Direct Digital Holdings (DRCT) investor relations material

Executive summary

• Full-year sales reached $34.7 million, with buy-side revenue growth offsetting a sharp decline in sell-side revenue.

• Buy-side advertising revenue grew 28% in Q4 2025 and 10% for the full year, driven by new customers and verticals such as travel, education, and energy.

• Strategic focus shifted to buy-side transactions, supported by the launch of Ignition+, an AI-enabled programmatic media solution.

• Operating expenses reduced by 12% in Q4 and 18% for the year, reflecting cost control efforts.

• Streamlined operations into a single reporting segment for 2026 to drive efficiency and value creation.

Financial highlights

• Q4 2025 consolidated revenue was $8.4 million, down 7% year-over-year; full-year revenue was $34.7 million, down 44%.

• Buy-side revenue in Q4 grew 28% year-over-year to $8.2 million; sell-side revenue dropped to $200,000.

• Q4 gross margin was 27%, compared to 32% in Q4 2024; full-year gross margin was 30%.

• Q4 net loss was $12.6 million; full-year net loss was $27.7 million, both wider than prior year periods.

• Adjusted EBITDA loss for Q4 was $3.6 million; full-year adjusted EBITDA loss was $11.1 million.

Outlook and guidance

• Expecting continued buy-side revenue growth, targeting 10% annualized year-over-year growth.

• Management anticipates positive platform growth and break-even or better quarterly performance by H2 2026.

• Additional cost-saving measures expected to yield $500,000 per quarter starting Q2 2026.

• Management expects improved results in 2026, leveraging the strategic shift to buy-side focus and new AI-driven offerings.