Pubmatic, Inc. · NASDAQ:PUBM
Pubmatic — Q1 2024 Earnings Presentation
26 slides from Pubmatic's earnings presentation, May 7, 2024
Slide 1: Q1 2024 Earnings Presentation
Q1 2024 Earnings Presentation May 7, 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 o ur guidance relating to our revenue and adjusted EBITDA for the second quarter of 2024 and revenue, adjusted EBITDA margin, free cash flow and capex for
Slide 3: What We Do: Q1 2024 Financial Highlights
W H AT W E D O PubMatic is building a better supply chain for the future of advertising on the open internet Q1 2024 FINANCIAL HIGHLIGHTS RE V E NUE G AAP NE T L O S S AD J US T ED E B IT DA1 C AS H F L O W F RO M O P E R AT I O N S 2 $66.7M $(2.5M) $15.1M $24.3M 2 0 % YO Y - 4 % MA R GIN 2 3 % MA R
Slide 4: We Are Building the Supply Chain of the Future
W E AR E B U I L D I N G T H E S U P P L Y C H AI N O F T H E F U T U R E P U B L IS HERS D E MAN D S ID E AN D AP P P L AT F O R M S MO N E T I Z A T I O N & C O N T R O L D E V E L OPER S C OR E S S P A C T I V AT E OP E N WR AP C ON V E RT C OMME R C E AGE N C IE S ME D IA D AT A & AUD IE NC E S
Slide 5: Sell-side technology provides a foundation for efficiency and innovation
S E L L - S I D E T E C H N O L O G Y P R O V I D E S A F O U N D AT I O N F O R E F F I C I E N C Y & I N N O V AT I O N I N D I G I T AL AD V E R T I S I N G P U B M AT I C I S B U I L D I N G A H E A D OF M A J OR AT T R A C T IN G N E W A D D R E S SA B IL IT Y E N T R A N T S T O D IG ITA L C H
Slide 6: Supply Path Optimization Acceleration Widens Competitive Moat
S U P P L Y P AT H O P T I M I Z AT I O N AC C E L E R AT I O N W I D E N S C O M P E T I T I V E M O AT M U LT I P LE FA C T OR S D R I V I N G S P O S HA R E O F T O TA L A C T I VI T Y L ON G - T E R M G R OW T H P OT E N T I A L OF S P O O N T HE P UB M AT I C P L AT F O R M 50% 125% net spend r
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 YOY INC R E A S E IN OMNIC H A N NE L YOY INC R E A S E IN VID E O MONE T IZE D IMP R E S S IO NS OMNIC H A N N E L VID E O R E VE NUE IN Q1 2 0 2 4 IN Q1 2 0 2 4 >50% 33% G R O W I NG R E L AT I O NS HI P S W IT H K
Slide 8: Commerce Media Companies Embrace PubMatic's Sell-Side Technology
C O M M E R C E M E D I A C O M P AN I E S E M B R AC E P U B M AT I C ’ S SELL-SIDE TECHNOLOGY W E A R E S E E I NG S T R O NG I NT E R E S T I N C O NVE R T F R O M L E A D I NG C O M M E R C E M E D I A C O M PA NI E S E S T IM AT E D T A M E X P A N S I O N F R O M R E T A I L M E D I A G L O B
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 A D VANC ED S E L L-SIDE D ATA E F F ICIENCY & E ND -T O-END C L O SE D-LOOP R E P ORTING C A PABILITIES C O NT
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: Q1 Financial Highlights
Q 1 2 0 2 4 F I N AN C I AL H I G H L I G H T S R E VE NUE Q 1 R E VE NUE 20% YOY $67 $55 Q 1 G A A P NE T L O S S $(2.5M) -4 % MA R G IN Q 1 A D J US T E D E B I T D A 1 ($ in Millions) $15.1M Q1'23 Q1'24 2 3 % A D J . E B I TDA MA R G IN 1 Adjusted EBITDA and Adjusted EBITDA Margin are non-GAAP fi
Slide 13: 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 NE T C AS H F RO M AD J US T ED E B IT DA1 O P E R AT I N G A C T I V IT I E S F RE E C AS H F L O W2 $24 $16 $15 $13 $7 $5 ($ in Millions ) Q1'23 Q1'24 Q1'23 Q1'24 Q1'23 Q1'24 1 Adjusted EBITDA is a non-GAAP measure.
