The Trade Desk (TTD) Stock: Why Shares Plunged After Beating Q3 Estimates

TLDR

• The Trade Desk delivered Q3 earnings of $0.45 per share, beating the $0.44 estimate, with revenue reaching $739.43 million
• Stock price whipsawed in after-hours trading, initially jumping 13% before reversing to drop nearly 5%
• Q4 revenue guidance came in at $840 million minimum, topping the $830.9 million consensus forecast
• Customer retention held above 95% while adjusted EBITDA grew 23% to $317 million
• Board authorized an additional $500 million stock buyback after completing the previous program

The Trade Desk reported third-quarter earnings that topped Wall Street forecasts. But the market response was anything but straightforward.

The digital advertising platform posted earnings of $0.45 per share for Q3 2025. That beat the consensus estimate of $0.44 per share.

Revenue hit $739.43 million, surpassing expectations by $19.7 million. The figure marked a 17.7% increase from last year’s $628.02 million.

The Trade Desk, Inc., TTD

Shares reacted with extreme volatility. The stock jumped 13% immediately after the release.

Then it reversed completely. Within minutes, all gains disappeared and the stock fell nearly 5%.

Q4 Outlook and Profitability

Management issued guidance for the current quarter. The company expects revenue of at least $840 million.

That’s above the $830.9 million consensus. Adjusted EBITDA is projected at $375 million versus the $275.7 million estimate.

Profitability metrics showed strong performance. Adjusted EBITDA climbed 23% to $317 million, yielding a 43% margin.

Net income reached $116 million or $0.23 per share. That compares to $94 million or $0.19 per share last year.

Customer Retention and Capital Returns

Customer retention stayed above 95% during the quarter. This metric reflects the stickiness of The Trade Desk’s platform.

The board approved a $500 million stock buyback program. This came after exhausting the previous authorization.

Buybacks can provide support for share prices. They also signal management confidence in future prospects.

The company has now beaten EPS estimates in three of the past four quarters. Revenue forecasts were also topped three times in that span.

Despite the earnings beat, shares are down 59.4% year-to-date. The S&P 500 gained 15.6% over the same period.

Full-year estimates stand at $1.76 per share on revenue of $2.86 billion. Fourth-quarter consensus calls for $0.59 per share on $831.27 million in revenue.

The Trade Desk carries a Zacks Rank of #4 (Sell) based on recent estimate revisions. The Internet Services industry ranks in the top 39% of all Zacks-tracked sectors.

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