10q10k10q10k.net

What changed in Trade Desk (The)'s 10-K — 2023 vs 2024

vs

Paragraph-level year-over-year comparison of Trade Desk (The)'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+451 added−429 removedSource: 10-K (2025-02-21) vs 10-K (2024-02-15)

Top changes in Trade Desk (The)'s 2024 10-K

451 paragraphs added · 429 removed · 331 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

64 edited+6 added−4 removed79 unchanged
Biggest changeWe have worked to cultivate industry-wide support and collaboration for the Unified ID 2.0 approach, and we intend to continue these efforts. EUID, a European-focused version of Unified ID 2.0, was released in a limited beta in 2023. • Ensure Access to Quality Inventory, Including through OpenPath.
Biggest changeSubject to appropriate guardrails, participants in Unified ID 2.0 can then use this UID2 in connection with our platform and other services, including ad buying and reporting. We have worked to cultivate industry-wide support and collaboration for the Unified ID 2.0 approach, and we intend to continue these efforts.
We believe we are differentiated from our competitors in the following areas: • we are an independent technology company focused on serving advertising agencies and others on the buy side of our industry; • our client relationships are based on MSAs as opposed to campaign-specific insertion orders; • our platform provides comprehensive access to a wide range of inventory types and third-party data vendors; • our platform allows clients to build proprietary advantages by integrating custom features and interfaces for their own use through our APIs; and • our technology provides highly expressive targeting.
We believe we are differentiated from our competitors in the following areas: • we are an independent technology company focused on serving advertising agencies, advertisers and others on the buy side of our industry; • our client relationships are based on MSAs as opposed to campaign-specific insertion orders; • our platform provides comprehensive access to a wide range of inventory types and third-party data vendors; • our platform allows clients to build proprietary advantages by integrating custom features and interfaces for their own use through our APIs; and • our technology provides highly expressive targeting.
In the U.S., both federal and state legislation govern activities such as the collection and use of personal data, and data privacy in the advertising technology industry has frequently been subject to review by the Federal Trade Commission (the “FTC”), U.S. Congress, and individual states.
In the United States, both federal and state legislation govern activities such as the collection and use of personal data, and data privacy in the advertising technology industry has frequently been subject to review by the Federal Trade Commission (the “FTC”), U.S. Congress, and individual states.
Generally, these MSAs have one-year terms that renew automatically for additional one-year periods, unless earlier terminated, and are terminable at any time upon 60 days’ notice by either party. Our clients are loyal, as reflected by our client retention rate of over 95% in each of the last ten years.
Generally, these MSAs have one-year terms that renew automatically for additional one-year periods, unless earlier terminated, and are terminable at any time upon 60 days’ notice by either party. Our clients are loyal, as reflected by our client retention rate of over 95% in each of the last eleven years.
In connection with some of our newer offerings, including Unified ID 2.0 and EUID, we do allow users of those services to disclose some directly identifying information, such as phone number and email address, to us for purposes of transforming that information into pseudonymous identifiers to use on our platform.
In connection with certain offerings, including Unified ID 2.0 and EUID, we do allow users of those services to disclose some directly identifying information, such as phone number and email address, to us for purposes of transforming that information into pseudonymous identifiers to use on our platform.
Advances in software and hardware, and the ubiquitous use of the Internet, have enabled the generation of user data at an unprecedented scale. Data vendors and other organizations are able to collect this user data across a wide range of Internet properties and connected devices, aggregate it and combine it with other data sources.
Increased Use of Data and Measurement. Advances in software and hardware, and the ubiquitous use of the Internet, have enabled the generation of user data at an unprecedented scale. Data vendors and other organizations are able to collect this user data across a wide range of Internet properties and connected devices, aggregate it and combine it with other data sources.
We compete with other demand-side platform providers, some of which are smaller, privately held companies and others are divisions of large, well-established companies such as Google and Adobe. We believe that we compete primarily based on the performance, capabilities and transparency of our platform as well as our focus on the buy side.
We compete with other demand-side platform providers, some of which are smaller, privately held companies and others are divisions of large, well-established companies such as Google and Amazon. We believe that we compete primarily based on the performance, capabilities and transparency of our platform as well as our focus on the buy side.
If all or some jurisdictions within the EU or the U.K. determine that the latest standard contractual clauses cannot be used to transfer personal data to the U.S. and if the DPF is ultimately struck down in a manner similar to the Privacy Shield Framework, then, we could be left with no reasonable option for the lawful cross-border transfer of personal data.
If all or some jurisdictions within the EU or the U.K. determine that the latest standard contractual clauses cannot be used to transfer personal data to the United States and if the DPF is ultimately struck down in a manner similar to the Privacy Shield Framework, then, we could be left with no reasonable option for the lawful cross-border transfer of personal data.
Our platform enables advertisers and agencies to: • purchase digital media programmatically on various media exchanges and sell-side platforms; • acquire and use third-party data to optimize and measure digital advertising campaigns; • integrate and deploy their proprietary first-party data within our platform to optimize campaign efficacy; • monitor and manage ongoing digital advertising campaigns on a real-time basis; • link digital campaigns to offline sales results or other business objectives; • access other services such as our data management platform and publisher management platform marketplace; and • use our user interface and APIs to customize and expand platform functionality.
Our platform enables advertisers and agencies to: • purchase digital media programmatically on various media exchanges and sell-side platforms, as well as directly from publishers; • acquire and use third-party data to optimize and measure digital advertising campaigns; • integrate and deploy their proprietary first-party data within our platform to optimize campaign efficacy; • monitor and manage ongoing digital advertising campaigns on a real-time basis; • link digital campaigns to offline sales results or other business objectives; • access other services such as our data management platform and publisher management platform marketplace; and • use our user interface and APIs to customize and expand platform functionality.
We also intend to invest in technology to further automate our business processes. Seasonality In the advertising industry, companies commonly experience seasonal fluctuations in revenue. For example, many advertisers allocate the largest portion of their budgets to the fourth quarter of the calendar year in order to coincide with increased holiday purchasing.
We also intend to invest in technology to further automate our business processes. 10 Table of Contents Seasonality In the advertising industry, companies commonly experience seasonal fluctuations in revenue. For example, many advertisers allocate the largest portion of their budgets to the fourth quarter of the calendar year in order to coincide with increased holiday purchasing.
Website addresses referred to in this Annual Report on Form 10-K are not intended to function as hyperlinks, and the information contained on our website is not incorporated into, and does not form a part of this Annual Report on Form 10-K or any other report or documents we file with or furnish to the SEC. 14 Table of Contents
Website addresses referred to in this Annual Report on Form 10-K are not intended to function as hyperlinks, and the information contained on our website is not incorporated into, and does not form a part of this Annual Report on Form 10-K or any other report or documents we file with or furnish to the SEC.
Many of our clients serve advertisers on a global basis, and we intend to expand our presence outside of the United States (“U.S.”) to serve the needs of those advertisers in additional geographies. As we expand relationships with our existing clients, we are investing in select regions in Europe and Asia.
Many of our clients serve advertisers on a global basis, and we intend to expand our presence outside of the United States to serve the needs of those advertisers in additional geographies. As we expand relationships with our existing clients, we are investing in select regions in Europe and Asia.
Our platform allows clients to execute integrated campaigns across various advertising channels and formats, including video (which includes CTV), display, audio, digital-out-of-home, native and social, on a multitude of devices, including computers, mobile devices, televisions and streaming devices. • We Are Focused on the Buy Side. We focus on buyers since they control the advertising budgets.
Our platform allows clients to execute integrated campaigns across various advertising channels and formats, including CTV and other video, display, audio and native, on a multitude of devices, including televisions, streaming devices, mobile devices, computers and digital-out-of-home devices. • We Are Focused on the Buy Side. We focus on buyers since they control the advertising budgets.
As of December 31, 2023, we have integrated our platform with more than 250 third-party data vendors whose products are available for purchase through our platform. Sales and Marketing Given our self-service business model, we focus on supporting, advising and training our clients to use our platform independently as soon as they are ready to transact.
As of December 31, 2024, we have integrated our platform with more than 350 third-party data vendors whose products are available for purchase through our platform. Sales and Marketing Given our self-service business model, we focus on supporting, advising and training our clients to use our platform independently as soon as they are ready to transact.
We also empower our clients with an extensive set of measurement capabilities, both through a number of proprietary benchmarking tools and indices, and through integrations with a broad selection of third-party measurement partners. 7 Table of Contents • Artificial Intelligence. Koa, our predictive algorithmic tools, utilizes artificial intelligence to process complex data sets and make recommendations for campaign optimizations.
We also empower our clients with an extensive set of measurement capabilities, both through a number of proprietary benchmarking tools and indices, and through integrations with a broad selection of third-party measurement partners. • Artificial Intelligence. Koa, our predictive algorithmic tool, utilizes artificial intelligence to process complex data sets and make recommendations for campaign optimizations.
We believe this approach strengthens our relationships with our clients and helps us grow their use of our platform over the long term, providing us with a highly scalable business model. 6 Table of Contents • We Are a Clear Box, Not a Black Box.
We believe this approach strengthens our relationships with our clients and helps us grow their use of our platform over the long term, providing us with a highly scalable business model. • We Are a Clear Box, Not a Black Box.
With our platform, our clients control their campaign spend and can access and choose from many inventory sources. • We Have Ongoing Relationships with Clients. We derive substantially all of our revenue from ongoing MSAs with our clients, rather than episodic insertion orders.
With our platform, our clients control their campaign spend and can access and choose from many inventory sources. 6 Table of Contents • We Have Ongoing Relationships with Clients. We derive substantially all of our revenue from ongoing MSAs with our clients, rather than episodic insertion orders.
In addition, our clients typically grow their use of our platform and related offerings over time. If all of our individual client contractual relationships were aggregated at the holding company level, one holding company, Publicis Groupe, would have represented more than 10% of our gross billings in 2023 and 2022.
In addition, our clients typically grow their use of our platform and related offerings over time. If all of our individual client contractual relationships were aggregated at the holding company level, one holding company would have represented more than 10% of our gross billings in 2024 and 2023.
Our platform enables clients to optimize campaigns with numerous highly relevant data sets, including from an extensive selection of third-party vendors, in a seamless and easy manner.
Our platform enables clients to optimize campaigns with numerous highly relevant data sets, including from an extensive selection of third-party vendors, in a 7 Table of Contents seamless and easy manner.
To address the transfer of personal data from Europe to the United States, we rely upon, and are currently certified under, the EU-U.S. and Swiss-U.S. Data Privacy Frameworks (“DPF”) and the U.K. Extension to the EU-U.S. DPF.
To address the transfer of personal data from the EEA, Switzerland and U.K. to the United States, we rely upon, and are currently certified under, the EU-U.S. and Swiss-U.S. Data Privacy Frameworks (“DPF”) and the U.K. Extension to the EU-U.S. DPF.
The European Commission adopted an adequacy decision for the DPF in July 2023, replacing the prior Privacy Shield Framework, as an adequate mechanism by which EU companies may pass personal data to the U.S. However, the DPF is already subject to legal challenge in Europe.
The European Commission adopted an adequacy decision for the DPF in July 2023, replacing the prior Privacy Shield Framework, as an adequate mechanism by which EU companies may pass personal data to the United States However, the DPF is already subject to legal challenge in Europe.
Our platform allows clients to execute integrated campaigns across ad formats and channels, including video (which includes connected television (“CTV”)), display, audio, digital-out-of-home, native and social, on a multitude of devices, such as computers, mobile devices, televisions and streaming devices.
Our platform allows clients to execute integrated campaigns across ad formats and channels, including connected television (“CTV”) and other video, display, audio, and native, on a multitude of devices, such as televisions, streaming devices, mobile devices, computers and digital-out-of-home devices.
Many states have adopted omnibus consumer privacy laws, some of which are already enforceable, while others will take effect over the coming years. Other states are considering similar legislation.
Many states have adopted omnibus consumer privacy laws, a number of which are already enforceable, while others will take effect over the coming years. Other states are considering similar legislation.
Our platform’s integration of these sources and services enables our clients to deploy their budgets through a wide variety of channels, media screens and formats, targeted in their desired manner, all through a single platform. Some of the key features of our platform are: • Auto Optimization.
Our platform’s integration of these sources and services enables our clients to deploy their budgets through a wide variety of channels, device types and formats, targeted in their desired manner, all through a single platform. Some of the key features of our platform are: • Auto Optimization.
We rely on intellectual property laws, including trade secret, copyright, patent and trademark laws in the U.S. and abroad, and use contracts, confidentiality procedures, non-disclosure agreements, employee disclosure and invention assignment agreements and other contractual rights to protect our intellectual property.
We rely on intellectual property laws, including trade secret, copyright, patent and trademark laws in the United States and abroad, and use contracts, confidentiality procedures, non-disclosure agreements, employee disclosure and invention assignment agreements and other contractual rights to protect our intellectual property.
We obtain digital advertising inventory from over 140 directly integrated ad exchanges, publishers and supply-side platforms, providing us with access to a breadth of programmatic advertising inventory across computers, mobile devices and CTV. We believe that our data marketplace represents an important distribution channel for third-party data vendors.
We obtain digital advertising inventory from over 220 directly integrated ad exchanges, publishers and supply-side platforms, providing us with access to a breadth of programmatic advertising inventory across televisions, streaming devices, mobile devices, computers and digital-out-of-home devices. We believe that our data marketplace represents an important distribution channel for third-party data vendors.
We believe these capabilities will continue to further strengthen our relationships with our clients. We intend to continue investing in innovation across all channels, including the integration of new inventory sources within CTV, other video, audio, mobile, social, native and digital-out-of-home. • Extend Our Reach in CTV.
We believe these capabilities will continue to further strengthen our relationships with our clients. We intend to continue investing in innovation across all channels, including the integration of new inventory sources within CTV and other video, display, audio and native. • Extend Our Reach in CTV.
In particular, we believe that the United Kingdom, Germany, France, China, Japan, India and Australia may represent substantial growth opportunities, and we are investing in developing our business in those and other markets. Our Clients Our clients consist of purchasers of programmatic advertising inventory and data.
In particular, we believe that the United Kingdom (“U.K.”), Germany, France, China, Japan, India and Australia may represent substantial growth opportunities, and we are investing in developing our business in those and other markets. Our Clients Our clients consist of purchasers of programmatic advertising inventory, value-added services and data.
The breadth of data that we make available on our data marketplace from numerous data sources across channels gives our clients a holistic view of their target audiences, enabling more effective targeting across different channels. • We Do Not Arbitrage Advertising Inventory.
The breadth of data that we make available on our data marketplace from numerous data sources across channels gives our clients a holistic view of their target audiences, enabling more effective targeting across different channels.
In such circumstance, continuing to transfer personal data from the EU to the U.S. could lead to governmental enforcement actions, litigation, fines and penalties or adverse publicity.
In such circumstance, continuing to transfer personal data from the EU to the United States could lead to governmental enforcement actions, litigation, fines and penalties or adverse publicity.
To ensure we live our values and our culture stays unique and strong, our board of directors and executive team has put significant focus on our human capital resources. As of December 31, 2023, we had 3,115 full-time employees in 19 countries.
To ensure we live our values and our culture stays unique and strong, our board of directors and executive team has put significant focus on our human capital resources. As of December 31, 2024, we had 3,522 full-time employees in 20 countries.
Television is the largest category of advertising spend, and we believe that the future of television is CTV, the streaming of media and video on demand through subscription and ad-supported streaming services. We plan to continue investing significant resources in technology, sales and support staff related to our CTV growth initiatives. • Continue to Innovate in Technology, Data and Measurement.
Television is the largest category of advertising spend, and we believe that the future of television is CTV, the streaming of media and video on demand through subscription and ad-supported streaming services. We plan to continue investing significant resources in technology, sales and support staff related to our CTV growth initiatives. • Ensure Access to Quality Inventory.
Our platform is transparent and shows our clients their costs of advertising inventory and data, our platform fee and detailed performance metrics on their advertising campaigns. Our clients directly access and execute campaigns on our platform and control all facets of inventory purchasing decisions. Clients also receive detailed, real-time reporting on all their advertising campaigns.
Our platform is transparent and shows our clients their spend on advertising inventory, value-added services and data; the platform fee; and detailed performance metrics on their advertising campaigns. Our clients directly access and execute campaigns on our platform and control all facets of inventory purchasing decisions. Clients also receive detailed, real-time reporting on all their advertising campaigns.
Whether and how other European mechanisms for adequate data transfer, such as the latest standard contractual clauses, can be used to transfer personal data to the U.S. remains in question.
Whether and how other European mechanisms for adequate data transfer, such as standard contractual clauses, can be used to transfer personal data to the United States remains in question.
Available Information We file Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, proxy statements and related amendments, exhibits and other information with the Securities and Exchange Commission (the “SEC”).
Available Information We file Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, proxy statements and related amendments, exhibits and other information with the SEC.
We expect technology and development expense to increase as we continue to invest in the development of our platform and related offerings to support additional features and functions, increase the number of advertising and data 10 Table of Contents inventory suppliers and support anticipated increases in volume of advertising spending by our clients on our platform.
We expect technology and development expense to increase as we continue to invest in the development of our platform and related offerings to support additional platform features and functionality, increase the number of advertising inventory and data suppliers and support anticipated increases in volume of advertising spend by our clients on our platform.
In the United Kingdom (“U.K”) and the European Union (the “EU”) (including the European Economic Area (the “EEA”) and the countries of Iceland, Liechtenstein and Norway), separate laws and regulations (and member states’ implementations thereof) govern the processing of personal data, and these laws and regulations continue to impact us.
In Europe, including the U.K. and the European Union (the “EU”) and the European Economic Area (the “EEA”) and the countries of Iceland, Liechtenstein and Norway, separate laws and regulations (and member states’ implementations thereof) govern the processing of personal data, and these laws and regulations continue to impact us.
We have extensive relationships with many advertising agencies and other service providers, and we believe that, given the decentralized nature of the advertising industry, we have the opportunity to expand our relationships within these agencies and with additional agencies, advertisers and service providers.
We have extensive relationships with many advertising agencies, advertisers and other service providers, and we believe that, given the decentralized nature of the advertising industry, we have the opportunity to expand our relationships with new and existing clients.
Although the TCF is actively in use, its viability as a compliance mechanism is under review by the Belgian Data Protection Authority and others and we cannot predict its effectiveness over the long term (as further detailed in the Risk Factors section).
Although the TCF is actively in use, its viability as a compliance mechanism is under review by the European authorities and we cannot predict its effectiveness over the long term (as further detailed in the Risk Factors section).
Our patent applications may not result in the issuance of any patents, and our issued patents may not actually provide adequate defensive protection or competitive advantages to us. 12 Table of Contents Collection and Use of Data; Privacy and Data Protection Legislation and Regulation To power our platform, we and our clients currently use pseudonymous data about Internet and mobile app users to manage and execute digital advertising campaigns in a variety of ways, including delivering advertisements to end users based on information such as their geographic locations, the type of device they are using, their interests as inferred from their web browsing or app usage activity or their relationships with our clients.
Collection and Use of Data; Privacy and Data Protection Legislation and Regulation To power our platform, we and our clients currently use pseudonymous data about Internet and mobile app users to manage and execute digital advertising campaigns in a variety of ways, including delivering advertisements to end users based on information such as their geographic locations, the type of device they are using, their interests as inferred from their web browsing or app usage activity or their relationships with our clients.
As of December 31, 2023, our global leadership team is 64% male and 36% female. Talent Development Despite our rapid growth, we still cherish our roots as a startup and our company culture of ownership.
As of December 31, 2024, our global leadership team is 68% male and 32% female. 11 Table of Contents Talent Development Despite our rapid growth, we still cherish our roots as a startup and our company culture of ownership.
While data from third-party data providers improves campaign performance, our clients’ success often relies largely on our ability to ingest proprietary data directly from advertisers and agencies to enable intelligent decisioning that optimizes advertising campaigns.
We built a data-management platform first, before building our ad-buying technology. While data from third-party data providers improves campaign performance, our clients’ success often relies largely on our ability to ingest proprietary data directly from advertisers and agencies to enable intelligent decisioning that optimizes advertising campaigns.
Such data is passed to us from third parties, including original equipment manufacturers, application providers and publishers. We do not use this data to discover the identity of individuals, and we currently contractually prohibit clients, data providers and inventory suppliers from importing data that directly identifies individuals onto our ad buying platform.
We do not use this data to discover the identity of individuals, and we currently contractually prohibit clients, data providers and inventory suppliers from importing data that directly identifies individuals onto our ad buying platform.
We also take in email addresses and phone numbers to operationalize the opt-out portal we offer in connection with Unified ID 2.0 and EUID.
We also take in email addresses and phone numbers to operationalize the opt-out portal we offer in connection with Unified ID 2.0 and EUID, as well as in connection with a single-sign on tool we offer to publishers, known as OpenPass.
Team members are encouraged to come to their managers with questions, feedback or concerns, and we conduct various internal surveys that gauge employee sentiment in areas like career development, culture, manager performance and inclusivity.
Team members are encouraged to come to their managers with questions, feedback or concerns, and we conduct various internal surveys that gauge employee sentiment in areas like career development, culture, manager performance and inclusivity. Our leaders review the survey feedback, if applicable, and other concerns raised by team members and work with their teams to take action.
We believe that this increased demand for CTV will bring about new opportunities for content owners and advertisers to connect with consumers, including through ad-supported subscription models, and will further drive the shift towards data-driven advertising. Increased Use of Data and Measurement.
New technologies support seamless delivery of streaming video content, accelerating consumers’ demand to watch what they want, when they want and where they want. We believe that this increased demand for CTV will bring about new opportunities for content owners and advertisers to connect with consumers, including through ad-supported subscription models, and will further drive the shift towards data-driven advertising.
Financial Statements and Supplementary Data ” in this Annual Report on Form 10-K. Intellectual Property The protection of our technology and intellectual property is an important component of our success.
Information about our geographic gross billings is set forth in Note 12—Segment and Geographic Information of “ Item 8. Financial Statements and Supplementary Data ” in this Annual Report on Form 10-K. Intellectual Property The protection of our technology and intellectual property is an important component of our success.
We generate revenue by charging our clients a platform fee based on a percentage of a client’s total spend on advertising. We also generate revenue from providing data and other value-added services and platform features. The Trade Desk is a Delaware corporation established in 2009 and headquartered in Ventura, California.
We generate revenue by charging our clients a platform fee generally based on a percentage of our clients’ total platform spend and from providing value-added services and data to support their advertising campaigns. The Trade Desk was originally incorporated in 2009 and is a Nevada corporation. We are headquartered in Ventura, California.
As of December 31, 2023, we had over 1,100 clients, consisting primarily of advertising agencies or groups within advertising agencies that have independent relationships with us, manage budgets independently of one another, are based in different jurisdictions and 9 Table of Contents are served by unique Trade Desk teams.
Our clients are advertising agencies, advertisers or groups within advertising agencies that have independent relationships with us, manage budgets independently of one another, are based in different jurisdictions and are served by unique Trade Desk teams.
The General Data 13 Table of Contents Protection Regulation (“EU GDPR”) and the U.K.’s version of the GDPR (the “UK GDPR”) (the EU GDPR and UK GDPR are hereinafter referred to as the GDPR), which apply to us, define “personal data” broadly.
The General Data Protection Regulation (“EU GDPR”) and the United Kingdom General Data Protection Regulation and Data Protection Act 2018 (the “UK GDPR”) (the EU GDPR and UK GDPR are hereinafter referred to collectively as the GDPR), which apply to us, define “personal data” broadly.
Because the amount, quality and cost of inventory available to us can change at any time, we intend to continue making investments to maintain and grow our available inventory. • Expand Our International Presence.
Because the amount, quality and cost of inventory available to us can change at any time, we intend to continue making investments to maintain and grow our available inventory and ensure its quality. • Further Enhance Identity Solutions, Including Unified ID 2.0.
Our leaders review the survey feedback and work with their teams to take action based on survey results. 11 Table of Contents We demonstrate this commitment through a strategy of education, celebration, donations to the community, diversification of our talent and the creation of forums for internal dialogue and listening.
We demonstrate this commitment through a strategy of education, celebration, donations to the community, diversification of our talent and the creation of forums for internal dialogue and listening.
This focus allows us to build trust with clients, many of whom leverage their proprietary data on our platform. That trust and ability to use their own data on our platform, without worrying about it being used by other participants, enables our clients and their advertisers to achieve better results.
That trust and ability to use their own data on our platform, without worrying about it being used by other participants, enables our clients and their advertisers to achieve better results. This trust provides us with the benefit of long-term and stable relationships with our clients. • We Are an Enabler, Not a Disruptor.
We have a small number of patents; however, historically, we have not patented our proprietary technology in order to keep our technology architecture, trade secrets and engineering roadmap private.
We have a small number of patents; however, historically, we have not patented our proprietary technology in order to keep our technology architecture, trade secrets and engineering roadmap private. Our patent applications may not result in the issuance of any patents, and our issued patents may not actually provide adequate defensive protection or competitive advantages to us.
Many of these advertising agencies are owned by holding companies, where decision making is decentralized such that purchasing decisions are made, and relationships with advertisers are located, at the agency, local branch or division level. Our client count includes only those parties that have signed MSAs with us and have spent more than $20,000 on our platform.
Many of these advertising agencies are owned by holding companies, where decision making is decentralized such 9 Table of Contents that purchasing decisions are made, and relationships with advertisers are located, at the agency, local branch or division level. Our clients typically enter into MSAs with us that give users constant access to our platform.
Advertisers are able to use our platform directly or through their agencies of choice. • We Are Data Driven. Our platform was founded on the principle that data-driven decisions will be the future of advertising. We built a data-management platform first, before building our ad-buying technology.
Through our platform and related offerings, we enable advertisers, agencies and other service providers that participate in the digital advertising ecosystem. Advertisers are able to use our platform directly or through their agencies of choice. • We Are Data Driven. Our platform was founded on the principle that data-driven decisions will be the future of advertising.
Together with related laws, such as the ePrivacy Directive, we and our clients and inventory partners face enhanced data protection obligations, both as controllers of such data and as service providers processing the data. These laws also provide certain rights, such as access and deletion, to the individuals about whom the personal data relates, and require consent for certain activities.
Together with related laws, such as the ePrivacy Directive, we and our clients and inventory partners face enhanced data protection obligations, both as controllers of such data and as service providers processing the 13 Table of Contents data.
We believe that the global opportunity for programmatic advertising is significant and will continue to expand as publishers and advertisers outside the U.S. seek to adopt the benefits that programmatic advertising provides. To capitalize on this opportunity, we intend to continue investing in our presence internationally.
Development of International Markets We have been increasing our focus on markets outside the United States to serve the global needs of our clients. We believe that the global opportunity for programmatic advertising is significant and will continue to expand as publishers and advertisers outside the United States seek to adopt the benefits that programmatic advertising provides.
Our continued success depends on our ability to secure increasing amounts of attractive, high-quality inventory on reasonable terms for our clients. As part of such efforts, we have developed OpenPath, our offering intended to give clients access to quality inventory through a simplified, direct connection to publishers.
Our continued success depends on our ability to secure increasing amounts of attractive, high-quality inventory on reasonable terms for our clients.
Unified ID 2.0 operates by transforming email addresses or phone numbers into an advertising identifier (a “UID2”) that is designed to not directly identify the individual. Subject to appropriate guardrails, participants in Unified ID 2.0 can then use this UID2 in connection with our platform and other services, including ad buying and reporting.
We continue to develop and enhance Unified ID 2.0, an open-source identity framework that operates by transforming email addresses or phone numbers into an advertising identifier (a “UID2”) that is designed to not directly identify the individual.
Our growth and the success of our initiatives in newer markets will depend on the continued adoption of our platform by our existing clients, as well as new clients, in these markets. Information about our geographic gross billings is set forth in Note 12—Segment and Geographic Information of “ Item 8.
To capitalize on this opportunity, we intend to continue investing in our presence internationally. Our growth and the success of our initiatives in newer markets will depend on the continued adoption of our platform by our existing clients, as well as new clients, in these markets.
We intend to continue innovating and improving the technology underlying our platform and enhancing its features and functionalities. We view data and measurement as key competitive advantages and we will continue to invest resources in growing our data and measurement offerings. • Further Enhance Identity Solutions, Including Unified ID 2.0.
We view data and measurement as key competitive advantages, and we will continue to invest resources in growing and enhancing our data and measurement offerings. • Expand Our International Presence.
Our clients typically enter into MSAs with us that give users constant access to our platform. The MSAs do not contain any material commitments on behalf of clients to use our platform to purchase ad inventory, data or other features.
Our MSAs, some of which may include joint business plans and other incentive programs, do not contain any material commitments on behalf of clients to use our platform to purchase ad inventory, value-added services or data.
In response to the COVID-19 pandemic, we implemented significant changes, such as implementing a hybrid work model that includes both in-person work and working from home, which we determined were in the best interests of our employees, as well as the communities in which we operate, and which comply with applicable government regulations.
We utilize a hybrid work model that includes both in-person work and working from home, which we determined was in the best interests of our employees. We continue to evolve our programs to meet our employees’ health and wellness needs.
Removed
New technologies, including 5G internet, support seamless delivery of streaming video content, accelerating consumers’ demand to watch what they want, when they want and where they want.
Added
We provide and are developing additional offerings and features that work with publishers and supply-side partners to help ensure access to quality advertising inventory and to enable improved evaluation of such inventory and better decisioning capabilities for buyers of advertising. This focus allows us to build trust with clients, many of whom leverage their proprietary data on our platform.
Removed
This trust provides us with the benefit of long-term and stable relationships with our clients. • We Are an Enabler, Not a Disruptor. Through our platform and related offerings, we enable advertisers, agencies and other service providers that participate in the digital advertising ecosystem.
Added
Finally, the depth of data we make available, such as various types of retail data, including in-store purchase data, gives our clients the ability to engage in more precise attribution and closed-loop measurement. • We Do Not Arbitrage Advertising Inventory.
Removed
We continue to develop and enhance Unified ID 2.0, a new open-source identity framework, which is currently in use with approved partners. Unified ID 2.0 aims to preserve the value of relevant advertising on the open internet without reliance upon third-party cookies, while giving consumers transparency and control over their data.
Added
As part of such efforts, we have developed and plan to continue to enhance OpenPath, our offering intended to give clients access to quality inventory through a simplified, direct connection to publishers, and we may develop additional features or offerings to help our clients evaluate the quality and cost of inventory.
Removed
We continue to evolve our programs to meet our employees’ health and wellness needs. Development of International Markets We have been increasing our focus on markets outside the U.S. to serve the global needs of our clients.
Added
EUID, a European-focused version of Unified ID 2.0, was released in a limited beta in 2023. • Continue to Innovate in Technology, Data and Measurement. We intend to continue innovating and improving the technology underlying our platform and enhancing its features and functionalities, including the development of new or improved value-added services or the inclusion of additional data.
Added
Such data is passed to us from third parties, 12 Table of Contents including original equipment manufacturers, application providers, data providers and publishers, as well as our advertiser clients.
Added
These laws also provide certain rights, such as access and deletion, to the individuals about whom the personal data relates, and require consent for certain activities.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

