Good morning and welcome to Criteo's First Quarter 2022 Earnings Call. All participants will be in listen-only mode. After the prepared remarks, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to Melanie Dambre, Director Investor Relations. Please go ahead.

Good morning everyone and welcome to Criteo's first quarter 2022 earnings call. Joining us on the call are Chief Executive Officer, Megan Clarken; Chief Product Officer, Todd Parsons; and Chief Financial Officer, Sarah Glickman. As usual, you will see our investor presentation on our IR website now as well as our prepared remarks and transcript of 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, assumptions, and analysis only as of today. Our actual results may differ materially from current expectations based on a number of factors affecting Criteo's business. Except as required by law, we do not undertake any obligation to update any forward-looking statements discussed today. For more information, please refer to the risk factors discussed in our earnings release and on the recent Forms 10-K and 10-Q filed with the SEC. We will also discuss non-GAAP measures of our performance. Definitions and reconciliation to the most directly comparable GAAP metrics are included in our earnings release published today. And unless otherwise stated, all growth horizons made during the quarter are against the same period in the prior year. With that, let me hand it over to Megan.

Thanks, Melanie, and good morning everyone. Thank you all for joining us today. We're off to a solid start this year and we've never been more energized by the opportunity in front of us. Let me jump straight into an update on our proposed acquisition of the IPONWEB business. We reviewed their continuity plans and the progress of relocating their Russian-based engineering resources, and we are encouraged by the steps IPONWEB is taking, experiencing minimal disruption to their business. We're in close discussions with the IPONWEB team to restructure the proposed transaction and look forward to providing more updates. In the meantime, we are collaborating with IPONWEB through our existing commercial arrangements to continue executing on our vision for the Commerce Media Platform. I want to take a moment to emphasize the significant opportunity that commerce media presents, which is currently one of the most promising growth trends in our industry. We are on the brink of the next wave of advertising, which is expected to be substantial, and it revolves around commerce media. Criteo has been discussing commerce media for a while now, as it connects consumers, marketers, and media owners to drive commerce outcomes. It begins with retail media, allowing retailers to create personalized advertising experiences on their own digital assets or content, effectively positioning themselves as media owners. Retailers use their first-party data to enhance these experiences and measure their outcomes. This is proving effective in extending offline shopper marketing to online platforms, creating new high-margin revenue streams for retailers. The opportunity in retail media expands when retailers extend their advertising efforts offsite across the open Internet, seeking further ways to attract targeted consumers beyond their own content. This offsite advertising creates an additional revenue stream for retailers while enhancing brand visibility on digital platforms and attracting commerce audiences. Furthermore, commerce media broadens the concept beyond retail media for non-retail media owners, enabling advertising efforts to reach wide-ranging consumer interactions. It allows advertisers to engage and convert consumers by reaching audiences across various media channels on the open Internet, linking ad spending directly to commerce results. The combination of commerce data and advanced machine learning techniques targeting commerce audiences forms the foundation of effective commerce media strategies. For retailers focused on retail media, Criteo has been the enabling technology for retail media for the past five years. We work with significant retailers like Lowe's, Best Buy, and Target, who are at the forefront of this rapidly evolving space. We are heartened by the value these large retailers see in this new frontier of advertising, as highlighted in their earnings discussions. Commerce media is anticipated to reach a Total Addressable Market of $180 billion to $200 billion over the next four years. The emergence of commerce media stems from the desire to monetize valuable first-party commerce data, which retailers and media owners have struggled to leverage effectively for years. Unlocking this data opens up advertising opportunities within their online stores, bridging offline and online marketing strategies. Criteo's Commerce Media Platform is at the center of this development. An exemplar of this opportunity is our recent partnership with Flipkart, India’s leading e-commerce marketplace. Through our platform, brands will gain access to top-tier advertising solutions offered by Criteo's Commerce Media technology, including offsite capability and Flipkart’s expansive audience reach. The launch of Product Performance Ads will empower advertisers to achieve their full marketing potential on the open Internet by leveraging our technology alongside Flipkart’s audience insights, leading to better campaign efficiency. This partnership is a significant milestone for both of us. Additionally, we've refocused our collaboration with Shopify, enabling merchants of all sizes to utilize our platform to target users across multiple channels and devices, with more developments on the horizon. There are key reasons clients opt for Criteo for their Commerce and Retail Media needs, and why we anticipate continuing to secure their business. Firstly, the uniqueness of our Commerce Media Platform lies in merging onsite and offsite