Balanced, fair article thank you. I am long at 49 love this co. just for disclosure.
1- On SBC: Agree 20% is high for the average stock but avg cloud/software stock has 20% or more SBC so rather avg. for its sector and has trended down since a peak at 40% yrs ago. I am okay with it because the $1B buyback pgm mainly offsets dilution. Since cash flow growing annual buy backs seem in the cards now. Were you were aware of this at publication or perhaps you do not value its offset of SBC as much as I may?
2- On international, unless we are using different semantics the highest INTL % is 15-20% but last checked it was at 12-15% and this needle has not moved much since co. inception. CEO has been firm that the potential in USA alone is so big and profitable he won't lose focus here by spreading too thin. That being said Netflix is hitting stride and launching its ad-tier this year in EMEA so it will be material to $TTD in 2025 2H into 2026. My estimates are for it to add ~2% of revs 2025 and up to 12% in 2027. Also signed with some key Asian CTV providers as well. I was CMO of a large intl co. and USA was 40-50% of TAM and easy to attack as ad spend very centralized inside US and controlled to rest of world. Rest of world super fragmented so viscosity, effort, resources to get one $ in ad spend was 50X harder to capture.
So I see INTL purely as a cherry on top or an insurance plan in case US has some slowdown or other unforeseen issue they have the bases covered to turn it on. Your article definitely made me consider some new things. CEO risk is always a risk but in this case much more than usual so kudos for raising it. Jeff G. is THE digital guru and visionary of digital ads so we can count on him to never be caught off guard by anyone or anything but this is why it is also a risk. Thanks again and big respect.
Thanks for the nice words. Yes I was aware of the buybacks and considered it in my valuation. I had a conservative valuation and was lucky the stock price just came below, so I am in here for the long-run. I like your comment below on the ownership of content. This sets TTD apart from the rest. Agree with the CEO, and expect them to gain market share coming years.
1. What about the Ventura project? It's been three years in making? Isn't that important to be detailed in the report or there is insufficient details? I have just finished listening to the podcast (thank you) and ~ half of it is discussion around Ventura.
2. IMHO, management incentives (KPIs) are missing. Skin in the game is covered, although, I don't know how much of the 8.5% are options/grants that have vested (therefore at no cost to JG) and how much is public market buying (if any).
Thanks for your comment and questions! You are right, Ventura is a big talking point, and I’m glad you enjoyed the podcast! It’s The Trade Desk’s bold swing at a streaming TV operating system, now slated for 2025, and it’s tightly linked to their ecosystem plays like OpenPath and UID2, which I touch on in my article. OpenPath cuts supply chain fat for direct publisher deals, and UID2 sharpens identity tracking. Ventura aims to bake both into CTV at the OS level, potentially locking in advertisers and publishers even tighter.
I didn’t dive deep into Ventura in the report because, after three years, hard details are still thin. Rumors of a Sonos tie-up fizzled, and without a clear launch roadmap or revenue projections, it’s more speculative than the proven moat I focused on. Think DSP dominance and 25%+ revenue CAGR. That said, the Ventura hype isn’t misplaced. If it delivers, it could widen TTD’s lead in CTV, where ad spend’s already surpassing $30 billion yearly. Management’s 2027 revenue forecast might even bake in some Ventura upside, that's why I kept my model equal to their 2027 projections.
TTD doesn’t publicize exact metrics, but they’re likely tied to revenue, CTV growth, and margins, per earnings focus. They mention that their KPI's are long-term (10 years). On Jeff Green’s 8.5%, most is probably founder stock and vested grants (little to no cost), not market buys.
Thx for comment. In case you want response outside the author I offer my quick reply. $TTD moat vs. walled garden behemoths and "reason for being" is "independent". Once they owned content that wld be gone. CEO has promised they would never own content. The TV OS is content-neutral. So any merger/acquisition of ROKU or anyone "with content" would only occur if they spun off the content(Roku channel itself would need to be gone).
Balanced, fair article thank you. I am long at 49 love this co. just for disclosure.
