The Trade Desk, Inc. (NASDAQ: TTD), a global technology company
that empowers buyers of advertising, today announced financial
results for its third quarter ended September 30, 2021.
“We again delivered outstanding performance in the third
quarter. Revenue growth of 39% significantly outpaced worldwide
programmatic advertising growth. The world’s leading brands and
agencies are increasingly using our platform to apply data-driven
strategies to drive precision and value across their campaigns,”
said Jeff Green, founder and CEO of The Trade Desk. “More
data-driven choices by advertisers led to record third quarter
revenue of $301.1 million and adjusted EBITDA of $122.7 million.
With the launch of Solimar, we are working with the industry to
pioneer even greater data-driven precision, whether it’s the
application of shopper data in a measurement marketplace, surfacing
the right data for every advertising impression, or new approaches
to identity that help advertisers make the most of their own
valuable data. As a result, we’re seeing growth across all
channels, and none more so than Connected TV, as viewers shift to
new digital, streaming services and advertisers apply data to TV ad
campaigns for the first time.”
Third Quarter 2021 Financial
Highlights:
The following table summarizes our consolidated financial
results for the three and nine months ended September 30, 2021 and
2020 ($ in millions, except per share amounts):
Three Months Ended
Nine Months Ended
September 30,
September 30,
2021
2020
2021
2020
GAAP Results
Revenue
$
301.1
$
216.1
$
800.9
$
516.1
Increase in revenue year over year
39
%
32
%
55
%
16
%
Net Income
$
59.4
$
41.2
$
129.7
$
90.4
Diluted EPS
$
0.12
$
0.08
$
0.26
$
0.19
Non-GAAP Results
Adjusted EBITDA
$
122.7
$
77.2
$
311.2
$
130.7
Adjusted EBITDA Margin
41
%
36
%
39
%
25
%
Non-GAAP Net Income
$
89.2
$
62.7
$
247.4
$
150.8
Non-GAAP Diluted EPS
$
0.18
$
0.13
$
0.50
$
0.31
Third Quarter and Recent Business
Highlights Include:
- Strong Customer Retention: Customer retention remained
over 95% during the quarter, as it has for the previous 7
years
- Launched our new trading platform Solimar on July 7
Features include:
- Upgraded UI to help set better campaign goals
- The platform’s AI engine Koa™ then uses these goals as a guide
to optimize media spend, helping the advertisers to achieve goals
faster and more efficiently than ever before
- Enables onboarding and activating first-party data easier than
ever
- Growing an audience without sacrificing control over consumer
experience by utilizing an interoperable Unified ID 2.0 with some
of the biggest names in identity
- The most powerful measurement marketplace in the market today
providing marketers the ability to measure the impact of campaigns
across every channel and optimize in real time
- Continued Industry-Wide Collaboration and Support for
Unified ID 2.0: The Trade Desk is building support for Unified
ID 2.0 (UID2), a new industry-wide approach to identity that
preserves the value of relevant advertising, while putting user
control and privacy at the forefront. Recent pledges of support,
integration and news associated with UID2 include:
- Global provider of marketing solutions, Interpublic Group
- Global media, marketing and corporate communications holding
company, Omnicom Group
- TrueData, a data platform specializing in cookieless identity
resolution, first party data onboarding, and audience
marketing
- Netwise, a leading provider of multi-channel B2B marketing
data
- Snowflake, an enabler for organizations to mobilize their data
with Snowflake’s Data Cloud
- iCook, a leading online cooking information platform in
Taiwan
- Cookware maker, Made In, saw a 20% improvement in cost per
action (CPA) for its campaigns and users converted faster when
using UID 2.0 than without. Users converted 22% more when compared
to 3P cookies and converted 33% faster.
- Industry Recognition: The Trade Desk debuted at #6 on
FORTUNE’s list of the 100 Fastest Growing Companies for 2021. The
Trade Desk was named one of the Top 100 Software Companies of 2021
by The Software Report and won Adweek Readers’ Choice: Best of Tech
awards for both Demand Side Platform and Innovator of the Year
categories. Additionally, The Trade Desk was included in this
year’s Forbes Global 2000 list. And for the fifth consecutive year,
The Trade Desk was selected as both a FORTUNE 2021 Best Medium
Workplace and a Best Workplace in New York by Great Places to
Work.
