit agreement	Proceeds from borrowings under line-of-credit agreement		78,513		—		Proceeds from borrowings under line-of-credit agreement		—		78,513
Repayment of borrowings	Repayment of borrowings		(78,513)		(1,262)		Repayment of borrowings		—		(78,513)
Proceeds from exercise of stock options	Proceeds from exercise of stock options		617		21,688		Proceeds from exercise of stock options		1,266		271
Repurchase of treasury stocks	Repurchase of treasury stocks		(59,162)		(72,611)		Repurchase of treasury stocks		(51,030)		(8,304)
Change in other financial liabilities	Change in other financial liabilities		107		(3,636)		Change in other financial liabilities		—		6,666
Cash payment for contingent consideration							Cash payment for contingent consideration		(22,025)		—
Other (2)	Other (2)		22,242		—		Other (2)		(428)		—
Cash used for financing activities	Cash used for financing activities		(36,196)		(55,821)		Cash used for financing activities		(72,217)		(1,367)
Effect of exchange rates changes on cash and cash equivalents	Effect of exchange rates changes on cash and cash equivalents		(68,813)		(23,438)		Effect of exchange rates changes on cash and cash equivalents		(1,182)		(16,673)
Net increase (decrease) in cash and cash equivalents	Net increase (decrease) in cash and cash equivalents		(108,203)		9,447		Net increase (decrease) in cash and cash equivalents		(67,537)		73,815
Net cash and cash equivalents at beginning of period	Net cash and cash equivalents at beginning of period		515,526		488,011		Net cash and cash equivalents at beginning of period		448,200		515,527
Net cash and cash equivalents and restricted cash at end of period	Net cash and cash equivalents and restricted cash at end of period		$	407,323	$	497,458	Net cash and cash equivalents and restricted cash at end of period		$	380,663	$	589,342

Supplemental disclosures of cash flow information	Supplemental disclosures of cash flow information						Supplemental disclosures of cash flow information
Cash paid for taxes, net of refunds	Cash paid for taxes, net of refunds		(33,685)		(23,285)		Cash paid for taxes, net of refunds		(7,900)		(7,978)
Cash paid for interest	Cash paid for interest		(959)		(1,139)		Cash paid for interest		(616)		(365)

(1) Of which ~~$41.1~~$24.7 million and ~~$30.8~~$9.0 million of equity awards ~~compensation~~compensation expense consisted of share-based compensation expense according to ASC 718 Compensation - stock compensation for the ~~nine~~three months ended ~~September 30,~~March, 2023 and 2022, ~~and 2021,~~ respectively.
(2) Primarily consists of realized gains in FX ~~hedges.~~
hedges for the three months ended March 2022.

The accompanying notes form an integral part of these unaudited condensed consolidated financial statements.

CRITEO S.A.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Criteo S.A. was initially incorporated as a société par actions simplifiée, or S.A.S., under the laws of the French Republic on November 3, 2005, for a period of 99 years and subsequently converted to a société anonyme, or S.A.

We are a global technology company that enables marketers and media owners to drive better commerce outcomes through the world’s leading Commerce Media Platform. We bring richer experiences to every consumer by supporting a fair and open internet that enables discovery, innovation, and choice — powered by trusted and impactful advertising from the world’s marketers and media owners.

We are leading the way of commerce media — a new approach to advertising that combines commerce data and machine learning to target consumers throughout their shopping journey and help marketers and media owners drive commerce outcomes (sales, leads, advertising revenue).

Our strategy is to help marketers and media owners activate 1st-party, privacy-safe data and drive better commerce outcomes through our Commerce Media Platform, a suite of products:

•that offer marketers (brands, retailers, and agencies) the ability to easily reach consumers anywhere throughout their shopping journey and measure their advertising campaigns

•that offer media owners (publishers and retailers) the ability to monetize their advertising and promotions inventory for commerce anywhere where consumers spend their time

•sitting on top of a dataset and technology that power our entire offering.

In these notes, Criteo S.A. is referred to as the "Parent" company and together with its subsidiaries, collectively, as "Criteo," the "Company," the "Group," or "we".

Note 1. Summary of Significant Accounting Policies

Basis of Presentation

The unaudited condensed consolidated financial statements included herein (the "Unaudited Condensed Consolidated Financial Statements") have been prepared by Criteo pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") have been condensed or omitted pursuant to such rules and regulations. However, the Company believes that the disclosures are adequate to make the information presented not misleading. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, ~~2021,~~2022, filed with the SEC on February ~~25, 2022.~~24, 2023. The unaudited condensed consolidated financial statements included herein reflect all adjustments (consisting of normal, recurring adjustments) which are, in the opinion of management, necessary to state fairly the results for the interim periods presented. The results of operations for the interim periods presented are not necessarily indicative of the operating results to be expected for any subsequent interim period or for the fiscal year.

Conformity with U.S. GAAP requires the use of estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses in the condensed consolidated financial statements and accompanying notes. We base our estimates and judgments on historical information and on various other assumptions that we believe are reasonable under the circumstances. Our actual results may differ from these estimates. U.S. GAAP requires us to make estimates and judgments in several areas, including, but not limited to: (1) gross vs net assessment in revenue recognition ~~criteria,~~ (2) allowances for credit losses, (3) ~~research tax credits, (4)~~ income taxes, including (i) recognition of deferred tax assets arising from the subsidiaries projected taxable profit for future years, (ii) evaluation of uncertain tax positions associated with our transfer pricing policy and (iii) recognition of income tax position in respect with tax reforms recently enacted in countries we operate, (5)(4) assumptions used in valuing acquired assets and assumed liabilities in business combinations, ~~(6)~~(5) assumptions used in the valuation of goodwill, intangible assets and ~~right of use assets - operating lease, and (7)~~leases, (6) assumptions used in the valuation model to determine the fair value of share-based compensation ~~plan.~~plan, and (7) assumptions surrounding the recognition and valuation of contingent liabilities and losses.

There have been no changes to our significant accounting policies described in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2021.~~2022.

109

Accounting Pronouncements Adopted in ~~2022~~2023

~~Effective January 1, 2022, we have~~No standards were adopted in 2023 which had an impact on the Financial Accounting Standards Board ("FASB") Accounting Standards Update ("ASU") Government Assistance (Topic 832): Disclosure by Business Entities about Government Assistance (ASU 2021-10), which improves the transparency of government assistance received by most business entities by requiring the disclosure of: (1) the types of government assistance received; (2) the accounting for such assistance; and (3) the effect of the assistance on a business entity'sCompany's financial statements. ~~The impacts on our annual consolidated financial statements will be limited as a result of adoption of this standard.~~

Recent Accounting Pronouncements

Accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on the Company’s Consolidated Financial Statements upon adoption.

Note 2. Business acquisitions

Iponweb

On August 1, 2022, the Company, Iponweb Holding Limited, Exezars Limited (a subsidiary of Iponweb Holding Limited and collectively with Iponweb Holding Limited, the “Sellers”), Mr. Ljubisa Bogunovic, in his capacity as trustee of the “IW General Management Trust” and Mr. Boris Mouzykantskii, founder and Chief Executive Officer of Iponweb Holding Limited (the “Founder”) entered into an amended and restated Framework Purchase Agreement (the “FPA”), amending and restating the previously disclosed framework purchase agreement, dated December 22, 2021, which provided for the acquisition of the business of Iponweb Holding Limited (the "Iponweb business"), a market-leading AdTech company with world-class media trading capabilities, by the Company (the “Iponweb Acquisition”).

This business combination is composed of an asset purchase of Iponweb intellectual property and other intangible rights and a share purchase of 100% of the share capital and voting rights of nine Iponweb operational legal entities.

Purchase price. The purchase price, as per ASC 805, was ~~$287.6~~$290.2 million ~~(subject to post-close purchase price adjustments)~~ for the Iponweb business, out of which $61.2 million represents the fair value of the contingent ~~consideration and is payable based upon the achievement of certain net revenue targets by the Iponweb business for the 2022 and 2023 fiscal years. The FPA also provides for~~consideration. This contingent consideration is payable in cash to the Sellers in an amount up to $100 million, conditioned upon the achievement of certain net revenue targets by the Iponweb business for the 2022 and 2023 fiscal years.

Separate compensation arrangement. The Company transferred Treasury shares with a fair value of $70.2 million to Iponweb's Sellers, subject to lock-up conditions. As these shares are subject to a lock-up period that expires in three installments on each of the first three anniversaries of the Iponweb Acquisition, unless the Founder's employment agreement is terminated under certain circumstances during the pendency of such lock-up period, the $70.2 million fair value was not included in the purchase price consideration above and will be accounted for separately from the business combination as a stock compensation expense. See Note 11 for further discussion.

Financing. The acquisition was financed by available cash resources, and in connection with the Acquisition, the Company drew down €50.0 million ($51.1 million) for a one-month period on its then-current revolving credit facility (repaid prior to quarter end) to provide additional liquidity.

Assets acquired and liabilities assumed. The transaction was accounted for as a business acquisition. The purchase price allocation ~~is in progress and we expect to complete this analysis within one year from the Acquisition Date.~~has been completed.

On the Acquisition Date, assets acquired and liabilities assumed by major asset class before purchase price allocation are as follow:

1110


	Estimated fair values
	(in millions)
Cash and cash equivalents	$	93.3
Trade receivables	~~113.3~~100.7
Other current assets	~~1.0~~1.1
Technology	90.2
Customer relationships	7.2
Other non-current assets	~~56.1~~59.0
Trade Payables	~~(192.5)~~(191.5)

Other current liabilities	~~(13.7)~~(3.1)
Other non-current liabilities	~~(52.2)~~(54.3)
Net assets acquired	$	~~5.3~~102.6

Developed technology represents the estimated fair value of the features underlying the Iponweb products as well as the platform providing services to Iponweb customers. Customer relationships represent the estimated fair value of the underlying relationships with Iponweb customers, including the fair value of unbilled and unrecognized contracts yet to be fulfilled. The estimated useful lives of technologies acquired and customer relationships are four and nine years, respectively.

In the Iponweb business's opening balance sheet, Criteo recognized ~~an $18.0~~a $17.6 million liability related to the Iponweb business's uncertain tax positions in accordance with ASC 740. The Company also recognized a ~~$32.7~~$33.7 million provision in connection with the Iponweb business, accounted for under ASC 450 Contingencies. As part of the Acquisition, the Sellers agreed to indemnify Criteo for losses related to certain liabilities, up to an amount of $50.0 million. As such, we have recognized an indemnification asset of $50.0 million which is recorded as part of "Other non-current assets" on the consolidated statement of financial position.

~~Preliminary goodwill.~~

Goodwill. The Company ~~is assessing~~has completed the ~~fair value estimate~~valuation of assets acquired and liabilities assumed as part of the Iponweb Acquisition, based on facts and circumstances that existed as of the Acquisition Date. ~~This measurement period will not exceed one year from the Acquisition Date.~~ The excess of the purchase price over the fair value of net assets acquired ishas been allocated to goodwill. The ~~preliminary~~ goodwill of ~~$282.3~~$187.6 million is primarily attributable to synergies expected to be realized from leveraging our technological capabilities and from the existence of an assembled workforce.

Our fair value estimate of assets acquired and liabilities assumed is pending the completion of certain items including the final determination of the purchase price and the final assessment of the fair value of the assets acquired and liabilities assumed, including those related to intangible assets. Accordingly, there could be material adjustments to our consolidated financial statements, including changes in our amortization expense related to the valuation of intangible assets and their respective useful lives, among other adjustments.

Acquisition costs. Acquisition related costs of ~~$7.1 million and $11.5~~$12.58 million were recorded within general and administrative expenses on the consolidated statements of comprehensive income for the ~~three and nine~~twelve months ended ~~September 30, 2022, respectively.~~December 31, 2022. In the period ending March 31, 2023, we did not record any acquisition related costs.

Impact on profit and loss. The Company's consolidated statements of operations for the ~~nine~~three months ended ~~September 30, 2022 includes~~March 31, 2023 include Iponweb's revenues of ~~$18.5~~$25.1 million and pretax income (loss) of ~~$0.5 million for the period from the Acquisition Date to September 30, 2022.~~$2.4 million.

On a pro-forma basis, assuming the Acquisition occurred on January 1, 2021, Criteo's consolidated pro-forma revenue and net income or loss would have been as follows:

Pro Forma Consolidated Statement of Operations Data
Three Months Ended Nine Months Ended
September 30,
2022 September 30,
2021 September 30,
2022 September 30,
2021
(in thousands)
Revenue $ 473,859 $ 532,986 $ 1,512,605 $ 1,670,941
Net Income (loss) 6,709 25,510 (4,079) $ 66,720


		Pro Forma Consolidated Statement of Operations Data
	Three Months Ended
			March 31, 2023		March 31, 2022
		(in thousands)
Revenue			$	445,016	$	563,397
Net Income (loss)			(12,071)		16,722

1211

The historical consolidated financial information has been adjusted in the pro forma combined financial statements to give the effect to pro forma events that are directly attributable to the business combination and are reasonably estimable. The pro forma information is for informational purposes only and is not indicative of the results of operations that would have been achieved if the Acquisition had taken place at the beginning the Company's fiscal year 2021.

Brandcrush

On February 28, 2023 we completed the acquisition of all of the outstanding shares of Brandcrush Inc. ("Brandcrush"). The purchase price for the acquisition of shares was $7.1 million. The acquisition was financed by available cash resources. The transaction has been accounted for as a business combination under the acquisition method of accounting. A preliminary valuation of the fair value of Brandcrush’s assets acquired was performed as of February 28, 2023, resulting in the identification of technology of $3.5 million. Provisional goodwill amounted to $5.0 million, subject to post-closing purchase price adjustments. Once this valuation analysis is finalized, the estimate of the fair value of the assets acquired and liabilities assumed may be adjusted. The Company will finalize these amounts no later than one year from the acquisition date. In addition, acquisition costs amounting to $0.4 million were fully expensed as incurred.

1312

Note 3. Segment information

Reportable segments

The Company reports segment information based on the "management" approach. The management approach designates the internal reporting used by management for making decisions and assessing performance as the source of the Company's reportable segments. ~~As a result of the Iponweb Acquisition, the Company reassessed its operating and reportable segments in accordance with ASC 280, Segment Reporting. Effective August 1, 2022, the~~The Company reports its results of operations through the following three segments: Marketing Solutions, Retail Media and Iponweb.

–Marketing Solutions: This segment allows commerce companies to address multiple marketing goals by engaging their consumers with personalized ads across the web, mobile and offline store environments.

–Retail Media: This segment allows retailers to generate advertising revenues from consumer brands, and/or to drive sales for themselves, by monetizing their data and audiences through personalized ads, either on their own digital property or on the open Internet, that address multiple marketing goals.

–Iponweb: This segment specializes in building real-time advertising technology and trading infrastructure, delivering advanced media buying, selling, and packaging capabilities for media owners, agencies, performance advertisers, and 3rd-party ad tech platforms.

Segment operating results, Contribution ex-TAC, is Criteo's segment profitability measure and reflects our gross profit plus other costs of revenue.

The following table shows revenue by reportable segment:


		Three Months Ended				Nine Months Ended					Three Months Ended
		September 30, 2022		September 30, 2021		September 30, 2022		September 30, 2021				March 31, 2023		March 31, 2022
		(in thousands)										(in thousands)
Marketing Solutions	Marketing Solutions	$	387,288	458,622		$	1,291,599	1,429,277		Marketing Solutions		$	381,907	463,888
Retail Media	Retail Media	41,170		49,958		142,516		171,691		Retail Media		38,021		46,679
Iponweb	Iponweb	18,463		—		18,463		—		Iponweb		25,088		—
Total Revenue	Total Revenue	$	446,921	$	508,580	$	1,452,578	$	1,600,968	Total Revenue		$	445,016	$	510,567

The following table shows Contribution ex-TAC by reportable segment and its reconciliation to the Company’s Consolidated Statements of Operation:

1413


		Three Months Ended				Nine Months Ended					Three Months Ended
		September 30, 2022		September 30, 2021		September 30, 2022		September 30, 2021				March 31, 2023		March 31, 2022
		(in thousands)										(in thousands)
Contribution ex-TAC	Contribution ex-TAC									Contribution ex-TAC
Marketing Solutions	Marketing Solutions	$	158,022	$	182,124	$	522,079	$	567,774	Marketing Solutions		$	158,178	$	186,088
Retail Media	Retail Media	36,893		28,837		104,278		76,830		Retail Media		37,352		30,829
Iponweb	Iponweb	18,463		—		18,463				Iponweb		25,088		—
		$	213,378	$	210,961	$	644,820	$	644,604			$	220,618	$	216,917

Other costs of sales	Other costs of sales	(33,771)		(34,935)		(96,214)		(107,011)		Other costs of sales		(39,109)		(32,893)
Gross profit	Gross profit	$	179,607	$	176,026	$	548,606	$	537,593	Gross profit		$	181,509	$	184,024
Operating expenses	Operating expenses									Operating expenses
Research and development expenses	Research and development expenses	(42,725)		(33,345)		(118,248)		(106,957)		Research and development expenses		(63,590)		(34,027)
Sales and operations expenses	Sales and operations expenses	(90,051)		(75,619)		(278,363)		(235,724)		Sales and operations expenses		(101,242)		(88,999)
General and administrative expenses	General and administrative expenses	(42,353)		(34,877)		(176,361)		(108,779)		General and administrative expenses		(40,170)		(33,336)
Total Operating expenses	Total Operating expenses	(175,129)		(143,841)		(572,972)		(451,460)		Total Operating expenses		(205,002)		(156,362)

Income (loss) from operations	Income (loss) from operations	$	4,478	$	32,185	$	(24,366)	$	86,133	Income (loss) from operations		$	(23,493)	$	27,662
Financial and Other Income (Expense)		3,485		(154)		23,927		(1,391)
Financial and Other Income										Financial and Other Income		6,827		4,030
Income (loss) before tax	Income (loss) before tax	$	7,963	$	32,031	$	(439)	$	84,742	Income (loss) before tax		$	(16,666)	$	31,692

The Company's chief operating decision maker, or CODM, does not review any other financial information for our three segments, other than Contribution ex-TAC, at the reportable segment level.

