Q1 2022 Criteo SA Earnings Call
We also discuss non-GAAP measurements of our performance definitions and reconciliations to the most directly comparable GAAP metrics are included in our earnings release published today.
And unless otherwise stated all growth kind of reasons made during before are against the same period in the prior year.
With that let me hand, it over to Megan Thanks, Melanie and good morning, everyone. Thank you all for joining us today.
We're off to a solid start this year.
So energized about the opportunity ahead of us let.
Let me jump straight in with this.
<unk> on our proposed acquisition of iPhone business. We've conducted a review to have autonomous business continuity plans and the progress of its planned relocation of its Russian based engineering resources and we are encouraged that <unk> is taking appropriate steps and as seen minimum disruption to their business.
We're in close discussions with the <unk> team to restructure the proposed transaction and we look forward to providing additional updates in the meantime, we are working with <unk> through our existing commercial arrangements to continue to execute on our bonus media platform vision employment.
I wanted to come out of it and make sure that remind everyone of the opportunity that exists around <unk> media.
What is the most attractive secular growth trends in our industry today.
The next wave of advertising is upon us and like its predecessor and display search and social.
Got it to be huge it is of course <unk> media.
Pierre has been talking about commerce media for some time and comments media as opportunities that comes when you connect consumers market as the media owners to drive commerce outcomes.
It starts with retail media retail media is enabling retailers to create personalized advertising experiences on their own digital assets or digital in store contents.
If we're making them meteor owners.
<unk> online advertising.
They are using their own first party data to inform the experience.
Closed loop measurement to demonstrate outcomes. This is affected by the extension of our foreign shopper marketing.
So online.
This movement is opening a new and high margin revenue stream for retailers.
The retail media opportunity to go to.
The retailer extends its advertising reach offsite and across the open internet.
Effectively looking for more opportunities to attract and retain targeted consumers beyond its own content.
We call this off site advertising.
This opens up retailers to a new revenue stream, while attracting brands to boost their visibility on the digital shelf and.
And further attract and retain commerce audiences at all.
Also attracts new dollars to media owners across the open Internet is the ebb and flow of site.
Almost mirror expand because retail media to non retail media owners.
It is the broader ability to monetize for Columbus everywhere anywhere where consumers spend their time.
It enables advertisers to attract convert and retain consumers.
Engaging audiences on your own as properties across the open Internet and it connects AD spend directly.
To comment outcomes.
The capital of this powerful combination of commerce data.
And deep machine learning to form almost audiences is the foundation of successful Commerce media strategy.
So comments media and specifically for retailer focused on reach media.
Video has been providing the platform that enables retail for media for five years.
We are a tech enabled for large retailers, including Lowe's best buy and target.
Leading the way in this rep suddenly growing sites, we're encouraged by the value that large retailers are seeing and this new advertising frontier as we've heard over and over again and their earnings commentary.
It stands to reason given that comment media is currently estimated to reach.
$180 billion to $200 billion 10 over the next 40 years the horizon of clear media has come about as a result of the quest to monetize valuable first party customer.
Customer data.
Which retail and other media covenants have struggled to fully utilized for many years.
Unlocking the data value.
Surface, the valuable advertising opportunity within their online stores and a data book between offline and online marketing tactics.
Pretty good comments media platforms. Some consensus mature in this let's take a look at our recent partnerships.
That was formed which unlocks that opportunity.
The game changing commerce media platform and brands that we recently saw.
On with Flip-top, India's growing <unk> marketplace is a great example.
Using our platform.
Brands will have access to best in class advertising solutions, we're pretty guy's comments via technology, including our Offsite capabilities.
Cost 40 and fail.
Part of this partnership launch a product performance Ed will enable advertisers to deliver the full funnel marketing goals on the open internet by delivering our technology and flip top $40 signals.
A highly relevant reach and higher our overall campaign efficiency.
This represents a truly exciting partnership for both of us.
Similarly, we have renewed our focus on our partnership with Shopify, which enable as many sections of all sizes to take advantage of our platform and expense and global reach to target users across all channels and devices.
A lot more to come there.
Here are the primary reason why clients are choosing <unk> for their clients and retail media needs.
Why we'd like to continue to win their business first.
We will make Sarcomas media platform unique is bringing together on site advertising with offsite advertising across multiple formats.
Important to our marketers and retailer clients is the ability to engage consumers effectively throughout their shopping journey.
Our goal is to have one tech and one data source to.
The Netherlands side of the consumer as they engage with Dunkin'.
We believe that our comments may platform will relocate single view across the buy and sell side.
To create consistency and eliminates one of the biggest issues for clients.
A plateau fatigue and pick that cause.
As byproduct of multiple platform waters.
Second operating both demand and supply side solutions at scale.
It's a powerful network effect that benefits brands agencies retailers publishes and also <unk>.
