PUBM - Earnings call 4 2023

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Operator

Hello, everyone, and welcome to PubMatic Fourth Quarter and Full Year 2023 Earnings Call. My name is Kelsey, and I will be your Zoom operator for today. We thank you all for your attendance today. And as a reminder, today's webinar is being recorded. And now I will turn things over to Stacie Clements with the Blueshirt Group. you. to over Stacie,

Stacie Clements

be and and PubMatic XX, Full Clements Group. is everyone, the XXXX. Call Fourth Stacie I'll Blueshirt the Quarter Year with operator welcome afternoon, today. Earnings to for This your Good ended December

are on and CEO; Goel, me Pantelick, Joining Rajeev Steve CFO. Co-Founder call the and

website, be [Operator a management press Before statements, the after will Steve our Rajeev this limitation, have items. Instructions] to growth copy prepared I our few found Q&A. of A get remind participants can like we on opportunity, regarding at would will strategy investors.pubmatic.com. I remarks that statements outlook. Today's and release future market during including, and host call, performance, housekeeping started, have forward-looking recorded, financial live been make without

based in our our predict. are forward-looking statements and assumptions are economy future risks, statements inherent circumstances changes to expectations on uncertainties conditions. regarding and current and that are These the business, to Forward-looking difficult subject

information with uncertainties Commission, including find time XX-K the Exchange are XX-Q Exchange and can or reports on and Securities investors.pubmatic.com. filings and to most at and file time X-K, these recent from available subsequent our in more on and our Form filed You the Forms factors Securities with other about any Commission which risks, are

may or and result as be new any statements, a information therefore, may forward-looking not except of is materially by today you, any results XXXX. relying against update the XX, statements. law. And developments discussed whether caution from February differ future We we on All actual these undertake forward-looking no required Our those contemplated as statements. by intend to obligation of do information, of as otherwise, forward-looking

the financial cash and a These informational include references only today's measures, purposes supplemental free non-GAAP measures should EBITDA, discussion non-GAAP addition, net considered not non-GAAP flow. are In for income and to these including presented certain turn to adjusted call will be GAAP is GAAP. the accordance release. most available A over measures reconciliation press substitute in will measures information with Rajeev. in presented I financial our directly to for of comparable now And

Rajeev Goel

Thank profit quarter QX with exceeded over which that our bottom accelerated both to innovation you, terrific on This the our Stacie, delivered Revenue cash XXXX. a generation. last year, the we line. drove significantly and top welcome, XX% past We growth and fourth strong point particularly growth everyone. few and and made results fueled in years inflection over investments by was in expectations

We the single-digit this of our and about anticipate I'm revenue I'm team emerging for execution. over will significantly quarter hard and year-over-year growth share represent year. now extremely of total course outstanding both of a their low of in omnichannel for dedication growth contribution and proud revenue expand particularly saw entire the which video the I excited and work, streams, And display.

Our they their than business headwind and owned a SSP and for results their transition more offset earlier inventory. shutter sizable operated from technology continue Yahoo!, XXXX as to in

QX fourth Excluding the we similar increasing technology This the the excluding headwind to publishers ecosystem. of growth in we when strength second across accelerated revenue buyers Yahoo! XX%. Recall, year-over-year value in making deliver and and a quarter platform, had growth our revenue from sell-side the the QX, the revenue Yahoo!, of accelerating consecutive of quarter highlights to Yahoo!. importance

and integrations are growing drivers. technology deepen customer us relationships They've over product becoming made to our meaningful years the back growth expand allowed last are the we've portfolio. Investments of few momentum gaining on a and

superior meets of integrated platform flexible advertising efficiency. chain, a and supply buyers, sellers, digital that built have the providers across We delivering data retailers needs the while

major budgets to ad a are On ad that consolidation, Shifts we at several environment. market tailwinds multiyear a spend top expect and well of there Commerce stages share early As to external period the significant of that, a expansion. and are result, CTV to of revenue Media, we we believe pointing stable continued as constructive forecasts industry and in as from. benefit growth

With market gains, this generate we flow. efficiency and are margins increasing the year drive intend number across initiatives a share focus value, business. this cash strong to we expand on a of Underpinning shareholder past implemented

and XX% addition, software generative by in increase In process. use and we in a the anticipate the in to engineering of development productivity XX% XXXX, release driven points AI multiple

ability into with engineering for revenue business our growth in expected the sales our give share to efficiencies, share strong the repurchase market gains, along back profile, and financial simultaneously program. These expanding us and reinvest while

audience our ramped of post-cookie variety Connect, privacy-compliant a We have addressability platform solutions. for significantly

a few last and post-cookie the end solutions, publishers Over prepare on cookies. third-party activity the marked months, for buyers seen in we of increase have as

QX revenue-generating from customers number in XX% Connect alone, the increased Just over to XXX. of QX by

are over now our these platform seeing of publishers We more buyers. also alternative having signals, available adopt with on impressions XX% to signals

consumers. compelling, relevant, higher more Identifiers more to Even Alternative ROI ads provide

by across impressions There opportunity front gardens. concluded that alternative daily walled more publisher open us XX%. tremendous analysis present, by of XXX the PubMatic, for to are increased Internet billion from ad a share revenue than processed Our IDs in is when take

to As alternative inherent content, the signals, will with Internet the be walled attractive to scales drive combined which up more Internet increased its performance, advantages of open created content open gardens advertisers. professionally the advertiser structurally relative user-generated

developed GroupM, in native the partnership for with This market-leading are targeting any of data to first-party ad tech Result, on capabilities and environment. by campaigns without enhance learning outside privacy-compliant company, computing closely distributed data their solution applications empowers advertisers For Choreograph industry. collaborating ad instance, transferring the their federated we specializing personal a

next-generation to closely Authority initiatives. Ad customized deliver the Interactive with these to clients. Advertising then We're are publishers PubMatic Markets Bureau's platform against language ads the GroupM's relevant also ROI. improve alongside U.K. cohorts transactions of Privacy based and lab, each facilitated Google, working on models cohorts for and on works Competition highly tech advertiser large provide the PubMatic Sandbox consumer on

multiple platforms. Testing now Markets with sandbox Google we the publishers Grants program, APIs, demand-side transactions end-to-end of facilitating part and As are between privacy

and as Connect our advanced success XXXX. activity market in go-to-market engineering several on plan team we the by to as in our our increased grow well addressability solutions, dozen this people team focused Given area,

