Yahoo Finance A Look Back at Advertising Software Stocks' Q1 Earnings: Zeta (NYSE:ZETA) Vs The Rest Of The Pack
Quarterly earnings results are a good time to check in on a company’s progress, especially compared to its peers in the same sector. Today we are looking at Zeta (NYSE:ZETA) and the best and worst performers in the advertising software industry.
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. Valuation multiples for many growth stocks have not yet reverted to their early 2021 highs, but the market was optimistic at the end of 2023 due to cooling inflation. The start of 2024 has been a different story as mixed signals have led to market volatility, and advertising software stocks have held roughly steady amidst all this, with share prices up 3% on average since the previous earnings results.
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, exceeding 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 of the whole group. The company added 8 enterprise customers paying more than $100,000 annually to reach a total of 460. The stock is up 39.3% since reporting and currently trades at $18.11.
Is now the time to buy Zeta? 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 happy with the results as the stock is up 14.8% since reporting. It currently trades at $85.02.
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 had the weakest performance against analyst estimates, slowest revenue growth, and weakest full-year guidance update in the group. As expected, the stock is down 34.7% since the results and currently trades at $19.99.
Read our full analysis of DoubleVerify's results here.
The Trade Desk (NASDAQ:TTD)
Founded by former Microsoft engineers Jeff Green and Dave Pickles, The Trade Desk (NASDAQ:TTD) offers cloud-based software that uses data to help advertisers better plan, place, and target their online ads.
The Trade Desk reported revenues of $491.3 million, up 28.3% year on year, surpassing analysts' expectations by 2.2%. Overall, it was a strong quarter for the company with an impressive beat of analysts' billings estimates and strong sales guidance for the next quarter.
The stock is up 16.4% since reporting and currently trades at $100.21.
Read our full, actionable report on The Trade Desk here, it's free.
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, surpassing analysts' expectations by 7%. Revenue aside, 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 company added 10 enterprise customers paying more than $1m annually to reach a total of 115. The stock is flat since reporting and currently trades at $32.10.
Read our full, actionable report on LiveRamp here, it's free.
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