What happened

Shares of advertising tech specialist Criteo (NASDAQ: CRTO) fell on Wednesday, trading down by 7% as of 11 a.m. ET compared to a 1% rally in the wider market. Investors weren't thrilled with the company's fourth-quarter earnings report, which showed that sales declined slightly as 2021 came to a close.

So what

Revenue dropped by 1% year over year for the period. On a non-GAAP basis, sales after subtracting traffic acquisition costs rose 9%. That was a slight slowdown from the prior quarter's 13% sales surge.

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Revenue rose 12% for the full year, though -- a fact that management was happy to highlight.

"We delivered double-digit growth in 2021," CEO Megan Clarken said in a press release. "Our impressive performance demonstrates the tremendous progress we have made in our transformation."

Criteo has been transitioning clients to its self-service advertising and media platform, which management believes will support faster growth and higher engagement over time.

Now what

There are several encouraging signs about that transition, including rising gross profit margin and cash flow. Criteo's customer base continues to grow, with large retail brands such as Nordstrom signing on with the company in Q4. And existing clients are spending more with Criteo on an annual basis, too.

Criteo's 2022 outlook is solid, even though some investors might have been hoping for more optimistic guidance. As it stands, non-GAAP revenue is projected to rise by between 10% and 12% while adjusted earnings are expected to reach 38% of sales (compared to 35% last year and 30% in fiscal 2020).

Management is predicting weaker results on both the top and bottom lines in 2022's first quarter, and that anticipated short-term slowdown might explain why the stock fell immediately following the report. Yet executives forecast accelerating sales and earnings gains from there, which will likely support positive returns over the longer term.

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Demitri Kalogeropoulos has no position in any of the stocks mentioned. The Motley Fool recommends Criteo. The Motley Fool has a disclosure policy.