Criteo S.A. 10-K

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes appearing elsewhere in this Form 10-K. This section generally discusses 2025 results compared to 2024 results. Discussion of 2024 results compared to 2023 results to the extent not included in this report can be found in Item 7 of our 2024 Annual Report on Form 10-K. To supplement our consolidated financial statements, which are prepared and presented in accordance with generally accepted accounting principles in the United States of America ("GAAP"), we present Contribution ex-TAC, and Adjusted EBITDA, which are non-GAAP financial measures. We define Contribution ex-TAC as a profitability measure akin to gross profit. It is calculated by deducting traffic acquisition costs from revenue and reconciled to gross profit through the exclusion of other costs of revenue. Contribution ex-TAC is presented in the section entitled "Contribution excluding Traffic Acquisition Costs", which includes a reconciliation to its most directly comparable GAAP financial measure, Gross Profit. We define Adjusted EBITDA as our consolidated earnings before financial income (expense), income taxes, depreciation and amortization, adjusted to eliminate the impact of equity related compensation, which includes employee equity awards compensation and director fees for share purchases, pension service costs, certain acquisition costs, certain restructuring and related costs, integration and transformation costs, and other nonrecurring or non cash items impacting net income that we do not consider indicative of our business performance. Adjusted EBITDA is presented in the section entitled "Adjusted EBITDA", which includes a reconciliation to its most directly comparable GAAP financial measure, Net Income. We also present revenues, traffic acquisition costs and Contribution ex-TAC on a constant currency basis; these measures exclude the impact of foreign currency fluctuations and are computed by applying the average exchange rates for the prior year to the current year figures. A reconciliation is provided in the section entitled "Constant Currency Reconciliation". We believe these non-GAAP financial measures provide investors with useful supplemental information about the financial performance of our business, enable comparison of financial results between periods where certain items may vary independent of business performance, and allow for greater transparency with respect to key metrics used by management in operating our business. As required by the rules of the SEC, we provide reconciliations of the non-GAAP financial measures contained in this document to the most directly comparable measures under GAAP. Overview We are a global technology company driving superior commerce outcomes for marketers and media owners through the world’s leading Commerce Intelligence Platform. We operate in digital advertising, leveraging commerce data and AI to connect ecommerce, digital marketing and media monetization to reach consumers throughout their entire shopping journey. Our vision is to bring richer experiences to every consumer by supporting a fair and open internet that enables discovery, innovation , and choice – powered by trusted and impactful advertising. We have accelerated and deeply transformed the Company from a single-product to a multi-solution platform provider, fast diversifying our business into new solutions. We report our financial results based on two reportable segments: Retail Media and Performance Media. – Retail Media: This segment encompasses revenue generated from brands, agencies and retailers for the purchase and sale of retail media digital advertising inventory and audiences, and services. – Performance Media: This segment encompasses our targeting capabilities and supply and AdTech services. 58 Full Year 2025 financial highlights For the year ended December 31, 2025 , revenue was $1,944.9 million , up 1% compared to the prior year, reflecting growth in Retail Media and flat revenue in Performance Media. At constant currency, revenue was flat. Gross profit for the year ended December 31, 2025 increased by 7% to $1,049.4 million , compared to the prior year, primarily due to lower traffic acquisition costs, lower hosting costs and a decrease in depreciation expense of data center servers. Contribution ex-TAC for the year ended December 31, 2025 increased by 5% to $1,174.6 million , compared to the prior year, driven by growth in Retail Media and Performance Media. At constant currency, Contribution ex-TAC increased by 3% . Net income for the year ended December 31, 2025 increased by 30% to $149.4 million , compared to the prior year, primarily due to higher gross profit. Adjusted EBITDA for the year ended December 31, 2025 increased by 4% to $406.7 million , compared to the prior year, primarily due to higher Contribution ex-TAC, partially offset by an increase in operating expenses. Cash flow from operating activities was $311.2 million for the year ended December 31, 2025 , compared to $258.2 million in the prior year. Trends, Opportunities and Challenges We believe our performance and future success depend on several factors that present significant opportunities but also pose risks and challenges, including those referred to in Part I, Item 1A. As previously disclosed, our largest customer notified us that they will curtail the scope of future services commencing November 1, 2025. For the year ended December 31, 2025 , this customer accounted for 5 % of our total reve nue. The anticipated reduction in revenue was reflected in our updated financial projections and incorporated into our annual goodwill impairment test for the year ended December 31, 2025. Based on our quantitative assessment, the estimated fair value of the Retail Media reporting unit exceeded its carrying value and no impairment was recorded. Further reductions in projected revenue, margin performance, or adverse changes in market conditions could reduce the estimated fair value, and may result in g oodwill impairment in future periods. During 2025, a large U.S. retailer – that is a customer primarily in our Performance Media segment – experienced financial difficulty and subsequently filed for bankruptcy. As of year end 2025, the Company recorded a full allowance for $5.9 million for the related receivables . Develop and Scale our Commerce Intelligence Platform Our future growth depends upon our ability to retain and scale our existing clients and increase the usage of our platform as well as adding new customers. We believe that we are in a leading position in the Commerce Media space as we have unique commerce data at scale, deep integrations with retailers, a large client base, differentiated technology and an R&D powerhouse. By unifying the Commerce Media ecosystem with a multi-retailer, multi-channel, multi-format approach and providing full funnel closed loop measurement to our clients, we believe we are well positioned to capture more ad budgets and market share. Business and Macroeconomic Conditions Global economic and geopolitical conditions remained volatile in 2025, including continued inflationary pressures in certain markets, and high interest rates. The economic uncertainty resulting from these factors may negatively impact advertising demand, consumer spending behavior, and our business performance. 59 These factors, among others, including inflationary pressures and changes in political and economic policies such as the introduction of new or additional tariffs, make it difficult for Criteo and our clients to accurately forecast and plan future business activities. As a result, our clients may reduce, delay, or more cautiously allocate their advertising spending, which could adversely affect our business, financial condition and results of operations. We continue to monitor macroeconomic conditions closely and may take actions in response to such conditions to the extent they adversely affect our business. Seasonality In the advertising industry, companies commonly experience seasonal fluctuations in revenue, as many marketers allocate the largest portion of their budgets to the third and fourth quarter of the calendar year in order to coincide with increased back-to-school and holiday purchasing. Historically, the fourth quarter has reflected our highest level of advertising activity for the year. We generally expect the subsequent first quarter to reflect lower activity levels. In addition, historical seasonality may not be predictive of future results given the potential for changes in advertising buying patterns and consumer activity due to the potential impacts of the evolving macroeconomic and geopolitical conditions discussed above. We expect our revenue to continue to fluctuate based on seasonal factors that affect the advertising industry as a whole. Privacy Trends and Government Regulations We are subject to U.S. and international laws and regulations regarding privacy, data protection, digital advertising and the collection of user data. In addition, large Internet and technology companies such as Google and Apple are making their own decisions as to how to protect consumer privacy with measures resulting in signal loss, which impact the entire digital ecosystem. We have developed a multi-pronged addressability strategy to provide scalability and runtime interoperability of privacy-safe solutions for a more open, unified and efficient ecosystem. 