PubMatic(PUBM)

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PubMatic (PUBM) FY Conference Transcript
2025-08-13 16:15
Summary of PubMatic Fireside Chat Company Overview - **Company**: PubMatic - **Industry**: Digital Advertising Technology - **Core Business**: A global platform connecting content creators, ad buyers, and data owners to facilitate digital advertising transactions [2][3] Key Points and Arguments Business Model and Offerings - PubMatic started as a sell-side platform (SSP) focused on publishers and has expanded to include various stakeholders in the advertising ecosystem [3] - Unique offerings include: - Leading SSP driving significant yield for publishers - Supply Path Optimization (SPO) to consolidate ad spend [4] - Fast-growing commerce media business with clients like PayPal and Instacart [4][5] - Operates on owned infrastructure, which enhances profitability and performance [5] Revenue Breakdown - Revenue sources: - CTV (Connected TV) business: 20% of revenues, growing over 50% year-over-year [6][10] - Mobile app business: 20% of revenues [6] - New revenue streams launched in the last two years: 8% of revenue [7] Market Conditions - The advertising market is relatively stable, with a shift towards performance, transparency, and control [9][10] - Anticipated growth in CTV, commerce media, and mobile app environments [10] - AI is changing workflows and reducing reliance on legacy systems [10] Competitive Landscape - PubMatic holds approximately 4% market share in the SSP community, with Google at 60% [13] - Google faces potential regulatory changes that could benefit PubMatic [13][18] - Clients are moving away from Google due to perceived biases in its ad tech stack [16][18] Diversification Strategy - Focus on diversifying demand sources away from legacy DSPs [25] - Mid-tier DSPs are growing at 20% year-over-year, with significant opportunities outside the top 250 advertisers [26] - AI is being leveraged to optimize inventory and improve targeting [28][30] Supply Path Optimization (SPO) - SPO accounts for 55% of PubMatic's business, up from 35% a few years ago [42] - Data integration and targeting capabilities are key to driving revenue through SPO [43][44] Activate Product - Activate allows buyers to purchase directly within the SSP, increasing return on ad spend [60] - Expected to grow to over 15% of revenue over time [63] Financial Outlook - Anticipated revenue growth to reaccelerate to mid-teens to 20% year-over-year once current DSP issues are resolved [35] - Focus on higher-margin offerings and leveraging AI for operational efficiencies [72][75] Capital Expenditures and Buybacks - CapEx is expected to decrease, with a target of $15 million this year, half of what was invested three years ago [77] - Buybacks will continue but will be balanced with investments in innovation [79][80] Other Important Insights - The company is actively integrating AI across its operations to enhance efficiency and reduce costs [72] - The importance of data privacy regulations is shifting targeting capabilities towards the sell side of the ecosystem [47][48] - The competitive advantage lies in the ability to provide better targeting and performance metrics compared to traditional DSPs [50][51]
PubMatic Q2: New Headwind Emerges As The Previous One Recedes
Seeking Alpha· 2025-08-13 12:15
Summary of Key Points Core Viewpoint - PubMatic's shares experienced a significant decline of over 30% at the market open following the release of its Q2 results, ultimately closing down 21% compared to the previous day's closing price [1]. Financial Results - The Q2 results led to a sharp drop in share price, indicating a negative market reaction to the company's performance [1]. Market Reaction - Despite the initial plunge, shares rallied off their lows but still ended the trading day with a substantial loss, reflecting investor concerns regarding the company's financial health [1].
Should You Buy the Dip on PubMatic Stock?
