Criteo raises guidance following second quarter growth in retail media

Criteo reported second quarter 2025 revenue of $483 million on July 30, 2025, representing a 2% increase compared to $471 million in the second quarter of 2024. The global commerce media platform company achieved gross profit of $259 million, marking an 11% year-over-year improvement from $233 million in Q2 2024.

Revenue performance varied across geographic regions. Americas revenue decreased 6% to $199.8 million, while EMEA posted 10% growth to $186.0 million. The APAC region delivered 7% growth, reaching $96.9 million for the quarter.

Contribution ex-TAC, the company's primary profitability metric excluding traffic acquisition costs, increased 9% to $292 million. At constant currency, Contribution ex-TAC grew 7% year-over-year. This measure serves as Criteo's equivalent to gross profit and represents a key indicator used by management to evaluate operating performance.

"Our second quarter results highlight disciplined execution and a solid foundation for the future," said Michael Komasinski, Chief Executive Officer of Criteo. "We are building a unified, outcome-based advertising platform for the next decade of commerce, anchored on AI innovation, to deliver long-term value for clients, partners, and shareholders."

Retail media segment accelerates growth

Retail media revenue increased 11% to $60.9 million, maintaining double-digit growth at constant currency. Retail media Contribution ex-TAC reached $60.0 million, representing 11% growth year-over-year at constant currency. Same-retailer Contribution ex-TAC retention for retail media reached 112%, indicating strong client satisfaction and expanded spending.

The retail media segment has become increasingly central to Criteo's strategy following several high-profile partnerships. The company partnered with dentsu in June 2025, marking the first time a holding company leveraged Criteo's complete Commerce Media Platform stack. This collaboration integrates Criteo's audience targeting capabilities with dentsu's global data solution.

Platform adoption expanded to 4,000 brands during the quarter. New retailer partnerships included Thermo Fisher, BJ's Wholesale Club, and grocers Weis Markets, Winn-Dixie, and Harveys Supermarkets through digital commerce partner Mercatus. These additions demonstrate continued expansion across diverse retail categories.

The company launched auction-based display technology in June 2025, introducing programmatic flexibility into retail media environments. This technology shift from fixed pricing toward advertiser-driven bidding mechanisms reflects real-time category dynamics and seasonal demand patterns.

Performance media maintains steady trajectory

Performance media revenue increased 1% to $421.8 million, while contribution ex-TAC grew 9% to $232.1 million. At constant currency, Performance Media Contribution ex-TAC increased 6%. Growth drivers included the company's Commerce Growth solution, which leverages large-scale commerce data and AI-powered audience modeling to identify in-market shoppers.

The segment benefited from Commerce Grid SSP expansion, though AdTech services continued facing headwinds from reduced spending by large clients. This pattern reflects broader industry trends toward platform technology solutions rather than managed services offerings, as previously documented in Criteo's Q1 2025 client relationship changes.

A global integration with Mirakl Ads launched during the quarter to unlock mid-to-long-tail activation and accelerate marketplace revenue growth. This partnership targets third-party sellers and mid-to-long-tail advertisers who typically remain outside traditional sales channels but collectively spend 127% more than first-party brands on Amazon platforms.

Financial performance demonstrates operational efficiency

Net income totaled $23 million, equivalent to $0.39 per diluted share, compared to $28 million or $0.46 per diluted share in Q2 2024. Adjusted net income reached $51 million, representing $0.92 per diluted share, compared to $64 million or $1.08 per diluted share in the prior year period.

Adjusted EBITDA decreased 4% to $89 million from $93 million in Q2 2024. The company attributed this decline to planned growth investments in personnel and marketing events, partially offset by higher Contribution ex-TAC. Adjusted EBITDA margin reached 31% of Contribution ex-TAC, compared to 35% in the prior year quarter.

Operating expenses increased 16% year-over-year to $228 million, driven by planned growth investments and accelerated amortization of intangible assets. Non-GAAP operating expenses rose 18% to $175 million. The accelerated amortization included $7.9 million related to internally developed intangible assets following Alphabet Inc.'s decision not to proceed with third-party cookie deprecation in Chrome.

Cash flow from operating activities totaled negative $1 million in Q2 2025, compared to positive $17 million in Q2 2024. Free cash flow reached negative $36 million versus negative $4 million in the prior year quarter. On a trailing 12-month basis, free cash flow reached $194 million.

