Q3 2022 Criteo SA Earnings Call
And then I need it on me as of today.
Our actual results may differ materially from current expectations based on a number of factors epic King 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'll also discuss non-GAAP measures of our performance definitions and reconciliations to the most directly comparable GAAP metrics are included in our earnings release published today.
Finally.
Unless otherwise stated all growth comparisons made during this quarter are against the same period in the prior year.
With that let me now hand, it over to Megan.
Thanks, Melanie and good morning, everyone. Thank you all for joining US today, we're intentionally keeping today's prepared remarks relatively brief as we look forward to sharing more with you at our upcoming Investor day on Monday, We also look forward to meeting with many of you in person over the coming weeks.
Our Investor day will be the opportunity for us to discuss the substantial progress we've made on our transformation journey to reposition <unk> as a pure play REIT from a pure play re targeting business to a platform play focused on commerce media.
Platform that has self service and not reliant on third party signals.
We'll show you how our clients media platform is coming to life, how we plan to unlock its growth potential without integrated go to market strategy and why we believe that win in retail media and more broadly in Communist media.
We will also discuss our midterm financial outlook and our plans to drive profitable growth and long term shareholder value.
Turning to our third quarter highlights.
We reached several important milestones this quarter, including the closing of our <unk> acquisition and the soft launch of Commerce, Max our self service and first of its kind.
<unk> side platform or DSP.
Starting with <unk> with.
It's only been three months since we closed the strategic acquisition and we're pleased with the progress of our integration and <unk> business performance.
Our teams are coming together.
And with very energized by the unique opportunities to which to shape the future of commerce media together.
<unk> enhances our scale and brings our complementary capabilities on both the demand and the supply side to accelerate the execution of our commerce media platform strategy.
The recent launch of comment this Max demonstrates the progress of our integration.
From this mix combines the power of our retail media picked an iPhone <unk> DSP capabilities.
Almost mix in power as brands and agencies.
On valuable commerce audiences on retailer website.
And activate onsite sponsored and display ads.
It extends to commerce audiences that exist off site across the open internet leveraging multiple channels, including video and CTV.
Our comments Max DSP also provides closed loop measurement capabilities.
Marketers understand what performs why and how.
In near real time.
Our value proposition is unique and our clients, including some of the largest brands agencies and retailers worldwide have been enthusiastic about what we're bringing to market.
We expect <unk> to be instrumental in the growth of Offsite for retail media in future years.
Moving to our third quarter performance, we delivered constant currency contribution ex Tac growth of.
A 14%.
In line with our expectations.
And retail media.
Highly differentiated technology.
And superior offering continue to drive that momentum with existing and new clients, we have a solid pipeline.
In head to head testing.
Retailers are shifting from competitors to Chris here.
We recently announced a three year exclusive partnership with media Markt Saturn.
Europe's leading consumer electronic retailer across 13 countries.
We won after delivering the best performance in a competitive RFP.
In the Americas, we signed new deals with large retailers, including giant Eagle and Metro Canada.
And we're seeing traction in Upselling retail media offsite and display with existing clients.
We also expanded our retail media footprint in APAC with the addition of ice style Ed.
At school, Japan, and chemist warehouse Australia.
In addition, we on boarded close to 100 brands this quarter.
In a tough macro environment.
Brands want to get as close to the point of sale as they possibly can and Theres nothing close up in advertising on a retailer's site.
And marketing solutions, we experienced mixed trends with more moderate or more targeted spending from several clients across regions.
In this environment, we benefit from a diversified client base.
As we approach the holiday season, our clients are facing challenges related to high inflation and macroeconomic uncertainties.
While we experienced an early start to the holiday season last year.
We're seeing several marketers and brands slowed down their spend.
Despite this they continue to prioritize performance and rely on our solutions to drive sales and return on AD spend.
A terrific example of this is what we had recently is that we've recently joined the Shopify plus certified Ed program.
Which simplifies.
And automates shopify merchants ability to leverage our acquisition and retention solutions.
While still early days, we saw a 30% increase.
And the number of new Shopify mentions using <unk> this quarter.
Turning to the number of merchants, we added in the second quarter.
These merchants come to us for performance as a typically benefit from three times more traffic and five times more sales when using our solutions.
Lastly, we're excited to explore new ways to extend our commerce value proposition to social platforms. We're now actually testing new use cases for brands market as some retailers, who would like to access Mrs AD inventory on Facebook and Instagram globally.
