The Trade Desk's Q3 Earnings Highlights Strong, Broad-Based Growth

The Trade Desk (NASDAQ: TTD) posted strong third-quarter results after market close on Thursday. Beating top- and bottom-line estimates and raising its full-year outlook, the quarter's performance highlights the ad-buying company's ability to capitalize on rising demand for programmatic advertising from brands and ad agencies.

Even more, The Trade Desk is benefiting from broad-based growth across its advertising channels, with ad spend soaring in mobile video, mobile in-app, connected TV, and audio.

Here's a closer look at the results.

A chalkboard sketch of a bar chart with an arrow highlighting a growth trend.

Image source: Getty Images.

The Trade Desk's third-quarter earnings: Key financial metrics

The Trade Desk's third-quarter revenue rose 38% year over year to $164.2 million. This was ahead of analysts' average forecast for revenue of $163.8 million and management's guidance for revenue of $163 million. Earnings per share rose 15% year over year to $0.75, beating a consensus estimate of $0.67. 

Metric Q3 2019 Q3 2018 Change
Revenue $164.2 million $118.8 million 38%
Non-GAAP earnings per share $0.75 $0.65 15%

Data source: The Trade Desk third-quarter earnings release. GAAP = general accepted accounting principles.

Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) rose 30% year over year to $47.8 million.

"Revenue growth of 38% significantly outpaced worldwide programmatic advertising growth," said The Trade Desk CEO Jeff Green in the tech company's third-quarter earnings call. "The world's leading brands and agencies are increasingly using our platform to apply data-driven strategies to drive precision and value across their campaigns."

Robust channel growth in mobile, audio, and CTV

The Trade Desk's fastest-growing advertising channels continued to see rapid growth in advertiser spend.

Mobile video and mobile in-app ad spend increased 50% and 58% year over year -- about in line with growth rates for these channels in Q2. Total ad spend in the company's mobile channels was 48% of gross spend, up from 46% of gross spend in the year-ago quarter.

Advertiser spend in audio jumped 160% year over year. While this was sharp growth, it marked a deceleration from 270% growth in Q2.

Spending in connected TV (CTV) rose 145% year over year, about in line with 150%-plus growth in Q2.

As usual, Green was particularly optimistic about CTV as a growth driver for the company, giving the channel special attention in the company's earnings release. "TV advertising is the largest campaign segment for many leading brands, and the digitization of TV is driving advertisers to apply data to TV ad campaigns for the first time," Green said. "As more broadcasters make their content available via streaming services, we are better positioned than anyone to take advantage of this significant shift."

Looking ahead

As the "biggest brands in the world continue to shift their advertising spending to programmatic on our platform," Green said he was optimistic about the current quarter. The company lifted its full-year outlook, guiding for revenue of "at least $658 million," up from a previous forecast for revenue of $653 million or more.

In addition, the company said it now expects full-year adjusted EBITDA of $209 million, or about $31.8% of revenue. Management previously expected 2019 adjusted EBITDA of $201 million.

Find out why The Trade Desk is one of the 10 best stocks to buy now

Motley Fool co-founders Tom and David Gardner have spent more than a decade beating the market. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has quadrupled the market.*

Tom and David just revealed their ten top stock picks for investors to buy right now. The Trade Desk is on the list -- but there are nine others you may be overlooking.

Click here to get access to the full list!


*Stock Advisor returns as of June 1, 2019


Daniel Sparks has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends The Trade Desk and recommends the following options: long January 2020 $60 calls on The Trade Desk and short January 2020 $125 calls on The Trade Desk. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story


Latest Markets Videos

    The Motley Fool

    Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

    Learn More