DV Stock Rips Higher on Record Q2 Results

There aren’t very many tech stocks generating a lot of attention these days. Most investors are waiting to see when the stock market will bottom. And with a recession looming and interest rates on the rise, investors are avoiding shares of tech companies that aren't profitable.

One tech stock that has been defying the macroeconomic odds right now is DoubleVerify Holdings Inc (NYSE:DV). DoubleVerify stock has been on fire since the company reported “outstanding” second-quarter financial results in early August. Since that time, DV stock has rallied by an impressive 23%.

There’s lots of room for improvement, though. DoubleVerify stock is down by 15% year-to-date and 20% year-over-year but its outlook is robust.

Based on DoubleVerify Holdings Inc's excellent results in the first half of 2022, its management team raised their guidance for full-year revenue and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA).

DoubleVerify Holdings Inc’s wonderful financial results and guidance have juiced DV stock's share price over the last month.

Moreover, DoubleVerify stock is on its way to forming an important technical indicator, a golden cross. It’s a bullish chart pattern wherein the 50-day moving average crosses over the 200-day moving average. Correlation is not causation, but it does point to the likelihood of DoubleVerify Holdings Inc’s share price moving even higher.

Chart courtesy of StockCharts.com

About DoubleVerify Holdings Inc

DoubleVerify offers a leading software platform for digital media measurement, data, and analytics. Online businesses collect mountains of data, and DoubleVerify helps those businesses interpret that data and gain valuable insights into their customers.

This allows DoubleVerify Holdings Inc's clients to improve the effectiveness of their advertising campaigns, attract customers, and increase the returns on their digital advertising investments.

The company's offerings include "DV Authentic Ad," "DV Authentic Attention," "DV Custom Contextual," "DV Publisher," "DV Pinnacle," and supply-side solutions. (Source: “Investor Day 2022,” DoubleVerify Holdings Inc, February 25, 2022.)

• DV Authentic Ad evaluates digital ads in terms of brand safety, viewability, geography, and the existence of fraud
• DV Authentic Attention makes predictive measurements of digital ad performance
• DV Custom Contextual allows advertisers to match their ads to relevant content in order to maximize user engagement and drive campaign performance
• DV Publisher is a suite for digital publishers to manage revenues and increase inventory yield by improving video delivery, identifying lost or unfilled sales, and aggregating data across all inventory sources
• DV Pinnacle allows businesses to adjust and deploy controls for their media plans and track campaign performance across channels, formats, and devices
• Supply-side solutions validate the quality of ad inventory and provide metrics to facilitate the targeting and purchasing of digital ads

DoubleVerify Holdings Inc's software is integrated into the digital advertising ecosystem, including programmatic platforms, connected TV, social media channels, and digital publishers.

The company's clients include hundreds of Fortune 500 advertisers, as well as various brands, publishers, and other organizations in the consumer packaged goods, financial services, telecommunications, technology, automotive, and health-care sectors.

DoubleVerify Reports “Outstanding” Q2 Results & Raises Guidance

For the second quarter ended June 30, DoubleVerify announced “outstanding” second-quarter results that exceeded the company’s own expectations for growth and profitability. (Source: “DoubleVerify Reports Second Quarter 2022 Financial Results,” DoubleVerify Holdings Inc, August 3, 2022.)

The company's total revenue in the quarter went up by 43% year-over-year to $109.8 million. DoubleVerify Holdings Inc swung to second-quarter profitability of $10.3 million, or $0.06 per share, from a second-quarter 2021 net loss of $12.5 million, or $0.08 per share. The company's adjusted EBITDA went up by 60% year-over-year to a record $33.9 million, representing a 31% adjusted EBITDA margin.

Mark Zagorski, DoubleVerify Holdings Inc's CEO, commented, “Based on our strong results in the first half of 2022, we are raising our guidance for full year revenue and adjusted EBITDA." (Source: Ibid.)

He continued, "We remain confident that our growing global scale, market leading innovation, and legacy of trust will further deepen our client relationships and fuel steady growth that will outperform our competitors and the broader digital ad industry in 2022 and beyond.”

For the third quarter of 2022, DoubleVerify Holdings Inc expects to report revenue in the range of $108.0 to $110.0 million (31% year-over-year increase at the midpoint) and adjusted EBITDA in the range of $32.0 to $34.0 million (30% margin at the midpoint).

For full-year 2022, the company expects to report revenue in the range of $448.0 to $450.0 million (35% year-over-year increase at the midpoint) and adjusted EBITDA in the range of $136.0 to $140.0 million (31% margin at the midpoint).

Analyst Take

There’s a lot to like about DoubleVerify Holdings Inc.

It's all in the numbers. The company reported fabulous second-quarter results, which included record revenue, record adjusted EBITDA, and a swing to profitability.

The good times are expected to continue, with the company raising its midpoint guidance for the fiscal year and DV stock set to climb in value.