The Trade Desk sees quarterly revenues top $72m, bets big on connected TV and Asia
In its second quarterly earnings call since going public adtech outfit The Trade Desk reported revenues of $72.4m in the closing quarter of 2016, with full-year revenue totaling $203m and the company’s leadership voicing their ambitions over addressable TV, plus growth in Asia.
The Trade Desk saw 40X growth in spend on connected TV inventory in 2016, and is bullish on continued growth
Revenue for the quarter increased 70% year-over-year, with annual revenue growing at a rate of 78% year-over-year, with the company noting its that it is reducing its reliance on display advertising with its “continued omni-channel growth” driven chiefly by its native and mobile in-app ad buying activity (below).
“We surpassed $1bn in gross spend on our platform, grew revenue 78% to more than $200m, generated $75m of net cash from operating activities and completed a successful IPO,” said Jeff Green, The Trade Desk’s chief executive.
Across the industry, digital advertising grew 14%, while programmatic grew 19%, however, The Trade Desk grew by four times that amount, Green told investors, adding that it was crucial for adtech companies to outpace the rest of the market if they are to thrive in the current environment.
“Unlike most industries in this space, we’re not trying to disrupt this industry, we’re trying to enable it,” he said, adding that one of its strongest assets is that it is not conflicted, as it does not own any media, and that it would also aggressively invest in product development in 2017.
The Trade Desk does not aim to maximize profitability at the cost of market share at this point in time, Green later told investors, adding that mobile, connected TV and global expansion – particularly in Asia – were his three key priorities in the coming year.
He went on to explain that his company also had ambitions to show advertisers how buying mobile ads could be integrated into their wider campaign activity. For instance, The Trade Desk hopes to be able to show advertisers how their TV ad spend can drive awareness, and then subsequently drive a purchase on a mobile device, according to Green.
“We also think that mobile video is one of the most untapped opportunities in advertising,” said Green. “The only thing I’m more bullish about than the opportunities on mobile is TV … The future of TV is fully addressable over the internet, and that’s where we’re making our biggest bet. ”
Advising investors on the company's prospects going forward, Green stated that he believed that its business would continue to grow, but the necessary investments in the coming year, especially in bolstering its Asian footprint as well as engineering efforts in connected TV, led him to be slightly more conservative in his guidance.
The company's leadership went on to forecast that revenue for the opening quarter of 2017 would be $43m, with an adjusted e arnings before interest, tax, depreciation and amortization (EBITDA) of $2m, with its guidance for the full-year being: revenue of $270m; gross spend of $1.45bn; adjusted EBITDA of $72m.
"Growth in 2017 is more of a priority than it ever has been before ... so we're going to grab land," he said, adding that this is what had prompted its more conservative guidance when it comes to its financial metrics.