The Trade Desk revenue rises just 3% as stock downgraded to "Sell"
Key Facts
Seeking Alpha downgraded The Trade Desk to "Sell," according to a news summary; its analysis page could not be verified directly. The move came after the company reported revenue of $715 million in the second quarter of 2026, up just 3% year over year. Revenue was $694 million in the year-earlier period of 2025, when it grew 19%. The comparison shows a clear slowdown in growth between the two periods. GAAP net income also fell to $64 million from $90 million a year earlier, and its margin declined to 9% from 13%.
The decline extended to adjusted EBITDA, which was $241 million in the second quarter, compared with $271 million a year earlier. Its margin fell to 34% from 39% in the year-earlier period. According to an Investing.com report on BMO's downgrade, revenue and adjusted earnings came in 5% and 23% below analyst consensus, respectively. Those gaps indicate that the weak results extended beyond slower revenue growth to include profitability relative to market expectations. The report said BMO attributed the performance to softer macroeconomic conditions, some brands shifting to lower-cost programmatic advertising deals and fixed-price media, as well as internal execution missteps.
The company set third-quarter 2026 guidance for revenue of at least $650 million and adjusted EBITDA of about $160 million. Investing.com said the guidance was 19% below analyst consensus for revenue and 53% below for adjusted earnings. After revising its estimates, BMO cut its revenue forecasts for the company by 17% for 2026 and 28% for 2027. The report said BMO's revised estimates imply revenue contractions of 3% in 2026 and 8% in 2027. These forecasts point to a weaker trajectory than the revenue growth recorded in the second quarter and put execution of the company's guidance under scrutiny in the coming quarter. Third-quarter guidance remains the company's stated operating estimate for the next period.
Chief Executive Jeff Green said the quarter "did not meet the standard we set for ourselves," adding that the company is taking steps to strengthen execution and develop its platform. The Trade Desk, meanwhile, said its customer retention rate remained above 95% in the second quarter and had stayed at that level for more than a decade. The metric offers another view of the company's operating performance alongside slower revenue growth and lower margins. On September 3, the company announced a plan to cut its total workforce by about 15%, with implementation expected to be largely complete during the third quarter of 2026. It estimated restructuring and related expenses at between $39 million and $51 million, associated with employee benefits and severance. It said those costs would be partly offset by reversing between $4 million and $5 million in stock-based compensation.
The company used about $78 million to repurchase its Class A shares during the second quarter. The remaining authorized share repurchase balance was $269 million as of June 30, 2026. These figures provide context for the company's capital allocation decisions as earnings and margins declined from a year earlier. The company's stock, listed under the ticker TTD, closed at $13.16 on October 22, 2026. Investing.com reported that several research firms cut their ratings or price targets on the stock after the second-quarter results. The company's third-quarter guidance, along with execution of its restructuring plan, which is intended to be largely completed during the same period, are the key upcoming dated milestones.