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“We again delivered outstanding performance in the third quarter. Revenue growth of 38% significantly outpaced worldwide programmatic advertising growth. The world’s leading brands and agencies are increasingly using our platform to apply data-driven strategies to drive precision and value across their campaigns,” said
Third Quarter 2019 Financial Highlights:
The following table summarizes our consolidated financial results for the periods ended
|
Three Months Ended |
|
Nine Months Ended |
|
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September 30, |
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September 30, |
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||||||||||
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2019 |
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2018 |
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2019 |
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2018 |
|
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GAAP Results |
|
|
|
|
|
|
|
|
|
|
|
|
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Revenue |
$ |
164.2 |
|
$ |
118.8 |
|
$ |
445.1 |
|
$ |
316.8 |
|
||
Increase in revenue year over year |
|
38 |
% |
|
50 |
% |
|
40 |
% |
|
54 |
% |
||
Net Income |
$ |
19.4 |
|
$ |
20.3 |
|
$ |
57.4 |
|
$ |
48.7 |
|
||
Diluted EPS |
$ |
0.40 |
|
$ |
0.44 |
|
$ |
1.20 |
|
$ |
1.07 |
|
||
|
|
|
|
|
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|
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|
|
|
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Non-GAAP Results |
|
|
|
|
|
|
|
|
|
|
|
|
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Adjusted EBITDA |
$ |
47.8 |
|
$ |
36.6 |
|
$ |
130.4 |
|
$ |
92.4 |
|
||
Adjusted EBITDA Margin |
|
29 |
% |
|
31 |
% |
|
29 |
% |
|
29 |
% |
||
Non-GAAP Net Income |
$ |
36.1 |
|
$ |
30.2 |
|
$ |
104.8 |
|
$ |
72.7 |
|
||
Non-GAAP Diluted EPS |
$ |
0.75 |
|
$ |
0.65 |
|
$ |
2.19 |
|
$ |
1.60 |
|
Third Quarter and Recent Business Highlights Include:
Fourth Quarter and Revised Full Year 2019 Outlook:
The
Fourth Quarter 2019:
Full Year 2019
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
Third Quarter Financial Results Webcast and Conference Call Details
The
About The
The
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. |
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CONSOLIDATED STATEMENTS OF INCOME |
|||||||||||||
(Amounts in thousands, except per share amounts) |
|||||||||||||
(Unaudited) |
|||||||||||||
|
|
|
|
|
|
|
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|
|
|
|||
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Three Months Ended |
Nine Months Ended |
|||||||||||
|
September 30, |
September 30, |
|||||||||||
|
2019 |
|
2018 |
2019 |
|
2018 |
|||||||
Revenue |
$ |
164,203 |
|
$ |
118,825 |
$ |
445,114 |
|
$ |
316,826 |
|||
Operating expenses (1): |
|
|
|
|
|
|
|
|
|
|
|||
Platform operations |
|
39,932 |
|
|
29,344 |
|
108,913 |
|
|
78,842 |
|||
Sales and marketing |
|
36,142 |
|
|
23,287 |
|
89,951 |
|
|
60,007 |
|||
Technology and development |
|
29,185 |
|
|
22,621 |
|
83,949 |
|
|
59,806 |
|||
General and administrative |
|
37,017 |
|
|
21,310 |
|
102,755 |
|
|
59,816 |
|||
Total operating expenses |
|
142,276 |
|
|
96,562 |
|
385,568 |
|
|
258,471 |
|||
Income from operations |
|
21,927 |
|
|
22,263 |
|
59,546 |
|
|
58,355 |
|||
Total other expense (income), net |
|
(1,892 |
) |
|
158 |
|
(2,979 |
) |
|
1,922 |
|||
Income before income taxes |
|
23,819 |
|
|
