Ad tech giant Criteo sees a big opportunity in Twitter's TellApart shutdown (CRTO)

The French ad tech company reported strong sales that beat analyst expectations. Revenue ex-TAC (traffic acquisition costs) was $210 million in the three months to March 31, up from $162 million the prior year. Analysts had predicted between $203.4 million and $205.7 million.

Criteo's net income was down 22% year on year to $15 million, mainly due to its $250 million acquisition of HookLogic, which completed November 11 last year. Excluding the accounting impact of the acquisition, net income was up 15% year on year to $21 million, compared to analyst expectations of $17.3 million.

Adjusted net income per diluted share was up 6% year on year to $0.46, beating analyst estimates by $0.03.

Criteo's stock was down slightly at market open, down 4.52% to $52.36 at 9.36am ET. Yesterday, an SEC filing revealed CEO Eric Eichmann sold 20,000 shares of stock on April 27.

Criteo works with retailers and advertisers to target ads at users who are most likely to buy products. Eichmann told Business Insider that the Criteo had beat analyst estimates for 14 consecutive quarters — that's every quarter it's been a NASDAQ-listed company.

With a market cap of $3.39 billion, the company stands apart from its ad tech peers — although Eichmann doesn't like being lumped in with the wider ad tech market.

Twitter plans to wind down its in-house Criteo rival, TellApart, while Adobe acquired another ad tech giant, TubeMogul for $540 million. Another ad tech firm, Rubicon Project, has seen its market cap drop to $277 million, down from $316.05 million last November.

Theres a big opportunity with Twitter

Twitter acquired ad targeting firm TellApart in 2015 for around $532 million, which was then its biggest acquisition.

But in February this year, the company said it was winding down the technology. TellApart's CEO, Josh McFarland, left Twitter for VC firm Greylock in December, according to Recode.

That means Criteo could scoop up TellApart's advertising clients, and maybe partner with Twitter, Eichmann said.

"It opens the opportunity for us to go after those clients and serve them," Eichmann told Business Insider. "There's also the opportunity to work with Twitter as a publisher. It's something we had a hard time doing because TellApart was part of their offering, so we were competitive with them. None of that's been announced, but we certainly think it opens an opportunity."

Criteos CEO said the company has survived ad tech trends like header bidding

One reason Criteo is outperforming rivals is that it's been quicker to respond to changes in the ad tech market, and it's simply bigger.

Rubicon Project has admitted it was slow to react to header bidding, an advertising trend which has exploded over the last year. Header bidding is where publishers insert a piece of code into their ad inventory to offer out the slot to multiple buyers simultaneously.

"There was a change in the supply landscape with header bidding, which initially we would call a headwind for us but now consider a tailwind," Eichmann told Business Insider. "We created tech that allows us to take advantage of that change." Criteo rolled out technology in November that gave it priority access for publishers' header bidding wrappers. Rubicon Project, Eichmann added, hadn't responded so quickly. "They were caught in the storm."

Criteo Q1 2017 earnings, the key numbers:

Revenue ex-TAC: $210 million, up 29%

Net income: $15 million, down 22%

Adjusted net income per diluted share: $0.46, up 6%

Adjusted EBITDA: $56 million, up 16%

Operating expenses:$162 million, up 39%

Cash flow from operating activities: $44 million, up 134%

Free cash flow: $16 million, up $9 million year-on-year

Total cash and cash equivalents: $304 million

Net new clients in the quarter:950

Total clients: "More than 15,000"