Criteo Shares Drop As Q3 Contribution Lags Consensus; Slashes FY22 Outlook

  • Criteo S.A. CRTO reported a third-quarter FY22 contribution ex-TAC growth of 1% Y/Y to $213.4 million, missing the consensus of $226.9 million.  
  • Contribution ex-TAC from Marketing Solutions declined 13% to $158 million, Retail Media grew 28% Y/Y to $36.9 million, and Iponweb was $18.5 million.
  • Revenue decreased by 12% Y/Y, or 3% at constant currency, to $447 million.
  • Criteo's activated media spend rose 7% Y/Y in constant currency to $656 million.
  • Adjusted EBITDA was $50 million (-27% Y/Y. Adjusted EBITDA as a percentage of Contribution ex-TAC, or Adjusted EBITDA margin, was 24% versus 32% the previous year.
  • Non-GAAP EPS of $0.53 (-17% Y/Y), beating the consensus of $0.49.
  • Free cash flow decreased 39% Y/Y to $21 million.
  • CRTO held cash and equivalents of $407.32 million.
  • "I am pleased with our solid performance in the third quarter and our progress in integrating our acquisition of Iponweb, which is already helping to accelerate our product roadmap," said CEO Megan Clarken.
  • 4Q22 Outlook: Criteo sees contributions ex-TAC of $275 million - $280 million, below the consensus of $315.8 million. Adjusted EBITDA of $90 million - $95 million.
  • FY22 Outlook: Criteo now expects Contribution ex-TAC to grow by 10% - 11% at constant currency, down from the previous 11% - 14% at constant currency.
  • It sees an Adjusted EBITDA margin of ~28% - 29% of Contribution ex-TAC, down from the previous ~30% - 31%.
  • Price Action: CRTO shares traded lower by 1.18% at $24.78 on the last check Friday.
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