There is no sugar: The exchange office (TTD +15.47%) has lost much of its luster over the past 18 months. When the company reported its fourth-quarter results in early 2025, investors were surprised. The Trade Desk missed its own forecast, marking the first time in 33 consecutive quarters that the company has missed the target. Since then, the situation has deteriorated significantly. The stock had lost 90% of its value, plagued by slowing revenue growth and falling profits. Despite management’s best efforts to right the ship, there has been little good news. Until today, that’s true.
Anticipation of The Trade Desk’s financial report and the announcement of the return of one of the company’s co-founders sparked a rally, and The Trade Desk’s earnings release further fanned the flames. Investors let out a collective cheer.
Image source: The Motley Fool.
A sudden turnaround
The Trade Desk’s third quarter results went a long way to reassuring investors that the company has turned a corner. Revenue fell 0.5% to $736 million. The bottom line held up better than expected, although adjusted EBITDA fell 16% to $266 million, causing adjusted earnings per share (EPS) to fall almost 27% to $0.33.
While that might not seem like cause for celebration, consider this: Management’s outlook was for revenue of $650 million and adjusted EBITDA of $160 million, so the results easily overcame both hurdles.
Even Wall Street was caught off guard, as analyst consensus estimates called for revenue of $651.4 million and adjusted EPS of $0.25, so The Trade Desk beat expectations by some margin.
The Trade Desk also maintained its strong customer retention, which remained above 95% during the quarter, a history that dates back more than a decade.
CEO Jeff Green noted that “the third quarter represented significant progress with results well above our expectations at the start of the quarter.” He added that while there is still work to be done, the company is “acting with greater urgency” to right the ship.
A familiar face
These better-than-expected results follow another important announcement. Last week, The Trade Desk announced the return of co-founder and former chief technology officer (CTO) Dave Pickles, who stepped down in 2023.
Pickles and Green co-founded The Trade Desk in 2009 after working together at digital ad exchange AdECN, where Pickles and his team built the entire ad exchange in less than seven months. The company was eventually purchased by Microsoft in 2007.
As the creator and architect of The Trade Desk’s adtech system, Pickles knows the platform better than anyone, according to Green. That deep knowledge and expertise helps explain why the stock jumped more than 15% on Monday, giving investors hope that his skills will help facilitate The Trade Desk’s recovery.
TTD The exchange office
$14.93+$2.00 (+15.47%)
NASDAQ · At 4 p.m. ET on 09/11/26
What the future holds
Beyond the quarter’s financial results, investors were pleased with The Trade Desk’s vision for the future. For the upcoming fourth quarter, management’s outlook called for revenue of at least $755 million and adjusted EBITDA of $280 million. While this will mark sequential gains, it will still represent year-over-year declines of 11% and 30%, respectively.
As a reminder, analyst consensus estimates called for fourth-quarter revenue of $691 million, so The Trade Desk’s forecast was still significantly higher than Wall Street’s forecast.
As a long-time shareholder, I am cautiously optimistic. While I’m happy to see The Trade Desk making significant progress, the real test will be whether the company can maintain its upward trajectory. Personally, I would like to see another quarter or two of results going in the right direction before starting the march towards victory.
Even after Monday’s rally, The Trade Desk stock is selling at just 15 times earnings. While this is an interesting valuation, I think the company still has a lot to prove before adding shares.
Gn bussni
