Trade Desk Inc. (NASDAQ:TTD)

Return on Assets (ROA)

The return on assets showed an increasing trend from March 2020 through December 2020, rising to approximately 9.42%. However, starting in March 2022, ROA declined sharply, reaching a negative value of -0.25% in December 2022. Following this low point, the ROA steadily recovered throughout 2023 and into early 2025, reaching around 7.22% by September 2024 before showing a slight decrease to 7.0% by June 2025. This pattern indicates a period of strong asset profitability early on, followed by a significant downturn, and subsequent gradual improvement.

Financial Leverage

Financial leverage fluctuated within a relatively narrow range across the entire period. Starting at 2.62 in March 2020, it generally decreased to a low around 2.05 by September 2022, indicating slightly reduced reliance on debt financing. From late 2022 onward, leverage remained fairly stable with a minor upward trend, reaching 2.21 by June 2025. This stability suggests consistent capital structure management with only modest changes in leverage ratios over time.

Return on Equity (ROE)

Return on equity followed a trend similar to ROA but with more pronounced fluctuations. After strong performance near 24% in late 2020, ROE sharply declined starting in early 2022, dipping below zero to -0.51% by December 2022. Subsequently, ROE exhibited a prolonged recovery phase, increasing steadily through 2023 and 2024 to reach over 15% by mid-2025. This recovery corresponds to enhancements in operational efficiency and profitability from shareholders' perspective after a challenging period.

The financial metrics reveal several noteworthy trends over the analyzed periods. Net Profit Margin initially exhibits relatively high values around 26-29% in 2020 but experiences a significant decline starting in early 2022, reaching a low point below zero in December 2022. Subsequently, it recovers gradually, climbing back to a level exceeding 15% by mid-2025. This pattern indicates a period of profitability challenges followed by a sustained recovery phase.

Asset Turnover maintains a generally positive trend throughout the timeline. After starting with values around 0.3 in late 2020, it gradually improves, fluctuating between approximately 0.33 and 0.45. The values depict a modest but consistent increase in the efficiency of using assets to generate revenue, reaching its peak near 0.45 in mid-2025.

Financial Leverage shows a decreasing trend from 2.62 in March 2020 to a low near 2.05-2.07 in 2022-2023, suggesting a reduction in the use of debt relative to equity during that time. After this period, leverage rises slightly again to about 2.2 by mid-2025. The overall movement indicates a strategic adjustment in capital structure with a conservative approach during the mid period, followed by a moderate increase in leverage.

Return on Equity (ROE) follows a trend similar to Net Profit Margin. Initially, ROE is strong, hovering above 20% during 2020 and 2021 but falls sharply to negative territory by late 2022. Post this low point, ROE steadily improves, reaching values exceeding 15% by mid-2025. This reflects the firm's recovery in generating shareholder value after a challenging period.

Profitability

The sharp decline and subsequent recovery in Net Profit Margin and ROE suggest temporary operational or market difficulties that impacted earnings quality but were subsequently addressed effectively.

Efficiency

The gradual improvement in Asset Turnover indicates enhanced asset utilization and revenue generation efficiency over the years.

Capital Structure

The fluctuations in Financial Leverage point to management’s efforts to balance financial risk and growth financing, with a trend toward lower leverage during downturns and a slight increase during recovery phases.

Net Profit Margin

The net profit margin demonstrates a notable downward trend starting from a high point of approximately 29% in the first reported quarter of 2020. It gradually decreases over the subsequent quarters, touching a low of around -0.66% at the end of 2022, indicating a period of unprofitability. Following this trough, there is a gradual recovery with margins improving steadily through 2023 and into 2024, reaching their peak of approximately 16.08% in early 2025. Towards mid-2025, the margin stabilizes slightly lower but remains elevated compared to prior years, indicating improved profitability compared to the years of decline.

Asset Turnover

Asset turnover begins at 0.3 in early 2020 and shows a generally increasing trend with some fluctuations. It peaks at about 0.45 by mid-2025, highlighting improved efficiency in using assets to generate revenue. There are minor periods of stability and slight decline, particularly around 2022 and 2023, but the overarching trend indicates enhanced asset productivity over the examined periods.

Return on Assets (ROA)

Return on Assets mirrors the patterns seen in net profit margin, beginning at 8.8% in early 2020 and experiencing a decline to around -0.25% at the end of 2022, indicative of diminished profitability and asset returns during that interval. Following this low point, ROA gradually recovers, rising to a peak close to 7.22% in late 2024, before slightly tapering off to 7% in mid-2025. This recovery suggests improved operational performance and asset utilization in the latter part of the timeline.