Trade Desk's stock slides after earnings, as growth slowdown unnerves Wall Street even further

By Emily Bary

The ad-tech provider says automotive and packaged-good clients are under pressure

Trade Desk plays into the market for connected-TV ads.

Trade Desk has been one of the worst S&P 500 stocks in the past year, and the company's growth slowdown is now spooking Wall Street even more.

Shares of the advertising-technology company fell more than 15% in Wednesday's extended session after Trade Desk (TTD) came up short with its revenue forecast for the current quarter. The company projects at least $678 million in revenue for the period, while analysts tracked by FactSet were looking for $689 million.

The forecast implies a continuation of a dramatic growth slowdown at Trade Desk. Year-over-year revenue growth went from 25.4% in the first quarter of 2025 to 18.7% in the second quarter, 17.7% in the third quarter and 14.3% in the fourth quarter. If Trade Desk only does $678 million of revenue in this year's first quarter, that would be up just 10.1% from a year prior.

See also: Snowflake's stock dips as the software company gives a mixed outlook

Trade Desk's outlook on adjusted earnings before interest, taxes, depreciation and amortization also underwhelmed. The company expects $195 million on the metric in the first quarter, while analysts were looking for $223 million.

Those forecasted figures overshadowed better-than-expected results from Trade Desk in the fourth quarter. Revenue of $847 million exceeded the $841 million consensus view, and adjusted Ebitda of $400 million cleared the $377 million bar.

On the earnings call, CEO Jeff Green highlighted "a sustained weakness among some large consumer packaged-goods companies," along with some automotive advertisers. Those categories account for more than a quarter of Trade Desk's business, he noted.

"In these two categories, all global companies have levels of uncertainty that we haven't seen for most of the last 15 years," he added, pointing to questions about tariffs as well as budgetary pressures on consumers.

The corresponding companies "all had tough choices to make in 2025," according to Green. "Most still have tough choices ahead."

Read: 10 stocks Wall Street expects to roar back after dropping at least 20% in 2026

Trade Desk plays into the market for connected-television advertising, and Green said he's still "so confident" in the company's long-term opportunity. He noted the company's strategic decision not to own inventory, which he thinks will pay off in an oversupplied market.

Customers "have more choice than ever" about where to advertise, and Green said that the company has been able to help those customers reach relevant audiences "for meaningfully lower cost."

He also addressed artificial intelligence, which has been a concern for software investors lately. Green thinks Trade Desk can be an AI winner, saying that the company's Kokai ad tool "is the most advanced AI-fueled buying platform ever pointed at the open internet."

Another issue that's dogged Trade Desk's stock is the question of competition, including from Amazon.com (AMZN) and Alphabet's (GOOG) (GOOGL) Google. "Competitor platforms that integrate content, data and commerce into a single environment incentivize ad buyers to remain within that ecosystem rather than routing it through the Trade Desk," Wedbush's Alicia Reese wrote in a note to clients ahead of earnings.

Green, however, maintained that Trade Desk has an advantage because it's not competing with its own customers the way Amazon must do when it sells companies advertising inventory and then also operates an e-commerce marketplace that goes up against those customers.

"I do think there's more noise than ever, but I do think that we're competing as well as we ever have, and I think we're in a better position to win than we've ever been," Green added.

But Wednesday's after-hours stock drop implies investors still aren't sold and that the bar must move even lower. Trade Desk shares have lost 66% in the past 12 months through Wednesday's close.

More from MarketWatch: This stock-market strategy combines value, quality and momentum for stellar performance

-Emily Bary

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

02-25-26 2101ET