Q1 was a win for The Trade Desk, but bigger tests lie ahead

Following a rare stumble in Q4 — its first earnings miss in over eight years — the ad tech giant bounced back with a performance that reminded everyone why it’s long been the industry’s golden child.

The Trade Desk on Thursday (May 8) disclosed Q1 revenues of $616 million, up 25% year-on-year, exceeding its earlier guidance of “at least $575 million.” The results likely prove a welcome return to form for the outfit after its disastrous opening earnings call of 2025, where it disclosed its first revenue miss, and its stock price tanked as much as a third in the day after its Feb. 12 disclosure.

The markets responded positively, with the TTD-ticker experiencing a double-digit increase in the immediate aftermath of its Q1 earnings disclosure, and it further issued Q2 revenue guidance of “at least $682 million.”

The industry’s largest demand-side platform further highlighted “strong customer retention,” plus “continued collaboration and support for Unified ID 2.0″ — even if Google Chrome’s continued support of third-party cookies has lessened the urgency for such a scheme.

Additionally, The Trade Desk also trumpeted its purchase of Sincera, and appointment of Vivek Kundra as COO, with company CEO Jeff Green, claiming the macro volatility of early 2025 was a boon to its strategy.

”Leading marketers are looking for ways to embrace the open internet, where their consumers are spending most of their time, to drive business differentiation and growth,” he said in a written statement. “Kokai is giving them more power than ever to accomplish that, in stark contrast to the many limitations of walled gardens. As a result, The Trade Desk is well positioned to help our clients succeed and capture greater share by harnessing the full power of the open internet.”

Turnaround plan

The Trade Desk, once viewed as the crown jewel of the open internet ad ecosystem — arguably, it still is — but since its Feb. 12 earnings call, it has experienced a rare moment of vulnerability. 

CEO Jeff Green is now steering a course correction via a 15-point turnaround plan, which appears to have delivered results in the opening quarter of 2025, its continued success faces challenges.

For example tensions with its traditional partners have surfaced, including strained relationships with media agencies, doubts over product execution, and skepticism around strategic bets like UID 2.0 and Kokai.

Frustrations among agencies have notably mounted. Many now see The Trade Desk less as a neutral partner and more as a platform accumulating power at their expense. Discrepancies between its publicly stated 20% take rate and what agencies claim is closer to 30% have fueled mistrust.

Speaking under the Chatham House Rule, one participant at Digiday’s Programmatic Marketing Summit voiced frustration at The Trade Desk’s fee structure, with some even pondering if the DSPs efforts to migrate its customer base to its Kokai operating system was a bid to further conceral its margins.

“You need to think about fees and how they are calculated… The Trade Desk is the Spirit Airlines of the DSP-world,” quipped one town hall participant, commenting on the “hidden fees” that often appear in the invoices they are sent.

Compounding the tension is a missed opportunity in CTV: the cancellation of Sonos’ TV plans left The Trade Desk’s ambitions for a proprietary operating system stalled. Without access to streaming devices, its ability to reshape connected TV ad flows is limited.

Bigger challenges ahead

Still, the roadmap faces daunting headwinds. First, the CTV market is fragmented, making scaled premium inventory access difficult.

Second, third-party cookie deprecation remains unresolved, challenging addressability and measurement. And third, Google’s AI Overviews threaten to reduce available web inventory by serving answers directly on the search results page, undercutting traffic to publisher sites.

Meanwhile, Mediaocean has quietly become a powerful competitor. Recent investments from WPP, Omnicom, and IPG have strengthened the platform’s hold over agency workflows. Agencies now have a financial incentive to prioritize Mediaocean — especially as The Trade Desk’s Kokai has struggled to gain traction. Mediaocean’s deep integration into planning and billing makes it an entrenched player that’s hard to displace.

Despite these pressures, The Trade Desk remains fundamentally strong, with its net income increasing annually from 6% to 8% in the 12 months to March 21, 2025. According to sources, its pivot to pursue direct relationships with advertisers and scaling internationally — especially in regions like Europe, where it faces competition from local players such as Adform — may help it unlock new growth. 

So, while it has shed agency-focused executives, this reallocation signals a reinvestment in programmatic buyers and global expansion.

There’s also the potential upside of recent moves like the acquisition of Sincera, which could allow The Trade Desk to offer better impression-level transparency and challenge incumbent measurement vendors.

However, speculation around a bold acquisition — like buying Roku — was shut down by a senior executive, reinforcing that the company values its neutrality and platform independence. 

In short, The Trade Desk isn’t in crisis, but the halo has slipped. Its resilience will depend on how effectively it executes its turnaround strategy, adapts to industry upheavals, and finds new levers for growth in a rapidly evolving digital ad landscape.

https://digiday.com/?p=578095