All right, we're gonna get started. I'm Doug Anmuth, JP Morgan's Internet Analyst. We're pleased to have with us Criteo CEO Megan Clarken. Criteo operates at the intersection of e-commerce, digital marketing, and media monetization. It's leading the way for commerce media to help marketers and media owners activate first-party, privacy-safe data to drive better commerce outcomes. This network consists of around 18,000 clients and around 700 million daily active users across more than $4 billion of annual activated media spend. Criteo, under Megan, has been embarking on a multi-year journey to transition the business from core retargeting to retail media, and the platform now derives about half of its $1 billion plus of annual revenue from non-retargeting services. So Megan has been CEO since 2019. Prior to joining Criteo, she spent 15 years in various positions at Nielsen. Welcome, Megan. Thank you. It's good to be here. Good to see you. Good to see you. It's been five years. Yeah. Business has really changed quite, quite a bit during that time. So let's start there. Maybe you can just talk about how you've transitioned the business to this full suite of commerce media solutions, you know, over these last few years. Yeah. Yeah, look, it has been quite the ride. When I came in nearly five years ago, the company was in trouble. It was a retargeting company that was being confronted with its biggest sort of piece of technology that it needed to do retargeting, cookies, which we all now know and love, was being taken away, and the company really was in a place where it didn't know what to do. So when I came on board, from Nielsen, the first thing I did was look across the landscape to see what assets were there, and how we could pivot the business away from the trajectory it was on towards high growth. What I spotted was a number of things. One were the people, 3,000-odd people at the time, about 3,500 today. Just unbelievably good talent, and particularly tech talent. Then I saw access to data and data assets that you just nicely outlined there, that if you're a ad tech company, and a small ad tech company at the time, is gold. To be able to have access to nearly 20,000 clients is just absolute gold. And then, the AI technology that existed. They also had this little sort of nugget around the corner, called HookLogic, which was a very small acquisition of a retail media play. So look, I looked at that and said: We can do something with this, and created, took them from retargeting to targeting based on product-level targeting, so not just URL-level targeting, but product-level targeting. That business now has completely turned around the retargeting side of the business, but that entire targeting suite now makes up half of the company. And we doubled down on retail media, which was a bet and a bet well worth playing. We looked at the opportunities for retail media over the long run as the fastest growing area of advertising spend, and we chased it down, and we've pushed competitors out of the way, and we now find ourselves in a pole position to be the ad tech supplier to retail media, and to be complementary to Amazon. So we've done this in, you know, 4.5 years of battling COVID and cookie deprecation and, you know, invasions of Russia into Ukraine and now the Middle East. All of this stuff has been backdrops that we've just pushed our way through, and we're really excited about where we are right now and in the future. It's been a great story. Okay, let's dig into retail media. Yeah. S uch an important part of the story and the transition. You talked about being in pole position and kind of. Yeah. This alternative in a way to Amazon. Can you just talk more about kind of where you sit in the broader ecosystem and how you view the size of the retail media opportunity? Yeah. Overall? So we're the ad tech supplier for retail media, means that we power the site. So, one of our clients, for instance, is Macy's, and we look after the advertising inventory and capabilities for that retailer, along with 225 retail clients that we have. It's a new media on the scheme of things, although now even a few years into its running, it's about as big as what U.S. TV is today in terms of advertising spend flowing into retail media, and I'll tell you why I think that is in a minute. But it's also a medium that is said to be, in 2025, worth about $290 billion, globally, including Amazon. And that means that by 2025, it'll be bigger than social and just shy of search. So it's a serious media proposition. And the reason why it's serious is because advertisers love places that they can get to consumers who are close to that point of purchase, and nowhere is better than on retailers' sites to get to a person who's on their buyer journey and close to the point of purchase. Nowhere do you get data that is so neatly clean about an individual, about a consumer, about a shopper, than you do from retailers. S o they love the precision of the targeting that goes on, on retailers' sites. They love the performance that comes out of that site, those sites. They love the fact that it's close to the point of purchase. So that's what makes Retail Media really special. And if you sort of roll the camera forward, in a world where signals disappear, sort of lack of transparency into who's the consumer or who is the audience, those things become harder, and retail media gets more and more sophisticated and proves heavy, premium ROI for brands. That's where you wanna be. And that's why we see that retail media is gonna be that big into the future, in the future of 2025. That's not that's not far away. So, we're in a really good spot. Okay, great. You recently launched the