Direct Digital Holdings, Inc. (NASDAQ:DRCT) Q4 2022 Earnings Call Transcript

Page 4 of 4

Mark Walker: Yes. Go ahead.

Susan Echard: Yes. Michael, so we did have duplicative cost because we want to make sure that we protect that transition and not have any interruptions whatsoever. That was probably about a 100K in the quarter that we spent with HPE to make sure that we had some redundancy built in and we’re going to continue some of that in Q1 as we finish up that transition.

Michael Kupinski: Got it. And then you talked a little bit about the competitive landscape and I was just wondering in terms of whether or not you’re seeing any pricing pressures just because of the environment or is it just simply the larger customers that you’re going after?

Mark Walker: Simply the larger customers that we’re going after. They have a little bit of price sensitivity as it relates due to the volume of impressions that they’re able to provide. So that’s part of the business strategy and other clients have €“ other of our competitors have had the same components as well. So it’s standard.

Michael Kupinski: Got it. That’s all I have. Thank you.

Susan Echard: Thank you.

Mark Walker: Yes.

Operator: Our next question comes from the line of Edward Reily with EF Hutton. Please proceed.

Edward Reily: Hey guys. Thanks for taking my question. Congrats on the growth on the buyer base within the sell-side segment during the quarter. Just wondering what you guys are doing to maybe incentivize these buyers to continue using your platform versus maybe going through some other sell-side platforms?

Mark Walker: Yes. Absolutely. Really it’s the relationships that we’re able to build on the buy-side of our business with the outreach. The strategy that we take is to build relationships not just with on the DSPs, but we go further upstreams with the agencies and the brands as well. Building those relationships and then providing them with €“ providing them access to long-tail publishers that are focused in on the multicultural ecosystem and giving them a one-stop shop, where they could buy general market as well as multicultural publishers from a trusted company like ours has proved to be beneficial. In addition to that, the level of technology and the reliability we’ve been able to provide the marketplace has also been a benefit for customers wanting to do business with us.

So once they’re engaged, they typically stay and want to continue to transact with us because the way that we’ve been able to run our business has proven that level of efficiency and they have seen the benefit of that performance in the long run.

Edward Reily: Okay. Got it. Thank you for that. All my other questions were asked. Thanks.

Operator: Thank you. There are no further questions at this time. This will conclude today’s conference. You may disconnect your lines at this time. Thank you for your participation.

Mark Walker: All right. Thank you.

Susan Echard: Thank you.

Follow Direct Digital Holdings Inc.

Page 4 of 4