Q4 revenue grew 24% year over year to $491 million. 2022 revenue
increased 32% year over year to $1,578 million.
The Trade Desk also announced its board of directors'
authorization to repurchase up to $700 million of its Class A
common stock.
The Trade Desk, Inc. (“The Trade Desk” or the “Company”)
(NASDAQ: TTD), a provider of a global technology platform for
buyers of advertising, today announced financial results for its
fourth quarter and fiscal year ended December 31, 2022.
“The Trade Desk outpaced nearly all areas of digital advertising
in 2022, with 32% revenue growth year over year, and a record $491
million of revenue in the fourth quarter alone. This performance
was underscored by significant profitability and cash flow. In an
unpredictable macro environment, our growing relationships with
agencies and brands is testament to the value of the open internet
over the limitations of walled gardens,” said Jeff Green, founder
and CEO of The Trade Desk. “More of the world’s leading advertisers
are gravitating to fast-growing channels such as Connected TV (CTV)
and retail media, which offer premium value at scale. They are
leveraging new identity tools, such as UID2, which allow them to
make the most of their first-party data in a privacy-safe manner.
These trends will accelerate in 2023 and we will continue to invest
in our platform to help advertisers drive maximum value from these
opportunities.”
Fourth Quarter and Full Year 2022
Financial Highlights:
The following table summarizes the Company’s consolidated
financial results for the quarters and fiscal years ended December
31, 2022 and 2021 ($ in millions, except per share amounts):
Three Months Ended
December 31,
Year Ended December
31,
2022
2021
2022
2021
GAAP Results
Revenue
$
491
$
396
$
1,578
$
1,196
Increase in revenue year over year
24
%
24
%
32
%
43
%
Net income
$
71
$
8
$
53
$
138
GAAP diluted earnings per share
$
0.14
$
0.02
$
0.11
$
0.28
Non-GAAP Results
Adjusted EBITDA
$
245
$
192
$
668
$
503
Adjusted EBITDA margin
50
%
48
%
42
%
42
%
Non-GAAP net income
$
190
$
208
$
522
$
456
Non-GAAP diluted earnings per share
$
0.38
$
0.42
$
1.04
$
0.91
Fourth Quarter and 2022 Recent Business
Highlights
- Continued Share Gains: 2022 gross spend of nearly $7.8
billion
- Strong Customer Retention: Customer retention remained
over 95% during the fourth quarter, as it has for the past nine
consecutive years.
- Continued Collaboration and Support for Unified ID 2.0:
The Trade Desk is building support for Unified ID 2.0 (UID2), an
industry-wide approach to identity that aims to preserve the value
of relevant advertising on the open internet without reliance upon
third-party cookies, while giving consumers transparency and
control over their data. Recent partnerships and pledges of
integration and support include:
- Leading advertisers running campaigns on Disney’s UID2-powered
audience graph report results 12 times more effective in reaching
target audience.
- Paramount Advertising announced its integration with UID2 to
scale identity on its CTV inventory.
- DRAKO, location-based marketing and analytics services company,
announced its support of UID2.
- Launched Galileo: Galileo can enable advertisers to
onboard and activate their first-party data quickly and easily. It
incorporates:
- Seamless and direct onboarding integrations with all major
customer relationship management (“CRM”), customer data platform
(“CDP”), and other data and clean room providers, allowing
advertisers to instantly begin matching audiences using UID2.
- Audience matching across all publishers, platforms, devices,
and channels — including CTV — which provides a true omnichannel
identity environment.
- Objective reporting and measurement of identity matching and
advertising performance.
- Industry Recognition (2022):
- Customers’ Choice for Ad Tech on Gartner® Peer Insights™
- BIG Innovation Award for Technology Product (Solimar)
- Business Insider’s Hottest Ad Tech Companies of 2022
- Sales and Marketing Technology Awards: Product of the Year for
User Optimization Experience
- Crain's 100 Best Places to Work in NYC 2022 (9th consecutive
year)
- Stevie Awards for Great Employers - Employer of the Year,
Computer Software
- Stevie Awards for Customer Service Success - Silver, Technology
Industries
- Forbes Global 2000
- Samantha Jacobson, Chief Strategy Officer, named to AdAge 40
under 40
- Samantha Jacobson, Chief Strategy Officer, named Adweek’s
Digital & Tech Executive of the Year
- Jed Dederick, Chief Client Officer, named to Adweek 50
List
Financial Guidance:
First Quarter 2023 outlook summary:
- Revenue at least $363 million
- Adjusted EBITDA of approximately $78 million
The Company has 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. The Company expects 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
Operations of the Company prepared under generally accepted
accounting principles (“GAAP”). Adjusted EBITDA is earnings before
interest expense (income), net; provision for (benefit from) income
taxes; depreciation and amortization; and stock-based compensation.
