The Trade Desk reported its second-quarter results for 2025 on Thursday, highlighting an increase in revenue and net profit but facing investor skepticism. The company generated $694 million in Q2, up from $585 million in the same quarter last year, with a rise in net profit from $85 million to $90 million. However, the company’s growth rate has slowed, dropping from 26% to 19%, which has raised concerns among investors despite the increase in net revenue.
In addition, The Trade Desk’s net income margin decreased from 15% to 13%, further complicating its growth narrative. The earnings report also featured some leadership changes, with Alex Kayyal stepping in as the new CFO, succeeding Laura Schenkein. Omar Tawakol, an established figure in ad tech, will join The Trade Desk’s board.
Regarding competition, founder and CEO Jeff Green expressed the company’s complex relationship with major digital players, often referred to as “walled gardens.” He emphasized that while The Trade Desk offers a strong platform for advertising beyond these giants, the latter still capture a significant share of advertising dollars. Green noted that users on open internet platforms are generally more receptive to advertisements compared to those on walled gardens like YouTube, where users often skip ads. He suggested that the trend of advertisers shifting towards open internet platforms is inevitable, although acknowledged that The Trade Desk isn’t a direct competitor to major players like Google or Amazon.
Despite Green’s optimistic outlook on AI integration into the platform—sharing that the company’s AI system, Kokai, now accounts for 75% of all advertising budgets—the stock saw a significant decline, dropping 25%-30% following the earnings release. Investors remain cautious about whether The Trade Desk can reverse its growth trends and effectively compete against the dominant walled gardens.
The Trade Desk’s embrace of AI and its wealth of advertisement data positions it uniquely in the evolving digital landscape, and the leadership changes may provide fresh perspectives aimed at revitalizing growth. With potential shifts in ad spending, the future could hold promise for The Trade Desk as it continues to navigate its path in a challenging market.