Slide 1: Q4 and FY 2021 Earnings Presentation
Q4 and FY 2021 Earnings Presentation February 28, 2022
Slide 2: Safe Harbor
SAFE HARBOR This presentation contains forward-looking statements. These statements may relate to, but are not limited to, expectations of future operating results or financial performance, market size and growth opportunities, the calculation of certain of our key financial and operating metrics, c
Slide 3: Mission: Fueling the Potential of Internet Content Creators
MISSION PubMatic Fuels the Endless Potential of Internet Content Creators 3
Slide 4: Financial Highlights
FINANCIAL HIGHLIGHTS Q4 2021 REVENUE GAAP NET INCOME M ARGIN 1 ADJ. EBITDA M ARGIN 2 $75.6M 37% 51% +34% YOY $28.2 MILLION $38.9 MILLION FY 2021 REVENUE GAAP NET INCOME M ARGIN 1 ADJ. EBITDA M ARGIN 2 $226.9M 25% 42% +53% YOY $56.6 MILLION $96.2 MILLION 1 GAAP Net Income includes $5.4 million unreal
Slide 5: Our Total Addressable Market Has Expanded
OUR TOTAL ADDRESSABLE MARKET HAS EXPANDED 700.00 G L O B AL D I G I TAL AD S P E N D $627 600.00 $572 YOY GROWTH $514 IN 2021 500.00 $439 400.00 $334 +31% $300 $259 300.00 200.00 (in Billions) PROJECTED YOY GROWTH IN 2022 100.00 +17% 0.00 2018 2019 2020 2021 2022 2023 2024 Pre-Pandemic Projections C
Slide 6: Growing Market Share via the PubMatic Flywheel
GROWING MARKET SHARE VIA THE PUBMATIC FLYWHEEL E S T I M AT E D P U B M AT I C M AR K E T S H AR E 1 3-4% HIGH-MARGIN I N N O VAT I O N USAGE BASED + 1 P E R C E N TA G E P O I N T Y O Y REVENUE D R I V E S VA L U E MODEL L O N G - T E R M M AR K E T S H AR E O B J E C T I V E E X PA N D E D 20%+ CU
Slide 7: Expanding Usage via Supply Path Optimization
EXPANDING USAGE VIA SUPPLY PATH OPTIMIZATION UNDERSCORES INCREASED VALUE FOR BUYERS Robust Audience Targeting Y O Y I N C R E AS E I N S P O PAR T N E R S I N 2 0 2 1 1 44% Direct Technology Integrations & Workflow s S H AR E O F AC T I V I T Y O N O U R P L AT F O R M F R O M S P O Premium Omnichan
Slide 8: Driving Omnichannel Expansion from Fastest Growing Formats
DRIVING OMNICHANNEL EXPANSION FROM FASTEST GROWING FORMATS S C AL I N G A T R AN S PAR E N T, P R O G R AM M AT I C CTV / OTT M AR K E T P L AC E F O R C T V / O T T Online Video CTV REVENUE GROWTH YOY IN Q4 2021 OVER 6X Mobile App & Web 8
Slide 9: Audience Addressability Innovation Drives Expansion of Platform Usage
AUDIENCE ADDRESSABILITY INNOVATION DRIVES EXPANSION OF PLATFORM USAGE IDENTITY HUB DRIVES PUBLISHER REVENUE IN 1 st Party Data COOKIELESS ENVIRONMENTS Know n Identity AU D I E N C E E N C O R E HELPS BUYERS TAR G E T AU D I E N C E S I N P R I VAC Y- C O M P L I AN T WAY S Contextual Targeting 9
Slide 10: Geographic Expansion Driving New Growth
