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The Trade Desk to Report Q3 Earnings: How to Approach the Stock Now?
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Key Takeaways
The Trade Desk reports Q3 results on Nov. 6 after market close.
TTD expects revenues to grow about 14% year over year to roughly $717 million.
Macroeconomic uncertainty and tough competition cloud TTD's near-term outlook.
The Trade Desk, Inc. (TTD - Free Report) will report its third-quarter 2025 results on Nov. 6, after market close.
TTD’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters, while missing once, with an average surprise of 8.46%.
Image Source: Zacks Investment Research
Let us see how TTD is expected to fare in terms of revenues and earnings this time around.
The Zacks Consensus Estimate for the bottom line in the to-be-reported quarter is pegged at 44 cents compared with 41 cents reported in the prior-year quarter. The consensus estimate for total revenues is pinned at $718.16 million, implying a 14.4% year-over-year increase.
TTD expects revenues to be at least $717 million, indicating 14% year-over-year growth. Excluding the benefit of U.S. political ad spend in the prior year quarter, the revenue growth rate is projected to be 18% on a year-over-year basis.
What Our Model Predicts for TTD’s Q3
Our proven model does not conclusively predict an earnings beat for TTD this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) increases the chances of an earnings beat. But that is not the case here. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Continued momentum in key business areas, such as Connected TV (“CTV”), is expected to have cushioned TTD’s top-line performance in the to-be-reported quarter. CTV is the fastest-growing segment of the digital ad market, given the ongoing shift from linear TV. On the last earnings call, management highlighted that programmatic CTV continues to deliver the “most effective and highest return on ad spend,” strengthening TTD’s position in the CTV market. In the last reported quarter, Video advertising, which includes CTV, represented a high-40s percentage share of total business. Deep partnerships with Disney, NBCU, Roku, Netflix, LG and Walmart, among others, bode well.
TTD’s focus on long-term, high-value joint business plans (JBPs), with major advertisers, agencies and publishers, is likely to have acted as another tailwind. On the last earnings call, management noted that it had nearly 100 JBPs in the pipeline.
Apart from CTV, momentum in retail media, international expansion, the Kokai platform and efforts to strengthen go-to-market capabilities are likely to have acted as tailwinds.
More than 70% of clients are now using the company’s Kokai platform, with full client adoption expected to be completed by this year. Campaigns, across the board, running on Kokai, are delivering more than 20-point improvements in key performance indicators compared with legacy ones, added TTD. Those performance gains are likely to have translated directly into deeper wallet share. Management highlighted that advertisers transitioning the majority of spend to Kokai are increasing their overall spend on the platform more than 20% faster than those who still have not.
TTD is also upbeat about Deal Desk, which is currently in the beta stage. Deal Desk leverages AI forecasting to optimize deals and re-route underperforming deals to better open market and premium internet alternatives. Disney has already been leveraging Deal Desk.
Complementing Kokai, OpenPath is simplifying the programmatic supply chain by allowing publishers to integrate directly with The Trade Desk’s platform. Sincera's acquisition is enhancing supply-chain transparency through OpenSincera, which makes data available to the ecosystem for free.
While North America accounts for 86% of advertising spend, TTD is steadily expanding its global footprint, driven by faster-growing international markets. This increasing global presence offers clients localized marketplace expertise across key regions.
However, macroeconomic volatility and escalating trade tensions do not augur well for TTD, as these could squeeze ad budgets. TTD remains cautious regarding the impact of the volatile macro backdrop, particularly on the large global brands.
The intensely competitive nature of the digital advertising industry, dominated by industry giants like Alphabet (GOOGL - Free Report) and Amazon (AMZN - Free Report) , as well as players like Magnite (MGNI - Free Report) , continues to put pressure on TTD’s market positioning. Amazon’s expanding DSP business is giving tough competition to TTD, especially in the CTV space. Even Magnite is expanding its presence in CTV and retail media and competing for ad dollars. Higher costs could impact profitability, while executing well across disparate markets can be complex and risky.
Image Source: Zacks Investment Research
Analysts have revised their earnings estimates downwards for the third quarter for TTD’s bottom line over the past 60 days.
TTD Stock Plunges
TTD’s shares have declined 9.4% over the past six months. It has significantly underperformed the Internet Services industry and the Zacks S&P 500 composite’s rise of 65.5% and 23.4%, respectively.
TTD’s Price Performance
Image Source: Zacks Investment Research
The company has underperformed compared with its digital advertising peers, including Alphabet (up 71.3%), Amazon (up 31.1%) and Magnite (up 47.1%).
Key Valuation Metric for TTD
TTD stock is also not so cheap, as its Value Style Score of F suggests a stretched valuation at this moment.
Image Source: Zacks Investment Research
The stock is trading at a premium with a forward 12-month Price/Sales of 7.51X compared with the industry’s 7.07X.
AMZN, GOOGL and MGNI are trading at a forward 12-month Price/Sales multiple of 3.35X, 9.02X and 3.48X, respectively.
How to Approach TTD Before Q3 Earnings Release
Despite strong execution in CTV and retail media, The Trade Desk’s near-term setup looks unfavorable heading into its third-quarter earnings.
Macroeconomic uncertainty and intensifying competition from Amazon and Alphabet are likely to have pressured near-term performance. While the Kokai platform, Deal Desk and OpenPath initiatives are strategically sound, their benefits may take time to materially impact profitability.
Premium valuation remains a key concern. Given these factors, investors may be better off waiting for a more attractive entry point.
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The Trade Desk to Report Q3 Earnings: How to Approach the Stock Now?
