Core Insights - The Trade Desk (TTD) reported quarterly earnings of $0.45 per share, exceeding the Zacks Consensus Estimate of $0.44 per share, and showing an increase from $0.41 per share a year ago, resulting in an earnings surprise of +2.27% [1] - The company achieved revenues of $739.43 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 2.96% and up from $628.02 million year-over-year [2] - The Trade Desk has outperformed consensus EPS estimates three times in the last four quarters and has also topped revenue estimates three times during the same period [2] Earnings Outlook - The immediate price movement of The Trade Desk's stock will largely depend on management's commentary during the earnings call and future earnings expectations [3][4] - The current consensus EPS estimate for the upcoming quarter is $0.59 on revenues of $831.27 million, while the estimate for the current fiscal year is $1.76 on revenues of $2.86 billion [7] Industry Context - The Internet - Services industry, to which The Trade Desk belongs, is currently ranked in the top 39% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact The Trade Desk's stock performance [5]

Financial Data and Key Metrics Changes - Revenue for Q3 2025 was $739 million, representing an 18% year-over-year growth, and a 22% growth when excluding political spend from the previous year [39] - Adjusted EBITDA for the quarter was approximately $317 million, or about 43% of revenue [39] - Adjusted net income for Q3 was $221 million, or $0.45 per diluted share [41] - Free cash flow for Q3 was $155 million, with a strong cash and liquidity position of about $1.4 billion in cash and short-term investments at the end of the quarter [42] Business Line Data and Key Metrics Changes - CTV (Connected TV) continues to be the largest and fastest-growing channel, representing around 50% of the business in Q3 [39] - Mobile accounted for a low 30% share, display for a low double-digit share, and audio for around 5% [39] - The company is seeing strong growth in retail media and significant adoption across various verticals [5] Market Data and Key Metrics Changes - North America represented 87% of the business, while international markets accounted for about 13% [40] - Growth in international markets, particularly EMEA and APAC, is outpacing growth in North America [40] - Strong growth was noted in verticals such as medical health, automotive, and technology [40] Company Strategy and Development Direction - The company is focused on leading the open internet and enhancing operational efficiency through new leadership and structural changes [31][63] - Investments are being made in AI and product innovations to drive growth and improve client performance [38][39] - The company aims to capture a larger share of the $1 trillion advertising TAM as more dollars shift to programmatic [36] Management's Comments on Operating Environment and Future Outlook - The management describes the current macro environment as a "tale of two cities," with some brands facing pressure from tariffs and inflation, while others are experiencing strong momentum [72] - The company is optimistic about the potential of the open internet and believes that independent DSPs will capture the majority of open internet spend [28] - The focus remains on building a more accountable and metrics-driven culture to support long-term growth [66] Other Important Information - The company has repurchased nearly $2 billion through its share repurchase program since the first authorization in 2023 [42] - New product features and upgrades are expected to significantly contribute to growth in the coming years [27] Q&A Session Summary Question: Clarification on Amazon as a competitor and the evolving competitive environment - Management acknowledges Amazon and Google as significant players but emphasizes that their focus is primarily on owned and operated inventory, while The Trade Desk focuses on decisioned, data-driven buying across the open internet [49][51] Question: Areas for impact in the next couple of years - The CFO highlights the importance of disciplined resource allocation and a metrics-driven approach to drive growth and ROI [54][55] Question: Broader advertising and macro environment trends for 2026 - Management notes strong momentum across the business but acknowledges pressures in certain sectors due to external factors like tariffs and inflation [72]

Financial Data and Key Metrics Changes - The Trade Desk reported Q3 2025 revenue of $739 million, representing an 18% year-over-year growth. Excluding political spend from last year's Q3, revenue increased by approximately 22% [38][42] - Adjusted EBITDA for Q3 was approximately $317 million, or about 43% of revenue [38] - Adjusted net income for the quarter was $221 million, or $0.45 per diluted share [41] - Free cash flow was $155 million in Q3, with a strong cash and liquidity position of about $1.4 billion at the end of the quarter [42] Business Line Data and Key Metrics Changes - Connected TV (CTV) remains the largest and fastest-growing channel, with video (including CTV) representing around 50% of the business in Q3 [38] - Mobile accounted for a low 30% share, while display represented a low double-digit share, and audio was around 5% [38] - The Trade Desk's focus on retail media is seeing strong adoption across verticals, contributing to overall growth [5] Market Data and Key Metrics Changes - North America represented 87% of the business in Q3, while international markets accounted for about 13% [39] - Growth in international markets, particularly EMEA and APAC, is outpacing growth in North America [39] - Strong growth was noted in verticals such as medical health, automotive, and technology [40] Company Strategy and Development Direction - The company is focused on leading the open internet and enhancing operational efficiency through new leadership and structural changes [31][36] - The Trade Desk is investing in AI and automation to improve platform capabilities and drive productivity [18][63] - The company aims to capture a larger share of the $1 trillion advertising total addressable market (TAM) as more dollars shift to programmatic [36] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the potential of the open internet and the advantages of an objective platform [28] - The company anticipates continued growth driven by innovations in AI and programmatic buying, particularly in CTV and retail media [43] - The Trade Desk is well-positioned to capitalize on the evolving advertising landscape, with a focus on operational rigor and long-term growth [43] Other Important Information - The company has repurchased nearly $2 billion through its share repurchase program since the first authorization in 2023 [42] - The board of directors approved a new authorization of $500 million for share repurchases [42] Q&A Session Summary Question: Clarification on Amazon as a competitor and the evolving competitive environment - Jeff Green acknowledged Amazon and Google as significant players but emphasized that their advertising efforts primarily focus on owned and operated inventory, with little competition in the open internet space [47][51] Question: Areas for impact in the organization - Jeff Green highlighted the importance of new leadership and structural changes aimed at strengthening the company's foundation and improving operational efficiency [59][61] Question: Trends in the advertising and macro environment for 2026 - Management noted the growing importance of the open internet and the potential for increased value in an objective platform, with a focus on disciplined resource allocation and international growth [69]

