The Trade Desk reported Q2 2026 results below expectations, with revenue growth slowing to 3% and providing a weak Q3 guide due to macro pressures on CPG/auto clients and execution issues. Management highlighted strong growth in CTV/audio, international regions, and JVPs, while emphasizing new products (Audience Unlimited, Zuma) and leadership additions as future growth drivers. Q2 revenue of $715M was below expectations, and Q3 revenue guide of at least $650M implies a significant YoY decline.
The Trade Desk reported Q2 2026 results below expectations, with revenue growth slowing to 3% and providing a weak Q3 guide due to macro pressures on CPG/auto clients and execution issues. Management highlighted strong growth in CTV/audio, international regions, and JVPs, while emphasizing new products (Audience Unlimited, Zuma) and leadership additions as future growth drivers. Q2 revenue of $715M was below expectations, and Q3 revenue guide of at least $650M implies a significant YoY decline.
The Trade Desk reported Q2 2026 results below expectations, with revenue growth slowing to 3% and providing a weak Q3 guide due to macro pressures on CPG/auto clients and execution issues. Management highlighted strong growth in CTV/audio, international regions, and JVPs, while…
Guidance · revenue to $650M
Weakness is concentrated in CPG and automotive verticals, which represent ~25% of the business, due to tariffs and consumer bifurcation.
Management remains confident in the long-term opportunity, citing JVPs growing 6x faster than overall revenue, 38% year-over-year growth in JVPs, and over 50% growth in smaller accounts.
Management sees AI as enhancing decisioning and creating new opportunities, with products like Audience Unlimited and enterprise Kokai showing strong early results. They believe AI increases the value of objective, data-driven buying and expands the addressable market, countering the threat of disruption to the DSP model.
Demand is mixed: large CPG and auto clients face macro pressures and some are shifting to cheaper media, while JVPs, top accounts, and international regions (EMEA, APAC, China) show strong growth. Overall revenue growth decelerated, with Q3 guidance implying a decline, reflecting limited visibility and no assumption of macro improvement.
The company has transitioned workloads from public cloud to owned data centers, increasing platform operations expense in 2026 but positioning for greater efficiency and operating leverage over time. They are investing in AI-powered tools and infrastructure to support decisioning and data offerings.
Management acknowledges underperformance and macro headwinds but expresses confidence in long-term opportunity and product roadmap, balancing realism with optimism.
“Over the past two years, we've transitioned critical workloads from third-party public cloud environments to owned data centers.”
“We've spent a lot of time on this call already talking about our joint business plans... including white label products of both Audience Unlimited as well as a Gen Tech AI products.”
| Metric | Period | Range | Midpoint | Status |
|---|---|---|---|---|
| Op marginADJUSTED_EBITDA | FY2026 Q3 | $160M | $160M | GUIDED |
| Revenue | FY2026 Q3 | $650M | $650M | GUIDED |
| Issued | Metric | Target | Guide | Actual | Outcome |
|---|---|---|---|---|---|
| FY2026 Q1 | Op margin | FY2026 Q2 | 35% | 14.21% | Missed |
Successful campaign outcomes with General Mills showcase the value of TTD's data/retail integrations and could encourage more CPG spend from GIS and peers.
“General Mills is a great example. They recently ran a campaign for its Nature Valley brand in the UK.”
And we are seeing most of the leading brands in those categories deepen their partnerships with us.
… and Hightouch, helping brands activate their data wherever it creates the most value. For most of them, we are among, if not the largest, programmatic partner. We got to this place by minimizing the conflict of interest and creating clear, mutually beneficial partnerships. The same is true in retail media. Participating retailers on our platform now represent more than 80% of US retail sales. This includes our recently renewed partnership with Walmart, the largest retailer in the world. We believe our objectivity uniquely positions us to help retailers collaborate with brands in ways that vertically integrated competitors simply cannot. We're also seeing this modernization play out globally. Our investments across Europe and APAC and other major international markets are creating new opportunities as global brands increasingly adopt data-driven decision advertising. Most importantly, our customers are telling us that this strategy is working. General Mills is a great example. They recently ran a campaign for its Nature Valley brand in the UK. They were interested in pairing retail data and real-time optimizations to measure the impact on sales and return on ad spend. The campaign used retail data from Tesco, Sainsbury's, and Ocado, as well as in-flight COA AI optimizations, predictive clearing, and cross-device targeting. Over four months, the campaign drove a 5x uplift in sales, a 92% lower CPM compared with the benchmark, and a 2x ROAS improvement versus without using retail data. This is a great example of a leading global brand embracing AI and decisioning to drive more outcomes for their business. When I think about everything that we've discussed today, that's ultimately what gives me confidence. The market opportunity is expanding. Our competitive advantages are becoming more relevant. Our partnerships are becoming deeper, and our customers are increasingly choose to build their brands for the long term using our platform. In a market with more pressures, objectivity matters more. Let me conclude by saying this. While we have some near-term challenges, my conviction about the Trade Desk has never been stronger. Our team, our business model, and our partners keep getting better for the opportunity ahead. Digital advertising continues to gain share globally. Connected TV continues to shape the largest media market in the world. Retail media …
P&G's macro pressures are directly reducing advertising spend on TTD's platform, signaling near-term demand softness for large CPG advertisers.
