The Trade Desk (TTD) delivered strong Q3 2025 results, with revenue growing 18% year-over-year to $739 million (22% ex-political spend), driven by the continued acceleration of Connected TV (CTV) and retail media. Adjusted EBITDA came in at $317 million, representing a robust 43% margin, while adjusted net income reached $221 million ($0.45 per share). Strategic highlights included the widespread adoption of the Kokai AI platform (used by ~85% of clients as default), which delivered significant performance lifts (26% better CPA, 58% better CPU), and the introduction of supply chain innovations like OpenPath and OpenAds. Management raised Q4 revenue guidance to at least $840 million (18.5% growth ex-political), signaling confidence despite a slight sequential deceleration, supported by a new $500 million share repurchase authorization and a fortress balance sheet with $1.4 billion in cash.
| Metric | Value | Change |
|---|---|---|
| Revenue | $739 million | +18% YoY (+22% ex-political) |
| Adjusted EBITDA | $317 million | 43% Margin |
| Adjusted Net Income | $221 million | N/A |
| EPS (Diluted) | $0.45 | N/A |
| Free Cash Flow | $155 million | N/A |
| Kokai Adoption | ~85% | Default for most clients |
| CTV Share of Business | ~50% | Fastest growing channel |
| Share Repurchase (Q3) | $310 million | N/A |
Kokai and AI Integration: TTD is leveraging its 'Distributed AI' architecture via Kokai to drive superior client performance, which is the primary engine for retention and growth. Management reported that Kokai delivers a 26% better cost per acquisition, 58% better cost per unique reach, and 94% better click-through rates compared to the previous Solimar platform. With nearly 85% of clients using Kokai as default, TTD is solidifying its technological moat, making it harder for clients to switch to competitors lacking equivalent AI-driven optimization.
Supply Chain Revolution (OpenPath & OpenAds): TTD is aggressively attacking the inefficiencies of the ad tech supply chain to ensure a 'healthy auction.' OpenPath, which connects directly to premium publisher inventory, grew by 'many hundreds of percentage points,' while the new OpenAds product aims to host fair, transparent auctions. This strategy reduces 'tax' in the supply chain, improving ROI for advertisers and yield for publishers, thereby incentivizing broader adoption of the open internet over walled gardens.
Operational Rigor and Leadership Overhaul: The appointment of a new COO (Vivek Kundra), CFO (Alex Kayyal), and CRO (Anders Mortensen) signals a shift from a founder-led growth story to a scaled, operationally disciplined enterprise. Management highlighted the implementation of stricter account planning, IC-level accountability, and streamlined go-to-market motions. This 'professionalization' is designed to capture the 'trillions' in TAM by managing global complexity better and improving sales execution, particularly with Joint Business Plans (JBPs) which are growing faster than non-JBP accounts.
Identity and Data Sovereignty: TTD is doubling down on UID2 as the 'primary identity currency of ads for the open internet,' positioning itself as the neutral arbiter of data in a post-cookie world. By allowing advertisers to 'own their future' and protect their data, TTD contrasts itself with conflicted walled gardens (Google, Amazon, Meta) that seek to monopolize advertiser data. The launch of 'Audience Unlimited' (flat fee for third-party data) further lowers the barrier for advertisers to leverage data for performance.
International Expansion: While North America remains the core (87% of revenue), international growth is significantly outpacing domestic growth. With 60% of the TAM outside the U.S., TTD is successfully replicating its product-led growth in EMEA and APAC. This geographic diversification reduces reliance on any single market and provides a long-term growth runway as programmatic adoption matures globally.
Q4 Growth Deceleration: Despite a strong Q3 beat (22% ex-political growth), Q4 guidance implies a deceleration to 18.5% ex-political growth. This 350-basis point sequential slowdown is notable given the easier comp (Q4 2024 had political spend). While management attributes this to macro factors and tough comps, investors may scrutinize whether the Kokai cycle is maturing or if macro headwinds in CPG/Retail are impacting the top line more than anticipated.
Macro Sensitivity in Key Verticals: Management described the environment as a 'tale of two cities,' noting that large brands in CPG and parts of retail are feeling pressure from tariffs and inflation. This suggests that TTD is not fully immune to broader economic cycles, particularly as it moves upmarket to larger global brands where budget scrutiny is higher. If these macro conditions persist, growth rates could remain suppressed in the near term.
Competitive Pricing Pressure: While Jeff Green dismissed Amazon's and Google's 'zero fee' DSP strategies as a 'trap' because they monetize owned and operated (O&O) inventory, the prevalence of cheap or free alternatives creates a noisy market. TTD relies on selling 'value' over 'price,' but in a tougher macro environment, procurement departments may force a shift toward cheaper, lower-quality alternatives, potentially slowing TTD's market share gains.
