The Trade Desk Faces Its Most Important Revenue Test After a 67% Collapse

"The Trade Desk has been one of the most punishing holds in tech over the past 12 months. The stock is sitting around $25.14 this morning, down more than 33% just the first trading day of the year. The sell-off accelerated in February after AI disruption fears hit the ad-tech sector, a CFO departure rattled confidence, and broader tariff uncertainty weighed on the whole market."

"Q3 2025 revenue came in at $739 million, growing 18% year over year and beating estimates by nearly $20 million. Customer retention held above 95%. The Kokai platform, TTD's AI-powered advertising engine, was being used as the default experience by nearly 85% of clients and delivering 26% better cost per acquisition and 58% better cost per unique reach compared to the previous platform."

"The company guided for at least $840 million in Q4 revenue with adjusted EBITDA of approximately $375 million. In January, management reaffirmed that guidance, saying it anticipated Q4 and full-year 2025 revenues and adjusted EBITDA to meet previously issued guidance. So the floor is set."

Trade Desk stock has declined sharply over the past year, falling 33% on the first trading day of 2025 alone, driven by AI disruption fears in ad-tech, CFO departure concerns, and tariff uncertainty. However, the underlying business remains strong. Q3 2025 revenue reached $739 million with 18% year-over-year growth, beating estimates by $20 million. Customer retention exceeded 95%, and the Kokai AI-powered platform achieved 26% better cost per acquisition and 58% better cost per unique reach. The company guided for $840 million Q4 revenue with $375 million adjusted EBITDA, reaffirmed in January. Tonight's earnings will determine whether the stock decline reflects rational repricing or panic-driven overreaction, with revenue growth rate being the critical metric investors will scrutinize.

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