The Trade Desk, Inc.

better open internet supply chains for the quality content will decrease the value of user generated content destinations and other similar apps and sites that are full of ads and unsafe content. Premium content and deliberate data-driven targeted buying is the only way for the biggest brands and advertisers to remain competitive. Nearly every big tech player in advertising Amazon, Apple, Google, Facebook, is primarily focused on expanding and monetizing their owned and operated inventory and content. Google is clearly focused on search, their AI chatbot Gemini, and YouTube. Amazon's primary advertising efforts are focused on growing sponsored listings and then secondarily on Prime Video. Both are putting Amazon owned and operated inventory first. Facebook continues to focus on monetizing Instagram and Facebook as destinations, and TikTok the same. None of these companies are focused on monetizing the open internet. This was helpfully made public throughout the antitrust trial of the Department of Justice versus Google when they revealed numbers that Google normally does not report on. Exhibits and industry experts estimated that in 2019, the open internet and owned and operated inventory on YouTube were equally split in share of wallet on DV360. However, between 2019 and today, roughly all of the incremental dollars and growth from DV360 has gone to YouTube. YouTube's spend increased by about 800%, while Google's buying of the open internet stayed essentially flat for the same period of time. During that time, the Trade Desk seems to have surpassed Google in the amount bought on the open internet, again, according to others. The industry is evolving at a rapid pace. However, no one is driving that change with more force or focus than the Trade Desk. With that backdrop, I want to focus today on three key areas of progress. First, let's walk through the foundational improvements and upgrades we've made across the company over the last year. Since March, we've welcomed a new COO, a new CFO, and a new CRO, who we just announced last week and began this week. Our COO, Vivek Kundra, has already driven operational progress and continues to improve our operations. Under his leadership, we've brought greater structure, discipline, and clarity to how we operate, streamlining our go-to-market organization, improving coordination across regions and teams, and instilling stronger operating cadences that enhance accountability and performance. While we've always been data-driven in running campaigns and servicing our customers, we're building a more data-driven culture that emphasizes measurable outcomes for our employees and consistent execution. These changes are helping us scale more predictably and efficiently while fostering a culture of ownership and operational excellence that will serve us well in the years ahead. Many of our largest clients are among the world's leading advertisers, and they operate at global scale, often through multiple agencies. To manage this complexity, we have put new systems in place so we can execute account plans with thoroughness and rigor. This rigor helps every part of our business, from our engineers who can identify key innovation opportunities as they ship product every week, all the way to our commercial services team who can help our clients take advantage of key opportunities as they emerge. Let me give you one example. One of the most influential data analytics companies in the world recently ran a competitive test between the trade desk and a major walled garden, which offered to run campaigns with zero fees. But because we're objective, data-driven, and focused on measurable outcomes, we won the opportunity, securing about $20 million more in incremental spend through the end of 2025. Last year, we spoke about investing more resources to pursue closer relationships with the biggest brands. We've seen incredible results from this effort. JVPs continue to grow significantly faster than non-JVP accounts. Importantly, we've grown our relationships with top brands while simultaneously creating more growth and stickiness for the agencies. I'm confident that with Anders Mortensen coming aboard as our new Chief Revenue Officer, we will continue to improve effectiveness of our go-to-market organization. I'm thrilled that he's joined the team. In fact, this week, he's become the latest executive to join our ranks from the likes of Google, Amazon, and Meta in recent quarters across all parts of our business. Anders will help us scale our sales effectiveness At Google, he was one of two executives who ran their ad business from a sales perspective. Anders oversaw their mid-market ad business, covering more than 5,000 advertisers and their agencies, and successfully grew that business at a pace that significantly exceeded broad market growth. Anders will help us continue to grow within our established client base, and he will also help us expand to a broader range of advertisers and agencies around the world. The second area that I'd like to highlight is the innovation we're delivering in our platform. This year has really been the year of innovation for us. We've launched some of the most market changing products that we ever have. And as you know, we have a track record of changing this industry with new product innovations. Prior to this year, over and over again, we've done things that people have told us we couldn't pull off. As a few examples, We weren't even one of the first 10 companies to get funding as a DSP, but we did it anyway. We launched bid factors, which proved to be a better system of targeting that was more expressive and enabled so many businesses to be built on our platform. That system also laid the foundation for an AI-powered platform. Also, nearly a decade ago, we were the first to move the third-party data market usage to a percentage of spend. We created the largest cookie pool for the open internet when our unified ID efforts were successful. Then Google changed the game with their war on cookies, and then we launched UID2. Now UID2 is the primary identity currency of ads for the open internet around the world. It's ubiquitous. This is similar for things like global placement ID and transaction ID. These are metadata standards for the open internet that have become standards because of our innovations and insistence. We've also enabled an