The Trade Desk Q1 2025 Earnings Analysis
Dive into $TTD Trade Desk’s Q1 2025 earnings with review of financial performance, key metrics, operating expenses, dilution, customer growth, future outlook
Financial Results:
↗️$616M rev (+25.5% YoY, +22.3% LQ) beat est by 7.1%
↘️GM* (78.3%, -1.7 PPs YoY)🟡
↗️Adj EBITDA Margin (33.8%, +0.8 PPs YoY)
↗️Operating Margin* (29.7%, +1.3 PPs YoY)
↗️FCF Margin (37.7%, +1.8 PPs YoY)
↗️Net Margin (26.8%, +0.1 PPs YoY)
↗️EPS* $0.33 beat est by 32.0%
*non-GAAP
➡️Customer Retention 95% (95% LQ)
Operating expenses
↘️S&M*/Revenue 20.1% (-0.6 PPs YoY)
↘️R&D*/Revenue 14.8% (-1.4 PPs YoY)
↘️G&A*/Revenue 13.7% (-1.1 PPs YoY)
Dilution
↗️SBC/rev 21%, +3.4 PPs QoQ
↗️Basic shares up 1.3% YoY, +0.4 PPs QoQ
↘️Diluted shares down -0.7% YoY, -2.1 PPs QoQ🟢
Guidance
↘️Q2'25 $682.0M guide (+16.6% YoY) missed est by -0.6%🔴
Key points from Trade Desk’s First Quarter 2025 Earnings Call:
Financial Performance
The Trade Desk reported Q1 revenue of $616M, up +25% YoY, exceeding internal expectations. Adjusted EBITDA reached $208M with a 34% margin, while free cash flow totaled $230M. Net cash from operations was $291M, and adjusted net income came in at $165M, or $0.33 per share. The company repurchased $386M of Class A shares, reinforcing its capital return strategy. Operating expenses excluding SBC rose +23% YoY to $433M, primarily due to AI and platform investments. The company ended the quarter with $1.7B in cash and no debt.
CTV Growth
CTV remained the largest and fastest-growing channel, accounting for a high-40s% share of total spend. Growth was fueled by increased ad supply as streamers expanded monetization efforts. Vizio saw a +39% increase in programmatic revenue after integrating with OpenPath. CTV's buyer-favorable conditions allowed TTD to extract stronger campaign ROI. UID2 adoption among CTV publishers also accelerated, enhancing identity resolution and targeting. Jeff Green emphasized CTV as the “kingpin of the open internet.”
Kokai Adoption
By Q1-end, two-thirds of clients had adopted Kokai, ahead of expectations. The platform delivered -42% cost per unique reach, -24% cost per conversion, and -20% CPA. Deutsche Telekom, using Kokai and first-party data, saw an 11x boost in post-click conversions and an 18x CPA improvement. Kokai campaigns now use +30% more data elements per impression, powered by embedded Koa AI. Platform usage is expanding rapidly as clients scale test campaigns into full adoption.
UID2 and OpenPath
UID2 became the dominant ID framework, adopted by nearly all scaled publishers, especially in CTV. Non-adopters are under-monetizing their inventory. OpenPath drove substantial gains: Arena Group saw +4x fill rate and +79% revenue; The New York Post achieved +8x fill rate and +97% revenue; an unnamed network increased fill rate 7x and revenue +25%. Vizio reported +39% revenue from OpenPath integration. OpenPath boosts transparency and supply path efficiency without replacing SSPs.
Product Innovations
The Trade Desk launched Kokai, its next-gen AI-native platform, and integrated Sincera metadata for supply chain transparency. Upcoming product Open Sincera will provide advertisers and publishers with a free analytics layer on supply quality. The company is also preparing to launch Deal Desk, a framework to support forward-market buying and modernize legacy Upfront structures. These innovations target both branding and performance objectives.
Global Expansion
International markets contributed 12% of spend, with growth outpacing North America for the ninth consecutive quarter. Management reaffirmed its strategy to scale globally, leveraging growing CTV adoption and programmatic maturity in new regions.
OpenPath and Sincera
OpenPath and Sincera enhance supply path visibility and efficiency. OpenPath acts as both a demand gateway and audit mechanism, while Sincera’s metadata supports transparency and attribution. Both are now embedded into Kokai. OpenPath enables real-time benchmarking and flags auction manipulation, making it instrumental post-Google antitrust ruling.