Financial Guidance:
Our business has been impacted by the COVID-19 pandemic that has
significantly impacted advertiser demand. Like many companies that
are ad-funded, we are facing a period of higher uncertainty in our
business outlook. We expect our business performance could be
impacted by issues beyond our control, such as changing economic
conditions or additional shelter-in-place orders that may or may
not occur. Assuming that the economy continues to recover and we do
not have any major COVID-19 related setbacks that may cause
economic conditions to deteriorate, we estimate the following:
Fourth Quarter 2021 outlook summary:
- Revenue at least $388 million
- Adjusted EBITDA approximately $175 million
We have not provided an outlook for GAAP Net income or
reconciliation of adjusted EBITDA guidance to net income, the
closest corresponding U.S. GAAP measure, because net income outlook
is not available without unreasonable efforts on a forward-looking
basis due to the variability and complexity with respect to the
charges excluded from these non-GAAP measures; in particular, the
measures and effects of our stock-based compensation expense that
are directly impacted by unpredictable fluctuations in our share
price. We expect the variability of the above charges could have a
significant and potentially unpredictable impact on our future U.S.
GAAP financial results.
Use of Non-GAAP Financial Information Included within
this press release are the non-GAAP financial measures of Adjusted
EBITDA, Non-GAAP net income and Non-GAAP diluted EPS that
supplement the Consolidated Statements of Income of The Trade Desk,
Inc. (the Company) prepared under generally accepted accounting
principles (GAAP). Adjusted EBITDA is earnings before depreciation
and amortization, stock-based compensation, interest expense
(income), net, and provision for (benefit from) income taxes.
Non-GAAP net income excludes charges and the related income tax
effects for stock-based compensation. Tax rates on the
tax-deductible portions of the stock-based compensation expense
approximating 25% to 30% have been used in the computation of
non-GAAP net income and non-GAAP diluted EPS. Reconciliations of
GAAP to non-GAAP amounts for the periods presented herein are
provided in schedules accompanying this release and should be
considered together with the Consolidated Statements of Income.
These non-GAAP measures are not meant as a substitute for GAAP, but
are included solely for informational and comparative purposes. The
Company's management believes that this information can assist
investors in evaluating the Company's operational trends, financial
performance, and cash generating capacity. Management believes
these non-GAAP measures allow investors to evaluate the Company’s
financial performance using some of the same measures as
management. However, the non-GAAP financial measures should not be
regarded as a replacement for or superior to corresponding,
similarly captioned, GAAP measures and may be different from
non-GAAP financial measures used by other companies.
Third Quarter Financial Results Webcast and Conference Call
Details
- When: November 8, 2021 at 8:30 A.M. Pacific Time (11:30
A.M. Eastern Time).
- Webcast: A live webcast of the call can be accessed from
the Investor Relations section of The Trade Desk’s website at
http://investors.thetradedesk.com/. Following the call, a replay
will be available on the company’s website.
- Dial-in: To access the call via telephone in North
America, please dial 888-506-0062. For callers outside the United
States, please dial 1-973-528-0011. Participants should reference
the conference call ID code “917520” after dialing in.
- Audio replay: An audio replay of the call will be
available beginning about two hours after the call. To listen to
the replay in the United States, please dial 877-481-4010 (replay
code: 43477). Outside the United States, please dial 1-919-882-2331
(replay code: 43477). The audio replay will be available via
telephone until November 15, 2021.
The Trade Desk, Inc. uses its Investor Relations website
(http://investors.thetradedesk.com/investor-overview), its Twitter
feed (@TheTradeDesk), LinkedIn page
(https://www.linkedin.com/company/the-trade-desk/), and Facebook
page (https://www.facebook.com/TheTradeDesk/), and Jeff Green’s
Twitter feed (@jefftgreen) and LinkedIn profile
(https://www.linkedin.com/in/jefftgreen/) as a means of disclosing
information about the company and for complying with its disclosure
obligations under Regulation FD. The information that is posted
through these channels may be deemed material. Accordingly,
investors should monitor these channels in addition to The Trade
Desk’s press releases, SEC filings, public conference calls and
webcasts.
About The Trade Desk The Trade Desk is a technology
company that empowers buyers of advertising. Through its
self-service, cloud-based platform, ad buyers can create, manage,
and optimize digital advertising campaigns across ad formats and
devices. Integrations with major data, inventory, and publisher
partners ensure maximum reach and decisioning capabilities, and
enterprise APIs enable custom development on top of the platform.
