The Trade Desk, Inc. a global technology company that empowers buyers of advertising, today announced financial results for its second quarter ended June 30, 2020.
“While the advertising industry hit the pause button early in the second quarter due to uncertainty around the COVID-19 pandemic, we saw substantial improvement in ad spend as the quarter progressed. Indeed, the month of June ended strongly with ad spend growth turning positive on a year-over-year basis. This improvement comes as marketers recognize the role that data-driven advertising plays in driving business growth as markets start to reopen,” said Jeff Green, Co-Founder and CEO, The Trade Desk. “In this environment, advertisers value the agility and flexibility that our platform provides, along with the ability to measure the ROI of every advertising dollar. Nowhere is this more apparent than television, where the accelerated consumer shift to streaming services and the greater availability of premium inventory, allows advertisers to apply data to their massive TV campaigns for the first time.”
Second Quarter 2020 Financial Highlights
The following table summarizes our consolidated financial results for the quarters ended June 30, 2020 and 2019 ($ in millions, except per share amounts):
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||||||
| GAAP Results | ||||||||||||||||
| Revenue | $ | 139.4 | $ | 159.9 | $ | 300.0 | $ | 280.9 | ||||||||
| Increase (decrease) inrevenue year over year | (13 | )% | 42 | % | 7 | % | 42 | % | ||||||||
| Net Income | $ | 25.1 | $ | 27.8 | $ | 49.2 | $ | 38.0 | ||||||||
| Diluted EPS | $ | 0.52 | $ | 0.58 | $ | 1.01 | $ | 0.80 | ||||||||
| Non-GAAP Results | ||||||||||||||||
| Adjusted EBITDA | $ | 14.6 | $ | 58.0 | $ | 53.6 | $ | 82.6 | ||||||||
| Adjusted EBITDA Margin | 10 | % | 36 | % | 18 | % | 29 | % | ||||||||
| Non-GAAP Net Income | $ | 44.8 | $ | 45.6 | $ | 88.2 | $ | 68.7 | ||||||||
| Non-GAAP Diluted EPS | $ | 0.92 | $ | 0.95 | $ | 1.82 | $ | 1.44 | ||||||||
Second Quarter and Recent Business Highlights Include
- Continued Omnichannel Spend Growth: Omnichannel solutions remain a strategic focus for The Trade Desk as the industry continues shifting toward transparency and programmatic buying. Channel highlights from Q2 include:
- Connected TV spend grew about 40% from Q2 2019 to Q2 2020
- Mobile Video spend grew 15% from Q2 2019 to Q2 2020
- Audio spend grew about 20% from Q2 2019 to Q2 2020
- Strong Customer Retention: Customer retention remained over 95% during the quarter, as it has for the previous 5 years.
- Expanding Partnerships:
- The Trade Desk and FreeWheel, a Comcast Company expanded its partnership in connected TV. The Trade Desk now can access FreeWheel’s unified decisioning capability that enables buyers and sellers to seamlessly transact across both direct sold and programmatic advertising.
- Industry Awards: The Trade Desk was named a 2020 Best Medium Workplace™ in the U.K. and a 2020 Best Workplace in Hong Kong™ by Great Places to Work®. The Trade Desk recently won for the Best Overall Technology for Programmatic Trading at The Drum Digital Advertising Awards (US) and was a Gartner Peer Insights 2020 Customers’ Choice for Ad Tech. The Trade Desk was also named a Best Workplace in New York™ by Great Place to Work™ and Fortune for the third year in a row.
Impact of COVID-19 on our Outlook
Our business has been impacted by the COVID-19 pandemic that has significantly impacted advertiser demand. Like many companies that are ad-funded, we are facing a period of higher uncertainty in our business outlook. We expect our business performance could be impacted by issues beyond our control, such as changing economic conditions or shelter-in-place orders that may or may not occur. Assuming that the economy continues to recover and we do not have any major COVID-19 related setbacks that may cause economic conditions to deteriorate, we estimate revenue growth in Q3 to increase 8 to 10 percent on a year-over-year basis. Under this assumption, we estimate adjusted EBITDA to be at least $30 million in Q3.
Third Quarter 2020 outlook summary
- Revenue range between $177 million and $181 million
- Adjusted EBITDA of at least $30 million
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, credit loss expense on available-for-sale securities and provision for (benefit from) 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.
