I want to share some important changes I am making as I approach the one-year anniversary of launching my paid newsletter on July 1.

First, I want to say I am extremely grateful to every one of you who has followed along and supported my work, even from the free tier. Over 1,700 of you have subscribed and that means a great deal. I love investing and have deep conviction in my ideas and the long-term arc of my portfolio. It is a lot of fun to write and share with all of you.

Not only this, but the extra income from paid subscribers (nearly 50 of you!) has been a great support to my family as we continue to grow. As many of you know, our sixth child (and first girl!) will be born in August.

With all that said, I will maintain a paid service going forward, but with some important changes that I think make this a great time to consider joining:

1.) I will be lowering the price to $70/year or $8/month. This is the most accessible Sycamore has ever been. For those who have been on the fence, I hope this removes some of the barrier. We’re talking 19 cents per day.

What do you get as a paid subscriber? On average 1-2 posts per month, including portfolio updates, specific stock ideas and investment theses on individual securities, and a new addition this year in Catholic values investing content (more on this below).

As I have always said, Sycamore should be read over the course of an entire year, not for just one month. The portfolio currently consists of seven high-conviction ideas.

Why the lower price? I simply haven’t been able to publish as much and as often as I would like. And given how stretched thin I am across family life and full-time work, it feels right to adjust the price to match the pace. Obviously, I could pummel you with AI generated content, but I don’t want to do that, nor do you want to read or pay for that.

2.) On that new theme, as you may or may not know, I am a devoted Catholic. I have spent six years of my life doing missionary work to complement six years in equity research and wealth management. I am back in the mission field (going on 3 years now) and am passionate about Catholic values investing and the faith itself. I hope in this next year of publishing to write on this topic from time to time.

Catholic values investing is simply the effort to integrate Catholic social teaching and the moral life into the context of business and investing. It’s a pretty nascent category that needs a lot of voices to begin working on if it is to become a comprehensive solution for investors. Over time, I hope to eventually be one of those voices. If this resonates with you, I’d especially love to have you along.

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Despite some disappointing performance over the past 10 months, I have deep conviction in the businesses I own and the long-term arc of the Sycamore portfolio. I’m excited about where this goes in year two, and grateful you’re along for it, and I hope some of you decide to come along as a paid subscriber.

Thank you for subscribing!

Matthew Blake
Founder & CIO | Sycamore Capital Management, LLC

Disclaimer: Sycamore Capital Management, LLC (referred to in some materials as “Sycamore” or “Sycamore Capital”) is a research and publishing platform provided for informational purposes only. Nothing published by Sycamore Capital Management, LLC or its author constitutes investment advice or a recommendation to buy, sell, or hold any security. The company is not a registered investment advisor and does not manage client assets or offer personalized financial advice. All opinions expressed are solely those of the author, and any securities referenced reflect personal holdings at the time of publication unless otherwise stated. Readers are solely responsible for their own investment decisions and are encouraged to conduct independent research and consult with a licensed financial advisor before acting on any information provided.

I want to share some important changes I am making as I approach the one-year anniversary of launching my paid newsletter on July 1.

I first want to say I am extremely gratefu…

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It operates as the essential infrastructure layer of global capital markets, providing the credit ratings, benchmarks, data, and analytics that financial professionals, governments, and corporations rely on to make critical decisions every day.

With an over $15B revenue base, adjusted operating margins of ~50%, and over $5B in annual free cash flow, S&P Global is a compounding machine.

What makes S&P Global particularly compelling for the decade ahead is that its competitive position is strengthening. The company sits atop one of the deepest proprietary data reservoirs in financial services.

In an era where the winners of AI, in my opinion, will often be defined by the originators and owners of the highest-quality data, S&P Global’s position is very strong.

This analysis will look through S&P Global’s business model, its proprietary data moat, why it stands to be an AI winner, and the investment opportunity with the stock in a 25% drawdown.

The Business Model

S&P Global operates through five divisions, each dominant in its market.

Ratings (~$4.4B revenue, ~66% operating margin) is the world’s largest credit rating agency. Issuers must obtain ratings to access capital markets. Investors are often mandated by regulation to reference them. This captive, repeat-purchase dynamic combined with near-zero marginal cost per opinion explains the 60% margin. The division grew 31% in 2024 as debt issuance volumes surged.

Market Intelligence (~$4.7B revenue, ~34% operating margin) is the data and analytics backbone, anchored by Capital IQ Pro. Subscription-based, high retention, and growing at 8% in Q1 2026, with margins expanding 160 bps Y/Y to 34.2%. The 2025 acquisition of With Intelligence expanded its private markets coverage. Early AI adoption signals are strong as customers who have purchased at least one AI product are growing annualized contract value at 1.3x the rate of other customers. More on this below.

S&P Dow Jones Indices (~$1.6B revenue, ~71% operating margin) stewards the S&P 500 and DJIA. It earns asset-linked fees from trillions in passive investment products benchmarked to its indices. The S&P 500 is the default benchmark because everyone else uses it. This self-reinforcing standard has no credible challengers. The global shift to passive investing is a permanent tailwind even if I personally dislike passive investing.

Commodity Insights (~$2.1B revenue, ~48% operating margin) is the dominant provider of benchmark prices for global energy, metals, and agricultural markets. Platts assessments are the reference price written into physical supply contracts worldwide. Once embedded in legal infrastructure, nearly impossible to displace.

Mobility (~$1.6B revenue, ~40% operating margin) includes CARFAX and automotive analytics. It is being spun off tax-free in mid-2026, allowing S&P Global to concentrate on its four core financial data businesses and enabling the market to separately value the higher-margin core.

Of these five business segments, the fastest growing as of Q1 2026 are Indices and Ratings. Both are growing double digits, and both carry the highest margins by a wide margin.

The Proprietary Data Moat

The moat is not built on a single dataset. It is the accumulation and integration of decades of structured, curated data across credit, finance, commodities, etc. that competitors cannot replicate.

Three layers define it.

Original intellectual property. S&P’s credit ratings, Platts benchmark prices, and index compositions are proprietary constructs originated through original methodology that serve as the foundation of global financial infrastructure. Said another way and importantly, this data is not an aggregation of public data.

Historical depth. Capital IQ tracks over 26M entities with decades of linked financial data. Commodity Insights holds 160+ years of commodity market history. Recreating this from scratch would take decades, cost billions, and is a functionally insurmountable barrier.

Regulatory and ecosystem embeddedness. In many cases, S&P data is legally required. Bank capital requirements reference credit ratings. Insurance regulators mandate them. Investment mandates are written around them. The S&P 500 is embedded in the legal structures of trillions in ETFs and index funds. Platts prices are written into physical commodity supply contracts worldwide. You cannot simply switch as the data is part of the architecture.

The 2022 merger with IHS Markit ($44B) was a defining expansion that paired S&P’s financial data strength with IHS’s energy, transportation, and supply chain intelligence.

Put all this together, and these layers work together and compound the moat around SPGI’s business.

Why SPGI Wins in AI

AI models are only as valuable as the data they are trained on. As stated, SPGI is the originator of some of the most valuable data in the world.

In 2018, ~5 years before generative AI became mainstream, S&P acquired Kensho Technologies for $550M. Kensho now serves as the company’s internal AI engine, developing models trained on SPGI’s domain-specific data. This is narrow and deep domain specificity that creates a real advantage in professional use cases.

Kensho’s core products: Scribe (financial audio transcription), Extract (structured data from complex PDF filings), NERD (named entity recognition linked to 26M+ entities), and Link (maps client data to S&P’s standardized identifiers). More recently, Kensho has expanded into AI-Ready Data, a Grounding Agent, MCP connectivity, and plug-ins for frontier AI platforms.

Over 300 customers are now under contract or in trial for the LLM-Ready APIs, with call volume doubling between February and March 2026 alone.

S&P has moved to make its data indispensable across every major AI platform rather than compete.

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While April was loud and chaotic in geopolitics and financial markets, the month was relatively quiet for the Sycamore portfolio. I am focused on owning high-quality assets that compound over time, and if anything, the volatility provided opportunities to continue adding to core positions at better prices.

Four of my positions reported at the end of April, with the rest rolling in through May. The prints that came in were solid across the board and several positions moved significantly to the upside. A sight for sore eyes if you have been following along here for a while.

Below I break down each report, along with the usual transaction summary and current holdings as of 4/30.

