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(State or other jurisdiction
of incorporation) |
(Commission
File Number) |
(I.R.S. Employer
Identification No.) |
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Title of each class
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Trading Symbol
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Name of each exchange on which registered
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Emerging growth company
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Item 2.02
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Results of Operations and Financial Condition.
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| Item 5.02 |
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
| Item 9.01 |
Financial Statements and Exhibits. |
| (d) |
The following exhibits are being filed herewith:
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Exhibit No.
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Description
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104
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Cover Page Interactive Data File (formatted as Inline XBRL).
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THE TRADE DESK, INC.
(Registrant)
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Date: May 10, 2023
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By:
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/s/ Blake J. Grayson
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Blake J. Grayson
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Chief Financial Officer
(Principal Financial and Accounting Officer)
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| Exhibit 99.1 |
LOS ANGELES--(BUSINESS WIRE)--May 10, 2023--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, 2023.
“We delivered outstanding performance in the first quarter, once again outpacing the digital advertising market, growing revenue 21% year-over-year to $383 million. Our strong start to the year is testament to the increasing value that marketers place on objective, transparent, data-driven media buying on the open internet,” said Jeff Green, Co-founder and CEO of The Trade Desk. “2023 is already proving to be a pivotal year for our industry. The shift from linear to connected TV continues to accelerate and fully decisioned programmatic will feature more prominently than ever at this year’s upfronts. At the same time, more leading marketers are leveraging new innovations, such as shopper data, to better understand the relationship between campaign activity and consumer action. As The Trade Desk continues to innovate in these and many other areas, we are well positioned to deliver premium value to our clients and gain share.”
First Quarter 2023 Financial Highlights:
The following table summarizes our consolidated financial results for the three months ended March 31, 2023 and 2022 ($ in millions, except per share amounts):
|
|
Three Months Ended |
||||||
|
|
2023 |
|
2022 |
||||
|
GAAP Results |
|
|
|
||||
|
Revenue |
$ |
383 |
|
|
$ |
315 |
|
|
Increase in revenue year over year |
|
21 |
% |
|
|
43 |
% |
|
Net income (loss) |
$ |
9 |
|
|
$ |
(15 |
) |
|
GAAP diluted earnings (loss) per share |
$ |
0.02 |
|
|
$ |
(0.03 |
) |
|
|
|
|
|
||||
|
Non-GAAP Results |
|
|
|
||||
|
Adjusted EBITDA |
$ |
109 |
|
|
$ |
121 |
|
|
Adjusted EBITDA margin |
|
28 |
% |
|
|
38 |
% |
|
Non-GAAP net income |
$ |
114 |
|
|
$ |
105 |
|
|
Non-GAAP diluted earnings per share |
$ |
0.23 |
|
|
$ |
0.21 |
|
First Quarter and Recent Business Highlights:
Chief Financial Officer Transition:
The Company also announced the promotion of Laura Schenkein to Chief Financial Officer, succeeding Blake Grayson, who will be leaving the company for a senior finance role outside the advertising technology industry after a transition period. Ms. Schenkein will assume her new role effective June 1, 2023.
“Blake has been instrumental in scaling and advancing our finance function in a way that has helped us thrive and grow during the unprecedented events of the last three years,” said Mr. Green. “He leaves a very strong foundation for future growth, and I want to thank him for his partnership and support in a seamless transition.”
“Laura Schenkein is a veteran of almost 20 years in finance and investment banking, the last decade of which she has held a series of leadership positions at The Trade Desk,” Mr. Green continued. “She is a trusted advisor to me and other senior leaders at the company, based not only on her unparalleled understanding of the financial dynamics of The Trade Desk, but also the macro-market drivers of our business. I could not be more excited to welcome Laura to our leadership team.”
“I am very grateful for the opportunity to have worked closely with Jeff and the outstanding team at The Trade Desk over the past three years, and I look forward to cheering on the continued success of the company in the years ahead,” said Mr. Grayson.
Financial Guidance:
Second Quarter 2023 outlook summary:
We have not provided an outlook for GAAP Net Income or reconciliation of Adjusted EBITDA guidance to Net Income, the closest corresponding U.S. GAAP measure, because Net Income outlook 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 results.
