Trade Desk Q2 Earnings Call Highlights

Key Points

• Q2 revenue rose 3% year over year to $715 million, but fell below expectations as large consumer packaged goods and automotive customers faced pressure and the company acknowledged execution shortcomings. Adjusted EBITDA was $241 million, with a 34% margin.
• Management issued a cautious Q3 outlook of at least $650 million in revenue and approximately $160 million in adjusted EBITDA, assuming no meaningful improvement in the operating environment. CPG and automotive represent roughly 25% of the business, while international markets and audio advertising remained growth highlights.
• The Trade Desk plans to prioritize high-return investments in AI, measurement and platform usability, including Audience Unlimited and the upcoming Zuma upgrade. Client joint business plans increased 38% year over year, and revenue covered by those plans grew six times faster than overall revenue.

Trade Desk NASDAQ: TTD reported second-quarter revenue of $715 million, up 3% from a year earlier, as the advertising technology company cited pressure among certain large consumer packaged goods and automotive customers as well as execution shortcomings.

Chief Executive Officer and co-founder Jeff Green said revenue growth fell below the company’s expectations and its internal standards. He attributed the result to a challenging macroeconomic environment for some major brands and to areas where the company “didn't execute as well as we could have.”

For the third quarter, the company expects revenue of at least $650 million and adjusted EBITDA of approximately $160 million. Chief Financial Officer Nate Olmstead, who joined the company last month, said the outlook reflects current business trends and assumes no meaningful improvement in the operating environment during the quarter.

Results, channel mix and profitability

The Trade Desk generated $241 million in adjusted EBITDA in the second quarter, representing a 34% margin. Net income was $64 million, or $0.14 per diluted share, while adjusted net income was $158 million, or $0.34 per diluted share.

Operating expenses totaled $613 million, up 6% year over year. Excluding stock-based compensation, operating expenses increased 12% to $504 million. Olmstead said the increase was driven primarily by platform operations, including infrastructure optimization, AI-powered tools, and the company’s decisioning and data offerings.

The company has moved critical workloads from third-party public cloud environments to owned data centers over the past two years. Olmstead said the transition raises platform operating expenses in 2026 but is intended to provide more efficiency and operating leverage over time.

• Video, including connected TV, represented a low-50% share of second-quarter business.
• Mobile represented a high-20% share, while display accounted for a low-double-digit share.
• Audio represented about 7% of the business and grew faster than any other channel for the fourth consecutive quarter.
• The U.S. generated approximately 83% of revenue, with international markets contributing about 17%.

Net cash provided by operating activities was $154 million, and free cash flow was $136 million. The company ended the quarter with about $1.5 billion in cash equivalents and short-term investments. It used $78 million to repurchase Class A shares during the quarter, leaving $269 million under its authorization.

Pressure in CPG and auto, growth elsewhere

Green said CPG and automotive are overrepresented on The Trade Desk’s platform and together account for roughly 25% of its business. Both sectors have faced pressure from tariffs, oil prices, consumer softness and higher input costs, according to management.

Some affected advertisers have shifted focus toward lower-cost media and fixed-price transactions, Green said, while others have temporarily reduced budgets as they reassess their go-to-market strategies. However, he said the company does not view the issue as systemic, noting that most customers and sectors are performing well.

Olmstead said medical health, automotive and travel posted strong growth among verticals representing at least 1% of company business. Food and drink and home and garden remained under pressure. Automotive continued to be a strength overall, although management said tariff effects have limited the sector’s growth potential.

The company also cited political advertising tied to U.S. midterm elections as a contributor during the quarter.

International growth remained a relative bright spot. Green said EMEA and APAC each grew nearly 30% year to date, while China grew more than 100%. The company reported more than 50% year-over-year CTV growth in both EMEA and APAC during the second quarter.

Product roadmap and client relationships

Green highlighted several product initiatives intended to support future growth. The company’s new measurement framework, now in alpha, is designed to help marketers assess incremental business outcomes across the customer journey rather than relying on last-click or last-view attribution.

The Trade Desk is also moving Audience Unlimited toward open beta. The product uses AI models and advertisers’ proprietary data to simplify third-party data selection under a subscription-style pricing approach. Green said that, in a recent campaign, a global advertiser using Audience Unlimited reduced both cost per unique household and data CPM by more than 25% compared with a prior campaign.

Later this month, the company plans to launch “Zuma,” a platform usability upgrade focused on navigation, workflows, troubleshooting and AI-enabled interaction. Green said the initiative is part of an effort to improve the Kokai platform and make its AI capabilities easier for customers to use.

The company had 217 joint business plans, or JBPs, with clients as of the second quarter, up 38% year over year. Revenue covered by these plans grew at a rate six times higher than overall revenue, Green said. He added that the majority of the company’s top 100 accounts grew at double-digit rates, while advertisers outside its top 500 grew more than 50% year to date.

Investment discipline and AI strategy

Management said it will focus spending on a smaller number of high-priority growth initiatives through the remainder of 2026 and into 2027. Olmstead said the company will invest where it sees attractive returns while applying greater discipline elsewhere, though he did not provide a revised long-term profitability framework.

Green said artificial intelligence reinforces rather than threatens the company’s demand-side platform model. He argued that AI is central to evaluating millions of advertising opportunities and that advertisers will increasingly value platforms that protect first-party data and make objective buying decisions rather than prioritize owned-and-operated inventory.

The company also pointed to expanded leadership hires, including Olmstead and executives in commercial, business development, marketing and client strategy roles. Green said these additions are intended to strengthen relationships with senior leaders at major brands and agencies as The Trade Desk seeks more durable growth.

About Trade Desk (NASDAQ:TTD)

The Trade Desk, Inc NASDAQ: TTD is a technology company that provides a demand-side platform (DSP) for programmatic digital advertising. Its platform enables advertisers, agencies and other buyers to plan, purchase and measure ad inventory across digital channels, including display, video, mobile, audio, native and connected TV. By centralizing real‑time bidding, audience targeting and inventory access, the company aims to help clients optimize media spend and reach audiences at scale across publishers and ad exchanges.

Founded in 2009 by Jeff Green and Dave Pickles, The Trade Desk grew from a focus on programmatic display into a global ad‑tech provider.

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