Q4 2023 Criteo SA Earnings Call

Good morning, and welcome to courteous fourth quarter and fiscal year 2023 earnings call.

Operator: Good morning, and welcome to Criteo's 4th Quarter and Fiscal Year 2023 Earnings Call. All participants will be in listen-only mode. Should you need assistance, please press the star key followed by zero.

All participants will be in listen only mode should you need assistance. Please press the star key followed by zero.

Operator: After the prepared remarks, there will be an opportunity to ask questions. To ask a question, please press star, then one. To withdraw your question, please press star, then two. Please note, this event is being recorded. I would now like to turn the conference over to Melanie D'Ombre, Vice President, Investor Relations. Please go ahead.

After the prepared remarks, there will be an opportunity to ask questions to ask a question. Please press Star then one to withdraw your question. Please press Star then two please note. This event is being recorded I would now like to turn the conference over to Melanie Don Brad.

Speaker Change: Vice President Investor Relations. Please go ahead.

Melanie D'Ombre: Good morning, everyone, and welcome to Criteo's fourth quarter and fifth quarter 2023 earnings call. Joining us on the call today are Chief Executive Officer Megan Clarkin and Chief Financial Officer Sarah Dickman, who are going to share some prepared remarks. Subpersons or the Chief Product Officer will join us for the Q&A session. As usual, you will find our investor presentation on our investor website now, as well as our prepared remarks and transcript after the call. Before we get started, I would like to remind you that our remarks will include forward-looking statements, which reflect Criteo's judgments, assumptions, and analysis as of today. Our actual results may differ materially from current expectations based on a number of factors affecting Criteo's business, except as required by law. We do not undertake any obligation to update any forward-looking statements discussed today.

Speaker Change: Good morning, everyone and when it comes to credit it was fourth quarter I was just 40 or 2023 earnings call.

Speaker Change: Joining us on the call today, Chief Executive Officer, Megan Chen and Chief financial officers already.

Speaker Change: We're going to share some prepared remarks.

Speaker Change: So a person who's our chief product officer will join us for the Q&A session.

Speaker Change: As usual arguably find our investor presentation on our Investor website now what other prepared remarks that transcript after the card.

Speaker Change: Before we get started I would like to remind you that our remarks will include forward looking statements, which reflect kudos judgment at Samsung and then I think he is upset.

Speaker Change: Actual results may differ materially from current expectations based on a number of factors affecting kudos isn't it.

Speaker Change: Except as required by law, we do not undertake any obligation to update any forward looking statements discussed today.

Melanie D'Ombre: For more information, please refer to the risk factors discussed in our earnings release, as well as our most recent filings, the 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 GAP metrics are included in our earnings release published today. Finally, unless otherwise stated, all board comparisons made during this course are against the same period in the prior year. With that said, let me now hand it over to Megan.

For information please refer to the risk factors discussed in our earnings release as well.

Speaker Change: Thank you and thank you filed with the SEC.

Speaker Change: We'll also discuss non-GAAP measures of our performance.

Speaker Change: Definitions and reconciliations to the most directly comparable GAAP metrics are included in our earnings release published today.

Speaker Change: Finally, unless otherwise stated all growth comparisons made during this court are against the same carrier than the prior year with that let me now hand, it over to Megan.

Megan Clarkin: Thanks, Melanie. And good morning, everyone. Thank you for joining us today. In Q4, we delivered record topline growth with organic growth acceleration and record adjusted EBITDA. I'm proud of our team's hard work and strong execution during the holiday season, when the entire organization leans in to support our clients throughout this peak time and advertise. Our outperformance reflects the resilience of our business and was driven by the robust strategies implemented with large-scale commerce data and breakthrough AI technology to deliver better predictions and outcomes for our clients. Looking back over the years since I started with Criteo and began the transformation of the company, we've made remarkable progress. I'm so proud of the work that we do, what we've achieved, and I've never been more excited about our future.

Megan Chen: Thanks, Melanie and good morning, everyone and thank you for joining us Tonight.

Megan Chen: In Q4, we delivered record top line with organic growth acceleration and record adjusted EBITDA.

Megan Chen: Proud about team's hard work and strong execution during the holiday season, when the entire organization means and to support our clients throughout this peak time in advertising.

Megan Chen: Our outperformance reflects the resilience of our business.

It's driven by the robust strategies with implemented with lab scale Palmas, commerce data and breakthrough technology to deliver better predictions and outcomes for our clients.

Megan Chen: Looking back over the years since I started with pretty young and began the transformation of the company. We've made remarkable progress I'm. So proud of the work that we've done what we've achieved and I've never been more excited about our future.

Megan Clarkin: Our better-than-expected performance in 2023 further affirms our strategic direction while setting the stage for continued growth in 2024. In 2023, we achieved double-digit growth for the second consecutive year, with a historic milestone of crossing the $1 billion contribution mark for the first time. This is a testament to the tireless efforts our Criteos have poured into executing our company turnaround. We also exceeded our adjusted EBITDA margin target for the year, demonstrating cost discipline while executing our turnaround.

Megan Chen: Our better than expected performance in 2023 further extends our strategic direction, while setting the stage for continued growth in 2024.

Megan Chen: In 2023, we achieved double digit growth for the second consecutive year with a historic milestone crossing the $1 billion in contribution ex Tac for the first time.

Megan Chen: This is a testament to the tireless if it sounds pretty out it's important to executing our company turnaround.

Megan Chen: We also exceeded our adjusted EBITDA margin target for the year, demonstrating cost discipline, while executing a turnaround.

Megan Clarkin: Retail media surpassed $200 million in annual revenue, and retargeting now represents less than 50% of our business. Our strategy to offset declines in our retargeting business by offering full funnel targeting, a strategic move that we announced in 2020, has proved successful. With accelerated momentum, our commerce audience's targeting was up 60% in the fourth quarter. As we continue to push forward, carving out our leadership position in commerce media and delivering against the vision that we've laid out, 2023 was a big year for us, as we focused on tech delivery and differentiation with the launch of our demand-side platform called Commerce Max and the launch of our supply-side platform called Commerce Grid. We've built differentiated capabilities that position Criteo to offer the end-to-end platform of choice for commerce media, allowing data flows and access across one platform for frictionless data needs that our clients are looking for. We bolstered our position as the leading retail media ad tech provider, gaining market share in 2023 with a remarkable 36% year-over-year growth in activated media spend, which surged to $1.2 billion now flowing We partner with 220 retailers globally.

Megan Chen: Retail media surpassed $200 million in annual revenue and re targeting now represents less than 50% of that business.

Megan Chen: Our strategy to offset declines in our re targeting business by offering full funnel targeting a strategic move that we announced in 2020 has proved successful with accelerated momentum our Polish audiences targeting is that 60% in the fourth quarter.

Megan Chen: As we continue to push forward counting our leadership position in comments media and delivering against the vision that we've laid out 2023 it was a big year for us as we focused on delivery and differentiation with the launch of that demand side platform called Commerce Max.

Megan Chen: And the launch of our supply side platform called comments Greg.

Megan Chen: With differentiated capabilities that position pretty to offer the end to end platform of choice for comments media.

Megan Chen: Hello, and data, Florida is in excess of course, one platform for frictionless data needs that our clients are looking for.

Megan Chen: We bolstered our position as the leading retail media at chip provide us gaining market share in 2023, with a remarkable 36% year over year growth and activated media space, which surged to $1.2 billion now flowing through our pipes.

Megan Chen: We partner with 220 retailers globally.

Megan Clarkin: And they are trusting Creo with more ad placements, more ad formats, and more first-party data than ever before. Among others, we expanded the scope of our partnership with Walgreens, which can now include on-site display. And we're excited to launch sponsored video with Walmart Connect Mexico and Doc Morris.

Megan Chen: And they have trust in Korea, with more AD placements more AD formats and more first party data.

Before.

Megan Chen: Among others, we expanded the scope of our partnership with Walgreens to.

Megan Chen: So now include onsite this lady.

Megan Chen: And we're excited to launch sponsor videos with Valmont, Kinect Mexicali and dump Morris.

Megan Clarkin: In addition, we expanded our global presence by tripling our retailer footprint in APAC over the past 12 months. We also broadened our ecosystem to include commerce companies like Uber, which saw media budgets more than double sequentially in Q4. We're pleased to continue to expand our partnership with Uber in markets including Japan, Colombia, and Peru.

Megan Chen: In addition, we expanded our global presence by tripling, our retail footprint in APAC over the past 12 months.

Megan Chen: We also broadened out ecosystem to include e-commerce companies, like Dubai, which still media budgets more than doubled sequentially in Q4.

Megan Chen: We're pleased to continue to expand our partnership with Isabella and markets, including Japan.

Megan Chen: Lambert in Peru.

Megan Chen: We continue to gain traction without subset, that's commerce, Max DSP, which gives US 2600 brands and agencies. The single access point to buy premium retail media inventory on retailer sites and across the open internet inventory off site.

Megan Clarkin: We continue to gain traction with our self-service Commerce Max DSP, which gives our 2,600 brands and agencies a single access point to buy premium retail media inventory on retailer sites and across open internet inventory off-site with closed-loop measurements. All of the major whole co-agencies are now using Commerce Max, and we're seeing increasing adoption of multi-retailer campaigns and full funnel campaigns across on-site and off-site advertising. We ran multiple off-site campaigns in Q4, and we kicked off 2024 with 10 onboarded retailers such as Best Buy, Macy's, Rite Aid, Shipt, Asda, and Growing Pipeline. We're seeing CommerceMax unlock its brand national media budget. Along with the growth of free-to-tell media as a powerful new advertising vehicle, our momentum is building. We're in a pole position to capitalize on the largest market opportunity in advertising since search and social, and our team continues to work hard to differentiate, deliver, and drive scale.

Megan Chen: Closed loop measurement.

Megan Chen: All of the major Holdco agencies are now using common snacks, and we're seeing increasing adoption of multi retailer campaigns and full funnel campaigns across onsite and offsite advertising.

We ran multiple offsite campaigns in Q4, we kicked off 2024 with an onboard at retailers such as best buy Macy's right time shift and stuff and a growing pipeline.

Megan Chen: We've seen call mismatch and work brands National media budgets.

Megan Chen: Along with the growth of the pretty challenging here as a powerful new advertising vehicles, our momentum is building.

Megan Chen: We're in pole position to capitalize on the largest market opportunity in advertisement search and social and our team continues to work hard to differentiate the liver and drive scale.

Megan Clarkin: Turning to Marketing Solutions, we delivered our second consecutive quarter of growth, with a successful holiday cyber six period. This was driven by the fast growth of our commerce audiences solution, which focuses on mid and upper funnel targeting using the latest commerce data set on the open internet and best-in-class AI. We see more advertisers choosing Criteo for precision targeting across the entire marketing funnel, including existing clients expanding the scope of their partnership with us.

Megan Chen: Turning to marketing solutions.

Megan Chen: We delivered our second consecutive quarter of growth.