Note 4. Cash, Cash Equivalents, Marketable Securities and Restricted Cash

Fair Value Measurements


	As of March 31, 2023
	Cash and Cash Equivalent		Marketable Securities
	(in thousands)
Cash	228,055		$	—
Level 2
Term deposits and notes	77,607		32,043
Total	$	305,662	$	32,043


	As of December 31, 2022
	Cash and Cash Equivalent		Marketable Securities
	(in thousands)
Cash	282,293		$	—
Level 2
Term deposits and notes	65,907		25,098
Total	$	348,200	$	25,098

~~Note 4. Financial Instruments~~

~~Financial assets~~

~~The maximum exposure to credit risk at the end of each reported period is represented by the carrying amount of financial assets and summarized in the following table:~~

September 30, 2022 December 31, 2021
(in thousands)
Trade receivables, net of allowances 576,082 581,988
Other taxes 75,795 73,388
Other current assets 34,347 34,182
Non-current financial assets 6,864 6,436
Restricted cash 100,000 —
Marketable securities 10,000 55,299
Total $ 803,088 $ 751,293

For our financial assets, other than trade receivables, net of allowances, the fair value approximates the carrying amount, given the nature of the financial assets and the maturity of the expected cash flows.

~~Financial Liabilities~~
September 30, 2022 December 31, 2021
(in thousands)
Trade payables $ 576,762 $ 430,245
Other taxes 56,894 60,236
Employee-related payables 72,897 98,136
Other current liabilities 60,810 39,523
Financial liabilities 270 1,002
Total $ 767,633 $ 629,142

~~The fair value of financial liabilities approximates the carrying amount, given the nature of the financial liabilities and the maturity of the expected cash outflows.~~

~~Fair Value Measurements~~

~~We measure the fair value of our cash equivalents and marketable securities, which include interest-bearing bank deposits, as level 2 measurements because they are valued using observable market data.~~

Financial assets or liabilities include derivative financial instruments used to manage our exposure to the risk of exchange rate fluctuations. These instruments are considered level 2 financial instruments as they are measured using valuation techniques based on observable market data.

~~Derivative Financial Instruments~~

Derivatives consist of foreign currency forward contracts that we use to hedge intercompany transactions and other monetary assets or liabilities denominated in currencies other than the local currency of a subsidiary. We recognize gains and losses on these contracts in financial income (expense), and their position on the balance sheet is based on their fair value at the end of each respective period. These instruments are considered level 2 financial instruments as they are measured using valuation techniques based on observable market data.

September 30, 2022 December 31, 2021
(in thousands)
Derivative Assets:
Included in other current assets $ 385 $ 60
Derivative Liabilities:
Included in financial liabilities - current portion $ — $ —

~~The fair value of derivative financial instruments approximates the notional amount, given the nature of the derivative financial instruments and the maturity of the expected cash flows.~~

~~Cash and Cash Equivalents~~

~~The following table presents for each reporting period, the breakdown of cash and cash equivalents:~~
September 30, 2022 December 31, 2021
(in thousands)
Cash equivalents $ 41,139 $ 137,228
Cash on hand 266,184 378,299
Total cash and cash equivalents $ 307,323 $ 515,527

Cash equivalents are investments in interest–bearing bank deposits which meet ASC 230—Statement of Cash flows criteria: short-term, highly liquid investments, for which the risks of changes in value are considered to be insignificant. Interest-bearing bank deposits are considered level 2 financial instruments as they are measured using valuation techniques based on observable market data.

~~For our cash and cash equivalents, the~~The fair value of term deposits approximates ~~the~~their carrying amount given the nature of the ~~cash~~investments, its maturities and ~~cash equivalents and the maturity of the~~ expected future cash flows.

In addition to the cash and cash equivalents, we have $25.0 million of restricted cash - current and $75.0 million of restricted cash - non-current due to the Iponweb Acquisition (refer to Note 2). The balance of cash and cash equivalents of $307.3 million and restricted cash of $100.0 million reconciles to Net cash and cash equivalents and restricted cash at the end of period presented in the Statement of Cash Flows. We have not reported restricted cash as of December 31, 2021 or as of September 30, 2021.

Marketable Securities

The following table presents for each reporting period, the breakdown of the fair value of marketable securities:


		September 30, 2022		December 31, 2021			March 31, 2023		December 31, 2022

		(in thousands)					(in thousands)
Securities Available-for-sale
Term Deposits		$	—	$	22,652

Securities Held-to-maturity	Securities Held-to-maturity					Securities Held-to-maturity
Term Deposits	Term Deposits	$	10,000	$	32,647	Term Deposits	$	32,043	$	25,098
Total	Total	$	10,000	$	55,299	Total	$	32,043	$	25,098

The gross unrealized gains on our marketable securities were not material as of ~~September 30, 2022.~~March 31, 2023.

Term deposits are considered a level 2 financial instrument as they are measured using valuation techniques based on observable market data.

The following table classifies our marketable securities by contractual maturities:


	Held-to-maturity		Available-for-sale
	~~September 30, 2022~~March 31, 2023

	(in thousands)
Due in one year	$	~~10,000~~21,168	$	—
Due in one to five years	$	—10,875	$	—
Total	$	~~10,000~~32,043	$	—

Restricted Cash

As part of the Iponweb Acquisition, ~~(refer to Note 2),~~ we ~~have~~had deposited ~~$100.0~~$100.0 million of cash into an escrow account containing withdrawal conditions. The cash secures the Company's potential payment of Iponweb Acquisition contingent consideration to the Sellers, which is conditioned upon the achievement of certain revenue targets by the Iponweb business for the 2022 and 2023 fiscal years. We have paid the contingent consideration of $22.0 million for the 2022 fiscal year in the quarter ended March 31, 2023.

~~September 30, 2022~~

~~December 31, 2021~~

~~(in thousands)~~

~~Restricted cash – current~~

~~25,000~~

—

~~Restricted cash – non-current~~

~~75,000~~

—

~~Total~~

~~100,000~~

—


	March 31, 2023		December 31, 2022

	(in thousands)

Restricted cash – current	$	75,001	$	25,000
Restricted cash – non-current	$	—	$	75,000
Total	$	75,001	$	100,000

1815

Note 5. Trade Receivables

The following table shows the breakdown in trade receivables net book value for the presented periods:

September 30, 2022 December 31, 2021
(in thousands)
Trade accounts receivables $ 633,694 $ 627,379
(Less) Allowance for credit losses (57,612) (45,391)
Net book value at end of period $ 576,082 $ 581,988

~~Changes in allowance for credit accounts are summarized below:~~

2022 2021
(in thousands)
Balance at January 1 $ (45,391) $ (39,899)
Allowance for credit losses (17,735) (9,765)
Reversal of provision 6,319 3,895
Other (4,732) —
Currency translation adjustment 3,927 1,039
Balance at September 30 $ (57,612) $ (44,730)

~~We write off accounts receivable balances once the receivables are no longer deemed collectible.~~

~~During the nine month period ended September 30, 2022, and September 30, 2021, the Company recovered~~ ~~$2.4 million,~~ ~~and $2.0 million, respectively, previously reserved for, and accounted for this as a reversal of provision. Other includes $(4.7) million related to~~ ~~the Iponweb acquisition.~~

~~As of September 30, 2022 and December 31, 2021 no customer accounted for 10% or more of trade receivables.~~


	March 31, 2023		December 31, 2022

	(in thousands)
Trade accounts receivables	$	596,368	$	756,741
(Less) Allowance for credit losses	(50,528)		(47,792)
Net book value at end of period	$	545,840	$	708,949

Note 6. Other Current Assets

The following table shows the breakdown in other current assets net book value for the presented periods:


		September 30, 2022		December 31, 2021			March 31, 2023		December 31, 2022

		(in thousands)					(in thousands)
Prepayments to suppliers	Prepayments to suppliers	$	11,000	$	9,640	Prepayments to suppliers	$	11,910	$	12,421
Other debtors	Other debtors	647		9,259		Other debtors	10,806		6,768
Prepaid expenses	Prepaid expenses	22,316		15,283		Prepaid expenses	32,417		24,549
Derivative instruments		384		—
Other current assets						Other current assets	2,983		8,128

Net book value at end of period	Net book value at end of period	$	34,347	$	34,182	Net book value at end of period	$	58,116	$	51,866

Prepaid expenses mainly consist of ~~cash paid~~amounts related to SaaS arrangements.

1916

Note 7. Other Current and Non-Current Liabilities

Other current liabilities are presented in the following table:


		September 30, 2022		December 31, 2021			March 31, 2023		December 31, 2022

		(in thousands)					(in thousands)
Current liabilities to clients		$	17,154	$	16,423
Customer prepayments						Customer prepayments	$	13,196	$	16,334
Rebates	Rebates	12,914		17,423		Rebates	16,871		17,671
Accounts payable relating to capital expenditures	Accounts payable relating to capital expenditures	5,529		4,507		Accounts payable relating to capital expenditures	28,978		25,414
Other creditors	Other creditors	5,413		1,170		Other creditors	4,846		2,388
Deferred revenue						Deferred revenue	27		$	10
Earn out liability – current	Earn out liability – current	19,800		$	—	Earn out liability – current	45,449		$	21,640
Total	Total	$	60,810	$	39,523	Total	$	109,367	$	83,457

Other non-current liabilities are presented in the following table:


		September 30, 2022		December 31, 2021			March 31, 2023		December 31, 2022

		(in thousands)					(in thousands)
Earn out liability – non-current	Earn out liability – non-current	$	41,413	$	—	Earn out liability – non-current	$	—	$	44,696
Uncertain tax positions	Uncertain tax positions	18,001		—		Uncertain tax positions	18,055		17,980
Other	Other	6,204		9,886		Other	8,230		6,550
Total	Total	$	65,618	$	9,886	Total	$	26,285	$	69,226

Earn out liability

As part of the Iponweb Acquisition ~~(refer to Note 2)~~, the Sellers are entitled to contingent consideration of a maximum of $100.0 million, which is conditioned upon the achievement of certain revenue targets by the Iponweb business for the 2022 and 2023 fiscal years. The related earn out liability is valued and discounted using management's best estimate of the consideration that will be paid in ~~2023~~2024 (current portion) ~~and 2024 (non-current portion)~~. The contingent consideration for fiscal year 2022 of $22.0 million has been paid in the period ended March 31, 2023.

Uncertain tax positions

Other non-current liabilities also include approximately $18 million related to uncertain tax positions as of ~~September 30, 2022.~~March 31, 2023. These uncertain tax positions are related to the Iponweb Acquisition. We have recorded an indemnification asset of $17.3 million in relation to these uncertain tax positions as the Company is indemnified against certain tax liabilities under the FPA. The indemnification asset is recorded as part of "Other non-current assets" on the consolidated statement of financial position.

2017

Note 8. Leases

The components of lease expense are as follows:

Three Months Ended
September 30, 2022 September 30, 2021
Offices Data Centers Total Offices Data Centers Total
(in thousands)
Lease expense $ 2,362 $ 4,806 $ 7,168 $ 2,383 $ 5,703 $ 8,086
Short term lease expense 149 — 149 141 26 167
Variable lease expense 107 91 198 63 66 129
Sublease income (47) — (47) (233) — (233)
Total operating lease expense $ 2,571 $ 4,897 $ 7,468 $ 2,354 $ 5,795 $ 8,149


		Nine Months Ended													Three Months Ended
		September 30, 2022						September 30, 2021							March 31, 2023						March 31, 2022
		Offices		Data Centers		Total		Offices		Data Centers		Total			Offices		Data Centers		Total		Offices		Data Centers		Total
		(in thousands)													(in thousands)
Lease expense	Lease expense	$	11,114	$	15,042	$	26,156	$	15,800	$	18,561	$	34,361	Lease expense	$	3,704	$	5,576	$	9,280	$	4,409	$	5,207	$	9,616
Short term lease expense	Short term lease expense	504		5		509		342		40		382		Short term lease expense	142		9		151		151		3		154
Variable lease expense	Variable lease expense	182		182		364		307		268		575		Variable lease expense	89		4		93		50		5		55
Sublease income	Sublease income	(482)		—		(482)		(709)		—		(709)		Sublease income	(229)		—		(229)		(172)				(172)
Total operating lease expense	Total operating lease expense	$	11,318	$	15,229	$	26,547	$	15,740	$	18,869	$	34,609	Total operating lease expense	$	3,706	$	5,589	$	9,295	$	4,438	$	5,215	$	9,653

As of ~~September 30, 2022,~~March 31, 2023, we have additional operating leases, that have not yet commenced which will result in additional operating lease liabilities and right of use assets:

~~Offices~~

~~Data Centers~~

~~(in thousands)~~

~~Additional operating lease liabilities~~

—

~~7,387~~

~~Additional right of use assets~~

—

~~7,387~~


	Offices		Data Centers
	(in thousands)
Additional operating lease liabilities	$	1,081	$	26,954
Additional right of use assets	$	1,081	$	26,954

These operating leases will commence during the fiscal years ending December 31, ~~2022, December 31,~~ 2023, 2024 and ~~December 31, 2024.~~2025, respectively.

2118

Note 9. Employee Benefits

Defined Benefit Plans

According to the French law and the Syntec Collective Agreement, French employees are entitled to compensation paid on retirement.

The following table summarizes the changes in the projected benefit obligation:


	Projected benefit obligation
	(in thousands)
Projected benefit obligation present value at January 1, ~~2021~~	$	~~6,167~~
~~Service cost~~	~~1,324~~
~~Interest cost~~	51
~~Actuarial losses (gains)~~	~~(1,543)~~
~~Currency translation adjustment~~	~~(468)~~
~~Projected benefit obligation present value at December 31, 2021~~2022	$	5,531
Service cost	~~786~~1,756
Interest cost	5573
Actuarial losses (gains)	~~(2,937)~~(3,311)
Currency translation adjustment	~~(599)~~(341)
Projected benefit obligation present value at ~~September 30,~~December 31, 2022	$	~~2,836~~3,708
Service cost	176
Interest cost	41
Actuarial losses (gains)	136
Currency translation adjustment	77
Projected benefit obligation present value at March 31, 2023	$	4,138

The Company does not hold any plan assets for any of the periods presented.

The main assumptions used for the purposes of the actuarial valuations are listed below:

Nine Months Ended

Year ended

Three Months Ended

Year ended

September 30, 2022

December 31, 2021

March 31, 2023

December 31, 2022

Discount rate (Corp AA)

4.25%

1.40%

Discount rate (Corp AA)

4.10%

4.25%

Expected rate of salary increase

Expected rate of social charges

49% - 50%

Expected rate of social charges

48%

Expected staff turnover

—% - 17.8%

Expected staff turnover

0% - 17.8%

Estimated retirement age

Progressive table

Estimated retirement age

Progressive table

Life table

TH-TF 2000-2002 shifted

Life table

TH-TF 2000-2002 shifted

2219

Defined Contribution Plans

The total expense represents contributions payable to these plans by us at specified rates.

In some countries, the Group’s employees are eligible for pension payments and similar financial benefits. The Group provides these benefits via defined contribution plans. Under defined contribution plans, the Group has no obligation other than to pay the agreed contributions, with the corresponding expense charged to income for the year. The main contributions concern France, the United States (for 401k plans), and the United Kingdom.

Three Months Ended Nine Months Ended
September 30,
2022 September 30,
2021 September 30,
2022 September 30,
2021
(in thousands)
Defined contributions plans included in personnel expenses $ (3,590) $ (3,638) $ (13,726) $ (12,638)


	Three Months Ended
		March 31, 2023		March 31, 2022
		(in thousands)
Defined contributions plans included in personnel expenses		$	(4,078)	$	(3,858)

Note 10. Revenue

Disaggregation of revenue

The following table presents our disaggregated revenues:

Marketing Solutions Retail Media Iponweb Total
For the three months ended (in thousands)
September 30, 2022 $ 387,288 $ 41,170 $ 18,463 $ 446,921
September 30, 2021 $ 458,622 $ 49,958 $ — $ 508,580


	Marketing Solutions		Retail Media		Iponweb		Total
For the three months ended	(in thousands)

March 31, 2023	$	381,907	$	38,021	$	25,088	$	445,016
March 31, 2022	$	463,888	$	46,679	$	—	$	510,567

Marketing Solutions Retail Media Iponweb Total
For the nine months ended (in thousands)
September 30, 2022 $ 1,291,599 $ 142,516 $ 18,463 $ 1,452,578
September 30, 2021 $ 1,429,277 $ 171,691 $ — $ 1,600,968

2320

Note 11. Share-Based Compensation

Equity awards Compensation Expense

~~Criteo's board~~

Equity awards compensation expense recorded in the consolidated statements of ~~directors ("board of directors") has been authorized by the general meeting~~operations was as follows:


	Three Months Ended
	2023		2022
	(in thousands)
Research and Development	(16,172)		(3,968)
Sales and Operations	(4,045)		(2,566)
General and Administrative	(4,951)		(2,955)
Total equity awards compensation expense	(25,168)		(9,489)
Tax benefit from equity awards compensation expense	1,700		1,215
Total equity awards compensation expense, net of tax effect	$	(23,468)	$	(8,274)

The breakdown of the ~~shareholders~~equity award compensation expense by instrument type was as follows:


	Three Months Ended
	2023		2022
	(in thousands)
Share options	(38)		(58)
Lock-up shares	(10,591)		—
Restricted stock units / Performance stock units	(14,079)		(8,983)
Non-employee warrants	(460)		(448)
Total equity awards compensation expense	(25,168)		(9,489)
Tax benefit from equity awards compensation expense	1,700		1,215
Total equity awards compensation expense, net of tax effect	$	(23,468)	$	(8,274)

A detailed description of each instrument type is provided below.