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 Condensed Consolidated Statements of Operations of The Trade Desk, Inc. (the Company) prepared under generally accepted accounting principles (GAAP). Adjusted EBITDA is earnings before interest expense (income), net; benefit from 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 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.
First Quarter 2023 Financial Results Webcast and Conference Call Details
The Trade Desk, Inc. uses its Investor Relations website (http://investors.thetradedesk.com/), its Twitter feed (@TheTradeDesk), LinkedIn page (https://www.linkedin.com/company/the-trade-desk/), Facebook page (https://www.facebook.com/TheTradeDesk/), Jeff Green’s Twitter feed (@jefftgreen) and LinkedIn profile (https://www.linkedin.com/in/jefftgreen/) 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 webcasts.
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 thetradedesk.com or follow us on Facebook, Twitter, LinkedIn 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 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 Securities and Exchange Commission, including its most recent Form 10-K and any subsequent filings on Forms 10-Q or 8-K, available at www.sec.gov. 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.
|
THE TRADE DESK, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Amounts in thousands, except per share amounts) (Unaudited) |
|||||||
|
|
Three Months Ended |
||||||
|
|
2023 |
|
2022 |
||||
|
Revenue |
$ |
382,803 |
|
|
$ |
315,323 |
|
|
Operating expenses (1): |
|
|
|
||||
|
Platform operations |
|
84,867 |
|
|
|
63,890 |
|
|
Sales and marketing |
|
97,222 |
|
|
|
70,688 |
|
|
Technology and development |
|
93,710 |
|
|
|
71,999 |
|
|
General and administrative |
|
130,312 |
|
|
|
125,799 |
|
|
Total operating expenses |
|
406,111 |
|
|
|
332,376 |
|
|
Loss from operations |
|
(23,308 |
) |
|
|
(17,053 |
) |
|
Total other expense (income), net |
|
(13,700 |
) |
|
|
281 |
|
|
Loss before income taxes |
|
(9,608 |
) |
|
|
(17,334 |
) |
|
Benefit from income taxes |
|
(18,934 |
) |
|
|
(2,736 |
) |
|
Net income (loss) |
$ |
9,326 |
|
|
$ |
(14,598 |
) |
|
Earnings (loss) per share: |
|
|
|
||||
|
Basic |
$ |
0.02 |
|
|
$ |
(0.03 |
) |
|
Diluted |
$ |
0.02 |
|
|
$ |
(0.03 |
) |
|
Weighted-average shares outstanding: |
|
|
|
||||
|
Basic |
|
489,712 |
|
|
|
484,190 |
|
|
Diluted |
|
499,795 |
|
|
|
484,190 |
|
|
___________________________ |
||
|
(1) |
Includes stock-based compensation expense as follows: | |
|
STOCK-BASED COMPENSATION EXPENSE (Amounts in thousands) (Unaudited) |
|||||
|
|
Three Months Ended |
||||
|
|
2023 |
|
2022 |
||
|
|
|
|
|
||
|
Platform operations |
$ |
3,946 |
|
$ |
5,950 |
|
Sales and marketing |
|
14,123 |
|
|
16,525 |
|
Technology and development |
|
20,867 |
|
|
22,393 |
|
General and administrative (1) |
|
74,534 |
|
|
80,027 |
|
Total |
$ |
113,470 |
|
$ |
124,895 |
|
___________________________ |
||
|
(1) |
Includes stock-based compensation expense related to a long-term CEO performance grant of $60 million and $66 million for the three months ended March 31, 2023 and 2022, respectively. |
|
|
THE TRADE DESK, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Amounts in thousands) (Unaudited) |
|||||
|
|
As of March 31, |
|