The deprecation into partnerships. buyers more is driving cookies to lean of sell-side third-party technology

of we other us, and result growth driver new optimization for SPO relationships trends, add as major to this expand path ones. a supply a continues be As and existing

nearly total with We our and opportunity total activity. even in This and We for where XXXX partnerships have ahead, been SPO initial coming SPO. investing of ended were of XX% over ago. high technology just few from XX% activity significant X a of is watermark we greenfield years beyond years double a a see of goal

The is providers drive an among opportunities simplicity. and with by Advertisers, transparency the like study launched that SPO Dolby actively to identified of average a for managing gaining X/X We SPO National also advertisers technology to Spinks advertisers agencies, Association to consolidating large working preferred efficiency, have independent Peacock, engaged independent Intuit also A the addition is unlocking marketing only of additional agency Promote, XX XX in in advertiser partnership recent operational with study and TransUnion. SPO, clients in advocates agencies that increased with activity to momentum for SSPs. growth. engage recently and QuickBooks,

efficiencies a in Video, chain of challenges brand Through provide Dolby for our rooted supply with to promotes approach SPO their performance partnership, PubMatic enable media. solve that clients will we them to clients complex curated and noted, be will Scalar through Dolby advantages. business PubMatic, our access drive transparently more and to create video with partnership Miguel promotes to outcomes unique able efficiently CTV and competitive preferred inventory Head

in Our pipeline to boosted continuing by is scale SPO opportunity and both further Activate, revenue. is which

previous publishers Asahi advertisers, Nippon region, agencies Television XX over of we nearly pipeline CTV dozen Corporation over active Fuji Earlier a in Network quarter. by partnering the officially up is and Activate Broadcasting to an the have including compared launched leading We television. Japan, Broadcasting This month, and System pipeline Tokyo in Television, Television this campaigns. with XX%,

seek the to their Premium Activate, are drive outcomes. streaming measurable around buyers companies efficient, access more embracing to world inventory programmatic business as

For operations their exceeding agency example, U.S. niche shopping focus across channels awareness driving a campaign luxury the and their retailer PubMatic a achieving or CTV, cost, and audience efficiencies scale, premium With prominent with video omnichannel Activate, brand the video across each was to during able ultimately season. target on across inventory, holiday to reach KPI. wanted drive in

sell-side ROI PubMatic. we ahead excited $XX for the technology our market clients, addressable Activate billion total that revenue drive continue like strong XXXX. and delivered of strong more I'm profitable nearly to strategically expansion Activate buyers in continue growth tremendous and as SPO providers tap opportunity into I of with see to engage As closely Together, represents. to us

We plan XXXX growth. in in teams focused customer accelerate to opportunity bio success to expand this by sales and order XX% capture and our

accelerated high-value video in buyers with with CTV Our seeing formats. quarter. video online revenue fourth Omnichannel growth the around and also growth publishers, momentum mirror we trends the are particularly

And head into monetizing we we XXX XX% have the a platform, publishers, as up XXXX. continue We have to pipeline robust on premium CTV of over opportunity, XXXX.

we our added network TV our relationships are creating recently, they demand unique increased access seek SPO Vivo, Activate to Most Sling and strong platform, relationships. as SPO content and through important, offer effect. differentiated driving we the our Equally premium and to a

buyers For example, to on deal driven sports to of range premium with a Sling including signed programming by buyer with TV, live access broad interest, Dish content. their Media we provide recently

enhanced excited We sporting Summer access approach Copa as the rapid entrants way we corresponding the transparent, this manage in believe CTV is the a an newer inventory CTV the advertisers the U.S. and CTV global this interoperable across inventory. dollars contribute particularly to Paris major America in and only to are anticipated With Olympic programmatic growth Games events signal in valuable ad sustainable ecosystem. year, to to advertising, like in increase increases provide

like DSP monetization recently, integrating dollars will CTV deepened providers our for a by bring In content ad increased demand relationship surge on with most XXXX, buyer PubMatic. engagement demand we onto ad top CTV platform. and FreeWheel. in And The expanded with streaming anticipated X our providers their server partner, opportunities we

our Our directly they ad have instrumental in of publishers also strong growing deals relationships been transact to the one-to-one buyers. choose size marketplace private business, platform sell whereby to our SPO

platform, one-to-one benefits ease increasingly As deals. using with run publishers familiar they our get the of use are their of to software and our

from revenue one-to-one deals in more XXXX. Overall, year-over-year XX% grew than

