Advertising software maker The Trade Desk (NASDAQ:TTD) reported Q3 CY2024 results topping the market’s revenue expectations , with sales up 27.3% year on year to $628 million. The company expects next quarter’s revenue to be around $756 million, close to analysts’ estimates. Its non-GAAP profit of $0.41 per share was also 4% above analysts’ consensus estimates.

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The Trade Desk (TTD) Q3 CY2024 Highlights:

• Revenue: $628 million vs analyst estimates of $620.5 million (1.2% beat)

• Adjusted EPS: $0.41 vs analyst estimates of $0.39 (4% beat)

• EBITDA: $257 million vs analyst estimates of $253.4 million (1.4% beat)

• Revenue Guidance for Q4 CY2024 is $756 million at the midpoint, roughly in line with what analysts were expecting

• Gross Margin (GAAP): 80.5%, in line with the same quarter last year

• Operating Margin: 17.3%, up from 7.6% in the same quarter last year

• EBITDA Margin: 40.9%, in line with the same quarter last year

• Free Cash Flow Margin: 35.4%, up from 9.7% in the previous quarter

• Market Capitalization: $61.56 billion

“The Trade Desk delivered strong performance in the third quarter, with revenue of $628 million, accelerating growth to 27%. This performance underlines the value that advertisers are placing on precision and transparency as they work with us to maximize the impact of their campaigns,” said Jeff Green, Co-founder and CEO of The Trade Desk.

Company Overview

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.

Advertising Software

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.

Sales Growth

A company’s long-term performance can give signals about its business quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Over the last three years, The Trade Desk grew its sales at a solid 27.3% compounded annual growth rate. This is encouraging because it shows The Trade Desk was more successful in expanding than most software companies.

This quarter, The Trade Desk reported robust year-on-year revenue growth of 27.3%, and its $628 million of revenue topped Wall Street estimates by 1.2%. Management is currently guiding for a 24.8% year-on-year increase next quarter.