Two firms are emerging as the winners in the fierce online advertising market. While Meta Platforms (META) and Alphabet (GOOG) dominate, investors should consider the niche firms.
Applovin (APP) posted revenue of $1.06 billion, rising by 48.2% Y/Y in the first quarter. In Q2, the firm issued total revenue guidance of $1.06 billion to $1.08 billion. It expects a solid adjusted EBITDA margin of 52% - 53% next.
Though shares are at fresh highs, the company has tailwinds from adding more advertising in the gaming sector. Additionally, the software model applies self-learning (artificial intelligence). As Applovin’s AXON 2 will turn one year old, expect growth to accelerate from apps and websites toward the non-gaming app space.
Second Pick
The Trade Desk (TTD) has an advertising model for the connected television space. The company posted Q1 non-GAAP EPS of $0.26 on May 8, 2024. Revenue increased by 28.3% Y/Y to $491.25 million. In the second quarter, revenue is at least $575 million.
Trade Desk built its business around UID2. UID2 is a pseudonymous identifier for protecting a user’s email or phone number. CTV will expand as companies streaming service firms such as Disney’s (DIS) and Disney+ add more content.
Apple (AAPL) has yet to offer an AVOD offering. If it does, that only boosts the prospects of The Trade Desk.
