Strong Kokai Adoption Fuels TTD's Revenue Pipeline & Growth Prospects

Launched by The Trade Desk, Inc. TTD in 2023, Kokai is a next-generation platform powered by Koa AI that integrates advanced analytics, enhanced measurement, broad partner integrations and a streamlined experience to help marketers achieve greater precision and relevance in programmatic advertising. As Kokai adoption accelerates, it is emerging as a critical monetization lever that could reshape TTD’s revenue trajectory, margins and long-term competitive moat.

Kokai introduces several advanced features for TTD’s clients and the open Internet, anchored in a distributed AI architecture. Rather than relying on a single model, it uses specialized AI models for each function, such as valuing impressions, managing identity, selecting supply paths, pricing auctions and forecasting campaign performance before any spend occurs. This approach parallelizes AI efforts while creating built-in checks and balances, delivering smarter, more reliable outcomes.

Management noted that nearly all of its clients have tested Kokai, with about 85% now using it as their default platform. Built to deliver greater customer value through stronger performance, Kokai stands out as TTD’s most impactful upgrade to date, surpassing even Solimar. Since launch, campaigns running on Kokai have achieved, on average, 26% better cost per acquisition, 58% better cost per unique reach and a 94% higher click-through rate, remarkable gains on an already industry-leading DSP.

Furthermore, Kokai’s uptake is delivering healthy performance gains for TTD’s clients. In the U.K., Specsavers cut the cost of booking customer appointments by 43% and nearly halved conversion time. At the same time, Danone boosted conversion rates by about one-third for its Actimel brand by leveraging Kokai’s retail data marketplace and omnichannel capabilities. For investors, Kokai’s adoption trajectory may prove to be one of the most important indicators of TTD’s next phase of growth.

With the expanding adoption of Kokai, continued growth in CTV and retail media, broader global support for UID2 and strong client retention, the company is well-positioned to gain market share in 2026, despite macroeconomic uncertainty and intensifying competition from Magnite, Inc. MGNI and Taboola.com Inc. TBLA.

Assessing How Market Rivals are Competing With TTD

Magnite operates as a leading supply-side platform, helping publishers manage and monetize their ad inventory across channels, including streaming, online video, display and audio. Processing billions of impressions each month, Magnite’s growth is fueled by its SpringServe ad server and streaming SSP platform. It delivered a strong third quarter, driven by standout CTV growth of 18% ex-TAC, or 25% excluding political spend, surpassing expectations. DV+ also performed well, meeting guidance. Within CTV, ClearLine, buyer marketplaces and live sports continue to be key areas of strength. MGNI added Viant’s Direct Access to its direct integrations, joining Amazon APS, Yahoo Backstage and Trade Desk’s OpenPath.

Taboola is a leading global player in performance advertising, enabling businesses to scale across the open web. Its new platform, Realize, broadens Taboola’s focus beyond native ads into larger performance channels such as display and social. Enhanced with generative AI, Realize delivers measurable outcomes through a simple, AI-driven interface similar to Google Ads or Meta Ads. However, instead of relying on search or social ecosystems, Realize reaches nearly 600 million users each day across premium open-web partners, including Yahoo, NBC, ESPN and Apple News. Powered by AI and first-party data rooted in genuine user interests, the platform offers advertisers deeper insights and more impactful results.

TTD Price Performance, Valuation & Estimates

Shares of TTD have lost 71.7% in the past year against the Zacks Internet – Services industry’s growth of 61.6%.

In terms of forward price/earnings, TTD’s shares are trading at 26.86X compared with the Internet Services industry’s 29.52X.

The Zacks Consensus Estimate for TTD’s earnings for 2025 has remained unchanged over the past 60 days.

TTD currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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