10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

for the quarterly period ended March 31, 2020

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

for the transition period from _________ to _________

Commission file number: 001-36153

Criteo S.A.

(Exact name of registrant as specified in its charter)

France			Not Applicable
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification Number)
32 Rue Blanche	Paris	France	75009
(Address of principal executive offices)			(Zip Code)

+33 1 40 40 22 90

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
American Depositary Shares, each representing one Ordinary Share, nominal value €0.025 per share	CRTO	Nasdaq Global Select Market
​Ordinary Shares, nominal value €0.025 per share​*		Nasdaq Global Select Market

* Not for trading, but only in connection with the registration of the American Depositary Shares.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒  No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes  ☒    No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer	☒	Accelerated Filer	☐
Non-accelerated Filer	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨ 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   Yes  ☐      No x

          As of April 29, 2020, the registrant had 61,724,141 ordinary shares, nominal value €0.025 per share, outstanding.

TABLE OF CONTENTS

PART I	FINANCIAL INFORMATION	2
Item 1	Financial Statements	2
	Condensed Consolidated Statements of Financial Position (Unaudited)	3
	Condensed Consolidated Statements of Income (Unaudited)	4
	Condensed Consolidated Statements of Comprehensive Income (Unaudited)	5
	Condensed Consolidated Statements of Shareholder's Equity (Unaudited)	6
	Condensed Consolidated Statements of Cash Flows (Unaudited)	7
	Notes to Condensed Consolidated Financial Statements (Unaudited)	8
Item 2	Management's Discussion and Analysis of Financial Condition and Results of Operations	34
Item 3	Quantitative and Qualitative Disclosures About Market Risk	50
Item 4	Controls and Procedures	51
PART II	OTHER INFORMATION	52
Item 1	Legal Proceedings	52
Item 1A	Risk Factors	52
Item 6	Exhibits	54
Signatures		55

General

        Except where the context otherwise requires, all references in this Quarterly Report on Form 10-Q ("Form 10-Q") to the "Company," "Criteo," "we," "us," "our" or similar words or phrases are to Criteo S.A. and its subsidiaries, taken together. In this Form 10-Q, references to "$" and "US$" are to United States dollars. Our unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, or "U.S. GAAP."

Trademarks

        “Criteo,” the Criteo logo and other trademarks or service marks of Criteo appearing in this Form 10-Q are the property of Criteo. Trade names, trademarks and service marks of other companies appearing in this Form 10-Q are the property of their respective holders.

Special Note Regarding Forward-Looking Statements

        This Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that are based on our management’s beliefs and assumptions and on information currently available to our management. All statements other than present and historical facts and conditions contained in this Form 10-Q, including statements regarding our future results of operations and financial position, business strategy, plans and objectives for future operations, are forward-looking statements. When used in this Form 10-Q, the words “anticipate,” “believe,” “can,” “could,” “estimate,” “expect,” “intend,” “is designed to,” “may,” “might,” “plan,” “potential,” “predict,” “objective,” “should,” or the negative of these and similar expressions identify forward-looking statements. Forward-looking statements include, but are not limited to, statements about:

•the ability of the Criteo Engine to accurately predict engagement by a user;

•our ability to predict and adapt to changes in widely adopted industry platforms and other new technologies;

•our ability to continue to collect and utilize data about user behavior and interaction with advertisers;

•our ability to acquire an adequate supply of advertising inventory from publishers on terms that are favorable to us;

•our ability to meet the challenges of a growing and international company in a rapidly developing and changing industry, including our ability to forecast accurately;

•our ability to maintain an adequate rate of revenue growth and sustain profitability;

•our ability to manage our international operations and expansion and the integration of our acquisitions;

•the effects of increased competition in our market;

•the impact of COVID-19 on our workforce, operations and revenue, as well as on the workforce, operations and revenue of our customers, and the effectiveness of our actions taken in response to COVID-19;

•our ability to adapt to regulatory, legislative or self-regulatory developments regarding internet privacy matters;

•our ability to protect users’ information and adequately address privacy concerns;

•our ability to enhance our brand;

•our ability to enter new marketing channels and new geographies;

•our ability to effectively scale our technology platform;

•our ability to attract and retain qualified employees and key personnel;

•our ability to maintain, protect and enhance our brand and intellectual property; and

•failures in our systems or infrastructure.

        You should also refer to Item 1A “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2019, and to Part II, Item 1A "Risk Factors" of this Form 10-Q, for a discussion of important factors that may cause our actual results to differ materially from those expressed or implied by our forward-looking statements. As a result of these factors, we cannot assure you that the forward-looking statements in this Form 10-Q will prove to be accurate. Furthermore, if our forward-looking statements prove to be inaccurate, the inaccuracy may be material. In light of the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified time frame or at all. The degree to which COVID-19 may affect our results and operations will depend on future developments that are highly uncertain, including, but not limited to, the duration and spread of the outbreak, its severity, the actions to contain the virus or treat its impact, and how quickly and to what extent normal economic and operating conditions can resume. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

        You should read this Form 10-Q and the documents that we reference in this Form 10-Q and have filed as exhibits to this Form 10-Q completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary factors.

  This Form 10-Q may contain market data and industry forecasts that were obtained from industry publications. These data and forecasts involve a number of assumptions and limitations, and you are cautioned not to give undue weight to such information. We have not independently verified any third-party information. While we believe the market position, market opportunity and market size information included in this Form 10-Q is generally reliable, such information is inherently imprecise.

PART I

Item 1. Financial Statements.

2

CRITEO S.A. CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (UNAUDITED)

	Notes	December 31, 2019		March 31, 2020
		(in thousands)
Assets
Current assets:
Cash and cash equivalents	3	$	418,763	$	436,506
Trade receivables, net of allowances of $16.1 million and $23.1 million at December 31, 2019 and March 31, 2020, respectively	4	481,732		364,440
Income taxes		21,817		23,101
Other taxes		60,924		65,293
Other current assets	5	17,225		19,832
Total current assets		1,000,461		909,172
Property, plant and equipment, net		194,161		181,848
Intangible assets, net	6	86,886		79,818
Goodwill	6	317,100		315,266
Right of use assets - operating lease	8	142,044		139,954
Non-current financial assets		21,747		20,373
Deferred tax assets		27,985		29,458
Total non-current assets		789,923		766,717
Total assets		$	1,790,384	$	1,675,889
Liabilities and shareholders' equity
Current liabilities:
Trade payables		$	390,277	$	300,315
Contingencies	14	6,385		6,020
Income taxes		3,422		3,013
Financial liabilities - current portion	3	3,636		2,303
Operating lease liabilities - current portion	8	45,853		47,288
Other taxes		50,099		49,159
Employee - related payables		74,781		73,251
Other current liabilities	7	35,886		35,709
Total current liabilities		610,339		517,058
Deferred tax liabilities		9,272		7,922
Retirement benefit obligation		8,485		7,111
Financial liabilities - non-current portion	3	769		555
Operating lease liabilities - non-current portion	8	117,988		113,920
Other non-current liabilities		5,543		2,715
Total non-current liabilities		142,057		132,223
Total liabilities		752,396		649,281
Commitments and contingencies
Shareholders' equity:
Common shares, €0.025 par value, 66,197,181 and 66,202,881 shares authorized, issued and outstanding at December 31, 2019 and March 31, 2020, respectively.		2,158		2,158
Treasury stock, 3,903,673 and 4,533,650 shares at cost as of December 31, 2019 and March 31, 2020, respectively.		(74,900)		(79,834)
Additional paid-in capital		668,389		676,510
Accumulated other comprehensive (loss)		(40,105)		(54,283)
Retained earnings		451,725		450,480
Equity-attributable to shareholders of Criteo S.A.		1,007,267		995,031
Non-controlling interests		30,721		31,577
Total equity		1,037,988		1,026,608
Total equity and liabilities		$	1,790,384	$	1,675,889

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

3

CRITEO S.A.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

			Three Months Ended
	Notes		March 31, 2019		March 31, 2020
		(in thousands, except share per data)
Revenue	9		$	558,123	$	503,376
Cost of revenue:
Traffic acquisition costs			(322,429)		(297,364)
Other cost of revenue			(26,045)		(33,806)
Gross profit			209,649		172,206
Operating expenses:
Research and development expenses			(46,577)		(37,515)
Sales and operations expenses			(95,909)		(84,974)
General and administrative expenses			(33,770)		(25,915)
Total operating expenses			(176,256)		(148,404)
Income from operations			33,393		23,802
Financial income (expense)	11		(1,974)		(334)
Income before taxes			31,419		23,468
Provision for income taxes	12		(10,018)		(7,040)
Net income			$	21,401	$	16,428
Net income available to shareholders of Criteo S.A.			$	19,120	$	15,459
Net income available to non-controlling interests			$	2,281	$	969
Net income allocated to shareholders of Criteo S.A. per share:
Basic	13		$	0.30	$	0.25
Diluted	13		$	0.29	$	0.25
Weighted average shares outstanding used in computing per share amounts:
Basic	13		64,336,777		61,691,001
Diluted	13		66,041,296		62,125,582

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

4

CRITEO S.A.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

	Three Months Ended
	March 31, 2019		March 31, 2020
	(in thousands)
Net income	$	21,401	$	16,428
Foreign currency translation differences, net of taxes	(10,492)		(15,932)
Actuarial (losses) gains on employee benefits, net of taxes	(1,053)		1,734
Other comprehensive income (loss)	$	(11,545)	$	(14,198)
Total comprehensive income (loss)	$	9,856	$	2,230
Attributable to shareholders of Criteo S.A.	$	7,773	$	1,281
Attributable to non-controlling interests	$	2,083	$	949

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

5

CRITEO S.A.

CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (UNAUDITED)

	Share capital		Treasury Stock		Additional paid-in capital	Accumulated Other Comprehensive Income (Loss)	Retained Earnings	Equity - attributable to shareholders of Criteo S.A.	Non controlling interest	Total equity
	Common shares		Shares
	(in thousands, except share amounts )
Balance at December 31, 2018	67,708,203	$2,201	(3,459,119)	$(79,159)	$663,281	$(30,522)	$387,869	$943,670	$24,221	$967,891
Net income	—	—	—	—	—	—	19,120	19,120	2,281	21,401
Other comprehensive income (loss)	—	—	—	—	—	(11,347)	—	(11,347)	(198)	(11,545)
Issuance of ordinary shares	28,596	1	—	—	372	—	—	373	—	373
Change in treasury stocks	(1,594,288)	(45)	1,786,715	40,080	(36,091)	—	(3,944)	—	—	—
Share-Based Compensation	—	—	—	—	13,533	—	—	13,533	(11)	13,522
Other changes in equity	—		—	—	(1)	—	155	154	—	154
Balance at March 31, 2019	66,142,511	$2,157	(1,672,404)	$(39,079)	$641,094	$(41,869)	$403,200	$965,503	$26,293	$991,796

	Share capital		Treasury Stock		Additional paid-in capital	Accumulated Other Comprehensive Income (Loss)	Retained Earnings	Equity - attributable to shareholders of Criteo S.A.	Non controlling interest	Total equity
	Common shares		Shares
	(in thousands, except share amounts )
Balance at December 31, 2019	66,197,181	$2,158	(3,903,673)	$(74,900)	$668,389	$(40,105)	$451,725	$1,007,267	$30,721	$1,037,988
Net income	—	—	—	—	—	—	15,459	15,459	969	16,428
Other comprehensive income (loss)	—	—	—	—	—	(14,178)	—	(14,178)	(20)	(14,198)
Issuance of ordinary shares	5,700	—	—	—	39	—	—	39	—	39
Change in treasury stocks	—	—	(629,977)	(4,934)	—	—	(13,305)	(18,239)	—	(18,239)
Share-Based Compensation	—	—	—	—	8,082	—	—	8,082	49	8,131
Other changes in equity (*)	—	—	—	—	—	—	(3,399)	(3,399)	(142)	(3,541)
Balance at March 31, 2020	66,202,881	$2,158	(4,533,650)	$(79,834)	$676,510	$(54,283)	$450,480	$995,031	$31,577	$1,026,608

^(*) From January 1, 2020, we adopted ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost issued by the Financial Accounting Standards Board (FASB).

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

6

CRITEO S.A.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

		Three Months Ended
		March 31, 2019		March 31, 2020
	(in thousands)
Net income		$	21,401	$	16,428
Non-cash and non-operating items		24,998		32,828
- Amortization and provisions		19,644		27,044
- Net gain (loss) on disposal of non-current assets		—		2,266
- Equity awards compensation expense (1)		13,882		8,502
- Change in deferred taxes		(5,916)		(2,678)
- Income tax for the period		(1,934)		(2,329)
- Other		(678)		23
Changes in working capital related to operating activities		20,821		7,487
- Decrease in trade receivables		86,018		99,388
- (Decrease) in trade payables		(58,485)		(81,679)
- (Increase) in other current assets		(5,992)		(10,398)
- (Decrease) / Increase in other current liabilities		2,436		(945)
- Change in operating lease liabilities and right of use assets		(3,156)		1,121
Cash from operating activities		67,220		56,743
Acquisition of intangible assets, property, plant and equipment		(13,292)		(11,258)
Change in accounts payable related to intangible assets, property, plant and equipment		(10,392)		(479)
(Payment for) Disposal of a business, net of cash acquired (disposed)		(5,325)		—
Change in other non-current financial assets		(32)		889
Cash used for investing activities		(29,041)		(10,848)
Repayment of borrowings		(172)		(170)
Proceeds from capital increase		11		4
Change in treasury stocks		—		(18,241)
Change in other financial liabilities		(30)		(354)
Cash used for financing activities		(191)		(18,761)
Effect of exchange rates changes on cash and cash equivalents		(6,643)		(9,391)
Net increase in cash and cash equivalents		31,345		17,743
Net cash and cash equivalents at beginning of period		364,426		418,763
Net cash and cash equivalents at end of period		$	395,771	$	436,506
Supplemental disclosures of cash flow information
Cash paid for taxes, net of refunds		(17,868)		(12,047)
Cash paid for interest, net of amounts capitalized		(407)		(349)

⁽¹⁾ Of which $13.5 million and $8.1 million of equity awards compensation expense consisted of share-based compensation expense according to ASC 718 Compensation - stock compensation for the quarter ended March 31, 2019 and 2020, respectively.

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

7

CRITEO S.A.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Criteo S.A. was initially incorporated as a société par actions simplifiée, or S.A.S., under the laws of the French Republic on November 3, 2005, for a period of 99 years and subsequently converted to a société anonyme, or S.A.

We are a global technology company building the leading advertising platform for the open Internet. We strive to deliver impactful business results at scale to commerce companies and consumer brands by meeting their marketing goals at their targeted return on investment. Using shopping data, predictive technology and large consumer reach, we help our clients drive Awareness, Consideration and Conversion for their products and services¹, and help retailers generate advertising revenues from brands. Our data is pooled among our clients and offers deep insights into consumer intent and purchasing habits. To drive measurable results for clients, we activate our data assets through proprietary artificial intelligence ("AI") technology to engage consumers in real time through the pricing and delivery of highly relevant digital advertisements ("ads"), across devices and environments. By pricing our offering on a range of pricing models and measuring our value based on clear, well-defined performance metrics, we make the return on investment transparent and easy to measure for advertisers.

In these notes, Criteo S.A. is referred to as the "Parent" company and together with its subsidiaries, collectively, as "Criteo," the "Company," the "Group," or "we".

^{___________________________________________________}

¹ Driving Awareness for a brand means exposing its brand name to consumers who have not been in touch with the brand before, thereby creating brand awareness from such consumers. Driving Consideration for an advertiser's products or services means attracting prospective new consumers to consider engaging with and/or buying this advertiser's products or services. Driving Conversion for an advertisers' products or services means triggering a purchase by consumers who have already engaged with this advertisers products or services in the past.

8

9

Note 1. Summary of Significant Accounting Policies

Basis of Presentation

The unaudited condensed consolidated financial statements included herein (the "Unaudited Condensed Consolidated Financial Statements") have been prepared by Criteo S.A. pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") have been condensed or omitted pursuant to such rules and regulations. However, the Company believes that the disclosures are adequate to make the information presented not misleading. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2019, filed with the SEC on March 2, 2020. The unaudited condensed consolidated financial statements included herein reflect all adjustments (consisting of normal, recurring adjustments) which are, in the opinion of management, necessary to state fairly the results for the interim periods presented. The results of operations for the interim periods presented are not necessarily indicative of the operating results to be expected for any subsequent interim period or for the fiscal year.

Conformity with U.S. GAAP requires the use of estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses in the condensed consolidated financial statements and accompanying notes. We base our estimates and judgments on historical information and on various other assumptions that we believe are reasonable under the circumstances. Our actual results may differ from these estimates. U.S. GAAP requires us to make estimates and judgments in several areas, including, but not limited to: (1) revenue recognition criteria, (2) allowances for credit losses, (3) research tax credits, (4) 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 associated with our transfer pricing policy and iii) recognition of income tax position in respect with tax reforms recently enacted in countries we operate, (5) assumptions used in valuing acquired assets and assumed liabilities in business combinations, (6) assumptions used in the valuation of goodwill, intangible assets and right of use assets - operating lease, and (7) assumptions used in the valuation model to determine the fair value of share-based compensation plan.

The ongoing impact of COVID-19 increases uncertainty associated with these estimates, in particular those related to allowance for credit losses, assumptions used in the valuation of goodwill and estimates relating to income taxes.

There have been no changes to our significant accounting policies described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019, except for the accounting pronouncements adopted below.

Accounting Pronouncements adopted in 2020

Effective January 1, 2020, we have adopted the Financial Accounting Standards Board ("FASB") Accounting Standards Update ("ASU") No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss model which requires the use of forward-looking information to calculate credit loss estimates. This results in earlier recognition of credit losses.

We measure loss allowances for all trade receivables using the lifetime expected credit loss approach, as described above. The expected credit losses on these financial assets are estimated using a provision matrix based on the Company’s historical credit loss experience, adjusted for factors that are specific to the debtors, general economic conditions and an assessment of both the current as well as the forecast direction of conditions at the reporting date.

10

Effective January 1, 2020, we have adopted ASU 2017-04, Goodwill and Other (Topic 350). ASU 2017-04 simplifies the subsequent measurement of goodwill and reduces the cost and complexity of evaluating goodwill for impairment. It eliminates the need for entities to calculate the implied fair value of goodwill by assigning the fair value of a reporting unit to all of its assets and liabilities as if that reporting unit had been acquired in a business combination. Under this amendment, an entity will perform its goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An impairment charge is recognized for the amount by which the carrying value exceeds the reporting unit's fair value. The adoption of the ASU did not have an impact in our financial position or results of operations as we did not recognize an impairment loss during the period.

Effective January 1, 2020, we have adopted ASU 2018-15, Intangibles - Goodwill and Other - Internal Use Software - Customer’s Accounting for Implementation Costs incurred in a Cloud Computing Arrangement That is a Service Contract. This ASU was issued to clarify the accounting for implementation costs incurred for SaaS agreements. Previously the guidance only referred to development of internal use software and the accounting for SaaS agreements was not clarified. This ASU states that the implementation costs of SaaS agreements should be capitalized. The adoption of the standard did not have an impact on our financial position or results of operations, however, it did have a minor impact on expense classification in current and future periods.

Recent Accounting Pronouncements

In August 2018, the FASB issued ASU 2018-14, Compensation - Retirement Benefits - Defined Benefit Plans - General. The purpose of this update is to modify disclosure requirements for Defined Benefit Plans. It removes requirements to disclose the amounts in accumulated other comprehensive income expected to be recognized as components of net periodic benefit cost over the next fiscal year among others. It adds disclosure requirements for the items such as an explanation of the reasons for significant gains and losses related to changes in the benefit obligation for the period. We intend to adopt the standard on the effective date of January 1, 2021. The adoption of ASU 2018-14 is not expected to have a material impact on our financial position or results of operations but may have an impact on our disclosures.

In December 2019, the FASB issued Accounting Standard Update No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (ASU 2019-12), which simplifies the accounting for income taxes. We intend to adopt the standard on the effective date of January 1, 2021. The adoption of ASU 2019-12 is not expected to have a material impact on our financial position or results of operations but may have an impact on our disclosures.

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

11

Note 2. Significant Events and Transactions of the Period

Share repurchase program

On October 25, 2018, Criteo's Board of Directors authorized a share repurchase program of up to $80.0 million of the Company’s outstanding American Depositary Shares. We completed this share repurchase program in 2018. As of December 31, 2018, 3.5 million shares were held as treasury shares.

On February 8, 2019, the Board of Directors authorized the reduction of capital resulting in the formal retirement of 1.6 million treasury shares.

On July 26, 2019, Criteo's Board of Directors authorized a share repurchase program of up to $80.0 million of the Company's outstanding American Depositary Shares. As of December 31, 2019, 3.2 million shares were held as treasury shares as part of the share repurchase program authorized on July 26, 2019.

As of March 31, 2020, we had 4.5 million treasury shares remaining which may be used to satisfy the Company's obligations under its employee equity plans upon RSU vestings in lieu of issuing new shares, and for M&A activity. We completed the 2019 share repurchase program in February 2020.

	Number of Treasury Shares	Amount (in thousands of dollars)
Balance at January 1, 2020	3,903,673	$	74,900
Treasury Shares Repurchased for RSU Vesting	1,258,068	18,239
Treasury Shares Issued for RSU Vesting	(628,091)	(13,305)
Balance at March 31, 2020	4,533,650	$	79,834

Restructuring

Cease of our R&D operations in Palo Alto

On October 7, 2019, in connection with the new organization structure, the Company announced a plan to restructure its R&D activities with the closing of its R&D operations in Palo Alto. The Company incurred additional net restructuring costs of $0.4 million for the three month period ended March 31, 2020 comprising of payroll expenses included in Research and Development expenses.

The following table summarizes restructuring activities as of March 31, 2020 included in other current liabilities on the balance sheet:

	Three Months Ended
	March 31, 2020
	(in thousands)
Restructuring liability - January 1, 2020	$	5,581
Restructuring costs	449
Amount paid	(3,788)
Restructuring liability - March 31, 2020	2,242

12

New organization structure

As part of a new organization structure designed to best support our multi-product platform strategy and accelerate execution, commenced in the twelve month period ended December 31, 2019, the Company incurred net restructuring costs of $0.8 million for the three month period ended March 31, 2020, comprising of payroll expenses.

	Three Months Ended
	March 31, 2020
	(in thousands)
Payroll related costs	$	(772)
Total restructuring costs	(772)

For the three month period ended March 31, 2020, $0.2 million was included in Research and Development expenses and $0.6 million was included in Sales and Operations expenses.

