Direct Digital Holdings, Inc. Financials
This page shows Direct Digital Holdings, Inc. (DRCT) financial statements, including the income statement, balance sheet, cash flow statement, and key financial ratios. View 5 years of annual fundamentals and quarterly data, with year-over-year growth rates and compound annual growth rates (CAGR). All figures are derived from SEC filings (10-K and 10-Q reports).
Shrinking revenue is colliding with short-term balance-sheet pressure, leaving improved gross margin unable to offset fixed costs.
The striking shift is that gross-margin recovery did not improve the economics of the whole company: revenue dropped from$62.3M to$34.7M , so a slightly richer spread on each sale was overwhelmed by too little volume to cover overhead. That is why cash burn stayed heavy even as unit economics improved, pointing to a scale and working-capital problem more than a pure cost-of-revenue problem.
By FY2025, near-term obligations dominated the balance sheet:
Revenue has been falling faster than the cost base can reset, which is classic operating deleverage rather than a simple gross-margin collapse. A
Financial Health Signals
Based on FY2025 annual data, averaged across the last 3 years for performance metrics (most-recent year weighted highest). How this score is calculated →
Health score ≠ stock price. This rates the quality of Direct Digital Holdings, Inc.'s business: profitability, growth, balance sheet strength. It doesn't tell you whether the stock is a good buy at today's price. Not financial advice. Use it alongside valuation analysis and your own research.
Direct Digital Holdings, Inc. has an operating margin of -42.5%, meaning the company retains $-43 of operating profit per $100 of revenue. This below-average margin results in a low score of 0/100, suggesting thin profitability after operating expenses. This is down from -21.2% the prior year.
Direct Digital Holdings, Inc.'s revenue declined 44.3% year-over-year, from $62.3M to $34.7M. This contraction results in a growth score of 0/100.
Direct Digital Holdings, Inc. has elevated debt relative to equity (D/E of -0.02), meaning the company relies heavily on borrowed funds. This high leverage results in a low score of 0/100, reflecting increased financial risk.
Direct Digital Holdings, Inc.'s current ratio of 0.18 is below the typical benchmark, resulting in a score of 0/100. This tight liquidity could limit financial flexibility if cash inflows slow.
Direct Digital Holdings, Inc. passes 3 of 9 financial strength tests. 1 of 4 profitability signals pass, 1 of 2 leverage/liquidity signals pass, 1 of 2 efficiency signals pass.
For every $1 of reported earnings, Direct Digital Holdings, Inc. generates $0.47 in operating cash flow (-$8.9M OCF vs -$18.9M net income). This low ratio suggests earnings are primarily driven by accounting accruals rather than cash generation, which may not be sustainable.
Direct Digital Holdings, Inc. earns $-2.8 in operating income for every $1 of interest expense (-$14.8M vs $5.2M). This narrow margin raises concern about the company's ability to service its debt if operating income declines.
Key Financial Metrics
Earnings & Revenue
Direct Digital Holdings, Inc. generated $34.7M in revenue in fiscal year 2025. This represents a decrease of 44.3% from the prior year.
Direct Digital Holdings, Inc.'s EBITDA was -$14.5M in fiscal year 2025, measuring earnings before interest, taxes, depreciation, and amortization. This represents a decrease of 11.8% from the prior year.
Direct Digital Holdings, Inc. reported -$18.9M in net income in fiscal year 2025. This represents a decrease of 203.8% from the prior year.
Direct Digital Holdings, Inc. earned $-75.79 per diluted share (EPS) in fiscal year 2025. This represents an increase of 17.0% from the prior year.
Cash & Balance Sheet
Direct Digital Holdings, Inc. held $728K in cash against $146K in long-term debt as of fiscal year 2025.
Margins & Returns
Direct Digital Holdings, Inc.'s gross margin was 30.0% in fiscal year 2025, indicating the percentage of revenue retained after direct costs. This is up 2.1 percentage points from the prior year.
Direct Digital Holdings, Inc.'s operating margin was -42.5% in fiscal year 2025, reflecting core business profitability. This is down 21.3 percentage points from the prior year.
Direct Digital Holdings, Inc.'s net profit margin was -54.6% in fiscal year 2025, showing the share of revenue converted to profit. This is down 44.6 percentage points from the prior year.
