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Digital advertising placement firm Trade Desk reported better than expected third quarter earnings Thursday maintaining guidance. However $TTD fell 12%  with the market looking for more news on China after the agreements in China with Baidu $BIDU. $TTD has been a hot IPO since it went public at 18 on Sept. 21 last year and trades under high expectation as a result. 

Trade Desk IPO

With President Trump in China and existing agreements in China with Baidu $BIDU it was expected by fast money that deals with Tencent Holdings $TCEHY and Alibaba Group Holdings $BABA would be announced. Trade Desk has positioned itself in most of the major sectors in the economy including financial, auto manufacturers, apparel, food and restaurants. 

$TTD is at the other end of the spectrum of IPOs Like $SNAP and $BLUE. Though after losing 12% on today's earnings you would argue differently, the perils of being a momentum stock. Notably after $SNAP earnings miss Tuesday they announced that Tencent had purchased 14% of the company. That deal augers well for what $TTD is trying to achieve in China and the non-announcement hurt $TTD

Earnings: EPS of 35 cents beating analysts  expected a 17% drop in profit to 20 cents a share on revenue of $79.4 million more than the expected 45% increase in revenue to $77 million.

Reaction: Trade Desk NASDAQ $TTD $52.36 -6.92 -11.67% 

 trading desk

Third Quarter and Recent Business Highlights Include:

•  Continued Omni-channel Growth: Omni-channel solutions remain a strategic focus for The Trade Desk $TTD as the industry continues shifting toward transparency and programmatic buying.  Specific channel highlights include:

  • Mobile (In-App, Video and Web) increased to 40% of total spend for the quarter highlighting the growing importance of this channel to advertisers.
  • Mobile In-App grew 77% from Q3 2016 to Q3 2017.
  • Mobile Video grew 140% from Q3 2016 to Q3 2017.
  • Connected TV grew 159% from Q3 2016 to Q3 2017.

•  Strong Customer Retention: Customer retention remained over 95% during the quarter, as it has for the previous 15 quarters.

Fourth Quarter and Revised Full Year 2017 Outlook:

CEO and founder Mr. Green said, “We believe we have a strong business model that benefits from faster revenue growth than the programmatic industry and we are excited about the momentum we have as we close out the year and enter 2018. For the full year, we are raising our revenue guidance and adjusted EBITDA guidance. We now expect revenue to be about $306 million and adjusted EBITDA for 2017 to be about $90 million.”

The Trade Desk is providing its financial targets for the fourth quarter of 2017 and targets for its fiscal year 2017. The Company’s financial targets are as follows:

Fourth Quarter 2017:

  • Revenue of $101 million
  • Adjusted EBITDA of $34 million

Full Year 2017:

  • Revenue about $306 million, revised from $303 million
  • Adjusted EBITDA about $90 million, revised from $88 million

About Trade Desk

Trade Desk operates a self-service internet-based platform that enables advertising buyers to create, manage, and optimize digital ad campaigns across multiple media and devices.

"The Trade Desk powers the most sophisticated buyers in advertising technology. Founded by the pioneers of real-time bidding, The Trade Desk has become the fastest growing demand-side platform in the industry by offering agencies, aggregators, and their advertisers best-in-class technology to manage display, social, mobile, and video advertising campaigns.

The Trade Desk empowers buyers at the campaign level with the most expressive bid capabilities in market, full-funnel attribution, and detailed reporting that illustrates the consumer journey from initial impression to conversion. By maintaining a pure buy-side focus, The Trade Desk delivers on branding and performance for clients worldwide"  From Trade Desk

Trade Desk competes with Google parent Alphabet $GOOGL and smaller companies such as AppNexus.

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