Trade Desk Reports 18.6% Revenue Growth for 2025 but CFO Search Drags On

What happened

The Trade Desk released its fourth quarter and fiscal year 2025 results, posting $2.9 billion in annual revenue, which represents approximately 18.6% year-over-year growth from 2024's $2.445 billion. This maintains the mid-teens to high-teens growth trajectory seen in prior quarters, with Q4 revenue around $851 million showing sequential improvement from Q3's $739 million. Management emphasized continued profitability and cash flow generation, consistent with historical adjusted EBITDA margins near 43% and supporting the operational resilience noted in recent filings. However, the earnings release conspicuously omitted updates on the permanent CFO search following January's termination, failing to address the governance overhang that has eroded market confidence. Against a backdrop of competitive pressures from Amazon DSP and a 'broken former compounder' narrative, these results offer stabilization but lack the leadership clarity or accelerated growth needed to trigger a rerating.

Implication

Investors can derive reassurance from TTD's ability to sustain 18.6% revenue growth and high margins, aligning with the base case for mid-teens expansion and profitability. The absence of a CFO update perpetuates the governance risk highlighted in recent filings, delaying any reduction in the stock's credibility discount and capping multiple expansion. Without explicit 2026 guidance or progress on the CFO front, the stock remains susceptible to volatility, reliant on future catalysts like the permanent hire or Q1'26 results to confirm durability. Strong cash flow and a debt-free balance sheet with $1.4 billion in liquidity provide a downside buffer, but aggressive buybacks—$958 million in 9M'25—may strain flexibility if hosting costs rise or competitive fee compression intensifies. Monitoring the next 90 days for CFO appointment and Q1'26 performance is critical to distinguish between temporary stabilization and structural impairment from Amazon's pricing pressure or AI-driven consolidation.

Thesis delta

The earnings release largely confirms the DeepValue base case of sustained mid-teens growth and profitability, reinforcing the potential for a rerating if operational metrics hold steady through 2026. However, the lack of a permanent CFO hire or detailed 2026 outlook leaves the credibility overhang unresolved, stalling the thesis upgrade that depended on leadership stability by mid-2026. Investors should now focus on whether Q1'26 revenue growth meets or exceeds 18% and if the CFO search concludes promptly, as these will determine if the stabilization is durable or if competitive pressures force a downgrade.