ttd-20250331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

______________________________

FORM 10-Q

______________________________

(Mark One)


x			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2025


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission File Number: 001-37879

______________________________

THE TRADE DESK, INC.

(Exact name of registrant as specified in its charter)

______________________________


Nevada			27-1887399
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

42 N. Chestnut Street

Ventura, California 93001

(Address of principal executive offices, including zip code)

Registrant’s telephone number, including area code: (805) 585-3434

N/A

(Former name, former address and former fiscal year, if changed since last report)

______________________________

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Name of each exchange on which registered

Class A Common Stock, par value $0.000001 per share

TTD

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No x

As of April 30, 2025, the registrant had 448,135,991 shares of Class A common stock and 43,302,678 shares of Class B common stock outstanding.

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THE TRADE DESK, INC.

QUARTERLY REPORT ON FORM 10-Q

INDEX


		Page
Part I.	FINANCIAL INFORMATION	3
Item 1.	Condensed Consolidated Financial Statements (Unaudited)	3
	Condensed Consolidated Balance Sheets as of Ma rch 31 , 202 5 and December 31, 202 4	3
	Condensed Consolidated Statements of Operations for the Three Months Ended March 3 1 , 202 5 and 202 4	4
	Condensed Consolidated Statements of Stockholders’ Equity for the Three Months Ended March 3 1 , 202 5 and 202 4	5
	Condensed Consolidated Statements of Cash Flows for the Three Months Ended M arch 3 1 , 202 5 and 202 4	6
	Notes to Condensed Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	24
Item 4.	Controls and Procedures	25
Part II.	OTHER INFORMATION	26
Item 1.	Legal Proceedings	26
Item 1A.	Risk Factors	27
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	54
Item 5.	Other Information	54
Item 6.	Exhibits	55
Signatures		56

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PART I. FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements

THE TRADE DESK, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except par values)

(Unaudited)


	As of March 31, 2025		As of December 31, 2024
ASSETS
Current assets:
Cash and cash equivalents	$	1,118,545	$	1,369,463
Short-term investments, net	621,826		552,026
Accounts receivable, net of allowance for credit losses of $11,679 and $11,244 as of March 31, 2025 and December 31, 2024, respectively	3,051,928		3,330,343
Prepaid expenses and other current assets	64,036		84,626
TOTAL CURRENT ASSETS	4,856,335		5,336,458
Property and equipment, net	251,019		209,332
Operating lease assets	279,039		263,761
Deferred income taxes	228,948		230,214
Other assets, non-current	90,100		72,186
TOTAL ASSETS	$	5,705,441	$	6,111,951
LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES
Current liabilities:
Accounts payable	$	2,398,948	$	2,631,213
Accrued expenses and other current liabilities	210,813		177,760
Operating lease liabilities	72,301		64,492
TOTAL CURRENT LIABILITIES	2,682,062		2,873,465
Operating lease liabilities, non-current	262,667		247,723
Other liabilities, non-current	44,028		41,618
TOTAL LIABILITIES	2,988,757		3,162,806
Commitments and contingencies (Note 11)
STOCKHOLDERS’ EQUITY
Preferred stock, par value $0.000001; 100,000 shares authorized, zero shares issued and outstanding as of March 31, 2025 and December 31, 2024	—		—
Common stock, par value $0.000001 Class A, 1,000,000 shares authorized; 448,016 and 452,182 shares issued and outstanding as of March 31, 2025 and December 31, 2024, respectively Class B, 95,000 shares authorized; 43,303 and 43,919 shares issued and outstanding as of March 31, 2025 and December 31, 2024, respectively	—		—
Additional paid-in capital	2,712,166		2,594,896
Retained earnings	4,518		354,249
TOTAL STOCKHOLDERS’ EQUITY	2,716,684		2,949,145
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	5,705,441	$	6,111,951

The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of these statements.

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THE TRADE DESK, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited)


	Three Months Ended March 31,
	2025		2024
Revenue	$	616,021	$	491,253
Operating expenses:
Platform operations	142,839		103,630
Sales and marketing	152,743		121,725
Technology and development	132,402		107,686
General and administrative	133,585		129,555
Total operating expenses	561,569		462,596
Income from operations	54,452		28,657
Other expense (income):
Interest income, net	(20,132)		(16,661)
Foreign currency exchange gain, net	(1,185)		(715)
Total other income, net	(21,317)		(17,376)
Income before income taxes	75,769		46,033
Provision for income taxes	25,091		14,373
Net income	$	50,678	$	31,660
Earnings per share:
Basic	$	0.10	$	0.06
Diluted	$	0.10	$	0.06
Weighted-average shares outstanding:
Basic	494,927		488,551
Diluted	502,944		498,192

The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of these statements.

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THE TRADE DESK, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands)

(Unaudited)


	Class A and B Common Stock			Additional Paid-In Capital		Retained Earnings		Total Stockholders’ Equity
	Shares	Amount
Balance as of December 31, 2023	488,916	$	—	$	1,967,265	$	196,954	$	2,164,219
Exercise of common stock options	719	—		10,804		—		10,804
Issuance of restricted stock, net of forfeitures and shares withheld for taxes	620	—		(26,806)		—		(26,806)
Repurchases of Class A common stock	(1,527)	—		—		(125,370)		(125,370)
Stock-based compensation	—	—		112,048		—		112,048
Net income	—	—		—		31,660		31,660
Balance as of March 31, 2024	488,728	$	—	$	2,063,311	$	103,244	$	2,166,555














Balance as of December 31, 2024	496,101	$	—	$	2,594,896	$	354,249	$	2,949,145
Exercise of common stock options	597	—		6,478		—		6,478
Issuance of restricted stock, net of forfeitures and shares withheld for taxes	782	—		(29,457)		—		(29,457)
Issuance of common stock relating to business acquisition	127	—		10,299		—		10,299
Repurchases of Class A common stock	(6,288)	—		—		(400,409)		(400,409)
Stock-based compensation	—	—		129,950		—		129,950
Net income	—	—		—		50,678		50,678
Balance as of March 31, 2025	491,319	$	—	$	2,712,166	$	4,518	$	2,716,684

The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of these statements.

