TLRA - A Pre-Saul Company with High-Upside

As like many on the boards, my portfolio is off to the best start in the 10 years that I have managed it. With TTD’s recent explosion, I am now up 71% this year. Yes, 71% in 4.5 months. This involves a 10-20% ultra-aggressive portion of my portfolio which includes options on arbitrage or short-term plays, and sometimes non-Saul cash-flow plays like KORS, FOSL, KMI, and now SKX. These returns are absolutely crazy to me, and we will certainly hit a rough patch at some point, but for now I’m smiling ear-to-ear.

After writing my first post on this board 10 days ago, and thanking Saul, I quickly realized that every time we ONLY thank Saul (who certainly deserves an insane amount of credit), we do a minor disservice to what is being created here by others. Yes, it is Saul’s methodology and board, but to me this community has become much bigger than Saul. There are so many great contributors. So to everyone, thank you. And that is probably Saul’s greatest investment legacy – not his returns, but that he has created a pond and used it to teach an entire community How To Fish.

On to the investment idea…

Before I go into TLRA, let me add a few notes: 1) This is not necessarily a Saul stock. I would consider it a pre-Saul stock. It’s market cap is only $218m, with an EV under $150m (backing out $72m in cash). Thus, liquidity will be an issue for those with larger portfolios. 2) I have only taken a starter position (2-3% with avg. cost at $4.13). I tend to do so to learn more about interesting opportunities. 3) I am not an ad-tech expert. I have some business experience at a very high-level (from a data perspective), and have a few ad-tech friends, so if there are any ad-tech experts on the board please chime in from a technical or sector standpoint. Also, apologies if I butchered any of the explanations. 4) I came across this company’s name in late 2017 at a networking dinner, and have followed it casually ever since. I’ve also seen it referenced while researching TTD. And lastly, I believe DreamerDad has mentioned this stock a few times recently. 5) This is a test-out position for me, and I could sell at any time. This is not a high-conviction trading position (like FOSL, KORS, KMI, and CMG have been recently for 6-12 month trades). I am currently building a higher-conviction trade in SKX (avg. options range around $28), and hope to post more about that in a week or so on the SKX board. So please view the below “analysis” in that context.

TLRA Summary:
As you will see, TLRA has a lot of the components of a great opportunity; 1) 30%+ revenue growth for next 3+ years, 2) EBIDTA positive, 3) low/reasonable valuation, 4) over-looked, and 5) riding a huge secular wave.

Telaria (TLRA), formerly Tremor Video, sold it’s buy-side business for $50m in August 2017, and changed its name and ticker in Sept 2017 (links in notes below). The name Telaria is a “derivation of the Greek Talaria, which are the winged sandals that carried Hermes, the messenger of the gods, through space. It reflects our belief that advertising technology needs to be fast and frictionless in order to lift our clients towards their goals.”

Telaria is a software company that has created a platform for premium publishers to unlock the fullest value of their video content. Tremor Video was formerly focused on the buy-side, where Telaria now is exclusively focused on the sell-side. Think of them working with Hulu, Warner Brothers, Fox, BBC, etc. to maximize the value of their ad space, and selling those spaces to DSPs (demand-side) and agencies, like the Trade Desk. To simplify even further (and yes, I know there is more nuance here), TLRA has created a technology platform to SELL digital ad spaces for publishers, whereas TTD is a platform to BUY ads for agencies/advertisers.

Telaria also claims to be the only independent self-side video platform at scale, which gives them a competitive advantage in the market. In terms of clientele, they work with 90 of COMSCORE’s top 100 publishers, and sport a 95% retention rate among buyers/sellers. So obviously companies are finding value in their platform and value proposition.

Sector Trends:
As evidenced from TTD’s recent earnings report surprise, the ad-tech trends are pretty staggering. Here are a few examples from a recent TLRA’s website: 1) Global growth in video ad spend is projected to be 77% over the next two years, 2) there is a 43% higher CPM (click per thousand impressions) for Connected TV (CTV) inventory, and 3) there was a 93% YOY increase in CTV ad impressions.

How does all this affect TLRA? Well, basically people are ditching traditional cable and switching to Connected TV or Over The Top (OTT) video. This is driving more eyeballs, and thus ads, to CTV and OTT. It is projected by 2019 that there will be more digital than linear media consumption.

But at the end of the day, all you really need to know is that if TLRA continues adding value to publishers, the more CTV and OTT video is consumed, the more programmatic ads that are created, and the better TLRA will do, as TLRA is paid on each transaction.

They estimate that they are playing in a $250B future global opportunity.

