Criteo (CRTO) Q2 FY26 earnings call: guidance and Q&A

What specific factors are causing large enterprise clients to pull back spending, and why did it worsen from last quarter? When will the core business strength override these client-specific issues, and what's the visibility on fixing this?

Michael Komasinski explained that there isn't one common thread for the large client pullbacks, citing examples like geopolitical impact on travel, tariff changes, and shifts in client investment tactics where Criteo was unsuccessful in retaining budget. He acknowledged that Criteo's new business engine and products are not yet scaled enough to fully overcome these fluctuations, but noted encouraging signs like 24% YoY new business growth in the U.S. in Q2 and anticipated meaningful contributions from new products like OpenAI and Criteo GO next year.

“We need to have our new business engine and our new products performing at a level that overcomes those ups and downs that we will see periodically with enterprise clients.”

asked by Ygal Arounian · answered by Michael Komasinski

Can you bridge the current state of the OpenAI partnership to its bigger impact next year? How is the ecosystem shaping up given that Agentic Commerce is a strong top-of-funnel product but actual transactional elements are not yet fully layered in?

Michael Komasinski stated that clients are currently in a testing phase, seeing highly qualified traffic with 1.5-2x higher conversion rates and 80% new-to-brand traffic from OpenAI. He highlighted that the platform is still expanding geographically (only 7 countries live) and powerful product features like custom audiences and improved measurement only recently came online. He expects it to be a meaningful contributor next year as clients integrate it into their overall media mix.

“Traffic from ChatGPT converts at approximately 1.5 to 2x the rate of traditional referral traffic, while roughly 80% of paid traffic is new to the brand.”

asked by Ygal Arounian · answered by Michael Komasinski

Can you provide more color on the monthly cadence of spending patterns through the quarter, especially into July, given the outlook extrapolates June trends? What is the conviction that the revised conservative outlook has more upside?

Sarah Glickman explained that the client-specific dynamics, particularly in Asia Pac e-commerce and European travel, continued to drag. She reiterated that the outlook assumes current levels will not evolve to significant growth this year. Michael Komasinski added that the conservative outlook is a prudent baseline, and the focus is on consistently delivering against commitments, with new products and commercial execution expected to drive growth in 2027.

“We are assuming that the current levels that we're seeing will not evolve to significant growth this year.”

asked by Jamesmichael Sherman-Lewis · answered by Sarah Glickman

If OpenAI ad budgets are incremental, where are they coming from? Are clients ready for Criteo's advanced AI offerings, or is the company too far ahead, causing some budget slippage elsewhere?

Michael Komasinski clarified that OpenAI budgets are largely test budgets currently. He believes future scaling will draw from traditional search (e.g., brand keywords) and other discovery-focused channels, with potential for incrementality due to advertising effectiveness. He stated that Criteo is not necessarily too far ahead, but the focus is on commercial execution and being a trusted advisor to help enterprise clients integrate new, broader product offerings into their strategies.

“I believe that it won't come from any one particular platform or channel, right? As a new discovery surface, it probably will draw some spend from traditional search, think like brand keywords or product listing ads, things of that nature.”

asked by Tim Nollen · answered by Michael Komasinski

How are advertisers thinking about supply given degradation in open web traffic, and how can Criteo shift its media buying aperture to improve advertiser sentiment? What is the spend per advertiser for Criteo GO customers, and what is the size of customers being acquired?

Michael Komasinski acknowledged pressure on lower-intent traffic but stated that high-intent user engagement remains strong on the open web, with Criteo having access to broad, high-quality supply. He emphasized Criteo's diversification path, with 85% of media spend outside desktop display and clients moving to cross-channel setups. Todd Parsons added that Criteo GO is still early days, but adoption is strong across SMBs, though specific spend per advertiser is not disclosed.

“85% of our total media spend is already outside of desktop display. And we see clients moving to this cross-channel setup, and they spend up to 3x more on average than single channel clients.”

asked by Alec Brondolo · answered by Michael Komasinski

Has Criteo opened its user graph to third-party advertisers via SSPs, and how might privacy laws like New Jersey's impact its user graph? Will Criteo sustain share buybacks through the remaining $160 million authorization, and what's the capital structure outlook?

Michael Komasinski confirmed that exposing the user graph to third-party demand via SSPs is part of their strategy, expecting increased demand. He noted that Criteo closely monitors emerging privacy regulations, including New Jersey's, to ensure compliance. Sarah Glickman stated the Board is very supportive of the share buyback program, which was renewed, and that Criteo has strong liquidity and operational cash flow, with CapEx normalizing after 2026.

“Exposing the graph to third-party demand has always been part of our strategy. Whether that brand comes directly through a curated deal or whether that comes through an SSP is sort of just a variation of that strategy.”

asked by Richard Kramer · answered by Michael Komasinski