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Trade Desk, Inc. (TTD)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 revenue was $739.4M (+18% YoY), Adjusted EBITDA $317.5M (43% margin), GAAP diluted EPS $0.23; non-GAAP diluted EPS $0.45, reflecting strong CTV-led momentum and Kokai-driven performance gains .
  • Results beat S&P Global consensus: revenue $739.4M vs $719.3M*, non-GAAP EPS $0.45 vs $0.4418*; Q2 showed a slight non-GAAP EPS miss vs consensus, but revenue beat* .
  • Q4 2025 guidance: revenue at least $840M and Adjusted EBITDA ~ $375M; ex-2024 political spend, implied YoY growth ~18.5% per CFO commentary .
  • Catalysts: broad adoption of Kokai with significant performance uplifts, accelerating Decision CTV, new data marketplace/trading modes/Audience Unlimited, and a fresh $500M buyback authorization .

What Went Well and What Went Wrong

What Went Well

  • “Revenue grew approximately 18% compared with Q3 of last year…CTV remains our largest and fastest-growing channel” (Jeff Green); non-GAAP EPS $0.45 and Adjusted EBITDA margin 43% underscore operational strength .
  • Kokai adoption driving meaningful uplifts: average +26% better CPA, +58% better cost per unique reach, +94% better CTR vs Solimar, supporting share gains among large brands .
  • Strategic advances in supply chain transparency and direct paths (OpenPath, OpenAds, PubDesk, Deal Desk) with early publisher successes (e.g., Hearst +4x fill, +23% revenue) .

What Went Wrong

  • Mix still concentrated: North America 87% and international 13%, leaving room for broader geographic diversification .
  • DSOs rose to 92 days and DPOs to 77 days YoY, and CFO cited continued OpEx investments; Q2 non-GAAP EPS slightly missed S&P consensus* *.
  • Macro “tale of two cities”: softness in certain CPG/retail pockets amid tariffs/inflation and legacy measurement, creating uneven category demand .

Financial Results

MetricQ1 2025Q2 2025Q3 2025
Revenue ($USD Millions)$616.0 $694.0 $739.4
GAAP Diluted EPS ($)$0.10 $0.18 $0.23
Non-GAAP Diluted EPS ($)$0.33 $0.41 $0.45
Adjusted EBITDA ($USD Millions)$207.9 $270.8 $317.5
Adjusted EBITDA Margin (%)34% 39% 43%
Net Income ($USD Millions)$50.7 $90.1 $115.5
Net Income Margin (%)8% 13% 16%

Segment and Mix

  • Geography mix (Q3 2025): North America 87%, International 13% .

KPIs

KPIQ3 2025
Customer Retention>95%
DSOs (days)92
DPOs (days)77
Operating Cash Flow ($USD Millions)$225
Free Cash Flow ($USD Millions)$155
Cash + Short-term Investments ($USD Millions)$1,445.4 (Cash $653.1 + ST investments $792.3)
Share Repurchases ($USD Millions, Q3)$310
Buyback AuthorizationNew $500 added in Oct; prior authorization fully used

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueQ3 2025At least $717M N/AActual exceeded guide (delivered $739.4M)
Adjusted EBITDAQ3 2025~ $277M N/AActual exceeded guide ($317.5M)
RevenueQ4 2025N/AAt least $840M New
Adjusted EBITDAQ4 2025N/A~ $375M New

