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The Commerce Desk (NASDAQ: TTD) inventory tumbled 6.2% by 9:50 a.m. ET Thursday, regardless of beating analyst targets for each gross sales and earnings final night time.
Analysts forecast The Commerce Desk to earn $0.34 per share on gross sales of $841.2 million in This autumn. TTD really earned $0.59 per share on gross sales of $847 million.
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Sadly, this excellent news wasn’t fairly nearly as good because it appears at first look. “$0.59,” you see, was a non-GAAP quantity; when calculated below typically accepted accounting rules (GAAP), The Commerce Desk really earned nearer to $0.39 per share — simply 8% greater than final yr.
Considered within the context of 14% year-over-year gross sales development, this suggests weakening revenue margins for the promoting vendor and promoting effectiveness measurer, and certainly, TTD’s web revenue margin contracted by three full share factors to 22%.
For the total yr fiscal 2025, TTD grew gross sales 18% to $2.9 billion (so gross sales development additionally slowed in This autumn). On the plus facet, full-year web revenue margin was solely 15%, so This autumn represented an enchancment in that regard. Income for the yr had been $0.90 per share — up 15%.
Turning to steering, The Commerce Desk says buyers can count on income to say no sequentially in Q1 2026, however rise yr over yr, to $678 million. Even the y-o-y development fee, nonetheless, will likely be solely 10%, representing continued deceleration.
Administration didn’t give GAAP earnings steering for Q1, noting solely that “adjusted EBITDA” will likely be “roughly $195 million” — down greater than half from This autumn 2025.
Lengthy story brief, TTD is a 27.5 P/E inventory with slowing gross sales development and probably declining earnings. That feels like a promote to me.
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