Q2 2022 Criteo SA Earnings Call
Good morning, and welcome to <unk> second quarter 2022 earnings Conference call.
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I'd now like to turn the conference over to Melanie.
Or Investor Relations. Please go ahead.
Good morning, everyone and welcome to <unk> second quarter 2022 earnings card.
Joining us on the call today, Chief Executive Officer, Megan Clarken, and Chief financial officers correctly Glenn.
Going to share some prepared remarks.
<unk>, our chief product officer will join us for the Q&A session.
As usual you will find our investor presentation on our Investor Relations website, now as well as our prepared remarks and transcript after the court.
Before we get started I would like to remind you that our remarks will include forward looking statements, which reflect criteria's judgment assumptions and then Andrew just army as of today.
Our actual results may differ materially from current expectations based on a number of factors affect some kudos business.
Except as required by law, we do not undertake any obligation to update any forward looking statements discussed today.
For more information please refer to the risk factors discussed in our earnings release as well as our most recent forms 10-K, and 10-Q filed with the SEC.
We also discuss non-GAAP measures FERC preferments definitions and reconciliations to the most directly comparable GAAP metrics are included in our earnings release published today.
Unless otherwise stated all growth comparisons made during this call are against the same period in the prior year.
Let me now hand, it over to Megan.
Thanks Melanie.
Good morning, everyone. Thank you all for joining us today marks an important milestone for our transformation journey as we continue to work towards the realization of our Commerce media platform vision I'm very pleased to announce that we have successfully restructured and completed our acquisition of Iporn web, which we believe will accelerate.
Flame shape, the future of Commerce media on the open Internet.
Over the last few months, we diligently evaluate the impact of the geopolitical environment on iPhone web and reviewed its business continuity plans to ensure the short term and long term stability of its business.
I'm very encouraged that upon Webb has seen minimal disruption to its top line performance, while actively transitioning resources outside of Russia.
Most collaborations during these challenging times shows a strong fit between our companies and reinforces our confidence in what we can accomplish together.
Importantly, we successfully renegotiated the deal to reduce the acquisition price with an earn out for demonstrated performance then we restructured the transaction to exclude <unk> Russian subsidiary.
This is a very exciting time for our company and we are thrilled to welcome Dr. Boris means it can't ski and the iPhone web team security are Dr.
Dr. Bruce joins us as chief architect and work closely with the rest of our leadership team toward a successful integration and will contribute to the product technical and business architecture of <unk> going forward.
Like to remind you how this strategic acquisition is expected to accelerate our performance play putting us further into a market leading position at the intersection of retail media and performance marketing on the open Internet becomes the next wave of digital advertising.
Clearly we are no longer a point solution business like most others in AD Tech.
First iPhone with brings leading capabilities on both the demand and the supply side, So the Ed Tech, which will complement our existing technology.
Specifically, it's flexible self service demand side platform or DSP big core expands our offering into a full funnel DSP important to attract large enterprise marketers and agencies and.
Add to this the supply side platform or its just pay the media grid, which should further expand our premium direct publisher footprint and brings sophisticated capabilities to increase publisher revenue opportunities.
It should also enhance our first party data activation potential a key element, although acceleration away from third party cookies.
Having both the DSP and SSP capabilities and now Commerce media platform offers clients complete transparency and neutrality, knowing that Christianity doesn't own any media or a retail business that can bias all tick alternatives.
Connecting the sell side and the buy side also reduces with workflows and kick tax and increases the totality of the data.
Secondly, the acquisition of icon, which should enhance our scale and the distribution of their commerce media platform, adding security OS reached a further $1 billion in annual Meteor AD spend through big switch its media trading market place the.
The most scale and media spend that we can drive through our pipes the better the outcomes, we can deliver with the network effects of attracting more advertising demand to our platform.
Lastly, I pun Webb has acted as a trusted architected the entire AD tech ecosystem.
The past two decades, and its customization capabilities will be instrumental to address the needs of our growing base of the enterprise and agency clients, who may require a bespoke deployments as they look to in house solutions, using pretty eyes tick excellence and expertise.
This would effectively enable us to power the growing walled gardens concentrated around retail media.
As long standing partners, what's the iPhone when.
We anticipate a seamless integration and we're in lockstep to capitalize on the growth opportunity ahead of us.
