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    TTD
    Earnings call· Dec 2025(Q4 FY25)

    Trade Desk Q4 FY25 earnings call TTD

    Feb 25, 2026 Source

    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

    5
    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

    6
    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——

    Operational metrics

    24
    Total spend on platform
    $13.4 billion
    FY25

    Total spend on The Trade Desk platform for the full year 2025.

    Operating expenses growth
    8%YoY
    Q4 FY25

    Q4 operating expenses were up 8% from a year ago.

    Operating expenses growth (ex-stock-based compensation)
    15%YoY
    Q4 FY25

    Excluding stock-based compensation, Q4 operating expenses were up 15% a year ago.

    Adjusted EBITDA
    $400 million
    Q4 FY25

    The Trade Desk generated approximately $400 million in adjusted EBITDA or about 47% of revenue.

    Adjusted net income
    $284 million
    Q4 FY25

    Adjusted net income for the quarter was $284 million or $0.59 per diluted share.

    Net cash provided by operating activities
    $312 million
    Q4 FY25

    Net cash provided by operating activities was $312 million in Q4.

    Cash, cash equivalents and short-term investments
    $1.3 billion
    end of Q4 FY25

    Our balance sheet had about $1.3 billion in cash, cash equivalents and short-term investments at the end of the quarter.

    Days Sales Outstanding (DSOs)
    ~100 daysconsistent with prior periods
    Q4 FY25

    DSOs and DPOs were consistent with prior periods. DSOs were approximately 100 days.

    Days Payables Outstanding (DPOs)
    <85 daysconsistent with prior periods
    Q4 FY25

    DSOs and DPOs were consistent with prior periods. DPOs are under 85 days.

    Share repurchase executed
    $423 million
    Q4 FY25

    In Q4, we used $423 million of cash to repurchase our Class A common stock via our share repurchase program.

    Share repurchase authorization
    $500 millionadditional authorization
    Q4 FY25

    We announced an additional authorization, bringing the total to $500 million, inclusive of the amount remaining from the existing authorization.

    Headcount growth
    below revenue growth
    FY25

    Headcount grew below revenue for the third consecutive year in 2025.

    Unique households reached (appliance manufacturer campaign)
    70% morevs Amazon DSP
    campaign example

    One of the world's leading appliance manufacturers found that with The Trade Desk, they were able to reach 70% more unique households.

    Total cost (appliance manufacturer campaign)
    30% lowervs Amazon DSP
    campaign example

    With The Trade Desk, they were able to reach those consumers at 30% lower total cost.

    Campaign goal performance (appliance manufacturer campaign)
    6x bettervs Amazon DSP
    campaign example

    The Trade Desk platform performed 6x better in terms of delivering their campaign goals.

    Conversions (Cheerios UK campaign)
    88% more
    campaign example

    Cheerios ran a display campaign in the U.K. recently using retail data for audience targeting on Kokai. They saw 88% more conversions.

    CPA (Cheerios UK campaign)
    7x better
    campaign example

    Cheerios ran a display campaign in the U.K. recently using retail data for audience targeting on Kokai. They saw 7x better CPA.

    Cost per acquisition decrease (IKEA campaign)
    17%
    campaign example

    IKEA, for example, is using Kokai to get a more intelligent perspective on how their ads perform across all channels. Thanks to Kokai's AI-fueled omnichannel optimization, they saw cost per acquisition decrease by 17%.

    Booking rate (Best Western campaign)
    doubled
    campaign example

    Best Western saw their booking rate double when using Kokai to target live sports opportunities.

    Incremental reach (Best Western campaign)
    89% improvement
    campaign example

    Best Western saw their booking rate double when using Kokai to target live sports opportunities, thanks to an 89% improvement in incremental reach with Kokai.

    Joint Business Plan (JBP) pipeline
    more than doubledYoY
    past year

    Our JBP pipeline has more than doubled over the past year.

    Joint Business Plan (JBP) contribution to business
    well over half
    exiting FY25

    Exiting 2025, JBPs accounted for well over half of our business.

    OpenPath fee
    4.5%
    current

    We charge them 4.5%, which is meant to be nearly breakeven to slightly profitable so that we can create a more efficient supply chain.

    Net income as percentage of revenue
    22%
    Q4 FY25

    Q4 net income was $187 million or $0.39 per diluted share or about 22% of revenue.

    Industry KPIs

    4
    MetricValueDetails
    EPS$0.39USD
    Free cash flow$282 millionUSD
    Revenue net sales$2.9 billionUSD
    Organic revenue growth19%%

    Product announcements

    2
    ProductTypeDetails
    Audience Unlimitedlaunch
    Deal Desklaunch

    Deals & partnerships

    2
    Retailers globallyCreation of the world's largest and richest marketplace of retail dataOver 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 GermanyIntegration 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

    3
    CPG and Auto Vertical WeaknessFY25, 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 PracticesOngoing

    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

    5

    CPG and Auto Vertical Performance

    Next quarter (Q1 FY26 results)
    CurrentSoftness continuing into Q1 FY26
    TargetImprovement 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.

    Q&A highlights

    7

    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 read6 chapters

    Detailed Narrative

    01

    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.

    02

    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.

    03

    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.

    04

    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.

    05

    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.

    06

    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.

    AI-generated summary of the company’s earnings call. Not investment advice.