TTD · Q3 2025 Earnings

Bullish

Trade Desk (The)

Reported November 6, 2025

30-second summary

Trade Desk delivered $739M in Q3 revenue (+18% YoY), beating the $717M minimum guide by $22M, with adjusted EBITDA margin expanding to 43% — a sharp profitability step-up that wasn't in the prior guide. Ex-political growth came in at ~22%, ~400bps above the ~18% framing management set last quarter. The Q4 guide of "at least $840M" with ~18.5% ex-political growth implies a sequential ex-political deceleration of ~350bps off the Q3 actual, though the headline is still a beat-and-raise. Combined with a $375M Q4 adjusted EBITDA guide (~44.6% implied margin), this print resolves the central Q2 watch items in the bull's favor on margins, while reframing the growth debate around whether Q4's ex-political guide is conservative or a real step-down.

Headline numbers

EPS

Q3 FY2025

$0.45

Revenue

Q3 FY2025

$0.74B

+18.0% YoY

Operating margin

Q3 FY2025

21.8%

Key financials

Q3 FY2025

Metric	Q3 FY2025	YoY	Q2 FY2025	QoQ
Revenue	$0.74B	+18.0%	$0.69B	+6.5%
EPS	$0.45	—	$0.41	+9.8%
Operating margin	21.8%	—	16.8%	+500bps

Guidance

Strong Q3 beat on both revenue (+3% above minimum guidance) and Adjusted EBITDA (+15% above estimate); Q4 guidance implies moderation in growth rate ex-political spending but sustained high profitability margins.

Guidance is issued for both next quarter and the full year. Both may appear below.

Actuals vs prior guidance

Metric	Period	Prior guide	Actual	Δ	Result
Revenue	Q3 FY2025	at least $717 million	$739 million	+$22M above guide	Beat
Revenue YoY growth	Q3 FY2025	14% year-over-year growth	18% year-over-year growth	+4 percentage points above guide	Beat
Revenue YoY growth (excluding political)	Q3 FY2025	approximately 18% year-over-year basis	approximately 18% year-over-year basis	in-line	Met
Adjusted EBITDA	Q3 FY2025	approximately $277 million	approximately $318 million	+$41M above guide	Beat

New guidance

Metric	Period	Guide	YoY
Revenue	Q4 FY2025	at least $840 million	—
Revenue YoY growth (excluding political spend)	Q4 FY2025	approximately 18.5% year-over-year	approximately 18.5% YoY
Adjusted EBITDA	Q4 FY2025	approximately $375 million	—

Platform metrics

Q3 FY2025

Segment	Q3 FY2025
Customer Retention	>95%

Profitability

Q3 FY2025

Segment	Q3 FY2025
Adjusted EBITDA Margin	43%
Operating Cash Flow (Q3)	$225M
Non-GAAP Net Income Margin	30%

Management tone

Narrative arc: Q2 "structural shift in progress" → Q3 "structural inevitability confirmed."

Kokai reframed from "best upgrade" to category-redefining moat. Q2 introduced quantified Kokai proof points (Samsung +43%, Cash Rewards +73%, 20-point KPI improvements). Q3 escalated both the scale and the claim: "Kokai is the best upgrade we have ever made to our product, relative to all previous versions and certainly relative to Solimar... Kokai has delivered, on average, 26% better cost per acquisition, 58% better cost per unique reach, and a 94% better click-through rate." These are platform-wide averages, not cherry-picked case studies — a meaningful step-up in disclosed evidence. Adoption progressed to "nearly 85% using Kokai as their default experience," up from the ~75% baseline cited in Q2.

International growth elevated from "emerging opportunity" to "core driver." Q2 mentioned international as a tailwind; Q3 quantified the framing: "Outside the US, our business is growing significantly faster than the United States. Given that 60% of the TAM is outside of the US, this movement is in the right direction." CFO Alex Kayyal reinforced the point, noting international growth continues to outpace North America, with international representing ~13% of Q3 revenue. Combined with the new leadership emphasis (COO Vivek Kundra, new CFO Alex Kayyal, new CRO Anders Mortensen), the operational scaling narrative now has both a growth axis (international) and a discipline axis (account planning, data-driven culture).

Posture on supply chain and auction integrity hardened. Management used the prepared remarks to position OpenPath, OpenAds, PubDesk, and DealDesk as a coordinated supply-side overhaul rather than discrete products — with DealDesk inventory reportedly outperforming Solimar by ~35% and Hearst seeing 4x fill-rate improvement and 23% revenue lift on OpenPath. The framing positions Trade Desk as the referee in the auction layer, which is rhetorically aggressive but lines up with the disclosed throughput growth.

