Direct Digital's Stock Plunges 16.76% on Revenue Drop

On May 7, 2025, Direct Digital's stock price plummeted by 16.76% in pre-market trading, signaling a significant downturn for the company.

Direct Digital Holdings reported a substantial decline in revenue for the first quarter of 2025, with total revenue dropping to $8.2 million, a 63% decrease from the same period last year. This decline was primarily driven by a significant reduction in sell-side advertising segment revenue, which fell by 88%. Despite this, the company's buy-side revenue showed a modest increase of 6%, reaching $6.1 million.

During the earnings call, Direct Digital Holdings highlighted its cost-saving measures and growth strategies, aiming for a strong recovery in the second half of the year. The company maintained its full-year revenue guidance of $90 million to $110 million for 2025, despite the challenging first quarter.

Direct Digital Holdings reported an earnings per share (EPS) of -$0.35 for the first quarter of 2025, which surpassed the forecasted -$0.41. However, the revenue fell short of the estimated $9.40 million, reflecting the company's ongoing challenges in the current market environment.