Yahoo Finance

Megan Clarken -- Chief Executive Officer

Thanks, Melanie, and good morning, everyone. Thank you for joining us today. As we enter 2025, I'm thrilled that Michael Komasinski will be stepping in as our new CEO. I'm confident that he's the right leader to take the reins and continue to execute against Criteo's vision and the exciting journey ahead.

With over 20 years of ad tech expertise and a proven track record of driving accelerated growth and AI-driven innovation all at scale, Michael brings a sharp focus on execution and agility to keep building on the momentum we've created. He'll officially join us on February 15th. For my part, I remain deeply passionate about this company and its future, and I'll be available to ensure a seamless transition. Looking back at the past five years, I'm incredibly proud of what we've accomplished together from a single product retargeting solution, which was in decline to a multi-functional platform addressing ad tech needs in the fastest growing sector of advertising, commerce media.

Our momentum is evident as we continue to deliver strong results with 2024 being our best year to date. We've become the platform of choice for the buying and selling of commerce media with promising prospects for the future. We've come a long way from that point solution business. It's been an incredible journey, and as I pass the baton, I do so with excitement for what I know that Criteo can achieve.

Let me start off by sharing our top-level results for '24. Our high saving ratio and strong execution have translated into double-digit growth for the third consecutive year, while also expanding our adjusted EBITDA margin for the second consecutive year. These record results reflect the outstanding work of our teams who are driving us forward every day. A highlight for us was the shift of our top-line mix where we wrapped up 2024 with our retail media business exceeding $250 million in revenue.

We bolstered our position as the leading independent retail media ad tech provider and continued to gain market share in 2024 with a remarkable 31% year-over-year growth in media spend, which translated to above $1.5 billion. Our momentum keeps building. If I zoom out and focus on Criteo's strategy, we're laser-focused on bringing together our most powerful asset. From our legacy of best breed performance targeting to our direct access to thousands of websites that attract consumers along their buyer journey to our privileged access to retailer data and premium inventory we've developed a commerce media platform that seamlessly consolidates the buying and selling of commerce-focused ads at scale.

The flexibility of our platform to extend beyond traditional audience reach and enter ROI and attribution at scale is the promise that Criteo can make. To deliver high ROI optimized attribution, measured consistently and to industry standards is our direction, a direction that will propel digital advertising to the next level. Our strategy is focused on ensuring a unified commerce experience, which is central to the future of advertising. With two decades of commerce AI, and rich data from our supply and demand side partners, we deliver targeted ads throughout the buyer journey from discovery to purchase.

Our goal is to empower advertisers with full-funnel strategies that reach shoppers across multiple channels, optimize performance, and seamlessly integrate first-party data for enhanced personalization and to activate it all through the pretty commerce media platform. We've successfully elevated and differentiated our positioning in the market, and we're proud to have major enterprise clients like Macy's now utilizing all parts of our platform to meet their needs. This includes our demand side capabilities with commerce growth and commerce Max, and our supply side solutions through commerce grids and commerce yield. Our holistic commerce media value proposition, independence, and AI-driven best-in-class performance are our key differentiators.

Importantly, our platform value proposition positions us to win with agencies which continue to be a strategic channel for us. Our agency business growth outpaced the growth of the rest of our business in 2024, and we expect to accelerate further on this momentum. We're excited to see that our major whole agencies increasingly leverage our comprehensive commerce media platform as an enterprise play. We're thrilled to announce the recent renewal and expansion of our three-year U.S.

partnership with a leading holding agency to now become a global strategic deal leveraging more of our platform's powerful commerce solutions. Our expanding agency relationships are a testament to the value of our strategic focus and industry-leading capabilities. When it comes to retailers, we understand their needs and we are proud that they trust Criteo with more ad placements, ads formats, first-party data than ever. As we highlighted during our retail media update, we have a unified offering set up for scale.

We've created a flywheel, meaning the more retailers we partner with, the more brands we attract. Our multifaceted demand strategy helps brands and agencies scale, while our modular approach and professional services supports retailer's growth in the fastest-growing advertising channel. We recently secured significant new retailer partnerships worldwide as part of our strategic, exciting strategic collaboration with Microsoft advertising, and we're happy to announce five new retailer wins across regions. Those retailers are expected to launch in the first half of 2025.

Meanwhile, we're making great progress with our tech integration with Microsoft advertising on the demand side, and we look forward to testing beginning in the first half of the year. In EMEA, we're thrilled to announce a new partnership with Harrods in the U.K., expanding our presence in the luxury department store category. We delivered another quarter with over $150 million in agency spend going through our commerce Max DSP in the U.S. alone resulting in more than 50% growth with U.S.

holding agencies in 2024. Our strengths in retail media has been largely driven by our work in powering sponsored ads for our clients, and we see this as an on-ramp for newer formats that represent a growing opportunity. These include display ads, video and offsite advertising. Retailers benefit most when they take a holistic approach to their media strategy, and that's exactly what our platform enables.

