Good morning. Welcome to Criteo First Quarter 2020 Earnings Call. All participants will be in listen-only mode. Please note this event is being recorded. I would now like to turn the conference over to Edouard Lassalle, Vice President of Head of Investor and Analyst Relations. Please go ahead.

Thank you, Kate. Good morning everyone, and welcome to Criteo's Q1, 2020 earnings call. We hope you all are safe and healthy wherever you are. With us today are CEO, Megan Clarken; and CFO, Benoit Fouilland. Please note that because of lockdown restrictions, we're all joining this call from different locations today and as a result may face some technical challenges. In the course of our call, management will make certain forward-looking statements. These forward-looking statements reflect clear judgment and analysis only as of today. And actual results may differ materially from current expectations based on a number of factors affecting Criteo. Importantly, at this time, the global COVID-19 pandemic is having a significant impact on the global economy and the business of our clients as well as on Criteo's business, and may further impact Criteo's financial condition, results of operations and cash flows. There are significant uncertainties about the duration and extent of the pandemic's impact. The dynamic nature of the circumstances may impact what we said on this call today and could materially change at any time. For more information, please refer to the risk factors discussed in our earnings release as well as the most recent Form 10-K filed with the SEC. We do not undertake any obligations to update any forward-looking statements discussed today, except as required by law. In addition, during this call, we’ll also discuss non-GAAP measures of our performance. Definitions of such metrics and the reconciliations to the most directly comparable GAAP financial measures are included in the earnings release published on our website earlier today. Finally, unless otherwise stated, all growth comparisons made during this call are against the same period in the prior year. With that, it's my pleasure to now introduce and hand it over to Megan.

