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Is The Trade Desk A Buy Right Now Following Q3 Earnings?

The Trade Desk shares popped 29% after it announced Q3 earnings beyond expectations — could it be a dominant player in digital advertising?

The Trade Desk (NASDAQ: TTD) reported earnings before the bell on Monday and shares are up over 29% on the positive news. The company had a record quarter for revenue that CEO Jeff Green attributed to “more data driven choices by advertisers”.

What does The Trade Desk do?

The Trade Desk is a digital advertising company; it uses AI and data analytics to improve marketing efforts and ad placement for content creators, publishers, and other businesses. It leverages big data through its own data and third parties in order to get the best price as well as optionality for its customers. This can be for mobile, social, browsers, connected TVs to name a few. The Trade Desk also runs ‘The Edge Academy’, an online education tool for businesses and digital marketers to improve their results. The Trade Desk focuses on creating an open internet where it is aiming to create relevant ads in exchange for free content. 

The Trade Desk’s Q3 Earnings

The Trade Desk reported record revenue that grew over 39% to $301 million on a year-over-year (YoY) basis, allowing the company to raise guidance for Q4 revenue to $388 million. Net income came in at $59.4 million v.s. $42.1 million expected, representing a 40% increase from the year prior as well. The launch of its Solimar platform gives the ability to fully realize first-party data potential for users, and it has also updated the user interface (UI).

Reasons to like The Trade Desk

It is one of the top-rated companies to work for in the world and has won several awards to prove it. A quick trip over to Glassdoor, the company reviews platform, will back this up with an overall 4-star rating and a 95% CEO approval rating. Company culture is a huge factor that can drive big performance boosts across the board. The Trade Desk is growing rapidly as we can see from its results; it even received industry recognition taking the Number 6 spot on Fortune’s 100 Fastest Growing Companies for 2021 list.

There’s definitely one issue as a digital advertiser, and that’s Big Tech. Google (NASDAQ: GOOG), Meta (NASDAQ: FB) (formerly Facebook), among others have a commanding position on digital ad spend. Jeff Green ended things on a bright note though, seeing his competitors as those who are trying to control the internet, and his company’s intention is to enable it, and that’s where it is positioning itself.

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