As of December 31, |
||
|
ASSETS |
|
|
|
||
|
Current assets: |
|
|
|
||
|
Cash and cash equivalents |
$ |
892,702 |
|
$ |
1,030,506 |
|
Short-term investments, net |
|
437,730 |
|
|
416,080 |
|
Accounts receivable, net |
|
2,086,332 |
|
|
2,347,195 |
|
Prepaid expenses and other current assets |
|
59,101 |
|
|
51,836 |
|
Total current assets |
|
3,475,865 |
|
|
3,845,617 |
|
Property and equipment, net |
|
170,454 |
|
|
173,759 |
|
Operating lease assets |
|
212,042 |
|
|
220,396 |
|
Deferred income taxes |
|
94,028 |
|
|
94,028 |
|
Other assets, non-current |
|
47,249 |
|
|
46,879 |
|
Total assets |
$ |
3,999,638 |
|
$ |
4,380,679 |
|
|
|
|
|
||
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
||
|
Current liabilities: |
|
|
|
||
|
Accounts payable |
$ |
1,677,154 |
|
$ |
1,871,419 |
|
Accrued expenses and other current liabilities |
|
100,146 |
|
|
105,474 |
|
Operating lease liabilities |
|
53,054 |
|
|
52,430 |
|
Total current liabilities |
|
1,830,354 |
|
|
2,029,323 |
|
Operating lease liabilities, non-current |
|
200,728 |
|
|
208,527 |
|
Other liabilities, non-current |
|
27,749 |
|
|
27,490 |
|
Total liabilities |
|
2,058,831 |
|
|
2,265,340 |
|
|
|
|
|
||
|
Stockholders' equity: |
|
|
|
||
|
Preferred stock |
|
— |
|
|
— |
|
Common stock |
|
— |
|
|
— |
|
Additional paid-in capital |
|
1,558,830 |
|
|
1,449,825 |
|
Retained earnings |
|
381,977 |
|
|
665,514 |
|
Total stockholders' equity |
|
1,940,807 |
|
|
2,115,339 |
|
Total liabilities and stockholders' equity |
$ |
3,999,638 |
|
$ |
4,380,679 |
|
THE TRADE DESK, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Amounts in thousands) (Unaudited) |
|||||||
|
|
Three Months Ended March 31, |
||||||
|
|
2023 |
|
2022 |
||||
|
OPERATING ACTIVITIES: |
|
|
|
||||
|
Net income (loss) |
$ |
9,326 |
|
|
$ |
(14,598 |
) |
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
|
|
|
||||
|
Depreciation and amortization |
|
19,293 |
|
|
|
12,350 |
|
|
Stock-based compensation |
|
113,470 |
|
|
|
124,895 |
|
|
Noncash lease expense |
|
11,917 |
|
|
|
10,515 |
|
|
Allowance for credit losses on accounts receivable |
|
316 |
|
|
|
725 |
|
|
Deferred income taxes |
|
— |
|
|
|
(5,304 |
) |
|
Other |
|
(1,310 |
) |
|
|
998 |
|
|
Changes in operating assets and liabilities: |
|
|
|
||||
|
Accounts receivable |
|
258,165 |
|
|
|
259,483 |
|
|
Prepaid expenses and other current and non-current assets |
|
(5,481 |
) |
|
|
23,743 |
|
|
Accounts payable |
|
(200,701 |
) |
|
|
(245,937 |
) |
|
Accrued expenses and other current and non-current liabilities |
|
(4,309 |
) |
|
|
(8,688 |
) |
|
Operating lease liabilities |
|
(13,113 |
) |
|
|
(11,990 |
) |
|
Net cash provided by operating activities |
|
187,573 |
|
|
|
146,192 |
|
|
INVESTING ACTIVITIES: |
|
|
|
||||
|
Purchases of investments |
|
(144,721 |
) |
|
|
(121,221 |
) |
|
Maturities of investments |
|
126,731 |
|
|
|
64,133 |
|
|
Purchases of property and equipment |
|
(9,156 |
) |
|
|
(8,401 |
) |
|
Capitalized software development costs |
|
(1,467 |
) |
|
|
(1,614 |
) |
|
Net cash used in investing activities |
|
(28,613 |
) |
|
|
(67,103 |
) |
|
FINANCING ACTIVITIES: |
|
|
|
||||
|
Repurchases of Class A common stock |
|
(291,534 |
) |
|
|
— |
|
|
Proceeds from exercise of stock options |
|
10,365 |
|
|
|
24,408 |
|
|
