TTD The Trade Desk Inc

The Trade Desk, Inc. (“The Trade Desk,” the “Company” or “we”) (NASDAQ: TTD), a provider of a global technology platform for buyers of advertising, today announced financial results for its second quarter ended June 30, 2024.

“Q2 was another strong quarter for The Trade Desk, with revenue of $585 million, representing 26% year-over-year growth,” said Jeff Green, Co-founder and CEO of The Trade Desk. “We’ve made significant strides in CTV, retail media and identity, empowering the world’s largest brands to buy premium media on the open internet with unprecedented agility and precision. As Kokai ramps, we’re intuitively surfacing value for advertisers, integrating data into every decision, advancing the full power of AI as a co-pilot, and enabling advertisers to maximize the potential of their first party data. With ongoing innovations in Kokai, the widespread adoption of UID2, and the expanding use of retail data, we will continue to deliver exceptional value to advertisers and grow our leadership in key high growth markets such as CTV.”

Second Quarter 2024 Financial Highlights:

The following table summarizes our consolidated financial results for the three and six months ended June 30, 2024 and 2023 ($ in millions, except per share amounts):

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2024

 

2023

 

2024

 

2023

GAAP Results

 

 

 

 

 

 

 

Revenue

$

585

 

 

$

464

 

 

$

1,076

 

 

$

847

 

Increase in revenue year over year

 

26

%

 

 

23

%

 

 

27

%

 

 

22

%

Net income

$

85

 

 

$

33

 

 

$

117

 

 

$

42

 

GAAP diluted earnings per share

$

0.17

 

 

$

0.07

 

 

$

0.23

 

 

$

0.08

 

 

 

 

 

 

 

 

 

Non-GAAP Results

 

 

 

 

 

 

 

Adjusted EBITDA

$

242

 

 

$

180

 

 

$

404

 

 

$

288

 

Adjusted EBITDA margin

 

41

%

 

 

39

%

 

 

38

%

 

 

34

%

Non-GAAP net income

$

197

 

 

$

139

 

 

$

328

 

 

$

254

 

Non-GAAP diluted earnings per share

$

0.39

 

 

$

0.28

 

 

$

0.66

 

 

$

0.51

 

Second Quarter and Recent Business Highlights:

• Strong Customer Retention: Customer retention remained over 95% during the second quarter, as it has for the past ten consecutive years.
• Connected TV (CTV): The Trade Desk offers the largest CTV inventory marketplace in the industry, giving advertisers unmatched access to premium content across major networks and ad-supported streaming services around the world. Because we do not compete in content or supply, we have built lasting relationships with premium publishers to help brands confidently engage their audiences and drive measurable results. Recent CTV updates include:
  • Netflix announced it will expand buying capabilities to include The Trade Desk as one of its main programmatic partners for advertisers.
  • FOX announced expanded partnership with The Trade Desk through integration of UID2 and OpenPath across FOX brands and the AdRise technology platform.
  • E.W. Scripps is streamlining its programmatic ad buying process for advertisers through the adoption of OpenPass and UID2, making it the first CTV publisher to adopt OpenPass.
  • At Forward ‘24 in Canada, CBC announced its Olympics inventory will be available programmatically for the first time ever via The Trade Desk.
• 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:
  • Roku announced its adoption of UID2, allowing advertisers to implement more precise targeting and a secure means to facilitate data collaboration with Roku Media.
  • SiriusXM Media announced Pandora Media as the first audio publisher to adopt UID2.
  • LG Ad Solutions announced it is integrating UID2 to enable advertisers to leverage their first-party data across LG’s extensive audience network in a privacy-conscious manner.
  • TF1, M6, and Media Figaro, three of the leading broadcasters and publishers in France, announced their adoption of EUID to help their advertisers run effective campaigns with improved targeting capabilities.
• Industry Recognition (2024):
  • Institutional Investor Awards - Most Honored Company, Best CEO, Best Company Board, Best IR Program, Best IR Professional, Best IR Team, Best Analyst Day
  • U.S. News & World Report Best Company to Work For
  • Business Insider Rising Stars of Adtech
  • AdExchanger Top Women in Media & Ad Tech
  • MM+M 40 under 40
  • Retail TouchPoints 40 under 40
• Share Repurchases: The Company did not repurchase any shares of its Class A common stock in the second quarter of 2024. As of June 30, 2024, the Company had $575 million available and authorized for repurchases.

Financial Guidance:

Third Quarter 2024 outlook summary:

• Revenue at least $618 million
• Adjusted EBITDA of approximately $248 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 this non-GAAP measure; 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.

Second Quarter 2024 Financial Results Webcast and Conference Call Details

• When: August 8, 2024 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 “250454” 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: 50885). Outside the United States, please dial 1-919-882-2331 (replay code: 50885). The audio replay will be available via telephone until August 15, 2024.