GEOGRAPHIC EXPANSION DRIVING NEW GROWTH Madrid, Beijing, Spain China Paris, Seoul, France South Korea 10
Slide 11: Retail Media Expands PubMatic's Addressable Market
RETAIL MEDIA EXPANDS PUBMATIC’S ADDRESSABLE MARKET G L O B AL R E TAI L M E D I A AD S P E N D 1 Monetize Ow ned & Operated Inventory $150 $143 $130 $110 Extend 1 st Party Data $90 $77 Offsite $70 $50 (in Billions) $30 Optimize ROI For $10 Buyers 2021 2024 -$10 1 Source Zenith, 2021 11
Slide 12: Reinvesting Profit to Accelerate Future Growth and Market Share Expansion
REINVESTING PROFIT TO ACCELERATE FUTURE GROWTH AND MARKET SHARE EXPANSION 2 0 2 2 In ve s t me n t A r e a s O W N E D & O P E R AT E D I N F R AS T R U C T U R E E N G I N E E R I N G & I N N O VAT I O N Specialized cloud infrastructure for digital advertising S AL E S & C U S T O M E R S U C C E S
Slide 13: Financial Results
Financial Results 13
Slide 14: FY & Q4 2021 Financial Highlights
FY & Q4 2021 FINANCIAL HIGHLIGHTS 2021 YOY REVENUE REVENUE GROWTH $227 $76 53% $149 $56 Q4 2021 YOY 53% REVENUE GROWTH $114 64% 31% $34 34% ($ in Millions) 34% 15% Q4 2021 YOY 9% REVENUE GROWTH EXCLUDING POLITICAL FY'19 FY'20 FY'21 Q4'19 Q4'20 Q4'21 Revenue YoY Revenue Growth % 40% 14
Slide 15: Increasing Profitability
INCREASING PROFITABILITY GAAP NET INCOME 1 $57 $28 $19 Net Income $27 33% 37% 25% $4 Net Income $7 18% Margin % 6% 12% FY'19 FY'20 FY'21 Q4'19 Q4'20 Q4'21 Adj. EBITDA2 120% $96 100% 90% $39 100% 80% 70% $27 80% 60% Adjusted $50 50% 60% EBITDA 42% $9 48% 51% $23 40% 34% 30% 40% Adjusted EBITDA 20% 20
Slide 16: Strong, Diversified Advertiser Spend Growth in Q4 2021
STRONG, DIVERSIFIED ADVERTISER SPEND GROWTH IN Q4 2021 ADVERTISERS PLACING YOY AD SPEND GROWTH ADS ON OUR PLATFORM OF TOP 10 AD VERTICALS 60,000+ 50%+ 16
Slide 17: Strong Revenue Growth Across Channels in Q4 2021
STRONG REVENUE GROWTH ACROSS CHANNELS IN Q4 2021 YOY MOBILE & YOY CTV REVENUE YOY DESKTOP OMNICHANNEL VIDEO1 GROWTH REVENUE GROWTH REVENUE GROWTH 41% 6X+ 26% 1 Omnichannel video is the sum of online video plus CTV/OTT 17
Slide 18: Growing Revenue Visibility and Predictability
GROWING REVENUE VISIBILITY AND PREDICTABILITY N E T D O L L AR - B AS E D R E T E N T I O N 1 Expanded Usage from Buyers Via Supply Path 149% Optimization 122% 109% Expanded Usage from Publishers Via Land & Expand Strategy FY19 FY20 FY21 1 Net dollar-based retention is calculated by starting with th
Slide 19: Owned & Optimized Infrastructure Driving Down Unit Costs
OWNED & OPTIMIZED INFRASTRUCTURE DRIVING DOWN UNIT COSTS WHILE IMPROVING CUSTOMER OUTCOMES AD IMPRESSIONS COST OF REVENUE PER ONE MILLION AD IMPRESSIONS 92 $1.12 +96% ~50% +69% 50 28 In Trillions $0.57 FY'19 FY'20 FY'21 Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 19
Slide 20: Robust Gross Margins
