Advertising software maker The Trade Desk (NASDAQ:TTD) missed Wall Street’s revenue expectations in Q4 CY2024, but sales rose 22.3% year on year to $741 million. Next quarter’s revenue guidance of $575 million underwhelmed, coming in 1.2% below analysts’ estimates. Its non-GAAP profit of $0.59 per share was 3.6% above analysts’ consensus estimates.
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Revenue: $741 million vs analyst estimates of $759.5 million (22.3% year-on-year growth, 2.4% miss)
Adjusted EPS: $0.59 vs analyst estimates of $0.57 (3.6% beat)
Adjusted EBITDA: $350 million vs analyst estimates of $365.9 million (47.2% margin, 4.4% miss)
Revenue Guidance for Q1 CY2025 is $575 million at the midpoint, below analyst estimates of $582 million
EBITDA guidance for Q1 CY2025 is $145 million at the midpoint, below analyst estimates of $192.7 million
Operating Margin: 26.4%, up from 23.8% in the same quarter last year
Free Cash Flow Margin: 23.9%, down from 35.4% in the previous quarter
Market Capitalization: $59.33 billion
“The Trade Desk once again outpaced nearly every segment of digital advertising in 2024, delivering $2.4 billion of revenue – marking accelerated growth of 26% year over year – and a record $12 billion of spend on our platform. At the same time, we achieved significant profitability and cash flow. While we are proud of these accomplishments, we are disappointed that we fell short of our own expectations in the fourth quarter,” said Jeff Green, founder and CEO of The Trade Desk.
Founded by former Microsoft engineers Jeff Green and Dave Pickles, The Trade Desk (NASDAQ:TTD) offers cloud-based software that uses data to help advertisers better plan, place, and target their online ads.
The digital advertising market is large, growing, and becoming more diverse, both in terms of audiences and media. As a result, there is a growing need for software that enables advertisers to use data to automate and optimize ad placements.
A company’s long-term performance is an indicator of its overall quality. While any business can experience short-term success, top-performing ones enjoy sustained growth for years. Thankfully, The Trade Desk’s 26.9% annualized revenue growth over the last three years was solid. Its growth surpassed the average software company and shows its offerings resonate with customers, a great starting point for our analysis.
This quarter, The Trade Desk generated an excellent 22.3% year-on-year revenue growth rate, but its $741 million of revenue fell short of Wall Street’s high expectations. Company management is currently guiding for a 17% year-on-year increase in sales next quarter.
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