The Trade Desk's Revenue Up, But Slowing Growth Tanks Stock 30%
The Trade Desk, a prominent player in the programmatic advertising sector, recently reported a robust second quarter for 2025, exceeding its own revenue guidance. However, these positive figures were overshadowed by a significant deceleration in growth, prompting a sharp decline in its stock price. Shares tumbled by 30% in after-hours trading, reflecting investor anxiety over the company’s slowing expansion rate compared to previous periods.
For the second quarter of 2025, The Trade Desk posted revenues of $694 million, marking a 19% increase year-over-year and surpassing its earlier projection of $682 million. Despite this beat, the broader picture for the first half of 2025 revealed a 22% year-over-year revenue growth, a noticeable drop from the 27% growth recorded during the same period last year. This dip in the growth trajectory appears to have been the primary catalyst for the market’s harsh reaction.
Amidst this Wall Street turbulence, The Trade Desk CEO Jeff Green offered a defiant perspective, particularly addressing the intensifying competition from Amazon. Amazon’s expanding advertising business has reportedly drawn millions of dollars away from other platforms, including The Trade Desk. Green, however, downplayed Amazon as a direct long-term competitor in the broader digital advertising ecosystem, often referred to as the “Open Internet.” He argued that Amazon’s substantial inventory, particularly from Prime Video, inherently limits its ability to objectively facilitate ad buying across the open web, thereby preventing it from becoming a true, unbiased marketplace. Instead, Green pitched The Trade Desk as a potential partner for Amazon, especially if the e-commerce giant were to open its Prime Video ad inventory to external demand-side platforms.
Operationally, The Trade Desk has been making strides in several key areas. The company reported increasing adoption of its core Kokai platform, with three-quarters of its clients now utilizing the interface and the bulk of their advertising spend flowing through it. The company anticipates a full client migration to Kokai by year-end. Furthermore, The Trade Desk observed greater engagement with Connected TV (CTV) advertising and its OpenPath tool, which facilitates direct connections between advertisers and publishers, bypassing traditional intermediaries. The company is also actively expanding its direct business relationships with brands, a strategy that has resulted in more than 100 recently signed joint business plans.
However, not all sectors performed uniformly. The company noted underperformance in specific verticals, including home and garden, which accounts for 8% of its business, and style and fashion, representing 4%.
In terms of leadership, The Trade Desk announced key appointments. Alex Kayyal, formerly of Lightspeed Venture Partners, will join as Chief Financial Officer effective August 21, succeeding Laura Schenkein. Additionally, Omar Tawakol, CEO of AI startup Rembrand, has been appointed to the company’s board of directors, signaling a continued focus on artificial intelligence integration within its offerings.
Despite a quarter of solid revenue, The Trade Desk’s stock plunged 30%, signaling that for investors, slower growth eclipsed all else.