Direct Digital Holdings Reports Second Quarter 2025 Financial Results

About this update from Direct Digital Holdings, Inc.

Revenues Increased 24% Sequentially Over Q1 2025; Consolidated Gross Margin Improved Sequentially to 35% Compared to 29% in Q1 2025 Reduced Operating Expenses by 25% in Q2 2025 Compared to Q2 2024 Driven by Continued Progress with Strategic Cost Saving Initiatives Net Loss and Adjusted EBITDA 1  Loss Improved Sequentially Over Q1 2025 by $1.7 Million and $1.6 Million , Respectively, Reflecting a Sequential Increase in Buy-Side Revenue and Related Gross Profit HOUSTON , Aug. 5, 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 second quarter ended June 30, 2025 . Mark D. Walker , Chairman and Chief Executive Officer, commented, "Our focus in the first half of 2025 has been on rebuilding and growing our business following the disruption that substantially impacted our sell-side business in 2024. We delivered a sequential revenue increase of 24% in the second quarter, driven by strong growth in both our sell-side and buy-side businesses compared to the first quarter of 2025. We're encouraged by the activity we're seeing with our agency, brand, and publisher partners, and believe that our sell-side business is well positioned to benefit from the full integration of direct connections in the latter half of this year. We expect these connections to have a meaningful impact on our revenues and be a key driver of growth going forward.  Furthermore, during the second quarter we reduced operating expenses by 25% compared with the second quarter of 2024, reflecting our ongoing strategic initiatives to drive efficiencies and accelerate our return to profitability." Keith Smith , President, commented, "Through a challenging period, we are successfully implementing our plan to return the business to growth and value creation and remain focused on delivering improved performance in the back half of 2025." Second Quarter 2025 Highlights Second Quarter 2025 Financial Results Six Months Ended June 30, 2025 Financial Results Financial Outlook "We are pleased with the progress thus far this year and are positioned to deliver a strong back half of the year.  Due to uncertainty in the market as a whole as well as the timing of our continued rebuild of the sell-side business, we are unable to provide specific revenue guidance at this time. Once we have better visibility on the sell-side of our business, it is our intention to reinstate revenue guidance in the future," Mr. Walker commented. Diana Diaz , Chief Financial Officer, commented, "We are working toward a strong back half of the year driven by enhanced buy side activity through Orange 142 and the ongoing recovery of the Company's sell-side business as it rebuilds to historical levels. We believe that we are well positioned to continue driving cost reductions, innovation, operational efficiencies, and revenue growth as we rebuild our business back to profitability." Conference Call and Webcast Details  Direct Digital will host a conference call today, August 5, 2025 , at 5:00 p.m. Eastern Time to discuss the Company's second quarter 2025 financial results. The live webcast and replay can be accessed at  https://ir.directdigitalholdings.com/news-events/ir-calendar .  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/ . Cautionary Note Regarding Forward Looking Statements 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 for the fiscal year ended December 31, 2024 (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: 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; costs, risks and uncertainties related to restatement of certain prior period financial statements; 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 those 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."         NON-GAAP FINANCIAL MEASURES In addition to our results determined in accordance with U.S. generally accepted accounting principles ("GAAP"), including, in particular operating income, net cash provided by operating activities, and net income, we believe that earnings before interest, taxes, depreciation and amortization ("EBITDA"), as adjusted for expenses for the Equity Reserve Facility and stock-based compensation ("Adjusted EBITDA"), a non-GAAP measure, is useful in evaluating our operating performance. The most directly comparable GAAP measure to Adjusted EBITDA is net income. In addition to operating income and net income, we use Adjusted EBITDA as a measure of operational efficiency. We believe that this non-GAAP financial measure is useful to investors for period-to-period comparisons of our business and in understanding and evaluating our operating results for the following reasons: Our use of this non-GAAP financial measure has limitations as an analytical tool, and you should not consider them in isolation or as a substitute for analysis of our financial results as reported under GAAP. The following table presents a reconciliation of Adjusted EBITDA to net loss for each of the periods presented:     Contacts:  Investors: IMS Investor Relations Walter Frank / Jennifer Belodeau (203) 972-9200 [email protected]   View original content to download multimedia: https://www.prnewswire.com/news-releases/direct-digital-holdings-reports-second-quarter-2025-financial-results-302522451.html SOURCE Direct Digital Holdings

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