HOUSTON, Aug. 13, 2025 /PRNewswire/ -- Direct Digital Holdings, Inc. (Nasdaq: DRCT) ("Direct Digital Holdings" or the "Company"), a leading advertising and marketing technology platform operating through its companies Colossus Media, LLC ("Colossus SSP") and Orange 142, LLC ("Orange 142"), has been granted a motion to dismiss a shareholder class action lawsuit by the U.S. District Court, Southern District of Texas, Houston Division, subject to potential appeal. our common stock; the fact that DDH LLC is con ...

Core Viewpoint - Direct Digital Holdings, Inc. has issued $25 million in Series A Convertible Preferred Stock to improve its financial position and reduce debt obligations [1][2][3] Financial Impact - The issuance of preferred stock increases stockholders' equity from a deficit of $24.6 million to approximately $0.4 million [2] - The company reduces ongoing debt service by over $3.5 million and mitigates maturing debt obligations due in December 2026 [2] Strategic Commentary - The CEO of Direct Digital Holdings emphasized that this investment strengthens the balance sheet and provides financial flexibility to support growth strategies while aiming to regain compliance with Nasdaq's minimum stockholders' equity requirement [3]

[Part I. Financial Information](index=3&type=section&id=Part%20I.%20Financial%20Information) [Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20FINANCIAL%20STATEMENTS%20(UNAUDITED)) The unaudited condensed consolidated financial statements for the period ended June 30, 2025, show a significant decline in total assets and a worsening stockholders' deficit. The company reported a substantial decrease in revenue and an increased net loss compared to the prior year, primarily driven by a severe downturn in its sell-side advertising segment. Cash flow from operations remained negative, though improved from the prior year, with financing activities, particularly stock issuance, providing necessary liquidity. The notes highlight substantial doubt about the company's ability to continue as a going concern [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet shows a decline in total assets and an increase in liabilities, leading to a worsened stockholders' deficit Condensed Consolidated Balance Sheets | Balance Sheet Items (in thousands) | June 30, 2025 (Unaudited) | December 31, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | $6,727 | $8,535 | | **Total Assets** | **$23,326** | **$26,006** | | **Total Current Liabilities** | $13,675 | $13,350 | | **Total Liabilities** | **$47,907** | **$45,736** | | **Total Stockholders' Deficit** | **($24,581)** | **($19,730)** | - The company's financial position weakened, with total assets decreasing by **10.3%** and total liabilities increasing by **4.7%** from December 31, 2024, to June 30, 2025. This resulted in a **24.6%** increase in the total stockholders' deficit[9](index=9&type=chunk) [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The statements of operations reveal a significant revenue decline and an increased net loss, primarily from sell-side advertising Condensed Consolidated Statements of Operations | Income Statement (in thousands) | Q2 2025 | Q2 2024 | YoY Change | | :--- | :--- | :--- | :--- | | **Total Revenues** | **$10,144** | **$21,855** | **-53.6%** | | Sell-side advertising | $2,483 | $14,298 | -82.6% | | Buy-side advertising | $7,661 | $7,557 | +1.4% | | **Gross Profit** | **$3,561** | **$5,931** | **-40.0%** | | **Loss from Operations** | **($2,426)** | **($2,065)** | **+17.5%** | | **Net Loss** | **($4,196)** | **($3,141)** | **+33.6%** | | **Net Loss per Share (Basic)** | **($0.23)** | **($0.16)** | **+43.8%** | - For the six months ended June 30, 2025, total revenues plummeted by **58.5%** to **$18.3 million** from **$44.1 million** in the prior-year period. The net loss for the six-month period widened to **$10.1 million** from **$7.0 million**[11](index=11&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash flow from operations improved but remained negative, with financing activities providing necessary liquidity Condensed Consolidated Statements of Cash Flows | Cash Flows (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | ($5,398) | ($10,111) | | Net cash used in investing activities | ($38) | ($10) | | Net cash provided by financing activities | $5,584 | $6,074 | | **Net increase (decrease) in cash** | **$148** | **($4,047)** | - Cash used in operations for the first six months of 2025 improved to **-$5.4 million** from **-$10.1 million** in the prior year. Financing activities provided **$5.6 million** in cash, primarily from the issuance of **$5.9 million** in Class A Common Stock[22](index=22&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Key notes highlight going concern doubts, customer concentration, ongoing litigation, and significant long-term debt - **Going Concern:** Management has identified conditions that raise substantial doubt about the Company's ability to continue as a going concern. These include a net loss of **$10.1 million** for the six months ended June 30, 2025, an accumulated deficit of **$13.4 million**, low cash reserves of **$1.6 million**, maturing debt, and non-compliance with Nasdaq's listing requirements[65](index=65&type=chunk)[66](index=66&type=chunk) - **Customer Concentration:** For the three months ended June 30, 2025, two customers accounted for **31%** of revenues. This is a significant reduction in concentration from the same period in 2024, where one sell-side customer accounted for **58%** of revenues[50](index=50&type=chunk) - **Litigation:** The company is involved in litigation, including a lawsuit it filed against the author of a defamatory article that caused a significant sell-side customer to temporarily pause its connection, disrupting business. The company is also defending against a putative class-action lawsuit alleging violations of federal securities laws[121](index=121&type=chunk)[122](index=122&type=chunk) - **Long-Term Debt:** As of June 30, 2025, total long-term debt was **$41.2 million**. The company has received multiple amendments to its credit facilities to provide temporary relief from debt covenants and extend maturity dates, indicating ongoing liquidity challenges[70](index=70&type=chunk)[87](index=87&type=chunk)[88](index=88&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the severe 54% year-over-year revenue decline in Q2 2025 to a significant disruption in its sell-side business, caused by a defamatory blog post in May 2024 that led a key customer to temporarily halt activity. While buy-side revenue saw marginal growth, the collapse in sell-side revenue led to a wider net loss. The company is facing substantial liquidity challenges, evidenced by a 'going concern' warning, non-compliance with Nasdaq listing rules, and reliance on an Equity Reserve Facility for funding. Management has implemented cost-saving measures, including staff reductions, to mitigate the financial impact [Results of Operations](index=36&type=section&id=Results%20of%20Operations) Operational results show a sharp revenue drop due to sell-side disruption, despite cost-saving measures - The primary cause for the **83%** decrease in Q2 2025 sell-side advertising revenue was an unexpected business disruption from a defamatory blog post in May 2024, which caused partners and clients to pause activity. Sell-side volumes have not yet recovered to prior levels[173](index=173&type=chunk) Results of Operations | Revenue and Gross Profit (in thousands) | Q2 2025 | Q2 2024 | YoY Change | | :--- | :--- | :--- | :--- | | **Total Revenues** | **$10,144** | **$21,855** | **(54%)** | | Sell-side advertising | $2,483 | $14,298 | (83%) | | Buy-side advertising | $7,661 | $7,557 | 1% | | **Gross Profit** | **$3,561** | **$5,931** | **(40%)** | - Operating expenses for Q2 2025 decreased by **25%** to **$6.0 million**, primarily due to lower compensation costs resulting from a staff reduction effective July 1, 2024, and reduced professional fees[183](index=183&type=chunk)[184](index=184&type=chunk)[185](index=185&type=chunk) [Liquidity and Capital Resources](index=39&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity remains a major concern, with substantial doubt about going concern and reliance on equity financing - The company's ability to continue as a going concern is in substantial doubt due to significant net losses, low cash balance (**$1.6 million**), maturing debt, and Nasdaq delisting risk[191](index=191&type=chunk) - To address liquidity concerns, the company is relying on cash from operations, its Equity Reserve Facility, and potential future financing. It has also implemented cost reductions and obtained