Criteo S.A.CRTO
Criteo S.A. Income Taxes Disclosure
17. Income Taxes
Provision for Income Taxes
The components of income from continuing operations before income taxes and the related provision for income taxes,
disaggregated between domestic and foreign operations, are as follows:
Year Ended December 31, | |||||||||||
2025 | 2024 | 2023 | |||||||||
Domestic | Foreign | Total | Domestic | Foreign | Total | Domestic | Foreign | Total | |||
(in thousands) | |||||||||||
Pretax Income | $66,813 | $136,761 | $203,574 | $65,357 | $89,140 | $154,497 | $38,313 | $36,415 | $74,728 | ||
Current Tax Expense | 12,999 | 48,729 | 61,728 | 9,943 | 55,881 | 65,824 | 3,755 | 39,917 | 43,672 | ||
574 | (8,107) | (7,533) | (1,302) | (24,738) | (26,040) | 634 | (24,222) | (23,588) | |||
$13,573 | $40,622 | $54,195 | $8,641 | $31,143 | $39,784 | $4,389 | $15,695 | $20,084 | |||
In December 2021, the Organization for Economic Cooperation and Development (OECD) released Pillar Two Model Rules
defining the global minimum tax, which calls for the taxation of a minimum rate of 15% for multinational companies with
consolidated revenue above €750 million. Numerous jurisdictions have enacted or are in the process of enacting legislation
to adopt a minimum effective tax rate. As of December 31, 2025 and 2024, the adoption of Pillar Two resulted in an impact
of $0.7 million and $3.0 million respectively recognized in Provision for income taxes within the Consolidated Statement of
Operations. The Company will continue to assess the ongoing impact of Pillar Two as additional guidance becomes
available.
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted, introducing significant changes to both U.S.
domestic and international tax provisions. The legislation did not have a material impact on our income tax expense for the
year ended December 31, 2025 and did not have a material impact on our effective income tax rate.
Reconciliation of the French Statutory Income Tax Rate to the Effective Income Tax Rate
The following tables shows the reconciliation between the effective and standard French rate of 25.8% after the adoption of
ASU 2023-09 is as follows:
2025 | ||
(in thousands) | ||
Tax expense at French Statutory Rate | $52,563 | |
Increase / decrease in tax expense arising from: | ||
Nontaxable or nondeductible items | (828) | (0.4)% |
Income eligible to reduced taxation rate (1) | (9,273) | (4.6)% |
Changes in Unrecognized Tax Benefit | 10,359 | 5.1% |
Other | 3,368 | 1.7% |
Foreign Tax effects | ||
USA | ||
Statutory tax rate difference between U.S. and France | (3,709) | (1.8)% |
State and Local Taxes | 2,734 | 1.3% |
Nondeductible compensation | 3,541 | 1.7% |
Other | (62) | —% |
Germany | ||
State and Local Taxes | 3,204 | 1.6% |
Other | (710) | (0.3)% |
UK | ||
Valuation Allowance Release | (9,735) | (4.8)% |
Other | 459 | 0.2% |
Other Foreign | ||
Other | 2,284 | 1.1% |
Provision for Income Taxes | $54,195 | |
Effective tax rate | 26.6% | |
(1) Income eligible to reduced taxation rate refers to the application of a reduced income tax rate on the majority of the technology royalties income
A reconciliation of the provision for income taxes to the amount computed by applying the 25.8% French statutory income
tax rate to income before income taxes for years prior to the adoption of ASU 2023-09 is as follows:
Year Ended December 31, | |||||
2024 | 2023 | ||||
(in thousands) | |||||
Tax expense at French Statutory Rate | 39,891 | 19,295 | |||
Increase / decrease in tax expense arising from: | |||||
French Research Tax Credit, Crédit d’Impôt Recherche (“CIR”) | (1,809) | (2,376) | |||
Shared-based Compensation | 5,722 | 8,764 | |||
Non-tax deductible provision from loss contingency on regulatory matters (see Note 19) | — | (5,546) | |||
Nondeductible Expenses | 7,745 | 5,274 | |||
Non recognition of deferred tax assets | 366 | 878 | |||
Utilization or recognition of previously unrecognized tax losses | (5,839) | (1,760) | |||
French Business Tax "Cotisation sur la Valeur Ajoutée des Entreprises" ("CVAE") | 1,237 | 1,593 | |||
Income eligible to reduced taxation rate (1) | (5,795) | (4,341) | |||
Effect of different tax rates | 292 | (922) | |||
Other differences | (2,026) | (775) | |||
Provision for income taxes | $39,784 | $20,084 | |||
Effective tax rate | 25.8% | 26.9% | |||
(1) Income eligible to reduced taxation rate refers to the application of a reduced income tax rate on the majority of the technology royalties income
Deferred Tax Assets and Liabilities
The following table shows the changes in the major sources of deferred tax assets and liabilities:
Year Ended December 31, | ||||||
2025 | 2024 | 2023 | ||||
(in thousands) | ||||||
Net deferred tax assets : | ||||||
Intangibles including capitalized R&D costs | $53,599 | $49,296 | $24,340 | |||
Net operating loss carryforwards | 14,983 | 14,330 | 17,734 | |||
Personnel-related accruals | 9,834 | 10,104 | 9,958 | |||
Shared-based Compensation | 8,282 | 12,328 | 6,067 | |||
Tax Credits | 5,896 | 5,917 | 5,788 | |||
Bad debt allowance | 4,732 | 5,034 | 7,389 | |||
Other | 4,260 | 4,843 | 6,769 | |||
Other accruals | 2,797 | 2,708 | 3,346 | |||
Total Deferred Tax Assets | $104,383 | $104,560 | $81,391 | |||
Valuation allowance | (18,979) | (27,621) | (29,794) | |||
Total Deferred Tax Assets, net of valuation allowance | $85,404 | $76,939 | $51,597 | |||
Amounts recognized in our Consolidated Financial Statements are calculated at the level of each subsidiary within our
Consolidated Financial Statements. As of December 31, 2025, 2024 and 2023, the valuation allowance against net
deferred income taxes amounted to 19.0 million, 27.6 million and 29.8 million, respectively, which related mainly to Criteo
Corp. ($5.9 million, $5.9 million and $5.7 million, respectively), Criteo Brazil ($0.0 million, $0.0 million and $2.7 million,
respectively), Criteo UK ($0.0 million, $9.3 million and $10.7 million, respectively), Criteo Singapore ($0.0 million,
$0.0 million and $1.2 million, respectively), Criteo Australia Pty ($4.0 million, $2.9 million and $2.9 million, respectively) and
Criteo France ($9.0 million, $8.7 million and $5.0 million, respectively).
