Direct Digital stock price drops 5% before market open; Q4 loss but revenue exceeds expectations

LootboxPhobia · 2026-04-01T19:37:48+00:00

Direct Digital Holdings announced Q4 results, with losses exceeding expectations but revenue surpassing estimates, and buyer advertising business grew by 28%. Net loss was $12.6 million, mainly due to debt repayment and exit costs. Total revenue for fiscal year 2025 declined by 44%, with operating expenses reduced by 18%.

LootboxPhobia

2026-04-01 19:37:48

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Houston - Direct Digital Holdings (NASDAQ:DRCT) reported fourth-quarter results on Wednesday that missed expectations for profit, but revenue exceeded expectations.

The company’s stock price fell 4.94% in premarket trading.

This digital advertising platform posted a loss of $22.00 per share in the fourth quarter, far worse than analysts’ expected loss of $0.24 per share. Revenue came in at $8.41 million, above the broader market expectation of $7.69 million, but down 7% year over year from $9.10 million in the same period last year.

Growth was driven by the company’s buyer-side advertising business, with revenue reaching $8.20 million, up 28% year over year. Meanwhile, sell-side advertising revenue fell from $2.70 million in Q4 2024 to $0.20 million.

Direct Digital reduced operating expenses year over year by 12% to $6.70 million this quarter. Adjusted EBITDA loss was $3.60 million, compared with a $3.40 million loss in the prior-year period.

Net loss was $12.60 million, higher than the $6.60 million net loss in Q4 2024, primarily due to a $7.40 million total impact from debt payoff losses and exit costs.

Chairman and Chief Executive Officer Mark D. Walker said: “We are pleased to drive double-digit growth in our buyer-side business, driven primarily by new customers and demand growth we’re seeing from new verticals.”

Full-year fiscal 2025 revenue totaled $34.70 million, down 44% from $62.30 million in 2024. Buyer-side advertising revenue increased 10% to $29.40 million, while sell-side advertising revenue fell 85% to $5.30 million. The company cut full-year operating expenses by 18% to $25.20 million.

The company launched Ignition+ in March 2026, an AI-enabled programmatic media solution for large enterprise customers. As of December 31, 2025, Direct Digital held cash of $0.70 million, versus $1.40 million a year earlier.

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