60 A. Operating Results Critical Accounting Estimates Our consolidated financial statements have been prepared in accordance with GAAP. The preparation of our consolidated financial statements requires us to make estimates, assumptions and judgments that affect the reported amounts of revenue, assets, liabilities, costs and expenses. We base our estimates and assumptions on historical experience and other factors that we believe to be reasonable under the circumstances. We evaluate our estimates and assumptions on an ongoing basis. Our actual results may materially differ from these estimates. An accounting policy is deemed to be critical if it requires an accounting estimate to be made on assumptions about matters that are highly uncertain at the time the estimate is made, if different estimates reasonably could have been used, or if changes in the estimate that are reasonably possible could materially impact the financial statements. We believe estimates associated with (1) revenue recognition, including judgments made in the determination of whether we are acting as a principal or agent (2) income taxes, including i) recognition of deferred tax assets arising from the subsidiaries projected taxable profit for future years, ii) evaluation of uncertain tax positions and iii) recognition of income tax position in respect with tax reforms recently enacted in countries where we operate, (3) assumptions used in valuing long-lived assets including intangible assets, and goodwill, and (4) assumptions surrounding the recognition and valuation of contingent liabilities and losses, are critical as they are made based on assumptions about matters which are uncertain. See Note 1 Principles and Accounting Methods to our audited consolidated financial statements beginning on page F-1 for a description of our other significant accounting policies. Revenue Recognition The determination as to whether revenue should be reported gross of amounts billed to customers or net of payments to publishers requires significant judgment, and is based on our assessment of whether we are acting as the principal or an agent in a transaction. For revenue generated from arrangements that involve purchasing inventory from media owners, we consider whether we obtain control of the services before they are transferred to the customer, or if we are acting primarily as an agent or intermediary. The assessment of whether we are considered the principal or the agent in a transaction could impact our revenue and cost of revenue recognized in the consolidated statements of income. For additional information regarding revenue and the assumptions used for determining our revenue recognition refer to Note 1 Principles and Accounting Methods of our financial statements. Income taxes We are subject to income taxes in France and numerous foreign jurisdictions. We record deferred taxes on all temporary differences between the financial reporting and tax bases of assets and liabilities, and on tax losses, using the liability method. The measurement of deferred income tax assets is reduced, when necessary, by a valuation allowance for any tax benefits which are not expected to be realized. If future taxable profits are considerably different from those forecasted that support recording deferred tax assets, we will revise the amount of the deferred tax assets downwards or upwards, which could have a significant impact on our financial results. We recognize the tax benefits arising 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 and development 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 to sustain the position. Valuation of Long-lived Assets including Goodwill and Intangible Assets We allocate the fair value of purchase consideration to the tangible assets acquired, liabilities assumed, and intangible assets acquired based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill and allocated to reporting units based on the expected benefit from the business combination. Such valuations require management to make significant estimates and assumptions, especially with respect to intangible assets. Significant estimates in valuing certain intangible assets include, but are not limited to, estimated replacement costs and future expected cash flows from acquired users, acquired technology, acquired patents, and trade names from a market participant perspective, useful lives, and discount rates. 61 Management's estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. Allocation of purchase consideration to identifiable assets and liabilities affects our amortization expense, as acquired finite-lived intangible assets are amortized over the useful life, whereas any indefinite-lived intangible assets, including goodwill, are not amortized. During the measurement period, which is not to exceed one year from the acquisition date, we may record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. Upon the conclusion of the measurement period, any subsequent adjustments are recorded to earnings. Goodwill is tested for impairment at the reporting unit level annually, or more frequently if events or changes in circumstances would indicate that the fair value of a reporting unit may be below its carrying value. Fair value is estimated using a discounted cash flow model. Goodwill has been allocated to segments using a relative fair value allocation approach. The annual impairment test incorporated updated revenue projections, including the anticipated impact of the reduction in services from our largest customer, which resulted in a decrease in the excess of fair value over carrying value for the Retail Media reporting unit compared to the prior year. Fair value continued to exceed carrying value. For the year ended December 31, 2025 , no impairment of goodwill has been identified. Long-lived assets, including property and equipment and finite-lived intangible assets are reviewed for impairment whenever events or circumstances indicate that the carrying amount of such assets may not be recoverable. The evaluation is performed at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. Recoverability of these assets is measured by a comparison of the carrying amounts to the future undiscounted cash flows the assets are expected to generate from the use and eventual disposition. If such review indicates that the carrying amount of property and equipment and intangible assets is not recoverable, the carrying amount of such assets is reduced to fair value. Contingent Losses and Liabilities With respect to litigation, claims and other 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 non-income tax risks. Contingency provisions are recognized when they are determined to be both probable and estimable. These judgments and estimates are subject to change as new information becomes available. Change in Accounting Estimate In January 2025, we completed an assessment of the useful lives of our servers and network equipment, resulting in a change in the estimated useful life of certain servers and network equipment from five to six years. This change in accounting estimate is effective beginning fiscal year 2025. For additional information regarding the change in useful lives refer to Note 1 Principles and Accounting Methods of our financial statements. During the second quarter of 2025, Alphabet Inc. announced its decision not to proceed with the deprecation of third-party cookies in its Chrome browser. As a result, the Company recorded accelerated amortization of $7.9 million and a nonrecurring impairment charge of $0.9 million related to internally developed intangible assets developed in response to the deprecation of third-party cookies. Components of Results of Operations The key elements of our results of operations include: Revenue For Retail Media, we generate revenue by providing our platform to brands, agencies and retailers for the purchase and sale of digital advertising inventory. Generally, our revenue is based on a percentage of working media spend that runs through our platform. The working media spend running through the platform depends on various factors, such as but not limited to the number of customers using the platform and the budgets allocated by brands and agencies to the Criteo platform. In Retail Media, we also generate revenue by providing professional services to our customers. Retail Media revenue is primarily recognized on a net basis, as we act as an agent in the transaction. For Performance Media, we primarily generate revenues by delivering personalized display advertisements featuring product-level recommendati ons to our customers, including brands and advertising agencies . 62 Such prod ucts are generally sold based on a click or impression based pricing model. Revenues are recognized when an ad is clicked on or displayed to the end user as that is 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. The amount we charge to the customers varies depending on the optimization strategy of the Criteo engine, the dynamics and performance of the market, amongst other factors. Performance Media revenue can be recognized on a gross or net basis as we act either as a principal or an agent in the transaction. The determination of whether we act as a principal or an agent on a product or contract level is primarily based on the following factors: (i) whether we control the advertising inventory before it is transferred to our clients, (ii) whether we have inventory risks or purchase the inventory upfront and (iii) whether we have discretion in establishing prices. Refer to Note 1 Principles and Accounting Methods of our financial statements for a description of our revenue recognition policies. Cost of Revenue Our cost of revenue includes traffic acquisition costs and other cost of revenue. Traffic acquisition costs consist primarily of purchases of impressions from publishers on a cost-per-thousand-impressions (" CPM") basis, incurred to generate our revenues, for the Performance Media segment. We purchase impressions directly from publishers or third-party intermediaries, such as advertisement exchanges. We recognize cost of revenue on a publisher by publisher basis as incurred. Costs owed to publishers but not yet paid are recorded in our Consolidated Statements of Financial Position as trade payables. 