Share Options

Stock options granted under the Company’s stock incentive plans generally vest over four years, subject to the holder’s continued service through the vesting date and expire no later than 10 years from the date of grant.

In the following tables, exercise prices, grant ~~employee warrants~~ ~~(Bons de Souscription de Parts de Créateur d’Entreprise or "BSPCEs"),~~date share ~~options~~ ~~(Options de Souscription d'Actions or "OSAs"),~~ ~~restricted share units~~ ~~("RSUs")~~ fair values and ~~non-employee warrants (~~fair value per equity instruments are provided in euros, as the Company is incorporated in France and the euro is the currency used for the grants.


	Options Outstanding
	Number of Shares Underlying Outstanding Options	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value

Outstanding - December 31, 2022	372,329
Options granted	—
Options exercised	(12,363)
Options forfeited	(400)
Options canceled	—
Options expired	(300)
Outstanding - March 31, 2023	359,266	€	20.65	4.49	€	16.25

Vested and exercisable - March 31, 2023	288,866

~~Bons de Souscription d'Actions or "BSAs")~~

~~During~~The aggregate intrinsic value represents the ~~nine months ended September 30, 2022, there were~~ ~~three grants of RSUs under~~difference between the ~~Employee Share Option Plan 14~~exercise price of the options and ~~Plan 15 as defined in~~ ~~Note 20~~ ~~to our audited consolidated financial statements included in our Annual Report~~the fair market value of common stock on ~~Form 10-K for~~ the ~~year ended December 31, 2021.~~

~~On February 24, 2022, 348,133 RSUs~~date of exercise. No new stock options were granted in the period ending March 31, 2023. As of March 31, 2023, unrecognized stock-based compensation $0.1 million related to ~~Criteo employees subject to continued employment and 384,277 PSUs were granted to members~~unvested stock options will be recognized on a straight-line basis over a weighted average period of ~~the management subject to continued employment.~~1 year.

~~On April 28, 2022, 1,626,911 RSUs were granted to Criteo employees subject to continued employment and 79,907 PSUs were granted to members of the management subject to continued employment.~~

~~On July 28, 2022 193,420 RSUs were granted to Criteo employees subject to continued employment.~~Lock up shares

On August 1, 2022, 2,960,243 Treasury shares were transferred to the Founder (referred to as Lock Up Shares or "LUS"), see Note 2), as partial consideration for the Iponweb Acquisition. As these shares are subject to a lock-up period that expires in three installments on each of the first three anniversaries of the Iponweb Acquisition, unless the Founder's employment agreement is terminated under certain circumstances during the pendency of such lock-up period, they are considered as equity settled share-based payments under ASC 718 and are accounted over the three-year vesting ~~period (included~~period. The share based compensation expense is included in Research and Development expenses on the ~~column RSU/PSU/LUS in the table above).~~Consolidated Statement of Income. The shares were valued based on the volume weighted average price of one ADS traded on Nasdaq during the twenty (20) trading days immediately preceding July 28, 2022.

~~There have been no changes in~~


	Shares	Weighted-Average Grant date Fair Value Per Share


Outstanding as of December 31, 2022	2,960,243	—
Granted	—	—
Vested	—	—
Forfeited	—	—
Outstanding as of March 31, 2023	2,960,243	$	23.94

At March 31, 2023, the ~~vesting and method~~Company had unrecognized stock-based compensation relating to restricted stock of ~~valuation~~approximately $45.3 million, which is expected to be recognized over a period of 3 years starting from the BSPCEs, OSAs, RSUs, or BSAs from what was disclosed in Note 20 to the consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2021, filed with the SEC on February 25,grant date of August 1, 2022.

~~Change in number of outstanding BSPCE~~Restricted Stock Units / ~~OSA / RSU / PSU / LUS / BSA~~

OSA/BSPCE RSU/PSU/LUS BSA Total
Balance at January 1, 2022 570,801 5,299,356 343,775 6,213,932
Granted — 5,592,890 — 5,592,890
Exercised (OSA/BSPCE/BSA) (63,643) — — (63,643)
Vested (RSU/LUS) — (1,392,436) — (1,392,436)
Forfeited (107,802) (839,730) — (947,532)
Expired — — — —
Balance at September 30, 2022 399,356 8,660,080 343,775 9,403,211
Performance Stock Units

~~Breakdown~~Restricted stock awards generally vest over four years, subject to the holder’s continued service and/or certain performance conditions through the vesting date.

In the following tables, exercise prices, grant date share fair values and fair value per equity instruments are provided in euros, as the Company is incorporated in France and the euro is the currency used for the grants.


	Shares (RSU)	Weighted-Average Grant date Fair Value Per Share


Outstanding as of December 31, 2022	5,349,955	—
Granted	497,821	—
Vested	(273,456)	—
Forfeited	(196,070)	—
Outstanding as of March 31, 2023	5,378,250	€	25.69

At March 31, 2023, the Company had unrecognized stock-based compensation relating to restricted stock of ~~the Closing Balance~~approximately $81.1 million, which is expected to be recognized over a weighted-average period of 3.15 years.

OSA/BSPCE RSU/PSU/LUS BSA
Number outstanding 399,356 8,660,080 343,775
Weighted-average exercise price € 21.49 NA € 15.12
Number vested 277,928 — 304,500
Weighted-average exercise price € 23.98 NA € 15.18
Weighted-average remaining contractual life of options outstanding, in years 4.68 NA 5.04

2422


	Shares (PSU)	Weighted-Average Grant date Fair Value Per Share


Outstanding as of December 31, 2022	522,467	—
Granted	356,402	—
Vested	(118,161)	—
Forfeited	—	—
Outstanding as of March 31, 2023	760,708	€	27.20

~~Reconciliation with~~At March 31, 2023, the ~~Unaudited Consolidated Statements~~Company had unrecognized stock-based compensation relating to restricted stock of ~~Income~~approximately $16.2 million, which is expected to be recognized over a weighted-average period of 3.56 years.

Three Months Ended
September 30, 2022 September 30, 2021
(in thousands)
R&D S&O G&A Total R&D S&O G&A Total
RSUs / LUSs $ (11,621) $ (4,572) $ (4,261) $ (20,454) $ (4,858) $ (3,818) $ (3,931) $ (12,607)
Share options / BSPCE — (5) (62) (67) — (58) (157) (215)
Total share-based compensation (11,621) (4,577) (4,323) (20,521) (4,858) (3,876) (4,088) (12,822)
BSAs — — (563) (563) — — (467) (467)
Total equity awards compensation expense $ (11,621) $ (4,577) $ (4,886) $ (21,084) $ (4,858) $ (3,876) $ (4,555) $ (13,289)

Non-employee warrants

Non-employee warrants generally vest over four years, subject to the holder’s continued service through the vesting date.


	Shares	Weighted-Average Grant date Fair Value Per Share		Weighted-Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value


Outstanding - December 31, 2022	302,775
Granted	—
Exercised	(52,223)
Canceled	—
Expired	—
Outstanding - March 31, 2023	250,552	€	17.65	5.27	€	19.25

Vested and exercisable - March 31, 2023	230,737

The aggregate intrinsic value represents the difference between the exercise price of the non-employee warrants and the fair market value of common stock on the date of exercise. No new stock non-employee warrants were granted in the period ending March 31, 2023. As of March 31, 2023, the instruments were fully vested.

Nine Months Ended
September 30, 2022 September 30, 2021
(in thousands)
R&D S&O G&A Total R&D S&O G&A Total
RSUs / LUSs $ (21,166) $ (9,892) $ (10,006) $ (41,064) $ (11,572) $ (9,026) $ (9,402) $ (30,000)
Share options / BSPCE — 197 (244) (47) — (240) (568) (808)
Total share-based compensation (21,166) (9,695) (10,250) (41,111) (11,572) (9,266) (9,970) (30,808)
BSAs — — (1,483) (1,483) — — (1,366) (1,366)
Total equity awards compensation expense $ (21,166) $ (9,695) $ (11,733) $ (42,594) $ (11,572) $ (9,266) $ (11,336) $ (32,174)

2523

Note 12. Financial and Other Income and Expenses

The condensed consolidated statements of income line item “Financial and Other income (expense)” can be broken down as follows:

Three Months Ended Nine Months Ended
September 30,
2022 September 30,
2021 September 30,
2022 September 30,
2021
(in thousands)
Financial income from cash equivalents $ 170 $ 179 $ 543 $ 505
Interest and fees (422) (445) (1,391) (1,491)
Interest on debt (332) (361) (1,076) (1,242)
Fees (90) (84) (315) (249)
Foreign exchange gain (loss) 3,795 952 24,384 (367)
Other financial expense (58) (840) 391 (38)
Total Financial and Other income (expense) $ 3,485 $ (154) $ 23,927 $ (1,391)


	Three Months Ended
			March 31, 2023		March 31, 2022
		(in thousands)

Financial income from cash equivalents			$	1,063	$	133
Interest and fees			(486)		(547)


Foreign exchange gains (losses)			(1,949)		4,463
Other financial income (expense)			8,199		(19)
Total Financial and Other income (expense)			$	6,827	$	4,030

The ~~$3.5 million financial and other income and the $23.9~~$6.8 million financial and other income for the three months ~~and nine months~~ ended ~~September 30, 2022, respectively,~~March 31, 2023, were driven by the recognition of a ~~positive~~negative impact of foreign exchange reevaluations net of related hedging and the up-front fees amortization, the non-utilization costs, and the financial expense relating to our available Revolving Credit Facility ~~financing.~~
financing, fully offset by the proceeds from disposal of non consolidated investments.

At ~~September 30, 2022,~~March 31, 2023, our exposure to foreign currency risk was centralized at Criteo S.A. and hedged using foreign currency swaps or forward purchases or sales of foreign currencies.

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Note 13. Income Taxes

Breakdown of Income Taxes

The tax provision for interim periods is determined using an estimate of our annual effective tax rate (“AETR”), adjusted for discrete items arising in the period. To calculate our estimated AETR, we estimate our income before taxes and the related tax expense or benefit for the full fiscal year (total of expected current and deferred tax provisions), excluding the effect of significant unusual or infrequently occurring items or comprehensive income items not recognized in the statement of income. Each quarter, we update our estimate of the annual effective tax rate, and if our estimated annual tax rate does change, we make a cumulative adjustment in that quarter. Our quarterly tax provision, and our quarterly estimate of our annual effective tax rate, are subject to significant volatility due to several factors including our ability to accurately predict our income (loss) before provision for income taxes in multiple jurisdictions and the changes in foreign exchange rates. Our effective tax rate in the future will depend on the portion of our profits earned within and outside of France.

On August 16, 2022, the "Inflation Reduction Act" (H.R. 5376) (the "IRA") was signed into law in the United States. Among other things, the IRA imposes a 15% corporate alternative minimum tax for tax years beginning after December 31, 2022, levies a 1% excise tax on net stock repurchases after December 31, 2022, and provides tax incentives to promote clean energy. We are still in the process of analyzing the provisions of the IRA. We do not currently expect the IRA to have a material impact on the Company's Consolidated Financial Statements.

The following table presents provision for income taxes:

Nine Months Ended
September 30, 2022 September 30, 2021
(in thousands)
Provision for income tax expense (benefit) $ 4,735 $ 22,033


	Three Months Ended
	March 31, 2023		March 31, 2022
	(in thousands)
Provision for income tax expense (benefit)	$	(4,595)	$	10,414

For the ~~nine~~three months ended ~~September 30,~~March 31, 2023 and March 31, 2022, ~~and September 30, 2021,~~ provision for incomes taxes is ~~$4.7~~$(4.6) million and ~~$22.0~~$10.4 million, respectively. The ~~nine~~$(4.6) million tax benefit was driven by the loss from operations. The three months ended ~~September 30, 2022~~March 31, 2023 provision for income taxes mainly differs from the nominal standard French rate of 25.0% due to ~~non-tax deductibility~~the application of a reduced income tax rate on the majority of the ~~loss contingency related to the CNIL matter as described~~technology royalties income in ~~Note 15 and a discrete tax expense related to change in valuation allowance for certain US deferred tax assets.~~France.

~~Current tax assets and liabilities~~

~~The total amount of current tax assets and liabilities consists mainly of prepayments of income taxes and credits of Criteo S.A., Criteo Corp., and Criteo GmbH.~~

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Note 14. Earnings Per Share

Basic Earnings Per Share

We calculate basic earnings per share by dividing the net income or loss for the period attributable to shareholders of the Parent by the weighted average number of shares outstanding.


		Three Months Ended				Nine Months Ended					Three Months Ended
		September 30, 2022		September 30, 2021		September 30, 2022		September 30, 2021				March 31, 2023		March 31, 2022
Net income (loss) attributable to shareholders of Criteo S.A.	Net income (loss) attributable to shareholders of Criteo S.A.	$	6,579	$	23,481	$	(6,448)	$	60,691	Net income (loss) attributable to shareholders of Criteo S.A.		$	(11,809)	$	20,587
Weighted average number of shares outstanding	Weighted average number of shares outstanding	60,318,114		60,873,594		60,431,597		60,759,613		Weighted average number of shares outstanding		56,256,082		60,738,299
Basic earnings per share	Basic earnings per share	$	0.11	$	0.39	$	(0.11)	$	1.00	Basic earnings per share		$	(0.21)	$	0.34

Diluted Earnings Per Share

We calculate diluted earnings per share by dividing the net income or loss attributable to shareholders of the Parent by the weighted average number of shares outstanding plus any potentially dilutive shares not yet issued from share-based compensation plans (refer to Note ~~10)~~11). There were no other potentially dilutive instruments outstanding as of ~~September 30, 2022~~March 31, 2023 and ~~September 30, 2021.~~March 31, 2022. Consequently, all potential dilutive effects from shares are considered.

For each period presented, a contract to issue a certain number of shares (i.e., share option, non-employee warrant, employee warrant ("BSPCE")) is assessed as potentially dilutive if it is “in the money” (i.e., the exercise or settlement price is lower than the average market price).

Three Months Ended Nine Months Ended
September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021
Net income (loss) attributable to shareholders of Criteo S.A. $ 6,579 $ 23,481 $ (6,448) $ 60,691
Weighted average number of shares outstanding of Criteo S.A. 60,318,114 60,873,594 60,431,597 60,759,613
Dilutive effect of :
Restricted share awards ("RSUs") 2,715,552 2,865,581 2,402,215 3,074,241
Share options and BSPCE 111,342 334,028 126,117 375,211
Share warrants 90,803 124,483 90,426 104,461
Weighted average number of shares outstanding used to determine diluted earnings per share 63,235,811 64,197,686 63,050,355 64,313,526
Diluted earnings per share $ 0.10 $ 0.37 $ (0.10) $ 0.94


	Three Months Ended
		March 31, 2023		March 31, 2022
Net income (loss) attributable to shareholders of Criteo S.A.		$	(11,809)	$	20,587
Weighted average number of shares outstanding of Criteo S.A.		56,256,082		60,738,299
Dilutive effect of :
Restricted share awards ("RSUs")		4,062,752		2,591,530
Share options and BSPCE		118,146		179,089
Share warrants		57,847		104,632
Weighted average number of shares outstanding used to determine diluted earnings per share		60,494,827		63,613,550
Diluted earnings per share		$	(0.20)	$	0.32

The weighted average number of securities that were anti-dilutive for diluted EPS for the periods presented but which could potentially dilute EPS in the future are as follows:


	Three Months Ended
		March 31, 2023	March 31, 2022

Restricted share awards		497,821	58,840
Share options and BSPCE		—	—

Weighted average number of anti-dilutive securities excluded from diluted earnings per share		497,821	58,840

Three Months Ended Nine Months Ended
September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021
Restricted share awards 44,850 — 162,876 396,937
Share options and BSPCE — — — —
Weighted average number of anti-dilutive securities excluded from diluted earnings per share 44,850 — 162,876 396,937

Note 15. Commitments and contingencies

~~Commitments~~Contingencies

~~Revolving Credit Facilities, Credit Line Facilities and Bank Overdrafts~~

~~On September 27, 2022,~~From time to time we ~~entered into a new Revolving Credit Facility ("RCF") with a five year tenor with a syndicate~~may become involved in legal proceedings or be subject to claims arising in the ordinary course of ~~banks which allows us to draw up to €407.0 million ($396.7 million).~~

our business. We are ~~also~~not presently a party to ~~short-term credit lines~~any legal proceedings that, if determined adversely to us, would individually or taken together have a material adverse effect on our business, results of operations, financial condition or cash flows. Regardless of the outcome, litigation can have an adverse impact on us because of defense and ~~overdraft facilities with HSBC plc, BNP Paribas~~settlement costs, diversion of management resources and LCL with an authorization to draw up to a maximum of €21.5 million ($21.0 million) in the aggregate under the short-term credit lines and overdraft facilities. As of September 30, 2022, we had not drawn on any of these facilities. Any loans or overdrafts under these short-term facilities bear interest based on the one month EURIBOR rate or three month EURIBOR rate. As these facilities are exclusively short-term credit and overdraft facilities, our banks have the ability to terminate such facilities on short notice.

