PubMatic (NasdaqGM:PUBM) Q4 2025 Earnings call February 26, 2026 04:30 PM ET Company ParticipantsElle Niebuhr - Equity Research AssociateMatt Swanson - Director, Equity ResearchRajeev Goel - Co-Founder and CEOStacy Clements - Director of Investor RelationsSteve Pantelick - CFOConference Call ParticipantsBarton Crockett - Managing Director and Senior Research AnalystJames Heaney - Equity Research AnalystMatt Condon - AnalystRob Culbreth - AnalystShweta Khajuria - Managing Director and Senior Research Analyst ...

PubMatic (NasdaqGM:PUBM) Q4 2025 Earnings call February 26, 2026 04:30 PM ET Company ParticipantsElle Niebuhr - Equity Research AssociateMatthew Condon - Director of Equity ResearchMatthew Swanson - Director, Equity ResearchRajeev Goel - Co-Founder and CEOStacy Clements - Director of Investor RelationsSteve Pantelick - CFOConference Call ParticipantsBarton Crockett - Managing Director and Senior Research AnalystJames Heaney - Equity Research AnalystRobert Culbreth - AnalystShweta Khajuria - Managing Directo ...

PubMatic (NasdaqGM:PUBM) Q4 2025 Earnings call February 26, 2026 04:30 PM ET Speaker7Hello everyone, welcome to PubMatic's fourth quarter and full year 2025 earnings call. My name is Reese, and I will be your Zoom operator today. Thank you for your attendance today. As a reminder, this webinar is being recorded. I will now turn the call over to Stacy Clements.Speaker10Good afternoon, everyone, and welcome to PubMatic's earnings call for the fourth quarter and full year 2025. This is Stacy Clements, and I'll ...

Q4 and FY 2025 Earnings Presentation This presentation contains statistical data, estimates and forecasts that are based on independent industry publications or other publicly available information, as well as other information based on our internal sources. This information involves many assumptions and limitations, and you are cautioned not to give undue weight to these estimates. We have not independently verified the accuracy or completeness of the data contained in these industry publications and other ...

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from________to________ Commission File Number: 001-39748 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2025 or Title of Each Class Trading Symbol Name of Each Exchange on Which Registered Class A common stock, $0.0001 par va ...

Financial Performance - FY 2025 revenue was $282.9 million, a decrease from $291.3 million in FY 2024[6] - Adjusted EBITDA for FY 2025 was $61.6 million, representing a 22% margin, down from $92.3 million and 32% margin in FY 2024[6] - Fourth quarter revenue was $80.0 million, compared to $85.5 million in Q4 2024[12] - GAAP net income for Q4 2025 was $6.7 million, down from $13.9 million in Q4 2024[12] - Gross profit for the year ended December 31, 2025, was $179,841,000, down from $190,229,000 in 2024, reflecting a decline of 5.5%[34] - Net loss for the year ended December 31, 2025, was $(14,462,000), compared to a net income of $12,504,000 in 2024[34] - Operating income for Q4 2025 was $8,524,000, down from $14,802,000 in Q4 2024, representing a decline of 42.2%[34] - Revenue for Q4 2025 was $80,046, a decrease from $85,502 in Q4 2024, with total revenue for 2025 at $282,926 compared to $291,256 in 2024[39] - Adjusted EBITDA for Q4 2025 was $27,818, down from $37,646 in Q4 2024, with a full year adjusted EBITDA of $61,640 for 2025 compared to $92,325 in 2024[39] - Non-GAAP net income for Q4 2025 was $14,440, compared to $21,443 in Q4 2024, with full year non-GAAP net income of $16,701 for 2025 versus $42,452 in 2024[39] Cash Flow and Assets - Free cash flow in FY 2025 was $46.2 million, an increase of 32% over FY 2024[6] - Total cash, cash equivalents, and marketable securities at the end of FY 2025 were $145.5 million, a 4% increase from FY 2024[6] - Cash and cash equivalents increased to $145,518,000 in 2025 from $100,452,000 in 2024, an increase of 44.8%[32] - Net cash provided by operating activities for Q4 2025 was $18,159, slightly up from $18,048 in Q4 2024, with total operating cash flow for 2025 at $81,059 compared to $73,425 in 2024[41] - Free cash flow for Q4 2025 was $6,852, down from $8,856 in Q4 2024, with total free cash flow for 2025 at $46,203 compared to $34,897 in 2024[41] Shareholder Actions - The company repurchased 4.1 million shares in 2025, representing 8.1% of fully diluted shares[1] - Total stock-based compensation for 2025 was $38,378, compared to $37,676 in 2024, indicating a slight increase in compensation expenses[39] Future Guidance - For Q1 2026, revenue is expected to be between $58 million and $60 million, with adjusted EBITDA guidance of $(0.5) million to $1.0 million[23] - The company expects to provide guidance for revenue and adjusted EBITDA for Q1 2026, indicating a focus on future growth[28] Market Performance - CTV revenue grew over 50% year-over-year in FY 2025, excluding political ad spend[17] - Net dollar-based retention rate for FY 2025 was 96%, indicating strong publisher satisfaction[6] Innovation and Strategy - The company continues to innovate in programmatic advertising, leveraging AI-driven optimization and privacy-focused solutions[29]

