Slide 1: Q1 2022 Earnings Presentation
Q1 2022 Earnings Presentation May 9, 2022
Slide 2: Safe Harbor
S AF E H AR B O R This presentation contains forward-looking statements. These statements may relate to, but are not limited to, expectations of Q2 2022 and full-year 2022 operating results or financial performance, market size and growth opportunities, the calculation of certain of our key financia
Slide 3: Q1 2022 Financial Highlights
M ISSION PubMatic Fuels the Endless Potential of Internet Content Creators Q1 2022 FINANCIAL HIGHLIGHTS RE V E NUE G AAP NE T AD J US T ED C AS H F L O W F RO M INC O M E E B IT DA1 O P E R AT I O N S $54.6M $4.8M $17.0M $19.3M + 2 5 % YO Y 9 % MA R GIN 3 1 % MA R GIN 1 Adjusted EBITDA and Adjusted
Slide 4: PubMatic Flywheel Drives Consistent Performance
P U B M AT I C F L Y W H E E L D R I V E S C O N S I S T E N T P E R F O R M AN C E B e n e fit s o f O w n e d I n f ra st ruct ure C O NT R O L & O P T I M I Z E HIG H-M ARG IN I N N O V AT I O N E NT I R E T E C HNO L O G Y RE V E NUE US AG E B AS E D D RIV E S VAL UE S TA C K M O DE L G A I N L
Slide 5: Long Runway of Growth as Addressable Market Expands
L O N G R U N W AY O F G R O W T H AN T I C I P AT E D AS AD D R E S S A B L E M AR K E T E X P AN D S 70 0. 0 T H E S U P P LY C H A I N OF T H E G L O B A L D I G I TA L A D S P E ND $627 F U T U R E M A X I M IZE S VA L U E 60 0. 0 $572 A C R OS S T H E E C OS YS T E M $514 50 0. 0 $439 40 0. 0 B
Slide 6: Expanding Usage via Supply Path Optimization
E X P AN D I N G U S AG E V I A S U P P L Y P AT H O P T I M I Z AT I O N U N D E R S C O R E S I N C R E AS E D V AL U E F O R B U Y E R S PA R T N E R I N G W I T H B U YE R S T O B U I L D R o b u st Au d i en ce M OR E T R A N S PA R E N T & E F F I C I EN T B U YI N G A C R OS S OP E N I N T E
Slide 7: Driving Omnichannel Expansion from Fastest Growing Formats
D R I V I N G O M N I C H AN N E L E X P AN S I O N F R O M F AS T E S T G R O W I N G F O R M AT S S C A L I N G A T R A N S PA R E N T, P R OG R A M M ATI C C T V / OT T M A R K E T P L A C E F OR C T V / OT T On l i n e Vi d eo C T V YOY R E V E N U E G R OW T H I N Q1 2 0 2 2 OVER 5X M o b ile A
Slide 8: Audience Addressability Innovation Drives Expansion of Platform Usage
AU D I E N C E AD D R E S S A B I L I T Y I N N O V AT I O N D R I V E S E X P AN S I O N O F P L AT F O R M U S AG E I N V E S T M E N TS I N A D D R E S S A B I L I TY U N L OC K I N G R E TA I L M E D I A 1 st Part y D at a OP P OR T U N I T Y E S T I M ATE D G L OB A L R E TA I L M EDIA AD SPEND
Slide 9: Reinvesting Profit to Fuel Long-Term Innovation and Market Share Gains
R E I N V E S T I N G P R O F I T T O F U E L L O N G - T E R M I N N O V AT I O N AN D M AR K E T S H AR E G AI N S I n v e st ing f o r t h e F u t u re S UP P LY PAT H O P T I M I Z AT I O N A UD I E NC E A D D R E S S A I L I T Y HI G H- G R O W T H F O R M AT S Specialized cloud ( C T V, O NL I
Slide 10: Financial Results
Financial Results 10
Slide 11: Strong Track Record of Durable Growth and Profits
S T R O N G T R AC K R E C O R D O F D U R AB L E G R O W T H AN D P R O F I T S R E VE NUE 7 th $76 C O N S E C UT I V E Q U A R T E R O F 2 0 % + RE V E NUE G RO WT H 88% $58 $56 $55 $44 $50 64% $38 54% 54% 12 th 33% 34% C O N S E C UT I V E Q U A R T E R O F 25% P O S IT I V E G A A P N E T I N C
Slide 12: Profitability Fuels Investment for Long-Term Growth
P R O F I T AB I L I T Y F U E L S I N V E S T M E N T F O R L O N G T E R M G R O W T H G AAP NE T INC O M E $5 $5 Net Income 11% $1 9% Net Income Margin % 3% Q1'20 Q1'21 Q1'22 Ad j. E B IT DA1 70 % $17 60 % $14 50 % 1 40 % Adjusted EBITDA $5 33% 31% 30 % 1 18% 20 % Adjusted EBITDA Margin % 10 % 0%
Slide 13: Financial Growth Drivers
F INA NC IA L G ROW T H D RIV E RS 1 Scaled Global Business 2 Usage-Based Business Model 3 Structural Advantages 4 Highly Efficient, Proven Business Model 5 Consistently Generated Cash Flow 13
Slide 14: Strong, Diversified Advertiser Spend Growth in Q1 2022
S T R O N G , D I V E R S I F I E D AD V E R T I S E R S P E N D G R O W T H I N Q 1 2 0 2 2 A D VE R T IS E R S P L A C ING YOY A D S P E ND GR OW T H A D S ON OUR P L A T F OR M OF T OP 1 0 AD VE RT ICAL S 60,000+ 40%+ 14