Today, we work with about 22000 commerce clients thousands of publishers and activate close to $3 billion in annual media spend throughout our platform.
And retail media loan, we support more than 100 retailers.
Kind of a 1500 brands with increased supply attract more demand to our platform and vice versa.
Our 16 years of proprietary comments focus AI, leveraging a huge commerce dataset.
From approximately 725 million daily active users and unique access to over one trillion dollars of.
E Commerce sales.
As a differentiator and we continue to expand our reach with daily active users growing 6%.
Compared to last quarter.
The U S alone.
<unk> single market the biggest advertising market in the world.
Our active daily active user reach is over 50% of the U S population.
So the chances of finding <unk> for retailers onsite and Offsite it's huge.
Adding to that our ability to find and attract new consumers through our reach in combination of AI and data. This drive comments outcomes maximizes return on AD spend for our clients. This unlocks revenue for clients.
Nobody has the same text deck and breath of comment either on the open internet.
In a world of diminishing operating system signals.
Data reach scale and AI is critical.
Let's now turn to our first quarter performance, we delivered constant currency growth.
Our fifth and sixth.
Quarter of contribution exact growth.
Demonstrating continued business momentum.
This was driven by strength in retail media growing close to 50% audience targeting from over 40%.
And to a lesser extent the bounce back of treble.
This one and offset the slower macro environment and suspension of our operations in Russia.
Once again, our focus on growth and execution of the results. We certainly walk you through this in more detail shortly.
We remain confident in our commerce media platform strategy, the execution of our plan and our growth momentum.
The media and activation headed by our cross media platform a good indicator of the scale that we continue to build across the business.
This increased 12% to $645 million this quarter.
We're thrilled to welcome Bryan Gleason.
Our chief revenue officer.
And he has hit the ground running and is top priority is to realize the full potential of our promise meatier opportunity and execute our go to market strategy to drive sustainable growth.
As a media agency veterans his client fifth mining from CIT and proven track record of scaling businesses is instrument mental and embark on an exciting growth.
Brian has come in at exactly the right time, as we continue to sign deals with large marketplaces and accurate.
Retailers, including <unk> and Michael Kors.
He will also join us.
Just as we launch exciting new clients and has been quite a nordstrom and soft pitch on our platform and.
<unk> expense since further adoption with EBIT.
Brian Its agency heritage brings even more firepower to our agency and will work with us.
Really firing on all cylinders with over 200 million.
Millions and activated media spend or about 32% of our overall business coming through agencies in the first quarter compared to 30% a year ago.
As the retail media partner of choice on the open Internet.
For agency incentives and first to market opportunities within our retail meter eco system and platform globally, and we're seeing strong traction with our agency partners.
And ship fulfillment, let's say seamless integration and higher volume of media spend.
Global partnership with group <unk> is delivering at pace, we've recently signed a global arrangements.
Agreement with essential and its world class E Commerce agencies.
In the U S deal with another large agency holding company.
We expect more on this front in the future.
That business is no longer a point solution business looks like my photos and ASIC, where a platform business.
More specifically our comments media platform business focused on retail media at our core.
We think about servicing our clients' needs every day as they relate to acquiring and retaining customers.
And we use the brits about excellent.
To do that with efficiency.
Our ability to attract and retain customers for our clients.
It does not have to rely on third party operating system signals. However, we will use them when they exist.
And assist our clients as they move away from them essentially embracing more privacy enabled controllable and reliable signals.
But note that those signals have become high functioning infrastructure the entire internet has been developed to measurement.
Context user variance in more of a good part of 2020 years.
So the operating system to remove and expect the world to function just not fair.
We commend UK domain for their efforts to manage this.
In turn will help our clients navigate any chance and choosing either now AI.
Our reach in the pool and innovative work thats coming out of our product and R&D organization.
And Todd will say more about that in a minute.
Finally, I'd like to take the opportunity.
All of our <unk> for their hard work and relentless dedication to our clients.
We're actively adding talent to a fast start.
Fast growing areas of our business I am pleased to be an employer of choice.
Industry. This is a reflection of our values and commitment to put people first.
Just recently, we signed the lead network with CEO , which strengthen our strong commitment to sustained pay equity globally and to advance career paths and technology for women.
The inability at the core of everything that we do and when.
Continue to enhance our ESG disclosures.
Committed to the United Nations sustainable development goals.
And we have adopted the sustainable accounting standards Board reporting framework and a recently published corporate social responsibility report.
With that I'm pleased to hand to cross another plant.
Thank you Megan and good morning, everyone.
Let me start with some perspectives on our progress stage, our priority is and always has been to connect consumers marketers and media owners and to drive commerce outcomes over the year first radio solutions have grown to span the entire consumer commerce journey from discovering brands and products for the first time to ensuring the <unk>.
Best opportunities for a sale.
We are making.
Subsequent visit more profitable all impressed segways the loss of certain single starting with both IDP and 2017.
