Criteo SA Q3 2024 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Mark Zgutowicz - The Benchmark Company - Analyst : A couple of questions just around Microsoft progression. I know you're going to talk about that a bit more on your retail media update. But just curious if there's any incremental OpEx that you're incurring there as you sort of get yourself set up to address that demand? And then a separate question on retail media. Nice retail media take rate, certainly above our expectations in 3Q. Just curious if you could maybe talk about variables here next 12 months, particularly as your anniversary -- your largest client's transition to in-house demand, I believe you'll anniversary that in 1Q, so sort of what we can expect for take rate following that transition?

Question: Mark Kelley - Stifel Financial Corp. - Analyst : Can you maybe expand on the adtech services comments a bit? I think you said one client, in particular, drove that down 16%. I guess can you maybe help us with the moving pieces there? I think you said it stabilized. I guess, what does that look like from here? And then the second question is another quarter of growth in retargeting and your comp in Q3 was significantly tougher than the first half of the year, I guess. Is that something that we can maybe expect going forward? And I guess, what are your conversations with clients just around retargeting as a strategy at this point?

Question: Ygal Arounian - Citi - Analyst : Just first on the guidance. I think that's where a lot of the focus from investors this morning. If you look at the guidance for 4Q, it does imply a little bit of a step down in the contribution ex-TAC. You did lower the high end of the full year guidance by a little bit. I know, Sarah, you called out certain things like a shorter holiday season, no political spending. And I'm not sure exactly how much impact the IPONWEB revenue has with that single customer? Can you unpack the guidance, what you're seeing in the macro, what's driving that kind of sequential -- sequentially lower growth rate 4Q?

Question: Ygal Arounian - Citi - Analyst : Okay. And then maybe on retail media, again, like others, I know we're going to get a lot more color in a few weeks here. On site, as you called out, has driven so much of the growth. Meg's comments called out Costco and off-site partnership with United Airlines, I feel like maybe a little bit more REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 30, 2024 / 12:00PM, CRTO.OQ - Q3 2024 Criteo SA Earnings Call than you have in the past? And maybe just help us frame what the offsite opportunity could be, how it drives growth and how you think about kind of the growth in offsite overall?

Question: Bryan Smilek - JPMorgan - Analyst : Great. It's Bryan Smilek on for Doug. Just to start, I think you guys have mentioned AI driven performance enhancements drove a contribution ex-TAC increase in the double-digit million range within performance media in 3Q. So can you just talk about the monetization curve of AI? And I guess as we enter 2025, which investments are critical to continuing to drive a compelling and differentiated product as other competitors lead into their AI strategies?

Question: Alec Brondolo - Wells Fargo - Analyst : I appreciate the feedback on the supply side of the Microsoft relationship. I would love to ask about the demand side. I think it's pretty exciting that thing and when the customers might end up purchasing retail media inventory sometime in 2025. Could you maybe just give us an update on the time line and functionally how that's going to work at least as best as you know today?

Question: Brian Pitz - BMO Capital Markets - Analyst : Maybe some additional color on verticals. We're hearing some broader category softness in consumer discretionary, whether it's tech, entertainment, retail, CPG, although kind of offset by stronger lower funnel. Are you seeing this maybe any broader thoughts on CPG and retail specifically into Q4 and '25? And then separately, maybe a quick update on Albertsons, how is that scaling and when do you think it should be a meaningful contributor to your earnings?

Question: Tim Nollen - Macquarie Bank - Analyst : I'd like to come back to the topic of retargeting, which I think has now grown at least three quarters in a row. And we have almost gotten through this call without talking about cookies. I don't know if you've got an update you'd be willing to give us today on impact from cookies next year? I know it's probably very difficult to give, but just my question really is how dependent is your retargeting business on cookies at this point? Or is it almost not relevant anymore because you're using so much for first-party data?

Question: Tim Nollen - Macquarie Bank - Analyst : Okay. You had previously given a number for the impact of cookie deprecation next year, which I think last call, you basically pulled back and said it won't be that hot. So I'm just wondering if there's any update to that number?

Question: Tom White - D.A. Davidson Companies - Analyst : Hello, can you hear me?

Question: Tom White - D.A. Davidson Companies - Analyst : Okay. A quick one on Commerce Max. You guys mentioned some of the growth that you're seeing in some of the holdcos. Curious whether you guys think you're kind of displacing any existing DSP tools at those agencies with Commerce Max or whether the spend is maybe coming from different budgets? And can you maybe just talk about over the next, say, three, four quarters? What's the main driver of growth in Commerce Max? Is it just kind of deeper penetration of these big holdcos that are using it now? Is it adding more agencies? Any color there?

Question: Justin Patterson - KeyBanc Capital Markets Inc. - Analyst : Great. This is more of a theoretical question around Google and regulation. If Google is forced to divest AdX and, or double-click for publishers, how do you think that could access or change your access to supply and winning bids in the market?