The Trade Desk Shares Slide as Inflation and Tariffs Curb Ad Spending

2026-02-26 companies

Ventura, Thursday, 26 February 2026.
Despite beating recent revenue targets, the stock plummeted over 15% after management warned that tariffs and inflation are squeezing budgets in sectors representing a quarter of their business.

Earnings Beat Overshadowed by Weak Guidance

On Wednesday, February 25, 2026, The Trade Desk (NASDAQ: TTD) released its financial results for the fourth quarter of 2025, delivering headline numbers that technically surpassed analyst expectations [6]. The digital advertising platform reported revenue of $846.8 million, marking a 14.3% year-over-year increase [3]. This figure slightly exceeded the consensus estimate of approximately $841 million [3][7]. Additionally, the company reported adjusted earnings per share of $0.59, edging past the Wall Street forecast of $0.58 [3][7]. Despite these positive metrics, the market’s reaction was severe, with shares plummeting between 15.6% and 17% in the aftermath of the report [3][7]. The sell-off was triggered primarily by the company’s forward-looking guidance for the first quarter of 2026, which projected revenue of at least $678 million—significantly below the $688 million to $689.5 million range anticipated by analysts [3][4][7].

Macroeconomic Headwinds Hit Key Sectors

The deceleration in growth—down from a 22% year-over-year increase in the fourth quarter of 2024—highlights the broader economic friction affecting the advertising ecosystem [1]. CEO Jeff Green explicitly attributed the conservative outlook to spending contractions in the consumer packaged goods (CPG) and automotive sectors [1]. These two industries combined represent approximately 25% of The Trade Desk’s total business [1]. According to Green, these sectors are facing headwinds driven by rising tariffs and persistent inflation, leading to uneven transaction volumes and budget uncertainty [1]. This macroeconomic pressure has forced a revision of growth expectations, with the company guiding for a 10.1% year-over-year revenue increase for the upcoming quarter, a sharp contrast to the 25.4% growth rate seen previously [4].

Strategic Pivot to AI and Profitability

Despite the immediate volatility in share price, The Trade Desk continues to emphasize its strong fundamental positioning and operational efficiency. The company maintained a customer retention rate of over 95% throughout 2025, a benchmark it has upheld for twelve consecutive years [6][7]. In a move to bolster shareholder value amid the stock’s decline, the board of directors authorized an additional $350 million for share repurchases, bringing the total available for future buybacks to $500 million [6][7]. On the technology front, the company has successfully migrated nearly 100% of its clients to its new Kokai platform [1]. Looking ahead to the remainder of 2026, management intends to launch an agentic AI framework for partners, doubling down on technological differentiation to navigate what CEO Jeff Green describes as an “inefficient and opaque” supply chain [1].

Sources

Corporate Earnings Digital Advertising