Our efforts to find innovative ways to engage with consumers and diversify our away from re targeting for the benefits of both our clients and consumers and we've accelerated our innovation over the past two years.
I'd like to walk you through intangibles and holds of how our commerce media platform strategy is coming to life and how we are ensuring our clients can acquire and retain quality audiences.
First we are proving that we can help our marketers better engage with consumers at scale as signals disappear.
Our clients tell us that performance advertising is a critical need and we continue to solve that problem for them, we will leverage the unrivaled combination of our AI.
<unk> data to create privacy safe audiences or each step of the consumer Commerce journey. As an example, we have run hundreds of live tests for acquisition and retention specifically on us over the past few months I am pleased to say, we successfully helped our marketer clients.
To recover lost traffic and therefore maintain their spending in this environment. During these tests while still early these are exciting results. We look forward to further scaling our audience targeting to mitigate the impact of third party signals going away in environments like iOS or safari today.
And chrome Android in the future with the added benefit of continuously improving our AI decisions along the way.
Second we are building a commerce media network with industry, leading scale and first party data, we're continuously looking for innovative ways to solve complex problems.
And ultimately we believe our first party Commerce media network will help marketers and media owners preserve and increase their ability to reach relevant users and personalized campaigns for onboarding enriching and activating first party data.
As you know we have access to first party data from about 22000, marketer clients and approximately 60% of our daily active users on the web.
Vessel Boulder media owners, we have direct access to.
This is a key priority for us and we continue to expand direct supplier relationships and add multiple new publisher.
With our Commerce media platform strategy, we are offering new ways for media owners to get the best monetization and yield out of their media our proposed acquisition of <unk> with.
We'll also expand our direct publisher footprint.
Hence our potential to operate and activate more for third party data than ever before.
Third we innovate to support new shopping experiences Droppable video is a great example of solutions that are forefront of Irving and commerce to content, where consumers spend their time discovering our customers' brands.
Across the open Internet.
Today, we're present further to bring retail storefronts and other interactive commerce experiences across our network, including experimentation with new game and watch stream media.
This work will continue to expand our customer ability to engage audiences and all comps friendly environments through our current media platform.
Lastly, we remain invested in any <unk> related to industry wide initiative that may improve consumer privacy as it relates to commerce iab sell defined audiences that google's privacy sandbox are two examples.
We will be participating in Gould trials, the top six and pledge, which are just about to start.
As we did with floppy forehand, our approach will be to provide a quantitative view on how these initiatives could meet marker in media owner of practice, while respecting consumer privacy rights.
Much more to come here and we'll update you throughout the year.
Now, let me highlight some wins starting with retail media.
Powerful combination of our onsite and offsite advertising capabilities represent a unique value proposition and key differentiator. This is why flip our chose prettier.
We're able to extend retail media capabilities offsite to recommend brands to new consumers and maximize our spend from these brands by leveraging their existing integrations for on site retail media monetization.
Retailers partnering with pretty old can seamlessly enable brands to target audiences across the open web as well as measured results at the <unk> level.
A number of our global onsite consumer brands are increasingly leveraging offsite capabilities to drive higher traffic and in any cases also drive higher conversion.
They also benefit from a holistic assessment of their marketing strategies and spending.
We're only getting started and we're very excited about the tremendous selling opportunities coming with offsets.
We look forward to showcasing our integrated off onsite and Offsite self service campaign management and measurement capabilities. When we're at Cannes Lion next month.
The best address the needs of our clients, we're evolving to always on audience marketing strategies from point solutions.
Bob bring axa, the full funnel capabilities and commerce audiences through our commerce media platform.
In practice that means that our clients can choose to different type of audiences different types of targeting and engage them across web and app environments to attract convert and retain customers.
With the power of our AI driven audience modeling, we are enabling our clients to expand their reach and drive successful medical for bolt commerce outcomes.
It is clear that our always on approach is resonating with our clients who value have one partner to help them engage with consumers across the entire buying journey.
It is exciting to see clients, who traditionally have come to us for customer retention now adopt customer acquisition solutions, thus increasing their total media spend with radio.
As an example, one of our CPG customers recently adopted our always on approach and has since increased its total media spend with us by 44% with customer acquisition can now accounting for 89% of its total spend.
Another example is a fashion.
Previously didn't spend any upper funnel a budget with video and is now dedicated hitting 67% of the budget to customer acquisition, increasing its overall spend with us by 20%.
These are only a few example holds that emphasize our ability to deliver value solutions that unlock new upper funnel, how budgets and enable us to operate more data.
To date and on average we're seeing the spend related to acquisition audiences double and account for about half of the total media spend when clients are switching to always on strategies.
These early results are exciting and we believe they will further enhance overall customer lifetime value going forward.
I will now turn it over to Sarah who will take you through our Q1 performance and financial outlook.
