Photo Credit: Getty Images
The Trade Desk endured its worst trading day on record Friday, with shares collapsing almost 40% after the ad-tech firm announced a leadership shake-up, issued cautious guidance, and faced renewed scrutiny over competition from Amazon.
Second-quarter results beat expectations modestly, with revenue up 19% year-over-year to $694 million and adjusted earnings per share of $0.41. While sales topped the $685 million estimate by a narrow margin, investors had hoped for a stronger signal of momentum heading into the second half. Revenue growth also slowed from the pace seen in the first quarter.
CEO Jeff Green confirmed that Chief Financial Officer Laura Schenkein will step down, with board member Alex Kayyal set to assume the role. The change comes as the company navigates what Green called a "more pressured and uncertain" environment for global brands, citing the impact of newly announced U.S. tariffs.
"Some of the world's largest brands are absolutely facing pressure and some amount of uncertainty," Green told analysts. "Some have to respond more than others to tariffs. Many are managing inflation worries and the related pricing that comes with that."
The macro commentary overshadowed the earnings beat and Q3 guidance for at least $717 million in revenue, which matched analyst forecasts but offered no upside catalyst. Several analysts responded with downgrades and lower price targets, pointing to decelerating growth and near-term demand risk.
Amazon's rapid expansion in digital advertising also weighed on sentiment. The e-commerce giant posted a 23% jump in ad revenue last quarter to $15.7 billion and has been extending its demand-side platform beyond its own marketplace. Wedbush analysts warned that The Trade Desk's value proposition "could erode over time," citing Amazon's recent ad integration with Disney as evidence of its aggressive push into premium inventory.
Green countered that Amazon's platform is "conflicted" because it will always prioritize its own properties, arguing that a "scaled independent DSP" remains essential for advertisers seeking unbiased reach. Despite being added to the S&P 500 in June, The Trade Desk's stock is now down 53% for the year, compared with a 9% gain for the index.
