LOS ANGELES--(BUSINESS WIRE)--Nov. 5, 2020-- The Trade Desk, Inc. (NASDAQ: TTD), a global technology company that empowers buyers of advertising, today announced financial results for its third quarter ended September 30, 2020.

“So far in 2020 we’ve seen several years of advertising disruption and innovation compressed into a few months. As a result, advertisers have become more deliberate and data-driven with every advertising dollar. That helped us deliver record quarterly revenue of $216 million and adjusted EBITDA of $77 million.” said Co-Founder and CEO of The Trade Desk, Jeff Green. “This is the result of our long-term strategic investments to build a compelling Open Internet alternative for advertisers. As advertisers come under pressure to prove the ROI of their campaigns, to take advantage of the mass consumer shift to streaming TV, and to consider alternatives to user-generated content, our investments in these areas are paying off. Whether it’s our focus on measurement capabilities, CTV inventory or the future of identity, advertisers can count on us as the industry’s most innovative and complete demand side platform.”

Third Quarter 2020 Financial Highlights:

The following table summarizes our consolidated financial results for the quarters ended September 30, 2020 and 2019 ($ in millions, except per share amounts):

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

GAAP Results

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

216.1

 

 

$

164.2

 

 

$

516.1

 

 

$

445.1

 

Increase (decrease) in revenue year over year

 

 

32

%

 

 

38

%

 

 

16

%

 

 

40

%

Net Income

 

$

41.2

 

 

$

19.4

 

 

$

90.4

 

 

$

57.4

 

Diluted EPS

 

$

0.84

 

 

$

0.40

 

 

$

1.86

 

 

$

1.20

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP Results

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

 

$

77.2

 

 

$

47.8

 

 

$

130.7

 

 

$

130.4

 

Adjusted EBITDA Margin

 

 

36

%

 

 

29

%

 

 

25

%

 

 

29

%

Non-GAAP Net Income

 

$

62.7

 

 

$

36.1

 

 

$

150.8

 

 

$

104.8

 

Non-GAAP Diluted EPS

 

$

1.27

 

 

$

0.75

 

 

$

3.10

 

 

$

2.19

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Third 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. Channel highlights from Q3 include:
    • Connected TV grew over 100% from Q3 2019 to Q3 2020
    • Mobile Video spend grew about 70% from Q3 2019 to Q3 2020
    • Audio spend grew about 70% from Q3 2019 to Q3 2020
  • Strong Customer Retention: Customer retention remained over 95% during the quarter, as it has for the previous 5 years.
  • Building Industry-Wide Collaboration and Support for Unified ID 2.0: The Trade Desk is building support for Unified ID 2.0, a new industry-wide approach to identity that preserves the value of relevant advertising, while putting user control and privacy at the forefront. The ID is an upgrade and alternative to third-party cookies. Recent partnerships include:
    • Nielsen Holdings, a global measurement and data analytics company
    • Criteo S.A., a global technology company that powers world marketers
    • LiveRamp Holdings, the leading data connectivity platform

  • Industry Awards: The Trade Desk was named a 2020 Best Medium WorkplaceTM in the U.K. and a 2020 Best Workplace in Hong KongTM by Great Places to Work®. The Trade Desk recently won for the Best Overall Technology for Programmatic Trading at The Drum Digital Advertising Awards (US) and was a Gartner Peer Insights 2020 Customers’ Choice for Ad Tech. The Trade Desk was also named a Best Workplace in New YorkTM by Great Place to Work™ and Fortune for the third year in a row.

Impact of COVID-19 on our Outlook:

Our business has been impacted by the COVID-19 pandemic that has significantly impacted advertiser demand. Like many companies that are ad-funded, we are facing a period of higher uncertainty in our business outlook. We expect our business performance could be impacted by issues beyond our control, such as changing economic conditions or shelter-in-place orders that may or may not occur. Assuming that the economy continues to recover and we do not have any major COVID-19 related setbacks that may cause economic conditions to deteriorate, we estimate Q4 revenue to range between $287 million and $291 million. Under this assumption, we estimate adjusted EBITDA to be at least $115 million in Q4.

Fourth Quarter 2020 outlook summary:

  • Revenue range between $287 million and $291 million
  • Adjusted EBITDA of at least $115 million

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.

Third Quarter Financial Results Webcast and Conference Call Details

  • When: November 5, 2020 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 with passcode: To access the call via telephone in the United States, please dial 800-459-5346. For callers outside the United States, please dial 1-203-518-9544. Participants should reference “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: 38371). Outside the United States, please dial 1-919-882-2331 (replay code: 38371). The audio replay will be available via telephone until November 12, 2020.

