The Trade Desk Reports Second Quarter Financial Results

LOS ANGELES, Aug. 10, 2017 (GLOBE NEWSWIRE) -- The Trade Desk, Inc. (NASDAQ:TTD), a provider of a global technology platform for buyers of advertising, today announced financial results for its second quarter ended June 30, 2017. 

“The programmatic revolution continued to gain momentum and our success was driven by our commitment to be an objective, independent, data-driven software platform for our customers to unleash the power of programmatic advertising through all channels and devices that touch the consumer,” said Jeff Green, founder and CEO of The Trade Desk. “A great start in the first half of the year points to a strong 2017 for our business. We’ve broken our previous revenue record and surpassed our own expectations during the second quarter with revenue of $72.8 million, which is a 54% increase year over year and we generated $10.7 million in cash from operations. During the quarter, our momentum continued with strong customer wins, international growth was robust again, mobile continued to lead our growth, along with strong results in native and audio. We also are excited to have opened our newest office in Shanghai.”

Second Quarter 2017 Financial Highlights:

The following table summarizes our consolidated financial results for the quarters ended June 30, 2017 and 2016 ($ in millions, except per share amounts)

 Three Months Ended
 June 30,
 2017 2016
GAAP Results   
Revenue$72.8  $47.2 
Increase in revenue year over year 54%  93%
Net Income$18.8  $7.6 
Diluted EPS(1)$0.43  $0.15 
Non-GAAP Results   
Adjusted EBITDA$25.3  $15.7 
Adjusted EBITDA Margin 35%  33%
Non-GAAP Net Income(1)$23.0  $8.2 
Non-GAAP Diluted EPS(1)$0.52  $0.22 
(1) Attributable to common stockholders-diluted.   

Second Quarter and Recent Business Highlights Include:

  • Continued Omni-channel Growth: Omni-channel solutions remain a strategic focus for The Trade Desk as the industry continues shifting toward transparency and programmatic buying.  Specific channel highlights include:
    - Mobile (In-App, Video and Web) increased to over a third of gross spend for the quarter highlighting the growing importance of this channel to advertisers.
    - Native spend was very strong in Q2 surpassing all Native spend in 2016, which was launched in Q2 2016.
    - Mobile In-App grew 87% from Q2 2016 to Q2 2017.
    - Mobile Video grew 171% from Q2 2016 to Q2 2017.
    - Connected TV grew 167% from Q2 2016 to Q2 2017.
  • Strong Customer Retention: Customer retention remained over 95% during the quarter, as it has for the previous 14 quarters.
  • New Products and Features: The Trade Desk recently released many new product features and enhancements to its platform including:
    - Introduction of “My Reports”, our best-in-class reporting stack, which gives users an even-easier way to garner campaign insights. Enhanced customization capabilities let users include or exclude metrics from standard templates or build their own from scratch. Everything that is reported can be optimized in the platform to maximize performance.
    - Enhanced the user experience with Private Marketplace Troubleshooting tools in the UI, which exposes common reasons PMP deals are excluded from bidding, previously only available via a custom report.
    - An integration with Placed that allows customers to easily measure how their digital advertising drives in-store foot traffic.
  • Brand Safety:
    - Expanded our integration with Integral Ad Science to offer reporting in the UI for viewability, suspicious activity and brand safety.  The Trade Desk continues to lead the industry in offering some of the most “brand safe” and “premium inventory” through its platform.  
    - A commitment to the IAB Tech Lab’s Ads.txt initiative, the new open standard and technical specification for increasing transparency across the digital programmatic ecosystem.
  • Global Footprint Expansion: In the second quarter of 2017, The Trade Desk broadened its coverage with the opening of its 20th office in Shanghai, China.

Third Quarter and Revised Full Year 2017 Outlook:

Mr. Green added, “We continue to see momentum as ad dollars shift to programmatic, and as such, we now expect revenue to be at least $303 million for the full year. We continue to make aggressive, yet prudent investments in our business in our key growth areas, such as mobile, video, connected TV and expanding our existing global offices, and we now expect our adjusted EBITDA for 2017 to be $88 million.”

