Some questions for the TTD experts

With all the enthusiasm for the Trade Desk I decided to take another look with the idea of perhaps taking a position. I am still thinking about it but I have some questions for you experts.

First, the percent revenue increases for 2015, 2016, and 2017, were:


Does that sequence bother anyone?

Second, for the first two quarters this year the increase in revenue was 56% but the increase in EPS was only 34%, which seems like negative leverage rather than positive leverage. Any explanations?

Third, the 15% increase in EPS this quarter from 52 cents to 60 cents is the smallest percentage increase that I could find for this company… ever!!! (At least going back three years worth of quarterly reports). This was with a 54% increase in revenue. What’s going on?

Fourth, aside from a bunch of SaaS stocks having big rises early in the week, what made this company jump $35 after earnings? Were expectations that low? I’m having trouble figuring this out. I know they are a good company but why the big rise following a quarter when the revenue growth fell sequentially from 61% to 54%, and was flat with the year before, where the EPS growth dropped from 89% to 15% sequentially, and from 125% to 15% year over year! (No misprint). Where was the blow-out quarter? Management was enthusiastic, but they always have been. No change. Some small increases in guidance. To be expected. Please someone explain to me what I’m missing. I actually am disappointed because I wanted to like this company and find some reason to jump in. I guess the enthusiasm was contagious.




TMF public article on why TTD rose so much:…

Expectations were for $103 million in revenue and earnings of $0.44/share
Revenue came in at $112.3 million in revenue, and earnings of $0.60/share

Also of note:

Mobile sales jumped 89% year over year, connected-TV spending more than doubled, and audio channel sales almost tripled. The company also maintained customer retention rates of over 95% for the 18th straight quarter.

That was the beat. Here’s the raise:

Expectations for Q3 were $109 million in revenue, but TTD expects $116 million. They also raised expectations for the fiscal year.

In the end, this was another straightforward beat-and-raise scenario for The Trade Desk. Given the extent of that beat – with earnings outpacing consensus estimates by nearly 40% – it’s hardly surprising to see the stock responding in kind.


Hi smorgasbord,

With a company that always beat prior years earnings by a country mile, why were “expectations” that they would only make 44 cents when they made 52 cents the year before? They’ve NEVER made less than the year before!!! That had to be so much sandbagging that no one could have taken it seriously. Beating that doesn’t make a blowout quarter.

And “expectations” of $103 million would have been growth of revenue of 41%. They’ve NEVER had growth as low as 41%, again… ever. (At least in the last three years I looked at). Beating that doesn’t make a blowout quarter either.

Sorry, I still don’t get it. Beating ridiculously low targets is just kind of silly.




Off of the top of my head…

On ‘slowing’ revenue growth, this quarter grew at 54% which was exactly the same as Q2 2017. They are guiding to “at least” 48% growth for the year and Jeff Green now notoriously beats his guidance. Last year saw growth of 52%. We may see a very minor slow down or equal to last year’s growth or even a bit higher. The growth seems to be leveling off a bit, but if they can maintain this level of growth, the future is very bright.

On leverage in the business model, TTD is clearly forgoing earnings in order to land more business. They are investing heavily in offices throughout the world and are likely increasing their spend on obtaining data. Asia is a huge growth area with the big focus being China. However, China is still 5 years away from where the US is today according to Green.
40% of their engineering spend over the past two years has been directed toward their “Next Wave” project released last month. That is a complete overhaul of their system that appears to put them light years ahead of everyone else in the market widening the moat.

The big growth areas are Asia and Connected TV. Connected TV grew 22,000% (21x) last quarter. It double sequentially this quarter. We don’t know what that means in terms of a total revenue number and certainly it is off of a very small base. CTV is a complete green field for the company. Something like $250B is spent on television advertisements annually. There is lots of room for growth and no walled gardens.

I may come back to your post with a few other thoughts or more specifics. That’s it for now.
Good questions.




