Q4 2019 Earnings Call
It's a pleasure to be with you will on our call today. I'll cover five key topics. First what I've learned during my first day. Is that criteria?
Second the challenges that we face is accompanied third the plans and new strategic priorities the team are executing on to address our challenges and make the most of our opportunities for the highlights of our queue for performance and lastly our outlook for 2020 before I get to this I'd like to briefly briefly introduce myself as some of you may know before starting at criteo. I let a major transformation at Nielsen which shifted the company from a legacy TV audio measurement company to amaze management provider of digital and cross-platform ratings, and I'm really proud of this work way prior to this. I started my career as a track and field athlete the young age of ten and progressed to an elite status. Now, the reason I'm telling you this is that my experience is make me what I am today. You'll find me a person of conviction of grits and focus off.
Afraid of challenges and determined to beat them I get things done.
I mean Patrick to your experiences with us, and I want nothing but to be honest transparent and to deliver results.
So What attracted me to join crydiaa was the high-quality assets including the global scale continuous innovation and extremely talented and passionate people and I'm deeply honored to leave the company into the next chapter of its development at such a pivotal point during my first Eighty Days I've listened to and learned a lot from our employees and customer I missed myself into a products and Technology into our value proposition and into how we meet the Market's needs through all of these conversations, I've been struck by a sensual Solutions are to our customers and building their marketing programs and driving return on their Investments that's a great starting point
I also acknowledge that we're facing challenges that we need to address and that you're all looking for responses from us. These are number one The increased identity challenges including Google latest announcement on Chrome number to the decline of our retargeting business, which hasn't yet been offset by the growth of our new Solutions.
now these are
You and meaningful challenges that we must face as a company, but they're not insurmountable. In fact, I see them as opportunities to differentiate from others and to emerge stronger. I'm confident that we're up for the challenge and that we have what it takes takes to succeed. So let me address them both starting with our position on identity theft we believe the industry is long overdue and replacing cookies as the technique used to personalize ad targeting on the web and we welcome concerted industry efforts to evolve Beyond off cookies in privacy Safeway's with very well positioned for the shift. We have strong capabilities that put us ahead of the identity chat changes.
All solutions developed and privacy by Design ways and operate strictly under the consent of the user and we're proud of this with strong convictions. We believe that you should also have the clear individual Choice with regards to their experience that personalized advertising brings multiple benefits to the ecosystem including a user level and that browsers should not Control Data portability today. We already have solutions that are direct through our direct publisher Integrations team mobile ID by Solutions and Retail media that operate using multiple first party or Cookie list mechanisms. They represent close to fifty percent of our business.
We recognize that.
For investors the broad identity topic may look like a major threat to us. But to be clear we do not see things this way our identity resolution strategy leveraging a differentiated assets and providing for for complimentary layers will help us cover the remaining fifty percent seriously birthday party footprint. So the trusted partner were integrated into all of our Advertiser and direct publisher websites, and we have a privileged position to embed ourselves into their work flow does unique relationship means that large amounts of our data a first-party which provides us the means to create an identity solution with our clients. This is a critical differentiation point for us.
Chickens we have an unrivalled i degress 95% of our two billion plus IDs in the graph already contain a significant number of non cookie identifier. We can make our graph even more flexible by adding more persistent identifiers and new identification capabilities through trusted Partners. This makes our ID grass unless cookie dependent overtime and add it to the first point a massive source of identity data.
Willington to Willington to execute our product strategy of moving higher up the marketing funnel and shifting even more to mobile app video and connected TV thus reducing our cookie exposure. And finally we use our voice to help shape the direction of the industry as the largest independent at tech company accustomed to adapting our practices to privacy regulations and Technology changes. We believe we're in a strong position to partner with other players May trade associations standard-setting groups and Regulators to help Define new industry standards for privacy safe personalized advertising.
So let me now switch to the Second Challenge the decline of our retargeting business, which is not yet been offset by the growth of our new Solutions.
We realize that turning our business around is going to be tough and then it won't happen overnight. This requires a focus transformation. We're in the process of formulating a plan.
