Fourth Quarter 2025 Buy-side Revenue Increased 28%
Fourth Quarter 2025 Consolidated Revenue Decreased 7%
Reduced Operating Expenses by 12% in Q4 2025 Compared to Q4 2024 and by 18% in FY 2025 Compared to FY 2024
HOUSTON, March 31, 2026 /PRNewswire/ -- Direct Digital Holdings, Inc. (Nasdaq: DRCT) ("Direct Digital Holdings" or the "Company"), a leading advertising and marketing technology platform operating through its companies Orange 142, LLC ("Orange 142") and Colossus Media, LLC ("Colossus SSP"), today announced financial results for the fourth quarter and full year ended December 31, 2025.
Mark D. Walker, Chairman and Chief Executive Officer, commented, "We're encouraged by our ability to drive double digit growth in the buy-side of our business, driven primarily by new customers and increased demand we're seeing from new verticals. As we move through 2026, we are strategically shifting our focus on driving digital marketing spend among buy-side and new enterprise customers. To that end, in March of 2026 we launched Ignition+, an AI-enabled programmatic media solution providing enhanced accessibility for large enterprise clients in the buy-side network, while also prioritizing transparency, efficiency, and cost reduction through AI-driven optimization, insights and curation. In connection with this strategic shift, we are currently aggregating our operations to streamline our operating structure and enable us to more efficiently go to market and drive value creation for our shareholders."
Keith Smith, President, commented, "Our strategic pivot allows us to center our resources to enhance Direct Digital's buyside presence and drive continued success winning new customers and capturing market share. We look forward to executing on our refocused business model."
Fourth Quarter 2025 Highlights
-- Buy-side advertising segment served about 195 customers in the fourth of
2025.
-- Buy-side advertising revenue for the fourth quarter of 2025 included $1.7
million from customers in new verticals, reflecting the Company's ongoing
expansion efforts.
-- Processed approximately 85 billion average monthly impressions through
the sell-side advertising segment.
-- Executing on strategic pivot and reallocating resources to more
streamlined and profitable business model focused on buy-side growth.
Fourth Quarter 2025 Financial Results
-- Revenue of $8.4 million decreased 7% compared to $9.1 million in the
fourth quarter of 2024.
-- Buy-side advertising segment revenue of $8.2 million increased 28%
compared to $6.4 million in the fourth quarter of 2024.
-- Sell-side advertising segment revenue of $0.2 million decreased as
compared to $2.7 million in the fourth quarter of 2024, primarily related
to a decrease in impression inventory when compared to the fourth quarter
of 2024.
-- Gross profit was $2.3 million, or 27% of revenue, compared to $2.9
million, or 32% of revenue, in the fourth quarter of 2024.
-- Operating expenses of $6.7 million decreased 12% compared to $7.7 million
in the fourth quarter of 2024.
-- Operating loss was ($4.5 million), compared to ($4.7 million) in the
fourth quarter of 2024.
-- Net loss was ($12.6 million) compared to net loss of ($6.6 million) in
the fourth quarter of 2024
-- Adjusted EBITDA[1] loss was ($3.6 million) in the fourth quarter of 2025
compared to a loss of ($3.4 million) in the fourth quarter of 2024.
-- As of December 31, 2025, the Company held cash and cash equivalents of
$0.7 million compared to $1.4 million as of December 31, 2024.
Full Year 2025 Financial Results
-- Revenue of $34.7 million decreased 44% compared to $62.3 million in full
year 2024.
-- Buy-side advertising segment revenue of $29.4 million increased 10%
compared to $26.6 million in full year 2024.
-- Sell-side advertising segment revenue of $5.3 million decreased 85%
compared to $35.7 million in full year 2024, primarily related to a
decrease in impression inventory when compared to the prior year period.
-- Gross profit was $10.4 million, or 30% of revenue, compared to $17.4
million, or 28% of revenue, in full year 2024.
-- Operating expenses of $25.2 million decreased $5.4 million, or 18%,
compared to $30.6 million in full year 2024.
-- Operating loss was ($14.8 million), compared to operating loss of ($13.2
million) in full year 2024.
