The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how Integral Ad Science (NASDAQ:IAS) and the rest of the advertising software stocks fared in Q3.
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 7 advertising software stocks we track reported a strong Q3. As a group, revenues beat analysts’ consensus estimates by 2.8% while next quarter’s revenue guidance was 1.1% below.
In light of this news, share prices of the companies have held steady as they are up 1.7% on average since the latest earnings results.
Integral Ad Science (NASDAQ:IAS)
Processing over 280 billion digital ad interactions daily through its AI-powered technology, Integral Ad Science (NASDAQ:IAS) provides a cloud-based platform that measures and verifies digital advertising across devices, channels, and formats to ensure ads are viewable, fraud-free, and brand-safe.
Integral Ad Science reported revenues of $154.4 million, up 15.6% year on year. This print exceeded analysts’ expectations by 3.4%. Overall, it was a very strong quarter for the company with an impressive beat of analysts’ EBITDA estimates and a decent beat of analysts’ revenue estimates.
"We exceeded our revenue and adjusted EBITDA outlook for the third quarter with strength across our businesses," said Lisa Utzschneider, CEO of IAS.
The market was likely pricing in the results, and the stock is flat since reporting. It currently trades at $10.28.
Is now the time to buy Integral Ad Science? Access our full analysis of the earnings results here, it’s free for active Edge members.
Best Q3: AppLovin (NASDAQ:APP)
Sitting at the crossroads of the mobile advertising ecosystem with over 200 free-to-play games in its portfolio, AppLovin (NASDAQ:APP) provides software solutions that help mobile app developers market, monetize, and grow their apps through AI-powered advertising and analytics tools.
AppLovin reported revenues of $1.41 billion, up 17.3% year on year, outperforming analysts’ expectations by 4.5%. The business had an exceptional quarter with a solid beat of analysts’ EBITDA estimates and an impressive beat of analysts’ revenue estimates.
Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 1.7% since reporting. It currently trades at $600.49.
Is now the time to buy AppLovin? Access our full analysis of the earnings results here, it’s free for active Edge members.
Weakest Q3: DoubleVerify (NYSE:DV)
Using advanced analytics to evaluate over 17 billion digital ad transactions daily, DoubleVerify (NYSE:DV) provides AI-powered technology that verifies digital ads are viewable, fraud-free, brand-suitable, and displayed in the intended geographic location.
DoubleVerify reported revenues of $188.6 million, up 11.2% year on year, falling short of analysts’ expectations by 0.8%. It was a slower quarter as it posted revenue guidance for next quarter slightly missing analysts’ expectations.
DoubleVerify delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 4.3% since the results and currently trades at $10.50.
Read our full analysis of DoubleVerify’s results here.
LiveRamp (NYSE:RAMP)
Serving as the digital middleman in an increasingly privacy-conscious world, LiveRamp (NYSE:RAMP) provides technology that helps companies securely share and connect their customer data with trusted partners while maintaining privacy compliance.
LiveRamp reported revenues of $199.8 million, up 7.7% year on year. This print beat analysts’ expectations by 1%. It was a strong quarter as it also recorded a solid beat of analysts’ EBITDA estimates and a narrow beat of analysts’ annual recurring revenue estimates.
LiveRamp scored the highest full-year guidance raise among its peers. The company added 5 enterprise customers paying more than $1 million annually to reach a total of 132. The stock is up 5.2% since reporting and currently trades at $28.85.
Read our full, actionable report on LiveRamp here, it’s free for active Edge members.
PubMatic (NASDAQ:PUBM)
Powering billions of daily ad impressions across the open internet, PubMatic (NASDAQ:PUBM) operates a technology platform that helps publishers maximize revenue from their digital advertising inventory while giving advertisers more control and transparency.
PubMatic reported revenues of $67.96 million, down 5.3% year on year. This result topped analysts’ expectations by 6.1%. Overall, it was a strong quarter as it also logged a solid beat of analysts’ EBITDA estimates and an impressive beat of analysts’ revenue estimates.
PubMatic pulled off the biggest analyst estimates beat but had the slowest revenue growth among its peers. The stock is up 17.6% since reporting and currently trades at $9.
Read our full, actionable report on PubMatic here, it’s free for active Edge members.
Market Update
As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.
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