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.E -Trend Information below. Other cost of revenue includes expenses related to depreciation of data center equipment, costs to lease data centers, cost of data purchased from third parties, digital taxes, and third-party hosting fees. The Company does not build or operate its own data centers and none of its Research and Development employees are dedicated to revenue generating activities. As a result, we do not include the costs of such personnel in other cost of revenue. Operating Expenses Operating expenses consist of research and development, sales and operations, and general and administrative expenses. Salaries, bonuses, equity awards compensation, pension benefits and other personnel-related costs are the most significant components of each of these expense categories. Research and development expenses consist primarily of headcount-related expenses for our employees working in the engine, platform, site reliability engineering, scalability, infrastructure, engineering program management, product, analytics and other teams, including salaries, bonuses, share-based compensation and other personnel related costs. Also included are non-personnel costs such as subcontracting, consulting and professional fees to third-party development resources, allocated overhead, including internal IT and depreciation and amortization costs. These expenses are partially offset by the French research tax credit that is conditional upon the level of our expenditures in research and development. Sales and operations expenses consist primarily of headcount-related expenses for our employees working in our sales, account strategy, sales operations, publisher business development, analytics, marketing, technical solutions, creative services and other teams, including salaries, bonuses, share-based compensation, and other personnel-related costs. Additional expenses in this category include travel and entertainment, marketing and promotional events, marketing activities, provisions for doubtful accounts, subcontracting, consulting and professional fees paid to third parties, allocated overhead, including internal IT costs. General and administrative expenses consist primarily of headcount-related expenses, including salaries, bonuses, share- based compensation, pension benefits and other personnel-related costs for our administrative, legal, information technology, human resources, facilities and finance teams. Additional expenses included in this category include travel- related expenses, subcontracting and professional fees, audit fees, tax services and legal fees, as well as insurance and other corporate expenses, along with allocated overhead, including internal IT costs. Financial and Other Income (Expense) Financial and Other Income (Expense) primarily consists of: • Exchange differences arising on the settlement or translation into local currency of monetary balance sheet items labeled in euros (the Company's functional currency). At December 31, 2025 , our exposure to foreign currency risk was 63 centralized at parent company level and hedged. These exchange differences in euro are then translated into U.S. dollars (the Company's reporting currency) according to the average euro/U.S. dollar exchange rate. • Interest received on our cash and cash equivalents and interest incurred on outstanding borrowings under our debt loan agreements and revolving credit facilities ("RCFs") . • Other income (expense) mainly arising from gains and losses on investments. Provision for Income Taxes We are subject to income taxes in France, the U.S. and numerous other jurisdictions. We recognize tax liabilities based on estimates of whether additional taxes will be due. These tax liabilities are recognized when we believe that certain positions may not be fully sustained upon review by tax authorities, notwithstanding our belief that our tax return positions are supportable. Our effective tax rates differ from the statutory rate applicable to us primarily due to valuation allowance on deferred tax assets, differences between domestic and foreign jurisdiction tax rates, Research Tax Credit offsets, which are non-taxable items, potential tax audit provision settlements, share-based compensation expenses that are non-deductible in some jurisdictions under certain circumstances, non-tax deductible provision from the loss contingency on regulatory matter, and transfer pricing adjustments. We license access to our technology to our subsidiaries and charge a royalty fee to these subsidiaries for such access. In France, we benefit from a reduced tax rate of 10% on a large portion of this technology royalty income. Recent Accounting Pronouncements For a discussion of recent accounting pronouncements applicable to us, see Note 1 Principles and Accounting Methods to our audited consolidated financial statements beginning on page F-1. 64 Results of Operations for the Years Ended December 31, 2025 , 2024 and 2023 Revenue breakdown by segment Year Ended December 31, 2025 2024 2023 2025 vs 2024 2024 vs 2023 (in thousands) Revenue as reported $ 1,944,901 $ 1,933,289 $ 1,949,445 1 % (1) % Conversion impact U.S. dollar/other currencies (21,134) 24,509 8,927 Revenue at constant currency $ 1,923,767 $ 1,957,798 $ 1,958,372 — % — % Retail Media as reported $ 263,872 $ 258,303 $ 209,007 2 % 24 % Conversion impact U.S. dollar/other currencies (705) 572 (1,143) Retail Media at constant currency $ 263,167 $ 258,875 $ 207,864 2 % 24 % Performance Media revenue as reported $ 1,681,029 $ 1,674,986 $ 1,740,438 — % (4) % Conversion impact U.S. dollar/other currencies (20,429) 23,937 10,070 Performance Media revenue at constant currency $ 1,660,600 $ 1,698,923 $ 1,750,508 (1) % (2) % 2025 Compared to 2024 Revenue in 2025 increased $11.6 million , or 1% (or flat on a constant currency basis) to $1,944.9 million compared to 2024 . The year-over-year increase in revenue was driven by the increase in Retail Media revenue and flat Performance Media revenue. Retail Media revenue increased 2% (or 2% on a constant currency basis) to $263.9 million for 2025 , driven by continued strength in Retail Media onsite, in particular in the U.S. market, and growing network effects of onboarding brands and retailers to the platform, partially offset by the temporary impact of previously communicated scope changes with two specific Retail Media clients. Performance Media revenue remained flat (or decreased (1)% on a constant currency basis) to $1,681.0 million for 2025 , driven by lower spend in our AdTech services and supply business and soft retail trends, in particular related to fashion, partially offset by continued strength in travel and marketplaces. In the year ended December 31, 2025 , approximately 91% of revenue came from existing clients while 9% came from new client additions. Additionally, our $1,944.9 million of revenue for 2025 was positively impacted by $21.1 million of currency fluctuations, primarily as a result of the euro growing stronger compared to the U.S. dollar. 2024 compared to 2023 Revenue in 2024 decreased $(16.2) million , or (1)% (or flat on a constant currency basis) to $1,933.3 million compared to 2023 . The year-over-year decrease in revenue was driven by lower Performance Media partially offset by the increase in Retail Media revenue. Retail Media re venue increased 24% (or 24% on a constant currency basis) to $258.3 million for 2024 , driven by continued strength in Retail Media onsite, in particular in the U.S. market, and growing network effects of onboarding brands and retailers to the platform. Performance Media revenue decreased (4)% (or (2)% on a constant currency basis) to $1,675.0 million for 2024 , driven by lower spend in our AdTech services and supply business, soft retail trends, partially offset by continued strength in travel and marketplaces. 65 Additionally, $1,933.3 million of revenue for 2024 was negatively impacted by $24.5 million of currency fluctuations, particularly as a result of the depreciation of the euro compared to the U.S. dollar. Revenue breakdown by region Year Ended December 31, % change 2025 2024 2023 2025 vs 2024 2024 vs 2023 (in thousands) Revenue as reported $ 1,944,901 $ 1,933,289 $ 1,949,445 1 % (1) % Conversion impact U.S. dollar/other currencies (21,134) 24,509 8,927 Revenue at constant currency $ 1,923,767 $ 1,957,798 $ 1,958,372 — % — % Americas Revenue as reported $ 836,670 $ 892,175 $ 887,247 (6) % 1 % Conversion impact U.S. dollar/other currencies 2,716 3,816 (2,638) Revenue at constant currency $ 839,386 $ 895,991 $ 884,609 (6) % 1 % EMEA Revenue as reported $ 728,052 $ 676,455 $ 672,610 8 % 1 % Conversion impact U.S. dollar/other currencies (25,476) 1,283 (28,430) Revenue at constant currency $ 702,576 $ 677,738 $ 644,180 4 % 1 % Asia-Pacific Revenue as reported $ 380,179 $ 364,659 $ 389,588 4 % (6) % Conversion impact U.S. dollar/other currencies 1,626 19,410 39,995 Revenue at constant currency $ 381,805 $ 384,069 $ 429,583 5 % (1) % 2025 Compared to 2024 Our revenue in the Americas region decreased $(55.5) million or (6)% (or (6)% on a constant currency basis) to $836.7 million for 2025 compared to 2024 . This reflects lower Performance Media revenue primarily due to soft retail trends and lower spend in our supply and AdTech services , partially offset by growth in Retail Media. Our revenue in the EMEA region increased $51.6 million , or 8% (or 4% on a constant currency basis) to $728.1 million for 2025 compared to 2024 . This increase was driven by an increase in Performance Media primarily due to strength in travel, slightly offset by a decrease in Retail Media. Our revenue in the Asia-Pacific region increased $15.5 million , or 4% (or 5% on a constant currency basis) to $380.2 million for 2025 compared to 2024 . The increase was driven by growth in Retail Media and in Performance Media. The Performance Media increase was driven by strong travel and marketplace trends, partially offset by soft retail trends in the region. 