The Trade Desk’s second quarter results came amid a significant negative market reaction, despite revenue and non-GAAP profit metrics aligning with or exceeding Wall Street expectations. Management cited ongoing strength in connected TV (CTV) and retail media, as well as rapid adoption of the Kokai AI-driven platform, which is now used for the majority of client spend. CEO Jeff Green noted that some large advertiser categories, especially auto and consumer packaged goods, experienced volatility due to tariff and macroeconomic pressures, which created short-term challenges in spend allocation across the platform.
Is now the time to buy TTD? Find out in our full research report (it’s free).
The Trade Desk (TTD) Q2 CY2025 Highlights:
- Revenue: $694 million vs analyst estimates of $685.9 million (18.7% year-on-year growth, 1.2% beat)
- Adjusted EPS: $0.41 vs analyst estimates of $0.41 (in line)
- Adjusted Operating Income: $245.7 million vs analyst estimates of $102.7 million (35.4% margin, significant beat)
- Revenue Guidance for Q3 CY2025 is $717 million at the midpoint, roughly in line with what analysts were expecting
- EBITDA guidance for Q3 CY2025 is $277 million at the midpoint, above analyst estimates of $274.6 million
- Operating Margin: 16.8%, in line with the same quarter last year
- Billings: $3.49 billion at quarter end, up 20.9% year on year
- Market Capitalization: $26.58 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From The Trade Desk’s Q2 Earnings Call
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Shyam Patil (SIG): Asked what gives management confidence in The Trade Desk's positioning given digital ad market uncertainty. CEO Jeff Green pointed to data scale, AI integration, and growing share in CTV as key advantages, but acknowledged macro volatility affecting large brands.
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Youssef Squali (Truist Securities): Inquired about Amazon’s competitive positioning. Green asserted that Amazon is not a direct competitor due to its focus on owned media and lack of objectivity, emphasizing The Trade Desk’s independent, open Internet strategy.
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Vasily Karasyov (Cannonball Research): Sought color on the impact of tariffs and large brand volatility. Green and CFO Laura Schenkein explained that tariff-driven uncertainty is real for major advertisers, but see programmatic’s flexibility as a long-run advantage.
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Justin Patterson (KeyBanc): Asked about Kokai and AI-driven ROI. Green described rapid innovation in Kokai, with early client adoption showing 20%+ performance improvements and expectations for broader gains as usage expands.
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Jessica Reif Ehrlich (Bank of America): Questioned open Internet share versus walled gardens. Green predicted a long-term shift in spend to the open Internet, citing stronger brand engagement in premium content and ongoing inefficiencies in walled garden measurement.
Catalysts in Upcoming Quarters
Looking forward, our team will watch (1) the pace and breadth of client migration to Kokai and the associated uplift in spend, (2) further expansion and monetization of CTV and retail media channels, and (3) how major advertiser behavior shifts in response to tariff policies and macroeconomic conditions. We will also monitor the impact of new leadership and organizational changes on execution and strategy.
The Trade Desk currently trades at $54.30, down from $88.37 just before the earnings. Is the company at an inflection point that warrants a buy or sell? Find out in our full research report (it’s free).
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