entire ecosystem of innovation. Without our APIs and log-level reporting, there are entire categories of companies that wouldn't be viable. None of the walled gardens enable businesses like this. In 2018, we launched Koa. Our early focus on AI and machine learning has positioned us to upgrade our platform as the rise of AI tools has made upgrading our platform easier than any other DSP. At TTD, we are very focused and we have a very clear North Star. This is a race to create the best performing ads and the best competitive supply chain digital advertising has ever seen, and thereby win the trust and investment of the biggest advertisers in the world. Today, nearly all of our clients have tried Cochai with nearly 85% using Cochai as their default experience. When we build a new iteration of our platform, our primary goal is to deliver more value to our customers by increasing their performance. By this standard, Cochai is the best upgrade we have ever made to our product, relative to all previous versions and certainly relative to Solomar. Campaigns that have switched to Kokai are seeing impressive results. Since its launch, Kokai has delivered, on average, 26% better cost per acquisition, 58% better cost per unique reach, and a 94% better click-through rate compared to Solomar. These are incredible performance improvements on top of what was already considered the most performant DSP in the world. has a number of features in it that are game changers for our clients and for the open internet. We use the industry's most advanced AI to enhance our system with an architecture we call distributed AI. We break down every function and create separate AI models for each of them, from valuing impressions, to managing identity, to choosing supply paths, to predicting a price required to clear, and to forecast the performance and reach of a campaign before a single dollar is even spent. This effort to distribute allows us to parallelize all AI efforts and enables checks and balances between these disparate functions. It cannot be overstated how much AI has changed and will change our business and the open internet. This year, we've launched and grown several products that are solely focused on substantially upgrading supply chains so that buyers get more for their money. OpenPath is an integration between TTD and a direct source of inventory. OpenPath plugs into options we trust. It is a collection of clean pipes or connections that are directly into inventory. We have grown OpenPath by many hundreds of percentage points this year, which means our clients are getting clear views of exactly what they're buying, and publishers have a clearer sense of what advertisers are willing to pay when they describe their inventory in a transparent and accurate way. Open ads is an option that we develop and sometimes host as an option for publishers. We then bid into a fair auction and even enable other buyers or DSPs to do the same thing too. The market needs a healthy auction and some sell side players have continually weakened the integrity of the auction. So we're developing an open source auction that raises that bar. We just launched it and we're already working to integrate with more than 20 of the biggest publishers on the web. We expect this to dramatically improve the supply chains of mobile in-app ads and browser-based ads, which of course can use the help in an AI scraping world. PubDesk is improving the supply chain by publishing data for the sell side. Resellers, sellers, and publishers can log into the platform and see what we paid the supply chain, what signals we value, and adjust their sites and inventory to get more. This is largely fueled by the Sincera team and data that we acquired earlier in the year. DealDesk is a better way to manage one-to-one deals. Not only does it facilitate the buy, but using AI, it predicts how a deal will perform relative to the open markets. This product enables them to do deals, but also gives them the unprecedented data and tools to avoid bad deals. It is important to note that this product will be foundational to a healthy forward market that can replace the outdated upfronts. So far, deals on DealDesk are performing about 35% better than those running on Solomar, which is more similar to the way they run everywhere else in the programmatic ecosystem. Digital advertising supply far exceeds demand. It always has, and frankly, it always will. That dynamic makes digital advertising a true buyer's market where advertisers have unprecedented choice. At the same time, because Google has historically made it almost impossible for most SSPs to do true yield management, many tech players on the sell side of advertising that sit between us and content owners have been incentivized to duplicate their ad inventory, obfuscate it, or sometimes even misrepresented. As advertisers increasingly gravitate to the premium advertising opportunities that are consistent with their brand, they want better tools to be able to distinguish between premium ad environments and ensure that their ads are not being placed on recipe sites with 20 different ads popping up for competing users' attention. I'm not making against recipe sites, but I found recently that this example reminds people of how much room there is to actually creating better ad experiences. Key to this is the auction. A clean, credible auction ensures that advertisers can understand exactly what they are buying and value it appropriately. Many of the largest premium publishers run their own auctions, such as Disney with its Drafts platform. Open Path connects directly into many of these premium publisher auctions, and companies like Disney Do this because they want to ensure that their premium inventory can be correctly assessed and valued. A healthy auction is not an inherently sell side or buy side consideration. It sits in between as the referee between the buy side and the sell side. And in order to have a healthy marketplace, both sides have to trust the auction. In order to establish that trust, we started with the open source version of the pre-bid auctions. Then we innovated and made it better to ensure it contained some key elements such as transaction ID and a Sincera signature to better reduce duplication and detect obfuscation by sellers. We will open source key elements of open ads and we will expose its mechanics for review. Just