The Trade Desk beats forecasts with $739 million despite Amazon competition

The Trade Desk reported $739 million in third quarter revenue on November 6, 2025, surpassing analyst expectations by $19.45 million despite CEO Jeff Green's emphatic dismissal of Amazon as a direct competitor in the open internet advertising market.

The demand-side platform's 18% year-over-year growth, or 22% excluding political advertising spend from the prior year, demonstrated continued market share gains across connected television and programmatic channels. Earnings per share reached $0.45, marking a 125% surprise over the $0.20 forecast. However, shares declined 3.77% in aftermarket trading to $47.71, contrasting sharply with the robust financial performance and optimistic fourth quarter guidance.

Green addressed competitive dynamics during the earnings call, characterizing Amazon's advertising business as fundamentally different from The Trade Desk's open internet focus. "This year, they will do, if we are just using very round numbers and back-of-the-napkin math, about $70 billion-ish in advertising," Green stated. "From all of our market triangulation, there is about 90% that is in sponsored listings at least. In fact, it is probably more like 95% plus."

The CEO positioned Amazon's advertising revenue streams as primarily competing with Google Search through sponsored listings and with streaming platforms through Prime Video, rather than operating in The Trade Desk's decision-based, data-driven buying space across the open internet. "97%, 98%, 99% of advertising efforts are about monetizing owned and operated inventory, and what is left goes to the open internet," Green explained. "The reality is we're playing in a very different sandbox."

Connected television maintained its position as The Trade Desk's fastest-growing channel during the quarter. Video advertising, including CTV, represented approximately 50% of the company's total business. This concentration reflects the ongoing shift from traditional linear television to streaming platforms, where The Trade Desk provides programmatic buying technology for advertisers seeking premium inventory across multiple networks and services.

The company generated $317 million in adjusted EBITDA during the third quarter, representing a 43% margin. Net income reached $115.5 million, or $0.23 per diluted share on a GAAP basis. Operating cash flow totaled $225 million, while free cash flow reached $155 million. These profitability metrics demonstrate The Trade Desk's ability to maintain strong margins while investing in platform development and organizational restructuring.

Platform innovations dominated management's strategic commentary during the earnings call. The Kokai platform, launched in 2023 and representing the company's most significant technological upgrade, now handles activity from nearly 85% of clients. Green described Kokai as delivering "26% better cost per acquisition, 58% better cost per unique reach, and a 94% better click-through rate compared to Solamar" based on campaigns that switched to the upgraded system.

The Trade Desk introduced multiple supply chain optimization products during 2025 designed to increase transparency and reduce inefficiencies in programmatic advertising. OpenPath, which provides direct connections between The Trade Desk and inventory sources, "has grown by many hundreds of percentage points this year," according to Green. Publishers implementing OpenPath reported substantial performance improvements, with Hearst Newspapers achieving a 4x improvement in fill rates and 23% revenue increase.

OpenAds represents another significant initiative announced during the third quarter. The open-source auction platform launched in October 2025, addressing what Green characterized as deteriorating auction integrity among some supply-side platforms. The company announced more than 20 publishers have committed to integrating the auction system, which includes transaction ID and verification signatures designed to reduce duplication and detect obfuscation.

Deal Desk, currently in beta testing, applies artificial intelligence to predict deal performance relative to open market opportunities. The platform shows deals running on Deal Desk performing approximately 35% better than those on the legacy Solamar system, according to company data. This product aims to transform how advertisers and publishers manage strategic partnerships while potentially replacing outdated upfront buying models with more flexible forward markets.

New Chief Financial Officer Alex Cailliau, who joined The Trade Desk in August 2025 from Hermes Growth Partners where he previously invested in the company, outlined priorities during his first quarterly earnings call. "My priorities as CFO are clear: help grow The Trade Desk's share of the $1 trillion advertising TAM as more dollars shift to programmatic, identify and prioritize the right investments to expand our leadership position," Cailliau stated.

The CFO emphasized The Trade Desk's positioning within major industry shifts. "The Trade Desk sits squarely at the forefront of CTV transformation, a powerful application of AI, the expansion of retail media, and the proliferation of programmatic buying internationally," Cailliau noted. He highlighted international growth rates exceeding North America performance, with the company's business outside the United States representing 13% of total revenue during the quarter.

Anders Mortensen joined as Chief Revenue Officer, starting during the week of the earnings announcement. Mortensen previously led Google's mid-market advertising business, overseeing more than 5,000 advertisers and their agencies while achieving growth rates significantly exceeding broader market expansion. "Anders will help us continue to grow within our established client base, and he will also help us expand to a broader range of advertisers and agencies around the world," Green stated.

