PubMatic, Inc.
For the period ended Sep 30, 2025. Filed Nov 10, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2025 · Filed Nov 10, 2025
PUBM$17.81+6.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-06-30; filed 2025-08-11.
0001422930-25-000040
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-09-30; filed 2025-11-10.
0001422930-25-000050
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 106 previous paragraphs and 107 current paragraphs.
75 unchanged; 31 reworded; 1 added; 0 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 13 previous and 13 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (1)
Current report
(1)Litigation related expenses represents external legal fees and other expenses, net of insurance recoveries, associated with pending litigation that arose outside of the ordinary course of business. These costs related to a discrete matter, and are not representative of our underlying operating performance. We do not adjust for legal expenses incurred in our ordinary course of business.
Reworded paragraphs (31)
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 June 30, 2025 and 108% for the trailing twelve months ended June 30, 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 98% for the trailing twelve months ended September 30, 2025 and 112% for the trailing twelve months ended September 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 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.
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 703 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 June 2025, our platform processed approximately 854 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 September 2025, our platform processed approximately 980 billion ad impressions daily, each in a fraction of a second.
Previous wording
Cost of revenue consists of data center co-location costs, depreciation expense related to hardware supporting our platform, amortization expense related to capitalized internal-use software development costs, personnel costs, and allocated facilities costs. Personnel costs include salaries, bonuses, stock-based compensation, and employee benefit costs, and are primarily attributable to our cloud operations group, which maintains our servers, and our client operations group, which is responsible for the integration of new publishers and buyers and providing customer support for existing customers.
Current wording
Cost of revenue consists of data center co-location costs, depreciation expense related to hardware supporting our platform, amortization expense related to capitalized internal-use software development costs, personnel costs, and allocated facilities costs. Personnel costs include salaries, bonuses, stock-based compensation, and employee benefit costs, and are primarily attributable to our cloud operations group, which maintains our servers, as well as our client operations group, which is responsible for the integration of new publishers and buyers and providing customer support for existing customers.
Previous 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.
Current wording
Revenue for the three months ended September 30, 2025 decreased by $3.8 million, or (5)%, compared to the three months ended September 30, 2024. Revenue for the nine months ended September 30, 2025 decreased by $2.9 million, or (1)%, compared to the nine months ended September 30, 2024. Revenues for the three and nine months ended September 30, 2025 were primarily driven by impressions processed on our platform, new revenue streams, and growth in customer relationships. Revenues decreased as compared to the prior year primarily due to incremental political spend in the United States in 2024 during the three and nine months ended September 30, 2024. Revenues for the three and nine months ended September 30, 2025 also reflect the negative short-term impact of recent platform changes implemented by one of our large DSP buyers.
Previous 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.
Current wording
As of September 30, 2025, we served approximately 1,980 publishers and app developers worldwide on our platform, compared to approximately 1,900 publishers and app developers worldwide as of September 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
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.
Current wording
Cost of revenue remained flat for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. Overall, our cost of revenue per million impressions processed for the three months ended September 30, 2025 decreased by approximately 20% compared to the three months ended September 30, 2024.
Previous wording
Cost of revenue increased $1.6 million for the six months ended June 30, 2025 compared to the six months ended June 30, 2024, primarily due to a $1.0 million increase in depreciation and amortization and a $0.8 million increase in data center costs. Overall, our cost of revenue per impression processed for the six months ended June 30, 2025 decreased by approximately 20% compared to the six months ended June 30, 2024.
Current wording
Cost of revenue increased $1.5 million for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024, primarily due to a $1.6 million increase in data center costs. Overall, our cost of revenue per impression processed for the nine months ended September 30, 2025 decreased by approximately 20% compared to the nine months ended September 30, 2024.
Previous 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.
Current wording
Our gross margin of 63% for the three months ended September 30, 2025 decreased compared 64% for the three months ended September 30, 2024, and our gross margin of 62% for the nine months ended September 30, 2025 decreased compared to 63% for the nine months ended September 30, 2024 primarily due to a decrease in revenues.
