The Trade Desk Reports Second Quarter 2023 Financial Results
“Q2 marked another quarter of outstanding execution and share gains for The Trade Desk, delivering
Second Quarter 2023 Financial Highlights:
The following table summarizes our consolidated financial results for the three and six months ended June 30, 2023 and 2022 ($ in millions, except per share amounts):
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||||||||||
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
GAAP Results |
|
|
|
|
|
|
|
||||||||
Revenue |
$ |
464 |
|
|
$ |
377 |
|
|
$ |
847 |
|
|
$ |
692 |
|
Increase in revenue year over year |
|
23 |
% |
|
|
35 |
% |
|
|
22 |
% |
|
|
39 |
% |
Net income (loss) |
$ |
33 |
|
|
$ |
(19 |
) |
|
$ |
42 |
|
|
$ |
(34 |
) |
GAAP diluted earnings (loss) per share |
$ |
0.07 |
|
|
$ |
(0.04 |
) |
|
$ |
0.08 |
|
|
$ |
(0.07 |
) |
|
|
|
|
|
|
|
|
||||||||
Non-GAAP Results |
|
|
|
|
|
|
|
||||||||
Adjusted EBITDA |
$ |
180 |
|
|
$ |
139 |
|
|
$ |
288 |
|
|
$ |
260 |
|
Adjusted EBITDA margin |
|
39 |
% |
|
|
37 |
% |
|
|
34 |
% |
|
|
38 |
% |
Non-GAAP net income |
$ |
139 |
|
|
$ |
99 |
|
|
$ |
254 |
|
|
$ |
203 |
|
Non-GAAP diluted earnings per share |
$ |
0.28 |
|
|
$ |
0.20 |
|
|
$ |
0.51 |
|
|
$ |
0.41 |
|
Second Quarter and Recent Business Highlights:
-
Strong Customer Retention: Customer retention remained over
95% during the second quarter, as it has for the past nine 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:
- Warner Bros. Discovery announced integration with UID2 across its premium entertainment, sports, news and lifestyle brands with its digital platforms, including Max and Discovery+.
- Walmart Connect announced it is testing the integration of UID2 to inform decisioning across the open internet within the Walmart DSP.
-
EUID, the European counterpart to UID2 specifically developed for the European market, is gaining support across
Europe from brands, publishers, and retailers. Initial industry engagement includes Bacardi, Kimberly-Clark, Aller Media, Future, OneFootball, Prisma Media, Tesco, and others. - On stage at Forward '23: Always On, NBCUniversal announced it is implementing UID2 on Peacock across all devices and consumer touchpoints, including on CTV, the web, apps and devices.
- OpenPath: OpenPath gives our clients a simplified, direct connection to participating premium publishers across the open internet. By supporting an objective, transparent supply path, OpenPath helps to maximize value for everyone involved. OpenPath is already live with dozens of publishers representing over 11,000 destinations across connected TV, mobile, display and audio.
-
Industry Recognition (2023):
- Top Women in Media and AdTech Award Winners: Samantha Jacobson - Change-Maker, Catherine Patterson - Tech Trailblazer, Jaime Nash - Programmatic Storyteller
- Fortune - Best Workplaces for Millennials
- National Intern Day - Top 100 Internship Programs of 2023
- Digiday Video and TV Awards - Best TV/Streaming Ad Sales Product of the Year
- Business Insider Rising Stars of AdTech - Ellen Mulryan, Sr. Dir. of Retail Data Partnerships
- Quadrant Knowledge Solutions SPARK Matrix for Ad Tech - Technology Leader
- Stevie Awards for Customer Service Success - Bronze, Technology Industries
-
Share Repurchases: We repurchased
$44 million $364 million
Financial Guidance:
Third Quarter 2023 outlook summary:
-
Revenue at least
$485 million -
Adjusted EBITDA of approximately
$185 million
We have not provided an outlook for GAAP Net Income or reconciliation of Adjusted EBITDA guidance to Net Income, the closest corresponding
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 expense (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
Second Quarter 2023 Financial Results Webcast and Conference Call Details
- When: August 9, 2023 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 outsidethe United States , please dial 1-973-528-0011. Participants should reference the conference call ID code “192228” 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: 48706). Outsidethe United States , please dial 1-919-882-2331 (replay code: 48706). The audio replay will be available via telephone until August 16, 2023.
