TTD Q3 2020 results

Not sure how many people are still in TTD but I have been holding strong.

EPS $1.27 vs $.45 estimate and up from $.75 yoy

REvenue: $216.1 mill vs $181.3 mill estimate and up from $181.3 mill YoY

Q4 Guidance $287-$291 mill vs estimate $255.11 mill

Q4 will also see a large bump due to the elections and it usually being its biggest quarter each year.

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Thank you!!! finally some talks about TTD!!!

I am holding as well, the price target has been raised to $950+ and seems TTD is on its way to pass that price.

Congratulations!! :slight_smile:

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I was just about to hit post to a new thread on TTD and see you beat me to it, so I’ll just past in reply to this one to keep everything together:

The Trade Desk also released Q3 earnings after market yesterday

https://investors.thetradedesk.com/news-releases/news-releas…

So far in 2020 we’ve seen several years of advertising disruption and innovation compressed into a few months. As a result, advertisers have become more deliberate and data-driven with every advertising dollar.

The market is liking it as the stock is up more than 23% today, currently, after being up significantly earlier this week as well. I took my own advice from last week’s October monthly portfolio writeup, and I bought some additional '23 LEAPS on Monday, despite TTD already being my biggest holding. I kind of can’t believe the stock is already up 200+ dollars per share four days later.

We all knew Q2 2020, at -13% revenue, was going to be an outlier, given the pandemic, but it was hard to gauge exactly how quickly, and by how much, it would reaccelerate in subsequent periods.

Revenue rose +32% in this quarter Q3, and they guided for about +35% next quarter in Q4, which I expect they will beat handily, especially with the political advertising this quarter. And don’t forget that TTD has been consistently profitable for quite a few years already, so their growth keeps adding more and more to the bottom line.

They specified that political advertising will only be “mid single digits” of their revenue this year, so that gives me some confidence we won’t see too bad a related comp headwind in Q3 and Q4 of 2021 next year when moving into a non-election year. Hopefully the Tokyo Olympics (and a related boost in advertising) moves forward next year, which will help smooth out the impact.

It’s such an interesting dynamic where they have had major headwinds and major tailwinds related to COVID. Advertisers spent much less than this year, which had a huge impact on their revenue, albeit temporary. However, COVID simultaneously greatly accelerated the shift to more targeted, cost effective, programatic digital advertising (TTD’s core business), which will have an impact for years to come.

I’ve said it many times before, but I really encourage anyone interested in this company to listen to their earnings calls. The founder/CEO, Jeff Green, yesterday, not only gave me reassurance that I should continue to have TTD as my biggest holding, but I feel stronger than ever that this company is taking over the world of advertising, and will be so much bigger, and worth so much more, a few years from now.

A lot of people call Jeff a “salesman”, but I sincerely just don’t hear that. He’s passionate and upbeat and optimistic, yeah sure. But what draws me is that he says things in such plain english that anyone unfamiliar with their industry, or technology, or their market, can understand everything, the first the time you hear him talk. Listening to the TTD call yesterday live and then shortly after listening to the replay of the Alteryx call, it was like night and day. The new AYX CEO did nothing to make me feel like Alteryx is inspired and going to move mountains in the way I feel that The Trade Desk will. I will note tho that I felt better and better about AYX as the call went on, and eventually decided I should continue to hold the majority of my AYX stake, although I’m considering reallocating a small portion to get back into SMAR, which looks really interesting to me right now.

Congrats to those of you that are still holding TTD. I think their future keeps looking brighter and brighter…

-mekong

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Mekong,
I held TTD longer then most but I finally bailed and I think it was all the talk that Green wasn’t quite the great CEO I had envisioned. I bought the “he’s just a salesman with empty promises” argument.

I love holding very long term in companies with great visionary CEOs. I never bailed on Bezos, Jobs/Cooks, Hastings, but I did bail on Musk and Green. Yep it seems that Green might end up in that category.

Congratulations to you guys that held. I was out around 350 thinking I would get in again. Thought about it last week when the market sold off.

TMB

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@ATF Same here, held till 460 and then bailed. Similar regret on SQ. Sold way too early on that one as well. But looking at the threads on this and use those as motivation to not think about what could be but rather find the best businesses we want to own going forward and buy those and not dwell too much on what could have been. Hope this is not OT but please delete if it is. Thanks

Mekong and others,

Congrats! TTD has been on fire!

I exited in the mid to high 400s (P/S in 30s at that point) and I wanted to deploy funds to other positions.

My previous concerns with TTD were with regard to Apple’s IDFA issues, the fact that TTD doesn’t own first party data/platform, and generally low switching costs in the advertising world.

