PubMatic Announces Third Quarter 2025 Financial Results
No Headquarters/REDWOOD CITY, Calif.--( BUSINESS WIRE)--PubMatic, Inc. (Nasdaq: PUBM), an independent technology company delivering digital advertising’s supply chain of the future, today reported financial results for the third quarter ending September 30, 2025.
“We delivered revenue and adjusted EBITDA ahead of guidance and strong cash flow. CTV growth over 50% year-over-year excluding political advertising once again significantly outpaced the market rate of growth. These results demonstrate the power of our platform, the continued diversification of our business and our accelerated pace of innovation,” said Rajeev Goel, co-founder and CEO at PubMatic. “As an early adopter of AI, our leadership extends across the infrastructure, application and transaction layers of programmatic advertising, and is a defining competitive advantage for us. In collaboration with NVIDIA, our infrastructure is, we believe, years ahead of peers. We’ve also deepened our competitive moat and unlocked measurable, incremental revenue opportunities with our newly launched AI platform for buyers and publishers. As the industry rapidly redefines itself, we are actively shaping its future and fueling advertising performance, transparency and automation.”
Third Quarter 2025 Financial Highlights
The section titled “Non-GAAP Financial Measures” below describes our usage of non-GAAP financial measures. Reconciliations between historical GAAP and non-GAAP information are contained at the end of this press release following the accompanying financial data.
1 Net dollar-based retention is calculated by starting with the revenue from publishers in the trailing twelve months ended September 30, 2024 (Prior Period Revenue). We then calculate the revenue from these same publishers in the trailing twelve months ended September 30, 2025 (Current Period Revenue). Current Period Revenue includes any upsells and is net of contraction or attrition, but excludes revenue from new publishers. Our net dollar-based retention rate equals the Current Period Revenue divided by Prior Period Revenue. Net dollar-based retention rate is an important indicator of publisher satisfaction and usage of our platform, as well as potential revenue for future periods
Business Highlights
Omnichannel platform drives revenue in key secular growth areas
Cutting-Edge AI Innovation Drives Performance and Leading Competitive Advantage
New AI-Powered Platform Fuels Increased Usage, Incremental Revenue and Operational Efficiency
Advancing Leadership in CTV
Expanding Reach on the Buy Side
Scaling Emerging Revenue Streams
Owned and operated infrastructure drives operational efficiencies
“We exceeded expectations on both revenue and adjusted EBITDA. This outperformance was driven by CTV, online video and mobile app. We also managed expenses, leveraged AI and delivered healthy margins and strong free cash flow,” said Steve Pantelick, CFO at PubMatic. “We continue to execute a robust, multifaceted strategy, adding new revenue streams, expanding our SPO relationships and CTV leadership, and expanding our DSP mix. As revenue growth re-accelerates, we anticipate margin expansion in both gross and adjusted EBITDA, directly benefiting from our efficient and leveraged business model.”
2 Including political advertising, revenue from CTV grew over 10% year-over-year.
3 Including political advertising, revenue from omnichannel video, which includes CTV, grew 5% year-over-year.
Financial Outlook
Our outlook assumes that general market conditions do not significantly deteriorate as it relates to current macroeconomic and geopolitical conditions.
Accordingly, we estimate the following for the fourth quarter of 2025:
Although we provide guidance for adjusted EBITDA, we are not able to provide guidance for net income, the most directly comparable GAAP measure. Certain elements of the composition of GAAP net income, including stock-based compensation expenses, are not predictable, making it impractical for us to provide guidance on net income or to reconcile our adjusted EBITDA guidance to net income without unreasonable efforts. For the same reason, we are unable to address the probable significance of the unavailable information.
Conference Call and Webcast details
PubMatic will host a conference call to discuss its financial results on Monday, November 10, 2025 at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time). A live webcast of the call can be accessed from PubMatic’s Investor Relations website at https://investors.pubmatic.com. An archived version of the webcast will be available from the same website after the call.