Sure.
Thank you Todd.
Good morning, everyone.
Starting with our financial highlights Q1 2022.
Revenue was $511 million contribution ex Tac with $217 million.
Reported contribution and ex Tac.
The year over year $10 million unfavorable forex impact.
Contribution ex Tac grew 6%.
So retail media up 48% and audience cloud thing up 42%.
As previously communicated Q1 results were slightly impacted by.
Let's start for a collapse in the UK and France, and that's a function of our Russia operations in Q1.
The impact from the loss of signals represented 20 million <unk>.
Including iOS in line with our guidance.
He can take you to ship out topline mix with retail media and audience top 10, representing 29% of contribution ex back in our first quarter up from 21% to you about.
Benefited from continued Upselling and cross selling with a third of Lifelock, hence using multiple <unk> solutions.
This is a key performance indicator for us as a cornerstone of our commerce media play.
Client retention remains high at close to 90%.
Turning to our business segments in retail media activated media and expanded by 58% year over year.
To nearly $165 million.
Revenue of $47 million and contribute next part was up 48% to $31 million.
Growth was primarily driven by our U S customers and climate, including being a white labeled platform enable us flagship repayments.
This led to strong traction in PPG.
Logic and fastest growing vertical.
And our marketing solutions segment, we are gaining traction for our always on audience strategy to help us to attract and.
And retain customers.
During the third quarter of steady growth in audience targeting more than offset lower re targeting impacted by Russia, and a slower macro slightly offset by a rebound in travel.
We delivered strong profitability, while investing for future growth.
Adjusted EBITDA was $63 million in Q1 2022.
non-GAAP operating expenses increased 50%.
Fluting higher metal costs related to investments in commercial and product talent.
Moving down the P&L depreciation and amortization increased 1% in Q1, 2022 and share based compensation expense increased 20%.
Our income from operations patients was $28 million and our net income was $21 million in Q1 2022.
Our effective taxes tax rate was 33%.
Our weighted average diluted share count was $63 6 million compared to $64 1 million last year. This resulted in diluted EPS.
32.
And adjusted diluted EPS.
<unk> 53 in Q1 2022.
A strong.
Generation and cash position provide ample financial flexibility to execute on our growth strategy.
Free cash flow grew 9% to $69 million in Q.
Q1, reflecting strong working capital management.
We remain disciplined balanced and shareholder focused capital.
Capital allocation, we invest in profitable growth through both organic investments and value in the acquisition.
We also continue to deploy our strong balance sheet and fund capital to shareholders via our share buyback program, which we resumed in early March 2022.
Turning to our financial outlook, which reflects our expectations as of today may therefore.
As a reminder, our financial guidance for Q2 fiscal year 2022 exclude the proposed acquisition of <unk>.
I can't be one else, we remain cautious about our outlook for the remainder of the year given the uncertain macro backdrop.
Going get political issues high inflation continued lockdowns in Asia, and global supply chain disruptions.
For 2022, we have updated our guidance and now anticipate constant currency growth of 8% to 10% and contribution ex Tac. This.
Relax the suspension of our Russia operations alone are contributing next tax figure up due to higher traffic acquisition costs assessing global supply contracts denominated in USD.
Our guidance for retail media is unchanged and we expect activated media supposed to grow to over $4 billion in contributions.
Both should be approximately 50%.
We also expect contribution extra corrosive approach.
40% for audience targeting.
2022, adjusted EBITDA margin guidance remains unchanged at approximately 32%.
We view 2022 with the ramp up yet and anticipate accelerated growth in 2023.
This will be driven by the diligent credit investments, we are making to deliver our ambition for the commerce media platform and growth for our agency partners.
<unk> enterprise clients and partnership.
Given the weakening of the euro and yen against the US dollar. We now is to make for it changes to low contribution ex Tac by $34 million a full.
Full percentage point.
That's where our previous forecast of $20 million.
Approximately 30% of our countries ex Tac is expected by year end.
But no changes to our annual effective tax rate and capital expenditures and we continue to expect free cash flow conversion of about 45% of adjusted EBITDA.
For Q2, 2022 we have a cautious outlook, given the macro and impact Russias dysfunction.
We expect contribution X type of 220 minutes.
$224 million growing by 46% constant currency.
Reaching forex impact of $9 million.
<unk> done a signal loss private family.
We expect adjusted EBITDA of $49 million to $53 million, which includes higher expenses related to marketing on a company by the internal events that would have been scheduled for June .
To conclude we are confident in our comments media platform to deliver value to our customers and enable growth and resiliency.
We have the tax but the tech stack.
Scale to deliver better performance than anyone else on the open internet.
As with any transformation of pathway Danielle.
Our confidence in our ability to deliver sustainable growth for many years to come.
So I see it about the launches planned timelines.
