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The Trade Desk $TTD Q3 2020 Results
Co-Founder & CEO Jeff Green:
“So far in 2020 we’ve seen several years of advertising disruption and innovation compressed into a few months. As a result, advertisers have become more deliberate and data-driven with every advertising dollar."
"As advertisers come under pressure to prove the ROI of their campaigns, to take advantage of the mass consumer shift to streaming TV, and to consider alternatives to user-generated content, our investments in these areas are paying off."
Revenue: $216, up 32% YoY (Q3 '19 was up 38% YoY)
Net Income: $41.2 up from $19.4 last year
Q3 Business Highlights:
Connected TV spend grew over 100% YoY
Mobile video spend grew about 70% YoY
Audio spend grew about 70% YoY
Customer retention >95% as it has for last 5 years
Building industry-wide collaboration and support for unified ID 2.0 which is "a new industry-wide approach to identity that preserves the value of relevant advertising, while putting user control and privacy at the forefront. Upgrade and alternative to third-party cookies."
Recent Unified ID 2.0 partnerships
Nielsen Holdings, a global measurement and data analytics company
Criteo S.S, a global tech company that powers marketers
LiveRamp Holdings, the leading data connectivity platform
Q4 2020 Outlook Summary:
Impact of COVID-19 on our Outlook: "Our business has been impacted by the COVID-19 pandemic that has significantly impacted advertiser demand. Like many companies that are ad-funded, we are facing a period of higher uncertainty in our business outlook. We expect our business performance could be impacted by issues beyond our control"
Revenue $287 - $291
Adjusted EBITDA at least $115
My Take:
Given their projected Q4 '20 revenue here's how YoY growth would look
Q4 '20: +34%
Q4 '19: +35%
Q4 '18: +56%
Here's how Fwd 1 yr PS ratio has looked
Current: ~35
Q4 '19: 13
Q4 '18: 12
**Fantastic company that checks almost every box for me but the company's growth rate appears to be decelerating and it's trading at almost 3x the FWD PS ratio as a year ago. I believe this company will continue doing well but at this valuation, I feel there are better places for my money.
*I normally don't worry much about valuation***
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