By Karsten Weide, Chief Analyst
Executive Summary
The Trade Desk reported its third-quarter 2025 earnings on Wednesday, November 6, delivering revenue growth of 18% year-over-year to $739 million, comfortably above Wall Street expectations. Adjusted EBITDA climbed 23% to $317 million, maintaining a healthy 43% margin, while net income rose to $116 million. The company once again posted customer retention above 95%, marking its 11th consecutive year at that level. These results reaffirmed The Trade Desk’s resilience amid softening macroeconomic conditions and fierce competition from AppLovin, Google, and Amazon Ads. Yet, with guidance signaling a slowdown heading into the final quarter of the year, investors are asking whether The Trade Desk can sustain its high-growth narrative. The company’s answer lies in its innovation engine: AI-powered optimization through Kokai, privacy-safe identity via UID2, and expansion across connected TV (CTV) and retail media.
Revenue Numbers
The Trade Desk’s $739 million in third-quarter revenue represented 18% year-over-year growth, surpassing analyst expectations by roughly $20 million. While impressive, the company now has had two quarters in which growth was slower than before – 18% in Q3 and 19% in Q2 versus the average of 25% y-o-y growth it enjoyed over the ten quarters before.
CEO Jeff Green maintains that The Trade Desk does not compete with Amazon in CTV. However, these latest numbers suggest that Amazon’s massive entry into the CTV segment may have caused a slowdown in the speed of growth of this segment for The Trade Desk (see chart below). This is difficult to determine, as the company does not break out revenue by product segment and instead offers only approximate product share figures for each. Furthermore, the regional numbers, showing slight share loss for the U.S., also indicate this might be a U.S.-specific issue (see chart in Revenue By Segment section below).
Rival AppLovin, by contrast, reported 68% revenue growth for the same quarter, and generated close to twice the amount of revenue, extending its lead in scale and momentum within the DSP category. AppLovin’s outsized performance has intensified comparisons between the two companies, with some investors wondering whether The Trade Desk can keep pace with AppLovin and its AXON 2.0 AI platform.
Revenue by Product Segment
The Trade Desk’s product mix continues to evolve, driven by strong gains in CTV and retail media. CTV now accounts for roughly 50% of spend on the platform, a modest increase from the “high-40s” share reported previously. Retail media, fueled by partnerships like Koddi and Gopuff, is emerging as a second growth pillar alongside CTV. Together, CTV and commerce-related formats are reshaping the company’s revenue base away from traditional display and mobile advertising.
This mix shift reflects both industry trends and The Trade Desk’s deliberate pivot toward high-value, data-rich channels. As linear TV dollars migrate toward programmatic streaming, CTV’s margins and scale have strengthened The Trade Desk’s profitability. Kokai – the AI layer orchestrating campaign optimization – has accelerated that shift by prioritizing cross-screen reach and measurable outcomes, as well as improving outcomes for advertisers. In comparison, AppLovin’s mix remains far more mobile-heavy, relying on its gaming heritage and in-app inventory dominance (which of course is also a weakness). Where AppLovin monetizes a limited part of advertising, The Trade Desk continues to define the open-internet model: transparent, multi-channel, and privacy-forward.
Revenue by Geography
The Trade Desk’s geographic footprint remains heavily North America-centric. Approximately 88% of revenue still originates from the U.S. and Canada, with international markets contributing just 12% – a ratio largely unchanged over the past five years. This regional imbalance continues to be a structural limitation. While The Trade Desk has launched new partnerships in MENA with OSN and in Europe with DAZN, the absence of material international expansion raises questions about how global its opportunity set really is. But perhaps management feels it is more important to get the U.S. right rather than being distracted by chasing international business.
AppLovin, by comparison, has rapidly diversified abroad, deriving over 40% of its revenue from international markets. For The Trade Desk, global expansion will likely remain gradual until key initiatives – like UID2 and OpenPath – achieve greater adoption among non-U.S. publishers and broadcasters. For now, the company’s focus remains consolidating its leadership in the U.S. open-web market, where its independence from walled gardens continues to attract advertisers seeking neutrality and transparency.
Operating Income And EBItdA Numbers
Despite slowing revenue growth, The Trade Desk’s profitability remains rock solid. Operating income for the quarter reached $161 million, up 49% from a year earlier, representing a net income margin of 22% compared with 17% in Q3 2024. On a non-GAAP basis, adjusted EBITDA rose to $317 million, growing by 23% and yielding a 43% margin – coming in right around where it has been for the past almost five years. (EBITDstrips out expenses that are not part of a company’s core business operations – such as taxes, depreciation and one-off expenses. It is supposed to give a better idea of a company’s core performance.) The improvement highlights the leverage in The Trade Desk’s business model: incremental revenue flows disproportionately to profit due to low incremental costs and automation efficiencies under Kokai.
Relative to peers, The Trade Desk remains a margin leader – once again, with the exception of AppLovin, which posted an adjusted EBITDA margin of around 82% in Q2 2025. The Trade Desk’s SaaS-like scalability and disciplined cost structure allow it to outperform most independent AdTech firms on profitability despite ongoing R&D investments in AI and retail media integrations.
