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Trade Desk (TTD) Q4 FY25 earnings call: guidance and Q&A

Earnings call· Dec 2025 (Q4 FY25)· Feb 25, 2026

Source: earnings call transcript

Executive summary

The Trade Desk Q4 FY25 — Strong Growth Amid Macro Headwinds, AI-Fueled Innovation

The Trade Desk delivered solid Q4 FY25 results, driven by strong channel growth and international expansion, despite persistent macro headwinds impacting CPG and auto verticals. The company continues to invest heavily in AI-fueled innovation, particularly with its Kokai platform and new offerings like Audience Unlimited and Deal Desk, aiming to enhance decisioning and transparency in the open Internet. Strategic organizational upgrades and a focus on disciplined reinvestment are expected to position the company for improved leverage and accelerated growth beyond FY26.

Highlights

5

  • Revenue grew approximately 19% year-over-year when excluding political spend in Q4 FY25.

  • Adjusted EBITDA was $400 million, representing 47% of revenue in Q4 FY25.

  • Ended Q4 FY25 with a strong cash position of $1.3 billion and no debt.

  • CTV grew faster than the overall business, and audio grew at the highest rate among channels in Q4 FY25.

  • International business growth outpaced North America, reflecting investments in EMEA and APAC.

Concerns

3

  • Sustained weakness in CPG and global auto companies, representing over 1/4 of the business, continued into Q1 FY26.

  • Q1 FY26 revenue guidance of at least $678 million (10% YoY growth) reflects a prudent approach due to lower visibility in CPG and auto verticals.

  • Q1 FY26 adjusted EBITDA guidance of approximately $195 million is primarily due to timing of infrastructure investments.

Guidance & targets

CategoryTargetConfidence
Revenue
at least $678 million
high materiality
High
Revenue growth
10% year-over-year growth
high materiality
High
Adjusted EBITDA
approximately $195 million
high materiality
High
Adjusted EBITDA margin percentage
approximately in line with 2025
high materiality
High
Headcount growth
remain below revenue growth
medium materiality
High

Segment performance

SegmentRevenueYoYQoQMargin
Video (includes CTV)
Grew faster than the overall business throughout 2025, including during Q4 despite lapping strong political CTV spend.
Share of business: ~50%
—faster than overall business——
Mobile
Represented around 30% share of our business during the quarter.
Share of business: ~30%
————
Display
Represented a low double-digit share of business.
Share of business: low double-digit
————
Audio
Represented around 6% of the business and grew year-over-year at a rate higher than any other channel in Q4.
Share of business: ~6%
—highest rate——
United States
Represented approximately 84% of our revenue in Q4.
Share of revenue: ~84%
————
International
Represented about 16% of revenue. Growth across our international business continues to outpace growth in North America, reflecting investments in EMEA and APAC.
Share of revenue: ~16%
—outpaced North America——

Product announcements

ProductTypeDetails
Audience Unlimitedlaunch
Deal Desklaunch

Deals & partnerships

Retailers globally Creation of the world's largest and richest marketplace of retail data Over the last 5 years or so

Partnerships with retailers around the world to build a scaled data marketplace, with strong diversification across categories like big-box, grocery, delivery, and travel.

Two biggest SSPs in Germany Integration with Deal Desk

The two largest SSPs in Germany have announced their integration with The Trade Desk's new Deal Desk product, which is rolling out globally.

Risks & headwinds

CPG and Auto Vertical Weakness FY25, continuing into Q1 FY26

If these categories performed at parity with others, TTD's growth rate would have been at least 5% higher. Represent over 1/4 of TTD's business.

Mitigation:Diversification across verticals (medical health, technology, business and finance showing strength), strong client dialogues, focus on objective decision-making, and supporting clients through turbulence while allocating resources to faster-growing areas.

Competitive Landscape (Walled Gardens) Ongoing

Historically, 90% of deal IDs never scaled due to inefficient supply chains and lack of decisioning power.

Mitigation:Emphasizing TTD's objectivity, trust, and advanced AI-fueled decisioning across the open Internet; simplifying billing to highlight true costs vs. walled gardens; OpenPath initiative to create a more efficient, direct supply chain.