Is that we leverage all of our assets the plan is being built on for strategic pillars that will provide Focus organize our teams and drive momentum package. These are number one to strengthen our retargeting business number to to expand our product portfolio. Number three to explore strategic game changes off the number for to drive technology and operations Excellence. So one by one to strengthen the base business will accelerate our initiatives took out a differentiated full stack DSP adding capabilities for upper funnel marketing on top of our strengths and lower funnel and offering more flexibility and transparency throughout the stack.
We'll do a better job at showcasing our unique Global presence two Brands and agencies will focus on our goal to create the marketplace of Publishers and advertisers outside of old Gardens bringing quality and most importantly choice and we'll look into adjusting our value proposition in particular for large customers.
And a product portfolio will ever adjust strong assets to capture a number of compelling new business opportunities. You've seen some evidence of this already retail media continues to perform. Well growing in the twenties throughout 2019 and showing great stickiness with retailers. We are the retail media solution of choice and many of the world's top retailers wage. For example, we recently renewed a long-standing partnership with Best Buy to deliver their sponsored products product experiences, and we're really excited about this and will in fact to further broaden our consumer reach-around app video connected TV and omni-channel. We're excited with the performance of our omni-channel business, which extends our consumer reached off line omni-channel is one of the fastest-growing white spaces for us in 2019 omni-channel business grew close to 300%
moving to the
And strategic priority exploring game changes will explore new propositions and line with our strategy through a mix of organic development Partnerships and m&a particular in particular will look to build Partnerships with ecosystem players to complement our capabilities. These will be in areas like cross-platform targeting measurement components required for our Tech stack and more and finally will continue to drive technology and operations Excellence will invest in Tech Innovation while maintaining strong profitability. We have a strong profitable and cash generative financial model which on top of our strong focus on driving further operational efficiencies allows us to invest flexibility in our strategic priorities and new opportunities.
Let's now look back at you for we had a solid quarter and exceeded the top end of our guidance for both revenue xtech and adjusted ebitda while Benoit will provide more details later some of the Q4 highlights included.
another great
Performance during the holiday season demonstrating the critical value of our retargeting solutions to retailers during this important time of the year.
The continued growth of our new Solutions now at 16% of our total business in Q4 driven in particular by our consideration product and Retail media.
The addition of 280 net new clients accelerating 60% 16% from Q3 and 34% from Q4 in the prior-year off and continued discipline an expense management driving our 41% adjusted ebitda. Margin.
Lastly our outlook for 20 20 20 20 will be an important year. We have a lot of work to do and results will take time. I'm sure that in 2028 We Lay the foundations for a long-term success and focus on the initiatives that drive the most impact Alana.
Key objective for the long term as to capture opportunities that strengthen our Revenue mix and make our business more resilient and and sustainable over time within this long-term context. We took a realistic view on the 20/20 business infected and some realistic headwind assumptions as a result. I expect our Revenue extract to decline by approximately 10% at constant currency in 2020 will ensure to maintain strong profitability and cash flows this year to support our long-term divorce.
When I'm excommunicating about 90 days, I intend to provide more details to help you monitor. Our progress towards our priorities. I'm a firm believer and transparent communication and often dialogue with our stakeholders. I strongly believe in delivering on our commitments and doing what we say will do or therefore strive to be as open as possible infections with all of you and provide regular updates on our progress towards our strategic operational and financial goals. And with that. I'll hand it over to Benoit to discuss our life results in our guidance been. Well, thank you again and good morning everyone. I will walk you through our performance for Q4 on 2019 on share name guidance for those q1 on fiscal year 2020 Revenue was $653 in Q4 on 2.2 to age.
26
for 2019
Revenue X. I will key metric to monitor the business decline 1% as constant currency to $266 in q400 in 2019 attached above our guidance to $947 off our queue for performance. Better-than-expected was driven by a growing business with new clients in the mid-market offset by a slight decline in our existing client business, despite the strongly decision across regions on continued adoption of our new Solutions among clients.
Currency changes in Q4 cost us over two million dollars versus prior year and provided a Tailwind of about 1 million dollars compared to our guidance assumptions this translated into a four million dollars over achievement above the high end of our Revenue extra guidance for Q4.