22,105 |
|
62,525 |
|
|
56,433 |
|||
Provision for income taxes |
|
4,397 |
|
|
1,813 |
|
5,152 |
|
|
7,728 |
|||
Net income |
$ |
19,422 |
|
$ |
20,292 |
$ |
57,373 |
|
$ |
48,705 |
|||
Earnings per share: |
|
|
|
|
|
|
|
|
|
|
|||
Basic |
$ |
0.43 |
|
$ |
0.47 |
$ |
1.29 |
|
$ |
1.15 |
|||
Diluted |
$ |
0.40 |
|
$ |
0.44 |
$ |
1.20 |
|
$ |
1.07 |
|||
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|||
Basic |
|
44,771 |
|
|
42,721 |
|
44,363 |
|
|
42,178 |
|||
Diluted |
|
48,037 |
|
|
46,576 |
|
47,728 |
|
|
45,460 |
|||
_______________________ |
|||||||||||||
(1) Includes stock-based compensation expense as follows: |
STOCK-BASED COMPENSATION EXPENSE |
|||||||||||||
(Amounts in thousands) |
|||||||||||||
(Unaudited) |
|||||||||||||
|
|||||||||||||
|
Three Months Ended |
Nine Months Ended |
|||||||||||
|
September 30, |
September 30, |
|||||||||||
|
2019 |
|
2018 |
|
2019 |
|
2018 |
||||||
Platform operations |
$ |
1,507 |
$ |
1,234 |
$ |
3,894 |
$ |
3,137 |
|||||
Sales and marketing |
|
5,036 |
|
3,033 |
|
13,094 |
|
7,757 |
|||||
Technology and development |
|
7,146 |
|
4,013 |
|
18,579 |
|
8,905 |
|||||
General and administrative |
|
5,753 |
|
3,137 |
|
20,801 |
|
8,159 |
|||||
Total |
$ |
19,442 |
$ |
11,417 |
$ |
56,368 |
$ |
27,958 |
THE TRADE DESK, INC. |
|||||||
CONSOLIDATED BALANCE SHEETS |
|||||||
(Amounts in thousands) |
|||||||
(Unaudited) |
|||||||
|
|
|
|
|
|||
|
As of |
|
As of |
||||
|
September 30, 2019 |
|
December 31, 2018 |
||||
ASSETS |
|
|
|
|
|||
Current assets: |
|
|
|
|
|||
Cash and cash equivalents |
$ |
173,446 |
$ |
207,232 |
|||
Short-term investments |
|
123,082 |
|
— |
|||
Accounts receivable, net |
|
835,958 |
|
834,764 |
|||
Prepaid expenses and other current assets |
|
26,641 |
|
14,527 |
|||
Total current assets |
|
1,159,127 |
|
1,056,523 |
|||
Property and equipment, net |
|
47,734 |
|
33,046 |
|||
Operating lease assets |
|
177,276 |
|
— |
|||
Deferred income taxes |
|
8,460 |
|
8,460 |
|||
Other assets, non-current |
|
22,442 |
|
19,843 |
|||
Total assets |
$ |
1,415,039 |
$ |
1,117,872 |
|||
|
|
|
|
|
|||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|||
Current liabilities: |
|
|
|
|
|||
Accounts payable |
$ |
647,547 |
$ |
669,147 |
|||
Accrued expenses and other current liabilities |
|
40,553 |
|
44,844 |
|||
Operating lease liabilities |
|
15,938 |
|
— |
|||
Total current liabilities |
|
704,038 |
|
713,991 |
|||
Operating lease liabilities, non-current |
|
167,668 |
|
— |
|||
Other liabilities, non-current |
|
7,941 |
|
9,314 |
|||
Total liabilities |
|
879,647 |
|
723,305 |
|||
|
|
|
|
|
|||
Stockholders' equity: |
|
|
|
|
|||
Preferred stock |
|
— |
|
— |
|||
Common stock |
|
— |
|
— |
|||
Additional paid-in capital |
|
353,899 |
|
270,447 |
|||
Retained earnings |
|
181,493 |
|
124,120 |
|||
Total stockholders' equity |
|
535,392 |
|
394,567 |
|||
Total liabilities and stockholders' equity |
$ |
1,415,039 |
$ |
1,117,872 |
THE TRADE DESK, INC. |
|
||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS |
|
||||||||
(Amounts in thousands) |
|
||||||||
(Unaudited) |
|
||||||||
|
|||||||||
|
Nine Months Ended September 30, |
|
|||||||
|
2019 |
|
2018 |
|
|||||
OPERATING ACTIVITIES: |
|
|
|
|
|
|
|||
Net income |
$ |
57,373 |
|
$ |
48,705 |
|
|||
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
|||
Depreciation and amortization |
|
15,246 |
|
|
8,107 |
|
|||
Stock-based compensation |
|
56,368 |
|
|
27,958 |
|
|||
Bad debt expense |
|
1,647 |
|
|
1,727 |
|
|||
Noncash lease expense |
|
15,394 |
|
|
— |
|
|||
Other |
