Trade Desk forecasts first-quarter revenue below estimates, shares plunge

Feb 12 (Reuters) - Trade Desk TTD.O forecast its first-quarter revenue below analysts' estimate on Wednesday, signaling softer demand for its digital advertising services in the connected TV market, sending its shares down more than 20% in extended trading.

The company's downbeat forecast adds to lingering concerns of economic uncertainty and higher-for-longer interest rates crimping client budgets and hurting ad spend.

Trade Desk forecast its first-quarter revenue to be at least $575 million, below analysts' average estimate of $591.8 million, according to data compiled by LSEG.

The outlook is for the period following the holiday season where analysts expected retailers to double down on advertising, with a focus on political ad spending during the U.S. presidential elections.

The company recorded revenue of $741 million in the fourth quarter, missing analysts' estimate of $758.9 million.

"We are disappointed that we fell short of our own expectations in the fourth quarter," said Jeff Green, founder and CEO of Trade Desk. The company had forecast fourth-quarter revenue of at least $756 million in November.

Trade Desk did not match up to lofty expectations from investors, who drove a more than 60% increase in its shares last year, betting on the company benefiting from ad dollars being funneled into online advertising.

The company helps provide connected TV ads — advertisements displayed on streaming content through apps on smart TVs or over-the-top devices — which have gained prominence as consumers pivot from traditional TV.

On an adjusted basis, it earned 59 cents per share, compared with the estimate of 56 cents.