2024 Compared to 2023 Our revenue in the Americas region increased $4.9 million or 1% (or 1% on a constant currency basis) to $892.2 million for 2024 compared to 2023 . This reflects continued strong performance of Retail Media as the platform continues to scale with large retailers and consumer brands, and strength in travel and marketplaces in Performance Media, partially offset by soft retail trends and lower spend in our AdTech services and supply business. Our revenue in the EMEA region increased $3.8 million , or 1% (or 1% on a constant currency basis) to $676.5 million for 2024 compared to 2023 . This increase was driven by continued traction in Retail Media and continued strength in travel and marketplaces, partially offset by soft retail trends. 66 Our revenue in the Asia-Pacific region decreased $(24.9) million , or (6)% (or (1)% on a constant currency basis) to $364.7 million for 2024 compared to 2023 . The decrease was driven by soft marketplace trends, partially offset by solid retail and travel trends in the region. Cost of Revenue Year Ended December 31, % change 2025 2024 2023 2025 vs 2024 2024 vs 2023 (in thousands, except percentages) Traffic acquisition costs $ 770,284 $ 811,806 $ 926,839 (5)% (12)% Other cost of revenue 125,237 138,512 159,562 (10)% (13)% Total cost of revenue $ 895,521 $ 950,318 $ 1,086,401 (6)% (13)% % of revenue 46 % 49 % 56 % % of Gross profit 54 % 51 % 44 % Year Ended December 31, % change 2025 2024 2023 2025 vs 2024 2024 vs 2023 (in thousands, except percentages) Retail Media $ 4,188 $ 4,457 $ 5,547 (6)% (20)% Performance Media 766,096 807,349 921,292 (5)% (12)% Traffic Acquisition Costs $ 770,284 $ 811,806 $ 926,839 (5)% (12)% 2025 Compared to 2024 Total cost of revenue for 2025 decreased $(54.8) million , or (6)% , compared to 2024 . This decrease was primarily the result of a $(41.5) million , or (5)% decrease in traffic acquisition costs (or (6)% on a constant currency basis), and $(13.3) million , or (10)% decrease in other cost of revenue. The decrease in Performance Media's traffic acquisition costs of (5)% (or (6)% on a constant currency basis) related primarily to the 5% decrease in the average CPM for inventory purchased, including lower CPMs for signal-limited environments where Criteo continues to perform, while the number of impressions we purchased was flat compared to last year. Traffic acquisition costs in Retail Media decreased by (6)% . The decrease in other cost of revenue includes a decrease in depreciation of data center servers of $(9.3) million, hosting costs of $(3.2) million and other cost of sales of $(0.8) million. 2024 Compared to 2023 Cost of revenue for 2024 decreased $(136.1) million , or (13)% , compared to 2023 . This decrease was primarily the result of a $(115.0) million , or (12)% decrease in traffic acquisition costs (or (11)% on a constant currency basis), and $(21.1) million , or (13)% decrease in other cost of revenue. The decrease in Performance Media's traffic acquisition costs of (12)% (or (11)% on a constant currency basis) related primarily to the (19)% decrease in the average CPM for inventory purchased, including lower CPMs for signal-limited environments where Criteo continues to perform, partially offset by an 8% increase in the number of impressions we purchased, reflecting our expanding relationships with existing and new publisher partners, in particular through direct connections, to support client demand for advertising campaigns. Traffic acquisition costs in Retail Media decreased by (20)% . The decrease in other cost of revenue includes a decrease in depreciation of data center servers of $(11.2) million, other cost of sales of $(7.5) million and hosting costs of $(2.4) million. 67 Contribution excluding Traffic Acquisition Costs We define Contribution excluding Traffic Acquisition Costs, "Contribution ex-TAC", as a profitability measure akin to gross profit. It is calculated by deducting traffic acquisition costs from revenue and reconciled to gross profit through the exclusion of other costs of revenue. Contribution ex-TAC is not a measure calculated in accordance with U.S. GAAP. We have included Contribution ex-TAC because it is a key measure used by our management and board of directors to evaluate operating performance, generate future operating plans and make strategic decisions. In particular, we believe that this measure can provide useful measures for period-to-period comparisons of our business. Accordingly, we believe that Contribution ex-TAC provides useful information to investors and others in understanding and evaluating our results of operations in the same manner as our management and board of directors. Our use of Contribution ex-TAC has limitations as an analytical tool, and you should not consider them in isolation or as a substitute for analysis of our financial results as reported under U.S. GAAP. Some of these limitations are: (a) other companies, including companies in our industry which have similar business arrangements, may address the impact of TAC differently; (b) other companies may report Contribution ex-TAC or similarly titled measures but calculate them differently, which reduces their usefulness as a comparative measure. Because of these and other limitations, you should consider Contribution ex-TAC alongside our other U.S. GAAP financial measures. The below table provides a reconciliation of Contribution ex-TAC to gross profit: Year Ended December 31, % change 2025 2024 2023 2025 vs 2024 2024 vs 2023 (in thousands, except percentages) Gross Profit $ 1,049,380 $ 982,971 $ 863,044 7 % 14 % Other Cost of Revenue 125,237 138,512 159,562 (10) % (13) % Contribution ex-TAC $ 1,174,617 $ 1,121,483 $ 1,022,606 5 % 10 % 68 The following table sets forth our revenue and Contribution ex-TAC by segment: Year Ended December 31, % change Segment 2025 2024 2023 2025 vs 2024 2024 vs 2023 (in thousands) Revenue Retail Media $ 263,872 $ 258,303 $ 209,007 2 % 24 % Performance Media 1,681,029 1,674,986 1,740,438 — % (4) % Total $ 1,944,901 $ 1,933,289 $ 1,949,445 1 % (1) % Contribution ex-TAC Retail Media $ 259,684 $ 253,846 $ 203,460 2 % 25 % Performance Media 914,933 867,637 819,146 5 % 6 % Total $ 1,174,617 $ 1,121,483 $ 1,022,606 5 % 10 % Gross Profit increased $66.4 million , or 7% for the twelve months ended December 31, 2025 compared to the twelve months ended December 31, 2024, and Contribution ex-TAC increased $53.1 million , or 5% for the twelve months ended December 31, 2025 compared to the twelve months ended December 31, 2024 . The increase in Gross Profit and Contribution ex-TAC was driven by growth in Retail Media and lower traffic acquisition costs in Performance Media, related primarily to the decrease of the average CPM for inventory purchased. Gross Profit increased $119.9 million , or 14% for the twelve months ended December 31, 2024 compared to the twelve months ended December 31, 2023 , and Contribution ex-TAC increased $98.9 million , or 10% for the twelve months ended December 31, 2024 compared to the twelve months ended December 31, 2023 . The increase in Gross Profit and Contribution ex-TAC was driven by continuous growth in Retail Media, in particular in the U.S. market, and lower traffic acquisition costs in Performance Media, related primarily to the decrease of the average CPM for inventory purchased. Constant Currency Reconciliation Information in this Form 10-K with respect to results presented on a constant currency basis was calculated by applying prior period average exchange rates to current period results. Management reviews and analyzes business results excluding the effect of foreign currency translation because they believe this better represents our underlying business trends. Below is a table which reconciles the actual results presented in this section with the results presented on a constant currency basis: Year Ended December 31, % change 2025 2024 2023 2025 vs 2024 2024 vs 2023 (in thousands) Revenue as reported $ 1,944,901 $ 1,933,289 $ 1,949,445 1 % (1) % Conversion impact U.S. dollar/other currencies (21,134) 24,509 8,927 Revenue at constant currency $ 1,923,767 $ 1,957,798 $ 1,958,372 — % — % Traffic acquisition costs as reported $ 770,284 $ 811,806 $ 926,839 (5) % (12) % Conversion impact U.S. dollar/other currencies (7,198) 9,529 5,815 Traffic acquisition cost at constant currency $ 763,086 $ 821,335 $ 932,654 (6) % (11) % Contribution ex-TAC as reported $ 1,174,617 $ 1,121,483 $ 1,022,606 5 % 10 % Conversion impact U.S. dollar/other currencies (13,936) 14,980 3,112 Contribution ex-TAC at constant currency $ 1,160,681 $ 1,136,463 $ 1,025,718 3 % 11 % Other cost of revenue as reported $ 125,237 $ 138,512 $ 159,562 (10) % (13) % Gross profit as reported $ 1,049,380 $ 982,971 $ 863,044 7 % 14 % 69 Research and Development Expenses Year Ended December 31, % change 2025 2024 2023 2025 vs 2024 2024 vs 2023 (in thousands, except percent of revenue) Research and development expenses $ 283,303 $ 279,341 $ 242,289 1% 15% % of revenue 15 % 14 % 12 % 2025 Compared to 2024 Research and development expenses for 2025 increased $4.0 million , or 1% , compared to 2024 . This increase mainly related to an increase in amortization of intangibles and headcount-related expenses, partially offset by a decrease in share-based compensation. 