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/) and Jeff Green’s 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 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 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 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,

 

2024

 

2023

 

2024

 

2023

Revenue

$

584,550

 

 

$

464,254

 

 

$

1,075,803

 

 

$

847,057

 

Operating expenses (1):

 

 

 

 

 

 

 

Platform operations

 

110,459

 

 

 

86,654

 

 

 

214,089

 

 

 

171,521

 

Sales and marketing

 

133,867

 

 

 

111,489

 

 

 

255,592

 

 

 

208,711

 

Technology and development

 

110,035

 

 

 

98,308

 

 

 

217,721

 

 

 

192,018

 

General and administrative

 

135,469

 

 

 

126,130

 

 

 

265,024

 

 

 

256,442

 

Total operating expenses

 

489,830

 

 

 

422,581

 

 

 

952,426

 

 

 

828,692

 

Income from operations

 

94,720

 

 

 

41,673

 

 

 

123,377

 

 

 

18,365

 

Total other income, net

 

(17,772

)

 

 

(18,254

)

 

 

(35,148

)

 

 

(31,954

)

Income before income taxes

 

112,492

 

 

 

59,927

 

 

 

158,525

 

 

 

50,319

 

Provision for income taxes

 

27,463

 

 

 

26,988

 

 

 

41,836

 

 

 

8,054

 

Net income

$

85,029

 

 

$

32,939

 

 

$

116,689

 

 

$

42,265

 

Earnings per share:

 

 

 

 

 

 

 

Basic

$

0.17

 

 

$

0.07

 

 

$

0.24

 

 

$

0.09

 

Diluted

$

0.17

 

 

$

0.07

 

 

$

0.23

 

 

$

0.08

 

Weighted-average shares outstanding:

 

 

 

 

 

 

 

Basic

 

489,353

 

 

 

488,431

 

 

 

488,952

 

 

 

489,068

 

Diluted

 

500,040

 

 

 

499,349

 

 

 

499,117

 

 

 

499,570

 

___________________________

(1) Includes stock-based compensation expense as follows:

THE TRADE DESK, INC.

STOCK-BASED COMPENSATION EXPENSE

(Amounts in thousands)

(Unaudited)

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

 

 

 

 

 

 

 

 

Platform operations

$

7,272

 

 

$

4,967

 

 

$

12,827

 

 

$

8,913

 

Sales and marketing

 

25,068

 

 

18,800

 

 

45,360

 

 

32,923

Technology and development

 

32,509

 

 

 

26,689

 

 

 

60,483

 

 

 

47,556

 

General and administrative (1)

 

61,491

 

 

 

66,627

 

 

 

118,290

 

 

 

141,161

 

Total

$

126,340

 

 

$

117,083

 

 

$

236,960

 

 

$

230,553

 

___________________________

(1) Includes stock-based compensation expense related to a long-term CEO performance grant of $36 million and $48 million for the three months ended June 30, 2024 and 2023, respectively, as well as $71 million and $108 million for the six months ended June 30, 2024 and 2023, respectively.

THE TRADE DESK, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in thousands)

(Unaudited)

 

 

As of June 30, 2024

 

As of December 31, 2023

ASSETS

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

1,009,363

 

$

895,129

Short-term investments, net

 

497,168

 

 

485,159

Accounts receivable, net

 

2,905,533

 

 

2,870,313

Prepaid expenses and other current assets

 

110,776

 

 

63,353

Total current assets

 

4,522,840

 

 

4,313,954

Property and equipment, net

 

191,912

 

 

161,422

Operating lease assets

 

229,411

 

 

197,732

Deferred income taxes

 

154,849

 

 

154,849

Other assets, non-current

 

60,910

 

 

60,730

Total assets

$

5,159,922

 

$

4,888,687

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

2,336,589

 

$

2,317,318

Accrued expenses and other current liabilities

 

120,218

 

 

137,996

Operating lease liabilities

 

61,579

 

 

55,524

Total current liabilities

 

2,518,386

 

 

2,510,838

Operating lease liabilities, non-current

 

202,769

 

 

180,369

Other liabilities, non-current

 

33,361

 

 

33,261

Total liabilities

 

2,754,516

 

 

2,724,468

 

 

 

 

Stockholders' equity:

 

 

 

Preferred stock

 

—

 

 

—

Common stock

 

—

 

 

—

Additional paid-in capital

 

2,217,043

 

 

1,967,265

Retained earnings

 

188,363

 

 

196,954

Total stockholders' equity

 

2,405,406

 

 

2,164,219

Total liabilities and stockholders' equity

$

5,159,922

 