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/), 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
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, 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
|
|
Six Months Ended
|
||||||||||||
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Revenue |
$ |
464,254 |
|
|
$ |
376,962 |
|
|
$ |
847,057 |
|
|
$ |
692,285 |
|
Operating expenses (1): |
|
|
|
|
|
|
|
||||||||
Platform operations |
|
86,654 |
|
|
|
67,490 |
|
|
|
171,521 |
|
|
|
131,380 |
|
Sales and marketing |
|
111,489 |
|
|
|
89,420 |
|
|
|
208,711 |
|
|
|
160,108 |
|
Technology and development |
|
98,308 |
|
|
|
83,483 |
|
|
|
192,018 |
|
|
|
155,482 |
|
General and administrative |
|
126,130 |
|
|
|
134,826 |
|
|
|
256,442 |
|
|
|
260,625 |
|
Total operating expenses |
|
422,581 |
|
|
|
375,219 |
|
|
|
828,692 |
|
|
|
707,595 |
|
Income (loss) from operations |
|
41,673 |
|
|
|
1,743 |
|
|
|
18,365 |
|
|
|
(15,310 |
) |
Total other income, net |
|
(18,254 |
) |
|
|
(339 |
) |
|
|
(31,954 |
) |
|
|
(58 |
) |
Income (loss) before income taxes |
|
59,927 |
|
|
|
2,082 |
|
|
|
50,319 |
|
|
|
(15,252 |
) |
Provision for income taxes |
|
26,988 |
|
|
|
21,155 |
|
|
|
8,054 |
|
|
|
18,419 |
|
Net income (loss) |
$ |
32,939 |
|
|
$ |
(19,073 |
) |
|
$ |
42,265 |
|
|
$ |
(33,671 |
) |
Earnings (loss) per share: |
|
|
|
|
|
|
|
||||||||
Basic |
$ |
0.07 |
|
|
$ |
(0.04 |
) |
|
$ |
0.09 |
|
|
$ |
(0.07 |
) |
Diluted |
$ |
0.07 |
|
|
$ |
(0.04 |
) |
|
$ |
0.08 |
|
|
$ |
(0.07 |
) |
Weighted-average shares outstanding: |
|
|
|
|
|
|
|
||||||||
Basic |
|
488,431 |
|
|
|
486,310 |
|
|
|
489,068 |
|
|
|
485,256 |
|
Diluted |
|
499,349 |
|
|
|
486,310 |
|
|
|
499,570 |
|
|
|
485,256 |
|
___________________________ (1) Includes stock-based compensation expense as follows: |
|||||||||||||||
| STOCK-BASED COMPENSATION EXPENSE
(Amounts in thousands) (Unaudited) |
|||||||||||
|
Three Months Ended
|
|
Six Months Ended
|
||||||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||
|
|
|
|
|
|
|
|
||||
Platform operations |
$ |
4,967 |
|
$ |
4,787 |
|
$ |
8,913 |
|
$ |
10,737 |
Sales and marketing |
|
18,800 |
|
|
17,332 |
|
|
32,923 |
|
|
33,857 |
Technology and development |
|
26,689 |
|
|
22,224 |
|
|
47,556 |
|
|
44,617 |
General and administrative (1) |
|
66,627 |
|
|
80,870 |
|
|
141,161 |
|
|
160,897 |
Total |
$ |
117,083 |
|
$ |
125,213 |
|
$ |
230,553 |
|
$ |
250,108 |
___________________________
(1) Includes stock-based compensation expense related to a long-term CEO performance grant of |
|||||||||||
| THE TRADE DESK, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (Amounts in thousands) (Unaudited) |
|||||
|
As of June 30,
|
|
As of December 31,
|
||
ASSETS |
|
|
|
||
Current assets: |
|
|
|
||
Cash and cash equivalents |
$ |
965,831 |
|
$ |
1,030,506 |
Short-term investments, net |
|
465,113 |
|
|
416,080 |
Accounts receivable, net |
|
2,346,070 |
|
|
2,347,195 |
Prepaid expenses and other current assets |
