The Trade Desk, Inc. TTD used its Q2 earnings call to address slower-than-expected growth, citing macro pressure on major advertisers and shortcomings in its own execution. Revenues rose 3% year over year to $715 million.
Adjusted earnings of $0.34 per share missed the Zacks Consensus Estimate of $0.41 by 17.10%. Revenues of $715.10 million missed the consensus mark of $751.60 million by 4.90%.
TTD Confronts Macro and Execution Gaps
Jeff Green, co-founder, CEO, president and chairman, said CPG and automotive advertisers face tariffs, oil-price pressure and uneven consumer demand. Those categories account for around 25% of TTD's business.
CEO Green said some pressured brands are temporarily reducing budgets or choosing lower-cost fixed-price and programmatic-guaranteed buying, giving up buyer decisioning in exchange for lower transaction costs.
CEO Green added that most clients are growing, with financial services, parts of technology and pharma among stronger areas. About half of CPG and automotive clients are also growing well on the platform.
The Trade Desk Sets a Cautious Q3 Baseline
Nathan Olmstead, chief financial officer, guided for at least $650 million of Q3 revenues and approximately $160 million of adjusted EBITDA.
A New Street Research analyst asked about the assumptions behind the outlook. CFO Olmstead said visibility is somewhat more limited than in recent history and the guide assumes no meaningful improvement in Q3.
CFO Olmstead told a Cannonball Research analyst that capital will go toward opportunities with attractive returns, with tighter discipline elsewhere. He plans to update investors later on the company's longer-term profitability framework.
TTD Puts Products at the Center of Its Response
CEO Green said a major Kokai usability upgrade called Zuma will launch later in August, streamlining navigation and workflows while incorporating more AI into the user experience.
CEO Green also highlighted a measurement framework in alpha and Audience Unlimited, which is moving to open beta. One campaign reduced both cost per unique household and data CPM by more than 25%.
Responding to a Susquehanna analyst, CEO Green named Zuma, measurement, Audience Unlimited and enterprise Kokai among priorities for stabilizing growth and improving visibility into incremental business outcomes.
The Trade Desk Defends Its Model and Agency Ties
An RBC Capital Markets analyst asked whether AI could disrupt the DSP model. CEO Green said AI strengthens decisioning because TTD's platform evaluates 20 million ad opportunities each second.
A KeyBanc analyst pressed CEO Green on pricing. He said The Trade Desk remains willing to adjust pricing to win business but sees more opportunity in simplification than in materially changing the net rate.
A Truist analyst asked about agency relationships, including Publicis. CEO Green said the prior dispute with Publicis is behind the companies and many brand joint business plans are developed with agencies.
TTD Points to JBPs and Global Growth Pockets
CEO Green said TTD had joint business plans with 217 clients at quarter-end, up 38% year over year. Revenues tied to those agreements grew at six times overall revenue growth.
CEO Green also said a majority of the top 100 accounts grew at double-digit rates. Outside the top 500 advertisers, remaining clients grew more than 50% year over year on a year-to-date basis.
CFO Olmstead said CTV and audio again posted double-digit growth. EMEA and APAC each grew almost 30% year to date, with CTV up more than 50% year over year in both regions.
The Trade Desk Tightens Its Operating Focus
CEO Green said resources will concentrate on a smaller set of high-priority growth initiatives through the rest of 2026 and into 2027, with some teams expanding and resources elsewhere being redirected.
CFO Olmstead reinforced that approach, emphasizing operating rigor, capital discipline and a more scalable model. Management's focus is improving execution while newer leaders gain time to influence growth and efficiency.
TTD's Zacks Signals Remain Balanced
TTD carries a Zacks Rank #3 (Hold), with a Value Score of A, Growth Score of B, Momentum Score of B and VGM Score of A. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The A and B Style Scores are favorable grades, while the Rank remains neutral.
Zacks Style Scores complement the Zacks Rank over a similar near-term horizon rather than override it. The Zacks Rank can change as earnings estimates are revised after the just-reported results.
Research Chief Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.
Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
The Trade Desk (TTD): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
Zacks Investment Research
