Press release

The Trade Desk Reports First Quarter Financial Results

Sponsored by Businesswire

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,

“Thanks to our innovative platform and our commitment to objectivity and
transparency in digital advertising, we delivered outstanding
performance in the first quarter, again surpassing our expectations. We
continued to add new advertisers and agencies to our platform and
existing customers increased their spend. In Q1, we continued to develop
closer relationships with the biggest brands in the world. Over half of
the companies in the S&P 500 have run campaigns on our platform. We are
executing well. For the quarter, revenue was $121 million, up 41% from a
year ago and adjusted EBITDA increased to a Q1 record of $24.7 million,”
said Founder and CEO of The Trade Desk, Jeff Green. “Spend growth came
in channels key to our business such as Mobile, Video, Connected TV, and
Audio. Data spend again grew about 2x our business. We continued to
invest in technology infrastructure, product development, and
international expansion. These areas of investment are critical to
gaining additional market share.”

First Quarter 2019 Financial Highlights:

The following table summarizes our consolidated financial results for
the quarters ended March 31, 2019 and 2018 ($ in millions, except per
share amounts):

    Three Months Ended
March 31,
2019   2018
GAAP Results
Revenue $ 121.0 $ 85.7
Increase in revenue year over year 41 % 61 %
Net Income $ 10.2 $ 9.1
Diluted EPS $ 0.21 $ 0.20
Non-GAAP Results
Adjusted EBITDA $ 24.7 $ 18.9
Adjusted EBITDA Margin 20 % 22 %
Non-GAAP Net Income $ 23.1 $ 15.3
Non-GAAP Diluted EPS $ 0.49 $ 0.34

First Quarter and Recent Business Highlights

  • Continued Omnichannel Spend Growth: Omnichannel solutions
    remain a strategic focus for The Trade Desk, as the industry continues
    shifting toward transparency and programmatic buying. Specific channel
    highlights include:

    • Total Mobile (in-app, video, and web) was 45% of gross spend for
      the quarter, highlighting the growing scale and importance of this
      channel to advertisers
    • Mobile Video spend grew about 60% from Q12018 to Q12019
    • Mobile In-App spend grew about 60% from Q12018 to Q12019
  • Newer Channels Delivering Strong Spend Growth: Two of our
    newest and most promising channels, Connected TV and audio, grew
    multiples faster than The Trade Desk’s larger and more mature channels:

    • Connected TV spend grew over 3x from Q12018 to Q12019
    • Audio spend grew over 270% from Q12018 to Q12019
  • Strong Customer Retention: Customer retention remained over 95%
    during the quarter, as it has for the previous 21 quarters.
  • Officially Launched a Programmatic Ad Buying Platform in China:
    Programmatic offering allows marketers ability to reach millions of
    connected consumers in China by providing:

    • The ability to use their first-party data with The Trade Desk’s
      trusted platform.
    • Partnerships with China’s premium media companies, including Baidu
      Exchange Services, iQIYI, Tencent Marketing Solution, and Youku.
    • Integrations with leading data, brand safety, and anti-fraud
      partners to ensure their campaigns reach scale and performance.
  • New Products and Features: During the quarter, The Trade
    Desk released many new product features and enhancements to its
    platform, including:

    • Integration with On-Target Percentage (OTP) metrics in the
      Connected TV environment on Campaign and Ad Group dashboards,
      bringing valuable insights front and center when optimizing to an
      OTP goal.
    • Updates to Audience Predictor which enhance lookalike modeling
      tools to find and target undiscovered audiences based upon
      first-party data. Recent improvements include improved sampling
      rates, faster audience creations, inclusion of CPM segments,
      percent-of-media segments, and the ability to exclude audiences.
  • Industry Awards: The Trade Desk won for Best Demand-Side
    Technology in the inaugural AdExchanger Awards and was named Best
    Demand Side Platform at the ClickZ Marketing Technology Awards 2019.
    The Trade Desk was also ranked #2 on the 2019 Best Workplaces in
    Technology (small and medium companies) by Fortune.

Second Quarter and Revised Full Year 2019

Mr. Green added: “In 2019, we are off to a great start. The biggest
brands in the world continue to shift their advertising spending to
programmatic through our platform. As a result, we are raising our 2019
revenue guidance to be at least $645 million. At the same time, we are
continuing to make large investments in areas critical to our future. We
now expect our adjusted EBITDA to be $188.5 million for 2019. The
secular tailwind of programmatic is strong. Our focus is on gaining
share and revenue growth, as this will ultimately maximize profitability
over the long-term.”

The Trade Desk is providing its financial targets for the second quarter
of 2019 and revised targets for its fiscal year 2019. The Company’s
financial targets are as follows:

Second Quarter 2019:

  • Revenue of $154 million
  • Adjusted EBITDA of $46 million

Full Year 2019

  • Revenue of at least $645 million, revised from $637 million
  • Adjusted EBITDA of $188.5 million or about 29% of revenue, revised
    from $182 million

Reconciliation of adjusted EBITDA guidance to the closest corresponding
U.S. GAAP measure 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

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.