|
54,749 |
|
|
51,836 |
Total current assets |
|
3,831,763 |
|
|
3,845,617 |
Property and equipment, net |
|
159,805 |
|
|
173,759 |
Operating lease assets |
|
212,088 |
|
|
220,396 |
Deferred income taxes |
|
94,028 |
|
|
94,028 |
Other assets, non-current |
|
49,284 |
|
|
46,879 |
Total assets |
$ |
4,346,968 |
|
$ |
4,380,679 |
|
|
|
|
||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
||
Current liabilities: |
|
|
|
||
Accounts payable |
$ |
1,892,906 |
|
$ |
1,871,419 |
Accrued expenses and other current liabilities |
|
103,285 |
|
|
105,474 |
Operating lease liabilities |
|
54,793 |
|
|
52,430 |
Total current liabilities |
|
2,050,984 |
|
|
2,029,323 |
Operating lease liabilities, non-current |
|
198,075 |
|
|
208,527 |
Other liabilities, non-current |
|
26,499 |
|
|
27,490 |
Total liabilities |
|
2,275,558 |
|
|
2,265,340 |
|
|
|
|
||
Stockholders' equity: |
|
|
|
||
Preferred stock |
|
— |
|
|
— |
Common stock |
|
— |
|
|
— |
Additional paid-in capital |
|
1,700,498 |
|
|
1,449,825 |
Retained earnings |
|
370,912 |
|
|
665,514 |
Total stockholders' equity |
|
2,071,410 |
|
|
2,115,339 |
Total liabilities and stockholders' equity |
$ |
4,346,968 |
|
$ |
4,380,679 |
| THE TRADE DESK, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Amounts in thousands) (Unaudited) |
|||||||
|
Six Months Ended June 30, |
||||||
|
|
2023 |
|
|
|
2022 |
|
OPERATING ACTIVITIES: |
|
|
|
||||
Net income (loss) |
$ |
42,265 |
|
|
$ |
(33,671 |
) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
|
|
|
||||
Depreciation and amortization |
|
39,359 |
|
|
|
24,624 |
|
Stock-based compensation |
|
230,553 |
|
|
|
250,108 |
|
Noncash lease expense |
|
24,325 |
|
|
|
21,343 |
|
Allowance for credit losses on accounts receivable |
|
318 |
|
|
|
2,078 |
|
Deferred income taxes |
|
— |
|
|
|
1,555 |
|
Other |
|
(8,423 |
) |
|
|
6,630 |
|
Changes in operating assets and liabilities: |
|
|
|
||||
Accounts receivable |
|
(35,368 |
) |
|
|
112,345 |
|
Prepaid expenses and other current and non-current assets |
|
(3,659 |
) |
|
|
29,018 |
|
Accounts payable |
|
50,995 |
|
|
|
(129,853 |
) |
Accrued expenses and other current and non-current liabilities |
|
399 |
|
|
|
(22,190 |
) |
Operating lease liabilities |
|
(25,102 |
) |
|
|
(24,029 |
) |
Net cash provided by operating activities |
|
315,662 |
|
|
|
237,958 |
|
INVESTING ACTIVITIES: |
|
|
|
||||
Purchases of investments |
|
(316,307 |
) |
|
|
(233,877 |
) |
Sales of investments |
|
— |
|
|
|
1,977 |
|
Maturities of investments |
|
274,401 |
|
|
|
154,092 |
|
Purchases of property and equipment |
|
(16,556 |
) |
|
|
(12,541 |
) |
Capitalized software development costs |
|
(3,415 |
) |
|
|
(3,226 |
) |
Net cash used in investing activities |
|
(61,877 |
) |
|
|
(93,575 |
) |
FINANCING ACTIVITIES: |
|
|
|
||||
Repurchases of Class A common stock |
|
(336,494 |
) |
|
|
— |
|
Proceeds from exercise of stock options |
|
27,772 |
|
|
|
31,795 |
|
