Trade Desk, Inc. Q4 FY2025 earnings call

Jeffrey Green discussed the macro environment, noting supply-demand imbalance in global market making it a buyer's market and The Trade Desk's objectivity valuable. Talked about AI innovations like Kokai, which enhanced nearly every part of Solimar. Introduced Audience Unlimited, a new product changing data marketplace usage. Mentioned Deal Desk centralizing deal creation, management, and analysis. Also discussed organizational upgrades like reorganized go-to-market model with unified teams and Joint Business Plans (JBPs) accounting for well over half of business. Tahnil Davis reviewed financials, noting Q4 operating expenses, adjusted EBITDA, net income, cash flow, and balance sheet position, and outlined Q1 guidance with focus on infrastructure investment and disciplined reinvestment.

For full year 2025, revenue was $2.9 billion, up 18% y-o-y. Spend was ~$13.4 billion. In Q4 2025, revenue was $847 million, up 14% y-o-y (excluding political, up ~19% y-o-y). CTV and audio grew, with CTV growing faster than overall business. Video (including CTV) was ~50% of Q4 business. Mobile was ~30%, display low double-digit, audio ~6%. US was ~84% of Q4 revenue, international ~16% with international growth outpacing North America. Softest verticals in Q4 were CPG and auto, while medical health, technology, and business and finance had strong growth.

Q1 2026 revenue expected to be at least $678 million, up 10% y-o-y. Adjusted EBITDA for Q1 estimated ~$195 million. Full year 2026 adjusted EBITDA margin expected to be approximately in line with 2025. Headcount growth expected to remain below revenue growth, with investments focused on infrastructure and talent, including transition to owned data centers and strengthening AI/machine learning capabilities.

Macro uncertainties such as continued weakness in CPG and auto verticals, ongoing inflationary pressures, consumer cost of living challenges, and tariff uncertainty. Also, competitive dynamics and potential challenges related to maintaining trust and objectivity in an AI-fueled ecosystem, as well as potential issues with supply chain complexity and inefficiencies in deal execution.

Q: Shyam Patil asked about impact of CPG and auto on 1Q and Q1 EBITDA guide.

A: Jeff Green said CPG and auto had unique pressures continuing, Q1 guide reflects prudence, Tahnil Davis said Q1 EBITDA guide primarily timing with infrastructure investment, full year margin in line.

Q: Vasily Karasyov asked about biggest organizational improvements.

A: Jeff Green talked about streamlined go-to-market coverage, clear roles/responsibilities, JBP pipeline growth.

Q: Justin Patterson asked about competitive intensity.

A: Jeff Green said competitive pressure not really up, market more complex/fragmented, The Trade Desk's objectivity and AI plus objectivity gives advantage.

Q: Youssef Squali asked about AI on monetization.

A: Jeff Green said AI improves decisioning, data potency, impacts all parts of business.

Q: Unknown Analyst asked about CTV deal types.

A: Jeff Green said most sophisticated brands looking for more biddable, decisioning while seeking guarantees.

Q: Jason Helfstein asked about Agentic AI making brands irrelevant and AI scale vs Amazon.

A: Jeff Green disagreed Agentic makes brands irrelevant, said The Trade Desk's focus on trust and brand data gives advantage.

Q: Matthew Swanson asked about working with brands on performance lens.

A: Jeff Green said everything is performance, working with brands to create better measurement frameworks.

Q: Alec Brondolo asked about OpenPath.

A: Jeff Green said OpenPath is to create more efficient supply chain, fee structure simple, not surprised it ruffles feathers