The Trade Desk (TTD) Q2 Revenue Up 19%

The Trade Desk (TTD -38.66%), a global leader in programmatic digital advertising, reported second-quarter 2025 results on August 7, 2025. The company delivered GAAP revenue of $694 million for Q2 2025, up 19% from the same period last year and above the $685.47 million Wall Street estimate (GAAP). Non-GAAP earnings per share came in at $0.41 for Q2 2025, surpassing analyst expectations of $0.18 non-GAAP diluted earnings per share. While both GAAP revenue and non-GAAP adjusted profits exceeded forecasts, the quarter showed some margin compression, as both GAAP net income margin and non-GAAP adjusted EBITDA margin declined compared to Q2 2024 and a continued increase in operating costs.

Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.

What Does The Trade Desk Do and What Drives Its Success?

The Trade Desk enables advertisers and agencies to buy digital ads in real-time using programmatic automation. Its platform lets users target audiences across media formats including connected TV (CTV), video, display, audio, and mobile on multiple devices. The core of the business is helping marketers get better performance from ad budgets using large-scale data and automated decisions.

For the past several years, it has focused on being an independent buy-side partner. This means it does not own or control media supply, and it forges direct long-term agreements with advertisers and agencies. This focus keeps interests aligned and has helped retain more than 95% of clients for 11 consecutive years. Key priorities now include leadership in CTV advertising, innovation through AI-powered tools, and strengthening privacy and transparency, such as with Unified ID 2.0 and OpenPath for supply chain transparency.

Quarter in Review: Growth, Products, and Key Metrics

The quarter delivered notable GAAP revenue growth, outperforming both internal guidance and market forecasts. The revenue figure (GAAP) rose 19.0% year-over-year to $694 million from the prior year’s $585 million, and exceeded analyst estimates by 1.2% (GAAP revenue). Adjusted EBITDA grew 12% compared to Q2 2024, but the adjusted EBITDA margin slid from 41% in Q2 2024 to 39% in Q2 2025 (non-GAAP). Operating income (GAAP) was $116.8 million, up from $85 million for Q2 2024 (GAAP net income). Non-GAAP EPS jumped to more than double the expectations, driven by strong topline and higher efficiency from platform investment, despite higher expenses.

Customer retention stayed above 95%. The quarter’s growth reflected continued share gains in programmatic advertising, a sector where buying and selling is automated and data-driven. The Trade Desk credits its long-term strategy and ongoing product upgrades for these results. The AI-powered Kokai platform is now used by about two-thirds of clients as of Q1 2025 and is a major driver behind campaign performance improvements. According to management, Kokai users have seen 24% lower cost per conversion and 20% lower cost per acquisition in Q1 2025, attributed to using 30% more data points per ad impression on Kokai in Q1 2025.

The company remains a leading player in CTV advertising, which is digital ads shown on streaming television platforms. While detailed numbers for this period were not broken out, prior commentary highlighted that in Q1 2025, video, which includes CTV, represented a high-40s percentage share of spending. New partnerships with media, data, and retail brands, along with ongoing international expansion, broadened omnichannel reach. Notable was the rollout of new data connections with partners like Visa, Instacart, and NIQ, fueling the platform’s relevance in retail media.

Investment in privacy and transparency remains a strategic pillar. Unified ID 2.0 adoption, a system for privacy-friendly audience targeting, continued with new partners such as AppsFlyer, Bell Media, and Snowflake in Q2 2025. The rollout of OpenPath, a supply chain tool that creates direct connections between advertisers and publishers, drove higher fill rates and ad revenue for participants -- for example, partner Freestar saw a threefold increase in inventory fill rate and a 27% lift in programmatic revenue from The Trade Desk within six months of onboarding. Additional enhancements like OpenSincera and Deal Desk aim to further simplify and clarify programmatic ad transactions.

Platform operations costs (GAAP) increased 36.7% year over year. This contributed to margin compression, even as adjusted EBITDA (non-GAAP) increased in dollar terms. Stock-based compensation (GAAP) totaled $128.9 million, remaining a significant expense on the income statement. The quarter also included $261 million worth of share repurchases, part of an ongoing buyback program that supports shareholder returns and helps offset dilution from stock-based pay. At Q1 2025 quarter’s end, the company reported $1.7 billion in combined cash and short-term investments, no debt, and accounts receivable (GAAP) of $3.25 billion, reflecting solid financial standing.

Looking Ahead: Management Outlook and Investor Considerations

For Q3 2025, management guided to at least $717 million in revenue and adjusted EBITDA of around $277 million (non-GAAP). No formal forecast was offered for GAAP earnings per share, due to volatility in share price and stock-based compensation.

Investors should watch several areas going forward. Management cited persistent macroeconomic uncertainty, especially for brands and agencies navigating volatile ad budgets. The company will also keep investing in AI and product capabilities, such as Kokai, retail partnerships, CTV growth, and new transparency tools. No dividend is currently paid by The Trade Desk (TTD -38.66%).

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.