Financial Data and Key Metrics Changes - The Trade Desk reported Q3 2025 revenue of $739 million, representing an 18% year-over-year growth, and a 22% growth when excluding political spend from the previous year [40][41] - Adjusted EBITDA for Q3 was approximately $317 million, or about 43% of revenue [40] - Adjusted net income for the quarter was $221 million, or $0.45 per diluted share [42] - Free cash flow was $155 million in Q3, with a strong cash and liquidity position of about $1.4 billion at the end of the quarter [43] Business Line Data and Key Metrics Changes - Connected TV (CTV) remains the largest and fastest-growing channel, representing around 50% of the business in Q3 [40] - Mobile accounted for a low 30% share, display for a low double-digit share, and audio for around 5% [40] - The Trade Desk's focus on retail media is seeing rapid scaling and strong adoption across various verticals [5] Market Data and Key Metrics Changes - North America represented 87% of the business, while international markets accounted for about 13% [41] - Growth in international markets, particularly EMEA and APAC, is outpacing growth in North America [41] - Strong growth was noted in verticals such as medical health, automotive, and technology [41] Company Strategy and Development Direction - The company is focused on leading the open internet and enhancing operational efficiency through new leadership and structural changes [33][57] - Investments in AI and automation are aimed at improving campaign performance and operational productivity [19][58] - The Trade Desk is committed to building a more data-driven culture and enhancing client relationships through joint business plans (JBPs) [15][60] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the potential of the open internet and the shift towards programmatic advertising [30] - The company anticipates continued growth in CTV and audio channels, driven by premium content and authenticated audiences [40][41] - The Trade Desk expects Q4 revenue to be at least $840 million, with an estimated growth of approximately 18.5% year-over-year when excluding political ad spend [44] Other Important Information - The company has repurchased nearly $2 billion in stock since the beginning of its repurchase program, effectively offsetting dilution [43] - The introduction of new products and upgrades, such as Audience Unlimited and trading modes, is expected to drive future growth [28][29] Q&A Session Summary Question: Clarification on Amazon as a competitor - Management clarified that while Amazon is a significant player in advertising, their focus is primarily on owned and operated inventory, which differs from The Trade Desk's emphasis on the open internet [46][49] Question: Areas for impact as new CFO - The new CFO highlighted the importance of disciplined resource allocation and a metrics-driven approach to drive growth and efficiency [52][53] Question: Broader advertising trends for 2026 - Management noted that the open internet is gaining importance, and the company is well-positioned to capitalize on this trend through its restructuring efforts [62]

