HOUSTON - Direct Digital Holdings, Inc. (NASDAQ: DRCT), a prominent ad-tech platform, has appointed BDO USA, P.C. as its new independent registered public accounting firm, effective today. The announcement marks a significant shift in the company's financial oversight, with BDO taking over from Marcum LLP, the previous auditor.
BDO is recognized as one of the top five global accounting organizations, providing assurance, tax, and advisory services worldwide. With a network of over 12,000 professionals in 75 offices across the United States, BDO's extensive experience in the advertising technology sector is expected to bring valuable insights to Direct Digital Holdings.
Diana Diaz, the Chief Financial Officer of Direct Digital Holdings, expressed confidence in the new partnership, highlighting BDO's industry expertise. Diaz anticipates that BDO's contributions will support the company's growth strategy and enhance its financial reporting and corporate governance practices. She also mentioned the company's intention to resume regular quarterly and annual filings promptly.
Direct Digital Holdings operates through its subsidiaries, Colossus Media, LLC, Huddled Masses LLC, and Orange 142, offering comprehensive sell- and buy-side advertising platforms. The company's technology manages over 115,000 clients monthly, generating more than 326 billion impressions across various media channels.
This transition to BDO as the company's auditor comes as Direct Digital Holdings continues to navigate the competitive digital advertising landscape, focusing on delivering high-quality services and maintaining robust financial practices.
In other recent news, Direct Digital Holdings has been navigating through a spectrum of developments. The company received a non-compliance notice from Nasdaq due to a delay in filing its Annual Report for the fiscal year ended December 31, 2023. Direct Digital Holdings is actively working to complete the audit of its financial statements and aims to file the Annual Report as soon as possible to regain compliance.
In addition, the company experienced a revision in its stock outlook, with Roth/MKM and Benchmark analysts maintaining a Buy rating but reducing the price target. The adjustments follow the company's fourth-quarter results, which did not meet expectations due to a strategic shift and operational delays.
Direct Digital Holdings reported a 76% increase in total revenue for 2023, reaching $157.1 million, and an adjusted EBITDA of $11.3 million, up by 11%. Despite facing challenges like lower demand in the fourth quarter and a decrease in gross profit margin due to higher costs, the company forecasts a revenue increase to between $170 million and $190 million for fiscal year 2024. These recent developments highlight the company's ongoing efforts to navigate the dynamic market conditions.
InvestingPro Insights
Amidst the significant changes at Direct Digital Holdings, Inc. (NASDAQ: DRCT), including the appointment of BDO USA, P.C. as its new auditor, investors and stakeholders are keenly observing the company's financial metrics and market performance. According to InvestingPro data, Direct Digital Holdings currently sports a market capitalization of $35.44 million. Despite its challenges, the company has experienced a remarkable revenue growth of 75.82% over the last twelve months as of Q1 2023, indicating a strong sales trajectory.
However, an InvestingPro Tip points out that the stock has been subject to high price volatility, which is corroborated by the fact that the company's stock price has plummeted by 89.5% over the last three months. This volatility may be a factor for potential investors to consider, especially those looking for stable returns. Additionally, Direct Digital Holdings has been trading at a high Price / Book multiple of 16.39, which suggests that the stock might be priced optimistically relative to its book value.
On the brighter side, another InvestingPro Tip reveals that the company's liquid assets exceed its short-term obligations, which could provide some financial flexibility in the near term. This is particularly relevant as the company seeks to enhance its financial reporting and corporate governance practices under the guidance of BDO.
For investors seeking a deeper analysis and more InvestingPro Tips, there are additional insights available on Direct Digital Holdings at https://www.investing.com/pro/DRCT. To access this valuable information, consider using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, and discover the numerous other tips that InvestingPro has to offer.
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