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 relatively limited operating history and the impact of COVID-19 on the Company and its customers and partners, 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

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Revenue

 

$

216,113

 

 

$

164,203

 

 

$

516,128

 

 

$

445,114

 

Operating expenses (1):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Platform operations

 

 

44,826

 

 

 

39,932

 

 

 

127,167

 

 

 

108,913

 

Sales and marketing

 

 

44,637

 

 

 

36,142

 

 

 

116,002

 

 

 

89,951

 

Technology and development

 

 

41,079

 

 

 

29,185

 

 

 

117,931

 

 

 

83,949

 

General and administrative

 

 

42,789

 

 

 

37,017

 

 

 

117,252

 

 

 

102,755

 

Total operating expenses

 

 

173,331

 

 

 

142,276

 

 

 

478,352

 

 

 

385,568

 

Income from operations

 

 

42,782

 

 

 

21,927

 

 

 

37,776

 

 

 

59,546

 

Total other expense (income), net

 

 

223

 

 

 

(1,892

)

 

 

834

 

 

 

(2,979

)

Income before income taxes

 

 

42,559

 

 

 

23,819

 

 

 

36,942

 

 

 

62,525

 

Provision for (benefit from) income taxes

 

 

1,312

 

 

 

4,397

 

 

 

(53,473

)

 

 

5,152

 

Net income

 

$

41,247

 

 

$

19,422

 

 

$

90,415

 

 

$

57,373

 

Earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.89

 

 

$

0.43

 

 

$

1.96

 

 

$

1.29

 

Diluted

 

$

0.84

 

 

$

0.40

 

 

$

1.86

 

 

$

1.20

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

46,582

 

 

 

44,771

 

 

 

46,075

 

 

 

44,363

 

Diluted

 

 

49,220

 

 

 

48,037

 

 

 

48,731

 

 

 

47,728

 

_______________________

 

 

 

 

 

 

 

 

 

 

 

 

 

(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,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Platform operations

 

$

1,639

 

 

$

1,507

 

 

$

5,459

 

 

$

3,894

 

Sales and marketing

 

 

6,916

 

 

 

5,036

 

 

 

18,549

 

 

 

13,094

 

Technology and development

 

 

7,911

 

 

 

7,146

 

 

 

24,345

 

 

 

18,579

 

General and administrative

 

 

10,386

 

 

 

5,753

 

 

 

25,398

 

 

 

20,801

 

Total

 

$

26,852

 

 

$

19,442

 

 

$

73,751

 

 

$

56,368

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

THE TRADE DESK, INC.

 

CONSOLIDATED BALANCE SHEETS

 

(Amounts in thousands)

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

As of

 

 

As of

 

 

 

September 30,

2020

 

 

December 31,

2019

 

ASSETS

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

434,371

 

 

$

130,876

 

Short-term investments, net

 

 

122,909

 

 

 

124,112

 

Accounts receivable, net

 

 

1,139,860

 

 

 

1,166,376

 

Prepaid expenses and other current assets

 

 

58,847

 

 

 

27,857

 

Total current assets

 

 

1,755,987

 

 

 

1,449,221

 

Property and equipment, net

 

 

111,862

 

 

 

64,012

 

Operating lease assets

 

 

202,172

 

 

 

173,449

 

Deferred income taxes

 

 

39,928

 

 

 

18,950

 

Other assets, non-current

 

 

28,479

 

 

 

23,129

 

Total assets

 

$

2,138,428

 

 

$

1,728,761

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

919,694

 

 

$

868,618

 

Accrued expenses and other current liabilities

 

 

57,724

 

 

 

47,178

 

Operating lease liabilities

 

 

34,735

 

 

 

14,577

 

Total current liabilities

 

 

1,012,153

 

 

 

930,373

 

Operating lease liabilities, non-current

 

 

205,408

 

 

 

174,873

 

Debt, net

 

 

72,000

 

 

 

—

 

Other liabilities, non-current

 

 

16,240

 

 

 

10,998

 

Total liabilities

 

 

1,305,801

 

 

 

1,116,244

 

 

 

 

 

 

 

 

 

 

Stockholders' equity:

 

 

 

 

 

 

 

 

Preferred stock

 

 

—

 

 

 

—

 

Common stock

 

 

—

 

 

 

—

 

Additional paid-in capital

 

 

510,017

 

 

 

380,079

 

Accumulated other comprehensive income

 

 

145

 

 

 

—

 

Retained earnings

 

 

322,465

 

 

 

232,438

 

Total stockholders' equity

 

 

832,627

 

 

 

612,517

 

Total liabilities and stockholders' equity

 

$

2,138,428

 

 

$

1,728,761

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

THE TRADE DESK, INC.

