Recent CRTO discussion regarding currency

Hi all,

There has been some interesting discussion regarding CRTO on an older thread:
http://discussion.fool.com/crto-q4-and-fy-2014-analysis-31660570…
The discussion focussed on currency issues and how it might impact the stock price.

I am offering a few clarification points, to highlight the merits and de-merits of this investment that may get muddled in the currency discussion:

  1. CRTO trades at NASDAQ and it isn’t listed anywhere else. No ADR issues here.

  2. CRTO’s US business is growing rapidly, and so is the business in Asia and Asia Pacific. CRTO’s Europe business is what I would put in the “mature” bucket. The Americas business is growing at 100% rate (noted in the Q4 2014 press release). For instance, if you look at the tables provided at the back of the press release, you will see that b/w 2013 and 2014, the YoY growth at constant currency were:
    o Americas - 114%
    o Asia-Pacific - 59%
    o EMEA - 49%
    If you prefer to look at Revenue Ex-TAC, then too you will see a similar trend.

  3. Advertising is a global business but because of CRTO’s european origins, it has a very dominant EMEA business. If you take a closer look at the distribution of revenues b/w the various regions, you will notice that (based on Q4 revenue ex-tac data), EMEA accounts for 45% of the revenues, Americas about 36%, and the remainder is Asia-Pacific. The EMEA dominance should disappear in short order as the Americas business is growing pretty quickly, and Americas is regarded as the biggest advertising market.

  4. I think the biggest risk to this company is not currency but privacy & legislation. What would happen if EU enacts a legislation that makes tracking rather difficult?

Anirban

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