Trade Desk, Inc.

Previous wording

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements generally relate to future events or our future financial or operating performance and may include statements concerning, among other things, our business strategy (including anticipated trends and developments in, and management plans for, our business and the markets in which we operate), financial results, the impact of macroeconomic uncertainty on our business, operations, and the markets and communities in which we, our clients, and partners operate, results of operations, revenues, operating expenses, capital expenditures including share repurchases, sales and marketing initiatives and competition. In some cases, you can identify forward-looking statements because they contain words such as “may,” “might,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “suggests,” “potential” or “continue” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans or intentions. These statements are not guarantees of future performance; they reflect our current views with respect to future events and are based on assumptions and are subject to known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from expectations or results projected or implied by forward-looking statements.

Current wording

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements generally relate to future events or our future financial or operating performance and may include statements concerning, among other things, our business strategy (including anticipated trends and developments in, and management plans for, our business and the markets in which we operate), financial results, the impact of macroeconomic uncertainty on our business, operations, and the markets and communities in which we, our clients, and partners operate, results of operations, revenues, operating expenses, income taxes, including the impact of the OBBBA, capital expenditures including share repurchases, sales and marketing initiatives and competition. In some cases, you can identify forward-looking statements because they contain words such as “may,” “might,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “suggests,” “potential” or “continue” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans or intentions. These statements are not guarantees of future performance; they reflect our current views with respect to future events and are based on assumptions and are subject to known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from expectations or results projected or implied by forward-looking statements.

Previous wording

Results of Operations for the Three Months Ended March 31, 2025 Compared with the Three Months Ended March 31, 2024

Current wording

Results of Operations for the Three and Six Months Ended June 30, 2025 Compared with the Three and Six Months Ended June 30, 2024

Previous wording

Revenue increased by $125 million, or 25% for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024. The increase was primarily due to higher gross spend in the current year on our platform, which was primarily driven by higher spend per campaign, new clients and more campaigns executed by existing clients. The increase in revenue was also due to changes in the mix of value-added services and data utilized by clients for their campaigns, which fluctuates from period to period.

Current wording

Revenue increased by $109 million, or 19%, and $234 million, or 22%, for the three and six months ended June 30, 2025, as compared to the three and six months ended June 30, 2024, respectively. The increase was primarily due to higher gross spend in the current year on our platform, which was primarily driven by higher spend per campaign, new clients and more campaigns executed by existing clients. The increase in revenue was also due to changes in the mix of value-added services and data utilized by clients for their campaigns, which fluctuates from period to period.

Previous wording

Platform operations expense increased by $39 million, or 38%, for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024. The increase was primarily due to increases of $30 million in hosting costs and $8 million in personnel costs, which included a $4 million increase in stock-based compensation. The increase in hosting costs was primarily attributable to support costs relating to the increased use of our platform by our clients, increased use of features by our technical teams in support of our platform and investment in new data centers to support the continued growth of our platform. The increase in personnel costs was primarily due to the increase in stock-based compensation driven by new equity awards and the impact of stock price volatility on our ESPP as well as headcount growth.

Current wording

Platform operations expense increased by $41 million, or 37%, for the three months ended June 30, 2025, as compared to the three months ended June 30, 2024. The increase was primarily due to increases of $33 million in hosting costs and $6 million in personnel costs, which included a $2 million increase in stock-based compensation. The increase in hosting costs was primarily attributable to support costs relating to the increased use of our platform by our clients, increased use of features by our technical teams in support of our platform and investment in new data centers to support the continued growth of our platform. The increase in personnel costs was primarily due to headcount growth as well as the increase in stock-based compensation driven by new equity awards and the impact of stock price volatility on our ESPP.

Previous wording

Sales and marketing expense increased by $31 million, or 25%, for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024. The increase was primarily due to increases of $25 million in personnel costs, which included a $9 million increase in stock-based compensation, $4 million in marketing costs and $3 million in allocated facilities costs. The increase in personnel costs was primarily due to headcount growth to support our sales efforts and to continue to develop and maintain relationships with our clients and an increase in incentive compensation driven by gross spend growth. The increase in stock-based compensation was primarily driven by new equity awards and the impact of stock price volatility on our ESPP. The increase in marketing costs was primarily due to an increase in marketing campaigns, events, creatives, sponsorships and client engagement. The increase in allocated facilities costs was primarily driven by new leases for additional office space to support our future growth as well as office support expenses.