Growth Engines:
Telaria has three strategic pillars going forward: 1) Expanding functionality of video platform technology, 2) focusing only on premium content partners, and 3) CTV (Connected TV)

But for the purpose of this investment, the growth is heavily reliant on growing CTV trends, which I don’t see slowing down anytime soon. CTV revenue has gone from <4% of the TLRA’s revenue in Q1 2017 (approx $250k) to 20+% in Q1 2018 (approx. $2m). Granted it is a small base, but that is a 700% increase YOY. And it continues to accelerate, as the CEO mentioned it was 25% of TLRA’s revenue in March. That is crazy growth, with no signs of slowing down. In addition to the growth, CTV has improving economics, namely that CPM (cost per thousand impressions) has consistently increased the last 8 quarters. So essentially, they are taking market share, they are making more and more money per ad, and the sector is growing rapidly.

Competitors and Market Share:
From CEO Mark Zagorski on the Q1 2018 conference call, “based on our year-over-year growth of 56% and looking at some of the other comps in the marketplace, I think we can fairly say that we’re ahead of the pace and where our competitors are in growing with this space. When you look at the growth of our – the share of our revenue that’s coming from CTV, more than quadrupling from year-over-year. I think with the decent amount of confidence that we can say that we’re outpacing our competitors as far as our growth in this space, and we have got some nice tailwinds just by the systematic trends that are going on.”

Also, from Mark, “We’re in a sell-side position, where there’s not a significant amount of competition. We have a really strong, defensive moat through our technology platform.”

TLRA has grown pretty meaningfully in the last 3 years. Revenues (from the sell-side platform) have gone from $9.6m in 2015, to $29.1m in 2016, to $43.8m (51% YOY) in 2017 to a projected $58-62m in 2018 (would be 37% at the midpoint). Gross margins are even more impressive, at 90%+ for the last two years. Also, they are projecting to be EBITDA positive in 2018 for the first time. Their adjusted EBITDA was -$6.5m in 2017, and they are projecting a positive $5-8m EBITDA for 2018.

TLRA’s current market cap is $218m, and after backing out $73m of cash, we get am EV of $145m. With projected sales of $60m at the mid-point, we have an EV/S of 2.4 (pretty cheap for 56% growth in the most recent quarter). Also, they have a forward EV/EBITDA of only 22. TLRA is a growth company, so EV/EBITDA isn’t a great metric, but wanted to emphasize the point that they are relatively fairly (or undervalued).

Also, I would never count on an acquisition, but TLRA is a prime candidate to be acquired in the next 1-2 years. I tend to give slightly more upside to my evaluations for these types of situations.

It’s important to repeat, this is not a pound the table or back up the truck situation. Far from it. This is a pre-Saul stock, which is riding an undeniable secular wave, with good technology, an extremely reasonable valuation, 30%+ growth for the next few years, high-acquisition likelihood, and solid financials. It is certainly worth adding to a watch list, or taking a small test-position, but I don’t recommend going overboard with this stock. And if you’re interested in learning more, I definitely recommend reading the links below, specifically the recent conference presentation.

Good luck to all,

P.S. Hopefully more on SKX in a week or so.

Links to Recent Events:

5/8/2018 – Recent Suntrust Conference Presentation:…

9/26/17 - Tremor Rebrands Itself as Telaria:…

9/7/2017 – Deeper Integration with TTD:…

8/23/2017 – Interview with CEO Mark Zagorski:

8/7/2017 – Tremor Video sells its demand-side business to Taptica for $50m:…


Consider me intrigued, for sure. As a newer investor with a smaller portfolio, the small market cap makes me more interested rather than needing to stay away.

Also, having cashed in some 20x+ gains on some TTD call options and being a big “ad-supported connected TV” bill, I feel obligated to take a close look…and those EV/S and EV/EBITDA ratios…shew. As the poster of this EV/FCF thread, I am a big fan of looking at EV rather than market cap for evaluating whether shares are nicely valued (thanks to having some good experience investing in Apple and their incredible net cash position, particularly).

Gonna take a look at TLRA in the near future… maybe even with a view towards a starter position (1% or maybe less) next week

Great job here…nothing to add except the obvious which is TTD’s success will open some eyes and the market may look for stocks that are in the ctv space and TLRA may benefit as result.

Roku getting some positive press in recent months in similar fashion.

With Disney/Fox, ATT/TW deals being really about content for ctv/streaming, you can see the industry is going this way. Netflix, iQiyi, CBS streaming star trek episodes, Amazon Video, Hulu, SlingTV…lots of momentum building up.

They have bigger y/y compares for rest of year…if they maintain a 50% rev growth rate, it strengthens the bull thesis.

CTV was 25% of total rev in march. In Q1 last year it was only 4%. So the key market focus on CTV is trending in right direction. TTD saw CTV growth of 2100%. TTD is a partner of TLRA…not competitor.

When you look at slides from recent presentations it feels like TLRA CEO is taking cues from Jeff Green at TTD…messaging and focus seem similar, which is a good thing for TLRA.



Hi Stephen,

What a great post. Thanks for sharing your idea with us.

I am wondering if you could shed some lights on how to use options on arbitrage. Thanks.


Hi Alex, but sorry, this isn’t a board for discussions of how to use options on arbitrage. There are MF options boards though, or you could discuss it off board.





