TTD The Trade Desk Inc

The Trade Desk also announced an additional share repurchase authorization, bringing the total amount of authorized future repurchases to $700 million of its Class A common stock.

The Trade Desk, Inc. (“The Trade Desk” or the “Company”) (NASDAQ: TTD), a provider of a global technology platform for buyers of advertising, today announced financial results for its fourth quarter and fiscal year ended December 31, 2023.

“Once again The Trade Desk outpaced nearly all areas of digital advertising in 2023, with $1.95 billion of revenue representing 23% growth year over year and a record $9.6 billion of spend on our platform. At the same time, we continue to generate significant profitability and cash flow, which allows us to remain at the bleeding edge of our industry, with innovations such as Kokai. Our results are testament to the growing value that advertisers are placing on the open internet versus the limitations of walled gardens,” said Jeff Green, founder and CEO of The Trade Desk. “More and more of the world’s leading advertisers are gravitating to channels and partnerships that offer precision and premium value at scale, such as Connected TV (CTV) and retail media. More companies across the advertising ecosystem are leveraging new tools, such as UID2, OpenPath and OpenPass, which allow them to build the new identity and authentication fabric of the open internet. And with the launch of Kokai, we are bringing more value to advertisers with the industry’s most advanced, intuitive media buying platform.”

Fourth Quarter and Full Year 2023 Financial Highlights:

The following table summarizes the Company’s consolidated financial results for the quarters and fiscal years ended December 31, 2023 and 2022 ($ in millions, except per share amounts):

 

Three Months Ended December 31,

 

Year Ended December 31,

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

GAAP Results

 

 

 

 

 

 

 

Revenue

$

606

 

 

$

491

 

 

$

1,946

 

 

$

1,578

 

Increase in revenue year over year

 

23

%

 

 

24

%

 

 

23

%

 

 

32

%

Net income

$

97

 

 

$

71

 

 

$

179

 

 

$

53

 

GAAP diluted earnings per share

$

0.19

 

 

$

0.14

 

 

$

0.36

 

 

$

0.11

 

 

 

 

 

 

 

 

 

Non-GAAP Results

 

 

 

 

 

 

 

Adjusted EBITDA

$

284

 

 

$

245

 

 

$

772

 

 

$

668

 

Adjusted EBITDA margin

 

47

%

 

 

50

%

 

 

40

%

 

 

42

%

Non-GAAP net income

$

207

 

 

$

190

 

 

$

628

 

 

$

522

 

Non-GAAP diluted earnings per share

$

0.41

 

 

$

0.38

 

 

$

1.26

 

 

$

1.04

 

 

Fourth Quarter and 2023 Recent Business Highlights

• Continued Share Gains: 2023 gross spend of $9.6 billion.
• Strong Customer Retention: Customer retention remained over 95% during the year, as it has in each of the last ten 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:
  • In January, DISH Media announced adoption of UID2 across its suite of traditional TV and OTT services including DISH TV and Sling TV.
  • With its integration of UID2, device and software company HP has seen improved targeting on CTV, and as a result, the company has reduced wasted advertising spend.
  • In September, Philo adopted UID2 across its roster of premium streaming TV channels.
  • 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):
  • Institutional Investor Awards - Most Honored Company, Best CEO, Best Company Board, Best IR Program, Best IR Professional, Best IR Team, Best Analyst Day
  • Digiday Video and TV Awards - Best TV/Streaming Ad Sales Product of the Year
  • DigiZ Awards Hong Kong - Best Programmatic Advertising Platform
  • Marketing Excellence Awards Singapore - Excellence in Data-Driven Marketing - Gold
  • The Forrester Wave - Omnichannel Demand-Side Platforms Leader
  • Quadrant Knowledge Solutions SPARK Matrix for Ad Tech - Technology Leader
  • Stevie Awards for Customer Service Success - Bronze, Technology Industries
  • Adweek 50 List - Ian Colley
  • Ad Age 40 under 40 Award Winner - Jaime Nash
  • Top Women in Media and AdTech Award Winners: Samantha Jacobson - Change-Maker, Catherine Patterson - Tech Trailblazer, Jaime Nash - Programmatic Storyteller
  • Business Insider Rising Stars of AdTech - Ellen Mulryan, Sr. Dir. of Retail Data Partnerships
  • Fortune - Best Workplaces for Millennials
  • Fortune - Best Workplaces in Technology
  • Institutional Investor 2023-2024 All-America Executive Team List - Jeff Green, Founder and CEO
  • US News & World Report - Best Media Companies To Work For
  • National Intern Day - Top 100 Internship Programs of 2023
• Share Repurchases:
  • The Company repurchased approximately $220 million of its Class A common stock in the fourth quarter of 2023. The Company repurchased approximately $647 million of its Class A common stock in the year ended December 31, 2023, at an average repurchase price of $63.87. As of December 31, 2023, the Company had $53 million available and authorized for repurchases.

Financial Guidance:

First Quarter 2024 outlook summary:

• Revenue at least $478 million
• Adjusted EBITDA of approximately $130 million

The Company has 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 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. The Company expects 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 Operations of 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 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.

