Greetings. Welcome to the Trade Desk third quarter 2025 earnings conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, Chris Toth. You may begin.

Thank you, Operator. Hello and good afternoon to everyone. Welcome to the Trade Dusk third quarter 2025 earnings conference call. On the call today, our CEO and co-founder Jeff Green and Chief Financial Officer Alex Kayal. A copy of our earnings press release is available on our website in the Investor Relations section at thetradedusk.com. Please note that aside from historical information, today's discussion and our responses during the Q&A may include forward-looking statements. These statements are subject to risk and uncertainties and reflect our views and assumptions as of the date such statements are made. Actual results may vary significantly, and we expressly disclaim any obligations to update these forward-looking statements made today. If any of our beliefs or assumptions prove incorrect, actual financial results could differ materially from our projections or those implied by these forward-looking statements. For a detailed discussion of risks, please refer to the risk factors mentioned in our press release, and our most recent SEC filings. In addition to our GAAP financial results, we present supplemental non-GAAP financial data. A reconciliation of the GAAP to non-GAAP measures is available in our earnings press release. We believe that presenting these non-GAAP measures alongside our GAAP results offers a more comprehensive view of the company's operational performance. With that, I will now turn the call over to CEO and co-founder Jeff Green. Jeff?

Thanks, Chris, and good afternoon, everyone. Thank you for joining us today. As you've seen from our press release, we again posted strong growth in the third quarter. Revenue grew approximately 18 percent compared with Q3 of last year, and when excluding political spend compared to last year's Q3, our revenue grew by 22 percent. CTV remains our largest and fastest growing channel continuing to grow at a faster rate than our overall business the shift to biddable ctv is accelerating and we expect decision ctv will become the default buying model in the years ahead the advantages of decision buying compared to traditional programmatic guaranteed or insertion order models are so significant in terms of flexibility control and performance, that the choice for advertisers is becoming increasingly obvious. Retail media continues to scale rapidly as well, and we are seeing strong adoption across verticals as more shopper marketing budgets flow into programmatic and more retailers turn to us as their trusted partners. To begin, let's take a step back and provide some context about the state of our industry. So far, 2025 has been a year of innovation and change for our industry and our company. The change in landscape has created amazing upgrades to our business and our industry. Compared to last year, our TAM has grown significantly, including expansion from CTV and AI chatbots and growth in premium content. The supply chain is much more efficient, and our products have been enhanced with AI across the board the trade desk is adding more value than ever before but the changes of 2025 are much more interesting and significant when you consider how they will change the trajectory and opportunity for the open internet for the next several years a reminder the open internet is the portion of the internet where price discovery and competition exists on the open internet every transaction is arm's length, while gardens are built around owned and operated inventory instead of third party inventory. Price discovery comes when the buyer and seller are different entities. Of course, premium content is largely created by those who focus on content excellence. So the open internet is where the most loved content and the most premium content lives. Because the open Internet has continued to win more and more consumer time in places like premium TV, movies, music consumption in places like Spotify, live sports, and journalism, we continue to see a growing desire for the open Internet to get the first dollar of any media plan and also to get the lion's share of any media plan. Because advertising is about helping consumers feel something about a product, a service, or an opportunity. Using great video and audio ads are essential to most brand building, customer loyalty efforts, and all performance efforts, including performance TV. I contend that supply has always been greater than demand in digital advertising. And because it is so much easier to create more supply than it is to create a bigger marketing budget the supply growth continues this imbalance has grown steadily and as a result the market continues to strengthen for buyers it's a buyer's market all of this ripens the opportunity for the trade desk and the open internet in order for the open internet to grow faster than closed ecosystems that are mostly filled with user generated content and without price discovery the efficiency of competitive supply chains and the benefits of competition in time must work for the market and not against it. This shift has happened in 2025. To this end, AI is accelerating the improved effectiveness of the open internet. Of course, every significant AI innovation and AI product needs quality data. The most valuable data to an advertiser is their own conversion and customer data. We will win long-term because we built a business where buyers can own their future, which requires them to own, protect, and use their own data. AI is fast-tracking progress for companies that are eager to put their data to work and can leverage automation intelligently. Big brands are increasingly and rightfully leery of walled gardens as the AI-fueled future materializes. Advertiser and agency data is more valuable in this AI world than ever. It is also less defensible in the hands of our big tech competitors who are ridden with conflict of interest and have insatiable appetites to own advertisers' data. AI is accelerating the path to the open internet having vastly superior price discovery and fungibility. A world with better price discovery and 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 chat by 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 DB360. However, between 2019 and today, roughly all of the incremental dollars and growth from DB360 has gone to YouTube. YouTube 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 vivette 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 dollars 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 BitFactors, 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 COA. 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 TCD, 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 KoKai with nearly 85% using KoKai 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, KoKai 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. COCI has a number of features in it that are game changers for our clients and for the open internet. We've used 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 open path is an integration between ttd and a direct source of inventory open path plugs into options we trust it is a collection of clean pipes or connections that are directly into inventory we have grown open path by many hundreds of percentage points this year which means our clients are getting clearer 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 auction 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. deal desk 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 market 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 up fronts so far deals on deal desk 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 misrepresent it. 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 don't think I'm 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 Drax platform. OpenPath 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 auction. 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 open path 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 machine in both cases we're introducing agentic 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 agentic 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 U.S., business is growing significantly faster than the United States. Given that 60% of the TAM is outside of the U.S., 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%. Danone saw conversion rates go up by a third for their Actimel yogurt product, leveraging the retail data marketplace and omni-channel strengths of cocai spend under jbps are growing significantly faster open path has grown by many multiples in this year publishers like hearse are seeing a 4x improvement in ad fill rates and 23 revenue increase when integrating open path we are seeing enthusiastic interest in open ads we just launched open ads and 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 OpenPath and OpenAds, 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 walt 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 and 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, has 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 U.S. 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 percentage share of the business during the quarter while display represented a low double digit share and audio represented around five percent 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 Tradesk. 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 $0.45 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 TAMP, generate significant profitability and cash flow, 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 one 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 um 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 involving 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 that we'd get to talk about this, because I get this question a lot. Let me first just in companies 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 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 there's about 90 percent that is in sponsored listings at least in fact it's probably more like 95 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 to compete with google and it is driving nearly all now their second source of advertising revenue of course is prime video and from our calculations this is convinced that and this of course is competing with netflix and disney and paramount The Amazon advertising is about their impressive growth in owned and operated. 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 ad should we define? We define DSPs as buying platforms that are mostly about buying prime video and very little is buying the open. 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. Back of 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 sense. I 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 innovation. In 10 years, I don't think as we define it. I think they will have tools to buy in the future.