like recent innovations such as UID2 or OpenPath or Ventura, our intent here is to incentivize a more transparent competitive marketplace for all. In Q4, we announced three additional product features and upgrades that will be some of the most significant contributors to our growth for years to come. The first is a system upgrade, and the other two are product launches. We have overhauled our data marketplace. We have reviewed the mechanics, incentives, and market dynamics over our third-party marketplace and made significant upgrades. The result is a more competitive AI-driven marketplace with more data, more data segments, and more reward for those who bring quality to the market. Second, we're introducing trading modes. This is a bit like driving modes in a car where the user can decide how they would like to engage with the system. Would they prefer to have control where they have more decisions and a greater burden of work? Or would they prefer to simply optimize the performance and lean on the machines? In both cases, we're introducing a GenTech AI as a co-pilot to ensure optimal campaign performance. But its role and engagement will differ based on the trading modes. This new feature will accelerate the adoption of a GenTech AI in our platform. And third, in Q4, we introduced a new product called Audience Unlimited. This enables our users to use third-party data for a single fee. And that single fee will make it easier for them to layer on much more data and improve the efficacy of their campaigns. The third area that I'd like to cover is the momentum we're seeing in our business as we close out 2025 and prepare for 2026. Since our last earnings call, I've spent much of the time on the road. I hosted 11 trader town halls with programmatic traders at our top agencies and brands in various cities around the world. I've met with dozens of major client CMOs and many of the world's leading publishers. What is clear across all of these communities is the confidence that everyone has in the potential of the open Internet. We maintain that the independent and objective DSPs will have the majority of open Internet spend at end state. Today, all of our biggest competitors are conflicted, so it is ours for the taking. There are so many places that we are seeing progress. Here are just a few of them. Our research shows that the average consumer now spends two-thirds of their digital time on the open internet, even though most budgets today still go through Facebook, Google, and TikTok. This imbalance will correct over time. Outside the US, our business is growing significantly faster than the United States. Given that 60% of the TAM is outside of the US, this movement is in the right direction of capturing the TAM. Audio has become one of the fastest growing channels as consumers spend an average of three hours a day listening to their favorite music and podcasts. Bayer recently added Spotify to their omnichannel campaigns on Kokai and saw 15% growth in their incremental reach. Adoption of Kokai is driving significant performance improvements for our clients. Specsavers in the UK saw a 43% reduction in the cost of securing customer appointments using Kokai. while also cutting the conversion time by almost 50 percent. Denone saw conversion rates go up by a third for their Actimel yogurt product, leveraging the retail data marketplace and omnichannel strengths of Kokai. Spend under JVPs are growing significantly faster. OpenPath has grown by many multiples in this year. Publishers like Hearst are seeing a 4x improvement in ad fill rates and 23% revenue increase when integrating OpenPath. We are seeing enthusiastic interest in open ads. We just launched open ads and we already have 20 publishers committed to integrating. On the supply side, SSPs such as Pubmatic are integrating with DealDesk using the new price discovery provisioning API that helps sellers better understand and identify how sellers can increase the quality of their inventory. The injection of AI into our supply path optimization is finding better paths to publishers with double digit percentages of efficiency. To bring this to a close, I just want to reiterate that we are building our business for the long term. The upgrades we've made to our company over the past year put us in the best possible position to execute on the opportunities that are right in front of us today and continue to scale and lead the open internet in the years ahead. I want to share a few of the principles that we've had for a very long time that continue to be critical to us continuing to lead the open Internet. First, we will always only represent the buy side of digital advertising. Everything we do that interacts with the supply side, such as open path and open ads, is intended to drive better signal and a more transparent marketplace for our advertiser and agency clients. but we are hopeful that they also drive efficiencies that benefit the entire ecosystem. Second, the digital advertising market will inevitably bend towards efficiency. Every market does over time. It's just a question of how fast we get there. There are still some in our industry who will say things like, why shouldn't I be allowed to duplicate or hide aspects of what I'm selling? Over time though, the survivors and the thrivers will be those who figure out how to win in a fair fight We will always be advocating and advancing a fair fight wherever we can. And last, the open internet offers compelling value in contrast to walled gardens. The open internet is where most consumers spend most of their time. It is where they engage with the internet's most premium content. Advertising on the open internet is not the same as advertising in a walled garden. On the open internet, an advertiser gets to select ad impressions across all opportunities. with objectivity and efficacy. It's not possible in a walled garden or using a walled garden DSP. For most marketers, these are two very different value propositions. The work we do in any of these areas is not easy, let alone all of them. But that's our mission. We know that transparency, objectivity, and innovation drive performance for us. But more than that, we know they are essential for our clients. and we're just getting started. I've never been more excited about the road ahead. And with that, I'll hand it over to Alex to walk you through the financials.

