This was originally part of ADOTAT+ and given to our paid readers earlier.

This is the part of the conversation where people stop nodding politely and start doing math in their heads. It’s also the point where the industry’s favorite coping mechanism kicks in: changing the subject.

Because once you actually walk through the mechanics, the cash gap stops sounding like a finance-team inconvenience and starts looking like a structural design flaw that nobody volunteered to insure.

Strip away the decks, the jargon, the soothing language about “net terms,” and the DSP cash gap is brutally simple.

Cash leaves the DSP faster than it comes back.
And it does so by design.

On one side of the ledger, DSPs are expected to pay SSPs and publishers on 30–60 day schedules once impressions are delivered and validated. On the other side, those same DSPs invoice agencies and brands on 90–120 day terms, often layered with “pay-when-paid” language and a growing tolerance for lateness that turns those stated terms into suggestions rather than commitments.

That mismatch isn’t a rounding error. It’s a structural timing imbalance that turns DSPs into something they were never marketed as: unpriced, unsecured lenders to the buy side.

At small scale, this looks annoying.
At real scale, it becomes dangerous.

In the classic programmatic chain, risk doesn’t disappear as impressions move downstream. It travels.

Publishers contract with SSPs.
SSPs contract with DSPs.
DSPs contract with agencies and advertisers.

Each hop inherits the payment risk of the one above it, wrapped in layers of sequential liability that were designed for a simpler era and never revisited when the system became automated, high-velocity, and globally distributed.

DSPs typically owe SSPs and publishers net-30 to net-60 after delivery. Meanwhile, their receivables from agencies and brands sit on net-90 to net-120, often extended further by routine lateness. When 58% of digital media payments arrive late, as they did in H1 2025, that gap stops being theoretical. It becomes a permanent financing obligation.

The DSP is paying real money on real schedules while waiting on hypothetical money that arrives whenever it arrives.

That’s not timing friction.
That’s a credit business pretending to be a software business.

At low volumes, this mismatch can be papered over.

A modest credit line.
Some factoring.
A few friendly conversations with finance partners.

But once a DSP is moving hundreds of millions of dollars in media spend, the math turns vicious very quickly. Every quarter, tens of millions of dollars sit trapped in receivables that have to be financed somehow. As volume grows, the absolute size of that gap grows right along with it.

Here’s the part that catches executives off guard: revenue growth makes the problem worse, not better.

Margins are calculated on GAAP revenue.
Liquidity is governed by cash timing.

When interest rates were low and credit was abundant, that “float” felt almost free. In 2024–2025, as credit tightened and financing costs rose, that same float started charging rent. Every incremental dollar of revenue added more capital strain before it added a single dollar of usable cash.

Growth didn’t solve the problem.
It amplified it.

The most dangerous thing about the cash gap is that it compounds silently.

If a major advertiser or holding company pays materially late for one large quarter, the DSP doesn’t get to pause operations. Contracts, reputational risk, and fear of supply cutoffs force payments to continue downstream. That means drawing more heavily on credit, stretching internal liquidity, or slowing payments to other partners.

None of those choices are neutral.

Once a DSP absorbs a late quarter, it enters the next quarter already weaker. The balance sheet is more levered. Financing costs are higher. Partners are less patient. There is less room for error. The system is now operating closer to the edge before a single new campaign launches.

This is how a single disruption cascades into chronic stress.

It’s also why collapses like MediaMath never look sudden from the inside. By the time bankruptcy filings appear, the damage has already been compounding for quarters, quietly reshaping behavior long before anyone says the word “insolvent.”

In most businesses, growth buys you time. In this model, it borrows time against the future.

Revenue growth always precedes cash collection by months. Every new dollar of media spend increases exposure before it increases liquidity. When payment behavior is deteriorating and “always-on-time” payors are shrinking, scaling volume means scaling risk faster than scaling reliability.

That’s how you end up with companies that look healthy in topline charts while their working capital profile is quietly becoming brittle. It’s also how MediaMath could carry massive debt and unpaid obligations while still appearing operationally alive right up until the moment it wasn’t.

Growth didn’t save them.
It delayed the reckoning.

Late payments don’t hurt margins first.
They kill optionality.

The damage shows up as higher borrowing, emergency factoring, stretched payables, and constant liquidity management. Those costs rarely appear as a clean line item called “this is where it all went wrong.” They appear as missed opportunities: no hiring, no R&D, no M&A, no ability to absorb shocks.

Working capital drag compounds faster than revenue growth because it’s a function of both scale and time. More spend multiplied by longer delays equals more capital stuck in transit every quarter. And unlike a product investment, that capital doesn’t generate upside. It just keeps the lights on.

In effect, DSPs are financing the entire programmatic ecosystem without explicitly pricing that risk. Take rates are sold as technology fees, not credit spreads, even as bankruptcies and clawbacks prove that default risk is real, recurring, and being pushed downhill.

If you want to make this painfully concrete, reduce the system to its essentials.

The DSP cash gap is the number of days between when cash leaves the DSP to pay for media and when cash actually arrives from advertisers, multiplied by daily spend.

DSO minus DPO.
Days times dollars.

A DSP collecting on 110 days and paying on 45 days carries a 65-day cash gap. At five million dollars of daily spend, that’s $325 million tied up just to keep the machine running. Add routine lateness, add default risk, and the number grows fast enough to make even seasoned executives uncomfortable.

That discomfort is the point.

Because once you see the cash gap clearly, it becomes impossible to pretend this is just an accounting nuisance. It’s a financing business hiding inside an adtech stack, and it’s being run without pricing, without reserves, and without honest conversations about risk.

This is where readers stop skimming and start calculating..