The Trade Desk continues to find success in 2021, as the Ventura-based advertising technology firm saw huge rises in both revenue and net income when the company announced its financial results for the second quarter on Aug. 9.
Co-founder and CEO Jeff Green said the company “significantly surpassed” its own expectations for the quarter ended June 30.
Revenue for the second quarter of 2021 was up 101% from the same quarter in 2020, from $139 million to $280 million. Net income saw a significant rise as well, up 90% year-over-year to $47.7 million in the second quarter of 2021, or 10 cents per diluted share.
Operating expenses grew as well, at $218 million for the most recent quarter, up from $155.1 million a year earlier. The increase was driven mostly by stock-based compensation.
The Trade Desk’s shares closed at $81.32 on Aug. 9, down 3.2% from the opening price, and crept up 0.5% in after-hours trading, after the earnings release.
“Our growth was across all channels and speaks to our position as the leading DSP [demand-side platform] for the open internet,” Green said during the company’s earnings call. “More of the world’s top advertisers and their agencies signed up or expanded the use of our platform, which continues to validate our business strategy.”
Connected TV, or streaming TV, is the primary reason for the successful second quarter for The Trade Desk, Green said. The Trade Desk currently has nearly 10,000 CTV advertisers on its platform, up more than 50% over the past year.
The company has seen the number of brands spending more than $1 million in connected TV advertising double year-over-year, as well as the number of brands spending more than $100,000, Green said.
The Trade Desk is also seeing connected TV growth around the world, as spending in Europe was up “tenfold” during the second quarter of 2021, he said.
“Every major market in the world is heading towards consumption of premium TV and movie content over the internet,” Green said. “I could not be more optimistic about our CTV business.”
Green also said advertisers are increasingly “embracing the open internet.” In June 2021, Google announced it would be delaying its phaseout of third-party tracking cookies until 2023, which led to a big jump in share price for The Trade Desk and other ad-tech companies.
The Trade Desk is still preparing for the end of third-party cookies on Google platforms, with a system it calls Unified 2.0. It’s the latest version of the company’s “Unified ID” system, which is a way to serve targeted ads without personally identifying information about users.
In recent months, three major advertising holding companies have announced their support for Unified ID 2.0, Green said.
The company’s launch of Solimar, its new platform, on July 7 came when Unified ID was reaching “critical scale in the market,” Green said.
Solimar consolidates The Trade Desk’s data marketplace into a single interface, allowing for easier on-boarding of first-party data and marketers to optimize their campaigns more easily. It took two years to develop.
“This is important because UID2 allows advertisers and partners to onboard their data in a manner that provides more consumer control and protects their data,” Green said. “UID2 is one leading example, but more important is the way that the industry is mobilizing to create a better approach to identity.”
Blake Grayson, CFO at The Trade Desk, said mobile ad spending was the company’s highest-earning channel in the second quarter of 2021, accounting for more than 40% of revenue, while connected TV accounted for more than 35% of revenue.
North America accounted for 87% of the spending, while the remaining 13% came internationally.
The company expects revenue of $283 million in the third quarter of 2021 and concluded the quarter with over $470 million in cash and cash equivalents.