Shares of Trade Desk Inc. surged on Wednesday after the advertising-technology company issued an upbeat outlook that helped quell fears about the digital-ad market.
Chief Executive Jeff Green spoke positively on the earnings call about the company’s performance relative to rivals, saying that the company grew 24% in the fourth quarter while most of its “large competitors” saw negative growth.
Trade Desk’s
TTD,
revenue rose to $491 million from $396 million, while analysts tracked by FactSet were modeling $490 million.
“I don’t think we’ve ever had the level of industry outperformance in our six years or so as a public company as we did in 2022,” he said, according to a transcript provided by AlphaSense/Sentieo. “And it means that we can be very confident that we’re gaining share and that our platform continues to gain traction with advertisers.”
Shares of Trade Desk were up 28% in morning action. Shares of streaming-media company Roku Inc.
ROKU,
which is due to post results after the closing bell, were up more than 7%.
Executives at Trade Desk, which makes programmatic ad technologies for connected television, see that area of the market as particularly compelling right now.
“Not only is the shift from linear to CTV driving significant growth in digital spend as advertisers shift dollars from linear TV to connected TV, but more spend is happening outside the walled gardens as advertisers shift spend from user-generated content to premium streaming content,” Green shared.
The company reported fourth-quarter net income of $71 million, or 14 cents a share, compared with $8 million, or 2 cents a share, in the year-earlier period. On an adjusted basis, Trade Desk said it earned 38 cents a share, down from 42 cents a share a year before but ahead of the FactSet consensus, which was for 35 cents a share.
For the first quarter, management anticipates at least $363 million in revenue, along with about $78 million in adjusted earnings before interest, taxes, depreciation and amortization (Ebitda).
The FactSet consensus was for $358 million in revenue and $75 million in adjusted Ebitda.
“2023 will be the year that everything in TV changes,” Green told investors on the earnings call. “The market needs an upfront that is always on, but also leverages data so that content owners sell fewer, more relevant ads at higher CPMs and advertisers get more efficacy.” CPM stands for “cost per mille” and measures what advertisers pay for impressions.
The company also announced Wednesday that its board of directors has authorized it to buy back up to $700 million of its stock.
“The new share-repurchase program is designed to help offset the impact of future share dilution from employee stock issuances,” Trade Desk said in a release.
Source: https://www.marketwatch.com/story/trade-desk-stock-shoots-higher-after-earnings-outlook-top-expectations-c12ce426?siteid=yhoof2&yptr=yahoo