The Trade Desk's shares climbed about 15.5% to USD 14.93 after the advertising technology company delivered third-quarter revenue and adjusted earnings above forecasts. The rally came despite a small annual sales decline and sharply lower net income, as investors responded to AI upgrades and a stronger-than-expected revenue outlook.
Revenue totaled USD 736 million against expectations of roughly USD 651 million, according to Artificial Intelligence News & Cryptocurrency News. Adjusted earnings were 33 cents a share, surpassing the 25 cents analysts had anticipated. Originally reported by Artificial Intelligence News & Cryptocurrency News.
Profit Declines Temper Revenue Beat
The sales result exceeded the company's own expectations, but revenue was down 0.5% from a year earlier. Net income dropped to USD 38 million, compared with USD 116 million in the corresponding quarter.
Adjusted EBITDA fell to USD 266 million from USD 317 million. Its margin contracted to 36% from 43%, underscoring the profitability challenges behind the share-price rebound.
AI Tools and Netflix Targeting Expand
Chief Executive Jeff Green identified artificial intelligence as an opportunity to improve digital advertising. The company is expanding tools designed to automate routine campaign work and improve audience targeting.
Its Audience Unlimited initiative uses AI and third-party data to find prospective customers. Early testing produced customer acquisition cost reductions exceeding 30%, alongside a 14% decline in advertising costs.
The company also unveiled Kokai Zuma, an updated advertising platform with a simpler interface and additional AI functions. Starting in November, advertisers can target Netflix audiences through Kokai using first-party and third-party data; measurement tools are also planned.
Buyback Capacity Reaches USD 1 Billion
The Trade Desk added USD 731 million to its repurchase authorization, bringing available buyback capacity to USD 1 billion. Customer retention stayed above 95% in the September quarter, extending a record maintained for more than a decade.
For the fourth quarter, management projected revenue of at least USD 755 million, above analysts' expectations, and adjusted EBITDA of at least USD 280 million. The company nevertheless acknowledged that revenue growth remains short of its longer-term ambitions.
Originally reported by Artificial Intelligence News & Cryptocurrency News.