Item 1. Condensed Consolidated Financial Statements

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Item 1. Condensed Consolidated Financial Statements

THE TRADE DESK, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except par values)

(Unaudited)

As of September 30, 2025As of December 31, 2024
ASSETS
Current assets:
Cash and cash equivalents$653,134$1,369,463
Short-term investments, net792,313552,026
Accounts receivable, net of allowance for credit losses of $12,210 and $11,244 as of September 30, 2025 and December 31, 2024, respectively3,478,3383,330,343
Prepaid expenses and other current assets196,50184,626
TOTAL CURRENT ASSETS5,120,2865,336,458
Property and equipment, net322,507209,332
Operating lease assets287,104263,761
Deferred income taxes110,514230,214
Other assets, non-current99,99072,186
TOTAL ASSETS$5,940,401$6,111,951
LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES
Current liabilities:
Accounts payable$2,761,261$2,631,213
Accrued expenses and other current liabilities160,381177,760
Operating lease liabilities73,12964,492
TOTAL CURRENT LIABILITIES2,994,7712,873,465
Operating lease liabilities, non-current302,848247,723
Other liabilities, non-current41,99641,618
TOTAL LIABILITIES3,339,6153,162,806
Commitments and contingencies (Note 11)
STOCKHOLDERS’ EQUITY
Preferred stock, par value $0.000001; 100,000 shares authorized, zero shares issued and outstanding as of September 30, 2025 and December 31, 2024——
Common stock, par value $0.000001 Class A, 1,000,000 shares authorized; 441,453 and 452,182 shares issued and outstanding as of September 30, 2025 and December 31, 2024, respectively Class B, 95,000 shares authorized; 43,276 and 43,919 shares issued and outstanding as of September 30, 2025 and December 31, 2024, respectively——
Additional paid-in capital2,965,2312,594,896
Retained earnings (accumulated deficit)(364,445)354,249
TOTAL STOCKHOLDERS’ EQUITY2,600,7862,949,145
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY$5,940,401$6,111,951

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

THE TRADE DESK, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited)

Three Months Ended September 30,Nine Months Ended September 30,
2025202420252024
Revenue$739,433$628,016$2,049,493$1,703,819
Operating expenses:
Platform operations162,154122,656455,973336,745
Sales and marketing156,830140,296470,704395,888
Technology and development127,893117,705394,546335,426
General and administrative131,337138,878395,822403,902
Total operating expenses578,214519,5351,717,0451,471,961
Income from operations161,219108,481332,448231,858
Other expense (income):
Interest income, net(16,490)(19,408)(54,657)(53,886)
Foreign currency exchange loss (gain), net(1,810)711(1,384)41
Total other income, net(18,300)(18,697)(56,041)(53,845)
Income before income taxes179,519127,178388,489285,703
Provision for income taxes63,97233,020132,13574,856
Net income$115,547$94,158$256,354$210,847
Earnings per share:
Basic$0.24$0.19$0.52$0.43
Diluted$0.23$0.19$0.52$0.42
Weighted-average shares outstanding:
Basic487,729491,614491,069489,845
Diluted492,984502,563497,198500,273

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

THE TRADE DESK, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands)

(Unaudited)