Thank you, Edouard, and good morning, everybody. It's a pleasure to be with you all for our second call together. I'm joining you from the safety of my home in Upstate New York, and I hope everyone is staying safe as well. On our call today, I'll cover four key topics. Firstly, how we're adapting to the circumstances of the COVID-19 outbreak. Secondly, our current assumptions for the business implications of COVID-19 for the rest of 2020. Third, our progress on our four strategic pillars which I outlined in our last call. Fourth, the latest developments on our online identification plans in particular around Chrome. And fifth, our strategic and operational priorities for the rest of the year. Let me start by saying that in my first full quarter as CEO, I've been confronted with a very different set of challenges from the ones that I expected when I joined. Still, we tackle the challenges as they come. I'm very proud of our team's agility. I'd like to thank each and every Criteo employee for their outstanding contributions throughout the early stages of the crisis and to this day. As I indicated during our last earnings call, I'm a firm believer in transparent communication and an open dialogue with all stakeholders. It's therefore my intention to be as clear and helpful as possible today and provide you with the visibility you need on our business during these unusually fluid and challenging times. To my first point, we adapted early and quickly to the circumstances of the COVID outbreak. The safety of our employees has been our immediate and number one priority. We closed all of our offices around the globe before local authorities required us to do so. Our policy is safety first, always. At the same time, we focused on business continuity to ensure all of our operations and R&D functions remained 100% up and running, and our associates had all the resources they needed. We quickly put in place a plan for supporting our clients, securing our data centers, and maintaining our internal processes. I'm pleased to say that today we're operating very smoothly, thanks to tight communications and seamless alignment within and across teams. We're also supporting our clients more than ever during these times. For example, we're providing COVID-related weekly updates about shopping trends across categories and regions. We're assisting clients in trying to identify new revenue opportunities and helping them adjust their messages and align with the new paradigm. We're working with them to leverage the significant rise in online users to capture new audiences and build customer loyalty for their businesses. We launched several social contribution campaigns to help all those on the front lines of assisting people around the world. For example, our technology enables the APHP foundation in Paris to raise funds in order to improve the working conditions of medical teams and fund research on COVID-19 treatments. We're also running Pro Bono Campaigns for the Ad Council, a non-profit organization promoting the work of various non-profit NGOs and U.S. government agencies. Internally, we immediately applied financial rigor and took incremental measures to control our cost base. I'll talk to that in greater detail in a few minutes. We intend to continue to manage our business in this way during this time: People and safety, operations and clients, cost control and social responsibility. This gets me to my second topic. As early as April 1, we communicated our updated Q1 guidance to the market and exceeded our initial adjusted EBITDA target, and Benoit will talk more about this in a few minutes. So for now, let me talk about the potential implications of COVID-19 for Q2 and the rest of 2020. Whilst acknowledging that there are still many moving pieces and we continue to learn more every day, I want to establish that our current forecasting framework is based on the best knowledge we had as of today, April 29. We started feeling the COVID-19 impact from mid-February. Different verticals have been impacted differently. Traditionally, our business mix is about 70% Retail, 10% Travel, 10% Classified, and the remaining 10% a collection of verticals including auto, finance, and gaming. Spending in the travel vertical increased by around 95% compared to pre-COVID-19 levels, while spending in classifieds decreased by 40% or more. Retail, by far our biggest vertical, has held up well with spend reductions in our core solutions limited to about 10%. The impact also varied by client segment as mid-market clients sustained their spend in more resilient ways than large clients. We saw a healthy 5% increase in our mid-market client base. We also saw different developments in our various geographies related to factors like the timing of the outbreak, the restrictions on social life, and the industry mix. Finally, pure online clients have seen less impact than those with a more traditional brick-and-mortar model challenged by the temporary closures of their stores. These indicators, along with other factors, have helped shape our modeling for the remainder of the year. Looking forward, in short, we see a slow recovery out of the crisis with no full return to pre-COVID-19 levels by the end of the year. We've built various scenarios based on a framework with two critical dimensions: number one, the timing of the trough by business vertical and geography; and number two, the pace of recovery by vertical and geography. Within these scenarios, we've benchmarked our assumptions against our own data, third-party data, and against what we learned from our clients about the short and midterm effects on their businesses. I'll focus now on the projected assumptions that form our mid-case scenario. On the first dimension, the timing of the trough, we assume that our retail client spend has reached its low point in EMEA and APAC but will deepen further in the U.S. until the end of June. In Travel, we assume that it has already reached a low point and will plateau until early July. For Classifieds, we model a further deepening in the U.S. and APAC, namely Japan, followed by a plateau until the end of June. On the second dimension, the pace of recovery, we assume that Retail will gradually recover in EMEA over the second half of 2020, aided by government support measures, but will remain weak in the U.S. into Q4. For Travel, we've modeled a much slower recovery leading to a still material impact by the end of the year. For Classifieds, we see a gradual recovery over the second half. I acknowledge these assumptions carry a lot of uncertainty. There are still many things we don't know today and things are rapidly changing. As a result, we will intend to update you as we progress throughout the year. Taking all these considerations into account, and as of today, we believe our business in Q2 will decline by 32% to 35% year-over-year on a revenue ex-TAC basis. From this level, we may see a progressive recovery during the second part of the year. This obviously assumes there isn't another significant wave of COVID-19 outbreak during or after the projected recovery or any unexpected material economic disruption of any kind. In response to the consequences of COVID-19 on our business, we took immediate and meaningful incremental measures to further contain costs. We implemented a strict hiring freeze until further notice. We stopped business travel, cut marketing spend events, third-party services, and further optimized hosting costs. These reductions came in addition to the savings already included in our 2020 guidance provided last February. We intend to further implement cost control measures to right-size our business during this time while maintaining our investment in our product strategy. Now, let's take a look at how we deliver against our strategic pillars, which remain in focus. Our core business remains resilient and shows positive signs. Our retargeting business with large clients has been softer so far, especially in the travel and classified verticals and is a function of large clients temporarily reducing spend or pausing campaigns rather than stopping work with us. However, we see the Retail vertical holding up much better than other verticals as e-commerce grows due to the crisis. Our mid-market remains