The following table summarizes restructuring activities as of March 31, 2020 included in other current liabilities on the balance sheet:

	Three Months Ended
	March 31, 2020
	(in thousands)
Restructuring liability - January 1, 2020	$	510
Restructuring costs	772
Amount paid	(686)
Restructuring liability - March 31, 2020	596

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Note 3. Financial Instruments

Financial assets

The maximum exposure to credit risk at the end of each reported period is represented by the carrying amount of financial assets, and summarized in the following table:

	December 31, 2019		March 31, 2020
	(in thousands)
Trade receivables, net of allowance	481,732		364,440
Other taxes	60,924		65,293
Other current assets	17,225		19,832
Non-current financial assets	21,747		20,373
Total	$	581,628	$	469,938

Credit Risk

We maintain an allowance for estimated credit losses. During the twelve-month period ended December 31, 2019 and the three-month period ended March 31, 2020, our net change in allowance for credit losses was $9.9 million and $(7.0) million, respectively (note 4). The primary cause of this change was the adoption of ASU 2016-13, Financial Instruments - Credit Losses (Topic 326) effective January 1, 2020 resulting in an earlier recognition of credit losses, the cumulative effect of which, was recorded as an adjustment to retained earnings for $3.5 million (note 1).

For our financial assets, the fair value approximates the carrying amount, given the nature of the financial assets and the maturity of the expected cash flows.

Trade Receivables

Credit risk is defined as an unexpected loss in cash and earnings if the client is unable to pay its obligations in due time. We perform internal ongoing credit risk evaluations of our clients. When a possible risk exposure is identified, we require prepayments or pause the provision of services until payment of past due receivables is made.

As of December 31, 2019 and March 31, 2020, no customer accounted for 10% or more of trade receivables.

Financial Liabilities

	December 31, 2019		March 31, 2020
	(in thousands)
Trade payables	$	390,277	$	300,315
Other taxes	50,099		49,159
Employee-related payables	74,781		73,251
Other current liabilities	35,886		35,709
Financial liabilities	4,405		2,858
Total	$	555,448	$	461,292

For our financial liabilities, the fair value approximates the carrying amount, given the nature of the financial liabilities and the maturity of the expected cash flows.

14

We are party to several loan agreements and a revolving credit facility, or RCF, with third-party financial institutions. There have been no significant changes from what was disclosed in Note 12 to the consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2019.

15

Fair Value Measurements  

We measure the fair value of our cash equivalents, which include interest-bearing bank deposits, as level 2 measurements because they are valued using observable market data.

Financial assets or liabilities include derivative financial instruments used to manage our exposure to the risk of exchange rate fluctuations. These instruments are considered level 2 financial instruments as they are measured using valuation techniques based on observable market data.

Derivative Financial Instruments

Derivatives consist of foreign currency forward contracts that we use to hedge intercompany transactions and other monetary assets or liabilities denominated in currencies other than the local currency of a subsidiary. We recognize gains and losses on these contracts in financial income (expense), and their position on the balance sheet is based on their fair value at the end of each respective period. These instruments are considered level 2 financial instruments as they are measured using valuation techniques based on observable market data.

	December 31, 2019		March 31, 2020
	(in thousands)
Derivative Assets:
Included in other current assets	$	—	$	105
Derivative Liabilities:
Included in financial liabilities - current portion	$	1,284	$	—

For our derivative financial instruments, the fair value approximates the carrying amount, given the nature of the derivative financial instruments and the maturity of the expected cash flows.

Cash and Cash Equivalents

The following table presents for each reporting period, the breakdown of cash and cash equivalents:

	December 31, 2019		March 31, 2020
	(in thousands)
Cash equivalents	$	189,119	$	169,569
Cash on hand	229,644		266,937
Total cash and cash equivalents	$	418,763	$	436,506

Investments in interest–bearing bank deposits which meet ASC 230—Statement of Cash flows criteria: short-term, highly liquid investments, for which the risks of changes in value are considered to be insignificant. Interest-bearing bank deposits are considered level 2 financial instruments as they are measured using valuation techniques based on observable market data.

For our cash and cash equivalents, the fair value approximates the carrying amount, given the nature of the cash and cash equivalents and the maturity of the expected cash flows.

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Note 4. Trade Receivables

The following table shows the breakdown in trade receivables net book value for the presented periods:

	December 31, 2019		March 31, 2020
	(in thousands)
Trade accounts receivables	$	497,800	$	387,524
(Less) Allowance for credit losses	(16,068)		(23,084)
Net book value at end of period	$	481,732	$	364,440

Changes in allowance for credit accounts are summarized below:

	2019		2020
	(in thousands)
Balance at January 1	$	(25,918)	$	(16,068)
Allowance for credit losses through retained earnings (*)	—		(3,498)
Allowance for credit losses	(5,282)		(6,997)
Reversal of provision	5,931		2,989
Currency translation adjustment	100		490
Balance at March 31	$	(25,169)	$	(23,084)

(*) From January 1, 2020, we adopted ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost issued by the Financial Accounting Standards Board (FASB). ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss model which requires the use of forward-looking information to calculate credit loss estimates. This results in earlier recognition of credit losses. We adopted ASU 2016-13 effective January 1, 2020 with the cumulative effect of adoption recorded as an adjustment to retained earnings (note 1).

The amount charged to allowance for credit losses for the three months ended March 31, 2020 increased compared to the same period in the prior year due to the application of the expected credit loss model beginning on January 1, 2020 as well as an increase in the provision due to the expected impact of COVID-19 on the Company's future cash collections.

The reversal of provision decreased during the three month period ended March 31, 2020, mainly due to lower payments received and write-offs of long outstanding receivables already reserved for which it is certain we will not collect the receivable. During the three months ended March 31, 2020, the Company recovered $0.6 million previously written off, accounted for as a reversal of provision.

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

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Note 5. Other Current Assets

The following table shows the breakdown in other current assets net book value for the presented periods:

	December 31, 2019		March 31, 2020
	(in thousands)
Prepayments to suppliers	$	5,109	$	4,668
Other debtors	4,225		3,822
Prepaid expenses	7,891		11,237
Derivative instruments	—		105
Gross book value at end of period	17,225		19,832
Net book value at end of period	$	17,225	$	19,832

Prepaid expenses mainly consist of office rental advance payments.

Derivative financial instruments include foreign currency swaps or forward purchases or sales contracts used to manage our exposure to the risk of exchange rate fluctuations. These instruments are considered level 2 financial instruments as they are measured using valuation techniques based on observable market data.

Note 6. Intangible Assets and Goodwill

There have been no significant additions to intangible assets or goodwill since December 31, 2019.

Due to the changes in the current economic environment and the recent decline in global equity markets related to the COVID-19 pandemic, we believe that there has been a change in events and circumstances that may indicate that the carrying amount of goodwill might not be recoverable. We have therefore conducted an interim impairment test between our annual tests. This interim test was based on a stretched scenario reflecting the estimated impact of COVID-19, built on top of the business plan used for our 2019 annual test. The test concluded that the reporting unit’s fair value is above its carrying amount, including goodwill. Therefore, no impairment loss was recorded.

In addition, no triggering events have occurred that would indicate impairment of intangible assets.

The estimated amortization expense related to intangible assets for the next five years and thereafter is as follows:

	Software		Technology and customer relationships		Total
	(in thousands)
From April 1 to December 31, 2020	$	6,420	$	8,537	$	14,957
2021	7,414		11,382		18,796
2022	4,826		11,382		16,208
2023	2,652		10,897		13,549
2024	685		8,700		9,385
Thereafter	59		6,852		6,911
Total	$	22,056	$	57,750	$	79,806

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19

Note 7. Other Current Liabilities

Other current liabilities are presented in the following table:

	December 31, 2019		March 31, 2020
	(in thousands)
Clients' prepayments	$	13,618	$	11,249
Credit notes	16,420		18,993
Accounts payable relating to capital expenditures	4,408		3,834
Other creditors	1,213		1,447
Deferred revenue	227		186
Total	$	35,886	$	35,709

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Note 8. Leases

We have adopted Topic 842 effective January 1, 2019 on a modified retrospective basis and elected not to restate comparative periods. We chose to use certain practical expedients offered by the standard including:

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

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

•We used hindsight in determining the lease term.

We lease space under non-cancellable operating leases for our offices as well as our data centers. Our office leases typically include free rent periods or rent escalation periods, and may also include leasehold improvement incentives. Leases for data centers may also include free rent periods or rent escalation periods. These leases typically do not include residual value guarantees. Both office and data center leases may contain both lease components (rent) and non-lease components (maintenance, electrical costs, and other service charges). Non-lease components are accounted for separately.

Both office and data center leases typically contain options to renew, and/or early terminate. We have evaluated management's expectations for these options as of March 31, 2020. Options have been included in the lease term if management has determined it is reasonably certain it will be exercised.

Operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate at lease commencement to determine the present value of future payments. We have a centralized treasury function, and the majority of our leases are negotiated and signed by representatives of Criteo SA. As such, the incremental borrowing rate of Criteo SA is used for all of our contracts. It is then adjusted in consideration of the currency of the lease and the lease term as of the lease commencement date.

Lease expense is recognized for minimum lease payments on a straight-line basis over the lease term. Variable costs are expensed in the period incurred. Variable expenses include changes in indexation. Leases for data centers may have variable costs based on electrical usage.

The components of lease expense are as follows:

	Three Months Ended						Three Months Ended
	March 31, 2019						March 31, 2020
	Offices		Data Centers		Total		Offices		Data Centers		Total
	(in thousands)
Lease expense	$	8,340	$	5,187	$	13,527	$	6,314	$	6,536	$	12,850
Short term lease expense	925		530		1,455		286		56		342
Variable lease expense	—		114		114		9		516		525
Sublease income	(1,076)		—		(1,076)		(202)		—		(202)
Total operating lease expense	$	8,189	$	5,831	$	14,020	$	6,407	$	7,108	$	13,515

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As of March 31, 2020, we had future minimum lease payments as follows:

	March 31, 2020
	Offices		Data Centers		Total
	(in thousands)
Remainder of 2020	$	24,813	$	14,251	$	39,064
2021	30,386		14,586		44,972
2022	27,839		10,714		38,553
2023	18,455		4,383		22,838
2024	9,413		2,229		11,642
Thereafter	14,285		373		14,658
Total minimum lease payments	125,191		46,536		171,727
Impact of Discount Rate	(9,748)		(770)		(10,518)
Total Lease Liability	$	115,443	$	45,766	$	161,209

The weighted average remaining lease term and discount rates as of March 31, 2020 are as follows:

	March 31, 2019		March 31, 2020
Weighted average remaining lease term (years)
Offices	5.4		4.5
Data Centers	3.0		3.0
Weighted average discount rate
Offices	2.6	%	2.5	%
Data Centers	1.7	%	1.7	%

Supplemental cash flow information related to our operating leases is as follows for the period ended March 31, 2020:

	Three Months Ended
	March 31, 2019		March 31, 2020
	(in thousands)
Cash paid for amounts included in the measurement of lease liabilities
Cash flow for operating activities	$	(13,964)	$	(14,048)
Right of use assets obtained in exchange for new operating lease liabilities	$	10,926	$	—

As of March 31, 2020, we have additional operating leases, that have not yet commenced which will result in additional operating lease liabilities and right of use assets:

	Offices		Data Centers
	(in thousands)
Additional operating lease liabilities	$	11,295	$	7,807
Additional right of use assets	$	8,446	$	7,807

These operating leases will commence during the fiscal year ending December 31, 2020.

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Note 9. Revenue

Revenue Recognition

We sell personalized display advertisements featuring product-level recommendations either directly to clients or to advertising agencies. Historically, the Criteo model has focused solely on converting our clients' website visitors into customers, enabling us to charge our clients only when users engage with an ad we deliver, usually by clicking on it. More recently, we have expanded our solutions to address a broader range of marketing goals for our clients.

We offer two families of solutions to our commerce and brand clients:

•Criteo Marketing Solutions allow commerce companies to address multiple marketing goals by engaging their consumers with personalized ads across the web, mobile and offline store environments.

•Criteo Retail Media solutions allow retailers to generate advertising revenues from consumer brands, and/or to drive sales for themselves, by monetizing their data and audiences through personalized ads, either on their own digital property or on the open Internet, that address multiple marketing goals.

In conjunction with broadening our solutions, we have also started expanding our pricing models to now include a combination of cost-per-install and cost-per-impression for selected new solutions, in addition to cost-per-click.

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

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

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

We act as principal in our arrangements because (i) we control the advertising inventory (spaces on websites) before it is transferred to our clients; (ii) we bear sole responsibility for fulfillment of the advertising promise and inventory risks and (iii) we have full discretion in establishing prices. Therefore, based on these factors, we report revenue earned and the related costs incurred on a gross basis.

Disaggregation of revenue

The following tables disclose our consolidated revenue for each geographical area for each of the reported periods. Revenue by geographical area is based on the location of advertisers’ campaigns.

The following table presents our revenues disaggregated by geographical area:

	Americas		EMEA		Asia-Pacific		Total
For the three months ended	(in thousands)
March 31, 2019	$	217,993	$	209,643	$	130,487	$	558,123
March 31, 2020	$	191,745	$	190,114	$	121,517	$	503,376

Excluding our historical solution for driving Conversion through Criteo Marketing Solutions (formerly called Criteo Dynamic Retargeting), no individual solution accounted for more than 10% of total consolidated revenue for the periods presented.

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Customer Credit Notes

We offer credit notes to certain customers as a form of incentive, which are accounted for as variable consideration. We estimate these amounts based on the expected amount to be provided to customers and they are recognized as a reduction of revenue. We believe that there will not be significant changes to our estimates of variable consideration.

Deferred Revenues

We record deferred revenues when cash payments are received or due in advance of our performance. Our payment terms vary depending on the service or the type of customer. For certain customers, we require payment before the services are delivered.

Practical Expedients  

We do not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed.

We generally expense sales commissions when incurred because the amortization period would have been one year or less. These costs are recorded within sales and operating expenses.

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Note 10. Share-Based Compensation

The board of directors has been authorized by the general meeting of the shareholders to grant employee warrants (Bons de Souscription de Parts de Créateur d’Entreprise or "BSPCEs"), share options (Options de Souscription d'Actions or "OSAs"), restricted share units ("RSUs") and non-employee warrants (Bons de Souscription d'Actions or "BSAs").

During the three months ended March 31, 2020, there was one grant of RSUs under the Employee Share Option Plan 12 as defined in Note 20 to our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2019.

On March 2, 2020, 40,240 RSUs were granted to Criteo employees subject to continued employment and 43,217 RSUs and 43,217 PSUs were granted to a member of the management subject to continued employment.

There have been no changes in the vesting and method of valuation of the BSPCEs, OSAs, RSUs, or BSAs from what was disclosed in Note 20 to the consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2019, filed with the SEC on March 2, 2020.

Change in Number of BSPCE/OSA/RSU/BSA

	OSA/BSPCE	RSU	BSA	Total
Balance at January 1, 2020	2,559,534	4,978,987	363,767	7,902,288
Granted	—	126,674	—	126,674
Exercised (OSA/BSPCE/BSA)	(5,700)	—	—	(5,700)
Vested (RSU)	—	(640,528)	—	(640,528)
Forfeited	(107,929)	(275,710)	(12,742)	(396,381)
Expired	(3,600)	—	—	(3,600)
Balance at March 31, 2020	2,442,305	4,189,423	351,025	6,982,753

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Breakdown of the Closing Balance

	OSA/BSPCE		RSU	BSA
Number outstanding	2,442,305		4,189,423	351,025
Weighted-average exercise price	€	23.01	NA	€	14.82
Number vested	1,815,222		NA	154,576
Weighted-average exercise price	€	24.40	NA	€	17.42
Weighted-average remaining contractual life of options outstanding, in years	5.8		NA	7.4

Reconciliation with the Unaudited Consolidated Statements of Income

	Three Months Ended
	March 31, 2019								March 31, 2020
	(in thousands)
	R&D		S&O		G&A		Total		R&D		S&O		G&A		Total
RSUs	$	(3,846)	$	(5,955)	$	(2,516)	$	(12,317)	$	(2,369)	$	(3,619)	$	(1,988)	$	(7,976)
Share options / BSPCE	(179)		(246)		(780)		(1,205)		—		(61)		(94)		(155)
Total share-based compensation	(4,025)		(6,201)		(3,296)		(13,522)		(2,369)		(3,680)		(2,082)		(8,131)
BSAs	—		—		(360)		(360)		—		—		(372)		(372)
Total equity awards compensation expense	$	(4,025)	$	(6,201)	$	(3,656)	$	(13,882)	$	(2,369)	$	(3,680)	$	(2,454)	$	(8,503)

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Note 11. Financial Income and Expenses

The condensed consolidated statements of income line item “Financial income (expense)” can be broken down as follows:

	Three Months Ended
	March 31, 2019		March 31, 2020
	(in thousands)
Financial income from cash equivalents	$	177	$	382
Interest and fees	(523)		(432)
Interest on debt	(430)		(380)
Fees	(93)		(52)
Foreign exchange gain (loss)	(1,598)		(1,628)
Other financial expense	(30)		1,344
Total financial income (expense)	$	(1,974)	$	(334)

The $0.3 million and the $2.0 million financial expenses for the three month periods ended March 31, 2020 and March 31, 2019, respectively, were driven by the non-utilization costs incurred as part of our available Revolving Credit Facility (RCF) financing offset by income from cash and cash equivalents and the recognition of a negative impact of foreign exchange reevaluations net of related hedging costs.

We manage our exposure to foreign currency risk at the Criteo S.A. level and hedge using foreign currency swaps or forward purchases or sales of foreign currencies.

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Note 12. Income Taxes

Breakdown of Income Taxes

The tax provision for interim periods is determined using an estimate of our annual effective tax rate (“AETR”), adjusted for discrete items arising in the period. To calculate our estimated AETR, we estimate our income before taxes and the related tax expense or benefit for the full fiscal year (total of expected current and deferred tax provisions), excluding the effect of significant unusual or infrequently occurring items or comprehensive income items not recognized in the statement of income. Each quarter, we update our estimate of the annual effective tax rate, and if our estimated annual tax rate does change, we make a cumulative adjustment in that quarter. Our quarterly tax provision, and our quarterly estimate of our annual effective tax rate, are subject to significant volatility due to several factors including our ability to accurately predict our income (loss) before provision for income taxes in multiple jurisdictions and the changes in foreign exchange rates. Our effective tax rate in the future will depend on the portion of our profits earned within and outside of France.

The condensed consolidated statements of income line item “Provision for income taxes” can be broken down as follows:

	Three Months Ended
	March 31, 2019		March 31, 2020
	(in thousands)
Current income tax	$	(15,934)	$	(9,718)
Net change in deferred taxes	5,916		2,678
Provision for income taxes	$	(10,018)	$	(7,040)

For the three months ended March 31, 2019 and 2020, we used an annual estimated tax rate of 30% to calculate the provision for income taxes. The effective tax rate was 32% and 30% for the three months ended March 31, 2019 and 2020, respectively. The difference between the annual estimated tax rate and the effective tax rate is mainly due to the tax impact of discrete items such as share-based compensation in the United States. Discrete items were immaterial for the three months ended March 31, 2020 resulting in no material difference between the annual estimated tax rate and the effective tax rate.

Current tax assets and liabilities

The total amount of current tax assets consists mainly of prepayments of income taxes and credits of Criteo SA, Criteo Corp. and Criteo Gmbh. The current tax liabilities refers mainly to the corporate tax payables of Criteo K.K.

Ongoing tax inspection in the United States

On September 27, 2017, we received a draft notice of proposed adjustment (NOPA) from the Internal Revenue Service ("IRS") audit of Criteo Corp. for the year ended December 31, 2014, confirmed by the definitive notice dated February 8, 2018. Although we disagree with the IRS's position and are currently contesting this issue, the ultimate resolution of this litigation is uncertain and, if resolved in a manner unfavorable to us, could result in an additional federal tax liability of an estimated maximum aggregate amount of approximately $15.0 million, excluding related fees, interest and penalties.

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Note 13. Earnings Per Share

Basic Earnings Per Share

We calculate basic earnings per share by dividing the net income for the period attributable to shareholders of the Parent by the weighted average number of shares outstanding.

	Three Months Ended
	March 31, 2019		March 31, 2020
Net income attributable to shareholders of Criteo S.A.	$	19,120	$	15,459
Weighted average number of shares outstanding	64,336,777		61,691,001
Basic earnings per share	$	0.30	$	0.25

Diluted Earnings Per Share

We calculate diluted earnings per share by dividing the net income attributable to shareholders of the Parent by the weighted average number of shares outstanding plus any potentially dilutive shares not yet issued from share-based compensation plans (see Note 10). There were no other potentially dilutive instruments outstanding as of March 31, 2019 and March 31, 2020. Consequently, all potential dilutive effects from shares are considered.

For each period presented, a contract to issue a certain number of shares (i.e. share option, non-employee warrant ("BSA"), restricted share unit ("RSU") or employee warrant ("BSPCE") is assessed as potentially dilutive if it is “in the money” (i.e., the exercise or settlement price is lower than the average market price).

	Three Months Ended
	March 31, 2019		March 31, 2020
Net income attributable to shareholders of Criteo S.A.	$	19,120	$	15,459
Weighted average number of shares outstanding of Criteo S.A.	64,336,777		61,691,001
Dilutive effect of :
Restricted share awards ("RSUs")	1,317,350		264,309
Share options and BSPCE	336,647		153,786
Share warrants	50,522		16,486
Weighted average number of shares outstanding used to determine diluted earnings per share	66,041,296		62,125,582
Diluted earnings per share	$	0.29	$	0.25

The weighted average number of securities that were anti-dilutive for diluted EPS for the periods presented but which could potentially dilute EPS in the future are as follows:

	Three Months Ended
	March 31, 2019	March 31, 2020
Restricted share awards	482,152	2,241,223
Share options and BSPCE	65,500	—
Weighted average number of anti-dilutive securities excluded from diluted earnings per share	547,652	2,241,223

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Note 14. Commitments and contingencies

Commitments

Revolving Credit Facilities "RCF", Credit Line Facilities and Bank Overdrafts  

As mentioned in Note 3, we are party to an RCF with a syndicate of banks which allow us to draw up to €350.0 million ($383.5 million) until March 2022.

We are also party to short-term credit lines and overdraft facilities with HSBC plc, BNP Paribas and LCL with an authorization to draw up to a maximum of €21.5 million ($23.6 million) in aggregate under the short-term credit lines and overdraft facilities. As of March 31, 2020, we had not drawn on any of these facilities. Any loans or overdraft under these short-term facilities bear interest based on the one month EURIBOR rate or three month EURIBOR rate. As these facilities are exclusively short-term credit and overdraft facilities, our banks have the ability to terminate such facilities on short notice.