Megan Chen: With a successful holiday sort of six period.

Megan Chen: This was driven by the fast growth of our commerce audiences solution, which focuses on mid and upper funnel targeting using the latest comments data set on the open Internet and best in class II.

Megan Chen: We see more advertisers choosing pretty young for precision targeting across the entire marketing funnel.

Megan Chen: Putting existing clients expanding the scope of their partnership with us.

Megan Clarkin: A recent example is our full-funnel activation with TUI that led to successful engagement during the holiday season and resulted in a year-over-year increase of close to 60% in their media spend, which they allocated to Criteo in Q4. How advertiser clients can move spend between performance, awareness, and broad reach tactics using shopper targets only available with our full funnel targeting capability. Our cross-selling efforts are also contributing to the success. About 70% of our media spend comes from clients that use commerce audiences targeting in addition to retargeting.

Megan Chen: Recent example is now full funnel activation with TUI that led to successful engagement during the holiday season and resulted in a year I get your inquiry.

Megan Chen: The 60% and their media spend which they allocate it's pretty young in Q4.

Advertising clients can move spend between performance awareness and broad reach tactics using shopper targets I'm going to get vulnerable without full funnel targeting capabilities.

Megan Chen: Our cross selling efforts are also contributing to the six at about 70% of our media spend.

Megan Chen: Comes from clients that use commerce audiences targeting in addition to a REIT happening.

Megan Clarkin: We also benefited from our AI-driven performance enhancements, which drove an uplift in contribution x-tax in the high single-digit million range in Q4, a real output of our AI ML practice at work. Furthermore, we're experiencing solid traction in our partnership with META, and we see further opportunities to expand into other social environments, which bring access to first-party identifiers for billions of users. The work we've done over the past few quarters has started to bear fruit. We ran hundreds of campaigns on Facebook and Instagram during Q4.

Megan Chen: We also benefited from our AI driven performance enhancements, which drive an uplift in contribution ex Tac in the high single digit million range in Q4, a real output.

Speaker Change: Alright, and malpractice network.

Speaker Change: Furthermore, we're experiencing solid traction in our partnership with Mercer and we.

Speaker Change: We see further opportunities to expand into other sexual environments, which bring access to first party identifiers with billions of users.

Speaker Change: We've done over the past few quarters has started to bear fruit.

Speaker Change: We ran hundreds of campaigns on Facebook and Instagram during Q4.

Megan Clarkin: Our advertiser clients are seeing a 25% boost in sales on average when activating Meta's inventory in combination with the open internet. Among others, Superpharm experienced a double-digit increase in return on ad spend and a 69% sales boost after adding Meta's large-scale inventory to their campaigns in Q4. It's important to call out that social networks are logged in environments that offer precision and scale for first-party data matching in a cookie-less world and represent one of the pillars of our multi-pronged addressability strategy. In other words, activation of first-party data at a much greater scale. Turning to 2024.

Speaker Change: Advertising clients the thing at 25% boost in sales on average when activating maintenance inventory.

Speaker Change: Combination with the open Internet.

Speaker Change: Among others superfan experienced a double digit increase in return on AD spend and a 69% sales base after adding Memphis largest guys haven't been trained today campaigns in Q4.

Speaker Change: It's important to call out that social networks are low and environments, which offer precision and scale for first party data matching in a cookie less world.

Speaker Change: And represent one of the pillars of our multi pronged address stability strategy in other words activation of first party data at much greater scale.

Speaker Change: Turning to 2024.

Megan Clarkin: We see further opportunities for Criteo ahead as we continue to focus on delivery against our transformation. In retail media, our top priorities this year are centering on scaling retailers and driving more demand into our platforms. We recently expanded our roster of senior leaders to further scale our business with the appointments of industry veterans Melanie Zimmerman and Stephen Howard-Serein.

Speaker Change: We see further opportunities for Caribbean ahead, as we continue to focus on delivery against our transformation.

Speaker Change: And retail media our top priorities. This year are centered on scaling retailers and driving more demand into our platform.

Speaker Change: We recently expanded our roster of senior leaders just said the scale of our business with the appointment of industry veterans Melanie Solomon.

Speaker Change: And Stephen Howard surveying.

Megan Clarkin: We're thrilled to have them join us at a time when we continue to gain market share. We recently won new retailers, including Albertsons in the U.S. and PC Components in Europe, which present exciting growth opportunities and reinforce our leadership position in the space. Albertsons chose Criteo for its technical capabilities and its platform's ability to scale and perform along with our roadmap to continuously enhance our capabilities.

Speaker Change: With real to have them join us in a time and we continue to gain market share.

We recently won new retailers, including Albertsons in the U S.

Speaker Change: N P C components in Europe, which presented exciting growth opportunities and reinforce our leadership position in the space.

Speaker Change: Albertsons chose pretty good throughout technical capabilities, and our platform's ability to scale and perform along without roadmap to continuously enhance our capability and we're off to a great start with them.

Megan Clarkin: Now we're off to a great start with, With an expanded retailer footprint, we see exciting opportunities to drive more demand, or MediaSpend, I should say, into our platform. Our goal is to make retail media easy to buy, bringing more opportunities to our clients and driving further scale. We're proud to have recently signed multi-year global brand deals with two world-leading beauty and CQG brands.

Speaker Change: With an expanded retail footprint, we see exciting opportunities to drive more demand.

Speaker Change: Or maybe it's been I should say into our platform.

Speaker Change: Our goal is to make <unk> easy to by bringing more opportunities to our clients and driving further scale.

Speaker Change: We're proud to have recently signed multi year global brand deals with two world, leading beauty and CPG brands.

Megan Clarkin: We also anticipate sustained momentum with the major holding co-agencies as their retail media spend allocated to Criteo surges by 50% in the U.S. and experienced a two-fold increase in Europe and APAC. Overall, our multi-year partnerships with leading agencies and brands represent hundreds of millions of dollars of spend predicted to come through our platform in 2024 and beyond. According to Group M, retail media is the fastest-growing advertising platform worldwide and is predicted to exceed linear TV and connected TV spend combined by 2028.

Speaker Change: We also anticipate sustained momentum with major hotel agency as their retail media spend allocated to pretty nice surge in 2023 by 50% in the U S and experienced a twofold increase in Europe and APAC.

Speaker Change: Overall, our multi year partnerships with leading agencies and brands represent hundreds of millions of dollars of spin predicted to come through our platform in 2024 and beyond.

According to grouping become easier is the fastest growing advertising platform worldwide and is predicted to exceed linear television and connected TV spend combined by 2028.

Megan Clarkin: Similarly, a recent study we conducted shows that more than two-thirds of brands and agencies expect retail media to attract more spend in 2024, as 77% of brands and 82% of agencies globally say retail media spend is more effective in terms of sales impact compared to other channels. Our platform unifies supply and demand to unleash the full potential of their retail media activation as more and more dollars flow from legacy ad channels to retail media, further accelerate, and advertisers increasingly value retailers' first-party data in the absence of third-party cooking. Looking at commerce media more broadly, we believe we have great opportunities to scale our offering and drive more innovation. We're excited to expand our commerce grid partnership with Google's Display & Video 360 to surface always-on supply deals powered by Criteo Commerce audiences inside their marketplace for activation across their advertiser portfolio. We're already seeing incremental demand from top agencies for our proprietary commerce audience and supply packages that could expand to retail audiences over time. With Commerce Grid, we intend to bring demands from established third-party DSPs to drive more revenue for retailers. We recently completed our first retail media offsite campaign using retailer first party data through CommerceGrid.

Speaker Change: Similarly, a recent study we conducted shows that more than two thirds of brands and agency <unk>.

Speaker Change: Retail media to attract more spend in 'twenty 'twenty four is.

Speaker Change: Sydney, Sydney to set of brands and 82% agencies globally like retail media spend is more effective in terms of sales impact compared to other channels.

Speaker Change: Our platform unified supply and demand.

Speaker Change: The full potential of their retail media activation as more and more dollars flowing from legacy AD channels to reach out media.

Speaker Change: They were accelerated and advertisers increasingly in value.

Speaker Change: Recently valued retailers first tiny diner and the absence of third party cookies.

Speaker Change: Looking at Congress media more broadly, we believe we have great opportunities to scale, our offering and drive more innovation.

Speaker Change: We're excited to expand our promise grid partnership.

Speaker Change: With googles display and video to 362.

Speaker Change: So its always on supply deals powered by pretty commerce audiences.

Speaker Change: The marketplace for activation across there at the type of portfolio.

Speaker Change: We're already seeing incremental demand from top agencies throughout proprietary commerce audience and supplier packages that could expand to retailer audiences over time.

Speaker Change: With comments, great. We intend to bring demand from established third party D. S T to drive more revenue per retail as well.

Speaker Change: We recently completed our first retail media upside campaign using retail of first party data through Congress great.

Megan Clarkin: And we look forward to building on that momentum. Importantly, we continue to integrate cutting-edge AI into our platform with a focus on improving performance and user experience for our clients and optimizing our service delivery process. The use of impactful and engaging creatives is expected to become increasingly important to capture an audience's attention. This is a key component of the innovation we're bringing to market, and we've been developing and testing generative AI-powered tools to optimize creatives and enhance performance.

Speaker Change: We look forward to building on that momentum.

Speaker Change: Importantly, we continue to integrate cutting edge AI into a platform with a focus on improving performance and user experience for our clients.

Speaker Change: And optimizing I'll say that's delivery process.

Speaker Change: They used to always impactful and engaging creative is expected to become increasingly important to capturing audiences attention. This is a key component of the innovation, we're bringing to market and we've been developing and testing generative AI powered tools to optimize created and enhance performance.

Megan Clarkin: We're also innovating with AI-powered creative formats, such as shoppable videos, in-bot sponsored products, and affiliate product listing ads to bring more demand to publishers, retailers, and social platforms. Meanwhile, we've already realized significant efficiencies using Copilot for the development of our own AI system for identification of business opportunities, and we plan to roll out more AI-driven efficiency tools this year. Lastly, 2024 is expected to be a dynamic year in digital advertising, with the planned deprecation of third-party cookies on Chrome in the second half of the year. Now we've been preparing for this change for years with a comprehensive multi-pronged addressability strategy to future-proof our clients' advertising and performance. First, as you know, we've worked with Google since the very beginning of the privacy sandbox and met with them weekly, on average, over the last three years to ensure proposed solutions maintain advertising performance for Appliance and Partner. We were actively involved in the five-month testing related to cookie deprecation on 1% of Chrome's users that started in early January. And we're working tirelessly to ensure proper setup and evaluate all testing mechanisms. This testing requires a rigorous methodology and statistical significance.

Speaker Change: We're also innovating with AI powered creative formats, such as shopper the Super Bowl videos in bought sponsored products and it's totally get product listing ads to bring more demand publishers retailers and social platforms.

Speaker Change: Meanwhile, we've already realized significant efficiencies using co pilot.

Speaker Change: So development and now own AI system or identification business, a business opportunity to meet plan to roll out more I O.

