Digital media measurement and analytics provider DoubleVerify (NYSE: DV) missed Wall Street’s revenue expectations in Q4 CY2024, but sales rose 10.7% year on year to $190.6 million. Next quarter’s revenue guidance of $153 million underwhelmed, coming in 3% below analysts’ estimates. Its GAAP profit of $0.14 per share was 23.2% below analysts’ consensus estimates.
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DoubleVerify (DV) Q4 CY2024 Highlights:
- Revenue: $190.6 million vs analyst estimates of $196.9 million (10.7% year-on-year growth, 3.2% miss)
- EPS (GAAP): $0.14 vs analyst expectations of $0.18 (23.2% miss)
- Adjusted EBITDA: $73.84 million vs analyst estimates of $76.13 million (38.7% margin, 3% miss)
- Revenue Guidance for Q1 CY2025 is $153 million at the midpoint, below analyst estimates of $157.7 million
- EBITDA guidance for Q1 CY2025 is $39 million at the midpoint, below analyst estimates of $42.75 million
- Operating Margin: 20.3%, down from 21.9% in the same quarter last year
- Free Cash Flow Margin: 15.8%, down from 28.5% in the previous quarter
- Market Capitalization: $3.65 billion
“DoubleVerify delivered solid full-year results in 2024, with 15% revenue growth, 33% adjusted EBITDA margins, and continued expansion across CTV, Social, and international markets,” said Mark Zagorski, CEO of DoubleVerify.
Company Overview
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.
Advertising Software
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.
Sales Growth
A company’s long-term performance is an indicator of its overall quality. While any business can experience short-term success, top-performing ones enjoy sustained growth for years. Luckily, DoubleVerify’s sales grew at a solid 25.4% compounded annual growth rate over the last three years. Its growth beat the average software company and shows its offerings resonate with customers, a helpful starting point for our analysis.
This quarter, DoubleVerify’s revenue grew by 10.7% year on year to $190.6 million but fell short of Wall Street’s estimates. Company management is currently guiding for a 8.7% year-on-year increase in sales next quarter.
Looking further ahead, sell-side analysts expect revenue to grow 13.7% over the next 12 months, a deceleration versus the last three years. Despite the slowdown, this projection is healthy and suggests the market sees success for its products and services.
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Customer Acquisition Efficiency
The customer acquisition cost (CAC) payback period represents the months required to recover the cost of acquiring a new customer. Essentially, it’s the break-even point for sales and marketing investments. A shorter CAC payback period is ideal, as it implies better returns on investment and business scalability.
DoubleVerify is extremely efficient at acquiring new customers, and its CAC payback period checked in at 5.9 months this quarter. The company’s rapid recovery of its customer acquisition costs indicates it has a highly differentiated product offering and a strong brand reputation. These dynamics give DoubleVerify more resources to pursue new product initiatives while maintaining the flexibility to increase its sales and marketing investments.
Key Takeaways from DoubleVerify’s Q4 Results
We struggled to find many positives in these results as the company missed analysts' expectations across all key metrics. Its revenue and EBITDA guidance for next quarter also fell short of Wall Street’s estimates. Overall, this was a softer quarter. The stock traded down 12.5% to $19 immediately after reporting.
DoubleVerify didn’t show it’s best hand this quarter, but does that create an opportunity to buy the stock right now? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free.
