Trade Desk Inc. reported stronger-than-expected sales and guidance Tuesday amid doubts about the online-advertising industry, sending shares more than 13% 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.
According to FactSet, analysts on average expected adjusted earnings of 20 cents a share on sales of $365 million were based on the average expected adjusted earnings of 20 cents. After the results were released, the shares jumped to more than $61 in after-hours trading, after closing with a 0.9% decline at $54.50. Trade Desk has been under pressure because of a perceived slowdown in online-ad spending, which shows up in the earnings of big online-ad players like Facebook parent Meta Platforms Inc. META, and important Trade Desk clients like Roku Inc. ROKU. Many of the fears have been supported by forecasts from those companies that have called for a deceleration of ads spending as companies cut back amid fears of an economic recession. The industry has entered a somewhat ad recession, where tighter budgets, less time spent online, and inflation and FX headwinds are creating elevated pressure on companies, according to KBCM analysts. Trade Desk executives led for third-quarter revenue of at least $385 million, while analysts were expecting to see $382 million, according to FactSet. Jeff Green, Chief Executive, said in a statement that his company's performance gives us confidence that we will continue to gain market share in any market environment. He said that we delivered outstanding performance in the second quarter, growing 35% versus a year ago, significantly outpacing worldwide programmatic advertising growth. Trade Desk shares have declined more than 40% this year, as the S&P 500 index SPX has dropped 13.1%.