Reflecting On Advertising Software Stocks’ Q3 Earnings: The Trade Desk (NASDAQ:TTD)
Looking back on advertising software stocks' Q3 earnings, we examine this quarter's best and worst performers, including The Trade Desk (NASDAQ:TTD) and its peers.
The digital advertising market is large, growing, and becoming more diverse, both in terms of audiences and media. As a result, there is a growing need for software that enables advertisers to use data to automate and optimize ad placements.
The 6 advertising software stocks we track reported a solid Q3; on average, revenues beat analyst consensus estimates by 5.2% while next quarter's revenue guidance was in line with consensus. Stocks have faced challenges as investors prioritize near-term cash flows, but advertising software stocks held their ground better than others, with the share prices up 12.8% on average since the previous earnings results.
Weakest Q3: The Trade Desk (NASDAQ:TTD)
Founded by former Microsoft engineers Jeff Green and Dave Pickles, The Trade Desk (NASDAQ:TTD) offers cloud-based software that uses data to help advertisers better plan, place, and target their online ads.
The Trade Desk reported revenues of $493.3 million, up 24.9% year on year, topping analyst expectations by 1.2%. It was a weak quarter for the company, with underwhelming revenue and adjusted EBITDA guidance for the next quarter.
“Q3 was a strong quarter for The Trade Desk as we delivered revenue of $493 million, accelerating growth to 25%. This performance underlines the premium that advertisers are placing on precision, agility and transparency as they seek to maximize returns from their campaigns,” said Jeff Green, Co-founder and CEO of The Trade Desk.
The Trade Desk delivered the weakest performance against analyst estimates of the whole group. The stock is down 10.9% since the results and currently trades at $68.49.
Is now the time to buy The Trade Desk? Access our full analysis of the earnings results here, it's free.
Best Q3: AppLovin (NASDAQ:APP)
Co-founded by Adam Foroughi, who was frustrated with not being able to find a good solution to market his own dating app, AppLovin (NASDAQ:APP) is both a mobile game studio and provider of marketing and monetization tools for mobile app developers.
AppLovin reported revenues of $864.3 million, up 21.2% year on year, outperforming analyst expectations by 8.5%. It was a stunning quarter for the company, with a significant improvement in its gross margin and an impressive beat of analysts' revenue estimates.
AppLovin scored the biggest analyst estimates beat among its peers. The stock is down 2.6% since the results and currently trades at $39.12.
Is now the time to buy AppLovin? Access our full analysis of the earnings results here, it's free.
LiveRamp (NYSE:RAMP)
Started in 2011 as a spin-out of RapLeaf, LiveRamp (NYSE:RAMP) is a software-as-a-service provider that helps companies better target their marketing by merging offline and online data about their customers.
LiveRamp reported revenues of $159.9 million, up 8.7% year on year, exceeding analyst expectations by 4.9%. It was a mixed quarter for the company, with a significant improvement in its gross margin but decelerating customer growth.
LiveRamp scored the highest full-year guidance raise in the group. The company added 3 enterprise customers paying more than $1m annually to reach a total of 99. The stock is up 17.9% since the results and currently trades at $35.32.
Read our full analysis of LiveRamp's results here.
PubMatic (NASDAQ:PUBM)
Founded in 2006 as an online ad platform helping ad sellers, Pubmatic (NASDAQ: PUBM) is a fully integrated cloud-based programmatic advertising platform.
PubMatic reported revenues of $63.68 million, down 1.3% year on year, surpassing analyst expectations by 7.1%. It was a very strong quarter for the company, with optimistic revenue guidance for the next quarter and a solid beat of analysts' revenue estimates.
PubMatic had the slowest revenue growth among its peers. The stock is up 23.8% since the results and currently trades at $14.98.
Read our full, actionable report on PubMatic here, it's free.
Zeta (NYSE:ZETA)
Co-founded by former Apple CEO John Scully, Zeta Global (NYSE:ZETA) provides software and data analytics tools that help companies market their products to billions of customers.
Zeta reported revenues of $189 million, up 24.1% year on year, surpassing analyst expectations by 5.7%. It was a decent quarter for the company, with a solid beat of analysts' revenue estimates but a decline in its gross margin.
The company added 15 enterprise customers paying more than $100,000 annually to reach a total of 440. The stock is up 10.7% since the results and currently trades at $8.55.
Read our full, actionable report on Zeta here, it's free.
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The author has no position in any of the stocks mentioned