As many of you know our industry is anticipating a huge change with the rise of Commerce media, which a Mckinsey study recently indicated could create a paradigm shift in digital advertising not seen since the rise of programmatic.
There is a disproportionate amount of advertising spend going to a large utility platforms of search and social because that's where advertisers know that they can reach consumers, but the reality is 73% of consumers start their shopping journey on the open internet, including retailers digital stores.
Amazon and Walmart have tapped into this creating their own hugely successful digital media properties to attract high margin advertising dollars.
This has paved the way for the wave of retailers that we see following suit and we're right at the heart of this movement, helping them to leverage their first party data and realize its potential.
With a trusted partner for over 150 global retailers, giving us access to unique premium meteor inventory at scale and privileged access to retail a catalog consented identity and commerce data that I I I can use to deliver an unprecedented array of capabilities.
We're only getting started.
The latest clients enter our retail media client base is not a traditional retailer it's in fact deliver room.
Delivery recently announced the launch of its advertising platform powered by <unk>.
Our strong agency relationships Meteor API partners and ability to scale quickly without technology and sales team support were amongst the deciding factors in deliveries deliveries decision to partner with <unk>.
Complementing our present, an omnichannel retailer and marketplaces.
This entry into delivery service is an exciting milestone reinforcing the significant opportunities that lie ahead.
It also highlights how operating both demand and supply side situation solutions at scale creates powerful network effects and allows us to win.
Yes.
What we do in Commerce Meteor is not just about retailers entering the media mix, it's about all existing media companies, becoming even stronger and their ability to value their commerce audiences using their own first party data.
A critical part of our strategy is to deliver the best commerce audiences at scale across various channels and innovative format, including social and video.
We continue to expand our direct integrations with media owners to reach consumers, where they are spending their time and we are pleased to have added about 15, new premium publishers since the beginning of the year.
This includes new relationships with Disney <unk>.
Zip codes.
And experimental campaigns on tick tock as.
As we expand our reach with new opportunities in social we are working closely with meta to be restored as a preferred partner.
This will enable us to utilize our own buying optimization technologies and our own data to buy AD inventory on Facebook and Instagram platforms globally.
As part of our direct supply strategy, we continued to strengthen our access to first party data. The most recent example is our work with a large publisher for re targeting which has enabled us to drive a meaningful yield increase for them with first party data, while increasing market is speed.
And in environments, where third party signals a block like Safari.
We will continue to test and other browsers environments, including crime.
This work is groundbreaking and has the potential to profoundly shape privacy first advertising and commerce Omni open Internet. This is part of that acceleration away from third party cookies.
Overall, we remain full fronts of any industry wide initiative that aims to improve consumer privacy as it relates to commerce. Following googles announcement of a further delay of third party cookie deprecation to the second half of 2024.
We will continue to partner with Google and the wider industry to test and build privacy safe solutions that promise to support a fair and open internet.
Also I'd like to convey our optimism about the future of the open Internet. Following the recent adoption of the digital market Act by the European Parliament, which is expected to restore a level playing field in the digital economy.
Turning now to our second quarter performance and current market dynamics.
Despite the challenges in the macroeconomic environment, we are delivering on our plans and remain focused on the long term.
And the second quarter, we delivered constant currency growth of 7%.
Our six consecutive quarter of contribution ex Tac growth.
This was primarily driven by the continued growth of retail media and audience targeting solution as well as solid performance and re targeting Sarah will provide additional details in a moment.
And retail media, we continue to experience strong momentum with our retailer clients expanding the scope of our partnerships to use the full breadth of our commerce media platform capabilities like targeting and re targeting to enable retailers to acquire and retain customers.
Among others, we launched new formats for fresh directing tough for.
New inventory with target and Walgreens, and Offsite campaigns, with Bestbuy, and Sam's club, Mexico to complement existing onsite opportunities.
Business momentum remains strong with the launch of Bloomingdale's and the addition of Lowes, Canada and deliver rune imports.
Importantly, we're expanding our scale with our agency partners, including group pen and with added nearly 200 new brands in Q2.
Our API partner program continues to expand without EMEA rollout.
And the addition of channel advisors as an API partner in the U S.
