Trade Desk Inc. shares plunged 15% in overnight trading as investors focused on a softer than expected first quarter outlook.

The adtech company reported fourth quarter revenue of $847 million, up 14% from a year earlier and above the Wall Street consensus estimate of $841 million.

Adjusted earnings per share were $0.59, topping expectations of $0.58.

Net income rose to $187 million, or $0.39 a share, from $182 million, or $0.36 a share.

For the full year, The Trade Desk (TTD) posted revenue of $2.9 billion, up 18%, and net income of $443 million, or $0.90 a share, compared with $393 million, or $0.78 a share, in 2024.

Margins compress, stock-based costs remain elevated

While profitability remained strong, net income margin fell to 22% in the fourth quarter from 25% a year earlier. For the full year, net income margin declined to 15% from 16%.

Adjusted earnings before interest, taxes, depreciation and amortization totaled $400 million in the quarter, with an adjusted ebitda margin of 47%, flat year over year. For the full year, ebitda was $1.2 billion with a 41% margin.

Stock-based compensation remained significant at $491 million for 2025, roughly flat from the prior year, continuing to weigh on GAAP results.

“The Trade Desk delivered $2.9 billion in revenue in 2025 while continuing to generate significant profitability and cash flow,” Co-founder and Chief Executive Jeff Green said in the earnings report.

Conservative 2026 start

Investors appeared most focused on The Trade Desk (TTD)’s first quarter 2026 outlook. The company guided to revenue of at least $678 million and adjusted ebitda of about $195 million, implying a lower margin than the fourth quarter and a slower start to the year.

The company also didn’t provide full-year guidance, adding to uncertainty around 2026 growth trends.

Although The Trade Desk (TTD) continued aggressive share repurchases, buying back $1.4 billion of stock in 2025, the combination of margin pressure, heavy stock based compensation and a cautious near term outlook appeared to drive the sharp selloff in after hours trading.