PubMatic, Inc.

Previous wording

(1)For a definition of Adjusted EBITDA, an explanation of our management’s use of this measure, and a reconciliation of Adjusted EBITDA to net loss, see “Non-GAAP Financial Measures.”

Current wording

(1)For a definition of Adjusted EBITDA, an explanation of our management’s use of this measure, and a reconciliation of Adjusted EBITDA to net income (loss), see “Non-GAAP Financial Measures.”

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 98% for the trailing twelve months ended June 30, 2026, and 102% for the trailing twelve months ended June 30, 2025.

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 103% for the trailing twelve months ended September 30, 2026, and 98% for the trailing twelve months ended September 30, 2025.

Previous wording

We work with DSPs to help them reduce their costs and improve advertiser ROI, which in turn makes us the specialized cloud infrastructure platform of choice for many of our buying partners. We depend upon a limited number of large DSPs for a large percentage of impressions purchased and our business results, including revenues, may be impacted by changes in their pricing strategies, bidding algorithms or go-to market efforts. As buyers increasingly consolidate their spending with fewer larger technology platforms, we seek to bring an increased proportion of their digital ad spending to our platform through direct deals. Supply Path Optimization (“SPO”) continues to be a major growth driver for us as we add new SPO relationships and expand existing ones. We have been investing in SPO technology and partnerships for six years and SPO represented over 55% of total activity for the three months ended June 30, 2026.

Current wording

We work with DSPs to help them reduce their costs and improve advertiser ROI, which in turn makes us the specialized cloud infrastructure platform of choice for many of our buying partners. We depend upon a limited number of large DSPs for a large percentage of impressions purchased and our business results, including revenues, may be impacted by changes in their pricing strategies, bidding algorithms or go-to market efforts. As buyers increasingly consolidate their spending with fewer larger technology platforms, we seek to bring an increased proportion of their digital ad spending to our platform through direct deals. Supply Path Optimization (“SPO”) continues to be a major growth driver for us as we add new SPO relationships and expand existing ones. We have been investing in SPO technology and partnerships for six years and SPO represented approximately 55% of total activity for the three months ended September 30, 2026.

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 764 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 1,005 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 2026, our platform processed approximately 1.0 trillion 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 2026, our platform processed approximately 888 billion ad impressions daily, each in a fraction of a second.

Previous wording

Revenue for the three months ended June 30, 2026 increased by $7.5 million, or 11%, compared to the three months ended June 30, 2025. Revenue for the six months ended June 30, 2026 increased by $6.2 million, or 5%, compared to the six months ended June 30, 2025. Our revenues were primarily driven by an increase in impressions processed on our platform including CTV and mobile app, emerging revenue streams, and growth in customer relationships.

Current wording

Revenue for the three months ended September 30, 2026 increased by $11.6 million, or 17%, compared to the three months ended September 30, 2025. Revenue for the nine months ended September 30, 2026 increased by $17.9 million, or 9%, compared to the nine months ended September 30, 2025. Our revenues were driven by an increase in impressions processed on our platform including CTV and mobile app, emerging revenue streams, and growth in customer relationships. In addition, our revenues for the three months ended September 30, 2026 included approximately $5.6 million from political spend in the United States, compared to $1.1 million in the prior-year period

Previous wording

As of June 30, 2026, we served approximately 2,000 publishers and app developers worldwide on our platform, compared to approximately 1,960 publishers and app developers worldwide as of June 30, 2025. 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, 2026, we served approximately 2,040 publishers and app developers worldwide on our platform, compared to approximately 1,980 publishers and app developers worldwide as of September 30, 2025. 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 decreased $0.7 million for the three months ended June 30, 2026 compared to the three months ended June 30, 2025, primarily due to a $1.7 million decrease in depreciation and amortization and a decrease of $0.2 million in professional services, offset by a $1.4 million increase in data center costs. Overall, our cost of revenue per million impressions processed for the three months ended June 30, 2026 decreased by approximately 18% compared to the three months ended June 30, 2025.

Current wording

Cost of revenue decreased $1.4 million for the three months ended September 30, 2026 compared to the three months ended September 30, 2025, primarily due to a $1.9 million decrease in depreciation and amortization primarily due to a change in the estimated useful life of certain network hardware and a decrease of $0.3 million in facilities, offset by a $1.3 million increase in data center costs. Overall, our cost of revenue per million impressions processed for the three months ended September 30, 2026 increased by approximately 2% compared to the three months ended September 30, 2025.

Previous wording

Cost of revenue decreased $0.2 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025, primarily due to a $3.2 million decrease in depreciation and amortization and a $0.2 million decrease in facilities, offset by an increase of $3.4 million in data center costs.