Financial Performance - Revenue increased by $111 million, or 18%, for the three months ended September 30, 2025, and by $346 million, or 20%, for the nine months ended September 30, 2025, compared to the same periods in 2024[101]. - Net income for the three months ended September 30, 2025, was $115.5 million, a 23% increase from $94.2 million in 2024, and for the nine months, it was $256.4 million, a 22% increase from $210.8 million in 2024[89]. - The increase in revenue was attributed to higher gross spend on the platform, driven by increased spend per advertising campaign and new clients[101]. Operating Expenses - Platform operations expense increased by $39 million, or 32%, for the three months ended September 30, 2025, primarily due to a $36 million increase in hosting costs[102]. - Sales and marketing expense rose by $17 million, or 12%, for the three months ended September 30, 2025, driven by a $13 million increase in personnel costs[105]. - Total operating expenses as a percentage of revenue decreased from 83% in 2024 to 78% in 2025 for the three months ended September 30[99]. - The company anticipates continued increases in operating expenses as it invests in platform operations and technology development, including AI capabilities[104]. - Technology and development expenses increased by $10 million, or 9%, for the three months ended September 30, 2025, compared to the same period in 2024, primarily due to personnel costs[108]. - For the nine months ended September 30, 2025, technology and development expenses rose by $59 million, or 18%, driven by a $51 million increase in personnel costs[110]. - General and administrative expenses decreased by $8 million, or 5%, for the three months ended September 30, 2025, mainly due to a $14 million decrease in stock-based compensation[112]. Cash Flow and Capital Management - Cash flows from operating activities for the nine months ended September 30, 2025, were $681 million, up from $540 million in the same period of 2024[132]. - During the nine months ended September 30, 2025, the company repurchased 16 million shares of Class A common stock for an aggregate amount of $975 million[131]. - For the nine months ended September 30, 2025, the company used $413 million in cash for investing activities, a significant increase from $96 million in the same period of 2024[138][139]. - Cash used in financing activities for the nine months ended September 30, 2025, was $985 million, compared to $117 million in the prior year, primarily due to $958 million for stock repurchases[140][141]. - As of September 30, 2025, the company had working capital of $2.1 billion, including $653 million in cash and cash equivalents[122]. - The Amended Credit Facility had $443 million available as of September 30, 2025, with no outstanding debt balance[128]. Risk Management - A hypothetical one percentage point change in interest rates would result in an annual increase or decrease in investment income of approximately $8 million based on short-term investments as of September 30, 2025[151]. - An immediate 10% adverse change in foreign exchange rates would lead to a foreign currency loss of approximately $40 million as of September 30, 2025[152]. - The company has not used any derivative financial instruments to manage interest rate risk exposure as of September 30, 2025[151]. - The company has entered into forward contracts to hedge foreign currency risk, although there is no assurance of their effectiveness[153]. Strategic Focus - The company is focusing on global expansion, particularly in Europe and Asia, to capture growth opportunities in markets like the U.K., Germany, France, China, Japan, India, and Australia[95]. - The adoption of programmatic advertising is seen as a significant opportunity for growth, allowing the company to acquire new clients and increase revenue from existing ones[92]. - Sales and marketing expenses are expected to increase in absolute dollars as the company hires additional personnel and expands its international business[107]. - The company expects to continue making investments in infrastructure and technology to support its growing operations[94]. Accounting Policies - The company’s critical accounting policies include revenue recognition criteria and stock-based compensation expense, which have the greatest potential impact on financial statements[146]. - The company does not have any off-balance sheet arrangements as of September 30, 2025, other than indemnification agreements[142]. - The company does not expect the new provisions under the amended 2016 Incentive Award Plan to have a material impact on financial statements in the near term[147]. Other Income and Taxes - Total other income, net, decreased by $0.4 million for the three months ended September 30, 2025, primarily due to lower interest income and foreign currency transaction losses[115]. - The provision for income taxes increased by $31 million for the three months ended September 30, 2025, due to tax detriments associated with employee stock-based awards and higher pre-tax profitability[119]. - As of September 30, 2025, the company's total non-cancelable contractual obligations amounted to $1,142.1 million, with $811.7 million related to operating lease commitments[144].

Core Insights - The Trade Desk reported Q3 CY2025 results that exceeded market revenue expectations, with sales increasing by 17.7% year-on-year to $739.4 million [1][7] - The company provided better-than-expected guidance for Q4 CY2025 revenue at $840 million at the midpoint, which is 1% above analysts' estimates [1][7] - Non-GAAP profit per share was $0.45, aligning with analysts' consensus estimates [1][7] Company Overview - The Trade Desk operates as a cloud-based platform designed to assist advertisers and agencies in planning, managing, and optimizing digital advertising campaigns across various channels and devices [4] Revenue Growth - The Trade Desk has demonstrated a compounded annual growth rate of 30.7% over the last five years, indicating strong long-term sales performance [5] - The annualized revenue growth over the last two years is 23.4%, which is below the five-year trend but still suggests healthy demand [6] Financial Highlights - Q3 revenue was $739.4 million, surpassing analyst estimates of $719.4 million by 2.8% [7][8] - Adjusted EBITDA was $317.5 million, exceeding analyst estimates of $278.8 million, resulting in a 42.9% margin [7] - Operating margin improved to 21.8%, up from 17.3% in the same quarter last year [7] - Free cash flow margin increased to 21%, compared to 16.8% in the previous quarter [7] - The company's market capitalization stands at $23.32 billion [7]