Commerce Max DSP. Yeah. In the fall. Can you just talk about kind of where you are in terms of adoption and the progress you've seen so far? Yep. Commerce Max does two things. So it's about driving demand. So it's about taking advertisers' dollars through predominantly through agencies and spending those dollars on different platforms. Firstly, we spend it across the open internet, which is called off-site advertising. So we take P&G's dollars through the agencies, and we'll spend it across the open internet. Secondly, we take those dollars, or alternatively, we take those dollars and we spend it across a retail media network. Now, why is that important? Because today, if you're an agency, it's kind of excessive, Amazon is kind of your retail media network that you go to, and it's very accessible. You may go to Walmart next just because it's so big, but you don't really have access to all of the other retailers that are sitting out there. With Criteo, we bring those all together on one platform. So now, if you're an agency, you can get access not just to Amazon, but you can get access to 225 retailers through Commerce Max. So this is critically important in the evolution of retail media, and today it's doing great. So last quarter, we reported $100 million of agency dollars being spent through Commerce Max across the retail media network, and a number of different brands lighting up advertising through us onto the open internet. These are all early days, don't forget. So this is just driving momentum, that drives momentum, that drives momentum as this becomes a much, much bigger proposition. Is this more existing clients, testing out Commerce Max or, or attracting new clients, in your view? Well, it's agencies predominantly. So here's another factoid, is that before I came on board, Criteo didn't have any agency relationships, did not want to partner with agencies. But I found agencies critical to the ecosystem, critical to the equation, and for us to drive demand or dollars or spend into retailers from national media budgets, you really have to be partnering with agencies, and so it's that momentum that we're now driving through Commerce Max. Okay. Okay, great. And then maybe just one more Commerce Max related. There was some particular success that you called out, I think, with FreshDirect. Yeah. Off-site campaigns. Maybe you can talk about that a little bit, and if there's any other particular, campaigns to highlight. Yeah, we've now got a number of different brands that are running campaigns through Commerce Max. Best Buy does, Macy's does. There's a number of different logos I could put up there. Commerce, the way in which they buy through Commerce Max gives them access to that data. That means that when they're targeting consumers on the open internet, it's a much more precise target because it gives them access to consumer data. So this is a pretty nascent tactic, I guess, for brands, but it's getting much bigger, and we love the fact that we're, you know, bringing the logos that we have on board to start to utilize the fact that we can take retailer data and help them find a consumer across offsite. Okay. Sticking with some client wins, you've talked about plans to expand Uber Eats into new categories. Yeah. And ad formats. Maybe you can elaborate there a little bit, and just how you think about the broader partnership with Uber that you've established. Well, Uber Eats is a great client. They're big and getting bigger, and they're establishing more footprint, which is what we are privileged to help them with, and also new advertising formats. I can't go into the detail of what they are doing 'cause I would never disclose a retailer, s orry, a commerce player like that. Back to that point. There are strategies, but there's just so much more that they've got in front of them, that our commerce media platform is helping them with. In the same way that, you know, I think we announced Ticketek last quarter, another commerce player that is Ticketmaster. Ticketmaster, thank you. Another commerce player who's utilizing what we bring for retailers to their commerce platform. And the reason why this is important is because retail media doesn't just get restricted to retailers. If you think of the broader commerce landscape, they all have an opportunity to sell advertising. And it all looks the same. It's all directed either through agencies or through trade marketing budgets and the tech that it needs to be able to light up that advertising performance, that supply, and get access to the data that they have. I mean, Uber has an enormous amount of data that actually comes to light when it comes to powering their advertising. They all have that, so it's a common theme. So while it starts with retail media, it goes much, much broader. For us, it's important that we focus on the sort of the player in the center who started it all, the retailer, but that we have our eye on the broader opportunity here, which is the commerce player. Got it. Okay, great. As we think about the full suite of solutions. Yeah. That Criteo is offering, around 40% of clients are now using more than one solution, and that continues to increase. Maybe you can just talk about some of the benefits of cross-selling, and then, what are the drivers in terms of taking that number even higher going forward? Yeah. So of the 40%, about 70% of revenue, that is about 70% of the revenue of Commerce Audiences right there. So it speaks to the size of the clients who are actually extending beyond retargeting to per-performance, to Commerce Audiences. Sorry, I had a terrible travel day yesterday, as I'm sure some of you had. A lot of us did, I think. It's a little bit like, Oh, my