Contingencies

Changes in provisions during the presented periods are summarized below:

	Provision for employee-related litigation		Other provisions		Total
	(in thousands)
Balance at January 1, 2020	$	620	$	5,765	$	6,385
Increase	92		13		105
Provision used	(4)		(211)		(215)
Provision released not used	—		(42)		(42)
Currency translation adjustments	(12)		(201)		(213)
Balance at March 31, 2020	$	696	$	5,324	$	6,020
- of which current	696		5,324		6,020

The amount of the provisions represents management’s best estimate of the future outflow.

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Note 15. Breakdown of Revenue and Non-Current Assets by Geographical Areas

The Company operates in the following three geographical markets:

• Americas (North and South America);

• EMEA (Europe, Middle-East and Africa); and

• Asia-Pacific.

The following tables disclose our consolidated revenue for each geographical area for each of the reported periods. Revenue by geographical area is based on the location of advertisers’ campaigns.

	Americas		EMEA		Asia-Pacific		Total
For the three months ended:	(in thousands)
March 31, 2019	$	217,993	$	209,643	$	130,487	$	558,123
March 31, 2020	$	191,745	$	190,114	$	121,517	$	503,376

Revenue generated in France, the country of incorporation of the Parent, amounted to $37.4 million and $32.0 million for the three months ended March 31, 2019 and 2020, respectively.

Revenue generated in other significant countries where we operate is presented in the following table:

	Three Months Ended
	March 31, 2019		March 31, 2020
	(in thousands)
Americas
United States	$	195,791	$	173,027
EMEA
Germany	$	53,595	$	50,618
United Kingdom	$	21,768	$	20,820
Asia-Pacific
Japan	$	93,168	$	84,637

As of March 31, 2019 and 2020, our largest client represented 2.1% and 3.3%, respectively, of our consolidated revenue.

Other Information

For each reported period, non-current assets (corresponding to the net book value of tangible and intangible assets, excluding right of use assets related to lease agreements) are presented in the table below. The geographical information results from the locations of legal entities.

					Of which						Of which
	Holding		Americas		United States		EMEA		Asia-Pacific		Japan		Singapore		Total
(in thousands)
December 31, 2019	$	136,621	$	104,389	$	100,107	$	20,336	$	19,701	$	9,617	$	5,970	$	281,047
March 31, 2020	$	127,707	$	94,642	$	94,412	$	18,158	$	21,159	$	11,844	$	5,374	$	261,666

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Note 16. Related Parties

There were no significant related-party transactions during the period nor any change in the nature of the transactions as described in Note 25 to the consolidated financial statements included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2019 except as follows:

On March 2, 2020, the Group announced that Chief Financial Officer Benoit Fouilland plans to depart from Criteo at the end of the second quarter 2020. Mr. Fouilland has indicated that he will remain fully committed to his role as Chief Financial Officer and member of the senior executive team, and will play an active role in identifying and hiring his successor to ensure an orderly and smooth transition until his anticipated departure date of June 30, 2020.

The Executive Officers as of March 31, 2020 were:

• Jean-Baptiste Rudelle - Chairman

• Megan Clarken - Chief Executive Officer

• Benoit Fouilland - Chief Financial Officer

• Ryan Damon - General Counsel and Corporate Secretary

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Note 17. Subsequent Events

Given the ongoing impact that the COVID-19 pandemic is having on the Company's clients' business, it will remain a factor in our analysis of estimates residing in the financial statements, including, but not limited to, estimates related to receivable reserves calculated under the CECL model, the impairment analysis, and the income tax calculation. These estimates involve projections and assumptions regarding the future economic environment and as such it is possible that events may occur rapidly or unexpectedly that could lead to their changes. We will continue to closely monitor the COVID-19 pandemic, and continuously evaluate its impact on our key estimates.

On April 29, 2020, the Company announced that the Board of Directors has authorized a share repurchase program of up to $30 million of the Company’s outstanding American Depositary Shares.

On April 29, 2020, the Company decided to preventively draw under its Multicurrency Revolving Facility Agreement for general purposes for a total amount of €140 million ($150 million).

The Company evaluated all other subsequent events that occurred after March 31, 2020 through the date of issuance of the unaudited condensed consolidated financial statements and determined there are no other significant events that require adjustments.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion should be read in conjunction with the unaudited condensed consolidated financial statements and related notes thereto included elsewhere in this Quarterly Report on Form 10-Q and the audited consolidated financial statements and related notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2019, filed with the Securities and Exchange Commission, or "SEC", on March 2, 2020.

Critical Accounting Policies and Estimates

There have been no material changes to our critical accounting policies and estimates from the information provided in Item 2, "Management's Discussion and Analysis of Financial Condition and Results of Operations," included in our Annual Report filed on Form 10-K for the year ended December 31, 2019. Please refer to Note 1,"Summary of Significant Accounting Policies," of the Notes to Unaudited Condensed Consolidated Financial Statements for a discussion of the changes in accounting policies due to the adoption of this standard.

Recently Issued Pronouncements

See "Recently Issued Accounting Standards" under Note 1, "Summary of Significant Accounting Policies," of the Notes to Unaudited Condensed Consolidated Financial Statements for a discussion of certain accounting standards that have been issued during 2020.

Use of Non-GAAP Financial Measures

This Form 10-Q includes the following financial measures defined as non-GAAP financial measures by the SEC: Revenue ex-TAC, Adjusted EBITDA and Adjusted Net Income. These measures are not calculated in accordance with U.S. GAAP.

Revenue ex-TAC is our revenue excluding traffic acquisition costs ("TAC") generated over the applicable measurement period and Revenue ex-TAC by Region reflects our Revenue ex-TAC by our core geographies. Revenue ex-TAC, Revenue ex-TAC by Region and Revenue ex-TAC margin are key measures used by our management and board of directors to evaluate our operating performance, generate future operating plans and make strategic decisions regarding the allocation of capital. In particular, we believe that the elimination of TAC from revenue can provide a useful measure for period-to-period comparisons of our core business and across our core geographies. Accordingly, we believe that Revenue ex-TAC, Revenue ex-TAC by Region and Revenue ex-TAC margin provide useful information to investors and the market generally in understanding and evaluating our operating results in the same manner as our management and board of directors.

Adjusted EBITDA is our consolidated earnings before financial income (expense), income taxes, depreciation and amortization, adjusted to eliminate the impact of equity awards compensation expense, pension service costs, restructuring costs, acquisition-related costs and deferred price consideration. Adjusted EBITDA 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- and long-term operational plans. In particular, we believe that by eliminating equity awards compensation expense, pension service costs, restructuring costs, acquisition-related costs and deferred price consideration, Adjusted EBITDA can provide useful measures for period-to-period comparisons of our business. Accordingly, we believe that Adjusted EBITDA provides useful information to investors and the market generally in understanding and evaluating our results of operations in the same manner as our management and board of directors.

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Adjusted Net Income is our net income adjusted to eliminate the impact of equity awards compensation expense, amortization of acquisition-related intangible assets, restructuring costs, acquisition-related costs and deferred price consideration, and the tax impact of these adjustments. Adjusted Net Income and Adjusted Net Income per diluted share are key measures used by our management and board of directors to evaluate operating performance, generate future operating plans and make strategic decisions regarding the allocation of capital. In particular, we believe that by eliminating equity awards compensation expense, amortization of acquisition-related intangible assets, restructuring costs, acquisition-related costs and deferred price consideration and the tax impact of these adjustments, Adjusted Net Income and Adjusted Net Income per diluted share can provide useful measures for period-to-period comparisons of our business. Accordingly, we believe that Adjusted Net Income and Adjusted Net Income per diluted share provide useful information to investors and the market generally in understanding and evaluating our results of operations in the same manner as our management and board of directors.

Please refer to the supplemental financial tables provided for a reconciliation of Revenue ex-TAC to revenue, Adjusted EBITDA to net income, and Adjusted Net Income to net income in each case, the most comparable U.S. GAAP measurement. Our use of non-GAAP financial measures 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: (1) other companies, including companies in our industry which have similar business arrangements, may address the impact of TAC differently; and (2) other companies may report Revenue ex-TAC, Adjusted EBITDA, Adjusted Net Income, or similarly titled measures but calculate them differently or over different regions, which reduces their usefulness as comparative measures. Because of these and other limitations, you should consider these measures alongside our U.S. GAAP financial results, including revenue and net income.

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Condensed Consolidated Statements of Income Data (Unaudited):

		Three Months Ended
		March 31, 2019		March 31, 2020
	(in thousands, except share and per share data)
Revenue		$	558,123	$	503,376
Cost of revenue (2)
Traffic acquisition costs		(322,429)		(297,364)
Other cost of revenue		(26,045)		(33,806)
Gross profit		209,649		172,206
Operating expenses
Research and development expenses (2)		(46,577)		(37,515)
Sales and operations expenses (2)		(95,909)		(84,974)
General and administrative expenses (2)		(33,770)		(25,915)
Total operating expenses		(176,256)		(148,404)
Income from operations		33,393		23,802
Financial income (expense)		(1,974)		(334)
Income before taxes		31,419		23,468
Provision for income taxes		(10,018)		(7,040)
Net income		$	21,401	$	16,428
Net income available to shareholders of Criteo S.A. (1)		$	19,120	$	15,459
Net income available to shareholders of Criteo S.A. per share:
Basic		$	0.30	$	0.25
Diluted		$	0.29	$	0.25
Weighted average shares outstanding used in computing per share amounts:
Basic		64,336,777		61,691,001
Diluted		66,041,296		62,125,582

⁽¹⁾ For the three month periods ended March 31, 2019 and March 31, 2020, this excludes $2.3 million and $1.0 million, respectively, of net income attributable to non-controlling interests held by Yahoo! Japan in our Japanese subsidiary Criteo KK.

⁽²⁾ Cost of revenue and operating expenses include equity awards compensation expense, pension service costs, depreciation and amortization expense, restructuring costs, acquisition-related costs and deferred price consideration as follows:

36

Detailed Information on Selected Items (unaudited):

		Three Months Ended
		March 31, 2019		March 31, 2020
	(in thousands)
Equity awards compensation expense
Research and development expenses		$	4,025	$	2,370
Sales and operations expenses		6,201		3,618
General and administrative expenses		3,656		2,515
Total equity awards compensation expense		$	13,882	$	8,503
Pension service costs
Research and development expenses		193		269
Sales and operations expenses		72		95
General and administrative expenses		129		174
Total pension service costs (a)		$	394	$	538
Depreciation and amortization expense
Cost of revenue		9,135		12,771
Research and development expenses (b)		3,477		5,650
Sales and operations expenses (c)		4,864		4,340
General and administrative expenses		1,820		1,377
Total depreciation and amortization expense		$	19,296	$	24,138
Restructuring costs (1)
Research and development expenses		—		995
Sales and operations expenses		1,890		1,021
General and administrative expenses		—		193
Total Restructuring costs (1)		$	1,890	$	2,209

⁽¹⁾ For the three month periods ended March 31, 2019, and March 31, 2020, respectively, the Company recognized restructuring charges following its new organizational structure implemented to support its multi-product platform strategy and office right sizing policy, respectively, initiated at the end of the fiscal year ended December 31, 2019 as detailed below:

	Three Months Ended	Three Months Ended
	March 31, 2019	March 31, 2020
	(in thousands)
Depreciation and amortization expense	1,143	—
Facilities and impairment related costs	747	987
Payroll related costs	—	1,222
Total restructuring costs	1,890	2,209

(a) Effective January 1, 2012, actuarial gains and losses are recognized in other comprehensive income.

(b) Includes acquisition-related amortization of intangible assets of $2.7 million and $4.7 million for the three months ended March 31, 2019 and 2020, respectively.

(c) Includes acquisition-related amortization of intangible assets of $2.7 million and $2.2 million for the three months ended March 31, 2019 and 2020, respectively.

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Consolidated Statements of Financial Position Data (unaudited):

	December 31, 2019		March 31, 2020
	(in thousands)
Cash and cash equivalents	$	418,763	$	436,506
Total assets	1,790,384		1,675,889
Trade receivables, net of credit losses	481,732		364,440
Total financial liabilities	4,405		2,858
Total liabilities	752,396		649,281
Total equity	$	1,037,988	$	1,026,608

Other Financial and Operating Data (unaudited):

		Three Months Ended
		March 31, 2019		March 31, 2020
	(in thousands, except client data)
Number of clients		19,373		20,360
Revenue ex-TAC (3)		$	235,694	$	206,012
Adjusted Net Income (4)		$	39,705	$	32,028
Adjusted EBITDA (5)		$	68,855	$	59,190

⁽³⁾ We define Revenue ex-TAC (Traffic Acquisition Costs) as our revenue excluding traffic acquisition costs, or TAC, generated over the applicable measurement period. Revenue ex-TAC is not a measure calculated in accordance with U.S. GAAP. We have included Revenue ex-TAC in this Form 10-Q 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 regarding the allocation of capital. In particular, we believe that the elimination of TAC from revenue can provide a useful measure for period-to-period comparisons of our core business. Accordingly, we believe that Revenue 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 Revenue ex-TAC 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 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 Revenue 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 Revenue ex-TAC alongside our other U.S. GAAP financial results, including revenue. The following table presents a reconciliation of Revenue ex-TAC to revenue, the most directly comparable U.S. GAAP measure, for each of the periods indicated:

		Three Months Ended
		March 31, 2019		March 31, 2020
	(in thousands)
Revenue		$	558,123	$	503,376
Adjustment:
Traffic acquisition costs		(322,429)		(297,364)
Revenue ex-TAC		$	235,694	$	206,012

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⁽⁴⁾ We define Adjusted Net Income as our net income adjusted to eliminate the impact of equity awards compensation expense, amortization of acquisition-related intangible assets, restructuring costs, acquisition-related costs and deferred price consideration, and the tax impact of the foregoing adjustments. Adjusted Net Income is not a measure calculated in accordance with U.S. GAAP. We have included Adjusted Net Income in this Form 10-Q 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 regarding the allocation of capital. In particular, we believe that the elimination of equity awards compensation expense, amortization of acquisition-related intangible assets, restructuring costs, acquisition-related costs and deferred price consideration, and the tax impact of the foregoing adjustments in calculating Adjusted Net Income can provide a useful measure for period-to-period comparisons of our core business. Accordingly, we believe that Adjusted Net Income 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 Net Income 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 U.S. GAAP. Some of these limitations are: (a) Adjusted Net Income does not reflect the potentially dilutive impact of equity-based compensation or the impact of certain acquisition related costs; and (b) other companies, including companies in our industry, may calculate Adjusted Net Income or similarly titled measures differently, which reduces their usefulness as a comparative measure. Because of these and other limitations, you should consider Adjusted Net Income alongside our other U.S. GAAP financial results, including net income. The following table presents a reconciliation of Adjusted Net Income to net income, the most directly comparable U.S. GAAP measure, for each of the periods indicated:

	Three Months Ended
	March 31, 2019		March 31, 2020
	(in thousands)
Net income	$	21,401	$	16,428
Adjustments:
Equity awards compensation expense	13,882		8,503
Amortization of acquisition-related intangible assets	5,472		6,848
Restructuring costs (1)	1,890		2,209
Tax impact of the above adjustments	(2,940)		(1,960)
Adjusted Net Income	$	39,705	$	32,028

⁽¹⁾ For the three month periods ended March 31, 2019, and March 31, 2020, respectively, the Company recognized restructuring charges following its new organizational structure implemented to support its multi-product platform strategy and office right sizing policy, respectively, initiated at the end of the fiscal year ended December 31, 2019 as detailed below:

	Three Months Ended	Three Months Ended
	March 31, 2019	March 31, 2020
	(in thousands)
Depreciation and amortization expense	1,143	—
Facilities and impairment related costs	747	987
Payroll related costs	—	1,222
Total restructuring costs	1,890	2,209

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⁽⁵⁾ We define Adjusted EBITDA as our consolidated earnings before financial income (expense), income taxes, depreciation and amortization, adjusted to eliminate the impact of equity awards compensation expense, pension service costs, restructuring costs, acquisition-related costs and deferred price consideration. Adjusted EBITDA is not a measure calculated in accordance with U.S. GAAP. We have included Adjusted EBITDA in this Form 10-Q 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 and long-term operational plans. In particular, we believe that the elimination of equity awards compensation expense, pension service costs, restructuring costs, acquisition-related costs and deferred price consideration in calculating Adjusted EBITDA can provide a useful measure for period-to-period comparisons of our core 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 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 U.S. GAAP. Some of these limitations are: (a) although depreciation and amortization are non-cash 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 other U.S. GAAP financial results, including net income. The following table presents a reconciliation of Adjusted EBITDA to net income, the most directly comparable U.S. GAAP measure, for each of the periods indicated:

	Three Months Ended
	March 31, 2019		March 31, 2020
	(in thousands)
Net income	$	21,401	$	16,428
Adjustments:
Financial expense (income)	1,974		334
Provision for income taxes	10,018		7,040
Equity awards compensation expense	13,882		8,503
Pension service costs	394		538
Depreciation and amortization expense	19,296		24,138
Restructuring costs (1)	1,890		2,209
Total net adjustments	47,454		42,762
Adjusted EBITDA	$	68,855	$	59,190

⁽¹⁾ For the three month periods ended March 31, 2019, and March 31, 2020, respectively, the Company recognized restructuring charges following its new organizational structure implemented to support its multi-product platform strategy and office right sizing policy, respectively, initiated at the end of the fiscal year ended December 31, 2019 as detailed below:

	Three Months Ended	Three Months Ended
	March 31, 2019	March 31, 2020
	(in thousands)
Depreciation and amortization expense	1,143	—
Facilities and impairment related costs	747	987
Payroll related costs	—	1,222
Total restructuring costs	1,890	2,209

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Results of Operations for the Periods Ended March 31, 2019 and 2020 (Unaudited)

Revenue

Three months ended March 31, 2020 compared to the three months ended March 31, 2019

	Three Months Ended
	March 31, 2019		March 31, 2020		2019 vs 2020
	(in thousands)
Revenue as reported	$	558,123	$	503,376	(10)	%
Conversion impact U.S. dollar/other currencies			8,118
Revenue at constant currency (1)	558,123		511,494		(8)	%
Americas
Revenue as reported	217,993		191,745		(12)	%
Conversion impact U.S. dollar/other currencies			1,758
Revenue at constant currency (1)	217,993		193,503		(11)	%
EMEA
Revenue as reported	209,643		190,114		(9)	%
Conversion impact U.S. dollar/other currencies			5,624
Revenue at constant currency (1)	209,643		195,738		(7)	%
Asia-Pacific
Revenue as reported	130,487		121,517		(7)	%
Conversion impact U.S. dollar/other currencies			736
Revenue at constant currency(1)	$	130,487	$	122,253	(6)	%

⁽¹⁾ Growth at constant currency excludes the impact of foreign currency fluctuations and is computed by applying the 2019 average exchange rates for the relevant period to 2020 figures. We have included revenue at constant currency in this Form 10-Q because it is a key measure used by our management and board of directors to evaluate operating performance. Management reviews and analyzes business results excluding the effect of foreign currency translation because they believe this better represents our underlying business trends.

Revenue for the three months ended March 31, 2020 decreased (10)% (or decreased by (8)% on a constant currency basis, (as defined in footnote 1 directly above), compared to the three months ended March 31, 2019.

The COVID-19 outbreak started having an impact on our revenue beginning in mid-February. Overall, the COVID-19 impact on our revenue was approximately $24 million, or more than 4 points of year-over-year growth as some clients decided to temporarily pause or reduce their campaigns with us. The COVID-19 impact differed significantly by client vertical. Traditionally, the mix of our revenue is approximately 70% in the Retail vertical, 10% in the Travel vertical, 10% in the Classifieds vertical and the remaining 10% a collection of other verticals including consumer finance, auto, gaming and ride sharing. In the first quarter 2020, our revenue in the Travel vertical was impacted by up to 95% compared to pre-COVID-19 levels, while revenue in Classifieds decreased by around 40%, mostly in the marketplace space. Our revenue in the Retail vertical remained relatively healthier, with reductions limited to about 10%. The Travel vertical, which was deeply affected by COVID-19, contributed to 40% of the revenue impact and the remaining 60% were evenly spread between Retail, Classifieds and other verticals. About 80% of the COVID impact on revenue was with large clients, as spending in the midmarket remained resilient.

Due to the material impact from the COVID-19 outbreak, the year-over-year decrease in revenue was entirely driven by the lower contribution from our existing clients, which exceeded revenues derived from new clients. We added 987 net new clients year-over-year across regions, a higher volume than during the prior year period. Revenue from existing clients decreased by 9% at constant currency over the period, including 5 points attributable to the impact of COVID-19, despite the continued adoption of our new products across our client base.

Revenue in the Americas region decreased (12)% (or (11)% on a constant currency basis, including 12% in the U.S.) to $191.7 million for the three months ended March 31, 2020 compared to the three months ended March 31, 2019. This decline was driven by an impact from COVID-19 of $8 million, in particular with large customers and in the broader Classifieds vertical. This came in addition to a soft start in January, due to client budget slowdowns after very high spend levels during the Q4 2019 peak season in the Americas.

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Revenue in EMEA decreased (9)% (or decreased (7)% on a constant currency basis) to $190.1 million for the three months ended March 31, 2020 compared to the three months ended March 31, 2019. This decrease at constant currency includes approximately $12 million revenue impact from the COVID-19 in the region, in part due to the fact that EMEA is the region with the highest exposure to the Travel vertical, which was most hit by COVID-19. In this difficult context, our performance in the midmarket across the region, as well as in our German and Eastern European businesses remained solid and resilient.

Revenue in the Asia-Pacific region decreased (7)% (or decreased (6)% on a constant currency basis) to $121.5 million for the three months ended March 31, 2020 compared to the three months ended March 31, 2019. The decrease at constant currency, included an approximately $5 million revenue impact from the COVID-19, mostly in the Travel and Retail verticals, with our South-East Asian markets most hit. Our Japanese business was less impacted than other markets, and Korea continued to grow double digits despite the early COVID-19 outbreak in the country.

Additionally, our $503.4 million of revenue for the three months ended March 31, 2020 was negatively impacted by $8.1 million as a result of changes in foreign currency against the U.S. dollar compared to the three months ended March 31, 2019.

The year-over-year decrease in revenue on a constant currency basis is entirely attributable to the decrease in the average cost-per-click charged to advertisers, partially offset by the increased number of clicks delivered on the advertising banners displayed by us and the increased number of impressions delivered by us.

