1. DRCT's revenue for 2024 matched revised guidance at $62.3 million. 2. New initiatives expected to generate $5 to $10 million in revenue in 2025. 3. Management reaffirms 2025 revenue guidance of $90 to $110 million. 4. Court victory in defamation lawsuit enhances reputation and confidence. 5. Company focused on cost reduction and performance optimization strategies.
The reaffirmed revenue guidance and expected revenue growth from diversification and new clients indicate positive market sentiment and an upward trend. DRCT's strategies are reminiscent of successful rebounds in similarly positioned tech stocks that refocused after downturns.
The article presents key financial results, strategic initiatives, and legal victories that provide critical insights into DRCT's operational effectiveness and growth prospects, underscoring a turnaround narrative that could influence investor confidence significantly.
With strategic initiatives taking effect in the second half of 2025, DRCT's recovery and growth appear oriented toward sustainable long-term performance, paralleling recovery trends in growth-oriented companies post-restructure.
HOUSTON, March 27, 2025 /PRNewswire/ -- Direct Digital Holdings, Inc. (Nasdaq: DRCT) ("Direct Digital Holdings" or the "Company"), a leading advertising and marketing technology platform operating through its companies Colossus Media, LLC ("Colossus SSP") and Orange 142, LLC ("Orange 142"), today announced financial results for the fourth quarter and full year ended December 31, 2024.
Mark D. Walker, Chairman and Chief Executive Officer, commented, "We are pleased to announce that despite the challenges faced this past year, we delivered fourth quarter results in-line with our revised revenue guidance range. The combination of our revenue optimization strategies and cost-saving initiatives has positioned Direct Digital Holdings for future growth as we look to rebuild to previous levels. Starting last year, we began further expanding sources of our revenue and conducting a cost savings review, which has resulted in a more diversified and efficient business model reflecting significant operating expense reduction sequentially when compared to the first half of the year."
Walker continued, "In the third quarter of 2024, we announced the launch of Colossus Connections, an aggressive initiative to accelerate our direct integration efforts with leading demand-side platforms and that we have already signed up two of the leading partners in the marketplace. We are expecting to see revenue impacts as we move through 2025, once integration is complete in the second half of 2025. On the buy-side, since we unified our two divisions, Orange 142 and Huddled Masses, we have been keenly focused on small- and mid-sized clients, who are increasingly shifting advertising budgets to digital and require support to navigate its complexities and optimize their ad spend. We have already brought on clients in new verticals which are expected to generate additional incremental revenue of $5 million to $10 million in 2025, with full impact starting in the second quarter of this year."
"As we look ahead to 2025, we are reiterating revenue guidance of $90 million to $110 million, underscoring our confidence in our ability to scale up both our buy- and sell-side businesses," said Walker. "In particular, we expect the second half of the year to deliver strong gains as we experience the full effect of new direct sell-side partners coming online. While our first quarter tends to be slower than the fourth quarter related to seasonality in our sell-side business, we are seeing sequential improvement in the first quarter of this year over November and December of last year, and we remain confident that our recalibrated approach will continue to enable us to capture market share and strengthen our leading advertising and marketing technology offering."
Keith Smith, President, added, "In addition to our optimized business model, our $20 million Equity Reserve Facility with New Circle Principal Investments, announced in October, has also provided us with enhanced financial flexibility to execute on our various strategic initiatives while also strengthening our balance sheet. This new financing source supports both our technology investments and growth objectives as we continue to evolve our platform capabilities and position Direct Digital Holdings for sustainable, long-term growth."
On the topic of recent litigation, Smith commented, "I am thrilled to report that earlier this month, we secured a significant victory in the courts. Our defamation lawsuit against those who intentionally distributed misinformation about our business last May was validated with a court ruling that our case may continue despite attempts by the other party to have our complaint dismissed. We believe this decision speaks to the substance of our allegations regarding inaccurate and false statements targeting our technologies and we look forward to running our business while we continue to pursue a judgment in the case."
Fourth Quarter and Year-to-Date Updates
Assuming the U.S. economy does not experience any major economic conditions that deteriorate or otherwise significantly reduce advertiser demand, and subject to certain uncertainties related to the ramp-up of our businesses and general market conditions, Direct Digital Holdings reiterates its full-year revenue guidance of $90 million to $110 million for FY 2025 as the Company rebuilds to previous levels.
Diana Diaz, Chief Financial Officer, stated, "As we continue to refocus the company, our lower cost structure, optimized performance and focus on driving efficiencies across the business are key to our accelerated path to return to profitability. We continue to be judicious in adding any new costs and we remain confident in our business to deliver strong performance for our shareholders this year."
Conference Call and Webcast Details
Direct Digital will host a conference call on March 27, 2025 at 5:00 PM ET to discuss the Company's fourth quarter and full year 2024 financial results. The live webcast and replay can be accessed at https://ir.directdigitalholdings.com/. Please access the website at least fifteen minutes prior to the call to register, download and install any necessary audio software. For those who cannot access the webcast, a replay will be available at https://ir.directdigitalholdings.com/ for a period of twelve months.
(1) "Adjusted EBITDA" and "Adjusted Operating Expenses" are non-GAAP financial measures. The section titled "Non-GAAP Financial Measures" below describes our usage of non-GAAP financial measures and provides reconciliations between historical GAAP and non-GAAP information contained in this press release.
