Core Insights - The Trade Desk (TTD) reported strong Q4 2025 results with revenues increasing by 14% year over year to $847 million, or 19% growth when excluding political spending [1][11] - Video, including CTV, constitutes 50% of TTD's business, while audio is emerging as a significant growth driver, accounting for 6% of the business and growing at a rate higher than any other channel [1][2] Revenue Growth and Projections - TTD's audio segment is benefiting from increased consumer engagement with music and podcasts, creating a larger market for digital audio ads [2] - The company anticipates at least $678 million in Q1 revenues, indicating a 10% year-over-year growth, despite challenges in the CPG and auto sectors [4][11] Competitive Landscape - TTD faces intense competition in the digital advertising space, particularly from Amazon's expanding DSP business and independent ad-tech companies like Magnite [5][6] - Amazon Ads generated $21.3 billion in Q4 revenues, up 22% year over year, driven by its comprehensive ad offerings [7] Business Strength and Challenges - TTD's audio growth, combined with CTV strength and AI-driven optimization, positions the company well for future growth, although audio alone may not significantly impact overall revenue growth in the short term [3][4] - TTD's shares have declined by 34.1% in the past month, contrasting with a 7.6% decline in the Internet Services industry [10] Valuation Metrics - TTD's shares are currently trading at a forward price/earnings ratio of 11.62X, which is lower than the Internet Services industry's ratio of 25.93X [12] - The Zacks Consensus Estimate for TTD's earnings for 2026 has remained unchanged over the past 60 days [13]
Can The Trade Desk's Audio Momentum Boost Its Top-Line Growth?