2024 Compared to 2023 Research and development expenses for 2024 increased $37.1 million , or 15% , compared to 2023 . This increase mainly related to an increase in amortization of intangibles and headcount-related expenses. Sales and Operations Expenses Year Ended December 31, % change 2025 2024 2023 2025 vs 2024 2024 vs 2023 (in thousands, except percent of revenue) Sales and operations expenses $ 394,370 $ 376,090 $ 406,012 5% (7)% % of revenue 20 % 19 % 21 % 2025 Compared to 2024 Sales and operations expenses for 2025 increased $18.3 million , or 5% , compared to 2024 . This increase was mainly driven by an increase in headcount-related expenses due to a one-time planned company-wide event, third-party services costs, and marketing costs. 2024 Compared to 2023 Sales and operations expenses for 2024 decreased $(29.9) million , or (7)% , compared to 2023 . This decrease was mainly driven by a decrease in headcount-related expenses, bad debt expense and rent and facilities cost partially offset by marketing costs. General and Administrative Expenses Year Ended December 31, % change 2025 2024 2023 2025 vs 2024 2024 vs 2023 (in thousands, except percent of revenue) General and administrative expenses $ 168,942 $ 176,138 $ 137,525 (4)% 28% % of revenue 9 % 9 % 7 % 2025 Compared to 2024 General and administrative expenses for 2025 decreased $(7.2) million , or (4)% , compared to 2024 . This decrease was mainly related to lower share-based compensation expense, nonrecurring change in the fair value of the earn-out related to the Iponweb acquisition in 2024, partially offset by higher provision for risk and charges. 70 2024 Compared to 2023 General and administrative expenses for 2024 increased $38.6 million , or 28% , compared to 2023 . This increase was mainly related to the partial reversal of the loss contingency in 2023 related to the CNIL matter as described in Note 19 Commitments and contingencies, as well as third party services costs partially offset by a decrease of headcount-related expenses. Financial and Other Income (Expense) Year Ended December 31, % change 2025 2024 2023 2025 vs 2024 2024 vs 2023 (in thousands, except percent of revenue) Financial and Other Income (Expense) $ 809 $ 3,095 $ (2,490) (74)% (224)% % of revenue — % 0.2 % (0.1) % 2025 Compared to 2024 Financial and Other Income for 2025 decreased by $(2.3) million , or (74)% compared to 2024 . The $0.8 million financial and other income for the period ended December 31, 2025 was mainly driven by interests income offset by the recognition of a negative impact of foreign exchange, including end of year noncash marked to market, and financial expenses related to our €407 million available Revolving Credit Facility (RCF). 2024 Compared to 2023 Financial and Other Income for 2024 increased by $5.6 million , or 224% compared to 2023 . The $3.1 million financial and other income for the period ended December 31, 2024 was mainly driven by interest income offset by the recognition of a negative impact of foreign exchange, including end of year noncash marked to market, the accretion of earn-out liability related to the Iponweb acquisition and financial expense relating to our €407 million available Revolving Credit Facility (RCF). 71 Provision for Income Taxes Year Ended December 31, % change 2025 2024 2023 2025 vs 2024 2024 vs 2023 (in thousands, except percent information) Provision for income taxes $ 54,195 $ 39,784 $ 20,084 36% 98% % of revenue 3 % 2 % 1 % Effective tax rate 26.6 % 25.8 % 26.9 % 2025 Compared to 2024 The provision for income tax expense for 2025 increased by $14.4 million , or 36% , compared to 2024 , mainly due to the higher income before tax in 2025 . The annual effective tax rate for 2025 was 26.6% , compared to an annual effective tax rate of 25.8% for 2024 . The effective tax rate in 2025 was primarily impacted by changes in unrecognized tax benefits and higher state taxes in the U.S., partially offset by valuation allowance releases, and income taxed at reduced rates in France. In 2025 , our income before taxes increased by $49.1 million to $203.6 million , compared to 2024 , generating a $52.6 million theoretica l income tax expense at a nominal standard French tax rate of 25.8% . This theoretical tax expense is impacted mainly by the following items contributing to a $54.2 million effective tax expense and a 26.6% effective tax rate: $10.4 million related to a change in unrecognized tax benefits, $8.9 million of state taxes, $4.8 million of other taxes presented as income taxes, and $3.5 million of non-deductible salaries for officers in the U.S. These items were partially offset by $(10.5) million related to valuation allowance releases, $(9.3) million of income eligible for a reduced taxation rate, $(6.0) million attributable to the effect of different tax rates in foreign jurisdictions, and $(1.7) million of French research tax credits (Crédit d’Impôt Recherche). Please see Note 17 Income Taxes to our audited consolidated financial statements for more detailed information on the provision for income taxes. During the year ended December 31, 2025 , the adoption of Pillar Two resulted in an impact of $0.7 million recognized in Provision for income taxes within the Consolidated Statement of Operations. During the year ended December 31, 2025 , the Company released a valuation allowance of approximately $9.7 million related to deferred tax assets in the United Kingdom, primarily as a result of sustained profitability. 2024 Compared to 2023 The provision for income taxes for 2024 increased by $19.7 million , or 98% , compared to 2023 , due to the increase in profit before income taxes. The annual effective tax rate for 2024 was 25.8% , compared to an annual effective tax rate of 26.9% for 2023 . The annual effective tax rate differs from the statutory rates primarily due to the impact of the domestic tax deduction applicable to technology royalty income we received from our subsidiaries, non deductible payroll expenses, differences in tax rates in foreign jurisdictions, tax loss carryforwards in certain foreign subsidiaries, non-recognition of deferred tax assets related to tax losses and temporary differences, recognition of previously unrecognized tax losses and equity awards compensation expense. In 2024 , our income before taxes increased by $79.8 million to $154.5 million , compared to 2023 , generating a $39.9 million theoretical income tax expense at a nominal standard French tax rate of 25.8% . This theoretical tax expense is impacted mainly by the following items contributing to a $39.8 million effective tax expense and a 25.8% effective tax rate: $5.7 million of net effect of share-based compensation, $7.7 million of permanent differences mainly employee costs, offset by $5.8 million tax deduction resulting from technology royalty income we received from our subsidiaries, and the recognition or reversal of valuation allowance on deferred tax assets of $5.8 million . Please see Note 17 Income Taxes to our audited consolidated financial statements for more detailed information on the provision for income taxes. In 2024 , the adoption of Pillar Two resulted in an impact of $3.0 million recognized in Provision for income taxes within the Consolidated Statement of Operations. Amounts recognized in our Consolidated Financial Statements are calculated at the level of each subsidiary within our Consolidated Financial Statements. 72 Adjusted EBITDA We define Adjusted EBITDA as our consolidated earnings before financial income (expense), income taxes, depreciation and amortization, adjusted to eliminate the impact of equity related compensation, which includes employee equity awards compensation and director fees for share purchases, pension service costs, certain acquisition costs, certain restructuring and related costs , integration and transformation costs, and other nonrecurring or noncash items impacting net income that we do not consider indicative of our ongoing business performance. Adjusted EBITDA is not a measure calculated in accordance with GAAP . We have included Adjusted EBITDA because it is a key measure used by our management and Board of directors to understand and evaluate our core operating performance and trends, to prepare and approve our annual budget and to develop short-term and long-term operational plans. Accordingly, we believe that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our results of operations in the same manner as our management and Board of directors. Our use of Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our financial results as reported under GAAP. Some of these limitations are: (a) although depreciation and amortization are noncash charges, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements; (b) Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs; (c) Adjusted EBITDA does not reflect the potentially dilutive impact of equity-based compensation; (d) Adjusted EBITDA does not reflect tax payments that may represent a reduction in cash available to us; and (e) other companies, including companies in our industry, may calculate Adjusted EBITDA or similarly titled measures differently, which reduces their usefulness as a comparative measure. Because of these and other limitations, you should consider Adjusted EBITDA alongside our GAAP financial results, including net income. Year Ended