Speaker Change: Efficiency tools this year.

Speaker Change: Lastly, 'twenty 'twenty four is expected to be a dynamic year in digital advertising with the plane deprecation of third party cookies on crime in the second half of the year.

Speaker Change: Now we've been preparing for this change for years with a comprehensive multi pronged addressed ability strategy.

The future proof that point advertising and performance.

Speaker Change: First as you know we've worked with Google since the very beginning of the privacy sandbox.

Speaker Change: With them weekly on average over the last three years to ensure proposed solutions maintain advertising performance.

Speaker Change: For our clients and partners.

Speaker Change: We're actively involved in the five months testing related to cookie deprecation on 1% of crumbs uses that started in early January.

Speaker Change: And we're working tirelessly to ensure proper setups and evaluate all testing mechanisms.

Speaker Change: This testing requires a rigorous methodology and statistical significance.

Megan Clarkin: We expect to deliver the results to the UK's CMA by mid-June to help determine whether third-party cookie deprecation can move forward. We'll also provide updates to the broader market along the way. Meanwhile, several ADCET players have focused their efforts solely on using a durable IV to replace third-party cookies.

Speaker Change: We expect to deliver the results to the U K CMA by mid June to help them determine when a third party cookie deprecation can move forward. We will also provide updates to the broader market along the way.

Now separately chip play as they focus their efforts solely on using a durable IBD to replace third party cookies.

Megan Clarkin: For us, this is just one part of our multi-pronged approach to secure continuity. We refer to it as our first party media network. We leverage hash identifiers, which are universal privacy-safe tools to bridge data sets from marketers and media owners across demand and supply, facilitating successful personalization and measurement. For example, when looking at signals from publishers, we have direct integrations with. We connect over 10 times more hashed email than similar alternative industry IDs that lack scale. In addition, we have integrations with about 40 customer data and data collaboration platforms to activate clients' first-party audiences. Next, and as an extension of our first-party data strategy, we're focused on helping our clients reach consumers in more closed and authenticated environments, like retailer sites and social platforms, including Facebook and Instagram. These environments facilitate first-party data matching with precision and scale.

Speaker Change: For Us. This is just one part of a multi pronged approach to secure continuity.

Speaker Change: We refer to it as our third party media network.

Speaker Change: We leverage cash identifiers, which had unit, there's still privacy sites too.

To bridge datasets from marketing and media owners across demand and supply.

Speaker Change: It was highly successful personalization of measurement.

Speaker Change: When looking at signals from publishers, we have direct integrations with we connect the 10 times more hashed emails and similar alternative industry Ids that lack scale.

Speaker Change: In addition, we have integrations with about 40 customer data and data collaboration platforms to activate clients that's partly audiences.

Speaker Change: Next and as an extension of that first party data strategy.

Speaker Change: We're focused on helping our clients reach consumers and more closed an authenticated environments like retirement side.

Speaker Change: And its social platforms, including Facebook and Instagram.

Environments facilitate first party data matching with precision and scale.

Megan Clarkin: Using best-in-class AI to marry these diverse solutions with contextual and other cookie-less signals enables us to automatically determine the optimal path for driving personalized advertising that meets our clients' performance expectations. We believe we're prepared for third-party cookie deprecation on Chrome, and we already bring performance to our clients in cookie-less environments today. We continue to expand our capabilities to drive the best outcomes for our clients without third-party identifiers. To conclude, we're proud to have been recently acknowledged or recognized as one of the hottest ad tech companies by Insider for the second year in a row. This acknowledgment reflects our commitment to staying at the forefront of our industry with the only unified AI-driven platform that directly connects advertisers with retailers and publishers to drive commerce on retailers' sites and The Open Internet. One last but important call out:

Speaker Change: Using best in class I O I to marry these two best solutions with contextual another cookie was signaled and I agree with us to automatically determine the optimal path for driving personalize advertising that meets our clients' performance expectations.

Speaker Change: We believe we prepared for third party Cookie deprecation on crime, then we already bring performance to our clients and cookie less environments today.

Speaker Change: We continue to expand their capabilities to drive the best outcomes for our clients without the tiny identified.

Speaker Change: To conclude we prepare what proud to have been recently acknowledged they were recognized as one of the hottest AD Tech company.

Speaker Change: Inside of that for the second year in a row.

Speaker Change: This acknowledgement reflects our commitment to staying at the forefront of our industry.

Speaker Change: Finally, unified AI driven platform that directly connect advertisers with retailers and publishers to drive commerce on retailer sites.

Speaker Change: And the open Internet.

Speaker Change: One last but important call out sustainability is a key focus that's pretty a and I'm pleased to report that.

Megan Clarkin: Sustainability is a key focus at Criteo, and I'm pleased to report that we're the first company in our industry to have our carbon emissions reduction targets approved by the Science-Based Targets Initiative, meaning our climate goals are aligned with the Paris Agreement. As we step into 2024, we're laser-focused on execution, and we look forward to harnessing the opportunities that lay ahead. We're confident in our strategy, and our commitment remains steadfast towards sustainable, profitable growth with a disciplined approach to capital allocation and driving shareholder value. And with that, I now want to turn it over to Sarah, who will provide details on our financial results and our outlook. Thank you, Sarah. Thank you, Megan, and good morning, everyone.

Speaker Change: We're the first company in our industry to have our carbon emissions reduction targets approved.

Speaker Change: Science based targets initiative.

Speaker Change: How climate goals are aligned with the Paris agreement.

Speaker Change: As we step into 2020 four.

Speaker Change: With a laser focus on execution and we look forward to harnessing the opportunities that lie ahead.

Speaker Change: We're confident in our strategy and our commitment remains steadfast towards sustainable profitable growth with a disciplined approach to capital allocation drive shareholder value and with that I don't Wanna Cool I'll turn it back to Sara will provide details on our financial results and outlook.

Sara: Thank you Sarah Thank you Megan and good morning, everyone. We delivered strong results in 2023 with double digit growth and margin expansion.

Sarah Simon: We delivered strong results in 2023 with double-digit growth and margin expansion. Starting with our financial highlights for 2023, revenue was $1.9 billion, and contribution x-tax grew by 11% at constant currency, reaching over $1 billion.

Sara: The thing with the financial highlights for 2023.

Sara: Revenue was up one point, sorry revenue was $1.9 billion in contribution ex Tac grew by 11% at constant currency, reaching over a billion dollars.

Sarah Simon: This is the first time in our history, and we now have more than 50% coming from new solutions. In retail media, revenue was $209 million, and contribution XTAC was $203 million, up 26% year over year, as we continue to expand with our retailers, brands, and agency partners. In marketing solutions, revenue was $1.6 billion, and contribution XTAC was $697 million, with commerce audiences up 42% at constant currency, reflecting our client's strong adoption of broader targeting solutions, including new retention strategies. We delivered an adjusted EBITDA margin of 30%, including over $70 million of annualized savings while continuing to invest for growth. We delivered free cash flow of $110 million, including a one-time payment to Camille of $43 million.

Sara: This is the first time in our history, and we now have more than 50% coming from new solutions.

Sara: In retail media revenue was $209 million contribution ex Tac was a $203 million.

Sara: 26 with that year over year, as we continue to expand with our retailers brands and agency partners.

Sara: In marketing solutions revenue was one $6 billion in contribution ex Tac with $697 million with Congress audience is up 42% at constant currency, reflecting our planned strong adoption of fluids that are targeting solution.

Sara: Including new retention strategies.

Sara: We delivered an adjusted EBITDA margin of 30%.

Sara: Including the $17 million of annualized savings, while continuing to invest for growth.

Sara: We didn't have at free cash flow of $110 million, including the one time payment to <unk> of $43 million.

Sarah Simon: This represents a conversion rate of 51% from a justed EBITDA before this payment. Our adjusted EPS was up 15% to $3.18 in 2023. Turning to our fourth quarter performance,

Sara: This represents a conversion rate of 51% from adjusted EBITDA before these payments.

Sara: Adjusted EPS was up 15% to $3 19 sites in 2023.

Sara: Turning to our fourth quarter performance.

Sarah Simon: Revenue was $566 million, and Contribution X-TAC was $316 million. This includes the year-over-year tailwinds from foreign currency of $4 million. At constant currency, Q4 contribution XTAC grew by 10% up sequentially compared to our organic growth of 8% in Q3. Our performance was driven by robust growth in retail media, up 29%. This was also driven by marketing solutions up 6% year over year with impressive growth in commerce audiences targeting up 60% more than offsetting lower retargeting down 9% year over year. These dynamics have contributed to rebalancing our top line mix with our new solutions representing 56% of our business in Q4. Turning to our business segment, retail media, revenue was $77 million, and contribution ex-tech grew 29% at constant currency to $74 million, on top of strong growth last year. Our growth was driven by continued strength in retail media on-site and new off-site campaigns. Growth from existing clients remains strong, with same retailer contribution XTAC retention at 121%. We onboarded 100 more brands in Q4 and saw continued traction with our agency partners.

Sara: Revenue was $566 million in contribution ex Tac was $316 million. This includes a year over year tailwind from foreign currency of $4 million.

Sara: At constant currency Q4 contribution ex Tac grew by 10% up sequentially compared to our organic growth of 8% in Q3.

Sara: Our performance was driven by robust growth in retail media up 29%.

Sara: This was also driven by marketing solution.

But you're right, but yeah with impressive growth in commerce audience targeting.

Sara: 60% more than offsetting lower would be targeting down 9% year over year.

Sara: Yeah.

Sara: These dynamics have contributed to rebalancing, our topline makes with our new solutions, representing 56% above business in Q4.

Sara: Turning to our business segments in retail media revenue was $77 million in contribution ex Tac grew 29% at constant currency to $74 million on top of strong growth last year.

Sara: Our growth was driven by continued strength in retail media on sites and new upside campaigns.

Sara: Growth from existing clients remained strong with same retailer contribution ex Tac retention at a high.

Sara: Hundred and 21%.

Sara: We on boarded hundreds more brands in Q4 and saw continued traction with our agency partners.

Sarah Simon: Our 2,600 global brands are prioritizing retail media as a key channel for their investments, a trend we expect to continue as first-party data becomes increasingly valuable. In marketing solutions, revenue was $455 million, and contribution from operations was $208 million, up 6% at constant currency, delivering our second consecutive quarter of growth. We had a successful holiday season around the traditional Cyber 6 peak, and we experienced continued strength in December which has carried through to the beginning of this year.

Sara: Our 2600 global brands are prioritizing retail media as a key channel for their investments a trend we expect to continue as first party data becomes increasingly valuable.

Sara: In marketing solutions revenue was $455 million and contribution ex Tac was $208 million up 6% at constant currency, making our second consecutive quarter of growth.

Sara: We had a successful holiday season around the traditional side the six peak and we experienced continued strength in December which is carried through to the beginning of this year.