Previous 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.
Current wording
The increase in technology and development costs for the three months ended September 30, 2025 was primarily due to an increase of $0.7 million in personnel costs.
Previous wording
The increase in technology and development costs for the six months ended June 30, 2025 was primarily due to an increase of $1.4 million in personnel costs as headcount increased.
Current wording
The increase in technology and development costs for the nine months ended September 30, 2025 was primarily due to an increase of $2.2 million in personnel costs.
Previous 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.
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.
Previous wording
Sales and marketing costs for the six months ended June 30, 2025 increased primarily due to a $2.7 million increase in personnel costs, a $0.9 million increase in travel and entertainment costs, and a $0.6 million increase in facilities costs.
Current wording
Sales and marketing costs for the nine months ended September 30, 2025 increased primarily due to a $4.3 million increase in personnel costs, a $0.8 million increase in travel and entertainment costs, and a $0.9 million increase in facilities costs.
Previous 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.
Current wording
General and administrative expense increased for the three months ended September 30, 2025 primarily due to a $0.2 million increase in personnel costs and a $0.1 million increase in professional services.
Previous wording
General and administrative expense increased for the six months ended June 30, 2025 primarily due to a $0.8 million increase in personnel costs, a $0.7 million increase in facilities costs, and a $0.4 million increase in property and other taxes.
Current wording
General and administrative expense increased for the nine months ended September 30, 2025 primarily due to a $1.0 million increase in personnel costs, a $0.8 million increase in facilities costs, and a $0.6 million increase in property taxes.
Previous wording
We expect general and administrative expenses to increase in 2025 compared to 2024 in absolute dollars primarily due to employee compensation.
Current wording
We expect general and administrative expenses to increase in 2025 compared to 2024 in absolute dollars primarily due to employee compensation and legal costs in connection with our civil action against Google.
Previous 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.
Current wording
Interest income decreased for the three and nine months ended September 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 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.
Current wording
Other income (expense), remained flat the three months ended September 30, 2025 compared to the three months ended September 30, 2024, and both periods reflected a loss due to foreign exchange rate fluctuations. Other income (expense), net for the nine months ended September 30, 2025 includes approximately $4.1 million in losses on foreign exchange rate fluctuations. Other income (expense), net for the nine months ended September 30, 2024 includes approximately $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.
Previous wording
The difference between the effective tax rate for the three months ended June 30, 2025 of 14% 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 17% for the three months ended June 30, 2024 was related to tax benefits from foreign-derived intangible income and research tax credits, partially offset by Section 162(m) limitation on the tax deductibility of officers compensation.
Current wording
There was no net difference between the effective tax rate for the three months ended September 30, 2025 of 21% and the federal statutory income tax rate of 21%, as the tax benefits from research tax credits and deductions for equity awards were offset by nondeductible stock-based compensation and Section 162(m) limitation on the tax deductibility of officers’ compensation. The effective income tax rate of (180)% for the three months ended September 30, 2024 was related to tax benefits from foreign-derived intangible income and research tax credits, partially offset by Section 162(m) limitation on the tax deductibility of officers compensation.
Previous 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.
Current wording
The difference between the effective tax rate for the nine months ended September 30, 2025 of 17% and the federal statutory income tax rate of 21% was related to tax benefits from 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 (116)% for the nine months ended September 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
On July 4, 2025, the U.S. enacted a budget reconciliation package commonly referred to as the One Big Beautiful Bill Act of 2025 (“OBBBA”), which contains a broad range of tax reform provisions affecting businesses, including the permanent reinstatement of bonus depreciation on qualified property and full expensing of domestic research and experimental expenditures. We are currently evaluating the full effects of the legislation on our consolidated financial statements. As the legislation was signed into law after the close of our second quarter, the impacts are not included in our operating results for the six months ended June 30, 2025.
