Criteo (CRTO) Slammed After Warning Of Larger Apple ITP-Related Hit

Criteo (NASDAQ: CRTO) is being slammed 27% after the company provided an update on its fourth quarter 2017 outlook and on the expected impact of Apple's Intelligent Tracking Prevention (ITP) on Criteo's projected 2018 Revenue excluding Traffic Acquisition Costs, or Revenue ex-TAC.

Criteo said they pleased with this year's Holiday Season and are confident in their fourth quarter 2017 outlook, which was communicated on November 1, 2017.

The company also commented that earlier this month, Apple launched a new version of its mobile operating system, iOS 11.2, which disables the solution that some companies in the advertising ecosystem, including Criteo, currently use to reach Safari users. As a result, we believe the projected 9%-13% ITP net negative impact on Criteo's 2018 Revenue ex-TAC relative to our pre-ITP base case projections, communicated on November 1, 2017, is no longer valid.

Criteo said while they are focused on developing an alternative sustainable solution for the long term, the solution is still under development and its effectiveness cannot be assessed at this early stage. Should it not mitigate any ITP impact, they believe the ITP net negative impact on Criteo's 2018 Revenue ex-TAC, relative to our pre-ITP base case projections, would become approximately 22%.

The company said it will provide formal guidance on Revenue ex-TAC and Adjusted EBITDA for fiscal 2018 mid-February 2018, when they report earnings for the fourth quarter and fiscal year 2017.

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