The Trade Desk Reports Third Quarter 2024 Financial Results

Rhea-AI Summary

The Trade Desk (TTD) reported strong Q3 2024 financial results with revenue reaching $628 million, representing 27% year-over-year growth. The company achieved a net income of $94 million with a 15% margin and adjusted EBITDA of $257 million. Customer retention remained above 95% for the tenth consecutive year. The company expanded partnerships for Unified ID 2.0, including collaborations with Spotify and Roku. For Q4 2024, TTD expects revenue of at least $756 million and adjusted EBITDA of approximately $363 million. The company repurchased $54 million of Class A common stock during Q3.

Positive

• Revenue grew 27% YoY to $628 million
• Net income increased to $94 million, with margin improving to 15% from 8%
• Adjusted EBITDA reached $257 million with 41% margin
• Customer retention remained above 95%
• Strong Q4 guidance with expected revenue of $756 million

Negative

• None.

Insights

Financial Analyst

The Q3 results showcase remarkable financial strength with $628 million in revenue, representing a robust 27% YoY growth. The company's profitability metrics are particularly impressive - net income margin doubled to 15% from 8%, while Adjusted EBITDA margin improved to 41%.

Key performance indicators are exceptional: customer retention above 95% for a decade straight, $54 million in share repurchases and a strong Q4 guidance of $756 million in revenue. The company's strategic positioning in CTV advertising and retail media, combined with the Kokai platform upgrade, suggests sustainable competitive advantages in the $1 trillion advertising TAM.

Tech Expert

The implementation of Unified ID 2.0 (UID2) represents a strategic technical advancement in the post-cookie digital advertising landscape. Major partnerships with Spotify, Roku and Reach validate the technology's market acceptance. The Kokai platform upgrade, leveraging AI capabilities, demonstrates TTD's commitment to innovation in audience targeting and campaign optimization.

The integration of retail data marketplace capabilities and expanded CTV partnerships creates a robust technical ecosystem that addresses key industry challenges in privacy-compliant targeting and measurement.

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 third quarter ended September 30, 2024.

“The Trade Desk delivered strong performance in the third quarter, with revenue of $628 million, accelerating growth to 27%. This performance underlines the value that advertisers are placing on precision and transparency as they work with us to maximize the impact of their campaigns,” said Jeff Green, Co-founder and CEO of The Trade Desk. “As we enter our busiest time of year and look ahead to 2025, we have never been in a better position to capture greater share of the $1 trillion advertising TAM. 2024 has been a banner year for CTV. Many of the largest media companies are now working with us to help clients capture the full value of CTV advertising via programmatic. We are similarly excited about the momentum in retail media and the pace of adoption by advertisers who are taking advantage of our retail data marketplace. And the performance improvements that our clients are seeing with Kokai - our largest platform upgrade to date - showcase the value of audience-driven, AI-enabled innovation.”

Third Quarter 2024 Financial Highlights:

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

	Three Months Ended September 30,								Nine Months Ended September 30,
		2024				2023				2024				2023
GAAP Results
Revenue	$	628			$	493			$	1,704			$	1,340
Increase in revenue year over year		27	%			25	%			27	%			23	%
Net income	$	94			$	39			$	211			$	82
Net income margin		15	%			8	%			12	%			6	%
GAAP diluted earnings per share	$	0.19			$	0.08			$	0.42			$	0.16
Non-GAAP Results
Adjusted EBITDA	$	257			$	200			$	661			$	488
Adjusted EBITDA margin		41	%			40	%			39	%			36	%
Non-GAAP net income	$	207			$	167			$	536			$	421
Non-GAAP diluted earnings per share	$	0.41			$	0.33			$	1.07			$	0.84

Third Quarter and Recent Business Highlights:

• Strong Customer Retention: Customer retention remained over 95% during the third quarter, as it has for the past ten 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:
  • Spotify is extending its partnership with The Trade Desk, piloting integrations with OpenPath and UID2 through Spotify Ad Exchange.
  • Roku announced its adoption of UID2, allowing advertisers to implement more precise targeting and a secure means to facilitate data collaboration with Roku Media.
  • Reach, a UK news publisher of 130 media brands, is adopting EUID as part of their commitment to protecting journalism with a best-in-class advertising experience for readers.
  • Global media company Motorsport Network announced adoption of EUID to provide relevant advertising while prioritizing consumer privacy and transparency for its 60 million authenticated users.
  • Cint announced integration of UID2 to provide robust, omnichannel brand lift measurement.
• 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 repurchased $54 million of its Class A common stock in the third quarter of 2024. As of September 30, 2024, the Company had $521 million available and authorized for repurchases.

