PubMatic Announces Fourth Quarter and Fiscal Year Ended 2025 Financial Results
NO-HEADQUARTERS/REDWOOD CITY, Calif.--( BUSINESS WIRE)--PubMatic, Inc. (Nasdaq: PUBM), the leading AI-powered ad tech company delivering digital advertising performance, today reported financial results for the fourth quarter and fiscal year ended December 31, 2025.
“We delivered an exceptional fourth quarter, highlighted by strong growth across CTV, Activate, and our emerging revenue streams, and accelerating momentum of our AI solutions,” said Rajeev Goel, co-founder and CEO at PubMatic. “Looking ahead, agentic advertising is an incremental tailwind and a defining advantage for PubMatic. It improves advertiser performance, expands our addressable market, and increases the flow of advertising budgets to the open internet. In just a few short months, customer adoption on AgenticOS has been swift with over 250 deals transacted, many of which are new advertising partners to our platform. We remain focused on driving growth in our underlying business, executing on our key priorities and leading the industry as it shifts to agentic AI.”
Fiscal Year 2025 Financial Highlights
Fourth 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.
“Our fourth-quarter results represented an important structural inflection point for PubMatic, as we meaningfully exceeded expectations on both revenue and adjusted EBITDA,” said Steve Pantelick, CFO at PubMatic. “Excluding political revenues and the legacy DSP referenced mid 2025, the underlying 83% of our business grew 18% year over year. For the quarter overall, we delivered 35% adjusted EBITDA margins and strong free cash flow. This performance reflects the scaling of our secular growth engines in CTV, mobile app, and emerging revenues, combined with disciplined cost management and AI-enabled automation that continue to drive operating leverage. Looking ahead, we expect to return to double-digit revenue growth in the second half of 2026, with corresponding margin expansion supported by revenue scale and AI-powered efficiencies.”
2025 Business Highlights
AI Infrastructure Drives Increased Performance and Competitive Advantage
AI Platform Powers Industry-First Agentic AI Campaign and Customer Adoption
AI-Powered Solutions Fuel Increased Usage, Incremental Revenue and Operational Efficiency
Omnichannel platform drives revenue in key secular growth areas
Scaled Emerging Revenue Streams
Expanded Reach on the Buy Side
New Partnerships Extend Opportunities
2025 operating priorities drove profitable growth
1 Net dollar-based retention is calculated by starting with the revenue from publishers in the trailing twelve months ended December 31, 2024 (“Prior Period Revenue”). We then calculate the revenue from these same publishers in the trailing twelve months ended December 31, 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.
2 Omnichannel revenue includes CTV, video and mobile.
3 Emerging revenue includes Activate, Commerce Media, Connect and AI Solutions.
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 first quarter of 2026, we expect the following:
Although we provide guidance for adjusted EBITDA, we are not able to provide guidance for net income (loss), the most directly comparable GAAP measure. Certain elements of the composition of GAAP net income (loss), 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 Thursday, February 26, 2026 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 earnings per 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 and non-GAAP net income 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 and non-GAAP net income along with other GAAP-based financial performance measures, including net income 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 first quarter of 2026 and capital expenditures for the full year 2026, our expectations regarding our adjusted EBITDA, free cash flow, capital expenditures, future hiring, future market growth, our long-term revenue growth, target revenue 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; the war between Ukraine and Russia and the resumption of conflict between Israel and Palestine, and the related measures taken in response by the global community; the impacts of inflation and tariffs as well as fiscal tightening; changes currency exchange environments and continuing volatility in global capital markets; volatile interest rates; public health crises, including the resulting global economic 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 From 10-Q, copies of 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 Annual Report on Form 10-K for the year ended December 31, 2025. All information in this press release is as of February 26, 2026. 