The Motley Fool· 2025-08-13 09:35
Core Viewpoint - PubMatic's stock experienced a significant decline due to disappointing guidance for the third quarter, despite a generally positive second-quarter performance [1][5]. Financial Performance - PubMatic reported a 6% increase in revenue for the second quarter, totaling $71.1 million, with a net dollar-based retention rate of 102% [1]. - The company generated $9.3 million in free cash flow in the second quarter, an increase from $6.9 million in the same period last year [4]. - Cash and marketable securities amounted to $118 million at the end of the second quarter, with no debt [9]. Growth Drivers - Connected TV (CTV) was a significant growth area, with revenue increasing over 50% year over year, and omnichannel video revenue grew by 34%, making up 41% of total revenue [2]. - The Activate solution for video ad inventory saw buying activity more than double from the first quarter, with PayPal as a notable customer [3]. Challenges and Outlook - The company's third-quarter revenue guidance is projected between $61 million and $66 million, reflecting a year-over-year decline of about 12% at the midpoint [5]. - A reduction in ad spending from a major demand-side platform (DSP) buyer is a primary reason for the poor outlook, with speculation pointing to The Trade Desk [6]. - PubMatic is working to diversify its DSP partner mix, with ad spending from performance marketers and mid-tier DSPs increasing by over 20% in the second quarter [7]. Investment Considerations - Despite the current challenges, the company’s strong balance sheet and cash position provide a buffer against short-term disruptions [9]. - The stock is trading near its 52-week low, with a market capitalization of approximately $400 million, and the company has the potential to scale up share repurchases [10]. - The overall assessment suggests that the current issues may be temporary, and the company’s ongoing diversification efforts could stabilize revenue growth in the future [8][11].
Why PubMatic Stock Fell 33.7% This Morning
The Motley Fool· 2025-08-12 17:58
Core Viewpoint - Despite strong Q2 results, shares of PubMatic experienced a significant decline due to disappointing forward guidance, leading to an all-time low in stock price [1][6]. Financial Performance - PubMatic reported a 6% year-over-year increase in Q2 sales, reaching $71.1 million, with omnichannel video revenue rising by 34%, driven by a 50% increase in connected TV video ads [2]. - The adjusted net income improved from a $0.10 loss to a $0.05 profit per diluted share, surpassing analyst expectations of a $0.16 loss on sales of approximately $67.8 million [3]. Guidance and Market Outlook - Management's guidance for the upcoming quarter indicates a potential 4% year-over-year revenue decline and weaker adjusted EBITDA, which contributed to the stock's drop [3]. - The CEO mentioned a shift in strategy and diversification of the customer base following the loss of business from a significant unnamed client [5]. - There is speculation that the company may be setting conservative guidance targets, as indicated by the CFO's comments on a "conservative approach" to future projections [6].
Celanese, Archer Aviation And Other Big Stocks Moving Lower In Tuesday's Pre-Market Session
Benzinga· 2025-08-12 11:21
Group 1 - U.S. stock futures are slightly lower, with Dow futures down approximately 0.1% [1] - Celanese Corporation reported second-quarter financial results and provided third-quarter adjusted EPS guidance below market estimates, expecting earnings of $1.10 to $1.40 per share compared to estimates of $1.73 per share [1] - Celanese shares fell 15.5% to $40.00 in pre-market trading following the announcement [1] Group 2 - BigBear.ai Holdings, Inc. experienced a decline of 30.8% to $4.91 in pre-market trading after reporting worse-than-expected second-quarter results and cutting FY25 sales guidance [4] - PubMatic, Inc. shares dropped 28.7% to $7.55 in pre-market trading after issuing Q2 results and Q3 sales guidance below estimates [4] - Fluence Energy, Inc. shares dipped 14.3% to $7.83 in pre-market trading after mixed third-quarter financial results [4] - Archer Aviation Inc. fell 9.9% to $8.60 in pre-market trading due to a wider-than-expected quarterly loss [4] - Microvast Holdings, Inc. shares decreased by 10.2% to $2.72 after reporting disappointing quarterly sales [4] - TAT Technologies Ltd. saw a decline of 7.6% to $34.25 following weak quarterly sales [4]
PubMatic, Inc. (PUBM) Surpasses Q2 Earnings and Revenue Estimates
ZACKS· 2025-08-12 00:01
PubMatic, Inc. (PUBM) came out with quarterly earnings of $0.05 per share, beating the Zacks Consensus Estimate of $0.02 per share. This compares to earnings of $0.04 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +150.00%. A quarter ago, it was expected that this company would post a loss of $0.05 per share when it actually produced a loss of $0.04, delivering a surprise of +20%. Over the last four quarters, the company has ...
