The Trade Desk, Inc. (NASDAQ: TTD), a provider of a global
technology platform for buyers of advertising, today announced
financial results for its first quarter ended March 31, 2023.
“We delivered outstanding performance in the first quarter, once
again outpacing the digital advertising market, growing revenue 21%
year-over-year to $383 million. Our strong start to the year is
testament to the increasing value that marketers place on
objective, transparent, data-driven media buying on the open
internet,” said Jeff Green, Co-founder and CEO of The Trade Desk.
“2023 is already proving to be a pivotal year for our industry. The
shift from linear to connected TV continues to accelerate and fully
decisioned programmatic will feature more prominently than ever at
this year’s upfronts. At the same time, more leading marketers are
leveraging new innovations, such as shopper data, to better
understand the relationship between campaign activity and consumer
action. As The Trade Desk continues to innovate in these and many
other areas, we are well positioned to deliver premium value to our
clients and gain share.”
First Quarter 2023 Financial
Highlights:
The following table summarizes our consolidated financial
results for the three months ended March 31, 2023 and 2022 ($ in
millions, except per share amounts):
Three Months Ended
March 31,
2023
2022
GAAP Results
Revenue
$
383
$
315
Increase in revenue year over year
21
%
43
%
Net income (loss)
$
9
$
(15
)
GAAP diluted earnings (loss) per share
$
0.02
$
(0.03
)
Non-GAAP Results
Adjusted EBITDA
$
109
$
121
Adjusted EBITDA margin
28
%
38
%
Non-GAAP net income
$
114
$
105
Non-GAAP diluted earnings per share
$
0.23
$
0.21
First Quarter and Recent Business
Highlights:
- Strong Customer Retention: Customer retention remained
over 95% during the first 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 preserves the value of
relevant advertising, while putting user control and privacy at the
forefront. UID2 is an upgrade and alternative to third-party
cookies. Recent partnerships and pledges of integration and support
include:
- In March, on stage at Forward '23: Always On, NBCUniversal
announced it is implementing UID2 on Peacock across all devices and
consumer touchpoints, including on CTV, the web, apps and
devices.
- In February, Rave, a leading group video-viewing platform with
over 70 million users announced its support and enablement of
UID2.
- In January, Paramount Advertising announced its integration
with UID2 to scale identity on its CTV inventory.
- OpenPath: OpenPath gives our clients a simplified,
direct connection to participating premium publishers across the
open internet. By supporting an objective, transparent supply path,
OpenPath helps to maximize value for everyone involved. OpenPath is
already live with a series of publishers representing thousands of
destinations across connected TV, mobile, display and audio.
- Industry Recognition (2023):
- Digiday Video and TV Awards - Best TV/Streaming Ad Sales
Product of the Year
- Business Insider Rising Stars of AdTech - Ellen Mulryan, Sr.
Dir. of Retail Data Partnerships
- Quadrant Knowledge Solutions SPARK Matrix for Ad Tech -
Technology Leader
- Stevie Awards for Customer Service Success - Bronze, Technology
Industries
- Share Repurchases: We repurchased $293 million of our
Class A common stock in the first quarter of 2023. As of March 31,
2023, we had $407 million available and authorized for
repurchases.
Chief Financial Officer
Transition:
The Company also announced the promotion of Laura Schenkein to
Chief Financial Officer, succeeding Blake Grayson, who will be
leaving the company for a senior finance role outside the
advertising technology industry after a transition period. Ms.
Schenkein will assume her new role effective June 1, 2023.
“Blake has been instrumental in scaling and advancing our
finance function in a way that has helped us thrive and grow during
the unprecedented events of the last three years,” said Mr. Green.
“He leaves a very strong foundation for future growth, and I want
to thank him for his partnership and support in a seamless
transition.”
“Laura Schenkein is a veteran of almost 20 years in finance and
investment banking, the last decade of which she has held a series
of leadership positions at The Trade Desk,” Mr. Green continued.
“She is a trusted advisor to me and other senior leaders at the
company, based not only on her unparalleled understanding of the
financial dynamics of The Trade Desk, but also the macro-market
drivers of our business. I could not be more excited to welcome
Laura to our leadership team.”
“I am very grateful for the opportunity to have worked closely
with Jeff and the outstanding team at The Trade Desk over the past
three years, and I look forward to cheering on the continued
success of the company in the years ahead,” said Mr. Grayson.
Financial Guidance:
Second Quarter 2023 outlook summary:
- Revenue at least $452 million
- Adjusted EBITDA of approximately $160 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 Condensed Consolidated Statements
of Operations of The Trade Desk, Inc. (the Company) prepared under
generally accepted accounting principles (GAAP). Adjusted EBITDA is
earnings before interest expense (income), net; 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 Condensed 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.
First Quarter 2023 Financial Results
Webcast and Conference Call Details
- When: May 10, 2023 at 2:00 P.M. Pacific Time (5:00 P.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 “591419” 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: 48177). Outside the United States, please dial 1-919-882-2331
(replay code: 48177). The audio replay will be available via
telephone until May 17, 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.