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2)Current Period (Q3)Trend
AI/Kokai performanceEarly impact from strategic upgrades (Q1); Kokai improves decisioning and value (Q2) Strong adoption (~85% default), +26% CPA, +58% cost/unique reach, +94% CTR vs Solimar Accelerating performance/value creation
Decision CTVConsistent growth faster than overall business (Q2) CTV largest/fastest; shift to Bidable/Decision CTV accelerating Structural tailwind
Supply chain transparencyOpenPath partnerships; OpenSincera and Deal Desk (Q2) Launch of OpenAds, growth in OpenPath, PubDesk data; 20 publishers integrating OpenAds Building a cleaner auction and direct paths
Retail mediaNew retail data integrations and partners (Q2) Rapid scaling; Audience Unlimited simplifies third-party data usage Expanding
Geographic focusInternational growth outpacing North America (Q2) NA 87% / International 13%; continued faster international growth Mix gradually broadening
Regulatory/macroGeneral risk disclosures in PRs DOJ v. Google: expectation Google backs away from open internet; macro “tale of two cities” (tariffs/inflation) Industry shift to open internet; selective macro headwinds

Management Commentary

  • “Revenue grew approximately 18% compared with Q3 of last year. CTV remains our largest and fastest-growing channel…” (Jeff Green) .
  • “Today, nearly all of our clients have tried Kokai, with nearly 85% using it as their default experience…26% better CPA, 58% better cost per unique reach, 94% better CTR” (Jeff Green) .
  • “For Q4, we expect revenue to be at least $840 million…adjusted EBITDA ~ $375 million” (Alex Kayyal) .
  • “Outside the U.S., our business is growing significantly faster…Video ~50% of the business; mobile low 30%; display low double-digit; audio ~5%” (Alex Kayyal) .

Q&A Highlights

  • Competitive landscape: Amazon/Google focus on monetizing owned & operated; DSP pricing “near zero” emphasizes value vs price—TTD’s objectivity and capabilities (UID2, retail data) differentiate in open internet buying .
  • Macro and 2026 setup: CFOs pushing CMOs for measurable outcomes; brands scrutinizing walled gardens; TTD positions for durable FCF and TAM share gains .
  • Inventory and AI search: Minimal impact to open internet supply; potential for more “search-like” inventory and fragmentation akin to CTV—creating premium opportunities .
  • Guidance color: Q4 ex-political ~18.5% YoY; outlook grounded in October/November trends; strength in Decision TV and retail media .

Estimates Context

MetricQ1 2025Q2 2025Q3 2025
Revenue Actual ($USD Millions)$616.0 $694.0 $739.4
Revenue Consensus Mean ($USD Millions)*575.3*686.0*719.3*
Non-GAAP EPS Actual ($)$0.33 $0.41 $0.45
Primary EPS Consensus Mean ($)*0.2477*0.4138*0.4418*
# of Revenue Estimates*33*35*33*
# of EPS Estimates*21*22*20*

Values retrieved from S&P Global.*

Where estimates may need to adjust:

  • Continued Kokai performance leverage and Decision CTV mix could support upward revenue revisions if Q4 pacing exceeds the “at least” guide .
  • OpEx discipline amid growth investments and strong Adjusted EBITDA conversion (43% margin in Q3) support EPS durability assumptions .

Key Takeaways for Investors

  • CTV-led momentum and Kokai-driven performance improvements are translating to revenue and margin strength; expect Decision CTV to remain a multi-year secular driver .
  • Strong beat vs consensus in Q3 on both revenue and non-GAAP EPS; Q4 guide suggests continued healthy growth; monitor pacing against “at least” thresholds * *.
  • Strategic supply chain initiatives (OpenPath, OpenAds, PubDesk, Deal Desk) should enhance signal quality, price discovery, and ROI—key to share gains on the open internet .
  • Balance sheet strength (no debt, ~$1.45B cash+ST investments) and new $500M buyback add capital deployment flexibility through cycles .
  • International remains underpenetrated; faster growth outside NA is a medium-term lever for mix improvements and TAM capture .
  • Near-term trading: watch category dynamics (CPG/retail softness vs healthcare/auto/tech strength) and macro tariff/inflation headwinds; risk balanced by diversified vertical wins .
  • Medium-term thesis: independent, objective DSP advantage vs conflicted walled gardens; AI-enabled product cycle (Kokai, Audience Unlimited, trading modes) drives measurable outcomes and stickiness .