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THE TRADE DESK, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)


	Three Months Ended March 31,
	2025		2024
OPERATING ACTIVITIES:
Net income	$	50,678	$	31,660
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	23,985		21,742
Stock-based compensation	128,253		110,620
Noncash lease expense	16,962		12,751
Provision for expected credit losses on accounts receivable	492		40

Other	(11,876)		1,125
Changes in operating assets and liabilities:
Accounts receivable	282,336		238,147
Prepaid expenses and other current and non-current assets	20,018		3,331
Accounts payable	(234,666)		(220,196)
Accrued expenses and other current and non-current liabilities	29,105		(104)
Operating lease liabilities	(13,854)		(13,644)
Net cash provided by operating activities	291,433		185,472
INVESTING ACTIVITIES:
Purchases of investments	(231,580)		(159,731)

Maturities of investments	165,114		147,794
Purchases of property and equipment	(59,113)		(7,224)
Capitalized software development costs	(2,660)		(1,958)
Business acquisition	(4,350)		—
Net cash used in investing activities	(132,589)		(21,119)
FINANCING ACTIVITIES:

Repurchases of Class A common stock	(386,250)		(125,280)
Proceeds from exercise of stock options	7,940		10,804

Taxes paid relating to net settlement of restricted stock awards	(31,452)		(26,806)
Net cash used in financing activities	(409,762)		(141,282)
Increase (decrease) in cash and cash equivalents	(250,918)		23,071
Cash and cash equivalents—Beginning of period	1,369,463		895,129
Cash and cash equivalents—End of period	$	1,118,545	$	918,200
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for operating lease liabilities	$	16,819	$	15,716
Operating lease assets obtained in exchange for operating lease liabilities	$	32,304	$	16,875
Capitalized assets financed by accounts payable	$	22,011	$	3,135
Repurchases of Class A common stock in accrued expenses and other current and non-current liabilities	$	16,059	$	90
Assets acquired in a business combination, included in other assets, non-current, in exchange for Class A common stock	$	10,299	$	—
Tenant improvements paid by lessor	$	5,144	$	—

Stock-based compensation included in capitalized software development costs	$	1,697	$	1,428

The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of these statements.

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THE TRADE DESK, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1—Nature of Operations

The Trade Desk, Inc. (the “Company”) is a global technology company that empowers buyers of advertising. Through the Company’s self-service, cloud-based platform, ad buyers can create, manage and optimize more expressive data-driven digital advertising campaigns across ad formats and channels, including connected television (“CTV”) and other video, display, audio and native, on a multitude of devices, such as televisions, streaming devices, mobile devices, computers and digital-out-of-home devices. The Company’s platform integrations with major inventory, publisher and data partners provide ad buyers reach and decisioning capabilities, and the Company’s enterprise application programming interfaces (“APIs”) enable its clients to customize and expand platform functionality.

The Company was originally incorporated in November 2009 and is a Nevada corporation. The Company is headquartered in Ventura, California with offices in various cities in North America, Europe, Asia and Australia.

Note 2—Basis of Presentation and Summary of Significant Accounting Policies

The accompanying condensed consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and are unaudited. Certain information and disclosures normally included in consolidated financial statements prepared in accordance with GAAP have been condensed or omitted. The condensed consolidated balance sheet as of December 31, 2024 was derived from audited financial statements but does not include all disclosures required by GAAP. Accordingly, these condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and related notes included in its Annual Report on Form 10-K for the year ended December 31, 2024.

There have been no material changes to the Company’s accounting policies from those disclosed in its Annual Report on Form 10-K for the year ended December 31, 2024, and these unaudited interim condensed consolidated financial statements have been prepared on a basis consistent with that used to prepare the Company’s audited annual consolidated financial statements for the year ended December 31, 2024, and include, in the opinion of management, all adjustments, consisting of normal recurring items, necessary for the fair statement of the condensed consolidated financial statements.

The results of operations for the three months ended March 31, 2025 are not necessarily indicative of the results expected for the full year ending December 31, 2025.

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ materially from these estimates.

Management regularly evaluates its estimates, primarily those relating to: (1) allowances for credit losses, (2) income taxes, including the realizability of deferred tax assets and the recognition of valuation allowances, (3) assumptions used in the option pricing models to determine the fair value of stock-based compensation, (4) operating lease assets and liabilities, including the Company’s incremental borrowing rate and terms and provisions of each lease, (5) the recognition and disclosure of contingent liabilities, (6) the useful lives of long-lived assets and (7) the fair values and recoverable amounts of long-lived assets and any potential impairments. These estimates are based on historical data and experience, as well as various other factors that management believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources.

As of March 31, 2025, the impacts to the Company’s business due to geopolitical developments and macroeconomic factors such as changes in interest rates, foreign currency exchange rates, trade policies and practices, inflation, supply chain disruptions and economic growth continue to evolve. As a result, many of the Company’s estimates and assumptions, including the allowance for credit losses, consider macroeconomic factors in the market, which require increased judgment and carry a higher degree of variability and volatility. As events continue to evolve and additional information becomes available, the Company’s estimates may change materially in future periods.

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Recent Accounting Pronouncements Not Yet Adopted

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires greater disaggregation of information and consistent categories in the effective tax rate reconciliation and income taxes paid disaggregated by jurisdiction. It also includes certain other amendments to improve the effectiveness of income tax disclosures. This guidance will be effective on a prospective basis, with an option to apply it retrospectively, for annual periods beginning with the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025. Early adoption is permitted. The Company is currently evaluating the impact of the new guidance on its disclosures.

In November 2024, the FASB issued ASU No. 2024-03, Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires additional disclosure of specific expense categories included in the expense captions presented on the statements of operations. The new guidance does not change the expense captions on the statements of operations. In January 2025, the FASB issued ASU No. 2025-01, Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40) which clarified the effective date of ASU No. 2024-03. The guidance will be effective on a prospective basis, with an option to apply it retrospectively, for annual periods beginning with the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2027, and for interim periods beginning with the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2028. Early adoption is permitted. The Company is currently evaluating the impact of the new guidance on its disclosures.

Note 3—Earnings Per Share

The Company has two classes of common stock, Class A and Class B. Basic and diluted earnings per share attributable to common stockholders for Class A and Class B common stock were the same because they were entitled to the same liquidation and dividend rights.

Basic earnings per share is calculated by dividing net income by the weighted-average number of shares of common stock outstanding. Diluted earnings per share is calculated by dividing net income by the weighted-average number of shares of common stock outstanding adjusted for the potentially dilutive impact of stock options, restricted stock and the Employee Stock Purchase Plan (“ESPP”), using the two-class method required for participating securities. Restricted stock awards are considered to be participating securities due to their non-forfeitable dividend rights.