December 31, % change 2025 2024 2023 2025 vs 2024 2024 vs 2023 (in thousands, except percent information) Net Income $ 149,379 $ 114,713 $ 54,644 30% 110% Adjustments: Financial (Income) expense (460) (3,095) 2,805 85% (210)% Provision for income taxes 54,195 39,784 20,084 36% 98% Equity awards compensation expense 59,573 105,742 99,222 (44)% 7% Pension service costs 786 495 401 59% 23% Depreciation and amortization expense (2) 122,320 101,193 99,653 21% 2% Acquisition-related costs — 1,439 1,894 (100)% (24)% Net loss contingency on regulatory matters — — (21,632) NM 100% Restructuring, integration and transformation costs 18,531 29,847 44,727 (38)% (33)% Other noncash or nonrecurring events (2) (3) 2,372 — — NM NM Total net adjustments 257,317 275,405 247,154 (7)% 11% Adjusted EBITDA (1) $ 406,696 $ 390,118 $ 301,798 4% 29% (1) Refer to the "Non-GAAP Financial Measures" section for the definition of this Non-GAAP metric. (2) During the second quarter of 2025, the Company recorded accelerated amortization of $7.9 million, included in depreciation and amortization expense, and a nonrecurring impairment charge of approximately $0.9 million, recorded in other noncash or nonrecurring events, related to internally developed intangible assets, triggered by Alphabet Inc.’s decision not to proceed with the deprecation of third-party cookies in its Chrome browser. (3) During the third quarter of 2025, the Company agreed to settle with the plaintiffs a legal matter for $7.0 million, subject to court approval, with one of the co-defendants agreeing to indemnify the Company for $5.5 million. Based on these agreements, the Company recorded a net probable loss of $1.5 million as of December 31, 2025. 73 The following table presents our Adjusted EBITDA on a comparative basis: Year Ended December 31, % change 2025 2024 2023 2025 vs 2024 2024 vs 2023 (in thousands, except percent information) Net Income $ 149,379 $ 114,713 $ 54,644 30% 110% Adjusted EBITDA $ 406,696 $ 390,118 $ 301,798 4% 29% Net income increased $34.7 million , or 30% for the twelve months ended December 31, 2025 compared to the twelve months ended December 31, 2024 , and Adjusted EBITDA increased $16.6 million , or 4% for the twelve months ended December 31, 2025 compared to the twelve months ended December 31, 2024 . The increase in Net Income and Adjusted EBITDA was primarily due to higher gross profit. Net income increased $60.1 million , or 110% for the twelve months ended December 31, 2024 compared to the twelve months ended December 31, 2023 , and Adjusted EBITDA increased $88.3 million , or 29% for the twelve months ended December 31, 2024 compared to the twelve months ended December 31, 2023 . The increase in Net Income and Adjusted EBITDA was primarily due to higher Contribution ex-TAC and cost reduction actions. Unaudited Quarterly Results of Operations The following tables set forth our unaudited consolidated statement of income data for the last eight quarters. We derived this information from our unaudited interim consolidated financial information, which, in the opinion of management, includes all adjustments, consisting only of normal recurring adjustments, necessary for the fair presentation of the information for the quarters presented. The quarterly results of operations have been prepared by, and are the responsibility of, our management and have not been audited or reviewed by our independent registered public accounting firm. You should read this information together with our audited consolidated financial statements and related notes beginning on page F-1. Three Months Ended December 31, 2025 September 30, 2025 June 30, 2025 March 31, 2025 December 31, 2024 September 30, 2024 June 30, 2024 March 31, 2024 (in thousands) Consolidated Statements of Income Data: Revenue $ 541,136 $ 469,660 $ 482,671 $ 451,434 $ 553,035 $ 458,892 $ 471,307 $ 450,055 Cost of revenue Traffic acquisition costs 211,094 181,526 190,602 187,062 218,636 192,789 204,214 196,167 Other cost of revenue 32,639 31,651 33,551 27,396 33,428 34,171 34,248 36,665 Gross profit 297,403 256,483 258,518 236,976 300,971 231,932 232,845 217,223 Operating expenses Research and development expenses 75,266 67,678 79,610 60,749 67,559 85,285 59,639 66,858 Sales and operations expenses 110,271 86,995 108,215 88,889 97,356 90,823 95,069 92,842 General and administrative expenses 39,352 50,181 40,238 39,171 41,548 46,222 41,199 47,169 Total operating expenses 224,889 204,854 228,063 188,809 206,463 222,330 195,907 206,869 Income from operations 72,514 51,629 30,455 48,167 94,508 9,602 36,938 10,354 Financial and Other income (expense) 329 (21) (1,801) 2,302 2,206 (8) (284) 1,181 Income before taxes 72,843 51,608 28,654 50,469 96,714 9,594 36,654 11,535 Provision for income taxes 26,472 11,531 5,734 10,458 24,770 3,450 8,595 2,969 Net income $ 46,371 $ 40,077 $ 22,920 $ 40,011 $ 71,944 $ 6,144 $ 28,059 $ 8,566 Net income attributable to shareholders of Criteo S.A. 47,642 37,782 21,250 37,928 71,095 6,245 26,987 7,244 74 B . Liquidity and Capital Resources Market Risk We are mainly exposed to foreign currency exchange rate fluctuations. There have been no material changes to our exposure to market risk during the year ended December 31, 2025 . The functional currency of the Company is the euro, while our reporting currency is the U.S. dollar. Because we incur some of our expenses and derive revenues in currencies other than the euro, we are exposed to foreign currency exchange risk as our results of operations and cash flows are subject to fluctuations in foreign currency exchange rates. Foreign exchange risk exposure also arises from intra-company transactions and financing with subsidiaries that have a functional currency different than the euro. The statements of financial position of consolidated entities having a functional currency different from the U.S. dollar are translated into U.S. dollars at the closing exchange rate (spot exchange rate at the statement of financial position date) and the statement of income, statement of comprehensive income and statement of cash flow of such consolidated entities are translated at the average period to date exchange rate. The resulting translation adjustments are included in equity under the caption “Accumulated Other Comprehensive Income” in the Consolidated Statement of Changes in Equity. At December 31, 2025 , 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. Foreign Currency Risk A hypothetical 10% increase or decrease of the Pound Sterling, the Brazilian real, the Japanese yen or the euro against the U.S. dollar would have impacted the Consolidated Statements of Income as follows: Year Ended December 31, 2025 2024 2023 (in thousands) GBP/USD +10% -10% +10% -10% +10% -10% Net income (loss) impact $ 1,273 $ (1,273) $ 245 $ (245) $ (86) $ 86 Year Ended December 31, 2025 2024 2023 (in thousands) BRL/USD +10% -10% +10% -10% +10% -10% Net income (loss) impact $ 11 $ (11) $ 275 $ (275) $ 220 $ (220) Year Ended December 31, 2025 2024 2023 (in thousands) JPY/USD +10% -10% +10% -10% +10% -10% Net income (loss) impact $ 6,182 $ (6,182) $ 4,065 $ (4,065) $ 408 $ (408) Year Ended December 31, 2025 2024 2023 (in thousands) EUR/USD +10% -10% +10% -10% +10% -10% Net income (loss) impact $ 1,405 $ (1,405) $ 4,003 $ (4,003) $ 156 $ (156) 75 Counterparty Risk As of December 31, 2025 , we show a positive net cash position. We utilize cash pooling arrangements, reinforcing cash management centralization. Investment and financing decisions are governed by our Investment and Risk Management Policy and carried out by our internal central treasury function, ensuring investments are entered into with high credit ratings, balanced counterparties. Liquidity Risk Sources of Liquidity Our principal sources of liquidity are our cash and cash equivalents and cash generated from operations. We have never declared or paid any cash dividends on our ordinary shares. We do not anticipate paying cash dividends on our equity securities in the foreseeable future. We are party to several revolving credit facilities with several third-party financial institutions. Our revolving credit facilities as of December 31, 2025 are presented in the table below: Nominal/ Authorized amounts Amount drawn as of December 31, 2025 Amount Outstanding as of December 31, 2025 Nature (in thousands) Interest rate Settlement date Bank Syndicate Revolving Credit Facility - September 2022 € 407,000 € — € 407,000 Floating rate: EURIBOR / SOFR + margin depending on leverage ratio September 2027 Other short-term lines of credit € 21,500 € — € 21,500 EURIBOR For additional information regarding our resolving credit facilities, please refer to Note 10 Financial Liabilities. The Bank Syndicate Revolving Line of Credit is an unsecured sustainability-linked facility and contains customary events of default and covenants, including compliance with a total net debt to adjusted EBITDA ratio and restrictions on the incurrence of additional indebtedness. The credit facility also has nonfinancial covenants linked to our sustainability goals, including representation of women in tech roles and reduction of our GHG emissions. As of year-end December 31, 2025 , we were in compliance with the required covenants. We are also party to short-term credit lines in the form of overdraft facilities with HSBC Holdings plc, LCL and BNP Paribas. We are authorized to draw up to a maximum of €21.5 million ( $25.3 million ) in the aggregate under those short-term credit lines and overdraft facilities. As of December 31, 2025 , we had not drawn on either of these facilities. Our banks have the ability to terminate such facilities on short notice. Our cash and cash equivalents and restricted cash at December 31, 2025 were held for working capital and general corporate purposes, which could include acquisitions, and amounted to $342.4 million as of December 31, 2025 . The $51.4 million increase in cash and cash equivalents and restricted cash compared with December 31, 2024 primarily resulted from an increase of $311.2 million in cash from operating activities, offset by a $(101.1) million decrease in cash used in investing activities and a decrease of $(151.5) million in cash used in financing activities. In addition, the cash flows were also negatively impacted by $(7.2) million due to foreign exchange rate impacts on our consolidated cash position in USD over the period. We do not enter into investments for trading or speculative purposes. Our policy is to invest any cash in excess of our immediate requirements in investments designed to preserve the principal balance and provide liquidity. Accordingly, our cash and cash equivalents are invested primarily in demand deposit accounts and term deposit accounts. 