Shares of Criteo (NASDAQ:CRTO) rose on Thursday despite the advertising technology company warning about the impact of the novel coronavirus pandemic on its business. The stock was up about 18.9% at 12:30 p.m. EDT.
Like many companies, Criteo has withdrawn its guidance for fiscal 2020 due to the uncertainty surrounding the pandemic. For the first quarter, the company expects to miss its guidance for revenue excluding traffic acquisition costs due to the pandemic's impact on its clients, particularly in the travel vertical.
Criteo now expects first-quarter revenue, excluding traffic acquisition costs, between $204 million and $206 million, down from a previous range of $209 million to $212 million. Adjusted EBTIDA is now expected between $59 million and $61 million, higher than the previous guidance range of $55 million to $58 million.
Criteo has frozen all hiring and global travel expenses, and it's reduced spending on hosting, marketing, third-party services, and internal events to maximize profits and preserve cash. The company had $431 million in net cash at the end of March, and it has a 350-million-euro revolving credit facility that has not yet been drawn upon.
"The Company believes that its current liquidity position, combined with its expected cash-flow generation for the year, puts it in a solid position to weather the COVID-19 crisis under multiple scenarios," Criteo said in its business update.
While Criteo's first-quarter revenue will be lower than expected, the stock may be rallying because the market was expecting worse from the company. Shares have already tumbled this year, down 61% from their 52-week high including Thursday's rally. With rock-bottom expectations, Criteo's guidance update was enough to send the stock higher.