Direct Digital Holdings (NASDAQ:DRCT) reported fourth-quarter results on Wednesday that beat revenue forecasts but missed earnings expectations, sending the company’s shares lower in pre-market trading.
The digital advertising platform’s stock declined 4.94% before the market open following the announcement.
Direct Digital posted a loss of $22.00 per share for the quarter, far wider than analysts’ forecast of a $0.24 loss. Meanwhile, revenue reached $8.41 million, exceeding the consensus estimate of $7.69 million, though it still represented a 7% year-over-year decline from $9.1 million in the same quarter last year.
Growth during the quarter was driven primarily by the company’s buy-side advertising segment, which generated $8.2 million in revenue, a 28% increase year over year. In contrast, sell-side advertising revenue dropped sharply to $0.2 million, compared with $2.7 million in the fourth quarter of 2024.
Direct Digital also reported operating expenses of $6.7 million, representing a 12% reduction from the prior year. The company recorded an adjusted EBITDA loss of $3.6 million, compared with a $3.4 million loss in the same period a year earlier.
The company’s net loss widened to $12.6 million, compared with $6.6 million in the fourth quarter of 2024, largely due to charges related to debt extinguishment and an exit fee totaling $7.4 million.
“We’re encouraged by our ability to drive double digit growth in the buy-side of our business, driven primarily by new customers and increased demand we’re seeing from new verticals,” said Mark D. Walker, Chairman and Chief Executive Officer.
For the full year 2025, Direct Digital reported revenue of $34.7 million, down 44% from $62.3 million in 2024. Buy-side advertising revenue rose 10% to $29.4 million, while sell-side advertising revenue fell 85% to $5.3 million.
The company also cut full-year operating expenses by 18% to $25.2 million.
In March 2026, Direct Digital launched Ignition+, an AI-powered programmatic media platform aimed at large enterprise clients.
As of December 31, 2025, the company held $0.7 million in cash, compared with $1.4 million at the end of the previous year.