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The Trade Desk (TTD) Q3 Earnings and Revenues Top Estimates

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The Trade Desk (TTD - Free Report) reported third-quarter 2021 non-GAAP earnings of 18 cents per share, beating the Zacks Consensus Estimate by 12.5%. The bottom line increased 38.5% from the year-ago quarter but remained flat sequentially.

Revenues of $301.1 million also surpassed the Zacks Consensus Estimate by 6%. The top line increased 39% year over year and 7.5% from the second quarter.

The results were driven by solid customer retention, which remained more than 95% in the reported quarter.

During the quarter, the company introduced a new trading platform named Solimar to help advertisers measure the impact of campaigns across every channel and optimize in real time. In addition, it continued industry-wide collaboration and support for Unified ID 2.0. These also aided the quarterly performance.

The Trade Desk Price, Consensus and EPS Surprise

The Trade Desk Price, Consensus and EPS Surprise

The Trade Desk price-consensus-eps-surprise-chart | The Trade Desk Quote

Operating Details

For the reported quarter, platform operations expenses were $53.4 million, up 19.1% year over year. Sales & marketing expenses increased 32.8% from the prior-year quarter to $59.3 million. Technology & development expenses of $55.8 million and general & administrative costs of $52.1 million increased 36% and 21.8% year over year, respectively.

As a percentage of revenues, platform operations, sales & marketing, technology & development, and general & administrative expenses contracted 300 basis points (bps), 100 bps, 50 bps, and 250 bps, respectively.

Consequently, income from operations was $80.4 million, up 88% year over year. As a percentage of revenues, the metric expanded 690 bps.

Adjusted EBITDA margin was 41%, which expanded 500 bps from the previous-year quarter.

Balance Sheet

As of Sep 30, 2021, cash and cash equivalents were $576.9 million compared with $476.9 million on Jun 30, 2021.

Short-term investments were $221.7 million at third quarter-end, down from $228.2 million at second quarter-end.

For the third quarter, accounts receivable was $1.6 billion compared with $1.5 billion in the second quarter.

Guidance

For fourth-quarter 2021, The Trade desk expects revenues of $388 million. The Zacks Consensus Estimate for the same is projected at $390.1 million.

Additionally, the company anticipates adjusted EBITDA to be $175 million.

Zacks Rank & Stocks to Consider

Currently, The Trade Desk has a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader technology sector include Advanced Micro Devices (AMD - Free Report) , ASE Technology (ASX - Free Report) and Mimecast Limited (MIME - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Long-term earnings growth rates for Advanced Micro Devices, Mimecast, and ASE are currently projected at 46.2%, 35%, and 26.9%, respectively.