Financial Guidance:

Fourth Quarter 2024 outlook summary:

• Revenue at least $756 million
• Adjusted EBITDA of approximately $363 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 included in the calculation of 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, Adjusted EBITDA margin, Non-GAAP net income and Non-GAAP diluted earnings per share (“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 depreciation and amortization; stock-based compensation; interest income, net; and provision for income taxes. Adjusted EBITDA margin is Adjusted EBITDA divided by revenue, and Adjusted EBITDA margin’s closest corresponding U.S. GAAP measure is net income margin, which is GAAP net income divided by revenue. 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.

Third Quarter 2024 Financial Results Webcast and Conference Call Details

• When: November 7, 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 “349188” 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: 51455). Outside the United States, please dial 1-919-882-2331 (replay code: 51455). The audio replay will be available via telephone until November 14, 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. 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 September 30,								Nine Months Ended September 30,
		2024				2023				2024				2023
Revenue	$	628,016			$	493,266			$	1,703,819			$	1,340,323
Operating expenses (1):
Platform operations		122,656				93,382				336,745				264,903
Sales and marketing		140,296				112,466				395,888				321,177
Technology and development		117,705				117,772				335,426				309,790
General and administrative		138,878				131,969				403,902				388,411
Total operating expenses		519,535				455,589				1,471,961				1,284,281
Income from operations		108,481				37,677				231,858				56,042
Total other income, net		(18,697	)			(19,323	)			(53,845	)			(51,277	)
Income before income taxes		127,178				57,000				285,703				107,319
Provision for income taxes		33,020				17,648				74,856				25,702
Net income	$	94,158			$	39,352			$	210,847			$	81,617
Earnings per share:
Basic	$	0.19			$	0.08			$	0.43			$	0.17
Diluted	$	0.19			$	0.08			$	0.42			$	0.16
Weighted-average shares outstanding:
Basic		491,614				489,447				489,845				489,195
Diluted		502,563				501,880				500,273				500,348
___________________________
(1) Includes stock-based compensation expense as follows:

THE TRADE DESK, INC.
STOCK-BASED COMPENSATION EXPENSE
(Amounts in thousands)
(Unaudited)
	Three Months Ended September 30,						Nine Months Ended September 30,
		2024			2023			2024			2023
Platform operations	$	7,617		$	5,729		$	20,444		$	14,642
Sales and marketing		25,294			21,116			70,654			54,039
Technology and development		36,958			43,727			97,441			91,283
General and administrative (1)		58,641			69,061			176,931			210,222
Total	$	128,510		$	139,633		$	365,470		$	370,186
___________________________
(1) Includes stock-based compensation expense related to a long-term CEO performance grant of $30 million and $48 million for the three months ended September 30, 2024 and 2023, respectively, as well as $102 million and $156 million for the nine months ended September 30, 2024 and 2023, respectively.

THE TRADE DESK, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
(Unaudited)
	As of September 30, 2024			As of December 31, 2023
ASSETS
Current assets:
Cash and cash equivalents	$	1,221,475		$	895,129
Short-term investments, net		510,290			485,159
Accounts receivable, net		2,989,387			2,870,313
Prepaid expenses and other current assets		117,221			63,353
Total current assets		4,838,373			4,313,954
Property and equipment, net		197,973			161,422
Operating lease assets		242,431			197,732
Deferred income taxes		154,849			154,849
Other assets, non-current		71,699			60,730
Total assets	$	5,505,325		$	4,888,687
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	2,409,773		$	2,317,318
Accrued expenses and other current liabilities		142,459			137,996
Operating lease liabilities		62,858			55,524
Total current liabilities		2,615,090			2,510,838
Operating lease liabilities, non-current		230,355			180,369
Other liabilities, non-current		34,130			33,261
Total liabilities		2,879,575			2,724,468
Stockholders' equity:
Preferred stock		—			—
Common stock		—			—
Additional paid-in capital		2,397,100			1,967,265
Retained earnings		228,650			196,954
Total stockholders' equity		2,625,750			2,164,219
Total liabilities and stockholders' equity	$	5,505,325		$	4,888,687

