PubMatic Q3 revenue increases 54% to $58.1 million
The company said that its platform processed 23.9 trillion impressions in the third quarter, a 103% increase over a year ago, as publishers continued to expand their inventory
PubMatic, a sell-side platform that delivers superior outcomes for digital advertising, today reported financial results for the third quarter ending September 30, 2021. Revenue in the third quarter of 2021 was $58.1 million, an increase of 54% over $37.8 million in the same period of 2020. GAAP net income was $13.5 million, an increase over net income of $6.2 million in the same period of 2020. Net dollar-based retention was 157% for the trailing twelve months ended September 30, 2021, an increase from 110% in the comparable trailing twelve-month period a year ago.
Adjusted EBITDA was $24.3 million, or 42% margin, compared to adjusted EBITDA of $13.4 million, or 35% margin, in the same period of 2020. Net cash provided by operating activities was $26.4 million, an increase of 617%, compared to $3.7 million in the same period of 2020. Total cash, cash equivalents, and marketable securities of $136.7 million with no debt, an increase of 12% from the second quarter of 2021.
The company said that its platform processed 23.9 trillion impressions in the third quarter, a 103% increase over a year ago, as publishers continued to expand their inventory on the PubMatic platform. Revenue from fast-growing advertising formats mobile and omnichannel video, which includes CTV, grew 64% year-over-year and represented 65% of total revenue in the third quarter. Revenue from CTV grew by more than seven times over the third quarter of 2020. As of the end of the third quarter of 2021, we programmatically monetized CTV inventory from 154 publishers, up from 114 publishers in the second quarter of 2021.
PubMatic is well diversified across more than 20 verticals and primarily associated with brand advertising spend. The top 10 ad verticals, in aggregate, grew over 70% year over year. Excluding political ads, spending across every vertical was up at least double digits over the third quarter of 2020.
In the third quarter, we entered into a record number of supply path optimization deals with advertisers. Adoption of new products, including Identity Hub and Audience Encore, led to expanded use of our platform. Over two-thirds of our third-quarter revenue had alternative identifiers to the third-party cookie and Apple’s IDFA in place, and global headcount increased by more than 20% in the first nine months of 2021, with the majority of new hires in technology and go-to-market teams.
“We delivered record revenue in the third quarter, well ahead of our expectations. This quarter marks our fourth consecutive quarter of organic revenue growth above 50% and adjusted EBITDA margin over 30%,” said Rajeev Goel, co-founder, and CEO at PubMatic. “We use land and expand approach, coupled with a usage-based revenue model. When we deliver incremental value to our customers, we participate in their upside, which further accelerates our profitable business model and enables us to invest for future growth. This flywheel positions us well for sustained and profitable growth and market share gains.”
“In the third quarter, we delivered exceptional results. Our track record indicates we are driving a distinct and sustainable combination of high revenue growth, GAAP profitability, and cash flow,” said Steve Pantelick, CFO at PubMatic. “Our diversified platform and strong customer alignment, via our usage-based model, drive high revenue retention rates and provides a greater level of visibility into our future revenue. Given this, we are raising our full-year 2021 expectations for the third time this year to reflect over 50% year-over-year revenue growth.”
For the fourth quarter of 2021, we expect revenue to be in the range of $74 million to $76 million, representing growth of 32% to 35% over Q4 2020. We expect adjusted EBITDA to be in the range of $28 million to $30 million, representing approximately a 40% margin.
For the full year 2021, the company has raised its outlook and now expects revenue to be in the range of $225 million to $227 million (previously $205 million to $209 million) representing year-over-year growth of 51% to 53% (previously 38% to 40%) over 2020. It expects Adjusted EBITDA to be in the range of $86 million to $88 million (previously $65 million to $68 million) or 38% to 39% margin (previously 30% to 32%).
For the full year 2022, it expects revenue of at least $281 million and delivers an adjusted EBITDA margin greater than 30%.
Adjusted EBITDA was $24.3 million, or 42% margin, compared to adjusted EBITDA of $13.4 million, or 35% margin, in the same period of 2020. Net cash provided by operating activities was $26.4 million, an increase of 617%, compared to $3.7 million in the same period of 2020. Total cash, cash equivalents, and marketable securities of $136.7 million with no debt, an increase of 12% from the second quarter of 2021.
The company said that its platform processed 23.9 trillion impressions in the third quarter, a 103% increase over a year ago, as publishers continued to expand their inventory on the PubMatic platform. Revenue from fast-growing advertising formats mobile and omnichannel video, which includes CTV, grew 64% year-over-year and represented 65% of total revenue in the third quarter. Revenue from CTV grew by more than seven times over the third quarter of 2020. As of the end of the third quarter of 2021, we programmatically monetized CTV inventory from 154 publishers, up from 114 publishers in the second quarter of 2021.
PubMatic is well diversified across more than 20 verticals and primarily associated with brand advertising spend. The top 10 ad verticals, in aggregate, grew over 70% year over year. Excluding political ads, spending across every vertical was up at least double digits over the third quarter of 2020.
In the third quarter, we entered into a record number of supply path optimization deals with advertisers. Adoption of new products, including Identity Hub and Audience Encore, led to expanded use of our platform. Over two-thirds of our third-quarter revenue had alternative identifiers to the third-party cookie and Apple’s IDFA in place, and global headcount increased by more than 20% in the first nine months of 2021, with the majority of new hires in technology and go-to-market teams.
“We delivered record revenue in the third quarter, well ahead of our expectations. This quarter marks our fourth consecutive quarter of organic revenue growth above 50% and adjusted EBITDA margin over 30%,” said Rajeev Goel, co-founder, and CEO at PubMatic. “We use land and expand approach, coupled with a usage-based revenue model. When we deliver incremental value to our customers, we participate in their upside, which further accelerates our profitable business model and enables us to invest for future growth. This flywheel positions us well for sustained and profitable growth and market share gains.”
“In the third quarter, we delivered exceptional results. Our track record indicates we are driving a distinct and sustainable combination of high revenue growth, GAAP profitability, and cash flow,” said Steve Pantelick, CFO at PubMatic. “Our diversified platform and strong customer alignment, via our usage-based model, drive high revenue retention rates and provides a greater level of visibility into our future revenue. Given this, we are raising our full-year 2021 expectations for the third time this year to reflect over 50% year-over-year revenue growth.”
For the fourth quarter of 2021, we expect revenue to be in the range of $74 million to $76 million, representing growth of 32% to 35% over Q4 2020. We expect adjusted EBITDA to be in the range of $28 million to $30 million, representing approximately a 40% margin.
For the full year 2021, the company has raised its outlook and now expects revenue to be in the range of $225 million to $227 million (previously $205 million to $209 million) representing year-over-year growth of 51% to 53% (previously 38% to 40%) over 2020. It expects Adjusted EBITDA to be in the range of $86 million to $88 million (previously $65 million to $68 million) or 38% to 39% margin (previously 30% to 32%).
For the full year 2022, it expects revenue of at least $281 million and delivers an adjusted EBITDA margin greater than 30%.
