PubMatic : Q1 2024 Earnings Presentation

Q1 2024 Earnings Presentation

May 7, 2024

S AF E H AR BOR

This presentation contains forward-looking statements regarding our future business expectations, including but not limited to o ur guidance relating to our revenue and adjusted EBITDA for the second quarter of 2024 and revenue, adjusted EBITDA margin, free cash flow and capex for the full year 2024, our expectations regarding our free cash flow, capital expenditures, future hiring, future market growth, our long -term revenue growth and our ability to gain market share. These forward-looking statements are based on our current expectations and assumptions regarding our business, the economyand o ther future conditions and may differ materiallyfrom actual results due to a variety of factors including: our dependencyon the overall demand for advertising and the channels we rely on; our existing customers not expanding their usage of our platform, or our failure to attract new publishers and buyers; our abilityto maintain and expand access to spend from bu yers and valuable ad impressions from publishers; the rejection of the use of digital advertising by consumers through opt-in,opt-out or ad-blocking technologies or other means; our failure to innovate and develop new solutions that are adopted by publishers; the war between Ukraine and Russia and the ongoing conflict between Israel and Palestine, and the related measures taken in response bythe global community; th e impacts of inflation as well as fiscal tightening and rising interest rates; public health crises, including the resulting global economic uncertainty; limitations imposed on our collection, use or disclosure of data about advertisements; the lack of similar or better alternatives to the use of third -party cookies, mobile device IDs or other tracking technologies if such uses are restricted; anyfailure to scale our platform infrastructure to support anticipated growth and transaction volume; liabilities or fines due to publishers, buyers, and data providers not obtaining consents from consumers for us to process their personal data; any failu re to comply with laws and regulations related to data privacy, data protection, information security, and consumer protection; and our ability to manage our growth. Forward-looking statements should not be read as a guarantee of future performance or results and will not necessarilybe accu rate indications of the times at, or by, which such performance or results will be achieved, if at all.

We operate in a competitive and rapidly changing market, and new risks mayemerge from time to time. Additional information about risks and uncertainties associated with our business are disclosed in our reports filed from time to time with the Securities and Exchange Commission, including our most recent Form 10 -K and any subsequent filings on Forms 10-Q or 8-K, available on our investor relations website at https://investors.pubmatic.comand on the Securities and Exchange Commission website at www.sec.gov. All information in this presentation is as of May 7, 2024. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required b y law.

In addition to financial information presented in accordance with U.S. generallyaccepted accounting principles ("GAAP"), thi s presentation includes certain non-GAAP financial measures, including adjusted EBITDA, adjusted EBITDA margin, Free Cash Flow, non-GAAP net income, non-GAAP net income margin and non-GAAP diluted EPS. We believe that this information can assist investors in evaluating our operational trends, financial performance, and cash generating capacity. These non-GAAP measures are presented for supplemental informational purposes onlyand should not be considered a substitute for financial information presented in accordance with GAAP. These non-GAAP measures have limitations as analytical tools. For example, other companies maycalculate non-GAAP metrics differently or may use other metrics to evaluate their performance, all of which could reduce the usefulness of our non -GAAP financial metrics as tools for comparison. They should not be considered in isolation or as a substitute for analysis of other GAAP financial measures. A reconciliation of these measures to the most directly comparable GAAP measures is included at the end of this presentation.

This presentation contains statistical data, estimates and forecasts that are based on independent industrypublications or o ther publiclyavailable information, as well as other information based on our internal sources. This information involves manyassumptions and limitations, and you are cautioned not to give undue weight to these estimates. We have not independentlyverified the accuracy or completeness of the data contained in these industrypublications and other publiclyavailable information. Accordingly, we make no representations as to the accuracy or completeness of that data nor do we undertake to update such data after the date of this presentation.

The trademarks included herein are the property of the owners thereof and are used for reference purposes only.

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W H AT W E D O

PubMatic is building a better supply chain for the future of advertising on the open internet

Q 1 2 0 2 4 F I N A N C I A L H I G H L I G H T S

R E V E N U E	G AAP NE T L O S S	AD J US T E D E B I T DA 1	C AS H F L O W F RO M
			O P E RAT I ONS 2
$66.7M	$(2.5M)	$15.1M	$24.3M
2 0 % YO Y	- 4 % MA R G IN	2 3 % MA R G IN

1 Adjusted EBITDA and Adjusted EBITDA Margin are non-GAAPfinancial measures. See reconciliation in Appendix.

2 Cash flow fromoperations is net cash provided by operating activities.

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W E AR E BU I L D I N G T H E S U P P L Y C H AI N OF T H E F U T U R E

