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Sep 30, 2024
Direct Digital Q3 2024 Earnings Report
Direct Digital Holdings announced financial results, launched Colossus Connections, and created a new unified buy-side operating structure.
Key Takeaways
Direct Digital Holdings reported a challenging quarter with a revenue decrease of 85% compared to the same period last year, primarily due to a disinformation campaign that disrupted business with partners and clients. Despite these challenges, the company has taken steps to address the issues, innovate its business, and secure new financing to support growth initiatives.
Revenue for Q3 2024 was $9.1 million, a decrease of 85% compared to Q3 2023.
Sell-side advertising revenue decreased by 96% to $2.2 million due to a major customer pausing its connection.
Buy-side advertising revenue decreased by 12% to $6.9 million.
The company launched Colossus Connections to accelerate direct integrations with demand-side platforms.
Direct Digital
Direct Digital
Direct Digital Revenue by Segment
Revenue by Segment
Sell-side advertising Revenue
CapyFin.comBuy-side advertising Revenue
CapyFin.com Forward Guidance
Direct Digital Holdings provided full-year revenue guidance of $60 million to $70 million for FY 2024 and $90 million to $110 million for FY 2025.
Positive Outlook
- Company expects to make investments to drive technological advancements for Colossus SSP.
- Colossus Connections initiative will aim to unlock direct access to more demand partners and revenue.
- Developing new curation and segment-based products in areas such as carbon, attention, and media quality.
- Expanding efforts to bring underrepresented publishers and creators into the programmatic ecosystem.
- Unification of Direct Digital Holdings' buy-side divisions, Orange 142 and Huddled Masses will enable the delivery of new capabilities.
Challenges Ahead
- Company experienced an unexpected business disruption among our partners, advertisers, and clients, including a major customer who paused its connection with our supply-side platform, Colossus SSP, which led to a temporary reduction in our revenues.
- The past few quarters have presented significant challenges for our company due to a targeted and defamatory disinformation campaign.
- It will take time to rebuild.
- The key driver for the reduction of our revenue from prior periods was the pause by our customer as described above.
- The weaponization of disinformation is posing a profound risk to small and up-and-coming businesses such as ours, and calls for a deeper dive into this pernicious and increasingly ubiquitous issue and an appropriate systemic response.
Revenue & Expenses
Visualization of income flow from segment revenue to net income