Most recently, we launched new onsite formats including display with Albertsons and Giant Eagle and video ads with Costco and Douglas. We've also been seen an uptick in the adoption of retail media offsite campaigns where retailers extend their advertising reach across the open web. We have about 30 retailers now participating in this opportunity with Criteo, including the recent edition of one of Europe's leading toy retailers, Joue Club. Meanwhile, we're pleased to see that 3,500 brands are now leveraging our platform globally to reach shoppers across multiple retailer sites.

In 2024, we added 1000 brands, which is three times the number of brands we added in 2023. Our retail media business continues to perform well with strong growth in a leading market position we feel great about our progress. Now turning to performance media, we delivered strong growth in commerce audiences up 32% this year. While retargeting Bruce slightly.

Retargeting represents 40% of our business as we exited 2024, compared to close to 90% of our top line in early 2020. Today, we are positioned at the forefront of the changes in our industry. We believe we are prepared for any scenario and we no longer plan our business around the deprecation of third-party cookies. The combination of our advanced AI and unique access to commerce data to achieve high-performance outcomes for clients has enabled us to secure more targeting budgets with a strong track record of delivering the performance our clients demand with the ideal partner to execute full funnel strategies and drive measurable results at every stage of the buyer journey.

We're encouraged by our recent success in capturing budgets from traditional open web, upper funnel DSP. Our advertisers are seeing benefits when they plan, buy and optimize across multiple channels, including open web and social. In Q4, we saw a 45% sequential increase in media spend allocated to our social campaigns as we help our clients and reach with performance. Both Facebook and Instagram, we're excited to expand our offering beyond retargeting, enabling advertisers to activate Meta inventory at the SKU level for our audit, our commerce audience campaigns in 2025.

Our testing for commerce audiences shows a significant performance uplift with Meta's large-scale inventory and powerful communities. So we're moving to general availability this quarter. With social proving to be an effective channel for bringing commerce recommendations and experiences to consumers we plan to expand into more social environments in the future. Our AI innovation fuels our growth and continues to set the stage for our future success.

In 2024, we saw significant advancements in AI-driven performance as our Criteo AI lab has continued innovating to optimize campaigns and unlock additional budgets. Commerce GO is our next-generation AI-powered automation and optimization toolset. It's designed to make campaign creation and management faster and easier and was rolled out in Q4. We're rapidly advancing toward a self-service model to drive scale, enabling clients to launch a campaign in just size flex.

Our clients value the easy setup and are pleased with the results they're getting. As our advanced AI automates decisions around audiences, channels, ad formats, and created to maximize results. We're off to a great start and very pleased with the activation of hundreds of campaigns with Commerce GO, since the beginning of Q4, we've seen great adoption with small clients driving more than half of our Commerce GO revenue, and this is expected to remain a big area for us in 2025. As Criteo enters 2025, we're focused on growing our scale through cross-selling, upselling, and the expansion of our strategic partnerships to fully harness commerce media.

We see the ongoing convergence of commerce and advertising as an opportunity to shape the future of advertising by leveraging our massive commerce data 20 years of AI expertise and innovative ad formats to drive product discovery, engagement, and sales. Powered by our AI engine, which processes trillions of intent signals, we deliver personalized product recommendations across 5 billion SKUs, enhancing the shopping experience, increasing basket sizes, and maximizing sales for clients. We are operating from a position of strength with the best competitive position we have ever had. We're excited to see the opportunities ahead and confident in our strategy to drive sustainable, profitable growth and shareholder value.

Everything we've achieved has been a true team effort driven by our talented Criteos and valued clients. And I personally want to express my deepest gratitude to our investors for your unwavering support. The foundation we've built is stronger than ever, and with Michael at the helm, I believe Criteo is well-positioned to continued growth and success. With that, I'll turn the call over to Sarah, who will provide more details on our financial results and our outlook.

Sarah Glickman -- Chief Financial Officer

Thank you, Megan, and good morning, everyone. We delivered record results in 2024 with double-digit growth, significant margin expansion, and strong cash flow generation. Starting with our financial highlights for 2024, revenue was $1.9 billion and contribution ex-TAC grew by 11% at constant currency reaching over $1.1 billion. In retail media, revenue was $258 million, and contribution ex-TAC was $254 million up 25% year over year at constant currency.

As we continue to expand with our retailers' brands and agency partners. In performance media, revenue was $1.7 billion and contribution ex-TAC was $868 million, up 8% at Constant Currency. This includes 32% growth in commerce audiences due to client's continued strong adoption of our AI-powered targeting solutions and a 2% increase in retargeting over last year. We delivered a strong adjusted EBITDA margin of 35%, up 500 basis points year over year, driven by operating leverage, enabled by top-line growth and greater operational productivity while we continue to invest in fueling our future growth.

