Trade Desk stock shoots more than 13% higher as ad-tech powerhouse’s sales, forecast top expectations

Analysts on average expected adjusted earnings of 20 cents a share on sales of $365 million, according to FactSet. Shares jumped to more than $61 in after-hours trading immediately following the release of the results, after closing with a 0.9% decline at $54.50.

Trade Desk has been under pressure amid a perceived slowdown in online-ad spending, which showed up in the earnings of big online-ad players like Facebook parent Meta Platforms Inc.
META,
-1.01%
and important Trade Desk clients like Roku Inc.
ROKU,
-6.58%.
Many of those fears have been supported by forecasts from those companies calling for a deceleration in ad spending as companies cut back amid fears of an economic recession.

“We believe the industry has entered into a modest ad recession, where the combination of tighter budgets, less time spent online, and inflation and FX headwinds is creating elevated pressure on companies,” KBCM analysts wrote in a preview of reports from Trade Desk and other ad-tech companies.

Trade Desk executives guided for third-quarter revenue of at least $385 million, while analysts on average were expecting $382 million, according to FactSet. Chief Executive Jeff Green said in a statement that his company’s performance “gives us confidence that we will continue to gain market share in any market environment.”

“We delivered outstanding performance in the second quarter, growing 35% versus a year ago, significantly outpacing worldwide programmatic advertising growth,” he said.

Trade Desk shares have declined more than 40% so far this year, as the S&P 500 index
SPX,
-0.42%
has dropped 13.1%.