• U.S. callers:
• International callers: 

¹ Growth at constant currency excludes the impact of foreign currency fluctuations and is computed by applying the 2015 average exchange rates for the relevant period to 2016 figures.

² Revenue ex-TAC, Adjusted EBITDA and Adjusted Net Income per diluted share are not measures calculated in accordance with U.S. GAAP.

CRITEO S.A.

Consolidated Statement of Financial Position

(U.S. dollars in thousands)

(unaudited)

December 31,

September 30,

2015

2016

Assets

Current assets:

    Cash and cash equivalents

$

353,537

$

407,158

    Trade receivables, net of allowances

261,581

268,097

    Income taxes

2,714

4,422

    Other taxes

29,552

45,323

    Other current assets

16,030

20,288

    Total current assets

663,414

745,288

Property, plant and equipment, net

82,482

98,353

Intangible assets, net

16,470

18,595

Goodwill

41,973

45,690

Non-current financial assets

17,184

17,453

Deferred tax assets

20,196

28,586

    Total non-current assets

178,305

208,677

Total assets

$

841,719

$

953,965

Liabilities and shareholders' equity

Current liabilities:

    Trade payables

$

246,382

$

253,938

    Contingencies

668

286

    Income taxes

15,365

7,133

    Financial liabilities - current portion

7,156

6,403

    Other taxes

30,463

35,844

    Employee - related payables

42,275

42,317

    Other current liabilities

15,531

18,383

    Total current liabilities

357,840

364,304

Deferred tax liabilities

139

752

Retirement benefit obligation

1,445

2,262

Financial liabilities - non current portion

3,272

2,933

    Total non-current liabilities

4,856

5,947

Total liabilities

362,696

370,251

Commitments and contingencies

Shareholders' equity:

Common shares, €0.025 per value, 62,470,881 and 63,760,491 shares authorized, issued and outstanding at December 31, 2015 and September 30, 2016, respectively.

2,052

2,087

Additional paid-in capital

425,220

470,871

Accumulated other comprehensive (loss)

(69,023)

(57,902)

Retained earnings

116,076

158,945

Equity - attributable to shareholders of Criteo S.A.

474,325

574,001

Non-controlling interests

4,698

9,713

Total equity

479,023

583,714

Total equity and liabilities

$

841,719

$

953,965

CRITEO S.A.

Consolidated Statement of Income

(U.S. dollars in thousands, except share and per share data)

(unaudited)

Three Months Ended

Nine Months Ended

September 30,

September 30,

2015

2016

YoY
Change

2015

2016

YoY
Change

Revenue

$

332,674

$

423,867

27

%

$

926,152

$

1,232,321

33

%

Cost of revenue

Traffic acquisition cost

(198,970)

(247,310)

24

%

(552,097)

(727,034)

32

%

Other cost of revenue

(17,206)

(22,332)

30

%

(44,418)

(60,950)

37

%

Gross profit

116,498

154,225

32

%

329,637

444,337

35

%

Operating expenses:

Research and development expenses

(22,442)

(30,701)

37

%

(60,141)

(88,097)

46

%

Sales and operations expenses

(56,310)

(68,164)

21

%

(169,120)

(201,862)

19

%

General and administrative expenses

(19,915)

(32,492)

63

%

(57,865)

(85,839)

48

%

(98,667)

(131,357)

33

%

(287,126)

(375,798)

31

%

Income from operations

17,831

22,868

28

%

42,511

68,539

61

%

Financial income (expense)

(6,650)

(570)

(91)

%

(5,276)

(1,982)

(62)

%

Income before taxes

11,181

22,298

99

%

37,235

66,557

79

%

Provision for income taxes

(5,388)

(7,574)

41

%

(13,896)

(19,968)

44

%

Net Income

$

5,793

$

14,724

154

%

$

23,339

$

46,589

100

%

Net income available to shareholders of Criteo S.A.

$

5,096

$

13,539

$

21,618

$

42,869

Net income available to non-controlling interests

$

697

$

1,185

$

1,721

$

3,720

Weighted average shares outstanding used in computing per share amounts:

Basic

62,082,110

63,628,351

61,662,308

63,163,922

Diluted

65,254,238

65,816,422

65,095,690

65,429,757

Net income allocated to shareholders of Criteo S.A. per share:

Basic

$

0.08

$

0.21

$

0.35

$

0.68

Diluted

$

0.08

$

0.21

$

0.33

$

0.66

CRITEO S.A.

