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Share Name | Share Symbol | Market | Type |
---|---|---|---|
The Trade Desk Inc | NASDAQ:TTD | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.73 | 0.83% | 88.85 | 88.50 | 89.12 | 90.69 | 87.77 | 89.27 | 3,778,002 | 01:00:00 |
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:
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:
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
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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