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Investing.com -- PubMatic Inc. (NASDAQ:PUBM) reported third-quarter adjusted earnings that significantly exceeded analyst expectations, sending shares soaring 12.3% in after-hours trading on Monday.
The independent digital advertising technology company posted adjusted earnings of $0.03 per share for the quarter ending September 30, 2025, beating analyst estimates by a substantial $0.25, as analysts had expected a loss of -$0.22 per share. Revenue came in at $68 million, surpassing the consensus estimate of $63.97 million, despite being down 5.3% from $71.8 million in the same period last year. The company noted that Q3 2024 included $5 million in political advertising revenue.
PubMatic’s connected TV (CTV) business continued to show impressive growth, increasing over 50% YoY excluding political advertising. Omnichannel video revenue, which includes CTV, grew 21% YoY when excluding political advertising. The stock jumped 11.1% after hours following the results announcement.
"We delivered revenue and adjusted EBITDA ahead of guidance and strong cash flow. CTV growth over 50% year-over-year excluding political advertising once again significantly outpaced the market rate of growth," said Rajeev Goel, co-founder and CEO at PubMatic.
For the fourth quarter of 2025, PubMatic provided revenue guidance of $73-77 million, in line with the consensus estimate of $74.97 million. The company expects adjusted EBITDA between $19-21 million, representing approximately a 27% margin at the midpoint.
The company’s AI initiatives appear to be paying dividends, with PubMatic reporting that its new AI yield optimization solution for publishers has unlocked "tens of millions of dollars in incremental revenue" while creating a new revenue stream for the company. PubMatic also highlighted its multi-year technical collaboration with NVIDIA, which has reportedly delivered significant performance improvements.
Net cash provided by operating activities was $32.4 million, an increase from $19.1 million in the same period of 2024. The company maintains a strong balance sheet with $136.5 million in cash and no debt.
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