Capital Allocation
DRCT Income Statement
| Metric | Q1'26 | Q4'25 | Q3'25 | Q2'25 | Q1'25 | Q4'24 | Q3'24 | Q2'24 |
|---|---|---|---|---|---|---|---|---|
| Revenue | $6.7M-20.6% | $8.4M+5.3% | $8.0M-21.3% | $10.1M+24.4% | $8.2M-10.2% | $9.1M+0.1% | $9.1M-58.5% | $21.9M |
| Cost of Revenue | $4.4M-28.3% | $6.2M+6.7% | $5.8M-12.3% | $6.6M+14.2% | $5.8M-6.0% | $6.1M+10.3% | $5.6M-65.1% | $15.9M |
| Gross Profit | $2.3M+0.5% | $2.3M+1.7% | $2.2M-37.8% | $3.6M+48.8% | $2.4M-18.8% | $2.9M-16.1% | $3.5M-40.8% | $5.9M |
| R&D Expenses | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
| SG&A Expenses | $2.5M-21.1% | $3.2M+26.3% | $2.5M+6.5% | $2.3M-11.5% | $2.7M-23.4% | $3.5M-5.0% | $3.6M-4.8% | $3.8M |
| Operating Income | -$3.3M+27.7% | -$4.5M-14.9% | -$3.9M-61.2% | -$2.4M+38.2% | -$3.9M+16.6% | -$4.7M-28.6% | -$3.7M-77.1% | -$2.1M |
| Interest Expense | $563K+21.3% | $464K-58.0% | $1.1M-38.3% | $1.8M-3.1% | $1.8M+37.6% | $1.3M-5.0% | $1.4M+4.1% | $1.4M |
| Income Tax | $0 | $0 | $0 | $0 | $0 | $0-100.0% | $6.6M+2510.9% | -$274K |
| Net Income | -$5.3M+55.0% | -$11.7M-335.1% | -$2.7M-19.2% | -$2.2M+4.5% | -$2.4M-8.0% | -$2.2M+18.9% | -$2.7M-355.9% | -$590K |
| EPS (Diluted) | $-10.32 | N/A | $-0.24-4.3% | $-0.23+34.3% | $-0.35 | N/A | $-0.71-343.7% | $-0.16 |
DRCT Balance Sheet
| Metric | Q1'26 | Q4'25 | Q3'25 | Q2'25 | Q1'25 | Q4'24 | Q3'24 | Q2'24 |
|---|---|---|---|---|---|---|---|---|
| Total Assets | $19.3M-4.5% | $20.2M-10.6% | $22.5M-3.4% | $23.3M-2.1% | $23.8M-8.4% | $26.0M-16.9% | $31.3M-35.5% | $48.5M |
| Current Assets | $4.4M-7.2% | $4.7M-28.2% | $6.6M-1.8% | $6.7M-2.2% | $6.9M-19.4% | $8.5M-25.7% | $11.5M-46.5% | $21.5M |
| Cash & Equivalents | $796K+9.3% | $728K-16.4% | $871K-45.3% | $1.6M-11.0% | $1.8M+23.8% | $1.4M-64.6% | $4.1M+282.3% | $1.1M |
| Inventory | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
| Accounts Receivable | $2.8M-11.0% | $3.1M-13.0% | $3.6M-7.6% | $3.9M-11.4% | $4.4M-11.7% | $5.0M-20.9% | $6.3M-67.8% | $19.5M |
| Goodwill | $6.5M0.0% | $6.5M0.0% | $6.5M0.0% | $6.5M0.0% | $6.5M0.0% | $6.5M0.0% | $6.5M0.0% | $6.5M |
| Total Liabilities | $29.0M+6.6% | $27.2M-7.0% | $29.2M-39.0% | $47.9M+1.6% | $47.1M+3.1% | $45.7M-1.2% | $46.3M-19.2% | $57.2M |
| Current Liabilities | $28.3M+7.0% | $26.4M+48.9% | $17.7M+29.8% | $13.7M+1.5% | $13.5M+1.0% | $13.3M-70.5% | $45.3M+177.3% | $16.3M |
| Long-Term Debt | $145K-0.7% | $146K-98.7% | $10.8M-67.7% | $33.5M+1.9% | $32.9M+4.0% | $31.6M+20968.7% | $150K-99.6% | $34.8M |
| Total Equity | -$9.7M-38.4% | -$7.0M-4.9% | -$6.7M+72.8% | -$24.6M-5.4% | -$23.3M-18.2% | -$19.7M-18.0% | -$16.7M-59.2% | -$10.5M |
| Retained Earnings | -$33.0M-18.9% | -$27.7M-72.6% | -$16.1M-20.0% | -$13.4M-20.2% | -$11.1M-26.8% | -$8.8M-33.1% | -$6.6M-68.9% | -$3.9M |
DRCT Cash Flow Statement
| Metric | Q1'26 | Q4'25 | Q3'25 | Q2'25 | Q1'25 | Q4'24 | Q3'24 | Q2'24 |
|---|---|---|---|---|---|---|---|---|
| Operating Cash Flow | -$1.1M+43.9% | -$1.9M-14.2% | -$1.6M+39.1% | -$2.7M+0.7% | -$2.7M-74.4% | -$1.6M-151.5% | $3.0M+168.4% | -$4.4M |
| Capital Expenditures | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
