The The Trade Desk story

What drives the business

• The Trade Desk serves agencies and advertisers through ongoing master services agreements, earning platform fees generally tied to client spending plus fees for additional services and data, so growth depends on expanding advertising budgets routed through its software.
• Its independent platform spans streaming television, video, display and audio, with Kokai and the Koa AI assistant supporting campaign decisions and OpenPath connecting clients directly to publishers.
• The ecosystem includes over 430 directly integrated advertising exchanges, publishers and related platforms, while customer retention remained over 95% in the quarter to June 2026.
• Announcements accompanying the June 2026 results included Dentsu naming The Trade Desk the first advertising demand platform partner for New Stream Media, commerce integrations with Booking.com and Uber, and collaborations with Databricks and Adobe.
• Netflix made its streaming inventory automatically accessible through the platform, and Samsung Ads granted early access to premium home screen inventory, extending the company's push into connected television.

What the price assumes

At $12.34, the reverse DCF implies free cash flow after stock pay grows -0.8% a year for ten years, using a 10.2% discount rate.

That compares with delivered annual growth of 28.7% over the last 7 years on the same measure.

The TenQ check sets a 16.3% annual growth bar by slowing that historical record halfway toward 4%, although revenue growth over the last twelve months was 11.6%, below its 22.4% annual pace over the last three years.

Value TTD on your own assumptions

What could change the story

• Growth is losing momentum: revenue growth over the last twelve months missed the TenQ sector benchmark of 17.0%, while profit growth was -2.5%.
• In the quarter to June 2026, net income fell to $64 million from $90 million in the corresponding quarter of 2025, and adjusted EBITDA margin narrowed to 34% from 39%.
• Client agreements carry no material spending commitments and generally allow termination on 60 days' notice, so high retention does not guarantee spending growth, particularly amid competition from Google and Amazon.
• Stock compensation of $452 million over the last twelve months makes reported free cash flow materially different from the after-stock-pay measure used in the reverse DCF.
• Cash returned to shareholders amounted to 112.9% of free cash flow over the last twelve months, failing the TenQ cash coverage check, although $1.5 billion in cash and short-term investments and $0 in debt provide financial flexibility.

What to watch next

• For the third quarter of 2026, management expects revenue of at least $650 million and adjusted EBITDA of approximately $160 million.
• The next release will show whether expanded streaming access and commerce integrations translate into stronger revenue growth while customer retention remains over 95%.
• Profit margins and stock compensation will help distinguish campaign spending growth from improvement in earnings available to shareholders.
• Repurchase spending relative to free cash flow will show how the company uses the $269 million authorization remaining as of June 30, 2026, after approximately $78 million of repurchases in the quarter to June 2026.

Sources

• The Trade Desk's earnings release, filed with the SEC
• Its latest 10-Q or 10-K, for the risk factors
• The TTD stock report, for every figure and check