PubMatic(US:PUBM)2025-11-10 21:18Financial Performance - Revenue for Q3 2025 was $67.96 million, a decrease of 5.0% compared to $71.79 million in Q3 2024[93] - Operating loss for Q3 2025 was $8.42 million, compared to an operating loss of $1.37 million in Q3 2024[93] - Net loss for Q3 2025 was $6.45 million, compared to a net loss of $0.91 million in Q3 2024[93] - Adjusted EBITDA for Q3 2025 was $11.15 million, down 40.0% from $18.55 million in Q3 2024[93] - Gross profit for the three months ended September 30, 2025 was $42.56 million, down from $46.28 million in 2024, reflecting an 8% decrease[118] - The gross margin for the three months ended September 30, 2025 was 63%, a decrease from 64% in the same period of 2024[123] - Adjusted EBITDA for the three months ended September 30, 2025 was $11,152 thousand, compared to $18,546 thousand in 2024[137] Cash Flow and Investments - Net cash provided by operating activities for Q3 2025 was $32.37 million, an increase of 69.0% from $19.14 million in Q3 2024[93] - Net cash provided by operating activities for the nine months ended September 30, 2025 was $62,900 thousand, an increase from $55,377 thousand in 2024[144] - Net cash provided by investing activities for the nine months ended September 30, 2025 was $17,379 thousand, compared to $9,645 thousand in 2024[144] - Net cash used in financing activities for the nine months ended September 30, 2025 was $(44,903) thousand, a decrease from $(64,617) thousand in 2024[144] - As of September 30, 2025, the company had cash, cash equivalents, and marketable securities totaling $136.5 million[140] - As of September 30, 2025, the company had cash and cash equivalents totaling $136.5 million, primarily consisting of bank deposits, money market accounts, and time deposits[158] - The company repurchased 4,036,242 shares of Class A common stock for an aggregate purchase price of $46.0 million during the nine months ended September 30, 2025[141] Expenses - Technology and development expenses for the three months ended September 30, 2025 increased by 9% to $9.62 million, compared to $8.81 million in 2024[125] - Sales and marketing expenses for the three months ended September 30, 2025 rose by 9% to $25.73 million, driven by increased personnel costs[127] - General and administrative expenses for the three months ended September 30, 2025 increased by 3% to $15.63 million, compared to $15.13 million in 2024[129] - Interest income for the three months ended September 30, 2025 decreased by 39% to $1.20 million, down from $1.97 million in 2024[131] Market and Operational Insights - Net dollar-based retention rate was 98% for the trailing twelve months ended September 30, 2025, down from 112% for the same period in 2024[98] - Supply Path Optimization (SPO) accounted for over 55% of total activity for Q3 2025[99] - The platform processed approximately 980 billion ad impressions daily in September 2025[102] - The company launched new products, Activate and Convert, in 2023 to enhance buyer capabilities[103] - The digital advertising ecosystem is experiencing rapid changes, including increased demand for transparency and control from both buyers and publishers[90] - The company expects revenues to be negatively impacted in the near term by recent platform changes implemented by a large DSP buyer[120] Tax and Other Income - Other income (expense), net for the three months ended September 30, 2025 was $(937) thousand, reflecting a 1% increase compared to $(930) thousand in the same period of 2024[132] - For the nine months ended September 30, 2025, other income (expense), net was $(3,939) thousand, a decrease of 217% from $3,356 thousand in 2024, primarily due to foreign exchange losses[132] - The provision for (benefit from) income taxes for the three months ended September 30, 2025 was $(1,706) thousand, a decrease of 391% from $586 thousand in 2024[133] - For the nine months ended September 30, 2025, the provision for (benefit from) income taxes was $(4,406) thousand, a decrease of 688% from $749 thousand in 2024[134] Economic Factors - The company does not expect a 100 basis points change in interest rates to materially affect its operating results or financial condition[158] - A hypothetical 10% change in the U.S. Dollar to Indian Rupee exchange rate could result in a $1.7 million change in operating loss for the nine months ended September 30, 2025[159] - A hypothetical 10% change in the U.S. Dollar to British Pound exchange rate could also result in a $1.7 million change in operating loss for the nine months ended September 30, 2025[159] - The company does not believe inflation has had a material effect on its business or financial condition[160] - Significant inflationary pressures in regions like India could adversely affect the company's ability to offset higher costs through price increases[160]