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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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| (d) |
The following exhibit is being filed herewith:
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Exhibit No.
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Description
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THE TRADE DESK, INC.
(Registrant)
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Date: November 7, 2019
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By:
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/s/ Paul E. Ross
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Paul E. Ross
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Chief Financial Officer
(Principal Financial and Accounting Officer) |
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LOS ANGELES--(BUSINESS WIRE)--November 7, 2019--The Trade Desk, Inc. (NASDAQ: TTD), a provider of a global technology platform for buyers of advertising, today announced financial results for its third quarter ended September 30, 2019.
“We again delivered outstanding performance in the third quarter. Revenue growth of 38% significantly outpaced worldwide programmatic advertising growth. The world’s leading brands and agencies are increasingly using our platform to apply data-driven strategies to drive precision and value across their campaigns,” said Jeff Green, founder and CEO of The Trade Desk. “More data-driven choices by advertisers led to record revenue of $164.2 million and net income of $19.4 million in Q3. Connected TV, audio and mobile led our channel growth. TV advertising is the largest campaign segment for many leading brands, and the digitization of TV is driving advertisers to apply data to TV ad campaigns for the first time. As more broadcasters make their content available via streaming services, we are better positioned than anyone to take advantage of this significant shift.”
Third Quarter 2019 Financial Highlights:
The following table summarizes our consolidated financial results for the periods ended September 30, 2019 and 2018 ($ in millions, except per share amounts):
|
|
Three Months Ended |
|
Nine Months Ended |
|
||||||||||
|
|
September 30, |
|
September 30, |
|
||||||||||
|
|
2019 |
|
2018 |
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2019 |
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2018 |
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||||||
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GAAP Results |
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|
|
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|
|
|
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||
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Revenue |
$ |
164.2 |
|
$ |
118.8 |
|
$ |
445.1 |
|
$ |
316.8 |
|
||
|
Increase in revenue year over year |
|
38 |
% |
|
50 |
% |
|
40 |
% |
|
54 |
% |
||
|
Net Income |
$ |
19.4 |
|
$ |
20.3 |
|
$ |
57.4 |
|
$ |
48.7 |
|
||
|
Diluted EPS |
$ |
0.40 |
|
$ |
0.44 |
|
$ |
1.20 |
|
$ |
1.07 |
|
||
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|
|
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|
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||
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Non-GAAP Results |
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Adjusted EBITDA |
$ |
47.8 |
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$ |
36.6 |
|
$ |
130.4 |
|
$ |
92.4 |
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||
|
Adjusted EBITDA Margin |
|
29 |
% |
|
31 |
% |
|
29 |
% |
|
29 |
% |
||
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Non-GAAP Net Income |
$ |
36.1 |
|
$ |
30.2 |
|
$ |
104.8 |
|
$ |
72.7 |
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||
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Non-GAAP Diluted EPS |
$ |
0.75 |
|
$ |
0.65 |
|
$ |
2.19 |
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$ |
1.60 |
|
||
Third Quarter and Recent Business Highlights Include:
Fourth Quarter and Revised Full Year 2019 Outlook:
Mr. Green added: “The biggest brands in the world continue to shift their advertising spending to programmatic on our platform. As a result, we are raising our 2019 revenue guidance to at least $658 million. At the same time, we continue to generate profitability and make large investments in areas critical to our future. We now expect our adjusted EBITDA to be $209 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 fourth quarter of 2019 and revised targets for its fiscal year 2019. The Company’s financial targets are as follows:
Fourth Quarter 2019:
Full Year 2019
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 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 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 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.
