Ad tech company Criteo's business was supposed to get destroyed by Apple and European regulators - yet it just had a killer quarter

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Criteo president and COO Eric EichmannCriteo

  • French ad tech company Criteo took everyone by surprise when it crushed its 2017 fourth quarter earnings on Wednesday.
  • The firm, which specializes in zapping ads to people on the web after they've been searching or shopping for specific items, seemed to be in deep trouble only weeks ago.
  • Apple had just made it much harder to use cookies to target people using its Safari browser. And European regulators were promising to make it harder to use data for digital advertising overall.
  • But Criteo, for its part, said that it was ready to tackle GDPR.


French ad tech company Criteo set off fire alarms in the ad tech world late last year when it announced lower revenue guidance for 2018 and its stock price plummeted.

So naturally, everyone was surprised when Criteo crushed its 2017 fourth quarter earnings on Wednesday. In fact, it's stock price jumped nearly 30% on the news.

And even more surprisingly, executives told Business Insider they are bullish on the company's prospects in the coming year.

Criteo has been considered the rare ad tech player that had successfully gone public. Yet the firm, which specializes in zapping ads to people on the web after they've been searching or shopping for specific items, suddenly seemed to be in deep trouble only weeks ago.

Apple had just made it much harder to use cookies to target people using its Safari browser. And European regulators were promising to make it harder to use data for digital advertising overall.

Then company on Wednesday posted stellar results for 2017, reporting a year-on-year revenue increase of 28%. Total global revenue for the quarter totalled a record $674 million, a 19% increase on the $567 million the firm raked in during the same period last year.

"Our business is seeing strong momentum, in particular in the US," said Eric Eichmann, Criteo's CEO. "This good traction, combined with the growing adoption of our new products, positions us well for 2018 and beyond."

Still, while Criteo may have had a record quarter, the ad tech company may face increasing headwinds ahead.

The rollout of the "General Data Protection Regulation" or GDPR in the European Union as well as recent changes to ad tracking in Apple's web browser, in particular, could deliver significant blows to the company.

Starting in May, GDPR will require tech companies to get affirmative consent from any information they gather on users, and many ad tech experts think European companies like Criteo could become casualties.

Meanwhile, Apple's "Intelligent Tracking Prevention" feature has significantly limited ad tracking in Safari, limiting third-party access to "cookies" on users' devices that advertisers use to target and measure their ads.

Unfortunately for Criteo, the company has built its business on the back of "retargeting," or using technology to serve ads to people who have already visited a website to remind them to return to that site. And retargeting relies heavily on cookies tracking users as they hop from one website to another on the internet. Combined, GDPR and ITP could yield significant blows to the company, denting its future revenue.

But Criteo, for its part, said that it was ready to tackle GDPR. In fact, while the rollout of ITP had affected its third quarter revenue, it seems to have had little effect on the fourth quarter. Instead improved technology, client wins and better access to inventory helped its strong fourth quarter performance, said Eichmann

Criteo isn't worried abut GDPR, because it has viewed "cookie coverage" as a key area for years, per Eichmann. The company has basically tried to get as many sources of data on web users and their surfing habits as possible, so one browser making a change wouldn't damage its business severe rly.

Eichmann said that a lot of the data that Criteo obtained from consumers was anonymized anyway, and not sensitive personal data, so Criteo did not expect GDPR to have a negative impact on its revenue.

"We are not very concerned about GDPR," Eichmann told Business Insider. "We don't see it having any real impact on our business."

On the issue of Apple's moves, he said that even though Safari may have implemented greater restrictions, Criteo's footprint was far bigger.

"We identify and track 100% users on desktop, mobile, Chrome and other browsers," he said.

At the same time, analysts and industry insiders continue to remain cautious regarding Criteo's future. Dan Salmon, an analyst at BMO Capital, for instance, downgraded Criteo's stock to "market perform" in January because of GDPR.

"If GDPR implementation is materially negative, the stock will likely be headed to the teens," he said to clients.

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