And marketing solutions, we continued to benefit from the travel recovery and traction and Upselling and cross selling of existing clients.
Lastly, even in a softer demand environment re targeting is showing resilience as clients rely on our solutions to retain customers and convert to sales.
Now I'd like to take a moment to address the uncertain macroeconomic outlook and what that means for our business.
We're closely monitoring commerce trends to help our clients understand how consumer demand demand is involved is evolving.
Universal catalog provides a unified view of full billion product Skus at cross 3500 product categories for about 22000 and <unk> clients.
Allowing us to quickly identify opportunities to actively pursue advertising budgets and categories that are experiencing high consumer demand across our client base. For example, in retail which is our largest vertical 22% of product categories, including Trevor.
All items personal care or food and beverages saw double digit year over year growth in Q2.
This offset slower demand for categories, such as home improvement goods.
The macro headwinds are clearly impacting our clients and the budgets, they're able to spend with us which Sarah will comment on shortly.
Spite these headwinds we continue they continue to look to us to deliver performance outcomes in the form of product sales for retailers brands and marketers and advertising revenues for media owners.
Our survey from essential showed that 70% of marketing professionals expect brand advertising budget cuts when responding to a potential recession scenario.
While performance advertising is expecting to hold better.
With our flexible platform market is can also pivot to the solutions that they need to acquire and retain customers and reach the audiences that matter. The most to them at any time this sort of flexibility is critical during uncertain times.
We also expect retail media to continue to grow.
Our brands ultimate goal of standing out in a digital shelf is to drive more product sales and nearly 70% of advertisers.
Enhanced returns from that retail media AD spend compared with returns from other channels. According to Mckinsey.
In a challenging economic environment benefiting from our new high margin revenue stream will be a key advantage for retailers monetizing their digital AD spend on our platform.
We've never been better is better positioned to help our clients navigate a challenging macro backdrop backdrop.
We're highly energized by the progress we continue to make on our transformation journey and execution of our growth strategy. The closing the <unk> acquisition.
Pos to our store partnership with Mercer the progress towards third party Cookie independence and the continued expansion of our Commerce media platform are important building blocks for long term sustainable growth.
I'd like to thank all of our <unk> for their hard work innovation and unwavering commitment to our vision.
Our people our greatest asset.
And our diversity equity and inclusion efforts have been instrumental in our ability to attract and retain the best talent in the industry.
We recently held our first global company events since I joined <unk> and saw exceptional engagement from our team.
I'm delighted that we continue to be widely recognized with Linkedin ranking us fourth on their list of 2022 top companies and marketing and advertising in the U S. We were also recently named as one of the top 50, inspiring workplaces in North America.
And and Reagan's CSR and diversity awards for our global D E and I commitment as well as out ESG engagement and Communications report.
With that I'll now turn it over to Sarah who will take you through our Q2 performance and financial outlook Sara.
Thank you Megan and good morning, everyone.
Starting with our financial highlights for Q2 2022.
Revenue was $495 million and contribution ex Tac was $215 million reported contribution ex Tac reflects the weakening of the euro and yen against the U S dollar, resulting in a year over year $21 million unfavorable forex impact.
Correct.
At constant currency Q2 contribution ex Tac grew 7% on top of a tough comp with 18% growth in Q2 2021.
Our growth was driven by retail media up 42% and audience targeting up 33% as positive markets marketing solutions up 2%.
We continue to shift our topline makes with retail media and audience palm team, representing 33% of contribution ex Tac in our second quarter up from 29% in Q1 and up from 25% a year ago.
Client retention remained high at close to 90%.
Turning to our business segments in retail media revenue was $55 million and contribution ex Tac was up 42% at constant currency to $37 million.
Growth was primarily driven by our U S customer base and continued traction in CTG, our largest and fastest growing vertical.
Our partnerships with agencies, including Gray Penn are pacing well and we.
We on boarded 200, new brands in Q2.
As a reminder, we also lapped the acquisition of my bias, which we completed in May of last year to expand our retail media solutions for online marketplaces.
In marketing solutions revenue was $440 million in contribution ex Tac was up 2% at constant currency to $178 million with solid growth in audience targeting partially offset by lower re targeting.
The 3% decline, we targeting reflects the suspension of our Russia operations and the 16 million dollar impact from the muscle signals, including iOS.
