Criteo shares slide on cautious 2026 outlook despite record cash flow

Criteo (NASDAQ:CRTO) saw its shares dip in early trading after the company issued a conservative 2026 forecast, overshadowing a year of record-breaking free cash flow and significant progress in its "Commerce Media" transformation.

The New York-based firm posted full-year 2025 revenue of $1.945 billion, a 1% increase, while navigating a 2% decline in the fourth quarter due to scope changes with two major Retail Media clients.

Despite the quarterly revenue dip to $541 million, Criteo’s bottom line remained robust.

Full-year net income reached $149 million, with diluted EPS of $2.64.

The company’s focus on high-margin segments and operational discipline drove free cash flow to a record $211 million—a 16% increase over the previous year—underpinned by the lowest Days Sales Outstanding (DSO) in the company's history.

"2025 was a year of disciplined execution where we solidified our position at the forefront of 'Agentic Commerce,'" said CEO Michael Komasinski.

To support this vision, Criteo recently introduced AI-powered shopping assistants and expanded its retail footprint with new partners like Lidl and JB Hi-Fi.

These additions are part of a broader strategy to offset the "temporary impact" of shifting client scopes that hindered fourth-quarter performance.

Meanwhile, the company's board signaled strong confidence in its long-term trajectory by increasing the remaining share repurchase authorization to up to $200 million.

This follows a year in which Criteo already deployed $152 million to retire shares.

Looking to 2026, CFO Sarah Glickman projected a "transition year" with Contribution ex-TAC growth expected to be flat to 2% on a constant-currency basis.

The company anticipates an adjusted EBITDA margin of approximately 32% to 34%, reflecting continued investment in AI innovation and global commerce data capabilities.