Trade Desk shares plunge about 30% on weak guidance tied to auto, Hollywood strikes


Jeff Green, CEO, The Trade Desk
Scott Mlyn | CNBC

The Trade Desk shares plunged about 30% in after-hours trading on Thursday after the ad-tech company issued fourth-quarter revenue guidance that fell well short of analysts’ estimates.

Third-quarter results topped estimates. Here’s how the company did:

  • Earnings per share: 33 cents, adjusted vs. 29 cents expected by LSEG, formerly known as Refinitiv
  • Revenue: $493 million vs. $487.04 million expected by LSEG

For the December period, Trade Desk projected revenue of at least $580 million, trailing the $610 million that was expected by analysts, according to LSEG.

The company didn’t provide a reason for the shortfall.

Trade Desk said third-quarter sales jumped 25% from $493 million a year earlier. Net income increased to $39 million, or 8 cents a share, from $16 million, or 3 cents, a year earlier.

“This performance underlines the premium that advertisers are placing on precision, agility and transparency as they seek to maximize returns from their campaigns,” CEO Jeff Green said in a statement.

The stock fell to $53.49 in extended trading after closing on Thursday at $76.81. Prior to the after-hours move, the shares were up 71% for the year.

The online advertising tech firm has made a name for itself as platform that companies can use to run digital ads via various streaming-and-online video services. Trade Desk has grown into a company with a market cap over $35 billion, largely benefiting from a rise of companies shifting advertising budgets from traditional television to the connected TV market.

Meta, Snap and Pinterest all noted a softening of the digital advertising market in recent weeks due in part to the Israel-Hamas war when the social media firms reported their third-quarter earnings in October.

Susan Li, Meta’s chief financial officer, said that the social networking giant widened its guidance due to unpredictability as a result of the Middle East Crisis, while Snap said it would not provide an official guidance “due to the unpredictable nature of war.”

Pinterest CEO Bill Ready told analysts that while the company saw some brand advertisers temporarily pause their campaigns due to geopolitical concerns, they have since returned.

WATCH: Final trades: Meta, Comcast, Cisco Systems and more

Articles You May Like

401(k) balances are down, and ‘last resort’ hardship withdrawals are up
Tax Extenders in 2023: Three Major Business Provisions and an Expanded Child Credit?
Why Warren Buffett wouldn’t have become the greatest investor ever without Charlie Munger
IBM to end 401(k) match, offering a hybrid plan. Other firms can’t ‘pull off this type of change,’ expert says
Charlie Munger’s greatest bits of investing advice from over the years