Direct Digital Holdings Stock Earnings Reports

Direct Digital reported Q3 2025 consolidated revenue of $8.0M (down from $9.1M YoY). Buy-side revenue grew 7% to $7.3M and remains the majority of revenue, while sell-side revenue fell sharply to $0.6M from $2.2M due to lower impression inventory and ongoing publisher relationship rebuilds. Gross margin compressed to 28% (from 39% a year ago). Operating expenses declined ~25% YoY to $6.1M, contributing to an operating loss of $3.9M; net loss improved to $5.0M ($0.24/share) vs. $6.4M a year earlier. Adjusted EBITDA was a loss of ~$3.0M, roughly flat YoY. Balance sheet highlights: cash of $0.9M and cash + AR of $4.5M at quarter end. Management completed significant balance-sheet actions including conversion of $25M of debt to Series A convertible preferred stock in Q3 and an additional $10M conversion post-quarter, and expanded an equity line to $100M (have raised $8.9M so far). Key strategic initiatives include: pivoting to a platform/ecosystem model that integrates buy- and sell-side capabilities, AI-driven product development and operational automation (10+ new AI modules, faster development cycles, cost savings), and a strategic partnership between Orange 142 and ReachTV to access travel-focused inventory and data. Management expects 2026 to be a positive cash-flow year and is focused on further cost optimization and diversifying revenue streams (multiple paths into the SSP and pursuit of larger, performance-based buy-side clients).