-- Net loss was ($27.7 million) compared to net loss of ($19.9 million) in
full year 2024.
-- Adjusted EBITDA[1] loss was ($11.1 million) in full year 2025 compared to
a loss of ($9.3 million) in full year 2024.
Direct Digital Holdings took several steps throughout 2025 to strengthen its balance sheet and enhance its capital structure and access to capital.
In the third quarter of 2025, the Company announced the issuance of $25 million of a new series of Series A Convertible Preferred Stock, at a premium conversion price of $2.50 per share of Class A Common Stock. The investment was made through the conversion of a portion of existing debt into the new class of perpetual convertible preferred stock. The preferred stock is redeemable in whole or in part at the Company's direction, votes on an as-converted basis with the Class A common stock, and carries a 10% cumulative annual dividend payable if, as and when declared by the Company's board of directors.
In the fourth quarter of 2025, the Company issued an additional $10 million of Series A Convertible Preferred Stock. At the end of October 2025, the Company expanded its Equity Reserve Facility by 50 million shares, approved by stockholders, to a total facility amount of $100 million. The Company raised $7.3 million through the Equity Reserve Facility in the twelve months ended December 31, 2025.
Subsequent to the fourth quarter of 2025, the Company implemented a 55-to-1 reverse stock split of all classes of its common stock. The reverse stock split was approved by Direct Digital Holdings' Board of Directors and subsequently by its stockholders on December 30, 2025, allowing the Company to regain compliance with the Nasdaq minimum bid price and maintain its Nasdaq listing. This listing is a key asset and provides heightened visibility among institutional investors, which is foundational to the Company's go forward strategy to build and maintain a strengthened investor base.
Diana Diaz, Chief Financial Officer, commented, "We took several steps in the fourth quarter of 2025 and throughout the year to strengthen our balance sheet and enhance our access to capital, successfully returning Direct Digital Holdings to Nasdaq compliance. Revenue growth on the buy-side of our business in 2025 was encouraging, and with the support of our strategic pivot to a more efficient model, we believe that we are well positioned to deliver improved results in 2026."
Conference Call and Webcast Details
Direct Digital Holdings will host a conference call on Tuesday, April 7, 2026, at 5:00 p.m. Eastern Time to discuss the Company's fourth quarter and full year 2025 financial results. The live webcast and replay can be accessed at https://ir.directdigitalholdings.com/news-events/ir-calendar. Please access the website at least fifteen minutes prior to the call to register, download and install any necessary audio software. For those who cannot access the webcast, a replay will be available at https://ir.directdigitalholdings.com/.
Cautionary Note Regarding Forward Looking Statements
This press release contains forward-looking statements within the meaning of federal securities laws that are subject to certain risks, trends and uncertainties. We use words such as "could," "would," "may," "might," "will," "expect," "likely," "believe," "continue," "anticipate, " "estimate," "intend," "plan," "project" and other similar expressions to identify forward-looking statements, but not all forward-looking statements include these words. All of our forward-looking statements involve estimates and uncertainties that could cause actual results to differ materially from those expressed in or implied by the forward-looking statements. Accordingly, any such statements are qualified in their entirety by reference to the information described under the caption "Risk Factors" and elsewhere in our most recent Annual Report on Form 10-K for the fiscal year ended December 31, 2025 (the "Form 10-K") and subsequent periodic and or current reports filed with the Securities and Exchange Commission (the "SEC").
The forward-looking statements contained in this press release are based on assumptions that we have made in light of our industry experience and our perceptions of historical trends, current conditions, expected future developments and other factors we believe are appropriate under the circumstances. As you read and consider this press release, you should understand that these statements are not guarantees of performance or results. They involve risks, uncertainties (many of which are beyond our control) and assumptions.