Current Holdings

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The idea of a calm, relaxed, and culturally relevant river cruise through beautiful parts of the world is highly appealing to me. It could be the constant cocoffany of sound echoing through my home at all times. It could also be a really great brand, with a great concept, executing with a high degree of success.

Today, Viking has emerged as one of the most compelling growth stories in the global cruise industry, combining premium positioning, industry-leading unit economics, and a fortress balance sheet that sets it apart from every publicly traded peer.

Viking enters its next phase of expansion from a position of exceptional customer satisfaction and strong financial strength.

And since its IPO in April 2024, the stock has performed, up 200%. But is it just getting started?

The Origin Story

Viking’s founding reads less like a corporate launch and more like a comeback story. Torstein Hagen, a Norwegian-born, Harvard MBA, former McKinsey partner, ex-CEO of Royal Viking Line had “lost everything” by the mid-1990s. A failed investment left him selling paintings off his walls to cover debts.

Then in 1997, his daughter Karine took a Volga River cruise in Russia, and Hagen saw the seed of something new. He founded Viking River Cruises in St. Petersburg at age 54. The original vision was disarmingly simple: destination-focused, culturally immersive river cruises for English-speaking travelers 55 and older. No casinos. No children. No hidden costs.

Today, Viking operates 103 ships across river, ocean, and expedition segments, generating $6.5B in annual revenue. It went public on NYSE in April 2024 and was the largest U.S. IPO that year.

The “Calm Luxury” Moat

Viking markets itself as The Thinking Person’s Cruise and that’s not just a tagline. It’s a structural business decision with measurable financial consequences.

Viking deliberately excludes: casinos, children under 18, waterslides, Jumbotrons, rock climbing walls, art auctions, formal nights, private island destinations. You get the idea. Every exclusion is intentional. Together, they create a self-selecting customer base of affluent adults who want destination immersion and a library on board the ship.

The results speak for themselves. Viking’s net yield, which is revenue per passenger cruise day, is $583, versus $169–$266 for mass-market competitors. 2.5–3.5x the industry average. Repeat guest rates have climbed from 27% in 2015 to 54% today. Condé Nast Traveler readers have ranked Viking #1 in rivers, oceans, and expeditions simultaneously. They’re the only cruise line to ever hold all three titles at once.

A mass-market operator would need to abandon billions in casino and onboard retail revenue to replicate this model. An ultra-luxury line would need to accept Viking’s scale to match its economics. Nobody can easily copy this from either direction.

Revenue has compounded at a 54% five-year CAGR. Margins are expanding. Advance bookings for 2026 sit at $6.0B, +13% Y/Y, with 86% of capacity already sold as of mid-February.

The balance sheet is where Viking truly separates itself from its peers:

FY 2025 FCF of ~$2.3B now exceeds committed fleet capital expenditure, meaning Viking can fund its entire expansion organically and maintain financial flexibility should any sort of crisis arise without solvency concern.

The Growth Runway

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Q1’s Contributors and Detractors

Let’s just say Q1 was marked by two primary detractors, with minimal contributors.

The two primary detractors in both percentage terms and absolute dollar amounts were PayPal and The Trade Desk. This shouldn’t come as a surprise if you’ve been following along.

I wrote about PayPal in early February and my decision to take a loss and move on, so no need to revisit that here. But TTD has been a different beast. The stock is down a shocking 40%+ YTD. Yes, I’m shocked by this.

I’ve written about it extensively, but the bottom line is that the company is working through a meaningful structural transition, shifting from a model more reliant on internal agency relationships toward one built on direct integration with brands and publishers, all while navigating sentiment headwinds tied to AI disruption. The company has continued innovating, which is partly the problem. They haven’t helped themselves through the Publicis situation.

On Publicis, if the company really is obfuscating fees for clients, they need to acknowledge it and fix the problem immediately. Management says they did not. If there’s a problem, fix it. Unacceptable if true.

But beyond this, something bigger and more structural seems to be at play. TTD continues to innovate, somewhat ironically given the previous paragraph, on transparency, objectivity, and supply chain efficiency. By nature of what they’ve built with OpenPath and the traction it’s seen over the last year or so, it makes a lot of sense that the large holdcos (Publicis, Omnicom, etc.) would have a vested interest in seeing TTD fail.

Their business models are built on principal media buying, where the holding company purchases ad inventory with its own capital upfront, takes on the financial risk by buying in bulk at a discount, and then resells that inventory to clients at a markup. The agency and the brands they represent are on opposite sides of the transaction. Not a business I would want to be in.

So it’s not the least bit ironic that these same players are hammering TTD on transparency and fees when opacity is literally their profit center.

Make no mistake, these audits are about OpenPath.

As I said, if TTD did screw up the Publicis relationship, my guess is it’s a one-off. Structurally, TTD is built on transparency and has historically been the most transparent actor in the adtech industry.

It’s worth noting that Omnicom launched an audit of their MSA (master service agreement) with TTD and found no issues. Even so, because it’s the name of the game right now, they hired a Big Four accounting firm to forensically review the entire relationship and dig up anything they can. That’s still a pending development.

The bottom line is TTD wins when the brands running through their platform win. That structural alignment means TTD, while down, is most certainly not out. In the long-term, the advantage goes to the company with the most objectivity and alignment with its customers. I believe that, and I’m sticking with TTD.

Q1 Performance

I’m not proud of the painful Q1, but I’m also not afraid of it either. Anyone writing a newsletter who only shows you their wins and never a loss or a drawdown, is not a real investor, nor honest.

Better days are ahead and beyond TTD, I like how the remainder of my portfolio is situated right now.

The long-term arc of Sycamore is still very much intact.

To unlock the remainder of this post and the Sycamore portfolio, consider becoming a premium subscriber and support my work!

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“How strong, how wide, how deep the moat is around our business is something I think very few understand.”

Jeff Green, Founder & CEO

Two significant developments dropped on the evening of March 4th, one week following the Q4 earnings report. Both deserve attention before we get into the earnings and other thoughts.

TTD and OpenAI are reportedly in talks to form a partnership that would involve TTD helping OpenAI build out and scale advertising within ChatGPT. Details are thin and it’s too early to know what the full structure could look like. But the strategic implication is important. One of the loudest bearish narratives surrounding TTD has been that AI would cannibalize the display advertising market, one of TTD’s core channels. If this partnership materializes, that narrative flips entirely. A headwind becomes a tailwind.

The more striking development was Jeff Green’s open market stock purchase. The Founder and CEO of TTD stepped into the open market and bought 6 million shares for ~$148M, out of his own pocket. To put that in context: this ranks among the largest insider purchases by a Founder-CEO in the history of publicly traded U.S. companies.

It comes after a nearly 85% drawdown in the stock from its peak. Green has watched the market declare his company’s best days are behind it, and his response was to write a nine-figure personal check.

You can debate the earnings/guidance, competition, Kokai’s troubles, open vs. closed debate, OpenPath’s transparency, etc. etc., but you can’t debate $148M of personal conviction.

“In bear markets, stocks return to their rightful owners.”

J.P. Morgan

This is still true today as TTD stock returns to its rightful owners…Jeff Green and me :)

Jeff now owns ~10% of the company and I own…not quite that much.

Solid Q4 Earnings but Cautious Guidance

The headline numbers from Q4 2025 were solid. Revenue came in at $847M, +14% Y/Y and +19% ex-political spend headwind from Q4 2024. Adjusted EBITDA for Q4 was approximately $400M, a 47% adjusted margin. The balance sheet remains fortress with $1.3B in cash, equivalents, and short-term investments with zero debt.

The market punished the stock anyway, initially down another 17%. This reversed almost in its entirety in one trading day. And since then, the stock is up ~10% (thanks to the insider purchase and OpenAI rumors).

Q1 2026 guidance of at least $678M revenue, 10% growth, came in below expectations. For context, Q1 is always the slowest quarter. Prior to the report, Morgan Stanley and BofA Securities both had Q1 revenue growth marked for ~11%. Regardless, it’s worth understanding what actually drove the guidance.

CPG and auto ad spend together represent over 25% of TTD’s business, and both have been navigating a perfect storm of tariff uncertainty, persistent inflation, and month-to-month budget volatility. When Green excluded these two verticals, he said growth would have been at least 5 percentage points higher. I do think there are other challenges and I will share my thoughts on those below, but this is a significant piece to the puzzle. But it isn’t surprising though either, consumer sentiment is in the absolute tank right now.