Look forward to sharing more in the coming months.
As we enter the fourth quarter and prepare.
Prepare for 2023.
We remain laser focused on execution to capitalize on the significant opportunities ahead of us.
And we remain committed to cost discipline.
We believe that we have laid the groundwork for long term sustainable growth.
We are pleased to see that our vision resonates with the industry at large.
I also want to express my sincere gratitude to all <unk> globally, including those who joined us from iPhone with for their tremendous commitment.
And hard work to deliver exceptional service to our clients.
And realize our vision with that I'll now turn the call over to Sarah who will provide more details on our financial results and our outlook.
Thank you Megan and good morning, everyone.
Starting with our financial highlights for Q3 2022.
Revenue was $447 million and contribution ex Tac with $213 million.
Reported contribution ex Tac Cigna.
Significant financial exchange headwinds.
The weakening of currencies against the U S. Dollar resulted in a year over year 28 million unfavorable.
Unfavorable forex impact.
At constant currency Q3 contribution ex Tac grew 14% on top of a tough comp with 14% growth in Q3 2021.
This includes organic growth of 5% and growth from iPhone web of 9%.
Our organic growth was driven by retail media up 32% and commerce audiences, which we previously referred to as audience targeting up 29% as part of marketing solution.
1%.
The growth of retail media and commerce audiences combined with the addition of iPhone web accelerated the shift of our topline mix with none re targeting solutions, representing 41% of contribution ex Tac now third quarter up from 33%.
In Q2 and up from 28% a year ago.
Client retention remains high at close to 90%.
Turning to our business segments in retail media revenue was $41 million and contribution ex Tac grew 32% at constant currency to $37 million.
As a reminder, we had 65% growth in Q3 last year, including I'm, a buyer acquisition for online marketplaces.
Our growth this quarter was primarily driven by our U S client base and CPG, our largest and fastest growing verticals.
This was partially offset by lower online traffic from search and retailer sites and softness in France.
Growth from existing clients remained strong with same retailer contribution ex Tac retention at 133%.
We are excited about our new retail wins, which we expect to fuel our growth in 2023 and beyond.
The marketing solutions revenue was $387 million and contribution ex Tac was up 1% at constant currency to 180, sorry $158 million.
With growth in commerce audiences, partially offset by lower re targeting.
We are targeting was down 5% year over year or up 4% when excluding the impact of the suspension of our Russia operations earlier, this year and the impact from the loss of signals.
This quarter, we saw a $14 million signal loss impact, including iOS as expected and a faster than expected rollout of explicit consent in Europe .
Underlying growth in retail team was primarily driven by continued momentum in travel including client went back.
Solid performance in Asia Pac in most markets in EMEA.
Partially offset by softer trends in France and for certain large large clients in the U S.
Overall, our full funnel value proposition allows us to capture incremental budget with an increasing number of clients transitioning to always on audience strategies.
Wyatt and retain customers.
33% of our life clients use more than one <unk> product today compared to 29% a year ago.
We expect to continue to benefit from more Upselling and cross selling activities with our integrated go to market strategy.
Lastly, <unk> delivered mid teens growth for its two months of contribution this quarter in line with our Q3 guidance.
We delivered an adjusted EBITDA of $50 million in Q3 2022.
As expected non-GAAP operating expenses increased 15%, including investments in sales R&D and product talent.
Moving down the P&L depreciation and amortization decreased 14% in Q3, 2022 and share based compensation expense increased 59%.
Our income from operations was $4 million.
Our net income was $7 million in Q3 2022.
As you recall last quarter, we accrued 60 million euros as the provision for loss contingency related to the Canaille regulatory matter.
We are now in the process of submitting our response.
This is an accrual will be reviewed each quarter as we move through the administrative process.
We anticipate resolution of this matter in 2023.
Our weighted average diluted share count was $63 2 million.
This resulted in diluted earnings per share of 10.
And adjusted diluted EPS of <unk> 53 in Q3 2022.
In a difficult macro environment, we benefit from a strong financial position with solid cash generation and no long term debt, including about $744 million in total liquidity.
As at the end of September .
And financial flexibility to execute on our growth and capital allocation strategy. Following the acquisition of iPhone web.
We entered into a new and expanded five year revolving credit facility of 407 million euros in September which replaces our former 294 million euros facility.