Current wording

Sales and marketing expense increased by $27 million, or 20%, for the three months ended June 30, 2025, as compared to the three months ended June 30, 2024. The increase was primarily due to increases of $20 million in personnel costs, which included a $5 million increase in stock-based compensation, $5 million in marketing costs and $2 million in allocated facilities costs. The increase in personnel costs was primarily due to headcount growth to support our sales efforts and to continue to develop and maintain relationships with our clients and an increase in incentive compensation driven by gross spend growth. The increase in stock-based compensation was primarily driven by new equity awards and the impact of stock price volatility on our ESPP. The increase in marketing costs was primarily due to an increase in marketing campaigns, events, creatives, sponsorships and client engagement. The increase in allocated facilities costs was primarily driven by new leases for additional office space to support our future growth as well as office support expenses.

Previous wording

Technology and development expense increased by $25 million, or 23%, for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024. The increase was primarily due to increases of $21 million in personnel costs, which included a $13 million increase in stock-based compensation, and $3 million in allocated facilities costs. The increase in stock-based compensation was primarily driven by new equity awards and the impact of stock price volatility on our ESPP. The increase in other personnel costs was primarily attributable to headcount growth to maintain and support further development of our platform. The increase in allocated facilities costs was primarily driven by new leases for additional office space to support our future growth as well as office support expenses.

Current wording

Technology and development expense increased by $24 million, or 22%, for the three months ended June 30, 2025, as compared to the three months ended June 30, 2024. The increase was primarily due to increases of $21 million in personnel costs, which included a $10 million increase in stock-based compensation, and $3 million in allocated facilities costs. The increase in stock-based compensation was primarily driven by new equity awards and the impact of stock price volatility on our ESPP. The increase in other personnel costs was primarily attributable to headcount growth to maintain and support further development of our platform and related offerings. The increase in allocated facilities costs was primarily driven by new leases for additional office space to support our future growth as well as office support expenses.

Previous wording

General and administrative expense increased by $4 million, or 3%, for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024, primarily due to increases of $7 million in administrative costs, $3 million in personnel costs and $1 million in allocated facilities costs, partially offset by an $8 million decrease in stock-based compensation. The increase in administrative costs was primarily driven by increases in external professional fees, including legal expenses for various litigation and regulatory matters. The increase in personnel costs was primarily attributable to increased headcount to support our growth. The decrease in stock-based compensation was primarily due to a $12 million decrease relating to the CEO Performance Option driven by the graded-vesting attribution method, under which more expense is recognized earlier in the option’s life, partially offset by a $4 million increase primarily driven by new equity awards and the impact of stock price volatility on our ESPP. The increase in allocated facilities costs was primarily driven by new leases for additional office space to support our future growth as well as office support expenses.

Current wording

General and administrative expense decreased by $5 million, or 3%, for the three months ended June 30, 2025, as compared to the three months ended June 30, 2024, primarily due to a $15 million decrease in stock-based compensation, partially offset by increases of $6 million in administrative costs, $2 million in personnel costs and $1 million in allocated facilities costs. The decrease in stock-based compensation was primarily due to a $17 million decrease relating to the CEO Performance Option driven by the graded-vesting attribution method, under which more expense is recognized earlier in the option’s life, partially offset by a $2 million increase primarily driven by new equity awards and the impact of stock price volatility on our ESPP. The increase in administrative costs was primarily driven by increases in external professional fees, including legal expenses for various litigation, regulatory and governance matters. The increase in personnel costs was primarily attributable to increased headcount to support our growth, partially offset by a decrease in cash incentive award expenses. The increase in allocated facilities costs was primarily driven by new leases for additional office space to support our future growth as well as office support expenses.

Previous wording

Excluding the impact of the CEO Performance Option, we expect general and administrative expenses to increase primarily due to continued investment in corporate infrastructure, headcount to support growth and various litigation and regulatory matters, for which expenses may fluctuate from period to period.

Current wording

Excluding the impact of the CEO Performance Option, we expect general and administrative expenses to increase primarily due to continued investment in corporate infrastructure, headcount to support growth and various litigation, regulatory and governance matters, for which expenses may fluctuate from period to period.

Previous wording

Total other income, net, increased by $4 million for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024. The increase was primarily due to higher interest income on our cash and cash equivalents and short-term investments driven by higher amounts invested, partially offset by falling portfolio interest rates.

Current wording

Total other income, net, increased by $3 million for the six months ended June 30, 2025, as compared to the six months ended June 30, 2024. The increase was primarily due to higher interest income on our cash and cash equivalents and short-term investments driven by higher amounts invested as well as foreign currency transaction gains driven by changes in foreign currency exchange rates against the U.S. Dollar, partially offset by losses on foreign currency forwards and falling portfolio interest rates.

