An analyst downgraded The Trade Desk to a Sell rating, citing structural headwinds and intense competitive pressure. The downgrade follows deteriorating fundamentals and a significant slowdown in performance.
Revenue growth fell to 3% during the second quarter. Third-quarter guidance of approximately $650 million implies a 12% year-over-year decline. This forecast represents the first revenue contraction in the company's history.
The Trade Desk plans to cut 15% of its workforce in response to the slowdown. The company was also removed from the S&P 500 index following its August financial update. Weaker advertising budgets and increased competition drove these financial struggles.