PubMatic (PUBM) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue was $63.8 million, down 4% year-over-year, primarily due to a major DSP buyer and political ad impact, but underlying business revenue grew 21% year-over-year, led by over 50% CTV growth and strong SPO adoption.

• Omnichannel video revenues grew 20% year-over-year, representing 40% of total revenue; emerging revenue streams and Connect (curation/data) more than doubled.

• Investments in AI, Activate, Convert, Connect, and go-to-market teams are fueling growth, customer engagement, and operational efficiency.

• The business is well-diversified across publishers, agencies, commerce media, and international markets, supporting resilience and agility.

• Positioned to benefit from industry shifts, including the Google AdTech antitrust verdict and continued third-party cookies in Chrome.

Financial highlights

• Q1 adjusted EBITDA was $8.5 million (13% margin), marking the 36th consecutive quarter of adjusted EBITDA profitability.

• Q1 GAAP net loss was $9.5 million, or $(0.20) per diluted share; non-GAAP net loss was $(1.8) million.

• Net cash from operating activities was $15.6 million, with $7.3 million in free cash flow; cash and marketable securities totaled $144.1 million at quarter end, with no debt.

• Gross margin was 60% in Q1 2025, down from 62% in Q1 2024.

• 60% increase in impressions processed over two years, with only a 16% increase in GAAP cost of revenue.

Outlook and guidance

• Q2 2025 revenue expected between $66–$70 million, assuming 15%+ year-over-year growth in the underlying business; adjusted EBITDA guidance is $9–$12 million.

• Underlying revenues expected to continue growing 15%+ in the second half, despite a 5–7 percentage point headwind from political spend.

• Full-year capex anticipated to decrease by at least 15% to $15 million.

• Management expects macroeconomic conditions and buyer bidding changes to continue impacting revenue in the near term.