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

The latest numbers came amid a glut of trading updates from the publicly-listed ad tech cohort – Magnite and Taboola also issued their earnigns for the period – with all eyes on the indsutry’s largest independent demand-side platform given the previous 12 months saw its stock price drop by two-thirds.

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 as its subsequent investor relations concluded just two hours later.  

Several market analysts billed the Q4 trading update as the most important during The Trade Desk’s near 10-year run on the public markets, given that its corresponding call in the year-prior was the beginning of a 12-month period when its stock price dropped precipitously amid global economic instability, plus growing competition, especially from Amazon. 

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.

“I don’t think that this is our best earnings report ever,” he said, although he further emphasized The Trade Desk’s optimism over its go-to market strategy, especially with its recent structural changes, which aim to balance its commitments to advertisers and agencies alike – a key step-change the DSP has implemented in the previous year.

Of course, one of the key tentpoles that has shaped The Trade Desk’s near decade-long run on the public markets – one that has seen it become the talisman of its cohort – is its narrative as an alternative to Big Tech, or Wall Gardens, a.k.a. Google, Meta, etc.

However, aggressive price competition from Amazon, along with skepticism over The Trade Desk’s fee structure and its OpenPath initiative, have mounted, especially among media agencies, meaning the e-commerce giant’s DSP was very much in the ascendancy throughout last year.

Green took the opportunity to address these perceptions – as well as note his dissatisfaction with industry press coverage – in both his prepared remarks and answers to analysts’ questions, with the CEO emphasizing his outfit’s objectivity as a key benefit to advertisers over Google or Amazon’s respective offerings – both of which are widely perceived to have conflicted business interests.

“This makes the objectivity we have by not owning inventory much more valuable than ever,” he said, adding the current over-supply of online ad inventory is actually a positive for discerning media-buying teams.

Addressing the emerging competitive landscape, he further went on to cite a recent bake-off between his company and Amazon’s DSP for the marketing team of an unnamed consumer electronics brand, while going on to denounce “cheap reach” – a perceived benefit that has seen Wall Gardens go on to account for the bulk of online media buys – as the go-to tactic of yesterday’s marketer.

“One of the world’s leading appliance manufacturers recently ran a test between The Trade Desk and the Amazon DSP,” he recounted, further claiming his offering performed “six-times better” at delivering the clients’ overall campaign goals.

“They found that with The Trade Desk, they were able to reach 70% more unique households because we gave them access to a much wider range of relevant touch points with those consumers… at 30% lower total cost.”