The Trade Desk shares jumped around 15.5% to $14.93 after the advertising technology company reported third-quarter revenue of $736 million, exceeding its own expectations despite a 0.5% year-on-year decline. The results signalled progress in its turnaround efforts, while investors also welcomed its AI initiatives and outlook for the coming quarter. (Sources: Stocktwits, Yahoo Finance)
The company reported adjusted earnings of 33 cents per share, beating analyst expectations of 25 cents. Revenue of $736 million also exceeded the market consensus of around $651 million. The stronger-than-expected performance helped ease concerns over slowing growth and suggested that the company was performing better than its earlier guidance indicated.
Despite the earnings beat, The Trade Desk reported a sharp decline in profitability. Net income dropped to $38 million from $116 million a year earlier. Adjusted EBITDA declined to $266 million from $317 million, while its margin narrowed to 36% from 43%. The numbers underline the challenges facing the company as it works to restore growth and improve operating efficiency.
CEO Jeff Green sees artificial intelligence as a significant opportunity for the advertising business. The company is expanding its agentic AI capabilities to help advertisers manage campaigns, improve targeting and simplify complex advertising operations. Its Audience Unlimited initiative combines AI with third-party data to identify audiences more likely to deliver stronger campaign results. Early tests reportedly helped advertisers reduce customer acquisition costs by more than 30% and advertising costs by 14%.
The Trade Desk introduced Kokai Zuma, an upgraded version of its advertising platform, bringing agentic AI capabilities and a more intuitive user interface. The move is aimed at automating routine advertising tasks and improving campaign execution. Separately, Netflix expanded its integration with The Trade Desk, allowing advertisers to use first-party and third-party data for audience targeting on its streaming platform through Kokai from November. In-platform measurement capabilities are also expected to follow.