Trade Desk's stock falls as earnings suggest the company's problems are intensifying

By Hannah Pedone

Growth slowed further in the latest quarter, while profit came up short of expectations

Trade Desk sells advertising-technology solutions, including for connected TVs.

Trade Desk shares fell after each of the company's last three earnings reports - and they're on course to post another sharp decline in the wake of the latest one.

The stock (TTD) was off over 15% in extended trading Thursday, after a downbeat outlook intensified concerns over the company's competitive positioning and its ability to navigate a volatile marketing environment.

The advertising-technology company reported revenue of $689 million for the first quarter, ahead of the FactSet analyst consensus for $679 million. That said, its revenue growth rate of 12% slowed from 14% in the fourth quarter and 25% in the year-ago period.

Trade Desk also logged 8 cents in earnings per share, below the 10 cents reported in the prior-year quarter. Analysts tracked by FactSet were expecting 9 cents.

The prior three earnings reports drove shares down between 5% and 39% in the subsequent trading session, according to Dow Jones Market Data. With each of those reports, Trade Desk beat expectations on both earnings and revenue. This time, investors are grappling with an earnings miss.

Trade Desk's revenue guidance also badly missed the mark. Management is looking for at least $750 million in the second quarter, while the FactSet consensus called for $771 million.

The adtech company has been struggling in the past year as companies have become more deliberate about their ad spending. Investors have also worried about the Trade Desk's ability to compete with Amazon.com (AMZN) in the market for connected-television ads.

Shares of Trade Desk had fallen roughly 58% in the 12 months through Thursday's close.

In March, The Information reported that OpenAI was holding early talks with the company to sell ads, which followed the AI company's launch of ads in ChatGPT. That contributed to some short-term hope around Trade Desk's beaten-down stock, but the postearnings reaction indicates renewed investor pessimism.

Read more: Arm puts a big number on its newest venture, but its stock falls

"We're focused on delivering increasing value to marketers and to help them prioritize objective, transparent and data-driven media buying on the open internet," Trade Desk CEO Jeff Green said in a press release.

See also: Fortinet's stock rockets higher as earnings help dispel fears of AI disruption

-Hannah Pedone

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05-07-26 1740ET