The Trade Desk Reports More than $1 Bil In Gross Spend On Its Platform In '16

The Trade Desk reported fourth-quarter earnings and fiscal-year 2016 earnings at the market close on Thursday. The global ad-tech platform reported more than $1 billion in gross spend on its platform for 2016. It also grew revenue 78% to more than $200 million, generated $75 million of net cash from operating activities, and completed its initial public offering.

Other highlights include mobile in-app and mobile video revenue which grew nearly 400% and 300% respectively year-over-year, while native spending increased 700% over the previous quarter, according to the company. In addition, spending more than doubled from the previous quarter for The Trade Desk’s connected TV business. The category includes broadcasters’ digital streams, early-stage addressable TV, linear options such as AT&T’s DirecTV Now, connected TV platforms iike Roku, Apple TV, and Amazon Fire TV.

“Our mission has always been to change the way all of advertising is bought. Today advertisers are wasting billions of dollars overloading consumers with uncoordinated or irrelevant messaging because media buying is done through multiple uncoordinated specialty targeting shops or with media companies directly,” stated Jeff Green, founder and CEO of The Trade Desk.



Green said he expects to see even more momentum from customers in the adoption of programmatic advertising on the company’s platform.

Green said on an earnings call that mobile, video, and global expansion represent the biggest growth opportunities for the company. The world of programmatic TV and connected TV also represent major opportunities, Green said. "The future of TV is on the internet, and we have to show fewer ads and make them more relevant." Moving to addressable and connected TV will pave the way for programmatic buying, according to Green. He stressed the company's objectivity in working in the TV space.

Connected TV demand and supply is still limited so doubling that revenue is insignificant next to growth in native or mobile, but Green said that boosting engineering and account investments in addressable TV beyond the profitability of the category is “an important land grab we’re staking out right now.”

Fourth Quarter and Fiscal Year 2016 Financial Highlights

For Q4 ending December 31, 2016, the company reported $72.4 million in revenue vs. $42.7 for the same period in 2015. For the entire year (2016), the company saw $202.9 million in revenue vs. $113.8% for the same period in 2015.

Other highlights include:

Continued Omnichannel Growth: The company reported that 2016 gross spend with non-display campaigns increased to more than half of gross spend for the first time driven by mobile and video channels. The company also said it remains focused on omnichannel solutions as the industry continues shifting toward transparency in programmatic buying.  Specific channel highlights include:

 --Native spend grew over 700% from Q3 2016 to Q4 2016.

--Mobile In-App grew over 400% from Q4 2015 to Q4 2016.

--Mobile video grew nearly 300% from 2015 to 2016.

--Connected TV grew over 100% from Q3 2016 to Q4 2016.

The Trade Desk said it ended 2016 with 566 active customers and customer retention stood at more than 95% during the quarter, the same as for the previous 12 quarters.

The company said it created new channels, product features, and improvements to its platform including new native and audio channels;  cross-device targeting capabilities; a user interface update; workflow improvement releases designed for media buyers to optimize and better leverage the platform; customizable reports; and reporting improvements to enterprise APIs.

Global Expansion: Also in Q4 2016, The Trade Desk opened its 17th office in Jakarta, Indonesia. More global offices are planned in 2017.

Going forward, Green stated: “The industry is continuing to see ad dollars shift to programmatic and our customers are expecting to spend significantly more with us than they did in 2016."

Due to more aggressive investments in technology including native, mobile, and video, as well opening additional offices, Green said he expects expenses to grow at a faster rate in 2017 and projects the company’s adjusted EBITDA to be about $72 million. “In 2017, growing and winning market share are more important than extracting profits.  Focusing on growth at least through the rest of this year will ultimately maximize profitability over the long-term."

The company said its financial targets for the full year 2017 are:

--Total Gross Spend of $1.45 billion.

--Revenue of $270 million.

--Adjusted EBITDA of $72 million.

For Q1 2017, the expectations are:

--Revenue of $43 million.

--Adjusted EBITDA of breakeven plus or minus $2 million.

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