The same question Ethan had for NTNX, I have for TTD because of China.
We have seen NVDA, APPLE, Cat, etc warn of slow down in China.
We know TTD is/was growing like crazy and focusing on China.
Does the China slow down hurt TTD?
My first thought is no, because TTD helps companies be more efficient and cost effective in placing ads, so companies would want to do more of that not less in a slow down.
I am unsure though, so looking for other opinions.
Thanks,
Jim
Jim,
TTD has almost no business in China at all at present. To the extent that China’s slowdown impacts Indonesia and greater Asia then it could have an impact, but China has almost no revenue contribution at present for TTd.
Tinker
I don’t think so. China is their smallest market. Green believes it will become their biggest market eventually, but they have not included much expected revenue from China in their guidance because they don’t want to pressure their teams to move too fast…at least that’s how I understood Green’s comments on their Q3 18 earnings call.
During Q&A Green said:
“I absolutely believe that, at some point, China will be the largest market for us in the world. While today, it’s the smallest market that we’re in, we think that can change really rapidly as it will be the largest advertising market in the world.”
Then later in the answer after talking about TTD’s partnerships in China he said this:
“We’ve done little in terms of forecasting or planning only because we don’t want to put some pressure on our own teams to go faster than we should.”
So I think fear of a global/China slowdown and trade tensions might be currently tempering expectations/sentiment for TTD. I believe TTD is actually making advertising more cost effective because of their ability to hyper-focus thanks to all of their data points.
So basically, I think TTD will surprise during 2019 and beyond
it’s a top 4 position for me
From the last earnings call:
Jeff Green
"We are also seeing great progress in Asia and Europe. Many of our Asian office delivered record results in Q3 of 2018 with Hong Kong and Australia both growing over a 100% year-over-year. We recently announced partnerships with Tencent Social Ads or TSA and ITE. Both of these are major players in the Chinese market. Integrations with these premium inventory sources have already begun connecting multinational brands with more than $772 million Internet connected consumers through premium inventory is a very compelling value proposition to them.
We also recently signed an exclusive deal with ITE Taiwan, Taiwan has a massive user base that is highly engaged with its innovative video and gaming content and is one of the largest publishers in Taiwan because Taiwan is a market like others where Facebook and Google have a strong presence, but ITE Taiwan is a must have inventory source for digital marketers and that inventory is now available exclusively through The Trade Desk.
In Hong Kong, we recently ran a large CTV branding campaign for a large multinational skincare company via TVBs, myTV SUPER. myTV SUPER is the regions largest OTT gateway and serves about a third of Hong Kong’s households. The skincare advertiser’s goal was a high completion rate and a lower cost per completed view than with our current video campaigns.
The results were fantastic. The completion rate was nearly 100% and the cost per completed view was 62% lower than on the competing video platform. As advertisers see results like these, it’s no wonder, they’re moving incremental ad spend from other large search and social media companies over to The Trade Desks."
Jim
That statement about 100% growth in those offices, although exciting is almost meaningless because we don’t know off of what base.
But we do know China is TTD’s smallest market.
I concur that a China slowdown probably isn’t a big concern for TTD at present. Their Chinese revenue seems to be building from a tiny base at present, so a slowdown may only serve to better smooth out their growth curve over the next 2 to 5 years.
TTD is a high conviction position for me, challenging MongoDB for the top spot after NVDA failing me pretty badly and falling from its prior far and away #1 perch. I remain disappointed that the NVDA management failed so much at recognizing how big a benefit they were receiving from the crypto bubble. There are still a number of potential growth drivers in NVDA’s future, as mentioned in the shareholder letter that was put out in conjunction with the big guidance drop (sorry if that has already been covered by other posters).
https://nvidianews.nvidia.com/internal_redirect/cms.ipressro…
volfan84
long TTD, MDB, and NVDA