Trade Desk Inc. Faces a Sharp Decline in After-Hours Trading Post Disappointing Forecast

The stock of Trade Desk Inc. TTD witnessed a significant slump, dropping 28% during after-hours trading on Thursday. This notable decline came as a response to the company's forecast for the holiday quarter which fell short of expectations, tarnishing an otherwise positive report of its latest quarter earnings that surpassed forecasts.

Quarterly Earnings Surpass Expectations

Trade Desk reported third-quarter net income of $39 million, or 8 cents a share, escalating from the $16 million or 3 cents per share during the same period last year. In an adjusted perspective, TTD reported earnings of 33 cents per share, outperforming the analyst consensus of 29 cents as tracked by FactSet.

The surge in earnings was accompanied by a revenue increase to $493 million from the former $395 million, slightly above the analyst projections of $487 million. This reflects an accelerated revenue growth rate, going up to 25% in the third quarter from the previous 23% in the second quarter.

Chief Executive Jeff Green emphasized that this performance showcases the value advertisers place on precision, agility, and transparency in their campaigns to optimize return on investment.

Lackluster Holiday Quarter Forecast

Despite the impressive third-quarter results, the fourth-quarter projections presented by Trade Desk have raised concerns. The company estimates a revenue of at least $580 million for the holiday quarter, whereas FactSet consensus pointed towards a more optimistic figure of $610 million. In addition to revenue, the projected adjusted EBITDA is around $270 million against the analysts' expectation of $291 million.

The disappointing forecast from TTD draws an even starker contrast considering the backdrop of Roku Inc. ROKU, which recently reported signs of recovery in the video-advertising arena.

Before the after-hours trading plunge, Trade Desk shares had experienced a significant upward movement, with an advance of 71% for the year.

TradeDesk, StockPerformance, EarningsForecast