Q4 2023 Trade Desk Inc Earnings Call

Jeffrey Terry Green: Founder and CEO, Jeff Green.

Jeff.

Jeff: Hello, and thank you everyone for joining us today I'm really excited to discuss our strong finish to the year in Q4 reflect on the progress we made in 2023 and explain why I'm, so confident about our growth prospects in 2024 and beyond.

Jeffrey Terry Green: Hello, and thank you everyone for joining us. Today I'm really excited to discuss our strong finish to the year in Q4, reflect on the progress we made in 2023, and explain why I'm so confident about our growth prospects in 2024 and beyond. Total spend on our platform in 2023 was almost $10 billion, a record for us. Revenue in the fourth quarter was top $600 million. This is the first time we have ever crossed that mark in a single quarter.

Jeff: Total spend on our platform in 2023 was up almost $10 billion.

Jeff: Record for us.

Jeff: Revenue in the fourth quarter topped $600 million.

Jeff: The first time, we've ever cross that Mark in a single quarter.

Jeffrey Terry Green: This record spend helped drive revenue growth of 23% for the year, once again significantly outpacing the broader digital advertising market. And, of course, we had solid growth in an uncertain market in 2022, when many of our competitors were exiting the year comparatively flat. In fact, in Q4 of 2022, we grew by 24% year over year. So, 23% growth in 2023, on top of very strong growth in 2022, is once again leading the market. We generated adjusted EBITDA of over $770 million in 2023.

Jeff: This record spend helped drive revenue growth of 23% for the year once again significantly outpacing the broader digital advertising market and of course, we had solid growth in an uncertain market of 2022, when many of our competitors, we're exiting the year comparatively flat in fact.

Jeff: In Q4 of 2022, we grew by 24% year over year, so 23% growth in 2023 on top of very strong growth in 2022 is once again, leading the market.

Jeff: We generated adjusted EBITDA of over $770 million in 2023, we also generated $543 million of free cash flow.

Jeffrey Terry Green: We also generated $543 million of free cash. This relentless focus on profitability and growth allows us to keep investing in innovation, ensuring we are always bringing the best possible value to our clients, whether it's our game-changing COCHI launch or new approaches to identity and authentication for the open Internet. While there is much to celebrate about 2023, I'm even more excited about 2024 and beyond. I've never felt more confident heading into a new year.

Jeff: This relentless focus on profitability and growth allows us to keep investing in innovation, ensuring we are always bringing the best possible value to our clients, whether it's our game changing coke high launch or new approaches to identity and authentication for the open internet.

Jeff: While there is much to celebrate about 2023 I'm, even more excited about 2024 and beyond I've never felt more confident heading into a new year.

Jeffrey Terry Green: I believe we are uniquely positioned to grow and gain market share not only in 2024 but well into the future, regardless of some of the pressures that our industry is facing, whether it's cookie deprecation, growing regulatory focus on walled gardens, or the rapidly changing TV landscape. These industry shifts represent tremendous growth opportunities. Shifts in our nearly $1 trillion global advertising market are not dissimilar from shifts in all large markets, including equities. When macro changes come to the equities markets caused by economic velocity changes, Fed moves, or governmental changes, these sorts of macro shifts force the smart money to rotate. Or said another way, macro changes almost always force a revaluing of the market. Therefore, every investment is scrutinized and adjusted. Similarly, the internet is being revalued once again. We've seen this many times before.

Jeff: I believe we are uniquely positioned to grow and gain market share not only in 2024, but well into the future regardless of some of the pressures that our industry is facing whether it's cookie deprecation growing regulatory focus on walled gardens or the rapidly changing television landscape.

Jeff: These industry shifts represent tremendous growth opportunities for us shifts and are nearly one trillion dollar global advertising market are not dissimilar from shifts and all large markets, including the equities markets.

Jeff: When macro changes come to the equities markets caused by economic velocity changes fed moves or governmental changes. These sorts of macro shifts forced the smart money to rotate or said another way macro changes almost always force a revaluing of the market every investment is scrutinized and.

Jeff: Adjusted Similarly, the Internet has been revalued once again, we've seen this many times before during the pandemic people streamed more we got more inventory and the value of choice in CTV helped to create better performance. So the value of CTV went up.

Jeffrey Terry Green: During the pandemic, people streamed more. We got more inventory, and the value of choice in CTV helped create better performance, so the value of CTV went up. Dean Shipp, We saw it again in 2021 when Apple made changes to limit relevant advertising in its operating system, which impacted their browser and their mobile environment. We simply adjusted, and we bought into segments of the ecosystem with better price discovery and performance, which were still at times inside the Apple ecosystem, but often were not. Often, people looking at our massive global industry continually overlook significantly different strengths, weaknesses, and opportunities for different types of companies. Some wrongly think only big companies win, and smaller companies like us don't. That paradigm is completely wrong.

Jeff: <unk> shifted.

Jeff: We saw it again in 2021, when Apple made changes to limit relevant advertising and its operating system, which impacted their browser and their mobile environments, we simply adjusted and we bought two segments of the ecosystem with better price discovery and performance.

Jeff: Which we're still at times inside the Apple ecosystem, but often we're not.

Jeff: Often people looking at our massive global industry continually overlook significantly different strengths weaknesses and opportunities for different types of companies. Some wrongly think only big companies win and smaller companies like us don't that paradigm has completely wrong in general the current shoe.

Jeffrey Terry Green: In general, the current shifts will help companies with authenticated users and traffic, which also sit next to a large amount of advertiser demand. These macro changes hurt those, especially content owners and publishers who don't have authentication. So this year, CTV and audio have big opportunities ahead, and the rest have pockets of winners and losers. But nearly everyone will be either better off or worse off, and I believe 2024 will be a year of volatility for the global advertising market. And for those who are prepared, like the Trade Desk, it is an opportunity to win shares. Our platform is set up to make the most of any signal that can help advertisers drive relevance and value. Our platform now sees about 15 million advertising impression opportunities per second.

Jeff: <unk> will help companies with authenticated users and traffic, which also sit next to large amount of advertiser demand. These macro changes hurt those especially content owners and publishers, who don't have authentication.

Jeff: So this year CTV and audio have big opportunities ahead, and the rest has pockets of winners and losers, but nearly everyone will be either better off or worse off and I believe 2024 is a year of volatility for the global advertising market and for those who are prepared like the trade desk it as an opportunity.

Jeff: To win share.

Our platform is set up to make the most of any signal that can help advertisers drive relevance and value. Our platform now sees about 15 million advertising impression opportunities per second and we effectively stack rank all of those impressions better than anyone else in the world based on probability of performance.

Jeffrey Terry Green: And we effectively stack rank all of those impressions better than anyone else in the world based on probability of performance for any given advertiser without the bias or conflict of interest that plague most walled gardens. With UID2, COCHI, and advances in AI in our platform, we now do this more effectively than ever before. And our work in areas such as CTV, retail data, and identity is helping build a new identity and authentication fabric for the open internet. So, regardless of how the environment evolves around us, we will always be able to help advertisers find the right impression.

Jeff: To any given advertiser without the bias or conflict of interest that plague most walled gardens with you I'd to Coca and advances in AI in our platform. We now do this more effectively than ever before and our work in areas such as CTV retail data and identity are helping bill.

Jeff: <unk>, our new identity and authentication fabric for the open Internet.

Jeff: So.

Jeff: Regardless of how the environment evolves around us we will always be able to help advertisers find the right impressions for them.

Jeffrey Terry Green: A great example of this is the work that we're doing with HP. They initially started to think about new approaches to identity because of the imminent cookie deprecation in Chrome. But while the conversation started there, it quickly turned to how new identifiers such as UID2 could help manage campaigns across all channels, especially channels with high levels of user authentication. HP started using UID2 for CTV campaigns on Disney and Hulu, with Disney being a notable and early adopter of UID2. HP started with their first-party data that consumers had consented to provide after making a purchase. That data was then matched with UID-2s on our platform.

Jeff: A great example of this is the work that we're doing with HP. They initially started to think about new approaches to identity because of the imminent cookie deprecation in crohn.

Jeff: But while the conversation started there it quickly turned to how new identifiers, such as UAV too could help manage campaigns across all channels, especially channels with high levels of user authentication.

Jeff: HP has started using <unk> for CTV campaigns on Disney and Hulu Disney being a notable an early adopter of <unk> two.

Jeff: HP started with their first party data that consumers had consented to provide after making a purchase that data was then matched with UAV twos on our platform.

Jeffrey Terry Green: As a result, HP segmented its audience into specific groups, allowing better targeting and measurement of specific product campaigns with more accuracy. HP was then able to link ad exposure data from UID-2 identifiers with the device registration data in its CDP to connect consumers with actual online conversions and sales. That measurement proved to be more effective than the multi-touch attribution model that HP had been using, according to Caitlin Nardi, their head of programmatic for North America.

Jeff: As a result.

Jeff: Segmented its audience into specific groups, allowing better targeting and measurement of specific product campaigns with more accuracy. H. P. Was then able to link add exposure data from USD, two identifiers with the device registration data and its CVP to connect consumers with actual online conversions and sales.

Jeff: That measurement proved to be more effective than the multi touch attribution model that HP had been using according to Caitland Rd. There had a programmatic for North America.

Jeffrey Terry Green: This is a great example of how we're improving advertising outcomes for a major global brand by integrating new approaches to identity, authenticated audiences in high-growth channels such as CTV, and retail sales conversion data. It all started with a conversation about cookie deprecation, but the answer was something much more advanced, which speaks to the way that most major advertisers are innovating with us. And it's why we're embedding these innovations into COCA. As I've said before, walled gardens are not an optimal competitive environment for the open Internet, and the open Internet will continue to challenge the walled gardens as the place where the very first advertising dollar is spent because, for the most part, premium content is outside of the walled gardens, and all the questionable user-generated content is inside of the walled gardens. From cat videos to political rants to hate speech to cyberbullying.

Jeff: This is a great example of how we're improving advertising outcomes for a major global brand by integrating new approaches to identity authenticated audiences in high growth channels, such as CTV and retail sales conversion data.

Jeff: It all started with a conversation about cookie deprecation, but the answer was something much more advanced which speaks to the way that most major advertisers are innovating with us and it's why we're embedding these innovations into cotai.

Jeff: As I've said before walled gardens are not an optimal competitive environment for the open Internet and the open Internet will continue to challenge the walled gardens as the place where the very first advertising dollars spent.

Jeff: Because for the most part premium content is outside of the walled gardens and all the questionable user generated content is inside of the walled gardens from cat videos to political rands to hate speech to cyber bullying.

Jeffrey Terry Green: Walled Gardens simply used self-reported numbers in an increasingly opaque black box. Meanwhile, retail data and premium content are making the open Internet more compelling than ever. I predict this trend will accelerate during this year, which, of course, is an election year. I think it's worth spending the bulk of my time unpacking the transitions we are seeing in the industry, as it will highlight why we continue to outperform and why I'm so confident about our growth potential moving forward. To do that, I'd like to cover three main areas.

Jeff: Walled garden simply use self reported numbers in an increasingly opaque black box.

Jeff: Meanwhile, retail data and premium content are making the open internet more compelling than ever I predict this trend will accelerate during this year, which of course is an election year.

Jeff: I think it's worth spending the bulk of my time unpacking. The transitions we are seeing in the industry as it will highlight why we continue to outperform and why I'm. So confident about our growth potential moving forward to do that I'd like to cover three main areas first how advertising channels, such as CTV retail media and even.

Jeffrey Terry Green: First, how advertising channels such as CTV, retail media, and even digital audio are helping replumb the internet from an advertising perspective. Second, what the future of relevance in advertising looks like as the identity landscape evolves. And third, why COCHI helps us advance our growth opportunity in the context of all of this. In order to understand some of the more interesting drivers of our business, I think it's important to note the macro environment we're dealing with. For nearly all of 2023, there was uncertainty, particularly around economic growth rates and recessionary fears.

Jeff: Digital audio are helping re plumb the internet from an advertising perspective second what the future of relevance and advertising looks like as the identity landscape evolves and third why co Cai helps us advance our growth opportunity in the context of all of this.

In order to understand some of the more interesting drivers of our business I think it's important to note the macro environment, we're dealing with for nearly all of 2023, there was uncertainty, particularly around economic growth rates and recessionary fears.

Jeffrey Terry Green: In that environment, CMOs became much more reliant on their CFOs, and CFOs needed to make sure that every dollar spent was in service of growth, which meant CMOs had to focus more than ever on where they could achieve efficacy and deliver strong and provable return on ads. That pressure came at the same time that many CTV content owners around the world were seeing how much more valuable ad viewing subscriptions were to them than the higher priced ad-free subscribers. It is not a coincidence that our growth in 2023 was driven by ongoing strength in CTV and continued leadership through strong and expanding partnerships in retail and retail media. In each of these markets, advertisers can really put data to work and drive precision because they have a greater sense of confidence in who they are actually reaching. In CTV and other emerging channels, such as digital audio, there is a logged-in, authenticated user browser.

Jeff: That environment CMO has become much more reliant on their CFO and CFO <unk> needed to make sure that every dollar spent was in service of growth.

Jeff: Which means cmo's had to focus more than ever on where they could achieve efficacy and deliver strong and provable return on ad spend.

Jeff: That pressure came at the same time that many CTV content owners around the world, we're seeing how much more valuable AD viewing subscriptions were to them than the higher priced AD free subscribers. It is not a coincidence that our growth in 2023 was driven by ongoing strength in CTV and continued lead.

