Advertising software maker The Trade Desk (NASDAQ:TTD) reported Q1 CY2025 results topping the market’s revenue expectations , with sales up 25.4% year on year to $616 million. The company expects next quarter’s revenue to be around $682 million, close to analysts’ estimates. Its non-GAAP profit of $0.33 per share was 32.4% above analysts’ consensus estimates.
Revenue: $616 million vs analyst estimates of $575.6 million (25.4% year-on-year growth, 7% beat)
Adjusted EPS: $0.33 vs analyst estimates of $0.25 (32.4% beat)
Adjusted Operating Income: $182.7 million vs analyst estimates of $2.2 million (29.7% margin, significant beat)
Revenue Guidance for Q2 CY2025 is $682 million at the midpoint, roughly in line with what analysts were expecting
EBITDA guidance for Q2 CY2025 is $259 million at the midpoint, above analyst estimates of $254.1 million
Operating Margin: 8.8%, up from 5.8% in the same quarter last year
Free Cash Flow Margin: 37.3%, up from 23.9% in the previous quarter
Billings: $3.1 billion at quarter end, up 27.6% year on year
Market Capitalization: $29.44 billion
StockStory’s Take
The Trade Desk’s first quarter results were shaped by accelerated adoption of its upgraded Kokai platform and a favorable shift in the competitive landscape, as management pointed to the ongoing impact of broad product and organizational changes made late last year. CEO Jeff Green highlighted that two-thirds of clients now use Kokai, which he described as delivering “exceptional” improvements in campaign performance and lower costs per conversion. Management also attributed outperformance to continued growth in connected TV (CTV) advertising, ongoing gains in retail media, and rising demand for transparent, open-internet ad solutions following recent industry regulatory actions.
Looking ahead, The Trade Desk’s leadership acknowledged macroeconomic volatility, with CFO Laura Schenkein noting that large global brands remain cautious amid uncertain conditions. However, management remains focused on “grabbing land”—or increasing market share—as both the digital advertising industry and the open internet evolve toward more level competition. The company expects new platform enhancements and secular tailwinds in streaming and retail media to support ongoing growth, while stating that execution on upgraded product features and supply chain transparency will be crucial for maintaining momentum.
Key Insights from Management’s Remarks
The Trade Desk’s management attributed the quarter’s results to rapid platform adoption, market share gains, and structural changes in digital advertising. They emphasized the impact of recent regulatory actions, new product rollouts, and organizational upgrades as key to outperformance and future positioning.
Kokai Platform Adoption: Management reported accelerated migration to the Kokai platform, now covering about two-thirds of client spend. Green stated that Kokai is already driving meaningful improvements in campaign efficiency, with clients seeing a 24% reduction in cost per conversion and a 20% reduction in cost per acquisition compared to prior offerings.
Regulatory and Legal Shifts: CEO Jeff Green emphasized that recent antitrust verdicts against Google and new regulatory scrutiny on other major platforms are creating a more competitive and “fair” digital ad market. He argued that The Trade Desk is positioned to benefit from these changes, as walled gardens like Google and Meta adjust their strategies and focus more on owned-and-operated properties rather than the open internet.
CTV and Retail Media Momentum: CTV (connected TV) remained the company’s largest and fastest-growing channel, with management highlighting increased supply, more direct integrations, and the adoption of identity solutions like UID2. The Trade Desk also noted growing traction in retail media, especially through partnerships that help brands link ad spend to in-store sales.
Supply Chain Transparency Initiatives: Products like OpenPath and the recently acquired Sincera are being used to provide clients and publishers with greater visibility into the programmatic ad supply chain. Management cited examples of publishers achieving higher fill rates and programmatic revenue gains after adopting OpenPath.
Organizational Upgrades and Leadership: The addition of Vivek Kundra as COO and revamped product and engineering processes were cited as factors behind higher productivity and faster rollout of new features. Over 100 engineering “scrums” are now shipping product weekly, supporting a more nimble, client-driven approach.
Drivers of Future Performance
Management’s outlook for the rest of the year centers on ongoing platform enhancements, industry-wide regulatory changes, and evolving advertiser preferences, rather than any single macroeconomic factor. The company sees structural tailwinds in streaming and retail data, but also notes some client caution given the uncertain economic backdrop.
Continued Kokai Rollout: The shift to the Kokai platform is expected to remain a core growth driver, with management indicating full client adoption by year-end. The completed rollout is projected to deliver improved campaign outcomes and attract both existing and new performance-focused advertisers.
Industry Regulation and Fair Competition: The company expects that antitrust enforcement and regulatory scrutiny of large ad platforms will gradually foster a more level playing field, enabling The Trade Desk to capture additional share from both existing walled gardens and less objective demand-side platforms.
CTV and Retail Media Expansion: Growth in connected TV and retail media is projected to persist, supported by direct partnerships and advanced identity solutions. Management believes these trends will help offset any short-term headwinds from cautious brand spending or shifting macroeconomic conditions.
Top Analyst Questions
Shyam Patil (Susquehanna): Asked how recent product and organizational upgrades, especially Kokai, contributed to Q1 performance. Jeff Green emphasized accelerated Kokai adoption, improved campaign results, and a stronger joint business plan pipeline as key outcomes.
Vasily Karasyov (Autonomous): Inquired about the impact of antitrust rulings on Google for the ad ecosystem. Green stated that these changes should make the market “more fair” and predicted that The Trade Desk is well-positioned to benefit from increased competition and less disruption from dominant platforms.
Justin Patterson (KeyBanc): Sought clarity on how management incorporated macro uncertainty into Q2 guidance. Green acknowledged increased client caution but said The Trade Desk will focus on “grabbing land” and leveraging new product upgrades to gain share regardless of the environment.
Matt Swanson (RBC): Asked about Amazon’s DSP and the evolving competitive landscape. Green explained that Amazon’s platform is mostly focused on Prime Video and that The Trade Desk’s objectivity and partnerships with content owners give it a unique advantage.
Jessica Reif Ehrlich (Bank of America): Queried the progress of OpenPath and expectations for the advertising Upfronts. Green highlighted strong publisher adoption, improved supply chain efficiency, and anticipated that macro uncertainty would shift more dollars to programmatic and digital channels.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will be monitoring (1) the pace of full Kokai adoption and measurable improvements in campaign performance for clients, (2) evidence that recent regulatory and legal changes are translating into tangible market share gains for The Trade Desk, and (3) continued expansion in CTV and retail media partnerships, especially as more advertisers shift budgets away from traditional channels. Execution on new product features and increased transparency in the programmatic supply chain will also be important signposts for sustained competitive advantage.
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