It's my pleasure to turn the floor over to your host, Chris Toth of Investor Relations. Sir the floor is yours.

Hello and good afternoon. Welcome to The Trade Desk Fourth Quarter and Full Year 2016 earnings conference call. On the call today are Founder and CEO Jeff Green, Chief Financial Officer Paul Ross and Chief Operating Officer Rob Perdue. 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, the matters that we will be describing will be forward-looking statements, that are dependent upon certain risks and uncertainties. I encourage you refer to the risk factors included in our press release and 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 Non-GAAP to GAAP measures can be found in our earnings press release. We believe providing non-GAAP measures combined with our GAAP results provides a more meaningful representation regarding the Company’s operational performance. I will now turn the call over to founder and CEO, Jeff Green, Jeff?

Thanks, Chris, and good afternoon and thanks to everyone joining us today on. 2016 was a massive year for The Trade Desk. We surpassed $1 billion in total spend resulting in record revenue of $203 million, an increase of 78% compared with a year ago. In 2016, according to PwC, digital advertising grew by about 14%, while programmatic according to IAB grew 19%. We grew about 4 times that, while producing over 30% adjusted EBITDA margins. 2016 was also the year that our omni-channel offering became more mobile and more video focused than display and we have significant momentum heading into 2017. I recently spent time with a CEO of an important agency to us. It was amazing to hear them say point blank right in front of one of their largest clients, one of the biggest consumer brands in the world, that The Trade Desk is the best demand side platform in the market today and is easier to work with than any partner they’ve ever had in digital. That was quite an amazing and humbling endorsement and it really illustrates what we are trying to achieve as a Company. I was just as excited when a much smaller and more nascent technology company came to our corporate headquarters in Ventura California just a few weeks ago. The CEO explained that he is trying make programmatic easier for the little guy. His mission is to make it so SMB advertisers can buy the rest of the internet the same way they buy Facebook. He was so excited to explain that his company is growing 60% every month. He’s adding hundreds of advertisers every month, but he made it clear his business couldn’t exist without The Trade Desk platform and especially the expressive APIs that power his entire business With…

Thanks, Jeff. And good afternoon everyone. Our business continued its strong trajectory in the fourth quarter and we ended 2016 with strong momentum. Total fourth quarter revenue increased 70% year-over-year, led by our mobile in-app channel which grew by over 400% on a year-over-year basis. Our focus in Q4 was to continue to improve our scale and deliver results for advertisers in our seasonally strongest quarter. We delivered on those goals and one of the best indicators of this came during the holiday season where we generated significantly more business from everyone from large consumer product brands to small businesses, all of our customer groups used The Trade Desk platform as a core part of their holiday advertising through their agencies. One of the biggest highlights of the quarter was the increasing importance in mobile and video as Jeff referred to earlier. One example of this shift is, one of our customers which is a connected TV application customer that through their agency spent $5 million on our platform in Q4, 96% of which was either mobile or video. We also had an API customer spend over $1.5 million in the fourth quarter by aggregating spend over 400 SMB advertisers and 56% of that spend was on mobile. More and more advertisers of all sizes and across industries are shifting significant spend into video and mobile Now, as I described last quarter, from an operational perspective we really have three core priorities. Number one and that is to be our customer's independent trusted advisor, number two focused on growing our Omni channel presence and number three continuing to grow our international foot print. Starting with the first item, our goal is to be our customer's trusted advisor. I want to emphasize that The Trade Desk is the only scaled, self-service…

Thanks, Rob, and good afternoon everyone. We are all really pleased with our Q4 performance against our key financial metrics, growing revenue 70% year over year, adjusted EBITDA 53% year over year and GAAP Net Income 81% year over year all while investing aggressively in areas critical to our future growth, and positioning the Company to maximize long-term financial returns. We ended the year with over $1 billion in spend on our platform from approximately $550 million a year ago. The increase in spend was driven by video and mobile video which each grew 111% and 300% respectively. Even display, which is now less than 50% of our total business grew 57% for the year, three times the estimated rate of industry growth. Revenue for the fourth quarter was $72 million, as previously mentioned, up 70% year-over-year. This growth reflects both expansion of our share of spend by our existing customers and the addition of new customers. Approximately 87% of our fourth quarter gross spend came from existing customers and we define existing customers as those that have been with us for more than one year On a yearly basis, revenue for the 2016 fiscal year was $203 million, up 78% year-over-year, with 91% of our year-to-date gross spend coming from existing customers. Our operating expenses increased in parallel with the growth of our business to $48 million in Q4 of 2016 from $25 million during the same period in 2015. The increase in operating expenses was primarily due to our increased investments in personnel and stock based compensation and our newer offices. Lastly, we recorded $12.7 million of income tax expense associated with our taxable income. Our effective tax rate in 2016 was 53%, primarily due to the non-deductibility of warrant expense and the non-deductibility of stock compensation expense,…