I also had some concerns with Green as CEO as others have mentioned previously.

But hey, you don’t argue with the market, and I’ll be taking a second look TTD, starting with their most recent call.

-Purplemist

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TTD is now my 3rd highest allocation at 8.16%, after TSLA and NFLX, over ZM, SHOP, AMZN, and CRWD.

I have been slow to buy NET (top stock on my watch list), and have stayed with FSLY.

Moving slowly helped in one case, and hurt in the other. IMO, only time will tell which is the best approach in terms of overall gains. And it is good that we all have different ways of going about this, it adds to the richness that we share.

Enjoy,
Brian

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TTD is my 2nd highest allocation (21%) after TSLA (22%) with TDOC (20%) a close third. I believe all three could easily 10X again from here.

The Trade Desk is THE LEADER in agnostic programmatic advertising. Jeff Green as CEO is a smart, pragmatic visionary who had told us repeatedly what is happening with ad trends, and then seizes the opportunities in a massive ways. The sky is truly the limit in this MASSIVE TAM. And I believe there is also more than a slight chance that TTD benefits from sentiment away from the walled gardens of Google and Facebook directly to TTD.

As an aside, I have also invested significantly this year into the sell-side agnostic programmatic advertising leader Magnite (MGNI; created from Q1 Telaria/Rubicon Group merger). I would highly recommend you look at that as the market cap is undervalued at <$1.5B. They have the same enormous opportunity as TTD, and have an enormous focus on connected TV advertising just like TTD. MGNI actually works with TTD from an ad ecosystem standpoint and are not competitors. MGNI reports earnings on Monday Nov 9 and may pop significantly moving forward as well despite advancing a bit in recent weeks.

All the best and Fool on!
-Rockleppard

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“As an aside, I have also invested significantly this year into the sell-side agnostic programmatic advertising leader Magnite (MGNI; created from Q1 Telaria/Rubicon Group merger). I would highly recommend you look at that as the market cap is undervalued at <$1.5B. They have the same enormous opportunity as TTD, and have an enormous focus on connected TV advertising just like TTD. MGNI actually works with TTD from an ad ecosystem standpoint and are not competitors.”

I also have a position in MGNI (~3%). After the merger it was beat down pretty hard by the reduction in advertising due to covid. I bought most of my shares in Aug/Sept. Chart is looking really strong and lots of funds were buying shares in Q2. As rockleppard said, the market cap is ~$1.2B vs ~ $34B for TTD. MGNI has to show they can execute after merging, but I think they have better potential to 10X at this point than TTD does from their current price. Monday earnings will show if they are on the right track or not.

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Yup - TTD is my second largest holding at 12% behind Shopify @ #1 at 17%.

Today leaves me up 1127% and up $172 was almost a triple spiffy pop (my average cost base was $66).

Green is a smooth and persuasive operator and an evangelist for the programmatic advertising industry - he is well regarded by employees and the analyst community alike. I haven’t been turned off at all by his charisma.

Advertising is one of the largest industries on the planet and both the tailwinds coming from the shift to digital and to programmatic advertising together with the future runway with decades to come (just like eCommerce) is an opportunity hiding in plain sight.

I top sliced at 475 and was about to at 675 recently (looking to cap exposure and channel some money into other investment opportunities as well as to capitalise on stretched valuation level) but missed the chance. That was a blessing in disguise.

Of course business was going to bounce back and of course election and olympics and the return of live sports and the conversion to connected tv are known drivers ahead of us.

The only issues I foresee are:

  1. walled gardens not opening up
  2. ad blocking software and O/S threats

The long term growth is almost a certainty, the risk almost nowhere, their position utterly dominant and the profitability record nicely established.

Unless I am needing to withdraw cash or avoid an extreme position developing, I am happy to just keep holding this indefinitely. It’s in the same bucket as Shopify for me.

Ant

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After reading board posts about Roku and TTD, I would like to contribute by raising the point that TTD’s TAM is not limited to the cap of hardware deals/sales like Roku. Which is why I’m invested in TTD vs Roku at 30% of portfolio.

Roku has a Limited TAM which is reliant on selling more TVs with Roku built-in or TV dongles sold. Any user with a Roku device will cap out on the amount of hours they will watch - the sky is not the limit here. The devices play a big role and who is to say that they will continue to execute well on the hardware partnerships and sales channels on top of being a digital ad play.

Not only this - their customers are of a more narrow customer segment. These are not the same consumers that are at a high budget to buy a high end LG, Samsung, Sony TV that already has streaming capabilities built in which is not Roku’s. Because of this, I believe that Roku’s audience base is more limited and as such advertisers would be advertising to that same income demographic.

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