TLDR
- The Trade Desk posted Q3 earnings of $0.45 per share, exceeding the $0.44 consensus by one cent
- Revenue of $739.43 million beat estimates and grew 17.7% year-over-year from $628.02 million
- Shares experienced dramatic volatility, surging 13% before reversing to fall nearly 5% in after-hours trading
- The company projects Q4 revenue of at least $840 million, above the $830.9 million analyst estimate
- A new $500 million buyback program was approved after the previous authorization was completed
The Trade Desk released third-quarter results that exceeded analyst expectations. The earnings beat sparked a rollercoaster ride for investors in extended trading.
The advertising technology company reported earnings of $0.45 per share. That topped the Street’s estimate of $0.44 per share by a penny.
Revenue came in at $739.43 million for the September quarter. The figure beat forecasts by $19.7 million and jumped 17.7% from $628.02 million a year earlier.
The stock’s reaction revealed investor uncertainty. Shares initially rocketed 13% higher after the numbers dropped.
But the rally didn’t last. Within a short period, the entire gain disappeared and shares turned negative, falling as much as 5%.
Revenue Outlook and Margin Performance
The company provided forward guidance for the current quarter. Management expects revenue to reach at least $840 million in Q4.
That outlook sits above the consensus estimate of $830.9 million. Adjusted EBITDA guidance of $375 million also exceeded the $275.7 million forecast.
Margin performance showed improvement during Q3. Adjusted EBITDA rose 23% to $317 million, producing a 43% margin.
Net income grew to $116 million or $0.23 per share. Last year’s comparable quarter delivered $94 million or $0.19 per share.
The bottom-line growth outpaced revenue expansion. This suggests improving operational leverage across the business.
Retention Metrics and Shareholder Returns
Customer retention remained healthy throughout the quarter. The metric held above 95% for the period.
High retention rates are crucial for platform businesses. They indicate customer satisfaction and predictable revenue streams.
The board took action on capital allocation. Directors authorized an additional $500 million for stock repurchases.
This new authorization replaced the previous buyback program that was fully utilized. Share repurchases can boost earnings per share and support stock valuations.
The company has beaten earnings estimates in three of the last four quarters. Revenue forecasts were also exceeded three times during that stretch.
Year-to-date performance has been challenging. Shares are down 59.4% since the start of 2025 compared to the S&P 500’s 15.6% gain.
Analyst estimates for Q4 call for earnings of $0.59 per share on revenue of $831.27 million. Full-year projections stand at $1.76 per share with revenue of $2.86 billion.
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