The Trade Desk(TTD) - 2024 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The Trade Desk reported Q3 revenue of $628 million, representing a 27% year-over-year growth, marking strong revenue growth acceleration compared to the previous quarter and year [6][61]. - Adjusted EBITDA for Q3 was approximately$ 257 million, about 41% of revenue, with free cash flow of $222 million [63][68]. - Adjusted net income was$ 207 million or $0.41 per fully diluted share [67]. Business Line Data and Key Metrics Changes - CTV (Connected TV) continued to lead growth, representing a high 40s percentage share of the business, with strong momentum in retail media [63][62]. - Mobile accounted for a mid-30 percentage share of spend, while display represented a low double-digit percent share, and audio made up around 5% [63]. - Over 40% of the business this year will fall under Joint Business Plans (JBPs), indicating significant future spending projections [9]. Market Data and Key Metrics Changes - North America represented about 88% of the business in Q3, while international spend growth outpaced North America for the seventh consecutive quarter, particularly strong in CTV [64]. - Growth was broad-based across verticals, with notable performance in medical health, home and garden, and pets, while political spending was also strong [65]. Company Strategy and Development Direction - The company is focused on expanding its leadership in CTV, retail media, and enhancing its AI capabilities through products like Kokai [9][60]. - The Trade Desk aims to capitalize on the growing CTV opportunity, with partnerships deepening with major players like Disney, NBCU, and Netflix [7][8]. - The company is positioned to benefit from macro changes in the advertising landscape, including the shift towards AI and the need for more efficient supply chains [10][31]. Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's position heading into 2025, citing strong growth drivers in CTV and retail media [9][70]. - The current macro environment presents challenges for brands, leading them to seek more effective advertising solutions, which benefits The Trade Desk [75]. - The company anticipates continued strong performance in Q4, estimating revenue of at least$ 756 million, representing a 25% year-over-year growth [69]. Other Important Information - The company has no debt and exited Q3 with a strong cash position of $1.7 billion [68]. - The Trade Desk is actively repurchasing shares, having repurchased$ 54 million of Class A common stock in Q3 [68]. Q&A Session Summary Question: Near-term macro outlook for Q3 and Q4 - Management highlighted significant macro vectors affecting the business and expressed pride in the strong Q3 performance, particularly in CTV and the Kokai platform [72][73]. Question: Impact of Google and regulatory pressures - Management noted that regardless of the outcome of the DOJ trial against Google, The Trade Desk is well-positioned to win and continue to gain market share [84][88]. Question: Supply chain initiatives and OpenPath - Management explained the significance of OpenPath in enhancing transparency and efficiency in the supply chain, empowering publishers and improving value for advertisers [91][97]. Question: CTV growth drivers - Management identified key drivers for CTV growth, including partnerships, international expansion, and the evolution of ad tech and AI [108][109].