Headquartered in Ventura, CA, The Trade Desk has offices across
North America, Europe, and Asia Pacific. To learn more, visit
thetradedesk.com or follow us on Facebook, Twitter, LinkedIn and
YouTube.
Forward-Looking Statements This document contains
“forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995. These statements relate
to expectations concerning matters that (a) are not historical
facts, (b) predict or forecast future events or results, or (c)
embody assumptions that may prove to have been inaccurate,
including statements relating to the industry and market trends,
and the Company’s financial targets, such as revenue and Adjusted
EBITDA. When words such as “believe,” “expect,” “anticipate,”
“will,” “outlook” or similar expressions are used, the Company is
making forward-looking statements. Although the Company believes
that the expectations reflected in such forward-looking statements
are reasonable, it cannot give readers any assurance that such
expectations will prove correct. These forward-looking statements
involve risks, uncertainties and assumptions, including those
related to the Company’s relatively limited operating history and
the impact of COVID-19 on the Company and its customers and
partners, which makes it difficult to evaluate the Company’s
business and prospects, the market for programmatic advertising
developing slower or differently than the Company’s expectations,
the demands and expectations of clients and the ability to attract
and retain clients. The actual results may differ materially from
those anticipated in the forward-looking statements as a result of
numerous factors, many of which are beyond the control of the
Company. These are disclosed in the Company’s reports filed from
time to time with the Securities and Exchange Commission, including
its most recent Form 10-K and any subsequent filings on Forms 10-Q
or 8-K, available at www.sec.gov. Readers are urged not to place
undue reliance on these forward-looking statements, which speak
only as of the date of this press release. The Company does not
intend to update any forward-looking statement contained in this
press release to reflect events or circumstances arising after the
date hereof.
THE TRADE DESK, INC.
CONSOLIDATED STATEMENTS OF
INCOME
(Amounts in thousands, except
per share amounts)
(Unaudited)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2021
2020
2021
2020
Revenue
$
301,091
$
216,113
$
800,869
$
516,128
Operating expenses (1):
Platform operations
53,400
44,826
154,709
127,167
Sales and marketing
59,278
44,637
176,797
116,002
Technology and development
55,847
41,079
163,301
117,931
General and administrative
52,120
42,789
155,884
117,252
Total operating expenses
220,645
173,331
650,691
478,352
Income from operations
80,446
42,782
150,178
37,776
Total other expense, net
1,470
223
1,560
834
Income before income taxes
78,976
42,559
148,618
36,942
Provision for (benefit from) income
taxes
19,592
1,312
18,895
(53,473
)
Net income
$
59,384
$
41,247
$
129,723
$
90,415
Earnings per share:
Basic
$
0.12
$
0.09
$
0.27
$
0.20
Diluted
$
0.12
$
0.08
$
0.26
$
0.19
Weighted average shares outstanding:
Basic
478,101
465,819
475,496
460,747
Diluted
498,912
492,207
497,942
487,309
_______________________
(1) Includes stock-based compensation
expense as follows:
STOCK-BASED COMPENSATION
EXPENSE
(Amounts in thousands)
(Unaudited)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2021
2020
2021
2020
Platform operations
$
2,518
$
1,639
$
11,624
$
5,459
Sales and marketing
9,099
6,916
37,362
18,549
Technology and development
11,269
7,911
41,337
24,345
General and administrative
11,573
10,386
41,687
25,398
Total
$
34,459
$
26,852
$
132,010
$
73,751
THE TRADE DESK, INC.
