The earnings call presented a mixed picture with strategic advancements, especially in the buy-side operations and AI-driven efficiencies. However, the substantial decline in sell-side revenue and overall financial metrics, such as gross margin and net loss, highlighted ongoing challenges. The strategic initiatives and partnerships offer potential for future growth, but immediate financial struggles and decreased revenues paint a cautious outlook.

Company Guidance

During the third quarter of 2025, Direct Digital Holdings reported consolidated revenue of $8 million, down from $9.1 million in the same period of 2024. The buy-side revenue increased by 7% to $7.3 million, whereas sell-side revenue declined to $600,000 from $2.2 million the previous year, primarily due to decreased impression inventory. Gross margin fell to 28% from 39% in 2024. Operating expenses were reduced by 25% to $6.1 million, and the net loss improved to $5 million from $6.4 million. Adjusted EBITDA was a loss of $3 million, consistent with the prior year. The company converted $25 million in debt into Series A convertible preferred stock and expanded its equity line of credit to $100 million, enhancing financial flexibility.

Growth in Buy-Side Revenue

Buy-side revenue increased by 7% to $7.3 million, representing the majority of the company's consolidated revenue.

Strategic Partnership with ReachTV

Direct Digital Holdings announced a partnership between its subsidiary, Orange 142, and ReachTV, enhancing their buy-side business with new inventory and valuable data targeting segments.

AI-Driven Efficiencies

The company leveraged AI to increase its feature set by nearly 40%, create 10-plus new AI modules, and achieve significant cost savings through automation.

Successful Debt Conversion

Converted $25 million of existing debt into Series A convertible preferred stock, improving the company's shareholders' equity position and financial flexibility.

Operating Expense Reduction

Year-to-date operating expenses were reduced by $5.4 million, a 20% decrease compared to the first 9 months of 2024.

Direct Digital Holdings (DRCT) Earnings, Revenues Date & History

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DRCT Earnings History

Report Date	Fiscal Quarter	Forecast / EPS	Last Year's EPS	EPS YoY Change	Slides	Play Transcript
Mar 31, 2026	2025 (Q4)	-0.16 / -	-0.54	―	―	―
Nov 06, 2025	2025 (Q3)	-0.16 / -0.24	-0.71	66.20% (+0.47)	―
Aug 05, 2025	2025 (Q2)	-0.48 / -0.23	-0.16	-43.75% (-0.07)	―
May 06, 2025	2025 (Q1)	>-0.01 / -0.35	-0.11	-218.18% (-0.24)	―
Mar 27, 2025	2024 (Q4)	-0.40 / -0.54	-0.08	-575.00% (-0.46)	―
Nov 12, 2024	2024 (Q3)	0.11 / -0.71	0.23	-408.70% (-0.94)	―
Aug 08, 2024	2024 (Q2)	0.19 / 0.19	0.08	137.50% (+0.11)	―	―
May 09, 2024	2024 (Q1)	-0.14 / -0.15	-0.09	-66.67% (-0.06)	―	―
Mar 26, 2024	2023 (Q4)	0.26 / -0.08	0.01	-900.00% (-0.09)	―
Nov 09, 2023	2023 (Q3)	0.05 / 0.23	0.06	283.33% (+0.17)	―

The table shows recent earnings report dates and whether the forecast was beat or missed. See the change in forecast and EPS from the previous year.

Beat

Missed

DRCT Earnings-Related Price Changes

Report Date	Price 1 Day Before	Price 1 Day After	Percentage Change
Nov 06, 2025	$0.31	$0.21	-34.39%
Aug 05, 2025	$0.59	$0.48	-18.66%
May 06, 2025	$0.88	$0.69	-21.58%
Mar 27, 2025	$1.33	$0.73	-45.19%

Earnings announcements can affect a stock’s price. This table shows the stock's price the day before and the day after recent earnings reports, including the percentage change.