PubMatic — Second Quarter 2026 Earnings Summary

Financial Performance

• Total revenue was $78.6 million, an 11% increase year-over-year compared to $71.1 million in Q2 2025.
• GAAP net loss was $(1.2) million, improving from a $(5.2) million loss in Q2 2025; GAAP net loss per diluted share was $(0.03) versus $(0.11).
• Adjusted EBITDA was $19.6 million (25% margin), a 38% increase from $14.2 million (20% margin) in Q2 2025.
• Non-GAAP net income was $5.9 million ($0.12 per non-GAAP diluted share), up from $2.5 million ($0.05 per share) in Q2 2025.
• Net cash provided by operating activities was $20.2 million, a 36% increase from $14.9 million in Q2 2025.
• Free cash flow was $13.7 million, a 47% increase from $9.3 million in Q2 2025.
• The company ended the quarter with $137.5 million in total cash, cash equivalents, and marketable securities and reported no debt.
• Cost of revenue per million impressions processed decreased 20% on a trailing twelve-month basis.

Guidance and Future Outlook

• For Q3 2026, revenue is expected to be between $75 million and $77 million.
• Adjusted EBITDA for Q3 2026 is projected between $17.0 million and $19.0 million, assuming a negative foreign currency exchange impact from the Euro and Pound Sterling.
• Management anticipates continued double-digit year-over-year revenue growth and meaningful full-year margin expansion.
• The company does not provide guidance for GAAP net income due to the unpredictability of stock-based compensation and other elements.

Business Segments and Product Lines

• CTV, mobile app, and emerging revenues represented approximately 60% of total revenue, roughly double the share from three years ago.
• CTV revenue grew 25% year-over-year in the Americas and 13% globally, accounting for approximately 20% of total revenue.
• Mobile app revenue grew over 40% year-over-year, representing approximately 25% of total revenue.
• Emerging revenues grew approximately 100% year-over-year, accounting for 15% of total revenue, including newly launched AI solutions.
• AgenticOS delivered over 80 fully autonomous campaigns (up from 30 a quarter ago) and over 4,000 AI-powered deals (up from 1,000 a quarter ago).
• Launched Decision Fabric, a containerization solution allowing buyers to run proprietary decision models natively within the platform.
• Launched Creator Marketplace to connect advertisers with premium inventory and creators.
• Supply Path Optimization represented over 55% of total platform activity.

Market and Competitive Landscape

• AgenticOS now includes all five global agency holding companies.
• Level Agency increased ad spend with PubMatic after AgenticOS delivered more than 2x reach per dollar versus its incumbent DSP.
• Havas Media and Telefónica launched Spain's first fully agentic CTV campaign using AgenticOS.
• Ad spend from Activate grew more than 2x compared to Q2 2025.
• Ad spend from mid-market focused DSPs grew over 25% year-over-year.
• Partnered with Gracenote to integrate real-time content intelligence and live sports schedules into the platform.
• Added premium inventory from Channel 4 in the UK.

Risks and Challenges

• Forward-looking statements note risks including macroeconomic and geopolitical conditions, potential deterioration in advertising demand, and consumer opt-out or ad-blocking technologies.
• Risks include failure to innovate or attract new publishers/buyers, data privacy regulations, and restrictions on third-party cookies or mobile device IDs.
• Foreign currency exchange volatility, particularly regarding the Euro and Pound Sterling, may impact financial results.
• The company faces risks related to scaling platform infrastructure and potential liabilities for non-compliance with data privacy laws.

Management Commentary and Tone

• CEO Rajeev Goel described the quarter as an "important inflection point," highlighting double-digit revenue growth delivered earlier than anticipated and expanded profitability.
• CFO Steve Pantelick noted that targeted investments over the past three years have fundamentally changed the business, with 60% of revenue now coming from high-growth areas.
• Management emphasized that AI is transforming digital advertising planning and activation, creating a compounding advantage through proprietary intelligence.
• The tone reflects confidence in the AI-native infrastructure delivering better performance, faster execution, and greater efficiency.

Other Key Points

• PubMatic repurchased 2.1 million shares in Q2 2026, representing 4.2% of fully diluted shares as of June 30, 2026.
• Through June 30, 2026, the company used $211.4 million to repurchase 15.5 million shares, with $63.6 million remaining from the 2023 Repurchase Program.
• CFO Steve Pantelick announced his planned retirement after fifteen years; he will serve as CFO through Q1 2027 and as a senior adviser until July 1, 2027.
• The company initiated a search for a successor to the CFO role.
• Infrastructure optimization initiatives drove nearly 92 trillion impressions processed in Q2 2026, an 18% increase over Q2 2025.