Thank you, Jeff, and good afternoon, everyone. I'm honored to be speaking to you as our CFO. It's been an incredible few months working closely with our leadership team and our world-class finance organization. I have even more confidence in our business today with the outstanding team that we have in place, and I'm grateful that they have made my transition so smooth. When I first met the Trade Desk 13 years ago, the company was generating less than $10 million in annual revenue. Over that time, I've been grateful to serve on our board of directors over two distinct periods. As I reflect on the journey over all those years, what strikes me most is how much opportunity still lies ahead, which is exactly why I chose to step into this role. My priorities as CFO are clear. Help grow the Trade Desk's share of the $1 trillion advertising TAM as more dollar-shifted programmatic, identify and prioritize the right investments to expand our leadership position, convert that growth into durable, long-term free cash flow through disciplined operating leverage, and lastly, ensure our business remains tightly aligned with agencies and advertisers over the long term. I am bringing a growth mindset to my role as CFO here. Our focus on profitable growth means that we can invest to ensure we're always innovating and delivering premium value to our clients. As our TAM expands and given the AI opportunity, I am working with our team to take a fresh look at every aspect of the business so we can make the right investments and further accelerate our flywheel. That includes evaluating how innovation investments fuel growth, how we go to market, how we structure incentives in the organization, and how our products and features are being adopted in creating value. We are already leading the way here with all the product innovations we've announced in the last quarter. The Trade Desk is uniquely positioned with a large and growing addressable market, a differentiated market position anchored in objectivity for advertisers, strong secular tailwinds, the best technology and ad tech, and a business model built to deliver highly profitable growth. I believe the power of the open internet, combined with the foundational improvements the company has made throughout 2025 across leadership, operations, and engineering, have strengthened our position for the long term. Across the company, and as you've heard from Jeff, we see significant opportunities to drive outsized growth, and we are committed to doubling down on those areas. With that, let's go through the numbers. In Q3, we delivered revenue of $739 million, representing 18% year-over-year growth. Excluding political spend related to last year's US elections, revenue increased approximately 22% year-over-year. Our strong performance in Q3 reflects our continued capture of incremental advertiser wallet share among large global brands during this period. With the strong top-line performance in Q3, the Trade Desk generated approximately $317 million in adjusted EBITDA, or about 43% of revenue. CTV has been consistently growing at a faster rate than the overall business, which was the case again in the third quarter. Video, which includes CTV, represented around 50% of our business in Q3 and continues to grow as a percentage of our channel mix. Mobile represented a low 30% share of the business during the quarter, while display represented a low double-digit share, and audio represented around 5%. Over time, I expect CTV and audio will grow as a percentage of mix, fueled by the premium authenticated nature of these channels. With supply significantly outstripping demand in our industry, our clients can be very deliberate in which ad impressions they select, which means those authenticated audiences become more attractive, especially in an objective buying platform like the Trade Desk. Geographically, North America represented 87% of our business in Q3, and international represented about 13%. Our strong momentum in both EMEA and APAC is a reflection of the investments we have made in these regions over the last several years. Our growth across our international business continues to outpace our growth in North America. Among verticals that represent at least 1% of our business, we saw particularly strong growth in medical health, automotive, and the technology sector. We have been making a concerted effort to continue to diversify our business across a larger number of verticals, and we are seeing major client wins in verticals such as insurance, financial services, and telco, for example. Q3 operating expenses, excluding stock-based compensation, were $457 million, up 17% from a year ago. During the quarter, we continued to make investments in our team and platform, particularly in areas like platform operations. Income tax expense was $64 million in the third quarter, driven primarily by our profitability and stock-based awards. Adjusted net income for the quarter was 221 million or 45 cents per diluted share. Net cash provided by operating activities was 225 million and free cash flow was 155 million in Q3. DSOs exiting the quarter were 92 days of three days from a year ago. DPOs were 77 days of three days from a year ago. We ended the quarter with a strong cash and liquidity position. Our balance sheet had about 1.4 billion in cash cash equivalents, and short-term investments at the end of the quarter. We had no debt on the balance sheet. In Q3, we used $310 million of cash to repurchase our Class A common stock via our share repurchase program. Going back to our first authorization in 2023, the company has repurchased nearly $2 billion through our repurchase program, effectively offsetting dilution and reducing shares outstanding over that time. In October, we deployed the remaining amount from our January authorization and the Board of Directors' subsequently approved a new authorization of $500 million. We have a strong balance sheet and will continue to evaluate opportunistic repurchases as part of our capital allocation strategy. For Q4, we expect revenue to be at least $840 million. Excluding the benefit of U.S. political outspend in Q4 of 2024, our estimated growth in Q4 of this year would be approximately 18.5% on a year-over-year basis. We estimate adjusted EBITDA for Q4 to be approximately $375 million. As we look toward 2026, we remain well positioned to grow our share of the advertising TAM, generate significant profitability and cashflow, and deepen the value we're delivering to advertisers. The Trade Desk sits squarely at the forefront of CTV transformation, a powerful application of AI, the expansion of retail media, and the proliferation of programmatic buying internationally. With these structural growth drivers and our focus on operational rigor at scale, we believe we've never been better positioned to capture the massive opportunity ahead across the open Internet and advertising more broadly. I look forward to engaging more with our customers, partners, and our shareholders in the months and years ahead. I'm also more confident than ever that we have the right team in place to capitalize on this moment. That concludes our prepared remarks. Operator, please open up the call for questions.