Sarah Simon: We saw a sequential improvement in retail, returning to growth this quarter, while travel remained strong. We also benefited from our latest AI-driven performance optimization. We delivered exceptional growth in commerce audiences, up 60%, as more clients are embracing full-funnel audience strategies to acquire and retain customers, demonstrating that our strategy is working. Notably, we doubled our revenue associated with customer retention solutions year over year as we increasingly leverage clients' first-party data from customer data platforms and data management platforms for precise targeting. And we are seeing more clients shift spend from retargeting to this alternative tactic. However, cross-selling remains an important growth driver as 40% of our clients are now using more than one Criteo solution compared to 35% a year ago. This represents 70% of our media spend from clients that use commerce audience targeting in addition to retargeting and marketing solutions. We have also benefited from incremental third-party demand through our Commerce Grid SSP. IPOM's web revenue was up 2% this quarter.

Sara: We saw a sequential improvement in retail returning to growth this quarter, while travel remains strong.

Sara: We also benefited from our latest AI driven performance optimization.

Sara: We delivered exceptional growth in comments, what he and she is 60% as more clients that we're embracing full funnel audience strategies to acquire and retain customers.

Sara: Demonstrating that our strategy is working.

Sara: Notably we doubled our revenue associated with customer retention solutions year over year as we increasingly leverage third party data from customer data platforms and data management platform.

Sara: Precise targeting.

Sara: And we are seeing more clients shifted spend probably tell me take two different tactic.

Speaker Change: That's it.

Speaker Change: Cross selling remains an important growth driver as well keep it sounded both client and now using more than one cardio solution compared to 35% a year ago.

Speaker Change: This represents 70% of our media spend from clients that use commerce audience targeting in addition to retail chicken marketing solutions.

Speaker Change: We also benefited from incremental third party demand to all commerce, great at Chesapeake.

Speaker Change: I pulled web revenue was up 2% in this quarter.

Sarah Simon: This does not capture the contribution of our acquisition to the growth of our other solutions, including commerce audiences. We delivered an adjusted EBITDA of $139 million in Q4 2023. Non-GAAP operating expenses decreased 5% driven by our rigorous focus on cost management and efficiencies, offsetting our planned growth investment. We also benefited from lower bad debt expense due to strong cash collection.

Speaker Change: This does not capture the contribution of our acquisition to the growth of our other solutions, including commerce audiences.

Speaker Change: We delivered an adjusted EBITDA of $139 million in Q4, 'twenty two 'twenty three.

Speaker Change: non-GAAP operating expenses decreased 5% driven by a rigorous focus on cost management and efficiencies offsetting our planned growth investments.

Speaker Change: We also benefited from lower bad debt expense due to strong cash collection.

Sarah Simon: Moving down the P&L, depreciation and amortization decreased 16% in Q4 2023, and share-based compensation expense decreased 6% to $21 million, including $5 million related to Treasury shares granted to IPOMweb's founder as part of the acquisition. Our income from operations was $88 million, and our net income was $62 million in Q4 2023. Our weighted average diluted share count was 59.7 million, and this resulted in diluted earnings per share of $1.02.

Speaker Change: Moving down the P&L depreciation and amortization decreased 16% in Q4, 2023 and share based compensation expense decreased 6% to $21 million, including $5 million related to treasury shares granted to iPhone, what founder and policy.

Speaker Change: <unk>.

Speaker Change: Our income from operations was $88 million and our net income was $62 million in Q4 2023.

Speaker Change: Weighted average diluted share count was $59 7 million.

Speaker Change: This resulted in diluted earnings per share of $1 two sets.

Sarah Simon: Our adjusted diluted EPS was $1.52 in Q4 2023, up 81% year over year. We cancelled 2.1 million shares in 2023. We benefit from a strong financial position with solid cash generation and no long-term debt. We had about $837 million in total liquidity as of the end of December, which gave us significant financial flexibility to execute our growth and capital allocation strategy. Our commitment to diversity, equity, and inclusion, and a sustainable planet are core to that strategy, as demonstrated by our existing $450 million five-year revolving credit facility being recently converted to a sustainability-linked loan. Thus, certain terms and conditions of the credit facility are now linked to certain sustainability targets to increase the representation of women in tech roles and reductions in our GHG emissions. We delivered free cash flow of $142 million in Q4, an increase of 28% year-over-year.

Our adjusted diluted EPS was a dollar and 52 cents in Q4 2023.

Speaker Change: 81% year over year.

Speaker Change: Cancel $2.1 million million shares in 2023.

Speaker Change: We benefit from a strong financial position with solid cash generation and no long term debt, we had about $837 million in total liquidity as of the end of December which gave us significant financial flexibility to <unk>.

Speaker Change: Secure our growth and capital allocation strategy.

Speaker Change: Our commitment to diversity equity and inclusion and a sustainable plan that are core to that strategy as demonstrated by our existing 450 million dollar five year revolving credit facility.

Recently converted to a sustainability linked loan.

Speaker Change: So that's in terms and conditions of the credit facility and now linked to such an sustainability target to increase the representation of women in tech roles.

And reductions in all G H G emissions.

Speaker Change: We delivered free cash flow of $142 million in Q4, an increase of 28% year over year.

Sarah Simon: Our free cash flow amounted to $110 million in 2023 after the Canil payment of $43 million and $45 million for restructuring and integration costs. We have a disciplined and balanced capital allocation strategy. Our priorities are to invest in high ROI, organic investment, and value-enhancing acquisitions and to return capital to shareholders via our Share Buy Back program. In 2023, we deployed $125 million of capital, or 114% of our free cash flow for the year, for share repurchases. This included 4.3 million shares repurchased at an average cost of $29.30 per share.

Speaker Change: Our free cash flow amounted to $110 million in 'twenty, two 'twenty three after the payment of $43 million and $45 million for restructuring and integration costs.

Speaker Change: We have a disciplined and balanced capital allocation strategy, our priorities are to invest in high R. O y organic investment and value enhancing acquisitions and to return capital to shareholders via our share buyback program.

Speaker Change: In 2023, we deployed $125 million of capital or hunker down 14% of our free cash flow for the year the share repurchases.

Speaker Change: This included $4 3 million shares repurchased at an average cost of $29.70 per share.

Sarah Simon: As of December 31, 2023, there was $118 million remaining under the current Authorized Share Repurchase Program. In February, our Board of Directors authorized an additional $150 million to be added to our existing share repurchase program. This demonstrates our confidence in our business strategy, financial strength, and our ongoing commitment to enhance shareholder value. Turning to our financial outlook, which reflects our expectations as of today, February 7th, 2024. Our Outlook assumes third-party cookie deprecation on Chrome in the second half of the year.

Speaker Change: As of December 31st 2023 that was $118 million remaining under the current authorized share repurchase program.

Speaker Change: In February our board of directors authorized an additional $150 million to be added to our existing share repurchase program.

Speaker Change: This demonstrates our confidence in our business strategy financial strength, and our ongoing commitment to enhance shareholder value.

Speaker Change: Turning to our financial outlook, which reflects our research, which reflects our expected expectations as of today February seven 2024.

Speaker Change: Our outlook assumes third party cookie deprecation on crime in the second half of it yet.

Sarah Simon: For 2024, we expect Contribution X Tech to grow mid single-digit year over year at constant currency with growth in each of our segments. In retail media, we expect to continue to grow rapidly from a scaled $200 million plus. Bye We expect our activated media spend to grow above 30% year-over-year, faster than GroupM's estimated market growth of 12%, as we anticipate further share gains. We expect this will translate into contribution extent growth of approximately 20% at constant current, in line with consensus expectations. Our 2024 guidance includes take rate volume-based fees for all our clients, which is effectively a percentage of their media spend. It also includes licensing and services revenue, which represents approximately 20% of our total expected retail media revenue. Overall, 80% of our retail media contribution x-tax is derived from retailers that are driving more than half of the demand themselves and are limited in their ability to do more.

Speaker Change: The 'twenty 'twenty four we expect contribution ex Tac to grow mid single digit year over year at constant currency with growth in each of both segments.

Speaker Change: Yeah.

Speaker Change: And retail media, we expect to continue to go grow rapidly from a scaled 200 million dollar plus.

Speaker Change: Space.

Speaker Change: We expect our Asia activated media spend to grow about 30% year over year.

Speaker Change: Did include patents estimated market growth of 12%.

Speaker Change: We anticipate further share gains.

Speaker Change: We expect this will trend right into contribution ex Tac growth of approximately 20% at constant currency.

Speaker Change: In line with consensus expectations.

Speaker Change: Oh 2024 guidance increase take rate bogging base fees for all our clients, which is effectively a percentage of that media spend.

Speaker Change: It also includes licensing and services revenue.

Speaker Change: At present, approximately 20% of total expected retail media revenue.

Speaker Change: Oh, there's a rule 80% of our Rep retail media contribution ex Tac is derived from retailers that are driving more than half of the demand themselves and unlimited and memorabilia teach do more.

Sarah Simon: As previously communicated, our 2024 guidance reflects our largest client moving some of their demand to a direct sales model as we progress through the year. However, we expect this to be more than offset by the growing momentum that we are seeing across the rest of our client base. Over time, we have an opportunity to increase the share of Criteo's sales demand as we tap into national media budgets from our agency partners and brands and scale cross-retailer and full-funnel campaigns. In addition, we expect to drive more and more demand to midsize and smaller retailers.

Speaker Change: As previously communicated our 'twenty 'twenty four guidance reflects our largest client meeting some of that demand to a direct sales model as we progressed through the year.

Speaker Change: We expect this to be more than offset by the growing momentum, but we are seeing across the rest of our fine right.

Speaker Change: Over time, we have an opportunity to opportunity to increase the share of curriculum. So to demand as we tap into national media budget from our agency partners and brands and scale cross retailer and full funnel campaigns.

Speaker Change: In addition, we expect to drive more and more demand for midsize and smaller retailers.

Sarah Simon: Our strategy is focused on unifying the retail media ecosystem, and we believe new on-site, ad formats, off-site, and omnichannel all present exciting opportunities to drive continued strong growth going forward. We expect ContributionX Tech to grow low single-digit for both marketing solutions and iPhone web. This reflects continued traction in AI-powered commerce audiences and for our Commerce Grid SSP. Now, I'd like to address our current assumptions as it relates to the potential loss of signal in chromes that impact retargeting.

Speaker Change: Our strategy is focused on unifying the retail media ecosystem and we've been the new onsite.

Speaker Change: Ads format, Offsite and Omnichannel, all present exciting opportunities to drive continued strong growth going forward.

Speaker Change: Yeah.

Speaker Change: We expect contribution ex Tac to grow low single digit for both marketing solutions and iPhone wet.

Speaker Change: This reflects continued traction in AI powered commerce audiences and for all commerce great FSP.

Speaker Change: Now I'd like to address our current assumptions as it relates to the potential loss of signal in crime the impacts we talking team.