Class A and B Common StockAdditional Paid-In CapitalRetained Earnings (Accumulated Deficit)Total Stockholders’ Equity
SharesAmount
Balance as of December 31, 2023488,916$—$1,967,265$196,954$2,164,219
Exercise of common stock options719—10,804—10,804
Issuance of restricted stock, net of forfeitures and shares withheld for taxes620—(26,806)—(26,806)
Repurchases of Class A common stock(1,527)——(125,370)(125,370)
Stock-based compensation——112,048—112,048
Net income———31,66031,660
Balance as of March 31, 2024488,728—2,063,311103,2442,166,555
Exercise of common stock options1,167—27,360—27,360
Issuance of restricted stock, net of forfeitures and shares withheld for taxes1,007—(31,563)—(31,563)
Issuance of common stock under employee stock purchase plan698—30,122—30,122
Repurchases of Class A common stock———9090
Stock-based compensation——127,813—127,813
Net income———85,02985,029
Balance as of June 30, 2024491,600—2,217,043188,3632,405,406
Exercise of common stock options1,810—89,526—89,526
Issuance of restricted stock, net of forfeitures and shares withheld for taxes554—(39,394)—(39,394)
Repurchases of Class A common stock(517)——(53,871)(53,871)
Stock-based compensation——129,925—129,925
Net income———94,15894,158
Balance as of September 30, 2024493,447$—$2,397,100$228,650$2,625,750
Balance as of December 31, 2024496,101$—$2,594,896$354,249$2,949,145
Exercise of common stock options597—6,478—6,478
Issuance of restricted stock, net of forfeitures and shares withheld for taxes782—(29,457)—(29,457)
Issuance of common stock relating to business acquisition127—10,299—10,299
Repurchases of Class A common stock(6,288)——(400,409)(400,409)
Stock-based compensation——129,950—129,950
Net income———50,67850,678
Balance as of March 31, 2025491,319—2,712,1664,5182,716,684
Exercise of common stock options410—8,261—8,261
Issuance of restricted stock, net of forfeitures and shares withheld for taxes1,292—(27,591)—(27,591)
Issuance of common stock under employee stock purchase plan625—34,531—34,531
Repurchases of Class A common stock(3,748)——(257,003)(257,003)
Stock-based compensation——130,822—130,822
Net income———90,12990,129
Balance as of June 30, 2025489,898—2,858,189(162,356)2,695,833
Exercise of common stock options251—6,239—6,239
Issuance of restricted stock, net of forfeitures and shares withheld for taxes785—(22,678)—(22,678)
Repurchases of Class A common stock(6,205)——(317,636)(317,636)
Stock-based compensation——123,481—123,481
Net income———115,547115,547
Balance as of September 30, 2025484,729$—$2,965,231$(364,445)$2,600,786

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

THE TRADE DESK, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

Nine Months Ended September 30,
20252024
OPERATING ACTIVITIES:
Net income$256,354$210,847
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization83,82463,378
Stock-based compensation378,454365,470
Deferred income taxes118,163—
Noncash lease expense51,23441,522
Provision for expected credit losses on accounts receivable1,498837
Other(13,841)(11,901)
Changes in operating assets and liabilities:
Accounts receivable(149,053)(125,711)
Prepaid expenses and other current and non-current assets(91,574)(68,490)
Accounts payable120,38187,175
Accrued expenses and other current and non-current liabilities(26,798)8,846
Operating lease liabilities(47,510)(31,918)
Net cash provided by operating activities681,132540,055
INVESTING ACTIVITIES:
Purchases of investments(826,210)(486,596)
Maturities of investments597,413475,022
Purchases of property and equipment(170,688)(78,048)
Capitalized software development costs(9,093)(6,708)
Business acquisition(4,350)—
Net cash used in investing activities(412,928)(96,330)
FINANCING ACTIVITIES:
Repurchases of Class A common stock(957,540)(177,428)
Proceeds from exercise of stock options20,287127,690
Proceeds from employee stock purchase plan32,44630,122
Taxes paid relating to net settlement of restricted stock awards(79,726)(97,763)
Net cash used in financing activities(984,533)(117,379)
Increase (decrease) in cash and cash equivalents(716,329)326,346
Cash and cash equivalents—Beginning of period1,369,463895,129
Cash and cash equivalents—End of period$653,134$1,221,475
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for operating lease liabilities$56,863$48,524
Operating lease assets obtained in exchange for operating lease liabilities$76,052$94,410
Capitalized assets financed by accounts payable$30,511$10,217
Repurchases of Class A common stock in accrued expenses and other current liabilities$19,407$1,723
Tenant improvements paid by lessor$14,379$—
Assets acquired in a business combination, included in other assets, non-current, in exchange for Class A common stock$10,299$—
Stock-based compensation included in capitalized software development costs$5,799$4,316

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

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 leader in advertising technology. The Company’s platform empowers ad buyers to create, manage and optimize digital advertising campaigns across ad formats, channels and devices. The platform’s depth, artificial intelligence (“AI”) capabilities and rich ecosystem of inventory, publisher and data partner integrations enable superior reach and decisioning for clients. In addition to the primary capabilities provided by its self-service platform, the Company’s enterprise application programming interfaces (“APIs”) equip its clients with the ability 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 and nine months ended September 30, 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 September 30, 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.