PubMatic(PUBM) - 2025 Q2 - Earnings Call Transcript
2025-08-11 21:30
Financial Data and Key Metrics Changes - The company reported a revenue growth of 6% year over year, with underlying business revenue (excluding affected DSP and political advertising) growing 19% year over year [6][29] - Adjusted EBITDA margin was 20%, marking the 37th consecutive quarter of adjusted EBITDA profitability [6][34] - The company generated $14.9 million in net operating cash flows and $9.3 million in free cash flow during the second quarter [36] Business Line Data and Key Metrics Changes - CTV revenue grew over 50% year over year, representing approximately 20% of total revenue [29][15] - Emerging revenue streams more than doubled year over year, accounting for 8% of total revenue [29] - Display revenue was flat year over year, a significant improvement from a 10% decline in Q1 [30] Market Data and Key Metrics Changes - EMEA and APAC revenues grew 187%, while Americas revenue declined by 1% [32] - Ad spend from performance marketers and mid-tier DSPs grew over 20% year over year [12][32] - The top 10 ad verticals grew in the mid-single digits year over year, with health and fitness, technology, and travel each increasing over 20% [31] Company Strategy and Development Direction - The company is focusing on diversifying its DSP mix and accelerating investment on the buy side, particularly in CTV and emerging revenue streams [10][11] - The integration of AI across the tech stack is a priority to enhance campaign performance and operational efficiency [21][23] - The company anticipates significant market share expansion due to recent antitrust rulings affecting Google, estimating that a 1% market share shift could represent $50 to $75 million in net revenue [24][25] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a recent headwind from a top DSP partner that shifted clients to a new platform, impacting revenue in July but stabilizing in August [38][45] - The company remains confident in its strategy to diversify demand and revenue streams, despite the challenges faced [25][41] - The outlook for Q3 is conservative, with expected revenue in the range of $61 to $66 million, factoring in the impact from the DSP changes [40] Other Important Information - The company has a healthy balance sheet with $117.6 million in cash and marketable securities and zero debt [36] - The company has repurchased $178.2 million worth of Class A common shares since February 2023 [36] Q&A Session Summary Question: Can you provide details about the changes from the DSP? - Management explained that a top DSP shifted clients to a new platform that evaluates inventory differently, leading to a notable drop in spend in July, which has since stabilized in August [45][46] Question: How has the conversation with advertisers evolved with the rise of SPO? - Conversations have deepened around solving advertisers' challenges, particularly in transitioning away from cookies and focusing on performance-based solutions [53][54] Question: What is the company's view on the evolution of the industry regarding DSPs and SSPs? - The company believes the lines between DSPs and SSPs are blurring, with a shift towards end-to-end platforms driven by performance and transparency [58][60] Question: What is the current concentration of DSPs? - The top two DSPs represent about half of overall spending, with efforts ongoing to diversify the DSP mix [63]
PubMatic(PUBM) - 2025 Q2 - Earnings Call Presentation
2025-08-11 20:30
Financial Performance - Revenue reached $71.1 million, a 6% year-over-year increase[8] - Adjusted EBITDA was $14.2 million, representing a 20% margin[8] - The company experienced a GAAP net loss of $(5.2) million[8] - Cash flow from operations amounted to $14.9 million[8] Growth Drivers - CTV revenue grew by over 50% year-over-year[22, 34] - Emerging revenues increased by over 100% year-over-year[31, 34] - Omnichannel video revenue increased 34% year-over-year[34] - Performance and mid-tier DSPs experienced a growth rate of over 20% year-over-year in Q2 2025[14] Operational Efficiency - Ad impressions processed increased by 28% year-over-year, reaching 78 trillion in Q2 2025, compared to 61 trillion in Q2 2024[37] - The cost of revenue increased to $27 million in Q2 2025 from $25 million in Q2 2024[37] Future Outlook - Q3 2025 revenue is projected to be between $61 million and $66 million, representing a year-over-year growth between -15% and -8%[52] - Q3 2025 adjusted EBITDA is expected to be between $7 million and $10 million, with a margin of 11% to 15%[52]
