The Trade Desk Reports Fourth Quarter and Fiscal Year 2022 Financial Results; Announces $700 Million Share Repurchase Program
Trade Desk, Inc. (“The Trade Desk” or the “Company”) (NASDAQ: TTD), a provider of a global technology platform for buyers of advertising, today announced financial results for its fourth quarter and fiscal year ended December 31, 2022
LOS ANGELES--(BUSINESS WIRE)--Feb 15, 2023--
The Trade Desk, Inc. (“The Trade Desk” or the “Company”) (NASDAQ: TTD), a provider of a global technology platform for buyers of advertising, today announced financial results for its fourth quarter and fiscal year ended December 31, 2022.
“The Trade Desk outpaced nearly all areas of digital advertising in 2022, with 32% revenue growth year over year, and a record $491 million of revenue in the fourth quarter alone. This performance was underscored by significant profitability and cash flow. In an unpredictable macro environment, our growing relationships with agencies and brands is testament to the value of the open internet over the limitations of walled gardens,” said Jeff Green, founder and CEO of The Trade Desk. “More of the world’s leading advertisers are gravitating to fast-growing channels such as Connected TV (CTV) and retail media, which offer premium value at scale. They are leveraging new identity tools, such as UID2, which allow them to make the most of their first-party data in a privacy-safe manner. These trends will accelerate in 2023 and we will continue to invest in our platform to help advertisers drive maximum value from these opportunities.”
Fourth Quarter and Full Year 2022 Financial Highlights:
The following table summarizes the Company’s consolidated financial results for the quarters and fiscal years ended December 31, 2022 and 2021 ($ in millions, except per share amounts):
Three Months Ended
December 31,
Year Ended
December 31,
2022
2021
2022
2021
GAAP Results
Revenue
$
491
$
396
$
1,578
$
1,196
Increase in revenue year over year
24
%
24
%
32
%
43
%
Net income
$
71
$
8
$
53
$
138
GAAP diluted earnings per share
$
0.14
$
0.02
$
0.11
$
0.28
Non-GAAP Results
Adjusted EBITDA
$
245
$
192
$
668
$
503
Adjusted EBITDA margin
50
%
48
%
42
%
42
%
Non-GAAP net income
$
190
$
208
$
522
$
456
Non-GAAP diluted earnings per share
$
0.38
$
0.42
$
1.04
$
0.91
Fourth Quarter and 2022 Recent Business Highlights
Financial Guidance:
First Quarter 2023 outlook summary:
The Company has 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. The Company expects 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 Operations of the Company prepared under generally accepted accounting principles (“GAAP”). Adjusted EBITDA is earnings before interest expense (income), net; provision for (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 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.
Fourth Quarter and Fiscal Year 2022 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.
Share Repurchase Program
The Company also announced that its board of directors approved a share repurchase program with authorization to purchase up to $700 million of its Class A Common Stock. The new share repurchase program is designed to help offset the impact of future share dilution from employee stock issuances. Repurchases under the program may be made in the open market, in privately negotiated transactions or otherwise, with the amount and timing of repurchases to be determined at the Company’s discretion, depending on market conditions and corporate needs. Open market repurchases will be structured to occur in accordance with applicable federal securities laws, including within the pricing and volume requirements of Rule 10b-18 under the Securities Exchange Act of 1934, as amended. The Company may also, from time to time, enter into Rule 10b5-1 plans to facilitate repurchases of its shares under this authorization. This program does not obligate the Company to acquire any particular amount of Class A Common Stock, and may be modified, suspended or terminated at any time at the discretion of the Company’s board of directors.
The Company expects to fund repurchases with existing cash and cash equivalents and short-term investments. As of December 31, 2022, The Trade Desk had cash and cash equivalents and short-term investments of $1,447 million.
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 press release 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, the Company’s financial targets, such as revenue and Adjusted EBITDA and the amount, timing, and sources of funding for the Company’s share repurchase program. 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, the ability to attract and retain clients, changes in price and volume and the volatility of the Company’s Class A Common Stock and adverse developments affecting prices and trading of exchange-traded securities, including securities quoted on the Nasdaq Global Market, unexpected or otherwise unplanned or alternative requirements with respect to our capital investments. 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.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except per share amounts)
(Unaudited)
Three Months Ended
December 31,
Year Ended
December 31,
2022
2021
2022
2021
Revenue
$
490,737
$
395,598
$
1,577,795
$
1,196,467
Operating expenses (1):
Platform operations
79,619
66,845
281,123
221,554
Sales and marketing
92,829
72,501
337,975
249,298
Technology and development
84,479
62,836
319,876
226,137
General and administrative
133,650
218,777
525,167
374,661
Total operating expenses
390,577
420,959
1,464,141
1,071,650
Income (loss) from operations
100,160
(25,361
)
113,654
124,817
Total other expense (income), net
(11,960
)
1,221
(13,716
)
2,781
Income (loss) before income taxes
112,120
(26,582
)
127,370
122,036
Provision for (benefit from) income taxes
40,933
(34,621
)
73,985
(15,726
)
Net income
$
71,187
$
8,039
$
53,385
$
137,762
Earnings per share:
Basic
$
0.15
$
0.02
$
0.11
$
0.29
Diluted
$
0.14
$
0.02
$
0.11
$
0.28
Weighted-average shares outstanding:
Basic
489,217
480,873
486,937
476,851
Diluted
500,432
500,314
499,925
498,540
___________________________
(1)
Includes stock-based compensation expense as follows:
STOCK-BASED COMPENSATION EXPENSE
(Amounts in thousands)
(Unaudited)
Three Months Ended
December 31,
Year Ended
December 31,
2022
2021
2022
2021
Platform operations
$
4,031
$
4,289
$
18,285
$
15,913
Sales and marketing
15,724
13,309
64,442
50,671
Technology and development
27,564
16,454
94,822
57,791
General and administrative (1)
80,212
171,351
321,093
213,038
Total
$
127,531
$
205,403
$
498,642
$
337,413
___________________________
(1)
Includes stock-based compensation expense related to a long-term CEO performance grant of $66 million and $262 million for the three and twelve months ended December 31, 2022, respectively, and $158 million for the three and twelve months ended December 31, 2021. THE TRADE DESK, INC.
