Pubmatic, Inc. · NASDAQ:PUBM
Pubmatic — Q3 2023 Earnings Presentation
23 slides from Pubmatic's earnings presentation, Nov 8, 2023
Slide 1: Q3 2023 Earnings Presentation
Q3 2023 Earnings Presentation November 8, 2023 © 2 0 2 3 P UB M A T I C, I NC. P UB M A T I C I S A RE G I S T E RE D T RA DE M A RK O F P UB M A T I C, I NC. , U. S . P A T . & T M . O FF. A ND O T HE R CO UNT RI E S . O T HE R T RA DE M A RK S A RE T HE P RO P E RT I E S O F T HE I R RE S P E CT I
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 Q4 2023 and full-year 2023 operating results or financial performance, market size and growth opportunities, the calculation of certain of our key financia
Slide 3: Q3 2023 Financial Highlights
M ISSION PubMatic Fuels the Endless Potential of Internet Content Creators Q3 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 $63.7M $1.8M $18.2M $23.8M - 1 % YO Y 3 % MA R GIN 2 9 % MA R GIN 1 Adjusted EBITDA and Adjusted
Slide 4: Sell-side technology is more important than ever, fueling long-term growth opportunities
S E L L - S I D E T E C H N O L O G Y I S M O R E I M P O R T AN T T H AN E V E R , F U E L I N G L O N G - T E R M G R O W T H O P P O R T U N I T I E S F O R P U B M AT I C As buyers em brace programmatic Programmatic autom ation for CTV, sell-side technology Direct Deals offers direct access at s
Slide 5: Building technology for the future creates opportunities for market share expansion
B U I L D I N G T E C H N O L O G Y F O R T H E F U T U R E C R E AT E S O P P O R T U N I T I E S F O R M AR K E T S H AR E E X P AN S I O N A C C E L E R AT E D PA C E OF I N N OVAT I ON F U E L S N E W P R OD U C T D E V E L OP M EN T HIG H M ARG IN I N N O V AT I O N RE V E NUE D RIV E S VAL UE
Slide 6: Strong pipeline for Activate drives supply path optimization growth
S T R O N G P I P E L I N E F O R AC T I V AT E D R I V E S S U P P L Y P AT H O P T I M I Z AT I O N G R O W T H BRANDS & AGENCIES ARE SEEING SUCCESS WITH E S T IM AT E D T A M E X P A N S I O N 1 F R O M A C T I VAT E , D R I V I N G E X PA N D E D U S A G E OF T H E P L AT F OR M $65 BILLION S P
Slide 7: Supply path optimization helps strengthen direct publisher relationships, particularly in CTV
S U P P L Y P AT H O P T I M I Z AT I O N H E L P S S T R E N G T H E N D I R E C T P U B L I S H E R R E L AT I O N S H I P S , P AR T I C U L AR L Y I N C O N N E C T E D T V M A J O R VI D E O & P R I VAT E M A R K E T P L A C E ( P M P ) & C T V P UB L I S HE R S P R O G R A M M AT I C G UA R A
Slide 8: Track record of building tech for publishers serves as launch pad for commerce media offering
T R AC K R E C O R D O F B U I L D I N G T E C H F O R P U B L I S H E R S S E R V E S AS L AU N C H P AD F O R C O M M E R C E M E D I A O F F E R I N G C OR E P U B L I S H E R S T R E N G T H S F U E L I N G C OM M E R C E M E D I A G R OW T H is a unified technology O m nicha nnel Mo n e t i zat
Slide 9: Accelerated interest in cookie alternatives across the open internet
AC C E L E R AT E D I N T E R E S T I N C O O K I E AL T E R N AT I V E S AC R O S S T H E O P E N I N T E R N E T C R E AT E S O P P O R T U N I T I E S F O R C O N N E C T A LT E R NAT I VE ID 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 TA R G E T I NG S I G NA L S
Slide 10: PubMatic is well positioned to deliver customer value in the supply chain of the future
P U B M AT I C I S W E L L P O S I T I O N E D T O D E L I V E R C U S T O M E R V AL U E I N T H E S U P P L Y C H AI N O F T H E F U T U R E D E MAN D S ID E P L AT F O R M S T E C H N O L O G Y P L AT F O R M YI E L D O P T I MI Z AT I O N | Q U AL I T Y | I N VE N T O R Y C U R AT I O N P U B L
Slide 11: Financial Results
Financial Results 11
Slide 12: Q3 Financial Highlights