XXXX. releases delivering built Our sustained and results were with no strong was software upon more biggest in by Activate product year, DNA since to than our evident we QX year-over-year, PubMatic's inception, increased our been X core ever foundation and of that launches including innovation XX% of a this Last Convert. year has

our launches ecosystem. did reinforced company our the these technology providers mark across advertising of only milestone but digital an innovation for also position as the one Not independent leading

the ad monetization development to of our We years few platform value have SSP services. past core our the extend spent scaling beyond product

to addition We offer Convert, revenue, Connect in buyers, each Media post-cookie targeting on through the Openwrap, solutions impressions new we SSP for wrapper flowing software Activate platform. core with like with ad generate Commerce to large revenue adding with publishers our and streams

customer These our integrations. business solutions differentiation. for they flowing and and increase that revenue stickiness platform, touch revenue Collectively, SSP our of points to revenue. us They now meaningful enrich our emerging invaluable points and making through growth with clients, software of generation core our unlock solutions us more drive on clear with streams and these provide data more the top

XXXX, We in than revenue expect solutions these year-over-year. to contribute doubling percentages of mid-single-digit more

performance The domain changing Internet. also been the supply evolving the digital are of gardens. dynamics a walled of and industry new advertising in era Historically, ushering the the for chain advertising open has

see ongoing the focus and and the open buyers advertising the by well fueled rise long-term identity on on commerce media, as by drive we of driven in increase data, first-party opportunity Internet. to efficiency, ROI outcomes-based as further a Now

place with performance PubMatic opportunity. positioned and valuable commerce and end-to-end enhanced take closed-loop to see and data available now control But the gardens. Activate through efficiency advantage we data new coupled deliver this the have rival blocks foundational provides advertising walled in that building platform available Convert, via reporting solutions the Connect, best as We the the sell-side a that of to

development While it's build in our machine we performance-based and increase will still learning investment new solutions. early, to product engineers

point quarter, growth. up for a inflection predicted QX revenue was last clear I As

growth. Our value and strong to platform customer-centric highlights our the our integrated performance of approach

and consolidate publishers from our to we the utilization take suite our our continue spend across our buyers offer, solutions growing technology of on monetization and As advantage products. platform of software greater stronger benefit

XXXX XXXX Steve in anticipate and over us grow in of by to focus to our to market head hand revenue the us. XXX With details. These in our plan shareholder financial investments expand and fully on will partially ahead count take will We value. of off XXXX. efficiency share pay our over the for people ahead opportunity and expanding in business robust it XXXX. model, growth more margins I tremendous our to this now we year, see opportunities of beyond and advantage deliver I

Steven Pantelick

with everyone. across We an that We were revenue across total and QX. point. all our versus Rajeev, inflection year last impressive XX% number results increased of accelerating several year. XX% formats with year-over-year outstanding There over quarter QX this you, business, to monetized sequentially XX% ended the and welcome, Thank and factors growth drove channels by the fourth impressions

and achieved Openwrap growth our in region. quarter, revenue Both robust Display QX geographic added Activate increased streams compared omnichannel In year-over-year. and approximately percentage to Video emerging in X points growth of the We revenues XXXX. like every

given revenue from business headwinds commented Yahoo, the that These our we quarter. results are in on particularly notable last

year the grew and excluding operated X% in growth, and year over XXXX. grew full inventory owned revenue Yahoo's the quarter, QX Our fourth for last XX% versus

for adjusted margin our acceleration, record full core revenue and quarterly robust products model, once and in full and the XX%, long highlight our we've nearly while year. for our simultaneously year of grow business of $XX in business, free notable to highest These with $XX.X EBITDA investing company's acceleration. at our the for generated again profitability revenue million QX million our results our cash ability Along with excellence the technology history, and flow track we and our growth operational continued

down were XX%-plus and by impressions, Yahoo, video which powered These and sequentially revenue QX for Omnichannel which by results CPM grew otherwise in unless channel, called Breaking includes out, year-over-year XX% increase offset X% QX format monetized year-over-year. declines. a

year-over-year relatively were August growth X%. year, from this Display Display the onwards. in delivering led at on reminder, a to time over year-over-year returned early but growth As basis, XX% for CPMs XXXX, stable growth. way video declined a the first strong year-over-year Mobile at

Desktop Excluding Yahoo!, revenue Total in grew XX% fourth Display and the quarter. Mobile

On a in grew double-digit regional QX. percentages basis, every reaching

in which categories in the Looking category, a in recovery for aggregate to notable spend grew year-over-year The XX%. finance over and first we returned at time business, shopping technology by XXXX. vertical, saw that growth the personal

combined, Overall, QX year. the verticals ad over top last by XX% increased XX

Our an by the focus healthy accelerate Collectively, revenues our expanded year innovation excellent while years a we in rigor ongoing expect operating fourth this outlined XXXX, and driven and flows. strong quarter cash I were results delivering many over priorities that ago. will on margins

We the this To recap, the priority and development. PubMatic our and to environment deepen ads our buyers, technology partnership and first our positioned through relationships publishers to with on was well stabilizes. when be did innovation platform

underscoring rate impressions we increased optimization our we a high number activity of XX% the the path We investments, up retention at of and targeted total, the and customers increased year behalf as XXXX, high-value XXXX. XX%. of monetized, on increased spend by low of these video buyers from In of of to from SPL optimization, approximately from acceleration With progressed. our over end capacity over very maintained stickiness focus rates supply of churn, the XX% net on CapEx relationships. We

was inventory spending exciting one X brands. with commerce emerging accomplished was XXXX, XXXX, software of premium includes data years publishers and streams CTV new which We The and partners, sticky incremental net ramp-up perhaps And least transactional of from most SPL retention XXX%. of revenue connections we XXX the through rate in products, spend in at things our the integrations. added

delivered We operating ongoing capital we priority second cash over with in our increase free cash allocation and flow generation. XX% of disciplined $XX.X investments. to free model, a Our were flow, drive durable Coupled XXXX. was million

differentiate last over growth invest, Over our has flow, accelerate million product generated free flexibility years, provided offerings. X which us to the the $XXX cash of we continually and