Inefficient Supply Chains and Opaque Practices Ongoing

Historically, 90% of deal IDs never scaled, either because they were set up poorly, hard to troubleshoot or simply didn't perform.

Mitigation:OpenPath initiative to create a more efficient, direct supply chain with a 4.5% fee; Deal Desk to centralize deal management and improve performance; challenging principal-based buying by agencies and SSPs that exploit the ecosystem.

What to watch in Q1 FY26

CPG and Auto Vertical Performance

Next quarter (Q1 FY26 results)
Current Softness continuing into Q1 FY26
Target Improvement or stabilization in ad spend

Why it matters

These verticals represent over 1/4 of TTD's business, and their recovery is key to overall revenue acceleration.

Among the verticals that represent at least 1% of our business in Q4, as Jeff mentioned, CPG and to a lesser extent, auto were our softest verticals, and those trends have continued into Q1.

Find out whether TTD delivers this. Inve re-checks your case every morning.

Q&A highlights

What are you seeing from CPG/auto in Q1, and how does it factor into guidance?

Jeff Green explained that CPG and auto weakness is due to macro factors (cost inflation, consumer pressures, tariffs) leading to budget pauses. These categories represent 1/4 of the business. If they performed at parity, growth would be 5% higher. The Q1 guide reflects prudence due to continued softness, but long-term opportunity is strong.

“Our Q1 guide reflects the prudence from both the auto and the CPG categories and the state of the state, if you will, and what they're dealing with. And also, it does not reflect a diminished long-term opportunity for either The Trade Desk or these categories specifically.”

asked by Shyam Patil · answered by Jeffrey Green

2 min read 6 chapters

Detailed narrative

Macro Environment and Vertical Performance

The global advertising market in FY25 saw significant supply growth, creating a buyer's market. While tech, travel, pharma, and communication spend were strong, CPG and global auto companies, representing over 25% of TTD's business, experienced sustained weakness due to tariff uncertainty, uneven volumes, and inflationary pressures, impacting their advertising budgets. This trend is expected to continue into Q1 FY26, though some CPG and auto brands are focusing on objective decision-making.

AI-Fueled Innovation with Kokai

The Trade Desk has been investing in AI since 2018 with Koa, and its Kokai platform is described as the most advanced AI-fueled buying platform for the open Internet. AI enhances every function from identity probabilities to impression valuation, performance prediction, and fraud detection. The company believes its objective business model, without owned and operated inventory, is uniquely positioned to benefit from AI advancements, leveraging scaled, unique, and actionable data sets.

Audience Unlimited and Retail Media

Audience Unlimited is a new product designed to simplify the use and value of the data marketplace, especially for third-party and retail data, by offering an all-in cost structure. This innovation, enabled by Agentic AI, aims to address the historical underutilization of data due to complex pricing. Retail media spend influenced by retail data reached record levels in FY25, with partnerships covering over half of global retail sales, demonstrating strong performance gains for advertisers.

Deal Desk and CTV Growth

Deal Desk is another Kokai-built innovation centralizing deal creation, management, and analysis, using AI to forecast performance and highlight potential issues. Early results show deals managed through Deal Desk perform meaningfully better. CTV remains a strong growth driver, with content owners increasingly shifting towards programmatic and biddable CTV, particularly for live sports and premium episodic content, accelerating the move away from traditional insertion orders.

Simplification and Operational Upgrades

The Trade Desk is focused on simplifying supply chains, measurement, UI, and billing to make its platform more accessible and comparable to walled gardens, without compromising transparency. Operational upgrades in FY25 included reorganizing the go-to-market model around a brand-first, integrated coverage approach, increasing direct advertiser relationships, and eliminating overlapping coverage. This has led to a doubling of the Joint Business Plan (JBP) pipeline, enhancing strategic partnerships and accountability.

Competitive Landscape and Trust

Management asserts that competitive pressure has not significantly increased, and that Google was a stronger past competitor than Amazon. The company differentiates itself by its objectivity and lack of owned and operated inventory, which it believes is a critical advantage in an AI-fueled world where trust and data potency are paramount. The complexity of the global advertising market is viewed as a moat, creating opportunities for Agentic AI to enhance decision-making within trusted platforms.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.