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2026-04-03 · earnings-review · TTD delivered record profitability on decelerating revenue · Conviction 3/5
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# TTD — Q4 FY25 Earnings Review (Atlas)
> Date: 2026-04-03
> Quarter: Q4 FY25 (Oct-Dec 2025), reported February 25, 2026
> Market cap: $10.8B | EV/TTM Rev: 3.3x | Revenue growth: 14.3% YoY (+19% ex-political)
## Verdict
TTD delivered record profitability on decelerating revenue. Q4 revenue of $847M (+14.3% YoY, +0.8% beat) hit an all-time high while GAAP operating margin (30.3%), EBITDA ($400M, 47.3%), and FCF ($285M) all set records. But the growth trajectory is the story: five consecutive quarters of deceleration (25.4% to 14.3%) with Q1 FY26 guided at just 10%. Management explicitly attributed weakness to CPG/auto verticals (>25% of revenue), offered an ex-political 19% figure, and expressed highest-ever confidence in the long-term opportunity. The market disagrees -- the stock is down 76% from its 52-week high. At 3.3x EV/Revenue and 11.9x EV/FCF, the market prices permanent growth impairment. Jeff Green's $148M insider purchase post-earnings is the strongest counter-signal. The cyclical vs structural debate is unresolved. **Conviction: 3/5** -- watchlist, Q1 FY26 earnings (May 8) is the critical test.
## Qualification Gate
| Criterion | Threshold | TTD Q4 FY25 | Pass/Fail |
|-----------|-----------|-------------|-----------|
| Revenue YoY growth | >30% (>40% preferred) | 14.3% (18.4% FY25) | **FAIL** |
| Gross margin | >60% (>70% preferred) | 80.7% | **PASS** |
| Revenue per quarter | >$50M | $846.8M | **PASS** |
| Data availability | 4+ quarters | 16 quarters | **PASS** |
| Share dilution | <10% annual | -4.8% (buyback reduction) | **PASS** |
| GAAP profitability | Improving or positive | $443M FY25 net income, op margin at all-time high | **PASS** |
**Gate result: FAIL on growth.** Analysis proceeds because this is a requested earnings review on a company with compelling characteristics at a historically depressed valuation, and the growth inflection question is the central analytical question.
## Six-Factor Score
| Factor | Rating | Detail |
|-------
*…truncated*
Preview
# TTD — Q4 FY25 Earnings Review
> Date: 2026-04-06
> Quarter: Q4 FY25 (Oct-Dec 2025), reported February 25, 2026
> Market cap: $10.8B | Run-rate P/S: 3.2x | Run-rate P/FCF: 9.5x | FCF Yield: 10.6%
## Verdict
**TTD is decelerating into a valuation that increasingly prices permanent impairment. The numbers say sell under my framework — five consecutive quarters of YoY deceleration is indefensible for a growth investor. But this isn't a growth stock anymore at 3.2x P/S. It's a profitability machine on sale, and the question has shifted from "is growth accelerating?" to "is the bottom in?"**
Q4 FY25: $847M revenue (+14.3% YoY, +0.8% beat). GAAP operating margin hit an all-time high of 30.3%. EBITDA at 47.3%. FCF of $285M (33.7% margin). These are elite profitability numbers. But revenue growth has gone 28% → 26% → 27% → 22% → 25% → 19% → 18% → 14%, and Q1 FY26 is guided at just 10%.
Under my strict framework: **five quarters of deceleration = sell, full stop.** I would have been out by Q2 FY25 at the latest.
But I also said in 2023 that TTD is "a fantastic, profitable company competing in a large TAM with an exceptional founder-leader which is steadily taking market share" and "a cash-generating machine." That hasn't changed. What's changed is the market has re-priced it from 15x revenue to 3.2x revenue. Jeff Green — who built this from nothing — put $148M of his own money in at $23-25 after these results. You don't do that unless you see something.
**Action: Watchlist. Not investable under growth framework today. But I'm watching Q1 FY26 (May 8) like a hawk. If growth stabilizes at 13-15% and Q2 guide implies improvement, I'd take a starter position at this valuation. The risk/reward has shifted materially.**
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## The Numbers — QoQ Grid (The Table That Matters)
### Revenue ($M) — Years Across, Quarters Down
| | FY22 | FY23 | FY24 | FY25 | Trend |
|---|---|---|---|---|---|
| **Q1** | 315 | 383 | 491 | 616 | +25.4% YoY |
| **Q2** | 377 | 464 | 585 | 694 | +1
*…truncated*
Rolling earnings (raw)
# TTD — The Trade Desk | Rolling Earnings Summary
> Window: Q1 FY25 – Q4 FY25
> Last updated: 2026-04-02
> FY ends: December (calendar year)
## Trajectory
Revenue growth decelerating: Q1 FY25 +25.4% -> Q2 +18.7% -> Q3 +17.7% -> Q4 +14.3%. FY25 total +18.4%. Q1 FY26 guided +10%. Ex-political Q4 growth was ~19%. Margins expanding: GAAP Op margin hit all-time high 30.3% in Q4, EBITDA 47.3%. FCF $796M FY25 (+24% YoY). Growth deceleration driven by CPG/auto weakness (>25% of revenue) and political spend normalization.