|
(2,945 |
) |
|
2,396 |
|
|||
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|||
Accounts receivable |
|
(2,739 |
) |
|
(44,736 |
) |
|||
Prepaid expenses and other assets |
|
(19,024 |
) |
|
(10,597 |
) |
|||
Accounts payable |
|
(21,401 |
) |
|
(2,804 |
) |
|||
Accrued expenses and other liabilities |
|
(3,178 |
) |
|
7,789 |
|
|||
Operating lease liabilities |
|
(8,468 |
) |
|
— |
|
|||
Net cash provided by operating activities |
|
88,273 |
|
|
38,545 |
|
|||
INVESTING ACTIVITIES: |
|
|
|
|
|
|
|||
Purchases of property and equipment |
|
(21,659 |
) |
|
(10,383 |
) |
|||
Capitalized software development costs |
|
(3,849 |
) |
|
(4,340 |
) |
|||
Purchases of investments |
|
(178,179 |
) |
|
— |
|
|||
Maturities of investments |
|
55,819 |
|
|
— |
|
|||
Net cash used in investing activities |
|
(147,868 |
) |
|
(14,723 |
) |
|||
FINANCING ACTIVITIES: |
|
|
|
|
|
|
|||
Repayment on line of credit |
|
— |
|
|
(27,000 |
) |
|||
Payment of debt financing costs |
|
(6 |
) |
|
— |
|
|||
Proceeds from exercise of stock options |
|
21,911 |
|
|
7,165 |
|
|||
Proceeds from employee stock purchase plan |
|
8,648 |
|
|
7,014 |
|
|||
Taxes paid related to net settlement of restricted stock awards |
|
(4,744 |
) |
|
(602 |
) |
|||
Net cash provided by (used in) financing activities |
|
25,809 |
|
|
(13,423 |
) |
|||
(Decrease) increase in cash and cash equivalents |
|
(33,786 |
) |
|
10,399 |
|
|||
Cash and cash equivalents—Beginning of period |
|
207,232 |
|
|
155,950 |
|
|||
Cash and cash equivalents—End of period |
$ |
173,446 |
|
$ |
166,349 |
|
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 |
|
Nine Months Ended |
|
||||||||||
|
September 30, |
|
September 30, |
|
||||||||||
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
||||||
|
|
|
||||||||||||
Net income |
$ |
19,422 |
|
$ |
20,292 |
|
$ |
57,373 |
|
$ |
48,705 |
|
||
Add back: |
|
|
|
|
|
|
|
|
|
|
|
|
||
Depreciation and amortization expense |
|
5,969 |
|
|
3,277 |
|
|
15,246 |
|
|
8,107 |
|
||
Stock-based compensation expense |
|
19,442 |
|
|
11,417 |
|
|
56,368 |
|
|
27,958 |
|
||
Interest expense (income), net |
|
(1,480 |
) |
|
(237 |
) |
|
(3,763 |
) |
|
(113 |
) |
||
Provision for income taxes |
|
4,397 |
|
|
1,813 |
|
|
5,152 |
|
|
7,728 |
|
||
Adjusted EBITDA |
$ |
47,750 |
|
$ |
36,562 |
|
$ |
130,376 |
|
$ |
92,385 |
|
|
Three Months Ended |
|
Nine Months Ended |
|
||||||||||
|
September 30, |
|
September 30, |
|
||||||||||
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
||||||
GAAP net income |
$ |
19,422 |
|
$ |
20,292 |
|
$ |
57,373 |
|
$ |
48,705 |
|
||
Add back (deduct): |
|
|
|
|
|
|
|
|
|
|
|
|
||
Stock-based compensation expense |
|
19,442 |
|
|
11,417 |
|
|
56,368 |
|
|
27,958 |
|
||
Adjustment for income taxes |
|
(2,777 |
) |
|
(1,528 |
) |
|
(8,985 |
) |
|
(3,918 |
) |
||
Non-GAAP net income |
$ |
36,087 |
|
$ |
30,181 |
|
$ |
104,756 |
|
$ |
72,745 |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||
GAAP diluted EPS |
$ |
0.40 |
|
$ |
0.44 |
|
$ |
1.20 |
|
$ |
1.07 |
|
||
Non-GAAP diluted EPS |
$ |
0.75 |
|
$ |
0.65 |
|
$ |
2.19 |
|
$ |
1.60 |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Weighted average shares outstanding—diluted |
|
48,037 |
|
|
46,576 |
|
|
47,728 |
|
|
45,460 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20191107005862/en/
Source: The
Investors
Chris Toth
Vice President Investor Relations, The Trade Desk
ir@thetradedesk.com
310-334-9183
Media
Ian Colley
Vice President Public Relations, The Trade Desk
ian.colley@thetradedesk.com
914-434-3043