Looking back on advertising software stocks’ Q2 earnings, we examine this quarter’s best and worst performers, including AppLovin (NASDAQ:APP) and its peers.

The digital advertising market is large, growing, and becoming more diverse, both in terms of audiences and media. As a result, there is a growing need for software that enables advertisers to use data to automate and optimize ad placements.

The 6 advertising software stocks we track reported a strong Q2. As a group, revenues beat analysts’ consensus estimates by 1.3% while next quarter’s revenue guidance was 0.7% above.

Luckily, advertising software stocks have performed well with share prices up 27.9% on average since the latest earnings results.

AppLovin (NASDAQ:APP)

Co-founded by Adam Foroughi, who was frustrated with not being able to find a good solution to market his own dating app, AppLovin (NASDAQ:APP) is both a mobile game studio and provider of marketing and monetization tools for mobile app developers.

AppLovin reported revenues of $1.08 billion, up 44% year on year. This print was in line with analysts’ expectations, and overall, it was a strong quarter for the company with a solid beat of analysts’ EBITDA estimates and a meaningful improvement in its gross margin.

AppLovin pulled off the fastest revenue growth of the whole group. Unsurprisingly, the stock is up 150% since reporting and currently trades at $168.10.

We think AppLovin is a good business, but is it a buy today? Read our full report here, it’s free.

Best Q2: Zeta (NYSE:ZETA)

Co-founded by former Apple CEO John Scully, Zeta Global (NYSE:ZETA) provides software and data analytics tools that help companies market their products to billions of customers.

Zeta reported revenues of $227.8 million, up 32.6% year on year, outperforming analysts’ expectations by 7.2%. The business had an exceptional quarter with an impressive beat of analysts’ billings and EBITDA estimates.

Zeta pulled off the biggest analyst estimates beat and highest full-year guidance raise among its peers. The market seems happy with the results as the stock is up 33.7% since reporting. It currently trades at $28.70.

Is now the time to buy Zeta? Access our full analysis of the earnings results here, it’s free.

Weakest Q2: PubMatic (NASDAQ:PUBM)

Founded in 2006 as an online ad platform helping ad sellers, Pubmatic (NASDAQ: PUBM) is a fully integrated cloud-based programmatic advertising platform.

PubMatic reported revenues of $67.27 million, up 6.2% year on year, falling short of analysts’ expectations by 4.1%. It was a slower quarter as it posted underwhelming revenue guidance for the next quarter.

PubMatic delivered the weakest performance against analyst estimates, slowest revenue growth, and weakest full-year guidance update in the group. As expected, the stock is down 23.7% since the results and currently trades at $14.95.

Read our full analysis of PubMatic’s results here.

LiveRamp (NYSE:RAMP)

Started in 2011 as a spin-out of RapLeaf, LiveRamp (NYSE:RAMP) is a software-as-a-service provider that helps companies better target their marketing by merging offline and online data about their customers.

LiveRamp reported revenues of $176 million, up 14.2% year on year. This print surpassed analysts’ expectations by 2.4%. More broadly, it was a mixed quarter as it also logged an impressive beat of analysts’ EBITDA estimates but decelerating customer growth.

The company kept the number of enterprise customers paying more than $1m annually flat at a total of 115. The stock is down 7.1% since reporting and currently trades at $25.03.

Read our full, actionable report on LiveRamp here, it’s free.

The Trade Desk (NASDAQ:TTD)

Founded by former Microsoft engineers Jeff Green and Dave Pickles, The Trade Desk (NASDAQ:TTD) offers cloud-based software that uses data to help advertisers better plan, place, and target their online ads.

The Trade Desk reported revenues of $584.6 million, up 25.9% year on year. This print beat analysts’ expectations by 1.1%. Overall, it was a very strong quarter as it also logged an impressive beat of analysts’ EBITDA estimates and a meaningful improvement in its gross margin.

The stock is up 36.2% since reporting and currently trades at $120.10.

Read our full, actionable report on The Trade Desk here, it’s free.

Market Update

The Fed cut its policy rate by 50bps (half a percent) in September 2024, the first in roughly four years. This marks the end of its most pointed inflation-busting campaign since the 1980s. While CPI (inflation) readings have been supportive lately, employment measures have bordered on worrisome. The markets will be assessing whether this rate cut's timing (and more potential ones in 2024 and 2025) is ideal for supporting the economy or a bit too late for a macro that has already cooled too much.

Want to invest in winners with rock-solid fundamentals? Check out our Hidden Gem Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

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