D E M A N D S I D E P L AT F O R M S

A G E N C I E S

A D V E R T I S E R S

MO N E T I Z A T I O N & C O N T R O L

C O R E S S P	A C T I V AT E
O P E N W R A P	C O N V E R T
	D A T A & A U D I E N C E S
C O N N E C T	I D E N T I T Y
H U B
	F O R MA T S & D E V I C E S
CTV	ONLINE VIDEO	MOBILE APP
DESKTOP	MOBILE WEB	NATIVE

P U B L I S H E R S

A N D A P P

D E V E L O P E R S

C O M M E R C E

M E D I A

N E T W O R K S

D AT A

P R O V I D E R S

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S E L L - S I D E T E C H N OL OG Y P R OV I D E S A F OU N D AT I ON F OR E F F I C I E N C Y & I N N OV AT I ON I N D I G I T AL AD V E R T I S I N G

AT T RACT IN G N EW	A D D RESSABIL IT Y
EN T RANT S T O D IG ITA L	C H A NGES F U EL SEL L -
A D VERT ISIN G	SID E O PPO RT UNIT Y

P UBM AT I C I S BUI L DI NG AHE AD OF M AJOR

I NDUS T RY T RE NDS

SPO & IN D U ST RY

C O N SOL ID AT IO N

G R O WT H O F

C O N NECT ED T V

R ISE O F C O M M ER CE

M ED IA

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S U P P L Y P AT H OP T I M I Z AT I ON AC C E L E R AT I ON W I D E N S
C OM P E T I T I V E M OAT
			M ULT I P LE FACT ORS DRI V I NG
S P O S HA R E O F T O TA L A C T IVIT Y	L ONG - T E RM G ROW T H P OT E NT I AL OF S P O
O N T HE P UB MAT IC P L AT F O R M
		50%	125% net spend retention rate1 from ad
			buyers with at least three years of spending
	35%
27%			Adding 50% more buyer-focused
			salespeople to accelerate relationships
			Continued consolidation as scale
Q1 2022	Q1 2023	Q1 2024	requirements of digital advertising mount

1 We calculate our Supply Path Optimization ("SPO") net spend retention rate by starting w ith the spend from SPO buyers that ha ve been buyers on our platform for at least three years, in the last prior year ("Prior Period SPO Buyer Spend"). We then calculate the spend from these same buyers in the current year ("Current Period Spend"). Current Period SPO Buyer Spend includes any upsells and is net of contraction or attrition but

excludes spend from new SPO buyers. Our net SPO retention rate equals the Current Period SPO Buyer Spend divided by Prior Per iod SPO Buyer Spend

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C ON N E C T E D T V AN D ON L I N E V I D E O F U E L R E V E N U E G R OW T H

Y O Y I N C R E A S E I N O M N I C H A N N E L V I D E O M O N E T I Z E D I M P R E S S I O N S I N Q 1 2 0 2 4

>50%

G R O W ING

R E L AT IO NS HIP S

W IT H K E Y C T V

P R O VID E R S

Y O Y I N C R E A S E I N

O M N I C H A N N E L V I D E O R E V E N U E

I N Q 1 2 0 2 4

33%

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C OM M E R C E M E D I A C OM P AN I E S E M BR AC E P U BM AT I C ' S S E L L - S I D E T E C H N OL OG Y

W E A R E S E E ING

S T R O NG INT E R E S T

IN C O NVE R T F R O M

L E A D ING C O MME R C E

ME D IA C O MPA NIE S

E S T IM AT E D T AM E X P ANS I ON F RO M

RE T AI L M E DI A G L O B AL LY 1

$10 BILLION

O N S IT E A D S & S P O N S O R E D L IS T IN G S

O F F S IT E

A U D IE N C E E X T E N S IO N

1 PubMatic's estimate based on industry analyst data

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S U P P L Y C H AI N P E R F OR M AN C E

E V OL U T I ON U S H E R S AC R OS S T H E OP E N

I N A N E W E R A OF I N T E R N E T

P E RF O RM ANCE AD V E RT IS ING E NG I NE

A D V A N C E D S E L L - S I D E D A T A

C A P A B I L I T I E S

E F F I C I E N C Y & E N D - T O - E N D

C O N T R O L

C L O S E D - L O O P R E P O R T I N G & C O M M E R C E M E D I A D A TA

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S T R ON G P E R F OR M AN C E S E T S F OU N D AT I ON F OR

AC C E L E R AT E D R E V E N U E G R OW T H AN D M AR K E T S H AR E G AI N S

Core Differentiators

Driving Continued Success

HI G H M ARG I N	I NNO V AT I ON
RE V E NUE	D RI V E S V AL UE

C US T OME R V AL UE	NE W T AM
C RE AT I ON	E X P ANS IO N

I NT E G R AT E D

P L AT F O R M

C US T O ME R C O NT R O L

& PA R T NE R S HIP

S US TA INE D

INNO VAT IO N

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