Jeff: Our ship through strong and expanding partnerships in retail and retail media.

Jeff: In each of these markets advertisers can really put data to work and drive precision because they have a greater sense of confidence and who they are actually reaching and CTV and other emerging channels such as digital audio Theres a logged in authenticated user base in retail media our platform works with actual.

Jeffrey Terry Green: In retail media, our platform works with actual authenticated sales data. CCD continues to be the fastest growing channel at scale for the trade. There's a ton of speculation right now about the future of the TV industry, but every major TV trend is good for us. Linear TV is shrinking, and users are streaming instead.

Jeff: <unk> sales data.

Jeff: CTV continues to be the fastest growing channel at scale for the trade desk, there's a ton of speculation right now about the future of the TV industry, but every major TV trend is good for us.

Jeff: <unk> linear is shrinking and users are streaming instead, we have built our business around streaming premium content.

Jeffrey Terry Green: We have built our business around streaming premium content. Subscriptions are moving to ad-funded models, and both consumers and content owners want them. As the industry oscillates back and forth from fragmentation to consolidation in all scenarios, we're partnering to provide demand from the biggest advertisers in the world. But one thing is clear through all of this: Ad-supported streaming is going to be an essential strategy for any successful TV provider moving forward. Nearly every major streamer has stated that they make more money from their ad-supported tiers than from their subscription only models, and that has been reported pretty extensively in recent weeks. With the price of subscription models continuing to rise, consumer fatigue is settling in. There's only so much disposable entertainment money to go around. According to the Wall Street Journal, 25% of U.S. streaming subscribers have canceled at least three subscriptions over the last two years, up from 15% for their prior two-year period.

Jeff: Subscriptions are moving to AD funded models and both consumers and content owners want that.

Jeff: As the industry oscillates back and forth from fragmentation to consolidation in all scenarios. We are partnering to provide demand from the biggest advertisers in the world.

Jeff: But one thing is clear through all of this AD supported streaming is going to be an essential strategy for any successful TV provider moving forward. Nearly every major streamer has stated that they make more money from their AD supported tiers than from their subscription only.

Jeff: And was reported pretty extensively in recent weeks with the price of subscription models continuing to rise consumer fatigue settling in.

Jeff: There's only so much disposable entertainment money to go around.

Jeff: According to the Wall Street Journal, 25% of U S streaming subscribers have canceled at least three subscriptions over the last two years up from 15% for their prior two year period.

Jeffrey Terry Green: In fact, by hiking the cost of the no-ad subscription service, Streamers are pushing viewers to the cheaper ad-supported options because they are more lucrative. There is only one way for the CTV ecosystem to mature. Content owners in CTV and audio get good at presenting three clear choices to consumers: pay for access to content by seeing a few relevant ads or pay more money to avoid them or some kind of hybrid of those. Consumers will have choice, and CTV and audio will find their coveted incremental users. Some want to pay with time, and some want to pay with money.

Jeff: In fact by hiking the cost of the no AD subscription services streamers are pushing viewers to the cheaper AD supported options because they are more lucrative.

Jeff: There is only one way for the CTV ecosystem to mature.

Jeff: Content owners in CTV and audio get good at presenting three clear choices to consumers pay for access to content by seen a few relevant ads or pay more money to avoid them or some kind of hybrid of those two.

Jeff: Consumers will have choice.

Jeff: And CTV and audio will find their coveted incremental users someone to pay with time and so I want to pay with money. There is enough pressure to fund the CTV content machines.

Jeffrey Terry Green: There's enough pressure to fund the CTV content machine that all of them have to get focused on a light ad load with high CPMs to create the best experiences for their users. While there is more than enough pressure on TV content owners to expand relevant ad programs, there is probably even more pressure on big players in the audience. 2024 will be a big year for audio, depending on the strategic choices that those players make. Just like CTV, digital audio benefits from a highly authenticated, logged-in audience. Also, like CTV, digital audio listeners are highly tuned in. Advertisers have a captive audience that is engaged with quality professional content. Whether it's a podcast or your favorite music, engagement is high.

That all of them have to get focused on a light AD load with high CPM to create the best experiences for their users.

Jeff: While there is more than enough pressure on TV content owners to expand relevant AD programs. There is probably even more pressure on big players of audio.

Jeff: 24 will be a big year for audio depending on the strategic choices that those players make just like CTV digital audio benefits from a highly authenticated logged in audience also like CTV digital audio listeners are highly leaned in advertisers have a captive audience that are engaged with quality.

Jeff: <unk> professional content, whether it's a podcast or your favorite music engagement is high and we're spending more and more time with audio streaming leaders in part.

Jeffrey Terry Green: And we're spending more and more time with audio streaming leaders, in part, because I believe they are in the very early innings of seeing the value of data-driven advertising and about to set out on the journey that CTV companies began years ago. Another area of strong growth for us in the fourth quarter was retail media. Again, a major reason for this is that advertisers got to work with their first-party data, in this case, real-world sales data. In the fourth quarter, we saw a major new shopper marketing budget shift to the trade desk as more advertisers started to move from a non-decisioned insertion order strategy, which has long been typical in the retail space to one that's highly decisioned and leverages retail media. A great example of an advertiser leaning into retail media is Samsung in Canada. A large percentage of Samsung's device and appliance sales take place through carriers and retailers.

Jeff: Because I believe they are in the very early innings of seeing the value of data driven advertising and about to set out on the journey that CTV companies began years ago.

Jeff: Another area of strong growth for us in the fourth quarter was retail media again, a major reason for this is that advertisers got to work with their first party data and this case real world sales data in the fourth quarter, we saw a major new shopper marketing budget shift to the trade desk as more advertisers started to move from a non <unk>.

Jeff: <unk> insertion order strategy.

Jeff: Which has long been typical in the retail space to one that's highly decisions and leveraging retail media.

A great example of an advertiser leaning in to retail media is Samsung and Canada, a large percentage of Samsung device in appliance sales take place through carriers and retailers in order to understand how advertising is influencing consumer purchases in those channels they needed a way to unlock their first party data and combine it with retail.

Jeffrey Terry Green: In order to understand how advertising is influencing consumer purchases in those channels, they needed a way to unlock their first-party data and combine it with retail data. Working with their agency, Starcom, we helped Samsung develop what they call the Samsung Sales Measurement Tool on our platform. When buyers make a purchase, they are prompted to open an account with Samsung and opt in to marketing engagement.

Jeff: Data working with our agency STAAR Com, we helped Samsung developed what they call the Samsung sales measurement tool on our platform when.

Jeff: When buyers make a purchase they're prompted to open an account with Samsung and opt in to marketing and engagement with the write permission. Samsung can then look back through their marketing activations across masses of consumers and start to attribute campaign activities to different stages of the purchase funnel. This helped samsung be much more precise.

Jeffrey Terry Green: With the right permissions, Samsung can then look back through their marketing activations across masses of consumers and start to attribute campaign activities to different stages of the purchase process. This helps Samsung be much more precise with their campaign activities in the future. Working with us, they can attribute the effectiveness of marketing directly to sales 19x more effective than they were previewed. I spend time on these growth drivers not only to give you a sense of why I'm so confident in our prospects but also to underscore how major advertisers are thinking about identity and authentication. Which brings me to my second point or second topic, the evolving world of identity. I don't think it's an understatement to say that there's considerable turbulence in the industry, driven by Google's recent decision to accelerate the deprecation of third-party cookies. It had previously been scheduled to begin deprecation at the end of March of this year, but it was moved up to the beginning of this year, in January.

With their campaign activities looking forward working with us they can attribute the effectiveness of marketing directly on sales 19 X more effectively than they were previously.

Jeff: I spend time on these growth drivers not only to give you a sense of why I'm. So confident in our prospects. This year, but also to underscore how major advertisers are thinking about identity and authentication.

Jeff: Which brings me and my second point or second topic, the evolving world of identity.

Jeff: I think it's an understatement to say that there is considerable thrash and the industry driven by Google's recent decision to accelerate the deprecation of third party cookies.

Jeff: It had previously been scheduled.

Jeff: To begin deprecation at the end of March of this year, but moved up to the beginning of the year in January.

Jeffrey Terry Green: I just want to be clear on one point: for all of the industry debate that's been caused by these changes, the Trade Desk stands to benefit. As I said a few minutes ago, we see approximately 15 million ad impression opportunities every second on our platform, and the vast majority of the ad impressions that we value don't have anything to do with third-party content. When you consider the fastest-growing channels of digital advertising, such as CTV or digital audio, they've never relied on... Retail data doesn't rely on cookies. What our clients care about is being able to reach their audiences with precision and relevance. And we help them do that using whatever signal is available to them.

Jeff: I just want to be clear on one point for all of the industry debate that's been caused by these changes.

Jeff: Trade desk stands to benefit.

As I said, a few minutes ago, we see approximately 15 million AD impression opportunities every second on our platform and.

Jeff: And the vast majority of the AD impressions that we value don't have anything to do with third party cookies.

Jeff: When you consider the fastest growing channels of digital advertising, such as CTV or digital audio they've never relied on cookies retail data doesn't rely on cookies, what our clients care about is being able to reach their audiences with precision and relevance and we help them do that using whatever signal is available to us.

Jeffrey Terry Green: And increasingly, as I've just discussed, the post-cookie world is one that will combine authentication, new approaches to identity, first-party data activation, and advanced AI-driven relevancy, all to create a new identity fabric for the Internet that is so much more effective than cookies ever were. The Internet is being re-plumbed, and our product offerings create the best outcome for all of the open Internet. The offerings of the Walled Gardens are often good for them and no one else.

Jeff: And increasingly as Ive just discussed the post cookie World is one that will combine authentication new approaches to identity first party data activation and advanced AI driven relevance tools all to create a new identity fabric for the internet that is so much more effective than cookies ever were the internet has been.

Jeff: Replant and our product offerings create the best outcome for all of the open Internet the offerings of the walled gardens, often are good for them and no one else.

Jeffrey Terry Green: Let's also remember that we've seen this movie before. Today, cookies have already been deprecated for around a third of all display impressions. Browsers such as Firefox and Safari made the transition several years ago. Neither of those shifts meaningfully affected our business. In fact, quite the opposite.

Jeff: Let's also remember that we've seen this movie before today cookies have already been deprecated for around a third of all display impressions browsers, such as Firefox in Safari made the transition several years ago.

Jeff: Neither of those shifts meaningfully affected our business in fact quite the opposite we continue to innovate our full range of ways for our clients to understand the relevant value of every advertising impression and price them. Accordingly in fact, the value we add to advertisers and agencies has gone up with all of these <unk>.

Jeffrey Terry Green: We continue to innovate a full range of ways for our clients to understand the relevance value of every advertising impression and price them accordingly. In fact, the value we add to advertisers and agencies has gone up with all these changes. Those shifts make it important to consider buying different impressions. And so we do.

Jeff: <unk> those shifts make it important to consider buying different impressions and so we do we're constantly objectively, helping buyers to know where to find value and performance as the relative value of add shifts to somewhere else we shift too.

Jeffrey Terry Green: We're constantly objectively helping buyers to know where to find value and performance. As the relative value of ads shifts to somewhere else, we shift, too. One example of this is the work we're doing with Unilever in Thailand.

Jeff: One example of this is the work we're doing with Unilever in Thailand. They were looking to raise awareness for their new detergent product as well as test new identifiers that could advance address ability in a post cookie environment using their own first party data as a seed de leveraged <unk> to target relevant audiences.

Jeffrey Terry Green: They were looking to raise awareness for their new detergent product, as well as test new identifiers that could advance addressability in a post-cookie environment. Using their own first-party data as a seed, they leveraged UID2 to target relevant audiences and measure against Unilever's traditional audience targeting method. The results showed a marked improvement over these traditional methods, which include cooking, across key areas of measurement, such as click-through rate, brand awareness, and cost per completed view. Interestingly, this work relied on UID2s created from encrypted phone numbers, which is a big part of the identity fabric in Asia. This UID2 work with Unilever is now expanding into additional markets in Southeast Asia. I know you're going to ask me specifically about Privacy Sandbox because nearly everyone else does, so I'll touch on it here.

Jeff: And measured against Unilever's traditional audience targeting methods. The results showed a marked improvement over these traditional methods, which include cookies across key areas of measurements such as click through rate brand awareness and cost per completed view interestingly. This work for light on <unk>.

Jeff: <unk> created from encrypted phone numbers, which is a big part of the identity fabric in Asia. This <unk> to work with Unilever is now expanding into additional markets in southeast Asia.

Speaker Change: I know youre going to ask me, specifically about privacy sandbox, because nearly everyone else does so I'll touch on it here.

Jeffrey Terry Green: I've written fairly extensively on it on our news platform, The Current, so you can see my thoughts there in more detail. But the CliffsNotes version is that I believe Google has missed an opportunity to build something better. Increased complexity with decreased functionality is hardly a compelling option. To publishers, they are effectively saying, do more work and make less money. I believe Privacy Sandbox is an incredibly complex product understood fully by very few people, which will likely degrade the Chrome user experience for publishers and brands, but especially for users.

Speaker Change: I've written fairly extensively on it on our news platform. The current so you can see my thoughts there in more detail.

Speaker Change: But the Cliffsnotes version is that I believe Google has missed an opportunity to build something better.

