What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2024-02-23 compared with 2023-02-24 · 259 added, 238 removed, 1216 unchanged (29% of the section changed)

2 unchanged sentences

Criteo carried out an evaluation as of December 31, 2023, under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of our disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act.

Disclosure controls and procedures are controls and other procedures designed to reasonably assure that information required to be disclosed in our reports filed or furnished under the Exchange Act, such as this Annual Report on Form 10-K, is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms.

Disclosure controls and procedures are controls and other procedures designed to reasonably assure that information required to be disclosed in our reports filed or furnished under the Exchange Act, such as this Form 10-K, is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms.

Disclosure controls and procedures are also designed to reasonably assure that this information is accumulated and communicated to our management, including our Chief Executive Officer and our Chief Financial Officer, to allow timely decisions regarding required disclosure.

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Based on this assessment, our management has concluded that the Company's internal control over financial reporting was effective as of December 31, 2023.

The effectiveness of the Company's internal control over financial reporting as of December 31, 2022 has been audited by Deloitte & Associés, our independent registered public accounting firm, as stated in its attestation report, which appears on page F-2 of this Annual Report on Form 10-K.

The effectiveness of the Company's internal control over financial reporting as of December 31, 2023 has been audited by Deloitte & Associés, our independent registered public accounting firm, as stated in its attestation report, which appears on page F-2 of this Form 10-K.

Changes in Internal Control Over Financial Reporting

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Other Information

Not applicable.

During the three months ended December 31, 2023, no directors or Section 16 officers of the Company adopted or terminated any Rule 10b5-1 trading arrangement or "non-Rule 10b5-1 trading arrangement," as each term is defined in Item 408 of Regulation S-K.

Disclosure Regarding Foreign Jurisdictions That Prevent Inspections

26 unchanged sentences

10-Q 001-36153 2.1 August 5, 2022

3.1 Updated By-laws (as of February 23, 2023) (English translation)

8-K 001-36153 3.1 February 24, 2023

Updated By-laws (as of December 7, 2023 ) (English translation)

Amended and Restated Deposit Agreement, dated as of December 28, 2021, among the Company, the Bank of New York Mellon, as depositary, and all owners and holders from time to time of American Depositary Shares issued thereunder

10 unchanged sentences

Amended 2016 Stock Option Plan (including forms of Stock Option Grant Agreement and Exercise Notice) (English Translation)

S-8 333-258256 99.1 July 29, 2021

S-8 333-273476

99.1 July 27, 2023

Summary of BSA Terms and Conditions

6 unchanged sentences

F-1 333-191223 10.11 September 18, 2013

Incorporated by Reference

Exhibit Description Schedule/ Form File Number Exhibit File Date

Amended and Restated 2015 Time-Based Restricted Stock Units Plan (including form of Grant Letter) (English Translation)

S-8 333-258256 99.2 July 29, 2021

S-8 333-273476

99.2 July 27, 2023

Amended and Restated 2015 Performance-Based Restricted Stock Units Plan (including form of Grant Letter) (English Translation)

S-8 333-258256 99.3 July 29, 2021

S-8 333-273476

99.3 July 27, 2023

Criteo Executive Bonus Plan

10-K 001-36153 10.15 February 29, 2016

Incorporated by Reference

Exhibit Description Schedule/ Form File Number Exhibit File Date

Offer Letter between the Registrant and Sarah Glickman, dated August 27, 2020

1 unchanged sentence

Amendment to Offer Letter between Criteo Corp.

and Sarah Glickman, dated August 27, 2020

and Sarah Glickman, dated as of April 1, 2021

10-Q 001-36153 10.1 May 5, 2021

15 unchanged sentences

10-Q 001-36153 10.2 May 5, 2022

Incorporated by Reference

Exhibit Description Schedule/ Form File Number Exhibit File Date

Multicurrency Revolving Facility Agreement, dated as of September 27, 2022, among the Company, certain of its subsidiaries, the lenders party thereto from time-to-time, BNP Paribas, Crédit Lyonnais (LCL), HSBC Continental Europe and Société Générale, as bookrunners and mandated lead arrangers, Bank of Montreal Europe PLC, Citibank N.A., London Branch and Crédit Industriel et Commercial (CIC), as mandated lead arrangers, BNP Paribas, as coordinator and documentation agent, Société Générale, as agent, and Société Générale and HSBC Continental Europe, as sustainability coordinators

8-K 001-36153 10.1 September 28, 2022

Amendment Agreement, dated as of November 17, 2023, between the Company, as borrower and guarantor , and Société Générale, as agent **

List of Subsidiaries

Consent of Deloitte & Associés

Power of Attorney (including on the signature page to this report)

Certificate of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

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§1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Clawba ck Policy adopted October 26, 2023

Incorporated by Reference

Exhibit Description Schedule/ Form File Number Exhibit File Date

101# The following financial statements from Criteo S.A.'s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, formatted in iXBRL (Inline Extensible Business Reporting Language):

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* Furnished herewith.

** Schedules have been omitted from this filing pursuant to Item 601(a)(5) of Regulation S-K.

A copy of any omitted schedule will be furnished to the Securities and Exchange Commission upon request.

Form 10-K Summary

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/s/ James Warner

February 23, 2024

/s/ Frederik van der Kooi

Director February 23, 2024

Frederik van der Kooi

Index to Consolidated Financial Statements

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Critical Audit Matter

The critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which is relates.

Revenue — Refer to Note 1 to the financial statements

Critical Audit Matter Description

The Company’s Marketing Solutions revenue consists of selling personalized display advertisements featuring product-level recommendations either directly to clients or to advertising agencies.

This is primarily achieved by converting the Company’s clients’ website visitors into customers, enabling the Company to charge its clients when users engage with an ad the Company delivers, either by clicking on it (cost-per-click basis), or through installing an application by clicking on an ad that the Company delivers (cost-per-install).

The Company’s revenue from Marketing Solutions consists of delivering personalized display advertisements featuring product-level recommendations either directly to clients or to advertising agencies.

Such products are generally sold based on a cost-per-click or cost-per-impression pricing models.

Revenues for Marketing Solutions are recognized when an ad is clicked on or displayed to the end user as that is when the Company transfers control of promised services directly to the Company’s clients in an amount that reflects the consideration to which the Company expects to be entitled to in exchange for those services.

The cost-per-click or cost-per-impression the Company charges to the customers, varies depending on the optimization strategy of the Criteo engine, the dynamics and performance of the market, amongst other factors.

Because of the nature of the Company’s revenue, which is made up of a significant volume of low-dollar value transactions, sourced from multiple databases and other tools, the Company uses highly automated systems to process and record its revenue transactions.

We identified Marketing Solution revenue as a critical audit matter because the Company’s systems to process and record its revenue transactions are highly automated and thus required significantly more involvement and effort from our information technology (IT) internal specialist team to identify, test, and evaluate the Company’s system, software applications, and automated controls.

We identified revenue for Marketing Solutions as a critical audit matter because the Company’s systems to process and record its revenue transactions are highly automated and thus required significantly more involvement and effort from our information technology (IT) internal specialist team to identify, test, and evaluate the Company’s system, software applications, and automated controls.

How the Critical Audit Matter Was Addressed in the Audit

With the assistance of our IT specialists and Data specialists, our audit procedures related to the Company’s system to process and record its revenue transactions included the following:

• Identified the significant applications and systems used to process revenue transactions and tested the general IT controls over each of these applications and systems, including testing of user access controls, change management controls, and IT operations controls.

• Identified the relevant applications and systems used to process revenue transactions and tested the general IT controls over these applications and systems, including testing of user access controls, change management controls, and Datacenter and Network Operations.

• Performed testing of system interface controls and automated controls within the relevant revenue solutions, as well as the controls designed to address the occurrence, accuracy and completeness of revenue.

• Tested internal controls within the relevant revenue business process, including those in place to reconcile the various applications to the Company’s general ledger.

• Tested the underlying data of the revenue transactions by agreeing the amounts recognized in the financial statements to the source transactional systems and tested the mathematical accuracy of the recorded revenue.

Business combinations – Fair Value of Acquired Technologies — Refer to Notes 2 and 8 to the financial statements

Critical Audit Matter Description

The Company completed the acquisition of Iponweb Holding Limited for $290.2 million on August 1, 2022.

