Core Insights - The Trade Desk, Inc. (TTD) is experiencing significant growth in connected TV (CTV) and retail media, with Q3 2025 revenues rising 18% year over year to $739 million, exceeding expectations of at least $717 million [1][9] - The shift towards biddable CTV is gaining traction, with decision-based buying becoming the preferred method for advertisers due to its flexibility and measurable performance [2] - Retail media is also accelerating, driven by demand for measurable outcomes, with TTD's platform integrating retail data and identity solutions to enhance targeting and attribution [3] CTV and Retail Media Growth - CTV remains TTD's fastest-growing channel, with decision-based buying gaining industry momentum [1][9] - Retail media is seeing increased investment as brands seek to connect consumer behavior directly to business results, supported by TTD's AI-enhanced Kokai platform [3][4] Ecosystem Strategy - TTD's broader ecosystem strategy includes innovations like OpenPath, OpenAds, and Deal Desk, which enhance supply chain transparency and auction integrity, positioning the company for sustained growth into 2026 and beyond [4] Competitive Landscape - TTD faces competition from Magnite, Inc. (MGNI) and Amazon.com, Inc. (AMZN), both of which are also making strides in the CTV and advertising space [5][6][7] - MGNI reported Q3 2025 revenues of $179.5 million, up 11% year over year, with strong performance in CTV [6] - Amazon's AI initiatives are gaining momentum, with significant growth in its AI chip business and overall sales [7] Financial Performance and Valuation - TTD's shares have declined 23.4% in the past month, contrasting with the Internet – Services industry's growth of 9.3% [10] - The forward price/earnings ratio for TTD is 32.76X, higher than the industry average of 26.45X [11] - The Zacks Consensus Estimate for TTD's earnings for 2025 has been slightly revised upward over the past 60 days [12]

Key Takeaways TTD's growth is fueled by CTV, retail media and its AI-powered Kokai platform.GOOGL posted Q3 2025 ad revenues of $74.18B, driven by Search, YouTube and AI-powered tools.Shares diverged over the past month, with valuations and estimate revisions highlighting key differences.Both The Trade Desk, Inc ((TTD) and Alphabet Inc ((GOOGL) play pivotal roles in the programmatic advertising ecosystem. TTD operates a leading demand-side platform (“DSP”), which helps advertisers focus on data-driven ads. ...

Core Insights - The Trade Desk (TTD) is focusing on expanding its revenue streams beyond connected TV (CTV), with audio advertising emerging as a significant growth driver [1][10] - TTD's AI-powered platform, Kokai, is enhancing performance in audio campaigns, leading to improved metrics for clients [2][3][10] - TTD faces increasing competition from major players like Amazon and independent ad-tech companies such as Magnite [4][5][10] Group 1: Business Expansion and Performance - TTD is seeing audio advertising grow, currently representing about 5% of its business, with expectations for further increases due to the premium nature of these channels [1] - Consumers are spending approximately three hours daily on music and podcasts, expanding the market for digital audio ads [1] - Kokai has shown significant performance improvements, with 26% better cost per acquisition, 58% better cost per unique reach, and 94% better click-through rates compared to previous platforms [3] Group 2: Competitive Landscape - Amazon's digital advertising services are rapidly growing, with projected revenues of $56.2 billion in 2024 and a 22% year-over-year increase in Q3 revenues to $17.6 billion [5][6] - Amazon's DSP platform is gaining traction, providing advertisers access to over 300 million ad-supported audiences across various platforms, including Spotify and SiriusXM [6] - Magnite reported Q3 revenues of $179 million, an 11% increase year-over-year, with a strong adjusted EBITDA margin of 34% [7] Group 3: Strategic Initiatives - TTD's OpenPath and OpenAds initiatives are designed to enhance transparency and efficiency in the advertising supply chain [3][10] - The company is leveraging partnerships and technology to strengthen its competitive position in the digital advertising space [8]

