PubMatic, Inc.

Previous wording

Our net dollar-based retention rate equals the Current Period Revenue divided by Prior Period Revenue. Our net dollar-based retention rate was 102% for the trailing twelve months ended March 31, 2025 and 106% for the trailing twelve months ended March 31, 2024.

Current wording

Our net dollar-based retention rate equals the Current Period Revenue divided by Prior Period Revenue. Our net dollar-based retention rate was 102% for the trailing twelve months ended June 30, 2025 and 108% for the trailing twelve months ended June 30, 2024.

Previous wording

We focus on monetizing digital impressions by coordinating over a hundred billion real-time auctions and nearly a trillion bids globally on a daily basis, using our specialized cloud software, machine learning algorithms, and scaled transaction infrastructure. Valuable ad impressions are transparent and data rich, viewable by humans, and verifiable. Each ad impression we auction consists of 665 independent data parameters, which can yield valuable insights if recorded and analyzed properly. This processing of voluminous data for each ad impression must occur in less than half a second as consumers expect a seamless digital ad experience. We continually assess impressions from new and existing publishers through a rigorous validation process. We add or remove impressions from our platform based on an assessment of the projected value of the impressions, which is influenced by the type of publisher and its related consumers, as well as the potential volume of monetizable impressions and ad format types, such as digital video. We continuously create and iterate algorithms that leverage vast datasets flowing through our infrastructure to improve the liquidity in our marketplace. Our ability to drive successful outcomes in the real-time auction process on behalf of our publishers and buyers will affect our operating results.

Current wording

We focus on monetizing digital impressions by coordinating over a hundred billion real-time auctions and nearly a trillion bids globally on a daily basis, using our specialized cloud software, machine learning algorithms, and scaled transaction infrastructure. Valuable ad impressions are transparent and data rich, viewable by humans, and verifiable. Each ad impression we auction consists of 684 independent data parameters, which can yield valuable insights if recorded and analyzed properly. This processing of voluminous data for each ad impression must occur in less than half a second as consumers expect a seamless digital ad experience. We continually assess impressions from new and existing publishers through a rigorous validation process. We add or remove impressions from our platform based on an assessment of the projected value of the impressions, which is influenced by the type of publisher and its related consumers, as well as the potential volume of monetizable impressions and ad format types, such as digital video. We continuously create and iterate algorithms that leverage vast datasets flowing through our infrastructure to improve the liquidity in our marketplace. Our ability to drive successful outcomes in the real-time auction process on behalf of our publishers and buyers will affect our operating results.

Previous wording

Our recent growth has been driven by a variety of factors including increased access to mobile web (display and video) and mobile app (display and video) impressions and desktop video impressions. Our performance is affected by our ability to maintain and grow our access to valuable ad impressions from current publishers as well as through new relationships with publishers. In March 2025, our platform processed approximately 842 billion ad impressions daily, each in a fraction of a second.

Current wording

Our recent growth has been driven by a variety of factors including increased access to mobile web (display and video) and mobile app (display and video) impressions and desktop video impressions. Our performance is affected by our ability to maintain and grow our access to valuable ad impressions from current publishers as well as through new relationships with publishers. In June 2025, our platform processed approximately 854 billion ad impressions daily, each in a fraction of a second.

Previous wording

Revenue for the three months ended March 31, 2025 decreased by $2.9 million, or 4%, compared to the three months ended March 31, 2024. Our revenues were primarily driven by impressions processed on our platform, new revenue streams, and growth in customer relationships. These were negatively impacted by bidding methodology changes implemented by one of our buyers in 2024 resulting in a year over year decline in revenues.

Current wording

Revenue for the three months ended June 30, 2025 increased by $3.8 million, or 6%, compared to the three months ended June 30, 2024. Revenue for the six months ended June 30, 2025 increased by $1.0 million, or 1%, compared to the six months ended June 30, 2024. Our revenues were primarily driven by impressions processed on our platform, new revenue streams, and growth in customer relationships.

Previous wording

As of March 31, 2025, we served approximately 1,950 publishers and app developers worldwide on our platform, compared to approximately 1,800 publishers and app developers worldwide as of March 31, 2024. For purposes of our publisher count, we aggregate multiple business accounts from separate divisions, segments or subsidiaries into a single “master” publisher based on our assessment of the related nature of the group.

