Trade Desk Inc. (NASDAQ:TTD)

Receivables Turnover

The receivables turnover ratio exhibits an overall increasing trend from 0.53 at the start of the observed period to 0.82 by the latest quarter. This indicates improvement in the company's efficiency in collecting its receivables over time. Minor fluctuations are present, but the values consistently hover around the 0.7 to 0.8 range after the initial increase.

Payables Turnover

The payables turnover ratio shows a gradual increase from 0.13 to 0.20 over the periods analyzed. The ratio remains relatively stable between 0.16 and 0.18 during much of the timeline before a noticeable uptick occurs toward the end. This suggests a trend toward slightly faster payment to suppliers, but the overall changes are moderate.

Working Capital Turnover

The working capital turnover ratio maintains a generally steady pattern near the value of 1 throughout the periods, starting just below 1.0 and showing some dips and recoveries. A slight decline is observed around the middle of the timeline, with values dropping to approximately 0.87, followed by a recovery and gradual increase to 1.27 by the most recent quarter. This indicates improving efficiency in utilizing working capital to generate revenue, especially in the later periods.

Average Receivable Collection Period (days)

The average receivable collection period demonstrates a declining trend, moving from 692 days down to around 443 days, which signals an improvement in the speed of collection. While some fluctuations occur, the overall direction is toward shorter collection periods, reflecting potentially enhanced cash flow management and credit policies.

Average Payables Payment Period (days)

The average payables payment period starts very high at 2753 days and shows a consistent downward trend to 1802 days by the end of the timeline. This indicates a tendency to shorten payment terms to suppliers gradually. Although the period remains relatively long, the reduction suggests efforts to improve supplier payment timing, possibly to balance working capital requirements with supplier relations.

Revenue Trends

Revenue exhibits notable fluctuations across the quarters presented. Initial revenue in early 2020 showed a decline from $160.7 million in March to $139.4 million in June, followed by a significant increase to $319.9 million by December 2020. The first quarter of 2021 reveals a sharp decline to $219.8 million, but revenue then trends upwards steadily, peaking at $605.8 million by December 2023. This indicates a strong growth phase in the latter part of the period, particularly from late 2021 onwards. The most recent quarters in 2024 and early 2025 maintain elevated revenue levels, though with some volatility, fluctuating between approximately $491.3 million and $741.0 million.

Accounts Receivable, Net of Allowance for Credit Losses

Accounts receivable demonstrate a consistent upward trend throughout the period. Beginning at $948.0 million in March 2020, receivables increase steadily to a peak of $3.33 billion in March 2025. This rise is largely uninterrupted, showing continuous growth each quarter. The growth rate of receivables appears somewhat aligned with the growth in revenue, though the relative increase in receivables is more pronounced, indicating a possible lengthening of collection periods or higher credit extended to customers over time.

Receivables Turnover Ratio

The receivables turnover ratio, available from September 2020 onwards, ranges primarily between 0.53 and 0.84. Initial ratios start relatively low around 0.53 but improve consistently, reaching highs of 0.84 by mid-2025. This trend suggests an improvement in the efficiency of collecting receivables despite the large absolute increases in receivables balances. However, the turnover ratio is somewhat volatile, with periodic declines such as in December 2021 and March 2024, indicating occasional challenges in collection cycles.

Overall Analysis

The data presents a scenario of robust revenue growth combined with a steadily increasing accounts receivable balance, which may reflect expanding business activity, extended credit terms, or changes in customer payment behavior. The improvement in receivables turnover ratio over time suggests enhanced credit management and collection efficiency, though some volatility remains. The correlation between revenue and receivables suggests growth-driven increases in working capital requirements. Careful monitoring of receivables collections is advisable to maintain financial health as the business scales.

The analyzed financial data reveals several notable trends and patterns over the observed quarters. The "Platform operations" revenue, reported in thousands of US dollars, exhibits a consistent upward trajectory. Beginning at 40,208 in the first quarter of 2020, the value increases steadily across the periods, reaching 150,980 by the fourth quarter of 2025. This rise reflects sustained growth in operational income, with occasional acceleration in later years, suggesting strengthening business activities or market expansion.

Conversely, the "Accounts payable" figures, also in thousands of US dollars, display more volatility but generally follow an increasing trend as well. Starting at 663,410 in the first quarter of 2020, accounts payable peaks and troughs over successive quarters. Notably, there is a sharp rise towards the end of 2021, hitting 2,315,318 in the fourth quarter of 2021, then experiencing fluctuations around the two-million mark in subsequent periods. This pattern indicates increasing obligations to suppliers or creditors, potentially connected with higher operational scales or altered payment terms.

The "Payables turnover" ratio provides insight into the efficiency of managing accounts payable. Data beginning from the third quarter of 2020 shows values fluctuating between 0.13 and 0.21. Throughout the entire timeframe, the ratio maintains a moderate level with slight improvements over time. The turnover ratio moves from 0.13 in the third quarter of 2020 to 0.20 by the second quarter of 2025, implying a modest acceleration in how quickly the company settles its payables relative to purchases or cost of sales. This suggests enhanced operational management or changes in vendor payment cycles.