Inventory Supply Dynamics: The rise of AI search and AI scraping poses a theoretical risk to ad inventory supply. While Green argues the impact is 'de minimis' given the 20 million impressions per second available, the structural shift in how users consume content (e.g., AI summaries vs. web pages) could long-term impact the inventory pool of the open internet, requiring TTD to constantly adapt its demand-side capabilities.
Overall: Management exhibited a highly confident and enthusiastic demeanor throughout the call, emphasizing a 'race to the best-performing ads' and positioning the company as the undisputed leader in the open internet. Jeff Green was particularly assertive regarding competitive positioning against walled gardens (Amazon, Google), dismissing pricing threats as 'traps' and framing the current landscape as a 'buyer's market' that favors TTD's objectivity. New CFO Alex Kayyal struck a disciplined yet optimistic tone, focusing on profitable growth and capital allocation.
Confidence: HIGH - Management displayed high conviction in their product roadmap (Kokai, OpenPath) and market opportunity, citing specific performance metrics (e.g., 26% better CPA on Kokai) and successful client wins (e.g., $20M incremental spend from a major analytics firm). They addressed the Q4 growth deceleration head-on without wavering on their long-term thesis.
At least $840 million
Approximately 18.5% year-over-year
Approximately $375 million
Hedging & Uncertainty: Management generally used direct, assertive language ('We will win long term,' 'It is ours for the taking'), reflecting high confidence. However, hedging appeared when discussing macro factors and the Q4 guide. Phrases like 'tale of two cities' and 'some large brands... are still feeling pressure' served to soften expectations regarding broader market adoption. When addressing the Google antitrust trial, Green used probabilistic language ('I think there is no scenario where Google doesn't back away'), acknowledging uncertainty but framing it positively for TTD.
The shift to biddable CTV is accelerating. - Jeffrey Green, CEO
I hope they do eventually price it at 0 because it will be easier to point out then the problem of advertising today. - Jeffrey Green, CEO
We are building our business for the long term. - Jeffrey Green, CEO
Our focus on profitable growth means that we can invest to ensure we are always innovating. - Alex Kayyal, CFO
The open Internet is where the most loved content and the most premium content lived. - Jeffrey Green, CEO
I'm bringing a growth mindset to my role as CFO here. - Alex Kayyal, CFO
Analyst Sentiment: Analysts were generally inquisitive and focused on the competitive landscape, specifically probing the threat of Amazon's DSP and Google's pricing strategies. There was also skepticism regarding the slight deceleration in Q4 guidance relative to Q3 performance, prompting questions about macro headwinds.
Management Responses: Management was defensive but articulate regarding competition, reframing Amazon and Google as 'walled gardens' rather than direct DSP competitors. They addressed the growth deceleration by reiterating the strength of underlying trends (CTV, Retail Media) and attributing variance to macro factors and comps. Responses were detailed and data-driven, aiming to reinforce the 'objective buy-side' narrative.
Competitive Positioning vs. Amazon/Google: Analysts pressed on whether Amazon's growth and zero-fee DSP pose a threat. Green argued Amazon is an O&O player, not an open internet DSP, and that zero fees reveal conflicted incentives.
Q4 Guidance & Macro: Analysts asked about the 3-point deceleration in growth guidance. Kayyal attributed it to standard seasonality and macro trends, while Green highlighted a 'tale of two cities' regarding advertiser budgets.
AI Impact on Inventory: Questions arose regarding whether AI search/chatbots reduce ad inventory. Green dismissed the impact as minimal given the vast supply of impressions, viewing AI as an efficiency tool rather than a threat.
Operational Changes: Analysts inquired about the impact of new leadership (COO, CFO, CRO). Green emphasized improved rigor, accountability, and 'green shoots' from better coordination.
The Trade Desk remains the premier way to invest in the structural shift of advertising dollars from linear TV and walled gardens to the open internet and CTV. Q3 results demonstrated resilience and strong leverage (43% EBITDA margin), while the Kokai platform provides a sustainable competitive advantage through superior AI performance. Although Q4 guidance implies a modest slowdown, the long-term trajectory remains intact due to the company's technological leadership, operational improvements under new management, and the massive tailwind of retail media and international expansion. The pullback related to the guide deceleration presents a buying opportunity for long-term investors.
Management described a 'tale of two cities.' While sectors like financial services, healthcare, and auto are leaning into data-driven spending, CPG and retail are facing pressure from tariffs and inflation, leading to a divergence in ad budget growth.
AI is viewed as a net positive, increasing the efficiency of the open internet and supply chains (OpenPath). Management believes AI will not reduce ad inventory significantly but will rather improve price discovery and performance.
The DOJ vs. Google antitrust trial is seen as a catalyst. Green believes Google will inevitably retreat from the open internet to focus on O&O inventory (YouTube/Search) to avoid further regulatory scrutiny, leaving the open internet market share for TTD.