Trade Desk reports strong Q2 growth as new CFO steps in

The Trade Desk Inc. reported second quarter revenue of $694 million on August 7, 2025, representing 19% year-over-year growth while simultaneously announcing the appointment of Alex Kayyal as Chief Financial Officer effective August 21.

The financial results, announced on the same day as the CFO transition, highlight both the company's continued expansion in the digital advertising sector and significant leadership changes. CEO Jeff Green described the quarter as "strong" while outlining the platform's technological advances through the Kokai system integration.

According to the earnings announcement, second quarter net income reached $90 million, with adjusted EBITDA of $271 million representing a 39% margin. The company maintained customer retention above 95% for the 11th consecutive year, demonstrating sustained client satisfaction despite broader industry pressures.

Leadership transition signals strategic focus

Kayyal brings extensive experience from Salesforce, where he served nearly a decade in various executive roles including Senior Vice President and Managing Partner of Salesforce Ventures. Most recently, he worked as Partner at Lightspeed Venture Partners leading the firm's application software practice.

Laura Schenkein, who served as CFO for more than a decade across various finance leadership positions, will transition from the role. Schenkein will remain with the company as a non-executive officer through year-end to support the transition.

"We would not be where we are today without those vital contributions and we know she will be cheering our success in the years ahead," Green stated regarding Schenkein's departure.

The appointment reflects The Trade Desk's focus on scaling operations as it pursues larger enterprise opportunities. Kayyal previously helped establish Hermes Growth Partners where he led the firm's investment in The Trade Desk, providing longstanding familiarity with the company's business model.

Technical developments drive platform adoption

The company emphasized progress across its Kokai platform during the quarter, integrating artificial intelligence capabilities to enhance advertiser decision-making. Green highlighted how "Kokai is helping advertisers drive better results by integrating more data into every decision, using AI as a co-pilot."

Connected television remains the company's largest and fastest-growing channel segment. The platform now reaches more than 90 million households and 120 million CTV devices, positioning The Trade Desk to capitalize on continued streaming adoption.

Third quarter outlook projects revenue of at least $717 million with adjusted EBITDA of approximately $277 million. The guidance reflects continued growth momentum despite industry-wide pressures affecting digital advertising platforms.

Stock performance reflects guidance concerns

Despite beating earnings expectations with $0.41 per share versus analyst estimates of $0.34, The Trade Desk's stock price declined significantly in after-hours trading on August 7. Shares fell 27% to $64.17 after closing at $88.36, wiping out nearly $6 billion in market capitalization.

The dramatic selloff occurred despite the company reporting revenue that exceeded both analyst expectations and its own guidance. Several factors likely contributed to the negative market reaction, reflecting investor concerns about future growth trajectory and competitive positioning.

Growth deceleration represents a primary concern for investors. While 19% year-over-year revenue growth remains solid, it marks a continued slowdown from the company's historical growth rates above 25%. This deceleration follows the company's first earnings miss in February 2025, which triggered a major organizational restructuring.

Third quarter revenue guidance of $717 million, while representing continued growth, may have disappointed investors expecting stronger momentum following the platform transition to Kokai. Market expectations had potentially anticipated higher guidance given the company's recent operational improvements and partnership expansions.

Broader industry headwinds also influence investor sentiment toward advertising technology stocks. Digital advertising platforms face increasing scrutiny over privacy regulations, measurement accuracy, and competition from major technology companies. These sector-wide pressures create additional uncertainty about long-term growth sustainability.

The leadership transition timing coincides with this challenging period, potentially amplifying investor concerns about operational continuity during the CFO changeover. While Kayyal brings relevant experience, any executive transition introduces uncertainty about strategic direction and execution capabilities.

Partnership expansion and technology integration

Notable business developments during the quarter included expanding partnerships across retail media and supply chain optimization. OpenPath adoption increased among premium publishers, while Unified ID 2.0 implementation progressed across multiple partner integrations.

The company announced new innovations including OpenSincera for advertising performance visibility and Deal Desk for managing digital advertising deal performance. Generative AI partnerships expanded through integrations with Rembrand, Nova, Bunny Studio, and Spaceback.

Strategic data partnerships grew with Instacart, Visa, EDO, NIQ, and Zepto enabling enhanced targeting capabilities and real-time measurement. The company also announced board member Omar Tawakol's appointment, bringing advertising technology and artificial intelligence expertise.

Market position amid industry challenges

The Trade Desk's performance comes as the programmatic advertising sector faces increasing scrutiny over transparency and measurement accuracy. The company positions itself as an independent alternative to advertising solutions offered by major technology companies including Google and Amazon.

Connected TV advertising represents a particular growth opportunity as traditional television consumption shifts toward streaming platforms. The company's focus on this segment aligns with broader industry trends as advertisers seek alternatives to linear TV placements.

Share repurchases during the quarter totaled $261 million, with $375 million available for future repurchases as of June 30. The company maintains focus on return of capital while investing in platform capabilities and market expansion.

International expansion and shopper marketing

International markets represent significant untapped opportunity for The Trade Desk, with approximately 88% of spend currently concentrated in North America despite 60% of global advertising dollars spent outside the region.

The company continues developing shopper marketing capabilities through retail data partnerships. These initiatives leverage first-party commerce data to improve targeting accuracy and campaign effectiveness for consumer packaged goods advertisers.

Technical infrastructure improvements support these expanding capabilities, with the platform processing millions of advertising impressions per second across multiple data integration points.

