Criteo (CRTO) Q3 2025: Retail Media Spend Jumps 26% as AI and Cross-Channel Bets Scale
Criteo’s Q3 marks a strategic inflection as retail media spend surges and agentic AI integration advances, positioning the company as a cross-channel commerce enabler. Execution on self-service and AI-driven solutions is broadening reach across mobile, social, and CTV, while partnerships with Google and DoorDash unlock new demand pools. Management’s focus on operational leverage and capital structure modernization sets up a multi-year transformation, though near-term headwinds in retail media and client transitions signal a measured growth cadence ahead.
Summary
- Cross-Channel Diversification Accelerates: Retail media and social now drive a majority of spend, reducing single-channel risk.
- AI and Self-Service Propel Platform Shift: Agentic automation and Go adoption increase campaign scale and client retention.
- Capital Structure Overhaul Targets U.S. Index Inclusion: Luxembourg re-domiciliation aims to unlock buyback flexibility and investor access.
Performance Analysis
Criteo’s Q3 topline growth was powered by a 26% year-over-year surge in retail media spend, with over $450 million activated across 4,100 brands. Retail media now represents roughly half of Criteo’s total media spend, reflecting a pivot away from legacy desktop display toward a diversified, multi-channel model. Contribution XTAC (ex-traffic acquisition cost, a core profitability metric) rose 6% at constant currency, while adjusted EBITDA margin expanded 500 basis points to 36%—a testament to AI-driven productivity and disciplined cost allocation.
Performance media revenue, anchored by the Commerce Growth solution, grew 5% at constant currency, with strong momentum in travel and classifieds offsetting softness in retail verticals like fashion. Asia-Pacific and EMEA regions outperformed, while the U.S. showed gradual improvement. The “Go” self-service platform is rapidly scaling among small and mid-sized advertisers, now accounting for 25% of small client campaigns, up from 10% last quarter. Social channel penetration within Go hit 35%, illustrating Criteo’s cross-channel reach.
- Retail Media On-Site Display Outpaces Market: Auction-based display ad format grew 42%, now 12% of retail media business, up from 9% last quarter.
- Operational Leverage Drives Margin Upside: Flat operating expenses and lower equity comp combined with revenue growth to boost net income.
- Free Cash Flow Expands: Q3 free cash flow rose 74% YoY, with conversion above 45% of adjusted EBITDA, supporting continued buybacks and investment.
While near-term retail media growth is tempered by client transitions and one-time fee effects, underlying trends in AI, self-service, and new channel adoption remain robust, setting the stage for future acceleration.
Executive Commentary
"What excites me most about this quarter isn't just the strength of our results, but how our business is growing into a platform that reaches far beyond any single channel or format. Consumer attention is more fragmented than ever across websites, apps, social feeds, connected TV, and now AI-driven assistance. That fragmentation creates complexity for advertisers, but it creates opportunity for us."
Michael Komaczynski, Chief Executive Officer
"We delivered strong Q3 results with significant operational leverage driven by top-line growth and disciplined cost management. Client retention remains high at close to 90%, underscoring the resilience of our model. We are delivering consistent upward momentum in adjusted EPS and free cash flow per share, demonstrating long-term value creation."
Sarah Glickman, Chief Financial Officer
Strategic Positioning
1. Multi-Channel Platform Evolution
Criteo’s transformation from an open web remarketing specialist to a diversified commerce media platform is nearing critical mass. With 85% of media spend now outside desktop display, the company’s ability to serve advertisers across mobile, social, CTV (connected TV), and emerging AI-driven channels sharply differentiates it from single-channel ad tech players. This cross-channel reach enables Criteo to deliver measurable outcomes and performance lift, as evidenced by fivefold new user growth in cross-channel campaigns for large enterprises.
2. Agentic AI and Self-Service Innovation
Agentic AI, defined as intelligent assistants that guide shopping journeys, is a strategic priority. Criteo’s internal agentic products streamline audience creation and campaign management, while pilots with major AI platforms aim to embed Criteo’s product recommendation API directly into AI-powered shopping experiences. The Go self-service platform is also scaling rapidly, lowering cost to serve and opening access to SMB (small and medium business) budgets, while driving higher spend and lower churn.
