Title

Earning Preview: Trade Desk Inc. this quarter’s revenue is expected to increase by 10.77%, and institutional views are mostly bearish

Abstract

Trade Desk Inc. will report fourth-quarter fiscal 2025 results on February 25, 2026, Post Market; this preview outlines consensus expectations for revenue, profitability, and EPS, paired with recent institutional commentary that is skewing cautious despite reaffirmed guidance.

Market Forecast

Consensus indicators point to fourth-quarter fiscal 2025 revenue near $840.67 million, up 10.77% year over year, and adjusted EPS around $0.58, up 3.29% year over year, with EBIT forecast at $213.30 million, up 2.28% year over year; the company has reaffirmed revenue guidance of at least $840 million. The company’s gross margin outlook was not provided, and there is no formal forecast for GAAP net profit or net margin from the available data; thus, our preview focuses on revenue, EBIT, and EPS. The main business is the company’s Advertising Technology Platform, which dominates reported sales and is expected to carry momentum into year-end against the backdrop of seasonal campaign completions. The business with the strongest near-term promise remains the Advertising Technology Platform itself, with forecast revenue of $840.67 million and year-over-year growth of 10.77% for the quarter under review.

Last Quarter Review

In the third quarter of fiscal 2025, Trade Desk Inc. delivered revenue of $739.43 million, a gross profit margin of 78.07%, GAAP net profit attributable to the parent company of $116.00 million, a net profit margin of 15.63%, and adjusted EPS of $0.45, with adjusted EPS increasing 9.76% year over year. One notable highlight was the quarter-on-quarter rise in GAAP net profit, which increased by 28.20%, supported by scaling operating leverage and controlled operating expense growth. Within the main business, the Advertising Technology Platform contributed $739.43 million, rising 17.74% year over year.

Current Quarter Outlook

Advertising Technology Platform: Revenue Trajectory and Margin Implications

Management reaffirmed fourth-quarter revenue of at least $840 million, and the available forecast implies $840.67 million, or a 10.77% year-over-year increase. This pace indicates continued demand flowing through the platform into the fiscal year-end period, with estimated EBIT of $213.30 million growing 2.28% year over year and adjusted EPS estimated at approximately $0.58, up 3.29% year over year. The gross profit margin was 78.07% last quarter and, while no explicit margin forecast exists for Q4, the company’s mix and fee-based revenue model historically support robust gross margins that tend to be resilient across quarter-end spending cycles. Net margin print last quarter was 15.63%, and without a formal forecast for Q4 net margin, the near-term profitability narrative will hinge on how operating expenses track relative to revenue guidance and whether operating leverage persists into the holiday campaign close.

Growth Catalyst: Product Enhancements and Revenue Mix Within the Platform

The company’s platform-centric execution remains the core growth lever heading into the quarter, with the forecast pointing to revenue of $840.67 million and a 10.77% year-over-year increase. Product enhancements aimed at improving bidding efficiency and supply chain cleanliness—such as the recently spotlighted OpenAds bidding environment—provide a potential catalyst for budget consolidation and incremental wins across partner ecosystems. These factors, combined with stable customer adoption heading into the period, reinforce a setup where high-level platform revenue can support durable EBIT delivery (estimated at $213.30 million) even as price targets across the Street have adjusted lower. Because gross margin moves with the platform’s mix and fees, any growth that leans toward higher-quality supply and improved measurement could support margin stability in the quarter despite the lack of a formal gross margin forecast.

Stock Price Drivers This Quarter

Institutional commentary has trended cautious in recent weeks, which can sway sentiment and volatility around results day, especially with several firms reducing price targets while maintaining Hold or Neutral stances. The company’s recent appointment of Tahnil Davis as interim CFO, combined with reaffirmed Q4 revenue guidance of at least $840 million, frames a quarter where guidance credibility and expense discipline will be closely watched. The balance between reported EBIT ($213.30 million estimate), adjusted EPS ($0.58 estimate), and any commentary on early 2026 spending patterns will likely be the primary drivers of share performance post-print, particularly if the company updates on operating expense pacing or offers color on near-term revenue signals within the platform.

Analyst Opinions

Bearish views currently outnumber bullish ones across recent notes, with a preponderance of Hold, Neutral, and Equal-Weight ratings combined with reduced price targets. Morgan Stanley cut its rating to equal-weight and lowered its price target to $50 from $80, citing a more measured outlook that aligns with peer comparisons and the need for clearer evidence of reacceleration to justify prior valuation levels. Citigroup maintained a Neutral stance and reduced its price target to $38, reflecting tempered expectations into the quarter and an emphasis on disciplined execution to support earnings expansion. Jefferies reiterated a Hold rating with a $50 price target, signaling a balanced view that requires proof points on margin durability and operating expense containment before re-engaging more constructively. Wells Fargo also maintained a Hold rating with a $53 price target, echoing caution on near-term upside without additional data to suggest inflection in the revenue-growth-to-earnings conversion rate. BNP Paribas Exane initiated at Neutral with a $40 price target, underscoring the need to see sustained performance alongside forecast alignment prior to revising its stance.

In aggregate, the tilt toward caution is grounded in the divergence between solid top-line forecasts and questions about the degree of flow-through to EPS and EBIT, where consensus growth rates—3.29% for adjusted EPS and 2.28% for EBIT—signal modest year-over-year momentum relative to last quarter’s reported dynamics. While the company’s Q4 revenue guidance of at least $840 million serves as an anchor that supports confidence in the top line, the Street’s majority-weighted caution emphasizes execution details that will be decisive in shaping post-report sentiment: operating expense discipline, commentary on product upgrades like OpenAds and their measurable impact on campaign performance, and any early signals regarding quarter-to-date spending for the beginning of fiscal 2026. Analysts in the cautious camp appear to want clearer, quantifiable evidence that high gross margins can consistently translate into stronger net margins and EPS growth quarter after quarter. If the company reports in line or ahead on revenue but misses or narrowly meets on profitability metrics, the cautious narrative could remain intact. Conversely, a beat on EBIT or EPS accompanied by confident commentary on expense control and revenue mix would give this camp reasons to reassess, though such a shift would require data points beyond the current forecast.

Altogether, the bearish majority reflects a preference for tangible confirmation on the earnings bridge from revenue to EPS rather than an assumption that momentum automatically carries through to profitability. The presence of notable Hold and Neutral ratings with tightened price targets frames expectations around measured performance rather than aggressive upside, positioning the post-report debate around the completeness of the company’s execution relative to the guidance reaffirmation and the implied year-over-year trajectory for Q4. Should the reported numbers substantiate both revenue delivery and credible expense pacing, it would directly address the core of the prevailing cautious view; until then, the consolidated analyst stance leans defensive into the release timeline, despite the company’s reiterated revenue guidance and the stability seen in last quarter’s margins and profit growth on a sequential basis.