Trade Desk, Inc. Q1 FY2026 earnings call

• Macro Environment: The macro environment in 2026 has become more complex with geopolitical tensions on the rise. However, it also presents opportunities for change and upgrade, with the most sophisticated brands using the moment to become more data-driven, which benefits The Trade Desk, Inc. • Global Advertising Market: The global advertising ecosystem is dynamic due to macro conditions and AI innovations. There is a supply-demand imbalance, and the open internet is thriving. Premium publishers/content owners like Spotify, Disney, NBCU, and Netflix are shaping the future. LLMs and AI search engines have the potential to unlock more inventory. Measurement is broken but crucial for open internet growth. • Buy Side: Marketers are upgrading their operations, using AI tools, focusing on growth rather than cost-cutting, and innovating with AI partnerships such as the one with Stagwell. • Innovation: The company is highly focused on improving inputs for its objective AI-fueled advertising machine. This includes enhancing measurement, data-driven decisioning, data and price discovery, and making the supply chain more efficient. There are initiatives like the creation of a large retail data marketplace, integration with partners for on-site retail media, and the Audience Unlimited product

In Q1, revenue reached $689 million, showing a 12% year-over-year increase. Adjusted EBITDA for the quarter was $206 million, with a 30% margin. Video, including CTV, constituted a low-50s percentage of the business and continued to grow in terms of its share of the channel mix. Mobile held a high-20s percent share during the quarter, and display had a low double-digit share. Audio made up around 6% of the business and experienced year-over-year growth at a rate faster than any other channel in Q1. Geographically, the United States accounted for approximately 82% of the revenue in Q1, while international made up about 18%. There was strong momentum in both EMEA and APAC, reflecting the investments made in these regions over the past several years and the growth of CTV in these markets. Among verticals that made up at least 1% of the business, medical health, automotive, and events saw particularly strong growth, whereas the home and garden and food and drink sectors faced pressure as CPG brands navigated geopolitical uncertainty, consumer softness, and input cost inflation

• For Q2, the company expects revenue to be at least $750 million and adjusted EBITDA to be approximately $260 million. • During the remainder of 2026, the plan is for headcount growth to remain below revenue growth, with a focus on prioritizing investments that directly support revenue growth and AI-driven innovation. • The full-year 2026 adjusted EBITDA margin is expected to be at least 40%, approximately in line with the margin in 2025

Q: Comments on Publicis discussions and factors driving the deceleration in Q2 outlook, A: There has been ongoing negotiation with Publicis, and the Q2 deceleration is due to macro factors, but the long-term opportunity for the business remains strong.

Q: Details regarding Samantha Jacob leaving for OpenAI, A: Samantha Jacob is on the board, and the company is assembling a strong team of senior leaders.

Q: Elaboration on the opportunity related to LLMs and AI search, A: LLMs and AI search engines face monetization dilemmas and have the potential to unlock more addressable market (TAM), and the company has a role in the ecosystem.

Q: Further discussion on agentic trading, A: Agentic AI can assist in reasoning and optimizing campaigns, addressing the overwhelming decision process in programmatic advertising.

Q: Path to agentic and relation of JBP signings to agency disagreements, A: The path to agentic is more about solving technology issues, and the relation of JBP signings to agency disagreements is not commented on specifically