Although we believe that these forward-looking statements are based on reasonable assumptions, you should be aware that many factors could affect our actual operating and financial performance and cause our performance to differ materially from the performance expressed in or implied by the forward-looking statements. We believe these factors include, but are not limited to, the following: the ability to realize the benefits of our strategic shift to focusing on driving digital marketing spend among buy-side and new enterprise customers; the restrictions and covenants imposed upon us by our credit facilities; the substantial doubt about our ability to continue as a going concern, which may hinder our ability to obtain future financing; our ability to secure additional financing to meet our capital needs; our ability to maintain compliance with the listing standards of the Nasdaq Capital Market; any significant fluctuations caused by our high customer concentration; risks related to non-payment by our clients; reputational and other harms caused by our failure to detect advertising fraud; operational and performance issues with our platform, whether real or perceived, including a failure to respond to technological changes or to upgrade our technology systems; restrictions on the use of third-party "cookies," mobile device IDs or other tracking technologies, which could diminish our platform's effectiveness; unfavorable publicity and negative public perception about our industry, particularly concerns regarding data privacy and security relating to our industry's technology and practices, and any perceived failure to comply with laws and industry self-regulation; our failure to manage our growth effectively; the difficulty in identifying and integrating any future acquisitions or strategic investments; any changes or developments in legislative, judicial, regulatory or cultural environments related to information collection, use and processing; challenges related to our buy-side clients that are destination marketing organizations and that operate as public/private partnerships; any strain on our resources or diversion of our management's attention as a result of being a public company; the intense competition of the digital advertising industry and our ability to effectively compete against current and future competitors; any significant inadvertent disclosure or breach of confidential and/or personal information we hold, or of the security of our or our customers', suppliers' or other partners' computer systems; as a holding company, we depend on distributions from Direct Digital Holdings, LLC ("DDH LLC") to pay our taxes, expenses (including payments under the Tax Receivable Agreement) and any amount of any dividends we may pay to the holders of our common stock; any failure by us to maintain or implement effective internal controls or to detect fraud; and other factors and assumptions discussed in our Form 10-K and subsequent periodic and current reports we may file with the SEC.
Should one or more of these risks or uncertainties materialize or should any of these assumptions prove to be incorrect, our actual operating and financial performance may vary in material respects from the performance projected in these forward-looking statements. Further, any forward-looking statement speaks only as of the date on which it is made, and except as required by law, we undertake no obligation to update any forward-looking statement contained in this press release to reflect events or circumstances after the date on which it is made or to reflect the occurrence of anticipated or unanticipated events or circumstances, and we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. New factors that could cause our business not to develop as we expect emerge from time to time, and it is not possible for us to predict all of them. Further, we cannot assess the impact of each currently known or new factor on our results of operations or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.
About Direct Digital Holdings
Direct Digital Holdings (Nasdaq: DRCT) combines cutting-edge sell-side and buy-side advertising solutions, providing data-driven digital media strategies that enhance reach and performance for brands, agencies, and publishers of all sizes. Our sell-side platform, Colossus SSP, offers curated access to premium, growth-oriented media properties throughout the digital ecosystem. On the buy-side, Orange 142 delivers customized, audience-focused digital marketing and advertising solutions that enable mid-market and enterprise companies to achieve measurable results across a range of platforms, including programmatic, search, social, CTV, and influencer marketing. With extensive expertise in high-growth sectors such as Energy, Healthcare, Travel & Tourism, and Financial Services, our teams deliver performance strategies that connect brands with their ideal audiences.
At Direct Digital Holdings, we prioritize personal relationships by humanizing technology, ensuring each client receives dedicated support and tailored digital marketing solutions regardless of company size. This empowers everyone to thrive by generating billions of monthly impressions across display, CTV, in-app, and emerging media channels through advanced targeting, comprehensive data insights, and cross-platform activation. DDH is "Digital advertising built for everyone."