Q 3 F I N AN C I AL H I G H L I G H T S R E VE NUE G A A P NE T I NC O M E $58.1 $64.5 $63.7 $1.8M 3 % NE T I NC O M E M AR G I N A D J US T E D E B I T D A 1 $18.2M 2 9 % AD J . E B I T D A M AR G I N ($ in Millions ) FREE CASH FLOW 2 Q3'21 Q3'22 Q3'23 $17.2M 1 Adjusted EBITDA and Adjusted EBITDA M
Slide 13: Growth in monetized impressions delivered revenue ahead of guidance
GROWTH IN M ONETIZED IM PRESSIONS DELIVERED REVENUE AH E AD O F G U I D AN C E OMNIC H A N N E L M A I N TA I N E D D I S P L AY R E V E N U E VID E O R E VE NUE S T R ONG GR OW T H EXCEEDED EXCEEDED A MONG T OP 1 0 A D E X P E C T AT I O N S E X P E C T A T IONS VE RT ICAL S 13
Slide 14: Owned and operated infrastructure driving down unit costs while improving customer outcomes
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 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 PROCESSED 20%+ Y O Y INC RE AS E IN AD +33% I M P R E S S I O N C A P A C IT Y I N Q3 2023 +76% 56.0 42.1 9% (In Trillions) 23.9 Y O Y RE D UC T ION IN C O ST
Slide 15: Operating expenses: targeted investments for growth
O P E R AT I N G E X P E N S E S : T AR G E T E D I N V E S T M E N T S F O R G R O W T H $45,00 $40,00 $38 Q3'23 INVEST M ENT $33 ▪ Continued innovation $35,00 $12 $30,00 $28 investment with new $12 $25,00 engineers added in India $9 $20,00 Development Center $20 $15,00 ▪ Incremental Martin $16 $15
Slide 16: GAAP and non-GAAP net income and 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 NE T INC OME $16.7 Net Income $13.5 Non-GAAP Net Income 1 $12.2 $ in Millions $7.6 $3.3 $1.8 Q3'21 Q3'22 Q3'23 GA A P A ND NON- GA A P D IL UT E D E A R NINGS P E R S HA R E $0.30 GAAP Diluted EPS 2 $0.24 N
Slide 17: 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 STOCK B Y OP E R A T ING CASH FLOW 1 R E P UR C HA S E ACT IVIT IE S PROGRAM (AS OF 10/31/23) $28.1 $23.8 $17.2 $10.7 $47M C A S H US E D T O ($ in Millions ) R E P UR C HA S E 3 . 3 M S HA R E S (~6 % FDSO2) Q3'22 Q3'23 Q3'22 Q3'23 1
Slide 18: Q4 2023 Guidance
Q 4 2 0 2 3 G U I D AN C E Q4 2 0 2 3 ($ in Millions ) Low High Revenue $76 $80 Adjusted EBITDA $32 $35 Adjusted EBITDA M argin 42% 44% Note: Numbers rounded for presentation purposes FY 2023 we expect CapEx to be in the range of $10M - $13M (compared to $36M in 2022, ~70% YoY reduction) A lthough w
Slide 19: 2023 Operating Priorities
2 0 2 3 O P E R AT I N G P R I O R I T I E S TA R G E T E D DRIVE COS T GE NE R A T E INVE S T ME NT S T O S T R UC T UR E S IGNIF IC A NT F R E E A C C E L E R AT E E F F I C I E N C I E S T H AT CASH FLOW S R E VE NUE S W HE N A D L EAD T O MARGIN S P E N D S TA B I L I Z E S E X PA N S I O N 19
Slide 20: Appendix
Appendix 20
Slide 21: Non-GAAP Financial Measures (Quarterly)
N O N - G AA P F I N AN C I AL M E AS U R E S ( Q U AR T E R L Y ) ($ in Thousands) Q3 '23 Q2 '23 Q1’23 Q4’22 Q3’22 Q2’22 Q1’22 Q4’21 Q3’21 Net income (loss) $1,773 ($5,724) ($5,871) $12,781 $3,326 $7,819 $4,779 $28,239 $13,526 Add back (deduct): Stock-based compensation 7,199 7,266 7,059 5,464 4,65
Slide 22: Non-GAAP Financial Measures (Quarterly)
N O N - G AA P F I N AN C I AL M E AS U R E S ( Q U AR T E R L Y ) ($ in Thousands) Q3 '23 Q2 '23 Q1’23 Q4’22 Q3’22 Q2’22 Q1’22 Q4’21 Q3’21 Net income (loss) $1,773 ($5,724) ($5,871) $12,781 $3,326 $7,819 $4,779 $28,239 $13,526 Unrealized (gain) loss on equity investments - - - - 6,405 915 (1,373) (
Slide 23: Free Cash Flow Reconciliation
F R E E C AS H F L O W R E C O N C I L I AT I O N ($ in Millions) Three Months Ended September 30, 2021 2022 2023 Net Cash provided by (used in) $26.4 $28.1 $23.8 Operating Activities Deduct: Purchases of Property and Equipment (11.0) (14.6) (2.9) Capitalized Software Development Costs (1.9) (2.8) (