So our planning to host an impasse and investor events in the third quarter to meet for you to meet our team share more of our innovation I'll provide a comprehensive mid term growth outlook.
The future is wide open for Korea.
And with that I'll turn it over to the REIT test to begin the Q&A session.
We will now begin the question and answer session to ask a question you May Press Star then one on your Touchtone phone. If you are using a speakerphone. Please pick up your handset before pressing the keys to withdraw from the question queue. Please press Star then two.
Our first question is from Sarah Simon of <unk>. Please go ahead.
Yes, good afternoon I've got three.
Three questions. Please.
First one sorry, you said earlier that you were trading towards the low end of the range for Q1, but you actually came in underlying right in the middle So I'm just wondering if something improved subsequent to you saying that.
Second one was just.
But this is a purposeful yesterday perfect Karen is that something that you look at and I'm. Just wondering if you think that the combination of that with CIT Prasad creates any stiffer competition for you.
And then the third thing is I'm kind of amazed that people haven't made more about Brian's made from group having to protect them.
Great Perm is obviously ginormous and you all.
At least in value terms, rather small I'm just wondering what it was that you said to him or what it was he sold the market can't see thanks.
Hey, Thanks, Scott I'm going to have.
Sarah Tech with the Q1 question and I'll take the.
The third one.
Yeah. Thanks Sara.
So when we when we bought at the Morgan Stanley Conference in February there were a few things have happened obviously thought.
I might ask one last was the suspension of the Russia operation.
We had also seen slow our spend in January and February like a slight style.
What we can experience March was actually a very strong March that was that was I think similar to us.
So those are the key reasons, we came in <unk> sales from the midpoint. So we will have with our retail media over peripherals.
Slightly.
The plants, so that was good news for.
For us as well.
So many have the new business trends that will continue.
It's a mix between Russia.
Some macro and somebody you know good news on the other side.
I'll take the publicist province here a question I think I'll take that Brian Christian as well.
So we have we have the imminent a pipeline that is active and.
And of course like anybody looking for.
Ways to build out our portfolio.
Or reviewed.
Frontier on internal <unk>.
Some years ago.
We made we might choice Sarah ends with quite a gradient which is.
Similar in terms of its measurement and analytics capabilities.
It's a fantastic asset to add to our retail media suite.
The tumor.
Hum.
Working quickly, they're very nimble very Edo and responding to our clients' needs.
On a more customized basis as.
As we see plant needs expanding as retail media expense.
So in.
In terms of the split system. It will assist in building their retail media play it is full publicists.
Comp momentum publishes business, but what I will say is a big big big.
Advantage that <unk> has is that we are independents.
So.
Open to any agency holding company using the content media platform and through that they get access to Congress.
<unk> of retailers, where it actually gets.
Pretty much a one stop shop for buy across all of those retailers as opposed to having to put together 10 to 15 to 20 different platforms to be able to make those five so we're about trying to make efficiencies for the agencies all of the agencies.
<unk>.
That's the proposition that we as an independent conoco.
On the Brian fronts look Brian been at group him for a long time.
I got to say I expected him as we were trying to.
Bring them onboard here she believes in our vision.
So actually there's two main setting spinout for Brian .
One is these very program like he is not.
Hum.
<unk> enjoyed his team there and there was nothing that was that he was there was there a reason for them to look outside of <unk>, but that will be tapped to heat up the business and he loved it because of what you said before as you can see how it relates to the agency and the clients that <unk> spoken to you could see how.
He could make a difference to the deployment of that vision through the contacts that he has and Quebec.
He is an agency.
But also the culture of the team.
He loves the passion of the organization.
And it was a really nice sweet spot for him to come across <unk> and <unk>.
And do something new but something he felt very bullish about because he could clearly see the opportunity and web division. So it's a it's a big big win for US and he has hit the ground running key he started before I started.
And he's just in a few weeks here. He has brought Simon touched team already and we feel really excited about what he said.
Sure <unk>.
That's great question.
Thanks.
The next question is from Richard Kramer of Elite Research. Please go ahead.
Megan I'd Love you to expand on this comment you made a couple of times about being more than just a point solution.
Can you reflect a little bit on how you get marketers in the new cohort of advertisers that are represented by retailers together to appreciate this do you need to have your own sort of branded clean room offering that protects both sides data and campaigns, maybe you could talk about that and then a quick one for Todd.
We've talked a lot about the Apple impact.
Cross the AD Tech World in the past couple of years can you talk through how you see Android.
Rotation and and chrome.
Similar impacts in new challenges coming down the Pike.
Since those are obviously sort of imminent. The next the next wave of imminent changes. Thanks.
Yes, Thanks, Richard Thanks for the question I'll talk at a high level out the.
The notion of point solution based platform play in Trinity that opened seven more specific way.
Ill turn the clean room specific <unk> in the second half.
Look at it.
It's a good call outs.
