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The Trade Desk Reports First Quarter Financial Results

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The Trade Desk, Inc. (NASDAQ: TTD), a provider of a global technology platform for buyers of advertising, today announced financial results for its first quarter ended March 31, 2021.

"We delivered outstanding performance in the first quarter, once again surpassing our expectations. Revenue growth acceleration over Q1 a year ago is testament to the value that marketers are placing on data-driven advertising. Nowhere is this more apparent than CTV, which continues to lead our growth," said Jeff Green, Co-founder and CEO of The Trade Desk. "We continue to invest in our platform so that we can best meet the evolving needs of the modern marketer. Whether it’s the ability to set precise business goals, to activate valuable first-party data, to pioneer new approaches to identity, or to leverage a full scope of onsite and offsite measurement tools, The Trade Desk continues to pioneer the bleeding edge of ad tech for our clients. As a result, we are rapidly emerging as the default DSP for the open internet."

First Quarter 2021 Financial Highlights:

The following table summarizes our consolidated financial results for the quarters ended March 31, 2021 and 2020 ($ in millions, except per share amounts):

Three Months Ended

March 31,

2021

2020

GAAP Results

Revenue

$

219.8

$

160.7

Increase in revenue year over year

37

%

33

%

Net Income

$

22.6

$

24.1

Diluted EPS

$

0.45

$

0.50

Non-GAAP Results

Adjusted EBITDA

$

70.5

$

39.0

Adjusted EBITDA Margin

32

%

24

%

Non-GAAP Net Income

$

70.0

$

43.4

Non-GAAP Diluted EPS

$

1.41

$

0.90

First Quarter and Recent Business Highlights Include:

  • Strong Customer Retention: Customer retention remained over 95% during the quarter, as it has for the previous 7 years.

  • Expanded Partnerships:

    • In Q1, The Trade Desk partnered with Walmart to launch a new DSP based on The Trade Desk’s platform that will provide advertisers with access to unique Walmart shopper data and sales measurement data in a self-service platform.

  • Continued Industry-Wide Collaboration and Support for Unified ID 2.0: The Trade Desk is building support for Unified ID 2.0 (UID2), 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. Recent pledges of support and integration with UID2 include:

    • Global advertising conglomerate, Publicis Groupe SA’s Epsilon and its Core ID

    • Xandr, a business unit within AT&T that powers a global marketplace for premium advertising

    • AcuityAds Holdings, the leading technology company that enables advertisers to connect intelligently with audiences across digital campaigns from a single platform

    • Throtle, a leading identity and data onboarding company

    • FuboTV, a leading sports-first live TV streaming platform

    • Prebid which will independently operate the technical infrastructure of Unified ID 2.0 and monitor the use of its technology. The goal is to ensure impartial oversight of the open-source identifier

  • Industry Awards: The Trade Desk was recently ranked #7 for Best Workplaces™ Asia 2020 for the small/medium company category.

Financial Guidance:

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:

Second Quarter 2021 outlook summary:

  • Revenue range between $259 million and $262 million

  • Adjusted EBITDA of at least $84 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 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.

Announces Ten-for-One Stock Split

Concurrent with today’s Q1 2021 financial results, The Trade Desk also announced that the Board of Directors has approved and declared a ten-for-one split of The Trade Desk’s common stock in the form of a stock dividend. Each stockholder of record on June 9, 2021 will receive nine additional shares of common stock for each then-held share, to be distributed after close of trading on June 16, 2021. Trading will begin on a stock split-adjusted basis on June 17, 2021.

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 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.

First Quarter Financial Results Webcast and Conference Call Details

  • When: May 10, 2021 at 8:30 A.M. Pacific Time (11:30 A.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 the United States, 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 "430244" 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: 41109). Outside the United States, please dial 1-919-882-2331 (replay code: 41109). The audio replay will be available via telephone until May 17, 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 and the impact of COVID-19 on the Company and its customers and partners, 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

March 31,

2021

2020

Revenue

$

219,811

$

160,660

Operating expenses (1):

Platform operations

50,500

40,208

Sales and marketing

55,764

34,294

Technology and development

53,918

36,794

General and administrative

51,845

38,598

Total operating expenses

212,027

149,894

Income from operations

7,784

10,766

Total other expense (income), net

(308

)

417

Income before income taxes

8,092

10,349

Benefit from income taxes

(14,550

)

(13,708

)

Net income

$

22,642

$

24,057

Earnings per share:

Basic

$

0.48

$

0.53

Diluted

$

0.45

$

0.50

Weighted average shares outstanding:

Basic

47,282

45,501

Diluted

49,792

48,313

_______________________

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

STOCK-BASED COMPENSATION EXPENSE

(Amounts in thousands)

(Unaudited)

Three Months Ended

March 31,

2021

2020

Platform operations

$

5,015

$

1,462

Sales and marketing

13,684

5,314

Technology and development

16,094

8,590

General and administrative

17,561

7,599

Total

$

52,354

$

22,965

THE TRADE DESK, INC.