resilient in the current circumstances, particularly in Retail, and continues to grow in Q1, driven mostly by new clients. Second, we continue to expand our product portfolio. We're excited about the growth and resilience of our new products. Our app install has performed well since the outbreak, growing over 90% in Q1, especially with nontraditional clients. This was close to 45% better than expected. Our app install solutions drive customer acquisitions by having new users install our clients' mobile apps on their devices. As most global consumers are locked down within the confines of their homes and look for entertainment, information, or simply want to communicate on their phones, we believe demand for app installs may remain high throughout the various innings of the crisis. Another positive is that apps are cookieless by design and therefore immune to all cookie restrictions. Retail Media grew strongly across the board, accelerating to 41% in Q1. As brands benefit from increased consumer use of e-commerce for a broad range of product categories such as webcams, shaving and grooming gear, loungewear, and exercise equipment in Q1, we created a business partnership with Unilever, which adds tremendous value for Unilever brands from both the data, insights, and resources perspective. We also expanded our business with Carrefour with a huge increase in traffic to their sites in reaction to the COVID outbreak; our teams enabled Carrefour to effectively address their brand advertisers' requests while preserving a great customer experience. At a time when e-commerce has become the new normal for consumers, Retail Media proves not only resilient but countercyclical, particularly in the grocery space. For this reason, we believe we offer even higher strategic value to brands and retailers when an online presence becomes critical for brick-and-mortar retailers beyond Amazon. Looking forward, we expect demand for retail media to continue to flourish, and we're excited to launch our new unified Retail Media platform expected late in Q2. This platform will combine our various Retail Media offerings and provide retailers and brands with self-service transparency and control over their full funnel ad campaigns using sponsored products and other rich ad formats. Third, we made good progress with our strategic game changes. As I explained in our Q4 call, we're exploring what we call strategic game changes to accelerate the execution of our strategy. This aims at strengthening our core business and expanding our portfolio with new solutions, especially around best-in-class full stack DSP. In Q1, we added new partners for audience creation and brand safety such as LeadsBridge and Oracle Data Cloud. We expect these partnerships will strengthen our consideration solutions. I'm excited about our strategic relationship with Nielsen, announced last week. That will allow us to integrate with their digital ad ratings and digital brand effect measurement solutions. We believe offering independent measurement from a global leader like Nielsen will enable our clients to understand the brand lift benefits and the performance of their performance campaigns, as well as measure the demographics of consumers they reach across platforms as we evolve into a full funnel ad tech platform and align our technology to a broader array of marketing objectives and insights, including CTV. This integration will provide more transparency, flexibility, and performance for brand advertisers. In April, we hired David Fox, our Chief Development Officer, joining from Stellar Labs, whose focus will be on further strengthening our offering through more strategic partnerships. I want to emphasize that in executing our strategy, we prioritized the use of our cash primarily for building and partnering, and we'll remain extremely thoughtful about any potential new M&A going forward. Lastly, we continue to drive tech and operations excellence across the board. In mid-Q1, I improved the efficiency of our operations by changing the organizational structure. In the current context, we've paused the hiring of most of our new C-suite; instead, our leaders are doubling down. Our search for a new CFO in light of Benoit's previously announced departure at the end of June is still underway. As I mentioned earlier, we took immediate and meaningful measures to further contain costs. Beyond containing our fixed and variable costs, we continue to drive tech excellence and assigned our top employees to the areas and projects that are key to our roadmap, such as online identification. That's a good segue to my fourth point, the latest developments in our work to mitigate the risks around Chrome. As you've heard me say before, we're strong believers in user personalized advertising and its benefits for all participants in the ecosystem, starting with consumers, publishers, and advertisers. In line with our convictions, we've made further progress to move beyond browser control and redefine how consumers can liberate themselves to see personalized, meaningful ads. In doing this, we continue to leverage our direct integration with advertisers and publishers and use their first-party data as a means to create identity solutions for our clients. This first-party data continues to feed our ID graph, increasing both its size and resilience and providing a massive source of identity data. Our graph continues to grow to well over 2 billion users and now aggregates persistent identifiers like hashed emails or logins of well over 96% of these users. We're also investing in ways to build and support a user ID network around cookieless identifiers for advertising, independent of browsers that allow users to manage their consent and preferences. All of this creates a powerful ID spine to help our clients to get the right message to the right person at the right time. With our commitment to supporting consumer choice while protecting their privacy, we're also actively participating in the World Wide Web Consortium with respect to Chrome's initiatives around cohort-based advertising. Simultaneously, we'll continue to maintain a constructive dialogue with Google about the consequences of the changes being considered in Chrome, as well as potential opportunities to partner. Lastly, I want to touch on our priorities for the rest of the year. While things are fast-changing around us, we remain proactive, disciplined, and engaged in our strategic and operating priorities. First and foremost, we stay focused on protecting the safety of our people and guaranteeing the best business continuity for our clients and partners. Secondly, we'll continue to support our clients throughout the crisis and aim to help them maximize opportunities during the recovery phase. Third, we're hyper-focused on managing our cost base and prioritizing our use of cash. Fourth, we'll look to further our industry lead in shaping the future of personalized advertising. Last but not least, we remain dedicated to executing against the product strategy while staying nimble as the landscape unfolds. This includes leveraging our core strengths and direct response marketing and our best-in-class Performance Solutions to help our clients best rebound from these unusual times by driving sales for them. As we head into what's likely a tough recession for the global economy going forward, we believe marketers will increasingly look for valuable high-return investments that drive sales. A number of industry experts or analysts, including Ratko Vidakovic at AdProfs, believe that top-of-funnel budgets like brand awareness are more likely to be cut compared to direct response, and suggest marketers will prioritize the safer, more measurable, and more accountable channels that are typically direct response. A recent survey from Advertiser Perceptions shows that 65% of advertisers say they'll focus more on performance marketing in the COVID-19 context. For this reason, we think our core strength in direct response marketing, as well as our strong client relationships, will prove to be competitive advantages in helping our customers best recover from these challenging times. With that, I'll now hand it over to Benoit to cover our Q1 performance, cost control and liquidity, and our financial outlook.

