Q4 2024 Trade Desk Inc Earnings Call
Speaker Change: [music].
Greetings and welcome to the trade desk fourth quarter and full year 2024 earnings conference call. At this time all participants are in a listen only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference. Please press star.
Speaker Change: Zero on your telephone keypad. Please note. This conference is being recorded I will now turn the conference over to your host Chris Toth you may begin.
Speaker Change: Thank you operator, Hello, and good afternoon to everyone and welcome to the trade desk fourth quarter 2024 earnings conference call on the call today are co founder and CEO, Jeff Green and Chief Financial Officer, Laura Shanghai, a copy of our earnings press release is available on our website in the Investor Relations section at the trade desktop phone. Please no.
Speaker Change: That aside from historical information today's discussion and our responses during Q&A may contain forward looking statements.
Speaker Change: These statements are subject to risks and uncertainties and reflect our views and assumptions as of the date such statements are made.
Speaker Change: Results may vary significantly and we expressly disclaim any obligations to update the forward looking statements made today, if anybody beliefs or assumptions prove incorrect actual financial results to differ materially from our projections or those implied by these forward looking statements for a detailed discussion of the risks please refer to the risk factors meant.
Speaker Change: And in our press release and in our most recent SEC filings. In addition to our GAAP financial results, we present supplemental non-GAAP financial data a reconciliation of the GAAP to non-GAAP measures is available in our earnings press release, we believe that presenting these non-GAAP measures alongside our GAAP results offers a more comprehensive view of the company's operational.
Speaker Change: Performance with that I will now turn the call over to co founder and CEO, Jeff Green Jeff.
Jeff Green: Thanks, Chris and good afternoon, everyone. Thank you for joining US today 2024 was a record breaking year for the trade desk total spend on our platform exceeded $12 billion the highest in our history.
Jeff Green: Revenue for the year surpassed $2 $4 billion growing nearly 26% year over year as we continued to significantly outpace the broader digital advertising market we.
Jeff Green: We generated over $1 billion in adjusted EBITDA and delivered more than $600 million in free cash flow.
Jeff Green: These accomplishments underscore both the strength of our platform and our ability to drive value for our clients in the fast evolving digital advertising landscape.
Jeff Green: While we're proud of these milestones I want to acknowledge upfront that for the first time in 33 quarters as a public company, we felt short of our own expectations.
During COVID-19, we revise our expectations once along with the rest of the markets, but for the first time in eight years, we missed the expectations, we set and it was our fault.
Jeff Green: When we were first contemplating going public about 10 years ago. Many people advised me not to I P O.
Jeff Green: The most common reason was the valuations would be too low because no AD Tech company had ever one wall Street's trust and confidence for any reasonable period of time I did that as a challenge then and I still do now.
Jeff Green: I knew we had the business model the Tam the vision, the grit and the people to break that mold.
Jeff Green: To do something that had never been done before and the only way to do that.
Jeff Green: Was to make promises and keep them. Many people told us it couldnt be done our success to this point has been fueled at least in part by our ability to win trust with investors partners, our industry and our customers. There are very few things that rivaled that and importance to us.
Jeff Green: I want you to know that we take this moment seriously.
Jeff Green: And we want to assure our investors partners and customers that their trust is well placed and deserved our brightest days are still ahead of us, but before I talk about that I want to spend a few minutes sharing what we got wrong and the changes we are making to meet this moment and maximize our unique and growing opportunity.
Jeff Green: Starting off let me explain that as I see it.
Jeff Green: What falling short of our own expectations does not represent this didn't happen because the opportunity isn't as big as we thought in this case it isn't because of our competition either for Q4. The reality is that we stumbled due to a series of small execution missteps, while simultaneously pre.
Jeff Green: <unk> for the future.
Jeff Green: As far as sporting event, we'd still have a championship caliber team, but in this particular game, we turned over the ball too many times that said, we see a larger and faster growing market than we originally expected, which is why we have been making changes and we'll continue to do so.
Jeff Green: Simply put as you've seen before as companies grow and become increasingly complex they need recalibration to unlock new opportunities. We are recalibrating, our larger company for an even stronger future and that effort I want to highlight four major changes we've made at the trade desk in the last few months and some related initiatives that occur.
Jeff Green: Company, though.
Jeff Green: First we did the largest reorganization in company history in December while we often make structural changes at the end of the year to improve our business. This was bigger than usual.
For most people in the company, we've provided a much clearer view of their roles and responsibilities and for most that also meant a change in reporting structure. Additionally, we streamlined client facing teams, reducing complexity and clarifying responsibilities. Some team focus on brands, while others focus on agencies.
Jeff Green: Our commitment to agencies remains strong, but we are also expanding brand direct relationships, particularly through joint business plans, which grow 50% faster than the rest of our business.
Jeff Green: Beyond structural improvements, we placed a stronger emphasis on internal effectiveness and scalability over the past two months leadership to spend more time discussing the operational improvements than at any other point in our history.
Jeff Green: While we have historically been focused on external opportunities. We understand that this moment requires us to scale, our internal operations and continue hiring senior talent to support long term growth. These changes position us to execute at a higher level and capitalize on the expanding market opportunities ahead.
Jeff Green: Third we have increased our resource allocation on brands.
Jeff Green: Our shift is occurring in the industry advertisers are becoming more strategic and data driven in their media buying decisions and thats great for us while the shift has caused short term fluctuations, it's ultimately aligned with our long term strengths we.
Jeff Green: We recognize that advertising will ebb and flow at the same time as advertisers prioritize precision and efficacy are programmatic data driven platform is becoming more essential than ever to brands and agencies. This is evident in the growing number of joint business plans or JV piece that we've secured with <unk>.
Jeff Green: Over 100 of the world's leading brands many of them in the second half of last year Jbt's provide a structured mutually beneficial framework for brands that are agencies and the trade desk and they reinforce the long term value we bring to the industry. They also historically grow faster than the rest.
Jeff Green: Of our business.
Jeff Green: Fourth we revamped our product development process shifting back to smaller agile teams that release updates weekly instead of drifting towards waterfall methods, which are less conducive to our fast paced and changing industry. Our engineering team is now divided into nearly 100 scrum teams with our system to more.
Jeff Green: Easily ship and collaborate with the business team on what has shipped and what will ship and win.
Jeff Green: I expect this to continue to accelerate Coca enhancements and complete the transition of 100% of our clients from solo Maher to co Kai during this calendar year.
Jeff Green: In Q4, there were a series of decisions, we could have made to enhance the short term performance of the company and then collect the long term, we consistently choose to focus on the long term opportunity and maximize our market share over the long term as I believe this isn't the best interest of all of our stakeholders.
Jeff Green: We are keeping our focus on the massive Tam and long term opportunity that makes this a good opportunity to bring up two other important and related initiatives.