advertising formats. For marketers and retail clients, effectively engaging consumers throughout their shopping journey is crucial. Our aim is to provide a singular tech and data source, ensuring we maintain visibility of the consumer as they interact with content. We believe our Commerce Media Platform will create a consolidated perspective across both the buy and sell sides, fostering consistency and alleviating platform fatigue for our clients. Secondly, managing both demand and supply-side solutions at scale generates powerful network effects benefiting brands, agencies, retailers, publishers, and Criteo. Presently, we collaborate with about 22,000 commerce clients, thousands of publishers, and manage nearly $3 billion in annual media spend across our platform. In Retail Media, we serve over 100 retailers and more than 1,500 brands. We observe increased supply attracting more demand to our platform and the reverse. Thirdly, our 16 years of expertise in commerce-focused AI allows us to tap into a vast commerce dataset derived from around 725 million daily active users and provides unique access to over $1 trillion in e-commerce sales, which differentiates us. Our reach continues to expand, with a 6% increase in daily active users compared to the previous quarter. Specifically, in the US — the largest advertising market — our daily active user reach encompasses over 50% of the population. This substantial reach enhances our ability to connect retailers with potential consumers both onsite and offsite, all while optimizing returns on advertising spend for our clients and unlocking additional revenue. Our tech stack and access to commerce data on the open internet is unmatched. In an environment where operating system signals are diminishing, data reach, scale, and AI become essential. Now, let's address our first-quarter performance. We achieved constant currency growth for the fifth consecutive quarter, demonstrating consistent business momentum. This was fueled by Retail Media growth of nearly 50%, audience targeting growth of over 40%, and some recovery in travel, which mitigated the impact of a slower macro environment and the suspension of our operations in Russia. Our focus remains on growth and execution of results, which Sarah will detail further shortly. We maintain confidence in our Commerce Media Platform strategy, our execution of plans, and our growth trajectory. The media activated through our Commerce Media Platform reflects our expanding scale across the business, increasing by 12% to $645 million this quarter. We are excited to welcome Brian Gleason as our Chief Revenue Officer; he has already begun to make an impact. His primary objective is to maximize our Commerce Media potential and implement our go-to-market strategy for sustainable growth. With his extensive agency experience and client-centered approach, he is well-positioned to lead us during this growth phase. Brian's arrival coincides perfectly with our ongoing agreements with major marketplaces and top-tier retailers like Flipkart and Michaels. Additionally, we’re launching new clients such as Nordstrom and Farfetch on our platform, and further extending our partnership with eBay. Brian's agency expertise bolsters our initiatives in that channel, which has seen over $200 million in activated media spend or about 32% of our overall business in the first quarter, compared to 30% last year. As a preferred Retail Media partner on the open Internet, we provide agencies with incentives and exclusive opportunities within our global Retail Media ecosystem and platform, capturing stronger traction with our agency partnerships. These collaborations enable seamless integrations and higher media spend volumes. Our global partnership with GroupM is progressing rapidly, and we have recently established agreements with Ascential and its leading e-commerce agencies as well as a US deal with another major agency holding company. We anticipate further developments in this area going forward. Our business model has evolved beyond a point solution like most AdTech firms; we are now a Commerce Media platform focusing on Retail Media. Our daily operations center around meeting our clients' needs for acquiring and retaining customers, leveraging our technological strengths to ensure efficiency. The ability to retain customers for our clients does not depend on third-party operating system signals; we will, however, utilize them while available and assist our clients in transitioning away from them by adopting privacy-friendly and reliable signals. It is worth mentioning that these signals have been foundational for internet infrastructure over the last 25 years for measurement, context, and user experience. It is unreasonable to anticipate the world to function as intended without them. We commend the UK’s CMA for their regulatory efforts. In return, we will support our clients in navigating any challenges with our data, AI, extensive reach, and the innovative contributions from our Product and R&D teams. Todd will take you through more details shortly. Lastly, I want to express my gratitude to all our Criteo team members for their hard work and dedication to our clients. We are actively recruiting talent in the growing sectors of our business and are proud to be an employer of choice in our industry. This reflects our values and commitment to prioritize people. Recently, we signed the LEAD Network CEO Pledge to reinforce our dedication to ensuring pay equity globally and promoting career advancement in technology for women. Sustainability is integral to our operations, and we are continuously enhancing our ESG disclosures. We are committed to the United Nations’ Sustainable Development Goals and have adopted the Sustainable Accounting Standards Board reporting framework in our latest Corporate Social Responsibility report. With that, I am pleased to hand it over to Todd.

