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Trade Desk, Inc. (TTD)·Q2 2025 Earnings Summary

Executive Summary

  • Revenue grew 19% year-over-year to $694.0M, beating S&P Global consensus by ~$8.0M; non-GAAP diluted EPS of $0.41 was essentially in-line to a slight miss versus the $0.414 consensus. Q3 guidance was set at revenue at least $717M and adjusted EBITDA ~$277M . Revenue consensus: $686.0M*; EPS consensus: $0.414*.
  • Strength was led by CTV and retail media; Kokai adoption reached roughly three-quarters of client spend, supporting measurable KPI improvements and driving faster spend growth among adopters .
  • Operating discipline and cash generation remained solid: adjusted EBITDA of $270.8M (39% margin) and $261M of buybacks in Q2; cash and short-term investments totaled ~$1.69B at quarter-end .
  • Management cited macro tariff uncertainty for large global brands but emphasized programmatic agility and share gains as tailwinds; reiterated leadership in CTV and independence versus walled gardens as strategic differentiators .
  • Near-term catalysts: inclusion in S&P 500 in July, growing Kokai penetration, deepening CTV partnerships (e.g., Disney and Deal Desk), and expanding retail data integrations .

What Went Well and What Went Wrong

What Went Well

  • CTV-led growth with video comprising a high-40s share; Kokai adoption at ~75% of spend delivering 20%+ KPI improvements and accelerating client spend growth for adopters; strong retention remained above 95% .
  • Revenue beat versus consensus and Q2 guidance; adjusted EBITDA exceeded guidance; continued cash generation and disciplined buybacks ($261M) .
  • Strategic partnerships and product innovation: Deal Desk (Disney early adopter), OpenPath efficiency gains (e.g., New York Post +97% programmatic display revenue), expanded retail data and measurement integrations (Instacart, NIQ, EDO) .

Example management quote:

  • “Around three quarters of all client spend is now running through Kokai… clients who have transitioned the majority of their spend on Kokai are increasing their overall spend on The Trade Desk by more than 20% faster…” — Jeff Green .

What Went Wrong

  • EPS was marginally below S&P Global consensus; adjusted EBITDA margin compressed year-over-year (39% vs 41%) amid higher operating investments and stock-based compensation .
  • Management highlighted tariff-driven uncertainty for large brands in autos and CPG; mix softness in Home & Garden and Style & Fashion versus corporate rate .
  • GAAP diluted EPS and net income margin declined sequentially from Q4 seasonality (Q2 diluted EPS $0.18; margin 13%) and remained below Q4 peak levels; stock-based comp totaled ~$128.9M in Q2 .

Financial Results

MetricQ4 2024Q1 2025Q2 2025
Revenue ($USD)$741,012,000 $616,021,000 $694,039,000
Net Income ($USD)$182,229,000 $50,678,000 $90,129,000
GAAP Diluted EPS ($)$0.36 $0.10 $0.18
Net Income Margin (%)25% 8% 13%
Adjusted EBITDA ($USD)$349,984,000 $207,875,000 $270,755,000
Adjusted EBITDA Margin (%)47% 34% 39%
Non-GAAP Diluted EPS ($)$0.59 $0.33 $0.41

Q2 2025 vs Wall Street estimates (S&P Global):

MetricQ2 2025 ConsensusQ2 2025 Actual
Revenue ($USD)$686,027,590*$694,039,000
Non-GAAP Diluted EPS ($)$0.4138*$0.41

Values retrieved from S&P Global.*

Segment/channel mix and geography:

Mix KPIQ1 2025Q2 2025
Video incl. CTV (% of spend)High-40s High-40s
Mobile (% of spend)Mid-30s Mid-30s
Display (% of spend)Low double-digit Low double-digit
Audio (% of spend)~5% ~5%
North America (% of spend)~88% ~86%
International (% of spend)~12% ~14%

Operating KPIs:

KPIQ1 2025Q2 2025
Customer Retention (%)>95% >95%
Kokai Adoption (% of spend)~two-thirds ~three-quarters
DSOs (days)85 91
DPOs (days)70 77
Share Repurchases ($USD)$386,250,000 $261,000,000
Cash and Equivalents ($USD)$1,118,545,000 $896,387,000
Short-term Investments ($USD)$621,826,000 $790,874,000

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($USD)Q2 2025≥ $682,000,000 Actual $694,039,000 Raised/Beat
Adjusted EBITDA ($USD)Q2 2025~ $259,000,000 Actual $270,755,000 Raised/Beat
Revenue ($USD)Q3 2025N/A≥ $717,000,000 New
Adjusted EBITDA ($USD)Q3 2025N/A~ $277,000,000 New

