Core Viewpoint - Momentum investing focuses on following a stock's recent price trends, aiming to buy high and sell even higher, with the expectation that established trends will continue [1] Company Analysis: Criteo S.A. (CRTO) - Criteo S.A. currently holds a Momentum Style Score of A, indicating strong momentum characteristics [3] - The company has a Zacks Rank of 2 (Buy), suggesting it is positioned for potential outperformance in the market [4] - Over the past week, CRTO shares have increased by 19.77%, significantly outperforming the Zacks Internet - Software and Services industry, which rose by 2.44% [6] - In a longer time frame, CRTO shares have gained 15.02% over the past quarter and 38.94% over the last year, while the S&P 500 has only moved 1.46% and 22.28%, respectively [7] - The average 20-day trading volume for CRTO is 469,139 shares, indicating a bullish sentiment as the stock is rising [8] Earnings Outlook - In the past two months, three earnings estimates for CRTO have been revised upwards, with no downward revisions, leading to an increase in the consensus estimate from $4.32 to $4.61 [10] - For the next fiscal year, three estimates have also moved upwards, indicating positive sentiment regarding future earnings [10] Conclusion - Given the strong momentum indicators and positive earnings outlook, Criteo S.A. is recommended as a stock to consider for near-term investment opportunities [12]

Core Viewpoint - Criteo S.A. (CRTO) has shown a significant price increase of 18.2% over the past four weeks, with a mean price target of $55.90 indicating a potential upside of 27.1% from the current price of $43.99 [1] Price Targets and Analyst Estimates - The mean estimate consists of 10 short-term price targets with a standard deviation of $10.04, indicating variability among analysts; the lowest estimate is $36 (an 18.2% decline), while the highest is $68 (a 54.6% increase) [2] - A low standard deviation suggests a high degree of agreement among analysts regarding the stock's price movement direction, which can serve as a starting point for further research [7] Earnings Estimates and Market Sentiment - Analysts have shown increasing optimism about Criteo's earnings prospects, with a strong consensus on higher EPS estimates, which correlates with potential stock price increases [9] - Over the last 30 days, three earnings estimates have been revised upward, leading to a 15.6% increase in the Zacks Consensus Estimate [10] Zacks Rank and Investment Potential - Criteo currently holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate factors, indicating strong potential for near-term upside [11] Conclusion on Price Targets - While the consensus price target may not reliably indicate the extent of potential gains, it does provide a useful guide for the direction of price movement [12]

Core Insights - Criteo's stock experienced a significant increase of up to 23.1% following a strong earnings report, ultimately closing with a gain of 17.9% [1] Financial Performance - Criteo's adjusted Q4 revenues increased by 6% year-over-year, reaching $334 million, while adjusted earnings rose by 15% to $1.75 per diluted share, surpassing Wall Street expectations of $1.37 per share on revenues of approximately $332 million [2] Business Segments - The retail media segment showed particularly strong performance, with an influx of new clients and enhanced network effects, indicating continued growth in brand-building tools that began in 2022 [3] Future Outlook - Criteo's partnership with Microsoft is highlighted as a key success, with expectations for 2025 to be a "spectacular year" driven by the integration with Microsoft and the introduction of new products [4] Stock Valuation - Following the recent stock price increase, Criteo shares have appreciated by 72% over the past year, and the stock is considered relatively inexpensive, trading at 9.8 times forward earnings and 14 times free cash flows, suggesting potential for further investment [5]

Financial Data and Key Metrics Changes - Criteo S.A. reported record revenue of $1.9 billion for 2024, with contribution ex-TAC growing by 11% at constant currency to over $1.1 billion [37] - Adjusted EBITDA margin improved to 35%, a 500 basis point increase year-over-year, driven by operational leverage and productivity [38] - Free cash flow reached approximately $182 million, up 65% year-over-year, representing 47% of adjusted EBITDA [39] Business Line Data and Key Metrics Changes - Retail media revenue was $258 million, with contribution ex-TAC growing by 25% year-over-year at constant currency [38] - Performance media revenue was $1.7 billion, with contribution ex-TAC increasing by 8% at constant currency, driven by a 32% growth in commerce audiences [38][41] - Retargeting represented 40% of the business as of the end of 2024, down from nearly 90% in early 2020 [27] Market Data and Key Metrics Changes - Retail media business saw a remarkable 31% year-over-year growth in media spend, exceeding $1.5 billion [13] - In the Americas, retail media spend increased by 46% year-over-year [87] - The number of brands advertising across Criteo's network grew by close to 20% compared to the previous year [45] Company Strategy and Development Direction - Criteo is focused on enhancing its commerce media platform, integrating AI-driven solutions, and expanding partnerships with retailers and agencies [15][34] - The company aims to empower advertisers with full funnel strategies and optimize performance through first-party data integration [17] - Criteo's strategy includes a modular approach to serve various retailers, enhancing its competitive positioning against Amazon [106] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's positioning within the retail media space, highlighting the competitive advantages gained over the years [81] - The outlook for 2025 anticipates mid-single-digit growth in contribution ex-TAC, with potential upside from new capabilities and partnerships [56] - Management noted that the company is no longer planning around the deprecation of third-party cookies, reflecting a shift in strategy [61] Other Important Information - Criteo's capital allocation strategy includes a focus on high ROI investments and returning capital to shareholders through share buybacks, with $225 million deployed for repurchases in 2024 [54][55] - The company has a strong financial position with approximately $782 million in total liquidity and no long-term debt [53] Q&A Session Summary Question: Insights on retail media strength in Q4 and future drivers - Management highlighted the exceptional performance in retail media driven by significant media spend and the number of brands advertising, with expectations for continued growth in 2025 [87][89] Question: Margin profile and outlook for 2025 - Management indicated that Q4 adjusted EBITDA benefited from top-line outperformance and operational leverage, with expectations for continued strong margins despite some headwinds [93][96] Question: Competitive landscape with Amazon - Management noted that Amazon's new retail ad service targets a different market segment and that Criteo's neutral positioning and comprehensive product suite provide a competitive edge [102][106] Question: Contribution from Microsoft partnership - Management confirmed that contributions from the Microsoft partnership are included in the 2025 guidance, with some retailers expected to launch in the first half of the year [121] Question: Visibility into 2025 budget and competitive edge from wider inventory access - Management emphasized a rigorous planning process for 2025 budgets and the competitive advantage gained from access to a broader pool of inventory, including social media platforms [145]