I believe others will provide better reasons soon, but I believe it is because some of its newer revenue streams are growing so fast. I do not own TTD and do not follow it too closely, but this is how it seemed to me when I was looking at the company earlier this week. For instance:

Growth at The Trade Desk was broad-based, and the company offered numerous reasons for its continued outsized growth. Key channels like mobile, video, and connected TV grew as advertisers continued the migration from traditional channels and managed their digital ad campaigns on The Trade Desk’s platform.

Advertiser spending on mobile, which includes in-app, video, and web, grew 89% year over year. Spending on connected TVs, which expanded more than 2,000% year over year last quarter, more than doubled from those levels in the current quarter. Audio grew 156% compared to the prior-year quarter. Mobile in-app spending climbed 104% and mobile video jumped 156%. The company also boasted a customer retention rate of 95% for the 19th consecutive quarter.


Just my thoughts and, again, I do not follow this company closely and barely grasp the business model.

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Thanks guys, that helps explain things and sets my mind somewhat at ease. I can understand spending on growth and international expansion, and new revenue streams just starting out but growing rapidly. That makes more sense than beating ridiculously low expectations. I guess I wanted to know why the expectations were so incredibly low. I guess I need to read some more now. I still have a lot of apprehension about getting into an advertising stock, but I’ll keep an open mind.



I think this is another hidden-growth stock. As crazy as that sounds up 40% or so this week and 178% YTD.

At the end of June, they released “The Next Wave” which they had been developing for two full years. I think this explains their mediocre EPS growth and drop in rev growth (although still impressive).

This is the game changer for me and what I think gives TTD a moat and will lead to prolonged 50%+ revenue growth.

They also plan to shorten their development and update cycles to be responsive to user needs and industry changes now that they have the back bone of the new platform.

Here’s some info from their conference call.

“range of new products that will help advertisers use data-driven insights to plan, forecast, and buy digital media more effectively than ever before.”

“three transformative products:
Koa™ is powerful AI that improves advertisers’ decisioning and accelerates campaign performance. Koa™’s robust and transparent forecasting engine is built on The Trade Desk’s valuable data set – including nearly nine million queries every second – to help buyers extend audience reach and spend more efficiently.
The Trade Desk Planner is a data-driven media planning tool that delivers audience insights and informs ad strategies across channels and devices.
Megagon™ is an intuitive new user interface that proactively surfaces tailored insights and offers Koa™ recommendations to help advertisers make real-time optimization decisions. Megagon™ helps buyers save time and advertising budget without sacrificing transparency and control.”

Furthermore, I like TTD as an objective partner in both the best interests of advertisers and consumers. They don’t own the platform or the products being advertised (major difference than Facebook, Google, etc)

I think with the growing tension around data privacy these companies will rely on TTD more and more.

I also like that they don’t collect personally identifiable data like FB and Google have in the past which protects consumers.


Link to a video of founder Jeff Green introducing the Next Wave product in Singapore…he does a better job explaining it than me.…


Okay last post. I’m going to ask Bert to do a deep dive on TTD


Hi Saul

There are two articles I will link to that might help explain some of the enthusiasm for TTD

Both well written imho…

Don’t Trade The Trade Desk: Just Buy And Hold - High Growth, Capital-Light, Compounder $TTD, $FB, $GOOG, $GOOGL

But for me the summary is:

A leader in a fast growing market with strong tailwinds.

A structural advantage in terms of privacy vs FB and Google

Quality management with a real depth of experience and insights. Jeff Green has no need to sell the company as he has I presume a good deal of personal wealth from previous experience in ad tech…

An established base in Asia where a large component of the next decade of growth will be driven

Early profitability despite still being in growth mode. This should add a premium to the P/S, given the 50% rate of growth but previously hasn’t.

In terms of the price movement, the company is generally very heavily shorted, which worked well Q3 2017 when guidance wasn’t raised and sentiment was swiftly negative but has otherwise been a fool’s errand. Some of the pop is short covering, but it has shown remarkable strength post pop in May 2018.


Just a few more numbers regarding profitability.

OpEx grew 62% against 54% sales growth so that is certainly a big part of the lack of leverage for the quarter.

