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    Trade Desk Inc (TTD)

    Q1 2024 Earnings Summary

    Reported on Feb 13, 2025 (After Market Close)
    Pre-Earnings Price$86.02Last close (May 8, 2024)
    Post-Earnings Price$88.00Open (May 9, 2024)
    Price Change
    $1.98(+2.30%)

    What went well

    • The Trade Desk is well-positioned to capitalize on the significant shift from linear TV to Connected TV (CTV), with major partnerships such as Disney+, NBC for the Olympics, and Roku, and increasing adoption of programmatic advertising in CTV. ,
    • Advertisers are increasingly choosing The Trade Desk over competitors like Google due to rising regulatory scrutiny on walled gardens, and because The Trade Desk offers transparency and control over their own data, allowing advertisers to "own their own future."
    • The Trade Desk's integration of retail media networks and first-party retailer data into CTV campaigns enables advertisers to target consumers more effectively throughout the entire purchase funnel, expanding the total addressable market and contributing to strong growth, as evidenced by their 28% revenue growth in Q1 2024.

    What went wrong

    • The influx of supply in the CTV market, particularly with Amazon's ad-supported Prime Video offering, may lead to depressed CPMs without necessarily driving more demand, potentially affecting The Trade Desk's revenue growth. ( )
    • Despite The Trade Desk's CTV initiatives, the video ad mix percentage has not increased beyond the mid-40% since December 2022, which could indicate challenges in expanding this segment. ( )
    • The company's inability to quantify the impact of advertisers shifting budgets away from Google due to regulatory scrutiny might reflect uncertainty in assessing future growth drivers. ( )

    Q&A Summary

    1. Roku Partnership
      Q: How will the deeper Roku partnership impact TTD?
      A: Jeff is excited about the strengthened relationship with Roku, which now gives TTD access to Roku's rapidly growing inventory, including The Roku Channel. They anticipate Roku's adoption of UID2 and believe TTD will be their most strategic demand partner. Importantly, advertisers can now access Roku's ACR data directly in TTD's platform, and getting access to biddable inventory is a significant development. This partnership enhances TTD's position in the CTV space.

    2. Disney OpenPath Integration
      Q: What does the expanded Disney partnership via OpenPath mean?
      A: TTD has expanded its OpenPath partnership with Disney, connecting directly to Disney's systems and tying in UID2. This direct integration aims to make the supply chain more efficient, transparent, and addressable. Disney expects 50% of its business to be automated and addressable, moving to 75% by 2027. This sets a model for optimal integrations in CTV, increasing TTD's access to inventory and enhancing efficiency.

    3. Amazon's Competitive Impact
      Q: How does Amazon's ad-supported Prime Video affect TTD?
      A: Jeff notes that TTD doesn't currently buy Amazon Prime Video inventory, as Amazon sells it exclusively themselves, creating an objectivity problem. He believes Amazon's approach may limit their competitiveness because advertisers prefer platforms where they can bring their own data and ensure objectivity. Until Amazon opens up its inventory and adopts common currencies like UID2, Jeff doesn't see them as a significant competitive threat.

    4. UID2 Adoption and Cookie Delay
      Q: Does Google's cookie delay affect UID2 adoption?
      A: Jeff wasn't surprised by Google's delay in cookie deprecation. He doesn't believe it slows down UID2 adoption, as the industry recognizes the need to move away from cookies. UID2 adoption is led by CTV providers who differentiate by allowing advertisers to use their own data. The delay gives slower movers more time but doesn't decelerate UID2's progress.

    5. CTV as Full-Funnel Channel
      Q: Is TTD's growth due to CTV becoming full-funnel?
      A: Yes, Jeff agrees that CTV is evolving from just top-of-funnel to full-funnel advertising. By incorporating retail data from major retailers, TTD enables advertisers to target more effectively and measure sales impact, including in brick-and-mortar stores. This has contributed to TTD's strong growth, and they believe there's much more potential ahead.

    6. Regulatory Impact on Google
      Q: Is regulatory scrutiny on Google benefiting TTD?
      A: While it's hard to quantify, Jeff acknowledges that advertisers are increasingly wary of entrusting their data and money to Google due to regulatory concerns. TTD offers transparency and allows advertisers to own their data, which is becoming more important. This sentiment may be contributing to TTD's growth as advertisers seek more control and objectivity.

    7. Premium Content Focus
      Q: How does TTD view competition from social video?
      A: TTD focuses on monetizing premium content rather than user-generated content. Jeff believes that advertisers are moving towards premium content for better visibility and brand safety. While social video platforms offer cheap reach due to oversupply, TTD sees more growth in premium content, where they can provide value through data-driven, high-quality ad experiences.

    8. Need for Automation in CTV
      Q: Why is automation important as CTV scales?
      A: As the number of apps and ad options in CTV increases, advertisers need automated, data-driven approaches to manage complexity and achieve effective frequency capping across platforms. Automation and persistent anonymized identity are crucial. Jeff believes that CTV's perfect fragmentation prevents walled gardens and that streamers are adopting the right strategies, enhancing the open internet.

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