Direct Digital Holdings (DRCT) Q2 2026 earnings summary

Executive summary

• Revenue declined 23% year-over-year to $7.8 million in Q2 2026, mainly due to a drop in DSP customer spending, but revenue excluding DSP customers grew 5% year-over-year for the first half of 2026.

• Gross profit margin remained stable at 34% in Q2 2026, with gross profit of $2.7 million.

• Operating expenses decreased 7% year-over-year in Q2 2026, reflecting cost discipline and workforce optimization.

• Net loss improved to $3.6 million in Q2 2026 from $4.2 million in Q2 2025; first half net loss was $9.2 million, down from $10.1 million.

• The company launched new AI search, geo offerings, and web infrastructure technology services, and shifted to a single digital advertising segment.

Financial highlights

• Q2 2026 revenue: $7.8 million (down from $10.1 million in Q2 2025); H1 2026 revenue: $14.5 million (down from $18.3 million in H1 2025).

• Gross profit: $2.7 million (34% margin) in Q2 2026; $4.9 million (34% margin) in H1 2026.

• Adjusted EBITDA loss for Q2 2026 was $2.3 million, compared to $1.5 million loss in Q2 2025; H1 2026 Adjusted EBITDA loss was $4.9 million, up from $4.5 million.

• Operating loss for Q2 2026 was $2.9 million, compared to $2.4 million in Q2 2025.

• Cash and cash equivalents at June 30, 2026: $0.5 million, down from $0.7 million at December 31, 2025.

Outlook and guidance

• Management highlights strong renewal rates and growing interest in AI-powered offerings, focusing on operational efficiencies and sustainable long-term growth.

• The company is expanding digital marketing spend among enterprise customers and leveraging equity facilities for liquidity.

• There is substantial doubt about the company's ability to continue as a going concern over the next 12 months.