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The Trade Desk Stock Tumbles On Financial Guidance Warning, Despite Strong Q1

05/10/2021 09:23
  • The Trade Desk Inc (NASDAQ: TTDreported first-quarter FY21 revenue growth of 36.8% year-on-year to $219.8 million, beating the analyst consensus of $216.9 million. 
  • CTV drove the growth, CEO Jeff Green said. Customer retention remained over 95% during Q1.
  • Non-GAAP net income rose 61.3% Y/Y to $70 million, with adjusted EPS of $1.41, beating the analyst consensus of $0.77.
  • Adjusted EBITDA rose 80.8% Y/Y to $70.5 million. The margin expanded 800 basis points to 32%.
  • The board declared a ten-for-one split in the form of a stock dividend. Each stockholder of record, on June 9, will receive nine additional shares for each then-held share. Trading will begin on a stock split-adjusted basis on June 17.
  • The Trade Desk held $471.6 million in cash and equivalents and generated $75.1 million in operating cash flow.
  • Guidance: The Trade Desk sees a Q2 revenue outlook of $259 million -$262 million, above the analyst consensus of $253.92 million. It expects an adjusted EBITDA of $84 million.
  • The company declined to provide earnings guidance due to uncertainty from COVID-19. "Our business has been impacted by the COVID-19 pandemic that has significantly impacted advertiser demand. Like many companies that are ad-funded, we are facing a period of higher uncertainty in our business outlook. We expect our business performance could be impacted by issues beyond our control, such as changing economic conditions or additional shelter-in-place orders that may or may not occur," it said.
  • "Net income outlook is not available without unreasonable efforts on a forward-looking basis due to the variability and complexity with respect to the charges excluded from these non-GAAP measures; in particular, the measures and effects of our stock-based compensation expense that are directly impacted by unpredictable fluctuations in our share price. We expect the variability of the above charges could have a significant and potentially unpredictable impact on our future U.S. GAAP financial results," The Trade Desk said.
  • Price action: TTD shares traded lower by 14.1% at $568.5 in the premarket session on the last check Monday.