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 third quarter ended September 30, 2024.

“The Trade Desk delivered strong performance in the third quarter, with revenue of $628 million, accelerating growth to 27%. This performance underlines the value that advertisers are placing on precision and transparency as they work with us to maximize the impact of 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 2025, we have never been in a better position to capture greater share of the $1 trillion advertising TAM. 2024 has been a banner year for CTV. Many of the largest media companies are now working with us to help clients capture the full value of CTV advertising via programmatic. We are similarly excited about the momentum in retail media and the pace of adoption by advertisers who are taking advantage of our retail data marketplace. And the performance improvements that our clients are seeing with Kokai - our largest platform upgrade to date - showcase the value of audience-driven, AI-enabled innovation.”

Third Quarter 2024 Financial Highlights:

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

 

Three Months Ended

September 30,

 

Nine Months Ended

September 30,

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

GAAP Results

 

 

 

 

 

 

 

Revenue

$

628

 

 

$

493

 

 

$

1,704

 

 

$

1,340

 

Increase in revenue year over year

 

27

%

 

 

25

%

 

 

27

%

 

 

23

%

Net income

$

94

 

 

$

39

 

 

$

211

 

 

$

82

 

Net income margin

 

15

%

 

 

8

%

 

 

12

%

 

 

6

%

GAAP diluted earnings per share

$

0.19

 

 

$

0.08

 

 

$

0.42

 

 

$

0.16

 

 

 

 

 

 

 

 

 

Non-GAAP Results

 

 

 

 

 

 

 

Adjusted EBITDA

$

257

 

 

$

200

 

 

$

661

 

 

$

488

 

Adjusted EBITDA margin

 

41

%

 

 

40

%

 

 

39

%

 

 

36

%

Non-GAAP net income

$

207

 

 

$

167

 

 

$

536

 

 

$

421

 

Non-GAAP diluted earnings per share

$

0.41

 

 

$

0.33

 

 

$

1.07

 

 

$

0.84

 

Third Quarter and Recent Business Highlights:

• Strong Customer Retention: Customer retention remained over 95% during the third quarter, as it has for the past ten 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:
  • Spotify is extending its partnership with The Trade Desk, piloting integrations with OpenPath and UID2 through Spotify Ad Exchange.
  • Roku announced its adoption of UID2, allowing advertisers to implement more precise targeting and a secure means to facilitate data collaboration with Roku Media.
  • Reach, a UK news publisher of 130 media brands, is adopting EUID as part of their commitment to protecting journalism with a best-in-class advertising experience for readers.
  • Global media company Motorsport Network announced adoption of EUID to provide relevant advertising while prioritizing consumer privacy and transparency for its 60 million authenticated users.
  • Cint announced integration of UID2 to provide robust, omnichannel brand lift measurement.
• 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 repurchased $54 million of its Class A common stock in the third quarter of 2024. As of September 30, 2024, the Company had $521 million available and authorized for repurchases.

Financial Guidance:

Fourth Quarter 2024 outlook summary:

• Revenue at least $756 million
• Adjusted EBITDA of approximately $363 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 included in the calculation of 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, Adjusted EBITDA margin, Non-GAAP net income and Non-GAAP diluted earnings per share (“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 depreciation and amortization; stock-based compensation; interest income, net; and provision for income taxes. Adjusted EBITDA margin is Adjusted EBITDA divided by revenue, and Adjusted EBITDA margin’s closest corresponding U.S. GAAP measure is net income margin, which is GAAP net income divided by revenue. 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 2024 Financial Results Webcast and Conference Call Details

• When: November 7, 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 “349188” 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: 51455). Outside the United States, please dial 1-919-882-2331 (replay code: 51455). The audio replay will be available via telephone until November 14, 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. 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,

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

Revenue

$

628,016

 

 

$

493,266

 

 

$

1,703,819

 

 

$

1,340,323

 

Operating expenses (1):

 

 

 

 

 

 

 

Platform operations

 

122,656

 

 

 

93,382

 

 

 

336,745

 

 

 

264,903

 

Sales and marketing

 

140,296

 

 

 

112,466

 

 

 

395,888

 

 

 

321,177

 

Technology and development

 

117,705

 

 

 

117,772

 

