Trade Desk's stock is experiencing a significant surge leading up to tonight's earnings announcement. However, recent Form 4 filings reveal a notable story regarding executive stock options. CEO Jeffrey Green was granted options for 7 million shares in September, followed by a repricing of options for other C-suite executives in October. This move raises questions about executive compensation practices amidst the company's recent stock performance and upcoming financial report.
On September 14, 2026, Jeffrey Green, identified as a director, president, CEO, and 10% owner of Trade Desk, received employee stock options for 7,000,000 shares. The filing indicated a transaction price of $0.00, which is typical for a grant, though the strike price was not disclosed. Other senior executives also received stock awards on the same day. Specifically, CFO Nathan Olmstead was granted 398,262 Class A shares, Chief Legal Officer Jay Grant received 398,262 shares, COO Vivek Kundra obtained 724,112 shares, and Chief Accounting Officer Tahnil Davis secured 217,233 shares.
Subsequently, on October 19, Green, along with Olmstead, Kundra, Grant, and Davis, reported relinquishing existing option blocks and receiving equivalent new ones. Green's largest block involved 737,028 options. On the same day, shareholders approved the repricing of certain outstanding stock options for current service providers, including executive officers, at a special meeting. The Wall Street Journal covered this option adjustment on October 24. A key detail that has not received widespread attention is the substantial September grant to Green and its proximity to the impending earnings report. Both the initial grant and the subsequent repricing were decisions related to executive compensation, and notably, no executive purchased shares on the open market.
While executives benefited from option adjustments, external shareholders did not receive a similar reset for their losses. The stock has seen a considerable decline, falling 67.23% over the past year, 60.38% year-to-date, and 78.06% over five years. For context, a $10,000 investment in competitor AppLovin three years ago would now be worth $90,358, whereas the same investment in Trade Desk would be valued at $1,654. With a market capitalization of approximately $6.44 billion, the stock currently trades at about 13 times earnings, with a free cash flow yield of 14.32%.
Tonight's earnings report will be crucial for Trade Desk. Management projected third-quarter revenue of at least $650 million and adjusted EBITDA of around $160 million. These figures follow second-quarter results of $715.06 million in revenue and $241.28 million in adjusted EBITDA. Analysts are anticipating revenue of approximately $651.4 million and an EPS of $0.2539. This EPS estimate has seen a downward revision from $0.4979 ninety days ago, with 17 downward adjustments in the last month alone. Last quarter, adjusted EPS of $0.34 fell short of the $0.40 expectation. Analysts, as reported by Barron's on Monday, do not foresee earnings significantly improving Trade Desk's "lost year."
CFO Nathan Olmstead previously set modest expectations in August, stating that visibility was more limited than in the recent past and that no significant environmental improvement was anticipated for the quarter. Green commented at the time that while such challenging days are difficult, they make any potential recovery story more compelling. Investors will closely monitor whether revenue surpasses the $650 million benchmark and what the fourth-quarter outlook holds, with consensus estimates near $691.6 million. This report marks the first significant test since the executive option adjustments. Executives, with their new and repriced options, will only gain if the stock price improves from its current level, while ETF investors have already borne the full brunt of the stock's decline.
