The Trade Desk Reports Second Quarter 2024 Financial Results

Rhea-AI Summary

The Trade Desk (NASDAQ: TTD) reported strong Q2 2024 financial results, with revenue of $585 million, representing a 26% year-over-year growth. The company achieved GAAP net income of $85 million and non-GAAP net income of $197 million. Key highlights include:

- Customer retention remained over 95% for the tenth consecutive year
- Significant progress in CTV, retail media, and identity solutions
- Expanded partnerships with major platforms like Netflix and FOX
- Continued adoption of Unified ID 2.0 (UID2) by industry leaders
- Q3 2024 revenue guidance of at least $618 million

The company's focus on AI-driven innovations, UID2 adoption, and retail data integration positions it for continued growth in high-growth markets like CTV.

Positive

• Revenue increased 26% year-over-year to $585 million in Q2 2024
• GAAP net income grew to $85 million from $33 million in Q2 2023
• Non-GAAP net income increased to $197 million from $139 million in Q2 2023
• Adjusted EBITDA margin improved to 41% from 39% in Q2 2023
• Customer retention remained over 95% for the tenth consecutive year
• Expanded partnerships with major platforms like Netflix and FOX
• Increased adoption of Unified ID 2.0 (UID2) by industry leaders
• Q3 2024 revenue guidance of at least $618 million, indicating continued growth

Negative

• None.

Insights

Financial Analyst

The Trade Desk's Q2 2024 results demonstrate robust growth and financial health. Revenue reached $585 million, a 26% year-over-year increase, showcasing the company's strong market position. The adjusted EBITDA margin improved to 41%, up from 39% in Q2 2023, indicating enhanced operational efficiency.

Key growth drivers include CTV, retail media and identity solutions. The expansion of partnerships, particularly with Netflix and major broadcasters, positions The Trade Desk favorably in the high-growth CTV market. The widespread adoption of UID2 strengthens the company's role in shaping the future of digital advertising post-third-party cookies.

With a customer retention rate over 95% and a solid financial outlook for Q3 2024, The Trade Desk appears well-positioned for continued growth. However, investors should monitor potential challenges in the broader advertising market and competitive landscape.

Tech Expert

The Trade Desk's Kokai platform is a game-changer in the adtech space. By leveraging AI as a co-pilot, it's revolutionizing how advertisers interact with data and make decisions. This innovation could significantly enhance campaign effectiveness and ROI for clients, potentially leading to increased market share and revenue for The Trade Desk.

The company's leadership in CTV and retail media is noteworthy. As these sectors continue to grow, The Trade Desk's first-mover advantage and strong partnerships (e.g., Netflix, FOX) could translate into sustained competitive edge. The integration of UID2 across various platforms also positions the company well for the post-cookie era, addressing a critical industry challenge.

However, the rapid pace of technological change in adtech means The Trade Desk must continue innovating to maintain its position. Investors should watch for sustained R&D investments and new feature rollouts.

Market Research Analyst

The Trade Desk's performance reflects broader trends in the digital advertising market. The 26% revenue growth outpaces the industry average, indicating market share gains. The strong growth in CTV aligns with the shift in consumer behavior towards streaming platforms, a trend accelerated by the pandemic and likely to continue.

The adoption of UID2 by major players like Roku and SiriusXM signals growing industry acceptance of this identity solution. This could be a significant differentiator for The Trade Desk as the industry prepares for the deprecation of third-party cookies.

The company's expansion into retail media is timely, given the sector's rapid growth. However, competition in this space is intensifying, with major tech companies also vying for market share. The Trade Desk's success will depend on its ability to innovate and maintain strong partnerships with retailers and brands.

Overall, The Trade Desk's strategic focus aligns well with key growth areas in digital advertising, positioning it favorably for continued expansion.

LOS ANGELES--(BUSINESS WIRE)-- 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 second quarter ended June 30, 2024.

“Q2 was another strong quarter for The Trade Desk, with revenue of $585 million, representing 26% year-over-year growth,” said Jeff Green, Co-founder and CEO of The Trade Desk. “We’ve made significant strides in CTV, retail media and identity, empowering the world’s largest brands to buy premium media on the open internet with unprecedented agility and precision. As Kokai ramps, we’re intuitively surfacing value for advertisers, integrating data into every decision, advancing the full power of AI as a co-pilot, and enabling advertisers to maximize the potential of their first party data. With ongoing innovations in Kokai, the widespread adoption of UID2, and the expanding use of retail data, we will continue to deliver exceptional value to advertisers and grow our leadership in key high growth markets such as CTV.”

