Criteo flaunts its retail wares as sell-off speculation mounts

By Ronan Shields

Criteo’s stock price continues to rise this week on the back of media reports that it has appointed advisors to explore a potential sale with The Trade Desk, or even Shopify earmarked as potential suitors.

And all of this is despite the France-based ad tech outfit Wednesday disclosing a 14% dip in its Q4 revenue ($564 million), a period that ended the 12 months to December 31 when annual revenues similarly fell 11% to $2.25 billion.

Buoyant stock price

Gross profit — $247 million for the quarter, and $795 million for the 12-month period — was largely flat with a respective 1% and 2% increase with C-suite executives at Criteo crediting a “challenging economic environment” during the period.

A closer look at the numbers reveals that “marketing solutions revenue decreased 19%” during the quarter while retail media revenue decreased 21%,” claimed the company in a statement.

Albeit, retail media contribution ex-TAC increased 19%, or 23% at constant currency, largely because of new client integrations and growing network effects of the platform.

Looking forward, the company forecasted revenues for the opening quarter of $210million-to-$216 million, or 5%-to-7% annually, with fiscal guidance for 2023 in the range of “high single-digit to low double-digit growth” in contribution ex-TAC.

Despite the depressed earnings numbers, Criteo’s stock price remained high compared to 24 hours earlier when a Feb. 7 report from Reuters maintained that it has appointed investment bank Evercore to explore a potential sale.

Even though Criteo’s C-suite expressly ruled out the prospect of discussing the latest reports of mergers and acquisitions, executives laid bare its assets that may prove attractive to potential suitors on its subsequent earnings call.

Who and why?

Although this hasn’t prevented industry observers from pondering the prospect of Criteo as a potential M&A target with both private equity and fellow independent ad tech players among the names thrown in the mix.

PE players have swooped for ad tech in the past two years with Vista Equity Partners’ $1.4 billion purchase of TripleLift and Bridgepoint’s investment in MiQ. Although given that Criteo’s market capitalization is currently north of $2 billion, any such buyout would be at the upper end of the scale.

Speaking earlier that week at AdExchanger’s Industry Preview, Arete Research’s Rocco Strauss speculated that the industry’s largest independent demand-side platform The Trade Desk or Shopify may be in the running.

The Trade Desk needs a play in retail media and Jeff Green needs another story than CTV

Principally, Criteo’s retail media footprint — ”an integrated self-service platform for all ad formats and demand sources now,” per CEO Megan Clarken — now consists of 175 retailers, and 1,800 brands would be the main attraction.

Speaking on Criteo’s Feb. 8 call with equities analysts, Clarken added, “Criteo is the commerce media platform for the open internet and the obvious choice to complement Amazon …read more

Source:: Digiday