The Trade Desk Q2 FY12/24 Earnings Review

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No Recession Apparent In Online Ads

by Alex King, CEO, Cestrian Capital Research, Inc

$TTD is now a large enough company that we can, I think, infer something about the state of the economy from how its revenues are holding up. Not in the same way as with Microsoft (a gauge of enterprise spending) or Apple (a gauge of consumer spending) but because if advertisers are confident, TTD revenue will be looking good, and if they are worried, it will not.

Right now TTD growth looks strong - accelerating even - the Q3 guide is for flat-ish growth rates on an “at least” basis - and profit margins are climbing. Cashflow margins took a hit this quarter which for now we can attribute to working capital timing (ie. how fast did they get paid in the quarter vs. make payments in the quarter). The balance sheet remains rock solid. I’m not aware of any particular market-share threats to $TTD; it seems to me that if the economy remains in reasonable shape, with ad spending growing and shifting inexorably online, then TTD fundamentals ought to benefit.

Let’s take a look at the numbers. Here’s the headlines:

Below - available to paying subscribers of all tiers here - we review the fundamentals, the valuation, the stock chart, our rating and price target. Read on folks.