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Trade Desk, Inc. (TTD)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 revenue was $741.0M, up 22% YoY; GAAP diluted EPS was $0.36 and Adjusted EBITDA was $350.0M with a 47% margin. Management acknowledged the company missed its own Q4 guidance after 33 quarters of meeting expectations, citing internal execution missteps while preparing for long‑term platform and organizational changes .
  • Full‑year 2024 revenue reached $2.445B (+26% YoY) and Adjusted EBITDA was $1.011B; gross spend on the platform hit a record $12B and customer retention remained over 95% .
  • Q1 2025 outlook: revenue “at least” $575M and Adjusted EBITDA ~$145M; management expects modest 2025 OpEx growth and modest deleverage, with CapEx ~5% of revenue .
  • Capital allocation: share repurchases totaled $235M in 2024 (Q4 = $57M), and the board added $564M to the authorization in January 2025, bringing future capacity to $1B—reinforcing confidence and offsetting dilution .

What Went Well and What Went Wrong

What Went Well

  • Revenue grew 22% YoY to $741.0M; Adjusted EBITDA margin reached 47% in Q4, underscoring durable profitability and cash generation .
  • Strategic growth drivers continued to scale: CTV remained the largest and fastest-growing channel; international spend growth again outpaced North America; retention stayed above 95% and platform spend reached $12B. “The opportunity ahead is immense” as advertisers shift to premium, scalable channels .
  • Identity and supply-chain initiatives advanced: broad UID2 adoption across major publishers, plus OpenPath momentum and the announced Ventura OS to clean up CTV supply chains. “Ventura…minimizing supply chain hops and costs – ensuring maximum ROI” .

What Went Wrong

  • Missed self‑set Q4 expectations (first in ~8.5 years), attributed to “a series of small execution missteps” during a major December reorg and process changes; management emphasized long‑term prioritization over short‑term optimization .
  • Underperformed prior Q4 guidance: management guided Q4 revenue “at least” $756M and Adjusted EBITDA ~$363M in November; actuals came in at $741.0M and $350.0M .
  • Kokai rollout progressed more slowly (in part deliberately) to inject AI into forecasting and deal workflows; the polarized political environment and macro factors complicated Q4 dynamics (political was ~5% of Q4 spend) .

Financial Results

Income Statement Summary

MetricQ2 2024Q3 2024Q4 2024
Revenue ($USD Millions)$584.6 $628.0 $741.0
GAAP Diluted EPS ($USD)$0.17 $0.19 $0.36
Net Income ($USD Millions)$85.0 $94.2 $182.2
Net Income Margin (%)17%/0.17? NA (not provided explicitly)15% 25%
Adjusted EBITDA ($USD Millions)$241.9 $257.0 $350.0
Adjusted EBITDA Margin (%)41% 41% 47%
Revenue YoY Growth (%)26% 27% 22%

Notes: Net income margin is explicitly disclosed in Q3 (15%) and Q4 (25%); Q2 margin is not explicitly stated in documents above.

Balance Sheet and Cash Flow Highlights (FY end)

MetricFY 2024
Cash and Cash Equivalents ($USD Millions)$1,369.5
Short-term Investments ($USD Millions)$552.0
Total Cash + ST Investments ($USD Millions)$1,921.5
Accounts Receivable, Net ($USD Millions)$3,330.3
Accounts Payable ($USD Millions)$2,631.2
Net Cash Provided by Operating Activities ($USD Millions)$739.5

Channel Mix (approximate shares of spend)

Channel MixQ2 2024Q3 2024Q4 2024
Video (incl. CTV)High 40s% High 40s% High 40s%
MobileMid 30s% Mid 30s% Mid 30s%
DisplayLow double-digit% Low double-digit% Low double-digit%
Audio~5% ~5% ~5%

Operating Metrics and Capital Returns

KPIQ4/FY 2024
Customer Retention>95% (FY)
Gross Spend on Platform$12B (FY)
DSOs97 days (Q4 exit)
DPOs80 days (Q4 exit)
Share Repurchases$57M (Q4), $235M (FY); avg price $93.97
Repurchase Authorization+$564M in Jan 2025; future capacity $1B

Guidance vs Actuals (Q4 2024)

MetricPrior Guidance (Nov 7, 2024)Actual Q4 2024Outcome
Revenue ($USD Millions)≥$756 $741.0 Miss
Adjusted EBITDA ($USD Millions)~$363 $350.0 Miss

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($USD Millions)Q1 2025NA≥$575 New
Adjusted EBITDA ($USD Millions)Q1 2025NA~$145 New
Operating ExpensesFY 2025NAModest OpEx growth; modest deleverage expected New framework
CapEx (% of Revenue)FY 2025~5% reiterated ~5% of revenue Maintained
Share Repurchase AuthorizationOngoing~$464M remaining at 12/31/24 +$564M added in Jan 2025; future repurchases up to $1B Raised