76 Furthermore, Criteo had financial liquidity of approximately $890.9 million , including its cash position, short term investments, its Revolving Credit Facility and treasury shares available for acquisitions as of December 31, 2025 . Overall, we believe that our current financial liquidity, combined with our expected cash-flow generation in 2026 , enables financial flexibility and the meeting of all material contractual obligations. Share Buy-back Programs In 2023 , we completed a $125.5 million share r epurchase program. In 2024 , we completed an additional $224.6 million share repurchase, and in 2025 , we completed an additional $152.1 million share repurchase. All above programs have been implemented under our multi-year authorization granted by our Board of Directors. In January 2025, this authorization was extended to a total amount of up to $805.0 million. On February 6, 2026, the Board authorized an additional $154.0 million, increasing the total authorized amount to up to $959.0 million. As of February 6, 2026, following this approval, the remaining authorization under the program was up to $200 million. Other than these repurchase programs, we intend to retain available funds and future earnings to support our growth strategy. Operating and Capital Expenditure Requirements In 2025 , 2024 and 2023 , our net capital expenditures were $100.7 million , $76.6 million and $114.3 million , respectively, primarily related to the acquisition of data center, server equipment and capitalized software development costs . We expect our capital expenditures to remain at, or slightly above, 9% of revenu e for 2026 , as we plan to continue to build, reshape and maintain additional data center equipment capacity in all regions and we keep investing in our Commerce Intelligence Platform. Our future working capital requirements will depend on many factors, including the rate of our revenue growth, the amount and timing of our investments in personnel and capital equipment, and the timing and extent of our introduction of new products and product enhancements. We believe our existing cash balances will be sufficient to meet our anticipated cash requirements through at least the next 12 months. If our cash and cash equivalents balances and cash flows from operating activities are insufficient to satisfy our liquidity requirements, we may need to raise additional funds through equity, equity-linked or debt financings to support our operations, and such financings may not be available to us on acceptable terms, or at all. We may also need to raise additional funds in the event we determine in the future to effect one or more acquisitions of businesses, technologies, assets or products. If we are unable to raise additional funds when needed, our operations and ability to execute our business strategy could be adversely affected. If we raise additional funds through the incurrence of indebtedness, such indebtedness would have rights that are senior to holders of our equity securities and could contain covenants that restrict our operations. Any additional equity financing will be dilutive to our shareholders. 77 Historical Cash Flows The following table sets forth our cash flows for 2025 , 2024 and 2023 : Year Ended December 31, 2025 2024 2023 (in thousands) Cash flows provided by operating activities $ 311,237 $ 258,161 $ 224,246 Cash used in investing activities (101,133) (97,901) (108,712) Cash used in financing activities $ (151,476) $ (270,499) $ (147,254) Operating Activities Cash flows provided by operating activities has typically been generated from net income and by changes in our operating assets and liabilities, particularly in the areas of accounts receivable and accounts payable and accrued expenses, adjusted for certain noncash and nonoperating expense items such as depreciation, amortization, equity awards compensation, deferred tax assets and income taxes. In 2025 , net cash flows provided by operating activities were $311.2 million and consisted of net income of $149.4 million , $175.2 million in adjustments for noncash and nonoperating items, such as $129.4 million of depreciation and amortization expense and $57.8 million of equity awards compensation expense, and $(13.3) million of cash flows from working capital and other assets and liabilities. The $53.1 million increase of cash flow from operating activities during 2025 compared to 2024 , was mainly due to higher net income and improved working capital, partially offset by noncash and nonoperating items, primarily related to share-based compensation, and changes in income taxes. Investing Activities In 2025 , net cash used in investing activities were $101.1 million and consisted of $100.7 million of capitalized software development costs and acquisition of data center and server equipment, and $0.4 million of net change in investment securities (see Note 4 Financial instruments). The $3.2 million increase in cash used in investing activities during 2025 compared to 2024 , was mostly due to higher software development costs partially offset by net change in investment securities. Financing Activities In 2025 , net cash used in financing activities was $151.5 million mainly resulting from the $152.1 million impact from our share repurchase program. The $119.0 million decrease in cash used in financing activities during 2025 compared to 2024 , was mostly due to a decrease in the amount of shares repurchased and nonrecurring 2024 final payment of the earn-out liability resulting from the Iponweb Acquisition. C. Off-balance Sheet Arrangements We do not have any relationships with unconsolidated entities or financial partnerships, including entities sometimes referred to as structured finance or special purpose entities that were established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. In addition, we do not engage in trading activities involving non-exchange traded contracts. We therefore believe that we are not materially exposed to any financing, liquidity, market or credit risk that could arise if we had engaged in these relationships. 78 D. Tabular Disclosure of Contractual Obligations Our principal commitments consist of non-cancelable operating leases for our various office facilities and data centers, and other contractual commitments consisting of obligations to our hosting services providers, and providers of software as a service. The following table discloses aggregate information about material contractual obligations and periods in which payments were due as of December 31, 2025 . Future events could cause actual payments to differ from these estimates. Less than 1 year 1 to 5 years More than 5 years Total (in thousands of U.S. Dollars) Operating Leases $ 38,704 $ 102,889 $ 9,795 $ 151,388 Other purchase obligations 52,007 16,343 — 68,350 Total $ 90,711 $ 119,232 $ 9,795 $ 219,738 Material Cash Requirements We currently anticipate that our available funds and cash flow from operations and financing activities will be sufficient to meet our operational cash needs and fund our share repurchase program for at least the next 12 months and thereafter for the foreseeable future. We continuously evaluate our liquidity and capital resources, including our access to external capital, to ensure we can finance our future capital requirements. Leases and Contractual Commitments Our operating lease obligations mostly include offices and data centers. Our finance lease obligations mostly include certain network infrastructure. Our restructuring efforts to sublease, early terminate or abandon several office buildings under operating leases did not materially change our operating lease obligations. Contingent Consideration As part of the Iponweb Acquisition, the Sellers were entitled to contingent consideration of a maximum of $100.0 million , which was subject to the achievement of certain revenue targets by the Iponweb business for the 2022 and 2023 fiscal years. The earn out liability was fully settled during the year 2024. See Note 12 Other Current Liabilities. Contingencies We are involved in legal proceedings, claims, and regulatory, tax or government inquiries and investigations. We record a liability when we believe that it is both probable that a liability has been incurred, and that 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 estimated, we disclose the possible loss in the accompanying notes to the consolidated financial statements to the extent material. Significant judgment is required to determine both probability and the estimated amount of loss. Such matters are inherently unpredictable and subject to significant uncertainties, some of which are beyond our control. Should any of these estimates and assumptions change or prove to be incorrect, it could have a material impact on our results of operations, financial position, and cash flows. See Note 11 Leases, Note 12 Other Current and Noncurrent Liabilities, Note 17 Income Taxes and Note 19 Commitments and contingencies in the notes to the consolidated financial statements included in Part II, Item 8, and "Legal Proceedings" contained in Part I, Item 3 of this Form 10-K for additional information regarding leases and contractual commitments, long- term debt, taxes, and contingencies. 