TTD · 10-Q · 2026Q2 · Full report

Income Tax Rate Changes

Trade Desk, Inc. · 2026-08-06 · Importance 26 · Surprise 24 · In source text

The provision for income taxes increased $6 million in the second quarter and $19 million for the six months ended June 30, 2026. The six-month increase occurred despite lower pre-tax profitability because employee stock-based awards produced tax detriments rather than the tax benefits recorded in the prior-year period. The U.S. federal statutory tax rate remained 21% in both 2026 and 2025. Tax expense therefore increased primarily from stock-award-related items rather than a change in the statutory rate.

Key facts

• In June 2026, the State of California enacted Senate Bill 122 that, among other changes, extended annual limitations on research and development credits, which may limit or delay the realizability of deferred tax assets related to research and development credits in California. source
• Deferred tax assets related to California research and development credits, for tax return purposes, were approximately $37 million at June 30, 2026. source
• Provision for income taxes for the three months ended June 30, 2026: $48,697 (in thousands). source
• Provision for income taxes for the six months ended June 30, 2026: $87,658 (in thousands). source
• Provision for income taxes for the three months ended June 30, 2025: $43,072 (in thousands). source
• Provision for income taxes increased by $19 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. source
• Provision for income taxes for the six months ended June 30, 2025: $68,163 (in thousands). source
• As of June 30, 2026, no valuation allowance has been recorded against deferred tax assets relating to California research and development credits. source

Impact estimates