temporary relief from debt covenants[192](index=192&type=chunk) - During the first six months of 2025, the company sold **6,059,351** shares of Class A Common Stock for **$4.6 million** under its Equity Reserve Facility to fund operations[143](index=143&type=chunk) Liquidity and Capital Resources | Key Liquidity Metrics (in thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $1,593 | $1,445 | | Working capital deficit | ($6,948) | ($4,815) | [Recent Developments](index=31&type=section&id=Recent%20Developments) Recent developments include Nasdaq non-compliance notices for equity and bid price, with an extension granted - On October 18, 2024, the company was notified by Nasdaq of non-compliance with the minimum stockholders' equity requirement. Subsequently, on May 12, 2025, it received another notice for failing to meet the **$1.00** minimum bid price requirement[140](index=140&type=chunk)[141](index=141&type=chunk) - The company has been granted an extension until October 14, 2025, by a Nasdaq Hearings Panel to regain compliance with the stockholders' equity rule, subject to meeting certain interim conditions[141](index=141&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=42&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company, as a "smaller reporting company," is not required to provide the information for this item - As a smaller reporting company, the registrant is exempt from providing quantitative and qualitative disclosures about market risk[210](index=210&type=chunk) [Controls and Procedures](index=42&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were not effective as of June 30, 2025. This is due to a previously identified material weakness related to the technical evaluation of accounting matters. While remediation efforts are underway, including hiring additional personnel and engaging consultants, they were not fully effective by the end of the period - The CEO and CFO concluded that the Company's Disclosure Controls were not effective as of June 30, 2025[211](index=211&type=chunk) - A material weakness in controls over the technical evaluation of accounting matters, previously identified as of December 31, 2023, and 2024, has not been fully remediated[212](index=212&type=chunk)[215](index=215&type=chunk) - Remediation steps include engaging consultants and hiring additional qualified accounting personnel, but these controls have not been in place long enough to demonstrate operating effectiveness[215](index=215&type=chunk) [Part II. Other Information](index=43&type=section&id=Part%20II.%20Other%20Information) [Legal Proceedings](index=43&type=section&id=Item%201.%20Legal%20Proceedings) The company is actively involved in two significant legal matters. It has filed a lawsuit against the author of a defamatory article from May 2024 that negatively impacted its business. Concurrently, it is defending against a consolidated putative class-action lawsuit filed by stockholders alleging violations of federal securities laws - The company filed a lawsuit against the author of a defamatory article published on May 10, 2024, which caused a major sell-side customer to temporarily pause its connection[219](index=219&type=chunk) - A putative class-action lawsuit was filed against the company and certain officers in May 2024, alleging violations of federal securities laws related to public disclosures. The company believes the claims lack merit and intends to defend itself vigorously[220](index=220&type=chunk) [Risk Factors](index=44&type=section&id=Item%201A.%20Risk%20Factors) The primary risk highlighted is the potential delisting of the company's Class A Common Stock from the Nasdaq Capital Market. The company is non-compliant with both the minimum stockholders' equity and minimum bid price requirements. Failure to regain compliance within the granted extension period could severely impact the stock's liquidity, the company's ability to raise capital, and investor confidence - A significant risk is the potential delisting from the Nasdaq Capital Market due to non-compliance with the minimum stockholders' equity requirement and the minimum bid price rule[222](index=222&type=chunk)[223](index=223&type=chunk) - Delisting could adversely affect the ability to raise additional financing, negatively impact the value and liquidity of the stock, and result in a loss of institutional investor interest[223](index=223&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=44&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities during the period - There were no unregistered sales of equity securities in the reporting period[224](index=224&type=chunk) [Other Information](index=45&type=section&id=Item%205.