Criteo SA (NASDAQ: CRTO) stock plunged over 12.47% on March 26th, 2019 (Source: Google finance) on reports that Google is looking at what could be sweeping changes to its ad tools, which could result in targeting restrictions at the browser level. Adweek has reported that a complex set of deliberations across Google businesses make it likely that the company will make changes to its Chrome browser which will have heavy effect on how ad-tech vendors operate within it. Those changes span a range of outcomes but observers are preparing for a change as heavy as previous ones made by Apple’s Safari and Mozilla’s Firefox.
Meanwhile, during the fourth quarter of 2018, the revenue decreased 1% year-over-year, or increased 1% at constant currency, to $670 million. The Revenue ex-TAC decreased 2% year-over-year, or increased 0.1% at constant currency, to $272 million. This year-over-year growth at constant currency was largely due to a strong holiday season across the U.S. and Europe, and was well balanced between the contribution of new clients and the existing clients, despite external headwinds. The adjusted net income during the fourth quarter decreased 31% year-over-year to $56 million. Adjusted EBITDA during Q4 2018 decreased 13%, or 12% at constant currency, to $105 million. This decrease was primarily driven by the Revenue ex-TAC performance across regions as well as slightly higher Non-GAAP operating expenses, in particular in General & Administrative. Adjusted EBITDA margin as a percentage of Revenue ex-TAC was 39% (Q4 2017: 43%). Operating expenses decreased 2% year-over-year to $171 million (Q4 2017: $175 million), reflecting a flat headcount over the period and lower equity award compensation expense.
Moreover, Cash flow from operating activities increased 8% year-over-year to $86 million. Free Cash Flow decreased 25% year-over-year to $40 million. Total cash and cash equivalents decreased $50 million compared to the end of 2017 to $364 million. This is the net result of the free cash flow generation over the period, offset by our acquisitions of both Storetail and Manage, the completion of our $80 million share buyback program and a $21 million negative currency impact on the cash position over the period.
For the first quarter of 2019, CRTO expect the revenue ex-TAC to be between $233 million and $235 million. This implies year-over-year growth of 1% to 2% at constant-currency. the company expect the adjusted EBITDA to be between $59 million and $61 million.
For FY 19, the company expects the revenue ex-TAC to grow between 3% and 6% at constant currency. The company expects the adjusted EBITDA margin for FY19 to be approximately 30% of Revenue ex-TAC.