139 edited+14 added−75 removed199 unchanged
Biggest changeOur failure to prevent outages or security breaches resulting from API use could result in government enforcement actions against us, claims for damages by consumers and other affected individuals, costs associated with investigation and remediation damage to our reputation and loss of goodwill, any of which could harm our business, financial condition and results of operations. 18 Table of Contents We may experience outages, disruptions and malfunctions on our platform and related offerings if we fail to maintain adequate security and supporting infrastructure and processes, which may harm our reputation and negatively impact our business, financial condition and results of operations.
Biggest changeWe may experience outages, disruptions and malfunctions on our platform and related offerings if we fail to maintain adequate security and supporting infrastructure and processes, which may harm our reputation and negatively impact our business, financial condition and results of operations.
However, it is possible that we may reach a point of saturation at which we cannot continue to grow our revenue from such agencies because of internal limits that advertisers may place on the allocation of their advertising budgets to digital media to a particular provider or otherwise.
However, it is possible that we may reach a point of saturation at which we cannot continue to grow our revenue from such agencies or advertisers because of internal limits that advertisers may place on the allocation of their advertising budgets to digital media to a particular provider or otherwise.
Misuse, vulnerabilities, outages and disruptions of our platform and related offerings, including due to cyberattacks, may require engagement with regulators or lead to legal actions, harm our reputation and negatively impact our business, financial condition and results of operations.
Misuse, vulnerabilities, outages and disruptions of our platform and related offerings, including due to cyberattacks, may require engagement with regulators or lead to legal actions, and may harm our reputation and negatively impact our business, financial condition and results of operations.
These laws generally require covered businesses to meet numerous data privacy-related obligations and establish data privacy rights for consumers in such states (including rights to opt out of certain processing of their personal data and to request correction and deletion of and access to personal data), imposing special rules on the collection of personal data from minors and other personal data deemed “sensitive” under the laws, and creating new notice obligations.
These laws generally require covered businesses to meet numerous data privacy-related obligations and establish data privacy rights for consumers in such states (including rights to opt out of certain processing of their personal data and to request correction, deletion of and access to personal data), imposing special rules on the collection of personal data from minors and other personal data deemed “sensitive” under the laws, and creating new notice obligations.
We deploy technical and organizational measures, internal policy controls, and contractual measures to limit how such identifying information is used and shared and to help honor consumer choices. Nevertheless, we cannot guarantee any such measures or controls will be effective and handling identifying information increases our exposure under privacy and data protection laws.
We deploy technical and organizational measures, internal policy controls, and contractual measures to limit how identifying information is used and shared and to help honor consumer choices. Nevertheless, we cannot guarantee any such measures or controls will be effective and handling identifying information increases our exposure under privacy and data protection laws.
Devices are identified through unique identifiers stored in cookies (and similar technologies), provided by device operating systems for advertising purposes, or generated based on statistical algorithms applied to information about a device, such as the IP address and device type.
Devices are identified through unique identifiers stored in cookies (and similar technologies), provided by device operating systems for advertising purposes, or are generated based on statistical algorithms applied to information about a device, such as the IP address and device type.
Our international operations and expansion subject us to a variety of additional risks, including: • risks related to local advertising markets, where adoption of programmatic ad buying may be slower than in the United States, advertising buyers and inventory and data providers may be less familiar with demand-side platforms and our brand, and business models may not support our value proposition; • exposure to public health issues and to travel restrictions and other measures undertaken by governments in response to such issues; 30 Table of Contents • risks related to compliance with local laws and regulations, including those relating to privacy, cybersecurity, data security, antitrust, data localization, anti-bribery, import and export controls, economic sanctions (including to existing and potential partners and clients), tax and withholding (including overlapping of different tax regimes), and varied labor and employment laws (including those relating to termination of employees); corporate formation, partnership, restrictions on foreign ownership or investment and other regulatory limitations or obligations on our operations (such as obtaining requisite licenses or other governmental requirements); and the increased administrative costs and risks associated with such compliance; • operational and execution risk, and other challenges caused by distance, language and cultural differences, which may burden management, increase travel, infrastructure and legal compliance costs, and add complexity to our enforcement of advertising standards across languages and countries; • geopolitical and social factors, such as concerns regarding negative, unstable or changing economic conditions in the countries and regions where we operate, recessions, armed conflicts and wars, political instability and trade disputes; • risks related to pricing structure, payment and currency, including aligning our pricing model and payment terms with local norms, higher levels of credit risk and payment fraud, difficulties in invoicing and collecting in foreign currencies and associated foreign currency exposure, and difficulties in repatriating or transferring funds from or converting currencies; and • reduced protection for intellectual property rights in some countries and practical difficulties in enforcing contractual and intellectual property rights abroad.
Our international operations and expansion subject us to a variety of additional risks, including: • risks related to local advertising markets, where adoption of programmatic ad buying may be slower than in the United States, advertising buyers and inventory and data providers may be less familiar with demand-side platforms and our brand, and business models may not support our value proposition; • exposure to public health issues and to travel restrictions and other measures undertaken by governments in response to such issues; • risks related to compliance with local laws and regulations, including those relating to privacy, cybersecurity, data security, antitrust, data localization, anti-bribery, import and export controls, economic sanctions (including to existing and potential partners and clients), tax and withholding (including overlapping of different tax regimes), and varied labor and employment laws (including those relating to termination of employees); corporate formation, partnership, restrictions on foreign ownership or investment and other regulatory limitations or obligations on our operations (such as obtaining requisite licenses or other governmental requirements); and the increased administrative costs and risks associated with such compliance; • operational and execution risk, and other challenges caused by distance, language and cultural differences, which may burden management, increase travel, infrastructure and legal compliance costs, and add complexity to our enforcement of advertising standards across languages and countries; 30 Table of Contents • geopolitical and social factors, such as concerns regarding negative, unstable or changing economic conditions in the countries and regions where we operate, recessions, armed conflicts and wars, political instability and trade disputes; • risks related to pricing structure, payment and currency, including aligning our pricing model and payment terms with local norms, higher levels of credit risk and payment fraud, difficulties in invoicing and collecting in foreign currencies and associated foreign currency exposure, and difficulties in repatriating or transferring funds from or converting currencies; and • reduced protection for intellectual property rights in some countries and practical difficulties in enforcing contractual and intellectual property rights abroad.
Although we have attempted to mitigate certain risks posed by these laws through contractual and platform changes, we cannot predict with certainty the effect of these laws and their implementing regulations, many of which are not yet finalized, on our business, nor the share of consumers who will carry out their opt-out and other rights and how these actions will impact us, our clients, inventory sources, and our industry.
Although we have attempted to mitigate certain risks posed by these laws through contractual, platform and offering changes, we cannot predict with certainty the effect of these laws and their implementing regulations, many of which are not yet finalized, on our business, nor the share of consumers who will carry out their opt-out and other rights and how these actions will impact us, our clients, inventory sources, and our industry.
Our services and the data on our platform, related offerings and in our systems could be exposed to unauthorized access due to activities that breach or undermine security measures, including: negligence or malfeasance by internal or external actors; attempts by outside parties to fraudulently induce employees, clients or vendors to disclose information or data, including personal information; or errors or vulnerabilities in our systems, products or processes or in those of our service providers, clients, and vendors.
Our services and the data on our platform, related offerings and in our systems could be exposed to unauthorized access due to activities that breach or undermine security measures, including: negligence or malfeasance by internal or external actors; attempts by outside parties to fraudulently induce employees, clients or vendors to disclose information or data, including personal information; or errors or vulnerabilities in our systems, offerings or processes or in those of our service providers, clients, and vendors.
That is, if third parties on which we rely for data or opportunities to serve advertisements impose limitations (for whatever reason) or are restricted by other ecosystem participants or applicable regulations, we may lose the ability to access data, bid on opportunities, or purchase digital ad space, which could have a substantial impact on our revenue.
That is, if third parties on which we rely for data or opportunities to serve advertisements impose limitations (for whatever reason) or are restricted by other ecosystem participants or applicable regulations, then we may lose the ability to access data, bid on opportunities or purchase digital ad space, which could have a substantial impact on our revenue.
If the use of the GPC or similar technical signals is adopted by many Internet users, is imposed by additional states or by federal or foreign legislation or is agreed upon by standard setting groups, we may have to change our business practices, our clients may reduce their use of our platform and offerings, and our business could be harmed.
If the use of the GPC or similar technical signals is adopted by many Internet users, is imposed by additional states or by federal or foreign legislation or is agreed upon by standard setting groups, we may have to change our business practices, our clients may reduce their use of our platform and related offerings, and our business could be harmed.
We use device and other identifiers to help us achieve our advertisers’ campaign goals, including to limit the instances that an Internet user sees the same advertisement, report information to our advertisers regarding the performance of their advertising campaigns, and detect and prevent malicious behavior and invalid traffic throughout our network of inventory.
We also use device and other identifiers to help us achieve our advertisers’ campaign goals, including to limit the instances that an Internet user sees the same advertisement, report information to our advertisers regarding the performance of their advertising campaigns, and detect and prevent malicious behavior and invalid traffic throughout our network of inventory.
Furthermore, even if we believe that our investments improve upon our platform and offerings, such as updates to our various platform features and user interface, they may nevertheless fail to meet new or existing client expectations or preferences, which could result in decreased client adoption or use of our platform.
Furthermore, even if we believe that our investments improve upon our platform and related offerings, such as updates to our various platform features and user interface, they may nevertheless fail to meet new or existing client expectations or preferences, which could result in decreased client adoption or use of our platform.
The market price of our Class A common stock has fluctuated and may fluctuate significantly in response to numerous factors, some of which are beyond our control and may not be related to our operating performance, including: • announcements of new offerings, products, services or technologies, commercial relationships, acquisitions, or other events by us or our competitors; • price and volume fluctuations in the overall stock market from time to time; • significant volatility in the market price and trading volume of technology companies in general and of companies in the digital advertising industry in particular; • fluctuations in the trading volume of our shares or the size of our public float; • trading activity in our share repurchase program; • actual or anticipated changes or fluctuations in our results of operations; • whether our results of operations meet the expectations of securities analysts or investors; • actual or anticipated changes in the expectations of investors or securities analysts; • litigation involving us, our industry, or both; • regulatory developments in the United States, foreign countries, or both; • general economic conditions and trends; 34 Table of Contents • terrorist attacks, political upheaval, natural disasters, war, public health crises, or other major catastrophic events; • sales of large blocks of our common stock; • departures of key employees; or • an adverse impact on us from any of the other risks cited herein.
The market price of our Class A common stock has fluctuated and may fluctuate significantly in response to numerous factors, some of which are beyond our control and may not be related to our operating performance, including: • announcements of new offerings, products, services or technologies, commercial relationships, acquisitions, or other events by us or our competitors; • price and volume fluctuations in the overall stock market from time to time; • significant volatility in the market price and trading volume of technology companies in general and of companies in the digital advertising industry in particular; • fluctuations in the trading volume of our shares or the size of our public float; • trading activity in our share repurchase program; • actual or anticipated changes or fluctuations in our results of operations; • whether our results of operations meet the expectations of securities analysts or investors; • actual or anticipated changes in the expectations of investors or securities analysts; • litigation involving us, our industry, or both; • regulatory developments in the United States, foreign countries, or both; • general economic conditions and trends; • terrorist attacks, political upheaval, natural disasters, war, public health crises, or other major catastrophic events; • sales of large blocks of our common stock; • departures of key employees; or • an adverse impact on us from any of the other risks cited herein.
Further, enforcement activity under laws already in effect, particularly in California, reflects an ongoing focus on online advertising activities and signals regulators’ willingness to pursue in-depth investigations and impose substantial penalties on entities allegedly operating in violation of the statute.
Further, enforcement activity under such laws already in effect, particularly in California, reflects an ongoing focus on online advertising activities and signals regulators’ willingness to pursue in-depth investigations and impose substantial penalties on entities allegedly operating in violation of the statute.
If existing or new companies develop, market or resell competitive high-value products or services that result in additional competition for advertising spend or advertising inventory or if they acquire one of our existing competitors or form a strategic alliance with one of our competitors, our ability to compete effectively could be significantly compromised and our results of operations could be harmed. 16 Table of Contents Our current and potential competitors may have significantly more financial, technical, marketing, and other resources than we have, which may allow them to devote greater resources to the development, promotion, sale and support of their products and services.
If existing or new companies develop, market or resell competitive high-value products or services that result in additional competition for advertising spend or advertising inventory or if they acquire one of our existing competitors or form a strategic alliance with one of our competitors, our ability to compete effectively could be significantly compromised and our results of operations could be harmed. 17 Table of Contents Our current and potential competitors may have significantly more financial, technical, marketing, and other resources than we have, which may allow them to devote greater resources to the development, promotion, sale and support of their products and services.
Data residency and cross-border transfer restrictions also impact our operations. For the transfer of personal data from Europe to the U.S., we rely upon, and are certified under the EU-U.S. and Swiss-U.S. Data Privacy Frameworks (“DPF”) and the U.K. extension to the EU-US DPF.
Data residency and cross-border transfer restrictions also impact our operations. For the transfer of personal data from Europe to the U.S., we rely upon, and are certified under, the EU-U.S. and Swiss-U.S. Data Privacy Frameworks (“DPF”) and the U.K. extension to the EU-U.S. DPF.
For example, Apple has shifted to require user opt-in before permitting access to Apple’s unique identifier, or IDFA, and Google has announced that it will deprecate the mobile advertising identifier used on Android devices entirely.
For example, Apple has shifted to require user opt-in before permitting access to Apple’s unique identifier, or IDFA, and Google has announced that it will eventually deprecate the mobile advertising identifier used on Android devices entirely.
Our sales cycle for our platform and newer offerings, from initial contact to contract execution and implementation, can take significant time. Our sales efforts involve educating our clients about the use, technical capabilities and benefits of our platform and related offerings.
Our sales cycle for our platform and related offerings, from initial contact to contract execution and implementation, can take significant time. Our sales efforts involve educating our clients about the use, technical capabilities and benefits of our platform and related offerings.
We expect that spending on programmatic ad buying will continue to be our primary source of revenue for the foreseeable future and that our revenue growth will largely depend on increasing spend through our platform.
We expect that spend on programmatic ad buying will continue to be our primary source of revenue for the foreseeable future and that our revenue growth will largely depend on increasing spend through our platform.
We have spent significant effort in cultivating our relationships with advertising agencies, which has resulted in an increase in the budgets allocated to, and the amount of advertising purchased on, our platform.
We have spent significant effort in cultivating our relationships with advertising agencies and advertisers, which has resulted in an increase in the budgets allocated to, and the amount of advertising purchased on, our platform.
If we fail to innovate or make the right investment decisions in our offerings and platform, we may fail to attract and retain advertisers and advertising agencies and our revenue and results of operations may decline.
If we fail to innovate or make the right investment decisions in our platform and related offerings, we may fail to attract and retain advertisers and advertising agencies and our revenue and results of operations may decline.
While the recent adequacy decision for the DPF helps to reduce the legal uncertainty of cross-border transfers of personal data, the long-term validity of these transfer mechanisms remains uncertain.
While the adequacy decision for the DPF helps to reduce the legal uncertainty of cross-border transfers of personal data, the long-term validity of these transfer mechanisms remains uncertain.
Furthermore, if our channel mix changes due to a shift in client demand, such as clients shifting their spending more quickly or more extensively than expected to channels in which we have relatively less functionality, features, or inventory, then demand for our platform could decrease, and our business, financial condition, and results of operations could be adversely affected.
Furthermore, if our channel mix changes due to a shift in client demand, such as clients shifting their spend more quickly or more extensively than expected to channels in which we have relatively less functionality, features, or inventory, then demand for our platform could decrease, and our business, financial condition, and results of operations could be adversely affected.
Privacy and data protection laws to which we and our clients, inventory partners, and third-party data providers are subject may cause us to incur additional or unexpected costs, subject us to investigations or enforcement actions for alleged compliance failures, result in less demand for our products and services, or cause us to change our platform, related offerings or business model, which may have a material adverse effect on our business.
Privacy and data protection laws to which we and our clients, inventory partners, and third-party data providers are subject may cause us to incur additional or unexpected costs, subject us to investigations or enforcement actions for alleged compliance failures, result in less demand for our offerings, or cause us to change our platform, related offerings or business model, which may have a material adverse effect on our business.
Risks Related to Our Business and Industry If we fail to maintain and grow our client base and spend through our platform, our revenue and business may be negatively impacted.
Risks Related to Our Business and Industry If we fail to maintain and grow our client base and spend through our platform and related offerings, our revenue and business may be negatively impacted.
If we fail to adapt to our rapidly changing industry or to evolving client needs or expectations, or we provide new or updated products and services that exacerbate technological, security, legal or other challenges, the reputation of and demand for our platform or related offerings could decrease and our business, financial condition and operations may be adversely affected.
If we fail to adapt to our rapidly changing industry or to evolving client needs or expectations, or we provide new or updated offerings that exacerbate technological, security, legal or other challenges, the reputation of and demand for our platform or related offerings could decrease and our business, financial condition and operations may be adversely affected.
If so, in addition to the possibility of fines, lawsuits and other claims, we could be required to fundamentally change our business activities and practices or modify our products, which could have an adverse effect on our business. In addition, public perception regarding data protection and privacy are significant in the programmatic advertising buying industry.
If so, in addition to the possibility of fines, lawsuits and other claims, we could be required to fundamentally change our business activities and practices or modify our offerings, which could have an adverse effect on our business. In addition, public perception regarding data protection and privacy are significant in the programmatic advertising buying industry.
Although we have implemented work-from-home protocols and provide work-issued devices to employees, the actions of our employees while working from home may have a greater effect on the security of our systems, platform, related offerings and the data we process, including by increasing the risk of compromise to our systems, confidential information or data arising from employees’ combined personal and private use of devices, accessing our systems or data using wireless networks that we do not control or the ability to transmit or store company-controlled data outside of our secured network.
Although we have implemented work-from-home protocols and provide work-issued devices to employees, the actions of our employees while working from home may have a greater effect on the security of our systems, platform, related offerings and the data we process, including by increasing the risk of compromise to our systems, confidential 18 Table of Contents information or data arising from employees’ combined personal and private use of devices, accessing our systems or data using wireless networks that we do not control or the ability to transmit or store company-controlled data outside of our secured network.
(Terminology varies slightly among some of the state laws, tying the opt-out requirement to “targeted advertising,” “sales” or “sharing” of personal data.) Because of these obligations, the availability of data within our platform, our other offerings and the advertising ecosystem more broadly may decline, potentially making our platform and offerings less valuable to our clients.
(Terminology varies slightly among some of the state laws, tying the opt-out requirement to “targeted advertising,” “sales” or “sharing” of personal data.) Because of these obligations, the availability of data within our platform, our related offerings and the advertising ecosystem more broadly may decline, potentially making our platform and related offerings less valuable to our clients.
Although we believe our platform is well-positioned to adapt to such changes, particularly with our Unified ID 2.0 approach, the impact of such changes remains uncertain and could be more disruptive than we anticipate, including to the display advertising ecosystem in particular, where such changes could adversely impact our growth in that channel.
Although we believe our platform is well-positioned to adapt to such changes, particularly with our Unified ID 2.0 offering, the impact of such changes remains uncertain and could be more disruptive than we anticipate, including to the display advertising ecosystem in particular, where such changes could adversely impact our growth in that channel.
The Interactive Advertising Bureau and Digital Advertising Alliance have also developed frameworks that allow users to opt out of the “sale” or use of their personal data for targeted advertising purposes under state privacy laws in ways that stop or severely limit the ability to show targeted ads.
The Interactive Advertising Bureau and Digital Advertising Alliance have also developed frameworks that allow users to opt out of the “sale” or use of their personal data for targeted advertising purposes under U.S. state privacy laws in ways that stop or severely limit the ability to show targeted ads.
Third parties control our access to unique identifiers, and if the use of “third-party cookies” or other technology to uniquely identify devices or users is rejected by Internet users, restricted or otherwise subject to unfavorable regulation, blocked or limited by preference signals, technical changes on end users’ devices and web browsers, or our and our 23 Table of Contents clients’ ability to use data, including on our platform or related offerings is otherwise restricted, our performance may decline, and we may lose advertisers and revenue.
Third parties control our access to unique identifiers, and if the use of “third-party cookies” or other technology to uniquely identify devices or users is rejected by Internet users, restricted or otherwise subject to unfavorable regulation, blocked or limited by preference signals, technical changes on end users’ devices and web browsers, or our clients’ ability to use data, including on our platform or related offerings is otherwise restricted, our performance may decline, and we may lose advertisers and revenue.
Our historical revenue growth has lessened the impact of seasonality; however, seasonality could have a more significant impact on our revenue, cash flow and results of operations from period to period if our growth rate declines, if seasonal spending becomes more pronounced, or if seasonality otherwise differs from our expectations.
Our historical revenue growth has lessened the impact of seasonality; however, seasonality could have a more significant impact on our revenue, cash flow and results of operations from period to period if our growth rate declines, if seasonal spend becomes more pronounced, or if seasonality otherwise differs from our expectations.
Supporting our continued growth may require substantial financial and other resources to, among other things: • develop our platform and related offerings, including by investing in our engineering team, creating, acquiring or licensing new products or features, and improving the availability and security of our platform and related offerings; • continue to expand internationally by growing our sales force and client services team in an effort to increase our client base and spend through our platform, and by adding inventory and data from countries our clients are seeking; 26 Table of Contents • improve our technology infrastructure, including investing in internal technology development and acquiring outside technologies; • expand our platform’s reach in new and growing channels such as CTV, including expanding the supply of CTV inventory; • cover general and administrative expenses, including legal, accounting and other expenses necessary to support a larger organization; • cover sales and marketing expenses, including a significant expansion of our direct sales organization; • cover expenses relating to data collection and use and consumer privacy compliance, including additional infrastructure, product features, security, automation and personnel; and • explore strategic acquisitions.
Supporting our continued growth may require substantial financial and other resources to, among other things: • develop our platform and related offerings, including by investing in our engineering team, creating, acquiring or licensing new offerings or certain features, and improving the availability and security of our platform and related offerings; • continue to expand internationally by growing our sales force and client services team in an effort to increase our client base and spend through our platform, and by adding inventory and data from countries our clients are seeking; • improve our technology infrastructure, including investing in internal technology development and acquiring outside technologies; • expand our platform’s reach in new and growing channels such as CTV, including expanding the supply of CTV inventory; • cover general and administrative expenses, including legal, accounting and other expenses necessary to support a larger organization; • cover sales and marketing expenses, including a significant expansion of our direct sales organization; • cover expenses relating to data collection and use and consumer privacy compliance, including additional infrastructure, certain features, security, automation and personnel; and • explore strategic acquisitions.