First Quarter Financial Results Webcast and Conference Call Details

  • When: May 9, 2019 at 5:00 A.M. Pacific Time (8:00 A.M. Eastern
  • Webcast: A live webcast of the call can be accessed from the
    Investor Relations section of The Trade Desk’s website at
    Following the call, a replay will be available on the company’s
  • Dial-in: To access the call via telephone in North America,
    please dial 877-407-0782. For callers outside the United States,
    please dial 1-201-689-8567. Participants should reference the
    conference call ID “The Trade Desk Call” 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: 47139).
    Outside the United States, please dial 1-919-882-2331 (replay code:
    47139). The audio replay will be available via telephone until May 16,

The Trade Desk, Inc. uses its Investor Relations website (,
its Twitter feed (@TheTradeDesk), LinkedIn page (,
and Facebook page (,
and Jeff Green’s Twitter feed (@jefftgreen) and LinkedIn profile (
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

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 or
follow us on FacebookTwitterLinkedIn
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 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
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.

(Amounts in thousands, except per share amounts)
Three Months Ended
March 31,
2019 2018
Revenue $ 120,987 $ 85,668
Operating expenses:
Platform operations 33,651 22,897
Sales and marketing 22,737 16,030
Technology and development 25,312 17,701
General and administrative   33,617   19,110
Total operating expenses   115,317   75,738
Income from operations 5,670 9,930
Total other expense, net   333   700
Income before income taxes 5,337 9,230
Provision for (benefit from) income taxes   (4,814 )   160
Net income $ 10,151 $ 9,070
Earnings per share:
Basic $ 0.23 $ 0.22
Diluted $ 0.21 $ 0.20
Weighted average shares outstanding:
Basic   43,906   41,629
Diluted   47,314   44,543
(Amounts in thousands)
Three Months Ended
March 31,
2019 2018
Platform operations $ 1,056 $ 796
Sales and marketing 3,227 1,965
Technology and development 4,936 2,358
General and administrative   6,650   2,164
Total $ 15,869 $ 7,283
(Amounts in thousands)
As of As of

March 31,

December 31,

Current assets:
Cash and cash equivalents $ 143,841 $ 207,232
Short-term investments 74,101
Accounts receivable, net 707,740 834,764
Prepaid expenses and other current assets   18,927   14,527
Total current assets 944,609 1,056,523
Property and equipment, net 36,120 33,046
Operating lease assets 73,508
Deferred income taxes 8,460 8,460
Other assets, non-current   19,680   19,843
Total assets $ 1,082,377 $ 1,117,872
Current liabilities:
Accounts payable $ 529,594 $ 669,147
Accrued expenses and other current liabilities 39,218 44,844
Operating lease liabilities   14,448  
Total current liabilities 583,260 713,991
Operating lease liabilities, non-current 65,168
Other liabilities, non-current   4,551   9,314
Total liabilities   652,979   723,305
Stockholders’ equity:
Preferred stock
Common stock
Additional paid-in capital 295,127 270,447
Retained earnings   134,271   124,120
Total stockholders’ equity   429,398   394,567
Total liabilities and stockholders’ equity $ 1,082,377 $ 1,117,872
(Amounts in thousands)
Three Months Ended March 31,
2019 2018
Net income $ 10,151 $ 9,070

Adjustments to reconcile net income to net cash

provided by operating activities:

Depreciation and amortization 4,456 2,251
Stock-based compensation 15,869 7,283
Noncash lease expense 4,421
Other 603 359
Changes in operating assets and liabilities:
Accounts receivable 127,232 42,387
Prepaid expenses and other assets (6,580 ) (775 )
Accounts payable (138,886 ) (49,698 )
Accrued expenses and other liabilities (4,489 ) 930
Operating lease liabilities   (3,066 )  
Net cash provided by operating activities   9,711   11,807
Purchases of property and equipment (6,085 ) (1,798 )
Capitalized software development costs (1,417 ) (858 )
Purchases of investments   (73,950 )  
Net cash used in investing activities   (81,452 )   (2,656 )
Repayment on line of credit (27,000 )
Payment of debt financing costs (6 )
Proceeds from exercise of stock options 9,502 1,212
Taxes paid related to net settlement of restricted stock awards   (1,146 )   (361 )
Net cash provided by (used in) financing activities   8,350   (26,149 )
Decrease in cash and cash equivalents (63,391 ) (16,998 )
Cash and cash equivalents—Beginning of period   207,232   155,950
Cash and cash equivalents—End of period $ 143,841 $ 138,952

Non-GAAP Financial Metrics
(Amounts in thousands, except per
share amounts)

The following tables show the Company’s GAAP financial metrics
reconciled to non-GAAP financial metrics included in this release.

    Three Months Ended
March 31,
2019   2018
Net income $ 10,151 $ 9,070
Add back:
Depreciation and amortization expense 4,456 2,251
Stock-based compensation expense 15,869 7,283
Interest expense (income), net (997 ) 156
Provision for (benefit from) income taxes   (4,814 )   160
Adjusted EBITDA $ 24,665 $ 18,920
    Three Months Ended
March 31,
2019   2018
GAAP net income $ 10,151 $ 9,070
Add back (deduct):
Stock-based compensation expense 15,869 7,283
Adjustment for income taxes   (2,917 )   (1,026 )
Non-GAAP net income $ 23,103 $ 15,327
GAAP diluted EPS $ 0.21 $ 0.20
Non-GAAP diluted EPS $ 0.49 $ 0.34
Weighted average shares outstanding—diluted   47,314   44,543