Why Is The Trade Desk (TTD) Stock Down 16% Premarket? Revenue Outlook Disappoints

The Trade Desk (TTD) shares are sliding sharply in premarket trading on Thursday, February 26, 2026, extending a brutal after-hours selloff that saw the stock plunge more than 16% following the company’s fourth-quarter earnings report. While The Trade Desk delivered a modest beat on both revenue and earnings for Q4 2025, investors are fixating on a weaker-than-expected first-quarter 2026 revenue outlook that fell short of Wall Street estimates.

The miss signals potential softness in near-term advertising demand, raising fresh questions about the company’s growth trajectory heading into 2026. Adding to the unease, management chose not to provide full-year guidance, leaving analysts and investors with little visibility into how the year will unfold.

Q4 Beat Fails to Offset Weak Q1 Forecast

The Trade Desk reported fourth-quarter 2025 revenue of $847 million, up 14% year-over-year and ahead of the Wall Street consensus of $841 million. Adjusted earnings per share came in at $0.59, a penny above the $0.58 estimate, while net income rose to $187 million, or $0.39 per share, compared to $182 million in the prior-year period. For the full year, the company posted $2.9 billion in revenue, an 18% increase, with net income of $443 million and adjusted EBITDA of $1.2 billion at a 41% margin.

Despite these headline beats, the results were not enough to satisfy investors looking for strong forward momentum. Net income margin slipped to 22% in Q4 from 25% a year earlier, and stock-based compensation remained elevated at $491 million for the full year, continuing to weigh on GAAP profitability. The company also repurchased $1.4 billion of its own stock during 2025, and announced an additional buyback authorization bringing remaining capacity to $500 million, but even that shareholder-friendly move failed to offset the negative sentiment.

The pivotal concern driving the selloff is the Q1 2026 revenue guidance of at least $678 million, which came in below analyst expectations of approximately $688.4 million. The implied EBITDA margin for the quarter also points to further compression relative to Q4, and the decision to withhold full-year guidance only amplified investor anxiety about the pace of growth in the coming months.

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Macro Headwinds and Advertising Demand in Focus

CEO Jeff Green struck a cautiously optimistic tone on the earnings call, noting that advertisers are increasingly prioritizing measurable outcomes and data-driven strategies, which he said positions The Trade Desk well as an independent platform within the broader advertising supply chain. He highlighted product updates across Kokai, retail data partnerships, and supply chain tools as key areas of focus for 2026, along with the newly unveiled Ventura connected TV ecosystem.

However, analysts at Morgan Stanley flagged that management acknowledged macro uncertainty, tariff concerns, and consumer spending pressure are disproportionately weighing on consumer packaged goods and auto advertising categories, headwinds that appear to be carrying into early 2026. The broader advertising market backdrop remains mixed, with brands carefully balancing marketing budgets against an uncertain economic environment, making near-term visibility difficult.

The stock’s dramatic reaction reflects how high expectations had been set for The Trade Desk, which has now seen its shares fall roughly 66% over the past year and more than 33% year-to-date heading into the print. Loop Capital was quick to respond, downgrading TTD and slashing its price target from $75 to $25 on February 26.

The analyst consensus average target sits at $48.18, still well above where the stock is currently trading in premarket, suggesting the market may be pricing in a more prolonged period of slower growth than the bull case assumes.

Disclaimer: The author does not hold or have a position in any securities discussed in the article. All stock prices were quoted at the time of writing.