Digital advertising platform The Trade Desk (TTD) tops estimates, raises guidance, and regains investor confidence after rocky Q4.
After a bruising fourth quarter that saw shares of The Trade Desk nosedive nearly 30%, the digital advertising firm has staged a sharp turnaround. The Ventura, Calif.-based company delivered a resounding first-quarter earnings report that exceeded Wall Street expectations on every major metric, sending the stock soaring 26% in intraday trading.
Revenue jumped 25% year over year to $616 million, surpassing consensus estimates by a wide margin. Adjusted earnings per share came in at $0.33, up 27% from the year prior and comfortably above the $0.25 anticipated by analysts. In a further sign of strength, the company improved its net income margin by two percentage points to 8%, while maintaining a 95% customer retention rate—a level it has consistently held for over a decade.
The upbeat report marks a significant reversal from Q4, when The Trade Desk reported a rare top-line miss and cut its guidance. CEO Jeff Green attributed the strong performance to “strategic upgrades” introduced last quarter, particularly with the rollout of its next-gen Kokai platform. “We’re building on momentum,” he said, “and we’re optimistic about our ability to continue to outpace the market.”
Kokai and CTV Lead the Rebound
Central to The Trade Desk’s Q1 resurgence is the accelerating adoption of its Kokai platform—an AI-powered system designed to improve campaign efficiency. Two-thirds of clients are now using Kokai, up from roughly half at the end of 2024. Early results appear promising: campaigns run through Kokai are delivering 24% lower cost per conversion and 20% lower cost per acquisition.
Meanwhile, connected TV (CTV) advertising continues to be a pillar of growth. The Trade Desk says CTV remains its largest and fastest-growing channel, helping it capture market share from rivals like Google and Amazon. Green noted that Amazon’s DSP is largely confined to Prime Video, whereas The Trade Desk offers brands access to the open internet—something content owners increasingly prefer due to the platform’s objectivity and neutrality.
Even in a volatile macroeconomic environment, The Trade Desk sees opportunity. Its programmatic model, which evaluates and purchases ad impressions in real time, offers agility that traditional methods lack. “In a time when CMOs are trying to do more with less, our model gives them the flexibility and performance they need,” said Green.
Central to The Trade Desk’s Q1 resurgence is the accelerating adoption of its Kokai platform—an AI-powered system designed to improve campaign efficiency. Two-thirds of clients are now using Kokai, up from roughly half at the end of 2024. Early results appear promising: campaigns run through Kokai are delivering 24% lower cost per conversion and 20% lower cost per acquisition.
Meanwhile, connected TV (CTV) advertising continues to be a pillar of growth. The Trade Desk says CTV remains its largest and fastest-growing channel, helping it capture market share from rivals like Google and Amazon. Green noted that Amazon’s DSP is largely confined to Prime Video, whereas The Trade Desk offers brands access to the open internet—something content owners increasingly prefer due to the platform’s objectivity and neutrality.
Even in a volatile macroeconomic environment, The Trade Desk sees opportunity. Its programmatic model, which evaluates and purchases ad impressions in real time, offers agility that traditional methods lack. “In a time when CMOs are trying to do more with less, our model gives them the flexibility and performance they need,” said Green.
Upbeat Outlook Calms Investor Nerves
The market responded swiftly and positively to the results. Shares surged more than 12% in after-hours trading Thursday and continued climbing into Friday, as investors digested the raised guidance and optimistic tone from management. The Trade Desk now expects Q2 revenue of at least $682 million, representing 17% growth year over year and slightly above analyst projections.
The company also announced it repurchased $386 million of Class A common stock in Q1, and closed the quarter with $1.7 billion in cash and no debt—leaving ample room for future investment or capital returns. Free cash flow reached $230 million for the quarter, a sign of underlying business health.
Still, challenges remain. The company acknowledged ongoing macroeconomic uncertainty and competitive pressure from tech giants. And while its acquisition of ad tech firm Sincera is expected to enhance supply chain transparency, the integration process is still in its early stages.
Yet for now, The Trade Desk appears to have turned a corner. With Kokai adoption accelerating, CTV ad spend rising, and a robust product roadmap ahead—including a new “Deal Desk” platform aimed at improving digital upfronts—the company looks poised to build on its regained momentum.
“This quarter was a reset,” said Green. “Now we focus on execution.”
Considering a $1,000 investment in these companies?
Our team at Stock Investor carefully curated a list of top stocks with the potential for significant returns, suitable for beginners and seasoned investors alike who are eager to learn a trade and unearth the best stocks to buy. Though not featured in this article, these selected stocks could be game-changers in the future.For those seeking dynamic trading experiences, consider joining our Swing Trade Alerts, Option Income Alert, or our Trading Room. Take advantage of our special offer today, starting at just $1 in the first month.
Unlock the secrets of Smart Money
Explore how billionaires and institutions are influencing the market. Follow their every move with DarkOption Flow and stay updated on essential market insights. Begin your journey to informed investing today!
Education
And if you're a fan of Invest opedia, you'll appreciate what we offer at SharperTrades even more. Explore our comprehensive option trading course and technical trading course, where you can learn trading, analyze stocks, delve into chart patterns for stocks, and gain invaluable insights for making the best company investments.
Unlock Your Stock Market Edge with SharperTrades. Dive into powerful trading tools, learn a trade, and receive expert guidance. Stay up-to-date with regular market updates. Learn trading, basics of investing, and how to pick the best stocks to buy. Whether you're a beginner or seasoned investor and trader, we've got you covered. Get started for free, today!