Thank you, Megan. Good morning, everyone. Let me start with some perspectives on our progress to date. Our priority is and has always been to connect with consumers, marketers, and media owners and to drive commerce outcomes. Over the year, Criteo solutions have grown to span the entire consumer commerce journey, from discovering brands and products for the first time to ensuring the best opportunities for a sale, to making each subsequent visit more profitable, all in privacy-safe ways. The loss of certain sales, starting with Apple's ITP in 2017, turned our efforts to find innovative ways to engage with consumers and diversify our approach away from retargeting, for the benefits of both our clients and consumers, and we've accelerated our innovation over the past two years. I'd like to walk you through some tangible examples of how our Commerce Media Platform strategy is coming to life and how we’re ensuring our clients can acquire and retain quality audiences. First, we are proving that we can help our marketers better engage with consumers at scale, as signals disappear. Our clients tell us that performance advertising is a critical need, and we continue to solve that problem for them. We leveraged the unrivaled combination of our AI and commerce data to create privacy-safe audiences for each step of the consumer commerce journey. As an example, we've run hundreds of live tests for acquisition and retention specifically on iOS over the past few months. I am pleased to say that we successfully helped our marketer clients recover lost traffic and therefore maintain their spending in this environment in these tests. While still early, these are exciting results. We look forward to further scaling our audience targeting to mitigate the impact of third-party signals going away in environments like iOS or Safari today and Chrome and Android in the future, with the added benefit of continuously improving our AI sessions along the way. Second, we are building our commerce media network with industry-leading scale and first-party data. We're continuously looking for innovative ways to solve complex problems. Ultimately, we believe our first-party commerce media network will help marketers and media owners preserve and increase their ability to reach relevant users and launch personalized campaigns, onboarding, enriching and activating first-party data. As you know, we have access to first-party data from about 22,000 marketer clients, and approximately 60% of our daily active users on the web are addressable media owners we have direct access to. This is a key priority for us. We continue to expand direct supplier relationships and add multiple new publishers. With our Commerce Media Platform strategy, we are offering new ways for media owners to get the best monetization and yield out of their media. Our proposed acquisition of IPONWEB would also expand our direct publisher footprint and enhance our potential to operate and activate more first-party data than ever before. Third, we innovate to support new shopping experiences. Shoppable video is a great example of solutions that are at the forefront of our efforts to bring commerce to content, where consumers spend their time discovering our customers' brands and products across the open Internet. Today we're pressing further to bring retail storefronts and other interactive commerce experiences across our network, including experimentation with in-game and live-stream media. This work will continue to expand our customers’ ability to engage audiences in all-commerce friendly environments through our Commerce Media platform. Lastly, we