Non-GAAP Financial Measures
In addition to our results determined in accordance with U.S. generally accepted accounting principles (GAAP), including, in particular operating income (loss), net cash provided by operating activities, and net income (loss), we believe that adjusted EBITDA, adjusted EBITDA margin, non-GAAP net income, non-GAAP net income per diluted share and free cash flow, each a non-GAAP measure, are useful in evaluating our operating performance. We define adjusted EBITDA as net income (loss) adjusted for stock-based compensation expense, depreciation and amortization, litigation related expenses, interest income, and provision for (benefit from) income taxes. Adjusted EBITDA margin represents adjusted EBITDA calculated as a percentage of revenue. We define non-GAAP net income as net income (loss) adjusted for stock-based compensation expense, litigation related expenses, and adjustments for income taxes. We define non-GAAP free cash flow as net cash provided by operating activities reduced by purchases of property and equipment and capitalized software development costs.
In addition to operating income (loss) and net income (loss), we use adjusted EBITDA, non-GAAP net income, and free cash flow as measures of operational efficiency. We believe that these non-GAAP financial measures are useful to investors for period to period comparisons of our business and in understanding and evaluating our operating results for the following reasons:
Our use of non-GAAP financial measures has limitations as an analytical tool, and you should not consider them in isolation or as a substitute for analysis of our financial results as reported under GAAP. Some of these limitations are as follows:
Because of these and other limitations, you should consider adjusted EBITDA, non-GAAP net income, and free cash flow along with other GAAP-based financial measures, including net income (loss) and cash flow from operating activities, and our GAAP financial results.
Forward Looking Statements
This press release contains “forward-looking statements” regarding our future business expectations, including our guidance relating to our revenue and adjusted EBITDA for the fourth quarter of 2025 and capex for the full year 2025, our expectations regarding our total addressable market, future market growth, and our ability to gain market share. These forward-looking statements are based on our current expectations and assumptions regarding our business, the economy and other future conditions and may differ materially from actual results due to a variety of factors including: our dependency on the overall demand for advertising and the channels we rely on; our existing customers not expanding their usage of our platform, or our failure to attract new publishers and buyers; our ability to maintain and expand access to spend from buyers and valuable ad impressions from publishers; the rejection of the use of digital advertising by consumers through opt-in, opt-out or ad-blocking technologies or other means; our failure to innovate and develop new solutions that are adopted by publishers; our ongoing litigation against Google LLC; geopolitical conflicts and related measures taken in response by the global community; the impacts of inflation, tariffs and recessionary fears as well as fiscal tightening, changes in the interest rate and currency exchange environments and continuing volatility in global capital markets; global macroeconomic uncertainty; limitations imposed on our collection, use or disclosure of data about advertisements; the lack of similar or better alternatives to the use of third-party cookies, mobile device IDs or other tracking technologies if such uses are restricted; any failure to scale our platform infrastructure to support anticipated growth and transaction volume; liabilities or fines due to publishers, buyers, and data providers not obtaining consents from consumers for us to process their personal data; any failure to comply with laws and regulations related to data privacy, data protection, information security, and consumer protection; and our ability to manage our growth. Moreover, we operate in a competitive and rapidly changing market, and new risks may emerge from time to time. For more information about risks and uncertainties associated with our business, please refer to the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” sections of our SEC filings, including but not limited to, our annual report on Form 10-K and quarterly reports on Form 10-Q, copies of which are available on our investor relations website at https://investors.pubmatic.com and on the SEC website at www.sec.gov. Additional information will also be set forth in our Quarterly Report on Form 10-Q for the quarter ended September 30, 2025. All information in this press release is as of November 10, 2025. We undertake no obligation to update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.
