The Trade Desk: Back to a Beat

Lou Whiteman, The Motley Fool

Fri, May 9, 2025, 6:40 AM 4 min read

Key Points

The Trade Desk reversed a difficult fourth-quarter showing, posting solid revenue and earnings growth that topped expectations.
The company’s net income margin improved, and its guidance for the current quarter is slightly ahead of Wall Street expectations.
The Trade Desk is early in the process of implementing the changes announced last quarter, but these results suggest the company is back on track.

Here's our initial take on The Trade Desk's (NASDAQ: TTD) financial report.

Key Metrics

Metric	Q1 2024	Q1 2025	Change	vs. Expectations
Revenue	$491 million	$616 million	25%	Beat
Adjusted EPS	$0.26	$0.33	27%	Beat
Net income margin	6%	8%	+2 pp	n/a
Customer retention rate	95%	95%	n/a	n/a

The Trade Desk Bounces Back After Difficult Fourth Quarter

Tensions were high coming into earnings season for The Trade Desk investors, coming off a dramatic 30% plunge the last time the company released results. But unlike three months ago, the business delivered growth that topped Wall Street expectations.

The Trade Desk reported revenue up 25% year over year and adjusted earnings per share up 27% and improved its net income margin by 2 percentage points to 8%. Although revenue growth was not as robust as the 28% The Trade Desk reported a year ago, the results indicate its business is holding up well in what appears to be a tricky environment for advertising businesses.

There is no indication that customers are abandoning The Trade Desk for other platforms. Customer retention remained over 95%, as it has been for the past 11 years. And The Trade Desk's Unified ID 2.0 platform, a replacement for browser cookies that attempts to balance privacy concerns with advertiser desire to boost the relevancy of its ads, continues to sign up more partners and users.

"We're encouraged by the early impact of the strategic upgrades at the company we implemented in Q4, which contributed to our outperformance," CEO Jeff Green said in a statement. "As we build on this momentum, we're optimistic about our ability to continue to outpace the market and deliver increasing value to marketers who prioritize objective, transparent, and data-driven media buying on the open internet."

The Trade Desk booked $128 million in expenses related to stock-based compensation in the quarter and repurchased $386 million in shares.

Immediate Market Reaction

Investors were relieved to see history did not repeat itself. The Trade Desk shares were up 12% in aftermarket trading on Thursday following the release but ahead of the company's call with analysts. It is a step in the right direction for a stock that had lost nearly half of its value in 2025 coming into earnings.

What to Watch

The Trade Desk expects revenue of "at least" $682 million in the current quarter, which would represent healthy double-digit sequential growth and is slightly ahead of the $680 million consensus estimate. Given the uncertainty about ad spending, investors will be eager to hear any commentary from management on the call about their clarity about the months to come.

The results are a relief, but The Trade Desk continues to be in the early days of a transformation. Vivek Kundra, who was hired as chief operating officer in response to last quarter's miss, is in the early days in his role with a charge to streamline operations and scale the business globally.

The company's acquisition of Sincera, a digital advertising data company that should help ad clients better navigate The Trade Desk's massive inventory, occurred late in the quarter and did not contribute to these results.

The Trade Desk has not yet reached its destination, but the latest results at least provide an indication that the company is back on course and heading in the right direction.

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Lou Whiteman has positions in The Trade Desk. The Motley Fool has positions in and recommends The Trade Desk. The Motley Fool has a disclosure policy.

The Trade Desk: Back to a Beat was originally published by The Motley Fool

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