The Trade Desk, Inc.
Q4 2020 Earnings Call Transcript

Published: 18 Feb 2021

[Operator:]

Good afternoon, ladies and gentlemen, and welcome to the Trade Desk Fourth Quarter and Full-Year 2020 Earnings Conference Call. At this time, all participants have been placed on a listen-only mode and the floor will be opened for your questions and comments following the presentation. It is now my pleasure to turn the floor over to your host, Chris Toth, Vice President of Investor Relations. Sir, the floor is yours.

[Chris Toth:]

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.

[Jeff Green:]

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.

[Blake Grayson:]

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.

[Operator:]

Certainly. Ladies and gentlemen, the floor is now open for questions. Your first question is coming from Michael Levine. Your line is live.

[MichaelLevine:]

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?

[JeffGreen:]

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.

[Michael Levine:]

Great. Thank you so much for the color.

[Jeff Green:]

You bet.

[Operator:]

Your next question is coming from Shyam Patil. Your line is live.

[ShyamPatil:]

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.

[BlakeGrayson:]

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.

[JeffGreen:]

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.

[Operator:]

Your next question is coming from Vasily Karasyov.

[VasilyKarasyov:]

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.

[JeffGreen:]

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.

[Operator:]

Your next question is coming from Youssef Squali.

[YoussefSquali:]

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.

[JeffGreen:]

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.

[Operator:]

Your next question is coming from Brian Fitzgerald.

[BrianFitzgerald:]

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?

[JeffGreen:]

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.

[Operator:]

Your next question is coming from David Beckel with Berenberg.

[DavidBeckel:]

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.

[JeffGreen:]

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.

[Operator:]

Your next question is coming from Justin Patterson with KeyBanc.

[JustinPatterson:]

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.

[JeffGreen:]

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?

[BlakeGrayson:]

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.

[JeffGreen:]

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.

[Operator:]

Your last question today is coming from Brent Thill with Jefferies.

[JamesHeaney:]

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.

[JeffGreen:]

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.

[Operator:]

I would now like to turn the floor back to Chris Toth for closing remarks.

[Chris Toth:]

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.

[Operator:]

Thank you, ladies and gentlemen. This does conclude today's conference call. You may disconnect your phone lines at this time, and have a wonderful day. Thank you for your participation.