$

4,888,687

THE TRADE DESK, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands)

(Unaudited)

 

 

Six Months Ended June 30,

 

2024

 

2023

OPERATING ACTIVITIES:

 

 

 

Net income

$

116,689

 

 

$

42,265

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

Depreciation and amortization

 

42,624

 

 

 

39,359

 

Stock-based compensation

 

236,960

 

 

 

230,553

 

Noncash lease expense

 

26,460

 

 

 

24,325

 

Provision for expected credit losses on accounts receivable

 

133

 

 

 

318

 

Other

 

(4,117

)

 

 

(8,423

)

Changes in operating assets and liabilities:

 

 

 

Accounts receivable

 

(49,321

)

 

 

(35,368

)

Prepaid expenses and other current and non-current assets

 

(52,064

)

 

 

(3,659

)

Accounts payable

 

(13,247

)

 

 

50,995

 

Accrued expenses and other current and non-current liabilities

 

(9,989

)

 

 

399

 

Operating lease liabilities

 

(27,397

)

 

 

(25,102

)

Net cash provided by operating activities

 

266,731

 

 

 

315,662

 

INVESTING ACTIVITIES:

 

 

 

Purchases of investments

 

(317,969

)

 

 

(316,307

)

Maturities of investments

 

314,598

 

 

 

274,401

 

Purchases of property and equipment

 

(29,339

)

 

 

(16,556

)

Capitalized software development costs

 

(4,424

)

 

 

(3,415

)

Net cash used in investing activities

 

(37,134

)

 

 

(61,877

)

FINANCING ACTIVITIES:

 

 

 

Repurchases of Class A common stock

 

(125,280

)

 

 

(336,494

)

Proceeds from exercise of stock options

 

38,164

 

 

 

27,772

 

Proceeds from employee stock purchase plan

 

30,122

 

 

 

21,316

 

Taxes paid related to net settlement of restricted stock awards

 

(58,369

)

 

 

(31,054

)

Net cash used in financing activities

 

(115,363

)

 

 

(318,460

)

Increase (decrease) in cash and cash equivalents

 

114,234

 

 

 

(64,675

)

Cash and cash equivalents—Beginning of period

 

895,129

 

 

 

1,030,506

 

Cash and cash equivalents—End of period

$

1,009,363

 

 

$

965,831

 

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,

 

2024

 

2023

 

2024

 

2023

 

 

 

 

 

 

 

 

Net income

$

85,029

 

 

$

32,939

 

 

$

116,689

 

 

$

42,265

 

Add back (deduct):

 

 

 

 

 

 

 

Depreciation and amortization expense

 

20,882

 

 

 

20,066

 

 

 

42,624

 

 

 

39,359

 

Stock-based compensation expense

 

126,340

 

 

 

117,083

 

 

 

236,960

 

 

 

230,553

 

Interest income, net

 

(17,817

)

 

 

(17,507

)

 

 

(34,478

)

 

 

(31,930

)

Provision for income taxes

 

27,463

 

 

 

26,988

 

 

 

41,836

 

 

 

8,054

 

Adjusted EBITDA

$

241,897

 

 

$

179,569

 

 

$

403,631

 

 

$

288,301

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2024

 

2023

 

2024

 

2023

GAAP net income

$

85,029

 

 

$

32,939

 

 

$

116,689

 

 

$

42,265

 

Add back (deduct):

 

 

 

 

 

 

 

Stock-based compensation expense

 

126,340

 

 

 

117,083

 

 

 

236,960

 

 

 

230,553

 

Adjustment for income taxes

 

(13,886

)

 

 

(10,525

)

 

 

(25,298

)

 

 

(18,824

)

Non-GAAP net income

$

197,483

 

 

$

139,497

 

 

$

328,351

 

 

$

253,994

 

 

 

 

 

 

 

 

 

GAAP diluted earnings per share

$

0.17

 

 

$

0.07

 

 

$

0.23

 

 

$

0.08

 

 

 

 

 

 

 

 

 

GAAP weighted-average shares outstanding—diluted

 

500,040

 

 

 

499,349

 

 

 

499,117

 

 

 

499,570

 

 

 

 

 

 

 

 

 

Non-GAAP diluted earnings per share

$

0.39

 

 

$

0.28

 

 

$

0.66

 

 

$

0.51

 

 

 

 

 

 

 

 

 

Non-GAAP weighted-average shares used in computing Non-GAAP earnings per share, diluted

 

500,040

 

 

 

499,349

 

 

 

499,117

 

 

 

499,570

 

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240808229961/en/

Investors Jake Graves Senior Manager, Investor Relations The Trade Desk ir@thetradedesk.com

Media Melinda Zurich VP, Communications The Trade Desk melinda.zurich@thetradedesk.com