Cost of Revenue

Three months ended March 31, 2020 compared to the three months ended March 31, 2019

	Three Months Ended						% change
	March 31, 2019			March 31, 2020			2019 vs 2020
	(in thousands, except percentages)
Traffic acquisition costs	$	(322,429)		$	(297,364)		(8)%
Other cost of revenue	$	(26,045)		$	(33,806)		30%
Total Cost of Revenue	$	(348,474)		$	(331,170)		(5)%
% of revenue	(62)		%	(66)		%
Gross profit %	38		%	34		%

Cost of revenue for the three months ended March 31, 2020 decreased $(17.3) million, or (5)%, compared to the three months ended March 31, 2019. This decrease was primarily the result of a decrease of $(25.1) million, or (8)% (or a decrease of (6)% on a constant currency basis) in traffic acquisition costs and a increase of $7.8 million, or 30% (or 31% on a constant currency basis) in other cost of revenue.

The decrease in traffic acquisition costs on a constant currency basis related primarily to the lower average cost per thousand impressions (or "CPM"), which decreased by (15)% (or (13)% on a constant currency basis). This was mainly driven by lower global demand for advertising inventory, despite the increase in online traffic globally caused by the lockdown imposed in COVID-19 affected areas, making the unit price of inventory cheaper. This was also driven by the effectiveness of our Criteo Direct Bidder, which allows us to buy quality inventory directly from large publishers in the web and in apps and remove intermediary fees in the process. This was not entirely compensated by the 8% increase in the number of impressions we purchased, reflecting higher volumes of inventory available and our expanding relationships with existing and new publisher partners, in particular through direct connections, to support client demand for advertising campaigns.

The increase in other cost of revenue includes a $3.6 million increase in allocated depreciation and amortization expense following the acquisitions of servers and other equipment used in our data centers, a $2.1 million increase in hosting costs and a $2.0 million increase in other costs including $1.6 million of provision for Digital Taxes.

We consider Revenue ex-TAC as a key measure of our business activity. Our strategy focuses on maximizing the growth of our Revenue ex-TAC on an absolute basis over maximizing our near-term gross margin. We believe this focus builds sustainable long-term value for our business by fortifying a number of our competitive strengths, including

42

access to advertising inventory, breadth and depth of data and continuous improvement of the Criteo Engine’s performance, allowing it to deliver more relevant advertisements at scale. As a part of this focus, we continue to invest in building relationships with direct publishers and pursuing access to leading advertising exchanges. Our performance-based business model provides us with significant control over our level of Revenue ex-TAC margin, which we seek to optimize in order to maximize Revenue ex-TAC growth on an absolute basis in accordance with our strategic focus.

Revenue, Traffic Acquisition Costs and Revenue ex-TAC by Region

The following table sets forth our revenue, traffic acquisition costs and Revenue ex-TAC by geographic region, including the Americas (North and South America), Europe, Middle East and Africa, or EMEA, and Asia-Pacific.

		Three Months Ended
	Region	March 31, 2019		March 31, 2020		Year over Year Change
Revenue:		(amounts in thousands, except percentages)
	Americas	$	217,993	$	191,745	(12)	%
	EMEA	209,643		190,114		(9)	%
	Asia-Pacific	130,487		121,517		(7)	%
	Total	558,123		503,376		(10)	%
Traffic acquisition costs:
	Americas	(131,545)		(120,022)		(9)	%
	EMEA	(117,291)		(108,397)		(8)	%
	Asia-Pacific	(73,593)		(68,945)		(6)	%
	Total	(322,429)		(297,364)		(8)	%
Revenue ex-TAC (1):
	Americas	86,448		71,723		(17)	%
	EMEA	92,352		81,717		(12)	%
	Asia-Pacific	56,894		52,572		(8)	%
	Total	$	235,694	$	206,012	(13)	%

⁽¹⁾ We define Revenue ex-TAC as our revenue excluding traffic acquisition costs generated over the applicable measurement period. Revenue ex-TAC and Revenue, Traffic Acquisition Costs and Revenue ex-TAC by Region are not measures calculated in accordance with U.S. GAAP. We have included Revenue ex-TAC and Revenue, Traffic Acquisition Costs and Revenue ex-TAC by Region in this Form 10-Q because they are key measures used by our management and board of directors to evaluate operating performance and generate future operating plans. In particular, we believe that the elimination of TAC from revenue and review of these measures by region can provide useful measures for period-to-period comparisons of our core business. Accordingly, we believe that Revenue ex-TAC and Revenue, Traffic Acquisition Costs and Revenue ex-TAC by Region 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 Revenue ex-TAC and Revenue, Traffic Acquisition Costs and Revenue ex-TAC by Region 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 Revenue, Traffic Acquisition Costs and Revenue ex-TAC by Region or similarly titled measures but define the regions differently, which reduces their effectiveness as a comparative measure; and (c) other companies may report Revenue 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 Revenue ex-TAC and Revenue, Traffic Acquisition Costs and Revenue ex-TAC by Region alongside our other U.S. GAAP financial results, including revenue. The above table provides a reconciliation of revenue ex-TAC by region to revenue by region. Please also refer to footnote 3 to the Other Financial and Operating Data table in "Item 2—Management's Discussion and Analysis" of this Form 10-Q for a reconciliation of revenue ex-TAC to revenue, the most directly comparable financial measure calculated and presented in accordance with U.S. GAAP.

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Constant Currency Reconciliation

Information in this Form 10-Q with respect to results presented on a constant currency basis was calculated by applying the 2019 average exchange rates for the relevant period to 2020 figures. We have included information with respect to our results presented on a constant currency basis because it is a key measure used by our management and board of directors to evaluate operating performance. 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:  

	Three Months Ended
	March 31, 2019			March 31, 2020			YoY Change
	(amounts in thousands, except percentages)
Revenue as reported	$	558,123		$	503,376		(10)	%
Conversion impact U.S. dollar/other currencies				8,118
Revenue at constant currency	$	558,123		$	511,494		(8)	%
Traffic acquisition costs as reported	$	(322,429)		$	(297,364)		(8)	%
Conversion impact U.S. dollar/other currencies				(4,525)
Traffic Acquisition Costs at constant currency	$	(322,429)		$	(301,889)		(6)	%
Revenue ex-TAC as reported	$	235,694		$	206,012		(13)	%
Conversion impact U.S. dollar/other currencies				3,593
Revenue ex-TAC at constant currency	$	235,694		$	209,605		(11)	%
Revenue ex-TAC/Revenue as reported	42		%	41		%
Other cost of revenue as reported	$	(26,045)		$	(33,806)		30	%
Conversion impact U.S. dollar/other currencies				(424)
Other cost of revenue at constant currency	$	(26,045)		$	(34,230)		31	%
Adjusted EBITDA as reported	$	68,855		$	59,190		(14)	%
Conversion impact U.S. dollar/other currencies				1,617
Adjusted EBITDA at constant currency	$	68,855		$	60,807		(12)	%

44

Research and Development Expenses

Three months ended March 31, 2020 compared to the three months ended March 31, 2019

	Three Months Ended						% change
	March 31, 2019			March 31, 2020			2019 vs 2020
	(in thousands, except percentages)
Research and development expenses	$	(46,577)		$	(37,515)		(19)%
% of revenue	(8)		%	(7)		%

Research and development expenses for the three months ended March 31, 2020, decreased $(9.1) million or (19)%, compared to three months ended March 31, 2019. This decrease for the three month period mainly related to a decrease in headcount-related costs following the cease of our R&D operations in Palo Alto in 2019, and a lower share-based compensation expense partially offset by an increased amortization expense for Manage technology due to a revised useful life and an increase in the French Research Tax Credit.

Sales and Operations Expenses

Three months ended March 31, 2020 compared to the three months ended March 31, 2019

	Three Months Ended						% change
	March 31, 2019			March 31, 2020			2019 vs 2020
	(in thousands, except percentages)
Sales and operations expenses	$	(95,909)		$	(84,974)		(11)%
% of revenue	(17)		%	(17)		%

Sales and operations expenses for the three months ended March 31, 2020, decreased $(10.9) million or (11)% compared to the three months ended March 31, 2019. This decrease for the three month period is mainly related to a decrease in headcount-related costs and a lower share-based compensation expense, partially offset by a negative change in provisions for doubtful receivables including the adoption of ASU 2016-13, Financial Instruments - Credit Losses (Topic 326).

45

General and Administrative Expenses

Three months ended March 31, 2020 compared to the three months ended March 31, 2019

	Three Months Ended						% change
	March 31, 2019			March 31, 2020			2019 vs 2020
	(in thousands, except percentages)
General and administrative expenses	$	(33,770)		$	(25,915)		(23)%
% of revenue	(6)		%	(5)		%

General and administrative expenses for the three months ended March 31, 2020 decreased $(7.9) million, or (23)%, compared to the three months ended March 31, 2019. This decrease is mainly related to a decrease in headcount-related costs and in facilities costs following the right-sizing policy aiming to optimize the office spaces.

Financial Income (Expense)

Three months ended March 31, 2020 compared to the three months ended March 31, 2019

	Three Months Ended						% change
	March 31, 2019			March 31, 2020			2019 vs 2020
	(in thousands, except percentages)
Financial income (expense)	$	(1,974)		$	(334)		(83)%
% of revenue	(0.4)		%	(0.1)		%

Financial expense for the three month period ended March 31, 2020, decreased by $(1.6) million or (83)%, compared to the three months ended March 31, 2019. The $0.3 million financial expense for the three months ended March 31, 2020 was driven by the non-utilization costs incurred as part of our available Revolving Credit Facility (RCF) financing offset by income from cash and cash equivalents and the recognition of a negative impact of foreign exchange reevaluations net of related hedging costs. 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.

46

Provision for Income Taxes

Three months ended March 31, 2020 compared to the three months ended March 31, 2019

	Three Months Ended						% change
	March 31, 2019			March 31, 2020			2019 vs 2020
	(in thousands, except percentages)
Provision for income taxes	$	(10,018)		$	(7,040)		(30)%
% of revenue	(1.8)		%	(1)		%
Effective tax rate	32		%	30		%

For the three months ended March 31, 2019 and March 31, 2020, we used an annual estimated tax rate of 30% to calculate the provision for income taxes. The effective tax rate was 32% and 30% for the three months ended March 31, 2019 and 2020, respectively. The difference between the annual estimated tax rate and the effective tax rate is mainly due due to the tax impact of discrete items such as share-based compensation in the United States.

Net Income

Three months ended March 31, 2020 compared to the three months ended March 31, 2019

	Three Months Ended					% change
	March 31, 2019			March 31, 2020		2019 vs 2020
	(in thousands, except percentages)
Net income	$	21,401		16,428		(23)%
% of revenue	4		%	3	%

Net income for the three months ended March 31, 2020, decreased $(5.0) million, or (23)%, compared to the three months ended March 31, 2019. This decrease was the result of the factors discussed above, in particular, a $(9.6) million decrease in income from operations partially offset by a $1.6 million decrease in financial expense and a $3.0 million decrease in provision for income taxes compared to the three months ended March 31, 2019.

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Liquidity and Capital Resources

Our principal sources of liquidity are our cash and cash equivalents and cash generated from operating activities. 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. In 2018, we completed an $80 million share repurchase program. In July 2019, the Board of Directors authorized a new share repurchase program of up to $80 million of the Company’s outstanding American Depositary Shares, completed in February 2020. Other than these repurchase programs, we intend to retain all available funds from any future earnings to fund our growth. As discussed in Note 3 to the unaudited condensed consolidated financial statements in Item 1 to this Form 10-Q, we are party to several loan agreements and revolving credit facilities with third-party financial institutions.

Our cash and cash equivalents are invested primarily in demand deposit accounts that are currently providing only a minimal return. Our cash and cash equivalents at March 31, 2020 were held for working capital and general corporate purposes, which could include acquisitions, and amounted to $436.5 million as of March 31, 2020. The $40.7 million increase in cash and cash equivalents compared with December 31, 2019 primarily resulted from $56.7 million in cash from operating activities, partially offset by a $(10.8) million in cash used for investing activities and a $(18.8) million used for financing activities over the period. The cash used for financing activities is primarily related to $(18.2) for the share repurchase programs. In addition, the increase in cash includes a $(9.4) million negative impact of changes in foreign exchange rates on our cash position 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 that are currently providing only a minimal return.

Furthermore, the Company has immediate access to a €350 Revolving Credit Facility, which, combined with its cash position as of March 31, 2020, provides total liquidity in excess of $820 million. On April 29, 2020, we decided to preventively draw under our Multicurrency Revolving Facility Agreement for general purposes for a total amount of €140 million ($150 million). Overall, we believe that our current financial liquidity, combined with our expected cash-flow generation in 2020, puts us in a strong position to weather the COVID-19 crisis under multiple scenarios.

Operating and Capital Expenditure Requirements

For the three months ended March 31, 2019 and 2020, our capital expenditures were $23.7 million and $11.7 million, respectively. During the three months ended March 31, 2020, these capital expenditures were primarily related to the acquisition of data center and server equipment, and IT systems. We expect our capital expenditures to remain at, or slightly above, 3% of revenue for 2020, as we plan to continue to build and maintain additional data center equipment capacity in all regions and significantly increase our redundancy capacity to strengthen our infrastructure.

We believe our existing cash balances will be sufficient to meet our anticipated cash requirements through at least the next 12 months.  

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.

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.

48

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.

Historical Cash Flows

The following table sets forth our cash flows for the three month period ended March 31, 2019 and 2020:

	Three Months Ended
	March 31, 2019		March 31, 2020
	(in thousands)
Cash from operating activities	$	67,220	$	56,743
Cash used in investing activities	$	(29,041)	$	(10,848)
Cash from (used for) financing activities	$	(191)	$	(18,761)

Operating Activities

Cash provided by operating activities is primarily impacted by the increase in the number of clients using our solution and by the amount of cash we invest in personnel to support the anticipated growth of our business. Cash 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 non-cash and non-operating items such as depreciation, amortization and share-based compensation, deferred tax assets and income taxes.

For the three months ended March 31, 2020, net cash provided by operating activities was $56.7 million and consisted of net income of $16.4 million, $32.8 million in adjustments for certain non-cash and non-operating items and changes in working capital of $7.5 million. Adjustments for certain non-operating items primarily consisted of depreciation and amortization expense of $27.0 million, equity awards compensation expense of $8.5 million and $2.3 million for other items, partially offset by a $2.3 million of changes in income taxes and a $2.7 million of changes in deferred tax assets. The $7.5 million increase in cash from changes in working capital primarily consisted of a $99.4 million decrease in trade receivables and a $1.1 million increase in lease liabilities and right of use assets, partially offset by a $81.7 million decrease in trade payables, a $10.4 million increase in other current assets including prepaid expenses and VAT receivables and a $0.9 million decrease in other current liabilities such as payroll and payroll related expenses and value-added tax ("VAT") payables.

Investing Activities

Our investing activities to date have consisted primarily of purchases of servers and other data-center equipment and business acquisitions. For the three months ended March 31, 2020, net cash used for investing activities was $10.8 million and primarily consisted of $23.7 million in capital expenditures, mainly comprised of purchases of servers and other data-center equipment, offset by a $0.9 million change in other non-current financial assets.

Financing Activities

For the three months ended March 31, 2020, net cash used for financing activities was $18.8 million resulting mostly from a $18.2 million payment for our share repurchase program, a $0.2 million repayment of borrowings and a $0.4 million change in other financial liabilities.

49

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

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 three month period ended March 31, 2020.

For a description of our foreign exchange risk, please see "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations - B. Liquidity and Capital Resources" in our Annual Report on Form 10-K for the year ended December 31, 2019.

A 10% increase or decrease of the Pound Sterling, the Euro, the Japanese yen or the Brazilian real against the U.S. dollar would have impacted the Condensed Consolidated Statements of Income as follows:

	Three Months Ended
	March 31, 2019				March 31, 2020
	(in thousands)
GBP/USD	+10%		-10%		+10%		-10%
Net income impact	$	(496)	$	496	$	(34)	$	34

	Three Months Ended
	March 31, 2019				March 31, 2020
	(in thousands)
BRL/USD	+10%		-10%		+10%		-10%
Net income impact	$	(97)	$	97	$	(4)	$	4

	Three Months Ended
	March 31, 2019				March 31, 2020
	(in thousands)
JPY/USD	+10%		-10%		+10%		-10%
Net income impact	$	443	$	(443)	$	194	$	(194)

	Three Months Ended
	March 31, 2019				March 31, 2020
	(in thousands)
EUR/USD	+10%		-10%		+10%		-10%
Net income impact	$	2,736	$	(2,736)	$	3,195	$	(3,195)

Credit Risk and Trade receivables

For a description of our credit risk and trade receivables, please see "Note 3. Financial instruments" and "Note 4. Trade Receivables" in the Notes to the Consolidated Financial Statements.

The Company has observed a decrease in payments from customers in geographic regions that are most affected by COVID-19, in the last part of the three month period ended March 31, 2020. The expected credit losses model, adapted by the Company on January 1, 2020, requires us to look at how current and future economic conditions impact the amount of expected credit losses, As such, we have increased the provision for credit losses, using our best available current estimates on the impact of COVID-19.

50

Item 4. Controls and Procedures.

Disclosure Controls and Procedures

Based on their evaluation as of March 31, 2020, our management, including our Chief Executive Officer and Chief Financial Officer, concluded that our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) were effective to provide reasonable assurance that (i) the information required to be disclosed in our reports filed or submitted under the Exchange Act are recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and (ii) such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting identified in management's evaluation pursuant to Rules 13a-15(d) or 15d-15(d) of the Exchange Act during the period covered by this Quarterly Report on Form 10-Q that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Limitation on Effectiveness of Controls and Procedures

Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal controls will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within Criteo have been detected. These inherent limitations include the realities that judgments in decision making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies and procedures. Because of the inherent limitations in a cost-effective control system, misstatements due to error of fraud may occur and not be detected.

51

PART II

Item 1.    Legal Proceedings.

From time to time we may become involved in legal proceedings or be subject to claims arising in the ordinary course of our business. We are not presently a party to any legal proceedings that, if determined adversely to us, would individually or taken together have a material adverse effect on our business, financial condition, results of operations or cash flows. Regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.

Item 1A. Risk Factors.

The following risk factor is provided to update the risk factors previously disclosed under the heading “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 filed with the SEC on March 2, 2020. Except as presented below, there have been no material changes from the risk factors described in our Annual Report on Form 10-K.

Our business has been and likely will continue to be negatively impacted by the recent COVID-19 pandemic and the global attempt to contain it.

We face various risks related to health epidemics, pandemics and similar outbreaks, including the recent COVID-19 pandemic. The spread of COVID-19 and the various attempts to contain it have created significant volatility, uncertainty and economic disruption. Certain of our customers, especially those in the Travel and Classified verticals, have seen their businesses and revenues negatively impacted by the COVID-19 pandemic. As a result, we saw a decline in revenue during March 2020. We expect that the negative impact of the COVID-19 pandemic on our revenues will continue until economic conditions improve and stabilize.

The extent to which COVID-19 will continue to impact our business, operations and financial results depends on numerous future developments which are highly uncertain and may be difficult to predict, including, among others, the duration and scope of the pandemic, new information which may emerge concerning the severity of the COVID-19 pandemic, governmental, business and individual actions taken to control the spread of COVID-19 or treat its impact, the effect on our customers and customer demand, and ability to pay, for our services, and changes in worldwide economic conditions. We will continue to actively monitor the situation and assess possible implications to our business and the business of our customers, and will strive to take appropriate actions in an effort to mitigate any adverse consequences. These actions may alter our business operations, may be required by governmental authorities, and/or may be actions we determine to be in the best interests of our employees, customers, partners and shareholders. We cannot assure you that we will be successful in any mitigation efforts.

We cannot at this time predict the extent of the impact of the COVID-19 pandemic and its resulting economic impact, but it has had, and likely will continue to have, a material adverse effect on our business, financial position and results of operations. To the extent the COVID-19 pandemic adversely impacts our business, operations and financial results, it may also result in the heightening the other risks described in “Item 1A. Risk Factors” and elsewhere in our Annual Report on Form 10-K for the year ended December 31, 2019 filed with the SEC on March 2, 2020.

52

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Purchases of Equity Securities by the issuer and Affiliated Purchasers

The following table provides certain information with respect to our purchases of our ADSs during the first fiscal quarter of 2020:

Period	Total Number of Shares Purchased(1)	Average Price Paid per Share(2)		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(1)	Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs(1)
January 1 to 31, 2020	400,548	$	15.14	400,548	$	18,228,007.37
February 1 to 29, 2020	857,520	$	14.19	857,520	$	12,163,930.60
March 1 to 31, 2020	—			—	$	—
Total	1,258,068	$	14.49	1,258,068

⁽¹⁾ In July 2019, Criteo's Board of Directors authorized a share repurchase program of up to $80.0 million (€70.5 million) of the Company's outstanding American Depositary Shares. The Company intended to use repurchased shares to satisfy employee equity plan vesting in lieu of issuing new shares, and potentially in connection with M&A transactions. The repurchase program commenced in July 2019 and completed in February 2020.

⁽²⁾ Average price paid per share excludes any broker commissions paid.

53

Item 6. Exhibits.

Exhibit Index

		Incorporated by Reference
Exhibit	Description	Schedule/ Form	File Number	Exhibit	File Date
31.1#	Certificate of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, as amended
31.2#	Certificate of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, as amended
32.1*	Certificate of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, as amended
101.INS	XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Labels Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document
104.	Cover Page Interactive Data File, formatted in Inline XBRL and contained in Exhibit 101.

# Filed herewith.

* Furnished herewith.

54

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		CRITEO S.A.
		(Registrant)
	By:	/s/ Benoit Fouilland
Date: April 30, 2020	Name:	Benoit Fouilland
	Title:	Chief Financial Officer
		(Principal financial officer and duly authorized signatory)

55

EX-31.1

Exhibit 31.1

Certification by the Chief Executive Officer pursuant to

Securities Exchange Act Rules 13a-14(a) and 15d-14(a)

as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Megan Clarken, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Criteo S.A.;

2.  Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.  Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.  The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.  The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: April 30, 2020

/s/ Megan Clarken

Megan Clarken

Chief Executive Officer
(Principal Executive Officer)

EX-31.2

Exhibit 31.2

Certification by the Chief Financial Officer pursuant to

Securities Exchange Act Rules 13a-14(a) and 15d-14(a)

as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Benoit Fouilland, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Criteo S.A.;

2.  Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.  Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.  The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.  The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: April 30, 2020

/s/ Benoit Fouilland

Benoit Fouilland

Chief Financial Officer
(Principal Financial and Accounting Officer)

EX-32.1

Exhibit 32.1

Certification by the Chief Executive Officer and Chief Financial Officer pursuant to

18 U.S.C. Section 1350, as adopted pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

Pursuant to the requirement set forth in Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. §1350), Megan Clarken, Chief Executive Officer of Criteo S.A. (the “Company”), and Benoit Fouilland, Chief Financial Officer of the Company, each hereby certifies that, to the best of his knowledge:

1. The Company’s Quarterly Report on Form 10-Q for the period ended March 31, 2020, to which this Certification is attached as Exhibit 32.1 (the “Quarterly Report”), fully complies with the requirements of Section 13(a) or Section 15(d) of the Exchange Act, and

2. The information contained in the Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: April 30, 2020

/s/ Megan Clarken	/s/ Benoit Fouilland
Megan Clarken	Benoit Fouilland
Chief Executive Officer	Chief Financial Officer

This certification accompanies the Quarterly Report, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act (whether made before or after the date of the Quarterly Report), irrespective of any general incorporation language contained in such filing.