Third Quarter Financial Results Webcast and Conference Call Details
The Trade Desk, Inc. uses its Investor Relations website (http://investors.thetradedesk.com/investor-overview), its Twitter feed (@TheTradeDesk), LinkedIn page (https://www.linkedin.com/company/the-trade-desk/), and Facebook page (https://www.facebook.com/TheTradeDesk/), and 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 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. |
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CONSOLIDATED STATEMENTS OF INCOME |
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(Amounts in thousands, except per share amounts) |
|||||||||||||
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(Unaudited) |
|||||||||||||
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|
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|
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Three Months Ended |
Nine Months Ended |
|||||||||||
|
|
September 30, |
September 30, |
|||||||||||
|
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2019 |
|
2018 |
2019 |
|
2018 |
|||||||
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Revenue |
$ |
164,203 |
|
$ |
118,825 |
$ |
445,114 |
|
$ |
316,826 |
|||
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Operating expenses (1): |
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|
|
|
|
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|
|
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Platform operations |
|
39,932 |
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|
29,344 |
|
108,913 |
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|
78,842 |
|||
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Sales and marketing |
|
36,142 |
|
|
23,287 |
|
89,951 |
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|
60,007 |
|||
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Technology and development |
|
29,185 |
|
|
22,621 |
|
83,949 |
|
|
59,806 |
|||
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General and administrative |
|
37,017 |
|
|
21,310 |
|
102,755 |
|
|
59,816 |
|||
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Total operating expenses |
|
142,276 |
|
|
96,562 |
|
385,568 |
|
|
258,471 |
|||
|
Income from operations |
|
21,927 |
|
|
22,263 |
|
59,546 |
|
|
58,355 |
|||
|
Total other expense (income), net |
|
(1,892 |
) |
|
158 |
|
(2,979 |
) |
|
1,922 |
|||
|
Income before income taxes |
|
23,819 |
|
|
22,105 |
|
62,525 |
|
|
56,433 |
|||
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Provision for income taxes |
|
4,397 |
|
|
1,813 |
|
5,152 |
|
|
7,728 |
|||
|
Net income |
$ |
19,422 |
|
$ |
20,292 |
$ |
57,373 |
|
$ |
48,705 |
|||
|
Earnings per share: |
|
|
|
|
|
|
|
|
|
|
|||
|
Basic |
$ |
0.43 |
|
$ |
0.47 |
$ |
1.29 |
|
$ |
1.15 |
|||
|
Diluted |
$ |
0.40 |
|
$ |
0.44 |
$ |
1.20 |
|
$ |
1.07 |
|||
|
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|||
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Basic |
|
44,771 |
|
|
42,721 |
|
44,363 |
|
|
42,178 |
|||
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Diluted |
|
48,037 |
|
|
46,576 |
|
47,728 |
|
|
45,460 |
|||
|
_______________________ |
|||||||||||||
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(1) Includes stock-based compensation expense as follows: |
|||||||||||||
|
STOCK-BASED COMPENSATION EXPENSE |
|||||||||||||
|
(Amounts in thousands) |
|||||||||||||
|
(Unaudited) |
|||||||||||||