DIRECT DIGITAL HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and par value amounts)
December 31,
-------------------------------------
2025 2024
------------------ -----------------
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 728 $ 1,445
Accounts receivable, net of provision
for credit losses of $944 and $978 3,126 4,973
Prepaid expenses and other current
assets 890 2,117
------------------ -----------------
Total current assets 4,744 8,535
------------------ -----------------
Property, equipment and software, net 166 341
Goodwill 6,520 6,520
Intangible assets, net 7,852 9,730
Operating lease right-of-use assets 702 832
Other long-term assets 172 48
------------------ -----------------
Total assets $ 20,156 $ 26,006
================== =================
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Accounts payable $ 7,820 $ 7,657
Accrued liabilities 2,164 1,257
Accrued liabilities - related party 3,663 --
Liability related to tax receivable
agreement, current portion 41 41
Current maturities of long-term debt -- 3,700
Current maturities of long-term debt
- related party 12,003 --
Deferred revenues 513 507
Operating lease liabilities, current
portion 221 188
Total current liabilities 26,425 13,350
Long-term debt, net of current
portion, deferred financing cost and
debt discount 146 31,603
Operating lease liabilities, net of
current portion 608 783
------------------ -----------------
Total liabilities 27,179 45,736
------------------ -----------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' DEFICIT
Series A Convertible Preferred Stock,
$0.001 par value per share,
10,000,000 shares authorized, 27,077
and 0 shares issued and outstanding,
respectively -- --
Class A Common Stock, $0.001 par
value per share, 760,000,000 and
160,000,000 shares authorized,
respectively, 1,324,307 and 99,100
shares issued and outstanding,
respectively 1 --
Class B Common Stock, $0.001 par
value per share, 20,000,000 shares
authorized, 168,645 and 197,600
shares issued and outstanding -- --
Additional paid-in capital 25,811 3,786
Accumulated deficit (27,720) (8,774)
Noncontrolling interest (5,115) (14,742)
------------------ -----------------
Total stockholders' deficit (7,023) (19,730)
------------------ -----------------
Total liabilities and stockholders'
deficit $ 20,156 $ 26,006
================== =================
DIRECT DIGITAL HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per-share data)
(Unaudited)
--------------------------------------------------------------- ---------------------------------------------------
For the Three Months Ended December 31, For the Year Ended December 31,
--------------------------------------------------------------- ---------------------------------------------------
2025 2024 2025 2024
------------------------------ ------------------------------- ------------------------- ------------------------
Revenues
Sell-side
advertising $ 182 $ 2,659 $ 5,335 $ 35,660
Buy-side
advertising 8,226 6,424 29,359 26,628
------------------------------- ------------------------- ------------------------
Total revenues 8,408 9,083 34,694 62,288
------------------------------ ------------------------------- ------------------------- ------------------------
Cost of revenues
Sell-side
advertising 1,103 3,393 8,049 34,063
Buy-side
advertising 5,055 2,743 16,226 10,834
------------------------------- ------------------------- ------------------------
Total cost of
revenues 6,158 6,136 24,275 44,897
------------------------------ ------------------------------- ------------------------- ------------------------
Gross profit 2,250 2,947 10,419 17,391
Operating
expenses
Compensation,
taxes and
benefits 3,585 4,186 14,512 16,402
General and
administrative 3,160 3,465 10,662 14,222
Total operating
expenses 6,745 7,651 25,174 30,624
------------------------------ ------------------------------- ------------------------- ------------------------
Loss from
operations (4,495) (4,704) (14,755) (13,233)
Other income
(expense)
Other income 16 9 77 199
Expenses and
commitment
shares for
Equity Reserve
Facility -- (532) (198) (532)
Loss on
settlement of
accounts
payable (267) -- (267) --
Loss on debt
extinguishment (3,769) -- (3,769) --
Loss on Exit Fee (3,608) -- (3,608) --
Derecognition of
tax receivable
agreement
liability -- -- -- 5,201
Interest expense
and amortization
of deferred
financing cost
and debt
discount
(premium), net (464) (1,342) (5,203) (5,410)
------------------------- ------------------------
Total other
expense, net (8,092) (1,865) (12,968) (542)
------------------------------ ------------------------------- ------------------------- ------------------------
Loss before
income taxes (12,587) (6,569) (27,723) (13,775)
Income tax
expense -- -- -- 6,132
