Revenue has experienced a severe contraction of over 83% since 2023Q4, while gross margins have deteriorated to a negative 18.8% as of 2026Q1.
| Sales/Revenue | 33.22M | 34.69M | 62.29M | 157.11M | 89.36M | 38.14M | 12.48M | 6.27M |
| Revenue Growth % | -31.04% | -44.3% | -60.35% | 75.82% | 134.31% | 205.64% | 98.97% | - |
| Cost of Goods Sold | 26.44M | 24.27M | 44.9M | 119.54M | 60.04M | 19.71M | 7.31M | 4.54M |
| COGS % of Revenue | - | 69.97% | 72.08% | 76.08% | 67.19% | 51.68% | 58.55% | 72.34% |
| Gross Profit | 6.77M | 10.42M | 17.39M | 37.57M | 29.32M | 18.43M | 5.17M | 1.73M |
| Gross Margin % | 20.39% | 30.03% | 27.92% | 23.92% | 32.81% | 48.32% | 41.45% | 27.66% |
| Gross Profit Growth % | - | -40.09% | -53.72% | 28.14% | 59.11% | 256.3% | 198.21% | - |
| Operating Expenses | 20.86M | 25.17M | 30.62M | 39.76M | 21.34M | 14.04M | 6.02M | 2.61M |
| OpEx % of Revenue | - | 72.56% | 49.17% | 25.31% | 23.88% | 36.83% | 48.22% | 41.57% |
| Selling, General & Admin | 17.76M | 25.17M | 30.62M | 30.93M | 21.34M | 14.04M | 5.18M | 2.61M |
| SG&A % of Revenue | - | 72.56% | 49.17% | 19.69% | 23.88% | 36.83% | 41.53% | 41.57% |
| Research & Development | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| R&D % of Revenue | - | - | - | - | - | - | - | - |
| Other Operating Expenses | 506K | 0 | 0 | 8.83M | 0 | 0 | 834.41K | 0 |
| Operating Income | -14.08M | -14.76M | -13.23M | -2.19M | 7.98M | 4.38M | -844.56K | -872.47K |
| Operating Margin % | -42.4% | -42.53% | -21.24% | -1.39% | 8.93% | 11.5% | -6.77% | -13.91% |
| Operating Income Growth % | - | -11.5% | -505.63% | -127.38% | 81.98% | 619.16% | 3.2% | - |
| EBITDA | -11.91M | -12.43M | -10.85M | 186K | 10.1M | 6.34M | -356.11K | -787.53K |
| EBITDA Margin % | -35.87% | -35.83% | -17.42% | 0.12% | 11.31% | 16.62% | -2.85% | -12.56% |
| EBITDA Growth % | 0.3% | -14.6% | -5932.26% | -98.16% | 59.41% | 1879.9% | 54.78% | - |
| D&A (Non-Cash Add-back) | 2.17M | 2.32M | 2.38M | 2.37M | 2.13M | 1.95M | 488.45K | 0 |
| EBIT | -21.89M | -22.52M | -8.37M | -1.9M | 7.72M | 1.74M | -31.01K | -787.53K |
| Net Interest Income | -2.79M | -5.2M | -5.41M | -4.38M | -3.23M | -3.18M | -865.05K | -57.1K |
| Interest Income | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Interest Expense | 2.79M | 5.2M | 5.41M | 4.38M | 3.23M | 3.18M | 865.05K | 57.1K |
| Other Income/Expense | -13.27M | -12.97M | -542K | -4.09M | -3.49M | -5.83M | -51.5K | 27.84K |
| Pretax Income | -27.35M | -27.72M | -13.78M | -6.28M | 4.49M | -1.44M | -896.07K | -844.63K |
| Pretax Margin % | -82.35% | -79.91% | -22.12% | -3.99% | 5.03% | -3.79% | -7.18% | -13.47% |
| Income Tax | 0 | 0 | 6.13M | 568K | 326K | 63.53K | 12.12K | 39.14K |
| Effective Tax Rate % | 0% | 0% | -44.52% | -9.05% | 7.26% | -4.4% | -1.35% | -4.63% |
| Net Income | -21.84M | -18.95M | -6.24M | -2.19M | 205K | -1.51M | -908.19K | -883.77K |
| Net Margin % | -65.75% | -54.61% | -10.01% | -1.4% | 0.23% | -3.95% | -7.28% | -14.09% |
| Net Income Growth % | -179.44% | -203.82% | -184.23% | -1170.24% | 113.6% | -65.95% | -2.76% | - |
| Net Income (Continuing) | -27.35M | -27.72M | -19.91M | -6.84M | 4.17M | -1.51M | -908.19K | -883.77K |
| Discontinued Operations | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Minority Interest | -5.16M | -5.12M | -14.74M | -4.22M | 3.31M | 0 | 0 | 0 |
| EPS (Diluted) | -37.98 | -75.79 | -1.66 | -0.73 | 0.20 | -0.38 | -0.32 | -0.32 |
| EPS Growth % | -1526.47% | -4465.66% | -127.4% | -465% | 152.63% | -18.75% | 0% | - |
| EPS (Basic) | - | -75.79 | -1.66 | -0.73 | 0.11 | -0.38 | -0.32 | -0.32 |
| Diluted Shares Outstanding | 575K | 308K | 3.76M | 2.99M | 14.7M | 4M | 2.8M | 2.8M |
| Basic Shares Outstanding | 575K | 308K | 3.76M | 2.99M | 14.4M | 4M | 2.8M | 2.8M |
| Dividend Payout Ratio | - | - | - | - | 825.85% | - | - | - |
