The Trade Desk Tops Q4 Estimates but Tumbles as Weak Q1 Guidance Spooks Investors

"Q4 revenue came in slightly above management's own guidance of at least $840 million, up approximately 14% year over year. Adjusted EBITDA margin came in at approximately 47%, beating expectations by a comfortable margin. Non-GAAP EPS of $0.59 was roughly in line with the $0.57 consensus. Full-year 2025 revenue grew 18% year over year."

"Q1 2026 revenue guidance came in about 1.5% below analyst estimates and implies roughly 10% year-over-year growth, a meaningful deceleration from the mid-to-high teens pace we were tracking. Near-term EBITDA guidance also fell short of Street expectations, suggesting near-term margin pressure ahead."

"CEO Jeff Green struck a candid tone on the earnings call. He pointed to softness in consumer packaged goods and automotive verticals, acknowledging uncertainty in those categories not seen in over a decade. He also acknowledged this was not the company's best earnings report. But Green leaned into the competitive narrative, emphasizing The Trade Desk's objectivity as a platform that does not own ad inventory as a key differentiator as supply grows."

Trade Desk delivered Q4 revenue slightly above guidance at approximately $840 million with 14% year-over-year growth and strong 47% adjusted EBITDA margins. Full-year 2025 revenue grew 18% year-over-year. However, Q1 2026 guidance disappointed, implying roughly 10% growth—a meaningful deceleration from the mid-to-high teens pace investors were monitoring. CEO Jeff Green acknowledged softness in consumer packaged goods and automotive verticals, citing uncertainty not seen in over a decade. He emphasized the company's competitive advantage as an objective platform without owned inventory. Loop Capital downgraded the stock to Hold with a reduced price target, attributing at least five growth points to CPG and auto weakness. The board authorized an additional $500 million share repurchase program.

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