Greetings. Welcome to The Trade Desk First Quarter 2024 Earnings Conference Call. [Operator Instructions] Please note, this conference is being recorded. I will now turn the conference over to your host, Chris Toth. You may begin.

Thank you, operator. Hello, and good afternoon to everyone. Welcome to The Trade Desk First Quarter 2024 Earnings Conference Call. On the call today are Founder and CEO, Jeff Green; and Chief Financial Officer, Laura Schenkein. A copy of our earnings press release can be found on our website 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. These forward-looking statements represent our beliefs and assumptions only as of the date such statements are made. Actual results may vary significantly, and we assume no obligations to update any of our forward-looking statements. Should any of our beliefs or 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 to non-GAAP measures can be found in our earnings press release. We believe that providing non-GAAP measures, combined with our GAAP results, provides a more meaningful representation of the company's operational performance. With that, I will now turn the call over to Founder and CEO, Jeff Green. Jeff?

Thanks, Chris, and thank you all for joining us today. As you have seen from the press release, we are off to a very promising start once again this year. For the first quarter, revenue grew 28% compared with last year, marking strong revenue growth acceleration on both a sequential and a year-over-year basis, outpacing the industry for a quarter or 2 is a great accomplishment, but I'm so proud of our team for now having outpaced the digital advertising industry for a couple of years straight. I believe our revenue growth acceleration in the first quarter speaks to the innovation and value that we are delivering to our clients with Kokai. It also reflects growing awareness among the world's leading advertisers of the value and power of the best of the open Internet. To put a finer point on this, more than 90% of the Ad Age Top 200, the largest 200 advertisers in the world have run advertising campaigns on our platform over the last 12 months. Even with this considerable size, CTV continues to be our fastest-growing channel. Over the past few months, industry giants like Disney, NBCU, Walmart, Amazon and now Roku and LG Electronics have all made deeper pivots into CTV. Many of them in partnership with us, bringing more opportunity for advertisers. UID2 has become ubiquitous across the premium parts of the open Internet and along with greater first-party data deployment and advances in emerging data markets, especially retail data, we are building the new identity and authentication fabric of the Internet. In doing so, the open Internet is getting replumbed and revalued, especially in contrast to the value offered by walled gardens. And the innovations in our Kokai platform will help our clients take advantage of this revaluation and fully leverage data-driven buying to fuel their own business growth. As a result, I've never been more optimistic about the future of the open Internet and our ability to gain more than our fair share of the nearly $1 trillion advertising TAM. Let me dig into this a little deeper. I'd like to frame my remarks with just a little context on how our industry has advanced over the years, at least in part because of some of the significant and disruptive events today. I think this framing is important because I believe we may be in the midst of another period of major disruption right now. And perhaps most important, I believe our ability to anticipate and innovate in these moments positions us very well moving forward. I've often said that the programmatic industry as we know it today, came to life as a result of the global financial crisis just over 15 years ago. At that time, there was tremendous pressure on all businesses to do more with less and to find new ways to differentiate, automate and grow more efficiently. With those pressures, the precision and value of programmatic became more immediately apparent to major brand advertisers and this proved to be a fertile environment for our business and so many others. Similarly, the rapid rise of CTV as the driving force of programmatic would not have happened so quickly were it not for the COVID pandemic. With stay at home directives around the world, consumers shift en mass for the convenience of streaming, and the media world hasn't been the same since. TV has always been the central element of major brand advertising campaigns, so the shift from linear to CTV was always going to be disruptive. What's perhaps more important is how quickly the TV industry has evolved as a result. CTV is now a driving force in how we think about things like authentication, identity, the use of retail data, relevance and attribution in advertising. And while it may not be as apparent as a global financial crisis or a global pandemic, I believe we're now in the middle of another great disruption in our industry. This disruption is very different because it is driven from major tectonic shifts within our own industry instead of from macroeconomic and pandemic forces. Today's shift is largely driven from the conflict Apple and Google are having with governments and domino effects that are coming from new draconian policies and tactics coming from wounded big tech. For the last couple of years now, we've delivered consistent, durable revenue growth over 20%, significantly outpacing the broader market, including the major walled gardens. And it's because of the contrast between the best of the open Internet, what you might call the premium Internet and the content and characteristics of walled gardens has never been more apparent. The details of the Texas Attorney General suit against Google and the approaching trial of the Department of Justice versus Google have shined a light on a few things inside of Google but has created a lot of clarity on things outside of Google as well. There is a wider understanding of a few immediate themes facing advertising. First, there is a broader understanding of the role that walled gardens are playing as major purveyors of low-grade made for advertising inventory. Second, there is a much wider understanding of how bad ad to content ratios within walled gardens and the brand suitability risk of user-generated content, or UGC. This is in part due to the stark contrast that premium content has right now to UGC. The industry has growing awareness that consumers spend most of their quality time with premium content on the open Internet versus the walled gardens. Advertisers are making better use of their first-party data and retail data as they explore contemporary cross-channel alternatives to cookies. And lastly, in advertising and marketing, like in many other sectors, there is a broad industry frenzy around AI and what it means for our industry. Taken together, I don't know that I've ever seen the industry in such a state of transition. In some corners of our industry, I also sense some panic and confusion about what to do next. But for us, this gives context to our recent outperformance as well as our conviction for why I'm so confident about the opportunity in front of us in 2024 and the years ahead. One insight that reinforces the shift that is happening is founded where I'm spending my time. Over the last 6 months or so, I've been spending more and more of my time with CEOs, CMOs and heads of media companies, helping them make sense of the issues that I just outlined. And the bottom line across all of these discussions, there is consensus that the value is shifting to the open Internet. But perhaps I should be more specific. It's shifting to the best of the open Internet, what we might call the premium Internet. It won't all happen overnight, but it is starting. In 2022, have marked the first year in a decade that the majority of digital ad spending took place outside of Meta and Google. With the proliferation of CTV and Retail Media, that trend accelerated last year, and I believe the trend will only continue moving forward. The role of CTV and digital audio and all of this should not be understated. For many people, movie, TV and audio consumption is a very important part of their daily lives. It's premium quality content that captivate consumers who spend significant amounts of time engaging with it. No one watches Mandalorian or Curb Your Enthusiasm or March Madness casually. No one listens to their favorite podcast passively. I found in every aspect of my life, I can't talk to anyone about premium CTV content or the best of music without people sharing a passion for some form of those mediums. We are all highly invested in it. That's very different than how consumers engage or talk about social media content, which is often short form UGC video, such as cat videos or 14-year-olds filming themselves falling off of bicycles. However, people spend much more time with premium content such as streaming TV and digital audio than they do with UGC. Our research shows consumers spend about 60% of their online time on the open Internet. The ad to content ratios are much better and therefore, the experience is much better. But walled gardens still command the bulk of digital advertising spend because those tech giants have made it super easy to reach consumers at map scale, and the performance results are equally simplified. Hey, look, your ads did great. We told you so, so it must be true. But that's changing. Advertisers now have scaled alternatives on the open Internet. One of the major innovations in Kokai is the sellers and publishers 500 plus. This is a curated marketplace that represents the best of the open Internet, the premium Internet, where consumers spend the majority of their time online. Its live sports events such as March Madness, where we saw a 