The Trade Desk (TTD) is scheduled to report its Q3 earnings on November 7 after market close, with a conference call set for 5 PM ET. Analysts expect TTD to report adjusted EPS of $0.39, an 18% year-over-year increase, and revenue of $620.2 million, reflecting a 26% rise year-over-year. TTD typically provides guidance for both revenue and adjusted EBITDA for the upcoming quarter; current guidance projects Q3 revenue of at least $618 million and adjusted EBITDA of approximately $248 million. These metrics will be crucial as TTD continues to navigate the evolving digital advertising landscape.

A major area of focus for analysts is TTD’s Connected TV (CTV) segment, which has been a significant growth driver in recent quarters. CTV growth accelerated in the first half of 2024 compared to the second half of 2023, with TTD highlighting CTV as a dominant contributor to its performance. Analysts expect continued strength in this segment, especially as TTD gains access to premium inventory through partnerships with major platforms like NBCU (Olympics), Roku, and Netflix. The company's ability to maintain or accelerate CTV growth will be closely watched, as it represents a critical component of TTD’s expansion strategy.

Another key area to monitor is TTD's broader digital advertising environment, which has been relatively stable, supported by both agencies and brand advertisers. The shift from traditional “walled gardens” to open internet platforms, particularly in CTV and digital audio, plays to TTD’s strengths as an agnostic platform. Consumers now spend more time on open internet channels than on social media, a trend that benefits TTD as it builds a robust pipeline in premium open-internet inventory. TTD’s positioning as a leader in the shift to open internet is a positive indicator of long-term growth potential, with analysts expecting the company to capture further market share.

The upcoming quarter is also expected to be influenced by the U.S. election cycle, which often drives increased advertising spend. Analysts will look for management’s insights on how political ad spend might impact Q3 and the remainder of the year. Additionally, competitor Magnite (MGNI) reports the same day, providing further context for TTD’s performance in a market where digital ad players have faced mixed results. TTD’s history of conservative guidance and consistent performance provides reassurance, as it has not missed on EPS or revenue in five years.

Finally, The Trade Desk's stock has been trending upward since January, boosted by positive expectations around political ad spending and CTV growth. Analysts remain optimistic, with Needham recently raising its price target from $115 to $125, citing TTD’s strong position as a key player in digital advertising. Citigroup’s recent commentary on TTD’s potential development of a smart TV operating system also underscores the company's strategic moves in CTV. Investors will be keenly watching for updates on TTD’s plans in the CTV space and any new initiatives that could further differentiate it from competitors.

The Trade Desk impressed analysts with its Q2 earnings report, with both adjusted EPS and revenue surpassing Wall Street estimates. Revenue grew by 25.9% year-over-year to $584.6 million, although the growth upside was slightly less than previous quarters. Despite a less aggressive beat, TTD raised its Q3 revenue guidance above analyst expectations, suggesting confidence in sustained demand across its platform. Analysts reacted positively, with firms like LOOP and KeyBanc increasing their price targets, citing TTD’s expanding role as a critical platform for ad buyers and publishers.

A major highlight from the earnings call was TTD’s continued success in the Connected TV (CTV) segment, which led the company's growth by a large margin. TTD noted that CTV growth accelerated in the first half of 2024 compared to the latter half of 2023, reflecting growing advertiser demand for more measurable and efficient results in digital advertising. Additionally, TTD’s partnerships with premium platforms like Roku, Netflix, and NBCU (for Olympics coverage) are expected to drive long-term success by securing high-quality inventory and establishing TTD as a leader in CTV advertising.

TTD’s diversified growth was evident across various verticals, with strong performance in home and garden, food and drink, and shopping, though family relationships and healthy living lagged behind. While North America accounted for 88% of Q2 sales, international expansion remains a key focus, with TTD aiming to capture additional market share outside its core regions. The company also benefited from broader trends, as more consumers now spend time on premium open internet channels like CTV and digital audio, where TTD’s services are increasingly relevant.

Analysts remain optimistic about TTD’s outlook, supported by its strong identity strategy, including UID, which has gained traction with new partners like Roku and Fox. Additionally, TTD’s Kokai platform upgrade and regulatory tailwinds could provide further growth potential, with some analysts projecting over 20% annual revenue growth for the next few years. Despite a challenging macro environment, TTD’s ability to achieve robust profitability and gain market share in the ad space solidifies its position as a leader, particularly as it continues to take market share from competitors in the walled garden ecosystems.