efficiency focused we cost of a our in new establishing structure. on third, And level

tremendous operated our leverage and in business. infrastructure provides owned Our

was versus additional focus in than in reduce These to XXXX resulted in the investment XX% back more our optimization. platform, XXXX of driving allowing on more CapEx increase by efforts XX% and capacity XXXX, On on our CapEx while XXXX. us than

addition, X% In cost impression an efforts processed. reduction revenue delivered per our of in

efficient through and efficiencies in AI We also a and organization drove highly and generative by supported product engineering across our productive India. development teams,

launched efficiency and cost over have combination the success management We the improved team base deliver with customer we of outstanding productivity, efforts, efficiency. XX focus to in our scaled cost account million. mid-market improved a Through by engineering India greater and

reflecting Full year $X.X expenses Included bad debt business. of XX% the $XXX.X across million, XXXX, in to related of million of a buyers investments were one operating is this our GAAP increase the total over expense, in QX. bankruptcy

income or share. positive Extending per or our our of long net income adjusted loss diluted net was share. million $X.XX year million of taxes GAAP $X.XX marked eighth was income stock-based XXth diluted GAAP record investments, expense, compensation equity track adjustments income, $X.X which standout $XX year performance, on Full financial related of straight unrealized XXXX straight for year net for and and per EBITDA. Non-GAAP adjusts

We $XXX.X in ended million and XXXX debt. with and X securities cash marketable

significant During we flow the our growth investments, free cash as we shares repurchased year, and for used planned.

we As of shares stock million and cash, $XX our of weighted fully we average shares in Class XX, outstanding. had reduced diluted December A repurchased our for million common X

$XX the approximately strategy, allocation our continue the long-term shareholders. remaining our of prior of allocation balance investing Consistent we growth; authorization by capital our for supported from to strong million strategy healthy capital sheet and to and our had end We second, capital returning cash at plan generation, first, with year.

the company's XXXX, on Board additional authorized to common Directors repurchase through Class $XXX to A up of has end Accordingly, of top the prior of our the funds from an stock, the remaining million of of authorization.

Turning XXXX. to

investment for we This and spend returns, in and include areas highest year-over-year a constructive the while further are where seeing investing expansion. growth go-to-market incremental incremental ad driving areas, efficiencies more environment the accelerated We business. planning see means resource. revenue are and Key margin innovation across

SPO drive our new to We buyer-focused by opportunities accelerate to enterprise-grade coming with as in software, targeting Activate. success customer revenue develop focus our add team plan engineers post-cookie and to sales And with plan to solutions growing Media our increase to plan streams and and on hire such more performance Openwrap our We to salespeople advertising. XX% revenue Convert. growth post-cookie we Commerce more from emerging and Connect

add XXX we net year. members expect more than to Overall, new team this

the In addition, continued products. on our we gains to and AI dollars achieve through levels, support And long-term will productivity several maximizing us plan the further operating successful this of we which Based we finally, million the optimization. over new expect our will return over focusing confident referenced our are to headwind by revenue XX% increase record of of anticipate efficiencies help by CapEx year, our infrastructure growth we use our XXXX growth cost that on and track growth Yahoo! earlier. investments, accelerate includes of capacity the XXXX to

this expanding in time, EBITDA XX% with generating our anticipate growth. positive and same translates line growth Yahoo!, Excluding year-over-year to margin we from over the cash XXXX. At operations adjusted

Turning to QX.

solid footing. with With from we XXXX starting year, trends our double-digit year-over-year to the January tailwind the in percentage on were impressions on monetized finish increase strong are a excellent basis.

line CPMs growth year-over-year. midpoint and were also or range percentages revenues growth XX% grow. XX% to with expectations omnichannel trends, Video to revenues to Display these increased year-over-year and continue Based recent million were up of Yahoo. seasonal XXXX the be revenue on million $XX and excluding Notably, in emerging streams the in anticipate year-over-year at revenue $XX double-digit QX, we

In be million. of GAAP approximately terms revenue is of cost, QX $XX expected in cost to

low function anticipate and sequential we as cost-saving on in increases continued productivity proactive single-digit quarters a cost measures, steps keeping percentages. the Over coming the of quarter-over-quarter

QX, adjustments, to GAAP Global approximately effective cost rate increase QX delivery Conference. QX $X absorbs in annual to increase OpEx million QX. additional expense, run global related versus plus expect our costs We are an Sales of that January the This

in QX growth, the for investments will focused single-digit we that our anticipate sequentially onwards. OpEx low percentages With increase

the the design, and million EBITDA million fixed and at structure, revenue cost expect adjusted is or by QX margin between our largely our our guidance approximately be to which Given we near term in $XX $XX XX% midpoint.

are historically, seasonal low period reminder, forward a quarter of that impacted prior year by carried during is first a outspend. our As investments

by We in expect continued and seasonal our progresses, ad spend. driven efficiencies cost as the focus increases productivity improvements, profitability to year improve typical on

adjusted expect XX%. we to year, margin EBITDA full approximately be the For

to million We expect CapEx for full the year. to $XX be million between $XX

years, and cash sustained continuing growth, Over playbook invest to gives while incrementally to for This robust have a deliver excellence. profitability developed we drive flow. to and the many future successful innovation operational us confidence

technology XXXX. year that, and in on As I'm one the double-digit I'll excited call this providers, of sell-side are the independent trajectory With prospects And sustained Stacie for very beyond. for turn about growth questions. largest over the to we

Operator

at Our Evercore. [Operator first Instructions] question comes Shweta Khajuria from