Yes. Thank you, Megan, and good morning, everyone from Brittany in France. Let's start with our Q1 performance. I'll then focus on our cost containment program, our liquidity position, and close with our guidance for Q2, providing details about how we think about the outlook for the remainder of 2020. Q1 was a solid quarter amidst a challenging environment. Revenue was $503 million. Revenue ex-TAC, our key metric to monitor the business, declined 11% at constant currency to $206 million or $207 million using the Foreign Exchange assumption for our updated guidance provided on April 1. COVID-19 impacted revenue ex-TAC by about $10 million or more than four points of year-over-year growth, as some clients decided to temporarily pause or reduce their campaign results. About 80% of the COVID impact was with large clients as spending in the mid-market remained resilient. The travel vertical, which was deeply affected by COVID-19, contributed to 40% of the impact, and the remaining 60% was evenly spread between Retail, Classified, and other verticals. Currency changes in Q1 contributed to a $4 million headwind compared to Q1 last year and provided a $1 million headwind compared to our guidance assumptions. Q1 revenue ex-TAC margin was 41%, in line with the prior quarter and our expectations. Looking at some of our operating highlights, our new solutions grew 49% to 13% of our total business, increasing four points compared to Q1 last year, and now represent close to 20% of our business in the Americas. The solid growth of Retail Media was a significant driver of this performance. We launched our commerce audiences and similar audiences solutions for the web globally. With this solution, advertisers are now able to search and create audiences in self-service based on product categories, price ranges, brands, customer gender, and purchasing power. Our omnichannel business grew over 120% as more clients onboarded offline transaction data to reach their customers online. Our retargeting product declined 16%, particularly with large customers; about five points of this decline were most of the $10 million impact related to COVID-19. We added over 110 net new clients in Q1 and ended March with close to 20,400 clients. This is a 5% year-over-year increase while maintaining high retention at close to 90% for all solutions. COVID-19 had a significant impact on our same client revenue ex-TAC, which declined 9% at constant currency, of which five points were driven by COVID-19. We launched Criteo Partners, our global partnership program dedicated to helping our channel partners to get the training, certification, marketing support, and rewards they need to effectively sell our core product to our small mid-market addressable clients. From a supply standpoint, more than 4,600 direct publishers are now connected to one of our Criteo Direct Bidders on the web and app. This means that we now connect to about 40% of all publishers we work with via Direct Bidder. Further, we started to benefit from preferred deals with a large number of publishers running on Google ADX, allowing select advertisers to buy at a negotiated fixed CPM and increasing privileged access for Criteo on our clients. Turning now to our regional performance. Revenue ex-TAC in the Americas declined 16% at constant currency. This was driven by a $3 million COVID impact, particularly with large customers and in the broader classifieds vertical. This came in addition to a soft start in January due to clients slowing down their budgets after very high spend levels during the Q4 2019 peak season. At this stage, we expect the COVID impact to worsen in Q2 in the Americas. EMEA revenue ex-TAC declined 9% at constant currency, driven by a $5 million impact from COVID and the fact that it's the region most impacted by the weakness in Travel. Under these circumstances, our performance in the broader market across the region as well as our German and Eastern European businesses remained solid and resilient. Our new business was also healthy across EMEA with new client gains like Roman Originals and Uniqlo. In APAC, revenue ex-TAC decreased 7% at constant currency after a $2 million COVID impact mostly in the Travel and Retail verticals, with our Southeast Asian market most affected. Our Japanese business was less impacted than other countries, and Korea continued to grow double-digits despite the early COVID outbreak. Shifting to expenses, other costs of revenue were up 30% driven primarily by the opening of a new data center in Japan, by $2 million in digital taxes in France, Italy, and Turkey, as well as a lower sale of fixed assets. Non-GAAP other costs of revenue grew 24%. Operating expenses declined 16% on both a GAAP and a non-GAAP basis. We spent about $7 million less than planned in Q1 on a non-GAAP basis, mostly thanks to lower personnel costs driven by lower headcount, lower sales commissions, and lower stock price impact on our social charges, despite also higher provisions for collection risk and client receivables. Overall, our non-GAAP expense base reduced by $20 million year-over-year in Q1. We've prioritized effectively adapting our cost base and intend to significantly increase our focus on cost control, productivity, and efficiency gains. Headcount-related expenses represented 73% of GAAP OpEx, down one point. We ended Q1 with 2,700 employees, which was 4% or about 110 employees fewer than a year ago, including 64 employees related to the closure of our Palo Alto R&D center in the quarter. As Megan indicated, we do not plan to hire until further notice and have asked all of our teams to be very strict and only backfill certain critical roles on an exception basis. Looking at our non-GAAP expenses now by function, R&D OpEx declined 27%, driven by an 11% decline in headcount to 630 R&D and product engineers after the closure of our Palo Alto R&D center, as well as an increase in research tax credits and lower facility expenses. Non-GAAP R&D expenses declined 280 basis points to less than 14% of Revenue ex-TAC. Sales and operation OpEx decreased by 8%, driven by lower sales commissions, a 1% decrease in headcount to about 1,600 employees, lower marketing costs, and lower facility expenses, slightly offset by an increase in bad debt. Our quota-carrying sales and account strategists increased by a few compared to Q4 to just over 710. Non-GAAP sales and operation expenses increased by 170 basis points to 37% of Revenue ex-TAC. And G&A expenses declined 23%, driven by a 5% lower headcount to about 490 employees, lower facility expenses as a result of the rightsizing of our offices, lower contractor fees, and lower expenses for global communications. Non-GAAP G&A expenses were below 11% of Revenue ex-TAC, down about 150 basis points. Adjusted EBITDA reached $59 million, or $60 million at the guidance rate, and stood $2 million above our original guidance for Q1. This drove our adjusted EBITDA margin to 29% of Revenue ex-TAC, in line with Q1 last year, highlighting our increased focus on cost control in light of the COVID turbulence. Depreciation and amortization increased $5 billion as a result of Q4 CapEx last year and the accelerated depreciation of the Manage acquired technology. Equity awards compensation expense decreased 39%, driven by the lower average stock price. Financial expense was non-material. Our effective tax rate was 30%, thanks to the positive effect of the French patent box regime. Net income was $16 million, down 23%, and adjusted diluted EPS was only down 13%. Cash flow from operations declined 16% to $57 million, due to a slightly higher DSO, which drove a negative change in working capital year-over-year, reflecting the early impact of COVID-19 on client payment terms. CapEx declined 50% and was $10 million below expectations, thanks to optimized server usage. Our free cash flow came out solid, increasing 3% or $1 million to $45 million, thanks to our resilient cash collection and reduced CapEx and