 

 

335,426

 

 

 

309,790

 

General and administrative

 

138,878

 

 

 

131,969

 

 

 

403,902

 

 

 

388,411

 

Total operating expenses

 

519,535

 

 

 

455,589

 

 

 

1,471,961

 

 

 

1,284,281

 

Income from operations

 

108,481

 

 

 

37,677

 

 

 

231,858

 

 

 

56,042

 

Total other income, net

 

(18,697

)

 

 

(19,323

)

 

 

(53,845

)

 

 

(51,277

)

Income before income taxes

 

127,178

 

 

 

57,000

 

 

 

285,703

 

 

 

107,319

 

Provision for income taxes

 

33,020

 

 

 

17,648

 

 

 

74,856

 

 

 

25,702

 

Net income

$

94,158

 

 

$

39,352

 

 

$

210,847

 

 

$

81,617

 

Earnings per share:

 

 

 

 

 

 

 

Basic

$

0.19

 

 

$

0.08

 

 

$

0.43

 

 

$

0.17

 

Diluted

$

0.19

 

 

$

0.08

 

 

$

0.42

 

 

$

0.16

 

Weighted-average shares outstanding:

 

 

 

 

 

 

 

Basic

 

491,614

 

 

 

489,447

 

 

 

489,845

 

 

 

489,195

 

Diluted

 

502,563

 

 

 

501,880

 

 

 

500,273

 

 

 

500,348

 

___________________________

(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,

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

 

 

 

 

 

 

 

Platform operations

$

7,617

 

$

5,729

 

$

20,444

 

$

14,642

Sales and marketing

 

25,294

 

 

21,116

 

 

70,654

 

 

54,039

Technology and development

 

36,958

 

 

43,727

 

 

97,441

 

 

91,283

General and administrative (1)

 

58,641

 

 

69,061

 

 

176,931

 

 

210,222

Total

$

128,510

 

$

139,633

 

$

365,470

 

$

370,186

___________________________

(1) Includes stock-based compensation expense related to a long-term CEO performance grant of $30 million and $48 million for the three months ended September 30, 2024 and 2023, respectively, as well as $102 million and $156 million for the nine months ended September 30, 2024 and 2023, respectively.

THE TRADE DESK, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in thousands)

(Unaudited)

 

 

As of September 30, 2024

 

As of December 31, 2023

ASSETS

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

1,221,475

 

$

895,129

Short-term investments, net

 

510,290

 

 

485,159

Accounts receivable, net

 

2,989,387

 

 

2,870,313

Prepaid expenses and other current assets

 

117,221

 

 

63,353

Total current assets

 

4,838,373

 

 

4,313,954

Property and equipment, net

 

197,973

 

 

161,422

Operating lease assets

 

242,431

 

 

197,732

Deferred income taxes

 

154,849

 

 

154,849

Other assets, non-current

 

71,699

 

 

60,730

Total assets

$

5,505,325

 

$

4,888,687

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

2,409,773

 

$

2,317,318

Accrued expenses and other current liabilities

 

142,459

 

 

137,996

Operating lease liabilities

 

62,858

 

 

55,524

Total current liabilities

 

2,615,090

 

 

2,510,838

Operating lease liabilities, non-current

 

230,355

 

 

180,369

Other liabilities, non-current

 

34,130

 

 

33,261

Total liabilities

 

2,879,575

 

 

2,724,468

 

 

 

 

Stockholders' equity:

 

 

 

Preferred stock

 

—

 

 

—

Common stock

 

—

 

 

—

Additional paid-in capital

 

2,397,100

 

 

1,967,265

Retained earnings

 

228,650

 

 

196,954

Total stockholders' equity

 

2,625,750

 

 

2,164,219

Total liabilities and stockholders' equity

$

5,505,325

 

$

4,888,687

THE TRADE DESK, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands)

(Unaudited)

 

 

Nine Months Ended September 30,

 

 

2024

 

 

 

2023

 

OPERATING ACTIVITIES:

 

 

 

Net income

$

210,847

 

 

$

81,617

 

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

 

 

 

Depreciation and amortization

 

63,378

 

 

 

59,889

 

Stock-based compensation

 

365,470

 

 

 

370,186

 

