Global advertising technology leader The Trade Desk (Nasdaq:TTD)
today announced financial results for its fourth quarter and fiscal
year ended December 31, 2020.
“While 2020 was a uniquely challenging year, it was also a
turning point for our industry and our company. We won more share
in our fastest growing channels such as CTV and Audio, which helped
drive record ad spend of $4.2 billion on our platform in 2020,”
said Co-Founder and CEO of The Trade Desk, Jeff Green. “Perhaps
just as important, in 2020 we saw several years of advertising
disruption and innovation compressed into a few months. Marketers
are being more deliberate and data-driven in everything they do,
and as a result, they are gravitating to the advertising
opportunities of the open internet. With CTV now offering a
data-driven alternative to linear, with brands seeking a scalable
and brand-safe alternative to user-generated content, and with new
identity tools that provide a common currency for the open internet
as well as enable better cross channel measurement, the industry is
gravitating to the open internet and standardizing on our
platform.”
Fourth Quarter and Full Year 2020
Financial Highlights:
The following table summarizes our consolidated financial
results for the quarters and fiscal year ended December 31, 2020
and 2019 ($ in millions, except per share amounts):
Three Months Ended
Year Ended
December 31,
December 31,
2020
2019
2020
2019
GAAP Results
Revenue
$
319.9
$
215.9
$
836.0
$
661.1
Increase in revenue year over year
48
%
35
%
26
%
39
%
Net Income
$
151.9
$
50.9
$
242.3
$
108.3
Diluted EPS
$
3.05
$
1.06
$
4.95
$
2.27
Non-GAAP Results
Adjusted EBITDA
$
152.9
$
83.5
$
283.7
$
213.9
Adjusted EBITDA Margin
48
%
39
%
34
%
32
%
Non-GAAP Net Income
$
184.8
$
71.6
$
335.6
$
176.3
Non-GAAP Diluted EPS
$
3.71
$
1.49
$
6.85
$
3.69
Fourth Quarter and 2020 Business
Highlights Include:
- Continued Share Gain: 2020 gross spend on the platform
was approximately $4.2 billion, a 34% increase from a year
ago.
- Strong Customer Retention: Customer retention remained
over 95% during the quarter, as it has for each quarter, the
previous 6 years.
- Continued 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. Partnerships in 2020 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
- Magnite, the world’s largest independent sell-side advertising
platform
- Index Exchange, a large global advertising marketplace where
premium digital media companies sell their ad impressions
- The Washington Post, a large American daily newspaper published
in Washington, D.C.
- Pubmatic, a leader in developing and implementing online
advertising software and strategies for the digital publishing and
advertising industry.
- Neustar, a leading technology company that provides real-time
information and analytics for the Internet and digital
performance.
- MediaVine, one of the largest ad management companies in the
U.S.
- OpenX, a programmatic advertising technology company that
combines ad server and a real-time bidding exchange with a standard
supply-side platform
- Expanded Partnerships in 2020:
- In Q1, The Trade Desk and TikTok, the leading destination for
short-form mobile video, announced a new advertising partnership
covering key Asia Pacific markets. The partnership will allow
advertisers to directly access premium TikTok inventory across the
Asia-Pacific region via The Trade Desk platform. TikTok is the
first short-form video platform to integrate its ad offerings with
The Trade Desk, making this a unique industry-leading development
for brands in the region.
- Also in Q1, The Trade Desk and Samba TV, the leading provider
of consumer cross screen television insights and analytics,
expanded their U.S. partnership to international markets beginning
in Australia.
- In Q2, The Trade Desk and FreeWheel, a Comcast company expanded
its partnership in connected TV. The Trade Desk now can access
FreeWheel’s unified decisioning capability that enables buyers and
sellers to seamlessly transact across both direct sold and
programmatic advertising.
- Industry Awards: For the fourth consecutive year, The
Trade Desk was named a Best Medium Workplace™ 2020 by Great Places
to Work®. The Trade Desk was also named a Best Workplace in Asia™,
a Best Workplace in UK™, a Best Workplace in Hong Kong™ and a Best
Workplace in New York™. The Trade Desk won Best Overall Adtech
Solution at the MarTech Breakthrough Awards, won for the Best
Overall Technology for Programmatic Trading at The Drum Digital
Advertising Awards (US) and was named Marketing Technology Company
of the Year at the B&T 2020 Awards (Australia). The Trade Desk
was also a Leader in the Gartner Adtech Magic Quadrant, 2020.
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 additional 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 the following:
First Quarter 2021 outlook summary:
- Revenue range between $214 million and $217 million
- Adjusted EBITDA of at least $55 million
We have not provided 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 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 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.
Fourth Quarter and Fiscal Year 2020 Results Webcast and
Conference Call Details
- When: February 18, 2021 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 “510840” 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: 39926). Outside the United States, please dial 1-919-882-2331
(replay code: 39926). The audio replay will be available via
telephone until March 4, 2021.
