Trade Desk Tumbles 26% as CTV Ad Growth Cools and Expenses Rise

Trade Desk’s Ad Tech Momentum Stalls as CTV Growth Slows

In a sharp break from its usual high-flying performance, The Trade Desk reported a notable deceleration in Q2 revenue growth, triggering a brutal 26% drop in its stock price during after-hours trading Thursday. The culprit? Weaker-than-expected demand for digital advertising in connected TV (CTV)—one of the company’s most promising verticals.

Revenue for the quarter rose 19% to $464 million, a slowdown from 26% growth a year earlier and 25% in Q1. While still in positive territory, the figure rattled investors accustomed to The Trade Desk’s above-market pace, especially as competitors like Meta and TikTok continue to lure ad dollars amid economic uncertainty.

CEO Jeff Green addressed the downturn candidly during the company’s earnings call: “Starting right at the beginning of April, some of the biggest brands—particularly in auto and consumer packaged goods—began to experience even greater volatility.” He added that conditions have since “stabilized,” though the damage to sentiment was already done.

Meanwhile, operating expenses jumped nearly 18%, compounding concerns that the company is investing aggressively just as revenue growth tapers.

Forecast Falls Flat

Investor disappointment deepened with The Trade Desk’s third-quarter revenue forecast of $717 million—roughly in line with expectations but uninspiring in the current climate. “Investors promptly hit the ‘skip-ad’ button,” quipped Michael Ashley Schulman of Running Point Capital Advisors, who called the post-earnings drop the company’s worst day since a February earnings miss.

That February stumble marked The Trade Desk’s first top-line miss in five years. Since then, the stock has shed nearly 30% through Thursday’s close.

The DSP Squeeze

As a demand-side platform (DSP), The Trade Desk occupies a unique spot in the ad-tech ecosystem—it doesn’t own ad inventory but enables advertisers to manage campaigns across exchanges and publishers. That model, while nimble, also means The Trade Desk is especially sensitive to shifts in brand spending.

With advertisers favoring the scale and reach of walled gardens like Meta, TikTok, and Google, independent platforms are under increasing pressure. The current macro environment isn’t helping.

Still, there may be a silver lining for some of Trade Desk’s peers. Schulman suggests that companies like Roku, PubMatic, and Magnite could benefit from the temporary dislocation, “pitching themselves as smoother tracks for incremental budgets.”

Leadership Shuffle

In a final note from the earnings update, Trade Desk announced the appointment of Alex Kayyal as Chief Financial Officer, effective August 21. He replaces Laura Schenkein. Kayyal’s background in venture investing at Salesforce Ventures may indicate a forward-looking financial strategy—but he’ll be stepping in at a moment when investor confidence is on shaky ground.

AdTech at a Crossroads

The Trade Desk’s stumble underscores a broader theme playing out in the ad-tech sector: as digital advertising matures, CTV plateaus, and economic headwinds persist, even the most innovative platforms must prove their resilience. Whether this quarter’s dip marks a turning point or a temporary misfire remains to be seen—but for now, the market has delivered its verdict.