This underscores the confidence about global banking partners in our balance sheet and our business outlook.
The primary goal of our capital allocation is to invest in high ROI organic investment and value enhancing acquisitions and to return capital to shareholders via our share buyback program.
Since the beginning of 2022, we have repurchased two 2 million shares at an average cost of $26 70.
Michelle we have accelerated our share repurchases since the completion of our iPhone Webb acquisitions.
And have $121 million left on our share buyback authorization.
Turning to our financial outlook, which reflects our expectation as of today October 28.
We remain prudent given the persistent uncertainties in the macro environment for.
For 2022, we now expect contribution ex Tac to range between 10% to 11% at constant currency.
This comprises the organic growth of approximately 5% and inorganic growth from iPhone web contributing approximately 5% to 6%.
Organically, we now expect contribution ex Tac growth of approximately 35% for retail media given softer online traffic lower brand spend and a slower integration of some of our newly signed retailers and.
And contribution ex Tac growth of approximately 20% to 25% for commerce audiences.
We now expect our 2022 adjusted EBITDA margin to be approximately 28% to 29%.
<unk> the lower contribution ex Tac in Q4, which is our largest quarter and the lower EBITDA protocol of iPhone web.
As we communicated at the start of 2022 with our focus on sustainable growth and our continued transformation to a commerce media platform, we have invested in high ROI projects, including new skill sets.
Clearly, we also have initiatives to enable productivity and efficiency.
Given the tougher macro and the iPhone web integration. This is a heavy focus area.
Giving 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 $90 million for 2022.
Optimally 10 percentage points compared to our previous forecast of $60 million.
This included $10 million in Q1.
$21 million in Q2.
$28 million in Q3, and an estimated 31 million dollar impact in Q4.
As a reminder, close to 30% of our contribution ex Tac is exposed to the euro and approximately 10% of our contribution at Tek are exposed to the Japanese yen.
There was no change to our capital expenditures and we continue to expect free cash flow conversion of about 45% of adjusted EBITDA.
But Q4 2022, we are cautious given the impact of the slower macro environment on consumers, our client and the expectation of lower budgets, especially in retail.
We expect Q4 contribution ex Tac of one of $275 million to $280 million.
Going by 11%.
13% at constant currency.
This assumes flat organic growth in iPhone with inorganic growth.
Importantly, we expect retail media to continue to show strong growth despite the challenging macro environment.
We assume a loss of signal loss impact of approximately $9 million we expect.
Adjusted EBITDA of $90 million to $95 million.
Reflecting the lower top line.
Looking ahead to 2023, while there is macro economic uncertainty, we expect to continue to deliver growth.
Healthy profitability and solid cash generation.
We expect our broad and diversified client base.
Our performance driven offering to contribute to the relative resilience of our business.
We are disciplined in managing our head count in our expenses and we have a clear plan for the integration of iPhone with.
We expect our adjusted EBITDA margin to remain in line with 2022 levels given the full year impact of the iPhone web business.
Over time, we have a plan to drive operating leverage from scaling and transitioning to more self service solutions as well as synergies.
As I've said before and as with any transformation path won't be linear.
We remain focused on the execution of our strategy to create the world's leading commerce media platform to drive long term sustainable growth and shareholder value.
Look forward to sharing more at our Investor day on Monday.
And with that I'll turn over to the operator to begin the Q&A session.
Thank you.
We will now begin the question and answer session to ask a question you may have.
And then one on you touched on the phone.
You are using a speakerphone please pick up your handset before pressing the keys.
If at any time. Your question has been addressed and you would like to withdraw your question. Please.
<unk> and team.
At this time, we will pause momentarily to us from a lot of them.
Our first question comes from Matt Thornton with Childress Securities. Please go ahead.
And Sarah and everyone.
Maybe two if I could first maybe you can just help us understand what youre seeing out there just from a linearity standpoint, as we exited <unk> kind of through October I'm, just kind of curious what informs your your <unk> outlook any color there would be would be helpful.
And then just secondly around retail media.
And of all the different revenue buckets, a little bit more of a T cell.
I'm just curious if thats just pure year over year comp or if there's anything you're seeing changing there from a from a competitive and or other.
Standpoint, any color on those on those two would be it would be great. Thank you.
I think the system yes.
So thank you for the question in terms of Q4.
We are seeing and we saw it in Q3 and I would say.