Sarah Simon: Our 2024 guidance assumes that Google starts phasing out third-party cookies in the latter half of Q3, resulting in an expected signal loss impact of approximately $30 million to $40 million in the second half of the year. This assumption is consistent with our previously communicated estimated impact of signal loss on Chrome, with the remainder of the signal loss impact expected in 2025. As previously communicated, we would expect we would retain approximately 60% of our retargeting contribution at stack on Chrome post-third-party cookie deprecation.

Speaker Change: 'twenty 'twenty full guidance assumes that Google stopped pacing out third party cookies in the lots of follow up with Q3, resulting in an expected signal loss impact.

Speaker Change: For me $30 million to $14 million in the second half of it yet.

Speaker Change: This is something is consistent with our previously communicated estimate could impact the signal loss on crime with the remainder of the signal loss impact, but do you think 2025.

Speaker Change: As previously communicated we would expect we would retain approximately 60% above we targeting contribution ex Tac on crime Post third party cookie deprecation.

Sarah Simon: We intend to continue to update our assumptions as we move throughout the year. As part of our transformation, we are disciplined in strategically allocating our resources to higher growth areas while enabling productivity and cost efficiency. In 2024, we intend to continue to right-size our organization and optimize our operating model. Overall, we anticipate an adjusted EBITDA margin of approximately 29% to 30% for 2024, flat year-over-year. This includes continued rigor on cost efficiencies to offset wage inflation while continuing investment in our multi-pronged addressability strategy, gain retail media capabilities, and AI-driven productivity tools. We expect a normalized tax rate of 28% to 30%, and we expect CapEx to be down compared to last year or slightly below $100 million, and we expect free cash flow conversion rates of about 45% of adjusted EBITDA before any non-recurring items. For modeling purposes, we assume a flat number of shares are outstanding in 2024. We're off to a solid start in January.

Speaker Change: We intend to continue to update our assumptions as we move throughout the year.

Speaker Change: As part of our transformation, we are disciplined in strategically allocating our resources to higher growth areas widen Nathan.

Speaker Change: All the activity and cost efficiencies.

Speaker Change: In 'twenty 'twenty four we intend to continue to rightsize the organization.

Speaker Change: Optimizing our operating model.

Speaker Change: Overall, we anticipate an adjusted EBITDA margin of approximately 29% to 30% of 'twenty 'twenty four flat you I forget this.

Speaker Change: This includes continued rig up on cost efficiencies to offset offset wage inflation, while continuing investment in our multi pronged address it better T strategy, gaining retail media capabilities and AI driven productivity tools.

Speaker Change: We.

Speaker Change: Back to normalized tax rate of 28% to 30% and we expect capex to be down compared to last year or slightly below 100 million to others and we expect free cash flow conversion rate of about 45% of adjusted EBITDA before any nonrecurring items.

Speaker Change: For modeling purposes, we assume a flat number of shares outstanding in 2024.

We were off to a solid start in January the Q1, 'twenty 'twenty four we expect contribution ex Tac of $240 million to $204 million to $7 million growing by 10% to 12% at constant currency.

Sarah Simon: For Q1 2024, we expect contribution x-tax of $240 million to $247 million, growing by 10% to 12% at constant current. We estimate 4X changes to drive a negative year-over-year impact of about $1 million to $3 million on contribution at TAP in Q1. And we expect adjusted EBITDA between $50 million and $54 million, reflecting year-over-year margin improvement in a seasonally low quarter.

Speaker Change: We estimate forex changes to drive the negative.

Speaker Change: The impact of about $1 million to $3 million on contribution ex Tac in Q1.

Speaker Change: And we expect adjusted EBITDA between $50 million and $54 million, reflecting yeah, but I think he had margin improvement in a seasonally low quarter.

Operator: As a reminder, comparatives to the prior year get more difficult as we progress through the year. Lastly, we are contemplating updating our segment reporting structure beginning in Q1 2024. This follows the completion of the integration of our IPOM Web acquisition, which has contributed to the launch of several products and accelerated our commerce media platform more broadly. We intend to provide you with additional information regarding this change and a recast of historical financial information reflecting the segment change in the near future. In closing, we believe we are well positioned to deliver on our plans for growth, resilient performance, healthy profitability, and strong cash generation to drive shareholder value in 2024 and beyond. And with that, I will open up the floor to questions. To ask a question, please press star, then 1. If you are using a speakerphone, please pick up your handset before pressing the key.

Speaker Change: As a reminder, comparative to the prior year get more difficult as we progressed through the year.

Speaker Change: Lastly, we are concentrating updating our segment reporting structure beginning in Q1 'twenty 'twenty four is part of the completion of the integration of iPhone wipe acquisition, which have contributed to the launch of several products and accelerated all commerce media platform more broadly.

Speaker Change: We intend to provide you with additional information regarding this change and a recast of historical financial information, reflecting this segment change in the near future.

Speaker Change: In closing, we believe we are well positioned to deliver on our plans for growth resilient performance healthy profitability and strong cash generation to drive shareholder value in 2024 and beyond.

Speaker Change: With that I would hope not for questions.

Speaker Change: To ask a question. Please press Star then one.

Speaker Change: People are using a speakerphone please pick up your handset before pressing the keys to withdraw your question. Please press Star then two.

Operator: To withdraw your question, please press star then 2. At this time, we will pause to assemble our roster. The first question comes from Justin Patterson with KeyBank. Please go ahead. Great, thank you very much and good morning, two if I can.

Speaker Change: At this time, we will pause to assemble our roster.

Speaker Change: The first question comes from Justin Patterson with Keybanc. Please go ahead.

Justin Patterson: Great. Thank you very much and good morning, two if I can first Sara I was hoping you could give us a little more detail about some of the assumptions that went into that 60% retention rate for targeting Ah what have you been seeing so far today all of the initial deprecation loss Earth signals.

Sarah Simon: First, Sarah, I was hoping you could give us a little more detail about just some of the assumptions that went into that 60% retention rate for retargeting. What have you been seeing so far today with respect to the initial deprecation loss or signal loss from deprecation, and just how is that flowing into that estimate? And then Megan, I just wanted to go back to a comment you made earlier just around opportunities to expand in social environments. Sounds like you've seen really good traction with Facebook so far. What do you think really needs to happen to just broaden that opportunity set? Is that something that requires things like the Digital Markets Act in the EU, or is that something you can do without regulation? Thanks so much.

Sara: From deprecation and just how is that flowing into that estimate.

Sara: Megan I just wanted to go back to a comment you made earlier just around the opportunities to expand and social environments sounds like you've seen really good traction with Facebook, so far but what do you think really needs to happen to just broaden that opportunity set is that something that requires things like the digital markets Act in the EU or is that something you can do without regulate.

Speaker Change: Thanks, so much.

Sarah Simon: I'll start with the third-party cookie impact that we've assumed. So effectively, we have, it's really very consistent with what we've already shown to all of you. But our anticipation is that we will have, I mean, if you assume, you know, let's say about a billion dollars in CXT revenue for 2023, and we expect to grow that in the mid single digits in 2024. So you can assume that kind of move up to around $75 million. And you assume we tell things about 45% of the business in 2024. So, you know, just under $500 million.

Speaker Change: I'll just I'll start with the third party.

Speaker Change: Cookie impact that we've assumed so effectively we have it it's really very consistent with what we've already starting to it to all of you, but our anticipation is that we will have I mean, if you assume let's say about a billion dollars in CX chief of 2023.

Speaker Change: We expect to grow that mid single digits in 2020 full so you can assume that kind of moves up by around $5 million and you assume retail things about 45% of the business in 2024. So you know just on the $500 million.

Sarah Simon: And then we're assuming that there's no impact for 65% of the year, or two-thirds of the year. And the cookie deprecation will start in late August to September timeframe. So less than 200 million are being impacted. And only Chrome is impacted.

Speaker Change: And then we're assuming that there's no impact to 65% of your about two thirds of the yeah and the Cookie deprecation will start in late August to September timeframe.

Speaker Change: In less than 200 million being impacted.

Speaker Change: And only crime is impacted so that's about 50% about traffic. So you can assume that's just shy of $100 million.

Operator: So that's about 50% of our traffic. So you can assume that it's just shy of $100 million. And we would retain 60% of that, so we'd lose, and we said $30 to $40 million. So that's our rationale for our range of $30 to $40 million, and as we said, we will continue to update this assumption as we go through the testing and as we see the timing. I can hand over to Todd, who can talk about the second part of your question, or Megan, who can talk about the second part of your question. I'll take... Hi Justin. Good to see you again.

Speaker Change: And we would retain 60% of that so we can do is and we said $30 million to $40 million. So we would keep.

Speaker Change: Keep the remainder so that's all rationale for a range of $30 million to $40 million and as we said we will continue to update this assumption as we go through the testing and as we see the timing I can hand over to tell US who can talk on the second part well make them to open the second part of your question I'll take them.

Tell US: Hi, Justin Thanks.

Speaker Change: Great question on in terms of the relationship was was with Midtown with with Facebook and Instagram.

Megan Clarkin: Thanks. A great question. So, in terms of the relationship with META, with Facebook, and Instagram, these are supply relationships, and these are great opportunities for us to, A, expand the supply that we have access to with META, which, as you remember, sort of came about earlier last year. So this has been, over time, us building tech that enables us to integrate and utilize META's environment. We're also driving that capability into TikTok, for instance, or other social platforms where we gain access to audiences. The objective, of course, is to drive value for those social environments by selling their inventory, but also drive value to the advertisers that want to reach beyond the open internet into these very big social platforms.

These are supply relationships and.

Tell US: These are these are great opportunities for us to expand the supply that we have access to was with meta which as you remember instead.

Tell US: So it came about Italy of last year. So this is being you know over time I was building tech that enables us to integrate <unk> and.

Tell US: And utilize our metals environment.

Tell US: We're also driving that capability into tick tock for instance, or other social platforms, when we gain access to.

Tell US: Two audiences. The objective of course is to drive value for those social environment says is selling their inventory, but also drive value to the advertisers that want to reach E. On the open internet into these very big social social platforms, the third bench.

Megan Clarkin: The third benefit to us, of course, is that gaining access to the billions of users that they have really just strengthens the pull that we have available to us as part of our addressability strategy. So, for as long as we have access to those audiences and we're driving commerce interactions between them and the advertisers that are advertising on them, then this is just a supply-demand scale game that we'll continue to be aggressive with and push forward. Thank you. Okay, great. Our next question comes from Egal Aronian with Citigroup. Please go ahead. Hey, thanks. Good morning, everyone.

Tell US: But to US of course is that gaining access to the billions of users that they had really just strengthens the poll that we have available to us as part of that I'll address stability strategy. So for as long as we have access to those audiences and really driving commerce interactions.

And then and the advertisers that are advertising on them and this is just a supply demand scheduled game that we will continue to be aggressive weapon and push forward.

Speaker Change: Thank you.

Speaker Change: Okay great.

Citigroup: Our next question comes from a call Iranian with Citigroup. Please go ahead.

Citigroup: Okay.

Iranian: Hey, Thanks. Good morning, everyone also two for me.