## Quarter Grid
| | Q1 FY25 | Q2 FY25 | Q3 FY25 | Q4 FY25 |
| | Mar-25 | Jun-25 | Sep-25 | Dec-25 |
|---|---|---|---|---|
| Revenue ($M) | 616 | 694 | 739 | 847 |
| YoY % | +25.4% | +18.7% | +17.7% | +14.3% |
| QoQ % | -16.9% | +12.7% | +6.5% | +14.5% |
| Gross Margin [GAAP] | 76.8% | 78.2% | 78.1% | 80.7% |
| Op Margin [GAAP] | 8.8% | 16.8% | 21.8% | 30.3% |
| EBITDA Margin | 33.8% | 39.0% | 42.9% | 47.3% |
| Net Margin [GAAP] | 8.2% | 13.0% | 15.6% | 22.1% |
| EPS [GAAP] | $0.10 | $0.18 | $0.23 | $0.39 |
| EPS [Non-GAAP] | $0.33 | $0.41 | $0.45 | $0.59 |
| FCF ($M) | 232 | 120 | 158 | 285 |
| FCF Margin | 37.7% | 17.3% | 21.4% | 33.7% |
| Beat vs Guide | +7.1% | +1.8% | +3.1% | +0.8% |
| Verdict | Strong rebound | Solid | Steady | Profitable but decelerating |
## Promise Tracker
| Quarter | Promise | Status | Notes |
|---------|---------|--------|-------|
| Q4 FY24 | Reorg to accelerate growth | **Met** | Q1-Q4 FY25 beat streak validates reorg |
| Q4 FY24 | Ventura OS OEM partnerships | **Partial** | DIRECTV "planning," V + Nexxen announced Feb 2026 |
| Q4 FY24 | Sincera acquisition close Q1 FY25 | **Met** | Closed on schedule |
| Q1 FY25 | Continue outpacing market | **Weakening** | Still growing but decelerating vs industry (Amazon 23% vs TTD 14% in Q4) |
| Q2 FY25 | Kokai driving better results | **Mixed** | Near-100% adoption, case studies strong, but Ad Age quality issues reported |
| Q4 FY25 | Revenue growth to improve over time | **Pending** | Q1 FY26 guided at +10% -- must improve in H2 FY26 to validate |
| Q4 FY25 | Audience Unlimited broad rollout in 2026 | **Pending** | Early adopter results "very positive" |
| Q4 FY25 | FY26 EBITDA margin ~in line with FY25 | **Pending** | Q1 guide implies ~28.8% EBITDA margin (seasonal low) |
## Language Shift Monitor
| Dimension | Q1 FY25 | Q2 FY25 | Q3 FY25 | Q4 FY25 |
|-----------|---------|---------|---------|---------|
| Demand tone | "Strong results" | "Strong quarter" | "Another strong quarter" | "Solid quarter" + CPG/auto headwinds |
| Competition | "Stark contrast to walled gardens" | "Outpace digital ad market" | "Leadership position" | "Cheap reach fallacy" (aggressive) |
| Guidance tone | "Encouraged by early impact" | Fully bullish, no hedging | Confident, AI front-and-center | "Prudent," "visibility somewhat lower" |
| AI emphasis | Moderate | Growing | Center stage | Dominant (~25 mentions), "agentic AI" new |
| New language | -- | -- | -- | "Seeds not harvested," "green shoots," "objectivity" (9x) |
**Key shift Q4 FY25:** First acknowledgment of sustained vertical weakness (CPG/auto). Tone shifted from confident to "confident-cautious." Introduced JBP quantification (>50%) and take rate defense narrative for the first time. Also first time AI disintermediation risk addressed proactively.
## Analyst Concern Tracker
| Concern | First Raised | Status | Notes |
|---------|-------------|--------|-------|
| Q4 FY24 miss (-2%) | Q4 FY24 | **Resolved** | Reorg + Q1-Q4 FY25 beat streak |
| Growth deceleration | Q2 FY25 | **Active** | 25% -> 14% -> guided 10%. Central debate. |
| Amazon DSP competition | Q4 FY25 | **Active** | CEO acknowledged "aggressive price competition" |
| CPG/auto weakness | Q4 FY25 | **Active** | >25% of revenue, continued into Q1 FY26 |
| Holdco defections | Q4 FY25 | **Active** | Publicis, Dentsu, WPP friction |
| C-suite turnover | Q2 FY25 | **Active** | New CFO, COO, CRO within 12 months |
| Kokai quality | Q4 FY25 | **Active** | Ad Age report on AI default misfires |
## Source Log
| Date | Persona | What was updated |
|------|---------|-----------------|
| 2026-04-02 | atlas | Created _ROLLING.md from scout brief data. Populated quarter grid Q1-Q4 FY25, promise tracker, language shift, analyst concerns. First entry. |
| 2026-04-03 | atlas | Q4 FY25 earnings review. Updated verdict row for Q4 FY25. No status changes to promise tracker. Created Q4_FY25.md quarter file. |
| 2026-04-06 | wsm | Q4 FY25 earnings review. Confirmed atlas 3/5 watchlist rating. Added gross spend divergence analysis (11.7% spend vs 18.4% rev — 6.7pp gap from take rate expansion). Flagged sequential revenue adds declined 44% YoY ($105M vs $186M). Key addition: buy/walk-away triggers for Q1 FY26. No status changes to promise tracker. |