Capital allocation demonstrates shareholder returns focus

The company deployed $104 million for share repurchases during the first half of 2025, demonstrating commitment to returning capital to shareholders. Cash and cash equivalents totaled $206 million at quarter-end, with total financial liquidity of approximately $746 million including marketable securities, revolving credit facility, and treasury shares reserved for mergers and acquisitions.

"Our second quarter results reflect the strength of our diversified offering and global client base," said Sarah Glickman, Chief Financial Officer. "We are raising our full-year 2025 guidance and remain confident in our business strategy, as demonstrated by the deployment of $104 million for share repurchases in the first half of 2025."

The company's balance sheet position provides flexibility for continued investment in platform capabilities while maintaining strategic optionality for acquisitions and partnerships.

Management transitions position platform for growth

Several executive promotions took effect during the quarter. Todd Parsons received promotion to Chief Product Officer and President, Performance Media, while Sherry Smith became President, Retail Media. These appointments reflect the company's focus on specialized leadership for each business segment.

The board of directors appointed Stefanie Jay at the 2025 Annual General Meeting of Shareholders, bringing additional expertise to governance oversight. These leadership changes align with the company's strategic evolution toward unified platform operations.

Guidance reflects optimistic market outlook

For fiscal year 2025, Criteo raised its Contribution ex-TAC growth expectations to 3-4% at constant currency, compared to previous guidance of low-single-digit growth. The company maintained Adjusted EBITDA margin guidance of approximately 33-34% of Contribution ex-TAC.

Third quarter 2025 guidance projects Contribution ex-TAC between $277 million and $283 million, representing 5-7% year-over-year growth at constant currency. Adjusted EBITDA guidance ranges from $81 million to $87 million for Q3 2025.

The improved guidance reflects management's confidence in retail media growth prospects and platform technology adoption. Exchange rate assumptions include USD-EUR at 0.909, USD-JPY at 150, USD-GBP at 0.776, USD-KRW at 1,411, and USD-BRL at 5.81.

Market context supports commerce media expansion

The guidance increase occurs amid broader retail media market growth. European digital advertising reached €118.9 billion in 2024, with retail media serving as a key growth driver. On-site retail media spending grew 22.2% to exceed €10 billion across European markets.

Industry analysis indicates over 90% of advertisers now partner with retailers to access first-party data. Brands working with 4-6 retail media networks doubled in 2025, demonstrating clear diversification strategies among European advertisers.

The timing aligns with programmatic advertising growth reaching 72% as marketers increase investment in automated buying platforms. Connected TV's share of media budgets projected to double from 14% in 2023 to 28% in 2025, creating additional opportunities for commerce media integration.

Technology investments drive platform capabilities

Media spend activated through Criteo's platform reached $4.3 billion over the last 12 months, with $1.0 billion in Q2 2025 remaining flat year-over-year at constant currency. This volume demonstrates the platform's scale and advertiser commitment to Criteo's technology solutions.

The company operates retail media programs for approximately 225 retailers globally, including partnerships with major chains. Recent additions span multiple categories from wholesale clubs to supermarket chains, indicating broad retail sector adoption of commerce media capabilities.

AI innovation remains central to platform development, with the company investing in machine learning algorithms for audience identification and campaign optimization. These technological capabilities differentiate Criteo's offering in an increasingly competitive retail media landscape.

Timeline

• July 12, 2021: Criteo acquires Mabaya to expand marketplace monetization capabilities
• January 9, 2024: Criteo partners with Albertsons Media Collective across 2,200 stores
• March 29, 2024: Criteo achieves industry-leading MRC accreditation for retail media measurement
• November 19, 2024: Criteo unveils strategic growth plans at retail media investor update event
• May 3, 2025: Criteo reports Q1 results with major client relationship changes
• June 13, 2025: Criteo partners with dentsu for global commerce media expansion
• June 17, 2025: Criteo launches auction-based display technology for retail media
• July 17, 2025: Criteo and Mirakl Ads launch global integration for marketplace revenue
• July 30, 2025: Criteo reports Q2 2025 results and raises full-year guidance

Key Terms Explained

Contribution ex-TAC

Contribution ex-TAC represents Criteo's primary profitability metric, calculated by deducting traffic acquisition costs from revenue. This non-GAAP measure serves as the company's equivalent to gross profit and provides management with a key indicator for evaluating operating performance across accounting periods. The metric excludes other costs of revenue beyond traffic acquisition, enabling clearer period-to-period comparisons of business performance and strategic decision-making regarding capital allocation.

