Direct Digital Holdings(US:DRCT)2025-05-06 21:00Financial Data and Key Metrics Changes - Consolidated revenue for Q1 2025 was $8,200,000, a decrease of $14,100,000 compared to $22,300,000 in Q1 2024 [17] - Sell side revenue was $2,000,000 in Q1 2025, down from $16,500,000 in Q1 2024, primarily due to a decrease in impression inventory [17][18] - Buy side revenue increased approximately 6% to $6,100,000 compared to Q1 2024, driven by a $1,200,000 increase in spending from new verticals [18] - Gross profit decreased to $2,400,000 in Q1 2025 from $5,000,000 in the prior year, but gross margin improved to 29% from 22% [18] - Operating expenses were $6,300,000, a decrease of 19% or $1,500,000 compared to $7,800,000 in Q1 2024 [19] - Net loss for Q1 2025 was $5,900,000, or a loss per share of $0.35, compared to a net loss of $3,800,000 or a loss of $0.22 per share in Q1 2024 [19] Business Line Data and Key Metrics Changes - The buy side segment generated $6,100,000 in revenue, reflecting a 6% increase year-over-year [6][18] - Sell side revenue remained consistent at $2,000,000 compared to $2,700,000 in the previous quarter, indicating a stable performance despite previous disruptions [7] Market Data and Key Metrics Changes - The company continues to face challenges from a market discredited blog post that disrupted its supply side platform, Colossus SSP, affecting relationships with partners and advertisers [8][18] - The company is working to restore volumes to pre-disruption levels, with expectations for improvement in the second half of 2025 [9][14] Company Strategy and Development Direction - The company is focused on scaling its buy side solution and rebuilding its sell side business to drive consolidated revenue growth [6] - Initiatives include revenue optimization efforts, cost-saving measures, and the unification of buy side platforms to better serve small to mid-sized clients [10][12] - The company maintains a revenue guidance of $90,000,000 to $110,000,000 for the full year 2025, anticipating growth from both buy side and sell side segments [14][21] Management's Comments on Operating Environment and Future Outlook - Management acknowledges significant challenges in 2024 but believes the company is well-positioned with a revitalized model and strong demand for its services [14] - The second half of 2025 is expected to deliver strong gains as new direct sell side partners come online [14][21] Other Important Information - The company reduced operating expenses by nearly $1,500,000 or approximately 19% compared to the first quarter of 2024 [10] - Cash and cash equivalents at the end of the quarter were $1,800,000, up from $1,400,000 at the end of 2024 [20] Q&A Session Summary Question: Insights on sell side customer spending recovery - Management is focusing on direct connections with DSP partners to drive revenue growth and expects reclamation of lost business in the second half of the year [26][27] Question: Cost-cutting initiatives and expected savings - Operating expenses were down 19%, with staff reductions contributing to ongoing savings [31] Question: Integration ramp-up with DSPs and market outlook - Integration timelines vary by partner, with expected impacts from these integrations anticipated in Q3 and Q4 of 2025 [39]