Trade Desk Earnings Drop as Compensation Expenses Rise

The Trade Desk reported lower third-quarter earnings as expenses, including stock based compensation increased.

The Trade Desk CTV Study

(Image credit: The Trade Desk)

Net income was $15.9 million, or 3 cents a share, down from $59.3 million, or 12 cents a share a year ago.

Revenue increased 31% to $394.8 million.

Operating expenses at The Trade Desk rose 66% to $366 million. General and administrative expenses rose from $52.1 million from $130.9 million, and include stock-based compensation expense related to a long-term CEO performance grant of $66 million and $197 million for the three and nine months ended September 30, 2022, respectively.

"Q3 was another strong quarter for The Trade Desk with 31% growth that significantly outpaced the market. This performance underlines the value of decisioned media buying on The Trade Desk as the world's largest advertisers seek to maximize return on every campaign dollar," said Jeff Green, founder and CEO of The Trade Desk.

"Nowhere is this more apparent than in the rapidly growing market for Connected TV advertising, as more of the world’s leading CTV platforms partner with us to bring advertising demand to their inventory. Additionally, more of the world’s top retailers are working with us to help our clients unleash retail data to tie campaign activity to actual retail sales. In both CTV and retail data, we are helping our clients pioneer new approaches to identity that preserve the value of relevant advertising while improving consumer privacy," Green said.

Analyst Matthew Swanson said The Trade Desk “reported a strong quarter in what continues to be a challenging environment,” with revenue and adjusted EBITDA above Wall Street forecasts.

“Management noted their growth in the quarter significantly outpaced the market as advertisers look to maximize campaign dollars. Management also noted success in both CTV and Retail Media both strong secular growth trends,” Swanson noted.

Looking ahead, Swanson noted that The Trade Desk lowered guidance for fourth-quarter revenue to at least $490 million, but raised its expectation for adjusted EBITDA to $228 million.  ■

Jon has been business editor of Broadcasting+Cable since 2010. He focuses on revenue-generating activities, including advertising and distribution, as well as executive intrigue and merger and acquisition activity. Just about any story is fair game, if a dollar sign can make its way into the article. Before B+C, Jon covered the industry for TVWeek, Cable World, Electronic Media, Advertising Age and The New York Post. A native New Yorker, Jon is hiding in plain sight in the suburbs of Chicago.