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Q1 Rundown: DoubleVerify (NYSE:DV) Vs Other Advertising Software Stocks


Jabin Bastian /
2024/07/11 7:15 am EDT

As the Q1 earnings season comes to a close, it’s time to take stock of this quarter's best and worst performers in the advertising software industry, including DoubleVerify (NYSE:DV) 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 Q1; on average, revenues beat analyst consensus estimates by 5.2%. while next quarter's revenue guidance was 1.6% above consensus. Inflation progressed towards the Fed's 2% goal at the end of 2023, leading to strong stock market performance. The start of 2024 has been a bumpier ride, as the market switches between optimism and pessimism around rate cuts due to mixed inflation data, and advertising software stocks have held roughly steady amidst all this, with share prices up 0% on average since the previous earnings results.

Weakest Q1: 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 $140.8 million, up 14.8% year on year, exceeding analysts' expectations by 1.8%. Despite its top-line beat, it was a weak quarter for the company with underwhelming revenue guidance for the next quarter and a decline in its gross margin.

“We made solid progress across multiple growth vectors in the first quarter, ending the period above the high end of our guidance,” said Mark Zagorski, CEO of DoubleVerify.

DoubleVerify Total Revenue

DoubleVerify delivered the weakest performance against analyst estimates, slowest revenue growth, and weakest full-year guidance update of the whole group. The stock is down 35.4% since reporting and currently trades at $19.76.

Is now the time to buy DoubleVerify? 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 both a mobile game studio and provider of marketing and monetization tools for mobile app developers.

AppLovin reported revenues of $1.06 billion, up 47.9% year on year, outperforming analysts' expectations by 8.6%. It was an exceptional quarter for the company with an improvement in its gross margin.

AppLovin Total Revenue

AppLovin delivered the biggest analyst estimates beat and fastest revenue growth among its peers. The market seems happy with the results as the stock is up 13.7% since reporting. It currently trades at $84.22.

Is now the time to buy AppLovin? 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 $491.3 million, up 28.3% year on year, exceeding analysts' expectations by 2.2%. It was still a strong quarter for the company with an impressive beat of analysts' billings estimates and strong sales guidance for the next quarter.

Interestingly, the stock is up 15.5% since the results and currently trades at $99.39.

Read our full analysis of The Trade Desk's results here.

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 $66.7 million, up 20.4% year on year, surpassing analysts' expectations by 7.3%. Looking more broadly, it was a very strong quarter for the company with a significant improvement in its net revenue retention rate and strong sales guidance for the next quarter.

The stock is down 16.6% since reporting and currently trades at $20.04.

Read our full, actionable report on PubMatic 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 $171.9 million, up 15.6% year on year, surpassing analysts' expectations by 7%. Looking more broadly, it was a very strong quarter for the company with optimistic revenue guidance for the next quarter and a meaningful improvement in its net revenue retention rate.

The company added 10 enterprise customers paying more than $1m annually to reach a total of 115. The stock is down 4% since reporting and currently trades at $31.02.

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

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