Slide 15: Strong Revenue Growth Across Channels in Q1 2022
S T R O N G R E V E N U E G R O W T H AC R O S S C H AN N E L S I N Q 1 2 0 2 2 YOY MOBIL E & YOY C T V R E VE NUE YOY DE S KT OP OMNIC H A N N E L VID E O 1 GROW TH R E VE NUE GR OW T H R E VE NUE GR OW T H 41% 5X + 15% 1 Omnichannel video is the sum of online digital video plus CTV/OTT 15
Slide 16: Growing Revenue Visibility and Predictability
G R O W I N G R E V E N U E V I S I B I L I T Y AN D P R E D I C T AB I L I T Y NE T D O L L A R - B A S E D R E T E NT I O N 1 Exp an d ed U sag e f ro m Bu yers Vi a Su p p l y Pat h Op t i m i z at i o n 149% 140% 122% Exp an d ed U sag e f ro m Pu b l i sh ers Vi a L an d & Exp an d St rat eg y
Slide 17: Robust Gross Margins
R O B U S T G R O S S M AR G I N S 200 % 180 % D R IVE R S $37 160 % High marginal profitability from $31 140 % structural leverage: 120 % ▪ Increased investments in $18 100 % capacity for future growth 80% 72% ▪ Scale efficiencies from 65% 67% 60% continued reduction in cost ($ in Millions) 40% of
Slide 18: Owned & Optimized Infrastructure Driving Down Unit Costs
O W N E D & O P T I M I Z E D I N F R AS T R U C T U R E D R I V I N G D O W N U N I T COSTS WHILE IM PROVING CUSTOM ER OUTCOM ES AD IMPRESSIONS C O S T O F R E VE NUE P E R ONE MIL L ION ( T R AI L I NG T W E LVE M O NT HS ) AD IMPRESSIONS ( T R AI L I NG T W E LVE M O NT HS ) 106 +88% $1.21 (50%)
Slide 19: Operating Expenses: Investing for Growth
O P E R AT I N G E X P E N S E S : I N V E S T I N G F O R G R O W T H $35,00 $32 80 % DRIVE RS $30,00 ▪ Increased headcount by 70 % $25 $11 $25,00 61% 25% with focus on 59% 60 % 57% technical and go-to-market teams 50 % $20,00 $17 $8 ▪ Q1'22 includes incremental 40 % $15,00 $4 $16 30 % stock-based
Slide 20: GAAP and Non-GAAP Diluted Earnings Per Share
G AAP AN D N O N - G A AP D I L U T E D E AR N I N G S P E R S H AR E GA A P A ND NON- GA A P $7.8 $8.1 NE T INC OME $4.9 $4.8 Net Income $ in Millions Non-GAAP Net Income 1 $0.9 $1.4 Q1'20 Q1'21 Q1'22 GA A P A ND NON- GA A P $0.14 $0.14 D IL UT E D E A R NINGS P E R S HA R E $0.09 $0.08 GAAP Dilute
Slide 21: Delivering Cash Flow
D E L I V E R I N G C AS H F L O W NE T C A S H P R OVID E D FREE CASH FLOW 1 DRIVE RS B Y OP E R A T ING ACT IVIT IE S ▪ W orkflow automation ▪ Continuous optimization of $19 infrastructure (software and hardware) $15 $15 $13 ▪ Offshore R&D leverage $11 $9 ▪ Focus on profitable publishers ($ in Mil
Slide 22: Guidance
2 0 2 2 G U I D AN C E Q2 2 0 2 2 FY 2022 ($ in Millions) Low High Low High Revenue $60 $62 $282 $286 Y/ Y% 20% 25% 24% 26% Adjusted EBITDA $18 $20 $101 $106 Adjusted EBITDA M argin 30% 32% 36% 37% Note: Numbers rounded for presentation purposes W e expect FY 2022 CapEx to be in the range of $33M –
Slide 23: Customer Value & Usage-Based Model Set Foundation for Future Growth
P U B M AT I C ’ S F O C U S O N C U S T O M E R V AL U E & U S AG E - B A S E D M O D E L S E T F O U N D AT I O N F O R F U T U R E G R O W T H AD V E R T I S E R S C US T OME R S AG E N C I E S P U B L I S HE RS D E S K T O P D I S P L AY M O B I LE WE B M O B I L E AP P D I G I T AL V I D E O CT
Slide 24: Appendix
Appendix 24
Slide 25: Non-GAAP Reconciliation – Adjusted EBITDA
N O N - G AA P R E C O N C I L I AT I O N – AD J U S T E D E B I T D A ($ in Millions) Three Months Ended March 31, 2020 2021 2022 Net Income $0.9 $4.9 $4.8 Add back (deduct): Stock-Based Compensation $0.5 $3.2 $5.1 Impairment of Internal Use Software - - - Unrealized gain(loss) on equity investment
Slide 26: Non-GAAP Net Income Reconciliation
N O N - G AA P N E T I N C O M E R E C O N C I L I AT I O N ($ in Millions, except for Non-GAAP Diluted EPS1 ) Three Months Ended March 31, 2020 2021 2022 Net Income $0.9 $4.9 $4.8 Add back (deduct): Stock-Based Compensation $0.5 $3.2 $5.1 Unrealized gain(loss) on equity - - ($1.4) investments Adjus
Slide 27: Free Cash Flow Reconciliation
F R E E C AS H F L O W R E C O N C I L I AT I O N ($ in Millions) Three Months Ended March 31, 2020 2021 2022 Net Cash provided by (used in) Operating $14.7 $12.7 $19.3 Activities Deduct: Purchases of Property and Equipment ($1.3) ($0.3) ($0.1) Capitalized Software Development Costs ($2.7) ($3.0) ($