Trade Desk Blames Weak Consumer Spending, Tariffs And Oil Prices For Slowing Growth

The Trade Desk Inc. (NASDAQ: TTD ) stock fell sharply in Friday's premarket session after the advertising technology company reported second-quarter results that missed Wall Street expectations and issued weaker-than-expected third-quarter revenue guidance.

Earnings Snapshot The Trade Desk reported adjusted earnings of 34 cents per share, missing the analyst consensus estimate of 40 cents, according to Pro data.

Revenue totaled $715.1 million, below the Street estimate of $751.4 million.

Adjusted EBITDA declined to $241 million from $271 million a year earlier, while the adjusted EBITDA margin narrowed to 34% from 39%.

CEO Jeff Green attributed the company's slower-than-expected growth to a combination of external headwinds and internal execution issues.

He said macroeconomic pressures—including tariffs, higher oil prices and weaker spending among lower-income consumers—have weighed on key advertising categories such as consumer packaged goods and automotive.

Green also acknowledged that the company "didn't execute as well as we could have," saying both factors contributed to the disappointing quarter.

The company ended the quarter with 217 joint business plans (JBPs) with clients, up 38% from a year earlier.

Revenue tied to those partnerships grew at six times the pace of overall company revenue.

The Trade Desk finished the quarter with approximately $1.5 billion in cash, cash equivalents and short-term investments.

During the quarter, the company repurchased $78 million of its common stock.

It had $269 million remaining under its share repurchase authorization.

Business Performance Consumer packaged goods and automotive, which together account for about 25% of The Trade Desk's business, faced pressure from tariffs, oil prices and broader macroeconomic uncertainty.

Management said higher-income consumers remained resilient, while lower-income consumers pulled back on spending, prompting brands to adjust their advertising strategies.

Despite those headwinds, financial services, technology and pharmaceutical customers continued to perform well, with several expanding their relationships with the company.

The Trade Desk said most of its top 100 advertisers posted double-digit year-over-year growth.

Spending from advertisers outside its top 500 accounts grew more than 50% year over year on a year-to-date basis.

International markets also remained strong.

Revenue in Europe, the Middle East and Africa, as well as the Asia-Pacific region, increased nearly 30% year to date.

Revenue in China more than doubled.

Connected TV grew more than 50% year over year in both EMEA and APAC.

Medical, healthcare, automotive and travel were among the strongest-performing verticals, while food and beverage and home and garden remained under pressure.

The company also introduced a new measurement framework, currently in alpha testing, designed to improve advertising attribution beyond traditional last-click and last-view models.

Outlook The Trade Desk expects third-quarter revenue of at least $650 million, well below the analyst consensus estimate of $805.1 million.

It also forecast adjusted EBITDA of about $160 million.

Management said the global advertising market is approaching $1 trillion annually.

The company estimates it currently holds about a 1% share of that market, leaving significant room for long-term expansion.

TTD Price Action: Trade Desk shares were down 28.58% at $12.62 during premarket trading on Friday.

The stock is trading at a new 52-week low, according to Pro data.

Photo via Shutterstock Read Also: Stock Market Today: Dow Jones Futures Slip, S&P 500 Gains Ahead of July Jobs Report—Atlassian, Trade Desk, Cloudflare in Focus