------------------------------ ------------------------------- ------------------------- ------------------------
Net loss (12,587) (6,569) (27,723) (19,907)
------------------------------ ------------------------------- ------------------------- ------------------------
Net loss
attributable to
noncontrolling
interest (925) (4,388) (8,777) (13,671)
------------------------------- ------------------------- ------------------------
Net loss
attributable to
Direct Digital
Holdings, Inc. $ (11,662) $ (2,181) $ (18,946) $ (6,236)
============================== =============================== ========================= ========================
Net loss per
common share
attributable to
Direct Digital
Holdings, Inc.:
Basic $ (22.00) $ (29.88) $ (75.79) $ (91.26)
============================== =============================== ========================= ========================
Diluted $ (22.00) $ (29.88) $ (75.79) $ (91.26)
============================== =============================== ========================= ========================
Weighted-average
number of shares
of common stock
outstanding:
Basic 691 73 308 68
============================== =============================== ========================= ========================
Diluted 691 73 308 68
============================== =============================== ========================= ========================
DIRECT DIGITAL HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
For the Year Ended December 31,
---------------------------------------------------------------------
2025 2024
---------------------------------- ---------------------------------
Cash Flows Used In
Operating
Activities:
Net loss $ (27,723) $ (19,907)
Adjustments to
reconcile net loss
to net cash used
in operating
activities:
Amortization of
deferred
financing cost
and debt
discount
(premium),
net 3,162 1,092
Amortization of
intangible
assets 1,879 1,954
Reduction in
carrying
amount of
right-of-use
assets 182 156
Depreciation
and
amortization
of property,
equipment and
software 262 275
Stock-based
compensation 1,470 1,552
Deferred income
taxes -- 6,132
Derecognition
of tax
receivable
agreement
liability -- (5,201)
Loss on debt
extinguishment 3,769 --
Loss on Exit
Fee 3,608 --
Loss on
settlement of
accounts
payable 267 --
Interest paid
in kind 1,100 --
Commitment
shares and
expenses for
Equity Reserve
Facility -- 532
Provision for
credit
losses/bad
debt expense 6 619
Changes in
operating
assets and
liabilities:
Accounts
receivable 1,841 31,615
Prepaid
expenses and
other
assets (27) (60)
Accounts
payable 911 (26,269)
Accrued
liabilities
and TRA
payable 638 (1,103)
Income taxes
payable , (65) (34)
Deferred
revenues 6 126
Operating
lease
liability (193) (127)
---------------------------------- ---------------------------------
Net cash used
in operating
activities (8,907) (8,648)
Cash Flows Used In
Investing
Activities:
Cash paid for
capitalized
software and
property and
equipment (87) (17)
---------------------------------- ---------------------------------
Net cash used
in investing
activities (87) (17)
Cash Flows
Provided by
Financing
Activities:
Proceeds from
note payable 3,804 4,000
Payments on
term loan -- (373)
Proceeds from
lines of
credit -- 6,700
Payments on
lines of
credit (3,700) (6,000)
Payment of
expenses for
Equity Reserve
Facility (198) (382)
Payment of
deferred
financing
costs -- (26)
Proceeds from
issuance of
Class A Common
Stock 8,688 1,646
Payments on
financed
insurance
premiums (317) --
Payment of tax
related to
shares
withheld upon
vesting -- (878)
Proceeds from
options
exercised -- 92
Proceeds from
warrants
exercised -- 215
Net cash
provided by
financing
activities 8,277 4,994
Net decrease
in cash,
cash
equivalents
and
restricted
cash (717) (3,671)
Cash, cash
equivalents and
restricted cash,
beginning of the
period 1,445 5,116
---------------------------------- ---------------------------------
Cash, cash
equivalents and
restricted cash,
end of the
period $ 728 $ 1,445
================================== =================================
Supplemental
Disclosure of Cash
Flow Information:
Cash paid for
taxes $ 3 $ 388
================================== =================================
Cash paid for
interest $ 835 $ 4,300
================================== =================================
Non-cash
Activities:
Conversion of term
loan into
preferred stock
net of premium $ 30,748 $ --
================================== =================================
Accrued term loan
amendment closing
fees $ -- $ 3,000
================================== =================================
Settlement of
accounts payable
through issuance
of common stock $ 941 $ --
================================== =================================
Financed insurance
premiums $ 291 $ 129
================================== =================================
