Q3 2025 PubMatic Inc Earnings Call

November 10, 2025

Hello, everyone and welcome we will begin momentarily.

Speaker #1: My name is Emmanuel, and I will be your Zoom operator today. Thank you for your attendance. As a reminder, this webinar is being recorded.

Hello, everyone and welcome will begin momentarily.

Speaker #1: I will now turn the call over to Stacie Clements, with the Blue-Shirt Group.

Speaker #2: Good afternoon, everyone, and welcome to PubMatic's earnings call for the third quarter of 2025. This is Stacie Clements with the Blue-Shirt Group, and I'll be your operator today.

Speaker #2: Joining me on the call are Rajeev Goel, co-founder and CEO, and Stacie Pantelick, CFO. Before we get started, I have a few housekeeping items.

Hello, everyone and welcome will begin momentarily.

Speaker #2: Today's prepared remarks have been recorded after which Rajeev and Stacie will host live Q&A. If you plan to ask a question, please ensure you set your Zoom name to display your full name and firm, and use the raise hand function located at the bottom of your screen.

Hello, everyone and welcome to cosmetics third quarter 2025 earnings call Mike.

Speaker #2: A copy of our press release can be found on the website at investors.pubmatic.com. I would like to remind participants that during this call, management will make forward-looking statements, including without limitation, statements regarding our future performance, market opportunity, growth strategy, and financial outlook.

My name is Emmanuel and I will be your zoom operator today.

Thank you for your attendance today.

As a reminder, this webinar is being recorded.

I will now turn the call over to Stacie Clements with the Blue shirt group.

Speaker #2: Forward-looking statements are based on our current expectations and assumptions regarding our business, the economy, and future conditions. These forward-looking statements are subject to inherent risks, uncertainties, and changes in circumstances that are difficult to predict.

Good afternoon, everyone and welcome to Telematics earnings often a third contract 2025 to 50 clients at the Bruce you, Chris and I'll be your operator today, joining me on the call already parallel co founder and CEO and Steve <unk> CFO before we get started I have a few housekeeping items.

Speaker #2: You can find more Our actual results may differ materially from those in contemplated by the forward-looking statements. We caution you, therefore, against relying on any of these forward-looking statements.

Speaker #2: information about these risks, uncertainties, and other factors in our reports filed from time to time with the Securities and Exchange Commission and are available at investors.pubmatic.com, including our most recent Form 10-K and any subsequent filings on Form 10-Q or 8-K.

Today's prepared remarks have been recorded after attrition, even Steve will host live Q&A.

If you plan to ask a question. Please ensure you set your does it need to display a full name and firmed and use the raytheon function located at the bottom of your screen a copy of our press release can be found on the website at investors got thematic dotcom.

Speaker #2: All information discussed today is as of November 10, 2025, and we do not intend and undertake no obligation to update any forward-looking statement, whether as a result of new information, future developments, or otherwise, except as may be required by law.

I'd like to remind participants that during this call management will make forward looking statements, including without limitation statements regarding our future performance market opportunity growth strategy and financial outlook forward looking statements are based on our current expectations and assumptions regarding our business the economy and future conditions.

Speaker #2: In addition, a reconciliation of these measures to the most directly comparable GAAP measures is available in our press release. And now, I will turn the call over to Rajeev.

Speaker #2: today's discussion will include references to certain non-GAAP financial measures, including adjusted EBITDA, non-GAAP net income, cash flow from operations, and free cash flow. These non-GAAP measures are presented for supplemental informational purposes only and should not be considered a substitute for financial information presented in accordance with GAAP.

These forward looking statements are subject to inherent risks uncertainties and changes in circumstances that are difficult to predict you can find more information about these risks uncertainties and other factors that are reflects filed from time to time with the securities and Exchange Commission and are available on administered diplomatic to comp, including our most recent Form 10-K and any subsequent.

Filings on Form 10-Q or 8-K.

Our actual results may differ materially from those contemplated by the forward looking statements. We caution you their fight against relying on any of these forward looking statements. All information discussed today is as of November 10, 2025, and we do not intend and undertake no obligation to update any forward looking statement, whether as a result of new information future developments.

Speaker #3: Thank you, Stacie, and welcome, everyone. We delivered a stronger than expected quarter with revenue and adjusted EBITDA ahead of guidance, as well as strong cash flow, demonstrating the power of our platform, the continued diversification of our business, and our accelerated pace of innovation.

Speaker #3: CTV's significantly outpaced the market rate of growth and grew over 50% year over year, excluding political. Driven by increased premium supply, continued scaling of agency marketplaces, traction in our live sports marketplace, and growth of small and mid-market advertisers.

Or otherwise, except as may be required by law.

In addition, today's discussion will include references to certain non-GAAP financial measures, including adjusted EBITDA non-GAAP net income cash flow from operations and free cash flow. These non-GAAP measures.

Speaker #3: Emerging revenues grew over 80% year over year as sell-side targeting and newly launched AI solutions quickly ramped. We also strengthened our end-to-end platform with cutting-edge AI innovations that are deepening our competitive moat and unlocking measurable, incremental revenue opportunities.

Are presented for supplemental informational purposes, only and should not be considered a substitute for financial information presented in accordance with GAAP and reconciliation of these measures to the most directly comparable GAAP measures is available in our press release and now I will turn the call over to achieve thank.

Speaker #3: The industry is rapidly redefining itself, and we are actively shaping its future. The impending Google Ad Tech Remedies verdict will very likely shift market share.

Thank you Stacie and welcome everyone, we delivered a stronger than expected quarter with revenue and adjusted EBITDA ahead of guidance as well as strong cash flow demonstrating the power of our platform. The continued diversification of our business and our accelerated pace of innovation.

Speaker #3: The prioritization of data targeting and performance is shifting value creation in the ecosystem to the sell side. And over the past few months, we've seen a groundswell of AI-driven innovation reshaping the entire ecosystem.

CTV significantly outpaced the market rate of growth and grew over 50% year over year, excluding political driven by increased premium supply continued scaling of agency marketplaces traction in our lives sports marketplace and growth of small and mid market advertisers.

Speaker #3: AI is now at the center of every strategic conversation. Whether the objective is advertising performance, transparency, or automation, as an early adopter of AI, our leadership is a defining advantage for us, which will grow over time.

Emerging revenues grew over 80% year over year at south by targeting and newly launched AI solutions quickly ramped.

Speaker #3: We continue to innovate with an AI strategy centered around three distinct layers of programmatic advertising: the infrastructure layer, the application layer, and the transaction layer.

We also strengthened our end to end platform with cutting edge AI innovations that are deepening our competitive moat and unlocking measurable incremental revenue opportunities.

Speaker #3: For the infrastructure layer, we own and operate our full technology stack, giving us the efficiencies, control, and independence that many of our peers don't have, evidenced by multiple recent public cloud outages.

Speaker #2: revenue comes from software solutions, right? So obviously, they're well known for hardware, but it's really a combination of hardware and software. So I'll give you kind of three specific examples.

The industry is rapidly redefining itself and we are actively shaping its future.

The impending Google AD Tech revenues were eight will very likely shift market share.

Speaker #3: Through our technical collaboration with NVIDIA, we are deploying next-generation AI models on the world's most advanced GPU architecture. Five years in the making, this collaboration required three ingredients: physical infrastructure capable of deploying GPUs at scale, massive transaction volume to test and optimize across the full open internet, and technical sophistication to be an early adopter.

Speaker #2: So we use Nvidia GPUs to power real-time ad decisioning in very low-latency environments. So think about things like connected TV or live sports, where if we can process ad transactions faster, if we can cut latency, then that leads to fewer timeouts, more bids in the auction on our platform, and then more opportunities for us to win with the publisher.

Patients of data targeting and performance is shifting value creation in the ecosystem to the Samsung.

And over the past few months, we've seen a groundswell of AI driven innovation on shaping the entire ecosystem.

AI is now at the center of every strategic conversation, whether the objective is advertising performance transparency more automation.

As an early adopter of AI, our leadership as a defining advantage for us which will grow.

Speaker #3: Today, our infrastructure is a clear differentiator, and we believe years ahead of peers. The business impacts are tangible. 5X faster bid responses and 85% fewer auction timeouts, all recovering millions in ad spend.

Speaker #2: And so that boosts outcomes ROI for both advertisers and publishers, also boosts our revenue. The second example is using Nvidia Triton inference servers, where we use a specific hardware software implementation with them for traffic shaping.

We continue to innovate with an AI strategy centered around three distinct layers of programmatic advertising infrastructure later, the application layer and the transaction later.

For the infrastructure layer, we own and operate our full technology stack, giving us the efficiencies control and independents that many of our peers don't have evidenced by multiple recent public cloud outages.

Speaker #3: These results close the infrastructure advantage of Walt Gardens and directly translate into advertiser performance, with higher publisher yield. Looking ahead, as autonomous AI agents begin planning and negotiating ad campaigns, industry compute requirements are expected to grow dramatically.

Speaker #2: And traffic shaping is a very important and critical role that anybody on the sell side plays which is to figure out which of the roughly trillion ad impressions we have per day we should send to each particular DSP.

Through our technical collaboration with Nvidia, we are deploying next generation AI models on the world's most advanced GPU architecture.

Speaker #3: These early investments only widen our infrastructure advantage as legacy platforms are constrained by cloud and computing limits. This is the monumental shift for open internet digital advertising that PubMatic has been building for.

Speaker #2: And some DSPs, we might send tens of billions. Some might be single-digit billions. Some might be hundreds of billions of ad impressions. So it's really important that we pick the right ones and for every DSP, there's got to be a different decision set of calculus based on the types of advertisers and campaigns that are in their platform.

Five years in the making this collaboration required three ingredients physical infrastructure capable of deploying gpus at scale.

Massive transaction volume to test and optimize across the full open internet.

And technical sophistication to be an early adopter.

Speaker #3: Next, at the application layer, we're deploying some of the most exciting and innovative capabilities we've ever launched, embedding AI directly into our products to power intelligent workflows, and decision automation.

Today, our infrastructure is a clear differentiator and we believe years' ahead of peers.

Speaker #2: And of course, these decisions have to be made within milliseconds of the publisher requesting a bid from us. And then third is in the reporting area.

The business impacts are tangible five X faster bid responses and 85% fewer auction time outs all recovering millions in Ashland.

Speaker #3: We launched AI-powered buyer and publisher platforms that now handle more complexity, with significantly less manual effort. Our solutions cut campaign setup time by 87% and speed up issue resolution by 70%, translating directly into faster activations, higher productivity, and better outcomes for our customers.

Speaker #2: So, we're using an Nvidia software accelerator for Apache Spark, which allows us to streamline and improve the speed at which we're able to process data. That, in turn, allows for smarter optimization across a wide array of different use cases.

These results close the infrastructure advantage of walled gardens and directly translate into advertiser performance with higher publisher yield.

Looking ahead as autonomous AI agent speaking planning and negotiating ad campaigns.

Industry compute requirements are expected to grow dramatically.

Speaker #2: So those are, I think, hopefully just three tangible examples of how our Nvidia partnership is really leading to the leadership that we talked about in the prepared remarks in particular at the infrastructure layer, which then allows us to derive benefit in the application and transaction layers of the AI stack.

Speaker #3: Independent agency Butler Till has been using our AI-powered PubMatic for Buyers platform. Scott Ensen, their Chief Strategy Officer, said, and I quote, "Historically, systems don't talk to each other.

These early investments only widened our infrastructure advantage as legacy platforms are constrained by cloud computing limits.

This is the monumental shift for open Internet digital advertising that format. It has been building for.

Speaker #3: Data sets are disparate; Walt Garden data is hard to connect. AI allows us to scale human reasoning and run campaigns that truly look across all channels and optimize across them. Working with PubMatic for Buyers helps make that possible.

Next at the application layer, we're deploying some of the most exciting and innovative capabilities, we've ever launched embedding AI directly into our products and our intelligent workflows and decision automation.

Speaker #5: Very helpful. Thanks, Rajiv.

Speaker #6: This one comes from Rob Colbert at Upper Core. Please go ahead, Rob.

Speaker #3: End quote. This same enthusiasm is building on the publisher side. Our newly launched publisher suite already includes 17 operational AI agents guiding yield, diagnostics, and creative setup.

We launched the AI powered rider and publisher platforms that now handle more complexity with significantly less manual effort.

Speaker #7: Great. Thank you very much. Rajiv, why don't you go back to this 5X faster and bid response we had unlocking optimization strategies previously impossible with standard programmatic rates?

Our solutions cut campaign setup time by 87% and speed up issue resolution by 70% translating directly into faster activations higher productivity and better outcomes for our customers.

Speaker #7: Can you unpack that and assuming you have a very substantial lead in accelerating computing in this space, are there counterparties on the demand side who can take advantage of that, or do you think you need to take on a bigger role either in optimizing demand or hosting demand-side logic and optimization to sort of fully take advantage of those capabilities?

Speaker #3: Customer feedback has been exceptional. One of our largest omnichannel partners, Overwolf, told us that the PubMatic Assistant AI chatbot is unique with respect to the accuracy and speed of execution.

Independent Agency Butler Til has been using our AI powered Osmatic Provider's platform.

Speaker #3: And finally, at the transaction layer, we're preparing for the next major step, Agentic AI, where advertisers and publishers' AI agents will be able to transact directly through our infrastructure.

Scot Benson their chief strategy Officer said and I quote historically systems don't talk to each other datasets a disparate walled garden data is hard to connect AI allows us to scale human reasoning and brand campaigns that truly look across all channels and optimize across them.

Speaker #7: There's something more akin to what the walled gardens do maybe in terms of their highly vertically integrated supply chains. And then Steve, just wanted to maybe get a finer point on this trade desk issue.

Speaker #3: We are a co-founder of the newly established ad context protocol, or ad CP, alongside partners like Yahoo, LG Ad Solutions, and Raptive. And the first to publish a model context protocol specification for agent-to-agent communication in the programmatic industry.

Speaker #7: Just given current trends, do you see the potential to maybe see growth alongside their growth in the back half of '26? Thank you.

Working with thematic for buyers helps make that possible and quote.

The same enthusiasm is building on the publisher side, our newly launched publisher suite already includes 17 operational AI agents Guy.

Speaker #2: Yeah, thanks, Rob. So yeah, let me start with your first question, then I'll hand it over to Steve. So we absolutely do see opportunity to better leverage our infrastructure through vertical integration.

Speaker #3: We are establishing the protocols, safety mechanisms, and the interoperability standards that will enable AI agents across the entire ecosystem to transact efficiently and securely.

Diagnostics.

Okay.

Admin expenses.

Speaker #2: And I'll give you two examples of that. So, as we work more and more with mid-market focused DSPs, who themselves tend to be smaller, what we find is that there's a lot of opportunity for us to use our platform to help them compete more effectively.

Speaker #3: With this three-layer strategy, infrastructure, application, and transaction, we are building the complete system for Agentic AI. The high-performance car, the roads-to-drive-on, and the traffic laws to govern it all.

One of our largest Omnichannel partners Overwatch.

Just an AI chatbot is with respect to the accuracy and speed of execution.

And finally at the transaction later, we're preparing for the next major step Identic, AI, where advertisers and publishers AI agents will be able to transact directly through our infrastructure.

Speaker #3: While still in early days, we are already seeing material benefits. First, AI is driving increased platform usage. As we roll out new generative AI and Agentic AI features across our platform, our customers are able to launch campaigns and resolve issues faster and improve performance.