3. Retail Media Expansion and Strategic Partnerships
Retail media is now a core growth engine, with media spend up 26% and on-site display adoption more than doubling. New partnerships with Google (integration with Search Ads 360), DoorDash, and Miracle are unlocking incremental brand budgets and expanding reach to mid- and long-tail advertisers. The Google partnership, in particular, opens access to an estimated $172 billion in addressable search spend, with multi-year growth implications starting in 2026.
4. Operating Model and Capital Structure Modernization
Criteo’s planned re-domiciliation to Luxembourg and direct NASDAQ listing will eliminate legal complexities, enhance capital allocation flexibility, and position the company for potential U.S. index inclusion. This move is expected to broaden the shareholder base and facilitate more aggressive buybacks, addressing prior French law constraints.
Key Considerations
Criteo’s Q3 underscores a business in transition, balancing near-term client-specific headwinds with long-term platform and data-driven opportunity. Management is focused on scaling AI, deepening channel partnerships, and expanding self-service adoption to drive durable growth and margin expansion.
Key Considerations:
- Retail Media Growth Outpaces Peers: Criteo’s 26% media spend growth and expanding retailer network signal share gains in a consolidating space.
- AI and Automation Embed Operating Leverage: Productivity gains from agentic AI and self-service tools are flowing through to margin and cash generation.
- Strategic Partnerships Unlock New Budgets: Google Search integration and DoorDash partnership open new demand pools and cross-channel activation.
- Capital Structure Shift Removes Buyback Constraints: Luxembourg re-domiciliation and direct NASDAQ listing broaden investor access and enhance capital flexibility.
- Near-Term Retail Media Headwinds Persist: Scope changes with large clients and slow ramp of new wins will weigh on Q4 and early 2026 growth.
Risks
Near-term retail media growth faces drag from two large client transitions and lapping of one-time tiered fees, with Q4 and Q1 2026 flagged as low points. The evolving agentic AI landscape introduces uncertainty around channel mix and monetization models, while macro softness in certain retail verticals (notably fashion) could pressure spend. Regulatory and competitive dynamics in digital advertising remain ongoing watchpoints, especially as Criteo expands its U.S. presence and capital markets exposure.
Forward Outlook
For Q4 2025, Criteo guided to:
- Contribution XTAC between $325 million and $331 million, down 3% to 5% at constant currency
- Adjusted EBITDA of $113 million to $119 million
For full-year 2025, management reaffirmed:
- Contribution XTAC growth of 3% to 4% at constant currency
- Raised adjusted EBITDA margin guidance to approximately 34%
Management cited several factors impacting guidance:
- Temporary retail media headwinds from large client transitions and fee lapping
- Continued scaling of AI and self-service investments, with Q4 trends not indicative of 2026 run rate
Takeaways
Criteo’s Q3 confirms the company’s successful pivot to a cross-channel, AI-powered commerce media platform, with operational leverage and capital structure modernization supporting shareholder value creation.
- Cross-Channel and AI Bets Pay Off: Retail media, social, and CTV are now core drivers, with agentic AI and Go self-service accelerating adoption and spend.
- Margin Expansion and Cash Generation: Operational discipline and automation are translating to higher margins and robust free cash flow, enabling continued buybacks and investment.
- Watch for 2026 Acceleration: As new partnerships and self-service scale, underlying growth drivers should reassert once temporary retail media headwinds abate.
Conclusion
Criteo’s Q3 demonstrates a business at a strategic crossroads, leveraging AI, self-service, and cross-channel expansion to offset near-term client headwinds. The pending capital structure overhaul and deepening platform partnerships position the company for long-term growth and improved investor access, even as management signals a measured approach to 2026 guidance.
Industry Read-Through
Criteo’s results reinforce the accelerating shift toward retail media, cross-channel activation, and AI-driven automation in digital advertising. The company’s success in scaling self-service and embedding agentic AI points to a broader industry trend of advertisers demanding outcome-based, measurable performance across fragmented consumer touchpoints. Partnerships with platforms like Google and DoorDash signal the blurring lines between traditional search, commerce, and retail media. The move toward capital structure agility and U.S. index inclusion may spur other global ad techs to reconsider their own capital markets strategies, while the persistent margin expansion from automation sets a new bar for operational discipline in the sector.