TLDR
- Q4 2025 revenue reached $846.8 million, marking 14.3% year-over-year growth and surpassing consensus by 0.6%
- Adjusted EBITDA of $400.3 million exceeded analyst forecasts by 6.4%
- Q1 2026 revenue outlook of $678 million missed expectations by 1.5%, projecting approximately 10% growth
- Shares plunged 15.6% to $21.41 following the earnings announcement, continuing a challenging start to 2026
- An interim CFO is currently leading finance operations while macro pressures weigh on CPG and auto verticals
The Trade Desk delivered Q4 2025 revenue of $846.8 million, representing a 14.3% increase from the previous year. This figure narrowly surpassed Wall Street’s projection of $841.9 million by 0.6%.
Adjusted EBITDA reached $400.3 million, significantly exceeding the $376.4 million consensus forecast. The operating margin expanded to 30.3%, compared to 26.4% during the corresponding period last year.
Adjusted earnings per share of $0.59 aligned with analyst expectations, while free cash flow margin surged to 33.3% from 21% in the previous quarter.
Despite these strong results, shares plummeted 15.6% to $21.41 in after-hours trading. The reason? Forward-looking guidance disappointed.
Management projected Q1 2026 revenue of “at least” $678 million, falling approximately 1.5% short of the $688.1 million analyst consensus. This guidance suggests roughly 10% year-over-year expansion, a notable deceleration from Q4’s 14% growth rate.
The profitability outlook proved even more concerning. The Trade Desk forecasted Q1 2026 adjusted EBITDA of approximately $195 million, trailing the $208 million delivered in Q1 2025. This represents an expected year-over-year decline in both top-line growth and profitability metrics.
CEO Jeff Green acknowledged the company is navigating “against a backdrop of macro uncertainty,” highlighting specific challenges in consumer packaged goods and automotive advertising segments. Combined, these two categories represent more than 25% of total business.
Revenue Growth Has Been Decelerating Consistently
The slowdown trend has been emerging over multiple quarters. Revenue expansion measured 25% in Q1 2025, then moderated to 19% in Q2, 18% in Q3, and most recently 14% in Q4. The pattern is becoming increasingly evident.
For comparison, Meta Platforms reported Q4 revenue growth of 24% year over year in the identical macroeconomic climate and provided Q1 2026 guidance suggesting approximately 30% expansion. This contrast intensifies scrutiny on TTD’s performance trajectory.
Over the trailing five-year period, The Trade Desk has achieved a 28.2% compounded annual revenue growth rate, substantially outpacing software industry averages. However, the two-year annualized rate has declined to 22%, and Wall Street analysts are forecasting 15.6% growth over the upcoming twelve months.
On a brighter note, the company’s customer acquisition cost payback period registered at just 5.5 months, demonstrating robust product-market fit and competitive differentiation.
CFO Transition Compounds Investor Anxiety
The company is presently functioning with an interim CFO after another recent change in the finance leadership position. The search for a permanent successor remains underway.
While CFO transitions don’t necessarily indicate fundamental problems, the timing compounds existing investor worries — decelerating growth, underwhelming guidance, and macroeconomic challenges in critical advertising verticals.
The Trade Desk’s artificial intelligence platform Koa and the strategic shift toward company-owned data infrastructure represent key investments management believes will fuel future growth. These initiatives carry short-term margin pressures.
At the post-earnings stock price near $21, TTD is valued at approximately 23 times GAAP earnings, following a 15% year-over-year EPS increase to $0.90 in 2025.
Shares have declined substantially from the 52-week peak of $91.45.
The Q1 2026 outlook calling for at least $678 million in revenue and $195 million in adjusted EBITDA reflects management’s current expectations as communicated during the February 25 earnings conference call.
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