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Economic Times
2 days ago
- Business
- Economic Times
Trade Desk stock collapses 28% after Q2 shock — is this the beginning of the end for ad tech's golden run?
Synopsis Trade Desk stock took a massive 28% nosedive after the company's Q2 2025 earnings report left Wall Street stunned. While the ad tech giant posted solid revenue growth and beat on adjusted earnings, weak guidance for the upcoming quarter shook investor confidence. Even with strong customer retention and the growing impact of its AI-driven Kokai platform, the market reacted sharply to the lack of near-term optimism. Leadership changes and expanding ad tools weren't enough to stop the sell-off. This sharp drop has now raised serious questions about the future of digital advertising and the outlook for ad tech stocks overall. The Trade Desk (TTD) shocked investors after its Q2 2025 earnings release, sending the stock plunging 28% in after-hours trading. Despite strong revenue growth and high customer retention, weak guidance for the next quarter rattled Wall Street, raising fresh concerns about the future of the ad tech industry. The Trade Desk (NASDAQ: TTD), a longtime favorite among digital advertising investors, sent shockwaves through Wall Street after reporting its Q2 2025 earnings. Despite showing revenue growth and consistent customer retention, the stock crashed 28% in after-hours trading, marking one of its steepest single-day declines in recent memory. Investors were initially hopeful, riding high on Trade Desk's growing adoption of its AI-powered Kokai platform and ongoing dominance in connected TV (CTV) advertising. But those hopes quickly unraveled after the company issued soft guidance for Q3, sparking widespread concern about the near-term health of the ad tech sector. For the second quarter of 2025, Trade Desk reported revenue of $694 million, a solid 19% year-over-year increase from $585 million in Q2 2024. The company also posted an adjusted EPS of $0.41, beating analyst expectations, and maintained an impressive 39% adjusted EBITDA margin. While these numbers appear strong on the surface, Wall Street had expected signs of stronger recovery in the second half of the year. Instead, Trade Desk's Q3 outlook came in below expectations, signaling continued macroeconomic pressures on the digital ad market and prompting heavy sell-offs. TTD's sharp drop wasn't about what it achieved—it was about what it failed to promise. The company's lackluster forward guidance and cautious tone during the earnings call spooked investors who had hoped for a rebound in ad spending. With no clear signal of an industry turnaround, especially in performance-driven ad categories, the market swiftly punished the stock. Analysts also pointed to mounting pressure from competitors and slower-than-expected growth in key areas like retail media and international expansion. Despite appointing Alex Kayyal as the new CFO (starting August 21) and welcoming AI expert Omar Tawakol to the board, the leadership shake-up wasn't enough to restore confidence. Investors had also pinned hopes on the continued rollout of Kokai, OpenPath, and UID2, but the company's inability to project stronger near-term performance raised red flags. TTD noted that Kokai adoption is growing, with about two-thirds of its customers now onboarded. The platform claims to deliver a 24% reduction in cost per conversion and 20% lower cost per acquisition, promising long-term efficiency gains. But in the short term, Wall Street is clearly looking for revenue acceleration, not just efficiency stories. The Trade Desk's Q2 report is now a wake-up call for the broader ad tech industry. If a company with Trade Desk's fundamentals and innovation pipeline can't deliver confident forward guidance, others in the space may face similar scrutiny. While the long-term picture for digital advertising remains promising, especially with the shift to CTV and AI-powered ad targeting, the immediate future looks uncertain. Investors should brace for potential volatility across other ad tech names and watch Q3 results closely. The Trade Desk's steep drop might turn out to be a buying opportunity—but only if the company can reestablish growth momentum and calm investor nerves in the quarters ahead. With strong fundamentals, industry-leading retention, and advanced tech tools like Kokai in play, there's still a path forward. But the message from Wall Street is clear: 'Show us growth, not just potential.' Q1. Why did Trade Desk stock crash after Q2 earnings? Because investors were disappointed by the company's weak guidance for the next quarter, despite good revenue growth. Q2. What does Trade Desk's Q2 2025 report mean for ad tech stocks? It signals uncertainty in the ad tech sector as even strong players like Trade Desk are facing market pressure.
