The Trade Desk (TTD), founded in 2009 by Microsoft alumni Jeff Green and David Pickles, embodies this digital innovation. As a DSP (demand-side platform), TTD has developed a cloud software platform that enables agencies and advertisers to manage their advertising campaigns with surgical targeting, thanks to Koa AI, its algorithmic tool doped with artificial intelligence.

The Trade Desk distinguishes itself by focusing exclusively on buyers of advertising space, thus avoiding any conflict of interest. Its sales are based primarily on the sale of Management Services Agreements (MSAs), which give its customers direct access to its platform. This enables them to manage large-scale advertising campaigns and integrate them with other channels via customized APIs, while refining audience targeting through advanced analysis of consumer data.

The group monetizes its services by charging fees based on a percentage of its customers' total advertising spend on its platform. In addition, TTD offers its customers reports on audience characteristics and strategic recommendations to maximize the effectiveness of advertising campaigns.

The digital advertising market

With over 5 billion users, the Internet has frozen the world on a screen, and the advertising market has been no exception. Digital advertising has taken 70% of the global market, a major transformation driven by an emerging middle class and our daily use of the Internet, which signals an era when the screen takes precedence over paper. This transformation has opened the door to unprecedented innovation, with companies and advertising agencies on the lookout for new opportunities.

The programmatic advertising industry is closing in on a total addressable market of $1,000 billion. According to KBV Research, we can expect average annual growth of 14% over the next decade.

This expansion is propelled by several factors, including the creation of new companies and products, the rise of connected TVe (CTV), hyper-personalization, geographic targeting, as well as increased investment in programmatic advertising and the integration of artificial intelligence into marketing strategies.

However, competition in the market is fierce, dominated by giants such as Alphabet (through Google Ads) and Amazon (through Amazonadvertising). Smaller players have to forge alliances or merge to survive.

The Trade Desk, our protagonist du jour, isn't known for being a big predator when it comes to AdTech acquisitions, but it made a splash in 2017 when it bought AdBrain, a leading AI startup that mapped 90% of the adult Internet population in the US. Having become too big to remain independent, the group's growing size also makes it particularly attractive for a potential acquisition by a tech titan.

However, the sector is exposed to a number of risks. On the one hand, privacy regulations such as the RGPD and the end of third-party cookies, which could restrict data collection. On the other, fraudulent advertising calls for greater vigilance.

Another major challenge is ad saturation, which can lead to Internet user fatigue. Alarming statistics from Bulbshare, an AI-based consumer analytics platform, reveal that :

  • 99% of Generation Z Internet users frequently skip ads.
  • 63% use ad blockers to avoid online ads.
  • 74% of consumers feel overwhelmed by ads.

These figures should not be ignored. Nevertheless, thanks to content personalization and audience targeting, digital marketing should continue to be a central element of companies' business strategies.

What is The Trade Desk worth?

With a market capitalization of around $46 billion, The Trade Desk is the only pure player in the field of DSPs (Demand-Side Platforms). As a reminder, a DSP is a platform dedicated to buyers of advertising space (agencies, advertisers, etc.), while an SSP (Supply-Side Platform) is intended for sellers (publishers). These two types of platform are interdependent and form the pillars of this ecosystem.

TTD is growing by leaps and bounds. Between 2016 and 2023, its revenues grew by an average of 38% a year. And it's still going strong: forecasts predict 24% year-on-year growth for 2024. The first quarter has already exceeded forecasts, with a 28% year-on-year increase in sales, well above the 25% expected by analysts.

Profitability is even better. With a CAGR of 42% for EBITDA and 36% for net income, projections for 2024 indicate annual increases of 29% and 92% respectively.

These figures reflect a highly profitable business, supported by a free cash flow (FCF) margin of 28%. However, the company does not distribute dividends, preferring to reinvest profits in its growth.

The group's real strength lies in its forward-looking vision. The company has been ahead of the streaming wave, and has allocated significant resources to its cloud infrastructure and AI. This strategic orientation has enabled it to pursue a dual objective: to innovate and to limit operational risks.

It has forged strategic partnerships with streaming giants such as Disney+ and Netflix, who see programmatic advertising as a crucial lever for offsetting inflation-related losses.

Thanks to these collaborations, The Trade Desk is attracting increasing demand for its advertising space in Europe, via connected TV (CTV), which now accounts for 40% of its revenues. And that's not all: advertisers can now broadcast their ads automatically and accurately, even during live sporting events such as NBC soccer matches.

Two other major events are on the horizon: the 2024 Olympics and the US presidential election. Indeed, the expected rematch between Biden and Trump promises to be a springboard for The Trade Desk, which since 2016 has become an indispensable tool for major political advertisers.

Finally, in a move designed to enhance shareholder value, the group has bought back USD 647 million worth of shares in 2023, representing 63% of its initial cash position. The company has announced that it will spend a further USD 700 million on buybacks, with no time limit.

Valuation and share price

In 2023, The Trade Desk has a PER (price/earnings per share) ratio of 200x, well above the eight-year forecast average of 166x. This multiple clearly reflects the market's confidence in the technology sector, and by extension, in TTD.

However, this multiple is forecast to split x3 by 2026, suggesting that the market should prepare for a normalization of growth as the company reaches a mature phase, and thus a more affordable share.

The 31% rise in the share price since January 1, 2024 testifies to the current positive momentum, but we must remain alert to future developments.

Chart The Trade Desk, Inc.

To conclude, a brief summary of our strengths and weaknesses:


  • Extensive customer portfolio (over 1100 customers worldwide)
  • Increasing digitization of media and audience fragmentation
  • Innovation and continuous growth
  • International exposure (87% of sales in North America and 13% internationally)
  • Majority consensus to buy
  • )

Weak points :

  • A market that requires increased R&D investment to remain competitive.
  • Highly competitive tech talent market, requiring high stock option payouts, which can dilute shareholders.
  • Exposed to operational risk.
  • Regulatory uncertainty in the programmatic advertising sector.
  • Exposed to the risk of litigation due to misleading or deceptive advertising content on the platform.
  • No dividends