Trade Desk Tumbles As Quarterly Earnings Disappoint
Trade Desk (TTD) reported third-quarter earnings and revenue that fell short of estimates, sending TTD stock plunging in early trading Friday.
For the quarter ending Sept. 30, the digital advertising firm reported earnings of 33 cents per share, up 27% from a year earlier. However, this was below analyst expectations of 29 cents a share. Revenue climbed 25% to $493 million, also missing estimates of $487 million.
Part of the reason for the disappointment was the company’s guidance for the current quarter ending in December. Trade Desk expects earnings before interest, taxes, depreciation and amortization (EBITDA) of $270 million, well below estimates of $291 million. The company predicted revenue of $580 million at the midpoint of its forecast, falling short of estimates of $610.4 million.
“Management blamed the weaker-than-expected guide on a slowdown that happened in the second week of October,” said Jefferies analyst James Heaney. “The slowdown primarily impacted auto and consumer electronics, but also media and entertainment and some other large advertisers. Though TTD has seen stabilization in spend trends and is cautiously optimistic about the outlook, we worry that there could be additional budget cuts ahead.”
Following the disappointing report, TTD stock tumbled 27.7% in early trading.
The Ventura, Calif.-based company’s automated platform enables brands and ad agencies to buy online and mobile ads in real time, rather than in advance. In addition, Trade Desk helps clients leverage online data to improve their targeted advertising.
Heading into the earnings report, TTD stock had advanced 75% in 2023 and held a Relative Strength Rating of 96 out of a best-possible 99.
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