The computation of basic and diluted earnings per share is as follows (in thousands, except per share amounts):


	Three Months Ended March 31,
	2025		2024
Numerator:
Net income	$	50,678	$	31,660
Denominator:
Weighted-average shares outstanding—basic	494,927		488,551
Effect of dilutive securities	8,017		9,641
Weighted-average shares outstanding—diluted	502,944		498,192
Basic earnings per share	$	0.10	$	0.06
Diluted earnings per share	$	0.10	$	0.06
Anti-dilutive equity awards under stock-based award plans excluded from the determination of diluted earnings per share	4,074		4,799

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Note 4—Cash, Cash Equivalents and Short-Term Investments, Net

Cash, cash equivalents and short-term investments in marketable securities were as follows (in thousands):


	As of March 31, 2025
	Cash and Cash Equivalents		Short-Term Investments, Net		Total
Cash	$	226,400	$	—	$	226,400
Level 1:
Money market funds	768,423		—		768,423
Level 2:
Commercial paper	118,759		179,640		298,399
Corporate debt securities	—		297,291		297,291
U.S. government and agency securities	4,963		144,895		149,858
Total	$	1,118,545	$	621,826	$	1,740,371


	As of December 31, 2024
	Cash and Cash Equivalents		Short-Term Investments, Net		Total
Cash	$	218,448	$	—	$	218,448
Level 1:
Money market funds	1,031,413		—		1,031,413
Level 2:
Commercial paper	101,163		129,879		231,042
Corporate debt securities	3,498		281,775		285,273
U.S. government and agency securities	14,941		140,372		155,313
Total	$	1,369,463	$	552,026	$	1,921,489

The Company’s gross unrealized gains and losses from its short-term investments, recorded at fair value, for the three months ended March 31, 2025 and 2024, were immaterial.

The contractual maturities of the Company’s short-term investments are as follows (in thousands):


	March 31, 2025
Due in one year	$	501,688
Due in one to two years	120,138
Total	$	621,826

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Note 5—Leases

The components of lease expense recorded in the condensed consolidated statements of operations were as follows (in thousands):


	Three Months Ended March 31,
	2025		2024
Operating lease cost	$	17,033	$	12,711
Short-term lease cost	797		474
Variable lease cost	4,694		3,816
Sublease income	—		(42)
Total lease cost	$	22,524	$	16,959

Note 6—Debt

Credit Facility

On June 15, 2021, the Company and a syndicate of banks, led by JPMorgan Chase Bank, N.A., as agent, entered into a Loan and Security Agreement (the “Credit Facility”). The Credit Facility consists of a $450 million revolving loan facility, with a $20 million sublimit for swingline borrowings and a $15 million sublimit for the issuance of letters of credit. Under certain circumstances, the Company has the right to increase the Credit Facility by an amount not to exceed $300 million. The Credit Facility is collateralized by substantially all of the Company’s assets, including a pledge of certain of its accounts receivable, deposit accounts, intellectual property, investment property and equipment.

On December 17, 2021, the Company amended the Credit Facility to expand the process for issuing letters of credit and the related invoicing, particularly with respect to letters of credit not denominated in U.S. Dollars. On February 9, 2023, the Company further amended its Credit Facility (as amended, the “Amended Credit Facility”) to transition from a variable interest rate based on the London Interbank Offered Rate to a variable interest rate based on the secured overnight financing rate (“SOFR”).

Loans under the Amended Credit Facility bear interest at a rate equal to, at the Company’s option, an annual rate of either a Base Rate or an adjusted term SOFR rate (defined as SOFR for a specified term plus a credit spread adjustment of 10 basis points, subject to a 0% floor), plus an applicable margin (“Base Rate Borrowings” and “Term SOFR Borrowings”). The Base Rate is defined as a rate per annum for any day equal to the greatest of (1) the rate of interest last quoted by The Wall Street Journal as the “Prime Rate” in the United States, (2) the New York Federal Reserve Bank Rate in effect on such day plus half of 1%, and (3) the adjusted term SOFR rate for a one-month interest period on such day plus 1%. The applicable margin is between 0.25% to 1.25% for Base Rate Borrowings and between 1.25% and 2.25% for Term SOFR Borrowings based on the Company maintaining certain leverage ratios. The fee for undrawn amounts under the Amended Credit Facility ranges, based on the applicable leverage, from 0.200% to 0.350%. The Company is also required to pay customary letter of credit fees, as necessary.

As of March 31, 2025, the Company did not have an outstanding debt balance under the Amended Credit Facility. Availability under the Amended Credit Facility was $443 million as of March 31, 2025, which is net of outstanding letters of credit of $7 million. The Amended Credit Facility matures, and all outstanding amounts become due and payable, on June 15, 2026.

The Amended Credit Facility contains customary conditions to borrowings, events of default and covenants, including covenants that restrict the Company’s ability to sell assets, make changes to the nature of the Company’s business, engage in mergers or acquisitions, incur, assume or permit to exist additional indebtedness and guarantees, create or permit to exist liens, pay dividends, issue equity instruments, make distributions or redeem or repurchase capital stock or make other investments, engage in transactions with affiliates and make payments in respect of subordinated debt. The Amended Credit Facility also requires the Company to maintain compliance with a maximum ratio of consolidated funded debt to consolidated EBITDA of 3.50 to 1.00. As of March 31, 2025, the Company was in compliance with all covenants.

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Note 7—Capitalization

Share Repurchase Program

In February 2023, the Company’s board of directors approved a share repurchase program to repurchase its Class A common stock. The share repurchase program, which has no expiration date, is designed to help offset the impact of future share dilution from employee stock issuances. Repurchases under the program may be made in the open market, in privately negotiated transactions or otherwise, with the amount and timing of repurchases to be determined at the Company’s discretion, depending on market conditions and corporate needs. Open market repurchases are structured to occur in accordance with applicable federal securities laws, including within the pricing and volume requirements of Rule 10b-18 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Company may also, from time to time, enter into Rule 10b5-1 plans to facilitate repurchases of its shares under this authorization. This program does not obligate the Company to acquire any particular amount of Class A common stock, and may be modified, suspended or terminated at any time at the discretion of the Company’s board of directors.

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, the Company repurchased and subsequently retired 6.3 million shares of its 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. Activity under the share repurchase program was recognized in the condensed consolidated financial statements on a trade-date basis.

Note 8—Stock-Based Compensation

Stock-Based Compensation Expense

Stock-based compensation expense recorded in the condensed consolidated statements of operations was as follows (in thousands):


	Three Months Ended March 31,
	2025		2024
Platform operations	$	9,217	$	5,555
Sales and marketing	28,936		20,292
Technology and development	40,981		27,974
General and administrative	49,119		56,799
Total	$	128,253	$	110,620

Stock Options, Excluding the CEO Performance Option

The following summarizes stock option activity:


	Shares Under Options (in thousands)	Weighted- Average Exercise Price
Outstanding as of December 31, 2024	9,813	$	43.31
Granted	176	120.36
Exercised	(597)	10.94
Expired/Forfeited	(226)	72.94
Outstanding as of March 31, 2025	9,166	$	46.16
Exercisable as of March 31, 2025	6,066	$	30.56

Stock-based compensation expense relating to stock options was $15 million and $13 million for the three months ended March 31, 2025 and 2024, respectively. As of March 31, 2025, the Company had unrecognized stock-based

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compensation relating to stock options of approximately $125 million, which is expected to be recognized over a weighted-average period of 2.6 years.