Tax impact was quite a bit different from last year as well. On GAAP basis taxes had a 12.7 cent negative impact compared to last year. On a Non-GAAP basis taxes negatively impacted earnings to the tune of 15.7 cents. However, stock based compensation had a positive impact to Non-GAAP EPS of 10.4 cents.

Not sure what guidance the company gives on taxes and don’t know if last year was an outlier. They were profitable, but only paid a very small amount in taxes.

As one poster pointed out, stock based compensation did rise rapidly this quarter at 121%.

On the spending, the four segments the company reports on increased 75% (Platform Ops), 46% (S&M), 60% (Tech & Dev), 66% (G&A). Over time, we will need to monitor spending, but I believe it is safe to assume Jeff Green has a good grasp on leverage in the future. He has not been shy on ignoring short term profitability growth.

The real question is can TTD keep up their current growth rate. Jeff Green whom I have more and more faith in as a CEO everyday at least believes they can for the next 6 months. He will more than likely beat his estimates.

***Correction from an earlier post. Last quarter CTV grew 2,000% or 21X (not 22,000% as I wrote before). ***




Second, for the first two quarters this year the increase in revenue was 56% but the increase in EPS was only 34%, which seems like negative leverage rather than positive leverage. Any explanations?

Third, the 15% increase in EPS this quarter from 52 cents to 60 cents is the smallest percentage increase that I could find for this company… ever!!! (At least going back three years worth of quarterly reports). This was with a 54% increase in revenue. What’s going on?

When I had first invested in the company (more than a year back I think), I had come across interview of Jeff Greene where he had addressed this point and explained his philosophy. I don’t have that link handy, but the answer was something like this:

  1. Ad Tech has an extremely bad reputation with Wall street, after number of promising high fliers like tube mogul and Rocket Fuel had crashed. Also it is a very tough neighborhood with likes of google and Facebook invested in it. I think you appreciate both the points and so do I.
  2. To overcome the skepticism, they had decided early on they want to prove profitability early in the game unlike other cloud Sass companies.
  3. After proving the profitability point, they will plow back all the money back to grow the business as fast as they could.

I think this is exactly what he is doing. So this point does not concern me.

On the slowing growth rate: I for one believe the growth rates will again increase. I see two major drivers:

  1. Transition of TV from linear to programmatic: Currently most of the programmatic dollars are still tied to internet (mobile or desktop) and TV and other channels are tiny portion of programmatic. The transition of TV from linear to programmatic will be a one time non linear event which will happen over the next few years.

  2. Trade Desk has a very real chance of emerging as the data hub of consumer spending habits outside of the walled gardens of giants like FB, google and Amazon. Think of it number of small but important websites/platform have a ton of data. This include twitter, dataing sites, credit card, telecom providers, credit cards, individual brands etc. Data for each of this is more valuable if it is polled together by a neutral third party. If Trade desk emerges as the neutral platform where the likes of Twitter license and others their data to publishers, it can be huge. This is what Jeff Greene is attempting and I think he has a very real shot of being successful.

Due to time constraints, I post infrequently on the board and this is my probably my first post on Trade Desk. But I am very bullish on Trade desk, despite the challenges it faces. Jeff Greene comes across as one of the most astute strategist. Trade Desk has succeeded so far where others have perished in no small measure because of some very smart positioning by Jeff Greene.

In some ways it also reminds me of early Netflix. Too many, me included, never believed Netflix will make it so far given it was a industry dominated by giants. So many big players could have done what Netflix did, but they never did it. And when they are doing it finally Netflix is already a giant. Similarly there is very high skepticism that Trade Desk will go all the way with the likes of Google and FB in the game, which had depressed the price. The fast rise is fucntion of growing recognition they can thrive despite the challenges.



I sure you are aware that often look for information that reinforces our pre determined decisions

May I present to you a series of annual revenues since 2014 in 2 companies.

$132M $86M $54M $38M

$308M $203M $113 $45M

The first company is AYX
The second is TTD

There are many valid reasons why you might not want to own TTD, but the revenue growth concerns is not a strong one at this stage, in my opinion.


