The jump in **Cash and Cash Equivalents** in Q3 2024 was primarily driven by robust **operating cash flows**. In Q3 2024, TTD generated **$540 million** in net cash from operating activities, largely fueled by strong net income adjusted for non‐cash items and favorable working capital changes. This operational strength, coupled with **27% year-over-year revenue growth**, significantly boosted cash inflows, which more than offset the cash used in investing and financing activities (including share repurchases).  **[0001671933-24-000122_ttd-20240930.htm:25]** **[TTD_3407081_1]** **[TTD_3407081_9]** 

What drove the jump in Cash and cash equivalents in Q3 2024?

The **total assets** were lower in **Q1 2024** because they declined from **$4,888,687 thousand** at the end of **FY 2023** to **$4,663,797 thousand** in **Q1 2024** (a drop of **$224,890 thousand**). This reduction was primarily driven by a significant **decrease in accounts receivable** (a drop of **$251,033 thousand**), as well as **lower prepaid expenses and other current assets** (down by **$5,774 thousand**) and a **reduction in property and equipment, net** (down by **$10,871 thousand**). These negative factors were only partially offset by increases in cash and short-term investments.  **[0001671933-24-000051_ttd-20240508x8kexx991.htm:5]** **[0001671933-24-000059_ttd-20240331.htm:1]** 

Why were Total assets lower in Q1 2024?

The drop in **Total liabilities** in Q1 2024 was mainly due to a significant reduction in **accounts payable**. Accounts payable decreased from **$2,317,318 thousand** at the end of Q4 2023 to **$2,094,855 thousand** in Q1 2024—a decline of **$222,463 thousand**. This reduction was the primary contributor to the overall drop of **$227,226 thousand** in total liabilities, while other liabilities experienced relatively minor changes.  **[0001671933-24-000051_ttd-20240508x8kexx991.htm:5]** 

What contributed to the drop in Total liabilities in Q1 2024?

52d07fa4e45260dfb395b0cae6bb92b4a9cfd83faf68d23c4fa33816c3c14c3a

The **Operating Cash Flow** in Q4 2023 was lower due to several factors that impacted cash collections and payments. The company experienced a **$554 million increase in accounts receivable**, meaning cash was tied up due to delayed client collections. This was further exacerbated by a **$27 million increase in prepaid expenses and other assets**, which reduced available cash. Although a **$475 million increase in accounts payable** provided some offset by delaying payments to suppliers, it was not enough to overcome the cash drag from receivables and prepaid items. Additionally, a **$53 million decrease in operating lease liabilities** also contributed negatively to cash flow. These factors combined to result in the **lower net cash provided by operating activities** in Q4 2023.  **[0001671933-24-000014_ttd-20231231.htm:86]** 

Why was Operating Cash Flow so low in Q4 2023?

In Q2 2024, the decline in operating cash flow was driven by several factors. Despite an increase in **net income** (rising from **\$42,265 thousand** in 2023 to **\$116,689 thousand** in 2024) and slightly higher **stock-based compensation**, the overall cash flow was negatively impacted by significant changes in working capital. In particular, there were much larger increases in **accounts receivable** (**\$49,321 thousand** in 2024 versus **\$35,368 thousand** in 2023) and **prepaid expenses and other assets** (**\$52,064 thousand** in 2024 compared to **\$3,659 thousand** in 2023), along with a reduction in **accounts payable** (a decrease of **\$13,247 thousand** in 2024 compared to an increase of **\$50,995 thousand** in 2023) and a slightly larger decrease in **operating lease liabilities** in 2024 (**\$27,397 thousand** versus **\$25,102 thousand** in 2023) which all together contributed to the lower **net cash provided by operating activities** in Q2 2024.  **[0001671933-24-000089_ttd-20240808x8kexx991.htm:5]** 

Why did Operating Cash Flow decline in Q2 2024?

The documents do not provide a definitive reason for the negative Provision for Credit Losses in Q3 2024. They note that the significant decrease in the provision could stem from factors such as **improved credit quality of customers**, **better collections**, or **adjustments in the estimation methodology** for credit losses, but no specific details were provided in the documents.  **[0001671933-24-000120_ttd-20241107x8kexx991.htm:5]** **[0001671933-24-000122_ttd-20240930.htm:4]** 

Why did Provision for Credit Losses turn so negative in Q3 2024?

