Looking back on digital media & content platforms stocks’ Q3 earnings, we examine this quarter’s best and worst performers, including WEBTOON (NASDAQ:WBTN) and its peers.
AI-driven content creation, personalized media experiences, and digital advertising are evolving, which could benefit companies investing in these themes. For example, companies with a portfolio of licensed visual content or platforms facilitating direct monetization models could see increased demand for years. On the other hand, headwinds include growing regulatory scrutiny on AI-generated content, with many publishers balking at anything that gets no human oversight. Additional areas to navigate include the phasing out of third-party cookies, which could make traditional ways of tracking the online behavior of consumers (a secret sauce in digital marketing) much less effective.
The 6 digital media & content platforms stocks we track reported a slower Q3. As a group, revenues missed analysts’ consensus estimates by 1.8% while next quarter’s revenue guidance was 1.3% below.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 10.8% since the latest earnings results.
WEBTOON (NASDAQ:WBTN)
Pioneering a vertical-scrolling format optimized for mobile devices, WEBTOON Entertainment (NASDAQ:WBTN) operates a global platform where creators publish serialized web-comics and web-novels that users can read in bite-sized episodes.
WEBTOON reported revenues of $378 million, up 8.7% year on year. This print fell short of analysts’ expectations by 1.1%. Overall, it was a slower quarter for the company with revenue guidance for next quarter missing analysts’ expectations significantly and a slight miss of analysts’ revenue estimates.
Junkoo Kim, Founder and CEO, said, “We are pleased to deliver another quarter that showcased the progress we have made driving product improvements on our platform and providing a greater diversity of content. We achieved Adjusted EBITDA above the midpoint of our guidance and total revenue was up 9.1% on a constant currency basis, driven by constant currency growth in Paid Content and IP Adaptations."
Unsurprisingly, the stock is down 17.1% since reporting and currently trades at $13.95.
Is now the time to buy WEBTOON? Access our full analysis of the earnings results here, it’s free for active Edge members.
Best Q3: Getty Images (NYSE:GETY)
With a vast library of over 562 million visual assets documenting everything from breaking news to iconic historical moments, Getty Images (NYSE:GETY) is a global visual content marketplace that licenses photos, videos, illustrations, and music to businesses, media outlets, and creative professionals.
Getty Images reported revenues of $240 million, flat year on year, in line with analysts’ expectations. The business had a very strong quarter with a beat of analysts’ EPS estimates and full-year revenue guidance meeting analysts’ expectations.
Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 14.2% since reporting. It currently trades at $1.48.
Is now the time to buy Getty Images? Access our full analysis of the earnings results here, it’s free for active Edge members.
Slowest Q3: Rumble (NASDAQ:RUM)
Founded in 2013 as a champion for content creator rights and free expression, Rumble (NASDAQ:RUM) is a video sharing platform that positions itself as a free speech alternative to mainstream platforms, offering creators more favorable revenue-sharing opportunities.
Rumble reported revenues of $24.76 million, down 1.2% year on year, falling short of analysts’ expectations by 7.8%. It was a disappointing quarter as it posted a significant miss of analysts’ revenue estimates and EPS in line with analysts’ estimates.
Rumble delivered the weakest performance against analyst estimates in the group. Interestingly, the stock is up 14.9% since the results and currently trades at $6.77.
Read our full analysis of Rumble’s results here.
Ziff Davis (NASDAQ:ZD)
Originally a pioneering technology publisher founded in 1927 that became famous for PC Magazine, Ziff Davis (NASDAQ:ZD) operates a portfolio of digital media brands and subscription services across technology, shopping, gaming, healthcare, and cybersecurity markets.
Ziff Davis reported revenues of $363.7 million, up 2.9% year on year. This print lagged analysts' expectations by 0.5%. Taking a step back, it was a mixed quarter as it also produced a solid beat of analysts’ full-year EPS guidance estimates but a miss of analysts’ EPS estimates.
Ziff Davis scored the highest full-year guidance raise among its peers. The stock is up 1.2% since reporting and currently trades at $33.03.
Read our full, actionable report on Ziff Davis here, it’s free for active Edge members.
Stride (NYSE:LRN)
Formerly known as K12, Stride (NYSE:LRN) is an education technology company providing education solutions through digital platforms.
Stride reported revenues of $620.9 million, up 12.7% year on year. This number beat analysts’ expectations by 0.7%. Taking a step back, it was a slower quarter as it recorded full-year revenue guidance missing analysts’ expectations significantly and revenue guidance for next quarter missing analysts’ expectations significantly.
Stride pulled off the biggest analyst estimates beat and fastest revenue growth, but had the weakest full-year guidance update among its peers. The stock is down 59% since reporting and currently trades at $62.95.
Read our full, actionable report on Stride here, it’s free for active Edge members.
Market Update
Thanks to the Fed’s rate hikes in 2022 and 2023, inflation has been on a steady path downward, easing back toward that 2% sweet spot. Fortunately (miraculously to some), all this tightening didn’t send the economy tumbling into a recession, so here we are, cautiously celebrating a soft landing. The cherry on top? Recent rate cuts (half a point in September 2024, a quarter in November) have propped up markets, especially after Trump’s November win lit a fire under major indices and sent them to all-time highs. However, there’s still plenty to ponder — tariffs, corporate tax cuts, and what 2025 might hold for the economy.
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