TTD · Research
The Agencies That Built The Trade Desk Are Now Auditing It
For a decade the big agency holding companies poured client budgets through The Trade Desk. In 2026 they started checking its fees instead.
Summary and thesis
The Trade Desk built the largest independent buy-side platform in digital advertising by serving the agencies that place budgets for the world's biggest brands. Agencies log in, run campaigns across the open internet, connected TV, audio and retail media, and pay a platform fee plus charges for data and value-added services.
In FY2025 that model handled $13,394.68M of gross spend and produced $2,896.28M of revenue, a take rate of 21.62%.
The thesis is simple and uncomfortable: the customers that built the franchise have become its auditors. Publicis Groupe stopped recommending the platform to clients in March 2026 after an audit it commissioned, Omnicom opened its own third-party pricing review a week later, and WPP and Dentsu are said to have quietly exited OpenPath over fees and transparency.
At the same time Amazon is selling a cheaper DSP with its own shopper data and premium streaming supply, YouTube leads connected TV viewing inside Google's walled garden, and Google is building tools that connect buyers and publishers directly.
The fundamentals have turned. Quarterly revenue growth fell from 25.40% in Q1 2025 to 3.03% in Q2 2026, and the Q3 2026 guide calls for revenue of at least $650M, 12.09% below the $739.43M of a year earlier.
Yet the valuation is not cheap on the cleanest cash measure. Excluding the working-capital release that a shrinking business throws off, owner cash over the last twelve months was $161.20M, and the enterprise value of $5,023.35M is 31.16x that figure.
At a 9% discount rate that implies 10.79% annual owner-cash growth for ten years.
No base value is set. Owner cash has been positive in only two years checked (FY2025 and the last twelve months), below the three positive years the method requires.
Business model and products
Products.
- Kokai: the current generation of the buying platform, rolled out from 2023 and adopted more slowly than planned in 2024. Management cites Kokai features and value-added services as a driver of higher pricing.
- OpenPath: a direct connection between the platform and publishers, launched in 2022 when the company stepped away from Google's Open Bidding. PubDesk gives publishers a view of how buyers value their inventory.
- Unified ID 2.0 (UID2): an open-source identifier built by transforming email addresses or phone numbers into an advertising identifier designed not to directly identify a person.
- Ventura: a connected TV operating system the company has described as a way to build a cleaner TV supply chain. Revenue from Ventura is not disclosed.
Customers. Clients are agencies, advertisers and groups within agencies that sign master services agreements. These carry no material spend commitments, generally run one year with automatic renewal, and can be ended by either side on 60 days' notice.
Retention has exceeded 95% for more than a decade, according to the FY2025 annual filing.
Take rate. Revenue divided by gross spend was 21.62% in FY2025, up from 20.30% in FY2024. Part of that rise is presentation: the Q2 2026 quarterly filing says changes in how supplier-provided components are used inside data offerings moved some costs into platform operations instead of netting them against revenue. Morgan Stanley noted in September 2025 that the company's take rate is nearly double that of rival DSPs, which is why fee audits matter.
Agency concentration. The FY2025 annual filing says that, aggregated at the holding-company level, two holding companies each represented more than 10% of gross billings in 2025, up from one in 2024. It does not name them, and no source located names them for 2025. The best-sourced candidates are Publicis Groupe and WPP, which the FY2020 and FY2021 filings named as the two holding companies above 10%. This identification is unconfirmed.
The 2016 IPO prospectus also named Omnicom. If the candidates are right, both have now moved against the platform in some form.
Valuation
The anchor is owner free cash flow: operating cash flow less capex, capitalised software, stock pay, interest income and one-time tax items. Net debt excludes investment securities.
Shares are the 472.80M Class A and Class B outstanding on the October 2026 special-meeting record date.
| Item | $M |
|---|---|
| Operating cash flow, TTM to Jun 2026 | 1,081.67 |
| Less capex | 218.63 |
| Less capitalised software | 14.41 |
| Less stock pay | 452.09 |
| Less interest income | 55.43 |
| Less H1 2026 tax receivable release (OBBBA) | 59.75 |
| Owner FCF, strict | 281.37 |
| Less H1 2026 receivables and payables net release | 120.17 |
| Owner FCF excluding working-capital release (anchor) | 161.20 |
| Anchor | Owner FCF $M | EV / anchor | Implied growth at 8% | at 9% | at 10% |
|---|---|---|---|---|---|
| Excluding working-capital release | 161.20 | 31.16x | 8.2% | 10.8% | 13.1% |
| Strict, including release (context) | 281.37 |
Financials
| Metric | Value |
|---|---|
| FY2025 revenue | $2,896.28M (+18%) |
| FY2025 gross spend | $13,394.68M (+11%) |
| FY2025 net income | $443.30M |
| FY2025 adjusted EBITDA | $1,196.45M |
| Q2 2026 revenue | $715.06M (+3%) |
| Q2 2026 net income | $64.39M (9% margin) |
| H1 2026 technology and development | $283.46M (20.19% of revenue) |
| H1 2026 net margin | 7.4% |
| Q3 2026 revenue guide | at least $650M (-12.09% YoY) |
| Q3 2026 adjusted EBITDA guide | about $160M |
| Cash, Jun 30 2026 | $1,122.98M plus $362.35M short-term investments |
| Debt | none; $750M revolver to April 2031 |
| Stock pay, TTM | $452.09M (41.80% of operating cash flow) |
| Buybacks | $1,380.40M in FY2025; $241.33M in H1 2026 |
Stock pay is the quiet problem. Over the last twelve months it consumed 41.80% of operating cash flow, and buybacks of $1,380.40M in FY2025 mostly offset dilution rather than shrinking the share count meaningfully.
