Core Insights - The Trade Desk (TTD) stock has decreased by 15.6% over the past month, closing at $43.26, significantly lower than its 52-week high of $141.53 and closer to its 52-week low of $41.77 [1] - Revenues for Q3 2025 increased by 18% year over year to $739 million, surpassing consensus estimates by 3% and exceeding the company's own expectations of at least $717 million [1][9] - Adjusted EBITDA rose to $371 million from $257 million year over year, with adjusted EPS at 45 cents, exceeding estimates and up from 41 cents in the previous year [2] Revenue Growth Drivers - Connected TV (CTV) is identified as the fastest-growing segment in the digital ad market, with management expecting decision-based CTV buying to become the default model in the future [3] - The company's AI-powered platform, Kokai, is utilized by 85% of clients and has shown significant performance improvements compared to previous models, enhancing its competitive edge [4] - Initiatives like OpenPath and OpenAds are designed to connect advertisers directly with publishers, improving transparency and efficiency in the supply chain [5] Market Opportunities - Approximately 60% of TTD's total addressable market is outside the United States, with international business currently accounting for about 13% of total revenues, indicating potential for long-term growth [6] - The company has a strong cash position of $1.4 billion with no debt, providing a buffer against macroeconomic volatility [7] Stock Performance and Valuation - TTD repurchased $310 million worth of stock in Q3 and has approved a new buyback plan of $500 million [8] - The stock is currently trading at a premium valuation, with a price/book multiple of 8.13X compared to the industry average of 7.69X [16] Competitive Landscape - The competitive environment is intensifying, with major players like Meta, Apple, Google, and Amazon dominating the ad tech space, which could pressure TTD's market position [13] - Smaller competitors like Magnite and PubMatic are also expanding their presence in CTV and retail media, increasing competition for ad dollars [14] Cost and Profitability Challenges - Total operating costs surged by 17% year over year to $457 million, driven by investments in platform capabilities, which may compress margins if revenue growth slows [15] - Macro volatility poses a significant concern for TTD, as worsening conditions could lead to reduced programmatic demand and pressure on revenue growth [12] Conclusion - Given the solid fundamentals and near-term headwinds, TTD is currently rated as a hold, suggesting that existing investors may retain their positions while new investors should wait for a more favorable entry point [18]

Financial Data and Key Metrics Changes - Revenue for Q3 2025 grew 11% year-over-year to $189 million, within guidance range [4][25] - Adjusted EBITDA margin reached 35%, exceeding expectations and demonstrating scalability [4][30] - Total advertiser revenue grew 10%, driven by increased volumes, while media transactions measured increased 12% year-over-year [26][28] - Adjusted EBITDA was approximately $66 million, reflecting strong profitability and cash generation [30][34] Business Line Data and Key Metrics Changes - Activation revenue grew 10% year-over-year, with ABS accounting for 54% of activation revenue and growing 12% [27][28] - Non-ABS activation revenue grew 8%, driven by demand for social activation solutions [28] - Measurement revenue grew 9% year-over-year, with social measurement accounting for 48% of total measurement revenue [28] Market Data and Key Metrics Changes - Social activation is growing at 20%, with strong early adoption of DV Authentic Advantage and Meta Pre-Bid solutions [9][10] - CTV measurement volumes grew 30% year-over-year, reflecting increased advertiser demand for transparency [17] - Supply-side revenue grew 27% in Q3, driven by growth on existing platforms and new partnerships [29] Company Strategy and Development Direction - The company aims to grow social, streaming TV, and AI verification solutions from under 30% of total revenue to approximately 50% [19][35] - Focus on innovation through AI and automation to enhance product offerings and operational efficiency [6][23] - Strategic partnerships with global leaders and expansion into new markets are key to driving future growth [21][22] Management's Comments on Operating Environment and Future Outlook - Management noted softer retail budgets impacting growth but highlighted strong performance in other core verticals [4][25] - The company expects continued double-digit revenue growth and strong profitability for the full year 2025 [30][34] - Future growth will be driven by the adoption of new solutions in social, CTV, and AI [39][52] Other Important Information - The company repurchased 3.3 million shares for $50 million in Q3, with $90 million remaining for additional repurchases [31][32] - Capital expenditures increased to approximately $12 million in Q3, reflecting investments in new solutions [30][32] Q&A Session Summary Question: Growth drivers for next year - Management indicated a base case scenario of 10% growth for 2026, driven by new solutions in social, CTV, and AI [38][39] Question: Softness in retail - The softness is broad-based across the retail vertical, impacting a large share of top spenders [44] Question: Impact of competitors leaving the market - The departure of less scaled competitors creates a more advantageous position for the company to invest and grow [49][50] Question: Client base and SMBs in CTV - The company sees opportunities in attracting SMBs into the CTV space, leveraging existing platforms for growth [56] Question: Scaling of Meta Pre-Bid and DV Authentic Advantage - Both products are expected to scale significantly, with strong early adoption and positive initial results [58][59]

