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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

______________________________

FORM 10-Q

______________________________

(Mark One)


x			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2022


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission File Number: 001-37879

______________________________

THE TRADE DESK, INC.

(Exact name of registrant as specified in its charter)

______________________________


Delaware			27-1887399
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

42 N. Chestnut Street

Ventura, California 93001

(Address of principal executive offices, including zip code)

Registrant’s telephone number, including area code: (805) 585-3434

______________________________

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Name of each exchange on which registered

Class A Common Stock, par value $0.000001 per share

TTD

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No x

As of October 31, 2022, the registrant had 445,287,977 shares of Class A common stock and 44,223,150 shares of Class B common stock outstanding.

Table o f Contents

THE TRADE DESK, INC.

QUARTERLY REPORT ON FORM 10-Q

INDEX


		Page
Part I.	FINANCIAL INFORMATION	3
Item 1.	Condensed Consolidated Financial Statements (Unaudited)	3
	Condensed Consolidated Balance Sheets as of September 30, 2022 and December 31, 2021	3
	Condensed Consolidated Statements of Operations for the Three and Nine Months Ended Se ptember 30, 2022 and 2021	4
	Condensed Consolidated Statements of Stockholders’ Equity for the Three and Nine Months Ended September 30, 2022 and 2021	5
	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2022 and 2021	6
	Notes to Condensed Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	23
Item 4.	Controls and Procedures	23
Part II.	OTHER INFORMATION	25
Item 1.	Legal Proceedings	25
Item 1A.	Risk Factors	25
Item 6.	Exhibits	50
Signatures		51

Table o f Contents

PART I. FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements

THE TRADE DESK, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except par values)

(Unaudited)


	As of September 30, 2022		As of December 31, 2021
ASSETS
Current assets:
Cash and cash equivalents	$	994,656	$	754,154
Short-term investments, net	326,745		204,625
Accounts receivable, net of allowance for credit losses of $10,244 and $7,374 as of September 30, 2022 and December 31, 2021, respectively	2,026,929		2,020,720
Prepaid expenses and other current assets	67,033		112,150
TOTAL CURRENT ASSETS	3,415,363		3,091,649
Property and equipment, net	166,078		135,856
Operating lease assets	230,917		234,091
Deferred income taxes	67,640		68,244
Other assets, non-current	43,956		47,500
TOTAL ASSETS	$	3,923,954	$	3,577,340
LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES
Current liabilities:
Accounts payable	$	1,651,447	$	1,655,684
Accrued expenses and other current liabilities	82,768		101,472
Operating lease liabilities	51,025		46,149
TOTAL CURRENT LIABILITIES	1,785,240		1,803,305
Operating lease liabilities, non-current	215,728		238,449
Other liabilities, non-current	8,698		8,280
TOTAL LIABILITIES	2,009,666		2,050,034
Commitments and contingencies (Note 10)
STOCKHOLDERS’ EQUITY
Preferred stock, par value $0.000001; 100,000 shares authorized, zero shares issued and outstanding as of September 30, 2022 and December 31, 2021	—		—
Common stock, par value $0.000001 Class A, 1,000,000 shares authorized; 445,219 and 439,206 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively Class B, 95,000 shares authorized; 44,235 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively	—		—
Additional paid-in capital	1,319,961		915,177
Retained earnings	594,327		612,129
TOTAL STOCKHOLDERS’ EQUITY	1,914,288		1,527,306
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	3,923,954	$	3,577,340

The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of these statements.

Table o f Contents

THE TRADE DESK, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Revenue	$	394,773	$	301,091	$	1,087,058	$	800,869
Operating expenses:
Platform operations	70,124		53,400		201,504		154,709
Sales and marketing	85,038		59,278		245,146		176,797
Technology and development	79,915		55,847		235,397		163,301
General and administrative	130,892		52,120		391,517		155,884
Total operating expenses	365,969		220,645		1,073,564		650,691
Income from operations	28,804		80,446		13,494		150,178
Other expense (income):
Interest expense (income), net	(1,741)		317		(1,321)		556
Foreign currency exchange loss (gain), net	43		1,153		(435)		1,004
Total other expense (income), net	(1,698)		1,470		(1,756)		1,560
Income before income taxes	30,502		78,976		15,250		148,618
Provision for income taxes	14,633		19,592		33,052		18,895
Net income (loss)	$	15,869	$	59,384	$	(17,802)	$	129,723
Earnings (loss) per share:
Basic	$	0.03	$	0.12	$	(0.04)	$	0.27
Diluted	$	0.03	$	0.12	$	(0.04)	$	0.26
Weighted-average shares outstanding:
Basic	487,963		478,101		486,168		475,496
Diluted	500,300		498,912		486,168		497,942

The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of these statements.

Table o f Contents

THE TRADE DESK, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands)

(Unaudited)


	Class A and B Common Stock			Additional Paid-In Capital		Retained Earnings		Total Stockholders’ Equity
	Shares	Amount
Balance as of December 31, 2020	473,401	$	—	$	538,778	$	474,367	$	1,013,145
Exercise of common stock options	1,794	—		12,621		—		12,621
Issuance of restricted stock, net of forfeitures and shares withheld for taxes	110	—		(17,080)		—		(17,080)
Stock-based compensation	—	—		52,985		—		52,985
Net income	—	—		—		22,642		22,642
Balance as of March 31, 2021	475,305	—		$	587,304	$	497,009	$	1,084,313
Exercise of common stock options	1,401	—		13,718		—		13,718
Issuance of restricted stock, net of forfeitures and shares withheld for taxes	409	—		(12,155)		—		(12,155)
Issuance of common stock under employee stock purchase plan	1,334	—		22,758		—		22,758
Stock-based compensation	—	—		46,015		—		46,015
Net income	—	—		—		47,697		47,697
Balance as of June 30, 2021	478,449	$	—	$	657,640	$	544,706	$	1,202,346
Exercise of common stock options	1,808	—		13,220		—		13,220
Issuance of restricted stock, net of forfeitures and shares withheld for taxes	307	—		(9,038)		—		(9,038)
Issuance of common stock related to acquisition	25	—		1,816		—		1,816
Stock-based compensation	—	—		35,086		—		35,086
Net income	—	—		—		59,384		59,384
Balance as of September 30, 2021	480,589	$	—	$	698,724	$	604,090	$	1,302,814

Balance as of December 31, 2021	483,441	$	—	$	915,177	$	612,129	$	1,527,306
Exercise of common stock options	2,395	—		24,408		—		24,408
Issuance of restricted stock, net of forfeitures and shares withheld for taxes	190	—		(13,428)		—		(13,428)
Stock-based compensation	—	—		125,415		—		125,415
Net loss	—	—		—		(14,598)		(14,598)
Balance as of March 31, 2022	486,026	—		1,051,572		597,531		1,649,103
Exercise of common stock options	657	—		7,387		—		7,387
Issuance of restricted stock, net of forfeitures and shares withheld for taxes	661	—		(9,768)		—		(9,768)
Issuance of common stock under employee stock purchase plan	946	—		25,547		—		25,547
Stock-based compensation	—	—		126,635		—		126,635
Net loss	—	—		—		(19,073)		(19,073)
Balance as of June 30, 2022	488,290	$	—	$	1,201,373	$	578,458	$	1,779,831
Exercise of common stock options	918	—

SEC Form 10-Q filed by The Trade Desk Inc.