Speaker #2: And so what I mean by that is we have huge amounts of data on our platform from this 1 trillion daily ad impressions. A typical mid-market DSP, they may see 5% to 10% of the traffic that a very large DSP like a Google DV360 would see.

We are a co founder of the newly established add context protocol or add CP alongside partners like Yahoo, LG AD solutions and Raptors.

In the first set published a model context protocol specification for agents agent communication in the programmatic industry.

Speaker #2: And so these mid-market DSPs, because they're smaller in nature, they don't have access to all of that same data. At the same time, they also don't have access to all of the performance aspects of the auction that we're running on behalf of the publisher.

We are establishing protocols safety mechanisms and the interoperability standards that will enable AI agents across the entire ecosystem to transact efficiently and securely.

Speaker #2: And so there's opportunities for us, which we are working very hard on, to use our platform to help those DSPs derive better performance, better targeting, and ultimately better ROI, and that plays very closely with the infrastructure that we've deployed.

With this related strategy infrastructure application and transaction. We are building the complete system for Egencia AI and high performance car the roads to drive on and the traffic laws to govern it all.

While still in early days, we are already seeing material benefits.

Speaker #2: So that's one example, Rob, of where I think vertical integration where we can do more than we have done traditionally for a legacy DSP.

First AI is driving increased platform usage and.

Rollout, new German AI and agenda and features across our platform our customers are able to launch campaigns and resolve issues faster and improve performance.

Speaker #2: And I think these mid-market DSPs, because they're growing quickly, they're very hungry for that kind of collaboration and our ability to help them solve problems.

Nowadays our leadership in AI customers have repeatedly said they are not seen this level of innovation from other companies in the industry.

Speaker #2: And then the second is with our activate solution. Where buyers are buying directly in our SSP, and so here that faster processing of bids, better inferencing, all of these things they help make activate a very effective solution and we're seeing that play out in terms of the growth up 4X year over year campaign numbers are growing on a similar basis in terms of the number of campaigns run.

Second AI solutions are generating new revenue streams.

Example, is our new AI based yield optimization solution for publishers, which uses adaptive learning models to automate pricing and improve auction efficiency.

This AI solution is driving growth for our publishers, increasing their revenue on average by 10%.

Speaker #2: So we think there's a lot of benefit from vertical integration and as you said, Rob, that is somewhat akin to what the walled gardens do and of course it's no secret that they're very good at driving performance and we think that vertical integration is a key part of that.

Launched just a few months ago. It is already unlocked tens of millions of dollars in incremental revenue for our publishers and in turn is generating new pragmatic revenue of our emerging revenue category.

And third AI is improving our operational efficiency and profitability in.

Speaker #2: I'll turn it over to Steve now. Sure, Rob. Just correct me if I don't have the right question, but in terms of our growth opportunities in 2026, obviously we're going to come back shortly with the next earnings report to talk about 2026. There are a lot of things that we've focused on to put us in a very strong position to reaccelerate growth.

In the last two months, we deployed it doesn't AI agents internally to automate operational workflows accelerate development and reducing overhead.

Our goal is to deploy substantially more agents in the coming quarters to give us measurable margin leverage while we continue to invest and strengthen our long term memory.

Speaker #2: You've heard some of the stats from the third quarter, strong CTV growth, mobile as well as our emerging revenues. So once we work through the current transition that we've identified in the second half of this year, we are very confident that we're going to be growing on a number of different fronts.

Looking ahead, despite the significant progress we have made we believe we're just scratching the surface.

I will continue to drive higher usage across our platform generate incremental revenue streams and improve operational leverage.

And because we're investing across all three layers dramatic is poised to lead the next era of magenta AI advertising.

Speaker #2: Just as a reminder, we've been investing in secular growth areas. This has been a long-term strategy and we're seeing the results of that. We are expanding diversifying our DSP base we're growing very strongly with commerce DSPs, specialized DSPs around pharma, and so the coupling of our focus on secular growth, expanding our buyer base, and then innovation around AI not just in the infrastructure, but certainly in terms of capabilities, functionality.

AI is a powerful driver of our long term growth strategy is equally important that we execute across our four other strategic priorities I outlined last quarter.

I am pleased to report that we're making significant progress in each of those areas.

First we're broadening our demand side ecosystem and accelerating our pipeline.

We expanded a top three DSP partnership introducing programmatic guaranteed yields streamline execution for advertisers across premium streaming content.

This integration reduces friction and heal setup accelerates time to market for campaigns and unlocks incremental budgets.

Speaker #2: We launched this past quarter AI-driven publisher products and that will continue to be sources of growth. So we're very positive about the growth in the second half of '26.

It's a great example of how our relationships with global DSP partners are becoming more strategic as we diversify beyond the legacy DSP.

We also launched a new partnership with Bliss and Omnichannel DSP that brings high value demand from leading global brands across automotive retail and financial services.

Speaker #2: As we look at the plethora of opportunities ahead of us.

Speaker #7: Great. Thank you, Steve. Thank you, Rajiv.

Speaker #6: Our next question comes from Jacob Armstrong at KeyBank. Please go ahead, Jacob.

<unk> combines T mobile's app engagement data with real World movement patterns and transaction signals to drive performance focused campaigns with measurable outcomes.

Speaker #8: Thanks, Steve. My question is from Jacob on for Justin. Can you discuss how you believe the role of SSP needs to evolve in the coming years as agentic AI expands?

Brand awareness to store visits and sales.

This partnership expands our reach into premium brand advertisers, who prioritize full funnel measurement and offline attribution.

Speaker #8: And what are the key investments needed to ensure PubMatic is as best positioned to capitalize off this transition over the next few years?

These many market focus dsp's likewise represent one of the fastest growing advertising segments in Q3 AD spend from this segment grew 25% plus year over year, reflecting meaningful progress in our diversification strategy.

Speaker #2: Sure. Yeah. So I think the role of the SSP is going to expand significantly from transaction automation to a much bigger role in workflow automation.

Speaker #2: Particularly around audience and inventory discovery, planning, and measurement. So if we think about where programmatic technologies have been applied so far, maybe for the last 15 or so years, I would say it's been heavily applied at the transaction level.

Second we're accelerating our investment on the buy side, we're extending our reach with independent agencies and direct advertisers expanding our focus from the top 20 agencies to the top 150 and from the top 500 advertisers to approximately 1500 supply path.

Speaker #2: So meaning we have an ad impression, and we want to get a number of advertiser bids on it, and then we're helping DSPs bid on that individual ad impression.

<unk> optimization remains a key growth driver with the majority of this addressable market is greenfield opportunity.

Spo represented over 55% of activity on our platform in Q3.

Speaker #2: And so there's been a lot of maturation, innovation, and focus on that single atomic impression. But we still have RFPs that advertisers send or agencies send out to publishers via email, fill out the spreadsheet. We're launching this ad campaign; we want to understand what audiences or what inventory you might have available.

As a pioneer in SCO, we are the leading incumbent offerings scale and a rich history of performance and efficiency gains.

Building on this momentum we are onboarding more buyers onto activate our director supply buying platform.

Over the first nine months of the year. The number of active campaigns grew more than four acts over last year with a 35% increase in customers.

Speaker #2: Some human at the publisher fills that out, and then they email that back to the agency, the agency collects those, and then they decide where they're going to set up and allocate budget.

Activity is a key solution that enables the ecosystem wide push for increased performance transparency and efficiency of programmatic advertising.

Speaker #2: So that's still a largely manual process. Some things have improved, but still a lot of manual approaches. So I think there's a huge opportunity to think outside of the pure atomic impression or transaction around the discovery and planning, and then after the transaction to the measurement to use AI where an advertiser's agent or an agency's agent can say, "Hey, I'm launching this product or service please tell me what you can do for me as a publisher or media owner from an audience and an inventory perspective and we can take a structured response aggregate that up across many of the publishers that we're working with and then deliver a pre-constructed campaign brief to the agency the agency can begin to buy that using our transaction pipes and then we can have a feedback loop around measurement with that.

And this is only the beginning we've begun integrating AI powered eat into Egypt workloads into activates to boost performance and reduce friction, making advertiser adoption even easier.

We believe that this new technology to have a massive impact on activate adoption over the medium term as we accelerate investment in mid tail buyers.

Finally, we continue to deepen our integration with DSP is to create value beyond real time bidding transactions.

We are the first SSP to integrate the trade desks price discovery and provisioning API, which allows publishers and advertisers to share deal meta data between our platforms to better identify and resolve issues with underperforming deals in real time.

Today over 50% of programmatic deals sit dormant because this information was previously only available offline.

Speaker #2: And then the agency can revise their campaign. So I think there's a lot that can be done outside of that single transaction element. That's really where we are focused with the transaction layer of the stack that I mentioned earlier with the Ad Context Protocol. We're working out what exactly those structured requests and responses should look like, and then how do they get set up, who owns what data, and then how do they get optimized.

We anticipate this innovation will accelerate our share of PMT and <unk> deals as we drive adoption together with the trade desk.

Third our momentum and activate is also fueling our growth in CTV.

Excluding political advertising CTV revenue grew more than 50% year over year and the format remains our primary growth engine for our business.

Live sports is an especially exciting category biding activity rose more than 150% sequentially from Q2 to Q3 as we scaled our AI powered live sports marketplace and launched new programmatic guaranteed deals around tentpole events like the U S silica for tennis and Monday night football.

Speaker #2: So I think there's a long runway, Jacob, ahead in that area.

Speaker #8: Thank you.

For example, Fremantle, 1 of the, world's largest entertainment, content creators behind franchises like American Idol, America's Got Talent and The X Factor generated. A 78% increase in incremental, programmatic demand across their expanding fast Channel portfolio by partnering, with PubMatic.

For example, Fremantle, one of the world's largest entertainment content creators behind franchises like American Idol, America's Got Talent, and The X Factor, generated a 78% increase in incremental programmatic demand across their expanding FAST Channel portfolio by partnering with Poem.

We also continued to expand our CTV publisher footprint.

Speaker #6: Next question comes from @Alter at Jeffries. Please go ahead.

New deals and expanded partnerships with a number of free AD supported streaming services, including to the future today and local now added to our strong roster with over 90% of the top 30 global streamers now on automatic.

This is a remarkable outcome and highlights significant incremental ad Revenue. Our platform generates for our partners.

Speaker #9: Hi. Thanks for the question. I wanted to talk about the investments you're making to meet the demand from the mid-market DSPs like Mountain. Where exactly are those going to show up?

Additionally, we're expanding app formats on our platform.

In collaboration, with densu. We we recently launched pads for CTV through activity.

In collaboration with densu. We recently launched pads for CTV through activity.

Speaker #9: Is that more headcount tech investments? It would be great to talk about the color on that.

We offer these premium content streamers incremental AD demand that other platforms can't offer because of the scale of our FCO activity curation and commerce businesses.

Speaker #2: Sure. So we've been very focused throughout this year and really leading into this year is the efficient as possible in terms of where we deploy our teams.

Advertisers can now serve Dynamic contextually relevant ads. When viewers pause content, representing a premium brand, safe moment, that boosts engagement and yields incremental revenue for publishers.

Advertisers can now serve dynamic, contextually relevant ads. When viewers pause content, representing a premium brand, it creates a safe moment that boosts engagement and yields incremental revenue for publishers.

For example, Fremantle the world's largest entertainment content creators by in franchises like American Idol America's got talent and the X factor generated a 78% increase in incremental programmatic demand across an expanding fast channel portfolio by partnering with kinetic.

Speaker #2: And we made a very conscious decision in the last 18 months to move more and more resources towards the facet growing areas, segment growth areas.

What's more with 155 billion of AD dollars. Still, in linear television, we believe our CTV business has a long runway for growth given the scale performance and AD formats. Now available for buyers on butic.

What's more with 1 155 billion of AD dollars. Still, in linear television, we believe our CTV business has a long runway for growth given the scale performance and AD formats. Now available for buyers on thematic.

Speaker #2: Of which, of course, critical DSPs are a part of that. And so we've been increasing investment in the team that is that goes directly in calls on these DSPs.

This is a remarkable outcome and highlight significant incremental AD revenue our platform generates for our partners.

And forth. We're making significant progress in scaling, our emerging revenue streams, which grew over 80% year-over-year in the third quarter.

Additionally, we're expanding AD formats on our platform.

Speaker #2: This year, we increased thus far about 19% in terms of headcount. And we've done that by reallocating team members around the organization. You can see from our results our overall headcount is roughly flat.

In collaboration with Dentsu group, we recently launched pod that's for CCD through activity.

Commerce media continues to gain momentum. We continue onboarding and scaling with some of the world's leading retailers and transaction-based enterprises as they seek to activate and monetize their first-party audience intelligence.

Advertisers can now serve dynamic contextually relevant ads couldn't viewers pause content, representing a premium brand safe moment that boosts engagement and yield incremental revenue for publishers.

Speaker #2: And so we've done a very careful analysis of how we're going to keep on leveraging our existing resources. And of course, all of this is supported by the progress we've made in AI in terms of becoming more efficient just in our daily activities.

Partnerships are expanding our reach beyond the traditional impression model. While generating platform fees and database, monetization that accelerate Revenue growth.

These partnerships are expanding our reach beyond the traditional impression model, while generating platform fees and database monetization that accelerates revenue growth.

What's more with 155 billion of AD dollars still in linear TV, we believe our CTV business has a long runway for growth given the scale performance and AD formats now available for buyers on dramatic.

Southside curation is another fast growing emerging Revenue stream.

We expanded partnerships with leading data providers around the world.

We expanded Partnerships with leading data providers around the world.

Speaker #2: And so when I look ahead to 2026, I'm anticipating we're going to keep our headcount roughly flat, but we're going to keep increasing the resources against those areas that are driving the greatest results.

Nielsen, for example, tapped pomat as an exclusive sell-side, partner to bring their more than 10,000 audience segments to Australian advertisers and agencies.

Nielsen for example, tapped pick as their exclusive sell side, partner to bring their more than 10,000 audience segments to Australian advertisers and agencies.

And fourth we're making significant progress in scaling our emerging revenue streams, which grew over 80% year over year in the third quarter.

Together with the previously mentioned AI yield solution for publishers.

These initiatives Drive incremental high margin Revenue that is scaling quickly.

Commerce media continues to gain momentum.

In closing.

Speaker #2: And we're on a great mission to do that. And it's not just on the OPEX side. We are looking at our CapEx and we don't anticipate increasing our CapEx in '26 based upon sort of all the optimization, the work with NVIDIA, a lot of other things that are in the pipeline around efficiency and optimizations.

We continue onboarding and scaling with some of the world's leading retailers and transaction based enterprises as they seek to activate and monetize their first party audience intelligence.

Our results.

Differentiated business model.

In closing, our results, demonstrate the power of our differentiated business model.

We continue to innovate, diversify our business, and operate with discipline.

These partnerships are expanding our reach beyond the traditional impression model, while generating platform fees and database monetization that accelerate revenue growth.

We are leading from a position of strength.

Shell saturation is another fast growing emerging revenue stream.

We're confident that the investments we're making today, particularly across the three layers of our AI strategy, are expanding our competitive advantage while creating sustainable, profitable growth over the mid to long term.

We are leading from a position of strength. We're confident that the Investments we're making today, particularly across the 3 layers of our AI strategy are expanding our competitive advantage while creating sustainable profitable growth over the mid to long term.

Speaker #2: And so, from our perspective, we're very confident that we are able to move dollars against the right opportunities without burning the P&L. So, we're feeling good about the progress.

