The Trade Desk Inc - Class A

The Trade Desk (TTD), which we first purchased in March 2020 during the depths of COVID panic, has compounded at roughly 20% annually. In 2025 though it has been our weakest performer, declining more than 50% as the market questioned whether its recent growth slowdown is cyclical or more structural in nature. While we continue to admire the business, recent management communication has raised concerns. CEO Jeh Green’s handling of the past two earnings calls — marked by vague explanations and a lack of accountability — gave us pause. Exceptional leaders reveal their character in adversity, and this has been his first true test. The position has naturally declined to about 4.5% of the portfolio, and we’re content to let performance dictate its future weight. If execution improves, it will naturally grow into a larger holding; if not, our low cost basis protects us.

The Trade Desk (NASDAQ: TTD) is the most dominant independent programmatic digital advertising demand-side platform (DSP) for ad buyers of the open internet outside the walled gardens of Meta, Google, and Amazon. TTD has strategically positioned itself to capture the secular tailwind shift towards increasing connected TV (CTV) spend, where CTV (48%) and Mobile (35%) dominate. Despite recent challenges, including a slower adoption of its AI-powered Kokai platform and increased competition from Amazon DSP, we remain confident in TTD's leadership and its ability to benefit from the growing CTV ad spend tailwind.

Shares of programmatic ad-tech leader The Trade Desk (TTD) came under pressure during the quarter, as reported quarterly results were overshadowed by cautious guidance, concerns about impacts of tariff on large-brand spending and rising competition from Amazon, along with the departure of the CFO. Despite these challenges, the company’s Kokai AI platform now powers 75% of client spending, and connected TV is the fastest growing channel, now accounting for nearly half of total spending.

The Trade Desk’s (TTD) second quarter results reflected a modest step back, with 19% year-over-year revenue growth falling short of consensus expectations and guidance implying a temporary slowdown. While competition from Amazon’s demand-side platform (DSP) may temper growth near term, TTD remains one of the leading independent platforms on the open web with resilient mid- to high-teens underlying growth.

Trade Desk (TTD) was a detractor as a short. TTD was a short early in the quarter, and we covered the position as we reassessed the catalyst path in the momentum-driven market. This indicates a cautious view on TTD's performance amidst the current market dynamics, suggesting that the firm is not optimistic about its future prospects in the near term.

The Trade Desk (TTD) has been in our portfolio for over 5 years and has delivered truly, in our opinion, spectacular returns. We believe that TTD is a great business, and the opportunity to acquire such businesses at a sensible price comes along only rarely. Our approach is to patiently compound capital by partnering with what we believe to be great businesses — and with some of the world’s best entrepreneurs and owner-operators. This philosophy has resulted in strong outcomes, and we are confident in TTD's continued growth.

The Trade Desk offers customers a cloud-based ad-buying platform that empowers advertising agencies, brands, and other service providers to plan, manage, optimize, and measure data-driven digital advertising campaigns. The Trade Desk’s competitive moat stems from its industry leading technology stack, its trusted brand due to its singular focus on the buy-side of the ad ecosystem (no conflicts of interest), and its transparent reporting that details the ROI on each ad dollar spent. The stock’s underperformance in the quarter was due to the mid-February earnings announcement that missed Street expectations for the first time in 33 quarters.

The Trade Desk, Inc. (TTD) was a significant detractor this quarter, negatively impacted following its 4Q24 earnings report in early February. Despite strong advertisement revenue growth, investor concerns over the near-term e-commerce trajectory weighed on the stock. Additionally, limited immediate contribution from e-commerce and uncertainty surrounding the divestiture of its gaming business added pressure to its performance. While long-term prospects remain favorable, these factors have created significant risks for the company.

The Trade Desk (TTD) demonstrated a solid performance with a +60% return in 2023, reflecting its strong competitive position and effective execution. The manager emphasizes that the businesses they own, including TTD, are fundamentally sound and have become stronger and more profitable over time. This resilience and growth potential are key reasons for maintaining and even increasing their investment in TTD, as they believe in the long-term value and opportunities ahead for the company.

Shares of Trade Desk declined sharply after the company reported its first earnings miss since going public in 2016. This significant drop in performance indicates potential challenges ahead for the company, particularly in a competitive landscape where AI-related stocks have been under pressure. The broader sell-off in AI-related stocks, coupled with Trade Desk's specific earnings miss, raises concerns about its future growth prospects.