Looking back on advertising software stocks’ Q3 earnings, we examine this quarter’s best and worst performers, including LiveRamp (NYSE:RAMP) 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 strong Q3. As a group, revenues beat analysts’ consensus estimates by 4.6% while next quarter’s revenue guidance was 0.9% above.
Luckily, advertising software stocks have performed well with share prices up 14.3% on average since the latest earnings results.
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 $185.5 million, up 16% year on year. This print exceeded analysts’ expectations by 5.3%. Overall, it was a strong quarter for the company with a solid beat of analysts’ EBITDA estimates and a meaningful improvement in its net revenue retention rate.
Interestingly, the stock is up 16.7% since reporting and currently trades at $30.71.
Is now the time to buy LiveRamp? Access our full analysis of the earnings results here, it’s free.
Best Q3: 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 $268.3 million, up 42% year on year, outperforming analysts’ expectations by 6.3%. The business had a stunning quarter with a solid beat of analysts’ billings estimates and EBITDA guidance for next quarter exceeding analysts’ expectations.
Zeta scored the fastest revenue growth and highest full-year guidance raise among its peers. Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 37.1% since reporting. It currently trades at $23.14.
Is now the time to buy Zeta? Access our full analysis of the earnings results here, it’s free.
Weakest Q3: 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 $628 million, up 27.3% year on year, exceeding analysts’ expectations by 1.2%. Still, it was a mixed quarter as it posted a slight miss of analysts’ billings estimates.
As expected, the stock is down 1.4% since the results and currently trades at $130.70.
Read our full analysis of The Trade Desk’s results here.
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 $1.20 billion, up 38.6% year on year. This result surpassed analysts’ expectations by 5.9%. It was an exceptional quarter as it also logged an impressive beat of analysts’ EBITDA estimates.
The stock is up 102% since reporting and currently trades at $340.67.
Read our full, actionable report on AppLovin here, it’s free.
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 $71.79 million, up 12.7% year on year. This number surpassed analysts’ expectations by 8.7%. Zooming out, it was a satisfactory quarter as it also recorded an impressive beat of analysts’ EBITDA estimates.
PubMatic pulled off the biggest analyst estimates beat but had the slowest revenue growth among its peers. The stock is up 2.9% since reporting and currently trades at $16.89.
Read our full, actionable report on PubMatic here, it’s free.
Market Update
As a result of the Fed's rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed's 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump's victory in the US Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain. Said differently, there's still much uncertainty around 2025.
Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Quality Compounder Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
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