CEO Performance Option

In October 2021, the Company granted a market-based performance award to the Company’s Chief Executive Officer (the “CEO Performance Option”) under the Company’s 2016 Incentive Award Plan. The CEO Performance Option has an exercise price of $68.29 per share. As of December 31, 2024, the CEO Performance Option had 17.8 million options outstanding. No options were granted, exercised, forfeited or expired during the three months ended March 31, 2025. As of March 31, 2025, the CEO Performance Option had 17.8 million options outstanding and 3.4 million exercisable options.

Stock-based compensation of $24 million and $36 million for the CEO Performance Option was recorded as a component of general and administrative expense during the three months ended March 31, 2025 and 2024, respectively. As of March 31, 2025, the Company had unrecognized stock-based compensation relating to the CEO Performance Option of $48 million that is expected to be recognized over a weighted-average period of 0.8 years, assuming no acceleration of vesting.

Restricted Stock

The following summarizes restricted stock activity:


	Shares (in thousands)	Weighted- Average Grant Date Fair Value
Unvested as of December 31, 2024	10,197	$	73.62
Granted	521	94.62
Vested	(1,043)	68.28
Forfeited	(287)	73.45
Unvested as of March 31, 2025	9,388	$	75.39

Stock-based compensation expense relating to restricted stock was $71 million and $57 million for the three months ended March 31, 2025 and 2024, respectively. As of March 31, 2025, the Company had unrecognized stock-based compensation relating to restricted stock of approximately $649 million, which is expected to be recognized over a weighted-average period of 2.5 years.

Employee Stock Purchase Plan (“ESPP”)

Stock-based compensation expense relating to the ESPP was $18 million and $6 million for the three months ended March 31, 2025 and 2024, respectively. As of March 31, 2025, the Company had unrecognized stock-based compensation relating to ESPP awards of approximately $12 million, which is expected to be recognized over a weighted-average period of 0.3 years.

Note 9—Income Taxes

In determining the interim provision for income taxes for each of the three months ended March 31, 2025 and 2024, the Company utilized the annual estimated effective tax rate applied to the actual year-to-date income and added the tax effects of any discrete items in the reporting period in which they occur.

For the three months ended March 31, 2025 and 2024, the provision for income taxes included benefits associated with stock-based awards of $10 million and $11 million, respectively.

For the three months ended March 31, 2025 and 2024, the Company’s effective tax rate differed from the United States federal statutory tax rate of 21% primarily due to nondeductible stock-based compensation and state and foreign taxes, partially offset by research and development tax credits and the impact of tax benefits associated with stock-based awards.

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There were no material changes to the Company’s unrecognized tax benefits during the three months ended March 31, 2025, and the Company does not expect to have any significant changes to unrecognized tax benefits through the end of the fiscal year.

Note 10—Segment and Geographic Information

The Company’s chief operating decision maker is its Chief Executive Officer (“CEO”), who manages the Company and reviews financial information on a consolidated basis. The Company has one primary business activity, its advertising technology platform, as described in Note 1 – Nature of Operations. Accordingly, the Company operates in one operating segment on a consolidated basis: advertising technology platform. There are no differences in segmentation, the nature of significant expenses or the basis of measurement of segment profit and loss, which is consolidated net income, as compared to the disclosures in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

The CEO is not regularly provided significant expense information at a greater level of disaggregation than those expenses reported on the condensed consolidated statements of operations.

As the Company only has one operating segment, revenue, expenses and net income are disclosed in the condensed consolidated statements of operations, and depreciation and amortization expense is disclosed in the condensed consolidated statements of cash flows. Significant non-cash items and expenditures for long-lived assets are disclosed in the condensed consolidated statements of cash flows and in Note 8 – Stock-Based Compensation. Segment assets are reported on the condensed consolidated balance sheets as total assets. The Company does not have intra-entity sales or transfers. The following includes interest expense and interest income (in thousands):


	Three Months Ended March 31,
	2025		2024
Interest expense	$	376	$	371
Interest income	(20,508)		(17,032)
Interest income, net	$	(20,132)	$	(16,661)

Generally, the Company reports revenue net of amounts it pays suppliers for the cost of advertising inventory, supplier-provided components of value-added services and data (collectively, “Supplier Components”). The Company generally bills clients for their spend on advertising inventory they purchase through the platform and platform fees, value-added services and data, net of allowances (“Gross Billings”). The Company’s accounts receivable are recorded at the amount of Gross Billings for the amounts it is responsible to collect, and accounts payable are recorded at the net amount payable to suppliers. Accordingly, both accounts receivable and accounts payable appear large in relation to revenue reported on a net basis.

Gross Billings, based on the address of the clients or client affiliates, set forth as a percentage of total Gross Billings, were as follows:


	Three Months Ended March 31,
	2025		2024
United States	87	%	88	%
International	13	%	12	%
Total	100	%	100	%

Note 11— Commitments and Contingencies

Guarantees, Indemnification and Other

In the ordinary course of business, the Company may provide indemnifications of varying scope and terms to clients, vendors, lessors, business partners and other parties with respect to certain matters, including, but not limited to, losses arising out of breach of such agreements, services to be provided by the Company or from intellectual property infringement claims made by third parties. In addition, the Company has entered into indemnification agreements with directors and certain officers and employees that will require the Company, among other things, to indemnify them against

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certain liabilities that may arise by reason of their status or service as directors, officers or employees. In the ordinary course of business, demands have been made upon the Company to provide indemnification under such agreements, but there are no claims of which the Company is aware that could have a material effect on the Company’s condensed consolidated balance sheets, statements of operations or statements of cash flows. Accordingly, no material amounts for have been recorded at March 31, 2025 and 2024.

The Company is under audit by various domestic and foreign tax authorities. The Company believes that the amount of losses or any estimable range of possible losses with respect to these matters will not, either individually or in the aggregate, have a material adverse effect on its business and condensed consolidated financial statements. Due to the inherent complexity and uncertainty of these matters and judicial process in certain jurisdictions, the final outcome may be materially different from the Company’s expectations.

Litigation

From time to time, the Company is subject to various legal proceedings, litigation and claims, either asserted or unasserted, that arise in the ordinary course of business. Although the outcome of the various legal proceedings, litigation and claims cannot be predicted with certainty, management does not believe that any of these proceedings or other claims will have a material adverse effect on the Company’s business, financial condition, results of operations or cash flows. Regardless of the outcome, litigation can have an adverse impact on the Company because of defense and settlement costs, diversion of management resources and other factors.