Core Insights - The Trade Desk, Inc. (TTD) is positioned as a strong player in the open Internet advertising space, leveraging AI and data transparency to enhance advertiser decision-making [1][8] - The demand for premium content is expected to drive growth in the open Internet, allowing TTD to capture a larger share of advertising budgets [2][8] - AI advancements are making the open Internet more effective, enabling advertisers to control their data and improve long-term success [3][4] Industry Dynamics - The open Internet is characterized by competition and transparency, contrasting with walled gardens like Google and Amazon that rely on closed inventory [1] - Digital ad supply consistently exceeds demand, creating a buyer's market that benefits TTD and the open Internet [2] - For the open Internet to outpace closed platforms, it must leverage competition and efficient supply chains [2] Company Strategy and Performance - TTD's flagship products, such as Kokai and Deal Desk, are enhancing operational efficiency and market share as the company aims for expansion into 2026 and beyond [4][8] - The company is focused on data-driven, targeted advertising on premium content to maintain competitiveness [4] - TTD's shares have seen a significant decline of 65.3% over the past year, contrasting with the growth of the Zacks Internet -Services industry and S&P 500 [7] Competitive Landscape - Competitors like Magnite and Taboola are also making strides in the open Internet space, with Magnite reporting a 25% growth in CTV and Taboola expanding its performance advertising platform [5][6] - Magnite estimates that a 1% market share gain from increased competition could add approximately $50 million annually [5] Financial Metrics - TTD's forward price/earnings ratio stands at 36.6X, higher than the Internet Services industry's ratio of 26.88 [9] - The Zacks Consensus Estimate for TTD's earnings for 2025 has seen a slight increase over the past 60 days, indicating positive sentiment [11]

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 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]

Core Insights - Trade Desk (TTD) has a strong balance sheet with a cash position of $1.7 billion and reported free cash flow of $117 million on revenues of $694 million, reflecting a 19% year-over-year increase [1][10] - The company focuses on AI-driven platforms and data transparency tools, with significant investments in UID2 and Audience Unlimited, enhancing its competitive edge [2] - TTD's disciplined capital allocation is evident as it repurchased $261 million worth of stock in the second quarter, while projecting revenues of at least $717 million for the third quarter, indicating a 14% year-over-year growth [3][4] Financial Performance - TTD's adjusted EBITDA margin stands at nearly 39%, showcasing operational efficiency [1] - The company expects adjusted EBITDA to be around $277 million for the third quarter, contributing to steady cash flows [3] - TTD's liquidity allows for opportunistic share buybacks and investments in AI infrastructure and global expansion [4][5] Competitive Landscape - TTD faces competition from Amazon, which is increasing investments in its DSP and CTV businesses, leveraging extensive proprietary data for optimization [6][7] - Amazon's cash and cash equivalents were reported at $57.7 billion, providing it with significant resources to scale its advertising business [7] - Magnite, another competitor, reported an operating cash flow of $33.9 million and a cash balance of $426 million, indicating a different financial position compared to TTD [8]

Core Insights - Despite the Nasdaq Composite and S&P 500 indices reaching all-time highs, there are still investment opportunities in the tech sector for discerning investors [1][2] Group 1: The Trade Desk - The Trade Desk has been a popular buy-side digital advertising platform since its IPO in 2016, attracting customers due to its neutrality compared to competitors like Google and Amazon [3] - The company's growth faced challenges in 2025 after missing revenue projections for Q4 2024, leading to a 57% decline in stock price from its 2025 peak [4] - Transition issues from the legacy platform Solimar to the new AI-based platform Kokai have caused user confusion and dissatisfaction, resulting in lawsuits [5] - Recent improvements in addressing Kokai's issues have led to a 22% year-over-year revenue increase for the first half of 2025, with the stock rising 17% since mid-September [6] - The Trade Desk's P/E ratio stands at 62, which is double the S&P 500 average, but the stock is currently trading below its historical earnings multiple of 150 [7] Group 2: Reddit - Reddit's shares have decreased by 23% from their all-time high earlier this year, despite a 508% increase since its IPO in March 2024 [8] - Concerns regarding the decreasing citation of Reddit sources by AI models like OpenAI's ChatGPT have raised doubts about the value of Reddit's data, potentially impacting revenue from data licensing [9][10] - The majority of Reddit's revenue (nearly 90%) comes from advertising, making the potential decline in AI-driven traffic a significant concern [11] - Despite these challenges, key metrics such as user growth, revenue growth, and earnings growth remained solid as of the latest earnings report for Q2 2025 [12] - Investors are encouraged to consider buying Reddit shares on the dip, with the next earnings report expected around November 3, 2025 [13] Group 3: Investment Considerations - Both The Trade Desk and Reddit have faced skepticism regarding their competitive advantages, leading to significant stock sell-offs [14] - Successful investing involves assessing whether market reactions to new challenges are overreactions or indicative of long-term issues [15] - Continued growth in popularity and revenue for both companies suggests potential for stock price recovery over time [15]