Forward looking statements and Non-GAAP Financials
Transcript of Forward looking statements and Non-GAAP Financials
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This presentation is for informational purposes only and is not an offer to sell securities or a solicitation of an offer to buy any securities, and may not be relied upon in connection with the purchase or sale of any security.
This presentation is proprietary and is intended solely for the information of the persons to whom it is presented. It may not be retained, reproduced or distributed, in whole or in part, by any means (including electronic) without the prior written consent of The Trade Desk, Inc.
This presentation contains forward-looking statements. All statements other than statements of historical fact contained in this presentation are forward-looking statements, including information about future performance, estimated results of operations and long-term targets. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these terms or other comparable terminology. These statements are only current predictions and are subject to known and unknown risks, uncertainties and other factors that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from those anticipated by the forward-looking statements. These forward-looking statements are subject to a number of risks, including those described under the heading “Risk Factors” in our periodic reports we have filed with the Securities and Exchange Commission (the “SEC”). Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by law, we are under no duty to update or revise any of the forward-looking statements, whether as a result of new information, future events or otherwise, after the date of this presentation.
In addition to U.S. GAAP financials, this presentation includes certain non-GAAP financial measures. These non-GAAP financial measures are in addition to, and not a substitute for or superior to, measures of financial performance prepared in accordance with U.S. GAAP. See the Appendix for a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measure. These non-GAAP financial measures may be different from non-GAAP financial measures used by other companies.
This presentation contains statistical data that we obtained from industry publications and reports generated by third parties. Although we believe that the publications and reports are reliable, we have not independently verified this statistical data.
The following is intended to outline our general product direction. It is intended for informational purposes only, and does not, and shall not, constitute binding agreements or contractual obligations of any sort. It is not a commitment to deliver any software or functionality. The development, release, and timing of any features or functionality described remains at the sole discretion of The Trade Desk, Inc.
Forward looking statements and Non-GAAP Financials
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Jeff GreenFounder and CEO
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Vision and Strategy for Growth
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We fuel the world’s growthThe importance of advertising is going up
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Advertising is a 725 billion dollar industry
Source: IDC Total Advertising
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$659$693
$725$756
$790$826
$859$893
$929$966
$1,002
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
Total Ad Spend
Sources: https://www.imf.org/external/datamapper/NGDP_RPCH@WEO/OEMDC/ADVEC/WEOWORLDIDC Total Advertising ( in $billions)
3.7% 3.7% 3.7% 3.7% 3.6% 3.6% 3.6% 3.6% 3.6% 3.6% 3.6%
4.9%5.2%
4.4% 4.5% 4.5%4.0% 4.0% 4.0% 4.0% 4.0% 4.0%
GDP Growth % change
The march to 1 trillionTAM – total advertising vs. GDP
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$425 $421 $415 $410 $406 $403 $397 $391 $386 $382 $381
$234 $272 $308 $346 $384 $423 $465 $507 $548 $586 $621$659 $693
$724 $756
$790 $826
$862 $898
$933 $968
$1,002
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
Non-Digital Ad Spend ($) Total Digital Ad Spend ($)
Source: IDC Total Advertising
The march to 1 trillionDigital vs. total advertising
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$402 $394 $382 $372 $362 $352 $338 $323 $308 $293 $280
$234 $272 $308 $346 $384 $423 $465 $507 $548 $586 $621
$22 $28$33 $39 $45
$51$59
$68$78
$89$101
$659 $693
$724 $756
$790 $826
$862 $898
$933 $968
$1,002
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
Non-Digital & Non-Programmatic Ad Spend ($) Total Digital Ad Spend ($) Total RTB Programmatic ($)
Source: IDC Total Advertising
The march to 1 trillionDigital and programmatic vs total advertising
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~100% will eventually be programmatic
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Sources: https://www.emarketer.com/Report/Worldwide-Ad-Spending-eMarketer-Forecast-2017/2002019GDP Growth: World Bank Global Economic Prospects June 2017
The march to 1 trillionBy region
Total Ad Spend by Region ($) (2027)
Americas EMEA APAC
$407 $399
$197
$295
$156
$242
Total Ad Spend by Region ($) (2018)
Americas EMEA APAC
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Macro
What happened since our last Investor Day?