The Company accounted for the transaction under the acquisition method of accounting for business combinations.

Accordingly, the purchase price was allocated to the assets acquired and liabilities assumed based on their respective fair values, including technologies intangible assets of $90.2 million.

Management estimated the fair value of the technologies intangible assets using the multi-period excess earnings method and the relief-from-royalty method, depending on the technology being valued.

The determination of the fair value of the technologies intangibles assets required management to make significant estimates and assumptions related to forecasts of future revenue, EBITDA margin, and the selection of the discount rate and of the royalty rate.

We identified the fair value of acquired technologies from Iponweb Holding Limited as a critical audit matter because of the significant estimates and assumptions management makes to fair value these assets.

This required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists, when performing audit procedures to evaluate the reasonableness of management’s estimates and assumptions related to forecasts of future revenues, EBITDA margin, and the selection of the discount rate and of the royalty rate.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to forecasts of future revenues, EBITDA margin, and the selection of the discount rate and of the royalty rate for the acquired technologies included the following, among others:

• We tested the effectiveness of controls over the valuation of the technologies intangible asset, including management’s controls over forecasts of future revenues, EBITDA margin, and the selection of the discount rate and of the royalty rate.

• We assessed the reasonableness of management’s forecasts of future revenues and EBITDA margin by comparing the projections to historical results.

• With the assistance of our fair value specialists, we evaluated the reasonableness of the (1) valuation methodology, (2) discount rate, including testing the source information underlying the determination of the discount rate, testing the mathematical accuracy of the calculation, and developing a range of independent estimates and comparing those to the discount rate selected by management and (3) royalty rate, including evaluating the consistency of the royalty rate selected with external market and industry data.

• We evaluated whether the estimated future revenues were consistent with evidence obtained in other areas of the audit.

• Tested internal controls within the revenue business process, including those in place to reconcile the various applications to the Company’s general ledger.

• Tested the underlying data of the revenue transactions by agreeing the events recognized in the financial statements to the source transactional systems and tested the mathematical accuracy of the recorded revenue.

/s/ Deloitte & Associés

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Cash and cash equivalents 5

$ 336,341 $ 348,200

Trade receivables, net of allowances of $ 43.3 million and $ 47.8 million as of December 31, 2023 and December 31, 2022, respectively.

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Other current assets 7

48,291 51,866

Restricted cash - current portion 5

75,000 25,000

Marketable securities - current portion 5,970 25,098

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Property, plant and equipment, net 8

126,494 131,207

Intangible assets, net 9

Goodwill 9 515,140 329,699

180,888 175,983

524,197 515,140

Right of use asset - operating lease 12

112,487 102,176

Restricted cash - non-current portion 5

3 unchanged sentences

Deferred tax assets 18

52,680 31,646

Total non current assets 1,079,357 1,087,898

7 unchanged sentences

Lease liability - operating - current portion 12

35,398 31,003

Other taxes 66,659 58,031

1 unchanged sentence

Other current liabilities 13

104,552 83,457

Total current liabilities 1,180,487 1,079,993

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Lease liability - operating - non current portion 12

83,051 77,536

Contingencies - non-current portion 20

32,625 33,788

Other non-current liabilities 13

19,082 69,226

Total non-current liabilities 140,041 187,795

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Financial and Other Income (Expense) 17

( 2,490 ) 17,783 1,939

Income before taxes 74,728 42,061 153,816

Provision for income taxes 18

( 20,084 ) ( 31,186 ) ( 16,169 )

Net income $ 54,644 $ 10,875 $ 137,647

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Net income allocated to shareholders per share:

Basic 18 $ 0.15 $ 2.21 $ 1.18

Diluted 18 $ 0.14 $ 2.09 $ 1.16

$ 0.95 $ 0.15 $ 2.21

$ 0.88 $ 0.14 $ 2.09

Weighted average shares outstanding used in computing per share amounts:

Basic 18 60,004,707 60,717,446 60,876,480

Diluted 18 62,760,197 64,231,637 61,818,593

56,170,658 60,004,707 60,717,446

60,231,627 62,760,197 64,231,637

The accompanying notes form an integral part of these consolidated financial statements.

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Change in treasury stock (1)

( 1,498,709 ) ( 44 ) 424,663 ( 45,990 ) ( 29,782 ) — ( 24,227 ) ( 100,043 ) — ( 100,043 )

Shared-based compensation — — — — 42,425 — — 42,425 309 42,734

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Balance at December 31, 2023 61,165,663 $ 2,023 ( 5,400,572 ) $ ( 161,788 ) $ 769,240 $ ( 85,326 ) $ 555,456 $ 1,079,605 $ 31,786 $ 1,111,391

(1) Includes deferred consideration in the context of Storetail Marketing Services SAS acquisition in 2018 and 2020 and from January 1, 2020, the adoption of ASU 2016-13, Financial Instruments - Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments , which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost issued by the Financial Accounting Standards Board (FASB).

(1) On February 5, 2021 Criteo's Board of Directors authorized a share repurchase program of up to $ 175.0 million of the Company's outstanding American Depositary Shares.

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The change in treasury stocks is comprised of 5,135,359 shares repurchased at an average price of $ 26.43 offset by 1,625,742 treasury shares used for RSUs vesting and 2,732,386 treasury shares cancelled.

(3) On December 7, 2022, Criteo's board of Directors extended a share repurchase program to up to $ 480.0 million of the Company's outstanding American Depositary Shares.

The change in treasury stocks is comprised of 4,286,624 shares repurchased at an average price of $ 30.0 offset by 1,679,674 treasury shares used for RSUs vesting, by 1,006,482 treasury shares used for LUSs vesting and by 2,185,000 treasury shares cancelled .

The accompanying notes form an integral part of these consolidated financial statements.

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Amortization and provisions 72,336 150,261 90,934

Payment for contingent liability on regulatory matters

( 43,334 ) — —

Equity awards compensation expense (1)

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Change in accounts payable related to intangible assets, property, plant and equipment ( 21,810 ) 28,951 1,973

Proceeds from disposition of investments

Payment for businesses, net of cash acquired ( 6,825 ) ( 138,027 ) ( 10,419 )

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Proceeds from capital increase 1,945 1,028 25,196

Change in treasury stocks ( 135,685 ) ( 100,027 ) ( 43,655 )

Repurchase of treasury stocks

( 125,489 ) ( 135,685 ) ( 100,027 )

Change in other financial liabilities 235 ( 265 ) ( 4,037 )

Cash payment for contingent consideration

( 22,025 ) — —

Other ( 1,920 ) 21,878 —

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generally accepted accounting principles (“U.S.

The consolidated financial statements include the accounts of Criteo S.A and its wholly owned subsidiaries.

The consolidated financial statements include the accounts of Criteo S.A.

and its wholly owned subsidiaries.

Consolidation Methods

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Criteo France SAS France 100 % 100 % 100 % 100 % Fully consolidated

Criteo Finance SAS (1)

France — % — % 100 % 100 % Fully consolidated

Criteo Technology France 100 % 100 % 100 % 100 % Fully consolidated

Condigolabs SAS France 40 % 40 % 40 % 40 % Fully consolidated

Condigolabs SAS (2)

France — % — % 40 % 40 % Fully consolidated

Foreign subsidiaries

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Ltd China 100 % 100 % 100 % 100 % Fully consolidated

Brandcrush Pty Ltd

100 % 100 % — % — % Fully consolidated

Criteo Singapore Pte.

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Criteo India Private Limited India 100 % 100 % 100 % 100 % Fully consolidated

Gemini HoldCo, LLC United States 100 % 100 % 100 % 100 % Fully consolidated

Gemini HoldCo, LLC (1)

United States — % — % 100 % 100 % Fully consolidated

Bidswitch GmbH Switzerland 100 % 100 % 100 % 100 % Fully consolidated

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Iponweb Labs LLC Armenia 100 % 100 % 100 % 100 % Fully consolidated

(1) Merged with Criteo Technology

(1) Merged with Criteo Corp.