We delivered free cash flow of $182 million up 65% year over year. This represents 47% of adjusted EBITDA. Our adjusted net income increased 40% year over year to $268 million, and adjusted EPS was up 44% to $4.57 in 2024. Turning to our fourth quarter, performance revenue was $553 million, and contribution ex-TAC was $334 million.

This includes a year-over-year headwind from foreign currencies of $5 million, mainly reflecting the weakening of the Euro against the U.S. dollar. A constant currency Q4 contribution ex-TAC grew by 7%, primarily driven by a 23% growth in retail media. Performance media was up 3% year over year with commerce audience targeting up 15% year over year, and 75% on a two-year stack basis partially offset by lower retargeting and AdTech services and supply down 2% and 4% respectively.

After a slower start to the quarter retargeting went back to growth in December. Overall, we have continued to benefit from a broad and diverse client base and high client retention of close to 90%. As mentioned during our investor event in November, we saw trends normalize after the U.S. election and our team performed exceptionally well during their holiday season.

This followed a temporary distortion in the advertising market caused by the political advertising cycle. As a reminder, Criteo as a commerce media platform has no political advertising spend. Turning to our business segments, in retail media revenue was $92 million and contribution ex-TAC grew 23% at constant currency to $90 million on top of 29% growth last year. Our growth was driven by continued strength in retail media on site, and an uptick in offsite campaigns.

Growth from existing clients was strong, with same retailer contribution ex-TAC retention at 126% driven by multi-year contracts and exclusive partnerships with most of our retailer clients. We had another exceptional holiday season and saw advertising spend grow in all categories during the traditional Cyber 6 peak. During Cyber 6, media spend grew 37% for our 10 largest retailers and the number of brands advertising across our network increased by close to 20% compared to last year. Given our outside performance during the holiday period, late in the quarter, we benefited from higher fees for achieving annual volume thresholds of three and a half thousand global brands, including the addition of 400 new brands in Q4 are prioritizing retail media as a key channel for their investments to reach relevant audiences and sell more products.

We also experienced significant momentum with agencies through our multi-year partnerships with agency whole coast. In performance, media revenue was $461 million and contribution ex-TAC was $244 million up 3% of constant currency. We had successful cyber week and source sustained to management throughout December, which has continued into the beginning of this year. We benefited from our latest AI-driven performance optimization, which drove a contribution ex-TAC uplift in the double-digit million range gained this quarter.

Some end markets did incredibly well, while others experienced a more challenging backdrop. Travel remains our fastest-growing vertical up an impressive 46% followed by classified and retail. Within retail fashion was down 1% offset by solid trends in categories such as consumer products and sorry, consumer electronics and Hobby and Leisure. We delivered strong growth in commerce audiences up 15% with over 80% of our media spend from clients using both commerce audiences and retargeting to reach consumers across the entire buyer journey.

We also saw some budget shifts to broader campaigns resulting in lower retargeting and higher commerce audiences. Lastly, AdTech services was down 4%, a significant sequential improvement following a dip in performance in Q3, reflecting proactive actions we have taken to mitigate the impact of reduced spending by a major ad tech client in our media trading marketplace. We delivered an adjusted EBITDA of $144 million in Q4 2024, non-GAAP operating expenses increased 12% driven by planned growth investments, partially offset by our continued focus on productivity, a slower pace of hiring for investment roles, lower bad debt expense due to strong cash collections and lower than expected social charges for our RSUs. Overall expenses were also lower due to a foreign exchange rate benefit on our Euro-based costs.

Moving down the P&L depreciation and amortization increased by 11% in Q4 2024 and share-based compensation expense was $22 million including $4 million related to shares granted to Iponweb's founder. Our income from operations was $95 million in Q4 2024, and our net income was $72 million up 16% year over year. Our weighted average diluted share count was 57.6 million. This resulted in diluted earnings per share of a $1.23.

Our adjusted diluted EPS was a $1.75 in Q4 2024, up 15% year over year. We canceled a total of 3.6 million shares in 2024, including 1.4 million shares canceled in Q4. We benefit from a strong financial position with solid cash generation and no long-term debt. We had about $782 million in total liquidity as at the end of December, which gives us significant financial flexibility to execute our growth and capital allocation strategy.

We generated strong free cash flow of $182 million in 2024, up 65% year over year, including $146 million in the fourth quarter. We continue to have a disciplined balanced capital allocation strategy, our priority to invest in high ROI investments to enable organic growth and value-enhanced acquisitions and to return capital to shareholders via our share buyback program. In 2024, we deployed a record $225 million of capital, or 124% of our free cash flow for the year for share repurchases. This included 6 million shares repurchased at an average cost of $37.50 per share.

As of December 31, 2024, there was $44 million remaining under the current authorized share repurchase program and we shared this morning that the board increased our remaining share buyback authorization to up to $200 million. Our capital allocation strategy demonstrates our confidence in our business strategy, financial strength, and our ongoing commitment to enhance shareholder value. Turning to our financial outlook, which reflects our expectations as of today, February 5th, 2025. For 2025, we expect contribution ex-TAC to grow mid-single digits at constant currency with growth in each of our segments.