Speaker Change: Increased complexity with decreased functionality is hardly a compelling offering.

Speaker Change: So publishers they are effectively saying do more work and make less money.

I believe privacy sandbox is an incredibly complex product understood fully by very few people, which will likely degrade the chrome user experience for publishers and brands, but especially for users users personalization will break more often.

Jeffrey Terry Green: Users' personalization will break more. Users will begin to be required to log in seemingly every time. Browser-based publishers, including mobile, will likely have to do what so many e-commerce sites already do: ask for an email address when you arrive.

Speaker Change: Users will begin to be required to log in seemingly everywhere.

Speaker Change: Browser based publishers, including mobile will likely have to do what so many e-commerce sites already do.

Speaker Change: <unk>, an email address when you arrived.

Jeffrey Terry Green: Consumers will get a weaker experience for a while, and publishers will make less money until they change. However, this has a smaller impact on advertisers, especially those with quality first-party data, and it is more likely to help the trade desk than it is to hurt it. For many reasons, we will be better off, but here are a few of those to include.

Speaker Change: The consumers will get a weaker experience for a while and publishers will make less money until they change. However, this has less impact on advertisers, especially those with quality first party data.

Speaker Change: And it is more likely to help the trade desk than it is to hurt us for many reasons, we will be better off but a few of those to include first we are on the buy side.

Jeffrey Terry Green: First, we're on the bison, and we also represent the majority of Fortune 500 brands. We also invested in UID2 many years ago. We invested in AI many years ago. And our business is increasingly built around CTV, audio, and environments that are almost always authenticated. Fewer cookies don't really matter a ton for us.

Also represent the majority of Fortune 500 brands.

Speaker Change: So invested in <unk> too many years ago, we invested in AI, many years ago and our business is increasingly built around CTV audio and environments that are almost always authenticated.

Speaker Change: Fewer cookies doesn't really matter at ton for us it doesn't stop our work because we've been busy with other open internet pioneers building something much better.

Jeffrey Terry Green: It doesn't stop our work because we've been busy with other open internet pioneers building something much better. Where there is real risk is on the publisher side of the ad ecosystem, especially browser-based. Others have reported that declines in publisher CPMs in Chrome, where cookies have been deprecated, are around 30%. That's potentially devastating for publishers, of course. Not so much for advertisers who continue to have millions of choices a second on where to spend their ad dollars. But this threat to publishers comes as there are daily reports of journalism outlets laying off major swaths of their newsrooms amid a really tight business climate. While there may be many reasons for the struggles that journalism outlets are having, one of the dirty secrets of the industry is that authentication rates there are surprisingly low.

Speaker Change: There is real risk is on the publisher side of the AD ecosystem, especially browser based publishers.

Speaker Change: Others have reported that declines in publisher Cpm's in chrome where cookies have been deprecated are around 30% that's potentially devastating for publishers of course.

Speaker Change: Not so much for advertisers, who continue to have millions of choices, a second on where to spend their AD dollars, but this threat to publishers comes is there are daily reports of journalism outlets laying off major swaths of their newsrooms amid a really tight business climate, while there may be many reasons for the struggles that journalism outlets.

Speaker Change: Having one of the Dirty secrets of the industry is that a vindication rates. There are surprisingly low that means that they don't have any sense of who is visiting their destinations and they've been reliant on cookies and till now to create relevance for advertisers with.

Jeffrey Terry Green: That means that they don't have any sense of who is visiting their destinations, and they've been reliant on cookies until now to create relevance for advertisers. Without either cookies or publisher authentication, advertisers wouldn't value those ad impressions nearly as much. This is a wake-up call for the public. And the math is obvious; $1 CPM turns into $0.70 with cookie deprecation. We're often seeing $1 CPM turn into $1.30 when UID 2 is layered on top.

Speaker Change: Either cookies or publisher authentication advertisers won't value those AD impressions nearly as much. This is a wakeup call for publishers.

Speaker Change: The math is obvious $1 CPM turns into 70 with cookie deprecation.

Speaker Change: We're often seen a dollar CPM turned into a $1 30, when <unk> two is layered on it.

Jeffrey Terry Green: So when publishers get to consider the contrast of $1.30 versus $0.70, the math is more obvious than ever. In some cases, they only recently started looking at the math when the dollar suddenly turned into 70 cents.

Speaker Change: So when publishers get to consider the contrast of $1 30 versus 70.

Speaker Change: The math is more obvious than ever in some cases, they only recently started looking at the math when the dollar suddenly turned into 70.

Jeffrey Terry Green: So 2024 has started off as a year of action for our industry. On the positive side, we're seeing more publishers lean in to single sign-on authentication that they control. For example, we've seen a major uptick in publishers deploying OpenPath. These include Snopes, OK Magazine, Radar Online, and many others.

So 2024 has started off as a year of action for our industry.

Speaker Change: On the positive side, we're seeing more publishers lean into single sign on authentication tools that they control for example, we've seen a major uptick and publishers deploying open past these.

Speaker Change: These include Snopes, Okay magazine radar online and many others, we expect many more to deploy this in the months ahead.

Jeffrey Terry Green: We expect many more to deploy this in the months ahead. OpenPass lets publishers authenticate their regular visitors so they can help advertisers score the relevance of their ad information. All of this taken together brings me to my third point, our new COCHI platform. Much of what I've been talking about today is embedded into Kokai.

Speaker Change: Open past lets publishers authenticate their regular visitors. So they can help advertisers score the relevance of their ad impression.

Speaker Change: All of this taken together brings me to my third point, our new Coke high platform.

Speaker Change: Much of what I've been talking about today is embedded into Cotai in particular, cotai represents a completely new way to understand and score the relevance of every AD impression across all channels. It allows advertisers to use an audience first approach to their campaigns targeting their audiences wherever they are.

Jeffrey Terry Green: In particular, Kokai represents a completely new way to understand and score the relevance of every ad impression across all channels. It allows advertisers to use an audience-first approach to their campaigns, targeting their audiences wherever they are on the open internet. Our AI optimizations, which are now distributed across the platform, help optimize every element of the ad purchase process. COCHI is now live, and similar to the next wave in Solomar, it will scale over the next year.

Speaker Change: On the open Internet.

Speaker Change: Our AI optimizations, which are now distributed across the platform help optimize every element of the AD purchase process.

Speaker Change: <unk> is now live and similar to the next wave installed tomorrow. It will scale over the next year, it's our largest platform overhaul in our company's history and I could not be more proud of the incredible work of our product and engineering teams.

Jeffrey Terry Green: It's our largest platform overhaul in our company's history, and I could not be more proud of the incredible work of our product and engineering teams. In Q4, our product team personally visited four continents and met with hundreds of clients in each location. Europe, North America, with large showings in New York City and Chicago, as well as in Asia and Australia.

Speaker Change: In Q4, <unk> and our product team personally visited four continents and met with hundreds of clients in each location Europe North America with large show in New York City, and Chicago as well as in Asia and Australia.

Jeffrey Terry Green: After spending half a day in each location with almost 1,000 clients in total, almost every single one of our clients believes that CoChi is a major upgrade to our platform and to the ecosystem. We have never launched a product with this much change, and we've never launched a product with this much confidence that what we have represents a major advance in advertiser performance and that it is going to be enthusiastically adopted. So, let me wrap it up.

Speaker Change: After spending half a day in each location with almost 1000 clients in total almost every single one of our clients believe that co Kai is a major upgrade to our platform and to the ecosystem. We have never launched a product with this much change and we'd never launched a product with this much confidence that what we have.

Speaker Change: Represents a major advance in advertiser performance and then it is going to be enthusiastically adopted.

Speaker Change: So let me wrap up I've covered a lot of ground, but theres a lot going on in our industry and I thought it was important to reiterate why I feel so confident about our position and our prospects in closing I'd like to just summarize a few key points.

Jeffrey Terry Green: I've covered a lot of ground, but there's a lot going on at our end, and I thought it was important to reiterate why I feel so confident about our position and our process. In closing, I'd like to just summarize a few key points. First, agencies and brands are becoming more deliberate with their campaign budgets. They are shifting ad dollars to where they can be more data-driven and precise in everything they do. And this is driving them to sign JBPs with us at a record pace. Last year, when we exited last year, over a third of our business fell under a JV. Second, we are reinforcing our position as the ad tech AI leader. We've been embedding AI into our platform since 2016, so it's nothing new to us.

Speaker Change: Agencies and brands are becoming more deliberate with their campaign budgets. They are shifting AD dollars to where they can be more data driven and precise in everything they do and this is driving them to sign <unk> with us at a record pace exiting last year over a third of our business fell under a JBT <unk>.

Speaker Change: We are reinforcing our position as the AD Tech AI leader, we've been embedding AI into our platform since 2016.

Speaker Change: So it's nothing new to us, but now it's being distributed across our platform. So our clients can make even better choices among the 15 billion AD impression opportunities the second and.

Jeffrey Terry Green: But now it's being distributed across our platform so our clients can make even better choices among the 15 million ad impression opportunities and understand which of those ads is most relevant to their audience segments at any given time. Third, connected TV continues to be the fastest-growing channel of our business at scale and the key driver of overall omnichannel growth. And it's not just here in the U.S. We're seeing strong CTV growth across EMEA and Asia as more CTV inventory comes online. CTV companies are driving a ton of innovation in our industry, particularly around identity. And it's no coincidence that they have been among the earliest and most enthusiastic adopters of UID.

Speaker Change: And understand which of those ads are most relevant to their audience segments at any given time.

Speaker Change: Third connected TV continues to be the fastest growing channel of our business at scale and a key driver of overall omnichannel growth and it's not just here in the U S. We're seeing strong CTV growth across EMEA and Asia as more CTV inventory comes online.

Speaker Change: TV companies are driving a ton of innovation in our industry, particularly around identity and it's no coincidence that they have been among the earliest and most enthusiastic adopters of <unk>.

Jeffrey Terry Green: Fourth, retail media has become one of the fastest growing areas of our business, and we expect this to continue in 2025. Retail Partnerships and Retail Media are revolutionizing the way many advertisers think about connecting advertising to actual consumer action, and more and more of the world's leading retailers are now active on our platform. 5th Global Expansion

Speaker Change: Fourth retail media has become one of the fastest growing areas of our business and we expect this to continue in 2024 retail partnerships in retail media is revolutionizing the way many advertisers think about connecting advertising to actual consumer actions and more and more of the world's leading retailers are now active on our.

Speaker Change: <unk>.

Speaker Change: Fifth global expansion, we've made significant investments outside the U S. Over the last few years in CTV and in retail media, but also in our overall go to market strategy.

Jeffrey Terry Green: We have made significant investments outside the U.S. over the last few years in CTV and retail media, but also in our overall go-to-market strategy. Our business outside the U.S. grew at a much faster pace than here in the U.S. last year. We believe we are in a position to accelerate our international growth in many of the markets we serve. Sixth, we've seen a rapid uptick in adoption of UID2 and EUID as a new identity currency for the open internet from advertisers, publishers, and everyone who works with them. But perhaps even more encouraging, we're seeing significant performance improvements for advertisers who are using UID2, and this is accelerating adoption. Seventh, of course, 2024 stands to be a major year for political spending here in the United Kingdom. Since 2016, the Trade Desk has been a vital platform for leading political advertising.

Speaker Change: Our business outside the U S grew at a much faster pace than here in the U S. Last year. We believe we are in a position to accelerate our international growth in many of the markets we serve.

Speaker Change: Sixth we've seen a rapid uptick in adoption of <unk> and <unk> as our new identity currency for the open internet from advertisers publishers and everyone, who serves them, but perhaps even more encouraging we're seeing significant performance improvements for advertisers who are using <unk> and this.

Speaker Change: Accelerating adoption.

Speaker Change: Seven of course 2024 stands to be a major year for political spending here in the United States. Since 2016, the trade desk has been a vital platform for leading political advertisers. This year, we expect to gain more share in this segment and we believe that political spend will increase as the year progresses.

Jeffrey Terry Green: This year, we expect to gain more share in this segment, and we believe that political spend will increase as the year progresses. The Trade Desk is very well positioned as the advertising industry evolves. We built our business model on the belief that objectivity and aligning our interests with buyers would matter more and more over time. Objectivity matters more now than it ever has before. And that trend will continue as walled gardens continue to grow their conflict of interest faster than ever. We are executing well. We are poised for growth. 2023 was an excellent year.

Speaker Change: The trade desk is very well positioned as the advertising industry evolves, we built our business model on the belief that objectivity and aligning our interest with buyers would matter more and more overtime objectivity matters more now than it ever has before and that trend will continue.

Speaker Change: As walled gardens continue to grow there a conflict of interest faster than ever we are executing well we are poised for growth.

Speaker Change: 23 was an excellent year, we expect 2024 to be even stronger now I'm going to turn the call over to Laura to discuss our financials.

Jeffrey Terry Green: We expect 2024 to be even stronger. Now I'm gonna turn the call over to Laura to discuss our finances. Thank you, Jeff.

Laura: Thank you Jeff before I go through the details of the quarter I want to build on Jeff's sentiments regarding the strides we've made in 2023 and emphasize the consistency in our strong execution.

