By Emily Dattilo

A reorganization negatively impacted quarterly results for Trade Desk and sent shares of the advertising-technology company tumbling Thursday.

Trade Desk stock fell 29% to $86.60 in premarket trading.

For the fourth quarter, after markets closed Wednesday, the company reported adjusted earnings of 59 cents per share, beating Wall Street's call for 57 cents, according to FactSet.

But revenue of $741 million was below the consensus estimate for $758.9 million.

Oppenheimer analysts led by Jason Helfstein, who rate shares at Outperform with a price target of $115, weighed in on how unusual that is.

"TTD missed revenue for the first time in the past 33 quarters on slower adoption of next-gen platform Kokai," according to the analysts. "We attribute the miss to lack of oversight/decision-making as TTD has grown to 4K employees with an increasingly complicated go-to-market strategy, targeting both ad agencies and advertisers with overlapping teams." Kokai is the company's artificial-intelligence platform.

Management offered further insight on the results.

"We are disappointed that we fell short of our own expectations in the fourth quarter," said CEO Jeff Green. "In December, we undertook a reorganization to accelerate opportunities across CTV [connected TV], retail media, identity, supply chain optimization, and audio while forging ahead with innovations like Kokai and the Ventura Operating System."

Those points were highlighted by Guggenheim analysts led by Michael Morris, who slashed their price target to $110 from $150 and reiterated a Buy rating.

"The reorganization, which was the largest in company history, is intended to improve clarity, effectiveness, resource allocation, and create more agile teams, better positioning The Trade Desk for long-term growth," they wrote, adding that they "remain confident in the longer-term business opportunity."

For the first quarter, Trade Desk forecasts revenue of at least $575 million, while analysts had penciled in $582.1 million.

Despite the tough results, Citi analysts led by Ygal Arounian remained optimistic. The team lowered their price target to $108 from $140 and maintained a Buy rating.

"Given the premium valuation the reaction is understandable, but also given the valuation investors are often looking for buying opportunities and we think this can be one," they wrote.

Write to Emily Dattilo at emily.dattilo@dowjones.com

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February 13, 2025 08:04 ET (13:04 GMT)

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