Criteo's Shares Triumphed on a Busy Wednesday Market
Criteo Reports Q2 2025 Earnings: Strong Revenue Growth and Improved Profitability
Criteo, the France-based advertising technology company, has reported its second-quarter earnings for 2025, showcasing a bullish outlook and improved performance despite a decline in non-GAAP net income.
The company's non-GAAP net income for the second quarter was $51 million, a decrease from the year-ago profit of $64 million. However, Criteo's optimism and raised forecasts stem from revenue and margin gains in Retail Media and contribution improvements, disciplined cost management, and strategic capital allocation.
Revenue increased 2% year-over-year to $483 million, with Retail Media revenue rising 11%, reflecting continued strength in onsite Retail Media. Contribution ex-TAC increased 9% year-over-year to $292 million, showing improved profitability in core business areas despite flat performance media revenue.
Gross profit improved by 11% to $259 million, with gross margins rising to 53.6% from 49.4% the prior year, helped by a 7% decline in traffic acquisition costs. Operating expenses increased 17% due to higher R&D (33%) and sales & operations (14%) spending, including accelerated amortization of cookie-related assets, contributing to an 18% decline in net income to $22.9 million or $0.39 EPS.
Despite the temporary decline in net income, Criteo deployed $104 million in share repurchases and raised its full-year outlook, now expecting contribution ex-TAC growth of 3%-4% and adjusted operating margins of 33%-34% for 2025.
The investor reaction to the earnings was cautious, but the stock was bid up on Wednesday, gaining nearly 1% at market close after the earnings report. The consensus analyst estimates for Criteo's second-quarter revenue were slightly over $275 million, and for non-GAAP net income, they were $0.71 per share.
Criteo's performance media growth was only 1% in the second quarter. However, the company's TAC growth expectation suggests a more optimistic outlook for the company, with Criteo raising its guidance for its preferred internal profitability measure, contribution ex-traffic acquisition costs (TAC), expecting a growth rate of 3% to 4% in 2025 over the previous year in constant-currency terms.
The earnings report did not provide specific guidance for the performance media growth rate in 2024. Management emphasized AI innovation and a unified advertising platform as drivers for long-term growth and value creation, reflecting confidence in future performance despite short-term earnings pressures from investments and amortization.
Criteo's stock performance compared favorably to the S&P 500 index, which declined by 0.1% on the same trading day. The investor's bid to increase the stock price may reflect their positive outlook towards Criteo's future performance.
[1] Criteo Q2 2025 Earnings Release, [Link] [2] Criteo Q2 2025 Earnings Call Transcript, [Link] [3] Criteo Q2 2025 Earnings Presentation, [Link]
- In the Criteo Q2 2025 Earnings Report, the company showcased optimism and raised forecasts primarily due to revenue and margin gains in Retail Media and strategic capital allocation, indicating an ongoing focus on investing in business areas that promise growth.
- The strategic split between investing in Retail Media and managing expenses, as demonstrated by Criteo, is a key aspect of finance, aiming to boost profitability and improve the overall financial standing of the company.
- In light of the strong revenue growth and improved profitability reported, investors have indicated a positive outlook towards Criteo's future, implying that investing in the company could potentially yield good returns for finance portfolios.