~~Contingencies~~

~~Changes in provisions during the presented periods are summarized below:~~
Provision for employee-related litigation Other provisions Total
(in thousands)
Balance at January 1, 2022 1,117 1,942 3,059
Increase 91 63,936 64,027
Provision used (473) (302) (775)
Provision released not used (140) (398) (538)
Other — 32,731 32,731
Currency translation adjustments (121) (5,614) (5,735)
Balance at September 30, 2022 474 92,295 92,769
- of which current 474 59,564 60,038
- of which non-current — 32,731 32,731

other factors.

The amount of the provisions represents management’s latest estimate of the expected impact.

Other includes $32.7 million provisions related to certain items accounted for under "ASC 450 Contingencies". These risks were identified and recognized as part of the Iponweb Acquisition. We have recorded an indemnification asset in the full amount of the provision as the Company is indemnified against certain tax liabilities under the the FPA. The indemnification asset is recorded as part of "Other non current assets" on the consolidated statement of financial position.

Regulatory matters

~~As previously reported in our Annual Report on Form 10-K for the year ended December 31, 2021, in~~In November 2018, Privacy International filed a complaint with certain data protection authorities, including France's Commission Nationale de l'Informatique et des Libertés ("CNIL"), against Criteo and a number of other similarly situated advertising technology companies, arguing that certain of these companies' practices were not in compliance with the European Union's General Data Protection Regulation ("GDPR"). In January 2020, CNIL opened a formal investigation into Criteo in response to this complaint, and on June 23, 2021, CNIL notified the Company of the appointment of an investigator(rapporteur) for the ongoing investigation. The investigation also covers another complaint against Criteo received in November 2018 by CNIL from the European Center for Digital Rights ("NOYB").

On August 3, 2022, the assigned rapporteur issued a report that claimed certain GDPR violations, in particular relating to the Company’s contractual relationships with its advertisers and publishers with respect to consent collection oversight. The report includes a proposed financial sanction against the Company of €60.0 million ($~~65.4~~65.3 million).Under the CNIL sanction procedures, Criteo ~~has~~had the right to respond in writing to the report, both with respect to the GDPR findings and the value of the sanction, and did so, following which ~~there will be~~ a formal hearing before the CNIL Sanction ~~Committee.~~Committee occured on March 16, 2023, with both Criteo and the rapporteur presenting their respective positions. The CNIL Sanction Committee ~~will then~~is expected to issue a draft decision that will be submitted for consultation to other European data protection authorities as part of the cooperation mechanism mandated by GDPR. ~~Any~~A final decision, including regarding potential financial penalties, will likely ~~not~~ occur ~~until 2023.~~by mid-2023.

Pursuant to U.S. GAAP, we establish accruals for specific legal proceedings when it is considered probable that a loss has been incurred and the amount of the loss can be reasonably estimated, and these accruals are reviewed and adjusted each quarter based on the information available at that time.

Given the receipt of this report, which included a proposed sanction penalty of €60.0 million ($~~65.4~~65.3 million), we have accounted for the proposed penalty as a provision for a loss contingency, which is reflected in our financial statements, as a current liability, for the period ended as of ~~June 30, 2022 as general and administrative expenses.~~March 31, 2023. Such amount could be lower or higher based on the final resolution and merits of the claims made in the report.

Non income tax risks

We have recorded a $33.2 million provision related to certain non income tax items accounted for under "ASC 450 Contingencies". These risks were identified and recognized as part of the Iponweb Acquisition. We have recorded an indemnification asset in the full amount of the provision as the Company is indemnified against certain tax liabilities under the FPA. The indemnification asset is recorded as part of "Other non current assets" on the consolidated statement of financial position.

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Note 16. Breakdown of Revenue and Non-Current Assets by Geographical Areas

The Company operates in the following three geographical markets:

• Americas (North and South America);

• EMEA (Europe, Middle-East and Africa); and

• Asia-Pacific.

The following tables disclose our consolidated revenue for each geographical area for each of the reported periods. Revenue by geographical area is based on the location of advertisers’ ~~campaigns.~~campaigns or of the retailers.


	Americas		EMEA		Asia-Pacific		Total
For the three months ended:	(in thousands)

March 31, 2023	$	188,288	$	160,214	$	96,514	$	445,016
March 31, 2022	$	194,847	$	193,954	$	121,766	$	510,567

Americas EMEA Asia-Pacific Total
For the three months ended: (in thousands)
September 30, 2022 $ 201,274 $ 150,915 $ 94,732 $ 446,921
September 30, 2021 $ 204,428 $ 188,354 $ 115,798 $ 508,580

Revenue generated in France ~~the country of incorporation of the Parent,~~ amounted to ~~$23.2~~$23.3 million and ~~$33.5~~$30.8 million for the three months ended ~~September 30,~~March 31, 2023 and March 31, 2022 ~~and 2021,~~ respectively.

Americas EMEA Asia-Pacific Total
For the nine months ended: (in thousands)
September 30, 2022 $ 609,461 $ 521,736 $ 321,381 $ 1,452,578
September 30, 2021 $ 629,555 $ 609,753 $ 361,660 $ 1,600,968

~~Revenue generated in France amounted to $83.3 million and $110.3 million for the nine months ended September 30, 2022 and September 30, 2021, respectively.~~

Revenue generated in other significant countries where we operate is presented in the following table:


		Three Months Ended				Nine Months Ended					Three Months Ended
		September 30, 2022		September 30, 2021		September 30, 2022		September 30, 2021					March 31, 2023		March 31, 2022
		(in thousands)										(in thousands)

Americas	Americas									Americas
United States	United States	$	180,152	$	179,302	$	542,034	$	559,965	United States			$	169,591	$	171,864
EMEA	EMEA									EMEA
Germany	Germany	$	40,808	$	49,927	$	144,902	$	156,574	Germany			$	45,782	$	55,455
United Kingdom		$	19,572	$	18,936	$	56,225	$	64,340
France										France			$	23,298	$	30,781
Asia-Pacific	Asia-Pacific									Asia-Pacific
Japan	Japan	$	56,999	$	72,437	$	196,818	$	231,440	Japan			$	59,692	$	77,975

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Other Information

For each reported period, non-current assets (corresponding to the net book value of tangible and intangible assets, excluding right of use assets related to lease agreements) are presented in the table below. The geographical information includes results from the locations of legal entities.

Of which Of which Of which
Americas United States EMEA France Asia-Pacific Japan Singapore Total
(in thousands)
September 30, 2022 $ 77,134 $ 75,216 $ 4,650 $ 85,967 $ 24,206 $ 8,834 $ 11,685 $ 191,957
December 31, 2021 $ 84,954 $ 83,843 $ 6,036 $ 97,627 $ 33,971 $ 14,159 $ 15,650 $ 222,588



	Americas		EMEA		Asia-Pacific		Total
(in thousands)

March 31, 2023	$	91,766	$	209,760	$	24,562	$	326,088
December 31, 2022	$	92,952	$	193,007	$	21,231	$	307,190

~~Note 17. Related Parties~~

There were no significant related-party transactions pursuant to ASC 850 during the period nor any change in the nature of the transactions as described in Note 25 to the consolidated financial statements included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2021.

3229

Note ~~18.~~17. Subsequent Events

The Company evaluated all subsequent events that occurred after ~~September 30, 2022~~March 31, 2023 through the date of issuance of the unaudited condensed consolidated financial statements and determined there are no significant events that require adjustments or disclosure.

3330

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion should be read in conjunction with the unaudited condensed consolidated financial statements and related notes thereto included elsewhere in this Quarterly Report on Form 10-Q and the audited consolidated financial statements and related notes thereto included in our Annual Report on Form 10-K for the year ended December 31, ~~2021,~~2022, filed with the Securities and Exchange Commission, or "SEC", on February ~~25, 2022.~~24, 2023.

Critical Accounting Policies and Estimates

There have been no material changes to our critical accounting policies and estimates from the information provided in Item 2, "Management's Discussion and Analysis of Financial Condition and Results of Operations," included in our Annual Report filed on Form 10-K for the year ended December 31, ~~2021.~~2022.

Recently Issued Pronouncements

See "Recently Issued Accounting Standards" under Note 1, "Summary of Significant Accounting Policies," of the Notes to Unaudited Condensed Consolidated Financial Statements for a discussion of certain accounting standards that have been issued during ~~2022.~~2023.

~~Use of~~ Non-GAAP Financial Measures

~~This Form 10-Q includes~~As required by the ~~following financial measures defined as~~rules of the Securities and Exchange Commission (“SEC”), we provide reconciliations of the non-GAAP financial measures bycontained in this document to the ~~SEC: Contribution ex-TAC, Adjusted EBITDA and Adjusted Net Income. These~~most directly comparable measures under GAAP, which are ~~not calculated~~set forth in ~~accordance with U.S. GAAP.~~the financial tables below.

Reconciliation of Contribution ex-TAC isto Gross Profit

We define Contribution ex-TAC as a profitability measure akin to gross profit. It is calculated by deducting traffic acquisition costs ~~("TAC")~~ from revenue and reconciled to gross profit through the exclusion of other ~~cost~~costs of revenue. Contribution ex-TAC is not a measure calculated in accordance with U.S. GAAP. We have included Contribution ex-TAC because it is a key measure used by our management and board of directors to evaluate operating performance, generate future operating plans and make strategic decisions. In particular, we believe that this measure can be useful for period-to-period comparisons of our business. Accordingly, we believe that Contribution ex-TAC provides useful information to investors and others in understanding and evaluating our results of operations in the same manner as our management and board of directors.

Adjusted EBITDA is our consolidated earnings before financial income (expense), income taxes, depreciation and amortization, adjusted to eliminate the impact of equity awards compensation expense, pension service costs, restructuring and transformation costs, certain acquisition and integration costs and a loss contingency related to a regulatory matter. Adjusted EBITDA and Adjusted EBITDA margin are key measures used by our management and board of directors to understand and evaluate our core operating performance and trends, to prepare and approve our annual budget and to develop short- and long-term operational plans. In particular, we believe that Adjusted EBITDA and Adjusted EBITDA margin can provide useful measures for period-to-period comparisons of our business. Accordingly, we believe that Adjusted EBITDA and Adjusted EBITDA margin provide useful information to investors and the market generally in understanding and evaluating our results of operations in the same manner as our management and board of directors.

Adjusted Net Income is our net income adjusted to eliminate the impact of equity awards compensation expense, amortization of acquisition-related assets, restructuring and transformation costs, certain acquisition and integration costs, a loss contingency related to a regulatory matter, and the tax impact of these adjustments. Adjusted Net Income and Adjusted diluted EPS are key measures used by our management and board of directors to evaluate operating performance, generate future operating plans and make strategic decisions regarding the allocation of capital. In particular, we believe that Adjusted Net Income and Adjusted diluted EPS can provide useful measures for period-to-period comparisons of our business. Accordingly, we believe that Adjusted Net Income and Adjusted diluted EPS provide useful information to investors and the market generally in understanding and evaluating our results of operations in the same manner as our management and board of directors.

Please refer to the supplemental financial tables provided for a reconciliation of Contribution ex-TAC to gross profit, Adjusted EBITDA to net income, and Adjusted Net Income to net income in each case, the most comparable U.S. GAAP measurement. Our use of non-GAAP financial measures has limitations as an analytical tool, and you should not consider them in isolation or as a substitute for analysis of our financial results as reported under U.S. GAAP.

Some of these limitations are: (1) other companies, including companies in our industry which have similar business arrangements, may address the impact of TAC differently; and (2) other companies may report Contribution ex-TAC, Adjusted EBITDA, Adjusted Net Income, or similarly titled measures but calculate them differently or over different regions, which reduces their usefulness as comparative measures. Because of these and other limitations, you should consider these measures alongside our U.S. GAAP financial results, including revenue and net income.

~~Condensed Consolidated Statements of Income Data (Unaudited):~~

Three Months Ended Nine Months Ended
September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021
(in thousands, except share and per share data)
Revenue $ 446,921 $ 508,580 $ 1,452,578 $ 1,600,968
Cost of revenue (1)
Traffic acquisition costs (233,543) (297,619) (807,758) (956,364)
Other cost of revenue (33,771) (34,935) (96,214) (107,011)
Gross profit 179,607 176,026 548,606 537,593
Operating expenses
Research and development expenses (1)
(42,725) (33,345) (118,248) (106,957)
Sales and operations expenses (1)
(90,051) (75,619) (278,363) (235,724)
General and administrative expenses (1)
(42,353) (34,877) (176,361) (108,779)
Total operating expenses (175,129) (143,841) (572,972) (451,460)
Income from operations 4,478 32,185 (24,366) 86,133
Financial and Other income (expense) 3,485 (154) 23,927 (1,391)
Income (loss) before taxes 7,963 32,031 (439) 84,742
Provision for income taxes (1,442) (7,801) (4,735) (22,033)
Net income (loss) $ 6,521 $ 24,230 $ (5,174) $ 62,709
Net income (loss) available to shareholders of Criteo S.A. $ 6,579 $ 23,481 $ (6,448) $ 60,691
Net income (loss) allocated to shareholders per share:
Basic $ 0.11 $ 0.39 $ (0.11) $ 1.00
Diluted $ 0.10 $ 0.37 $ (0.10) $ 0.94
Weighted average shares outstanding used in computing per share amounts:
Basic 60,318,114 60,873,594 60,431,597 60,759,613
Diluted 63,235,811 64,197,686 63,050,355 64,313,526

~~(1)~~ Cost of revenue and operating expenses include equity awards compensation expense, pension service costs, depreciation and amortization expense, restructuring related and transformation costs, and acquisition-related costs:

~~Detailed Information on Selected Items (unaudited):~~

Three Months Ended Nine Months Ended
September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021
(in thousands)
Equity awards compensation expense
Research and development expenses $ 11,621 $ 4,858 $ 21,166 $ 11,572
Sales and operations expenses 4,577 3,875 9,695 9,880
General and administrative expenses 4,886 4,557 11,733 11,389
Total equity awards compensation expense $ 21,084 $ 13,290 $ 42,594 $ 32,841
Pension service costs
Research and development expenses 130 170 408 520
Sales and operations expenses 40 52 119 158
General and administrative expenses 77 108 259 327
Total pension service costs (a)
$ 247 $ 330 $ 786 $ 1,005
Depreciation and amortization expense
Cost of revenue (data center equipment) 11,972 15,520 39,229 46,508
Research and development expenses (b)
3,208 2,557 9,682 6,517
Sales and operations expenses (c)
3,540 3,545 10,878 11,201
General and administrative expenses 563 679 1,779 2,420
Total depreciation and amortization expense $ 19,283 $ 22,301 $ 61,568 $ 66,646
Acquisition-related costs
Sales and operations (11) — 167 —
General and administrative expenses 6,981 2,091 11,324 5,138
Total acquisition-related costs $ 6,970 $ 2,091 $ 11,491 $ 5,138
Loss contingency on regulatory matter
General and administrative (1,764) — 63,920 —
Total loss contingency on regulatory matter $ (1,764) $ — $ 63,920 $ —
Restructuring related and transformation (gain) costs
Research and development expenses (53) (1,029) 985 5,238
Sales and operations expenses (624) (106) 3,908 8,812
General and administrative expenses 596 (632) 1,661 5,815
Total Restructuring related and transformation (gain) costs $ (81) $ (1,767) $ 6,554 $ 19,865

~~(a) Effective January 1, 2012, actuarial gains and losses are recognized in other comprehensive income.~~

(b) Includes acquisition-related amortization of intangible assets of $1.4 million and $1.1 million for the three months ended September 30, 2022 and 2021, respectively and $4.4 million and $2.6 million for the nine months ended September 2022 and, 2021, respectively.

(c) Includes acquisition-related amortization of intangible assets of $2.1 million and $2.2 million for the three months ended September 30, 2022 and 2021, respectively and $6.5 million and $6.6 million for the nine months ended September 30, 2022 and 2021, respectively.

~~Detailed Information on Restructuring related and Transformation costs (unaudited):~~

Three Months Ended Nine Months Ended
September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021
(in thousands)
(Gain) from forfeitures of share-based compensation awards — — — (666)
Facilities related (gain) costs (284) (1,645) 1,002 14,692
Payroll related (gain) costs (306) (334) 4,686 4,637
Consulting costs related to transformation 509 212 866 1,202
Total restructuring related and transformation (gain) costs $ (81) $ (1,767) $ 6,554 $ 19,865

For the three months ended and the nine months ended September 30, 2022 and September 30, 2021, respectively, the cash outflows related to restructuring related and transformation costs were $6.6 million, and $4.4 million and 9.7 million, and $20.9 million respectively, and were mainly comprised of payroll costs, broker and termination penalties related to real-estate facilities and other consulting fees.

