v3.25.4
Income Taxes
 12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
Income Taxes 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
Deferred Tax Expense
(Benefit)
574
(8,107)
(7,533)
(1,302)
(24,738)
(26,040)
634
(24,222)
(23,588)
Total Provision for
Income Taxes
$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