The Trade Desk (TTD) held its Q3 2024 earnings call on November 7, 2024, at 5:00 p.m. ET. The session opened with prepared remarks, followed by a Q&A session involving various call participants. The operator began by explaining the call would follow a listen-only mode initially, with the opportunity for questions afterward. Chris Toth, Vice President of Investor Relations, thanked participants and introduced key speakers: Jeff Green, co-founder and CEO, and Laura Schenkein, CFO.
Jeff Green highlighted the company's impressive performance, noting a 27% revenue increase compared to Q3 the previous year. This growth marks an acceleration both sequentially and year-over-year. He emphasized the company's gains in market share, outperforming the industry and peers of varying sizes. A significant part of their growth trajectory is attributed to Connected TV (CTV), which remains the fastest-growing channel. Collaborations with companies like Disney, NBCU, Walmart Roku, LG, and Netflix play a crucial role in this growth, suggesting a promising future for this channel.
Green also discussed the broader advertising landscape and key changes fueling The Trade Desk's momentum. He pointed out that macroeconomic conditions, such as inflation and heightened fiscal policies, put pressure on CMOs. They must demonstrate real growth, aligning more closely with CFOs to justify marketing expenditures. AI's potential, Green noted, is another significant macro opportunity, with The Trade Desk's AI-driven product Kokai aiding in this transformative shift.
Legal challenges faced by major competitors like Google also present opportunities. Given Google's focus on other areas like search and YouTube, there is potential for The Trade Desk to capitalize on shifts in the advertising ecosystem, especially given Google's antitrust challenges. New dynamics in digital advertising and ad tech, seemingly favoring premium content over user-generated content, align with The Trade Desk's offerings.
Green reiterated the strategic advantage non-walled garden channels offer, especially in CTV. This year marks the beginning of showcasing these premium channels, emphasizing their value over user-generated content often found in walled gardens. The strategy ensures alignment with consumer behaviors, as major players like Netflix and Fox enhance their advertising capabilities.
Shifting to live sports, Green noted the channel's unpredictability and premium nature make it ideal for programmatic advertising. The Trade Desk is achieving success through major events, indicating robust impressions and engagement during key sporting weekends.
Furthermore, Green discussed retail media and how using purchase data can shift marketing dynamics, particularly illustrated by Amazon's model. Identifying the importance of partnerships and business planning in markets outside the United States, he emphasized the growing demand for transparency and efficiency in the supply chain.
Laura Schenkein presented the financials, reinforcing the company's strong performance with the backdrop of robust realignment to market needs. Revenue was reported at $628 million, showcasing a 27% year-over-year growth, emphasizing CTV's role as a major growth channel. International spending outpaced North American growth, showcasing broad market engagement.
The guidance for Q4 anticipates at least $756 million in revenue, a 25% year-over-year increase. With CTV, retail media, and political gaming proving to be critical areas, the trajectory remains sustainable with expected ongoing durability into 2025.
In closing, Jeff Green reflected on The Trade Desk's year and expressed optimism for future gains, noting that their platform continues to attract significant market share as brands move away from walled gardens towards data-driven precision. The Q&A session covered varied questions, with insights offered on factors influencing growth in different channels, partnerships across the open Internet, and strategic developments in place to sustain momentum. Overall, The Trade Desk is poised for continued success in capturing and expanding its market position.