remain invested in any development related to industry-wide initiatives that may improve consumer privacy as it relates to commerce. IAB's seller-defined audiences and Google's Privacy Sandbox are two examples. We will be participating in Google trials of TOPICS and Fledge, which are just about to start. As we did with FLoC beforehand, our approach will be to provide a quantitative view on how these initiatives could meet marketer and media owner objectives while respecting consumer privacy rights. Much more to come here, and we'll update you throughout the year. Now, let me highlight some wins. Starting with Retail Media, the powerful combination of our onsite and offsite advertising capabilities represents a unique value proposition and key differentiator. This is why Flipkart chose Criteo. We are able to extend retail media capabilities offsite to recommend brands to new consumers and maximize spend from these brands. By leveraging their existing integrations for onsite retail media monetization, retailers partnering with Criteo can seamlessly enable brands to target audiences across the open web, as well as measure results at the SKU level. A number of our onsite global consumer brands are increasingly leveraging offsite capabilities to drive higher traffic and, in many cases, also drive higher conversion. They also benefit from a holistic assessment of their marketing strategies and spending. We are only getting started and we are very excited about the tremendous up-selling opportunities coming with offsite. We look forward to showcasing our integrated onsite and offsite self-service campaign management and measurement capabilities when we are at Cannes Lions next month. To best address the needs of our clients, we’re evolving to always-on audience marketing strategies from point solutions, offering access to full-funnel capabilities and commerce audiences through our Commerce Media Platform. In practice, that means that our clients can choose different types of audiences, different types of targeting and engage them across web and app environments to attract, convert and retain customers. With the power of our AI-driven audience modeling, we are enabling our clients to expand their reach and drive successful, measurable commerce outcomes. It is clear that our always-on approach is resonating with our clients who value having one partner to help them engage with consumers across their entire buying journey. It is exciting to see clients who traditionally have come to us for customer retention now adopt customer acquisition solutions, thus increasing their total media spend with Criteo. As an example, one of our CPG customers recently adopted our always-on approach and has since increased its total media spend with us by 44%, with customer acquisition now accounting for 89% of its total spend. Another example is a fashion client that previously didn’t spend any upper funnel budget with Criteo and is now dedicating 67% of its budget to customer acquisition, increasing its overall spend with us by 20%. These are only a few examples that emphasize our ability to deliver valued solutions that unlock new upper-funnel budgets and enable us to operate more data. To date and on average, we’re seeing the spend related to acquisition audiences double and account for about half of the total media spend when clients are switching to always-on strategies. These early results are exciting and, we believe, they will further enhance overall customer lifetime value going forward. I will now turn it over to Sarah, who’ll take you through our Q1 performance and financial outlook.