| Free Cash Flow | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
| Investing Cash Flow | $0+100.0% | -$49K | $0+100.0% | -$23K-53.3% | -$15K | $0+100.0% | -$7K+30.0% | -$10K |
| Financing Cash Flow | $1.1M-37.1% | $1.8M+94.0% | $916K-63.6% | $2.5M-17.9% | $3.1M+381.6% | -$1.1M-12200.0% | $9K-99.6% | $2.2M |
| Dividends Paid | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
| Share Buybacks | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
DRCT Financial Ratios
| Metric | Q1'26 | Q4'25 | Q3'25 | Q2'25 | Q1'25 | Q4'24 | Q3'24 | Q2'24 |
|---|---|---|---|---|---|---|---|---|
| Gross Margin | 33.9%+7.1pp | 26.8%-1.0pp | 27.7%-7.4pp | 35.1%+5.8pp | 29.3%-3.1pp | 32.5%-6.3pp | 38.7%+11.6pp | 27.1% |
| Operating Margin | -48.7%+4.8pp | -53.4%-4.4pp | -49.0%-25.1pp | -23.9%+24.2pp | -48.1%+3.7pp | -51.8%-11.5pp | -40.3%-30.9pp | -9.4% |
| Net Margin | -78.6%+60.1pp | -138.7%-105.1pp | -33.6%-11.4pp | -22.2%+6.7pp | -28.9%-4.9pp | -24.0%+5.6pp | -29.6%-26.9pp | -2.7% |
| Return on Equity | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
| Return on Assets | -27.3%+30.6pp | -57.9%-46.0pp | -11.9%-2.3pp | -9.6%+0.3pp | -9.9%-1.5pp | -8.4%+0.2pp | -8.6%-7.4pp | -1.2% |
| Current Ratio | 0.16-0.0 | 0.18-0.2 | 0.37-0.1 | 0.49-0.0 | 0.51-0.1 | 0.64+0.4 | 0.25-1.1 | 1.31 |
| Debt-to-Equity | -0.010.0 | -0.02+1.6 | -1.62-0.3 | -1.36+0.0 | -1.41+0.2 | -1.60-1.6 | -0.01+3.3 | -3.31 |
| FCF Margin | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
Note: Shareholder equity is negative (-$7.0M), which causes debt-to-equity and return on equity ratios to appear negative or not meaningful. This can occur from accumulated losses or large share buyback programs.
Note: The current ratio is below 1.0 (0.18), indicating current liabilities exceed current assets, which may suggest potential short-term liquidity concerns.
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Frequently Asked Questions
What is Direct Digital Holdings, Inc.'s annual revenue?
Direct Digital Holdings, Inc. (DRCT) reported $34.7M in total revenue for fiscal year 2025. This represents a -44.3% change compared to the previous fiscal year. Revenue measures the total income earned from the company's primary business operations before any expenses are deducted.
How fast is Direct Digital Holdings, Inc.'s revenue growing?
Direct Digital Holdings, Inc. (DRCT) revenue declined by 44.3% year-over-year, from $62.3M to $34.7M in fiscal year 2025.
Is Direct Digital Holdings, Inc. profitable?
No, Direct Digital Holdings, Inc. (DRCT) reported a net income of -$18.9M in fiscal year 2025, with a net profit margin of -54.6%.
What is Direct Digital Holdings, Inc.'s EBITDA?
Direct Digital Holdings, Inc. (DRCT) had EBITDA of -$14.5M in fiscal year 2025, measuring earnings before interest, taxes, depreciation, and amortization.
How much debt does Direct Digital Holdings, Inc. have?
As of fiscal year 2025, Direct Digital Holdings, Inc. (DRCT) had $728K in cash and equivalents against $146K in long-term debt.
What is Direct Digital Holdings, Inc.'s gross margin?