Recent Accounting Pronouncements Not Yet Adopted

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“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 year ending December 31, 2025. Early adoption is permitted. The Company will adopt the guidance in its Annual Report on Form 10-K for the year ending December 31, 2025, which will result in additional disclosure in the notes to the consolidated financial statements.

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 year ending December 31, 2027, and for interim periods beginning with the Company’s Quarterly Report on Form 10-Q for the quarter ending March 31, 2028. Early adoption is permitted. The Company is currently evaluating the impact of the new guidance on its disclosures.

In July 2025, the FASB issued ASU 2025-05, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. The standard amends ASC 326-20 to provide an optional practical expedient (for all entities) and an accounting policy election (for all entities, other than public business entities, that elect the practical expedient) related to the estimation of expected credit losses for current accounts receivable and current contract assets that arise from transactions accounted for under Accounting Standards Codification (“ASC”) Topic 606. The guidance will be effective on a prospective basis for annual periods, including interim reporting periods therein, beginning after December 15, 2025, with early adoption permitted. The Company is currently evaluating the impact of this guidance on its financial statements and related disclosures.

In September 2025, the FASB issued ASU 2025-06, Intangibles — Goodwill and Other — Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. The guidance clarifies and modernizes the accounting for costs related to internal-use software, including removing references to software development project stages and clarifying certain requirements for recognition and disclosure of capitalized software development costs and capitalized implementation costs for cloud computing arrangements. The guidance will be effective for annual periods, including interim reporting periods therein, beginning after December 15, 2027, with early adoption permitted. The guidance may be applied using a prospective, retrospective or modified transition approach. The Company is currently evaluating the impact of this guidance on its financial statements and related 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 September 30,Nine Months Ended September 30,
2025202420252024
Numerator:
Net income$115,547$94,158$256,354$210,847
Denominator:
Weighted-average shares outstanding—basic487,729491,614491,069489,845
Effect of dilutive securities5,25510,9496,12910,428
Weighted-average shares outstanding—diluted492,984502,563497,198500,273
Basic earnings per share$0.24$0.19$0.52$0.43
Diluted earnings per share$0.23$0.19$0.52$0.42
Anti-dilutive equity awards under stock-based award plans excluded from the determination of diluted earnings per share16,1422,66716,1422,667

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 September 30, 2025
Cash and Cash EquivalentsShort-Term Investments, NetTotal
Cash$242,833$—$242,833
Level 1:
Money market funds319,039—319,039
Level 2:
Commercial paper91,262237,897329,159
Corporate debt securities—373,439373,439
U.S. government and agency securities—180,977180,977
Total$653,134$792,313$1,445,447
As of December 31, 2024
Cash and Cash EquivalentsShort-Term Investments, NetTotal
Cash$218,448$—$218,448
Level 1:
Money market funds1,031,413—1,031,413
Level 2:
Commercial paper101,163129,879231,042
Corporate debt securities3,498281,775285,273
U.S. government and agency securities14,941140,372155,313
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 and nine months ended September 30, 2025 and 2024, were immaterial.

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

September 30, 2025
Due in one year$678,089
Due in one to two years114,224
Total$792,313

Note 5—Leases

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

Three Months Ended September 30,Nine Months Ended September 30,
2025202420252024
Operating lease cost$17,089$15,062$52,171$41,259
Short-term lease cost6226662,2121,554
Variable lease cost4,9154,25515,17811,863
Sublease income———(42)
Total lease cost$22,626$19,983$69,561$54,634

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 (“LIBOR”) 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 September 30, 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 September 30, 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 September 30, 2025, the Company was in compliance with all covenants.