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 the leading AI-powered ad tech company delivering digital advertising performance. Through an intelligent, unified platform that connects buyers, publishers, data partners, and commerce media networks, PubMatic delivers superior performance with great transparency, control, and efficiency. Since 2006, PubMatic has pioneered major advances in programmatic advertising, from enabling the first OpenRTB transactions to embedding AI-driven optimization and privacy-focused innovation across its platform. With omnichannel scale, proven reliability, and a track record of continuous innovation, PubMatic is building a more intelligent, profitable, and sustainable open internet. Built to Connect. Powered to Perform.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(unaudited)
December 31,
2025
December 31,
2024
ASSETS
Current assets
Cash and cash equivalents
$
145,518
$
100,452
Marketable securities
—
40,135
Accounts receivable, net
358,240
424,814
Prepaid expenses and other current assets
18,889
10,145
Total current assets
522,647
575,546
Property, equipment and software, net
52,657
58,522
Operating lease right-of-use assets
38,149
44,402
Acquisition-related intangible assets, net
2,704
4,284
Goodwill
29,577
29,577
Deferred tax assets
30,986
24,864
Other assets, non-current
3,475
2,324
TOTAL ASSETS
$
680,195
$
739,519
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable
$
343,619
$
386,602
Accrued liabilities
25,278
26,365
Operating lease liabilities, current
6,953
5,843
Total current liabilities
375,850
418,810
Operating lease liabilities, non-current
36,910
39,538
Other liabilities, non-current
4,846
3,908
TOTAL LIABILITIES
417,606
462,256
Stockholders' Equity
Common stock
7
6
Treasury stock
(193,471
)
(146,796
)
Additional paid-in capital
321,062
275,304
Accumulated other comprehensive income (loss)
68
(636
)
Retained earnings
134,923
149,385
TOTAL STOCKHOLDERS’ EQUITY
262,589
277,263
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
$
680,195
$
739,519
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(unaudited)
Three Months Ended December 31,
Year Ended December 31,
2025
2024
2025
2024
Revenue
$
80,046
$
85,502
$
282,926
$
291,256
Cost of revenue (1)
25,482
24,935
103,085
101,027
Gross profit
54,564
60,567
179,841
190,229
Operating expenses: (1)
Technology and development
6,316
7,831
33,820
33,263
Sales and marketing
25,209
23,763
102,940
95,369
General and administrative
14,515
14,171
60,340
57,670
Total operating expenses
46,040
45,765
197,100
186,302
Operating income (loss)
8,524
14,802
(17,259
)
3,927
Total other income, net
1,074
3,618
1,305
13,847
Income (loss) before income taxes
9,598
18,420
(15,954
)
17,774
Provision for (benefit from) income taxes
2,914
4,521
(1,492
)
5,270
Net income (loss)
$
6,684
$
13,899
$
(14,462
)
$
12,504
Net income (loss) per share attributable to common stockholders:
Basic
$
0.14
$
0.29
$
(0.31
)
$
0.25
Diluted
$
0.14
$
0.26
$
(0.31
)
$
0.23
Weighted-average shares used to compute net income (loss) per share attributable to common stockholders:
Basic
46,598
47,993
47,008
49,213
Diluted
49,316
52,623
47,008
54,294
(1)Stock-based compensation expense includes the following:
STOCK BASED COMPENSATION EXPENSE
(In thousands)
(unaudited)
Three Months Ended December 31,
Year Ended December 31,
2025
2024
2025
2024
Cost of revenue
$
432
$
438
$
1,854
$
1,855
Technology and development
1,404
1,625
6,088
6,313
Sales and marketing
3,352
3,247
13,703
13,407
General and administrative
