Trade Desk Revenues Rise 41%, But Stock Drops 14%

The Trade Desk, the buy-side, self-serve programmatic advertising-technology platform, saw soaring revenues in 2018 and in the most recent quarterly period. But some analysts worry that in the future, high-flying gains may be difficult.

First-quarter 2019 revenues were 41% higher to $121 million over the same period a year ago -- higher than the company’s projection of $112 million. Net income for the first quarter rose 12% to $10.2 million.

Although The Trade Desk results beat revenue and earnings estimates, its stock was down 14.5% to $189.92 after its Thursday financial results.

On Thursday, CNBC’s Jim Kramer on “Mad Money” responded to the drop in the stock’s price: "Trade Desk just had a remarkable run. It's one of the highest-valued stocks in the world... [But] they had to shoot the lights out. This happened the last time, and then the stock went up another 50 points.”

He added: “I'm not worried about Trade Desk. Let's see if anybody downgrades it on Monday or Tuesday, though."



For the next quarter, the company estimates $154 million, versus $112.3 million in the second quarter a year ago.

In 2018, The Trade Desk’s revenues grew 55% to $477 million, with $2.4 billion in gross advertising spend -- for media dollars from marketers moving through its systems. This is up 51% versus 2017. For the current 2019 year, the company expects its revenues to rise 35% to $645 million.

During the company’s press call, Jeffrey Green, founder-CEO, The Trade Desk, said programmatic, automated media buying is “still a relatively small part of total global advertising pie,” estimated at around $33 billion in 2019, rising 20% year-over-year, according to Magna Global. 

He adds that the industry’s programmatic business is growing at five times the rate of the overall worldwide advertising market.

Green says 45% of its advertising spend on its platform was in mobile, with year-over-year mobile video ad-spend growth at about 60%.

Connected TV inventory is also growing. Green says there has been three times year-over-year growth in marketing spend and three times growth on inventory available. Trade Desk has “hundreds of advertisers” spending over $100,000 a month.

The Trade Desk says it now reaches 80 million households worldwide through its connected TV inventory. The connected TV inventory includes live events, especially sports programming.

It posted high results recently for the NCAA Men’s Basketball Tournament. “We saw more spend on our platform than we have for any other live sporting event to date,” says Green. Other live sporting events include the NBA Playoffs, MLB's World Series, the Super Bowl, and the World Cup.

Back in November, Brian Wieser, then a Pivotal Research Group analyst, was concerned that although the company had an early strong lead in connected TV programmatic inventory, “the space will feature a different set of competitors that are as well or better established.”

Next story loading loading..