(2) Disposal of investment

Functional Currency and Translation of Financial Statements in Foreign Currency

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On an on-going basis, management evaluates its estimates, primarily those related to:

(1) gross vs net assessment in revenue recognition (2) allowances for credit losses, (3) income taxes, (4) assumptions used in valuing acquired assets and assumed liabilities in business combinations, (5) assumptions used in the valuation of goodwill, intangible assets and leases, (6) assumptions used in the valuation model to determine the fair value of share-based compensation plan, (7) assumptions surrounding the recognition and valuation of contingent liabilities and losses.

(1) gross vs net assessment in revenue recognition (2) income taxes, (3) assumptions used in the valuation of long-lived assets including intangible assets, and goodwill, (4) assumptions surrounding the recognition and valuation of contingent liabilities and losses.

Business combinations

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Property, plant and equipment are accounted for at acquisition cost less cumulative depreciation and any impairment loss.

Depreciation is calculated on a straight-line basis over the assets’ estimated useful lives as follows:

Depreciation is calculated on a straight-line basis over the assets’ estimated useful lives.

Management determines the appropriate useful life of property, plant and equipment when those assets are initially recognized and it is routinely reviewed.

Our current estimate of useful lives represents the best estimate based on current facts and circumstances, but may differ from the actual useful lives due to changes to our business operations, changes in the planned use of assets, and technological advancements.

When we change the estimated useful life assumption for any asset, the remaining carrying amount of the asset is accounted for prospectively and depreciated or amortized over the revised estimated useful life.

The estimated useful lives of property and equipment are described below:

Servers.......................................................................................................................................................

5 years over the life of the warranty

Furniture and IT equipments...............................................................................................................

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Intangible assets are reviewed for impairment whenever events or changes in circumstances such as, but not limited to, significant declines in revenue, earnings or cash flows or material adverse changes in the financial and economic environment indicate that the carrying amount of an asset may be impaired.

Property, Plant and Equipment and Impairment of Long-lived Assets

Impairment of Long-lived Assets

The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset is impaired or the estimated useful life is no longer appropriate.

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Variable costs include changes in indexation and are expensed in the period incurred.

We chose to use certain practical expedients upon adaption of ASC 842 including:

• We did not reassess whether any expired or existing contracts are or contain leases, the lease classification for any expired or existing leases, or the initial direct costs for any existing leases,

• We do not recognize a lease liability or right of use asset for leases with a term of 12 months or less, and

• We used hindsight in determining the lease term.

Financial Assets and Liabilities, Excluding Derivative Financial Instruments

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Receivables are presented on a gross basis and are not netted against the payments we are required to make to advertising inventory publishers.

Management makes estimates of expected credit trends for the allowance for credit losses based on, among other factors, a past history of collections, current credit conditions, the aging of the receivables, past history of write downs, credit quality of our customers, current economic conditions, and reasonable and supportable forecasts of future economic conditions.

We apply Financial Instruments-Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments, which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost that an entity does not expect to collect over the asset's contractual life, considering past events, current conditions, and reasonable and supportable forecasts of future economic conditions.

For accounts receivable measured at amortized cost, we use aging analysis, and probability of default methods to evaluating and estimating the expected credit losses.

A receivable is considered past due if we have not received payments based on agreed-upon terms.

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The Company mitigates its credit risk with respect to accounts receivable by performing credit evaluations and monitoring agencies' and advertisers' accounts receivable balances.

As of December 31, 2022 and 2021 no customer accounted for 10% or more of accounts receivable.

During the years ended December 31, 2022, 2021 and 2020, no single customer represented 10% or more of revenue.

As of December 31, 2023 an individual customer accounted for 10% or more of accounts receivable.

As of December 31, 2022, no individual customer accounted for more than 10% of accounts receivable.

During the years ended December 31, 2023, 2022 and 2021, no individual customer represented 10% or more of revenue.

Employee Benefits

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Contingencies

An estimated loss from a loss contingency is recognized if the following two conditions are met:

• information available before the financial statements are issued indicates that it is probable that an asset had been impaired or a liability had been incurred at the date of the financial statements;

• the amount of loss can be reasonably estimated.

With respect to litigation, claims and non income tax risks, that may result in a provision to be recognized, we exercise significant judgment in measuring and recognizing provisions or determining exposure to contingent liabilities that are related to pending litigation, other outstanding claims and tax audits.

These judgment and estimates are subject to change as new information becomes available.

We are involved in legal proceedings, claims, and regulatory, tax or government inquiries and investigations that arise in the ordinary course of business.

Certain of these matters might include speculative claims for substantial or indeterminate amounts of damages.

With respect to these matters, asserted and unasserted, we evaluate the associated developments on a regular basis and accrue a liability when we believe that it is both probable that a loss has been incurred and the amount can be reasonably estimated.

If we determine there is a reasonable possibility that we may incur a loss and the loss or range of loss can be reasonably estimated, we disclose the possible loss in the accompanying notes to the consolidated financial statements to the extent material.

We review the developments in our contingencies that could affect the amount of the provisions that have been previously recorded, and the matters and related reasonably possible losses disclosed.

Revenue Recognition

We sell personalized display advertisements featuring product-level recommendations either directly to clients or to advertising agencies.

We have multiple pricing models which include percentage of spend models in addition to cost-per-click, cost-per-install and cost-per-impression pricing models.

Cost-per-click, cost-per-install and cost-per-impression pricing models

We also provide technology to retailers and other companies in the ad tech space which enables them to monetize on their advertising properties, or connect them to other players in the ad-tech industry.

Revenue is recognized when control of the promised goods or services is transferred to our clients, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services.

We determine revenue recognition by applying the following steps:

• Identification of the contract, or contracts, with a customer;

• Identification of the performance obligations in the contract;

• Determination of the transaction price;

• Allocation of the transaction price to the performance obligations in the contract;

• Recognition of revenue when, or as, we satisfy a performance obligations.

We have multiple pricing models which include percentage of spend models, as well as cost-per-click, and cost-per-impression pricing models.

Cost-per-click and cost-per-impression pricing models

We recognize revenues when we transfer control of promised services directly to our clients in an amount that reflects the consideration to which we expect to be entitled to in exchange for those services.

For campaigns priced on a cost-per-click, cost-per-install basis, we bill our clients when a user clicks on an advertisement we deliver or installs an application by clicking on an advertisement we delivered, respectively.

For these pricing models, we recognize revenue when a user clicks on an advertisement or installs an application, as we consider the delivery of clicks or installs our performance obligation.

For campaigns priced on a cost-per-click, we bill our clients when a user clicks on an advertisement we deliver or installs an application by clicking on an advertisement we delivered, respectively.

For these pricing models, we recognize revenue when a user clicks on an advertisement , as we consider the delivery of clicks our performance obligation.

For campaigns priced on a cost-per-impression basis, we bill our clients based on the number of times an advertisement is displayed to a user.

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We recognize revenue when an ad is displayed or clicked on.

Criteo's Iponweb solutions offer an online trading platform through which supply partners can submit bid requests for media that they wish to sell, and demand partners can submit bids for media that they wish to buy through the operations of a dynamic, real-time exchange whereby media is sold to demand partners whose bids are selected by supply partners.

Criteo's solutions offer an online trading platform through which supply partners can submit bid requests for media that they wish to sell, and demand partners can submit bids for media that they wish to buy through the operations of a dynamic, real-time exchange whereby media is sold to demand partners whose bids are selected by supply partners.

We generate revenues by charging demand or supply a percentage of total media spend traded through our solutions.

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The determination of whether we are acting as principal or agent requires judgment.

We act as principal in our Criteo Marketing Solutions arrangements because (i) we control the advertising inventory before it is transferred to our clients;

We act primarily as principal in our Marketing Solutions segment because (i) we control the advertising inventory before it is transferred to our clients;

(ii) we bear sole responsibility in fulfillment of the advertising promise and bear inventory risks and (iii) we have full discretion in establishing prices.

Therefore, based on these and other factors, we have determined that we act as principal for our Criteo Marketing Solutions engagements and accordingly report the revenue earned and related costs incurred on a gross basis.

We act either as principal or as agent in our Criteo Retail Media segment.

Therefore, based on these and other factors, we have determined that we act primarily as principal for our Criteo Marketing Solutions engagements and accordingly report the revenue earned and related costs incurred on a gross basis.

We act primarily as agent in our Retail Media segment.