Laura: Before I go through the details of the quarter, I want to build on Jeff's sentiments regarding the strides we've made in 2023 and emphasize the consistency in our strong execution. Over the course of 2022 and 2023, the Trade Desk delivered revenue growth over 20% every quarter against what many would say were a challenging two years for the digital advertising industry. Whether it's our work in areas such as CTV, retail data, our platform upgrade in CoChi, AI advances in our platform, or helping build a new identity and authentication fabric for the open Internet, the Trade Desk remains resilient, and we continue to execute on its. Now on to our results. We ended the year with a strong Q4, and our teams have carried the momentum into the start of the year. Q4 revenue was $606 million, a 23% increase year-over-year.

Laura: Over the course of 2022 and 2023, the trade desk delivered revenue growth over 20% every quarter against what many would say were a challenging two years for the digital advertising industry.

Laura: Whether it's our work in areas such as CTV retail data our platform upgrading Coke hi, AI advances in our platform are helping build a new identity and authentication fabric for the open Internet the trade desk remains resilient and we continue to execute efficiently.

Laura: Now onto our results.

Laura: We ended the year with a strong Q4 and our teams have carried the momentum into the start of the year.

Laura: Q4 revenue was $606 million or 23% increase year over year.

Laura: Excluding political election spend, which was a mid-single-digit percent of revenue in Q4 2022, revenue grew 27% year-over-year. I am particularly proud of the $284 million of adjusted EBITDA we generated during the quarter, representing a margin of 47%, which helped drive full-year adjusted EBITDA margin to about 40% and full-year free cash flow of over $540 million. Our results in both Q4 and for the full year 2023 were another example of our ability to grow our top line and gain share while simultaneously investing in our business and platform to support future growth. For 2023, we ended the year with $9.6 billion in spend on our platform and about $1.9 billion in revenue, representing 23% revenue growth. As expected, our take rate in 2023 once again remained within a very consistent historical range.

Laura: Excluding political election spend which was a mid single digit percent of revenue in Q4, 2022 revenue grew 27% year over year.

Laura: I am, particularly proud of the $284 million of adjusted EBITDA, we generated during the quarter.

Laura: Representing a margin of 47%, which helped drive full year adjusted EBITDA margin to about 40% and full year free cash flow of over $540 million.

Laura: Our results in both Q4 and for the full year 2023 were another example of our ability to grow our topline and gain share while simultaneously investing in our business and platform to support future growth.

Laura: For 2023, we ended the year with $9 6 billion in spend on our platform and about $1 9 billion in revenue representing 23% revenue growth.

Laura: As expected our take rate in 2023, once again remained within a very consistent historical range.

Laura: We continue to execute on the model set out at the company's inception of keeping take rates consistent while substantially increasing the value that our platform provides. We remain focused on our proven strategy of being the default DSP for the open Internet, only representing the buy side and avoiding conflicts too often prevalent in our industry, as we continue our progression towards a total addressable market that is on track to reach $1 trillion. The shift of advertising dollars from linear to connected television continued to be a core driver of our business. In Q4, CTV again represented our fastest-growing channel at scale around the world, with particularly strong growth internationally.

Laura: We continue to execute on the model set out at the Companys inception of keeping take rate consistent while substantially increasing the value that our platform provides.

Laura: We remain focused on our proven strategy of being the default DSP for the open Internet only.

Laura: Only representing the buy side and avoiding conflicts too often prevalent in our industry as we continue our progression towards a total addressable market that is on track to reach one trillion.

Laura: The shift of advertising dollars from linear to connected TV continued to be a core driver of our business.

Laura: In Q4, CTV again represented our fastest growing channel at scale around the world with particularly strong growth internationally.

Laura: We saw strong momentum in retail media as we won incremental shopper marketing budgets and more advertisers continued to utilize retail data in their campaigns. And we continue to see positive results from increased utilization of first-party data, as the enhancements we've made throughout the year are helping deliver better outcomes for advertisers. From a scale-channel perspective, in Q4, video, which includes CTV, represented a mid-40s percentage share of our business and continues to grow as a percentage of our mix. Mobile represented a high-30s percentage share of spend during the quarter. Display represented a low double-digit percent share of our business, and audio represented around five percent.

Laura: We saw strong momentum in retail media as we won incremental shopper marketing budgets and more advertisers continued to lead utilized retail data in their campaigns.

Laura: And we continue to see positive results from increased utilization of first party data.

Laura: The enhancements we've made throughout the year are helping deliver better outcomes for advertisers.

Laura: From a scaled channel perspective in Q4 video, which includes CTV represented a mid 40 percentage share of our business and continues to grow as a percentage of our mix.

Laura: Mobile represented a high 30 percentage share of spend during the quarter display.

Laura: Display represented a low double digit percent share of our business and audio represented around 5%.

Laura: Geographically, North America represented about 88% of spend, and international represented about 12% of spend for the fourth quarter. It's worth noting that international growth again outpaced North American growth for the fourth consecutive quarter. As I mentioned, CTV across international regions was particularly strong during the fourth quarter and throughout 2023. Turning now to Expense. Q4 operating expenses, excluding stock-based compensation, were $340 million, up 29% from a year ago. During the quarter, we continue to make investments in our team and platform, particularly in areas like sales and marketing and technology and development as we position the organization for long-term growth. Income tax expense was $63 million in the fourth quarter, driven primarily by our profitability and non-deductible stock-based compensation.

Laura: Geographically North America represented about 88% of spend and international represented about 12% of spend for the fourth quarter.

Laura: It's worth noting international growth again outpaced North America for the fourth quarter in a row.

Laura: As I mentioned CTV across international regions, with particularly strong during the fourth quarter and throughout 2023.

Laura: Turning now to expenses.

Laura: Q4 operating expenses, excluding stock based compensation were $340 million up 29% from a year ago.

Laura: During the quarter, we continued to make investments in our team and platform, particularly in areas like sales and marketing and technology and development as we position the organization for long term growth.

Laura: Income tax expense was $63 million in the fourth quarter, driven primarily by our profitability and non deductible stock based compensation.

Laura: Adjusted net income for the quarter was $207 million, or $0.41 per fully diluted share. Net cash provided by operating activities was $91 million, and free cash flow was $64 million in QP. DSOs exiting Q4 were 101 days, down three days from a year ago. DPOs were 83 days, also down three days from a year ago. We ended the year with a strong cash and liquidity position. Our balance sheet had about $1.4 billion in cash equivalents and short-term investments at the end of the quarter. We have no debt on the balance sheet.

Adjusted net income for the quarter was $207 million or <unk> 41 per fully diluted share.

Laura: Net cash provided by operating activities was $91 million of free cash flow was $64 million in Q4.

Laura: Dsos exiting Q4 at 101 days down three days from a year ago.

Laura: <unk> were 83 days also down three days from a year ago.

Laura: We ended the year with a strong cash and liquidity position our.

Laura: Our balance sheet had about $1 4 billion in cash cash equivalents and short term investments at the end of the quarter, we have no debt on the balance sheet.

Laura: Finally, we repurchased $220 million of our Class A common stock via our share repurchase program during Q4. As you have seen in our press release, today we announced new authorization under our Shared Repurchase Program of up to $700 million, which includes $53 million remaining in the existing authorization. Given the strength of our balance sheet, coupled with the consistent cash flow generation of our business model, we plan to continue opportunistically repurchasing shares and offsetting dilution from employee stock issuance. Now, turning to our outlook for the first. We continue to see strong spend in our key areas, such as CTV and retail media. We estimate Q1 revenue to be at least $478 million, which would represent growth of 25% on a year-over-year basis. We estimate adjusted EBITDA to be approximately $130 million in Q1.

Laura: Finally, we repurchased $220 million of our class a common stock via our share repurchase program during Q4.

Laura: As you have seen during our press release today, we announced a new authorization under our share repurchase program of up to $700 million.

Laura: Which includes $53 million remaining in the existing authorization.

Laura: Given the strength of our balance sheet, coupled with the consistent cash flow generation of our business model. We plan to continue opportunistically repurchasing shares and offsetting dilution from employee stock issuances.

Laura: Now turning to our outlook for the first quarter.

Laura: We continue to see strong spend in our key areas, such as CTV and retail media.

Laura: We estimate Q1 revenue to be at least $478 million.

Laura: Which would represent growth of 25% on a year over year basis, we.

Laura: We estimate adjusted EBITDA to be approximately $130 million in Q1.

Laura: In terms of our operating plan, we plan to continue to invest in our business and grow head count efficiently.

Laura: In terms of our operating plan, we plan to continue to invest in our business and grow headcount efficiently. However, similar to 2023, we expect to grow headcount at a rate slower than revenue. Considering our unique ability to generate both strong top-line growth and profitability, we continue to manage the business with a balanced perspective that allows us to weigh investment opportunities while retaining flexibility for margin improvement. In closing, I'm very pleased with our performance in 2023 and our progress in 2024.

Laura: Similar to 2023, we expect to grow head count at a rate slower than revenue growth.

Laura: Considering our unique ability to generate both strong top line growth and profitability. We continue to manage the business with a balanced perspective that allows us to wait investment opportunities, while retaining flexibility for margin improvement.

Laura: In closing I'm very pleased with our performance in 2023 and are set up in 2024.

Laura: We are executing to capture growth within key secular drivers like CTV and shopper marketing, we're amassing industry support and partnerships for <unk> and open path.

Laura: We are executing to capture growth within key secular drivers like CTV and shopper markets. We're gaining industry support and partnerships for UID2 and OpenPath. Our international business is poised to continue helping drive our growth.

Laura: Our international business is poised to continue helping drive our growth.

Laura: We continue to gain share within the political vertical heading into the U S presidential election cycle.

We're adding more value for our customers with our biggest product release ever with Coke.

Laura: We continue to gain share within the political vertical heading into the U.S. presidential election cycle. We're adding more value for our customers with our biggest product release ever, Kaukai, and we continue to innovate our platform. We enter 2024 in a strong position to grow and gain more share, and we remain optimistic about the prospects for our business this year and in the years to come. That concludes our prepared remarks, and with that, Operator, let's open up the call for questions. At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you'd like to remove your question from. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the start button. One moment, please, while we poll for questions. Again, please press star 1 if you have a...

Laura: And we continue to innovate our platform.

Laura: We enter 2024 in a strong position to grow and gain more share we remain optimistic about the prospects for our business this year and in the years to come.

Speaker Change: That concludes our prepared remarks, and with that operator, let's open up the call for questions.

Speaker Change: Thank you at this time, we will be conducting a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue. You May press star two if you'd like to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up your handset before pressing.

Speaker Change: The Star Keys, one moment, please while we poll for questions. Once again. Please press star one if you have a question or comment and the first question comes from Sean <unk> with Sig. Please proceed.

Sean: Hey, guys, great job on the quarter and the results.

Sean: I just had one question.

Sean: Yes.

Sean: Talk about it's a little bit in your prepared remarks, and lowered it as well but.

Sean: Could you just talk maybe a little bit more detail about how you view.

Operator: This question comes from Shyam Patil. Please. Hey guys, great job on the quarter and the results. I just had one question. Jeff, you talked about this a little bit in your prepared remarks and Laura did as well, but could you maybe talk maybe a little bit more detail about how you view the state of the digital ad market today relative to how it was when you last reported your competitive positioning and how investors should be thinking about your growth in 2024. Thank you.

Sean: The state of the digital AD market today relative to how it was when you last reported.

Sean: Your competitive positioning and how investors should be thinking about your growth in 2024.

Speaker Change: Thank you.

Speaker Change: Absolutely first of all thanks, so much for the question second before I jump into the answer I just want to give a shout out to Brice <unk> chief of staff and his wife, Julia who are listening to this call right now from the hospital, where they are about to induce labor for their first child just wanted to say thank you for listening and thanks for all you do.

Jeffrey Terry Green: Absolutely. First, Shyam, thanks so much for the question. Second, before I just jump into the answer, I just want to give a shout out to Bryce, my Chief of Staff, and his wife, Julie, who are listening to this call right now from the hospital where they're about to induce labor for their first child. Just wanted to say thank you for listening. Thanks for all you do and wish you the very best.

Speaker Change: And wish you the very best.

With that let me jump in to answer your question.

Speaker Change: So the current AD environment.

Speaker Change: It's really amazing for the trade desk, because first of all it is a buyers market. So.

Speaker Change: Our competitive position couldnt be better because of course, we focus on the buy side.

Speaker Change: At our buy side, while we look at 15 billion impression opportunities every second we're also doing that with objectivity. So the fact that we don't own any media makes it so that we can objectively figure out what to buy.

Jeffrey Terry Green: With that said, let me jump in to answer your question. So the current ad environment... This is really amazing for the trade desk because, first of all, it is a buyer's market. So our competitive position couldn't be better because, of course, we focus on the buy side. And on the buy side, you know, while we look at 15 million impression opportunities every second, we're also doing that with objectivity. So the fact that we don't own any media makes it so that we can objectively figure out what to buy.

Speaker Change: When you couple that with our technology and our client service.

Speaker Change: Both are the best they've ever been and I think are have pretty consistently been credit as being the best in the space.

That makes it possible for us to perform like we have which is growing over 20% every quarter for the last eight quarters.

Jeffrey Terry Green: And when you couple that with our technology and our client service, both are the best they've ever been and, I think, pretty consistently credited as being the best in the space. That makes it possible for us to perform like we have, which is growing over 20 percent every quarter for the last eight quarters. I don't think there's any scaled ad-funded company, or walled garden, large or small, that can state that. And, of course, we've got all these unique tailwinds.

I think there is any scale AD funded company or walled garden large or small that can state that and then of course, we've got all these unique tailwind.

