Thank you, operator. Hello, and good afternoon to everyone.

Welcome to the Trade Desk fourth quarter 2020 earnings conference call. On the call today are Founder and CEO, Jeff Green and Chief Financial Officer, Blake Grayson.

A copy of our earnings press release can be found on our Web site at thetradedesk.com in the Investor Relations section. Before we begin, I would like to remind you that except for historical information some of the discussion and our responses in Q&A may contain forward-looking statements, which are dependent upon certain risks and uncertainties.

In particular, our expectations around the impact of the COVID-19 pandemic on our business and results of operations are subject to change. Should any of these risks materialize or should our assumptions prove to be incorrect, actual financial results could differ materially from our projections or those implied by these forward-looking statements.

I encourage you to refer to the risk factors referenced in our press release and included in our most recent SEC filings. In addition to reporting our GAAP financial results, we present supplemental non-GAAP financial data.

A reconciliation of the GAAP and non-GAAP measures can be found on our earnings press release. We believe that providing non-GAAP measures combined with our GAAP results provide a more meaningful representation of the company's operational performance.

I will turn the call over to Founder and CEO, Jeff Green. Jeff?

Hello, and thank you, everyone, for joining us. 2020 was a uniquely challenging year from a variety of dimensions.

At the same time, however, 2020 also represented an inflection point for our company. It was a year that advertisers became more deliberate with every advertising dollar shifting spend towards the open Internet.

There were a lot of drivers of change in 2020, which included an unprecedented global pandemic, the rise of social justice issues, a divisive election in the United States and stronger economic pressures and higher levels of uncertainty weighing on nearly all of the consumers in the world. These drivers of change have already manifested themselves for marketers, whether it's the accelerated shift to CTV or the demand for better cross-device measurement and ROI, or brands and advertisers reassessing the value of user-generated content in their now more deliberate marketing plans.

I want to spend a few minutes today explaining what the 2020 inflection point means for our company and our industry moving forward. 2020 was a year that the world had more uncertainty and more change than usual.

While at TTD, like the rest of the world, we'd like to get back to a world that is a little more predictable and feels a bit more like what we called normal in 2019. So much happened in 2020, both inside and outside of our company that better positions the Trade Desk for a bigger and brighter future.

So I need to give you my perspective on what happened in 2020 to show why I believe we're so well positioned in 2021 and beyond, as the digital advertising market matures and more marketers gravitate to the open Internet. Let me start with the highlight numbers.

Spend on our platform in 2020 was nearly $4.2 billion, a record. Fourth quarter spend alone was over $1.6 billion, also a record.

CTV spend more than doubled for the year. And once again, despite all the uncertainty of the year, we delivered strong profitability highlighting the operating leverage we have in our business.

We often benchmark our results against the Rule of 40 of other high-growth companies of our size, where the health of a technology company is expressed as the sum of a company's growth rate and EBITDA margin. 40% is healthy.

In 2020, we finished at over 60%, all while we are investing in our future as fast as we can. According to eMarketer, our total global ad spending declined 4.5% last year.

Meanwhile, spend on our platform grew 34%. Even amid the uncertainty of 2020, where all marketers reevaluated their ad campaigns in some way, shape or form, they continued to shift, spend and invest in ad opportunities that are dynamic and measurable.

We were able to drive this performance and take so much share, even as some of the verticals we serve such as travel, auto, entertainment and real estate continued to be in a state of flux. They have all yet to fully recover.

Obviously, we benefited from the surge in political advertising last year, which represented a high single-digit contribution to our growth in the fourth quarter. And by the way, we're very proud of the work we did in political last year, especially our role in representing a better process for all political candidates.

As many companies agonize over the role they should play, we were clear from the outset. We are an objective and independent platform open to register candidates on all sides.

I continue to believe that the data-driven advertising has an important role to play in the political arena. On a platform such as ours, candidates are more likely to focus on the substantive issues that voters care about, leveraging premium inventory versus the divisive that user-generated content often found on some social media platforms and some UGC video platforms.

But even as we point out the political advertising surge we saw in 2020, political tilled a hole for Trade Desk that was left by other advertisers and other important verticals that have not yet returned to their pre-pandemic levels. We expect them to improve through this year, hopefully.

We start to return to some sense of normal. More broadly, I fully expect that the trends we saw in 2020 continue to accelerate in the years ahead as advertisers increasingly gravitate to our platform.

To give you a sense of these trends and why I'm so optimistic, I want to cover three main areas. First, I'd like to take a look at TV and how 2020 was a turning point for many marketers and their massive TV ad campaigns.

What's happening in TV is not limited to that channel, it's driving change across the ad ecosystem. Second, it's important to focus for a minute on the future of relevant advertising and in particular, how the industry is thinking about identity.

And third, and finally, I want to summarize how these factors, among others, are critical as the ad industry starts to gravitate toward the open Internet, a trend that I expect to accelerate in years ahead. So first, the changing nature of TV.

We've talked a lot over the last 12 months about how the pandemic accelerated trends that were already underway, but we couldn't have predicted quite how sharp that acceleration would be. With most consumers working from home, not surprisingly, more and more of them are shifting from cable to streaming TV.

The on-demand nature of streaming makes for a better experience. However, the new economic pressure is weighing on the average consumer are also forcing an even bigger change.

