Trade Desk (NASDAQ: TTD) stock shot up 15% after the ad tech corporation’s sales top forecast expectations. The company recorded stronger-than-expected sales amid doubts about the digital advertising industry.
Trade Desk tops estimates
Trade Desk reported $337 million in sales in the second quarter of the 2022 fiscal year, which was more than the $280 million it recorded in the same quarter of the previous fiscal year. After the stock-based compensation adjustment, the online advertising corporation recorded earnings of about $0.20 per share.
The company beat the $365 million in sales analyst estimates, according to FactSet. The company’s stock rose by over $61 per share immediately after it announced its strong financials, after closing at $54, representing a 0.9% decline.
The company has been somewhat under pressure because of the perceived go-slow in online advertising spending, which was recently seen in the earnings of the bigger online-advertising companies such as Meta Platforms Inc, Facebook’s parent company.
Trade desk executives expect $385 million in total revenue in the third quarter, which is higher than the $382 million analyst estimate.
Jeff Green, the company’s Chief Executive Officer, said:
We delivered outstanding performance in the second quarter, growing 35% versus a year ago, significantly outpacing worldwide programmatic advertising growth.
The Chief Executive claims that Trade Desk’s performance benefitted from a robust connected television advertisements approach and joint business plans, with advertisers like Albertsons Cos and Walt Disney Cos, despite a hostile macroeconomic environment.
Green also talked about encouraging discussions with Netflix, which is in the process of developing an advert-supported platform designed for Microsoft-based streaming subscribers.
The CEO added that the huge advertising brands are also increasingly avoiding the “draconian” advertising approaches.
Analyst comments
Analysts from KBCM wrote:
We believe the industry has entered into a modest ad recession, where the combination of tighter budgets, less time spent online, and inflation and FX headwinds is creating elevated pressure on companies.
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