We are confident in our guidance for which we anticipate potential upside depending on the progress of key initiatives and new capabilities, integration of partnerships, and ramping of newer pride relationships. We will keep you abreast of our trajectory as we report throughout the year. We estimate Forex changes to drive a negative year-over-year impact of about $15 million to $20 million on contribution ex-TAC for the full year. In Retail Media, we expect to continue to grow rapidly from a scaled $250 million revenue base.

We expect media spend to grow faster than the market as we anticipate further share gains. We forecast 20% to 22% growth in contribution ex-TAC at constant currency. We have deep integration with retailers and our retail media playbook is expected to drive durable growth and scale across our network. As you know, we successfully completed the transition of our largest client to a direct sales model in 2024, and our 2025 guidance reflects the remaining impact until we fully lap the gradual transition in the later part of the year.

We expect continued strong momentum across our client base and look forward to ramping up our partnerships with Microsoft advertising retailers. We expect contribution ex-TAC to grow low single digits for Performance Media as we anticipate continued traction in our suite of solutions to drive performance for advertisers throughout the prior journey from product discovery to purchase despite lapping significant AI-driven performance enhancements from 2024. We're excited about our platform innovation and look forward to ramping up Commerce GO over the course of the year while continuing to see benefits from our AI-driven optimization focused on expanding client budget and gaining share and scale by driving superior outcomes. We continue to review our disclosures to ensure they align with how we operate our business our go-to-market strategy and as we enter the next chapter in our transformation.

We no longer plan our business around a deprecation of third-party cookies. This, along with over 80% of client budgets, not leveraging multiple solutions throughout the buyer journey means that we will no longer isolate the Retargeting tactic when discussing our financial performance going forward. We have disciplined in strategically allocating our research to higher growth areas while enabling productivity and cost efficiencies. In 2025, we are investing in high ROI initiatives that are incremental to our Commerce Media platform, enabling both scale of media spend and optimization of our operating model.

Overall, we anticipate an adjusted EBITDA margin of approximately 33% to 34% for 2025. This reflects disciplined cost management while investing for the future growth of our Commerce Media Platform including scaling retail media capabilities and continued investments in AI innovation and performance. It also includes the cost of a companywide internal event planned for Q2, representing 1 percentage point of adjusted EBITDA margin. This is a high ROI investment in our teams and at an ideal time with Michael joining as our new CEO, and as Criteo celebrates his 20th anniversary as a company.

As demonstrated in previous years, we prioritized high-return investments that lead to strong growth enabling margin expansion. We anticipate that the investments we are making this year will position us for continued top-line growth and strong cash flow generation for the coming years. We expect a normalized tax rate of 22% to 27% under current rules. Consistent with prior years, our overall capex is expected to be between $90 million and $100 million as we continue to invest and optimize our leading AI infrastructure.

We expect a free cash flow conversion rate of about 45% of adjusted EBITDA before any nonrecurring items. And for modeling purposes, we assume a flat number of shares outstanding in 2025. We're off to a solid start in January. For Q1 2025, we expect contribution ex-TAC $256 million to $260 million growing 3% to 5% at constant currency.

At the midpoint, this represents growth of 21% on a two-year stack basis. We are lucky lapping a tougher comparison in Q1 2024 as the prior year period, including the benefits of the -- sorry, leap day and an earlier Easter, which accounted for 2 percentage points of growth in Q1 2024 and won't repeat this year as well as significant AI-driven performance enhancement. We estimate forex changes to drive a negative year-over-year impact of about $5 million to $7 million on contribution ex-TAC in Q1. We expect adjusted EBITDA between $68 million and $72 million in a seasonally low quarter.

In closing, as a global commerce media powerhouse. We believe we are well-positioned to deliver continued growth, robust profitability, and strong cash generation to drive shareholder value in 2025 and beyond. And with that, I will open up the call for questions. Do we have any calls coming in?

Questions & Answers:

Operator

[Operator instructions] The first question comes from Ygal Arounian of Citi. Please go ahead.

Ygal Arounian -- Analyst

Hey. Good morning, team. I'm sorry, I want to double check, Michael is on the call right for Q&A?

Megan Clarken -- Chief Executive Officer

No, no he's not.

Ygal Arounian -- Analyst

He's not. OK. All right. So well, Megan, congrats on the accomplishments here at Criteo and good luck on retirement and next steps from here.

We'll miss you here. And so, as you exit just a bigger picture retail media question, just maybe what the surprises were in 4Q on the strength? And then as we think about next year, gross media spend take rates and the biggest drivers of retail media how we should be thinking about all of that? I know you had it in the prepared comments but just expand on that a little bit more.