Direct Digital Holdings, Inc. (DRCT) had a gross margin of 30.0% in fiscal year 2025, indicating the percentage of revenue retained after direct costs of goods sold.
What is Direct Digital Holdings, Inc.'s operating margin?
Direct Digital Holdings, Inc. (DRCT) had an operating margin of -42.5% in fiscal year 2025, reflecting the profitability of core business operations before interest and taxes.
What is Direct Digital Holdings, Inc.'s net profit margin?
Direct Digital Holdings, Inc. (DRCT) had a net profit margin of -54.6% in fiscal year 2025, representing the share of revenue converted into profit after all expenses.
What is Direct Digital Holdings, Inc.'s operating cash flow?
Direct Digital Holdings, Inc. (DRCT) generated -$8.9M in operating cash flow during fiscal year 2025, representing cash generated from core business activities.
What are Direct Digital Holdings, Inc.'s total assets?
Direct Digital Holdings, Inc. (DRCT) had $20.2M in total assets as of fiscal year 2025, including both current and long-term assets.
What is Direct Digital Holdings, Inc.'s current ratio?
Direct Digital Holdings, Inc. (DRCT) had a current ratio of 0.18 as of fiscal year 2025, which is below 1.0, which may suggest potential liquidity concerns.
What is Direct Digital Holdings, Inc.'s debt-to-equity ratio?
Direct Digital Holdings, Inc. (DRCT) had a debt-to-equity ratio of -0.02 as of fiscal year 2025, measuring the company's financial leverage by comparing total debt to shareholder equity.
What is Direct Digital Holdings, Inc.'s return on assets (ROA)?
Direct Digital Holdings, Inc. (DRCT) had a return on assets of -94.0% for fiscal year 2025, measuring how efficiently the company uses its assets to generate profit.
What is Direct Digital Holdings, Inc.'s cash runway?
Based on fiscal year 2025 data, Direct Digital Holdings, Inc. (DRCT) had $728K in cash against an annual operating cash burn of $8.9M. This gives an estimated cash runway of approximately 1 months at the current burn rate. Cash runway measures how long a company can continue operating before running out of cash, assuming no additional funding.
Why is Direct Digital Holdings, Inc.'s debt-to-equity ratio negative or unusual?
Direct Digital Holdings, Inc. (DRCT) has negative shareholder equity of -$7.0M as of fiscal year 2025, which causes the debt-to-equity ratio to appear negative or not meaningful. This can occur when accumulated losses exceed invested capital, or after large share buyback programs. Other solvency metrics like the current ratio or interest coverage may be more informative.
What is Direct Digital Holdings, Inc.'s Piotroski F-Score?
Direct Digital Holdings, Inc. (DRCT) has a Piotroski F-Score of 3 out of 9, indicating weak financial health. The F-Score evaluates nine binary signals across profitability (positive ROA, positive cash flow, improving ROA, earnings quality), leverage (decreasing debt, improving liquidity, no share dilution), and operating efficiency (improving gross margin, improving asset turnover). Scores of 7 to 9 indicate strong and improving fundamentals. Learn more in our complete guide to financial health indicators.
Are Direct Digital Holdings, Inc.'s earnings high quality?
Direct Digital Holdings, Inc. (DRCT) has an earnings quality ratio of 0.47x, considered low quality (accrual-driven). This ratio compares operating cash flow to net income. A ratio above 1.0x means the company generates more cash than its reported earnings, indicating sustainable, cash-backed profits. Ratios below 1.0x suggest earnings rely on accounting accruals rather than actual cash generation. Learn more in our complete guide to financial health indicators.
Can Direct Digital Holdings, Inc. cover its interest payments?
Direct Digital Holdings, Inc. (DRCT) has an interest coverage ratio of -2.8x, meaning it can struggle to cover its interest obligations. This ratio divides operating income by interest expense. Ratios above 5x indicate strong debt-servicing ability, while ratios below 2x suggest the company may face difficulty meeting interest payments if earnings decline. Learn more in our complete guide to financial health indicators.
How financially healthy is Direct Digital Holdings, Inc.?
Direct Digital Holdings, Inc. (DRCT) scores 0 out of 100 on our Financial Profile, indicating weak overall financial health. This composite score evaluates six dimensions: profitability (operating margin), revenue growth, leverage (debt-to-equity), liquidity (current ratio), cash flow quality (free cash flow margin), and shareholder returns (return on equity). Each dimension is normalized against standard financial benchmarks. Learn more in our complete guide to financial health indicators.