For the arrangements related to transactions using our legacy Retail Media solutions, we consider that we act as principal, as we exercise significant control over the client’s advertising campaign.

1 unchanged sentence

Therefore, we report the revenue earned and related costs incurred by the Platform solution on a net basis.

We act as agent in Iponweb provided solutions as we (i) do not control the advertising inventory before it is transferred to our clients, (ii) do not have inventory risks because we do not purchase the inventory upfront and (iii) have limited discretion in establishing prices as we charge a fee based on a percentage of the digital advertising inventory traded through our solutions.

We act as agent in Iponweb segment as we (i) do not control the advertising inventory before it is transferred to our clients, (ii) do not have inventory risks because we do not purchase the inventory upfront and (iii) have limited discretion in establishing prices as we charge a fee based on a percentage of the digital advertising inventory traded through our solutions.

Therefore, we report the revenue earned and related costs incurred by the Iponweb solutions on a net basis.

Customer Credit Notes

We offer credit notes to certain customers as a form of incentive, which are accounted for as variable consideration.

We estimate these amounts based on the expected amount to be provided to customers and they are recognized as a reduction of revenue.

We believe that there will not be significant changes to our estimates of variable consideration.

Rebates and Incentives

Criteo offers rebates and incentives to certain customers that could be either fixed or variable.

Fixed incentives may represent payments to a customer directly related to entering into an agreement, which are capitalized and amortized over the life of the agreement on a straight-line basis.

Variable rebates and incentives are calculated based on expected amount to be provided to customers and they are recognized as a reduction of revenue.

We calculate these amounts based upon estimated customer performance, such as volume thresholds, and the terms of the related business agreements.

Deferred Revenues

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Our cost of revenue primarily includes traffic acquisition costs and other cost of revenue.

Traffic Acquisition Costs .

Traffic acquisition costs consist primarily of purchases of impressions from publishers on a CPM basis.

Traffic acquisition costs consist primarily of purchases of impressions from publishers on a CPM basis, incurred to generate our revenues, primarily for the Marketing Solutions segment.

We purchase impressions directly from publishers or third-party intermediaries, such as advertisement exchanges.

1 unchanged sentence

Costs owed to publishers but not yet paid are recorded in our Consolidated Statements of Financial Position as trade payables.

For legacy solutions within Criteo Retail Media, we pay for the inventory of our retailer partners on a revenue sharing basis, effectively paying the retailers a portion of the click-based revenue generated by user clicks on the sponsored products advertisements or impressions on the commerce display advertisements displaying the products of our consumer brand clients.

For Retail Media Platform solutions, revenue is recognized on a net basis, and there are no associated Traffic Acquisition Costs.

For solutions within Iponweb, revenue is recognized on a net basis, and there are no associated Traffic Acquisition Costs.

For a discussion of the trends we expect to see in traffic acquisition costs, see the section entitled " - Highlights and Trends - Contribution ex-TAC" in Item 7.D -Trend Information below.

Other Cost of Revenue .

Other cost of revenue includes expenses related to third-party hosting fees, depreciation of data center equipment, data purchased from third parties and digital taxes.

Other cost of revenue includes expenses related to third-party hosting fees, depreciation of data center equipment, the cost of data purchased from third parties and digital taxes.

The Company does not build or operate its own data centers and none of its Research and Development employments are dedicated to revenue generating activities.

As a result, we do not include the costs of such personnel in other cost of revenue.

Advertising and Promotional Expenses

Advertising costs are expensed when incurred and are included in marketing and sales expenses on the consolidated statements of income.

We incurred advertising expenses of $ 1.7 million, $ 7.6 million, and $ 2.5 million for the years ended December 31, 2023, 2022, and 2021, respectively.

Share-Based Compensation

Shares, employee share options and employee and non-employee warrants are primarily awarded to our employees or directors.

These awards are measured at their fair value on the date of grant.

The fair value is calculated with the most relevant formula regarding the settlement and the conditions of each plan.

The fair value is recorded in personnel expenses (allocated by function in the Consolidated Statements of Income) on a straight-line basis over each milestone composing the vesting period with a corresponding increase in shareholders’ equity.

At each closing date, we re-examine the number of options likely to become exercisable.

If applicable, the impact of the review of the estimate is recognized in the Consolidated Statements of Income with a corresponding adjustment in equity.

Share-based compensation expense consists of the company's restricted stock units (RSUs), and performance stock units (PSUs) expense and Lock Up Shares "LUS" expense.

RSUs and PSUs granted to employees are measured based on the grant-date fair value.

The PSUs expense is trued up based on the Company’s expectation of the likelihood of meeting the performance conditions of the granted instrument.

In general, our RSUs and PSUs vest over a service period of four years.

LUS were issued to Iponweb seller as partial consideration for the Iponweb Acquisition.

Share-based compensation expense is generally recognized based on the straight-line basis over the requisite service period.

We account for forfeitures as they occur.

Income taxes are accounted for under the asset and liability method of accounting.

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Uncertain Tax Positions

We recognize tax benefits from uncertain tax positions only if we believe that it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position.

These uncertain tax positions include our estimates for transfer pricing that have been developed based upon analyses of appropriate arms-length prices.

Similarly, our estimates related to uncertain tax positions concerning research tax credits are based on an assessment of whether our available documentation corroborating the nature of our activities supporting the tax credits will be sufficient.

Although we believe that we have adequately reserved for our uncertain tax positions (including net interest and penalties), we can provide no assurance that the final tax outcome of these matters will not be materially different.

We make adjustments to these reserves in accordance with the income tax accounting guidance when facts and circumstances change, such as the closing of a tax audit or the refinement of an estimate.

To the extent that the final tax outcome of these matters is different from the amounts recorded, such differences will affect the provision for income taxes in the period in which such determination is made, and could have a material impact on our financial condition and operating results.

We record uncertain tax positions on the basis of a two-step process in which determinations are made (i) whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (ii) for those tax positions that meet the more-likely-than-not recognition threshold, we recognize the largest amount of tax benefit that is more than 50% likely to be realized upon ultimate settlement with a tax authority.

We recognize interest and penalties related to unrecognized tax benefits on the income tax expense line in our consolidated statement of operations.

Accrued interest and penalties are included on the related tax liability line in the consolidated balance sheet.

Operating Segments

Segment information reported is built on the basis of internal management data used for performance analysis of businesses and for the allocation of resources (management approach).

An operating segment is a component of the Company for which separate financial information is available that is evaluated regularly by our Chief Operating Decision Maker in deciding how to allocate resources and assessing performance.

Our chief operating decision-maker is our CEO.

The CEO reviews Contribution ex-TAC, primarily at a family of solutions level, for the purposes of allocating resources and evaluating financial performance.

Contribution ex-TAC is Criteo's profitability measure and reflects the Company's gross profit plus other costs of revenue.

As of December 31, 2022, we have concluded that our operations constitute three operating and reportable segments:

We report our financial results based on three reportable segments:

Marketing Solutions, Retail Media and Iponweb.

Segment information reported is built on the basis of internal management data used for performance analysis of businesses and for the allocation of resources (management approach).

An operating segment is a component of the Company for which separate financial information is available that is evaluated regularly by our Chief Operating Decision Maker ("CODM") in deciding how to allocate resources and assessing performance.

Our CODM is our CEO.

Earnings Per Share

Basic earnings per share (“EPS”) are calculated by dividing the net income attributable to shareholders of the Parent by the weighted average number of shares outstanding.

Basic earnings per share (“EPS”) is calculated by dividing the net income attributable to shareholders of the Parent by the weighted average number of shares outstanding.

The weighted average number of shares outstanding is calculated according to movements in share capital.

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by the weighted average number of shares outstanding plus any potentially dilutive shares not yet issued.

When the statement of income presents a loss position, basic net loss is the same as diluted net loss per share as the inclusion of all potential shares of common stock outstanding would be anti-dilutive

Accounting Pronouncements adopted in 2023

Effective January 1, 2022, we have adopted the Financial Accounting Standards Board ("FASB") Accounting Standards Update ("ASU") Government Assistance (Topic 832):

Disclosure by Business Entities about Government Assistance (ASU 2021-10), which improves the transparency of government assistance received by most business entities by requiring the disclosure of:

(1) the types of government assistance received;

(2) the accounting for such assistance;

and (3) the effect of the assistance on a business entity's financial statements.

