The Trade Desk (TTD) Earnings & Analysis

Latest quarter

The Trade Desk reported Q2 FY2026 revenue of $715.1 million, below the $751.6 million consensus. Adjusted earnings per share were $0.34, also below the $0.41 consensus. Revenue rose from $694.0 million a year earlier, while diluted earnings per share fell to $0.14 from $0.18.

The company’s filing attributed the revenue increase primarily to more advertising campaigns from new clients, partly offset by lower spending from existing clients. It also cited increased pricing for value-added services and changes in how some related costs were recognized.

Gross margin fell to 74.2% from 78.2%, and operating margin declined to 14.2% from 16.8%. The filing said platform operations expense increased as costs for supplier-provided components, hosting and personnel rose. CFO Nate Olmstead said the company generated $154 million in cash from operating activities and used $78 million to repurchase shares during the quarter.

Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.

What management said on the call

CEO Jeff Green said revenue growth fell below the company’s expectations for two reasons: macroeconomic pressure on major advertisers and execution that fell short of what the company could have achieved. He said some advertisers had temporarily reduced budgets while developing new approaches to their markets. Consumer packaged goods and automotive advertisers generated around 25% of the business, Green said, and both categories had been affected by tariffs and oil prices.

Green also said most clients were growing. He reported that revenue from advertisers outside the top 500 was growing over 50% year to date, while the EMEA and APAC regions had each grown almost 30%. The company had joint business plans with 217 clients as of Q2, up 38% from a year earlier, and revenue under those plans grew six times faster than overall revenue, he said.

On competition and pricing, Green said some advertisers were choosing fixed-price or programmatic guaranteed transactions. He contrasted those approaches with the company’s focus on using data and real-time decisions to buy advertising. He said Audience Unlimited, which is moving to open beta, uses a subscription percentage to simplify access to third-party data. A measurement framework in alpha is intended to help marketers assess advertising across the customer journey, he added.

CFO Nate Olmstead said connected TV and audio both grew at double-digit rates in Q2. He attributed higher operating expenses primarily to platform operations, including infrastructure and AI tools. The move from public cloud environments to owned data centers increases platform operations expense in 2026, he said, while giving the company more flexibility to support AI and machine learning workloads.

For the remainder of 2026, Olmstead said the company would focus investment on priority opportunities while improving its operating model. Green said some teams would continue to grow while others would not.

Guidance

The Trade Desk said its third-quarter outlook assumed no improvement in the macro backdrop. Olmstead said the transition to owned data centers would increase platform operations expense in 2026.