The executive additions represent the culmination of organizational changes initiated in early 2025. Following the company's first earnings miss in 33 consecutive quarters during February 2025, The Trade Desk implemented its largest reorganization in company history. The restructuring included appointing Vivek Kundra as Chief Operating Officer in March 2025, streamlining client-facing teams, and reorganizing engineering operations into 100 scrum teams.

Under Kundra's leadership, The Trade Desk implemented more rigorous account planning processes, particularly for large global clients operating across multiple agencies and markets. "We've introduced stronger structure and cadence across the company, and this includes how we run the business day-to-day, how we go to market, and how we align the teams and become more rigorous," Green explained. The company now maintains more than 180 active joint business plans with major clients, with an additional 80 JBPs in the pipeline representing billions of dollars in potential spend.

Joint business plans have become a critical growth driver for The Trade Desk, with JBP accounts growing significantly faster than non-JBP accounts. These strategic partnerships involve deeper integration between The Trade Desk, advertisers, and agencies, providing more predictable revenue streams while strengthening competitive moats. "Today, joint business plans now make up about half the business," Green stated during the earnings call.

Customer retention remained above 95% during the third quarter, maintaining a streak the company has sustained for 11 consecutive years. This metric demonstrates client satisfaction despite the platform transition to Kokai and the organizational restructuring implemented throughout 2025. The company expects complete client migration to Kokai by the end of 2025, representing a significant milestone in the platform's evolution.

The competitive landscape discussion extended beyond Amazon to address Google's positioning within programmatic advertising. Green referenced data from Google's antitrust trial, noting that between 2019 and 2024, "roughly all of the incremental dollars and growth from DV360 has gone to YouTube. YouTube spend increased by about 800% while Google's buying of the open internet stayed essentially flat for the same period of time."

This shift in Google's advertising focus, according to Green, creates opportunities for The Trade Desk to capture market share in open internet buying. "The Trade Desk seems to have surpassed Google in the amount bought on the open internet, again, according to others," Green stated, citing industry experts who analyzed the antitrust trial exhibits. The CEO expects Google to continue prioritizing owned and operated properties including YouTube, Search, and Gemini rather than expanding open internet monetization.

Artificial intelligence integration represents a foundational element of The Trade Desk's competitive strategy. The company describes its AI architecture as "distributed AI," where separate models handle distinct functions including impression valuation, identity management, supply path selection, clearing price prediction, and campaign performance forecasting. "It cannot be overstated how much AI has changed and will change our business and the open internet," Green emphasized.

The distributed AI approach enables parallel processing across multiple specialized models while maintaining checks and balances between different functions. This architecture differs from consolidated AI systems, allowing The Trade Desk to optimize specific aspects of the advertising workflow independently while maintaining overall campaign coherence. The company positions this technical infrastructure as providing competitive advantages in campaign performance and advertiser outcomes.

Geographic performance showed North America representing 87% of business during the third quarter, with international markets accounting for 13%. Growth rates outside the United States exceeded domestic expansion, reflecting The Trade Desk's strategic investments in European and Asia-Pacific regions over recent years. "Given that 60% of the TAM is outside of the U.S., this movement is in the right direction of capturing the TAM," Green noted.

Vertical performance demonstrated particular strength in medical health, automotive, and technology sectors among categories representing at least 1% of business. The company has focused on diversifying its advertiser base across additional verticals, winning major clients in insurance, financial services, and telecommunications. This diversification strategy reduces dependence on any single industry while expanding The Trade Desk's addressable market across different economic sectors.

Audio advertising emerged as another high-growth channel, with consumers spending an average of three hours daily listening to music and podcasts. The Trade Desk highlighted Bayer's Spotify integration, which generated 15% growth in incremental reach for omnichannel campaigns on Kokai. The audio channel benefits from authenticated audience data and premium content environments, aligning with The Trade Desk's emphasis on quality inventory and precise targeting capabilities.

Retail media networks represent another expansion area for The Trade Desk, with the company seeing "strong adoption across verticals as more shopper marketing budgets flow into programmatic and more retailers turn to us as their trusted partners," according to Green. The integration of retail data with advertising campaigns enables more sophisticated targeting and measurement, particularly for consumer packaged goods brands seeking to connect advertising exposure with purchase behavior.

The fourth quarter outlook projects revenue of at least $840 million with adjusted EBITDA of approximately $375 million. Excluding political advertising spend from the fourth quarter of 2024, the guidance implies approximately 18.5% year-over-year growth. This forecast reflects continued momentum across connected television, retail media, and international markets despite broader economic uncertainties affecting advertising budgets.