The impacts on our annual consolidated financial statements are limited as a result of adoption of this standard.

No standards were adapted in 2023 which had a material impact on the Company's financial statements.

Recent Accounting Pronouncements

Accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on the Company’s Consolidated Financial Statements upon adoption.

In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures, a final standard on improvements to income tax disclosures.

The standard requires disaggregated information about a reporting entity's effective tax rate reconciliation as well as information on income taxes paid.

The standard is intended to benefit investors by providing more detailed income tax disclosures that would be useful in making capital allocation decisions and applies to all entities subject to income taxes.

The new standard is effective for annual periods beginning after December 15, 2024.

This accounting standard is effective in the first quarter of the Company's fiscal year ended December 31, 2025.

We are currently evaluating the impact of adoption on our financial disclosures.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280)-Improvements to Reportable Segment Disclosures.

The ASU requires that an entity disclose significant segment expenses impacting profit and loss that are regularly provided to the CODM.

The update is required to be applied retrospectively to prior periods presented, based on the significant segment expense categories identified and disclosed in the period of adoption.

The amendments in this ASU are required to be adopted for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

Early adoption is permitted.

We are currently evaluating the impact of adoption on our financial disclosures.

Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on the Company’s Consolidated Financial Statements upon adoption.

Business Combinations

On August 1, 2022, the Company, Iponweb Holding Limited, Exezars Limited (a subsidiary of Iponweb Holding Limited and collectively with Iponweb Holding Limited, the “Sellers”), Mr.

Ljubisa Bogunovic, in his capacity as trustee of the “IW General Management Trust” and Mr.

Boris Mouzykantskii, founder and Chief Executive Officer of Iponweb Holding Limited (the “Founder”) entered into an amended and restated Framework Purchase Agreement (the “FPA”), amending and restating the previously disclosed framework purchase agreement, dated December 22, 2021, which provided for the acquisition of the business of Iponweb Holding Limited (the "Iponweb business"), a market-leading AdTech company with world-class media trading capabilities, by the Company (the “Iponweb Acquisition”).

This business combination is composed of an asset purchase of Iponweb intellectual property and other intangible rights and a share purchase of 100 % of the share capital and voting rights of nine Iponweb operational legal entities.

Purchase price.

The purchase price, as per ASC 805, was $ 290.2 million (subject to approval and finalization of post-close purchase price adjustments) for the Iponweb business, out of which $ 61.2 million represents the fair value of the contingent consideration.

On February 28, 2023, we completed the acquisition of all of the outstanding shares of Brandcrush Pty Ltd.

("Brandcrush").

The purchase price for the acquisition of shares was $ 7.1 million.

The acquisition was financed by available cash resources.

The transaction has been accounted for as a business combination under the acquisition method of accounting.

The purchase price allocation has been completed and resulted in the recognition of intangible assets related to technology of $ 3.5 million and goodwill of $ 5.0 million.

In addition, acquisition costs amounting to $ 0.7 million were fully expensed as incurred.

On August 1, 2022 (the "Acquisition Date"), the Company entered into an amended and restated Framework Purchase Agreement (the “FPA”), which provided for the acquisition of the business of Iponweb Holding Limited (the "Iponweb business"), a market-leading AdTech company with world-class media trading capabilities (the “Iponweb Acquisition”).

The purchase price, as per ASC 805, was $ 290.2 million for the Iponweb business, out of which $ 61.2 million represents the fair value of the contingent consideration.

This contingent consideration is payable in cash to the Sellers in an amount up to $ 100 million, conditioned upon the achievement of certain net revenue targets by the Iponweb business for the 2022 and 2023 fiscal years.

Separate compensation arrangement.

See Note 13 for further details.

The Company transferred Treasury shares with a fair value of $ 70.2 million to Iponweb's Sellers, subject to lock-up conditions.

As these shares are subject to a lock-up period that expires in three installments on each of the first three anniversaries of the Iponweb Acquisition, unless the Founder's employment agreement is terminated under certain circumstances during the pendency of such lock-up period, the $ 70.2 million fair value was not included in the purchase price consideration above and will be accounted for separately from the business combination as a stock compensation expense.

See Note 15 for further discussion.

The acquisition was financed by available cash resources, and in connection with the Acquisition, the Company drew down € 50.0 million ($ 51.1 million) for a one-month period on its then-current revolving credit facility (repaid prior to the quarter-immediately proceeding the acquisition) to provide additional liquidity.

Assets acquired and liabilities assumed.

See Note 16 for further details.

The transaction was accounted for as a business acquisition.

We have completed the preliminary purchase price allocation and we expect to finalize this analysis within one year from the Acquisition Date.

On the Acquisition Date, assets acquired and liabilities assumed by major asset class before purchase price allocation are as follow:

Estimated fair values

(in millions)

Cash and cash equivalents $ 93.3

Trade receivables 100.7

Other current assets 1.1

Technology 90.2

Customer relationships 7.2

Other non-current assets 59.0

Trade Payables ( 191.5 )

Other current liabilities ( 3.1 )

Other non-current liabilities ( 54.3 )

Net assets acquired

Developed technology represents the estimated fair value of the features underlying the Iponweb products as well as the platform providing services to Iponweb customers.

Customer relationships represent the estimated fair value of the underlying relationships with Iponweb customers, including the fair value of unbilled and unrecognized contracts yet to be fulfilled.

The estimated useful lives of technologies acquired and customer relationships are four and nine years , respectively.

In the Iponweb business's opening balance sheet, Criteo recognized a $ 17.6 million liability related to the Iponweb business's uncertain tax positions in accordance with ASC 740.

The Company also recognized a $ 33.7 million provision in connection with the Iponweb business, accounted for under ASC 450 Contingencies.

As part of the Acquisition, the Sellers agreed to indemnify Criteo for losses related to certain liabilities, up to an amount of $ 50.0 million.

As such, we have recognized an indemnification asset of $ 50.0 million which is recorded as part of "Other non-current assets" on the consolidated statement of financial position.

Preliminary goodwill.

The Company is assessing the fair value estimate of assets acquired and liabilities assumed as part of the Iponweb Acquisition, based on facts and circumstances that existed as of the Acquisition Date.

This measurement period will not exceed one year from the Acquisition Date.

The excess of the purchase price over the fair value of net assets acquired is allocated to goodwill.

The preliminary goodwill of $ 187.6 million is primarily attributable to synergies expected to be realized from leveraging our technological capabilities and from the existence of an assembled workforce.

Our fair value estimate of assets acquired and liabilities assumed is pending the completion of certain items including the final determination of the purchase price.

Accordingly, there could be adjustments to our consolidated financial statements, including changes in our amortization expense related to the valuation of intangible assets and their respective useful lives, among other adjustments.

Acquisition costs.

Acquisition related costs of $ 1.1 million and $ 12.58 million were recorded within general and administrative expenses on the consolidated statements of comprehensive income for the three and twelve months ended December 31, 2022, respectively.

Impact on profit and loss.

The Company's consolidated statements of operations for the twelve months ended December 31, 2022 includes Iponweb's revenues of $ 52.2 million and pretax income (loss) of $ 2.9 million for the period from the Acquisition Date to December 31, 2022.

On a pro-forma basis, assuming the Acquisition occurred on January 1, 2021, Criteo's consolidated pro-forma revenue and net income or loss would have been as follows:

Pro Forma Consolidated Statement of Operations Data

Three Months Ended Twelve months ended

December 31, 2022 December 31, 2021 December 31, 2022 December 31, 2021

(in thousands)

Revenue $ 565,565 $ 685,396 $ 2,078,109 $ 2,356,377

Net Income (loss) 15,400 69,820 ( 2,502 ) $ 117,012

The historical consolidated financial information has been adjusted in the pro forma combined financial statements to give the effect to pro forma events that are directly attributable to the business combination and are reasonably estimable.

The pro forma information is for informational purposes only and is not indicative of the results of operations that would have been achieved if the Acquisition had taken place at the beginning the Company's fiscal year 2021.

The purchase price allocation has been completed and resulted in recognition of $ 187.6 million of goodwill .

