The Trade Desk Q3 revenue falls 0.5% amid AI gains and layoffs

The Trade Desk generated $736 million in Q3 2026 revenue, down 0.5% year over year, compared with 18% growth in Q3 2025. ADWEEK characterized the result as clearing Wall Street's low expectations.

The Trade Desk said political advertising spending prevented a steeper revenue decline. CEO Jeff Green called the 2026 elections The Trade Desk’s “biggest political cycle yet.” Green highlighted the distinction between a midterm contest and a presidential year.

Profit moved faster than revenue

The Trade Desk reported:

• Q3 adjusted EBITDA of $266 million and a 36% margin, down from $317 million and a 43% margin a year earlier.
• Net income of $38 million, down from $116 million a year earlier, including $44 million in restructuring charges, primarily severance.
• Revenue of $2.14 billion for the first nine months of 2026, up 4% year over year.
• Q4 2026 revenue guidance of $755 million.

The seven-point adjusted EBITDA margin contraction shows how quickly operating performance weakened after revenue turned nearly flat. The restructuring charges also weighed on the net-income comparison, with severance accounting for most of that amount.

The company reset costs while Koa improved campaign performance

The Trade Desk cut 15% of its workforce in Q3. The company expects those layoffs to generate more than $100 million in savings during 2027. The cuts came as political demand cushioned sales and adjusted EBITDA margin fell seven points.

The company also reported measurable gains from Koa, its AI model. Koa improved median cost per acquisition by 21% across 62 A/B-tested campaigns. It also reduced setup time by up to 15%. Together, those results give The Trade Desk evidence of lower acquisition costs and faster implementation even as revenue growth slowed.

CEO Jeff Green opened the earnings call by welcoming back co-founder Dave Pickles. ADWEEK reported last week that Pickles had an expanded role. His return came in a quarter marked by near-flat revenue, lower profitability and a 15% workforce reduction.

What does this change for campaign buyers?

For campaign buyers, Koa turns The Trade Desk's AI claims into testable benchmarks. The company reported a 21% improvement in median cost per acquisition across 62 A/B-tested campaigns, with setup time falling by as much as 15%. Buyers can use those figures as a concrete baseline when assessing acquisition efficiency and implementation speed.

The wider commercial test is whether those product gains can support revenue as The Trade Desk approaches Q4 guidance of $755 million. The 15% workforce cut and more than $100 million in expected 2027 savings give the company a lower cost base for that test. For marketers, the next signal is whether better AI-driven acquisition economics can convert political-cycle support into sustained growth after the workforce reset.