200% increase in spend compared to a year ago. It's the latest movies and hot TV shows, it's music and podcasts on platforms like Spotify, it's trusted journalism. Now our advertisers can access that premium marketplace at scale easily and with confidence. In doing so, they don't have to see control of their valuable first-party data they get to measure effectively, and they can be sure that their ads are showing up against high quality content that's consistent with their brand. Advertisers now have a scaled way to control their own future. Of course, our ability to buy the best of the open Internet is based on close working relationships with the world's leading publishers. Across the board, publishers are working with us to make advertiser access to their inventory as attractive as possible, which means making it as transparent and objective as possible. You only have to look at the list of expanded partnerships that we've signed over the last few weeks. We are integrating directly with the Disney Real-time Ad Exchange, which includes Hulu and Disney+ via our OpenPath technology. For the first time ever, NBCU will make the Olympics available programmatically to advertisers and is doing so with The Trade Desk. LG Electronics has adopted UID2, VIZIO and Cox Media Group are connecting with us via OpenPath. TF1 and M6, 2 of the largest broadcasters in France, have integrated EUID as they make their content available programmatically. And just a week ago, Roku announced that it is expanding its demand strategy to include The Trade Desk for its premium content. Just to go one click deeper on Roku. I think it makes a ton of sense for Roku to embrace the open Internet with their premium content. Early on CTV inventory was scarce, it made sense for many of the premium CTV streamers to sell most of the inventory themselves. With the proliferation of CTV content over the last couple of years, those same companies now need to find ways to maximize advertiser demand and that means opening up to a broader range of demand sources such as The Trade Desk and embracing solutions such as UID2, which help advertisers find their target audience as accurately as possible. We are excited to be Roku's partner in this, and we believe this move is a win-win-win for Roku, for advertisers and for The Trade Desk. As a reminder, last year on 66, we started shipping Kokai. This platform launch is different for us because 66 last year marked just the beginning, and we've been shipping new features ever since. We are quickly approaching some of the biggest UX and product rollouts of Kokai that nearly all of our customers will begin to use and see benefits from over the next few quarters, including a game-changing AI-fueled forecasting tool. Another major innovation that we're bringing to market with Kokai is a completely new approach to audience-based buying. We're able to do this because of the broad availability of new identifiers such as UID2, along with easier on-ramps for first-party data. This means advertisers can now take what they know about their most loyal customers and by new customers who look just like the loyal ones and find them anywhere across the open Internet. Advertisers no longer have to use content as a proxy for audience. Instead of simply advertising against the NBA playoffs to reach pizza lovers, advertisers can find pizza lovers wherever they are across all digital channels. In Asia, Unilever and their agency, PHD, leverage our retail partnership in Kokai with Foodpanda to increase sales of their Knorr food sauces. Unilever was able to onboard its own first-party data on our platform then do look-alike modeling for Foodpanda's retail conversion and loyalty data to target new customers more precisely on the open Internet. This new audience-based approach resulted in a 229% improvement in customers adding Knorr products to their shopping basket and an 81% improvement in customer conversion. Just like Unilever more and more advertisers are prioritizing ad opportunities where they can be sure they are reaching their target audience. And increasingly, that means activating their first-party data effectively and leveraging ad impressions where UID2 is present. This is the new identity fabric of the Internet taking shape, and it's revaluing the Internet and the process. Recently, Target Australia and their agency OMD worked with us to upload their first-party customer data into our platform, then targeted new customers using UID2. Their conversion rate improved 66% versus using traditional identifiers, and their cost per action decreased 36%. And there are huge benefits to publishers who offer transparency and authenticated audience data to advertisers. Unwind Media is one of the world's leading gaming platforms. They recently reported that they saw a 47% improvement in the value of ad impressions when deterministic identifiers such as UID2 are present, and 107% improvement when users are authenticated with SSOs such as Open Path. Let me also spend a moment on AI, not because we're trying to get on the bandwagon. We've been deploying AI in our platform since we launched Koa in 2016. Given the frenzy around AI, I think it's important to talk about how it is actually helping advance the work of programmatic advertising. Too much discussion on AI today is about AI and the abstract instead of practical details about implementation. We are starting to get better at explaining how our AI investments will actually help people do their jobs better. To that end, we've known since before our company existed, that the complexity of assessing millions of ad opportunities every second, along with hundreds of variables for each impression is beyond the scope of any individual human. We have always thought about AI as a copilot for our hands-on keyboard traders. And with Kokai, we are bringing the power of AI to a broader range of key decision points than ever, whether it's in relevant scoring, forecasting, budget optimization, frequency management or upgraded measurement. AI is also incorporated into a series of new indices that score relevance, which advertisers can use to better understand the relevance of different ad impressions in reaching their target audience. For example, UScellular worked with their agency, Harmelin Media, to leverage our TV quality index to better reach new customers. Their conversion rates improved 71%. They reached 66% more households by optimizing frequency management and their cost per acquisition decreased 24%. I think it's important to understand how we're putting AI to work in Kokai because this kind of tech dislocation will bring new innovators. We see that now where major tech players are inviting scrutiny because they're behind the innovation curve on AI and more agile players, and I would include The Trade Desk in that bucket, are figuring out how to apply it to help humans make better, more data-driven decisions. We are also developing AI branded with Koa to make data-driven refinements on its own within the confines of human defined guardrails. Let me close by trying to bring all of this together and help you understand why I believe this positions The Trade Desk so well going forward. I can't explain that any better than Jamie Power, the SVP of addressable sales at Disney, who spoke at our recent FORWARD '24 event in New York City. Disney is one of the pioneers of CTV technology, and Jamie talked about how UID2 is helping Disney offer advertiser match rates that are 3 to 4x higher than when UID2 is not present, and higher CPMs are clearly following higher match rates. That's a pretty astonishing statement about where the Internet is heading. Disney deals with an authenticated audience and they're leveraging UID2 so advertisers can find the right customers with much more precision in TV than ever before, against what many would consider some of the most premium content on the open Internet. With the growing ubiquity of UID2, with new approaches to authentication, with better deployment of first-party data, with easier access to the premium Internet, and with major advances in AI, the ability for advertisers to reach the right audience at the right time and the right place and convert those customers has never been greater. And all of that's happening in our platform. And all of that happens with the advertiser in control of their data, understanding more precisely where their dollars are going, how they should optimize and how those ads are performing in service of their KPIs. None of what I just ran through is really possible in a walled garden. I might not go as far as to say, we're seeing the early days of the fall of Rome, but the current macro and tech forces are creating an important moment of the reckoning for everyone in our industry, and advertisers are shifting more dollars to us as a result. Advertisers want a competitive market with price discovery because they want to own their own future. It is easier than ever for advertisers to understand who is delivering value at all points of the digital advertising supply chain. And they will increasingly gravitate to those who are helping them make the most of every advertising dollar with transparency and objectivity. Of course, this is all made possible by our profitable business model which generates significant cash flow, which in turn allows us to invest in the major platform upgrades that characterize Kokai. So while I believe 2024 will be remembered as a year of great tech-driven disruption in our industry, I also believe it is a year that The Trade Desk will continue to differentiate itself from its competitors and continue to outpace the market. As the industry races to $1 trillion TAM, we are incredibly well positioned to take more than our fair share. With that, I will hand it over to Laura, who will take you through more of the financial details.