We expanded partnerships with leading data providers around the world.

Nielsen for example, tapped pragmatic as their exclusive sell side partner to bring them more than 10000 audience segments to Australia and advertisers and agencies.

Together with the previously mentioned AI yield solution for publishers. These.

Speaker #2: And our ability to increase our margins as revenue reaccelerates.

All of this is happening alongside a once in a generation shift in digital advertising, that will likely result in the competitive landscape being reshaped where even a modest share shift could unlock substantial incremental, high margin revenue for us, given our owned and operated infrastructure.

These initiatives drive incremental high margin revenue that is scaling quickly.

Speaker #9: Thanks, Steve.

In closing our results demonstrate the power of our differentiated business model, we continue to innovate and diversify our business and operate with discipline.

Speaker #6: Steve, unfortunately, we are just about out of time. So I'm going to turn the call back over to Rajeev for closing remarks, and we'll talk to you all in your follow-up calls very shortly.

We are leading from a position of strength, we're confident that the investments, we're making today, particularly across the three layers of our AI strategy are expanding our competitive advantage, while creating sustainable profitable growth over the mid to long term.

Speaker #2: Thank you, Stacie, and thank you all for joining us today. Our results demonstrate the power of our differentiated business model. We continue to innovate, diversify our business, and operate with discipline.

Speaker #2: Our AI innovation is leading the industry with measurable outcomes driving momentum across the ecosystem. Looking to 2026 and beyond as revenue growth reaccelerates, we anticipate margin expansion at both the gross and adjusted EBITDA levels because of our efficient and leveraged business.

All of this is happening alongside a once in a generation shift in digital advertising that will likely result in the competitive landscape being reshaped or even a modest share shifts could unlock substantial incremental high margin revenue for us given our owned and operated infrastructure.

This outperformance was driven by CTV combined with stronger than expected year-over-year growth for online video and mobile app.

This outperformance was driven by CTV, combined with stronger-than-expected year-over-year growth for online video and mobile app.

We manage expenses, leverage Ai, and delivered improved. Margins and strong free, cash flow.

Speaker #2: We look forward to seeing many of you at upcoming conferences, including the UBS Technology and AI Conference on December 2nd, the Wolf Virtual SMIDCap Conference on December 3rd, and Raymond James TMT Conference on December 9th.

Nevada has not only positioned to adapt we're helping define what comes next we have the technology the talent and the financial foundation to build a more intelligent efficient and enduring business, one that create lasting value for our customers partners and shareholders.

Stepping back. It is important to call out that our efforts to transform our business started. Several years ago as we anticipated, the value of the ecosystem shifting to the sell side.

We built an end-to-end solution that prioritizes control performance and transparency, while recognizing the need to diversify our business and unlock new path to monetization.

Let me now turn the call over to Steve.

Thank you Rajiv and welcome everyone.

We exceeded expectations on both revenue and adjusted EBITDA.

This outperformance was driven by CTD combined with stronger than expected year over year growth for online video and mobile App.

Today over 40% of our revenue is derived from CTV mobile app, and emerging revenue streams, which are represent long-term value for our business up from less than 30% 2 years ago.

Today over 40% of our revenue is derived from CTV mobile app, and emerging revenue streams which represent long-term value for our business up from less than 30% 2 years ago.

We managed expenses leveraged AI and delivered improved margins and strong free cash flow.

Further, these efforts directly benefit our profitability and enable continued innovation and investment in the business.

Journey to the quarterly results, starting with the revenue breakdown.

Turning to the quarterly results, starting with the revenue breakdown.

Stepping back it is important to call out that our efforts to transform our business started several years ago as we anticipated the value of the ecosystem shifting to the sell side.

To provide apples, for apples comparability, year-over-year, growth rates for Video are adjusted to exclude political ad spend.

We built an edge to edge solution that prioritizes control performance and transparency, while recognizing the need to diversify our business and unlock new paths to monetization.

On that basis. Total Omni Channel video, revenues grew 21% underscoring. The strength of our premium video portfolio and growing adoption of AI powered optimization across formats.

On that basis. Total Omni Channel video, revenues grew 21% underscoring. The strength of our premium video portfolio and grow and Adoption of AI powered optimization across formats.

Today over 40% of our revenue is derived from CTV mobile app and emerging revenue streams, which represent long term value for our business up from less than 30% two years ago.

Within this category, CTV once again, grew over 50% year-over-year driven by the success of our live sports Marketplace.

And growth in programmatic guarantee deals across expanding buyer relationships.

Further these efforts directly benefit our profitability and enable continued innovation and investment in the business.

We monetize CTV inventory from over 90% of the top 30 Global streamers.

We monetize CTV inventory from over 90% of the top 30 global streamers.

Turning to the quarterly results starting with the revenue breakdown.

Omni Channel video contributed, approximately 38% of total revenue in Q3 2025.

To provide apples for apples comparability year over year growth rates for video are adjusted to exclude political ad spend.

Emerging revenue streams, continue their high growth trajectory growing over 80% year-over-year. While scaling to 10% of total revenue in the third quarter.

Emerging revenue streams continue their high growth trajectory, growing over 80% year-over-year, while scaling to 10% of total revenue in the third quarter.

On that basis total Omnichannel video revenues grew 21% underscoring the strength of our premium video portfolio and growing adoption of AI powered optimization across formats.

Within this category CTV once again grew over 50% year over year, driven by the success of our live sports marketplace.

this growth represents incremental, durable revenue streams Beyond of course, Health side platform capabilities, most notably year-over-year revenue from activate through over 100% in our curation and Data Business connect grew over 40%

This growth represents incremental, durable revenue streams Beyond a course healthside platform capabilities. Most notably year-over-year revenue from activate through over 100% in our curation and Data Business connect grew over 40%.

And growth in programmatic guaranteed deals across expanding by our relationships.

We monetize CTV inventory from over 90% of the top 30 global streamers.

Based on the results, we are seeing we will continue to invest for incremental growth opportunities. That diversify our Revenue, like the new AI driven product capabilities for Publishers that are already showing meaningful traction.

Omnichannel video contributed approximately 38% of total revenue in Q3 2025.

Emerging revenue streams continue their high growth trajectory growing over 80% year over year, while scaling to 10% of total revenue in the third quarter.

The growth across these key, circular areas helped offset the impact from lower spend by a large DSP, we identified last quarter.

The growth across these key, secular areas helped offset, the impact from lower spend by a large DSP, we identified last quarter.

This growth represents incremental durable revenue streams beyond of course sell side platform capabilities, most notably year over year revenue from activate through over 100% in our curation and databases connect grew over 40%.

Following our optimizations and integration adjustments. By SPO Partners spend stabilized from this DSP in August, and September resulting in lower, but steady run rate.

Following our optimizations and integration adjustments by SPO Partners spent stabilized from this DSP in August, and September resulting in lower, but steady run rate.

Excluding this DSP display grew in the low single digit percentages.

Based on the results. We are seeing we will continue to invest for incremental growth opportunities that diversify our revenue like the new AI driven product capabilities for publishers that are already showing meaningful traction.

With respect to Q3 ad, spend across the top 10 verticals in aggregate. They grew in the single digit percentages year-over-year,

With respect to Q3 ad. Spend across the top 10 verticals in aggregate. They grew in the single-digit, percentages year-over-year.

And fitness personal finance and Technology each increased over 15%.

The growth across these key secular areas helped offset the impact of lower spend by a large DSP, we identified last quarter.

We saw software Trends in business and on Automotive, which declined single digit percentages in the quarter.

We saw softer Trends in business and an automotive which declined single-digit percentages in the quarter.

Following our optimization and integration adjustments by Spo partners Spence stabilize from this DSP in August and September, resulting in lower but steady run rate.

As anticipated display revenue was down minus 5% year over year. It was the most effected by the FTE impact.

Importantly, our AI driven by our platform is resonating. Well with performance focused buyers across CTV mobile app and e-commerce verticals and we believe lays the foundation for sustainable growth in the quarters ahead

Excluding this DSP display grew in the low single digit percentages.

With respect to Q3 AD spend across the top 10 verticals in aggregate. They grew in the single digit percentages year over year.

Health and fitness personal finance and technology each increased over 15%.

We saw softer trends in business and in automotive, which declined single digit percentages in the quarter.

Regionally, APAC and EMEA revenues grew by 12% and 7% respectively, offsetting a 14% decline in the Americas, which was primarily due to spending declines from large DSP buyers.

Moving on to our operating priorities.

AD spend from our mid tier DSP partners grew over 25% year over year in Q3.

We continue to invest and reallocate resources to the highest return areas of the business.

Importantly, our AI driven buyer platform is resonating well with performance focused buyers across CTV mobile App and E Commerce verticals and we believe lays the foundation for sustainable growth in the quarters ahead.

As the regime noted, we're seeing strong growth across our DSP mix and within Activate, as customers increase usage and new products drive incremental revenue.

as regime noted we're seeing strong growth across, our DSP, mix and within activate as customers, increase usage and new products, Drive incremental Revenue,

We anticipate that new buyer relationships like Bliss and mountain will bring incremental AD demand across a wide portfolio of verticals.

Our focus on generative AI is also improving—operational agility, streamlining internal workflows, and allowing us to redirect resources toward growth initiatives without adding structural costs.

Our focus on generative AI is also improving, operational agility streamline, and internal workflows and allowing us to redirect resources towards growth initiatives without adding structural cost.

Regionally APAC and EMEA revenues grew plus 12% and plus 7%, respectively offsetting of minus 14% decline in the Americas, which was primarily due to spend declines from large CSP buyer.

This efficiency has allowed us to expand our sales, focus the team on buyers, and increase growth spending from existing partners, as well as onboard new partners.

This efficiency has allowed us to expand our sales team focused on buyers, grow spend from existing partners, and onboard new partners.

Moving onto our operating priorities.

We are making great progress integrating with the fast-growing mid- to long-tail segments, and so far in 2025, we've added over 25 new DSP partners.

We continue to invest and reallocate resources to the highest return areas of the business.

As Rajiv noted, we're seeing strong growth across our DSP mix and within activate as customers increased usage of new products drive incremental revenue.

All of these efforts helped us counter the near-term. Headwinds from Legacy dsps, and further diversify beyond the top 5. As I described last quarter,

Our focus on degenerative AI is also improving operational agility, streamlining internal workflows, and allowing us to redirect resources towards growth initiatives without adding structural cost.

To our long-term strategy is being Nimble and identifying opportunities and then executing rapidly to capitalize on them.

Core to our long-term strategy is being Nimble, and identifying opportunities and then executing rapidly to capitalize on them.

We have achieved this while managing our costs and consistently delivering profits in many different environments.

The foundation of this approach is expanding our capacity, while driving down our unit costs.

This efficiency has allowed us to expand our sales team focused on buyers and grow spend from existing partners and onboard new partners.

We are making great progress integrating with the fast growing mid to long tail segment and so far in 2025, we've added over 25, New DSP partners.

We process approximately 87, trillion gross impressions in. Q3 a 24% increase over last year, and a 12%, sequential gain versus Q2.

We processed approximately 87 trillion gross impressions in Q3, a 24% increase over last year, and a 12% sequential gain versus Q2.

All of these efforts help us counter the near term headwinds from legacy DSP.

nearly 60% of total Impressions were from CTV and mobile app, inventory, highlighting, our increasing focus on high engagement channels

Further diversify beyond the top five as I described last quarter.

Core to our long term strategy is being nimble and identifying opportunities and then executing rapidly to capitalize on them.

Further the increase in Impressions is highly leveraged over a fixed cost base over a trailing 12-month basis, unit costs in the third quarter decline 19% over the comparable prior year period.

We have achieved this while managing our costs and consistently delivering profit in many different environments.

In terms of operating expenses our early investments in AI to drive operational, efficiency are yielding measurable results.

In terms of operating expenses, our early investments in AI to drive operational efficiency are yielding measurable results.

The foundation of this approach is expanding our capacity, while driving down our unit costs.

We processed approximately 87 trillion gross impressions in Q3, a 24% increase over last year, and a 12% sequential gain versus Q2.

In Investments to the areas that deliver the strongest Roi.

Year to date every quarter. We have successfully kept, our total operating expenses. Roughly flat at 51 million while realigning Investments to the areas that deliver the strongest Roi.

this allows us to scale profitably, even as we invest ahead of growth,

Nearly 60% of total impressions were from CTD and mobile App inventory, highlighting our increasing focus on high engagement channels.

For example, we increase our buyer focused sales team by 19% in Q3 compared to the prior year. While the overall total headcount was flat.

For example, we increase our buyer-focused sales team by 19% in Q3 compared to the prior year, while the overall total headcount was flat.

Further the increase in impressions as highly leveraged over a fixed cost base.

Over a trailing 12 month basis unit costs in the third quarter declined 19% over the comparable prior year period.

This discipline approach enables us to deliver our 38 straight quarter of adjustable to profitability.

This discipline approach enables us to deliver our 38 straight quarter of adjustable profitability.

This is a track record few companies. In our sector can match.

Okay.

In terms of operating expenses, our early investments in AI to drive operational efficiency are yielding measurable results.

Q3 adjusted. Ibido was 11.2 million or 16% margin which included foreign exchange costs of approximately 1 million due to the weakening US dollar over the quarter.

Q3 adjusted EBITDA was $11.2 million, or a 16% margin, which included foreign exchange costs of approximately $1 million due to the weakening US dollar over the quarter.

Year to date every quarter, we have successfully kept our total operating expenses roughly flat at $51 million, while realigning the vast majority areas that deliver the strongest ROI.

Us gaap. Net loss was minus 6.5 million or -4 cents per diluted share

Us gaap. Net loss was minus 6.5 million or minus 14 cents per diluted share

moving to cash and our Capital allocation.

Moving to cash and our capital allocation.

This allows us to scale profitably, even as we invest ahead of growth.

Our balance sheet remains a core strategic advantage.

For example, we increased our buyer focused sales team by 19% in Q3 compared to the prior year, while the overall total head count was flat.

In the third quarter, we generated 32.4 million in net, operating cash, flows and free cash, flow of 22.8 million.

This disciplined approach enabled us to deliver on a 38 straight quarter of adjusted EBITDA profitability.

In addition to efficient working Capital Management, there were 2 other factors that improved our cash flow for this period.

This is a track record few companies in our sector can match.

The DSP that it made changes in mid 2024 return to growth in Q3, which favorably improved our dsos.

The DSP that it made changes in the mid 2024 return to growth in Q3, which favorably improved our dsos.

Q3, adjusted EBITDA was $11 2 million or 16% margin, which included foreign exchange costs of approximately $1 million due to the weakening U S dollar over the quarter.

It was also a reduction in cash taxes paid because of the new federal tax bill that went into effect earlier this year.

U S. GAAP net loss was minus $6 5 million or minus <unk> 14 cents per diluted share.

Moving to cash and our capital allocation.

To underscore our long-term ability to generate cash, since the beginning of 2021 through Q3, we have generated over $390 million in net cash from operations and more than $215 million in free cash flow.

Our balance sheet remains a core strategic advantage in.

In the third quarter, we generated $32 4 million in net operating cash flows and free cash flow of $22 8 million.

We ended the quarter with 136.5 million in cash and zero debt.

Given the strength, we continue to deploy our Capital to maximize shareholder value.

In addition to efficient working capital management, there were two other factors that improved our cash flow for this period.