CONSOLIDATED BALANCE SHEETS

(Amounts in thousands)

(Unaudited)

As of

As of

March 31,
2021

December 31,
2020

ASSETS

Current assets:

Cash and cash equivalents

$

471,637

$

437,353

Short-term investments, net

208,446

186,685

Accounts receivable, net

1,368,668

1,584,109

Prepaid expenses and other current assets

121,398

102,170

Total current assets

2,170,149

2,310,317

Property and equipment, net

115,914

115,863

Operating lease assets

237,917

248,143

Deferred income taxes

50,168

50,168

Other assets, non-current

28,551

29,154

Total assets

$

2,602,699

$

2,753,645

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Accounts payable

$

1,142,258

$

1,348,480

Accrued expenses and other current liabilities

83,530

88,335

Operating lease liabilities

37,688

37,868

Total current liabilities

1,263,476

1,474,683

Operating lease liabilities, non-current

245,899

254,562

Other liabilities, non-current

9,011

11,255

Total liabilities

1,518,386

1,740,500

Stockholders' equity:

Preferred stock

Common stock

Additional paid-in capital

587,304

538,778

Retained earnings

497,009

474,367

Total stockholders' equity

1,084,313

1,013,145

Total liabilities and stockholders' equity

$

2,602,699

$

2,753,645

THE TRADE DESK, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands)

(Unaudited)

Three Months Ended March 31,

2021

2020

OPERATING ACTIVITIES:

Net income

$

22,642

$

24,057

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

Depreciation and amortization

10,011

6,477

Stock-based compensation

52,354

22,965

Allowance for credit losses on accounts receivable

203

1,310

Noncash lease expense

9,451

7,402

Other

4,905

3,484

Changes in operating assets and liabilities:

Accounts receivable

208,847

210,552

Prepaid expenses and other assets

(16,180

)

(15,791

)

Accounts payable

(200,578

)

(205,967

)

Accrued expenses and other liabilities

(5,691

)

960

Operating lease liabilities

(10,894

)

(2,673

)

Net cash provided by operating activities

75,070

52,776

INVESTING ACTIVITIES:

Purchases of investments

(89,354

)

(35,931

)

Sales of investments

4,539

Maturities of investments

62,670

39,180

Purchases of property and equipment

(13,120

)

(18,310

)

Capitalized software development costs

(1,062

)

(965

)

Net cash used in investing activities

(36,327

)

(16,026

)

FINANCING ACTIVITIES:

Proceeds from line of credit

143,000

Proceeds from exercise of stock options

12,621

19,478

Taxes paid related to net settlement of restricted stock awards

(17,080

)

(4,893

)

Net cash provided by (used in) financing activities

(4,459

)

157,585

Increase in cash and cash equivalents

34,284

194,335

Cash and cash equivalents—Beginning of period

437,353

130,876

Cash and cash equivalents—End of period

$

471,637

$

325,211

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

March 31,

2021

2020

Net income

$

22,642

$

24,057

Add back:

Depreciation and amortization

10,011

6,477

Stock-based compensation

52,354

22,965

Interest expense (income), net

45

(817

)

Benefit from income taxes

(14,550

)

(13,708

)

Adjusted EBITDA

$

70,502

$

38,974

Three Months Ended

March 31,

2021

2020

GAAP net income

$

22,642

$

24,057

Add back (deduct):

Stock-based compensation expense

52,354

22,965

Adjustment for income taxes

(5,007

)

(3,653

)

Non-GAAP net income

$

69,989

$

43,369

GAAP diluted EPS

$

0.45

$

0.50

Non-GAAP diluted EPS

$

1.41

$

0.90

Weighted average shares outstanding—diluted

49,792

48,313

View source version on businesswire.com: https://www.businesswire.com/news/home/20210510005294/en/

Contacts

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