Thank you, Jeff, and good afternoon, everyone. The Trade Desk delivered another strong quarter as revenue was $491 million, a 28% increase year-over-year. Our growth is further evidence of the durable value that The Trade Desk brings our clients, and we continue to outperform the industry as a result. All of our progress in areas such as CTV, Retail Media, Kokai and UID2 helped deliver another quarter of consistently strong growth and profitability to start 2024. In addition to strong top line performance, I'm proud of the $162 million of adjusted EBITDA we generated during the quarter. representing a margin of 33%. Our strong growth in Q1 was broad-based in terms of geography and channel [ geography ]. Strength in CTV continued as the channel led our growth from a scale channel perspective once again. We also continue to see strong momentum in Retail Media as we continue to win shopper marketing budgets and as more of our existing clients utilize third-party retail data for targeting and measurement. UID2 is being deployed by major advertisers and publishers at a larger scale than ever. And we continue to see the benefits from strengthening our relationships with major brands and their agencies. From a scale channel perspective in Q1, video, which includes CTV represented a mid-40% share of our business and continue to grow as a percent of our mix. Mobile represented a mid-30% share spend during the quarter. Display represented a low double-digit percent share of our business and audio represented around 5%. Geographically, North America represented about 88% of spend, and international represented about 12% of spend for the first quarter. We saw strong consistent year-over-year growth across all of our regions in Q1 with international growth outpacing North America for the fifth quarter in a row. We continue to execute our growth playbook internationally, led by CTV and Retail Media. We remain optimistic that our business outside North America continues to be a strong contributor to our overall growth this year and for years to come. In terms of verticals, every category greater than 1% of spend grew double digits in Q1. It's exciting to deliver such consistent growth across the business, and we're proud to see the value of the open Internet for premium Internet resonating with clients for many industries. Turning now to expenses. Q1 operating expenses, excluding stock-based compensation, were $352 million, up 20% year-over-year. We continue to make investments in our team and platform, particularly in areas like sales and marketing and platform operations as we position the organization for long-term growth. Income tax expense was $14 million in the first quarter, driven primarily by our profitability and nondeductible stock-based compensation. Adjusted net income for the quarter was $131 million or $0.26 per fully diluted share. Net cash provided by operating activities was $185 million and free cash flow was $176 million in Q1. DSOs exiting Q1 were 86 days, down 2 days from a year ago. DPOs were 70 days, down 2 days from a year ago. We exited Q1 with a strong cash and liquidity position. Cash, cash equivalents and short-term investments ended the quarter at $1.4 billion. We have no debt on the balance sheet. Finally, in Q1, we repurchased 1.5 million shares of Class A common stock for an aggregate amount of $125 million. The company will continue to approach the repurchase program opportunistically depending on market conditions and capital priorities. Now turning to our outlook for the second quarter. We continue to see strong spend in our key areas such as CTV and Retail Media. We estimate Q2 revenue to be at least $575 million, which would represent growth of approximately 24% on a year-over-year basis. We estimate adjusted EBITDA to be approximately $223 million in Q2. In closing, we are encouraged about the momentum of our business. We're executing on large long-term growth drivers, including CTV, international expansion, Retail Media, our recent platform upgrade in Kokai, UID2 as well as the upcoming U.S. election cycle. We continue to generate strong free cash flow for our headcount efficiently and maintain a balance sheet that positions us to continue investing and achieving durable growth. We remain optimistic about the prospects for our business in the remainder of 2024 and beyond. That concludes our prepared remarks. And with that, operator, let's open up the call for questions.