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 Operations.
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.
Fourth Quarter and Fiscal Year 2022
Financial Results Webcast and Conference Call
Details
- When: February 15, 2023 at 5:00 A.M. Pacific Time (8:00
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 “921638” 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: 47509). Outside the United States, please dial 1-919-882-2331
(replay code: 47509). The audio replay will be available via
telephone until February 22, 2023.
The Trade Desk, Inc. uses its Investor Relations website
(http://investors.thetradedesk.com/), its Twitter feed
(@TheTradeDesk), LinkedIn page
(https://www.linkedin.com/company/the-trade-desk/), Facebook page
(https://www.facebook.com/TheTradeDesk/), 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.
Share Repurchase Program
The Company also announced that its board of directors approved
a share repurchase program with authorization to purchase up to
$700 million of its Class A Common Stock. The new share repurchase
program is designed to help offset the impact of future share
dilution from employee stock issuances. Repurchases under the
program may be made in the open market, in privately negotiated
transactions or otherwise, with the amount and timing of
repurchases to be determined at the Company’s discretion, depending
on market conditions and corporate needs. Open market repurchases
will be structured to occur in accordance with applicable federal
securities laws, including within the pricing and volume
requirements of Rule 10b-18 under the Securities Exchange Act of
1934, as amended. The Company may also, from time to time, enter
into Rule 10b5-1 plans to facilitate repurchases of its shares
under this authorization. This program does not obligate the
Company to acquire any particular amount of Class A Common Stock,
and may be modified, suspended or terminated at any time at the
discretion of the Company’s board of directors.
The Company expects to fund repurchases with existing cash and
cash equivalents and short-term investments. As of December 31,
2022, The Trade Desk had cash and cash equivalents and short-term
investments of $1,447 million.
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 press release 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, the Company’s financial targets, such as revenue and
Adjusted EBITDA and the amount, timing, and sources of funding for
the Company’s share repurchase program. 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, 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, the ability to attract and retain clients,
changes in price and volume and the volatility of the Company’s
Class A Common Stock and adverse developments affecting prices and
trading of exchange-traded securities, including securities quoted
on the Nasdaq Global Market, unexpected or otherwise unplanned or
alternative requirements with respect to our capital investments.
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
OPERATIONS
(Amounts in thousands, except
per share amounts)
(Unaudited)
Three Months Ended
December 31,
Year Ended December
31,
2022
2021
2022
2021
Revenue
$
490,737
$
395,598
$
1,577,795
$
1,196,467
Operating expenses (1):
Platform operations
79,619
66,845
281,123
221,554
Sales and marketing
92,829
72,501
337,975
249,298
Technology and development
84,479
62,836
319,876
226,137
General and administrative
133,650
218,777
525,167
374,661
Total operating expenses
390,577
420,959
1,464,141
1,071,650
Income (loss) from operations
100,160
(25,361
)
113,654
124,817
Total other expense (income), net
(11,960
)
1,221
(13,716
)
2,781
Income (loss) before income taxes
112,120
(26,582
)
127,370
122,036
Provision for (benefit from) income
taxes
40,933
(34,621
)
73,985
(15,726
)
Net income
$
71,187
$
8,039
$
53,385
$
137,762
Earnings per share:
Basic
$
0.15
$
0.02
$
0.11
$
0.29
Diluted
$
0.14
$
0.02
$
0.11
$
0.28
Weighted-average shares outstanding:
Basic
489,217
480,873
486,937
476,851
Diluted
500,432
500,314
499,925
498,540
___________________________
(1)
Includes stock-based compensation
expense as follows:
STOCK-BASED COMPENSATION
EXPENSE
(Amounts in thousands)
(Unaudited)
Three Months Ended
December 31,
Year Ended December
31,
2022
2021
2022
2021
Platform operations
$
4,031
$
4,289
$
18,285
$
15,913
Sales and marketing
15,724
13,309
64,442
50,671
Technology and development
27,564
16,454
94,822
57,791
General and administrative (1)
80,212
171,351
321,093
213,038
Total
$
127,531
$
205,403
$
498,642
$
337,413
___________________________
(1)
Includes stock-based compensation
expense related to a long-term CEO performance grant of $66 million
and $262 million for the three and twelve months ended December 31,
2022, respectively, and $158 million for the three and twelve
months ended December 31, 2021.
THE TRADE DESK, INC.