79 E. Trend Information Key Metrics We review three key metrics to help us monitor the performance of our business and to identify trends affecting our business. These key metrics include number of clients, Contribution ex-TAC, and Adjusted EBITDA. We believe these metrics are useful to understanding the underlying trends in our business. The following table summarizes our key metrics for 2025 , 2024 and 2023 . Year Ended December 31, 2025 2024 2023 (in thousands, except number of clients) Number of clients 16,786 17,269 18,197 Contribution ex-TAC $ 1,174,617 $ 1,121,483 $ 1,022,606 Adjusted EBITDA $ 406,696 $ 390,118 $ 301,798 Number of Clients We define a client to be a unique party with a signed contract and for whom we have delivered an advertisement or monetized inventory during the previous 12 months. We count distinct brands or divisions within the same business as separate clients if they have insertion orders with us. For certain Retail Media solutions, we count the parent company as a single client, even if multiple brands under that company have signed separate contracts. When working with advertising agencies, we generally attribute the client count to the advertiser rather than the agency. If a client's advertising spend is managed by multiple agencies, they are counted as a single client. We believe that our ability to grow the number of clients is an important indicator of our revenue growth over time. Our client count may fluctuate quarterly due to the seasonal advertising trends and the timing of new client contributions. Therefore, changes in client count does not necessarily correspond to changes in revenue for a given period. 80 Contribution ex-TAC We define Contribution excluding Traffic Acquisition Costs, "Contribution ex-TAC", as a profitability measure akin to gross profit. It is calculated by deducting traffic acquisition costs from revenue and reconciled to gross profit through the exclusion of other cost of revenue. Contribution ex-TAC is not a measure calculated in accordance with GAAP. Contribution ex-TAC because it is a key measure used by our management and Board to evaluate operating performance, generate future operating plans and make strategic decisions. In particular, we believe that this measure can provide useful measures for period-to-period comparisons of our business. Accordingly, we believe that Contribution ex-TAC provides useful information to investors and others in understanding and evaluating our results of operations in the same manner as our management and Board. Please see above for a discussion of the limitations of Contribution ex-TAC and a reconciliation of Contribution ex-TAC to gross profit, the most comparable GAAP measure in the Non-GAAP Financial Measures section of this filing. Our management views our Contribution ex-TAC as a key measure to evaluate, plan and make decisions on our business activities and sales performance. In particular, we believe this can provide a useful measure for period-to-period comparisons of our business. Accordingly, we believe that Contribution ex-TAC provides useful information to investors and others in understanding and evaluating our results of operations in the same manner as our management and Board. Contribution ex-TAC is not a measure calculated in accordance with GAAP. Please see above for a discussion of the limitations of Contribution ex-TAC and a reconciliation of Contribution ex-TAC to gross profit, the most comparable GAAP m easure, for 2025 and 2024 . Adjusted EBITDA Adjusted EBITDA repr esents our consolidated earnings before financial income (expense), income taxes, depreciation and amortization, adjusted to eliminate the impact of equity related compensation, which includes employee equity awards compensation and director fees for share purchases, pension service costs, certain acquisition costs, certain restructuring and related costs, integration and transformation costs, and other nonrecurring or noncash items impacting net income that we do not consider indicative of our ongoing business performance. Adjusted EBITDA is not a measure calculated in accordance with GAAP. Adjusted EBITDA is a key measure us ed by our management and Board to understand and evaluate our core operating performance and trends, to prepare and approve our annual budget and to develop short-term and long-term operational plans. In particular, we believe that the elimination of equity awards compensation expense, pension service costs, certain restructuring, integration and transformation costs, certain acquisition costs and a loss contingency related to a regulatory matter in calculating Adjusted EBITDA can provide a useful measure for period-to- period comparisons of our business, Accordingly, we believe that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our results of operations in the same manner as our management and Board. Adjusted EBITDA is not a measure calculated in accordance with GAAP. Please see above for a discussion of the limitations of Adjusted EBITDA and a reconciliation of Adjusted EBITDA to net income, the most comparable GAAP measure in the Non-GAAP Financial Measures section of this filing. Highlights and Trends Number of Clients We had approximately 16,800 clients as of December 31, 2025 , down slightly compared to our client base as of December 31, 2024 . Our client base reflects our global footprint and continued engagement with large clients, particularly in ecommerce across Retail, Travel, Marketplaces and other verticals. We plan to drive expansion of our client base across regions, segments and verticals, as a result of our new self-service offering, including Criteo GO. 81 Client Retention We believe our ability to retain and grow revenue from our existing clients is a useful indicator of the stability of our revenue base and the long-term value of our client relationships. Our Platform, is powered by Commerce Intelligence technology and aims to cover the entire marketing funnel (Discovery, Consideration, Conversion). Our technology is optimized to drive impactful business outcomes from marketing and monetization for retailers and brands. We measure our client satisfaction through our ability to retain them and the revenue they generate quarter after quarter. We define client r etention rate as the percentage of live clients during the previous quarter that continued to be live clients during the current quarter. This metric is calculated on a quarterly basis, and for annual periods, we use an average of the quarterly metrics. We define a live client as a client whose advertising campaign has or had been generating revenue for us on any day over the relevant measurement period. In each of 2025 , 2024 and 2023 , our client retention rate was approximately 90%. Seasonality Our client base consists primarily of businesses in the digital Retail, Travel and Marketplaces industries, which we define as commerce clients. In the digital Retail industry and the consumer brand verticals in particular, many businesses devote the largest portion of their advertising spend to the fourth quarter of the calendar year, to coincide with increased holiday spending by consum ers. With respect to Retail Media, the concentration of advertising spend in the fourth quarter of the calendar year is particularly pronounced. Our Retail clients typically conduct fewer advertising campaigns in the first and second quarters than they do in other quarters, wh ile our Travel clients typically increase their travel campaigns in the first and third quarters and conduct fewer advertising campaigns in the second quarter. As a result, our revenue tends to be seasonal in nature. If the seasonal fluctuations become more pronounced, our operating cash flows could fluctuate materially from period to period. Contribution ex-TAC Our Contribution ex-TAC for 2025 was $1,174.6 million , a 3% increase over 2024 , at constant currency. This performance was mainly driven by growth in Performance Media. We are focused on maximizing our Contribution ex-TAC on an absolute basis. We believe this focus builds sustainable long-term value for our business by fortifying a number of our competitive strengths, including access to digital advertising inventory, breadth and depth of data and continuous improvement of the Criteo AI Engine’s performance, allowing us to deliver more relevant advertisements at scale . Adjusted EBITDA Our Adjusted EBITDA for 2025 was $406.7 million , a 4% increase over 2024 . Our increase in Adjusted EBITDA for 2025 compared to 2024 was primarily the result of the 5% increase in Contribution ex-TAC over the period, partly offset by a 7% increase in our Non-GAAP operating expenses. This drove a 35% adjusted EBITDA margin in 2025 . Going forward, we intend to continue to optimize our operating model while continuing investments in AI innovation and scaling Retail Media capabilities. F. Safe Harbor This Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act and as defined in the Private Securities Litigation Reform Act of 1995. See "Special Note Regarding Forward-Looking Statements."