Consolidated Statement of Cash Flows

(U.S. dollars in thousands)

(unaudited)

Three Months Ended

Nine Months Ended

September 30,

September 30,

2015

2016

2015

2016

Net income

$

5,793

$

14,724

$

23,339

$

46,589

Adjustments to reconcile to cash from operating activities

23,155

36,609

62,685

96,235

                 - Amortization and provisions

13,236

16,030

32,436

45,555

                 - Equity awards compensation expense ⁽¹⁾

4,600

13,965

16,242

30,030

                 - Net gain or loss on disposal of non-current assets

59

1

85

1

                 - Interest accrued

2

(972)

9

608

                 - Non-cash financial income and expenses

(130)

11

17

29

                 - Change in deferred taxes

(979)

(3,121)

(3,149)

(7,545)

                 - Income tax for the period

6,367

10,695

17,045

27,557

Changes in working capital requirement

(7,120)

4,576

(2,341)

(22,860)

                 - (Increase)/decrease in trade receivables

(14,795)

(2,160)

(27,434)

(4,528)

                 - Increase/(decrease) in trade payables

11,899

11,218

39,518

(3,931)

                 - (Increase)/decrease in other current assets

(8,781)

(2,856)

(24,664)

(18,633)

                 - Increase/(decrease) in other current liabilities

4,557

(1,626)

10,239

4,232

Income taxes paid

(4,328)

(12,278)

(13,237)

(38,152)

17,500

43,631

70,446

81,812

Acquisition of intangible assets, property, plant and equipment

(21,514)

(15,792)

(62,671)

(54,970)

Change in accounts payable related to intangible assets, property, plant and equipment

(2,551)

(4,115)

7,396

570

FREE CASH FLOW

(6,565)

23,724

15,171

27,412

Payments for acquired business, net of cash acquired

(476)

—

(20,551)

(5,074)

Change in other non-current financial assets

(1,049)

(377)

(6,292)

197

CASH USED FOR INVESTING ACTIVITIES

(25,590)

(20,284)

(82,118)

(59,277)

Issuance of long-term borrowings

790

739

3,183

3,798

Repayment of borrowings

(1,484)

32

(6,130)

(5,416)

Proceeds from capital increase

3,575

1,600

10,009

17,182

Change in other financial liabilities

—

(25)

(1,000)

(196)

CASH FROM FINANCING ACTIVITIES

2,881

2,346

6,062

15,368

CHANGE IN NET CASH AND CASH EQUIVALENTS

(5,209)

25,693

(5,610)

37,903

Net cash and cash equivalents at beginning of period

321,109

377,407

351,827

353,537

Effect of exchange rates changes on cash and cash equivalents

(1,256)

4,058

(31,573)

15,718

Net cash and cash equivalents at end of period

$

314,644

$

407,158

$

314,644

$

407,158

⁽¹⁾ out of which $13.1 million and $28.6 million was share-based compensation expense according to ASC 718 - Compensation - stock compensation for the quarter ended and year to date September 30, 2016, respectively.

CRITEO S.A.

Reconciliation of Revenue ex-TAC by Region to Revenue by Region

(U.S. dollars in thousands)

(unaudited)

Three Months Ended

Nine Months Ended

September 30,

September 30,

Region

2015

2016

YoY
Change

YoY
Change at
Constant
Currency

2015

2016

YoY Change

YoY
Change at
Constant
Currency

Revenue

Americas

$

124,024

$

160,739

30

%

29

%

$

335,520

$

464,435

38

%

40

%

EMEA

137,185

157,921

15

%

19

%

396,200

471,226

19

%

22

%

Asia-Pacific

71,465

105,207

47

%

30

%

194,432

296,660

53

%

42

%

Total

332,674

423,867

27

%

25

%

926,152

1,232,321

33

%

33

%

Traffic acquisition costs

Americas

(75,684)

(97,239)

28

%

28

%

(203,781)

(284,728)

40

%

41

%

EMEA

(79,710)

(87,092)