Our underlying growth, we targeting was primarily driven by growth in travel solid performance in EMEA basically led by Germany emerging market and a rebound in the U K.
And Ah grabbing shopify partnership while still early days.
This was partially offset by softer trends in France emphasis in large strategic clients in the U S.
Yeah.
Overall, our value proposition is increasingly resonating with clients with 33% of our live clients using more than one cardio product today compared to 28% a year ago.
For example, our European clothing retailer.
Previously only used to be targeting increased their overall spend with Christianity by over 90% in the second quarter, leveraging a broader audience targeting to achieve its customer acquisition and retention objectives.
We expect this trend to continue as more clients transition to always on audience strategies to acquire and retain customers.
We delivered an adjusted EBITDA of $50 million in Q2 2022.
As expected non-GAAP operating expenses increased 13%, including marketing events like Cannes Lions, and a long planned in person company wide event.
These investments were highly valuable showcasing our strategy and capabilities for our clients and without Chris Yes.
We also invested in sales R&D and product talent.
Moving down the P&L depreciation and amortization decreased 10% in Q2, 2022 and share based compensation increased 3%.
Income from operations was $9 million and our net income was $18 million in Q2 2022.
Our annual effective tax rate was 32%.
Our weighted average diluted share count was $62 3 million compared to $64 7 million last year due to our share buyback program.
This resulted in diluted EPS of 27 and.
And adjusted diluted EPS of <unk> 58.
In Q2 2022.
We are thrilled to welcome iPhone webs to Chris Yeah.
IPhone web delivered about $100 million in net revenue in 2021.
Year to date in 2022, they have had minimal disruption to that top line performance and continue to grow topline as planned.
We expect the iPhone web will contribute annualized low to mid double digit EBITDA and generate free cash flow.
We have incorporated the expected contribution from iPhone web in our Q3 and full year 2022 guidance by.
Okay.
We have a strong financial position with solid cash generation and no long term debt, including over $917 million in total liquidity at the end of June .
Ample financial flexibility to execute on our growth and capital allocation strategy.
The acquisition of iPhone web.
We are pleased to assign to mandate lesser in term sheet subject to customary conditions for an expanded 407 million euros five year revolving credit facility, which should be formally in place by the end of September replacing our existing 290.
4 million Euro.
Cincinnati.
This underscores the confidence of our banking partners and a pristine balance sheet and growth outlook.
We remain shareholder focused in our capital allocation with the primary goal of investing in profitable growth through both organic investment and value enhancing acquisition. While also returning capital to shareholders via our share buyback program.
During the first half of 2022, we repurchased over one 1 million shares at an average cost of $26 $2 per share.
With $151 million left on our share buyback authorization and more flexibility following the completion of our icon web acquisition, we intend to resume the execution of our buyback program now that we have announced Q2 earnings.
Turning to our financial outlook, which reflects our expectations as of today August 3rd.
Like many other companies we are cautious about our outlook for the remainder of the year given the uncertain macro backdrop and considering the recent announcements from certain largely titles and economist views on the outlook for Europe for.
For 2022, we have updated our guidance and now anticipate constant currency growth of 11% to 14% in country inflation ex Tac.
This comprises organic growth of approximately 6% to 8% and inorganic growth to my phone web contributing approximately 5% to 6%.
Organically, we now expect contribution ex Tac growth.
Approximately 45% for retail media.
Taking into account softer online traffic, despite more inventory and strong bookings.
And contribution ex Tac growth of approximately 30% to 35% for audience targeting.
Our 2022, adjusted EBITA margin with iPhone web is expected to be approximately 30% to 31%.
Okay.
As diligent growth investments show, our confidence in <unk> long term strategy.
We have made progress on our investments in key growth areas. So far this year and anticipate continuing to invest in high priority areas that support our growth.
Clearly given the market environment and as we integrate icon web we are moderating spend over the coming months.
Given the further.
Weakening of the Euro and yen against the U S. Dollar, we now estimate the impact of Forex to lower contribution ex Tac by $60 million or six percentage points compared to our previous forecast of $34 million.
Approximately 30% of our contribution ex Tac is exposed to euro on approximately 10% of our contribution ex Tac is exposed to the Japanese yen.