The DSP that <unk> made changes in mid 2024 returned to growth in Q3, which favorably improved our dsos.

Since the inception of our repurchase program in February 2023, through the end of Q3, we have bought back 12.4 million Class A common shares for $180.6 million.

There was also a reduction in cash taxes paid because of the new federal tax Bill that went into effect earlier this year.

We have 94.4 million remaining or repurchase program, authorized for the end of 2026.

To underscore our long term ability to generate cash since the beginning of 2021 through Q3, we have generated over $390 million and net cash from operations and more than $215 million in free cash flow.

This program, combined with our ongoing investments in AI and innovation, reflects a balanced approach to capital allocations and a commitment to long-term shareholder value.

We ended the quarter with $136 5 million in cash and zero debt.

Given the strength, we've continued to deploy our capital to maximize shareholder value.

Turning to a Q4 Outlook. We anticipate strong growth in secular areas of the business, including double-digit growth for CTV, when excluding political advertising and 30% plus growth for emerging revenues,

Since the inception of our repurchase program in February 2023 through the end of Q3.

as a reminder, Q4 2024 political advertising represented about 12% of Revenue, nearly 80% of, which was via CTV

We have bought back $12 4 million class a common shares for $186 million.

We have $94 4 million remaining in our repurchase program authorized at the end of 2026.

In terms of latest trends in October, the typical holiday, seasonal uptick thus far has been relatively muted for some consumer discretionary advertisers such as food and drink and arts and entertainment.

This program combined with our ongoing investments in AI innovation reflects a balanced approach to capital allocation and a commitment to long term shareholder value.

We expect Q4 Revenue to be in the range of 73 to 77 million.

Turning to our Q4 outlook, we anticipate strong growth in secondary areas of the business, including double digit growth for CTD, when excluding political advertising and 30% plus growth for emerging revenues.

As it relates to the large DSP that declined in July, we are assuming its associated revenue to be flat in Q4 relative to Q3.

We anticipate Q4 operating expenses to be similar to Q3's, as AI-driven efficiencies continue to offset selective investments in our sales team.

As a reminder, Q4 2020 for political advertiser represented about 12% of revenue.

80% of which was by a C T D.

Q4 adjusted Eva is projected to be in the range of 19 to 21 million which also factors in continued weakness of the US dollar.

We anticipate Q4 operating expenses to be similar to Q3's level, as AI-driven efficiencies continue to offset selective investments. In our sales team, Q4 adjusted EBIT is projected to be in the range of $19 million to $21 million, which also factors in the continued weakness of the US dollar.

In terms of the latest trends in October the typical holiday seasonal uptick thus far has been relatively muted for some consumer discretionary AD vertical such as food and drink and Arts and entertainment.

Accordingly, we are taking a prudent approach to guidance based on the latest trends.

For the full year, we expect Revenue to be in the range of 276 to 280 million and adjusted. Even to be in the range of 53 to 55 million inclusive of more than 5 million investigated negative FX impact

For the full year, we expect revenue to be in the range of $276 million to $280 million and adjusted EBIT to be in the range of $53 million to $55 million, inclusive of more than $5 million in investigated negative FX impact.

We expect Q4 revenue to be in the range of $73 million to $77 million.

As it relates to the large DSP that decline in July we are assuming its associated revenue to be flat in Q4 relative to Q3.

We are maintaining a full year capex, projection at 15 million, which is year-over-year reduction, made possible by AI driven optimization efforts.

We anticipate Q4 operating expenses to be similar to Q3's level as AI driven efficiencies continue to offset selective investments in our sales team.

In closing, our Q3 results, highlighted the durability of our financial model and validate. The progress. We are making behind our business transformation.

Looking ahead, we're confident in our robust, multifaceted strategy.

Q4, adjusted EBITDA is projected to be in the range of $19 million to $21 million, which also factors in continued weakness of the U S. Dollar.

Our AI first end-to-end platform is driving measurable results.

Our AI-first end-to-end platform is driving measurable results.

For the full year, we expect revenue to be in the range is $276 million to $280 million and adjusted EBIT to be in the range of $53 million to $55 million inclusive of more than $5 million of estimated negative FX impact.

We're adding new revenue streams, expanding our SPO relationships, and rapidly diversifying our DSPs in line with future growth opportunities in Commerce.

We're adding new revenue streams, expanding our SPO relationships, and rapidly diversifying our DSPs in line with future growth opportunities in commerce.

Performance, CTV and mobile app.

We are maintaining our full year capex projection of $15 million, which is year on year reduction made possible by AI driven optimization efforts.

With respect to potential remedies in the Google adtech antitrust. Trial we continue to believe that any remedies that level the competitive playing field. Whether structural Behavioral or both will benefit the open internet and pomat

In closing our Q3 results highlighted the durability of our financial model and validate the progress we are making behind our business transformation.

Looking ahead, we're confident in our robust multifaceted strategy.

26 and Beyond as a revenue growth re accelerates. We anticipate margin expansion in both the gross and adjusted ebit levels because of our efficient and leveraged business.

In 2026 and beyond, we anticipate revenue growth to re-accelerate. We expect margin expansion in both the gross and adjusted EBITDA levels due to our efficient and leveraged business.

Our AI first end to end platform is driving measurable results.

We're adding new revenue streams, and expanding our spo relationships and rapidly diversifying our DSP in line with future growth opportunities E Commerce performance CTV and mobile App.

Our decade-plus experience owning and operating our global private cloud infrastructure has given us several advantages.

First.

It has enabled us to expand capacity while, at the same time, progressively reduce our rate of capex and drive down unit costs through optimization initiatives.

First, it has enabled us to expand capacity while at the same time. Progressively reduce our rate of capex and drive down unit costs through optimization initiatives.

With respect to potential remedies in the Google AD Tech antitrust trial, we continue to believe that any remedies that level, the competitive playing field, whether structural behavioral or both will benefit the open internet and <unk>.

Second, it's allowed us to invest early on in next-generation technology with Nvidia.

Today, our infrastructure is a clear differentiator with investments. We are well ahead of our peers, which will continue to drive efficiencies and business impacts.

Today, our infrastructure is a clear differentiator with Investments. Well, ahead of our peers that will continue to drive efficiencies and business impacts.

In 2026 and beyond as the revenue growth accelerates, we anticipate margin expansion at both the gross and adjusted EBITDA levels because of our efficient and leverage business.

We're also continuing to leverage AI to drive efficiency and increase our team’s productivity.

Our decade, plus experience owning and operating a global private cloud infrastructure has given us several advantages.

We are also continuing to leverage AI to drive efficiency and increase our team's productivity. We anticipate total headcount will remain relatively flat in 2026, while investments supporting our fastest-growing areas of our business will increase through internal reallocations.

We anticipate total headcount will remain relatively flat in 2026, while investments supporting our fastest growing areas of our business will increase through internal reallocations.

First.

This enabled us to expand capacity while at the same time progressively reduce our rate of Capex and drive down unit costs through optimization initiatives.

and finally, we are also laser focused on free cash flow generation and aim to increase cash flow next year's supported by further working Capital Improvements and incremental ai-driven efficiencies

And finally, we are also laser-focused on free cash flow generation and aim to increase cash flow next year, supported by further working capital improvements and incremental AI-driven efficiencies.

Second it's allowed us to invest early on in next generation technology with a video.

Collectively, we believe our efforts will drive a return to double-digit revenue growth in the future.

Collectively, we believe our efforts will drive a return to double digit Revenue growth in the future.

With that, I'll turn the call over to Stacey for questions.

Today, our infrastructure is a clear differentiator with investments well ahead of our peers that will continue to drive efficiencies and business impact.

We're also continuing to leverage AI to drive efficiency and increase our team's productivity.

We anticipate total head count will remain relatively flat in 2026, while investments supporting our fastest growing areas of our business will increase through internal reallocations.

And finally, we are also laser focused on free cash flow generation and aim to increase cash flow next year supported by further working capital improvements and incremental AI driven efficiencies.

Collectively we believe our efforts will drive a return to double digit revenue growth in the future.

With that I'll turn the call over to Stacy for questions.

As a reminder, you can ask a question by making a hand located on the dashboard Teng PON.

Hi, can you hear me now? Yes we can. Okay, thanks. Um, Reggie. If you could maybe expand a bit on the topic of Espio and some of the recent moves companies like the, the trade desk have made kind of leaning into open path launching open ads and declaring all ssps as resellers. But then, on the other hand, the 2 of you are collaborating on that deal ID management API. So I guess since we last spoke last quarter, how would you characterize the state of play there and that I have a follow-up for Steve?

And the interest of time the equity preferred with your question to one mine farmland.

The first question comes from Andrew Mok at Raymond James. Please go ahead Sir.

Okay.

Hi can you hear me now.

Yes again, okay.

Sure, yeah, thank you, Andrew for the question. So, yeah, let me first just clarify on the, you know, reseller kind of, uh, noise that's out there. So the industry standard definition, which is been with the industry for over a decade. Is that a reseller is the term for when inventory flows from a publisher to an intermediary and then to an SSP and an intermediary can be another exchange or some sort of aggregator of inventory. In contrast, direct is when inventory

Rajiv if you could maybe expand a bit on the topic of spo and some of the recent loans companies like the trade desk had made kind of leaning into open path logic open Adam declared all access piece was resellers, but then on the other hand the to review our collaborating on that deal IV management API. So I guess since we last spoke last quarter, how would you characterize the state.

Automatic is a platform for direct inventory. Monetization reselling is not our business. We are a direct connection to Publishers and that's how we're able to provide significant incremental value to Publishers and to buyers,

40 flows from the publisher directly to the fsp Thematic is a platform for direct inventory. Monetization reselling is not our business. We are a direct connection to Publishers and that's how we're able to provide significant incremental value to Publishers and to buyers,

To play there and then I have a follow up for Steve.

Sure Yeah. Thanks, Andrew for the question. So yeah, let me first just clarify on the reseller or kind of the noise.

Noise that's out there so the industry standard definition, which has been with the industry for over a decade is that a reseller is the term for when inventory flows from a publisher to an intermediary and then two in SSD and an intermediary can be another exchange or some sort of aggregator of inventory and contrast directors land inventory.

And I think it's pretty clear. We provide values in ways, uh, value in ways that dsps do not. Uh, yield optimization is a key example of that. So, trade desk in particular has been very clear that they are not in the yield optimization business. And so, a publisher needs to have a yield function in place in order to maximize their revenue, uh, which is core to what we do.

And I think it's pretty clear. We provide values and ways, uh, value in ways that dsps do not. Uh, yield optimization is a key example of that. So, trade desk and particular has been very clear that they are not in the yield optimization business. And so, a publisher needs to have a yield function in place in order to maximize their revenue, uh, which is core to what we do.

Lows from the publisher directly to the essence.

Nevada is a platform for direct inventory monetization reselling is not our business. We are a direct connection to the publishers and that's how we're able to provide significant incremental value to publishers antibiotics.

And it's very clear we provide values in ways value in ways that DSP is do not.

At the same time, we're also providing value to trade desk and others, right? Who as you noted, Andrew, they're relying on, on us to improve deals, you know, with our price Discovery, uh, and provisioning uh, API integration announcement. Um, so I think, you know what, you can see here is that the ecosystem is multifaceted. Uh, certainly complex. Our focus is really on taking that direct uh, Integrations with Publishers that we have, all of that inventory, flowing through our platform, the the data,

Yield optimization is a key example of that so trade desk in particular has been very clear that they are not in the yield optimization business and so our publisher needs to have a yield function in place in order to maximize their revenue.

Which is core to what we do.

At the same time, we're also providing value to trade desk and others right. As you noted Andrew Theyre relying on us to improve deals with our price discovery and.

The audiences and really creating value for buyers. Uh and and in such a way that they're able to to generate increased return on ad, spend increased Roi which causes them to, then spend more on our platform and then uh, that in turn generates higher yield for our Publishers. And so that's really the, the core and the focus that we have, and what we're finding with activate and other, uh,

The audiences and really creating value for buyers. Uh and and and such a way that they're able to to generate increased return on ad, spend increased Roi which causes them to, then spend more on our platform and then uh, that in turn generates higher yield for our Publishers. And so that's really the, the core and the focus that we have, and what we're finding with activate and other, uh, capabilities on our platform, a lot of the focus on AI that we talked,

And provisioning API integration announcement.

Speaker #4: publishers.

So I think you can see here is that the ecosystem is multifaceted certainly compressed our focus is really on taking that direct.

Capabilities on our platform. A lot of the focus on AI that we talked about in the prepared remarks is that we have a lot of opportunity coming at it from the sell side of the ecosystem, based on the options, and the data, and our uh, close Integrations with publishers.

Pair of remarks is that we have a lot of opportunity coming at it from the sell side of the ecosystem, based on the options, and the data, and our uh, close Integrations with publishers.

Integrations with publishers that we have all of that inventory is going to grow our platform. The data the audience is really creating value for buyers.

And in such a way that they were able to generate increase return on AD spend increase our ROI, which causes them to then spend more on our platform and then that in turn generates higher yield for our publishers and so that's really the core and the focus that we have and what we're finding with activate and other capabilities on our platform a lot of the focus on AI.

We talked about in the prepared remarks is that we have a lot of opportunity coming at it from the sell side and ecosystem based on the options and the data in our closed integrations with publishers to be able to add value to both the buyers and to the conference.

Great. Thank you for that.

Maybe Steve if I could on the Cogs point.

Can you just expand a little bit on the ability to drive that unit cost leverage there and how we should think about that line either on an absolute dollar basis or percentage of revenue going forward. Thank you sure well good to reconnect Andrew so from our perspective we.

For many years have been focused on owning and operating our own infrastructure and have done. It very successfully as you noted you are driving down unit costs, we've consistently done that for a decade now.

I'll go and double digit unit growth reductions.

And so from our perspective, you know 26 different other than that.

Thank you.

Average AI more and more.

To drive optimization.

You saw in our prepared comments, we increased the number of grocery preference process by over 20% and that's where we didn't do that by just around auto Capex added we did through software and AI.

The basic process is going to continue on but we have more tools and more ability to do that so I would expect in the future as our revenue reaccelerate working to increase our gross margin could.

Could be a function of revenue and managing our costs.

Okay. Thanks, Steve. Our next question comes from Matt Thornton of RBC. Please go ahead ma'am.

Great. Thank you guys for taking my question.

Obviously, a super strong quarter for CTV growth ex political and you called out a lot of the drivers there that'd be great growth in the live sports.

And that expansion of Midmarket DST is when the 90% coverage now charter dish streamers could you give us kind of a little more color maybe over the past year, just what sort of evolution, you've seen in the CTV environment and kind of how you're investing to grow continue to grow next year.

Sure Yeah. Thank you Matt for the question. So you don't see TV advent, obviously had very strong growth area for us.

And we've seen tremendous scale really building from zero organically several years ago.

Where we are today and I think there's a couple of trends that are happening first of all.

We are.

Working with more and more premium publishers right. So this quarter with share over 90% of the top 30 globally.

We added some capacity mirrors to be feature today in local now that builds on our base of premium inventory from existing publishers like Roku and Paramount and NBC.

At the same time.

<unk> growth and the advertiser mix in CTV, so, whereas traditional TD as couple hundred maybe 500 advertisers in aggregate that are the lion's share of ad budgets.

With screening TV, what we see is that there is tens of thousands of advertisers, reaching now into the hundreds of thousands and that number is growing very quickly and as we have focused on going after mid market focus dsp's. Many of them are focused on small and medium businesses like mountain, where TV scientific or their phone.