Whether you look at our numbers or MAGNA Global's or eMarketer’s, the trend is undeniable. We are right around that point where there are more U.S.

households without a cable subscription than those with one, and that trend is not reversing. Dig a little deeper and you'll find that younger generations, the 18 to 34-year olds, highly coveted by many advertisers have even less interest in cable.

And if you look beyond the U.S. at Asia, for example, you'll see in many markets that the notion of a big screen in the living room is less conventional.

In Asia, premium video is often consumed on a mobile device. But perhaps more important than all that data is, where we go from here, because 2020 was a wake up call to the advertising industry, when it came to TV.

I can't put it any better than Mark Pritchard did, the Chief Brand Officer of P&G, the world's largest advertiser. I was on stage with him at CES a few weeks ago, virtually, of course, and he talked about how 2020 has forced advertisers into a world of ''constructive disruption''.

He highlighted the upfront process, which he described as a hold over from the 1950s where TV ad campaigns were tied to new vehicle launches every year – every fall. He talked about the need to be more flexible, more real-time to bring the same measurement techniques we've grown accustomed to in digital to the world of TV.

Ultimately, he and I believe we are heading toward an inevitable future, where all of advertising is, and I quote using his words, digital, programmatic, data-driven and automatic. By the way, he's not alone in this thinking about the upfronts.

According to our research, 60% of linear TV ad buyers are planning to spend less at the upfront this year for these very same reasons. One of them, the Head of TV ad buying at a global life sciences company told us that, '' traditional upfront media buying is the most disconnected area of media and business today''.

And it's not just advertisers who are thinking differently, the content providers are too. And on that same stage, Linda Yaccarino of NBC, talked about how CTV has freed the network of the, “handcuffs of legacy stuff”, that was preventing them from delivering on the new data-driven needs of their advertisers.

It's liberating for the entire market, and that's one reason why CTV stood out in a year when across the industry overall ad spending was down. CTV was the strongest growth segment of the global ad market last year and the fastest growing channel on our platforms as well, and that's because advertisers see their customers moving to streaming platforms and they are learning that CTV offers a new kind of value.

Advertisers can apply data to drive more precision and localized targeting than linear. They can measure performance in real time across platforms.

They can pivot campaigns quickly based on performance feedback and they can experiment with new formats. In a year when brands are challenged to adopt messaging, often on a highly local basis based on rapidly changing circumstances, all of these factors become compelling.

Take a large US automotive research and e-commerce brand that needs to navigate the uncertainty of 2020 and in particular, the economic fallout on their business because of the pandemic. This company needed more flexibility and agility.

Throughout the year, they pulled as many dollars as they could out from their existing underperforming upfront contracts and linear budgets and move those dollars to CTV on our platform. With their agency, they chose The Trade Desk platform for two main reasons; one was the ability to apply data-driven decisioning and measurement in real-time in order to adapt to the rapidly changing market conditions; the second was to access premium inventory at scale in specific local markets on networks such as NBC and Discovery.

This is not an isolated case. In fact, in 2020, more than 1,000 brands spent at least $100,000 on CTV on our platform.

Those brands spending more than $1 million on our platform in 2020, more than doubled from a year ago. When you factor in that CTV now has the scale to provide an alternative to the divisive user generated content that often populates big social and video platforms, you can see why CTV was the largest growth segment of the global advertising market last year.

But let me take this one step further. Until 2020, TV was the last bastion of analog advertising.

At the same time, it is also the largest segment of the advertising pie. Marketers know that video is the best channel to win the hearts and minds of consumers.

TV is where marketers spend the most money and is often where the most creative talent resides within a brand. It's also where the power centers of an agency typically reside.

The market opportunity here is significant. Eventually, all TV advertising will be digital and programmatic.

In fact, I believe premium video, in all of its form, including CTV, will be half of the $1 trillion advertising market in the not too distant future. CTV is a Trojan horse for the acceleration of programmatic across the ad industry, and we're starting to see that play out now.

Which brings me to my second topic, the future of relevant advertising and how the industry is coming together to forge a new path for identity. This is not simply a question of updating you about UID 2.0.

I'll get to that. But before I do, I'm not sure we've been clear enough about a key point.

Right now, many people are debating what identity solution has the best chance of replacing third party cookies. But I feel like we're having the wrong conversation.

Instead, we should be focused on the question of how to make the open Internet a symphony that maximizes the talents of every orchestra member, playing together, rather than looking for a single solution, the most impressive work is done by those of us making solutions interoperable, creating a currency that can be used by all reputable players and upgrading all the weaknesses of cookies. UID 2.0 is the new common currency of the open Internet, one that respects privacy and improves consumer controls, while preserving the value exchange of relevant advertising.

UID 2.0 is also free. And as we speak, it is being integrated into the transactional pipes of the entire open Internet.

And that common currency is not just centered on if this new currency allows for effective comparison and measurability across all advertising channels across the open Internet. Ultimately, that's what advertisers care about most.

If you were to ask most of them, they'd probably say they expect the identity piece to get fixed and they expect the key industry players, such as The Trade Desk, to figure that out for them. What advertisers really want is a trusted system that solves the identity problem while also solving for the measurement opportunity.

And if we get that right, once again, we prove out the value of the open Internet versus the limitations of walled gardens, where measurement is typically some variation of grading your own homework. And it's also why I'm so excited about the progress the industry has made with Unified ID 2.0.

