Release Date: August 06, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Revenue under joint business plans (JBPs) grew at a rate 6 times higher than overall revenue, with 217 JBPs signed in Q2, up 38% year over year.
- The majority of the top 100 accounts are growing double digits year over year, and smaller advertisers outside the top 500 are growing over 50% year to date.
- EMEA and APAC regions each grew almost 30% year to date, with China growing over 100% and CTV growing over 50% in both regions.
- The new measurement framework, Audience Unlimited, and the Zuma platform upgrade are expected to enhance decisioning and drive long-term growth, with early results showing over 25% improvements in efficiency.
- The company maintains a strong balance sheet with $1.5 billion in cash and continues to generate positive free cash flow, enabling strategic investments and share repurchases.
Negative Points
- Revenue growth in Q2 was below expectations at only 3% year over year, and Q3 guidance implies a significant sequential decline to at least $650 million.
- Macroeconomic pressures, including tariffs and oil prices, are negatively impacting key verticals like CPG and autos, which represent about 25% of the business.
- Some advertisers are shifting to cheaper, low-decisioning methods like programmatic guaranteed, which undermines the value proposition of the platform.
- Operating expenses increased 12% year over year (excluding stock-based compensation), driven by platform operations and cloud transition costs, pressuring margins.
- The company acknowledged execution issues and is in a transition period with new leadership, which may take time to yield results and stabilize growth.
Q & A Highlights
Q: Jeff, you described well the factors that you're seeing with pressure on the business from macro pricing pressure, your own execution. If we shift to thinking about the remainder of this year, what are the top two or three priorities that you guys have to stabilize the business?
A: Jeff Green (CEO): We acknowledge our performance and guide are below expectations, but this doesn't reflect our long-term potential. While some pockets are under pressure, most of the business is growing. Our top priorities are: First, upgrading our platform with the launch of 'Zuma' later this month to improve usability and leverage AI. Second, innovating in key products like our new measurement framework and ramping up 'Audience Unlimited,' which have shown remarkable early results. Third, we are doubling down on Joint Business Plans (JBPs), which grew 38% year-over-year to 217 clients and are growing at a rate 6 times higher than overall revenue. We are also integrating new industry leaders into our team to accelerate growth.
Q: Jeff, I wanted to get your thoughts on something maybe a little more high-level kind of an existential question I think is top of mind for a lot of investors right now in the age AI. So I mean, as AI is kind of reshaping the digital advertising landscape, can you just give us some insight on kind of what gives you confidence in the DSP business model as we know it remaining relevant over the next several years? Or what needs to happen to stay relevant?
A: Jeff Green (CEO): AI is not a disruption to the DSP model; it is the very essence of it. A DSP is a platform built to decide which impressions to buy, and that decisioning is enhanced by AI. With supply outpacing demand, it's the ultimate buyer's market, and AI is perfect for comparing millions of ad opportunities. The key is objectivity and trust. The biggest brands need a platform that protects their data and represents their interests, which is something the walled gardens cannot offer as they prioritize their own inventory. We see agentic AI as a massive opportunity, and we are already seeing advantages, while some competitors are using it to build yesterday's ad networks, which won't work.
Q: Given the outlook for Q3, which I think also means that weakness will persist into Q4, at least as well, how should we now think about your long-term profitability framework, how you approach that side of the business given the revenue trajectory? And what's your philosophy in terms of investment internally?
A: Nate Olmstead (CFO): We have a very long-term focus and continue to see great opportunity to drive long-term growth and profitability. Our investment philosophy is to invest with conviction in areas where we see attractive returns, but we will be equally disciplined everywhere else. We will apply a lot of rigor to how we evaluate investments and allocate resources. If we do that well, we believe we can drive stronger long-term growth and profitability, and we will keep you updated on our long-term profitability framework.
Q: Jeff, I know you don't disclose take rate, but I'm curious how your pricing philosophy is changing in response to brand advertiser needs in the environment. As we look at stabilizing the business, how are you thinking about the right level of pricing and take rate from here?
A: Jeff Green (CEO): Our mantra has always been to be the best platform, not the cheapest. Our take rate has gone up and down over the years but has stayed within a few points of the middle line because we ensure our product earns its keep. We are extremely confident in our business model and pricing philosophy. The biggest opportunity is to simplify the way we price, but the net number doesn't have to change dramatically because we are adding more value than we cost. We will always look at opportunities to grow and win more business, but we won't make the price too volatile.
Q: Jeff, there seems to be somewhat of a disconnect between the opportunity as you presented, I mean, in terms of growth across the various modalities and at least the short-term guide, which I think implies about 12% decline year on year for Q3. And I'm assuming that will probably sustain itself into Q4. Is there a way to kind of parse out the impact of what you control versus what you can not? And just very quickly, maybe just provide us an update on the status of your relationship with some of the big agencies, maybe the publicis in particular?
A: Jeff Green (CEO): We can control the products we ship, the team, and how we execute and allocate resources. On the macro side, there are areas with secular tailwinds, but some brands targeting lower-income consumers are under pressure. This is a cyclical issue with a handful of customers, not a systemic problem. Regarding agencies, they have been phenomenal partners, including Publicis. We have moved past public disputes, and many of our brand JBPs are developed in collaboration with their agencies. We are also working on white-label products of Audience Unlimited and agentic AI with them to leverage their data assets.
Q: Jeff, you've had a lot of announcements about some management additions over the last year really, but especially even in the last month or so. And you mentioned this a bit in the prepared remarks. Wondering if you could give us a bit more color into what some of these people can bring to The Trade Desk. Some of these are high-profile names from high-profile companies. Just wondering kind of what skills do they bring? What capabilities and how might they be able to affect some change in The Trade Desk?
A: Jeff Green (CEO): We have added many leaders with diverse expertise. Kristi Argyilan, our Chief Commercial Officer, is leading data partnerships and has a history of building retail media networks. Ron Lamprecht, our Chief Business Development Officer, brings experience from Amazon in creating holistic partnership frameworks. Vinny Rinaldi, VP of Client Strategy and Growth, is one of the best advocates for why people should buy premium internet, having proven at Hershey's that cheap reach doesn't move the needle. These leaders are positioned to help us talk to the biggest brands and change the game, and we are confident they will make a meaningful contribution.
Q: Jeff, can you just talk a little bit more about why you're confident that as you laid out an independent premium platform focused on objective decisioning, it's really at the heart of your business, why that can continue to win market share when you've got walled gardens combining exclusive live sports inventory, like what Amazon has with their DSP or bring really simple programmatic guaranteed style transaction with low pricing with like what, say, Google's new buyer direct program looks like. Why does that independent premium platform to continue to win share?
A: Jeff
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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