Criteo's Retail Media Slump Hides Agentic AI Bets

Date of Call: Feb 11, 2026

Financials Results

• Revenue: $1.9B for FY 2025, $541M for Q4 2025
• EPS: $4.62 adjusted diluted EPS for FY 2025, $1.30 adjusted diluted EPS for Q4 2025
• Operating Margin: 35% adjusted EBITDA margin for FY 2025, 32-34% anticipated for FY 2026

Guidance:

• Contribution ex-TAC for FY 2026 expected flat to +2% at constant currency, with underlying growth ex-headwinds expected high single digits.
• Q1 2026 Contribution ex-TAC expected $245M-$250M, down 9-11% at constant currency.
• Retail Media Contribution ex-TAC expected decline mid-to-high teens at constant currency for FY 2026, with underlying growth ex-2 clients expected 16-20%.
• Performance Media Contribution ex-TAC expected mid-single digit growth at constant currency for FY 2026.
• Adjusted EBITDA margin anticipated 32-34% for FY 2026.
• CapEx expected ~$190M for FY 2026.
• Free cash flow conversion rate expected ~40% of adjusted EBITDA.
• Redomiciliation to Luxembourg expected Q3 2026, with further redomiciliation to US planned Q1 2027.

Business Commentary:

Revenue and Contribution ex-TAC Growth:

• Criteo S.A. reported revenue of $1.9 billion for 2025, with Contribution ex-TAC growing 3.5% at constant currency to $1.2 billion.
• The growth was driven by strong margins and cash flow generation, with particular strength in Performance Media, which saw Contribution ex-TAC increase by 4% in constant currency.

Retail Media Performance:

• Retail Media revenue was $264 million, with Contribution ex-TAC up 2% year-over-year at constant currency.
• Growth was supported by auction-based display and new retailer wins, despite headwinds from scope changes at two clients.

Agentic Commerce Initiatives:

• Criteo is prioritizing agentic commerce, with early testing showing an average uplift of 60% in product purchase prioritization.
• The company is developing a recommendation service for LLM platforms and testing new conversational shopping experiences to capitalize on this trend.

Performance Media and GO Expansion:

• Performance Media revenue was $1.7 billion, with a focus on scaling AI-powered automation through the GO tool set.
• Adoption of GO is increasing, with 37% of campaigns including social activation, leading to higher ROAS and lower churn.

Financial Outlook and Investments:

• For 2026, Criteo expects Contribution ex-TAC to be flat to up 2% at constant currency, reflecting investments in agentic AI and AI innovation.
• The company anticipates low growth due to Retail Media client scope reductions but sees potential for sequential improvement and margin expansion.

Sentiment Analysis:

Overall Tone: Positive

• Management expressed conviction in strategy and the path ahead, citing 'record results in 2025 with strong margins and robust cash flow generation', 'solid execution', 'strong momentum', and confidence in 'durable growth and long-term shareholder value'. They noted 'strong progress against our strategy' and being 'well positioned' for future opportunities.

Q&A:

• Question from Thomas White (D.A. Davidson & Co.): Could you talk about the prospects for the AI recommendation service and how realistic it is to influence LLMs' search results? Also, is the department store weakness related to Saks Global bankruptcy, and can you quantify exposure?
  Response: CEO: Agentic commerce partnerships are broadening; hypothesis is LLMs need commerce data for high-quality recommendations. Revenue model is early but aims to embed deeply in the ecosystem. CFO: Department stores down 13% and fashion down 12% in Q4, with headwinds continuing into 2026.

• Question from Mark Kelley (Stifel, Nicolaus & Company): How should we expect underlying Retail Media growth to progress through the year? Also, can you walk through the incremental opportunity from the self-serve Commerce GO! offering?
  Response: CEO: Retail Media growth drivers include scaling new products, winning new retailers, and rolling out Commerce Max features. CFO: Growth impact from client scope reductions is front-loaded, with Q1 most impacted. CEO/CFO: GO transitions from managed to self-serve, emphasizing cross-channel optimization, especially for SMBs, with larger clients also adopting for performance.

• Question from Justin Patterson (KeyBanc Capital Markets): How are retailers adopting internal LLM agentic tools, and what stage are they in? Also, what experience does Criteo have with hyper-localized AI ads and how does it influence conversion?
  Response: CEO: Retailers are early in adopting agentic tools but are investing to maintain control over discovery; several pilots underway with various AI-powered surfaces. CPO: AI is used for localization, personalization, and auto-generated creative (e.g., image-to-video), driving higher performance in self-serve GO.

