The Trade Desk Guidance Miss Signals Slower Growth

The Trade Desk said on Feb. 25, 2026 that a guidance miss for Q1 2026 reflected sustained weakness among packaged-goods and auto clients, prompting management to emphasize connected-TV (CTV) and retail-media initiatives and to enlarge its share-repurchase program.

Quarter Results and Guidance

For fiscal 2025, The Trade Desk reported revenue of $2.9 billion, up 19.0% from $2.4 billion the previous year. GAAP net income was $443 million, diluted earnings per share (EPS) $0.90, and Adjusted EBITDA, a proxy for operating profit, reached $1.2 billion, a 41.0% margin.

In the fourth quarter, revenue totaled $847 million, about 14.0% higher year over year. GAAP net income was $187 million, diluted EPS $0.39, and Adjusted EBITDA $400 million.

Management set Q1 2026 revenue guidance at a minimum of $678 million, implying 10.1% year-over-year growth, with Adjusted EBITDA near $195 million. This fell short of Street consensus, which expected $688 million in revenue and $223 million in EBITDA. The company did not provide full-year 2026 guidance. After repurchasing roughly $1.4 billion of stock in 2025, the board increased the remaining buyback authorization to $500 million.

These results show the business remains profitable and cash-generative, but the guidance signals a shift from accelerating top-line growth to slower momentum and clearer tradeoffs in capital allocation.

Vertical Weakness and Strategic Response

Packaged-goods (CPG) and auto clients, which together represent more than a quarter of The Trade Desk’s business, have shown sustained weakness since the second quarter of 2025. This decline reflects tariff uncertainty, inflationary pressures, uneven volumes, and consumer cost constraints.

To address this, management reorganized its go-to-market approach around a “brand-first” model, combining business-development and spend-activation teams. Joint business plans now account for more than half of revenue, and the pipeline for these plans doubled year over year.

The company is focusing on product and partnership initiatives to offset sector weakness. These include expanding CTV placements tied to major events like the 2026 Winter Olympics, growing retail-media capabilities through UID2 retail-data partnerships covering over half of global retail sales, advancing its Kokai AI platform, and pursuing supply-chain solutions via OpenPath.

These strategic moves aim to reduce reliance on packaged-goods and auto cycles and reshape growth toward areas with more stable demand. The guidance sets a near-term baseline against which investors will assess progress on this pivot.