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
(Unaudited)
As of December 31,
2022
As of December 31,
2021
ASSETS
Current assets:
Cash and cash equivalents
$
1,030,506
$
754,154
Short-term investments, net
416,080
204,625
Accounts receivable, net
2,347,195
2,020,720
Prepaid expenses and other current assets
51,836
112,150
Total current assets
3,845,617
3,091,649
Property and equipment, net
173,759
135,856
Operating lease assets
220,396
234,091
Deferred income taxes
94,028
68,244
Other assets, non-current
46,879
47,500
Total assets
$
4,380,679
$
3,577,340
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable
$
1,871,419
$
1,655,684
Accrued expenses and other current liabilities
105,474
101,472
Operating lease liabilities
52,430
46,149
Total current liabilities
2,029,323
1,803,305
Operating lease liabilities, non-current
208,527
238,449
Other liabilities, non-current
27,490
8,280
Total liabilities
2,265,340
2,050,034
Stockholders' equity:
Preferred stock
—
—
Common stock
—
—
Additional paid-in capital
1,449,825
915,177
Retained earnings
665,514
612,129
Total stockholders' equity
2,115,339
1,527,306
Total liabilities and stockholders' equity
$
4,380,679
$
3,577,340
THE TRADE DESK, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
(Unaudited)
Year Ended December 31,
2022
2021
OPERATING ACTIVITIES:
Net income
$
53,385
$
137,762
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
54,425
42,219
Stock-based compensation
498,642
337,413
Noncash lease expense
44,115
40,315
Allowance for credit losses on accounts receivable
3,203
1,456
Deferred income taxes
(11,507
)
(16,777
)
Other
622
5,803
Changes in operating assets and liabilities:
Accounts receivable
(291,747
)
(444,342
)
Prepaid expenses and other current and non-current assets
50,655
1,648
Accounts payable
187,119
309,410
Accrued expenses and other current and non-current liabilities
8,168
7,596
Operating lease liabilities
(48,346
)
(43,990
)
Net cash provided by operating activities
548,734
378,513
INVESTING ACTIVITIES:
Purchases of investments
(553,295
)
(278,387
)
Sales of investments
1,977
4,539
Maturities of investments
338,829
253,444
Purchases of property and equipment
(84,160
)
(54,804
)
Capitalized software development costs
(7,725
)
(5,169
)
Business acquisition
—
(13,261
)
Net cash used in investing activities
(304,374
)
(93,638
)
FINANCING ACTIVITIES:
Payment of debt financing costs
—
(1,924
)
Proceeds from exercise of stock options
47,525
61,476
Proceeds from employee stock purchase plan
33,062
29,229
Taxes paid related to net settlement of restricted stock awards
(48,595
)
(56,855
)
Net cash provided by financing activities
31,992
31,926
Increase in cash and cash equivalents
276,352
316,801
Cash and cash equivalents—Beginning of year
754,154
437,353
Cash and cash equivalents—End of year
$
1,030,506
$
754,154
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
December 31,
Year Ended
December 31,
2022
2021
2022
2021
Net income
$
71,187
$
8,039
$
53,385
$
137,762
Add back:
Depreciation and amortization expense
16,844
12,250
54,425
42,219
Stock-based compensation expense
127,531
205,403
498,642
337,413
Interest expense (income), net
(11,434
)
474
(12,755
)
1,030
Provision for (benefit from) income taxes
40,933
(34,621
)
73,985
(15,726
)
Adjusted EBITDA
$
245,061
$
191,545
$
667,682
$
502,698
Three Months Ended
December 31,
Year Ended
December 31,
2022
2021
2022
2021
GAAP net income
$
71,187
$
8,039
$
53,385
$
137,762
Add back (deduct):
Stock-based compensation expense
127,531
205,403
498,642
337,413
Adjustment for income taxes
(8,576
)
(5,314
)
(29,995
)
(19,619
)
Non-GAAP net income
$
190,142
$
208,128
$
522,032
$
455,556
GAAP diluted earnings per share
$
0.14
$
0.02
$
0.11
$
0.28
GAAP weighted-average shares outstanding—diluted
500,432
500,314
499,925
498,540
Non-GAAP diluted earnings per share
$
0.38
$
0.42
$
1.04
$
0.91
Non-GAAP weighted-average shares used in computing Non-GAAP earnings per share, diluted
500,432
500,314
499,925
498,540
View source version on businesswire.com:https://www.businesswire.com/news/home/20230215005363/en/
CONTACT: 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
KEYWORD: UNITED STATES NORTH AMERICA CALIFORNIA
INDUSTRY KEYWORD: ONLINE PRIVACY TECHNOLOGY CONTENT MARKETING ADVERTISING COMMUNICATIONS SOFTWARE INTERNET DIGITAL MARKETING DATA MANAGEMENT
SOURCE: The Trade Desk, Inc.
Copyright Business Wire 2023.
PUB: 02/15/2023 06:01 AM/DISC: 02/15/2023 06:03 AM
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