Current wording

Cost of revenue decreased $1.7 million for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025, primarily due to a $5.1 million decrease in depreciation and amortization, which includes the impact from the change in the estimated useful life of certain network hardware, a $0.6 million decrease in personnel costs, and a $0.5 million decrease in facilities, offset by an increase of $4.7 million in data center costs.

Previous wording

Our gross margin of 67% for the three months ended June 30, 2026 increased compared to 63% for the three months ended June 30, 2025, and our gross margin of 63% for the six months ended June 30, 2026 increased compared to 61% for the six months ended June 30, 2025 primarily due to an increase in revenue.

Current wording

Our gross margin of 70% for the three months ended September 30, 2026 increased compared to 63% for the three months ended September 30, 2025, and our gross margin of 66% for the nine months ended September 30, 2026 increased compared to 62% for the nine months ended September 30, 2025 primarily due to an increase in revenue.

Previous wording

We expect the cost of revenue to be higher in 2026 compared to 2025 in absolute dollars as we continue to invest in revenue driving business initiatives. Cost of revenue may fluctuate from quarter to quarter and period to period, on an absolute dollar basis and as a percentage of revenue, depending on revenue levels, and the timing and amounts of depreciation and amortization of equipment and software.

Current wording

We expect the cost of revenue to be lower in 2026 compared to 2025 in absolute dollars driven by depreciation from updating the estimated useful life of certain hardware network from three to five years. Cost of revenue may fluctuate from quarter to quarter and period to period, on an absolute dollar basis and as a percentage of revenue, depending on revenue levels, and the timing and amounts of depreciation and amortization of equipment and software.

Previous wording

The decrease in technology and development costs for the six months ended June 30, 2026 was primarily due to a decrease of $2.3 million in personnel costs, offset by a $1.5 million decrease in capitalized internal-use software costs.

Current wording

The decrease in technology and development costs for the three months ended September 30, 2026 was primarily due to a decrease of $2.9 million in personnel costs, offset by a $1.0 million decrease in capitalized internal-use software costs.

Previous wording

We expect technology and development expenses to increase in 2026 compared to 2025 in absolute dollars, primarily due to investment in technological innovation.

Current wording

We expect technology and development expenses in 2026 to be flat compared to 2025 in absolute dollars.

Previous wording

Sales and marketing costs for the six months ended June 30, 2026 increased primarily due to a $2.6 million increase in personnel costs and a $0.6 million increase in facilities.

Current wording

Sales and marketing costs for the three months ended September 30, 2026 decreased primarily due to a $2.2 million decrease in personnel costs.

Previous wording

Sales and marketing costs for the three months ended June 30, 2026 increased primarily due to a $0.8 million increase in personnel costs.

Current wording

Sales and marketing costs for the nine months ended September 30, 2026 increased primarily due to a $0.8 million increase in facilities.

Previous wording

The increase in technology and development costs for the three months ended June 30, 2026 was not material.

Current wording

The decrease in general and administrative expense for the three months ended September 30, 2026 was not material.

Previous wording

General and administrative expense increased for the three months ended June 30, 2026 primarily due to a $0.7 million increase in business taxes and a $0.3 million increase in personnel costs.

Current wording

General and administrative expense increased for the nine months ended September 30, 2026 primarily due to a $1.7 million increase in professional services, including litigation related expenses, and a $0.8 million increase in business taxes, offset by a decrease of $0.9 million in personnel costs.

Previous wording

Total other income (expense), net increased for the six months ended June 30, 2026 primarily due to foreign currency fluctuations.

Current wording

Total other income (expense), net increased for the nine months ended September 30, 2026 primarily due to foreign currency fluctuations offset by a $0.7 million decrease in interest income.

Previous wording

The difference between the effective tax rate for the three months ended June 30, 2026 of 164% and the federal statutory income tax rate of 21% was related to tax expense from nondeductible stock-based compensation and Section 162(m) limitation on the tax deductibility of officers’ compensation, partially offset by the tax benefits from research tax credits and deductions for equity awards. The effective income tax rate of 14% for the three months ended June 30, 2025 was related to the 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.

Current wording

The difference between the effective tax rate for the three months ended September 30, 2026 of 44% and the federal statutory income tax rate of 21% was related to tax expense from nondeductible stock-based compensation and Section 162(m) limitation on the tax deductibility of officers’ compensation, partially offset by the tax benefits from research tax credits and deductions for equity awards. The effective income tax rate of 21% for the three months ended September 30, 2025 was related to the tax benefits from research tax credits and deductions for equity awards, offset by nondeductible stock-based compensation and 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, 2026 of (4)% and the federal statutory income tax rate of 21% was related to tax expense from nondeductible stock-based compensation and Section 162(m) limitation on the tax deductibility of officers’ compensation, partially offset by the tax benefits from research tax credits, deductions for equity awards. The effective income tax rate of 16% for the six months ended June 30, 2025 was related to the 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.