We at times supplement our MSAs with joint business plans and other incentive programs designed to increase spending from existing clients; however, such increased spending may not materialize in the amounts we expect or at all.
We at times supplement our MSAs with joint business plans and other incentive programs designed to increase spend from existing clients; however, such increased spend may not materialize in the amounts we expect or at all.
We cannot assure you that our clients will continue to use our platform to the extent that we expect or at all, or that we will be able to replace, in a timely or effective manner, departing clients with new clients that generate comparable revenue.
We cannot assure you that our clients will continue to use our platform or related offerings to the extent that we expect or at all, or that we will be able to replace, in a timely or effective manner, departing clients with new clients that generate comparable revenue.
The covenants in our 31 Table of Contents credit facility may limit our ability to take actions and, in the event that we breach one or more covenants, our lenders may choose to declare an event of default and require that we immediately repay all amounts outstanding, terminate the commitment to extend further credit and foreclose on the collateral granted to them to collateralize such indebtedness, which includes our intellectual property.
The covenants in our credit facility may limit our ability to take actions and, in the event that we breach one or more covenants, our lenders may choose to declare an event of default and require that we immediately repay all amounts outstanding, terminate the commitment to extend further credit and foreclose on the collateral granted to them to collateralize such indebtedness, which includes our intellectual property.
You should consider carefully the risks and uncertainties described below, together with all of the other information contained in this Annual Report on Form 10-K, including the consolidated financial statements and the related notes and Management’s Discussion and Analysis of Financial Condition and Results of Operations, before making investment decisions related to our Class A common stock.
You should consider carefully the risks and uncertainties described below, together with all of the other information contained in this Annual Report on Form 10-K, 14 Table of Contents including the consolidated financial statements and the related notes and Management’s Discussion and Analysis of Financial Condition and Results of Operations, before making investment decisions related to our Class A common stock.
Any investigations, actions and/or sanctions could have a material negative impact on our business, financial condition and results of operations. 33 Table of Contents We are subject to governmental economic sanctions requirements and export and import controls that could impair our ability to compete in international markets or subject us to liability if we are not in compliance with applicable laws.
Any investigations, actions and/or sanctions could have a material negative impact on our business, financial condition and results of operations. We are subject to governmental economic sanctions requirements and export and import controls that could impair our ability to compete in international markets or subject us to liability if we are not in compliance with applicable laws.
Any such legal proceedings, regardless of outcome or merit, may divert management’s time and attention and may result in the incurrence of significant expense, including legal fees. For additional information regarding the pending legal proceeding , refer to Legal Proceedings.
Any such legal proceedings, regardless of outcome or merit, may divert management’s time and attention and may result in the incurrence of significant expense, including legal fees. For additional information regarding the pending legal proceedings , refer to “
Stock prices of many technology companies have fluctuated in a manner unrelated or disproportionate to the operating performance of those companies. The trading price of our Class A common stock might also decline in reaction to events that affect other companies in our industry even if these events do not directly affect us.
Stock prices of many technology companies have fluctuated in a manner unrelated or disproportionate to the operating performance of those companies. The trading price of our Class A common stock might also decline in reaction to events that affect other companies in our industry even if these events do not directly 34 Table of Contents affect us.
Furthermore, the inventory that we access through real-time advertising exchanges may be of low quality or misrepresented to us, despite attempts by us and our suppliers to prevent fraud and conduct quality assurance checks. 17 Table of Contents Inventory suppliers control the bidding process, rules and procedures for the inventory they supply.
Furthermore, the inventory that we access through real-time advertising exchanges may be of low quality or misrepresented to us, despite attempts by us and our suppliers to prevent fraud and conduct quality assurance checks. Inventory suppliers control the bidding process, rules and procedures for the inventory they supply.
We are also vulnerable to unintentional errors or malicious or improper actions by persons with authorized access to our systems that exceed the scope of their access rights, distribute data erroneously, or, unintentionally or intentionally, interfere with the intended operations and functioning of our platform and related offerings.
We are 25 Table of Contents also vulnerable to unintentional errors or malicious or improper actions by persons with authorized access to our systems that exceed the scope of their access rights, distribute data erroneously, or, unintentionally or intentionally, interfere with the intended operations and functioning of our platform and related offerings.
We face various and evolving cybersecurity risks that threaten the confidentiality, integrity and availability of our systems and the data that we process. Our products and services involve the storage and transmission of significant amounts of data from users, clients and inventory and data providers, a large volume of which is hosted by third-party service providers.
We face various and evolving cybersecurity risks that threaten the confidentiality, integrity and availability of our systems and the data that we process. Our offerings involve the storage and transmission of significant amounts of data from users, clients, and inventory and data providers, a large volume of which is hosted by third-party service providers.
Cyberattacks could also compromise our own trade secrets and other sensitive information and result in such information being disclosed to others and becoming less valuable, which could negatively affect our business.
Cyberattacks could also compromise our own trade secrets and other confidential information and result in such information being disclosed to others and becoming less valuable, which could negatively affect our business.
Additionally, the process of obtaining patent protection is expensive and time-consuming, and we may not be able to prosecute all necessary or desirable patent applications at a reasonable cost or in a timely manner. 32 Table of Contents Policing unauthorized use of our technology is difficult.
Additionally, the process of obtaining patent protection is expensive and time-consuming, and we may not be able to prosecute all necessary or desirable patent applications at a reasonable cost or in a timely manner. Policing unauthorized use of our technology is difficult.
This could result in government investigations, lawsuits (including class actions), enforcement actions and other legal and financial liability, and/or loss of confidence in the availability and security of our products and services, all of which could seriously harm our reputation and brand and impair our ability to attract and retain clients.
This could result in government investigations, lawsuits (including class actions), enforcement actions and other legal and financial liability, and/or loss of confidence in the availability and security of our offerings, all of which could seriously harm our reputation and brand and impair our ability to attract and retain clients.
Because additional state privacy laws require businesses to permit end users to opt out of processing 24 Table of Contents their personal data for purposes of targeted advertising, including, in some states through automated signals, we expect that more opt-out solutions will become available that may ultimately be used by end users, which may reduce our clients’ use of our platform and related offerings, and our business, financial condition, and results of operations could be adversely affected.
Because many state privacy laws require businesses to permit end users to opt out of processing their personal data for purposes of targeted advertising, including, in some states through automated signals, we expect that more opt-out solutions will become available that may ultimately be used by end users, which may reduce our clients’ use of our platform and related offerings, and our business, financial condition, and results of operations could be adversely affected.
Failure to manage our growth effectively could cause our business to suffer and have an adverse effect on our financial condition and results of operations. As our costs increase, we may not be able to generate sufficient revenue to sustain profitability.
Failure to manage our growth effectively could cause our business to suffer and have an adverse effect on our financial condition and results of operations. 27 Table of Contents As our costs increase, we may not be able to generate sufficient revenue to sustain profitability.
If we are unsuccessful in establishing or 29 Table of Contents maintaining our relationships with our third-party providers or otherwise need to replace them, internal resources may need to be diverted and our business, financial condition and results of operations could be harmed.
If we are unsuccessful in establishing or maintaining our relationships with our third-party providers or otherwise need to replace them, internal resources may need to be diverted and our business, financial condition and results of operations could be harmed.
Concerns about industry practices with regard to the collection, use, and disclosure of personal data, whether or not valid and whether driven by applicable laws and regulations, industry standards, client or inventory provider expectations, or the broader public, may harm our reputation, result in loss of goodwill, and inhibit use of our platform or related offerings by current and future clients.
Concerns about industry practices regarding the collection, use, and disclosure of personal data, whether or not valid and whether driven by applicable laws and regulations, industry standards, client or inventory provider expectations, or the broader public, may harm our reputation, result in loss of goodwill, and inhibit use of our platform or related offerings by current and future clients.
In the event that these third-party providers experience any interruption in operations or cease business for any reason, or if we are unable to agree on satisfactory terms for continued hosting relationships, we would be forced to enter into a relationship with other service providers or assume some hosting responsibilities ourselves.
In the event that these third-party providers experience any interruption in operations or cease business for any reason, or if we are unable to agree on satisfactory terms for continued hosting relationships, we would be forced to enter into a relationship with other service 29 Table of Contents providers or assume some hosting responsibilities ourselves.
There can be no assurance that we will be in compliance with U.S. export control or economic sanctions laws and regulations in the future. Any such violation could result in significant criminal or civil fines, penalties or other sanctions and repercussions, including reputational harm that could materially adversely impact our business.
There can be no assurance that we will be in compliance with U.S. export control or economic sanctions laws and regulations in the future. Any such violation could 33 Table of Contents result in significant criminal or civil fines, penalties or other sanctions and repercussions, including reputational harm that could materially adversely impact our business.
Consequently, our reputation depends in part on providing services that our advertisers and inventory suppliers trust, and we have contractual obligations to meet content and inventory standards. We contractually prohibit the misuse of our platform by our clients and inventory suppliers.
Consequently, our reputation depends in part on providing services 26 Table of Contents that our advertisers and inventory suppliers trust, and we have contractual obligations to meet content and inventory standards. We contractually prohibit the misuse of our platform by our clients and inventory suppliers.
Factors that may cause our results of operations to fluctuate include the following: • changes in demand for programmatic advertising and for our platform, including related to the seasonal nature of our clients’ spending on digital advertising campaigns; • changes to availability of and pricing of competitive products and services, and their effects on our pricing; • changes in the pricing or availability of data and other third-party services, including pricing structure changes and the alignment of our pricing model with our data partners; • changes in our client base and platform or related offerings; • the addition or loss of advertising agencies and advertisers as clients; • changes in advertising budget allocations, agency affiliations or marketing strategies; • changes to our product, media, client or channel mix; • changes and uncertainty in the regulatory environment for us, advertisers, inventory providers, or others in the advertising industry, and the effects of our efforts and those of our clients and partners to address changes and uncertainty in the regulatory environment; 28 Table of Contents • changes in the economic prospects of advertisers or the economy generally, which could alter advertisers’ budgets or spending priorities, or could increase the time or costs required to complete advertising inventory sales; • changes in the pricing and availability of advertising inventory, including through real-time advertising exchanges or in the cost of reaching end consumers through digital advertising; • disruptions, outages, vulnerabilities or technological issues uncovered on our platform or related offerings; • factors beyond our control, such as natural disasters, terrorism, war and public health crises; • the introduction of new technologies or offerings by our competitors or others in the advertising marketplace; • changes in our capital expenditures as we acquire the hardware, equipment and other assets required to support our business; • timing differences between our payments for advertising inventory and our collection of related advertising revenue; • the length and unpredictability of our sales cycle; • costs related to acquisitions of businesses or technologies and development of new products; • cost of employee recruiting and retention; and • changes to the cost of infrastructure, including real estate and information technology.
Factors that may cause our results of operations to fluctuate include the following: • changes in demand for programmatic advertising and for our platform, including those related to the seasonal nature of our clients’ spend on digital advertising campaigns; • changes to availability of and pricing of competitive products and services, and their effects on our pricing; • changes in the pricing, cost or availability of supplier-provided components of value-added services and data, including pricing structure changes and the alignment of our pricing model with our data partners; • changes in our platform or related offerings, their features, and the mix of offerings that are adopted by our clients; • the addition or loss of advertising agencies and advertisers as clients and other changes in our client base; • changes in advertising budget allocations, agency affiliations or marketing strategies; • changes to our media, client or channel mix; • changes and uncertainty in the regulatory environment for us, advertisers, inventory providers, or others in the advertising industry, and the effects of our efforts and those of our clients and partners to address changes and uncertainty in the regulatory environment; • changes in the economic prospects of advertisers or the economy generally, which could alter advertisers’ budgets or spend priorities, or could increase the time or costs required to complete advertising inventory sales; • changes in the pricing and availability of advertising inventory, including through real-time advertising exchanges or in the cost of reaching end consumers through digital advertising; • disruptions, outages, vulnerabilities or technological issues uncovered on our platform or related offerings; • factors beyond our control, such as natural disasters, terrorism, war and public health crises; • the introduction of new technologies or offerings by our competitors or others in the advertising marketplace; • changes in our capital expenditures as we acquire the hardware, equipment and other assets required to support our business; • timing differences between our payments for advertising inventory and our collection of related advertising revenue; • the length and unpredictability of our sales cycle; • costs related to acquisitions of businesses or technologies and development of new offerings; 24 Table of Contents • cost of employee recruiting and retention; and • changes to the cost of infrastructure, including real estate and information technology.
Many marketers have decreased or paused their advertising spending as a response to the economic uncertainty, decline in business activity and other COVID-19-related impacts, which have negatively impacted, and with respect to the COVID-19 pandemic or other future health epidemics, may continue to negatively impact, our revenue and results of operations, the extent and duration of which we may not be able to accurately predict.
Many marketers decreased or paused their advertising spend as a response to the economic uncertainty, decline in business activity and other COVID-19-related impacts, which negatively impacted, and with respect to other future health epidemics, may negatively impact, our revenue and results of operations, the extent and duration of which we may not be able to accurately predict.
In addition, as we develop and introduce new products and services, including those incorporating or utilizing artificial intelligence and machine learning and new processing of personal information, including identifiable information, they may raise new, or heighten existing, technological, security, legal and other risks and challenges, that may cause unintended consequences and may not function properly or may be misused by our clients.
In addition, as we develop and introduce new offerings, including those incorporating or utilizing artificial intelligence and machine learning and new processing of personal information, including identifiable information, they may raise new, or heighten existing, technological, security, legal and other risks and challenges, which may cause unintended consequences, and they may not function properly or may be misused by our clients.
Any decrease in the use of mobile, display and video advertising, whether due to clients losing confidence in the value or effectiveness of such channels, regulatory restrictions, consumer choices, or other causes, or any inability to further penetrate social, native, audio or CTV, or enter new and emerging advertising channels, could harm our growth prospects, financial condition and results of operations.
Any decrease in the use of video, mobile and display advertising, whether due to clients losing confidence in the value or effectiveness of such channels, regulatory restrictions, consumer choices, or other causes, or any inability to further penetrate certain channels including CTV, or enter new and emerging advertising channels, could harm our growth prospects, financial condition and results of operations.
If a major client representing a significant portion of our business decides to materially reduce its use of our platform or to cease using our platform altogether, it is possible that our revenue or revenue growth rate could be significantly reduced, and our business negatively impacted.
If a major client representing a significant portion of our business decides to materially reduce its use of our platform or related offerings or to cease their use altogether, it is possible that our revenue or revenue growth rate could be significantly reduced, and our business negatively impacted.
In connection with certain of our offerings, including the Unified ID 2.0, EUID and OpenPass, we receive information that directly identifies individuals, such as email addresses and phone numbers, both 20 Table of Contents directly from consumers and from our clients or others.
In connection with certain of our offerings, including Unified ID 2.0, EUID and OpenPass, we receive information that directly identifies individuals, such as email addresses and phone numbers, both directly from consumers and from our clients or others.
We may be unable to make such changes and modifications in a commercially reasonable manner or at all, and our ability to develop new products and features could be limited.
We may be unable to make such changes and modifications in a commercially reasonable manner or at all, and our ability to develop new offerings or certain features could be limited.
In addition to laws regulating the processing of personal data, we, our advertisers, and publishers are also subject to regulation with respect to political advertising activities, which are governed by various federal and state laws in the U.S., and national and provincial laws worldwide.
In addition to laws regulating the processing of personal data, we, our advertisers, and publishers are also subject to regulation with respect to political advertising activities, which are governed by various federal and state laws in the United States, and national and provincial laws worldwide.
If all of our individual client contractual relationships were aggregated at the holding company level, Publicis Groupe would have represented more than 10% of our gross billings for 2023. In most cases, we enter into separate contracts and billing relationships with the individual agencies and account for them as separate clients.
If all of our individual client contractual relationships were aggregated at the holding company level, one holding company would have represented more than 10% of our gross billings for 2024. In most cases, we enter into separate contracts and billing relationships with the individual agencies and account for them as separate clients.
For example, Washington’s My Health, My Data Act (“MHMD”) introduces a host of new requirements related to a very broadly-defined notion of consumer health data that will impact that advertising industry in part because MHMD is subject to a private right of action (unlike other state privacy laws), so plaintiffs’ attorneys could explore claims that stretch the bounds of the law’s text.
For example, Washington’s My Health, My Data Act (“MHMD”) introduced a host of requirements related to a very broadly-defined notion of consumer health data that impacts the advertising industry in part because MHMD is subject to a private right of action (unlike other state privacy laws), so plaintiffs’ attorneys could explore claims that stretch the bounds of the law’s text.
Failure of the industry to adapt to changes required for operating under existing and future data privacy laws, industry approaches that disfavor our platform 22 Table of Contents and offerings, and user response to such changes could negatively impact inventory, data, and demand.
Failure of the industry to adapt to changes required for operating under existing and future data privacy laws, industry approaches that disfavor our platform and related offerings, and user response to such changes could negatively impact inventory, data, and demand.
Many states have adopted omnibus consumer privacy laws, some of which are already enforceable, while others will take effect over the coming years.
Many states have adopted omnibus consumer privacy laws, a host of which are already enforceable, while others will take effect over the coming years.
As of December 31, 2023, stockholders who held shares of Class B common stock, including our executive officers, employees, and directors and their affiliates, together held approximately 49.7% of the voting power of our outstanding capital stock.
As of December 31, 2024, stockholders who held shares of Class B common stock, including our executive officers, employees, and directors and their affiliates, together held approximately 49.3% of the voting power of our outstanding capital stock.
Our success depends on the continual development of our platform. From time to time, we may receive claims from third parties that our platform and underlying technology infringe or violate such third parties’ intellectual property rights. To the extent we gain greater public recognition, we may face a higher risk of being the subject of intellectual property claims.
From time to time, we may receive claims from third parties that our platform and underlying technology infringe or violate such third parties’ intellectual property rights. To the extent we gain greater public recognition, we may face a higher risk of being the subject of intellectual property claims.
We cannot avoid the possibility that one of these investigations or enforcement actions will require us to alter our practices. In addition, a potential federal omnibus privacy law remains the subject of active discussion. If passed, such a law would likely substantially impact the online advertising ecosystem. State lawmakers are also actively addressing consumer data privacy issues.
We cannot avoid the possibility that one of these investigations or enforcement actions will require us to alter our practices. In 19 Table of Contents addition, a potential federal omnibus privacy law remains a possibility. If ultimately passed, such a law would likely substantially impact the online advertising ecosystem. State lawmakers are also actively addressing consumer data privacy issues.
Laws governing the processing of personal data in Europe (including the U.K., E.U. and EEA, and the countries of Iceland, Liechtenstein, and Norway) also continue to impact us and continue to evolve. For example, the GDPR defines “personal data” broadly and enhances data protection obligations for controllers of such data and for service providers processing the data.
Laws governing the processing of personal data in Europe (including the U.K. and EEA) also continue to impact us and continue to evolve. For example, the GDPR defines “personal data” broadly and enhances data protection obligations for controllers of such data and for service providers processing the data.
Online political advertising laws are rapidly evolving and, in certain jurisdictions, impose varying substantive transparency and disclosure requirements on advertisers, publishers, and/or others in the ecosystem.
Online political advertising laws are rapidly evolving and, in 21 Table of Contents certain jurisdictions, impose varying substantive transparency and disclosure requirements on advertisers, publishers, and/or others in the ecosystem.
We may be required to, or otherwise may determine that it is advisable to, make significant changes in our business operations and product and services to obtain user opt-in for cookies and use of cookie data, or develop or obtain additional tools and technologies to compensate for a lack of cookie data.
We may be required to, or otherwise may determine that it is advisable to, make significant changes in our business operations and offerings to 23 Table of Contents obtain user opt-in for cookies and use of cookie data, or develop or obtain additional tools and technologies to compensate for a lack of cookie data.
Our certificate of incorporation provides that all Class B common stock will convert automatically into Class A common stock on December 22, 2025, unless converted prior to such date.
Our articles of incorporation provide that all Class B common stock will convert automatically into Class A common stock on December 22, 2025, unless converted prior to such date.
The loss of advertising agencies as clients could significantly harm our business, financial condition and results of operations. Our client base consists primarily of advertising agencies. We do not have exclusive relationships with advertising agencies, and we depend on agencies to work with us to build and maintain advertiser relationships and execute advertising campaigns.
We do not have exclusive relationships with advertising agencies or advertisers, and we depend on agencies to work with us to build and maintain advertiser relationships and execute advertising campaigns. The loss of agencies or advertisers as clients could significantly harm our business, financial condition and results of operations.
Current or future global market uncertainties or downturns and associated macroeconomic conditions, such as growing inflation, rising interest rates, recessionary fears, changes in foreign currency exchange rates, supply chain disruptions, the impact of global instability in many parts of the world and public health crises, may disrupt the operations of our clients and partners and cause advertisers to decrease or pause their advertising budgets, which could reduce spend though our platform and adversely affect our business, financial condition and results of operations.
Market uncertainties or downturns, whether global, local or industry or sector specific, and associated macroeconomic conditions, such as growing inflation, changes in interest rates, recessionary fears, changes in foreign currency exchange rates, supply chain disruptions, the impact of global instability in many parts of the world and public health crises, may disrupt the operations of our clients and partners and cause advertisers to decrease or pause their advertising budgets, which could reduce spend though our platform and adversely affect our business, financial condition 16 Table of Contents and results of operations.
The market for programmatic ad buying is an emerging market, and our current and potential clients may not shift to programmatic ad buying from other buying methods as quickly as we expect, which would reduce our growth potential.
The market for programmatic ad buying is a relatively new market, and our current and potential clients may not shift to programmatic ad buying from other buying methods as quickly as we expect, which would reduce our growth potential.
Many of these agencies are owned by holding companies, where decision making is decentralized such that purchasing decisions are made, and relationships with advertisers are located, at the agency, local branch or division level.
Our clients include advertising agencies, many of which are owned by holding companies, where decision making is decentralized such that purchasing decisions are made, and relationships with advertisers are located, at the agency, local branch or division level.
Spend on our platform primarily comes through our agency clients. Many of our contracts with advertising agencies provide that if the advertiser does not pay the agency, the agency is not liable to us, and we must seek payment solely from the advertiser, a type of arrangement called sequential liability.
Many of our contracts with advertising agencies provide that if the advertiser does not pay the agency, the agency is not liable to us, and we must seek payment solely from the advertiser, a type of arrangement called sequential liability.
Like the GDPR, the proposed ePrivacy Regulation has extra-territorial application as it applies to businesses established outside the EU who provide publicly available electronic communications services to, or gather data from the devices of, users in the EU.
Like the GDPR, the proposed ePrivacy Regulation applies extra-territorially to businesses established outside the EU who provide publicly available electronic communications services to, or gather data from the devices of, users in the EU.

