The Trade Desk Inc Earnings - Q4 2025 Analysis & Highlights
The Trade Desk reported solid Q4 2025 results with strong profitability and significant organizational improvements, though growth was tempered by macroeconomic headwinds in CPG and automotive sectors, while management emphasized AI-driven innovation and the structural advantages of its objective, open-internet platform in an increasingly complex advertising market.
Key Financial Results
Full year 2025 revenue reached $2.9 billion, representing 18% year-over-year growth.
Q4 2025 revenue was $847 million, representing 14% year-over-year growth, or approximately 19% excluding political spend.
Spend was approximately $13.4 billion for the full year 2025.
Q4 adjusted EBITDA was approximately $400 million, or about 47% of revenue.
Q4 net income was $187 million, or $0.39 per diluted share, representing about 22% of revenue.
Q4 adjusted net income was $284 million, or $0.59 per diluted share.
Net cash provided by operating activities was $312 million, and free cash flow was $282 million in Q4.
Business Segment Results
Video, which includes CTV, represented about 50% of business in Q4 and continues to grow as a percentage of channel mix.
CTV grew at a faster rate than the overall business throughout 2025, including during Q4, despite lapping strong political CTV spend in the quarter.
Mobile represented around 30% share of business during Q4.
Display represented a low double digit share of business.
Audio represented around 6% of business and grew year-over-year at a rate higher than any other channel in Q4.
United States represented approximately 84% of revenue in Q4, while international represented about 16%.
Growth across international business continues to outpace growth in North America.
CPG and to a lesser extent auto were the softest verticals, with those trends continuing into Q1.
Particularly strong year-over-year growth was seen in medical health, technology and business and finance.
Capital Allocation
The Trade Desk used $423 million of cash to repurchase Class A common stock via its share repurchase program in Q4.
An additional authorization was announced, bringing the total to $500 million, inclusive of the amount remaining from the existing authorization.
The company plans to continue opportunistic share repurchases while also offsetting dilution from employee stock issuances.
The company ended the quarter with approximately $1.3 billion in cash, cash equivalents and short-term investments.
The company had no debt on the balance sheet.
Industry Trends and Dynamics
More supply was added to the global market than in any year before, creating a buyer's market where objectivity in decisioning becomes more valuable.
The shift from traditional insertion orders and programmatic guaranteed toward true biddable CTV continues to accelerate, particularly in live sports and premium episodic content.
The largest content owners in the world are leaning further into programmatic and decision buying.
Spend on the platform influenced by retail data reached record levels in 2025.
Retailers in the data marketplace represent more than half of global retail sales.
Competitive Landscape
Management stated that competitive pressure has not really gone up, noting that Google was a far better competitor than Amazon is today or likely will be.
Amazon is mostly playing in selling owned and operated inventory and trying to win on non-decision inventory, creating a different competitive dynamic than The Trade Desk.
The Trade Desk's objectivity and lack of owned and operated inventory provides a strategic advantage, particularly in a supply-constrained market.
The company believes that the company with the best objectivity and product that aligns its interests with buyers will win the lion's share of the market.
Management emphasized that most skilled competitors are first and foremost selling their owned and operated inventory, while The Trade Desk has aligned its interests with buyers.
Macroeconomic Environment
2025 was fantastic for tech spend, travel spend, pharma spend and communication spend.
Despite greater macro uncertainty, most S&P 500 companies and most categories had a very good year.
One of the clearest themes was sustained weakness among some large consumer packaged goods companies and global auto companies, which together represent over a quarter of the business.
CPG and auto companies began navigating a mix of category headwinds, such as tariff uncertainty and uneven volumes in addition to persistent inflationary pressures as more consumers deal with cost of living challenges beginning in Q2 2025.
Those trends have continued into the beginning of 2026.
Several global brands have talked about pulling back on advertising budgets, driven by month-to-month volatility caused by macro forces.
In the CPG sector, large global brands spoke about consumer pressure, slower volume recovery and ongoing input cost volatility.
Growth Opportunities and Strategies
Kokai, the company's AI-fueled buying platform, is the most advanced AI-fueled buying platform ever pointed at the open internet, with almost 100% of clients running through it.
Kokai broke advertising into basic elements and enabled every unique function in the valuation process to be enhanced with AI, from identity probabilities to valuing impressions to predicting performance to detecting fraud.
Audience Unlimited is one of the company's biggest innovations, designed to change the usage and value of the data marketplace by providing an all-in cost structure where value and impact is clearly understood.
Audience Unlimited was made possible by advances in AI, particularly agentic AI, which allows the company to surface the right data segment at the right moment.
Deal Desk centralizes the way buyers create, manage, and analyze their deals, using AI to forecast how a deal is likely to perform relative to the open market.
Deals set up and managed through Deal Desk are performing meaningfully better than those managed the legacy way.
The company reorganized its go-to-market model around a brand-first more integrated coverage approach with unified teams responsible for both business development and spend activation.
Joint business plans (JBPs) accounted for well over half of the company's business exiting 2025, and the JBP pipeline has more than doubled over the past year.
The company is making huge efforts to simplify supply chains, measurement, UX, and the way it builds, without compromising the power of the platform or values on transparency.
The company is working to close the gap between media dollars and real business outcomes like sales, lifetime value and brand health in 2026.
Financial Guidance and Outlook
For Q1 2026, the company expects revenue to be at least $678 million, representing 10% year-over-year growth.
The company estimates adjusted EBITDA for Q1 2026 to be approximately $195 million.
The company expects full year 2026 adjusted EBITDA margin percentage to be approximately in line with 2025.
The company intends to continue investing in the business while maintaining strong cost discipline.
Head count growth is expected to remain below revenue growth, reflecting focus on productivity and operating leverage.
The company plans to be deliberate in prioritizing investments that directly support revenue growth and AI-driven innovation.
Management believes revenue growth rate should improve over time given the strength of client relationships, product focus and organizational actions underway.
AI and Innovation Strategy
The company believes AI is an unprecedented generational shift that will change the world similar to how the internet emerged, which is why it launched Kokai in 2018.
The company's proprietary AI and unique objectivity represent an unprecedented power combo, with the business model being more conducive to benefiting from AI than competitors.
The company has built the industry's most advanced, trusted and objective data set based on 20 million ad opportunities every second, each with thousands of data variables and each valued objectively.
Trust matters more than ever in an AI-fueled world, and AI companies without access to scaled quality data or amazing levels of trust will not last long.
Agentic AI will ultimately accrete the most value to companies that already have deep customer trust and have scaled, refined and objective data sets, not by companies with limited data hoping an AI framework becomes their business model.
The company believes agentic AI is an evolution of outcome-based platforms, not a shortcut around them.
Every engineer at The Trade Desk is using AI tools to write and or test code, with AI tools injected across the company and productivity going up.