Shweta Khajuria

me Let please. try X,

the really sense the quarter Rajeev, go first cookie cookies advertisers, one, by away what and and publishers is, of third of guess I on if readiness in So in your quarter? is terms deprecation, more so fourth question

this they Is you as part Also transition that are think there it adoption your that that also -- guess get think would on so -- been large IDs, is on is and advertisers, has publishers? revenue help do the the will XX% away, it CPMs could cookies IDs, both Could on lower impact in how who you those of go away, us question it likely to potentially you cookies, sides, alternative publishers And once goes of cookie, ready the you have have up. go about as to Do ROI IDs then don't does talked alternative cookies cookies? CPMs. alternative that well on And up work through question one. so go I terms have of how is, exposure reliant simply publishers that you?

characterized But you please us revenue with we it. help question second the of could role? it like about year? cadence all the should start new is, It mid-single-digit how year through products through Steve, playing will as sounds for the incremental the year, a percentage then contribution, terms think the how is Steve these full of in you And acceleration

Rajeev Goel

and the then start. don't on I Why I'll over cookie Yes. it to turn Thank Shweta Steve. you, piece,

the say there's would across I level mixed readiness So of a ecosystem.

Connect We have for been product. working now our X years X on or

we're quite we good So feel positioned. how about

curve. the Some are ahead publishers of

the saw I date. publishers agencies. behind of to announced around is and GroupM modeled Some and cohorts the we advertisers with say same what would We resolve and are curve, true

So that's getting of, think, great curve. a the example of of ahead I

I how that what sandbox are evolves we not to privacy emphasize do to does. Google want dependent on

So been as environments Media, Mobile App. scaling we have non-cookie Commerce CTV, such

All as as of the as revenue a well volume percentage growing of just impressions. are these of areas raw

advertiser And you XX% right? the our have cookie. we meet platform of as plenty And to commented, needs, on of alternative so have to impressions impression third-party available opportunities our now signals

think for I deprecation will from impossible that still to line period everybody happens. around. fully to be growing. to But while there transition a grow. building be the percentage cookie ecosystem It's to is in when the cookie away time has we've cookie be signal. been the It's fully continue That transitioned going been

doing feel all really we're modeled we contextual cohorts. good alternative So advertising, publish the data and things about first-party around IDs,

APIs And is It's Privacy an rapidly. have those themselves auction implemented APIs introducing complexity environment. Sandbox entirely is and then see what the significant that and are ecosystem. that be evolving I a new stepping parallel to collection back, into there's of

engineering ecosystem what is that investment. our to XXXX investment ad position the a sustained are into so means not the many to that order It's companies investment. tech position a make I that in in And compete in ecosystem that in will plan. make that in substantial be factored take we'll to and we're there suspect And effectively.

gain share opportunity very may well a be us. So for this

to Steve, piece. revenue Let me it turn on over the you,

Steven Pantelick

Shweta, Thanks, the for question. Great.

is the midpoint growth. at So highlight. a one, just guidance XX% couple year-over-year about of our things to Number

first a in we of step-up were where historically the 'XX. clearly half So from

emerging then of have the feel the comment, we very year overall, start and in positive. we is your question robust. revenue to time that streams. additive over So And and

So match expectation in in first the established seasonal to on we've I expect course It the continue through will more quarter. probably of terms averages. build we'll that the the momentum, year, historical a of

in supplemented So emerging versus our expected then which by will quarter, And revenue QX. QX growth fourth streams. strong be

more spend us, from emerging comment revenue is SaaS-like it's positive new, downs and number but least less for of really the is cases, in and of and which to, of on revenues that ups overall to let's other the not say, net The a note ad on many stable fronts the environment. it's

of stability lot streams over those the a revenue the -- current portion the of our emerging investment in see revenue is of expectation we end course we And and the year, these of and up revenue this time. by streams double build our ramp will up So that areas. through in

Operator

question comes from RBC. Our Matt Swanson next

Matthew Swanson

the Congratulations on quarter.

of you're maybe number those I close on at would mentioned, like I targets the one, the you hitting to And side. XX%. think do head you today part long-term then And kind when journey is is? what from it of your SPO thinking dangerously to value contribution the SPO out been has kind just the be, say SPO of sticks in proposition how new like around this from started? I a also we've on, long-term want that And that guess versus have changed X

Rajeev Goel

Matt. you, Yes. Thank Sure.

to mentioned, that term, long think based. the maybe about respect set I SPO our I we very out you be to it, of with are earlier. close right, had could targets business we as So think X/X When SPO,

frontier, in pencil mark as a So let's next that put hit. for to us the the kind next water of

tremendous I of opportunity. think amount there's still a

the independent customer in activity teams success order sales We highlighted go and the remarks, in XX%, expanding by on after lot we here advertiser agency. mentioned of more WPromote, prepared it. front. a are the I We As of to see an

through the evolving. has terms in been also of maybe So changed, we're is where I the of the how or has the certainly headed proposition we're is way still SPO. cycle that think evolving, of value economic maybe value most for it And proposition kind in

and buyers from So I operations to opportunities a deeper simplifying conversations about different it high-quality on. in focus used whole And into these think SPO to perspective. a as of be order we inventory us found we've media for to on focus set gotten relationships,

these the handy sustained. not So buyer focused more be still working and a XX on that study, to XX one are days, buyers with far and buyers going certainly too Obviously, helping SSPs. is are make to where efficient high that's that that's very metric

privacy environment. for looking the help are Buyers and regulatory with

world regulations place the another in XX-some they compliant are So in there's coming and Post-cookie do need U.S. there's business, more they privacy area. state around and places now all where targeting is in regulations to be more place.

the the we with and So made GroupM point -- Resolve. that exactly

So it's multifaceted creates think for growth us. us think, compliance tremendous I opportunity turning tremendous, much opportunity into I which a efficiency and data, more opportunity, for innovation workflow,

Matthew Swanson

SaaS-like if more. you Steve, could this more then of mentioned one some And I ask being revenue.