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Earnings Per Share - Anti-Dilutive Securities (Details) - shares	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Weighted average number of anti-dilutive securities excluded from diluted earnings per share (in shares)	2,241,223	547,652
Restricted share awards
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Weighted average number of anti-dilutive securities excluded from diluted earnings per share (in shares)	2,241,223	482,152
Share options / BSPCE
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Weighted average number of anti-dilutive securities excluded from diluted earnings per share (in shares)	0	65,500

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Breakdown of Revenue and Non-Current Assets by Geographical Areas - Revenue by Geographical Area (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue	$ 503,376	$ 558,123
Americas
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue	191,745	217,993
EMEA
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue	190,114	209,643
Asia-Pacific
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue	$ 121,517	$ 130,487

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Leases - Future Minimum Lease Payments (Details) $ in Thousands	Mar. 31, 2020 USD ($)
Lessee, Lease, Description [Line Items]
Remainder of 2020	$ 39,064
2021	44,972
2022	38,553
2023	22,838
2024	11,642
Thereafter	14,658
Total minimum lease payments	171,727
Impact of Discount Rate	(10,518)
Total Lease Liability	161,209
Offices
Lessee, Lease, Description [Line Items]
Remainder of 2020	24,813
2021	30,386
2022	27,839
2023	18,455
2024	9,413
Thereafter	14,285
Total minimum lease payments	125,191
Impact of Discount Rate	(9,748)
Total Lease Liability	115,443
Data Centers
Lessee, Lease, Description [Line Items]
Remainder of 2020	14,251
2021	14,586
2022	10,714
2023	4,383
2024	2,229
Thereafter	373
Total minimum lease payments	46,536
Impact of Discount Rate	(770)
Total Lease Liability	$ 45,766

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Other Current Assets (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Prepayments to suppliers	$ 4,668	$ 5,109
Other debtors	3,822	4,225
Prepaid expenses	11,237	7,891
Derivative instruments	105	0
Gross book value at end of period	19,832	17,225
Net book value at end of period	$ 19,832	$ 17,225

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Other Current Liabilities (Tables)

3 Months Ended

Mar. 31, 2020

Other Liabilities Disclosure [Abstract]

Other current liabilities

Other current liabilities are presented in the following table:

	December 31, 2019		March 31, 2020
	(in thousands)
Clients' prepayments	$	13,618	$	11,249
Credit notes	16,420		18,993
Accounts payable relating to capital expenditures	4,408		3,834
Other creditors	1,213		1,447
Deferred revenue	227		186
Total	$	35,886	$	35,709

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CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Income Statement [Abstract]
Revenue	$ 503,376	$ 558,123
Cost of revenue:
Traffic acquisition costs	(297,364)	(322,429)
Other cost of revenue	(33,806)	(26,045)
Gross profit	172,206	209,649
Operating expenses:
Research and development expenses	(37,515)	(46,577)
Sales and operations expenses	(84,974)	(95,909)
General and administrative expenses	(25,915)	(33,770)
Total operating expenses	(148,404)	(176,256)
Income from operations	23,802	33,393
Financial income (expense)	(334)	(1,974)
Income before taxes	23,468	31,419
Provision for income taxes	(7,040)	(10,018)
Net income	16,428	21,401
Net income available to shareholders of Criteo S.A.	15,459	19,120
Net income available to non-controlling interests	$ 969	$ 2,281
Net income allocated to shareholders of Criteo S.A. per share:
Basic (in USD per share)	$ 0.25	$ 0.30
Diluted (in USD per share)	$ 0.25	$ 0.29
Weighted average shares outstanding used in computing per share amounts:
Basic (in shares)	61,691,001	64,336,777
Diluted (in shares)	62,125,582	66,041,296

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Financial Income and Expenses (Tables)

3 Months Ended

Mar. 31, 2020

Other Income and Expenses [Abstract]

Schedule of financial income (expense)

The condensed consolidated statements of income line item “Financial income (expense)” can be broken down as follows:

	Three Months Ended
	March 31, 2019		March 31, 2020
	(in thousands)
Financial income from cash equivalents	$	177	$	382
Interest and fees	(523)		(432)
Interest on debt	(430)		(380)
Fees	(93)		(52)
Foreign exchange gain (loss)	(1,598)		(1,628)
Other financial expense	(30)		1,344
Total financial income (expense)	$	(1,974)	$	(334)

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (Parenthetical) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Statement of Cash Flows [Abstract]
Share-based compensation expense	$ 8,131	$ 13,522

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Other Current Liabilities

3 Months Ended

Mar. 31, 2020

Other Liabilities Disclosure [Abstract]

Other Current Liabilities

Other Current Liabilities

Other current liabilities are presented in the following table:

	December 31, 2019		March 31, 2020
	(in thousands)
Clients' prepayments	$	13,618	$	11,249
Credit notes	16,420		18,993
Accounts payable relating to capital expenditures	4,408		3,834
Other creditors	1,213		1,447
Deferred revenue	227		186
Total	$	35,886	$	35,709

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Financial Instruments

3 Months Ended

Mar. 31, 2020

Fair Value Disclosures [Abstract]

Financial Instruments

Financial Instruments

Financial assets

The maximum exposure to credit risk at the end of each reported period is represented by the carrying amount of financial assets, and summarized in the following table:

	December 31, 2019		March 31, 2020
	(in thousands)
Trade receivables, net of allowance	481,732		364,440
Other taxes	60,924		65,293
Other current assets	17,225		19,832
Non-current financial assets	21,747		20,373
Total	$	581,628	$	469,938

Credit Risk

We maintain an allowance for estimated credit losses. During the twelve-month period ended December 31, 2019 and the three-month period ended March 31, 2020, our net change in allowance for credit losses was $9.9 million and $(7.0) million, respectively (note 4). The primary cause of this change was the adoption of ASU 2016-13, Financial Instruments - Credit Losses (Topic 326) effective January 1, 2020 resulting in an earlier recognition of credit losses, the cumulative effect of which, was recorded as an adjustment to retained earnings for $3.5 million (note 1).

For our financial assets, the fair value approximates the carrying amount, given the nature of the financial assets and the maturity of the expected cash flows.

Trade Receivables

Credit risk is defined as an unexpected loss in cash and earnings if the client is unable to pay its obligations in due time. We perform internal ongoing credit risk evaluations of our clients. When a possible risk exposure is identified, we require prepayments or pause the provision of services until payment of past due receivables is made.

As of December 31, 2019 and March 31, 2020, no customer accounted for 10% or more of trade receivables.

Financial Liabilities

	December 31, 2019		March 31, 2020
	(in thousands)
Trade payables	$	390,277	$	300,315
Other taxes	50,099		49,159
Employee-related payables	74,781		73,251
Other current liabilities	35,886		35,709
Financial liabilities	4,405		2,858
Total	$	555,448	$	461,292

For our financial liabilities, the fair value approximates the carrying amount, given the nature of the financial liabilities and the maturity of the expected cash flows.

We are party to several loan agreements and a revolving credit facility, or RCF, with third-party financial institutions. There have been no significant changes from what was disclosed in Note 12 to the consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2019.

Fair Value Measurements  

We measure the fair value of our cash equivalents, which include interest-bearing bank deposits, as level 2 measurements because they are valued using observable market data.

Financial assets or liabilities include derivative financial instruments used to manage our exposure to the risk of exchange rate fluctuations. These instruments are considered level 2 financial instruments as they are measured using valuation techniques based on observable market data.

Derivative Financial Instruments

Derivatives consist of foreign currency forward contracts that we use to hedge intercompany transactions and other monetary assets or liabilities denominated in currencies other than the local currency of a subsidiary. We recognize gains and losses on these contracts in financial income (expense), and their position on the balance sheet is based on their fair value at the end of each respective period. These instruments are considered level 2 financial instruments as they are measured using valuation techniques based on observable market data.

	December 31, 2019		March 31, 2020
	(in thousands)
Derivative Assets:
Included in other current assets	$	—	$	105
Derivative Liabilities:
Included in financial liabilities - current portion	$	1,284	$	—

For our derivative financial instruments, the fair value approximates the carrying amount, given the nature of the derivative financial instruments and the maturity of the expected cash flows.

Cash and Cash Equivalents

The following table presents for each reporting period, the breakdown of cash and cash equivalents:

	December 31, 2019		March 31, 2020
	(in thousands)
Cash equivalents	$	189,119	$	169,569
Cash on hand	229,644		266,937
Total cash and cash equivalents	$	418,763	$	436,506

Investments in interest–bearing bank deposits which meet ASC 230—Statement of Cash flows criteria: short-term, highly liquid investments, for which the risks of changes in value are considered to be insignificant. Interest-bearing bank deposits are considered level 2 financial instruments as they are measured using valuation techniques based on observable market data.

For our cash and cash equivalents, the fair value approximates the carrying amount, given the nature of the cash and cash equivalents and the maturity of the expected cash flows.

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Financial Income and Expenses

3 Months Ended

Mar. 31, 2020

Other Income and Expenses [Abstract]

Financial Income and Expenses

Financial Income and Expenses

The condensed consolidated statements of income line item “Financial income (expense)” can be broken down as follows:

	Three Months Ended
	March 31, 2019		March 31, 2020
	(in thousands)
Financial income from cash equivalents	$	177	$	382
Interest and fees	(523)		(432)
Interest on debt	(430)		(380)
Fees	(93)		(52)
Foreign exchange gain (loss)	(1,598)		(1,628)
Other financial expense	(30)		1,344
Total financial income (expense)	$	(1,974)	$	(334)

The $0.3 million and the $2.0 million financial expenses for the three month periods ended March 31, 2020 and March 31, 2019, respectively, were driven by the non-utilization costs incurred as part of our available Revolving Credit Facility (RCF) financing offset by income from cash and cash equivalents and the recognition of a negative impact of foreign exchange reevaluations net of related hedging costs.

We manage our exposure to foreign currency risk at the Criteo S.A. level and hedge using foreign currency swaps or forward purchases or sales of foreign currencies.

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Significant Events and Transactions of the Period (Tables)

3 Months Ended

Mar. 31, 2020

Restructuring and Related Activities [Abstract]

Balance of Treasury Shares

As of March 31, 2020, we had 4.5 million treasury shares remaining which may be used to satisfy the Company's obligations under its employee equity plans upon RSU vestings in lieu of issuing new shares, and for M&A activity. We completed the 2019 share repurchase program in February 2020.

	Number of Treasury Shares	Amount (in thousands of dollars)
Balance at January 1, 2020	3,903,673	$	74,900
Treasury Shares Repurchased for RSU Vesting	1,258,068	18,239
Treasury Shares Issued for RSU Vesting	(628,091)	(13,305)
Balance at March 31, 2020	4,533,650	$	79,834

Schedule of Restructuring Reserve by Type of Cost

The following table summarizes restructuring activities as of March 31, 2020 included in other current liabilities on the balance sheet:

	Three Months Ended
	March 31, 2020
	(in thousands)
Restructuring liability - January 1, 2020	$	5,581
Restructuring costs	449
Amount paid	(3,788)
Restructuring liability - March 31, 2020	2,242

The following table summarizes restructuring activities as of March 31, 2020 included in other current liabilities on the balance sheet:

	Three Months Ended
	March 31, 2020
	(in thousands)
Restructuring liability - January 1, 2020	$	510
Restructuring costs	772
Amount paid	(686)
Restructuring liability - March 31, 2020	596

Summary of Restructuring Costs

	Three Months Ended
	March 31, 2020
	(in thousands)
Payroll related costs	$	(772)
Total restructuring costs	(772)

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Breakdown of Revenue and Non-Current Assets by Geographical Areas

3 Months Ended

Mar. 31, 2020

Segment Reporting [Abstract]

Breakdown of Revenue and Non-Current Assets by Geographical Areas

Breakdown of Revenue and Non-Current Assets by Geographical Areas

The Company operates in the following three geographical markets:

• Americas (North and South America);

• EMEA (Europe, Middle-East and Africa); and

• Asia-Pacific.

The following tables disclose our consolidated revenue for each geographical area for each of the reported periods. Revenue by geographical area is based on the location of advertisers’ campaigns.

	Americas		EMEA		Asia-Pacific		Total
For the three months ended:	(in thousands)
March 31, 2019	$	217,993	$	209,643	$	130,487	$	558,123
March 31, 2020	$	191,745	$	190,114	$	121,517	$	503,376

Revenue generated in France, the country of incorporation of the Parent, amounted to $37.4 million and $32.0 million for the three months ended March 31, 2019 and 2020, respectively.

Revenue generated in other significant countries where we operate is presented in the following table:

	Three Months Ended
	March 31, 2019		March 31, 2020
	(in thousands)
Americas
United States	$	195,791	$	173,027
EMEA
Germany	$	53,595	$	50,618
United Kingdom	$	21,768	$	20,820
Asia-Pacific
Japan	$	93,168	$	84,637

As of March 31, 2019 and 2020, our largest client represented 2.1% and 3.3%, respectively, of our consolidated revenue.

Other Information

For each reported period, non-current assets (corresponding to the net book value of tangible and intangible assets, excluding right of use assets related to lease agreements) are presented in the table below. The geographical information results from the locations of legal entities.

					Of which						Of which
	Holding		Americas		United States		EMEA		Asia-Pacific		Japan		Singapore		Total
(in thousands)
December 31, 2019	$	136,621	$	104,389	$	100,107	$	20,336	$	19,701	$	9,617	$	5,970	$	281,047
March 31, 2020	$	127,707	$	94,642	$	94,412	$	18,158	$	21,159	$	11,844	$	5,374	$	261,666

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Financial Income and Expenses - Financial income (expense) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Other Income and Expenses [Abstract]
Financial income from cash equivalents	$ 382	$ 177
Interest and fees	(432)	(523)
Interest on debt	(380)	(430)
Fees	(52)	(93)
Foreign exchange gain (loss)	(1,628)	(1,598)
Other financial expense	1,344	(30)
Total financial income (expense)	$ (334)	$ (1,974)

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Revenue (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Disaggregation of Revenue [Line Items]
Revenue	$ 503,376	$ 558,123
Americas
Disaggregation of Revenue [Line Items]
Revenue	191,745	217,993
EMEA
Disaggregation of Revenue [Line Items]
Revenue	190,114	209,643
Asia-Pacific
Disaggregation of Revenue [Line Items]
Revenue	$ 121,517	$ 130,487

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Earnings Per Share - Diluted (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Earnings Per Share [Abstract]
Net income attributable to shareholders of Criteo S.A.	$ 15,459	$ 19,120
Weighted average number of shares outstanding (in shares)	61,691,001	64,336,777
Dilutive effect of :
Restricted share awards (RSU's) (in shares)	264,309	1,317,350
Share options and (BSPCEs) (in shares)	153,786	336,647
Share warrants (in shares)	16,486	50,522
Weighted average number of shares outstanding used to determine diluted earnings per share (in shares)	62,125,582	66,041,296
Diluted earnings per share (in USD per share)	$ 0.25	$ 0.29

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Significant Events and Transactions of the Period - Treasury Shares (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Number of Treasury Shares
Beginning Balance (in shares)	3,903,673	3,500,000
Ending Balance (in shares)	4,533,650
Amount (in thousands of dollars)
Beginning Balance	$ 74,900
Treasury Shares Repurchased	18,239
Ending Balance	$ 79,834
Treasury Stock
Number of Treasury Shares
Beginning Balance (in shares)	3,903,673
Treasury Shares Repurchased (in shares)	(629,977)	1,786,715
Ending Balance (in shares)	4,533,650
Amount (in thousands of dollars)
Beginning Balance	$ 74,900
Treasury Shares Repurchased	4,934	$ (40,080)
Ending Balance	$ 79,834
Treasury Shares Repurchased for RSU Vesting
Number of Treasury Shares
Treasury Shares Repurchased (in shares)	1,258,068
Amount (in thousands of dollars)
Treasury Shares Repurchased	$ 18,239
Treasury Shares Issued for RSU Vesting
Number of Treasury Shares
Treasury Shares Issued for RSU Vesting (in shares)	(628,091)
Amount (in thousands of dollars)
Treasury Shares Issued for RSU Vesting	$ (13,305)

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Financial Instruments - Financial Liabilities (Details) - Fair value - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trade payables	$ 300,315	$ 390,277
Other taxes	49,159	50,099
Employee-related payables	73,251	74,781
Other current liabilities	35,709	35,886
Financial liabilities	2,858	4,405
Total	$ 461,292	$ 555,448

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Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2020

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The unaudited condensed consolidated financial statements included herein (the "Unaudited Condensed Consolidated Financial Statements") have been prepared by Criteo S.A. pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") have been condensed or omitted pursuant to such rules and regulations. However, the Company believes that the disclosures are adequate to make the information presented not misleading. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2019, filed with the SEC on March 2, 2020. The unaudited condensed consolidated financial statements included herein reflect all adjustments (consisting of normal, recurring adjustments) which are, in the opinion of management, necessary to state fairly the results for the interim periods presented. The results of operations for the interim periods presented are not necessarily indicative of the operating results to be expected for any subsequent interim period or for the fiscal year.

Conformity with U.S. GAAP requires the use of estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses in the condensed consolidated financial statements and accompanying notes. We base our estimates and judgments on historical information and on various other assumptions that we believe are reasonable under the circumstances. Our actual results may differ from these estimates. U.S. GAAP requires us to make estimates and judgments in several areas, including, but not limited to: (1) revenue recognition criteria, (2) allowances for credit losses, (3) research tax credits, (4) 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 associated with our transfer pricing policy and iii) recognition of income tax position in respect with tax reforms recently enacted in countries we operate, (5) assumptions used in valuing acquired assets and assumed liabilities in business combinations, (6) assumptions used in the valuation of goodwill, intangible assets and right of use assets - operating lease, and (7) assumptions used in the valuation model to determine the fair value of share-based compensation plan.

The ongoing impact of COVID-19 increases uncertainty associated with these estimates, in particular those related to allowance for credit losses, assumptions used in the valuation of goodwill and estimates relating to income taxes.

There have been no changes to our significant accounting policies described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019, except for the accounting pronouncements adopted below

Recently Issued Accounting Standards

Accounting Pronouncements adopted in 2020

Effective January 1, 2020, we have adopted the Financial Accounting Standards Board ("FASB") Accounting Standards Update ("ASU") No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss model which requires the use of forward-looking information to calculate credit loss estimates. This results in earlier recognition of credit losses.

We measure loss allowances for all trade receivables using the lifetime expected credit loss approach, as described above. The expected credit losses on these financial assets are estimated using a provision matrix based on the Company’s historical credit loss experience, adjusted for factors that are specific to the debtors, general economic conditions and an assessment of both the current as well as the forecast direction of conditions at the reporting date.

Effective January 1, 2020, we have adopted ASU 2017-04, Goodwill and Other (Topic 350). ASU 2017-04 simplifies the subsequent measurement of goodwill and reduces the cost and complexity of evaluating goodwill for impairment. It eliminates the need for entities to calculate the implied fair value of goodwill by assigning the fair value of a reporting unit to all of its assets and liabilities as if that reporting unit had been acquired in a business combination. Under this amendment, an entity will perform its goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An impairment charge is recognized for the amount by which the carrying value exceeds the reporting unit's fair value. The adoption of the ASU did not have an impact in our financial position or results of operations as we did not recognize an impairment loss during the period.

Effective January 1, 2020, we have adopted ASU 2018-15, Intangibles - Goodwill and Other - Internal Use Software - Customer’s Accounting for Implementation Costs incurred in a Cloud Computing Arrangement That is a Service Contract. This ASU was issued to clarify the accounting for implementation costs incurred for SaaS agreements. Previously the guidance only referred to development of internal use software and the accounting for SaaS agreements was not clarified. This ASU states that the implementation costs of SaaS agreements should be capitalized. The adoption of the standard did not have an impact on our financial position or results of operations, however, it did have a minor impact on expense classification in current and future periods.

Recent Accounting Pronouncements

In August 2018, the FASB issued ASU 2018-14, Compensation - Retirement Benefits - Defined Benefit Plans - General. The purpose of this update is to modify disclosure requirements for Defined Benefit Plans. It removes requirements to disclose the amounts in accumulated other comprehensive income expected to be recognized as components of net periodic benefit cost over the next fiscal year among others. It adds disclosure requirements for the items such as an explanation of the reasons for significant gains and losses related to changes in the benefit obligation for the period. We intend to adopt the standard on the effective date of January 1, 2021. The adoption of ASU 2018-14 is not expected to have a material impact on our financial position or results of operations but may have an impact on our disclosures.

In December 2019, the FASB issued Accounting Standard Update No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (ASU 2019-12), which simplifies the accounting for income taxes. We intend to adopt the standard on the effective date of January 1, 2021. The adoption of ASU 2019-12 is not expected to have a material impact on our financial position or results of operations but may have an impact on our disclosures.

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

Revenue

Revenue Recognition

We sell personalized display advertisements featuring product-level recommendations either directly to clients or to advertising agencies. Historically, the Criteo model has focused solely on converting our clients' website visitors into customers, enabling us to charge our clients only when users engage with an ad we deliver, usually by clicking on it. More recently, we have expanded our solutions to address a broader range of marketing goals for our clients.

We offer two families of solutions to our commerce and brand clients:

•Criteo Marketing Solutions allow commerce companies to address multiple marketing goals by engaging their consumers with personalized ads across the web, mobile and offline store environments.

•Criteo Retail Media solutions allow retailers to generate advertising revenues from consumer brands, and/or to drive sales for themselves, by monetizing their data and audiences through personalized ads, either on their own digital property or on the open Internet, that address multiple marketing goals.

In conjunction with broadening our solutions, we have also started expanding our pricing models to now include a combination of cost-per-install and cost-per-impression for selected new solutions, in addition to cost-per-click.

