Criteo stock dropped sharply on Wednesday morning after the company reported a decline in revenue in Q4 2025 compared to the year before. The company also reported a drop in the company’s take rate and profitability – net profit for Q4 2025 was $46 million, down from $72 million the year before.
Criteo is carrying an albatross around its neck, in the form of a forecasting downgrade as a result of two large retail media clients pulling back from their previous agreements. The pullbacks create a $75 million shortfall in Criteo’s projections this year, mostly frontloaded to the first half of the year.
Without that built-in forecast downgrade, Criteo’s core business would be growing at high single digits, CEO Michael Komasinski told AdExchanger the day before Criteo’s earnings report.
He predicted he and CFO Sarah Glickman would “have to do a good job explaining that to the market. So that investors can see that the underlying business is actually accelerating and that our transformation is on track.”
And it was a revelatory investor call. At least in the sense that Criteo has publicly noted that Uber Eats is one of the large retail clients that retracted its budgets. The other client had only been referred to anonymously as a “large retailer client.” However, Glickman errantly revealed to investors during the call (with an audible “Oh! I’m sorry!”) that the other retailer is Target’s Roundel.
Criteo’s core
Criteo may have gotten out over its skis, so to speak, when it first incorporated projections of spend commitments from Uber Eats and Target Roundel into its forecast. Without that, the business would be growing single-digits, which isn’t great but is a heck of a lot better than being underwater.
Criteo is also trying to manage a transformation project where there are reasons for great optimism. But Criteo must persuade investors there is a bridge to real monetization.
The obvious example is AI. Criteo has moved from a proof of concept to a more formal extended testing with an unnamed LLM partner. The LLM uses Criteo’s data feeds and recommendation engine to inform its product suggestions to users (who themselves have no idea the recommended product was informed by Criteo).
The company has a “parallel track,” Komasinski told AdExchanger, where it’s working with retailers and merchants to insert product recommendations into their own on-site or in-app shopping agents.
How Criteo monetizes these chatbot and LLM-based advertising products is unknown. There could be a data licensing deal, some performance fee or a more traditional ad CPM or CPC deal. As Chief Product Officer Todd Parsons told investors, Criteo is confident that that the monetization will materialize.
Some of the ways Criteo’s recommendations are incorporated into an LLM are “organic” rather than paid media, which is a completely new type of placement for Criteo, he said.
“The experimentation now is focusing on making sure the discovery works better,” he said, “and we know the monetization will come right after that.”
On the other hand, none of those AI products have immediate material upside. In the sense that, the cumulative AI products are incorporated into the company’s revenue forecast at about $0. (To be fair, Criteo has learned hard lessons about projecting revenue a year or more ahead.)
But AI isn’t the only potential growth channel.
CTV is one of the fastest-growing online ad markets, and Criteo has relatively little business there, Komasinski told investors. The company is moving into CTV as well as social media, with partners like Meta, which is adding video formats to its Criteo integration in 2026. While most of Criteo’s ad business is growing slowly, if at all, year over year, Criteo’s partnership spend with Meta is increasing at double-digit rates quarter over quarter. And, currently, only 37% of Commerce Go! (its AI-based dynamic allocation product) customers extend to social media, he said, so there’s room for growth.
Investors like shiny new objects like AI and CTV, but they don’t like what can show up in the balance sheet.
To paraphrase multiple investors: “What’s the deal with the take rate?”
Usually, Q4 has Criteo’s strongest take rate. But it was down in 2025.
As Criteo grows into social media and CTV, those upper-funnel channels carry lower take rates than sponsored product ads on a retailer’s own site, Komasinski answered.
The dynamic makes sense, but again investors are being asked to accept some unfavorable trends that will weigh on the bottom line over the next year or two, while monetization in these higher-growth channels hopefully catches up.
Holding the line on Criteo’s take rate would mean sticking to its central business of serving sponsored products on retailer sites and retargeting in an ad network. Those are down-funnel, direct response campaigns. And according to Komasinski, only 15% of Criteo’s retailer customers use the ad tech to extend to off-site ads.
Pushing those retailer clients into new channels will mean lower take rates, as Criteo expands from purely direct response to more branding and full-funnel campaigns, he said. “However, there’s clearly more scale there.”
