Slide 1: Q2 2024 Earnings Presentation
Q2 2024 Earnings Presentation A u g u st 8 , 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 and adjusted EBITDA for the third quarter of 2024 and revenue, adjusted EBITDA margin and capex for the full year 2024, our
Slide 3: Q2 2024 Financial Highlights
Q 2 2 0 24 FIN ANC IAL HI GH LIG HT S W H AT W E D O REVENUE GA A P N E T IN C O ME PubMatic is $67.3M $2.0M building a better 6% YOY 3 % MA R G IN 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 $21.1M $11.9M 3 1%
Slide 4: Fundamental market shifts usher in a new era
As more premium streaming inventory becomes available, Fundamental publishers and media buyers market shifts are seeking efficient scale usher in a new era for programmatic advertising on the Ad buyers continue to shift open internet budgets away from walled gardens, driving some to open up their wa
Slide 5: PubMatic's role in building the supply chain of the future
P U B M AT I C ’ S R O L E I N B U I L D I N G T H E S U P P LY C H A I N O F T H E F U T U R E 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 NCIE S MED IA DA T A & AU DI EN CES NE TW ORKS ID
Slide 6: 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 SPO SHARE OF TOTAL Consumer health company signed ACTIVITY ON OUR PLA TFOR M global SPO deal to optimize media spend and reduce carbon footprint > 50% OMG Netherlands expanded SPO 41% relationship with the adoption
Slide 7: Streaming media and connected TV fuel revenue growth
S TR EA MIN G ME DIA AN D C ON NE CTE D TV FUEL REVENUE GROWTH Premium Indian streaming platform selected PubMatic as a preferred SSP YOY INCREASE IN CTV M ON E TI Z E D I MP R E S S IO N S I N Q 2 20 24 Integrated into the newly announced Roku Exchange, NEARLY 2X maximizing demand for Roku’s stream
Slide 8: 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 Q2 20 24 Mobile App Ad Spending, Worldwide 1 $8 5 $8 4 $8 4 $8 4 $8 4 4,,, 3 $8 $8 3 $8 3 $8 3 $8 3 3,,, 1 $8 $8 3 $8 2 $8 2 $8 2 2,,, 2 $8 $8 2 $8 2 1,, 1 $8 $8 1 1,,, 4 $8 $
Slide 9: Commerce media companies continue to embrace PubMatic's sell-side technology
C O M M E R C E M E D I A C O M PA N I E S C O N T I N U E T O E M B R A C E P U B M AT I C ’ S S E LL - S ID E TE CH NO LO GY Indian ride-hailing service A C T IV E C OM ME R C E M E D IA P I PE L I N E O F monetizes onsite inventory and leverages OpenWrap for unified auctions across their app 100+
Slide 10: We continue to invest and innovate, unlocking new avenues for growth
HIGH I N N O VAT I O N MAR GIN DRIVE S REV ENUE VA L U E We continue to invest and innovate, unlocking new avenues for C U S TO M E R NEW VA L U E TA M growth C R E AT I O N E X PA N S IO N 10
Slide 11: Financial Highlights
Financial Highlights ▪
Slide 12: Q2 Financial Highlights
Q 2 FI NAN CIA L H IG HLI GH TS REV ENUE GRO WTH Y OY 1 6% REVENUE1 GRO SS PROFIT GRO SS PROFIT $67 GRO WTH Y OY $63 $ 42 10% $ 38 GAA P NET INCO ME $2.0M 3% MA RGIN ADJU STED EBITDA2 Q 2 '2 3 Q 2 '2 4 Q 2 '2 3 Q 2 '2 4 $21.1M 1 Q2 2024 revenue includes a several million-dollar impact from one DSP b
Slide 13: Q2 Quarterly Highlights
Q2 QUARTERLY HIGHLIGHTS Q2 2024 Revenue Excluding One DSP Buyer 1 ~10% YOY SPO Share of Activity on our Platform in Q2 2024 50%+ Growth in Monetized Impressions YOY 12% Revenue from Emerging Revenue Streams ~2X YOY Incremental impression capacity 25% YOY 1 Excludes a several million-dollar impact fr