Q4 Revenue extract margin improved twenty basis points to 41% in line with our expectations
Looking now at some of our operating I like four Q for our business grew 7% globally during the so-called cyber six days around Black Friday. When you Solutions grew 44% to 16% of our total business, including our consideration Solutions growing more than 5 x on a web only the 50 on app written media grew in the low 20s with continued strong triple digit growth of our own National model.
On the food your basis. This means our new solution altogether grew 54% to 12% of the business.
We're retargeting product continue to decline slightly in the upper mid single-digit Ranch in particular with large customers why the affected by the retargeting softness? I was same client Revenue decline 3% at constant currency that improve slightly compared to the minus 4% interest.
We are.
The 218 new clients ending the quarter with more than twenty thousand and two hundred clients globally the 4% increase year-over-year off while maintaining I retention at 90% for all solutions and from a supply standpoint more than 4,500 direct publishing now connected to one of our critical direct videos on the web on app including RetailMeNot. Seven one media on eBay kleinanzeigen in Germany.
Turning to our queue for regional performance Revenue in the Americas declined strip is not a constant currency why we are the off-season as expected good performance in consideration on retail media and continued Traction in mid-market our business with large customers remain soft.
however
Excluding the impact of a large customer loss in early 2019 on the anniversary of the manager position Revenue in the US 1% in Q4 on 2% in 2019.
Yeah me a revenue X. Grew 1% at constant currency in line with Q3 on our expectations. Once again, we are the strong Black Friday the 4th in many European markets mid-market continue to grow double-digit across the region on we saw marked improvement in our last customer business in particular in Germany France on in the UK.
In a park Revenue decline 2% at constant currency also in line with Q3 driven by softness in our Japanese large client business off of setting very strong performance in Korea on double-digit growth in mid Marcus across the region.
shifting to expenses
What was the cost of Revenue decreased 19% in Q4 largely driven by your 10 million positive impact from the longer useful life of our servers off by the provision for French digital tax?
non-gaap also cost of Revenue increased 2% in Q4
in 2019 was the cost of Revenue declined 11% due to the lower depreciation and amortisation on our hosting equipment throughout the year, but grew certain percentage on the non-gaap basis.
Operating expenses increased 3% in Q4 on we are flat in 2019 driven by our strong focus on discipline expense management page on Lower Equity or what compensation expense.
In Q4, we in here about eleven million dollars of restructuring costs largely related to the decision to close our R&D Center in Palo Alto month, including six million people related or nine million dollars facilities related costs offset by 5 million hours for features of equity or what composition expenses.
on the
Which exclude restrict during operating expenses decreased 7% in Q4 on 1% in 2019 in life with our plans, we expect our restructuring measures taken in 2019 to generate non-gaap Savings of $21,000 per annum in 2020 on Beyond.
Aitken's related expenses represented sixty 66% of Gap in Q4. Six points on 72% wage 2019.
We ended 2019 with over two thousand seven hundred and fifty employees flat year-over-year on 1% sequentially.
Looking now at Nome Gap expenses by function r n g of X decrease 17% in Q4 to 11% of Revenue x-tac song by Ewan increase in our research tax credit on despite a 1% increase in headcount to 680 R&D on product engineers in 2019. Non-gaap R&D expenses decreased 6% to below 15% of Revenue extract Dawn sixty basis points.
Other than 20 we expect to continue to reduce non-gaap R&D expenses as a percentage of Revenue x-tac in large part due to closing our Palo Alto R&D Center of sales on operate on operation Opex decrease 7% in Q4 to 29% of Revenue x-tac this plight despite wage flat head count of 1580 employees.
What could occur in sales on the constructivist declined 3% year-over-year on 3% sequentially to about 700,000 10 in 2019. Non-gaap says on operation expenses decreased 1% to 34% of Revenue extract.
In 2020, we expect non-gaap set on operation expenses to decline as a percentage of Revenue as a result of further increasing automation on delivering efficiencies across all of our platform and operation teams as well as from right sizing our offices worldwide.
On G&A expenses increased 3% in Q4 to below 12% of Revenue X stack with flat at five hundred employees in 2019 non-gaap G&A expenses increased 5% to 12% of Revenue X Stack Up points. This was driven by some internal team. V as well as one time Consulting fees in 2020. We expect non-gaap G&A expenses to decrease as a percentage of wage driven largely by efficiency gains on by our office right-sizing program.