One insensitive. budgets ad DSP spend like, is CPM about like interesting and the your SPO, almost where it parts less of of right, meets more it's

can SPO So we your does able XX% you revenue? visibility to activity, being to forecast for talk -- like, say, just terms about what like got let's that in as of

Steven Pantelick

grows. Well, And day it deepen I shared and that I see and the the actually spend measure Rajeev's point, we on SPO to and more the journey stickiness every we've and more this with relationships. gone I incremental buyers, from learn mean, relationships. we think our

aspect I'll is and to that on of on platform. capabilities, stability is that time. contributes all So our of innovation top the call it's revenues respect it's the of to something with our revenues our But built what over emerging that

that. new software buyer opportunity, Connect database course, through so software adds the are these significant of of models, in which we business finding And Openwrap of to And net we enterprise whether our grade, stream launch SaaS significant charge are for a able pockets Activate, be terms fees. of revenue it

stability. of revenue So all time, incremental that but add a the expect grows I degree level would will revenues, as predictability these over grow. And to also of help of

Operator

Jefferies. Our Heaney from at next comes question James

James Heaney

premium you inventory feel a Can in CTV that about access market? to talk how get And world which currently accessed entering see could about bit And your the strategy? more the growth more the today? little just you have inventory we're CTV seeing that do you you a do you

Rajeev Goel

Yes. you. Sure, James. Thank

positioned good we CTV CTV million really QX million, yes, So I grew about from of of $XXX about feel are, 'XX. publisher inventory, think in year-over-year when to how well QX count we 'XX $XXX

optimization effect and that buyers momentum, significant is platform. as that's and it's names, number a as with broadcasters. what So well see significant streamers of of a And biggest path network terms happening I the . And the of there's strength publishers. biggest with technology the particularly in or count driven being our growth supply by lot of the

consolidating So spend buyers increasingly on their platform. our are

are further. then want even to and course. those that of extends of example dollars, a product access And where that, DISH good Activate Our Sling they

the more to and brings we deeper so our as buyers ramp And SPO platform. these with that get publishers -- relationships,

other, the to their is opportunity private the really publishers benefits one-to-one as nice guaranteed moving expansion deals it, they platform CTV use of our or programmatic platform. I that more then are our And think, and marketplace see of

platform. that this are these to moving a and would to is a those So single deal publisher our advertiser sell -- a they're deals

by in segment we think, year. last of that that space. grew the deals year-over-year And low market a share I arena, XX% have, one-to-one We that

is Japan. is in the APAC, U.S. publisher of but world. the highlighted Europe quickly. variety opportunity we have see comment And in the In reaction monetization tremendous we a in growing parts just different today us. so that CTV lot last on is a make of of that of I the And think I'll runway vast there's around Activate ahead we platform earlier, our the majority

there's we're think variety So grow a markets, a of different to going at CTV rate. rapid to continue where I

James Heaney

Last one year? bit giving a just this to XXXX. looks increased the of on Is visibility. of maybe more the Like quick for what's weren't what's that you sort that provide conviction you able it guide then, guidance, the And follow-up you visibility? you like guide giving kind year, Great. have little but to Steve, to just year, full

Steven Pantelick

There's actually of a number factors.

is foremost ad we see environment there. and constructive out a First do more

working number we've for been many to that of two, around number in of back half So Number the that's hold 'XX. innovation really a one. is the started things take on of years

outstanding quarter. fourth in results the the saw You

the exclude you and inventory, XX% quarter. the business fourth Yahoo in If grew operated our owned

that the when we're going at we to ahead opportunities, momentum. build on so, look And

We out been behind omnichannel investing called Video, of there. Rajeev some have the factors

We seeing of are business. SPO will relationships, terrific total from a proportion continue grow momentum to as our that

we a that And us. to have like of our continue revenues, with to So progress then, Connect, emerging Openwrap. adds new tailwind course, Activate,

expectation growth when And 'XX, that's look minimum percent. you seeing strip Yahoo, XX%. So XX-plus a over of the if out all we told, at we're

are the our the we in group, time good start we'll right update many to where So have gained goes now. have good traction that investor year things already on. a about building. feeling and we're really we as Obviously, really But

Operator

comes next from KeyBanc. Patterson question Our Justin

Justin Patterson

to currently some say investments the just how like that. to and dive plan into count leaning you the the aggressively some from if bit so the have over about in through course think stronger, count tailwinds, returns head build head To a little more look within you wanted question, more to tailwind It a I does last gets more on line? bit or should that bottom drop But this this into than will of investments sound we invest what's there. year, the

Steven Pantelick

then, of just profitable we the very fourth margin. EBITDA strategy. obviously could take I'll add that the terms in Sure. adjusted XX% in Rajeev, comments are proven part quarter. have to stage, some set you Justin, we business the a first and our But

traction So in And areas been we've momentum a we up have the great when growth. at in model. a look new business we building SPO, our take the that of

to is more this time We absolutely the invest feel right significantly.

innovation And so it's around, around of and sales. course,

going that we and we're ability make combined with certainly our be And year to to And get so growth investment we've profile, historically, off. able think this investments returns pay beyond. proven to that

so further rate we opportunities, wouldn't of is if there's why there increase our we reason investment. see potentially And no

called robust the robust to is business our EBITDA with particularly unique Right mix, now, still incremental what's even aiming our that investment ability we're a deliver about But strong, be to out. XX% margins. we've and margin,

focus very a results. while And on line as delivering growth this so see strong bottom we also

Rajeev Goel

Yes.