Financial Performance - The Trade Desk reported Q3 2025 revenue of $739 million, an 18% increase year-over-year, and a total revenue of $2.049 billion for the nine months ended September 30, 2025, representing a 20% increase from the same period in 2024[2][3]. - Net income for Q3 2025 was $116 million, with a net income margin of 16%, compared to $94 million and 15% in Q3 2024[3][4]. - Adjusted EBITDA for Q3 2025 was $317 million, representing 43% of revenue, with a total of $796 million for the nine months ended September 30, 2025[3][4]. - Net income for the nine months ended September 30, 2025, was $256.354 million, an increase of 21.6% from $210.847 million in the same period of 2024[25]. - Adjusted EBITDA for the nine months ended September 30, 2025, was $796.110 million, up 20.5% from $660.665 million in the same period of 2024[25]. - Non-GAAP net income for the nine months ended September 30, 2025, was $588.789 million, compared to $535.578 million for the same period in 2024, an increase of 9.9%[25]. - GAAP diluted earnings per share for the nine months ended September 30, 2025, was $0.52, compared to $0.42 for the same period in 2024, an increase of 23.8%[25]. Customer Metrics - Customer retention remained over 95% for the third consecutive year, indicating strong customer loyalty[4]. Shareholder Actions - The company announced a $500 million share repurchase authorization, having repurchased $310 million of its Class A common stock in Q3 2025[4][7]. Future Outlook - The Trade Desk expects Q4 2025 revenue to be at least $840 million and Adjusted EBITDA of approximately $375 million[7]. Product Innovations - New product innovations include Audience Unlimited, OpenAds, and a Pharma ad marketplace, enhancing the company's offerings in data-driven advertising[7]. - The company is building support for Unified ID 2.0, an industry-wide approach to identity that prioritizes user control and privacy[7]. Cash Flow and Assets - The company reported a net cash provided by operating activities of $681.132 million for the nine months ended September 30, 2025, compared to $540.055 million for the same period in 2024, an increase of 26.1%[23]. - Cash and cash equivalents decreased to $653.134 million as of September 30, 2025, from $1.369 billion at the end of 2024, a decline of 52.3%[21]. - Total current assets decreased to $5.120 billion as of September 30, 2025, from $5.336 billion at the end of 2024, a decrease of 4%[21]. Liabilities - Total liabilities increased to $3.340 billion as of September 30, 2025, from $3.163 billion at the end of 2024, an increase of 5.6%[21]. Executive Changes - The company appointed Anders Mortensen as Chief Revenue Officer, bringing extensive experience in scaling advertising businesses[4]. Stock-Based Compensation - Stock-based compensation expense for the three months ended September 30, 2025, was $121.316 million, compared to $128.510 million for the same period in 2024, a decrease of 5.5%[25].

Core Insights - The Trade Desk, Inc. reported strong third-quarter earnings, surpassing both revenue and earnings estimates [1][2]. Financial Performance - Quarterly earnings were 45 cents per share, exceeding the consensus estimate of 44 cents [2]. - Quarterly revenue reached $739.43 million, beating the Street estimate of $718.69 million, reflecting an 18% year-over-year growth [2][3]. Management Commentary - CEO Jeff Green highlighted the strong performance driven by new product innovations on the Kokai platform, which enhance data-driven advertising capabilities for leading brands [3][4]. - The company is positioned to leverage AI advancements in the advertising ecosystem, enabling clients to achieve data-rich buying across various channels [4]. Future Outlook - The Trade Desk anticipates fourth-quarter revenue to exceed $840 million, compared to the analyst estimate of $830.15 million [5].

Core Insights - Investors are showing a bullish stance on Trade Desk (NASDAQ:TTD), with significant options trading activity indicating potential upcoming movements in the stock [1][2] - The overall sentiment among large traders is mixed, with 56% bullish and 34% bearish positions noted [2] - Major market movers are focusing on a price range between $22.5 and $90.0 for Trade Desk over the last three months [3] Options Activity - A total of 23 uncommon options trades were identified for Trade Desk, with 14 puts amounting to $695,495 and 9 calls totaling $581,818 [2] - Recent options activity includes notable trades such as a bearish call sweep for a strike price of $31.9 and a bullish call sweep for a strike price of $10.0 [11] Market Status - The current trading volume for Trade Desk is 3,806,210, with the stock price down by 1.47% to $48.4 [17] - The consensus target price from market experts for Trade Desk is $53.0, with an analyst from Wells Fargo maintaining an Equal-Weight rating [14][15] Company Overview - Trade Desk operates a self-service platform for advertisers and ad agencies to programmatically purchase digital ad inventory across various devices [12] - The company generates revenue from fees based on a percentage of client advertising spend [12]

About this content About Sean Mason Sean Mason is a Senior Journalist at Proactive, having researched and written about Canadian and US equities for 20 years. Sean graduated from the University of Toronto with a BA in history and economics and has also passed the Canadian Securities Course. He previously worked at Investors Digest of Canada, Stockhouse, and SmallCapPower.com. Read more About the publisher Proactive financial news and online broadcast teams provide fast, accessible, informative and action ...