The earnings call highlighted some positive developments such as growth in buy-side revenue and successful cost-cutting measures. However, these were overshadowed by a significant decline in sell-side revenue, overall revenue, and increased net losses, largely due to past disruptions. The company remains optimistic about future growth, maintaining full-year revenue guidance, but faces challenges in recovering from the previous year's setbacks.

Company Guidance

During the first quarter of 2025, Direct Digital Holdings focused on scaling its buy-side solution and rebuilding its sell-side business to drive revenue growth. The company reported consolidated revenue of $8.2 million, with $6.1 million from the buy-side segment, marking a 6% increase from the previous year, mainly due to a $1.2 million increase from new verticals. The sell-side segment recorded $2 million in revenue, consistent with the previous quarter, despite challenges from a market discredited blog post in 2024 impacting partnerships. Operating expenses were reduced by approximately $1.5 million, or 19%, compared to the first quarter of 2024. Direct Digital Holdings maintained its full-year revenue guidance of $90 million to $110 million, anticipating stronger gains in the second half of the year from new sell-side partnerships.

Buy-Side Revenue Growth

Buy-side segment revenue increased by 6% compared to Q1 2024, driven by $1.2 million growth from customers in new verticals.

Operating Expense Reduction

Operating expenses were reduced by 19%, approximately $1.5 million, compared to Q1 2024 due to cost-saving measures and staff reductions.

Gross Margin Improvement

Gross margin increased to 29% in Q1 2025 from 22% in Q1 2024, due to a shift towards higher-margin buy-side revenue.

Maintained Revenue Guidance

The company maintained its full-year revenue guidance of $90 million to $110 million, expecting growth in both buy-side and sell-side segments.

New Client Additions

Several clients were added across new verticals, expected to generate an additional $5 million to $10 million in revenue in 2025.

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
Aug 07, 2025	2025 (Q2)	-0.48 / -	-0.16	―	―	―
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)	―
May 11, 2023	2023 (Q1)	-0.08 / -0.09	-0.09	0.00% (0.00)	―	―

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
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%
Aug 08, 2024	$3.07	$3.41	+11.07%

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.