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The Trade Desk (TTD) Q1 Earnings and Revenues Top Estimates
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The Trade Desk (TTD - Free Report) reported first-quarter 2023 non-GAAP earnings of 23 cents per share, beating the Zacks Consensus Estimate by 76.92% and surging 9.5% year over year.
Revenues of $383 million also surpassed the Zacks Consensus Estimate by 5%. The top line soared 21% year over year.
During first-quarter 2023, Customer retention remained over 95%.
The Trade Desk witnessed strong momentum around key initiatives like Connected TV, Shopper Data, Unified ID 2.0, OpenPath and new data marketplace.
The Trade Desk’s Unified ID 2.0 (UID2) is an industry-wide approach to identity that preserves the value of relevant advertising, while putting user control and privacy at the forefront. UID2 is an upgrade and alternative to third-party cookies.
During the reported quarter, The Trade Desk extended its support to Comcast’s (CMCSA - Free Report) NBCUniversal by implementing UID2 on Peacock across all devices and consumer touchpoints, including on CTV, the web, apps and devices.
The Trade Desk also announced its collaboration with Paramount’s (PARA - Free Report) advertising arm, integrating UID2 on the latter’s platform to scale identity on its CTV inventory.
Additionally, in February, The Trade Desk announced a new integration with Rave, a leading group video-viewing platform providing support and enabling UID2 on their platform.
Operating Details
Adjusted EBITDA in first-quarter 2023 plunged 10.1% year over year to $108.7 million. Adjusted EBITDA margin was 28.4%, which contracted 1000 basis points (bps) on a year-over-year basis.
Operating expenses increased 22.2% year over year to $406.1 million, driven by higher Sales and Marketing (S&M) expenses, soaring 37.5% year over year to $97.2 million.
Platform operations expenses were $84.9 million, up 32.8% year over year. General & Administrative (G&A) costs increased 3.6% from the prior-year quarter’s levels to $130.3 million. Technology & development expenses of $93.7 million increased 30.2% year over year.
As a percentage of revenues, G&A declined from the year-ago quarter’s 39.9% to 34% in the reported quarter.
Platform operations, S&M and technology & development expenses increased 190bps, 300 bps and 160 bps to 22.2%, 25.4% and 24.5%, respectively.
Loss from operations was $23.3 million against the year-ago quarter’s operating loss of $17.1 million.
Balance Sheet
As of Mar 31, 2023, cash and cash equivalents were $892.7 million compared with $1.03 billion on Dec 31, 2022.
Cash flow from operations was $187.6 million in the first quarter compared with fourth-quarter 2022 figure of $173 million.
Non-GAAP free cash flow was $177 million compared with $123 million reported in the previous quarter.
Guidance
For second-quarter 2023, The Trade Desk expects revenues of at least $452 million.
Additionally, the company anticipates adjusted EBITDA to be nearly $160 million.
Zacks Rank & A Stock to Consider
Currently, The Trade Desk has a Zacks Rank #3 (Hold).
The company’s shares have gained 44.9% year to date compared with the Zacks Computer & Technology sector’s increase of 19.7%.
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The Trade Desk (TTD) Q1 Earnings and Revenues Top Estimates
The Trade Desk (TTD - Free Report) reported first-quarter 2023 non-GAAP earnings of 23 cents per share, beating the Zacks Consensus Estimate by 76.92% and surging 9.5% year over year.
Revenues of $383 million also surpassed the Zacks Consensus Estimate by 5%. The top line soared 21% year over year.
During first-quarter 2023, Customer retention remained over 95%.
The Trade Desk witnessed strong momentum around key initiatives like Connected TV, Shopper Data, Unified ID 2.0, OpenPath and new data marketplace.
The Trade Desk Price, Consensus and EPS Surprise
The Trade Desk price-consensus-eps-surprise-chart | The Trade Desk Quote
Expanding Customer Base
The Trade Desk’s Unified ID 2.0 (UID2) is an industry-wide approach to identity that preserves the value of relevant advertising, while putting user control and privacy at the forefront. UID2 is an upgrade and alternative to third-party cookies.
During the reported quarter, The Trade Desk extended its support to Comcast’s (CMCSA - Free Report) NBCUniversal by implementing UID2 on Peacock across all devices and consumer touchpoints, including on CTV, the web, apps and devices.
The Trade Desk also announced its collaboration with Paramount’s (PARA - Free Report) advertising arm, integrating UID2 on the latter’s platform to scale identity on its CTV inventory.
Additionally, in February, The Trade Desk announced a new integration with Rave, a leading group video-viewing platform providing support and enabling UID2 on their platform.
Operating Details
Adjusted EBITDA in first-quarter 2023 plunged 10.1% year over year to $108.7 million. Adjusted EBITDA margin was 28.4%, which contracted 1000 basis points (bps) on a year-over-year basis.
Operating expenses increased 22.2% year over year to $406.1 million, driven by higher Sales and Marketing (S&M) expenses, soaring 37.5% year over year to $97.2 million.
Platform operations expenses were $84.9 million, up 32.8% year over year. General & Administrative (G&A) costs increased 3.6% from the prior-year quarter’s levels to $130.3 million. Technology & development expenses of $93.7 million increased 30.2% year over year.
As a percentage of revenues, G&A declined from the year-ago quarter’s 39.9% to 34% in the reported quarter.
Platform operations, S&M and technology & development expenses increased 190bps, 300 bps and 160 bps to 22.2%, 25.4% and 24.5%, respectively.
Loss from operations was $23.3 million against the year-ago quarter’s operating loss of $17.1 million.
Balance Sheet
As of Mar 31, 2023, cash and cash equivalents were $892.7 million compared with $1.03 billion on Dec 31, 2022.
Cash flow from operations was $187.6 million in the first quarter compared with fourth-quarter 2022 figure of $173 million.
Non-GAAP free cash flow was $177 million compared with $123 million reported in the previous quarter.
Guidance
For second-quarter 2023, The Trade Desk expects revenues of at least $452 million.
Additionally, the company anticipates adjusted EBITDA to be nearly $160 million.
Zacks Rank & A Stock to Consider
Currently, The Trade Desk has a Zacks Rank #3 (Hold).
The company’s shares have gained 44.9% year to date compared with the Zacks Computer & Technology sector’s increase of 19.7%.
A better-ranked stock that investors can consider in the broader sector is NVIDIA (NVDA - Free Report) , which carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
NVIDIA shares have outperformed the sector year to date, gaining 97.6%. NVDA is set to report first-quarter fiscal 2024 results on May 24.