Shares of the Trade Desk (TTD) plunged nearly 40% shortly after the market open on Friday. The company reported a slowdown in growth and a change in its C-suite late Thursday.
Revenue for the ad tech company rose 19% over the prior year to $694 million. Earnings tallied $0.41 per share, up 4% from the prior year. Wall Street forecasts had expected the company to report revenue of $685.5 million and EPS of $0.41.
The company guided to a further slowdown in topline growth, however, forecasting current quarter revenue would reach “at least” $717 million, implying annual growth closer to 14%.
The Trade Desk also announced that its CFO, Laura Schenkein, would transition out of the role later this month, with board member Alex Kayyal set to take the post. Kayyal joined the company’s board in February.
“The company’s 3Q outlook implies a deceleration in underlying growth and makes it harder to dismiss recent concerns,” analysts at Bank of America wrote in a research note published Friday morning.
The firm downgraded the stock to Underperform and dropped its price target to $50 from $130. Shares were trading near $54 early Friday.
The Trade Desk’s stock is down nearly 40% across the past year after Friday morning’s drop, while the S&P 500 Advertising sub-index is down more than 35% over the same timeframe. The stock was added to the S&P 500 on July 18.
The Trade Desk said it leaned on product innovation and its growth in customer segments, including retail media and connected TV, in a press release announcing its earnings.
“The first half of 2025 has been defined by meaningful innovation across our platform,” co-founder and CEO Jeff Green said.
“Kokai is helping advertisers drive better results by integrating more data into every decision, using AI as a co-pilot, and unlocking the full potential of first-party data,” he said.
Bank of America noted that the company missed earnings for the first time at the end of last year, and supporters of the company attributed that to poor execution on its Kokai rollout, which could be reset.
Still, the firm pointed to competitive pressures and questioned “whether [the company] could sustain 20%+ long-term growth to support its premium valuation.”
“While we see several potential long-term growth drivers for TTD, in our view visibility into the timing and magnitude of these benefits is limited,” the firm wrote. “Streaming ad market adoption has been slower than some anticipated and competitive pressures (i.e. Amazon) could also be headwinds to TTD’s growth in the coming years.”
Jake Conley is a breaking news reporter covering US equities for Yahoo Finance. Follow him on X at @byjakeconley or email him at jake.conley@yahooinc.com.
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