The Trade Desk’s Revenue Shrank for the First Time in Years, but It Still Beat Its Own Forecast by $86 Million
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After the close on November 9, 2026, The Trade Desk (NASDAQ:TTD | TTD Price Prediction) reported third-quarter revenue of $736 million. That was down 0.5% from $739 million a year earlier. It is the company’s first year-over-year revenue decline since 2020, when pandemic-era revenue fell 13% to $139.4 million from $159.9 million.
Revenue grew 3.03% in the second quarter, but growth stopped quickly. Even so, the report beat management’s own forecast by $86 million because that forecast was set low.
Before the report, shares closed November 9 at $14.93, up 15.47% on 99.8 million shares. That was the best day since March 5, 2026. In thin evening trading, the stock was quoted at $15.29, up 2.41%, at 7:59 p.m. ET. That price is already above the $13.53 average analyst target.
How a Lowered Guide Turned a Decline Into an $86 Million Beat
On August 6, 2026, the company guided to at least $650 million in revenue. It also guided to about $160 million in adjusted EBITDA, which strips out interest, taxes, depreciation, and items such as stock pay.
Adjusted EBITDA came in at $266 million, a 36% margin. That was about $106 million above the guide. CEO Jeff Green said results were “well ahead of our expectations entering the quarter, but we are still operating below the level of growth we expect from ourselves.”
Revenue included $15 million from an unnamed strategic partner, and management does not expect it to repeat. Without it, revenue would have been about $721 million. That is still about $71 million above the floor, so the underlying beat holds up, although it is smaller than the headline number.
Bigger Discounts Signal Big Advertisers Hold the Leverage
Revenue fell because existing clients spent less, some data products were used less, and discounts tied to joint business plans got bigger. CFO Nate Olmstead cited pressure on large global advertisers and weakness in consumer packaged goods and auto.
The company keeps a fee on each ad dollar it handles, called its take rate. Green said that rate has stayed within “a point, point and a half” of its average over 10 years, but he is open to lowering it if that brings more growth. Bigger discounts mean the largest buyers have the bargaining power, and every concession comes straight out of revenue.
Layoffs Fund the Profit Case While $1 Billion Sits Idle
Net income fell to $38 million from $116 million. GAAP EPS dropped to $0.08 from $0.23, and non-GAAP EPS fell to $0.33 from $0.45.
Restructuring charges of $44 million reflected about a 15% cut to the workforce. Olmstead expects more than $100 million of gross savings in 2027, and customer retention stayed above 95%.
The company bought back no shares in the third quarter, even though it had $269 million authorized and the stock hit a five-year closing low of $11.92 on October 6, 2026. The board has now added $731 million, for $1 billion of total capacity against a market cap of about $6.42 billion. Management bought nothing at those prices despite that capacity.
Fourth-Quarter Guide Points to a Deeper Revenue Decline
Fourth-quarter guidance calls for at least $755 million in revenue and at least $280 million in adjusted EBITDA. Revenue was $846.79 million a year earlier, so if the floor holds, the decline deepens to about 10.8%. Political ads made up a mid-single-digit percentage of third-quarter business, and that spending fades in 2027.
The Trade Desk’s recovery case remains weak. The stock is down about 61% from $37.96 at the end of 2025 and about 89% below its $139.51 peak close on December 4, 2024, but a low price only matters if revenue grows again.
Keep an eye on the February 2027 report. Fourth-quarter revenue near the $755 million floor, with no plan to return to growth in 2027, would confirm this view. A clear beat, plus actual use of the buyback, would prove it wrong.
Contact [email protected] for any questions or corrections.
Omor Ibne Ehsan is a writer at 24/7 Wall St. He is a self-taught investor with a focus on growth, cyclical, and dividend equities that have strong fundamentals, value, and long-term potential. He also has an interest in high-risk, high-reward investments such as penny stocks.