That's from all retailers.
They're more targeted and more moderate spend.
And what we do say is of course that there's an orientation towards performance marketing, but with the pullback in consumer spending.
Less brand dollars.
And I would say that just more cautious focus on budgets.
Expected pullback and we saw a pullback from Q3 spend and a more focused spend in Q4 holiday season.
Last year, we sold a early spend for holiday spending and that we haven't seen this year and consistent with <unk>.
External.
Measurements, they expect the holiday season to be muted versus last year, we're seeing the same trend. So that's the reason for our caution.
It's less spend.
Our customers.
Overall, and thats, largely due to less spend by consumers and less online traffic.
Yes, I'll add a little bit of color to it.
Just to sort of reiterate what Sarah said.
One of the sort of.
Signals that we saw was from Prime day.
And usually what we see and what we saw last year was when different.
Shopping days come off there's a halo effect.
So retailers more broadly than Amazon use that opportunity.
To do their own discounting on that Guy and they see <unk> Pipestone and good sales based on the based on the fact that.
Amazon Prime day, we didn't see that this year, which was really interesting.
It was.
It was telling in terms of consumer spend.
It's not that retailers didn't try.
But what we are looking forward to is seeing.
Cyber Monday, and Black Friday, coming up to see whether or not there's a shift there to see whether or not there's a lift there compared to the halo effect that we didn't see from Amazon Prime day. So we're just being cautious because we had a lot of data at our fingertips, we see trends, we see signs may want to make sure that we taking those.
Into account when we look at our performance potential performance going forward on the retail media front.
Look there's really solid growth there some very very solid store and comments made meteor is.
Is that being place to be right now if youre.
If you are a retailer.
If you're an advertiser you want to swing towards somewhere where you're going to see those results and so again, while we remain cautious because we see a slower ramp up.
In terms of the time it takes to retailers to come on board just the caution that they're applying to their strategies. There is no doubt in our mind that promise meteor.
Is the winner as you compare it to the.
The other advertising platforms in terms of search and social.
Where we are.
Extremely optimistic spill on our strategy around Commerce media.
Making sure that we're prudent and cautious given what we see in the marketplace around consumers spend and retails reaction to that.
Yeah, I would just add one piece of color on the consumer spends more of it on more essential goods so lifestyle apparel.
Toys and hobbies and those are obviously, but no huge areas for us, but also for Q4 spend overall and then retailers effect year on year has decreased as effects that we've seen that with Janney.
<unk> see that without the earnings coming out and.
So we've applied that within our assumptions.
In terms of the spending that we expect to see for Q4.
Okay.
The next question comes from Sarah Simon with <unk>. Please go ahead.
Good morning, I've got two questions. The first one is on.
Q4 outlook again.
You I mean, youre talking about being cautious and so on so are you assuming in your guidance that things deteriorate from the current level of trading that you see now.
That was the first question and then the second one is.
The expanded debt facility should we read anything into that I mean, clearly, it's a tough environment, probably more companies are going to fall over.
Are you feeling like you might want to step up the pace in terms of M&A or is it just.
They also do more money, so you've taken it and we shouldnt read anything more into it than that thanks.
I'll take the second question first.
We started to renegotiate our credit facility earlier this year actually I would say before the financial markets became more shaky.
Has a high level of interest from global partners.
Including new partners in the Americas that wanted to be part of the facility and so we increased the facility last year.
<unk>.
A way to ensure that we had the right level of flexibility going forward.
We are incredibly robust on our balance sheet, our cash flow generation.
Needs for day to day operations we.
We do have an M&A pipeline that we continue to focus on.
Most of those would be tuck ins as we've always said four key capabilities.
He will help us to accelerate but no issues of tone in terms of our balance sheet, our cash generation.
Operational leverage from our own operations.
For Q4.
Yes, we have seen that the level of spend is more cautious so we have.
In Q4 move the number down I would say week over week that does not mean that we don't have.
Fantastic high five moments within that but when we look overall were seeing softness in key categories. So retail.
Apparel huge areas for us, but we don't see as much spend.
And we've seen country by country.
Merrick is large retail.
Asia Pac, France, being I would say lower light.
With the big highlights in terms of returning back to growth for some of our other markets, including the U K U K is more resilient than we've seen over the last few months. So we'll see what happens there.
So thats our caution.
I would say it's in line with everyone else's portion so I don't see anything that's different when I.