Full-Year 2025 Financial Snapshot

Revenue grew 18% to $2.9B, and the business remained highly profitable throughout. Gross margin compressed modestly from 80.7% to 78.6%, reflecting the ongoing infrastructure investment cycle, but the efficiency story below that line is still strong.

Operating margin expanded from 17.5% to 20.3%, FCF margin improved from 26.2% to 27.5%, and adjusted EBITDA held steady at 41%, demonstrating that TTD is scaling with discipline. Net profit margin ticked down slightly from 16.1% to 15.3%, largely a function of the same infrastructure costs, and ROIC declined marginally from 27.2% to 26.1%. I’m watching both, but neither is alarming, a 26% return on invested capital is an exceptional result by any standard.

Operating margin is one of the clearest signals of business health. While revenue is decelerating, margins are expanding, suggesting the slowdown is external to TTD. The business is strong and getting more efficient.

Capital allocation reinforced the operating story. TTD repurchased $1.4B in stock ($423M of stock in Q4 alone), reducing shares outstanding by 4.1% for the year, with $500M in total buyback authorization in place.

The most telling number, however, is the forward FCF yield, which moved from 1.4% at the start of 2025 to 7.9% as of early March 2026. Not because the business is in deteriorating. The business is generating more cash, just priced significantly cheaper. The setup from this perspective, for a long-term investor, is straightforward.

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Headwinds

Growth continues to decelerate: Two of the most important spend verticals in the business (CPG and Auto) remain materially weak. The company also continues working through the go-to-market restructuring that began in late 2024. The Kokai rollout, while now nearly complete, has not come without growing pains.

It seems all of these macro headwinds and execution missteps led to the miss on total platform spend for the year. Platform spend decelerated from 25.3% growth in 2024 to just 11.2% in 2025. More on this below.

The narrative of competitive threats are very loud. Amazon’s growing DSP ambitions, the perception of fee pressures, and the general narrative that walled gardens are at a structural advantage to the open internet have all weighed on the stock and on sentiment. I think that narrative is wrong, but the narrative alone is enough to weigh on Wall St. in the near term.

Lastly, TTD is a software business. And all software businesses are going to zero with 100% of their market caps going to Anthropic. Apparently.

Take Rate Accelerates

In my opinion, the single most important data point in this earnings report is arguably being ignored: take rate expanded at its fastest pace in company history, +6.5% Y/Y to an all-time high of 21.6%.

Why is it so important? Because for the past year, the dominant narrative that I hear is that Amazon is undercutting TTD on fees, and that this pressure is compressing TTD’s take rates. That story did not play out in 2025.

"Even though a large commerce walled garden may trumpet 1% or no fees, at the end of the day, the effective CPM that we pay is higher than comparable campaigns on The Trade Desk. We're paying more to get less functional reporting, and we are spending a lot more on data than we would have on the comparable Trade Desk campaign."

VP of Strategy, large agency (Q4 TTD earnings call)

Said simply, “cheap reach” is actually more expensive when you consider outcomes. This is what drives take rate expansion even in a competitive environment. When your platform objectively outperforms and you innovate faster, clients pay for that value.

There’s another dimension to the take rate expansion that I think is being underappreciated. Take rate growing at a record pace while platform spend growth decelerated suggests that TTD’s innovations (OpenPath, Audience Unlimited, etc.) are gaining meaningful traction with customers. That is an encouraging sign about product adoption and the depth of the customer relationship, with a long runway ahead as the data marketplace and supply chain continue to mature.

Nowhere is this more evident than in supply path optimization. OpenPath, OpenAds, Deal Desk, and PubDesk are creating a flywheel of efficient, transparent connections between buyers and sellers, lowering total effective costs for clients even after accounting for the fees involved.

I wrote six months ago about how these innovations could very well lead to take rate expansion, in opposition to everyone calling for take rate compression. It’s early, but this looks really good.

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The Walled Garden Playbook: Optimize for Yourself

There is a structural problem with every major competitor TTD faces, and it is the same problem each time. They are closed ecosystems. And closed ecosystems once scaled, optimize for themselves.

Terry Kane, Managing Director at TTD put it as clearly as anyone:

“In the early 2000s, Google told brands a simple story. Create relevant content, invest in SEO, and if you earn relevance, we will reward you with visibility. Brands built content strategies and effectively trained the system. Then paid search arrived. Organic reach declined. Visibility became an auction. And Google retained all the intent data, performance signals, and demand intelligence. The value shifted from the advertiser to the platform.

In the late 2000s, Facebook repeated the model. Build a Page. Grow your community. We will help you reach them. Brands invested heavily. Then reach collapsed to low single digits. To speak to the audience you built, you had to pay. Facebook owned the identity, the data, and the rules of access.

Then came Instagram, Snapchat, and TikTok. New formats, same outcome. Brands invested audiences, money, and creativity. Over time, organic distribution was constrained, paid amplification became mandatory, and data remained locked inside the platform.

Then Amazon completed the loop. List your products, access unmatched demand, and grow your business. Brands complied. Then organic product discovery declined. Sponsored listings became unavoidable. Defensive bidding on your own brand terms became table stakes. Amazon owned the shopper relationship, the transaction data, the measurement, and increasingly competed with brands through private labels. Brands now fund the auction that inflates their own customer acquisition costs, with no ownership of the customer.

This pattern is not accidental. It is structural. Closed ecosystems optimise for themselves. Control over media, identity, measurement, and optimisation inevitably leads to economic leverage over advertisers. The open internet is not a philosophical stance. It is a commercial necessity. When brands invest in the open internet, they build durable assets: first-party data, independent identity, transparent measurement, choice and leverage.”

Terry Kane, Managing Director @ TTD, MENA

TTD is not just different from its competitors but a structural necessity. And I don't want to get too metaphysical here, but this goes beyond advertising. The internet now permeates most dimensions of human life. When the transmission of information, commerce, ideas, et al passes through the hands of a very small number of closed platforms and those who run those platforms, the consequences extend well beyond marketing budgets. That is not healthy for the internet. It is not healthy for civic life. And it is not healthy for human flourishing.

To invest in TTD is, in some small way, to invest in the idea that the internet should remain open for the sake of human flourishing. And it's worth remembering, like it or not, advertising is what funds it.

Amazon DSP

The question with Amazon is not whether they optimize for themselves over their advertising partners, they already do. Amazon’s DSP faces the same structural conflict every walled garden reinforces: it owns the inventory, the shopper data, the measurement, and increasingly competes directly with the brands advertising on its platform. The incentive to prioritize its own interests over its advertisers’ is the business model.

Green has been direct about where he thinks this ends. In a recent letter, he wrote:

“Many people are conflating Amazon advertising success with Amazon DSP success. Sponsored listings are at the core of Amazon’s advertising future, not its DSP. I don’t believe Amazon has a DSP in five years. O&O [owned & operated] will be way bigger in their future. Having a DSP poses channel conflict and erosion problems for their core businesses, retail and cloud/AWS — in part because they compete with most of the Fortune 500 brands.”

Jeff Green, Founder & CEO @ TTD

That is not a defensive posture. That is a founder who understands the structural incentives of every player in the ecosystem better than anyone, and is telling you exactly how he expects it to play out. Oh and remember, he’s betting $150M (on top of his already $1.6B position) on that thesis.

AI: TTD’s Structural Advantage Gets Stronger

I rewrote this section more than once. There's so much to say. In the end I decided to just scrap most of it and simply capture Jeff Green’s POV, because he says it better than I can.

The following quotes are taken from Green’s recent article, Why I spent $150M on my own company???.

“Wall Street is wrong. Not about everything, but about one thing. Sometimes Wall Street momentum gets pushed by a currently unprovable thesis. Right now, Wall Street has an unprovable bear thesis — “software is dead.” There is fear that Claude and tools like it will enable developers to duplicate Salesforce or The Trade Desk. During a time when the market can’t prove that thesis wrong, the market and the sector go down. What I think they’re missing is that the best companies in the world work hard every day looking for an edge. We’re all looking for every possible practical application of AI, new tools and every other possible advantage. AI changed a lot, but it didn’t evaporate integrations, moats, trust, customers and tools — let alone people with esoteric expertise and obsessive passion to improve things.”