9

%

13

%

(231,023)

(265,097)

15

%

17

%

Asia-Pacific

(43,576)

(62,979)

45

%

27

%

(117,293)

(177,209)

51

%

40

%

Total

(198,970)

(247,310)

24

%

22

%

(552,097)

(727,034)

32

%

31

%

Revenue ex-TAC

Americas

48,340

63,500

31

%

31

%

131,739

179,707

36

%

38

%

EMEA

57,475

70,829

23

%

27

%

165,177

206,129

25

%

27

%

Asia-Pacific

27,889

42,228

51

%

34

%

77,139

119,451

55

%

45

%

Total

$

133,704

$

176,557

32

%

30

%

$

374,055

$

505,287

35

%

35

%

⁽¹⁾ We define Revenue ex-TAC as our revenue excluding traffic acquisition costs generated over the applicable measurement period. Revenue ex-TAC and Revenue, Traffic Acquisition Costs and Revenue ex-TAC by Region are not measures calculated in accordance with U.S. GAAP. We have included Revenue ex-TAC and Revenue, Traffic Acquisition Costs and Revenue ex-TAC by Region in this Form 8-K because they 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 the elimination of TAC from revenue and review of these measures by region can provide useful measures for period-to-period comparisons of our core business. Accordingly, we believe that Revenue ex-TAC and Revenue, Traffic Acquisition Costs and Revenue ex-TAC by Region 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 Revenue ex-TAC and Revenue, Traffic Acquisition Costs and Revenue ex-TAC by Region 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 Revenue, Traffic Acquisition Costs and Revenue ex-TAC by Region or similarly titled measures but define the regions differently, which reduces their effectiveness as a comparative measure; and (c) other companies may report Revenue 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 Revenue ex-TAC and Revenue, Traffic Acquisition Costs and Revenue ex-TAC by Region alongside our other U.S. GAAP financial results, including revenue. The above table provides a reconciliation of revenue ex-TAC to revenue and revenue ex-TAC by region to revenue by region.

CRITEO S.A.

Reconciliation of Adjusted EBITDA to Net Income

(U.S. dollars in thousands)

(unaudited)

Three Months Ended

Nine Months Ended

September 30,

September 30,

2015

2016

2015

2016

Net income

$

5,793

$

14,724

$

23,339

$

46,589

Adjustments:

Financial (income) expense

6,650

570

5,276

1,982

Provision for income taxes

5,388

7,574

13,896

19,968

Equity awards compensation expense

4,600

13,965

16,242

30,030

Research and development

$

1,714

$

4,667

$

4,354

$

9,248

Sales and operations

1,715

5,143

8,072

11,021

General and administrative

1,171

4,155

3,816

9,761

Pension service costs

110

132

332

392

Research and development

41

55

123

160

Sales and operations

37

38

115

107

General and administrative

32

39

94

125

Depreciation and amortization expense

11,892

14,771

30,598

40,588

Cost of revenue

8,503

10,406

21,287

27,846

Research and development

1,690

1,640

4,811

5,105

Sales and operations

1,330

1,813

3,434

5,604

General and administrative

369

912

1,066

2,033

Acquisition-related costs

—

1,793

—

1,941

General and administrative

—

1,793

—

1,941

Acquisition-related deferred price consideration

54

3

278

88

Research and development

54

3

278

88

Total net adjustments

28,694

38,808

66,622

94,989

Adjusted EBITDA ⁽¹⁾

$

34,487

$

53,532

$

89,961

$

141,578

⁽¹⁾  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, acquisition-related costs and deferred price consideration. 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 evaluate operating performance, generate future operating plans and make strategic decisions regarding the allocation of capital. In particular, we believe that the elimination of equity awards compensation expense, pension service costs, acquisition-related costs and deferred price consideration in calculating Adjusted EBITDA can provide a useful measure for period-to-period comparisons of our core 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.

CRITEO S.A.