Retail Media
Retail media is expanding rapidly on the platform. The Walmart DSP is gaining traction by linking ad impressions to real-world sales. Kokai facilitates deeper integration of retail data, with campaigns using 30% more data signals per impression, strengthening attribution and targeting.
Customer Wins
Deutsche Telekom achieved an 11x increase in post-click conversions and an 18x CPA improvement using Kokai. Arena Group lifted fill rate by 4x and revenue by +79%. The New York Post improved fill rate by 8x and revenue by +97%. Vizio reported a +39% increase in CTV programmatic revenue. These gains underscore TTD’s ability to deliver ROI through programmatic transparency and data-driven buying.
JBP Growth
Over 40% of platform spend is now under Joint Business Plans (JBPs), with that portion growing +50% faster than total spend. This reflects deeper strategic alignment with key brands and agencies.
Competitive Positioning
The Trade Desk continues to gain share from walled gardens. Legal victories against Google (declared an illegal monopoly) and scrutiny of Meta’s auction tactics are shifting the landscape in favor of open platforms. DV360 and Amazon DSP are primarily focused on proprietary inventory (YouTube, Prime Video), limiting objectivity. TTD benefits from its neutrality and ability to transact across the open internet.
Reorganization Impact
Organizational restructuring improved platform delivery and client engagement. The company now operates 100+ agile scrums, releasing updates weekly. The reorg accelerated Kokai rollout, improved performance metrics, and expanded JBPs. These changes positioned TTD for scalable, AI-led growth across verticals and regions.
Challenges
Rising macro uncertainty, driven by the 2025 U.S. election cycle and cautious client budgets, created planning complexity. CFOs are increasingly focused on ROI, prompting brands to prioritize performance-driven channels. The Trade Desk positioned itself as a strategic partner amid tightening budgets, helping advertisers allocate capital efficiently.
Future Outlook
For Q2 2025, management guided revenue of at least $682M, up +17% YoY, including a 1% headwind from prior political spend. Adjusted EBITDA is forecasted at $259M. The company remains focused on either grabbing share in weak macro conditions or accelerating growth if conditions stabilize. With <2% of the global ad TAM captured, long-term opportunity remains substantial.
Management comments on the earnings call.
Product Innovations
Jeff Green, Co-Founder and Chief Executive Officer
"We are in a tremendously privileged position of being the largest platform pointed at the open internet, looking across roughly 17 million ad opportunities a second, along with the most premium inventory and data sources in the world."
"Kokai has already proven itself and the results are fantastic. The injection of our industry-leading Koa AI tools across every aspect of our platform has been a game-changer, and we are just getting started."
"We will introduce the final major components of Kokai, including a revolutionary new approach for understanding and managing the performance of deals, one of the most important things we do to realize the value of programmatic."
CTV Growth
Jeff Green, Co-Founder and Chief Executive Officer
"CTV is the kingpin of the open internet, and the open internet is where all of the most beloved content of the internet exists."
"CTV companies are once again leading the supply dynamics of the open internet. They are plugging directly into our demand. They are also describing their supply in greater detail than ever."
"Streamers have invested more into advertising. We're seeing more supply than demand in all forms of advertising, but that is especially important in CTV."
Kokai Adoption
Jeff Green, Co-Founder and Chief Executive Officer
"Kokai adoption accelerated as we were exiting December, and now about two-thirds of our clients are now using Kokai, which is ahead of schedule."
"Clients that have shifted over have seen a 42% reduction in cost per unique reach. Kokai is delivering on lower funnel KPIs, including 24% lower cost per conversion and 20% lower cost per acquisition."
"I'm confident that by the end of this year, we will reflect on Kokai as the most powerful buying platform the industry has ever seen."
UID2 and OpenPath Expansion
Jeff Green, Co-Founder and Chief Executive Officer
"Nearly every scaled player has adopted UID2, and those that have not are under-monetizing their inventory."
"Arena Group... with OpenPath, they were able to increase their fill rates by 4x, and improve programmatic revenue by 79%."
"The New York Post saw its digital advertising fill rate increase more than 8x, and programmatic revenue increased 97% with OpenPath."
"OpenPath is keeping exchanges and SSPs in check so that we don't have to wait on government to untangle corrupt practices like those recently exposed at Google."
Competitors
Jeff Green, Co-Founder and Chief Executive Officer
"We’ve been winning share in the DSP race year-after-year and quarter-after-quarter, and we’ve done that in an unfair market."