Speaker Change: That are helping the environment. They are also helping us.

Speaker Change: The first is that of course CTV.

Speaker Change: <unk> continues to accelerate and theres more and more going in to add or I'm, sorry into add on the TV.

Speaker Change: Sure.

Speaker Change: Subscribers that we're focused our streamers that we're focused on subscriptions, but did not have ads.

Jeffrey Terry Green: The first is that, of course, CTV, the shift continues to accelerate, and there's more and more going into ad-funded TV, where, you know, streamers that were focused on subscriptions that did not have ads are, for the first time ever, adopting ads, and they're adopting them more rapidly than ever before. And I anticipate that over the next year or two, we'll see the exact same phenomenon happen in the most premium parts of audio. Then, simultaneously, we have what's going on in retail media, where spend growth is also really strong. And then, of course, some of the macro trends that have been making it a little harder for things to grow outside the United States are better than they've ever been, making it easier for them to grow, and we're seeing some green shoots that we didn't before in many of the markets outside the United States. And then here in the U.S., this year's an election year, so that also brings in more political spending.

Speaker Change: Or for the first time ever adopting ads and are adopting them more rapidly than ever before.

Speaker Change: I anticipate that over the next year or two we'll see that exact same phenomenon happen in the most premium parts of audio.

Speaker Change: Simultaneously, we have whats going on in retail media.

Speaker Change: The spend growth is also really strong.

And then of course.

Speaker Change: There are some of the macro trends that have been.

Speaker Change: Making a little harder for things to grow outside the United States are better than they've ever been and making it easier for them to grow and we're seeing some.

Some green shoots that we didn't before and many of the markets outside of the United States and then here in the U S. This year is an election year. So that also brings in more political spend.

Speaker Change: There's been a lot of discussion about cookie deprecation and the future of journalism as we've just seen lots of things happening in journalism that our negative lots of layoffs parcel journalists being laid off but what that's driving people toward the realization that there needs to be.

Jeffrey Terry Green: There's been a lot of discussion about cookie deprecation and the future of journalism as we've just seen lots of things happening in journalism that are negative. Lots of layoffs, lots of journalists being laid off. But what that's driving people towards is a realization that there needs to be a consumer-friendly opt-in for authenticated traffic so that CPMs can not just stay the same but even get better. And so we're seeing just these amazing tailwinds around UID2. And then we're launching or rolling out the most sophisticated product that we've ever built. I think it's the best upgrade that we've ever made to any product that we've ever built.

Speaker Change: Consumer friendly opt in for authenticated traffic.

Speaker Change: CPM.

Speaker Change: Just stay the same but even get better and so we're seeing just these amazing tailwind around UAV too.

And then we're launching we're rolling out the most sophisticated product that we've ever built.

Speaker Change: It's the best upgrade that we've ever made.

Speaker Change: Any product that we've ever built.

Speaker Change: And as a result, we expect a strong Q1 for the same reason that we outperformed the rest of the digital advertising space.

Speaker Change: The last eight quarters.

Jeffrey Terry Green: And as a result, we expect a strong Q1 for the same reason that we outperformed the rest of the digital advertising space for the last eight quarters. So we feel like we're in an amazing position for 2024, and we expect to continue to grow and gain market share. Thanks, Shyam. The next question comes from Youssef Squali with Truist Securities.

Speaker Change: So we feel like we're in an amazing position for 2024, and we expect to continue to grow and grab market share.

Speaker Change: Thanks, Tom.

Speaker Change: The next question comes from Youssef Squali with Trust Securities. Please proceed.

Youssef Squali: Awesome. Thank you for taking the questions and congrats on the solid print so Jeff just as a follow up to you.

Youssef Squali: <unk> funded TV commentary, how do you think about the impact of Amazon's AD supported prime video offering on the CTV market in general and trade desks growth in particular their fears out there that just the massive influx of CTV inventory at a lower CPM could depress cpm's across the segment we got.

Jeffrey Terry Green: So, Jeff, just as a follow-up to your ad-funded TV commentary, how do you think about the impact of Amazon's ad-supported Prime video offering on the CTV market in general and Trade Desk's growth in particular? There are fears out there that just a massive influx of CTV inventory at a lower CPM could depress CPMs across the segment without necessarily driving more demand. So just how do you think about that for the industry and for you guys? You bet. Thank you.

Youssef Squali: Necessarily driving more demand. So just how do you think about that for the industry and for you guys in particular, thank you.

Speaker Change: You bet. Thank you.

Speaker Change: I don't think that the pool of inventory it will be that massive I do think it will be meaningful though and it will.

Jeffrey Terry Green: So I don't think that the pool of inventory will be that massive. I do think it will be meaningful, though. And it will further the supply or expand the supply. But rather than that, creating a huge imbalance, I do think it will just slightly tip the scale a bit more. And I would say, in a way, it officially tips the scale to a buyer's market where supply does outweigh demand. But I think overall, that's good for the ecosystem. And it does create an opportunity for us. But that does mean that CTV companies will have to compete more intensely to win attention and subscribers. That does mean that their ad experience needs to be better. That means fewer ads and more relevant ads. The only way to do that is with programming.

Speaker Change: Further the.

The supply or expand the supply.

Speaker Change: Okay.

Speaker Change: But rather than that creating a huge imbalance I do think it will just slightly tipped the scale a bit more.

Speaker Change: And I would say in a way it officially tipped the scale to a buyers market where supply does outweigh demand.

Speaker Change: But I think overall, that's good for the ecosystem and it does create opportunity for us.

Speaker Change: That does mean that <unk> companies will have to compete more intensely.

To win.

Speaker Change: Our attention and subscribers and that does mean that their ad experience needs to be better.

Speaker Change: And that means fewer ads and more relevant ads.

Speaker Change: The only way to do that is with programmatic.

Jeffrey Terry Green: I believe that's part of the reason why every major streaming service that offers ads beyond their own sales team has adopted and announced a partnership with UID2, and all of them are seeing higher CPMs as a result. So it does mean that the market is shaping in a way that gives more ads or awards more wins, if you will, to the companies that allow for UID2 to be used and allow for more relevant advertising. So, to me, the way that this ends for every successful streamer is to basically run an auction that has identity attached to it, not so that they have to share any data about that impression or that user, but so that an advertiser can bring their own data about that user so that they can show a relevant ad.

Speaker Change: I believe that's part of the reason why every major streaming service.

Speaker Change: Offers adds beyond their own sales team has adopted and announced partnership with new items too.

Speaker Change: And all of them are seeing higher CPM as a result.

Speaker Change: So it does mean that the market is shaping in a way that.

Speaker Change: Sure.

Speaker Change: But again, it's more.

Speaker Change:

Speaker Change: <unk> adds or more awards more wins, if you will to the.

Speaker Change: The companies that allow for <unk> to be used and allow for more relevant advertising.

Speaker Change: To me the way that defense for for every successful streamer is to basically run an auction that has identity attached to it so that they have to share any data about that impression of that user and.

Speaker Change: An advertiser can bring their own data about that that user so that they can show a relevant AD and then the AD load can be lighter.

Jeffrey Terry Green: And then the ad load can be lighter and more relevant, and that creates the optimal experience for the streaming service. I think this move by Amazon will move in that direction. What they're doing is not that unique, in my view. Yes, they're adding a greater amount of inventory, but they also have a dilemma, which is that, unlike Netflix, who can raise their prices more regularly because it's attached to Amazon Prime, it makes it harder for them to do that, which means they've got to play with a different dial, which is the volume of ads.

Speaker Change: And more relevant and then that creates the optimal experience.

Speaker Change: For the streaming service.

Speaker Change: I think this move by Amazon will move in that direction, what Theyre doing is not that unique in my view.

Speaker Change: They are adding.

Speaker Change: Greater amount of inventory, but they also have a dilemma, which is that unlike that flex who can raise their prices more regularly because it's attached to Amazon prime that makes it harder for them to do that which means they've got to play with a different Io, which is the volume of ads.

Jeffrey Terry Green: And as a result, we will see them affect, in a way, the more competitive nature of the landscape because they're affecting the overall supply. But again, I think that's good. It accelerates the race.

Speaker Change: And as a result, we will see the effect in the way the more competitive.

Speaker Change: The competitive nature of the landscape because theyre effecting the overall supply, but again I think thats. Good accelerates the race it will create a better experience for users and more clearly defines what the competition is all about which is them running an auction that includes our participation because we largely represent a fortune 500 and the most.

Jeffrey Terry Green: It will create a better experience for users, and it more clearly defines what the competition is all about, which is them running an auction that includes our participation because we largely represent the Fortune 500 and the most premium ads that you can bring to a quality streaming service. Thank you for the question. Thank you, Jeff. The next question comes from Shweta Khajuria from Evercore ISI. Please proceed.

Speaker Change: Premium adds that you can bring into.

Speaker Change: Quality streaming service. Thank you for the question.

Speaker Change: Thank you Deb.

Speaker Change: The next question comes from Shredder could urea from Evercore ISI. Please proceed.

Shredder Urea: Okay. Thanks, a lot for taking my question, Jeff could you. Please comment on just your view our revised view if there is one on cookie Deprecation U.

Jeffrey Terry Green: Okay, thanks a lot for taking my question. Jeff, could you please comment on just your view, or revised view, if there is one, on cookie deprecation? You know, we read your blog post on the Current on this a few weeks ago. Basically, there is a healthy level of debate on the impact cookie deprecation could have on Trade Desk, especially as the year goes by. Could you please help us think through the puts and takes of that and why Trade Desk may not be as impacted or how much it would be impacted? Thanks a lot.

Shredder Urea: We read your blog post on the current on this a few weeks ago.

Shredder Urea: Basically there is a healthy level of debate on the impact cookie deprecation could have on trade desk.

Shredder Urea: Especially as the year goes through could you. Please help us think through the puts and takes of that and Y grade desk may not be as impacted or how much it would be in fact, it. Thanks a lot.

Jeffrey Terry Green: Oh, you bet. Thanks. I appreciate the question. I actually was hoping we would get asked this question so that we could talk about the topic. And I know there's been so much written in our space and even in the general public about cookie deprecation, but also about the product that Google has launched, the privacy sandbox. Those two things are two separate things. I think it's important to talk about them differently, even though I believe they're doing them at the same time for a reason. They are, in fact, two different things.

Speaker Change: You bet. Thanks, Ron I. Appreciate the question I must say I was hoping we would get asked this question. So that we can talk about the topic.

Speaker Change: And I know theres been so much written.

Speaker Change: In our space and even in the general public about Cookie deprecation, but also the product that Google has launched privacy sandbox. Those two things are two separate things I think it's important to talk about them differently, even though I believe theyre doing them at the same time for a reason they are in fact, two different things so cookies are.

Jeffrey Terry Green: So cookies are being deprecated. That does mean that it makes it a little bit harder to create personalized experiences if you do nothing. But as a result, everybody that touches that, some will be better off, and some will be worse off. And that, especially, is a reference to publishers. So there are many publishers that have almost 100% authentication. So almost everyone in CTV has almost 100% authentication, and they are not affected by cookies. So if you look at the 15 million ad opportunities every second, and you look at the way that the dollars are divided up, a substantial amount of the dollars and the impressions that we care the most about often come from premium channels like audio and CTV, and those are almost always 100% authenticated.

Speaker Change: Being deprecated.

Speaker Change: That does mean that it makes it a little bit harder to create personalization if you do nothing.

Speaker Change: But as a result, but everybody that touches that some will be better off and some will be worse off.

Speaker Change: And that especially.

Speaker Change: As a reference to publishers.

Speaker Change: There are many publishers that have almost 100% authentication. So almost everyone in CTV has almost 100% authentication and they are not affected by cookies.

Speaker Change: If you look at the 15 billion AD opportunities every second and you look at the way. The dollars are divided up a substantial amount of the dollars and the impressions that we care. The most about often come from premium channels like audio.

Speaker Change: And CTV and those are almost always 100% authenticated, but then there's also a millions that come from other channels that are also authenticated. So those two will get a premium and those are all of those prices are going to go up.

Jeffrey Terry Green: But then there are also millions that come from other channels that are also authenticated, so those, too, will get a premium, and those prices are going to go up, and it's becoming more important that every publisher have an authentication strategy and an identity strategy. And so more and more publishers are talking about how they adopt UID2, how they adopt our single sign-on that we've launched publicly, although it's in closed beta right now, called OpenPath. But what happens at the end of this is, we've seen from those that have reported what happens when you remove cookies is that their CPMs go down. We've heard numbers from 30 to 50 percent.

Speaker Change: And it becomes more important that every publisher habit authentication strategy.

Speaker Change: And then identity strategy and so more and more publishers are talking about how they adopt <unk>, how they adopt our single sign on.

Speaker Change: We launched publicly although it's in closed beta right now called open path.

But.

Speaker Change: What what happens at the end of this.

We've seen from those that have reported what happens when you remove cookies.

Speaker Change: CPM go down, but we've heard numbers from 30% to 50%. So if you were getting a dollar before youre getting maybe 50 60.

Jeffrey Terry Green: So if you were getting a dollar before, you're getting maybe 50 cents, 60 cents. If you look at the reports that we've shown on what happens if you use UID 2, those go from $1 to $1.30.

Speaker Change: If you look at the reports that we've shown on what happens if you use <unk>.

Speaker Change: Those go from $1 to $1 30.

