As Q1 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 LiveRamp (NYSE:RAMP) 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 Q1; on average, revenues beat analyst consensus estimates by 4.12%, while on average next quarter revenue guidance was 1.87% above consensus. Tech stocks have been hit the hardest as investors start to value profits over growth, but advertising software stocks held their ground better than others, with the share prices up 21.6% since the previous earnings results, on average.
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 a decline in the net revenue retention rate and underwhelming guidance for the next year.
LiveRamp CEO Scott Howe said, “We delivered an in-line quarter, hitting our key financial targets. We enter fiscal 2024 as a more efficient company, with a leaner cost structure and encouraging sales momentum, particularly upselling customers to our data collaboration platform. We expect this momentum to build in FY24 as our recently announced integrations and partnerships – such as with Google PAIR, Snowflake and Twilio – gain traction in the market.”
LiveRamp delivered the weakest performance against analyst estimates and weakest full year guidance update of the whole group. The company added one enterprise customer paying more than $1m annually to a total of 95. The stock is down 3.92% since the results and currently trades at $25.71.
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 and very optimistic guidance for the next quarter.
The stock is up 26.4% since the results and currently trades at $22.5.
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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 $157.6 million, up 24.8% year on year, beating analyst expectations by 4.89%. It was a mixed quarter for the company, with a significant improvement in gross margin but decelerating growth in large customers.
Zeta scored the highest full year guidance raise in the group. The company added 8 enterprise customers paying more than $100,000 annually to a total of 411. The stock is down 1.63% since the results and currently trades at $9.03.
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 very strong quarter for the company, with an impressive beat of analyst estimates and strong revenue guidance for the next quarter.
PubMatic pulled off the strongest analyst estimates beat but had the slowest revenue growth among the peers. The stock is up 49.8% since the results and currently trades at $18.9.
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 strong quarter for the company, with a decent beat of analyst estimates but a decline in gross margin. The company also raised full-year guidance to complete a "beat and raise" performance.
DoubleVerify pulled off the fastest revenue growth among the peers. The stock is up 32% since the results and currently trades at $36.76.
The author has no position in any of the stocks mentioned