Pretty much the entire ad tech ecosystem has signed on. Among SSPs, Index Exchange, Magnite, PubMatic, OpenX and SpotX are all on board.

Criteo has become a great partner. Like us, they're all in on UID 2.0.

Among data connectivity companies, LiveRamp and Neustar are integrating UID. Publishers such as Mediavine and Fubo TV are now part of the UID community, along with The Washington Post and their Zeus Technology platform that powers over 100 other media publishers, including some of the leading daily newspapers in the United States.

Those are just the ones we've announced. There are many others that we're working with actively, including publishers, advertisers, partners, large media companies, data companies and even other DSPs.

But perhaps most telling about the future common currency of the Internet is the work we're doing with Nielsen. As you know, Nielsen is the gold standard in media measurement, especially for TV.

But as the media world becomes more fragmented and more digital, they are overhauling their technology to stay at the bleeding edge. And Unified ID 2.0 will be a core element of that new offering.

Why? Because like us, Nielsen believes that UID 2.0 will become the new common currency of the open Internet.

They understand what an upgrade this represents to cookies. In addition to the wide ranging industry support for Unified ID 2.0, there's also been a lot of progress around independent governance.

As we have said from the beginning, an identity solution is much bigger than any one company, including The Trade Desk. As you may have seen, UID 2.0 has been submitted to the Partnership for Responsible Addressable Media, or PRAM, for further community development and management.

PRAM comprises the biggest advertising brands, the major agencies and the leading ad tech players in the world. PRAM was designed to oversee the administration of new identity tools that advance the open Internet, such as UID.

Governance of UID will ultimately be federated. And Prebid, an industry organization committed to transparency and fairness in header bidding, has already signed on to be one of the governing organizations of UID.

What's also been very interesting about the evolution of UID 2.0 is not just the enthusiasm in the United States but also demand to understand its application around the world. And to understand the importance of the interest worldwide, you need to appreciate how various privacy and consumer protection regulations have come into force around the world.

Take GDPR in Europe, for example. GDPR was an important initiative to craft new legislation to protect consumers as the Internet started to reach into every aspect of our lives.

At its core, GDPR, like a great deal of privacy regulation we see around the world, is based on important philosophical principles. But it's not necessarily prescriptive.

It's up to market participants to interpret GDPR and figure out what to do. Without prescription and without case law, everyone is working on solutions that meet requirements and building that important body of use cases.

In my view, Unified ID 2.0 comes closest to meeting the evolving philosophical principles that we see getting legislated around the world, including in Europe. Not simply because it's highly secure and it moves control to the consumers' hands, but also because Unified ID solves for the other key aspect of becoming a common currency of digital advertising.

Unified ID 2.0 also allows for cross channel measurement across the entire open Internet. I am very deliberately focused on CTV and identity so far because they are transformative and how we think about the value of the open Internet versus the smaller, less competitive Internet that is primarily run inside of walled gardens, which is the third main point I want to make with you this afternoon.

Until now, when we think about every new dollar that goes into digital advertising, we think about that dollar going into a Facebook or a Google first. Because these platforms are easy, there's easy access to scale.

The open Internet has traditionally received the leftovers, but that dynamic is starting to change. At end state, the first dollar goes to the open Internet.

So why am I so optimistic about this? Because in 2020, we started to see the signs of the tide turning.

As it continues, this won't happen overnight. It's going to take years, but it is starting to happen.

You only have to listen to Marc Pritchard and thousands of other major brand marketers who we interact with every day, hear them talk about the importance of being deliberate, data driven and measurable across multiple platforms and channels. That can really only happen on the open Internet.

Walled gardens are not the easy on-ramp for CTV. In fact, they often don't have access to the premium content most valued by marketers.

And often, targeting is limited and results are too. Relatedly, let's consider what happened in UGC in 2020.

Last year, brands became more aware than ever that their ads may be showing up against questionable use of generated content and the device and viral discussions that UGC content can sometimes incite. Advertisers want an alternative.

And in 2020, they started to look at CTV as the scalable brand safe platform that gets them the same reach with better performance measurement. UID adoptions are even better than expected.

Publishers, brands, suppliers, data companies, partners and even competitors, everyone wants the open Internet to operate with the highest level of privacy and consumer controls, while also preserving the value exchange of relevant advertising through cross channel measurement. UID cracks the code on that and it's inspiring to see the industry rally around a solution bigger than any one company.

Now UID won't exist in isolation. In fact, I would argue that there will be a handful of other identity technologies in the market.

That's okay. It's even good because the focus is on interoperability.

But perhaps nothing highlights this shift more than the news we announced a few weeks ago around our new partnership with Walmart. The work we're doing with Walmart is actually indicative of an entire industry that is starting to shift to a data-first marketing model.

This is significant for our business because, according to some estimates, the TAM for shopper marketing is well over $100 billion. Let me use Walmart to explain.

Walmart is the world's largest retailer after all, with the world's largest supply of shopper data, across a massive array of consumer products. And for the first time with this partnership, they are making that shopper data available to advertisers.

So Walmart suppliers, who happen to be among the world's leading advertisers, can now run digital ads, whether on mobile, desktop, CTV, audio, et cetera, and understand how shoppers are reacting to those apps. By that, I mean which ones led to sales and when.

And advertisers can then refine those ad campaigns based on which ones work best with which kind of customers, at what times and what channels and what regions and near which stores. For consumer packaged goods companies, this is something of a holy grail.