The Trade Desk is providing its financial targets for the third quarter of 2017 and revised targets for its fiscal year 2017. The Company’s financial targets are as follows:

Third Quarter 2017:

  • Revenue of $76 million
  • Adjusted EBITDA of $21 million

Full Year 2017

  • Revenue at least $303 million, revised from $291 million
  • Adjusted EBITDA of $88 million, revised from $78 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 this 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 non-GAAP financial measures that supplement the Condensed Consolidated Statements of Operations of The Trade Desk, Inc. (the Company) prepared under generally accepted accounting principles (GAAP). These non-GAAP financial measures adjust the Company's actual results prepared under GAAP by excluding charges for depreciation and amortization, stock-based compensation, interest expense, secondary offering costs and changes in fair value of preferred stock warrant liabilities. A tax rate on the tax deductible portion of the stock-based compensation expense approximating 40% has been used in the computation of non-GAAP Net loss and non-GAAP diluted EPS attributed to common stockholders. Since the other excluded charges are non-taxable, a tax effect for those charges was not included. Also included in these non-GAAP financial measures are adjustments to diluted earnings per share amounts, as applicable, to reflect the conversion upon the Company’s IPO of all then-outstanding shares of convertible preferred stock into one third of one share of common stock using the as-if-converted method, as of January 1, 2016, or the date of issuance, if later. 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 Condensed 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.

Second Quarter Fiscal Year 2017 Results Webcast and Conference Call Details

  • When: August 10, 2017 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  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 866-682-6100.  For international callers, please dial 1-862-255-5401.  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 North America, please dial 1-877-481-4010 (replay code: 19256).  International callers, please dial 1-919-882-2331 (replay code: 19256). The audio replay will be available via telephone until September 10, 2017.

Date for 2017 Investor Day

The Trade Desk today also announced that it plans to host an Investor Day on Wednesday, October 4, 2017 in New York City.  At the event, The Trade Desk management team will provide an overview of the company's global strategy, key business and product initiatives, and financial objectives.

A live webcast and replay of the presentation will be available on The Trade Desk’s investor website at

Professional investors and financial analysts interested in attending the event should contact The Trade Desk investor relations. Advanced registration is required.

About The Trade Desk

The Trade Desk™ (Nasdaq:TTD) is a technology company that empowers buyers of advertising. Through its self-service, cloud-based platform, ad buyers can create, manage, and optimize more expressive data-driven digital advertising campaigns across ad formats, including display, video, audio, native and social, on a multitude of devices, such as computers, mobile devices, and connected TV. 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.

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 Six Months Ended
  June 30, June 30,
  2017 2016 2017 2016
Revenue $72,804  $47,182 $126,156  $77,560 
Operating expenses:        
Platform operations  15,151   8,682  27,700   16,195 
Sales and marketing  14,166   11,251  26,642   19,682 
Technology and development  12,135   5,763  22,596   10,402 
General and administrative  11,658   6,452  27,588   12,851 
Total operating expenses  53,110   32,148  104,526   59,130 
Income from operations  19,694   15,034  21,630   18,430 
Total other expense, net  1,303   1,260  2,095   6,524 
Income before income taxes  18,391   13,774  19,535   11,906 
Provision for (benefit from) income taxes  (458)  6,176  (4,223)  5,348 
Net income $18,849  $7,598 $23,758  $6,558 
Net income (loss) attributable to common stockholders $18,849  $2,392 $23,758  $(40,651)
Earnings (loss) per share:        
Basic $0.47  $0.22 $0.60  $(3.74)
Diluted $0.43  $0.15 $0.54  $(3.74)
Weighted average shares outstanding:        
Basic  40,046   10,893  39,609   10,871 
Diluted  43,944   15,535  43,752   10,871 


(Amounts in thousands)
  Three Months Ended Six Months Ended
  June 30, June 30,
  2017 2016 2017 2016
Platform operations $496 $24 $725 $39
Sales and marketing  1,238  67  1,777  117
Technology and development  1,326  74  1,991  114
General and administrative  1,131  68  2,020  122
Total $4,191 $233 $6,513 $392