Overall, we continue to focus on effectively adapting our cause based on will increase our focus on productivity and efficiency gain this year off as a result. We expect non-gaap expenses across all functions to meaningfully decline in dollar terms in 2020.
Was it profitability side adjusted ebitda increased 6% at constant currency in Q4 to 109 million or 4% above the I end of our guidance this translate into a one-hundred-per-cent flow through of the top-line beat into adjusted ebitda.
This drove our adjusted ebitda margin to slightly over 41% of Revenue extract into four or a boat three hundred basis points above the prior-year at constant currency.
In 2019. I just did a bit. Declines 3% at constant currency to $299 million dollars the drove the margin of 38% of Revenue x-tac. Well above our 30% guidance for the full year.
Depreciation and amortisation expenses decreased 1% into four largely driven by the change in the useful life of our servers and despite the accelerated off of managed intangible assets for about seven million dollars in 2019 our depreciation and amortisation expenses declined 10%
Still work compensation expense decrease 11% in Q4 on 27% in 2019 driven by the lower stock price of as a. M restructuring related equity for features in 2019. Our stock based compensation charge represented just over 5% of Revenue X stack on 180 basis points versus 2018 Financial expense declined 13% into four largely due to lower life on foreign exchange for 2019 Financial expense increased 13% and our effective tax rate was 28% in 2029 for the food year slightly below our 30% projected tax rate for 2019 and please that as a result of adjusting our tax structure wage.
Who else a year of?
What provision for income taxes decreased 13% on 14% in Q4 and 2019 respectively?
We expect that we're projecting tax projected tax rate to be about 30% in 2020.
Net income for Q4 decrease 2% to forty 1 million driven by a 5% decrease in income from operation of set by the lower, Michigan on tax expenses.
However in 2019 net income was flat 296 million dollars as a result adjusted diluted EPS increased 29% in Q4 to $1.08 on 7% in 2019 to $2 on sixty seven cents.
Cash flow from operations decreased 31% in Q4 driven by unfavorable changes in working capital on iron income tax paid in 2019 cash flow from operations declined 15% in parallel capex decrease 61% in Q4 due to meaningful savings on Thursday timing effects.
Declined 22% to ninety eight million dollars in 2019 just above 4% of Revenue or 110 basis points on a 2018 in 2020 due to significant saving it data center planning and management. We anticipate our capex program to represent just about 3% of Revenue the sizable reduction from 5% in 2018 on 4% in 2019.
Free cash flow increased 4% in Q4 on declined 8% in 2019 to 125 million dollars.
To 42% of adjusted ebitda in line with our four-year historical average. However, excluding the cash impact of restructuring month free cash flow of 132 million dollars for 2019 was almost flat.
Finally cash-on-cash equivalent increase fifty-four million dollars throughout the year to 400 on 19 million dollars with respect to the eighty million dollars share buyback program. We launched last August as of the end of 2019. We are purchased approximately 3.5 million shares for a total cash amount of $59 million at an average price of 18.07 dollars per share.
We are currently still executive on this program on intend to continue until completion.
We now provide our guidance for the first quarter and fiscal year two thousand and twenty the following forward-looking statements reflect our expectation as of today, February 11th, 2020.
In q1 2020 we expect revenue x-tac between 209 million and 212 million dollars on a reported basis.
sir
Reasons makes make us cautious in q1 first. We have a strong comparable basis in q1 partly driven by the strong contribution of a particularly large US clients that was lost at the end of q1 last year. So Kong we are seeing a soft start on after the strong holiday season more pronounced dead softness than usual this year on 3rd our large customer business in the US remains soft as a result. We think that's going to see Revenue declined by 10% to 9% in q1.
We expect your over. Your for exchange has to be a Edwin to report it grows of about 2 million or a hundred basis points.
Please regard to the food year 2020 we've taken a realistic view on the business on factored in some realistic assumption around ad targeting restriction off on strike during limitation of privacy regulation. We anticipate these Edwin to impact over seven points of growth in 2026 as a result. We expect Revenue extract to decline by approximately 10% at constant currency.
Frank's assumption this means Revenue X stack of approximately 848 million dollars compared to 2019. We see Frank's change the negative impact of approximately four million dollars or about fifty basis points of reported grows. We do not intend to go into the details. Ed with assumption for the year.