About a month before Green wrote the above, I took my own shot at something of a similar nature:

Bottom line, if AI doesn’t disintermediate TTD, then it serves as the ultimate amplifier to the business. And Green is clear about why TTD is better positioned to capture that amplification than anyone else:

“TTD has been building AI and machine learning tools for more than a decade — long before the recent AI hype phase. AI is across our platform — supercharging our bidder, our valuation engine, our SPO efforts, our predictive clearing product, our new Deal Desk. Kokai is able to analyze 20 million ad opportunities every second, each with thousands of variables, all in the context of first- and third-party data, in milliseconds — and find the right impression for any given advertiser. This is because we believe we have the industry’s most advanced AI and the industry’s richest, most refined, objective and trusted data platform.

Objectivity is key here. Already we’re seeing buyers recognize that data is more valuable in an AI world — and more and more are discovering that sharing that data with conflicted players is dangerous. Objectivity matters even more in an AI world.”

TTD has spent 16 years earning an immense amount of trust by being structurally, objectively aligned with the interests of its clients. It has no inventory to protect. No conflict to manage. No other master to serve. AI makes TTD’s focus on objectivity more valuable.

If you’ve made it this far, I hope it’s been worth your time. Consider supporting my work by becoming a paid subscriber. Below, I share my take and what I am doing with TTD in the Sycamore portfolio.

Just know that if you do, your subscription goes directly to supporting my family of seven (eight in August!). It is genuinely appreciated.

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What a month February was. All but one company in the portfolio reported earnings. Additionally, multiple stomach bug illnesses swept through my family. It was brutal. More brutal than the PayPal earnings report.

There is a lot to update you on from the month that was, certainly with some highs and some lows.

I know many people have reached out regarding The Trade Desk’s earnings from 2/25. I have been patient to respond as I have spent a fair amount of time taking everything in first. I will share those thoughts with free and paid subscribers in a separate post in the coming days.

In this post, I will share my thoughts from other contributors and detractors in the portfolio. A few new positions. A couple closed out positions.

This was probably the most active I have ever been over the course of a one month period.

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Seeds are the central architectural decision behind Kokai, TTD's buying platform. Understanding how they work matters for anyone sizing up TTD's long-term competitive position, especially as competitive fears have weighed heavily on the stock.

TTD's biggest competitors all own a tremendous amount of first-party data. And the narrative goes in programmatic advertising land, he who owns the data, wins. Because TTD is independent and doesn't compete with its clients for ad dollars, they do not own the first-party data. The market is thus writing them off.

The contrarian view, however, is that they don't need to. The brands they work with do own the data and are giving it to TTD. Why? Because brands who partner with TTD get omnichannel reach, without their DSP partner steering ad spend to benefit themselves. TTD's business model is aligned with its clients. They spend a client's budget in the best place possible. Not inside a walled garden where the client can't control reach, measurement, or frequency.

TTD doesn't need to own the data to compete with its much larger adversaries. This is an analysis of how they're doing it.

What are Seeds?

At the simplest level, a seed is a segment of a brand’s highest-value customers; a first-party dataset. Think CRM lists, purchase histories, conversion events, etc. that are then uploaded into TTD’s platform.

The concept of using first-party data for audience modeling isn't new. Every major DSP offers some version of lookalike targeting. What's different is how deeply TTD has wired seeds into Kokai's architecture. In Kokai, every campaign requires a seed, and that seed becomes the organizing principle for the entire buying process.

Once set, the seed drives three things simultaneously: a relevance score that rates every impression opportunity against the seed population, a Quality Reach Index (QRI) that measures post-campaign delivery alignment, and Koa Audiences, an AI engine that dynamically builds lookalike segments and updates them in real time.

The flywheel is the key insight.

Seeds define relevance → relevance guides bidding → QRI measures results → results refine future optimization.

TTD's internal analysis of 187 campaigns found that every 10-point QRI increase correlated with a 16% improvement in conversion rates. That feedback loop, tied to UID2-based identity resolution, is what lets seeds work across cookieless environments like connected TV where traditional targeting has always been weakest.

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Early Case Studies

TTD has published a growing portfolio of seed-driven results.

Sky Deutschland built a seed from cart-addition data for subscription packages. Results were 84% lower CPA, 7x higher audience relevance, 4x more households reached through reinvested frequency savings. QRI-to-CPA correlation hit 99%.

Deutsche Telekom was the first EMEA company to test Kokai’s seed-based algorithm. They used MagentaTV subscriber data and delivered 11x more post-click conversions and 18x better cost-efficiency, while spending 42% less budget.

Luxury Escapes activated CRM data via UID2 to build seed lookalikes, producing 276% higher conversion rates and 4.75x higher ROAS vs. cookie-based targeting.

In aggregate, TTD reports Kokai campaigns (seed-based by default) deliver 27% lower CPA, 24% lower CPC, and 43% lower cost per unique reach vs. Solimar.

Why This Matters for the Investment Thesis

Seeds are strategically significant for three reasons.

First, they deepen switching costs. Once an advertiser uploads first-party data, builds seeds, and accumulates QRI history inside TTD, migrating to a competing DSP means losing that optimization flywheel. The richer the seed data, the harder it is to leave. This compounds over time.

Second, seeds are the on-ramp for Audience Unlimited, a recent (Sept 2025) initiative that uses AI to score the entire third-party data marketplace against an advertiser's seed. Pricing is based on 3.3 to 4.4% of impression costs and is designed to drive adoption by eliminating per-segment data fees. If it works, Audience Unlimited turns seeds from a targeting tool into a platform-level monetization lever. TTD effectively becomes the intelligence layer between brands and data providers.

Third, seeds address the CTV opportunity directly. Cookies never worked in connected TV. Seeds, tied to UID2 identity resolution, give TTD a coherent targeting story for the channel where ad spend is migrating fastest. This is arguably more important than any individual CPA metric.

By the way, CTV is such a massive opportunity with so much runway, it can’t be overstated.

As mentioned, seeds work best with rich first-party data, and TTD's largest competitors are flush with it. Amazon DSP especially. But that advantage comes with a conflict of interest that is core to my TTD long thesis. Amazon is essentially asking brands to hand over their most valuable data to a conflicted platform, and oftentimes worse, a direct competitor.

In the AI world we now live in, brands protecting their first-party data will only become more important as a company's key differentiator.

There will always be a need for an independent and objective ad-buying partner.

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Bottom Line

The idea that TTD cannot compete because they don't have first-party data does not capture the nuance of this industry. They do have it. The largest brands in the world are giving it to them because they trust them.

And it's working.

Seeds aren't a feature. They're the architecture.

Big earnings print this afternoon. Jeff Green and team have always found a way through industry and technological changes, as well as severe competition, over the past 10-15 years. I am betting that he will find a way again.

Thanks for reading!

Matthew Blake
Founder & CIO | Sycamore Capital Management, LLC

Disclaimer: Sycamore Capital Management, LLC (referred to in some materials as “Sycamore” or “Sycamore Capital”) is a research and publishing platform provided for informational purposes only. Nothing published by Sycamore Capital Management, LLC or its author constitutes investment advice or a recommendation to buy, sell, or hold any security. The company is not a registered investment advisor and does not manage client assets or offer personalized financial advice. All opinions expressed are solely those of the author, and any securities referenced reflect personal holdings at the time of publication unless otherwise stated. Readers are solely responsible for their own investment decisions and are encouraged to conduct independent research and consult with a licensed financial advisor before acting on any information provided.

Not only is there a long runway for unit growth, but Sprouts has built a highly profitable model, one that is second to none in its category. As a result, unit growth is self-funded and still leaves plenty of room for capital return to shareholders.

Since 2015, SFM has increased its store count by 114% while reducing shares outstanding by 36%. A seriously powerful combination.

Below is an analysis of the business at scale, how it compares to Whole Foods at the time Amazon made its acquisition, and whether or not the stock, which is in a 62% drawdown, is an opportunity for investors.

Sprouts at a Glance

Sprouts operates a differentiated, smaller-format (~23K sq. ft.) grocery model centered on fresh produce, organic products, vitamins and supplements, and healthy packaged goods.

Produce accounts for roughly a quarter of total sales, with around 200 organic varieties offered in each store. The vitamins and supplements department carries approximately 7,500 products per location. The company’s private label products, Sprouts Brand, now exceeds 25% of total sales.

Smaller Format Pivot

In 2020, management began a strategic pivot from larger stores, ~30,000 sq. ft. per unit, to a smaller, more efficient ~23,000 sq. ft. format. In 2023, the company closed 11 underperforming legacy locations that were generating negative cash flow and committed to opening all new stores in the smaller prototype.