Current wording

As of June 30, 2025, we served approximately 1,960 publishers and app developers worldwide on our platform, compared to approximately 1,800 publishers and app developers worldwide as of June 30, 2024. For purposes of our publisher count, we aggregate multiple business accounts from separate divisions, segments or subsidiaries into a single “master” publisher based on our assessment of the related nature of the group.

Previous wording

We expect our revenues to be affected by macroeconomic conditions for the remainder of 2025, and will continue to be impacted by the bidding methodology changes implemented by one of our buyers in the near term. The magnitude of these impacts on our future revenues is difficult to predict.

Current wording

We expect our revenues to be affected by macroeconomic conditions for the remainder of 2025, and negatively impacted in the near term by recent platform changes implemented by one of our large DSP buyers. The magnitude of these impacts on our future revenues is difficult to predict.

Previous wording

Cost of revenue increased $0.2 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024, primarily due to a $0.5 million increase in depreciation and amortization, offset by a $0.4 million decrease in personnel costs. Overall, our cost of revenue per million impressions processed for the three months ended March 31, 2025 decreased by approximately 22% compared to the three months ended March 31, 2024.

Current wording

Cost of revenue increased $1.5 million for the three months ended June 30, 2025 compared to the three months ended June 30, 2024, primarily due to a $0.8 million increase in data center costs and a $0.5 million increase in depreciation and amortization. Overall, our cost of revenue per million impressions processed for the three months ended June 30, 2025 decreased by approximately 17% compared to the three months ended June 30, 2024.

Previous wording

Our gross margin of 60% for the three months ended March 31, 2025 decreased compared to 62% for the three months ended March 31, 2024 primarily due to a decrease in revenue.

Current wording

Our gross margin of 63% for the three months ended June 30, 2025 remained flat compared to the three months ended June 30, 2024, and our gross margin of 61% for the six months ended June 30, 2025 decreased compared to 62% for the six months ended June 30, 2024 primarily due to an increase in depreciation and amortization, and hosting expenses from capacity expansion and related projects.

Previous wording

The increase in technology and development costs for the three months ended March 31, 2025 was primarily due to an increase of $0.9 million in personnel costs as headcount increased, partially offset by an increase of $0.2 million related to the capitalization of internal-use software.

Current wording

The increase in technology and development costs for the three months ended June 30, 2025 was primarily due to an increase of $0.5 million in personnel costs as headcount increased.

Previous wording

We expect technology and development expenses to continue to increase in 2025 compared to 2024 in absolute dollars, primarily due to additional headcount and investment in technological innovation.

Current wording

We expect technology and development expenses to continue to increase in 2025 compared to 2024 in absolute dollars, primarily due to employee compensation and investment in technological innovation.

Previous wording

Sales and marketing costs for the three months ended March 31, 2025 increased primarily due to a $0.9 million increase in personnel costs and a $0.9 million increase in travel and entertainment costs.

Current wording

Sales and marketing costs for the three months ended June 30, 2025 increased primarily due to a $1.7 million increase in personnel costs and a $0.3 million increase in facilities costs.

Previous wording

General and administrative expense increased for the three months ended March 31, 2025 primarily due to a $0.4 million increase in personnel costs.

Current wording

General and administrative expense increased for the three months ended June 30, 2025 primarily due to a $0.4 million increase in personnel costs and a $0.4 million increase in professional services.

Previous wording

Interest income decreased for the three months ended March 31, 2025 compared to the prior year period due to a decrease in the Company’s interest-bearing securities investments.

Current wording

Interest income decreased for the three and six months ended June 30, 2025 compared to the prior year period due to a decrease in the Company’s interest-bearing securities investments.

Previous wording

Other income (expense), net decreased for the three months ended March 31, 2025 due to foreign exchange rate fluctuations.

Current wording

Other income (expense), net decreased for the three and six months ended June 30, 2025. The three and six months ended June 30, 2024 included $4.0 million recognized as other income from the Google Privacy Sandbox initiative, in connection with their previous initiative to phase out the use of third-party cookies. Meanwhile, the three and six months ended June 30, 2025, reflected a loss due to foreign exchange rate fluctuations.

