The Trade Desk reported their first quarter of 2025 earnings on Thursday, May 8. After a rocky end to 2024, the programmatic ad tech leader has regained its footing, posting strong topline growth, surpassing expectations, and hinting at renewed momentum in the arms race for the open internet. But beneath the surface, The Trade Desk also faces mounting challenges that could shape the company’s next chapter.
Business Highlights: A Bounce-Back Quarter
The Trade Desk’s Q1 2025 report marked a return to form after the prior quarter’s mixed results. Revenue rose 25% year-over-year to $616 million, up from $491 million in Q1 2024. Net income jumped from $29 million to $54 million, and adjusted EBITDA climbed to $208 million, with a healthy 34% margin. The company pointed to early signs that its Q4 platform overhaul, particularly the roll-out of Kokai, was beginning to bear fruit.
Jeff Green, founder and CEO, struck an optimistic tone on the earnings call, arguing that The Trade Desk’s long-term bet on the open internet is now being vindicated by regulatory shifts and growing marketer demand for transparency. In the face of macroeconomic headwinds, Green emphasized that The Trade Desk continues to grab market share – a sign of its strategic resilience in uncertain times.
Revenue Numbers: Above Trend, Ahead of the Pack
The Trade Desk’s $616 million in quarterly revenue represents a 25% increase over the same quarter a year ago, continuing a pattern of strong double-digit annual growth. This result beat the company’s own guidance and outpaced the overall demand-side platform (DSP) segment, where growth has been slower amid industry consolidation and shifting budgets.
Revenue by Product Segment: Video Takes the Lead
The Trade Desk doesn’t break out revenue by product line in detail, but CFO Laura Schenkein reiterated that video – especially connected TV – remains the company’s largest and fastest-growing revenue contributor, accounting for a “high-40s” percentage of total revenue. Mobile came in at the mid-30% range, followed by display in the low double digits and audio around 5%.
This product mix has been steadily, if slowly, shifting toward CTV over the past few years, with CTV growing from 38% of revenue in early 2021 to nearly 48% today. That trend is expected to continue as advertisers reallocate budgets from linear TV to streaming environments.
Revenue by Geography: Still U.S.-Centric
The Trade Desk continues to generate the vast majority of its revenue from North America – about 88% in the first quarter of 2025. International markets, including Europe and Asia, account for the remaining 12%. Even though Schenkein pointed out that “International growth again outpaced North America for the ninth quarter in a row”, its share of the overall business has barely moved in the last five years, reflecting slow progress on global expansion.
Executives have suggested this geographic focus is intentional: capturing U.S. market share during a period of transformation is seen as more urgent than spreading resources thin globally. In the long run, The Trade Desk’s U.S. concentration may limit growth unless international expansion accelerates, a dire need considering the storm clouds gathering on the horizon for independent vendors.
Operating Income: Profitability with Discipline
The Trade Desk posted operating income of $54 million for Q1, translating to an 9% GAAP net income margin – up from 6% a year ago. Adjusted EBITDA was $208 million, representing a 34% margin, underscoring strong underlying profitability even amid ongoing investment in platform upgrades and go-to-market operations. These margins remain impressive in an ad tech sector where many independent players struggle to break even. The company’s profitability also provides a buffer to weather macroeconomic shocks or fund strategic bets without jeopardizing its financial footing.
Performance vs. Guidance and Expectations: A Clean Beat
The company’s first-quarter performance exceeded both internal guidance and Wall Street expectations. Analysts had expected revenue of around $605 million, but the final result came in at $616 million. Adjusted EBITDA also beat expectations, landing at $208 million compared to consensus estimates around $195–200 million.
Non-GAAP EPS of $0.33 likewise came in ahead of the expected $0.30. After a rare miss in Q4 2024, The Trade Desk was clearly under pressure to reassure investors – and succeeded in doing so.
Stock Price: A Relief Rally
Investors rewarded The Trade Desk with a sharp stock rally following the earnings report. Shares rose more than 18% in the day after earnings, reflecting both relief over the rebound from Q4 and optimism about the company’s long-term positioning. While the stock remains well below its December 2024 peak – still down 49% from that high – this earnings report helped restore investor confidence.