Current wording
On July 4, 2025, the U.S. enacted a budget reconciliation package commonly referred to as the One Big Beautiful Bill Act of 2025 (“OBBBA”). See Note 11, Income Taxes, to the consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for further details.
Previous wording
In addition to our results determined in accordance with U.S. generally accepted accounting principles (“GAAP”), including, in particular, operating loss, net cash provided by operating activities, and net income (loss), we believe that Adjusted EBITDA, a non-GAAP measure, is useful in evaluating our operating performance. We define Adjusted EBITDA as net income (loss) adjusted for stock-based compensation expense, depreciation and amortization, interest income, and provision for (benefit from) income taxes.
Current wording
In addition to our results determined in accordance with U.S. generally accepted accounting principles (“GAAP”), including, in particular, operating loss, net cash provided by operating activities, and net loss, we believe that Adjusted EBITDA, a non-GAAP measure, is useful in evaluating our operating performance. We define Adjusted EBITDA as net loss adjusted for stock-based compensation expense, litigation related expenses, depreciation and amortization, interest income, and provision for (benefit from) income taxes.
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 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.
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 September 30, 2025, we had cash, cash equivalents, and marketable securities of $136.5 million and net working capital, consisting of current assets less current liabilities, of $132.0 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, 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.
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 nine months ended September 30, 2025, we repurchased 4,036,242 shares of Class A common stock under the 2023 Repurchase Program for an aggregate purchase price of $46.0 million. As of September 30, 2025, $94.4 million remained available for future share repurchases under the 2023 Repurchase Program.
Previous 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.
Current wording
For the nine months ended September 30, 2025, net cash provided by operating activities of $62.9 million resulted primarily from adjustments for non-cash expenses of $55.1 million, including $34.0 million for depreciation and amortization and $29.0 million for stock-based compensation, a decrease in accounts receivable of $62.2 million, offset by a net loss of $21.1 million, a decrease in accounts payable of $30.0 million, and an increase in prepaid expenses and other assets of $2.2 million.
Previous 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.
Current wording
For the nine months ended September 30, 2024, net cash provided by operating activities of $55.4 million resulted primarily from adjustments for non-cash expenses of $52.8 million, including $33.9 million for depreciation and amortization and $28.3 million for stock-based compensation, offset by a net loss of $1.4 million, an increase in accounts receivable of $1.3 million, an increase in prepaid expenses and other assets of $1.6 million, a decrease in operating lease liabilities of $4.7 million and an increase in accounts payable of $8.8 million.
Previous 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.
Current wording
For the nine months ended September 30, 2025, net cash provided by investing activities of $17.4 million was primarily due to sales of marketable securities prior to maturity of $27.1 million and a net increase in investments due to maturities of marketable securities of $13.8 million, offset by $7.5 million in purchases of property and equipment (primarily data center infrastructure), and $16.1 million of investments in capitalized internal-use software.
Previous 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.
Current wording
For the nine months ended September 30, 2024, net cash provided by investing activities of $9.6 million was primarily due to a net decrease in investments due to maturities of marketable securities of $39.0 million, offset by $13.3 million in purchases of property and equipment (primarily data center infrastructure), and $16.1 million of investments in capitalized internal-use software.
Previous 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.
Current wording
For the nine months ended September 30, 2025, net cash used in financing activities of $44.9 million was primarily due to purchases of treasury stock of $47.7 million, including the prepayment of funds for future purchases of approximately $1.6 million, offset by proceeds from employee stock option exercises of $1.5 million and proceeds from the ESPP of $1.4 million.
Previous 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.
Current wording
For the nine months ended September 30, 2024, net cash used in financing activities of $64.6 million was primarily due to purchases of treasury stock of $65.4 million, payment of a business combination indemnification holdback of $2.1 million, offset by proceeds from employee stock option exercises of $1.6 million and proceeds from the ESPP of $1.5 million.
Previous 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.
Current wording
As of September 30, 2025, we had $6.1 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.