Yahoo
23-07-2025
- Business
- Yahoo
The Trade Desk vs. Alphabet: Which Ad-Tech Stock is the Smarter Buy?
Both The Trade Desk, Inc TTD and Alphabet Inc GOOGL play pivotal roles in the programmatic advertising ecosystem. TTD operates a leading demand-side platform (DSP), which helps advertisers focus on data-driven ads. Alphabet, on the other hand, dominates the digital ad space through its massive ecosystem comprising Google Search, YouTube and more. Since both firms have a massive exposure to the booming connected TV (CTV) and retail media trends, this makes for an intriguing comparison for investors. So, which stock makes a better investment pick at present? Let's deep dive into the pros and cons for each company. The Case for TTD TTD is confident in its ability to outpace the market and seize future opportunities owing to solid execution across key initiatives, CTV, retail media, international expansion, Kokai, UID2 and OpenPath. The Kokai platform is now being used by two-thirds of the clients, much ahead of schedule. The platform is delivering on lower funnel KPIs, including 24% lower cost per conversion and 20% lower cost per acquisition, per TTD. 100% adoption by clients is expected to be completed by this year's end. The integration of Koa AI tools was highlighted by management as a 'game changer' for the Kokai platform. It recently introduced Deal Desk, an innovation within its Kokai platform designed to enhance how advertisers and publishers manage one-to-one deals and upfront commitments. The acquisition of Sincera, a leading digital advertising data company, will aid in enhancing its programmatic advertising platform by integrating Sincera's actionable insights on data quality. It recently unveiled the OpenSincera application to offer Sincera's rich advertising metadata to the ad tech ecosystem. First-quarter revenues jumped 25% year over year while adjusted EBITDA was $208 million (34% margin). Video, which includes connected TV or CTV, represented a high 40 percent share of digital spend, while mobile had a mid-30 percent share. It expects at least $682 million in revenues for the second quarter of 2025, implying approximately 17% year-over-year growth. The stock's recent addition to the S&P 500 index has increased its visibility and potentially aided in attracting more institutional ownership. Nonetheless, increasing macroeconomic uncertainty and escalating trade tensions do not augur well for TTD, as these could squeeze ad budgets. The company highlighted the impact of the volatile macro backdrop, particularly on the large global brands. If macro headwinds worsen or persist into the second half of 2025, revenue growth may face further pressure due to reduced programmatic demand. The intensely competitive nature of the digital advertising industry, dominated by industry giants like Alphabet and Amazon, continues to put pressure on TTD's market position. While CTV remains a strong revenue driver, the market is increasingly fragmented and competitive. Heavy reliance on CTV for growth is a concern, as any adverse impact on this segment could weigh heavily on the company's overall performance. Moreover, TTD derived 88% of its revenues from North America, while only 12% came from international markets. A weak international footprint limits TTD's total addressable market expansion potential. The Case for GOOGL Alphabet dominates digital ad space with its online ad platform. The main sources of its ad revenues are Google Search, YouTube ads, Google Network, Google AdSense and Google Ad Manager. The company's ginormous ad technology infrastructure integrates both DSP and supply-side platforms, aids advertisers in reaching their target across the web, mobile apps, and CTV. Alphabet's efforts to infuse AI in Search are driving top-line growth. Circle to Search now features AI Mode. AI Mode is also accessible through Lens within the Google app on both Android and iOS devices. Circle to Search is now available on 300 million-plus Android devices. Earlier, Alphabet announced the launch of Offerwall. It is a flexible tool designed to aid publishers earn revenue while offering their audience choices. Offerwall is now available in Ad Manager. The company also rolled out new features, which include Optimize. Optimize utilizes AI to decide the best time to display the Offerwall for each visitor, thereby maximizing engagement and revenues. In 2024, Google advertising revenues increased 11.2% over 2023 to $264.59 billion, driven by a 13.2% increase in Google Search & other revenues and a 14.7% increase in YouTube ads. In 2024, ad revenues accounted for 75.6% of the total revenues. In the first quarter of 2025, Google advertising revenues rose 8.5% year over year to $66.885 billion and accounted for 74.1% of total revenues. Search and other revenues were up 9.8% and YouTube's advertising revenues improved 10.3% year