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Unpacking Q3 Earnings: PubMatic (NASDAQ:PUBM) In The Context Of Other Advertising Software Stocks

StockStory - Wed Jan 10, 3:13AM CST

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Earnings results often give us a good indication of what direction a company will take in the months ahead. With Q3 now behind us, let’s have a look at PubMatic (NASDAQ:PUBM) 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 solid Q3; on average, revenues beat analyst consensus estimates by 5.2% while next quarter's revenue guidance was in line with consensus. Inflation (despite slowing) has investors prioritizing near-term cash flows, but advertising software stocks held their ground better than others, with the share prices up 10.2% on average since the previous earnings results.

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 $63.68 million, down 1.3% year on year, topping analyst expectations by 7.1%. It was a very strong quarter for the company, with optimistic revenue guidance for the next quarter and a solid beat of analysts' revenue estimates.

“This quarter highlights an inflection point for PubMatic and the sell side technology category. Our innovation investments are driving momentum in the business and fueling our growth expectations for the fourth quarter. In the third quarter, we added new logos, strengthened publisher and buyer relationships and expanded our offerings. Supply Path Optimization (SPO) share of activity climbed to 45%, showcasing the upside growth potential inherent in our business,” said Rajeev Goel, co-founder and CEO at PubMatic.

PubMatic Total Revenue

PubMatic delivered the slowest revenue growth of the whole group. The stock is up 23.8% since the results and currently trades at $14.98.

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

Best Q3: 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 $864.3 million, up 21.2% year on year, outperforming analyst expectations by 8.5%. It was a stunning quarter for the company, with a significant improvement in its gross margin and an impressive beat of analysts' revenue estimates.

AppLovin Total Revenue

AppLovin scored the biggest analyst estimates beat among its peers. The stock is down 2.6% since the results and currently trades at $39.12.

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

Weakest Q3: 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 $493.3 million, up 24.9% year on year, exceeding analyst expectations by 1.2%. It was a weak quarter for the company, with underwhelming revenue guidance for the next quarter.

The Trade Desk had the weakest performance against analyst estimates in the group. The stock is down 10.9% since the results and currently trades at $68.49.

Read our full analysis of The Trade Desk's results here.

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 $189 million, up 24.1% year on year, surpassing analyst expectations by 5.7%. It was a decent quarter for the company, with a solid beat of analysts' revenue estimates but a decline in its gross margin.

The company added 15 enterprise customers paying more than $100,000 annually to reach a total of 440. The stock is up 10.7% since the results and currently trades at $8.55.

Read our full, actionable report on Zeta here, it's free.

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 $159.9 million, up 8.7% year on year, surpassing analyst expectations by 4.9%. It was a mixed quarter for the company, with a significant improvement in its gross margin but decelerating customer growth.

LiveRamp achieved the highest full-year guidance raise among its peers. The company added 3 enterprise customers paying more than $1m annually to reach a total of 99. The stock is up 17.9% since the results and currently trades at $35.32.

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

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The author has no position in any of the stocks mentioned

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