%20Other%20Information) On August 5, 2025, the company entered into a Sixth Amendment to its Credit Agreement with East West Bank (EWB). This amendment extended the maturity date of the credit facility from July 31, 2025, to August 31, 2025, in exchange for a principal payment of $200,000 - The company amended its credit agreement with EWB on August 5, 2025, extending the maturity date to August 31, 2025[230](index=230&type=chunk) - In connection with the maturity extension, the company agreed to make a principal payment of **$200,000** by August 15, 2025[230](index=230&type=chunk)

Core Insights - Direct Digital Holdings, Inc. (DRCT) reported a quarterly loss of $0.23 per share, significantly better than the Zacks Consensus Estimate of a loss of $0.96, representing an earnings surprise of +76.04% [1] - The company posted revenues of $10.14 million for the quarter ended June 2025, missing the Zacks Consensus Estimate by 18.85%, and a decline from $21.85 million year-over-year [2] - Direct Digital shares have decreased by approximately 62.8% year-to-date, contrasting with the S&P 500's gain of 7.6% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.21 on revenues of $39.7 million, while for the current fiscal year, it is -$1.48 on revenues of $93.2 million [7] - The estimate revisions trend for Direct Digital was mixed prior to the earnings release, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market [6] Industry Context - The Advertising and Marketing industry, to which Direct Digital belongs, is currently ranked in the top 32% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Data and Key Metrics Changes - Consolidated revenue for Q2 2025 was $10.1 million, a decrease of $11.7 million compared to $21.9 million in Q2 2024 [12] - Sell side revenue was $2.5 million in Q2 2025, down from $14.3 million in 2024, primarily due to a decrease in impression inventory caused by a business disruption in May 2024 [12][13] - Buy side revenue increased slightly to $7.7 million from $7.6 million in 2024, indicating a modest recovery [13] - Gross margin improved to 35% in Q2 2025 from 27% in 2024, attributed to a higher proportion of buy side revenue [13] - Operating expenses decreased by 25% to $6 million compared to $8 million in the same period last year [13] - Net loss for Q2 2025 was $4.2 million, or $0.23 per share, compared to a net loss of $3.1 million, or $0.16 per share, in Q2 2024 [15] Business Line Data and Key Metrics Changes - The buy side segment showed modest year-over-year growth, contributing to improved gross profit margins of 35% [6] - The sell side business is in recovery, with efforts to restore relationships that were paused in May 2024 [6][7] - Colossus Connections, launched in 2024, is performing well with several mid and top-tier DSP partners nearing integration completion [8][17] Market Data and Key Metrics Changes - The company is experiencing a recovery in the sell side business, which historically drove significant revenue growth [7] - The integration of DSP partners is taking longer than anticipated, influenced by macroeconomic conditions [21][22] Company Strategy and Development Direction - The company is focused on rebuilding and growing its business back to historical revenue levels and profitability [5] - A revenue diversification strategy is being executed to enhance growth, particularly in the buy side segment [6] - Direct Connections are prioritized for the sell side segment to drive revenue recovery [7] Management's Comments on Operating Environment and Future Outlook - Management expressed caution regarding revenue guidance due to macroeconomic uncertainties and integration timing [10][21] - The company expects a strong second half of the year driven by enhanced buy side activity and the ongoing recovery of the sell side business [16] - There is an emphasis on cost savings initiatives, with a 25% reduction in total operating expenses [10][14] Other Important Information - The company ended the quarter with cash and cash