LOS ANGELES – The Trade Desk (TTD) saw its stock price tumble on Monday after the ad-tech company issued a second-quarter revenue forecast that fell short of Wall Street estimates, sparking a wave of analyst downgrades and raising concerns about the firm's growth trajectory.
Shares of the demand-side platform operator slid as low as $19.72 before recovering slightly to trade around $23.08, with more than 41 million shares changing hands—well above average volume. The sharp decline came after the company projected Q2 revenue of at least $750 million, below the $771 million consensus forecast compiled by Investing.com. That guidance implies year-over-year growth of roughly 8%, a significant deceleration for a company long viewed as a bellwether for rapid expansion in programmatic advertising.
The first-quarter results, while not the primary catalyst for the selloff, also showed signs of strain. Revenue for the period ended March 31 rose 12% to $689 million from $616 million a year earlier, but net income fell to $40 million, or 6% of revenue, compared with $51 million in the year-ago period. GAAP diluted earnings per share came in at $0.08, down from $0.10. Adjusted EBITDA edged lower to $206 million from $208 million.
Several analysts moved quickly to downgrade the stock. Oppenheimer's Jason Helfstein lowered his rating to Perform from Outperform, stating he sees no catalyst until revenue growth reaccelerates. William Blair's Ralph Schackart shifted to Market Perform, citing ongoing market share losses to rivals, persistently slow growth, and pricing issues related to Kokai, The Trade Desk's upgraded AI platform. At KeyBanc, Justin Patterson dropped his rating to Sector Weight, pointing to pushback from advertising agencies, instability in the Middle East, and intensifying competitive threats.
CEO Jeff Green defended the quarter, describing it as “another strong quarter” and attributing the performance to strategic upgrades. He acknowledged macro headwinds but emphasized the company's focus on “objective, transparent and data-driven media buying” across the open internet. Interim CFO Tahnil Davis reiterated that the company's full-year adjusted EBITDA margin target remains at no less than 40%.
Competitive dynamics are becoming increasingly intense. Green highlighted Amazon as a key rival, noting that The Trade Desk's pharma group had managed to reclaim business that had migrated to Amazon's ad platform. The company also secured a 2026 joint business plan with an unnamed client that calls for a 114% year-over-year increase in spending on The Trade Desk. To counter the slowdown, management rolled out several new products and partnerships, including Koa Agents with Stagwell, OpenAds publisher adoption, LinkedIn data integration for connected TV, and fresh retail-media integrations with Pacvue, Skai, and Dollar General.
Leadership changes are also adding to the uncertainty. According to Digiday, Chief Strategy Officer Samantha Jacobson is leaving to join OpenAI but will remain on The Trade Desk's board. She is the latest in a series of senior departures that the company describes as a changing of the guard.
The challenges may extend beyond the current cycle. In its latest quarterly filing, The Trade Desk flagged several risks: clients could easily shift media budgets to rivals, agency and advertiser pushback on pricing could intensify, competition could heat up further, and spending on AI could drive up platform costs. These factors are particularly concerning given the softening growth forecasts.
Despite the headwinds, the company retains financial flexibility. As of March 31, it held $878 million in cash and cash equivalents, plus $528 million in short-term investments. Operating cash flow for the quarter was $392 million, and $327 million remains available under its share buyback authorization. The key question now is whether Q2 demand will stabilize enough to make the soft guidance appear conservative rather than a harbinger of deeper trouble.
