Trade Desk Inc., an advertising-technology company, exceeded quarterly earnings expectations on Wednesday. However, despite the positive results, its shares experienced a decline during after-hours trading.
Financial Performance
In the second quarter, Trade Desk recorded a net income of $33 million, or 7 cents per share. This is in contrast to a net loss of $19 million, or 4 cents per share, in the same quarter of the previous year. Adjusted earnings per share for the quarter were 28 cents, compared to 20 cents in the year-earlier period. Analysts surveyed by FactSet had expected earnings of 26 cents per share.
Revenue for the quarter rose to $464 million from $377 million, surpassing analysts' projections of $455 million.
Positive Outlook and Growth
The Chief Executive Officer of Trade Desk, Jeff Green, expressed satisfaction with the company's performance in the second quarter. He stated that they have achieved outstanding execution and gained market share. With advancements in areas such as connected TV, retail, and identity, Trade Desk is enabling the world's largest brands to purchase media on the open internet more precisely and transparently than ever before.
Despite the positive outlook, Trade Desk shares experienced a decline of approximately 6% during after-hours trading. Analyst Matthew Swanson from RBC Capital Markets noted that while the results exceeded guidance, they fell short of buy-side expectations due to recent momentum in the stock.
Third Quarter Projections
For the third quarter, Trade Desk anticipates revenue of at least $485 million, surpassing analysts' estimates of $481 million. The company also expects adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $185 million, while analysts had predicted $183 million.
Advertising Industry Trends
Trade Desk's strong performance comes at a time when other large advertising agencies are displaying caution during this earnings season. Additionally, streaming company Roku Inc. reported significant revenue growth in the second quarter but highlighted the challenging spending landscape for media and entertainment advertisers.
In another related development, ad agency WPP has revised its sales outlook due to caution from U.S. technology companies.
Overall, the performance of Trade Desk reflects its resilience in the advertising technology sector. Despite market challenges, the company continues to exhibit growth and deliver value to its clients.
