Trade Desk Stock Craters 30% On Weak Q4, CTV Ad Outlook

The Trade Desk, the demand-side ad platform that connects with major streaming TV apps, issued a warning about a slowdown in digital and CTV advertising on Thursday, which sent its stock cratering 30% in after-market trading to $55.23. 

Also collateral stock damage in after-market trading on Thursday was seen with digital platform stocks including Meta Platforms, down 1.2%; Snap, losing 2.8%; and Pinterest, 2.5% lower. 

Mid-day Friday trading of Trade Desk's stock sank another 17%.

Jeff Green, chief executive officer of The Trade Desk, on a conference call with analysts on Thursday said the company began seeing a reduction in digital and CTV ad spending beginning in October, especially among automotive and consumer electronics brands. Also there was strike-related challenges across media and entertainment marketers.



Analysts say connected TV advertising could be affected -- in part.

Michael Morris, media analyst of Guggenheim Securities, says: “We believe the softness was more weighted to mobile, display and lower-end CTV demand with most CTV and retail media demand remaining strong.”

Guggenheim estimates CTV advertising represents around 42% to 45% share of total The Trade Desk revenues.

The Trade Desk now says for the quarter ending in December, it expects $580 million in revenue. Analysts had been estimating the company would see $614 million in the period. 

The Trade Desk has been making a big push into streaming and CTV. For example, on its platform, advertisers can buy streaming advertising and CTV inventory from Warner Bros. Discovery and NBCUniversal.

In addition, during the third quarter, the company said these companies integrated its open-source identity graph -- Unified ID 2.0 -- across all their CTV platforms and devices, such as Max and Discovery+ (Warner Bros. Discovery) and Peacock (NBCUniversal).

In recent periods, The Trade Desk has talked up big rising sales and demand for CTV and streaming inventory from major legacy media companies.

For the third quarter the DSP witnessed 25% growth in revenue to $493 million versus the third quarter a year ago. Net income was at $39 million, doubled that versus the same period the year before ($16 million).

This story has been updated.

Next story loading loading..