Direct Digital Q3 revenue drops
Direct Digital's Q3 revenue fell 12%, missing analyst expectations, while net loss improved but also missed estimates. Buy-side advertising revenue grew 7% year-over-year, driven by new verticals, but sell-side revenue declined due to lower inventory and engagement. Operating expenses were reduced by 15% due to cost-saving initiatives. Analysts maintain a "buy" rating, with a median 12-month price target of $6.00, significantly above the recent closing price of $0.33.
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Overview
- Direct Digital Q3 revenue decreased 12%, missing analyst expectations
- Net loss improved but missed analyst estimates
- Buy-side advertising revenue grew 7% yr/yr, driven by new verticals
Outlook
- Company expects stronger Q4 compared to last year
Result Drivers
- BUY-SIDE GROWTH - Focus on profitable buy-side segment led to 7% revenue increase, driven by new verticals
- SELL-SIDE CHALLENGES - Sell-side revenue declined due to lower impression inventory and engagement levels
- COST SAVINGS - Operating expenses reduced by 15% due to cost-saving initiatives from 2024
Key Details
Metric Beat/Mis Actual Consensu
s s
Estimate
Q3 Miss $7.98 $22.25
Revenue mln mln (2
Analysts
)
Q3 Net Miss -$5 mln $435,500
Income (2
Analysts
)
Q3 Miss -$3 mln $576,000
Adjusted (2
EBITDA Analysts
)
Q3 Miss -$3.91 -$409,00
Operatin mln 0 (2
g Income Analysts
)
Analyst Coverage
- The current average analyst rating on the shares is “buy” and the breakdown of recommendations is 1 “strong buy” or “buy”, 1 “hold” and no “sell” or “strong sell”
- The average consensus recommendation for the advertising & marketing peer group is “buy”
- Wall Street’s median 12-month price target for Direct Digital Holdings Inc is $6.00, about 94.6% above its November 5 closing price of $0.33
Press Release: For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact . (This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)
