Can The Trade Desk's Progress in Audio Drive Its Revenue Expansion?

The Trade Desk's Q4 2025 Performance and Audio Segment Growth

The Trade Desk (TTD) reported impressive results for the fourth quarter of 2025, with revenue reaching $847 million—a 14% increase from the previous year, or 19% growth when excluding political advertising. Video, including connected TV (CTV), remained the company’s largest segment, accounting for half of total revenue. Notably, the audio segment is gaining momentum, now representing 6% of the business and achieving the fastest year-over-year growth among all channels.

Can Audio Drive Significant Revenue Growth?

The rapid expansion of the audio segment prompts the question of whether it can substantially impact The Trade Desk’s overall revenue growth. As consumers dedicate more time to music and podcasts, the market for digital audio advertising continues to expand. The company’s AI-driven platform, Kokai, has become a crucial factor in enhancing audio campaign performance, with nearly all clients utilizing it. This widespread adoption is reinforcing The Trade Desk’s competitive position.

Business Diversification and Future Outlook

While the audio segment’s growth supports greater business diversification, it is unlikely to be the sole catalyst for accelerating revenue. However, when combined with the strength in CTV, ongoing AI optimization, and the rise of retail media, The Trade Desk is well-positioned for future success.

Despite these advantages, there are challenges ahead. The company projects at least $678 million in revenue for the first quarter, indicating a 10% year-over-year increase. Softness in consumer packaged goods and automotive sectors, along with broader economic uncertainty, may constrain short-term growth. Additionally, audio remains a relatively small part of total revenue, so its impact on overall growth may take time to materialize.

Competitive Landscape

The digital advertising market is highly competitive. Amazon (AMZN) is rapidly expanding its demand-side platform (DSP) business, intensifying competition for The Trade Desk. Independent ad-tech firms like Magnite (MGNI) are also increasing their efforts to capture advertising budgets.

How Amazon and Magnite Are Strengthening Their Positions

Amazon generated $68.6 billion in ad services revenue in 2025, solidifying its position as a leading DSP provider. The company is investing heavily in both DSP and CTV, directly challenging The Trade Desk. In the fourth quarter, Amazon Ads brought in $21.3 billion, a 22% year-over-year increase. This growth is fueled by comprehensive ad solutions that leverage vast amounts of shopping, browsing, and streaming data, powered by advanced AI. Sponsored Products remain Amazon’s largest ad offering, and Prime Video ads now reach 315 million viewers across 16 countries.

Magnite operates as a supply-side platform, enabling publishers to manage and monetize ad inventory across formats such as streaming, video, display, and audio. In the fourth quarter, Magnite reported $205.4 million in revenue (up 6% year over year) and an adjusted EBITDA margin of 43%. CTV continues to be a major growth driver, supported by strong partnerships, increased adoption of its ClearLine platform, and the launch of SpringServe, a dedicated CTV ad serving and SSP solution.

TTD Stock Performance, Valuation, and Analyst Estimates

Over the past month, The Trade Desk’s share price has declined by 34.1%, compared to a 7.6% drop in the Internet Services sector.

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Currently, The Trade Desk trades at a forward price-to-earnings ratio of 11.62, which is significantly lower than the industry average of 25.93.

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Analyst consensus estimates for The Trade Desk’s 2026 earnings have remained steady over the past two months.

Image Source: Zacks Investment Research

The Trade Desk currently holds a Zacks Rank #4 (Sell).