The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s have a look at how the advertising software stocks have fared in Q1, starting with PubMatic (NASDAQ:PUBM).
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 Q1; on average, revenues beat analyst consensus estimates by 4.12%, while on average next quarter revenue guidance was 1.87% above 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 22.8% since the previous earnings results, on average.
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 $55.4 million, up 1.57% year on year, beating analyst expectations by 8.57%. It was a decent quarter for the company, with a beat of analyst estimates and optimistic guidance for the next quarter. However, gross margin declined, and net retention rate deteriorated.
“Our focused strategy, strong execution, and deep customer relationships drove our performance and market share gains in the quarter. Our results reinforce the value of our platform with innovative solutions that drive increased stickiness and superior outcomes for publishers and buyers,” said Rajeev Goel, co-founder and CEO at PubMatic.
PubMatic achieved the strongest analyst estimates beat but had the slowest revenue growth of the whole group. The stock is up 42.6% since the results and currently trades at $18.
Is now the time to buy PubMatic? Access our full analysis of the earnings results here, it's free.
Best Q1: 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 $715.4 million, up 14.4% year on year, beating analyst expectations by 3.08%. It was a very strong quarter for the company, with a significant improvement in gross margin. Additionally, revenue and adjusted EBITDA guidance for the next quarter came in ahead of Consensus, the latter beating by nearly 10%.
The stock is up 46.3% since the results and currently trades at $26.04.
Is now the time to buy AppLovin? Access our full analysis of the earnings results here, it's free.
Weakest Q1: 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 $148.6 million, up 4.87% year on year, missing analyst expectations by 0.67%. It was a weaker quarter for the company, with underwhelming guidance for the next year.
LiveRamp had the weakest performance against analyst estimates and weakest full year guidance update in the group. The company added one enterprise customer paying more than $1m annually to a total of 95. The stock is up 5.34% since the results and currently trades at $28.19.
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 $382.8 million, up 21.4% year on year, beating analyst expectations by 5.09%. It was a solid quarter for the company, with a decent beat of analyst estimates and strong sales guidance for the next quarter.
The stock is up 18% since the results and currently trades at $76.69.
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 $122.6 million, up 26.7% year on year, beating analyst expectations by 3.78%. It was a decent quarter for the company, with a beat of analyst estimates but a decline in gross margin. Guidance was strong as the company raised full-year revenue guidance to complete a "beat and raise" performance.
DoubleVerify scored the fastest revenue growth among the peers. The stock is up 35.7% since the results and currently trades at $37.8.
The author has no position in any of the stocks mentioned