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Why Criteo Stock Soared Today

By Evan Niu, CFA - Apr 29, 2020 at 12:43PM

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The French ad-tech company reported first-quarter earnings results.

What happened

Shares of Criteo (CRTO 5.83%) have soared today, up by 8% as of noon EDT, after the company reported first-quarter earnings. The results beat expectations and the ad-tech specialist initiated a new share repurchase program.

So what

Revenue excluding traffic acquisition costs (ex-TAC) in the first quarter declined 13% to $206 million, slightly ahead of the $205 million that analysts were modeling for. That translated into net income of $16 million, or $0.52 per share. Wall Street was looking for $0.44 per share in profits. The ad-tech company said that the COVID-19 pandemic adversely impacted revenue ex-TAC by $10 million.

Green stock chart going up

Image source: Getty Images.

Adjusted EBITDA was $59 million, and Criteo reassured investors that it had ample liquidity to weather the public health crisis. The company had total financial liquidity of $820 million at the end of the quarter, including cash of $437 million and access to a 350 million euro ($380 million) revolver.

Now what

Criteo authorized a $30 million share purchase program, signaling the company's confidence in its financial position "while taking advantage of the attractive level" of current share prices. Repurchased shares will be allocated to equity obligations to employees in order to limit dilution from having to issue new shares.

Guidance for the second quarter calls for revenue ex-TAC of $140 million to $147 million, with adjusted EBITDA of breakeven to $7 million. Analysts are looking for $167.8 million in revenue ex-TAC in Q2. Criteo had previously withdrawn its full-year guidance, and noted that it expects the second quarter to see the worst impacts of the coronavirus outbreak.

Evan Niu, CFA has no position in any of the stocks mentioned. The Motley Fool recommends Criteo. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Criteo S.A. Stock Quote
Criteo S.A.
CRTO
$28.14 (5.83%) $1.55

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