The Trade Desk Inc Earnings - Q1 2025 Analysis
Positives
- The company showed resilience in Q1, growing revenue by 25% YoY, surpassing expectations.
- The company is confident in its ability to outpace the market and capitalize on the significant opportunities ahead.
- The company is highly encouraged by the improvements to its business that led to its outperformance in Q1.
- The company is laying groundwork in Kokai for types of things like Deal Desk, which will help create a lot more sophistication and performance out of upfronts or forward market than what currently exists in the upfronts.
- The company showed incredible resilience, growing revenue 25% YoY, despite increasing economic uncertainty.
Q&A Highlights - Q1 2025
Analyst asked about the potential implications of Google deemphasizing their open internet businesses on DSPs like The Trade Desk, SSPs, and other participants in the open internet value chain.
Jeffrey Terry Green, CEO of The Trade Desk, explained that Google's recent verdicts in antitrust trials have been a rough year for the company, and the news of Apple's decision to focus on AI search engines instead of Google's is a significant development. He believes that Google will focus more on their core business, which is largely about search, and that means they will be less focused on the open internet. This means that The Trade Desk can compete more effectively in a fair market, as they have been winning in an unfair market and the market is getting fairer. He also noted that there have been other developments, such as Spotify's feud with Apple, which suggest that walled gardens and draconian tactics around auctions are being put in check. He believes that this is good for the open internet and that The Trade Desk is well-positioned to benefit from these changes.
Analyst asked about Amazon's competitive landscape and how it compares to The Trade Desk.
Jeffrey Terry Green explained that the TAM is massive and there is room for multiple players to succeed. He noted that Amazon's focus on search/Gemini and YouTube makes DV360 a tool to buy YouTube, which is their primary focus. He also mentioned that Amazon competes with many Fortune 500 companies across various industries, which puts them in a difficult position. He believes that The Trade Desk's objective DSP aligns its interest with buyers, and that there is no way that Amazon can own the lion's share of the market. He also noted that Amazon's DSP is really a buying tool for Prime Video, and that it's unlikely that other content owners would partner with a company that is also trying to put its own ads ahead of their content.
Analyst asked about the progress of OpenPath and the company's expectations for the upfront.
Jeffrey Terry Green explained that the upfront is facing a degree of uncertainty due to the current economic environment, and that programmatic advertising is likely to be stronger than linear. He noted that the upfront is a more agile setting, and that program
Analyst asked about The Trade Desk's view on Google's investment in DV360 and whether it is due to the DOJ suit.
Jeffrey Terry Green explained that Google's investment in DV360 is likely driven by their need to monetize their almost unlimited supply of YouTube, rather than being motivated by the DOJ suit. He also suggested that Google may consider focusing solely on monetizing their own properties, such as YouTube, and leaving the open internet to others.
Analyst asked about The Trade Desk's performance in Q1, specifically regarding Kokai adoption and upgrades.
Laura Schenkein explained that the company is proud of its strong Q1 performance, which was driven by the uptake in Kokai adoption and the early momentum from upgrades made in Q4. She also clarified that the Q4 to Q1 sequential strength was not driven by political factors, but rather by the changes the company has made to its business.