THE TRADE DESK, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
(Unaudited)
	Nine Months Ended September 30,
		2024				2023
OPERATING ACTIVITIES:
Net income	$	210,847			$	81,617
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		63,378				59,889
Stock-based compensation		365,470				370,186
Noncash lease expense		41,522				36,672
Provision for expected credit losses on accounts receivable		837				1,811
Other		(11,901	)			(8,312	)
Changes in operating assets and liabilities:
Accounts receivable		(125,711	)			(130,650	)
Prepaid expenses and other current and non-current assets		(68,490	)			(11,370	)
Accounts payable		87,175				125,661
Accrued expenses and other current and non-current liabilities		8,846				18,439
Operating lease liabilities		(31,918	)			(36,741	)
Net cash provided by operating activities		540,055				507,202
INVESTING ACTIVITIES:
Purchases of investments		(486,596	)			(448,251	)
Maturities of investments		475,022				425,400
Purchases of property and equipment		(78,048	)			(21,594	)
Capitalized software development costs		(6,708	)			(6,097	)
Net cash used in investing activities		(96,330	)			(50,542	)
FINANCING ACTIVITIES:
Repurchases of Class A common stock		(177,428	)			(426,684	)
Proceeds from exercise of stock options		127,690				45,363
Proceeds from employee stock purchase plan		30,122				21,316
Taxes paid related to net settlement of restricted stock awards		(97,763	)			(55,397	)
Net cash used in financing activities		(117,379	)			(415,402	)
Increase in cash and cash equivalents		326,346				41,258
Cash and cash equivalents—Beginning of period		895,129				1,030,506
Cash and cash equivalents—End of period	$	1,221,475			$	1,071,764

Non-GAAP Financial Metrics
(Amounts in thousands, except per share amounts)
(Unaudited)
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 September 30,								Nine Months Ended September 30,
		2024				2023				2024				2023
Net income	$	94,158			$	39,352			$	210,847			$	81,617
Add back (deduct):
Depreciation and amortization expense		20,754				20,530				63,378				59,889
Stock-based compensation expense		128,510				139,633				365,470				370,186
Interest income, net		(19,408	)			(17,626	)			(53,886	)			(49,556	)
Provision for income taxes		33,020				17,648				74,856				25,702
Adjusted EBITDA	$	257,034			$	199,537			$	660,665			$	487,838
	Three Months Ended September 30,								Nine Months Ended September 30,
		2024				2023				2024				2023
GAAP net income	$	94,158			$	39,352			$	210,847			$	81,617
Add back (deduct):
Stock-based compensation expense		128,510				139,633				365,470				370,186
Adjustment for income taxes		(15,441	)			(11,742	)			(40,739	)			(30,566	)
Non-GAAP net income	$	207,227			$	167,243			$	535,578			$	421,237
GAAP diluted earnings per share	$	0.19			$	0.08			$	0.42			$	0.16
GAAP weighted-average shares outstanding—diluted		502,563				501,880				500,273				500,348
Non-GAAP diluted earnings per share	$	0.41			$	0.33			$	1.07			$	0.84
Non-GAAP weighted-average shares used in computing Non-GAAP earnings per share, diluted		502,563				501,880				500,273				500,348

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20241107931247/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 (TTD) revenue in Q3 2024?

The Trade Desk reported revenue of $628 million in Q3 2024, representing a 27% year-over-year growth.

What is The Trade Desk (TTD) Q4 2024 revenue guidance?

The Trade Desk expects Q4 2024 revenue to be at least $756 million with adjusted EBITDA of approximately $363 million.

What was TTD's customer retention rate in Q3 2024?

The Trade Desk maintained a customer retention rate of over 95% during Q3 2024, continuing a ten-year streak.

How much stock did TTD repurchase in Q3 2024?

The Trade Desk repurchased $54 million of its Class A common stock in Q3 2024, with $521 million still available for future repurchases.