The Trade Desk has reported its Q2 numbers and its revenue grew 3 per cent year-on-year to US$715 million (A$1.01 billion), missing forecasts.
The DSP had forecast revenue of A$1.065 billion. Its guidance for Q3 is revenue of A$919.75 million, implying a roughly 12 per cent year-on-year decline and its first post-pandemic dip.
“Our revenue growth is below our expectations and below the standard we hold ourselves to,” said co-founder and CEO Jeff Green on an earnings call with investors.
“These numbers are not a reflection of our company or the long-term opportunity in front of us. We underperformed our own expectation.”
Green pointed to two causes: macro pressure on some of the platform’s biggest client categories and weaker internal execution.
“First, the macro conditions have made it more difficult for some of the world’s largest brands to grow. Secondly, we didn’t execute as well as we could have,” Green added.
CPG and automotive brands, which together make up around 25 per cent of The Trade Desk’s business, are pulling back spend it said. Green pointed to tariff pressure, rising input costs and a widening gap between high and low-income consumers reshaping how those categories spend.
Green also flagged that some advertisers are shifting away from The Trade Desk’s biddable, data-driven buying model toward cheaper, lower-decisioning formats including programmatic guaranteed and fixed-price deals.
Not every part of the business is under pressure. Joint Business Plans, the company’s long-term strategic agreements with major clients, grew 38 per cent year-on-year to 217 clients, with revenue under those plans growing six times faster than the rest of the business. International growth was another standout, with EMEA and APAC both up around 30 per cent year to date, and China more than doubling.
Green also used the call to push back on the idea that AI threatens the demand-side platform model and argued instead that AI is central to what a DSP actually does.
“You have to get the biggest brands in the world to trust you with their data and then reassure them that you are going to preserve their data so that their insights from buying are put to use for them and exclusively for them. Most of the biggest platforms in the world are not doing that,” said Green.
The company also pointed to a number of upcoming product releases that will likely roll out across coming months. This included a usability upgrade to its Kokai platform, an expanded data product called Audience Unlimited and a new cross-channel measurement framework still in alpha.
Despite the near-term pressure, the company said it remains focused on turning those product upgrades into durable growth, with new leadership now tasked with translating the roadmap into results.
Nate Olmstead, who joined The Trade Desk as CFO just last month, said the guidance reflected the current environment rather than any dramatic swing in outlook.
“Visibility is somewhat more limited than it has been in recent history, given that we’re not assuming any meaningful improvement in the environment during the quarter. We don’t think that guidance should really be considered conservative or aggressive, the goal is to be credible and grounded in the data.”