<unk> in the past has been a recent targeting business the amount of tons of house being referred to us would be targeting business.
He is.
As Jim mentioned the difference between them.
Has been and where we are today and Boeing is the notion of something of.
Greg hold of the opportunity that exists around comments media.
And putting.
The breadth of assets pivoting them to be able to see what they do for that opportunity and that becomes a platform play.
So all of the things that we've done in the past for part of the platform play.
Government, where our clients need to attract and retain consumers.
And while we do that better than anybody else, particularly the retention of consumers.
Our retail media onsite capabilities our capability to.
To drive search revenue.
On our ability to extend retailers reach out to independent all of the stuff that just things that we draw from our legacy instead of point solutions in our legacy and part of a platform play which is that business going forward.
When I read the difference.
Sort of break downs of <unk> media is and will be in the future.
Cement it goes beyond just.
Advertising tools.
On search share on display ads onsite, but it goes into promotions and the use of data to.
Same clients insight.
Place for cheap locate trademark conducting on shopper marketing practices in a digital environment.
When you open yourself up to being able to assess that opportunity.
That is truly a platform play.
It brings.
More opportunities speak to the brand.
And really opens up the <unk> opportunity for retailers as I said before it creates a neat opportunity for them and become a media plan.
She is an internet because of course.
Audiences are just so attractive to media owners and having the mechanism that drives advertising across to <unk>.
Also comments audiences on.
On media properties is a powerful place to be old again fueled by this notion of building the platform that underpins.
Everything that's going on across retail media and everything mobile.
Italy is going on the bus comments media, we're right in that sweet spot. So it just it makes perfect sense.
<unk>.
To accelerate them.
The legacy that we had.
The draw on the technology that we have and Sweden as the platform that supports this growing opportunity around cost media.
Is it drives new revenue streams for all elements of.
All of our clients.
Bob do you want to talk about so the cleaner opportunity that.
Sure sure.
Sure. Thanks.
Richard just.
Thanks for the questions they are interrelated.
First one on clean rooms.
The first point out that we.
We are very focused on going where our clients are going and have invested.
And bringing leverage to those investments so with clean rooms, they're called dimensions to that one is.
There is a pick up.
You both notable players that space, we've talked about before.
In <unk>, one <unk> was one snowflake as well.
And of course, we're active in making sure that we can work with those products and add leverage to them.
As our clients select and the second thing is that internally, we continued to invest in private computing ourselves.
So that we have the capability to.
Possibly provide a sidecar to those other products that we partner with <unk>.
Again, the idea is not to provide a single solution, but to go where our clients are going and to add to the way that they do business and the way they invest.
With the iOS question I think what comes out what's important to say is that there is no silver bullet but.
Never has been.
<unk>.
In the prepared remarks.
We accentuated the fact that our innovation has really been strong in coming up with new ways to replace signals that are being lost because of the actions of the platforms and the Oss.
Since 2017 and that continues on so.
So the way we look at the environment now is we're incredibly focused on sale replacement due to iOS in Safari.
But in parallel with that we very much look at how we will do the same thing for Android and chrome.
<unk>.
In that way.
We continued to develop a variety of capabilities not just one.
And I want to say in closing on this one they are all anchored to the safe operation of our Partners' first party data.
Whether that's a retail media client who is just beginning to utilize the first party EBITDA or better monetization and audience acquisition and retention.
Whether thats a retailer we work with for years with their first party data to do the same thing all of it comes back to how we help.
Our clients safely operate first party data.
In relation to audience acquisition and retention through those platforms and Thats, an ongoing challenge for us and a huge area of investment and focus.
All of us.
Thanks, guys.
Yes.
The next question is from Mark Kelley of Stifel. Please go ahead.
Great. Thanks, very much and good morning, everyone.
Just a quick one on the guide I guess I'm curious if that bakes in any incremental.
Retail media wins for the full year that you have any visibility to or is that based on.
Current run rate our folks you already have on the retail media side and then second.
When we think about again with the retail media business when you get someone like a Walmart Canada.
What's the gating factor for Walmart to choose you across the board.
Across all geographies any help there would be great. Thank you.
Oh yeah.
So just on the guidance, so first where retail need CRA has not impacted we still on track there and we see.
The 50% growth.
For the year.
It continues to grow fast.
And we expect the <unk> inactivates in India, we have.
100 retailers, we have 16 brands that engage.
We were ranked and thats continuing to grow.
So signing deals with large marketplaces and flagship we say that it's all going as we expect.
Really excited about that part of what we have.
So on the guidance.
It is.
Three around Russia, and the FX impact on the European contracts, which hopefully is that temporary and then for some overall ex all external affected.
In terms of the why.
While Mark Canada, why wouldn't that be a more holistic play vertical we do.
We do it.
We have some exclusive deals across global retailers.
We have many deals that we won a number of players we'd like to think that we're in pole position in many of those retailers.