Noncash lease expense

 

41,522

 

 

 

36,672

 

Provision for expected credit losses on accounts receivable

 

837

 

 

 

1,811

 

Other

 

(11,901

)

 

 

(8,312

)

Changes in operating assets and liabilities:

 

 

 

Accounts receivable

 

(125,711

)

 

 

(130,650

)

Prepaid expenses and other current and non-current assets

 

(68,490

)

 

 

(11,370

)

Accounts payable

 

87,175

 

 

 

125,661

 

Accrued expenses and other current and non-current liabilities

 

8,846

 

 

 

18,439

 

Operating lease liabilities

 

(31,918

)

 

 

(36,741

)

Net cash provided by operating activities

 

540,055

 

 

 

507,202

 

INVESTING ACTIVITIES:

 

 

 

Purchases of investments

 

(486,596

)

 

 

(448,251

)

Maturities of investments

 

475,022

 

 

 

425,400

 

Purchases of property and equipment

 

(78,048

)

 

 

(21,594

)

Capitalized software development costs

 

(6,708

)

 

 

(6,097

)

Net cash used in investing activities

 

(96,330

)

 

 

(50,542

)

FINANCING ACTIVITIES:

 

 

 

Repurchases of Class A common stock

 

(177,428

)

 

 

(426,684

)

Proceeds from exercise of stock options

 

127,690

 

 

 

45,363

 

Proceeds from employee stock purchase plan

 

30,122

 

 

 

21,316

 

Taxes paid related to net settlement of restricted stock awards

 

(97,763

)

 

 

(55,397

)

Net cash used in financing activities

 

(117,379

)

 

 

(415,402

)

Increase in cash and cash equivalents

 

326,346

 

 

 

41,258

 

Cash and cash equivalents—Beginning of period

 

895,129

 

 

 

1,030,506

 

Cash and cash equivalents—End of period

$

1,221,475

 

 

$

1,071,764

 

Non-GAAP Financial Metrics

(Amounts in thousands, except per share amounts)

(Unaudited)

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,

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

 

 

 

 

 

 

 

 

Net income

$

94,158

 

 

$

39,352

 

 

$

210,847

 

 

$

81,617

 

Add back (deduct):

 

 

 

 

 

 

 

Depreciation and amortization expense

 

20,754

 

 

 

20,530

 

 

 

63,378

 

 

 

59,889

 

Stock-based compensation expense

 

128,510

 

 

 

139,633

 

 

 

365,470

 

 

 

370,186

 

Interest income, net

 

(19,408

)

 

 

(17,626

)

 

 

(53,886

)

 

 

(49,556

)

Provision for income taxes

 

33,020

 

 

 

17,648

 

 

 

74,856

 

 

 

25,702

 

Adjusted EBITDA

$

257,034

 

 

$

199,537

 

 

$

660,665

 

 

$

487,838

 

 

 

 

 

 

 

 

 

 

Three Months Ended

September 30,

 

Nine Months Ended

September 30,

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

GAAP net income

$

94,158

 

 

$

39,352

 

 

$

210,847

 

 

$

81,617

 

Add back (deduct):

 

 

 

 

 

 

 

Stock-based compensation expense

 

128,510

 

 

 

139,633

 

 

 

365,470

 

 

 

370,186

 

Adjustment for income taxes

 

(15,441

)

 

 

(11,742

)

 

 

(40,739

)

 

 

(30,566

)

Non-GAAP net income

$

207,227

 

 

$

167,243

 

 

$

535,578

 

 

$

421,237

 

 

 

 

 

 

 

 

 

GAAP diluted earnings per share

$

0.19

 

 

$

0.08

 

 

$

0.42

 

 

$

0.16

 

 

 

 

 

 

 

 

 

GAAP weighted-average shares outstanding—diluted

 

502,563

 

 

 

501,880

 

 

 

500,273

 

 

 

500,348

 

 

 

 

 

 

 

 

 

Non-GAAP diluted earnings per share

$

0.41

 

 

$

0.33

 

 

$

1.07

 

 

$

0.84

 

 

 

 

 

 

 

 

 

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

 

502,563

 

 

 

501,880

 

 

 

500,273

 

 

 

500,348

 

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20241107931247/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