Slide 1: Q4 and FY 2023 Earnings Presentation
Q4 and FY 2023 Earnings Presentation February 26, 2024
Slide 2: Safe Harbor
S AF E H AR B O R This presentation contains forward-looking statements regarding our future business expectations, including but not limited to our guidance relating to our revenue and adjusted EBITDA for the first quarter of 2024 and revenue, adjusted EBITDA margin, free cash flow and capex for th
Slide 3: Q4 2023 Financial Highlights
M ISSION PubMatic Fuels the Endless Potential of Internet Content Creators Q4 2023 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 2 $84.6M $18.7M $38.9M $28.7M 1 4 % YO Y 2 2 % MA R GIN 4 6 % MA R GIN 1 Adjusted EBITDA and Adjust
Slide 4: Multiple Factors Drive Significant Growth Opportunities in 2024
M U L T I P L E F AC T O R S D R I V E S I G N F I C AN T G R O W T H OPPORTUNITIES IN 2024 M A J OR TA I LW I N D S S HI F T T O C T V & C OMME R C E ME D IA I N T E G R AT E D ENGINEERING P L AT F OR M EFFICIENCY C O NT I NUE D I ND US T RY C O NS O L I D AT I O N Investments in Generative AI driv
Slide 5: In the Wake of Third-Party Cookie Deprecation, Sell-Side Technology Is More Valuable
I N T H E W AK E O F T H I R D - P AR T Y C O O K I E D E P R E C AT I O N , S E L L - S I D E T E C H N O L O G Y I S M O R E V AL U A B L E T H AN E V E R S C A L E D S U I T E OF A D D R E S S A B I L I TY S OL U T I ON S S HA R E O F P UB M AT I C I M P R E S S I O NS W I T H A LT E R NAT I VE T
Slide 6: Supply Path Optimization and Activate Drive Continued Investment
S U P P L Y P AT H O P T I M I Z AT I O N AN D AC T I V AT E G R O W T H D R I V E CONTINUED INVESTM ENT S P O S HA R E O F T O TA L A C T I VI T Y O N T HE P UB M AT I C P L AT F O R M S E Q UE NT I A L I NC R E A S E I N 45%+ P I P E L I NE O P P O R T UNI T I E S 1 25% 34% 25% P L A NNE D E X PA
Slide 7: Connected TV and Online Video Fuel Revenue Growth
C O N N E C T E D T V AN D O N L I N E V I D E O F U E L R E V E N U E G R O W T H C T V P UB L I S HE R YO Y I NC R E A S E I N YO Y G R O W T H O F 1 : 1 C US T O M E R G R O W T H M O NE T I Z E D C T V P R I VAT E M A R K E T P L A C E YO Y I N 2 0 2 3 I M P R E S S I O NS I N 2 0 2 3 R E VE NUE
Slide 8: Innovation Unlocks Emerging Revenue Streams
I N N O V AT I O N U N L O C K S E M E R G I N G R E V E N U E S T R E AM S P R OD U C T D E V E L OP M EN T E X T E N D S VA L U E B E YON D A D M ON E T I ZAT ION Wrapper Software Buyer SPO Solution 2 0 2 3 YOY INC R E A S E IN SOFTWARE RELEASES Post-Cookie Targeting 60% Commerce Media 8
Slide 9: Supply Chain Evolution Ushers in a New Era of Performance
S U P P L Y C H AI N E V O L U T I O N U S H E R S I N A N E W E R A O F P E R F O R M AN C E AC R O S S T H E O P E N I N T E R N E T P E R F O RM A N C E A D V E R T IS IN G E N G I N E C L O SE D-LOOP R E P ORTING E F F ICIENCY & E ND -T O-END E N H A N C E D S E L L - S I D E D A TA & C O M M E
Slide 10: Strong Performance Sets Foundation for Accelerated Revenue Growth
S T R O N G P E R F O R M AN C E S E T S F O U N D AT I O N F O R AC C E L E R AT E D R E V E N U E G R O W T H AN D M AR K E T S H AR E G AI N S Core Differentiators Driving Continued Success HIG H M ARG IN I N N O V AT I O N RE V E NUE D RIV E S VAL UE I NT E G R AT E D P L AT F O R M C US T O M E
Slide 11: Financial Results
Financial Results 11
Slide 12: FY and Q4 Financial Highlights
F Y AN D Q 4 F I N AN C I AL H I G H L I G H T S R E VE NUE Q 4 R E VE NUE $267 14% YOY $256 $85 $76 $74 Q 4 G A A P NE T I NC O M E $18.7M $227 2 2 % NE T I NC O ME MA R G IN Q 4 A D J US T E D E B I T D A 1 ($ in Millions) $38.9M FY'21 FY'22 FY'23 Q4'21 Q4'22 Q4'23 4 6 % A D J . E B I TDA MA R G I
Slide 13: PubMatic Revenue Growth Excluding Yahoo Revenue
P U B M AT I C R E V E N U E G R O W T H E X C L U D I N G Y AH O O R E V E N U E P U B M AT I C R E V E N U E +19% E X C L U D I N G YA H O O +8% OWNED & OPERATED $82 INVENTORY $254 $235 $69 FY22 FY23 Q4'22 Q4'23 R E V E N U E F R O M YA H O O OWNED & OPERATED INVENTORY $5 $21 -40% -55% $13 $2 FY22
Slide 14: Consistent and Differentiated Financial Results
