- Revenue increased to $26.0 million in the third quarter of 2022
- Company raises revenue guidance to $85 million to $90 million for 2022
- Sell-side advertising segment grew to $18.9 million
- Buy-side advertising segment grew to $7.1 million
Direct Digital Holdings, Inc. (Nasdaq: DRCT) reported a dramatic increase in third quarter revenue driven by sales across segments, prompting the digital advertising company to raise full year guidance.
Direct Digital Holdings has trained a focus on ethnic publications, reaching people who regularly seek out content with a connection to their heritage, from South American to India. While such readers are incredibly important consumers, the content they read is often not connected properly with advertisers.
“We are reaching an underserved community that hasn’t been reached,” Mark Walker, Chairman and Chief Executive Officer of Direct Digital Holdings, told IPO Edge in an interview. “Some of the smaller properties don’t have the tech.”
The company’s revenue increased to $26.0 million in the third quarter of 2022, compared with $8.4 million the prior year.
For the full year, Direct Digital Holdings has updated its revenue guidance from a range of $70 million-$75 million to $85 million-$90 million. Direct Digital sees an adjusted Ebitda margin in the double digits.
Mr. Walker pointed out that many media owners can be slow to understand digital advertising properly, often taking months to arrange partnerships whereas his platform can move fast. “We see the value of getting them into our ecosystem,” he said.
Mr. Walker explained that many advertisers whose customers are ethnic have barely begun to reach them on their favorites websites. “Once we work with them, advertisers feel a certain kind of connection,” he said.
He added that some media properties are just beginning to graduate from traditional to digital advertising and are looking for precisely what Direct Digital offers.
“We give them a certain authenticity when we provide an audience that’s Ebony, Latino, or Pink,” he said.