Previous wording

The U.S. federal statutory tax rate was 21% for the three months ended March 31, 2025 and 2024.

Current wording

The U.S. federal statutory tax rate was 21% for the three and six months ended June 30, 2025 and 2024.

Previous wording

The provision for income taxes increased by $11 million for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024. The increase was primarily due to higher pre-tax profitability and lower tax benefits associated with employee stock-based awards, partially offset by a lower impact attributable to nondeductible stock-based compensation.

Current wording

The provision for income taxes increased by $16 million for the three months ended June 30, 2025, as compared to the three months ended June 30, 2024. The increase was primarily due to lower tax benefits associated with employee stock-based awards and higher pre-tax profitability, partially offset by a lower impact attributable to nondeductible stock-based compensation.

Previous wording

As of March 31, 2025, we had working capital of $2,174 million, which included $1,119 million in cash and cash equivalents, $91 million of which was held by our international subsidiaries, and $622 million in short-term investments in marketable securities. Additionally, we had $443 million available under our Amended Credit Facility (refer to the “Credit Facility” section below). For the three months ended March 31, 2025, we generated $291 million in cash flows from operating activities.

Current wording

As of June 30, 2025, we had working capital of $2,105 million, which included $896 million in cash and cash equivalents, $120 million of which was held by our international subsidiaries, and $791 million in short-term investments in marketable securities. Additionally, we had $443 million available under our Amended Credit Facility (refer to the “Credit Facility” section below). For the six months ended June 30, 2025, we generated $456 million in cash flows from operating activities.

Previous wording

As of December 31, 2024, $464 million remained available and authorized for repurchases. At the end of January 2025, an additional $564 million was authorized under this program, bringing the total amount available for future repurchases to $1 billion. During the three months ended March 31, 2025, we repurchased and subsequently retired 6.3 million shares of our Class A common stock for an aggregate repurchase amount of $400 million. The repurchase amounts included in the condensed consolidated statements of stockholders’ equity include immaterial amounts relating to the 1% excise tax on share repurchases, net of share issuances, as a result of the Inflation Reduction Act of 2022 (“IRA”). As of March 31, 2025, $631 million remained available and authorized for repurchases.

Current wording

As of December 31, 2024, $464 million remained available and authorized for repurchases. At the end of January 2025, an additional $564 million was authorized under this program, bringing the total amount available for future repurchases to $1 billion. During the three months ended June 30, 2025, we repurchased and subsequently retired 3.7 million shares of our Class A common stock for an aggregate repurchase amount of $257 million. During the six months ended June 30, 2025, we repurchased and subsequently retired 10 million shares of our Class A common stock for an aggregate repurchase amount of $657 million. The repurchase amounts included in the condensed consolidated statements of stockholders’ equity include immaterial amounts relating to the 1% excise tax on share repurchases, net of share issuances, as a result of the Inflation Reduction Act of 2022 (“IRA”). As of June 30, 2025, $375 million remained available and authorized for repurchases.

Previous wording

For the three months ended March 31, 2025, cash provided by operating activities of $291 million resulted primarily from net income adjusted for noncash items of $208 million and a net increase from our operating assets and liabilities of $83 million. The net increase from our operating assets and liabilities was due to a $282 million decrease in accounts receivable, a $29 million increase in accrued expenses and other liabilities and a $20 million decrease in prepaid expenses and other assets, partially offset by a $235 million decrease in accounts payable and a $14 million decrease in operating lease liabilities. The decrease in accounts receivable was due to the timing and seasonality of cash receipts from clients. The increase in accrued expenses and other liabilities was primarily due to an increase in income tax liability driven by the current income tax provision, net of tax payments, and an increase in liability relating to ESPP employee contributions toward the upcoming purchase of shares, partially offset by a decrease in incentive compensation liabilities driven by timing and the seasonality of our business. The decrease in prepaid expenses and other assets was primarily due to the timing of payment for employee engagement costs, including for travel and in-person events that occurred in the first quarter of 2025. The decrease in accounts payable was due to the timing and seasonality of payments to suppliers for Supplier Components. The decrease in operating lease liabilities was due primarily to rent payments.