Share repurchases consumed $310 million during the third quarter through the company's buyback program. As of September 30, 2025, The Trade Desk held $60 million in remaining authorization under the program. In October 2025, the company deployed the remaining authorization and received board approval for an additional $500 million repurchase program. Since initiating buyback activity in 2023, The Trade Desk has repurchased nearly $2 billion of Class A common stock, effectively offsetting dilution and reducing shares outstanding.

The company's balance sheet reflected $1.4 billion in cash, cash equivalents, and short-term investments at quarter end, with no debt. This financial flexibility supports continued investment in platform development, potential acquisitions, and opportunistic share repurchases. Days sales outstanding reached 92 days, up three days from the prior year, while days payable outstanding increased three days to 77 days.

Operating expenses excluding stock-based compensation totaled $457 million during the third quarter, up 17% year-over-year. The company continued investing in platform operations, sales and marketing, technology development, and general administration to support growth initiatives and organizational scaling. Stock-based compensation expense reached $121.3 million during the quarter, including $14 million related to the CEO's long-term performance grant.

Mobile advertising represented approximately 30% of The Trade Desk's business during the quarter, while display accounted for a low double-digit share and audio represented around 5%. Over time, management expects CTV and audio to grow as percentages of the channel mix, reflecting the premium authenticated nature of these formats. This shift aligns with advertiser preferences for inventory where audience verification and measurement capabilities exceed traditional display environments.

Supply path optimization through AI-driven analysis has identified efficiency improvements in the double-digit percentage range, according to Green. These optimizations help advertisers reduce unnecessary technology fees and latency while improving match rates between supply-side platforms and publisher connections. The Trade Desk positions these supply chain improvements as benefiting the entire programmatic ecosystem rather than exclusively serving its own interests.

PubDesk, a new product providing publishers with automated insights about advertiser demand, shows which signals The Trade Desk values and suggests improvements for revenue optimization. SSPs including PubMatic have begun integrating with Deal Desk using price discovery provisioning APIs, enabling sellers to better understand how they can increase inventory quality and attract higher bids from advertisers.

The company introduced trading modes during the fourth quarter, enabling users to select between control-oriented and performance-optimized approaches to campaign management. This feature resembles driving modes in automobiles, where users decide between hands-on control with greater complexity or automated optimization with reduced operational burden. Both modes incorporate agentic AI as a co-pilot, with the AI's role varying based on the selected trading mode.

Audience Unlimited, announced during the fourth quarter, enables advertisers to use third-party data for a single fee rather than paying separately for each data segment. This pricing model simplifies budgeting while encouraging broader data utilization to improve campaign targeting and performance. The product represents a significant shift in how third-party data markets operate within programmatic advertising platforms.

The Trade Desk's emphasis on objectivity and independence represents a core competitive positioning element. "The open internet offers compelling value in contrast to walled gardens," Green stated. "The open internet is where most consumers spend most of their time. It is where they engage with the internet's most premium content." This positioning differentiates The Trade Desk from competitors operating advertising businesses alongside owned media properties, search engines, or e-commerce platforms.

Green emphasized transparency as fundamental to The Trade Desk's value proposition. "We know that transparency, objectivity, and innovation drive performance for us," he stated. "More than that, we know they are essential for our clients." This emphasis on buy-side representation without conflicts from media ownership or walled garden monetization priorities forms the basis for The Trade Desk's market positioning against technology giants including Google, Amazon, Meta, and Apple.

The broader macroeconomic environment presented mixed signals for advertising demand. Some large brands, particularly in consumer packaged goods and retail categories, face pressure from tariffs, inflation, and conservative spending approaches. "At a macro level, I describe the environment as a tale of two cities," Green noted. However, forward-thinking brands in financial services, healthcare, insurance, and portions of food and beverage and automotive sectors are "leaning in to data-driven marketing and embracing measurement and increasingly turning to us to deliver real business outcomes."

Scrutiny of walled garden platforms has intensified as chief marketing officers face increased pressure from chief financial officers to demonstrate return on investment. "Many are asking tougher questions, not just about reach or impressions, but whether the metrics they're being given actually map to business results," Green explained. This dynamic benefits The Trade Desk's positioning as an independent platform providing objective measurement and transparent reporting.

The structural shift toward buyer's market conditions in digital advertising strengthens The Trade Desk's competitive position. "There is more of a buyer's market at this moment than we've ever seen before," Green stated. Publishers and content owners increasingly rely on independent partners to win third-party demand, with The Trade Desk representing the single largest source of external demand for most premium publishers globally.

Looking toward 2026, management expressed confidence in continued market share gains despite pockets of softness in specific advertiser categories. "I could not be more excited about the road ahead as we move into 2026, and I look to a world where advertising dollars go to the open internet first and are avoiding systems that are easy and simply grade their own homework," Green stated during the earnings call.

