Trade Desk Inc (NASDAQ: TTD) stock rose over 24.6% on 6th November, 2020 (as of 10:35 am GMT-5; Source: Google finance) after the company posted better than expected results for the third quarter of FY 20. The company delivered the adjusted net income for the quarter of $62.7 million. The company generated the net cash provided by operating activities of $88.5 million for Q3 and free cash flow was $66.5 million. The primary driver was the increase in net income and the change in working capital that can vary from quarter-to-quarter, on the back of the timing of payments and receivables. The company had $557 million in cash, cash equivalents and short-term investments at the end of the quarter.
Furthermore, in Q3, the company continues to see improvements across all of the channels. For the quarter, spend in the mobile video, which includes connected TV, display, and audio channels all grew on a year-over-year basis. Connected TV spend was the strongest, run over 100% in Q3 on a year-over-year basis. Geographically in Q3, all of the major regions North America, APAC and Europe grew spend well into the double-digits year-over-year.
Moreover, Automotive showed consistent improvement as well during the quarter, ending with double-digit growth in Q3. Travel still remained negative on a year-over-year basis, but even that category showed relative improvement during the quarter and is improved on a year-over-year basis versus Q2 performance. Shopping also showed a noticeable turnaround in Q3, ending with growth well into the double-digits.
TTD in the third quarter of FY 20 has reported the adjusted earnings per share of $1.27, beating the analysts’ estimates for the adjusted earnings per share of 49 cents, according to the Zacks Consensus Estimate. The company had reported the adjusted revenue growth of 31.61 percent to $216.11 million in the third quarter of FY 20, beating the analysts’ estimates for revenue by 18.44%. The company benefited from several trends that helped the company significantly exceed the expectations. Further, the existing advertisers shifted more spend to the platform during the third quarter. This included CTV, which offers the ability for advertisers to apply data to their TV ad campaigns in ways that are simply not possible with linear. The political spends steadily ramped up throughout the third quarter and was particularly strong in the month of September. In the third quarter, TTD generated $77 million in adjusted EBITDA, or about 36% of revenue.
For the fourth quarter of 2020, the company expects revenue to be in the range of $287 million and $291 million and Adjusted EBITDA to be of at least $115 million