Trade Desk (TTD) stock plunged about 29% in Friday’s pre-market trading session after the ad-tech company’s Q2 revenue exceeded expectations but reflected a slowdown in the company’s growth rate. Moreover, Trade Desk announced the appointment of Alex Kayyal as the new chief financial officer (CFO) of the company, effective August 21, succeeding Laura Schenkein.
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Schenkein will step down as TTD’s CFO after more than a decade in a series of finance leadership positions with the company. She will remain with the company as a non-executive officer through the end of the year and will work closely with Kayyal to ensure a smooth transition.
Trade Desk Stock Declined Despite Q2 Revenue Beating Expectations
Trade Desk reported a 19% growth in its second-quarter revenue to $694 million, ahead of Wall Street’s estimate of $686 million. However, this marked a slowdown from the 25% growth seen in the first quarter and the 26% growth in the second quarter of the prior year.
Meanwhile, the company’s adjusted earnings per share (EPS) increased 5% year-over-year to $0.41, in line with the analysts’ consensus estimate.
CEO Jeff Green stated during the earnings call that right at the beginning of April, some of the biggest brands, mainly in sectors like auto and consumer packaged goods, which are meaningful categories for the company, began to experience “even greater volatility.” That said, Green mentioned that things have stabilized since then.
Trade Desk’s Lackluster Guidance
Despite solid customer retention and optimism about the AI-powered Kokai platform, Trade Desk’s Q3 guidance did not offer a huge upside. The company expects to deliver revenue of at least $717 million and adjusted EBITDA of approximately $277 million in Q3 2025. Analysts were expecting revenue of $716 million.
Demand-side platform providers like Trade Desk are under pressure as advertisers are tightening their marketing budgets amid macro uncertainty. Advertisers are preferring larger platforms such as TikTok and Meta Platforms’ (META) Facebook and Instagram.
Is TTD Stock a Good Buy?
Wall Street has a Strong Buy consensus rating on Trade Desk stock based on 24 Buys and four Holds. The average TTD stock price target of $94.58 indicates 7.1% upside potential. It is worth noting that analysts are expected to revise their price targets/ratings in reaction to the Q2 results.
