While The Trade Desk (NASDAQ:TTD) may be the hot stock investors think of when they think of programmatic advertising, there's a much smaller industry peer that has been making a name for itself on the other side of the data-driven advertising equation: the sell side. While The Trade Desk is helping ad agencies and brands buy ads, Telaria (NYSE:TLRA) is helping publishers sell their ad inventory. Even more, the company has carved out a niche for itself in one specific channel: the nascent and promising connected TV market. Telaria is the leading independent data-driven software platform built to help premium video publishers optimize their digital advertising yield.
With strong business momentum since the company sold its buy-side platform in 2017 and refocused its business entirely on the sell-side, investors will be watching Telaria closely when the company reports its third-quarter results early next month.
Ahead of the results, here are some key metrics for investors to watch.
1. Revenue growth
Telaria has seen impressive top-line momentum recently. Its second-quarter revenue surged 47% year over year to $18.2 million.
But what should investors expect from Q3?
Management guided for revenue between $16 million and $17 million -- figures that reflect the seasonality of TV advertising. While down sequentially, the midpoint of this guidance range implies 33% year-over-year growth.
Analysts, on average, expect Telaria to report revenue of $16.6 million in Q3.
2. Earnings per share
Though Telaria's fast-growing revenue and its 84% trailing-12-month gross profit margin put the company on a path to achieve profitability soon, it's not quite there yet. Management guided for adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) to be between negative $1 million and breakeven during Q3.
While Telaria doesn't provide earnings per share guidance, the consensus analyst estimate calls for a loss per share of $0.05.
3. Connected TV revenue
In addition, investors should check in on Telaria's fast-growing connected TV (CTV) revenue. Revenue in this channel increased 133% year over year in Q3 and accounted for 39% of revenue -- up from 24% of revenue in the second quarter of 2018.
Can this strong momentum continue?
Finally, investors should look to Telaria's fourth-quarter guidance.
The seasonality of TV advertising means that the company's final quarter of the year will be its biggest. Assuming Telaria's third-quarter revenue comes in within management's guidance range for the period, its full-year outlook for revenue between $68 to $72 million implies fourth-quarter revenue between $19.7 million and $23.7 million.
Analysts are expecting Telaria to guide for fourth-quarter revenue of $21.9 million.
The tech company will be up against a tough comparison, when Telaria's fourth-quarter revenue jumped 31% year over year to $19.7 million.
Telaria will report its third-quarter results before the market opens on Nov. 5.