Slide 14: 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 Q1 2024
Slide 15: 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 R E V E N U E F R O M YA H O O E X C L U D I N G YA H O O OWNED & OPERATED I NVENTORY OWNED & OPERATED I NVENTORY +25% $65 $4 - 4 4% $52 $2 ($ in Millions) ($ in Millions) Q1'23 Q1'24 Q1'23
Slide 16: Additional Levers Driving Q1 Revenue Growth
AD D I T I O N AL L E V E R S D R I V I N G Q 1 R E V E N U E G R O W T H Added 99 publishers on a YOY basis, Added New including CTV and transactional Publisher Logos commerce brands Revenue Growth Excluding Yahoo, net dollar-based From Existing retention on a TTM basis was 114% 1 Publishers Net sp
Slide 17: Executing on Operating Priorities
E X E C U T I N G O N 2 0 2 4 O P E R AT I N G P R I O R I T I E S A C C E L E R AT E R E V E N U E W I T H D R IVE C ONT IN UE D I N C R E M E N TA L I N V E S T M E N T C OS T- E F F IC IE NC I E S Activate, Connect, Convert, OpenW rap Efficiently Increasing Capacity Buyer-Focuse d Sellers AI-Base
Slide 18: 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 $50,00. 0 $47 DRIVE RS $42 $40,00. 0 $14 ▪ Increased headcount by 11% $13 YoY in Q1 2024 with majority $30,00. 0 hired in engineering and sales & marketing teams $20,00. 0 $25 $23 ▪ Plan to add 150 net new team ($ in Millio
Slide 19: 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 $4.8 GAAP Net Income ($ in Millions) $(0.1) Non-GAAP $(2.5) Net Income 1 $(5.9) Q1'23 Q1'24 D IL UT E D E A R NINGS P E R S HA R E $0.09 $0.00 GAAP Diluted EPS 2 ($ in Millions) Non-GAAP $(0.05) Diluted EPS 2 $(0.11) Q1'
Slide 20: 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 FREE B Y OP E R A T ING ACT IVIT IE S CASH FLOW 1 $174M Q 1 ’2 4 E ND C AS H AND M A R K E TA B L E $24.3 S E C U R I T IE S $16.3 $12.8 $79.4M C AS H US E D T O $5.3 ($ in Millions) RE P URC HAS E 5 . 1 M I L L IO N C L A S S A C O M M ON S HAR
Slide 21: Q2 and FY Guidance
2 0 2 4 Q 2 AN D F Y G U I D AN C E Q2 2024 F u l l Ye a r 2 0 2 4 ($ in Millions) Low High Low High Rev enue $69 $71 $296 $304 Ye a r o v e r Ye a r G r o wt h % 9% 12% 11% 14% E x c l u d i n g Ya h o o ! 11% 14% 11% 14% A d ju s t e d E B IT D A $17 $19 $90 $94 A d ju s t e d E B IT D A Ma r g in
Slide 22: Long Term Competitive Advantages
L O N G T E R M C O M P E T I T I V E AD V AN T A G E S 1 Revenue Growth Ahead of Market Growth 2 Differentiated Adjusted EBITDA and Free Cash Flow Generation 3 Strong Publisher and Buyer Relationships 4 Diversified Omnichannel Platform 5 Durable Business Model 22
Slide 23: Appendix
Appendix 23
Slide 24: Non-GAAP Reconciliation – Adjusted EBITDA
N O N - G AA P R E C O N C I L I AT I O N – AD J U S T E D E B I T D A & N O N - G AA P NET INCOM E (LOSS) ($ in Thousands) Q1’24 Q4’23 Q3'23 Q2'23 Q1’23 Q4’22 Q3’22 Q2’22 Q1’22 Net income (loss) ($2,454) $18,702 $1,774 ($5,724) ($5,871) $12,781 $3,326 $7,819 $4,779 Add back (deduct): Stock-based co
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 (LOSS) (in thousands except per share data) Q1’24 Q4’23 Q3'23 Q2'23 Q1’23 Q4’22 Q3’22 Q2’22 Q1’22 Net income (loss) ($2,454) $18,702 $1,774 ($5,724) ($5,871) $12,781 $3,326 $7,819 $4,779 Unrealized (g
Slide 26: Free Cash Flow Reconciliation
F R E E C AS H F L O W R E C O N C I L I AT I O N ($ in Millions) Three Months Ended March 31, 2024 2023 2022 Net Cash provided by Operating Activities $24.3 $12.8 $19.3 Deduct: Purchases of Property and Equipment (0.8) (1.4) (0.1) Capitalized Software Development Costs (7.2) (6.0) (4.2) Free Cash F