~~OtherFinancial and Operating Data (unaudited):~~

Three Months Ended Nine Months Ended
September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021
(in thousands, except client data)
Number of clients 21,673 21,747 21,673 21,747
Contribution ex-TAC (3)
$ 213,378 $ 210,961 $ 644,820 $ 644,604
Adjusted Net Income (4)
$ 33,225 $ 41,033 $ 121,260 $ 125,041
Adjusted EBITDA (5)
$ 50,176 $ 68,430 $ 162,994 $ 211,628

~~(3)~~ We define Contribution ex-TAC as a profitability measure akin to gross profit. It is calculated by deducting traffic acquisition costs from revenue and reconciled to gross profit through the exclusion of other cost of revenue. Contribution ex-TAC is not a measure calculated in accordance with U.S. GAAP. We have included Contribution ex-TAC because it is a key measure used by our management and board of directors to evaluate operating performance, generate future operating plans and make strategic decisions. In particular, we believe that this measure can be useful for measuring for period-to-period comparisons of our business. Accordingly,business.Accordingly, we believe that Contribution ex-TAC provides useful information to investors and others in understanding and evaluating our results of operations in the same manner as our management and board of directors. Our use of Contribution ex-TAC has limitations as an analytical tool, and you should not consider them in isolation or as a substitute for analysis of our financial results as reported under U.S. GAAP. Some of these limitations are: (a) other companies, including companies in our industry which have similar business arrangements, may address the impact of TAC differently; (b) other companies may report Contribution ex-TAC or similarly titled measures but calculate them differently, which reduces their usefulness as a comparative measure. Because of these and other limitations,you should consider Contribution ex-TAC alongside our other U.S. GAAP financial ~~result~~ measures. The below table provides a reconciliation of Contribution ex-TAC to gross profit:

Three Months Ended Nine Months Ended
September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021
(in thousands, except client data)
Gross Profit $ 179,607 $ 176,026 $ 548,606 $ 537,593
Other Cost of Revenue $ 33,771 34,935 96,214 107,011
Contribution ex-TAC (1)
$ 213,378 $ 210,961 $ 644,820 $ 644,604

~~(4)~~ We define Adjusted Net Income as our net income adjusted to eliminate the impact of equity awards compensation expense, amortization of acquisition-related assets, restructuring and transformation costs, certain acquisition and integration costs, a loss contingency related to a regulatory matter, and the tax impact of these adjustments. Adjusted Net Income and Adjusted diluted EPS are key measures used by our management and board of directors to evaluate operating performance, generate future operating plans and make strategic decisions regarding the allocation of capital. In particular, we believe that Adjusted Net Income and Adjusted diluted EPS can provide useful measures for period-to-period comparisons of our business. Accordingly, we believe that Adjusted Net Income and Adjusted diluted EPS provide useful information to investors and others in understanding and evaluating our results of operations in the same manner as our management and board of directors. Our use of Adjusted Net Income has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our financial results as reported under U.S. GAAP. Some of these limitations are: (a) Adjusted Net Income does not reflect the potentially dilutive impact of equity-based compensation or the impact of certain acquisition-related costs; and (b) other companies, including companies in our industry, may calculate Adjusted Net Income or similarly titled measures differently, which reduces their usefulness as a comparative measure. Because of these and other limitations, you should consider Adjusted Net Income alongside our other U.S. GAAP-based financial results, including net income. The following table presents a reconciliation of Adjusted Net Income to net income:


	Three Months Ended
	March 31, 2023		March 31, 2022

	(in thousands, except client data)
Gross Profit	$	181,509	$	184,024

Other Cost of Revenue	$	39,109	$	32,893

Contribution ex-TAC	$	220,618	$	216,917

Three Months Ended Nine Months Ended
September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021
(in thousands)
Net income (loss) $ 6,521 $ 24,230 $ (5,174) $ 62,709
Adjustments:
Equity awards compensation expense 21,084 13,290 42,594 32,841
Amortization of acquisition-related intangible assets 3,531 3,303 10,853 9,174
Acquisition-related costs 6,970 2,091 11,491 5,138
Loss contingency on regulatory matter (1,764) — 63,920 —
Restructuring related and transformation (gain) costs (81) (1,767) 6,554 19,865
Tax impact of the above adjustments (3,036) (114) (8,978) (4,686)
Adjusted Net Income $ 33,225 $ 41,033 $ 121,260 $ 125,041

3931

~~(5)~~Reconciliation of Adjusted EBITDA to Net Income (Loss)

We define Adjusted EBITDA as our consolidated earnings before financial income (expense), income taxes, depreciation and amortization, adjusted to eliminate the impact of equity awards compensation expense, pension service costs, ~~depreciation and amortization expense and~~ certain restructuring, integration and transformation costs, certain acquisition ~~and integration~~ costs and a loss contingency related to a regulatory matter. Adjusted EBITDA is not a measure calculated in accordance with U.S. GAAP. We have included Adjusted EBITDA because it is a key measure used by our management and board of directors to understand and evaluate our core operating performance and trends, to prepare and approve our annual budget and to develop short-term and long-term operational plans. In particular, we believe that the elimination of equity awards compensation expense, pension service costs, certain restructuring, integration and transformation costs, certain acquisition costs and a loss contingency related to a regulatory matter in calculating Adjusted EBITDA can provide a useful measure for period-to-period comparisons of our business. Accordingly, we believe that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our results of operations in the same manner as our management and board of directors. Our use of Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our financial results as reported under U.S. GAAP. Some of these limitations are: (a) although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements; (b) Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs; (c) Adjusted EBITDA does not reflect the potentially dilutive impact of equity-based compensation; (d) Adjusted EBITDA does not reflect tax payments that may represent a reduction in cash available to us; and (e) other companies, including companies in our industry, may calculate Adjusted EBITDA or similarly titled measures differently, which reduces their usefulness as a comparative measure. Because of these and other limitations, you should consider Adjusted EBITDA alongside our U.S. GAAP financial results, including net income. ~~The following table presents a reconciliation of Adjusted EBITDA to net income, the most directly comparable U.S. GAAP measure, for each of the periods indicated:~~


		Three Months Ended				Nine Months Ended					Three Months Ended
		September 30, 2022		September 30, 2021		September 30, 2022		September 30, 2021			March 31,
		(in thousands)										2023		2022
Net income (loss)	Net income (loss)	$	6,521	$	24,230	$	(5,174)	$	62,709	Net income (loss)		$	(12,071)	$	21,278
Adjustments:	Adjustments:									Adjustments:
Financial income (expense)		(3,526)		154		(23,480)		1,391
Financial (Income) expense										Financial (Income) expense		(6,606)		(4,030)
Provision for income taxes	Provision for income taxes	1,442		7,801		4,735		22,033		Provision for income taxes		(4,595)		10,414
Equity awards compensation expense	Equity awards compensation expense	21,084		13,290		42,594		32,841		Equity awards compensation expense		26,065		9,490

Pension service costs	Pension service costs	247		330		786		1,005		Pension service costs		176		275

Depreciation and amortization expense	Depreciation and amortization expense	19,283		22,301		61,568		66,646		Depreciation and amortization expense		25,320		22,144

Acquisition-related costs	Acquisition-related costs	6,970		2,091		11,491		5,138		Acquisition-related costs		832		2,544
Loss contingency on regulatory matter		(1,764)		—		63,920		—
Restructuring related and transformation (gain) costs		(81)		(1,767)		6,554		19,865

Restructuring, integration and transformation costs										Restructuring, integration and transformation costs		9,602		710

Total net adjustments	Total net adjustments	43,655		44,200		168,168		148,919		Total net adjustments		50,794		41,547
Adjusted EBITDA	Adjusted EBITDA	$	50,176	$	68,430	$	162,994	$	211,628	Adjusted EBITDA		$	38,723	$	62,825


	Three Months Ended
				March 31, 2023			March 31, 2022
		(in thousands)
(Gain) from forfeitures of share-based compensation awards		(897)			—

Facilities related (gain) costs				618			533
Payroll related (gain) costs				9,631			—
Consulting costs related to transformation				250			177
Restructuring, integration and transformation (gain) costs		$	9,602		$	710

4032

Results of Operations for the Periods Ended ~~September 30, 2022~~March 31, 2023 and ~~September 30, 2021~~March 31, 2022 (Unaudited)

Revenue breakdown by segment

~~Effective August 1, 2022, the Company reports its~~We report our segments results ~~of operations through the following three segments:~~as Marketing Solutions, Retail Media and ~~Iponweb.~~Iponweb:

–•Criteo Marketing ~~Solutions: This segment allows~~Solutions allow commerce companies to address multiple marketing goals by engaging their consumers with personalized ads across the web, mobile and offline store environments.

–•Criteo Retail ~~Media: This segment~~Media allows retailers to generate advertising revenues from consumer brands, and/or to drive sales for themselves, by monetizing their data and audiences through personalized ads, either on their own digital property or on the open Internet, that address multiple marketing goals.

–•~~Iponweb: This segment~~Iponweb specializes in building real-time advertising technology and trading infrastructure, delivering advanced media buying, selling, and packaging capabilities for media owners, agencies, performance advertisers, and 3rd-party ad tech platforms.

Three months ended ~~September 30, 2022~~March 31, 2023 compared to the three months ended ~~September 30, 2021~~March 31, 2022

Three Months Ended
September 30,
2022 September 30,
2021 2022 vs 2021
(in thousands)
Revenue as reported $ 446,921 $ 508,580 (12) %
Conversion impact U.S. dollar/other currencies $ 46,392
Revenue at constant currency (1)
$ 493,313 $ 508,580 (3) %
Marketing Solutions revenue as reported $ 387,288 $ 458,622 (16) %
Conversion impact U.S. dollar/other currencies $ 44,830
Marketing Solutions revenue at constant currency (1)
432,118 458,622 (6) %
Retail Media revenue as reported (2)
41,170 49,958 (18) %
Conversion impact U.S. dollar/other currencies $ 1,562
Retail Media revenue at constant currency (1)
42,732 49,958 (14) %
Iponweb revenue as reported 18,463 — N/A
Conversion impact U.S. dollar/other currencies $ —
Iponweb revenue at constant currency 18,463 — N/A
Revenue breakdown by segment


	Three Months Ended
	March 31, 2023		March 31, 2022		2023 vs 2022
	(in thousands)
Revenue as reported	$	445,016	$	510,567	(13)	%
Conversion impact U.S. dollar/other currencies	$	18,457
Revenue at constant currency (1)	$	463,473	$	510,567	(9)	%

Marketing Solutions revenue as reported	$	381,907	$	463,888	(18)	%
Conversion impact U.S. dollar/other currencies	$	18,083
Marketing Solutions revenue at constant currency (1)	399,990		463,888		(14)	%

Retail Media revenue as reported (2)	38,021		46,679		(19)	%
Conversion impact U.S. dollar/other currencies	$	374
Retail Media revenue at constant currency (1)	38,395		46,679		(18)	%

Iponweb revenue as reported	25,088		—		N/A
Conversion impact U.S. dollar/other currencies	$	—
Iponweb revenue at constant currency (1)	25,088		—		N/A

(1) ~~Constant~~Information herein with respect to results presented on a constant currency ~~measures exclude the impact of foreign currency fluctuations and~~basis is computed by applying ~~the~~ prior ~~year monthly~~period average exchange rates to ~~transactions denominated~~current period results. We have included results on a constant currency basis because it is a key measure used by our management and board of directors to evaluate operating performance. Management reviews and analyzes business results excluding the effect of foreign currency translation because they believe this better represents our underlying business trends. The table above reconciles the actual results presented in ~~settlement or billing currencies other than~~this section with the ~~US dollar.~~results presented on a constant currency basis.

(2)The Retail Media Platform, introduced in June 2020, is a strategic building block of Criteo’s Commerce Media Platform and is reported under the retail media segment. It is a self-service solution providing transparency, measurement and control to brands and retailers. In all arrangements running on ~~this~~Criteo's Commerce Media platform, ~~Criteo~~the Company recognizes revenue on a net basis, whereas revenue from arrangements running on legacy Retail Media solutions ~~are~~were accounted for on a gross basis. ~~We expect most~~Most clients using Criteo’s legacy Retail Media solutions ~~to transition~~transitioned to this platform by the ~~second half~~end of 2022. ~~As new clients onboard and existing clients~~During the transition ~~to the Retail Media Platform,~~period, Revenue ~~may decline~~declined but Contribution ex-TAC margin ~~is expected to increase.~~percentage increased. Contribution ex-TAC iswas not impacted by this transition.

4133

Revenue by segment

Revenue for the three months ended ~~September 30, 2022~~March 31, 2023 decreased ~~(12)~~(13)%, or ~~(3)~~(9)% on a constant currency basis, to ~~$446.9~~$445.0 million compared to the three months ended ~~September 30, 2021.~~

~~In the quarter, 88% of revenue came from existing clients while 12% came from new client additions. Our number of clients was flat year-over-year.~~

Marketing Solutions revenue decreased (16)%, or (6)% on a constant currency basis, to $387.3 million for the three months ended September 30, 2022, driven by anticipated identity and privacy changes and the suspension of the Company's operations in Russia, partially offset by a rebound in travel and traction in upselling and cross-selling of existing clients.

~~Retail Media revenue decreased (18)%, or (14)% on a constant currency basis, to $41.2 million for the three months ended September 30,~~March 31, 2022, reflecting the impact of recognizing revenue on a net basis for clients transitioning to the Company's ~~platform. Criteo's~~ platform accounts for a growing share of Retail Media onsite revenue, or about 95% in the third quarter of 2022, and its revenue is accounted for on a net basis. In the prior year period, approximately 63% of retail media onsite revenue was accounted for on a net basis, and as a result of this transition to a full platform business, the growth of Retail Media revenue has been temporarily impacted.

Reflecting the underlying economic performance, Retail Media's Contribution ex-TAC increased 28%, or 32% on a constant currency basis, in the third quarter of 2022, driven by continued strength in Retail Media onsite, in particular in the U.S. market, and growing network effects of the platform.

~~Iponweb revenue for the three months ended September 30, 2022 was $18.5 million following the closing of the acquisition on August 1, 2022.~~

Additionally, our $446.9 million of revenue for the three months ended September 30, 2022 was negatively impacted by $46.4 million of currency fluctuations, particularly as a result of the depreciation of the Euro, Japanese Yen, British Pound, Turkish Lira, Russian Ruble and the Brazilian real compared to the U.S. dollar.

~~Revenue breakdown by region~~

~~Three months ended September 30, 2022 compared to the three months ended September 30, 2021~~

Three Months Ended
September 30,
2022 September 30,
2021 2022 vs 2021
(in thousands)
Revenue as reported $ 446,921 $ 508,580 (12) %
Conversion impact U.S. dollar/other currencies $ 46,392
Revenue at constant currency (1)
493,313 508,580 (3) %
Americas
Revenue as reported 201,274 204,428 (2) %
Conversion impact U.S. dollar/other currencies $ 3,027
Revenue at constant currency (1)
204,301 204,428 — %
EMEA
Revenue as reported 150,915 188,354 (20) %
Conversion impact U.S. dollar/other currencies $ 27,071
Revenue at constant currency (1)
177,986 188,354 (6) %
Asia-Pacific
Revenue as reported 94,732 115,798 (18) %
Conversion impact U.S. dollar/other currencies $ 16,294
Revenue at constant currency (1)
$ 111,026 $ 115,798 (4) %

~~Revenue by region~~

Our revenue in the Americas region decreased (2)%, or (0.06)% on a constant currency basis, to $201.3 million for the three months ended September 30, 2022 compared to the three months ended September 30, 2021. This primarily reflects the impact of recognizing revenue on a net basis for Retail Media clients transitioning to the Company's platform, partially offset by continued strong performance of Retail Media as the platform continues to scale with large retailers and consumer brands, as well as a rebound in travel.

Our revenue in EMEA decreased (20)%, or (6)% on a constant currency basis, to $150.9 million for the three months ended September 30, 2022 compared to the three months ended September 30, 2021, reflecting the suspension of the Company's operations in Russia and mixed retail trends with strength in Germany, the U.K., and emerging markets offsetting softness in France. This also reflects the impact of recognizing revenue on a net basis for Retail Media clients transitioning to the Company's platform, partially offset by continued traction in Retail Media.

~~Our revenue in the Asia-Pacific region decreased (18)%, or decreased (4)% on a constant currency basis, to $94.7 million for~~In the three months ~~ended September 30, 2022 compared to the three months ended September 30, 2021, reflecting mixed retail trends and a slow recovery~~ of ~~classifieds and travel in the region.~~

~~(1)~~ Constant currency measures exclude the impact of foreign currency fluctuations and is computed by applying the prior year monthly exchange rates to transactions denominated in settlement or billing currencies other than the US dollar.

~~Nine months ended September 30, 2022 compared to the nine months ended September 30, 2021~~

~~Revenue breakdown by segment~~

~~Revenue by segment~~

~~Revenue for the nine months ended September 30, 2022 decreased (9)%, or (2)% on a constant currency basis, to $1.5 billion compared to the nine months ended September 30, 2021.~~

~~In the nine months of 2022, 88%~~2023, 91% of revenue came from existing clients while ~~12%~~9% came from new client additions. Our number of clients was ~~flat year-over-year.~~up 2% year-over-year, or down -1% excluding Iponweb.

Marketing Solutions revenue decreased ~~(10)~~(18)%, or ~~(2.2)~~(14)% on a constant currency basis, to ~~$1.4 billion~~$381.9 million for the ~~nine~~three months ended ~~September 30, 2022,~~March 31, 2023, driven by anticipated ~~identity and privacy changes and~~signal loss impacts, the suspension of the Company's operations in Russia and soft retail trends, partially offset by ~~a rebound~~continued strength in ~~travel and mixed retail trends.~~travel.

Retail Media revenue decreased ~~(17)~~(19)%, or ~~(15)~~(18)% on a constant currency basis, to ~~$142.5~~$38.0 million for the ~~nine~~three months ended ~~September 30, 2022,~~March 31, 2023, reflecting the impact of recognizing revenue on a net basis for clients transitioning to the Company's platform. Criteo's platform accounts for a fast-growing share of Retail Media onsite revenue, or about 84% in the first nine months of 2022, and its revenue is accounted for on a net basis. In the prior year period, approximately 40% of retail media onsite revenue was accounted for on a net basis, and asAs a result of this transition to a full platform business, the growth of Retail Media revenue has been temporarily impacted. Reflecting the underlying economic performance, Retail Media's Contribution ex-TAC increased ~~36%~~21%, or ~~40%~~22% on a constant currency basis, for the ~~nine~~three months ended ~~September 30, 2022,~~March 31, 2023, driven by continued strength in Retail Media onsite, in particular in the U.S. market, and growing network effects of onboarding brands and retailers to the platform.