Thank you, Todd, and good morning, everyone. Starting with our financial highlights for Q1 2022. Revenue was $511 million and Contribution ex-TAC was $217 million. Reported Contribution ex-TAC reflects a year-over-year $10 million unfavorable forex impact. Contribution ex-TAC grew 6% at constant currency, with Retail Media up 48% and Audience Targeting up 42%. As previously communicated, Q1 results were slightly impacted by a slow start for e-commerce in the UK and France, and the suspension of our Russia operations in Q1. The impact from the loss of signals represented $20 million, including iOS, in line with our guidance. We continue to shift our top-line mix with Retail Media and Audience Targeting representing 29% of Contribution ex-TAC in our first quarter, up from 21% a year ago. We benefited from continued upselling and cross-selling with a third of live clients using multiple Criteo solutions. This is a key performance indicator for us as a cornerstone of our Commerce Media play. Client retention remained high at close to 90%. Turning to our business segments, in Retail Media, activated media spend expanded by 58% year-over-year to nearly $165 million. Revenue was $47 million, and Contribution ex-TAC was up 48% to $31 million. Growth was primarily driven by our US customer base, including being the white-label enabler for flagship retailers and strong traction in CPG, our largest and fastest-growing vertical. In our Marketing Solutions segment, we are gaining traction for our “always-on” audience strategies to help our clients attract, convert and retain customers. During the first quarter, our sturdy growth in Audience Targeting more than offset lower Retargeting impacted by Russia and a slower macro, slightly offset by a rebound in travel. We delivered strong profitability, while investing – adjusted EBITDA was $63 million in Q1 2022. Non-GAAP operating expenses increased 15%, including higher personnel costs related to investments in commercial and product talent. Moving down the P&L, Depreciation and Amortization increased 1% in Q1 2022 and share-based compensation expense increased 20%. Our income from operations was $28 million and our net income was $21 million in Q1 2022. Our effective tax rate was 33%. Our weighted average diluted share count was 63.6 million compared to 64.1 million last year. This resulted in diluted EPS of $0.32 and adjusted diluted EPS of $0.53 in Q1 2022. Our strong cash generation and cash position provide ample financial flexibility to execute on our growth strategy. Free Cash Flow grew 9% to $69 million in Q1, reflecting strong working capital management. We remain disciplined, balanced, and shareholder-focused in our capital allocation. We invest in profitable growth through both organic investments and value-enhancing acquisitions. We also continue to deploy our strong balance sheet and return capital to shareholders via our share buyback program, which we resumed in early March 2022. Turning to our financial outlook, which reflects our expectations as of today, May 4. As a reminder, our financial guidance for Q2 and fiscal year 2022 excludes the proposed acquisition of IPONWEB. Like everyone else, we remain cautious about our outlook for the remainder of the year given the uncertain macro backdrop and ongoing geopolitical issues, high inflation, continued lockdowns in Asia, and global supply chain disruptions. For 2022, we have updated our guidance and now anticipate constant currency growth of 8% to 10% in contribution ex-TAC. This relates to the suspension of our Russia operations and lower contribution ex-TAC for Europe due to higher traffic acquisition costs for certain global supplier contracts denominated in USD. Our guidance for retail media is unchanged and we expect activated media spend to grow to over $1 billion and contribution ex-TAC growth to be approximately 50%. We also expect contribution ex-TAC growth of approximately 40% for audience targeting. Our 2022 adjusted EBITDA margin value remains unchanged at approximately 32%. We view 2022 as a ramp-up year and anticipate accelerated growth in 2023. This will be driven by the diligent growth investments we are making to deliver our ambition for the Commerce Media Platform and growth for our agency partners, large enterprise clients, and publishers. Given the weakening of the euro and yen against the US dollar, we now estimate forex changes to lower contribution ex-TAC by $34 million or four percentage points compared to our previous forecast of $20 million. Approximately 30% of our contribution ex-TAC is exposed to the euro. There are no changes to our annual effective tax rate and capital expenditures, and we continue to expect a free cash flow position of about 45% adjusted EBITDA. For Q2 2022, we have a cautious outlook given the macro and impact of Russia suspension. We expect contribution ex-TAC of $220 million to $224 million growing by 4% to 6% constant currency. We achieved a forex impact of $9 million and $20 million for signal loss, primarily from iOS. We expect adjusted EBITDA of $49 million to $53 million, which includes higher expenses related to marketing and accompanied by internal events that would have been scheduled for June. To conclude, we are confident in our Commerce Media Platform to deliver value to our customers and enable growth and resiliency. We have the tech stack and scale to deliver better performance than anyone else on the open Internet. While any transformation of path won't be linear, we are confident in our ability to deliver sustainable growth for many years to come. We are excited about the launches planned for the upcoming quarter and we also plan to host an in-person investor event in the third quarter for you to meet our team, share more on our innovation, and provide a comprehensive midterm growth outlook. The future is wide open for Criteo. And with that, I'll turn it over to the operator to begin the Q&A session.