They can adapt campaigns on the fly based on the data they get back on shopper reactions. So the advertising process becomes more refined, more effective and more valuable.

This is especially true in Walmart's case because not only are they a fast growing online retailer, but Walmart is also the largest brick and mortar retailer in the world. The integrated approach to data and measurement will apply to both aspects of their business.

If you're a major CPG company, you may have many products such as Tide laundry detergent or a Hershey chocolate bar that are still sold primarily in the store. So this integrated approach is critical.

Because we are talking about some of the most valuable shopper data in the world, Walmart wants to make sure that data is managed securely with all the appropriate consumer privacy controls. They could have built their own platform, which makes us even more honored that we have forged a partnership and are leveraging our scale together.

Instead, they are focused on the combination of Walmart shopper data and the technology and performance of The Trade Desk platform. Not only does our platform provide the data controls Walmart demands, they know we are an independent and objective company and they know their supplier clients already work with us and trust us.

And as I said, it's not just Walmart that's driving this shift in the retail industry, most major retailers recognize the value and power of their shopper data. Those retailers are also working with us to liberate data so their suppliers can market more effectively in a secure privacy safe way.

The go to market approach for each retailer may be slightly different, but the common thread is that these retailers understand that the only way to realize the full value of their data is on the open Internet. There's no point building walls around it.

Brands will, over time, always gravitate to the places where they can be deliberate and where they can measure ad impressions across channels. I'd like to wrap this up by tying these all together.

As I said, marketers are driving a game changing revolution in TV advertising based on conviction that they need to be more data driven, more deliberate and more measurable. Partly driven by the shift in TV advertising, major brands are now talking about the future being data driven and programmatic across all channels.

I hear it from every customer I talk to across all industries. That new data driven focus is also driving momentum around new identity solutions that not only boost consumer privacy, but also become a common currency that is key to cross channel measurement.

And you can see this playing out as companies such as Walmart and the retail industry more broadly are standardizing on The Trade Desk as they overhaul their digital marketing business. It all points to the growing primacy of the open Internet and that's where we win.

As this shift accelerates in the years ahead, and it will, we have the opportunity to become the de facto demand side platform for the open Internet. I am confident about our future.

Now everything won't happen overnight or in one quarter, of course, but we've spent 10 years getting ready for this opportunity. It's why we continue to invest in our platform with the biggest product launch in our history coming later this year, which is all centered on helping our clients drive value from their data across advertising channels.

It's why we continue to focus so aggressively on international growth. This is a global shift.

And I'm very excited that our international growth is now outpacing our North America growth. That's a very positive sign that we are investing in the right way in the right places.

And it's why we continue to work hard to drive the industry forward with initiatives such as Unified ID 2.0. This work is critical to build trust as the shift to the open Internet unfolds.

It raises all boats, including ours. Our focus allows us to continue to exceed our expectations.

As I said at the outset, 2020 was a very challenging year but it was also a transformative one for us and our industry. I could not be more excited about building on our progress in 2021.

With that, let me hand it over to Blake to cover the financials.

Thank you, Jeff, and good afternoon, everyone. As Jeff mentioned, we finished 2020 incredibly strong, capping off a solid year for our business despite the challenges faced around the world.

Q4 revenue was $320 million, a 48% increase from a year ago. For full year 2020, revenue was $836 million, a 26% increase from a year ago.

We have been encouraged to see advertisers accelerate their shift to data driven advertising in the second-half of 2020. Our results reflect the ongoing strength of programmatic advertising and the value that The Trade Desk provides to thousands of agencies and brands as they work to connect with their customers across our platform every day.

With the strong top line performance in Q4, we generated $153 million in adjusted EBITDA or about 48% of revenue. As you have seen historically, when we outperform on the top line, we often see that outperformance drop down to EBITDA, which it did again in Q4.

EBITDA continues to benefit from temporarily lower than expected operating expense growth, partly driven by the impacts related to COVID-19. Even recognizing that, I am proud of our continued ability to substantially grow our top line revenue, while also producing meaningfully positive EBITDA.

From the channel perspective, video, which includes CTV, led our growth in Q4, followed by audio, mobile and display, which all grew in the double digits on a year-over-year basis. As Jeff had mentioned, connected TV continued to be our fastest growing channel.

Geographically in Q4, similar to last quarter, North America represented 88% of spend and international represented 12% of spend. All of our major regions, North America, APAC and Europe, grew spend well into the double digits again year-over-year in Q4.

One anecdote we're excited about are early indicators of acceleration in Europe. Gross spend growth in Europe accelerated every month in Q4.

And for the full quarter, actually grew faster than North America after excluding spend associated with the US Presidential election. It is still early days for us internationally, but we continue to expand our leadership team and are optimistic about our trends there.

In terms of our verticals that represent at least 1% of our spend, nearly every category improved during the quarter; health and fitness, our largest vertical in 2020; shopping, which benefited from the holiday season; food and drink and home garden all performed very well. Automotive was also particularly encouraging as it bounced back quite a bit in Q4 versus the prior quarter.

Travel continues to stand out in terms of delayed recovery. And while it improved slightly from Q3, it still has a lot of room for growth that we expect will follow as the world returns to normal, whenever that happens.

And finally, as you can imagine, we had strong US political spend during the quarter. In Q4, political spend represented a high single digit percent share of our spend.

