AI Takeaway
TTD delivered 11.8% revenue growth to $688.9M in Q1 FY2026, with strong operating cash flow of $391.8M (+34.4% YoY), though net income fell 21.1% to $40.0M as cost of revenue surged 27.4% and cash balances declined amid ongoing share buybacks.
Revenue
$688.86M
++11.82% YoY
EPS (Basic)
$0.08
-20.00% YoY
Operating Income
$66.65M
++22.40% YoY
Filed · Analysis updated · Source: SEC EDGAR 10-Q filing
TTD grew Q1 FY2026 revenue 11.8% year-over-year to $688.9M (from $616.0M), demonstrating continued demand for its programmatic advertising platform despite a challenging macro environment for ad spending.
Source: Source: 10-Q Income Statement, Q1 FY2026
Cost of revenue rose a steep 27.4% YoY to $182.0M, outpacing revenue growth of 11.8%, which compressed gross profit margins and signals rising infrastructure or data costs associated with scaling the platform.
Source: Source: 10-Q Income Statement, Q1 FY2026
Operating income grew 22.4% YoY to $66.6M, pushing operating margin to 9.7% from 8.8% in the prior year period, suggesting that operating expense discipline (outside of cost of revenue) is improving.
Source: Source: 10-Q Income Statement & Key Ratios, Q1 FY2026
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Upgrade to unlockCost of revenue grew 27.4% YoY versus revenue growth of only 11.8%, creating meaningful gross margin compression. If this trend continues, TTD's ability to convert revenue growth into profitability will be increasingly constrained. Sustained cost inflation in data, cloud infrastructure, or third-party inventory could structurally impair margins.
Source: Source: 10-Q Income Statement, Q1 FY2026
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Upgrade to unlockReported EPS of $0.28 versus the $0.32 analyst consensus — a -13.3% miss for Q1 FY2026.
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue | $688.86M | $616.02M | +11.82% |
Cost of Revenue | $181.97M | $142.84M | +27.40% |
Operating Income | $66.65M | $54.45M | +22.40% |
Net Income | $40M | $50.68M | -21.08% |
EPS (Basic) | $0.08 | $0.10 | -20.00% |
EPS (Diluted) | $0.08 | $0.10 | -20.00% |
R&D Expense | $142.72M | $132.4M | +7.79% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Total Assets | $5.73B | $5.71B | +0.51% |
Current Assets | $4.86B | $4.86B | +0.11% |
Total Liabilities | $3.28B | $2.99B | +9.77% |
Current Liabilities | $2.89B | $2.68B | +7.77% |
Stockholders' Equity | $2.45B | $2.72B | -9.69% |
Cash & Equivalents | $878.38M | $1.12B | -21.47% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Cash Flow | $391.81M | $291.43M | +34.44% |
Investing Cash Flow | $466,000 | $-132.59M | +100.35% |
Financing Cash Flow | $-172.07M | $-409.76M | +58.01% |
Share Buybacks | $163.51M | $386.25M | -57.67% |
D&A | $31.43M | $23.98M | +31.04% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Margin | 9.7% | 8.8% | +0.84% |
Net Margin | 5.8% | — | — |
ROE | 1.6% | — | — |
ROA | 0.7% | — | — |
Current Ratio | $1.682 | — | — |
Debt to Equity | $1.337 | — | — |
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TTD reported Q1 FY2026 revenue of $688.9M, up 11.8% year-over-year, with operating income rising 22.4% to $66.6M. However, net income declined 21.1% to $40.0M due to a 27.4% surge in cost of revenue and non-operating headwinds, resulting in EPS of $0.08 versus $0.10 in the prior year.
TTD's net income dropped 21.1% YoY to $40.0M even as revenue grew 11.8%, primarily because cost of revenue surged 27.4% to $182.0M, compressing gross margins, and additional below-the-line charges further reduced bottom-line profitability. Operating income actually improved 22.4%, highlighting that the weakness was concentrated in cost of revenue and non-operating items.
TTD ended Q1 FY2026 with $878.4M in cash and equivalents, down 21.5% YoY, partly due to $163.5M in share buybacks. The current ratio of 1.68x indicates adequate short-term liquidity, though rising total liabilities (up 9.8% YoY to $3.28B) and a debt-to-equity ratio of 1.34x warrant monitoring.
TTD repurchased $163.5M worth of shares in Q1 FY2026, a significant reduction from $386.3M in buybacks in the prior year period (down 57.7% YoY). Despite the lower buyback activity, the company's cash balance still declined 21.5% YoY to $878.4M.
The most significant financial risk evident in TTD's Q1 FY2026 data is the rapid escalation of cost of revenue (up 27.4% YoY), which is outpacing revenue growth (11.8%) and compressing profitability. Additionally, rising total liabilities (up 9.8% to $3.28B) combined with declining stockholders' equity (down 9.7% to $2.45B) are increasing the company's financial leverage.