To The Moon

$Trade Desk Inc.(TTD)$ is scheduled to report its fiscal Q3 2025 earnings after market close on Thursday, November 6, 2025. Here is an analysis of the expectations, key metrics, and short-term trading considerations.

Consensus Estimates & Company Guidance

The market consensus suggests continued revenue growth, though the year-over-year comparison is slightly complicated by political ad spending in the prior year.

Crucial Context: TTD management noted that excluding the benefit of U.S. political ad spend in Q3 2024, the expected revenue growth rate for Q3 2025 would be approximately 18% year-over-year. This higher comparable growth rate is important for assessing the core health of their business.

Summary of The Trade Desk (TTD) Fiscal Q2 2025 Earnings

The Trade Desk reported its fiscal Q2 2025 results on August 7, 2025, with a mixed reaction from the market. While the headline numbers largely beat expectations, the forward-looking guidance triggered a sharp sell-off, highlighting a key lesson for investors in high-growth, high-valuation stocks.

Q2 2025 Financial Highlights (Period Ended June 30, 2025)

Key Business Commentary:

Platform Strength: Customer retention remained extremely high (over 95%).

Key Growth Segments: Growth was strong in Connected TV (CTV) and Retail Media, reinforcing their position in these critical areas.

Kokai Adoption: Over 70% of spend was flowing through the new AI-powered Kokai platform, with management reporting significant performance improvements (e.g., lower costs per conversion).

The Lesson Learned from Q3 2025 Guidance

Despite the Q2 beat, the company's guidance for the third quarter was the primary catalyst for a significant post-earnings stock drop (with shares plunging around 30% in pre-market trading).

The Lesson Learned for TTD Investors:

The major takeaway is that growth rate deceleration in guidance, even when numerically beating consensus, is a significant trigger for a sell-off in a premium-valuation stock.

Deceleration Spooks Investors: The Q3 revenue guidance of approx 14% year-over-year growth (even after excluding political ad spend, the growth was approx 18% represented a clear slowdown from the Q2 growth rate of 19% (or 20% excluding political spend). For a stock priced for high growth, any perceived deceleration is interpreted as a sign of macro weakness or competitive pressure impacting the core business.

Premium Valuation Penalties: TTD trades at a high valuation multiple based on its long-term market leadership and high growth. When the growth rate is cut or expected to slow, even slightly, investors rapidly re-rate the stock lower to account for a less aggressive future growth trajectory. The guidance, while not disastrous, was interpreted as "just good enough," which is not enough for a premium-priced stock.

Margin Scrutiny: The slight decline in the Adjusted EBITDA margin (from 41% to 39%) added to investor unease, raising questions about the company's operating leverage as it invests heavily in platform innovations like Kokai and OpenPath.

Confluence of Negative News: The simultaneous announcement of the departure of long-serving CFO Laura Schenkein introduced an element of leadership uncertainty, which, when combined with the decelerating guidance and margin pressure, created a "perfect storm" for a sharp correction.

In essence, the lesson is that for high-multiple, high-growth technology stocks, the quality and acceleration of forward guidance can matter far more than the absolute beat on current quarter earnings. The market reacted not to where TTD was (Q2), but where it guided to be (Q3).

Key Metrics Investors Should Watch

Investors and traders will be scrutinizing the following metrics for signs of business acceleration or deceleration, particularly given the current macroeconomic uncertainties affecting the digital advertising market.

Connected TV (CTV) and Video Growth:

Focus: CTV is TTD's fastest-growing segment and a core driver of their bull case. Look for the year-over-year growth rate in this segment and any commentary on market share gains against competitors.

Signal: Strong CTV growth (ideally maintaining or accelerating) is a major positive.

Adoption of the Kokai Platform:

Focus: The company has been transitioning clients to its new Kokai platform, with an expectation of full client adoption by the end of the year. Management has highlighted that clients using Kokai increase overall spend faster.

Signal: Updates on the percentage of client spend on the Kokai platform, client retention rates, and any measurable impact on campaign performance (e.g., wallet share increase) will be critical.

Future Guidance (Q4 2025 and Full Year):

Focus: This is often the most significant driver of the stock price post-earnings. Given the importance of the holiday ad season (Q4) and the broader macro environment, Q4 revenue and Adjusted EBITDA guidance will set the near-term narrative.

Signal: A conservative outlook due to macroeconomic uncertainty or an aggressive forecast based on platform momentum will dictate the stock's immediate direction.

Retail Media and International Expansion:

Focus: Momentum in these two diversification areas provides a counterbalance to any slowdowns in core North American display/mobile.

Signal: Specific metrics or qualitative commentary on the growth rate and strategic partnerships in Retail Media and a breakdown of International Revenue as a percentage of total spend.

Trade Desk (TTD) Price Target

Based on 28 Wall Street analysts offering 12 month price targets for Trade Desk in the last 3 months. The average price target is $66.57 with a high forecast of $98.00 and a low forecast of $45.00. The average price target represents a 40.92% change from the last price of $47.24.

Short-Term Trading Opportunity Post-Earnings

Trading around earnings is inherently high-risk, as TTD's stock often exhibits significant volatility following its reports.

Trading Consideration:

Implied Volatility (IV): TTD typically has high implied volatility leading up to earnings, which makes buying options expensive.

TTD implied volatility (IV) is 92.9, which is in the 98% percentile rank. This means that 98% of the time the IV was lower in the last year than the current level. The current IV (92.9) is 5.0% above its 20 day moving average (88.4) indicating implied volatility is trending higher.

Whipsaw Effect: The initial after-hours move can be misleading. Often, the forward guidance and commentary on CTV/Kokai adoption are more impactful than the absolute Q3 headline numbers.

Technical Analysis - Exponential Moving Average (EMA)

TTD currently is in a downside movement, and attempt to make an upside did not go well, and we could be going for a downwards move if the guidance for Q4 come out lacklustre. Investors are not feeling confident for the share price move, and we could be seeing another downside.

But any surprise or strong guidance could make a short rally to the share price, and we could see a nice surge post earnings.

Summary

The Trade Desk (TTD) reports Fiscal Q3 2025 earnings on November 6th.

Key Investor Watch Metrics:

Connected TV (CTV) Growth: Commentary on the year-over-year acceleration of the high-margin, market-leading CTV segment is crucial.

Kokai Platform Adoption: Updates on the percentage of client spend flowing through the new AI-powered Kokai platform, which is key to increasing client "wallet share."

Q4 2025 Guidance: The outlook for the crucial holiday advertising quarter will dictate the short-term stock movement. Given TTD's premium valuation, strong Q4 guidance is essential to avoid another post-earnings sell-off.

Short-Term Trading: TTD is a high-volatility, high-multiple stock. A disappointing growth forecast (Q4 guidance) or a perceived deceleration in key growth areas like CTV could lead to a sharp sell-off, while a material beat and strong guidance would likely spark a significant rally.

Appreciate if you could share your thoughts in the comment section whether you think TTD could provide a stronger growth forecast to take its share price out of the downside movement currently.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire @MillionaireTiger appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.