For the full year 2020, political spend represented a mid-single digit percent share of our spend. And importantly, this impact was felt beyond just the second-half of the year.

For example, the democratic primary races drove solid spend for us in Q1 as the month of February, in particular, was one of our stronger political spend months during the year. Operating expenses were $213 million in Q4, up 31% year-over-year.

I would like to remind you that due to the virtual environment, our operating expense growth continues to benefit from lower than normal employee support costs, including travel and corporate events, which are running significantly lower than the prior year. Income tax was a benefit of $45 million in the quarter, mainly due to the tax benefits associated with employee stock based awards, the timing of which can be variable.

Adjusted net income for the quarter was $185 million or $3.71 per fully diluted share. Net cash provided by operating activities was a record $168 million for Q4 and free cash flow was $149 million.

The primary drivers were the increase in net income as well as a number of efficiencies gained in working capital, some that occurred throughout the year, including improvement in collections activity, better alignment of payables to receivables and shorter payment terms, primarily due to the political advertising environment. DSOs exiting the quarter were 121 days, up three days from a year ago.

DPOs were 101 days, up seven days from a year ago. We exited Q4 with a strong cash and liquidity position.

Our balance sheet had $624 million in cash, cash equivalents and short term investments at the end of the quarter. In early October, we paid off the remaining $72 million of our revolving line of credit that we drew down in the very early days of COVID-19 out of an abundance of caution.

At the end of the quarter, we had no revolver debt on the balance sheet. Turning to our outlook for the first quarter.

During the first month and a half, spend is strong, and we're off to a great start to the year. We estimate Q1 revenue to be between $214 million and $217 million, which would represent growth of between 33% to 35% on a year-over-year basis, a modest acceleration from our Q1 results in 2020.

We estimate adjusted EBITDA to be at least $55 million in Q1. I would remind you that the relative strength in our EBITDA forecast is in part due to the virtual environment our teams are working in.

As we think about the full year, we are modeling for an improving digital advertising environment and expect a reasonable acceleration in our revenue growth. That said, our business still continues to be impacted by the COVID-19 pandemic that has significantly affected our advertisers and their demand for advertising.

In addition, and this is important as you think about your models, we face relatively easier comps in the first-half of 2021, especially in Q2 and then comped stronger performance in the second-half of the year, in particular Q4, where we significantly benefited from US political ad spend. I want to say a few words about our expected operating expenses.

Starting late in Q1 of 2020, we reduced the pace of our spending due to the uncertain operating environment. As we saw demand begin to return in May, we strategically started to increase the pace of our investments.

While we have made some progress, as we think about 2021, we do expect to continue to increase our investments over the course of the year as we continue to invest in the long term growth of the business. We expect 2021 capital expenditures and capitalized software investments to be similar to what we incurred in 2020.

We do expect data center and infrastructure spend to represent a larger share of our expenditures relative to office facilities compared to the prior year. Share count is expected to be about 52 million as we exit 2021.

In summary, Q4 represented a strong finish to 2020. I cannot say enough about how well the team is focusing on helping our customers, spinning the flywheel and staying mindful of efficiency while driving material spend on our platform while we invest in and scale our business.

That concludes our prepared remarks. And with that, operator, let's open up the call for questions.

Thanks for the opportunity, guys, and congrats on the strong finish to the year. A lot of the other digital advertising peers, I know a big part of the question and answers were directed around IDFA.

So I mean, I think it's exciting that you called around Unified ID 2.0, but I guess I'd be curious your $0.02 on how, just as you're thinking about the slope of the year and ways that you guys feel like you can work around it. I'd love to hear your latest thoughts on IDFA?

Yes. Thanks, Michael.

I appreciate the compliment as well as the question. So at times when I've answered this question in the past, I've perhaps given too much color on both the micro and the macro.

And let me just talk specifically this time about how it affects us, The Trade Desk. So about 10% of our spend uses IDFA.

That's meaningfully different than most other digital companies who are spending a lot of time talking about this. We also are a demand-side platform.

We are not a publisher. We are not a destination, if you will, where you're logging on to our app or our website.

So by being a demand-side platform, what we do is we look at about 12 million ad opportunities every single second. And so if a million of those, ish, have an identifier missing, so in other words, you take away IDFA, we still have 11 million to choose from.

So we just choose from those that are left, the 11 million that are left. So even the 10% that has the IDFA on it today, we've just found some amount of signal to make it worth buying, but it's already something that we sort of steer away from, which is why it's not that much of our business.

Which is why I can say definitively, I don't believe this will have any material impact on our business the way that it affects others. And I just want to put a finer point on it and just dispel the myth.

Unlike a platform or a destination like a Pinterest or a Snapchat, where you have to monetize every ad on your site when a visitor comes there, you have to monetize it. If that's attached to an IDFA phone, for instance, or an Apple phone, then you still have to find a way to monetize it and you're going to monetize it at a discount.

Those are the very same ads that we, on the demand side, are passing over. So because of the fact that we are on the demand side, that's why we're not impacted the way that those others are.

It's not a difference of opinion, it's a difference of location in the supply chain.

Great. Thank you so much for the color.

You bet.

Thank you. Congrats on the great year and the outlook, guys.

I had a couple of questions. I know that you said that political was in the high single digits in 4Q and mid single digits for the year.

And when I look at 1Q guide, it seems like on an apples-to-apples basis, you're actually seeing accelerating growth. I'm just wondering, is that – is my math correct there?