cash taxes, despite a $4 million cash restructuring charge. Our free cash flow conversion rate was strong at 76% of adjusted EBITDA. Finally, cash and cash equivalents stood at $437 million as of March 31st, after spending $18 million on shares repurchased in Q1. We completed our second share buyback program in February. We purchased 4.5 million shares under this program for a total cash amount of $77 million at an average price of about $17 per share. Let me now go over our cost containment program, our credit risk management, and our financial liquidity position. As Megan indicated, we are hyper-focused on managing our cost base while protecting both our profitability and our cash. Since the COVID-19 outbreak, we planned to spend approximately $77 million less on non-GAAP expenses in 2020 than the prior year, which represents about $46 million in incremental savings compared to our 2020 guidance provided in February. While about two-thirds of these incremental projected savings are employee-related and largely driven by our strict hiring freeze until further notice, we've also planned significant savings in business travel, marketing spend, events, third-party services, and hosting costs. We have asked all of our teams to enforce our new expense restriction with rigor and discipline. We've also planned significant CapEx reductions by more than 10% of our original envelope for 2020. After these cuts, we anticipate our CapEx for 2020 to represent about 3% of gross revenue. We've significantly increased our attention and focus on cash collection and credit risk management. As of March 31, our DSO was up three days compared to March 31, 2019, to 62 days. Our commercial and finance teams follow strict guidelines to manage our collection risk. Besides our focus on collecting cash in a timely and disciplined way, we've immediately tightened our credit management. For example, by systemizing the automatic pausing for all mid-market campaigns reaching a certain budget gap. From a financial liquidity perspective, we have a comfortable net cash position of $434 million as of the end of March, including $437 million of cash on the balance sheet and only $3 million in financial liabilities. In addition, we have immediate access to a €350 million revolving credit facility, which combined with our cash position provides a total liquidity of about $820 million, equating to close to 18 months of expense run rate based on our projected non-GAAP expense base for 2020. Overall, we believe 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. I'll now provide our guidance for the second quarter 2020. The following forward-looking statements reflect our expectations as of today, April 29, 2020. Before diving into our assumptions, I want to acknowledge that while Criteo has weathered several storms before, including the severe 2008-2009 financial crisis, when we started operating commercially, the COVID-19 crisis is truly unique in nature and therefore calls for a lot of humility in trying to assess its full economic and business consequences. With regard to Q2 specifically, this is traditionally our lowest quarter of the year in terms of seasonality for both top-line and profitability. As Megan indicated earlier, this is assumed to be the low point quarter in our mid-case COVID-19 scenario. Going into Q2, we've seen our April performance decline by about 25% year-over-year on a global Revenue ex-TAC basis. Through April, we've seen APAC trend a bit better, while EMEA was still significantly impacted by lockdowns and reaching a plateau in retail. The Americas continued to see a growing impact compared to Q1. For May and June, as of the date of this call, we currently assume that the business impact of COVID-19 will get slightly worse, particularly in the U.S. Overall, we estimate that the COVID-19 impact on our Revenue ex-TAC for the entire second quarter could range from $60 million to $65 million. On the expense side, we plan to cut our non-GAAP cost in Q2 by over $27 million compared with Q2 last year, which means incremental savings of approximately $15 million on top of our original plan. Taking all of this into consideration, and as of April 29, we expect Revenue ex-TAC for Q2 to be between $140 million and $147 million on a reported basis, translating into a year-over-year decline of 32% to 35% at constant currency. Due to the significant depreciation of many currencies, there is a headwind to reported growth of about 230 basis points or about $5 million. On the profitability side, we expect the significant COVID-19 impact on our top line to translate into an adjusted EBITDA for Q2 in the range of $0 million to $7 million. As usual, the Foreign Exchange assumption supporting our guidance can be found in our earnings release. Regarding our business outlook for the year, we withdrew our guidance for the fiscal year 2020 on April 1st. Given how fluid the situation is and the many unknowns at this point, we believe we are currently not yet in a position to reliably quantify the COVID-19 impact on our financial results beyond the second quarter 2020. We will, therefore, not provide guidance for Revenue ex-TAC or adjusted EBITDA for fiscal year 2020 until further notice. However, I'm happy to share some of our current assumptions for the second half of 2020. As of the date of this call, we are currently modeling a progressive recovery in the second half of the year with a high 20s percentage decline in Q3 and a high-teens percentage decline in Q4 on a Revenue ex-TAC basis. This reflects a slightly larger COVID-19 impact for the entire second half than what we currently expect for Q2 alone. This is our best view as of today and assumes a progressive recovery for non-travel clients and a much longer and slower recovery pace for travel. Again, I want to establish that, given there is still a lot we don't know, the breadth in the variability of potential outcomes of our current projection is quite meaningful and highly dependent on various assumptions, particularly the recovery pace by vertical. On the expense side, we anticipate spending approximately $30 million less in non-GAAP expenses in the second half compared to the prior year period, or an incremental $24 million in savings on top of what was already reflected in the guidance provided on February 11, 2020. Most of these savings are headcount related. We intend to closely monitor our expense base and will look for further expense reduction opportunities to protect our adjusted EBITDA and maximize our ability to generate free cash flow in 2020 and beyond. Lastly, regarding capital allocation, our Board has authorized a new buyback program of up to $30 million to meet our equity obligation to employees, while taking advantage of the very low price of our stock. We intend to use all of the shares to be repurchased under this new program in connection with employee equity grants on vesting in order to limit future dilution for our shareholders. In fact, as set forth in our proxy filed yesterday in connection with our employee equity request to shareholders, we are committing to not incur any additional dilution with respect to our employee equity program between the June 2020 AGM and the date of our 2021 AGM. Let me now close with a few personal words about my departure from Criteo at the end of June. It was a heartbreaking moment for me to decide to leave because I have so much passion for Criteo. Yet after eight years on a full cycle, from scaling the company by more than 10x from where it was when I joined to taking the company public, now adapting the company model to a different growth profile, I think it's time for me to move to a new challenge. Together with Megan, I'll ensure that we identify a great successor and manage the transition smoothly. It's been a wonderful ride for the past eight years. Criteo is an amazing company with truly unique assets and incredible talent. And with Megan at the helm, Criteo is in very good hands.