All their profitability side we expect you one 2020 between 55 million and 58 million dollars on four 2020. We expect just need to be the amount of approximately 30% of Revenue x-tac as we further increase our focus on productivity and efficiency on continue to proactive adapt our cost days.
As usual currency assumption supporting our guidance for both q1 on fiscal 2020 included in our earnings release.
In closing and pleased with our solid Q4 performance on better close to 2019.
2020 will be an importance here for us. We strive to maintain strong profitability on cash flows to strengthen our business for the long-term.
Why is the team focuses on the initiative driving the most impact on our long-term top-line our strong financial discipline profitable model on large cash. Flexibility will take us capture compelling opportunity faster with that will now take your questions.
To ask a question, please. Press * then 1 if you're using a speaker phone, please pick up your handset before pressing the keys to withdraw your question, please press * then two months. The first question today comes from Dan salmon with BMO Capital markets, please. Go ahead. Good morning. Everyone. Thanks for taking the questions Megan had a couple of high-level for you as you might expect firstly if you come into the ad Tech sector here, there's a long time debate over whether or not these companies represent software companies or not. I always think it's fairly clear that you build software. The question is always around the revenue model and your prior company Nielsen was one of the few companies in the ecosystem that created a products that people were willing to pay for every day on a subscription basis. And so obviously it was a very different business, but I'm just curious about what you feel you can bring with your experience and underdog
standing that to criteo and and what type of Revenue models you
Can help boost here around transactional fast, for example, and do you think the revenue model for the Core retargeting Business needs to change and then just to follow-up is as I'm sure you know, we took me obviously works largely directly with marketers traditionally. Just love to hear a little bit more about what you think the role of agencies or or just maybe not so much the the big guys that we always think of bulbs or reselling community and whether or not that's important to you as you step forth with Korea.
Hi Dan, it's good to hear from you. Thanks for the questions in terms of the ad Tech environment and the pricing models wage. You're right. I come from a company that has both contracted pricings a fixed fixed rates and also see p.m. Pricing in many cases on the digital signage clients want transparency and they want stability and we want the same. So I think that there is an opportunity to review those things at at criteo and make sure that it isn't a black box. It is an environment where we can have both of those pricing models again, it it will take time and it'll take some research into how that works. And if that works but everything that we do should be based.
Um, um, um.
Transparency to the client flexibility to the client is this sustainable business models and a way to make sure that that way we have some predictability around revenue and they have predictability around spend. So we're open to analyzing a number of different points there in terms of marketers.
I think the agencies are incredibly important they have been for some time and and maintain their position as being the broker between the buyer and the seller and in fact past has not focused very heavily on agencies. My intention is to change that I think we should have a relationship with agencies. We should be developing solutions for agencies to make their jobs easier at the lower funnel. We should be providing data into agencies to inform them of what's going on. We should be shaping their strategies and and for all those reasons, I think getting close to the agencies is important. I think they they need our help and and we're we're prepared to go in that direction. So it's it's an important part of the full funnel operation.
Going forward and the extent.
Of our business out Beyond retailers into other verticals including agencies.
That that's helpful. That's very helpful. Thank you.
The next question comes from Matthew Thornton with SunTrust, please go ahead. Hi, this is Anthony on format. Good morning. Thanks for taking the question on the graph. What percentage of that is non cookie-based and of that what percentage would you say is own versus license from your partners and then second if we met are you seeing any early impact from the California consumer Privacy Act off? Thanks.
Let me start over IP grass. As I said before 95% of it is not cookie-based and it is data that is odd that is Elsie use and that we use with the ecosystem that we Service as a whole so we have access to that page targeting purposes and more importantly.
More importantly to to service the entire a personal proposition and to move us further away from cookie exposure with the idea. Of course is to connect that with the first party data and to bring in other potential Partners as well that can increase the size of that that IP grass and one of the current Partners is you know is life rent and we'll have all intention to bring in more and that is a massive massive source of non cookie-based data off that will use to to make sure that we stay stay away from being trapped into a cookie environment.
So just maybe I've been while just to add the precisely on the portion of the grass. That doesn't rely solely on cookies is 95% So ninety 5% of the idea graph doesn't rely solely on cookies.