Since then, revenue, comps, and margins have been remarkably strong:

• TTM revenue has grown from ~$6.4B (FY2022) to $8.65B

• SSS comps have accelerated from +2.2% to as high as +11.5%

• Gross margins have expanded from ~36.5% to 38.7%

• Net margins have nearly doubled from ~3.3% to 5.9%

Geographic Footprint

Sprouts' largest concentrations are in California (~156 stores), Florida (~60), Arizona (~48), Texas (~54), and Colorado (~34). The company is already well-established in the Southeast and Mid-Atlantic, and is now actively expanding into the Midwest and Northeast as new distribution centers come online.

The company recently opened their first New York location (Long Island) just two weeks ago.

CEO Jack Sinclair has stated a long-term target of approximately 1,400 stores nationwide, more than 3x the current base, with unit growth targeting ~10% annually by 2027. As already mentioned but worth re-stating, this growth is organic and self-funded.

Financial Performance

The table below shows FY2023 and FY2024 results alongside the most recent trailing-twelve-month figures through Q3 2025 and FY2025 estimates.

Additionally, e-commerce now represents approximately 15.5% of total sales, +21% Y/Y. And the company’s recently launched Sprouts Rewards loyalty program is showing positive early signs.

"Although it's still early in the program, we're observing encouraging indications of increased shopping frequency and sales per customer in our early rollout geographies and are excited to see our progress in the coming months."

Jack Sinclair, CEO

Hopefully we will get more data and color on the loyalty program in the earnings report on February 19.

Comp: Sprouts vs. Whole Foods

Now for the good part.

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Things are moving quickly in this market and I wanted to provide a brief intra-month update regarding three of my positions.

1.) Ferrari (RACE)

The company posted a solid Q4 and full year result. I was a bit nervous seeing the revenue guide at a slightly less than 5% growth rate. However, a good print and decent guide is good enough if you’re not a software company right now. The stock was +9% as of this morning.

Notably, the company reported lower unit shipments, -0.8% Y/Y for the full year 2025, but a +7% increase in revenue, suggesting strong mix/personalization and reinforcing the company’s scarcity/exclusivity framework for go-to-market. There is a lot of detail to look at here but I will save that for a future post on Ferrari or a full portfolio update. Bottom line, that’s a very strong sign for the brand.

As a refresher, the company guided to mid-single digit revenue growth at their investor day in Q4 2025. Going into this morning’s print the stock was in a 42% drawdown. The ~5% rev guide for 2026 plus the move in the stock today suggests to me the market has absorbed the reset around this ~$350 level.

I see Ferrari as a company that is immune from all the AI talk/chaos and I’m willing to pay a premium price for a premium business. And that’s working right now.

I had continued adding to my position in early February, increasing the position by 42.9% and paying $332 /sh. The stock now accounts for ~5% of the portfolio.

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This shift democratizes access to premium sports content while positioning independent demand-side platforms like The Trade Desk as critical infrastructure for reaching engaged audiences at scale.

The NBCU Programmatic Expansion

NBCUniversal sold out its Winter Olympics ad inventory a month early, setting a new Winter Olympics ad sales record for both linear and digital revenue. The digital tilt is unmistakable: 85% of brand partners are investing digitally, with advertiser adoption of Peacock’s ad innovations up 31% from Paris 2024 to Milan Cortina 2026 (source).

The programmatic expansion is the real story. During Paris 2024, 90% of programmatic advertisers were new to the Olympics entirely, brands that had never been able to access this inventory before. NBCU has expanded to seven DSP’s offering biddable inventory, including:

• The Trade Desk

• Google DV360

• Amazon DSP

• Viant

• Others

Two years ago, the majority of Olympic advertising required traditional upfront negotiations and fixed commitments. Now, over 30% of Peacock ads are sold programmatically, and NBCU’s total advertiser count has grown by 40%, driven primarily by programmatic access. According to NBCU’s Mark Marshall, the 2026 Games brought in 100 new advertisers, with more than 85% of all clients supplementing their TV buys with digital (source).

This is a structural change, not a one-off experiment.

“Programmatic is one of the big pushes for us because we understand that there are a lot of advertisers that like to be able to be opportunistic, take advantage of scale whenever they see it appear in the marketplace. So we want to be able to allow people to tap into Olympic inventory, really, whenever they have the ability to do so.”

Josh Noval, SVP of Olympic Sales, NBCU

How TTD Fits In

To understand TTD’s role, consider what this actually looks like for an advertiser.

Imagine a mid-market QSR brand that could never justify the seven-figure minimums of a traditional Olympic upfront deal. Through TTD’s programmatic marketplace, they can now access live Olympic CTV inventory on Peacock through real-time bidding, starting at whatever budget makes sense.

And here’s where TTD’s platform capabilities matter in practice, not just theoretically on a feature list:

The Kokai platform’s agile pacing automatically shifts spend toward high-attention moments, like an unexpected medal run by an American athlete, without the QSR brand manually adjusting anything. In contrast, when viewership is non-existent during a 4am curling qualifier, spend pulls back.

Additionally, through Kokai, the brand gets household-level frequency management so they’re not hammering the same viewer eighteen times in a row with the same ad, and they get cross-device measurement to understand whether the impressions actually moved the needle.

None of this was possible for this type of advertiser two Olympics ago. And critically, TTD can orchestrate this across channels beyond just Peacock. If sports news coverage of the Games on other streaming platforms or audio is driving engagement, TTD can follow the audience there (omnichannel strategy).

This matters because of where the audience is going. TTD Intelligence data shows:

• 41% of Americans plan to watch the 2026 Winter Olympics live via streaming/CTV

• 61% will watch highlights

• 51% will follow sports news coverage

• 35% will watch replays

The audience is fragmenting across formats and screens, and that fragmentation is precisely the environment where a cross-channel DSP has an advantage over buying any single platform directly. Premium CTV environments are also proving their worth: they’re 1.5x more effective at improving brand perception and 1.3x more effective at driving purchase intent versus other digital channels.

The Competitive Picture and What Could Go Wrong

TTD has real advantages here. They were NBCUniversal’s original programmatic partner for the Olympics, launching the private marketplace for Paris 2024. That first-mover position matters, they have the longest-standing relationship, the proven infrastructure, and the track record. Their independence is genuinely valuable: unlike Google DV360 (which steers toward YouTube inventory) or Amazon DSP (which steers toward Prime Video and its retail data ecosystem), TTD doesn’t own media and has no incentive to favor one publisher over another.

But it’s worth being clear-eyed about the competitive dynamics (something I have been accused of not doing very well).

Google and Amazon aren’t just alternative DSPs, they’re ecosystems. Google can bundle Olympic content on DV360 with YouTube, search, and its measurement stack in a way that’s seamless for agencies already living in Google’s tools. While Amazon can layer its purchase data on top of Olympic CTV impressions, offering a closed-loop attribution story.

There’s also the pricing question. Programmatic CPMs for live premium sports are still being established. As more DSPs gain access and more inventory becomes available, there’s a scenario where CPMs compress and the margin opportunity narrows for everyone, including TTD. TTD’s take rate is higher than the walled garden alternatives, and in a world where advertisers are increasingly cost-conscious, that premium needs to be justified by obviously better outcomes (I certainly think they can demonstrate this value, but it’s a risk, nonetheless).

Finally, the 30% programmatic share of Peacock inventory is growing but still a minority. The majority of Olympic revenue still flows through traditional direct deals with the largest advertisers. Programmatic is expanding the long tail, which benefits TTD, but the highest-value placements, the primetime medal ceremonies, the opening and closing events, may remain predominantly direct-sold this year and for the foreseeable future.

Sizing the Opportunity

NBCU is offering 16 billion streaming minutes of Olympic coverage and an estimated 915 million impressions, according to their own estimations. But those are NBCU’s total numbers, what matters for TTD is what slice flows programmatically and what share TTD captures.

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I will continue working on this weekly cadence and mix in posts that are primarily paid with some free and hybrid posts as well. As a result of the effort to publish more going forward, I will be publishing more concise monthly portfolio updates that will include a look at the portfolio, changes made during the month, and commentary on the portfolio.

With that said, I wanted to provide an update on my position in PayPal.

