Good morning, and welcome to Criteo's First Quarter 2026 Earnings Call. Operator Instructions: Please note this event is being recorded. I would now like to turn the conference over to Melanie Dambre, Senior Vice President, Investor Relations and Corporate Communications. Please go ahead.

Good morning, everyone, and welcome to Criteo's First Quarter 2026 Earnings Call. Joining us on the call today, Chief Executive Officer, Michael Komasinski; and Chief Financial Officer, Sarah Glickman, are going to share some prepared remarks. Joining us for the Q&A session is Todd Parsons in his role as Chief Product Officer. As usual, you will find our investor presentation on our IR website now as well as our prepared remarks and transcript after the call. Before we get started, I would like to remind you that our remarks will include forward-looking statements, which reflect Criteo's judgment, 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 as well as our most recent Forms 10-K and 10-Q filed with the SEC. We will also discuss non-GAAP measures of our performance. Definitions and reconciliations to the most directly comparable GAAP metrics are included in our earnings release published today. Finally, unless otherwise stated, all growth comparisons made during this quarter are against the same period in the prior year. With that, let me now hand it over to Michael.

Thanks, Melanie, and good morning, everyone. One year into my role, we've made significant progress in sharpening our strategy, strengthening execution and focusing the company on what we expect will drive sustainable value creation. Our focus is clear, building Criteo into the leading commerce intelligence and AI decisioning platform for an increasingly complex and fragmented ecosystem. Our conviction is that the next phase of commerce will be defined by how decisions are made, not just where ads appear. As AI changes how people discover products and makes the ecosystem more fragmented, the real value will come from turning intent into measurable outcomes at scale. That is exactly where we are focused and where we are building our advantage. While this is not yet reflected in our results, we are making meaningful progress as we continue to transform our business. As we navigate this transition year, we executed with discipline in the first quarter, including media spend growth for the third consecutive quarter and meaningful progress across all our strategic priorities. What matters most is the pace of execution, and we are moving quickly. In the first quarter, we have advanced our Agentic AI roadmap, including our exciting partnership with OpenAI and increasing adoption of MCP with agencies. We also launched Criteo GO as our AI-powered self-service offering and introduced new capabilities like Page Intelligence to help retailers improve product discovery while maximizing monetization. Together, these milestones demonstrate strong progress against our strategy and reinforce the foundations for mid- and long-term growth. More broadly, AI is shaping how consumers discover, evaluate and buy, which raises the bar for relevance, trust and high-quality data. As commerce becomes more complex, the need for a decisioning and orchestration layer across multiple touch points becomes critical, and that is exactly where we believe we have a clear competitive advantage. This is powered by our unique commerce data foundation with visibility into over $1 trillion in e-commerce transactions annually and reach across billions of daily active users, products and interactions, allowing us to operate at scale. We believe this combination of data, AI and scale positions us to play a central role in the ecosystem and to capture increasing value over time. At the same time, AI platforms are emerging as a powerful new discovery channel, unlocking incremental budgets and expanding our addressable market. And for retailers, this is opening new monetization opportunities as they integrate conversational AI into their digital storefronts and create new surfaces for sponsored discovery. These dynamics are increasing demand, expanding our opportunity set and reinforcing the central role we play across the commerce ecosystem. We entered 2026 with the ambition to lead in Agentic AI, and we are already delivering on this ambition with discipline and focus. We became OpenAI's first ad tech partner, integrating our demand into ChatGPT's advertising offering with a focus on experiences that are relevant, additive and built on user trust. This positions us at the forefront of a new high-intent discovery channel for our advertiser clients. Momentum is building. We now have over 1,000 brands live with incremental budgets from both existing and new clients, strong agency traction and early expansion across international markets. We are also extending access through Criteo GO, integrating ChatGPT into our self-service cross-channel platform to enable advertisers to easily test and scale AI-native media. This traction reflects the value advertisers are seeing. Traffic from AI platforms like ChatGPT converts at approximately 1.5x the rate of other referral channels, driving incremental high-quality demand to retailer and brand destinations. More broadly, as AI-driven commerce emerges, our agentic recommendation service is enabling us to demonstrate our capabilities. It has been instrumental in advancing several partnership opportunities, including driving new engagement with a broader set of partners and is now evolving into a foundational layer of our platform embedded across multiple use cases. An example is conversational ads, an innovative format we are actively developing. These enable interactive shopping experiences where users can describe what they're looking for and receive tailored product or service recommendations directly within the ad unit. In addition to being engaging, they generate richer intent signals that continuously enhance our models. We're seeing strong early interest, particularly in our travel vertical. We are also advancing sponsored recommendations within retailer AI assistants built on the same capability. This allows sponsored and organic products to appear seamlessly within conversational experiences, opening new retail media inventory across these emerging surfaces, and we look forward to sharing more. Importantly, Agentic AI is making our platform more scalable and easier to use. We are moving toward an API-first future with agentic workflows embedded directly into our solutions, reducing friction and accelerating execution for our clients. Thanks to our MCP server, Dentsu has activated campaigns with Criteo from their agent using only a plain text brief. And this is a concrete example of how Agentic AI raises the bar for efficiency and interoperability, and we expect others to follow. At the same time, we are scaling agents across the platform, helping clients move faster across onboarding, audience creation, analytics and activation. Turning to Performance Media, our focus is clear: reaccelerating growth by scaling self-service, expanding cross-channel activation and extending further up the funnel. As consumer journeys become more dynamic, advertisers are increasingly looking for unified outcome-driven solutions across the full path to purchase. This plays to our strengths and reinforces our confidence that Performance Media will be a durable and growing contributor to our business over time. Against this backdrop, near-term trends reflect softer demand in specific verticals, particularly travel in Europe and reduced budgets from certain large U.S. clients, primarily driven by client-specific decisions. Sarah will provide more detail shortly. We are proactively responding by focusing on delivering strong outcomes to secure client budgets while executing against our growth priorities. While the near-term environment is challenging, it does not distract us from delivering on the strategy we