PubMatic(PUBM) - 2025 Q2 - Quarterly Report
2025-08-11 20:17
PART I - FINANCIAL INFORMATION [Item 1. Condensed Consolidated Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) Unaudited Q2 2025 statements show 6% revenue growth, a widened net loss, decreased total assets, and lower operating cash flow [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 (unaudited) | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $90,476 | $100,452 | | Accounts receivable, net | $383,403 | $424,814 | | Total current assets | $512,962 | $575,546 | | TOTAL ASSETS | $675,220 | $739,519 | | **Liabilities & Equity** | | | | Accounts payable | $361,369 | $386,602 | | Total current liabilities | $388,743 | $418,810 | | TOTAL LIABILITIES | $431,936 | $462,256 | | Retained earnings | $134,691 | $149,385 | | TOTAL STOCKHOLDERS' EQUITY | $243,284 | $277,263 | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Condensed Consolidated Statements of Operations (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Revenue | $71,095 | $67,267 | $134,920 | $133,968 | | Gross profit | $44,483 | $42,107 | $82,720 | $83,384 | | Operating loss | $(5,461) | $(3,985) | $(17,364) | $(9,510) | | Net income (loss) | $(5,208) | $1,971 | $(14,694) | $(483) | | Diluted EPS | $(0.11) | $0.04 | $(0.31) | $(0.01) | [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Six Months Ended June 30, Cash Flow Summary (in thousands) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $30,526 | $36,238 | | Net cash used in investing activities | $(128) | $(5,870) | | Net cash used in financing activities | $(41,188) | $(35,356) | | **Net decrease in cash and cash equivalents** | **$(10,790)** | **$(4,988)** | - Cash used in financing activities for the six months ended June 30, 2025, was primarily driven by **$43.6 million** in treasury stock purchases, partially offset by proceeds from stock option exercises and the ESPP[23](index=23&type=chunk)[150](index=150&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) - As of June 30, 2025, two buyers accounted for **38%** and **12%** of the Company's accounts receivable, indicating significant customer concentration[31](index=31&type=chunk) - The Company has a **$110.0 million** revolving credit facility which remained undrawn as of June 30, 2025[47](index=47&type=chunk)[51](index=51&type=chunk) - The share repurchase program was extended to December 31, 2026, with an additional **$100 million** authorization in May 2025. As of June 30, 2025, **$96.8 million** remains available for repurchases[63](index=63&type=chunk) Revenue by Geographic Area (in thousands) | Region | H1 2025 | H1 2024 | | :--- | :--- | :--- | | United States | $77,487 | $80,391 | | EMEA | $42,877 | $40,478 | | APAC | $11,640 | $10,801 | | Rest of the world | $2,916 | $2,298 | | **Total** | **$134,920** | **$133,968** | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management reports Q2 2025 revenue up 6%, but wider losses and declining Adjusted EBITDA due to increased expenses, focusing on SPO and customer retention [Business Highlights and Strategy](index=27&type=section&id=Business%20Highlights%20and%20Strategy) Key Financial Highlights (in thousands) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Revenue | $71,095 | $67,267 | $134,920 | $133,968 | | Operating loss | $(5,461) | $(3,985) | $(17,364) | $(9,510) | | Net income (loss) | $(5,208) | $1,971 | $(14,694) | $(483) | | Adjusted EBITDA | $14,213 | $21,078 | $22,670 | $36,134 | - The net dollar-based retention rate was **102%** for the trailing twelve months ended June 30, 2025, a decrease from 108% for the same period ended June 30, 2024[99](index=99&type=chunk) - Supply Path Optimization (SPO) continues to be a major growth driver, representing over **55%** of total activity for the three months ended June 30, 2025[100](index=100&type=chunk) [Results of Operations](index=31&type=section&id=Results%20of%20Operations) - Revenue for Q2 2025 increased by **6%** YoY to **$71.1 million**, driven by impressions processed, new revenue streams, and customer growth. The number of publishers served increased to approximately **1,960** from **1,800** YoY[118](index=118&type=chunk)[119](index=119&type=chunk) - Cost of revenue per million impressions processed decreased by approximately **17%** in Q2 2025 compared to Q2 2024, despite an absolute increase