[Operator Instructions] The first question comes from Justin Patterson with KeyBanc.

Great. Jeff, at the last Investor Day, you spoke about Connected TV forming a tidal wave. We're now starting to see Disney, Roku and even NBC with the Olympics leaning more on programmatic, suggesting that CTV won't be just a walled garden world here. It will actually be more open. So where do you think you are right now in just that tipping point from linear TV spend flowing into connected TV? And how are you thinking about the right investment level to seize that opportunity?

Thanks, Justin. I appreciate the question. So first, I think it's just important to take a step back and just look at where we've come from. It's been a few years. It wasn't that long ago that people were saying, oh, cable has got a long life. It's not going to be that long, and then the pandemic accelerated everything. Then we started talking about a new currency like UID2 and there was a fair amount of, well, are you sure you can get adoption on that? It seems like CTV has a lot of defenses or ways that it's going to be reluctant to adopt something new. When you look at it now, and every streaming service has an AVOD offering, except for Apple. We've been saying for almost 10 years that Netflix would be showing ads and of course, they are today. In the last months, we've talked about how Disney+, the Olympics are coming to NBC, but they're also coming to programmatic for the first time, and they're doing that via The Trade Desk. And then, of course, our Roku partnership, and I think even during the height of the pandemic. People would not have predicted that we would be in the place that we are. Those 3 big announcements, our Disney+ announcement being to integrate directly with them have all come in roughly the last month. And then, of course, UID2 is the primary currency of connected television. And so with that backdrop, I think we're in a phenomenal position. And once again, the consumer is leading in the sense that as they move away from traditional television, cable and linear television, they're moving in to streaming and connected TV and all of those are filled with ad options. So the content owners and the streaming wars are more dependent on programmatic than ever. As we're seeing things like profitability, and Hulu and Disney excel in large part because of them leaning into programmatic, and we're super proud of our partnership there and across the board. As I said last quarter, I believe there will be an increase in inventory this year. I think we've heard that theme from most of the content owners throughout the year. And the scale of identity is going to continue to go up, and that's in part because of that inventory going up. And I think all of that tips the scales even more towards the buyer's market. There is going to be more supply, and it makes it so that buyers can be more selective in what they buy. That makes it more important for everything to be layered with UID2, but also makes it more important for them to be very deliberate about what they're buying. And most of the streamers have to rely on programmatic so that they don't add to the ad load and, therefore, shrink or slow their growth. So I think that puts us in a tremendous place to thrive, and we're seeing more and more pressure on anybody who tries to create a walled garden like strategy in CTV. And so I think you're going to see more and more of the open Internet led by connected television. And I think this year, so far, even just the headlines from this year so far are underlining that point.

The next question comes from Shyam Patil with SIG.

Congrats on another really strong quarter and outlook. I had a 2-part question. Jeff, I guess, following up on the first question, how do you think about the impact of Amazon's ad-supported Prime video offering from a competitive perspective? And then for the second part, this is related. Disney called out in their earnings call that there's a lot more supply in the market as a result of the competitor entering the ad-supported tier. And I think everyone's assuming that that's Amazon. And there are just some concerns out there that a massive influx of CTV inventory at lower CPMs, good depressed the CTV market overall without necessarily driving more demand. So I'm just curious kind of your thoughts on how all of this affects you guys and the industry.

You bet. So can you remind me of the first part of your question? So how does the increase in supply -- I get on the second part. Remind me of the first part of your question?

Yes. Yes, I know it's a long one. Yes, the first part was just how you're thinking about the impact of Amazon's ad-supported prime video offering from a competitive perspective.