Non-cash funding
of debt issuance
costs $ 63 $ --
================================== =================================
Accrued dividends $ 55 $ --
================================== =================================
Funding of
interest reserve
through debt $ -- $ 2,000
================================== =================================
Common stock
issued for
subscription
receivable $ -- $ 1,362
================================== =================================
Issuance of stock
in lieu of cash
bonus, net of tax
withholdings $ -- $ 906
================================== =================================
NON-GAAP FINANCIAL MEASURES
In addition to our results determined in accordance with U.S. generally accepted accounting principles ("GAAP"), including, in particular operating income, net cash provided by operating activities, and net income, we believe that earnings before interest, taxes, depreciation and amortization, as adjusted for stock-based compensation, expenses and commitment shares for the Equity Reserve Facility, losses on debt extinguishment, Exit Fee, settlement of accounts payable and derecognition of tax receivable agreement liability ("Adjusted EBITDA"), a non-GAAP measure, is useful in evaluating our operating performance. The most directly comparable GAAP measure to Adjusted EBITDA is net income. The following table (in thousands) presents a reconciliation of Adjusted EBITDA to net loss for each of the periods presented (unaudited):
Three Months Ended Year Ended
December 31, December 31,
------------------------------------- ---------------------------------
2025 2024 2025 2024
----------------- ------------------ --------------- ----------------
Net loss $ (12,587) $ (6,569) $ (27,723) $ (19,907)
Add back
(deduct):
Interest
expense and
amortization
of deferred
financing cost
and debt
discount
(premium),
net 464 1,342 5,203 5,410
Amortization of
intangible
assets 414 489 1,879 1,954
Stock-based
compensation 391 741 1,470 1,552
Depreciation
and
amortization
of property,
equipment and
software 47 70 262 275
Loss on debt
extinguishment 3,769 -- 3,769 --
Loss on Exit
Fee 3,608 -- 3,608 --
Loss on
settlement of
accounts
payable 267 -- 267 --
Expenses and
commitment
shares for
Equity Reserve
Facility -- 532 198 532
Income tax
expense -- -- -- 6,132
Derecognition
of tax
receivable
agreement
liability -- -- -- (5,201)
Adjusted EBITDA $ (3,627) $ (3,395) $ (11,067) $ (9,253)
================= ================== =============== ================
In addition to operating income and net income, we use Adjusted EBITDA as a measure of operational efficiency. We believe that this non-GAAP financial measure is useful to investors for period-to-period comparisons of our business and in understanding and evaluating our operating results for the following reasons:
-- Adjusted EBITDA is widely used by investors and securities analysts to
measure a company's operating performance without regard to items such as
depreciation and amortization, interest expense, provision for income
taxes, stock-based compensation and certain items such as acquisition
transaction costs, losses from financing activities (including debt
extinguishment and Exit Fee) and costs for the Equity Reserve Facility
that can vary substantially from company to company depending upon their
financing, capital structures and the method by which assets were
acquired;
-- Our management uses Adjusted EBITDA in conjunction with GAAP financial
measures for planning purposes, including the preparation of our annual
operating budget, as a measure of operating performance and the
effectiveness of our business strategies and in communications with our
board of directors concerning our financial performance; and
-- Adjusted EBITDA provides consistency and comparability with our past
financial performance, facilitates period-to-period comparisons of
operations, and also facilitates comparisons with other peer companies,
many of which use similar non-GAAP financial measures to supplement their
GAAP results.
Our use of this non-GAAP financial measure has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our financial results as reported under GAAP.
Contacts:
Investors:
IMS Investor Relations
Walter Frank/Jennifer Belodeau
(203) 972-9200
investors@directdigitalholdings.com
(1) "Adjusted EBITDA" is a non-GAAP financial measure. The section titled "Non-GAAP Financial Measures" below describes our usage of non-GAAP financial measures and provides reconciliations between historical GAAP and non-GAAP information contained in this press release.
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SOURCE Direct Digital Holdings
(END) Dow Jones Newswires
March 31, 2026 19:09 ET (23:09 GMT)
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