~~(1)~~Constant currency measures exclude the impact of foreign currency fluctuations and is computed by applying the prior year monthly exchange rates to transactions denominated in settlement or billing currencies other than the US dollar.

~~(2)~~ The Retail Media Platform, introduced in June 2020, is a strategic building block of Criteo’s Commerce Media Platform and is reported under the retail media segment. It is a self-service solution providing transparency, measurement and control to brands and retailers. In all arrangements running on this platform, Criteo recognizes revenue on a net basis, whereas revenue from arrangements running on legacy Retail Media solutions are accounted for on a gross basis. We expect most clients using Criteo’s legacy Retail Media solutions to transition to this platform by the second half of 2022. As new clients onboard and existing clients transition to the Retail Media Platform, Revenue may decline but Contribution ex-TAC margin is expected to increase. Contribution ex-TAC is not impacted by this transition.

Iponweb revenue for the ~~nine~~three months ended ~~September 30, 2022~~March 31, 2023 was ~~$18.5~~$25.1 million following the closing of the acquisition on August 1, 2022.

Additionally, our ~~$1.5 billion~~$445.0 million of revenue for the ~~nine~~three months ended ~~September 30, 2022~~March 31, 2023 was negatively impacted by ~~$110.1~~$18.5 million of currency fluctuations, particularly as a result of the depreciation of the Euro, Japanese Yen, British Pound, Turkish Lira, Russian Ruble and the Brazilian ~~real~~Real compared to the U.S. dollar.

~~Nine~~

Three months ended ~~September 30, 2022~~March 31, 2023 compared to the ~~nine~~three months ended ~~September 30, 2021~~March 31, 2022

Revenue breakdown by region

Nine Months Ended
September 30,
2022 September 30,
2021 2022 vs 2021
(in thousands)
Revenue as reported $ 1,452,578 $ 1,600,968 (9) %
Conversion impact U.S. dollar / other currencies $ 110,110
Revenue at constant currency (1)
1,562,688 1,600,968 (2) %
Americas
Revenue as reported 609,461 629,555 (3) %
Conversion impact U.S. dollar / other currencies $ 2,090
Revenue at constant currency (1)
611,551 629,555 (3) %
EMEA
Revenue as reported 521,736 609,753 (14) %
Conversion impact U.S. dollar / other currencies $ 64,474
Revenue at constant currency (1)
586,210 609,753 (4) %
Asia-Pacific
Revenue as reported 321,381 361,660 (11) %
Conversion impact U.S. dollar / other currencies $ 43,546
Revenue at constant currency (1)
$ 364,927 $ 361,660 1 %
Information in this Form 10-Q with respect to results presented on a constant currency basis was calculated by applying prior period average exchange rates to current period results. Management reviews and analyzes business results excluding the effect of foreign currency translation because they believe this better represents our underlying business trends. Below is a table which reconciles the actual results presented in this section with the results presented on a constant currency basis.


	Three Months Ended
	March 31, 2023		March 31, 2022		2023 vs 2022
	(in thousands)
Revenue as reported	$	445,016	$	510,567	(13)	%
Conversion impact U.S. dollar / other currencies	$	18,457
Revenue at constant currency (1)	463,473		510,567		(9)	%
Americas
Revenue as reported	188,288		194,847		(3)	%
Conversion impact U.S. dollar / other currencies	$	(65)
Revenue at constant currency (1)	188,223		194,847		(3)	%
EMEA
Revenue as reported	160,214		193,954		(17)	%
Conversion impact U.S. dollar / other currencies	$	8,539
Revenue at constant currency (1)	168,753		193,954		(13)	%
Asia-Pacific
Revenue as reported	96,514		121,766		(21)	%
Conversion impact U.S. dollar / other currencies	$	9,983
Revenue at constant currency (1)	$	106,497	$	121,766	(13)	%

(1) Revenue at constant currency excludes the impact of foreign currency fluctuations and is computed by applying the average exchange rates for the prior year to the following year figures.

Revenue by region

Our revenue in the Americas region decreased (3)%, or (3)% on a constant currency basis, to ~~$609.5~~$188.3 million for the ~~nine~~three months ended ~~September 30, 2022~~March 31, 2023 compared to the ~~nine~~three months ended ~~September 30, 2021.~~March 31, 2022. This primarily reflects the impact of recognizing revenue on a net basis for Retail Media clients transitioning to the Company's platform, partially offset by continued strong performance of Retail Media as the platform continues to scale with large retailers and consumer brands and a rebound in travel.

Our revenue in EMEA decreased ~~(14)~~(17)%, or ~~(4)~~(13)% on a constant currency basis, to ~~$521.7~~$160.2 million for the ~~nine~~three months ended ~~September 30, 2022~~March 31, 2023 compared to the ~~nine~~three months ended ~~September 30, 2021,~~March 31, 2022, reflecting ~~mixed~~soft retail trends ~~with strength in Germany and emerging markets, offsetting softness in France.~~across our markets. This also reflects the impact of recognizing revenue on a net basis for Retail Media clients transitioning to the Company's platform, partially offset by solid traction in Retail Media.

Our revenue in the Asia-Pacific region decreased ~~(11)~~(21)%, or ~~increased 1%~~decreased (13)% on a constant currency basis, to ~~$321.4~~$96.5 million for the ~~nine~~three months ended ~~September 30, 2022~~March 31, 2023 compared to the ~~nine~~three months ended ~~September 30, 2021,~~March 31, 2022, reflecting ~~the recovery of our~~soft retail ~~business~~and Classified trends in the ~~region and soft Classifieds trends.~~region.

Cost of Revenue


	Three Months Ended						% change
	March 31, 2023			March 31, 2022			2023 vs 2022

	(in thousands, except percentages)
Traffic acquisition costs	$	(224,398)		$	(293,650)		(24)	%
Other cost of revenue	$	(39,109)		$	(32,893)		19	%
Total cost of revenue	$	(263,507)		$	(326,543)		(19)	%
% of revenue	(59)		%	(64)		%
Gross profit %	41		%	36		%


	Three Months Ended				% change		% change at Constant Currency (2)
	March 31, 2023		March 31, 2022		2023 vs 2022		2023 vs 2022

	(in thousands, except percentages)
Marketing Solutions	$	(223,729)	$	(277,800)	(19)	%	(16)	%
Retail Media	$	(669)	$	(15,850)	(96)	%	(96)	%
Iponweb (1)	$	—	$	—	—	%	—	%
Traffic Acquisition Costs	$	(224,398)	$	(293,650)	(24)	%	(21)	%

(1) ~~Constant currency measures exclude~~There are no traffic acquisition costs associated with the ~~impact of foreign currency fluctuations and is computed by applying~~Iponweb solutions as we are acting as agent in all the ~~prior year monthly exchange rates to transactions denominated in settlement or billing currencies other than the US dollar.~~arrangements.

~~Cost of Revenue~~

~~Three months ended September 30, 2022 compared to the three months ended September 30, 2021~~

Three Months Ended % change
September 30,
2022 September 30,
2021 2022 vs 2021
(in thousands, except percentages)
Traffic acquisition costs $ (233,543) $ (297,619) (22) %
Other cost of revenue $ (33,771) $ (34,935) (3) %
Total cost of revenue $ (267,314) $ (332,554) (20) %
% of revenue (60) % (65) %
Gross profit % 40 % 35 %

Cost of revenue for the three months en~~ded September 30, 2022~~ended March 31, 2023 decreased ~~$(65.2)~~$(63.0) million, or ~~(20)~~(19)%, compared to the three months ended ~~September 30, 2021.~~March 31, 2022. This decrease was primarily the result of a decrease of ~~$(64.1)~~$(69.3) million, or ~~(22)~~(24)%~~, or (15)~~ (or (21)% on a constant currency ~~basis,~~basis) in traffic acquisition costs driven by a lower average price partially offset by an increase in volume, and ~~a decrease~~an increase of ~~$(1.2)~~$6.2 million, or ~~(3)%~~19% in other cost of revenue.

*Traffic acquisition costs breakdown by solution:

Three Months Ended % change
% change at Constant Currency (2)
September 30,
2022 September 30,
2021 2022 vs 2021 2022 vs 2021
(in thousands, except percentages)
Marketing Solutions $ (229,266) $ (276,498) (17) % (10) %
Retail Media (1)
$ (4,277) $ (21,121) (80) % (78) %
Traffic Acquisition Costs $ (233,543) $ (297,619) (22) % (15) %

~~(1)~~ The Retail Media Platform, introduced in June 2020, is a strategic building block of Criteo’s Commerce Media Platform and is reported under the retail media segment. It is a self-service solution providing transparency, measurement and control to brands and retailers. In all arrangements running on this platform, Criteo recognizes revenue on a net basis, whereas revenue from arrangements running on legacy Retail Media solutions are accounted for on a gross basis. We expect most clients using Criteo’s legacy Retail Media solutions to transition to this platform by the second half of 2022. As new clients onboard and existing clients transition to the Retail Media Platform, Revenue may decline but Contribution ex-TAC margin is expected to increase. Contribution ex-TAC is not impacted by this transition.

~~(2)~~ Constant currency measures exclude the impact of foreign currency fluctuations and is computed by applying the prior year monthly exchange rates to transactions denominated in settlement or billing currencies other than the US dollar.

Traffic acquisition costs in Marketing Solutions decreased by ~~(17)~~(19)% (or ~~(10.5)~~(16)% at constant currency). This was driven by a ~~(31)~~(29)% decrease (or ~~(26)%~~26% at constant currency) in the average cost per thousand impressions ("CPM") for inventory purchased, including lower CPMs for signal-limited environments where Criteo continues to perform, and a ~~18%~~13% increase in the number of impressions we purchased, reflecting our expanding relationships with existing and new publisher partners, in particular through direct connections, to support client demand for advertising campaigns.

Traffic acquisition costs in Retail Media(1) decreased by ~~(80)~~(96)% (or ~~(78.3)~~(96)% at constant currency), reflecting the technical and transitory impact related to the ~~ongoing~~ client migration ~~due~~ to ~~the transitioning of~~ our ~~platform. Because~~platform because we recognize revenue on a net basis in all arrangements running on ~~the platform, we expect our traffic acquisition costs for Retail Media to decrease over time as all of our clients are transitioned to~~ the platform.

As Iponweb reports revenues on a net basis, it has no traffic acquisition costs.

The ~~decrease~~increase in other cost of revenue included ~~a decrease in depreciation and amortization expense of $3.5 million and a decrease of $0.1 million in other costs of sales mainly due to the digital tax offset by~~ an increase in hosting costs of ~~$(2.3)~~$9.0 million ~~following the replacement of certain data centers and a $0.2 million in data acquisition.~~

~~Nine months ended September 30, 2022 compared to the nine months ended September 30, 2021~~

Nine Months Ended % change
September 30, 2022 September 30, 2021 2022 vs 2021
(in thousands, except percentages)
Traffic acquisition costs $ (807,758) $ (956,364) (16) %
Other cost of revenue $ (96,214) $ (107,011) (10) %
Total cost of revenue $ (903,972) $ (1,063,375) (15) %
% of revenue (62) % (66) %
Gross profit % 38 % 34 %

*Traffic acquisition costs breakdown by solution:

Nine Months Ended % change
% change at Constant Currency (2)
September 30, 2022 September 30, 2021 2022 vs 2021 2022 vs 2021
(in thousands, except percentages)
Marketing Solutions $ (769,520) $ (861,503) (11) % (5) %
Retail Media (1)
$ (38,238) $ (94,861) (60) % (60) %
Traffic Acquisition Costs $ (807,758) $ (956,364) (16) % (11) %

Cost of revenue for the nine months ended September 30, 2022 decreased $(159.4) million, or (15)%, compared to the nine months ended September 30, 2021. This decrease was primarily the result of a decrease of $(148.6) million, or (16)% (or (11)% on a constant currency basis) in traffic acquisition costs driven by a lower average price partially offset by ~~an increase in volume, and a decrease of $(10.8) million, or (10)% in other cost of revenue.~~

Traffic acquisition costs in Marketing Solutions decreased by (11)% (or (5)% at constant currency). This was driven by a (21)% decrease (or (17)% at constant currency) in the average cost per thousand impressions ("CPM") for inventory purchased, including lower CPMs for signal-limited environments where Criteo continues to perform, and a 10% increase in the number of impressions we purchased, reflecting our expanding relationships with existing and new publisher partners, in particular through direct connections, to support client demand for advertising campaigns.

~~Traffic acquisition costs in Retail Media(1)~~ decreased by (60)% (or (60)% at constant currency), reflecting the technical and transitory impact related to the ongoing client migration due to the transitioning of our platform. Because we recognize revenue on a net basis in all arrangements running on the platform, we expect our traffic acquisition costs for Retail Media to decrease over time as all of our clients are transitioned to the platform.

~~As Iponweb reports revenues on a net basis, it has no traffic acquisition costs.~~

~~The decrease in other cost of revenue included a decrease in hosting costs of $3.3 million and~~ depreciation and amortization expense of ~~$7.3~~$3.0 million ~~and a decrease in other costs of sales mainly due to the digital tax.~~

4836

Contribution excluding Traffic Acquisition Costs

We consider Contribution ex-TAC as a key measure of our business activity. Our strategy focuses on maximizing our Contribution ex-TAC on an absolute basis over maximizing our near-term gross margin. We believe this focus builds sustainable long-term value for our business by fortifying a number of our competitive strengths, including access to advertising inventory, breadth and depth of data and continuous improvement of ~~the~~our Criteo AI Engine’s performance, allowing it to deliver more relevant advertisements at scale. As part of this focus, we continue to invest in building preferred relationships with direct publishers and pursue access to leading advertising exchanges.

The following table sets forth our revenue and Contribution ex-TAC by segment:


		Three Months Ended								Nine Months Ended									Three Months Ended
Segment	Segment	September 30, 2022		September 30, 2021		YoY Change		YoY Change at Constant Currency (2)		September 30, 2022		September 30, 2021		YoY Change		YoY Change at Constant Currency (2)		Segment			March 31, 2023		March 31, 2022		YoY Change		YoY Change at Constant Currency (2)
																				(amounts in thousands, except percentages)
Revenue	Revenue	(amounts in thousands, except percentages)																Revenue
Marketing Solutions	Marketing Solutions	$	387,288	$	458,622	(16)	%	(6)	%	$	1,291,599	$	1,429,277	(10)	%	(2)	%	Marketing Solutions			$	381,907	$	463,888	(18)	%	(14)	%
Retail Media	Retail Media	41,170		49,958		(18)	%	(14)	%	142,516		171,691		(17)	%	(15)	%	Retail Media			38,021		46,679		(19)	%	(18)	%
Iponweb	Iponweb	18,463		—		N/A		N/A		18,463		—		N/A		N/A		Iponweb			25,088		—		N/A		N/A
Total	Total	446,921		508,580		(12)	%	(3)	%	1,452,578		1,600,968		(9)	%	(2)	%	Total			445,016		510,567		(13)	%	(9)	%

Contribution ex-TAC (1)	Contribution ex-TAC (1)																	Contribution ex-TAC (1)
Marketing Solutions	Marketing Solutions	158,022		182,124		(13)	%	1	%	522,079		567,774		(8)	%	2	%	Marketing Solutions			158,178		186,088		(15)	%	(10)	%
Retail Media	Retail Media	36,893		28,837		28	%	32	%	104,278		76,830		36	%	40	%	Retail Media			37,352		30,829		21	%	22	%
Iponweb		18,463		—		N/A		N/A		18,463		—		N/A		N/A
Iponweb(2)																		Iponweb(2)			25,088		—		N/A		N/A
Total	Total	213,378		210,961		1	%	14	%	644,820		644,604		—	%	10	%	Total			220,618		216,917		2	%	6	%

~~(1)~~ We define Contribution ex-TAC as a profitability measure akin to gross profit. It is calculated by deducting traffic acquisition costs from revenue and reconciled to gross profit through the exclusion of other cost of revenue. We have included Contribution ex-TAC in this Form 10-Q because it is a key measures used by our management and board of directors to evaluate operating performance and generate future operating plans. In particular, we believe that this can provide useful measures for period-to-period comparisons of our core business. Accordingly, we believe that Contribution ex-TAC provides useful information to investors and others in understanding and evaluating our results of operations in the same manner as our management and board of directors. Our use of Contribution ex-TAC has limitations as an analytical tool, and you should not consider them in isolation or as a substitute for analysis of our financial results as reported under U.S. GAAP. Some of these limitations are: (a) other companies, including companies in our industry which have similar business arrangements, may address the impact of TAC differently; (b) other companies may report Contribution ex-TAC or similarly titled measures but calculate them differently, which reduces their usefulness as a comparative measure. Because of these and other limitations, you should consider Contribution ex-TAC alongside our other U.S. GAAP financial results, including gross profit.

(1) Refer to the "Non-GAAP Financial Measures" section for a definition of this Non-GAAP metric.

(2) There are no traffic acquisition costs associated with the Iponweb solutions as we are acting as agent in all the arrangements.