There is no change to our capital expenditures and we continue to expect free cash flow conversion of about 45% of adjusted EBITDA.
Yeah.
For Q3, 2022, and we have a cautious outlook given the impact of the slower macro environment on our clients and the budgets they are able to spend with us.
We expect Q3 contribution ex Tac of $223 million to $229 million growing by 12% to 15% in constant currency.
This includes inorganic growth for my poem web or close on August <unk>.
Contributing approximately 8% to 9% growth.
Our organic growth is expected to be approximately 46%.
We assume a forex impact of approximately $13 million and approximately $10 million plus signal loss.
As that part of the expected Q2 impact shifted to Q3.
We expect adjusted EBITDA of $48 million to $53 million.
Yeah.
Despite a challenging macro environment, we have a booth broad and diversified client base and differentiated assets that give us confidence in our ability to deliver solid growth healthy profitability and solid cash generation again this year.
Looking ahead, we believe that our strategic acquisition of icon web will accelerate our strategy of creating the world's leading commerce media platform to drive long term sustainable growth and shareholder value.
Our iPhone web acquisition combined with our growth investments and new business wins and recent partnerships assessing a strong foundation for growth in 2023.
Finally, please save the date for our upcoming Investor day that will be held in New York City on September 26.
You'll get a chance to hear from our leadership team experienced Sarcomas media platform and we plan on providing an update on our mid to long term financial outlook.
We hope to meet with many of you in person.
We will webcast the webcast the event live.
With that I'll turn it over to the operator to begin the Q&A session.
Thank you.
Sure.
All of them are ones.
A reversal from the queue. Please press Star then.
Today's first question comes from Richard Kramer Research. Please go ahead.
Thank you very much.
Hey, folks my first question Megan can you give us a little.
Taste or fore sight of what you think the outcome of your discussions with meta might be it strikes me that you would be able to tap into a very large pool of potential additional inventory for targeting Windsor business is clearly under pressure right. Now. So can you talk through the stages of that and how that might progress and then.
I guess equally with high pawn web coming onboard youre going to get a lot more SSP capacity in and publishers onboard.
Can you talk about the longer term opportunity to improve margins as you sort of build out the end to end or full stack offering.
And could this over time, given iPhone webs ability too.
Due to the contract programming, you mentioned reduce or curtail it was overall R&D to sales Burton. Thanks.
Yeah, Hi, Richard good to good to here, let me take the first one and as you know towards with US in the room. So in terms of sort of a longer term product SSP SSP.
Capability I'll pass it across to him.
And he may be able to finish my sentence of my sentences of matter as well on the meta from you know it's been a long time since we've been out of that platform and so it's exciting to us to now be to be able to to rejoin with matter I guess as partners.
To be able to offer all services across across their their assets than stages. Here, though are we we have to re implement the tech that we have had there in the past, which already exists, but we have to renew their relationship with the tech focus on their sides we need.
To desktops that tech and we need to see whether or not there's anything else that we can add to that.
And that's going to take us a little bit of times hard to say exactly how long that's going to be but its city not sort of heavy lifting in terms of T shirt size, it's just being able to get them there, but its early days and so establishing the relationships and the right people and then doing the scoping work is is instead of immediately ahead of us.
<unk>.
And again, we don't you know again, it's been a while since we've been on that environment. So the size of the opportunity will unfold, it's not for us at this stage at this early stage to make predictions around that but certainly as we get on that and we see the uptake curves of their assets as of <unk>.
Fly source to us.
And what that return brings to I guess them and us will be able to give you a little bit more color and to the actual size of that opportunity.
So when I talk about the SSP.
Definitely.
Good to hear from you Richard So just.
Just to finish on the Facebook.
A question pardon me the medic question.
It is.
A global partnership.
We're looking to restart just to give you a sense of scale.
Which would sensibly bring us.
Community targeting across the 2 billion Facebook users in the 600 million Instagram users.
The way that Megan described I know that Facebook would like to do a lot more with us.
In terms of of how we might use the relationship.
To reach their audiences to bring commerce experiences into Facebook.
So the upside.
Could go from a product perspective quite beyond what we were doing before but as Megan mentioned, we're just getting into the nitty gritty details of restarting that relationship with a focus on what we've done successfully before while exploring those bigger opportunities.