Thank you. At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. Once again, please press star 1 if you have a question or a comment. First question comes from Sean Patel with SIG. One moment. SIG.

Hey, guys. Thank you. Congrats on the nice quarter. I have a question for Jeff and then one for Alex. Jeff, this is a multi-parter. Some have interpreted your past comments as if you don't see Amazon as a competitor. Can you maybe just talk about that, clarify that a little bit? And then also, from your perspective, how do you see the competitive environment evolving as companies like Google and Amazon try to evolve their DSPs You know, won't they just price everything at zero to take share, kind of like we're seeing right now with Amazon? And then for Alex, Alex, you bring a pretty unique perspective to the role. You know, as you've gotten deeper into the business, you know, over the past, you know, several weeks, what are the top two or three areas where you think you can drive the most impact over the next couple of years? Thank you, guys.

You bet. Thanks, Sean. Really appreciate the question. Honestly, I was hoping that we'd get to talk about this because I get this question a lot, especially in the last couple months. So I'm happy to explain. Let me first just acknowledge that Amazon and Google are amazing companies and some of the greatest success stories in the history of the Internet and certainly in tech as well. And Amazon has done an amazing job in advertising in recent years. But I think it's worth taking a minute to double click and look at what they're doing. This year they'll do, if we're just using very round numbers and back of the napkin math, about $70 billion-ish in advertising. From all of our market triangulation, there's about 90% that is in sponsored listings at least. In fact, it's probably more like 95% plus. So sponsored listings in my view are competing with Google search and even the emerging AI search. And of course, we're not building the Google search competitor. Amazon's primary advertising efforts are to compete with Google. And it is driving nearly all of their revenue and all of the growth in advertising. Now their second source of advertising revenue, of course, is prime video. And from our calculations, this is a couple billion dollars at most. And I'm convinced that that's quite a bit less than, of course, that 10% of their total advertising. And this, of course, is competing with Netflix and Disney and Paramount and all of the streamers. So while their advertising growth rate is really impressive at this scale, and I do think they have an amazing advertising story, the Amazon advertising story is about their impressive growth in owned and operated ad inventory. Then there is a very distant advertising priority, which is their DSP. Now to be clear, our DSP has pointed at one of the biggest questions in advertising. What ads should a brand or advertiser or agency buy on the open internet? And if it were up to me, we would define DSPs as buying platforms that buy the open internet. Amazon's DSP is mostly about buying prime video and very little is buying the open internet. Our estimates are that low single digits are in their DSP and a small percentage of that is pointed at decisioning the open internet. It's either prime video or non-decision buying like programmatic guaranteed. So to me, again, back to the napkin, 97, 98, 99% of advertising efforts are about monetizing owned and operated inventory and what's left goes to the open internet. In advertising, Amazon first competes with Google, and then it competes with Netflix and Disney. Very little time and money is competing with us. So the reality is we're playing in a very different sandbox. Our focus is in decision, data-driven buying across the open internet, especially in high growth areas like CTV. And I would argue that we deliver capabilities that they just can't match, things like UID2 for identity, deep integrations with retail data, third-party data marketplaces, all the things that we talked about in our innovations earlier in the call. In 10 years, I don't think Amazon has a DSP as we define it. I think they will have tools to buy owned and operated, and they play in advertising the way that Facebook does today and the way that I think Google likely will in the future. So now let's move to the second part of your question.

Yeah, thanks so much, Sean. So, you know, taking a step back, I'm really excited about the size of our TAM and the opportunity that I see ahead. And that's particularly true as we see the open internet just growing in importance. And the fact that clients globally are really finding more value in an objective platform like ours. So as I look ahead, our focus is very much on growth right now. And I would say there are two areas in particular where we're spending a lot of time. First, You know, we just want to be really disciplined on where we allocate resources, really to drive the greatest ROI for us as a business. We're very fortunate to have a leadership position. We have a thriving ecosystem. You know, we've made a number of fundamental product innovations, which you've heard about today, and we're leading the way with AI. So we just want to capitalize on this momentum as we keep fueling that ecosystem and that flywheel. And secondly, we really just want to be more metrics-driven in every aspect of the company as we drive more rigor to help us scale. Maybe I'll give you just a couple examples of how this shows up. Number one, on the go-to-market side, we're reevaluating how sales incentives and compensation structure really exist to better align with our long-term growth drivers as we plan for this next phase of growth. Secondly, internationally, We just continue to see lots of white space, as you heard. Our growth there continues to outpace North America. And so we're excited about the success we're having there. And finally, if you look at our success to date, a lot of it has been in some of the largest advertisers of the world. And so we see a big opportunity to go after the mid-market or the emerging Ls, as we call them. Especially, by the way, as AI really opens up new frontiers for us there. And so hopefully that gives you a flavor for some of the key focus areas for us right now. But I would say our goal ultimately is to make the right investments for the long-term durability while also continue to win market share.