We will now start the question-and-answer session. Our first question is from Sarah Simon of Berenberg. Please proceed.

Yes. Good afternoon. I've got three questions, please. First one, Sarah, you said earlier that you were trading towards the lower end of the range for Q1, but you actually came in underlying right in the middle. So I'm just wondering if something improved subsequent to you saying that. Second one was just the business that Publicis bought yesterday, Profitero, is that something that you looked at? And I'm just wondering if you think that the combination of that with Criteo’s Ad creates any stiffer competition for you? And then the third thing is, I'm kind of amazed that people haven't made more about Brian's move from GroupM to Criteo. GroupM is obviously ginormous and you are, at least in value terms, rather small. I'm just wondering, what it was that you said to him or what it was he saw that the market can't see? Thanks.

Thanks. I'm going to have Sarah tackle the Q1 question, and I'll take the third one.

Yeah. Thanks, Sarah. When we met at the Morgan Stanley conference in February, there were a few things that happened. Obviously, first and foremost was the suspension of Russia operations. We had also seen lower spend in January and February, like a slow start. What we did experience in March was actually a very strong March. That was good, I think, similar to others. Those are the key reasons. We came in, as you said, in the midpoint. Retail Media overperformed slightly versus the plan, so that was also good news for us as well. And we saw some really happy new business trends that we hope will continue. So it's a mix between Russia, some macro and some really good news on the other side.

I'll take the Publicis-Profitero question, and I'll take the Brian's question as well. So Profitero, look, we have an M&A pipeline that is always active, and of course, like anybody looking for ways to build out our portfolio. We reviewed Profitero internally some years ago. We made a choice there and we acquired Gradient, which is similar in terms of its measurement and analytics capabilities. It's a fantastic asset to add to our Retail Media suite. The team are working quickly. They're very nimble, very agile and responding to our clients' needs on a more customized basis as we see client needs expanding as retail media expands. So in terms of Publicis, I mean, Publicis are building up their retail media play. It is for Publicis. I can't comment on their business, but what I will say is a big, big advantage that Criteo has in that we're independent. We're open to any agency holding company using the commerce media platform. Through that, they get access to hundreds of thousands of retailers, making it pretty much a one-stop shop for buys across all of those retailers as opposed to having to pull together 10 to 15 to 20 different platforms to make those buys. So, we're about trying to make efficiencies for all of the agencies, and that's a significant proposition that we as an independent can offer. On the Brian front, look Brian's been at GroupM for a long time. I spoke to him as we were trying to bring him onboard here. He believes in the vision. So, actually, there are two main things that stood out for Brian. One is he's very ambitious. He enjoyed his team there, and there was no reason for him to work outside of that. But he loves the vision, and he loved it because of what I said before. He could see how it relates to the agency world and the clients that he's spoken to. He could see how he could make a massive difference with the deployment of that vision through his contacts and the work he's done over the years in agencies. He also loves the culture of the team and the passion of the organization. It was a sweet spot for him to come across to and do something new but something he felt very bullish about because he could clearly see the opportunity. He loves the vision. So, it is a significant win for us, and he's hit the ground running. He started before he officially started and in his two weeks here, he's already brought so much to the team. We feel really excited about what he's going to bring for the future of Criteo.

Megan, could you elaborate on your earlier comment about being more than just a point solution? How do you bring marketers and the new group of advertisers represented by retailers together to understand this? Do you think it's necessary to have your own branded clean room solution that safeguards both sides' data and campaigns? Also, Todd, we’ve discussed the impact of Apple on the ad tech industry over the past couple of years. Can you share your thoughts on how the deprecation of Android ID and Chrome might present similar challenges and new issues that are approaching, given that these changes are imminent? Thank you.

Thank you, Richard, for your question. I want to address the distinction between point solutions and platform strategies, focusing on the potential that arises especially with clean room specifics. It's important to highlight that Criteo has historically been seen as a retail targeting business, but it is incorrect to label us solely as a retargeting business. The transformation from our past to our current and future state involves recognizing the opportunities in commerce media and adapting our resources accordingly. This adaptability is key to our platform strategy. Everything we have done until now contributes to this platform approach. Our clients need effective ways to attract and keep consumers, and we excel at this, particularly in consumer retention. Our retail media capabilities and our ability to increase on-site revenue enhance retailers' reach, all stemming from our legacy as part of our platform strategy moving forward. The future of commerce media goes beyond mere advertising; it encompasses promotions and the strategic use of data to keep clients engaged on-site. This effectively modernizes traditional marketing methods in the digital space. Embracing this opportunity marks our evolution into a true platform, providing brands with more possibilities and expanding the retail media landscape for retailers, transforming them into media players. The open Internet is crucial because commerce audiences are appealing to media owners. Our ability to connect advertising to commerce audiences across media platforms puts us in a strong position, supported by our role as the foundational platform for Retail Media and broader commerce media initiatives. We are well-positioned, confirming the direction we are headed.

