Shares of The Trade Desk (TTD) plunged by 26% on Thursday after the company’s Q4 2024 results came in below both its own guidance and Wall Street expectations for the first time since going public in 2016.
Q4 results disappoint
In its Q4 earnings report, The Trade Desk posted revenue of $741 million, a 22% increase from the previous year but still below the company’s guidance of at least $756 million. The company also fell short of analysts’ expectations, causing concern among investors.
Founder and CEO Jeff Green acknowledged the miss, stating: “I’m disappointed that we fell short of our own expectations in the fourth quarter.” While revenue growth was solid, the company’s forward guidance for Q1 2025 has also raised questions. The Trade Desk forecasts at least $575 million in revenue for the first quarter, representing a 17% year-over-year increase, a slowdown compared to recent growth rates.
Green attributed the revenue miss to “a series of small execution missteps” during Q4. While he didn’t go into specifics, he noted that the company had undergone a major restructuring in December, which included layoffs and shifts in reporting structures to refocus its efforts on key client categories, such as brands, agencies, and business verticals.
Despite the short-term setback, Green maintained optimism about the company’s long-term prospects. He highlighted that “accounts with joint business plans (JBPs) grow about 50% faster than the rest of the business,” signalling potential for faster growth through deeper relationships with brands.
[click to enlarge] The following table summarises the Company’s unaudited consolidated financial results for the three and twelve months ended 31 December, 2024 and 2023 ($ in millions, except per share amounts).
What’s next for The Trade Desk?
Green remains confident in the company’s future, with Connected TV (CTV) continuing to be a major driver of revenue. He also pointed to digital audio as an untapped opportunity, describing it as “the most on-sale corner of the internet.”
The Trade Desk’s position in the market could also benefit from potential changes in the competitive landscape. Green suggested that Google, facing ongoing antitrust challenges, may eventually “exit the open internet,” a move that could create room for The Trade Desk to expand its share of the ad tech space. He also criticised Amazon’s approach to advertising, saying, “Amazon is asking advertisers, big and small, for their advertising budget while competing with most of the Fortune 500 companies in some way.”
Looking ahead
While the company’s stock price has taken a hit, The Trade Desk still sees substantial growth potential. The ad tech leader estimates its market opportunity at over $900 billion, and the guidance for Q1, though lower than expected, still points to continued expansion. Despite this, investors are waiting to see if the company can regain momentum and meet its ambitious growth targets.