Slide 1: Q3 2024 Earnings Presentation
Q3 2024 Earnings Presentation N o v e mb e r 1 2 , 2 0 2 4
Slide 2: Safe Harbor
SAFE HARBOR This presentation contains forward-looking statements regarding our future business expectations, including but not limited to our guidance relating to our revenue, adjusted EBITDA, and adjusted EBITDA margin for the fourth quarter and full year 2024 and capex for the full year 2024, our
Slide 3: Q3 2024 Financial Highlights
Q 3 2 0 24 FIN ANC IAL HI GH LIG HT S W H AT W E D O REVENUE G A A P N E T L O SS PubMatic is $71.8M $(0.9M) building a better 1 3% YO Y supply chain for the future of A D J U ST E D EB I T D A 1 C A S H FL OW FR O M O P E R AT I O N S 2 advertising on the open internet $18.5M $19.1M 2 6% M ARGI N 1
Slide 4: Scaled Connected TV Business & Political Spend Fuel Q3 Growth
S CA LE D C ON NE CT ED TV BUS IN E SS & P O LIT ICA L S P E ND FUE L Q 3 GR OW TH YOY Increase in CTV monetized 100%+ impressions Penetration of the top 30 streaming 70% publishers 1 Gen AI innovation led to incremental 250+ publishers opening up access to political ads 1 Based on internal PubMatic
Slide 5: Supply Path Optimization Acceleration Widens Competitive Moat
S UP P LY P A TH OP TI MIZ ATI ON AC CE LE RA TIO N WI DE NS C OMP E TI TIV E M OA T Global agency holding company SPO SHARE OF TOTAL ACTIVITY integrated PubMatic technology into ON OUR P LATFORM its Merkury for Media solution 50% 45% B U Y E R S A R E LE V E R A GI N G P U B MA T I C P R OD U C T S
Slide 6: Mobile App Continues to Drive Revenue Growth and Differentiation
MO BI LE AP P C ON TIN UE S TO D RIV E RE V E NU E GR OW TH AND DI FFE RE N TIA TIO N YOY INCREASE IN M OBILE APP REVENUE IN Q3 20 24 20%+ PubMatic’s OpenWrap SDK joined one of the largest global mobile mediation platforms as a 2 0 2 4 E ST I M AT E D certified bidding partner G L O B A L O PE N I N
Slide 7: Our integrated platform offers multiple new TAM expansion
T A M E X PA N S I O N Western Union expanded their relationship with PubMatic from on-site monetization to offsite Our integrated audience extension platform offers multiple new The global town square selected revenue streams PubMatic as an SSP, opening up including commerce its traditionally close
Slide 8: Our use of generative AI across the product development cycle
HIGH I N N O VAT I O N MAR GIN DRIVE S REV ENUE VA L U E Our use of generative AI across the product development cycle allows us to innovate faster C U S TO M E R NEW VA L U E TA M and deliver value C R E AT I O N E X PA N S IO N 8
Slide 9: PubMatic's Integrated Platform Is Built to the Needs of a Complex Ecosystem
P U B M AT I C ’ S I N T E G R AT E D P L AT F O R M I S B U I LT T O T H E N E E D S O F A C O M P L E X A N D E V O LV I N G E C O S Y S T E M PU BLIS HERS DE MAND S IDE AND AP P P L AT F O R M S M ONE TI Z AT I ON & CONT ROL DE VEL OPE RS COR E SS P A C T I VAT E OP ENWRAP CON VERT COMME RCE AGE
Slide 10: Financial Highlights
Financial Highlights ▪
Slide 11: Q3 Financial Highlights
Q 3 FI NAN CIA L H IG HLI GH TS REV ENUE GRO WTH Y OY 13% REVENUE GRO SS PROFIT GRO SS PROFIT $72 $ 46 GRO WTH Y OY $64 23% GAA P NET LOS S $ 38 ($0.9)M ($ in Millions) -1% MA RGIN ADJU STED EBITDA1 Q 3 '2 3 Q 3 '2 4 Q 3 '2 3 Q 3 '2 4 $18.5M 26% MA RGIN 1 Adjusted EBITDA and Adjusted EBITDA Margin a
Slide 12: Q3 Quarterly Growth Metrics
Q 3 Q UAR TE RLY GR OWT H M ET RIC S VS. PRIOR YEAR Revenue Accelerated Excluding Political and One DSP Buyer 1 17% Significant Growth in Omnichannel Video ~50% Monetized Impressions Emerging Revenues Ramping ~2X 1 Excludes a several million-dollar impact from one DSP buyer on our platform that chan
Slide 13: Delivering 20%+ Growth in Secular Growth Areas
DE L IV E RIN G 20 % + GR OW TH IN SE C ULA R G RO WTH AR E AS OMNICHANNEL VIDEO 1 OMNICHANNEL VIDEO 1 MOBILE AP P RE VENU E GR OW TH SHARE OF TOTAL RE VENU E GR OW TH YO Y IN Q 3 2 0 24 RE VENUE YO Y IN Q 3 2 0 24 25% 36% 20%+ 1 Omnichannel video is the sum of online digital video plus CTV/OTT 13
