PubMatic Q4 Earnings Call Highlights

Key Points

• PubMatic outperformed guidance in Q4 with strong profitability — adjusted EBITDA was $27.8 million (a 35% margin) and GAAP net income was $6.7 million, while operating expenses remained flat as the company scaled revenue-driving investments.
• Revenue mix shifted toward higher-engagement channels, with nearly 50% of revenue from CTV, mobile app, and emerging streams (CTV grew >50% YoY) and emerging revenues up >75% in Q4, alongside a major push into agentic AI (250+ agentic deals and Agentic OS) that management expects to be a material industry tailwind.
• Cash generation and capital returns are strong — $81 million net operating cash flow and $46 million free cash flow in 2025, $145.5 million cash and no debt, and $181.1 million in share buybacks to date — while management guides modest Q1 results but expects a return to double-digit revenue growth and margin expansion in H2 2026.

PubMatic NASDAQ: PUBM executives highlighted what they called a turning point in the company’s performance and strategy during the fourth quarter and full-year 2025 earnings call, pointing to results that exceeded internal expectations and a growing emphasis on AI-driven “agentic” advertising.

Fourth-quarter results exceeded guidance as growth broadened

Co-founder and CEO Rajeev Goel said the company delivered an “exceptionally strong” fourth quarter with revenue and adjusted EBITDA ahead of guidance, supported by “healthy margins and strong cash flow.” CFO Steve Pantelick described Q4 as “a pivotal turning point,” emphasizing operating leverage as growth in several secular areas flowed through to profitability.

Pantelick said that after adjusting for political revenues and revenues derived from a legacy DSP referenced by the company earlier in 2025, the remainder of the business—83% of Q4 revenue—grew 18% year-over-year. He attributed the performance to strength in CTV, mobile app, emerging revenue streams, and “solid performance in display.”

Adjusted EBITDA in Q4 was $27.8 million, representing a 35% margin, which Pantelick said included a foreign exchange impact of approximately $0.5 million due to a weakening U.S. dollar. GAAP net income was $6.7 million, or $0.14 per diluted share. Pantelick also noted Q4 operating expenses were flat year-over-year, while PubMatic increased investment in revenue-driving initiatives, including a nearly 20% year-over-year expansion in its buyer-focused sales team.

CTV, mobile, and “emerging revenues” drove mix shift

Management repeatedly pointed to mix improvement toward what it described as higher-engagement environments. Pantelick said PubMatic ended 2025 with nearly 50% of revenue coming from CTV, mobile app, and emerging revenues. He added that emerging revenue streams grew more than 75% year-over-year in Q4 and represented roughly 12% of total revenue, compared with less than 1% three years ago.

Goel said CTV grew over 50% year-over-year for the full year, excluding political advertising, while “Activate activity” grew more than 3x. He said emerging revenues—including Activate, Commerce Media, and new AI solutions—nearly doubled versus 2024 and were approaching 10% of total revenue.

On CTV scale, Goel said PubMatic added a new marquee global streamer and now works with 28 of the top 30 global streamers, naming partners including Roku, Samsung TV Plus, DirecTV, Fox Sports, Tubi, and VIZIO. Pantelick said the company monetizes inventory from 28 of the top 30 global streamers and more than 450 CTV publishers, with the CTV business split approximately 60% Americas and 40% rest of world. He also said PubMatic processed 337 trillion impressions in 2025, up 28% year-over-year, while unit cost declined 20% on a trailing 12-month basis.

In mobile app, Pantelick said Q4 revenue grew more than 25% year-over-year, and he cited a four-year CAGR of 15%. Goel also pointed to a recent integration announcement: PubMatic’s OpenWrap SDK is integrated with Google AdMob and Google Ad Manager for mobile app.

Agentic AI positioned as a new tailwind and industry disruptor

A central theme of the call was PubMatic’s push into AI and autonomous campaign execution. Goel described “agentic advertising” as a new, incremental tailwind and said advertising is entering a phase where AI-driven autonomous systems operate in real time. He argued PubMatic’s proprietary data, infrastructure, and buyer/publisher integrations form a real-time execution layer that is difficult to replicate.

Goel cited several milestones:

• Co-founding the Ad Contextual Protocol in October alongside partners including Yahoo, LG Ad Solutions, and Raptive to set standards for agent-to-agent interaction.
• A December partnership with Butler/Till and Geloso Beverage Group to run what he described as the industry’s first fully autonomous end-to-end agentic campaign, which he said delivered more than 5x cost efficiencies and prompted a follow-on campaign.
• A CES unveiling of “Agentic OS” with launch partners including WPP Media and Foxtel Media.
• An agentic CTV advertising campaign in Europe with Abovo Maxlead, integrating with what Goel described as the largest independent media agency in the Netherlands.

Goel said PubMatic has now run more than 250 agentic deals across its platform, and that many represent new and incremental advertisers. He also said nearly 100 brands, agencies, and streamers have applied to join the company’s Agentic AI Accelerator Program, calling it the fastest early-stage adoption of any product PubMatic has launched.

In Q&A, Goel said he expects agentic execution to account for 25% of all digital advertising by 2028 and 50% by 2030. He also said agentic capabilities are likely to streamline the industry’s value chain and increase efficiency, potentially including “fee efficiency” over time, while PubMatic aims to participate through products like Activate and Agentic OS.

Diversifying DSP exposure and expanding mid-market demand

Management emphasized efforts to reduce reliance on large legacy DSPs by broadening the buyer mix. Goel said PubMatic integrated with 50 new DSP partners in 2025 and called mid-market advertisers represented by those DSPs the fastest-growing segment as performance-oriented demand accelerates. Pantelick said ad spend from mid-market DSP partners grew 30% year-over-year in Q4, accelerating from 25% growth in Q3.

Pantelick also provided regional trends, saying APAC and EMEA grew over 25% and 15%, respectively, offset by an 18% decline in the Americas that he attributed primarily to reduced political advertising and lower spend from a large DSP buyer.

Cash generation, buybacks, and 2026 outlook

Pantelick said PubMatic generated $81 million in net operating cash flow in 2025, up 10% year-over-year, and free cash flow of $46 million, up 32%. He said cash flow benefited in part from lower cash taxes following new federal tax legislation. PubMatic ended Q4 with $145.5 million in cash and no debt.

On capital returns, Pantelick said the company repurchased 12.4 million shares for $181.1 million from February 2023 through the end of Q4, with $93.9 million remaining under authorization through the end of 2026.

For Q1, Pantelick guided revenue to $58 million to $60 million, noting January revenue was in line with expectations and ad spending was “healthy.” He said the company expects Q1 adjusted EBITDA between negative $0.5 million and positive $1 million, citing foreign exchange headwinds and a fixed-cost model that typically scales over the year. Management reiterated expectations to return to double-digit revenue growth in the second half of 2026 with margin expansion, supported by revenue mix, AI-driven efficiencies, and disciplined investment.

About PubMatic NASDAQ: PUBM

PubMatic is a cloud-based digital advertising technology company that provides a supply-side platform (SSP) enabling publishers to automate and optimize the sale of their ad inventory across display, mobile, video and connected TV channels. Its core offerings include real-time bidding infrastructure, header bidding solutions under the OpenWrap brand and data analytics tools that deliver actionable insights on audience engagement and monetization performance. By facilitating seamless auctions and providing transparent reporting, PubMatic helps publishers maximize yield while improving buyer experiences.

Founded in 2006 by Rajeev Goel and a team of ad-tech veterans, PubMatic grew from an early entrant in programmatic selling to a publicly traded company, listing on the Nasdaq symbol: PUBM in December 2020.

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