C O N S I S T E N T AN D D I F F E R E N T I AT E D F I N AN C I AL R E S U L T S $97 $87 $81 $75 $53 $38 $39 $32 $29 ($ in Millions ) $19 $20 $7 FY'22 FY' 23 Q4'22 Q4'23 Adjusted EBITDA Net Cash From Ops Free Cash Flow 1 Adjusted EBITDA is a non-GAAP measure. A reconciliation of Adjusted EBITDA to
Slide 15: Platform Diversity Fuels Strong Financial Performance
P L AT F O R M D I V E R S I T Y F U E L S S T R O N G F I N AN C I AL P E R F O R M AN C E D I M E N S I ON S OF P L AT F OR M D I V E R S I T Y O M NI C HA NNE L R E VE NUE S OMNIC H A N N E L D IS P L A Y R E VE NUE VID E O 1 R E VE NUE G E O G R A P HI E S GROW T H YOY IN GROW T H YOY IN Q4 2023
Slide 16: Executed on 2023 Operating Priorities
E X E C U T E D O N 2 0 2 3 O P E R AT I N G P R I O R I T I E S Position for Grew publisher footprint while Ad Spend growing net spend retention Reacceleration from SPO buyers 2023 free cash flow up 38% Drive Free Cash over 2022, allowing us to Flow Generation reinvest to accelerate growth Drive Co
Slide 17: GAAP Operating Expenses: Investing for Growth
G AAP 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 $200 , 00 $50,00. 0 $166 $40 DRIVE RS $40,00. 0 $150 , 00 $35 $134 ▪ Increased headcount by 8% $56 $31 $13 YoY in 2023 with majority $110 $30,00. 0 $11 hired for India engineering $45 $10 $100 , 00 team $36 ($ in Millions)
Slide 18: Net Income and Diluted Earnings Per Share
N E T I N C O M E AN D D I L U T E D E AR N I N G S P E R S H AR E NE T INC OME $64.7 $28.2 $27.1 $56.6 GAAP $51.2 $24.4 Net Income $17.9 $18.7 $28.7 $32.0 $12.8 Non-GAAP Net Income $8.9 FY'21 FY'22 FY'23 Q4'21 Q4'22 Q4'23 D IL UT E D E A R NINGS P E R S HA R E $1.14 $1.00 $0.50 $0.48 $0.90 $0.45 GA
Slide 19: Focus on Cash Flow
F O C U S O N C AS H F L O W NE T C A S H P R OVID E D B Y OP E R A T ING ACT IVIT IE S FREE CASH FLOW 1 $175M 2 0 2 3 Y E AR E ND C AS H AND M ARK ETABLE S E C U R I T IE S $87.2 $81.1 $52.8 $38.3 $59M C AS H US E D T O ($ in Millions) RE P URC HAS E 4 M IL LION C L AS S A C O M M ON S HARE S (A S
Slide 20: 2024 Operating Priorities & Growth Levers
2 0 2 4 O P E R AT I N G P R I O R I T I E S & G R O W T H L E V E R S O P E R AT I N G P R I O R I T Y I N C R E M E N TA L I N V E S T M E N T A R E A Accelerate Revenue Increase sales and custom er Growth With Increased success team to grow SPO and Investm ent em erging revenue stream s Drive Cos
Slide 21: 2024 Q1 Guidance
2 0 2 4 Q 1 G U I D AN C E Q1 2024 ($ in Millions) Low High Rev enue $61 $63 Ye a r o v e r Ye a r G r o wt h % 10% 14% E x c l u d i n g Ya h o o ! 15% 19% A d ju s t e d E B IT D A $10 $12 A d ju s t e d E B IT D A Ma r g in 17% 19% No te : Nu mber s r o unded fo r p r esentatio n p u rposes FY 20
Slide 22: Long Term Competitive Advantages
L O N G T E R M C O M P E T I T I V E AD V AN T A G E S 1 Revenue Growth Ahead of Market Growth 2 Differentiated Adjusted EBITDA and Free Cash Flow Generation 3 Strong Publisher and Buyer Relationships 4 Diversified Omnichannel Platform 5 Durable Business Model 22
Slide 23: Appendix
Appendix 23
Slide 24: Non-GAAP Reconciliation – Adjusted EBITDA
N O N - G AA P R E C O N C I L I AT I O N – AD J U S T E D E B I T D A & N O N - G AA P NET INCOM E ($ in Thousands) Q4’23 Q3'23 Q2'23 Q1’23 Q4’22 Q3’22 Q2’22 Q1’22 Q4’21 Net income (loss) $18,702 $1,773 ($5,724) ($5,871) $12,781 $3,326 $7,819 $4,779 $28,239 Add back (deduct): Stock-based compensati
Slide 25: Non-GAAP Reconciliation – Non-GAAP Net Income
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 & N O N - G AA P NET INCOM E (in thousands except per share data) Q4’23 Q3'23 Q2'23 Q1’23 Q4’22 Q3’22 Q2’22 Q1’22 Q4’21 Net income (loss) $18,702 $1,773 ($5,724) ($5,871) $12,781 $3,326 $7,819 $4,779 $28,239 Unrealized (gain) los
Slide 26: Free Cash Flow Reconciliation
F R E E C AS H F L O W R E C O N C I L I AT I O N ($ in Millions) Three Months Ended December 31, Twelve Months Ended December 31, 2021 2022 2023 2021 2022 2023 Net Cash provided by (used in) $28.5 $19.4 $28.7 $88.7 $87.2 $81.1 Operating Activities Deduct: Purchases of Property and (7.6) (9.0) (5.2)