… 148 more changes not shown on this page.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

5 edited+0 added−0 removed8 unchanged
Biggest changeIn particular, our Senior Vice President, Technology brings decades of technical experience to our executive risk committee along with technical education in computer engineering. 40 Table of Contents
Biggest changeIn particular, our Senior Vice President, Engineering Operations brings decades of technical experience to our executive risk committee along with technical education in computer engineering.
We have not identified risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected or are reasonably likely to materially affect us, including our business strategy, financial condition or results of operations.
We have not identified risks from known cybersecurity threats, including as a result of prior cybersecurity incidents, that have materially affected or are reasonably likely to materially affect us, including our business strategy, financial condition or results of operations.
The cybersecurity program is aligned with our enterprise risk framework. Members of our cybersecurity, enterprise risk management, finance and legal teams collaboratively assess the degree of risk to our business and operations from cybersecurity threats and incidents to develop incident response plans and risk mitigation practices.
The cybersecurity program is aligned with our enterprise risk framework. Members of our cybersecurity, enterprise risk management, engineering, finance and legal teams collaboratively assess the degree of risk to our business and operations from cybersecurity threats and incidents to develop incident response plans and risk mitigation practices.
The program is managed by an in-house cybersecurity team, and the program includes risk management and mitigation processes, such as malware protection, access management, technical vulnerability management and security incident response among other processes and technical safeguards; communication with third-party providers of services regarding their information security practices and disclosed cybersecurity incidents; the use of third-party service providers, as appropriate, for monitoring and mitigating cybersecurity threats and conducting penetration tests; education and training across the organization to mitigate cybersecurity threats to employees and our company; the maintenance of cybersecurity breach insurance; and disaster recovery and business continuity arrangements to minimize the potential impact to our operations in the event of a cybersecurity incident.
The program is 39 Table of Contents managed by an in-house cybersecurity team, and the program includes risk management and mitigation processes, such as malware protection, access management, technical vulnerability management and security incident response among other processes and technical safeguards; communication with third-party providers of services regarding their information security practices and disclosed cybersecurity incidents; the use of third-party service providers, as appropriate, for monitoring and mitigating cybersecurity threats and conducting penetration tests; education and training across the organization to mitigate cybersecurity threats to employees and our company; the maintenance of cybersecurity breach insurance; and disaster recovery and business continuity arrangements to minimize the potential impact to our operations in the event of a cybersecurity incident.
Our executive risk committee, which is comprised of our Chief Financial Officer, Chief Legal Officer and Senior Vice President, Technology, oversees the cybersecurity risk assessment and mitigation activities and receives regular reports from our cybersecurity team regarding the nature, timing and extent of incidents that occur across the Company’s internal environments and those disclosed by third-party service providers, if applicable.
Our executive risk committee, which is comprised of our Chief Financial Officer, Chief Legal Officer and Senior Vice President, Engineering Operations, oversees the cybersecurity risk assessment and mitigation activities and receives regular reports from our cybersecurity team regarding the nature, timing and extent of incidents that occur across the Company’s internal environments and those disclosed by third-party service providers, if applicable.