Litigation Related to 2021 CEO Performance Option

On May 27, 2022, a stockholder filed a derivative lawsuit captioned Huizenga v. Green, No. 2022-0461, asserting claims on behalf of the Company against certain members of the Company’s board of directors in the Court of Chancery of the State of Delaware. On June 27, 2022, a second derivative lawsuit captioned Pfeiffer v. Green, No. 2022-0560, was filed in the Court of Chancery of the State of Delaware alleging substantially similar claims. Those lawsuits were consolidated on August 18, 2022, and a lead plaintiff was appointed on October 7, 2022. The two complaints alleged generally that the defendants breached their fiduciary duties to the Company and its stockholders in connection with the negotiation and approval of the CEO Performance Option. The plaintiffs sought a court order rescinding the CEO Performance Option and monetary damages. On November 10, 2022, the plaintiffs filed a consolidated complaint, and on January 12, 2023, the defendants moved to dismiss the consolidated complaint. On February 14, 2025, the court granted the motions to dismiss under Court of Chancery Rule 23.1 in their entirety and with prejudice, finding that the plaintiffs did not allege facts sufficient to infer that at least half of the Company’s board of directors received a material benefit from the CEO Performance Option, lacked independence from Mr. Green, or faced a “substantial likelihood of liability” from having approved the CEO Performance Option. The plaintiffs filed a notice of appeal of the court’s decision. On April 29, 2025, the plaintiffs filed their opening brief. The defendants’ answering brief is due May 29, 2025.

Litigation Related to Reincorporation

On October 4, 2024, a stockholder filed a class action complaint in the Court of Chancery in the State of Delaware alleging claims for breach of contract against the Company and breach of fiduciary duties against the Company’s directors, in connection with the Company’s reincorporation from Delaware to Nevada. Gunderson v. The Trade Desk, Inc., No. 2024-1029 (Del. Ch.) (the “Gunderson Action”). On October 24, 2024, the plaintiff filed an amended complaint. The complaint sought, among other things, an order declaring that the Company’s conversion required approval by a supermajority of the Company’s stockholders and an order enjoining the November 14, 2024 stockholder vote on the conversion. On October 28, 2024, the parties completed expedited briefing on cross motions for partial summary judgment regarding the causes of action asserted in the original complaint, and the court heard oral argument on the motions on October 30, 2024. On November 6, 2024, the court granted the defendants’ summary judgment motion and denied the plaintiff’s cross-motion, finding that the conversion did not require supermajority approval of the Company’s stockholders, and that the defendants did not breach their fiduciary duties by disclosing that the conversion required a vote of a simple majority of the Company’s stockholders. The plaintiff chose not to appeal. The case is now proceeding as to the plaintiff’s remaining claims that the Company’s directors breached their fiduciary duties because the reincorporation to Nevada was substantively and procedurally unfair, and that the transaction is not subject to the business judgment rule because it was not subject to approval by a special committee of the board or by a majority of the disinterested stockholders. The defendants have moved to dismiss, but no briefing schedule has been set. On April 28, 2025, the plaintiff in the Scarantino Action (as defined below) moved to intervene and stay the Gunderson Action. The motion remains pending.

On November 15, 2024, a different stockholder filed a complaint in the Court of Chancery of the State of Delaware requesting production of the Company’s corporate books and records relating to the Nevada conversion, pursuant to 8 Del. C. § 220. City of Roseville Employees Retirement System v. The Trade Desk, Inc., No. 2024-1173 (Del. Ch.). On

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November 27, 2024, the parties agreed to stay the proceeding in exchange for the production of certain documents to the plaintiff; the court granted the stay the same day. On April 18, 2025, the stockholder voluntarily dismissed the complaint without prejudice.

On April 24, 2025, a different stockholder filed a complaint in the Court of Chancery of the State of Delaware requesting production of the Company’s corporate books and records relating to the Nevada conversion and the Company’s dual class capital structure, among other things, pursuant to 8 Del. C. § 220. Richard Scarantino v. The Trade Desk, Inc., No 2025-0442 (Del. Ch.) (the “Scarantino Action”). The case is still at an early stage. On April 28, 2025, the plaintiff in the Scarantino Action filed in the Gunderson Action a motion to intervene and to stay that action.

Litigation Related to Securities Class Actions

On February 19, 2025, plaintiff United Union of Roofers, Waterproofers & Allied Workers Local Union No. 8 WBPA Fund filed a purported federal securities class action complaint in the United States District Court, Central District of California, captioned United Union of Roofers, Waterproofers, and Allied Workers Local Union No. 8 v. The Trade Desk, Inc. et al. (No. 2:25-cv-01396), against the Company as well as its Chief Executive Officer and Chief Financial Officer. The complaint alleges that the defendants made false and misleading statements in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5 promulgated thereunder. The action purports to be brought on behalf of those who purchased or otherwise acquired the Company’s publicly traded securities between May 9, 2024 and February 12, 2025 and seeks unspecified damages and other relief. On March 20, 2025, the court granted the parties’ joint stipulation, ordering that defendants need not respond to the current complaint, pending the appointment of lead plaintiff and lead counsel.

On March 5, 2025, two additional related purported class action lawsuits were filed in the United States District Court, Central District of California, captioned Savorelli v. The Trade Desk, Inc. et al. (No. 2:25-cv-01915), bringing claims against the Company as well as its Chief Executive Officer and Chief Financial Officer, and New England Teamsters Pension Fund v. The Trade Desk, Inc. et al. (No. 2:25-cv-01936), bringing claims against the Company as well as its Chief Executive Officer, Chief Financial Officer and Chief Strategy Officer. Both complaints allege that the defendants made false and misleading statements, similar to the allegations contained in the United Union of Roofers action, in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5 promulgated thereunder. The actions are also purportedly brought on behalf of those who purchased or otherwise acquired the Company’s publicly traded securities between May 9, 2024 and February 12, 2025 and seek unspecified damages and other relief. On March 18, 2025, the court entered orders relating the Savorelli and New England actions to the first-filed United Union of Roofers action, 2:25-cv-01396 (CAS). On March 28, 2025, the court granted the parties’ joint stipulations in the Savorelli and New England matters, ordering that defendants need not respond to the current complaints, pending the appointment of lead plaintiff and lead counsel.

Shareholder Derivative Actions

On March 6, 2025 and March 14, 2025, plaintiffs Nathan C. Silva and Daniel Jong, respectively, filed purported shareholder derivative complaints in the United States District Court, Central District of California, captioned Silva v. Green et al. (No. 2:25-cv-01975) and Jong v. Green et al. (No. 2:25-cv-02268), against current and former officers and directors of the Company, naming the Company as a nominal defendant. The complaints generally arise out of the same allegations contained in the securities class actions and allege claims for breach of fiduciary duties and related claims. The actions purport to be brought derivatively on behalf of the Company and seek damages and other various forms of relief. On April 9, 2025, the court granted the parties’ stipulations consolidating the shareholder derivative actions and appointing Nathan C. Silva and Daniel Jong as Co-Plaintiffs and the Brown Law Firm, P.C. and Rigrodsky Law, P.A. as Co-Lead Counsel for Plaintiffs. The April 9, 2025 order also provided that defendants need not respond to the current complaints, and that the parties provide a proposed scheduling order regarding the designation or filing of an operative consolidated complaint and defendants’ responses thereto by June 9, 2025.

