The Trade Desk reported a first-quarter revenue beat, issued confident guidance for the second quarter and then watched its stock fall nearly 14% in after-hours trading. That sequence reflects the uncomfortable position the company is in right now. Growth is happening, but the market is not in a forgiving mood for anything that falls short of the full picture.
The Q1 numbers that beat on revenue
For the quarter ended March 31, The Trade Desk reported revenue of $689 million, up 12% from the same period a year earlier and ahead of analyst estimates of roughly $678 million. Customer retention stayed above 95%, a level the company has maintained for more than a decade and a sign that advertisers are not walking away from the platform.
The profitability side told a different story. Non-GAAP diluted earnings per share came in at $0.28, below analyst consensus of $0.32. Adjusted EBITDA reached $206 million, roughly flat compared to $208 million in the same quarter last year, representing a 30% margin. GAAP net income fell to $40 million from $51 million in the prior year period.
For the second quarter, management guided for revenue of at least $750 million and adjusted EBITDA of approximately $260 million, a meaningful increase from Q1 that the company attributed to continued momentum in its core programmatic advertising platform.
Why the Trade Desk stock still dropped 14%
The non-GAAP earnings miss was enough to trigger an immediate selloff. Shares fell from a closing price near $23.49 to approximately $20.25 in after-hours trading, a drop of roughly 14%. For a stock that had already shed about 60% of its value over the past year from its 52-week high of $91.45, the margin for error is nearly gone. Even narrow misses land hard in that context.
The company spent approximately $164 million repurchasing its Class A common stock during the quarter, with $327 million still authorized for future buybacks. The buyback activity suggests management believes the current price undervalues the business, but the market did not read the quarter that way.
AI tools and new Trade Desk partnerships
Several recent moves point toward where The Trade Desk is building next. The company launched Koa Agents, an agentic AI capability covering media planning, buying, optimization and measurement across the open internet, with Stagwell as the first partner. It also introduced OpenTTD, a unified login and analytics system for clients who interact with the platform across multiple entry points.
The OpenAds initiative is gaining publisher support. AccuWeather, The Guardian, Hearst Magazines, Hearst TV, Newsweek and People Inc. are among the early adopters. LinkedIn selected The Trade Desk as its first demand-side platform partner for activating business-to-business audience data in connected television advertising, extending the platform’s reach into streaming environments aimed at professional audiences.
What analysts and long-term investors are saying
Saga Partners, which first bought The Trade Desk in 2017, addressed the stock’s decline in its Q1 2026 investor letter. The firm’s portfolio fell 23% for the quarter against a 4.3% decline in the S&P 500, but the firm maintained that the drop reflected near-term pressures rather than permanent damage to the business. Since its initial purchase in 2017, the investment has contributed to portfolio returns of 298.7% net of fees, compared to 240.3% for the S&P 500 over the same period.
Analyst ratings are mixed. UBS maintained a Buy rating with a $31 price target. Evercore ISI Group maintained an Outperform rating with a $32 target. Wells Fargo holds an Equal-Weight rating with a $24 target. Rosenblatt downgraded to Neutral earlier this year with a $25 target, pointing to valuation concerns following a period of sustained underperformance.
The business is growing. The stock is not. That tension is what investors are sitting with heading into the second quarter.