over year. Alphabet's ad business faces several headwinds. Regulatory scrutiny is intensifying, particularly in the United States and Europe. The landscape has become increasingly competitive with both small and established players aggressively vying for ad dollars. Privacy changes such as the depreciation of third-party cookies and Apple's iOS tracking restrictions are also reforming the digital ad landscape. Nonetheless, business diversification, especially cloud and AI, with stupendous financial resources, gives it an edge and reduces reliance on one segment. Alphabet generated $36.15 billion of cash from operations in the first quarter of 2025. Cash equivalents and marketable securities were $95.328 billion at the quarter-end. Share Performance for TTD & GOOGL Over the past month, TTD and GOOGL have gained 13.7% and 14.8%, respectively. Image Source: Zacks Investment Research Valuation for TTD & GOOGL Valuation-wise, TTD is overvalued, as suggested by the Value Score of F, while GOOGL has a Value Score of C. In terms of the forward 12-month price/earnings ratio, TTD shares are trading at 41.06X, higher than GOOGL's 19.35X. Image Source: Zacks Investment Research How Do Zacks Estimates Compare for TTD & GOOGL? Analysts have made no revisions for TTD's bottom line for the current year in the past 60 days. Image Source: Zacks Investment Research For GOOGL, there is a marginal upward revision. Image Source: Zacks Investment Research TTD or GOOGL: Which Is a Better Pick? TTD and GOOGL currently carry a Zacks Rank #3 (Hold) each. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. While both The Trade Desk and Alphabet are benefiting from the rise in CTV and retail media, Alphabet stands out due to its broader ad ecosystem, stronger financials, and diversified revenue streams. Its massive scale, robust AI integration, and better valuation make it a more resilient long-term investment. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Alphabet Inc. (GOOGL) : Free Stock Analysis Report The Trade Desk (TTD) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research
Yahoo
26-06-2025
- Business
- Yahoo
The Trade Desk's CTV Business Driving Growth: Can the Momentum Hold?
The Trade Desk (TTD) is benefiting from higher Connected TV ('CTV') adoption amid the convergence of internet and television programming. This particular growth driver is fast becoming the focus of the company's growth strategy. In the last reported quarter, video advertising, which includes CTV, represented a high-40s percentage share of total business. TTD is looking to capitalize on the shift from linear to programmatic CTV. On the last earnings call, TTD referred to CTV as the 'kingpin of the open internet.' The company also highlighted that supply is outpacing demand in the current ad landscape, especially in CTV, therefore making it a buyer's market. Major CTV players are not only 'plugging directly' into TTD's demand, but they are also adopting key innovations like UID2 and OpenPath. Earlier in the year, TTD introduced its Ventura Operating System for CTV, designed to drive greater efficiency and transparency in advertising. This operating system enables better data management, allowing TTD to enhance its targeting capabilities, which are crucial as the CTV market expands. TTD is also executing its international expansion led by CTV. Nonetheless, increasing macroeconomic uncertainty and escalating trade tensions do not augur well for TTD as well as other players in this intensely competitive landscape, as these could squeeze ad budgets. TTD highlighted the impact of the volatile macro backdrop, particularly on the large global brands. If macro headwinds worsen or persist into the second half of 2025, revenue growth may face further pressure due to reduced programmatic demand. Like The Trade Desk, PubMatic, Inc PUBM is gaining from growth in the CTV business, which bolsters its strategic positioning in the high-growth programmatic video. PUBM is expected to gain from the continuing shift of ad dollars from linear TV to streaming, especially in a market favoring programmatic spot buys with flexibility over heavy upfront commitments. PubMatic has already secured more than 80% penetration among the top 30 streamers. In the last reported quarter, CTV revenues surged more than 50% year over year, while omni-channel video revenues grew 20% and represented 40% of total revenues. PubMatic is also heavily investing in Activate for SPO, Convert for commerce media and Connect for curation to drive growth and create sticky customer engagement. Magnite, Inc MGNI is gaining from robust growth in CTV, with overall contributions excluding Traffic Acquisition Costs (ex-TAC) increasing 12% year over year in the first quarter of 2025. CTV's contribution ex-TAC was up 15%, representing 43% of Magnite's total contribution ex-TAC mix. The growth is being