Financing cash flow was nearly neutral in **Q3 2024** because there was a marked **reduction in stock repurchases**—with repurchases declining to **$177,428** thousand compared to **$426,684** thousand previously—which significantly lowered cash outflows. This effect was largely offset by increased cash inflows from **stock option exercises** (**$127,690** thousand) and **Employee Stock Purchase Plan** proceeds (**$30,122** thousand), even as slightly higher outflows occurred from **taxes paid for restricted stock award settlements** (**$97,763** thousand versus **$55,397** thousand). These combined factors resulted in financing cash flows that were almost neutral for the period.  **[0001671933-24-000120_ttd-20241107x8kexx991.htm:5]** **[0001671933-24-000122_ttd-20240930.htm:26]** **[0001671933-24-000122_ttd-20240930.htm:4]** 

Why was Financing Cash Flow nearly neutral in Q3 2024?

97656bb668868eba021afc0feeed00eed1221126a0d869ffbb2e49b1f2682f00

**The surge in FY 2023 revenue was driven by a record gross spend of **$9.6 billion** on TTD's platform—reflecting increased advertiser activity and more campaigns—combined with a significant shift towards the rapidly growing **Connected TV (CTV)** channel. Additionally, strong performance in retail media through better utilization of first-party data, a consistent take rate, and robust international growth reinforced this upward trend.  **[0001157523-24-000260_a53896722ex99_1.htm:1]** **[0001671933-24-000014_ttd-20231231.htm:81]** **[TTD_3373712_9]** **[TTD_3373712_1]** **

What drove the surge in FY 2023 revenue?

The net income nearly tripled in FY 2023 primarily due to **significant revenue growth**, **improved operating efficiency**, and a **substantial increase in other income**. Revenue increased by **23%**, and operating income rose by **76%**, while total other income, driven largely by higher interest income, saw dramatic growth. These factors combined with a stable tax rate contributed to the net income jump from **$53,385 thousand in FY 2022** to **$178,940 thousand in FY 2023**.  **[0001157523-24-000260_a53896722ex99_1.htm:1]** **[0001671933-24-000014_ttd-20231231.htm:81]** **[0001671933-24-000014_ttd-20231231.htm:95]** 

Why did net income nearly triple in FY 2023?

The boost to **EPS in FY 2023** was driven by several factors. First, **revenue growth** played a key role, with revenues increasing by **23%** to reach **$1.95 billion** compared to FY 2022.  **[0001157523-24-000260_a53896722ex99_1.htm:1]**  Additionally, there was a significant rise in **net income** from **$53.39 million** in FY 2022 to **$178.94 million** in FY 2023.  **[0001157523-24-000260_a53896722ex99_1.htm:5]**  The company also maintained operational efficiency with a strong **adjusted EBITDA margin** of **40%** and implemented a **share repurchase program** worth **$646.6 million**, which helped reduce the number of outstanding shares and further boosted EPS.  **[0001157523-24-000260_a53896722ex99_1.htm:1]** **[0001157523-24-000260_a53896722ex99_1.htm:5]** 

What factors boosted EPS in FY 2023?

The turnaround in Q4 2023 was driven by several key factors. **Revenue growth** played a major role, as revenues increased by **23% year-over-year**—from **$491 million** in Q4 2022 to **$606 million** in Q4 2023—primarily driven by higher gross spend on platforms such as **Connected TV (CTV)** and retail media channels.  **[0001157523-24-000260_a53896722ex99_1.htm:1]** **[TTD_3373712_9]**  Furthermore, **operating expense management** improved as total operating expenses increased at a slower rate relative to revenue, with expenses as a percentage of revenue dropping from **93% to 90%**, thereby enhancing operational efficiency.  **[0001671933-24-000014_ttd-20231231.htm:81]**  The company also benefited from a **strong adjusted EBITDA margin** of **47%**, which underscored its effective balance between growth and profitability.  **[0001157523-24-000260_a53896722ex99_1.htm:1]**  Additionally, **channel and geographic growth**, notably in the CTV channel and international markets outperforming North America, contributed to the overall improvement in income from operations.  **[TTD_3373712_9]** **[TTD_3373712_8]** 

What drove the turnaround in operating income in Q4 2023?

The operating income in Q1 2024 was relatively low because, although there was strong revenue growth (a **28% increase** year-over-year to **$491,253,000**), the rise in operating expenses nearly matched this gain. Total operating expenses increased to **$462,596,000**, which meant that the expense-to-revenue ratio dropped only to **94%**. In addition, platform operations expenses saw a **22% increase** driven by higher hosting and personnel costs, further narrowing the margin between revenue and expenses.  **[0001671933-24-000051_ttd-20240508x8kexx991.htm:0]** **[0001671933-24-000059_ttd-20240331.htm:15]** **[0001671933-24-000059_ttd-20240331.htm:2]** 

Why was operating income so low in Q1 2024?

bdba2844d21b7822ac4a0ec46693a0aeac87609d975c9a599d734be294086317

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Trade Desk (TTD)

Financials