Retail Media

Retail media encompasses advertising sold on commerce platforms or retailers' owned digital properties, including sponsored products, sponsored display, and video formats. This rapidly growing sector leverages retailer first-party data to enable brands to reach consumers at the point of purchase. The category has emerged as a major growth driver in digital advertising, with European on-site retail media spending exceeding €10 billion in 2024 and growing 22.2% year-over-year.

Commerce Media Platform

Criteo's Commerce Media Platform represents a unified technology infrastructure connecting thousands of marketers and media owners to facilitate enhanced consumer experiences from product discovery to purchase. The platform combines AI-powered optimization, extensive commerce data signals, and programmatic buying capabilities to deliver targeted advertising solutions across retail environments. This technology-first approach differentiates Criteo from traditional managed services models.

Performance Media

Performance Media constitutes Criteo's traditional advertising business focused on driving measurable outcomes across the buyer journey. The segment leverages commerce data and AI-powered audience modeling to identify in-market shoppers through solutions like Commerce Growth. Performance Media generated $421.8 million in Q2 2025 revenue, representing the larger portion of Criteo's business compared to retail media operations.

Adjusted EBITDA

Adjusted EBITDA measures Criteo's consolidated earnings before financial income, taxes, depreciation, and amortization, with adjustments for equity compensation, acquisition costs, restructuring expenses, and other non-recurring items. This non-GAAP metric enables management and investors to evaluate core operating performance and trends while preparing annual budgets and developing operational plans. The measure facilitates meaningful period-to-period business comparisons.

Traffic Acquisition Costs

Traffic acquisition costs represent payments made to partners and publishers for advertising inventory and audience access. These costs constitute a significant component of Criteo's expense structure, totaling $190.6 million in Q2 2025 compared to $204.2 million in the prior year quarter. The decline reflects improved efficiency in inventory procurement and strategic shifts toward higher-margin platform-based revenue streams.

Constant Currency

Constant currency measures exclude foreign exchange rate fluctuations by applying prior year monthly exchange rates to transactions denominated in settlement or billing currencies other than the U.S. dollar. This methodology enables clearer assessment of underlying business performance without currency translation effects. Criteo uses constant currency metrics to provide investors with better visibility into operational trends across its global business segments.

Same-Retailer Retention

Same-retailer Contribution ex-TAC retention measures the percentage of revenue generated by retail media clients that remained active with Criteo from one year to the corresponding quarter in the following year. The Q2 2025 retention rate of 112% indicates existing clients increased their spending beyond the previous year's levels, demonstrating strong client satisfaction and successful account expansion efforts within Criteo's retail media business.

Free Cash Flow

Free Cash Flow represents cash flow from operating activities minus acquisitions of intangible assets, property, and equipment, along with changes in accounts payable related to capital expenditures. This metric provides management and investors with insight into the company's ability to generate cash for shareholder returns, debt repayment, and strategic investments. Criteo generated $194 million in trailing 12-month free cash flow despite negative quarterly results.

Programmatic Advertising

Programmatic advertising utilizes automated technology platforms to purchase and optimize digital advertising inventory in real-time through algorithmic bidding processes. Criteo's auction-based display technology introduced programmatic flexibility into retail media environments, enabling advertiser-driven bidding mechanisms that reflect real-time category dynamics. This approach represents a shift from traditional fixed pricing models toward more dynamic, performance-oriented advertising solutions.

Summary

Who: Criteo S.A. (NASDAQ: CRTO), a global commerce media platform company, reported quarterly results through CEO Michael Komasinski and CFO Sarah Glickman. New appointments include Todd Parsons as Chief Product Officer and President of Performance Media, and Sherry Smith as President of Retail Media.

What: Criteo achieved Q2 2025 revenue of $483 million with Contribution ex-TAC of $292 million, raising full-year 2025 guidance for Contribution ex-TAC growth to 3-4% at constant currency. The company deployed $104 million for share repurchases in the first half of 2025 while expanding platform adoption to 4,000 brands.

When: Results announced July 30, 2025, covering the three months ended June 30, 2025. The company provided third quarter 2025 guidance and updated full-year 2025 expectations.

Where: Global operations with revenue breakdown showing Americas at $199.8 million, EMEA at $186.0 million, and APAC at $96.9 million. Platform serves 4,000 brands across 225 retail media programs worldwide.

Why: The results matter for the marketing community because they demonstrate continued growth in retail media, validate the shift toward programmatic commerce advertising, and highlight the importance of first-party data and AI-powered optimization in the evolving digital advertising landscape. The raised guidance signals confidence in commerce media expansion amid broader industry transformation toward privacy-first advertising solutions.