Shares of The Trade Desk (NASDAQ:TTD) plunged more than 14% in premarket trading on Friday after the advertising technology company reported quarterly earnings below Wall Street expectations and issued weaker-than-anticipated guidance for the current quarter.
For the first quarter, The Trade Desk posted adjusted earnings per share of $0.28, missing analyst forecasts of $0.32 per share. Revenue came in at $689 million, slightly above the consensus estimate of $679.5 million and up 12% from the $616 million reported during the same period last year.
Investor sentiment was hit harder by the company’s outlook for the second quarter. The Trade Desk projected revenue of at least $750 million, falling short of analyst expectations of $772.4 million.
The company also forecast adjusted EBITDA of roughly $260 million for the second quarter.
Wall Street analysts cut ratings following results
The weaker guidance prompted multiple analyst downgrades across Wall Street.
“We were cautious on TTD into earnings, but 2Q guidance was below our expectations. Our sense is the combination of Middle East turmoil, ad agency tensions, and changes to industry structure are pressuring growth,” KeyBanc analysts said while downgrading the stock to Sector Weight.
“While the first two factors could eventually reach a resolution, we do not see the competitive factor changing any time soon,” they added.
Oppenheimer also downgraded The Trade Desk to Perform from Outperform, citing expectations for only single-digit revenue growth in the second quarter.
“Now trading at 6.4x ’26 EBITDA vs. adtech 7.9x, we see no catalyst until revenue accelerates,” the firm wrote.
Profitability weakens despite revenue growth
Adjusted EBITDA for the first quarter totaled $206 million, slightly below the $208 million reported a year earlier. EBITDA margin narrowed to 30% from 34% in the same quarter of 2025.
“Q1 was another strong quarter for The Trade Desk, with revenue growing to $689 million, representing 12% year-over-year growth,” said Jeff Green, CEO and Co-Founder.
“We’re encouraged by the impact of the strategic upgrades we’ve been making across the company, which contributed to our outperformance in Q1. Despite headwinds in the macro environment, we remain confident in our ability to lead and innovate within the programmatic ecosystem.”
The company said customer retention remained above 95% during the quarter, continuing a trend maintained over the past decade.
During the period, The Trade Desk spent approximately $164 million repurchasing Class A common shares. As of March 31, 2026, the company still had $327 million authorized for additional buybacks.
Net income declines from prior year
GAAP net income for the quarter came in at $40 million, or $0.08 per diluted share, compared with $51 million, or $0.10 per diluted share, during the first quarter of 2025.