Thanks Paul. Before we take your questions, I want to provide a few highlights on the news we issued concurrent with our earnings release today. Today we filed a registration statement for a follow-on offering. I want to stress that this offering is 100% secondary with zero primary shares being offered and therefore zero dilution to shareholders. The offering allows us to provide more liquidity for early investors and employees an opportunity to diversify a small amount of their investment in the Company. We also expected to increase our float and therefore reduce the volatility in the stock. In 2016, connected TV ads grew by 40x for us this past year. Mobile and video are now the majority of our revenue and growing faster than the rest of our business. Our international growth outplaced the U.S. by more than 2x in 2016. And finally, one of our strongest strategic assets is the independence and objectivity that comes with not owning media and it significantly differentiates us from the competition. This is opening doors for us around the world and notably helped us partner with Baidu which has being implemented and rolled out shortly. We enter 2017 with the wind at our backs and with fewer competitors. We continue to surpass our own expectations and are extremely pleased with our results during the quarter and for all of 2016. We have executed well and we're hitting on all cylinders as we enter 2017. So with that, we look forward to your questions. Operator, shall we begin?

Thank you. The floor is now open for questions. [Operator Instructions].

Let's take the first question Mike.

Okay our first question comes from Sean Patel [ph]. Please speak your question.

Could you talk a little bit about how you arrived at the gross spending revenue guidance for the year? It looks like you're implying growth around or even less than 2x the market after going, much faster in the past few years. It certainly below of our numbers, but aside from that can you just talk about, kind of the soft process you use to get to the guide and I have one more follow up.

We’ve guided little bit conservatively, historically simple because so many things have done right for us, 2016 was an amazing year in part because, we had the Olympics in 2016, we had an election in 2016 and then election sort of pushed some of the retail dollars into this -- to the later part of the year, which is what made our Q4 really strong. But we're also were able to make a bunch of investment for the long term, so we know that right down 2017, we're making investment, some of which will pay until 2018, and beyond. And so with all of those things together and trying to [technical difficulty] Wall Street, we know what we need to guide concretively. I know we threw out a lot of numbers throughout the reports that we just gave, but couple that I'll just highlight. We grew Connected TV by 40x, of all the numbers we talked about in last 30 minutes that’s the one that I'm most excited about, between January 2016 and December 2016 for the X growth, in what I think is the most promising channel in media today. We also are able to make investments in Q1 that we've previously guided that we would open offices in the first half of the year and the fact that we were able to Jakarta in at the end of last year, meaning open the office to a significant revenue there, as well as Madrid and Spain, so far this year we're super excited about the impact of that have in the long-term, so you put all that together and we are extremely bullish on and kind of bold in predicting that we'll continue to grow at least double the industry.

Great, and then just a follow-up on the spending. When you look at the implied spending off backs for this year how much of that do you consider to be investment and can you just talk about little more about just what specific areas you consider investment this year?

First, it's kind of hard to distinguish because growth is business as usual for our business. And if you are not capturing share and particularly in the new channels you're going to be shrinking not growing. So it’s hard to actually think of it as like what is your base and what is to grow, it's all the same thing to us. And because we've never known a time where we didn’t have 95% plus client retention it's always investments in retaining and growing the clients that we are already have. That's sort of first and foremost. But we -- by hiring more engineer in 2017 than we ever have before, those are certainly investing for the future. The international I think it's fair to say that we invest double what they contribute in all of our international markets we're using round numbers. So all of that is investments for the future. Inside of televisions we're certainly putting more engineering muscle behind creating a foundation, but if you were to measure it on its own, it's probably not profitable in 2017. But the land grab that that represents is obviously massive.

Thanks Sean. Next question operator?

The next question comes from Brian Fitzgerald. Please state your question.

