Trade Desk Earnings: Clients Adopt New Interface and Supply Chain Simplification Tool

Key Morningstar Metrics for Trade Desk

• Fair Value Estimate: $82.00
• Morningstar Rating: ★★★★
• Morningstar Economic Moat Rating: Narrow
• Morningstar Uncertainty Rating: Very High

What We Thought of Trade Desk’s Earnings

After a 61% peak-to-trough collapse in 2025, Trade Desk’s TTD shares were up around 15% in May 9 premarket trading after its first-quarter earnings release. Net revenue beat management guidance and FactSet consensus expectations by 7%. Adjusted EBITDA beat management guidance by 44%.

Why it matters: After a rough close to 2024, laden with operational missteps and slow adoption of the new Kokai user interface, Trade Desk’s performance is improving thanks to strong demand for the firm’s artificial intelligence-powered ad buying platform and its supply chain simplification tool, OpenPath.

• It appears that organizational complexity has been reduced. Trade Desk has hired a new COO, simplified its go-to-market structure, and now claims to ship large amounts of product code weekly. But it has only been one quarter, so it is difficult to draw a conclusion.
• The new user interface for existing advertising customers, Kokai, initially faced public criticism for a nonintuitive design, but improvements were made based on feedback, and it now has 66% adoption. We believe the improvements help maintain customer switching costs.

The bottom line: We maintain our narrow moat rating based on intangible assets and switching costs, our Very High Uncertainty Rating, and our $82 fair value estimate, as Trade Desk maintains high retention and low churn while driving material results for customers with programmatic tools.

• Trade Desk maintained over 95% customer retention despite some public displeasure with the initial rollout of the Kokai operating system. We appreciate the company’s willingness to accept customer feedback and improve its core product, and we believe this underscores high switching costs.
• OpenPath, a product that allows Trade Desk’s programmatic buying algorithms to plug directly into publisher inventory while eliminating low-value, high-cost middlemen in the supply chain, is seeing meaningful adoption from publishers like Warner Bros. Discovery and the Guardian.