Yes. So today, we don't buy Amazon Prime video. That's only available from Amazon selling it themselves. And as you point out, I believe they're adding a significant amount of supply but then only selling it themselves, which does put some pressure on the objectivity problem that their DSP in particular has. And when I say the objectivity problem, I mean, it is very difficult to go to a buyer and say, give me your money, and I will help you objectively figure out where to put it. And by the way, I own a lot of it. And so I would, of course, bias towards selling my own. Everybody who does that tends to have a problem when they're repping other people's inventory, it makes it difficult for them to partner with. But their objectivity problem that I just described is it could also would be similar to a Google or somebody else. But they take it even one step further, which is that at Google, they don't make products that compete with all of these people that are selling. And because they white label soap and baby wipes and diapers and whatever else at Amazon, that also competes with many of the CPGs who are doing all the advertising. And so it makes it even more difficult. So when you have more supply than you have demand and you have an objectivity problem, I think it puts a fair amount of pressure on them. What I do think is likely to happen over time, though, and we're seeing this happen inside of Amazon is them creating more separation between their different entities. I don't think it's good for Amazon or Amazon users for the ad experience to be inferior simply because they own the DSP. And what I anticipate will happen over time is that they will make their inventory available to everyone. That's what I would love to see. I'd love to have access to the inventory, and I would love for them to adopt UID2 and tell them I believe they're operating an anemic market. I think they are going to struggle because UID2 has become a ubiquitous currency for everyone in the CTV space, because advertisers want to bring their own data to the table and they want to buy very deliberately and make certain that it's going to work. And with the objectivity problem I just described, they are going to struggle to get the high CPMs and the data-driven high CPMs that could come if they were operating a more objective ecosystem. So I'd love to see them evolve, actually, not too dissimilarly from what we've seen from Roku. To see them evolve to a place where they embrace the open Internet, embrace those common currencies so that advertisers can bring their own data to bear, and then they would get higher CPMs. They could have a lighter ad load. They could have a better ad experience and all of that would be good for Prime video customers. But there's a lot that has to happen. Until that happens, I actually don't think they're that competitive. And I think all the other players have a much more competitive offering to the most premium advertisers, which is what television is really all about. So -- and tell them, I think the premium supply doesn't have quite as much of a surplus as there could be if Amazon embrace that, and I think we're going to see it take a little while before we get there.

The next question comes from Brian Fitzgerald with Wells Fargo.

Jeff, it looks like third-party cookies won't be going away now for at least until '25. What are your thoughts on the cookie deprecation delay once again? And how, if at all, it impacts the industry? And then maybe secondarily, could the continued delays have any impacts, positive or negative, on UID 2.0 adoption?

Great. And so first, I'm glad to get this question on cookie deprecation not because I haven't heard it before but in an effort to hopefully put it to bed for at least a little while until the next headline hit. I've been blown away by how much in trade press, there has been discussion about cookies. And maybe it's because I felt like it was a very important topic to talk about 2 or 3 years ago, but I just feel like we already had all these conversations. So I was on record, I remember during the pandemic of saying, I think it is a strategic mistake for Google to deprecate cookies. I don't think the risk/reward is worth it for them. And I would not be surprised to see them delay this again and again as they continue to buy more time. I think that's exactly what we saw because we weren't surprised by this. We predicted this. We have just been sort of quick to move on. I do want to give Google a little bit of credit, though. I mean Apple took away cookies and said nothing, gave no announcement, offered no alternatives. Google said we're going to take away cookies, they gave some head start. Now they moved the data a bunch both forward and backward, which to me didn't make any sense. But they did at least try to propose something else, which was a privacy sandbox. The unfortunate thing was what they proposed was half bake and not a [ great ] solution. And so the industry has just been criticizing, us included, for the better part of the year because those criticisms, I think, were pretty unanimous even from industry bodies like the IAB that I've never expected to take such a strong position on privacy sandbox. I think it forced Google's hand to delay cookie deprecation. So we were not surprised by it. The net effect of that is that it gives the open Internet a bit more runway to adopt things like UID2, and come up with authentication and identity strategies so that they can drive an environment outside of cookies. I think this is very good for some of those that move slow. Some of the legacy media companies, especially those in journalism, I mean, journalism is being hit from so many side, especially in the big tech sort of pulling away from them which makes it harder and harder for them to monetize and they had a whole pile of problem before their CPMs went down. So I do think that this delay makes it so that things will function a little bit longer. But I don't think it actually slows down UID2 adoption. We haven't seen any of that. And the reason why I don't think it slows it down is because the world knows they're serious. The world knows that it's not going to last forever. They are looking for a way to get out of this. And so I think the average publisher is saying exactly what we were saying 4 or 5 years ago, that while we think it's a strategic mistake for Google to get rid of cookies, we also think it's a strategic mistake for all the rest of us to do nothing. And so everyone else, I think, has bought into that strategic fact that everyone has to be moving and operating and adjusting. So I do think that prevents any sort of dips or drop-offs where some 20% of slow adopters get meaningfully hurt. I think it helps give them a bit more runway. But I don't think it decelerates the adoption of UID2 in any way in part because UID2 adoption has been led by CTV, and CTV providers are competing with each other. And that is a way that they differentiate from one another is, do I make it easy for the biggest brands in the world to put their own data to work as they buy my media? And if I do that, I won't get higher CPMs. All of them need that at streamer X, Y and Z irrespective of what happens at the New York Times or the LA Times or anywhere else like that. So hopefully, that answers the question on cookie deprecation. I'm excited to be moving on from this.

The next question comes from Vasily Karasyov with Cannonball Research.