 Detailed Information on Selected Items

(U.S. dollars in thousands)

(unaudited)

Three Months Ended

Nine Months Ended

September 30,

September 30,

2015

2016

2015

2016

Equity awards compensation expense

Research and development

$

1,714

$

4,667

$

4,354

$

9,248

Sales and operations

1,715

5,143

8,072

11,021

General and administrative

1,171

4,155

3,816

9,761

                Total equity awards compensation expense

4,600

13,965

16,242

30,030

Pension service costs

Research and development

41

55

123

160

Sales and operations

37

38

115

107

General and administrative

32

39

94

125

                                     Total pension service costs

110

132

332

392

Depreciation and amortization expense

Cost of revenue

8,503

10,406

21,287

27,846

Research and development

1,690

1,640

4,811

5,105

Sales and operations

1,330

1,813

3,434

5,604

General and administrative

369

912

1,066

2,033

                Total depreciation and amortization expense

11,892

14,771

30,598

40,588

Acquisition-related costs

General and administrative

—

1,793

—

1,941

                Total acquisition-related costs

—

1,793

—

1,941

Acquisition-related deferred price consideration

Research and development

54

3

278

88

                Total acquisition-related deferred price consideration

$

54

$

3

$

278

$

88

CRITEO S.A.

Reconciliation of Adjusted Net Income to Net Income

(U.S. dollars in thousands except share and per share data)

(unaudited)

Three Months Ended

Nine Months Ended

September 30,

September 30,

2015

2016

2015

2016

Net income

$

5,793

$

14,724

$

23,339

$

46,589

Adjustments:

Equity awards compensation expense

4,600

13,965

16,242

30,030

Amortization of acquisition-related intangible assets

1,200

943

3,794

3,145

Acquisition-related costs

—

1,793

—

1,941

Acquisition-related deferred price consideration

54

3

278

88

Tax impact of the above adjustments

(274)

(129)

(830)

(516)

Total net adjustments

5,580

16,575

19,484

34,688

Adjusted net income ⁽¹⁾

$

11,373

$

31,299

$

42,823

$

81,277

Weighted average shares outstanding

 - Basic

62,082,110

63,628,351

61,662,308

63,163,922

 - Diluted

65,254,238

65,816,422

65,095,690

65,429,757

Adjusted net income per share

 - Basic

$

0.18

$

0.49

$

0.69

$

1.29

 - Diluted

$

0.17

$

0.48

$

0.66

$

1.24

⁽¹⁾ We define Adjusted Net Income as our net income adjusted to eliminate the impact of equity awards compensation expense, amortization of acquisition-related intangible assets, acquisition-related costs and deferred price consideration and the tax impact of the foregoing adjustments. Adjusted Net Income is not a measure calculated in accordance with U.S. GAAP. We have included Adjusted Net Income 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 regarding the allocation of capital. In particular, we believe that the elimination of equity awards compensation expense, amortization of acquisition-related intangible assets, acquisition-related costs and deferred price consideration,  and the tax impact of the foregoing adjustments in calculating Adjusted Net Income can provide a useful measure for period-to-period comparisons of our core business. Accordingly, we believe that Adjusted Net Income 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 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.

CRITEO S.A.

Constant Currency Reconciliation

(U.S. dollars in thousands)

(unaudited)

Three Months Ended

Nine Months Ended

September 30,

September 30,

2015

2016

YoY
Change

2015

2016

YoY
Change

Revenue as reported

$

332,674

$

423,867

27

%

$

926,152

$

1,232,321

33

%

Conversion impact U.S. dollar/other currencies

(7,986)

(4,186)

Revenue at constant currency ⁽¹⁾

$

332,674

$

415,881

25

%

$

926,152

$

1,228,135

33

%

Traffic acquisition costs as reported

(198,970)

(247,310)

24

%

(552,097)

(727,034)

32

%

Conversion impact U.S. dollar/other currencies

4,997

3,210

Traffic Acquisition Costs at constant currency ⁽¹⁾

$

(198,970)

$

(242,313)

22

%

$

(552,097)

$

(723,824)

31

%

Revenue ex-TAC ⁽²⁾ as reported

133,704

176,557

32

%

374,055

505,287

35

%

Conversion impact U.S. dollar/other currencies

(2,989)

(976)

Revenue ex-TAC ⁽²⁾ at constant currency ⁽¹⁾

$

133,704

$

173,568

30

%

$

374,055

$

504,311

35

%

Revenue ex-TAC ⁽²⁾/Revenue as reported

40

%

42

%

40

%

41

%

Other cost of revenue as reported