Just a little bit to add to matter on the on the SSP thing I think.
You know as well as anyone may be on the call but.
That the media grid.
SSP was very central to our investment thesis.
And getting together with iPhone web and we are certainly going to take advantage of cross selling opportunities around.
Around media greater going forward and combining the opportunities we have with our direct bidding partners into that.
<unk>. So it's a it's a way for us to take what we have that's established on both sides of the company.
I should say both.
Both now one company, but both sides of the teams the teams pull them together and begin selling pretty early on here.
And again just.
We're right at closing here, so we will get busy with that so that the next call, we'll have something material to discuss.
Okay. Thanks.
You bet.
Our next question today comes from Sarah Simon of Bromberg. Please go ahead.
I'm not trying to read my notes.
So a question festival was on similar audiences I think he referred to it at some point in the prepared remarks.
You were talking about testing and crane.
If I'm not wrong, but I wonder if you could have a bit of an update on the testing you've seen there.
More and then as far as the delay to Cookie deprecation is concerned.
Do you I mean.
Are you seeing them marketers and other partners slowed down the shift away from cookies, given the delay to the timetable or do you think people have now kind of.
Hit the ground running and and now it's it's just we're going to do this.
Instead of who cares about the timeline thanks.
Scott and I can okay, Alright, hi, Sarah.
Just to address your question, specifically about testing with Google.
We are able to test were testing three ways right now.
The attribution API the topics API, which is running across all of our advertisers and publishers. So we're collecting a lot of topics.
Through that end, and obviously fledged which is.
Is most interesting to us at least from a core business perspective.
Because it's re targeting oriented what I would say is.
While we can do testing end to end the volumes of those tests are still relatively low.
As Google opens up more opportunities for us to get to chrome populations. Then obviously, we can expand and move from there.
On top of that.
You mentioned similar audiences. So obviously, we're doing a tremendous amount of testing on similar audiences in non chrome environments, we talked about iOS testing and hundreds of those being complete on the last call.
Showing very positive results. So it's important to note that whether its the privacy sandbox with chrome or existing.
Solutions for for building cohorts that those are just a couple of approaches that we're taking to address our cookie deprecation.
And that will continue with our strategy unchanged. Despite the fact that Google has given the ecosystem more time and us as a partner to work with them to see whether the privacy sandbox solutions will work for consumer privacy and also add to the business value of marketers and publishers that we serve.
<unk>.
So we don't see any slowdowns. The final part of your question I think that the exposure people have had.
The ecosystem to iOS has been enough.
To have everyone at attention.
And moving forward. So we're I would say, we're less worried about slowdown than maybe we would've been in the past.
Yeah, Sara it's Megan I think it's important to note that.
The use of cookies is so saturated through our client base. They use it for all sorts of things and so it's very difficult for for us to have them stopped doing it unless we can show them either a drop dead date, when they can't use it anymore or a reason to move.
And while Google continues to move the date that first part the drop dead date is instead of out of outreach, but the tests that we're doing is part of the strategy of the tests that we're doing is to actually show them the results of <unk>.
Using the different formats of different tactics that we have to find audiences on environments that today don't have signals with IR blind and as we move them across to use these tactics for those environments. They may get some taste than they get some experience in exactly what we can do.
Once Google does actually flipped the switch so part of our plan to accelerate away from.
Any kind of reliance for our clients on third party cookies across chrome.
Thanks, a lot.
Thank you Sir.
Question today comes from Matt Thornton.
Please go ahead.
Hey, good morning, everyone, maybe maybe two if I could just coming back to meta.
Can you give us the puts and takes of what's changed since since you were last buying on that platform. I mean, obviously their user base has gotten a lot larger but I just can't recall I think the prior agreement you were you were once global I think you were buying on Facebook as well as Instagram, but I guess are there any other puts and takes now versus maybe what the opportunity was.
Back in 2018 and man before and then just second question maybe for Sarah on the buybacks I can you remind us I know you've I think you said $151 million remaining in your authorization cannot increase post the acquisition of of eye. Upon web M. I'm trying to recall kind of what the dynamics could could be there any any color would be great. Thanks, everyone.
Yeah.
Let me take the how are you doing Matt let me quickly address the magic question.
What has changed.