On April 21, 2025, several purported shareholders filed motions in the related actions seeking to be appointed lead plaintiff and lead counsel. Once lead plaintiff and lead counsel are appointed, parties will confer to set a schedule for the filing of any amended complaint and any responsive briefing. The case is still in its early stages. Management believes these claims to be meritless and intends to vigorously defend against them.

Litigation Related to the Company’s Platform and Related Offerings

On March 28, 2025, two complaints alleging various wiretapping and privacy tort theories were filed against the Company in the United States District Court, Northern District of California, captioned Michie & Dryer v. The Trade Desk, Inc., No. 3:25-cv-2889 (N.D. Cal.) and Hernandez-Mendoza v. The Trade Desk, Inc., No. 4:25-cv-02923 (N.D. Cal.). A

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third complaint advancing similar allegations, captioned Turner v. The Trade Desk, Inc., No. 3:25-cv-03136 (N.D. Cal.), was originally filed on March 31, 2025 in the United States District Court, Central District of California, but was voluntarily dismissed and refiled on April 7, 2025 in the United States District Court, Northern District of California. These cases are still in their early stages. Management believes the claims asserted in these complaints to be meritless and intends to vigorously defend against them.

Litigation is inherently uncertain and there can be no assurance regarding the likelihood that the motions to dismiss or defense of the various actions will be successful.

Employment Contracts

The Company has entered into agreements with severance terms with certain employees and officers, all of whom are employed on an at-will basis, subject to certain severance obligations in the event of certain involuntary terminations. The Company may be required to accelerate the vesting of certain stock options and restricted stock in the event of changes in control, as defined, and involuntary terminations.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

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.

We discuss many of these risks in Part II of this Quarterly Report on Form 10-Q in greater detail under the heading “Risk Factors” and in other filings we make from time to time with the Securities and Exchange Commission (the “SEC”). Also, these forward-looking statements represent our estimates and assumptions only as of the date of this Quarterly Report on Form 10-Q, which are inherently subject to change and involve risks and uncertainties. Unless required by federal securities laws, we assume no obligation to update any of these forward-looking statements, or to update the reasons actual results could differ materially from those anticipated, to reflect circumstances or events that occur after the statements are made. Given these uncertainties, investors should not place undue reliance on these forward-looking statements.

Investors should read this Quarterly Report on Form 10-Q and the documents that we reference in this report and have filed with the SEC, including our Annual Report on Form 10-K for the year ended December 31, 2024, completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements.

References to “Notes” are notes included in our unaudited condensed consolidated financial statements appearing elsewhere in this Quarterly Report on Form 10-Q.

Overview

We offer a self-service, cloud-based ad-buying platform that empowers our clients to plan, manage, optimize and measure more expressive data-driven digital advertising campaigns. Our platform allows clients to execute integrated campaigns across ad formats and channels, including CTV and other video, display, audio and native, on a multitude of devices, such as televisions, streaming devices, mobile devices, computers and digital-out-of-home devices. Our platform’s integrations with major inventory, publisher and data partners provide ad buyers reach and decisioning capabilities, and our enterprise APIs enable our clients to customize and expand platform functionality.

Our clients are advertising agencies, advertisers and other service providers for agencies or advertisers, with whom we enter into ongoing MSAs. We generate revenue by charging our clients a platform fee generally based on a percentage of our clients’ total spend on our platform and from providing value-added services and data to support their advertising campaigns.

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Executive Summary

Highlights


	Three Months Ended March 31,
	Dollars				Change
	2025		2024		$		%

	(in thousands, except percentages)
Revenue	$	616,021	$	491,253	$	124,768	25	%
Net income	$	50,678	$	31,660	$	19,018	60	%

Trends, Opportunities and Challenges

The growing digitization of media and fragmentation of audiences has increased the complexity of advertising and thereby increased the need for automation in ad buying, which we provide on our platform. In order to grow, we will need to continue to develop our platform’s programmatic capabilities and expand our advertising inventory, value-added services and data to support our clients’ advertising campaigns. We believe that key opportunities include our ongoing global expansion, continuing development of our omnichannel ad inventory (including in channels such as CTV and other video, mobile, audio and others), adoption and utilization of retail data and continuing development and adoption of the data usage, measurement and targeting capabilities provided by our platform.

We believe that growth of the programmatic advertising market is important for our ability to grow our business. Adoption of programmatic advertising by advertisers allows us to acquire new clients and grow revenue from existing clients. Although our clients include some of the largest advertising agencies and advertisers in the world, we believe there is significant room for us to expand our business relationships with these clients to gain a larger portion of their advertising spend through our platform. We also believe that the industry trends noted above will lead to advertisers adopting programmatic advertising through platforms such as ours.

Similarly, the adoption of programmatic advertising by inventory owners and content providers allows us to expand the volume and type of advertising inventory we present to our clients. For example, we have expanded our CTV, audio and other advertising offerings through our integrations with supply-side partners and publishers. Even if the programmatic advertising market continues to grow, the future of our business will depend on our ability to position ourselves within the market.

We invest for long-term growth. We anticipate that our operating expenses will continue to increase in the foreseeable future as we invest in platform operations for our hosting capabilities as well as technology and development to enhance our platform and related offerings, such as programmatic buying of CTV advertising inventory. We also anticipate that our sales and marketing expenses will continue to increase to acquire new clients and reinforce our relationships with existing clients. In addition, we expect to continue making investments in our infrastructure, including our information technology, financial and administrative systems and controls to support our growing operations.

We believe the markets outside of the United States, and in particular across Europe and Asia in markets such as the U.K, Germany, France, China, Japan, India and Australia, offer opportunities for growth. However, such markets may also pose challenges relating to compliance with local laws and regulations, restrictions on foreign ownership or investment, uncertainty relating to trade relations and a variety of additional risks. We intend to make additional investments in sales and marketing and product development to expand in international markets where we are making significant investments in our platform and growing our team.

We believe that these investments will contribute to our long-term growth, although they may negatively impact profitability in the near term.

Our business model has allowed us to grow significantly, and we believe that our operating leverage enables us to support future long-term growth profitably.

