The Trade Desk, Inc. (NASDAQ:TTD) Q3 2019 Earnings Conference Call - Final Transcript
Nov 07, 2019 • 05:00 pm ET
Jeffrey Terry Green
current spend with us is still small relative to what we expect them to do in 2020 and beyond.
The third area is Connected TV. As I discussed, the progress we have made in adding premium inventory supply from the likes of Amazon, Disney, and others is driving more and more advertisers to apply data to their huge TV ad campaigns for the first time. This has helped our CTV spend increased materially. We expect CTV growth of over 100% again in 2020. Fourth, global expansion. We've made significant investments outside of the US over the last two years. We believe we are in a position to accelerate our international growth in 2020. Fifth, we continue to invest heavily to stay at the forefront of innovation in our industry. We have seen major success with products such as cross device data and identity solutions and expect to continue that trend with new products that we launched in 2020.
And finally, we have an extremely strong customer retention rates and expect to maintain those rates, even as we expand our customer base. This model of excellence in customer service has fueled this business since its inception. Our goal is to continue to offer the best scale of objective media buying platform in the world. All of that said, and with all that great momentum, we're still just getting started. As our numbers quarter-after-quarter show, The Trade Desk is growing much faster than the market. We anticipate these trends will continue for the rest of this year and into 2020.
Now I'm going to turn the call over to Paul to discuss our financials.
Paul E. Ross
Thanks, Jeff, and good afternoon everyone. Q3 was another record quarter for The Trade Desk, and we were really pleased with our Q3 financial performance and execution. Revenue increased 38% year-over-year. Adjusted EBITDA increased to $47.8 million, a Q3 record, and net income was $19.4 million. This marks our 14th consecutive quarter in a row of GAAP net income, all while we continue to invest aggressively for future growth. Revenue for the third quarter was a record $164.2 million, which was above our expectations and reflected increased spend by our existing customers, and the addition of new customers and advertisers. For the quarter, approximately 89% of our third quarter gross spend came from existing customers who have been on our platform for longer than a year. Q3 marked the 23rd quarter in a row where customer retention was over 95%.
With the growth of our business, our operating expenses grew $242 million in Q3. This increase was primarily due to sales and marketing and engineering as we continue to scale for growth. The year-over-year increase also reflected higher G&A expenses, which take into account stock-based compensation. GAAP net income was $19.4 million for Q3, or $0.40 per fully diluted share. Our adjusted net income was $36.1 million, or $0.75 per fully diluted share, compared with adjusted net income of $30.2 million or $0.65 per share in the comparable