Looking back on advertising software stocks’ Q2 earnings, we examine this quarter’s best and worst performers, including DoubleVerify (NYSE:DV) and its peers.
The digital advertising market is large, growing, and becoming more diverse, both in terms of audiences and media. As a result, there is a growing need for software that enables advertisers to use data to automate and optimize ad placements.
The 6 advertising software stocks we track reported a strong Q2. As a group, revenues beat analysts’ consensus estimates by 1.3% while next quarter’s revenue guidance was 0.7% above.
Luckily, advertising software stocks have performed well with share prices up 26.3% on average since the latest earnings results.
DoubleVerify (NYSE:DV)
When Oren Netzer saw a digital ad for US-based Target while sitting in his Tel Aviv apartment, he knew there was an unsolved problem, so he started DoubleVerify (NYSE:DV), a provider of advertising solutions to businesses that helps with ad verification, fraud prevention, and brand safety.
DoubleVerify reported revenues of $155.9 million, up 16.6% year on year. This print exceeded analysts’ expectations by 1.4%. Overall, it was a strong quarter for the company with an impressive beat of analysts’ EBITDA estimates and a meaningful improvement in its gross margin.
“The second quarter was pivotal for DV as we re-accelerated our revenue growth momentum driven by continued success in social and CTV measurement, and bolstered by the strength of our retail media platform business,” said Mark Zagorski, CEO of DoubleVerify.
DoubleVerify Total Revenue
The stock is down 20.9% since reporting and currently trades at $17.08.
Co-founded by former Apple CEO John Scully, Zeta Global (NYSE:ZETA) provides software and data analytics tools that help companies market their products to billions of customers.
Zeta reported revenues of $227.8 million, up 32.6% year on year, outperforming analysts’ expectations by 7.2%. The business had an exceptional quarter with an impressive beat of analysts’ billings estimates and an impressive beat of analysts’ EBITDA estimates.
Zeta Total Revenue
Zeta scored the biggest analyst estimates beat and highest full-year guidance raise among its peers. The market seems happy with the results as the stock is up 33.7% since reporting. It currently trades at $28.70.
Founded in 2006 as an online ad platform helping ad sellers, Pubmatic (NASDAQ: PUBM) is a fully integrated cloud-based programmatic advertising platform.
PubMatic reported revenues of $67.27 million, up 6.2% year on year, falling short of analysts’ expectations by 4.1%. It was a slower quarter as it posted underwhelming revenue guidance for the next quarter.
PubMatic delivered the weakest performance against analyst estimates, slowest revenue growth, and weakest full-year guidance update in the group. As expected, the stock is down 23.7% since the results and currently trades at $14.95.
Started in 2011 as a spin-out of RapLeaf, LiveRamp (NYSE:RAMP) is a software-as-a-service provider that helps companies better target their marketing by merging offline and online data about their customers.
LiveRamp reported revenues of $176 million, up 14.2% year on year. This result beat analysts’ expectations by 2.4%. Aside from that, it was a mixed quarter as it also logged an impressive beat of analysts’ EBITDA estimates but decelerating customer growth.
The company kept the number of enterprise customers paying more than $1m annually flat at a total of 115. The stock is down 7.1% since reporting and currently trades at $25.03.
Founded by former Microsoft engineers Jeff Green and Dave Pickles, The Trade Desk (NASDAQ:TTD) offers cloud-based software that uses data to help advertisers better plan, place, and target their online ads.
The Trade Desk reported revenues of $584.6 million, up 25.9% year on year. This print topped analysts’ expectations by 1.1%. Overall, it was a very strong quarter as it also recorded an impressive beat of analysts’ EBITDA estimates and a meaningful improvement in its gross margin.
The stock is up 36.2% since reporting and currently trades at $120.10.
Inflation progressed towards the Fed's 2% goal recently, leading the Fed to reduce its policy rate by 50bps (half a percent or 0.5%) in September 2024. This is the first cut in four years. While CPI (inflation) readings have been supportive lately, employment measures have bordered on worrisome. The markets will be debating whether this rate cut's timing (and more potential ones in 2024 and 2025) is ideal for supporting the economy or a bit too late for a macro that has already cooled too much.
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