The Trade Desk, Inc. · NASDAQ:TTD
The Trade Desk — Q2 2020 Earnings Presentation
44 slides from The Trade Desk's earnings presentation, Aug 6, 2020
Slide 1: Second Quarter 2020 Investor Presentation
Second Quarter 2020 Investor Presentation, August 6, 2020
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: 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* We’ve been profitable since 2013. 2015: $114M in Revenue, $16M in Adj. Net Income and $39M in Adj EBITDA.
Slide 5: By the numbers
by the numbers Revenue 39% Gross Spend (1) 33% ($ in millions) ($ in millions) 55% 51% 52% 52% 78% 86% 156% 161% 2009 $661 M $3.13 B $176 M $214 MM 1310 founded 2019 Revenue (2) 2019 Gross Spend (2) 2019 Adjusted 2019 Adjusted Global Net Income (2) EBITDA (2) employees (2) 5 (1) Gross Spend, Revenue
Slide 6: The most effective advertising is targeted
The most effective advertising is targeted. 6
Slide 7: Consumer's average day of ads
937 desktop ads 461 mobile 180 facebook ads 33 video/TV ads 7 ads audio 4 search clicks 0 print ads * Slides 7 and 8 present a hypothetical illustrative example of what an average consumer might experience during an average day and are based upon information from The Trade Desk, public sources, and
Slide 8: Example: How spend is divided
Example: How spend is divided. Digital Video/TV 5% Audio 1% Desktop 20% Desktop Nearly all of the purchase data used Mobile Mobile 10% was on products she Search already bought. Audio Search 64% Digital Video/TV * Slides 7 and 8 present a hypothetical illustrative example of what an average consumer
Slide 9: 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. 9
Slide 10: The market
The market. 10
Slide 11: Price discovery enables healthy markets
Price discovery enables healthy markets. 11
Slide 12: 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. 12 Source
Slide 13: 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 14: 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 14
Slide 15: 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. 15
Slide 16: We align agencies and their brands
We align agencies and their brands. PUBLISHER ADVERTISER SELL-SIDE MARKETPLACE BUY-SIDE TECHNOLOGY SERVICE 16
Slide 17: We are omnichannel
We are omnichannel. CTV, mobile, video, audio, display, social, native. 17
Slide 18: 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. 18
Slide 19: Diversified Across All Major Verticals
Diversified Across All Major Verticals In 2019, Other includes Government & Politics, Education, Family & Parenting, Sports, Hobbies & Interests, Pets, Careers, Real Estate, Science, Society, and News 19 In 2018, Other includes Travel, Family & Parenting, Government & Politics, Education, Hobbies &
Slide 20: 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 21: We buy the whole internet
We buy the whole internet. Even media that isn’t digital will be transacted digitally, using the internet. 21
Slide 22: 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. 22
Slide 23: 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. 23
Slide 24: Our technology
Our technology. © theTradeDesk’
Slide 25: 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 25
Slide 26: Expressiveness is central to our technological advantage
Expressiveness is central to our technological advantage. 26
Slide 27: We're Built Differently Than Everyone Else in the Industry
27 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 28: Goal: The most transparent and most detailed reporting
Goal: The most transparent and most detailed reporting. Simplified User Interface “expressiveness” at work 28 Transparent Reporting
Slide 29: 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 29
Slide 30: 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 30 Illustrative
Slide 31: Large brands have just started in programmatic
Large brands have just started in programmatic. Large advertiser total media spend (2017) Large advertiser programmatic media spend (2015-2017) $9B $8B $7B $6B $5B $4B $3B $2B $1B $0B 31 Source: The Trade Desk estimates for a large multi-national advertiser
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: Our story in CTV is resonating
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 $20 CPM The cost of no ads is too great for most consumers. Targeting is limited to DMA, schedule 1:1 targeting of valuable customers and dayparts & their households in real time 35
Slide 36: Connected TV Measurement
Connected TV Measurement The future of TV is Measure and analyze the impact of your Connected TV campaigns to inform future strategies. TV & Cross-Platform Metrics and Reporting ad funded. The cost of no ads is too Key Reporting Metrics Include: • Report across video great for most consumers. • Vide
Slide 37: The view into our future
The view into our future. 1. Connected TV 2. Global expansion 3. Expand the use of our APIs with more technology-centric companies. 4. Launched new User-Experience, Planning tools and AI in 2018 – The Next Wave Continue to provide a platform where buyers can objectively and precisely buy ads. 37
Slide 38: How Do We Manage Our Business?
How Do We Manage Our Business? • Client Retention • Spend Growth • Diversification • Efficiency 38
Slide 39: Strong financial model
Strong financial model. • Exceptional top line growth • MSA-based model with ongoing, established customer relationships • Self-serve software model drives strong operating leverage • Proven profitability 39
Slide 40: Robust revenue growth
Robust revenue growth… Revenue(1) ($ in millions) Column1 39% $215.9 55% $164.0 $160.0 $159.9 $160.7 52% $118.8 $139.4 $121.0 $112.3 78% $102.6 $85.7 $79.4 $72.4 $72.8 156% $53.0 $53.0 $42.7 $47.2 $28.8 $30.4 $24.5 $18.5$18.0 $6.5$8.4$11.2 Q114 Q214 Q314 Q414 Q115 Q215 Q315 Q415 Q116 Q216 Q316 Q416
Slide 41: Delivering substantial profitability
…delivering substantial profitability Adj. EBITDA ($ in millions) GAAP Net Income ($ in millions) $84.0 $51.0 $67.1 $58.0 $39.4 $36.9 $47.8 $27.8 $25.1 $39.5 $39.0 $36.6 $20.3 $24.0 $29.7 $18.8 $19.3 $19.4 $25.3 $24.4 $24.7 $16.8 $16.6 $19.8 $18.7 $11.1 $15.7 $14.6 $10.2 $9.1 $10.2 $9.3 $7.6 $3.6 $7
Slide 42: Investment highlights
Investment highlights. 1. Q2 impacted by Covid-19 Pandemic – decline 12.9% y/y 2. CTV grew 40% y/y in Q2 3. We anticipate the Q3 CTV growth rate will at least double the growth rate of Q2 4. 95%+ of our spend coming through MSAs and is relatively predictable. 5. We’re self-service omnichannel (all d
Slide 43: Q2 FY2020 GAAP Financial Information
Q2 FY2020 GAAP Financial Information THE TRADE DESK, INC. CONSOLIDATED STATEMENTS OF INCOME (Amounts in thousands, except per share amounts) (Unaudited) Three Months Ended Six Months Ended June 30, June 30, 2020 2019 2020 2019 Revenue $ 139,355 $ 159,924 $ 300,015 $ 280,911 Operating expenses (1): P
Slide 44: 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 Six Months Ended June 30, June 30, 2