PayPal

Following the blowup earnings report, I made the hard decision to exit the remainder of my position in PayPal. This is a tough pill to swallow, but I felt it must be done. Thankfully, I downsized the position by ~30% in January, which somewhat softened the blow.

There are two primary mistakes I think I made with this investment. First, I underestimated how important branded checkout is to the story, and how damaging PayPal’s technical/experience issues have been in that flow. The warning signs around checkout friction have been building, while competition for branded checkout has intensified across a myriad of providers.

In conjunction, I was placing too much emphasis on the next gen growth opportunities the company is working on like Agentic and Ads. These are long-term bets that I think could prove worthy endeavours, but clearly given the guide for FY 2026 these are further down the field to being material than I realized.

The company’s guidance was a huge miss versus expectations with consensus calling for +7% EPS growth in FY 2026. Instead, PayPal guided to a mid-single digit decline in GAAP EPS, and non-GAAP EPS that ranges from a low-single digit decline to only slightly positive. Additionally, they also said they’ll continue investing to fix experience issues in branded checkout (experience, presentment, and consumer selection).

I hear this as two things. One, PayPal is seeing real consumer softness, especially in the parts of the retail base tied to lower and middle-income consumers, and I don’t see a catalyst that makes that better in the near term. And two, they’re effectively framing the next twelve months as an investment/reset year…yet again!

Frankly, I just don’t want to go down that road with this company.

Not only this, but a very big part of my thesis for PayPal hinged on the vision that Alex Chriss was casting. I found Chriss to be a good leader, a great product guy, and someone committed to profitable growth. I thought emphasizing profitable growth while simultaneously going after new opportunities was the right strategy.

Nevertheless, I woke up at 5:45am in a hotel room in Chicago morning of the earnings release to the Board firing Chriss. I almost fell out of the bed it caught me so off guard. In his place, we got a veteran operator from a mature, slow-growth legacy tech company. No thanks.

While this one stings, I made quick action and put orders in to have the position sold in its entirety at the open. I’m glad to wipe my hands of this one and am focused on where to redeploy the capital going forward. I always have to remind myself that you don’t have to make it back in the same way that you lose it. Especially right now, with a lot of stocks being punished and potential opportunities presenting themselves.

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Below is my earnings-season cheat sheet for the quarter and updated portfolio positions and weightings.

1.) The Trade Desk (TTD)

Earnings date: February 25 | Post-market
Quarter: 4Q25
Positioning: Core
Thesis in one line: The only scaled objective DSP serving the open internet, which accounts for 60%+ of time spent on the internet.

Consensus estimates:
Revenue: $841.1M (+13.4% Y/Y)
EBITDA: $376.5M (+7.6% Y/Y)
EPS: $0.58 (-1.7% Y/Y)
Key metrics: Revenue & EBITDA growth, customer retention, take rate

What I’m looking for:
Estimates are quite pessimistic on competitive concerns as Amazon’s DSP extends its reach into the open internet. As well as the news of this week with the termination of CFO, Alex Kayyal. The company needs to meaningfully beat these projections. Q1 guidance will be very important as well. This is an area of caution for me. TTD is lapping much easier comps beginning in Q2 2026, but Q1 will be the most challenging. Headline numbers that don’t look great could fuel the next phase of narrative that competition has finally caught up with the category leader.

Customer retention has never fallen below 95% in the company’s history. This will be the second data point I look for to help quell competitive concerns.

TTD discloses total platform spend for the year in Q4, which allows us to calculate their take rate. Is pricing holding up as Amazon undercuts on fees? We’ll see. For context:

2.) PayPal (PYPL)

Earnings date: February 3 | Pre-market
Quarter: 4Q25
Positioning: Core
Thesis in one line: The largest two-sided payments network globally and working on a turnaround: profit growth is improving, Venmo monetization is accelerating, and emerging opportunities in agentic commerce, advertising, and stablecoins add upside potential.

Consensus estimates:
Revenue: $8.39B (+0.2% Y/Y)
EPS: $1.29 (+8% Y/Y)
Key metrics: Transaction margin dollars (North Star), branded checkout volume growth, Venmo monetization growth

What I’m looking for:
On October 28 during the Q3 earnings call, management called out a softening consumer as they started into Q4. CFO Jamie Miller doubled down on this commentary at the UBS Global Technology and AI Conference on December 3. She also said that despite this the company was maintaining their guidance for the quarter. I want to hear updates on how that trend continued through the rest of Q4 and now into Q1. I think the Q4 report is relatively safe, but commentary on how Q1 is fairing and what they’re seeing in basket size, frequency, etc. will likely drive the stock from here.

I will be looking for any commentary on the upgrades they are making to the branded checkout experience. How is progress coming along? Any improvement or acceleration to the last time they gave qualitative commentary on this? This has been a slow process and has been the primary cause of Wall Street analyst downgrades.

I’m also interested in hearing commentary on the following:

• BNPL growth during the holiday season

• Continued monetization of Venmo

• new bank charter ambitions

• Next-gen growth vectors

  • agentic commerce relationships with OpenAI and Google, specifically

  • advertising platform

  • PayPal World Q4 launch; functionality, adoption, economics, etc.

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The company rode the Covid-fueled demand surge in 2020/2021 as pool construction, remodel, and backyard spending spiked, pulling forward years of demand. The years that followed have been the unwind, and the stock has spent a long time repricing. The shares are currently in a 55% drawdown, which began in November of 2021.

Yet since its October 1995 IPO, PoolCorp has compounded shareholder returns at a ~23% CAGR.

Below is an analysis of how POOL’s distribution moat, private-label brands, and Pool360 flywheel drive growth, retention, and margins + the setup for shareholders amidst a painful multi-year drawdown.

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It was The Chosen that propelled the platform into the spotlight, but now it stands on its own two feet as a fast growing values-based streaming platform and alternative to Netflix and others.

Angel went public via SPAC in September 2025. Since then, the stock has sold off hard, falling from its peak of nearly $18 to $4 today.

Angel is a streaming platform with a differentiated growth engine. It is built around the Angel Guild, a paid membership base that does not just subscribe, but helps decide what gets greenlit. The Guild grew 520% Y/Y in Q3 2025.

Below, I break down the business model, double-click into the Guild flywheel, and lay out the opportunities and risks I see for shareholders.

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"The era of the empowered shopper demands advertising solutions built on real commerce data, not modeled intent."

Dr. Mark Grether, SVP and GM of PayPal Ads

Enter PayPal: a global payments network with 430M+ consumers, 30M+ merchants, and over one-quarter of global e-commerce passing along company rails every single day.

PayPal has a treasure trove of high-quality, first-party shopper data that, until about 18 months ago, had sat idle. Now the company has a legendary adtech builder going after this massive, high-margin opportunity.

His name is Dr. Mark Grether, a veteran who helped build and scale the extremely successful advertising businesses at Amazon and Uber.

Below I break down the key layers of how the PayPal Ads platform works, the person building it, and the opportunity it represents for the company and shareholders.

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As I have said before, Sycamore should be read and evaluated over a long arc given my concentrated approach to portfolio management. Because of that, my North Star metric of investment success is the multi-year CAGR.

Over the last six years, the Sycamore portfolio has compounded at a 25.1% CAGR. For nearly the last three years I have shared these results publicly, month after month. And I want more people to be a part of it.

To mark this milestone, for the next 48 hours I’m opening 6 spots for a paid subscription at 25% off.

A few notes:

• I have never run a discount before, and I don’t know if/when I’ll do one again.

• Once subscribed, you’re locked in at that price going forward as long as your subscription stays active.

• If you’ve been on the fence, this is a good time to jump in and get full access to everything I publish as we get going in 2026.

Claim one of the 6 discounted spots here:

Subscribe now

If the button doesn’t work, click here.

Appreciate you being here and supporting my work!

Matthew Blake
Founder & CIO | Sycamore Capital Management, LLC

Disclaimer: Sycamore Capital Management, LLC (referred to in some materials as “Sycamore” or “Sycamore Capital”) is a research and publishing platform provided for informational purposes only. Nothing published by Sycamore Capital Management, LLC or its author constitutes investment advice or a recommendation to buy, sell, or hold any security. The company is not a registered investment advisor and does not manage client assets or offer personalized financial advice. All opinions expressed are solely those of the author, and any securities referenced reflect personal holdings at the time of publication unless otherwise stated. Readers are solely responsible for their own investment decisions and are encouraged to conduct independent research and consult with a licensed financial advisor before acting on any information provided.

