Direct Digital (DRCT) Sees A Direct Hit on Earnings Release Despite Reporting Double-Digit Growth, Misses on Estimates

PRISM AdTech and Media Index company, Direct Digital Holdings, Inc. (DRCT) reported Q4 and FY 2023 earnings that cited 2023 revenues up 76%, its eighth consecutive quarter of double-digit growth, and net income for the year of $2M. The company guided 2024 revenue in the range of $170M-$190M. Despite the upbeat seeming headline news, the stock has been selling off and trading down ~35% which may lead some investors to question the movement.

On earnings releases, it is critical to understand what matters. In this instance, the company missed almost every estimate set by the Street, despite headline news that had sounded positive. Direct Digital disappointed on earnings and missed expectations, reporting Q4 EPS of ($0.08) vs Factset $0.02. Additionally, the $41M in Q4 revenues also missed consensus estimates of $42.5M and guidance for the year that was projected at $295.8M. Adjusted EBITDA for the quarter was in line.

Direct Digital Holdings is a company specializing in direct-to-consumer digital marketing and e-commerce. It focuses on leveraging digital channels to reach consumers directly, offering a range of products and services tailored to their needs.

About Direct Digital Holdings

Direct Digital Holdings (Nasdaq: DRCT), owner of operating companies Colossus SSP, Orange 142 and Huddled Masses, brings state-of-the-art sell- and buy-side advertising platforms together under one umbrella company. Direct Digital Holdings’ sell-side platform, Colossus SSP, offers advertisers of all sizes extensive reach within general market and multicultural media properties. The Company’s subsidiaries Huddled Masses and Orange 142 deliver significant ROI for middle market advertisers by providing data-optimized programmatic solutions at scale for businesses in sectors that range from travel to education to energy to healthcare to financial services. Direct Digital Holdings’ sell- and buy-side solutions manage on average over 115,000 clients monthly, generating over 326 billion impressions per month across display, CTV, in-app and other media channels.