Item 2. Properties

Properties — owned and leased real estate

1 edited+16 added−0 removed1 unchanged
Biggest changeWe believe that our facilities are adequate to meet our needs for the immediate future and that, should it be needed, we will be able to secure additional space to accommodate expansion of our operations.
Biggest changeWe believe that our facilities are adequate to meet our needs for the immediate future and that, should it be needed, we will be able to secure additional space to accommodate expansion of our operations. Item 3.
Added
Legal Proceedings From time to time, we are subject to various legal proceedings, litigation and claims, either asserted or unasserted, that arise in the ordinary course of business.
Added
Although the outcome of the various legal proceedings, litigation and claims cannot be predicted with certainty, management does not believe that any of these proceedings or other claims will have a material adverse effect on our business, financial condition, results of operations or cash flows.
Added
Regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors. 40 Table of Contents On May 27, 2022, a stockholder filed a derivative lawsuit captioned Huizenga v.
Added
Green , No. 2022-0461, asserting claims on our behalf against certain members of our board of directors in the Court of Chancery of the State of Delaware. On June 27, 2022, a second derivative lawsuit captioned Pfeiffer v. Green , No. 2022-0560, was filed in the Court of Chancery of the State of Delaware alleging substantially similar claims.
Added
Those lawsuits were consolidated on August 18, 2022, and a lead plaintiff was appointed on October 7, 2022. The two complaints alleged generally that the defendants breached their fiduciary duties to us and our stockholders in connection with the negotiation and approval of a market-based performance award to our Chief Executive Officer (the “CEO Performance Option”).
Added
The plaintiffs sought a court order rescinding the CEO Performance Option and monetary damages. On November 10, 2022, the plaintiffs filed a consolidated complaint, and on January 12, 2023, the defendants moved to dismiss the consolidated complaint.
Added
On February 14, 2025, the court granted the motions to dismiss under Court of Chancery Rule 23.1 in their entirety with prejudice, finding that the plaintiffs did not allege facts sufficient to infer that at least half of our board of directors received a material benefit from the CEO Performance Option, lacked independence from Mr.
Added
Green, or faced a “substantial likelihood of liability” from having approved the CEO Performance Option. The order is subject to appeal.
Added
On October 4, 2024, a stockholder filed a class action complaint in the Court of Chancery in the State of Delaware alleging claims for breach of contract against us and breach of fiduciary duties against our directors, in connection with our reincorporation from Delaware to Nevada. Gunderson v. The Trade Desk, Inc. , No. 2024-1029 (Del. Ch.).
Added
On October 24, 2024, the plaintiff filed an amended complaint. The complaint sought, among other things, an order declaring that our conversion required approval by a supermajority of our stockholders and an order enjoining the November 14, 2024 stockholder vote on the proposed conversion.
Added
On October 28, 2024, the parties completed expedited briefing on cross motions for partial summary judgment regarding the causes of action asserted in the original complaint, and the court heard oral argument on the motions on October 30, 2024.
Added
On November 6, 2024, the court granted the defendants’ summary judgment motion and denied the plaintiff’s cross-motion, finding that the conversion did not require supermajority approval of our stockholders, and that the defendants did not breach their fiduciary duties by disclosing that the conversion required a vote of a simple majority of our stockholders. The plaintiff chose not to appeal.
Added
The case is now proceeding as to the plaintiff’s remaining claims that our directors breached their fiduciary duties because our reincorporation to Nevada was substantively and procedurally unfair, and that the transaction is not subject to the business judgment rule because it was not subject to approval by a special committee of the board or by a majority of the disinterested stockholders.
Added
The defendants have moved to dismiss, but no briefing schedule has been set. On November 15, 2024, a different stockholder filed a complaint in the Court of Chancery of the State of Delaware requesting production of our corporate books and records related to the Nevada conversion, pursuant to 8 Del. C. § 220.
Added
On November 27, 2024, the parties agreed to stay the proceeding in exchange for the production of certain documents to the plaintiff; the court granted the stay the same day. The proceedings remain stayed.
Added
Litigation is inherently uncertain and there can be no assurance regarding the likelihood that the motions to dismiss or defense of the various actions will be successful. Item 4. Mine Safety Disclosures Not applicable. 41 Table of Contents PART II