Previous wording

The difference between the effective tax rate for the three months ended March 31, 2025 of 16% and the federal statutory income tax rate of 21% was related to tax benefits from foreign-derived intangible income (FDII), research tax credits and deductions for equity awards, partially offset by nondeductible stock-based compensation, and Section 162(m) limitation on the tax deductibility of officers' compensation. The effective income tax rate of 9% for the three months ended March 31, 2024 was related to the tax benefit from FDII, research tax credits, and deductions for equity awards, partially offset by nondeductible stock-based compensation and Section 162(m) limitation on the tax deductibility of officers compensation.

Current wording

The difference between the effective tax rate for the six months ended June 30, 2025 of 16% and the federal statutory income tax rate of 21% was related to tax benefits from FDII, research tax credits and deductions for equity awards, partially offset by nondeductible stock-based compensation, and Section 162(m) limitation on the tax deductibility of officers’ compensation. The effective income tax rate of (51)% for the six months ended June 30, 2024 was related to tax benefits from foreign-derived intangible income, research tax credits, and deductions for equity awards, partially offset by nondeductible stock-based compensation and Section 162(m) limitation on the tax deductibility of officers compensation.

Previous wording

We have financed our operations and capital expenditures primarily through utilization of cash generated from operations as well as sales of equity securities. As of March 31, 2025, we had cash, cash equivalents, and marketable securities of $144.1 million and net working capital, consisting of current assets less current liabilities, of $155.1 million.

Current wording

We have financed our operations and capital expenditures primarily through utilization of cash generated from operations as well as sales of equity securities. As of June 30, 2025, we had cash, cash equivalents, and marketable securities of $117.6 million and net working capital, consisting of current assets less current liabilities, of $124.2 million.

Previous wording

In February 2023, our board of directors authorized the 2023 Repurchase Program which was to terminate as of December 31, 2024 (as amended, the “2023 Repurchase Program”). In February 2024, our board of directors authorized an additional $100.0 million for repurchases under the 2023 Repurchase Program, and extended the termination date to December 31, 2024 (the “2024 Repurchase Program Extension”). During the three months ended March 31, 2025, we repurchased 339,000 shares of Class A common stock under the 2023 Repurchase Program for an aggregate purchase price of $3.6 million. As of March 31, 2025, $36.8 million remained available for future share repurchases under the 2023 Repurchase Program.

Current wording

In February 2023, our board of directors authorized the 2023 Repurchase Program which was to terminate as of December 31, 2024 (as amended, the “2023 Repurchase Program”). In February 2024, our board of directors authorized an additional $100.0 million for repurchases under the 2023 Repurchase Program, and extended the termination date to December 31, 2025 (the “2024 Repurchase Program Extension”). In May 2025, our board of directors authorized an additional $100.0 million for repurchases under the 2023 Repurchase Program, and extended the termination date to December 31, 2026 (the “2025 Repurchase Program Extension”). During the six months ended June 30, 2025, we repurchased 3,853,342 shares of Class A common stock under the 2023 Repurchase Program for an aggregate purchase price of $43.6 million. As of June 30, 2025, $96.8 million remained available for future share repurchases under the 2023 Repurchase Program.

Previous wording

Our cash flows from operating activities are primarily influenced by growth in our operations, increases or decreases in collections from our buyers and related payments to our publishers, as well as our investment in personnel to support the anticipated growth of our business. Cash flows from operating activities have been affected by changes in our working capital, particularly changes in accounts receivable and accounts payable. The timing of cash receipts from buyers and payments to publishers can significantly impact our cash flows from operating activities. For example, we noted an impact to our operating cash flows for the three months ended March 31, 2025 as a result of shifts in spend from one of our large DSPs. In addition, we expect seasonality to impact quarterly cash flows from operating activities.

Current wording

Our cash flows from operating activities are primarily influenced by growth in our operations, increases or decreases in collections from our buyers and related payments to our publishers, as well as our investment in personnel to support the anticipated growth of our business. Cash flows from operating activities have been affected by changes in our working capital, particularly changes in accounts receivable and accounts payable. The timing of cash receipts from buyers and payments to publishers can significantly impact our cash flows from operating activities. In addition, we expect seasonality to impact quarterly cash flows from operating activities.

Previous wording

For the three months ended March 31, 2024, net cash provided by operating activities of $24.3 million resulted primarily from adjustments for non-cash expenses of $16.1 million, including $11.2 million for depreciation and amortization and $9.1 million for stock-based compensation, a decrease in accounts receivable of $72.2 million, offset by a net loss of $2.5 million, a decrease in accounts payable of $58.4 million, and a decrease in accrued liabilities of $1.8 million.