Sure, thanks, Richard, for the questions. I think they're interrelated. First, regarding clean rooms, it's essential to note that we are very focused on aligning with our clients' directions and have invested in maximizing those investments. There are a few key players in that space, such as InfoSum, Habu, and Snowflake, and we are actively ensuring we can work with their products to enhance our clients' choices. Additionally, we are continuing to invest in private computing to potentially provide complementary support to those partnered products. The goal is not to offer a single solution but to follow our clients' paths and improve their operations and investments. Regarding the iOS question and future developments, it's important to recognize that there is no quick fix. Since 2017, we've emphasized the need for innovation in replacing signals that have been lost due to actions by platforms and operating systems. This work is ongoing. We're currently focused on signal replacement due to iOS and Safari, while also preparing to tackle similar challenges for Android and Chrome. Our development continues across a range of capabilities, all aimed at ensuring the safe operation of our partners' first-party data. Whether it's a retailer starting to use first-party data for better monetization or one we've collaborated with for years, our focus remains on helping clients operate their first-party data effectively for audience acquisition and retention through these platforms. This is an ongoing challenge and a significant area of investment for us.

Great. Thanks very much and good morning everyone. Just a quick one on the guide, I guess I’m curious if that bakes in any incremental Retail Media wins for the full year that you have visibility to, or is that based on the current run rate of folks you already have on the Retail Media side? And then second, when we think about again with the Retail Media business when you get someone like a Walmart Canada, what's the gating factor for Walmart to choose you across the board like across all geographies? Any help there would be great. Thank you.

Yeah. Hi, Mark. So just on the guidance, so first of all, Retail Media is not impacted. We’re still on track there, and we see over 50% growth for the year. It continues to grow fast. We expect to bid dollars in activated media. We have 100 retailers. We have over 1,500 brands. That includes boomerangs and that's continuing to grow. We're also signing deals with large marketplaces, with flagship retailers. So it's all going as we expect, and we're really excited about that growth. What we have in the guidance is the impact is around Russia and the FX impact on European contracts, which hopefully is temporary. Overall, it's all external factors. In terms of Walmart Canada and why it wouldn’t be a more holistic place, we have exclusive deals across global retailers. We have many deals with where we're one of a number of players. We believe we are positioned well in many of those retailers. Some of those, as you know, Walmart has its own built-in solution for the U.S. We do other services for Walmart in the U.S., and we do work primarily with Walmart Canada and other parts of the Walmart platform. We serve them holistically and more globally. It really depends on their strategy for the retailer. We feel very good about our retail media business.

Great. Thanks.

Yes. We clearly observed the impact of our prior spending in Russia. There was a temporary halt to some campaigns and the blocking of new sites, particularly right after the conflict began. Nonetheless, this has not materially affected our overall ad spend. In Q1, Europe was relatively flat for us, and we expect slower growth compared to previous high growth in the region. Like others, we are cautious about the outlook, which informs our future growth expectations. Regarding Retail Media, most of our growth is occurring in the U.S. We have significant clients in Europe whose operations are meeting our expectations and driving substantial growth. We are onboarding new customers, particularly in Europe, and expect those revenues to contribute to Retail Media in the upcoming months.

Thank you. Just had a couple, the $3 billion annual media spend, I was just curious, what trajectory you see that sort of moving to over the next 12 or 24 months? And how important IPONWEB is in that trajectory? And if you could just provide, perhaps a brief update on IPONWEB that would be helpful. And then on Flipkart, just curious, how the economics look there relative to your typical retail media type economics in developed markets like the U.S.? Thanks.

You do the media spend, I'll take IPONWEB. And Todd you take Flipkart.

Sure.