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 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. You know, 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. You know, secondly, internationally, we just continue to see lots of white space, as you you know, 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 today, 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 elves, 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 multi-part. 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 are you making your money near zero or a discount to 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 in nearly every helping them navigate in part the

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.

Thanks for the question. If we look back on the 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. 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 March. We've welcomed the new COO and the VAC Cundra. 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. leaders. Each of these new leaders, Vivac, Anders, Alex, each of the leaders they replaced were here for 10 years or more, and they got us to this. We would not be here without them. But as we look to the future, I want to make sure we share with you some of the things that we changed and what we're looking for in the future. Vivac's 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, we've had too many people servicing the exact same accounts, and now we've rolled out a more rigorous end-to-end global client. Workflows and meaningful, the creation of account plans for high-growth accounts 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 work and even into the c-suite this requires us to continually level up our talent both promoting to get closer to the strategy is working even more of our business as we go into next year that we're seeing across the group dramatically more than doubled its spend this year and in this case I credit that mostly with tighter 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, we're in a much stronger position than we began this year.

I'm Vasily Karasiev with Cannonball Research. Please proceed.

Thank you. Jeff, wanted to follow up 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 restructuring positioned you to benefit from those trends next year.

Thanks, Vasily. 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, CPG and then parts of retail are still feeling pressure. and inflation, and in some cases, it's also a cheap reach of user-generated content, and sometimes even more legacy than that, the cheap reach of linear TV. They do in measurement as well, forward-thinking brands, even parts of food and beverage and auto are leaning in and increasingly turning to us to deliver real business outcomes, not just about reach, but whether the metrics they're being given give easy answers that 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 objectivity perform the best including the efficiencies that we brought to the supply the struct are increasingly relying on independent parts that we've built i feel really confident couldn't be more excited about a world where advertising to the open internet birds that are easy and simple next question

comes from Jason Helstein with Oppenheimer. Please proceed.

Thanks. One for Jeff, one for Alex. Jeff, are you seeing an impact from Magentic 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 COCI adoption last year and some internal management issues you face 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 tip 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 1.7 trillion every single day

that means we're doing more when you look at that many of you'd have to likely do is make it so that there are fewer ads per page and that we actually create a little bit more of a healthy ecosystem continue to play the implementation will be nearly perfect anybody will be rational and that will create new advertising opportunities that will have really amazing.

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 Yousef Squally with Truist. Please proceed.

Thank you so much for taking the question. So, Jeff, it looks like closing arguments for the Google Entitrust lawsuits are in about 10 days, I think November 17. Can you maybe share your thoughts about potential fallouts for TradeDesk from that? What are you 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 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, the reason they do that is, and most of the money does not from owned and operated. That's the very reason why I think they'll look like, 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 advertising focus will look more like Facebook as they compete, you You know, YouTube versus other user-generated content destinations. I think that's what you can expect. Single biggest year in the company's history. Which of my three children are my favorites? It's just an impossible question to answer. But I will just highlight the Internet. It is coming ahead.

Okay. Thanks so much, Jeff.

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