The Trade Desk (TTD) Stock Drops 15% After Q4 Beat But Weak Guidance – Time to Buy?

TLDR

• The Trade Desk reported Q4 2025 revenue of $846.8 million, up 14.3% year over year, beating estimates by 0.6%
• Adjusted EBITDA of $400.3 million beat analyst expectations by 6.4%
• Q1 2026 revenue guidance of $678 million came in 1.5% below analyst estimates, implying ~10% growth
• The stock dropped 15.6% to $21.41 after earnings, extending a rough stretch in early 2026
• The company is operating with an interim CFO and faces headwinds in CPG and automotive sectors

The Trade Desk posted Q4 2025 revenue of $846.8 million, up 14.3% year over year. That edged past Wall Street’s estimate of $841.9 million by 0.6%.

Adjusted EBITDA came in at $400.3 million, well above the $376.4 million analysts expected. Operating margin improved to 30.3%, up from 26.4% in the same quarter a year ago.

Adjusted EPS of $0.59 matched consensus estimates, and free cash flow margin expanded to 33.3% from 21% in the prior quarter.

The Trade Desk, Inc., TTD

Despite the beats, the stock fell 15.6% to $21.41 in after-hours trading. The culprit? The guidance.

The company guided Q1 2026 revenue to “at least” $678 million, roughly 1.5% below analyst estimates of $688.1 million. That implies about 10% year-over-year growth, a sharp step down from the 14% posted in Q4.

It gets worse on the earnings side. The Trade Desk guided for Q1 2026 adjusted EBITDA of around $195 million, below the $208 million it posted in Q1 2025. That means both revenue growth and profitability are expected to decline year over year.

CEO Jeff Green said the company is operating “against a backdrop of macro uncertainty,” pointing to pressures in the consumer packaged goods and automotive sectors. Those two verticals together make up over 25% of the company’s business.

Growth Has Been Slowing for Several Quarters

The deceleration has been building. Revenue grew 25% in Q1 2025, then 19% in Q2, 18% in Q3, and now 14% in Q4. The trend is hard to ignore.

For context, Meta Platforms grew its Q4 revenue 24% year over year in the same macro environment and guided Q1 2026 at roughly 30% growth. That comparison is putting pressure on TTD’s narrative.

Over the past five years, The Trade Desk has grown revenue at a 28.2% compounded annual rate, well above the software average. But the two-year annualized rate has slipped to 22%, and sell-side analysts project 15.6% growth over the next 12 months.

On a positive note, the company’s customer acquisition cost payback period came in at just 5.5 months, reflecting strong product differentiation.

Leadership Uncertainty Adds to Investor Concerns

The company is currently operating with an interim CFO following another recent transition in the role. Finding a permanent replacement is ongoing.

CFO changes alone don’t signal disaster, but the timing adds to a list of concerns investors are working through — slowing growth, soft guidance, and macro headwinds in key verticals.

The Trade Desk’s AI platform Koa and planned transition to owned data centers are among the investments the company says will drive future performance. Those moves come with near-term cost pressure.

At a stock price around $21 after the earnings drop, TTD trades at roughly 23 times GAAP earnings, after the company grew EPS 15% year over year to $0.90 in 2025.

The stock is down sharply from its 52-week high of $91.45.

Q1 2026 guidance of at least $678 million in revenue and $195 million in adjusted EBITDA represents the company’s current outlook as of the February 25 earnings call.

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