Note 7—Capitalization

The Class A and Class B common stock have the same rights and preferences, including rights to dividends, except the Class B common stock is entitled to ten votes per share and the Class A common stock is entitled to one vote per share. Each share of Class B common stock is convertible into one share of Class A common stock at any time at the option of the holder. In addition, each share of Class B common stock will convert automatically into one share of Class A common stock upon any transfer, except for certain transfers described in the Company’s amended and restated articles of incorporation, including, without limitation, certain transfers for tax and estate planning purposes. The Company’s amended and restated articles of incorporation provide that all Class B common stock will convert automatically into Class A common stock on December 22, 2035, unless converted prior to such date pursuant to the Company’s amended and restated articles of incorporation.

The Company’s board of directors has the discretion to issue shares of preferred stock and determine the rights, preferences, privileges and restrictions, including voting rights, and the designation, preferences, relative rights, participating rights, optional rights or other special rights of any such series of preferred stock.

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 September 30, 2025, the Company repurchased and subsequently retired 6 million shares of its Class A common stock for an aggregate repurchase amount of $318 million. During the nine months ended September 30, 2025, the Company repurchased and subsequently retired 16 million shares of its Class A common stock for an aggregate repurchase amount of $975 million. The aggregate repurchase amounts for the three and nine months ended September 30, 2025, included $2 million and $6 million, respectively, relating to the 1% excise tax on share repurchases, net of share issuances, from the Inflation Reduction Act of 2022 (“IRA”). As of September 30, 2025, $60 million remained available and authorized for repurchases. In October 2025, the Company used the remaining $60 million authorized for repurchases and an additional $500 million was authorized under this program. 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 September 30,Nine Months Ended September 30,
2025202420252024
Platform operations$7,953$7,617$26,253$20,444
Sales and marketing28,13325,29487,43770,654
Technology and development40,19736,958123,97897,441
General and administrative45,03358,641140,786176,931
Total$121,316$128,510$378,454$365,470

On May 27, 2025, the Company’s stockholders approved the 2025 Incentive Award Plan (the “2025 Plan”), which was previously adopted by the Company’s board of directors and is an amendment and restatement of the 2016 Incentive Award Plan (the “2016 Plan”). The changes from the 2016 Plan to the 2025 Plan include removing the ten-year plan expiration date and providing other minor technical and administrative updates. Existing stock-based awards granted under the 2016 Plan are unaffected by the technical and administrative updates in the 2025 Plan. The “evergreen” provision for annual increases in issuable shares will still end on and include January 1, 2026. The Company does not currently expect the new or modified provisions of the 2025 Plan to materially impact its financial statements in the near term.

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, 20249,813$43.31
Granted4,01153.33
Exercised(1,258)16.53
Expired/Forfeited(736)70.93
Outstanding as of September 30, 202511,830$47.83
Exercisable as of September 30, 20256,330$36.44

Stock-based compensation expense relating to stock options was $20 million and $19 million for the three months ended September 30, 2025 and 2024, respectively. Stock-based compensation expense relating to stock options was $52 million and $47 million for the nine months ended September 30, 2025 and 2024, respectively. As of September 30, 2025, the Company had unrecognized stock-based compensation relating to stock options of approximately $172 million, which is expected to be recognized over a weighted-average period of 3.0 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 2016 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 under the CEO Performance Option were granted, exercised, forfeited or expired during the three and nine months ended September 30, 2025. As of September 30, 2025, the CEO Performance Option had 17.8 million options outstanding and 3.4 million exercisable options.