Industry Overview - The global digital advertising market is projected to grow at a CAGR of 9.4% from 2026 to 2035, indicating its attractiveness as a long-term growth market in the technology sector [1]. Company Profiles The Trade Desk (TTD) - TTD operates a leading demand-side platform (DSP) focused on data-driven advertising, facing significant competition from major players like Meta, Apple, Google, and Amazon [2][5]. - TTD's total operating costs surged 17% year over year to $457 million, driven by investments in enhancing platform capabilities [6]. - The company expects revenues of at least $840 million for Q4 2025, with a projected year-over-year revenue growth rate of 18.5% [9]. - TTD's AI-powered Kokai platform is used by 85% of its clients, strengthening its competitive position [8][11]. PubMatic (PUBM) - PUBM is a sell-side platform that helps publishers monetize their inventory, with a focus on connected TV (CTV) and retail media growth [2][10]. - PUBM reported over 50% year-over-year growth in CTV revenues in Q3, capitalizing on the shift of approximately $155 billion in linear television ad spend to digital formats [12]. - The company anticipates fourth-quarter revenues between $73 million and $77 million, with adjusted EBITDA projected between $19 million and $21 million [16]. - PUBM's revenues from emerging revenue streams grew over 80% year over year, contributing 10% of total revenues in Q3 [14]. Competitive Landscape - Both TTD and PUBM are experiencing growth in CTV and retail media but face rising competition and macroeconomic risks [11]. - TTD's focus on geographic expansion and AI integration presents both opportunities and challenges, particularly with regulatory changes [7][8]. - PUBM's reliance on major DSP clients poses risks, as evidenced by a recent revision in bidding approach affecting its top line [17]. Share Performance & Valuation - Over the past month, TTD and PUBM's shares have declined by 25.8% and 14.7%, respectively [20]. - TTD's shares are trading at a forward price/sales ratio of 3.55X, while PUBM's is at 1.09X, indicating a higher valuation for TTD [21]. Analyst Estimates - Analysts have kept estimates unchanged for both TTD and PUBM for the current fiscal year, indicating stability in expectations [22][24]. - TTD currently holds a Zacks Rank of 4 (Sell), while PUBM has a Zacks Rank of 3 (Hold), suggesting PUBM may be a better pick at the moment [25].