The Trade Desk's third quarter performance occurs within a broader context of programmatic advertising sector evolution. The company joined the S&P 500 index in July 2025, marking the first independent advertising technology company to achieve this status in approximately 20 years. This milestone reflected sustained financial performance and market position within the $1 trillion global advertising market.

Earlier in 2025, shares declined 27% following second quarter results despite the company beating earnings expectations, demonstrating investor sensitivity to growth deceleration and competitive positioning concerns. The pattern repeated during third quarter aftermarket trading, with shares declining despite the earnings beat, suggesting ongoing market skepticism about future growth trajectory despite management's optimistic positioning.

The Trade Desk's technological innovations throughout 2025 included Deal Desk announced in June 2025, OpenAds launched in October 2025, and OpenPath expansion delivering substantial revenue improvements for participating publishers. These supply chain initiatives position The Trade Desk as driving industry standards for transparency and efficiency in programmatic advertising transactions.

The competitive environment continues evolving as Amazon expands its demand-side platform capabilities. Amazon advertising revenue reached $17.7 billion in the third quarter of 2025, growing 22% year-over-year. However, as Green emphasized, the vast majority of this revenue derives from sponsored listings and Prime Video monetization rather than open internet buying through Amazon DSP.

Google's Display & Video 360 platform has undergone significant updates throughout 2025, including metric improvements, targeting template launches, and audience reporting expansions. These enhancements demonstrate Google's continued investment in programmatic capabilities despite Green's assertion that Google prioritizes YouTube and owned properties over open internet monetization.

For marketing professionals managing programmatic advertising campaigns, The Trade Desk's third quarter results underscore the ongoing importance of independent demand-side platforms in achieving objective media buying outcomes. The company's emphasis on transparency, supply chain optimization, and AI-powered performance improvements addresses fundamental challenges facing advertisers seeking accountability and measurable business results from digital advertising investments.

Timeline

• February 2025: The Trade Desk reports first earnings miss in 33 consecutive quarters, implements largest organizational restructuring in company history
• March 2025: Vivek Kundra joins as Chief Operating Officer, leading operational improvements and organizational streamlining initiatives
• June 2025: The Trade Desk launches Deal Desk for managing advertising deals with AI-powered performance prediction
• July 2025: The Trade Desk joins S&P 500 index, becoming first independent ad tech company in index in 20 years
• August 2025: The Trade Desk reports Q2 results, announces Alex Cailliau as Chief Financial Officer, shares decline 27%despite earnings beat
• October 2025: The Trade Desk launches OpenAds auction platform to counter supply chain manipulation
• November 6, 2025: The Trade Desk reports Q3 revenue of $739 million, beating analyst expectations, announces Anders Mortensen as Chief Revenue Officer, shares decline 3.77% in aftermarket trading

Summary

Who: The Trade Desk Inc., a demand-side platform for programmatic advertising, reported third quarter financial results. CEO Jeff Green and CFO Alex Cailliau led the earnings announcement. Anders Mortensen joined as Chief Revenue Officer during the week of the announcement.

What: The company reported $739 million in revenue, representing 18% year-over-year growth or 22% excluding political spend. Earnings per share reached $0.45, exceeding the $0.20 forecast by 125%. The company generated $317 million in adjusted EBITDA with a 43% margin. Management emphasized platform innovations including Kokai adoption reaching 85% of clients, OpenPath growth of hundreds of percentage points, and new products including OpenAds, Deal Desk, and Audience Unlimited.

When: The Trade Desk announced third quarter 2025 financial results on November 6, 2025, covering the period ending September 30, 2025. The earnings call occurred during the afternoon of November 6. Fourth quarter guidance projects revenue of at least $840 million with adjusted EBITDA of approximately $375 million.

Where: The Trade Desk operates globally from its Ventura, California headquarters, with offices across North America, Europe, and Asia-Pacific. North America represented 87% of third quarter business, while international markets accounted for 13%. The company's platform provides access to advertising inventory across connected television, display, mobile, audio, and video channels on the open internet.

Why: The results matter for the marketing community because they demonstrate continued programmatic advertising growth despite economic uncertainties and competitive pressures from Amazon and Google. CEO Green's dismissal of Amazon as a direct competitor, arguing Amazon primarily monetizes owned and operated inventory rather than competing for open internet buying, clarifies competitive dynamics for advertisers evaluating demand-side platform options. The company's emphasis on transparency, objectivity, and supply chain optimization through products like OpenPath, OpenAds, and Deal Desk addresses fundamental industry challenges around programmatic advertising efficiency and accountability.