ROBUST GROSS MARGINS DRIVERS $169 High marginal profitability $59 from structural leverage: 200% ▪ Scale efficiencies from $108 $45 150% continued reduction in $78 cost of revenue per million $25 100% impressions processed 72% 74% 80% 78% ($ in Millions) 68% 73% ▪ Increased infrastructure 50% utiliz
Slide 21: Operating Expenses: Investing for Growth
OPERATING EXPENSES: INVESTING FOR GROWTH 70% $50,000.00 70% 61% DRIVERS $160,000 56% $45,000.00 $140,000 51% 48% 50% 50% ▪ Increased headcount by $40,000.00 40% 41% $120,000 $110 $35,000.00 30% with focus on 30% $31 30% $100,000 $30,000.00 technical and go-to-market $36 $10 teams $76 10% $25,000.00
Slide 22: GAAP and Non-GAAP Diluted Earnings Per Share
GAAP AND NON-GAAP DILUTED EARNINGS PER SHARE GAAP NET INCOME1 $57 $1.30 $28 $1.10 $1.00 $27 $0.90 $19 Net Income $0.70 $0.50 $0.46 $0.50 $0.34 $7 $0.30 $4 GAAP Diluted EPS 3 $0.10 $0.04 $0.06 $(0.10) FY'19 FY'20 FY'21 Q4'19 Q4'20 Q4'21 $1.20 NON-GAAP NET INCOME2 $65 $1.00 $27 $0.80 $1.14 $20 Non-GAA
Slide 23: Delivering Cash Flow
DELIVERING CASH FLOW NET CASH PROVIDED DRIVERS BY OPERATING ACTIVITIES ▪ Workflow automation $89 ▪ Continuous optimization of infrastructure (software and hardware) ▪ Offshore R&D leverage $35 ▪ Focus on profitable publishers ($ in Millions) $24 and ad impressions ▪ Efficient capacity expansion to c
Slide 24: 2022 Guidance
2022 GUIDANCE Q1 2022 FY 2022 ($ in Millions) Low High Low High R e ve n u e $53 $55 $282 $286 Y/Y% 23% 27% 24% 26% Ad j u s t e d E B I T D A $14 $16 $101 $106 Ad j u s t e d E B I T D A M a r g i n 27% 29% 36% 37% Note: Numbers rounded for presentation purposes We expect FY 2022 CapEx to be in the
Slide 25: Focus on Customer Value & Usage-Based Model
PUBMATIC’S FOCUS ON CUSTOMER VALUE & USAGE -BASED MODEL SET FOUNDATION FOR FUTURE GROWTH ADVERTISERS CUSTOMERS AGENCIES PUBLISHERS DESKTOP DISPLAY MOBILE WEB MOBILE APP DIGITAL VIDEO CTV A D F O R M AT S A N D D E V I C E S Note: Chart does not depict underlying data, but is intended to illustrate t
Slide 26: Appendix
Appendix 26
Slide 27: Non-GAAP Reconciliation – Adjusted EBITDA
NON-GAAP RECONCILIATION – ADJUSTED EBITDA ($ in Millions) Three Months Ended December 31, Fiscal Year Ended December 31, 2019 2020 2021 2019 2020 2021 Net Income $4.1 $18.8 $28.2 $6.6 $26.6 $56.6 Add back (deduct): Stock-Based Compensation $0.5 $1.1 $3.6 $2.0 $3.6 $14.1 Impairment of Internal Use So
Slide 28: Non-GAAP Net Income Reconciliation
NON-GAAP NET INCOME RECONCILIATION ($ in Millions, except for Non-GAAP Diluted EPS1 ) Three Months Ended December 31, Fiscal Year Ended December 31, 2019 2020 2021 2019 2020 2021 Net Income $4.1 $18.8 $28.2 $6.6 $26.6 $56.6 Add back (deduct): Stock-Based Compensation $0.5 $1.1 $3.6 $2.0 $3.6 $14.1 U