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

0 edited+61 added−8 removed0 unchanged
Removed
Item 3. Legal Proceedings From time to time, we are subject to various legal proceedings, litigation and claims, either asserted or unasserted, that arise in the ordinary course of business.
Added
Item 3. Legal Proceedings. ” Transfers by holders of Class B common stock will generally result in those shares converting to Class A common stock, subject to limited exceptions, such as transfers effected for estate planning or charitable purposes.
Removed
Although the outcome of the various legal proceedings, litigation and claims cannot be predicted with certainty, management does not believe that any of these proceedings or other claims will have a material adverse effect on our business, financial condition, results of operations or cash flows.
Added
However, until the conversion of all outstanding shares of Class B common stock, the conversion of Class B common stock to Class A common stock will have the effect, over time, of increasing the voting power of those holders of Class B common stock who retain their shares in the long term.
Removed
Regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors. On May 27, 2022, a stockholder filed a derivative lawsuit captioned Huizenga v.
Added
Our governing documents and Nevada law could discourage takeover attempts and other corporate governance changes. Our articles of incorporation and bylaws contain provisions that could delay or prevent a change in control of our company.
Removed
Green, et al., No. 2022-0461, asserting claims on our behalf against certain members of our board of directors in the Court of Chancery of the State of Delaware. On June 27, 2022, a second derivative lawsuit captioned Pfeiffer v. Green, et al., No. 2022-0560, was filed in the Court of Chancery of the State of Delaware alleging substantially similar claims.
Added
These provisions could also make it difficult for stockholders to elect directors that are not nominated by the current members of our board of directors or take other corporate actions, including effecting changes in our management.
Removed
Those lawsuits were consolidated on August 18, 2022, and a lead plaintiff was appointed on October 7, 2022. The two complaints allege generally that the defendants breached their fiduciary duties to us and our stockholders in connection with the negotiation and approval of the CEO Performance Option.
Added
These provisions include the following provisions: • permit the board of directors to establish the number of directors and fill any vacancies and newly created directorships; • provide that our board of directors is classified into three classes with staggered, three-year terms and that directors may only be removed by the affirmative vote of the holders of at least 66 2/3% of the voting power of the then-outstanding shares of capital stock that all of our stockholders would be entitled to cast in an election of directors; 35 Table of Contents • require super-majority voting to amend certain provisions in our articles of incorporation and bylaws; • authorize the issuance of “blank check” preferred stock that our board of directors could use to implement a stockholder rights plan; • specify that special meetings of our stockholders can be called only by our board of directors, the chairman of our board of directors, our chief executive officer, or a stockholder that has held at least 20% of our outstanding shares of common stock continuously for one year; • provide that the board of directors is expressly authorized to make, alter or repeal our bylaws; • provide that vacancies on our board of directors may be filled only by a majority of directors then in office, even though less than a quorum; • prohibit cumulative voting in the election of directors; • restrict the forum for certain litigation against us to Nevada; • restrict the forum for certain litigation against us to the federal district courts of the United States; • permit our board of directors to alter our bylaws without obtaining stockholder approval; • reflect the dual class structure of our common stock, as discussed above; and • establish advance notice requirements for nominations for election to our board of directors or for proposing matters that can be acted upon by stockholders at annual stockholder meetings.
Removed
The plaintiffs seek a court order rescinding the CEO Performance Option and monetary damages. On November 10, 2022, the plaintiffs filed a consolidated complaint, and on January 12, 2023, the defendants moved to dismiss the consolidated complaint. On March 24, 2023, plaintiffs filed an opposition to defendants’ motions to dismiss.
Added
In addition, we are subject to Nevada’s statute on combinations with interested stockholders. These provisions may prohibit large stockholders, in particular those owning 10% or more of the voting power of our outstanding voting stock, from merging or combining with us for a period of time.
Removed
Defendants filed their replies in support of their motions to dismiss on May 19, 2023. Oral argument on the motions has been set for April 3, 2024. Litigation is inherently uncertain and there can be no assurance regarding the likelihood that the motions to dismiss or defense of the various actions will be successful. Item 4.
Added
Our articles of incorporation and bylaws designate certain state or federal courts as the exclusive forum for certain litigation that may be initiated by our stockholders, which could limit stockholders’ ability to obtain a favorable judicial forum for disputes with us.
Removed
Mine Safety Disclosures Not applicable. 41 Table of Contents PART II
Added
Our articles of incorporation provide that, unless we consent in writing to the selection of an alternative forum, the state courts located in the State of Nevada will be, to the fullest extent permitted by law, the sole and exclusive forum for any state law claim for: • any action, suit or proceeding brought in our name or right or on our behalf; • any action asserting or based upon a claim of breach of a fiduciary duty owed by any of our directors, officers, employees or agents to us or our stockholders; or • any action asserting a claim arising pursuant to, or to interpret, apply, enforce or determine the validity of, any provision of the Nevada Revised Statutes, our articles of incorporation or our bylaws or certain voting trust agreements to which we are a party or a stated beneficiary (collectively, the “Nevada Forum Provision”).
Added
The Nevada Forum Provision will not apply to any causes of action arising under the Securities Act or the Exchange Act.
Added
Further, our bylaws provide that, unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States of America will be the sole and exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act (the “Federal Forum Provision”).
Added
In addition, our articles of incorporation and bylaws provide that any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock is deemed to have notice of and consented to the Nevada Forum Provision and the Federal Forum Provision, respectively; provided, however, that stockholders cannot and will not be deemed to have waived our compliance with the U.S. federal securities laws and the rules and regulations thereunder.
Added
The Nevada Forum Provision and the Federal Forum Provision in our articles of incorporation and bylaws may impose additional litigation costs on stockholders in pursuing any such claims.
Added
Additionally, these forum selection clauses may limit our stockholders’ ability to bring a claim in a judicial forum that they find favorable for disputes with us or our directors, officers, employees or agents (including, without limitation, any claims in respect of stockholder nominations of directors as permitted under our bylaws), which may discourage the filing of lawsuits against us and our directors, officers, employees and agents even though an action, if successful, might benefit our stockholders.
Added
In addition, there is uncertainty as to whether other courts will enforce our Federal Forum Provision. If the Federal Forum Provision is found to be unenforceable, we may incur additional costs associated with resolving such matters. The Federal Forum Provision may also impose additional litigation costs on stockholders who assert that the provision is not enforceable or invalid.
Added
The state 36 Table of Contents courts of the State of Nevada and the federal district courts may also reach different judgments or results than would other courts, including courts where a stockholder considering an action may be located or would otherwise choose to bring the action, and such judgments may be more or less favorable to us than our stockholders.
Added
We cannot guarantee that our share repurchase program will be fully consummated, that it will enhance long-term stockholder value, or that it will successfully mitigate the dilutive effect of employee equity awards. Share repurchases diminish our cash reserves and could also increase the volatility of the trading price of our Class A common stock.
Added
While our board of directors authorized a share repurchase program that does not have an expiration date, the program does not obligate us to acquire any particular amount of Class A common stock and it may be terminated at any time.
Added
We cannot guarantee that the program will be fully consummated, that it will enhance long-term stockholder value, or that it will successfully mitigate the dilutive effect of employee equity awards. Any repurchases will reduce the amount of cash we have available to fund working capital, capital expenditures, strategic acquisitions or business opportunities, and other general corporate requirements.
Added
In addition, the program could affect the trading price of our Class A common stock and increase volatility, and any announcement of a termination of this program may result in a decrease in the trading price of our Class A common stock.
Added
General Risk Factors If we fail to maintain an effective system of internal control over financial reporting in the future, we may not be able to accurately or timely report our financial condition or results of operations.
Added
If our internal control over financial reporting is not effective, it may adversely affect investor confidence in us and the price of our common stock. As a public company, we are required to maintain internal control over financial reporting and to report any material weaknesses in such internal control.
Added
Section 404 of the Sarbanes-Oxley Act of 2002, as amended (the “Sarbanes-Oxley Act”) requires that we evaluate and determine the effectiveness of our internal control over financial reporting and provide a management report on internal control over financial reporting.
Added
Our platform system applications are complex, multi-faceted and include applications that are highly customized in order to serve and support our clients, advertising inventory and data suppliers, as well as support our financial reporting obligations. We regularly make improvements to our platform to maintain and enhance our competitive position.
Added
In the future, we may implement new offerings and engage in business transactions, such as acquisitions, reorganizations or implementation of new information systems. These factors require us to develop and maintain our internal controls, processes and reporting systems, and we expect to incur ongoing costs in this effort.
Added
We may not be successful in developing and maintaining effective internal controls , and any failure to develop or maintain effective controls, or any difficulties encountered in their implementation or improvement, could harm our operating results or cause us to fail to meet our reporting obligations and may result in a restatement of our financial statements for prior periods .
Added
If we identify material weaknesses in our internal control over financial reporting, we will be unable to assert that our internal control over financial reporting is effective.
Added
If we are unable to assert that our internal control over financial reporting is effective, if our independent registered public accounting firm is unable to express an opinion as to the effectiveness of our internal control over financial reporting, or if we are unable to comply with the requirements of the Sarbanes-Oxley Act in a timely manner, then, we may be late with the filing of our periodic reports, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our common stock could be negatively affected.
Added
Such failures could also subject us to investigations by Nasdaq, the stock exchange on which our securities are listed, the SEC or other regulatory authorities, and to litigation from stockholders, which could harm our reputation, financial condition or divert financial and management resources from our core business.
Added
The requirements of being a public company may strain our resources, divert our management’s attention and affect our ability to attract and retain qualified board members.
Added
As a public company, we are subject to the reporting requirements of the Exchange Act, and are required to comply with the applicable requirements of the Sarbanes-Oxley Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act, the listing requirements of Nasdaq, and other applicable securities rules and regulations.
Added
Compliance with these rules and regulations increases our legal and financial compliance costs, make some activities more difficult, time-consuming or costly and increase demand on our systems and resources.
Added
Among other things, the Exchange Act requires that we file annual, quarterly and current reports with respect to our business and results of operations and 37 Table of Contents maintain effective disclosure controls and procedures and internal controls over financial reporting.
Added
Significant resources and management oversight are required to maintain and, if required, improve our disclosure controls and procedures and internal controls over financial reporting to meet this standard. As a result, management’s attention may be diverted from other business concerns, which could harm our business and results of operations.
Added
Exposure to foreign currency exchange rate fluctuations could negatively impact our results of operations. While the majority of the transactions through our platform are denominated in U.S. Dollars, we have transacted in foreign currencies, both for inventory and data and for payments by clients from use of our platform. We also have expenses denominated in currencies other than the U.S.
Added
Dollar. Given our anticipated international growth, we expect the number of transactions in a variety of foreign currencies to continue to grow in the future. While we generally require a fee from our clients that pay in non-U.S. currency, this fee may not always cover foreign currency exchange rate fluctuations.
Added
In addition, for those clients that pay in non-U.S. currency, we often pay for the advertising inventory and data purchased by such clients in U.S. Dollars. As a result, any increase in the value of the U.S. Dollar against these foreign currencies could cause our revenue to decline relative to our costs.
Added
Although we currently have a program to hedge exposure to foreign currency fluctuations, the use of hedging instruments may not be available for all currencies or may not always offset losses resulting from foreign currency exchange rate fluctuations. Moreover, the use of hedging instruments can itself result in losses if we are unable to structure effective hedges with such instruments.
Added
Future acquisitions, strategic investments or alliances could disrupt our business and harm our business, financial condition and results of operations. We explore, on an ongoing basis, potential acquisitions of companies or technologies, strategic investments, or alliances to strengthen our business; however, we have limited experience in acquiring and integrating businesses, products and technologies.
Added
Even if we identify an appropriate acquisition candidate, we may not be successful in negotiating the terms or financing of the acquisition, and our due diligence may fail to identify all of the problems, liabilities or other shortcomings or challenges of an acquired business, product or technology, including issues related to intellectual property, product quality or architecture, regulatory compliance practices, revenue recognition or other accounting practices or employee or client issues.
Added
Acquisitions involve numerous risks, any of which could harm our business, including: • regulatory hurdles; • anticipated benefits may not materialize; • diversion of management time and focus from operating our business to addressing acquisition integration challenges; • retention of employees from the acquired company; • cultural challenges associated with integrating employees from the acquired company into our organization; • integration of the acquired company’s products and technology; • integration of the acquired company’s accounting, management information, human resources and other administrative systems; • the need to implement or improve controls, procedures and policies at a business that, prior to the acquisition, may have lacked effective controls, procedures and policies; • coordination of product development and sales and marketing functions; • liability for activities of the acquired company before the acquisition, including relating to privacy and data security, patent and trademark infringement claims, violations of laws, commercial disputes, tax liabilities and other known and unknown liabilities; and • litigation or other claims in connection with the acquisition, including claims from terminated employees, users, former stockholders or other third parties.
Added
Failure to appropriately mitigate these risks or other issues related to such acquisitions and strategic investments could result in reducing or completely eliminating any anticipated benefits of transactions, and harm our business generally.
Added
Future acquisitions could also result in dilutive issuances of our equity securities, the incurrence of debt, contingent liabilities, amortization expenses or the impairment of goodwill, any of which could harm our business, financial condition and results of operations. 38 Table of Contents We may not be able to secure additional financing on favorable terms, or at all, to meet our future capital needs, which may in turn impair our growth.
Added
We intend to continue to grow our business, which will require additional capital to develop new features or enhance our platform, improve our operating infrastructure, finance working capital requirements, or acquire complementary businesses and technologies.
Added
We cannot assure you that our business will generate sufficient cash flow from operations or that future borrowings will be available to us under our existing credit facility in an amount sufficient to fund our working capital needs. Accordingly, we may need to engage in additional equity or debt financings to secure additional capital.
Added
We cannot assure you that we would be able to locate additional financing on commercially reasonable terms or at all.
Added
Any debt financing that we secure in the future could involve restrictive covenants relating to our capital raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities.
Added
If our cash flows and credit facility borrowings are insufficient to fund our working capital requirements, we may not be able to grow at the rate we currently expect or at all.
Added
In addition, in the absence of sufficient cash flows from operations, we might be unable to meet our obligations under our credit facility, and we may therefore be at risk of default thereunder.
Added
If we raise additional funds through future issuances of equity or convertible debt securities, our existing stockholders could suffer significant dilution, and any new equity securities we issue could have rights, preferences and privileges superior to those of holders of our common stock.
Added
If we are unable to secure additional funding on favorable terms, or at all, when we require it, our ability to continue to grow our business to react to market conditions could be impaired and our business may be harmed. Our tax liabilities may be greater than anticipated.
Added
The U.S. and non-U.S. tax laws applicable to our business activities are subject to interpretation and are changing. We are subject to audit by the Internal Revenue Service and by taxing authorities of the state, local and foreign jurisdictions in which we operate.
Added
Our tax obligations are based in part on our corporate operating structure, including the manner in which we develop, value, use and hold our intellectual property, the jurisdictions in which we operate, how tax authorities assess revenue-based taxes such as sales and use taxes, the scope of our international operations and the value we ascribe to our intercompany transactions.
Added
Taxing authorities may challenge, and have challenged, our tax positions and methodologies for valuing developed technology or intercompany arrangements, positions regarding the collection of sales and use taxes, and the jurisdictions in which we are subject to taxes, which could expose us to additional taxes.
Added
Any adverse outcomes of such challenges to our tax positions could result in additional taxes for prior periods, interest and penalties, as well as higher future taxes.
Added
In addition, our future tax expense could increase as a result of changes in tax laws, regulations or accounting principles, or as a result of earning income in jurisdictions that have higher tax rates.
Added
For example, the European Commission has proposed, and various jurisdictions, including a number of states in the United States, are considering enacting or have enacted laws that impose separate taxes on specified digital services, which may increase our tax obligations in such jurisdictions.
Added
In addition, the Organization for Economic Cooperation and Development (“OECD”) announced an Inclusive Framework on Base Erosion and Profit Shifting, including Pillar Two Model Rules defining a global minimum tax, which calls for the taxation of large multinational corporations at a minimum rate of 15%.
Added
While the changes from these rules have not impacted our financial condition or results of operations, they could increase our effective tax rate and cash tax payments in future periods. Any increase in our tax expense could have a negative effect on our financial condition and results of operations.
Added
Moreover, the determination of our provision for income taxes and other tax liabilities requires significant estimates and judgment by management, and the tax treatment of certain transactions is uncertain.
Added
Any changes, ambiguity, or uncertainty in taxing jurisdictions’ administrative interpretations, decisions, policies and positions, including, the position of taxing authorities with respect to revenue generated by reference to certain digital services, could also materially impact our income tax liabilities.
Added
Although we believe we will make reasonable estimates and judgments, the ultimate outcome of any particular issue may differ from the amounts previously recorded in our financial statements and any such occurrence could materially affect our financial condition and results of operations. Item 1B. Unresolved Staff Comments None.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

8 edited+0 added−0 removed12 unchanged
Biggest changeIn February 2024, an additional $647 million was authorized under this program, bringing the total amount for future repurchases back to $700 million. The share repurchase program is designed to help offset the impact of future share dilution from employee stock issuances.
Biggest changeIn February 2024, an additional $647 million was authorized under this program, bringing the total amount for future repurchases back to $700 million. In January 2025, we repurchased $28 million of our Class A common stock and an additional $564 million was authorized under this program, bringing the total amount for future repurchases to $1 billion.
Dividend Policy We have never declared or paid any dividends on our Class A or Class B common stock, and we do not anticipate paying any cash dividends in the foreseeable future. We currently intend to retain any earnings to finance the operation and expansion of our business or to conduct repurchases of our Class A common stock.
Dividend Policy We have never declared or paid any cash dividends on our Class A or Class B common stock, and we do not anticipate paying any cash dividends in the foreseeable future. We currently intend to retain any earnings to finance the operation and expansion of our business or to conduct repurchases of our Class A common stock.
Securities Authorized for Issuance Under Equity Compensation Plans The information required by this item will be included in our proxy statement relating to our 2024 annual meeting of stockholders to be filed by us with the SEC no later than 120 days after the close of our fiscal year ended December 31, 2023 (the “Proxy Statement”) and is incorporated herein by reference.
Securities Authorized for Issuance Under Equity Compensation Plans The information required by this item will be included in our proxy statement relating to our 2025 annual meeting of stockholders to be filed by us with the SEC no later than 120 days after the close of our fiscal year ended December 31, 2024 (the “Proxy Statement”) and is incorporated herein by reference.
The following graph compares the cumulative total stockholder return on an initial investment of $100 in our Class A common stock between December 31, 2018, and December 31, 2023, with the comparative cumulative total returns of the Standard & Poor’s (S&P) 500 Index, Nasdaq 100 Index and Russell 3000 Index over the same period.
The following graph compares the cumulative total stockholder return on an initial investment of $100 in our Class A common stock between December 31, 2019, and December 31, 2024, with the comparative cumulative total returns of the Standard & Poor’s (S&P) 500 Index, Nasdaq 100 Index and Russell 3000 Index over the same period.
The graph assumes the closing market price on December 31, 2018, of $11.61 per share as the initial value of our Class A common stock after retroactive adjustment for the Stock Split. 43 Table of Contents The returns shown are based on historical results and are not indicative of, nor intended to forecast, future stock price performance. Item 6. Reserved
The graph assumes the closing market price on December 31, 2019, of $25.98 per share as the initial value of our Class A common stock after retroactive adjustment for the Stock Split. 43 Table of Contents The returns shown are based on historical results and are not indicative of, nor intended to forecast, future stock price performance. Item 6. Reserved
Holders of Record As of January 31, 2024, there were approximately 16 holders of record of our Class A common stock and 14 holders of record of our Class B common stock.
Holders of Record As of January 31, 2025, there were approximately 11 holders of record of our Class A common stock and 14 holders of record of our Class B common stock.
Recent Sales of Unregistered Securities None. 42 Table of Contents Issuer Purchases of Equity Securities The following table summarizes share repurchase activity for the three months ended December 31, 2023: Total Number of Shares Purchased (1) Average Price Paid Per Share (2) Total Number of Shares Purchased as Part of Publicly Announced Programs (1) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (1) (in thousands) (in thousands) (in millions) October 1-31 — $ — — $ 273 November 1-30 1,685 $ 68.19 1,685 $ 158 December 1-31 1,507 $ 69.64 1,507 $ 53 3,192 3,192 _______________ (1) On February 15, 2023, we announced that our board of directors approved a share repurchase program with authorization to repurchase up to $700 million our Class A common stock, which commenced in February 2023 and has no expiration date.
Recent Sales of Unregistered Securities None. 42 Table of Contents Issuer Purchases of Equity Securities The following table summarizes share repurchase activity for the three months ended December 31, 2024: Total Number of Shares Purchased (1) Average Price Paid Per Share (2) Total Number of Shares Purchased as Part of Publicly Announced Programs (1) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (1) (in thousands) (in thousands) (in millions) October 1-31 214 $ 115.26 214 $ 496 November 1-30 38 $ 128.91 38 $ 491 December 1-31 209 $ 129.35 209 $ 464 461 461 _______________ (1) On February 15, 2023, we announced that our board of directors approved a share repurchase program to repurchase up to $700 million of our Class A common stock, which commenced in February 2023 and has no expiration date.
Repurchases under the program may be made in the open market, in privately negotiated transactions or otherwise, with the amount and timing of repurchases determined at our discretion, depending on market conditions and corporate needs.
The share repurchase program is designed to help offset the impact of future share dilution from employee stock issuances. Repurchases under the program may be made in the open market, in privately negotiated transactions or otherwise, with the amount and timing of repurchases determined at our discretion, depending on market conditions and corporate needs.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

