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The Trade Desk(TTD) - 2025 Q1 - Earnings Call Transcript

2025-05-08 22:00

Financial Data and Key Metrics Changes - Q1 revenue reached $616 million, representing a 25% year-over-year increase [45] - Adjusted EBITDA for the quarter was $208 million, reflecting a 34% margin [45] - Adjusted net income was $165 million, or $0.33 per fully diluted share [49] - Free cash flow was $230 million in Q1 [49] Business Line Data and Key Metrics Changes - CTV (Connected TV) remains the largest and fastest-growing advertising channel, representing a high 40s percentage share of the business [46] - Mobile accounted for a mid-30s percentage share of spend, while display represented a low double-digit share and audio around 5% [46] - The adoption of the Kokai platform accelerated, with about two-thirds of clients now using it, ahead of schedule [60] Market Data and Key Metrics Changes - North America represented approximately 88% of spend, while international markets accounted for about 12% [46] - International growth outpaced North America for the ninth consecutive quarter, driven by CTV [47] Company Strategy and Development Direction - The company aims to capture market share in a more competitive landscape, particularly in the open Internet space [19][40] - Innovations like OpenPath and the acquisition of Sincerra are expected to enhance supply chain efficiency and transparency [24][28] - The focus remains on maintaining independence and objectivity to differentiate from competitors like Google and Amazon [45][82] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to navigate macroeconomic uncertainties and continue to grow [51] - The outlook for Q2 anticipates revenue of at least $682 million, reflecting a 17% year-over-year growth [51] - The company is optimistic about the open Internet's prospects following recent antitrust rulings against Google [19][70] Other Important Information - The company has no debt and ended the quarter with approximately $1.7 billion in cash and short-term investments [49] - A significant share repurchase program was executed, with $386 million of Class A common stock repurchased [50] Q&A Session Summary Question: Can you elaborate on the progress from product and go-to-market changes? - Management highlighted strong Q1 performance and noted that upgrades contributed to outperformance, with Kokai adoption ahead of schedule [56][60] Question: What are the implications of Google's antitrust verdict for DSPs? - Management believes the verdict will create a fairer market, allowing the company to compete more effectively against reduced competition from Google [65][70] Question: How does the company view Q2 guidance amid uncertainty? - Management remains optimistic, citing strong underlying business fundamentals and the ability to assist clients in navigating challenges [72][75] Question: How is the competitive landscape evolving, particularly with Amazon? - Management views Amazon's focus on Prime Video as a limitation, asserting that the company’s CTV growth is outpacing Amazon's advertising growth [80][82] Question: What progress is being made with OpenPath and expectations for the upfront? - Management anticipates a stronger performance for programmatic advertising during the upfronts, with ongoing improvements in OpenPath [90][92]