Core Insights - The discussion emphasizes that even in saturated markets, opportunities exist if companies set ambitious goals and focus on understanding user needs rather than merely adopting new technologies like AI [1][2][16] Group 1: Market Saturation and Opportunities - The concept of market saturation is redefined, distinguishing between functional saturation and experiential saturation, with the latter presenting opportunities for emotional connection and user experience [3][4] - Companies are encouraged to shift focus from functionality to emotional value, particularly in the pet technology sector, where user experience can differentiate offerings [4][5] - In the gaming industry, despite facing competition, companies can find growth by setting high long-term goals and recognizing the potential for significant user base expansion [6][7] Group 2: Emotional Value and Brand Connection - Emotional value remains crucial in advertising, with successful brands leveraging emotional narratives to connect with consumers, especially in family-oriented contexts [5][10] - The need for brands to build long-term relationships with consumers is highlighted, contrasting the immediate results focus prevalent in some markets [10][11] - Companies must balance technical innovation with user experience, ensuring that products resonate emotionally with users [8][9] Group 3: AI Integration and Future Trends - AI is seen as a tool to enhance efficiency in product development and advertising, with companies exploring its potential to simulate user behavior and optimize processes [12][13] - The shift towards AI-native applications is noted, with a focus on using AI to solve specific user problems rather than adopting it for its own sake [15] - Key future trends include the transition from search engines to push engines and the rise of generative engines, indicating a shift in how users interact with technology [15][16]

Core Insights - The Trade Desk, Inc. has launched OpenAds, a new auction environment aimed at providing publishers and sellers with a transparent and high-integrity alternative for programmatic advertising, supported by major publishing partners [1][9] Group 1: OpenAds Initiative - OpenAds is designed to enhance transparency, visibility, and signal in programmatic advertising, addressing advertiser concerns by delivering a cleaner auction framework [2] - The initiative reflects a shift towards cleaner auction mechanics, enabling advertisers to better understand their purchases and audience reach [3] - Key elements of OpenAds will be open-sourced, allowing for industry review and participation from other buyers and DSPs [4] Group 2: Complementary Tools - OpenAds complements Trade Desk's existing initiatives like OpenPath and PubDesk, which aim to improve efficiency and trust between buyers and sellers [5] - These tools are focused on aligning incentives around quality rather than volume, enhancing the overall media supply chain dynamics [5] Group 3: Future Development - The company anticipates that OpenAds will continue to develop actively and expand through 2026, with plans for additional publisher integrations [6] - Management believes that a healthier auction environment will improve outcomes for both advertisers and publishers, reinforcing the competitiveness of the open Internet [6] Group 4: Competitive Landscape - Amazon's advertising business is rapidly expanding, leveraging consumer data and partnerships to enhance its advertising reach, including collaborations with platforms like Netflix and Spotify [7] - PubMatic has launched AgenticOS, an AI-powered system for programmatic advertising, and is focusing on diversifying its DSP mix to reduce reliance on legacy buyers [8][10]

Core Insights - PubMatic and Butler/Till have launched a fully autonomous advertising campaign for Clubtails, utilizing agentic capabilities to enhance digital advertising efficiency [1][2][3] Company Overview - PubMatic is an independent technology company focused on maximizing customer value in digital advertising, providing a sell-side platform that empowers content creators to control inventory and increase monetization [9] - Butler/Till is a 100% employee-owned marketing agency that emphasizes purpose-driven partnerships and has expertise in media planning, analytics, and integrated media solutions [7][8] - Geloso Beverage Group, headquartered in Rochester, NY, is a leading producer of flavored malt beverages, with Clubtails being one of its popular brands [6] Campaign Details - The campaign leverages PubMatic's agentic application and operates within Butler/Till's Gen AI environment, utilizing the Ad Context Protocol (AdCP) for standardized communication [3] - The workflow includes natural language processing through Claude, enabling the generation of media strategies and continuous optimization of campaign performance [3][4] - The campaign aims to deliver geo-targeted, premium CTV inventory, ensuring high-quality supply and contextually aligned creative [4] Technological Innovations - The agentic workflow has significantly improved operational efficiencies in the discovery, planning, and activation phases, allowing for rapid media plan development [5] - PubMatic's infrastructure, powered by NVIDIA-accelerated computing, supports real-time processing and high-throughput networking essential for agentic execution at scale [5] - The campaign is expected to reveal full results in Q1 2026, indicating a long-term evaluation of its impact [5]