Fourth Quarter and Fiscal Year 2023 Financial Results Webcast and Conference Call Details

• When: February 15, 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 “982223” 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: 49704). Outside the United States, please dial 1-919-882-2331 (replay code: 49704). The audio replay will be available via telephone until February 22, 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 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.

Share Repurchase Program

The Company also announced that its board of directors approved an additional $647 million under its share repurchase program pursuant to which the Company may purchase its outstanding Class A Common Stock, bringing the total amount for future repurchases back to $700 million. This program does not obligate the Company to acquire any particular amount of Class A Common Stock, and may be modified, suspended or terminated at any time at the discretion of the Company’s board of directors.

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.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Amounts in thousands, except per share amounts)

(Unaudited)

 

 

Three Months Ended December 31,

 

Year Ended December 31,

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

Revenue

$

605,797

 

 

$

490,737

 

 

$

1,946,120

 

 

$

1,577,795

 

Operating expenses (1):

 

 

 

 

 

 

 

Platform operations

 

100,695

 

 

 

79,619

 

 

 

365,598

 

 

 

281,123

 

Sales and marketing

 

126,793

 

 

 

92,829

 

 

 

447,970

 

 

 

337,975

 

Technology and development

 

102,004

 

 

 

84,479

 

 

 

411,794

 

 

 

319,876

 

General and administrative

 

131,867

 

 

 

133,650

 

 

 

520,278

 

 

 

525,167

 

Total operating expenses

 

461,359

 

 

 

390,577

 

 

 

1,745,640

 

 

 

1,464,141

 

Income from operations

 

144,438

 

 

 

100,160

 

 

 

200,480

 

 

 

113,654

 

Total other income, net

 

(16,238

)

 

 

(11,960

)

 

 

(67,515

)

 

 

(13,716

)

Income before income taxes

 

160,676

 

 

 

112,120

 

 

 

267,995

 

 

 

127,370

 

Provision for income taxes

 

63,353

 

 

 

40,933

 

 

 

89,055

 

 

 

73,985

 

Net income

$

97,323

 

 

$

71,187

 

 

$

178,940

 

 

$

53,385

 

Earnings per share:

 

 

 

 

 

 

 

Basic

$

0.20

 

 

$

0.15

 

 

$

0.37

 

 

$

0.11

 

Diluted

$

0.19

 

 

$

0.14

 

 

$

0.36

 

 

$

0.11

 

Weighted-average shares outstanding:

 

 

 

 

 

 

 

Basic

 

489,454

 

 

 

489,217

 

 

 

489,261

 

 

 

486,937

 

Diluted

 

499,682

 

 

 

500,432

 

 

 

500,182

 

 

 

499,925

 

___________________________

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

THE TRADE DESK, INC.

STOCK-BASED COMPENSATION EXPENSE

(Amounts in thousands)

(Unaudited)

 

 

Three Months Ended December 31,

 

Year Ended December 31,

 

2023

 

2022

 

2023

 

2022

 

 

 

 

 

 

 

 

Platform operations

$

6,406

 

$

4,031

 

$

21,048

 

$

18,285

Sales and marketing

 

21,885

 

 

15,724

 

 

75,924

 

 

64,442

Technology and development

 

29,540

 

 

27,564

 

 

120,823

 

 

94,822

General and administrative (1)

 

63,604

 

 

80,212

 

 

273,826

 

 

321,093

Total

$

121,435

 

$

127,531

 

$

491,621

 

$

498,642

___________________________

(1) Includes stock-based compensation expense related to a long-term CEO performance grant of $42 million and $66 million for the three months ended December 31, 2023 and 2022, respectively, as well as $198 million and $262 million for the twelve months ended December 31, 2023 and 2022, respectively. THE TRADE DESK, INC.

CONSOLIDATED BALANCE SHEETS

(Amounts in thousands)

(Unaudited)

 

 

As of December 31, 2023

 

As of December 31, 2022

ASSETS

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

895,129

 

$

1,030,506

Short-term investments, net

 

485,159

 

 

416,080

Accounts receivable, net

 

2,870,313

 

 

2,347,195

Prepaid expenses and other current assets

 

63,353

 

 

51,836

Total current assets

 

4,313,954

 

 

3,845,617

Property and equipment, net

 

161,422

 

 

173,759

Operating lease assets

 

197,732

 

 

220,396

Deferred income taxes

 

154,849

 

 

94,028

Other assets, non-current

 

60,730

 

 

46,879

Total assets

$

4,888,687

 

$

4,380,679

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

2,317,318

 

$

1,871,419

Accrued expenses and other current liabilities

 

137,996

 

 

105,474

Operating lease liabilities

 

55,524

 

 

52,430

Total current liabilities

 

2,510,838

 

 

2,029,323

Operating lease liabilities, non-current

 

180,369

 

 

208,527

Other liabilities, non-current

 

33,261

 

 

27,490

Total liabilities

 

2,724,468

 

 

2,265,340

 

 

 

 

Stockholders' equity:

 

 

 

Preferred stock

 

—

 

 

—

Common stock

 

—

 

 

—

Additional paid-in capital

 

1,967,265

 

 

1,449,825

Retained earnings

 

