Mix and Take Rate

Mix and Take Rate

The Trade Desk's take rate — revenue as a percentage of the gross advertising spend it processes — stepped up in FY2025 rather than compressing: gross spend on the platform grew 11% to $13.4 billion while revenue grew 18%, lifting the take rate to roughly 21.6% from a stable ~20.3% [1]. The composition underneath — connected TV now the largest channel, retail data attaching to more spend — is where the premium comes from, and where the deceleration also shows first.

Source: FY2025 Annual Report (Form 10-K), Item 7 MD&A Executive Summary — gross spend $13,394,683 thousand, revenue $2,896,284 thousand [2].

The take rate held, then widened

The Trade Desk does not sell media; it charges a platform fee that is generally a percentage of what a client spends buying advertising through the platform, plus revenue from data and value-added services [3]. The company itself calls revenue as a percentage of gross spend the take rate, and warns in each filing that it will fluctuate with the mix of services clients select and with volume discounts [4].

Across the four years where gross spend is disclosed, that rate has been strikingly stable near 20%, then stepped up in FY2025.

Source: derived from reported revenue and gross spend, FY2022–FY2025 10-Ks — FY2022 $7,741M and FY2023 $9,611M gross spend [5]; FY2024 $12,041M and FY2025 $13,395M [6].

The stability matters because the standing bear worry on this business, for the full decade it has been public, is that the fee must eventually erode toward the low-single-digit rates walled gardens advertise. FY2025 ran the other way: revenue outgrew the actual dollars flowing through the platform by roughly seven points.

Source: FY2025 Annual Report reports FY2025 revenue up 18% and gross spend up 11% [7]; FY2023–FY2024 growth derived from the same disclosures [8].

That wedge cuts two ways, and both belong in the read. It confirms pricing power: the company is capturing more per dollar even as growth cools, which is what a durable moat in value-added data should look like. It also flags that the underlying volume of advertising running through the platform — gross spend — grew only 11% in FY2025, decelerating harder than the 18% revenue line. Part of the reported top-line growth is take-rate expansion that need not repeat; the raw demand signal beneath it is softer than the headline suggests. That is the same slowdown the Deceleration chapter traces, seen one layer down.

What the spend is made of

The Trade Desk reports channel and geographic mix qualitatively on every call rather than in the filings, so the shares below are the midpoints of management's disclosed ranges. The shift they describe is unambiguous: connected TV, folded into video, has moved from second place behind mobile to the largest and fastest-growing channel.

Sources: Q2 2021 call — mobile a low-40s share, video a high-30s share, display and audio about 15% and 5% [9]; Q3 2024 — video a high-40s share, mobile mid-30s, display low double-digit, audio around 5% [10]; Q1 2025 similar [11].

In Q2 2021, mobile was the largest channel at a low-40s share and video a high-30s share [12]. By Q1 2025, video including CTV held a high-40s share and was still growing as a fraction of the mix, mobile had eased to the mid-30s, display sat at a low double-digit share and audio held near 5% [13]. CTV is both the best channel — premium, data-rich inventory the walled gardens do not fully control — and the one management names as leading growth "by a wide margin" quarter after quarter. The mix is shifting toward exactly the inventory where an independent buy-side platform is hardest to displace, which is the concrete version of the independence case made in Independence Moat.

The international share that has not moved

Management describes international as a persistent growth engine: spend outside North America outpaced spend inside it for the ninth consecutive quarter as of Q1 2025, and for the seventh consecutive quarter as of Q3 2024 [14] [15]. Yet the share of spend has barely moved. International was about 13% of spend in Q2 2021 and about 12% by Q1 2025 [16] [17].

Sources: Q2 2021 — North America 87%, international 13% [18]; Q3 2024 and Q1 2025 — North America about 88%, international about 12% [19] [20].

The two facts reconcile: the "outpacing" streak is recent, running from roughly 2023, and before it North American CTV grew faster during the 2021–2022 streaming surge. Nine quarters of faster international growth have clawed the share back toward, not past, where it stood four years earlier. International remains a long runway rather than a lever already pulling the blend up — a useful correction to any bull case that leans on geography to reaccelerate the whole business quickly.

Why the premium holds

Management's answer to the compression worry is that low headline fees are not the same as low cost. On the Q4 2025 call, Jeff Green noted that for the decade the company has been public there has been "a narrative that our margin or take rate must compress" because rivals advertise lower upfront prices, and argued those models make it up by marking up their own owned-and-operated inventory [21]. He cited an agency strategy VP: even where a commerce walled garden charges "1% or no fees," the effective CPM the agency pays ends up higher than on comparable Trade Desk campaigns, once weaker reporting and pricier data are counted [22].

The mechanism that lifts the effective take is data. The company frames leaning into data and value-added services as a shared win — better returns for advertisers, higher CPMs for content owners, and more revenue for The Trade Desk [23]. Retail data is the newest and largest expression of it: spend influenced by retail data hit record levels in 2025, the retailers in the marketplace represent more than half of global retail sales, and most send their data through the company's UID2 identity framework [24]. The FY2025 filing names third-party and first-party retail data, and AI embedded in the platform, among the core drivers of future growth [25]. More attached data per campaign is the plausible reason the take rate widened in FY2025 rather than eroding.

The strongest fact against this read comes from the company's own risk disclosure: it warns that as programmatic matures, growth in spend may outpace growth in revenue because of pricing competition, volume discounts, and shifts in media, client, and channel mix [26]. That is a precise description of take-rate compression, and it is the outcome the FY2025 numbers did not produce — but it names the conditions under which they would. The read here is that the premium is holding on evidence, not assertion: the disclosed take rate rose while volume growth slowed, which is consistent with a mix shift toward data-rich CTV and retail rather than a race to cheap reach. What would change it is a reversal of the FY2025 pattern — gross spend growing faster than revenue for consecutive quarters, or a step-down in take rate — which would signal that volume discounts to hold large agencies are finally outrunning the data attach.