(Amounts in thousands)
  As of As of
  June 30, December 31,
  2017 2016
Current assets:    
Cash $115,859 $133,400 
Accounts receivable, net  382,209  377,240 
Prepaid expenses and other current assets  17,250  5,763 
Total current assets  515,318  516,403 
Property and equipment, net  17,144  14,779 
Deferred taxes, net  1,778  1,778 
Other assets, non-current  7,018  4,636 
Total assets $541,258 $537,596 
Current liabilities:    
Accounts payable $290,399 $321,163 
Accrued expenses and other current liabilities  21,110  22,973 
Total current liabilities  311,509  344,136 
Debt, net  27,000  25,847 
Other liabilities, non-current  4,520  3,233 
Total liabilities  343,029  373,216 
Stockholders' equity:    
Preferred stock  -  - 
Common stock  -  - 
Additional paid‑in capital  189,289  179,198 
Retained earnings (accumulated deficit)  8,940  (14,818)
Total stockholders' equity  198,229  164,380 
Total liabilities and stockholders' equity $541,258 $537,596 


(Amounts in thousands)
  Six Months Ended
  June 30,
  2017 2016
Net income $23,758  $6,558 
Adjustments to reconcile net income to net cash provided by (used in)    
operating activities:    
Depreciation and amortization  3,189   1,653 
Stock‑based compensation  6,513   392 
Change in fair value of preferred stock warrant liabilities  -   4,805 
Bad debt expense  3,460   296 
Other  (968)  315 
Changes in operating assets and liabilities:    
Accounts receivable  (6,853)  (45,054)
Prepaid expenses and other assets  (11,643)  (2,112)
Accounts payable  (28,527)  55,383 
Accrued expenses and other liabilities  (900)  410 
Net cash provided by (used in) operating activities  (11,971)  22,646 
Purchases of property and equipment  (6,707)  (2,036)
Capitalized software development costs  (1,811)  (1,092)
Net cash used in investing activities  (8,518)  (3,128)
Proceeds from line of credit  -   60,847 
Repayment on line of credit  -   (20,000)
Repayment of term debt  -   (30,000)
Payment of debt financing costs  (120)  (976)
Payment of financing obligations  (321)  (135)
Proceeds from issuance of Series C convertible preferred stock  -   60,000 
Repurchase of preferred stock and common stock  -   (54,000)
Proceeds from exercise of stock options  1,124   185 
Proceeds from employee stock purchase plan  2,294   - 
Taxes paid related to net settlement of restricted stock awards  (29)  - 
Payment of stock repurchase costs  -   (155)
Payment of Series C convertible preferred stock offering costs  -   (129)
Payment of offering costs—initial public offering  -   (1,592)
Net cash provided by financing activities  2,948   14,045 
Increase (decrease) in cash  (17,541)  33,563 
Cash—Beginning of period  133,400   4,047 
Cash—End of period $115,859  $37,610 

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 Six Months Ended
  June 30, June 30,
  2017 2016 2017 2016
Net income $18,849  $7,598 $23,758  $6,558
Add back (deduct):        
Depreciation and amortization expense  1,696   834  3,189   1,653
Stock-based compensation expense  4,191   233  6,513   392
Interest expense  413   482  777   1,317
Secondary offering costs  583   -  1,523   -
Change in fair value of preferred stock warrant liabilities  -   422  -   4,805
Provision for (benefit from) income taxes  (458)  6,176  (4,223)  5,348
Adjusted EBITDA $25,274  $15,745 $31,537  $20,073


  Three Months Ended Six Months Ended
  June 30, June 30,
  2017 2016 2017 2016
GAAP net income (loss) attributable to common stockholders-diluted $18,849  $2,392  $23,758  $(40,651)
Add back (deduct):        
Stock-based compensation expense  4,191   233   6,513   392 
Secondary offering costs  583   -   1,523   - 
Premium on repurchase of convertible preferred stock  -   -   -   47,209 
Income attributable to convertible preferred stock  -   5,206   -   - 
Change in fair value of preferred stock warrant liabilities  -   422   -   4,805 
Adjustment for income taxes  (602)  (6)  (926)  (11)
Non-GAAP net income attributable to common stockholders-diluted $23,021  $8,247  $30,868  $11,744 
GAAP weighted average shares outstanding-diluted  43,944   15,535   43,752   10,871 
Add back:        
Convertible preferred stock  -   22,079   -   22,139 
Dilutive stock options to purchase common stock  -   -   -   4,667 
Dilutive stock warrants  -   448   -   511 
Non-GAAP weighted average shares outstanding-diluted  43,944   38,062   43,752   38,188 
GAAP diluted EPS attributable to common stockholders $0.43  $0.15  $0.54  $(3.74)
Non-GAAP diluted EPS attributable to common stockholders $0.52  $0.22  $0.71  $0.31 


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