Outside of of user numbers on on Facebook side or on the <unk>.
Instagram side is is <unk> has changed cardio.
Was doing mostly user targeting and optimizing our bidding.
444 user based interactions in the in the past chapter of our relationship and of course, we look forward to doing.
That where we're joining marketer first party data with with with met a first party data as this opens back up what's different about <unk> is that we are now a full funnel solution for marketers in such a way that us being able to take acquisition capabilities in matter and <unk>.
Utilize them as part of our partnership is an important consideration of the upside so when you have.
Some 3 billion people to work with the idea of being able to do much better acquisition customer acquisition. In addition to all of the retention that we've been doing in the past is very appealing and let me give you two examples to be specific Facebook offers collaborative audiences.
And also a feature I've worked with in the past called value based look alikes, it's very similar to our own web similar audiences. Those are two places that were looking to validate in in our partnership as quickly as we can to add too.
Any kind of of.
Our retention tactics, we would do in Facebook using them as a partner so that look for the partnership to expand if were able to do so to meet our new strategy.
And just to add onto.
The share buyback. So yes, we have a current authorization remaining of $151 million.
And given that we've now closed I upon web that gives us a lot more capacity to be able to buy back we actually had stopped buying back just prior to the AGM in June so we anticipate restarting and doing that in the the typical I would say balanced approach between now and.
Towards the end of the year.
And that will be a program and then as and when we see that it makes sense for us to increase that <unk> that would be a board of director authorization, we would be seeking.
Thank you next question today comes from Mark Kelley of Stifel. Please go ahead.
Great. Thank you very much good morning, everyone I'm, sorry, I'm, sorry to make you repeat yourself, but.
The iPhone web.
Contribution ex Tac number it looks like.
On your guidance, it's like $120 million annualized run rate.
Can you remind me remind us the growth rate again.
Put up last year I think it was in the low 20%. So I just want to make sure that.
Right It was yeah.
It was 20% in 2021 so and yes, it was 20% in 'twenty one.
Okay perfect. Thank you.
And then my second question is this.
Probably splitting hairs, but.
Looks like you're potentially seeing slightly less of an impact from Apple and the privacy changes.
You kind of wrap the range around the incremental headwinds now.
Again splitting hairs, but maybe could you talk about because they're getting a little bit better or is it kind of in line with what you were expecting that'd be great. Thank you.
Yeah. So we had anticipated overall privacy headwinds to be around $20 million and our experience was around $16 million and most of that was I O S.
And so so the privacy headwinds as a total for the year is still within the same range. There are some new privacy restrictions that have come in so that's what we're expecting more for the Q3 Q4 timeframe.
Okay perfect. Thank you very much.
And our next question today comes from Doug Anmuth with Jpmorgan. Please go ahead.
Yeah, Hi, this is Katie on for Doug. Thanks for taking the questions Q just wanted to ask a little bit more about the retail media business.
You, obviously had a president omni channel and marketplaces. So could you just talk a little bit more about opportunities with other marketplaces or less traditional platform on the back of the deliberate deal.
And then secondly, just on the macro backdrop.
Is there anything you can share on advertiser behavior and macro trends through the course of QQ.
All versus June and now into July .
And then just as we look ahead you'd previously talked about ambition to accelerate growth next year.
How are you thinking about that now given the volatile macro backdrop.
Hi, there I'll take I'll take the beginning piece here in terms of retail media for other types of.
Client base I think last time, you talked about flip cart.
And flip cart is actually pretty exciting for us we've had our first campaigns launched them flipped cuts since we spoke last.
We've lit up prototype, let up I guess with us something called a it's actually a product product performance ads, which.
<unk> helps them to offer our services to.
They call them merchants or whatever they call them on flipped cat. So it truly is a marketplace, where we're helping them with their full funnel.
Site capability.
And then now to add to it deliver ru and of course, we have a good relationship with Shopify and we'll continue to look for affinity says more and more marketplace providers or other.
Our clients are.
Opportunities for us like delivery I'll come onto the same <unk>.
Our ability on the retail media front to expand out the products that we offer there.
As we go into.
More capabilities around <unk>.
Sponsored ads offsite extending out our ability to target audiences and retarget audiences through acquisition and retention of audiences.