Jeff Green: We continue to improve and protect the supply chain.
Jeff Green: First we announced the Ventura operating system for connected TV, which will create a better supply chain for all Oems content owners consumers and advertisers.
Jeff Green: Secondly, we announced in January the acquisition of since Sara.
Jeff Green: Since era is a metadata company that is dedicated to improving the supply chain of the open internet joining.
Jeff Green: Joining serra's work with ours will accelerate a cleaner supply chain for the open internet and accelerate the work of open path, which is one of our biggest efficiency efforts, both internally and externally a better supply chain will free up resources internally and improve the ecosystem.
Jeff Green: The second major accompanying initiative I want to talk about is the investments we're making in AI of course, AI is providing next level performance and targeting and optimization, but it is also particularly game changing in forecasting and identity and measurement. We continue to look at our.
Jeff Green: Technology stack and ask where can we inject.
Jeff Green: AI and enhance our product and client outcomes over and over again, we are finding new opportunities to make AI investments.
Jeff Green: These changes have helped us start 2025 on solid footing not only as our platform. The most advanced data driven decision, making platform in our industry. The ramping of Coca is advancing the ability of advertisers to find value and precision as they expand their audiences and grow their businesses.
Jeff Green: In last quarters earnings report, we itemized 10 macro conditions that are working in our favor today I want to briefly highlight 15 big things, we're doing to benefit from those secular tailwind.
Jeff Green: Last time, we talked about trends today I want to talk about what we're doing about it.
Jeff Green: First we're focused on scale more accurately we're obsessing about scale, we control $12 billion of AD spend and an approximately one trillion dollar advertising industry.
Jeff Green: With every success, we have and with every efficiency, we find operationally and technologically.
Jeff Green: We follow up with a question how can we make that scale quickly while our share is growing faster than perhaps any scaled competitor our opportunity is growing too.
Jeff Green: We can accelerate growth when we sufficiently orient around scale.
Jeff Green: The second thing we are preparing for a world where Google exits the open internet.
Speaker Change: I'm confident that one way or another Google will exit the open Internet I think they should most of their antitrust and regulatory problems come from the draconian ways. They have engaged with the open internet in the past in April of 2024 base book shut down their news program, thereby distancing itself further.
Speaker Change: From one of the most important pillars of the open Internet. Some evidence suggests the substantial majority of spend going through <unk> hundred 60, Google's DSP is routed to the Google owned and operated platform of Youtube, regardless of what happens with the pending trial decision, Google will likely distance itself.
Speaker Change: Well from the open Internet.
If and when Google exits the open Internet they will leave a big hole and the big opportunity for the rest of us.
Speaker Change: Relatedly, let's move to number three.
Speaker Change: Third we will promote and protect our objectivity more than ever more and more the only competitors. We encountered today have the worst objectivity problems Amazon is asking advertisers big and small for their advertising budgets. Meanwhile, Amazon competes with most of the fortune 500 companies.
Speaker Change: In some way, whether we're talking about Microsoft and cloud or PNG, and CPG products or a U P S or Nike or all the rest in our very first business plan 15 years ago. We argued that the objective independent DSP should get the lion's share of the marketplace.
Speaker Change: They'd be the only company that can be trusted we have a mantra that we've repeated again and again incur internally for years and it's this every day that goes by objectivity matters more and more.
Speaker Change: The fourth thing, we will do leverage the supply and demand imbalance to make the ecosystem better.
Speaker Change: In advertising there is more supply than demand there always has been and there always will be.
This by definition makes it a buyers' market by focusing exclusively on the buy side, we are in the strongest position in the market.
Speaker Change: Unlike so many players intact, we are not using our position of strength to become draconian. We are trying to use our ever growing influence and impact on the industry to make it better and to improve the supply chain.
Speaker Change: This is why we expect 2025 to be the year open path enters the steep acceleration phase of its S curve growth.
Speaker Change: This is because many of the major CTV players around the world are aggressively implementing open path now.
Speaker Change: They understand that a more efficient supply chain means more money in their pockets I would argue that higher C. P. M through more efficient supply chains are the only way most of the streamers will get to sustainable and scaling profitability.
Speaker Change: To this end Disney was among the first of the CTV scaled players early last year to embrace open path when they deployed it as part of Disney's real time AD exchange or Drax as Disney's SVP of addressable advertising said recently, they are working towards 75% of their AD sales.
Speaker Change: Automated by 2027.
With the vast majority of those impressions being biddable.
Speaker Change: Media leaders like Disney realized that the best way to fund their incredible content is through Biddable programmatic advertising, which of course is great news for us and our partnership.
Speaker Change: And the best way to help advertisers value impressions and show publishers, what they're willing to pay is an open market.
Speaker Change: And it is through a clear supply chain with tools such as open path that that can be realized.
Speaker Change: This also extends to the Oems another CTV leader that has embraced open path is vizio, which has more than 24 million active devices in the United States and more than 300 AD supported CTV channels Vizio wanted clear line of sight into advertiser demand with as few intermediaries as.
Speaker Change: They deployed open path and immediately saw impressive results, including 39% improvement in revenue from our platform and an eight X improvement in fill rate.
Speaker Change: Relatedly Goodbye group is one of our largest independent agency clients they've been working in Coca to create a blue list.
Speaker Change: Which is a custom market they can curate using our tools on our platform to provide their customers to the best opportunities in the market as they see it.
Speaker Change: With their blue list in Coca Good way was able to prioritize impressions with better clearer signal around factors such as genre show title and content quality. In addition, they were able to measure the number of supply chain hops in those transactions. They found that 94% of the impressions. They bought had only one.
Speaker Change: On supply chain hub, which is well ahead of the industry benchmarks.
Speaker Change: All of this means that more campaign dollars can now be put to work more effectively in driving incremental reach.
Speaker Change: These examples provide great background for the pending acquisition of since ore, which we announced a few weeks ago.
Speaker Change: I don't think there's any other company in the AD tech ecosystem that thinks about the digital advertising supply chain as passionately.
Speaker Change: Since Sara except perhaps the trade desk over the past few years and Sarah has established itself as an objective data company for the entire AD ecosystem, all with a mission of shining a much clearer light on where the value is where value is being obscured and what signals advertisers value the most and making it.
Speaker Change: Active decisions for us embedding those data signals into our platform will help encourage the right behaviors that leads the best outcomes for our clients. For example, one of the most compelling use cases is showing in our platform, which signals advertisers want publishers to provide so they can value ad impressions.
As accurately as possible using these data signals to improve the supply chain for digital advertising could not be more important as we head into 2025.
Speaker Change: And of course, that's even more important as Google likely becomes less involved with the open internet.
Speaker Change: The fifth action will take make CTV, the most effective channel and programmatic advertising by layering more data better auction mechanics, and capitalizing on the fact that CTV is the only channel that has nearly 100% of traffic logged in <unk>.