believe will drive sustained growth and value. We are taking decisive actions to improve execution. Since joining as Chief Customer Officer in January, Ed Dinichert has elevated our commercial team and operating discipline, including bringing in new leadership for Performance Media in the Americas with deep experience in enterprise sales and scaling revenue. We are also deepening and accelerating our engagement with agencies to capture greater share of spend while reinforcing commercial discipline through clearer performance metrics, stronger accountability and more rigorous pipeline management. We are already seeing early signs of progress with new enterprise client wins in the U.S. Our mid-market remains resilient, and our GO self-service offering is increasingly effective in addressing the needs of smaller clients. Starting with self-service, GO launched as planned at the end of Q1. With more than two-thirds of campaigns from small clients now running through GO in the U.S., we are building on the successful transition of existing clients as we roll out self-service to new ones, supported by a comprehensive go-to-market plan, including targeted marketing campaigns with focused commercial support to drive awareness and adoption. GO simplifies activation and optimizes performance across channels, bringing together display, video, native and social into a single campaign environment. AI dynamically allocates budgets to drive outcomes, while built-in generative tools ensure consistent, high-performing creative across formats. We are also embedding agentic onboarding capabilities into GO, further reducing friction and accelerating time to value for our clients. Importantly, GO expands our addressable market, particularly among small- and medium-sized businesses. This is supported by strong industry tailwinds with AI-powered ad buying expected to grow from approximately $35 billion in 2025 to over $140 billion by 2030 according to industry estimates. We are already seeing strong interest and expect GO to be a multiyear growth driver. Clients running fully cross-channel campaigns are spending up to 3x more, reinforcing the value of an integrated approach. For example, Wine Country Gift Baskets increased return on ad spend by 28% and average order value by 10%, driving higher spend. We are also extending performance further up the funnel as brand performance becomes increasingly important. Discovery is how we help brands reach new audiences across channels. And as we build toward a more complete full funnel offering, we are introducing Discovery audiences in GO this quarter. Discovery typically represents at least one-third of media budgets, creating a meaningful opportunity to expand our addressable market. We are well positioned to capture that spend by connecting upper funnel engagement directly to lower funnel performance. Our cross-channel foundation is what makes this possible. It allows us to execute this full funnel strategy seamlessly, engaging consumers wherever they are and optimizing outcomes across channels rather than in silos. In practice, this means activating discovery across the environments where it is happening today, including social, CTV and emerging surfaces like AI platforms, all supported by AI-driven creative and optimization. Social continues to be a strong driver for our business, providing broad incremental reach and scalable performance. We are expanding into high-impact formats like short-form video on Instagram, Facebook and TikTok, where we are seeing encouraging traction. CTV is another important growth channel. Through our recently announced partnership with Roku, we are combining premium inventory with our commerce audiences to drive better performance and simplify activation, and we expect to bring CTV into GO by the end of the year. Taken together, this positions us to capture a greater share of upper funnel budgets while reinforcing our leadership in performance, and we expect these initiatives to build momentum as we move through the year. Turning to Retail Media. We continue to build on our position as a global leader in the fastest-growing segment of digital advertising. Today, we partner with 235 leading retailers worldwide, and our focus is clear: unlock greater demand, scale high-performing formats and bring more intelligent conversational experiences to retail environments. Underlying performance remains strong with contribution ex-TAC up 24% in the first quarter, excluding the impact of the two previously communicated scope reductions. On the demand side, we are expanding budgets and deepening engagement with brands and agencies. We drove additional share gains in the quarter, supported by our network of 15 third-party demand API partners and marketplace integrations that continue to unlock additional demand, particularly from long-tail advertisers. We are also seeing new capabilities like conquesting drive incremental spend across multiple retailers. By increasing competition on the digital shelf, it helps brands acquire new customers and defend market share. On the supply side, we expanded our partnership with DoorDash in Canada and added Hyundai department store in Asia Pacific. We also secured many multiyear renewals, including ASOS in the U.K., reflecting the strength and durability of our retailer relationships. Innovation across formats continues to be a major growth driver and a source of share gains with existing and new retailers. Auction-based display remains our fastest-growing format, now live with more than 60 retailers, up from 49 last quarter. This is improving monetization efficiency and driving higher yields for retailers. Shoppable video is also scaling quickly as retailers adopt more full funnel on-site strategies that combine discovery and conversion. AI is an important enabler of how we drive performance and monetization. With Page Intelligence, we are introducing an AI optimization layer that helps retailers balance organic and sponsored content while improving the shopper experience and unlocking additional revenue opportunities while maintaining full control over product selection and ranking. This positions retailers for a more AI-driven commerce future and reinforces our role as a long-term strategic partner. Collectively, these drivers are strengthening both demand and monetization across our network. We are executing with focus and remain on track for Retail Media revenue to return to growth in the fourth quarter as we move past previously communicated near-term headwinds from two client scope changes. We also continue to expect underlying Retail Media growth to accelerate in 2026 compared to 2025. To close, we are executing with focus in a transition year. Our fundamentals remain strong with solid margins and cash generation while we invest in the capabilities that will drive our next phase of growth. We remain highly confident in the trajectory of our business, including our expectation of a return to growth in the fourth quarter and reacceleration into 2027. We remain committed to shareholder value, including continued share buybacks, reflecting our confidence in the business and its potential. At the same time, we are advancing our portfolio and corporate structure optimization. Our redomiciliation to Luxembourg remains on track for completion in the third quarter, following strong shareholder support and will enhance our strategic and financial flexibility. As a next step, we plan to pursue a subsequent redomiciliation to the United States, which could occur as early as the first quarter of 2027, subject to applicable approvals and other conditions to make Criteo easier to invest in and better positioned for the future. We are building a more scalable Criteo, well positioned to capture the opportunities ahead and deliver sustainable value to our shareholders. With that, I'll hand it over to Sarah, who will provide more details on our financial results and our outlook.