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 - Q3 GAAP revenue was $27 million, representing a 9% increase quarter over quarter and an 11% increase year over year [6][15] - Adjusted EBITDA loss was $12 million, a 3% decrease quarter over quarter and a 15% increase year over year [6][16] - Paying MAU reached 155,000, up 6% quarter over quarter and 28% year over year [6][15] Business Line Data and Key Metrics Changes - The launch of "Solitaire Skills" as an owned and operated title is showing early promise and serves as a testing ground for new features [8] - Aarki's ad tech business experienced accelerating revenue growth, supported by new AI-driven product launches [8][10] - R&D expenses increased by 15% year over year to $5 million, while sales and marketing expenses decreased by 10% year over year to $17 million [15][16] Market Data and Key Metrics Changes - The competition platform showed stability, contributing to the overall revenue growth despite a typically softer seasonal period [6][10] - Aarki's net revenue increased by more than 100% year over year, indicating strong growth in the ad tech market [10] Company Strategy and Development Direction - The company is focused on enhancing player and developer engagement, operational efficiency, and a path to profitability [9][10] - The Fair Play initiative aims to protect players and maintain fair competition, with ongoing litigation against competitors for alleged bot usage [10][11] - The company is exploring growth opportunities beyond gaming into e-commerce and interactive entertainment [13] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the progress across both Skillz and Aarki, highlighting the potential for long-term growth [12][13] - The company is committed to achieving compliance with New York Stock Exchange listing standards and expects to file necessary reports by December 17, 2025 [4][16] Other Important Information - The company is working to complete its financial statements for previous quarters and is under scrutiny for compliance with listing standards [3][4] - The balance sheet remains healthy with $213 million in cash and $129.7 million in total debt principal outstanding [16] Q&A Session Summary - The Q&A session was concluded without any specific questions being recorded, indicating a focus on the presentation rather than audience inquiries [17]