Operator: Also, too, for me, and also starting with cookies, just, You know, we're just a month in, so I know it's early, but, you know, if you could share some of the learnings from the 1% deprecation that we've seen so far, given, you know, your kind of close relationship with the privacy sandbox and, you know, how that might translate through the course of the year, and What needs to happen to make sure that we kind of go along as expected and we're retaining 60% of the signal with cookies, and it's not something beyond your expectations? And then given the strength in commerce audiences that we've seen throughout the year and kind of been the leader of growth, and maybe just parse into some of that a little bit more, how much of that is coming from the shift away from retargeting? How much is outside of that or anything else you can kind of share on what you're seeing there and expectations for next year? Yeah, thanks, Higal.

Iranian: And also starting with cookies.

Iranian: You know where.

Iranian: Just a month and so I know, it's early but if you could share some of.

Iranian: The learnings from the 1% application that we've seen so far given your close relationship with the privacy sandbox and how that might translate through through the course of the year.

Iranian: Yeah.

Iranian: What do you think advertisers do you think they're there they're ready or positions here, what what needs to happen to make sure that.

Iranian: We kind of go along as expected and where you're retaining 60% of the signal with cookies and its not something beyond your expectations and then given the strength in commerce audiences.

Iranian: But we've seen throughout the year.

Iranian: Kind of been the leader of growth or maybe just parse into some of that a little bit more how much of that is coming from the shift away from re targeting how much is outside of that or anything else you can kind of share on what you're seeing there and the expectations into next year.

Speaker Change: Yeah, It's nice to go good great questions I'll, just kick us off and then the sort of the star of the show here in June so there won't be the same.

Megan Clarkin: Good, great questions. I'll just kick us off, and then the sort of star of the show here in terms of the ones with any questions is Todd, so I'll shout that out quickly and pass it across to him. But I do want to sort of comment on the readiness of publishers towards cookie deprecation. You know, there's mixed messages. I think what you'll see, and what you have seen, it's been printed a lot, is that there is at least now a sort of awareness and a movement towards trying to solve this problem. Our job is to help publishers to get there through both the information that we pass to them as we get closer to this and understand the impact on them, and also through our relationships with them directly. So we're staying very close to that.

Speaker Change: Question is taught so quickly.

Speaker Change: Quickly and possibly across them.

Speaker Change: I I didn't want us to come in and tell them the readiness of our.

Speaker Change: Publishes to towards Cookie deprecation, yeah, there's mixed but I think what youll see and what you have seen it in print.

Speaker Change: Printed a lot is that there is at least now as sort of an awareness and a movement towards trying to solve for this problem. Our job is to help publishers to get there through both the information that we passed to them as we get closer to this and understand the impact on them.

Speaker Change: And also with our relationships with them directly.

Speaker Change: So where we're staying very close to that we feel very good about the three pronged approach that we have to this and remember you addressed the ability comes in different.

Megan Clarkin: We feel very good about the three-pronged approach that we have to this. And remember, you know, addressability comes in different flavors depending on what the objective of the advertiser is. If they want to reach a broader audience, then what's going on with cookie deprecation becomes, you know, less problematic. But if they want to get to a one-to-one audience, and they want to get to that person multiple times, then that's what this is all leaning into solving for that problem. But also with the mind to bring continuity to their business and also to the brands, advertisers, and agencies along the way. So all of these things are wrapped into a solution for this. It's complex, but as you noted, we're right in the middle of it, and we know a lot. So, let me pass this on to Tyler so he can share some of that. Thanks, Megan. Yigal, nice to hear your voice.

Speaker Change: But depending on what the objective of the advertiser is if they want to reach a broader audience than whats going home with cookie deprecation becomes.

Speaker Change: No less problematic if they want to get to one to one audience and they want to get to that touched multiple times and that's what this.

This is all leaning in to solve for that problem, but also with the with the mindset, bringing them continuity to the business and also to the brands advertisers the agencies along the way, but all of these things are wrapped into a solving for verses, it's complex, but actually United We're right smack in the center.

Speaker Change: And and we know a lot so let me pass it across to mitigate some of that.

Mitigate: Thank you. So I guess you all nice to hear your voice on the 1%.

Todd: On the 1%, I just wanted to reinforce that, technically, we've been getting ready for this testing period for well over a year, and the objective is for us to compare and contrast advertiser ROAS expectations at constant spend with the impact on publisher CPMs. I think we're probably the only company that is deploying that methodology, which shows the cause and effect of ad dollars on publishers' CPMs. With that in mind, the readiness that we're preparing for the test is quite technical.

Mitigate: Just wanted to reinforce that we've been getting ready for this testing period for well over a year technically.

Speaker Change: And the objective is for us to compare and contrast advertiser rollouts expectations at constant stunned with the impact of publishers C. P. M. I think we're probably the only company that is deploying that methodology what shows the cause and effect of the AD dollar.

Speaker Change: Publishers EPS with that the readiness that we're preparing for the test is quite technical it involves all pipelines, including dedicated bidding model new infrastructure.

Todd: It involves full pipelines, including dedicated bidding models, new infrastructure, an entirely different strategy for shopper behavior collection, storage, and adapting to the interest group approach of protected audience and privacy sandbox, and so forth. What we're doing now is getting ready for, using all those things, getting ready for a stable testing period, wherein we will report the relationship between ROAS and publisher CPM. And in that process, we will be providing feedback consistently to both the CMA and to Google so that any improvements to the API, which will drive performance in that relationship, are realized. So it's an accelerated process today, given all of the excitement and noise about the testing period. And we're right on schedule.

Speaker Change: An entirely different strategy for shopper behavior collection storage adapting to the interest group approach of protected audience and privacy sandbox and so forth.

Speaker Change: So what we're doing now is getting ready for using all of those things getting ready for a stable testing period, wherein we will report the relationship between ROE <expletive> and publishers E. P M and in that we will be providing feedback consistently to both the CMA and to glu.

Speaker Change: Oh, so that any improvements to the API, which will drive performance in that relationship or realized so it's a very it's an accelerated process today, given all of the excitement and noise about the testing period and we're right on schedule and will report results just as soon as we have them.

Sarah Simon: We'll report results just as soon as we have them to report. And I'll just take on the other question you had on commerce audience. So we're clearly thrilled with 60% growth for Q4 and 42% for the year. Approximately half, or about $10 million, of the decline in retargeting in Q4 was a switch over to commerce audience.

To report.

Speaker Change: And I'll just take hold and the other question you had on comments audience by way of training to build 60% growth for Q4 and up 42% sports would be yeah.

Speaker Change: Approximately half or about $10 million of the decline in retail demand in Q4 was a switch over to commerce audience, but more broadly I'm Columbus audience is.

Sarah Simon: But more broadly, the commerce audience is benefiting from our AI. It's benefiting from the multiple addressability solutions with contextual and other signals. And 70% of our revenue in marketing solutions now covers across both retargeting and commerce audience solutions for our clients, so we feel good about this, and we do continue to expect a shift from retargeting to commerce audience more broadly. And for our clients, we look to have the always-on advertising across all the methods of retaining and acquiring new clients, and that will also include with matter as well. Thank you so much; that was very helpful.

Speaker Change: Benefiting from AI.

Speaker Change: Benefiting from the multiple addressed by the T solutions with contextual when other kooky, let's take notes and 70% of our revenue and marketing solutions now covers a cross marketing, both we talked heat and commerce audience solutions for our clients. So.

Speaker Change: We feel good about it and we do continue to expect a shift from Tel Aviv team to komatsu audience more broadly and for our clients. We look to have the always on advertising across all the methods of retaining and acquiring new clients and that would also include with matter as well.

Speaker Change: Okay.

Speaker Change: Thank you so much that's very helpful.

Operator: Our next question comes from Richard Kramer with R&J Research. Please go ahead. Thanks very much. One for each of you. Try to make it quick.

Speaker Change: Our next question comes from Richard Kramer with Arete.

Richard Kramer: Research. Please go ahead.

Richard Kramer: Thanks, very much to one one for each of you try to make it quick Megan you mentioned the material scale edge and address ability in a market, where obviously signal was going to get more scarce. Do you think you can get a material increase in your market share of gross media spend maybe in some areas. For example, C. T V where were curtailed hasn't traditionally played Todd you help.

Megan Clarkin: Megan, you mentioned the material scale edge and addressability in a market where, obviously, signal is going to get more scarce. Do you think you can get a material increase in your market share of gross media spend, maybe in some areas, for example, CTV, where Criteo hasn't traditionally played? Todd, you helpfully laid out in your blog post the timelines for this initial wave of privacy sandbox testing. And obviously, there were a lot of concerns expressed by IAB Tech Lab. How do you help marketers with their lack of preparedness without scaling up headcount to support them with managed services and so forth? And lastly, Sarah, were there any one-offs in the take rates of marketing solutions? For example, Criteo is getting paid by Google to test its Privacy Sandbox.

Richard Kramer: He laid out on your blog posts the timelines for this initial wave of privacy sandbox testing and obviously there were a lot of concerns expressed by all you'd be tech lab.

Richard Kramer: How do you help marketers with the lack of preparedness without scaling up our head count to support them with managed services and so forth and lastly, Sarah were there any one off in this and in the take rates of marketing solutions. For example, curtailed getting paid by Google to test privacy sandbox anything else that explains that.

Todd: Anything else that explains that big effective take rate jump? Thanks. Hey, Richard.

Richard Kramer: Effective take rate jumped thanks.

Sarah: Hey, Richard just great.

Sarah Simon: Great. I think we've got these. Let me take the first one.

Richard Kramer: Great I think we've got base with maybe I'll take the first one oh.

Megan Clarkin: Certainly, in terms of scale driving our ability to grow share, that's what we hope to do. I mean, one of the underlying promises of the strategy is to extend towards allocation of audiences across all channels as opposed to just being limited to retargeting. There's a much, much, much bigger marketplace for that than there has ever been for retargeting. Now, that's not to say retargeting is not important.

Richard Kramer: Suddenly in terms of scale driving are driving our ability to grow share is is what we have today I mean, it's one of the.

Richard Kramer: Underlying our promises that the strategy is to extend seaborne allocation of audiences across all channels as opposed to just being limited to re targeting.

Richard Kramer: It's a much much much bigger market place for that.

Richard Kramer: It has everything for me talking right now that's not to say retired in Dayton is not important. It is an important tactic as you know in terms of bottom of the funnel, but that strategy has enabled our clients to be attitude type campaigns and shifts during flight ops.

Megan Clarkin: It is an important tactic, as you know, in terms of the bottom of the funnel. Our strategy has enabled our clients to be able to take campaigns and shift them during flight up and down the funnel in terms of tactics, but also across formats and across channels as well. CCB is a great place to talk about this.

Richard Kramer: And down the funnel intensive tactics, but also across all formats and across.

Richard Kramer: Channels as well.

Richard Kramer: D is a you know it is a.

