Criteo, now calling itself a performance marketing technology company, on Wednesday reported that fourth-quarter 2016 revenue increased 43% to $567 million, and fiscal-year revenue increased 36% to $1,799 million.
Amid a consolidating ad-tech sector, highlights for Criteo included:
--About 1,600 net clients were added in Q4 2016, including Criteo Sponsored Products, which surpassed 14,400 clients in total.
--Revenue ex-TAC (Traffic Acquisition Costs) from existing clients--live in Q4 2015 and still live in fourth-quarter 2016 — grew 20% at constant currency.
--Nearly 63% of revenue ex-TAC in Q4 2016, excluding Criteo Sponsored Products, was generated from mobile ads.
--Users matched through Criteo’s universal match technology generated 60% of revenue ex-TAC, reflecting advertisers placing e high value on matched users, the company said.
--Q4 revenue excluding traffic acquisition costs, or revenue ex-TAC grew 41%, to $225 million. Excluding Criteo Sponsored Products, formerly known as HookLogic, Q4 revenue ex-TAC grew 33% to $213 million, or 41% of revenue.
Fiscal year revenue ex-TAC grew 37%, to $730 million. Excluding Criteo Sponsored Products, fiscal year revenue ex-TAC grew 34% to $718 million, or 41% of revenue.
--Q4 net income increased 5% to $41 million, or 7% of revenue and 18% of revenue ex-TAC.
--Fiscal year net income increased 40% to $87 million, or 5% of revenue and 12% of revenue ex-TAC.
--Q4 Adjusted EBITDA3 increased 55% to $83 million. Excluding Criteo Sponsored Products, Q4 Adjusted EBITDA increased 46% to $78 million, or 15% of revenue and 37% of revenue ex-TAC.
--Q4 Free Cash Flow excluding Criteo Sponsored Products increased 15%, to $55 million.
--Fiscal year Free Cash Flow excluding Criteo Sponsored Products increased 31% to $82 million.
The company called out a highlight: It’s launch last fall of predictive search, which brings the company’s approach to the growing Google shopping market.
In addition, Criteo completed its acquisition of HookLogic last November. That company’s technology expands Criteo's business to brand manufacturers and strengthens its performance marketing platform for commerce and brands.
Criteo’s expectations and guidance for Q1 2017 include:
--Revenue ex-TAC is estimated to be between $200 million and $205 million.
--Adjusted EBITDA is expected to reach between $47 million and $52 million.
For fiscal year 2017, Criteo’s expectations are:
--Revenue ex-TAC growth is estimated to reach between 27% and 31% at constant currency.
--Adjusted EBITDA margin as a percentage of revenue ex-TAC is expected to increase between 0 basis point and 50 basis points.
Commenting on Criteo's earnings, Adam Berke, President and CMO, AdRoll told Real-Time Daily via email: "Criteo’s successful quarter is in line with what we would have expected given the demand we saw among our online retail customers in Q4. Marketers are seeking neutral platforms, outside of walled gardens, which allow them to achieve results across all possible digital channels." He added: "We’re seeing customers demand greater accountability for their marketing investments. They’re getting more sophisticated and evaluating results beyond last click. That’s where we see friction and pushback on Criteo’s solely click-focused approach. There’s certainly a place for clicks in marketing measurement, but that metric alone doesn’t tell the full story."