equivalents of $1.6 million, up from $1.4 million at the end of 2024 [16] - Total cash plus accounts receivable was $5.5 million, down from $6.4 million at year-end 2024 [16] Q&A Session Summary Question: Revenue outlook and integration delays - Management indicated that both macroeconomic issues and integration delays contributed to the decision to adjust revenue guidance for the second half of the year [21][22] Question: Impact of key client on guidance - Management clarified that the loss of business from a key client did not significantly impact the decision to revise guidance, as direct connections were being prioritized [30][31] Question: Revenue uplift from direct connections - Management stated that leveraging direct connections typically results in a 5% to 10% revenue uplift compared to traditional exchanges [32][33] Question: Competitive advantage of direct connections - Management noted that having direct connections helps reduce transaction costs and has been beneficial in securing partnerships with large agencies [35]

[Financial Performance Overview](index=1&type=section&id=Financial%20Performance%20Overview) [Management Commentary](index=1&type=section&id=Management%20Commentary) Management reported a **24%** sequential revenue increase in Q2 2025, driven by growth in both sell-side and buy-side businesses. The company is focused on rebuilding its sell-side operations following a significant disruption in 2024. A key achievement was a **25%** year-over-year reduction in operating expenses, reflecting successful cost-saving initiatives aimed at accelerating the return to profitability - The primary focus in H1 2025 has been on rebuilding and growing the business after a substantial disruption to the sell-side business in 2024[2](index=2&type=chunk) - Q2 2025 revenue saw a sequential increase of **24%** over Q1 2025, driven by growth in both sell-side and buy-side segments[1](index=1&type=chunk)[2](index=2&type=chunk) - Operating expenses were reduced by **25%** in Q2 2025 compared to Q2 2024 due to ongoing strategic cost-saving initiatives[1](index=1&type=chunk)[2](index=2&type=chunk) - **Net loss** and **Adjusted EBITDA loss** improved sequentially over Q1 2025 by **\$1.7 million** and **\$1.6 million**, respectively[1](index=1&type=chunk) [Second Quarter 2025 Operational Highlights](index=1&type=section&id=Second%20Quarter%202025%20Highlights) In Q2 2025, the company's sell-side advertising segment processed an average of **182 billion** monthly impressions and increased its advertiser base by over **30%** year-over-year. The number of sell-side media properties also grew significantly. The buy-side segment served over 220 customers, successfully expanding into new verticals which contributed **\$1.0 million** in revenue - Processed approximately **182 billion** average monthly impressions through the sell-side advertising segment[5](index=5&type=chunk) - The number of sell-side advertisers increased by over **30%** compared to Q2 2024[5](index=5&type=chunk) - Average sell-side media properties grew to 30,000 per month, a **5%** increase YoY and a **26%** increase sequentially from Q1 2025[5](index=5&type=chunk) - The buy-side advertising segment served over 220 customers and generated **\$1.0 million** from new verticals, reflecting expansion efforts[5](index=5&type=chunk) [Detailed Financial Results](index=1&type=section&id=Detailed%20Financial%20Results) [Second Quarter 2025 Financial Results](index=1&type=section&id=Second%20Quarter%202025%20Financial%20Results) For Q2 2025, total revenue was **\$10.1 million**, a **54%** decrease year-over-year, primarily due to an **83%** decline in sell-side revenue. However, buy-side revenue saw a slight increase. Gross margin improved significantly to **35%** from **27%** in Q2 2024. The company reported a **Net loss** of **\$4.2 million** and an **Adjusted EBITDA loss** of **\$1.5 million**, with both metrics showing sequential improvement from Q1 2025 Q2 2025 Key Financial Metrics | Metric | Q2 2025 | Q2 2024 | YoY Change | | :--- | :--- | :--- | :--- | | **Total Revenue** | \$10.1M | \$21.9M | -54% | | Sell-side Revenue | \$2.5M | \$14.3M | -83% | | Buy-side Revenue | \$7.7M | \$7.6M | +1.4% | | **Gross Profit** | \$3.6M | \$5.9M | -39% | | Gross Margin | 35% | 27% | +8 p.p. | | **Operating Expenses** | \$6.0M | \$8.0M | -25% | | **Net