The Trade Desk, Inc. (NASDAQ: TTD), a provider of a global
technology platform for buyers of advertising, today announced
financial results for its third quarter ended September 30,
2023.
“Q3 was a strong quarter for The Trade Desk as we delivered
revenue of $493 million, accelerating growth to 25%. This
performance underlines the premium that advertisers are placing on
precision, agility and transparency as they seek to maximize
returns from their campaigns,” said Jeff Green, Co-founder and CEO
of The Trade Desk. “As we enter our busiest time of year and look
ahead to 2024, we have never been in a better position to capture
greater share of the $1 trillion advertising TAM. With the
generational shift to CTV, the growing opportunity in shopper
marketing, our leadership in identity, and our most important
product release ever with Kokai, we are better positioned than ever
to help advertisers leverage data to drive growth and differentiate
their brands.”
Third Quarter 2023 Financial
Highlights:
The following table summarizes our consolidated financial
results for the three and nine months ended September 30, 2023 and
2022 ($ in millions, except per share amounts):
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023
2022
2023
2022
GAAP Results
Revenue
$
493
$
395
$
1,340
$
1,087
Increase in revenue year over year
25
%
31
%
23
%
36
%
Net income (loss)
$
39
$
16
$
82
$
(18
)
GAAP diluted earnings (loss) per share
$
0.08
$
0.03
$
0.16
$
(0.04
)
Non-GAAP Results
Adjusted EBITDA
$
200
$
163
$
488
$
423
Adjusted EBITDA margin
40
%
41
%
36
%
39
%
Non-GAAP net income
$
167
$
129
$
421
$
332
Non-GAAP diluted earnings per share
$
0.33
$
0.26
$
0.84
$
0.66
Third Quarter and Recent Business
Highlights:
- Strong Customer Retention: Customer retention remained
over 95% during the third 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:
- With its integration of UID2, device and software company HP
has seen improved targeting on CTV, and as a result, the company
has reduced wasted advertising spend.
- In September, Philo adopted UID2 across its roster of premium
streaming TV channels.
- 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):
- Digiday Video and TV Awards - Best TV/Streaming Ad Sales
Product of the Year
- DigiZ Awards Hong Kong - Best Programmatic Advertising
Platform
- Marketing Excellence Awards Singapore - Excellence in
Data-Driven Marketing - Gold
- The Forrester Wave - Omnichannel Demand-Side Platforms
Leader
- Quadrant Knowledge Solutions SPARK Matrix for Ad Tech -
Technology Leader
- Stevie Awards for Customer Service Success - Bronze, Technology
Industries
- Ad Age 40 under 40 Award Winner - Jaime Nash
- Top Women in Media and AdTech Award Winners: Samantha Jacobson
- Change-Maker, Catherine Patterson - Tech Trailblazer, Jaime Nash
- Programmatic Storyteller
- Business Insider Rising Stars of AdTech - Ellen Mulryan, Sr.
Dir. of Retail Data Partnerships
- Fortune - Best Workplaces for Millennials
- Fortune - Best Workplaces in Technology
- Institutional Investor 2023-2024 All-America Executive Team
List - Jeff Green, Founder and CEO
- US News & World Report - Best Media Companies To Work
For
- National Intern Day - Top 100 Internship Programs of
2023
- Share Repurchases: We repurchased $90 million of our
Class A common stock in the third quarter of 2023. As of
September 30, 2023, we had $273 million available and
authorized for repurchases.
Financial Guidance:
Fourth Quarter 2023 outlook summary:
- Revenue at least $580 million
- Adjusted EBITDA of approximately $270 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 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.
Third Quarter 2023 Financial Results
Webcast and Conference Call Details
- When: November 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 “130063” 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: 49251). Outside the United States, please dial 1-919-882-2331
(replay code: 49251). The audio replay will be available via
telephone until November 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 in which
we participate 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
September 30,
Nine Months Ended
September 30,
2023
2022
2023
2022
Revenue
$
493,266
$
394,773
$
1,340,323
$
1,087,058
Operating expenses (1):
Platform operations
93,382
70,124
264,903
201,504
Sales and marketing
112,466
85,038
321,177
245,146
Technology and development
117,772
79,915
309,790
235,397
General and administrative
131,969
130,892
388,411
391,517
Total operating expenses
455,589
365,969
1,284,281
1,073,564
Income from operations
37,677
28,804
56,042
13,494
Total other income, net
(19,323
)
(1,698
)
(51,277
)
(1,756
)
Income before income taxes
57,000
30,502
107,319
15,250
Provision for income taxes
17,648
14,633
25,702
33,052
Net income (loss)
$
39,352
$
15,869
$
81,617
$
(17,802
)
Earnings (loss) per share:
Basic
$
0.08
$
0.03
$
0.17
$
(0.04
)
Diluted
$
0.08
$
0.03
$
0.16
$
(0.04
)
Weighted-average shares outstanding:
Basic
489,447
487,963
489,195
486,168
Diluted
501,880
500,300
500,348
486,168
___________________________
(1)
Includes stock-based compensation expense
as follows:
THE TRADE DESK, INC.