This is John on for Brian, first off congrats on the quarter. Just a follow-up to that the previous question just once you've made these investments in international and headcounts and on the R&D side also, can you talk to the kind of leveraging the model of how that kind flows thorough maybe 2018 and beyond and then I have a quick follow-up. Thanks.

So every market is different, so some markets like Singapore have been pretty linear where from employee number six on we're profitable. And then our other markets like Germany and Japan where we invest for two to three years before we get that return, and part of that depends on how aggressively we are willing to spend on any individual market and how much confidence we have of the ultimate pay off. In markets like Canada which we expect to be a good investments area for us in 2017, we'll go all-in and I expect the case of that part to look more like Germany and Japan. And so those will pay beyond 2017, in order to pay for themselves, but the way that we think about it is how certain are we that it's going to return, and then how those opportunity is there if we invest now. And because for instance in China, but we think it’s of the [indiscernible] kind where people are hungry for a global omni-channel non-conflicted solution and so and that is something of a no brainer for us to just make a big investment.

Great. Thanks guys. And then just quickly on take rate. It looks like in your guidance that it is kind of stepping down a little bit. I know in the past, you have talked about as you expand into digital video and audio that’s kind of expected to happen. So just curious your thoughts on, is that trend kind of playing along the lines with the initial thoughts and any updates there? Thank you.

You bet. I was hoping somebody would ask this question. For a couple of reason, number one, I just want to reiterate, we don’t use take rate as a core metric of our business. And my hope is that overtime we'll develop a trust with Wall Street that we move to what I think our [technical difficulty] core metrics of our business, particularly the growth of EBITDA and revenue which in our case is net revenue. So the fact that we operated at 32% EBITDA margin for 2016, I think should give people the confident, that the take rate has been a prop before in other cases, meaning for other businesses that have never been profitable take rate becomes a really core metric for their business, because of the profitability. Now that said, as it relates to take rate. There are a number of things that can create slight adjustments for take rates, one is volume discount, another is, there is differences in channel mix and customer mix. And there are -- I expect in 2017 to be slightly more volume discounts and that's just the by-product of having 95% plus client retention and cohorts that are super strong. So we’re going to give discount to those who spend more and we’ve always done that to incentivize them and on the system. So I do think that that will have very slight impact on take rate. However, I just want to point to what again are the core message, which are during that time EBITDA and revenue will be growing in a very healthy phase and that’s the thing that we're optimizing for not that proxy percentage.

Great. Thanks John.

Operator next question.

Our next question comes from Mike [indiscernible]. Please state your question.

Okay. I think that’s me, it’s Mark [indiscernible]. Let me just ask two factual questions please. I think you said it, but the percentage of your revenue or gross and gross spend in 2016 that was international. And then commentary over what’s implied in your guidance for this next year, the percentage that comes from international bulk of spend and with revenue? Thank you very much.

So the first one, I will give rough number. The spent for 2017 in terms of the percentage coming from international market is roughly 10%, comes from international market, which again is meaningfully over investing. So for instance, roughly 20% of our employees are in international markets. But just a commentary on how we’re investing. And because it's serving at roughly down the pace or more than double the pace of the U.S. market we expect that to be something more like 15% in 2017.

Our next question comes from Youssef Squali. Please state your question.

Two questions, on the margin longer term how should we think about your ability to hit that 40% plus that you guys talked about at the IPO. Has the increased level of investments that you're talking about for 2017 either making that potentially harder to get to it or does it just push it out, but in the meantime we're getting hopefully higher top line growth? And then can you maybe just parse out the growth in the fourth quarter that 70% is still very impressive between maybe pricing and volume? Thanks.

So, I'll ask the people in the room to just make sure I answer all those questions. So, what was the 40%? [Multiple Speakers]. Yes, 40% plus, no change in terms of -- 40% into margins. Just again to sort of a check where we're in our journey, we say all the time we're 2% done. So at the state we're at and particularly because of the cost of pitching that header bidding is creating, now it's definitely the period of time where we want to be land grabbing. So, growth in 2017 in some ways is more of a priority than in been in recent years for us. So, now is the time for us to invest and go get further ahead and that's why we're focusing on engineering, that’s why we're opening so many international offices and lastly we opened one international office this year [indiscernible]. So with that sort of investment we're going to grab land, but it's sort of steady state, we still think we're approaching that 40% EBITDA.

