As Q3 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 Q3; on average, revenues beat analyst consensus estimates by 1.6%, while on average next quarter revenue guidance was 5.21% under consensus. Tech stocks have been under pressure as inflation makes their long-dated profits less valuable, but advertising software stocks held their ground better than others, with the share prices up 5.6% 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 $394.7 million, up 31.1% year on year, beating analyst expectations by 2.13%. It was a mixed quarter for the company, with underwhelming revenue guidance for the next quarter but solid revenue growth.
“Q3 was another strong quarter for The Trade Desk with 31% growth that significantly outpaced the market. This performance underlines the value of decisioned media buying on The Trade Desk as the world’s largest advertisers seek to maximize return on every campaign dollar,” said Jeff Green, founder and CEO of The Trade Desk.
The stock is up 7.05% since the results and currently trades at $46.44.
Is now the time to buy The Trade Desk? Access our full analysis of the earnings results here, it's free.
Best Q3: 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 $152.2 million, up 32.2% year on year, beating analyst expectations by 7.94%. It was a very strong quarter for the company, with an impressive beat of analyst estimates and solid top line growth.
Zeta pulled off the strongest analyst estimates beat and highest full year guidance raise among its peers. The stock is up 5.72% since the results and currently trades at $8.87.
Is now the time to buy Zeta? Access our full analysis of the earnings results here, it's free.
Slowest Q3: 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 $713 million, down 1.9% year on year, missing analyst expectations by 2.07%. It was a weak quarter for the company, with a full year guidance missing analysts' expectations and declining revenue.
AppLovin had the slowest revenue growth in the group. The stock is down 21.7% since the results and currently trades at $10.74.
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 $112.2 million, up 35% year on year, beating analyst expectations by 2.73%. It was a decent quarter for the company, with exceptional revenue growth.
DoubleVerify pulled off the fastest revenue growth among the peers. The stock is up 0.63% since the results and currently trades at $23.61.
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 $147 million, up 15.5% year on year, beating analyst expectations by 2.6%. It was a decent quarter for the company, with accelerating customer growth but a decline in net revenue retention rate.
The company added 2 enterprise customers paying more than $1m annually to a total of 92. The stock is up 54.8% since the results and currently trades at $24.16.
The author has no position in any of the stocks mentioned