1- On SBC: Agree 20% is high for the average stock but avg cloud/software stock has 20% or more SBC so rather avg. for its sector and has trended down since a peak at 40% yrs ago. I am okay with it because the $1B buyback pgm mainly offsets dilution. Since cash flow growing annual buy backs seem in the cards now. Were you were aware of this at publication or perhaps you do not value its offset of SBC as much as I may?
2- On international, unless we are using different semantics the highest INTL % is 15-20% but last checked it was at 12-15% and this needle has not moved much since co. inception. CEO has been firm that the potential in USA alone is so big and profitable he won't lose focus here by spreading too thin. That being said Netflix is hitting stride and launching its ad-tier this year in EMEA so it will be material to $TTD in 2025 2H into 2026. My estimates are for it to add ~2% of revs 2025 and up to 12% in 2027. Also signed with some key Asian CTV providers as well. I was CMO of a large intl co. and USA was 40-50% of TAM and easy to attack as ad spend very centralized inside US and controlled to rest of world. Rest of world super fragmented so viscosity, effort, resources to get one $ in ad spend was 50X harder to capture.
So I see INTL purely as a cherry on top or an insurance plan in case US has some slowdown or other unforeseen issue they have the bases covered to turn it on. Your article definitely made me consider some new things. CEO risk is always a risk but in this case much more than usual so kudos for raising it. Jeff G. is THE digital guru and visionary of digital ads so we can count on him to never be caught off guard by anyone or anything but this is why it is also a risk. Thanks again and big respect.
John D.
Thanks for the nice words. Yes I was aware of the buybacks and considered it in my valuation. I had a conservative valuation and was lucky the stock price just came below, so I am in here for the long-run. I like your comment below on the ownership of content. This sets TTD apart from the rest. Agree with the CEO, and expect them to gain market share coming years.
Thanks. Well done.
1. What about the Ventura project? It's been three years in making? Isn't that important to be detailed in the report or there is insufficient details? I have just finished listening to the podcast (thank you) and ~ half of it is discussion around Ventura.
2. IMHO, management incentives (KPIs) are missing. Skin in the game is covered, although, I don't know how much of the 8.5% are options/grants that have vested (therefore at no cost to JG) and how much is public market buying (if any).
Thanks for your comment and questions! You are right, Ventura is a big talking point, and I’m glad you enjoyed the podcast! It’s The Trade Desk’s bold swing at a streaming TV operating system, now slated for 2025, and it’s tightly linked to their ecosystem plays like OpenPath and UID2, which I touch on in my article. OpenPath cuts supply chain fat for direct publisher deals, and UID2 sharpens identity tracking. Ventura aims to bake both into CTV at the OS level, potentially locking in advertisers and publishers even tighter.
I didn’t dive deep into Ventura in the report because, after three years, hard details are still thin. Rumors of a Sonos tie-up fizzled, and without a clear launch roadmap or revenue projections, it’s more speculative than the proven moat I focused on. Think DSP dominance and 25%+ revenue CAGR. That said, the Ventura hype isn’t misplaced. If it delivers, it could widen TTD’s lead in CTV, where ad spend’s already surpassing $30 billion yearly. Management’s 2027 revenue forecast might even bake in some Ventura upside, that's why I kept my model equal to their 2027 projections.
TTD doesn’t publicize exact metrics, but they’re likely tied to revenue, CTV growth, and margins, per earnings focus. They mention that their KPI's are long-term (10 years). On Jeff Green’s 8.5%, most is probably founder stock and vested grants (little to no cost), not market buys.
Hope this helps!
Thank you. I read/heard a rumour (merging with or buying Roku). Ventura means it was just rumour. I don't know if you did.
This means they will go head to head with Roku and Android and other TV OS's :)
Thx for comment. In case you want response outside the author I offer my quick reply. $TTD moat vs. walled garden behemoths and "reason for being" is "independent". Once they owned content that wld be gone. CEO has promised they would never own content. The TV OS is content-neutral. So any merger/acquisition of ROKU or anyone "with content" would only occur if they spun off the content(Roku channel itself would need to be gone).