goodness. The thing here is, it's a pretty simple story to get our clients to start to go in that direction or use both sides of these products, Retargeting and Commerce Audiences. They really see the benefits when they start doing it. Mm-hmm. So here is it, sort of in a nutshell, at the bottom of the funnel, we're a retargeting company, which is, you know, the shoes that you see, you see tomorrow, you see the next day, they annoy you, they follow you around. But it's a very, very, a good tactic for, for advertising. Has been for a long time and will continue to be. The next move, though, is to try to find sort of a cohort of people that sort of look like each other, act like each other, and use product-based data to be able to get advertising campaign in front of them. It gives very good results. What we find is that, our clients tend to, to use both tactics, so broader-based advertising and that retargeting. What we've found even more recently is that they're prepared to give us those budgets and do the best job that we can for them to get them that return. So in other words, they'll say, "Criteo, I'll give you my $100. I want $180 back." And because we have now more tactics than just that retargeting tactic, we can move that advertising campaign sort of up and down the funnel into more broader-based advertising or very tactical retargeting-based advertising and get them that return. And it's because of that, that we've seen this increase in our clients starting to use both products. Is that something that you have control over in terms of the, you know, giving you $100 and giving $180 back, that in terms of having discretion, how some of those dollars are spent? Yes, but I don't want to get, i t is, it's all mechanics, so we serve ads, you know, there's hundreds of thousands a second. It's not something that we sit there and do any kind of booking against or try to, you know, make something work like that. It is the technology, and most recently, it is the AI that we're using. Mm-hmm. To really make those decisions for us to drive the best results for our clients. You know, most recently, for instance, we added Meta, as one of our supply partners. Mm-hmm. Supply, meaning this is a real estate that we can place an ad on. And our AI, our technology, is able to say, "Hey, I'm gonna put this ad in these different places using this different tactic." And if Meta doesn't suit that campaign, if we don't think it's gonna get or the machine, I say we, the machine doesn't think it's gonna get the result, then we won't put the campaign on Meta. But it just so happens that when we do put it across Meta, what our clients are seeing is an average of 20% increase in returns. So again, it's all of the algorithms and AI that manage all of that for us. Mm-hmm. Our clients come back to us because we're good at it. Okay. Your largest retail media client. Mm-hmm. Is shifting to more of a direct sales model during 2Q. Maybe you could talk about, kind of for those less familiar, talk about why they're making this shift, what some of the implications are, and just how you're thinking about financials. Yeah, well, the first thing to know is that about 80% of our clients or client revenue on retail media are from clients that already do it that way. So it's not a trend to go in this direction, it's that they are followers, and this particular client has been with us for a long time and is now looking to extend their sales capability into their existing brands where they have a relationship. So it shouldn't be a surprise that it would be a surprise if somebody wasn't doing this. In other words, if you were a retailer you have a relationship with a brand because you're doing deals with them to advertise in store, all day, every day. So what happens is you just extend that relationship or that conversation with them to extend that ad to your digital store. It's just sort of as basic as that. For us, we still service parts of that activation, if you like. Mm-hmm. And we certainly provide, continue to provide the platform in order to do the ad serving and the ad placement capability and all of the integrations into the data sets in order to do a good job there. So that tech platform is not going away. They're still paying for that, and they pay a fee for that. We also help them on the demand side when it comes to getting demand from agencies, because typically a retailer, while they may have a direct relationship with a brand, don't have a direct relationship with an agency. And so in order for more demand or more dollars to come to them, we help them source that through our relationships with agencies. And this is really critical. The ad tech environment is complex. What needs to be in place to be able to do that buying and do that selling is more than what so many can stomach. They won't go there, or they may try to go there and then go, "I can't do it. Can you keep doing it for me?" And that's the dynamic that happens in retail media, in terms of, you know, the switches that come. But more or less, our clients are, you know, very stable in the way that they work with us, and this was just one change to a client relationship last year. Okay. Commerce Audiences has been another bright spot, certainly for the company. I think now around 20% of overall contribution ex -TAC. Mm-hmm. Maybe you can just talk about the strategy there, what's been so successful and the type of clients that you're seeing really leverage this solution. Yeah, this is really exciting. So last quarter, we saw a 54% growth in Commerce Audiences, and it's just been consistently performing. As I said before, it is. It's basically advertising not one to one, but one to cohort or interest