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

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

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

We act as principal in our arrangements because (i) we control the advertising inventory (spaces on websites) before it is transferred to our clients; (ii) we bear sole responsibility for fulfillment of the advertising promise and inventory risks and (iii) we have full discretion in establishing prices. Therefore, based on these factors, we report revenue earned and the related costs incurred on a gross basis.

Excluding our historical solution for driving Conversion through Criteo Marketing Solutions (formerly called Criteo Dynamic Retargeting), no individual solution accounted for more than 10% of total consolidated revenue for the periods presented.

Customer Credit Notes

We offer credit notes to certain customers as a form of incentive, which are accounted for as variable consideration. We estimate these amounts based on the expected amount to be provided to customers and they are recognized as a reduction of revenue. We believe that there will not be significant changes to our estimates of variable consideration.

Deferred Revenues

We record deferred revenues when cash payments are received or due in advance of our performance. Our payment terms vary depending on the service or the type of customer. For certain customers, we require payment before the services are delivered.

Practical Expedients  

We do not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed.

We generally expense sales commissions when incurred because the amortization period would have been one year or less. These costs are recorded within sales and operating expenses.

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Commitments and contingencies

3 Months Ended

Mar. 31, 2020

Commitments and Contingencies Disclosure [Abstract]

Commitments and contingencies

Commitments and contingencies

Commitments

Revolving Credit Facilities "RCF", Credit Line Facilities and Bank Overdrafts  

As mentioned in Note 3, we are party to an RCF with a syndicate of banks which allow us to draw up to €350.0 million ($383.5 million) until March 2022.

We are also party to short-term credit lines and overdraft facilities with HSBC plc, BNP Paribas and LCL with an authorization to draw up to a maximum of €21.5 million ($23.6 million) in aggregate under the short-term credit lines and overdraft facilities. As of March 31, 2020, we had not drawn on any of these facilities. Any loans or overdraft under these short-term facilities bear interest based on the one month EURIBOR rate or three month EURIBOR rate. As these facilities are exclusively short-term credit and overdraft facilities, our banks have the ability to terminate such facilities on short notice.

Contingencies

Changes in provisions during the presented periods are summarized below:

	Provision for employee-related litigation		Other provisions		Total
	(in thousands)
Balance at January 1, 2020	$	620	$	5,765	$	6,385
Increase	92		13		105
Provision used	(4)		(211)		(215)
Provision released not used	—		(42)		(42)
Currency translation adjustments	(12)		(201)		(213)
Balance at March 31, 2020	$	696	$	5,324	$	6,020
- of which current	696		5,324		6,020

The amount of the provisions represents management’s best estimate of the future outflow.

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Earnings Per Share - Basic (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Earnings Per Share [Abstract]
Net income attributable to shareholders of Criteo S.A.	$ 15,459	$ 19,120
Weighted average number of shares outstanding (in shares)	61,691,001	64,336,777
Basic earnings per share (in USD per share)	$ 0.25	$ 0.30

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Share-Based Compensation - Share-based compensation expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Share-based compensation expense	$ (8,131)	$ (13,522)
Total equity awards compensation expense	(8,503)	(13,882)
R&D
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Share-based compensation expense	(2,369)	(4,025)
Total equity awards compensation expense	(2,369)	(4,025)
S&O
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Share-based compensation expense	(3,680)	(6,201)
Total equity awards compensation expense	(3,680)	(6,201)
G&A
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Share-based compensation expense	(2,082)	(3,296)
Total equity awards compensation expense	(2,454)	(3,656)
RSUs
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Share-based compensation expense	(7,976)	(12,317)
RSUs | R&D
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Share-based compensation expense	(2,369)	(3,846)
RSUs | S&O
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Share-based compensation expense	(3,619)	(5,955)
RSUs | G&A
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Share-based compensation expense	(1,988)	(2,516)
Share options / BSPCE
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Share-based compensation expense	(155)	(1,205)
Share options / BSPCE | R&D
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Share-based compensation expense	0	(179)
Share options / BSPCE | S&O
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Share-based compensation expense	(61)	(246)
Share options / BSPCE | G&A
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Share-based compensation expense	(94)	(780)
BSAs
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Issuance of Stock and Warrants for Services or Claims	(372)	(360)
BSAs | R&D
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Issuance of Stock and Warrants for Services or Claims	0	0
BSAs | S&O
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Issuance of Stock and Warrants for Services or Claims	0	0
BSAs | G&A
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Issuance of Stock and Warrants for Services or Claims	$ (372)	$ (360)

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Leases - Additional Operating Leases (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Lessee, Lease, Description [Line Items]
Total Lease Liability	$ 161,209
Right of use assets - operating lease	139,954	$ 142,044
Offices
Lessee, Lease, Description [Line Items]
Total Lease Liability	11,295
Right of use assets - operating lease	8,446
Data Centers
Lessee, Lease, Description [Line Items]
Total Lease Liability	7,807
Right of use assets - operating lease	$ 7,807

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Significant Events and Transactions of the Period - Summary of Restructuring Reserve (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2020 USD ($)
Closing R&D Operations In Palo Alto
Restructuring Reserve [Roll Forward]
Beginning balance	$ 5,581
Restructuring costs	449
Amounts paid	(3,788)
Ending balance	2,242
New Organization Structure
Restructuring Reserve [Roll Forward]
Beginning balance	510
Restructuring costs	772
Amounts paid	(686)
Ending balance	$ 596

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Financial Instruments - Derivative Financial Instruments (Details) - Fair Value, Inputs, Level 2 - Fair value - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Derivative Assets:
Included in other current assets	$ 105	$ 0
Derivative Liabilities:
Included in financial liabilities - current portion	$ 0	$ 1,284

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Commitments and contingencies - Commitments (Details) - Mar. 31, 2020 - Revolving credit facility - RCF	USD ($)	EUR (€)
Bank Syndicate RCF
Debt Instrument [Line Items]
Revolving credit facility, maximum borrowing capacity	$ 383,500,000	€ 350,000,000.0
HSBC and LCL Facilities
Debt Instrument [Line Items]
Revolving credit facility, maximum borrowing capacity	$ 23,600,000	€ 21,500,000

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Breakdown of Revenue and Non-Current Assets by Geographical Areas - Revenue by Significant Other Countries (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue	$ 503,376	$ 558,123
United States
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue	173,027	195,791
Germany
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue	50,618	53,595
United Kingdom
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue	20,820	21,768
Japan
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue	$ 84,637	$ 93,168

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Leases - Components of Lease Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Lessee, Lease, Description [Line Items]
Lease expense	$ 12,850	$ 13,527
Short term lease expense	342	1,455
Variable lease expense	525	114
Sublease income	(202)	(1,076)
Total operating lease expense	13,515	14,020
Offices
Lessee, Lease, Description [Line Items]
Lease expense	6,314	8,340
Short term lease expense	286	925
Variable lease expense	9	0
Sublease income	(202)	(1,076)
Total operating lease expense	6,407	8,189
Data Centers
Lessee, Lease, Description [Line Items]
Lease expense	6,536	5,187
Short term lease expense	56	530
Variable lease expense	516	114
Sublease income	0	0
Total operating lease expense	$ 7,108	$ 5,831

XML

Trade Receivables - Narrative (Details) $ in Millions	3 Months Ended
	Mar. 31, 2020 USD ($)
Receivables [Abstract]
Accounts receivable, allowance for credit loss, recovery	$ 0.6

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Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2020

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

We are a global technology company building the leading advertising platform for the open Internet. We strive to deliver impactful business results at scale to commerce companies and consumer brands by meeting their marketing goals at their targeted return on investment. Using shopping data, predictive technology and large consumer reach, we help our clients drive Awareness, Consideration and Conversion for their products and services¹, and help retailers generate advertising revenues from brands. Our data is pooled among our clients and offers deep insights into consumer intent and purchasing habits. To drive measurable results for clients, we activate our data assets through proprietary artificial intelligence ("AI") technology to engage consumers in real time through the pricing and delivery of highly relevant digital advertisements ("ads"), across devices and environments. By pricing our offering on a range of pricing models and measuring our value based on clear, well-defined performance metrics, we make the return on investment transparent and easy to measure for advertisers.

In these notes, Criteo S.A. is referred to as the "Parent" company and together with its subsidiaries, collectively, as "Criteo," the "Company," the "Group," or "we".

^{___________________________________________________}

¹ Driving Awareness for a brand means exposing its brand name to consumers who have not been in touch with the brand before, thereby creating brand awareness from such consumers. Driving Consideration for an advertiser's products or services means attracting prospective new consumers to consider engaging with and/or buying this advertiser's products or services. Driving Conversion for an advertisers' products or services means triggering a purchase by consumers who have already engaged with this advertisers products or services in the past.

Summary of Significant Accounting Policies

Basis of Presentation

The unaudited condensed consolidated financial statements included herein (the "Unaudited Condensed Consolidated Financial Statements") have been prepared by Criteo S.A. pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") have been condensed or omitted pursuant to such rules and regulations. However, the Company believes that the disclosures are adequate to make the information presented not misleading. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2019, filed with the SEC on March 2, 2020. The unaudited condensed consolidated financial statements included herein reflect all adjustments (consisting of normal, recurring adjustments) which are, in the opinion of management, necessary to state fairly the results for the interim periods presented. The results of operations for the interim periods presented are not necessarily indicative of the operating results to be expected for any subsequent interim period or for the fiscal year.

Conformity with U.S. GAAP requires the use of estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses in the condensed consolidated financial statements and accompanying notes. We base our estimates and judgments on historical information and on various other assumptions that we believe are reasonable under the circumstances. Our actual results may differ from these estimates. U.S. GAAP requires us to make estimates and judgments in several areas, including, but not limited to: (1) revenue recognition criteria, (2) allowances for credit losses, (3) research tax credits, (4) 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 associated with our transfer pricing policy and iii) recognition of income tax position in respect with tax reforms recently enacted in countries we operate, (5) assumptions used in valuing acquired assets and assumed liabilities in business combinations, (6) assumptions used in the valuation of goodwill, intangible assets and right of use assets - operating lease, and (7) assumptions used in the valuation model to determine the fair value of share-based compensation plan.

The ongoing impact of COVID-19 increases uncertainty associated with these estimates, in particular those related to allowance for credit losses, assumptions used in the valuation of goodwill and estimates relating to income taxes.

There have been no changes to our significant accounting policies described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019, except for the accounting pronouncements adopted below.

Accounting Pronouncements adopted in 2020

Effective January 1, 2020, we have adopted the Financial Accounting Standards Board ("FASB") Accounting Standards Update ("ASU") No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss model which requires the use of forward-looking information to calculate credit loss estimates. This results in earlier recognition of credit losses.

We measure loss allowances for all trade receivables using the lifetime expected credit loss approach, as described above. The expected credit losses on these financial assets are estimated using a provision matrix based on the Company’s historical credit loss experience, adjusted for factors that are specific to the debtors, general economic conditions and an assessment of both the current as well as the forecast direction of conditions at the reporting date.

Effective January 1, 2020, we have adopted ASU 2017-04, Goodwill and Other (Topic 350). ASU 2017-04 simplifies the subsequent measurement of goodwill and reduces the cost and complexity of evaluating goodwill for impairment. It eliminates the need for entities to calculate the implied fair value of goodwill by assigning the fair value of a reporting unit to all of its assets and liabilities as if that reporting unit had been acquired in a business combination. Under this amendment, an entity will perform its goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An impairment charge is recognized for the amount by which the carrying value exceeds the reporting unit's fair value. The adoption of the ASU did not have an impact in our financial position or results of operations as we did not recognize an impairment loss during the period.

Effective January 1, 2020, we have adopted ASU 2018-15, Intangibles - Goodwill and Other - Internal Use Software - Customer’s Accounting for Implementation Costs incurred in a Cloud Computing Arrangement That is a Service Contract. This ASU was issued to clarify the accounting for implementation costs incurred for SaaS agreements. Previously the guidance only referred to development of internal use software and the accounting for SaaS agreements was not clarified. This ASU states that the implementation costs of SaaS agreements should be capitalized. The adoption of the standard did not have an impact on our financial position or results of operations, however, it did have a minor impact on expense classification in current and future periods.

Recent Accounting Pronouncements

In August 2018, the FASB issued ASU 2018-14, Compensation - Retirement Benefits - Defined Benefit Plans - General. The purpose of this update is to modify disclosure requirements for Defined Benefit Plans. It removes requirements to disclose the amounts in accumulated other comprehensive income expected to be recognized as components of net periodic benefit cost over the next fiscal year among others. It adds disclosure requirements for the items such as an explanation of the reasons for significant gains and losses related to changes in the benefit obligation for the period. We intend to adopt the standard on the effective date of January 1, 2021. The adoption of ASU 2018-14 is not expected to have a material impact on our financial position or results of operations but may have an impact on our disclosures.

In December 2019, the FASB issued Accounting Standard Update No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (ASU 2019-12), which simplifies the accounting for income taxes. We intend to adopt the standard on the effective date of January 1, 2021. The adoption of ASU 2019-12 is not expected to have a material impact on our financial position or results of operations but may have an impact on our disclosures.

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

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Cover Page - shares	3 Months Ended
	Mar. 31, 2020	Apr. 29, 2020
Document Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2020
Document Transition Report	false
Entity File Number	001-36153
Entity Registrant Name	Criteo S.A.
Entity Incorporation, State or Country Code	I0
Entity Address, Address Line One	32 Rue Blanche
Entity Address, City or Town	Paris
Entity Address, Country	FR
Entity Address, Postal Zip Code	75009
Country Region	33
City Area Code	40
Local Phone Number	40 22 90
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Emerging Growth Company	false
Entity Small Business	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		61,724,141
Entity Central Index Key	0001576427
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q1
Amendment Flag	false
American Depositary Shares
Document Information [Line Items]
Title of 12(b) Security	American Depositary Shares, each representing one Ordinary Share,nominal value €0.025 per share
Trading Symbol	CRTO
Security Exchange Name	NASDAQ
Ordinary Shares
Document Information [Line Items]
Title of 12(b) Security	​Ordinary Shares, nominal value €0.025 per share​*
No Trading Symbol Flag	true
Security Exchange Name	NASDAQ

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Leases (Tables)

3 Months Ended

Mar. 31, 2020

Leases [Abstract]

Components of leases

The components of lease expense are as follows:

	Three Months Ended						Three Months Ended
	March 31, 2019						March 31, 2020
	Offices		Data Centers		Total		Offices		Data Centers		Total
	(in thousands)
Lease expense	$	8,340	$	5,187	$	13,527	$	6,314	$	6,536	$	12,850
Short term lease expense	925		530		1,455		286		56		342
Variable lease expense	—		114		114		9		516		525
Sublease income	(1,076)		—		(1,076)		(202)		—		(202)
Total operating lease expense	$	8,189	$	5,831	$	14,020	$	6,407	$	7,108	$	13,515

The weighted average remaining lease term and discount rates as of March 31, 2020 are as follows:

	March 31, 2019		March 31, 2020
Weighted average remaining lease term (years)
Offices	5.4		4.5
Data Centers	3.0		3.0
Weighted average discount rate
Offices	2.6	%	2.5	%
Data Centers	1.7	%	1.7	%

Supplemental cash flow information related to our operating leases is as follows for the period ended March 31, 2020:

	Three Months Ended
	March 31, 2019		March 31, 2020
	(in thousands)
Cash paid for amounts included in the measurement of lease liabilities
Cash flow for operating activities	$	(13,964)	$	(14,048)
Right of use assets obtained in exchange for new operating lease liabilities	$	10,926	$	—

As of March 31, 2020, we have additional operating leases, that have not yet commenced which will result in additional operating lease liabilities and right of use assets:

	Offices		Data Centers
	(in thousands)
Additional operating lease liabilities	$	11,295	$	7,807
Additional right of use assets	$	8,446	$	7,807

Schedule of future minimum lease payments

As of March 31, 2020, we had future minimum lease payments as follows:

	March 31, 2020
	Offices		Data Centers		Total
	(in thousands)
Remainder of 2020	$	24,813	$	14,251	$	39,064
2021	30,386		14,586		44,972
2022	27,839		10,714		38,553
2023	18,455		4,383		22,838
2024	9,413		2,229		11,642
Thereafter	14,285		373		14,658
Total minimum lease payments	125,191		46,536		171,727
Impact of Discount Rate	(9,748)		(770)		(10,518)
Total Lease Liability	$	115,443	$	45,766	$	161,209

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Statement of Comprehensive Income [Abstract]
Net income	$ 16,428	$ 21,401
Foreign currency translation differences, net of taxes	(15,932)	(10,492)
Actuarial (losses) gains on employee benefits, net of taxes	1,734	(1,053)
Other comprehensive income (loss)	(14,198)	(11,545)
Total comprehensive income (loss)	2,230	9,856
Attributable to shareholders of Criteo S.A.	1,281	7,773
Attributable to non-controlling interests	$ 949	$ 2,083

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Income Taxes (Tables)

3 Months Ended

Mar. 31, 2020

Income Tax Disclosure [Abstract]

Schedule of Provision for income taxes

The condensed consolidated statements of income line item “Provision for income taxes” can be broken down as follows:

	Three Months Ended
	March 31, 2019		March 31, 2020
	(in thousands)
Current income tax	$	(15,934)	$	(9,718)
Net change in deferred taxes	5,916		2,678
Provision for income taxes	$	(10,018)	$	(7,040)

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Share-Based Compensation

3 Months Ended

Mar. 31, 2020

Share-based Payment Arrangement [Abstract]

Share-Based Compensation

Share-Based Compensation

The board of directors has been authorized by the general meeting of the shareholders to grant employee warrants (Bons de Souscription de Parts de Créateur d’Entreprise or "BSPCEs"), share options (Options de Souscription d'Actions or "OSAs"), restricted share units ("RSUs") and non-employee warrants (Bons de Souscription d'Actions or "BSAs").

During the three months ended March 31, 2020, there was one grant of RSUs under the Employee Share Option Plan 12 as defined in Note 20 to our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2019.

On March 2, 2020, 40,240 RSUs were granted to Criteo employees subject to continued employment and 43,217 RSUs and 43,217 PSUs were granted to a member of the management subject to continued employment.

There have been no changes in the vesting and method of valuation of the BSPCEs, OSAs, RSUs, or BSAs from what was disclosed in Note 20 to the consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2019, filed with the SEC on March 2, 2020.

Change in Number of BSPCE/OSA/RSU/BSA

	OSA/BSPCE	RSU	BSA	Total
Balance at January 1, 2020	2,559,534	4,978,987	363,767	7,902,288
Granted	—	126,674	—	126,674
Exercised (OSA/BSPCE/BSA)	(5,700)	—	—	(5,700)
Vested (RSU)	—	(640,528)	—	(640,528)
Forfeited	(107,929)	(275,710)	(12,742)	(396,381)
Expired	(3,600)	—	—	(3,600)
Balance at March 31, 2020	2,442,305	4,189,423	351,025	6,982,753

Breakdown of the Closing Balance

	OSA/BSPCE		RSU	BSA
Number outstanding	2,442,305		4,189,423	351,025
Weighted-average exercise price	€	23.01	NA	€	14.82
Number vested	1,815,222		NA	154,576
Weighted-average exercise price	€	24.40	NA	€	17.42
Weighted-average remaining contractual life of options outstanding, in years	5.8		NA	7.4

Reconciliation with the Unaudited Consolidated Statements of Income

	Three Months Ended
	March 31, 2019								March 31, 2020
	(in thousands)
	R&D		S&O		G&A		Total		R&D		S&O		G&A		Total
RSUs	$	(3,846)	$	(5,955)	$	(2,516)	$	(12,317)	$	(2,369)	$	(3,619)	$	(1,988)	$	(7,976)
Share options / BSPCE	(179)		(246)		(780)		(1,205)		—		(61)		(94)		(155)
Total share-based compensation	(4,025)		(6,201)		(3,296)		(13,522)		(2,369)		(3,680)		(2,082)		(8,131)
BSAs	—		—		(360)		(360)		—		—		(372)		(372)
Total equity awards compensation expense	$	(4,025)	$	(6,201)	$	(3,656)	$	(13,882)	$	(2,369)	$	(3,680)	$	(2,454)	$	(8,503)

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Intangible Assets and Goodwill

3 Months Ended

Mar. 31, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible assets and Goodwill

Intangible Assets and Goodwill

There have been no significant additions to intangible assets or goodwill since December 31, 2019.

Due to the changes in the current economic environment and the recent decline in global equity markets related to the COVID-19 pandemic, we believe that there has been a change in events and circumstances that may indicate that the carrying amount of goodwill might not be recoverable. We have therefore conducted an interim impairment test between our annual tests. This interim test was based on a stretched scenario reflecting the estimated impact of COVID-19, built on top of the business plan used for our 2019 annual test. The test concluded that the reporting unit’s fair value is above its carrying amount, including goodwill. Therefore, no impairment loss was recorded.

In addition, no triggering events have occurred that would indicate impairment of intangible assets.

The estimated amortization expense related to intangible assets for the next five years and thereafter is as follows:

	Software		Technology and customer relationships		Total
	(in thousands)
From April 1 to December 31, 2020	$	6,420	$	8,537	$	14,957
2021	7,414		11,382		18,796
2022	4,826		11,382		16,208
2023	2,652		10,897		13,549
2024	685		8,700		9,385
Thereafter	59		6,852		6,911
Total	$	22,056	$	57,750	$	79,806

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Significant Events and Transactions of the Period

3 Months Ended

Mar. 31, 2020

Restructuring and Related Activities [Abstract]

Significant Events and Transactions of the Period

Significant Events and Transactions of the Period

Share repurchase program

On October 25, 2018, Criteo's Board of Directors authorized a share repurchase program of up to $80.0 million of the Company’s outstanding American Depositary Shares. We completed this share repurchase program in 2018. As of December 31, 2018, 3.5 million shares were held as treasury shares.

On February 8, 2019, the Board of Directors authorized the reduction of capital resulting in the formal retirement of 1.6 million treasury shares.

On July 26, 2019, Criteo's Board of Directors authorized a share repurchase program of up to $80.0 million of the Company's outstanding American Depositary Shares. As of December 31, 2019, 3.2 million shares were held as treasury shares as part of the share repurchase program authorized on July 26, 2019.

As of March 31, 2020, we had 4.5 million treasury shares remaining which may be used to satisfy the Company's obligations under its employee equity plans upon RSU vestings in lieu of issuing new shares, and for M&A activity. We completed the 2019 share repurchase program in February 2020.

