PubMatic(US:PUBM)2023-02-27 16:00Financial Performance - For the year ended December 31, 2022, the company's revenue was $256.4 million, an increase from $226.9 million in 2021, representing a growth of approximately 12%[369]. - The company's net income for 2022 was $28.7 million, down from $56.6 million in 2021, indicating a decline of about 49%[378]. - The gross profit for 2022 was $174.9 million, slightly up from $168.6 million in 2021, indicating a growth of approximately 4%[378]. - The diluted net income per share decreased to $0.50 in 2022 from $1.00 in 2021, a decline of 50%[378]. - Total current assets increased to $503.5 million as of December 31, 2022, compared to $460.7 million in 2021, reflecting a growth of approximately 9%[376]. - The total liabilities increased to $330.0 million in 2022 from $293.0 million in 2021, reflecting a growth of approximately 13%[376]. - The net income for the year ended December 31, 2021, was $56.604 million, up from $26.613 million in 2020, representing a year-over-year increase of 112%[384]. - The company reported a net income of $28.705 million for the year ended December 31, 2022, showing a consistent upward trend in profitability[385]. - The company recognized a total provision for income taxes of $8,762,000 for the year ended December 31, 2022, with an effective tax rate of 23.43%[494]. Cash and Investments - As of December 31, 2022, the company had cash and cash equivalents of $92.4 million and marketable securities of $82.0 million[356]. - Cash and cash equivalents at the end of the year increased to $92.382 million from $82.505 million in 2021, representing a growth of 10.7%[388]. - The company incurred $137.793 million in purchases of marketable securities, significantly higher than $90.562 million in 2021, reflecting a 52% increase[388]. - The remaining contractual maturity of all marketable securities was within one year as of December 31, 2022, indicating a focus on short-term investments[447]. - Total financial assets as of December 31, 2022, amounted to $135,066,000, a decrease from $154,322,000 in 2021, representing a decline of approximately 12.5%[444]. Operating Expenses - Operating expenses for 2022 totaled $134.3 million, up from $109.8 million in 2021, marking an increase of approximately 22%[378]. - Total depreciation and amortization expenses rose to $34.249 million in 2022, up from $23.073 million in 2021, indicating a 48.5% increase[388]. - Stock-based compensation for the year ended December 31, 2022, amounted to $22.121 million, indicating a significant investment in employee incentives[385]. - Total stock-based compensation expense for the year ended December 31, 2022, was $20,646,000, an increase of 46% from $14,107,000 in 2021[491]. Acquisitions and Growth - The company completed the acquisition of ConsultMates, Inc (dba "Martin") and must successfully integrate this business to achieve anticipated strategic and financial goals[25]. - The company acquired ConsultMates, Inc. for a purchase price of $30.8 million, with $7.9 million allocated to developed technology intangible assets[371]. - Goodwill increased to $29.577 million as of December 31, 2022, primarily due to the acquisition of ConsultMates[468]. - Total acquisition-related intangible assets amounted to $8.299 million, with developed technology valued at $7.444 million and customer relationships at $855,000[469]. - The company recorded acquisition-related costs of $0.9 million in general and administrative expenses for the year ended December 31, 2022[467]. Market and Regulatory Environment - The company reported that its revenue and results of operations are highly dependent on the overall demand for advertising[25]. - The company is subject to evolving laws and regulations related to data privacy and consumer protection, which could impact operations[25]. - The company has not entered into any hedging arrangements with respect to foreign currency risk, which may affect operating income if foreign sales and expenses increase[356]. - A hypothetical 10% change in the U.S. Dollar to Indian Rupee exchange rate could result in a change of $1.6 million in operating income for the year ended December 31, 2022[356]. Stock and Equity - The company issued 2,655,000 shares of common stock upon initial public offering, netting $45.006 million after underwriting discounts and commissions[384]. - The total number of common stock shares outstanding as of December 31, 2022, was 52,705,187, reflecting the company's growth in equity financing[385]. - The company has $14.1 million of unrecognized stock-based compensation related to unvested stock options, expected to be recognized over 2.15 years[479]. - The company has reserved 529,888 shares of its common stock for issuance under the Employee Stock Purchase Plan (ESPP) as of December 31, 2022[485]. Future Commitments and Expectations - Future minimum commitments for purchase obligations total $41.080 million, with the largest commitments due in 2023 ($19.698 million) and 2024 ($15.798 million)[472]. - The Company expects to adopt ASU 2021-08 in the first quarter of fiscal 2023, which may not have a material impact on its consolidated financial statements[440]. - The Company expects to generate more state research credit carryforwards in the future than can be utilized against projected taxable income, indicating a strategic focus on R&D[497].