Revenue and guidance drive Trade Desk shares to rise.

• The Trade Desk's shares rose in extended trading on Thursday following the release of robust first-quarter guidance and revenue surpassal.
• The digital advertising market is projected to recover in 2024, along with the growth of the Connected TV market.

On Thursday, shares of the advertising technology company surged over 18% after it released robust first-quarter guidance and exceeded revenue expectations.

Here’s what analysts were expecting:

• LSEG, formerly known as Refinitiv, expected earnings per share to be 43 cents, but the actual earnings were 41 cents.
• Revenue: $606 million vs. $582 million expected by LSEG

Sales in the fourth quarter increased by 23% from $491 million in the previous year, while net income grew by 37% to $97 million, or 19 cents per share, compared to $71 million, or 14 cents, in the same quarter the year before.

According to LSEG, analyst estimates of $452 million for first-quarter sales will be surpassed by The Trade Desk's sales, which are predicted to be at least $478 million.

The company's board approved an additional $647 million in share repurchases, increasing the total future buybacks to $700 million. In the fourth quarter, repurchases totaled $220 million.

The Trade Desk offers technology to companies for targeting web users and has profited from the shift in corporate ad spending from TV to connected TVs and streaming platforms.

Jeff Green, CEO of Trade Desk, stated that an increasing number of top advertisers are shifting towards channels and collaborations that provide accuracy, high-end worth, and vast reach, such as Connected TV (CTV) and retail media.

The digital advertising market is projected to recover in 2024, leading to growth in the Connected TV market.

In the fourth quarter, Amazon's ad business experienced the most growth, increasing by 27%. Meta's ad business also grew, but at a slightly lower rate of 24%, due in part to increased spending from Chinese online retailers. In contrast, Google's ad business underperformed its competitors, expanding by only 11% from the previous year.

The world's most effective advertising is through Connected TV at the moment.