About PubMatic
PubMatic is an independent technology company maximizing customer value by delivering digital advertising’s supply chain of the future. PubMatic’s sell-side platform empowers the world’s leading digital content creators across the open internet to control access to their inventory and increase monetization by enabling marketers to drive return on investment and reach addressable audiences across ad formats and devices. Since 2006, PubMatic’s infrastructure-driven approach has allowed for the efficient processing and utilization of data in real time. By delivering scalable and flexible programmatic innovation, PubMatic improves outcomes for its customers while championing a vibrant and transparent digital advertising supply chain.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(unaudited)
September 30,
2025
December 31,
2024
ASSETS
Current assets
Cash and cash equivalents
$
136,548
$
100,452
Marketable securities
—
40,135
Accounts receivable, net
362,591
424,814
Prepaid expenses and other current assets
21,307
10,145
Total current assets
520,446
575,546
Property, equipment and software, net
51,396
58,522
Operating lease right-of-use assets
39,993
44,402
Acquisition-related intangible assets, net
3,099
4,284
Goodwill
29,577
29,577
Deferred tax assets
28,269
24,864
Other assets, non-current
3,408
2,324
TOTAL ASSETS
$
676,188
$
739,519
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable
$
356,469
$
386,602
Accrued liabilities
25,617
26,365
Operating lease liabilities, current
6,333
5,843
Total current liabilities
388,419
418,810
Operating lease liabilities, non-current
38,255
39,538
Other liabilities, non-current
4,454
3,908
TOTAL LIABILITIES
431,128
462,256
Stockholders' equity
Common stock
6
6
Treasury stock
(193,041
)
(146,796
)
Additional paid-in capital
309,789
275,304
Accumulated other comprehensive income (loss)
67
(636
)
Retained earnings
128,239
149,385
TOTAL STOCKHOLDERS’ EQUITY
245,060
277,263
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
$
676,188
$
739,519
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(unaudited)
Three Months Ended September 30,
Nine Months Ended September 30,
2025
2024
2025
2024
Revenue
$
67,960
$
71,786
$
202,880
$
205,754
Cost of revenue (1)
25,403
25,508
77,603
76,092
Gross profit
42,557
46,278
125,277
129,662
Operating expenses: (1)
Technology and development
9,616
8,813
27,504
25,432
Sales and marketing
25,732
23,696
77,731
71,606
General and administrative
15,628
15,134
45,825
43,499
Total operating expenses
50,976
47,643
151,060
140,537
Operating loss
(8,419
)
(1,365
)
(25,783
)
(10,875
)
Interest income
1,198
1,969
4,170
6,873
Other income (expense), net
(937
)
(930
)
(3,939
)
3,356
Loss before income taxes
(8,158
)
(326
)
(25,552
)
(646
)
Provision for (benefit from) income taxes
(1,706
)
586
(4,406
)
749
Net loss
$
(6,452
)
$
(912
)
$
(21,146
)
$
(1,395
)
Basic and diluted net loss per share of Class A and Class B stock
$
(0.14
)
$
(0.02
)
$
(0.45
)
$
(0.03
)
Weighted-average shares used to compute net loss per share attributable to common stockholders - Basic and diluted
45,933
49,056
47,146
49,623
(1) Stock-based compensation expense includes the following:
STOCK-BASED COMPENSATION EXPENSE
(In thousands)
(unaudited)
Three Months Ended September 30,
Nine Months Ended September 30,
2025
2024
2025
2024
Cost of revenue
$
474
$
486
$
1,422
$
1,417
Technology and development
1,471
1,603
4,684
4,688
Sales and marketing
3,423
3,450
10,351
10,160
General and administrative
4,143
3,918
12,553
12,002
Total stock-based compensation expense
$
9,511
$
9,457
$
29,010
$
28,267
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(In thousands)
(unaudited)
Nine Months Ended September 30,
2025
2024
CASH FLOW FROM OPERATING ACTIVITIES:
Net loss
$
(21,146
)
$
(1,395
)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization
33,996
33,931
Stock-based compensation
29,010
28,267
Deferred income taxes
(11,772
)
(10,831
)
Accretion of discount on marketable securities
(822
)
(3,552
)
Non-cash operating lease expense
5,528
5,098
Other
(864
)
(78
)
Changes in operating assets and liabilities:
Accounts receivable
62,223
(1,322
)
Prepaid expenses and other assets
(2,221
)
(1,554
)
Accounts payable
(29,981
)
8,841
Accrued liabilities
429
2,259
Operating lease liabilities
(1,912
)