Justin, I'll just add.

been shifting. a it's clearly The months are know. weak priorities XX fairly ad-spend last environment, Our as so, or you

And business base, a base. products, just to. We're opportunity the more our covering customer covering And so making customer the for growth really they're customers largest where large our is the focused and in talked priorities those about we've lot then then heading innovating on were our efficient.

And strong we I areas. think job in of a did those really all

as right? pretty think so Steve more called environment, seeing and that acceleration on QX a of and some onwards. accelerating constructive the out And happen you're metrics. I focused get we're into growth, revenue really now And we And quickly through QX

where opportunities just will to we say, them. invest would around growth very, opportunistic we be continuing and So behind I see

Steve I as highlighted, as generation profitability strong comfortable we're in well. model, cash pretty the the business think with

so towards bias growth. accelerating the we're revenue And to going put

Operator

question Matt next at Condon from JMP. comes Our

Matthew Condon

all Just complex, with second this this to how a selling and XXXX? maybe you opine throughout is the Hub? structural Or one, ID about you're expecting on then the just that Vice trend adoption just can a talk digital shutdown change? And advertiser of And BuzzFeed of Is XXXX? you publishers, a can is beyond just macro cycle?

Rajeev Goel

Matt, the question. you, Thank Sure. Yes. for

start you first a companies terms let's with in yes, the of of help one So couple cited and of pubs.

growth So cycles we've about an years, prior through in question, an over economic And in as and industry through shift this mentioned X.X the answer, talked we opportunities the been last always the I just before. cycle.

So that case. to the know be we

those suffering Media opportunities towards therefore, and have the publishers, in keeping where publishers, so data are opportunities really not of as may . And And growth where case what is lie up the happening they shifting those other like think see we and and result. areas I certain assets. types be with CTV, Commerce a of they digital publishers

this seen coming. Now we've

the Video, really and Media to over of signal from growing our has so from business, to share several attached innovating of that's CTV focused omnichannel And coming and been our alternative Commerce products coming the that from years, in the these areas, kind cookie that's it. this on last we've

gainers So in we that can be process. this market share

even of be you are. winners starts at we're there's opportunities see going play high-growth positioned accelerate, And and going what well kind growth there's is numbers that, that's ad think with what see as to be our spend losers. the to I to now you So pockets, where is with that

question Now turning to on Hub. second Identity your

publishers them on Hub convert a alternative variety they So that easily data that it just of quick have a reminder different of is into allows can a to software what user Identity IDs. is, does deploy that

if instance, that publisher they and on So an at different think LiveRamp can we're convert then into -- user have has ID e-mail into they IDs. consent, XX UIDX, a for now a address, I into

year, hundred to may it's significantly, we deployed, able have Identity additional Hub time several deprecation have higher to we and order closer expect So cookie and the of in exceed part to be this average get we line. a numbers generate But of on we the again, probably have have triple when in that digits, add we customers publishers those the we key signal we XX% higher present. that IDs to as that CPMs, growing plan

Operator

question comes Andrew James. next And from at Marok our Raymond

Andrew Marok

the on more products external I anything engineering adoption bit could of be own And AI that generative Is know was velocity releases about XX% because I to wondering can your in software own talked impact for like in guys color tools impactful you if you and the give a maybe infrastructure. 'XX? operate little in you've release How on internally generated these increase 'XX. productivity. or

Rajeev Goel

Yes. Andrew. Thanks, Great.

example, -- there's of generative for there's much course, So learning the new branches multiple obviously, of AI, and machine AI.

use expertise that So programmatic milliseconds. just of a quite long-standing in happen learning. We and machine use for that bit we little for extensively context, transactions have in

Things like algorithms. efficiency, management floors, various traffic action price

AI, using you release And probably generative tested approaches it. development testing we name new pushed automation to of a to with scale Now if and we Gen number software a hard can AI test respect tools. in XXXX, to and to tool,

in-house a XX% anticipate and seen also We've third-party things So We've of results built engineering things to that's in scaling been up, ourselves. we're tools. a in XX% XXXX. have what's using a those and combination, to some variety leading increase good productivity us

putting And maybe to examples X of I concrete can we're how AI work. give Gen

that So personnel. the the the we've lot testing automating is first to testing of engineers a software increase been of ratio by process, able to

Gen testing that the we're to able used of manual using by a automate AI lot So to happen. tools,

engineering more investment, now where features that's capabilities. and so million And $X of for gain engineers new we have structural writing that are can a new

release of really And lot the automating part of that's testing that by to on faster from productivity to we're that software to so that testing development a pipeline theme then by deployment. And able gain. sitting automating testing, entire

ship approach So that software cycles to a to couple an where we these of go through might years works ship we couple testing ago and weeks have of it make had sure everything properly. used every every

automate. able software to because teams they been release individual Now can we've will PubMatic, engineering within

code X write released hours, day can can code production. in within that be on the engineer an XX and So

iteration And which only not also so would lead acceleration faster of to and growth. cycles, expect productivity I our tremendous, that has a revenue think, development I should accelerated but

Operator

Oppenheimer. Helfstein, Jason from comes question next Our

Jason Helfstein

maybe few questions on interconnected. A

a just broadly, of? piece IDs, IDs? a then I've one. to additional there like ecosystem publishers follow-up. ID, ramp Or support to is to a is UID any has have them to there So just use you on that those when the cost alternative by that share borne help be to cost That's let's choose, a got or say, question you And like

Rajeev Goel

Yes. Sure.

using Jason, borne the the that's ID. that is generally, cost So advertiser by

bear say, bear some into cost to, e-mail UIDX publishers LiveRamp not ID, an have costs. let's a a licensing or we into do costs. do convert address a don't infrastructure So We

those generate impressions. So even that's revenue earlier. given more net budget, we CPMs that's share, part then impressions. more fact of those Steve on model, on make But the the offset higher that commented able our that with And than by our CapEx to we're revenue usage

how the they of very want So advertiser own publisher the of to in economics clear for then those very IDs and use. for math, are each obviously, their terms and much And is doing us positive.