And just would love any color on that? And then second question, Blake, thanks for the high-level commentary on 2021.

I was just wondering if it's possible to maybe put a finer point on how you guys are thinking about the year from a top line perspective as well as from an OpEx and investment perspective? Thank you.

Sure. Thanks for the question, Shyam.

So I'll try to address them all here. So your math is correct.

And so let me just try to walk through it. So 2020 accelerated trends that set us up pretty nicely for 2021 and beyond.

But to your point, it's going to be a unique year in terms of comps on the quarters. And so, like I mentioned earlier in the prepared remarks, we'll have an easier comp in the first-half of the year, especially Q2 and then we'll be comping stronger performance in the second-half of the year, especially Q4 because of that strong political spend that you mentioned.

So as you think about moving from Q4 of 2020 to Q1 of 2021, it is really important to think about the political impact and strip that out if you're trying to do a sequential year-over-year comparison. So if you strip out the high single-digit percent spend in Q4 of 2020 and then you strip out from Q1 of 2020, that kind of mid-single, which we had referenced for the full-year, you will see that our Q1 guide actually shows acceleration from Q4, excluding political, which is a pretty good setup for us.

And there's a lot of -- and then getting to your question about the full-year, there's a lot of positive trends, and Jeff can also add color at the end here regarding those that we're seeing. The obvious one is this continued shift to digital advertising and this just trend -- there's no trend really larger than this move to CTV.

We're seeing verticals recovering with room still to grow in many of them. We have the kind of the UID momentum.

We have the partnerships’ momentum around things, places like Walmart and others that the team are working on. And we also have all the tools and the continuous platform updates associated with things like Solamar.

So when you take all those things into account from a top line perspective, it's a pretty strong fundamental business. Just to repeat, we do see a reasonable acceleration for the full-year.

And I’m really comfortable about our business and our setup for 2021. With regards to the OpEx component, a reminder that 2020 is a unique year in that in - late in the first quarter, we reduced our pace of investments.

As we saw demand return kind of back in late Q2, we started to ramp that up. And then you also have to keep in mind the 2020 expenses were impacted by COVID related to like travel and events and support and things like that.

So as I – as we think about 2021, we do expect to continue to increase the pace of our investments, and there's lots of areas to invest in. I mentioned a few of them, but it's like CTV and platform updates in international and we have identity and measurement.

There's all these areas for us that we can focus on. So what I would say about kind of like expenses and/or EBITDA is, I'm really optimistic about our ability to drive meaningful EBITDA at scale.

But I would -- and I'd say this generally, relatively frequently, we do not manage to an EBITDA target. We want to invest in areas that drive growth, but we also want to be mindful of efficiency gains we can get as we scale.

And so over the long-term, I'm confident that when we do return to normal, whenever that is, your guess is about that's as good as mine. Our margin structure should be as good as it was pre-COVID.

And over the long run, as we scale, it could potentially be even better. But again, on a more of a short-term basis, we do not manage to an EBITDA target, and we'll retain that flexibility.

Yes, Shyam, I'll just add a little bit of color because Blake just covered it really well. So one thing to highlight on Unified ID is that cookies will exist throughout the year.

So anything that happens in UID is upside, nothing but upside that comes from that because they’ll coexists, cookies and UID. So there is definitely a ton of momentum there, so upside potential.

Of course, our Walmart announcement, partnering with the biggest retailer in the world who also has amazing off line data. So it's really important when you're comparing, for instance, a Walmart to an Amazon, there's still a lot of products, especially household products that are mostly bought in the store and being able to connect that to online ads at the scale that we're doing here is something that is unprecedented in terms of closing the loop.

I just want to give one click down on what Blake said on the verticals recovering. So we're forecasting this acceleration when you extract political, and that includes a recognition that travel and entertainment and much of real estate is still on the sidelines.

So there's still a lot of room for recovery in some of those. And of course, that includes things like sports.

And then lastly, on the international, just to give a little bit more color, like one thing I'm really excited about is just our growth around the world. We're seeing acceleration in most of our offices in Europe, most of our offices in Asia.

And I'll just call out one of them. Shanghai started the year -- so our Mainland China office, started the year as our smallest office.

It did not end the year as our smallest office. And it was our fastest growing office all year long.

So just a ton of reasons to be optimistic about 2021.

I wanted to follow-up on the Unified ID 2.0 conversation. So it seems like there is very active news flow continued since the last quarter call.

My question is, where do you think we are in terms of Unified ID adoption for your business and the open Internet in general? And then wanted to hear what your goals are over the next year that leads up to the deprecation of cookies.

So would appreciate your thoughts on this.

Absolutely. And I appreciate you asking the question and the opportunity to talk about UID at a macro level.

So the momentum could not be any better. And especially some of the most important adopters early on include names like Nielsen, which is really the gold standard of measurement in television for the last 50 plus years, LiveRamp, Criteo, Fubo, The Washington Post, which includes Zeus, which is basically tech that's provided to 100 plus newspapers and journalistic outlets.

Every major SSP, which represents thousands and thousands of publishers. We talked about the governing bodies of PRAM and Prebid in the prepared remarks.

But if you know anything about the way that Internet is governed, PRAM and Prebid and the IAB play all significant roles in the governance of the Internet and to have their support and adoption is really great. And in fact, their commitment to help govern this going forward.