Jeff, I would like to ask you to talk about the deeper partnership with Roku that was announced last week. We heard some commentary from Roku. And from your perspective, what would you highlight for us that is significant for the Street to know? And in addition, as this progresses, I think the time line is a couple of quarters out. Can this lead to increased volume of CTV advertising for The Trade Desk? And if so, how would that mechanics work?

Thanks. So it's early days in the specifics of our partnership, but we're very excited about the long-standing relationship that we've had with Roku and seeing it finally materialize into something meaningful. And I do believe this is something meaningful. The Roku Channel has grown tremendously over the last couple of years. So as they become more and more into content, and that includes having more ads, we're excited to have access to those in large part because we view Roku as a key premium publisher in the connected television space. A couple of things that I think are incremental about the partnership. We anticipate their adoption of UID2, so we think that will be important. Our relationship has strengthened during the most recent discussions, and we believe that we will play the role as their most strategic demand partner. I think for the first time ever, advertisers can get access to Roku's ACR data directly in The Trade Desk platform. And perhaps as significantly as any of those things, I think us getting access to biddable inventory is a very big deal. Too much of CTV is still sold on a programmatic guarantee basis or a fixed rate basis and that is becoming increasingly undesirable. As more inventory comes online, buyers want the option to pick and choose. That is why they will pay a premium. That is the way to get a premium, and that requires a strong persistent sense of identity or identity currency. And that also means making the inventory biddable. So the strength of the partnership and the relationship is the best that it's ever been with Roku. I'm really excited about the change that this represents for them. And we're excited at the partnership and excited for what it means for the future.

The next question comes from James Heaney with Jefferies.

Can you just talk more about the expanded OpenPath partnership with Disney's streaming properties? Curious how this impacts just the amount of CTV inventory that you're now able to access compared to what you had before?

You bet. So let me just take a step back to explain what OpenPath is. Over the years, the supply path in digital advertising has gotten more and more convoluted. And sometimes it's because of the tactics used in companies like Google, where the DoubleClick Ad Exchange was once a pure theme and then they introduced things like Open Bidding and Open Bidding is really the backdrop whereby they created a lot of funky options that are described in the Texas Attorney General's complaint. So I think there's been a whole bunch of things that have made the supply chain complicated, not least of which is Google, but also the incentives that, that has created for SSPs and the way that they process auctions. In an effort to make the supply chain more efficient, we created an offering called OpenPath which is essentially going to the largest publishers in the world, often in connected television, but in any channel where they want to plug in directly with us. So I want to be super clear, we are not in the yield management business. That is a function for publishers and their technological representatives. We are representing the buyers, but we're willing to give them visibility into our demand directly so that an intermediary can't make it more convoluted, more opaque and in some cases, charge more than they're adding in value. So we've connected OpenPath this pure pipe of visibility into our demand directly in to Disney's DRAX so that they have UID tied directly to them, and we have better visibility into the way that the auction works. We expect 100% visibility eventually at Disney. We're moving in that direction. We -- they said on stage at FORWARD '24, by the way, that 50% of the business is automated and addressable. And by 2027, they expect that to be 75%. So we're on the path toward to 100%, but that is all made possible by us plugging in directly and having a clear sense of where is UID present, where is it not, how can we make things more addressable and how do we make the connection between us or said another way, how do we make the supply path as clean, clear, transparent and efficient as possible. And by us plugging in directly with Disney, I think we're setting yet another model for the way that the most optimal integrations can be done in connected television. So very excited to be doing that with one of the biggest in the space. So thanks for the question.

The next question comes from Jason Helfstein with Oppenheimer.

I want to ask a question about social video. It seems that it's been gaining share and as linear dollars are just kind of leaving linear, like it's definitely competing with CTV for a share of those dollars. Just any thoughts about how you think about that, how you can kind of utilize that channel for your customers? And then it also seems to be perhaps pushing CTV to embrace more data to try to be competitive with that. And so maybe comment on that, agree, disagree, et cetera.

You bet. So in the move from offline advertising, which, of course, pre-Internet was everything. And in the world of digital, everything has been shifting towards digitization and eventually we think all advertising will be transacted digitally even for the small minority of that, that has not actually executed digitally. So we'll use digital pipes even if we're going to run an ad in print, for instance. So everything is moving to digital. As it's been moving to digital, it's gone in -- there's been sort of 2 poles or 2 centers of gravity. One is around user-generated content that has exponentially more supply than demand. Orders of magnitude, more supply than demand because they're uploading thousands of hours every second or whatever, whether it's on TikTok or YouTube, the amount of content is off the charts. And what those platforms have often done really well is made it really easy for you to spend money and then they often report the results on their own, in other words, grading their own homework to tell you how they did. When you use those metrics and partly because of the supply/demand, the reach is really cheap. And when you contrast that to premium content, it can seem very cheap, especially when you're relying on the metrics that are provided by the companies that are selling you the inventory. We have focused all of our efforts on the premium side of the Internet. And more and more, you will hear us talk about our goal is to monetize the premium side of the Internet, in large part because that's where people spend all their time. We mentioned in the prepared remarks that the ad to content ratio in user-generated content is worse than it's ever been. We think that is going to continue to get worse even though the amount of inventory goes up. And as a result, you're seeing more and more advertisers sort of flee to safety. I want to be associated with premium content. And I want to be associated with ads that I know are getting visibility. And as they are getting to be more and more of those ads, it makes it easier for them to say I want to be associated with those where I know I'm getting the 30-second spot. I know I'm getting people's attention. I know they're not skipping it. I know they don't hate my ad in front of that 14-year-old falling off of something. So increasingly, you'll see us talk about the premium side of the Internet because we know that that's where the most premium advertisers in the world want to go. And there's more and more question about UGC as it becomes more and more the epicenter for hate speech and all the worst parts of the Internet. So I expect that separation to continue. It doesn't mean that there won't be budgets going there. But I think the majority of the growth is going to go to the premium side of the Internet because the premium side of the Internet is getting so much better at making those available in a data-driven way, which kind of gets to the second part of your question. You're exactly right, actually, that one advantage to sort of the social media video as you put it, is that the supply chain is one company end-to-end in large part. So they go get demand and then they execute it themselves. And so while the -- while we can criticize them for not having objectivity, we have to -- it's like [ crave and ] to some extent, for making it super easy and it's easier when your ecosystem is really just one company. Because now we're doing integrations like the one we just talked about with Disney, we're making the supply chain of the open Internet so much more effective that when you couple that with the most premium content, whether we're talking about in music or in journalism or especially in CTV, all of those things make the premium Internet more accessible to the most premium advertisers in the world. And as the amount of inventory goes up in that world, we also expect more of the dollars to do that -- to move in that direction. So I think all of this is good for us, but I just wanted to paint a picture of that contrast. There are those 2 centers of gravity they will continue to get spend. But the one that is growing most, I believe, is the premium side of the Internet.