Thank you, Michael, and good morning, everyone. Our first quarter performance reflects solid execution and financial discipline. Our first quarter media spend surpassed $1 billion for the first time. Revenue was $425 million and contribution ex-TAC was $250 million. This includes a year-over-year tailwind from foreign currencies of $9 million. At constant currency, Q1 contribution ex-TAC was down 9% as expected, reflecting a $27 million headwind related to previously communicated scope changes with two Retail Media clients. Excluding this impact, contribution ex-TAC grew 1% in Q1 and client retention remains high at close to 90%. Starting with Performance Media, revenue was $383 million and contribution ex-TAC was $210 million, down 2% at constant currency. This reflects mixed performance in Commerce growth, continued momentum in our Commerce Grid SSP and improving trends in Ad Tech Services. Within Commerce Grid, we have a diversified client base and a global footprint. By region, we delivered low growth in media spend in EMEA, while budgets declined in the U.S. and to a lesser extent, in APAC. By vertical, travel remains our fastest-growing category, up 20% on top of 43% growth in Q1 last year, followed by solid performance in our marketplaces. We continue to see lower spending in retail, especially in discretionary categories such as fashion, which was down 18%. As the quarter progressed, spend from certain large enterprise clients softened in the U.S., while the broader client base remained stable and resilient. In Retail Media, revenue was $41 million and contribution ex-TAC was also $41 million, reflecting the previously communicated $27 million headwind in the quarter. Excluding this impact, trends improved compared to last quarter and contribution ex-TAC grew 24% in Q1 across the underlying client base. This growth was driven by continued strength in Retail Media onsite. We benefited from the traction of our auction-based display offering and new retailers. Growth from existing clients was strong with same retailer contribution ex-TAC retention at 88% or 110%, excluding our largest retailer, driven by multiyear contracts and exclusive partnerships with most of our retailer clients. Media spend in Q1 grew 30% year-over-year, accelerating from 25% last quarter as our 4,150 global brands continue to prioritize retail media as a key channel for their investments to reach relevant audiences and sell more products. We delivered adjusted EBITDA of $65 million in Q1 2026, reflecting lower top line along with planned growth investments in our seasonally lowest quarter, partially offset by lower-than-expected RSU social charges and onetime tax refunds recognized in Q1 that were originally expected in Q2. Non-GAAP operating expenses increased 10% year-over-year, primarily driven by planned growth investments, return to office costs and a foreign exchange headwind on our euro-based cost structure with productivity gains partially mitigating the increase. AI deployment continues to improve efficiency, streamlining execution and enabling better resource allocation. Moving down the P&L, depreciation and amortization was $28 million and share-based compensation expense was $14 million. Our income from operations was $10 million, and our net income was $9 million in Q1 2026. Our weighted average diluted share count was 51 million, which resulted in diluted earnings per share of $0.15 compared to $0.66 last year. Our adjusted diluted EPS was $0.73 in Q1 2026 compared to $1.10 last year. Operating cash flow was $48 million and free cash flow was $16 million in Q1, reflecting planned higher CapEx and improved working capital in a seasonally low quarter. Criteo continues to be a resilient cash-generative business with the financial strength to invest for growth and return capital to shareholders. We have a strong balance sheet with no long-term debt. We had $889 million in total liquidity as of the end of March, which gives us significant financial flexibility to execute on our strategy and enable disciplined and balanced capital allocation. Our priorities are to invest in high ROI organic investments and value-enhancing acquisitions and to return capital to shareholders via our share buyback program. We are confident in our business strategy, and we are committed to driving shareholder value. We deployed $31 million to repurchase 1.6 million shares this quarter, and there was $190 million remaining under the current authorized share repurchase program as of the end of March. In April, we canceled a total of 1.9 million shares, increasing our capacity for additional share repurchases. Turning to our financial outlook, which reflects our expectations as of today, May 6, 2026. Our guidance incorporates softer performance media trends seen so far in Q2, while our Retail Media outlook remains unchanged. For 2026, we now expect contribution ex-TAC to decline by low single digits at constant currency. This reflects the previously communicated Retail Media client scope reductions as well as a more cautious view of the volatile macro environment and the reduced budgets from certain large enterprise performance