Despite the challenges this year presented, I am grateful for another year and for each of you who subscribe and faithfully read my work. This year, despite a very strong first half (+28% at the peak), I underperformed on a full-year basis. August through December have been the hardest stretch of my investing life. One thing you will always get with Sycamore is transparency and honesty.

Below is an overview of my performance: monthly, full-year, and newly updated 6-year CAGR. As mentioned in the past, the multi-year CAGR is my north star metric as monthly and annual returns can be volatile given my concentrated approach to portfolio management. While deeply frustrated with the year, I am very happy with a +25.1% CAGR over six years.

Following the performance updates below, I take a brief look at every stock I researched this year (17 total) and highlight what I got right and what I got wrong.

Lastly, I share the usual portfolio update and how I am positioning the Sycamore portfolio heading into 2026 (I added four new stocks to the portfolio in December).

Thanks again for reading and following along. If you’re a serious investor, consider becoming a paid subscriber to gain full access to all of my work and directly support Sycamore and my growing family.

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See below or click here to view the full disclaimer for Sycamore Capital Management, LLC.

Monthly Returns

Sycamore // -4.30%
S&P 500 // -0.05%
Differential // -4.25%

Year-to-Date Returns

Sycamore // -3.16%
S&P 500 // +16.39%
Differential // -19.55%

Sycamore Historical Performance

Annual:

From the start of 2020 through year-end 2025, $10,000 invested alongside Sycamore would have grown to ~$38,248, versus ~$21,189 for the S&P 500. This represents ~$17,059 of cumulative incremental wealth creation per $10,000 invested over the six-year period (3.82x vs 2.12x on initial capital).

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2025 Stocks In-Review

While I run a highly concentrated portfolio, I do a significant amount of work on a lot more companies than just the ones I own. Because I don’t always write publicly about every one, it may not appear that way. To recap 2025, I thought I’d share with you some quick-takes on every stock I conducted in-depth research on this year.

The list below is in alphabetical order. Some I own. Some I have owned. Some I have never owned.

American Express: I wrote that decelerating top-line growth from 15% in 2023 to 9% in 2024 with a forward P/E multiple at all-time highs (ex-Covid) would mean a muted year for AXP shares. I sold the stock in January realizing a very nice gain. AXP is on track to deliver ~9% revenue growth in 2025. Nonetheless, I should have held the stock as the multiple expanded further to over 22x and the stock gained 25%.

Angel Studios: Angel is a values-based streaming platform and community where paying subscribers (the Angel Guild) don’t just watch content, they must approve it before it can be released to theaters and/or the platform. The model is simple but powerful: the audience tells you what is going to work and what is not. It’s early days, but Angel has already been associated with several big hits.

The stock, however, came public via SPAC (uh-oh), and that tends to mean structural and financial overhang. They pursued a warrant amendment/conversion as part of the de-SPAC mechanics, which tells you the kind of capital-structure housekeeping involved. And they’ve been explicit that they need money: Angel recently filed a shelf and then put in place a $150M at-the-market program.

But here’s the catch: the Guild growth story is for real. Management reported the Angel Guild has grown over 500% Y/Y (to 1.6M paying members as of Q3 2025), and then announced it surpassed 2M paying members by December 30, 2025. They also disclosed ARPM of $13.70 (TTM through Sept. 30, 2025). The Guild is generating ~$330M of annualized revenue exiting 2025 and this is only one of the company’s revenue streams. The current market is approximately $800M today. There’s a lot more to underwrite here, and I’m looking forward to sharing more with paid subscribers in Q1.

CAVA Group: I started looking at this as a high quality growth story. The Mediterranean diet is consistently ranked the #1 overall diet, yet the category still doesn’t have a true “Chipotle-like” winner. CAVA is trying to become that brand, with plenty of runway left to expand its footprint. It has over 400 restaurants and is growing this number ~18% Y/Y. But here’s the catch: over the past two years the stock has traded at a median EBITDA multiple of 63x, a super premium to peers.

In my research I comped this to Panera. Panera was taken private for approximately 19.5x EBITDA. Obviously, Panera had significant scale when it was acquired, but you get the idea as to where the multiple is going. The QSR segment is incredibly competitive and the stock has been priced for total perfection. The stock meaningfully traded down in 2025, losing 48%, and yet still trades at 40x EBITDA.

Fair Isaac: I looked at this one mid-year, but was never able to do enough work on it. The stock sold off on two fronts. First, FICO’s mortgage score pricing has been under real scrutiny after major price hikes over the past few years, including public calls for antitrust review. As far as I could tell, FICO seemed to draw the scrutiny upon themselves. Second, the FHFA moved to open the door to competition by allowing VantageScore 4.0 to be used for Fannie Mae and Freddie Mac mortgage underwriting, which directly challenged the market’s assumption that FICO’s position in mortgage scoring was untouchable.

I almost pulled the trigger because this is a genuinely high-quality business, asset-light, with a long track record of pricing power. But at the time there was just too much I did not know. How quickly does the industry actually adopt VantageScore in practice, what does that do to FICO’s unit economics, and how does FICO respond on pricing and distribution as the mortgage ecosystem resets.

Ferrari: I remember when Ferrari IPO’d in October 2015 and I was intrigued by the business, but I never bought it. When I circled back a few years later, it felt like I had missed the trade. Well, it’s back on the radar. The stock is trading at its lowest level last seen in January 2024.

Even after the pullback, RACE still carries a premium valuation relative to most other luxury goods providers, which is the price you pay for a brand with true scarcity and pricing power. But I also think this is one of the rare companies that is structurally hard to disrupt with AI. If autonomous vehicles take over the utility function of getting from A to B, human driving becomes a luxury. A nostalgic, experiential event. In that world, I actually think the AV takeover makes RACE more valuable, not less.

And don’t forget, RACE decides who gets to buy their cars. And since 1947, of the ~330,000 cars delivered, management reported at their recent capital markets day that over 90% of those cars are “still alive and active.” Extraordinary.

Goldman Sachs: I took a small position in GS to start the year on the thesis that the M&A and IPO markets would re-open with Trump in office and his very business-friendly appointments. At the time buyout firms (PE) were sitting on over $500 billion in cash and there were over 1,200 unicorns waiting for the IPO window to open.

The number of IPO’s in 2025 increased by about 30% Y/Y and M&A was up meaningfully in value vs 2024, nearly 50%. This massive increase was led by megadeals that was certainly helped by Lina Khan’s absence.

I nailed my thesis, but sold my position early in the year after a small gain to focus on other ideas. That was a big mistake as GS dominated in 2025, posting a +54% return.

John Deere: I just started looking at this one, so I don’t have a lot to say yet. But this is the classic cyclical setup where you typically want to buy when the P/E looks optically high because earnings are troughing. Management believes 2026 could be that trough year.

Additionally, DE has been investing aggressively in technology and are suggesting margins will be structurally higher, with mid cycle EPS power in the $40-$45 range. If that is real, this could be a very good idea starting in 2026. Stay tuned.

Nike: I initiated a position here with the thesis that Elliott Hill was the right man for the job to turn the ship around. I still think he’s the right man for the job, but decided to quickly exit the position as this is a long play and I just didn’t want to go down that road. It was a good idea to sell the position as the stock fell 16% in 2025.

The stock has recently had a nice boost from insider purchases: a $3M purchase from Nike board member Tim Cook (CEO of Apple) and $1M purchase from CEO Elliott Hill. Both were open-market purchases.

PayPal: The market really hates this stock. Nonetheless, I like that you can own a business with over one quarter of all global e-commerce transacting through its channels. Couple that with the company being the largest two-sided marketplace in the world and that’s a significant data advantage. Management is now building commerce platform tools around that data and marketplace like offline payments, agentic, PayPal World, and PayPal Ads Manager.

In my opinion, right now you are paying a very reasonable price for core PayPal growing mid-single digits and trading at ~7x FCF and ~10x P/E. While you get the “commerce platform” initiatives as call options for free. And while you wait for these to become material, the company is buying back ~8% of OS annually and now paying a dividend.

Nonetheless, the stock has not worked. It moved down another 32% in 2025, continues collecting Wall Street analyst downgrades, and has moved against Sycamore since I began writing about it.

PoolCorp: Swimming pools as an installed base. That’s the story here.