In summary, the revenue from platform operations steadily increases, indicating growing business activity. Accounts payable escalate substantially, reflecting either larger scale operations or extended credit terms. The payables turnover ratio's gradual rise points to improved or efficient management of payables, balancing growth in liabilities and operational capabilities. These trends collectively suggest the company is expanding while maintaining reasonable control over its payment obligations.

Working Capital

The working capital exhibits a general upward trend from March 31, 2020 to June 30, 2025. Starting at approximately $707 million in early 2020, it increases steadily, reaching a peak of about $2.46 billion by December 31, 2024. However, there is a slight decline observed in the last two quarters, where the working capital falls from approximately $2.17 billion in March 31, 2025 to $2.10 billion by June 30, 2025. This overall increase suggests expansion in current assets relative to current liabilities over the period, indicative of improved short-term financial health, although the slight decline at the end warrants monitoring.

Revenue

Revenue demonstrates notable volatility and growth over the presented periods. Initially, revenue was $160.7 million in March 2020, declining to $139.4 million by June 2020, followed by a significant rise to $319.9 million at the end of 2020. After a dip in the first quarter of 2021 ($219.8 million), revenue steadily increases with intermittent fluctuations, reaching $741 million by the end of 2024. The revenue peaks are generally observed at the turn of the years. The quarters of 2025 show a slight decline, ending at $694 million. Overall, the data reflects strong revenue growth with seasonal or cyclical variations.

Working Capital Turnover Ratio

The working capital turnover ratio, though incomplete in data before 2020, shows fluctuating but generally stable values between 0.87 and 1.27 from 2020 onward. It hovers around 1.0 for most quarters, indicating that revenue generation relative to working capital remains fairly consistent. There is a slight downward trend around 2021 and 2022 with ratios dropping below 1.0 (minimum around 0.87), which might suggest a temporary decrease in efficiency in using working capital to generate sales. In 2024 and 2025, the ratio rises again, peaking at 1.27 by June 2025, signaling an improvement in operational efficiency in those periods.

Overall Trends and Insights

Over the full timeline, the company shows growth in working capital and revenue, suggesting an increase in scale and business activity. Despite some short-term volatility in revenue and working capital turnover, the general trend indicates improving operational effectiveness, especially in the last two years. The increase in working capital turnover ratio toward the end hints at enhanced utilization of working capital to drive sales. The slight recent decline in working capital and revenue during early 2025 may be indicative of emerging challenges or cyclical adjustment and should be carefully monitored for potential impacts on liquidity and operational performance.

Receivables Turnover Ratio

The receivables turnover ratio shows a fluctuating but generally increasing trend over the observed periods, starting at 0.53 and reaching 0.82 by the last recorded quarter. Initial values rose steadily from 0.53 to 0.69 between March 2021 and December 2021, followed by a dip to 0.59 in March 2022. Subsequently, the ratio improved again, reaching peaks close to 0.79 in June 2023 and sustaining above 0.7 in most later quarters. This upward trajectory suggests an improvement in the efficiency of receivables collection over time.

Average Receivable Collection Period

The average collection period mirrors the inverse relationship with the receivables turnover ratio. It initially decreased from 692 days to 529 days between March 2021 and December 2021, indicating faster collection times. This was followed by some variability, with the period rising to 616 days in March 2022, then steady decreases to as low as 463 days in June 2023. The latter quarters reveal fluctuations between approximately 434 and 538 days, with a general improvement in receivable collections speed compared to earlier periods.

Overall Insights

Both metrics indicate that the company has improved its receivables management efficiency over the timeline. The increase in receivables turnover ratio alongside the decrease in average collection period suggests a trend toward quicker cash conversions from sales on credit. Although there are intermittent reversals, the broad pattern points to improved liquidity and potentially enhanced credit policies or collection efforts. Continued monitoring is advisable to maintain this positive trend and address the occasional increases in collection days.

The payables turnover ratio demonstrates a moderate upward trend over the observed periods, starting from a low base of 0.13 and increasing gradually to 0.21 before slightly declining to 0.20 by the final period. This suggests a generally improving efficiency in the company's management of payables, indicating faster payment to suppliers or better use of credit terms.

Correspondingly, the average payables payment period, measured in number of days, fluctuates but shows a general declining trend from a peak of 2753 days to 1713 days in one of the latest quarters before slightly increasing again to 1802 days. The decrease in days aligns with the increase in payables turnover, reflecting a shorter duration to settle payables, which may imply more effective cash flow management or changes in supplier payment policies.

Payables Turnover Ratio

Initially low and relatively stable, it increased gradually from 0.13 to 0.21, suggesting enhanced payment efficiency.

Minor fluctuations in the latter periods did not substantially reverse the overall improving trend.

Average Payables Payment Period

Started very high around 2753 days, then generally declined to approximately 1713 days, indicating faster payment cycles.

Some volatility is evident, but the overall movement points toward a reduction in the time taken to pay suppliers.

The inverse relationship between these two metrics is consistent with typical financial behavior; as turnover increases, the payment period tends to decrease. Collectively, these trends may reflect an intentional strategic approach to managing liabilities more efficiently over time.