Liquidity and solvency risk
As indicated by the most recent quarterly filings, DRCT's revenue has experienced a severe contraction, plummeting from $41.0 million in 2023Q4 to just $6.7 million in 2026Q1, reflecting a significant loss of market share and reduced transaction volume within its programmatic advertising ecosystem.
The consistent quarter-over-quarter decline suggests that the company's niche focus on diverse-targeted media properties is failing to insulate it from broader industry headwinds. Investors should consider whether this trend represents a structural loss of relevance among major agency holding companies or merely a cyclical downturn in ad-spend.
Based on the provided financial data, the company's gross margin profile has become increasingly erratic, reaching a negative 18.8% in 2026Q1, which highlights the inability of the current take-rate model to cover the underlying costs of publisher inventory in a competitive programmatic environment.
The shift from positive gross margins to negative territory suggests that the company may be paying more for inventory than it is able to recoup from advertisers. This deterioration implies that the firm lacks the pricing power necessary to maintain profitability when transaction volumes decline.
According to reported income statements, DRCT's operating margin has remained consistently negative, bottoming out at -53.5% in 2025Q4, which demonstrates a failure to achieve the necessary scale to offset fixed overhead costs such as technology maintenance and personnel expenses.
The lack of operating leverage indicates that the company's cost structure is too rigid for its current revenue scale. Without a significant increase in platform volume, the firm appears unable to achieve the efficiencies required to reach even a breakeven operating income level.
As reported in recent financial statements, the company's net income has been consistently negative, with a net margin of -78.6% in 2026Q1, further exacerbated by ongoing stock-based compensation expenses that continue to dilute shareholders despite the lack of operational profitability.
The persistent net losses, combined with the company's history of internal control weaknesses, suggest that reported earnings quality is low. Investors should monitor whether the continued issuance of stock-based compensation is sustainable given the company's precarious liquidity position and lack of positive cash flow.
Based on the latest balance sheet figures, the company's cash and equivalents have dwindled to $728,000, a level that appears insufficient to support its ongoing operating losses, raising significant concerns regarding the firm's ability to continue as a going concern without immediate external financing.
While some might argue the company holds strategic value as a potential acquisition target for its DEI-focused inventory, the current financial trajectory suggests a high risk of insolvency. The market's pricing likely reflects this distress, as the company struggles to maintain the operational stability required to retain agency trust.
Quick answers to the most common questions about buying DRCT stock.
For fiscal year 2025, Direct Digital Holdings, Inc. (DRCT) reported total revenue of $34.7M. This represents a 453.2% increase compared to $6.3M in 2019.
Direct Digital Holdings, Inc. (DRCT) reported a net loss of $18.9M for the fiscal year ending 2025.
Direct Digital Holdings, Inc. (DRCT) reported an operating income of $-14.8M, resulting in an operating profit margin of -42.5%. This margin reflects the operational efficiency of the business before interest and taxes.
Direct Digital Holdings, Inc. (DRCT) generated $10.4M in gross profit for the year, representing a gross profit margin of 30.0%. This demonstrates the company's core pricing power and production efficiency.