Recurring themes management leaned on this quarter:

Structural shift toward open internet as CMOs demand measurable ROI and objectivityAI-powered platform differentiation through distributed AI architecture (Kokai)Operational rigor and accountability culture under new leadershipSupply chain transparency innovations (OpenPath, OpenAds, DealDesk) creating buyer advantagesWalled gardens losing share as cost-of-goods-sold economics force competitors to own-and-operate focusInternational expansion outpacing North America with significant untapped TAM

Risks management surfaced:

Some large brands in CPG/retail still pressured by tariffs, inflation, and legacy cheap-reach mindsetsAI-generated search reducing available publisher inventory (though management dismisses as de minimis)Google antitrust trial outcome and potential remedies could create near-term uncertaintyExecution risk on scaling new leadership team across global operationsCTV supply concentration and publisher yield management dynamics

Answers to last quarter's watch list

Did Q3 revenue clear the $717M floor and where did ex-political growth land? Yes — revenue came in at $739M, $22M above the floor. Headline growth was 18% YoY (4 points above the 14% guide); ex-political growth landed at ~22%, ~400bps above the ~18% framing management set last quarter. Underlying growth accelerated, not just the political-aided headline. Status: Resolved positively

Kokai 100% adoption by year-end: Q3 disclosed ~85% of clients using Kokai as their default experience, up from the ~75% baseline cited in Q2. Management did not explicitly reconfirm the year-end 100% target, but the progression is on-track and directionally consistent. Status: Resolved positively

Does the "Kokai clients spending 20% faster" claim survive broader adoption? Management restated the wallet-expansion thesis with platform-wide averages (26% better CPA, 58% better cost per unique reach, 94% better CTR) rather than a single spend-acceleration figure. The metric framing is holding under a wider sample, strengthening the wallet-expansion thesis. Status: Resolved positively

Adjusted EBITDA margin trajectory: This was the cleanest positive resolution of the print. Q3 margin came in at 43% versus the implied guide of ~38.6% — a 400bps beat. Q4 guide implies ~44.6%. The Q2 concern about flat-to-down margins is fully reversed; operating leverage is now expanding. Status: Resolved positively

Amazon DSP / Prime Video competitive read-through: Management's dismissive framing intensified rather than moderated, with Green using the Q&A to argue Amazon's DSP is structurally pointed at Prime Video rather than the open internet. Without independent customer-overlap data, the read remains rhetorical, but the headline beat and Q4 guide suggest the competitive position is at least holding. Status: Continue monitoring

JBP conversion: Disclosed in Q&A — ~180 live JBPs, ~80 in pipeline worth "billions," and JBPs now ~half the business. JBP spend growth continues to outpace non-JBP. Status: Resolved positively

What to watch into next quarter

Does Q4 revenue clear the $840M floor with ex-political growth at or above 18.5%? The Q4 ex-political guide sits ~350bps below the Q3 ex-political actual of ~22%. Either Q4 prints meaningfully above 18.5% (validating Q3 as a new run-rate) or it lands near the guide (validating Q3 as a wallet-share pull-forward).

Q4 adjusted EBITDA margin: does the implied 44.6% land? Margin steps from 43% (Q3) to ~44.6% (Q4 guide). Either this is structural and sustains, or it reflects political-mix tailwind that reverses in Q1 — watch the FY2026 initial commentary for margin framing.

Initial 2026 revenue and margin framing. Management twice flagged 2026 positioning ("uniquely positioned," "well positioned to grow our share of the advertising TAM"). Whether the Q4 print includes a quantified FY2026 growth aspiration — or stays qualitative — will signal confidence level.

Kokai final adoption step. Q3 reached ~85% default experience, up from ~75%. Watch whether Q4 confirms full adoption or extends the timeline.

International revenue mix disclosure. International was 13% of Q3 revenue and growing faster than NA. A disclosed international growth rate or a higher mix print in Q4 would substantiate the TAM-expansion narrative.

JBP conversion of the $80 pipeline. With ~180 live JBPs already half of revenue, conversion velocity on the 80 pipeline JBPs is now the most concrete leading indicator of 2026 large-advertiser wallet capture.

Sources

Trade Desk Q3-2025 press release (8-K Exhibit 99.1), filed November 6, 2025 — https://www.sec.gov/Archives/edgar/data/1671933/000167193325000143/ttd-20251106x8kexx991.htm
Trade Desk Q3-2025 prepared remarks and Q&A (Sean Patel/SIG, Justin Patterson/KeyBank exchanges)

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