The Trade Desk, Inc. (NASDAQ: TTD), a provider of a global
technology platform for buyers of advertising, today announced
financial results for its second quarter ended June 30, 2023.
“Q2 marked another quarter of outstanding execution and share
gains for The Trade Desk, delivering $464 million of revenue and
23% growth. With advances in areas such as CTV, retail and
identity, we are helping the world’s largest brands buy media on
the open internet with more precision and transparency than ever,”
said Jeff Green, Co-founder and CEO of The Trade Desk. “With the
launch of Kokai, we are surfacing that value more intuitively and
putting data next to every decision. We are helping our clients put
their first-party data to work, we’re making it easier for partners
to integrate with us, and we’re helping clients get the full value
of AI as a co-pilot across many aspects of the campaign process. As
a result of these innovations, I’m confident we will continue to
gain share, especially in key growth markets such as CTV.”
Second Quarter 2023 Financial
Highlights:
The following table summarizes our consolidated financial
results for the three and six months ended June 30, 2023 and 2022
($ in millions, except per share amounts):
Three Months Ended
June 30,
Six Months Ended
June 30,
2023
2022
2023
2022
GAAP Results
Revenue
$
464
$
377
$
847
$
692
Increase in revenue year over year
23
%
35
%
22
%
39
%
Net income (loss)
$
33
$
(19
)
$
42
$
(34
)
GAAP diluted earnings (loss) per share
$
0.07
$
(0.04
)
$
0.08
$
(0.07
)
Non-GAAP Results
Adjusted EBITDA
$
180
$
139
$
288
$
260
Adjusted EBITDA margin
39
%
37
%
34
%
38
%
Non-GAAP net income
$
139
$
99
$
254
$
203
Non-GAAP diluted earnings per share
$
0.28
$
0.20
$
0.51
$
0.41
Second Quarter and Recent Business
Highlights:
- Strong Customer Retention: Customer retention remained
over 95% during the second 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:
- Warner Bros. Discovery announced integration with UID2 across
its premium entertainment, sports, news and lifestyle brands with
its digital platforms, including Max and Discovery+.
- Walmart Connect announced it is testing the integration of UID2
to inform decisioning across the open internet within the Walmart
DSP.
- EUID, the European counterpart to UID2 specifically developed
for the European market, is gaining support across Europe from
brands, publishers, and retailers. Initial industry engagement
includes Bacardi, Kimberly-Clark, Aller Media, Future, OneFootball,
Prisma Media, Tesco, and others.
- 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.
- 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 dozens of publishers representing over 11,000
destinations across connected TV, mobile, display and audio.
- Industry Recognition (2023):
- Top Women in Media and AdTech Award Winners: Samantha Jacobson
- Change-Maker, Catherine Patterson - Tech Trailblazer, Jaime Nash
- Programmatic Storyteller
- Fortune - Best Workplaces for Millennials
- National Intern Day - Top 100 Internship Programs of 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 $44 million of our
Class A common stock in the second quarter of 2023. As of June 30,
2023, we had $364 million available and authorized for
repurchases.
Financial Guidance:
Third Quarter 2023 outlook summary:
- Revenue at least $485 million
- Adjusted EBITDA of approximately $185 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; provision for
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.
Second Quarter 2023 Financial Results
Webcast and Conference Call Details
- When: August 9, 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 “192228” 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: 48706). Outside the United States, please dial 1-919-882-2331
(replay code: 48706). The audio replay will be available via
telephone until August 16, 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 June
30,
Six Months Ended June
30,
2023
2022
2023
2022
Revenue
$
464,254
$
376,962
$
847,057
$
692,285
Operating expenses (1):
Platform operations
86,654
67,490
171,521
131,380
Sales and marketing
111,489
89,420
208,711
160,108
Technology and development
98,308
83,483
192,018
155,482
General and administrative
126,130
134,826
256,442
260,625
Total operating expenses
422,581
375,219
828,692
707,595
Income (loss) from operations
41,673
1,743
18,365
(15,310
)
Total other income, net
(18,254
)
(339
)
(31,954
)
(58
)
Income (loss) before income taxes
59,927
2,082
50,319
(15,252
)
Provision for income taxes
26,988
21,155
8,054
18,419
Net income (loss)
$
32,939
$
(19,073
)
$
42,265
$
(33,671
)
Earnings (loss) per share:
Basic
$
0.07
$
(0.04
)
$
0.09
$
(0.07
)
Diluted
$
0.07
$
(0.04
)
$
0.08
$
(0.07
)
Weighted-average shares outstanding:
Basic
488,431
486,310
489,068
485,256
Diluted
499,349
486,310
499,570
485,256
___________________________
(1) Includes stock-based compensation
expense as follows:
STOCK-BASED COMPENSATION EXPENSE
(Amounts in thousands)
(Unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
2023
2022
2023
2022
Platform operations
$
4,967
$
4,787
$
8,913
$
10,737
Sales and marketing
18,800
17,332
32,923
33,857
Technology and development
26,689
22,224
47,556
44,617
General and administrative (1)
66,627
80,870
141,161
160,897
Total
$
117,083
$
125,213
$
230,553
$
250,108
___________________________
(1) Includes stock-based compensation
expense related to a long-term CEO performance grant of $48 million
and $66 million for the three months ended June 30, 2023 and 2022,
respectively, as well as $108 million and $131 million for the six
months ended June 30, 2023 and 2022, respectively.