driven by increased ad spend and programmatic adoption by leading giants like Fox, Vizio, Roku, LG, Warner Bros. Discovery, Walmart and Netflix. Netflix continues expanding its programmatic strategy globally and Magnite remains a core partner of its programmatic ad stack. Momentum with the agency marketplaces and growth in live sports augurs well. The company recently debuted the next generation of SpringServe, integrating the ad server and advanced programmatic capabilities of its streaming SSP into one unified platform. It is set for general availability in July 2025. Shares of TTD have plummeted 40.6% year to date compared with the Internet – Services industry's decline of 9.3%. Image Source: Zacks Investment Research In terms of forward price/earnings, TTD's shares are trading at 35.58X, up from the Internet Services industry's ratio of 17.8X. Image Source: Zacks Investment Research The Zacks Consensus Estimate for TTD's earnings for 2025 has been unchanged over the past 30 days. Image Source: Zacks Investment Research TTD currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report The Trade Desk (TTD) : Free Stock Analysis Report Magnite, Inc. (MGNI) : Free Stock Analysis Report PubMatic, Inc. (PUBM) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research
Yahoo
23-06-2025
- Business
- Yahoo
TTD Global Momentum Increases as International Growth Overtakes U.S.
In the last reported quarter, The Trade Desk's TTD 'International growth again outpaced North America for the ninth quarter in a row,' marking a major milestone. While North America accounts for 88% of advertising spend, TTD is steadily expanding its global footprint, driven by faster-growing international markets in EMEA and APAC, which are gaining traction despite a 12% share. This increasing global presence offers clients localized marketplace expertise across key the company, connected TV (CTV) remains a major driving force, and demonstrating strong performance across international markets. As audiences shift from traditional cable TV to streaming platforms, advertisers increasingly turn to programmatic CTV for its extensive reach. Trade Desk has capitalized on this trend with a vast reach of more than 90 million households and 120 CTV devices, solidifying its foothold in the fast-evolving digital TV landscape. This trend is growing globally, not just in the United States. Rising streaming in Europe and Asia drives more premium ad spending on Trade Desk's TTD's flagship products like Kokai, Unified ID 2.0 and OpenPath are gaining solid demand momentum as well. Management noted that two-thirds of its clients now use its AI platform, Kokai, with full adoption expected by year-end. Kokai helps cut costs, lowering the cost per conversion by 24% and the cost per acquisition by 20%. The Trade Desk price-consensus-chart | The Trade Desk Quote For the current quarter, TTD acknowledged the uncertain macro environment and its adverse impact on large global brands. However, it remains optimistic about its business strength, supported by Kokai demand, and healthy international pipeline activities. For the second quarter of 2025, Trade Desk expects at least $682 million in revenues, implying 17% year-over-year growth, assuming stable market conditions. This outlook factors in the prior year's political ad spend boost of about 1%. Adjusted EBITDA is projected to be around $259 a report by Precedence Research, the global digital ad spending market is projected to reach a hefty $1,483 billion by 2034, at a CAGR of 9.47% from 2025 to 2034. With global ad spend forecasted to grow, particularly in CTV and retail media, TTD is well-positioned to convert accelerating international momentum into a balanced global revenue base. Magnite Inc. MGNI is seeing strong momentum in the CTV space, with CTV contribution excluding Traffic Acquisition Costs (ex-TAC) rising 19% year over year in 2024. For the full year, the company delivered $607 million in ex-TAC contribution and handled more than $6 billion in ad spend. This growth is fueled by rising programmatic adoption and ad investments from major players like Walmart, Disney, Fox, Roku, LG, Vizio, Warner Bros. Discovery and Paramount. Its expanded deal with Disney now covers live sports, global markets and podcasts, with Disney inventory added to ClearLine. It's also growing its international sports reach with new partners like FIFA and Sky New Zealand. In 2025, more generative AI tools are set to boost efficiency and unlock new revenue to Trade Desk, PubMatic, Inc. PUBM is benefiting from the rise of CTV, strengthening its position in the fast-growing programmatic video space. The ongoing shift of ad spending from traditional TV to streaming, especially in a market that values flexible, spot-based buying, is expected to further support PubMatic's growth. The company has already achieved more than 80% adoption