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

(Amounts in thousands)

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30,

 

 

 

2020

 

 

2019

 

OPERATING ACTIVITIES:

 

 

 

 

 

 

 

 

Net income

 

$

90,415

 

 

$

57,373

 

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

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

20,777

 

 

 

15,246

 

Stock-based compensation

 

 

73,751

 

 

 

56,368

 

Allowance for credit losses on accounts receivable

 

 

2,722

 

 

 

1,647

 

Noncash lease expense

 

 

24,052

 

 

 

15,394

 

Deferred income taxes

 

 

(20,978

)

 

 

—

 

Other

 

 

1,242

 

 

 

(2,945

)

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

21,063

 

 

 

(2,739

)

Prepaid expenses and other assets

 

 

(23,919

)

 

 

(19,024

)

Accounts payable

 

 

47,728

 

 

 

(21,401

)

Accrued expenses and other liabilities

 

 

11,006

 

 

 

(3,178

)

Operating lease liabilities

 

 

(10,388

)

 

 

(8,468

)

Net cash provided by operating activities

 

 

237,471

 

 

 

88,273

 

INVESTING ACTIVITIES:

 

 

 

 

 

 

 

 

Purchases of investments

 

 

(127,117

)

 

 

(178,179

)

Maturities of investments

 

 

128,315

 

 

 

55,819

 

Purchases of property and equipment

 

 

(57,721

)

 

 

(21,659

)

Capitalized software development costs

 

 

(4,246

)

 

 

(3,849

)

Net cash used in investing activities

 

 

(60,769

)

 

 

(147,868

)

FINANCING ACTIVITIES:

 

 

 

 

 

 

 

 

Proceeds from line of credit

 

 

143,000

 

 

 

—

 

Repayment on line of credit

 

 

(71,000

)

 

 

—

 

Payment of debt financing costs

 

 

—

 

 

 

(6

)

Proceeds from exercise of stock options

 

 

53,942

 

 

 

21,911

 

Proceeds from employee stock purchase plan

 

 

15,035

 

 

 

8,648

 

Taxes paid related to net settlement of restricted stock awards

 

 

(14,184

)

 

 

(4,744

)

Net cash provided by financing activities

 

 

126,793

 

 

 

25,809

 

Increase (decrease) in cash and cash equivalents

 

 

303,495

 

 

 

(33,786

)

Cash and cash equivalents—Beginning of period

 

 

130,876

 

 

 

207,232

 

Cash and cash equivalents—End of period

 

$

434,371

 

 

$

173,446

 

 

 

 

 

 

 

 

 

 

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,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

 

 

 

 

Net income

 

$

41,247

 

 

$

19,422

 

 

$

90,415

 

 

$

57,373

 

Add back:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

7,517

 

 

 

5,969

 

 

 

20,777

 

 

 

15,246

 

Stock-based compensation

 

 

26,852

 

 

 

19,442

 

 

 

73,751

 

 

 

56,368

 

Interest expense (income), net

 

 

235

 

 

 

(1,480

)

 

 

(740

)

 

 

(3,763

)

Provision for (benefit from) income taxes

 

 

1,312

 

 

 

4,397

 

 

 

(53,473

)

 

 

5,152

 

Adjusted EBITDA

 

$

77,163

 

 

$

47,750

 

 

$

130,730

 

 

$

130,376

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

GAAP net income

 

$

41,247

 

 

$

19,422

 

 

$

90,415

 

 

$

57,373

 

Add back (deduct):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation expense

 

 

26,852

 

 

 

19,442

 

 

 

73,751

 

 

 

56,368

 

Adjustment for income taxes

 

 

(5,440

)

 

 

(2,777

)

 

 

(13,341

)

 

 

(8,985

)

Non-GAAP net income

 

$

62,659

 

 

$

36,087

 

 

$

150,825

 

 

$

104,756

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP diluted EPS

 

$

0.84

 

 

$

0.40

 

 

$

1.86

 

 

$

1.20

 

Non-GAAP diluted EPS

 

$

1.27

 

 

$

0.75

 

 

$

3.10

 

 

$

2.19

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding—diluted

 

 

49,220

 

 

 

48,037

 

 

 

48,731

 

 

 

47,728

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

Source: The Trade Desk, Inc.