|
|
|||||||||||||
|
|
Three Months Ended |
Nine Months Ended |
|||||||||||
|
|
September 30, |
September 30, |
|||||||||||
|
|
2019 |
|
2018 |
|
2019 |
|
2018 |
||||||
|
Platform operations |
$ |
1,507 |
$ |
1,234 |
$ |
3,894 |
$ |
3,137 |
|||||
|
Sales and marketing |
|
5,036 |
|
3,033 |
|
13,094 |
|
7,757 |
|||||
|
Technology and development |
|
7,146 |
|
4,013 |
|
18,579 |
|
8,905 |
|||||
|
General and administrative |
|
5,753 |
|
3,137 |
|
20,801 |
|
8,159 |
|||||
|
Total |
$ |
19,442 |
$ |
11,417 |
$ |
56,368 |
$ |
27,958 |
|||||
|
THE TRADE DESK, INC. |
|||||||
|
CONSOLIDATED BALANCE SHEETS |
|||||||
|
(Amounts in thousands) |
|||||||
|
(Unaudited) |
|||||||
|
|
|
|
|
|
|||
|
|
As of |
|
As of |
||||
|
|
September 30, 2019 |
|
December 31, 2018 |
||||
|
ASSETS |
|
|
|
|
|||
|
Current assets: |
|
|
|
|
|||
|
Cash and cash equivalents |
$ |
173,446 |
$ |
207,232 |
|||
|
Short-term investments |
|
123,082 |
|
— |
|||
|
Accounts receivable, net |
|
835,958 |
|
834,764 |
|||
|
Prepaid expenses and other current assets |
|
26,641 |
|
14,527 |
|||
|
Total current assets |
|
1,159,127 |
|
1,056,523 |
|||
|
Property and equipment, net |
|
47,734 |
|
33,046 |
|||
|
Operating lease assets |
|
177,276 |
|
— |
|||
|
Deferred income taxes |
|
8,460 |
|
8,460 |
|||
|
Other assets, non-current |
|
22,442 |
|
19,843 |
|||
|
Total assets |
$ |
1,415,039 |
$ |
1,117,872 |
|||
|
|
|
|
|
|
|||
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|||
|
Current liabilities: |
|
|
|
|
|||
|
Accounts payable |
$ |
647,547 |
$ |
669,147 |
|||
|
Accrued expenses and other current liabilities |
|
40,553 |
|
44,844 |
|||
|
Operating lease liabilities |
|
15,938 |
|
— |
|||
|
Total current liabilities |
|
704,038 |
|
713,991 |
|||
|
Operating lease liabilities, non-current |
|
167,668 |
|
— |
|||
|
Other liabilities, non-current |
|
7,941 |
|
9,314 |
|||
|
Total liabilities |
|
879,647 |
|
723,305 |
|||
|
|
|
|
|
|
|||
|
Stockholders' equity: |
|
|
|
|
|||
|
Preferred stock |
|
— |
|
— |
|||
|
Common stock |
|
— |
|
— |
|||
|
Additional paid-in capital |
|
353,899 |
|
270,447 |
|||
|
Retained earnings |
|
181,493 |
|
124,120 |
|||
|
Total stockholders' equity |
|
535,392 |
|
394,567 |
|||
|
Total liabilities and stockholders' equity |
$ |
1,415,039 |
$ |
1,117,872 |
|||
|
THE TRADE DESK, INC. |
|
||||||||
|
CONSOLIDATED STATEMENTS OF CASH FLOWS |
|
||||||||
|
(Amounts in thousands) |
|
||||||||
|
(Unaudited) |
|
||||||||
|
|
|||||||||
|
|
Nine Months Ended September 30, |
|
|||||||
|
|
2019 |
|
2018 |
|
|||||
|
OPERATING ACTIVITIES: |
|
|
|
|
|
|
|||
|
Net income |
$ |
57,373 |
|
$ |
48,705 |
|
|||
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
|||
|
Depreciation and amortization |
|
15,246 |
|
|
8,107 |
|
|||
|
Stock-based compensation |
|
56,368 |
|
|
27,958 |
|
|||
|
Bad debt expense |
|
1,647 |
|
|
1,727 |
|
|||
|
Noncash lease expense |
|
15,394 |
|
|
— |
|
|||
|
Other |
|
(2,945 |
) |
|
2,396 |
|
|||
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|||
|
Accounts receivable |
|
(2,739 |
) |
|
(44,736 |
) |
|||
|
Prepaid expenses and other assets |
|
(19,024 |
) |
|
(10,597 |
) |
|||
|
Accounts payable |
|
(21,401 |
) |
|
(2,804 |
) |
|||
|
Accrued expenses and other liabilities |
|
(3,178 |
) |
|
7,789 |
|
|||
|
Operating lease liabilities |
|
(8,468 |
) |
|
— |
|
|||
|
Net cash provided by operating activities |
|
88,273 |
|
|
38,545 |
|
|||
|
INVESTING ACTIVITIES: |
|
|
|
|
|
|