Key Takeaways
The Trade Desk, Inc. (TTD - Free Report) will report its third-quarter 2025 results on Nov. 6, after market close.
TTD’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters, while missing once, with an average surprise of 8.46%.
Image Source: Zacks Investment Research
Let us see how TTD is expected to fare in terms of revenues and earnings this time around.
The Zacks Consensus Estimate for the bottom line in the to-be-reported quarter is pegged at 44 cents compared with 41 cents reported in the prior-year quarter. The consensus estimate for total revenues is pinned at $718.16 million, implying a 14.4% year-over-year increase.
TTD expects revenues to be at least $717 million, indicating 14% year-over-year growth. Excluding the benefit of U.S. political ad spend in the prior year quarter, the revenue growth rate is projected to be 18% on a year-over-year basis.
What Our Model Predicts for TTD’s Q3
Our proven model does not conclusively predict an earnings beat for TTD this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) increases the chances of an earnings beat. But that is not the case here. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
TTD has an Earnings ESP of 0.00% and carries a Zacks Rank #4 (Sell). You can see the complete list of today’s Zacks #1 Rank stocks here.
Factors to Focus on Ahead of TTD’s Q3 Earnings
Continued momentum in key business areas, such as Connected TV (“CTV”), is expected to have cushioned TTD’s top-line performance in the to-be-reported quarter. CTV is the fastest-growing segment of the digital ad market, given the ongoing shift from linear TV. On the last earnings call, management highlighted that programmatic CTV continues to deliver the “most effective and highest return on ad spend,” strengthening TTD’s position in the CTV market. In the last reported quarter, Video advertising, which includes CTV, represented a high-40s percentage share of total business. Deep partnerships with Disney, NBCU, Roku, Netflix, LG and Walmart, among others, bode well.
TTD’s focus on long-term, high-value joint business plans (JBPs), with major advertisers, agencies and publishers, is likely to have acted as another tailwind. On the last earnings call, management noted that it had nearly 100 JBPs in the pipeline.
Apart from CTV, momentum in retail media, international expansion, the Kokai platform and efforts to strengthen go-to-market capabilities are likely to have acted as tailwinds.
More than 70% of clients are now using the company’s Kokai platform, with full client adoption expected to be completed by this year. Campaigns, across the board, running on Kokai, are delivering more than 20-point improvements in key performance indicators compared with legacy ones, added TTD. Those performance gains are likely to have translated directly into deeper wallet share. Management highlighted that advertisers transitioning the majority of spend to Kokai are increasing their overall spend on the platform more than 20% faster than those who still have not.
The Trade Desk Price and EPS Surprise
The Trade Desk price-eps-surprise | The Trade Desk Quote
TTD is also upbeat about Deal Desk, which is currently in the beta stage. Deal Desk leverages AI forecasting to optimize deals and re-route underperforming deals to better open market and premium internet alternatives. Disney has already been leveraging Deal Desk.
Complementing Kokai, OpenPath is simplifying the programmatic supply chain by allowing publishers to integrate directly with The Trade Desk’s platform. Sincera's acquisition is enhancing supply-chain transparency through OpenSincera, which makes data available to the ecosystem for free.
While North America accounts for 86% of advertising spend, TTD is steadily expanding its global footprint, driven by faster-growing international markets. This increasing global presence offers clients localized marketplace expertise across key regions.
However, macroeconomic volatility and escalating trade tensions do not augur well for TTD, as these could squeeze ad budgets. TTD remains cautious regarding the impact of the volatile macro backdrop, particularly on the large global brands.
The intensely competitive nature of the digital advertising industry, dominated by industry giants like Alphabet (GOOGL - Free Report) and Amazon (AMZN - Free Report) , as well as players like Magnite (MGNI - Free Report) , continues to put pressure on TTD’s market positioning. Amazon’s expanding DSP business is giving tough competition to TTD, especially in the CTV space. Even Magnite is expanding its presence in CTV and retail media and competing for ad dollars. Higher costs could impact profitability, while executing well across disparate markets can be complex and risky.
Image Source: Zacks Investment Research
Analysts have revised their earnings estimates downwards for the third quarter for TTD’s bottom line over the past 60 days.
TTD Stock Plunges
TTD’s shares have declined 9.4% over the past six months. It has significantly underperformed the Internet Services industry and the Zacks S&P 500 composite’s rise of 65.5% and 23.4%, respectively.
TTD’s Price Performance
Image Source: Zacks Investment Research
The company has underperformed compared with its digital advertising peers, including Alphabet (up 71.3%), Amazon (up 31.1%) and Magnite (up 47.1%).
Key Valuation Metric for TTD
TTD stock is also not so cheap, as its Value Style Score of F suggests a stretched valuation at this moment.
Image Source: Zacks Investment Research
The stock is trading at a premium with a forward 12-month Price/Sales of 7.51X compared with the industry’s 7.07X.
AMZN, GOOGL and MGNI are trading at a forward 12-month Price/Sales multiple of 3.35X, 9.02X and 3.48X, respectively.
How to Approach TTD Before Q3 Earnings Release
Despite strong execution in CTV and retail media, The Trade Desk’s near-term setup looks unfavorable heading into its third-quarter earnings.
Macroeconomic uncertainty and intensifying competition from Amazon and Alphabet are likely to have pressured near-term performance. While the Kokai platform, Deal Desk and OpenPath initiatives are strategically sound, their benefits may take time to materially impact profitability.
Premium valuation remains a key concern. Given these factors, investors may be better off waiting for a more attractive entry point.