That's helpful. Thanks.
So maybe just on the EPA?
I can take it. So maybe just on t c p a you know, what as you know through the implementation on from first of of January user need now to show me the usage of their personal data by Sir party Partners. So what we've what we've done is we've adapted our our service to the to the needs of our clients often. We see a to to type of clients clients that that are IP to implemented opt-out capabilities on their on their service on clients who do not want to to go through the root of the opt-out capabilities and for which we have modified our agreement with them to work as a Pure service provider for them. So we are flexible in the way we adapt on on what we see is a smooth transition through the through the client base at this point.
The next question comes from dog and with JPMorgan, please go ahead.
Thanks for taking the questions first. I just wanted to ask about the first party data Megan that you talked about. Just trying to understand better the trend that you're seeing on that first party data how you'll tension is with those Partners in your ecosystem. And how do you maintain that and then just on the seven points then while that you talked about through 2020 is that more specifically related to the Google changes, or is it a collection of other things in there as well? Thanks.
Yeah, let me start with the first party Diner and thanks for the question. We we have a privileged position with our clients both on the publisher and the advertising side and bear in mind the size of the advertising basis about 20,000. The size of the publisher base is about four and a half thousand and growing and we have a privileged position that they need us we become part of their work flow. So they build us into the way in which they that they go about understanding their client base and the way in which they target so we get data back directly from them and clearly that's that's data that's flowing through all the time. And and uh, I guess that's part of the solution.
100
The scent of that first body data is with our clients. So again, they they want us to understand their clients. They pass that data through to Thursday so that we can provide the service at they're looking for.
Maybe just regarding the seven seven points of of Edwin that we've baked into into our guidance. I mean the reason why we took a realistic view is primarily to address took topics. The first one is the easiest targeting restriction on the second one is is relating to regulation. So without getting into the full breakdown with respect to our targeting restriction primaries from the implementation of us further restrictions that have been announced effective this year in in browsers. So namely Firefox and uh found, you know Microsoft on with respect to with respect to the regulation. We took we took of you that there would be a stricter gdpr wage that could have a material impact to to the business as part of the 7%
Thank you.
Next question comes from Sarah Simon with berenberg, please. Go ahead.
Yeah, most of my questions have been altered but I just had a question on the the margin because been well when you talked your way through your 2020 outlook for costs non-gaap costs as a percentage of Revenue x-tac. I think you said all three categories would be down but your guy which would imply a growing margin but you're implying or your guide for a slight decline in the margin on a four-year basis. So have I misheard one of these categories in terms of declined versus increase as a percentage of Revenue x-tac.
Thank you. Thank you for the question. So now in fact if you if you combine our our guide for the top line where you know, we've guided to approximately, you know, 10% off for the for the year despite Contracting our cost base, you know, our cost base is expected to contract on all categories. But despite is Contracting of the wage base. You know, we are we are guiding for slight slight decrease in margins 30% margin in terms of guide compared to you know, the margin of the Year. We're last year. We we deliver Thursday morning. So it's a combination of decline on the top line on contraction and our cost base which is you know, as a slightly lower rate than the decline on the top line. But of course, you know, we'll monitor the catching some of these costs.
You're expecting some of these costs therefore to grow as a percentage of Revenue x-tac.
Yes, as a result of this as a result of this you are going to to see some of these calls slightly increasing as a percentage of Revenue exact.
Okay. Thanks. Primarily. I think that would be primarily within within the the cells on the operation because product on Iraq is going to be you know, benefitting from the user right-sizing of the location now that we close the the Palo Alto Center and we are going to deliver efficiency of the g n Thighs. So that would be primary and says on the operation that you will not see you will see a small deleveraging as a percentage of Revenue exact.
Okay, very good. Thanks.
The next question comes from Andy Hargreaves with KeyBank, please. Go ahead.
Thanks and make and just wondering if you can get a sort of perspective on the qualitative factors that are driving. Um, uh some hesitancy, I guess around retargeting, you know, there's obviously been platform issues, but it does seem like there's been sort of an attitude change and just wondering if you could talk talk to you out a little bit and then Benoit just wanted to ask two questions around through cash and balance sheet 1 a.m. Do you have a number for what you expect the restructuring the cash restriction cost to be in 2020 and then can you just walk us through sort of priorities for the balance sheet and any thoughts on so we can serve cash until Google's plans and more clear.
