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Trade Desk Q3 Earnings & Revenues Beat Estimates, Down Y/Y
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Key Takeaways
TTD's Q3 earnings beat estimates at 33 cents per share, while revenues dipped 0.5% to $736 million.
Political and medical health ad demand and strong audio growth boosted TTD's performance.
TTD forecasts Q4 revenues of at least $755 million and EBITDA of $280 million amid efforts to control costs.
The Trade Desk, Inc. (TTD - Free Report) reported third-quarter 2026 adjusted earnings of 33 cents per share, down 26.7% year over year but above the Zacks Consensus Estimate of 26 cents. Revenues declined 0.5% year over year to $736 million but beat the consensus estimate of $651 million by 13.1%.
The better-than-expected performance was driven by strength in medical health advertising, political spending related to the U.S. midterm elections and a nonrecurring contribution from a strategic partner. Audio remained the fastest-growing advertising channel.
Video, including connected TV (“CTV”), accounted for a low-50s percentage share of the company's business in the third quarter. Mobile represented a high-20% share, while display contributed a low double-digit percentage.
Trade Desk added that Audio accounted for approximately 7% of the business and recorded significantly stronger year-over-year growth than any other channel. The company continued investing in CTV, artificial intelligence (AI) and measurement capabilities to improve advertiser outcomes.
Trade Desk Sees Strength Across Key Verticals
Medical health, personal finance, travel and political advertising were the strongest-performing verticals during the quarter. Political advertising benefited from spending surrounding the U.S. midterm elections.
Revenues included a nonrecurring benefit of approximately three percentage points from business with a strategic partner. Management indicated that underlying performance exceeded its expectations even after excluding this contribution.
International markets continued to demonstrate momentum. APAC revenues grew approximately 30% year over year during the first nine months of 2026, supported by 45% growth in China during the third quarter. EMEA revenues increased more than 20% in the first nine months.
TTD's Profitability Faces Cost Pressures
Adjusted EBITDA declined 16.1% year over year to $266 million, while adjusted EBITDA margin contracted to 36% from approximately 43% in the year-ago quarter.
Operating expenses increased 11.3% year over year to $643.4 million. The figure included approximately $44 million in restructuring charges, primarily related to severance and employee benefits associated with workforce reductions.
Platform operations expenses increased 23.4% year over year to $200.2 million, reflecting infrastructure investments as well as optimizing the mix between owned data center capacity and third-party hosting. Certain costs previously recognized as revenue reductions are now being recognized as a cost within platform operations expense, added Trade Desk. Sales and marketing expenses rose 8.9% to $170.8 million, while technology and development expenses increased 15.1% to $147.3 million. General and administrative expenses declined 4.7% to $125.1 million.
The company reduced its global workforce by approximately 15% during the quarter. Management expects these actions to generate more than $100 million in gross savings during 2027.
TTD Advances AI and Customer Engagement
The number of joint business plans (JBPs) increased more than 30% year over year through the third quarter, including growth exceeding 20% during the quarter. Customers operating under JBPs continued growing meaningfully faster than those under traditional MSA agreements.
The company also launched Zuma, an upgrade to its Kokai platform, to simplify advertiser workflows. Early results showed a 15% reduction in median active time required for ad group creation. An upgraded Koa model delivered a median 21% improvement in cost per acquisition across 62 tested campaigns.
Audience Unlimited gained traction, with more than 100 advertisers testing the product and several hundred campaigns running.
Trade Desk Maintains Strong Liquidity
As of Sept. 30, 2026, cash and cash equivalents totaled $1.23 billion, compared with $658.2 million as of Dec. 31, 2025. Cash, cash equivalents and short-term investments collectively totaled approximately $1.65 billion.
Operating cash flow reached $258 million during the third quarter, while free cash flow totaled $153 million. TTD did not repurchase shares during the quarter.
The company had approximately $269 million remaining under its existing repurchase authorization at quarter-end. Its board subsequently approved an additional $731 million, bringing the total authorization available for future repurchases to $1 billion.
TTD's Q4 Outlook Reflects Improvement
For the fourth quarter of 2026, Trade Desk expects revenues of at least $755 million and adjusted EBITDA of at least $280 million.
Management expects meaningful moderation in expense growth during 2027, supported by organizational changes aimed at improving operating efficiency and operating leverage.