Restructuring

As part of our ongoing transformation, the Company incurred restructuring costs of $ 23.0 million for the year ended December 31,2023.

The following table summarizes restructuring activities as of December 31, 2023 included in other current liabilities on the balance sheet:

Salaries and other benefits

Restructuring liability as of January 1, 2023 $ —

Restructuring charge 22,963

Amounts paid ( 18,591 )

Restructuring liability as of December 31, 2023 $ 4,372

For the year ended December 31,2023 $ 3.5 million, was included in Research and Development expenses, $ 5.6 million, was included in General and Administrative expenses $ 13.9 million was included in Sales and Operations expenses.

Segment information

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The Company reports segment information based on the "management" approach.

The management approach designates the internal reporting used by management for making decisions and assessing performance as the source of the Company's reportable segments.

As a result of the Iponweb Acquisition, the Company reassessed its operating and reportable segments in accordance with ASC 280, Segment Reporting.

Effective August 1, 2022, the Company reports its results of operations through the following three segments:

The management approach designates the internal reporting used by management for making decisions and assessing performance as the source of

the Company's reportable segments.

For the year ended December 31st, 2023, the Company reported its results of operations through the following three segments:

Marketing Solutions, Retail Media and Iponweb.

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This segment specializes in building real-time advertising technology and trading infrastructure, delivering advanced media buying, selling, and packaging capabilities for media owners, agencies, performance advertisers, and 3rd-party ad tech platforms.

Segment operating results, Contribution ex-TAC, is Criteo's segment profitability measure and reflects our gross profit plus other costs of revenue.

The Company's CODM allocates resources to and assesses the performance of each operating segment using information about Contribution ex-TAC, which is Criteo's segment profitability measure and reflects our gross profit plus other costs of revenue.

The CODM does not review any other financial information for our three segments, other than Contribution ex-TAC.

The following table shows revenue by reportable segment:

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Income before tax $ 74,728 $ 42,061 $ 153,816

The Company's CODM does not review any other financial information for our three segments, other than Contribution ex-TAC, at the reportable segment level.

Cash, Cash Equivalents, Marketable Securities and Restricted Cash

Fair value measurements

As of December 31, 2022

Cash and Cash Equivalent Marketable Securities

(in thousands)

Cash 282,293 $ —

Term deposits and notes 65,907 25,098

Total $ 348,200 $ 25,098

As of December 31, 2021

Cash and Cash Equivalent Marketable Securities

(in thousands)

As of December 31, 2023 As of December 31, 2022

Cash and Cash Equivalent Marketable Securities Cash and Cash Equivalent Marketable Securities

(in thousands) (in thousands)

Cash 285,518 $ — 282,293 $ —

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Due in one year $ 5,970 $ —

Due in one to five years $ — $ —

From one to five years

Total $ 22,545 $ —

Restricted Cash

As part of the Iponweb Acquisition (refer to Note 2), we have deposited $ 100.0 million of cash into an escrow account containing withdrawal conditions.

As part of the Iponweb Acquisition in August 2022, we had deposited $ 100.0 million of cash into an escrow account containing withdrawal conditions.

The cash secures the Company's potential payment of Iponweb Acquisition contingent consideration to the Sellers, which is conditioned upon the achievement of certain revenue targets by the Iponweb business for the 2022 and 2023 fiscal years.

We have paid the contingent consideration of $ 22.0 million for the 2022 fiscal year in t he quarter ended March 31, 2023.

December 31, 2023 December 31, 2022

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Balance at beginning of period $ ( 47,792 ) $ ( 45,391 ) $ ( 39,899 )

Allowance for credit losses through retained earnings (*)

— — ( 3,522 )

Provision for doubtful accounts ( 15,709 ) ( 18,641 ) ( 14,433 )

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Balance at end of period $ ( 43,348 ) $ ( 47,792 ) $ ( 45,391 )

(*) From January 1, 2020, we adopted ASU 2016-13, Financial Instruments - Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost issued by the Financial Accounting Standards Board (FASB).

ASU 2016- 13 replaces the existing incurred loss impairment model with an expected loss model which requires the use of forward-looking information to calculate credit loss estimates.

This results in earlier recognition of credit losses.

We adopted ASU 2016-13 effective January 1, 2020 with the cumulative effect of adoption recorded as an adjustment to retained earnings (note 1).

We write off accounts receivable balances once the receivables are no longer deemed collectible.

During the twelve month period ended December 31, 2023, the Company recovered $ 1.4 million, previously reserved for, and accounted for this as a reversal of provision.

Increase due to acquisition includes $( 4.7 ) million related to the Iponweb acquisition.

Credit risk is defined as an unexpected loss in cash and earnings if the client is unable to pay its obligations in due time.

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When a possible risk exposure is identified, we require prepayments or impair Customer credit.

As of December 31, 2022 and 2021, no customer accounted for 10% or more of trade receivables.

As of December 31, 2023, and 2022, no customer accounted for 10% or more of our gross accounts receivables.

Other Current Assets

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Total $ 48,291 $ 51,866

Prepaid expenses mainly consist of costs related to SaaS arrangements.

Prepaid expenses mainly consist of costs related to SaaS arrangements and licenses.

Property and Equipment, Net

Major classes of property and equipment were as follows (in thousands)

As of December 31,

Major classes of property and equipment were as follows:

Year Ended December 31,

(in thousands)

Computer equipment 299,012 292,246

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Total intangible assets, net 415,260 ( 234,372 ) 180,888 357,706 ( 181,723 ) 175,983

Amortization expense was 33.4 million, 22.6 million, and 24.9 million for the year ended December 31, 2022, 2021 and 2020, respectively.

Amortization expense was 48.3 million and 33.4 million for the year ended December 31, 2023, and 2022, respectively.

Software mainly consists of internally developed software.

As of December 31, 2022, expected amortization expense for intangible assets for the next five years and thereafter is as follows (in thousands):

As of December 31, 2023, expected amortization expense for intangible assets for the next five years and thereafter is as follows:

Software Technology and customer relationships Total

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Acquisitions — — 187,600 187,600

Disposal of goodwill — — — —

Currency translation adjustment ( 2,919 ) ( 2,320 ) 3,080 ( 2,159 )

Impairment expense — — — —

Balance at December 31, 2022 $ 180,780 $ 143,680 $ 190,680 $ 515,140

Acquisitions — 5,021 — 5,021

Disposal of goodwill ( 597 ) — — ( 597 )

Currency translation adjustment 1,185 978 2,470 4,633

Impairment expense — — — —

Balance at December 31, 2023 $ 181,368 $ 149,679 $ 193,150 $ 524,197

On February 28, 2023, we completed the acquisition of all of the outstanding shares of Brandcrush Inc.

("Brandcrush"), resulting in a provisional goodwill amounting to $ 5.0 million, subject to post-closing purchase price adjustments.

In addition, on the basis of our impairment assessment as of December 31, 2023, no impairment has been detected.

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On September 27, 2022, we entered into a new Revolving Credit Facility ("RCF") with a five year tenor with a syndicate of banks which allows us to draw up to € 407 million ($ 450 million).

On November 17, 2023, we updated certain terms of our € 407 million ($ 450 million) syndicated credit facility to a € 407 million ($ 450 million) sustainability-linked credit facility, the framework for which was provided for in the initial credit facility agreement.

Certain terms and conditions of the amended credit facility are now linked to our sustainability goals to increase the representation of women in tech roles and reduce our GHG emissions, while the rest of the credit facility agreement remains unchanged.

We are also party to short-term credit lines and overdraft facilities with HSBC plc, BNP Paribas and LCL with an authorization to draw up to a maximum of € 21.5 million ($ 23.8 million) in the aggregate under the short-term credit lines and overdraft facilities.