Jeffrey Terry Green: So, in a way, this is helping publishers to see the significance of both UID2 and the need to change, because on that small amount of traffic that Google's taken away cookies from, they see that deprecation, and it's a lot easier to compare 60 cents to $1.30 or $1.40 than it is to compare 60 or 70 cents to $1. So that disparity makes it more likely that publishers will actually act on that. So from our standpoint, though, and this is a part that I think people often get wrong, when you're looking at 15 million ad opportunities every second, and let's just say that we have identity on just to keep numbers around half of it. And if that's going to go down by 10% ish, or 10 to 15%, which represents, let's just say, the exact amount of our display business, which is where cookies come from.

Speaker Change: So in a way this is helping publishers to see the significance of both <unk>, but also the need to change because on that small amounts of traffic that Google has taken away cookies on.

Speaker Change: They see that deprecation, and it's a lot easier to compare 60.

Speaker Change: Two $1 30, or $1 40 than it is to compare the 60 or 70 cents to one dollar.

Speaker Change: So that's a fairly makes it.

Speaker Change: More.

Speaker Change: Likely that publishers.

Speaker Change: Actually act on that so.

Speaker Change: From our standpoint, though and this is a part but I think often people get wrong. When you are looking at $15 million of opportunities every second and let's just say that we have identity.

Speaker Change: Just to keep numbers around half of it and if that's going to go down by.

Speaker Change: 10% ish.

Speaker Change: 10% to 15%, which represents let's just say the exact amount.

Speaker Change: Our display business, which is where cookies tempo.

Jeffrey Terry Green: And if it's in that 10 to 15% range, but we have some forms of authentication on a significant portion of that, you're looking at like, eight, 9% that we wouldn't have access to anymore, maybe call it 10%. Okay, well, then of that 15 million, instead of looking at 7 million, 7.5 million, we look at 6.5 million. What does that change about our overall business? Almost nothing.

And if it's in that 10% to 15% range, but we have some forms of authentication on a significant portion of that you are looking at like eight 9%, but we wouldn't have access to anymore, maybe call. It 10%, Okay. Well then of that $15 million instead of looking at 7 million seven $5 million, we look at $6 5 million.

Speaker Change: What does that change.

About our overall business almost nothing.

Jeffrey Terry Green: So I think many have not understood that this is affecting those in the ecosystem at very different rates. And really, this is a revaluing of the internet, and some sites are becoming more valuable, and some are becoming less valuable. And just like anything in the equity markets, when you revalue it, the people who are in charge of assigning that value or doing the buying and selling, that's an opportunity for them to add value. And this, for us, is an opportunity for us to add value. We are helping our buyers figure out what to buy, and I would argue we're adding more value than we ever have as a result of it. And so, as a result, this is very good for us. Thank you so much for the question. Thanks, Juana. Up next, we have Vasili Karasov with Cannonball Research. Thank you. Good afternoon.

Speaker Change: So.

Speaker Change: I think many have not understood that.

Speaker Change: This is <unk>.

Speaker Change: Affecting those in the ecosystem at very different rates.

Speaker Change: And really this is a revaluing of the internet.

Speaker Change: Some sites are becoming more valuable and some are becoming less valuable and just like anything in the equities markets. When you revalue. It the people who are in charge of assigning that value or doing the buying and selling that as an opportunity for them to add value.

Speaker Change: And this for US is an opportunity for us to add value, we are helping our buyers figure out what to buy.

Speaker Change: I would argue we're adding more value than we ever have as a result of it and so as a result. This is very good for us. Thank you. So much for the question thanks to water.

Speaker Change: Up next we have <unk>.

Sui Carousel: Excuse me the Sui Carousel with Cannonball Research. Please proceed.

Sui Carousel: Thank you good afternoon Joe.

Jeffrey Terry Green: Jeff, thank you for the helpful color on the cookie deprecation issue. On a related topic, can you set the record straight on the privacy sandbox? What is your view, and what is trade desk testing there? What does it even matter to you, because there's been some discussion in the industry press based on confusion, I would say.

Thank you for the helpful color on that.

Sui Carousel: Cookie deprecation issue.

Speaker Change: In a related topic can you set the record straight on privacy sandbox box what is your view and what its trade desk testing there what does it even matter.

<unk> to you.

Speaker Change: There's been some discussion in the industry press.

Speaker Change: Here's what I would say thank you so much.

Jeffrey Terry Green: Thanks, Vasily, I appreciate the question. And, as I mentioned previously, I have written fairly extensively on Privacy Sandbox on our news platform, The Current. So if anybody wants to read more details, there's also a great report by Bill Simmons, who was previously the CTO of DataZoo, which was acquired by Roku, who also had a great POV on this, also on The Current. So, as I mentioned before, there are two different things happening at roughly the same time. There's cookie deprecation, which is Chrome is removing the use of third-party cookies, and they're doing that gradually.

Speaker Change: Alright, thanks for the color I appreciate the question.

Speaker Change: As was mentioned previously I haven't written fairly extensively on privacy sandbox, our newest platform the current.

Speaker Change: If anybody wants to read more details. There is also a great report on Bill Simmons.

Speaker Change: Previously the CTO of data Zoo, which was acquired by Roku, who also have just a great <unk> on this also on the current.

Speaker Change: So as I mentioned before there are two different things happening in that roughly the same time, there is cookie deprecation, which is.

Speaker Change: Chrome is removing the use of third party cookies and Theyre doing that gradually they introduced 1% and that created a lot of discussion about it but really as an industry. So far.

Jeffrey Terry Green: They introduced 1%, and that created a lot of buzz and discussion about it. But really, as an industry, so far, at the beginning of the year, 35% of cookies were already gone because of Safari and Firefox, and now it's 36% or something like that. So it wasn't a dramatic move, but the fear that it's going to go from 36% to 100% removal has lots of people concerned. I think it even has Google concerned, who's doing this, because they fear that they're taking something away and they're not replacing it with anything, which gives their engineers a very difficult dilemma. What do we replace it with?

At the beginning of the year, 35% of cookies were already gone because of Safari and Firefox and now, it's 36% or something like that so it wasn't a dramatic move but the fear that it's going to go from 36% to 100% removal.

Speaker Change: Lots of people concerned.

Speaker Change: I think that even has Google concern.

Speaker Change: Doing this.

Speaker Change: They fear that they're taking something away and they're not replacing it with anything.

Speaker Change: Once again that our engineers are very difficult to learn about what do we replace it with.

Jeffrey Terry Green: So what they're proposing to replace it with is this product called Privacy Sandbox. Now that it's a series of different APIs, there are actually more products than just Privacy Sandbox, but everyone in our industry just talks about that umbrella of APIs as Privacy Sandbox. I really believe that Google has missed an opportunity to build something better than this. They're increasing the complexity, and they are depreciating it at the same time. So I just, I don't think any good product ever degrades an ecosystem and makes it more complicated at the same time. So I've been fairly critical of that. Some have asked some of our leaders if we're going to test it, and some of our leaders have publicly said, we're not going to test it. And then I publicly said, we are going to test it. And the reason we're going to test it is I just don't think you get to be a food critic if you're not willing to taste food.

Speaker Change: So what they are what they are proposing to replace it with is this product called privacy sandbox now that it's a series of different API, there's actually more products than just privacy sandbox.

Speaker Change: Everyone in our industry just talks about that umbrella of API.

Speaker Change: As privacy sandbox.

Speaker Change: I really believe that google's missed an opportunity to build something better than us their increasing the complexity and theyre deprecating at the same time.

Speaker Change: I don't think any good product ever.

Speaker Change: Deprecation ecosystem and makes it more complicated at the same time.

Speaker Change: I've been fairly clinical that some of our some of our leaders.

Speaker Change: And some of our leaders have publicly said, we're not going to test. It and then I publicly said, we are going to test it.

Speaker Change: And the reason we're going to test. It is I. Just don't think you can get to be a food critic if youre not willing to taste food. So yes.

Jeffrey Terry Green: So yes, we've been fairly critical of it, and yes, I don't think it's a good product, but we have to try it. And this may be the most iterated-on product that I've ever seen from Google, so they keep changing it a lot. So it is actually hard to keep up with, but the broad strokes haven't changed a lot, and the product is continually disappointing, as you'll read from most op-eds outside of Google. Google, however, says it's great. Everyone else says it's not.

Speaker Change: Yes, we've been fairly critical of it and yes, I don't think its a good product, but we have to try.

Speaker Change: And this may be the most iterate on product that I've ever seen from Google. So they keep changing a lot. So it is actually hard to keep up with but the broad strokes haven't changed a lot.

Speaker Change: The product is continually disappointed as youll read from most off adds outside of Google Google's Anthos, Greg everyone else says yes.

Jeffrey Terry Green: I think it's incredibly complex, and I think it's not fully understood by more than 10 people on the planet. It's really complicated, but it is not that hard to see that this is a deprecation of the Internet. And then, of course, there's lots of speculation about what Google's motives are in doing all these things at this exact moment when they're under a tremendous amount of pressure. But that's a totally different topic.

I think it's incredibly complex I think it's.

Speaker Change: Not fully understood by more than 10 people on the planet, it's really complicated.

Speaker Change: But it is.

Speaker Change: It is not that hard to see that this is.

Speaker Change: Deprecation to the Internet and is a deprecation to the chrome user experience.

Speaker Change: And then of course theres lots of spec.

Speaker Change: Speculation about what Google's motives are and doing all these things at this exact moment when they're under a tremendous amount of pressure, but thats.

Speaker Change: That's a totally different topic.

Jeffrey Terry Green: As far as our position on Privacy Sandbox, we don't think it's a good product, but we will test it, hope that it gets better, and would love for Google to innovate instead of deprecate. But in the event that they don't, it does give us a lot more traction around UID2, and the Trade Desk is going to be fine no matter what. So I'm only invested to the point that I deeply care about the open Internet and would really like to see things like journalism thrive. And I am very concerned about the impact that cookies will have on things like journalism that are pretty dependent on browser-based traffic. So with that, I'll move on to the next question. Thank you for the question. Thanks, Cecilia.

Speaker Change: Yes.

Speaker Change: As far as our position on privacy sandbox.

Speaker Change: We don't think it's a good product, but we will hope that it gets better would love for Google to innovate instead of deprecate.

Speaker Change: But in the event that they don't it does give us a lot more traction around <unk> and the trade desk is going to be fine no matter what.

So.

Speaker Change: I'm only invested to the point that I I deeply care about the open internet and would really like to see things like journalism thrive and I am very concerned about the impact that bookings will have on things like journalism that are pretty dependent on browser based traffic so with that.

Speaker Change: I'll move onto the next question. Thank you for the question.

Speaker Change: The next question comes from Dan Salmon with New Street Research. Please proceed.

Jeffrey Terry Green: The next question comes from Dan Salmon with New Street Research. Okay, great. Thanks. Good afternoon, everybody.

Daniel Salmon: Okay. Great. Thanks, Good afternoon, everybody I've got two questions. Jeff You mentioned your single sign on initiative open passed in the press release and your prepared remarks for the first time in recent memory.

Jeffrey Terry Green: I've got two questions. Jeff, you mentioned your single sign-on initiative, OpenPass, in the press release and your prepared remarks for the first time in recent memory. Could you talk a little bit more about that initiative? It's important to your identity and authentication strategy, and even more specifically, how it works together with UID2.

Could you talk a little bit more about that initiative its importance to your identity and authentication strategy and maybe more specifically how it works together with <unk> two.

Jeffrey Terry Green: And then the second, maybe for Laura on this one, but also in the prepared remarks, Jeff mentioned that JPPs now represent one-third of your business. Can you give us any more detail on how that breaks down between agencies and direct client relationships? Thank you.

And then the second just maybe for Lora on this one also in the prepared remarks, Jeff mentioned Jpp's now represent one third of your business can you give us any more detail on how that breaks down between agencies and direct client relationships. Thank you.

Jeffrey Terry Green: You bet. But, first, let me take a minute to explain where we're at with OpenPath. So, first, this is in a closed invite-only beta, and you're right, we haven't talked about it a lot. But there have been a number of things where people have been watching us closely lately, and we've been scooped, or people talk about it before we get a chance to talk about it. I think this was one of them, but first of all, I should explain what it is.

Speaker Change: You bet so.

Speaker Change: First let me take a minute to explain where we're at with open path. So first this is a closed invite only beta and Youre right. We havent talked about a lot there have been a number of things where people are watching us closely lately.

Speaker Change: And we've been scoped, our people talked about it before we get a chance to talk about.

Speaker Change: I think this was one of them.

But.

Speaker Change: Let me explain what it is first of all so.

Jeffrey Terry Green: So, if you've ever used Shopify, I think that's the easiest way to understand it. I'm a big fan of Shopify, both the company and the product itself. The first time you use Shopify, you go through a checkout process that feels just like any ordinary checkout process.

Speaker Change: If you have an ever use shopify I think that's the <unk>.

Speaker Change: Easiest way to understand it.

Speaker Change: Big fan of Shopify that both the company and the product itself. The first time you use the shopify.

Speaker Change: You go through the checkout process that feels just like any ordinary and checkout process you are.

Jeffrey Terry Green: You don't necessarily even see the value. I actually think it was brilliant that Shopify, at least the way I experienced it, never took the time to explain what they were doing. I just experienced it. The fastest way to get people to adopt it was to get a few merchants to do it. And then where you really see the beauty of their sign-up process is the second time you go to a merchant and you see Shopify there, and then you see how much faster the checkout process is. And then, if you're like me, you say, "How did they do that?" Where did they get the information? How was it secured?

