The Trade Desk, Inc. · NASDAQ:TTD
The Trade Desk — Q4 2020 Earnings Presentation
49 slides from The Trade Desk's earnings presentation, Feb 18, 2021
Slide 1: Fourth Quarter 2020 Investor Presentation
Fourth Quarter 2020 Investor Presentation, February 18, 2021
Slide 2: Statement of Caution Under the Private Securities Litigation Reform Act of 1995
Statement of Caution Under the Private Securities Litigation Reform Act of 1995 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
Slide 3: What we do
What we do We provide a platform for ad buyers. Most buyers are ad agencies or other technology companies. 3
Slide 4: Company milestones and profitability since 2013
May 2011 $.08 Day* 2012 First $1M Month* 2014 First $1M Day* 2015 First $2M and $3M Day* 2016 First $100M Month* 2017 First $5M Day and $200M Month* 2018 First $10M Day* 2019 First $1B Quarter* 2020 First $1.5B Quarter* We’ve been profitable since 2013. 2015: $114M in Revenue, $16M in Adj. Net Incom
Slide 5: By the numbers
Column1 by the numbers 26% Revenue (1) $836 Gross Spend (2) 34% ($ in millions) ($ in millions) 39% $4,198 $661 33% 55% $3,130 51% $477 52% $2,351 52% 78% $308 86% $1,556 156% $203 $1,027 161% $114 $552 $45 $211 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 FY2014 FY2015 FY2016 FY2017 FY2018 FY20
Slide 6: The most effective advertising is targeted
The most effective advertising is targeted. 6
Slide 7: There is a fundamental shift happening in advertising
There is a fundamental shift happening in advertising. And it’s bigger than just a move to digital. 7
Slide 8: The market.
The market. 8
Slide 9: Price discovery enables healthy markets
Price discovery enables healthy markets. 9
Slide 10: We are targeting a massive market
We are targeting a massive market ~$725B Total Global Ad Spending ~$230B We believe advertising will Linear Television be transacted digitally. “ ~$50B Display The future of all media is digital “ and programmatic… eventually all media will be digital and it will be transacted by machines. 10 Source
Slide 11: The pie is getting bigger while waste is being pushed out
The pie is getting bigger while waste is being pushed out. $1.00 Advertisers / Agencies Self Serve Demand Side Platform (DSP) Managed Service DSPs and Ad Networks Networks Exchange Display Mobile Social TV+ Ad Server Data Platform Supply Side Platform & Yield MGMT Publishers / Sellers / Content Owne
Slide 12: What we do
What we do Provide a self-service platform to agencies who deliberately pick from over 500 billion digital ad opportunities a day. 95%+ of our spend comes through MSAs 12
Slide 13: We provide agencies a software platform
We provide agencies a SOFTWARE PLATFORM. We create room for their proprietary advantage. We are an enabler, not a disruptor. 13
Slide 14: We align agencies and their brands
We align agencies and their brands. PUBLISHER ADVERTISER SELL-SIDE MARKETPLACE BUY-SIDE TECHNOLOGY SERVICE 14
Slide 15: We are omnichannel
We are omnichannel. CTV, mobile, video, audio, display, social, native. 15
Slide 16: We buy advertising and data
We buy advertising and data. We power some of the largest brands in the world… …through their agencies and digital solutions companies. 16
Slide 17: Diversified Across All Major Verticals
Diversified Across All Major Verticals In 2020, Others above 1% of spend includes Style & Fashion, Family & Parenting, Travel, Hobbies & Interests, Education, Pets, Sports 17 In 2019, Others above 1% of spend includes Travel, Education, Family & Parenting, Sports, Hobbies & Interests, Pets, Careers,
Slide 18: The Trade Desk is global
The Trade Desk is global. BELLEVUE SAN FRANCISCO TORONTO LONDON SAN JOSE MADRID HAMBURG CHICAGO VENTURA SEOUL PARIS BOULDER NEW YORK SINGAPORE LOS ANGELES TOKYO SHANGHAI ALISO VIEJO HONG KONG JAKARTA SYDNEY
Slide 19: We buy the whole internet
We buy the whole internet. Even media that isn’t digital will be transacted digitally, using the internet. 19
Slide 20: We need to access their data to help them
We need to Agencies (and their access their data brands) need a to help them. technology partner We are the to trust with their alternative to the data. conflicted platform providers. 20
Slide 21: We buy data to make better decisions
We buy data to make better decisions. We focus on being the best partner for our data providers. 21
Slide 22: Our technology.
