Advertising Software Stocks Q2 Teardown: PubMatic (NASDAQ:PUBM) Vs The Rest
As the Q2 earnings season wraps, let’s dig into this quarter’s best and worst performers in the advertising software industry, including PubMatic (NASDAQ:PUBM) 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 mixed Q2. As a group, revenues beat analysts’ consensus estimates by 1.3% while next quarter’s revenue guidance was 0.7% above.
Stocks, especially growth stocks with cash flows further into the future, had a good end of 2023. On the other hand, this year has seen more volatile stock market swings due to mixed inflation data. However, advertising software stocks have held steady amidst all this with share prices up 3.6% on average since the latest earnings results.
Weakest Q2: 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 $67.27 million, up 6.2% year on year. This print fell short of analysts’ expectations by 4.1%. Overall, it was a weak quarter for the company with underwhelming revenue guidance for the next quarter.
“We delivered growth in key secular areas of the business with revenue from omnichannel video, which includes CTV, up 19% year-over-year and mobile app up over 20%. Ad buying activity on PubMatic continued to grow as well, with monetized impressions up 12% over last year and supply path optimization activity representing over 50% for the first time.” said Rajeev Goel, co-founder and CEO at PubMatic.
PubMatic delivered the weakest performance against analyst estimates, slowest revenue growth, and weakest full-year guidance update of the whole group. Unsurprisingly, the stock is down 20.4% since reporting and currently trades at $15.61.
Read our full report on PubMatic here, it’s free.
Best Q2: 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 $227.8 million, up 32.6% year on year, outperforming analysts’ expectations by 7.2%. 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 delivered the biggest analyst estimates beat and highest full-year guidance raise among its peers. The market seems happy with the results as the stock is up 23.4% since reporting. It currently trades at $26.50.
Is now the time to buy Zeta? Access our full analysis of the earnings results 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 $176 million, up 14.2% year on year, exceeding analysts’ expectations by 2.4%. It was a slower quarter for the company with decelerating customer growth and a decline in its gross margin.
As expected, the stock is down 3.8% since the results and currently trades at $25.92.
Read our full analysis of LiveRamp’s results here.
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 $155.9 million, up 16.6% year on year, surpassing analysts’ expectations by 1.4%. Taking a step back, it was a decent quarter for the company with a meaningful improvement in its gross margin.
The stock is down 8.7% since reporting and currently trades at $19.73.
Read our full, actionable report on DoubleVerify here, it’s free.
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 $584.6 million, up 25.9% year on year, surpassing analysts’ expectations by 1.1%. Taking a step back, it was a solid quarter for the company with a meaningful improvement in its gross margin and strong sales guidance for the next quarter.
The stock is up 18.4% since reporting and currently trades at $104.46.
Read our full, actionable report on The Trade Desk here, it’s free.
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