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, 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.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(Amounts in thousands, except
per share amounts)
(Unaudited)
Three Months Ended
March 31,
2023
2022
Revenue
$
382,803
$
315,323
Operating expenses (1):
Platform operations
84,867
63,890
Sales and marketing
97,222
70,688
Technology and development
93,710
71,999
General and administrative
130,312
125,799
Total operating expenses
406,111
332,376
Loss from operations
(23,308
)
(17,053
)
Total other expense (income), net
(13,700
)
281
Loss before income taxes
(9,608
)
(17,334
)
Benefit from income taxes
(18,934
)
(2,736
)
Net income (loss)
$
9,326
$
(14,598
)
Earnings (loss) per share:
Basic
$
0.02
$
(0.03
)
Diluted
$
0.02
$
(0.03
)
Weighted-average shares outstanding:
Basic
489,712
484,190
Diluted
499,795
484,190
___________________________
(1)
Includes stock-based compensation expense as follows:
STOCK-BASED COMPENSATION
EXPENSE
(Amounts in thousands)
(Unaudited)
Three Months Ended
March 31,
2023
2022
Platform operations
$
3,946
$
5,950
Sales and marketing
14,123
16,525
Technology and development
20,867
22,393
General and administrative (1)
74,534
80,027
Total
$
113,470
$
124,895
___________________________
(1)
Includes stock-based compensation expense
related to a long-term CEO performance grant of $60 million and $66
million for the three months ended March 31, 2023 and 2022,
respectively.
THE TRADE DESK, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(Amounts in thousands)
(Unaudited)
As of March 31,
2023
As of December 31,
2022
ASSETS
Current assets:
Cash and cash equivalents
$
892,702
$
1,030,506
Short-term investments, net
437,730
416,080
Accounts receivable, net
2,086,332
2,347,195
Prepaid expenses and other current
assets
59,101
51,836
Total current assets
3,475,865
3,845,617
Property and equipment, net
170,454
173,759
Operating lease assets
212,042
220,396
Deferred income taxes
94,028
94,028
Other assets, non-current
47,249
46,879
Total assets
$
3,999,638
$
4,380,679
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Accounts payable
$
1,677,154
$
1,871,419
Accrued expenses and other current
liabilities
100,146
105,474
Operating lease liabilities
53,054
52,430
Total current liabilities
1,830,354
2,029,323
Operating lease liabilities,
non-current
200,728
208,527
Other liabilities, non-current
27,749
27,490
Total liabilities
2,058,831
2,265,340
Stockholders' equity:
Preferred stock
—
—
Common stock
—
—
Additional paid-in capital
1,558,830
1,449,825
Retained earnings
381,977
665,514
Total stockholders' equity
1,940,807
2,115,339
Total liabilities and stockholders'
equity
$
3,999,638
$
4,380,679
THE TRADE DESK, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Amounts in thousands)
(Unaudited)
Three Months Ended March
31,
2023
2022
OPERATING ACTIVITIES:
Net income (loss)
$
9,326
$
(14,598
)
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Depreciation and amortization
19,293
12,350
Stock-based compensation
113,470
124,895
Noncash lease expense
11,917
10,515
Allowance for credit losses on accounts
receivable
316
725
Deferred income taxes
—
(5,304
)
Other
(1,310
)
998
Changes in operating assets and
liabilities:
Accounts receivable
258,165
259,483
Prepaid expenses and other current and
non-current assets
(5,481
)
23,743
Accounts payable
(200,701
)
(245,937
)
Accrued expenses and other current and
non-current liabilities
(4,309
)
(8,688
)
Operating lease liabilities
(13,113
)
(11,990
)
Net cash provided by operating
activities
187,573
146,192
INVESTING ACTIVITIES:
Purchases of investments
(144,721
)
(121,221
)
Maturities of investments
126,731
64,133
Purchases of property and equipment
(9,156
)
(8,401
)
Capitalized software development costs
(1,467
)
(1,614
)
Net cash used in investing activities
(28,613
)
(67,103
)
FINANCING ACTIVITIES:
Repurchases of Class A common stock
(291,534
)
—
Proceeds from exercise of stock
options
10,365
24,408
Taxes paid related to net settlement of
restricted stock awards
(15,595
)
(13,428
)
Net cash provided by (used in) financing
activities
(296,764
)
10,980
Increase (decrease) in cash and cash
equivalents
(137,804
)
90,069
Cash and cash equivalents—Beginning of
period
1,030,506
754,154
Cash and cash equivalents—End of
period
$
892,702
$
844,223
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
March 31,
2023
2022
Net income (loss)
$
9,326
$
(14,598
)
Add back:
Depreciation and amortization expense
19,293
12,350
Stock-based compensation expense
113,470
124,895
Interest expense (income), net
(14,423
)
1,076
Benefit from income taxes
(18,934
)
(2,736
)
Adjusted EBITDA
$
108,732
$
120,987
Three Months Ended
March 31,
2023
2022
GAAP net income (loss)
$
9,326
$
(14,598
)
Add back (deduct):
Stock-based compensation expense
113,470
124,895
Adjustment for income taxes
(8,299
)
(5,635
)
Non-GAAP net income
$
114,497
$
104,662
GAAP diluted earnings (loss) per share
$
0.02
$
(0.03
)
GAAP weighted-average shares
outstanding—diluted
499,795
484,190
Non-GAAP diluted earnings per share
$
0.23
$
0.21
Non-GAAP weighted-average shares used in
computing Non-GAAP earnings per share, diluted (1)
499,795
499,801
_________________________
(1)
Includes an additional 15.6 million of
dilutive securities for the three months ended March 31, 2022,
which are not included in GAAP diluted weighted-average shares
outstanding due to the Company's net loss position for the three
months ended March 31, 2022.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230510005616/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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