Trade Desk Inc (NASDAQ:TTD) reported stronger-than-expected fourth-quarter results but cautioned that first-quarter revenue and profitability could fall short of Wall Street forecasts, sending shares down 5.7% in early Thursday trading.
Q4 revenue rose 14% to $847 million, slightly above analysts’ consensus of $841 million. Adjusted earnings per share came in at $0.59, beating the estimate of $0.58. Adjusted EBITDA reached $400 million, or 47% of revenue, in line with expectations.
The company highlighted strong momentum in video, including connected TV, which now accounts for roughly half its business, as well as growth in international markets.
Despite the strong quarter, management projected cautious first-quarter results, forecasting revenue of at least $678 million and adjusted EBITDA of about $195 million, below consensus estimates of $699 million and $224 million. The company cited ongoing weakness in consumer packaged goods and auto sectors, which together make up more than a quarter of its revenue.
The Trade Desk has also returned capital to shareholders, repurchasing $423 million of stock in Q4 and $1.4 billion for the full year at an average price of $52.60. An additional $350 million in buybacks was authorized, leaving $500 million in remaining capacity.
Customer retention exceeded 95%, and Q4 margins held steady despite investments and headcount growth below revenue growth. Management noted strength in technology, finance, and pharmaceuticals, offset by softer demand in other sectors.
Analysts at Wedbush said the company should continue to benefit from the shift of linear advertisers to connected TV and other digital platforms, but growing competition from vertically integrated platforms could pressure future margins and data access. The firm maintained a $23 price target, citing competitive pressures and increasing investments.