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, 2019.
“Thanks to our innovative platform and our commitment to
objectivity and transparency in digital advertising, we delivered
outstanding performance in the first quarter, again surpassing our
expectations. We continued to add new advertisers and agencies to
our platform and existing customers increased their spend. In Q1,
we continued to develop closer relationships with the biggest
brands in the world. Over half of the companies in the S&P 500
have run campaigns on our platform. We are executing well. For the
quarter, revenue was $121 million, up 41% from a year ago and
adjusted EBITDA increased to a Q1 record of $24.7 million,” said
Founder and CEO of The Trade Desk, Jeff Green. “Spend growth came
in channels key to our business such as Mobile, Video, Connected
TV, and Audio. Data spend again grew about 2x our business. We
continued to invest in technology infrastructure, product
development, and international expansion. These areas of investment
are critical to gaining additional market share.”
First Quarter 2019 Financial
Highlights:
The following table summarizes our consolidated financial
results for the quarters ended March 31, 2019 and 2018 ($ in
millions, except per share amounts):
Three Months Ended March 31,
2019 2018 GAAP Results Revenue $ 121.0
$ 85.7 Increase in revenue year over year 41 % 61 % Net Income $
10.2 $ 9.1 Diluted EPS $ 0.21 $ 0.20
Non-GAAP Results
Adjusted EBITDA $ 24.7 $ 18.9 Adjusted EBITDA Margin 20 % 22 %
Non-GAAP Net Income $ 23.1 $ 15.3 Non-GAAP Diluted EPS $ 0.49 $
0.34
First Quarter and Recent Business
Highlights Include:
- Continued Omnichannel Spend
Growth: Omnichannel solutions remain a strategic focus for The
Trade Desk, as the industry continues shifting toward transparency
and programmatic buying. Specific channel highlights include:
- Total Mobile (in-app, video, and web)
was 45% of gross spend for the quarter, highlighting the growing
scale and importance of this channel to advertisers
- Mobile Video spend grew about 60% from
Q12018 to Q12019
- Mobile In-App spend grew about 60% from
Q12018 to Q12019
- Newer Channels Delivering Strong
Spend Growth: Two of our newest and most promising channels,
Connected TV and audio, grew multiples faster than The Trade Desk’s
larger and more mature channels:
- Connected TV spend grew over 3x from
Q12018 to Q12019
- Audio spend grew over 270% from Q12018
to Q12019
- Strong Customer Retention:
Customer retention remained over 95% during the quarter, as it has
for the previous 21 quarters.
- Officially Launched a Programmatic
Ad Buying Platform in China: Programmatic offering allows
marketers ability to reach millions of connected consumers in China
by providing:
- The ability to use their first-party
data with The Trade Desk’s trusted platform.
- Partnerships with China’s premium media
companies, including Baidu Exchange Services, iQIYI, Tencent
Marketing Solution, and Youku.
- Integrations with leading data, brand
safety, and anti-fraud partners to ensure their campaigns reach
scale and performance.
- New Products and Features:
During the quarter, The Trade Desk released many new product
features and enhancements to its platform, including:
- Integration with On-Target Percentage
(OTP) metrics in the Connected TV environment on Campaign and Ad
Group dashboards, bringing valuable insights front and center when
optimizing to an OTP goal.
- Updates to Audience Predictor which
enhance lookalike modeling tools to find and target undiscovered
audiences based upon first-party data. Recent improvements include
improved sampling rates, faster audience creations, inclusion of
CPM segments, percent-of-media segments, and the ability to exclude
audiences.
- Industry Awards: The Trade Desk
won for Best Demand-Side Technology in the inaugural AdExchanger
Awards and was named Best Demand Side Platform at the ClickZ
Marketing Technology Awards 2019. The Trade Desk was also ranked #2
on the 2019 Best Workplaces in Technology (small and medium
companies) by Fortune.
Second Quarter and Revised Full Year
2019 Outlook:
Mr. Green added: “In 2019, we are off to a great start. The
biggest brands in the world continue to shift their advertising
spending to programmatic through our platform. As a result, we are
raising our 2019 revenue guidance to be at least $645 million. At
the same time, we are continuing to make large investments in areas
critical to our future. We now expect our adjusted EBITDA to be
$188.5 million for 2019. The secular tailwind of programmatic is
strong. Our focus is on gaining share and revenue growth, as this
will ultimately maximize profitability over the long-term.”
The Trade Desk is providing its financial targets for the second
quarter of 2019 and revised targets for its fiscal year 2019. The
Company’s financial targets are as follows:
Second Quarter 2019:
- Revenue of $154 million
- Adjusted EBITDA of $46 million
Full Year 2019
- Revenue of at least $645 million,
revised from $637 million
- Adjusted EBITDA of $188.5 million or
about 29% of revenue, revised from $182 million
Reconciliation of adjusted EBITDA guidance to the closest
corresponding U.S. GAAP measure 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 Consolidated Statements of Income
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 expense (income), net and provision for (benefit from)
income taxes. 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 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 Consolidated Statements of Income. 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 Financial Results Webcast and Conference Call
Details
- When: May 9, 2019 at 5:00 A.M.
Pacific Time (8:00 A.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 877-407-0782. For callers
outside the United States, please dial 1-201-689-8567. Participants
should reference the conference call ID “The Trade Desk Call” 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: 47139). Outside the United States,
please dial 1-919-882-2331 (replay code: 47139). The audio replay
will be available via telephone until May 16, 2019.
