Q2 2026 Criteo SA Earnings Call Transcript
Key Points
- OpenAI partnership is exceeding expectations, with over 2,000 brands running campaigns, more than double the number announced in April, and traffic from ChatGPT converting at 1.5-2 times the rate of traditional referral traffic.
- Criteo GO self-service platform is gaining traction, with more than half of small clients globally adopting it, and account creation in June was approximately 3 times higher than initial months post-launch.
- Retail Media underlying business grew 20% year-over-year excluding the impact of two retailer scope reductions, with strong adoption of auction-based display and new retailer partnerships across regions.
- New business revenue in the US grew 24% year-over-year in Q2, and the qualified pipeline has grown approximately 30% year-over-year, indicating improved commercial execution.
- The company maintains a strong balance sheet with no long-term debt, generated $180 million in trailing 12-month free cash flow, and continues to return capital to shareholders through buybacks.
- Agentic AI initiatives, including conversational ad formats and sponsored recommendations in retailer AI assistants, are showing early promise with first launches like Albertsons and a travel client in Europe.
- Q2 results missed expectations, with contribution ex-TAC down 12% at constant currency, primarily due to reduced spending from several large enterprise Performance Media clients.
- The company revised its full-year 2026 outlook downward, now expecting contribution ex-TAC to decline 10-12% at constant currency, assuming no recovery in spending from large enterprise clients.
- Performance Media revenue declined 10% at constant currency, with softness in commerce growth and continued weakness in discretionary retail categories like fashion, which was down 21%.
- The company faces ongoing headwinds from client-specific issues, including travel impacted by the Middle East conflict, tariff changes, and clients shifting budgets to other tactics.
- Retail Media revenue was negatively impacted by a $21 million headwind from previously communicated client scope reductions, and the company expects a mid-to-high teens decline in contribution ex-TAC for the segment in 2026.
- The company's outlook does not assume meaningful contributions from OpenAI or agentic AI initiatives until 2027, indicating near-term growth challenges.
Good morning and welcome to Criteo's second-quarter 2026 earnings call. (Operator Instructions) Please note that this event is being recorded.
I would now like to turn the conference over to Melanie Dambre, Senior Vice President, Investor Relations and Corporate Communications. Please go ahead.
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Good morning, everyone, and welcome to Criteo's second-quarter 2026 earnings call. Joining us on the call today, Chief Executive Officer, Michael Komasinski; and Chief Financial Officer, Sarah Glickman, are going to share some prepared remarks. Joining us for the Q&A session is Todd Parsons in his role as Chief Product Officer.
As usual, you will find our investor presentation on our Investor Relations website now, as well as our prepared remarks and transcripts after the call. Before we get started, I would like to remind you that our remarks will include forward-looking statements, which reflect Criteo's judgments,
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