By contrast, AppLovin shares have soared over the past year thanks to explosive performance ad revenue and cost discipline. The Trade Desk’s stock still trades at a premium multiple relative to peers, but the Q1 results may reestablish its narrative as a durable, growth-oriented platform.
Cash Reserve: Flexibility Intact
As of March 31, The Trade Desk reported $1.12 billion in cash and $622 million in short-term investments, for a total of roughly $1.74 billion in liquid assets. While this total is down slightly from year-end levels due to $386 million in stock repurchases during the quarter, it still leaves the company in a strong position to fund R&D, pursue strategic acquisitions, or make infrastructure investments.
Notably, the company completed its acquisition of Sincera in Q1, a move aimed at boosting transparency and supply path optimization – two of The Trade Desk’s major talking points. The acquisition did not come with incremental revenue but reflects a continued appetite for strategic capability building.
Looking Ahead: Headwinds And Opportunities
Coming back to the storm clouds gathering over the independent AdTech ecosystem, The Trade Desk’s challenges remain significant. Google, Amazon, and Meta are tightening their grip on media buying through their proprietary DSPs, steadily growing market share at the expense of the open internet. Many buyers are drawn to these walled gardens by the promise of unified platforms that offer richer signals, reduced fraud, and greater brand safety.
Longer term, generative AI search poses a potentially major threat. Early signs suggest that ten traditional search queries may be replaced by a single generative AI query – many of which will be zero-click, driving no traffic to publishers. While it’s too early to predict average traffic losses, early publisher reports cite declines ranging from 40% to 85%. These initial figures may not reflect the eventual reality, but any sustained traffic loss to publishers will inevitably undermine the business models of independent AdTech vendors.
To its credit, The Trade Desk is taking steps on several fronts to address these headwinds. First, it has made significant progress in expanding adoption of Kokai, its AI-driven campaign management platform which significantly improves campaign performance. Although initial feedback flagged Kokai’s unconventional user experience and missing features, recent updates have improved both usability and feature set. CEO Jeff Green now reports that more than two-thirds of clients have adopted Kokai, a shift that is driving stronger client retention and may help attract new advertisers.
Second, the company has deepened its OpenPath publisher integrations, adding Warner Bros. Discovery, The Guardian, and the New York Post. These partnerships further reduce The Trade Desk’s reliance on supply-side platforms. But SSPs have responded by going direct to buyers themselves – escalating competition in what is increasingly a zero-sum game.
Third, while Unified ID 2.0 continues to gain adoption and promises more authenticated traffic for better targeting, it remains unclear whether it has achieved sufficient scale to materially improve performance. If not, the timeline for meaningful impact is still unknown.
Fourth, The Trade Desk has begun selling directly to brands, a move that may lift revenue but risks straining its relationships with agencies—historically its core customer base.
Fifth, the company’s Ventura smart TV operating system, which aims to secure access to CTV inventory, faces steep adoption hurdles. Despite early endorsements from Disney and Paramount, Ventura went unmentioned on the Q1 earnings call—an omission that raises questions about the initiative’s momentum.
One potential tailwind could come from the DOJ’s antitrust case against Google. If regulators ultimately force Google to divest Google Ad Manager – including AdX and its publisher ad server – it would mark a historic victory for the open internet and create new opportunities for The Trade Desk to expand its role.
Despite these challenges, The Trade Desk’s strengths remain formidable: a dominant position in CTV, high customer retention, and a disciplined focus on balancing innovation with profitability. If it can sustain Kokai’s momentum and accelerate international growth, the company has a credible path to long-term leadership in programmatic advertising.
Conclusion: Strength Renewed, But Not Without Risks
The Trade Desk’s first-quarter 2025 results show a company rebounding with confidence. After a painful Q4 stumble, it is once again beating expectations, outperforming competitors, and reasserting its vision for a more open, data-driven internet. Yet the future is far from assured. Walled gardens are consolidating power, regulatory shifts loom, and execution risk remains high.
The Trade Desk is regaining altitude. If it can translate today’s momentum into durable product leadership and market share gains, the best may still lie ahead.
About The Trade Desk
The Trade Desk is a global advertising technology company that empowers media buyers to plan, execute, and measure campaigns across channels including CTV, display, mobile, and audio. For more information, visit www.thetradedesk.com.
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