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Spotting Winners: The Trade Desk (NASDAQ:TTD) And Advertising Software Stocks In Q2


Radek Strnad /
2022/09/23 3:46 am EDT
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Quarterly earnings results are a good time to check in on a company’s progress, especially compared to other peers in the same sector. Today we are looking at The Trade Desk (NASDAQ:TTD), and the best and worst performers in the advertising software group.

The digital advertising market is large, growing and becoming more diverse, both in terms of audiences and media. This as a result drives a growing need for a software that enables advertisers to use data to automate and optimize ad placements.

The 5 advertising software stocks we track reported a mixed Q2; on average, revenues beat analyst consensus estimates by 2.37%, while on average next quarter revenue guidance was 0.28% above consensus. Tech stocks have been under pressure as inflation makes their long-dated profits less valuable and advertising software stocks have not been spared, with share price down 13.2% since the previous earnings results, on average.

The Trade Desk (NASDAQ:TTD)

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.

The Trade Desk reported revenues of $376.9 million, up 34.6% year on year, beating analyst expectations by 3.22%. It was a strong quarter for the company, with a meaningful improvement in gross margin and a solid top line growth.

“We delivered outstanding performance in the second quarter, growing 35% versus a year ago, significantly outpacing worldwide programmatic advertising growth. More of the world’s leading brands are signing major new or expanded long-term agreements with The Trade Desk, which speaks to the innovation and value that our platform provides compared to the limitations of walled gardens,” said Jeff Green, Co-Founder and CEO of The Trade Desk.

The Trade Desk Total Revenue

The stock is up 8.93% since the results and currently trades at $59.36.

Read why we think that The Trade Desk is one of the best advertising software stocks, our full report is free.

Best Q2: DoubleVerify (NYSE:DV)

When Oren Netzer saw a digital ad for US-based Target while sitting in his Tel Aviv apartment, he knew there was an unsolved problem, so he started DoubleVerify (NYSE: DV), a provider of advertising solutions to businesses that helps with ad verification, fraud prevention, and brand safety.

DoubleVerify reported revenues of $109.8 million, up 43.4% year on year, beating analyst expectations by 7.67%. It was a very strong quarter for the company, with an exceptional revenue growth and an impressive beat of analyst estimates.

DoubleVerify Total Revenue

DoubleVerify pulled off the strongest analyst estimates beat and fastest revenue growth among its peers. The stock is up 10.3% since the results and currently trades at $26.36.

Is now the time to buy DoubleVerify? Access our full analysis of the earnings results here, it's free.

Weakest Q2: AppLovin (NASDAQ:APP)

Co-founded by Adam Foroughi who was frustrated with not being able to find a good solution to market his own dating app, AppLovin (NASDAQ:APP) is a provider of marketing and monetization tools for mobile app developers and also operates a portfolio of mobile games.

AppLovin reported revenues of $776.2 million, up 16% year on year, missing analyst expectations by 5.18%. It was a weak quarter for the company, with an underwhelming revenue guidance for the full year and a miss of the top line analyst estimates.

AppLovin had the weakest performance against analyst estimates, slowest revenue growth, and weakest full year guidance update in the group. The stock is down 50.3% since the results and currently trades at $20.10.

Read our full analysis of AppLovin's results here.

LiveRamp (NYSE:RAMP)

Started in 2011 as a spin-out of RapLeaf, LiveRamp (NYSE:RAMP) provides software as a service that helps companies better target their marketing by merging offline and online data about their customers.

LiveRamp reported revenues of $142.2 million, up 19.4% year on year, beating analyst expectations by 2.35%. It was a weaker quarter for the company, with a full year guidance missing analysts' expectations and decelerating customer growth.

The company added 3 enterprise customers paying more than $1m annually to a total of 90. The stock is down 28.4% since the results and currently trades at $20.05.

Read our full, actionable report on LiveRamp here, it's free.

PubMatic (NASDAQ:PUBM)

Founded in 2006, as an online ad platform focused on ad sellers, Pubmatic (NASDAQ: PUBM) is a fully integrated cloud-based programmatic advertising platform.

PubMatic reported revenues of $63 million, up 26.9% year on year, beating analyst expectations by 3.81%. It was a mixed quarter for the company, with a decent beat of top line results, but a decline in net revenue retention rate.

PubMatic scored the highest full year guidance raise among the peers. The stock is down 6.58% since the results and currently trades at $16.60.

Read our full, actionable report on PubMatic here, it's free.

The author has no position in any of the stocks mentioned