Trade Desk posts upbeat earnings in tough ad climate, but its stock moves lower

By Emily Bary

Company logs 'another quarter of outstanding execution and share gains,' CEO says

Advertising-technology company Trade Desk Inc. sailed past quarterly earnings expectations Wednesday, but its shares fell in the extended session.

Trade Desk (TTD) logged second-quarter net income of $33 million, or 7 cents a share, whereas it posted a net loss of $19 million, or 4 cents a share, in the year-prior quarter.

The company recorded adjusted earnings per share of 28 cents, compared with 20 cents in the year-earlier period. Analysts tracked by FactSet were expecting 26 cents.

Revenue increased to $464 million from $377 million, whereas analysts were projecting $455 million.

Don't miss: Trade Desk nabs Nasdaq-100 index inclusion

The second quarter "marked another quarter of outstanding execution and share gains for the Trade Desk," Chief Executive Jeff Green said in a release. "With advances in areas such as [connected TV], retail and identity, we are helping the world's largest brands buy media on the open internet with more precision and transparency than ever."

Still, Trade Desk shares declined 3.5% in Wednesday's after-hours trading.

"While results in the quarter were solidly above guidance, based on our conversations, they fell short of buy-side expectations given the stock's recent momentum," RBC Capital Markets analyst Matthew Swanson said in a note to clients.

For the third quarter, Trade Desk expects at least $485 million in revenue, while analysts were anticipating $481 million. The company also models $185 million in adjusted earnings before interest, taxes, depreciation and amortization, whereas analysts had been looking for $183 million.

Trade Desk results come as large advertising agencies have sent cautious signals this earnings season. Streaming company Roku Inc. (ROKU), meanwhile, blew past revenue expectations for its own second quarter but signaled a challenging spending landscape for media and entertainment advertisers.

See also: Ad agency WPP cuts sales outlook over caution from U.S. technology companies

Read: Tech stocks look strong, but here's a sign the sector is actually under a lot of stress

-Emily Bary

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08-10-23 0813ET

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