No. of Recommendations: 14
Thanks Denny.

Before commenting on the earnings, it is important to remember that TTD has at least a couple headwinds that we have mentioned in prior extensive threads:

1) Programmable advertising has suffered numerous company casualties in recent past so it will be some time before Wallstreet looks on this sector with anything but with a jaundice eye.

2) TTD will be very susceptible to any downturn in the economy since that will likely reduce advertising dollars. In that sense, TTD is dependent on the successes of the many companies it represents and not as a direct to consumer business.

3) TTD is focused on agencies and not directly with companies so in effect, it is removed once over again from the actual consumer and therefore has a more focused narrow customer base.

4) CRTO was mentioned in my original post about TTD and the thought that it would be reasonable to assume that TTD could at least reach parity to CRTO......that has now happened but largely because CRTO has been crushed from a high of $54 down to $35 since May 2017.....a loss of 35%. Note that CRTO reports before TTD and may serve in the future as a proxy to what we might expect with TTD.....they reported 33% revenue growth and they have a forward PE of 13 vs what I calculate for TTD of 22. But the fact is, TTD is growing faster and in sectors that are likely most important for future revenue potential like mobile, TV, Asia.

In the previous threads on TTD, it was clear about these risks and that TTD likely wasn't a longterm hold IMO.....I don't feel different about that now either. This is largely because its destiny is so dependent on 3 levels of consumers.....the buyer of goods, the seller of goods and the agencies representing the sellers. All three of these levels must be doing well for the 4th in line to get theirs....TTD. In this past quarter, all the major advertising agencies reported suboptimal earnings and Toys R Us went under in bankruptcy (on TTD's platform).

I would also offer over the observation that there was some painful stock action on TTD leading into the earnings.....drops of 6% and 8% in the two days prior to earnings announcement. That was probably not a good sign since either momentum players weren't going to take a risk of a miss or someone knew they would be a little light on guidance.

Note that CRTO has fallen 16% since the day before its announcement.....another potential sign that it could be a proxy for what to expect in TTD with future earnings.

So what did I like about the earnings?

These few items were the biggest wow for me:

One of the most exciting data points from the quarter was that for the first time, mobile, which includes in-app, mobile video and mobile web, was 40% of our total spend

That is HUGE imo because most of the younger generations get their advertising through mobile and in those countries without the more expensive landline infrastructure, mobile is the main vector.

We continue to gain market share in programmatic advertising. We continue to grow faster than any scale player in programmatic advertising. Year-over-year, our international operations grew over two times as fast as those of the United States

Taking market share is a very powerful message IMO.

Concerning our own data, we believe that we are sitting on one of the greatest assets on the Internet. As we speak, we receive over 9 million ad requests per second. We get to listen to most of the websites in the world and learn millions of things every second.

We have commented on this in the past.....the potential for AI blending with programmatic and the huge data trove that TTD has collected.

Adbrain is a cross-device technology that stitches together activities of the same user from all of their devices. This acquisition will help our customers better reach a user with unified messaging across all devices a user is using, whether it be a mobile phone, a desktop, web browser, connected TV or any other identifiable device.

Their first acquisition.....and attempt to bridge all communication devices into one advertising platform.

As we continue to expand globally, we’ve been watching carefully what impact Apple’s intelligent tracking is having on our business. Since its launch in September, we have seen no impact in our mobile spend as a result of Apple’s intelligent tracking prevention.

This was a big fear against programmatic advertisers but thus negative impact.

There is certainly much more in their earnings call but for me.....these things stood out.
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