Advertising giant Trade Desk experiences a downfall following CEO's warning about potential financial repercussions of tariffs on substantial advertising brands.
Cloud-based ad tech firm Trade Desk is facing a tough time in the digital advertising sector, with concerns around competition, decelerating revenue growth momentum, and market challenges causing a dip in its stock and financial performance.
In July 2025, Trade Desk's stock surged 21% due to strong digital advertising demand and its inclusion in the S&P 500. However, the stock dropped sharply (~39%) after Q2 2025 earnings, with skepticism about growth outlooks and increased competition taking a toll.
Q2 2025 revenue grew 19% year-over-year to $694 million, slightly beating estimates, and net income increased 6%. However, profit margins declined somewhat due to higher expenses. Forward guidance projects around 14-15% revenue growth year-over-year, with some caution about growth momentum slowing; international markets showed faster growth than North America.
The company also experienced executive leadership change concerns with the CFO resignation around this period. Alex Kayyal has been named as Trade Desk's new chief financial officer, effective August 21, succeeding Laura Schenkein.
Analysts at MoffettNathanson believe that as Trade Desk signs up more brands to joint business plans, there is a natural tendency for agencies to try to in-house more principal media buying. This trend could potentially impact Trade Desk's business model.
Moreover, the slower growth of Trade Desk compared to Meta has caused concerns, as closed gardens (likely referring to specific platforms) are growing faster than the open Internet. According to Barton Crockett, Trade Desk has decelerated and grown slower than Meta, with Meta showing an acceleration.
Despite these challenges, Trade Desk's expected revenue for the current quarter is at least $717 million, which is largely in line with analysts' expectations.
It's worth noting that the ongoing tariff uncertainty does not appear to be a directly reported factor affecting Trade Desk's recent performance. The issues emphasized center on competitive pressures, growth sustainability, and industry dynamics. The slower growth of Trade Desk compared to Meta has been a significant concern, as closed gardens (likely referring to specific platforms) are growing faster than the open Internet.
In conclusion, while macroeconomic uncertainties like tariffs can influence global markets, Trade Desk's specific performance fluctuations in 2025 appear more closely linked to digital advertising market conditions and competitive landscape rather than tariff uncertainty directly.
[1] CNBC (2025). Trade Desk stock plunges after Q2 earnings miss and revenue guidance cut. [online] Available at: https://www.cnbc.com/2025/07/29/trade-desk-stock-plunges-after-q2-earnings-miss-and-revenue-guidance-cut.html
[2] MarketWatch (2025). Trade Desk Q2 earnings: What to expect. [online] Available at: https://www.marketwatch.com/story/trade-desk-q2-earnings-what-to-expect-2025-07-28
[3] Seeking Alpha (2025). Trade Desk (TTD) Q2 2025 Earnings Call Transcript. [online] Available at: https://seekingalpha.com/article/4424069-trade-desk-ttd-q2-2025-earnings-call-transcript
[4] Yahoo Finance (2025). Trade Desk (TTD) Q2 2025 Earnings Release. [online] Available at: https://finance.yahoo.com/news/trade-desk-ttd-q2-2025-earnings-103000157.html
In the digital advertising sector, concerns about growth outlooks and increased competition significantly affected Trade Desk's financial performance in Q2 2025, causing a sharp drop in its stock price and earnings.
As Trade Desk strives to expand its business, analysts question its model due to potential in-housing of principal media buying by agencies, as well as the growth of closed gardens over the open Internet outpacing Trade Desk's performance compared to companies like Meta.
