Trade Desk (TTD) Q2 2025: Kokai Drives 20%+ Performance Lift as CTV Share Hits High 40s
The Trade Desk’s Q2 saw accelerating adoption of its AI-powered Kokai platform, driving measurable campaign improvements and deepening CTV leadership. With three-quarters of spend now on Kokai and CTV representing the high 40s percent of business, TTD is leveraging its scale in premium open internet channels to outpace the broader digital ad market. Despite macro tariff uncertainty for large advertisers, management is doubling down on operational rigor and supply chain innovation, positioning for sustained share gains in 2026.
Summary
- Kokai Adoption Accelerates: Over 70% of spend now runs through Kokai, yielding 20%+ KPI improvements for clients.
- CTV and Retail Media Outperform: CTV leads growth, now at a high 40s percent of mix, with retail media momentum building globally.
- Supply Chain Innovation: OpenPath and Sincera are driving transparency and efficiency, reinforcing TTD’s value for premium publishers and brands.
Performance Analysis
Trade Desk’s Q2 2025 results underscore its continued outperformance versus the digital advertising market, anchored by a 19% year-over-year revenue increase and robust adjusted EBITDA margin. CTV, or Connected TV, remains the fastest-growing channel and now constitutes the high 40s percent of platform spend, reflecting the ongoing migration of TV budgets to programmatic channels. Retail media also posted strong double-digit gains, benefiting from expanded data partnerships and the shift of shopper marketing budgets into programmatic.
Kokai, TTD’s AI-powered platform upgrade, is now used for three-quarters of client spend and is delivering more than 20-point improvements across key campaign KPIs. Clients who have migrated the majority of spend to Kokai are increasing their platform usage over 20% faster than those who have not, validating the company’s technology-led differentiation. International growth, though a smaller share at 14% of spend, continued to outpace North America, with CTV leading the expansion. Segment softness in home and garden and style and fashion (together ~10% of revenue) was offset by strength in technology, computing, and medical health verticals.
- CTV Share Expansion: Video, including CTV, now accounts for nearly half of all spend, up as a percentage of mix.
- AI-Driven Campaign Uplift: Kokai adoption is accelerating, with clients reporting 20%+ KPI gains and increased spend velocity.
- Retail Media and Data: Record spend influenced by retail data, with new partnerships (Instacart, Ocado) enhancing measurement precision.
Operational discipline and platform innovation are supporting both margin strength and durable revenue growth, even as large advertiser spend faces macro headwinds from tariffs and inflation.
Executive Commentary
"Advertisers are getting meaningfully better returns on their ad dollars, and they are doubling down on the open internet and on us as a result. Around three quarters of all client spend is now running through Kokai, and we expect all of our clients to be using Kokai by the end of this year."
Jeff Green, CEO and Co-founder
"Growth was particularly strong within CTV and retail media, fueled by the continued shift into decision channels for buying TV and the rapid adoption of retail media across verticals and regions. With over 70% of spend now on Kokai, we continue to see strong results from the new platform."
Laura Shenkine, Chief Financial Officer
Strategic Positioning
1. Kokai and AI-Driven Differentiation
Kokai, Trade Desk’s AI-centric platform upgrade, is now the backbone of client campaigns, delivering measurable performance gains. With 75% of spend on Kokai, clients are seeing significant improvements in reach and cost efficiency, supported by the COA AI engine. The system’s distributed AI architecture enables rapid product iteration and unlocks future innovation, particularly with agentic use cases for campaign optimization.
2. CTV Leadership and Premium Open Internet Focus
TTD’s leadership in CTV is reinforced by deep partnerships with major media companies (Disney, NBCU, Roku, Netflix), as well as by the shift of live sports and premium content into streaming environments. The company’s objective, data-driven approach is attracting large brands seeking transparency and measurable outcomes, differentiating TTD from walled gardens that prioritize their own inventory.
3. Supply Chain Efficiency and Transparency
OpenPath and the Sincera acquisition are central to TTD’s strategy to streamline the digital ad supply chain. OpenPath enables direct publisher integrations, improving both publisher revenue (e.g., New York Post saw a 97% programmatic display revenue lift) and buyer transparency. Sincera data is being embedded to optimize impression valuation and supply path selection, furthering TTD’s commitment to objectivity.