Thank you very much for that, Benoit. I really appreciate it. Before wishing Benoit all the best in his future endeavors, I want to thank him for the extremely valuable business partnership he's provided to the executive team and myself since we started working together. I also want to emphasize that we're focused on hiring the right successor and we'll proactively manage the CFO transition with Benoit and his strong leadership team in the interim. In closing, we delivered a strong performance in Q1 amidst the unprecedented business context. Our Retail clients held up well. Our mid-market business is healthy and resilient. Our Retail Media solutions proved counter-cyclical in helping brands and retailers leverage the rise in e-commerce. The entire company is all hands on deck to successfully navigate these uncertain times while helping marketers best rebound through best-in-class direct response marketing. We have unique assets and a robust financial position to come out strong, healthy, and robust. We continue to expand our portfolio and leverage Criteo's core strengths to best position us for the future. And with that, we'd now like to open the floor for questions. Thank you.

The entire company is fully focused on successfully navigating these uncertain times while assisting marketers in effectively rebounding through top-tier direct response marketing. We possess unique assets and a strong financial position that will enable us to emerge in a healthy and resilient manner. We are continuing to expand our portfolio and utilize Criteo's core strengths to optimally position ourselves for the future. Now, we welcome any questions. Thank you.

Kate, this is Edouard speaking. Given the length of the prepared remarks, we'll likely push the call to nine minutes and slightly by 10 minutes.

That is fine. Our first question is from Nick Jones from Citi. Go ahead.

Hi, thank you for taking my questions. Just one follow-up on the comments about growth in the mid-market new solutions. I guess, first, what are you hearing from your mid-market clients? A lot of the headlines are indicating that small and medium-sized businesses are feeling a lot of the pressure under COVID, so I guess, what are you seeing as you go into Q2 in the mid-market, and then what are your clients' appetites for new solutions going into Q2 after having a solid Q1 on the new solutions segment? Thanks.

Let me start with this one, and Benoit, if you want to weigh in, feel free. Certainly, our mid-market clients; we're seeing that's a healthy segment for us. I think it's because for our mid-market clients, it's slightly more geared toward Retail, and ecommerce and Retail are actually performing better than most, as much as you can in these circumstances. What we see from them is opportunity. We are looking globally at the ability to expand our services to a wider range of mid-market clients. Today, we're sort of around what we would call the torso, if you like. So we want to take that out to the smaller players as well. Let me keep reminding you that circling around Retail, it's 70% of our business. So in this environment, it is actually performing pretty strongly for us. We're listening very closely to them looking for ways in which we can assist them, and one of the things that we have launched is the Criteo Partners program, a reseller program, which Benoit might have spoken to briefly before, where we can have resellers take our targeting services up to even smaller clients and educate them on how to utilize targeting themselves. We provide training and everything that goes with that. It's a good time for ecommerce; it's a good time for performance-based marketing; and it's a really good time for mid-market retailers. So, it’s a bit of a shining light for us.