Media spend is a critical performance indicator for us as we focus on meeting our customers' needs. With our new solutions, particularly the Commerce Media Platform and audience targeting, as well as our efforts to increase traffic and attract new customers, we expect continued double-digit growth in our contribution excluding TAC over the next year. We plan to add $1 billion annually in gross media spend as we further develop these solutions. IPONWEB has approximately $1 billion in media spending that we have already discussed. Megan, you can now address the other questions.

Yes, one of the reasons we appreciate IPONWEB is the media spending that goes through their performance. This is part of the value we attribute to that business. I mentioned earlier where we stand with IPONWEB. I cannot elaborate much further, but I want to emphasize that we maintain a strong dialogue and relationship with them. We share a common vision for the business and our commitment to our people. We are encouraged that IPONWEB is following through on their plans to reduce their exposure. For instance, the CEO has publicly stated his intent to move their Russian R&D resources. They have reorganized to focus on this initiative. He is committed to his word and is executing the plan. To provide some insight, one-third of their employees based in Moscow before the war have already relocated from Russia, which is significant for them. They plan to move another third in the coming months, with the remainder by year-end. So far, they are on track with their commitments. Naturally, we are collaborating closely with them because of our commercial relationship. This situation is not hindering our plans to further deploy the Commerce Media Platform. We will provide more updates in the future regarding our broader relationship and the proposed acquisition.

I'm very excited about Flipkart and appreciate the question. We are set to introduce product performance ads that will feature comprehensive measurement capabilities, enhancing Flipkart's off-platform offerings. To highlight a few key points: first, there is exclusivity in this use case. Second, the economics compared to retail media, adjusted for the market, are favorable. Third, while we will maintain a focus on performance for now, it's crucial that off-site retail media succeeds for a network like Flipkart in the future. We believe our strengths are aligned with those of Flipkart, and we are eager to develop capabilities that effectively integrate both on-site and off-site efforts.

Good morning, Megan, Sarah, and Todd. I have a couple of quick questions. First, regarding buybacks, I noticed you executed $8 million in the quarter, and given the current share price, it seems there might be an opportunity to increase that. Can you share if there is a chance to accelerate buybacks going forward, or do we need to wait for a resolution around IPONWEB for that? My second question pertains to the supply chain. We have discussed currency and the broader macro situation, but I’m curious about the impact of recent supply chain issues on your business and your clients, and whether resolving these issues would benefit your operations this year. Lastly, about data privacy, Sarah mentioned that Q1 was in line, and you guided Q2, which also appears consistent for the full year. Are you still anticipating an incremental $55 million for the full year? Thank you, everyone.

It's great to chat with you, Matt. We resumed our buyback program in early March and have adhered to the 10b rules regarding daily volume limits. As a French company, particularly with a pending acquisition, our capacity for significant buybacks is somewhat restricted. We consider our buyback program alongside other opportunities, including mergers and acquisitions, and are conducting further analysis on this front. Our goal is to maintain a stable share count year-over-year. As we explore opportunities, especially following the proposed acquisition of IPONWEB, we will seek alternative ways to ensure our capital is allocated to the most valuable areas. In terms of data privacy, the impact aligns with our expectations and guidance. We projected a total impact of $55 million, with most of this affecting the first half of the year, specifically $20 million in Q1 and $20 million in Q2 as anticipated. The primary factors driving this impact are iOS-related issues and some concerns in Europe.

On this one, just to remind everyone, we're in the advertising business. We help our clients find and convert consumers. They do that. They’re always going to do that. They may, however, change their tactics and the type of consumer they're looking for, depending on the products they have on their shelves or their strategies. They've always needed the right approaches to navigate supply chain issues. It’s important to note that we have a diverse client base. So where there may be supply chain issues for one client, there may not be for another. We ensure that our client base is diverse to mitigate any external challenges that a particular sector may face. Because of our audience targeting capability and our focus on commerce media and retail media, we are accessible to our clients regardless of the tactics they employ. If there’s pressure for them to reduce brand advertising in favor of performance or to shift towards commerce media, we can provide the solutions they require.

Thank you, Megan, Sarah, and Todd. This now concludes our call for today. Thanks everyone for joining. The IR team is available for any additional questions you have, and we wish you all a good day. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.