Proceeds from employee stock purchase plan |
|
21,316 |
|
|
|
25,547 |
|
Taxes paid related to net settlement of restricted stock awards |
|
(31,054 |
) |
|
|
(23,196 |
) |
Net cash provided by (used in) financing activities |
|
(318,460 |
) |
|
|
34,146 |
|
Increase (decrease) in cash and cash equivalents |
|
(64,675 |
) |
|
|
178,529 |
|
Cash and cash equivalents—Beginning of period |
|
1,030,506 |
|
|
|
754,154 |
|
Cash and cash equivalents—End of period |
$ |
965,831 |
|
|
$ |
932,683 |
|
| 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, |
||||||||||||
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss) |
$ |
32,939 |
|
|
$ |
(19,073 |
) |
|
$ |
42,265 |
|
|
$ |
(33,671 |
) |
Add back: |
|
|
|
|
|
|
|
||||||||
Depreciation and amortization expense |
|
20,066 |
|
|
|
12,274 |
|
|
|
39,359 |
|
|
|
24,624 |
|
Stock-based compensation expense |
|
117,083 |
|
|
|
125,213 |
|
|
|
230,553 |
|
|
|
250,108 |
|
Interest expense (income), net |
|
(17,507 |
) |
|
|
(656 |
) |
|
|
(31,930 |
) |
|
|
420 |
|
Provision for income taxes |
|
26,988 |
|
|
|
21,155 |
|
|
|
8,054 |
|
|
|
18,419 |
|
Adjusted EBITDA |
$ |
179,569 |
|
|
$ |
138,913 |
|
|
$ |
288,301 |
|
|
$ |
259,900 |
|
|
|
|
|
|
|
|
|
||||||||
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||||||||||
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
GAAP net income (loss) |
$ |
32,939 |
|
|
$ |
(19,073 |
) |
|
$ |
42,265 |
|
|
$ |
(33,671 |
) |
Add back (deduct): |
|
|
|
|
|
|
|
||||||||
Stock-based compensation expense |
|
117,083 |
|
|
|
125,213 |
|
|
|
230,553 |
|
|
|
250,108 |
|
Adjustment for income taxes |
|
(10,525 |
) |
|
|
(7,500 |
) |
|
|
(18,824 |
) |
|
|
(13,135 |
) |
Non-GAAP net income |
$ |
139,497 |
|
|
$ |
98,640 |
|
|
$ |
253,994 |
|
|
$ |
203,302 |
|
|
|
|
|
|
|
|
|
||||||||
GAAP diluted earnings (loss) per share |
$ |
0.07 |
|
|
$ |
(0.04 |
) |
|
$ |
0.08 |
|
|
$ |
(0.07 |
) |
|
|
|
|
|
|
|
|
||||||||
GAAP weighted-average shares outstanding—diluted |
|
499,349 |
|
|
|
486,310 |
|
|
|
499,570 |
|
|
|
485,256 |
|
|
|
|
|
|
|
|
|
||||||||
Non-GAAP diluted earnings per share |
$ |
0.28 |
|
|
$ |
0.20 |
|
|
$ |
0.51 |
|
|
$ |
0.41 |
|
|
|
|
|
|
|
|
|
||||||||
Non-GAAP weighted-average shares used in computing Non-GAAP earnings per share, diluted (1) |
|
499,349 |
|
|
|
499,155 |
|
|
|
499,570 |
|
|
|
499,477 |
|
_________________________ (1) Includes an additional 12.8 million and 14.2 million of dilutive securities for the three and six months ended June 30, 2022, respectively, which are not included in GAAP diluted weighted-average shares outstanding due to the Company's net loss position for the three and six months ended June 30, 2022. |
|||||||||||||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20230809873189/en/
Investors
Jake Graves
Manager, Investor Relations
The Trade Desk
ir@thetradedesk.com
312-620-0806
Media
Melinda Zurich
VP, Communications
The Trade Desk
melinda.zurich@thetradedesk.com
201-320-9398
Source: The Trade Desk, Inc.