Financial outlook and industry context

Looking ahead, The Trade Desk faces both opportunities and challenges in the evolving digital advertising landscape. Industry consolidation continues while privacy regulations reshape data collection and targeting practices across major advertising platforms.

The company's emphasis on transparency and independent platform positioning seeks to differentiate from competitors facing antitrust scrutiny. This strategy appears particularly relevant as advertisers seek alternatives to existing walled garden environments.

Third quarter results will provide additional insight into momentum behind the Kokai platform transition and connected TV growth trajectory. The leadership transition timing coincides with this critical period for platform adoption and market share expansion.

Timeline

• August 7, 2025: The Trade Desk reports Q2 2025 revenue of $694 million (19% growth) and announces Alex Kayyal as new CFO
• July 18, 2025: The Trade Desk joins S&P 500 following strong programmatic growth
• June 9, 2025: Trade Desk launches Deal Desk to manage advertising deals
• March 16, 2025: Kokai platform faces challenges amid executive departure
• February 21, 2025: Strategic shift raises questions about agency relationships
• February 14, 2025: First earnings miss in 8 years triggers major reorganization

Summary

Who: The Trade Desk Inc. (NASDAQ: TTD), a programmatic advertising platform, with CEO Jeff Green and incoming CFO Alex Kayyal replacing Laura Schenkein

What: Second quarter 2025 financial results showing $694 million revenue (19% year-over-year growth) and announcement of new Chief Financial Officer appointment

When: Results announced August 7, 2025, for quarter ended June 30, 2025, with CFO transition effective August 21, 2025

Where: Headquartered in Ventura, California, with global operations across North America, Europe, and Asia Pacific markets

Why: Revenue growth reflects continued adoption of programmatic advertising and connected TV expansion, while leadership transition aims to drive sustained growth and scale for the company's next phase of development

Key Terms Explained

Programmatic Advertising: An automated method of buying and selling digital advertising inventory in real-time through algorithmic bidding. The Trade Desk operates as a demand-side platform (DSP) that enables advertisers to purchase ad space across websites, apps, and streaming services without manual negotiations. This technology-driven approach allows for precise targeting, real-time optimization, and efficient budget allocation across multiple advertising channels simultaneously.

Connected TV (CTV): Television content delivered through internet-connected devices including smart TVs, streaming sticks, and gaming consoles. For The Trade Desk, CTV represents the largest and fastest-growing revenue segment, reaching over 90 million households. This channel enables advertisers to combine the visual impact of traditional television with the targeting precision of digital advertising, creating opportunities for more effective campaign measurement and optimization.

Kokai Platform: The Trade Desk's artificial intelligence-powered advertising platform that integrates machine learning across all aspects of media buying. Launched to replace the previous Solimar system, Kokai processes over 13 million advertising impressions per second while applying predictive algorithms for bid optimization, audience targeting, and campaign performance measurement. The platform represents a significant technological advancement in automated advertising decision-making.

Adjusted EBITDA: Earnings Before Interest, Taxes, Depreciation, and Amortization, excluding stock-based compensation and other non-cash expenses. This financial metric provides insight into The Trade Desk's operational profitability by removing accounting items that don't reflect cash flow generation. The company's 39% adjusted EBITDA margin in Q2 2025 demonstrates strong operational efficiency and the scalability of its software-based business model.

Chief Financial Officer (CFO): The executive responsible for managing a company's financial operations, including financial planning, risk management, and investor relations. Alex Kayyal's appointment as CFO brings investment banking and venture capital experience to The Trade Desk during a critical growth phase. His background with Salesforce Ventures and Lightspeed positions him to guide the company's financial strategy as it pursues larger enterprise opportunities and international expansion.

Revenue Growth: The percentage increase in company sales compared to the same period in the previous year. The Trade Desk's 19% year-over-year revenue growth to $694 million demonstrates continued market share gains in the competitive digital advertising sector. This growth rate, while slower than historical peaks above 25%, represents solid performance given industry-wide pressures and the company's increasingly large revenue base.

Customer Retention: The percentage of existing customers who continue using a company's services over a specific period. The Trade Desk's maintenance of 95%+ customer retention for 11 consecutive years indicates strong client satisfaction and platform effectiveness. High retention rates in software businesses typically correlate with recurring revenue predictability and organic growth opportunities through increased customer spending.

Digital Advertising: Marketing communications delivered through internet-connected devices and platforms including websites, mobile apps, social media, and streaming services. The Trade Desk operates within this ecosystem by providing technology that helps advertisers purchase and optimize campaigns across multiple digital channels. The global digital advertising market continues expanding as consumer attention shifts from traditional media to online content consumption.

Unified ID 2.0 (UID2): An industry-standard identity solution designed to replace third-party cookies while preserving advertising effectiveness and user privacy controls. The Trade Desk collaborates with other industry participants to operate this open-source technology, which enables cross-device advertising targeting without relying on deprecated tracking methods. UID2 adoption represents a strategic initiative to maintain advertising precision in a privacy-focused regulatory environment.

Supply Chain Optimization: The process of improving efficiency and transparency in digital advertising transactions between advertisers, platforms, and publishers. The Trade Desk's OpenPath initiative and Deal Desk platform aim to reduce intermediary fees while increasing campaign performance visibility. These supply chain improvements help advertisers achieve better return on investment while ensuring publishers receive fair compensation for their advertising inventory.