The Trade Desk, Inc. is set to announce its first-quarter 2025 financial results on May 8, following the market’s closure. Analysts project a slight decline in earnings, with the Zacks Consensus Estimate currently at 25 cents per share, down from 26 cents in the same quarter last year. Additionally, total revenue is forecasted at $574.3 million, indicating a 16.9% year-over-year drop.
Despite these expectations, The Trade Desk anticipates revenues will at least meet $575 million, reflecting a potential 17% increase from the previous year, although this outlook accounts for lower political ad spending and the impact of the 2024 leap year.
Historically, The Trade Desk has outperformed the earnings estimates in the last four quarters, achieving an average earnings surprise of 7.68%. However, the current Earnings ESP stands at -9.45%, and with a Zacks Rank of #5 (Strong Sell), the likelihood of a favorable earnings outcome seems diminished.
Challenges remain for the company, which operates in a highly competitive digital advertising landscape dominated by major players such as Google and Amazon. Factors like macroeconomic uncertainty and rising trade tensions have compounded these pressures, potentially constraining advertising budgets.
In the last few months, The Trade Desk has reported significant growth in connected TV (CTV) and retail media spending. In the fourth quarter of 2024, it recorded over $12 billion in ad spend, highlighting the robust demand for its platform. Support for UID2, a privacy-focused solution aimed at enhancing digital advertising while maintaining user privacy, is also set to drive growth in CTV advertising.
While the transition to the more advanced Kokai platform is ongoing, operational difficulties have arisen due to maintaining two platforms. Nonetheless, The Trade Desk’s strategic focus on international expansion and internal efficiency improvements may serve as key advantages moving forward.
Recently, TTD shares have fallen by 58.1% over the last six months, significantly underperforming the broader internet services sector and the S&P 500. Investors may consider whether adjustments are necessary in light of the company’s performance and current market dynamics.
It’s critical for investors to keep a close watch on The Trade Desk as the unveiling of first-quarter results approaches, particularly given the broader economic conditions that could potentially impact performance. Companies that successfully navigate these competitive and economic challenges often emerge stronger, making it essential for stakeholders to remain informed and strategic in their decisions.