Digital marketing expert Criteo (NASDAQ:CRTO) reported fantastic third-quarter results on Wednesday morning, sending shares as much as 32.3% higher. By 12:25 p.m. EDT, the stock had cooled down slightly to a gain of 28.4%.
Criteo's sales after subtracting traffic acquisition costs (ex-TAC revenue) rose 13% year over year in the third quarter to $211 million. Your average analyst would have settled for $205 million. On the bottom line, adjusted earnings increased by 60% to $0.64 per diluted share. Here, the analyst consensus called for earnings of $0.36 per share.
The company added more than 400 net new clients during the quarter, bringing its total to 22,000 customers. The media spending under Criteo's management stopped at $615 million, 23% above the year-ago period's reading as measured in constant currencies. Sales were flat in the Americas but Criteo's business is booming in the Asia-Pacific and Europe, Middle East, and Africa (EMEA) regions.
This impressive pop is a welcome change from the negativity that has surrounded Criteo in recent months. The stock is still trading 15% below the 52-week highs of June and July as investors worry about the impact of the advertising technology changes in Apple's iOS and Alphabet's Chrome platforms. Criteo's management is less concerned with these technical challenges because the company saw them coming a mile away.
"We've been working on alternative solutions to iOS and Chrome for over two years and are confident in our position today," said CEO Megan Clarken in this morning's earnings call. "We started our transformation journey years ago and believe we're ahead in the race to drive superior performance and environments deprived of third-party identifiers."
And the beat goes on. This report extends a long streak of positive earnings and revenue surprises, and it's easy to make the argument that analysts generally underestimate this company. The financial results certainly support Clarken's rosy analysis and investors are embracing the stock today.