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Macroeconomic Uncertainty

Changes in interest rates, foreign currency exchange rates, inflation, trade policies and practices and other geopolitical developments have resulted, and may continue to result, in a global slowdown of economic activity, which may decrease demand for a broad variety of goods and services in various industries, including those provided by our clients, while also disrupting supply channels, sales channels and advertising and marketing activities for an unknown period of time until economic activity normalizes. As a result of the current uncertainty in economic activity, we are unable to predict the size and duration of the impact on our revenue and our results of operations. The extent of the impact of these macroeconomic factors on our operational and financial performance will depend on a variety of factors, and the duration and extent of geopolitical and global economic disruption and their respective impacts on our clients, partners, industry and employees, all of which are uncertain at this time and cannot be accurately predicted. See “Item 1A. Risk Factors” in Part II. Other Information for further discussion of the adverse impacts of macroeconomic uncertainty on our business.

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

The following tables set forth our condensed consolidated results of operations for the periods presented.


	Three Months Ended March 31,
	2025				2024
	(in thousands)		(% of Revenue)		(in thousands)		(% of Revenue)
Revenue	$	616,021	100	%	$	491,253	100	%
Operating expenses:
Platform operations	142,839		23	%	103,630		21	%
Sales and marketing	152,743		25	%	121,725		25	%
Technology and development	132,402		21	%	107,686		22	%
General and administrative	133,585		22	%	129,555		26	%
Total operating expenses	561,569		91	%	462,596		94	%
Income from operations	54,452		9	%	28,657		6	%
Other expense (income):
Total other income, net	(21,317)		(3)	%	(17,376)		(4)	%
Income before income taxes	75,769		12	%	46,033		9	%
Provision for income taxes	25,091		4	%	14,373		3	%
Net income	$	50,678	8	%	$	31,660	6	%

_______________

Note: Percentages may not sum due to rounding.

Revenue

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.

Platform Operations

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.

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We expect platform operations expenses to increase in absolute dollars in future periods as we continue to experience increased volumes of media impressions through our platform, invest in our hosting capabilities, including supporting new technical features and functionality of our platform and related offerings, and hire additional personnel to support our growth.

Sales and Marketing

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.

We expect sales and marketing expenses to increase in absolute dollars in future periods, as we continue to hire additional personnel and focus on increasing the adoption of our platform and related offerings with existing and new clients and expanding our international business.

Technology and Development

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.

We expect technology and development expense to increase in absolute dollars as we continue to hire additional personnel, invest in the development of our platform and related offerings to support additional features and functionality, increase the number of advertising inventory and data suppliers and support the anticipated increase in volume of advertising spending by our clients on our platform.

General and Administrative

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.

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.

Total Other Income, Net

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

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equivalents and short-term investments driven by higher amounts invested, partially offset by falling portfolio interest rates.

Provision for Income Taxes

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

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.

Liquidity and Capital Resources

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.

We believe our existing cash and cash equivalents, cash flow from operations, and our undrawn available balance under our Amended Credit Facility will be sufficient to meet our working capital requirements and investments we make from time to time for at least the next 12 months. We believe our existing cash and cash equivalents, short-term investments and cash flow from operations will be sufficient to fund our share repurchase program. Further, we have a shelf registration statement on Form S-3 on file with the SEC (the “Shelf Registration”), which permits us to issue equity securities and equity-linked securities from time to time, subject to certain limitations. The Shelf Registration is intended to provide us with additional flexibility to access capital markets for general corporate purposes, subject to market conditions and our capital needs. Our future capital requirements and the adequacy of available funds will depend on many factors, including those set forth in “Item 1A. Risk Factors” within this Quarterly Report on Form 10-Q.

In the future, we may attempt to raise additional capital through the sale of equity securities or through equity-linked or debt-financing arrangements. If we raise additional funds by issuing equity or equity-linked securities, the ownership of our existing stockholders will be diluted. If we raise additional financing by incurring additional indebtedness, we may be subject to increased fixed payment obligations and could also be subject to additional restrictive covenants, such as limitations on our ability to incur additional debt, and other operating restrictions that could adversely impact our ability to conduct our business. Any future indebtedness we incur may result in terms that could be unfavorable to equity investors.

There can be no assurance that we will be able to raise additional capital. The inability to raise capital would adversely affect our ability to achieve our business objectives. In addition, if our operating performance during the next 12 months is below our expectations, our liquidity and ability to operate our business could be adversely affected. We are closely monitoring the effect that current macroeconomic factors may have on our working capital requirements.

Credit Facility

On June 15, 2021, we and a syndicate of banks, led by JPMorgan Chase Bank, N.A., as agent, entered into a Loan and Security Agreement (the “Credit Facility”). The Credit Facility consists of a $450 million revolving loan facility, with a $20 million sublimit for swingline borrowings and a $15 million sublimit for the issuance of letters of credit. Under certain circumstances, we have the right to increase the Credit Facility by an amount not to exceed $300 million.

On December 17, 2021, we amended the Credit Facility to expand the process for issuing letters of credit and the related invoicing, particularly with respect to letters of credit not denominated in U.S. Dollars. On February 9, 2023, we further amended the Credit Facility (as amended, the “Amended Credit Facility”) to transition from a variable interest rate based on the London Interbank Offered Rate to a variable interest rate based on the secured overnight financing rate (“SOFR”).

As of March 31, 2025, we did not have an outstanding debt balance under the Amended Credit Facility. Availability under the Amended Credit Facility was $443 million as of March 31, 2025, which is net of outstanding letters

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of credit of $7 million. The Amended Credit Facility matures, and all outstanding amounts become due and payable, on June 15, 2026. As of March 31, 2025, we were in compliance with all covenants.

For additional information regarding the Amended Credit Facility, refer to Note 6—Debt.

Share Repurchase Program

In February 2023, our board of directors approved a share repurchase program to repurchase our Class A common stock. The share repurchase program, which has no expiration date, is designed to help offset the impact of future share dilution from employee stock issuances. Repurchases under the program may be made in the open market, in privately negotiated transactions or otherwise, with the amount and timing of repurchases determined at our discretion, depending on market conditions and corporate needs. Open market repurchases are structured to occur in accordance with applicable federal securities laws, including within the pricing and volume requirements of Rule 10b-18 under the Exchange Act. We may also, from time to time, enter into Rule 10b5-1 plans to facilitate repurchases of shares under this authorization. This program does not obligate us to acquire any particular amount of Class A common stock, and may be modified, suspended or terminated at any time at the discretion of our board of directors.

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.

Cash Flows

The following table summarizes our cash flows for the periods presented:


	Three Months Ended March 31,
	2025		2024
	(in thousands)
Net cash provided by operating activities	$	291,433	$	185,472
Net cash used in investing activities	$	(132,589)	$	(21,119)
Net cash used in financing activities	$	(409,762)	$	(141,282)

Operating Activities

Our cash flows from operating activities are primarily influenced by growth in our operations, increases or decreases in collections from our clients and related payments to our suppliers for Supplier Components. We typically pay suppliers in advance of collections from our clients. Our collection and payment cycles can vary from period to period. In addition, we expect seasonality to impact cash flows from operating activities on a sequential quarterly basis during the year.

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

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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.

