Trade Desk (NASDAQ:TTD) reported third-quarter revenue of $736 million, down 0.5% from a year earlier but above its August outlook, as political advertising and demand from medical and health clients helped lift results.
The advertising technology company also benefited from a nonrecurring transaction with a strategic partner, which added approximately 3 percentage points to revenue growth, Chief Financial Officer Nate Olmstead said. Even without that benefit, the underlying business performed meaningfully better than expected, he said.
CEO and Co-Founder Jeff Green said the quarter marked progress in efforts to improve execution, but acknowledged that growth remained below the company’s expectations. Trade Desk is reorganizing its commercial operations, investing in measurement and artificial intelligence, and focusing resources on its largest opportunities as it seeks to restore more durable growth.
Outlook and political advertising
For the fourth quarter, Trade Desk forecast revenue of at least $755 million and adjusted earnings before interest, taxes, depreciation and amortization of at least $280 million. Third-quarter adjusted EBITDA was $266 million, representing a 36% margin.
Olmstead said the fourth-quarter outlook reflects current business trends and does not assume that every positive indicator will immediately translate into revenue. The company expects sequential revenue growth, but not the typical seasonal increase from the third to the fourth quarter, he said.
Political advertising represented a mid-single-digit percentage of third-quarter business and is expected to account for a slightly larger share in the fourth quarter, Olmstead said. Green described the 2026 midterm election as the company’s largest political cycle yet.
Olmstead cautioned that revenue typically falls from the fourth quarter to the first. In election years, the sequential decline has historically been about 25% on an absolute basis, he said.
Medical and health, personal finance, travel and political advertising were among the strongest verticals during the third quarter. Consumer packaged goods and automotive faced pressure, which Olmstead partly attributed to factors including inflation and higher interest rates. He added that the company is also looking for areas where it can improve execution.
Restructuring and spending plans
Third-quarter net income was $38 million, or $0.08 per diluted share, while adjusted net income was $155 million, or $0.33 per diluted share. Operating expenses totaled $643 million, including $44 million in restructuring charges primarily related to severance and other employee benefits.
Trade Desk previously announced a reduction of approximately 15% of its global workforce. Olmstead said the actions are expected to generate more than $100 million in gross savings in 2027, with some savings reinvested in the business.
The CFO expects expense growth to moderate meaningfully next year compared with 2026. He said the company is examining costs across areas including platform operations, software, outside services and facilities, while continuing to invest in products and customer relationships.
Trade Desk ended the quarter with about $1.6 billion in cash, cash equivalents and short-term investments. It did not repurchase shares during the quarter, but announced an additional authorization that brought the amount available for future repurchases to $1 billion.
Products and customer relationships
Green said Trade Desk plans to formally launch an open measurement product later in the fourth quarter. The product is designed to help advertisers assess the contribution of advertising across the customer journey rather than relying primarily on the last click or view before a transaction. Green said he expects it to support growth next year.
The company also launched Zuma, an upgrade to its Kokai platform, during the third quarter. Green said the changes improved workflows and incorporated more AI into the user experience. In tests across 62 campaigns, an upgraded Koa model improved cost per acquisition by a median of 21% compared with the prior model, he said.
More than 100 advertisers have tested Audience Unlimited, a product intended to simplify the use of third-party audience data, with several hundred campaigns live. Green said recent campaigns using the product reduced cost per acquisition by more than 30% and cost per thousand impressions by approximately 14%.
Trade Desk is also expanding its use of joint business plans with brands and agencies. The number of such plans was up more than 30% year over year through the end of the third quarter, and customers operating under them continued to grow meaningfully faster than those using traditional master service agreements, Green said.
Leadership and pricing
Green announced that Co-Founder Dave Pickles, who stepped down as chief technology officer in 2023 and has since served as a long-term adviser, will substantially expand his role. Green described Pickles as the architect of the platform and said his technical experience could help the company move faster.
Asked about Trade Desk’s take-rate pricing model, Green said the rate has remained relatively consistent over the company’s decade as a public company. He said Trade Desk would be open to lowering it if doing so could produce more growth, but argued that customers should evaluate the platform’s total cost and the outcomes it delivers rather than its stated price alone.
About Trade Desk (NASDAQ:TTD)
The Trade Desk, Inc provides a technology platform that helps advertisers and advertising agencies plan, buy, and measure digital advertising. Its self-service platform uses automated, data-driven tools to help clients purchase advertising inventory across channels such as connected TV, mobile, audio, and display.
The company also offers tools for campaign management, audience targeting, measurement, and access to data and advertising inventory. Its platform is designed to help clients manage campaigns across multiple media channels and publishers.
Founded in 2009 by Jeff Green and Dave Pickles, The Trade Desk serves clients in markets around the world.