Some of those as you know Walmart they have their own.
And built solution for the U S.
So we.
Other services four wall model in the U S real estate due primarily the Walmart Canada another.
Hum.
I would say overall inference platform, we've seen seven more heavily to create a more globally.
It really depends on their own strategy for the retailers, but we are the only white labeled for many of the large retailers both in the U S and in Europe .
But we're also of course, the platform base and many of them kind of more.
The next step down as we said, it's a sworn to reset as well so feel really pretty good at our retail EMEA business.
Great. Thank you very much I appreciate it.
The next question is from Doug Anmuth of Jpmorgan. Please go ahead.
Yeah, Hi, this is Katie on for Doug Thanks for taking the question.
If you think about the Russia and Ukraine conflict now we know the direct impact of suspending operations at around 2% of contribution ex Tac.
Any spillover impact of marketers Virgin spend broadly and consumer spending partly due to the conflict.
And then just Relatedly are you seeing any different the impact between marketing solution relative to retail media.
Yeah. So so.
So we you know clearly we did see the impact can we suspended Russia. There was some I would say temporary.
Pausing have kept some campaigns and blocking of some news sites.
Especially straight after the conflict with belted.
However, overall it has not materially impacted.
We will add spend perhaps Europe was relatively flat in Q1.
We're anticipating I guess slower growth versus <unk> growth in Europe , and I think again similar to others, but cautious on the outlook.
So that's that's the way that we have.
<unk> for the future in terms of retail media most of our growth is in the U S. We do have a large client in Europe noted operating we expect M&A continuing to be a huge growth area for us we're onboarding new customers.
Especially in Europe , and so we anticipate those revenues will start to come into retail media over the coming months.
Great. Thanks.
The next question is from Mark.
Dio, which of the benchmark company. Please go ahead.
Thank you just had a couple.
Of the $3 billion annual media spend I was just curious what trajectory you see that sort of moving to the next.
12 24 months.
How important iPad iPhone web series in that trajectory and if you could just provide a perhaps a brief update on IPO that would be helpful. And then on flip cart just curious.
How the economics look there relative to your typical retail media types.
<unk>.
Economics.
In the developed markets like the U S. Thanks.
Oh you did.
Media spend.
Other wins.
Hum.
Sure.
Perfect.
Media spend.
And that's clearly a key performance indicator for us, especially as we focus on how do we serve our customers and their needs and as we look at.
New installations in particular.
Media platform and around audience targeting as well, it's not really a focus on how do we drive that.
Increased traffic.
And how do we attract and retain.
New customers kind of up the funnel.
We are expecting that to be continued.
So I would say double digit growth.
In terms of a contribution ex Tac over the coming year.
And we anticipate continuing to add.
Billion doses, a year I would say in terms of that.
Media spend as we continue to expand this new escalation.
<unk> web has about $1 billion of media spend down through that so we get.
Previously communicated on the level of spend and intense and I think Megan you can dress the other questions.
Yeah, Yeah, sorry.
One of the reasons we.
There are many reasons, we like <unk> weapons because of that media spend that are through their performance.
It's part of the value that we buy some of that business.
Yes.
Yeah.
Towards your opening remarks.
About where we are all upon web can't go much further.
But to say that look we.
We continue to have a strong dialogue and relationship with.
We're aligned on these things are as a business of vision.
We have we feel about our people et cetera.
And what we're encouraged by is that.
<unk> are doing everything that they said they would do in terms of mitigating their exposure.
Expire and Thats and Thats really encouraging.
As an example.
The CEO .
So.
Reorganized in such a way that they can.
Focus on.
Basically relocating their option.
R&D resources out of Russia, the CEO .
And publicly showing his intent to do that and he has stood by his women is executing against.
Against that plan.
Just to give you some numbers in the third.
Of their employees, who were located in Moscone prior to the war have already moved up out of Russia. So that's an enormous effort on their part to most.
People.
They are expecting to move another third of the next few months and the risk by the end of the year and.
Such a such a contract extending by what they say.
<unk>.
So.
Working very closely with them of course, because we have a commensurate.
Our relationship with them, it's not slowing us down in terms of <unk>.
<unk>.
To continue to deploy that comments media platform, but as we have more news to share we definitely will in terms of the build a relationship.
And suppose acquisition.
I guess add on flip chart, obviously really excited about food cost trend by the ask a question we will be launching.
Product performance ads.
With a funnel and measurement capabilities that go with those together with flip cart and thats really going to strengthen flip to off platform offerings. So I think a couple of things to point out there.
One is <unk>.
Exclusive arrangement for this use case.
The comparative economics to retail media adjusted for the market.
Are there.
And three I think that the use of the term from performance is something to hold on to not just now but for the future of the retail media the idea that offsite.
Get a must perform on behalf of a network like flip cards very much on our minds and because it's part of our heritage performance marketing can netting off site performance and on site performance.