In terms of next phase and what we expect over the course of the year, I expect, at some point next year, this to be the currency for the open Internet, meaning that it's adopted everywhere. What you're seeing now is a ton of support and commitment.

I think it's fair to say we just now are entering the beta phase where everybody is working on implementation. But what has been proven in all these discussions, and the people we're talking to are people that understand the way the Internet works and is monetized.

They recognize that out of this is an upgrade to cookies in every meaningful way. The consumers are getting more privacy controls and better management.

Advertisers are getting more relevant ads and better measurement. Publishers can maintain or improve CPM, which incidentally is critical to the future of journalism.

And the government gets a product that is more in line with things like GDPR and CCPA than any current solution or proposed alternative, and it's an upgrade to cookies from almost every perspective, most notably it comes with terms and conditions, which cookies never did and it's encrypted, which provides a level of security that cookies never could provide. So when you put all that stuff together, it's understandable why we have so much momentum.

And right now, it's just an issue of implementation, and there are 100-plus companies working on implementation today.

Jeff, congrats on a really good performance. So I want to go back to the Walmart partnership that you announced.

Can you maybe just help impact that opportunity for us a little bit more? I mean, shopper market and trade promotion for Amazon has been a huge opportunity, and they've been able to really deliver on it.

Just wondering how you guys think about it in terms of not just -- I know it won't be launching until the end of the year. But as we look at this business over the next two to three years, how big can that be for you?

And then beyond just Walmart, does that open up opportunities for other partners? Thank you.

First of all, thanks again for the compliment and for the question. I'm really grateful for the opportunity to talk more about this amazing partnership.

So this is a case of taking best of breed tech in The Trade Desk and combining it with best of breed shopper data. And I'm not certain that there's better shopper data.

I don't think there's better shopper data anywhere in the world than what Walmart has. And let me be really clear on what we as partners are after here.

We are trying to help Unilever sell more Dove soap and Procter & Gamble sell more Tide detergent and Hershey's sell more chocolate bars. And Walmart wants them to sell more of that stuff in their stores.

And so what this does is by Walmart making this data available, it makes it possible for all of those companies and obviously, thousands of others, to optimize their media buys to sell more product in Walmart. And whether that's in their online presence or their brick and mortar presence.

And of course, they’re the biggest brick and mortar retailer in the world, the biggest retailer in the world, but especially and uniquely just had an amazing presence in the brick and mortar space fast-growing online business. So by optimizing their media spend, then Walmart gets more sales.

And then they also close the loop for those suppliers so that they continue to improve the efficacy of their media buys. Because I believe this is something of the holy grail for the companies that sell product in a Walmart, it makes absolute sense for other companies like Walmart to do exactly the same thing.

So I anticipate that they will be doing that. And there's tons of opportunity for The Trade Desk to partner there as well, but we're just so delighted to have started with the biggest and believe it will have a big impact on our business in the future.

On Connected TV, it seems like CTV had its strongest quarter growth ever. We wanted to confirm that, just the way we were kind of looking at our numbers.

And then what percentage of linear spend could be migrated to Connected TV given the current inventory availability? And maybe just one more on the inventory availability.

When you look at 59% of linear buyers who are saying, hey, we're making less upfront commits, P&G stepping away. How much Connected TV inventory do you think is currently in the upfront process?

And anything you can do to capture some of that or watch how that shifts to away from the upfront process?

Yes. So a lot to unpack there.

So first, I'll just say that 2020 will, without a doubt, go down in history as a tipping point for TV. And that's largely because the number of people subscribing to cable drop below the number of people that are accessing their television experience over the Internet and CTV.

And because of that, CTV spend on our platform more than doubled in 2020. Over 1,000 brands spent over $100,000 on our platform last year, and then those advertisers spending over $1 million more than doubled last year.

So CTV is, without a doubt, the fastest growing and also just there being a bit of a referendum on user generated content, that also helps move things over. As it relates to how much can move over from linear?

Honestly, that's more of a macro question than it is about our business specifically. But I'll point to the vectors that I think will dictate whether or not that happens.

One is a huge reason why there was so much move away from cable last year is just because it's the most expensive part of the TV experience. So if you believe that the economic pressure on the consumer, especially the US consumer, is going to continue, then you can expect cord cutting to continue at the high rate that it has been.

If you think it's going to get worse then I think you can expect it to accelerate. You also have to believe that the amazing content that has been put out there that we'll continue to find ways to put that in the Connected TV ecosystem.

And as long as that happens, I'm confident that AVOD will continue to be the preferred way for people to monetize, especially when we go incremental from here. So to me, those are some of the big macro vectors that you have to consider.

But I think that there's nothing but upside and it's all about a question of when, not if. It is inevitable that all of TV will eventually be consumed over the Internet and the linear or broadcast television is going away.

Two questions, if I could. First, on Walmart again.

I was hoping you was hoping you could provide a little bit of context around the structure of that partnership financially. Is that the type of deal where you'll be able to participate in the growth of that platform over time or is it more of a fixed fee type of arrangement?

And secondly, on UID, we hear from the industry some concerns about scale, will enough people or users actually log into the SSO. I'm curious to hear your thoughts, what level of user participation, in percentage or whatever metric you prefer, would UID 2.0 need in order to replicate the efficiency cookies today?

Thanks.