I think PoolCorp is interesting because it has kept taking share even as the industry has been in a real drawdown after the pandemic surge in new pool starts. About two thirds of POOL’s sales are non discretionary maintenance (think chemicals) and repair, with the remaining ~one third tied to remodel and new construction.

The thesis is simple. If you’re willing to spend $70,000 to install a pool (the average price today), you’re going to pay whatever it costs to keep it running. Swimming pools as an installed base. POOL is the world’s largest wholesale distributor to service the category.

The stock lost 33% in 2025 and has been in a 60% drawdown since the late 2021 peak.

SentinelOne: In the beginning of the year I showed the following chart from Altimeter…

And suggested that all SentinelOne had to do was close the gap on Crowdstrike and they would be a big winner. Well, they didn’t close the gap.

Turns out the market hates this company precisely because it is not named Crowdstrike. I’m half joking about this, but it’s true, the market loves Crowdstrike and hates SentinelOne. In fact, Crowdstrike outperformed SentinelOne in 2025 by 70%.

Here are a few reasons why I think this is the case:

1. Crowdstrike has structurally better margins now and when the company was at a similar scale to SentinelOne

2. Management’s shareholder apathy and excessive use of heavily dilutive SBC

3. CFO turnover. Barbara Larson came on board in September 2024 to help lead SentinelOne to the Promised Land… $1B of ARR. Well she helped the company cross the $1B mark and then quit. Her tenure with the company was 15 months. The market really didn’t like that.

They are still growing above 20%, have meaningfully diversified beyond endpoint, and the balance sheet is solid. I’m not sure what it takes to get re rated. At some point, they either need to prove durable margin expansion and rein in dilution, or let themselves be acquired or taken private.

Six Flags Entertainment: I wrote about the merger with Cedar Fair one year post merger. I highlighted that the leverage profile for the combined entity one year in versus the pre merger pro forma was off track. And for the worse. Adjusted net debt/EBTIDA was ~6.5x as of September 30 and Moody’s projected it would be ~7.5x by year end.

The stock had already lost 1/3 of its value when I wrote that there was probably more downside to go. From that day in early July, the stock got cut in half. Even an activist campaign with Jana Partners and Travis Kelce couldn’t save it.

80% of FUN’s attendance and revenue comes from their top 15 parks. Management has referred to their parks portfolio as an 80/20 setup. The work that needs to be done is what is the estimated value of the land underneath the parks they own outright. Some parks they own the real estate, others they lease. Is there enough real estate value to sell-off underperforming parks to pay down the debt while maintaining majority of revenue? If so, this could be an asymmetric idea despite the market’s growing concern of insolvency.

Sprouts Farmers Market: In 2023, management made a the strategic decision to pivot away from larger stores (30,000 sq ft) to smaller (23,000 sq ft), more strategic locations. Since the pivot, top-line has accelerated, SSS comps have accelerated, margins have expanded, ROIC has consistently grown, and more.

The company is growing new storefronts by 8-10% annually. This is self-funded growth while still returning significant capital to shareholders via buybacks. Over the last 10 years, store count has increased by 114% and total shares outstanding has decreased by 36%. That’s a really powerful combo.

Nonetheless, SFM dropped 40% in 2025.

The Trade Desk: I have written extensively about TTD. This single name drove significant downside for the Sycamore portfolio in 2025.

The company will post somewhere around 17-19% revenue growth in 2025 and consensus is for further deceleration to 16% in 2026. Not only do I think this is too low, but I am sticking with TTD and believe their are catalysts for growth to re-accelerate back to 20%+.

I have a lot of thoughts on this and will share more in 2026 for paid subscribers, but here’s one thing to consider: 2024 was a record year for US political advertising, AdImpact estimates ~$11.1B was spent in 2024. That was a major headwind in 2025 (~3% for the full year).

That headwind becomes a tailwind in 2026. AdImpact is projecting the 2026 midterm cycle at roughly ~$10.8B, which would be the most expensive midterm on record (above the ~$8.9B spent in 2022) and roughly on par with the previous presidential cycle. For now, the market doesn’t care as it is concerned about structural decline from two primary sources: competition with Amazon DSP and the shrinking of the open internet caused by AI.

TTD officially lost 68% of its market cap in 2025.

Uber: For me, the key to Uber heading into 2025 was fragmentation. I wrote about how the market (and an entire post dedicated to why Brad Gerstner was wrong to sell Uber) was too pessimistic about AVs disrupting the business, when on the ground a handful of different AV players were going live with real products via the Uber app. The more AV providers there are, the more fragmentation, the more opportunities Uber has to integrate as the partner and aggregator of choice. With 170M MAPCs (monthly active platform consumers) AV providers have immediate and extraordinary demand.

The long TSLA/short UBER spread trade of Q4 2024 created an incredible buying opportunity in the $60s, and I made Uber a 40% position in the Sycamore portfolio. As the year went on, the dislocation corrected as the company grew tremendously, printed cash at extraordinary levels, and continued to ink AV partnership deals one after the other. The stock ripped nearly 60% at the highs.

I decided to book the win and sold. The dislocation had done its job, the US consumer was showing more signs of weakness, and Uber began shifting from an asset light AV partner toward making purchase commitments that move it closer to owning vehicles themselves. It was fortuitous timing, as the stock proceeded to trade down about 20% from where I exited.

I got this one right on the entry and the exit. Gerstner got it wrong. Thankfully for him though, I emailed him my piece on why he was wrong and in the following quarter’s 13F filing, Altimeter had added back the stock. He hasn’t recognized me for this yet, but I’m sure it’s coming.

Vail Resorts: I keep MTN close on the watchlist because it’s a pretty unique asset: they own a collection of marquee North American (and international) mountains Vail, Beaver Creek, Breckenridge, Park City, plus Whistler Blackcomb (the largest ski resort in North America), and they’ve stitched the whole thing together under one network.

My hang-up is focus and capital allocation. Management is trying to do everything at once: buy new mountains, upgrade the existing resorts, pay a hefty dividend, and buyback stock. In my opinion that’s how you end up with a balance sheet that doesn’t leave much room for error. By their own reporting, net debt has been running at roughly ~3.0x–3.2x trailing EBITDA recently. I prefer to own assets that do not require debt for operations, and especially to maintain capital return to shareholders. The stock performed badly in 2025, down 29%.

Vital Farms: Is this a business a commodity or can VITL build a health conscious brand? That was the question I was trying to answer, and it’s still the question. I got onto the name because the model is genuinely interesting. VITL contracts with family farms that meet its standards for “pasture raised” production, meaning hens have meaningful outdoor access, including a minimum of 108 square feet per bird on pasture with room to roam and forage. The company has real scale in premium eggs, and the model has clearly been working.

The other factor driving the story in 2025 was bird flu. It took real supply off the market and created pockets of shortage across the industry. VITL said it was not materially impacted, and that the benefit of its model is a distributed network of smaller partner farms rather than a handful of massive facilities. For a period of time, shelves were thin for conventional eggs while VITL maintained supply.

The stock worked well for a while, with shares +37% YTD by late August 2025, but gave it all back and finished 2025 down about 18%. It remains on my watchlist because I’m still trying to answer the original question. Commodity, or brand power?

The Sycamore Portfolio

In the back half of December, I added four new companies to the Sycamore portfolio. I am very excited for a new year, a clean slate, and to share it all in depth with all of you.

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There is increasing market chatter about a “K-shaped” economy, as I mentioned in my previous monthly portfolio update, where rising financial stress is disproportionately affecting the lower half of the “K,” or the lower half of the economy. This demographic is the core of PayPal’s customer base.

At the recent UBS Global Tech and AI Conference, PayPal CFO Jamie Miller described it this way:

“We had seen some macro pressure in September that had persisted into October. And we are continuing to see that persist in our performance in November. When you look below the surface, we are a very middle income, lower income Main Street America sort of consumer base in our portfolio.”

The bottom of the “K.”

Hearing this commentary on the Q3 earnings call and again at the UBS conference raised a critical question for me as a concentrated investor and shareholder: Is PayPal’s credit profile healthy enough to weather a downturn?

PayPal has grown beyond a simple payments platform to be a more comprehensive commerce platform and is the world’s largest two-sided marketplace with >430M consumers and ~40M merchants. With this type of base comes a product offering that is complex and includes a fair amount of lending to both consumers and merchants.

So, what is the make-up of their credit portfolio and does lending to the bottom half of the “K” pose any sort of existential risk to the company?

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