The Trade Desk Faces Valuation Questions as Revenue Growth Slows
Ventura, Sunday, 25 January 2026.
Despite reporting 18 percent revenue growth, shares remain down 74 percent from peaks, challenging investors to weigh slowing expansion against an impressive 95 percent client retention rate.
Decelerating Momentum in a Post-Election Landscape
The Trade Desk (TTD) reported third-quarter revenue of $739 million, representing an 18% increase year-over-year [1][3]. While this maintains a double-digit expansion, it marks a significant deceleration from the 26% growth rate the company achieved during the full year of 2024 [1][3]. Management has attributed this slowdown largely to the cyclical nature of political advertising; the robust spending seen during the 2024 election cycle created a high baseline for comparison in 2025 [2]. When adjusting for this factor to isolate the core business performance, the growth narrative appears stronger: excluding political spend, revenue for the third quarter of 2025 grew by 22% [1][2][3].
Platform Evolution and Retention Metrics
Despite the headwinds in top-line growth, the company’s operational fundamentals indicate sustained client loyalty and successful product adoption. The Trade Desk has maintained a customer retention rate of over 95% for 11 consecutive years, a metric that underscores the stickiness of its platform even in a fluctuating economic environment [1][2][3]. CEO Jeff Green has emphasized that current momentum is being fueled by innovations within the company’s AI-driven Kokai platform [1][3]. Adoption rates support this assertion; as of January 23, 2026, approximately 85% of the company’s clients have transitioned to using Kokai as their default platform [2]. Furthermore, advertisers in North America have reported improved returns on ad spend (ROAS) for campaigns utilized through this new interface in 2025 [2].
Market Valuation and Shareholder Returns
The divergence between the company’s internal metrics and its stock performance is stark. Shares of The Trade Desk have fallen approximately 74% from their all-time high closing price of over $139 [1][3]. Over the past year specifically, the stock has declined by 71%, a downturn exacerbated by a global market sell-off triggered by new tariffs introduced in April 2025 [2]. Consequently, the stock now trades at a price-to-earnings ratio of approximately 42 [1][3]. In response to this valuation shift, management has moved to return capital to shareholders, utilizing $310 million for share repurchases in the third quarter of 2025 and authorizing an additional $500 million for future buybacks [1][3].
Future Outlook and Guidance
Investors are now looking toward the upcoming earnings report to gauge whether the growth deceleration is stabilizing. The Trade Desk is expected to release its fourth-quarter results in the first few weeks of February [1][3]. Management has issued guidance projecting revenue of at least $840 million for the quarter [1][3]. This forecast implies a year-over-year growth rate of approximately 13%, or 18.5% when excluding the impact of political spending, suggesting that the discrepancy between headline growth and core business expansion will persist into the new year [1][3].