Current wording

For the six months ended June 30, 2025, cash provided by operating activities of $456 million resulted primarily from net income adjusted for noncash items of $470 million and a net decrease from our operating assets and liabilities of $14 million. The net decrease from our operating assets and liabilities was due to a $32 million decrease in operating lease liabilities, a $24 million decrease in accrued expenses and other liabilities, a $20 million decrease in accounts payable and an $18 million increase in prepaid expenses and other assets, partially offset by an $80 million decrease in accounts receivable. The decrease in operating lease liabilities was due primarily to rent payments. The decrease in accrued expenses and other liabilities was primarily due to tax payments against the prior year income tax liability and a reduction of the liability relating to the ESPP due to the purchase of shares in accordance with the plan, partially offset by the timing of payment for certain personnel costs. The decrease in accounts payable was due to the timing and seasonality of payments to suppliers for Supplier Components. The increase in prepaid expenses and other assets was primarily due to estimated tax payments, partially offset by the current tax provision and the timing of payment for employee engagement costs, including for travel and in-person events that occurred in the first quarter of 2025. The decrease in accounts receivable was due to the timing and seasonality of cash receipts from clients.

Previous wording

For the three months ended March 31, 2024, cash provided by operating activities of $185 million resulted primarily from net income adjusted for noncash items of $178 million, and a net increase from our operating assets and liabilities of $8 million. The net increase from our operating assets and liabilities was primarily due to a $238 million decrease in accounts receivable, partially offset by a $220 million decrease in accounts payable and a $14 million decrease in operating lease liabilities. The decrease in accounts receivable was due to the timing and seasonality of cash receipts from clients. The decrease in accounts payable was due to the timing and seasonality of payments to suppliers for Supplier Components. The decrease in operating lease liabilities was due primarily to rent payments.

Current wording

For the six months ended June 30, 2024, cash provided by operating activities of $267 million resulted primarily from net income adjusted for noncash items of $419 million, and a net decrease from our operating assets and liabilities of $152 million. The net decrease from our operating assets and liabilities was primarily due to a $52 million increase in prepaid expenses and other assets, a $49 million increase in accounts receivable, a $27 million decrease in operating lease liabilities, a $13 million decrease in accounts payable and a $10 million decrease in accrued expenses and other liabilities. The increase in prepaid expenses and other assets was primarily due to cash paid for income taxes. The increase in accounts receivable was due to the timing and seasonality of cash receipts from clients and the growth of our business. The decrease in operating lease liabilities was due primarily to rent payments. The decrease in accounts payable was due to the timing and seasonality of payments to suppliers for Supplier Components. The decrease in accrued expenses and other liabilities was primarily due to incentive compensation payments and a reduction of the liability relating to the ESPP due to the purchase of shares in accordance with the plan.

Previous wording

For the three months ended March 31, 2025, we used $133 million of cash in investing activities, consisting of $66 million of net purchases of short-term investments, $59 million to purchase property and equipment, $4 million for the acquisition of certain assets accounted for as a business combination and $3 million of investments in capitalized software.

Current wording

For the six months ended June 30, 2025, we used $346 million of cash in investing activities, consisting of $232 million of net purchases of short-term investments, $104 million to purchase property and equipment, $6 million of investments in capitalized software and $4 million for the acquisition of certain assets accounted for as a business combination.

Previous wording

For the three months ended March 31, 2024, we used $21 million of cash in investing activities, consisting of $12 million of net purchases of short-term investments, $7 million to purchase property and equipment and $2 million of investments in capitalized software.

Current wording

For the six months ended June 30, 2024, we used $37 million of cash in investing activities, consisting of $29 million to purchase property and equipment, $4 million of investments in capitalized software and $3 million of net purchases of short-term investments.

Previous wording

For the three months ended March 31, 2025, we used $410 million of cash in financing activities, consisting of $386 million of cash paid for repurchases of our Class A common stock and $31 million of taxes paid for restricted stock award settlements, partially offset by $8 million of proceeds from stock option exercises.

Current wording

For the six months ended June 30, 2025, we used $583 million of cash in financing activities, consisting of $647 million of cash paid for repurchases of our Class A common stock and $57 million of taxes paid for restricted stock award settlements, partially offset by $74 million of proceeds from short-term borrowings, $32 million of proceeds from our ESPP and $14 million of proceeds from stock option exercises. Refer to Note 6 - Debt for further information regarding short-term borrowings.

Previous wording

For the three months ended March 31, 2024, we used $141 million of cash in financing activities, consisting of $125 million of cash paid for repurchases of Class A common stock and $27 million of taxes paid for restricted stock award settlements, partially offset by $11 million of proceeds from stock option exercises.

Current wording

For the six months ended June 30, 2024, we used $115 million of cash in financing activities, consisting of $125 million of cash paid for repurchases of Class A common stock and $58 million of taxes paid for restricted stock award settlements, partially offset by $38 million of proceeds from stock option exercises and $30 million of proceeds from our ESPP.