Criteo’s present disappointed investors. Management, however, spent much of its earnings call today talking about the AI future.
The commerce media company reported Q2 revenue of $428 million, down 11% year over year, while adjusted EBITDA fell 18% to $73 million. Criteo also lowered its full-year outlook after several large clients cut back on spending.
Investors responded, of course, sending shares down roughly 24% after earnings.
Why This Matters:
Criteo opened the call by acknowledging that the quarter fell short. Company CEO Michael Komasinski connected the weakness to a handful of large enterprise clients that reduced budgets, prompting the company to adopt a more conservative outlook. Management doesn’t believe those customers will meaningfully increase spending this year.
With the tougher news out there, the call pivoted to AI, which was a bright spot. (We’ve seen this before.) Criteo said its OpenAI partnership has grown from 1,000 to more than 2,000 brands in just a few months, making it the company’s fastest-growing channel. It also said ChatGPT traffic converts 1.5x to 2x better than traditional referral traffic, with roughly 80% of paid visitors being new to a brand. Even so, management said it doesn’t expect OpenAI or its broader agentic AI initiatives to become meaningful revenue drivers until 2027.
In a nutshell, the numbers were about 2026. But Criteo wanted to make it clear that 2027 is when some of the key levers they’re pulling will go into effect.
Experts React:
An analyst asked the question many investors were likely wondering: If OpenAI is performing so well, why isn’t it moving the needle yet? Komasinski emphasized that advertisers are still testing ChatGPT as a new discovery channel.
“We really do have to give this platform a chance to scale… We are confident that it’s going to be a meaningful contributor next year.”
He added that advertisers are still figuring out where ChatGPT fits within their broader media mix as additional countries come online and new capabilities continue rolling out. All very fair, of course.
Our Take:
This earnings call was almost two stories in one. The numbers reflected a company dealing with softer spending from large customers. The conversation, however, was almost entirely about AI, retail media, and what commerce advertising could look like over the next few years.
The challenge is timing. Investors are valuing Criteo based on a slowing Performance Media business today, while management is asking them to wait for greener pastures. Patience is a virtue, and for Criteo, hopefully investors agree.
