The Trade Desk… Not a Good Day to be in Bed with China

The Trade Desk TTD 59.44 -4.03 -6.35% reported $0.49 per share handily beating estimates of $0.25 a share. Revenue also beat, $121 million vs $117 million expected. Revenue grew 41.2% year over year.

They also raised guidance! The company said it expects second quarter revenue of approximately $154.0 million and now expects 2019 revenue of at least $645.0 million. Current estimates put their next quarter revenue at $152.4 million and full year revenue at $640.5 million.

So why is the stock down 15%?? Good question…

It’s hard to put in simple words what the company really does. Here’s a business summary:

The Company provides a self-service platform that enables clients to purchase and manage digital advertising campaigns across various advertising formats, including display, video and social, and on a range of devices, including computers, mobile devices and connected televisions. Its platform enables a media planner or buyer at an advertising agency to purchase digital media programmatically on various media exchanges and sell-side platforms; acquire and use third-party data to optimize and measure digital advertising campaigns; deploy their, or their client’s. own first-party data in order to optimize campaign efficacy; link digital campaigns to offline sales results or other business objectives; access other services, such as its data management platform and publisher management platform marketplace, and use its user interface and application programming interfaces to build their own technology on top of the Company’s platform.

The problem/great thing about Trade Desk spent a lot of money and time crafting partnerships and retooling their platform to work in China. They are partnered with Tencent and Baidu Exchange Services, and as of the end of the 1st quarter 2019 officially launched its programmatic ad buying platform in China. Probably a realllly good thing long term, but right now your big selling point being increased share in China is a wildcard. Until the trade talks sort out we just don’t know what impact it will have on any Chinese relationships.