Financials and Estimates

The three-year record and what the Street now expects

The Trade Desk's last three fiscal years show a business that kept compounding revenue and expanding its GAAP margins while turning more than a quarter of sales into free cash flow, carrying $1.3 billion of net cash and no drawn debt. Two facts complicate the picture: revenue growth has roughly halved toward 10%, and stock-based compensation of about $490 million a year runs above GAAP net income — so the adjusted profits the market pays roughly ten times for are close to double the statutory figure.

This tab lays out the reported numbers a cold reader needs before any judgment on price: the income statement, cash generation, the balance sheet, the wedge between GAAP and "adjusted," and the forward consensus.

Revenue: still growing, growing more slowly

Revenue rose from $1.95 billion in FY2023 to $2.90 billion in FY2025 [1]. The rate, not the level, is what changed: a 26% gain in FY2024 gave way to 18% in FY2025, and consensus now models roughly 10% for FY2026 and FY2027.

Source: FY2023–FY2025 reported per FY2025 Annual Report, Consolidated Statements of Operations [2]; FY2021–FY2022 per company filings; FY2026–FY2027 consensus estimates.

Source: derived from reported revenue, FY2025 Annual Report [3]; FY2026–FY2027 consensus estimates.

The deceleration is not linear — FY2024 accelerated on FY2023 before FY2025 rolled over — which matters for how a reader reads the forward number. The company reports as a single operating segment, the advertising-technology platform; beyond a United States/International split it discloses no revenue breakdown by channel or vertical in the financial statements [4], so the growth line above is the cleanest lens the filings give.

Margins: real GAAP operating leverage

Below revenue, the three years show genuine operating leverage. GAAP operating margin roughly doubled, from 10.3% in FY2023 to 20.3% in FY2025, as revenue outgrew operating expenses [5]. General and administrative expense actually fell in FY2025, to $518 million from $536 million, partly because the stock-based expense tied to the CEO Performance Option is winding down [6].

Source: operating and net margin from Consolidated Statements of Operations [7]; FCF margin derived from Consolidated Statements of Cash Flows [8].

Net margin dipped slightly in FY2025, to 15.3% from 16.1%, because the tax rate rose — the provision for income taxes jumped to $215 million from $114 million even as pre-tax income grew [9]. The operating line, not the bottom line, is where the leverage shows.

Cash and the balance sheet: the bankruptcy question

For a reader who wants the chance of bankruptcy near zero, the balance sheet answers plainly. At the end of FY2025, The Trade Desk held $658 million of cash and $645 million of short-term investments — about $1.3 billion of gross liquidity — against no drawn debt [10]. Free cash flow reached $796 million, or 1.8 times GAAP net income [11].

Source: cash and investments from Consolidated Balance Sheets [12]; free cash flow derived from Consolidated Statements of Cash Flows [13].

Two features of the cash statement deserve a reader's eye. First, net cash fell over FY2025, from about $1.9 billion to $1.3 billion, because the company repurchased $1.38 billion of stock — well above the year's free cash flow — and drew the balance down to fund it [14]. Second, capital spending is rising fast: purchases of property and equipment reached $197 million in FY2025, up from $98 million in FY2024 and $47 million in FY2023, as the company builds out infrastructure for its platform [15]. Free cash flow has still grown each year, but capex is now a real and growing claim on operating cash.

Source: Consolidated Statements of Cash Flows, FY2025 Annual Report [16].

The large accounts-receivable balance on the balance sheet — $3.8 billion, larger than a full year of revenue [17] — is not a collection problem but the gross advertising spend the company invoices on behalf of clients and largely pays through to media owners; it grew alongside a $3.0 billion payable. The economics of that pass-through, and the quality of the cash it throws off, are their own subject and belong to a later chapter.

The GAAP-versus-adjusted wedge

The feature to hold in mind about these earnings is that stock-based compensation is large, roughly flat, and excluded from every "adjusted" figure the market quotes. In FY2025 the company recorded $491 million of stock-based compensation — 17% of revenue and about 111% of GAAP net income [18]. Adjusted EBITDA of $1.20 billion, the company's headline profitability measure, is reached by adding that $491 million back to net income, along with depreciation, tax and net interest income [19].

Source: net income and stock-based compensation from Consolidated Statements of Cash Flows [20]; Adjusted EBITDA from Non-GAAP reconciliation [21].

There is a fairer reading on the other side. Stock-based compensation as a share of revenue is falling — 25% in FY2023, 20% in FY2024, 17% in FY2025 — so the drag is shrinking as the business scales [22], and the company has been repurchasing stock partly to contain the dilution it creates. The point is not that adjusted numbers are illegitimate; it is that a value investor sizing a margin of safety should know the "earnings" in a forward price-to-earnings multiple are the adjusted ones. On GAAP, FY2025 diluted earnings were $0.90 a share; the adjusted basis consensus uses was roughly twice that.

Source: Consolidated Statements of Operations [23], Cash Flows [24], and Non-GAAP reconciliation [25], FY2025 Annual Report. Diluted EPS is GAAP; FY2023 Adjusted EBITDA not disclosed in this filing.

What the Street expects — and is still cutting

Consensus models revenue of about $3.18 billion in FY2026 and $3.48 billion in FY2027, each roughly 10% growth, with adjusted earnings per share of about $1.85 and $2.15. Against the current $19.53 share price, that is roughly 11 times FY2026 and 9 times FY2027 adjusted earnings — cheap-looking, but on the adjusted basis that adds back stock compensation, and on a base that keeps being marked down.

Source: FY2025 revenue reported [26]; FY2026–FY2027 revenue and adjusted EPS, and FY2025 adjusted EPS, per consensus estimates.

The revision trend cuts against the cheap-multiple read. The FY2026 adjusted EPS estimate has been cut from about $2.07 ninety days ago to $1.85 today, and in the last 30 days downward EPS revisions outnumbered upward ones by roughly 18-to-1 across the near-term quarters and years. This is not a stabilised forecast; it is one the sell side is still lowering.

Source: consensus estimate revisions, as reported by the estimate aggregator.

Sentiment on the stock is now cautious rather than bearish. Of 36 analysts, 13 rate it buy or strong buy, 19 hold, and 4 sell or strong sell; the mean price target is $24.42 and the median $24.50, against the $19.53 price — an implied upside of roughly 25%, with a range from $11 to $38 that captures how unsettled the view is.

Source: analyst price targets and recommendations, consensus data as of July 2026.

The reported record is a profitable, cash-rich, debt-free business priced near ten times adjusted free cash flow, on earnings that lean on an add-back and a growth rate still being cut toward 10%. Whether that is margin of safety or a value trap is most sensitive to the moat and the durability of the growth, which the chapters that follow take up.