Our performance advertising against some of those same folks there's a lot more dollars that we're able to bring onto the platform and so that's creating another layer of growth and then third is we've really leaned into AI as you can tell from the past calls and also the prepared remarks today, all three layers of the technology stack.

That's really unlocking incremental budgets as well. So widespread is just one example of that.

Our actually our one of our first generative AI creative tools, we launched last year, which was focused on helping publishers, bringing more political ad spend.

By scanning.

Political ad creatives.

Until we're continuing to apply that technology for other use cases, so there's a lot of other vertical like pharma firms Dennis.

Health and wellness, where theyre sensitive categories, but we're able to generate.

Our market spend.

So I think it's really obviously exciting area for us we're going to continue to focus our global investment in this area and as we bring more buyers onto our platform via activate via our curation capabilities.

Operator: Hello everyone and welcome. We will begin momentarily. Hello everyone and welcome. We will begin momentarily. Hello everyone and welcome. We will begin momentarily. Hello everyone and welcome to PubMatic's Q3 2025 earnings call. My name is Emmanuel, and I will be your Zoom operator today. Thank you for your attendance today. As a reminder, this webinar is being recorded. I will now turn the call over to Stacie Clements with the Blue Shirt Group.

Now with me at CP launch, we think there's a long runway of growth ahead of us for for CTV.

Yeah, that's super helpful. Maybe following up on your commentary on.

Jenny I and some of the agenda, obviously, we've been hearing a lot from a lot of players in the space around the HQ teams can you talk a little bit about the kind of a right to win.

How you how your stakeholders understand the value creation versus the noise around these themes and maybe as you said with regard to EPS.

It's not about winning yourselves or creating a tam expanding ecosystem around those premiums yeah. So I think.

Let's take each of those in turn so first of all I think the right to win comes from a couple of things.

Of all of us owning all of our own infrastructure.

So what that means is that we're in a unique position to be able to deploy cutting edge.

AI technology AI foundational infrastructure like the partnership that we announced with Nvidia and that came as a result of multiple years of collaborations. So it's not just something you can wake up and do all of a sudden but to be able to do that you have to really own and control and be in a position to manage all of that infrastructure. So I think that's the.

Stacie Clements: Good afternoon everyone, and welcome to PubMatic's earnings call for Q3 2025. This is Stacie Clements with The Blueshirt Group, and I'll be your operator today. Joining me on the call are Rajeev Goel, Co-Founder and CEO, and Steve Pantelick, CFO. Before we get started, I have a few housekeeping items. Today's prepared remarks have been recorded, after which Rajeev and Steve will host a live Q&A. If you plan to ask a question, please ensure you set your Zoom name to display your full name and firm, and use the raise hand function located at the bottom of your screen. A copy of our press release can be found on the website at investors.pubmatic.com. I would like to remind participants that during this call, management will make forward-looking statements, including, without limitation, statements regarding our future performance, market opportunity, growth strategy, and financial outlook.

The first right to win is our long term capability set there and expertise.

Is you got to have the transactions and the data flying on your platform. So an AI algorithm is only useful to your customers and only relevant to them. If you have the scale and ability to transact and of course, we have that you know with the trillion or so daily AD impressions on our platform almost 2000 publishers depth in Cte.

<unk> and mobile App.

Okay.

Display and so on and so forth. So I think that's the second key for the right to win and then I think the third is <unk>.

Stacie Clements: Forward-looking statements are based on our current expectations and assumptions regarding our business, the economy, and future conditions. These forward-looking statements are subject to inherent risks, uncertainties, and changes in circumstances that are difficult to predict. You can find more information about these risks, uncertainties, and other factors in our reports filed from time to time with the Securities and Exchange Commission and are available at investors.pubmatic.com, including our most recent Form 10-K and any subsequent filings on Form 10-Q or 8-K. Our actual results may differ materially from those contemplated by the forward-looking statements. We caution you, therefore, against relying on any of these forward-looking statements. All information discussed today is as of 10 November 2025, and we do not intend and undertake no obligation to update any forward-looking statement, whether as a result of new information, future developments, or otherwise, except as may be required by law.

Demonstrated ability to innovate.

And to really build a solutions not just talk about that and I think what you've seen from us over the last year is that we are significantly ahead of our competition.

We have launched 17 agents in our publisher platform already.

Using AI I think one of our competitor share that they're planning to build their first data right. So you can see that said one to two year old.

Advantage that we have in terms of a track record of execution and so what that means does that mean, when we're launching things like F. C. P.

The add context protocol, which as you know managing.

Workflow via AI, we are in a position to be able to talk to those publishers and buyers about here's how you get started here with our first use cases to implement and these things are available on our platform today and so I think that's a key part of creating value within ecosystem is being able to participate in those early transact.

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

Since being on the frontier and benefiting from the groundswell of growth that we that we see in wireless.

Thank you.

Our next question comes from Sean.

<unk> well go ahead sorry.

Thank you thanks, Jason Thanks for taking my question.

Rajeev Goel: Thank you, Stacie, and welcome everyone. We delivered a stronger-than-expected quarter with revenue and adjusted EBITDA ahead of guidance, as well as strong cash flow, demonstrating the power of our platform, the continued diversification of our business, and our accelerated pace of innovation. CTV significantly outpaced the market rate of growth and grew over 50% year-over-year, excluding political, driven by increased premium supply, continued scaling of agency marketplaces, traction in our live sports marketplace, and growth of small and mid-market advertisers. Emerging revenues grew over 80% year-over-year as sell-side targeting and newly launched AI solutions quickly ramped. We also strengthened our end-to-end platform with cutting-edge AI innovations that are deepening our competitive moat and unlocking measurable, incremental revenue opportunities. The industry is rapidly redefining itself, and we are actively shaping its future. The impending Google AdTech remedies verdict will very likely shift market share.

I have a follow up on the first question on open back not specifically just opened back but I have seen rajiv any trends that would suggest that perhaps.

Yeah. The trade desk is increasingly going direct and you are you are getting impacted by.

Not only just at a reseller, but in terms of the impressions volume are you seeing any impact to your business in general.

And is it related to them actually launching that Cockeye platform I would think not but there is this.

Concern in the industry. If you could please perhaps comment on that that'd be great. Thank you sure yeah, absolutely. So first of all good news is we are a platform for direct inventory.

So regardless of what label anybody who wants to put on anything.

We know that we are working directly with premium publishers and there is not a more efficient way for buyers to access inventory.

And what is coming through through our platform. So I think.

Rajeev Goel: The prioritization of data targeting and performance is shifting value creation in the ecosystem to the sell side. Over the past few months, we've seen a groundswell of AI-driven innovation reshaping the entire ecosystem. AI is now at the center of every strategic conversation, whether the objective is advertising performance, transparency, or automation. As an early adopter of AI, our leadership is a defining advantage for us, which will grow over time. We continue to innovate with an AI strategy centered around three distinct layers of programmatic advertising: the infrastructure layer, the application layer, and the transaction layer. For the infrastructure layer, we own and operate our full technology stack, giving us the efficiencies, control, and independence that many of our peers don't have, evidenced by multiple recent public cloud outages.

Underlying your question.

The new trade desk platform.

Coke I does evaluate and by immediate differently from what we have seen and so we took two important steps over the course of Q3, resulting in spend from them stabilizing in August and September as Steve mentioned, so the first is that we revise our machine learning algorithms to ensure we're sending an optimal mix of inventory to them that work is largely behind us.

So you know we're always doing some level of continuous optimization to drive more spend and then second we work with our spo supply path optimization partners to help them configure their their seat in the DSP to ensure that they're getting the benefit of their SPL relationships with us.

Network is largely completed as well so we have agency marketplaces setup with pretty much every major holdco in different parts of the world.

Rajeev Goel: Through our technical collaboration with NVIDIA, we are deploying next-generation AI models on the world's most advanced GPU architecture. Five years in the making, this collaboration required three ingredients: physical infrastructure capable of deploying GPUs at scale, massive transaction volume to test and optimize across the full open internet, and technical sophistication to be an early adopter. Today, our infrastructure is a clear differentiator, and we believe years ahead of peers. The business impacts are tangible: 5x faster bid responses and 85% fewer auction timeouts, all recovering millions in ad spend. These results close the infrastructure advantage of Walled Gardens and directly translate into advertiser performance with higher publisher yield. Looking ahead, as autonomous AI agents begin planning and negotiating ad campaigns, industry compute requirements are expected to grow dramatically. These early investments only widen our infrastructure advantage as legacy platforms are constrained by cloud and computing limits.

And many different parts of the world and so these agencies had to make changes you know over the last couple of months.

To ensure that their marketplaces stay intact and that they continue to get the performance.

Inefficiency that theyre seeking and.

And of course these marketplaces are critical to the agency's media buying offerings that they provide to their advertiser clients. So we you know tushar publicly for instance, we power Adobe P. Pes.

Premium marketplace until that's built on top of our SSP and so making sure that they are receiving their S. P. O data workflow efficiency benefits is key to there being able to continue to offer that in market. Similarly, given we're a leader a market leader in curation, we work with our duration partners too.

Sure that their campaigns continue to run via our SSP and that they get the ROI the transparency and the control that caused them to choose to work with us in the first place.

So I think.

<unk> sure that I believe 85%.

Their clients are now up and live on Coke ISO we.

Rajeev Goel: This is the monumental shift for open internet digital advertising that PubMatic has been building for. At the application layer, we're deploying some of the most exciting and innovative capabilities we've ever launched, embedding AI directly into our products to power intelligent workflows and decision automation. We launched AI-powered buyer and publisher platforms that now handle more complexity with significantly less manual effort. Our solutions cut campaign setup time by 87% and speed up issue resolution by 70%, translating directly into faster activations, higher productivity, and better outcomes for our customers. Independent agency ButlerTill has been using our AI-powered PubMatic for Buyers platform. Scott Ensin, their Chief Strategy Officer, said, and I quote, Historically, systems don't talk to each other. Data sets are disparate. Walled Garden data is hard to connect.

We think probably the bulk of.

This movement is behind us, but that's a key part of why we're also very rapidly diversifying our DSP mix as the market evolves to a more fragmented DSP landscapes.

We're finding a significant success with 25% plus year over year growth with mid market DSP on our platform in Q3.

Thanks Rajiv.

Our next question comes from Matt Conlan JMP. Please go ahead Matt.

Thank you so much for taking my questions. My first one is just on there's been a lot of talk of just the impact across the open web on publisher traffic just given this AI platforms.

Take increased share can you just talk about what you're seeing across your publisher base as far as search traffic yeah, absolutely. So we've seen I would say a fairly limited impact.

And I would say is stepping back we believe.

Rajeev Goel: AI allows us to scale human reasoning and run campaigns that truly look across all channels and optimize across them. Working with PubMatic for Buyers helps make that possible. This same enthusiasm is building on the publisher side. Our newly launched publisher suite already includes 17 operational AI agents guiding yield, diagnostics, and creative setup. Customer feedback has been exceptional. One of our largest omnichannel partners, Overwolf, told us that the PubMatic Assistant AI chatbot is unique with respect to the accuracy and speed of execution. Finally, at the transaction layer, we're preparing for the next major step, Agentic AI, where advertisers' and publishers' AI agents will be able to transact directly through our infrastructure.

So her overall in our business is limited to a single digit percentage of revenue. If there were zero serve traffic going to our publishers and we took no steps to mitigate it so that's probably.

Our high end kind of water market a potential impact so we shared in our comments today that roughly 60% of the impressions that we are processing, our core CTV and mobile App and so of course those are unaffected by AI search now of the remaining business, which is browser base for searches relevant industry data indicates.

That search referral traffic is roughly 15% with the rest of the policy of traffic coming from either social or direct navigation and given that we work in the ahead of the market with the top publishers rather than the long tail I would expect that 15% number actually be even a little bit lower.

And so if you take okay, 40% of the impressions, 15% impact.

Rajeev Goel: We are a co-founder of the newly established Ad Context Protocol, or AdCP, alongside partners like Yahoo, LG Ad Solutions, and Raptive, and the first to publish a model context protocol specification for agent-to-agent communication in the programmatic industry. We are establishing the protocols, safety mechanisms, and the interoperability standards that will enable AI agents across the entire ecosystem to transact efficiently and securely. With this three-layer strategy, infrastructure, application, and transaction, we are building the complete system for Agentic AI: the high-performance car, the roads to drive on, and the traffic laws to govern it all. While still in early days, we are already seeing material benefits. First, AI is driving increased platform usage. As we roll out new generative AI and Agentic AI features across our platform, our customers are able to launch campaigns and resolve issues faster, and improve performance.

At the high end that gets you to a mid single digit percentage a potential impact again, if we had no mitigating steps that we took.

But actually you know theres a lot that we can do in terms of bringing continues to bring on board more CTV more mobile app more commerce impressions and alike.

The other thing that we're seeing is the offensive opportunities.

Which is that there's a growing number of.

AI.

Search.

Experiences that consumers are spending more and more time on so for instance, you know again at launch.

Solution, where users on their properties can search the archives guenette articles and get answers to questions and so that I think is actually a growing canvas inventory of opportunity for us as consumers get more and more.

Used to that AI search.

Kind of consumption behavior, and Theyre looking for that from many of their traditional content partners, where they consume content and so we think that's a new tailwind.

Rajeev Goel: Validating our leadership in AI, customers have repeatedly said they are not seeing this level of innovation from other companies in the industry. Second, AI solutions are generating new revenue streams. One example is our new AI-based yield optimization solution for publishers, which uses adaptive learning models to automate pricing and improve auction efficiency. This AI solution is driving growth for our publishers, increasing their revenue on average by 10%. Launched just a few months ago, it has already unlocked tens of millions of dollars in incremental revenue for our publishers and, in turn, is generating new PubMatic revenue as part of our emerging revenue category. Third, AI is improving our operational efficiency and profitability. In the last two months, we deployed a dozen AI agents internally to automate operational workflows, accelerate development, and reduce overhead.

That is emerging in the business.

That's very helpful. And then my second one is just can you are you all know infrastructure and just the differentiation there.

Partnerships that you announced with video.

<unk> speed improvements in bid response times can you just talk about the structural difference, that's allowing allowing that just win rates and auctions to be higher and just talk about the differentiation there in Quebec and drive sustainable growth.

Yeah, absolutely so actually the good news is that there's multiple ways that having this kind of infrastructure cooperation collaboration.

With Nvidia and benefit our business and it really is the collaboration not just in hardware, but also on software I think Nvidia themself, you know says that I think it's over half maybe about 60% of their revenue comes from software solutions right. So obviously, they're well known for hardware, but it's really a combination.

Rajeev Goel: Our goal is to deploy substantially more agents in the coming quarters to give us measurable margin leverage while we continue to invest and strengthen our long-term moat. Looking ahead, despite the significant progress we have made, we believe we're just scratching the surface. AI will continue to drive higher usage across our platform, generate incremental revenue streams, and improve operational leverage. Because we're investing across all three layers, PubMatic is poised to lead the next era of Agentic AI advertising. While AI is a powerful driver of our long-term growth strategy, it's equally important that we execute across the four other strategic priorities I outlined last quarter. I'm pleased to report that we're making significant progress in each of those areas. First, we're broadening our demand-side ecosystem and accelerating our pipeline.

Of hardware and software so I'll give you three specific examples.

So we use Nvidia Gpus to power real time Ad decisioning.

And.