Loss** | (\$4.2M) | (\$3.1M) | Increased Loss | | **Adjusted EBITDA Loss** | (\$1.5M) | (\$1.3M) | Increased Loss | - The significant year-over-year revenue decline was primarily driven by an **83%** decrease in the sell-side advertising segment revenue[10](index=10&type=chunk) - Operating expenses decreased by **\$2.0 million** (**25%**) YoY, mainly due to reduced payroll costs from internal reorganization and cost-saving measures[10](index=10&type=chunk) [Six Months Ended June 30, 2025 Financial Results](index=2&type=section&id=Six%20Months%20Ended%20June%2030%2C%202025%20Financial%20Results) For the first half of 2025, revenue decreased **59%** year-over-year to **\$18.3 million**. This was caused by an **85%** drop in sell-side revenue, which was partially offset by a **3%** growth in buy-side revenue. Gross margin for the period improved to **33%** from **25%** in H1 2024. The company recorded a **Net loss** of **\$10.1 million** and an **Adjusted EBITDA loss** of **\$4.5 million** for the six-month period H1 2025 Key Financial Metrics | Metric | H1 2025 | H1 2024 | YoY Change | | :--- | :--- | :--- | :--- | | **Total Revenue** | \$18.3M | \$44.1M | -59% | | Sell-side Revenue | \$4.5M | \$30.8M | -85% | | Buy-side Revenue | \$13.8M | \$13.3M | +3% | | **Gross Profit** | \$6.0M | \$10.9M | -45% | | Gross Margin | 33% | 25% | +8 p.p. | | **Operating Expenses** | \$12.3M | \$15.8M | -22% | | **Net Loss** | (\$10.1M) | (\$7.0M) | Increased Loss | | **Adjusted EBITDA Loss** | (\$4.5M) | (\$3.0M) | Increased Loss | [Financial Outlook](index=2&type=section&id=Financial%20Outlook) [Guidance](index=2&type=section&id=Guidance) The company anticipates a strong second half of 2025, driven by enhanced buy-side activity and the ongoing recovery of the sell-side business. However, due to market uncertainty and the variable timing of the sell-side rebuild, specific revenue guidance is not being provided at this time. Management intends to reinstate guidance once visibility improves - The company is not providing specific revenue guidance due to market uncertainty and the timing of the continued rebuild of the sell-side business[7](index=7&type=chunk) - Management is positioned to deliver a strong back half of the year, driven by enhanced buy-side activity and the recovery of the sell-side business[7](index=7&type=chunk)[8](index=8&type=chunk) - The company intends to reinstate revenue guidance in the future once it has better visibility on the sell-side of the business[7](index=7&type=chunk) [Consolidated Financial Statements](index=5&type=section&id=Consolidated%20Financial%20Statements) [Condensed Consolidated Balance Sheets](index=5&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) As of June 30, 2025, Direct Digital Holdings had total assets of **\$23.3 million** and total liabilities of **\$47.9 million**, resulting in a total stockholders' deficit of (**\$24.6 million**). Cash and cash equivalents stood at **\$1.6 million**, a slight increase from **\$1.4 million** at the end of 2024. The stockholders' deficit widened from (**\$19.7 million**) at year-end 2024 Balance Sheet Summary (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | \$1,593 | \$1,445 | | Total current assets | \$6,727 | \$8,535 | | **Total assets** | **\$23,326** | **\$26,006** | | Total current liabilities | \$13,675 | \$13,350 | | **Total liabilities** | **\$47,907** | **\$45,736** | | **Total stockholders' deficit** | **(\$24,581)** | **(\$19,730)** | [Condensed Consolidated Statements of Operations](index=6&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) The statement of operations for Q2 2025 shows a total revenue of **\$10.1 million** and a **Net loss** of **\$4.2 million**. This compares to a revenue of **\$21.9 million** and a **Net loss** of **\$3.1 million** in the same period last year. The **net loss per share** attributable to the company was (**\$0.23**) for the quarter, compared to (**\$0.16**) in Q2 2024 Statement of Operations Highlights (in thousands, except per-share data) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Total revenues | \$10,144 | \$21,855 | \$18,301 | \$44,130 | | Gross profit | \$3,561 | \$5,931 | \$5,954 | \$10,929 | | Loss from operations | (\$2,426) | (\$2,065) | (\$6,350) | (\$4,873) | | Net loss | (\$4,196) | (\$3,141) | (\$10,136) | (\$6,961) | | Net loss per