Shares of Criteo (CRTO 1.47%) reported fourth-quarter results on Wednesday evening. The report impressed investors enough to drive Criteo's shares as much as 28.1% higher on Thursday. By 1:45 p.m. EST, the stock had retreated slightly to a 24% gain.
The Paris-based provider of digital ad retargeting services saw fourth-quarter sales after traffic acquisition costs (ex-TAC) fall 5% year over year to $253 million. Adjusted earnings dropped from $1.08 to $0.98 per share. Your average analyst would have settled for ex-TAC sales near $228 million and earnings in the neighborhood of $0.76 per share. Management also set up revenue guidance well ahead of current analyst projections, both for the first quarter and full fiscal year of 2021.
Beyond the solid financial figures, Criteo explained that the company is less dependent on third-party browser cookies than ever before and is exploring several alternative ways to track the browsing and e-commerce purchasing habits of consumers. Criteo's stock crashed in 2019 as third-party cookies were given a sunset date by leading browser makers, throwing doubt over this company's future. Criteo's wide-ranging partnerships with advertisers and retailers has created a matchless database of web-shopping data points, and it is ready to go when the cookies fade away.
"In 2020 alone, our vast client relationships and processing power allowed us to ingest over $2.5 billion in daily transactions from over 21,000 commerce clients across 4 billion product SKUs and 3,500 product categories," Criteo CEO Megan Clarken said on the earnings call. "This data is established through direct and privileged integrations with our retailer clients, enabling cookie-less targeting and retargeting across our commerce media ecosystem."
That's the real rocket fuel behind today's surging share prices. As a Criteo shareholder myself, I'm thrilled to see the management team drawing up a detailed roadmap for the uncharted wilderness of ad retargeting operations without third-party cookies. This looks like a serious competitive advantage in the long run.