PART I - FINANCIAL INFORMATION Item 1. Condensed Consolidated Financial Statements (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 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 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 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 ESPP23150 Notes to Condensed Consolidated Financial Statements - As of June 30, 2025, two buyers accounted for 38% and 12% of the Company's accounts receivable, indicating significant customer concentration31 - The Company has a $110.0 million revolving credit facility which remained undrawn as of June 30, 20254751 - 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 repurchases63 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 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 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, 202499 - Supply Path Optimization (SPO) continues to be a major growth driver, representing over 55% of total activity for the three months ended June 30, 2025100 Results of Operations - 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 YoY118119 - 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 costs121 - Operating expenses for Q2 2025 increased across all categories (Technology & Development, Sales & Marketing, General & Administrative) primarily due to higher personnel costs from increased headcount126128130 - 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 fluctuations133 Liquidity and Capital Resources - As of June 30, 2025, the company had $117.6 million in cash, cash equivalents, and marketable securities139 - 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 million140 - 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 payable143145 Item 3. Quantitative and Qualitative Disclosures About Market Risk 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 - 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, 2025158 - 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, 2025157 Item 4. Controls and Procedures 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 level160 - 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 reporting161 PART II - OTHER INFORMATION Item 1. Legal Proceedings 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 business165 Item 1A. Risk Factors 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 inflation167 - 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 reserves170 - 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 exposure171177182188 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 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 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 shares195
PubMatic(PUBM) - 2025 Q2 - Quarterly Report