media clients in the U.S. At the midpoint, our full year outlook is down approximately 300 basis points, reflecting several factors impacting Performance Media. About half of that or roughly 150 basis points relates to indirect macro impact. Our direct exposure to the Middle East is limited at around 1% of our business, but we are seeing broader effects. This includes slower travel growth in Europe, which has been the region's fastest growth driver, softness in discretionary retail due to inflation and weaker consumer sentiment and slower adoption of newer products as advertisers concentrate spend on established solutions in a more cautious environment. It's important to note that these dynamics are largely concentrated in our international markets, EMEA and Asia Pac, which represent close to two-thirds of our media spend for commerce growth. The remaining approximately 150 basis points is driven by U.S. client-specific dynamics. Taken together, these factors are pushing our return to growth into the fourth quarter. Excluding the $75 million Retail Media headwind, underlying contribution ex-TAC is expected to grow at a mid-single-digit rate. Our guidance does not assume any material revenue contribution from Agentic AI initiatives given their early stage, although we are seeing strong early traction. We estimate ForEx changes to drive a positive year-over-year impact of about $6 million to $8 million on contribution ex-TAC for the full year. In Retail Media, we are confident in our outlook that remains unchanged. We continue to expect media spend growth ahead of the market with contribution ex-TAC declining in the mid- to high teens year-over-year at constant currency due to the $75 million client scope reduction impact. Excluding the two clients, the underlying Retail Media contribution ex-TAC growth for 2026 is expected to accelerate towards the high end of the high teens to 20% range that we previously provided compared to 16% in 2025. In Performance Media, we now expect contribution ex-TAC to be flat to up low single digits at constant currency in 2026. This reflects the expected ramp-up of GO over the course of the year, offset by macro headwinds and reduced spend from certain large U.S. clients. We have taken actions to reinforce execution, including new sales leadership. Overall, we continue to anticipate an adjusted EBITDA margin of approximately 32% to 34% for 2026. Despite lower top line, we expect to maintain margins in line with our prior view through disciplined cost management and productivity gains, while we continue to invest in Agentic AI and key growth initiatives and absorbing foreign exchange headwinds on our euro-based costs. We anticipate that the investments we are making this year will position us for sustainable top line growth and strong cash flow generation for the coming years. We expect a normalized tax rate of 27% to 32% under current rules, driven by our evolving revenue mix and certain onetime items related to our redomiciliation. As previously communicated, we anticipate higher CapEx in 2026, primarily related to the renewal of certain data centers with total CapEx expected to be approximately $190 million. We expect operational cash flow conversion from adjusted EBITDA to improve to approximately 85% in 2026, up from 76% in 2025, driven by continued improvements in working capital. We also expect free cash flow conversion of about 35% of adjusted EBITDA. For Q2 2026, we expect contribution ex-TAC $260 million to $264 million, down 11% to 9% at constant currency. Our range reflects a more volatile environment shaped by geopolitical tensions and reduced spend from certain large U.S. Performance Media clients, which has translated into softer April trends. We estimate foreign exchange to be a modest headwind in Q2, reflecting more unfavorable rates compared to three months ago. We now expect up to a $2 million negative year-over-year impact on contribution ex-TAC in Q2, about $3 million worse than under the rates assumed in our prior guidance. We expect adjusted EBITDA between $67 million and $71 million, reflecting lower top line, continued high ROI investments in Agentic AI and growth areas, annualized employee costs and our annual promotion cycle and foreign exchange rate headwinds on our European cost base. We are pleased that our proposed redomiciliation for Luxembourg and direct listing are progressing as planned, following strong shareholder support. This is expected to enhance our flexibility for share repurchases by removing current structural constraints. We remain on track to complete the redomiciliation in the third quarter of 2026. Looking ahead, we plan to pursue a subsequent redomiciliation to the U.S. as early as the first quarter of 2027, subject to applicable approvals and other conditions with the objective of further broadening our access to U.S. capital markets. In closing, we have strong conviction in our strategy. We are excited for Agentic AI, and we are laser-focused on disciplined execution and capital allocation while delivering strong margins and cash flow generation. And with that, I will open up the call for questions.