Earnings Call Themes & Trends

TopicQ4 2024 (Q-2)Q1 2025 (Q-1)Q2 2025 (Current)Trend
AI/KokaiAnnounced major platform upgrades; set foundation for 2025 Adoption at ~2/3 of clients; KPI improvements (e.g., 24% lower CPCV, 20% lower CPA) ~3/4 of spend; 20%+ KPI lift; agentic AI roadmap; faster client spend growth Accelerating adoption/performance
Supply Chain/OpenPathEmphasis on efficiency; Sincera acquisition agreement OpenPath examples (Arena Group +4x fill, NY Post +97% revenue); plan Open Sincera More publisher wins (e.g., Freestar +3x fill, +27% programmatic revenue); OpenSincera live; Deal Desk beta Broadening impact
CTV MomentumCTV positioned as kingpin of open internet CTV fastest growing; video high-40s share; upfronts favor flexibility Continued CTV-led growth; live sports biddable moments with Disney/Sky/Omnicom Sustained secular tailwind
Retail Media/DataWalmart DSP traction; retail data marketplace Retail data adoption rising; measurable outcomes Expanded integrations (Instacart, NIQ, Visa ANZ); more spend influenced by retail data Expanding footprint
Regulatory/Walled GardensDOJ/antitrust scrutiny; independence emphasized Courts curb walled gardens; Google deemphasizing open internet; cookies reversal context Objectivity narrative vs Amazon/Google; independence as key differentiator Favorable to open internet
Macro/TariffsSeasonally strong Q4 but noted volatility Volatility among large brands; focus on “grab land” Brands’ tariff uncertainty in autos/CPG noted; guidance assumes stability Watch macro; programmatic resilience
Leadership/OrgAdditional buyback authorization; OS “Ventura” New COO Vivek Kundra CFO transition to Alex Kayyal; Omar Tawakol joins Board; S&P 500 inclusion Strengthening team/governance

Management Commentary

  • “Kokai gives advertisers unprecedented power… powered by the industry's most advanced AI technology, Koa… clients that have adopted Kokai have seen tremendous performance improvements… around three quarters of all client spend is now running through Kokai” — Jeff Green (prepared remarks) .
  • “In Q2 video which includes CTV represented a high 40s percentage… Mobile mid-30s… display low double digit… audio around 5%… International growth once again outpaced North America” — Laura Schenkein .
  • “Disney is one of the first publishers to lean into DealDesk… shift 75% of their ad revenue to biddable programmatic by 2027” — Jeff Green .
  • “Assuming the macro environment remains stable… we expect Q3 revenues to be at least $717 million… adjusted EBITDA approximately $277 million” — Laura Schenkein .

Q&A Highlights

  • Amazon competitive positioning: TTD framed Amazon’s DSP as focused on Prime Video and not an objective open-internet buyer; independence and objectivity were emphasized as long-term advantages, with potential partnership if Prime Video opens to external demand .
  • Macro/tariff uncertainty: Management cited Q2 stabilization after early-quarter volatility in autos/CPG; reiterated programmatic agility and expectation to “grab land” amid macro headwinds .
  • Kokai ROI and AI: Clients see >20% KPI improvements; agentic AI vision for always-on optimization; strong iteration and product velocity; Deal Desk beta gaining traction with publishers/advertisers .
  • Mix softness: Home & Garden (~8% of spend) and Style & Fashion (~4%) were below corporate growth rate due to seasonality and category dynamics .
  • SMB strategy: TTD remains focused on large enterprises (the “fat head”) near-term; plans to move down-market over time as Kokai usability advances, but sees abundant TAM within large clients and CTV .

Estimates Context

  • Q2 2025 revenue beat consensus ($694.0M vs $686.0M*), while non-GAAP diluted EPS was marginally below consensus ($0.41 vs $0.4138*). Adjusted EBITDA exceeded internal guidance, but S&P “EBITDA” estimates reflect different definitions and are not directly comparable to company Adjusted EBITDA .
  • Q3 2025 guidance (≥$717M revenue; ~$277M adjusted EBITDA) compares to S&P consensus revenue of ~$719.3M* and EBITDA of ~$278.8M*, suggesting guidance broadly aligned with Street expectations at the time .
  • FY 2025 consensus: revenue ~$2.889B* and EPS ~$1.774* provide a baseline for modeling post-Q2; given CTV and Kokai momentum, revenue estimates may trend higher; EPS trajectory depends on investment pace and stock-based comp dynamics.

Values retrieved from S&P Global.*

Key Takeaways for Investors

  • CTV and retail media are driving outperformance; continued Kokai penetration is a measurable lever for share gains and ROI — favor companies prioritizing decisioned/biddable TV and outcome-based measurement .
  • Independence/objectivity versus walled gardens is resonating with large brands; watch for accelerating JBPs and deepening publisher integrations (e.g., Disney, live sports targeting) as catalysts .
  • Financial execution remains solid: consistent double-digit revenue growth, strong adjusted EBITDA, and opportunistic buybacks; monitor DSOs/DPOs and stock-based comp as moving parts for margins and cash flow .
  • Guidance is prudent amid macro/tariffs; if conditions improve, upside exists; downside buffered by programmatic agility and share capture strategy .
  • S&P 500 inclusion increases visibility and potential index-related demand; leadership additions (CFO Kayyal; Board member Tawakol) reinforce strategic and AI credentials .
  • Near-term trading: revenue beat vs consensus and guidance raise for Q3 support positive bias; EPS slight miss and margin compression could cap immediate upside; narrative-driven strength favors buying dips into CTV/Kokai momentum .
  • Medium-term thesis: sustained CTV share shift, expanding retail media measurement, and AI-enhanced buying (Kokai/Deal Desk/OpenSincera) underpin durable growth and margin scalability as platform effects deepen .
Bold markers indicate notable beats/misses and surprises in narrative above.