Megan Clarken -- Chief Executive Officer

Yeah. Let me do this in a couple of ways. I'll open it up pretty big picture. Actually, I'll pass it first to Todd to talk about the sorts of things he's here and in the market space around retail media because it's hot, as you know, and then any color financially sector.

We're in the right place at the right time. And before the call, I was saying to the team how far ahead of the market, I believe now, given how long we've been doing this, how hard it is, the progress we've made the client base that we had either those plants that have feel very secured to us, given the work that we're doing with them. The competitive cost, meaning the lack of competitors that we've seen in the marketplace compared to when we started this. And what's lost on a lot of people is how hard it is to get there.

So when we -- when I talk about the five-year story here, that's how far ahead we are. And so, for companies wanting to move into the space, they have to catch up. And we were delighted to be asked by Microsoft last year to basically partner with them for or their retail media play because they wanted to focus on other things. So I feel terrific Michael feels thick.

The entire company is leading into this opportunity is our clients. And we're hearing more and more in the marketplace about the opportunity that is retail media and not just it is today, but what it will be tomorrow as it resort of embraces what it has to offer with scale. And the last thing I'll say because I'll give this to Todd. I talked a lot in the opening remarks about the holistic view of advertising with retailers being a big part of that and Criteo's ability to provide precision performance, ROI, attribution.

All of these things are things that don't come easy. But we have them -- we provide them and once again being ahead of the market, a market that's asking for those expenses just have a fantastic important position to leading time.

Todd Parsons -- Chief Product Officer

Yes, I can add to that, Ygal, nice to hear from you. I think there are only a couple of points to make in addition. One we are tracking very well with our agency and large brand spend relationships. As I think everyone knows, our relationships with the holding companies and agencies are relatively new and they're beginning to bear fruit as we gain share and momentum with each of those ships.

In the course of managing those partnerships, we have several different product solutions, which give demand paths or gross media spend to increase over time. Obviously, we have Commerce Mac, which is growing. We also have begun to gain traction with our commerce grid solution, which serves the agency's other choices of DSPs. So a combination of our product mix and our relationships is really putting a bloom on media spend overall.

And we're set up for handsome growth as the years unfold as Megan said.

Sarah Glickman -- Chief Financial Officer

So I can just take the financial question. The vertical for Retail Media Q4, we had an exceptional quarter. So very proud of that, obviously, driven by significant media spend coming into our network, including about 40% -- 6% increase year on year in the Americas. For the Cyber 6, we grew across our largest retailers.

We saw the number of brands advertising going up 20% year over year. One of the key reasons why we were higher than our expectation as we triggered some higher fees for achieving annual volume thresholds that happened late in the quarter -- that will also slightly benefit Q1 2025. So just exceptional performance by the team and -- as we go into 2025, we're in a fantastic positioning. We have the strong growth from the $250 million base from 2024 as we talked about in the, we are looking at retail media to roll to food business.

So we're doing all the things right. We're investing in fuel of the future. We have sort of continued to sign global portfolio. We continue to see spend coming in from other categories into this space.

And in terms of the guidance, 20% to 22%, 2025 and really represents lapping a pretty spectacular year as well as, of course, some of the known changes we made this year with the largest retailer as well. So very, very excited where we are, where we're going and we see this fueling our growth for the foreseeable future.

Ygal Arounian -- Analyst

Great. I got triple answer to that question. I feel a little bit bad asking a follow-up, but just maybe just real brief on the margin profile and outlook, was there also any to onetime things in 4Q given how big deal that was relative to expectations. And as we think about next year, even with the 1 point drag you pointed out, you're well ahead of the margins you set out at the 2022 Investor Day.

How do you think about the margin opportunity, growth and investments? Thanks.

Sarah Glickman -- Chief Financial Officer

Yeah. So in terms of the Q4 adjusted EBITDA, which was also a fantastic result, about $3 million of that came from the top-line outperformance and operational leverage. About $5 million of that is from the weaker euro. So we, as you know, have a significant technology base in Europe, and so we benefited from the -- from FX there.

And also, just lower people cost, we are -- we had a pretty high ask in terms of incremental investments, in particular in R&D. And just with Q4 and people who are holding until, I guess, to bonus the season and then coming -- they are coming more in Q1 versus Q4. So some of that is timing. And also, we had a spectacular traction in our collections processes.

There's just been a build year over year over year. So just lower DSO for long as ever, actually, for our Performance Media businesses that also resulted in lower bad expense. That was about $4 million, too. And then I think you were asking me -- did you also ask about 2025?

Ygal Arounian -- Analyst

Yeah. Just how you think about kind of margins, but you know, we're taking up a lot of time. Yeah. I'm happy to make it quick and move on to others.

Thank you.

Sarah Glickman -- Chief Financial Officer

OK. Great. Thank you.

Operator

Thank you. Our next question comes from Mark Kelley of Stifel. Please go ahead.

Mark Kelley -- Analyst

Great. Thank you very much and Megan, congrats. Looking forward to hear what you are going to do in retirement. It's been a pleasure working with you.