Yes. What I would just maybe add is also our mid-market clients; Retail clients are more pure ecommerce players than our large Retail clients, who also have large brick-and-mortar operations. While the large retailers with brick-and-mortar operations have been suffering more, we see that the smaller retailers, pure eCommerce have been benefiting from increased traffic on ecommerce on the one hand. The second aspect I would highlight is that mid-market clients enjoyed also a greater and cheaper access to media supply in the current environment and that has also contributed to their performance. We see the beginning of Q2 as mid-market continuing to be strong and resilient.

Our next question is from Lloyd Walmsley from Deutsche Bank. Go ahead.

Hey, this is Craig speaking for Lloyd. I'm just trying to get my arms around the Q2 guidance a little bit better. Is there any way you can tell us at what rate the business exited the second half of March, and how does that compare to the April growth rate? Why exactly are we assuming it necessarily gets worse in May and June? And then just on the travel point, I think you mentioned, it's down 95% and you expect it to rebound slowly throughout the year, but can you give us a sense of maybe where that percentage is now and try to understand the cadence of the rebound throughout the year? Thanks.

Yes, maybe Megan if you want to take that one. So, if we look at the trends that we've been observing obviously quite dynamically and we continue to observe on a daily basis, what we've seen is April trended globally around 25% year-on-year, with some stabilization in EMEA and APAC, but at the same time, we anticipate that we've not reached the bottom yet in the U.S. I think if you look at how we believe the rest of Q2 will emerge, we believe that the U.S. is going to continue to deteriorate and will reach its lowest point towards the very end of Q2. That is the primary set of assumptions we took behind our Q2 guidance. With respect to the evolution for the rest of the year, I provided details as to the various assumptions we made overall for the remainder of the year. We assume that we would still be in decline in the mid-20s for Q3 and in Q4 getting a slow recovery towards the mid-teens, with variance between verticals, where we would see a more rapid recovery in retail while we expect that classifieds and travel would take longer to recover.

Our next question is from Dan Salmon from BMO Capital. Go ahead.

All right. Good morning, everyone. Thanks for taking the question. I had two, I guess one for Megan and one for Benoit and somewhat related. Megan, my question for you is that I would imagine prior to interviewing and considering this position and certainly once you became fully engaged with it, you have likely been thinking about some big longer-term plans; you've shared some thoughts on your game-changers already. What my high-level question is, is in light of the pandemic, how would you characterize how much you need to reel in versus say plow ahead on some of those initiatives? I'm sure that's something that you and JB have been discussing at a high level about how to approach the repositioning of the company in a time like this, and I'd love to hear just your high-level comments on the balance between those. And then Benoit, from your position as the CFO, you gave us a lot of detail on revenue and expense management. I guess what my question is, it's a bit broad one for you as well. When we look at the guidance for flat to slightly up EBITDA, how much do you see your ability to essentially manage free cash flow and protect whatever continued investment, Megan was looking for in the company during a very trying time? I hope that makes sense. Thank you.

Thank you, Dan. It always makes sense. Hope you're staying well. Let me jump in here. So walking into this role was one thing; looking at it through fresh eyes in a COVID environment is definitely something else. It's prudent for my job to make sure that we're hitting the right direction. We went down a pretty clear path of moving into full-stack DSP, which is what our clients have been wanting from us and what we think has been missing in the market, and we continue to focus on that as our path forward. If you step back a little and think about the new norm and how advertisers are investing, it gives you a chance to just reflect on the assets we have and the behaviors that we see. I think this opens up questions to me around the strength of our retargeting business. I happen to think it's going to be stronger coming out of this, especially the notion of performance-based marketing, large clients having to drain stock from shelves and going more promotional, the changes in the TV environment. All of these things point towards doubling down on making sure our retargeting business is everything it should be to service both large clients and mid-market clients. What that actually looks like needs more focus, but it still aligns with the investments that we're making. The thing that's really exciting to me is long-term. So what does the world look like when we come out of this? There are areas that I think we should focus more on, which we haven't perhaps thought of in terms of our strategy around personalization. I am pushing a lot on this Chrome and third-party cookie stuff to one side and doing it completely differently. Do we have the assets and strength and market relationships to do that, yes. What about performance? As I just said, performance marketing, doubling down on that. Do we have the asset strength and market relationships to do that? Yes. eCommerce, enabling eCommerce through Retail Media and others, do we have the assets? So all of these things I think it's time to just look at them and say, well, this is going to be different. We have powerful assets. We have the ability to grab market share in areas that are right for it when we come through into the new norm. Will it change the strategy? Not likely. It will probably just change the speed in which we focus on different parts of that strategy. We assess every single day, but right now, we have a new lens to look through, and make no mistake, that’s exactly what we're doing. It's a good question. Thanks, Dan.

