It's safe to say Criteo (CRTO 7.27%) shareholders weren't feeling the sluggishness of Hump Day. Collectively, they traded up the shares of the France-based adtech company after it posted its latest earnings report, leaving them with a nearly 1% gain at market close. That compared favorably to the slight decline of 0.1% posted by the S&P 500 index that trading session.
Crushing second-quarter estimates
For its second quarter, Criteo -- which reports in U.S. dollars -- earned $483 million, which was a 2% improvement over the same period of 2024. Going in the opposite direction was non-GAAP (adjusted) net income; this fell to $51 million ($0.92 per share) from the year-ago profit of $64 million.
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Despite the bottom-line decline, both headline fundamentals crushed the consensus analyst estimates. On average, pundits tracking Criteo stock were modeling slightly over $275 million for revenue, and merely $0.71 per share for adjusted profitability.
In its earnings release, Criteo revealed that its retail media revenue zoomed 11% higher. Lagging well behind that, however, was its sluggish (1%) growth from performance media.
A bullish move
Nevertheless, Criteo is bullish about its future, as indicated by its raised guidance. Its preferred internal profitability measure, contribution ex-traffic acquisition costs (TAC) -- basically, revenue minus such expenses -- is now expected to grow at a rate of 3% to 4% in 2024 over the previous year in constant-currency terms. Previously, the company was guiding for a flat to low single-digit percentage rise.
Despite its favoring of this unusual metric, the fact that Criteo is confident of its growth suggests it has more good, estimates-topping quarters in front of it. Although the investor reaction to the earnings was cautious, I feel those folks were justified in bidding up the stock on Wednesday.