Richard Kramer: And it's a great place to talk about it. It is an environment that is not a susceptible to third party cookie deprecation, but it is an environment, which you don't hear of anyone who is sitting in front of.

Megan Clarkin: It is an environment that is not susceptible to third-party cookie deprecation, but it is an environment in which you don't necessarily know who's sitting in front of the screen if it is a TV screen at home. It's slowly becoming more programmatic, but that's not where it started. From a retail media perspective, it's a little ways to go until it becomes a true retail media proposition, but in terms of targeting and finding the allocation of audiences in that environment, yes, it's an opportunity. For us, what we have is an addressability capability with a differentiator of commerce, a differentiator of knowing where shoppers are, which is what nobody else has, and so for us, this is what's driving the strategy to, over time, of course, make what we're doing in the middle and upper funnel so much larger.

Richard Kramer: The screening is it is a TV screen aren't high minutes.

Richard Kramer: Slowly, becoming more programmatic, but that's not where it started and from our retail media perspective, it's a little ways to go until it becomes the spring retail media proposition, but in terms of targeting and finding allocation of audience development environment, Yes, It's a it's an opportunity for us.

Richard Kramer: What we have is dress ability capability with a differentiator of comments a differentiator of knowing where shoppers are which is where nobody else has and so for us. This is what's driving this strategy to either time course, Mike what we're doing in the middle of an Apple funnel.

And much larger.

Megan Clarkin: I can, I can talk about the, Richard, I can talk about the allocation, the resource allocation. I think what's important to note there is we've been working, you know, on cookie loss and signal and deprecation since 2017. And so the same teams that were working on the problem from the start have only accelerated based on what we learned and what we accomplished to protect our clients from that signal loss.

Speaker Change: I can I can talk about the Richard I can talk about the about the allocation of the resource allocation I think.

What's important to note. There is we've been working on cookie loss in signal deprecation since 2017.

Speaker Change: And so the same teams that were working on the problem from the start have only accelerated based on what we learned and what we accomplish.

Speaker Change: To protect our clients from from that signal loss I look at it also given that we have those teams in place and they have great expertise I look at the opportunity for us to build more quickly on.

Todd: And I look at it also, given that we have those teams in place, and they have great expertise. I see the opportunity for us to build more quickly on what has been learned already and capture more market share on the other side of cookie deprecation because we've already been there working on the problem. So, we look at the work done on the privacy sandbox as being portable to other interest group creation that uses our unique commerce assets. Whether it goes to CTV or another channel, we're sort of agnostic as long as it performs for clients and we have the people in place to do this work, and they're doing it already. And just to address your retargeting comments, there is no one-timer in that.

Speaker Change: On what has been learned already and capture more market on the other side of Cookie deprecation, because we've already been there working the problem. So we will get their work done privacy sandbox as being portable to other interest group creation that uses our unique commerce assets, whether it goes with D T V or another.

Speaker Change: Channel and we're sort of agnostic to as long as it performs for our clients and we have the people in place to do this work and they're doing it already.

Speaker Change: And just to address you'll be talking to you can comment there is no one timer in that the benefit is a strong Q4 and the holiday season.

Sarah Simon: The benefit is a strong Q4 holiday season, along with our AI performance engine continuing to drive precision targeting across our campaign span, and also our ability to find signals across inventory, some of which has been at a lower CPM. So I would say all the big investments we've made in AI are really delivering for us on retargeting and across our marketing solutions. OK. Great. Thanks.

Speaker Change: Along with AI performance engine, continuing to drive precision focusing across all campaign spend and also us our ability to find signals in across inventory, which some of which has been at a lot of the C. P. M.

Speaker Change: I would say, it's all the all the investments we've made in I O N E delivering for us on the retail casinos across a multi institution space.

Speaker Change: Okay, great. Thanks, very clear.

Operator: Very clear. Our next question comes from Mark and Zuka Tovich with Benchmark Company. Please go ahead.

Our next question comes from Mark Zucker Tobin with Benchmark company. Please go ahead.

Megan Clarkin: Thank you. Good morning, Megan, Sarah, and Todd. Three, I think, rather quick ones for me.

Speaker Change: Thank you good morning, I guess here on slide.

Speaker Change: Three I think rather quick ones for me.

Sarah Simon: First one, just on the social user addressability, I'm just curious if you have a sense yet of what that may contribute to your ongoing growth may be more near-term in 24, and perhaps looking at this indirectly, of course, from the buy side of the equation. And the second question. Sarah, I was just curious what your sort of assumptions were for the 20% retail media growth expectation, just trying to get a sense of the conservatism in that number. And then lastly, just on the retail media take rate dynamic. I'd be curious, you know, as you think about the next 12 months, sort of what, uh... You know what the, I guess the dynamics are there and, specifically, around off-site, sort of how off-site is impacting, perhaps take a great, that'd be helpful. Yeah, hey Mark.

Speaker Change: First one just on the social user address ability of just curious if you have a sense yet of what that may contribute to.

Speaker Change: Your own growing growth, maybe more near term in 'twenty four.

Speaker Change: And perhaps looking.

Speaker Change: We're looking at this indirectly of course from the buy side.

Speaker Change: And the second question.

Speaker Change: Oh sure I was just curious what your.

Speaker Change: Sort of assumptions were for the 20% retail media.

Speaker Change: Growth expectation I'm, just trying to get a sense of the conservatism in that number and then lastly, just on retail media take rate dynamics.

Speaker Change: I'm curious.

Speaker Change: As you think about the next 12 months sort of what are you.

Speaker Change: You know what the I guess the dynamics are there and specifically around offsite sort of how offsite is impacting.

Speaker Change: Perhaps take rate that'd be helpful. Thanks.

Yeah, Hi, Mark.

Megan Clarkin: I'll start with the question about the social environment and its relationship to addressability. What we have there is just... access, I guess the billions of IDs to be able to match to. So if you think about, you know, match rates for the open internet, one of the issues that publishers have today, as they get themselves ready for a cookie deportation, is to have logged-in environments or environments where they can pass an ID to you, whether that be a ham, a hashed email address, or an actual ID, just to be able to make that match so that, you know, innocently, you're And not only can you make a more precise match, but you can follow that up with really solid measurements for the brand, for the advertiser who's spending their money with you.

Speaker Change: I'll I'll I'll start with the question about the social.

Speaker Change: Environment and its relationship to ensure stability.

Speaker Change: What we have there is just that.

Mark: I guess, the billions of IV to be able to match too. So if you think about match rates for the open Internet one of the issues that publishes that today as they get themselves ready for a cookie that protection is to have loved it environments are environments, where they can pass them.

Mark: N D G whether that'd be a here in Manhattan email address or an actual I think just to be able to make that match. So that you know innocently youre just getting to the right person at the right place right time right advice.

Mark: And what we like about social environments is that they have a they are long term environments.

Mark: Not only can you make a more precise match, but you can you can follow that up with a really.

Mark: Really solid measurements for the for the brands so the advertising spend.

Mark: Spending their money with you.

Mark: And for US It has a it has a an added benefit that the built in.

Megan Clarkin: For us, it has the added benefit that the billions of IDs that come with that relationship just give us another massive scaled set of addressability capability to include in our three-pronged approach. So as we get to a point where, you know, signals, in particular, just third-party cookie signals on Chrome, because that's what we're looking at, are taken away, then the ability to fill in that gap by using other signals that we have access to, and again, this adds billions just makes our ability to provide continuity to our clients possible, and that's what that brings to us. So that was that piece.

Mark: You know I vs that come with that relationship just gives us another massive.

Mark: Massive scales.

Mark: It is addressing ability capability.

Mark: Included in that three pronged approach, so as we get to a point where.

Mark: You know what it signals.

Mark: Just just third party cookies signals on crime, because that's what we're looking at taken away and the ability to fill in that debt.

Mark: By using other signals that we have access to and again this adds billions.

Mark: Just makes our ability to provide continuity to our clients.

Mark: Uh huh.

Mark: Paul possible and that's that's that's what that.

Mark: Brings to us.

Mark: So that was that piece, yeah, I can I can address the retail doesn't come out yet right right.

Sarah Simon: Yeah, I can address it. For retail, we've come up with a growth rate. So we're assuming a 20% growth rate. And as we communicated in Q3, that does include the expectation of a change to our largest client contract, which we did renew on a multi-year basis. And for competitive reasons, we're not going to comment on individual customers.

But yeah, we're assuming 20% growth rate and as we communicated in Q3, but that does include the expectation of a change to our largest client contract, which we did renew on a multi year basis.

Mark: Competitive reasons, we're not going to comment on individual customers. However, what I would say is our expectation is gross media spend will grow around 30% and we're taking share within the sort of our expectation of 30% that is kind of a 12% expectation from the market.

Sarah Simon: However, what I would say is that our expectation is that gross media spend will grow around 30%. And we're taking share within that. So our expectation is 30% versus kind of a 12% expectation from the market. That does assume, however, that all of our clients are continuing to grow and expand quite considerably. So I would say it is not a conservative expectation.

Mark: It does assume that all of our clients are all continuing to grow and expand quite considerably. So I would say it is not a conservative expectation.

Sarah Simon: We are expecting strong growth across the board. Those would be the two key parts. And then, just in terms of the quarter on quarter, our expectation is that the changes in contracts will impact kind of Q2 onward. And then, in terms of take rate, this year, the average is around 16.5%.

Mark: Expectation, we are expecting strong growth across the board.

Mark: Those would be the two key pellets and then just in terms of the quarter on quarter. Our expectation is that the changes in contracts going to impact kind of Q2 onwards.

Mark: And then in terms of take rate this year the average is around 6%.

Operator: And our expectation in 2024 is that will decline. And again, that's communication previously to around about mid-team in 2024 and beyond. Our next question comes from Mark Kelley with Stiefel. Please go ahead. Great, thank you. Good morning, everyone.

Mark: And our expectation in 'twenty 'twenty four is that will decline and again that's community communicated previously to around about mid teens in 2024 and beyond.

Mark: Yeah.

Mark: Yeah.

Mark: Our next question comes from Mark Kelley with Stifel. Please go ahead.

Mark Kelley: Great. Thank you good morning, everyone.

Sarah Simon: Just to go back to the retail media commentary from the last response. So the contract change kicks in in two, if I heard you correctly. I guess, you know, given that the exit run rate for 23 for retail media is, you know, 30% on a reported basis, that's kind of what you think activated media spend grows for in 2024. I guess, how do we think about the start of the year for retail media, given that the counts are a little bit easier, you know, the contract with your largest retailer? You know, sounds like it's unchanged and kicks in in Q2.

Mark Kelley: Just to go back to the retail media commentary from the last responses.

Mark Kelley: So the contract change kicks in in Q2.

Mark Kelley: If I heard you correctly I guess, you know given that the exit run rate for 'twenty three for retail media you know, 30% on a reported basis, that's kind of what you think activated media spend grows for for 2024.

Mark Kelley: How do we think about the start to the year for retail media.

Mark Kelley: The comps are a little bit easier you know the contract with your largest retailer.

