Criteo Stock Pops on Strong Results -- and a Transatlantic Relocation Plan
Key Points
Criteo reported stronger-than-expected third-quarter results, beating analyst estimates.
The company also announced plans to move its corporate headquarters from Paris to Luxembourg, with a possible U.S. move in the future.
Management said a potential U.S. relocation could open the door to S&P 500 index eligibility.
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Shares of Criteo (NASDAQ: CRTO) opened Wednesday's trading 8.7% higher. The Paris-based digital advertising specialist reported strong third-quarter results early in the morning, and the company also announced a two-step relocation plan.
Criteo's Q3 numbers and relocation
Criteo's Q3 contribution excluding traffic acquisition costs (ex-TAC), a non-GAAP revenue measurement commonly used in the advertising industry, rose 8% year over year to $288 million. Adjusted earnings jumped 36% higher, landing at $1.31 per diluted share. The average Wall Street analyst would have settled for contribution ex-TAC of $281.3 million and earnings in the neighborhood of $0.93 per share.
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On top of the rock-solid results, Criteo will move its corporate domicile from Paris to Luxembourg in 2026, with the option to then relocate to the United States in the future.
The move to Luxembourg helps Criteo move its American stock listing from the current American depositary shares (ADS) to a direct listing on the Nasdaq (NASDAQ: NDAQ) stock exchange. That move makes Criteo's stock easier to trade on the massive U.S. stock market. Along with the potential cross-Atlantic move of corporate headquarters, Criteo could even be eligible for inclusion in the S&P 500 (SNPINDEX: ^GSPC) market index someday.
Image source: Getty Images.
Why Criteo is packing its corporate bags
Moving your entire company to America just to pursue index membership may sound silly, but management explained this idea on the earnings call:
"We believe it would expand our access to passive capital, triggering associated benchmarking from actively managed funds and broadening our shareholder base," CFO Sarah Glickman said.
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Anders Bylund has positions in Criteo. The Motley Fool recommends Criteo and Nasdaq. The Motley Fool has a disclosure policy.
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