• Revenue Growth: 13% year-over-year increase in Q3.
• Gross Profit: Increased by 23% year-over-year.
• Adjusted EBITDA: $18.5 million, representing a 26% margin.
• Omnichannel Video Revenue: Grew 25% year-over-year, reaching 36% of total revenue.
• CTV Monetized Impressions: More than doubled year-over-year.
• Mobile App Business Growth: Over 20% year-over-year for the fourth consecutive quarter.
• Display Revenue Growth: 9% year-over-year across mobile and desktop channels.
• Net Dollar-Based Retention: 112% on a trailing 12-month basis.
• Share Repurchase: $29 million spent in Q3, buying back 1.8 million shares.
• Cash and Marketable Securities: $140.4 million with zero debt.
• Free Cash Flow: $2.9 million in Q3.
• Q4 Revenue Guidance: Expected to be between $86 million and $90 million.
• Full-Year Revenue Guidance: Raised to between $292 million and $296 million, 10% growth at midpoint.
• Q4 Adjusted EBITDA Guidance: Between $34 million and $37 million, approximately 40% margin at midpoint.

• Warning! GuruFocus has detected 8 Warning Signs with PUBM.

Release Date: November 12, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• PubMatic Inc (NASDAQ:PUBM) reported a 13% year-over-year revenue growth, exceeding expectations.
• The company's CTV monetized impression volume increased over 100% year-over-year for the third consecutive quarter.
• PubMatic Inc (NASDAQ:PUBM) successfully capitalized on political advertising demand, significantly boosting revenue.
• The company expanded its streaming customer base by 13% year-over-year, now working with 70% of the top 30 streaming publishers.
• PubMatic Inc (NASDAQ:PUBM) achieved a 23% year-over-year increase in gross profit, driven by cost management and productivity improvements.

Negative Points

• The company faces a headwind due to a change in spending from a large DSP buyer, impacting growth until mid-2025.
• Holiday spending trends were muted, potentially affecting Q4 revenue.
• PubMatic Inc (NASDAQ:PUBM) anticipates a low single-digit percentage increase in Q4 GAAP costs due to targeted investments.
• The company is experiencing a short-term increase in DSO due to changes in receivables mix, impacting cash flow.
• Despite strong growth, the company remains cautious about the macroeconomic environment and its potential impact on advertising spend.

Q & A Highlights

Q: What are the recent demand trends from advertisers and how is PubMatic positioning itself for next year? A: Steven Pantelick, CFO, noted that the quarter started well with strong growth in omnichannel video and political advertising. The fundamentals are positive, with core business growth excluding certain factors at 17%. For 2025, the focus will be on efficiency and productivity, with less hiring compared to previous years, leveraging existing resources effectively.

Q: Can you expand on the go-to-market strategy for new products and emerging revenue streams? A: Rajeev Goel, CEO, explained that PubMatic is deepening relationships on the buy side, focusing on agencies and advertisers. The strategy includes relationship-focused personnel and product specialists to expand these relationships, exemplified by partnerships like DSU and Group M.

Q: How is PubMatic addressing the DSP change and its impact on business? A: Steven Pantelick, CFO, stated that the DSP spend has stabilized and the company is confident in growing through this change. The rest of the business is robust, with significant growth in other areas, and the DSP change is seen as a temporary adjustment.

Q: What factors are contributing to PubMatic's critical mass in CTV? A: Rajeev Goel, CEO, attributed the success to technology innovation, SPO buyer relationships, and integrated solutions like Connect and Activate. The combination of these factors is driving streamers to work with PubMatic.

Q: What are the capacity needs for the business in the near to medium term? A: Steven Pantelick, CFO, mentioned that the company is prepared for 2024 and expects to continue optimizing existing infrastructure. The focus will be on efficiency, with no major uptick in CapEx anticipated for 2025.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.