The Trade Desk $TTD 3Q21 Earnings 💪🏻
- Rev $301m +39% ↗️
- Adj EBITDA $123m +59% ↗️ margin 41%⭐️ +503bps ✅
- EBIT $80m +88% 🚀 margin 27% +692bps ✅
- NG Net Income $89m +42% ↗️ margin 30%⭐️ +66bps ✅
- OCF $215m -9% ↘️ margin 27% -1916bps ↘️
- Customer Retention >95% ➡️7Y 💪🏻
- Rev $301m +39% ↗️
- Adj EBITDA $123m +59% ↗️ margin 41%⭐️ +503bps ✅
- EBIT $80m +88% 🚀 margin 27% +692bps ✅
- NG Net Income $89m +42% ↗️ margin 30%⭐️ +66bps ✅
- OCF $215m -9% ↘️ margin 27% -1916bps ↘️
- Customer Retention >95% ➡️7Y 💪🏻
1 | 🗳 Adjusting for US Election Spend
Rev Growth (3Q)
- 3Q Rev $301m +39% ↗️
- Excl. US elections +47% ↗️↗️
Rev Growth (4Q forecast)
- 4Q Rev $388m +21% ↗️
- Excl. US elections +33% ↗️↗️
Rev Growth (3Q)
- 3Q Rev $301m +39% ↗️
- Excl. US elections +47% ↗️↗️
Rev Growth (4Q forecast)
- 4Q Rev $388m +21% ↗️
- Excl. US elections +33% ↗️↗️
2 | 5 Major Highlights ⭐️
1) Video (incl CTV) ~40% of biz, growing fast
2) INT growing faster than NA
3) Launch of Walmart DSC
4) UID2 momentum & reaching critical scale
5) Resilient mobile biz (~40%), no material impact from iOS changes.
1) Video (incl CTV) ~40% of biz, growing fast
2) INT growing faster than NA
3) Launch of Walmart DSC
4) UID2 momentum & reaching critical scale
5) Resilient mobile biz (~40%), no material impact from iOS changes.
3 | Apple recent iOS changes - No material impact 💪🏻
“As we predicted, the most recent iOS changes have had no material impact on our business and we expect that to remain the case.”
“As we predicted, the most recent iOS changes have had no material impact on our business and we expect that to remain the case.”
4 | Tipping Point in CTV
“…brand leaders like Anheuser-Busch, Volkswagen, and Colgate-Palmolive, and unprompted, those advertisers said they believe that the majority of TV advertising will be executed programmatically on CTV within three years.”
“…brand leaders like Anheuser-Busch, Volkswagen, and Colgate-Palmolive, and unprompted, those advertisers said they believe that the majority of TV advertising will be executed programmatically on CTV within three years.”
5 | CTV Intent is Crucial & Valuable
"the digital audience we see tends to be stickier because they're really seeking out the content specifically. There's deeper engagement versus someone sitting back on the couch and watching it."
"the digital audience we see tends to be stickier because they're really seeking out the content specifically. There's deeper engagement versus someone sitting back on the couch and watching it."
6 | Strong Demand for CTV
“…demand for CTV continues to outpace all other channels both inside & outside North America. I don't see that trend changing for the foreseeable future…content providers are working with us directly, …have access to premium CTV inventory at scale.”
“…demand for CTV continues to outpace all other channels both inside & outside North America. I don't see that trend changing for the foreseeable future…content providers are working with us directly, …have access to premium CTV inventory at scale.”
7 | Google removing 3P cookies in 2023
“Google has announced that they intend to get rid of third-party cookies in 2023.
“…strategic mistake for Google…their policy changes have created collaboration among the open Internet that probably wouldn't have happened otherwise.”
“Google has announced that they intend to get rid of third-party cookies in 2023.
“…strategic mistake for Google…their policy changes have created collaboration among the open Internet that probably wouldn't have happened otherwise.”
8 | Doing well irrespective of Google & not dependent 💪🏻
“…we expect to continue to do very well regardless of Google's policy choices.
A very small percentage of our business runs through Google's Ad Exchange, and we are not dependent on Google for our business.”
“…we expect to continue to do very well regardless of Google's policy choices.
A very small percentage of our business runs through Google's Ad Exchange, and we are not dependent on Google for our business.”
9 | Unified ID (UID2) - Belongs to the Internet
“…UID, this is not a Trade Desk initiative anymore. While we may have instigated it, we've open sourced it…this is bigger than us.
“…started with us but it belongs to the Internet today.”
“…UID, this is not a Trade Desk initiative anymore. While we may have instigated it, we've open sourced it…this is bigger than us.