groups, call them interest groups. It uses first-party data that we have access to, and in particular, it uses SKU or product data. Now, this is really important because when we think about advertising going forward, less and less advertising will be based on a URL. In other words, I'm going to advertise to new moms, and therefore, here's five URLs that I'm gonna go to, babies.com, you know, just the typical sort of flat advertising that you've seen before. We believe in the future, and Commerce Audiences is about this, is that it will start by advertiser, by knowing the product and knowing what people buy the product and what people we have access to through first-party consent data, and what supply we have that actually doesn't match to that first-party consent data. And therefore, through an interest group, while it's not sort of one-to-one and retargeted, it is definitely a one-to-many, but very targeted, which is proving to be an incredible return on investment for our clients, which is why we've seen so many going there. So we think this, this is a really big play for us, and this, combined with the tactic of retargeting, is where we think performance across the internet will go. Okay. Let's talk about retargeting a little bit. Cookie deprecation, certainly it has been frequently discussed. It will continue to be, hopefully less at some point. Yeah, it can go away. Right. Yeah. It'll go away. It can go away. This keeps being prolonged. How far along are marketers in building out contingency strategies here? And what are you seeing in terms of marketers, you know, testing out new solutions and. Mm. Any changes, just as you think about this, the Google delay that's been announced? Well, look, I think we think that marketers rely on tech players to fix it for them. We think, you know, that and so they should. They wanna spend the money. They want to give it to an ad tech platform that sources an audience and sources an ROI for them and gets the job done. And there should be continuity between today and post cookie deprecation. That's what marketers are sort of all about. I don't think that they definitely are watching the space because they understand that that might not be the case, but that's where they're at. I think that the interest here comes to the readiness of the publishers and the readiness of the ad tech players. Now, we've been at this for a long time. This is the other thing I should have said: when I came on board, was the, I think it was, like, two weeks after I came on board at Criteo, and the announcement came out that cookies would be deprecated on Chrome, and our stock price went from $22 to $4. Like, second week in the job. So, you know, so of course it was front and center to try to fix that problem and make sure that that didn't hit us. And so we've been working on this for over four years to make sure that we're in the best position, and we are. We know exactly how much of our business is at risk. It today is at 10%. We've been very transparent about that, and every day that goes by where Google, you know, push this can down the road. Mm-hmm. We get better and better and better, so the 10, 10% becomes less over time. And our highest growing areas of our business don't use cookies at all. This is just a retargeting issue. So I think, you know, the thing to watch out for if you're watching this space, is really the readiness of the ecosystem. So don't worry about us, we're fine, John. We're okay. But if you look at the ecosystem, there is a lot to make sure that is in place before they switch off cookie support. And the CMA, which is the industry body out of the U.K. that is sort of monitoring this, are taking in the results right now of a 1% test that Google put in place. I think those will be due in by about June, and they will take a look at those results to see whether there's an appetite to go forward or to continue to push it. For us, for Criteo, you know, we're long in the tooth here. We just keep going down our path. We feel good about where we are, but we have to make sure that, when Google do make this decision, that the actual entire ecosystem is in some sort of state of readiness, because that could have, you know, limiting, or it could have a problem to the entire internet as opposed to, you know, where we are today. Anything to call out just in terms of how the Google Privacy Sandbox has evolved here in recent months? Yeah, look, we worked very closely with them, and have done, as I said, from the day that it was announced that they were gonna form something. And just to make sure everyone understands, the Privacy Sandbox is designed to make sure that retargeting continues to happen after cookies are deprecated. So all the work there, amongst other things, but all the work there is about putting in place things that enable for a third-party cookies to continue to do their job in some other way, shape, or form. And so you know, it just that work continues, and the only evidence I could give you that of where it's at at the moment, is that they have pushed the can down the road another three months. So they've clearly got work to do, and I know my team's with them today, so they've got work that they continue to push on. Got it. Okay, let's shift gears. Just thinking about your costs and investments. Yeah. You pulled back somewhat last year. Maybe you can just talk about key investment areas this year, and, I mean, it seems a little funny to ask you about AI, 'cause I feel like Criteo has been, you know, focused on this for so many years. But, you know, curious to understand what kind of efficiencies perhaps. Yeah. Y ou're seeing internally in your business around coding and engineering, and