“P&G has described the environment as volatile and challenging and recently stated on their earnings call, we anticipate continued pressure from commodity and related costs.”
Shifting consumer demographics in auto sales could alter Ford's advertising strategy, potentially affecting demand for TTD's platform.
“Both Ford and General Motors highlighted in recent earnings report the growing dependence of auto sales on affluent consumers.”
… have described a change in the macro where the consumer wealth bifurcation is creating the squeeze on their customers that is highly uneven consumer behavior, where the high-income consumers are doing well and the lower-income consumers are not. For CPGs, this is causing change across everything from packaging to advertising allocation, promotion strategy, and, of course, go-to-market. This uneven consumer pressure is impacting autos remarkably. Both Ford and General Motors highlighted in recent earnings report the growing dependence of auto sales on affluent consumers. And industry research from Oxford Economics shows earners in the top 20% of households currently represent more than 50% of new vehicle sales. Both categories are having to create new approaches to advertising. In some cases, budgets have been temporarily reduced as they formulate new plans to go to market. In other cases, some brands are falling prey to low-cost, low-decisioning methods like programmatic guaranteed and fixed price. Doing so essentially means buyers will give away their decisioning in a great buyer's market to the sellers in exchange for lower costs of transactions. This approach is often …
Tariff-related cost pressures at GM are curbing advertising budgets, a key headwind for TTD's automotive vertical.
“General Motors described a multi-billion dollar impact from tariffs in addition to plans to onshore production to avoid future tariff risk.”
… continued pressure from commodity and related costs to the crisis in the Middle East. If the conflict eases and oil comes down, trade lanes open up. That will help. If it goes the other way, it will hurt. CPGs and autos are two of the sectors of the economy that are most overrepresented on our platform. Around 25% of our business is generated by those two categories alone. Autos and CPG have both been set back by tariffs and oil prices. General Motors described a multi-billion dollar impact from tariffs in addition to plans to onshore production to avoid future tariff risk. Both of these categories of advertisers almost unanimously have described a change in the macro where the consumer wealth bifurcation is creating the squeeze on their customers that is highly uneven consumer behavior, where the high-income consumers are doing well and the lower-income consumers are not. For CPGs, this is causing change across everything from packaging to advertising allocation, promotion strategy, and, of course, go-to-market. This uneven consumer pressure is impacting autos remarkably. Both Ford and General Motors highlighted in recent earnings report the growing dependence of auto sales …
Deepening retail media partnership with Walmart validates TTD's independent platform and provides a durable demand channel, important for WMT's retail media network growth.
“This includes our recently renewed partnership with Walmart, the largest retailer in the world.”
And we are seeing most of the leading brands in those categories deepen their partnerships with us.
… also makes us a better partner. As more of our competitors prioritize their own owned and operated inventory, our independence becomes even more valuable to advertisers, publishers, retailers, and technology partners alike in the long term. That's one of the reasons why our partnerships continue to deepen. Today, we work with many of the world's leading media companies, including Disney, Netflix, NBC Universal, Fox, Paramount, Spotify, and News Corp. We also partner with the infrastructure of the open internet through companies like Snowflake, Databricks, LiveRamp and Hightouch, helping brands activate their data wherever it creates the most value. For most of them, we are among, if not the largest, programmatic partner. We got to this place by minimizing the conflict of interest and creating clear, mutually beneficial partnerships. The same is true in retail media. Participating retailers on our platform now represent more than 80% of US retail sales. This includes our recently renewed partnership with Walmart, the largest retailer in the world. We believe our objectivity uniquely positions us to help retailers collaborate with brands in ways that vertically integrated competitors simply cannot. We're also seeing this modernization play out globally. Our investments across Europe and APAC and other major international markets are creating new opportunities as global brands increasingly adopt data-driven decision advertising. Most importantly, our customers are telling us that this strategy is working. General Mills is a great example. They recently ran a campaign for its Nature Valley brand in the UK. They were interested in pairing retail data and real-time optimizations to measure the impact on sales and return on ad spend. The campaign used retail data from Tesco, Sainsbury's, and Ocado, as well as in-flight COA AI optimizations, predictive clearing, and cross-device targeting. Over four months, the campaign drove a 5x uplift in sales, a 92% lower CPM compared with the benchmark, and a 2x ROAS improvement versus without using retail data. This is a great example of a leading global brand embracing AI and decisioning to drive more outcomes for their business. When I think about everything that we've discussed today, that's ultimately what gives me confidence. The market opportunity is expanding. Our competitive advantages are becoming more relevant. Our …
Deep partnerships with premium streaming platforms like Netflix enable TTD to access critical premium CTV inventory, supporting its value proposition.