Current wording

The difference between the effective tax rate for the nine months ended September 30, 2026 of (147)% and the federal statutory income tax rate of 21% was related to tax expense from nondeductible stock-based compensation and Section 162(m) limitation on the tax deductibility of officers’ compensation, partially offset by the tax benefits from research tax credits and deductions for equity awards. The effective income tax rate of 17% for the nine months ended September 30, 2025 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.

Previous wording

In addition to our results determined in accordance with U.S. generally accepted accounting principles (“GAAP”), including, in particular, operating income (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, depreciation and amortization, litigation related expenses, 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 income (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, litigation related expenses, interest income, and provision for (benefit from) income taxes.

Previous wording

The following table presents a reconciliation of Adjusted EBITDA to net loss for each of the periods indicated:

Current wording

The following table presents a reconciliation of Adjusted EBITDA to net income (loss) for each of the periods indicated:

Previous wording

(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 relate 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.

Current wording

(1)Litigation related expenses represent 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 relate 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.

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, 2026, we had cash, cash equivalents, and marketable securities of $137.5 million and net working capital, consisting of current assets less current liabilities, of $115.7 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, 2026, we had cash, cash equivalents, and marketable securities of $144.5 million and net working capital, consisting of current assets less current liabilities, of $123.2 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, 2025 (the “2024 Repurchase Program Extension”). In May 2025, the Company’s board of directors authorized the Company to repurchase up to an additional $100 million of its Class A common stock under the 2023 Repurchase Program (the “2025 Repurchase Program Extension”) in addition to the aggregate $175 million previously authorized under the 2023 Repurchase Program, and extended the expiration of the 2023 Repurchase Program to December 31, 2026. During the six months ended June 30, 2026, we repurchased 3,118,823 shares of Class A common stock under the 2023 Repurchase Program for an aggregate purchase price of $30.3 million. As of June 30, 2026, $63.6 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, the Company’s board of directors authorized the Company to repurchase up to an additional $100 million of its Class A common stock under the 2023 Repurchase Program (the “2025 Repurchase Program Extension”) in addition to the aggregate $175 million previously authorized under the 2023 Repurchase Program, and extended the expiration of the 2023 Repurchase Program to December 31, 2026. During the nine months ended September 30, 2026, we repurchased 4,088,651 shares of Class A common stock under the 2023 Repurchase Program for an aggregate purchase price of $45.5 million. As of September 30, 2026, $48.4 million remained available for future share repurchases under the 2023 Repurchase Program.

Previous wording

For the six months ended June 30, 2026, net cash provided by operating activities of $37.5 million resulted primarily from adjustments for non-cash expenses of $38.9 million, including $20.0 million for depreciation and amortization and $16.8 million for stock-based compensation, an increase in accounts payable of $36.6 million, and a decrease in prepaid expenses and other assets of $4.0 million, offset by a net loss of $13.7 million, an increase in accounts receivable of $25.0 million, and a decrease in accrued liabilities of $1.7 million.

Current wording

For the nine months ended September 30, 2026, net cash provided by operating activities of $68.3 million resulted primarily from adjustments for non-cash expenses of $58.6 million, including $28.4 million for depreciation and amortization and $24.4 million for stock-based compensation, an increase in accounts payable of $40.6 million, and a decrease in prepaid expenses and other assets of $8.6 million, offset by a net loss of $8.2 million, an increase in accounts receivable of $22.8 million, and a decrease in accrued liabilities of $5.2 million.

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, 2026, net cash used in investing activities was $34.1 million, primarily due to the purchase of non-marketable equity investments of $3.5 million, $10.2 million of investments in capitalized internal use software, and net purchases in investments of marketable securities of $17.4 million.

Current wording

For the nine months ended September 30, 2026, net cash used in investing activities was $53.7 million, primarily due to the purchase of non-marketable equity investments of $3.5 million, $12.9 million in purchases of property and equipment (primarily data center infrastructure), $13.5 million of investments in capitalized internal use software, and net purchases in investments of marketable securities of $23.8 million.

Previous wording

For the six months ended June 30, 2025, net cash used in investing activities was $0.1 million, 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 of marketable securities of $13.8 million.

Current wording

For the nine months ended September 30, 2025, net cash provided by investing activities was $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, 2026, net cash used in financing activities of $28.6 million was primarily due to purchases of treasury stock of $30.5 million, offset by $0.9 million in proceeds from stock option exercises and proceeds from the ESPP of $1.1 million.

Current wording

For the nine months ended September 30, 2026, net cash used in financing activities of $39.5 million was primarily due to purchases of treasury stock of $45.5 million, offset by $5.1 million in proceeds from stock option exercises and proceeds from the ESPP of $1.1 million.

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

As of June 30, 2026, we had $8.1 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, 2026, we had $8.3 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.