Looking back on advertising software stocks’ Q4 earnings, we examine this quarter’s best and worst performers, including Zeta (NYSE: ZETA) 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 7 advertising software stocks we track reported a mixed Q4. As a group, revenues beat analysts’ consensus estimates by 1.6% while next quarter’s revenue guidance was in line.

Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 34.3% since the latest earnings results.

Best Q4: 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 $314.7 million, up 49.6% year on year. This print exceeded analysts’ expectations by 6.7%. Overall, it was an exceptional quarter for the company with an impressive beat of analysts’ billings estimates and EBITDA guidance for next quarter exceeding analysts’ expectations.

“At Zeta, we’ve consistently skated to where the puck is going. Our early investments in AI and first-party data are resonating with customers and prospects, fueling our record fourth quarter results and contributing to our market share gains,” said David A. Steinberg, Co-Founder, Chairman, and CEO of Zeta.

Zeta pulled off the fastest revenue growth and highest full-year guidance raise of the whole group. Investor expectations, however, were likely higher than Wall Street’s published projections, leaving some wishing for even better results (analysts’ consensus estimates are those published by big banks and advisory firms, not the investors who make buy and sell decisions). The stock is down 37.9% since reporting and currently trades at $12.80.

Is now the time to buy Zeta? Access our full analysis of the earnings results here, it’s free.

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 $1.37 billion, up 44% year on year, outperforming analysts’ expectations by 8.6%. The business had a very strong quarter with EBITDA guidance for next quarter exceeding analysts’ expectations and a solid beat of analysts’ EBITDA estimates.

AppLovin delivered the biggest analyst estimates beat among its peers. Although it had a fine quarter compared to its peers, the market seems unhappy with the results as the stock is down 26.9% since reporting. It currently trades at $277.91.

Is now the time to buy AppLovin? Access our full analysis of the earnings results here, it’s free.

Weakest Q4: 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 $741 million, up 22.3% year on year, falling short of analysts’ expectations by 2.3%. It was a disappointing quarter as it posted EBITDA guidance for next quarter missing analysts’ expectations and a significant miss of analysts’ billings estimates.

As expected, the stock is down 55.1% since the results and currently trades at $54.96.

Read our full analysis of The Trade Desk’s results here.

Integral Ad Science (NASDAQ: IAS)

Founded in 2009, Integral Ad Science (NASDAQ: IAS) provides digital advertising verification and optimization solutions, ensuring that ads are viewable by real people in brand-safe environments across various platforms and devices.

Integral Ad Science reported revenues of $153 million, up 14% year on year. This number beat analysts’ expectations by 2.7%. It was a strong quarter as it also logged a solid beat of analysts’ EBITDA estimates.

Integral Ad Science had the weakest full-year guidance update among its peers. The stock is down 28% since reporting and currently trades at $6.95.

Read our full, actionable report on Integral Ad Science 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 $195.4 million, up 12.4% year on year. This result surpassed analysts’ expectations by 1.7%. Taking a step back, it was a mixed quarter as it also recorded an impressive beat of analysts’ EBITDA estimates but decelerating customer growth.

The company kept the number of enterprise customers paying more than $1 million annually flat at a total of 125. The stock is down 23.3% since reporting and currently trades at $26.47.

Read our full, actionable report on LiveRamp here, it’s free.

Market Update

As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.

Want to invest in winners with rock-solid fundamentals? Check out our Hidden Gem Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

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