The earnings call highlighted some positive aspects such as the growth in buy-side revenue, cost reduction efforts, and improvements in gross margin. However, these were overshadowed by significant challenges, including a large decline in overall revenue, a collapse in sell-side revenue, and increased losses. The company is optimistic about future revenue growth but is still recovering from disruptions in 2024.

Company Guidance

During Direct Digital Holdings' Q1 2025 earnings call, the company reported consolidated revenue of $8.2 million, with $6.1 million from the buy-side segment, marking a 6% increase from Q1 2024. The sell-side revenue was $2 million, down from $16.5 million in the same period last year, due to disruptions caused by a discredited blog post against their supply-side platform in mid-2024. Despite this challenge, they maintained their full-year revenue guidance of $90 million to $110 million, driven by expected growth in both buy-side and sell-side segments, particularly in the second half of 2025 as new direct sell-side partners integrate. Operating expenses decreased by 19% year-over-year as a result of cost-saving measures, including staff reductions. The company also reported a net loss of $5.9 million and adjusted EBITDA loss of $3 million for the quarter. Direct Digital is optimistic about the impact of new clients in emerging verticals and initiatives like Colossus Connection, aiming to enhance demand-side platform integration and improve supply path efficiency.

Buy-side Revenue Growth

Buy-side revenue increased by 6% to $6.1 million compared to the first quarter of 2024, with a $1.2 million increase from new verticals.

Cost Reduction Achievements

Operating expenses were reduced by $1.5 million or 19% compared to the first quarter of 2024, primarily due to lower payroll costs and staff reductions.

New Client Acquisition

Several clients across new verticals are expected to generate additional incremental revenue in the range of $5 million to $10 million in 2025.

Gross Margin Improvement

Gross margin increased to 29% from 22% in the first quarter of 2024, due to a shift towards higher margin buy-side revenue.

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
Nov 06, 2025	2025 (Q3)	-0.16 / -	-0.71	―	―	―
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)	―
Aug 10, 2023	2023 (Q2)	0.07 / 0.08	0.18	-55.56% (-0.10)	―

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
Aug 05, 2025	$0.60	$0.48	-20.00%
May 06, 2025	$0.88	$0.69	-21.59%
Mar 27, 2025	$1.33	$0.73	-45.11%
Nov 12, 2024	$2.64	$1.87	-29.17%

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.