in data center and depreciation costs[121](index=121&type=chunk) - Operating expenses for Q2 2025 increased across all categories (Technology & Development, Sales & Marketing, General & Administrative) primarily due to higher personnel costs from increased headcount[126](index=126&type=chunk)[128](index=128&type=chunk)[130](index=130&type=chunk) - Other income (expense), net, decreased by **$6.0 million** in Q2 2025 compared to Q2 2024. The prior year period included **$4.0 million** in income from the Google Privacy Sandbox initiative, while the current period reflected a loss from foreign exchange rate fluctuations[133](index=133&type=chunk) [Liquidity and Capital Resources](index=38&type=section&id=Liquidity%20and%20Capital%20Resources) - As of June 30, 2025, the company had **$117.6 million** in cash, cash equivalents, and marketable securities[139](index=139&type=chunk) - During the six months ended June 30, 2025, the company repurchased **3,853,342 shares** of Class A common stock for an aggregate price of **$43.6 million**[140](index=140&type=chunk) - Net cash provided by operating activities decreased to **$30.5 million** in H1 2025 from **$36.2 million** in H1 2024, influenced by a net loss and changes in working capital, particularly decreases in accounts receivable and accounts payable[143](index=143&type=chunk)[145](index=145&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=41&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risks are foreign currency fluctuations, particularly INR, with minimal exposure to interest rate and inflation risks - The company's primary market risks are related to foreign currency fluctuations, particularly with the Indian Rupee (INR), British Pound (GBP), and Euro (EUR)[158](index=158&type=chunk) - A hypothetical **10%** change in the U.S. Dollar to Indian Rupee exchange rate could result in a **$1.2 million** change in operating loss for the six months ended June 30, 2025[158](index=158&type=chunk) - Interest rate risk is considered minimal as the investment portfolio has a relatively short maturity. The company had no amounts outstanding under its variable-rate credit facility as of June 30, 2025[157](index=157&type=chunk) [Item 4. Controls and Procedures](index=41&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting - Management concluded that as of June 30, 2025, the company's disclosure controls and procedures were effective at a reasonable assurance level[160](index=160&type=chunk) - No changes occurred during the quarter ended June 30, 2025, that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[161](index=161&type=chunk) PART II - OTHER INFORMATION [Item 1. Legal Proceedings](index=43&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any legal proceedings expected to have a material adverse effect on its business or financial condition - As of the report date, the company is not involved in any legal proceedings that management believes would have a material adverse effect on the business[165](index=165&type=chunk) [Item 1A. Risk Factors](index=43&type=section&id=Item%201A.%20Risk%20Factors) Key risk factors include high dependency on advertising demand, potential stock price volatility from share repurchases, and evolving global data privacy laws - The company's revenue is highly dependent on overall advertising demand, which can be adversely affected by macroeconomic factors like economic volatility, recession fears, and inflation[167](index=167&type=chunk) - The share repurchase program, extended to **$275.0 million** through December 2026, is not guaranteed to be completed and could increase stock price volatility or diminish cash reserves[170](index=170&type=chunk) - The company faces significant risks from a complex and evolving global regulatory framework for data privacy, including the CCPA in California, GDPR in Europe, and new state-level laws like Washington's My Health My Data Act, which could increase compliance costs and legal exposure[171](index=171&type=chunk)[177](index=177&type=chunk)[182](index=182&type=chunk)[188](index=188&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=49&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q2 2025, the company repurchased 3,514,342 shares of Class A common stock under its publicly announced repurchase program at varying prices Issuer Purchases of Equity Securities (Q2 2025) | Period | Total Shares Purchased | Average Price Paid Per Share | | :--- | :--- | :--- | | April 2025 | 299,300 | $10.00 | | May 2025 | 2,481,542 | $11.35 | | June 2025 | 733,500 | $12.06 | | **Total** | **3,514,342** | | [Item 5. Other Information](index=50&type=section&id=Item%205.%20Other%20Information) In Q2 2025, several executive officers adopted Rule 10b5-1 trading plans for future sales of company securities - During Q2 2025, **four executive officers** adopted Rule 10b5-1 trading plans to sell shares of common stock, primarily related to RSU vesting and ESPP shares[195](index=195&type=chunk)