(4,741
)
Other liabilities, non-current
432
454
Net cash provided by operating activities
62,900
55,377
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment
(7,455
)
(13,268
)
Capitalized software development costs
(16,094
)
(16,068
)
Purchases of marketable securities
(26,026
)
(117,977
)
Proceeds from sales of marketable securities
27,095
—
Proceeds from maturities of marketable securities
39,859
156,958
Net cash provided by investing activities
17,379
9,645
CASH FLOWS FROM FINANCING ACTIVITIES:
Payment of business combination indemnification claims holdback
—
(2,148
)
Proceeds from issuance of common stock for employee stock purchase plan
1,357
1,451
Proceeds from exercise of stock options
1,495
1,578
Principal payments on finance lease obligations
(105
)
(98
)
Payments to acquire treasury stock
(47,650
)
(65,400
)
Net cash used in financing activities
(44,903
)
(64,617
)
NET INCREASE IN CASH AND CASH EQUIVALENTS
35,376
405
Effect of foreign currency on cash
720
—
CASH AND CASH EQUIVALENTS - Beginning of period
100,452
78,509
CASH AND CASH EQUIVALENTS - End of period
$
136,548
$
78,914
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(In thousands, except per share amounts)
(unaudited)
Three Months Ended September 30,
Nine Months Ended September 30,
2025
2024
2025
2024
Reconciliation of net income (loss):
Net loss
$
(6,452
)
$
(912
)
$
(21,146
)
$
(1,395
)
Add back (deduct):
Stock-based compensation
9,511
9,457
29,010
28,267
Depreciation and amortization
10,459
11,384
33,996
33,931
Litigation related expenses (2)
538
—
538
—
Interest income
(1,198
)
(1,969
)
(4,170
)
(6,873
)
Provision for (benefit from) income taxes
(1,706
)
586
(4,406
)
749
Adjusted EBITDA (3)
$
11,152
$
18,546
$
33,822
$
54,679
Revenue
$
67,960
$
71,786
$
202,880
$
205,754
Adjusted EBITDA margin
16
%
26
%
17
%
27
%
Three Months Ended September 30,
Nine Months Ended September 30,
2025
2024
2025
2024
Reconciliation of net income (loss) per share:
Net loss
$
(6,452
)
$
(912
)
$
(21,146
)
$
(1,395
)
Add back (deduct):
Stock-based compensation
9,511
9,457
29,010
28,267
Litigation related expenses (2)
538
—
538
—
Adjustment for income taxes
(2,018
)
(1,978
)
(6,141
)
(5,863
)
Non-GAAP net income (3)
$
1,579
$
6,567
$
2,261
$
21,009
GAAP diluted EPS
$
(0.14
)
$
(0.02
)
$
(0.45
)
$
(0.03
)
Non-GAAP diluted EPS
$
0.03
$
0.12
$
0.04
$
0.38
GAAP weighted average shares outstanding—diluted
45,933
49,056
47,146
49,623
Non-GAAP weighted average shares outstanding—diluted
49,180
53,986
50,718
54,854
(2) Litigation related expenses represents external legal fees and other expenses, net of insurance recoveries, associated with pending litigation that arose outside of the ordinary course of business. These costs related to a discrete matter, and are not representative of our underlying operating performance. We do not adjust for legal expenses incurred in our ordinary course of business.
(3) Net loss, Adjusted EBITDA, and Non-GAAP net income for the nine months ended September 30, 2024 include other income of $4.0 million related to our efforts to build and test integrations with the Google Privacy Sandbox.
Reported GAAP diluted loss per share for the three and nine months ended September 30, 2025 and 2024 were calculated using basic share count. Non-GAAP diluted earnings per share for the three and nine months ended September 30, 2025 were calculated using diluted share count which includes approximately 3 million and 4 million shares, respectively, of dilutive securities related to employee stock awards. Non-GAAP diluted earnings per share for the three and nine months ended September 30, 2024 were calculated using diluted share count which includes approximately 5 million shares of dilutive securities related to employee stock awards.
SUPPLEMENTAL CASH FLOW INFORMATION
COMPUTATION OF FREE CASH FLOW, A NON-GAAP MEASURE
(In thousands)
(unaudited)
Three Months Ended September 30,
Nine Months Ended September 30,
2025
2024
2025
2024
Reconciliation of cash provided by operating activities:
Net cash provided by operating activities
$
32,374
$
19,139
$
62,900
$
55,377
Less: Purchases of property and equipment
(4,674
)
(11,731
)
(7,455
)
(13,268
)
Less: Capitalized software development costs
(4,914
)
(4,542
)
(16,094
)
(16,068
)
Free cash flow
$
22,786
$
2,866
$
39,351
$
26,041