By Karsten Weide, Chief Analyst
Executive Summary
The Trade Desk reported its fourth quarter 2025 earnings on Wednesday, February 25, 2026. Revenue reached $847 million, up 14% year over year, and adjusted EBITDA came in at $400 million, representing a 47% margin. Income from operations totaled $257 million, up 32% year over year, for a 30% margin.
For the full year, The Trade Desk delivered $2.9 billion in revenue, up 18% year over year. Transacted media spend reached $13.4 billion in 2025, equivalent to an average take rate of 22%, and customer retention once again remained above 95%.
Strategically, the company highlighted continued investment in AI through Kokai, new product introductions such as PubDesk, expansion of UID2 integrations, additional retail data partnerships, and the opening of the AdTech toolbox of its Ventura smart TV operating system to other TV operating systems and streaming platforms – now branded the “Ventura Ecosystem.”
Yet despite the operational strength, the market reacted negatively. Shares fell sharply in after-hours trading following guidance for Q1 2026 revenue of just $678 million and adjusted EBITDA of approximately $195 million. The issue was not The Trade Desk’s past and presence, but its future trajectory. Guidance translates to a just 10% revenue growth rate for Q1 2026, which would mark the fourth quarter in a row that the growth rate declined. Quarterly EBITDA would decline year-on-year for the first time in three years.
However, beyond the financials, the message is clear for advertisers and agencies: The Trade Desk continues to double down on objectivity, AI-driven decisioning, and retail data as the foundation of performance on the open internet. For publishers, tools like PubDesk and deeper CTV programmatic integrations suggest a more transparent supply chain. For competitors – walled gardens and rival DSPs, but also SSPs that The Trade Desk circumvents with its OpenPath product – the company’s moves raises the competitive bar further.
Revenue Numbers
Quarterly revenue of $847 million represented 14% year-over-year growth. That compares to 23% growth in Q4 2024. The Trade Desk’s 2025 full-year growth rate of 18% compares to 26% in 2024. In other words, the company’s expansion is cooling quite a bit.
There are four reasons for the slowdown.
- First, advertisers are cutting back on spending because of an uncertain economic outlook. Consumers are spending more cautiously, still smarting from the recent sky-high inflation, especially in CPG and automotive. What’s more, many are aware that their jobs might be at risk from the rapid development of AI and robotics (think self-driving cabs and trucks).
- Second, Netflix, Disney, Amazon, and soon, a merged streaming offer from Paramount/Warner Brothers flood the market with high-quality CTV inventory, The Trade Desk’s most important business segment. What’s more, Amazon’s DSP, reportedly below 5%, are materially lower than The Trade Desk’s, and TTD cannot compete with Amazon on price because it would hamper growth even more. This might have an impact on the company’s growth, even if it maintains that it is serving a different CTV segment than its competitors do. Meanwhile, Applovin is a formidable competitor in mobile.
- Third, geopolitical risk adds another layer of uncertainty. While a direct conflict between China and Taiwan remains unlikely before 2027, escalating tensions and military posturing could disrupt global trade, raise input costs, and dampen economic growth.
- Fourth, The Trade Desk may simply be experiencing the natural effects of scale. As revenue approaches $3 billion annually, sustaining prior growth rates becomes mathematically more difficult, and deceleration is often a normal phase of corporate maturation.
This following chart indexing the annual revenue of The Trade Desk compared to some of its main competitors nicely shows that while it grows more slowly than AppLovin, it outperforms programmatic spending at large. (Google and Criteo’s lines hidden under the line for programmatic spending.)
Revenue by Product Segment
The Trade Desk’s CTV and video advertising business by far remains the company’s most important segment; it continues to grow fast and perhaps now has just crossed the 50% revenue share mark. The Display legacy business remains at a stable around-12% contribution, that’s good news. Audio advertising stands for about 6% of the business, a nice incremental revenue stream.
But what is concerning is that the mobile business’ share is declining when it should be sky-rocketing – just look at what rival AppLovin is doing in that segment. (See above for a chart indexing The Trade Desk’s and AppLovin’s growth.)
Executives also highlighted in the earnings call that The Trade Desk’s retail media business is rapidly expanding, but didn’t break out numbers, perhaps because it is a cross section of the above formats.
Revenue by Geography
Here is some excellent news from The Trade Desk’s international business. It finally has begun to grow much more rapidly than in the past, particularly in Europe and Asia Pacific. It has increased its share of overall sales from just 12% in Q1 2025 to now 16% in the most recent quarter, expanding by 4 points in just one year.
For the past four years, The Trade Desk’s regional business breakdown had not budged: North America made 88%, International 12%.
This recent more rapid international expansion reduces reliance on any single market and positions the company for global retail media and CTV growth that supports the company’s topline. Hopefully, this is not a fluke, but the result of a deliberate initiative to turbo-charge international growth.
Stock Price Reaction
Despite beating its own guidance and analysts’ expectations for revenue and EBITDA, the stock sold off sharply following the earnings release, and then partially recovered after. The disappointment centered on Q1 2026 guidance of at least $678 million in revenue, implying roughly 10% year-over-year growth and a further growth slowdown.
Cash Reserves
The balance sheet remains exceptionally strong. As of December 31, 2025, the company held $658 million in cash and cash equivalents and $645 million in short-term investments. Combined, that is over $1.3 billion in liquid assets.
The company repurchased approximately $1.4 billion of stock during 2025 and authorized an additional $350 million in buybacks. This capital allocation signals confidence. It also demonstrates that The Trade Desk can fund AI development, global expansion, and potential acquisitions without financial strain.
Looking Ahead
The most important developments this most recent quarter were strategic. Kokai continues to embed AI deeper into bidding, forecasting, fraud detection, and supply path optimization. It is now used by nearly all clients. PubDesk enhances transparency for publishers. UID2 integrations continue to expand across the ecosystem.
Strengths remain clear. The Trade Desk can boast an over 95% client retention rate. It generates strong margins and free cash flow. It holds significant net cash. And it sits at the center of the open internet as CTV and retail data scale.
Weaknesses center on growth deceleration and vertical exposure. Management acknowledged sustained weakness among large CPG and auto companies. Together these categories represent a meaningful portion of spend. If those verticals remain pressured, near-term growth will remain constrained.
Opportunities are substantial. The shift toward measurable outcomes, retail media expansion, AI-powered optimization, and the structural growth of CTV all favor objective platforms. Both the international business and the mobile segment remain a potential that has not fully been tapped yet.
Threats include macroeconomic uncertainty, increasing competition from Amazon’s DSP and Google’s DV360, and regulatory complexity around identity and data. Additionally, if advertisers consolidate spend into fewer ecosystems, independent DSPs must continue proving incremental value.
Conclusion
The Trade Desk’s Q4 2025 earnings tell two stories at once. Operationally, the company remains highly profitable, cash generative, and strategically ambitious. Growth, however, is moderating in a way that forces investors to re-examine their expectations.
For advertisers and agencies, the platform continues to expand its capabilities in AI, CTV, and retail data. For investors, the key question is whether this phase represents temporary macro softness or a step down in growth that is here to stay.
About The Trade Desk
The Trade Desk is a technology company that empowers buyers of advertising through a self-service, cloud-based platform that enables campaign creation, management, and optimization across digital channels. Headquartered in Ventura, California, the company operates globally and focuses on the buy side of the advertising ecosystem while also offering advertisers a direct supply path to publishers. Learn more at https://www.thetradedesk.com.
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