Constant Currency Reconciliation

Information in this Form 10-Q with respect to results presented on a constant currency basis was calculated by applying ~~the 2021 monthly~~prior period average exchange rates to ~~transactions denominated in settlement or billing currencies other than~~current period results. Management reviews and analyzes business results excluding the ~~US dollar.~~

~~Beginning in the second quarter~~effect of ~~2022, the Company updated its methodology for calculating revenue and traffic acquisition costs on a constant~~foreign currency basis, which are non-GAAP measures. The Company will use the prior year’s monthly exchange rates where the settlement or billing currencies are in currencies other than US dollars. The Q1 2022 revenue and traffic acquisition costs have been revised consistent withtranslation because they believe this ~~updated methodology.~~

better represents our underlying business trends. Below is a table which reconciles the actual results presented in this section with the results presented on a constant currency basis:


		Three Months Ended								Nine Months Ended														Three Months Ended
		September 30, 2022			September 30, 2021			YoY Change		September 30, 2022				September 30, 2021				YoY Change									March 31, 2023			March 31, 2022			YoY Change
		(amounts in thousands, except percentages)																								(amounts in thousands, except percentages)

Revenue as reported	Revenue as reported											$	446,921			$	508,580		(12)		%	$1,452,578	$1,600,968	(9)	%	Revenue as reported									$445,016	$510,567	(13)	%
Conversion impact U.S. dollar/other currencies	Conversion impact U.S. dollar/other currencies	46,390			—					110,109				—						Conversion impact U.S. dollar/other currencies							18,457			—
Revenue at constant currency	Revenue at constant currency	$	493,311		$	508,580		(3)	%	$1,562,687				$1,600,968				(2)	%	Revenue at constant currency							$463,473			$510,567			(9)	%

Traffic acquisition costs as reported	Traffic acquisition costs as reported	$	(233,543)		$	(297,619)		(22)	%	$	(807,758)			$	(956,364)			(16)	%	Traffic acquisition costs as reported							$	(224,398)		$	(293,650)		(24)	%
Conversion impact U.S. dollar/other currencies	Conversion impact U.S. dollar/other currencies	(18,558)			—					(47,369)				—						Conversion impact U.S. dollar/other currencies							(8,518)			—
Traffic Acquisition Costs at constant currency	Traffic Acquisition Costs at constant currency	$	(252,101)		$	(297,619)		(15)	%	$	(855,127)			$	(956,364)			(11)	%	Traffic Acquisition Costs at constant currency							$	(232,916)		$	(293,650)		(21)	%

Contribution ex-TAC as reported	Contribution ex-TAC as reported	$	213,378		$	210,961		1	%	$	644,820			$	644,604			—	%	Contribution ex-TAC as reported							$	220,618		$	216,917		2	%
Conversion impact U.S. dollar/other currencies	Conversion impact U.S. dollar/other currencies	27,832			—					62,740				—						Conversion impact U.S. dollar/other currencies							9,939			—
Contribution ex-TAC at constant currency	Contribution ex-TAC at constant currency	$	241,210		$	210,961		14	%	$	707,560			$	644,604			10	%	Contribution ex-TAC at constant currency							$	230,557		$	216,917		6	%
Contribution ex-TAC/Revenue as reported	Contribution ex-TAC/Revenue as reported	48		%	41		%			44		%		40		%				Contribution ex-TAC/Revenue as reported							50		%	42		%

Other cost of revenue as reported	Other cost of revenue as reported	$	(33,771)		$	(34,935)		(3)	%	$	(96,214)			$	(107,011)			(10)	%	Other cost of revenue as reported							$	(39,109)		$	(32,893)		19	%

Gross Profit as reported	Gross Profit as reported	$	179,607		$	176,026		2	%	$	548,606			$	537,593			2	%	Gross Profit as reported							$	181,509		$	184,024		(1)	%

5038

Research and Development Expenses

Three months ended ~~September 30, 2022~~March 31, 2023 compared to the three months ended ~~September 30, 2021~~March 31, 2022


		Three Months Ended						% change		Three Months Ended						% change
		September 30, 2022			September 30, 2021			2022 vs 2021		March 31, 2023			March 31, 2022			2023 vs 2022

		(in thousands, except percentages)								(in thousands, except percentages)
Research and development expenses	Research and development expenses	$	(42,725)		$	(33,345)		28%	Research and development expenses	$	(63,590)		$	(34,027)		87%
% of revenue	% of revenue	(10)		%	(7)		%		% of revenue	(14)		%	(7)		%

Research and development expenses for the three months ended ~~September 30, 2022,~~ March 31, 2023, increased ~~$9.4~~ $29.6 million or ~~28%,~~87% compared to the three months ended ~~September 30, 2021.~~March 31, 2022. This increase mainly related to ~~higher~~an increase in headcount-related expenses, including consideration paid to the Iponweb seller and accounted for as share-based compensation, ~~expense~~ and ~~rent and facilities costs offset by lower facilities and supplies costs.~~

~~Nine months ended September 30, 2022 compared to~~ the ~~nine months ended September 30, 2021~~

Nine Months Ended % change
September 30,
2022 September 30,
2021 2022 vs 2021
(in thousands, except percentages)
Research and development expenses $ (118,248) $ (106,957) 11%
% of revenue (8) % (7) %

~~Research and development expenses for the nine months ended September 30, 2022, increased $11.3 million~~ or 11% compared to the nine months ended September 30, 2021. This increase mainly related to higher share-based compensation expense related to higher grant amount and headcount related costs, depreciation and amortization ~~offset by a decrease in RSU social charges and facilities costs.~~

of Iponweb acquisition-related intangible assets.

Sales and Operations Expenses

Three months ended ~~September 30, 2022~~March 31, 2023 compared to the three months ended ~~September 30, 2021~~March 31, 2022


		Three Months Ended						% change		Three Months Ended						% change
		September 30, 2022			September 30, 2021			2022 vs 2021		March 31, 2023			March 31, 2022			2023 vs 2022

		(in thousands, except percentages)								(in thousands, except percentages)
Sales and operations expenses	Sales and operations expenses	$	(90,051)		$	(75,619)		19%	Sales and operations expenses	$	(101,242)		$	(88,999)		14%
% of revenue	% of revenue	(20)		%	(15)		%		% of revenue	(23)		%	(17)		%

Sales and operations expenses for the three months ended ~~September 30, 2022~~March 31, 2023 increased ~~$14.4~~$12.2 million or ~~19%~~14% compared to the three months ended ~~September 30, 2021. This increase mainly related to an~~ ~~increase in headcount-related costs, marketing costs, and net bad debt expense, partially offset by a decrease in rent and facilities.~~

~~Nine months ended September 30, 2022 compared to the nine months ended September 30, 2021~~

Nine Months Ended % change
September 30,
2022 September 30,
2021 2022 vs 2021
(in thousands, except percentages)
Sales and operations expenses $ (278,363) $ (235,724) 18%
% of revenue (19) % (15) %

~~Sales and operations expenses for the nine months ended September 30, 2022 increased $42.6 million or 18% compared to the nine months ended September 30, 2021.~~March 31, 2022. This increase mainly related to an increase in headcount-related costs ~~marketing costs, and net bad debt expense,~~ partially offset by a decrease in ~~rent~~marketing expenses and ~~facilities.~~

bad debt expense.

General and Administrative Expenses

Three months ended ~~September 30, 2022~~March 31, 2023 compared to the three months ended ~~September 30, 2021~~March 31, 2022


		Three Months Ended						% change		Three Months Ended						% change
		September 30, 2022			September 30, 2021			2022 vs 2021		March 31, 2023			March 31, 2022			2023 vs 2022

		(in thousands, except percentages)								(in thousands, except percentages)
General and administrative expenses	General and administrative expenses	$	(42,353)		$	(34,877)		21%	General and administrative expenses	$	(40,170)		$	(33,336)		21%
% of revenue	% of revenue	(9)		%	(7)		%		% of revenue	(9)		%	(7)		%

General and administrative expenses for the three months en~~ded September 30, 2022,~~ended March 31, 2023, increased ~~$7.5~~$6.8 million or 21%, compared to the three months ended ~~September 30, 2021. This~~March 31, 2022. The increase ~~was~~ mainly ~~related~~relates to ~~an increase in headcount related~~headcount-related costs.

~~Nine months ended September 30, 2022 compared to the nine months ended September 30, 2021~~

Nine Months Ended % change
September 30,
2022 September 30,
2021 2022 vs 2021
(in thousands, except percentages)
General and administrative expenses $ (176,361) $ (108,779) 62%
% of revenue (12) % (7) %

~~General and administrative expenses for the nine months ended September 30, 2022, increased $67.6 million or 62%, compared to the nine months ended September 30, 2021. This significant increase was mainly related to the loss contingency related to the CNIL matter as described in Note 15 and the increase of headcount.~~

5339

Financial and Other Income / (Expense)

Three months ended ~~September 30, 2022~~March 31, 2023 compared to the three months ended ~~September 30, 2021~~March 31, 2022


		Three Months Ended						% change		Three Months Ended						% change
		September 30, 2022			September 30, 2021			2022 vs 2021		March 31, 2023			March 31, 2022			2023 vs 2022

		(in thousands, except percentages)								(in thousands, except percentages)
Financial and Other Income / (Expense)	Financial and Other Income / (Expense)	$	3,485		$	(154)		2363%	Financial and Other Income / (Expense)	$	6,827		$	4,030		69%
% of revenue	% of revenue	0.8		%	—		%		% of revenue	2		%	1		%

~~Nine months ended September 30, 2022 compared to the nine months ended September 30, 2021~~

Nine Months Ended % change
September 30,
2022 September 30,
2021 2022 vs 2021
(in thousands, except percentages)
Financial and Other Income / (Expense) $ 23,927 $ (1,391) 1820%
% of revenue 1.6 % (0.1) %

Financial and Other income for the three months ended ~~and the nine months ended September 30, 2022,~~March 31, 2023, increased by ~~$3.6~~$2.8 million ~~and~~ ~~by $25.3 million, respectively,~~or 69% compared to ~~the three months ended and nine months ended September 30, 2021.~~2022. The ~~$3.5 million and $23.9~~$6.8 million financial and other income for the three months ended ~~and nine months ended September 30, 2022, respectively,~~March 31, 2023, were driven by the recognition of a ~~positive~~negative impact of foreign exchange reevaluations net of related hedging and the up-front fees amortization, the non-utilization costs, and the financial expense relating to our available Revolving Credit Facility ~~("RCF") financing.~~financing, fully offset by the proceeds from disposal of non-consolidated investments. At ~~September 30, 2022,~~March 31, 2023, our exposure to foreign currency risk was centralized at Criteo S.A. and hedged using foreign currency swaps or forward purchases or sales of foreign currencies.

Provision for Income Taxes

Three months ended ~~September 30, 2022~~March 31, 2023 compared to the three months ended ~~September 30, 2021~~March 31, 2022

Three Months Ended % change
September 30,
2022 September 30,
2021 2022 vs 2021
(in thousands, except percentages)
Provision for income tax expense (benefit) $ 1,442 $ 7,801 (82)%

~~Nine months ended September 30, 2022 compared to the nine months ended September 30, 2021~~

Nine Months Ended % change
September 30,
2022 September 30,
2021 2022 vs 2021
(in thousands, except percentages)
Provision for income tax expense (benefit) $ 4,735 $ 22,033 (79)%

Three Months Ended

% change

March 31,
2023

March 31,
2022

2023 vs 2022

(in thousands, except percentages)

Provision for income tax expense (benefit)

(4,595)

10,414

For the ~~nine~~three months ended ~~September 30, 2022 and September 30, 2021, provision~~March 31, 2023 benefit for incomes taxes is ~~$4.7 million and $22.0 million, respectively. The nine~~$(4.6) million. For the three months ended ~~September 30,~~March 31, 2022 income tax expense was $10.4 million. The $(4.6) million was driven by the loss from operations. The three months ended March 31, 2023 provision for income taxes mainly differs from the nominal standard French rate of 25.0% due to ~~non-tax deductibility~~the application of a reduced income tax rate on the majority of the ~~loss contingency related to the CNIL matter as described~~technology royalties income in ~~Note 15 and a discrete tax expense related to change in valuation allowance for certain US deferred tax assets.~~France

5540

Net Income / (Loss)

Three months ended ~~September 30, 2022~~March 31, 2023 compared to the three months ended ~~September 30, 2021~~March 31, 2022


		Three Months Ended					% change		Three Months Ended					% change
		September 30, 2022			September 30, 2021		2022 vs 2021		March 31, 2023			March 31, 2022		2023 vs 2022

		(in thousands, except percentages)							(in thousands, except percentages)
Net income		$	6,521		24,230		(73)%
Net income (loss)								Net income (loss)	$	(12,071)		21,278		(157)%
% of revenue	% of revenue	1		%	5	%		% of revenue	(3)		%	4	%

Net income for the three months ended ~~September 30, 2022,~~March 31, 2023, decreased ~~$(17.7)~~$(33.3) million, or ~~(73)~~(157)%, compared to the three months ended ~~September 30, 2021.~~March 31, 2022. This decrease was the result of the business dynamics discussed above, in particular, a ~~$(27.7)~~$(51.2) million decrease in income from operations, offset by ~~a $3.6~~$2.8 million increase in financial and other income and by a ~~$(6.4)~~$(15.0) million decrease in provision for income taxes compared to the three months ended ~~September 30, 2021.~~

~~Nine months ended~~ ~~September 30, 2022~~ ~~compared to the nine months ended~~ ~~September 30, 2021~~

Nine Months Ended % change
September 30,
2022 September 30,
2021 2022 vs 2021
(in thousands, except percentages)
Net income (loss) $ (5,174) 62,709 (108)%
% of revenue — % 4 %

Net income or loss for the nine months ended September 30, 2022, decreased $(67.9) million, or (108)%, compared to the nine months ended September 30, 2021. This decrease was the result of the business dynamics discussed above, in particular, a $(110.5) million decrease in income from operations, offset by $25.3 million increase in financial and other income and by a $(17.3) million decrease in provision for income taxes compared to the nine months ended September 30, 2021.March 31, 2022.

5641

Liquidity and Capital Resources

Our principal sources of liquidity are our cash and cash equivalents and cash generated from operating activities. We have never declared or paid any cash dividends on our ordinary shares. We do not anticipate paying cash dividends on our equity securities in the foreseeable future. In February 2021, the board of directors approved a new, long-term share repurchase program of up to $100 million of the Company's outstanding American Depositary Shares, which we completed in December 2021. In October 2021, the board of directors approved an extension of the long-term share repurchase program of up to $175 million of the Company's outstanding American Depositary Shares, and in February 2022, the board of directors further extended this long-term share repurchase program to a total of $280 million.

Other than these repurchase programs, we intend to retain all available funds from any future earnings to fund our growth. As discussed in Note 15 to the unaudited condensed consolidated financial statements in Item 1 to this Form 10-Q, we are party to several loan agreements and revolving credit facilities with third-party financial institutions.

~~Our~~ cash and cash equivalents and restricted cash at ~~September 30, 2022~~March 31, 2023 were held for working capital and general corporate purposes, which could include acquisitions, and amounted to ~~$407.3~~$380.7 million as of ~~September 30, 2022.~~March 31, 2023. The ~~$(108.2)~~$(67.5) million decrease in cash and cash equivalents, and restricted cash compared with December 31, ~~2021~~2022 primarily resulted from a decrease ~~$(133.7)~~$(36.1) million in cash ~~from~~used for investing activities and by ~~$(36.2)~~$(72.2) million in cash used for financing activities over the period, partially offset by an increase of ~~$130.5~~$42.0 million in cash from operating activities. The cash used for financing activities ~~was~~ mainly related to ~~$(59.2)~~$(51.0) million in cash used for the share repurchase ~~programs,~~program, and to $22.2 million payout of the current portion earn-out liability resulting from the Iponweb acquisition, partially offset by ~~the recognition of $22.2 million positive impact of foreign exchange reevaluations net of related hedging, and by $0.6~~$1.3 million of proceeds from a capital increase following the exercises of stock options. In addition, the decrease in cash includes an ~~$(68.8)~~$(1.2) million negative impact of changes in foreign exchange rates on our cash position over the period. We do not enter into investments for trading or speculative purposes. Our policy is to invest any cash in excess of our immediate requirements in investments designed to preserve the principal balance and provide liquidity. Accordingly, our cash and cash equivalents are invested primarily in demand deposit accounts that are currently providing only a minimal return.

OnAs disclosed in our Form 10-K for the fiscal year 2022, on September 27, 2022, the Company entered into a new five year Revolving Credit Facility (the "RCF") that allows immediate access to an additional €407.0 million ($~~396.7~~442.6 million) of liquidity, which, combined with our cash position, marketable securities and treasury shares as of ~~September 30, 2022,~~March 31, 2023, provides total liquidity above ~~$740~~$813 million. On July 29, 2022, we drew down €50 million under our prior revolving credit facility for a one month period to provide additional liquidity in connection with the Iponweb Acquisition. This draw down was repaid by the end of August 2022. Overall, we believe that our current financial liquidity, combined with our expected cash-flow generation in ~~2022,~~2023, enables financial flexibility.

Share buy-back programs

In December 2021, we completed a $100 million share repurchase program. In 2022, we completed an additional $136 million share repurchase. For the three months ended March 31, 2023, we had acquired $51.0 million of our on-going share repurchase program.

All above programs have been implemented under our multi-year authorization granted by Board of Directors. On December 7, 2022, this authorization was extended to a total amount of $480 million. Other than these repurchase programs, we intend to retain all available funds and any future earnings to fund our growth.

Operating and Capital Expenditure Requirements

For the ~~nine~~three months ended ~~September 30,~~March 31, 2023 and 2022, ~~and 2021,~~ our capital expenditures were ~~$41.3~~$33.2 million and ~~$42.9~~$5.6 million, respectively. During the ~~nine~~three months ended ~~September 30, 2022,~~March 31, 2023, these capital expenditures were mainly comprised of ~~purchases~~acquisition of ~~servers~~data center and ~~other data-center~~server equipment, and ~~capitalized software development costs.~~internal IT systems. We expect our capital expenditures to remain at, or slightly above, 3%4% of revenue for ~~2022,~~2023, as we plan to continue to build, reshape and maintain additional data center equipment capacity in all regions and ~~significantly~~ increase our ~~redundancy capacity to strengthen~~investments supporting our ~~infrastructure.~~new work from home policy as part of our office right sizing program.