Second Quarter 2024 Financial Highlights:

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

	Three Months Ended June 30,								Six Months Ended June 30,
	2024				2023				2024				2023
GAAP Results
Revenue	$	585			$	464			$	1,076			$	847
Increase in revenue year over year		26	%			23	%			27	%			22	%
Net income	$	85			$	33			$	117			$	42
GAAP diluted earnings per share	$	0.17			$	0.07			$	0.23			$	0.08
Non-GAAP Results
Adjusted EBITDA	$	242			$	180			$	404			$	288
Adjusted EBITDA margin		41	%			39	%			38	%			34	%
Non-GAAP net income	$	197			$	139			$	328			$	254
Non-GAAP diluted earnings per share	$	0.39			$	0.28			$	0.66			$	0.51

Second Quarter and Recent Business Highlights:

• Strong Customer Retention: Customer retention remained over 95% during the second quarter, as it has for the past ten consecutive years.
• Connected TV (CTV): The Trade Desk offers the largest CTV inventory marketplace in the industry, giving advertisers unmatched access to premium content across major networks and ad-supported streaming services around the world. Because we do not compete in content or supply, we have built lasting relationships with premium publishers to help brands confidently engage their audiences and drive measurable results. Recent CTV updates include:
  • Netflix announced it will expand buying capabilities to include The Trade Desk as one of its main programmatic partners for advertisers.
  • FOX announced expanded partnership with The Trade Desk through integration of UID2 and OpenPath across FOX brands and the AdRise technology platform.
  • E.W. Scripps is streamlining its programmatic ad buying process for advertisers through the adoption of OpenPass and UID2, making it the first CTV publisher to adopt OpenPass.
  • At Forward ‘24 in Canada, CBC announced its Olympics inventory will be available programmatically for the first time ever via The Trade Desk.
• 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:
  • Roku announced its adoption of UID2, allowing advertisers to implement more precise targeting and a secure means to facilitate data collaboration with Roku Media.
  • SiriusXM Media announced Pandora Media as the first audio publisher to adopt UID2.
  • LG Ad Solutions announced it is integrating UID2 to enable advertisers to leverage their first-party data across LG’s extensive audience network in a privacy-conscious manner.
  • TF1, M6, and Media Figaro, three of the leading broadcasters and publishers in France, announced their adoption of EUID to help their advertisers run effective campaigns with improved targeting capabilities.
• 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 did not repurchase any shares of its Class A common stock in the second quarter of 2024. As of June 30, 2024, the Company had $575 million available and authorized for repurchases.

Financial Guidance:

Third Quarter 2024 outlook summary:

• Revenue at least $618 million
• Adjusted EBITDA of approximately $248 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 excluded from 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, 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 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 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.

Second Quarter 2024 Financial Results Webcast and Conference Call Details

• When: August 8, 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 “250454” 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: 50885). Outside the United States, please dial 1-919-882-2331 (replay code: 50885). The audio replay will be available via telephone until August 15, 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, and the amount, timing and sources of funding for the Company’s share repurchase program. 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 June 30,								Six Months Ended June 30,
	2024				2023				2024				2023
Revenue	$	584,550			$	464,254			$	1,075,803			$	847,057
Operating expenses (1):
Platform operations		110,459				86,654				214,089				171,521
Sales and marketing		133,867				111,489				255,592				208,711
Technology and development		110,035				98,308				217,721				192,018
General and administrative		135,469				126,130				265,024				256,442
Total operating expenses		489,830				422,581				952,426				828,692
Income from operations		94,720				41,673				123,377				18,365
Total other income, net		(17,772	)			(18,254	)			(35,148	)			(31,954	)
Income before income taxes		112,492				59,927				158,525				50,319
Provision for income taxes		27,463				26,988				41,836				8,054
Net income	$	85,029			$	32,939			$	116,689			$	42,265
Earnings per share:
Basic	$	0.17			$	0.07			$	0.24			$	0.09
Diluted	$	0.17			$	0.07			$	0.23			$	0.08
Weighted-average shares outstanding:
Basic		489,353				488,431				488,952				489,068
Diluted		500,040				499,349				499,117				499,570

___________________________

(1) Includes stock-based compensation expense as follows:

THE TRADE DESK, INC. STOCK-BASED COMPENSATION EXPENSE (Amounts in thousands) (Unaudited)
	Three Months Ended June 30,								Six Months Ended June 30,
		2024				2023				2024				2023
Platform operations	$	7,272			$	4,967			$	12,827			$	8,913
Sales and marketing		25,068				18,800				45,360				32,923
Technology and development		32,509				26,689				60,483				47,556
General and administrative (1)		61,491				66,627				118,290				141,161
Total	$	126,340			$	117,083			$	236,960			$	230,553

___________________________

(1) Includes stock-based compensation expense related to a long-term CEO performance grant of $36 million and $48 million for the three months ended June 30, 2024 and 2023, respectively, as well as $71 million and $108 million for the six months ended June 30, 2024 and 2023, respectively.