Shares have lost 30.6% in the past six months. Yesterday, TTD’s shares gained 15.5% and closed the session at $14.93. Post-earnings announcement, shares were up 3.6% in the after-market session.
Taking a Look at Performance of Companies in the Ad Tech Space
Magnite (MGNI - Free Report) reported third-quarter 2026 adjusted earnings of 33 cents per share, beating the Zacks Consensus Estimate of 26 cents and up 65% year over year. Revenues for MGNI increased 14% year over year to $204.2 million, while contribution ex-traffic acquisition costs (“TAC”) rose 20% to $201 million. Growth was driven by a 39% surge in CTV contribution ex-TAC, strong political advertising demand and expanding publisher partnerships. Shares of Magnite have gained 117.2% in the past six months.
Amazon (AMZN - Free Report) reported third-quarter 2026 net income of $1.89 per share, down 3% from $1.95 per share in the third quarter of 2025. Net sales of $201.9 billion rose 12% year over year but missed the consensus mark by 0.08%. Excluding a $0.9 billion unfavorable foreign exchange impact, net sales grew 13%.
Advertising services revenues increased 11% year over year (12% excluding FX) to $19.6 billion. Management said the Prime Day shift created an 850-basis-point sequential impact on third-quarter advertising growth. It also cited the absence of NBA games in the quarter and the lapping of a search engine marketing change made in the third quarter of 2025. Shares of Amazon have down 0.8% in the past six months.
Alphabet (GOOGL - Free Report) reported third-quarter 2026 earnings of $2.12 per share, missing the Zacks Consensus Estimate by 27.89% and declining 26% year over year. The decline primarily reflected unrealized losses on equity securities, including the company’s investment in SpaceX.
Consolidated revenues increased 25% year over year to $127.58 billion. Net revenues, excluding TAC, increased 27.1% year over year to $111.21 billion, missing the Zacks Consensus Estimate by 0.53%. Google Search & other revenues advanced 12% to $63.35 billion, driven primarily by retail and finance advertisers. YouTube advertising revenues increased 9% to $11.21 billion, supported by brand advertising and connected-TV demand. Google Network revenues grew 1% to $7.46 billion. Alphabet has lost 25.8% in the past six months.
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Trade Desk Q3 Earnings & Revenues Beat Estimates, Down Y/Y
Key Takeaways
The Trade Desk, Inc. (TTD - Free Report) reported third-quarter 2026 adjusted earnings of 33 cents per share, down 26.7% year over year but above the Zacks Consensus Estimate of 26 cents. Revenues declined 0.5% year over year to $736 million but beat the consensus estimate of $651 million by 13.1%.
The better-than-expected performance was driven by strength in medical health advertising, political spending related to the U.S. midterm elections and a nonrecurring contribution from a strategic partner. Audio remained the fastest-growing advertising channel.
The Trade Desk Price, Consensus and EPS Surprise
The Trade Desk price-consensus-eps-surprise-chart | The Trade Desk Quote
TTD's Channel Mix Remains Video-Led
Video, including connected TV (“CTV”), accounted for a low-50s percentage share of the company's business in the third quarter. Mobile represented a high-20% share, while display contributed a low double-digit percentage.
Trade Desk added that Audio accounted for approximately 7% of the business and recorded significantly stronger year-over-year growth than any other channel. The company continued investing in CTV, artificial intelligence (AI) and measurement capabilities to improve advertiser outcomes.
Trade Desk Sees Strength Across Key Verticals
Medical health, personal finance, travel and political advertising were the strongest-performing verticals during the quarter. Political advertising benefited from spending surrounding the U.S. midterm elections.
Revenues included a nonrecurring benefit of approximately three percentage points from business with a strategic partner. Management indicated that underlying performance exceeded its expectations even after excluding this contribution.
International markets continued to demonstrate momentum. APAC revenues grew approximately 30% year over year during the first nine months of 2026, supported by 45% growth in China during the third quarter. EMEA revenues increased more than 20% in the first nine months.
TTD's Profitability Faces Cost Pressures
Adjusted EBITDA declined 16.1% year over year to $266 million, while adjusted EBITDA margin contracted to 36% from approximately 43% in the year-ago quarter.
Operating expenses increased 11.3% year over year to $643.4 million. The figure included approximately $44 million in restructuring charges, primarily related to severance and employee benefits associated with workforce reductions.