Stock-based compensation of $14 million and $30 million for the CEO Performance Option was recorded as a component of general and administrative expense during the three months ended September 30, 2025 and 2024,

respectively. Stock-based compensation of $57 million and $102 million for the CEO Performance Option was recorded as a component of general and administrative expense during the nine months ended September 30, 2025 and 2024, respectively. As of September 30, 2025, the Company had unrecognized stock-based compensation relating to the CEO Performance Option of $15 million that is expected to be recognized over a weighted-average period of 0.4 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, 202410,197$73.62
Granted6,82055.68
Vested(3,398)68.45
Forfeited(1,033)69.71
Unvested as of September 30, 202512,586$65.62

Stock-based compensation expense relating to restricted stock was $84 million and $73 million for the three months ended September 30, 2025 and 2024, respectively. Stock-based compensation expense relating to restricted stock was $236 million and $197 million for the nine months ended September 30, 2025 and 2024, respectively. As of September 30, 2025, the Company had unrecognized stock-based compensation relating to restricted stock of approximately $761 million, which is expected to be recognized over a weighted-average period of 2.8 years.

Employee Stock Purchase Plan (“ESPP”)

Stock-based compensation expense relating to the ESPP was $3 million and $7 million for the three months ended September 30, 2025 and 2024, respectively. Stock-based compensation expense relating to the ESPP was $33 million and $20 million for the nine months ended September 30, 2025 and 2024, respectively. As of September 30, 2025, the Company had unrecognized stock-based compensation relating to ESPP awards of approximately $5 million, which is expected to be recognized over a weighted-average period of 0.9 years.

Note 9—Income Taxes

In determining the interim provision for income taxes for each of the three and nine months ended September 30, 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 September 30, 2025 and 2024, the provision for income taxes included benefits (detriments) associated with stock-based awards of $(2) million and $14 million, respectively. For the nine months ended September 30, 2025 and 2024, the provision for income taxes included benefits associated with stock-based awards of $12 million and $43 million, respectively.

For the nine months ended September 30, 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.

There were no material changes to the Company’s unrecognized tax benefits during the nine months ended September 30, 2025, and the Company does not expect to have any significant changes to unrecognized tax benefits through the end of the fiscal year.

On July 4, 2025, the United States enacted the One Big Beautiful Bill Act (the “OBBBA”), which changes or makes permanent certain tax laws for corporations, including provisions relating to domestic research and development costs, bonus depreciation and foreign derived intangible income. While the Company is still evaluating the full impact of

the OBBBA, the primary impact is the option to immediately deduct domestic research and development costs paid or incurred after December 31, 2024, for income tax purposes. In addition, the OBBBA allows for the accelerated deduction of any remaining unamortized domestic research and development costs over a one-year or two-year period beginning after December 31, 2024, at the Company’s election. As a result, during the three months ended September 30, 2025, the Company recognized $118 million relating to domestic research and development costs as income taxes receivable, presented in prepaid expenses and other current assets, with a corresponding reduction in deferred tax assets. The Company will continue to evaluate the impact of the OBBBA on its income taxes through the end of the 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 September 30,Nine Months Ended September 30,
2025202420252024
Interest expense$356$374$1,139$1,125
Interest income(16,846)(19,782)(55,796)(55,011)
Interest income, net$(16,490)$(19,408)$(54,657)$(53,886)

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 September 30,Nine Months Ended September 30,
2025202420252024
United States86%88%86%88%
International14%12%14%12%
Total100%100%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 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 September 30, 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 of Chancery’s decision. The parties completed briefing the appeal on June 13, 2025, and the Delaware Supreme Court heard oral argument on October 22, 2025. The appeal remains pending.

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. On May 20, 2025, the Court granted the motion to intervene and stayed the Gunderson Action pending completion of the books and records inspection in the Scarantino Action.

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 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 was referred to a Magistrate in Chancery for trial, and a trial was held on July 16, 2025. On July 31, 2025, the Magistrate in Chancery issued a final report, in which she found that the stockholder plaintiff could receive certain limited requested board materials. The stockholder plaintiff filed exceptions to the Magistrate’s final report, and briefing on plaintiff’s exceptions was completed on September 26, 2025. The parties are awaiting a decision.