Speaker Change: CTV is the kingpin of the open Internet CTV should be the first place all brand advertisers spend not walled gardens.
Speaker Change: If we expand since cerus charter and capabilities to CTV and audio CTV and premium video can reach its potential as a channel.
Speaker Change: It can be half the pie of the advertising Tam.
Speaker Change: So many companies like Disney Netflix Paramount, Max Fox and Peacock need to get the best out of programmatic advertising in order to maximize their opportunity.
Speaker Change: In order to do that almost all of the streaming leaders have deployed <unk> two as a way of providing advertisers with precision and address ability.
Speaker Change: This has laid the foundation for them and us to continue the expansion of CTV advertising around the world.
Speaker Change: CTV continues to be our fastest growing channel and as you know it is also our largest channel. However, neither us nor any content owner thinks the status quo is anywhere close to what end state looks like.
Speaker Change: The 16 will do make 'twenty 'twenty five the best year audio has seen yet I maintain that audio is still the most ancell corner of the open internet companies like Spotify had been making changes to embrace the potential of programmatic advertising theyre, making changes and we are using AI partnership.
Speaker Change: To bridge the creative creation gap.
Speaker Change: I think this is one of the biggest opportunities in programmatic and one of the biggest opportunities for company like Spotify to take their company to the next level.
Speaker Change: The seventh action item will move 100% of our clients to Coke I this year.
Now the majority already have.
Speaker Change: But today, we're maintaining two systems, so Lamar Aimco Cai this slows us down Coca is more effective in almost every way.
Speaker Change: We are producing case study after case study as clients continue to lean into the features of our Coke high platform every one of them showing the enhancements and effectiveness that goes up with the use of coke.
As you know Coca represents our largest and most important platform overhaul ever some clients are still transitioning from our previous platform saloma, but well before the end of this year I expect that all of our clients will be using coca exclusively.
Speaker Change: And all of the case studies coming out of Cotai. The consistent theme is accessing and acting on better data and signal and CTV advertisers Act on authenticated logged in user data rooted in <unk> to the same is also happening in digital audio where companies such as Spotify Sirius XM Pandora.
Speaker Change: And I heart media have all recently embraced UIT too so that advertisers can act with precision on their logged in audiences and with retail data advertisers can understand conversion rates and the impact of every AD dollar more clearly.
Speaker Change: Eight.
Speaker Change: We will change the way the industry manages deals.
Speaker Change: We will help advertisers and agencies avoid bad deals, which generally considered too few AD impressions and force advertisers to buy impressions that they wouldn't otherwise want and we can avoid these bad deals by using AI powered forecasting.
Speaker Change: To do this we are enhancing co cai with some of the most game changing parts like deal manager, which lays the groundwork for the forward market, which we think in the future.
Speaker Change: We will change the ecosystem and eventually upgrade the upfronts.
Speaker Change: Nine we will continue to invest in AI with provable upgrades and Auditable results, we started our ml and AI efforts in 2017 with the launch of Koa, but today the opportunities are much bigger we're asking every scrum inside of our company to look for opportunities to.
Speaker Change: You inject AI into our platform hundreds of enhancements recently shipped and coming in 2025 would not be possible without AI, we must keep the pedal to the metal not to check some on stages, which everyone else seems to be doing but instead to produce results and win share.
Speaker Change: 10th we will simplify our retail offering in 2025.
Speaker Change: So far it's been powerful and a significant driver of our growth, but it has often been too complicated. We've studied what works and understand the changes needed to help retail media continue to meaningfully outpace our business achieving this will require a closer collaboration with our retail partners.
Speaker Change: In Cotai, we have the industry's richest retail data environment, including data for many of the world's leading retailers to help advertisers understand the connection between campaign spend and consumer action, we will make this easier to adopt for our clients both endemic and non endemic to our retail partners.
Speaker Change: Consider the fact that our objectives may be our greatest asset and this corner of our business as well where retailers are reluctant to partner with walled gardens, who are competing with them.
Speaker Change: While of course, our objectivity as well as our clear mission, which makes it easy for them to know how we will partner and what our motives are makes it easy for us together to create the greatest environment of retail data for advertisers on the open Internet.
Speaker Change: We have some great case studies in Q4 around the world.
Speaker Change: Blah Rone, a world leader and homeopathic products was able to measure a 267% return on AD spend or ROE as on Cotai when using Kroger retail conversion data. This was well ahead of their typical benchmarks. In addition of the almost 2 million.
Speaker Change: Households that their recent campaign reached on our platform, 94% of them were new to the brand.
Speaker Change: In Hong Kong High end skincare brands saw WSU leveraged <unk> two in Cotai to look alike model perspective, new audiences based on their most loyal customers and doing so they were able to engage with those prospects across the customer journey at all steps of the marketing funnel across.
Speaker Change: A range of digital channels as a result of this campaign approach they were able to measure a six X improvement and physical store visits of 380% improvement in conversion rates and an 80% lower cost per acquisition.
Speaker Change: Number 11, we will simplify our platform as platforms mature they add features but that can make it more complex. We will continue to add features and powerful controls for the most sophisticated buyers in the world. However, we're finding ways to improve the experience and make decisions easier and also more intuitive.
Speaker Change: For our users.
<unk> will use more data.
Speaker Change: We have another mantra data driven buying is better than guessing across all parts of our platform. We're using AI to help clients make better decisions, whether it is in making sense of complex data in real time. When it may have previously taken weeks or bringing retail conversion data to bear more often and enriching bid.
Speaker Change: Requests.
Speaker Change: 13, as I said at the beginning we will focus on joint business partnerships or J B piece J B piece, our joint innovation partnerships, where agencies and brands collaborate with us to grow our relationships and drive programmatic innovation, they grow about 50% faster than the rest of our business brands.
Speaker Change: We will generally continue to work with agencies, but they also understand that programmatic is becoming a larger and more important element of their campaign planning.
Speaker Change: As a result programmatic decision, making is happening at a higher and higher level within brands and this presents a tremendous opportunity for the trade desk to grow our brand relationships and share.
Speaker Change: Number 14 on our action item list.
Speaker Change: We have already revised and will continue to revise our product process as we grow it is essential that our product development process remains agile.
Speaker Change: Even as it has to ingest more inputs for more stakeholders. We will do this with a clear focus on what we're delivering week by week, which continues to be at the bleeding edge of AD Tech innovation.
Speaker Change: And then lastly number 15, we'll hire senior leadership to take US. The next level I believe that over the next few years, we will double the number of senior leaders in the company at the VP level and above, especially including some very key senior level appointments in my work.
Speaker Change: This is a natural part of a high growth companies journey, we want to scale the trade desk significantly in the years ahead and that means ensuring we have the right kind of leadership rigor across the company, while preserving the best elements of what we've done so well so far.