Operator Instructions: Your first question is from Mark Kelley with Stifel.

I appreciate all the color on the macro headwinds that you're seeing by vertical and by region. I guess I had two questions there. One is, is it fair to assume that the majority of the headwinds are outside of retargeting? Or is it kind of spread across the whole performance business? And number two, you mentioned slower adoption of some of the newer products given some of the worries that people have out there from a macro perspective. I feel like we've been worried collectively across the digital advertising industry for a handful of years here with ongoing conflicts and plenty of things to be mindful of. I guess what do you think your clients need to see in order for them to start adopting some of these newer tools that you've put into the market a bit more in a more meaningful way?

Yes. Sure, Mark. Happy to take that, and Todd will probably add a little color to some of the product adoption parts of that question. The slowdown with the U.S. clients is across the Performance Media segment at large. So not just retargeting—across the whole portfolio. And that sort of leads to maybe the more important point, which is there wasn't any common denominator of those decisions. No sort of red thread running between them other than we need to build a stronger pipeline. We need to execute better with the way that we convert that pipeline on large U.S. clients. And that's something that we think we've already addressed. We've got a great new leadership team in place. We brought on a new Chief Customer Officer, Ed Dinichert, at the beginning of the year. And Ed, in turn, has revamped his entire commercial organization globally, in fact, but especially in the United States, where he brought on several key hires, many of whom started in the March or April time frame. So we feel like we've got the right team in place to jump start growth with that portfolio. And it's really more at an account level, just making sure that we're right there with our clients, driving strategic decisions, maintaining the right share of budget across our product set. And in terms of adoption of new products, Todd, if you wanted to comment on that part.

Yes, I can add to that, Mark. We're seeing a very healthy mix of new and existing advertisers adopting the capabilities that we're shipping. And as Michael said, we're shipping a lot of product at a very quick rate here. What you're seeing is early days in that adoption. And with large clients, it really goes to our commercial and selling motion and the work that Ed Dinichert and the new organization are doing. With self-service products like GO, it's just simply early. We're a month into it. Our focus is what you'd expect from a launch: very tight feedback loops from our users, continuous improvements in customer experience and so forth, and we're seeing all positive signs there.

Operator Instructions: Your next question comes from Matthew Cost with Morgan Stanley.

Maybe one for Michael, one for Sarah. Michael, just on the ChatGPT partnership, you talked about incremental spend, which is very encouraging. How are you defining success for that product? And what are the milestones that investors should be watching as you continue to work through that launch? That's question one. And then for Sarah, you've talked about how travel in Europe is softer, but EMEA was still a growth driver in Q1. And obviously, travel in Europe has been a very fast-growing category for you, as you pointed out. So what are your assumptions for the rest of the year for that category? And how conservative are you choosing to be given the uncertainty in the macro?