FWIW, your comment about Netflix reminded me that David Wells, CFO of Netflix, is on TTD’s board.

Gokul Rajaram, Caviar Lead for Square, is also on TTD’s board.

Bet the jockey, not the horse.

Long TTD, NFLX, and PYPL not SQ


Hey there !

Like Saul, I don’t see good, solid, numbers. Growth, OK, but low expectations which are easy to beat … ??

The charts show the share price jump starting in April. Was this on “I expect,” or “should,” or “I believe” or “looks like” ??

I’m thinking this might become a “darling stock” by those who don’t really know the company. And this jump starting in April could be because of those who don’t want to miss out on the next big mover.

Thanx to those with explanations, but I still just don’t see it.

Rich (haywool) no position in TTD


I have spent some time looking at the TTD numbers. Admittedly, I have more work to do. But, I must say that the revenue numbers and revenue growth are a bit puzzling. Here is what I am wrestling with. The company grew revenues 54% from 2Q2017 to 2Q2018. Here is what we know from the company. 45% of gross spend (not the same as revenue) for the quarter was mobile; it grew 89%.
Connected TV doubled from 1Q2018 (Feels a bit slippery. Why not tell us the increase from 2Q2017)
Audio grew 191%
Mobile video grew 156%
Mobile in-app grew 104% (Hmmm…mobile in-app, video and web grew 89%-How to reconcile this with the 104%)
Spend on cross device grew nearly 100%
International grew 85%

Here is the question, what grew substantially less than 50% to result in revenue growth of 54%? I don’t know. I haven’t found yet that the company provides the information to answer this question.

Very long TTD.



To my knowledge, the company has neither disclosed nor differentiated between any of the revenue streams you listed above. Therefore, we can’t truly know what they mean in terms of absolute numbers nor against revenues. We seem to have to trust Green in this regard.

Recall the traditional forms of programmatic adversiting are growing at a far slower pace than TTD. Those revenues (traditional adtech) could still be a substantial portion of overall revenue. Possibly traditional adtech pays more than the other revenue streams while TTD proves out the ROI.

You could continually play with the inputs assuming current revenues by segment along with historical growth rates. That would get quite tedious I’d think.

Unfortunately, much of this does seem to boil down to trust in Jeff Green.
I wish that wasn’t the case.

He has certainly proven himself thus far as a CEO. The company has been profitable since 2013. They appear to be singular in their space, have the know how and have gathered the data.


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Hi Treepak,

Good questions to ask. I see two specific questions there.

  1. Mobile grew 89% but mobile video grew 156% and mobile in-app grew 104%. How does that reconcile to 89%?

  2. Total revenue growth was 54%, yet the company quoted complete knock-out numbers way above 54% in what looks like every channel.

As Phoolio states, unfortunately they don’t break-down their revenue for us, but I believe with some assumptions and back-of-the-napkin maths, we can reveal some hidden growth.

  1. The missing channel here is mobile-web.
Mobile Growth	89
Mobile Video	156
Mobile In-app	104
Mobile Web	???

If you assume all 3 revenue streams are/were equal in $$ value, mobile web growth rate would be 3%. Quite possibly, revenue from mobile web is less that the other two, and thus may actually be negative growth. This is highly likely as in the past year we’ve seen a large increase in ad-blockers usage.

  1. From the conference call:
    Next, I want to focus on our omnichannel presence. It’s no surprise that nearly all of us use multiple internet-connected devices each day. One of our fundamental beliefs is that programmatic advertising should reflect this fact - to be successful in programmatic advertising, marketers need to coordinate their messaging across multiple channels.

In Q2, we continued to see marketers advertise across more channels than ever before, which include mobile, video, connected TV, audio, native, and display. In Q2, our customers using at least six of these channels increased by 156% versus the same quarter a year ago.