And very low latency environment, So think about things like connected television or.

Our live sports, where if we can process.

Transaction faster if we can tap agency then that leads to fewer time outs more bids in the auction on our platform and then more opportunities for us to win with the publishers and so that boost.

Outcomes are alive or both advertisers and publishers also boosts our revenue.

Second example is using.

<unk> Triton inference servers.

Rajeev Goel: We expanded a top-three DSP partnership, introducing programmatic guarantee deals that streamline execution for advertisers across premium streaming content. This integration reduces friction in deal setup, accelerates time to market for campaigns, and unlocks incremental budgets. It's a great example of how our relationships with global DSP partners are becoming more strategic as we diversify beyond the legacy DSPs. We also launched a new partnership with Bliss Point Media, an omnichannel DSP that brings high-value demand from leading global brands across automotive, retail, and financial services. Bliss Point Media combines T-Mobile's app engagement data with real-world movement patterns and transaction signals to drive performance-focused campaigns with measurable outcomes, from brand awareness to store visits and sales. This partnership expands our reach into premium brand advertisers who prioritize full funnel measurement and offline attribution. These mid-market-focused DSPs, like Bliss Point Media, represent one of the fastest-growing advertising segments.

Where we use a specific hardware software implementation with them.

Or traffic shaping and traffic shaping is very important and critical role that anybody on the sell side ways, which is to figure out which of the roughly caronia in AD impressions. We have per day, we should send to each particular ESP and some dsp's, we might send tens of billions some might be single digit millions some might be.

Hundreds of billions of AD impressions. So it's really important that we pick the right ones.

And for every DSP Theres got to be a different decision set of calculus based on the types of advertisers.

Campaigns that are in their platform and of course these decisions have to be made within milliseconds of the publisher requesting a bit from us.

And a third is in the reporting area. So we are using.

And Nvidia upward accelerator for Apache Spark, which allows us to.

Streamline and improve the speed at which we're able to process data and that in turn allows for smarter optimization across a wide range of wide array of different use cases.

Rajeev Goel: In Q3, ad spend from this segment grew 25%+ year-over-year, reflecting meaningful progress in our diversification strategy. Second, we're accelerating our investment on the buy side. We're extending our reach with independent agencies and direct advertisers, expanding our focus from the top 20 agencies to the top 150, and from the top 500 advertisers to approximately 1,500. Supply path optimization remains a key growth driver, with the majority of this addressable market as greenfield opportunity. SPO represented over 55% of activity on our platform in Q3. As a pioneer in SPO, we are the leading incumbent, offering scale and a rich history of performance and efficiency gains. Building on this momentum, we are onboarding more buyers onto Activate, our direct-to-supply buying platform. Over the first nine months of the year, the number of active campaigns grew more than 4x over last year, with a 35% increase in customers.

So those are I think hopefully there's three tangible examples of how our Nvidia partnership is really leading to the leadership that we talked about in the prepared remarks in particular at the infrastructure layer, which then allows us to drive benefit in the application and transaction layers of the AI stack.

Very helpful packages.

This comes from Rob Koh breath of Evercore. Please go ahead Rob.

Great. Thank you very much.

Richard wanted to go back to this five X faster and good response with <unk>.

Optimization strategies crazy impossible or dramatic rate can you unpack that and assuming you have a very substantial lead in accelerated computing the space.

Are there are counter parties on the demand side, who can take advantage of that or do you think you need to take on a bigger role.

Either in optimizing demand.

Demand or hosting demand high margin and optimization.

Rajeev Goel: Activate is a key solution that enables the ecosystem-wide push for increased performance, transparency, and efficiency of programmatic advertising. This is only the beginning. We've begun integrating AI-powered agent-to-agent workflows into Activate to boost performance and reduce friction, making advertiser adoption even easier. We believe that this new technology could have a massive impact on Activate adoption over the medium term as we accelerate investment in mid-tail buyers. Finally, we continue to deepen our integration with DSPs to create value beyond real-time bidding transactions. We are the first SSP to integrate The Trade Desk's price discovery and provisioning API, which allows publishers and advertisers to share deal metadata between our platforms to better identify and resolve issues with underperforming deals in real time. Today, over 50% of programmatic deals sit dormant because this information was previously only available offline.

To fully take advantage of those capabilities, there's something more akin to what mall garnsey, maybe in terms of their very highly.

Vertically integrated supply chain and the speed to size it.

Their final requirements create desk issue just given current trends do you.

See the potential to maybe see growth amongst them outside their growth.

In the back half of 'twenty six thank you.

Yeah. Thanks, Rob So let me start with your first question, then I'll hand, it over to Steve So we.

We absolutely do see opportunity to better leverage.

Our infrastructure.

Through vertical integration and I'll give you two examples of that so one is you know as we work more and more with mid market circuits DSP see themselves tend to be smaller.

What we find is that theres a lot of opportunity for us to use our platform to help them compete.

Compete more effectively and so what I mean by that is we have huge amounts of data on our platform from this one trillion daily AD impressions, a typical mid market ESP. They may see 5% to 10% of the traffic that a very large DSP.

Rajeev Goel: We anticipate this innovation will accelerate our share of PMP and PG deals as we drive adoption together with The Trade Desk. Third, our momentum in Activate is also fueling our growth in CTV. Excluding political advertising, CTV revenue grew more than 50% year-over-year, and the format remains a primary growth engine for our business. Live sports is an especially exciting category. Buying activity rose more than 150% sequentially from Q2 to Q3 as we scaled our AI-powered live sports marketplace and launched new programmatic guarantee deals around tentpole events like the US Open for tennis and Monday Night Football. We also continue to expand our CTV publisher footprint. New deals and expanded partnerships with a number of free ad-supported streaming services, including Tubi, Future Today, and Local Now, added to a strong roster, with over 90% of the top 30 global streamers now on PubMatic.

<unk> hundred 60 would see and so these mid market ESP, because they're smaller in nature. They.

They don't have access to all of that same data at.

At the same time. They also don't have access to all of the performance aspects of the auctions were running on behalf of the publishers and so there's opportunities for us, which we are working very hard on two.

To use our platform to help those ESP.

Drive better performance.

Better targeting and ultimately better ROI and that plays very closely with the infrastructure that we've deployed. So that's one example, Rob aware I think vertical integration, where we can do more than we have done traditionally.

For our legacy DSP and I think these mid market DSP, because they're growing quickly.

Rajeev Goel: We offer these premium content streamers incremental ad demand that other platforms can't offer because of the scale of our SPO, Activate, curation, and commerce businesses. For example, Fremantle, one of the world's largest entertainment content creators behind franchises like American Idol, America's Got Talent, and The X Factor, generated a 78% increase in incremental programmatic demand across their expanding FAST channel portfolio by partnering with PubMatic. This is a remarkable outcome and highlights significant incremental ad revenue our platform generates for our partners. Additionally, we're expanding ad formats on our platform. In collaboration with Dentsu, we recently launched pause ads for CTV through Activate. Advertisers can now serve dynamic, contextually relevant ads when viewers pause content, representing a premium, brand-safe moment that boosts engagement and yields incremental revenue for publishers.

They're very hungry for that kind of collaboration and our ability to to help them solve problems.

And then the second is with our activate solution.

Where buyers are buying directly in our SSP and so here you know that.

Faster.

Processing of bids that are influencing all of these things they helped me to activate.

Very effective solution and we're seeing that play out in terms of the growth up four at year over year.

Campaign numbers are growing on a similar basis in terms of the number of campaigns run. So we think theres a lot of benefit from vertical integration and you know as you said.

That is somewhat akin to what the walled gardens do them of course, it's no secret that they are very good at driving performance and we think that vertical integration is a key part of that I'll turn it over to Steve Yeah sure. Ralph Correct me, if I don't have the right question, but in terms of our growth opportunities in 'twenty. So obviously, we're going to come back shortly.

Rajeev Goel: What's more, with $155 million of ad dollars still in linear television, we believe our CTV business has a long runway for growth given the scale, performance, and ad formats now available for buyers on PubMatic. Fourth, we're making significant progress in scaling our emerging revenue streams, which grew over 80% year-over-year in the third quarter. Commerce media continues to gain momentum. We continue onboarding and scaling with some of the world's leading retailers and transaction-based enterprises as they seek to activate and monetize their first-party audience intelligence. These partnerships are expanding our reach beyond the traditional impression model, while generating platform fees and database monetization that accelerate revenue growth. Sell-side curation is another fast-growing emerging revenue stream. We expanded partnerships with leading data providers around the world.

With an X earnings talked about sex, but there's a lot of things that we focused on breast and a very strong position to reaccelerate growth.

Some SaaS from the third quarter strong CTV grow mobile.

As well as our emerging revenues so.

Once we work through the current transition that we.

We've identified in the second half of this year.

We are very confident that we're going to be growing on a number of different fronts. Not just as a reminder, we have been investigating a secular growth areas. This has been a long term strategy, we're seeing the results of that.

We are expanding and diversifying our DSP base.

We're growing very strongly.

Congress Dsp's.

Specialized ESP or on pharma.

So the couple of you know our focus on secular growth expanding our buyer base and then innovation around AI.

Rajeev Goel: Nielsen, for example, tapped PubMatic as their exclusive sell-side partner to bring their more than 10,000 audience segments to Australian advertisers and agencies. Together with the previously mentioned AI yield solution for publishers, these initiatives drive incremental, high-margin revenue that is scaling quickly. In closing, our results demonstrate the power of our differentiated business model. We continue to innovate, diversify our business, and operate with discipline. We are leading from a position of strength. We're confident that the investments we're making today, particularly across the three layers of our AI strategy, are expanding our competitive advantage while creating sustainable, profitable growth over the mid to long term. All of this is happening alongside a once-in-a-generation shift in digital advertising that will likely result in the competitive landscape being reshaped, where even a modest share shift could unlock substantial, incremental, high-margin revenue for us, given our owned and operated infrastructure.

Not just in the infrastructure, but certainly you know in terms of our.

Power capabilities functionality, we launched this past quarter, a high burden of publisher.

Products and that will continue to be sources of growth. So we're very positive.

Positive about that.

In the second half of 'twenty six as we look at the plethora of opportunities ahead of us.

Great. Thank you Steve Thank you.

And our next question comes from Jacob Armstrong at Keybanc. Please go ahead.

Thanks for taking my question so Jacob on for Josh.

Can you discuss how you believe the rollout speed needs to evolve in the coming years is so gentle care expands.

And what are the key investments needed to ensure Americans buses and to capitalize on this transition over the next few years.

Sure Yeah. So.

Rajeev Goel: PubMatic is not only positioned to adapt; we're helping define what comes next. We have the technology, the talent, and the financial foundation to build a more intelligent, efficient, and enduring business, one that creates lasting value for our customers, partners, and shareholders. Let me now turn the call over to Steve. Thank you, Rajeev, and welcome, everyone. We exceeded expectations on both revenue and adjusted EBITDA. This outperformance was driven by CTV, combined with stronger-than-expected year-over-year growth for online video and mobile app. We managed expenses, leveraged AI, and delivered improved margins and a strong free cash flow. Stepping back, it is important to call out that our efforts to transform our business started several years ago as we anticipated the value of the ecosystem shifting to the sell side.

I think the role of the SSP.

It's going to expand significantly from.

Transaction autonation to a much bigger role in workflow automation, particularly around.

It's an inventory discovery and planning and in measurement. So if we think about where programmatic technologies and apply so far maybe for the last 15 or so years.

I would say it's been heavily applied at the transaction level, so, meaning we have an AD impression and we want to get a number of advertiser bids on it.

And then we're helping out DSP bid on that individual AD impression and so theres been a lot of maturation and innovation and focus on that like single atomic.

Impression.

But we still have rfps that advertisers sand or agency sent out to publishers via email fill out the spreadsheet you know we're watching this AD campaign, we want to understand what audiences of what inventory you might have available.

Rajeev Goel: We've built an end-to-end solution that prioritizes control, performance, and transparency while recognizing the need to diversify our business and unlock new paths to monetization. Today, over 40% of our revenue is derived from CTV, mobile app, and emerging revenue streams, which represent long-term value for our business, up from less than 30% two years ago. Further, these efforts directly benefit our profitability and enable continued innovation and investment in the business. Turning to the quarterly results, starting with the revenue breakdown. To provide apples-for-apples comparability, year-to-year growth rates for video are adjusted to exclude political ad spend. On that basis, total omnichannel video revenues grew 21%, underscoring the strength of our premium video portfolio and growing adoption of AI-powered optimization across formats.

Human at the publisher fills that out and in the email that back to the agency. The agency collapse, those and then they decide where where theyre going to setup and allocate budget. So that's still a largely manual process. Some things have improved but still a lot of manual approaches. So I think there's a huge opportunity.

I think outside of the pure atomic impression or transaction around the discovery and planning and then after the transaction to the measurement to use AI.

Where you are.

Advertisers agent or an agency's agent can say, hey, I'm launching this product or our service.

Please tell me what you can do for me as a publisher media owner from an audience and an inventory perspective, and we can take a structure of response.

Aggregate add up across the remainder of the publishers that we're working with.

Rajeev Goel: Within this category, CTV once again grew over 50% year-over-year, driven by the success of our live sports marketplace and growth in programmatic guarantee deals across expanding buyer relationships. We monetized CTV inventory from over 90% of the top 30 global streamers. Omnichannel video contributed approximately 38% of total revenue in Q3 2025. Emerging revenue streams continued their high-growth trajectory, growing over 80% year-over-year while scaling to 10% of total revenue in the third quarter. This growth represents incremental, durable revenue streams beyond our core sell-side platform capabilities. Most notably, year-over-year revenue from Activate grew over 100%, and our curation and data business, Connect, grew over 40%. Based on the results we are seeing, we will continue to invest for incremental growth opportunities that diversify our revenue, like the new AI-driven product capabilities for publishers that are already showing meaningful traction.

And then deliver pre constructed campaign brief to the agency. The agency can begin to buy that using our transaction bites.

And then we can have a feedback loop around measurement with that and in the agency can revise their campaign. So I think there's a lot that can be done outside of that single transaction.

Element and that's really where we're focused.

With the.

With the transaction layer of the stack that I mentioned earlier.

Add context protocol, we're working out what exactly should their structure requests and responses look like.

And then al you know how do they how do they get set up.

Loans what data.

How do they get optimized so I think there's a long runway Jacob ahead in that area.

Thank you.

Next question comes from AD after Ad campaigns.

Yes.

Alright. Thanks for the question I wanted to talk about the investments you're making to meet the demand from the mid market DSP like mountain where exactly.

Rajeev Goel: The growth across these key secular areas helped offset the impact from lower spend by a large DSP we identified last quarter. Following our optimizations and integration adjustments by SPO partners, spend stabilized from this DSP in August and September, resulting in lower but steady run rate. As anticipated, display revenue was down 5% year-over-year and was the format most affected by the DSP impact. Excluding this DSP, display grew in the low single-digit percentages. With respect to Q3 ad spend across the top 10 verticals, in aggregate, they grew in the single-digit percentages year-over-year. Health and fitness, personal finance, and technology each increased over 15%. We saw softer trends in business and automotive, which declined single-digit percentages in the quarter. Ad spend from our mid-tier DSP partners grew over 25% year-over-year in Q3.

Exactly are those going to show up is that more head count Tech investments just be great to talk about the color on that sure.

We've been very focused throughout this year and really leading into this year.

Especially as possible.

