As earnings season continued last week, the rise of connected TV (CTV), or simply internet-connected television, proved to remain one of 2019’s hottest market trends. Roku (NASDAQ:ROKU) and The Trade Desk (NASDAQ:TTD) — two companies that benefit from rising adoption of CTV, both reported an acceleration in their already impressive revenue growth rates.
Here’s a look at how the fast-growing CTV market is driving strong growth for streaming-TV company Roku and digital ad-buying platform The Trade Desk.
Roku crushed analyst estimates last week, reporting second-quarter revenue of $250 million and a loss per share of $0.08. On average, analysts’ expected revenue of $224 million and a loss per share of $0.23.
Roku’s 59% year-over-year increase in revenue during its second quarter marked an acceleration from 51% growth in Q1. Further highlighting the company’s momentum, revenue growth accelerated in Q1, too.
“The industrywide shift to streaming is accelerating,” Roku said in its second-quarter shareholder letter. “Our business momentum and ongoing investment in areas of competitive differentiation continue to drive growth and attract users, advertisers and content publishers.”
Strength in advertising helped its platform revenue soar 86% year over year during the quarter. The company said its Roku-monetized video ad impressions more than doubled between the second quarter of 2018 and the second quarter of 2019.
Also highlighting the company’s strong foothold in CTV, the amount of hours streamed on its platform during the quarter increased to 9.4 billion, up 72% year over year.
Roku said it now expects full-year revenue to be between $1.075 billion and $1.095 billion, up from a previous estimate for $1.03 billion to $1.05 billion. Management also guided for adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) between $30 and $40 million — up from guidance for $10 to $20 million.
The Trade Desk
Programmatic ad-buying platform specialist The Trade Desk saw its second-quarter revenue rise 42% year over year — a slight acceleration from 41% growth in Q1. This put total revenue at $159.9 million, up from $112.3 million in the year-ago quarter. Revenue, therefore, was ahead of its guidance for $154 million and analysts’ average estimate for $155.6 million.
The company’s lucrative business model continues to deliver for shareholders, with The Trade Desk reporting net income of $27.8 million on its $159.9 million in revenue. This put earnings per share at $0.58. Non-GAAP (adjusted) EPS was $0.95, up 58% year over year. Analysts, on average, expected non-GAAP EPS of $0.60.
Spending on its platform for connected TV ads soared 250% year over year during the quarter.
“This performance is testament to the increasing trust that major global advertisers are placing in us as they shift more of their advertising dollars to programmatic,” said The Trade Desk CEO Jeff Green in the company’s second-quarter earnings release.
The Trade Desk said it now expects full-year revenue and adjusted EBITDA of at $653 million (or higher) and $201 million, up from previous forecasts for $645 million (or higher) and $188.5 million, respectively.