Trade Desk Shares Sink After Weak Q2 Results and Outlook

Key Moments

The Trade Desk stock dropped more than 27% in premarket trading after releasing second-quarter results and third-quarter guidance that missed Wall Street forecasts.
Q2 revenue came in at $715.1 million, below both consensus expectations of roughly $752-753 million and the company’s prior guidance of at least $750 million, while adjusted EBITDA of $241.3 million missed estimates of around $265 million.
Third-quarter guidance for revenue of “at least $650 million” and adjusted EBITDA of approximately $160 million fell sharply short of Street estimates of roughly $807 million and $339 million, respectively, prompting multiple downgrades and price target cuts.

Shares Tumble After Q2 Miss and Weak Q3 Outlook

The Trade Desk (NASDAQ:TTD) saw its shares plunge more than 27% in premarket trading on Friday after the digital advertising platform reported second-quarter results and a third-quarter outlook that significantly undercut analyst expectations.

Second-quarter revenue totaled $715.1 million, representing a 3% increase year-over-year, but falling short of consensus estimates of roughly $752-753 million. The figure also missed management’s prior guidance calling for at least $750 million in revenue.

Adjusted EBITDA for the quarter was $241.3 million, below analyst expectations of around $265 million.

Third-Quarter Guidance Signals Double-Digit Revenue Decline

For the third quarter, The Trade Desk guided to revenue of “at least $650 million,” which implies a 12% year-over-year decline. The company also projected adjusted EBITDA of approximately $160 million. Both figures were substantially lower than Street estimates, which stood at roughly $807 million for revenue and $339 million for adjusted EBITDA.

Metric	Reported/Guided	Expectation / Prior Guidance	Commentary
Q2 2024 Revenue	$715.1 million	~$752-753 million; at least $750 million (company guidance)	Missed both consensus and internal guidance
Q2 2024 Adjusted EBITDA	$241.3 million	~$265 million	Below analyst expectations
Q3 2024 Revenue Guidance	At least $650 million	~$807 million	Implies 12% year-over-year decline
Q3 2024 Adjusted EBITDA Guidance	Approximately $160 million	~$339 million	Substantially below Street forecasts

Raymond James: From Market Perform to Underperform

In response to the results and guidance, Raymond James lowered its rating on The Trade Desk to Underperform from Market Perform. The firm pointed to “a below-expectations 2Q and a sharply negative 3Q outlook, as macro conditions and buyers showing preferences for lower-cost media combined to drive down spend to the TTD platform.”

Raymond James analysts emphasized that the company’s third-quarter guidance marks “its first-ever non-pandemic y/y decline in revenue” and added that they have “a hard time justifying” the stock’s implied valuation premium relative to other adtech names given the expectation of ongoing declines.

Baird Cuts Rating and Slashes Price Target

Baird also moved to a more cautious stance, downgrading The Trade Desk to Neutral from Outperform. Analysts at the firm did not mince words, writing that “the 2Q print was just awful, plainly said.” They noted that while they had previously believed the valuation had reset adequately, “clearly there is even more uncertainty here.”

Baird cut its price target on the stock to $9 from $27.

Truist Highlights Macro Pressure and Execution Risks

Truist Securities downgraded The Trade Desk to Hold from Buy and lowered its price target to $16 from $35. The firm cited a combination of macroeconomic headwinds and internal execution challenges.

The brokerage called out weakness tied to consumer packaged goods and automotive clients, specifically referencing Procter & Gamble. It also pointed to “heightened management turnover” following the announcement of a new CFO, COO, CMO, CCO, and CBDO.

Truist added that it believes “4Q growth will be diminished by the same issues, keeping growth negative through mid 2027.”

Guggenheim Sees Structural Deceleration

Guggenheim joined the raft of cautious voices, shifting its rating to Neutral from Buy and cutting its price target to $12 from $25. The firm said it has “swung from an ~10pp premium in 3Q24 to a ~15pp discount in 2Q26 in quarterly ad growth rate vs. peers, arguing the deceleration is structural rather than cyclical.”

Guggenheim also pointed to “continued leadership turnover, agency conflict and product inconsistency” as areas of concern. The note added that CEO Jeff Green’s commentary on the company’s path to recovery “feels even further detached from the results.”