• Question from Alex Lavigne (The Benchmark Company): Can you quantify the implied decremental adjusted EBITDA margin impact for Retail Media and the investment profile for agentic AI? Also, what level of contribution is implied for off-site within guidance?
  Response: CFO: EBITDA guidance includes ~170 bps upside from normal growth offset by ~260 bps investment in agentic AI and productivity. Retail off-site is not specifically broken out; it's early innings but gaining traction with two paths via CMAX and SSP.

• Question from Timothy Nolan (SSR): What is the pricing model for new AI initiatives with retailers and potential revenue from native AI companies?
  Response: CEO: For retailers, monetization is similar to on-site (take rate). For LLMs, it's early days; potential paths range from API fees to economic participation as their models evolve. CFO: No agentic upside assumed in guidance as monetization is not yet signed.

• Question from Richard Kramer (Arete Research Services): What drove the lower take rates in Q4 for Retail and Performance Media? Also, how much of the 2026 budget is currently committed?
  Response: CFO: Lower take rates in Q4 due to mix shift (more social/CTV, more display) and expected compression from large retailer contract changes. For 2026, strong forecasting exists but full visibility is typical for a recurring revenue base; focus is on early planning cycles with clients.

Contradiction Point 1

Retail Media Growth Outlook and Headwind Phasing

Contradiction on growth trajectory and phasing of client headwinds.

Underlying Retail Media growth progression through 2026: linear or step-up? - Mark Kelley (Stifel, Nicolaus & Company, Incorporated)

2025Q4: Growth is expected to pace throughout 2026. - Sarah Glickman(CFO)

What is the 2026 headwind cadence? - Douglas Anmuth (JPMorgan Chase & Co)

2025Q3: [The $75M headwind from lapping tiered fees for the largest retailer in early 2026 remains, with Q1 being the low point.] - Sarah Glickman(CFO)

Contradiction Point 2

Agentic AI Revenue Opportunity and Timing

Contradiction on whether revenue upside is assumed in 2026 guidance.

What is the pricing model for the new AI initiatives with retailers and LLM partners, and is there a revenue opportunity from native AI companies? - Timothy Nolan (SSR)

2025Q4: No revenue upside is assumed from agentic tools in 2026 guidance as contracts are not yet signed... - Sarah Glickman(CFO)

What is the impact of the Google partnership on the company's performance? - Ygal Arounian (Citigroup Inc.)

2025Q3: [The API is live, with campaign volume expected to flow in Q4 2025, rolling out to other regions in H1 2026. It's a multiyear growth lever starting in 2026.] - Todd Parsons(CPO)

Contradiction Point 3

Retail Media Take Rate Drivers and Causal Factors

Contradiction on the primary driver of take rate compression.

What caused the decline in take rates for Retail and Performance Media in Q4? - Richard Kramer (Arete Research Services LLP)

2025Q4: Retail Media take rate compression relates to a large retailer contract change and increased lower-margin display advertising. - Sarah Glickman(CFO)

How have clients responded to agentic products, and what investments are needed to make CTV a significant multiyear growth opportunity? - Justin Patterson (KeyBanc Capital Markets Inc.)

2025Q3: [Retail Media growth drivers include scaling new products (e.g., auction-based display), winning new retailers...] - Michael Komasinski(CEO)

Contradiction Point 4

Monetization Models for Agentic AI Products

Contradiction on whether AI monetization is defined or still evolving.

What is the pricing model for the new AI initiatives with retailers and LLM partners, and is there a revenue opportunity from native AI companies? - Timothy Nolan (SSR)

2025Q4: For LLMs, monetization is still evolving—could range from API fees to economic participation as models mature. - Michael Komasinski(CEO)

How to approach monetization for Agentic AI products? - Mark Patrick Kelley (Stifel)

2025Q2: Monetization models for Agentic AI are still being determined... Criteo's API calls could be on a CPM or CPC basis. - Michael Komasinski(CEO)

Contradiction Point 5

Retail Media Growth Trajectory and Drivers

Contradiction on the primary growth driver for Retail Media in 2026.

Will underlying Retail Media growth be linear or step-up through 2026? - Mark Kelley (Stifel)

2025Q4: Retail Media growth drivers include scaling new products (e.g., auction-based display), winning new retailers, and rolling out Commerce Max features. - Michael Komasinski(CEO)

What are the primary growth drivers for Retail Media over the next 12 months, and when might standardization become a tailwind? - Mark John Zgutowicz (The Benchmark Company)

2025Q2: The biggest growth driver for 2026 will be developing technology to unlock open RTB for retail supply, which will improve fill rates and normalize demand. - Sarah J. S. Glickman(CFO)