In terms of where we deploy our teams and we made a very conscious decision in the last 18 months to move more and more resources towards the fastest growing area of cyclical areas of which of course.

Critical Esg's are part of that and so we've been increasing our investment in the team that is gross directly yet causalities dsp's. This year, we increased thus far about 19% in terms of head count.

And we've done that by reallocating team members around the organization from our results. Our overall head count is roughly flat and so we've done a very.

Careful analysis.

How we're going to keep on Prem.

Bridging our existing resources.

Rajeev Goel: Importantly, our AI-driven buyer platform is resonating well with performance-focused buyers across CTV, mobile app, and e-commerce verticals, and we believe lays the foundation for sustainable growth in the quarters ahead. We anticipate that new buyer relationships like Bliss Point Media and Mountain will bring incremental ad demand across our wide portfolio of verticals. Regionally, APAC and EMEA revenues grew 12% and 7%, respectively, offsetting the 14% decline in the Americas, which was primarily due to spend declines from large DSP buyers. Moving on to our operating priorities, we continue to invest and reallocate resources to the highest return areas of the business. As Rajeev noted, we're seeing strong growth across our DSP mix and within Activate as customers increase usage, and new products drive incremental revenue.

Of course all of this is supported by the progress we've made in AI and <unk>.

Terms of becoming more efficient just in our daily activities and so when I look ahead to 'twenty six.

I'm anticipating we're going to keep our head count roughly flat, but we're going to keep increasing the resources against those areas that you know.

Driving the greatest results.

And we're on a great mission to do that and it's not just on the Opex side.

We are looking at our Capex and we don't anticipate.

Accretion of our Capex.

26 are based upon sort of all the optimization work with video.

A lot of other things that are in the pipeline around efficiency and optimization and so from our perspective.

Very confident that we are able to move our dollars against the right opportunities are without early in the P&L. So clearly.

Rajeev Goel: Our focus on generative AI is also improving operational agility, streamlining internal workflows, and allowing us to redirect resources towards growth initiatives without adding structural cost. This efficiency has allowed us to expand our sales team, focus on buyers, and grow spend from existing partners, and onboard new partners. We are making great progress integrating with the fast-growing mid-to-long-tail segment, and so far in 2025, we've added over 25 new DSP partners. All of these efforts help us counter the near-term headwinds from legacy DSPs and further diversify beyond the top five, as I described last quarter. Core to our long-term strategy is being nimble in identifying opportunities, and then executing rapidly to capitalize on them. We have achieved this while managing our costs and consistently delivering profits in many different environments. The foundation of this approach is expanding our capacity while driving down our unit costs.

Feeling good about the.

Ah.

Progress and.

Our ability to increase our margins as revenue accelerates.

Thanks, Dave.

And Fortunately I guess at time, so I'm going to turn the call back over to Ricky for closing remarks.

And your follow up calls recently.

Thank you Stacy and thank you all for joining US today, our results demonstrate the power of our differentiated business model, we continue to innovate diversify our business and operate with discipline. Our AI innovation is leading the industry with measurable outcomes driving momentum across the ecosystem.

Looking to 2026 and beyond as revenue growth Reaccelerate, we anticipate margin expansion at both the gross and adjusted EBITDA levels because of our efficient and leverage business.

We look forward to seeing many of you at upcoming conferences, including the UBS technology and AI conference on December 2nd.

Virtual Smid cap conference on December 3rd and Raymond James TMT Conference on December 9th.

Rajeev Goel: We processed approximately 87 trillion gross impressions in Q3, a 24% increase over last year, and a 12% sequential gain versus Q2. Nearly 60% of total impressions were from CTV and mobile app inventory, highlighting our increasing focus on high-engagement channels. Further, the increase in impressions is highly leveraged over a fixed cost base. Over a trailing 12-month basis, unit costs in the third quarter declined 19% over the comparable prior year period. In terms of operating expenses, our early investments in AI to drive operational efficiency are yielding measurable results. Year to date, every quarter, we have successfully kept our total operating expenses roughly flat at $51 million, while realigning investments to the areas that deliver the strongest ROI. This allows us to scale profitably even as we invest ahead of growth.

Thanks, everyone for joining us today, a great afternoon.

Rajeev Goel: For example, we increased our buyer-focused sales team by 19% in Q3 compared to the prior year, while the overall total headcount was flat. This disciplined approach enables us to deliver our 38th straight quarter of adjusted EBITDA profitability. This is a track record few companies in our sector can match. Q3 adjusted EBITDA was $11.2 million, or 16% margin, which included foreign exchange costs of approximately $1 million due to the weakening US dollar over the quarter. US GAAP net loss was minus $6.5 million, or minus $0.14 per diluted share. Moving to cash and our capital allocation, our balance sheet remains a core strategic advantage. In the third quarter, we generated $32.4 million in net operating cash flows and free cash flow of $22.8 million. In addition to efficient working capital management, there were two other factors that improved our cash flow for this period.

Rajeev Goel: The DSP that had made changes in mid-2024 returned to growth in Q3, which favorably improved our DSOs. There was also a reduction in cash taxes paid because of the new federal tax bill that went into effect earlier this year. To underscore our long-term ability to generate cash, since the beginning of 2021 through Q3, we have generated over $390 million in net cash from operations and more than $215 million in free cash flow. We ended the quarter with $136.5 million in cash and zero debt. Given the strength, we've continued to deploy our capital to maximize shareholder value. Since the inception of our repurchase program in February 2023 through the end of Q3, we have bought back 12.4 million Class A common shares for $180.6 million. We have $94.4 million remaining in our repurchase program authorized to the end of 2026.

Rajeev Goel: This program, combined with our ongoing investments in AI innovation, reflects a balanced approach to capital allocation and a commitment to long-term shareholder value. Turning to our Q4 outlook, we anticipate strong growth in secular areas of the business, including double-digit growth for CTV when excluding political advertising, and 30% plus growth for emerging revenues. As a reminder, in Q4 2024, political advertising represented about 12% of revenue, nearly 80% of which was via CTV. In terms of the latest trends, in October, the typical holiday seasonal uptick thus far has been relatively muted for some consumer discretionary ad verticals such as food and drink, and arts and entertainment. Accordingly, we are taking a prudent approach to guidance based on the latest trends. We expect Q4 revenue to be in the range of $73 to 77 million.

Rajeev Goel: As it relates to the large DSP that declined in July, we are assuming its associated revenue to be flat in Q4 relative to Q3. We anticipate Q4 operating expenses to be similar to Q3's level, as AI-driven efficiencies continue to offset selective investments in our sales team. Q4 adjusted EBITDA is projected to be in the range of $19 to 21 million, which also factors in continued weakness of the US dollar. For the full year, we expect revenue to be in the range of $276 to 280 million, and adjusted EBITDA to be in the range of $53 to 55 million, inclusive of more than $5 million of estimated negative FX impact. We are maintaining our full-year CapEx projection at $15 million, which is a year-to-year reduction made possible by AI-driven optimization efforts.

Rajeev Goel: In closing, our Q3 results highlighted the durability of our financial model and validated the progress we are making behind our business transformation. Looking ahead, we're confident in our robust, multifaceted strategy. Our AI-first end-to-end platform is driving measurable results. We're adding new revenue streams, expanding our SPO relationships, and rapidly diversifying our DSPs in line with future growth opportunities in commerce, performance CTV, and mobile app. With respect to potential remedies in the Google AdTech antitrust trial, we continue to believe that any remedies that level the competitive playing field, whether structural, behavioral, or both, will benefit the open internet and PubMatic. In 2026 and beyond, as revenue growth reaccelerates, we anticipate margin expansion in both the gross and adjusted EBITDA levels because of our efficient and leveraged business. Our decade-plus experience owning and operating our global private cloud infrastructure has given us several advantages.

Rajeev Goel: First, it has enabled us to expand capacity while at the same time progressively reduce our rate of CapEx and drive down unit costs through optimization initiatives. Second, it's allowed us to invest early on in next-generation technology with NVIDIA. Today, our infrastructure is a clear differentiator, with investments well ahead of our peers, that will continue to drive efficiencies and business impact. We are also continuing to leverage AI to drive efficiency and increase our team's productivity. We anticipate total headcount will remain relatively flat in 2026, while investments supporting our fastest-growing areas of our business will increase through internal reallocations. Finally, we are also laser-focused on free cash flow generation and aim to increase cash flow next year, supported by further working capital improvements and incremental AI-driven efficiencies. Collectively, we believe our efforts will drive a return to double-digit revenue growth in the future.

Rajeev Goel: With that, I'll turn the call over to Stacie for questions.

Operator: Thank you. As a reminder, you can ask a question by raising your hand located on the dashboard. If you're on your phone, please press star 9. In the interest of time, we ask that you please limit your question to one and one follow-up. With that, the first question comes from Andrew Merrick at Raymond James. Please go ahead, Andrew.

Rajeev Goel: Hi, can you hear me now?

Rajeev Goel: Yes, we can.

Rajeev Goel: Okay, thanks. Rajeev, if you could maybe expand a bit on the topic of SPO and some of the recent moves companies like The Trade Desk have made, kind of leaning into OpenPath, launching OpenAds, and declaring all SSPs as resellers. On the other hand, the two of you are collaborating on that Deal ID management API. I guess since we last spoke last quarter, how would you characterize the state of play there? I have a follow-up for Steve.

Rajeev Goel: Sure. Yeah, thanks, Andrew, for the question. Let me first just clarify on the reseller kind of noise that's out there. The industry standard definition, which has been with the industry for over a decade, is that a reseller is the term for when inventory flows from a publisher to an intermediary and then to an SSP. The intermediary can be another exchange or some sort of aggregator of inventory. In contrast, direct is when inventory flows from the publisher directly to the SSP. PubMatic is a platform for direct inventory monetization. Reselling is not our business. We are a direct connection to publishers, and that's how we're able to provide significant incremental value to publishers and to buyers. I think it's pretty clear we provide value in ways that DSPs do not. Yield optimization is a key example of that.

Rajeev Goel: Trade Desk, in particular, has been very clear that they are not in the yield optimization business. A publisher needs to have a yield function in place in order to maximize their revenue, which is core to what we do. At the same time, we're also providing value to Trade Desk and others, right? Who, as you noted, Andrew, they're relying on us to improve deals with our price discovery and provisioning API integration announcement. I think what you can see here is that the ecosystem is multifaceted, certainly complex.

Rajeev Goel: Our focus is really on taking that direct integration with publishers that we have, all of that inventory flowing through our platform, the data, the audiences, and really creating value for buyers in such a way that they're able to generate increased return on ad spend, increased ROI, which causes them to then spend more on our platform. That, in turn, generates higher yield for our publishers. That is really the core and the focus that we have.

Rajeev Goel: What we're finding with Activate and other capabilities on our platform, a lot of the focus on AI that we talked about in the prepared remarks, is that we have a lot of opportunity coming at it from the sell side of the ecosystem based on the options, the data, and our close integrations with publishers to be able to add value to both the buyers and to the publishers.

Rajeev Goel: Great. Thank you for that. Maybe Steve, if I could, on the COGS point, can you just expand a little bit on the ability to drive that unit cost leverage there and how we should think about that line either on an absolute dollar basis or percentage of revenue going forward? Thank you.

Rajeev Goel: Sure. Well, good to reconnect, Andrew. From our perspective, we for many years have been focused on owning and operating our own infrastructure and have done it very successfully, as you noted, driving down unit costs. We've consistently done that for a decade, often double-digit unit growth reductions. From our perspective, 2026 is no different, other than that we continue to leverage AI more and more to drive optimizations. As you saw in our prepared comments, we increased the number of gross impressions processed by over 20% in the quarter. We didn't do that by just throwing a lot of CapEx at it. We did it through software and AI. That basic process is going to continue, but we have more tools and more ability to do that. I would expect in the future, as our revenue reaccelerates, we're going to increase our gross margin.

Rajeev Goel: It's going to be a function of revenue and managing our costs.

Operator: Great. Thanks, Steve. Our next question comes from Matt Swanson at RBC. Please go ahead, Matt.

Matt Swanson: Yeah, great. Thank you, guys, for taking my question. Obviously, a super strong quarter for CTV growth, Explitical. You called out a lot of the drivers there, right? The great growth in the live sports, maybe some of that expansion of mid-market DSPs, and the 90% coverage now of top 30 streamers. Could you give us kind of a little more color, maybe over the past year, just what sort of evolution you've seen in the CTV environment and kind of how you're investing to grow or continue to grow next year?

Rajeev Goel: Sure. Yeah. Thank you, Matt, for the question. CTV has been obviously a very strong growth area for us, and we've seen tremendous scale, really building from zero organically several years ago to where we are today. I think there's a couple of trends that are happening. First of all, we are working with more and more premium publishers, right? This quarter, we shared over 90% of the top 30 globally. We added some new FAST streamers to the Future Today and Local Now. That builds on our base of premium inventory from existing publishers like Roku, Paramount, and NBC. At the same time, there's huge growth in the advertiser mix in CTV. Whereas traditional TV has a couple hundred, maybe 500 advertisers in aggregate, that are the lion's share of ad budgets.

Rajeev Goel: With streaming TV, what we see is that there's tens of thousands of advertisers reaching now into the hundreds of thousands, and that number is growing very quickly. As we have focused on going after mid-market-focused DSPs, many of them are focused on small and medium businesses like Mountain or TV Scientific, where they're focused on performance advertising, again, some of those same folks. There's a lot more dollars that we're able to bring onto the platform, and that's creating another layer of growth. Third, we've really leaned into AI, as you could tell from the past calls and also the prepared remarks today, all three layers of the technology stack. I think that's really unlocking incremental budgets as well. Live sports is just one example of that.

Rajeev Goel: Actually, one of our first generative AI creative tools we launched last year was focused on helping publishers bring in more political ad spend by scanning political ad creatives. We're continuing to apply that technology for other use cases. There are a lot of other verticals like pharma, for instance, health and wellness, where there are sensitive categories, but we're able to generate unlock of spend through AI. I think it's a really, obviously, exciting area for us. We're going to continue to focus global investment in this area. As we bring more buyers onto our platform via Activate, via our curation capabilities, and now with the AdCP launch, we think there's long runway growth ahead of us for CTV.

Rajeev Goel: Yeah, that's super helpful. Maybe following up on your commentary on GenAI and some of the agentic, obviously, we've been hearing a lot from a lot of players in the space around these two themes. Can you just talk a little bit about kind of the right to win and how you help your stakeholders understand the value creation versus the noise around these themes? Maybe, as you said, with the AdCP, it's not about winning yourselves or creating a TAM expanding ecosystem around those themes.

Rajeev Goel: Yeah. I think let's take each of those in turn. First of all, I think the right to win comes from a couple of things. First of all, it's owning all of our own infrastructure. What that means is that we're in a unique position to be able to deploy cutting-edge AI technology, AI foundational infrastructure, like the partnership that we announced with NVIDIA. That came as a result of multiple years of collaboration. It's not just something you can wake up and do all of a sudden. To be able to do that, you have to really own and control and be in a position to manage all of that infrastructure. I think that's the first right to win, our long-term capability set there and expertise. Second is you've got to have the transactions and the data flowing on your platform.

Rajeev Goel: An AI algorithm is only useful to your customers and only relevant to them if you have the scale and ability to transact. Of course, we have that with a trillion or so daily ad impressions flowing on our platform, almost 2,000 publishers, depth in CTV, mobile app, and display, and so on and so forth. I think that's the second key for the right to win. I think the third is a demonstrated ability to innovate and to really build solutions, not just talk about them. I think what you've seen from us over the last year is that we are significantly ahead of our competition. We have launched 17 agents in our publisher platform already using AI. I think one of our competitors shared that they're planning to build their first agent, right?