share (Basic) | (\$0.23) | (\$0.16) | (\$0.55) | (\$0.38) | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) For the first six months of 2025, net cash used in operating activities was **\$5.4 million**, a significant improvement from the **\$10.1 million** used in the prior-year period. Cash provided by financing activities was **\$5.6 million**, largely from the issuance of Class A Common Stock. The company ended the period with a net increase in cash of **\$0.1 million**, bringing the cash balance to **\$1.6 million** Six Months Ended June 30 Cash Flow Summary (in thousands) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | (\$5,398) | (\$10,111) | | Net cash used in investing activities | (\$38) | (\$10) | | Net cash provided by financing activities | \$5,584 | \$6,074 | | **Net increase (decrease) in cash** | **\$148** | **(\$4,047)** | | **Cash at end of period** | **\$1,593** | **\$1,069** | [Non-GAAP Financial Measures](index=8&type=section&id=NON-GAAP%20FINANCIAL%20MEASURES) [Reconciliation of Net Loss to Adjusted EBITDA](index=8&type=section&id=Reconciliation%20of%20Net%20Loss%20to%20Adjusted%20EBITDA) The company uses Adjusted EBITDA, a non-GAAP measure, to evaluate operating performance. For Q2 2025, the **Adjusted EBITDA loss** was **\$1.5 million**, compared to a loss of **\$1.3 million** in Q2 2024. This represents a sequential improvement from the **\$3.0 million** **Adjusted EBITDA loss** in Q1 2025. For the first six months of 2025, the **Adjusted EBITDA loss** was **\$4.5 million** - The company uses Adjusted EBITDA, which adjusts for interest, taxes, depreciation, amortization, stock-based compensation, and other specific items, to evaluate operating performance and for period-to-period comparisons[23](index=23&type=chunk)[25](index=25&type=chunk) Reconciliation of Net Loss to Adjusted EBITDA (in thousands) | Period | Net Loss | Adjusted EBITDA | | :--- | :--- | :--- | | Q2 2025 | (\$4,196) | (\$1,452) | | Q2 2024 | (\$3,141) | (\$1,343) | | H1 2025 | (\$10,136) | (\$4,476) | | H1 2024 | (\$6,961) | (\$3,005) | | Q1 2025 | (\$5,940) | (\$3,024) |

Core Insights - Direct Digital Holdings reported a sequential revenue increase of 24% in Q2 2025, driven by growth in both sell-side and buy-side businesses compared to Q1 2025 [1][2] - The company achieved a consolidated gross margin improvement to 35% in Q2 2025, up from 29% in Q1 2025 [1] - Operating expenses were reduced by 25% in Q2 2025 compared to Q2 2024, reflecting strategic cost-saving initiatives [1][2] Financial Performance - Total revenue for Q2 2025 was $10.1 million, a decrease of 54% compared to $21.9 million in Q2 2024, but an increase of 24% from Q1 2025 [7][19] - Sell-side advertising segment revenue was $2.5 million, down 83% from $14.3 million in Q2 2024, primarily due to a decrease in impression inventory [7][19] - Buy-side advertising segment revenue was $7.7 million, slightly up from $7.6 million in the same period of 2024 [7][19] Operational Highlights - The company processed approximately 182 billion average monthly impressions through the sell-side advertising segment [7] - The number of sell-side advertisers increased over 30% compared to Q2 2024 [7] - The average number of sell-side media properties was 30,000 per month in Q2 2025, reflecting a 5% increase compared to Q2 2024 [7] Cost Management - Operating expenses for Q2 2025 were $6.0 million, down from $8.0 million in Q2 2024, driven by decreased payroll costs and cost-saving measures [7][19] - The operating loss for Q2 2025 was $2.4 million, compared to an operating loss of $2.1 million in the prior year period, but improved from a loss of $3.9 million in Q1 2025 [7][19] Cash Position - As of June 30, 2025, the company held cash and cash equivalents of $1.6 million, an increase from $1.4 million as of December 31, 2024 [7][18]

HOUSTON, Aug. 4, 2025 /PRNewswire/ -- Direct Digital Holdings, Inc. (Nasdaq: DRCT) ("Direct Digital Holdings" or the "Company"), a leading advertising and marketing technology platform operating through its companies Colossus Media, LLC ("Colossus SSP") and Orange 142, LLC ("Orange 142"), today announced that the Company will report financial results for the second quarter ended June 30, 2025 on Tuesday, August 5, 2025 after the U.S. stock market closes. At Direct Digital Holdings, we prioritize personal re ...

