Enterprise Value to FCFF (EV/FCFF)
Free Cash Flow to The Firm (FCFF)
Trade Desk Inc., FCFF calculation
US$ in thousands
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
- Net cash provided by operating activities
- There is an overall upward trend in net cash provided by operating activities from 2020 to 2024. The value decreased slightly from 405,069 thousand US dollars in 2020 to 378,513 thousand in 2021, indicating a reduction in operating cash inflows during that period. However, beginning in 2022, the operating cash flows increased significantly, reaching 548,734 thousand, followed by a continued rise to 598,322 thousand in 2023, and further increasing to 739,456 thousand in 2024. This improvement suggests enhanced operational efficiency or growth in cash-generating activities over the latter years.
- Free cash flow to the firm (FCFF)
- The free cash flow to the firm follows a pattern similar to the operating cash flow, showing an initial decline from 326,183 thousand US dollars in 2020 to 318,949 thousand in 2021. After this trough, FCFF grows substantially in the subsequent years, reaching 457,266 thousand in 2022, then rising to 543,948 thousand in 2023, and further to 633,158 thousand in 2024. This indicates an improving ability to generate cash available to all capital providers, reflecting positive cash management and possibly reduced capital expenditures or changes in working capital consistent with stronger operational cash flows.
Interest Paid, Net of Tax
Trade Desk Inc., interest paid, net of tax calculation
US$ in thousands
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
2 2024 Calculation
Cash paid for interest, tax = Cash paid for interest × EITR
= 986 × 22.50% = 222
- Effective Income Tax Rate (EITR)
- The effective income tax rate experienced notable fluctuations over the five-year period. It remained stable at 21% in both 2020 and 2021. A significant spike occurred in 2022, reaching 58.1%, which more than doubled the rate compared to the previous two years. Subsequently, the rate decreased to 33.2% in 2023 and further declined to 22.5% by the end of 2024. This pattern indicates a temporary but considerable increase in tax expenses in 2022 followed by a gradual return towards earlier, lower tax rates.
- Cash Paid for Interest, Net of Tax
- Cash outflows related to interest payments, net of tax, showed a declining trend from 1,228 thousand US dollars in 2020 to 409 thousand US dollars in 2021. After this sharp decrease, the interest paid remained relatively stable at 417 thousand in 2022. However, there was an upward trend in the subsequent years, with values increasing to 646 thousand in 2023 and reaching 764 thousand in 2024. Overall, after an initial reduction, interest expenses began to rise again in the latter part of the period, suggesting either increased debt levels or higher interest rates.
Enterprise Value to FCFF Ratio, Current
Trade Desk Inc., current EV/FCFF calculation, comparison to benchmarks
| Selected Financial Data (US$ in thousands) | |
| Enterprise value (EV) | 20,995,263) |
| Free cash flow to the firm (FCFF) | 633,158) |
| Valuation Ratio | |
| EV/FCFF | 33.16 |
| Benchmarks | |
| EV/FCFF, Competitors1 | |
| Alphabet Inc. | 40.05 |
| Charter Communications Inc. | 18.49 |
| Comcast Corp. | 13.35 |
| Meta Platforms Inc. | 34.08 |
| Netflix Inc. | 68.93 |
| Walt Disney Co. | 23.73 |
| EV/FCFF, Sector | |
| Media & Entertainment | 34.85 |
| EV/FCFF, Industry | |
| Communication Services | 30.16 |
Based on: 10-K (reporting date: 2024-12-31).
1 Click competitor name to see calculations.
If the company EV/FCFF is lower then the EV/FCFF of benchmark then company is relatively undervalued.
Otherwise, if the company EV/FCFF is higher then the EV/FCFF of benchmark then company is relatively overvalued.
Enterprise Value to FCFF Ratio, Historical
Trade Desk Inc., historical EV/FCFF calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Enterprise value (EV)1 | 33,826,652) | 35,637,119) | 31,093,109) | 38,269,025) | 42,178,716) | |
| Free cash flow to the firm (FCFF)2 | 633,158) | 543,948) | 457,266) | 318,949) | 326,183) | |
| Valuation Ratio | ||||||
| EV/FCFF3 | 53.43 | 65.52 | 68.00 | 119.98 | 129.31 | |
| Benchmarks | ||||||
| EV/FCFF, Competitors4 | ||||||
| Alphabet Inc. | 31.26 | 24.03 | 20.87 | 27.17 | 29.53 | |
| Charter Communications Inc. | 20.27 | 20.57 | 17.68 | 16.46 | 20.62 | |
| Comcast Corp. | 14.02 | 17.60 | 17.93 | 15.77 | 20.50 | |
| Meta Platforms Inc. | 30.96 | 26.42 | 24.09 | 15.40 | 29.48 | |
| Netflix Inc. | 56.17 | 33.81 | 77.11 | 335.37 | 95.41 | |
| Walt Disney Co. | 23.13 | 31.55 | 90.23 | 78.66 | 63.77 | |
| EV/FCFF, Sector | ||||||
| Media & Entertainment | 29.68 | 24.72 | 23.40 | 24.31 | 30.82 | |
| EV/FCFF, Industry | ||||||
| Communication Services | 26.19 | 22.41 | 23.20 | 30.46 | 25.63 | |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
3 2024 Calculation
EV/FCFF = EV ÷ FCFF
= 33,826,652 ÷ 633,158 = 53.43
4 Click competitor name to see calculations.
- Enterprise Value (EV)
- The enterprise value demonstrates a declining trend over the examined period, starting at approximately $42.18 billion at the end of 2020 and decreasing to around $33.83 billion by the end of 2024. Notable decreases occurred between 2020 and 2022, with a slight uptick in 2023, followed by a moderate decline again in 2024.
- Free Cash Flow to the Firm (FCFF)
- Free cash flow exhibited consistent growth throughout the observed timeframe. Beginning at roughly $326 million at the end of 2020, it increased steadily and substantially, reaching approximately $633 million by the end of 2024. This upward trajectory indicates improving cash generation capabilities.
- EV/FCFF Ratio
- The EV/FCFF ratio experienced a pronounced decline over the period, moving from a very high multiple of about 129.31 in 2020 to a considerably lower multiple of 53.43 by 2024. This reflects a trend towards greater valuation efficiency relative to cash flow generation, driven both by decreasing enterprise value and increasing free cash flow.
- Summary and Insights
- The data reveals a shift in company valuation metrics characterized by diminishing enterprise value alongside growing free cash flows, resulting in a materially lower EV/FCFF ratio. This combination could indicate enhanced operational performance or improved cash flow generation capacity relative to market valuation. The contraction of enterprise value amidst rising free cash flow may also reflect changes in investor sentiment, market conditions, or strategic repositioning, signaling a potentially more attractive valuation from a cash flow perspective over time.