Enterprise APIs let clients extend the platform; no usage metric for them is disclosed. A business acquisition in H1 2025 used $4.35M of cash plus Class A shares for $10.30M of assets; press coverage ties the period to the Sincera metadata purchase, and terms beyond the filing are not disclosed.
What the filings show, quarter by quarter
Revenue growth has slowed in every quarter since early 2025, and the Q3 2026 guide turns it negative. Stock pay has stayed above $100M a quarter while revenue growth faded.
Figures are from the quarterly and annual filings; Q4 values are the annual total less the first nine months, and quarterly stock pay and operating cash flow are year-to-date differences.
| Quarter | Revenue $M | Revenue growth YoY | Stock pay $M | Operating cash flow $M | Stock pay / OCF |
|---|---|---|---|---|---|
| Q1 2025 | 616.02 | 25.4% | 128.25 | 291.43 | 44% |
| Q2 2025 | 694.04 | 18.7% | 128.88 | 165.01 | 78.1% |
| Q3 2025 | 739.43 | 17.7% | 121.32 | 224.69 | 54% |
| Q4 2025 | 846.79 | 14.3% | 112.17 | 311.59 | 36% |
| Q1 2026 | 688.86 | 11.8% | 109.05 | 391.81 | 27.8% |
| Q2 2026 | 715.06 | 3% | 109.56 | 153.59 | 71.3% |
| Q3 2026 guide | at least 650.00 | -12.1% | not guided | not guided |
How the agencies turned
- February 2025: first revenue miss against its own guide (Q4 2024 revenue of $741M against at least $756M) and a slower Kokai rollout.
- August 2025: a slower Q3 guide, a CFO transition, and rising concern about Amazon DSP.
- September 2025: Amazon DSP gains Netflix inventory.
- January 2026: the second CFO in five months leaves; an interim CFO is named.
- March 2026: Publicis audit; Publicis stops recommending the platform, and the company disputes the finding. A week later Omnicom opens a third-party pricing audit.
- August 2026: Q2 revenue grows 3% and the Q3 guide calls for at least $650M.
- September 2026: a 15% workforce cut and removal from the S&P 500 effective September 21.
The pattern matters more than any single quarter. The 2025 slowdown was about growth and competition.
2026 added something new: the agencies themselves questioning fees. A platform can survive a stronger rival.
It is harder to survive a fight with the customers who route the budgets.
Superintelligence angle
Superintelligence-driven buying cuts both ways. A neutral platform that can bid across every screen is useful to an agent optimising a brand's budget.
But agents work best with first-party data and direct supply, and those sit with Amazon, Google and the streaming owners. New Street's Dan Salmon told AdExchanger that Google's Buyer Direct and similar tools that connect advertisers and media companies directly could disintermediate DSPs entirely.
Whoever owns the inventory and the data sets the terms; an intermediary has to prove its fee.
Risks
- Amazon price war: Amazon DSP runs at lower fees, carries shopper data, and added Netflix, Roku and Disney supply in 2025.
- YouTube leads connected TV: the largest streaming screen sits inside Google's garden, and Netflix and TV makers such as LG and Samsung own much of the rest of the screen, which limits the value of an open TV supply chain.
- Google Buyer Direct: direct buyer-to-publisher tools could bypass DSPs, and Google is both a top supplier and a competitor.
- Agency audits: Publicis and Omnicom reviews, plus OpenPath exits, threaten spend from the largest holding companies on 60-day terms.
- Stock pay: $452.09M over twelve months, 41.80% of operating cash flow.
- Founder control and repricing, a yellow flag: Class B shares carry ten votes and held about 50.08% of the vote at the October 2026 record date, converting automatically on December 22, 2035. On October 19, 2026 holders approved repricing underwater options to $12.26, 441.10M votes for and 232.48M against. In September the CEO received a 7M-share performance option at a $14.97 strike with price hurdles from $18 to $105.
- CFO turnover: three CFOs plus an interim in about a year, alongside the Chief Strategy Officer stepping down and several board changes in 2026.
Catalysts
- Q3 2026 results: date unconfirmed. The guide is at least $650M of revenue and about $160M adjusted EBITDA.
- Outcome of the Omnicom audit and any Publicis resolution.
- Restructuring savings from the 15% workforce cut, with $39M to $51M of cash charges in Q3.
- FY2026 annual filing: whether two holding companies still exceed 10% of gross billings.
- Use of the remaining $269M buyback authorisation at current prices.
Leadership and control
Founder Jeff Green is chief executive. Nate Olmstead became CFO effective July 9, 2026, following interim CFO Tahnil Davis.
David Haddad, Penry Price and Andrew Vollero joined the board in 2026. Green's personal share of the vote is not confirmed here; Class B holders as a group hold about half.
What would change the view
- Evidence that agency spend is stabilising after the audits, visible in gross spend growth.
- Owner cash excluding working-capital swings rising for a third positive year.
- Stock pay falling well below 40% of operating cash flow.
- Connected TV and OpenPath supply deals that Amazon and Google cannot match.