Our technology. © theTradeDesk’
Slide 23: We built a data management platform first
We built a data Our decisioning technology management platform first. 3rd PARTY (data warehouse) DATA LiveRamp, TTD Data BlueKai, IXI, etc. The buyer with the most data can make the 1ST PARTY DATA Site-based, CRM, most intelligent bid. Tier 1/2/3 DMP 23
Slide 24: Expressiveness is central to our technological advantage
Expressiveness is central to our technological advantage. 24
Slide 25: We're Built Differently Than Everyone Else in the Industry
25 We're Built Differently Than Everyone Else in the Industry. LINE ITEMS VS. BID FACTORS ae Limits reporting granularity, The only structure that allows optimization options and ability for expressiveness and fine to activate data. grain reporting.
Slide 26: Goal: The most transparent and most detailed reporting
Goal: The most transparent and most detailed reporting. Simplified User Interface “expressiveness” at work 26 Transparent Reporting
Slide 27: Bid Multiplier
TTD + Agency reduced client’s booking costs by half. 1.75x bid for stores within 5 miles Bid Multiplier 1x bid for stores outside 5-15 miles 0x (no bid) outside 15 miles Time since last site visit Expressiveness = 15,360 Bid Permutations 27
Slide 28: Our platform approach wins more of the budget
Our platform approach wins more of the budget. An example media plan. Agency 40% 20% 10% 10% 10% 10% Agency Marketing and Managed Service Advertising Data and Promotion Programmatic Software Solution Technology Trading Desk Solution Company Partner Company Company Company Powered by 28 Illustrative
Slide 29: Unified iD
Collaborating with industry organizations to operate UID2 for the open internet Built an open-sourced technology to convert email address to anonymized IDs Dedicated internal resources to build the Unified iD 2.0 technology The what and why… Believe the open internet must continue to thrive UID2 is
Slide 30: Significant Growth Drivers
Significant Growth Drivers
Slide 31: CTV and TTD
CTV and TTD The convergence of the internet and television
Slide 32: The future of TV is ad funded
The future of TV is ad funded. The cost of no ads is too great for most consumers. 32 (Cable costs are according to the Leichtman Research Group, Inc.).
