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 LiveRamp (NYSE:RAMP) 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 3.1% on average since the previous earnings results.
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, exceeding analysts' expectations by 7%. Overall, 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 stock is down 6.4% since reporting and currently trades at $30.25.
Is now the time to buy LiveRamp? 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 delivered the biggest analyst estimates beat and fastest revenue growth among its peers. The market seems content with the results as the stock is up 2.9% since reporting. It currently trades at $76.24.
Is now the time to buy AppLovin? Access our full analysis of the earnings results here, it's free.
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%. It was a weak quarter for the company with underwhelming revenue guidance for the next quarter and a decline in its gross margin.
DoubleVerify posted the weakest performance against analyst estimates, slowest revenue growth, and weakest full-year guidance update in the group. As expected, the stock is down 33.8% since the results and currently trades at $20.25.
Read our full analysis of DoubleVerify'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%. Zooming out, 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 7.6% since reporting and currently trades at $22.22.
Read our full, actionable report on PubMatic here, it's free.
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 $194.9 million, up 23.7% year on year, surpassing analysts' expectations by 4.2%. Overall, it was a strong quarter for the company with an impressive beat of analysts' billings estimates and optimistic revenue guidance for the next quarter.
Zeta pulled off the highest full-year guidance raise among its peers. The company added 8 enterprise customers paying more than $100,000 annually to reach a total of 460. The stock is up 57.3% since reporting and currently trades at $20.45.
Read our full, actionable report on Zeta here, it's free.
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