The Trade Desk Reports Fourth Quarter and Fiscal Year 2023 Financial Results
“Once again
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
|
Three Months Ended
|
|
Year Ended
|
||||||||||||
|
|
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
-
Institutional Investor Awards - Most
-
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 endedDecember 31, 2023 , at an average repurchase price of$63.87 . As ofDecember 31, 2023 , the Company had$53 million available and authorized for repurchases.
-
The Company repurchased approximately
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
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 at2:00 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 outsidethe 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). Outsidethe United States , please dial 1-919-882-2331 (replay code: 49704). The audio replay will be available via telephone untilFebruary 22, 2024 .
Share Repurchase Program
The Company also announced that its board of directors approved an additional
About
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
CONSOLIDATED STATEMENTS OF OPERATIONS (Amounts in thousands, except per share amounts) (Unaudited) |
|||||||||||||||
|
Three Months Ended
|
|
Year Ended
|
||||||||||||
|
|
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: |
STOCK-BASED COMPENSATION EXPENSE (Amounts in thousands) (Unaudited) |
|||||||||||
|
Three Months Ended
|
|
Year Ended
|
||||||||
|
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 |
|||||||||||
CONSOLIDATED BALANCE SHEETS (Amounts in thousands) (Unaudited) |
|||||
|
As of
|
|
As of
|
||
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 |
CONSOLIDATED STATEMENTS OF CASH FLOWS (Amounts in thousands) (Unaudited) |
|||||||
|
Year Ended |
||||||
|
|
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
|
|
Year Ended
|
||||||||||||
|
|
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
|
|
Year Ended
|
||||||||||||
|
|
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
Manager, Investor Relations
ir@thetradedesk.com
Media
VP, Communications
melinda.zurich@thetradedesk.com
Source: