Direct Digital Holdings, Inc. Q1 FY2025 earnings call

• Focus on scaling buy-side solution and rebuilding sell-side business for consolidated revenue growth.
• In Q1 2025, buy-side revenue was $6.1M, up 6% from Q1 2024 with $1.2M growth from new verticals. Sell-side revenue was $2M, consistent with Q4 2024 but impacted by prior year sell-side business disruption.
• Launched revenue optimization and cost-saving initiatives; reduced operating expenses by nearly $1.5M (19%) in Q1 2025 compared to Q1 2024.
• Unified buy-side platforms into Orange 142 to service small/mid-sized clients. Launched Colossus Connection to accelerate direct integrations with DSP partners.

Consolidated revenue in the first quarter of 2025 was $8.2 million. The buy-side segment contributed $6.1 million, a 6% increase compared to Q1 2024, with $1.2 million growth from customers in new verticals. The sell-side segment had $2 million in Q1 2025, relatively consistent with Q4 2024 sell-side revenue. Buy-side revenue represented approximately 74.39% of consolidated revenue ($6.1M / $8.2M), and sell-side represented approximately 24.39% ($2M / $8.2M).

• Maintained full-year revenue guidance of $90 million to $110 million, supported by growth in buy-side and sell-side segments.
• Expect strong gains in second half of 2025 as new direct sell-side partners come online.

• Disruption in sell-side business in 2024 due to a market discredited blog post against Colossus SSP in May 2024, causing business disruption, reduced volumes, and impact on 2024 and Q1 2025 revenues.

Q: In terms of the sell-side customer that cut back last year, sense of what they might build back in terms of business and percent of 2024 spending levels, and percent of revenues from buy-side vs sell-side A: Focus on direct connections with DSP partners for sell-side growth. Anticipate buy-side to be ~$40M range and sell-side north of that to reach 90-110M total.

Q: How quickly are DSP integrations going to ramp and thoughts on broader marketplace A: Integrations vary by partner; some move faster than others. Treating Google situation as business as usual, waiting for judicial action, anticipating impact in Q3 and Q4 2025 from direct relationships