There is just so much to go, the 2% like we're still in heavy growth mode and over than next several years we'll be continuing to earn towards 40%, and by the way this is -- we view the investments we're making now as somewhat of an insurance policy to make us more like we get to that 40% in the out years.

What was the other component of the question?

Q4 growth pricing versus volume.

Well yes, the Q4 growth more the result of uptick in volume versus giving prices discounts -- am I getting your -- help me understand your question again?

No that's it, that's exactly it. Just trying to understand the dynamics going on in the marketplace, competitively and how are volume and pricing driving the top line relative to prior quarters, if there has been any change, maybe there hasn't been?

I would say in 2016 we started using a mantra frankly with our clients and with our own team that we haven't in near years past and that, is it is not our goal to be the cheapest platform in the world, it's our goal to be the best. And so, while many years ago we might have tried to underprice others in business, as we tried to ascend the business that we've already won, the way that we do that is in efficacy and in the value that we add, not trying to be the cheapest product. So we spent a lot of time with our customers, pointing to the value that we have, not the price that we offered it at. And because we think we add so much more value, it's really all a byproduct of volume and growth. So it wasn’t just lowering the price, but if we can do it faster than everybody else, there is no way in could have put up the profitability numbers that we did last year, if we had taken that approach. So I think we were able to thread the needle, which is through an optimal growth, which is our first priority and while remaining as profitable as any independent asset company as of now.

Thank you. Our next question comes from Kerry Rice. Pease take your question.

I noticed in the K that you did provide some may be qualitative data on cohorts. Can you talk a little bit, may be more about that, if you can give us any growth rate or any of your key cohorts? And then the second question is, maybe relates to the previous question about volume versus pricing. With the header bidding a being a key trend in the market place, did header bidding raise CPM prices, was that beneficial to you, can you talk a little bit about the impact of header bidding may be in the Q4 and think about it in 2017? Thanks.

Great, so let me start on the cohort and then if I'm missing anything, Rob will just add to it. I'm really glad somebody ask about the cohort, in part because I think it’s the way a lot of people are thinking about the modeling exercise that our company is, giving the color around to help sort of predict what's going to happen. So just a reminder the 2012 and 2013 cohorts represent the smaller customer. So when we first had started, we met with smaller agencies and smaller shops, that we could sort of tact with and not to make mistake, and prove ourselves and create [indiscernible]. So that we could then go to the buyers in the world. And where we really started to see success on that was in 2014, and then in 2015 became I think much easier for us to win the biggest buyers and particularly the biggest agencies in the world. Because we think that those businesses are going to continue to do well, I think there is space to be made, that our 2014 and 2015 cohorts will be some of the strongest cohorts for our future going forward. I think it's fair to assume that and model our revenue. In 2016 and this was helped by the IPO. If that's the first time that we started winning on stages and in the spot light instead of just in conference room. So I think it's fair to say that all of our wins up until the IPO came in conference rooms and we have a little bit of wind at out back since then in term of creating more awareness and winning more customers in sort of the middle size and as a result, those have grown a little bit faster than our biggest, but still I don’t know that we'll ever have a cohort as competitive as our 2014 and 2015 cohorts. Did I leave anything out?

No, the only other prospective I would call out is, what we talk about during the road show is, remember it's still early right. Still the majority of brand are now spending programmatic in any serious way. So we see a lot of growth from brands shifting more dollars from digital in the programmatic and frankly from non-digital directly in the programmatic. So it's still early days both in terms of the number of clients, if you were to look at all the brands out there who are spending programmatically and then secondly the share of their total advertising spend that's in programmatic. So we think the cohorts have a long way to go, the ones we have today and frankly the cohorts that we signed on in 2016 is the strongest one we've ever signed and we expect a lot of growth to come from them in the future too.