PubMatic(PUBM) - 2025 Q2 - Quarterly Results
2025-08-11 20:10
PubMatic Q2 2025 Earnings Release [Second Quarter 2025 Financial Highlights](index=1&type=section&id=Second%20Quarter%202025%20Financial%20Highlights) PubMatic's Q2 2025 revenue and adjusted EBITDA surpassed guidance, with revenue growing 6% to $71.1 million, despite a shift to GAAP net loss and a decline in adjusted EBITDA, supported by a strong cash position Q2 2025 Key Financial Metrics | Metric | Q2 2025 | Q2 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | $71.1M | $67.3M | +6% | | GAAP Net Income (Loss) | $(5.2)M | $2.0M | N/A | | GAAP Diluted EPS | $(0.11) | $0.04 | N/A | | Adjusted EBITDA | $14.2M | $21.1M | -33% | | Adjusted EBITDA Margin | 20% | 31% | -11 pts | | Non-GAAP Net Income | $2.5M | $9.7M | -74% | | Non-GAAP Diluted EPS | $0.05 | $0.17 | -71% | - Net dollar-based retention was **102%** for the trailing twelve months ending June 30, 2025, compared to **108%** in the prior year period, indicating slightly lower growth from existing publishers[5](index=5&type=chunk) - The company repurchased **3.5 million shares** in Q2 2025, and since the program's inception, PubMatic has used **$178.2 million** to repurchase **12.2 million shares**, representing **24%** of fully diluted shares[1](index=1&type=chunk)[7](index=7&type=chunk) - As of June 30, 2025, the company held **$117.6 million** in total cash, cash equivalents, and marketable securities with no debt[7](index=7&type=chunk) [Business Highlights](index=3&type=section&id=Business%20Highlights) PubMatic achieved strong growth in omnichannel video, with CTV revenue up over 50%, increased SPO activity to over 55%, diversified its DSP mix, and launched new AI-powered platform capabilities - Significant growth in video and CTV: CTV revenue grew **over 50%** year-over-year, and omnichannel video revenue (including CTV) grew **34%** year-over-year, representing **41%** of total revenue[1](index=1&type=chunk)[11](index=11&type=chunk) - Supply Path Optimization (SPO) represented **over 55%** of total platform activity, up from **51%** a year ago, driven by products like Activate and CTV Marketplaces[1](index=1&type=chunk)[11](index=11&type=chunk) - Customer adoption and diversification highlights: Buying activity on Activate **more than doubled** sequentially, and ad spend from performance marketers and mid-tier DSPs grew **over 20%** year-over-year, diversifying the DSP mix[11](index=11&type=chunk) - Launched new AI-powered capabilities, including an enhanced PubMatic Assistant for analytics, predictive diagnostics for yield anomalies, and a dynamic floor yield module to optimize pricing[9](index=9&type=chunk)[11](index=11&type=chunk) - Infrastructure optimization led to processing nearly **78 trillion impressions** in Q2 2025, a **28%** YoY increase, while the cost of revenue per million impressions decreased by **20%** on a trailing twelve-month basis[11](index=11&type=chunk) [Financial Outlook](index=4&type=section&id=Financial%20Outlook) PubMatic forecasts Q3 2025 revenue between $61 million and $66 million, with adjusted EBITDA of $7 million to $10 million, reflecting a 13% margin at midpoint and an impact from reduced ad spend by a top DSP partner Q3 2025 Financial Outlook | Metric | Guidance Range | | :--- | :--- | | Revenue | $61 million - $66 million | | Adjusted EBITDA | $7 million - $10 million | | Adjusted EBITDA Margin (at midpoint) | ~13% | - The outlook incorporates an expected reduction in ad spend from one of the company's top DSP partners[12](index=12&type=chunk)[16](index=16&type=chunk) - Guidance for GAAP net income was not provided, as reconciling it from adjusted EBITDA is impractical due to the unpredictability of items like stock-based compensation[13](index=13&type=chunk) [Consolidated Financial Statements](index=7&type=section&id=Consolidated%20Financial%20Statements) This section presents PubMatic's unaudited condensed consolidated