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Trade Desk (TTD) to Report Q3 Earnings: What's in the Cards?

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The Trade Desk (TTD - Free Report) is set to report third-quarter 2018 results on Nov 8.

The company delivered average four-quarter positive earnings surprise of 80.9%. In the last reported quarter, the company's earnings of 60 cents per share topped the Zacks Consensus Estimate of 44 cents per share. The figure increased 15.4% from the year-ago quarter.

Revenues increased 54.3% year over year to $112.3 million and beat the Zacks Consensus Estimate of $104 million. The year-over-year growth was primarily driven by additional large customer wins and robust international growth.

For the third quarter, Trade Desk expects revenues of $116 million.

The Zacks Consensus Estimate for the quarter to be reported is pegged at 49 cents per share, indicating year-over-year increase of 40%. Further, the consensus mark for revenues is pegged at $116.6 million, increasing 47% from the year-ago quarter.

Let’s see how things are shaping up for the upcoming announcement.

Factors Likely to Influence Q3 Results

The Trade Desk continues to win advertisers, which is evident from the fact that the top 200 global advertisers joined its platform in the last reported quarter. The company also stated that Ad Age's top 50 worldwide advertisers increased their spending by almost 100% year over year over in the last 12 months. The momentum is expected to drive top-line growth.

Moreover, the company is working with some of the biggest publishers like Google, Alibaba, Pandora, Spotify, CBS, Dish Network, Discovery and DirecTV. This is expected to drive top-line growth in the near term.

In the last reported quarter, the company witnessed great momentum in Connected TV business, which doubled sequentially. Further, increased mobile spending (up 100% year over year) as well as strong cross-device spending is expected to bode well for the company in the to-be-reported quarter.

The Trade Desk is benefiting from portfolio strength supported by the launch of innovative products. This is also helping the company retain users, which remained above 95% as reported in the previous quarter.

The company launched Next Wave in the second quarter, which accounted for 40% of Trade Desk’s engineering resources. It will enable the company to increase its technological lead over its competitors and make an impact in the fast-growing programmatic market, which is a positive.

Moreover, Trade Desk is also making an impact globally, with Germany, France, and Spain reporting 100% growth in the previous quarter.

However, increased investments in technology and development are expected to keep margins under pressure in the to-be-reported quarter.

The Trade Desk Inc. Price and EPS Surprise

What Our Model Says

According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. The Sell-rated stocks (Zacks Rank #4 or #5) are best avoided.

The Trade Desk has a Zacks Rank #2 and an Earnings ESP of +0.29%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Other Stocks With a Favorable Combination

Here are some companies, which, per our model, also have the right combination of elements to post an earnings beat this quarter:

NetApp, Inc. (NTAP - Free Report) has an Earnings ESP of +0.83% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Himax Technologies, Inc. (HIMX - Free Report) has an Earnings ESP of +66.67% and a Zacks Rank #2.

Palo Alto Networks, Inc. (PANW - Free Report) has an Earnings ESP of +0.06% and a Zacks Rank #2.

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