CONSOLIDATED BALANCE
SHEETS
(Amounts in thousands)
(Unaudited)
As of
As of
September 30, 2021
December 31, 2020
ASSETS
Current assets:
Cash and cash equivalents
$
576,916
$
437,353
Short-term investments, net
221,685
186,685
Accounts receivable, net
1,624,759
1,584,109
Prepaid expenses and other current
assets
92,557
102,170
Total current assets
2,515,917
2,310,317
Property and equipment, net
137,416
115,863
Operating lease assets
242,436
248,143
Deferred income taxes
46,405
50,168
Other assets, non-current
46,581
29,154
Total assets
$
2,988,755
$
2,753,645
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Accounts payable
$
1,304,971
$
1,348,480
Accrued expenses and other current
liabilities
77,323
88,335
Operating lease liabilities
45,603
37,868
Total current liabilities
1,427,897
1,474,683
Operating lease liabilities,
non-current
247,923
254,562
Other liabilities, non-current
10,121
11,255
Total liabilities
1,685,941
1,740,500
Stockholders' equity:
Preferred stock
—
—
Common stock
—
—
Additional paid-in capital
698,724
538,778
Retained earnings
604,090
474,367
Total stockholders' equity
1,302,814
1,013,145
Total liabilities and stockholders'
equity
$
2,988,755
$
2,753,645
THE TRADE DESK, INC.
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(Amounts in thousands)
(Unaudited)
Nine Months Ended September
30,
2021
2020
OPERATING ACTIVITIES:
Net income
$
129,723
$
90,415
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
29,969
20,777
Stock-based compensation
132,010
73,751
Allowance for credit losses on accounts
receivable
520
2,722
Noncash lease expense
29,914
24,052
Deferred income taxes
5,044
(20,978
)
Other
6,730
1,242
Changes in operating assets and
liabilities:
Accounts receivable
(48,637
)
21,063
Prepaid expenses and other assets
20,627
(23,919
)
Accounts payable
(44,105
)
47,728
Accrued expenses and other liabilities
(14,790
)
11,047
Operating lease liabilities
(31,886
)
(10,388
)
Net cash provided by operating
activities
215,119
237,512
INVESTING ACTIVITIES:
Purchases of investments
(233,427
)
(127,254
)
Sales of investments
4,539
—
Maturities of investments
192,077
128,315
Purchases of property and equipment
(43,920
)
(57,721
)
Capitalized software development costs
(3,684
)
(4,246
)
Business acquisition
(13,261
)
—
Net cash used in investing activities
(97,676
)
(60,906
)
FINANCING ACTIVITIES:
Proceeds from line of credit
—
143,000
Repayment on line of credit
—
(71,000
)
Payment of debt financing costs
(1,924
)
—
Proceeds from exercise of stock
options
39,559
54,038
Proceeds from employee stock purchase
plan
22,758
15,035
Taxes paid related to net settlement of
restricted stock awards
(38,273
)
(14,184
)
Net cash provided by financing
activities
22,120
126,889
Increase in cash and cash equivalents
139,563
303,495
Cash and cash equivalents—Beginning of
period
437,353
130,876
Cash and cash equivalents—End of
period
$
576,916
$
434,371
Non-GAAP Financial Metrics (Amounts in thousands, except per
share amounts)
The following tables show the Company’s non-GAAP financial
metrics reconciled to the comparable GAAP financial metrics
included in this release.
Three Months Ended
Nine Months Ended
September 30,
September 30,
2021
2020
2021
2020
Net income
$
59,384
$
41,247
$
129,723
$
90,415
Add back:
Depreciation and amortization
8,952
7,517
29,969
20,777
Stock-based compensation
34,459
26,852
132,010
73,751
Interest expense (income), net
317
235
556
(740
)
Provision for (benefit from) income
taxes
19,592
1,312
18,895
(53,473
)
Adjusted EBITDA
$
122,704
$
77,163
$
311,153
$
130,730
Three Months Ended
Nine Months Ended
September 30,
September 30,
2021
2020
2021
2020
GAAP net income
$
59,384
$
41,247
$
129,723
$
90,415
Add back (deduct):
Stock-based compensation expense
34,459
26,852
132,010
73,751
Adjustment for income taxes
(4,616
)
(5,440
)
(14,305
)
(13,341
)
Non-GAAP net income
$
89,227
$
62,659
$
247,428
$
150,825
GAAP diluted EPS
$
0.12
$
0.08
$
0.26
$
0.19
Non-GAAP diluted EPS
$
0.18
$
0.13
$
0.50
$
0.31
Weighted average shares
outstanding—diluted
498,912
492,207
497,942
487,309
View source
version on businesswire.com: https://www.businesswire.com/news/home/20211108005393/en/
Investors Chris Toth Vice President Investor Relations, The
Trade Desk ir@thetradedesk.com 310-334-9183 Media Ian Colley Vice
President Public Relations, The Trade Desk
ian.colley@thetradedesk.com 914-434-3043
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