Sean, let me also just answer the other part of your question that you directed towards me. By the way, extra points for the multi-part question. I just wanted to also answer the part about don't they eventually move the rate to zero? I actually love this question as well in part because when we were on the IPO Roadshow, I remember getting into a discussion with a very large room full of people where one of the, in my view, one of the smarter PMs on Wall Street asked the question, doesn't, in the end, Google just kick your ass because they can price it at zero? And I'll answer it now the exact same way that I answered it then, which is something to the effect of I hope they do eventually price it at zero because it'll be easier to point out then the problem of advertising today. Google doesn't break out the money they make from their DSP buying the open internet because the Google P&L, this isn't material on the Google P&L. They make their money in other ways. So pricing the DSP at zero will inspire the question, is this a trick? If you make the DSP zero, where are you making your money? In my opinion, DSPs that price it near zero or at discounts that get close to zero only do that because they're primarily selling owned and operated inventory that has a cost of goods sold of near zero, and that's where they make the money. So when we orient the conversation around price, I think it's a trap for us and the buyers. If we orient the conversation around value, we win nearly every time. And I would argue that advertisers are getting smarter And they're asking the tougher questions and we're helping them navigate in part because we have objectivity. And I would argue that no other DSP has that. Either they don't have scale or they don't have objectivity. Thanks for the question, Sean. Next one, John.

The next question comes from Justin Patterson with KeyBank. Please proceed.

Great. Thank you. Jeff, you've made a lot of important changes across the organization this year. As we approach the end of 2025, could you walk us through some of the more impactful changes in talent where you see some green shoots and then what areas in the organization you believe still need some more work? Thank you.

You bet. Thanks for the question. If we look back on the trade desk three to five years from now, I believe one of the defining themes of 2025 will be the changes that we've made across the company to take the company to the next level. Right now, we're focused on strengthening our foundation so that we can lead well into the future. This year, we brought on new leaders, of course, to bring on the next phase of growth. Since March, we've welcomed a new COO in Vivek Kundra, a new CFO in Alex Kayel, and most recently, a new CRO in Anders Mortensen. We also changed our inventory and supply-side partner management. Of course, our chief commercial officer, Tim Sims, left earlier in the year. And the operational portion of his org moved to the VAC and the BD portion moved to one of our amazing leaders, Will Doherty, our SVP of inventory development. Each of these new leaders, the VAC Anders, Alex, Will, bring critical experience to help us scale with rigor and discipline to the next phase of growth. Each of the leaders they replaced were here for 10 years or more. And they got us to this point. And for that, we are very grateful. We would not be here without them. But as we look to the future, I want to make sure that we share with you some of the things that we've changed and what we're looking for in the future. Under Revex leadership, we've introduced stronger structure and cadence across the company. And this includes how we run the business day to day, how we go to market, and how we align the teams and become more rigorous. We've streamlined our go-to-market organization and improved cross-regional coordination. In the past, we've had too many people servicing the exact same accounts, and now we've rolled out a more rigorous end-to-end account planning, especially with our larger global clients, who often operate across multiple agencies and markets, and we're already seeing the impact of stronger international growth and more consistent execution. But some of these efforts are already showing results. First, we've leveraged automation and AI to drive productivity. We've automated some workflows with our traders and AMs, and that's enabled us to be more proactive in client reactions. Second, we shared earlier in the call that JBPs outperform the rest of our business. So of course, we're focused on strengthening the JBP pipeline and its execution. Last quarter, we had over 180 live JBPs with some of our largest clients. We have an additional 80 JBPs in the pipeline right now worth billions of dollars in total. We've been driving IC-level accountability with BD, AM, and trader scorecards. As a result of those accountabilities alone, we believe that that's contributed to CPMs declining by up to 43% on average and resulting in meaningful return on ad spend improvements. We've upgraded operating rhythm and quarterly operations reviews, weekly pipelines and spend reviews. We standardized the creation of account plans for high growth accounts. And this rigor is also pointed at incremental billions. As you know, we're getting closer to the budget decision makers and as programmatic and the open internet becomes more and more central to a marketing plan, decision making in brands and agencies is moving up the marketing org, and even into the C-suite. This requires us to continually level up our talent, both promoting from within and hiring from outside. Where historically at times we've under-invested in brand relationships, this is why back in February I said we were investing in senior level business development and account management to get closer to the brands. That strategy is working. And today, joint business plans now make up about half the business. And as you can tell from that pipeline, we're in a great position for that to be even more of our business as we go into next year. This is somewhat indicative of the green shoots that we're seeing across the board in our company. Our culture is becoming more accountable and more aligned. Our internal coordination has improved dramatically as we continue to scale. One large healthcare brand, for example, has more than doubled its spend this year. And in this case, I credit that mostly with tighter internal coordination. That said, we know there's still a lot more to do. We're continuing to invest in training and internal tooling in systems that will ensure consistency and excellence across every team in every region. But as we close out 2025 and head into 2026, we're in a much stronger position than we began this year, and we're excited about the road ahead. I really appreciate the question about this one. Thank you. Thanks, Justin.

