The Trade Desk Inc Earnings - Q3 2025 Analysis & Highlights
Key Takeaways
The Trade Desk's Q3 2025 earnings call highlighted strong revenue growth, particularly in CTV, driven by the shift to biddable CTV and the scaling of retail media. The company emphasized its focus on the open Internet, AI-driven platform enhancements, and strategic leadership changes to capitalize on expanding market opportunities.
Key Financial Results:
Q3 2025 Revenue: $739 million, representing 18% year-over-year growth.
Excluding political spend, revenue increased approximately 22% year-over-year.
Adjusted EBITDA: Approximately $317 million, about 43% of revenue.
Adjusted net income: $221 million, or $0.45 per diluted share.
Net cash provided by operating activities was $225 million, and free cash flow was $155 million in Q3.
Business Segment Results:
CTV: Remains the largest and fastest-growing channel, growing faster than the overall business.
Video (including CTV): Represented around 50% of the business in Q3.
Mobile: Represented a low 30s percentage share of the business during the quarter.
Display: Represented a low double-digit share.
Audio: Represented around 5%.
North America: Represented 87% of the business in Q3.
International: Represented about 13%, with growth outpacing North America.
Capital Allocation:
Share Repurchase Program: Used $310 million of cash to repurchase Class A common stock in Q3.
The board of directors approved a new authorization of $500 million.
The company had about $1.4 billion in cash, cash equivalents, and short-term investments at the end of the quarter.
The company had no debt on the balance sheet.
Industry Trends and Dynamics:
Shift to Biddable CTV: Accelerating, expected to become the default buying model.
Retail Media: Continues to scale rapidly.
Open Internet Growth: Consumers spend two-thirds of their digital time on the open Internet.
AI Acceleration: AI is improving the effectiveness of the open Internet.
Buyer's Market: Supply exceeds demand in digital advertising, strengthening the market for buyers.
Competitive Landscape:
Walled Gardens: Big brands are increasingly wary of walled gardens.
Amazon, Apple, Google, Facebook: Primarily focused on expanding and monetizing their owned and operated inventory and content.
The Trade Desk vs. Google: The Trade Desk seems to have surpassed Google in the amount bought on the open Internet.
Objectivity: The Trade Desk emphasizes its objectivity as a competitive advantage.
Macroeconomic Environment:
Some large brands, particularly in categories like consumer products or CPG and then parts of retail are still feeling pressure from factors like tariffs and inflation.
Growth Opportunities and Strategies:
Joint Business Plans (JBPs): Continue to grow significantly faster than non-JBP accounts.
Platform Innovation: Launching market-changing products and upgrading the platform with AI.
OpenPath Growth: Grew by many hundreds of percentage points this year.
International Expansion: Business outside the US is growing significantly faster.
New Leadership: Welcomed a new COO, CFO, and CRO to drive operational progress and scale sales effectiveness.
Financial Guidance and Outlook:
Q4 2025 Revenue: Expected to be at least $840 million.
Excluding the benefit of US political ad spend in Q4 of 2024, the estimated growth in Q4 of this year would be approximately 18.5% on a year-over-year basis.
Adjusted EBITDA for Q4: Estimated to be approximately $375 million.
Well positioned to grow share of the advertising TAM, generate significant profitability and cash flow, and deepen the value delivering to advertisers in 2026.