Slide 33: The future of TV is ad funded
Our story in CTV is resonating You are missing The future out on a core audience if of TV is you’re only buying ad funded. broadcast TV. The cost of no ads is too great for most consumers. 33
Slide 34: Our reach in the US is huge
The future ofin TV Our reach the USisis adHUGEfunded. The cost of no ads is too great for most consumers. 80+ million 120+ million households CTV devices Source: The Trade Desk estimated reach in the US for the full year 2020E from Q12020 conference call script May 7, 2020 34
Slide 35: Decisioning improves TV buying
Decisioning improves TV buying The future of TV is Traditional TV Buying Connected TV buying ad funded. $10 CPM $20 CPM The cost of no ads is too great for most consumers. Targeting is limited to DMA, schedule 1:1 targeting of valuable customers and dayparts & their households in real time 35
Slide 36: Connected TV Measurement
Connected TV Measurement The future of TV is Measure and analyze the impact of your Connected TV campaigns to inform future strategies. TV & Cross-Platform Metrics and Reporting ad funded. The cost of no ads is too Key Reporting Metrics Include: • Report across video great for most consumers. • Vide
Slide 37: Growth Outside North America
Growth Outside North America
Slide 38: Top Worldwide Advertising Markets
Top 20 Worldwide Advertising Markets ~88% ~12% Spend(1) of spend(1) (through 2020) (through 2020) 33% of all ad 67% of all ad dollars dollars spent In North America(2) spent outside North America(2) 1: FY2020 percent of spend provided February 18, 2020, at The Trade Desk’s conference call for the pe
Slide 39: Non NA grew from 6.5% to 12% of our business
Non NA grew from 6.5% to 12% of our business from 2015 to 2020
Slide 40: Shopper Marketing
Shopper Marketing a @) theTradeDesk
Slide 41: Our decisioning technology
Part of Walmart Initiative to launch a Media Business Our decisioning technology Enables brands to power ad campaigns with shopper audiences 3rd PARTY Ability to measure the impact of in-store DATA TTD Data and online sales LiveRamp, BlueKai, IXI, etc. TTD marketplaceSTnot limited to Walmart. 1 PART
Slide 42: Our focus for the future
Our focus for the future... 1. Unified iD 2.0 2. Connected TV 3. Global expansion 4. Shopper marketing 5. 2021 Platform Update: “Solimar” • New “goal-based” User-Experience • Upgrading AI tools • Measurement marketplace Objective, Independent, Transparent 42
Slide 43: How Do We Manage Our Business?
How Do We Manage Our Business? • Focus on culture • Customer Retention • Spend Growth • Efficiency 43
Slide 44: Strong financial model
Strong financial model. • Exceptional top line growth • Master Services Agreement -based model with ongoing, established customer relationships • Self-serve software model drives strong operating leverage • Proven profitability 44
Slide 45: Robust revenue growth
Robust revenue growth… Revenue(1) ($ in millions) Column1 $319.9 $836 $661 $215.9 $216.1 $477 $164.0 $160.0 $159.9 $160.7 $118.8 $139.4 $121.0 $308 $102.6 $112.3 $79.4 $85.7 $203 $72.4 $72.8 $53.0 $53.0 $114 $18.5 $28.8$42.7 $47.2 $24.5 $30.4 $45 $11.2 $18.0 $6.5$8.4 FY2014 FY2015 FY2016 FY2017 FY20
Slide 46: Delivering substantial profitability
…delivering substantial profitability Adj. EBITDA ($ in millions) GAAP Net Income ($ in millions) $151.9 $152.9 $84.0 $77.0 $67.1 $29.7 $36.9 $58.0 $51.0 $47.8 $25.3 $39.5 $39.0 $39.4 $41.2 $36.6 $25.1 $16.6 $24.4 $24.7 $20.3 $27.8 $18.7 $15.7 $19.8 $11.1 $24.0 $18.8 $19.4 $14.6 $4.6 $16.8 $19.3 $9.
Slide 47: Investment highlights
Investment highlights. 1. Q4 revenue grew 48% y/y • Political spend was a high single digit percent of spend 2. 2020 revenue grew 26% y/y (impacted by Covid) • CTV more than doubled; Political spend was mid-single digits 3. 95%+ of our spend coming through MSAs and is relatively predictable. 4. We’r
Slide 48: Q4 and FY2020 GAAP Financial Information
Q4 and FY2020 GAAP Financial Information THE TRADE DESK, INC. CONSOLIDATED STATEMENTS OF INCOME (Amounts in thousands, except per share amounts) (Unaudited) Three Months Ended Year Ended December 31, December 31, 2020 2019 2020 2019 Revenue $ 319,905 $ 215,944 $ 836,033 $ 661,058 Operating expenses
Slide 49: Supplemental Non-GAAP Information
Supplemental Non-GAAP Information Non-GAAP Financial Metrics (Amounts in thousands, except per share amounts) The following tables show the Company’s GAAP financial metrics reconciled to non-GAAP financial metrics included in this presentation. Three Months Ended Year Ended December 31, December 31,