196,954

 

 

665,514

Total stockholders' equity

 

2,164,219

 

 

2,115,339

Total liabilities and stockholders' equity

$

4,888,687

 

$

4,380,679

  THE TRADE DESK, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands)

(Unaudited)

 

 

Year Ended December 31,

 

 

2023

 

 

 

2022

 

OPERATING ACTIVITIES:

 

 

 

Net income

$

178,940

 

 

$

53,385

 

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

 

 

 

Depreciation and amortization

 

80,418

 

 

 

54,425

 

Stock-based compensation

 

491,621

 

 

 

498,642

 

Noncash lease expense

 

48,955

 

 

 

44,115

 

Provision for expected credit losses on accounts receivable

 

2,960

 

 

 

3,203

 

Deferred income taxes

 

(61,597

)

 

 

(11,507

)

Other

 

(20,379

)

 

 

622

 

Changes in operating assets and liabilities:

 

 

 

Accounts receivable

 

(554,012

)

 

 

(291,747

)

Prepaid expenses and other current and non-current assets

 

(26,815

)

 

 

50,655

 

Accounts payable

 

475,463

 

 

 

187,119

 

Accrued expenses and other current and non-current liabilities

 

35,681

 

 

 

8,168

 

Operating lease liabilities

 

(52,913

)

 

 

(48,346

)

Net cash provided by operating activities

 

598,322

 

 

 

548,734

 

INVESTING ACTIVITIES:

 

 

 

Purchases of investments

 

(608,379

)

 

 

(553,295

)

Sales of investments

 

—

 

 

 

1,977

 

Maturities of investments

 

555,806

 

 

 

338,829

 

Purchases of property and equipment

 

(46,790

)

 

 

(84,160

)

Capitalized software development costs

 

(8,230

)

 

 

(7,725

)

Net cash used in investing activities

 

(107,593

)

 

 

(304,374

)

FINANCING ACTIVITIES:

 

 

 

Repurchases of Class A common stock

 

(646,597

)

 

 

—

 

Proceeds from exercise of stock options

 

60,525

 

 

 

47,525

 

Proceeds from employee stock purchase plan

 

38,482

 

 

 

33,062

 

Taxes paid related to net settlement of restricted stock awards

 

(78,516

)

 

 

(48,595

)

Net cash provided by (used in) financing activities

 

(626,106

)

 

 

31,992

 

Increase (decrease) in cash and cash equivalents

 

(135,377

)

 

 

276,352

 

Cash and cash equivalents—Beginning of year

 

1,030,506

 

 

 

754,154

 

Cash and cash equivalents—End of year

$

895,129

 

 

$

1,030,506

 

  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 December 31,

 

Year Ended December 31,

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

 

 

 

 

 

 

 

 

Net income

$

97,323

 

 

$

71,187

 

 

$

178,940

 

 

$

53,385

 

Add back (deduct):

 

 

 

 

 

 

 

Depreciation and amortization expense

 

20,529

 

 

 

16,844

 

 

 

80,418

 

 

 

54,425

 

Stock-based compensation expense

 

121,435

 

 

 

127,531

 

 

 

491,621

 

 

 

498,642

 

Interest income, net

 

(18,952

)

 

 

(11,434

)

 

 

(68,508

)

 

 

(12,755

)

Provision for income taxes

 

63,353

 

 

 

40,933

 

 

 

89,055

 

 

 

73,985

 

Adjusted EBITDA

$

283,688

 

 

$

245,061

 

 

$

771,526

 

 

$

667,682

 

 

 

 

 

 

 

 

 

 

Three Months Ended December 31,

 

Year Ended December 31,

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

GAAP net income

$

97,323

 

 

$

71,187

 

 

$

178,940

 

 

$

53,385

 

Add back (deduct):

 

 

 

 

 

 

 

Stock-based compensation expense

 

121,435

 

 

 

127,531

 

 

 

491,621

 

 

 

498,642

 

Adjustment for income taxes

 

(11,896

)

 

 

(8,576

)

 

 

(42,462

)

 

 

(29,995

)

Non-GAAP net income

$

206,862

 

 

$

190,142

 

 

$

628,099

 

 

$

522,032

 

 

 

 

 

 

 

 

 

GAAP diluted earnings per share

$

0.19

 

 

$

0.14

 

 

$

0.36

 

 

$

0.11

 

 

 

 

 

 

 

 

 

GAAP weighted-average shares outstanding—diluted

 

499,682

 

 

 

500,432

 

 

 

500,182

 

 

 

499,925

 

 

 

 

 

 

 

 

 

Non-GAAP diluted earnings per share

$

0.41

 

 

$

0.38

 

 

$

1.26

 

 

$

1.04

 

 

 

 

 

 

 

 

 

Non-GAAP weighted-average shares used in computing Non-GAAP earnings per share, diluted

 

499,682

 

 

 

500,432

 

 

 

500,182

 

 

 

499,925

 

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240215543128/en/

Investors Jake Graves Manager, Investor Relations The Trade Desk ir@thetradedesk.com

Media Melinda Zurich VP, Communications The Trade Desk melinda.zurich@thetradedesk.com