STOCK-BASED COMPENSATION EXPENSE (Amounts in thousands)
(Unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023
2022
2023
2022
Platform operations
$
5,729
$
3,517
$
14,642
$
14,254
Sales and marketing
21,116
14,861
54,039
48,718
Technology and development
43,727
22,641
91,283
67,258
General and administrative (1)
69,061
79,984
210,222
240,881
Total
$
139,633
$
121,003
$
370,186
$
371,111
___________________________
(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 September 30, 2023 and 2022,
respectively, as well as $156 million and $197 million for the nine
months ended September 30, 2023 and 2022, respectively.
THE TRADE DESK, INC. CONDENSED
CONSOLIDATED BALANCE SHEETS (Amounts in thousands)
(Unaudited)
As of September 30,
2023
As of December 31,
2022
ASSETS
Current assets:
Cash and cash equivalents
$
1,071,764
$
1,030,506
Short-term investments, net
450,117
416,080
Accounts receivable, net
2,434,047
2,347,195
Prepaid expenses and other current
assets
57,878
51,836
Total current assets
4,013,806
3,845,617
Property and equipment, net
152,863
173,759
Operating lease assets
208,583
220,396
Deferred income taxes
94,028
94,028
Other assets, non-current
51,152
46,879
Total assets
$
4,520,432
$
4,380,679
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Accounts payable
$
1,967,649
$
1,871,419
Accrued expenses and other current
liabilities
121,616
105,474
Operating lease liabilities
57,890
52,430
Total current liabilities
2,147,155
2,029,323
Operating lease liabilities,
non-current
190,207
208,527
Other liabilities, non-current
27,544
27,490
Total liabilities
2,364,906
2,265,340
Stockholders' equity:
Preferred stock
—
—
Common stock
—
—
Additional paid-in capital
1,835,107
1,449,825
Retained earnings
320,419
665,514
Total stockholders' equity
2,155,526
2,115,339
Total liabilities and stockholders'
equity
$
4,520,432
$
4,380,679
THE TRADE DESK, INC. CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS (Amounts in thousands)
(Unaudited)
Nine Months Ended September
30,
2023
2022
OPERATING ACTIVITIES:
Net income (loss)
$
81,617
$
(17,802
)
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Depreciation and amortization
59,889
37,581
Stock-based compensation
370,186
371,111
Noncash lease expense
36,672
32,554
Allowance for credit losses on accounts
receivable
1,811
2,961
Deferred income taxes
—
604
Other
(8,312
)
3,694
Changes in operating assets and
liabilities:
Accounts receivable
(130,650
)
24,905
Prepaid expenses and other current and
non-current assets
(11,370
)
42,913
Accounts payable
125,661
(68,758
)
Accrued expenses and other current and
non-current liabilities
18,439
(18,778
)
Operating lease liabilities
(36,741
)
(35,731
)
Net cash provided by operating
activities
507,202
375,254
INVESTING ACTIVITIES:
Purchases of investments
(448,251
)
(379,206
)
Sales of investments
—
1,977
Maturities of investments
425,400
252,699
Purchases of property and equipment
(21,594
)
(36,394
)
Capitalized software development costs
(6,097
)
(4,833
)
Net cash used in investing activities
(50,542
)
(165,757
)
FINANCING ACTIVITIES:
Repurchases of Class A common stock
(426,684
)
—
Proceeds from exercise of stock
options
45,363
42,712
Proceeds from employee stock purchase
plan
21,316
25,547
Taxes paid related to net settlement of
restricted stock awards
(55,397
)
(37,254
)
Net cash provided by (used in) financing
activities
(415,402
)
31,005
Increase in cash and cash equivalents
41,258
240,502
Cash and cash equivalents—Beginning of
period
1,030,506
754,154
Cash and cash equivalents—End of
period
$
1,071,764
$
994,656
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
September 30,
Nine Months Ended
September 30,
2023
2022
2023
2022
Net income (loss)
$
39,352
$
15,869
$
81,617
$
(17,802
)
Add back (deduct):
Depreciation and amortization expense
20,530
12,957
59,889
37,581
Stock-based compensation expense
139,633
121,003
370,186
371,111
Interest income, net
(17,626
)
(1,741
)
(49,556
)
(1,321
)
Provision for income taxes
17,648
14,633
25,702
33,052
Adjusted EBITDA
$
199,537
$
162,721
$
487,838
$
422,621
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023
2022
2023
2022
GAAP net income (loss)
$
39,352
$
15,869
$
81,617
$
(17,802
)
Add back (deduct):
Stock-based compensation expense
139,633
121,003
370,186
371,111
Adjustment for income taxes
(11,742
)
(8,284
)
(30,566
)
(21,419
)
Non-GAAP net income
$
167,243
$
128,588
$
421,237
$
331,890
GAAP diluted earnings (loss) per share
$
0.08
$
0.03
$
0.16
$
(0.04
)
GAAP weighted-average shares
outstanding—diluted
501,880
500,300
500,348
486,168
Non-GAAP diluted earnings per share
$
0.33
$
0.26
$
0.84
$
0.66
Non-GAAP weighted-average shares used in
computing Non-GAAP earnings per share, diluted (1)
501,880
500,300
500,348
499,754
_________________________
(1)
Includes an additional 13.6 million of
dilutive securities for the nine months ended September 30, 2022,
which are not included in GAAP diluted weighted-average shares
outstanding due to the Company's net loss position for the nine
months ended September 30, 2022.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231109140420/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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