CEO says performance 'gives us confidence that we will continue to gain market share in any market environment' as doubts about online-ad industry grow
Trade Desk Inc. reported stronger-than-expected sales and guidance Tuesday amid doubts about the online-advertising industry, sending shares nearly 18% higher in extended trading.
Trade Desk (TTD) reported a second-quarter loss of $19.1 million, or 4 cents a share, on sales of $377 million, up from $280 million a year ago. After adjusting for stock-based compensation and other effects, the online-advertising powerhouse reported earnings of 20 cents a share.
Analysts on average expected adjusted earnings of 20 cents a share on sales of $365 million, according to FactSet. Shares jumped to more than $61 in after-hours trading immediately following the release of the results, after closing with a 0.9% decline at $54.50.
Trade Desk has been under pressure amid a perceived slowdown in online-ad spending, which showed up in the earnings of big online-ad players like Facebook parent Meta Platforms Inc$(META.UK)$ and important Trade Desk clients like Roku Inc(ROKU). Many of those fears have been supported by forecasts from those companies calling for a deceleration in ad spending as companies cut back amid fears of an economic recession.
"We believe the industry has entered into a modest ad recession, where the combination of tighter budgets, less time spent online, and inflation and FX headwinds is creating elevated pressure on companies," KBCM analysts wrote in a preview of reports from Trade Desk and other ad-tech companies.
Trade Desk executives guided for third-quarter revenue of at least $385 million, while analysts on average were expecting $382 million, according to FactSet. Chief Executive Jeff Green said in a statement that his company's performance "gives us confidence that we will continue to gain market share in any market environment."
"We delivered outstanding performance in the second quarter, growing 35% versus a year ago, significantly outpacing worldwide programmatic advertising growth," he said.
Trade Desk shares have declined more than 40% so far this year, as the S&P 500 index has dropped 13.1%.