Platform operations expenses increased 23.4% year over year to $200.2 million, reflecting infrastructure investments as well as optimizing the mix between owned data center capacity and third-party hosting. Certain costs previously recognized as revenue reductions are now being recognized as a cost within platform operations expense, added Trade Desk. Sales and marketing expenses rose 8.9% to $170.8 million, while technology and development expenses increased 15.1% to $147.3 million. General and administrative expenses declined 4.7% to $125.1 million.
The company reduced its global workforce by approximately 15% during the quarter. Management expects these actions to generate more than $100 million in gross savings during 2027.
TTD Advances AI and Customer Engagement
The number of joint business plans (JBPs) increased more than 30% year over year through the third quarter, including growth exceeding 20% during the quarter. Customers operating under JBPs continued growing meaningfully faster than those under traditional MSA agreements.
The company also launched Zuma, an upgrade to its Kokai platform, to simplify advertiser workflows. Early results showed a 15% reduction in median active time required for ad group creation. An upgraded Koa model delivered a median 21% improvement in cost per acquisition across 62 tested campaigns.
Audience Unlimited gained traction, with more than 100 advertisers testing the product and several hundred campaigns running.
Trade Desk Maintains Strong Liquidity
As of Sept. 30, 2026, cash and cash equivalents totaled $1.23 billion, compared with $658.2 million as of Dec. 31, 2025. Cash, cash equivalents and short-term investments collectively totaled approximately $1.65 billion.
Operating cash flow reached $258 million during the third quarter, while free cash flow totaled $153 million. TTD did not repurchase shares during the quarter.
The company had approximately $269 million remaining under its existing repurchase authorization at quarter-end. Its board subsequently approved an additional $731 million, bringing the total authorization available for future repurchases to $1 billion.
TTD's Q4 Outlook Reflects Improvement
For the fourth quarter of 2026, Trade Desk expects revenues of at least $755 million and adjusted EBITDA of at least $280 million.
Management expects meaningful moderation in expense growth during 2027, supported by organizational changes aimed at improving operating efficiency and operating leverage.
Zacks Rank and Share Price
TTD currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Image Source: Zacks Investment Research
Shares have lost 30.6% in the past six months. Yesterday, TTD’s shares gained 15.5% and closed the session at $14.93. Post-earnings announcement, shares were up 3.6% in the after-market session.
Taking a Look at Performance of Companies in the Ad Tech Space
Magnite (MGNI - Free Report) reported third-quarter 2026 adjusted earnings of 33 cents per share, beating the Zacks Consensus Estimate of 26 cents and up 65% year over year. Revenues for MGNI increased 14% year over year to $204.2 million, while contribution ex-traffic acquisition costs (“TAC”) rose 20% to $201 million. Growth was driven by a 39% surge in CTV contribution ex-TAC, strong political advertising demand and expanding publisher partnerships. Shares of Magnite have gained 117.2% in the past six months.
Amazon (AMZN - Free Report) reported third-quarter 2026 net income of $1.89 per share, down 3% from $1.95 per share in the third quarter of 2025. Net sales of $201.9 billion rose 12% year over year but missed the consensus mark by 0.08%. Excluding a $0.9 billion unfavorable foreign exchange impact, net sales grew 13%.
Advertising services revenues increased 11% year over year (12% excluding FX) to $19.6 billion. Management said the Prime Day shift created an 850-basis-point sequential impact on third-quarter advertising growth. It also cited the absence of NBA games in the quarter and the lapping of a search engine marketing change made in the third quarter of 2025. Shares of Amazon have down 0.8% in the past six months.
Alphabet (GOOGL - Free Report) reported third-quarter 2026 earnings of $2.12 per share, missing the Zacks Consensus Estimate by 27.89% and declining 26% year over year. The decline primarily reflected unrealized losses on equity securities, including the company’s investment in SpaceX.
Consolidated revenues increased 25% year over year to $127.58 billion. Net revenues, excluding TAC, increased 27.1% year over year to $111.21 billion, missing the Zacks Consensus Estimate by 0.53%. Google Search & other revenues advanced 12% to $63.35 billion, driven primarily by retail and finance advertisers. YouTube advertising revenues increased 9% to $11.21 billion, supported by brand advertising and connected-TV demand. Google Network revenues grew 1% to $7.46 billion. Alphabet has lost 25.8% in the past six months.