THE TRADE DESK, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(Amounts in thousands)
(Unaudited)
As of June 30,
2023
As of December 31,
2022
ASSETS
Current assets:
Cash and cash equivalents
$
965,831
$
1,030,506
Short-term investments, net
465,113
416,080
Accounts receivable, net
2,346,070
2,347,195
Prepaid expenses and other current
assets
54,749
51,836
Total current assets
3,831,763
3,845,617
Property and equipment, net
159,805
173,759
Operating lease assets
212,088
220,396
Deferred income taxes
94,028
94,028
Other assets, non-current
49,284
46,879
Total assets
$
4,346,968
$
4,380,679
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Accounts payable
$
1,892,906
$
1,871,419
Accrued expenses and other current
liabilities
103,285
105,474
Operating lease liabilities
54,793
52,430
Total current liabilities
2,050,984
2,029,323
Operating lease liabilities,
non-current
198,075
208,527
Other liabilities, non-current
26,499
27,490
Total liabilities
2,275,558
2,265,340
Stockholders' equity:
Preferred stock
—
—
Common stock
—
—
Additional paid-in capital
1,700,498
1,449,825
Retained earnings
370,912
665,514
Total stockholders' equity
2,071,410
2,115,339
Total liabilities and stockholders'
equity
$
4,346,968
$
4,380,679
THE TRADE DESK, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Amounts in thousands)
(Unaudited)
Six Months Ended June
30,
2023
2022
OPERATING ACTIVITIES:
Net income (loss)
$
42,265
$
(33,671
)
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Depreciation and amortization
39,359
24,624
Stock-based compensation
230,553
250,108
Noncash lease expense
24,325
21,343
Allowance for credit losses on accounts
receivable
318
2,078
Deferred income taxes
—
1,555
Other
(8,423
)
6,630
Changes in operating assets and
liabilities:
Accounts receivable
(35,368
)
112,345
Prepaid expenses and other current and
non-current assets
(3,659
)
29,018
Accounts payable
50,995
(129,853
)
Accrued expenses and other current and
non-current liabilities
399
(22,190
)
Operating lease liabilities
(25,102
)
(24,029
)
Net cash provided by operating
activities
315,662
237,958
INVESTING ACTIVITIES:
Purchases of investments
(316,307
)
(233,877
)
Sales of investments
—
1,977
Maturities of investments
274,401
154,092
Purchases of property and equipment
(16,556
)
(12,541
)
Capitalized software development costs
(3,415
)
(3,226
)
Net cash used in investing activities
(61,877
)
(93,575
)
FINANCING ACTIVITIES:
Repurchases of Class A common stock
(336,494
)
—
Proceeds from exercise of stock
options
27,772
31,795
Proceeds from employee stock purchase
plan
21,316
25,547
Taxes paid related to net settlement of
restricted stock awards
(31,054
)
(23,196
)
Net cash provided by (used in) financing
activities
(318,460
)
34,146
Increase (decrease) in cash and cash
equivalents
(64,675
)
178,529
Cash and cash equivalents—Beginning of
period
1,030,506
754,154
Cash and cash equivalents—End of
period
$
965,831
$
932,683
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
June 30,
Six Months Ended
June 30,
2023
2022
2023
2022
Net income (loss)
$
32,939
$
(19,073
)
$
42,265
$
(33,671
)
Add back:
Depreciation and amortization expense
20,066
12,274
39,359
24,624
Stock-based compensation expense
117,083
125,213
230,553
250,108
Interest expense (income), net
(17,507
)
(656
)
(31,930
)
420
Provision for income taxes
26,988
21,155
8,054
18,419
Adjusted EBITDA
$
179,569
$
138,913
$
288,301
$
259,900
Three Months Ended
June 30,
Six Months Ended
June 30,
2023
2022
2023
2022
GAAP net income (loss)
$
32,939
$
(19,073
)
$
42,265
$
(33,671
)
Add back (deduct):
Stock-based compensation expense
117,083
125,213
230,553
250,108
Adjustment for income taxes
(10,525
)
(7,500
)
(18,824
)
(13,135
)
Non-GAAP net income
$
139,497
$
98,640
$
253,994
$
203,302
GAAP diluted earnings (loss) per share
$
0.07
$
(0.04
)
$
0.08
$
(0.07
)
GAAP weighted-average shares
outstanding—diluted
499,349
486,310
499,570
485,256
Non-GAAP diluted earnings per share
$
0.28
$
0.20
$
0.51
$
0.41
Non-GAAP weighted-average shares used in
computing Non-GAAP earnings per share, diluted (1)
499,349
499,155
499,570
499,477
_________________________
(1) Includes an additional 12.8 million
and 14.2 million of dilutive securities for the three and six
months ended June 30, 2022, respectively, which are not included in
GAAP diluted weighted-average shares outstanding due to the
Company's net loss position for the three and six months ended June
30, 2022.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230809873189/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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