Financial Data and Key Metrics Changes - Revenue for Q3 2025 was $470 million, with contribution ex-TAC increasing to $288 million, reflecting a year-over-year tailwind from foreign currencies of $6 million [20][24] - Adjusted EBITDA was $105 million, up 28% year-over-year, resulting in an adjusted EBITDA margin of 36%, up 500 basis points year-over-year [22][24] - Free cash flow was $67 million in Q3, up 74% year-over-year, demonstrating consistent upward momentum in adjusted EPS and free cash flow per share [24] Business Line Data and Key Metrics Changes - In performance media, revenue was $403 million, with contribution ex-TAC at $222 million, up 5% at constant currency [20][21] - Retail media revenue was $67 million, with contribution ex-TAC growing 11% at constant currency to $66 million, up 34% on a two-year stack [22] - Media spend in retail media grew 26% year-over-year, with over 4,100 brands participating [13][22] Market Data and Key Metrics Changes - Media spend growth was observed in Asia-Pac and EMEA, while trends in the U.S. were softer but improving [21] - Travel was the fastest-growing vertical, up 24%, while fashion saw an 11% decline [21] Company Strategy and Development Direction - The company is evolving into a diversified, multi-channel platform, with about 85% of media spend now outside of desktop display [6][11] - Focus on agentic AI as a major shift in the industry, with plans to integrate AI-driven capabilities into shopping experiences [7][9] - The company announced plans to re-domicile to Luxembourg and replace its current ADS structure with a direct listing on Nasdaq, aimed at enhancing capital management flexibility [17][30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strategy and ability to capture shifts in commerce and advertising, anticipating sustained growth and long-term value for shareholders [18][31] - The company expects contribution ex-TAC to grow 3%-4% year-over-year at constant currency for 2025, with adjusted EBITDA margin projected at approximately 34% [27][28] Other Important Information - The company is investing in organic growth, value-enhancing acquisitions, and returning capital to shareholders, with $11 million allocated to share repurchases in Q3 [25][26] - The company is focused on building a strong operational fitness to enable greater scale and efficiency, including driving productivity gains through AI-powered tools [23] Q&A Session Summary Question: Client response to agentic products and CTV growth opportunities - Management highlighted threefold opportunities in agentic products, including internal tools for audience creation and partnerships with AI platforms [34][35] - Investments in CTV are focused on supply-side integrations and demand-side tactics to enhance performance [38][39] Question: Partnership with AI platforms and its impact on e-commerce - Management sees monetization strategies for AI platforms leaning towards native advertising solutions, with a focus on improving product-oriented responses [42][43] Question: Retail media trends and new client ramp-up - Management noted that most Q3 activity was related to existing clients, with new wins starting to ramp up, including the DoorDash partnership [60][61] Question: Adjusted EBITDA beat and re-domicile implications - The beat in adjusted EBITDA was attributed to top-line growth and operational leverage, with no material costs expected from the re-domicile [64][66] Question: Investments required for AI products and retail media headwinds - Management indicated that investments for AI products are within normal scaling, with a slower ramp-up of new clients expected in retail media [70][72]

Core Insights - Specificity, an ad tech company, has appointed Rob Gagne as Chief Technology Officer to enhance its technological capabilities and drive global growth [1] Company Developments - Rob Gagne brings over 30 years of experience in technology leadership across finance, enterprise software, and data systems [1] - The appointment is part of Specificity's strategy to redefine digital marketing precision and strengthen its executive team [1] Industry Context - The ad tech sector is experiencing rapid growth, with companies focusing on innovative technology to improve marketing effectiveness [1]

Core Viewpoint - Shopify and AppLovin are predicted to surpass Palantir's current market value of $422 billion within five years, driven by strong financial performance and growth potential in artificial intelligence and e-commerce sectors [1]. Group 1: Shopify - Shopify reported a 31% increase in revenue to $2.6 billion in Q2, with non-GAAP net income rising 35% to $0.35 per diluted share [2]. - The investment thesis for Shopify focuses on its ability to simplify e-commerce through a unified platform for managing physical and digital storefronts, along with providing tools for payment processing, advertising, and logistics [3]. - Significant growth opportunities are identified in international markets and B2B commerce, with total gross merchandise volume (GMV) increasing 30%, international GMV up 42%, and B2B GMV soaring 101% in Q2 [4]. - Shopify is leveraging demand for artificial intelligence by introducing tools that create online storefronts from keywords and offering AI capabilities for product descriptions, media content generation, and customer inquiries [5]. - Wall Street anticipates Shopify's earnings to grow at 30% annually over the next three to five years, potentially lowering its price-to-earnings multiple from 88 to 49, with a market value reaching $425 billion by mid-2030 [6]. Group 2: AppLovin - AppLovin experienced a 77% revenue increase to $1.2 billion in Q2, with GAAP net income rising 169% to $2.39 per diluted share, and expects advertising revenue to grow 59% in Q3 [7][10]. - The investment thesis for AppLovin is based on its advanced recommendation engine, Axon, which utilizes AI to optimize ad placements, positioning it favorably in the generative AI landscape [8]. - AppLovin's current market value is $203 billion, with a target of $425 billion by 2030, requiring a 109% stock increase, translating to approximately 16% annual returns over the next five years [9]. - The company is expanding into e-commerce advertising and has launched a self-service platform, Axon Ads Manager, which has shown positive outcomes in early pilots [10]. - Wall Street projects AppLovin's adjusted earnings to grow at 35% annually through 2028, potentially reducing its valuation from 85 to 39 times earnings while achieving a market value of $425 billion by mid-2030 [10].