Speaker Change: To wrap up the opportunity is bigger than ever we need to keep evolving our company structure to meet that opportunity and realize our potential and the potential of the open internet.
Speaker Change: We are obsessing about ways to drive differentiation and growth.
Speaker Change: We're constantly innovating our platform in order to do that most recently with constant upgrades to Cotai, we're able to make these investments because of the profitability of our business model.
Speaker Change: That focus on constant innovation ensures that we are always prioritizing value for our clients and never standing still.
Speaker Change: We will always have a long term view of where the value in our industry is shifting and how we can then innovate to deliver that value to our clients as rapidly as possible.
Speaker Change: I believe 2024 will be remembered as a pivotal year for our industry, where the premium open Internet was beginning to transform as the clear choice for advertisers seeking data driven precision and performance.
Speaker Change: But we've only just turned the corner on this shift and it is why we are adjusting the company to be bigger and move the market in positive ways I'm not happy with our results in the fourth quarter, but there is so much opportunity in 2025 and the years ahead to help our clients take full advantage of data driven advertising.
Speaker Change: <unk> on the premium Internet to drive growth and brand loyalty for their businesses and that's why I'm confident the trade desk will eventually resume acceleration and continue the path we've been on for over 33 quarters as a publicly traded company.
Speaker Change: We are also the clear leader in the DSP race, and perhaps the leader of the open Internet.
Speaker Change: Thank you and with that I'll hand, it over to Laura to discuss our financials.
Laura: Thank you, Jeff before discussing our results I want to expand on Jeff's sentiments about some of the significant strides we made over the past year positioning us well for the future.
Laura: 24, with a year of landmark partnerships, particularly in CTV, where we saw outsized growth.
Laura: Retail media continued its rapid expansion establishing material foundation for the years ahead.
Laura: International growth accelerated showing promising momentum beyond the U S.
Laura: Additionally, 'twenty 'twenty four marked our largest and most successful year ever for political ad spend.
Laura: The biggest year for you I D. Two since its launch four years ago, and a leap forward for digital audio and programmatic.
When I look across our list of growth drivers most of them are still in their early stages compared to where we expect them to be in the next five to 10 years.
Laura: CTV advertising remains a small fraction of total television ad spend relative to linear.
Laura: Retail media is scaling rapidly evolving from an emerging trend into our core digital advertising channel as brands are recognizing its ability to drive performance and measurement.
Laura: And in most global markets decision programmatic is still in early stages of adoption with tremendous long term growth potential.
Laura: Turning to our results Q4 revenue was $741 million or 22% year over year increase we.
Laura: We generated $350 million of adjusted EBITDA during the quarter, representing a 47% margin.
Laura: However for the first time in our eight and a half years as a public company. Excluding the first quarter of 2020, our results came in below our expectations.
Laura: As a company, we take great pride in our ability to forecast accurately and we take full ownership of the shortfall.
Laura: Importantly, dismiss was not due to a lack of opportunity or increased competition. It was on us.
Speaker Change: We're implementing the strategic changes, Jeff outlined at our business and I believe that will give us an opportunity to continue delivering strong revenue growth throughout this year and beyond.
Speaker Change: For 2024, we ended the year with 12 billion in spend on our platform and 2.4 billion in revenue, representing a 26% increase in revenue year over year.
Speaker Change: Full year adjusted EBITDA margin was about 41% and full year free cash flow with over $630 million.
Speaker Change: As expected our take rate in 2024, once again remained within a very consistent historical range.
Speaker Change: The shift of advertising dollars to CTV continues to be a core driver of our business.
Speaker Change: From a scaled channel perspective in Q4 video, which includes CTV represented a high 40 percentage share of our business and continues to grow as a percentage of our mix.
Speaker Change: Mobile represented a mid thirties percentage share of spend during the quarter display represented a low double digit share of our business and audio representing around 5%.
Speaker Change: Geographically North America represented about 88% of spend and international represented about 12% of spend for the fourth quarter.
Speaker Change: International growth again outpaced North America for the eighth quarter in a row.
Speaker Change: CTV growth across international regions was particularly strong during the fourth quarter and throughout 2024.
Speaker Change: In terms of verticals that represent at least 1% of our spend growth was broad based again this quarter we.
Speaker Change: We saw strong performance in the majority of our verticals, particularly in automotive shopping and technology and computing.
Speaker Change: Political spending was also strong in Q4 as expected.
Speaker Change: Home and garden and pets were both below average we continue to believe there is significant opportunity for us to gain share in all of the verticals we serve.
Speaker Change: Turning now to expenses.
Speaker Change: Q4 operating expenses, excluding stock based compensation were $416 million up 23% from a year ago.
Speaker Change: 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.
Speaker Change: Income tax expense was $39 million in the fourth quarter, driven primarily by our profitability and stock based awards.
Speaker Change: Adjusted net income for the quarter was $297 million or <unk> 59 per fully diluted share.
Speaker Change: Net cash provided by operating activities was $199 million in free cash flow was 177 million in Q4.
Speaker Change: DSO is exiting the quarter were 97 days down four days from a year ago D. P. O S were 80 days down three days from a year ago.
Speaker Change: We ended the year with a strong cash and liquidity position our balance sheet had about 1.9 billion in cash cash equivalents and short term investments at the end of the quarter, we have no debt on the balance sheet.
Speaker Change: In Q4, we repurchased $57 million of our class a common stock via our share repurchase program.
Speaker Change: As you saw in our press release, we announced an additional authorization under our share repurchase program, bringing the total to $1 billion inclusive of the amount remaining from the existing authorization.
Speaker Change: Given our strong balance sheet and consistent cash flow generation, we plan to continue opportunistic share repurchases, while also offsetting dilution from employee stock issuances.
Speaker Change: Now turning to our outlook for the first quarter, we expect revenue to be at least $575 million, reflecting 17% year over year growth.
Our Q1 growth estimates also reflect the impact of lapping the extra day from the 'twenty 'twenty four leap year as well as political AD spend which contributed approximately 1% over Q1 2024 revenue.
Speaker Change: We estimate adjusted EBITDA to be approximately $145 million in Q1.
Speaker Change: Turning to our expense outlook for the year, while we are not providing a full year expense guidance, we anticipate a modest increase in the growth rate of our operating expenses in 2025 compared to previous years.
Speaker Change: As a result, we would expect modest deleverage for the year.
Speaker Change: Our investments are focused on key areas, such as infrastructure and talent are incremental investments align with the recalibration efforts, Jeff outlined in his remarks.
Speaker Change: Our capital intensity remains low and we expect capex to be approximately 5% of our total revenue.
Speaker Change: We expect another strong year of cash flow generation.
Speaker Change: We continue to manage the business with a balanced perspective that allows us to weigh investment opportunities, while retaining flexibility for margin improvement.