Two quick questions. One, I would love to hear your thoughts on Amazon retail service and just, I guess, the puts and takes as they'd like to maybe try to compete with you a bit more? And then second, on the bid switch, headwinds in Q4. It sounds like you took some actions to kind of fix whatever the issue was. Is that something we can expect to go forward? Or does that large ad tech partner maybe revert back to older behaviors that were a little bit more favorable? Thank you.

Megan Clarken -- Chief Executive Officer

Thanks, Mark. Firstly, thanks for your comments, and I will surely call you and tell you what I get up to in retirement. Great question. So the -- both I'm going to hand them off to folks.

But let me start with sort of the Amazon -- Amazon 1, and I'll take it from a high level, and then to we'll dig into that -- on the bid switch side, we have taken some actions. The business is certainly performing there, it has a better 2025 profile that so I'll pass it across to Sarah to give some color on that. On Amazon, this is a -- I think they have three clients that are -- it's a very small client base on to enservice. It is a very long tail play way long today.

It doesn't focus on our client base and Retail Media. And Retail Media, we are more at the top of town, the 225 clients that we have are focused on very specific things and for the most part, what we hear from our clients is a relevance to partner with Amazon for to provide the service because they compete against Amazon and b, there is a notion that if there's another offer available it certainly pays to the spring service around. So not just not have all eggs in one basket, which is some is something that our clients, not just on the retail side or the brand side, are aware of. And so, this one is -- all of these things are always worth looking out for, but it really does touch a different part of the market than where we service and we're going to continue to do what we do at the higher end of the market base that we have.

Todd, do you want to add some color?

Todd Parsons -- Chief Product Officer

I can add a couple of things to that, Mark. Nice to hear from you. First of all, just to emphasize what Megan said, our product suite is built with neutrality and interoperability between the entire landscape of retail media in mind. And that's directly opposed to Amazon's positioning.

So it's challenging for them, as Megan said, to get into the market, especially with data sharing concerns that exist for small retailers and large retailers alike. But our neutral position is very important. On top of that, from a product perspective, we take a modular approach in serving retailers of those 225 that are focused today, which can be easily ported to the long tail. So the coverage of our product mix, which goes well beyond Amazon's focus on sponsored products here with this offering, is important to point out because we are covering the full page with video and display and sponsored products for our retailers.

As I said, that is affordable solution. And of course, we cover off site as well. So the scope of our solution, the fact that we are neutral and the fact that we can take that to a different part of the market as it matures and grows as an opportunity is our option. And that is a very good place to be in today relative to what you're seeing from Amazon.

Sarah Glickman -- Chief Financial Officer

I can just take on the AdTech Services. Yes, I mean, the biggest challenge for 2024 was technology that play out, training moved basically in-house, if you will. But we've taken a lot of mitigation actions here. And we do have customers in those that are accelerated moving into new platforms and formats.

We're doing programmatic trading for CTV. So there's been a number of actions in this business, but ultimately -- and ultimately, we will lap those large AdTech players in 2025. So the right actions on the top line, but also importantly, on the bottom line. So overall, we look at our entire business as a rule of 40, we look at how do we ensure we have the right resources and investments going into the right place and we continue to see strong operational leverage across all our businesses from the top line to the bottom line.

Mark Kelley -- Analyst

Very helpful. Thank you very much.

Operator

Thank you. Another question comes from Mr. Mark Zgutowicz. Please go ahead, sir.

Mark Zgutowicz -- Analyst

Thank you. Good morning, Megan and Sarah. Really nice upside on the retail media take rate at least relative to our expectations. And I was just curious how much of that benefit or upside that you saw in fourth quarter was sort of lapping that large client transition that I think you may be lapping here now? And then how meaningful or off-site volumes in terms of driving that take rate relative to on-site efficiencies that you continue to see? Thanks.

Sarah Glickman -- Chief Financial Officer

Yeah. I mean, first all, for the most part, we saw significant growth in on-site sponsors. So that was certainly the area that's of sweet spot, and that's what we saw significant growth. That being said, we also saw ramping up in our site.

But for sure, on-site sponsored is where most of the budgets are going, and certainly, we're going during the holiday season. As you know, we don't comment on specific clients. So I'm not going to give specifics on clients, but we have a blended take rate and the upside was from two things. One was the -- just a spectacular growth, I would say, across the client base and with new clients ramping up.

And then second, those tiered fees for beating annual thresholds. And as I said, in Americas, we were at a 46% media run rate increase year on year. So that was good enough. That will bleed into 2025.

We do see a resilient take rate overall. And I would also look to some of the comments we took at the retail media event where we talked about a resilient take rate. Our continued assumption is that we have continued strong media spend above market, and in particular, in Americas as well, given that's our largest market. and that we have retail media take rates above the mid-teens.