then, if there's anything to call out in terms of how it's really adding to the business now. Yeah. Like on a, on a revenue front and being really incremental. Well, in terms of sort of capital allocation, you know, one of the three things that we focus on is in internal investments. And, you know, we're a small shop, but we're mighty, and we're pushing in areas, a few different areas. One is AI, which we continue to enhance, our AI capability. And we won a big award, last month, actually, in AI, out of Singapore, for the work that we do on advertising. So we're proud of, you know, our position there. The second is in performance and anything that we can do to increase performance. We have a team of people working on those algorithms, of which AI and performance are tightly linked for us internally. And the third is in retail media. As you can imagine, we have to make sure that we continue to invest in retail media and close any gap that our clients see and want us to invest in. But AI actually is a little different for us because, you know, I hear a lot of AI stories around investment in or plans to, or it will. Mm-hmm. But for us, in the last quarter and in the quarter before, the biggest single contributor to our revenue performance. Last quarter was our best revenue performance since early 2021, so we're on this roll. The biggest contributor was AI. Like, it's actually making top line for us. Mm-hmm. And it's because of the way in which it's improved and become very intuitive around our target, the targeting business. And so we, you know, clearly we love that, and so there's increased investment in that area. But we stay, we stay very targeted on our approach. Don't forget, we're still in a transformation phase, so the thing that I talked about when we started talking is a transformation that's happened over a period of time, and this balance between our investment and our savings is critical to us, which is why we maintain our margins. Mm-hmm. And it's like a synchronized swimming. It's just there, the way in which we do it, we roll forward, we pull back, we make sure we have the right talent, which means that at times, we have to take out the talent that no longer suits the portfolio going forward. And all of these things are an investment, but also a critical savings for us as well. Internally, AI is working on product enhancements, some cool things that we're doing around ad formats, for instance. But you know, we have teams of people that are now using those tools to improve the operations and look for opportunities to improve operations, so. Okay, great. Just looking ahead to the fall, I think you've talked about planning an investor update. Yeah. Specifically on the Retail Media business. Anything kinda specific or anything that we should be thinking about there? I think, you know, it'll be a great opportunity, I think, to sort of relay out the retail media landscape. We haven't spoken to an investor day now since 2022. Mm-hmm. And this is a very fast-moving environment, so it's easy to lose track of what's going on in this environment. I talked about the size of that prize before. It's really important to say, "Here is, h ere it is, and here's what what makes it up, and here's what we're doing to chase that down." So, you know, it's really designed at taking a couple of steps back, and then also looking for ways to find you know, sort of proof points or KPIs that you can see our progress you know may be a little cleaner going forward. It's, you know, we've always been transparent, wanna continue to be transparent. We're in a marketplace where you know, we're standing there alone when it comes to competitors. There's nobody else to look at and say, "Well, you know, you're doing a better job than this other person," 'cause we're it. Two hundred and we have six of the top 10 retailers in the U.S., and we can say that out loud, but we really need to, I think, just continue to tell that story and show why they're using us and how and what they think of us, and how they intend to use us for many years to come. And I, so I'm hoping that it just, you know, reignites what we're doing. Okay, great. Maybe one last question on the macro backdrop. Mm-hmm. You deal with, obviously, a very wide range of advertisers across all kinds of commerce and travel. If I look back at 1Q earnings, it really felt like online advertising was pretty strong, and we saw this from a lot of different companies. What's your view on macro and just where your customers' kinda heads are now? Yeah. Well, I think it's certainly better than last year. And, you know, people feel more optimistic than what they did this time last year, that's for sure. And we see, you know, our results, we're thrilled with our results. We see, you know, good, positive results coming out of the agencies who are dealing with the ad spends. We watch their numbers pretty closely to get an indication. We've got, you know, some interesting, b etween the Olympics and the, you know, U.S. election this year, there's some interesting dynamics that you know may have. We're not sure what the effect will be. Could be a positive effect, could be a negative effect, not quite sure. But there are dynamics to watch out for. But the market feels pretty good. For Criteo, we have, you know, multiple lines of business. We have a platform play, as opposed to just relying on one product. And we have diversity in the categories that we service. So, you know, it's great for us that one of those categories may be having a bad year, another has a great year, and we benefit from that. Okay. All right, we're gonna leave it there. Perfect. Thank you, Megan. Thank you. Thank you very much. Thanks, everyone.