Sure. Thanks, Matthew. I can start with the OpenAI question and then the second part to Sarah. On OpenAI, definitely the leading KPI right now is client count. And that's why we published the update yesterday on the 1,000 clients that we now have live. And we expect that number to continue to scale nicely over the course of the year as they open up additional markets. And what's going to be really interesting is how our value proposition coexists alongside OpenAI as they develop their own self-service platform. We continue to see really strong engagement with clients where they need our expertise and our service to help them with adopting a new ad unit, a new surface—how does it work, how do they optimize, how should they think about that alongside their other investments and touch points? We're developing our data management feeds to help them scale their product data into that environment because that's a real key part of driving ad performance in that unit. And then, of course, the cross-channel setup will always be a unique proposition that we'll be able to offer. We're really excited about getting that supply into our cross-channel setup and GO over the course of the year. That is something that we'll continue to provide updates on publicly in terms of making progress on that product rollout. So a lot to be excited about. I think key client count is the main KPI for now. As we get into 2027, we probably would start to guide more around contribution and some additional disclosure. But Sarah, do you want to take the second half of Matthew's question?

Yes. So just on travel, that was our highest growing vertical this time last year at 43% and in Q1, it was at 20%. We did anticipate growth, including in the Middle East. We actually won some really good new clients there, and they just have been floored for obvious reasons. So we are taking a prudent approach on travel, assuming that we won't see the growth profile that we had anticipated. And maybe if I can just take one minute on other verticals. We talked about fashion being down year-over-year. Last year, that was down about 6%. This year, it's down about 18%. So we are seeing these trends from our clients. Even if I just go one more—marketplaces, real estate classifieds was an amazing growth driver for us last year. And it's just much more muted. So that's what we've put into our guide, and we've just assumed a Europe and Asia Pac impact as well as a U.S., I would say, slower spend impact as well.

Operator Instructions: Your next question comes from Justin Patterson with KeyBanc.

Great. I appreciate the details on Agentic. I guess one thing that our team has been wondering is how you think about some of the new device types and multimodal search, more visual search as an opportunity in there. Is that something Criteo can address today? Or is that just another area you would need to invest in down the road? And then separately, the 1,000 clients is a nice milestone with Agentic. I'm curious how that's changed the pipeline of client engagements and how you think that might build up over the course of the year?

Yes. So I can jump in to start with. The answer is absolutely yes. We see that as an opportunity for us, and it's a very natural one, Justin. Our job overall is to bring performance discipline to the LLM surface. And as I laid out, that's not just client count, but from a product functionality standpoint, it's relevance, it's outcomes, it's measurement. Those surfaces or additional creative types or ways that users are engaging them are absolutely baked into our strategy. But at the core, we're really focused on enabling those three things consistently across the surfaces so that we're not running towards an interaction or engagement that might not scale. But yes, it absolutely represents an opportunity, and we're well prepared to take advantage of it. Justin, just on the incrementality part of OpenAI, a couple of different thoughts there. One, I mean, it's been the fastest-growing partnership that Criteo has ever had. I think it's probably obvious from some of the statistics that we're sharing. We do find that, by and large, the budgets that go into it are incremental. And the pipeline is increasingly incremental as well. In the early stages, a lot of existing clients then wanting to use their Criteo pipes and service model to get into that platform. But it opened up a lot of traction for us on the new business front. And so increasingly, that's net new in our pipeline. Now we need to go convert that over the course of the year and then cross-sell those clients into our cross-channel setup or to our other products. But we see a lot of potential in kind of a flywheel coming off this partnership. So helping our partners scale their product, but certainly bringing new folks into the Criteo platform more broadly. So more to come on that in the second half of the year.

Operator Instructions: Your next question comes from Alec Brondolo with Wells Fargo.

Maybe two for me. On the large client softness that you've experienced year-to-date, I guess, what is the level of confidence that it's a sales execution issue and not an issue that's more structural with the underlying performance of the advertising products? That would be a helpful place to start. And then maybe secondly, can you speak to the GO self-service rollout? Has it been a material new customer driver thus far? And could you help us understand what's implied in the guide for contribution from that product specifically in Q2 and the back half of the year?

