As the Q3 earnings season wraps, let’s dig into this quarter’s best and worst performers in the advertising software industry, 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 Q3. As a group, revenues beat analysts’ consensus estimates by 4.6% while next quarter’s revenue guidance was 0.9% above.
In light of this news, share prices of the companies have held steady as they are up 4.2% 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 $169.6 million, up 17.8% year on year. This print was in line with analysts’ expectations, but overall, it was a mixed quarter for the company with an impressive beat of analysts’ EBITDA estimates but revenue guidance for next quarter missing analysts’ expectations significantly.
“We delivered a strong third quarter, expanding our product and channel capabilities while achieving the largest global market share gains in DoubleVerify’s history,” said Mark Zagorski, CEO of DoubleVerify.
DoubleVerify delivered the weakest performance against analyst estimates and weakest full-year guidance update of the whole group. Unsurprisingly, the stock is down 1.7% since reporting and currently trades at $19.23.
Is now the time to buy DoubleVerify? Access our full analysis of the earnings results here, it’s free.
Best Q3: Zeta (NYSE: ZETA)
Co-founded by former Apple CEO John Sculley, Zeta Global (NYSE: ZETA) provides software and data analytics tools that help companies market their products to billions of customers.
Zeta reported revenues of $268.3 million, up 42% year on year, outperforming analysts’ expectations by 6.3%. The business had a stunning quarter with a solid beat of analysts’ billings estimates and EBITDA guidance for next quarter exceeding analysts’ expectations.
Zeta pulled off the fastest revenue growth and highest full-year guidance raise among its peers. Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 53.2% since reporting. It currently trades at $17.20.
Is now the time to buy Zeta? Access our full analysis of the earnings results here, it’s free.
Weakest Q3: The Trade Desk (NASDAQ: TTD)
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 $628 million, up 27.3% year on year, exceeding analysts’ expectations by 1.2%. Still, it was a mixed quarter as it posted a slight miss of analysts’ billings estimates.
As expected, the stock is down 10.4% since the results and currently trades at $118.74.
Read our full analysis of The Trade Desk’s results here.
AppLovin (NASDAQ: APP)
Co-founded by Adam Foroughi, who was frustrated with not being able to find a good solution to market his own dating app, AppLovin (NASDAQ: APP) is both a mobile game studio and provider of marketing and monetization tools for mobile app developers.
AppLovin reported revenues of $1.20 billion, up 38.6% year on year. This number topped analysts’ expectations by 5.9%. Overall, it was an exceptional quarter as it also logged an impressive beat of analysts’ EBITDA estimates.
The stock is up 90.9% since reporting and currently trades at $321.77.
Read our full, actionable report on AppLovin here, it’s free.
LiveRamp (NYSE: RAMP)
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 $185.5 million, up 16% year on year. This result beat analysts’ expectations by 5.3%. It was a strong quarter as it also produced a solid beat of analysts’ EBITDA estimates and a meaningful improvement in its net revenue retention rate.
The company added 10 enterprise customers paying more than $1 million annually to reach a total of 125. The stock is up 14.6% since reporting and currently trades at $30.15.
Read our full, actionable report on LiveRamp here, it’s free.
Market Update
Thanks to the Fed's series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market has thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% each in November and December), and a notable surge followed Donald Trump's presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by the pace and magnitude of future rate cuts as well as potential changes in trade policy and corporate taxes once the Trump administration takes over. The path forward is marked by uncertainty.
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