Core Insights - Criteo S.A. reported revenue of $334.4 million for Q4 2024, marking a year-over-year increase of 5.7% and exceeding the Zacks Consensus Estimate of $327.03 million by 2.25% [1] - The company's EPS for the quarter was $1.75, up from $1.52 a year ago, representing an EPS surprise of 28.68% against the consensus estimate of $1.36 [1] Financial Performance Metrics - Total revenue for the quarter was $553.04 million, which fell short of the average estimate of $578.41 million, reflecting a year-over-year decrease of 2.3% [4] - Revenue from Traffic Acquisition Costs (TAC) was reported at $218.64 million, significantly lower than the estimated $251.37 million, indicating a year-over-year decline of 12.5% [4] - Contribution revenue excluding TAC was $334.40 million, surpassing the estimate of $327.03 million, with a year-over-year increase of 5.7% [4] - Retail Media revenue reached $91.89 million, exceeding the average estimate of $84.95 million, and showing a robust year-over-year growth of 20% [4] - Performance Media revenue was reported at $461.15 million, below the average estimate of $485.66 million [4] Client and Geographic Revenue Insights - Criteo's client count increased to 17,269, surpassing the estimated 17,155 [4] - Geographic revenue breakdown showed: - Americas: $274.62 million, slightly below the estimate of $277.88 million, with a year-over-year decline of 2.1% [4] - APAC: $95.04 million, above the estimate of $94.35 million, reflecting a year-over-year decrease of 1.4% [4] - EMEA: $183.37 million, below the estimate of $198.39 million, with a year-over-year decline of 3.1% [4] Stock Performance - Criteo's stock has returned -1.2% over the past month, contrasting with the S&P 500 composite's increase of 1.7% [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