financial statements as of June 30, 2025, encompassing Balance Sheets, Statements of Operations, and Cash Flows [Condensed Consolidated Balance Sheets](index=7&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) As of June 30, 2025, PubMatic reported total assets of $675.2 million, a decrease from year-end 2024, with total liabilities at $431.9 million and stockholders' equity at $243.3 million Balance Sheet Summary (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $90,476 | $100,452 | | Total current assets | $512,962 | $575,546 | | **TOTAL ASSETS** | **$675,220** | **$739,519** | | Accounts payable | $361,369 | $386,602 | | Total current liabilities | $388,743 | $418,810 | | **TOTAL LIABILITIES** | **$431,936** | **$462,256** | | **TOTAL STOCKHOLDERS' EQUITY** | **$243,284** | **$277,263** | [Condensed Consolidated Statements of Operations](index=8&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) For Q2 2025, PubMatic reported $71.1 million in revenue, a 6% increase, but higher operating expenses led to an operating loss of $(5.5) million and a net loss of $(5.2) million, reversing Q2 2024's net income Statement of Operations Summary (in thousands) | Account | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Revenue | $71,095 | $67,267 | | Gross profit | $44,483 | $42,107 | | Total operating expenses | $49,944 | $46,092 | | Operating loss | $(5,461) | $(3,985) | | **Net income (loss)** | **$(5,208)** | **$1,971** | [Condensed Consolidated Statement of Cash Flows](index=9&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENT%20OF%20CASH%20FLOWS) For the six months ended June 30, 2025, net cash from operating activities was $30.5 million, with $41.2 million used in financing, largely for share repurchases, ending with $90.5 million in cash and cash equivalents Cash Flow Summary (in thousands) | Account | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $30,526 | $36,238 | | Net cash used in investing activities | $(128) | $(5,870) | | Net cash used in financing activities | $(41,188) | $(35,356) | | **NET DECREASE IN CASH** | **$(10,790)** | **$(4,988)** | | **CASH - End of period** | **$90,476** | **$73,521** | [Reconciliation of GAAP to Non-GAAP Financial Measures](index=10&type=section&id=RECONCILIATION%20OF%20GAAP%20TO%20NON-GAAP%20FINANCIAL%20MEASURES) This section details adjustments from GAAP to non-GAAP financial measures, including Adjusted EBITDA, Non-GAAP Net Income, and Free Cash Flow, primarily by removing non-cash expenses [Reconciliation of Net income (loss) to Adjusted EBITDA](index=10&type=section&id=Reconciliation%20of%20Net%20income%20(loss)%20to%20Adjusted%20EBITDA) PubMatic's Q2 2025 GAAP net loss of $(5.2) million reconciled to an Adjusted EBITDA of $14.2 million, down from $21.1 million in Q2 2024, with the margin decreasing to 20% from 31% Adjusted EBITDA Reconciliation (in thousands) | Line Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net income (loss) | $(5,208) | $1,971 | | Stock-based compensation | $9,801 | $9,699 | | Depreciation and amortization | $11,861 | $11,336 | | Interest income | $(1,379) | $(2,340) | | Provision for (benefit from) income taxes | $(862) | $412 | | **Adjusted EBITDA** | **$14,213** | **$21,078** | [Reconciliation of Net income (loss) per share](index=10&type=section&id=Reconciliation%20of%20Net%20income%20(loss)%20per%20share) Q2 2025 GAAP net loss of $(5.2) million adjusted to a Non-GAAP net income of $2.5 million, or $0.05 per diluted share, a notable decrease from $9.7 million, or $0.17 per diluted share, in Q2 2024 Non-GAAP Net Income Reconciliation (in thousands) | Line Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net income (loss) | $(5,208) | $1,971 | | Stock-based compensation | $9,801 | $9,699 | | Adjustment for income taxes | $(2,068) | $(1,999) | | **Non-GAAP net income** | **$2,525** | **$9,671** | [Computation of Free Cash Flow](index=11&type=section&id=COMPUTATION%20OF%20FREE%20CASH%20FLOW) For Q2 2025, PubMatic generated $9.3 million in free cash flow, derived from $14.9 million in operating cash flow, after accounting for capital expenditures and capitalized software development costs Free Cash Flow Computation (in thousands) | Line Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $14,905 | $11,944 | | Less: Purchases of property and equipment | $(1,340) | $(736) | | Less: Capitalized software development costs | $(4,300) | $(4,295) | | **Free cash flow** | **$9,265** | **$6,913** |