And you you talking about the climates in particular?
I'm talking about there's like, you know, there's been client losses. There's been declines not associated with the platform changes. What is just the way the competition is it just hesitancy around individual targeting for perception purpose is what's driving.
We don't.
Necessarily seeing that especially the mid markets are growing up. Well got double-digit growth for a mid-market in Q4 and for the second half of 2019. We see softness in the logic fine and the things that we're seeing is that they are moving their budgets around between em up a funnel funnel and lower funnel. And I guess that's to be expected as they changed tactics. They try and make the choice most of the different opportunities across those funnels and we tend to see Trends and uh in that they they're also after a full final solution and one let's unbundled and one that offers software-as-a-service.
Because they want flexibility and transparency to be able to make the right choices as they move their ad spend between the different layers of the funnel. So there abs and flows birthday parties around this to build out that full stack as I said before to allow them to move their spend around between the the funnels and use a single provider to do that with a single set of data to really focus in on showing them the power of the global footprint that we have so that they can measure and look for Trends across market to continue to grow out mid-market client base to be more client-centric to be more flexible and to to make sure that they're comfortable that the solutions that we use, uh, privacy safe and uh, and uh, I say from the restrictions of the Dead
Cookies, so that's what we see.
Let me see logic clients experimenting across the final and across platforms.
Okay, so we respect to a restructuring in in in 2020. We've not given any indication on restructuring for 2020. Of course, we would we would dynamically manage cause base as a nice required during the course of the year, but we do not as of now as other Guidance with respect to cash restructuring in 2026, I think on these your your last I think I've lost your last question with respect to was it around the the cash and any thought on just conserving it off, you know sort of ongoing uncertainty around Google.
So I think with respect to Capital allocation, as you know, we've always had, you know a balance on quite Freedom Capital allocation. So in the context of you know, the strategy game that we have to drive we we we will most probably keep a large portion of the cash with respect to driving, you know, potential strategy game changers off of course of the year, which is part of our of our strategic place for the year. Thank you.
Next question comes from Lloyd Walmsley with Deutsche Bank, please go ahead.
Thanks, maybe one for Benoit and one for Megan been want any any impact in the US from just the shorter holiday period between Thanksgiving and Christmas and then Megan just kind of big package you guys have a very long road ahead of you diversifying the revenue mix public markets appear to be fairly skeptical. So I guess why why go through this as an independent public company and not not look at strategic alternatives.
Okay, so with respect to the to the peak season as we've as we've you know confirmed in our in our prepared remarks, we have the stronger peak season in in Q4 walk across across both Europe and the US on in the US we've seen we've seen a good Dynamic Pixies and so no no particular impact of the of the calendar month. Um, you'll here with respect to I think one of the point I would just add on the on the peak season is the strength of the peak season add the most probably an impact with respect to the the spending that we've seen in January because some of the large retailers who have end-of-the-year date in end of January of of maxed out spending money in during the peak season, which are the probably an impact on the on the slow start that we've seen in q1.
with regards to the question around
The the challenges of company and the public markets the focus that I have is two months to get my head down and turn the business around so that requires to redirect and to motivate the team is to put the plan in place prioritize and then focus on execution and and that's what I'm going to do. I'm not going to the borders not asked me to go into anything. Other than that, it's just simply to turn the business around and I truly believe that this wage can be done through the Strategic plan that we put in place the energy of the organization the assets that we have and staying laser-focused on Thursday.
securing through 20
20 and driving for results
Thanks for the question.
Next question comes from Nick Jones with City, please. Go ahead. Hi. Thanks for taking my question. Just one on how do you feel about the pipeline of potential Aqueduct targets to help bolster your technology any color? That would be helpful.
Yeah, so let me call it sort of Partners and potential m&a we have a lot to do and we can either build things off I things or partner for things and so as we build out the requirements in order to achieve what we need to achieve we identify gaps and in filling those gaps again, we can build by your partner. We have a long list of opportunities in terms of Partnerships, and there's obviously always line of sight into potential m&a to be able to again help us execute against the plan, but it's