Speaker Change: Actually don't even necessarily see the value.

Speaker Change: I actually think it was brilliant and shopify at least the way I experienced it never took the time to explain what they were doing just that.

Speaker Change: That was the fastest way to get people to adopt it was to get a few merchants to do it.

Speaker Change: And then where you really see the beauty of the sign up process is the second time, you go to a merchant and you see shopify there and then you see how much faster. The checkout process is and then if youre like me. So how did they do that once they get the information how the secure and then literally putting together flowcharts to.

Jeffrey Terry Green: And then I literally put together a flowchart to understand how this worked and realize that it was both faster and more secure than what I had before. And it was just genius. It's kind of the opposite of what I was just criticizing in Google's products and privacy sandbox, where it complicates and degrades privacy. This is something that makes it both easier and more secure. And when you get both of those things together, then it's amazing. So that's exactly what we're doing with the SSO, which is we are trying to make it easier for people to sign on to websites. So the most lightweight, it's not it's not joined to an email service.

Speaker Change: And how this work and realize that bulk it's faster and more secure than what I had before.

Speaker Change: <unk>.

Speaker Change: It's kind of the opposite of what I would just criticising and Google.

Speaker Change: Alex and privacy sandbox.

Speaker Change: It complicates and deprecate. This is something that makes it more easier and more secure and when you get both of those things together then it's amazing so that's exactly what we're doing with the <unk>, which is we are trying to make it easier.

Speaker Change: Easier for people to sign onto websites.

Speaker Change: Most lightweight.

Speaker Change: Joined with.

Jeffrey Terry Green: We're not launching something like Gmail, but instead, we've created this product called OpenPass. We have a few publishers that have signed up during this invite-only beta. So, of course, we run it on our current own product but also on Snopes and OK Magazine and Radar Online and a few early adopters who want to try this. And the results have been really fantastic. And again, where you really see the benefit is when you go to a second or third or fourth site after you've been to that first one. So we recognize that the way to get this network effect is to partner with some of the biggest companies in the world that have sign-ons and also have a desire to make the ads on their sites more relevant and more competitive with more bidders than just Google.

Speaker Change: And email service, we're not launching something like Gmail, but instead, we've created this product that is open path.

Speaker Change: Have.

Few publishers that have signed up during this invite only beta.

Speaker Change: So.

Speaker Change: Of course, we run it on the current our own product, but also on snopes in Okay magazine the radar online.

A few early adopters, who want to try this and the results have been really fantastic.

Speaker Change: And again, where you really see the benefit is when you go to.

Speaker Change: A second or third or fourth site after you've been to that first one.

Speaker Change: So we recognize that the way to get this network effect is to partner with some of the biggest companies in the world that have signed on and also have a desire to make the ads on their site more relevant and more competitive with more bidders than just Google.

Jeffrey Terry Green: And so we think our value proposition is really compelling, and especially once you get that flywheel spinning, then it becomes almost financially irresponsible for people not to sign up so that we can bring them higher CPMs. So we're very excited about the early results. We have some big ideas about how to rapidly create adoption, and we're excited about what that represents for things like journalism if we can get this to the scale that we want it to be. Laura, the second part of the question is for you. Yeah, thanks, Dan.

Speaker Change: And so we think our value proposition is really compelling and especially once you get that flywheel spinning.

Speaker Change: Then it becomes almost.

Speaker Change: Irresponsible for people not to find out in that we can bring them a higher CPM. So we're very excited about the early results. We have some some big ideas about how to rapidly create adoption and we're excited about what that represents for things like journalism. If we can get this to the scale that we want to.

Speaker Change: For the second part of the question, yes, Thanks, Dan.

Jeffrey Terry Green: On the topic of JVPs, they absolutely continue to be a key driver of spend growth in our business. And, as we noted, about a third of our spend was under a JVP expiring in 2023, and we had, I believe, exiting the year over 45 JVPs with a robust pipeline of additions to that. Those JVPs represent billions of dollars of future spend.

<unk> of GBP is absolutely continue to be a key driver of growth in our business.

Speaker Change: And as we noted about a third of our spend with under GBP exiting 2023, and we had I believe exiting the year over 45, JV piece with our robust pipeline of additions to that those gbp's represent billions of dollars of future spend and what gets me. Most excited about them is that those <unk> are helping us get closer to our clients.

Laura: And what gets me most excited about them is that those JVPs are helping us get closer to our clients. And to your point, that's both brands and agencies who are signing up to do things that will drive incremental ROI for their marketing budgets. It can be anything from increasing data usage to adopting UID2 to focusing on decision CTV spend, and I can go on and on. And the way that we look at those is that they're effectively a win-win for the trade desk, they're a win-win for the agency, and for the brand, where they're structuring a framework that works best for their business. We don't actually break down the percent that's coming from the agency versus coming from the brand.

Speaker Change: And to your point, that's both brands and agencies, who are signing up to do things that will drive incremental ROI for their marketing budgets. It can be anything from increasing data usage to adopting <unk> to just focusing on decision CTV spend and I can go on and on and the way that we look at this is that they are effectively a win win.

Speaker Change: For the trade desk. They are win win for the agency for the brand where Theyre structuring a framework that works best for their business.

Speaker Change: We don't actually break down the percent that's coming from the agency versus coming from the brand and the main reason for that is that even though gbp's that we're signing with our brands.

Laura: And the main reason for that is that even in the JVPs that we're signing with our brands, you know, we are talking to the agencies that are working hand in hand with the brands as we are structuring those JVPs. And our relationships with agencies have never been stronger. So we just constantly say, you know, we're never losing sight of the key role that our agencies play in helping our brands execute their business. And for that reason, we don't really look at it as a breakdown but more in terms of how can we get closer to all parties that are spending on our platform. Thanks, Dan. This question comes from Matthew Kost with Morgan Stanley. Hi Rebecca. Thanks for taking the questions. I have two.

Speaker Change: We are talking to the agencies that are working hand in hand with the brand as we are structuring those GBP and our relationships with agencies has never been stronger. So we just constantly say, we've never losing sight of the key role that our agencies play in helping our brands execute their business and for that reason, we don't really look at it as the breakdown, but more in terms of <unk>.

Speaker Change: How can we get closer to all parties that are spending on our platform.

Speaker Change: Thanks, Dan.

Speaker Change: Next question comes from Matthew cost with Morgan Stanley. Please proceed.

Matthew Cost: Hollywood Debbie Thanks for taking the question guys Q. The first one is just on the conversation with advertisers. So at the time that you guided to the fourth quarter. I think you had seen at least in certain verticals. Some some brand spend weakness through October and November, but obviously the quarter came in significantly ahead of your guidance at that time.

Jeffrey Terry Green: The first one is just the conversation with advertisers. So at the time that you guided to the fourth quarter, I think you had seen, at least in certain verticals, some brand spend weakness through October and November. But obviously, the quarter came in significantly ahead of your guidance at that time. So I guess, how did the conversation evolve with advertisers? Where did you see them leaning in ways that you didn't expect?

Speaker Change: How did how did the conversation evolve with advertisers where did you see them see them lean in in ways that you didn't expect and how has that trended through the beginning of 2024 and then the second question is just on the growth outside the U S. I think theres a comment before about seeing green shoots there and continued faster growth than inside the U S.

Jeffrey Terry Green: And how has that trended through the beginning of 2024? And then the second question is just about growth outside the U.S. I think there's a comment before about seeing green shoots there and continued faster growth than inside the U.S. I guess, are there specific ways that advertiser behavior or inventory are changing that you would call out? You bet. Thank you for the question. Just writing it down so I won't forget.

Speaker Change: I guess are there specific ways that advertiser behavior or the inventory are changing that you would call out. Thank you.

Speaker Change: You bet. Thank you for the question, which is writing it down so I don't forget.

<unk>.

Speaker Change: So.

Jeffrey Terry Green: So yeah, in Q4, early in Q4, there was a little bit more hesitation in the ecosystem and the landscape, and I think that was not isolated to advertising. I think that was just macroeconomic angst, if you will. But of course, for the last few years, and I would just say that the angst in the CFO's office has been more closely connected to the angst in the CMO's office really since the pandemic at a level that I haven't seen in my career. So I think there was some angst early on, and as the quarter went on, we saw some advertisers really lean in, and some advertisers saw And even as we completed the quarter, it really was a tale of two cities, where some companies were really driving for growth and spending aggressively to get growth, and some were watching every penny carefully and trying to be really deliberate, and that meant some spent more and some spent less, and in the end, we had an increase in spend, obviously beyond what we guided.

Speaker Change: Yes.

Speaker Change: In Q4 early in Q4.

Speaker Change: A little bit more I would say hesitation in the in the ecosystem and the landscape and I think that was.

Speaker Change: Sure.

Speaker Change: Not isolated to advertising I think that was just macro economic.

Speaker Change: <unk> if you will.

Speaker Change: But of course for the last few years and I would just say that the angst in the Cfo's office.

Speaker Change: Then more closely connected to the angst in the CMO CMO as office really since the pandemic.

At a level that I haven't seen in my career.

Speaker Change: I think there was some some angst early on.

Speaker Change: And as the quarter went on we saw.

Speaker Change: Some advertisers really linear lean in.

Speaker Change: Some advertisers see some pressure and even as we completed the <unk>.

<unk>.

Speaker Change: It really is a tale of two cities, where some companies are really driving for growth.

And spending aggressively to go net growth.

Speaker Change: Some are watching every penny carefully and trying to be really deliberate in that month.

Speaker Change: Some spend more on some spend less and in the end.

Speaker Change: We have.

Speaker Change: An increase in spend obviously beyond what we guided.

Jeffrey Terry Green: As it relates to outside the United States, I think a significant amount of this is caused by the same macro environment that we were just talking about. So as things change in the dollar and some of the macroeconomic policies of governments, I think that does make it easier for things outside the United States to do well. But there are also some trends in media consumption. So if you look at places like the UK or Germany, we see their CTV growth meaningfully higher than what we're experiencing in the U.S. And that's often because they're a year or two behind the U.S. in terms of the competitive landscape, forcing them to change to add funded models and some of those types of things.

As it relates to outside the United States.

Speaker Change: I think a significant amount of this is caused by the same macro environment that we were just talking about so.

Speaker Change: As.

Speaker Change: <unk>.

Speaker Change: Things change in the dollar and some of the macroeconomic policies of governments.

Speaker Change: I think that does make it easier for things outside the United States.

Speaker Change: To do well, but theres also some trends.

In media consumption.

Speaker Change: If you look at places like.

Speaker Change: The U K or Germany, we think that our CTV growth meaningfully higher than what we're experiencing in the U S.

Speaker Change: And that's often because they are a year or two behind.

Speaker Change: The U S in terms of the competitive landscape, forcing the change the AD funded models and some of those types of things.

Jeffrey Terry Green: But we're seeing the exact same trends play out. So in the same way that we saw those green shoots a couple of years ago here in the United States, we're now starting to see them in more markets around the world. And that's very good for us. So I would say it's those two things on the international or outside the U.S. front.

Speaker Change: But we're seeing the exact the exact same trends play out.

Speaker Change: So in the same way that we saw those green shoots a couple of years ago.

Here in the United States, we're now starting to see them in more markets around the world and that's very good for us. So I would say, it's those two things.

Speaker Change: International or outside of the U S. Brian Thanks.

Jeffrey Terry Green: Thanks for the question. The next question comes from Matt Swanson with RBC Capital. Thank you. I'll add my congratulations to you guys on the quarter and congratulations, Bryce, on his baby, if you're still listening.

Brian: Thanks for the question. Thank you.

Brian: Thanks for that question comes from Matt Swanson with RBC capital. Please proceed Matt.

Matt Swanson: Thank you and I'll add my congratulations to you guys on the quarter and congratulations Brian on his baby, if you're still listening.

Jeffrey Terry Green: So, Jeff, I think from the product event when we were talking about Kokai, one thing that was really intriguing to investors was this idea of being able to deliver, you know, attribution and KPIs and kind of segmented out throughout the funnel, right? Not just give it all to the last click. It kind of sounded like the example you gave from Samsung. So when you've been out meeting with customers, Can you just talk a little bit about what's exciting them the most about COCHI?

Matt Swanson: So Jeff I think from the product event, when we were talking about Coke I. One thing that was really intriguing to investors was this idea of being able to deliver attribution and kpis and kind of segmented out throughout the funnel right not just give it all to the last click.

Jeff: It sounded like the example, you gave from Samsung So when <unk> been out meeting with customers.

Jeff: Can you just talk a little bit about like whats exciting them. The most about coke high what's driving adoption and maybe how this new way of looking at attribution.

Jeffrey Terry Green: What's driving adoption and maybe how this new way of looking at attribution could kind of change spending patterns long-term? You bet. So, first of all, thank you for the question, and there are so many things to talk about in it because there are just so many things that are inside of Cocai.

Jeff: Kind of change spending patterns longer term.

You bet.

Jeff: So.

Jeff: Sure.

Speaker Change: First of all thank you for the question and Theres. So many things to talk about because theres. Just so many things that are inside of Cotai.

