Q2 Earnings Review: Advertising Software Stocks Led by AppLovin (NASDAQ:APP)

As advertising software stocks’ Q2 earnings season wraps, let's dig into this quarter's best and worst performers, including AppLovin (NASDAQ:APP) and its peers.

The digital advertising market is large, growing and becoming more diverse, both in terms of audiences and media. This as a result drives a growing need for a software that enables advertisers to use data to automate and optimize ad placements.

The 6 advertising software stocks we track reported a decent Q2; on average, revenues beat analyst consensus estimates by 3.77%, while on average next quarter revenue guidance was 0.08% under consensus. Increasing interest rates hurt growth companies as investors search for near-term cash flows, but advertising software stocks held their ground better than others, with the share prices up 1.08% since the previous earnings results, on average.

Best Q2: 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 a provider of marketing and monetization tools for mobile app developers and also operates a portfolio of mobile games.

AppLovin reported revenues of $750.2 million, down 3.36% year on year, beating analyst expectations by 3.57%. It was an impressive quarter for the company, with optimistic revenue guidance for the next quarter and a significant improvement in its gross margin.

AppLovin delivered the slowest revenue growth of the whole group. The stock is up 45.6% since the results and currently trades at $42.82.

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

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 $171.8 million, up 25.1% year on year, beating analyst expectations by 6.08%. It was a very strong quarter for the company, with accelerating growth in large customers and a solid beat of analysts' revenue estimates.

Zeta scored the strongest analyst estimates beat, fastest revenue growth, and highest full year guidance raise among its peers. The company added 14 enterprise customers paying more than $100,000 annually to a total of 425. The stock is down 2.69% since the results and currently trades at $8.14.

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

Weakest Q2: PubMatic (NASDAQ:PUBM)

Founded in 2006, as an online ad platform focused on ad sellers, Pubmatic (NASDAQ: PUBM) is a fully integrated cloud-based programmatic advertising platform.

PubMatic reported revenues of $63.3 million, flat year on year, beating analyst expectations by 5.92%. It was a weaker quarter for the company, with next quarter's revenue and adjusted EBITDA guidance below Wall Street's expectations.

The stock is down 29.2% since the results and currently trades at $13.12.

Read our full analysis of PubMatic's results here.

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 $464.3 million, up 23.2% year on year, beating analyst expectations by 2.02%. It was a solid quarter for the company, with a significant improvement in its gross margin. It was also good to see the company raise its revenue and EBITDA guidance for the next quarter, topping Wall Street's estimates.

The stock is up 6.46% since the results and currently trades at $86.11.

Read our full, actionable report on The Trade Desk here, it's free.

LiveRamp (NYSE:RAMP)

Started in 2011 as a spin-out of RapLeaf, LiveRamp (NYSE:RAMP) provides software as a service that helps companies better target their marketing by merging offline and online data about their customers.

LiveRamp reported revenues of $154.1 million, up 8.31% year on year, beating analyst expectations by 4.82%. It was a mixed quarter for the company, with full-year revenue guidance ahead of Wall Street's estimates. It also recorded its first-ever quarter of positive GAAP operating income. On the other hand, its customer growth slowed.

The company added one enterprise customers paying more than $1m annually to a total of 96. The stock is up 12.3% since the results and currently trades at $30.43.

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

The author has no position in any of the stocks mentioned