Thoughts and Questions on TTD
The discussion on the board has made me sit down and look at The Trade Desk to decide whether I should have more than my current 4% position. I reread the last earnings report, and read the transcript of the conference call, and looked at the investor presentation.
I have to admit that Jeff Green, the CEO, is a great salesman for his stock, and makes it sound like there’s no way the company can go wrong, and indeed, with an election year coming and lots more political ads, I can see where he could be right.
However, what the f… happened this quarter???
How can a company growing CTV spend at 145%, and audio spend at “a stunning” 162%, and with mobile spend up 58%, and data spend up 63%, and cross-device spend up 132%, have revenue up just 38%??? It just doesn’t make sense! What isn’t he telling us? What is shrinking?
The Sept quarter sequential revenue rose just $4 million, from $160 to $164 million!!! That’s about 2.5%. That’s the smallest sequential growth from June to Sept, by far, in the last four years. Last year the percentage was double that, the year before it was more than triple that, the year before that it was 5 times this year’s sequential growth.
And don’t give me any nonsense about the law of big numbers. It was by far the smallest sequential gain in dollars too, by far. Even in 2016 when they were only coming off a base of $47 million in June, they managed to grow by $6 million sequentially to $53 million, and this year, coming off a base of $160 million, they only grew $4 million? With all those bragging segments with over 100% growth?
How can 2.5% sequential growth happen in a company growing all these segments by 162%, 145%, 132%, 63%, and 58%? I don’t get it!
And why did EPS grow only 10 cents yoy, when a year ago it grew 30 cents yoy??? Does that make any sense? And, oh yes, this June quarter it grew 35 cents, and in the Mar quarter (usually smallest) it grew 15 cents, and last December it grew 55 cents. And only 10 cents this quarter???
And he gave no explanation for what went wrong. Just everything is beyond wonderful!
I may build my position up to 4.5% or so, but with a lot of misgivings.
Can any of you explain it to me??? Please?