Criteo reported $240.22 million in revenue for the quarter ended June 2023 -- up 12% year-over-year (YoY) -- and revealed during the earnings call that the company is integrating generative artificial intelligence (GAI) into its platform with a focus on several areas in particular.
The stock has a Zacks Rank No. 2 (Buy) rating, suggesting it could outperform the broader market in the near term, which is a major step for the company in the past few years.
The goal for Criteo in using GAI is to improve performance, enhance the user experience for clients and their customers shopping online with applications such as chatbot interactions for product recommendations, and optimizing service delivery process through pro pilots to drive efficiencies, the company said.
These changes in GAI for the company means having the ability to leverage "twice as much ecommerce sales as Amazon with more than $1 trillion every year or close to $3 billion in daily transactions to fuel commerce-driven AI models," Megan Clarken, Criteo CEO and director, said during the earnings call last week.
Criteo AI Labs combines deep learning with "consented" commerce data across the entire buyer journey.
Retail media has become a major focus for Criteo over the years.
The company added nearly 100 new brands in Q2, and Retail Media spend driven by agencies grew more than 50% in the U.S. this past quarter. But it did take a slight hit in its overall client base, according to two analyst estimates dropping from 18,646 versus the estimate of 18,811.68. One media agency attributes that to consolidation.
The retargeting benefits continue. Criteo cited its latest release of AI-driven performance improvements to optimize campaigns and budgets. The company continues to grow its first-party media network to retarget consumers with first-party data matching in cookieless environments.
Criteo noted "a sequential increase in hashed email bidding this quarter" with encouraging results. A top unnamed U.S. publisher partner saw an immediate list of close to 140% in CPMs for Safari browser traffic, which contributed to a year-on-year increase of 70% in media spend after enabling hash emails as a targeting signal for its authenticated logs and users, the company reported.
Criteo also said it remains one of the largest-scale partners in Google's privacy sandbox project.