All of the pieces that we're building on top of our retail media platform and now bringing in the capabilities of iPhone Web just continued to expand what we can do with.
With clients in retail media, we anticipate that all bring all sorts of clients that aren't traditional retailers to us as they look to expand their potential into into media and being able to offer advertising on their platform. So it's an exciting.
Proposition for us and one that I know I've got the team sort of laser focused on looking for other clients or potential clients that looked like clients that we have so that we can service the broader industry and bring what we do to.
More clients that are out there.
Sorry, do you want to talk macro.
However, the macro yeah.
We are seeing and I think everyone is experiencing a slight worsening month on month.
And if we think back even six weeks ago that was much less discussion of recession.
Let's talk about large customers.
Issuing some profit warnings, we're seeing some impact of strategic large customers pulling back on spend as well as in our core business as well as some smaller customers.
Spending slightly less dollars than they would have done in the past and I would say July it was slightly worse than June and June was slightly worse in may on we're not seeing.
Landslide downwards, hence why we still have great.
Q4 for Q3, and the rest of the year.
Certainly more difficult today to get to the budgets and more requests and as you would expect for performance, which is good for us.
As well as a focus on converting to sales so all in all yes.
We're focused on this we talked to our clients all the time, we feel we're in a very good position.
<unk> economy, as well as in a softer economy to deliver for our customers.
But bottom line there is clearly less dollars overall and that.
Impacts us as well as everybody else.
Okay.
Great. Thanks.
And once again, ladies and gentlemen, let's start with one of your question. Our next question comes from Tim Nolan at Macquarie.
Macquarie. Please go ahead.
Hi, everyone. Thanks for taking my question.
I'd like to follow up on the topic of brand versus performance marketing and if you could maybe elaborate a bit please on sort of where courteous position now versus the old cardio, which may have been more performance specifically targeting maybe just help fill in the blanks a bit on on what Youre doing now with the with the upper funnel work.
Brings in more brand advertisers and what sort of budgets. These come from on the advertiser side, just sort of how does this play out if we go into a deeper dive.
Yeah.
Nice to hear from you Tim.
Look weird Mcknight mistake.
Expertise and our legacy legacy is the wrong way, but our heritage is in performance I mean, we we see.
A $40 billion in annual comments outcomes run through our pipes.
That's a very big number and that's clearly.
Clearly a number of that.
We're very proud of and particularly during this time because during this time.
It is all about performance. It is all about doing two things customer acquisition, which is our targeting capability.
Which can be anywhere in the funnel and top of the funnel and the brand space.
Or middle of the funnel and retention the bottom of the funnel and making sure that those customers can come back again for our clients.
As we as we.
Stand out the notion here is that.
Whereabout offering a closed loop capability measurement capability for our clients. So that if you imagine a retailer has an offline store has a digital store has a sponsored ads in a digital store has display ads and a digital store and then wants to go.
Outside to extend their reach out to the open internet to both acquire new consumers or retain you consume minutes I remind them that they came to the store last week and all of this be run through a single platform with a DSP and SSP capabilities to manage it.
And offer a closed loop measurement.
That is that is what the comments media platform is all about and we are so we're there we're offering that FERC clients today in that south extension that's out.
That's our strategy and that's where I upon web continues to help us we do all this by the way and I said it earlier on in my remarks, and I in a transparent way and a non competing why we don't.
We're not a media company, we don't own media when other retail or we don't own a retail store.
We're not an agency and so all of this is what exactly is exactly what we're going after.
If I bring that back to this economy having.
Having clients that are trying to make it in this economy, who want to pivot who want flexibility to go to performance from brand from brand advertising to performance all back again the platform enables them to do that so the acquisition of full stack DSP platform.
<unk> that we're building out and enables them to quickly pivot from one to the other to offer flexibility. So you've just you've just kind of nailed it and with that question. Thank you. That's that's what we're here to do.
Thanks, a lot.
Ladies and gentlemen, this concludes the question and answer session.
I'll turn the conference back over to Melanie Umbro for any closing remarks.
Thank you Meghan <unk>. This now concludes our call for today, thanks, everyone for joining the IR team innovative it for any additional request we wish you a great day.
Thank you.
Thank you.
Thank you for attending today's presentation. You may now disconnect your lines and have a wonderful day.
Sure.