The Trade Desk(US:TTD)2025-08-07 21:03Financial Performance - Revenue increased by $109 million, or 19%, for the three months ended June 30, 2025, and by $234 million, or 22%, for the six months ended June 30, 2025, compared to the same periods in 2024[92]. - Net income for the three months ended June 30, 2025, was $90,129 thousand, a 6% increase from $85,029 thousand in 2024, while for the six months, net income rose to $140,807 thousand, up 21% from $116,689 thousand[81]. Operating Expenses - Platform operations expense increased by $41 million, or 37%, for the three months ended June 30, 2025, primarily due to a $33 million increase in hosting costs[93]. - Sales and marketing expense rose by $27 million, or 20%, for the three months ended June 30, 2025, driven by a $20 million increase in personnel costs[96]. - Total operating expenses for the three months ended June 30, 2025, were $577,262 thousand, representing 83% of revenue, compared to $489,830 thousand, or 84% of revenue, in 2024[90]. - The company anticipates continued increases in operating expenses as it invests in platform operations and technology development[85]. - Technology and development expenses increased by $24 million, or 22%, for the three months ended June 30, 2025, compared to the same period in 2024, primarily due to a $21 million increase in personnel costs[99]. - General and administrative expenses decreased by $5 million, or 3%, for the three months ended June 30, 2025, mainly due to a $15 million decrease in stock-based compensation[102]. - The company anticipates general and administrative expenses to rise due to continued investment in corporate infrastructure and headcount to support growth[104]. Cash Flow and Capital Management - Cash flows from operating activities for the six months ended June 30, 2025, were $456 million, compared to $267 million for the same period in 2024[121]. - The company repurchased 3.7 million shares of Class A common stock for an aggregate amount of $257 million during the three months ended June 30, 2025[120]. - For the six months ended June 30, 2025, the company used $346 million in cash for investing activities, a significant increase from $37 million in the same period of 2024[126][127]. - Cash used in financing activities for the six months ended June 30, 2025, was $583 million, compared to $115 million for the same period in 2024, primarily due to $647 million spent on repurchasing Class A common stock[128][129]. - As of June 30, 2025, the company had working capital of $2,105 million, including $896 million in cash and cash equivalents[110]. - The Amended Credit Facility had $443 million available as of June 30, 2025, with no outstanding debt balance[116]. Market and Strategic Focus - The company is focusing on expanding its advertising inventory and value-added services to support client campaigns[82]. - The growth of the programmatic advertising market is seen as crucial for the company's future revenue growth[83]. - The company plans to invest in international markets, particularly in Europe and Asia, to drive growth despite potential regulatory challenges[86]. Risks and Uncertainties - Macroeconomic uncertainties, including changes in interest rates and inflation, may impact the company's revenue and operational performance[88]. - A hypothetical one percentage point change in interest rates would result in an annual increase or decrease in investment income of approximately $8 million based on short-term investments as of June 30, 2025[140]. - An immediate 10% adverse change in foreign exchange rates would lead to a foreign currency loss of approximately $39 million as of June 30, 2025[141]. - The company has not utilized any derivative financial instruments to manage interest rate risk exposure as of June 30, 2025[140]. - The company does not have any off-balance sheet arrangements other than indemnification agreements as of June 30, 2025[130]. Accounting and Financial Policies - The company’s critical accounting policies include revenue recognition criteria and stock-based compensation, which have the greatest potential impact on financial statements[135]. - The company has entered into forward contracts to hedge foreign currency risk, although there is no assurance of their effectiveness[142]. - The company’s principal commitments include obligations to hosting services, hardware providers, and software as a service[131].