Wrapping up Q2 earnings, we look at the numbers and key takeaways for the advertising software stocks, including Integral Ad Science (NASDAQ: IAS) 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 Q2. As a group, revenues beat analysts’ consensus estimates by 2.6% while next quarter’s revenue guidance was in line.
In light of this news, share prices of the companies have held steady. On average, they are relatively unchanged since the latest earnings results.
Integral Ad Science (NASDAQ: IAS)
Processing over 280 billion digital ad interactions daily through its AI-powered technology, Integral Ad Science (NASDAQ: IAS) provides a cloud-based platform that measures and verifies digital advertising across devices, channels, and formats to ensure ads are viewable, fraud-free, and brand-safe.
Integral Ad Science reported revenues of $149.2 million, up 15.7% year on year. This print exceeded analysts’ expectations by 3.8%. Overall, it was a strong quarter for the company with an impressive beat of analysts’ EBITDA estimates and full-year EBITDA guidance beating analysts’ expectations.
"We grew revenue 16% with gains in all of our businesses driven by strong adoption of our AI-powered products by new and existing customers," said Lisa Utzschneider, CEO of IAS.
Interestingly, the stock is up 28.4% since reporting and currently trades at $10.20.
Is now the time to buy Integral Ad Science? Access our full analysis of the earnings results here, it’s free for active Edge members.
Best Q2: Zeta Global (NYSE: ZETA)
Powered by an AI engine that processes over one trillion consumer signals monthly, Zeta Global (NYSE: ZETA) operates a data-driven cloud platform that helps companies target, connect, and engage with consumers through personalized marketing across channels like email, social media, and video.
Zeta Global reported revenues of $308.4 million, up 35.4% year on year, outperforming analysts’ expectations by 3.9%. The business had a very strong quarter with an impressive beat of analysts’ EBITDA estimates and full-year EBITDA guidance exceeding analysts’ expectations.
Zeta Global scored the fastest revenue growth and highest full-year guidance raise among its peers. The market seems happy with the results as the stock is up 27.4% since reporting. It currently trades at $20.24.
Is now the time to buy Zeta Global? Access our full analysis of the earnings results here, it’s free for active Edge members.
AppLovin (NASDAQ: APP)
Sitting at the crossroads of the mobile advertising ecosystem with over 200 free-to-play games in its portfolio, AppLovin (NASDAQ: APP) provides software solutions that help mobile app developers market, monetize, and grow their apps through AI-powered advertising and analytics tools.
AppLovin reported revenues of $1.26 billion, up 16.5% year on year, falling short of analysts’ expectations by 1.2%. It was a slower quarter as it posted revenue guidance for next quarter slightly missing analysts’ expectations.
AppLovin delivered the weakest performance against analyst estimates in the group. Interestingly, the stock is up 46.6% since the results and currently trades at $573.51.
Read our full analysis of AppLovin’s results here.
PubMatic (NASDAQ: PUBM)
Powering billions of daily ad impressions across the open internet, PubMatic (NASDAQ: PUBM) operates a technology platform that helps publishers maximize revenue from their digital advertising inventory while giving advertisers more control and transparency.
PubMatic reported revenues of $71.1 million, up 5.7% year on year. This print surpassed analysts’ expectations by 4.4%. More broadly, it was a mixed quarter as it also logged a solid beat of analysts’ EBITDA estimates but EBITDA guidance for next quarter missing analysts’ expectations significantly.
PubMatic had the slowest revenue growth among its peers. The stock is down 19.4% since reporting and currently trades at $8.51.
Read our full, actionable report on PubMatic here, it’s free for active Edge members.
LiveRamp (NYSE: RAMP)
Serving as the digital middleman in an increasingly privacy-conscious world, LiveRamp (NYSE: RAMP) provides technology that helps companies securely share and connect their customer data with trusted partners while maintaining privacy compliance.
LiveRamp reported revenues of $194.8 million, up 10.7% year on year. This number beat analysts’ expectations by 1.9%. Aside from that, it was a mixed quarter as it also produced a solid beat of analysts’ EBITDA estimates but a miss of analysts’ annual recurring revenue estimates.
LiveRamp had the weakest full-year guidance update among its peers. The company lost 1 enterprise customers paying more than $1 million annually and ended up with a total of 127. The stock is down 15.7% since reporting and currently trades at $27.47.
Read our full, actionable report on LiveRamp here, it’s free for active Edge members.
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.
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