Criteo S.A.CRTO
Criteo S.A. Fair Value Disclosure
Categories of Financial Assets and Financial Liabilities
Financial assets
| Year Ended December 31, | |||||||||||
| 2021 | 2020 | ||||||||||
| (in thousands) | |||||||||||
| Trade receivables, net of allowances | $ | 581,988 | $ | 474,055 | |||||||
| Other taxes | 73,388 | 69,987 | |||||||||
| Other current assets | 34,182 | 21,405 | |||||||||
| Marketable securities | $ | 55,299 | $ | 41,809 | |||||||
| Non-current financial assets | 6,436 | 18,109 | |||||||||
| Total | $ | 751,293 | $ | 625,365 | |||||||
Credit Risk
We maintain an allowance for estimated credit losses. During the years ended December 31, 2021 and 2020, our net change in the allowance for credit losses was $(5.5) million and $(23.8) million, respectively.
For our financial assets, the fair value approximates the carrying amount, given the nature of the financial assets and the maturity of the expected cash flows.
Trade Receivables
Credit risk is defined as an unexpected loss in cash and earnings if the client is unable to pay its obligations in due time. We perform internal ongoing credit risk evaluations of our clients. When a possible risk exposure is identified, we require prepayments.
As of December 31, 2021 and 2020, no customer accounted for 10% or more of trade receivables.
Financial liabilities
| Year Ended December 31, | |||||||||||
| 2021 | 2020 | ||||||||||
| (in thousands) | |||||||||||
| Trade payables | $ | 430,245 | $ | 367,025 | |||||||
| Other taxes | 60,236 | 58,491 | |||||||||
| Employee - related payables | 98,136 | 85,272 | |||||||||
| Other current liabilities | 39,523 | 33,390 | |||||||||
| Financial liabilities | 1,002 | 3,275 | |||||||||
| Total | $ | 629,142 | $ | 547,453 | |||||||
The fair value of financial liabilities approximates the carrying amount, given the nature of the financial liabilities and the maturity of the expected cash flows.
Fair Value Measurements
We measure the fair value of our cash equivalents, which include interest bearing deposits, as level 2 measurements because they are valued using observable market data.
Financial assets or liabilities include derivative financial instruments used to manage our exposure to the risk of exchange rate fluctuations. These instruments are considered level 2 financial instruments as they are measured using valuation techniques based on observable market data.
Derivative Financial Instruments
Derivatives consist of foreign currency forward contracts that we use to hedge intercompany transactions and other monetary assets or liabilities denominated in currencies other than the local currency of a subsidiary. We recognize gains and losses on these contracts in financial income (expense), and their position on the balance sheet is based on their fair value at the end of each respective period. These instruments are considered level 2 financial instruments as they are measured using valuation techniques based on observable market data.
| Year Ended December 31, | |||||||||||
| 2021 | 2020 | ||||||||||
| (in thousands) | |||||||||||
| Derivative Assets: | |||||||||||
| Included in other current assets | $ | 60 | $ | — | |||||||
| Derivative Liabilities: | |||||||||||
| Included in financial liabilities - current portion | $ | — | $ | 925 | |||||||
The fair value of derivative financial instruments approximates the carrying amount, given the nature of the derivative financial instruments and the maturity of the expected cash flows.
Marketable Securities
The following table presents for each reporting period, the breakdown of marketable securities:
| December 31, 2021 | December 31, 2020 | ||||||||||
| (in thousands) | |||||||||||
| Securities Available-for-sale | |||||||||||
| Term Deposits | $ | 22,652 | $ | 24,538 | |||||||
| Securities Held-to-maturity | |||||||||||
| Term Deposits | $ | 32,647 | $ | 17,271 | |||||||
| Total | $ | 55,299 | $ | 41,809 | |||||||
The gross unrealized gains or (loss) on our marketable securities were not material as of December 31, 2021.
For our marketable securities, the fair value approximates the carrying amount, given the nature of the term deposit and the maturity of the expected cash flows. The term deposit is considered a level 2 financial instruments as it is measured using valuation techniques based on observable market data.
The following table classifies our marketable securities by contractual maturities:
| Held-to-maturity | Available-for-sale | ||||||||||
| December 31, 2021 | |||||||||||
| (in thousands) | |||||||||||
| Due in one year | $ | 27,647 | $ | 22,652 | |||||||
| Due in one to five years | $ | 5,000 | $ | — | |||||||
| Total | $ | 32,647 | $ | 22,652 | |||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2021 | Feb 25, 2022 | Showing above |
| 2020 | Feb 26, 2021 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.