Read the transcripts of others in terms of what we're seeing ourselves.
The benefit we have is were closest to the point of sale in terms of the performance advertising and so we do see and expect to see that there will be continued performance advertising for Q4.
Going into a holiday season that may be shorter and less exciting than the last two years given that we're out of Covid and people are less on there.
Desktops and funds and they were a year or two years ago.
Yeah, Okay, but would you say that in your guidance you are assuming that things get worse from here or are you basing it on kind of what you've seen in October and assuming that that trend is consistent.
Yeah, I would say, we're not seeing the early pick up of holiday spend that we saw in the last two years. So last year, we went from.
Aside the 'twenty, yes, we went from Cypress thinks and the traditional pre COVID-19 model to cyber 'twenty and in 'twenty, one sorry in 'twenty to cyber 30 last year and we're not seeing that right now of course, we're not in the peak holiday season, but we haven't seen the early spend that we have.
Benefited from last year, and we are seeing year on year on year budgets.
Down, whereas last year, they were massively up so that the trends that we're seeing yeah. Okay, I wouldn't say alright, well thats helpful. It gets reality [laughter] yep. Okay. That's helpful. Thanks.
The next question comes from Richard Kramer with every transaction.
Please go ahead.
Thanks, very much Megan since you mentioned Prime day can you talk a little bit about Amazon both as a competitor to curtail but also as sort of the poster child. For example, how some of your large retail clients might be looking to build.
Material advertising businesses on their own and how you might be helping them with that and I guess one other question given your comments around Meghan about the timing of spend resuming being so uncertain and cautiousness can you talk about what youre doing to bring new logos onboard this year.
Physician yourself now for the growth that you might like to see in 2023.
Yeah, great. Thanks, Thanks, Richard good to hear.
Was very encouraging I think from from our standpoint to hear Amazon advertising still performing.
Really solid results they posted yesterday they are.
They are the poster child for retail media.
They attract a lot of brands that part of sort of a brand strategy spans.
On their sites.
They do it very very well and they've been doing it for a long time.
[laughter] reasonably.
So we've always said I think that we see ourselves as the Amazon advertising with the open Internet and that's the way, we think about our business and the reason why this is.
Important is that brands cannot just.
You can find themselves can find might get strong way, but.
Amazon because Amazon is a competing retail up.
And they need to be able to advertise seller on advertising on their own site and also extend off across the open internet. So they need a platform that enables them to do that.
Which means that it's not necessarily that we are.
Going to <unk>.
Disrupt their advertising on Amazon.
To be more complementary.
They can light up their own advertising business and expand that.
<unk> brands Ouch and across the open Internet.
They wouldn't necessarily rely on Amazon to do that Amazon's reach is not the same as <unk> reach particularly when it comes to how many.
Consumers, we can reach across the open internet and how well we normally those consignments and know whether those consumers are on their buyer journey their shoppers and therefore, they are a very valuable consumer to reach so we have a.
I would guess.
Our complementary but extremely strong offering as compared to Amazon advertising.
But to your point.
Their approach to Charles and and we're there as the complementary.
Hum.
Now I will turn it back comparable supplementary supplier to.
Amazon.
Our retailers are leaning into this space incredibly heavily right now because it is a new opportunity for them.
They see the results at Amazon.
<unk> have some have enjoyed.
I see the growth of Valmont, Mark connect and they see the the.
The serviceable addressable market that is available to them if they just lineup their own capability and thats, where they turned to <unk> to help them to do that.
We're seeing just solids quarter after quarter performance here of our retail media business.
The logos that we brought on board in terms of not just retailers.
But brands and the strength of our relationship with agencies is just continuing to prove to us that we are.
Exactly where we need to be.
And we will continue down this route.
More to come.
On Monday, which and I'm looking forward to seeing you there.
On the second piece okay.
Sarah to speak to yes.
Yes, I mean, just in terms of we had some win backs econ announced the names, but I would say massive retires.
In the U S. If it comes back to cardio due to outperformance. So we've seen not only new logo wins.
Our median multifaceted was one of those.
That was a new logo, we have some other new logos that we have just one that we will be announcing soon.
In Europe as well as in the U S.
And we have in fact, our brands, but also we've increased the number of brands.
And more to come on Monday, when we ship them.
Metrics, but in terms of saying retail contribution ex Tac.