4,180
4,099
16,733
16,101
Total stock-based compensation
$
9,368
$
9,409
$
38,378
$
37,676
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(In thousands)
(unaudited)
December 31,
2025
2024
CASH FLOW FROM OPERATING ACTIVITIES:
Net income (loss)
$
(14,462
)
$
12,504
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization
43,769
45,352
Stock-based compensation
38,378
37,676
Deferred income taxes
(14,489
)
(10,984
)
Accretion of discount on marketable securities
(822
)
(4,117
)
Non-cash lease expense
7,351
6,801
Other
(1,047
)
(25
)
Changes in operating assets and liabilities:
Accounts receivable
66,574
(49,345
)
Prepaid expenses and other current assets
(16,220
)
(5,826
)
Accounts payable
(42,397
)
38,096
Accrued liabilities
16,179
9,627
Operating lease liabilities
(2,616
)
(6,531
)
Other liabilities, non-current
861
197
Net cash provided by operating activities
81,059
73,425
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of and deposits on property and equipment
(14,345
)
(17,592
)
Capitalized software development costs
(20,511
)
(20,936
)
Purchases of marketable securities
(26,026
)
(142,016
)
Proceeds from sales of marketable securities
27,095
—
Proceeds from maturities of marketable securities
39,859
202,858
Net cash provided by investing activities
6,072
22,314
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
2,148
2,368
Proceeds from exercise of stock options
1,759
1,765
Principal payments on finance lease obligations
(140
)
(131
)
Payments to acquire treasury stock
(46,498
)
(75,332
)
Net cash used in financing activities
(42,731
)
(73,478
)
NET INCREASE IN CASH AND CASH EQUIVALENTS
44,400
22,261
Effect of foreign currency on cash
666
(318
)
CASH AND CASH EQUIVALENTS - Beginning of year
100,452
78,509
CASH AND CASH EQUIVALENTS - End of year
$
145,518
$
100,452
RECONCILIATION OF GAAP NET INCOME (LOSS) TO NON-GAAP ADJUSTED EBITDA AND NON-GAAP NET INCOME
(In thousands, except per share amounts)
(unaudited)
Three Months Ended December 31,
Year Ended December 31,
2025
2024
2025
2024
Reconciliation of net income (loss):
Net income (loss)
$
6,684
$
13,899
$
(14,462
)
$
12,504
Add back (deduct):
Stock-based compensation
9,368
9,409
38,378
37,676
Depreciation and amortization
9,773
11,421
43,769
45,352
Litigation related expenses (2)
364
—
902
—
Interest income
(1,285
)
(1,604
)
(5,455
)
(8,477
)
Provision for (benefit from) income taxes
2,914
4,521
(1,492
)
5,270
Adjusted EBITDA (3)
$
27,818
$
37,646
$
61,640
$
92,325
Revenue
$
80,046
$
85,502
$
282,926
$
291,256
Adjusted EBITDA margin
35%
44%
22%
32%
Three Months Ended December 31,
Year Ended December 31,
2025
2024
2025
2024
Reconciliation of net income (loss) per share:
Net income (loss)
$
6,684
$
13,899
$
(14,462
)
$
12,504
Add back (deduct):
Stock-based compensation
9,368
9,409
38,378
37,676
Litigation related expenses (2)
364
—
902
—
Adjustment for income taxes
(1,976
)
(1,865
)
(8,117
)
(7,728
)
Non-GAAP net income (3)
$
14,440
$
21,443
$
16,701
$
42,452
GAAP diluted EPS
$
0.14
$
0.26
$
(0.31
)
$
0.23
Non-GAAP diluted EPS
$
0.29
$
0.41
$
0.33
$
0.78
GAAP weighted average shares outstanding—diluted
49,316
52,623
47,008
54,294
Non-GAAP weighted average shares outstanding—diluted
49,316
52,623
50,367
54,294
(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 income, Adjusted EBITDA, and Non-GAAP net income for the twelve months ended December 31, 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 twelve months ended December 31, 2025 was calculated using basic share count. Non-GAAP diluted earnings per share for the twelve months ended December 31, 2025 was calculated using diluted share count which includes approximately 3 million 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 December 31,
Year Ended December 31,
2025
2024
2025
2024
Reconciliation of cash provided by operating activities:
Net cash provided by operating activities
$
18,159
$
18,048
$
81,059
$
73,425
Less: Purchases of property and equipment
(6,890
)
(4,324
)
(14,345
)
(17,592
)
Less: Capitalized software development costs
(4,417
)
(4,868
)
(20,511
)
(20,936
)
Free cash flow
$
6,852
$
8,856
$
46,203
$
34,897