	Number of Treasury Shares	Amount (in thousands of dollars)
Balance at January 1, 2020	3,903,673	$	74,900
Treasury Shares Repurchased for RSU Vesting	1,258,068	18,239
Treasury Shares Issued for RSU Vesting	(628,091)	(13,305)
Balance at March 31, 2020	4,533,650	$	79,834

Restructuring

Cease of our R&D operations in Palo Alto

On October 7, 2019, in connection with the new organization structure, the Company announced a plan to restructure its R&D activities with the closing of its R&D operations in Palo Alto. The Company incurred additional net restructuring costs of $0.4 million for the three month period ended March 31, 2020 comprising of payroll expenses included in Research and Development expenses.

The following table summarizes restructuring activities as of March 31, 2020 included in other current liabilities on the balance sheet:

	Three Months Ended
	March 31, 2020
	(in thousands)
Restructuring liability - January 1, 2020	$	5,581
Restructuring costs	449
Amount paid	(3,788)
Restructuring liability - March 31, 2020	2,242

New organization structure

As part of a new organization structure designed to best support our multi-product platform strategy and accelerate execution, commenced in the twelve month period ended December 31, 2019, the Company incurred net restructuring costs of $0.8 million for the three month period ended March 31, 2020, comprising of payroll expenses.

	Three Months Ended
	March 31, 2020
	(in thousands)
Payroll related costs	$	(772)
Total restructuring costs	(772)

For the three month period ended March 31, 2020, $0.2 million was included in Research and Development expenses and $0.6 million was included in Sales and Operations expenses.

The following table summarizes restructuring activities as of March 31, 2020 included in other current liabilities on the balance sheet:

	Three Months Ended
	March 31, 2020
	(in thousands)
Restructuring liability - January 1, 2020	$	510
Restructuring costs	772
Amount paid	(686)
Restructuring liability - March 31, 2020	596

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Related Parties

3 Months Ended

Mar. 31, 2020

Related Party Transactions [Abstract]

Related Parties

Related Parties

There were no significant related-party transactions during the period nor any change in the nature of the transactions as described in Note 25 to the consolidated financial statements included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2019 except as follows:

On March 2, 2020, the Group announced that Chief Financial Officer Benoit Fouilland plans to depart from Criteo at the end of the second quarter 2020. Mr. Fouilland has indicated that he will remain fully committed to his role as Chief Financial Officer and member of the senior executive team, and will play an active role in identifying and hiring his successor to ensure an orderly and smooth transition until his anticipated departure date of June 30, 2020.

The Executive Officers as of March 31, 2020 were:

• Jean-Baptiste Rudelle - Chairman

• Megan Clarken - Chief Executive Officer

• Benoit Fouilland - Chief Financial Officer

• Ryan Damon - General Counsel and Corporate Secretary

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Income Taxes

3 Months Ended

Mar. 31, 2020

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

Breakdown of Income Taxes

The tax provision for interim periods is determined using an estimate of our annual effective tax rate (“AETR”), adjusted for discrete items arising in the period. To calculate our estimated AETR, we estimate our income before taxes and the related tax expense or benefit for the full fiscal year (total of expected current and deferred tax provisions), excluding the effect of significant unusual or infrequently occurring items or comprehensive income items not recognized in the statement of income. Each quarter, we update our estimate of the annual effective tax rate, and if our estimated annual tax rate does change, we make a cumulative adjustment in that quarter. Our quarterly tax provision, and our quarterly estimate of our annual effective tax rate, are subject to significant volatility due to several factors including our ability to accurately predict our income (loss) before provision for income taxes in multiple jurisdictions and the changes in foreign exchange rates. Our effective tax rate in the future will depend on the portion of our profits earned within and outside of France.

The condensed consolidated statements of income line item “Provision for income taxes” can be broken down as follows:

	Three Months Ended
	March 31, 2019		March 31, 2020
	(in thousands)
Current income tax	$	(15,934)	$	(9,718)
Net change in deferred taxes	5,916		2,678
Provision for income taxes	$	(10,018)	$	(7,040)

For the three months ended March 31, 2019 and 2020, we used an annual estimated tax rate of 30% to calculate the provision for income taxes. The effective tax rate was 32% and 30% for the three months ended March 31, 2019 and 2020, respectively. The difference between the annual estimated tax rate and the effective tax rate is mainly due to the tax impact of discrete items such as share-based compensation in the United States. Discrete items were immaterial for the three months ended March 31, 2020 resulting in no material difference between the annual estimated tax rate and the effective tax rate.

Current tax assets and liabilities

The total amount of current tax assets consists mainly of prepayments of income taxes and credits of Criteo SA, Criteo Corp. and Criteo Gmbh. The current tax liabilities refers mainly to the corporate tax payables of Criteo K.K.

Ongoing tax inspection in the United States

On September 27, 2017, we received a draft notice of proposed adjustment (NOPA) from the Internal Revenue Service ("IRS") audit of Criteo Corp. for the year ended December 31, 2014, confirmed by the definitive notice dated February 8, 2018. Although we disagree with the IRS's position and are currently contesting this issue, the ultimate resolution of this litigation is uncertain and, if resolved in a manner unfavorable to us, could result in an additional federal tax liability of an estimated maximum aggregate amount of approximately $15.0 million, excluding related fees, interest and penalties.

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Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2020

Fair Value Disclosures [Abstract]

Schedules of concentration of risk

The maximum exposure to credit risk at the end of each reported period is represented by the carrying amount of financial assets, and summarized in the following table:

	December 31, 2019		March 31, 2020
	(in thousands)
Trade receivables, net of allowance	481,732		364,440
Other taxes	60,924		65,293
Other current assets	17,225		19,832
Non-current financial assets	21,747		20,373
Total	$	581,628	$	469,938

Schedule of financial liabilities

	December 31, 2019		March 31, 2020
	(in thousands)
Trade payables	$	390,277	$	300,315
Other taxes	50,099		49,159
Employee-related payables	74,781		73,251
Other current liabilities	35,886		35,709
Financial liabilities	4,405		2,858
Total	$	555,448	$	461,292

Schedule of derivative financial instruments

	December 31, 2019		March 31, 2020
	(in thousands)
Derivative Assets:
Included in other current assets	$	—	$	105
Derivative Liabilities:
Included in financial liabilities - current portion	$	1,284	$	—

Schedule of assets and liabilities carried at fair value

	December 31, 2019		March 31, 2020
	(in thousands)
Cash equivalents	$	189,119	$	169,569
Cash on hand	229,644		266,937
Total cash and cash equivalents	$	418,763	$	436,506

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Financial Instruments (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2020	Dec. 31, 2019	Jan. 01, 2020
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Net change in allowance for credit losses	$ (7,000)	$ 9,900
Retained earnings	$ 450,480	$ 451,725
Accounting Standards Update 2016-13 | Cumulative Effect, Period Of Adoption, Adjustment
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Retained earnings			$ (3,500)

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Significant Events and Transactions of the Period - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Dec. 31, 2019	Jul. 26, 2019	Feb. 08, 2019	Dec. 31, 2018	Oct. 25, 2018
Restructuring Cost and Reserve [Line Items]
Treasury stock (in shares)	4,533,650	3,903,673			3,500,000
Shares authorized to be repurchased and retired (in shares)				1,600,000
Closing R&D Operations In Palo Alto
Restructuring Cost and Reserve [Line Items]
Restructuring costs	$ 449
New Organization Structure
Restructuring Cost and Reserve [Line Items]
Restructuring costs	772
American Depositary Shares
Restructuring Cost and Reserve [Line Items]
Authorized amount of share repurchase program			$ 80,000			$ 80,000
Treasury stock (in shares)		3,200,000
Research and Development expense | New Organization Structure
Restructuring Cost and Reserve [Line Items]
Restructuring costs	200
Sales and Operations expense | New Organization Structure
Restructuring Cost and Reserve [Line Items]
Restructuring costs	$ 600

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Financial Instruments - Financial Assets and Credit Risk (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2020	Dec. 31, 2019
Concentration Risk [Line Items]
Maximum exposure	$ 469,938	$ 581,628
Trade receivables, net of allowance
Concentration Risk [Line Items]
Maximum exposure	364,440	481,732
Other taxes
Concentration Risk [Line Items]
Maximum exposure	65,293	60,924
Other current assets
Concentration Risk [Line Items]
Maximum exposure	19,832	17,225
Non-current financial assets
Concentration Risk [Line Items]
Maximum exposure	$ 20,373	$ 21,747

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Financial Income and Expenses - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Other Income and Expenses [Abstract]
Financial income (expense)	$ (334)	$ (1,974)

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Share-Based Compensation - Change in Number of BSPCE/OSA/RSU/BSA (Details)	3 Months Ended
	Mar. 31, 2020 shares
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments [Roll Forward]
Beginning balance (in shares)	7,902,288
Granted (in shares)	126,674
Exercised (in shares)	(5,700)
Vested (in shares)	(640,528)
Forfeited (in shares)	(396,381)
Expired (in shares)	(3,600)
Ending balance (in shares)	6,982,753
OSA/BSPCE
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
Beginning balance, options (in shares)	2,559,534
Granted, options (in shares)	0
Exercised, options (in shares)	(5,700)
Vested, options (in shares)	0
Forfeited, options (in shares)	(107,929)
Expired, options (in shares)	(3,600)
Ending balance, options (in shares)	2,442,305
RSU
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Beginning balance (in shares)	4,978,987
Granted (in shares)	126,674
Exercised (in shares)	0
Vested (in shares)	(640,528)
Forfeited (in shares)	(275,710)
Expired (in shares)	0
Ending balance (in shares)	4,189,423
BSAs
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
Beginning balance, options (in shares)	363,767
Granted, options (in shares)	0
Exercised, options (in shares)	0
Vested, options (in shares)	0
Forfeited, options (in shares)	(12,742)
Expired, options (in shares)	0
Ending balance, options (in shares)	351,025

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Intangible Assets and Goodwill (Details) $ in Thousands	Mar. 31, 2020 USD ($)
Estimated Amortization Expense Maturity
From April 1 to December 31, 2020	$ 14,957
2021	18,796
2022	16,208
2023	13,549
2024	9,385
Thereafter	6,911
Total	79,806
Software
Estimated Amortization Expense Maturity
From April 1 to December 31, 2020	6,420
2021	7,414
2022	4,826
2023	2,652
2024	685
Thereafter	59
Total	22,056
Technology and customer relationships
Estimated Amortization Expense Maturity
From April 1 to December 31, 2020	8,537
2021	11,382
2022	11,382
2023	10,897
2024	8,700
Thereafter	6,852
Total	$ 57,750

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Trade Receivables - Breakdown in Trade Receivables (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019	Mar. 31, 2019	Dec. 31, 2018
Receivables [Abstract]
Trade accounts receivables	$ 387,524	$ 497,800
(Less) Allowance for credit losses	(23,084)	(16,068)	$ (25,169)	$ (25,918)
Net book value at end of period	$ 364,440	$ 481,732

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Leases - Weighted Average Remaining Lease Term and Discount Rates (Details)	Mar. 31, 2020	Mar. 31, 2019
Offices
Weighted average remaining lease term (years)
Weighted average remaining lease term (years)	4 years 6 months	5 years 4 months 24 days
Weighted average discount rate
Weighted average discount rate	2.50%	2.60%
Data Centers
Weighted average remaining lease term (years)
Weighted average remaining lease term (years)	3 years	3 years
Weighted average discount rate
Weighted average discount rate	1.70%	1.70%

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Breakdown of Revenue and Non-Current Assets by Geographical Areas - Narrative (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2020 USD ($) market	Mar. 31, 2019 USD ($)
Revenues from External Customers and Long-Lived Assets [Line Items]
Number of geographical markets | market	3
Revenue	$ 503,376	$ 558,123
Sales Revenue, Net | Customer Concentration Risk
Revenues from External Customers and Long-Lived Assets [Line Items]
Concentration risk, percentage	3.30%	2.10%
France
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue	$ 32,000	$ 37,400

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Subsequent Events (Details) - Apr. 29, 2020 - Subsequent Event € in Millions, $ in Millions	EUR (€)	USD ($)
Subsequent Event [Line Items]
Authorized amount of share repurchase program		$ 30
Multicurrency Revolving Facility Agreement | Revolving credit facility
Subsequent Event [Line Items]
Proceeds from lines of credit	€ 140	$ 150

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Leases

3 Months Ended

Mar. 31, 2020

Leases [Abstract]

Leases

Leases

We have adopted Topic 842 effective January 1, 2019 on a modified retrospective basis and elected not to restate comparative periods. We chose to use certain practical expedients offered by the standard including:

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

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

•We used hindsight in determining the lease term.

We lease space under non-cancellable operating leases for our offices as well as our data centers. Our office leases typically include free rent periods or rent escalation periods, and may also include leasehold improvement incentives. Leases for data centers may also include free rent periods or rent escalation periods. These leases typically do not include residual value guarantees. Both office and data center leases may contain both lease components (rent) and non-lease components (maintenance, electrical costs, and other service charges). Non-lease components are accounted for separately.

Both office and data center leases typically contain options to renew, and/or early terminate. We have evaluated management's expectations for these options as of March 31, 2020. Options have been included in the lease term if management has determined it is reasonably certain it will be exercised.

Operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate at lease commencement to determine the present value of future payments. We have a centralized treasury function, and the majority of our leases are negotiated and signed by representatives of Criteo SA. As such, the incremental borrowing rate of Criteo SA is used for all of our contracts. It is then adjusted in consideration of the currency of the lease and the lease term as of the lease commencement date.

Lease expense is recognized for minimum lease payments on a straight-line basis over the lease term. Variable costs are expensed in the period incurred. Variable expenses include changes in indexation. Leases for data centers may have variable costs based on electrical usage.

The components of lease expense are as follows:

	Three Months Ended						Three Months Ended
	March 31, 2019						March 31, 2020
	Offices		Data Centers		Total		Offices		Data Centers		Total
	(in thousands)
Lease expense	$	8,340	$	5,187	$	13,527	$	6,314	$	6,536	$	12,850
Short term lease expense	925		530		1,455		286		56		342
Variable lease expense	—		114		114		9		516		525
Sublease income	(1,076)		—		(1,076)		(202)		—		(202)
Total operating lease expense	$	8,189	$	5,831	$	14,020	$	6,407	$	7,108	$	13,515

As of March 31, 2020, we had future minimum lease payments as follows:

	March 31, 2020
	Offices		Data Centers		Total
	(in thousands)
Remainder of 2020	$	24,813	$	14,251	$	39,064
2021	30,386		14,586		44,972
2022	27,839		10,714		38,553
2023	18,455		4,383		22,838
2024	9,413		2,229		11,642
Thereafter	14,285		373		14,658
Total minimum lease payments	125,191		46,536		171,727
Impact of Discount Rate	(9,748)		(770)		(10,518)
Total Lease Liability	$	115,443	$	45,766	$	161,209

The weighted average remaining lease term and discount rates as of March 31, 2020 are as follows:

	March 31, 2019		March 31, 2020
Weighted average remaining lease term (years)
Offices	5.4		4.5
Data Centers	3.0		3.0
Weighted average discount rate
Offices	2.6	%	2.5	%
Data Centers	1.7	%	1.7	%

Supplemental cash flow information related to our operating leases is as follows for the period ended March 31, 2020:

	Three Months Ended
	March 31, 2019		March 31, 2020
	(in thousands)
Cash paid for amounts included in the measurement of lease liabilities
Cash flow for operating activities	$	(13,964)	$	(14,048)
Right of use assets obtained in exchange for new operating lease liabilities	$	10,926	$	—

As of March 31, 2020, we have additional operating leases, that have not yet commenced which will result in additional operating lease liabilities and right of use assets:

	Offices		Data Centers
	(in thousands)
Additional operating lease liabilities	$	11,295	$	7,807
Additional right of use assets	$	8,446	$	7,807

These operating leases will commence during the fiscal year ending December 31, 2020.

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Trade Receivables

3 Months Ended

Mar. 31, 2020

Receivables [Abstract]

Trade Receivables

Trade Receivables

The following table shows the breakdown in trade receivables net book value for the presented periods:

	December 31, 2019		March 31, 2020
	(in thousands)
Trade accounts receivables	$	497,800	$	387,524
(Less) Allowance for credit losses	(16,068)		(23,084)
Net book value at end of period	$	481,732	$	364,440

Changes in allowance for credit accounts are summarized below:

	2019		2020
	(in thousands)
Balance at January 1	$	(25,918)	$	(16,068)
Allowance for credit losses through retained earnings (*)	—		(3,498)
Allowance for credit losses	(5,282)		(6,997)
Reversal of provision	5,931		2,989
Currency translation adjustment	100		490
Balance at March 31	$	(25,169)	$	(23,084)

(*) From January 1, 2020, we adopted ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost issued by the Financial Accounting Standards Board (FASB). ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss model which requires the use of forward-looking information to calculate credit loss estimates. This results in earlier recognition of credit losses. We adopted ASU 2016-13 effective January 1, 2020 with the cumulative effect of adoption recorded as an adjustment to retained earnings (note 1).

The amount charged to allowance for credit losses for the three months ended March 31, 2020 increased compared to the same period in the prior year due to the application of the expected credit loss model beginning on January 1, 2020 as well as an increase in the provision due to the expected impact of COVID-19 on the Company's future cash collections.

The reversal of provision decreased during the three month period ended March 31, 2020, mainly due to lower payments received and write-offs of long outstanding receivables already reserved for which it is certain we will not collect the receivable. During the three months ended March 31, 2020, the Company recovered $0.6 million previously written off, accounted for as a reversal of provision.

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

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Commitments and contingencies (Tables)

3 Months Ended

Mar. 31, 2020

Commitments and Contingencies Disclosure [Abstract]

Changes in provisions for contingencies

Changes in provisions during the presented periods are summarized below:

	Provision for employee-related litigation		Other provisions		Total
	(in thousands)
Balance at January 1, 2020	$	620	$	5,765	$	6,385
Increase	92		13		105
Provision used	(4)		(211)		(215)
Provision released not used	—		(42)		(42)
Currency translation adjustments	(12)		(201)		(213)
Balance at March 31, 2020	$	696	$	5,324	$	6,020
- of which current	696		5,324		6,020

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Intangible Assets and Goodwill (Tables)

3 Months Ended

Mar. 31, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of estimated future amortization expense related to intangible assets

The estimated amortization expense related to intangible assets for the next five years and thereafter is as follows:

	Software		Technology and customer relationships		Total
	(in thousands)
From April 1 to December 31, 2020	$	6,420	$	8,537	$	14,957
2021	7,414		11,382		18,796
2022	4,826		11,382		16,208
2023	2,652		10,897		13,549
2024	685		8,700		9,385
Thereafter	59		6,852		6,911
Total	$	22,056	$	57,750	$	79,806

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CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (UNAUDITED) (Parenthetical) $ in Thousands	Mar. 31, 2020 € / shares	Mar. 31, 2020 USD ($) shares	Dec. 31, 2019 € / shares	Dec. 31, 2019 USD ($) shares
Statement of Financial Position [Abstract]
Trade receivables, allowances | $		$ 23,084		$ 16,068
Common shares, par value (in Euro per share) | € / shares	€ 0.025		€ 0.025
Common shares authorized (in shares)		66,202,881		66,197,181
Common shares issued (in shares)		66,202,881		66,197,181
Common shares outstanding (in shares)		66,202,881		66,197,181
Treasury stock (in shares)		4,533,650		3,903,673

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Share-Based Compensation (Tables)

3 Months Ended

Mar. 31, 2020

Share-based Payment Arrangement [Abstract]

Disclosure of share-based compensation by share-based payment award

Change in Number of BSPCE/OSA/RSU/BSA

	OSA/BSPCE	RSU	BSA	Total
Balance at January 1, 2020	2,559,534	4,978,987	363,767	7,902,288
Granted	—	126,674	—	126,674
Exercised (OSA/BSPCE/BSA)	(5,700)	—	—	(5,700)
Vested (RSU)	—	(640,528)	—	(640,528)
Forfeited	(107,929)	(275,710)	(12,742)	(396,381)
Expired	(3,600)	—	—	(3,600)
Balance at March 31, 2020	2,442,305	4,189,423	351,025	6,982,753

Breakdown of the Closing Balance

	OSA/BSPCE		RSU	BSA
Number outstanding	2,442,305		4,189,423	351,025
Weighted-average exercise price	€	23.01	NA	€	14.82
Number vested	1,815,222		NA	154,576
Weighted-average exercise price	€	24.40	NA	€	17.42
Weighted-average remaining contractual life of options outstanding, in years	5.8		NA	7.4

Schedule of share-based compensation reconciliation with the Consolidated Statements of Income

Reconciliation with the Unaudited Consolidated Statements of Income

	Three Months Ended
	March 31, 2019								March 31, 2020
	(in thousands)
	R&D		S&O		G&A		Total		R&D		S&O		G&A		Total
RSUs	$	(3,846)	$	(5,955)	$	(2,516)	$	(12,317)	$	(2,369)	$	(3,619)	$	(1,988)	$	(7,976)
Share options / BSPCE	(179)		(246)		(780)		(1,205)		—		(61)		(94)		(155)
Total share-based compensation	(4,025)		(6,201)		(3,296)		(13,522)		(2,369)		(3,680)		(2,082)		(8,131)
BSAs	—		—		(360)		(360)		—		—		(372)		(372)
Total equity awards compensation expense	$	(4,025)	$	(6,201)	$	(3,656)	$	(13,882)	$	(2,369)	$	(3,680)	$	(2,454)	$	(8,503)

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands		3 Months Ended
		Mar. 31, 2020	Mar. 31, 2019
Cash from operating activities
Net income		$ 16,428	$ 21,401
Non-cash and non-operating items		32,828	24,998
- Amortization and provisions		27,044	19,644
- Net gain (loss) on disposal of non-current assets		2,266	0
- Equity awards compensation expense	[1]	8,502	13,882
- Change in deferred taxes		(2,678)	(5,916)
- Income tax for the period		(2,329)	(1,934)
- Other		23	(678)
Changes in working capital related to operating activities		7,487	20,821
- Decrease in trade receivables		99,388	86,018
- (Decrease) in trade payables		(81,679)	(58,485)
- (Increase) in other current assets		(10,398)	(5,992)
- Increase/(Decrease) in other current liabilities		(945)	2,436
- Change in operating lease liabilities and right of use assets		1,121	(3,156)
Cash from operating activities		56,743	67,220
Cash used for investing activities
Acquisition of intangible assets, property, plant and equipment		(11,258)	(13,292)
Change in accounts payable related to intangible assets, property, plant and equipment		(479)	(10,392)
(Payment for) Disposal of a business, net of cash acquired (disposed)		0	(5,325)
Change in other non-current financial assets		889	(32)
Cash used for investing activities		(10,848)	(29,041)
Cash used for financing activities
Repayment of borrowings		(170)	(172)
Proceeds from capital increase		4	11
Change in treasury stocks		(18,241)	0
Change in other financial liabilities		(354)	(30)
Cash used for financing activities		(18,761)	(191)
Effect of exchange rates changes on cash and cash equivalents		(9,391)	(6,643)
Net increase in cash and cash equivalents		17,743	31,345
Net cash and cash equivalents at beginning of period		418,763	364,426
Net cash and cash equivalents at end of period		436,506	395,771
Supplemental disclosures of cash flow information
Cash paid for taxes, net of refunds		(12,047)	(17,868)
Cash paid for interest, net of amounts capitalized		$ (349)	$ (407)

[1] Of which $13.5 million and $8.1 million of equity awards compensation expense consisted of share-based compensation expense according to ASC 718 Compensation - stock compensation for the quarter ended March 31, 2019 and 2020, respectively.