I am wondering if you could shed some lights on how to use options on arbitrage.

Hi Alex, but sorry, this isn’t a board for discussions of how to use options on arbitrage. There are MF options boards though, or you could discuss it off board.




Hi Alex,

To Saul’s point, I won’t go into details on this board.

Suffice to say, I’m not doing anything too complicated or unique. Just leveraging up using options on cash-flow rich companies that are clearly mis-priced in the short-term (e.g. FOSL 6 months ago).

Said another way, I’m using 10-20% of my portfolio to combine two of Buffet’s famous concepts: 1) Mr. Market is irrational and 2) be greedy when other’s are fearful.


1 Like

Hi Alex, but sorry, this isn’t a board for discussions of how to use options on arbitrage. There are MF options boards though, or you could discuss it off board.

Hi Saul,

I am really sorry for asking options questions on the board. The major reason for asking this question is that I felt that Stephen’s definition on options arbitrage may be different from what I have learned. And it is based on Stephen’s reply to my post. I will reply to Stephen to clarify my point with email.

I sincerely apologize for my inappropriate posts. It is an amazing post from Stephen. Thanks again for sharing your idea with us, Stephen. Look forward to more posts and ideas from you.


Hi Stephen,

Nice writeup. I find one concern that really stands out for me.

they work with 90 of COMSCORE’s top 100 publishers, and sport a 95% retention rate among buyers/sellers.

If by “work with” you mean 90% of the top publishers are already paying customers, then:

  1. This is the highest success rate I’ve heard of in a long time, and doesn’t sound much like a typical
  2. They will have to continue near this rate with new customers to hit their goals.
  3. Sales expense is not likely to decrease any time soon and will likely increase.
  4. Unless the industry is in its infancy (I’m not following it) how large can the TAM be if they already
    are working with 90% of the heaviest hitters but have ~$60m of revenue?
  5. Much of the value must be attributed to conversion of future industry newcomers to their platform,
    never a sure thing.
  6. The market seldom lets numbers like these get away without new and increased competition, (but that’s
    true for all highly successful startups.)

None of these indicate that this can’t be a good investment, but to me suggest that maybe there are many
moving parts to keep a close eye on in the near future. As I mentioned, I am not following the industry
so perhaps I’m missing perspective.

Thanks for bringing up a new company.



Marketing budgets for ctv are exploding, but off small base.

A common number thrown around last year was that only 3% of global $700b in ad spend was in programattic, and ctv is a subset of that.

The expectation is the industy will move to majority of spend in programmatic. That is a mammoth shift within ad budgets.

This is leveraging data to better target your buying audience. So moving away from newspapers and radio and cable tv to mobile (digital), digital audio, streaming video/ctv, etc…

So biggest growth can come within SOW (share-of-wallet) of existing customers in many cases. This statement can be applied to TTD and TLRA, although TLRA is more specifically focused on ctv, which is the youngest of the programmatic segments, but also growing the fastest.



Hi Dan,

Thanks for raising a few potential concerns. I find it really helpful for people to poke holes in investment ideas, so we can all determine a more accurate risk/reward profile.

DreamerDad hit most of the main points, but a few follow-ups:

  • The 90 out of top 100 publishers comes from their latest presentation. If you haven’t already, I highly recommend reading slides 4-6. It really helps explain a complex industry/market position/opportunity:…

  • Re: their client base of 90 of top 100, they spoke about this at length in their recent conference call. One of their three top strategic priorities, is going “deeper” with “premium” clients vs. prioritizing quantity of new clients (like other SAAS companies). Given the industry, I think this makes sense. Just think about the concentration of media publishers. Also, the early stage of Connected TV (CTV). Take Disney for example, they are one of the largest, forward-thinking content providers in the world. And they don’t currently have a pay/OTT offering yet. That’s how early CTV/OTT is. So for TLRA, it makes much more sense to try and sell more and more ads with the Disney’s, Hulu’s, and Fox’s, then go after smaller companies.

  • TLRA lists their TAM at $250B (slide 5). I’ve seen TTD say $700B, which I believe is total advertising space. Either way, it’s really, really, really big. And programmatic advertising is in the 1st inning. Just think about the shift from print to digital advertising. The shift takes a long, long time. And to be more accurate, TLRA is in the middle of TWO huge shifts: 1) direct digital ad buying to programatic and 2) linear TV to Connected TV. Both trends are in the early innings, and will undeniably grow for the next decade. The main question for TLRA is, will they be the winners on the sell-side of programatic advertising…

I believe they are in a great position to grow fast or be acquired. But again, this is a test out position for me, so my confidence is not as high as others. And as always, please do your own due diligence.



Great job here…nothing to add except the obvious which is TTD’s success will open some eyes and the market may look for stocks that are in the ctv space and TLRA may benefit as result.

Interesting to note that TLRA hit a 52 week high today and is up 150% from its October low.