108 edited+23 added−11 removed44 unchanged
Biggest changeRevenue as a percentage of gross spend in the aggregate may fluctuate from period to period based on our client mix and the extent to which clients utilize our platform’s features. Platform Operations Platform operations expense increased by $84 million, or 30%, for the year ended December 31, 2023, as compared to the year ended December 31, 2022.
Biggest changeThe increase was primarily due to higher gross spend in the current year on our platform, which was primarily driven by more campaigns executed by existing clients, new clients and higher spend per campaign. 49 Table of Contents Revenue as a percentage of gross spend in the aggregate may fluctuate from period to period based on our client mix, changes in our platform or related offerings and the extent to which clients utilize our platform’s value-added services and data.
We believe that these investments will contribute to our long-term growth, although they may negatively impact profitability in the near term. 45 Table of Contents Our business model has allowed us to grow significantly, and we believe that our operating leverage enables us to support future growth profitably.
We believe that these investments will contribute to our long-term growth, although they may negatively impact profitability in the near term. 45 Table of Contents Our business model has allowed us to grow significantly, and we believe that our operating leverage enables us to support future long-term growth profitably.
We have foreign currency exposure related to our accounts receivable and, to a much lesser extent, accounts payable that are denominated in currencies other than the U.S. Dollar, principally the Euro, British Pound, Australian Dollar, Canadian Dollar, Japanese Yen, Indian Rupee, Indonesian Rupiah, Hong Kong Dollar and Singapore Dollar.
We have foreign currency exposure related to our accounts receivable and, to a much lesser extent, accounts payable that are denominated in currencies other than the U.S. Dollar, principally the Euro, British Pound, Canadian Dollar, Australian Dollar, Japanese Yen, Indian Rupee, Indonesian Rupiah, Hong Kong Dollar and Singapore Dollar.
The increase in accounts receivable resulted primarily from the growth of our business and the timing of cash receipts from clients. The decrease in operating lease liabilities was due primarily to rent payments.
The increase in accounts receivable resulted primarily from the growth of our business and the timing of cash receipts from clients. The decrease in operating lease liabilities was due primarily to rent payments.
Factors Affecting Our Performance Growth in and Retention of Client Spend Our recent growth has been driven by expanding our share of spend by our existing clients and adding new clients. Our clients include some of the largest advertising agencies in the world, and we believe there is significant room for us to expand further within these clients.
Factors Affecting Our Performance Growth in and Retention of Client Spend Our recent growth has been driven by expanding our share of spend by our existing clients and adding new clients. Our clients include some of the largest advertising agencies and advertisers in the world, and we believe there is significant room for us to expand further within these clients.
We expect that our revenue as a percentage of gross spend will fluctuate in the future, especially as we introduce new platform features that are adopted by our clients, expand our omnichannel capabilities, extend our reach to more CTV and other inventory and add additional clients whose businesses may have different underlying business models.
We expect that our revenue as a percentage of gross spend will fluctuate in the future, especially as we introduce new and enhanced platform features on our platform that are adopted by our clients, expand our omnichannel capabilities, extend our reach to more CTV and other inventory and add additional clients whose businesses may have different underlying business models.
We capitalize certain costs associated with the development of our platform, which are amortized in platform operations over their estimated useful lives.
We capitalize certain costs associated with the development of our platform, which are amortized in platform operations expense over their estimated useful lives.
Provision for Income Taxes The difference between the effective tax rate in 2023 of 33% and the U.S. federal statutory income tax rate of 21% was primarily due to nondeductible stock-based compensation and the impact of taxes in foreign and state jurisdictions, partially offset by the impact of excess tax benefits associated with stock-based awards and research and development tax credits.
The difference between the effective tax rate in 2023 of 33% and the U.S. federal statutory income tax rate of 21% was primarily due to nondeductible stock-based compensation and the impact of taxes in foreign and state jurisdictions, partially offset by the impact of excess tax benefits associated with stock-based awards and research and development tax credits.
From time to time, we may enter into agreements with data suppliers where the purchased data is used to inform and improve our platform, generally at no additional charge to our customers outside of our standard fees. Costs associated with this data (“data-related costs”) are recorded in platform operations expense.
From time to time, we may enter into agreements with data suppliers where the purchased data is used to inform and improve our platform, generally at no additional charge to our clients outside of our standard fees. Costs associated with this data (“data-related costs”) are recorded in platform operations expense.
We believe that key opportunities include our ongoing global expansion, continuing development of our omnichannel ad inventory (including in channels such as video, including CTV, mobile, audio and others), adoption and utilization of retail media and continuing development and adoption of the data usage, measurement and targeting capabilities provided by our platform.
We believe that key opportunities include our ongoing global expansion, continuing development of our omnichannel ad inventory (including in channels such as CTV and other video, mobile, audio and others), adoption and utilization of retail data and continuing development and adoption of the data usage, measurement and targeting capabilities provided by our platform.
Provision for (benefit from) Income Taxes The provision for (benefit from) income taxes consists primarily of U.S. federal, state and foreign income taxes. Our income tax provision (benefit) may be significantly affected by changes to our estimates for tax in jurisdictions in which we operate, and other estimates utilized in determining the global effective tax rate.
Provision for Income Taxes The provision for income taxes consists primarily of U.S. federal, state and foreign income taxes. Our income tax provision may be significantly affected by changes to our estimates for tax in jurisdictions in which we operate, and other estimates utilized in determining the global effective tax rate.
For a discussion of the results of our operations for the year ended December 31, 2022 compared with the year ended December 31, 2021, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, filed with SEC on February 15, 2023.
For a discussion of the results of our operations for the year ended December 31, 2023 compared with the year ended December 31, 2022, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with SEC on February 15, 2024.
The increase in accrued expenses and other liabilities is primarily due to the timing of payment of accrued payroll and incentive compensation costs, partially offset by a decrease in the income tax liability driven by tax payments net of the current income tax provision.
The increase in accrued expenses and other liabilities was primarily due to the timing of payment of accrued payroll and incentive compensation costs, partially offset by a decrease in the income tax liability driven by tax payments net of the current income tax provision.
We believe that our ability to integrate and offer CTV and other advertising inventory for purchase through our platform, our ability to continuously improve our platform’s and related offerings’ features and functionality and, in particular, our ability to manage the increased costs that will accompany these efforts, will impact the future growth of our business.
We believe that our ability to integrate and offer CTV and other advertising inventory for purchase through our platform, our ability to continuously improve the features and functionality of our platform and related offerings and, in particular, our ability to manage the increased costs that will accompany these efforts, will impact the future growth of our business.
General and administrative expenses also include stock-based compensation expense related to the CEO Performance Option, as defined below. We expect to continue to invest in corporate infrastructure to support growth. Excluding the impact of the CEO Performance Option, we expect general and administrative expenses to increase in absolute dollars in future periods. Other Expense (Income), Net Interest Expense.
General and administrative expenses also include stock-based compensation expense related to the CEO Performance Option. We expect to continue to invest in corporate infrastructure to support growth. Excluding the impact of the CEO Performance Option, we expect general and administrative expenses to increase in absolute dollars in future periods. Other Income, Net Interest Expense.
Due to their nature, there is a high degree of uncertainty regarding the time of future cash outflows and other events that extinguish these liabilities.
Due to their nature, there is a high degree of uncertainty regarding the timing of future cash outflows and other events that extinguish these liabilities.
Our technology and development expense consists primarily of personnel costs, including salaries, bonuses, stock-based compensation and employee benefits costs as well as third-party consultant costs associated with the ongoing development of our platform and integrations with our advertising and data inventory suppliers.
Technology and development expense consists primarily of personnel costs, including salaries, bonuses, stock-based compensation, employee benefits costs and travel as well as third-party consultant costs associated with the ongoing development of our platform and related offerings as well as integrations with our advertising inventory and data suppliers.
In the ordinary course of business, demands have been made upon us to provide indemnification under such agreements, but we are not aware of any claims that could have a material effect on our consolidated financial statements. Accordingly, no amounts for any obligation have been recorded at December 31, 2023.
In the ordinary course of business, demands have been made upon us to provide indemnification under such agreements, but we are not aware of any claims that could have a material effect on our consolidated financial statements. Accordingly, no material amounts have been recorded at December 31, 2024.
If we raise additional financing by the incurrence of additional indebtedness, we may be subject to increased fixed payment obligations and could also be subject to additional restrictive covenants, such as limitations on our ability to incur additional debt, and other operating restrictions that could adversely impact our ability to conduct our business.
If we raise additional financing by incurring additional indebtedness, we may be subject to increased fixed payment obligations and could also be subject to additional restrictive covenants, such as limitations on our ability to incur additional debt, and other operating restrictions that could adversely impact our ability to conduct our business.
We expect our take rate (revenue as a percentage of gross spend) to fluctuate due to the types of services and features selected by our clients through our platform and certain volume discounts. Other companies, including companies in our industry, may calculate gross spend or similarly titled measures differently, which reduces its usefulness as a comparative measure.
We expect our take rate (revenue as a percentage of gross spend) to fluctuate due to the types of services rendered and client-selected features purchased through our platform and certain volume discounts. Other companies, including companies in our industry, may calculate gross spend or similarly titled measures differently, which reduces its usefulness as a comparative measure.
Sales and marketing expense consists primarily of personnel costs, including salaries, bonuses, stock-based compensation, employee benefits costs and commission costs, for our sales and marketing personnel. Sales and marketing expense also includes costs for market development programs, marketing events, advertising and promotional and other marketing activities. Commissions costs are expensed as incurred.
Sales and marketing expense consists primarily of personnel costs, including salaries, bonuses, stock-based compensation, employee benefits costs, commission costs and travel, for our sales and marketing 47 Table of Contents personnel. Sales and marketing expense also includes costs for market development programs, marketing events, advertising and promotional and other marketing activities. Commissions costs are expensed as incurred.
Our general and administrative expense consists primarily of personnel costs, including salaries, bonuses, stock-based compensation and employee benefits costs associated with our executive, finance, legal, human resources, compliance and other administrative personnel, as well as accounting and legal professional services fees and credit loss expense.
General and administrative expense consists primarily of personnel costs, including salaries, bonuses, stock-based compensation, employee benefits costs and travel associated with our executive, finance, legal, human resources, compliance and other administrative personnel, as well as accounting and legal professional services fees, local business taxes and fees and credit loss expense.
Any future indebtedness we incur may result in terms that could be unfavorable to equity investors. There can be no assurance that we will be able to raise additional capital. The inability to raise capital would adversely affect our ability to achieve our business objectives.
Any future indebtedness we incur may result in terms that could be unfavorable to equity investors. 51 Table of Contents There can be no assurance that we will be able to raise additional capital. The inability to raise capital would adversely affect our ability to achieve our business objectives.
Realization of our deferred tax assets is dependent primarily on the generation of future taxable income. In considering the need for a valuation allowance, we consider our historical, as well as future, projected taxable income along with other objectively verifiable evidence.
Realization of our deferred tax assets is dependent primarily on the generation of future taxable income. In considering the need for a valuation allowance, we consider our historical, as well as future, projected taxable income along with other objectively verifiable evidence, both positive and negative.
We expect technology and development expense to increase in absolute dollars as we continue to invest in the development of our platform and related offerings to support additional features and functions, increase the number of advertising and data inventory suppliers and support the anticipated increase in volume of advertising spending by our clients on our platform.
We expect technology and development expense to increase in absolute dollars as we continue to invest in the development of our platform and related offerings to support additional platform features and functionality, increase the number of advertising inventory and data suppliers and support the anticipated increase in volume of advertising spend by our clients on our platform.
Ability to Expand our Omnichannel Reach, Including CTV, and Innovate across our Platform We enable the purchase of advertising inventory in a wide variety of ad formats and channels, including video (which includes CTV), display, audio, digital-out-of-home, native and social, on a multitude of devices, such as computers, mobile devices, televisions and streaming devices.
Ability to Expand our Omnichannel Reach, Including CTV, and Innovate across our Platform We enable the purchase of advertising inventory in a wide variety of ad formats and channels, including CTV and other video, display, audio, and native, on a multitude of devices, such televisions, streaming devices, mobile devices, computers and digital-out-of-home devices.
Platform operations expense includes hosting costs, personnel costs, data-related costs and amortization of acquired technology and capitalized software costs for the development of our platform. Personnel costs include salaries, bonuses, stock-based compensation and employee benefit costs for personnel who support our platform and provide our clients with platform support.
Platform operations expense includes hosting costs, personnel costs, data-related costs and amortization of capitalized software costs for platform development. Personnel costs include salaries, bonuses, stock-based compensation, employee benefit costs and travel for personnel who support our platform and provide our clients with platform support.
Results of Operations for the Year Ended December 31, 2023 Compared with the Year Ended December 31, 2022 The following discusses the results of our operations for the year ended December 31, 2023 compared with the year ended December 31, 2022.
Results of Operations for the Year Ended December 31, 2024 Compared with the Year Ended December 31, 2023 The following discusses the results of our operations for the year ended December 31, 2024 compared with the year ended December 31, 2023.
As of December 31, 2023, we were in compliance with all covenants. For additional information regarding the Amended Credit Facility , refer to Note 7—Debt . Share Repurchase Program In February 2023, our board of directors approved a share repurchase program with authorization to purchase up to $700 million of our Class A common stock.
As of December 31, 2024, we were in compliance with all covenants. For additional information regarding the Amended Credit Facility , refer to Note 7—Debt . Share Repurchase Program In February 2023, our board of directors approved a share repurchase program to repurchase our Class A common stock.
As a result, future revenue growth depends upon our ability to retain our existing clients and to gain a larger amount of their advertising spend through our platform.
As a result, future revenue growth depends upon our ability to retain our existing clients and to gain a larger amount of their spend through our platform in a highly competitive advertising market.
As of December 31, 2023, we did not have an outstanding debt balance under the Amended Credit Facility. Availability under the Amended Credit Facility was $445 million as of December 31, 2023, which is net of outstanding letters of credit of $5 million. The Amended Credit Facility matures, and all outstanding amounts become due and payable, on June 15, 2026.
As of December 31, 2024, we did not have an outstanding debt balance under the Amended Credit Facility. Availability under the Amended Credit Facility was $442 million as of December 31, 2024, which is net of outstanding letters of credit of $8 million. The Amended Credit Facility matures, and all outstanding amounts become due and payable, on June 15, 2026.
The difference between the effective tax rate in 2022 of 58% and the U.S. federal statutory income tax rate of 21% was primarily due to nondeductible stock-based compensation and the impact of taxes in foreign jurisdictions, partially offset by the impact of excess tax benefits associated with stock-based awards and research and development tax credits.
Provision for Income Taxes The difference between the effective tax rate in 2024 of 23% and the U.S. federal statutory income tax rate of 21% was primarily due to nondeductible stock-based compensation and the impact of taxes in foreign and state jurisdictions, partially offset by the impact of excess tax benefits associated with stock-based awards and research and development tax credits.
We believe the markets outside of the United States (“U.S.”), and in particular across Europe and Asia in markets such as the United Kingdom (“U.K.”), Germany, France, China, Japan, India and Australia, offer opportunities for growth.
We believe the markets outside of the United States, and in particular across Europe and Asia in markets such as the U.K, Germany, France, China, Japan, India and Australia, offer opportunities for growth.
We expect platform operations expenses to increase in absolute dollars in future periods as we continue to experience increased volumes of QPS through our platform and hire additional personnel to support our clients. 47 Table of Contents Sales and Marketing.
We expect platform operations expenses to increase in absolute dollars in future periods as we continue to experience increased volumes of QPS through our platform, invest in our hosting capabilities and hire additional personnel to support our clients. Sales and Marketing.
As the middle class grows abroad, we believe that the global opportunity for programmatic advertising is significant and should continue to expand as publishers and advertisers outside the U.S. seek to adopt the benefits that programmatic advertising provides. To capitalize on this opportunity, we intend to continue investing in our presence internationally.
As the middle class grows abroad, we believe that the global opportunity for programmatic advertising is significant and 46 Table of Contents should continue to expand as publishers and advertisers outside the United States seek to adopt the benefits that programmatic advertising provides. To capitalize on this opportunity, we intend to continue investing in our presence internationally.
We believe that the assumptions and estimates associated with the evaluation of revenue recognition criteria, including the determination of revenue recognition as net versus gross in our revenue arrangements, stock-based compensation expense and income taxes have the greatest potential impact on our consolidated financial statements. Therefore, we consider these to be our critical accounting policies and estimates.
We believe that the assumptions and estimates associated with the evaluation of revenue recognition criteria, including the determination of revenue recognition as net versus gross in our revenue arrangements, stock-based compensation expense and income taxes have the greatest potential impact on our consolidated financial statements.
Revenue as a percentage of gross spend may fluctuate due to the types of services and features selected by our clients through our platform and certain volume discounts.
Revenue as a percentage of gross spend may fluctuate due to the types of services rendered and client-selected features purchased through our platform and certain volume discounts.
For 2022, the provision from income taxes included $48 million of excess tax benefits associated with stock-based awards and $15 million of research and development tax credits. Refer to Note 11—Income Taxes for additional information.
For 2023, the provision from income taxes included $53 million of excess tax benefits associated with stock-based awards and $23 million of research and development tax credits. Refer to Note 11—Income Taxes for additional information.
Judgment is required to determine whether we are the principal and report revenue on a gross basis for Supplier Features or the agent and report revenue on a net basis for the 54 Table of Contents amount of platform fees charged to the client.
Judgment is required to determine whether we are the principal and report revenue on a gross basis for Supplier Components or the agent and report revenue on a net basis for the amount of fees charged to the client.
Macroeconomic Uncertainty and COVID-19 Rising interest rates, inflation, changes in foreign currency exchange rates, strikes and geopolitical developments, as well as the COVID-19 pandemic, including the emergence of variants and subvariants, have resulted, and may continue to result, in a global slowdown of economic activity, which may decrease demand for a broad variety of goods and services, including those provided by our clients, while also disrupting supply channels, sales channels and advertising and marketing activities for an unknown period of time until economic activity normalizes.
Macroeconomic Uncertainty Changes in interest and foreign currency exchange rates, inflation and geopolitical developments have resulted, and may continue to result, in a global slowdown of economic activity, which may decrease demand for a broad variety of goods and services in various industries, including those provided by our clients, while also disrupting supply channels, sales channels and advertising and marketing activities for an unknown period of time until economic activity normalizes.
Our platform allows clients to execute integrated campaigns across ad formats and channels, including video (which includes connected television (“CTV”)), display, audio, digital-out-of-home, native and social, on a multitude of devices, such as computers, mobile devices, televisions and streaming devices.
Our platform allows clients to execute integrated campaigns across ad formats and channels, including CTV and other video, display, audio, and native, on a multitude of devices, such as televisions, streaming devices, mobile devices, computers and digital-out-of-home devices.
Interest expense is mainly related to our debt, which carries a variable interest rate. Interest Income. Interest income is mainly related to our cash, cash equivalents and short-term investments, which carry variable interest rates. Foreign Currency Exchange Loss (Gain), Net. Foreign currency exchange loss (gain), net consists primarily of gains and losses on foreign currency transactions.
Interest expense is mainly related to our debt, which carries a variable interest rate. Interest Income. Interest income is mainly related to our cash, cash equivalents and short-term investments, which carry variable interest rates. Foreign Currency Exchange Loss (Gain), Net.
Actual results may also differ from our estimates based on changes in economic conditions. Such changes could have a substantial impact on the income tax provision. We evaluate the judgments surrounding our estimates and make adjustments, as appropriate, each reporting period.
Actual results may also differ from our estimates based on changes in economic conditions. Such changes could have a substantial impact on the income tax provision. We evaluate the judgments surrounding our estimates and make adjustments, as appropriate, each reporting period. Our income tax provision may also be affected by the timing of vesting and/or exercise of our stock-based awards.
We also intend to invest in technology to further automate our business processes. General and Administrative General and administrative expense decreased by $5 million, or 1%, for the year ended December 31, 2023, as compared to the year ended December 31, 2022.
We also intend to invest in technology to further automate our business processes. General and Administrative General and administrative expense increased by $16 million, or 3%, for the year ended December 31, 2024, as compared to the year ended December 31, 2023.
For 2023, the provision for income taxes included $53 million of excess tax benefits associated with stock-based awards and $23 million of research and development tax credits.
For 2024, the provision for income taxes included $73 million of excess tax benefits associated with stock-based awards and $29 million of research and development tax credits.
Therefore, we expect technology and development expense to increase as we continue to invest in the development of our platform to support additional features and functions, increase the number of advertising and data inventory suppliers and ramp up the volume of advertising spend on our platform. Our development efforts also include additional platform functionality to support our international expansion.
Therefore, we expect technology and development expense to increase as we continue to invest in the development of our platform to support additional platform features and functionality, increase the number of advertising inventory and data suppliers and support the anticipated increase in volume of advertising spend on our platform.
The increase in prepaid expenses and other assets is primarily due to the prepayment of personnel travel costs and certain software, networking and infrastructure costs to support our platform. The increase in accounts payable was due to the growth of our business and the timing of payments to suppliers for the cost of advertising inventory, data and add-on features.
The increase in prepaid expenses and other assets was primarily due to the prepayment of personnel travel costs and certain software, networking and infrastructure costs to support our platform. The increase in accounts payable was due to the growth of our business and the timing of payments to suppliers for Supplier Components.
For additional information regarding income taxes and the assumptions used for determining our income tax provision, as well as our related deferred income tax assets and liabilities, refer to Note 2—Basis of Presentation and Summary of Significant Accounting Policies and Note 11—Income Taxes .
We evaluate the judgments surrounding our estimates and make adjustments, as appropriate, each reporting period. For additional information regarding income taxes and the assumptions used for determining our income tax provision, as well as our related deferred income tax assets and liabilities, refer to Note 2—Basis of Presentation and Summary of Significant Accounting Policies and Note 11—Income Taxes .
The increase in personnel costs was primarily due to headcount growth to support our sales efforts and to continue to develop and maintain relationships with our clients; higher incentive compensation driven by headcount growth and gross spend growth; and return-to-office, travel and employee engagement costs, including in-person events impacted by headcount growth.
The increase in personnel costs was primarily due to headcount growth to support our sales efforts and to continue to develop and maintain relationships with our clients; an increase in incentive compensation driven by gross spend growth; and an increase in travel.
In 2022, cash provided by operating activities of $549 million resulted primarily from net income adjusted for noncash items of $643 million and a net decrease from our operating assets and liabilities of $94 million.
In 2024, cash provided by operating activities of $739 million resulted primarily from net income adjusted for noncash items of $949 million and a net decrease from our operating assets and liabilities of $209 million.
This program does not obligate us to acquire any particular amount of Class A common stock, and may be modified, suspended or terminated at any time at the discretion of our board of directors.
This program does not obligate us to acquire any particular amount of Class A common stock, and may be modified, suspended or terminated at any time at the discretion of our board of directors. As of December 31, 2023, $53 million remained available and authorized for repurchases.
The increase in allocated facilities costs was primarily driven by return-to-office support expenses as well as new leases for additional office space to support our future growth.
Refer to Note 10—Stock-Based Compensation for further detail. The increase in allocated facilities costs was primarily driven by new leases for additional office space to support our future growth as well as office support expenses.
Technology and Development Technology and development expense increased by $92 million, or 29%, for the year ended December 31, 2023, as compared to the year ended December 31, 2022. The increase was primarily due to increases of $84 million in personnel costs, which includes $26 million of stock-based compensation and $7 million in allocated facilities costs.
Technology and Development Technology and development expense increased by $52 million, or 13%, for the year ended December 31, 2024, as compared to the year ended December 31, 2023. The increase was primarily due to increases of $43 million in personnel costs, which included an $18 million increase in stock-based compensation, and $7 million in allocated facilities costs.
The decrease in stock-based costs was primarily driven by a $64 million decrease in stock-based compensation cost related to the CEO Performance Option driven by the graded-vesting attribution method, under which more expense is recognized earlier in the option’s life, as well as a $5 million decrease in ESPP expense driven by the impact of stock price volatility, partially offset by a $22 million increase in expense related to new equity grants.
The decrease in stock-based compensation was primarily driven by a $70 million decrease from the CEO Performance Option driven by the graded-vesting attribution method, under which more expense is recognized earlier in the option’s life, partially offset by a $24 million increase primarily driven by new equity awards as well as the impact of the rising stock price on the ESPP.
Although our clients include some of the largest advertising agencies in the world, we believe there is significant room for us to expand further within these clients and gain a larger amount of their advertising spend through our platform. We also believe that the industry trends noted above will lead to advertisers adopting programmatic advertising through platforms such as ours.
Although our clients include some of the largest advertising agencies and advertisers in the world, we believe there is significant room for us to expand further within these clients and gain a larger amount of their advertising spend through our platform.
The net decrease was primarily due to a $292 million increase in accounts receivable and a $48 million decrease in operating lease liabilities, partially offset by a $187 million increase in accounts payable and a $51 million decrease in prepaid expenses and other assets.
The net decrease was primarily due to a $474 million increase in accounts receivable, a $42 million decrease in operating lease liabilities and a $39 million increase in prepaid expenses and other assets, partially offset by a $299 million increase in accounts payable and a $47 million increase in accrued expenses and other liabilities.
Our growth and the success of our initiatives in newer markets will depend on the continued adoption of our platform by our existing clients, as well as new clients, in these markets. Information about geographic gross billings is set forth in Note 12—Segment and Geographic Information . Seasonality In the advertising industry, companies commonly experience seasonal fluctuations in revenue.
Our growth and the success of our initiatives in newer markets will depend on the continued adoption of our platform by our existing clients, as well as new clients, in these markets. Information about geographic concentrations of our business is set forth in Note 12—Segment and Geographic Information .
The fair value of restricted stock is calculated using the closing market price of our common stock on the date of grant. Stock-based compensation expense related to restricted stock and stock options is recognized on a straight-line basis over the requisite service periods of the awards, which is generally four years.
Stock-based compensation expense related to restricted stock and stock options is recognized on a straight-line basis over the requisite service periods of the awards, which is generally four years.
Cash Flows The following table summarizes our cash flows for the periods presented (in thousands): Year Ended December 31, 2023 2022 Net cash provided by operating activities $ 598,322 $ 548,734 Net cash used in investing activities $ (107,593) $ (304,374) Net cash provided by (used in) financing activities $ (626,106) $ 31,992 Operating Activities Our cash flows from operating activities are primarily influenced by growth in our operations, increases or decreases in collections from our clients and related payments to our suppliers for advertising inventory and data.
Cash Flows The following table summarizes our cash flows for the periods presented (in thousands): Year Ended December 31, 2024 2023 Net cash provided by operating activities $ 739,456 $ 598,322 Net cash used in investing activities $ (157,513) $ (107,593) Net cash used in financing activities $ (107,609) $ (626,106) 52 Table of Contents Operating Activities Our cash flows from operating activities are primarily influenced by growth in our operations, increases or decreases in collections from our clients and related payments to our suppliers for Supplier Components.
Stock-Based Compensation Stock-based compensation expense related to stock options, restricted stock awards and units (collectively, “restricted stock”), and awards granted under our employee stock purchase plan (“ESPP”) is measured and recognized in our consolidated financial statements based on the fair value of the awards granted.
Stock-Based Compensation Stock-based compensation expense related to stock options, restricted stock awards and units (collectively, “restricted stock”), and awards granted under the ESPP is measured and recognized in our consolidated financial statements based on the fair value of the awards granted. In October 2021, we granted the CEO Performance Option under the 2016 Incentive Award Plan.
Objectively verifiable evidence includes our realization of tax attributes, assessment of tax credits and utilization of net operating loss carryforwards during the year. Refer to Note 11—Income Taxes for additional information.
Objectively verifiable evidence includes our realization of tax attributes, assessment of tax credits and utilization of net operating loss carryforwards during the year.
Trends, Opportunities and Challenges The growing digitization of media and fragmentation of audiences has increased the complexity of advertising, and thereby increased the need for automation in ad buying, which we provide on our platform. In order to grow, we will need to continue to develop our platform’s programmatic capabilities and expand our advertising inventory and data offerings.
Trends, Opportunities and Challenges The growing digitization of media and fragmentation of audiences has increased the complexity of advertising, and thereby increased the need for automation in ad buying, which we provide on our platform.
For the year ended December 31, 2023, we generated $598 million of cash flows from operating activities. We believe our existing cash and cash equivalents, cash flow from operations and our undrawn available balance under our Amended Credit Facility will be sufficient to meet our working capital requirements for at least the next 12 months.
We believe our existing cash and cash equivalents, cash flow from operations and our undrawn available balance under our Amended Credit Facility will be sufficient to meet our working capital requirements and investments we make from time to time for at least the next 12 months.
We anticipate that our operating expenses will continue to increase significantly in the foreseeable future as we invest in platform operations and technology and development to enhance our product features, including programmatic buying of CTV ad inventory, and in sales and marketing to acquire new clients and reinforce our relationships with existing clients.
We anticipate that our operating expenses will continue to increase in the foreseeable future as we invest in platform operations and technology and development to enhance our platform, including programmatic buying of CTV ad inventory, and hosting capabilities.
Our effective tax rate differs from the U.S. federal statutory tax rate of 21% primarily due to nondeductible stock-based compensation, tax benefits associated with employee exercises of stock options and vesting of restricted stock units, research and development tax credits, foreign tax rate differences and state taxes.
The extent of the impact may be subject to volatility resulting from changes in our stock price and volume of transactions by employees. 48 Table of Contents Our effective tax rate differs from the U.S. federal statutory tax rate of 21% primarily due to research and development tax credits, tax benefits associated with employee exercises of stock options and vesting of restricted stock, nondeductible stock-based compensation and foreign tax rate differences and state taxes.
In 2023, we used $626 million of cash in financing activities, consisting of $647 million of cash paid for repurchases of Class A common stock and $79 million of taxes paid for restricted stock award settlements, partially offset by $61 million of proceeds from stock option exercises and $38 million of proceeds from the employee stock purchase plan.
In 2024, we used $108 million of cash in financing activities, consisting of $235 million of cash paid for repurchases of Class A common stock and $139 million of taxes paid for restricted stock award settlements, partially offset by $216 million of proceeds from stock option exercises and $50 million of proceeds from the ESPP.
We also intend to invest in technology to further automate our business processes. General and Administrative.
Our development efforts also include additional platform functionality to support our international expansion. We also intend to invest in technology to further automate our business processes. General and Administrative.
We are closely monitoring the effect that current macroeconomic factors may have on our working capital requirements. 51 Table of Contents Credit Facility On June 15, 2021, we and a syndicate of banks, led by JPMorgan Chase Bank, N.A., as agent, entered into a Loan and Security Agreement (the “Credit Facility”).
Credit Facility On June 15, 2021, we and a syndicate of banks, led by JPMorgan Chase Bank, N.A., as agent, entered into a Loan and Security Agreement (the “Credit Facility”).
Our future growth will depend on our ability to maintain and grow the inventory and spend across these channels, in addition to continued growth in CTV. Our future growth will also depend on our ability to continue innovating and improving the technology underlying our platform and related offerings and enhancing their features and functionality.
Our future growth will depend on our ability to maintain and grow the inventory and spend across these channels, in addition to continued growth in CTV.
The increase in stock-based compensation was primarily due to new equity grants, partially offset by the impact of stock price volatility on ESPP expense. We expect sales and marketing expenses to increase in absolute dollars in future periods, as we focus on increasing the adoption of our platform with existing and new clients and expanding our international business.
The increase in marketing costs was primarily due to an increase in marketing campaigns, events, sponsorships and client engagement. We expect sales and marketing expenses to increase in absolute dollars in future periods, as we focus on increasing the adoption of our platform with existing and new clients and expanding our international business.
In addition, if our operating performance during the next 12 months is below our expectations, our liquidity and ability to operate our business could be adversely affected.
In addition, if our operating performance during the next 12 months is below our expectations, our liquidity and ability to operate our business could be adversely affected. We are closely monitoring the effect that current macroeconomic factors may have on our working capital requirements.
In addition, we expect seasonality to impact cash flows from operating activities on a sequential quarterly basis during the year. 52 Table of Contents In 2023, cash provided by operating activities of $598 million resulted primarily from net income adjusted for noncash items of $721 million and a net decrease from our operating assets and liabilities of $123 million.
In 2023, cash provided by operating activities of $598 million resulted primarily from net income adjusted for noncash items of $721 million and a net decrease from our operating assets and liabilities of $123 million.
We also generate revenue from providing data and other value-added services and platform features. 44 Table of Contents Executive Summary Highlights Year Ended December 31, Change 2023 2022 $ % (in millions, except percentages) Revenue $ 1,946 $ 1,578 $ 368 23 % Net income $ 179 $ 53 $ 126 238 % Gross spend (1) $ 9,611 $ 7,741 $ 1,870 24 % ________ (1) For internal management purposes, we utilize gross spend as a metric to assess our market share and scale, plan for optimal levels of support for our clients and measure our growth from existing clients.
We generate revenue by charging our clients a platform fee generally based on a percentage of our clients’ total spend on our platform and from providing value-added services and data to support their advertising campaigns. 44 Table of Contents Executive Summary Highlights Year Ended December 31, Change 2024 2023 $ % (in millions, except percentages) Revenue $ 2,445 $ 1,946 $ 499 26 % Net income $ 393 $ 179 $ 214 120 % Gross spend (1) $ 12,041 $ 9,611 $ 2,430 25 % ________ (1) For internal management purposes, we utilize gross spend as a metric to assess our market share and scale, plan for optimal levels of support for our clients and measure our growth from existing clients.
The decrease was primarily due to a $47 million decrease in stock-based compensation, partially offset by increases of $36 million in personnel costs and $5 million in allocated facilities costs.
The increase was primarily due to increases of $84 million in personnel costs, which included a $23 million increase in stock-based compensation, $10 million in allocated facilities costs and $5 million in marketing costs.
In addition, we expect to continue making investments in our infrastructure, including our information technology, financial and administrative systems and controls, to support our growing operations.
We also anticipate that our sales and marketing expenses will continue to increase to acquire new clients and reinforce our relationships with existing clients. In addition, we expect to continue making investments in our infrastructure, including our information technology, financial and administrative systems and controls to support our growing operations.
For the Year Ended December 31, 2023 2022 (in thousands) (% of Revenue) (in thousands) (% of Revenue) Revenue $ 1,946,120 100 % $ 1,577,795 100 % Operating expenses: Platform operations 365,598 19 % 281,123 18 % Sales and marketing 447,970 23 % 337,975 21 % Technology and development 411,794 21 % 319,876 20 % General and administrative 520,278 27 % 525,167 33 % Total operating expenses 1,745,640 90 % 1,464,141 93 % Income from operations 200,480 10 % 113,654 7 % Total other income, net (67,515) (3) % (13,716) (1) % Income before income taxes 267,995 14 % 127,370 8 % Provision for income taxes 89,055 5 % 73,985 5 % Net income $ 178,940 9 % $ 53,385 3 % __________________ Note: Percentages may not sum due to rounding.
For the Year Ended December 31, 2024 2023 (in thousands) (% of Revenue) (in thousands) (% of Revenue) Revenue $ 2,444,831 100 % $ 1,946,120 100 % Operating expenses: Platform operations 472,012 19 % 365,598 19 % Sales and marketing 546,517 22 % 447,970 23 % Technology and development 463,319 19 % 411,794 21 % General and administrative 535,816 22 % 520,278 27 % Total operating expenses 2,017,664 83 % 1,745,640 90 % Income from operations 427,167 17 % 200,480 10 % Total other income, net (80,135) (3) % (67,515) (3) % Income before income taxes 507,302 21 % 267,995 14 % Provision for income taxes 114,226 5 % 89,055 5 % Net income $ 393,076 16 % $ 178,940 9 % __________________ Note: Percentages may not sum due to rounding.
For example, many advertisers allocate the largest portion of their budgets to the fourth quarter of the calendar year in order to coincide with increased holiday purchasing. Historically, the fourth quarter of the year reflects our highest level of advertising activity and the first quarter reflects the lowest level of such activity.
Seasonality In the advertising industry, companies commonly experience seasonal fluctuations in revenue. For example, many advertisers allocate the largest portion of their budgets to the fourth quarter of the calendar year in order to coincide with increased holiday purchasing.
The increase in hosting costs was primarily attributable to support related to the increased use of our platform by our clients and by investment in new data centers to support our platform. The increase in personnel costs was primarily due to headcount growth as well as return-to-office, travel and employee engagement costs, including in-person events impacted by headcount growth.
The increase in hosting costs was primarily attributable to support costs related to the increased use of our platform by our clients, increased use of features by our technical teams in support of our platform and investment in new data centers to support the continued growth of our platform.
See “ Item 1A. Risk Factors ” in Part I of this Annual Report on Form 10-K for further discussion of the adverse impacts of macroeconomic uncertainty on our business. During the second half of 2022, many of our employees adopted a hybrid work schedule consisting of both in-person work and working from home, primarily beginning in September 2022.
See “ Item 1A. Risk Factors ” in Part I of this Annual Report on Form 10-K for further discussion of the adverse impacts of macroeconomic uncertainty on our business.
The increase in marketing costs was primarily due to an increase in marketing campaigns, events, sponsorships and client engagement. The increase in allocated facilities costs was primarily driven by return-to-office support expenses as well as new leases for additional office space to support our future growth.
The increase in stock-based compensation was primarily driven by new equity awards and the impact of the rising stock price on the ESPP. The increase in allocated facilities costs was primarily driven by new leases for additional office space to support our future growth as well as office support expenses.