Speaker Change: In closing, while the back half of 'twenty 'twenty four it did not and exactly as we'd hoped our long term trajectory remains strong I'm optimistic about 2025, we.
Speaker Change: We continue to lead in a rapidly growing industry delivering profitable growth and gaining significant market share.
Speaker Change: Momentum is fueled by a strong set of growth drivers, including the ongoing secular shift to CTV.
Speaker Change: Enhanced measurement through retail data international expansion, a robust identity framework supply chain improvements and the ability to drive long term leverage in our model.
Speaker Change: As we look ahead, we remain confident in our ability to sustain this growth and capitalize on the opportunities before us.
While we are not providing a full year 2025 revenue outlook, we expect that our recalibration efforts and strategic investments will position us for continued strong growth throughout 2025 and beyond.
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 the star keys.
Speaker Change: One moment, please while we poll for questions. Once again, please press star one if you have a question or comment.
Sean Patel: Our first question comes from Sean Patel with <unk>. Please proceed.
Sean Patel: Hey, Jeff.
Speaker Change: As you know I've been covering.
Speaker Change: You guys since you've been public in following the company long before that.
Speaker Change: And until now for for over eight years, you guys have had an amazing run.
Speaker Change: Your guidance every single time.
Speaker Change: Wondering if you can you can you just talk about what went wrong.
Speaker Change: In the fourth quarter, where you guys came in below your expectations. Thank you.
Speaker Change: Yes.
Speaker Change: Thanks, Tom really appreciate the question.
Speaker Change: So first let me on that we missed and that we missed our own expectations. As you pointed out which is in my mind very different from missing wall Street's expectations.
Speaker Change: So when we when we set our guide and set our expectations I view that as a commitment.
Speaker Change: It's understandable in a moment like this for those outside the company, especially shareholders to be wondering what does this mean.
Speaker Change: Opportunity not as big as the trade desk claims or.
Speaker Change:
Speaker Change: Is it different than what they saw as the company executing because there's something wrong.
Speaker Change: Is it big or is it small and I just want to be Super clear we missed.
Speaker Change: Because we had a series of small execution missteps.
Speaker Change: We needed to execute while simultaneously trying to prepare for our future and we made a number of small mistakes and trade ups that compounded.
Speaker Change: Sure again compared to a pro sports team, we have a championship team we've proven that for the last eight years as a public company.
Speaker Change: But we turned over the ball too many times in this game and that's why we lost the game.
Speaker Change: The opportunity is not smaller than we thought in fact, just the opposite my focus the last quarter and now it's about Recalibrating the company to become a bigger company because we are facing a bigger opportunity faster than we thought.
Speaker Change: So I just want to reiterate some of the changes that we've made.
Speaker Change: We're making those to make certain that this doesn't become a pattern.
Speaker Change: So here's a couple of those first.
Speaker Change: For most people in the company, we provided a much clearer view of roles and responsibilities and that also meant a change in reporting structure and what was the biggest reorient the history of the trade desk.
Speaker Change: Second an engineering, we've reviewed the way that we ship products. Our overall product process, we've implemented a process of smaller agile teams, who ship product every week.
Speaker Change: Some teams had drifted to be a little bit to waterfall life, because we strive for big milestone releases like Coca.
Speaker Change: And we've structured it to be more agile again and.
Speaker Change: And in most cases, we've created two pizza teams that ship product every week as I mentioned before.
Speaker Change: Our roughly 100 scrum teams very small teams to be very agile that are shipping frequently.
Speaker Change: We've historically been one of the most focused and most productive engineering teams ever pointed ad tech.
Speaker Change: We still are but we can be more efficient than we are today.
Speaker Change: Third we also we also restructured our client facing teams.
Speaker Change: As we've grown and we've started to overlap between our agency and brand teams and that's become complicated and in moments not very helpful or useful.
Speaker Change: As a result, we simplified.
Speaker Change: Some people focus on brand some people focus on agencies, we've created much clearer engagement between them.
Speaker Change: And Relatedly I want to reinforce that we are loyal to the agencies and our strategy to support them and partner with them.
Speaker Change: Continues into our future.
Speaker Change: We will continue to be great partners to the agencies.
Speaker Change: We also will continue to expand our brand direct conversations and continue to focus on <unk>, and especially given the JV piece grow about 50% faster than the rest of our business. We naturally want more of those and this is one of the pockets, where we're investing most with new people.
Speaker Change: And then fourth in December January we've spent more time discussing what we can do to improve than ever in the history of the company for most of the last 15 years, we focused most of our efforts on addressing the opportunity on the horizon.
Speaker Change: Lately, we've been discussing how to make our own people operation more efficient and more scalable the.
Speaker Change: The process has been very good for our long term.
Speaker Change: And it's also highlighted that we need to continue to hire very senior people, who can help our company scale.
Sean Patel: On a final note your question Sean.
Sean Patel: For much of 2024, we were faced with some big strategic decisions honestly more than usual.
Sean Patel: Some of these were questions, where the long term and the short term we're at odds.
Sean Patel: Do we focus on the short term revenue or build the long term.
Sean Patel: And I just wanted you all to know that my bias is always towards capturing the long term opportunity I'd, rather Miss a quarter then to trade the long term.
Sean Patel: Coca enhancements continue to inject more AI or sophisticated buying techniques.
Massive enhancements to the supply chain, which is the motivation for acquiring since ore unmet need of the company that will start being accretive trade desk before the end of this year.
Sean Patel: As you know this is only the third acquisition in the history of the company and while we never want to get distracted with acquisitions that make headlines and then never integrate the way so many others do we.
Sean Patel: We will look for companies that enhance our long term opportunity. That's why we made this acquisition and.
Sean Patel: And that's why we're so optimistic optimistic about what it can do for our future. So am I really appreciate the question. Thank you.
Speaker Change: Okay. The next question comes from Vasili <unk> with Cannonball Research. Please proceed.
Vasili: Thank you I wanted to follow up on the first question so going into.
Speaker Change: Your earnings report there were a lot of concerns I've heard about week of brand spend post election.
Vasili: Our budget flush.
Vasili: Issues with call Kai rollout pace.
Vasili: But then other AD funded companies Kevin reported anything.
So as a result, similar to yours. So can you probably share a little more detail about what you observed about the difference between you and the industry.
Vasili: To what extent did factors like polarized political environment. For example, the New York Times calls them out quite a lot lower Q4, GDP print or any product rollout issues impacted the shortfall in Q4. Thank you.
Speaker Change: Thanks facility for the question.
Speaker Change: I just want to point out in 2022 macro was a factor the advertising was sharply decelerating and yet we were agile then and we were efficient.
Speaker Change: And we still significantly outperformed the market.
Speaker Change: <unk> expectations are one specifically.