Slide 14: Omnichannel platform fuels strong secular growth
OMNICHANNEL PLATFORM FUELS STRONG S E CUL AR GR OW TH DIMENSIONS OF P L AT F O R M D I V E R S I T Y ▪ Omnichannel OMNICHANNEL MOBILE RE VENUE Revenues VIDEO1 RE VENUE GROWTH YOY IN GROWTH YOY IN Q 2 20 2 4 Q 2 2024 Geographies 19% 12% 20%+ 20+ Ad Verticals T O TA L MOB IL E 2 MO BI LE AP P ONL Y 1
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- EFFIC IENCIE S Buyer-Fo cused Sellers Eff iciently Increasing Ca pacity Activate , Conne ct, Con vert , Open Wrap AI-Based Op timizat ion 15
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 $50,00. 0 $45 $46 DR IVER S $40,00. 0 $14 ▪ Q2 2024 includes targeted $19 investments and increased headcount in T&D and $30,00. 0 S&M $20,00. 0 $23 $20 ▪ Q2 2023 includes a $5.7M ($ in Millions) $10,00. 0 expense in G&A related to $7 $
Slide 17: Net income and diluted earnings per share
17 NE T IN CO ME AN D D ILU TE D E A RNI NG S P ER S HA RE NE T INCOME1 $9 .7 GAAP Net In com e ($ in Millions) $2 .0 $0 .2 Non-GAAP Net In com e 2 $( 5.7) Q 2 '2 3 Q 2 '2 4 DILU TED EA RNIN GS PER SH ARE $ 0.1 7 GAAP Diluted $0 .04 EPS 3 ($ in Millions) $ 0.0 0 Non-GAAP Diluted EPS 2,3 $ ( 0 . 11 )
Slide 18: Focus on cash flow
FOCUS ON CASH FLOW NE T CASH PROVIDE D FRE E BY OPE RATIN G ACTIVITIES CASH FLOW1 $166M Q2’24 END CA SH $15.8 A N D M A R K E TA B L E SEC URITIES $11.9 $10.8 $6.9 $100.0M CAS H USED TO ($ in Millions) REP URCHAS E 6.1 MILLION CLAS S A COM MON SHAR ES (Feb. 1, 2023 - July 31, 2024) Q2'2 3 Q2'2 4 Q2'
Slide 19: Q3 and FY 2024 Guidance
19 2 0 2 4 Q3 AND FY G UID ANC E Q3 20 24 F u l l Ye a r 2 0 2 4 ($ in Millions) Low High Low High R e ve nu e $65 $67 $288 $292 Ye a r o v e r Ye a r G r o w t h % 3% 5% 8% 10% A d j u s te d E B I T D A $15 $17 $87 $91 A d j u s te d E B I T D A M a r g i n 23% 25% 30% 31% Note: Numbers round ed f
Slide 20: Long term competitive advantages
20 L O N G T E R M C O M P E T I T I V E A D VA N TA G E S 1 Revenue Growth Ahead of Market Growth 2 Differentiated Adjusted EBITDA and Free Cash Flow Generation 3 Strong Publisher and Buyer Relationships 4 Diversified Omnichannel Platform 5 Durable Business Model 20
Slide 21: Appendix
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Slide 22: Non-GAAP Reconciliation – Adjusted EBITDA & Non-GAAP Net Income (Loss)
N O N - G A A P R E C O N C I L I AT I O N – A D J U S T E D E B I T D A & N O N - G A A P N E T I NCOME (LOSS) ($ in Thousands) Q2’24 Q1’24 Q4’23 Q3'23 Q2'23 Q1’23 Q4’22 Q3’22 Q2’22 Net income (loss) $1,971 ($2,454) $18,702 $1,774 ($5,724) ($5,871) $12,781 $3,326 $7,819 Add back (deduct): Stock-bas
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 except per share data) Q2’24 Q1’24 Q4’23 Q3'23 Q2'23 Q1’23 Q4’22 Q3’22 Q2’22 Net income (loss) $1,971 ($2,454) $18,702 $1,774 ($5,724) ($5,871) $12,781 $3,326 $7,819 Unrealiz
Slide 24: Free Cash Flow Reconciliation
F R E E C A S H F L O W R E C O N C I L I AT I O N ($ in Millions) Three Months Ended June 30, 2024 2023 2022 Net Cash provided by Operating Activities $11.9 $15.8 $20.5 Deduct: Purchases of Property and Equipment (0.7) (1.1) (12.2) Capitalized Software Development Costs (4.3) (3.9) (2.5) Free Cash