And we are seeing most of the leading brands in those categories deepen their partnerships with us.
… give more competition to market share that was once locked in traditional search marketing. AI is creating exponentially more data, more choices, and of course, More complexity. In the new AI world, our decisioning capabilities are better than ever. They're fueled by AI. And objective decisioning is even more valuable. Brands don't need another platform trying to sell them media. They need a platform that can evaluate the millions of opportunities available every second on the internet and objectively help them make better decisions. That's exactly what we've been building since the day we founded the Trade Desk. Our objectivity also makes us a better partner. As more of our competitors prioritize their own owned and operated inventory, our independence becomes even more valuable to advertisers, publishers, retailers, and technology partners alike in the long term. That's one of the reasons why our partnerships continue to deepen. Today, we work with many of the world's leading media companies, including Disney, Netflix, NBC Universal, Fox, Paramount, Spotify, and News Corp. We also partner with the infrastructure of the open internet through companies like Snowflake, Databricks, LiveRamp and Hightouch, helping brands activate their data wherever it creates the most value. For most of them, we are among, if not the largest, programmatic partner. We got to this place by minimizing the conflict of interest and creating clear, mutually beneficial partnerships. The same is true in retail media. Participating retailers on our platform now represent more than 80% of US retail sales. This includes our recently renewed partnership with Walmart, the largest retailer in the world. We believe our objectivity uniquely positions us to help retailers collaborate with brands in ways that vertically integrated competitors simply cannot. We're also seeing this modernization play out globally. Our investments across Europe and APAC and other major international markets are creating new opportunities as global brands increasingly adopt data-driven decision advertising. Most importantly, our customers are telling us that this strategy is working. General Mills is a great example. They recently ran a campaign for its Nature Valley brand in the UK. They were interested in pairing retail data and real-time optimizations to measure the impact on sales and return on ad spend. The …
Partnership with Spotify is driving TTD's fastest-growing channel (audio), indicating strong demand for Spotify's ad inventory.
TTD's own infrastructure cost base is rising as it builds out owned data centers, moving workloads off public cloud, hinting at reduced spending with hyperscalers for this segment. — This shift signals a potential loss of a large, high-margin cloud customer for Amazon, Microsoft, and Google, while TTD sees operating leverage improve in the long run.
And we are seeing most of the leading brands in those categories deepen their partnerships with us.
… each region during Q2. Among verticals that represent at least 1% of our business, we saw strong growth in medical health, automotive, and travel. We continue to see pressure in the food and drink and home and garden sectors as CPG brands navigate geopolitical uncertainty, consumer softness, and input cost inflation. Automotive remains an area of strength overall, though we believe this business could be growing faster absent the impact of increased tariffs on the industry. We also benefited from political spending related to the US midterm elections during Q2. Q2 operating expenses were $613 million, up 6% from a year ago. Excluding stock-based compensation, Q2 operating expenses were $504 million, up 12% from a year ago. The increase in Q2 was driven primarily by platform operations as we optimize platform infrastructure, implement more AI-powered tools on our platform, and continue to evolve our various decisioning and data offerings. Over the past two years, we've transitioned critical workloads from third-party public cloud environments to owned data centers. This has strengthened our platform infrastructure, reduced our reliance on external cloud providers, and provides us with greater flexibility to support AI and machine learning workloads. While this transition creates an increase in platform operations expense in 2026, it positions us to benefit from greater efficiency and operating leverage over time. Income tax expense was $49 million in the second quarter, driven primarily by our pre-tax profitability and the impact of stock-based awards. Net income for the quarter was $64 million, or 14 cents per diluted share, or about 9% of revenue. Adjusted net income for the quarter was $158 million, or 34 cents per diluted share. Net cash provided by operating activities was $154 million, and free cash flow was $136 million in Q2. We ended the quarter with a strong cash and liquidity position. Our balance sheet had about $1.5 billion in cash, cash equivalents, and short-term investments at the end of the quarter. In Q2, we used $78 million of cash to repurchase our Class A common stock via our share repurchase program. At the end of Q2, we had $269 million remaining on our program authorization. Turning to our outlook for the third quarter. For Q3, we expect revenue to be at least $650 million. We estimate adjusted EBITDA for Q3 to be approximately $160 …
Brand spend is shifting, with TTD noting a 'massive advantage' from GenTech and agencies paying attention to AI-powered white-label products, hinting at a new vector of competition or partnership for tech platforms.