… 62 more changes not shown on this page.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

6 edited+0 added−0 removed0 unchanged
Biggest changeThese risks include primarily interest rate and foreign currency exchange rate risk. 55 Table of Contents Interest Rate Risk We are exposed to market risk from changes in interest rates on our Amended Credit Facility, which accrues interest at a variable rate, and our short-term investments. No amount was owed on our Amended Credit Facility as of December 31, 2023.
Biggest changeInterest Rate Risk We are exposed to market risk from changes in interest rates on our Amended Credit Facility, which accrues interest at a variable rate, and our short-term investments. No amount was owed on our Amended Credit Facility as of December 31, 2024. We have not used any derivative financial instruments to manage our interest rate risk exposure.
Foreign Currency Exchange Rate Risk We have foreign currency exchange rate risk related to transactions denominated in currencies other than the U.S. Dollar, principally the Euro, British Pound, Australian Dollar, Canadian Dollar, Japanese Yen, Indian Rupee, Indonesian Rupiah, Hong Kong Dollar and Singapore Dollar. The volatility of exchange rates depends on many factors that we cannot forecast with reliable accuracy.
Foreign Currency Exchange Rate Risk We have foreign currency exchange rate risk related to transactions denominated in currencies other than the U.S. Dollar, principally the Euro, British Pound, Canadian Dollar, Australian Dollar, Japanese Yen, Indian Rupee, Indonesian Rupiah, Hong Kong Dollar and Singapore Dollar. The volatility of exchange rates depends on many factors that we cannot forecast with reliable accuracy.
We enter into forward contracts or other derivative transactions in an attempt to hedge our foreign currency risk. There can be no assurance that such transactions will be effective in hedging some or all of our foreign currency exposures, and under some circumstances they could generate losses. 56 Table of Contents
We enter into forward contracts or other derivative transactions in an attempt to hedge our foreign currency risk. There can be no assurance that such transactions will be effective in hedging some or all of our foreign currency exposures, and under some circumstances they could generate losses for us. 56 Table of Contents
As of December 31, 2023, an immediate 10% adverse change in foreign exchange rates on foreign-denominated accounts would result in a foreign currency loss of approximately $38 million. In the event our non-U.S. Dollar denominated sales and expenses increase, our operating results may be more greatly affected by exchange rate fluctuations.
As of December 31, 2024, an immediate 10% adverse change in foreign exchange rates on foreign-denominated accounts would result in a foreign currency loss of approximately $36 million. In the event our non-U.S. Dollar denominated sales and expenses increase, our operating results may be more greatly affected by exchange rate fluctuations.
Item 7A. Quantitative and Qualitative Disclosure about Market Risk We have operations within the U.S. and internationally, and we are exposed to market risks in the ordinary course of our business.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk We have operations within the United States and internationally, and we are exposed to market risks in the ordinary course of our business. These risks include primarily interest rate and foreign currency exchange rate risk.
We have not used any derivative financial instruments to manage our interest rate risk exposure. Based upon the short-term investment amount as of December 31, 2023, a hypothetical one percentage point increase or decrease in the interest rate would result in a corresponding increase or decrease in investment income of approximately $5 million annually.
Based upon the short-term investments amount as of December 31, 2024, a hypothetical one percentage point increase or decrease in the interest rate would result in a corresponding increase or decrease in investment income of approximately $6 million annually.

Other TTD 10-K year-over-year comparisons