Direct Digital Holdings (Nasdaq: DRCT), a key player in the digital advertising industry that owns and operates buy- and sell-side platforms Colossus SSP, Huddled Masses and Orange 142, reported strong upside performance on Thursday, far surpassing the Street’s quarterly consensus expectations.
Revenue was $59.5 million in the third quarter of 2023, an increase of $33.5 million, or 129% over the $26.0 million in the same period of 2022.
The company’s CEO, Mark D. Walker, highlighted the positive outcomes resulting from the significant investments his company has made in its technology stack, advertising platform, and operational structure over recent quarters, as well as its robust technology partnerships and a comprehensive business strategy that has effectively addressed the increasing demands of a growing customer base.
“We initially expected to see the impact of these investments in 2024, however, we are pleased to report that these benefits have arrived much earlier in 2023. Our strong technology partnerships and our overarching business strategy have enabled us to meet a growing number of customers’ demands and further the capabilities of our sell-side technology platform. On both the sell-side and the buy-side, increased spend from our buying partners has resulted in an associated increase in our impression count and organic growth profile with a direct positive impact on net income and adjusted EBITDA.”
This past quarter, the company processed over 400 billion monthly impressions through its sell-side advertising segment, an increase of 220% over the same period of 2022. Its sell-side advertising platforms also received over 34 billion monthly bid responses in the third quarter of 2023, an increase of over 210% over the same period in 2022. Its buy-side advertising segment served approximately 228 customers with buy-side revenue per customer increasing 14% compared to the same period of 2022.
President Keith Smith underscored the growth they are seeing was not only in the current quarter but also throughout the preceding year, attributed to a synergy of strategic investments, impactful partnerships, a distinctive approach to advertising solutions and favorable market conditions. He noted the company has adeptly navigated the shifting landscape of ad spend, particularly towards digital media, establishing a strong position in the industry.
The company’s success is further underscored by its commitment to sustained growth and investment initiatives. This commitment, according to Smith, has been instrumental in yielding the strong third-quarter results that are being reported.