among the top 30 streaming platforms. It is also growing in global markets, with strong results in India, Europe, Australia and Japan. It's expanded work with BBC and other broadcasters shows rising trust in its platform for streaming ad monetization. Shares of TTD have plunged 28.7% in the past year compared with the Zacks Internet -Services industry's fall of 4.3%. Image Source: Zacks Investment Research From a valuation standpoint, TTD trades at a forward price-to-sales of 10.79X, higher than the industry's average of 5.01X. Image Source: Zacks Investment Research The Zacks Consensus Estimate for TTD's earnings has remained unchanged over the past 30 days. Image Source: Zacks Investment Research TTD currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report The Trade Desk (TTD) : Free Stock Analysis Report Magnite, Inc. (MGNI) : Free Stock Analysis Report PubMatic, Inc. (PUBM) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
18-03-2025
- Business
- Yahoo
Cineverse Partners with The Trade Desk to Optimize Programmatic Ad Inventory through OpenPath
New Integration Simplifies Advertiser Access to Cineverse's Massive Content Library Available on C360 Ad Solution LOS ANGELES, March 18, 2025 /PRNewswire/ -- Cineverse (Nasdaq: CNVS), a next-generation entertainment studio, today announced its strategic partnership with global advertising technology leader The Trade Desk to integrate OpenPath with Cineverse's ad tech platform, C360. The Trade Desk's OpenPath addresses a long-standing challenge in the advertising ecosystem by streamlining the advertising supply chain and offering advertisers a more efficient, transparent path to each ad impression. This direct connection ensures a faster and simpler path to Cineverse's inventory to empower advertisers to make more informed and impactful decisions. Advertisers already working with The Trade Desk can now tap into Cineverse's expansive digital library and brands, enabling them to engage with the world's most dedicated fandoms in a more meaningful way. Brands can not only identify the best content to invest in based on real-time insights, but they can also optimize their campaigns for better performance. By leveraging OpenPath, advertisers can maximize effectiveness of their programmatic campaigns across a vast and diverse content landscape and easily reach Cineverse's premium inventory. Cineverse SVP Advertising Sales Terry City commented, "Brands that work with us, and the C360 platform know the power it can bring. Integrating OpenPath into C360 creates an on ramp for advertisers to grow their brands with Cineverse and is going to allow our partners to move quicker and see results faster, matching their brands with our programmatic library." This partnership represents a significant step forward in bridging the gap between premium content and advertisers looking for more transparent and cost-effective ways to connect with the right audience. As the digital advertising landscape continues to evolve, this integration positions Cineverse as a key player in the future of programmatic advertising by continuing to find innovative ways for brands to engage with audiences at scale. About Cineverse 360 Ad Solutions Cineverse's advertising offerings unlock the world's most dedicated fandoms wherever they are, offering direct contextual advertising and a premium programmatic advertising network and ad-tech platform, C360. Cineverse's custom marketing integrations offer scalable opportunities to reach enthusiastic audiences across multiple touchpoints. These include audio opportunities via the Cineverse Podcast Network, display, social, experiential in-person events, and connected TV (CTV) advertising on the company's lineup of more than two dozen free, ad-supported streaming television (FAST) channels. About Cineverse Cineverse (Nasdaq: CNVS) is a next-generation entertainment studio that empowers creators and entertains fans with a wide breadth of content through the power of technology. It has developed a new blueprint for delivering entertainment experiences to passionate audiences and results for its partners with unprecedented efficiency, and distributes more than 71,000 premium films, series, and podcasts. Cineverse connects fans with bold, authentic, independent stories. Properties include the highest-grossing non-rated film in U.S. history; dozens of streaming fandom channels; a premier podcast network; top horror destination Bloody Disgusting; and more. Powering visionary storytelling with cutting-edge innovation, Cineverse's proprietary streaming tools and AI technology drive revenue and reach to redefine the next era of entertainment. For more information, visit Contacts: For MediaThe Lippin Group, cineverse@ For InvestorsJulie Milstead, investorrelations@ View original content to download multimedia: SOURCE Cineverse Corp. Sign in to access your portfolio
