Despite 2025 revenue beats, The Trade Desk's stock price falls sharply after earnings update

"The Trade Desk announced revenues of $2.9 billion during 2025, up 18% year on year, with $847 million of that total generated during the closing quarter of the year, up 14%, with both sets of numbers beating earlier expectations."

"However, the DSP's Q1 revenue guidance of at least $678 million, a number that would equate to approximately 10% growth year on year, seemingly disappointed investors, with the company's stock price droppingly notably from approximately $25 per share just ahead of the earnings update to circa $21."

"Answering questions from equities analysts, The Trade Desk CEO emphasized the positives of the earnings update, although he did acknowledge that softness in ad spend from two key customer verticals, namely automotive and CPG brands, plus the rise of Amazon proved a challenge."

The Trade Desk reported 2025 revenues of $2.9 billion, up 18% year-over-year, with Q4 revenues of $847 million, up 14%, both exceeding expectations. However, Q1 guidance of at least $678 million, representing approximately 10% growth, disappointed investors, triggering a significant stock price decline. This earnings update was considered critical given the company's stock dropped two-thirds over the previous 12 months amid economic instability and increased competition from Amazon. The CEO acknowledged softness in ad spending from automotive and CPG brands while expressing optimism about the company's go-to-market strategy and recent structural changes.

Read at Digiday