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Mark Zuckerberg before Congress
https://media.wired.com/photos/5acd1a0959c99745767035de/master/w_1164,c_limit/ZuckDay1-RTX5LUM4.jpg
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AppNexus bought by AT&T
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OpenX does layoffs
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Google removes the ID
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Direct to consumer changes everything
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Micro
What happened since our last Investor Day?
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2018 = 55% Y/Y revenue growth
Acceleration
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Biggest fraud prevention deal of advertising history
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We acquired Ad Brain and estimate the ROI to be at about 20X so far
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Megagon adoption over 75%
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CTV: 600% spend CAGR since 2016 launch
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Non US grew from 6.6% to 14% from 2015 to 2018
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Different than most unicorns we optimized to culture
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Tokyo
Sydney
We‘re doing to business what scrum did to software development
Jakarta
Seoul
Singapore
Hong Kong
Shanghai
New York
Ventura
Los Angeles
Irvine
Toronto
Chicago
Boulder
Denver
Bellevue
Seattle
San Francisco
San Jose
Madrid
Hamburg
ParisLondon
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And we are recognized for it
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The Future
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Why TTD is leading?1. We care 2. Our employees matter3. We align our interests
with our clients
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Help agencies level up their business model
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Ad Agencies matterWe are not a disruptor. We enable.
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We are SaaS like, pointed at data, advertising and marketing• We are not a media company
• We have 95%+ client retention, and a unique and more profitable business model than SaaS
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• Price discovery is foundational to healthy markets
• Data driven is better than guessing
• Programmatic will eventually power all 600 Billion (soon to be 1 Trillion)
• Buy side is forever in a power position
• Decisioning is where the money is
• Sell-side fragments
• Sum of tech take rate is 25-30% (sell side and exchange side is too high right now)
• Buy-side aggregates around 3 to 10 players
• At least one will be independent
• To be one of those standing at steady state:
• Global
• Omni channel (mobile and TV most important)
• Each will have a unique data advantage
The basic tenets of our strategy 10 years ago
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We are not competing with Google & Facebook. Media is.
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Objectivity matters more as time goes on
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OUR 5 GOALSOVER 5 YEARS
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CTV and video will be our largest channel
1
All forms of video (linear TV, CTV, video, and mobile video) are nearly half of all advertising
Source: IDC
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China will becomea top 3 market for TTD
2
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Our ID footprint will be larger than any one company
3
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Facebook reaches
2.2Bpeople
The Trade Desk reaches
3.5Bpeople
YouTube reaches
1.8Bpeople
Greater reach potential
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Data at 2x the pace of media4
2018 data grew 1.6X2H2018 data grew 2X (Next Wave)
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We will change media planning5
We shipped a media planner!
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We can build 8 next waves
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Data driven versus guessing
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We are protecting our culture and scaling
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Our investment strategy
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TV
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CTV
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The great parts of traditional TV
1. Reach2. Common experience 3. Scale 4. Efficacy
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The new reality TV1. Reach2. Customized
experience / OD3. Higher CPMs and
fewer ads4. Higher content cost
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1000%Inventory growth Dec 2017/Dec 2016
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21XCTV spend Q118/Q117
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6X2018 CTV inventory availability over 2017
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9XCTV spend 2018/2017
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Data driven OTT may be the best scaled advertising ever
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TV measurement will change everything.
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GTM: full court press to MVPDs, digital channels, huge companies
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Adjusted EBITDA at 40%Incidentally, take rates will remain at historical ranges of 15 to 20%
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1. We’re self-service omnichannel (all decisioned digital) software platform
2. 95%+ of our spend coming through MSAs and is relatively predictable
3. Our tech is measurably better at decisioning
4. We are objective and align our interests with media buyers
5. We have a massive TAM
6. Best positioned to capture massive connected TV and international growth opportunities
7. Delivering BOTH revenue growth and profitability
8. We’ve been profitable since 2013
TTD is an investment in programmatic advertising for the whole internet
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Investors, we thank you!
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The end