Next question comes from Vasily Karashev with Cannonball Research. Please proceed.

Thank you, Jeff wanted to follow up on your on what you said in your prepared remarks about 2026. Can you tell us maybe what you're seeing in terms of broader advertising and macro environment? If there are any trends that you see that you know will benefit the trade desk next year and how your how your restructuring positions you to benefit from those trends next year. Thank you.

Thanks, Vasili. Appreciate the question, as always. Well, first, as you can see from the strong print, we're seeing really strong momentum across our business and as we close out the year. At a macro level, I describe the environment as a tale of two cities. On one hand, some large brands, particularly in categories like consumer products or CPG, and then parts of retail, are still feeling pressure from factors like tariffs and inflation, and in some cases, It's also a legacy mindset around advertising that still leans on cheap reach of user-generated content and sometimes even more legacy than that, the cheap reach of linear TV. Some have a very difficult job to do in measurement as well because much of their purchases are done offline or in physical stores, shops, dealerships, or restaurants. But at the same time, we're seeing a growing number of forward-thinking brands outperform. Categories like financial services, healthcare, insurance, even parts of food and beverage and auto are leaning in to data-driven marketing and embracing measurement and increasingly turning to us to deliver real business outcomes. We're seeing a noticeable shift in how brands are scrutinizing the walled gardens. And this is in part because CMOs are under more pressure than ever from their CFOs. And many are asking tougher questions. not just about reach or impressions, but whether the metrics they're being given actually map to business results. Waldgardens give easy answers that don't satisfy CMOs nearly as easily as they once did, certainly not as easily as they did 15 years ago. And that's in part because CMOs, CEOs, and CFOs of the biggest brands and the biggest agencies are looking for real growth. And the open Internet our platform and objectivity are critical to their futures that's where we perform the best and that's exactly what we're trying to do in all of our efforts. Including the efficiencies that we brought to the supply chain through innovations like open path open ads and pub desk all of these products are built in service of brands and agencies and leaning on our alignment with the buy side. so that we can preserve that objectivity that will take us well into the future. I can't emphasize enough the structural shift that is going on right now. There is more of a buyer's market at this moment than we've ever seen before. Large CCB content owners and all other forms of publishers for that matter are increasingly relying on independent partners like the Trade Desk to win. In fact, for most of them, we are the single largest source of third party demand worldwide. So yes, there are some softer pockets in the market for some of the large brands. But when I look at the trends, the innovation, and the partnerships that we've built, I feel really confident about where we're heading. I couldn't be more excited about the road ahead as we move into 2026. And I look to a world where advertising dollars go to the open internet first and are avoiding systems that are easy and simply grade their own homework. So I really appreciate the question. Really excited for 2026. Thanks, Zoe. Thank you.

The next question comes from Jason Helfstein with Oppenheimer. Please proceed.

Thanks. One for Jeff, one for Alex. Jeff, are you seeing an impact from a genetic search on available publisher inventory, and how are you helping publishers navigate that and basically AI? And then for Alex, I look forward to working with you. So in the fourth quarter, your comping issues the company had with the Cochai adoption last year and some internal management issues you faced, Despite this, the revenue guide, I think, is a three-point decel ex-political on a seven-point easier comp. And so maybe that's kind of maybe a little surprising. So are you seeing anything specifically that's giving you concern around 4Q, maybe macro or something else? Thank you for the two.

