Trade Desk Clears Its Own Low Bar as Revenue Tops Guidance but Profit Falls Sharply

The Trade Desk reported third-quarter revenue of $736 million on Monday, well above the at least $650 million it had guided to in August.

The results, released after Monday's close, cleared a bar the company had set low in August. Revenue beat the company's own guidance while reported profit fell sharply.

The quarter follows a second quarter the company said did not meet its own standard. In August, chief executive Jeff Green said that quarter fell short of the standard the company set for itself.

For the third quarter, the company had guided revenue to at least $650 million. It had guided adjusted EBITDA to approximately $160 million.

Revenue came in $86 million above that floor, a TickerGrove calculation. The company is a global technology platform for buyers of advertising.

Reported profit fell sharply

On a reported basis, net income fell to $38 million from $116 million a year earlier. Diluted earnings were $0.08 a share, down from $0.23 a share.

The reported margin compressed with it. Net income margin was 5%, against 16% a year earlier.

Two costs explain much of the gap to the adjusted figures. Stock-based compensation was $95 million in the quarter.

Restructuring charges were $44 million, tied to the company's 2026 Restructuring Plan. The company excludes both costs from its adjusted measures.

Nine-month figures show the same pattern. Revenue for the nine months was $2.14 billion, against $2.05 billion.

Net income for the nine months was $142 million, against $256 million. Nine-month revenue grew 4%, against 20% growth a year earlier.

The adjusted results cleared two bars

Adjusted EBITDA was $266 million, down from $317 million a year earlier. Adjusted EBITDA is a non-GAAP profit measure that leaves out stock pay, restructuring and other costs.

Even so, the adjusted result cleared the company's August guide by a wide margin. The result came in $106 million above the guide, a TickerGrove calculation.

Non-GAAP net income was $155 million, down from $221 million. Non-GAAP diluted earnings were $0.33 a share, down from $0.45 a share.

The two profit lines measure different things by design. The reported line carries stock pay and restructuring; the adjusted line leaves them out.

Against outside expectations, the per-share result was a beat. Barron's reported adjusted earnings of $0.33 a share beat FactSet expectations of $0.25 a share.

That is 32% above the consensus figure, a TickerGrove calculation. The adjusted EBITDA margin was 36%, against 43% a year earlier.

Customer retention remained over 95% in the quarter. The company said retention has stayed above that level for over a decade.

"Q3 represented meaningful progress, with results well ahead of our expectations entering the quarter," Green said. "But we are still operating below the level of growth we expect from ourselves," he added.

Green said the company is moving with greater urgency across the company. He cited stronger engagement with its largest customers and platform improvements.

Product moves and a larger buyback

The company also introduced Kokai Zuma during the quarter. It is the latest release of Kokai, its advertising platform, with new agentic AI capabilities.

Netflix expanded its integration with the company during the quarter. Advertisers can now target audiences on Netflix through Kokai using first-party and third-party data.

The board also approved a larger buyback. About $269 million remained available and authorized at September 30, 2026.

The board approved an additional $731 million under its share repurchase program. That brought the total amount available for future repurchases to $1 billion.

The authorization covers repurchases of the company's Class A common stock. The release does not say how much will be repurchased, or when.

The fourth-quarter outlook

For the fourth quarter, the company expects revenue of at least $755 million. It expects adjusted EBITDA of at least $280 million.

The revenue floor is 2.6% above the third quarter's revenue, a TickerGrove calculation. Both floors sit above the third quarter's actual results.

The company gave no outlook for reported net income for the quarter. It said that outlook is not available without unreasonable efforts.

What remains unknown

What remains unknown starts with the market verdict: the release came after Monday's close. No settled reaction to the results exists yet, and the first settled verdict comes Tuesday.

Whether revenue returns to growth is also unknown. The fourth-quarter floor implies growth, but the company has not said when growth resumes.

The release gives no segment detail behind the revenue line. It also gives no timetable for completing the restructuring plan.

How much of the $1 billion buyback will be used is also undisclosed. The release states the authorization, not a repurchase schedule.

Tuesday brings the first settled verdict

What to watch: Tuesday's first settled session after the results. It will show whether investors credit the guidance beat over the profit decline.

The earnings call is the second test. Any detail on customer engagement and the restructuring plan would sharpen the picture.

Fourth-quarter results are the third test. They will show whether revenue clears $755 million and whether margins recover.