“…started with us but it belongs to the Internet today.”
10 | Accelerating UID2 Adoption 📈
“…many of the largest advertisers on our platform are now transacting on UID 2 or are in the process of implementing it. …Omnicom, Publicis, IPG and even independent agencies like Horizon have also adopted UID 2.”
“…many of the largest advertisers on our platform are now transacting on UID 2 or are in the process of implementing it. …Omnicom, Publicis, IPG and even independent agencies like Horizon have also adopted UID 2.”
11 | Walmart DSC - Gone First to close the loop
“…it's always best to start with the very biggest in the world…to create this partnership in closing the loop with the biggest retailer in the world.”
“…it's always best to start with the very biggest in the world…to create this partnership in closing the loop with the biggest retailer in the world.”
11 | Walmart DSC (cont’d)
“…Walmart, the biggest has gone first, it is not a surprise that all other retailers all over the world are saying we need to execute the same playbook and we need to do more.”
“…Walmart, the biggest has gone first, it is not a surprise that all other retailers all over the world are saying we need to execute the same playbook and we need to do more.”
11 | Walmart DSC (cont’d)
“the retailers are recognizing that in order to compete with Amazon, they have to put their data to work in a much bigger way and that is to close the loop.”
“the retailers are recognizing that in order to compete with Amazon, they have to put their data to work in a much bigger way and that is to close the loop.”
12 | CTV, NA & International
Chanel Mix
1) 40% Video (incl CTV) ↗️↗️
2) 40% Mobile
3) Display 15%
4) Audio 5%
Geographical Mix
1) NA ~88% ↗️
2) International ~12% ↗️↗️
Chanel Mix
1) 40% Video (incl CTV) ↗️↗️
2) 40% Mobile
3) Display 15%
4) Audio 5%
Geographical Mix
1) NA ~88% ↗️
2) International ~12% ↗️↗️
13 | International Opportunity 🌏
“…global advertising market today…⅔ is outside of North America.
That's why we invest so heavily in key growth markets globally. In recent months, we've established a presence in markets like India, Italy and the Nordics and Taiwan.”
“…global advertising market today…⅔ is outside of North America.
That's why we invest so heavily in key growth markets globally. In recent months, we've established a presence in markets like India, Italy and the Nordics and Taiwan.”
14 | Large $1T TAM, Long Runway
“digital advertising is still a relatively young industry.”
“an open competitive market for digital advertising is the only way that we build long-term trust of marketers…unlock that $1T industry TAM, the bulk of which will be digital.”
“digital advertising is still a relatively young industry.”
“an open competitive market for digital advertising is the only way that we build long-term trust of marketers…unlock that $1T industry TAM, the bulk of which will be digital.”
15 | Re Lower OCF Margins
➡️ Quarterly volatile. Annual better.
“…would like to remind you that the timing of cash collections and payments can significantly impact cash from operating activities and free cash flow results on a quarterly basis.”
➡️ Quarterly volatile. Annual better.
“…would like to remind you that the timing of cash collections and payments can significantly impact cash from operating activities and free cash flow results on a quarterly basis.”
16 | Improving Work Capital (DSO ⬇️⬇️ > DPO)
“DSOs exiting Q3 were 87 days, down 14 days from a year ago.
DPOs were 73 days, down nine days from a year ago.”
“DSOs exiting Q3 were 87 days, down 14 days from a year ago.
DPOs were 73 days, down nine days from a year ago.”
17 | Strong Balance Sheet - $799m cash, no debt 💪🏻
“Our balance sheet had $799 million in cash, cash equivalents and short-term investments at the end of the quarter. We have no debt on the balance sheet.”
“Our balance sheet had $799 million in cash, cash equivalents and short-term investments at the end of the quarter. We have no debt on the balance sheet.”
18 | $TTD Leader in Gartner Ad Tech Magic Quadrant for 2021
“Leader…Gartner measures all participants across four critical capabilities.
The Trade Desk ranked number one for three of those…going up against…Google and Amazon, it's pretty remarkable to be leading the pack…”
“Leader…Gartner measures all participants across four critical capabilities.
The Trade Desk ranked number one for three of those…going up against…Google and Amazon, it's pretty remarkable to be leading the pack…”
19 | Getting from $1b revenue to $2bn or $5b
Final Thoughts on The Trade Desk $TTD
➡️ Rare combination of a disruptor, top dog with strong management combined with rapid growth, innovation, scale, profitability and vision that continues to execute well. Remains a core and very high conviction position.
➡️ Rare combination of a disruptor, top dog with strong management combined with rapid growth, innovation, scale, profitability and vision that continues to execute well. Remains a core and very high conviction position.
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