So we’re missing the growth rates of native and display. Remember display is the old-school, dated, dieing banner ads on web pages. We don’t know, but potentially this is currently a large but stagnant or decreasing revenue stream, and hence the cause of the total growth only being 54%.
Perhaps there’s a similar story with mobile display ads - the $$$ spent on traditional web/desktop banner ads is decreasing. With better internet access and 4g networks, more music and video is consumed/streamed, hence it’s reasonable to assume advertisers are directing their budget in the same direction as content is consumed.

The question to ask, is how can we tease this information out to decide whether TTD is sitting on some hidden growth like TWLO and NTNX were. Jeff Green as often said growth won’t be linear. Now will that be 54% as the low and we can have quarters of hyper growth? Or is this 54% a high and we’ll have periods of slower growth?

I sold my shares in January but have since been steadily adding after the amazing Q1 results. Didn’t price anchor then! I really like TTD thanks to the fantastic input from others here. I also consider it a play for China.


Here is my concern the labor force for TTD went from 339 employees in Jan 16 to 713 this month. I would think that may explain the stock based compensation rise and the G&A increase.

“On the spending, the four segments the company reports on increased 75% (Platform Ops), 46% (S&M), 60% (Tech & Dev), 66% (G&A).”

But if G&A continues to increase at that rate I’d be concern about the business model being too labor intensive in order to increase profits. Then again this labor increase may be to deal with international expansion, in which case I would think the G& A increase would level off soon.

Mr. Green has done a great job in operating off of equity capital only in the past and has managed to eliminate all corporate debt.

I’m holding off on dipping my toe in the water until I’m sure the rate increase in G&A is reduced.


Here is the question, what grew substantially less than 50% to result in revenue growth of 54%? I don’t know. I haven’t found yet that the company provides the information to answer this question.

Reading the numbers is key, but cant give you context. All of these questions i am seeing in this thread havw been asked by analysts on ER Q&A CC transcripts which are readily available.

There are also very long interviews out there, such as TMF with ceo jeff green in Dec (9 months ago).

Green has been incredibly consistent in his goals and messaging.

Programmatic is new and emerging and a mammoth wave of TAM entering the approx $1T global ad market.

So what has TTD done revenue on in previous years? Think about you own work/life computing experiences and/or how ads tied to online have changed.

Old way:
Desktops and “display ads” and banner ads. Ads basically tied to a website that all visitors see, regardless of the interests of the visitors.

Really old way:
Tv ads. Newspaper ads. The mail. Radio ads. Billboards. Magazine ads. Etc… (Aka not digital and/or not bought on a digital ad exchange)

New way:
Using anonymized digital identifiers, “programmatic” and digital-based ads. Such as Digital Audio (you have a Spotify account…they can track what you like personally vs being one of 3m in a car in greater chicagoland). You know how Google shows you news feeds tailored to your interests almost magically? Same sort of thing here with CTV (think Hulu or any Netflix-type service that streams and runs ads).

Mobile has grown to be the biggest rev segment, and yet CTV is expected to be even bigger. So the piece shrinking is the legacy desktop/display type stuff.

Ok. So then realize that TTD has survived and thrived and is now the largest independent DSP out there (barrier to entry / moat). They have been profitable and growing fast in the past mainly on the desktop/display stuff.

Now the massive shift to programmatic is well underway and they are benefitting feom that tailwind.

This is akin to the hidden growth stories this board seems to love so much.

Desktop display = Uber for Twilio. It was good business while it lasted but it is going away and total revenue growth is a mixed of booming programmatic + declining desktop display.

Hope that makes sense.

As for profit, i have to laugh given so many Saul stocks are unprofitable. So this is somehow a bad thing. Another poster earlier correctly nailed the reason, which is also in the CC transcriots and TMF interview: prior to IPO, other DSPs had struggled and Green wanted to prove they were well-run and could easily turn a profit (if that was the goal). He has since stated they will focus on market share (increasing moat and barrier to entry) and that it is “land grab” time.

Gotta run.

Find another company with massive TAM/tailwinds that already does over $300m/yr and is onpace for over $450m/yr, growing 50%+ y/y and are led by dynamic founder/ceo.

Yes…there are risks. Just like in any stock.