Sure. Great questions, Alec. Yes, look, on the U.S. clients, we do not think that's structural. As I said, we've not lost any clients there. And as I mentioned, there really isn't a common theme running through those other than we've got to be closer to those clients and jockey for position amongst other vendors that they work with. And as they make decisions, be able to move budget from, say, one Criteo product into another. If someone wants to pull budget from, say, lower funnel conversion into mid-funnel customer acquisition, we need to be right there at the table to suggest the right alternatives and move that from left pocket to right pocket. We also need to continue to build more pipeline at that scale. And we've started to do that. But we have to convert it, and we need to get those net new clients scaled up so that when we have these fluctuations in that segment, we've got new growth and revenue coming in to offset it. So we're a little out of sync for the quarter on that. We feel like we've brought in the right leadership to address it. And the underlying metrics on pipeline growth and certainly stability with those U.S. clients is there. So we think that this will resolve itself in another quarter or two. In terms of GO, I'll let Todd take that one.

Yes. Just to reinforce what I was saying earlier, we're a month into the launch there, and we can't say now exactly what's going to happen for the rest of the year. But I can say that the interest for the product is outstanding. As I mentioned, we are really focused on making sure that onboarding is smooth and customer retention is strong, so we're ensuring product-market fit is there. That's the stage that we're at in launching a new product, but it looks very good at the beginning. And of course, we're building on a year's worth of campaign success in the company. So we feel very good about that, but it's just very early.

Operator Instructions: Your next question comes from Brian Pitz with BMO Capital Markets.

This is David Lustberg on for Brian. Two quick ones, if I may. The first one, just to touch on some of the macro impacts that obviously impacted the full year guidance. I was just curious if you could kind of pinpoint when you started to see those impacts come on and hit the model? And then secondarily, just on the client retention, I think it's kind of remained in the strong kind of 90% range. But just kind of curious if you can touch on the customers that do churn off the platform, where are you finding that they're either replacing you or they kind of just wind down with a vendor would be helpful.

Yes. I mean on the macro, we started to see it within Q1. We saw it in March and then April, we are seeing that impact. And it is quite broad reaching, obviously Asia Pac and especially Europe. It's definitely a conversation with our clients. And then in the U.S., notwithstanding all the comments that Michael made, we are seeing some lower growth in, for example, large U.S. department stores and some other areas. So it's a trend that we have seen over the last few months and hence, why we felt that we needed to take Q2 guide down and there for the year.

Yes, I can take the second part on the churn question. The good news on that one is that there really isn't a dominant or even a couple of different places that people typically go. I think the market for performance products and even brand products to be more measurable and performance-like has definitely accelerated. So when we churn something or when we lose a budget, it can go to a variety of places because even brand products are measurable these days. And thus our move into the full funnel, our plan to launch Discovery audiences next quarter—we need to be wherever those budgets are going to shift. And again, I think that's why we feel good about our strategy to be full funnel cross-channel so we can catch those dollars wherever they move. So no common denominator of where people typically churn to other than maybe some validation of our strategy to be in the right places to catch things.

Operator Instructions: Your next question comes from Mark Zgutowicz with Benchmark.

Sarah, just a couple of clarifications, if I could. Your press release mentioned certain large performance media U.S. clients in terms of some of the weakness that you're seeing. Is that multiple clients or one or two? And if you think about the 2026 guide, how wide is the scope of those weakening budgets that you're seeing? And how does that translate into the level of conservatism that's now set in the 2026 guide? And then perhaps for Todd and/or Michael, is there a first-mover advantage with ChatGPT versus a steep learning curve that you may be carrying for others to follow? And then, Michael, you mentioned regarding initial client spend being incremental there. I suspect that that's test budgets. But as this evolves over time, why is that budget not a replacement versus remaining incremental?

Yes. So to comment on the clients, it's a number of extra large U.S. clients, and they're all kind of down. So that is having an impact and some of those were key growth drivers for us. So that is the impact, but it's a small number of U.S. clients. The rest of the base is resilient. So our medium, large, small kind of clients are all resilient, but there have been some client-specific reasons why the spend is down on those certain large U.S. clients.

Yes. On the ChatGPT question, absolutely. It's a competitive advantage for us in two ways. One, in terms of just time to be in market. And as Michael mentioned, we're crossing 1,000 clients on that, many of which are new to the company. That gives us a really neat advantage to grow the Criteo portfolio. Technically speaking, though, it gives us an advantage to already be at the table, having our tech and the value we add to ChatGPT's integration, developing faster than others so that when OpenAI launches new features, CPC being a good example or a new measurement feature, as you saw announced yesterday, we're ready for that. And in fact, we're ahead of the pack on that. So we're really excited about the timing of things, and we're doing what we're really good at, which is bringing performance to a new surface and making it cross-channel and full funnel. So we're right in our sweet spot there and competitively, it feels quite good.