Our retention of 133% in Q3 doesn't.
That's an average of 137% over the last four quarters.
What we see for 2023, it's not only the contribution from existing retailers, which is.
For the most of all what we benefited from this year in terms of our growth.
But also new contributions from both sides retailers coming on board.
Most retailers have a Q4 code freeze.
So typically we tend to see more of that uplift going into the new year and that's what we expect.
In 2022 as well.
Okay. Thanks.
The next question comes from.
Mark Kennedy with Stifel. Please go ahead.
Great. Thanks, very much and good morning, everyone.
You just talked about media Mark for just one second.
Can you just remind us when that kicks in is that the 23 timeline that you outlined and I guess when can we expect.
Some of that size to be material.
And then you talked about synergies.
And your ability to gain some operating leverage.
Perhaps beyond 2023 can you give us a sense where.
Those synergies might be out I think.
Bipod web I think their employee base was relatively small already so any thoughts there would be great. Thank you.
Yes.
In terms of timing and that's a partnership between us and many of those.
Would you expect those revenues to come start coming in in 2023. However.
We haven't given guidance for 2023, so I don't want to be too precise.
We expect to see that revenue coming in.
In terms of the synergy we have a clear plan with the integration of <unk> West.
We're already working through with our sales on the iPhone web team.
We do see it.
Two things one is the revenue synergies that we expected from integration of that platform is the Dallas and a lot more to come on that on Monday in terms of our new offerings, which is e-commerce media platform and our joint capabilities driving that.
In terms of our cost base, we have as you know for a long time enjoys a high margin retail continuing managed service business and as we transition more to self serve it clearly there are efficiencies that come with that.
So we have already invested in those solutions selling skill set in 2022, and so we anticipate enjoying the benefit of that on our top line growth and also as they look at their organizations to ensure that that fit for purpose.
<unk> focused on growth and focused on high ROI clients, we have segmented our clients to enterprise clients and growth players.
We have made some changes in our organization to ensure that we're fully aligned to our customers to their needs.
CMO level, so that we ensure we drive the commerce media platform story at the right level to ensure that we are selling a platform as opposed to in the past individual product plays.
Overall, we anticipate that the 2023, we'll continue to invest not only in the the higher high.
Growth.
Investments, particularly in Asia Pac and retail media.
But also.
That will start to see where the infrastructure that we need to drive that change.
We will be invested in so data centers is an area of focus for us we have taken out a lot of spend over the last couple of days about $20 million.
While our data centers that don't renew that with you.
Next year, some of which will be capex, some will be opex.
And that infrastructure around how we ensure that we can bill and collect.
<unk> accounted for all of our new platform, along with iPhone wet so from the integration of new capability to upgrade.
Our internal infrastructure.
Systems.
We're looking to be world class, both exciting place to be.
That's great. Thanks, Sir.
Our next question comes from Doug Anmuth.
J P. Morgan. Please go ahead.
Yeah, Hi, this is Katie on for Doug Thanks for taking the question.
So first I just wanted to dig into privacy it looks like it's going to be.
Five or $10 million headwind worst than anticipated this year, but maybe just walk through what's driving that higher and how youre thinking about some of those incremental headwinds into 2023.
You previously mentioned not expecting a big year over year impact. So just curious if that's still the case.
And then secondly, just looking at Google privacy sandbox.
Reports have suggested that the pledge product has received some mixed review it but just curious if there's anything you can share in terms of your feedback from testing the <unk> product.
Hello on the second question on the pledge that they pocket will address on Monday, So I'll leave that question to Monday, when we'll have top presenting.
In terms of the privacy impact.
We have seen a higher increase related to explicit consent. So that was very small for us at the beginning of Q1 Q2.
We anticipate that was about $4 million.
The incremental headwind in Q3, I'm anticipating that to be about 3 million in Q4.
In terms of the 2023.
Privacy incremental impact we are not seeing any large incremental impact. So we don't anticipate any statements that's incremental too.
Our 2022.
Expectation.
Overall, we went from $55 million to about $60 million and most of that will be in Q3.
Okay. Thanks.
The next question comes from Tim <unk> with Macquarie. Please go ahead.
Alright, Thanks, I've got a question, which im guessing youre, probably also be addressing on Monday. So.
Just answer as you see fit but it's about your Offsite retail business, which you mentioned at the top of the call and you've spoken about before and I'm. Just curious if you could enlighten us a bit more as to what youre doing in Offsite, how you differ from others and I guess, where you see the competition.
