Criteo's Q1 2025 Earnings Call: Unpacking Contradictions in Retail Media Growth and Client Dynamics
Earnings DecryptFriday, May 2, 2025 7:30 pm ET
2min read
Retail media growth and client impact, CVR and gross margin expectations, client transitions and financial impact, impact of retail media client reduction, retail media strategy and impact of client decisions are the key contradictions discussed in Criteo's latest 2025Q1 earnings call.
Revenue Growth and Performance Media Segment:
- Criteo reported contribution ex-TAC of $264 million for Q1 2025, with a 7% year-over-year growth at constant currency.
- The growth was driven by the Performance Media segment, particularly in aspects like Commerce Audiences and the Commerce Grid SSP.
- The company's strong AI-powered audience modeling technology and the integration of third-party demand via the Commerce Grid SSP contributed significantly to this growth.
Retail Media Expansion:
- Retail Media revenue reached $59 million, with a 18% year-over-year growth at constant currency.
- This expansion was fueled by new retailer partnerships, including transitions from Microsoft Advertising and increased agency demand.
- The growth was also supported by new formats like onsite video, which expanded inventory and enhanced the shopping experience.
Retail Media Challenges and Client Changes:
- Criteo faced a notable challenge with its largest Retail Media client, who will discontinue managed services and curtail brand demand services by November 2025.
- This change will result in a significant impact on Retail Media growth in the next fiscal year, but the company anticipates leveraging its technology across the client base for long-term growth.
- The company remains focused on scaling its Retail Media platform and is optimistic about its underlying growth potential, excluding the specific client's impacts.
Impact of Macroeconomic Conditions:
- Criteo experienced a soft macro environment in April, affecting overall spending trends.
- Specifically, there were lower budgets in discretionary categories like fashion and beauty, while travel showed strong growth.
- The company's diversified client base and ability to adapt to market conditions allow for resilience amidst macroeconomic uncertainties.
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Revenue Growth and Performance Media Segment:
- Criteo reported contribution ex-TAC of $264 million for Q1 2025, with a 7% year-over-year growth at constant currency.
- The growth was driven by the Performance Media segment, particularly in aspects like Commerce Audiences and the Commerce Grid SSP.
- The company's strong AI-powered audience modeling technology and the integration of third-party demand via the Commerce Grid SSP contributed significantly to this growth.
Retail Media Expansion:
- Retail Media revenue reached $59 million, with a 18% year-over-year growth at constant currency.
- This expansion was fueled by new retailer partnerships, including transitions from Microsoft Advertising and increased agency demand.
- The growth was also supported by new formats like onsite video, which expanded inventory and enhanced the shopping experience.
Retail Media Challenges and Client Changes:
- Criteo faced a notable challenge with its largest Retail Media client, who will discontinue managed services and curtail brand demand services by November 2025.
- This change will result in a significant impact on Retail Media growth in the next fiscal year, but the company anticipates leveraging its technology across the client base for long-term growth.
- The company remains focused on scaling its Retail Media platform and is optimistic about its underlying growth potential, excluding the specific client's impacts.
Impact of Macroeconomic Conditions:
- Criteo experienced a soft macro environment in April, affecting overall spending trends.
- Specifically, there were lower budgets in discretionary categories like fashion and beauty, while travel showed strong growth.
- The company's diversified client base and ability to adapt to market conditions allow for resilience amidst macroeconomic uncertainties.
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