So Dan, just to follow up on the way we manage with a longer-term view of free cash flow on expenses. As you've seen, we've been taking immediate and sizable measures to protect our profitability and our cash flow. With this crisis, it requires us to further accelerate and double down on our operational excellence, so that not only do we protect our profitability and our cash flow generation, but we ensure that the company is best positioned as we will go out of this crisis to allocate our resources on the strategic game-changers, whether organically through partnership and emerge as a stronger company after the crisis having doubled down on our focus on operational excellence and cost control.

If I can just sneak in one follow-up. Google recently announced some changes to their Google Shopping platform, and Megan you mentioned the new Retail Media product that you expect later this quarter. How do you see that competitive environment changing for a new important key product and part of that game-changing plan for you?

Yeah, I think one of the underlying ideals of Criteo, what we fight for is the open Internet and enabling retailers, brands, and anyone around eCommerce and shopping to utilize platforms off of the big walled gardens. I say that with respect to the walled gardens, but there's going to be something else as well. Competition is our friend. Competition will enable us to really understand what it takes to service those that don't necessarily want to use shopping platforms that the walled gardens have. It is a positive sign for us. There's positive reinforcement for our investment in that area. We're clearly going after the right things.

Our next question is from Tim Nollen from Macquarie. Go ahead.

Hi, thanks very much. Two things as well from me, please. One, interesting to see the strong growth in the new products, such as the app install business, and that makes sense. My question is, how willing are clients to engage in these newer things? It's somewhat experimental for them, and this is not necessarily a time for experimenting. So I'm just curious if you could speak a little about where that can go and how willing clients are to be engaged in these new things, app install and Retail Media and so forth? My second question is for Megan as well, coming from Nielsen and seeing this interesting announcement about the partnership with Nielsen on Digital Ad Ratings. I wonder if you could explain a bit more about what that does for you, and how does that help Criteo's business going forward? Thanks.

Yeah, good questions. Thanks, Tim. In terms of new things, marketers have new problems, so it's less about discretionary spending and more about how to get the right message out to the right person at the right time. App install is a perfect example, whereby there is a channel for brand owners and advertisers to connect with consumers directly on their phones, who are spending more time on their devices now than ever. So it makes a ton of sense for them to move toward the tools that will assist them in this environment, rather than just being something experimental. That trend applies to Retail Media as well. How do I utilize a network to create a shopping environment? That's a response to a need. We're proud to provide those tools, and will continue to communicate with clients to identify new opportunities for us. On the Nielsen side, well, I'm very keen on this one. Nielsen is our currency provider and third-party independent measurement provider, which is important for us to ensure that our clients have transparency over what we provide them beyond performance. It lets them know they got to the right person and that what we've done is providing value. Our solutions allow clients to understand brand lift and the performance of their campaigns, as well as measure the demographics of consumers across platforms. This is vital for clients to assess their total reach comparing our digital work with their traditional campaigns.

Our next question is from Andrew Boone from JMP Securities. Go ahead.

Hi, thanks for taking my question. On mid-market and new clients, are there any trends to the client adds that you're seeing? Is this brick-and-mortar companies finally coming online, or is it more new business formation? And then how sustainable is that as you think about these trends in the second half of 2020? Secondly, on publishers, does COVID make a more direct relationship more attractive, and how does that change how you guys think about cookies going forward? Thanks.

I’ll take that unless you want to address the first one, Benoit; I can do that. Your question was about the trends we're seeing in new clients around mid-market. There is a real push toward eCommerce. As I mentioned, our mid-market clients are heavily involved in retail and eCommerce. We're seeing a reaction to the environment; brick-and-mortar is struggling, so they need to move into eCommerce fast. More mid-market clients are realizing that brick-and-mortar is unhelpful and need to increase their eCommerce profile, which leads to more engagement with our performance-based advertising services. It's not just a sign of these times, but a reflection of the new role that eCommerce will have going forward. Unless you believe there will be a complete return to pre-COVID levels, eCommerce presence is likely to continue to be important. I think there's real sustainability to this trend, and we're encouraged by the shift of mid-market clients toward performance-based advertising. Your second question about publishers: I do think we are seeing more publishers come on board, which is healthy. Our relationships across both the buy-side and sell-side are strengthening. If there is a Silver lining to the COVID situation, it's that publishers are beginning to recognize the need for a direct, trustworthy relationship with their audiences to link advertisers. It's a very healthy sign for the industry, and we can expect more of that in the future.

Thank you, Megan. Thank you, Benoit. This now concludes our call for today. The IR team is available for any additional questions or follow-ups you may need. So, I'd like to thank everyone for attending the call. Wish you a good end of the day and hope you all stay safe and healthy. Thank you.

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