Speaker Change: I bring that up to say that we've had challenging environments before and we still outperformed.
Speaker Change: The GDP unusual election uncertainty continued pricing pressure on some consumers and some companies doesn't create an ideal environment.
Speaker Change: This one wasn't a perfect environment.
Speaker Change: But we've outperformed in environments like this one before as I pointed out in 2022, but we didn't this time.
Speaker Change: Political put some advertisers on the sidelines, that's absolutely true, but it also brings out budgets, especially of course, the political budgets and on the <unk>.
Speaker Change: That was it a positive or a negative to me, it's too close to call the environment wasn't perfect, but we knew that when we guided even if it was slightly harder than we thought we've navigated that before.
Speaker Change: Youre right.
Speaker Change: And I know theres going to be a thousand questions a bunch of you.
Speaker Change: We've actually already started a couple of them and I know there will be more.
Speaker Change: Because we've done so well for so long.
Speaker Change: Setting expectations.
Speaker Change: And when we talk about the misstep specifically many of them involve people mistakes that are appropriate to discuss publicly especially when people are already learning from these mistakes.
Speaker Change: Yes, one of those youre right that <unk> rolled out slower than we anticipated, but much of that was for good reason.
Speaker Change: We've seen moments and places to inject AI like improving the foundation of our forecasting and performance models that is a short term negative for sure but it is a long long term negative.
Speaker Change: We are working I'm, sorry, it's a long term positive.
Speaker Change: Alright.
We are working really hard to get the deals right and lay groundwork to move the upfronts to digital again long term I think this is amazingly good for us and I'm confident we're building the right things in other words in some cases.
Speaker Change: Lower <unk> rollout was deliberate a quicker rollout would result in more short term spend.
Speaker Change: And we don't always build what the customers want instead, we're trying to understand what the customer needs.
Speaker Change: Elevating us and them together is a much harder task than simply taking orders.
Speaker Change: So as it relates to the internal changes I think it's best to operate our company with our talent and the opportunity that we're facing.
Speaker Change: <unk> build the org and the team of the future as fast as possible. So that we capture the most market share possible end state.
Speaker Change: As I said in the prepared remarks from the beginning I argued that the objective independent focused ESP.
Speaker Change: One that should get the largest market share the lion's share not the walled gardens, who are full of conflict of interest we're fighting hard to get there first our focus our objectivity and our agility our essential to win.
Speaker Change: I want to get bigger and I don't want to slowdown, but to do that requires us to change.
Speaker Change: The silver lining.
Speaker Change: If you want to call it that.
Speaker Change: I do.
Speaker Change: We believe that this is in our control it's ours to lose and we will be a better company as a result of the changes that we're making and it will be a long term positive.
Speaker Change: Thank you.
Speaker Change: Okay. The next question comes from Justin Patterson with Keybanc. Please proceed.
Speaker Change: Great. Thank you very much Jeff really appreciate that degree of detail I guess as you step back and move through this recalibration period.
Justin Patterson: How do you view, the companys perpetual, but sustained at 20% plus compound growth rate over the next several years I know you don't provide annual guidance or long term targets, but I think that'd be helpful for us to kind of think through what the business looks like as you come out of this period and then Laura separately, how should we think about the investments required to get us to that.
Speaker Change: Thank you.
Speaker Change: Justin Thanks for the question I really appreciate it actually all the questions I feel like we're getting to the heart of the issue. So.
Speaker Change: This is honestly, giving me a platform to talk about the things that I think matter most so.
Speaker Change: On this one I think it really comes down to how we approach our business.
Speaker Change: In my view, we have to obsess about making the open internet better than walled gardens walled gardens have cheap inventory.
Speaker Change: And I think Theres a lot of people that are chasing cheap.
Speaker Change: Even if it doesn't help them in the long term.
Speaker Change: We have the best of the entire open internet on our side and via our platform our supply chains are very different.
Speaker Change: From others, especially the wildcard as they control their small ecosystems.
Speaker Change: But I think we have something way better going for us.
Speaker Change: If you just look at any trade media today Youll see that brands are increasingly wary of the dangers of cheap reach.
Speaker Change: Meanwhile, we have access to all of the media that people love most CTV movies journalism of music.
Speaker Change: All the premium open Internet and while we don't control the supply chain end to end the way walled gardens due by the nature of walled gardens.
Speaker Change: I think thats, a way better long term for us and for the markets because competitive markets become more efficient over time the competition of our markets are working for us.
Speaker Change: And we're in a very strong position being on the buy side, but there is so much to do to make the supply chain more efficient and to make our company more efficient.
Speaker Change: I just want to remind everybody that last quarter I outlined 10 macro factors are secular tailwind that are driving our business. Those have not changed we believe that while our share has been growing faster than any of our scaled competitors. I also believe the opportunity is growing too and Thats why were Recalibrating now.
Speaker Change: I believe that we can reaccelerate our growth again focus.
Speaker Change: For us we need to focus on what we're doing about it.
Speaker Change: And Thats.
The 15 themes that we outlined in gist.
Speaker Change: Summarize a couple of those.
Speaker Change: We need to focus on scale, we need to focus on the hold of Google and Facebook are leaving as they turn their attention away from the open Internet.
Speaker Change: We need to promote our objectives against cheap reach we need to improve the supply chain and.
Speaker Change: In fact, we're obsessing about it we need to grow CTV and right behind that we need to grow audio while CTV maybe.
Speaker Change: The biggest opportunity audio might be one of the most untapped and I continue to argue it's the most on sale corner of the Internet.
We need to grow our <unk> or in other words get closer to brands and maintain our closeness with the agencies. We've proven for years now that we can do both and.
And we need to ship product for the future and that includes AI that includes getting coca to 100% before the end of the year. So we have a lot of work to do and we're incredibly focused on it we are all in agreement on what needs to happen in order for us to take the company to the next level Butler.
Speaker Change: Laura I know, there's a lot that you can elaborate on just the second part of his question from a financial perspective, Florida, Yeah. Thanks, Justin on the investments required for 2025 first just looking back at 2024, we delivered an incredibly strong year in terms of profitability and cash flow generation and we exited the year with a strong balance sheet. So as I mentioned in the script we.
Speaker Change: Anticipate a modest increase in the growth rate of our operating expenses in 2025 compared to previous years and as a result of that we would expect some deleverage for the year.
Speaker Change: Our investments are going to focus on key areas, such as infrastructure and talent and those incremental investments align with the Recalibration efforts, Jeff outlined in his prepared remarks. So we continue as we always have to be very deliberate about our investments in our hiring.
Speaker Change: Our capital intensity also remains low we expect capex to be approximately 5% of total revenue and when I look across our growth drivers frankly, I believe nearly all of them are still in their early stages compared to where they will be in five to 10 years. So if we generate significant revenue gains will continue investing and if not or if the current environment significantly changes.
