TTD - Some questions for investors

Many on this board have a position in TTD.

I’m currently evaluating this company and can’t seem to understand the following aspects of TTD’s business -

a. Does TTD deal only with ad agencies because its claims that it is an enabler or does it also deal with the advertising companies directly? If it doesn’t deal direct with the advertising companies; isn’t it limiting its own market? If it does deal directly; then isn’t it going to upset the ad agencies?

b. Given that TTD charges 20% of the gross spend as its fees; why don’t the ad agencies go elsewhere; ask for a better deal or start their own proprietary programmatic ad buying platforms? Why pay TTD 20% of gross spend?

c. Does TTD disclose total customer count? If so, how many customers does it have? How many are ad. agencies and how many are advertising companies? Who is TTD’s biggest customer and what % of revenue comes from the top 10 customers?

d. Does TTD disclose whether customer count is rising or decreasing and if existing customers are spending more or less each year?

e. TTD’s CEO keeps stating that the total advertising spend will reach $1 trillion by 2027 and that eventually, all advertising will be digital and programmatic - does this imply that TTD’s TAM will be $1 trillion by 2027 (vs. just $2.35 billion gross spend in 2018)?

f. TTD’s CEO also says that the company is targeting all ad. inventory outside of Google and Facebook - can somebody please explain what this means?

g. Finally, any thoughts on TTD’s 3-5 year projected revenue and EPS CAGR?

TTD appears to be a big growth story but due to my lack of understanding, so far I haven’t invested and missed out on huge gains - credit to those who understood the story and grabbed shares before the stock went vertical!

I’ll be grateful if someone could please provide some clarity on the above points or if all this has been discussed already; direct me to the appropriate thread(s) on this board.

Thank you so much.




I’ve just reviewed TTD’s Investor Deck and found the answers to some of my questions.

In addition, I’ve found out that the programmatic ad. market will probably increase to $100 billion by 2027 (vs. around $27.6 billion in 2018).

Last year, TTD had a 8.5% market share of programmatic ad. buying (up from 3.9% in 2015) and for 2019, the company has projected 9.7% market share.

If we assume that TTD’s market share will grow to 17% by 2027; then in 9 years from now, the gross spend on its platform will be around $17 billion.

During the recent investor day presentation, Jeff Green stated that over the long-term, TTD’s take rate will be between 15-20%; so if we assume a 17% take rate by 2027; at that time, TTD’s revenue will be (17% of $17 billion) $2.89 billion.

The company’s long-term goal is to raise its operating margin to 35% and if we apply a generous 28% net profit margin (after accounting for tax) on $2.89 revenue; we get to a net profit of around $809 million by 2027-end.

Finally; if we apply a generous 35 P/E multiple on 2027 net profit; we get to a market cap of $28.32 billion (versus $9 billion today) which translates into 9-yr CAGR of 13.5%.

Please note that the above CAGR calculation hasn’t accounted for any dilution due to stock based compensation. For reference, at the end of 2014, TTD had 38.19 million o/s shares and at the end of last year, there were 45.79 million o/s shares (19.9% increase in share count in 4 years).




Hey GM,

Many of the answers to your questions can be found here: The Trade Desk Investor Day - Slideshow $TTD…

Specifically I recall them breaking out programmatic from the $1T in spend, new customers per year in CTV, expansion rates, and pitches on the business value prop for ad agencies (why they’d use TTD versus spending however much to do it themselves - I suspect they’ve always paid a premium to a middleman in the process btw…networks charge fees for placement, etc)

Here is a list of partners that TTD lists:

I’d try to parse answers further but I’m my phone. I think understanding TTD is an incredibly useful exercise so I hope you’ll follow up with what you interpret as the answers to the questions. Each time I dive into TTD,I come away with more conviction.

Just a Fool
Long TTD


Good questions GM. You’re much better at putting numbers and forecasts like that together than me.

I think those calculations are very self-limiting with innovative companies that are disrupting and creating new industries.

I have no idea what the P/E and P/S will be in the future.

All I know is I love management, they’ve proven to be very innovative, and judging by revenue growth, customer spend, customer retention and just about every other metric, their products and services are loved by customers.

I look at a $10B company and think okay this can easily be a $100B or $200B company some day and as long as the numbers keep trending in the right direction, they keep innovating, and management keeps proving themselves, I see no use in those types of calculations.

We had no idea what new products and revenue Amazon, Microsoft, Salesforce, Shopify, Square, and so many others had in store for the future 5 or 10 years ago, so any P/E or Revenue forecast would have been way way low.

Staying invested till the results change.


Nilvest, be careful. This is starting to come off as you advertising your own gig on TMF’s boards. That is not allowed.

Reporting your post.



Thanks for your comments.

If you believe that my analysis from the numbers/projections provided by the CEO/CTO (not dreamt up by me) is ‘self limiting’ and cannot be applied to ‘disruptive’ world changing companies, then that is fine.

Each person should do what they are comfortable with and my post wasn’t meant to scare others but to highlight potential returns.




I liked your analysis.

Would point out one thing.

The median hold time for a “Saul” stock is a great deal less than 8 years. In fact the hold time for a “Saul” investment metric is probably less than 8 years.


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On your numbers:
TTD has been growing at 250% that of the programmatic market. 50% vs 21% last year. It seems you are assuming that over the next 9 years programmatic will grow at a CAGR of around 16% while TTD rev will grow at 22% which is much lower. If one assumes TTD grows at 30% CAGR you get a higher #.
Green always says almost all advt. will grow programmatic. He projects total ad market at $1 T in 10y. Whatever the growth rate clearly it it has a long runway. Perhaps one of the largest TAMs of our companies.