Shares of Criteo (NASDAQ:CRTO) were down 13% as of 1 p.m. EDT Tuesday after the ad-retargeting specialist announced solid first-quarter 2019 results but reduced its full-year outlook.
More specifically, quarterly revenue excluding traffic acquisition costs, or ex-TAC, declined 2% as reported (but increased 2% at constant currencies) to $236 million, above Criteo's guidance for revenue ex-TAC between $233 million and $235 million. That translated to adjusted net income of $40 million, or $0.60 per share, flat from the same year-ago period and above most investors' expectations for earnings of $0.44 per share.
In February, it seemed that Criteo was making significant headway in its transition to a multiproduct platform with more recurring revenue. CFO Benoit Fouilland even teased that the fourth quarter of 2018 marked "an inflection point in [Criteo's] trajectory," adding that the company expected "positive momentum in 2019 driven by healthy fundamentals and [its] broader multisolution platform."
Now, however, Criteo is taking a more conservative view.
"While making progress on several priorities, we recognize 2019 is another transition year," said CEO JB Rudelle. "We are working hard to accelerate our transformation."
As such, due to delays executing some of Criteo's new capabilities, the company expects second-quarter revenue ex-TAC to be between $221 million and $224 million (down from $230.2 million in last year's second quarter), assuming constant-currency growth of flat to negative 2%.
For the full year of 2019, Criteo sees revenue ex-TAC arriving anywhere from flat to up 2% at constant currency from 2018, which is down from its previous outlook for between 3% and 6% growth. Criteo continues to expect 2019 adjusted EBITDA margin of roughly 30% of ex-TAC revenue.
Considering our market hates being told to effectively hurry up and wait, it's no surprise to see Criteo stock responding in kind.