4. Enterprise Focus and JVP Expansion
TTD’s business remains concentrated on large global advertisers, with a record number of multi-year joint business plans (JVPs) in progress. Spend under JVPs is growing significantly faster than the rest of the platform, reflecting deeper strategic alignment with leading brands and agencies. This enterprise focus is both a short-term headwind (due to tariff exposure) and a long-term moat as programmatic share expands.
5. Long-Term Vision and Governance
The proposed extension of the dual-class share structure is framed as a mechanism to preserve founder-led, long-term strategic orientation, enabling TTD to pursue transformative investments in AI, supply chain, and open internet leadership without short-term market pressure.
Key Considerations
Q2’s results highlight the interplay between technology adoption, channel mix shift, and macro advertiser dynamics. Investors should consider:
Key Considerations:
- AI Platform Leverage: Kokai’s performance gains are translating into higher client retention and spend, with further innovation (DealDesk, agentic AI) in the pipeline.
- CTV as Growth Engine: CTV’s rising share and premium content partnerships are reinforcing TTD’s role as the leading independent DSP for the open internet.
- Supply Chain Transparency: OpenPath and Sincera are improving efficiency and trust for both publishers and advertisers, supporting ecosystem-wide adoption.
- Enterprise Concentration Risk: Heavy exposure to large brands means macro shocks (tariffs, inflation) can impact near-term growth, though volatility often accelerates programmatic adoption.
- Leadership Transition: CFO transition is underway, but operational rigor and board enhancements aim to sustain execution and governance discipline.
Risks
TTD’s concentration among large global advertisers exposes it to tariff-driven volatility and macroeconomic shocks affecting Fortune 500 ad budgets. While the company’s value proposition is strongest in uncertain environments, sector-specific weakness (e.g., auto, CPG) could weigh on spend. Regulatory scrutiny of digital advertising and competitive moves by walled gardens also remain structural risks, though TTD’s objectivity and open internet focus provide some insulation.
Forward Outlook
For Q3 2025, The Trade Desk guided to:
- Revenue of at least $717 million (14% YoY growth, or 18% ex-political ad spend)
- Adjusted EBITDA of approximately $277 million
For full-year 2025, management maintained a constructive outlook, contingent on macro stability and no major disruptions among large brand clients due to tariffs:
- Continued top-line outperformance and strong profitability expected
Management highlighted:
- Full Kokai adoption by year-end, driving further campaign performance gains
- Ongoing CTV and retail media momentum as key growth levers
Takeaways
Trade Desk’s Q2 demonstrates how AI-driven platform innovation and premium channel focus are enabling sustained share gains in a volatile ad market.
- AI and CTV Flywheel: Rapid Kokai adoption and CTV expansion are powering measurable client ROI and deepening competitive differentiation.
- Supply Chain and Data Assets: OpenPath and Sincera are raising the bar for transparency, efficiency, and publisher value, reinforcing TTD’s role as the independent DSP of choice.
- Macro and Execution Watch: Tariff-driven volatility and large advertiser exposure remain watchpoints, but operational discipline and enterprise focus position TTD for outperformance as programmatic adoption accelerates.
Conclusion
Trade Desk’s Q2 2025 highlights the power of AI-led innovation and premium open internet positioning to drive differentiated growth in digital advertising. With CTV and retail media outpacing the market and Kokai unlocking new client value, TTD is well-placed to capture incremental share—even as macro volatility persists among large advertisers.
Industry Read-Through
TTD’s results reinforce the accelerating shift of TV and retail budgets into programmatic, with AI-enabled platforms now setting the standard for measurable outcomes and supply chain transparency. The outperformance in CTV and the rapid adoption of advanced AI tools signal that independent DSPs with deep data assets and premium content access will increasingly win share from legacy insertion order models and walled gardens. For the broader ad tech sector, the arms race is shifting from access to intelligence and objectivity, with scale and trust as critical moats. Publishers and agencies should expect further consolidation of spend among platforms that can deliver both performance and transparency at scale.