October 15, 2025 05:22 PM GMT AppLovin Corp | North America Key Takeaways from Our Expert Call on APP Ecommerce We hosted an industry expert to discuss APP's ecommerce ad business, which launched self-serve on 10/1. We came away bullish on the opportunity to add up to 900 new advertisers through year end (vs. 600-700 existing), even as current customers plan to significantly increase spend into year end. On 10/15, we hosted an investor conversation with an industry expert on APP and discussed early learning ...

Core Viewpoint - AppLovin's stock has experienced significant volatility following reports of a potential SEC investigation into its data collection practices, which has impacted its previously high-growth trajectory in 2025 [1][4]. Group 1: SEC Investigation - The SEC is reportedly investigating whether AppLovin violated service agreements with platform partners to enhance targeted advertising, prompted by a whistleblower complaint and short-seller reports [2]. - AppLovin has not confirmed or denied the existence of any regulatory matters but stated that it engages with regulators as needed and will disclose material developments through public channels [3]. Group 2: Stock Performance - AppLovin's stock fell over 14% by market close on Monday following the investigation news, but showed some recovery with a slight increase of about 1.11% in premarket trading on Tuesday [4]. - The stock had previously seen substantial growth, rising from approximately $341 per share in early January to over $682 by the end of the previous week, marking an increase of around 100% [5]. Group 3: Recent Achievements - In September, AppLovin was added to the S&P 500 index after a strong earnings report in August, where net income more than doubled to $819.5 million, attributed to its AI-powered technology for targeted advertising in mobile games [6].

Core Viewpoint - Amazon is projected to surpass the combined market value of Palantir and Nvidia, currently at $4.7 trillion, by 2030, driven by AI innovations that enhance profitability [1][9]. Financial Performance - Amazon reported a 13% increase in revenue to $167 billion in Q2, with a 150 basis point expansion in operating margin and a 33% increase in GAAP net income to $1.68 per diluted share [3]. Market Position and Growth Potential - Amazon operates in three growing industries: e-commerce, advertising technology, and cloud computing, with projected annual growth rates of 12%, 15%, and 20% respectively through 2030 [5][4]. - If Amazon matches the growth rates in these markets, total revenue could grow at an annualized pace of 13% to 14% through the end of the decade, with earnings potentially growing even faster due to AI applications [4]. AI and Robotics Innovations - Amazon has developed over 1,000 generative AI applications to enhance efficiency in retail operations, including inventory optimization and demand forecasting [6]. - The company is also working on humanoid robots to assist delivery drivers and testing robotaxis through its autonomous driving subsidiary, Zoox [7]. Cost Efficiency and Profitability - Amazon's AI coding assistant has saved the company $260 million and 4,500 developer years by automating tasks, indicating significant potential for cost reduction in shipping and fulfillment, which currently consumes about 36% of retail sales [8]. Valuation and Market Outlook - Amazon shares are currently trading at 34 times earnings, with earnings expected to grow at 18% annually over the next three to five years, potentially increasing its market value to $4.8 trillion by late 2030 [9].