Direct Digital Q2 revenue falls on lower DSP spending

Overview

• US adtech platform's Q2 revenue fell 23% yr/yr, driven by lower DSP customer spending

• Company posted wider adjusted EBITDA loss for Q2

• Company was not in compliance with certain financial covenants as of June 30, 2026

Outlook

• Company did not provide specific financial guidance for future quarters or the full year

Result Drivers

• DSP CUSTOMER SPENDING - Revenue decline was driven by a $2.5 mln drop in spending by DSP customers in Q2

• CORE BUSINESS GROWTH - Excluding DSP customers, revenue grew 3% in Q2, reflecting strong renewal rates, per CEO Mark D. Walker

• COST CONTROL - Operating expenses fell 7% yr/yr as company streamlined operations, per President Keith Smith

Company press release: ID:nPndyLJRa

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 1 "strong buy" or "buy", 1 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the advertising marketing peer group is "buy"

• Wall Street's median 12-month price target for Direct Digital Holdings Inc is $32.00, about 1,063.6% above its August 11 closing price of $2.75

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)