Trade Desk Inc. witnessed a significant drop of more than 25% in after-hours trading on Thursday after the advertising-technology company failed to meet expectations with its holiday-quarter forecast. However, the company's results for the latest quarter surpassed analysts' predictions.
In the third quarter, Trade Desk reported a net income of $39 million, or 8 cents per share, compared to $16 million, or 3 cents per share, in the same quarter last year. Adjusted earnings per share stood at 33 cents, surpassing analysts' estimate of 29 cents.
Revenue for the third quarter increased to $493 million from $395 million, beating forecasts of $487 million. Notably, revenue growth accelerated to 25% in the third quarter, up from 23% in the second quarter.
According to Chief Executive Jeff Green, "This performance underlines the premium that advertisers are placing on precision, agility, and transparency as they seek to maximize returns from their campaigns."
Looking ahead to the fourth quarter, Trade Desk expects revenue of at least $580 million, falling short of the FactSet consensus of $610 million. Furthermore, the company anticipates adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of approximately $270 million, while analysts were expecting $291 million.
Interestingly, Trade Desk's report comes shortly after Roku Inc. posted earnings signaling a potential rebound in the video-advertising market.
Despite this setback, Trade Desk shares have still seen a significant increase of 71% year-to-date.