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Other financial liabilities $ 920 $ 843 $ 77 $ — $ — $ —

Financial derivatives $ 2,546 $ 2,546 $ — $ — $ — $ —

Financial liabilities $ 3,466 $ 3,389 $ 77 $ — $ — $ —

The components of lease expense are as follows:

Three Months Ended Twelve Months Ended

Three Months Ended December 31,

2023 December 31,

Offices Data Centers Total Offices Data Centers Total

(in thousands)

Lease expense $ 3,052 $ 6,193 $ 9,245 $ 2,157 $ 4,971 $ 7,128

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Total operating lease expense $ 3,279 $ 6,193 $ 9,472 $ 1,928 $ 5,065 $ 6,993

Three Months Ended Twelve Months Ended

Twelve Months Ended

2023 December 31,

Offices Data Centers Total Offices Data Centers Total

(in thousands)

Lease expense $ 13,600 $ 23,037 $ 36,637 $ 13,271 $ 20,013 $ 33,284

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As part of the Iponweb Acquisition (refer to Note 2), the Sellers are entitled to contingent consideration of a maximum of $ 100.0 million, which is conditioned upon the achievement of certain revenue targets by the Iponweb business for the 2022 and 2023 fiscal years.

The related earn out liability is valued and discounted using management's best estimate of the consideration that will be paid in 2023 (current portion) and 2024 (non-current portion).

The related earn out liability is valued and discounted using management's best estimate of the consideration that will be paid in 2024 (current portion).

Employee Benefits

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49.0 % - 50.0 %

Expected staff turnover

Company age-based table

0.0 % - 17.8 %

Estimated retirement age

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Issuance of shares under share option and free share plans (1)

( 2,634,619 )

Treasury Shares Issued for RSU Vesting 1,625,742

1 unchanged sentence

Share repurchase program ( 5,135,359 )

( 2,647,742 )

Balance at December 31, 2022 57,263,624

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Treasury Shares Issued for RSU Vesting 1,679,674

Treasury Shares Issued for LUS Vesting

Treasury Shares Retired (4)

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of which Treasury stock ( 5,400,572 )

(1) Adopted by the Board of Directors on February 5, 2021, February 25, 2021, April 29, 2021, June 14, 2021, July 29, 2021, October 28, 2021 and December 15, 2021

(2) Adopted by the Board of Directors on October 28, 2021

(1) (2) Adopted by the Board of Directors on July 28, 2022 and December 7, 2022

(3) (4) Adopted by the Board of Directors on December 7, 2023

Share-Based Compensation

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Tax benefit from equity awards compensation expense 7,864 5,423 4,858

Total equity awards compensation expense, net of tax effect $ ( 59,611 ) $ ( 39,670 ) $ ( 26,050 )

The breakdown of the equity award compensation expense by instrument type was as follows:

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Tax benefit from equity awards compensation expense 7,864 5,423 4,858

Total equity awards compensation expense, net of tax effect $ ( 59,611 ) $ ( 39,670 ) $ ( 26,050 )

A detailed description of each instrument type is provided below.

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No new stock options were granted in the year ending December 31, 2023 and December 31, 2022.

As of December 31, 2022, unrecognized stock-based compensation $ 0.1 million related to unvested stock options will be recognized on a straight-line basis over a weighted average period of 1 year.

As of December 31, 2023, there is no unrecognized stock-based compensation expense related to unvested stock options.

Lock up shares

On August 1, 2022, 2,960,243 Treasury shares were transferred to the Founder (referred to as Lock Up Shares or "LUS", see Note 2), as partial consideration for the Iponweb Acquisition.

On August 1, 2022, 2,960,243 Treasury shares were transferred to the Founder (referred to as Lock Up Shares or "LUS"), as partial consideration for the Iponweb Acquisition.

As these shares are subject to a lock-up period that expires in three installments on each of the first three anniversaries of the Iponweb Acquisition, unless the Founder's employment agreement is terminated under certain circumstances during the pendency of such lock-up period, they are considered as equity settled share-based payments under ASC 718 and are accounted over the three-year vesting period.

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Outstanding as of December 2022 2,960,243

Granted 2,960,243

Vested ( 1,006,482 )

Outstanding as of December 31, 2023 1,953,761 $ 23.94

At December 31, 2022, the Company had unrecognized stock-based compensation relating to restricted stock of approximately $ 55.7 million, which is expected to be recognized over a period of 3 years.

At December 31, 2023, the Company had unrecognized stock-based compensation relating to lock-up shares of approximately $ 17.4 million, which is expected to be recognized over a period from January 2024 to August 1, 2025.

Restricted Stock Units / Performance Stock Units

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Outstanding as of December 31, 2023

660,395 € 28.27

At December 31, 2023, the Company had unrecognized stock-based compensation relating to restricted stock of approximately $ 9.5 million, which is expected to be recognized over a weighted-average period of 3.0 years .

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Outstanding - December 31, 2023

244,457 € 17.65 4.48 € 9.79

Vested and exercisable - December 31, 2023

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Interest and fees ( 2,244 ) ( 2,025 ) ( 2,271 )

Interest on debt ( 1,520 ) ( 1,988 ) ( 2,381 )

Fees ( 505 ) ( 283 ) ( 430 )

Foreign exchange income (loss) ( 7,553 ) 19,659 ( 1,776 )

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Other financial income (expense) ( 161 ) 730 2,369

Other income $ ( 71 ) $ 2,983 $ —

Other income (expense)

$ 8,337 $ ( 71 ) $ 2,983

Total financial and other income (expense) $ ( 2,490 ) $ 17,783 $ 1,939

The $( 2.5 ) million financial and other expense for the period ended December 31, 2023 was mainly driven by proceeds from disposal of non consolidated investments fully offset by the recognition of a negative impact of foreign exchange, including end of year non-cash marked to market , the accretion of earn-out liability related to Iponweb acquisition and financial expense relating to our € 407 million available Revolving Credit Facility (RCF).

At December 31, 2023, our exposure to foreign currency risk was centralized at Criteo S.A.

and hedged using foreign currency swaps or forward purchases or sales of foreign currencies.

The $ 17.8 million financial and other income for the period ended December 31, 2022 was mainly driven by the positive impact of foreign exchange derivatives entered-into to secure the cash consideration of the Iponweb acquisition.

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and hedged using foreign currency swaps or forward purchases or sales of foreign currencies.

The $ 1.9 million financial and other income for the period ended December 31, 2021 was mainly driven by the financial expense relating to our € 350 million available Revolving Credit Facility (RCF) up-front fees amortization and non-utilization costs, partially offset by income from cash and cash equivalent.

Financial and Other income for the period ended December 31, 2021 included other income of $ 3.0 million, generated by the disposal of servers equipments and other financial income of $ 2.4 million consisting of dividends received from an investment.

At December 31, 2021, our exposure to foreign currency risk was centralized at Criteo S.A.

and hedged using foreign currency swaps or forward purchases or sales of foreign currencies.

Breakdown of Income Taxes

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Deferred tax expense (benefit)

( 23,588 ) 3,602 ( 18,642 )

France 634 5,868 ( 9,574 )

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Non-tax deductible provision from loss contingency on regulatory matters (see Note 20)

( 5,546 ) 16,971 —

Nondeductible Expenses 5,274 6,178 6,476

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Intangibles (1)

( 14,972 ) 17,996 — 1,550 653 117 5,344

Gross Deferred Income Taxes 67,276 ( 6,832 ) ( 855 ) 1,564 738 ( 2,569 ) 59,322

3 unchanged sentences

in profit or loss Change recognized

in OCI Purchase Price Accounting Other Currency translation adjustments Year ended December 31, 2022

in OCI Purchase Price Accounting Other Currency translation adjustments

Year ended December 31, 2023

Net deferred tax assets :

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Intangibles (1)

5,344 19,004 — — ( 62 ) 54 24,340

Tax Credits 5,789 ( 1 ) — — — — 5,788

Other 3,944 ( 607 ) — 7 85 ( 293 ) 3,136

Net deferred tax liabilities:

Financial instruments ( 749 ) 1,323 — — 159 4 737

Other 3,136 1,846 — — ( 198 ) 183 4,967

Gross Deferred Income Taxes 59,322 22,365 ( 75 ) — ( 1,077 ) 856 81,391

1 unchanged sentence

Net Deferred Income Taxes 28,183 23,588 ( 30 ) — — ( 144 ) 51,597

(1) Includes Section 174 expense capitalization

Amounts recognized in our Consolidated Financial Statements are calculated at the level of each subsidiary within our Consolidated Financial Statements.

As of December 31, 2023, 2022 and 2021, the valuation allowance against net deferred income taxes amounted to $ 29.8 million, $ 31.1 million and $ 35.0 million, which related mainly to Criteo Corp.