We believe our existing cash balances will be sufficient to meet our anticipated cash requirements through at least the next 12 months.

Our future working capital requirements will depend on many factors, including the ~~impact of the macro environment on customer budgets that they spend with us, the~~ rate of our revenue growth, the amount and timing of our investments in personnel and capital equipment, and the ~~pace at which we implement~~timing and ~~launch~~extent of our introduction of new products and ~~enhancements as part of the Commerce Media Platform, Investments in new capabilities and new capital equipment, including renewal of data center contracts.~~product enhancements.

If our cash and cash equivalents balances and cash flows from operating activities are insufficient to satisfy our liquidity requirements, we may need to raise additional funds through equity, equity-linked or debt financings to support our operations, and such financings may not be available to us on acceptable terms, or at all.

We may also need to raise additional funds in the event we determine in the future to effect one or more acquisitions of businesses, technologies, assets or products.

If we are unable to raise additional funds when needed, our operations and ability to execute our business strategy could be adversely affected. If we raise additional funds through the incurrence of indebtedness, such indebtedness would have rights that are senior to holders of our equity securities and could contain covenants that restrict our operations. Any additional equity financing will be dilutive to our shareholders.

Off-Balance Sheet Arrangements

We do not have any relationships with unconsolidated entities or financial partnerships, including entities sometimes referred to as structured finance or special purpose entities that were established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. In addition, we do not engage in trading activities involving non-exchange traded contracts. We therefore believe that we are not materially exposed to any financing, liquidity, market or credit risk that could arise if we had engaged in these relationships.

5843

Historical Cash Flows

The following table sets forth our cash flows for the ~~nine~~three month period ended ~~September 30, 2022~~March 31, 2023 and ~~September 30, 2021:~~March 31, 2022:


		Nine Months Ended					Three Months Ended
		September 30, 2022		September 30, 2021			March 31, 2023		March 31, 2022

		(in thousands)					(in thousands)
Cash (used for) from operating activities	Cash (used for) from operating activities	$	130,530	$	154,901	Cash (used for) from operating activities	$	41,964	$	74,930
Cash (used for) from investing activities	Cash (used for) from investing activities	$	(133,724)	$	(66,195)	Cash (used for) from investing activities	$	(36,102)	$	16,925
Cash (used for) from financing activities	Cash (used for) from financing activities	$	(36,196)	$	(55,821)	Cash (used for) from financing activities	$	(72,217)	$	(1,367)

Operating Activities

Cash from operating activities is primarily impacted by the increase in the number of clients using our solutions and by the amount of cash we invest in personnel to support the anticipated growth of our business. Cash from operating activities has typically been generated from changes in our operating assets and liabilities, particularly in the areas of accounts receivable, accounts payable and accrued expenses, adjusted for certain non-cash and non-operating items such as depreciation, amortization and share-based compensation, deferred tax assets and income taxes.

For the ~~nine~~three months ended ~~September 30, 2022,~~March 31, 2023, net cash provided by operating activities was ~~$130.5~~$42.0 million and consisted of net loss of ~~$(5.2)~~$(12.1) million, and ~~$122.0~~$31.9 million in adjustments for certain non-cash and non-operating items. Adjustments for certain non-operating items primarily consisted of amortization and provision expense of ~~$134.7~~$27.3 million, equity awards compensation expense of ~~$42.6~~$25.2 million, $0.6m change in other non-operating and non-cash items partially offset by ~~$(16.1)~~$(12.3) million of changes in deferred tax assets, by a ~~$(12.9)~~$(0.1) million change in income taxes and by other non-operating items of ~~$(26.3)~~$(8.8) million. The ~~$13.7~~$22.1 million increase in cash from changes in working capital primarily consisted of a ~~$75.4~~$164.1 million ~~increase~~decrease in trade receivables, and a ~~$1.1~~$16.7 million change in lease liabilities and right of use assets partially offset by a $(23.2) million change in other current assets including prepaid expenses and value-added tax ("VAT") receivables, a $(19.5) million change in trade payables, and a $(20.2) million changeincrease in other current liabilities such as payroll and payroll related expenses and VAT payables and change in fair value of ~~derivatives.~~derivatives, partially offset by a $(145.0) million decrease in trade payables, a $(0.1) million change in lease liabilities and right of use assets, and a $(13.6) million change in other current assets including prepaid expenses and value-added tax ("VAT") receivables.

Investing Activities

Our investing activities to date have consisted primarily of the consideration paid to acquire the Iponweb business and purchases of servers and other data-center equipment. For the ~~nine~~three months ended ~~September 30, 2022,~~March 31, 2023, net cash ~~from~~used for investing activities was ~~$(133.7)~~$(36.1) million and primarily consisted of ~~$(135.5) million of consideration paid for the Iponweb business, $(41.3)~~$(33.2) million change in capital expenditures mainly comprised of purchases of servers and other data-center equipment and capitalized software development costs, ~~partially offset by~~ a ~~$43.1~~$(6.0) million ~~positive~~ change from the maturity of investments in Marketable ~~Securities.~~Securities, a $(6.5) million payment for business acquisition, partially offset by $9.6 million proceed on sale of a non consolidated investment.

Financing Activities

For the ~~nine~~three months ended ~~September 30, 2022,~~March 31, 2023, net cash used for financing activities was ~~$(36.2)~~$(72.2) million, resulting mainly from a ~~$(59.2)~~$(51.0) million payment for our share repurchase program, a $(22.0) million payout of the current portion earn-out liability resulting from the Iponweb acquisition, partially offset by ~~a $22.2 million change relating to the recognition of a positive impact of foreign exchange reevaluations net of related hedging, and $0.6~~$1.3 million of proceeds from capital increase following the exercises of stock ~~options and a $0.1 million change in other financial liabilities.~~options.

5944

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Market Risk

We are mainly exposed to foreign currency exchange rate fluctuations. There have been no material changes to our exposure to market risk during the three months ended ~~September 30, 2022.~~March 31, 2023.

For a description of our foreign exchange risk, please see "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations - B. Liquidity and Capital Resources" in our Annual Report on Form 10-K for the year ended December 31, ~~2021.~~2022.

A hypothetical 10% increase or decrease of the Pound Sterling, the Euro, the Japanese yen or the Brazilian real against the U.S. dollar would have impacted the Condensed Consolidated Statements of Income as follows:


		Nine Months Ended									Three Months Ended
		September 30, 2022				September 30, 2021					March 31, 2023				March 31, 2022

		(in thousands)									(in thousands)
GBP/USD	GBP/USD	+10%		-10%		+10%		-10%		GBP/USD	+10%		-10%		+10%		-10%
Net income (loss) impact	Net income (loss) impact	$	(331)	$	331	$	(278)	$	278	Net income (loss) impact	$	(114)	$	114	$	(138)	$	138


		Nine Months Ended									Three Months Ended
		September 30, 2022				September 30, 2021					March 31, 2023				March 31, 2022

		(in thousands)									(in thousands)
BRL/USD	BRL/USD	+10%		-10%		+10%		-10%		BRL/USD	+10%		-10%		+10%		-10%
Net income (loss) impact	Net income (loss) impact	$	37	$	(37)	$	180	$	(180)	Net income (loss) impact	$	236	$	(236)	$	—	$	—


		Nine Months Ended									Three Months Ended
		September 30, 2022				September 30, 2021					March 31, 2023				March 31, 2022

		(in thousands)									(in thousands)
JPY/USD	JPY/USD	+10%		-10%		+10%		-10%		JPY/USD	+10%		-10%		+10%		-10%
Net income (loss) impact	Net income (loss) impact	$	1,649	$	(1,649)	$	392	$	(392)	Net income (loss) impact	$	(339)	$	339	$	134	$	(134)


		Nine Months Ended									Three Months Ended
		September 30, 2022				September 30, 2021					March 31, 2023				March 31, 2022

		(in thousands)									(in thousands)
EUR/USD	EUR/USD	+10%		-10%		+10%		-10%		EUR/USD	+10%		-10%		+10%		-10%
Net income (loss) impact	Net income (loss) impact	$	(1,968)	$	1,968	$	8,075	$	(8,075)	Net income (loss) impact	$	(1,680)	$	1,680	$	2,273	$	(2,273)

Credit Risk and Trade receivables

For a description of our ~~credit risk and~~ trade receivables, please see ~~"Note 4. Financial instruments" and~~ "Note 5. Trade Receivables" in the Notes to the Consolidated Financial Statements.

6045

Item 4. Controls and Procedures.

Disclosure Controls and Procedures

Based on their evaluation as of ~~September 30, 2022,~~March 31, 2023, our management, including our Chief Executive Officer and Chief Financial Officer, concluded that our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) were effective to provide reasonable assurance that (i) the information required to be disclosed in our reports filed or submitted under the Exchange Act are recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and (ii) such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting identified in management's evaluation pursuant to Rules 13a-15(d) or 15d-15(d) of the Exchange Act during the period covered by this Quarterly Report on Form 10-Q that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Limitation on Effectiveness of Controls and Procedures

Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal controls will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within Criteo have been detected. These inherent limitations include the realities that judgments in decision making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies and procedures. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and may not be detected.

6146

PART II

Item 1. Legal Proceedings.

For a discussion of our legal proceedings, refer to Note 15. Commitments and contingencies.

Item 1A. Risk Factors.

The following risk factor is provided to update the risk factors previously disclosed under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2021 filed with the SEC on February 25, 2022. Except as presented below, there have been no material changes to the Risk Factors described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021 and our Quarterly Report on Form 10-Q for the quarter ended June 30, 2022.

~~The ongoing conflict between Russia and Ukraine may adversely affect our business and results of operations~~.

The current conflict between Russia and Ukraine and related government actions are evolving and beyond our control, and given our global operations, such conflict may adversely affect our business and results of operations. As a result of this conflict, we decided to suspend all ad campaigns and digital advertising activities in Russia until further notice, and we ultimately reduced personnel attached to supporting these activities. Our current business in Russia and Ukraine is limited, and in 2021, it represented less than 2% of our Contribution ex-TAC. In addition, as part of the acquisition of the Iponweb business, we have entered into a transitional services agreement to cover certain R&D and back office functions that are delivered to the acquired Iponweb entities from contractors and/or employees based in Russia until June 2023.

The current conflict between Russia and Ukraine may also have the effect of heightening many other risks disclosed in our public filings, any of which could materially and adversely affect our business and results of operations. Such risks include, but are not limited to: adverse effects on global macroeconomic conditions; regional instability and geopolitical shifts; supply chain disruption; increased exposure to cyberattacks; limitations in our ability to implement and execute our business strategy, including our completed acquisition of the Iponweb business; risks to employees and contractors that we have in the region; and exposure to foreign currency fluctuations.

None.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Purchases of Equity Securities by the issuer and Affiliated Purchasers

The following table provides certain information with respect to our purchases of our ADSs during the ~~third~~first fiscal quarter of ~~2022:~~2023:
Period
Total Number of Shares Purchased(1)
Average Price Paid per Share(2)
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(1)
Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs(1)
July 1 to 31, 2022 — $ — —
August 1 to 31, 2022 448,868 $ 27.66 448,868 238,245,963
September 1 to 30, 2022 628,670 $ 27.71 628,670 220,818,656
Total 1,077,538 1,077,538 —


Period	Total Number of Shares Purchased(1)	Average Price Paid per Share(2)		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(1)	Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs(1)
January 1 to 31, 2023	1,133,552	$	28.21	1,133,552	$	212,324,227
February 1 to 28, 2023	362,565	$	32.74	362,565	200,437,260
March 1 to 31, 2023	235,517	$	30.51	235,517	193,258,955
Total	1,731,634			1,731,634	—

~~(1)~~(1) In October 2021, the board of directors approved an extension of the long-term share repurchase program of up to $175 million of the Company's outstanding American Depositary Shares, and in ~~February~~December 2022, the board of directors further extended this long-term share repurchase program to a ~~tot~~altotal of ~~$280~~$480 million.

(2) Average price paid per share excludes any broker commissions paid.

6347

Item 6. Exhibits.

Exhibit Index
Incorporated by Reference
Exhibit Description Schedule/ Form File
Number Exhibit File
Date
10.1
Multicurrency Revolving Facility Agreement, dated as of September 27, 2022, among the Company, certain of its subsidiaries, the lenders party thereto from time-to-time, BNP Paribas, Crédit Lyonnais (LCL), HSBC Continental Europe and Société Générale, as bookrunners and mandated lead arrangers, Bank of Montreal Europe PLC, Citibank N.A., London Branch and Crédit Industriel et Commercial (CIC), as mandated lead arrangers, BNP Paribas, as coordinator and documentation agent, Société Générale, as agent, and Société Générale and HSBC Continental Europe, as sustainability coordinators
8-K 001-36153 10.1 September 28, 2022
31.1#
Certificate of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, as amended
31.2#
Certificate of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, as amended
32.1*
Certificate of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, as amended
101.INS XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH XBRL Taxonomy Extension Schema Document
101.CAL XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF XBRL Taxonomy Extension Definition Linkbase Document
101.LAB XBRL Taxonomy Extension Labels Linkbase Document
101.PRE XBRL Taxonomy Extension Presentation Linkbase Document
104 Cover Page Interactive Data File, formatted in Inline XBRL and contained in Exhibit 101.

Incorporated by Reference

Exhibit

Description

Schedule/ Form

File
Number

Exhibit

File
Date

31.1#

Certificate of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, as amended

31.2#

Certificate of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, as amended

32.1*

Certificate of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, as amended

101.INS

XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH

XBRL Taxonomy Extension Schema Document

101.CAL

XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF

XBRL Taxonomy Extension Definition Linkbase Document

101.LAB

XBRL Taxonomy Extension Labels Linkbase Document

101.PRE

XBRL Taxonomy Extension Presentation Linkbase Document

104

Cover Page Interactive Data File, formatted in Inline XBRL and contained in Exhibit 101.

# Filed herewith.

* Furnished herewith.

6448

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


		CRITEO S.A.
		(Registrant)

	By:	/s/ Sarah Glickman
Date: ~~November 1, 2022~~May 3, 2023	Name:	Sarah Glickman
	Title:	Chief Financial Officer
		(Principal financial officer and duly authorized signatory)

6549


PART I	FINANCIAL INFORMATION	2
Item 1	Unaudited Financial Statements as of March 31,2023 ~~September~~ ~~30, 2022~~	2
	Condensed Consolidated Statements of Financial Position (Unaudited)	3
	Condensed Consolidated Statements of Income (Unaudited)	4
	Condensed Consolidated Statements of Comprehensive Income (Unaudited)	5
	Condensed Consolidated Statements of Shareholder's Equity (Unaudited)	6
	Condensed Consolidated Statements of Cash Flows (Unaudited)	87
	Notes to Condensed Consolidated Financial Statements (Unaudited)	98
Item 2	Management's Discussion and Analysis of Financial Condition and Results of Operations	3431
Item 3	Quantitative and Qualitative Disclosures About Market Risk	6045
Item 4	Controls and Procedures	6146
PART II	OTHER INFORMATION	6247
Item 1	Legal Proceedings	6247
Item 1A	Risk Factors	6247
Item 6	Exhibits	6448
Signatures		6549


	2022		2021

	(in thousands)
Balance at January 1	$	(45,391)	$	(39,899)

Allowance for credit losses	(17,735)		(9,765)
Reversal of provision	6,319		3,895
Other	(4,732)		—
Currency translation adjustment	3,927		1,039
Balance at September 30	$	(57,612)	$	(44,730)


	OSA/BSPCE	RSU/PSU/LUS	BSA	Total
Balance at January 1, 2022	570,801	5,299,356	343,775	6,213,932
Granted	—	5,592,890	—	5,592,890
Exercised (OSA/BSPCE/BSA)	(63,643)	—	—	(63,643)
Vested (RSU/LUS)	—	(1,392,436)	—	(1,392,436)
Forfeited	(107,802)	(839,730)	—	(947,532)
Expired	—	—	—	—
Balance at September 30, 2022	399,356	8,660,080	343,775	9,403,211


	OSA/BSPCE		RSU/PSU/LUS	BSA

Number outstanding	399,356		8,660,080	343,775
Weighted-average exercise price	€	21.49	NA	€	15.12
Number vested	277,928		—	304,500
Weighted-average exercise price	€	23.98	NA	€	15.18
Weighted-average remaining contractual life of options outstanding, in years	4.68		NA	5.04


	Provision for employee-related litigation	Other provisions	Total
	(in thousands)
Balance at January 1, 2022	1,117	1,942	3,059
Increase	91	63,936	64,027
Provision used	(473)	(302)	(775)
Provision released not used	(140)	(398)	(538)
Other	—	32,731	32,731
Currency translation adjustments	(121)	(5,614)	(5,735)

Balance at September 30, 2022	474	92,295	92,769
- of which current	474	59,564	60,038
- of which non-current	—	32,731	32,731


			Of which				Of which				Of which
	Americas		United States		EMEA		France		Asia-Pacific		Japan		Singapore		Total
(in thousands)

September 30, 2022	$	77,134	$	75,216	$	4,650	$	85,967	$	24,206	$	8,834	$	11,685	$	191,957
December 31, 2021	$	84,954	$	83,843	$	6,036	$	97,627	$	33,971	$	14,159	$	15,650	$	222,588