Taxes paid related to net settlement of restricted stock awards |
|
(15,595 |
) |
|
|
(13,428 |
) |
|
Net cash provided by (used in) financing activities |
|
(296,764 |
) |
|
|
10,980 |
|
|
Increase (decrease) in cash and cash equivalents |
|
(137,804 |
) |
|
|
90,069 |
|
|
Cash and cash equivalents—Beginning of period |
|
1,030,506 |
|
|
|
754,154 |
|
|
Cash and cash equivalents—End of period |
$ |
892,702 |
|
|
$ |
844,223 |
|
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 |
||||||
|
|
2023 |
|
2022 |
||||
|
|
|
|
|
||||
|
Net income (loss) |
$ |
9,326 |
|
|
$ |
(14,598 |
) |
|
Add back: |
|
|
|
||||
|
Depreciation and amortization expense |
|
19,293 |
|
|
|
12,350 |
|
|
Stock-based compensation expense |
|
113,470 |
|
|
|
124,895 |
|
|
Interest expense (income), net |
|
(14,423 |
) |
|
|
1,076 |
|
|
Benefit from income taxes |
|
(18,934 |
) |
|
|
(2,736 |
) |
|
Adjusted EBITDA |
$ |
108,732 |
|
|
$ |
120,987 |
|
|
|
|
|
|
||||
|
|
Three Months Ended |
||||||
|
|
2023 |
|
2022 |
||||
|
GAAP net income (loss) |
$ |
9,326 |
|
|
$ |
(14,598 |
) |
|
Add back (deduct): |
|
|
|
||||
|
Stock-based compensation expense |
|
113,470 |
|
|
|
124,895 |
|
|
Adjustment for income taxes |
|
(8,299 |
) |
|
|
(5,635 |
) |
|
Non-GAAP net income |
$ |
114,497 |
|
|
$ |
104,662 |
|
|
|
|
|
|
||||
|
GAAP diluted earnings (loss) per share |
$ |
0.02 |
|
|
$ |
(0.03 |
) |
|
|
|
|
|
||||
|
GAAP weighted-average shares outstanding—diluted |
|
499,795 |
|
|
|
484,190 |
|
|
|
|
|
|
||||
|
Non-GAAP diluted earnings per share |
$ |
0.23 |
|
|
$ |
0.21 |
|
|
|
|
|
|
||||
|
Non-GAAP weighted-average shares used in computing Non-GAAP earnings per share, diluted (1) |
|
499,795 |
|
|
|
499,801 |
|
|
_________________________ |
||
|
(1) |
Includes an additional 15.6 million of dilutive securities for the three months ended March 31, 2022, which are not included in GAAP diluted weighted-average shares outstanding due to the Company's net loss position for the three months ended March 31, 2022. |
|
Investors
Jake Graves
Manager, Investor Relations
The Trade Desk
ir@thetradedesk.com
312-620-0806
Media
Melinda Zurich
VP, Communications
The Trade Desk
melinda.zurich@thetradedesk.com
201-320-9398
Document and Entity Information |
May 05, 2023 |
|---|---|
| Cover [Abstract] | |
| Document Type | 8-K |
| Amendment Flag | false |
| Document Period End Date | May 05, 2023 |
| Entity Registrant Name | THE TRADE DESK, INC. |
| Entity Incorporation, State or Country Code | DE |
| Entity File Number | 001-37879 |
| Entity Tax Identification Number | 27-1887399 |
| Entity Address, Address Line One | 42 N. Chestnut Street |
| Entity Address, City or Town | Ventura |
| Entity Address, State or Province | CA |
| Entity Address, Postal Zip Code | 93001 |
| City Area Code | 805 |
| Local Phone Number | 585-3434 |
| Written Communications | false |
| Soliciting Material | false |
| Pre-commencement Tender Offer | false |
| Pre-commencement Issuer Tender Offer | false |
| Entity Emerging Growth Company | false |
| Entity Central Index Key | 0001671933 |
| Title of 12(b) Security | Class A Common Stock, par value $0.000001 per share |
| Trading Symbol | TTD |
| Security Exchange Name | NASDAQ |
| Entity Information, Former Legal or Registered Name | Not Applicable |
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