Industry Overview - The gaming advertising market is projected to reach $11 billion by the end of 2025, highlighting a significant opportunity for brands to engage with audiences in immersive environments [2][3] - Over 3.2 billion people globally engage with gaming platforms across mobile, PC, and console, making it one of the most engaged digital channels [2] Company Insights - Orange 142, a division of Direct Digital Holdings, has released a best practices guide aimed at helping marketers effectively utilize in-game advertising [1][4] - The guide provides a comprehensive overview of in-game advertising, including emerging trends, platform dynamics, and measurement techniques [3][4] - Orange 142 emphasizes the importance of integrating advertising into gaming experiences in a way that feels native and enhances user engagement [3][4] Advertising Strategies - The guide outlines various in-game advertising formats such as rewarded video, native placements, and Twitch sponsorships, helping marketers understand how to match ad types with campaign goals and gamer behaviors [2][7] - Key strategies include leveraging powerful targeting capabilities, ensuring brand safety, and measuring engagement and attribution within gaming environments [7][8] - The incorporation of emerging technologies like VR, programmatic delivery, and generative AI is encouraged to enhance advertising effectiveness [7]

Core Viewpoint - MUSE Microscopy, Inc. has launched MUSE Veterinary Digital Pathology, LLC, a subsidiary aimed at providing same-day results for tissue biopsies in veterinary practices, enhancing diagnostic speed and precision in animal healthcare [1][2][3]. Company Overview - MUSE Microscopy specializes in digital pathology innovations, particularly through its SmartPath MUSE Technology™, which offers a slide-free direct-to-digital imaging platform for rapid diagnostic assistance [5]. Industry Impact - The formation of MUSE Veterinary Digital Pathology marks a strategic entry into the veterinary health market, focusing on point-of-care and real-time diagnostic imaging for specialty, emergency, and family veterinary practices across the U.S. [2][3]. - The initiative is expected to significantly improve clinical outcomes by reducing the wait time for biopsy results from 3-7 days to same-day diagnoses, thereby alleviating owner anxiety and enhancing medical management [4]. Leadership and Expertise - Matthew Nunez, CEO of MUSE Microscopy, will lead the new subsidiary, supported by Darin Nelson as President, who has extensive experience in scaling veterinary diagnostic companies [2][3]. - Dr. Jeffrey Edwards has been appointed as Chief Medical Officer, overseeing the anatomic pathology team and the adoption of innovative technology in veterinary practices [2]. Technological Advancements - The SmartPath platform enables rapid, non-destructive tissue imaging, allowing veterinarians to make real-time treatment decisions and perform intraoperative assessments without relying on conventional slide-based workflows [2][3][4]. - The technology aims to empower veterinarians with powerful diagnostic tools directly at the point-of-care, facilitating faster decision-making and improved patient care [4]. Future Developments - MUSE Veterinary Digital Pathology will operate independently while leveraging MUSE Microscopy's existing infrastructure and anticipates further announcements regarding pilot partnerships and distribution opportunities in the coming months [4].