Can The Trade Desk's Audio Momentum Boost Its Top-Line Growth?

The Trade Desk TTD delivered strong fourth-quarter 2025 results, wherein revenues rose 14% year over year to $847 million, or 19% excluding political spend. While video, which includes CTV, remains the largest share of its business (50% share in the fourth quarter), audio is emerging as a key driver. Management noted that audio accounted for 6% of the business and “grew year over year at a rate higher than any other channel” in the fourth quarter.

Audio’s strong growth performance raises an important question: Can this segment meaningfully contribute to overall top-line acceleration?

Audio channel is benefiting as consumers spend increasing time listening to music and podcasts, creating an expanding addressable market for digital audio ads. The company’s AI-powered platform, Kokai, is emerging as a key catalyst unlocking performance gains in audio campaigns. TTD highlighted that almost 100% of its clients are running through Kokai. This is strengthening TTD’s competitive moat.

The Trade Desk Price, Consensus and EPS Surprise

The Trade Desk price-consensus-eps-surprise-chart | The Trade Desk Quote

Increasing Audio momentum supports diversification. However, audio alone is unlikely to boost The Trade Desk’s revenue growth trajectory. But Audio momentum, combined with CTV strength, AI-driven optimization efforts and retail media acceleration, positions it well going forward.

However, challenges remain. The company guided for at least $678 million in first-quarter revenues, implying 10% year-over-year growth. CPG and auto softness, along with broader macro uncertainty, could limit near-term expansion. Additionally, audio still represents a relatively small portion of revenues, meaning its impact on consolidated growth may take time to scale significantly.

TTD faces tremendous competition in the digital ad space. Amazon’s AMZN expanding DSP business is giving tough competition to TTD. Beyond big tech, independent ad-tech companies, such as Magnite MGNI, are expanding their efforts and competing for ad dollars.

Taking a Look at Business Strengthening Efforts of AMZN & MGNI

With annual ad services revenues of $68.6 billion in 2025, Amazon is quickly gaining market share in the digital ad space. Currently, it is one of the leading DSP players. AMZN is ramping up investment in the DSP and CTV businesses, putting it in direct competition with TTD.

Amazon Ads delivered $21.3 billion in revenues in the fourth quarter, up 22% year over year. The business is being driven by its full-funnel offerings, combining trillions of shopping, browsing and streaming signals with cutting-edge AI to deliver relevant ads. Sponsored Products remain the largest ads offering, while Prime Video ads are now available in 16 countries with a 315 million ad-supported audience.

Magnite is a supply-side platform that helps publishers manage and sell their ad inventory across various formats like streaming, online video, display and audio. MGNI reported fourth-quarter revenues of $205.4 million, up 6% year over year, and adjusted EBITDA of $83.8 million, representing a robust 43% margin.

CTV continues to remain a key driver for MGNI with deep partnerships with major publisher partners and agency marketplaces, along with momentum in SMB advertising. Higher uptake of its ClearLine platform and the launch of SpringServe (CTV ad serving and SSP platform) bode well.

TTD Price Performance, Valuation and Estimates

Shares of TTD have lost 34.1% in the past month compared with Internet – Services industry’s decline of 7.6%.

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In terms of forward price/earnings, TTD’s shares are trading at 11.62X, lower than the Internet Services industry’s ratio of 25.93X.

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The Zacks Consensus Estimate for TTD’s earnings for 2026 has been unchanged over the past 60 days.

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TTD currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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