As Q4 earnings season comes to a close, it’s time to take stock of this quarter's best and worst performers amongst the advertising software stocks, including The Trade Desk (NASDAQ:TTD) 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 weaker Q4; on average, revenues beat analyst consensus estimates by 1.42%, while on average next quarter revenue guidance was 0.74% under consensus. Investors abandoned cash burning companies since high interest rates will make it harder to raise capital, but advertising software stocks held their ground better than others, with the share prices up 9.61% since the previous earnings results, on average.
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 $490.7 million, up 24% year on year, missing analyst expectations by 0.22%. It was a mixed quarter for the company, with a meaningful improvement in gross margin but a miss of the top line analyst estimates.
“The Trade Desk outpaced nearly all areas of digital advertising in 2022, with 32% revenue growth year over year, and a record $491 million of revenue in the fourth quarter alone. This performance was underscored by significant profitability and cash flow. In an unpredictable macro environment, our growing relationships with agencies and brands is testament to the value of the open internet over the limitations of walled gardens,” said Jeff Green, founder and CEO of The Trade Desk.
The stock is up 22.2% since the results and currently trades at $61.
Is now the time to buy The Trade Desk? Access our full analysis of the earnings results here, it's free.
Best Q4: 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 $175.1 million, up 29.9% year on year, beating analyst expectations by 9.06%. It was a decent quarter for the company, with an impressive beat of analyst estimates but underwhelming guidance for the next year.
Zeta scored the strongest analyst estimates beat, fastest revenue growth, and highest full year guidance raise among its peers. The stock is up 22% since the results and currently trades at $11.05.
Is now the time to buy Zeta? Access our full analysis of the earnings results here, it's free.
Weakest Q4: 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 $74.3 million, down 1.67% year on year, missing analyst expectations by 3.07%. It was a weak quarter for the company, with slow revenue growth and underwhelming revenue guidance for the next quarter.
PubMatic had the weakest performance against analyst estimates in the group. The stock is down 8.9% since the results and currently trades at $13.82.
Read our full analysis of PubMatic's results here.
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 $158.6 million, up 12.8% year on year, in line with analyst expectations. It was a weak quarter for the company, with a decline in net revenue retention rate and decelerating customer growth.
LiveRamp had the weakest full year guidance update among the peers. The company added 2 enterprise customers paying more than $1m annually to a total of 94. The stock is down 19.5% since the results and currently trades at $21.93.
Read our full, actionable report on LiveRamp here, it's free.
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 $133.6 million, up 26.6% year on year, in line with analyst expectations. Despite the stock rising on the results, it was a slower quarter for the company, with underwhelming guidance for the next year.
The stock is up 16% since the results and currently trades at $30.15.
Read our full, actionable report on DoubleVerify here, it's free.
The author has no position in any of the stocks mentioned