The Trade Desk shares surge 21% after earnings crush Wall Street estimates

The Trade Desk reported a slight decline in third-quarter revenue on Monday, as the digital advertising technology company continued to grapple with growth challenges despite stronger-than-expected results and efforts to accelerate innovation through artificial intelligence. 

Revenue fell 0.5% to $736 million in the three months ended September 30, compared with $739 million a year earlier. Net income dropped to $38 million from $116 million, while diluted earnings per share declined to 8 cents from 23 cents.

On an adjusted basis, earnings per share came in at 33 cents, down from 45 cents a year earlier. Adjusted EBITDA fell to $266 million from $317 million, while its margin narrowed to 36% from 43%.

Chief Executive Jeff Green said results were well ahead of the company's expectations entering the quarter, but acknowledged that the business was still growing below its targeted level.

The company is stepping up efforts to strengthen relationships with major customers and improve its advertising platform through innovations including agentic AI, its Kokai Zuma platform and Audience Unlimited. It is also developing new measurement tools to help marketers better assess the impact of their advertising campaigns.

Customer retention remained above 95% during the quarter, extending a streak of more than a decade, the company said.

The Trade Desk has also expanded partnerships in connected television, including an integration with Netflix that will allow advertisers to use first-party and third-party data to target audiences on the streaming platform through Kokai starting in November. In-platform measurement capabilities are expected to follow.

Looking ahead, the company forecast fourth-quarter revenue of at least $755 million and adjusted EBITDA of at least $280 million.

Separately, the board approved an additional $731 million in share repurchase authorization, bringing the total amount available for future buybacks to $1 billion.

Green said the company had more work to do but believed its recent initiatives were improving its underlying business trajectory and positioning it for stronger, more sustainable growth.