Shares of Criteo SA (NASDAQ: CRTO) were up 23.8% as of 1:30 p.m. EST Wednesday after the advertising retargeting specialist announced better-than-expected fourth-quarter 2017 results.
More specifically, Criteo's quarterly revenue excluding traffic acquisition costs (ex-TAC) grew 23.1% year over year (20% at constant currency) to $276.9 million, and translated to 47% growth in adjusted net income to $82 million, or $1.21 per share. By comparison, when Criteo most recently updated its guidance in December, investors were told to expect lower revenue ex-TAC of between $260 million and $263 million. And Wall Street was anticipating lower adjusted earnings of $0.93 per share.
"Our business is seeing strong momentum, in particular in the U.S.," stated Criteo CEO Eric Eichmann. "This good traction, combined with the growing adoption of our new products, positions us well for 2018 and beyond."
To be sure, Criteo added 820 net clients in the quarter, bringing its customer base to over 18,000, while maintaining a client retention rate of nearly 90% across all products. What's more, Criteo's Direct Bidder technology is now connected to 1,500 large publishers, and its two new beta products launched this past October -- Criteo Customer Acquisition and Criteo Audience Match -- generated revenue ex-TAC of roughly $3 million in Q4.
For the first quarter of 2018, Criteo expects revenue ex-TAC of between $230 million and $235 million, which is comfortably ahead of consensus predictions for $207.5 million. And for the full year of 2018, Criteo sees revenue ex-TAC growth of between 3% and 8% at constant currency, comparing favorably to estimates for reported decline of more than 2%.
All things considered, there was little not to like about this strong showing from Criteo, which helps put to rest concerns over the prospect of new ad-blocking technology impeding Criteo's ability to drive growth. As such, it's no surprise to see investors so aggressively bidding up Criteo stock today.