What Happened?
Shares of digital ad verification company DoubleVerify (NYSE: DV) fell 18.6% in the afternoon session after the company reported third-quarter financial results that missed revenue expectations and provided a weak forecast for the fourth quarter.
For the third quarter, the digital media measurement firm posted revenue of $188.6 million. While this was an 11.2% increase from the same period last year, it fell short of analyst forecasts of $190.2 million. Profitability also disappointed, with adjusted earnings per share of $0.22 missing Wall Street's expectations of $0.27. Looking ahead, DoubleVerify's guidance for the fourth quarter also underwhelmed investors. The company projected revenue between $207 million and $211 million, with the midpoint of this range falling below the consensus estimate of $210.8 million, suggesting concerns about future growth.
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What Is The Market Telling Us
DoubleVerify’s shares are somewhat volatile and have had 12 moves greater than 5% over the last year. But moves this big are rare even for DoubleVerify and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 8 months ago when the stock dropped 36.9% on the news that the company reported weak fourth-quarter 2024 results, which missed analysts' expectations across all key metrics. Its revenue and EBITDA guidance for next quarter also fell short of Wall Street's estimates. DV noted the loss of a CPG customer in the quarter due to that customer's struggles with commodity price inflation. The company also continues to see headwinds from a group of 6 consumer companies that reduced spend a few quarters ago as well. Tailwinds that should be buoying the business such as social media, connected TV, and winning customers from competitor Moat are not making up for the challenges faced. We note that ad tech companies had weaker quarters in general, as both The Trade Desk and PubMatic missed on revenue and guided below for next quarter. DV wasn't spared, and the stock traded down.
DoubleVerify is down 52.1% since the beginning of the year, and at $9.24 per share, it is trading 60% below its 52-week high of $23.07 from February 2025. Investors who bought $1,000 worth of DoubleVerify’s shares at the IPO in April 2021 would now be looking at an investment worth $256.53.
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