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 & Q3 2024)Current Period (Q4 2024)Trend
AI/Kokai platformKokai launched; strong case studies; incremental reach up >70%, CPA down ~27% in early results . Continued AI infusion; agile teams; weekly shipping; transitioning clients to Kokai Slower rollout (deliberate) to improve forecasting/deals; plan to move 100% of clients to Kokai in 2025 Continued investment; near‑term execution recalibration
CTV and OpenPathCTV fastest-growing; partnerships with Netflix, Roku, Disney, Fox; OpenPath adoption building OpenPath entering steep S-curve in 2025; Ventura OS announced to clean supply chain; CTV largest & fastest-growing channel Strengthening; ecosystem alignment improving
Retail MediaRapid expansion; shopper marketing budgets; retail data marketplace momentum Simplifying retail offering; case studies (Boiron 267% ROAS; Sulwhasoo 6x store visits) Scaling with simplification
Identity (UID2/EUID)UID2 reaching critical mass; adoption by Roku, DIRECTV, European publishers Broad expansions; audio and CTV heavily logged‑in; identity central to precision Strengthening adoption
Google/Open Internet dynamicsDOJ case watch; Google network deprioritization; opportunity for independent DSP Expect Google to distance from open Internet; TTD to promote objectivity and fill the gap Structural tailwind for TTD
AudioEarly-stage, under-monetized; Spotify partnership (UID2/OpenPath) “Best year for audio yet” targeted; creative gap bridged by AI Growing focus
InternationalInt’l growth outpacing NA; strong CTV in EMEA/APAC Int’l outpaced NA for 8th straight quarter Sustained outperformance
Capital allocationOpportunistic buybacks $235M FY buybacks; added $564M authorization in Jan 2025 (total future $1B) Increased capacity

Management Commentary

  • Jeff Green on the miss and recalibration: “For Q4…the reality is that we stumbled due to a series of small execution missteps, while simultaneously preparing for the future…we did the largest reorganization in company history in December” .
  • On supply-chain and OpenPath: “2025 [will] be the year OpenPath enters the steep acceleration phase…many of the major CTV players are aggressively implementing OpenPath now” .
  • On Ventura OS: “Ventura represents a major advance in streaming TV operating systems…minimizing supply chain hops and costs – ensuring maximum ROI” .
  • On AI and Kokai: “We revamped our product development…nearly 100 scrum teams…accelerate Kokai enhancements and complete the transition of 100% of our clients…this calendar year” .
  • CFO Laura Schenkein on profitability/cash and outlook: “Q4 revenue was $741 million…Adjusted EBITDA…47% margin…we expect revenue to be at least $575 million [in Q1]…Adjusted EBITDA…approximately $145 million” .

Q&A Highlights

  • What went wrong: Management “missed our own expectations” due to internal execution missteps while prioritizing long‑term platform changes; emphasized recalibration (reorg, agile product shipping, clearer client coverage) .
  • Google and competitive dynamics: TTD expects Google to distance from the open internet, creating a “big hole” TTD can fill; reiterated independent DSP objectivity as strategic advantage .
  • Amazon: TTD views Amazon’s DSP as structurally conflicted; sees partnership potential with Prime Video as a content publisher, but emphasizes buyer‑side objectivity for advertisers .
  • OpenPath and Sincera: OpenPath poised to scale in 2025; Sincera’s metadata will improve supply transparency and price discovery; only buying inventory with best/accurate description .
  • Political impact: Political contributed ~5% of Q4 spend; low single digits for FY; Q1 comps will lap the leap day and ~1% political benefit in Q1 2024 .

Estimates Context

  • Wall Street consensus (S&P Global) for Q4 2024 and Q1 2025 could not be retrieved due to SPGI daily request limits; as a result, we cannot provide formal beat/miss vs Street for this recap (values unavailable; attempted via S&P Global) [SPGI returned errors while fetching estimates].
  • Company guidance comparison: Q4 actuals missed company’s prior guidance (revenue ≥$756M; Adj. EBITDA ~$363M guided on Nov. 7) with actual revenue $741.0M and Adj. EBITDA $350.0M .

Key Takeaways for Investors

  • Near‑term: Q4 showed strong YoY growth but missed company guidance; expect Q1 seasonal and political normalization with revenue ≥$575M and Adj. EBITDA ~$145M; management flagged modest OpEx growth and modest deleverage in 2025 .
  • Medium‑term: CTV/OpenPath and UID2 adoption, plus Ventura OS and Sincera, should improve supply chain efficiency and measurement—key to sustaining share gains in premium video and audio .
  • Execution recalibration: December reorg, agile product processes, and clearer brand/agency coverage should reduce friction and accelerate Kokai rollout; watch for 100% Kokai migration milestones in 2025 .
  • Identity moat: UID2/EUID ubiquity across logged‑in channels (CTV/audio) strengthens precision and attribution; this is likely to widen TTD’s differentiation vs walled gardens .
  • Capital discipline: Strong cash generation supports $1B repurchase capacity and ongoing opportunistic buybacks, offsetting dilution while funding innovation (CapEx ~5% of revenue) .
  • Structural tailwinds: Potential Google retrenchment from the open internet and the premium content shift to biddable programmatic create durable TAM expansion for an independent buy‑side platform .
  • Watch items: Progress of OpenPath integrations with major streamers, audio monetization acceleration (Spotify and others), international CTV growth trajectory, and margin cadence through 2025 .