Following the Q3 print, the company said its momentum continues to be fueled by new product innovations.
- The company forecasts 18.5% YoY revenue growth for Q4, stripping off the 2024 elections benefit from the year-ago results.
- Retail sentiment toward the stock has flipped to ‘extremely bullish.’
- The stock is down about 62% year to date.
Trade Desk, Inc. (TTD) shares climbed more than 2% in the overnight session after the ad tech platform reported better-than-expected quarterly results and issued an upbeat outlook. The company also announced an additional $500 million share buyback authorization.
CEO Says Trade Desk Uniquely Positioned
Los Angeles, California-based The Trade Desk called its fiscal year 2025 third quarter another “strong” one, with revenue rising 18% year over year (YoY). The growth rate nearly aligned with the 19% pace reported for the previous quarter. The quarterly revenue of $739 million exceeded the Fiscal.ai-compiled consensus of $719.34 million.
Delving into the revenue outperformance, CEO Jeff Green said, “Our momentum continues to be fueled by new product innovations we’ve launched across our Kokai platform, which are helping the world’s leading brands unlock the full potential of data-driven advertising.”
He also credited artificial intelligence (AI) for transforming the advertising ecosystem. “Trade Desk is uniquely positioned to capture more market share as we help advertisers succeed on the open internet and drive measurable business growth through data and AI.”
Trade Desk’s adjusted earnings per share (EPS) improved to $0.45 from $0.41, beating the consensus estimate by a penny.
Customer retention remained over 95%, as it has in the past 11 years.
Trade Desk’s Outlook
For the fourth quarter, Trade Desk expects revenue of $840 million versus the consensus estimate of $830.90 million. On the earnings call, CFO Alex Kayyal clarified that, excluding the benefit of U.S. political ad spend in the fourth quarter of 2024, the YoY revenue growth would have been about 18.5%, according to the Koyfin transcript.
The company guided adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of about $357 million, up from $317 million in the third quarter.
What Retail Feels About TTD Stock After Q3 Print
Retail sentiment toward the Trade Desk stock among retail users of the Stocktwits platform improved to ‘extremely bullish’ as of early Friday, from ‘bearish’ a day ago. The message volume on the stream was ‘extremely high,’ increasing by nearly 700% over the 24 hours leading up to late Thursday.
A bullish user noted CFO Kayyal’s comments from the earnings call, stating that the company sees a significant opportunity to target the mid-market. The user indicated that longtime Google executive Anders Mortensen, who joined The Trade Desk as Chief Revenue Officer in late September, focused on the mid-market during his tenure at the search giant. “This could be seen as a new growth opportunity or diversification because TTD is facing competition in larger accounts,” the user said.
Another user suggested that the stock could rebound to $50 by next week.
Trade Desk stock ended Thursday’s session down 3.77% at $45.90.The stock is down about 62% year-to-date.
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