The ad-tech company missed revenue and earnings expectations, while a weaker forecast overshadowed strong customer retention and sent shares sharply lower after hours.

  • Revenue and adjusted EPS both came in below Wall Street expectations for the second quarter.
  • Third-quarter guidance missed analyst forecasts by a wide margin.
  • Stocktwits retail sentiment was ‘extremely bullish’ despite the selloff, even as traders debated whether weak guidance or slowing growth was the bigger concern.

The Trade Desk Inc. (TTD) reported second-quarter results after Thursday’s closing bell that missed analyst expectations on both revenue and earnings, while issuing weaker-than-expected third-quarter guidance.

The disappointing results sent TTD stock down more than 26% in after-hours trading after it had already fallen 6.8% during the regular session.

TTD’s Q2 Miss, Weak Guidance Weigh On Shares

The Trade Desk reported adjusted earnings of $0.34 per diluted share for the second quarter, down from $0.41 a year earlier. It was also below analysts’ consensus estimate of $0.40, according to fiscal.ai.

Revenue for the quarter ended June 30 rose to $715.06 million from $694 million in the same period a year ago, but missed analysts’ consensus estimate of $751.35 million, according to fiscal.ai.

Customer retention remained above 95% during the quarter, the company said in a release.

For the third quarter, The Trade Desk expects revenue of at least $650 million, well below analysts’ consensus estimate of 805 million, according to fiscal.ai.

It also forecast adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of around $160 million, compared with analysts’ consensus estimate of $340 million.

CEO Jeff Green Acknowledges Weak Quarter

Jeff Green, co-founder and CEO of The Trade Desk, acknowledged the quarter fell short of expectations but said the company is taking steps to improve execution while continuing to focus on AI, measurement and decision-making tools.

“This quarter did not meet the standard we set for ourselves, but it has reinforced our belief that we are focused on the right opportunities for the future,” Green said.

He added that the company has identified the factors that affected performance and is taking action to strengthen execution, upgrade its platform and sharpen its focus on areas where it believes it can create the greatest value.

TTD Stock: What Stocktwits Retail Sentiment Says

On Stocktwits, retail sentiment for TTD improved to ‘extremely bullish’ from ‘bullish’ over the past 24 hours, while message volume jumped to ‘extremely high’ from ‘normal’ during the same period.

Retail traders largely viewed the weak guidance as the primary reason behind the sharp selloff, while some said that slowing growth, and not the underlying business, remains the key concern.

One retail trader said the “earnings numbers are not the issue” and that “guidance being so weak” was the real disappointment. The trader added that investors had hoped the outlook would be “the silver lining” after earlier operational issues were resolved.

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Another trader said “growth rate matters as much as growth itself,” and added that “the problem wasn’t the business” but rather the premium investors had assigned to future growth as revenue growth decelerated.

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One bullish investor, however, pointed to TTD’s customer retention as a sign of long-term strength. The trader highlighted that customer retention was above 95%, and called it a level of “stickiness” rare in ad tech, saying it shows the company’s core platform continues to deliver value for advertisers and agencies.

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TTD stock has lost nearly 54% year-to-date.

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