Its really baked into this sort of arrangement pushed our strength place to flip cards spring and we're very very excited to develop the capabilities to make on and off site performed.
Fully together.
That's super helpful. Thank you very much.
The next question is from Matthew Thornton of Trust. Please go ahead.
Hey, good morning, Megan Sir and Todd a couple of quick ones for me I guess first on buybacks I know you've.
$8 million in the quarter, given the share price, where it is it seems like there is opportunity and I guess the question is is there opportunity to accelerate that going forward or do we need to kind of wait for a resolution around I upon the web from that tour.
Accelerate I guess, that's the first question second.
Second question is around supply chain, we've talked a lot about currency and we've talked about Russia and broader macro I'm just curious how much impact you have seen or your clients have seen from.
Supply chain is being gummed up the way they are and whether any alleviation there would be helpful to the business this year.
And then just final one around data privacy, Sara I think you talked about <unk> being in line you guided <unk>, which it looks like it's very much in line for the full year are you still expecting that I think the incremental was $55 million. Just curious if that's still what you're expecting for the full year and sorry, if I missed that thanks, everyone.
Okay.
Uh huh.
It's great to chat to them.
In terms of a buyback aggregate a regime that in early March and what we are compliant with M D.
<unk> rules incentive volume that we can do each day.
So as a as a French company and with the pending acquisition, especially around the M&A says that we have limited ability to do I would say significant buyback, we look at our buyback program as well.
Other opportunities, including M&A. So we are doing.
Alero was steady with them our expectation is to continue to drive.
Flat share count end of year over year, and as we see opportunities in particular.
Tension post the proposed acquisition of bipolar.
Continue to look at.
Let's say more than that.
In our case, if you will of drugs I think our capital into the most up valuable areas.
The.
Question on the data privacy.
The impact of that is in line with our expectations and.
In line with guidance, So we had guided to 55 million.
And most of that impact is around.
So 20 million in Q1 as anticipated $20 million in Q2 as anticipated and the key drivers there on iOS and then in Europe .
Those are the two key drivers opex of the tenant fee line.
Okay.
So on this one.
Swift remind where in the advertising business. So we're really about helping our clients signed and convert consumers and may do that.
There are always going to do it they might change their tactics.
They may.
That might change the type of consumer they are looking for depending on the products.
That they have on the shelf for.
The attacks of HAE attacks, they always need in our networks to be able to help them.
Pushed through any supply chain issues that they might have.
But what's important.
So now we have our best client base.
We had may be supply chain issues and one client base.
Not in another.
Sure.
Make sure I think it's important for us it is important for us to make sure that our client base into this for any sort of external issues that are particular sector fund.
And also we are we are.
Because of that.
Audience targeting capability and our push to commerce media and retail media.
We.
We are available to them, which has protected us in other words.
If there's pressure on them.
Low down on brands and advertisers because they want more performance or they want to put them to comments media or whatever it might be might be with that with our upper funnel, where lower funnel and the way. They are all way through the retail <unk> retail chain and.
And out until they can cement across the estimates in it. So we're not seeing a knock on effect from supply chain and obviously, our clients are using us to help them navigate.
One of the environment is that they find themselves in.
The next question is from Tim Nolan of Macquarie. Please go ahead.
Alright, Thanks, we've covered a lot of ground here, but I had one other question which is about.
Supply chain optimization that we're hearing a lot more about these days amongst the sort of call them, the more omnichannel SSP and TSP and given that <unk> plays on both sides. There is businesses representing both sides just wondering if theres any.
Commentary you could have on how the general market trend towards kind of consolidation of the supply chain.
I'm not just talking M&A, but just more.
And trade activities amongst the larger players how that may affect in any way. Thanks.
It's tough to settling this London in Hollywood.
Only one with some thoughts as well.
Yes, I think.
The main theme here is.
One of platform consolidation and it goes back to a comment I made about investments that have already been made.
And actually managing those gracefully towards consolidation, but we've always taken the position that.
Buses more.
In terms of Handoffs between partners, whether it be for data management.
For privacy compliance for performance marketing in general.
The AD tech space is probably over burden a bit.
With applications that can be consolidated but we're respectful that investments have been made and the most important thing.
<unk> helps people operate them together more effectively.
Our clients decide that they want to take.
Occasions capabilities out of their staff.
We're here helps them do that they want to keep them in we're here to help them make the better.
Yes, I think that's.
<unk> and flex.
<unk> on a path that's key to delighting our clients.
But as I said much much earlier on.
The tech tax.
Or the multi stack.
<unk> is a problem for our clients is something that Tom from its media platform is is here to address.
Address.
And just confirm that.
They were wrong.
Good question. Thanks.
You may begin with our on time no concludes our remarks for today.
Everyone for China, and the IR team for any additional questions you have and we wish you all a good day.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.