Business & finance · also called outlook, forecast
Guidance (forecast)
Guidance is a public company's own forecast of its future results, such as next quarter's revenue or full-year adjusted EBITDA, usually given as a range alongside an earnings report.
Guidance is management telling investors what to expect. A company might say, "We expect Q4 revenue of at least US$750 million" or "full-year adjusted EBITDA of US$300–320 million". Analysts compare guidance with their own estimates (the "consensus"), and share prices often move sharply when guidance is above or below expectations.
Ad tech guidance is sensitive to seasonality (the fourth quarter is usually the biggest), advertiser budgets, macro conditions, platform and privacy changes, and large customer wins or losses. Companies may raise, lower or withdraw guidance during the year; withdrawals often happen in periods of high uncertainty.
In the US, forward-looking statements are protected by "safe harbour" provisions if accompanied by meaningful cautionary language, which is why earnings releases include long risk disclaimers. Guidance is not a promise: missing it is not illegal, but misleading investors is.
Think of it like this
Guidance is like a weather forecast issued by the company itself: useful, usually given as a range, and sometimes spectacularly wrong.
An example
A DSP guides Q4 revenue to "at least US$840M". Analysts expected US$870M, so the stock falls 10% after hours despite a strong Q3.
Related terms
Earnings report
An earnings report is the periodic announcement, usually quarterly, in which a public company discloses its revenue, profit and other key results, often with an investor call and updated guidance.
Form 8-K
Form 8-K is the "current report" US public companies file with the SEC to announce major events, such as acquisitions, executive changes or earnings releases, usually within four business days.
Adjusted EBITDA
Adjusted EBITDA is earnings before interest, taxes, depreciation and amortisation, further adjusted by the company to exclude items such as stock-based compensation and one-time costs; it is a non-GAAP measure.
Market capitalization
Market capitalization is the total stock-market value of a public company, calculated as its share price multiplied by the number of shares outstanding.
Net revenue retention
Net revenue retention (NRR) is the percentage of revenue a company keeps from an existing group of customers over a period, including expansions, downgrades and losses, but excluding new customers.