The next question comes from Laura Martin with Needham.

Jeff, I believe that great leadership creates great value, and I really appreciate your leadership at the open Internet. So I wanted to say that first. My question is on CTV full funnel. So it feels to me like with your deal with Walmart on RMN and then buying VIZIO and Amazon turning all of its 200 million Prime video [indiscernible] driven. It feels like the TAM expansion going on in CTV is bottom of funnel, which is making connected television an omni-funnel channel, not just top of funnel, which was sort of the historical thesis. My question is, is part of your growth, this 28% industry-leading growth you're reporting, because you actually have a full funnel option in connected television?

The short answer is yes. So it is true that the easiest dollars to move over are top of funnel because that is, of course, where the biggest advertisers in the world have historically spent. And so they are moving over budget, but previously they'd put in linear and those would come over to CTV. They're taking the same assets and in some cases, even the same way of thinking about it. Well, it improved the metrics a bit and then they improved the targeting a lot. And therein is the new sort of ported over TV budgets. However, as you point out, you don't have to spend that way very long to say, now what do we do next? How can we improve on that? And that's why we're bringing retail data to bear really is just showing amazing advantages for those that have historically sold in brick-and-mortar stores that have historically had difficulty getting data online but now they can partner with many of the biggest retailers in the world who are also trying to compete with big tech and in large part, they're trying to compete with the Amazons of the world. So all of them are saying, how can I put my data to work so that we can sell more product at a Walgreens or Dollar General or a Walmart or a Target or so many others, Albertson, so many others, Krogers, so many. But if they can sell more product in their stores by making their data available on our platform, then the advertiser is getting a bit more bottom of the funnel, the retailer is being able to provide proof that their data is actually selling more product in their own 4 walls, and that makes it easier for them holistically to spin their flywheel faster, which is exactly the way they think about it in places like Amazon. So it ends up being a win-win between the retailer as well as the advertiser as they get data and insights and efficiencies that they haven't had before. And that is, by its very nature, a bit more bottom of the funnel. I think we've merely scratched the surface on what's possible there. I think there's so much ahead for that. Not dissimilar from what we were just talking about in supply chains. There's a lot of work we need to do to unlock that data to make it easier. There's way too many manual processes today. We -- I had a meeting with a very large data company today about just making certain that the pipes are very connected so that we can make it easier for the biggest advertisers in the world to use their own data to keep it safe, to do only things that they would want to do with it that are respecting the very sacred relationship that they have with consumers so that they can leverage that data top and bottom of the funnel to be more efficient and the amount of unlocked and things that are possible in large part started by retail media are just things that we haven't even imagined even just a couple of years ago. So it's a really exciting time.

Next question comes from Mark Zgutowicz with the Benchmark Company.

Just maybe a follow-up to Jason's question on social walled gardens. If you look at your mix across all of your ad categories, it's been relatively unchanged since December of '22. This quarter, you indicated mobile dropped from a high 30% to mid-30s, but we haven't seen video move up from the mid-40s since December '22. So I'm just curious what's sort of driving that dynamic would have, I guess, expect to see video mix moving higher as all these CTV initiatives are implied?

Honestly, I don't spend that much time on measuring the mix. Of course, I'm very interested in seeing CTV continue to grow, and I am interested in the overall growth rate. But because when you're looking at the growth rates against each other, when one is doing really well, it doesn't necessarily mean the other is doing badly, even though the slice of the pie goes down. Because the pie is getting bigger, we're excited about that growth across the board. So whether it's high 30s to mid-30s in mobile and whatnot, we're still heading in an amazing direction of growth. And honestly, we spend a lot of time trying to actually properly categorize inside of things like video and sometimes small moves like people watching video on phones or offline versus watching them on CTV have an effect on what we described as growth in CTV versus video or otherwise. When the content is almost the same, it's just a device. And so creating distinction between premium content and devices can sometimes muddy the waters and the numbers, which is not ever what we intend to do. We're simply just trying to show the value of premium content. We know that, that trend overall is very good, irrespective of what devices they're used on. And in fact, even if you look at it on a device basis, the trends are also very good. So the small changes that you're describing, I honestly don't spend that much time thinking about it.

