Q2 Advertising Software Earnings Review: First Prize Goes to Zeta (NYSE:ZETA)

As the Q2 earnings season comes to a close, it’s time to take stock of this quarter’s best and worst performers in the advertising software industry, including Zeta (NYSE:ZETA) 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.

Valuation multiples for many growth stocks have not yet reverted to their early 2021 highs, but the market was optimistic at the end of 2023 due to cooling inflation. This year has been a different story as mixed inflation signals have led to market volatility. Thankfully, advertising software stocks have been resilient with share prices up 7.9% on average since the latest earnings results.

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. This print exceeded analysts’ expectations by 7.2%. Overall, it was a strong quarter for the company with an impressive beat of analysts’ billings estimates and optimistic revenue guidance for the next quarter.

“Investments we made over the last seven years to put Artificial Intelligence and data at the core of our platform are now helping us accelerate the marketing cloud replacement cycle and our overall growth rate,” said David A. Steinberg, Co-Founder, Chairman, and CEO of Zeta.

Zeta achieved the biggest analyst estimates beat and highest full-year guidance raise of the whole group. Unsurprisingly, the stock is up 23.4% since reporting and currently trades at $26.50.

Is now the time to buy Zeta? Access our full analysis of the earnings results here, rrently trades at $26.50.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, outperforming analysts’ expectations by 1.1%. 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 market seems happy with the results as the stock is up 18.4% since reporting. It currently trades at $104.46.

Is now the time to buy The Trade Desk? Access our full analysis of the earnings results here, it’s free.

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, falling short of analysts’ expectations by 4.1%. It was a weak quarter for the company with underwhelming revenue guidance for the next quarter.

PubMatic had the weakest performance against analyst estimates, slowest revenue growth, and weakest full-year guidance update in the group. As expected, the stock is down 20.4% since the results and currently trades at $15.61.

Read our full analysis of PubMatic’s results here.

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, surpassing analysts’ expectations by 2.4%. Revenue aside, it was a slower quarter for the company with decelerating customer growth and a decline in its gross margin.

The company kept the number of enterprise customers paying more than $1m annually flat at a total of 115. The stock is down 3.8% since reporting and currently trades at $25.92.

Read our full, actionable report on LiveRamp here, it’s free.

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 $1.08 billion, up 44% year on year, in line with analysts’ expectations. Revenue aside, it was a mixed quarter for the company with a meaningful improvement in its gross margin.

AppLovin delivered the fastest revenue growth among its peers. The stock is up 38.2% since reporting and currently trades at $92.85.

Read our full, actionable report on AppLovin here, it’s free.

Join Paid Stock Investor Research

Help us make StockStory more helpful to investors like yourself. Join our paid user research session and receive a $50 Amazon gift card for your opinions. Sign up here.