Speaker Change: We will have the flexibility to adjust our investment pace accordingly.
Speaker Change: I also just want to point out that today, we announced an additional share repurchase authorization, bringing the total to $1 billion as of the end of 2020 for approximately $464 million remained on the authorization. So as I've always said, we take an opportunistic approach to our share repurchase program, we're guided by market conditions and our capital priorities.
Speaker Change: So that's how I would summarize our 2025 investments.
Speaker Change: Operator, we can move on to the next question.
Speaker Change: Thank you. The next question comes from Youssef Squali with Truth Securities. Please proceed.
Youssef Squali: Awesome. Thank you guys for taking the question so Jeff I'm very curious about your Google comment. So are you already observing a significant shift in in.
Youssef Squali: In advertiser sentiment or the transition occurring at a much more gradual and measured manner and if it is how do you frame and size that longer term opportunity and then Laura just quickly what was the political contribution in Q4. Please thank you.
Speaker Change: Thanks for the question.
Speaker Change: So I'll try to be a little more brief on this one so laura can answer.
Speaker Change: Continue on but.
Speaker Change: So let me just frame what I think's happening with Google and first start by just talking about what's happening right now and has for the last little while.
Speaker Change: The network business of Google has been shrinking on shrinking for years.
Speaker Change: To me this.
Speaker Change: As evidence of the de prioritization.
Speaker Change: Google continues to focus on Gemini in cloud and AI in search and Youtube.
Speaker Change: I think that makes sense for them to do if you look at where the money comes from.
Speaker Change: I think the network and open Internet business is way less important to them than it has ever been.
Speaker Change: So as a result, I'm confident that one way or another Google is going to exit the open Internet and I think that makes sense actually for them.
Speaker Change: If you think about it most of their antitrust and regulatory problems come from the ways that they have manage the open internet in the past and that has created a lot of baggage for them today, especially as it relates to interactions with.
Speaker Change: Governments and markets around the world.
Speaker Change: As they look to really grow in places like Gemini in cloud and AI in search and Youtube.
Speaker Change: So if you then look more closely at where we compete specifically and I've often said.
Speaker Change: We don't compete with big Google, we compete with the 27th highest priority at Google, which was one <unk> hundred 60, and now I believe.
Speaker Change: Been downgraded when compete with something like the 47th highest priority at Google.
Speaker Change: But that is less and less becoming a competitor because the majority of spend that is going through <unk> hundred 60.
Speaker Change: It seems to be routed to Youtube or at least that's what the evidence suggests.
Speaker Change: So I believe that regardless of what happens with the pending trial, Google will distance itself from the open Internet.
Speaker Change: The trial could make it so that they lead quickly and with some sort of announcement or they could keep backing away slowly, but either way the trends suggest that there is a whole and it is getting bigger.
Speaker Change: I think Google will leave a very big hole eventually.
Speaker Change: That is a big opportunity for the rest of us and the open internet.
Speaker Change: It makes it possible to continue to service the open Internet.
And their prioritization creates more room for us.
Speaker Change: We can benefit from it more than any other company.
Speaker Change: But in my humble opinion, Google has been the biggest hindrance to the effective supply chain of the open internet than any other company.
Speaker Change: An abrupt change could happen this year or next and.
Speaker Change: That would be good for us, but at the same time, we have to be positioned well to capture the opportunity I do believe that opportunity is getting bigger.
Speaker Change: And I, if you ask me what I lose sleep over.
Speaker Change: Steve over missing the opportunity of being ready for that opportunity and as part of the reason why I'm actually excited about all the changes that we're talking about today, because I believe that the changes that we're making are helping to make this company more scaled so that we can respond to the hole that's being left from these very big companies paying less in.
Speaker Change: Less attention to the open Internet, Florida. The second part of the question. Yes. Thanks, Youssef just quickly on political it was about 5% of the business in the fourth quarter and that was a peak so for the year. It was in the low single digits.
Speaker Change: Thank you.
Speaker Change: Yes. Thank you.
Speaker Change: Okay. The next question comes from Jason <unk> with Oppenheimer. Please proceed.
Jason Oppenheimer: Thanks for taking my question So Jim I, just wanted to ask you about Amazon.
Jason Oppenheimer: It's gotten a lot of investor attention a lot of training practice as far as the other.
Jason Oppenheimer: Company, making improvements to their DSP.
Jason Oppenheimer: Getting aggressive with prime video ads.
Speaker Change: How do you view that in the competitive landscape do you see any kind of change in the fourth quarter.
Speaker Change: And just I guess, how do you think about them as a competitor going forward. Thank you.
Speaker Change: You bet. Thanks for the question so.
Speaker Change: Of course, when you go through a recalibration.
In a moment like this.
Speaker Change: I think it calls for a reflection in retrospection.
Speaker Change: I've spent a lot of time thinking about sort of what are we sure of what are the bets that we doubled download.
Speaker Change: And as I wrote in the first business plan.
Speaker Change: I've been saying for 15 years at end state Theres only going to be a handful of the Sps I think one of them probably one maybe two but in but with today's visibility I would say there is likely to be one is going to be.
Independent and objective DSP and that should should get the lion's share.
Speaker Change: As it relates to Amazon's DSP.
Speaker Change: Objectivity matters more than ever has everyday that goes by it matters more and more at Amazon's objectivity problem is way worse than google's because Amazon competes.
Speaker Change: With nearly every company in the fortune 500 or at least the majority of them.
Speaker Change: I know theres a lot of focus that goes to Amazon as it relates.
Speaker Change: Advertising and I think it's really important that investors parse out the three roles that Amazon plays and in advertising.
Speaker Change: Biggest one by far is that they are a search engine.
Speaker Change: Meeting with Google's core business, if you will.
And that is the biggest source of revenue for them in advertising.
Speaker Change: It's probably.
Speaker Change: Prime video.
Speaker Change: And I think that was a very interesting because I think that's the right way to look at them as somebody like Paramount to our like Fox they are creating premium content.
Speaker Change: And they created a lot of ads as a result of that but I see no reason why that shouldnt join the premium open Internet and we shouldnt partner with them on that and I do think long term that's in their best interest and ours as they seek to monetize that and as we've talked about before I believe Amazon tends to look at them separate.
Speaker Change: And try to get every department to be profitable on their own and I do think that that creates a big opportunity for us.
Speaker Change: As it relates to the DSP itself again to have an objectivity problem that is a much much smaller business than the other two and I think particularly the second one represents an opportunity for partnership.
Third is as a competitor that I don't view nearly the competitor that most of the other players in the space are simply because of their objectivity problem that overtime I think gets worse for them. So I'm excited about what that means for us and for our future and our prospects to compete and what I think will be.
Speaker Change: More and more competitive market as the Tam gets bigger.