Mark Kelley: Well it sounds like it's unchanged and kicks in in Q2, I guess, how do we think about the trajectory of the year for retail media.

Sarah Simon: I guess, what do we think about the trajectory of the year for retail media? That's my first question. And then the second one.

Speaker Change: That's my first question.

Megan Clarkin: You know, hearing you, Megan, talk about how publishers are adopting some of these newer cookie workarounds, I think there's a sentiment across the advertising community and definitely in ad tech that maybe DSPs, especially the smaller subscale folks, certainly not you guys, are way behind in terms of testing the Privacy Sandbox tools or any of the other cookie workarounds. Is that an opportunity for you to take a meaningful share, particularly on the DSP side? And I guess, does that kind of?

Speaker Change: And then the second one.

Speaker Change: You know Im hearing you Megan talk about just.

Speaker Change: Just how publishers are adopting some of these newer cookie workarounds.

Speaker Change: I think there's a sentiment across the advertising community and definitely now it's like maybe like the dsp's, especially the smaller subscale folks you know certainly not you guys are way behind in terms of testing you know that.

Speaker Change: Privacy sandbox tools or any of the other cookie work around is that an opportunity for you to take meaningful share a.

Speaker Change: Particularly on the DSP side, and I guess does that kind of.

Megan Clarkin: you know, facilitate consolidation in retail media and, I guess, ad tech just more broadly. Thank you. Sorry, just quickly on Q1, we don't give guidance on retail media for Q1, but yes, we would anticipate stronger Q1 growth, and we are seeing that coming into the year, and that is before the new contract kind of kicks in, which will be, for the most part, coming through Q2 and beyond. Mark, it's a great question. It's a crystal ball question.

Speaker Change: Facilitate consolidation in retail media and I guess at check just more broadly thank you.

Speaker Change: Yeah, sorry, just on just a quickly on Q1. So we didn't give we don't give guidance kind of on retail media Q1, but yes, we would anticipate stronger Q1 growth and we all see that coming into the year and that is before the new contract kind of kicked in which would be.

Speaker Change: Yes for the most part coming through Q2 and beyond.

Speaker Change: Okay.

Speaker Change: Market, it's a great question, so the Crystal ball question.

Megan Clarkin: I think, well firstly it's the start of publishers. I've talked to many and as I've said before they're in different stages of, you know, understanding working on being ready or being ready and as you move out from the globe I must say that if you're sitting in the US and Britain and in Europe you're kind of closer to this naturally than I was in Australia the other week and it's I mean then you know they know what's going on but it just feels sort of that as you move out from the center it gets to it so this is a this is a global problem that publishers are doing their best to wrestle with and trying to understand what it means to them and trying to see who their new partners will be and what they have to do to implement tech. You know, I suspect that DSPs and smaller DSPs, they just need to, they need to be ready.

Speaker Change: I think well 57 publishes I've talked to many.

Speaker Change: And as I said before they are indifferent at different stages as you know I am on.

Speaker Change: Understanding.

Speaker Change: Working on being ready Oh, being ready and as you move out from the glove I must say that if you're sitting in the U S.

In Britain and in Europe.

Speaker Change: You're kind of closer to this naturally then.

Speaker Change: In Australia, the other week and it's.

Speaker Change: They know what's coming on but it just feels sort of that as you move out from the center. It gets too. So this is a this is a global <unk>.

Speaker Change: That publishers are doing their best to wrestle what I'm trying to understand what it means to them and.

Speaker Change: And trying to see here, the new partners will be and what they have to do to implement pick.

Speaker Change: You know I suspect that our DSP.

Speaker Change: E S P.

Speaker Change: Smaller ESP, they just need to they need to be ready and knowing what we know.

Megan Clarkin: But knowing what we know, and again, we've been in this for a long time, being ready is an absolute advantage in terms of where you are as compared to your competitors in the marketplace. And we are absolutely ready. So yes, it is a big advantage that we have over the others in the ad tech space, except for those who are ready with us, but there are a lot that are not. And as we sort of move through cookie deprecation, of course, there's an opportunity there to make sure that if clients are not being served by their partners, we will come in and offer the services that they need to make sure that they keep business continuity and remain So, you know, call that what it is, it is a major opportunity for us that, you know, we've been looking at for some time in terms of taking, you know, really taking advantage of and getting results for the work that we've put into getting ready. All right, thank you both. Very helpful.

Speaker Change: And again with things on this for a long time really being ready is an absolute advantage in terms of what are you are as compared to your competitors in the market place and we are absolutely ready. So yes. It is a big advantage that we have either the ovens and the AD Tech.

Speaker Change: Except for those who are not ready with us, but there is a lot that I'm, not and and hence we should've moves through cookie deprecation.

Speaker Change: Of course, there is an opportunity there to make sure that it's points have not been says by the partners that we are well.

Speaker Change: Kevin and also the services that they need to make sure that they keep business continuity and remain successful so cool cool that what it is it's a it is a major opportunity for us.

Speaker Change: You know we've been looking at for some time in terms of checking you not really taking advantage all of them getting results or the work that we've put into getting ready for this.

Speaker Change: Alright, Thank you both very helpful.

Speaker Change: Hi.

Speaker Change: Our next question comes from Doug and that's with J P. Morgan. Please go ahead.

Operator: Hi. Our next question comes from Doug Anmuth with J.P. Morgan. Please go ahead. Yeah, hi, this is Katie on behalf of Doug. Thanks for taking the questions. I have two. First, we need to talk a little bit more about, you know, in the post-cookie deprecation world, your three-pronged approach and just like what you think the advertising landscape is going to look like over time. And to that end, how do we think about sizing signal loss in 2025?

Speaker Change: Yeah, Hi, this is Katie on for Doug Thanks for taking our questions my.

Katie: First maybe just talk a little bit more about you know in the post cookie deprecation World. Your three pronged approach and just like what you think the advertising landscape is going to look like over time.

Katie: And just to that and how should we think about sizing the signal off in 2025.

Todd: Secondly, just a quick one, he talked a little bit more about the AI enhancements that you called out in the quarter that drove the uplift in marketing solutions. Thank you. I'm going to pass it across for Todd to take care of it. Okay. One of those. Yeah. I'll do the first one.

Katie: Secondly, just a quick one he's talk a little bit more about the AI enhancements that you called out in the quarter that drove the uplift in marketing solution. Thank you.

Katie: I'm going to possibly across the columns.

Katie: Okay.

Katie: Yeah.

Speaker Change: Also as a person who wants.

Todd: I'm going to jump in, Sarah. On our multi-pronged strategy, Megan laid it out very well before Katie. At the core, it's first-party data matched from an offline identifier standpoint to an offline identifier or potentially using third-party identifiers as the intermediary, which we do at the core. The second piece of the multi-pronged strategy that we've been deploying here is focused on closed environments; we just want to reinforce logged-in audiences at both retailers and social platforms. The third thing outside of Privacy Sandbox is really work that we're doing to help publishers divide their own interest groups with commerce data that we have so that the interest group model that's being propagated by Privacy Sandbox could be innovated in addition to using our data. We're excited to open up new opportunities through our multi-pronged strategy for building audiences and helping publishers see better monetization through that, retailers seeing better monetization through that, and brands getting better performance. It's these three things working together using AI that I want to emphasize make the program much simpler for brands. The big problem with the multi-pronged approach, and indeed, Privacy Sandbox is one piece of it, is that it's mysterious and complicated to the space.

The job themselves.

Speaker Change: <unk>.

Speaker Change: So on the on our multi pronged strategy make it laid it out very well it could be for kidney.

Speaker Change: The core it's you know first party data are matched.

Speaker Change: Matched.

Speaker Change: From an offline identifier standpoint to offline in a fire or potentially using third party.

Speaker Change: The fires as the intermediary, which we do with the core.

Speaker Change: The second piece of the multi pronged strategy that we've been deploying here is focus on close environments just want to reinforce.

Speaker Change: Logging audiences at both retailers and social platforms.

Speaker Change: And the third thing outside of privacy sandbox mm is really work that we're doing to help publishers.

Speaker Change: They buy their own interest groups with commerce data that we have.

Speaker Change: So that the interest group model, that's being propagated by privacy sandbox.

Speaker Change: B innovated in addition to them using our data. So we're excited to open up new opportunities through our multi pronged strategy for building audiences and hoping publishers see them.

Speaker Change: Better monetization through that retailers seeing better buys stations or that our brand is getting better performance.

Speaker Change: Three things working together using.

Speaker Change: Using AI that I want to emphasize make.

Speaker Change: It makes the program much simpler for brands.

Speaker Change: Problem with a multi prong approach and indeed privacy sandbox is one piece of it is it's mysterious and complicated to the space. What we have done through our strategy has made it possible for these identity solutions to be chosen.

Sarah Simon: What we have done through our strategy is made it possible for these identity solutions to be chosen at runtime automatically using AI in such a way that our partners don't need to select or choose or take the risk of maybe going too deeply into one of the pillars of our strategy versus the other. Doing things automatically at runtime and using AI to make the right decision on what identity solution to choose is really at the core of the strategy, and we're just continuing to develop and hone it. It's very promising, and we're very excited about it. And just to build on AI, it impacted our year for 2023 and in Q4, and it really is continuing to enhance how we do the campaign setup, the formats, and ways that we use generative AI to be appealing for our clients and their consumers, and our continued focus on optimizing how the engine works. So it's all paying off, and it was an area of investment for us in 2023 with an incredibly high ROI. So we're very, very excited about how that will drive us not only for 23, but into the future as well.

Speaker Change: Runtime automatically using AI in such a way that our partners don't need to select or choose or take risk or maybe going too deeply into one of the pillars of our strategy versus the other.

Speaker Change: So doing things automatically.

Speaker Change: At runtime and using AI to make the right decision on what identity solution to choose is really at the core of the strategy and we're just continuing to develop and hone it it's very promising and we're very excited about it.

Speaker Change: Yeah, I think just to build on AI for it but it has impacted us.

Speaker Change: Oh, Yeah for 2023 I think Keith or and it really is continuing to enhance how we do the campaign set up the formats and and ways that we use genesee they ought to be appealing for our clients and their consumers and continue to focus on optimizing.

Speaker Change: How the engine looks oh paying often it was an area of investment for us in 2023 with an incredibly high rois. So we're very very excited.

Speaker Change: How that will drive this not only for 'twenty, three but into the future as well.

Speaker Change: Yeah.

Speaker Change: Hum.

Speaker Change: Okay.

Speaker Change: Alright. Thank you may have this rins how this now concludes our call for today. Thanks, everyone for joining the Investor Relations team has abated Burke for any additional request.

Operator: All right. Thank you, Meghan, Sarah, and Charles. This now concludes our report for today. Thanks, everyone, for joining us. The Investor Relations team is available for any additional requests.

Operator: Have a nice day. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.

Speaker Change: A nice day.

Speaker Change: The conference has now concluded. Thank you for attending today's presentation you may now disconnect.