The Trade Desk Q1 4 2024 Earnings Conference Call

General Information

• Date & Time: During business hours (specific time not mentioned)
• Participants: Founder and CEO Jeff Green, CFO Laura Shen Kine
• Hosted By: Chris Tio
• Agenda: Presentation of Q1 2024 financial results, Q&A session

Opening Remarks

• Speaker: Chris Tio
• Key Points:
  • Historical information and discussion might include forward-looking statements
  • Mentioned risks and uncertainties affecting the actual results
  • Earnings press release available on the Trade Desk website
  • Introduction to speakers for the call

CEO Overview: Jeff Green

Key Financial Results and Growth

• Q1 2024 Revenue Growth: 28% year-over-year
• Industry Performance: Outpacing digital advertising industry for consecutive years
• Client Base: Over 90% of top 200 advertisers have used the platform

Strategic Highlights

• CTV Growth: Fastest growing channel; partnerships with Disney, NBCU, Walmart, Amazon, Roku, LG
• UID 2 Adoption: Ubiquitous across the premium parts of the open internet
• Kai Platform: Continuous innovation, especially in AI and first-party data

Industry Context and Disruptions

• Historical Disruptions: Global financial crisis, COVID-19 pandemic
• Current Disruption: Major shifts due to Apple and Google's conflicts with governments, new policies from tech giants
• Shift to Open Internet: Movement from walled gardens to open, premium internet

Technology and AI Innovations

• AI Integration: Continuous investment in AI for better decision-making in programmatic advertising
• New Tools: AI-fueled forecasting, audience-based buying leveraging first-party and retail data

Outlook and Future Strategy

• Advertising Trends: Increasing shift to data-driven, cross-channel alternatives to cookies
• Industry Focus: Advertising performance in CTV, digital audio, and overall open internet
• Platform Enhancements: New features in Kai, broader use of UID 2

Financial Analysis: Laura Shen Kine

Financial Metrics

• Revenue: $491 million, 28% increase YoY
• Adjusted EBITDA: $162 million (33% margin)
• Net Income: $131 million, $0.26 per fully diluted share
• Free Cash Flow: $176 million

Spend and Growth Analysis

• Region: 88% North America, 12% International
• Channel: Video (mid-40%), Mobile (mid-30%), Display (low-double digits), Audio (5%)
• Verticals: Double-digit growth across all sectors greater than 1% of spend

Expense Breakdown

• Operating Expenses: $352 million (20% increase YoY)
• Income Tax: $14 million
• Liquidity: $1.4 billion in cash and equivalents, no debt
• Repurchase Program: 1.5 million shares repurchased for $125 million

Future Projections

• Q2 Revenue: At least $575 million (24% increase YoY)
• Adjusted EBITDA: Approximately $223 million
• Key Areas of Focus: CTV, retail media, Kai platform, UID 2, upcoming US election cycle

Q&A Session Highlights

Key Questions Addressed

• Impact of Amazon's Ads: Challenges and competitive impacts of Amazon's ad-supported content
• Cookie Deprecation Delay: Effects on the industry and UID 2 adoption
• Partnerships with CTV Platforms: Benefits from deeper integrations with platforms like Disney and Roku
• Growth in Social Video: Competitive dynamics between CTV and social video advertising
• Full Funnel CTV Strategy: Expansion into bottom-of-funnel advertising using retail data

Strategic Responses

• CTV's Role: Emphasizing the importance of identity, programmatic buying, and data transparency
• UID 2: Continued adoption and benefits across CTV and other premium channels
• Platform Strategy: Leveraging AI and data-driven features to enhance ad performance and client satisfaction

Conclusion

• Summary: The Trade Desk continues to show strong growth and innovation, focusing on CTV, AI, and open internet strategies
• Forward Planning: Positive outlook for the rest of 2024 and beyond, with strategic investments and platform improvements
• End of Call: Opened the floor for questions, more specific inquiries addressed during the Q&A session