($ 5.7 million, $ 5.7 million and $ 13.3 million, respectively), Criteo Brazil ($ 3.3 million, $ 2.7 million and $ 2.8 million, respectively), Criteo Ltd ($ 8.1 million, $ 7.6 million and $ 7.4 million, respectively), Criteo China ($ 1.1 million, $ 3.3 million and $ 3.3 million, respectively), Criteo Singapore ($ 1.5 million, $ 4.2 million and $ 3.3 million), Criteo Pty ($ 2.6 million, $ 2.7 million and $ 2.8 million) and Criteo France ($ 6.5 million, $ 6.2 million and $ 1.0 million, respectively).

($ 5.7 million, $ 5.7 million and $ 5.7 million, respectively), Criteo Brazil ($ 2.7 million, $ 3.3 million and $ 2.7 million, respectively), Criteo Ltd ($ 10.7 million, $ 8.1 million and $ 7.6 million, respectively), Criteo Singapore ($ 1.2 million, $ 1.5 million and $ 4.2 million), Criteo Pty ($ 2.9 million, $ 2.6 million and $ 2.7 million) and Criteo France ($ 5.0 million, $ 6.5 million and $ 6.2 million, respectively).

The Company mainly has net operating loss carryforwards in the U.S.

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Any unfavorable outcome of such a review or audit could have an adverse impact on our tax rate.

Tax years ending on or after December 31, 2020 are subject to examination in France, and tax years ending on or after December 31, 2020 are subject to examination in the US.

Uncertain Tax Positions

4 unchanged sentences

Beginning balance of unrecognized tax benefits $ 13,315 $ — $ —

Increases related to current year tax positions $ 13,315 — —

Increases (Decreases) related to current year tax positions

$ ( 1,086 ) 13,315 —

Ending balance of unrecognized tax benefits (excluding interest and penalties) $ 12,229 13,315 —

4 unchanged sentences

Our policy is to recognize interest and penalties associated with tax matters as part of the income tax provision and include accrued interest and penalties with the related income tax liability on our consolidated balance sheet.

During the year ended December 31, 2022, interest expense recorded related to uncertain tax positions was $ 0.4 million

Our Uncertain Tax Positions relate to the acquisition of Iponweb.

For more information regarding the acquisitions and UTP items please refer to Note 2 Business Combinations.

The income taxes we pay are subject to review by taxing jurisdictions globally.

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However, our future results may include adjustments to estimates in the period the audits are resolved, which may impact our effective tax rate.

On October 8, 2021, the Organization for Economic Co-operation and Development (OECD) announced the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting which agreed to a two-pillar solution to address tax challenges arising from digitalization of the economy.

On December 20, 2021, the OECD released Pillar Two Model Rules (“Pillar Two”) defining the global minimum tax, which calls for the taxation of a minimum rate of 15% for multinational companies with consolidated revenue above €750 million.

Additional “top-up” tax will be due, either at domestic level (“Qualified Minimum Domestic Top-Up Tax”, or under Pillar Two computation.

Various foreign jurisdictions have already enacted Pillar Two implementation in domestic laws and some other are in the process of doing it as from 2024.

We are currently evaluating the potential impacts on future periods of Pillar Two, based on domestic implementation laws already adopted, new laws to come and local administrative guidelines to be issued.

Earnings Per Share

7 unchanged sentences

Weighted average number of shares outstanding (note 15)

56,170,658 60,004,707 60,717,446

Basic earnings per share $ 0.95 $ 0.15 $ 2.21

25 unchanged sentences

Commitments and contingencies

Purchase Obligations

As of December 31, 2022, we had $ 64.3 million of other non-cancellable contractual obligations, primarily related to software licenses, maintenance and $ 0.7 million bandwidth for our servers.

Contractual Commitments

We have $ 65.0 million of non-cancelable contractual commitments as of December 31, 2023, which are primarily related to software licenses, maintenance and bandwidth for our servers.

The following is a schedule, by years, of non-cancelable contractual commitments as of December 31, 2023 (in millions):

(in thousands)

Total $ 65,006

Contingencies

3 unchanged sentences

The amount of the provisions represents management’s latest estimate of the expected impact.

Regulatory Matters

As previously reported in our Annual Report on Form 10-K for the year ended December 31, 2021, in November 2018, Privacy International filed a complaint with certain data protection authorities, including France's Commission Nationale de l'Informatique et des Libertés ("CNIL"), against Criteo and a number of other similarly situated advertising technology companies, arguing that certain of these companies' practices were not in compliance with the European Union's General Data Protection Regulation ("GDPR").

In January 2020, CNIL opened a formal investigation into Criteo in response to this complaint, and on June 23, 2021, CNIL notified the Company of the appointment of an investigator (rapporteur) for the ongoing investigation.

The investigation also covers another complaint against Criteo received in November 2018 by CNIL from the European Center for Digital Rights ("NOYB").

On August 3, 2022, the assigned rapporteur issued a report that claimed certain GDPR violations, in particular relating to the Company’s contractual relationships with its advertisers and publishers with respect to consent collection oversight.

The report includes a proposed financial sanction against the Company of € 60.0 million ($ 63.9 million).Under the CNIL sanction procedures, Criteo has the right to respond in writing to the report, both with respect to the GDPR findings and the value of the sanction, following which there will be a formal hearing before the CNIL Sanction Committee.

The CNIL Sanction Committee will then issue a draft decision that will be submitted for consultation to other European data protection authorities as part of the cooperation mechanism mandated by GDPR.

Any final decision, including regarding potential financial penalties, will likely not occur until 2023.

Pursuant to U.S.

GAAP, we establish accruals for specific legal proceedings when it is considered probable that a loss has been incurred and the amount of the loss can be reasonably estimated, and these accruals are reviewed and adjusted each quarter based on the information available at that time.

Given the receipt of this report, which included a proposed sanction penalty of € 60.0 million ($ 63.9 million), we have accounted for the proposed penalty as a provision for a loss contingency, which is reflected in our financial statements for the period ended as of December 31, 2022 as general and administrative expenses.

Such amount could be lower or higher based on the final resolution and merits of the claims made in the report.

Legal and Regulatory Matters

Following a complaint from Privacy International against a number of advertising technology companies with certain data protection authorities, including in France, France's Commission Nationale de l'Informatique et des Libertés (the "CNIL") opened a formal investigation in January 2020 against Criteo.

In June 2023, the CNIL issued its decision, which retained alleged GDPR violations but reduced the financial sanction against Criteo from the original amount of € 60.0 million ($ 65.0 million) to € 40.0 million ($ 43.3 million).

Criteo made the required sanction payment in the third quarter of 2023.

The decision relates to past matters and does not include any obligation for Criteo to change its current practices.

Criteo has appealed this decision before the Conseil d’Etat .

The € 40.0 million ($ 43.3 million) penalty was applied against the previously accrued liability for loss contingency reflected in our financial statements for the period ended June 30, 2022, which amounted to € 60.0 million ($ 65.0 million).

Criteo issued the required sanction payment during the third quarter of 2023.

We are party to a claim (Doe v.GoodRx Holdings, Inc.

District Court for the Northern District of California), alleging violations of various state and federal laws.

We intend to vigorously defend our position, but we are unable to predict the potential outcome.

Non income tax risks

1 unchanged sentence

These risks were identified and recognized as part of the Iponweb Acquisition.

We have recorded an indemnification asset in the full amount of the provision as the Company is indemnified against certain tax liabilities under the the FPA.

We have recorded an indemnification asset in the full amount of the provision as the Company is indemnified against certain tax liabilities under the purchase agreement for the Iponweb Acquisition.

The indemnification asset is recorded as part of "Other non current assets" on the consolidated statement of financial position.

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Subsequent Events

There are no significant events that require adjustments or disclosure in the Consolidated Financial Statements.

Beginning in the first quarter of 2024 – following the completion of the integration of our Iponweb acquisition – our Chief Operating Decision Maker, who is our Chief Executive Officer (“CEO”), no longer receives disaggregated information for Iponweb.

As such, we will update our segment financial reporting structure in line with how our CEO assesses performance and allocates resources.

We will have two segments:

Retail Media and Performance Media.

Performance Media combines our former Marketing Solutions and Iponweb segments.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures