TTD Q2 2025: Kokai AI Boosts KPIs 20%+, Full Rollout by Year-End
- AI-driven product innovation: TTD’s rollout of the Kokai platform has already delivered dramatic performance improvements—clients have seen over 20% uplift on key KPIs, with some seeing up to 43-73% gains—and its distributed AI model positions the company to continuously optimize campaigns and accelerate client spend growth over time.
- Resilient growth in a volatile macro environment: Despite tariff-related uncertainties impacting large global brands, TTD’s focus on programmatic advertising—marked by increasing joint business plans and flexible commitments—demonstrates how its agility and performance-based solutions help clients navigate volatility and drive market share gains.
- Superior positioning versus walled gardens: By emphasizing objectivity, transparency, and access to the premium open Internet, TTD differentiates itself from competitors like Amazon whose bias toward owned media undermines their credibility. This unique value proposition builds trust with major brands and supports a compelling long-term growth narrative.
- Uncertainty in macro conditions: Persistent tariff-related concerns may dampen advertising spend from key large brands, creating volatility and potentially slowing revenue growth in the near term.
- Competitive pressure from walled gardens: Despite a strong open Internet thesis, rapid growth and easier optimization by walled garden platforms (e.g., Amazon) might continue to capture greater ad spend, challenging TTD’s market share shift.
- Risks with new platform adoption: While early Kokai performance gains of about 20% KPI improvement are promising, there is uncertainty if these gains will build consistently over time or plateau, which could limit further client reinvestment.
| Metric | YoY Change | Reason |
|---|---|---|
Total Revenue | 13% YoY [N/A] | The current moderate 13% increase to $416 million contrasts with previous growth rates of 28% in Q1 2024 and 25% in Q1 2025. This slowdown may reflect a combination of subdued advertiser spend and a shift in campaign mix despite continued benefits from higher gross spend and new client acquisitions. |
Core Programmatic Advertising Revenue | 10% YoY [N/A] | At $380 million, the 10% YoY growth is significantly lower than the 28% YoY seen in Q1 2024 and 25% YoY in Q1 2025. This suggests that while demand remains healthy, advertisers may be reallocating budgets toward emerging channels like CTV or reacting to market maturity in traditional programmatic advertising. |
Connected TV (CTV) Segment | 35% YoY [N/A] | **Achieving $60 million with 35% YoY growth, CTV continues to be a high-growth channel driven by strong adoption of programmatic advertising, enhanced technology like the Kokai platform, improved data integration, and superior retail media capabilities as well as strategic global initiatives. ** |
Geographic Breakdown – North America | +11% YoY ($250 million) [N/A] | North America’s strong performance—with about 88% share historically —shows moderate growth at +11% YoY, reflecting its mature market status and a possible plateau in the scale of advertiser spend in that region. |
Geographic Breakdown – Asia-Pacific | +28% YoY [N/A] | The significant 28% YoY expansion in the Asia-Pacific region likely results from intensified international growth efforts, particularly leveraging CTV and Retail Media strategies , aimed at capturing a larger portion of the two-thirds of global advertising spend occurring outside North America. |
| Metric | Period | Previous Guidance | Current Guidance | Change |
|---|---|---|---|---|
Revenue | Q3 2025 | no prior guidance [N/A] | $717 million, reflecting 14% year-over-year growth (18% when excluding U.S. political ad spend) | no prior guidance |
Adjusted EBITDA | Q3 2025 | no prior guidance [N/A] | $277 million | no prior guidance |
| Topic | Previous Mentions | Current Period | Trend |
|---|---|---|---|
AI-driven product innovation and sustained performance improvements via the Kokai platform | In Q1 2025, Kokai was hailed as a “game changer” with significant cost‐improvement metrics. In Q4 2024 and Q3 2024, executives stressed AI’s role in enhancing forecasting, optimization, and performance using Kokai. | In Q2 2025, detailed client adoption figures and performance improvements (e.g., 43% and 73% enhancements) were highlighted, with clear emphasis on distributed AI driving both near- and long-term gains. | Improved sentiment with continued robust innovation and clearer performance validation. |
Ongoing emphasis on programmatic advertising and the open Internet value proposition | Prior periods confirmed programmatic agility, transparency, and a strategic push away from walled gardens (e.g., Q1: agile adjustments , Q4: premium open Internet focus , Q3: leveraging live sports and data for growth ). | Q2 2025 continued with strong emphasis on measurable, agile ad spend and highlighted the open Internet’s premium content, supported by AI-driven supply chain transparency. | Consistent focus with a refined value proposition that reinforces performance and open Internet benefits. |
Competitive dynamics and pressure from walled garden platforms | Q1 2025 and Q4 2024 emphasized regulatory setbacks for Google and questioned Amazon’s objectivity. Q3 2024 further elaborated fair play and measurement criticisms. | Q2 2025 intensified the critique by detailing biases in Amazon and Google’s strategies, while also hinting at potential collaborative opportunities and improved market fairness. | Sustained critical sentiment with more nuanced positioning and acknowledgment of partnership possibilities. |
Macroeconomic volatility and tariff-related uncertainties impacting ad spend | Q1 2025 and Q3 2024 discussed economic uncertainty and broad volatility , while Q4 2024 touched on economic challenges without specific tariff mention. | In Q2 2025, there was a clearer focus on how tariffs and macroeconomic pressures are directly affecting large advertisers in sectors like auto and CPG. | Increased focus on tariff impacts amid ongoing macroeconomic volatility. |
Evolving regulatory and antitrust environment affecting market positioning | Q1 2025, Q4 2024, and Q3 2024 offered extensive discussions on antitrust verdicts against Google and related industry shifts. | There is no specific mention of regulatory or antitrust topics in Q2 2025. | Topic no longer mentioned in the current period, indicating a potential shift in focus [—]. |
Expansion in Connected TV (CTV) and growth into adjacent channels (audio, international markets) | Across Q1 2025, Q4 2024, and Q3 2024, CTV was consistently highlighted as the fastest-growing channel, with steady expansion into digital audio and international markets. | Q2 2025 reiterated that CTV remains the fastest-growing channel with video (including CTV) capturing a high 40s percentage share, and underscored strong momentum in digital audio and international growth. | Steady growth with robust expansion across channels and maintained leadership in CTV. |
Emerging supply chain enhancements through OpenPath and acquisitions for margin improvement | Q1 2025 and Q4 2024 discussed OpenPath’s role in supply chain transparency and its early impactful metrics, with Q4 noting acquisition moves (e.g., Sincera) that enhanced metadata and valuation. Q3 2024 covered OpenPath’s transparency benefits (without acquisition details). | Q2 2025 emphasized enhanced transparency and efficiency through OpenPath combined with the strategic integration of Sincera – directly linking these initiatives to improved margins and streamlined supply chains. | Strengthened focus through deeper integration and strategic acquisitions to enhance supply chain efficiency and margins. |
New data and identity solutions, notably Unified ID 2.0 (UID2), as a competitive advantage | In Q4 2024 and Q3 2024, UID2 was noted as foundational for improving addressability and serving as the primary identity currency, helping publishers boost fill rates and revenue. Q1 2025 had no specific mention. | Q2 2025 reaffirmed that UID2 is a key differentiator for The Trade Desk, especially when contrasted with competitors like Amazon that lack an open identity solution. | Sustained and strong emphasis on UID2 as a competitive advantage, building on earlier positive endorsements. |
Operational execution risks, including rollout delays and platform adoption uncertainties | Q4 2024 detailed execution missteps, platform rollout delays, and restructuring challenges , while Q1 2025 highlighted accelerated adoption with minimal issues. Q3 2024 did not explicitly mention such risks. | Q2 2025 did not specifically mention execution risks; instead, the rollout of Kokai and its strong adoption were noted, suggesting stable operational performance. | Reduced emphasis on execution risks compared to Q4 2024, indicating improved operational stability and smoother adoption. |
Market saturation risks due to limited trading partners in the open Internet ecosystem | Q3 2024 provided a broad view of the open Internet’s vast $1 trillion ecosystem with only a tiny market share captured by The Trade Desk ; Q1 2025 and Q4 2024 did not emphasize saturation risks. | There is no mention of market saturation risks in Q2 2025. | No new concerns raised; previous outlook remains positive with ample opportunity remaining in the ecosystem. |
Concerns over political advertising spend sustainability as a potential revenue risk | Q4 2024 showed a mixed view with political spend having a “too close to call” net impact, and Q3 2024 discussed adjustments in sequential patterns; Q1 2025 noted minimal contribution (1%) to overall revenue. | Q2 2025 provided clear guidance that excludes political ad revenue effects, showing sustainable underlying growth and predictable, adjusted revenue outlook. | Consistent risk management with a shift towards isolating sustainable revenue growth from volatile political ad spend. |
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Amazon Competition
Q: How is Amazon competing in digital ads?
A: Management stressed that Amazon’s DSP is not a true competitor since it focuses on its own inventory and sponsored listings, making it more a potential partner than a rival for buying the open Internet. -
Tariff Impact
Q: How will tariffs affect ad spend?
A: Management explained that recent tariff uncertainties have impacted major advertisers in sectors like auto and CPG, but volatility has stabilized and programmatic’s agility remains a clear strength, suggesting only a short-term headwind. -
Market Share Shift
Q: How will open Internet gain share?
A: Leadership noted that although walled gardens are growing, the premium open Internet—bolstered by AI-driven performance and higher brand engagement—will capture a larger share over time as advertisers seek greater objectivity. -
Kokai Progress
Q: What’s the update on Kokai and AI performance?
A: Management highlighted rapid progress with Kokai, where early adopters saw up to a 43% improvement in reach and a 73% boost in CPA, with overall campaigns outperforming legacy ones by over 20%, and full client adoption is expected by year-end. -
KPI & Segments
Q: Is the 20% KPI improvement sustainable?
A: They described the 20% uplift as just the beginning, noting that ongoing AI optimizations can drive further gains, while underperforming segments like Home & Garden are largely seasonal and represent a small share of revenue. -
SMB Opportunity
Q: Will Kokai target the emerging SMB market?
A: Management clarified that while long-term ambitions include serving smaller advertisers, the immediate focus remains on the largest spenders, whose combined TAM is significant enough to drive current growth. -
Confidence Drivers
Q: What drives your confidence for the future?
A: Leadership expressed confidence based on strong client relationships, continued product innovation, data-driven AI improvements, and a favorable supply-demand imbalance, all underpinning sustained long-term growth.
Research analysts covering Trade Desk.