Yes. In terms of incrementality, it's definitely incremental for Criteo even as we move past test budgets because in its current format, that's a discovery budget. And so that, again, is an example of us wanting to move up funnel. This partnership accelerates that. So CPM and even the CPC model that they currently have in place, and that's why they call it a test program right now. We'll see if that's the model that they persist with. But let's take as an example, if they did move to like a full optimization model off of this CAPI that they introduced this week, that would then compete for search budgets, which again, for Criteo would be truly incremental. So we're incremental off this platform either way. If it stays a discovery surface with the model you see now or if they really go performance-oriented, that's a channel that we've been blocked out of. So I think for us, it's incremental either way.

Operator Instructions: Your next question comes from Tim Nolan with SSR.

It's actually a bit of a follow-on to the last one regarding OpenAI, again, surprise, surprise. Could you please just clarify what the business model is for you? If it's a demand integration, which I understand it is, then is it a similar business model as any other partner that you'd be placing ads on or maybe not placing ads but providing the data for the ad placements? And relatedly, if OpenAI, if ChatGPT is successful with however you've explained the model may work out, how might that change the retail media business? Meaning if consumers are doing, spending more and more of their time on ChatGPT and not doing searches and clicking links to the publisher sites and going on to the retailer sites, how does that change the retail media business model for you?

So to answer your question, it's both data and placements, and it's a normal course of doing business for us. So there's really nothing out of the ordinary there, Tim, except that when it comes to cross-channel, the point you make is the second point: we are very set up to catch users as they traverse channels. So whether it's OpenAI or whether it's retail media or whether it's the open web, we're there with our performance setups to make sure that we find those users and we're able to convert them into outcomes for advertisers. Also, I think it's important to say that traffic continues to grow on retailer sites for us. So we're not seeing deterioration in places that would signal weakness to us, and that feels quite good. So cross-channel helps us find users where they're engaging, and we're seeing traffic go to the places where we have the greatest strength as a company. Those are two good patterns.

Yes. And I'll just build on that second point, Tim. I think you really see the vision that we have for how this all plays out is that retailers continue to own the transaction. And I think that that's supported by some of the different product moves that you've seen in the market over the last few months, even with ChatGPT itself with the pullback on instant checkout. We see discovery offerings like OpenAI's product being complementary to retail media, providing more high-intent traffic. People may land in a customer journey in a different state of mind or in a different part of the site infrastructure. We published some thought leadership about product detail pages being the new homepage or the new landing page. But retailers still then have the opportunity to do a lot with that high-intent traffic. There are different ad units that you can play around with on the PDP or certainly the introduction of shopping assistance conversational ads. I think the transition from keyword search to semantic interaction is a powerful trend. So as long as high-intent traffic is landing in retail environments, retailers are going to figure out ways to optimize that, both for organic and paid objectives. So we're a big believer in that future, and we think that the OpenAI products are complementary to that, not cannibalistic.

Operator Instructions: Your last question comes from the line of Richard Kramer with Arete Research.

Just a couple of quick ones that haven't really been addressed yet. First one, activated media spend grew 8% constant currency and topped $1 billion, but contribution ex-TAC declined against that. Maybe Michael or Sarah, can you give us some details on what impacted take rates across retail and Performance Media? And then equally, excluding the headwind, you had 24% growth in retail media, and you mentioned the sort of 60 adopting auction-based formats out of your 235 retailers. What's the pipeline look like for expanding retail media networks? And where should that 60 number get to relative to your 235 retailers that you mentioned?

I mean just to take the take rate question, it's actually quite stable on the Performance Media side. There is some mix there, but that was pretty stable quarter-on-quarter, year-on-year. The biggest impact is the Retail Media client impact that took the take rate down for Retail Media quite significantly, which I think we've communicated. The underlying take rate of all other clients is at the high end of the previously communicated range of the 10% to 15%. So we feel—we do see that the only big impact being that Retail Media dynamic.

Happy to take the second part of that on the display product and retail. Look, it's already a key growth driver and definitely a source of share gains. Auction-based display represents a large growth component and is already driving monetization. It represents 64% of on-site display spend. As we mentioned, the 60 versus the 49 last quarter in terms of retailers adopting auction-based display—we think that will continue to grow significantly across that client base. What you see is a lot more monetization and growth happening in that existing base. So there definitely is still a pipeline for net new retailers standing up new networks. But certainly, the growth of the business is tilted towards new products like conquesting, like display and now some of the new things like Page Intelligence, where retailers continue to gain traffic and we'll get more out of that and make those networks work harder.

Thank you, Michael, Sarah and Todd. That concludes our call for today. Thanks again to everyone for joining. If you have any follow-up questions, we're available to assist. Have a great day.

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