Jeffrey Terry Green: So, if you don't know, and obviously I know, at RBC, you know this, but maybe some others on the call don't. We went on what we call a world tour in Q4 to go to four continents and talk to our customers around the world about the product that we're launching. Honestly, I did that out of concern, in the sense that I know we are giving them more change than ever. But I am confident that this is an upgrade in almost every way to our platform. And I was concerned that the amount of change would make them afraid of adopting something new, simply because of how much it changed, rather than really considering all the reasons why we did it. And so we spent half a day on four continents. We did, I think, three in the United States, in LA, Chicago, and New York.

Sure.

Speaker Change: <unk>.

Speaker Change: If you don't know and obviously I know.

Speaker Change: And obviously you know this but maybe some others on the call.

Speaker Change: Sure.

Speaker Change: We went on what we call it a world tour at the Q4.

Speaker Change: To for confidence and talk.

Speaker Change: Our customers around the world about the products that we're launching.

Speaker Change: Honestly I did that out of concern in the sense that I know, we are giving them more change than ever but I am confident that this is an upgrade in almost every way to our platform.

Speaker Change: I was concerned that the amount of change.

Speaker Change: Make them afraid of adopting something new.

Speaker Change: Simply because of how much it changed rather than really considering all the reasons why we did it.

Speaker Change: So we spent half a day in.

Speaker Change: Poor confidence we did.

Speaker Change: I think three in the United States in La and Chicago, and New York and then we also did in London, and we also dividend and Singapore also did in Australia.

Jeffrey Terry Green: And then we also did it in London, and we also did it in Singapore, and we did it in Australia. And the reception was phenomenal.

And the reception was phenomenal.

Jeffrey Terry Green: It really put to bed any concerns that I had about reluctance to adoption. We explained the reasons why we were doing everything. A big part of what they love to answer your question about what they are most excited about is that we have streamlined our reporting, and we've made it way faster. There are some reports that you have to wait multiple minutes for because they're just so robust.

Speaker Change: It really puts about any concerns that I had about reluctance for adoption. We explained the reasons why we were doing everything.

Speaker Change: A big part of what they love.

Speaker Change: Answer your question about what are they most excited about.

Speaker Change: <unk>.

Speaker Change: We have streamlined our reporting we've made it way faster there are some reports that you used to have to wait.

Speaker Change: Multiple minutes for it because there are just so robust and we found ways to accelerate that we've also added.

Jeffrey Terry Green: And we found ways to accelerate that. We've also added AI throughout the platform, especially in forecasting. So it's a little bit like if you were to make a hypothetical trade on a trading platform for equity, and then I'll tell you what we think is going to happen to the price action in the next 10 minutes.

Speaker Change: Hi throughout the platform, especially in forecasting so.

Speaker Change: It's a little bit like if you were to.

Speaker Change: To make it a hypothetical trade and a trading platform for equity and then I'll tell you. What we think is going to happen to the price action in the next 10 minutes.

Jeffrey Terry Green: So we're showing them what the effects of their changes are going to be, uh, uh, uh, before they even make them, uh, so that they don't make mistakes. Cause sometimes what happens is people put out a campaign, and they'll put tight restrictions on it. They'll hope that it sells, then they come back a day or two or even three later and then realize they made it so difficult with their combination of targeting and pricing for us to buy anything that they didn't spend much money. Or, on the opposite, they spent more, and it wasn't as effective as they wanted.

Speaker Change: So we're showing them what the effects of their changes are going to be.

Speaker Change: Before they even make them.

Speaker Change: So that they don't make mistakes because sometimes what happens is people will put out a campaign.

Speaker Change: Tight restrictions on it that I hope that it's been then they come back a day or two or even three later and then realize they made it so difficult with their combination of targeting and pricing for us to buy anything that they didn't spend much money or the opposite they spend more and it wasn't as effective as they wanted so helping them see all of that before then.

Jeffrey Terry Green: So helping them see all of that before they do anything helps. And then we put data and decisions next to each other in a better way than we ever have before. But included in those decisions are upgrades to the attribution methodologies and reporting. So we are definitely trying to do a better job of attribution while at the same time not adding complexity. It's a very difficult thing to do in our space. It's hard when you want to give people more power, give them the ability to do more. Usually, that means you hand them more complexity. And how can we give them more power and yet not increase the number of buttons exponentially or increase the number of numbers on the screen exponentially?

Speaker Change: Do anything helps and then we put data and decisions next to each other in a better way than we ever have before but included in those decisions are upgrades to the attribution methodologies and reported.

Speaker Change: We are definitely trying to do a better job of attribution, while at the same time not adding complexity.

Speaker Change: It's a very difficult thing to do in our space. Its hard when you want to give people more power give them the ability to do more usually that means you hand them more complexity.

Speaker Change: How can we give them more power and yet not increase the number of buttons exponentially.

Speaker Change: Increase the number of numbers on the screen exponentially. So when we think we thread that needle and will continue to simplify but those are the things that they're most excited about and thats.

Jeffrey Terry Green: So we think we've threaded that needle and we'll continue to simplify, but those are the things that they're most excited about. And that's part of the reason why I go into this earnings report with so much confidence, having just spent so much time with our customers over the last four months. The next question comes from Brian Pitts with BMO Capital Markets. Please proceed. Yes, hey, it's Tim O'Shea.

Speaker Change: Part of the reason why I go into this.

Speaker Change: Earnings report with so much confidence is just spending so much time with our customers over the last four months.

Okay. The next question comes from Brian Pitz with BMO capital markets. Please proceed Brian.

Speaker Change: Yes, Hi, it's Tim O'shea, Thanks, Sarah on for Brian. Thanks for taking my question.

Jeffrey Terry Green: Thanks, Brian. Thanks for taking my question. Look, we've spoken about the impact of cookie deprecation, but what about timing and readiness? You work with so many advertisers, all the agencies. The question is, do you believe that advertisers are ready for Google to deprecate the remaining 99% of cookies in 2024? And if they aren't ready, what needs to be done? What is being done to prepare them?

Speaker Change: We've spoken about the impact of cookie deprecation, but what about timing and readiness.

Speaker Change: You work with so many advertisers all the agencies. The question is is do you believe that advertisers are ready for Google to deprecate, the remaining 99% of cookies and in 2024, and if they arent ready what needs to be done what is being done to prepare them and then maybe just what happens to the AD market, if Google decides to deprecate right before the <unk>.

Jeffrey Terry Green: And then maybe just what happens to the ad market if Google decides to slow down right before the holidays and the U.S. presidential election? I'm curious, is there a pause? Is there a pullback?

Speaker Change: Holidays in the U S. Pretzel presidential election, I'm curious is there a pause as they were a pullback I know that Jeff spoke about what happened with Apple.

Jeffrey Terry Green: I know that Jeff spoke about what happened when Apple made similar policy changes in the past. Thank you for taking my question. Oh, you bet. I love this question.

Speaker Change: Made similar policy changes in the past. Thank you for taking my question.

Speaker Change: You bet.

Speaker Change: Love. This question. Thank you very much for asking it so.

Jeffrey Terry Green: Thank you very much for asking it. Of course, the answer is, some are, some aren't. So who is ready for cookie deprecation? So I believe here at the Trade Desk we're in a phenomenal position as a company. You know, a big part of our technology stack centers around what we call an identity graph. And that is incredibly robust.

Speaker Change: Of course, the answer is.

Speaker Change: Some are some arent.

Speaker Change: So.

Speaker Change: So who is ready for a cookie deprecation, so I believe.

Speaker Change: Here at the trade desk, where in a phenomenal position as a company a big part of our.

Speaker Change: Of our technology stack centers around what we call an identity graph.

Speaker Change: That is incredibly robust and that is the result of our efforts.

Jeffrey Terry Green: And that is the result of our efforts. And you will recall, we launched UID two before the pandemic; we launched UID before that. And all of those efforts were seen around corners. And we, we, we knew that this would happen.

Speaker Change: We will recall, we've launched UAV to before the pandemic, we launched new IV before that.

Speaker Change: And all of those efforts, we're seeing around corners.

Speaker Change: We knew that this would happen. So we're confident that we're in a fantastic position.

Jeffrey Terry Green: So we're confident that we're in a fantastic position. As it relates to advertisers, some are prepared, and some are not. I would say the majority are not doing as much as they can. If I were to just paint a picture of the typical advertiser, they'd have adopted something like Snowflake.

Speaker Change: As it relates to advertisers some are prepared and some are not I would say the majority are not doing as much as they can.

Speaker Change: If I were to just paint a picture of the typical advertiser they've adopted something like snowflake. They have been trying to take their data from 20 different silos all over their organization and Theyre trying to figure out how to make certain that they are respecting that relationship with the consumer and I do want to underline.

Jeffrey Terry Green: They have been trying to take their data from 20 different silos all over their organization, and they're trying to figure out how to make certain that they're respecting their relationship with the consumer. And I do want to underline that I have never met a big brand that doesn't start every one of these discussions by saying, I want to be really careful about respecting the privacy of my consumers. They want a long-term relationship with them. They want to sell soap or cheeseburgers or pizza or whatever to them over and over again.

Speaker Change: I've never met a big brand that doesn't start every one of these discussions by saying I want to be really careful about respecting the privacy of my consumer.

Speaker Change: Want a long term relationship with them they want to sell so per cheeseburgers or pizza or whatever to them over and over again and so they want to be respectful and as they're doing that they're trying to figure out how to bring it all together and make certain that they keep it I'll say.

Jeffrey Terry Green: And so they want to be respectful. And as they're doing that, they're trying to figure out how to bring it all together and make certain that they keep it all safe. Many, as they're doing that internally, are saying, "We know we have to put first-party data to work, but we have to really think about the implications of what they do." And many have started to do that, but many have not finished it.

Speaker Change: Many as Theyre doing that internally are saying, we know we have to put first party data to work, but we have to really think about the implications of what they do.

Speaker Change: And many have started to do that and many have not finished that theres a lot of internal meetings that have to happen and they all have to move more quickly. The theme has been good about all of the discussions to date is that getting everybody to move a bit more quickly and say hey, we have to act.

Jeffrey Terry Green: There are a lot of internal meetings that have to happen, and they all have to move more quickly. The thing that's been good about all the discussions to date is it's getting everybody to move a bit more quickly and say, hey, we have to act. And so I think that is super healthy.

Speaker Change: And so I think that's that is super healthy.

Jeffrey Terry Green: But if I were to estimate, I would say most advertisers are not as ready as they could be, but the 25 percent that are are going to benefit if Google were to go faster. The side of this that I'm really worried about, though, is the publisher side. Again, we don't represent publishers directly; we represent the buy side, but of course, we buy from all these publishers, and we want to see an open internet thrive, but I would say that 90% of publishers that have a meaningful amount of their traffic from browsers are not prepared at all. And so you would see a rapid revaluation, and you would see some struggle come as a result of Google accelerating cookies. It could have a meaningful impact on the election in the sense that if people can't advertise on those sites effectively, then prices would go down, and then it would change the way that they either generate content or even their ability to afford to continue to generate content on those journalistic outlets.

Speaker Change: But if I were to estimate I would say most advertisers are not as ready as they could be but the 25% that are going to benefit.

Speaker Change: If Google water to go faster.

Side of this that I'm really worried about though is as the publisher side.

Speaker Change: Again, we don't represent publishers directly we represent the buy side, but of course, we buy from all of these publishers and we want to see an open internet thrive.

Speaker Change: I would say that 90% of publishers that have a meaningful amount of their traffic.

Browsers are not prepared at all.

Speaker Change: So you would see a rapid revaluing and you would see some struggle come.

Speaker Change: As a result of of <unk>.

Speaker Change: Google accelerating cookies, it could have a meaningful impact.

Speaker Change: On the election in the sense that if.

People can't advertise on those sites effectively then the prices would go down.

Speaker Change: And then it would change the way that they either generated content or even their ability to afford to continue to generate content on those journalistic outlets.

Jeffrey Terry Green: To me, they're the ones to watch most carefully because I think they're the ones that are often hurt the most, as we've just seen so many headlines in journalism of late. And so I do think it's really prudent to be thinking about the pace that Google is going. I think they're trying to recognize all of these implications, and they don't want to have to testify before Congress in two years about what you did to journalism or anything like that.

Speaker Change: To me they are the ones to watch most carefully because I think they are the ones that are often hurt the most.

Speaker Change: As we've just seen so many headlines in journalism.

Speaker Change: Awesome.

Speaker Change: And so.

Speaker Change: I do think it's really prudent to be thinking about.

The pace that Google is going.

Speaker Change: They are trying to recognize all of these implications and they don't want to have to testify before Congress in two years about.

Speaker Change: What did you do to journalism or anything like that so as a result.

Jeffrey Terry Green: So, like them, deprecating cookies 1% at this point is a good way to get people to act. And now the important thing is for advertisers and publishers to act. And I think that's going to give tons of additional momentum to things like UID2 and OpenPass. And that's one of the many reasons why I'm just so confident about our 2024.

Speaker Change: Them Deprecating cookies, 1% at this point is a good way to get people to act and now the important thing is for advertisers and publishers to App and I think that's going to give tons of additional momentum to things like <unk> and open path and that's one of the many reasons why I'm just so key.

Speaker Change: I'll put in about 2024.

Operator: Thanks for the question, and John, can you close out the call, please? Thanks. Absolutely, thank you. This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation. Goodbye.

Speaker Change: Thanks for the question and John can you close out the call. Please.

John: Certainly thank you. This concludes today's conference and you may disconnect. Your lines at this time. Thank you for your participation.

John: Goodbye.