The Trade Desk, Inc. uses its Investor Relations website
(http://investors.thetradedesk.com/investor-overview), its Twitter
feed (@TheTradeDesk), LinkedIn page
(https://www.linkedin.com/company/the-trade-desk/), and Facebook
page (https://www.facebook.com/TheTradeDesk/), and 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 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. CONSOLIDATED STATEMENTS OF
INCOME (Amounts in thousands, except per share amounts)
(Unaudited) Three Months Ended
March 31, 2019 2018 Revenue $ 120,987 $ 85,668
Operating expenses: Platform operations 33,651 22,897 Sales and
marketing 22,737 16,030 Technology and development 25,312 17,701
General and administrative 33,617 19,110 Total
operating expenses 115,317 75,738 Income from
operations 5,670 9,930 Total other expense, net 333
700 Income before income taxes 5,337 9,230 Provision for (benefit
from) income taxes (4,814 ) 160 Net income $ 10,151 $
9,070 Earnings per share: Basic $ 0.23 $ 0.22 Diluted $ 0.21 $ 0.20
Weighted average shares outstanding: Basic 43,906
41,629 Diluted 47,314 44,543
STOCK-BASED COMPENSATION EXPENSE (Amounts in
thousands) (Unaudited) Three
Months Ended March 31, 2019 2018 Platform
operations $ 1,056 $ 796 Sales and marketing 3,227 1,965 Technology
and development 4,936 2,358 General and administrative 6,650
2,164 Total $ 15,869 $ 7,283
THE TRADE
DESK, INC. CONSOLIDATED BALANCE SHEETS (Amounts in
thousands) (Unaudited) As of
As of
March 31,2019
December 31,2018
ASSETS Current assets: Cash and cash equivalents $ 143,841 $
207,232 Short-term investments 74,101 — Accounts receivable, net
707,740 834,764 Prepaid expenses and other current assets
18,927 14,527 Total current assets 944,609 1,056,523
Property and equipment, net 36,120 33,046 Operating lease assets
73,508 — Deferred income taxes 8,460 8,460 Other assets,
non-current 19,680 19,843 Total assets $ 1,082,377 $
1,117,872
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities: Accounts payable $ 529,594 $ 669,147 Accrued
expenses and other current liabilities 39,218 44,844 Operating
lease liabilities 14,448 — Total current liabilities
583,260 713,991 Operating lease liabilities, non-current 65,168 —
Other liabilities, non-current 4,551 9,314 Total
liabilities 652,979 723,305 Stockholders'
equity: Preferred stock — — Common stock — — Additional paid-in
capital 295,127 270,447 Retained earnings 134,271
124,120 Total stockholders' equity 429,398 394,567
Total liabilities and stockholders' equity $ 1,082,377 $ 1,117,872
THE TRADE DESK, INC. CONSOLIDATED
STATEMENTS OF CASH FLOWS (Amounts in thousands)
(Unaudited) Three Months Ended March
31, 2019 2018 OPERATING ACTIVITIES: Net income $
10,151 $ 9,070
Adjustments to reconcile net income to net
cash
provided by operating activities:
Depreciation and amortization 4,456 2,251 Stock-based compensation
15,869 7,283 Noncash lease expense 4,421 — Other 603 359 Changes in
operating assets and liabilities: Accounts receivable 127,232
42,387 Prepaid expenses and other assets (6,580 ) (775 ) Accounts
payable (138,886 ) (49,698 ) Accrued expenses and other liabilities
(4,489 ) 930 Operating lease liabilities (3,066 ) —
Net cash provided by operating activities 9,711
11,807 INVESTING ACTIVITIES: Purchases of property and equipment
(6,085 ) (1,798 ) Capitalized software development costs (1,417 )
(858 ) Purchases of investments (73,950 ) — Net cash
used in investing activities (81,452 ) (2,656 )
FINANCING ACTIVITIES: Repayment on line of credit — (27,000 )
Payment of debt financing costs (6 ) — Proceeds from exercise of
stock options 9,502 1,212 Taxes paid related to net settlement of
restricted stock awards (1,146 ) (361 ) Net cash
provided by (used in) financing activities 8,350
(26,149 ) Decrease in cash and cash equivalents (63,391 ) (16,998 )
Cash and cash equivalents—Beginning of period 207,232
155,950 Cash and cash equivalents—End of period $ 143,841 $ 138,952
Non-GAAP Financial Metrics(Amounts in thousands, except
per share amounts)
The following tables show the Company’s GAAP financial metrics
reconciled to non-GAAP financial metrics included in this
release.
Three Months Ended March 31,
2019 2018 Net income $ 10,151 $ 9,070
Add back: Depreciation and amortization expense 4,456 2,251
Stock-based compensation expense 15,869 7,283 Interest expense
(income), net (997 ) 156 Provision for (benefit from) income taxes
(4,814 ) 160 Adjusted EBITDA $ 24,665 $ 18,920
Three Months Ended March 31,
2019 2018 GAAP net income $ 10,151 $ 9,070 Add
back (deduct): Stock-based compensation expense 15,869 7,283
Adjustment for income taxes (2,917 ) (1,026 )
Non-GAAP net income $ 23,103 $ 15,327 GAAP diluted EPS $
0.21 $ 0.20 Non-GAAP diluted EPS $ 0.49 $ 0.34 Weighted
average shares outstanding—diluted 47,314 44,543
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190509005366/en/
InvestorsChris TothVice President Investor Relations, The Trade
Deskir@thetradedesk.com310-334-9183
MediaIan ColleyVice President Public Relations, The Trade
Deskian.colley@thetradedesk.com914-434-3043
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