Digital advertising platform The Trade Desk (NASDAQ: TTD) announced better-than-expected revenue in Q3 CY2025, with sales up 17.7% year on year to $739.4 million. Guidance for next quarter’s revenue was better than expected at $840 million at the midpoint, 1% above analysts’ estimates. Its non-GAAP profit of $0.45 per share was in line with analysts’ consensus estimates.

Is now the time to buy TTD? Find out in our full research report (it’s free for active Edge members).

StockStory’s Take

The Trade Desk delivered third quarter results that met or exceeded Wall Street expectations, driven by ongoing strength in connected TV (CTV) advertising and continued adoption of its AI-powered Kokai platform. Management highlighted that CTV remains the company’s fastest-growing channel, with CEO Jeff Green stating, “CTV remains our largest and fastest-growing channel, continuing to grow at a faster rate than our overall business.” The company also benefited from deeper relationships with large brands and agencies, supported by operational changes and product innovations introduced over the past year.

Looking ahead, The Trade Desk’s guidance is shaped by strong momentum in CTV, expanding international markets, and new product features aimed at improving advertiser performance and efficiency. Management emphasized the anticipated impact of recent product launches—especially Audience Unlimited and new trading modes—on platform adoption and customer retention. CFO Alex Kayyal noted, “Our outlook is really grounded in the trends we’ve observed so far in October and November, and we feel good about the guide,” while also pointing to disciplined investment and operational rigor as ongoing priorities.

Key Insights from Management’s Remarks

Management credited the quarter’s growth to the rapid adoption of CTV, product innovation in its advertising platform, and a renewed focus on operational discipline and talent realignment.

• CTV and video channel momentum: CTV advertising led revenue growth, outpacing all other channels as more advertisers shifted budgets to premium streaming content. Management attributed this to the growing popularity of decision-based buying and the increasing reach of premium video inventory.

• AI-driven platform enhancements: The Kokai platform, now used by nearly 85% of clients as the default, delivered measurable improvements in campaign performance, including lower acquisition costs and higher click-through rates compared to prior versions. CEO Jeff Green cited a 26% better cost per acquisition and 94% improved click-through rates.

• Operational restructuring and leadership changes: The company appointed a new COO, CFO, and CRO, with a focus on scaling operational rigor and accountability. These changes enabled better cross-regional coordination and more data-driven execution, which management believes are positioning the company for future growth.

• Product innovation and launches: Newly introduced features, including Audience Unlimited, trading modes, and upgrades to the data marketplace, are designed to simplify campaign management and enhance targeting. Management expects these to drive platform adoption and customer stickiness.

• International and vertical diversification: Growth outside North America outpaced domestic gains, supported by investments in EMEA and APAC, and expansion into new verticals like healthcare, automotive, and technology. Management reported that international markets now represent a growing portion of overall revenue, and that momentum is expected to continue.

Drivers of Future Performance

The Trade Desk expects continued growth, underpinned by CTV expansion, AI-driven product differentiation, and further scaling in international markets.

• AI and product-led differentiation: Management believes that continued investment in AI-powered features such as Kokai, Deal Desk, and Audience Unlimited will improve campaign performance and reduce costs for advertisers, driving sustained customer adoption and platform stickiness.

• International market expansion: The company is prioritizing growth outside North America, with ongoing investments in local teams and infrastructure. CFO Alex Kayyal highlighted international markets as “white space,” noting accelerated growth in EMEA and APAC is contributing to a more diversified revenue base.

• Retail media and new verticals: The expansion of retail media, along with deeper penetration in health, automotive, and technology sectors, is expected to fuel incremental wallet share from large advertisers. Management sees these verticals as essential for future revenue streams, particularly as traditional advertisers seek more data-driven, measurable outcomes.

Catalysts in Upcoming Quarters

In the coming quarters, our team will be closely monitoring (1) the pace of adoption and impact of new features such as Audience Unlimited and trading modes, (2) continued growth in CTV and international markets as indicators of platform scalability, and (3) the effectiveness of operational changes following recent leadership hires. The impact of AI-driven enhancements and evolving advertiser preferences will also be key markers for execution.

The Trade Desk currently trades at $45.19, down from $45.86 just before the earnings. In the wake of this quarter, is it a buy or sell? The answer lies in our full research report (it’s free for active Edge members).

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