Jason Helfstein

seems the Just peak forward? like just thinking next of are business kind of as like margin XXXX, mean, like being flat follow-up. obviously like takes how kind thinking despite the maybe on then revenue and are capital, in to for bigger, items mean they require costs. healthy onetime kind of about free then starting I I cash with hiring margins? does in basically. flow more over gets guidance And But people you're years, maybe revenue about you it kind are complicated both it guess and margin is really growth. close over expansion getting because just more expansion there you year-over-year how of are I the And number of a the few puts more and margins going business

Steven Pantelick

question. Sure. Thanks, Jason, for the

given we opportunity So right the very in over absolutely specific mean taking for growth. long momentum concrete ad opportunity a a environment where there lot we think that margin. I now, of the see digital to is we're invest expand to run

the in sales. really people, about that about the that built we've thoughtful very being technology the next over drivers expansion. you support the structural company have long-term we're will and . But putting many couple actually if it so years. have terms And that think And step of years, our we returns team, over just of back margin where many we're

and of have our First infrastructure. we own course, operated and foremost,

'XX. And CapEx infrastructure We XX%, so our do we our what to in by you by saw the optimize could reducing that able of were power grow while and XX%. capacity

a that emerging segments Number revenue point, most leverage fastest-growing, Video, very we we decide, profitable deploy how environment. of we So powerful streams. of two, those are the omnichannel reminder, returns. we component digital as and when take investing then advantage it in Mobile, the the ad

And so have these products very marginal high profitability.

margin. So we a anticipate our that tailwind on will be

relationships, that economics assets talked aspects built then organization, development India we optimization. AI And about think we And done to activity for years strong structural as the view, expect now XX% sustain business, a that that generative to to being course, point is all our pioneer strategic have long-term come. about is when SPO supply something our to from a we've what of and with related we the We grow. and path activity then, of you in a going and of is of of over that

we've cost that Is incurred already important? that impressions. is Why those the to process

SPO, as platform our more we people, So are minimis. when costs of incremental move onto the buyers more a de result

feel EBITDA focus So And the mindset where operational and XX operate of sort really structural is run. just then, going to years course, speaks have excellence. in straight about on factors the that that long our as of of the like being a with. structurally of profitability long-term we we're advantages we the adjusted company, all of sort good

Operator

last And Michaelis from comes at question Street. our Lake Max

Maxwell Michaelis

to in you XX% those highlight the and on verticals about then XX X shopping, verticals? the into into we other -- the maybe of I verticals you are performed now was know months wondering if if It's could any see have any top other trended wanted if that business well some QX, and that how good there's quarter. to verticals touched grow quarter. I you

Steven Pantelick

Sure.

top the we fourth growth double-digit So quarter. XX great in vertical saw every across is news the that

I So shopping prior a we and down year-to-year out prepared my have was to that from throughout the called that comments not in seen because positive. went quarter in -- standout it real

a I course, across all of specifically automotive, we that over health double-digit and food had But commented grew and of board, these And XX%. growers. the couple are on verticals drink, the travel, fitness,

the speaks diverse as buying the strength diverse And an of board. very platform strong with and across base a really ecosystem. to omnichannel very our platform So publisher it

nicely. the see of to Obviously, first quarter. verticals and business continued very of Turning still quarter. many the other middle in grow to the momentum those like But continue the we're it. also shopping pleased seen trends same first technology We've in in continued to

Maxwell Michaelis

And SPO normalized then last I the XXX%, should range retention saw for that one was what for as of metric? right. a rate All we me. think

Steven Pantelick

metric steep upon I don't see normalized relationships. time things. why a these that couldn't a over based one, be couple of are Number

And we're so SPO our for partners. problems, creating opportunities solving

And looking of They're so ecosystems more advantage they our across own and our platform for spend. their and opportunities can capabilities. and they more are moving more take how

natural of we adds tailwind. a that believe sort So

-- facet opportunities adding Commerce you're other The new always like just is Activate, Media.

is reflection is good takeaway and presents. a I of think what the XXX% think our a potentially that future the of I the the is strength indicator sort of So platform, of relationships,

Operator

in questions further no are queue. There the

to over closing Rajeev it back going So for now. turn I'm to remarks

Rajeev Goel

thank for fuel generation. strategic point was us investments joining you we today. saw prior Thank you, and accelerated and strong Stacie, margins all growth, where cash to inflection QX revenue an

the drove executed for of our for addition, operating and XXXX. which which In savings year, efficiencies, all top well significant set well against priorities we cost up us

emerging time which well to grow to or while minimum than continue in the look positioned grow revenue you market industry is more by double time, ad in We next and we're share, an areas expanding the evolves. rate the tech, of our unlock at exciting is we'll many to XXXX, and seeing very X. over streams. This forward as same month to invest key growth margins. We also expect At in XXXX, our in XX% our business

be a Conference have on Monday, afternoon, JMP and Conference X, Thanks, March everyone. the and X. the on Tuesday, will a As at March KeyBanc we great reminder,

PubMatic (PUBM) 26 Feb 242023 Q4 Earnings call transcript