THE TRADE DESK, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Amounts in thousands) (Unaudited)
	As of June 30, 2024			As of December 31, 2023
ASSETS
Current assets:
Cash and cash equivalents	$	1,009,363		$	895,129
Short-term investments, net		497,168			485,159
Accounts receivable, net		2,905,533			2,870,313
Prepaid expenses and other current assets		110,776			63,353
Total current assets		4,522,840			4,313,954
Property and equipment, net		191,912			161,422
Operating lease assets		229,411			197,732
Deferred income taxes		154,849			154,849
Other assets, non-current		60,910			60,730
Total assets	$	5,159,922		$	4,888,687
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	2,336,589		$	2,317,318
Accrued expenses and other current liabilities		120,218			137,996
Operating lease liabilities		61,579			55,524
Total current liabilities		2,518,386			2,510,838
Operating lease liabilities, non-current		202,769			180,369
Other liabilities, non-current		33,361			33,261
Total liabilities		2,754,516			2,724,468
Stockholders' equity:
Preferred stock		—			—
Common stock		—			—
Additional paid-in capital		2,217,043			1,967,265
Retained earnings		188,363			196,954
Total stockholders' equity		2,405,406			2,164,219
Total liabilities and stockholders' equity	$	5,159,922		$	4,888,687

THE TRADE DESK, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Amounts in thousands) (Unaudited)
	Six Months Ended June 30,
	2024				2023
OPERATING ACTIVITIES:
Net income	$	116,689			$	42,265
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		42,624				39,359
Stock-based compensation		236,960				230,553
Noncash lease expense		26,460				24,325
Provision for expected credit losses on accounts receivable		133				318
Other		(4,117	)			(8,423	)
Changes in operating assets and liabilities:
Accounts receivable		(49,321	)			(35,368	)
Prepaid expenses and other current and non-current assets		(52,064	)			(3,659	)
Accounts payable		(13,247	)			50,995
Accrued expenses and other current and non-current liabilities		(9,989	)			399
Operating lease liabilities		(27,397	)			(25,102	)
Net cash provided by operating activities		266,731				315,662
INVESTING ACTIVITIES:
Purchases of investments		(317,969	)			(316,307	)
Maturities of investments		314,598				274,401
Purchases of property and equipment		(29,339	)			(16,556	)
Capitalized software development costs		(4,424	)			(3,415	)
Net cash used in investing activities		(37,134	)			(61,877	)
FINANCING ACTIVITIES:
Repurchases of Class A common stock		(125,280	)			(336,494	)
Proceeds from exercise of stock options		38,164				27,772
Proceeds from employee stock purchase plan		30,122				21,316
Taxes paid related to net settlement of restricted stock awards		(58,369	)			(31,054	)
Net cash used in financing activities		(115,363	)			(318,460	)
Increase (decrease) in cash and cash equivalents		114,234				(64,675	)
Cash and cash equivalents—Beginning of period		895,129				1,030,506
Cash and cash equivalents—End of period	$	1,009,363			$	965,831

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,
	2024				2023				2024				2023
Net income	$	85,029			$	32,939			$	116,689			$	42,265
Add back (deduct):
Depreciation and amortization expense		20,882				20,066				42,624				39,359
Stock-based compensation expense		126,340				117,083				236,960				230,553
Interest income, net		(17,817	)			(17,507	)			(34,478	)			(31,930	)
Provision for income taxes		27,463				26,988				41,836				8,054
Adjusted EBITDA	$	241,897			$	179,569			$	403,631			$	288,301
	Three Months Ended June 30,								Six Months Ended June 30,
	2024				2023				2024				2023
GAAP net income	$	85,029			$	32,939			$	116,689			$	42,265
Add back (deduct):
Stock-based compensation expense		126,340				117,083				236,960				230,553
Adjustment for income taxes		(13,886	)			(10,525	)			(25,298	)			(18,824	)
Non-GAAP net income	$	197,483			$	139,497			$	328,351			$	253,994
GAAP diluted earnings per share	$	0.17			$	0.07			$	0.23			$	0.08
GAAP weighted-average shares outstanding—diluted		500,040				499,349				499,117				499,570
Non-GAAP diluted earnings per share	$	0.39			$	0.28			$	0.66			$	0.51
Non-GAAP weighted-average shares used in computing Non-GAAP earnings per share, diluted		500,040				499,349				499,117				499,570

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240808229961/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

Source: The Trade Desk, Inc.

FAQ

What was The Trade Desk's (TTD) revenue for Q2 2024?

The Trade Desk (TTD) reported revenue of $585 million for Q2 2024, representing a 26% year-over-year growth.

How much did The Trade Desk's (TTD) net income increase in Q2 2024?

The Trade Desk's (TTD) GAAP net income increased to $85 million in Q2 2024, up from $33 million in Q2 2023.

What is The Trade Desk's (TTD) customer retention rate?

The Trade Desk (TTD) maintained a customer retention rate of over 95% for the tenth consecutive year.

What is The Trade Desk's (TTD) revenue guidance for Q3 2024?

The Trade Desk (TTD) provided revenue guidance of at least $618 million for Q3 2024.

Which major platforms expanded partnerships with The Trade Desk (TTD) in Q2 2024?

The Trade Desk (TTD) expanded partnerships with major platforms including Netflix and FOX in Q2 2024.