Trade Desk (TTD) Q3 Earnings Beat, Revenues Increase Y/Y (Revised)

The Trade Desk Inc. (NASDAQ:TTD) reported third-quarter 2016 earnings (including stock-based compensation) of 24 cents per share, which beat the Zacks Consensus Estimate by a penny. Excluding stock-based compensation, non-GAAP earnings surged 58.6% from the year-ago quarter to 23 cents.

Total revenue was almost $53 million, up 84.1% from the year-ago quarter and ahead of the Zacks Consensus Estimate of $47 million.

Quarter Details

Trade Desk completed its Initial Public Offering (IPO) on Sep 21, 2016. Net proceeds from the IPO were almost $73.6 million.

The company’s top-line growth was driven by higher spending through newer channels such as Mobile and Audio. Customer retention remained over 95% during the quarter.

Trade Desk launched a number of new product features and enhancements during the quarter. This includes new user interface update, a new version of the company’s viewability product and hyperlocal mobile targeting product.

Adjusted EBITDA soared 77.7% year over year to $16.6 million.

Operating expenses as percentage of revenues surged 350 basis points (bps) to 71.6% in the reported quarter. This was primarily due to higher general & administrative (G&A) expense as a percentage of revenues that increased 450 bps from the year-ago quarter.

Further, technology and development (T&D) expense as percentage of revenues increased 190 bps. These increases were partially offset by lower platform operations and sales & marketing (S&M) expenses, which declined 110 bps and 190 bps, respectively.

As a result, operating margin contracted 350 bps from the year-ago quarter to 28.4%.

Guidance

For fourth-quarter 2016, Trade Desk anticipates revenues of $62 million and adjusted EBITDA margin of 30%.

Zacks Rank & Key Picks

Trade Desk carries a Zacks Rank #3 (Hold). Some better-ranked stocks include Facebook (NASDAQ:FB) , TrueCar (NASDAQ:TRUE) and Zillow Group (NASDAQ:ZG) . All the three stocks have a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Long-term earnings growth for Facebook, TrueCar and Zillow is currently pegged at 28.8%, 100% and 30%, respectively. Trade Desk is expected to grow at 4%.

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(We are reissuing this article to correct a mistake. The original article, issued on November 14, 2016, should no longer be relied upon.)