Slide 14: Additional Levers Driving Q3 Revenue Growth
ADDITIONAL LEVERS DRIVING Q3 REVENUE GROWTH Revenue Growth From Net dollar-based retention on a TTM Existing Publishers basis was 112% 1 Net spend retention rate from SPO Spend Growth From partners with at least three years of Existing Buyers spending was 113% 2 Growth From Top Top ten ad verticals,
Slide 15: Executing on 2024 Operating Priorities
EXECU TI NG ON 2 024 O PERA TI NG PRI OR IT I ES A C C E L E R AT E R E V E N U E W I T H DRIVE CONTINUED I N C R E M E N TA L I N V E S T M E N T CO ST- EF F I C I ENCI E S ▪ Reallocat ion o f Resources Against CT V ▪ Eff iciently Increasing Ca pacity ▪ AI-Based Op timizat ion ▪ Buyer-Fo cused Effo
Slide 16: GAAP Operating Expenses: Investing for Growth
G AAP OP E RA TIN G EX P E NS E S : IN V ES T ING F OR G RO WTH $48 DR IVER S $50,00. 0 $38 $40,00. 0 $15 ▪ Q3 2024 includes targeted investments in T&D and $12 S&M headcount $30,00. 0 $20,00. 0 $24 ▪ Q3 2024 net headcount $20 additions +119 net ($ in Millions) $10,00. 0 compared to Q3 2023 $7 $9 $-
Slide 17: Net Income (Loss) and Diluted Earnings per Share
17 NE T IN CO ME ( LO S S) AND DI LUT ED E AR NIN GS P E R S HAR E NE T INCOME (LOSS)1 $7 .6 GAAP $6 .6 Net In com e (L oss) ($ in Millions) $1 .8 Non-GAAP 1 Net In com e $( 0.9) Q 3 '2 3 Q 3 '2 4 DILU TED EA RNIN GS PER SH ARE $ 0.1 4 $ 0.1 2 GAAP2 Diluted ($ in Millions) EPS $0 .03 Non-GAAP 1, 2 D
Slide 18: Capital Allocation
CAPITAL ALLOCATION C A S H U SE D F O R C A S H & M A R K E TA B L E R E P U R C H A S ES S E C U R IT I E S $140.4 R E P U R C H A S ED $124.1 7.6 MILLION CLASS A COM MO N SHARES ($ in Millions) (Feb. 1, 2023 - Sep. 30, 202 4) FEB 2023 TO SEP 2024 Q3’24 END CA SH 18
Slide 19: Focus on Cash Flow
FOCUS ON CASH FLOW NE T CASH PROVIDE D FRE E DR IVER S BY OPE RATIN G CASH FLOW1 ACTIVITIES ▪ Capex investments $55.4 for growth $33.3 ▪ Near term cash flow impacted by change $26.0 in DSP buyer mix $52.4 ▪ DSOs expected to ($ in Millions) stabilize by midyear 2025 YTD Sep' 23 YTD Sep' 24 YTD Sep' 2
Slide 20: 2024 Q4 and FY Guidance
20 2 0 2 4 Q4 AND FY G UID ANC E Q4 20 24 F u l l Ye a r 2 0 2 4 ($ in Millions) Low High Low High R e ve nu e $86 $90 $292 $296 Ye a r o v e r Ye a r G r o w t h % 2% 6% 9% 11% A d j u s te d E B I T D A $34 $37 $89 $92 A d j u s te d E B I T D A M a r g i n 40% 41% 30% 31% Note: Numbers round ed f
Slide 21: Long Term Competitive Advantages
21 L ON G T E R M C O M P E T IT I V E A D VA N TA G E S 1 Revenue Growth Ahead of Market Growth 2 Differentiated Adjusted EBITDA and Free Cash Flow Generation 3 Strong Publisher and Buyer Relationships 4 Diversified Omnichannel Platform 5 Durable Business Model 21
Slide 22: Appendix
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Slide 23: Non-GAAP Reconciliation – Adjusted EBITDA & Non-GAAP Net Income (Loss)
N O N - G A A P R E C O N C I L I AT I O N – A D J U S T E D E B I T D A & N O N - G A A P N E T I NCOME (LOSS) ($ in Thousands) Q3’24 Q2’24 Q1’24 Q4’23 Q3'23 Q2'23 Q1’23 Q4’22 Q3’22 Net income (loss) ($912) $1,971 ($2,454) $18,702 $1,774 ($5,724) ($5,871) $12,781 $3,326 Add back (deduct): Stock-bas
Slide 24: Non-GAAP Reconciliation – Adjusted EBITDA & Non-GAAP Net Income (Loss)
N O N - G A A P R E C O N C I L I AT I O N – A D J U S T E D E B I T D A & N O N - G A A P N E T I NCOME (LOSS) (in thousands except per share data) Q3’24 Q2’24 Q1’24 Q4’23 Q3'23 Q2'23 Q1’23 Q4’22 Q3’22 Net income (loss) ($912) $1,971 ($2,454) $18,702 $1,774 ($5,724) ($5,871) $12,781 $3,326 Unrealiz
Slide 25: Free Cash Flow Reconciliation
F R E E C A S H F L O W R E C O N C I L I AT I O N ($ in Millions) Three Months Ended September 30, 2024 2023 2022 Net Cash provided by Operating Activities $19.1 $23.8 $28.1 Deduct: Purchases of Property and Equipment (11.7) (2.9) (14.6) Capitalized Software Development Costs (4.5) (3.8) (2.8) Free