The Trade Desk's stock has sunk 85% from its December 2024 high as investors lost faith in its growth trajectory. The ad tech firm reported first-quarter revenue of $689 million, a 12% year-over-year increase that just cleared analyst estimates. Yet it missed earnings expectations and issued weaker guidance, signaling trouble ahead.
Q1 Revenue Beat, Earnings Miss
The company posted $689 million in first-quarter 2026 revenue, topping the $679.5 million forecast. That 12% growth was a sharp drop from the 25% year-over-year increase seen in Q1 2025. Adjusted earnings per share came in at $0.28, falling short of the $0.32 estimate. EBITDA held steady at $206 million, maintaining a 30% margin. Customer retention stayed strong at over 95% during the quarter.
Slower Growth Outlook
Management guided for at least $750 million in second-quarter revenue, a figure below the $772.4 million market expectation. That target suggests growth will slow to about 8% year over year. The deceleration has investors worried after seeing growth nearly halve from the previous year. The company didn't explain the lower guidance in its release.
Amazon's Expanding Threat
Amazon's move into connected TV advertising is putting direct pressure on The Trade Desk. By using Prime Video viewership and retail purchase data, the tech giant is building a powerful ad offering. This new competition targets the same connected TV space where The Trade Desk has operated. The firm hasn't detailed how it plans to counter Amazon's growing presence.
Investor Confidence Crumbles
The stock has fallen 40% so far this year and 85% since its December 2024 peak. That massive drop reflects how thoroughly investors have written off past growth expectations. The market reaction was swift after the earnings miss and weak outlook. Many traders moved to cut positions immediately following the report.
The next quarterly results, covering the second quarter of 2026, will show whether the company can reverse this slide against intensifying competition.