Yes. And Mark, this is Laura. I would just add that video does continue to increase. We just don't break out the exact percentages.

The next question comes from Mark Mahaney with Evercore.

[indiscernible] from analogy. There's been rising regulatory scrutiny of Google, I think, and I know and I met it for a couple of years, but it's really kind of come home this year. You mentioned some of the stuff that's been disclosed, you've got 2 trials that will probably have decisions between now and the end of the year. So was that actually causing a notable material acceleration or shift of ad budgets away from Google towards The Trade Desk? Have you actually seen that now that the -- whatever the right now, the chickens have come home to roost?

Yes. Thanks, Mark. I really appreciate the question. So when you get an incremental dollar, it's sometimes hard to figure out why you got it or where it came from. But -- so it's hard for us to attribute how much of that is coming from people's fear of Google. I mean I know that we win money from Google CFP all the time. Sometimes, we think that's because our product is better. Sometimes, I think it's because our objectivity is better. Sometimes, it's because we're not going to spend most of your money on YouTube. There's a whole bunch of reasons why that's the case and regulatory scrutiny is one of those. But I will speak to the sentiment, which I think is just easier to speak to. As I have more and more conversations with C-suites at some of the biggest companies in the world and talk about it in the context of either partnership or seeking their advertising dollars. The acknowledgment that handing over your data and your money to Google and hoping for the best and especially when that is a critical part of your future is increasingly viewed as a risky strategy that people have to take their own faith in their own hands. And that's one of the things that I think is so compelling about our offering right now, is that we are not saying trust us instead of them, and we will do the same thing they do just with more focus because we don't own YouTube. That's not what we do. We actually tell them we will give you the details of all of your performance. It's your data, you take it with you, you own it. And that way, you learn and you always own your future. That part where advertisers want to own their own future. It feels like that is more important to them than it ever has been, and I do believe that the regulatory scrutiny and all the -- there are a lot of people that have read the Texas Attorney General's complaint and have thought about the effect that, that has on the ecosystem, and it does make them want to be more deliberate about where they spend, and it does make them, in many cases, I think, a better partner for us, and it helps us to see what kind of partner we want to be to them. But I do believe it is contributing to our growth, but it's really hard to quantify is the short answer.

And then one last question, John.

Our last question comes from Matt Swanson with RBC Capital Markets.

Yes. Great. Jeff, I feel like we've spent a lot of time on the call kind of thinking through CTV publishers and why strategically it makes sense for them to open up more. But I guess, thinking of it from the advertiser side, as CTV continues to scale and just the complexity of buying gets larger, how important is it for them to get back to a single pane of glass? And you've used this term currency a bunch in terms of beta consistency and kind of how can that drive more programmatic versus direct as maybe advertisers start to pressure those publishers?

When you say a single pane of glass, can you elaborate? What -- did you mean just spending on CTV?

Yes. So in CTV, as opposed to the idea of when your budgets are small, direct might seem more feasible? And as CTV budgets grow and the complexity grows and the number of suppliers grow, how much more important it is to them to start to create more automated processes.

I see. I love this question. Thank you. So when you -- it wasn't that long ago that as consumers, we were just using 1 or 2 apps on a Roku, where at least 5, 6, 7, maybe 10 years ago, I just used the Amazon and Netflix. And now there's a lot more options and almost all of them have ads. It wasn't that long ago that it was 1 or 2, and then it was only a few others, and then most of them had limited ads. And now there's a lot more and they all have ads. So if you're an advertiser, you can't just go to one company and say, I want to buy some ads and then have an understanding of the way of frequency caps in particular, will be used. You have to be thinking across all of these apps and you have to think about how many times am I showing the same user this ad irrespective of what show or what profile or what app they're using to watch it on. And so as the number of options goes up, and the amount of ad inventory goes up, the need to automate and be data-driven and have a persistent sense of anonymized identity is greater than it's ever been before. And that's partly because the ad prices haven't gone down. And in fact, for the premium stuff, for the things they really want, they've gone up. And that's not necessarily any longer because of scarcity. The scarcity has actually gone away. The amount of inventory has gone up, but there is scarcity when it relates to having all the meta data that you want in order to make an informed decision. And there will, to some extent, always be scarcity around the exact audience that people want to reach. And so by making that more available, that's how you get the premium. And so all of the streamers have figured this out. This is the way to get the premium. And I think they're all on a path that to me makes sense, like all of them are doing the right things. And that is one of the things that we have said about CTV really from the beginning is that it's perfectly fragmented. It is fragmented enough that no one could be draconian and create a walled garden. People doubted us when we said that initially, and I think that's proven to be true. But it also is consolidated enough is that you have very smart people running those, and they're going to be hyper rational. And as a result, we're seeing them all do, in my view, what is the right thing. Some of them are different parts of the sort of adoption or innovation curve. They're on different parts of the journey, in different places in the journey but they're all on the right path. So I'm very excited about the state of CTV. I really do think it has huge implications on the entire open Internet. I do think it's leading the open Internet as it relates to the premium content. And I'm optimistic that digital audio is right behind it. There are lots of leaders in digital audio that are doing more than what CTV has done, but there's still a lot of catching up to do as well. And I'm super optimistic about what that means for things like journalism as they're really starting to think about it the right way. But very optimistic about the open Internet led by CTV. Really appreciate the question.

Thanks so much, Matt. You can close out the call now, John. Thank you.

Thank you. This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.