Trade Desk's revenue growth slowed to just 3% in the second quarter
A drawn-out fee dispute with advertising agency Publicis Groupe weighed on Trade Desk's sales this year.
Trade Desk's growth struggles deepened in the second quarter, as the company posted an earnings and revenue miss combined with disappointing guidance.
Shares of Trade Desk (TTD) fell 23% in after-market trading Thursday following the results, deepening a year-long slide for the stock. The digital-advertising company has been facing macro headwinds as closed online ecosystems seize greater portions of advertising budgets, resulting in slowing top-line growth.
The company posted revenue of $715 million for the June quarter, falling short of the $752 million anticipated by analysts polled by FactSet and growing a mere 3% year over year. Revenue growth at Trade Desk has slowed significantly in recent quarters: The same time a year ago, the company posted 19% growth year over year. Adjusted earnings of 34 cents per share also missed consensus analyst expectations of 40 cents.
"This quarter did not meet the standard we set for ourselves, but it has reinforced our belief that we are focused on the right opportunities for the future," CEO Jeff Green shared in a press release.
"While there is work ahead, I am confident our actions will help marketers drive better business outcomes and support the shift of media budgets toward the open internet," he added.
Down 53% this year so far, Trade Desk is the second-worst performing stock in the S&P 500 SPX in 2026. The company's forward earnings multiple has compressed to 16, down from the nearly 90 multiple it commanded just a year ago, according to FactSet.
Trade Desk's third-quarter guidance also disappointed investors. Management forecasted revenue of $650 million, missing Wall Street estimates of $807 million. Adjusted earnings before interest, taxes, depreciation and amortization are expected to be approximately $160 million.
On the earnings call, Green shared that most of the company's revenue comes from Fortune 500 companies. "All of our customers are operating in a fundamentally different environment than they were even a year ago," he said. Consumer packaged goods and auto companies are "overrepresented" on the platform, making up 25% of the business, and those companies have been hit hard by tariffs and oil prices, Green added.
Artificial intelligence is also changing the nature of the advertising industry, which Green believes will lead to more competition.
The company's drawn-out dispute with advertising agent Publicis Groupe (PUBGY) has also hurt revenue and weighed on the stock. In March, a third-party audit commissioned by Publicis accused Trade Desk of levying hidden fees, leading the agency to remove Trade Desk from its recommended platform list and urge clients to pause spending.
The two companies reached an agreement in June, but it's unclear when or if revenue will return to predispute levels, Benchmark analyst Mark Zgutowicz wrote in a Thursday note.
-Christine Ji