• by Tobi Elkin  @tobielkin, August 3, 2016

Global marketing technology firm Criteo on Wednesday reported financial results for the second quarter ended June 30, 2016: revenue rose 36% to $407 million, and revenue excluding traffic acquisition costs also grew 36%, to $166 million, or 40.8% of revenue.

Among other highlights, the company reported:

• Net income increased 240% to $13 million.

• Adjusted EBITDA grew 66% to $39 million, representing 9.6% of revenue and 23.6% of revenue excluding traffic acquisition costs.

• Adjusted net income per diluted share grew 106% to $0.33.

• In the Americas revenue minus traffic acquisition costs grew 36% to $60 million (in Q2 2015 it was $44 million) and represented 36%.

• In the EMEA region, revenue minus traffic acquisition costs grew 25% to $67 million (Q2 2015: $54 million) and represented 40% of total revenue.

• In the Asia-Pacific region, revenue minus traffic acquisition costs grew 61% to $39 million (Q2 2015: $24 million) and represented 24% of total revenue.

A key metric for Criteo is revenue without traffic acquisition costs. Performance advertisers like retailers and travel companies pay Criteo to drive sales to their sites through personalized advertising. “We buy ads and then we take data from retailers to personalize the ads we serve,” said Eric Eichmann, CEO, Criteo. Traffic without acquisition costs represents the revenue minus traffic acquisition costs.  

Criteo, Eichmann said, sells just one product: personalized ads that it builds on the fly in real time, based on data that’s provided by the advertiser. “We use that data to serve very personalized ads. It’s purely programmatic, and we buy on a real-time basis for more than 70,000 publishers,” he said.

With respect to ad fraud, Eichmann said that as a performance-based company, Criteo is a bit insulated from the issue: “We pay publishers on a CPM basis on the number of impressions served, but we charge them on a cost-per-click basis, and clients only pay us only when people click. People judge us on the sales we can generate after the click. We rarely run into fraud issues because our whole premise  is driven by generating a sale.”

Eichmann said fraud issues around viewability and bot fraud don’t really affect the compay because they don’t generate sales.

He said about 60% of Criteo’s client base is retail—a combination of pureplays and omnichannel retailers—25% from travel marketers, and the rest is classified advertising clients like Cars.com and other verticals. More than 50% of Criteo’s  revenue comes from mobile.

As far as acquisitions looming on the horizon, Eichman said the company is always looking for companies with complementary products and services, but he had nothing to report. The company has made four acquisitions in the last couple of years.

But the company does want to add new mid-market clients, or clients that have more than 50,000 users per month but aren’t in the top 100 retailers—companies like Hugo Boss and Clark’s—which are clients. Criteo added 900 net clients in Q2; it has nearly 12,000 clients total.

Over 50% of its business was generated on mobile ads in Q2. It went live on Instagram in June, adding a new source of social inventory for advertisers; and clients matched through Criteo’s Universal Match solution generated 47% of revenue, reflecting the adoption of the solution and the high value of matched users.  

Asked about the U.K. market and the BREXIT issue, Eichmann said the U.K. represents only 6% of Criteo’s global business and he doesn’t anticipate that it will affect the company that much.