Trade Desk shares plunge about 30% after ad-tech company issues weak guidance

The Trade Desk shares plunged about 30% in after-hours trading on Thursday after the ad-tech company issued fourth-quarter revenue guidance that fell well short of analysts’ estimates.

Third-quarter results topped estimates. Here’s how the company did:

• Earnings per share: 33 cents, adjusted vs. 29 cents expected by LSEG, formerly known as Refinitiv
• Revenue: $493 million vs. $487.04 million expected by LSEG

For the December period, Trade Desk projected revenue of at least $580 million, trailing the $610 million that was expected by analysts, according to LSEG.

A Trade Desk spokesperson told CNBC that the company’s fourth-quarter guidance came “in slightly below consensus, largely because the transitory cautiousness from advertisers in certain verticals, such as U.S. auto and media/entertainment due to the strikes.”

Laura Schenkein, the chief financial officer for The Trade Desk, said during a call with analysts that the company has “seen more macro-economic uncertainty at the start of q4.”

Trade Desk said third-quarter sales jumped 25% from $493 million a year earlier. Net income increased to $39 million, or 8 cents a share, from $16 million, or 3 cents, a year earlier.

“This performance underlines the premium that advertisers are placing on precision, agility and transparency as they seek to maximize returns from their campaigns,” CEO Jeff Green said in a statement.

The stock fell to $53.49 in extended trading after closing on Thursday at $76.81. Prior to the after-hours move, the shares were up 71% for the year.

Trade Desk’s technology helps brands reach relevant potential customers across the internet and has flourished in the world of streaming and online video. While most independent ad-tech companies have struggled to compete with Google’s systems, Trade Desk has built a business, valued at $38 billion prior to its earnings report, largely by helping companies shift ad budgets from traditional television to the connected TV market.

Meta, Snap and Pinterest all noted a softening of the digital advertising market in their latest earnings reports due in part to the Israel-Hamas war.

Susan Li, Meta’s chief financial officer, said the company widened its guidance because of unpredictability surrounding the Middle East Crisis, while Snap said it would not provide official guidance “due to the unpredictable nature of war.”

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