CONSOLIDATED BALANCE
SHEETS
(Amounts in thousands)
(Unaudited)
As of December 31,
2022
As of December 31,
2021
ASSETS
Current assets:
Cash and cash equivalents
$
1,030,506
$
754,154
Short-term investments, net
416,080
204,625
Accounts receivable, net
2,347,195
2,020,720
Prepaid expenses and other current
assets
51,836
112,150
Total current assets
3,845,617
3,091,649
Property and equipment, net
173,759
135,856
Operating lease assets
220,396
234,091
Deferred income taxes
94,028
68,244
Other assets, non-current
46,879
47,500
Total assets
$
4,380,679
$
3,577,340
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Accounts payable
$
1,871,419
$
1,655,684
Accrued expenses and other current
liabilities
105,474
101,472
Operating lease liabilities
52,430
46,149
Total current liabilities
2,029,323
1,803,305
Operating lease liabilities,
non-current
208,527
238,449
Other liabilities, non-current
27,490
8,280
Total liabilities
2,265,340
2,050,034
Stockholders' equity:
Preferred stock
—
—
Common stock
—
—
Additional paid-in capital
1,449,825
915,177
Retained earnings
665,514
612,129
Total stockholders' equity
2,115,339
1,527,306
Total liabilities and stockholders'
equity
$
4,380,679
$
3,577,340
THE TRADE DESK, INC.
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(Amounts in thousands)
(Unaudited)
Year Ended December
31,
2022
2021
OPERATING ACTIVITIES:
Net income
$
53,385
$
137,762
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
54,425
42,219
Stock-based compensation
498,642
337,413
Noncash lease expense
44,115
40,315
Allowance for credit losses on accounts
receivable
3,203
1,456
Deferred income taxes
(11,507
)
(16,777
)
Other
622
5,803
Changes in operating assets and
liabilities:
Accounts receivable
(291,747
)
(444,342
)
Prepaid expenses and other current and
non-current assets
50,655
1,648
Accounts payable
187,119
309,410
Accrued expenses and other current and
non-current liabilities
8,168
7,596
Operating lease liabilities
(48,346
)
(43,990
)
Net cash provided by operating
activities
548,734
378,513
INVESTING ACTIVITIES:
Purchases of investments
(553,295
)
(278,387
)
Sales of investments
1,977
4,539
Maturities of investments
338,829
253,444
Purchases of property and equipment
(84,160
)
(54,804
)
Capitalized software development costs
(7,725
)
(5,169
)
Business acquisition
—
(13,261
)
Net cash used in investing activities
(304,374
)
(93,638
)
FINANCING ACTIVITIES:
Payment of debt financing costs
—
(1,924
)
Proceeds from exercise of stock
options
47,525
61,476
Proceeds from employee stock purchase
plan
33,062
29,229
Taxes paid related to net settlement of
restricted stock awards
(48,595
)
(56,855
)
Net cash provided by financing
activities
31,992
31,926
Increase in cash and cash equivalents
276,352
316,801
Cash and cash equivalents—Beginning of
year
754,154
437,353
Cash and cash equivalents—End of year
$
1,030,506
$
754,154
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
December 31,
Year Ended December
31,
2022
2021
2022
2021
Net income
$
71,187
$
8,039
$
53,385
$
137,762
Add back:
Depreciation and amortization expense
16,844
12,250
54,425
42,219
Stock-based compensation expense
127,531
205,403
498,642
337,413
Interest expense (income), net
(11,434
)
474
(12,755
)
1,030
Provision for (benefit from) income
taxes
40,933
(34,621
)
73,985
(15,726
)
Adjusted EBITDA
$
245,061
$
191,545
$
667,682
$
502,698
Three Months Ended
December 31,
Year Ended December
31,
2022
2021
2022
2021
GAAP net income
$
71,187
$
8,039
$
53,385
$
137,762
Add back (deduct):
Stock-based compensation expense
127,531
205,403
498,642
337,413
Adjustment for income taxes
(8,576
)
(5,314
)
(29,995
)
(19,619
)
Non-GAAP net income
$
190,142
$
208,128
$
522,032
$
455,556
GAAP diluted earnings per share
$
0.14
$
0.02
$
0.11
$
0.28
GAAP weighted-average shares
outstanding—diluted
500,432
500,314
499,925
498,540
Non-GAAP diluted earnings per share
$
0.38
$
0.42
$
1.04
$
0.91
Non-GAAP weighted-average shares used in
computing Non-GAAP earnings per share, diluted
500,432
500,314
499,925
498,540
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230215005363/en/
Investors Jake Graves Manager, Investor Relations The
Trade Desk ir@thetradedesk.com 312-620-0806 Media Melinda
Zurich VP, Communications The Trade Desk
melinda.zurich@thetradedesk.com 201-320-9398
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