Thank you very much. I'll try to keep my brief so I can give a little more time to Alex. So we look at roughly 20 million ad impression opportunities every single second. That's about $1.7 trillion every single day. That means we're doing more transactions than Visa, MasterCard, and American Express put together. What they do in a year, we'll do in less than 30 seconds. So when you look at that many impressions, and just to be open, we buy a low single-digit percentage of that total. You'd have to when it's that big. So that means that if we take 20 million down to 15 million per second, because of AI, there's not really much different about our business model. Nothing at all. In my opinion, what that will likely do is make it so that, uh, there are fewer ads per page and that we actually create a little bit more of a healthy ecosystem than what we have today with the supply outnumbering the demand by so much. So I actually see whatever effect the AI search world is having on inventory supply, given that I've said over and over again in this call that there's more supply than demand and it is more of a buyer's market than ever. Whatever effect it's having on it, first of all, is fairly de minimis as it relates to the open internet at large. We shouldn't define the open internet as just what happens in a browser. It is much bigger than that. It's everything that happens in CCTV, movies, sports, journalism, everything. And that's both in an app and in a browser. That's in every form of media that touches the internet. If you look at it from that perspective, I don't think it's had any meaningful effect. And because I don't think CTV is going anywhere. I don't think music is going anywhere. I don't think sports is going anywhere. I think that the premium open internet will continue to play the most significant role and building brands and doing actual advertising. And I don't think that AI will change that. I do actually think that there will be more search life inventory available, which I think is really premium advertising opportunities. In the past, companies like ours have not had access to companies like Google's at inventory as it relates to search. I think in a world where that's much more competitive and there isn't a winner take all outcome, which I don't think there will be, I think there's going to be a bunch of opportunities for us to buy into their inventory. And I think it will actually look a lot like CTV in the sense that fragmentation will be nearly perfect in the sense that there are enough players that there's competition. and that no one is big enough to have a monopoly or be draconian, but it's consolidated enough that everybody will be rational and highly competitive, and I anticipate that that will create new advertising opportunities that will have really amazing results and efficacy. I said I'd keep it brief, so I'll shut up and let Alex talk about the next one.

Thanks, Jason. I appreciate the detailed question and also very much looking forward to working together Maybe to start with Q3, you know, as you heard, we felt like Q3 was a really solid quarter with us growing about 22% ex-political spend, you know, compared against Q3 of last year. Looking ahead and addressing Q4, you know, excluding political, we're guiding to approximately 18.5% year-on-year growth. You know, you can factor political last year was about five percentage points of that. And we just continue to see strength in decision TV and retail media. You heard me talk about the opportunity outside North America, which is also growing very nicely. You know, the JVP commentary that Jeff provided where we're just really encouraged by the commitment these large brands are looking to make with us. And we just have such a diversified set of industries that we support today as more and more customers just resonate with our platform and our positioning. So overall, there's no change to our guidance philosophy. You know, our outlook is really grounded in the trends we've observed so far in October and November, and we feel good about the guide. But thank you for the question. Thanks, Jason.

This question comes from Yusef Squally with Truist. Please proceed.

Awesome. Thank you so much for taking the question. Jeff, it looks like closing arguments for the Google Entity Trust lawsuits are in about 10 days, I think November 17. Can you maybe share your thoughts about potential fallouts for Trade Desk from that? And how are advertisers you're talking to getting ready for the potential change in the industry from that? And just one quick follow-up. You've cited many new products, new prepared remarks. If you had to focus on one or two that should have the biggest impact impact in the, call it 12 to 18 months, what would those two be? Thank you.

You bet. So first as it relates to the outcome of the Google trial, let me just keep it high level because there's a whole bunch of game theory and we could talk through if they move here, we move there, all of that sort of stuff. But let me just say this. I think there is no scenario where Google doesn't back away from the open internet to some degree. And the reason they do that is because most of their antitrust problems have come from draconian moves that they've made in the open internet. And most of the money does not come from the open internet. It comes from owned and operated. That's the very reason why, when I talk about what I think they'll look like in 10 years, I think it's much more focused on owned and operated inventory in part Because they have a cost of goods sold that is so low, especially on YouTube, that that will continue to be their focus and that their, their advertising focus outside of search and AI will look more like Facebook as they compete, you know, YouTube versus other user generated content destinations. I think that's what you can expect from them in part, because this has brought on so much burden for them. Uh, and they will just go slower irrespective of the actual remedies or, or, or, or ruling. Um, uh, and then the, what was the second on the product? Oh, and the product said, yeah, sorry. Uh, the, on the product side, honestly, there are so many products that we're talking about right now that I am really excited about. And I actually believe this has been the single biggest year of innovation for us in the company's history. So asking me to pick which one is a favorite is a little bit like asking me which of my three children are my favorites. It's just an impossible question to answer. But I will just highlight that I believe Kokai is the best platform we've ever pointed at the open internet. It is doing amazing things and continues to get better and better. Some of the things that I'm most excited about adding on to it that we have in the last few months Number one, DealDesk, which is going to really lay the foundation for an amazing forward market in the future. I also think our trading modes, which make it so that we service different types of customers and will really lay groundwork for us creating even more unique interfaces for different types of users well into the future. I think Audience Unlimited may be one of the most significant innovations that we've ever made in the history of the company that will have huge implications into retail and some of the things that are coming ahead as it relates to retail and measurement and others. Those are a couple of the highlights. I feel like I'm leaving things off, to be honest. But those are some of the highlights that I'm most excited about.

Okay. Thanks so much, Jeff. Thank you.

Thank you, Seth.

Okay. This concludes the question and answer session. This concludes today's conference call. You may disconnect your lines at this time and have a wonderful day. Thank you.