Trade Desk Inc (NASDAQ: TTD) says it was a “series of small execution missteps” that disabled it from meeting revenue estimates in its fourth financial quarter and guide for continued weakness in Q1.
“Many of the [missteps] involve people mistakes that are not appropriate to discuss publicly, especially when people are already learning from their mistakes,” it told investors in a release today.
That said, the company’s first revenue miss in more than eight years is being taken rather seriously.
Jeff Green – its chief executive will soon share a 15-point action plan aimed at fixing what went wrong in Q4.
Trade Desk stock is down nearly 30% following the disappointing financial update on Thursday.
Trade Desk sees significant opportunity in JBPs
Trade Desk will tap on joint business plans (JBPs) to strengthen its ties with brands in 2025.
The advertising technology company has significant opportunity in JBPs that tend to grow at a pace that tops the rest of its business by about 50%, according to its chief executive.
Jeff Green also highlighted audio advertising and connected television (CTV) as major pillars for future growth on Thursday.
While the latter already contributes significantly to TTD’s revenue – the former is currently a relatively small part of its budget mix.
Trade Desk stock is now down more than 35% versus its high in the first week of December.
TTD expects Sincara acquisition to drive growth
Trade Desk will also commit to improving efficiency and transparency of the advertising supply chain to lower costs and increase the overall effectiveness of digital campaigns.
The company’s recent acquisition of the metadata firm, Sincara, that’s expected to close in the first quarter of 2025 is in line with that effort, as per CEO Jeff Green.
Additionally, the chief executive is convinced that Google will eventually decide in favour of exiting the open web to address its antitrust issues, which could ultimately benefit TTD as it’s a competitor in the programmatic advertising space.
Note that Trade Desk does not pay a dividend at writing.
Analysts have started lowering estimates for TTD
Trade Desk earned 59 cents a share (adjusted) on $741 million in revenue in its fourth financial quarter.
Analysts, in comparison, were at 31 cents per share but a higher $759 million in revenue.
For Q1, the adtech firm guided for $575 million in revenue – also below $582 million that experts had forecast.
TTD’s disappointing quarterly release has already started making analysts revise their estimates for 2025.
Earlier today, Shyam Patil of Susquehanna maintained his positive view on Trade Desk stock but lowered his price target to $135.
Patil’s revised price target, however, still indicates potential for about a 50% rally from current levels – suggesting it may be a good idea to load up on TTD shares on the weakness.
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