Trade Desk, Inc. Q3 FY2024 earnings call

Jeff Green highlighted strong revenue growth in Q3, with continued market share gain. CTV is the fastest-growing channel with deepening partnerships like with Disney, NBCU, etc. Over 40% of business this year falls under joint business plans. There are 10 significant macro landscape changes creating tailwinds, including macro environment effects, CMOs needing data-driven growth, AI adoption, Google's potential changes, CTV inventory dynamics, supply chain improvement, audio opportunities, retail media potential, live sports growth. Laura Schenkein discussed strong top-line performance, profitability, and cash flow, with Q3 adjusted EBITDA at ~41% of revenue and free cash flow $222 million. Investments in Kokai, CTV, retail media, and supply chain innovations were emphasized.

Revenue in Q3 was $628 million, representing a 27% year-over-year growth. CTV led growth and is both the largest channel and fastest-growing. Video (including CTV) made up a high 40s percentage share of business. Mobile was a mid-30 percentage share, display a low double-digit percent, and audio around 5%. Geographically, North America accounted for about 88% of business in Q3, while international was around 12%, with international spend growing at a faster rate year-over-year than North America for the last seven quarters. CTV drove growth across EMEA and Asia Pacific.

Laura Schenkein stated Q4 revenue is estimated to be at least $756 million, representing about 25% year-over-year growth. Adjusted EBITDA in Q4 is estimated at approximately $363 million. The company continued share repurchases and is well-positioned for 2025 with large growth drivers like CTV, retail media, international expansion, etc.

Risks include antitrust trials affecting Google's behavior, potential inefficiencies in the ad tech supply chain, and consumer confidence issues impacting brand advertising spend.

Q: Shyam Patil asked about near-term macro and 2025 setup.

A: Jeff Green discussed macro vectors, strong performance in Q3, CMOs under scrutiny, political spend, and partnerships in the crawl phase.

Q: Vasily Karasyov asked about Google's pressure and trial.

A: Jeff Green said Google will likely deprioritize network, will have to play more fair, and The Trade Desk will continue to win.

Q: Jessica Reif Ehrlich asked about supply chain initiatives.

A: Jeff Green explained efforts like gold standard, UID2, Sellers and Publishers 500+, and OpenPath to empower the supply chain.

Q: Shweta Khajuria asked about CTV growth drivers and Amazon's evolution.

A: Jeff Green ranked partnerships, international expansion, and AI as drivers, and said Amazon faces disadvantages in CTV.

Q: Laura Martin asked about growth tipping point.

A: Jeff Green said The Trade Desk is 1% of the market, with 99% left and focus on adding value.

Q: Justin Patterson asked about audio opportunities.

A: Jeff Green was optimistic about audio's growth potential but noted work needed.

Q: Dan Salmon asked about political spend impact and CapEx.

A: Laura Schenkein said political spend is low single digits in 2024, and CapEx is ~5% of revenue.

Q: Jason Helfstein asked about Roku integration and CTV strategy.

A: Jeff Green discussed Roku partnership and future integrations.

Q: Matthew Swanson asked about Kokai and metrics trust.

A: Jeff Green talked about helping CMOs understand Kokai metrics and importance of objectivity.