As advertising software stocks’ Q4 earnings season wraps, let’s dig into this quarter’s best and worst performers, including PubMatic (NASDAQ:PUBM) 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 solid Q4; on average, revenues beat analyst consensus estimates by 3% while next quarter’s revenue guidance was 1.4% above consensus. Stocks have faced challenges as investors prioritize near-term cash flows, but advertising software stocks held their ground better than others, with the share prices up 13.5% on average since the previous earnings results.
Best Q4: PubMatic (NASDAQ:PUBM)
Founded in 2006 as an online ad platform helping ad sellers, Pubmatic (NASDAQ: PUBM) is a fully integrated cloud-based programmatic advertising platform.
PubMatic reported revenues of $84.6 million, up 13.9% year on year, topping analyst expectations by 8.2%. It was a stunning quarter for the company, with a significant improvement in its gross margin and optimistic revenue guidance for the next quarter.
“We ended 2023 on an incredibly high note, marking an inflection point in revenue growth as we accelerated to 14% year-over-year growth and strong profitability in the fourth quarter. These results highlight the strength of our platform, the value we deliver to publishers and buyers, our focused investments in key areas of the business over the last 18 months, and the increasing importance of sell-side technology across the ecosystem,” said Rajeev Goel, co-founder and CEO at PubMatic.
PubMatic scored the biggest analyst estimates beat of the whole group. The stock is up 43.2% since the results and currently trades at $23.72.
Is now the time to buy PubMatic? Access our full analysis of the earnings results here, it’s free.
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 $605.8 million, up 23.4% year on year, outperforming analyst expectations by 4%. It was an impressive quarter for the company, with optimistic revenue guidance for the next quarter and a solid beat of analysts’ billings estimates.
The stock is up 15.3% since the results and currently trades at $87.3.
Is now the time to buy The Trade Desk? Access our full analysis of the earnings results here, it’s free.
Weakest Q4: 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 $172.2 million, up 28.9% year on year, in line with analyst expectations. It was a weak quarter for the company, with full-year revenue guidance missing analysts’ expectations. On the other hand, revenue in the quarter beat slightly, and gross margin improved.
DoubleVerify had the weakest performance against analyst estimates and weakest full-year guidance update in the group. The stock is down 9.2% since the results and currently trades at $35.64.
Read our full analysis of DoubleVerify’s results here.
Zeta (NYSE:ZETA)
Co-founded by former Apple CEO John Scully, Zeta Global (NYSE:ZETA) provides software and data analytics tools that help companies market their products to billions of customers.
Zeta reported revenues of $210.3 million, up 20.1% year on year, surpassing analyst expectations by 1.3%. It was a mixed quarter for the company, with full-year revenue guidance beating analysts’ expectations but a decline in its gross margin.
Zeta delivered the highest full-year guidance raise among its peers. The company added 12 enterprise customers paying more than $100,000 annually to reach a total of 452. The stock is up 1.6% since the results and currently trades at $10.93.
Read our full, actionable report on Zeta 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 $173.9 million, up 9.6% year on year, surpassing analyst expectations by 1.2%. It was a solid quarter for the company, with accelerating customer growth and full-year revenue guidance topping analysts’ expectations.
LiveRamp had the slowest revenue growth among its peers. The company added 6 enterprise customers paying more than $1m annually to reach a total of 105. The stock is down 17.8% since the results and currently trades at $34.5.
Read our full, actionable report on LiveRamp here, it’s free.
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