Shares of Trade Desk Inc. rose on Wednesday after the ad tech company released an upbeat outlook that helped allay fears about the digital ad market.
Chief Executive Officer Jeff Green was positive about the company’s earnings and loss performance relative to peers, saying the company grew 24% in the fourth quarter while most of its “major competitors” experienced negative growth.
TTD Trade Desk,
revenue rose to $491 million from $396 million, while analysts tracked by FactSet had forecast $490 million.
“I don’t think in six years of being a public company, we have never had such superiority in the industry as we did in 2022,” he said, according to a transcript provided by AlphaSense/Sentieo. “And that means we can be absolutely sure that our share is growing and that our platform continues to gain traction with advertisers.”
Shares of Trade Desk rose 28% in morning trading. Shares of streaming media company Roku Inc. ROKU,
which is due to the publication of the results after the close of the call, rose more than 7%.
Trade Desk, a software-based advertising technology company for connected TV, sees this area of the market as particularly attractive right now.
“Not only is the shift from linear to CTV driving a significant increase in digital spend as advertisers move dollars from linear TV to connected TV, but the increase in spending is happening outside of walled gardens as advertisers switch spending 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 to $8 million, or 2 cents a share, a year earlier. On an adjusted basis, Trade Desk said it earned 38 cents per share, up from 42 cents per share a year earlier, but ahead of the FactSet consensus of 35 cents per share.
In the first quarter, management expects revenue of at least $363 million, as well as about $78 million in adjusted earnings before interest, taxes, depreciation and amortization (Ebitda).
FactSet’s consensus was $358 million in revenue and $75 million in adjusted earnings.
“2023 is going to be the year everything in TV changes,” Greene told investors during a conference call. “The marketplace needs an upfront that is always on but also uses data to ensure that content owners sell fewer, more relevant ads for a higher CPM and advertisers get more performance.” CPM stands for cost per thousand impressions and measures how much advertisers pay for impressions.
The company also announced on Wednesday that its board of directors has authorized it to buy back up to $700 million worth of its shares.
“The new share buyback program is designed to help offset the impact of future share dilution resulting from employee issuance of shares,” Trade Desk said in a statement.