Financial Performance - Q4 2024 revenue was $553 million, a decrease of 2% year-over-year, while gross profit increased by 9% to $301 million[2]. - Fiscal year 2024 revenue totaled $1.9 billion, a decrease of 1% year-over-year, with gross profit rising 14% to $983 million[6]. - Net income for Q4 2024 was $72 million, or $1.23 per diluted share, representing a 16% increase from Q4 2023[8]. - Adjusted EBITDA for fiscal year 2024 was $390 million, a 29% increase year-over-year, with an adjusted EBITDA margin of 35%[17]. - Revenue for Q4 2024 was $553,035, a decrease of 2% compared to $566,302 in Q4 2023[49]. - Gross profit increased by 9% year-over-year to $300,971 in Q4 2024, up from $276,626 in Q4 2023[55]. - Adjusted EBITDA for Q4 2024 reached $144,008,000, a 4% increase from $138,645,000 in Q4 2023, while for the full year, it increased by 29% to $390,118,000 from $301,798,000[61]. - Adjusted net income for Q4 2024 was $100,840,000, an 11% increase from $90,905,000 in Q4 2023, and for the full year, it increased by 40% to $267,867,000 from $191,299,000[65]. Contribution and Profitability Metrics - Contribution ex-TAC for Q4 2024 was $334 million, up 6% year-over-year, and increased by 7% at constant currency[5]. - Retail Media Contribution ex-TAC grew 25% year-over-year at constant currency in 2024, with a retention rate of 128%[3]. - Contribution ex-TAC for Q4 2024 was $334,399, a 6% increase from $316,376 in Q4 2023[55]. - Contribution ex-TAC is a profitability measure akin to gross profit, which is crucial for evaluating operating performance and making strategic decisions[33]. Cash Flow and Capital Management - Cash flow from operating activities for Q4 2024 was $169 million, with Free Cash Flow of $146 million[19]. - Free Cash Flow is defined as cash flow from operating activities less net acquisition of intangible assets, property, plant, and equipment, indicating the company's ability to generate cash[36]. - The company deployed $225 million for share repurchases in 2024, with an increased remaining share buyback authorization of up to $200 million[4]. - The Board approved an increase in the share repurchase program from up to $630 million to up to $805 million[29]. - The company plans to continue its stock purchase program based on market conditions and other factors, with no minimum purchase requirement[30]. Balance Sheet and Assets - Total assets decreased from $2,391,549 thousand as of December 31, 2023, to $2,266,449 thousand as of December 31, 2024, representing a decline of approximately 5.2%[47]. - Cash and cash equivalents decreased from $336,341 thousand in 2023 to $290,693 thousand in 2024, a reduction of about 13.6%[47]. - Trade receivables increased from $775,589 thousand in 2023 to $800,859 thousand in 2024, reflecting an increase of approximately 3.2%[47]. - Total current liabilities decreased from $1,140,117 thousand in 2023 to $1,046,600 thousand in 2024, a decrease of about 8.2%[47]. - The company reported a decrease in total equity from $1,111,391 thousand in 2023 to $1,081,097 thousand in 2024, a decline of approximately 2.7%[47]. Operational Metrics - Client count declined by 5% YoY to 17,269, with a slight increase of 1% QoQ from 17,162[73]. - Headcount decreased by 2% YoY to 3,507, with a minimal increase of 0.1% QoQ from 3,504[73]. - Days Sales Outstanding increased by 4 days QoQ to 62 days, compared to 65 days in the previous quarter[73]. Market and Growth Outlook - For fiscal year 2025, the company is targeting mid-single-digit growth in Contribution ex-TAC at constant currency[24]. - The company has a significant focus on market expansion and innovation, with forward-looking statements indicating expectations for future growth opportunities[40].

Core Insights - Criteo S.A. appointed Michael Komasinski as the new Chief Executive Officer, effective February 15, 2025, succeeding Megan Clarken [22][23] - The company deployed a record $225 million for share repurchases in 2024, with the remaining share buyback authorization increased to $200 million [8][27] - Criteo is targeting mid-single-digit growth in Contribution ex-TAC for 2025 [24][32] Financial Highlights - For Q4 2024, revenue was $553 million, a decrease of 2% year-over-year, while gross profit increased by 9% to $301 million [6][9] - Fiscal year 2024 revenue totaled $1.9 billion, down 1% from the previous year, with gross profit rising 14% to $983 million [7][13] - Net income for Q4 2024 was $72 million, up 16% year-over-year, and for the fiscal year, net income reached $115 million, a 110% increase [10][14] Non-GAAP Financial Metrics - Contribution ex-TAC for Q4 2024 was $334 million, reflecting a 6% year-over-year increase, while for the fiscal year, it was $1.1 billion, up 10% [6][13] - Adjusted EBITDA for Q4 2024 was $144 million, a 4% increase year-over-year, and for the fiscal year, it was $390 million, representing a 29% increase [11][15] - Free Cash Flow for Q4 2024 was $146 million, up 3% year-over-year, and for the fiscal year, it was $182 million, a 65% increase [17][35] Operating Performance - Retail Media Contribution ex-TAC grew 25% year-over-year at constant currency in 2024, while Performance Media Contribution ex-TAC increased by 8% [8][19] - The company expanded its platform adoption to 3,500 brands and 225 retailers, including Harrods [8] - Criteo's media spend was $4.3 billion in 2024, growing 5% year-over-year at constant currency [8][19] Shareholder Value Initiatives - The company demonstrated a commitment to shareholder value by increasing its share repurchase program from $630 million to $805 million [27][28] - The share repurchase program aims to limit future dilution for shareholders and fund potential acquisitions [27][28]

Company Leadership Transition - Criteo S.A. has appointed Michael Komasinski as the new Chief Executive Officer, effective February 15, 2025, succeeding Megan Clarken, who is retiring [1][2] - Komasinski brings over 20 years of experience in AdTech and has a proven track record of driving growth and managing global organizations [2][3] Strategic Vision and Goals - The Board of Directors emphasizes the need for a leader to spearhead Criteo's AI-fueled transformation and enhance its position as a leading Commerce Media Platform [2] - Komasinski expressed excitement about the growth opportunities in media driven by advancements in AI and the rise of e-commerce, aiming to deliver compelling commerce solutions and drive shareholder value [3] Background and Experience of New CEO - Komasinski has held significant roles at dentsu, including CEO of the Americas and President of Global Data & Technology, where he led technological transformations and integrated AI into products [2][3] - He has extensive experience in retail media and has previously overseen a large workforce at Merkle, contributing to his leadership capabilities [3] Company Overview - Criteo is a global commerce media company that connects marketers and media owners to enhance consumer experiences from product discovery to purchase [4] - The company supports an open internet through impactful advertising, fostering innovation and choice for consumers [4]

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