"DV360 is primarily technology to buy YouTube. Amazon’s DSP is primarily a product built to buy Amazon’s Prime Video."
"While they do call it a DSP, that DSP is really there as a buying tool for Prime Video. That’s not objective."
"Why would a Disney, or a Peacock, or a Paramount... partner with a company that is also trying to put its own ads ahead of that?"
Customers
Jeff Green, Co-Founder and Chief Executive Officer
"Deutsche Telekom... saw an 11x improvement in post-click conversions attributed to advertising and an 18x improvement in the cost of those conversions."
"Our JBP pipeline and the number of JBPs in active contract negotiations are at all-time highs."
"Clients that are adopting Kokai are realizing major benefits... They begin by testing Kokai on several initial campaigns, seeing meaningful performance improvements, and then expand."
Sincera
Jeff Green, Co-Founder and Chief Executive Officer
"Following the acquisition, we have been working to embed Sincera data across Kokai, so our clients can have as much data and signal as possible about ad performance."
"We plan to relaunch their product for the AdTech community and offer a new version of Sincera called Open Sincera."
"This product will be free to advertisers, to agencies, to AdTech companies, to sellers and to publishers who want to better understand the supply chain and how to make it more efficient."
Retail Media Momentum
Laura Schenkein, Chief Financial Officer
"Advertisers are increasingly using retail data from our marketplace to tie ad spend to real-world sales."
Jeff Green, Co-Founder and Chief Executive Officer
"Brands are continuing to see tremendous value with the Walmart DSP."
International Growth
Laura Schenkein, Chief Financial Officer
"International growth again outpaced North America for the ninth quarter in a row."
"We remain optimistic that our business outside North America can continue to be a strong contributor to our overall growth this year and in the years to come."
Challenges
Jeff Green, Co-Founder and Chief Executive Officer
"In this environment, we want to win market share from our competitors... We did the same thing during the pandemic."
"Some pressure has intensified in Q1 with some growing concerns about macro uncertainty from some of our clients."
Laura Schenkein, Chief Financial Officer
"We want to acknowledge the volatile macro backdrop, particularly its impact on large global brands."
Future Outlook
Jeff Green, Co-Founder and Chief Executive Officer
"We continue to grow at a healthy pace and consistently generate strong EBITDA and free cash flow."
"We’ve been winning in an unfair market. We are even more confident we can win in a fair market."
"Over the rest of this year, depending on what the macro environment throws at us, we’ll either grab land or accelerate growth. But either way, the destination on the horizon is the same."
Thoughts on Trade Desk Earnings Report $TTD:
🟢 Positive
Revenue grew +25.5% YoY to $616M, beating estimates by 7.1%
Adjusted EBITDA margin rose to 33.8%, up +0.8pp YoY
Free cash flow margin expanded to 37.7%, up +1.8pp YoY
EPS of $0.33, beating estimates by +32.0%
Operating margin increased to 29.7%, up +1.3pp YoY
Net margin improved to 26.8%, up +0.1pp YoY
Customer retention held at 95%
Retail media growth supported by Walmart DSP and improved attribution
Deutsche Telekom saw 11x conversion lift, 18x CPA improvement on Kokai
OpenPath drove revenue growth: +79% at Arena Group, +97% at NY Post, +39% at Vizio
Two-thirds of clients adopted Kokai, driving strong ROI metrics
40%+ of spend now under JBPs, growing +50% faster than overall spend
International growth outpaced North America for 9th straight quarter
$386M in share repurchases, with $1.7B in cash and no debt
🟡 Neutral
Gross margin declined to 78.3%, down -1.7pp YoY
S&M, R&D, and G&A expenses declined as a % of revenue YoY, showing efficiency gains
Kokai rollout ahead of plan, but full transition still in progress
Sincera integration ongoing; Open Sincera and Deal Desk yet to launch
UID2 adoption strong, but some publishers still under-monetizing
Macro uncertainty and cautious brand budgets require continued focus on efficiency
🔴 Negative
Q2 revenue guidance of $682M (+16.6% YoY) missed consensus by -0.6%
Stock-based comp rose to 21% of revenue, up +3.4pp QoQ
Basic shares increased +1.3% YoY, adding mild dilution
Planning complexity due to 2025 U.S. election cycle and brand budget scrutiny
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Disclaimer: This earnings review is for informational purposes only and does not constitute financial, investment, or trading advice.