Trade Desk Inc. (TTD) shares tumbled 27% in pre-market trading on Friday, following a disappointing second-quarter earnings report released after the previous session's close. The advertising technology company posted results that fell well short of Wall Street expectations, triggering a sharp sell-off.
The company reported adjusted earnings of $0.34 per share, missing the consensus estimate of $0.40 and marking a decline from $0.41 a year ago. Revenue rose only 3% to $715 million, significantly below the $751 million analysts had forecast. For the third quarter, Trade Desk issued downside guidance of at least $650 million in revenue, far below the $806 million consensus estimate, further fueling investor concern. CEO Jeff Green acknowledged the quarter "did not meet the standard we set for ourselves," citing a complex environment for marketers and macro headwinds, including pressure from tariffs on consumer packaged goods and auto companies, which represent about 25% of the business.
Compounding the weak results, structural headwinds from a drawn-out fee dispute with advertising agency Publicis Groupe have weighed on sales and raised concerns about fee transparency and platform compliance. Analysts at Evercore ISI noted that shortfalls of this magnitude could reflect "significant take rate resets or very significant share losses," while Benchmark analysts questioned whether revenue would return to pre-dispute levels despite a June agreement. The results also highlighted intensifying competition from larger platforms such as Amazon, TikTok, and Meta, which are capturing greater portions of advertising budgets.
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