Rajeev Goel: You can see that's a one to two-year advantage that we have in terms of track record of execution. What that means is that when we're launching things like AdCP, the Ad Context Protocol, which is managing workflow via AI, we are in a position to be able to go talk to both publishers and buyers about, here's how you get started, here are the first use cases to implement, and these things are available on our platform today. I think that's a key part of creating value within the ecosystem, being able to participate in those early transactions, being on the frontier, and then benefiting from the groundswell of growth that we see in front of us.

Rajeev Goel: Thank you.

Operator: Our next question comes from Shweta Kejaria. Well, please go ahead, Shweta.

Shweta Kejaria: Thanks, Stacie. Thanks for taking my question. I have a follow-up on the first question on OpenPath, not specifically just OpenPath, but are you seeing, Rajeev, any trends that would suggest that perhaps Trade Desk is increasingly going direct and you are getting impacted by not only just as a reseller, but in terms of the impressions volume? Are you seeing any impact to your business in general? Is it related to them actually launching that Kokai platform? I would think not, but there is this concern in the industry. If you could please perhaps comment on that to correct that, that would be great. Thank you.

Rajeev Goel: Sure. Yeah, absolutely. First of all, the good news is we are a platform for direct inventory. Regardless of what label anybody wants to put on anything, we know that we are working directly with premium publishers, and there is not a more efficient way for buyers to access the inventory than what is coming through our platform. I think underlying your question, the new Trade Desk platform, Kokai, does evaluate and buy media differently from what we have seen. We took two important steps over the course of Q3, resulting in spend from them stabilizing in August and September, as Steve mentioned. The first is that we revised our machine learning algorithms to ensure we're sending an optimal mix of inventory to them. That work is largely behind us, so we're always doing some level of continuous optimization to drive more spend.

Rajeev Goel: We work with our SPO, Supply Path Optimization Partners, to help them configure their seat in the DSP to ensure that they're getting the benefit of their SPO relationships with us. That work is largely completed as well. We have agency marketplaces set up with pretty much every major holdco in many different parts of the world. These agencies had to make changes over the last couple of months to ensure that their marketplaces stay intact and that they continue to get the performance and efficiency that they're seeking. These marketplaces are critical to the agency's media buying offerings that they provide to their advertiser clients. We shared publicly, for instance, we power WPP's premium marketplace. That's built on top of our SSP.

Rajeev Goel: Making sure that they're receiving their SPO data, workflow, efficiency, benefits is key to their being able to continue to offer that in market. Similarly, given we're a market leader in curation, we work with our curation partners to ensure that their campaigns continue to run via our SSP and that they get the ROI, the transparency, and the control that caused them to choose to work with us in the first place. I think Trade Desk shared that I believe 85% of their clients are now up and live on Kokai. We think probably the bulk of this movement is behind us. That's a key part of why we're also very rapidly diversifying our DSP mix. As the market evolves to a more fragmented DSP landscape, we're finding significant success with 25% plus year-over-year growth with mid-market DSPs on our platform in Q3.

Operator: Makes sense. Thanks, Rajeev. Our next question comes from Matt Condon at JMP. Please go ahead, Matt.

Matt Swanson: Thank you so much for taking my questions. My first one is just on there's been a lot of talk of just the impact across the open web on publisher traffic, just given these AI platforms that are taking increased share. Can you just talk about what you're seeing across your publisher base as far as search traffic?

Rajeev Goel: Yeah, absolutely. We've seen, I would say, a fairly limited impact. I would say just stepping back, we believe the exposure overall in our business is limited to a single-digit percentage of revenue if there was zero search traffic going to our publishers and we took no steps to mitigate it. That's probably a high-end kind of watermark of potential impact. We shared in our comments today that roughly 60% of the impressions that we are processing are for CTV and mobile app, and those are unaffected by AI search. Of the remaining business, which is browser-based where search is relevant, industry data indicates that search referral traffic is roughly 15%, with the rest of publisher traffic coming from either social or direct navigation.

Rajeev Goel: Given that we work in the head of the market with the top publishers rather than the long tail, I would expect that 15% number to actually be even a little bit lower. If you take 40% of the impressions, 15% impact at the high end, that gets you to a mid-single-digit percentage potential impact. Again, if we had no mitigating steps that we took. Actually, there is a lot that we can do in terms of continuing to bring on board more CTV, more mobile app, more commerce impressions, and the like. I think the other thing that we are seeing is the offensive opportunity, which is that there is a growing number of AI search experiences that consumers are spending more and more time on.

Rajeev Goel: For instance, Gannett launched a solution where users on their properties can search the archives of Gannett articles and get answers to questions. I think that is actually a growing canvas of inventory of opportunity for us as consumers get more and more used to that AI search kind of consumption behavior. They are looking for that from many of their traditional content partners where they consume content. We think that is a new tailwind that is emerging in the business.

Matt Swanson: That's very helpful. My second one is just on your own infrastructure, just the differentiation there, and your partnership that you announced with NVIDIA, just the 5x speed improvements in bid response times. Can you just talk about the structural difference that's allowing, and is it allowing win rates and auctions to be higher? Just talk about the differentiation there and how that can drive sustainable growth as we go into 2026.

Rajeev Goel: Yeah, absolutely. Actually, the good news is that there's multiple ways that having this kind of infrastructure cooperation, collaboration with NVIDIA can benefit our business. It really is a collaboration, not just in hardware, but also in software. I think NVIDIA themselves says that it's over half, maybe over 60% of their revenue comes from software solutions, right? Obviously, they're well-known for hardware, but it's really a combination of hardware and software. I'll give you three specific examples. We use NVIDIA GPUs to power real-time ad decisioning in very low-latency environments. Think about things like connected TV or live sports, where if we can process ad transactions faster, if we can cut latency, then that leads to fewer timeouts, more bids in the auction on our platform, and more opportunities for us to win with the publisher.

Rajeev Goel: That boosts outcomes, ROI for both advertisers and publishers, also boosts our revenue. The second example is using NVIDIA Triton inference servers, where we use a specific hardware software implementation with them for traffic shaping. Traffic shaping is a very important and critical role that anybody on the sell side plays, which is to figure out which of the roughly trillion ad impressions we have per day we should send to each particular DSP. Some DSPs, we might send tens of billions. Some might be single-digit billions. Some might be hundreds of billions of ad impressions. It is really important that we pick the right ones. For every DSP, there has got to be a different decision set of calculus based on the types of advertisers and campaigns that are in their platform.

Rajeev Goel: Of course, these decisions have to be made within milliseconds of the publisher requesting a bid from us. Third is in the reporting area. We're using NVIDIA Software Accelerator for Apache Spark, which allows us to streamline and improve the speed at which we're able to process data. That in turn allows for smarter optimization across a wide array of different use cases. Those are, I think, hopefully just three tangible examples of how our NVIDIA partnership is really leading to the leadership that we talked about in the prepared remarks, in particular at the infrastructure layer, which then allows us to derive benefit in the application and transaction layers of the AI stack.

Matt Swanson: Very helpful. Thanks, Rajeev.

Operator: This one comes from Rob Colbert at Evercore. Please go ahead, Rob.

Rob Colbert: Great. Thank you very much. Rajeev, if you wanted to go back to this 5x faster in bid response we had on unlocking optimization strategies previously impossible to their programmatic rates, can you unpack that? Assuming you have a very substantial lead in accelerated computing in this space, are there counterparties on the demand side who can take advantage of that? Do you think you need to take on a bigger role either in optimizing demand or hosting demand-side logic and optimization to sort of fully take advantage of those capabilities? There's something more akin to what the walled gardens do, maybe in terms of their highly vertically integrated supply chains. Steve, just wanted to maybe get a finer point on this Trade Desk issue.

Rob Colbert: Just given current trends, do you see the potential to maybe see growth alongside their growth in the back half of 2026? Thank you.

Rajeev Goel: Yeah, thanks, Rob. Let me start with your first question, then I'll hand it over to Steve. We absolutely do see opportunity to better leverage our infrastructure through vertical integration. I'll give you two examples of that. One is, as we work more and more with mid-market-focused DSPs, who themselves tend to be smaller, what we find is that there's a lot of opportunity for us to use our platform to help them compete more effectively. What I mean by that is we have huge amounts of data on our platform from this one trillion daily ad impressions. A typical mid-market DSP, they may see 5% to 10% of the traffic that a very large DSP like a Google DV360 would see. These mid-market DSPs, because they're smaller in nature, don't have access to all of that same data.

Rajeev Goel: At the same time, they also don't have access to all of the performance aspects of the auction that we're running on behalf of the publisher. There are opportunities for us, which we are working very hard on, to use our platform to help those DSPs derive better performance, better targeting, and ultimately better ROI. That plays very closely with the infrastructure that we've deployed. That's one example, Rob, where I think vertical integration, where we can do more than we have done traditionally for a legacy DSP. I think these mid-market DSPs, because they're growing quickly, are very hungry for that kind of collaboration and our ability to help them solve problems. The second is with our Activate solution, where buyers are buying directly in our SSP.

Rajeev Goel: Here, that faster processing of bids, better inferencing, all of these things, they help make Activate a very effective solution. We're seeing that play out in terms of the growth, up 4x year over year. Campaign numbers are growing on a similar basis in terms of the number of campaigns run. We think there's a lot of benefit from vertical integration. As you said, Rob, that is somewhat akin to what the walled gardens do. Of course, it's no secret that they're very good at driving performance. We think that vertical integration is a key part of that. I'll turn it over to Steve now.

Steve Pantelick: Sure, Rob. Just correct me if I don't have the right question, but in terms of our growth opportunities in 2026, obviously, we're going to come back shortly with the next earnings, talk about 2026, but there's a lot of things that we've focused on to put us in a very strong position to re-accelerate growth. You've heard some of the stats from the third quarter, strong CTV growth, mobile, as well as our emerging revenues. Once we work through the current transition that we've identified in the second half of this year, we are very confident that we're going to be growing on a number of different fronts. Just as a reminder, we've been investing in secular growth areas. This has been a long-term strategy, and we're seeing the results of that. We are expanding, diversifying our DSP base.

Steve Pantelick: We're growing very strongly with commerce DSPs, specialized DSPs around pharma. The coupling of our focus on secular growth, expanding our buyer base, and then innovation around AI, not just in the infrastructure, but certainly in terms of capabilities and functionality. We launched this past quarter AI-driven publisher products, and that will continue to be a source of growth. We're very positive about the growth in the second half of 2026 as we look at the plethora of opportunities ahead of us.

Rob Colbert: Great. Thank you, Steve. Thank you, Rajeev.

Operator: Our next question comes from Jacob Armstrong at Qube Research. Please go ahead, Jacob.

Jacob Armstrong: Thanks for taking my question. This is Jacob on for Justin. Can you discuss how you believe the role the SSP needs to evolve in the coming years as Agentic AI expands? What are the key investments needed to ensure PubMatic is best positioned to capitalize off this transition over the next few years?

Rob Colbert: Sure. Yeah. I think the role of the SSP is going to expand significantly from transaction automation to a much bigger role in workflow automation, particularly around audience and inventory discovery, planning, and in measurement. If we think about where programmatic technologies have been applied so far, maybe for the last 15 or so years, I would say it's been heavily applied at the transaction level, meaning we have an ad impression, and we want to get a number of advertiser bids on it, and then we're helping DSPs bid on that individual ad impression. There's been a lot of maturation, innovation, and focus on that single atomic impression. We still have RFPs that advertisers send or agencies send out to publishers via email, fill out the spreadsheet. We're launching this ad campaign.

Rob Colbert: We want to understand what audiences or what inventory you might have available. Some human at the publisher fills that out, and then they email that back to the agency. The agency collects those, and then they decide where they're going to set up and allocate budget. That is still a largely manual process. Some things have improved, but still a lot of manual approaches. I think there's a huge opportunity to think outside of the pure atomic impression or transaction around the discovery and planning, and then after the transaction to the measurement, to use AI where an advertiser's agent or an agency's agent can say, Hey, I'm launching this product or service.

Rob Colbert: Please tell me what you can do for me as a publisher or media owner from an audience and an inventory perspective. We can take a structured response, aggregate that up across maybe the publishers that we're working with, and then deliver a pre-constructed campaign brief to the agency. The agency can begin to buy that using our transaction bytes. We can have a feedback loop around measurement with that. The agency can revise their campaign. I think there's a lot that can be done outside of that single transaction element. That's really where we are focused with the transaction layer of the stack that I mentioned earlier. With Ad Context Protocol, we're working out what exactly should those structured requests and responses look like. How do they get set up? Who owns what data?

Rob Colbert: How do they get optimized? I think there's a long runway, Jacob, ahead in that area.

Matt Swanson: Thank you.

Operator: This question comes from Ed Alter at Jefferies. Please go ahead.

Ed Alter: Hi. Thanks for the question. I wanted to talk about the investments you're making to meet the demand from the mid-market DSPs like Mountain. Where exactly are those going to show up? Is that more headcount, tech investments? Just be great to talk about the color on that.

Steve Pantelick: Sure. We've been very focused throughout this year and really leading into this year to be as efficient as possible in terms of where we deploy our teams. We made a very conscious decision in the last 18 months to move more and more resources towards the fastest growing areas, segment growth areas, of which, of course, critical DSPs are a part of that. We've been increasing investment in the team that goes directly and calls on these DSPs. This year, we increased thus far about 19% in terms of headcount. We've done that by reallocating team members around the organization to keep up our results. Our overall headcount is roughly flat. We've done a very careful analysis of how we're going to keep on leveraging our existing resources.

Steve Pantelick: Of course, all of this is supported by the progress we've made in AI in terms of becoming more efficient just in our daily activities. When I look ahead to 2026, I'm anticipating we're going to keep our headcount roughly flat, but we're going to keep increasing the resources against those areas that are driving the greatest results. We're on a great mission to do that. It's not just on the OpEx side. We are looking at our CapEx, and we don't anticipate increasing our CapEx in 2026 based upon all the optimization, the work with NVIDIA, and a lot of other things that are in the pipeline around efficiency and optimizations. From our perspective, we're very confident that we are able to move dollars against the right opportunities without burdening the P&L.

Steve Pantelick: Feeling good about the progress and our ability to increase our margins as revenue accelerates.

Ed Alter: Thanks, Steve.

Operator: Thank you. Unfortunately, we are just about out of time. I'm going to turn the call back over to Rajeev for closing remarks, and we'll talk to you all in your follow-up calls very shortly.

Rob Colbert: Thank you, Stacie, and thank you all for joining us today. Our results demonstrate the power of our differentiated business model. We continue to innovate, diversify our business, and operate with discipline. Our AI innovation is leading the industry with measurable outcomes, driving momentum across the ecosystem. Looking to 2026 and beyond, as revenue growth re-accelerates, we anticipate margin expansion at both the gross and adjusted EBITDA levels because of our efficient and leveraged business. We look forward to seeing many of you at upcoming conferences, including the UBS Technology and AI Conference on 2 December 2024, the Wolfe Virtual SMidCap Conference on 3 December 2024, and Raymond James TMT Conference on 9 December 2024. Thanks, everyone, for joining us today. Have a great afternoon.

Q3 2025 PubMatic Inc Earnings Call

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