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 then-Chief Financial Officer. The complaint alleged 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 purported 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 sought unspecified damages and other relief. On March 20, 2025, the court granted the parties’ joint stipulation, ordering that defendants need not respond to the 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 then-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, then-Chief Financial Officer and Chief Strategy Officer. Both complaints alleged 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 were 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 sought 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, No. 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 complaints, pending the appointment of lead plaintiff and lead counsel.

On April 21, 2025, several purported shareholders filed motions in the related actions seeking to be appointed lead plaintiff. On June 4, 2025, the court consolidated all three actions and recaptioned the action “In re The Trade Desk, Inc. Securities Litigation,” No. 2:25-cv-01396 (the “Consolidated Action”), and appointed Arkansas Public Employees Retirement System and Public Employees Retirement System of Mississippi as lead plaintiff in the Consolidated Action.

Plaintiffs filed a First Amended Consolidated Class Action Complaint (“First Amended Complaint”) on August 15, 2025. The First Amended Complaint purports to be brought on behalf of those who purchased or otherwise acquired the Company’s publicly traded securities between November 15, 2023 and August 8, 2025. It 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 First Amended Complaint also asserts a separate claim under

Section 20A alleging that the Company’s Chief Executive Officer, then-Chief Financial Officer and Chief Strategy Officer engaged in insider trading during the proposed class period.

Defendants filed a motion to dismiss the Consolidated Action on October 14, 2025. The motion remains pending. The case is still in its early stages. Management believes these claims to be meritless and intends to vigorously defend against them.

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 action 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. On April 24, 2025, the court granted the parties' stipulation staying the consolidated derivative action until resolution of the motion(s) to dismiss the consolidated securities class action (described above). The order also provided that plaintiffs may file an amended complaint, but defendants are under no obligation to respond during the pendency of the stay.

On September 11, 2025, plaintiff Cara Gardner filed a purported shareholder derivative complaint in the U.S. District Court for the District of Nevada, captioned Cara Gardner v. Jeff T. Green et al. (No. 2:25-cv-01712), against current and former officers and directors of the Company, naming the Company as a nominal defendant. The complaint generally arises out of the same allegations contained in the securities class action and alleges claims for breach of fiduciary duties and related claims. The action purports to be brought derivatively on behalf of the Company and seeks damages and other various forms of relief.

On October 3, 2025, plaintiff Ahmed Ibrahim filed a purported shareholder derivative complaint in the U.S. District Court for the District of Nevada, captioned Ahmed Ibrahim v. Jeff T. Green et al. (No. 2:25-cv-01892), against current and former officers and directors of the Company, naming the Company as a nominal defendant. The complaint generally arises out of the same allegations contained in the securities class actions and alleges claims for breach of fiduciary duties and related claims. The action purports to be brought derivatively on behalf of the Company and seeks damages and other various forms of relief.

On October 22, 2025, the Company and plaintiffs Cara Gardner and Ahmed Ibrahim filed a joint proposed stipulation to consolidate the Nevada derivative complaints and stay the actions until resolution of the motion to dismiss the Consolidated Action. Under the proposed stipulation, plaintiffs may file a consolidated complaint or designate an operative complaint, but defendants are under no obligation to respond during the pendency of the stay.

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 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. On June 18, 2025, the Court consolidated all three actions and recaptioned the consolidated action “In re The Trade Desk, Inc. Data Privacy Litigation” (No. 3:25-cv-2889), and appointed Lieff Cabraser Heimann & Bernstein, LLP as Interim Lead Counsel, with a Plaintiffs’ Executive Committee consisting of Simmons Hanly Conroy LLP, Lowey Dannenberg, P.C. and Bursor & Fisher, P.A. The complaints have now been consolidated into a single consolidated amended complaint, filed July 18, 2025.

The Company filed a motion to dismiss the consolidated amended complaint on September 2, 2025. Plaintiffs filed their opposition to the motion to dismiss on October 17, 2025. The motion to dismiss remains pending and the case is still in its early stages. Management believes the claims asserted in this action 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. The Company may be required to accelerate the vesting of certain stock-based awards in the event of changes in control, as defined, and involuntary terminations.

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