So I’m in the slow process of giving some of my older stocks a once over to see what I can sell to redistribute funds. I’ve recently changed brokers which has opened up a lot more variety!
CRTO. I haven’t had a look at it since Sept-2015!!! Wow time flies. I know Saul got out around then when growth seemed to stagnate as they kept putting more and more money into R&D. All my notes were in Euros, but they changed reporting currency to dollars in June 2015. Going back over the yearly 10-ks, this has created some discrepancies in the EPS for the 2015 quarters. I imagine due to fluctuating ForEx.
Q4 summary:
Q4 revenue increased 43%, or 43% at constant currency,1 to $567 million.
Fiscal year revenue increased 36%, or 36% at constant currency, to $1,799 million.
Hopefully someone can double check my numbers.
Revenue ex-TAC (millions dollars)
Year Q1 Q2 Q3 Q4 total
2013
2014
2015 118 122 134 160 534
2016 162 166 177 225 730
diluted EPS (dollars)
Year Q1 Q2 Q3 Q4 total
2013
2014
2015 .20 .05 .08 .58 0.91
2016 .26 .19 .21 .59 1.25
Number of Clients
Year Q1 Q2 Q3 Q4
2013
2014 7,190
2015 7,832 8,564 9,290 10,198
2016 10,962 11,874 12,882 **14,468**
02/03/2015
Stock Price: 48.57
TTM $: 1.25
PE: 38.86
1YPEG: 1.04
Stock price appreciation YTD: 17.5%
R&D spent (millions)
2014 60
2015 87
2016 124
Annual Report March 2017:
http://app.quotemedia.com/data/downloadFiling?webmasterId=10…
30 pages on risk factors make grim reading! I didn’t make it all the way through but basically saying if the ability of their Criteo Engine fails to accurately predict user engagement (their whole business), and they don’t adapt, then they’re in trouble. I suppose it’s like saying if the google search engine fails to provide accurate searches, google won’t do so well.
90% customer retention rates
Largest client represents 2.0% of revenue
Largest 10 represent 11.8%. Therefore they aren’t reliant on big customers.
Functional currency remains the euro despite reporting in dollars. Therefore subject to ForEx fluctuations.
Revenue ex-TAC by region for 2016
Region Revenue (millions)
Americas 279
EMEA 286
Asia-Pacific 164
R&D mostly personnel costs; 600 people: expect to increase but remain constant % of revenue
Sales and OpEx to increase, but decrease over time as a % of revenue. Same with General admin expense.
For the year ended December 31, 2016, over 77% of our Revenue ex-TAC was derived from clients whose budgets were either uncapped or so large that the budget constraint did not restrict purchases of
advertisements by us. In addition, existing advertiser clients continue to increase their advertising spend with us as illustrated by our 120% revenue retention rate for Criteo Dynamic Retargeting for the year ended December 31, 2016, demonstrating our ability to drive revenue expansion within our existing client
base.
One final note. Criteo reports that their adjusted net income per diluted share for 2016 has increased 51% to $2.08. That’s quite a big difference from non-adjusted EPS of $1.25. The largest adjustment comes from “Equity awards compensation expense”, which was approximately half of net income. So they’ve taken a net income of 87 million, and adjusted it to $136 million for 2016. That paints a very different picture in regards to growth and 1YPEG.
Hopefully someone can chip in with what they think of that. Equity awards compensation expense almost doubled from the previous year, and will increase as criteo expands in search of more revenue.