During the year ended December 31, 2025, the Company released a valuation allowance of approximately $9.7 million
related to deferred tax assets in the United Kingdom, primarily as a result of sustained profitability.
The Company mainly has net operating loss carryforwards in the U.S. for $35.4 million in various states, which begin to
expire in 2031 and net operating loss carryforwards in the United Kingdom for $30.4 million, which have no expiration date.
The company has $5.9 million of state R&D tax credits in the US, which can be carry-forward indefinitely.
Utilization of our net operating loss and tax credit carryforwards in the US may be subject to annual limitations due to the
ownership change limitations provided by the IRS Code 382 and similar state provisions. Such annual limitations could
result in the expiration of the net operating loss and tax credit carryforwards before their utilization.
As of December 31, 2025, we have not provided deferred taxes on unremitted earnings related to foreign subsidiaries. We
intend to continue to reinvest these foreign earnings indefinitely and do not expect to incur any significant taxes related to
such amounts.
Uncertain Tax Positions
The following table summarizes the activity related to our gross unrecognized tax benefits during the years ended
December 31, 2025, 2024 and 2023:
Year Ended December 31, | ||||||
2025 | 2024 | 2023 | ||||
(in thousands) | ||||||
Beginning balance of unrecognized tax benefits | $12,428 | $12,229 | $13,315 | |||
Increases (Decreases) related to current year tax positions | 10,344 | 199 | (1,086) | |||
Ending balance of unrecognized tax benefits (excluding interest and penalties) | 22,772 | 12,428 | 12,229 | |||
Interest and penalties associated with unrecognized tax benefits | 7,207 | 5,589 | 4,558 | |||
Ending balance of unrecognized tax benefits (including interest and penalties) | $29,979 | $18,017 | $16,787 | |||
During the year ended December 31, 2025, the Company recorded an unrecognized tax benefit of approximately $8.4
million related to certain income tax positions associated with stock-based compensation, based on management’s
evaluation of the relevant facts and circumstances as of December 31, 2025, in accordance with ASC 740.
The Company files income tax returns in France, the United States (at the federal and state levels), and various other
foreign jurisdictions, and is subject to income tax examinations by tax authorities in these jurisdictions. The Company is
currently under examination in France for the 2022 and 2023 tax years. Other tax years and jurisdictions remain subject to
examination under applicable statutes of limitations. The ultimate resolution of uncertain tax positions depends on the
interpretation of applicable tax laws and regulations and may be affected by future developments, including examination
outcomes, changes in facts and circumstances, or the expiration of applicable statutes of limitations. Management
evaluates uncertain tax positions based on the relevant risks, facts, and circumstances existing at each reporting date and
believes that the recorded liabilities adequately reflect these uncertainties. Actual outcomes may differ from management’s
estimates and could affect the Company’s effective income tax rate in future periods.
Cash Paid For Income Taxes
The following table presents the Company’s cash income taxes paid (net of refunds), including the total amount and
amounts paid in individual foreign jurisdictions that exceeded 5 percent of total cash income taxes paid:
Year Ended December 31, | |||||
2025 | 2024 | 2023 | |||
(in thousands) | |||||
Domestic | $1,806 | $614 | $2,382 | ||
Foreign | |||||
US | 47,660 | 29,376 | 28,840 | ||
Japan | 8,349 | 2,709 | 2,624 | ||
Spain | — | 5,184 | — | ||
Other Foreign | 7,115 | 2,822 | 6,281 | ||
Total | $64,930 | $40,705 | $40,127 | ||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 26, 2026 | Showing above |
| 2024 | Feb 28, 2025 | |
| 2023 | Feb 23, 2024 | |
| 2022 | Feb 24, 2023 | |
| 2021 | Feb 25, 2022 | |
| 2020 | Feb 26, 2021 | |
| 2019 | Mar 2, 2020 | |
| 2018 | Mar 1, 2019 | |
| 2017 | Mar 1, 2018 | |
| 2016 | Mar 1, 2017 | |
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.