Current wording

For the six months ended June 30, 2025, net cash provided by operating activities of $30.5 million resulted primarily from adjustments for non-cash expenses of $36.6 million, including $23.5 million for depreciation and amortization and $19.5 million for stock-based compensation, a decrease in accounts receivable of $41.4 million, offset by a net loss of $14.7 million, a decrease in accounts payable of $25.9 million, and a decrease in accrued liabilities of $5.6 million.

Previous wording

For the three months ended March 31, 2025, net cash provided by operating activities of $15.6 million resulted primarily from adjustments for non-cash expenses of $17.9 million, including $11.7 million for depreciation and amortization and $9.7 million for stock-based compensation, a decrease in accounts receivable of $75.7 million, a decrease in prepaid expenses and other assets of $5.7 million, offset by a net loss of $9.5 million, a decrease in accounts payable of $62.6 million, and a decrease in accrued liabilities of $11.3 million.

Current wording

For the six months ended June 30, 2024, net cash provided by operating activities of $36.2 million resulted primarily from adjustments for non-cash expenses of $33.6 million, including $22.5 million for depreciation and amortization and $18.8 million for stock-based compensation, a decrease in accounts receivable of $23.9 million, offset by a net loss of $0.5 million, an increase in prepaid expenses and other assets of $3.4 million, a decrease in operating lease liabilities of $3.0 million and a decrease in accounts payable of $14.8 million.

Previous wording

For the three months ended March 31, 2025, we used $10.1 million in investing activities, consisting of $1.4 million in purchases of property and equipment (primarily data center infrastructure), and $6.9 million of investments in capitalized internal-use software, and a net increase in investments of marketable securities of $1.7 million.

Current wording

For the six months ended June 30, 2025, we used $0.1 million in investing activities, consisting of $2.8 million in purchases of property and equipment (primarily data center infrastructure), and $11.2 million of investments in capitalized internal-use software, offset by a net increase in investments due to maturities of marketable securities of $13.8 million.

Previous wording

For the three months ended March 31, 2024, we used $3.9 million in investing activities, consisting of $0.8 million in purchases of property and equipment (primarily data center infrastructure), and $7.2 million of investments in capitalized internal-use software, and a net decrease in investments of marketable securities of $4.2 million.

Current wording

For the six months ended June 30, 2024, we used $5.9 million in investing activities, consisting of $1.5 million in purchases of property and equipment (primarily data center infrastructure), and $11.5 million of investments in capitalized internal-use software, offset by a net increase in investments due to maturities of marketable securities of $7.2 million.

Previous wording

For the three months ended March 31, 2025, net cash used in financing activities of $4.5 million was primarily due to purchases of treasury stock of $5.0 million, including the prepayment of funds for future purchases of approximately $1.4 million, offset by proceeds from employee stock option exercises of $0.6 million.

Current wording

For the six months ended June 30, 2025, net cash used in financing activities of $41.2 million was primarily due to purchases of treasury stock of $43.6 million, offset by proceeds from employee stock option exercises of $1.2 million and proceeds from the ESPP of $1.4 million.

Previous wording

For the three months ended March 31, 2024, net cash used in financing activities of $18.7 million was primarily due to purchases of treasury stock of $17.5 million, including the prepayment of funds for future purchases of approximately $1.8 million, and payment of a business combination indemnification holdback of $2.1 million, offset by proceeds from employee stock option exercises of $0.9 million.

Current wording

For the six months ended June 30, 2024, net cash used in financing activities of $35.4 million was primarily due to purchases of treasury stock of $35.9 million, payment of a business combination indemnification holdback of $2.1 million, offset by proceeds from employee stock option exercises of $1.3 million and proceeds from the ESPP of $1.5 million.

Previous wording

As of March 31, 2025, we had $5.3 million of long-term income tax liabilities, including interest, related to uncertain tax positions. Because of the high degree of uncertainty regarding the settlement of these liabilities, we are unable to estimate the years in which future cash outflows may occur.

Current wording

As of June 30, 2025, we had $5.1 million of long-term income tax liabilities, including interest, related to uncertain tax positions. Because of the high degree of uncertainty regarding the settlement of these liabilities, we are unable to estimate the years in which future cash outflows may occur.