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, 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
Year Ended
December 31,
December 31,
2020
2019
2020
2019
Revenue
$
319,905
$
215,944
$
836,033
$
661,058
Operating expenses (1):
Platform operations
51,645
47,267
178,812
156,180
Sales and marketing
58,740
42,931
174,742
132,882
Technology and development
48,723
32,803
166,654
116,752
General and administrative
54,365
40,293
171,617
143,048
Total operating expenses
213,473
163,294
691,825
548,862
Income from operations
106,432
52,650
144,208
112,196
Total other expense (income), net
(529
)
(1,045
)
305
(4,024
)
Income before income taxes
106,961
53,695
143,903
116,220
Provision for (benefit from) income
taxes
(44,941
)
2,750
(98,414
)
7,902
Net income
$
151,902
$
50,945
$
242,317
$
108,318
Earnings per share:
Basic
$
3.24
$
1.13
$
5.24
$
2.43
Diluted
$
3.05
$
1.06
$
4.95
$
2.27
Weighted average shares outstanding:
Basic
46,917
45,036
46,287
44,533
Diluted
49,754
48,034
48,988
47,806
(1) Includes stock-based compensation
expense as follows:
STOCK-BASED COMPENSATION
EXPENSE
(Amounts in thousands)
(Unaudited)
Three Months Ended
Year Ended
December 31,
December 31,
2020
2019
2020
2019
Platform operations
$
3,335
$
1,456
$
8,794
$
5,350
Sales and marketing
11,177
7,675
29,726
20,769
Technology and development
12,327
7,974
36,672
26,553
General and administrative
11,185
7,285
36,583
28,086
Total
$
38,024
$
24,390
$
111,775
$
80,758
THE TRADE DESK, INC.
CONSOLIDATED BALANCE
SHEETS
(Amounts in thousands)
(Unaudited)
As of
As of
December 31,
2020
December 31,
2019
ASSETS
Current assets:
Cash and cash equivalents
$
437,353
$
130,876
Short-term investments
186,685
124,112
Accounts receivable, net
1,584,109
1,166,376
Prepaid expenses and other current
assets
102,170
27,857
Total current assets
2,310,317
1,449,221
Property and equipment, net
115,863
64,012
Operating lease assets
248,143
173,449
Deferred income taxes
50,168
18,950
Other assets, non-current
29,154
23,129
Total assets
$
2,753,645
$
1,728,761
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Accounts payable
$
1,348,480
$
868,618
Accrued expenses and other current
liabilities
88,335
47,178
Operating lease liabilities
37,868
14,577
Total current liabilities
1,474,683
930,373
Operating lease liabilities,
non-current
254,562
174,873
Other liabilities, non-current
11,255
10,998
Total liabilities
1,740,500
1,116,244
Stockholders' equity:
Preferred stock
—
—
Common stock
—
—
Additional paid-in capital
538,778
380,079
Retained earnings
474,367
232,438
Total stockholders' equity
1,013,145
612,517
Total liabilities and stockholders'
equity
$
2,753,645
$
1,728,761
THE TRADE DESK, INC.
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(Amounts in thousands)
(Unaudited)
Year Ended December
31,
2020
2019
OPERATING ACTIVITIES:
Net income
$
242,317
$
108,318
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
28,632
21,662
Stock-based compensation
111,775
80,758
Deferred income taxes
(31,218
)
(10,490
)
Allowance for credit losses on accounts
receivable
3,149
2,702
Noncash lease expense
33,269
21,894
Other
2,190
(1,939
)
Changes in operating assets and
liabilities:
Accounts receivable
(418,054
)
(331,369
)
Prepaid expenses and other assets
(66,655
)
(19,597
)
Accounts payable
481,313
191,763
Accrued expenses and other liabilities
35,446
6,845
Operating lease liabilities
(17,095
)
(10,342
)
Net cash provided by operating
activities
405,069
60,205
INVESTING ACTIVITIES:
Purchases of investments
(230,759
)
(212,776
)
Maturities of investments
167,602
89,539
Purchases of property and equipment
(74,061
)
(35,693
)
Capitalized software development costs
(6,053
)
(4,911
)
Net cash used in investing activities
(143,271
)
(163,841
)
FINANCING ACTIVITIES:
Proceeds from line of credit
143,000
—
Repayment on line of credit
(143,000
)
—
Payment of debt financing costs
—
(6
)
Proceeds from exercise of stock
options
76,146
29,874
Proceeds from employee stock purchase
plan
21,671
16,746
Taxes paid related to net settlement of
restricted stock awards
(53,138
)
(19,334
)
Net cash provided by financing
activities
44,679
27,280
Increase (decrease) in cash and cash
equivalents
306,477
(76,356
)
Cash and cash equivalents—Beginning of
period
130,876
207,232
Cash and cash equivalents—End of
period
$
437,353
$
130,876
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
Year Ended
December 31,
December 31,
2020
2019
2020
2019
Net income
$
151,902
$
50,945
$
242,317
$
108,318
Add back:
Depreciation and amortization expense
7,855
6,416
28,632
21,662
Stock-based compensation expense
38,024
24,390
111,775
80,758
Interest expense (income), net
84
(956
)
(656
)
(4,719
)
Provision for (benefit from) income
taxes
(44,941
)
2,750
(98,414
)
7,902
Adjusted EBITDA
$
152,924
$
83,545
$
283,654
$
213,921
Three Months Ended
Year Ended
December 31,
December 31,
2020
2019
2020
2019
GAAP net income
$
151,902
$
50,945
$
242,317
$
108,318
Add back (deduct):
Stock-based compensation expense
38,024
24,390
111,775
80,758
Adjustment for income taxes
(5,119
)
(3,783
)
(18,460
)
(12,768
)
Non-GAAP net income
$
184,807
$
71,552
$
335,632
$
176,308
GAAP diluted EPS
$
3.05
$
1.06
$
4.95
$
2.27
Non-GAAP diluted EPS
$
3.71
$
1.49
$
6.85
$
3.69
Weighted average shares
outstanding—diluted
49,754
48,034
48,988
47,806
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210218005895/en/
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
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