Trade Desk, Inc. Q3 FY2025 earnings call

Key Messages - Jeff Green:

• Revenue grew ~18% YoY, 22% ex political spend. CTV is largest and fastest-growing, shift to biddable CTV accelerating. Retail media scaling rapidly.
• Welcomed new COOs, CFO, CRO. New leaders bringing structure, discipline, and improved operations.
• Platform innovations: Kokai delivering strong performance improvements, OpenPath, OpenAds, Pubdesk, Deal Desk launched to upgrade supply chains.
• Momentum in business: Strong confidence in open Internet potential, international growth outpacing US, audio growing, JBP accounts growing faster.

Alex Kayyal:

• Highlighted strong top-line performance, adjusted EBITDA of ~43% of revenue in Q3.
• Focus on profitable growth, evaluating investments to accelerate flywheel, strong balance sheet with $1.4 billion in cash, etc.

In Q3, revenue was $739 million, up 18% year-over-year. Excluding political spend, it grew 22%. CTV is the largest and fastest-growing channel, growing faster than the overall business. Video (including CTV) represented around 50% of the business in Q3. Mobile was a low 30s percentage share, display low double-digit, and audio around 5%. Geographically, North America represented 87% of business, international 13%. Strong growth was seen in verticals like medical health, automotive, and technology, with efforts to diversify across more verticals.

Q4 Guidance:

• Expect revenue to be at least $840 million. Excluding U.S. political ad spend benefit, estimated growth ~18.5% YoY.
• Adjusted EBITDA estimated at ~$375 million.
• Outlook for 2026: Well-positioned to grow share of ad TAM, generate profitability and cash flow, leverage CTV transformation, AI, retail media, and international programmatic buying.

Forward-looking statements are subject to risks and uncertainties. Actual results may vary significantly from projections. Refer to press release and SEC filings for detailed risk factors.

Q: Congrats on the nice quarter. Some have interpreted past comments as if not seeing Amazon as a competitor. Clarify and how competitive environment evolves as companies like Google and Amazon evolve their DSPs.

A: Jeff Green stated Amazon's advertising efforts are mostly on owned and operated inventory, with little competing with The Trade Desk in open Internet DSP. On Google, pricing DSP at 0 is a trap as they make money elsewhere.

Q: Jeff, walk through impactful talent changes in 2025, green shoots and areas needing work.

A: Welcomed new COO, CFO, CRO. Stronger structure and cadence introduced, JBP accounts outperforming, investments in senior BD and AM to get closer to brands. Still investing in training and systems for consistency.

Q: Jeff, what trends in broader advertising macro environment benefit The Trade Desk in 2026? How restructuring positions for that?

A: Forward-thinking brands leaning into data-driven marketing, scrutiny of walled gardens, large CTV content owners relying on independent partners like The Trade Desk. Restructuring improves internal coordination and execution.

Q: Jeff, impact from Google antitrust lawsuits? What products to focus on 12-18 months?

A: Google likely to back away from open Internet, focusing on owned and operated. Key products: Kokai, Deal Desk, trading modes, Audience Unlimited are highlights.