PubMatic — Third Quarter 2026 Earnings Summary

Financial Performance:

• Total revenue reached $79.6 million, a 17% increase year-over-year compared to $67.96 million in Q3 2025.
• Gross profit was $55.6 million, representing a 70% margin, up from 63% in Q3 2025.
• GAAP net income was $5.5 million ($0.11 per diluted share), a reversal from a GAAP net loss of $6.5 million ($0.14 per diluted share) in Q3 2025.
• Adjusted EBITDA increased 133% to $26.0 million (33% margin), compared to $11.2 million (16% margin) in Q3 2025.
• Non-GAAP net income was $12.6 million ($0.25 per non-GAAP diluted share), up from $1.6 million ($0.03 per non-GAAP diluted share) in Q3 2025.
• Net cash provided by operating activities was $30.8 million, down from $32.4 million in Q3 2025.
• Free cash flow was $17.6 million, down from $22.8 million in Q3 2025.
• The company ended the quarter with $144.5 million in cash, cash equivalents, and marketable securities and reported no debt.
• Through September 30, 2026, the company used $226.6 million to repurchase 16.5 million shares of Class A common stock.

Guidance and Future Outlook:

• For Q4 2026, revenue is expected to be between $91 million and $93 million, implying 15% year-over-year growth at the midpoint.
• Adjusted EBITDA for Q4 2026 is projected to be between $31 million and $33 million, assuming a negative foreign currency exchange impact from the Euro and Pound Sterling.
• For the full year 2026, revenue is expected to range from $312 million to $314 million, representing 11% year-over-year growth at the midpoint.
• Full-year 2026 Adjusted EBITDA is expected to range from $79 million to $81 million, a 30% increase year-over-year at the midpoint.
• Management expects double-digit revenue growth and adjusted EBITDA margin expansion for the full year.
• Outlook assumes general market conditions do not significantly deteriorate regarding macroeconomic and geopolitical factors.

Business Segments and Product Lines:

• CTV, Mobile App, and Emerging Revenues comprised approximately 64% of total revenue in Q3 2026, up from 60% in Q2 2026.
• Global CTV revenue grew over 30% year-over-year, representing 21% of total revenue; Americas CTV revenue grew over 40% year-over-year.
• Mobile app revenue grew nearly 40% year-over-year, accounting for 27% of total revenue.
• Emerging revenues more than doubled year-over-year, representing 18% of total revenue, including newly launched AI solutions.
• AgenticOS has delivered over 120 fully autonomous, end-to-end agentic campaigns globally, up from 80 the prior quarter, including all five global agency holding companies.
• Over 14,000 AI-powered deals have been created on PubMatic to date, up from 4,000 a quarter ago.
• Decision Fabric adoption resulted in a 50% increase in Average Daily Reach and a 76% increase in spend delivery for a national quick service restaurant brand.
• Supply Path Optimization represented approximately 55% of total activity on the platform in Q3 2026.
• Buying activity from Activate grew more than 8 times compared to Q3 2025.
• Activity from mid-market focused DSPs grew over 40% year-over-year.
• Infrastructure optimization drove a 15% year-over-year increase in monetized impressions while reducing impressions processed by 8%.
• Cost of revenue per million impressions processed decreased 15% on a trailing twelve-month period.

Market and Competitive Landscape:

• Sony Pictures Entertainment named PubMatic its preferred programmatic advertising partner for LIVE TV on PS5.
• Strategus named PubMatic its preferred live sports programmatic partner.
• PubMatic enhanced its Live Sports Marketplace with verified, event-level content intelligence.
• The company notes a shift from sell-side targeting to sell-side decisioning driven by AI.
• Customers using PubMatic models on Decision Fabric delivered a nearly 14% increase in Average Daily Reach and a 41% increase in spend delivery for a national insurance provider.

Risks and Challenges:

• Forward-looking statements are subject to risks including dependency on overall demand for advertising and channels relied upon.
• Risks include the potential rejection of digital advertising by consumers via opt-in, opt-out, or ad-blocking technologies.
• Geopolitical tensions, including conflicts in Ukraine and the Middle East, and related disruptions to global commerce are cited as risks.
• Impacts of inflation, tariffs, fiscal tightening, and volatile interest rates may affect the business.
• Changes in currency exchange environments and volatility in global capital markets present risks.
• Limitations on data collection, use, or disclosure, including new AI laws and regulations, could impact operations.
• Restrictions on third-party cookies, mobile device IDs, or other tracking technologies could affect the business if alternatives are not available.
• Failure to comply with data privacy, protection, information security, and consumer protection laws could result in liabilities or fines.
• The company cannot provide guidance for GAAP net income due to unpredictability of stock-based compensation and other elements.

Management Commentary and Tone:

• CEO Rajeev Goel described the quarter as "outstanding," noting revenue growth acceleration for three consecutive quarters and adjusted EBITDA more than doubling year-over-year.
• Goel stated that investments in advertiser performance are translating into faster, more profitable growth and a more diversified business.
• CFO Steve Pantelick characterized the quarter as evidence that the business transformation is working, citing revenue and adjusted EBITDA performance well ahead of guidance.
• Management expressed confidence that momentum in the business will carry into 2027.
• The tone indicates strong confidence in the proprietary platform intelligence, agentic leadership, and AI-native infrastructure.

Other Key Points:

• The Board of Directors authorized an expansion of the share repurchase program by an additional $150 million through December 31, 2028.
• Following the expansion, the company has approximately $198 million allocated to share repurchases through the end of 2028.
• The company has no debt on its balance sheet, providing flexibility to fund growth and return capital.
• AgenticOS reduced campaign setup time for a luxury watch campaign by approximately 80% across six Asia Pacific markets.
• The Campaign Insights Agent on AgenticOS enables traders to investigate findings through natural-language queries.
• The company reported $48.4 million available from the 2023 Repurchase Program prior to the November 9, 2026 expansion.