This press release contains forward-looking statements within the meaning of federal securities laws that are subject to certain risks, trends and uncertainties. We use words such as "could," "would," "may," "might," "will," "expect," "likely," "believe," "continue," "anticipate," "estimate," "intend," "plan," "project" and other similar expressions to identify forward-looking statements, but not all forward-looking statements include these words. All of our forward-looking statements involve estimates and uncertainties that could cause actual results to differ materially from those expressed in or implied by the forward-looking statements. Accordingly, any such statements are qualified in their entirety by reference to the information described under the caption "Risk Factors" and elsewhere in our most recent Annual Report on Form 10 K (the "Form 10-K") and subsequent periodic and or current reports filed with the Securities and Exchange Commission (the "SEC").
The forward-looking statements contained in this press release are based on assumptions that we have made in light of our industry experience and our perceptions of historical trends, current conditions, expected future developments and other factors we believe are appropriate under the circumstances. As you read and consider this press release, you should understand that these statements are not guarantees of performance or results. They involve risks, uncertainties (many of which are beyond our control) and assumptions.
Although we believe that these forward-looking statements are based on reasonable assumptions, you should be aware that many factors could affect our actual operating and financial performance and cause our performance to differ materially from the performance expressed in or implied by the forward-looking statements. We believe these factors include, but are not limited to, the following: our ability to sell Class A common stock under our equity reserve facility; the restrictions and covenants imposed upon us by our credit facilities; the substantial doubt about our ability to continue as a going concern, which may hinder our ability to obtain future financing; our ability to secure additional financing to meet our capital needs; our ineligibility to file short-form registration statements on Form S-3, which may impair our ability to raise capital; our failure to satisfy applicable listing standards of the Nasdaq Capital Market resulting in a potential delisting of our common stock; failure to remedy any listing deficiencies noted in the deficiency letters from the Listing Qualifications Department of The Nasdaq Stock Market LLC; any significant fluctuations caused by our high customer concentration; risks related to non-payment by our clients; reputational and other harms caused by our failure to detect advertising fraud; operational and performance issues with our platform, whether real or perceived, including a failure to respond to technological changes or to upgrade our technology systems; restrictions on the use of third-party "cookies," mobile device IDs or other tracking technologies, which could diminish our platform's effectiveness; unfavorable publicity and negative public perception about our industry, particularly concerns regarding data privacy and security relating to our industry's technology and practices, and any perceived failure to comply with laws and industry self-regulation; our failure to manage our growth effectively; the difficulty in identifying and integrating any future acquisitions or strategic investments; any changes or developments in legislative, judicial, regulatory or cultural environments related to information collection, use and processing; challenges related to our buy-side clients that are destination marketing organizations and that operate as public/private partnerships; any strain on our resources or diversion of our management's attention as a result of being a public company; the intense competition of the digital advertising industry and our ability to effectively compete against current and future competitors; any significant inadvertent disclosure or breach of confidential and/or personal information we hold, or of the security of our or our customers', suppliers' or other partners' computer systems; as a holding company, we depend on distributions from Direct Digital Holdings, LLC ("DDH LLC") to pay our taxes, expenses (including payments under the Tax Receivable Agreement) and any amount of any dividends we may pay to the holders of our common stock; the fact that DDH LLC is controlled by DDM, whose interest may differ from those of our public stockholders; any failure by us to maintain or implement effective internal controls or to detect fraud; and other factors and assumptions discussed in our Form 10-K and subsequent periodic and current reports we may file with the SEC.
Should one or more of these risks or uncertainties materialize, or should any of these assumptions prove to be incorrect, our actual operating and financial performance may vary in material respects from the performance projected in these forward-looking statements. Further, any forward-looking statement speaks only as of the date on which it is made, and except as required by law, we undertake no obligation to update any forward-looking statement contained in this press release to reflect events or circumstances after the date on which it is made or to reflect the occurrence of anticipated or unanticipated events or circumstances, and we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. New factors that could cause our business not to develop as we expect emerge from time to time, and it is not possible for us to predict all of them. Further, we cannot assess the impact of each currently known or new factor on our results of operations or the extent to which any factor, or combination of factors, may cause actual results to differ materially from the performance contained in any forward-looking statements.
About Direct Digital Holdings
Direct Digital Holdings (Nasdaq: DRCT) combines cutting-edge sell-side and buy-side advertising solutions, providing data-driven digital media strategies that enhance reach and performance for brands, agencies, and publishers of all sizes. Our sell-side platform, Colossus SSP, offers curated access to premium, growth-oriented media properties throughout the digital ecosystem. On the buy-side, Orange 142 delivers customized, audience-focused digital marketing and advertising solutions that enable mid-market and enterprise companies to achieve measurable results across a range of platforms, including programmatic, search, social, CTV, and influencer marketing. With extensive expertise in high-growth sectors such as Energy, Healthcare, Travel & Tourism, and Financial Services, our teams deliver performance strategies that connect brands with their ideal audiences.
At Direct Digital Holdings, we prioritize personal relationships by humanizing technology, ensuring each client receives dedicated support and tailored digital marketing solutions regardless of company size. This empowers everyone to thrive by generating billions of monthly impressions across display, CTV, in-app, and emerging media channels through advanced targeting, comprehensive data insights, and cross-platform activation. DDH is "Digital advertising built for everyone."