Performance vs. Guidance and Expectations
Heading into the quarter, The Trade Desk had guided for revenue of at least $717 million and adjusted EBITDA of around $277 million. The company exceeded both targets by comfortable margins, reflecting continued resilience in advertiser demand, precise execution, and early benefits from its new product features. Analysts had expected revenue of roughly $720 million, so the actual result represented a modest beat. Profitability likewise came in above consensus, reinforcing confidence in the company’s cost discipline.
However, management’s guidance for Q4 – revenue of at least $840 million and adjusted EBITDA of about $375 million – signaled a growth expectation of (at least) just 13%, down from the company’s historical 25% average. The question is whether executives are simply being cautious – or if they believe slower growth has become the new normal. Perhaps it is a little bit of both. Whatever the causes may be, the lower forecast contributed to cautious investor sentiment and a muted stock reaction.
Stock Price
Despite solid operational performance, The Trade Desk’s stock price fell roughly 6% in trading the day after the earnings release, continuing a volatile pattern seen throughout 2025. The decline likely reflected concerns over the company’s slowing top-line growth rather than any deterioration in fundamentals. Perhaps investors are still digesting the narrative shift from “perpetual high growth” to “profitable maturation.” Also keep in mind that many tech companies had to endure stock price losses of 20%-30% this earnings season.
AppLovin’s stock, meanwhile, despite a brief set-back after earnings, stayed basically flat. It was buoyed by its faster growth rate and its AI-driven monetization engine.
Cash Reserve
As of September 30, The Trade Desk reported $1.9 billion in cash and equivalents and no long-term debt, underscoring its financial strength. The company also repurchased $310 million in stock during the quarter and authorized an additional $500 million buyback program. With operating cash flow of $225 million this quarter and $681 million year-to-date, The Trade Desk remains well-positioned to fund continued innovation and selective acquisitions. Its cash cushion gives it flexibility to invest in global expansion, retail media integrations, and new platform initiatives like OpenAds, PubDesk and the Ventura smart TV operating system.
Looking Ahead
The quarter’s most meaningful announcements revolved around a slew of product news. The Trade Desk launched OpenAds (not to be confused with OpenPath, its SPO product), which is an open-source auction protocol. This launch was accompanied by the announcement of PubDesk, a publisher platform that lets media owners manage inventory, pricing, and data access directly through the company’s programmatic ecosystem. It also unveiled Audience Unlimited, a privacy-compliant data marketplace expanding audience reach. The company also debuted a dedicated pharma marketplace, integrated with IQVIA and Swoop, and deepened retail media capabilities via its Koddi partnership. These launches signal a broader repositioning: The Trade Desk isn’t just a DSP – it’s becoming the backbone of a transparent, data-rich, and AI-optimized end-to-end advertising operating system. The branching-out into the pharmaceutical vertical is especially encouraging, since tackling highly regulated verticals, though tough to master, is lucrative and defensible.
Among its strengths, The Trade Desk boasts a durable business model rooted in customer loyalty, driving outcomes for them and maintaining high margins. Its ability to maintain 95%+ customer retention over 11 years is nearly unmatched in AdTech. Its Kokai platform continues to integrate AI and automation in ways that boost advertiser efficiency and drive incremental spend. Nearly 85% of TTD clients now use Kokai as their default experience.
Its weaknesses lie primarily in concentration: geographic dependence on North America, limited exposure to app-based ecosystems, and slower-than-expected adoption of UID2. Competitors like Amazon leverage vast first-party datasets and closed ecosystems, giving them advantages in targeting precision that The Trade Desk must counter through scale and interoperability.
Its opportunities are significant. CTV remains the fastest-growing segment in digital advertising, projected to exceed $40 billion globally by 2026. The company’s move into retail media opens a new multi-billion-dollar channel. Its leadership in privacy and identity positions it to benefit from creeping cookie deprecation, while new initiatives like OpenAds and PubDesk can cement its status as the “open internet’s DSP.”
The threats are equally real. AppLovin’s momentum, Amazon’s aggressive DSP improvements, and Google’s continued dominance in performance advertising all challenge The Trade Desk’s growth narrative. Broader macroeconomic softness, particularly in CPG and automotive sectors, rock-bottom consumer confidence and a likely recession in 2026 could weigh on ad budgets next year. Meanwhile, the rise of AI-driven search and commerce assistants risks diverting ad spend away from the open web, indirectly pressuring The Trade Desk’s addressable market.
In sum, The Trade Desk’s third-quarter 2025 results highlight a company in transition – from rapid expansion to strategic consolidation. Growth has slowed, but profitability and innovation remain formidable. The firm’s bet on AI, identity, and transparency keeps it central to the evolving digital advertising ecosystem. Whether that’s enough to reignite investor enthusiasm will depend on how convincingly it can convert innovation into renewed top-line acceleration.
About The Trade Desk
The Trade Desk (NASDAQ: TTD) is a global technology company that empowers advertisers to purchase digital advertising campaigns across various channels, including connected TV, display, mobile, audio, and digital out-of-home. Known for its commitment to transparency and data-driven marketing, the company helps brands reach audiences effectively across the open internet. Learn more at www.thetradedesk.com.
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