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Leases - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Cash Flow, Operating Activities, Lessee [Abstract]
Cash flow for operating activities	$ (14,048)	$ (13,964)
Right of use assets obtained in exchange for new operating lease liabilities	$ 0	$ 10,926

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Other Current Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Other Liabilities Disclosure [Abstract]
Clients' prepayments	$ 11,249	$ 13,618
Credit notes	18,993	16,420
Accounts payable relating to capital expenditures	3,834	4,408
Other creditors	1,447	1,213
Deferred revenue	186	227
Total	$ 35,709	$ 35,886

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Trade Receivables - Allowance for Doubtful Accounts Rollforward (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Accounts Receivable, Allowance for Credit Loss [Roll Forward]
January 1	$ (16,068)	$ (25,918)
Allowance for credit losses through retained earnings	(6,997)	(5,282)
Reversal of provision	2,989	5,931
Currency translation adjustment	490	100
March 31	(23,084)	$ (25,169)
Cumulative Effect, Period Of Adoption, Adjustment
Accounts Receivable, Allowance for Credit Loss [Roll Forward]
January 1	$ 3,498

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Commitments and contingencies - Contingencies (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2020 USD ($)
Loss Contingency Accrual [Roll Forward]
Contingencies accrual, beginning balance	$ 6,385
Increase	105
Provision used	(215)
Provision released not used	(42)
Currency translation adjustments	(213)
Contingencies accrual, ending balance	6,020
Contingencies accrual, of which current	6,020
Provision for employee-related litigation
Loss Contingency Accrual [Roll Forward]
Contingencies accrual, beginning balance	620
Increase	92
Provision used	(4)
Provision released not used	0
Currency translation adjustments	(12)
Contingencies accrual, ending balance	696
Contingencies accrual, of which current	696
Other provisions
Loss Contingency Accrual [Roll Forward]
Contingencies accrual, beginning balance	5,765
Increase	13
Provision used	(211)
Provision released not used	(42)
Currency translation adjustments	(201)
Contingencies accrual, ending balance	5,324
Contingencies accrual, of which current	$ 5,324

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Breakdown of Revenue and Non-Current Assets by Geographical Areas - Other Information (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Revenues from External Customers and Long-Lived Assets [Line Items]
Non-current assets	$ 261,666	$ 281,047
Americas
Revenues from External Customers and Long-Lived Assets [Line Items]
Non-current assets	94,642	104,389
United States
Revenues from External Customers and Long-Lived Assets [Line Items]
Non-current assets	94,412	100,107
EMEA
Revenues from External Customers and Long-Lived Assets [Line Items]
Non-current assets	18,158	20,336
Asia-Pacific
Revenues from External Customers and Long-Lived Assets [Line Items]
Non-current assets	21,159	19,701
Japan
Revenues from External Customers and Long-Lived Assets [Line Items]
Non-current assets	11,844	9,617
Singapore
Revenues from External Customers and Long-Lived Assets [Line Items]
Non-current assets	5,374	5,970
Holding
Revenues from External Customers and Long-Lived Assets [Line Items]
Non-current assets	$ 127,707	$ 136,621

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Revenue

3 Months Ended

Mar. 31, 2020

Revenue from Contract with Customer [Abstract]

Revenue

Revenue

Revenue Recognition

We sell personalized display advertisements featuring product-level recommendations either directly to clients or to advertising agencies. Historically, the Criteo model has focused solely on converting our clients' website visitors into customers, enabling us to charge our clients only when users engage with an ad we deliver, usually by clicking on it. More recently, we have expanded our solutions to address a broader range of marketing goals for our clients.

We offer two families of solutions to our commerce and brand clients:

•Criteo Marketing Solutions allow commerce companies to address multiple marketing goals by engaging their consumers with personalized ads across the web, mobile and offline store environments.

•Criteo Retail Media solutions allow retailers to generate advertising revenues from consumer brands, and/or to drive sales for themselves, by monetizing their data and audiences through personalized ads, either on their own digital property or on the open Internet, that address multiple marketing goals.

In conjunction with broadening our solutions, we have also started expanding our pricing models to now include a combination of cost-per-install and cost-per-impression for selected new solutions, in addition to cost-per-click.

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

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

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

We act as principal in our arrangements because (i) we control the advertising inventory (spaces on websites) before it is transferred to our clients; (ii) we bear sole responsibility for fulfillment of the advertising promise and inventory risks and (iii) we have full discretion in establishing prices. Therefore, based on these factors, we report revenue earned and the related costs incurred on a gross basis.

Disaggregation of revenue

The following tables disclose our consolidated revenue for each geographical area for each of the reported periods. Revenue by geographical area is based on the location of advertisers’ campaigns.

The following table presents our revenues disaggregated by geographical area:

	Americas		EMEA		Asia-Pacific		Total
For the three months ended	(in thousands)
March 31, 2019	$	217,993	$	209,643	$	130,487	$	558,123
March 31, 2020	$	191,745	$	190,114	$	121,517	$	503,376

Excluding our historical solution for driving Conversion through Criteo Marketing Solutions (formerly called Criteo Dynamic Retargeting), no individual solution accounted for more than 10% of total consolidated revenue for the periods presented.

Customer Credit Notes

We offer credit notes to certain customers as a form of incentive, which are accounted for as variable consideration. We estimate these amounts based on the expected amount to be provided to customers and they are recognized as a reduction of revenue. We believe that there will not be significant changes to our estimates of variable consideration.

Deferred Revenues

We record deferred revenues when cash payments are received or due in advance of our performance. Our payment terms vary depending on the service or the type of customer. For certain customers, we require payment before the services are delivered.

Practical Expedients  

We do not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed.

We generally expense sales commissions when incurred because the amortization period would have been one year or less. These costs are recorded within sales and operating expenses.

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Other Current Assets

3 Months Ended

Mar. 31, 2020

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Other Current Assets

Other Current Assets

The following table shows the breakdown in other current assets net book value for the presented periods:

	December 31, 2019		March 31, 2020
	(in thousands)
Prepayments to suppliers	$	5,109	$	4,668
Other debtors	4,225		3,822
Prepaid expenses	7,891		11,237
Derivative instruments	—		105
Gross book value at end of period	17,225		19,832
Net book value at end of period	$	17,225	$	19,832

Prepaid expenses mainly consist of office rental advance payments.

Derivative financial instruments include foreign currency swaps or forward purchases or sales contracts used to manage our exposure to the risk of exchange rate fluctuations. These instruments are considered level 2 financial instruments as they are measured using valuation techniques based on observable market data.

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Other Current Assets (Tables)

3 Months Ended

Mar. 31, 2020

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Schedule of other current assets net book value

The following table shows the breakdown in other current assets net book value for the presented periods:

	December 31, 2019		March 31, 2020
	(in thousands)
Prepayments to suppliers	$	5,109	$	4,668
Other debtors	4,225		3,822
Prepaid expenses	7,891		11,237
Derivative instruments	—		105
Gross book value at end of period	17,225		19,832
Net book value at end of period	$	17,225	$	19,832

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CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (UNAUDITED) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Current assets:
Cash and cash equivalents	$ 436,506	$ 418,763
Trade receivables, net of allowances of $16.1 million and $23.1 million at December 31, 2019 and March 31, 2020, respectively	364,440	481,732
Income taxes	23,101	21,817
Other taxes	65,293	60,924
Other current assets	19,832	17,225
Total current assets	909,172	1,000,461
Property, plant and equipment, net	181,848	194,161
Intangible assets, net	79,818	86,886
Goodwill	315,266	317,100
Right of use assets - operating lease	139,954	142,044
Non-current financial assets	20,373	21,747
Deferred tax assets	29,458	27,985
Total non-current assets	766,717	789,923
Total assets	1,675,889	1,790,384
Current liabilities:
Trade payables	300,315	390,277
Contingencies	6,020	6,385
Income taxes	3,013	3,422
Financial liabilities - current portion	2,303	3,636
Operating lease liabilities - current portion	47,288	45,853
Other taxes	49,159	50,099
Employee - related payables	73,251	74,781
Other current liabilities	35,709	35,886
Total current liabilities	517,058	610,339
Deferred tax liabilities	7,922	9,272
Retirement benefit obligation	7,111	8,485
Financial liabilities - non-current portion	555	769
Operating lease liabilities - non-current portion	113,920	117,988
Other non-current liabilities	2,715	5,543
Total non-current liabilities	132,223	142,057
Total liabilities	649,281	752,396
Commitments and contingencies
Shareholders' equity:
Common shares, €0.025 par value, 66,197,181 and 66,202,881 shares authorized, issued and outstanding at December 31, 2019 and March 31, 2020, respectively.	2,158	2,158
Treasury stock, 3,903,673 and 4,533,650 shares at cost as of December 31, 2019 and March 31, 2020, respectively.	(79,834)	(74,900)
Additional paid-in capital	676,510	668,389
Accumulated other comprehensive (loss)	(54,283)	(40,105)
Retained earnings	450,480	451,725
Equity-attributable to shareholders of Criteo S.A.	995,031	1,007,267
Non-controlling interests	31,577	30,721
Total equity	1,026,608	1,037,988
Total equity and liabilities	$ 1,675,889	$ 1,790,384

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Revenue (Tables)

3 Months Ended

Mar. 31, 2020

Revenue from Contract with Customer [Abstract]

Disaggregation of Revenue

The following table presents our revenues disaggregated by geographical area:

	Americas		EMEA		Asia-Pacific		Total
For the three months ended	(in thousands)
March 31, 2019	$	217,993	$	209,643	$	130,487	$	558,123
March 31, 2020	$	191,745	$	190,114	$	121,517	$	503,376

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CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (UNAUDITED) - USD ($) $ in Thousands		Total	Share capital	Treasury Stock	Additional paid-in capital	Accumulated Other Comprehensive Income (Loss)	Retained Earnings	Equity - attributable to shareholders of Criteo S.A.	Non controlling interest
Beginning balance (in shares) at Dec. 31, 2018			67,708,203	(3,459,119)
Beginning balance at Dec. 31, 2018		$ 967,891	$ 2,201	$ (79,159)	$ 663,281	$ (30,522)	$ 387,869	$ 943,670	$ 24,221
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income		21,401					19,120	19,120	2,281
Other comprehensive income (loss)		(11,545)				(11,347)		(11,347)	(198)
Issuance of ordinary shares (in shares)			28,596
Stock Issued During Period, Value, New Issues		373	$ 1		372			373
Change in treasury stocks (in shares)			(1,594,288)	1,786,715
Change in treasury stocks			$ (45)	$ 40,080	(36,091)		(3,944)
Share-Based Compensation		13,522			13,533			13,533	(11)
Other changes in equity		154			(1)		155	154
Ending Balance (in shares) at Mar. 31, 2019			66,142,511	(1,672,404)
Ending Balance at Mar. 31, 2019		$ 991,796	$ 2,157	$ (39,079)	641,094	(41,869)	403,200	965,503	26,293
Beginning balance (in shares) at Dec. 31, 2019		66,197,181	66,197,181	(3,903,673)
Beginning balance at Dec. 31, 2019		$ 1,037,988	$ 2,158	$ (74,900)	668,389	(40,105)	451,725	1,007,267	30,721
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income		16,428					15,459	15,459	969
Other comprehensive income (loss)		(14,198)				(14,178)		(14,178)	(20)
Issuance of ordinary shares (in shares)			5,700
Stock Issued During Period, Value, New Issues		39			39			39
Change in treasury stocks (in shares)				(629,977)
Change in treasury stocks		(18,239)		$ (4,934)			(13,305)	(18,239)
Share-Based Compensation		8,131			8,082			8,082	49
Other changes in equity	[1]	$ (3,541)					(3,399)	(3,399)	(142)
Ending Balance (in shares) at Mar. 31, 2020		66,202,881	66,202,881	(4,533,650)
Ending Balance at Mar. 31, 2020		$ 1,026,608	$ 2,158	$ (79,834)	$ 676,510	$ (54,283)	$ 450,480	$ 995,031	$ 31,577

[1] From January 1, 2020, we adopted ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost issued by the Financial Accounting Standards Board (FASB).

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Earnings Per Share (Tables)

3 Months Ended

Mar. 31, 2020

Earnings Per Share [Abstract]

Schedule of basic earnings per share

	Three Months Ended
	March 31, 2019		March 31, 2020
Net income attributable to shareholders of Criteo S.A.	$	19,120	$	15,459
Weighted average number of shares outstanding	64,336,777		61,691,001
Basic earnings per share	$	0.30	$	0.25

Schedule of diluted earnings per share

For each period presented, a contract to issue a certain number of shares (i.e. share option, non-employee warrant ("BSA"), restricted share unit ("RSU") or employee warrant ("BSPCE") is assessed as potentially dilutive if it is “in the money” (i.e., the exercise or settlement price is lower than the average market price).

	Three Months Ended
	March 31, 2019		March 31, 2020
Net income attributable to shareholders of Criteo S.A.	$	19,120	$	15,459
Weighted average number of shares outstanding of Criteo S.A.	64,336,777		61,691,001
Dilutive effect of :
Restricted share awards ("RSUs")	1,317,350		264,309
Share options and BSPCE	336,647		153,786
Share warrants	50,522		16,486
Weighted average number of shares outstanding used to determine diluted earnings per share	66,041,296		62,125,582
Diluted earnings per share	$	0.29	$	0.25

Schedule of weighted average number of anti-dilutive securities

The weighted average number of securities that were anti-dilutive for diluted EPS for the periods presented but which could potentially dilute EPS in the future are as follows:

	Three Months Ended
	March 31, 2019	March 31, 2020
Restricted share awards	482,152	2,241,223
Share options and BSPCE	65,500	—
Weighted average number of anti-dilutive securities excluded from diluted earnings per share	547,652	2,241,223

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Trade Receivables (Tables)

3 Months Ended

Mar. 31, 2020

Receivables [Abstract]

Schedules of trade receivables net book value and Changes in allowance for doubtful accounts

The following table shows the breakdown in trade receivables net book value for the presented periods:

	December 31, 2019		March 31, 2020
	(in thousands)
Trade accounts receivables	$	497,800	$	387,524
(Less) Allowance for credit losses	(16,068)		(23,084)
Net book value at end of period	$	481,732	$	364,440

Changes in allowance for credit accounts are summarized below:

	2019		2020
	(in thousands)
Balance at January 1	$	(25,918)	$	(16,068)
Allowance for credit losses through retained earnings (*)	—		(3,498)
Allowance for credit losses	(5,282)		(6,997)
Reversal of provision	5,931		2,989
Currency translation adjustment	100		490
Balance at March 31	$	(25,169)	$	(23,084)

(*) From January 1, 2020, we adopted ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost issued by the Financial Accounting Standards Board (FASB). ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss model which requires the use of forward-looking information to calculate credit loss estimates. This results in earlier recognition of credit losses. We adopted ASU 2016-13 effective January 1, 2020 with the cumulative effect of adoption recorded as an adjustment to retained earnings (note 1).

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Subsequent Events

3 Months Ended

Mar. 31, 2020

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

Given the ongoing impact that the COVID-19 pandemic is having on the Company's clients' business, it will remain a factor in our analysis of estimates residing in the financial statements, including, but not limited to, estimates related to receivable reserves calculated under the CECL model, the impairment analysis, and the income tax calculation. These estimates involve projections and assumptions regarding the future economic environment and as such it is possible that events may occur rapidly or unexpectedly that could lead to their changes. We will continue to closely monitor the COVID-19 pandemic, and continuously evaluate its impact on our key estimates.

On April 29, 2020, the Company announced that the Board of Directors has authorized a share repurchase program of up to $30 million of the Company’s outstanding American Depositary Shares.

On April 29, 2020, the Company decided to preventively draw under its Multicurrency Revolving Facility Agreement for general purposes for a total amount of €140 million ($150 million).

The Company evaluated all other subsequent events that occurred after March 31, 2020 through the date of issuance of the unaudited condensed consolidated financial statements and determined there are no other significant events that require adjustments.

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Earnings Per Share

3 Months Ended

Mar. 31, 2020

Earnings Per Share [Abstract]

Earnings Per Share

Earnings Per Share

Basic Earnings Per Share

We calculate basic earnings per share by dividing the net income for the period attributable to shareholders of the Parent by the weighted average number of shares outstanding.

	Three Months Ended
	March 31, 2019		March 31, 2020
Net income attributable to shareholders of Criteo S.A.	$	19,120	$	15,459
Weighted average number of shares outstanding	64,336,777		61,691,001
Basic earnings per share	$	0.30	$	0.25

Diluted Earnings Per Share

We calculate diluted earnings per share by dividing the net income attributable to shareholders of the Parent by the weighted average number of shares outstanding plus any potentially dilutive shares not yet issued from share-based compensation plans (see Note 10). There were no other potentially dilutive instruments outstanding as of March 31, 2019 and March 31, 2020. Consequently, all potential dilutive effects from shares are considered.

For each period presented, a contract to issue a certain number of shares (i.e. share option, non-employee warrant ("BSA"), restricted share unit ("RSU") or employee warrant ("BSPCE") is assessed as potentially dilutive if it is “in the money” (i.e., the exercise or settlement price is lower than the average market price).

	Three Months Ended
	March 31, 2019		March 31, 2020
Net income attributable to shareholders of Criteo S.A.	$	19,120	$	15,459
Weighted average number of shares outstanding of Criteo S.A.	64,336,777		61,691,001
Dilutive effect of :
Restricted share awards ("RSUs")	1,317,350		264,309
Share options and BSPCE	336,647		153,786
Share warrants	50,522		16,486
Weighted average number of shares outstanding used to determine diluted earnings per share	66,041,296		62,125,582
Diluted earnings per share	$	0.29	$	0.25

The weighted average number of securities that were anti-dilutive for diluted EPS for the periods presented but which could potentially dilute EPS in the future are as follows:

	Three Months Ended
	March 31, 2019	March 31, 2020
Restricted share awards	482,152	2,241,223
Share options and BSPCE	65,500	—
Weighted average number of anti-dilutive securities excluded from diluted earnings per share	547,652	2,241,223

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Breakdown of Revenue and Non-Current Assets by Geographical Areas (Tables)

3 Months Ended

Mar. 31, 2020

Segment Reporting [Abstract]

Schedule of consolidated revenue for each geographical area

The following tables disclose our consolidated revenue for each geographical area for each of the reported periods. Revenue by geographical area is based on the location of advertisers’ campaigns.

	Americas		EMEA		Asia-Pacific		Total
For the three months ended:	(in thousands)
March 31, 2019	$	217,993	$	209,643	$	130,487	$	558,123
March 31, 2020	$	191,745	$	190,114	$	121,517	$	503,376

Schedule of revenue generated in other significant countries

Revenue generated in other significant countries where we operate is presented in the following table:

	Three Months Ended
	March 31, 2019		March 31, 2020
	(in thousands)
Americas
United States	$	195,791	$	173,027
EMEA
Germany	$	53,595	$	50,618
United Kingdom	$	21,768	$	20,820
Asia-Pacific
Japan	$	93,168	$	84,637

Schedule of non-current assets by geographical area and country

For each reported period, non-current assets (corresponding to the net book value of tangible and intangible assets, excluding right of use assets related to lease agreements) are presented in the table below. The geographical information results from the locations of legal entities.

					Of which						Of which
	Holding		Americas		United States		EMEA		Asia-Pacific		Japan		Singapore		Total
(in thousands)
December 31, 2019	$	136,621	$	104,389	$	100,107	$	20,336	$	19,701	$	9,617	$	5,970	$	281,047
March 31, 2020	$	127,707	$	94,642	$	94,412	$	18,158	$	21,159	$	11,844	$	5,374	$	261,666

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Significant Events and Transactions of the Period - Schedule of Restructuring Costs (Details) - New Organization Structure $ in Thousands	3 Months Ended
	Mar. 31, 2020 USD ($)
Restructuring Cost and Reserve [Line Items]
Total restructuring costs	$ (772)
Payroll related costs
Restructuring Cost and Reserve [Line Items]
Total restructuring costs	$ (772)

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Financial Instruments - Cash and Cash Equivalents (Details) - Fair Value, Inputs, Level 2 - Fair value - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	$ 436,506	$ 418,763
Cash equivalents
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	169,569	189,119
Cash on hand
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	$ 266,937	$ 229,644

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Income Taxes (Details) - USD ($) $ in Thousands		3 Months Ended
	Sep. 27, 2017	Mar. 31, 2020	Mar. 31, 2019
Income Tax Examination [Line Items]
Current income tax		$ (9,718)	$ (15,934)
Net change in deferred taxes		2,678	5,916
Provision for income taxes		$ (7,040)	$ (10,018)
Estimated tax rate		30.00%	30.00%
Effective tax rate		30.00%	32.00%
Internal Revenue Service (IRS)
Income Tax Examination [Line Items]
Estimate of possible loss	$ 15,000

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Share-Based Compensation - Breakdown of the Closing Balance (Details) - € / shares	3 Months Ended
	Mar. 31, 2020	Dec. 31, 2019
OSA/BSPCE
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number outstanding, options (in shares)	2,442,305	2,559,534
Weighted-average exercise price, options (in Euro per share)	€ 23.01
Number vested, options (in shares)	1,815,222
Weighted-average exercise price, options (in Euro per share)	€ 24.40
Weighted-average remaining contractual life of options outstanding	5 years 9 months 18 days
RSU
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number outstanding (in shares)	4,189,423	4,978,987
BSAs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number outstanding, options (in shares)	351,025	363,767
Weighted-average exercise price, options (in Euro per share)	€ 14.82
Number vested, options (in shares)	154,576
Weighted-average exercise price, options (in Euro per share)	€ 17.42
Weighted-average remaining contractual life of options outstanding	7 years 4 months 24 days