Jason Oppenheimer: Thanks, Jason.
Jason Oppenheimer: Okay. The next question comes from Jessica Reif Ehrlich with Bofa Securities. Please proceed.
Speaker Change: Okay. Thank you once the javelin one for Lora okay.
Speaker Change: It seems like open path is at a tipping point this year and it was one of your top five.
Speaker Change: Alrighty ill focus can you just talk a little bit about.
Speaker Change: The details of the plan.
Speaker Change: But they are coming year and also how the acquisition of some Sarah will contribute to open path adoption.
Speaker Change: And then for Lora.
Speaker Change: Can you give us some color on the expense ramp your Q1 guide implies.
Speaker Change: Pretty significant margin compression. So is that indicative of full year margin deleveraging as you said or is Q1 kind of the biggest impact in the operating line operating expense ramp.
Speaker Change: Thanks, Laura I appreciate the question. So let me just first remind everybody what open path is.
Speaker Change: Basically we made it possible for the biggest content owners in the world to integrate with us directly.
Speaker Change: If they choose to do their own your yield management or build it themselves. They don't need to use an SSP. They can be an SSP themselves if they'd like to.
Speaker Change: We expect that many of the biggest content owners in the world will take this route especially in CTV.
Speaker Change: Audio because it's financially worth it for them to do it and they want to control their own fate as it relates to yield optimization. So we've made it possible for them to plug in to us directly.
Speaker Change: Taken us a little bit of time to get them to do so because we have historically not partnered on that level as well as mostly it's because they have to build technology in order to do that on their own but we've had that option available for a couple of years.
Speaker Change: As streaming wars and competition.
Speaker Change: Pizza as well as the fact that SSP business models have become more and more at odds with CTV content owners and with streamers of all kinds, including audio.
Speaker Change: It makes it so that.
Speaker Change: They are all interested in doing a direct integration with us and managing their own yield management.
Speaker Change: So because of the number of deals that we've signed recently, we're extremely confident that 2025 will be the year that we entered the steep part of the S curve that we've been paying our dues for years and that this will pay off this year as it pays off this year, we think that means a more effective supply chain and in order to ensure that that.
Speaker Change: Happens, we also Boston Sara the metadata company that helps us evaluate what's happening across the entire supply chain to make certain that we have visibility as well as we provide visibility to the open internet. So that they can know what changes to make in order to make the supply chain more effective and it's not something we're trying to keep for ourselves.
Speaker Change: But to use to make certain that everybody in the ecosystem knows how to make a more effective supply chain. That's what I was talking about before where I believe that we have a more difficult burden than other players in the space in the sense that we are leading the open internet and can make the entire supply chain more effective if we play the right role and I think we found a way.
Speaker Change: To do that with a sincere acquisition, which will create more price discovery create better standards and will make it. So that we are only buying the inventory from those who describe at best and describe it accurately and if they don't we will buy it and that is a luxury that we have as the supply demand imbalance grows every single day.
Laura: Laura you're part of the year Jessica.
Laura: With regards to your question about Q1, EBITA I did mentioned in the script that we do anticipate a modest increase in the growth rate of our operating expenses in 2025 and that we'd see some deleverage for the year.
Laura: I wouldn't recommend thinking about it linear flurry typically in our business EBITDA improves as the year progresses, which is just driven by our investment choices and seasonality in the business.
Speaker Change: Thanks, Jessica and John we have time for one more question. Thanks Jessica.
Speaker Change: Our last question comes from Mark Mahaney with Evercore. Please proceed.
Okay. Thanks, I don't know of another company. That's 32 for 33. So you have obviously been doing something right.
Jeff Green: Two questions I wanted to ask but Jeff.
Justin Patterson: Jeff You mentioned senior leadership that you want to hire so can you brief on that a little bit like in what areas and then second you mentioned resuming acceleration in revenue so at a high level forget about the numbers and the specific timing what factors like could you triage somewhat what factors would most contribute to a reacceleration in revenue at some.
Speaker Change: Thanks, a lot.
Jeff Green: Thanks Mark.
Jeff Green: Great.
Jeff Green: <unk>.
Jeff Green: One of the.
Jeff Green: One of the areas, where I think that we can hire.
Jeff Green: Let me first just say I appreciate the compliment.
Jeff Green: I am Super proud of the fact that we have.
Jeff Green: I've done this 32 quarters in a row and while I am disappointed that we didn't do it. This time, we knew at some point, we would have to miss in.
Jeff Green: As I have said to the team I'm excited for the opportunity to prove to the world what happens next.
Jeff Green: We know that people will be responding or looking to see how we respond.
Jeff Green: <unk>.
Jeff Green: I'm actually grateful for the asset.
Jeff Green: On that level.
Jeff Green: I think one of the things that we have to do is we have to keep adding to our team and looking.
Jeff Green: Two how.
Jeff Green: How we can enhance our go to market.
Jeff Green: We make the sports analogies, but one thing that's very different about that is if you're playing basketball you put five guys on the court.
Jeff Green: Thats different in business, where you can just add to the team.
Jeff Green: And I think there are some opportunities for us to get more efficient we have we've done all of this without a COO for some time.
Jeff Green: There is absolutely no reason why we shouldn't add a world class COO to the team and that of course is we're looking to be operationally more rigorous.
Jeff Green: We want somebody to come help us do that Thats an area that I think is fairly obvious for us to add there are others as well, but I just offer that as a suggestion, where we can we can definitely level up and our operational efficiency.
Jeff Green: On the.
Jeff Green: The second part of the question.
Jeff Green: Factors that could cause reacceleration, yes, it's a factor.
Jeff Green: Did that cause acceleration.
Jeff Green: There are so many and it's really hard to sort.
Put coefficient on all of the 15 things that we said in this quarter and all of the 10 that we highlighted in terms of secular tailwind from before but big picture here, where the trillion dollar Tam we currently control a little over 1% of it.
Jeff Green: We have 98% of the Tam left and the CTV should be fast growing <unk>.
Jeff Green: The United States should be growing faster than the United States for obvious reasons.
Jeff Green: Audio is untapped I think Spotify highlighted this in their earnings I think theres, a tremendous opportunity for them and for us and for the open Internet that can come from that I think theres a lot of inefficiencies in the supply chain.
Jeff Green: Now we're just at the right size, where we can change it.
Jeff Green: We're big enough to create changes.
Jeff Green: And those are those are four of them, but honestly.
Jeff Green: Im leaving off a whole bunch of them.
Jeff Green: Okay.
Jeff Green: Okay. Thank you Jeff.
Speaker Change: Thanks, Mark and John we can close out the call.
Speaker Change: Thank you we've reached the end of the question answer session. This.
Speaker Change: This concludes today's conference and you may disconnect. Your lines at this time. Thank you for your participation.
Speaker Change: Yeah.