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.

Investing Activities

Our primary investing activities consist of investing in short-term marketable securities, capital expenditures for property and equipment for the expansion of facilities to support our hosting capabilities and growing headcount as well as capital expenditures to develop our software in support of enhancing our platform and related offerings. As our business grows, we expect our capital expenditures to increase, and our other investment activity may increase.

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.

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.

Financing Activities

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.

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.

Off-Balance Sheet Arrangements

We do not have any relationships with other entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities that have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. We did not have any other off-balance sheet arrangements at March 31, 2025 other than the indemnification agreements described below.

Contractual Obligations

Our principal commitments consist of non-cancelable operating leases for our various office and hosting facilities and other contractual commitments consisting of obligations to our hosting services, hardware providers and providers of software as a service. In certain cases, the terms of the lease agreements provide for rental payments on a graduated basis.

The following table summarizes our non-cancelable contractual obligations as of March 31, 2025 (in thousands):


	Payments Due by Period
	Remainder of 2025		2026 and Thereafter		Total
Operating lease commitments	$	33,872	$	690,505	$	724,377
Other contractual commitments	162,039		165,144		327,183
Total	$	195,911	$	855,649	$	1,051,560

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In the ordinary course of business, we enter into agreements in which we may agree to indemnify clients, suppliers, vendors, lessors, business partners, lenders, stockholders and other parties with respect to certain matters, including losses resulting from claims of intellectual property infringement, damages to property or persons, business losses or other liabilities. Generally, these indemnity and defense obligations relate to our own business operations, obligations and acts or omissions. However, under some circumstances, we agree to indemnify and defend contract counterparties against losses resulting from their own business operations, obligations and acts or omissions, or the business operations, obligations and acts or omissions of third parties. These indemnity provisions generally survive termination or expiration of the agreements in which they appear. In addition, we have entered into indemnification agreements with our directors, executive officers and other officers that will require us to indemnify them against liabilities that may arise by reason of their status or service as directors, officers or employees. In the ordinary course of business, demands have been made upon us to provide indemnification under such agreements, but we are not aware of any claims that could have a material effect on our condensed consolidated financial statements. Accordingly, no material amounts have been recorded at March 31, 2025.

Critical Accounting Policies and Estimates

Our condensed consolidated financial statements are prepared in accordance with GAAP. The preparation of these condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses and related disclosures. We evaluate our estimates and assumptions on an ongoing basis. Our estimates are based on historical experience and various other assumptions that we believe to be reasonable under the circumstances. Our actual results could differ from these estimates.

We believe that the assumptions and estimates associated with the evaluation of revenue recognition criteria, including the determination of revenue recognition as net versus gross in our revenue arrangements, stock-based compensation expense and income taxes, including the realizability of deferred tax assets, have the greatest potential impact on our condensed consolidated financial statements. Therefore, we consider these to be our critical accounting policies and estimates.

Recently Issued Accounting Pronouncements

Refer to Note 2—Basis of Presentation and Summary of Significant Accounting Policies of our condensed consolidated financial statements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We have operations both within the United States and internationally, and we are exposed to market risks in the ordinary course of our business. These risks include primarily interest rate and foreign currency exchange risks.

Interest Rate Risk

We are exposed to market risk from changes in interest rates under our Amended Credit Facility, which accrues interest at a variable rate. No amount was owed on our Amended Credit Facility as of March 31, 2025. We have not used any derivative financial instruments to manage our interest rate risk exposure. Based upon the short-term investments amount as of March 31, 2025, a hypothetical one percentage point increase or decrease in the interest rate would result in a corresponding increase or decrease in investment income of approximately $6 million annually.

Foreign Currency Exchange Risk

We have foreign currency exchange risk relating to transactions denominated in currencies other than the U.S. Dollar, principally the Euro, British Pound, Canadian Dollar, Australian Dollar, Japanese Yen, Indian Rupee, Indonesian Rupiah, Hong Kong Dollar and Singapore Dollar. The volatility of exchange rates depends on many factors that we cannot forecast with reliable accuracy. As of March 31, 2025, an immediate 10% adverse change in foreign exchange rates on foreign-denominated accounts would result in a foreign currency loss of approximately $31 million. In the event our non-U.S. Dollar denominated sales and expenses increase, our operating results may be more greatly affected by exchange rate fluctuations.

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We enter into forward contracts or other derivative transactions in an attempt to hedge our foreign currency risk. There can be no assurance that such transactions will be effective in hedging some or all of our foreign currency exposures, and under some circumstances they could generate losses for us.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), evaluated the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act as of March 31, 2025. Our disclosure controls and procedures are designed to provide reasonable assurance that information we are required to disclose in the reports we file or submit under the Exchange Act is accumulated and communicated to our management, including our CEO and CFO, as appropriate to allow timely decisions regarding required disclosures, and is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Based on this evaluation, our CEO and CFO have concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of March 31, 2025.

Changes in Internal Control over Financial Reporting

There have been no significant changes in our internal control over financial reporting during the quarter ended March 31, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on Effectiveness of Controls

Management recognizes that a control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud or error, if any, have been detected. These inherent limitations include the realities that judgments in decision making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

From time to time, we are subject to various legal proceedings, litigation and claims, either asserted or unasserted, that arise in the ordinary course of business. Although the outcome of the various legal proceedings, litigation and claims cannot be predicted with certainty, management does not believe that any of these proceedings or other claims will have a material adverse effect on our business, financial condition, results of operations or cash flows. Regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.

Litigation Related to 2021 CEO Performance Option

On May 27, 2022, a stockholder filed a derivative lawsuit captioned Huizenga v. Green, No. 2022-0461, asserting claims on our behalf against certain members of our board of directors in the Court of Chancery of the State of Delaware. On June 27, 2022, a second derivative lawsuit captioned Pfeiffer v. Green, No. 2022-0560, was filed in the Court of Chancery of the State of Delaware alleging substantially similar claims. Those lawsuits were consolidated on August 18, 2022, and a lead plaintiff was appointed on October 7, 2022. The two complaints alleged generally that the defendants breached their fiduciary duties to us and our stockholders in connection with the negotiation and approval of a market-based performance award to our Chief Executive Officer (the “CEO Performance Option”). The plaintiffs sought a court order rescinding the CEO Performance Option and monetary damages. On November 10, 2022, the plaintiffs filed a consolidated complaint, and on January 12, 2023, the defendants moved to dismiss the consolidated complaint. On February 14, 2025, the court granted the motions to dismiss under Court of Chancery Rule 23.1 in their entirety with prejudice, finding that the plaintiffs did not allege facts sufficient to infer that at least half of our board of directors received a material benefit from the CEO Performance Option, lacked independence from Mr. Green, or faced a “substantia

SEC Form 10-Q filed by The Trade Desk Inc.