Yeah.
Yes. Thanks for the question Tim It will it will be addressed on Monday.
But let me give you a couple of.
Some some.
Topline nights on it.
Upfront drops is.
Well for our clients is their ability to partner with the brands are awfully big brands.
Advertising of the re Thailand science, because the retailers realize that if they just.
Nick to the traffic that comes to their sites they'll never get them not reach for those brands inside I extend.
That advertising out across the open internet.
And so comments Max for US has been our ability to light often DSP that the retailers can use two to.
To manage this for their brands.
Hum.
Our ability to reach and we reached today about 725 million daily active users of which we have unique insights into whether they are comments audiences.
Meaning are they audiences that are on their buyer journey on their audiences that are shopping as opposed to audiences that might just be.
Communicating with each other on social platforms or researching something that has nothing to do with our purchase intent. So we're really very focused on commerce audiences. When we have.
<unk> capabilities through the datasets that we have access to to be able to really narrow in on these very valuable audiences.
They come to life for the retailer and the brand.
Through the DHT three comments Max so it's.
Very unique proposition that we offer.
There is nobody really doing.
Solid offsite capability right now for retailers. So this is very new for retailers.
And there is certainly.
Big differentiator for us and our ability to do close looped reporting.
In other words being able to report for them the effectiveness of their onsite sponsored ads with the display ads with the search.
They're off sites.
<unk> expansion to Offsite ads for the retail ops in near real time.
Measurement capability and that.
You don't see anywhere.
I don't want to be a spoiler here because there is more to come on this on Monday, but there's a lot of reasons why you would point or you would come to <unk> for <unk>.
For our retail media off site versus anybody else.
Okay. Thanks, we look forward to Monday.
Great.
If you have a question. Please press star then one can be joined into the queue.
Our next question comes from Mark Ketchum will make with the benchmark company. Please go ahead.
Thank you good morning, So we've heard a few prominent dsp's.
I'll talk more about the relationships with retail media networks.
And I'm curious if.
If you can discuss.
What may remain sort of your relative advantage here, perhaps how commerce Max may enable you to corner the market a bit more.
I know you just talked about.
Closed loop is certainly a relative advantage, but also curious about what your go to market now is.
With the commerce back in place thanks.
Yeah look.
<unk> media being a retail media.
Provider is more than what a lot of people think that it is.
And we've been doing this for a long time, we acquired a company called Hooker <unk> objects.
We've been focused on this for six years, now, which is probably longer than anybody else.
Plus from a global perspective, we have people on the ground in those markets who knows.
That have local relationships in those markets and so we have this.
Footprint of people, who know retail media backwards.
Starting point.
The second is to do retail media is to integrate with the retailers. It's not just about lining up the DSP that the retailers can use you have to have deep integration into the retailers datasets from the catalog data through to the.
Its ku data to their loyalty card data to the CRM data. It just goes on and on because you have to.
You'd have to do a job for the retailer which is.
Lineup the right promotion at the right time as the product actually available is it a stock has it in stock and that geolocation.
Is the how can we continue to stay engaged with the consumer by giving them a recommendation for something else that they might like all of these things and disciplines that come with being able to do retail media.
And there's only a couple of players out there that can actually do that.
So that's that's sort of the that's the income routes for us as that.
Don't underestimate what it means to be.
A player in this space and the first mover advantage for US is the deep integrations that we already have with over 160 retailers around the world. Some of the biggest names on the planet.
From there it's extending out the services like I just talked about is about retailers now need to be able to extend beyond their own walls to offer advertising to the brands.
Take them off site to get them in front of more consumers, who are actually on their buying journey and Thats what commerce. Max is all about so again I don't want to be.
Spoiler for Monday.
I'm looking forward to it.
The team is taking you through what that looks like it's really very cool and exciting.
I look forward to I look forward to Sydney there Mark.
Likewise, Thanks, Craig I look forward to seeing you all as well I'm going to take care of events.
This concludes our question and answer session I would now like to turn the conference back over to Melanie <unk> for any closing comments.
Thank you Megan and Sarah This now concludes our call for today, we look forward to seeing many of you at our Investor Day in New York on Monday, and we'd also webcast. The EBIT line have a great day everyone.
Got it. Thank you for attending today's presentation you may now disconnect.