Mark Zgutowicz -- Analyst

Thanks, Sarah. And if I could perhaps ask just one unrelated question related to Microsoft. Just curious how much that was contemplated, the contribution there in your either first quarter or annual guide? Thanks.

Sarah Glickman -- Chief Financial Officer

Yeah. In terms of overall contribution, with every some of that is baked into the plan for 2025. It's progressing well. And we do see that some retailers will start to launch in the first half, I would say, for Q1, likely really let or no impact, but ramping up going into the second half.

Mark Zgutowicz -- Analyst

Great. Thanks very much.

Sarah Glickman -- Chief Financial Officer

Thank you.

Operator

Thank you. Another question comes from Mr. Richard Kramer of Arete. Please go ahead, sir.

Richard Kramer -- Arete Research -- Analyst

Thanks for being very refreshingly forthright and not just promotional on --

Sarah Glickman -- Chief Financial Officer

Sorry, Richard, we cannot hear you, I'm sorry. Can we maybe move to the next question, and then we'll bring Richard back in? No, sorry, Richard, we can't hear you. So we'll bring you back in. Can we maybe go to the next question and then we'll bring Richard back in?

Operator

OK. So our next question comes from Mr. Tom White of D.A. Davidson.

Please go ahead, sir.

Tom White -- Analyst

Great. Thanks. One quick one for Sarah and then a quick one for Megan. I guess just on the guidance.

You mentioned potential kind of upside opportunities. I guess after Microsoft and kind of the ramp of that sort of the pace of that roll off. Can you maybe just enumerate maybe one or two things that would be potential meaningful upside drivers in '25. And then Megan, again, congrats on the retirement.

You made comments in the prepared remarks about agencies increasingly viewing Criteo as sort of an enterprise play. Could you maybe just quickly elaborate on that what you meant there? Thank you.

Sarah Glickman -- Chief Financial Officer

In terms of -- well, first of all, I would say, Michael is coming in the next weeks. And so, we do see potential. He's certainly looking for us to have another spectacular year. What's going to our guidance is, I would say, continued traction across the board seeing the new capabilities on our product road map going into the second half.

And where we see potential upside would be places like Commerce GO. We're in beta testing now and it's been a terrific, terrific upstart and to move that across the base of our client base, we see -- we do see some potential upside on that. But obviously, we're not at that stage and we do have a lot of new capability coming into our product road map that will be more toward the end of 2025 going into 2026. And obviously, there's a lot of focus on velocity on ensuring that those updates come in as quickly as they can, but they take time to build right and Todd, I know you wanted to add some commentary as well.

Todd Parsons -- Chief Product Officer

Yeah. I think maybe just to reemphasize what I said earlier in response to Ygal's question, which is agencies have now a view of Criteo, which gives them three paths for them to get into the commerce media space and to retail media. Sarah just mentioned Go as being a very promising, very automated view of that world that competes with Advantage Plus and Performance Max, which are increasingly getting taken up by agencies. In addition, we do have a commerce-focused DSP, which gives a trading function in an agency the ability to plan, buy, and measure their retail media budgets across retailers.

And then, of course, we have Commerce Grid, which is our SSP offering that will service the DSP of choice if it isn't Commerce Max and the agency all of which is to say that we can be seen as an enterprise-level partner and are being seen that way with agencies in many ways like Google, but incredibly focused on commerce, all day, every day.

Tom White -- Analyst

Thank you.

Operator

Thank you. We now have Richard Kramer from Arete Research. Please go ahead, sir.

Richard Kramer -- Arete Research -- Analyst

Can you hear me now? OK. Sorry about that. equipment failure, Megan, thank you for being refreshingly fourth right, not just promotional and your communication over the years. I guess my question for you is given the comments on the agencies and the two-year contracts.

When you leave now, what sort of portion of a 2025 budget or forecast is now broadly covered for the start of the year? And sort of what sort of visibility do you have in the business relative to a few years ago? I have a follow-up for Todd. Megan mentioned the meta with respect to partnerships. And recently, your code was seen in Ads.txt files at Pinterest. Can you speak to sort of what specific competitive edge you would get, whether it's in performance or margins of getting access to much wider pools of inventory and all this social inventory alongside the retailer or website inventory you've got in retail media? Thanks.

Megan Clarken -- Chief Executive Officer

Thanks, Richard. Let me just start with this one and then because it's about financial planning. I'm going to pass the cost to Sarah. But we have a pretty rigorous process in terms of how we get through our plan every year.

It's a top-down bottom-up process. We look client by client. We look at client contracts that run across the year and those that need renewing through the year. we look at opportunities.

We look at the ROI that we attribute to investments made in the prior year or years or anything that is an investment that will be -- that is being made that will roll out in the current year where a business like any other business that does their financial planning for the year, and we try to get as much insight into those numbers. as we possibly can and, of course, weigh out sort of the risks and opportunities on the way through. But to me at a high level, you throw it to Sarah for a bit more color.

