The Trade Desk beat projections for Q3 2024, but it wasn’t enough, apparently.
Yesterday, TTD revealed that, for the quarter, total revenue came in at $628 million — up 27% year over year. For comparison, in Q2 earnings, TTD had estimated it would bring in $619.9 million for the quarter.
So, what drove the growth?
You’ll be shocked — absolutely shocked — to know that TTD highlighted CTV as a key growth area.
Per Jeff Green, Founder and CEO of The Trade Desk, on the earnings call: “Even though it is now a considerable part of our business, CTV continues to be our fastest-growing channel. And it shows no sign of slowing down. Partners like Disney, NBCU, Walmart, Roku, LG, Netflix, and many others are deepening their relationships with us around the growing CTV opportunity. I could not be more excited about our position in CTV and the size of the growth opportunity for us in the years ahead.”
Retail media was also touted by Mr. Green. “Retail media has rapidly become one of the fastest-growing areas of our business,” he said, “a trend we expect to accelerate through 2025.”
TTD did not share specific revenue numbers, however, for either area.
Why This Matters:
CTV and retail media are high-growth categories, and TTD is chasing them — a no-brainer. This is a common theme we’ve seen from Criteo (retail media), Perion (CTV and retail media), DoubleVerify (CTV and retail media), and others this earning cycle. No real surprises here.
What was perhaps more interesting was that Google was mentioned 11 times in TTD’s prepared remarks, as TTD worked to position itself as a potential beneficiary of changes in Google’s adtech business.
According to Mr. Green:
Google faces a “pending antitrust trial that has created massive ripples throughout the global ad tech ecosystem. The outcome of the trial itself is less important than the change in behavior that will likely come at Google no matter what. Whatever the outcome of the trial, I do believe that Google will become more cautious, if not less involved, in the part of their business where they compete with us. First off, they are and will remain under tremendous scrutiny in this market, whether it’s from US regulators or their many equivalents around the world. By contrast, the convoluted role they play, laid out very clearly by the US Department of Justice, in their Network business, is likely to shift to a fairer playing field one way or another. I point this out because it presents tremendous opportunity for our business.”
TTD’s stock dipped after the report, likely due to a lower earnings beat than in Q2 and Q4 revenue guidance projecting 25% YoY growth—a bit of a slowdown from Q3’s 27%. However, with overall growth still strong, the stock has since started to rally.
Experts React:
Population Science’s Jonathan Barnes tweeted, “TTD, like any other adtech stock, is very unstable until they build an actual moat.”
Our Take:
Barnes suggests that TTD will face challenges “until they get meaningful O&O, be it via creating a viable YouTube.”
So, what happened to Project Bridgewater?
A few months ago, rumors swirled that TTD was developing a smart TV operating system in partnership with Sonos. While Mr. Green didn’t address this on the earnings call, it’s hard not to wonder if, as TTD aggressively pursues its CTV ambitions, the rumors are true.