So first, on the Walmart piece, I'll just speak at a very high level. And that is we are both highly incentivized to help sell more Dove soap and more Tide detergent and more Hershey chocolate bars.

And if we do that, we both benefit. We both scale with the outcome.

So in other words, we're both going to participate in the upside. On your question on Unified ID.

So with Unified ID, we will launch a single sign-on, and that's largely to give publishers, the long tail publishers, an opportunity to manage their single sign on themselves without having to create one. So right now, they're somewhat dependent on the walled gardens, typically, a Google or a Facebook are the ones that are providing the log in opportunity.

But it doesn't provide them with the same opportunity to monetize, and definitely doesn't give the open Internet a chance to compare one property to another. So this single sign on would come with more features for the publisher themselves.

And again, it's for long tail publishers. However, in order to create a Unified ID, we don't need that single sign on to be present, that's a service for the long tail.

But what really has to happen is the biggest advertisers and the biggest publishers have to adopt it, and that alone gets enough touches on the Internet to give it the scale required. And because this does not have the syncing requirements, meaning the constant connecting this cookie to this cookie that happens in the status bar of your browser constantly today, because this does not have that, we simply need that head of the Internet.

Those large publishers and large advertisers to adopt this. And then it has a scaled response to the rest of the Internet and also makes it just fairly easy and obvious for everyone else to use it, but it also requires less work from them at that point.

So I think a few have wrongly thought that we have to get millions and millions of websites to get the SSO in order for this all to work, and that's just not true.

Two, if I can. First, in terms of just thinking about verticals over the course of the year.

Could you talk about how we should think about the sectors that were affected by COVID-19 rebounding? So that's question number one.

And then question number two, as there's more focus on privacy on IDFA, are there any particular channels like Connected TV that you think could just benefit from budget shift, does that 10% that's affected shift over to other channels? Thanks so much.

So I'll take a stab at the verticals. And then, Blake, do you want to add anything at that point or do you want to go first?

I can -- let me just take a stab. I guess on the verticals, so much of it is going to depend on how the world opens up.

So I think that that's going to be kind of that leading indicator. Like Jeff mentioned, we've already seen, obviously, some pretty positive trends out of some of our largest verticals.

And so then and still room, we think, to grow. I think I mentioned automotive showed a pretty good bounce back from Q3 to Q4.

And then Jeff mentioned and I mentioned as well travel, but like the real estate and entertainment verticals. I think that it's going to be a bit of a macro side of that on how and when those open up and when those industries begin to start opening up their investment and their spend accordingly.

But that's probably about as detailed of a description as I can get from a vertical standpoint.

I think Blake nailed it. At the early phase, we had pharma and CPG and all the things that people were consuming in their houses as we started quarantine a little less than a year ago in most parts of the world.

And there's still a bunch to go. So whether it's health and fitness, or food and drink, or home and garden, or automotive or travel, there's still parts of all of those to recover.

In fact, many of those -- the majority of them are still sitting on the sidelines. As it relates to who will benefit from a shift away from IDFA, I really think the company that will benefit most will probably be Chrome or Google's Chrome, which will -- by moving away from IDFA, I just think it reinforces that Chrome is a better browser and just the friction in the Apple ecosystem is sort of challenging, or trying to capture the value exchange or the quid pro quo of the Internet that I think is doing well.

Everywhere else and is the bias of every consumer and because Google in Chrome, at this point, manages that, I think, pretty well. I think they'll benefit from it.

In terms of specific verticals or would CTV benefit from it, I think CTV has so much wind at its back. It can get a little bit more, and that will help.

And I do think basically everything else will benefit from it. And because people are being so data driven at this moment, the things that are on sale or performing really well are going to get whatever gets rotated out of a specific sector, and that is going to mean that CTV and Audio are going to benefit most, if you're looking at it via channel.

This is James Heaney on for Brent. Last quarter, you talked about the benefit that you saw from social media ad dollars shifting to your platform.

Is there any way you can quantify the impact that you saw this quarter and maybe what you're seeing so far in Q1? And how are you positioning yourself to capture share from advertisers that are increasingly focused on brand safety?

Thanks.

So I'm not quite sure how to quantify in the Q4, specifically what's come from things rotating out of social media. But I will just talk at a high level about what the trend has been in 2020 and continuing into 2021 as it relates to brand safety.

And I think the election had a lot to do with this just because in the election, there's a lot of -- I don't know that we've had a more polarizing one in the United States in my lifetime. And there was, of course, concern of misinformation in the middle of that and there's a lower tolerance for misinformation, I think, during a global pandemic.

So you put all of those together and people are just more skeptical of user generated content. And so one of the things that has been really great for us and also really great for Connected TV is that there's not much doubt about the premium nature of Connected TV.

And people have better visibility on where things are going to fall, I mean, where ads are going to show up. So that scrutiny continues today.

There's more and more work that has to be done by everybody, including us, to make certain that we keep the open Internet as clear from bad actors and misinformation as possible. But as we continue to do more work, deploy more technology against it, it continues to get cleaner and cleaner and we're just inherently in a better place than I think any other company of our size and scale in the sense that we are pointed at the most premium parts of the open Internet, and that is inherently a safer place to be.

Thank you, Catherine. Thanks, everyone, for joining.

I know we ran a few minutes over the top of the hour, but really good questions again. So thank you, everyone.

We look forward to speaking with you over the remainder of the quarter, and have a good night, everyone. Thank you.