Sarah Glickman -- Chief Financial Officer

Yeah. Well, first, I mean, I think you've actually said it. The -- a lot of the agreements are signed. Obviously, then we have to focus on the spend coming in.

What we did see Q4 was that we continue to see spend coming into retail media and reading other players earnings even in the last day that's clearly where the money is going, and that's where we are. In terms of the plan itself, it is based client by client with growth rates kind of associated kind of year on year. We also know expectations for whether -- for our clients and what growth they want. So it is a detailed plan.

We have, I would say, baked into that all the known clients an expectation of new clients coming in, ramp-up of new capability and clearly some, I would say, some degree of caution knowing that every single quarter and every single year, we just have business and business happens, and there are some puts and takes within that. And that also gets factored in. So we feel good about -- very confident about the overall guidance for Criteo. In terms of retail media.

We had a spectacular year this year including Q4. So it's certainly, I would say, a tougher budget for retail media with a lot of things that need to get right in terms of new capabilities, the Microsoft partnership, etc., the could be potential upside to that as well.

Todd Parsons -- Chief Product Officer

Richard, nice to hear from you. On the question about meta and social in general, just want to go back to the fact that it continues to be our objective to help retail and direct selling clients to meet consumers, customers, their customers where they are. and where they're most likely to discover new products, consider them and buy them through the buyer journey. So that continues to be the mantra.

The promise that we're making product wise is not just to do that but importantly, to be able to hold performance outcomes constant across those channels in a way that makes it much easier for a buyer to get what they want which is an acquired customer that has a higher lifetime value to get their product discovered for the first time.And so, what we're doing is making sure that we're not just reaching new channels, but we are making sure that they perform at a constant rate relative to one another or we reallocate dynamically budgets across them. So that's the competitive advantage that we have. It's not just a channel play. It's an outcome play across channels.

And that's very unique to our company.

Richard Kramer -- Arete Research -- Analyst

OK. Thanks, Todd. Thanks, Megan.

Operator

Thank you. Our final question will be coming from Mr. Brian Pitz of BMO Capital Markets. Let's go ahead.

Brian Pitz -- Analyst

Thank you and I echo the congratulations to Megan on retirement. Sarah, in the prepared remarks, I believe you mentioned possible guidance upside depending on some internal strategic initiatives. Can you provide additional insights there? And also, I think you have 30 retailers leveraging retail media off-site campaigns. Any sense on the spend you see from these clients versus those not using off-site and what you need to do to drive more clients to the off-site campaigns? Thank you.

Sarah Glickman -- Chief Financial Officer

I mean, the strategic initiatives actually relate to everything that we're doing for 2025. So that was a broad statement in terms of we have very deliberately put investments in place to drive new areas of growth. I think Todd spoke about some of those, but we feel we're in a unique position with a large broad client base on Performance Media as well as retailer and these investments across the base for that. So that -- it really relates to the traction on all those initiatives.

And obviously, with Michael coming in, we are laser-focused working with him to ensure that we execute on those. So the upside is that we want to have another great year of growth of another three years of double-digit growth. and we will be highly focused on ensuring that those initiatives will come to market successfully launch a traction in terms of adoption as well.

Todd Parsons -- Chief Product Officer

I'd just add to that, Brian. I mentioned before, we're covering the entire buyer journey with our capabilities, off-site is a channel for retailers, which can be cheap reach. Otherwise, their partners that buy it. aren't going to be that interested in over time.

So for us, driving dollars to audit is really about helping a retailer be sure that they're providing their brand partners with something that isn't cheap reach. That's an effective way to either find new buyers for a product that they're stocking or driving traffic that is considering those products off-site and being able to attach those KPIs very clearly to a purchasing event or a set of purchasing events so that incrementality is achieved. And that is incredibly important. In terms of growing the channel, that's going to be about how each retailer sits in their maturity and how they're packaging their wares, their data, their audiences, and their inventory for brands that are buying with their networks.

So we look at it more holistically then we look at it as simply offsite versus on-site. This is very much a dynamic that we're built to serve all, not one.

Brian Pitz -- Analyst

Great. Thank you.

Melanie Dambre -- Vice President, Investor Relations

Thank you, Megan, Sarah, and Todd. This now concludes our call for today. Thanks, everyone, for joining. The Investor Relations team is available for any other questions.

Have a nice day.

Operator

[Operator signoff]

Duration: 0 minutes

Call participants:

Melanie Dambre -- Vice President, Investor Relations

Megan Clarken -- Chief Executive Officer

Sarah Glickman -- Chief Financial Officer

Ygal Arounian -- Analyst

Todd Parsons -- Chief Product Officer

Mark Kelley -- Analyst

Mark Zgutowicz -- Analyst

Richard Kramer -- Arete Research -- Analyst

Tom White -- Analyst

Brian Pitz -- Analyst

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Criteo (CRTO) Q4 2024 Earnings Call Transcript was originally published by The Motley Fool