|||
|
Purchases of property and equipment |
|
(21,659 |
) |
|
(10,383 |
) |
|||
|
Capitalized software development costs |
|
(3,849 |
) |
|
(4,340 |
) |
|||
|
Purchases of investments |
|
(178,179 |
) |
|
— |
|
|||
|
Maturities of investments |
|
55,819 |
|
|
— |
|
|||
|
Net cash used in investing activities |
|
(147,868 |
) |
|
(14,723 |
) |
|||
|
FINANCING ACTIVITIES: |
|
|
|
|
|
|
|||
|
Repayment on line of credit |
|
— |
|
|
(27,000 |
) |
|||
|
Payment of debt financing costs |
|
(6 |
) |
|
— |
|
|||
|
Proceeds from exercise of stock options |
|
21,911 |
|
|
7,165 |
|
|||
|
Proceeds from employee stock purchase plan |
|
8,648 |
|
|
7,014 |
|
|||
|
Taxes paid related to net settlement of restricted stock awards |
|
(4,744 |
) |
|
(602 |
) |
|||
|
Net cash provided by (used in) financing activities |
|
25,809 |
|
|
(13,423 |
) |
|||
|
(Decrease) increase in cash and cash equivalents |
|
(33,786 |
) |
|
10,399 |
|
|||
|
Cash and cash equivalents—Beginning of period |
|
207,232 |
|
|
155,950 |
|
|||
|
Cash and cash equivalents—End of period |
$ |
173,446 |
|
$ |
166,349 |
|
|||
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 |
|
Nine Months Ended |
|
||||||||||
|
|
September 30, |
|
September 30, |
|
||||||||||
|
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
||||||
|
|
|
|
||||||||||||
|
Net income |
$ |
19,422 |
|
$ |
20,292 |
|
$ |
57,373 |
|
$ |
48,705 |
|
||
|
Add back: |
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Depreciation and amortization expense |
|
5,969 |
|
|
3,277 |
|
|
15,246 |
|
|
8,107 |
|
||
|
Stock-based compensation expense |
|
19,442 |
|
|
11,417 |
|
|
56,368 |
|
|
27,958 |
|
||
|
Interest expense (income), net |
|
(1,480 |
) |
|
(237 |
) |
|
(3,763 |
) |
|
(113 |
) |
||
|
Provision for income taxes |
|
4,397 |
|
|
1,813 |
|
|
5,152 |
|
|
7,728 |
|
||
|
Adjusted EBITDA |
$ |
47,750 |
|
$ |
36,562 |
|
$ |
130,376 |
|
$ |
92,385 |
|
||
|
|
Three Months Ended |
|
Nine Months Ended |
|
||||||||||
|
|
September 30, |
|
September 30, |
|
||||||||||
|
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
||||||
|
GAAP net income |
$ |
19,422 |
|
$ |
20,292 |
|
$ |
57,373 |
|
$ |
48,705 |
|
||
|
Add back (deduct): |
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Stock-based compensation expense |
|
19,442 |
|
|
11,417 |
|
|
56,368 |
|
|
27,958 |
|
||
|
Adjustment for income taxes |
|
(2,777 |
) |
|
(1,528 |
) |
|
(8,985 |
) |
|
(3,918 |
) |
||
|
Non-GAAP net income |
$ |
36,087 |
|
$ |
30,181 |
|
$ |
104,756 |
|
$ |
72,745 |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
GAAP diluted EPS |
$ |
0.40 |
|
$ |
0.44 |
|
$ |
1.20 |
|
$ |
1.07 |
|
||
|
Non-GAAP diluted EPS |
$ |
0.75 |
|
$ |
0.65 |
|
$ |
2.19 |
|
$ |
1.60 |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Weighted average shares outstanding—diluted |
|
48,037 |
|
|
46,576 |
|
|
47,728 |
|
|
45,460 |
|
||
Investors
Chris Toth
Vice President Investor Relations, The Trade Desk
ir@thetradedesk.com
310-334-9183
Media
Ian Colley
Vice President Public Relations, The Trade Desk
ian.colley@thetradedesk.com
914-434-3043
Document and Entity Information |
Nov. 07, 2019 |
|---|---|
| Cover [Abstract] | |
| Document Type | 8-K |
| Amendment Flag | false |
| Document Period End Date | Nov. 07, 2019 |
| 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 |
| Entity Information, Former Legal or Registered Name | Not Applicable |
| 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 |