As it relates to the second half of your question, which is a really complex management question to answer, which is, the effect of header bidding. Because it creates more competition as well as we because we are able to see more of the premium inventories, results of header bidding, it naturally does move prices upward. And so, do we benefit from that versus any of the cost of the additional volume going, so in other words, because we have to look at more add opportunity, because in some cases the same impression is represented in multipole options, and that's often the case now, that does increase our cost to examine each individual impression and then figure out the right answer. Then because the prices also have gone up that one because we've typically operate on a percentage of spend we benefit from the raising prices, but as the process of the volume has gone up and when you put those two things together they roughly offset each other. So it's hard to say what the net effect was because it's almost zero, but the most important piece is that the value-adds that we provide to our customers has gone up meaningfully, because the water could become a little bit more choppy if you will and so the need for you to examine everything and use data to make sure that you are making the best choices has gone up, and the odds of being successful without being data-driven have gone down, And so all of that looks like good news for us and if you also think that that puts pressure on our competitor, most of which are not profitable because of that dynamic and particularly if you are not growing stocks, as we are, I think there is a strong case to be made that none of them are. Than we separate it from the pack while having very little impacts upon our profitability and expenses. So overall under our competitive basis that header bidding dynamic benefits us probably as much or more than every other company in advertising in the world.

Thank you.

[Operator Instructions] Our next question comes from Aaron Kessler. Please state your question.

First just on the Q1 guide, I believe that implies roughly 40% sequential decline, should we think and I realize there is obviously seasonality in the business, but is there a little more kind of conservatism built in there. And just maybe an update on thus far, what you are seeing through mid-February. And I think previously you've talked about -- you've touched about 10% of the brands, just where does that statistic stand now? And finally, I think you've mentioned international is up 10% today. What's your thoughts on what the outlook is like in maybe two to three years? Thank you.

I'll take the first part of the question and I'll ask Rob to speak on the 10% of brand question. So as it relates to the sort of guidance in Q1 -- for Q1. It is definitely fair to say that Q1 is the hardest quarter for us, forecasting guidance. And it’s because they is seasonal nature to advertising, people tend to start the year reconsidering how they allocate budgets. And while we're sort of an install inside of the agencies and technologies providers that we power, that it doesn’t mean that they're not susceptible to that seasonality. And then when you are coming off of the election year and a little bit from all those things, that maybe 2016 needs forecasting for the year, it’s harder. And particularly when you have such an amazing year like we did. We want to make certain that we provide guidance, that we know that we can hit. So while those people are excited to report that we are growing at at least double the industry, we also recognize that we have a lot of trust that we have to gain on behalf of sort of ad-tech community and we know that has to be reflected in the guidance that we provide.

Great. And I'll jump in. In terms of brand adoption of programmatic we touched on briefly earlier, just to reiterate and be more clear on that one. So yes, most of the big agencies that have rosters of advertisers in the hundreds, they’re still sort of double-digits 10%, 20%, 30% of the brands inside many of the agencies, that have adopted programmatic in a serious way. There is another incremental percentage that’s experimenting with small -- very small parts of their advertising budget. So when we look at the penetration within the agencies and then their brands that they aggregate and service, we just see a long runway to go, it’s way less than the majority of brand that are spending in programmatic in any serious way. So we think in our cohort, as Jeff talk about in ’14, ’15 and ’16 as we signed most of the large global agencies. There is just a ton to runway to go in terms of brand adopting programmatic and then working on creating a platform. And I think the last question you asked is around international growth. And I think Jeff mentioned it perhaps early in call, roughly about 10% by the end of last year and we are over investing, particularly in the key international markets like China and Indonesia. We’ve got really strong positions throughout Southeast Asia with our presence in Singapore. We’ve got in Korea and Japan for three years, we’ve been in Europe for four years. We expect to all of those to continue to grow much faster than the U.S. and therefore take relative share as a percent of our total business. So I think we talked about heading towards a 15%-ish percent by the end of this year.

Got it. I just have one quick follow-up. Election sounded like it was decent -- decent traction with election in Q4. Can you give us a rough sense maybe how much gross spend was in election that you benefited from?

So directly, it was in the low-single digits. So it wasn’t like some massive amount of our spent. So as we think about the future is not like you should massively downgrade what would happen in 2017 because there aren’t any U.S. elections, there is nothing like that at play. That said, when you combined the average of header bidding, with the increase competition that comes from having the election and most notably, as a consumer certainly, I'm sure everybody in this call, if you were looking closely, notice that there was way less retail advertising prior to the election in November and then there was a little bit of percent making up for the lost time, particularly in inside of TV. So that had an interesting dynamic on prices, that had a bigger impact on our business than just low-single digit percentage of that due to election.

Got it. Great. Thank you.

Operator?

Thank you. There appear to be no further questions at this time. And this will conclude today’s conference. We thank you for your participation and you may disconnect your lines at this time and have a great day.