Criteo S.A.

Second-quarter media spend grew 9% to $1.1 billion. Revenue was $428 million and contribution ex-TAC was $255 million, including a $1 million year-over-year FX headwind. Performance Media revenue was $380 million and contribution ex-TAC was $208 million, down 10% at constant currency; Retail Media revenue was $48 million and contribution ex-TAC was $47 million. Adjusted EBITDA was $73 million, operating income was $15 million, net income was $12 million, diluted EPS was $0.22 versus $0.39 last year, and adjusted diluted EPS was $0.80 versus $0.92 last year. Operating cash flow was $20 million and free cash flow was negative $38 million in Q2, with trailing 12-month free cash flow of $180 million. For 2026, management now expects contribution ex-TAC to decline 10% to 12% at constant currency, adjusted EBITDA margin of approximately 30%, total CapEx of approximately $190 million, operating cash flow conversion of about 85% of adjusted EBITDA, and free cash flow conversion of about 35% of adjusted EBITDA before nonrecurring items. For Q3, Criteo expects contribution ex-TAC of $237 million to $241 million and adjusted EBITDA of $54 million to $58 million.

Michael Komasinski said the quarter was challenging and driven by client-specific pullbacks from several large enterprise accounts, but stressed that the core business remains resilient and that the company is responding with better commercial execution. He emphasized that the long-term strategy has not changed: expand full-funnel Performance Media, scale Retail Media, and build around commerce intelligence and AI. He was notably optimistic about OpenAI, saying the partnership is exceeding expectations, has surpassed 2,000 brands, and is expanding internationally, while also highlighting new agentic AI products and stronger pipeline indicators.

Sarah Glickman framed the quarter as a mix of macro/client headwinds and disciplined execution elsewhere, noting $428 million of revenue, $255 million of contribution ex-TAC, $73 million of adjusted EBITDA, and a $21 million Retail Media scope-change impact. She pointed to lower employee costs and bad debt expense helping offset weaker top line performance, and said non-GAAP operating expenses fell 10% year over year. On cash and capital allocation, she highlighted no long-term debt, significant liquidity, $30 million deployed to repurchase 1.7 million shares, and $160 million remaining under the repurchase authorization. She also said 2026 CapEx should be about $190 million due to data center renewals, with operating cash flow conversion expected to improve to about 85% and free cash flow conversion to about 35% of adjusted EBITDA before nonrecurring items.

Analysts focused on why certain large Performance Media clients reduced spend, how much of the weakness was due to market conditions versus execution, and whether Criteo is too early with its AI and conversational commerce products. Management said there was no single cause: some clients were affected by travel disruption from the Middle East conflict, some by tariffs and de minimis import rules, and others by tactical shifts in media mix where Criteo failed to retain budget. On OpenAI, management said current spend is mostly test budgets, with future scale likely coming from a mix of search, video and other discovery budgets rather than a single source, and that the platform still needs time and geography expansion before becoming a meaningful 2027 contributor. Management also said the board continues to evaluate ways to maximize shareholder value but did not comment on market speculation around the take-private offer.