Adjusted EBITDA for Q1 2024 was $162 million, representing a margin of 33%.
The company repurchased 1.5 million shares for $125 million in Q1 2024.
Free cash flow for Q1 2024 was $176 million.
Cash, cash equivalents, and short-term investments ended Q1 at $1.4 billion, with no debt on the balance sheet.
Q2 revenue is projected to be at least $575 million, approximately 24% growth year-over-year, with adjusted EBITDA expected to be about $223 million.
Business Performance and Strategy
The Trade Desk outpaced the digital advertising industry for consecutive years.
CTV remains the fastest-growing channel for The Trade Desk.
The company has seen strong growth in Retail Media and is winning shopper marketing budgets.
UID2 and Kokai platform innovations are driving growth and market differentiation.
International growth outpaced North America for the fifth consecutive quarter.
The company continues to invest in sales, marketing, and platform operations for long-term growth.
Market and Industry Insights
Over 90% of the Ad Age Top 200 advertisers have run campaigns on The Trade Desk platform in the last 12 months.
Industry giants like Disney, NBCU, Walmart, Amazon, Roku, and LG Electronics are deepening their pivots into CTV, many in partnership with The Trade Desk.
The open Internet is being revalued due to advancements in identity and authentication, with UID2 playing a key role.
There is a shift in advertising spending towards the open Internet, away from walled gardens like Meta and Google.
The Trade Desk’s platform, Kokai, introduced innovations such as a curated marketplace for premium Internet content and new audience-based buying approaches.
Challenges and Opportunities
The advertising industry is in a state of transition, driven by conflicts between major tech companies and governments, creating opportunities for The Trade Desk.
AI and new data-driven capabilities are enhancing programmatic advertising, with The Trade Desk deploying AI since 2016.
The company is well-positioned to take advantage of the nearly $1 trillion advertising TAM due to its scalable platform and industry-leading innovations.
Question and Answer
Connected TV and Programmatic Advertising
Question
How is The Trade Desk positioned in the current landscape of connected TV (CTV) advertising, and what is the company’s strategy to seize the growing opportunity?
Answer
The Trade Desk has observed a significant shift towards CTV and programmatic advertising, with major players like Disney, Roku, and NBC embracing programmatic solutions and ad-supported models.
The company’s partnerships with Disney+, Roku, and its Unified ID 2.0 (UID2) initiative have solidified its position as a leader in the CTV advertising space.
The increasing supply of CTV inventory and the adoption of UID2 are creating a buyer’s market, where advertisers can be more selective and data-driven in their ad purchases.
Amazon Prime Video Ad-Supported Offering
Question
How does the recent launch of Amazon Prime Video’s ad-supported offering impact The Trade Desk and the CTV advertising market?
Answer
The Trade Desk does not currently buy Amazon Prime Video inventory, as it is only available through Amazon’s self-serve platform.
The company highlights potential challenges related to Amazon’s objectivity, as it both sells ad inventory and operates a demand-side platform (DSP).
The Trade Desk believes that Amazon may eventually make its inventory available to other DSPs and adopt UID2, which would benefit the CTV advertising ecosystem.
Cookie Deprecation and UID2.0 Adoption
Question
What are The Trade Desk’s thoughts on the recent delay in third-party cookie deprecation, and how does it impact the industry and UID2.0 adoption?
Answer
The Trade Desk anticipated the delay in cookie deprecation and believes it provides the open Internet with more time to adopt alternatives like UID2.0.
The company does not expect the delay to slow down UID2.0 adoption, as the industry recognizes the need for a privacy-focused identity solution.
Deeper Partnership with Roku
Question
Can you discuss the significance of the expanded partnership with Roku and its potential impact on CTV advertising volume for The Trade Desk?
Answer
The partnership with Roku, a key premium CTV publisher, is expected to lead to increased CTV advertising volume for The Trade Desk.
Key aspects of the partnership include the adoption of UID2, The Trade Desk’s role as a strategic demand partner, access to Roku’s ACR data, and biddable inventory.
Expanded OpenPath Partnership with Disney
Question
What are the details and implications of the expanded OpenPath partnership with Disney’s streaming properties?
Answer
OpenPath is a solution that provides a direct, transparent supply path between The Trade Desk and premium publishers like Disney, ensuring better visibility and efficiency in the ad auction process.
The partnership with Disney allows for 100% visibility into the auction process and the use of UID2, contributing to a more addressable and transparent CTV advertising ecosystem.
Social Video and CTV Advertising
Question
How does the rise of social video platforms impact CTV advertising, and does it influence the adoption of data-driven solutions in the CTV market?
Answer
The Trade Desk focuses on the premium side of the Internet, where advertisers seek to associate their brands with high-quality content and ensure better ad visibility.
While social video platforms may compete for ad dollars, the company believes that the majority of growth will occur on the premium side of the Internet, driven by data-driven solutions and a focus on brand safety.
CTV Full Funnel and TAM Expansion
Question
How does The Trade Desk’s expansion into bottom-of-the-funnel advertising through partnerships with retailers and CTV device manufacturers contribute to the company’s growth in the CTV market?
Answer
The company acknowledges that its full-funnel advertising capabilities, including bottom-of-the-funnel solutions, have contributed to its growth in the CTV market.
Ad Category Mix and CTV Initiatives
Question
Why has the mix of ad categories across The Trade Desk’s platform remained relatively unchanged, with video not seeing a significant increase despite CTV initiatives?
Answer
The company does not focus extensively on measuring ad category mix, as its primary interest lies in overall growth and the success of its initiatives across the board.
Small fluctuations in the mix of ad categories can be influenced by factors such as the definition of categories and the viewing habits of consumers.
Regulatory Scrutiny and Advertiser Sentiment
Question
Has the increasing regulatory scrutiny of Google led to a notable shift in ad budgets towards The Trade Desk, and how does advertiser sentiment towards data ownership and transparency impact the company’s growth?
Answer
While it is difficult to quantify the exact impact of regulatory scrutiny on ad budget shifts, The Trade Desk has observed a growing sentiment among advertisers towards data ownership and transparency.
Advertisers are increasingly seeking alternatives to Google and other walled garden platforms, and The Trade Desk’s open and transparent approach resonates with these concerns.
Importance of a Unified Currency in CTV Advertising
Question
As the CTV advertising landscape becomes more complex, how important is it for advertisers to have a unified currency and automated processes to navigate the evolving market?
Answer
The proliferation of CTV apps and ad inventory necessitates a data-driven and automated approach to advertising, with a focus on reaching target audiences and managing frequency across multiple platforms.
A unified currency and persistent identity solution like UID2.0 are crucial for enabling programmatic buying and ensuring efficiency and effectiveness in CTV advertising.
