PubMatic at Rosenblatt Summit: AI-Powered Platform Strategy

On Tuesday, 10 June 2025, PubMatic (NASDAQ:PUBM) presented its strategic vision at Rosenblatt’s 5th Annual Technology Summit - The Age of AI 2025. The company emphasized its unified, AI-powered platform as a key differentiator, while addressing market challenges and opportunities, including the impact of Google’s antitrust case. Despite economic uncertainties, PubMatic remains optimistic about growth, projecting a 15% increase in business.

Key Takeaways

• PubMatic’s AI-powered platform aims to unify digital advertising for various segments.
• Ownership of infrastructure provides efficiency and control, setting PubMatic apart.
• Google’s antitrust case could significantly boost PubMatic’s revenue.
• The company projects a 15% growth rate, with significant potential in CTV and data curation.
• Share repurchase authorization increased by $100 million, reflecting financial confidence.

Financial Results

• CTV and mobile apps each represent over 20% of PubMatic’s business.
• Omnichannel video, including CTV, makes up about 40%.
• Desktop display is declining, now under 20%.
• Q1 growth accelerated to 21%, with expectations of 15% growth from Q2 onwards.
• Potential revenue gain of $50-75 million per percentage point of market share gained from Google.

Operational Updates

• Launched AI-enabled Activate product for direct video buying with WPP Media.
• Over 80% penetration into the top 30 global streaming companies.
• Handles more than 800 billion ad impressions daily.

Future Outlook

• SPO strategy expected to become 75% of the business long-term.
• Focus on growth in data, commerce media, CTV, and Activate product.
• Preparing for economic uncertainties with a focus on AI and cost management.
• Targeting market share from the 90% of the market outside the two major SSP players.

Q&A Highlights

• Google’s SSP/exchange market share estimated at 60%.
• PubMatic sees significant upside even before antitrust remedies.
• No new information on Google’s appeal prospects.
• PubMatic aims to consolidate the digital advertising ecosystem.

For more details, please refer to the full conference call transcript below.

Full transcript - Rosenblatt’s 5th Annual Technology Summit - The Age of AI 2025:

Barton Crockett, Analyst, Rosenblatt: Everybody. Thanks for joining us here for, end of day fireside chat. My name is Barton Crockett, and I cover Internet media, with Rosenblatt. And very happy to have Rajeev Gul, co founder and CEO of PubMatic. And is a company that don’t currently cover, but it’s an area that I’m very interested in.

And so I’m really happy that Rajiv is willing to help us kind of explore the company together here a bit. So Rajeev co founded you co founded PubMatic with, I think, your brother in, like, 02/2006.

Rajeev Gul, Co-founder and CEO, PubMatic: That’s

Barton Crockett, Analyst, Rosenblatt: right. Yeah. After spending time in consulting, I think you worked at SAP for a bit. You were also an entrepreneur for a while before that. That’s right.

You took PubMatic public in 2020. So given that you’re a founder and this is a very meaningful company, talk a little bit about here at the start of what inspired you to found PubMatic? And is this company kind of progressing after all these years like you expected? What’s been most surprising, do you think, in this period?

Rajeev Gul, Co-founder and CEO, PubMatic: Yeah. So thanks for having me on, Barton, and great to connect with everybody. So as you mentioned, my original job was as an entrepreneur, started a company in college. And so I think then I’d always have to work for myself after being my own boss from the very beginning. And that business was in commerce.

So selling custom built golf equipment online. It was a Sequoia backed company. But, anyway, so fast forward a couple of years, and my brother and I are experimenting with various online monetization kind of models. And, you know, we kind of discovered that there was a big opportunity around digital advertising and publishing in that all of the systems for advertising would have to be very different in the digital world than in the traditional world. And so, you know, how audiences are targeted, how you decide how much to spend, how publishers, you know, sell their inventory, how they price, how they package, all of this would require a big rewrite of the infrastructure.

And so that’s really what what got us excited. We approached it from the publisher point of view that’s in the name. You know, PubMatic is publisher and automatic. In fact, the time I held I hung up a sign in an office in Downtown Palo Alto, it was like it’s this big Victorian style home. Somebody walked by and said, oh, you’re opening a pub here.

And I said, no. Actually, it’s a software company. A pub may

Barton Crockett, Analyst, Rosenblatt: have been more profitable. Serving the pubmatic shots there. That’d be pretty Yeah.

Rajeev Gul, Co-founder and CEO, PubMatic: Exactly. And so but that’s that’s what really got me excited or got me into the opportunity and and into the business. Mhmm. And, you know, it’s it’s been an exciting business in that I think digital advertising, you know, there’s never a dull moment. Right?

So if we go back twenty years, there was no iPhone. You know, streaming didn’t exist. There was no real time bidding. So, you know, if I think about all of the industry transformations, I’ve been through, you know, desktop to mobile to now, you know, connected TV streaming devices from display. There was no video back then to video, you know, from cookies to not cookies, from not real time to real time.

So it’s a lot of technology, you know, revolutions or changes, and, of course, there’s gonna be more to come. And so over the years, you know, we’ve really broadened our business. Whereas initially, we were focused on publishers, over the past decade, we’ve transformed and diversified our revenue where we now deliver a unified AI powered end to end platform that scales advertising for the open Internet, you know, much more broadly. And so we’ve got four customer segments. We’ve got streamers and publishers where we work with the head of the market, almost 2,000 publishers in aggregate.

80% of the top 30 streaming companies globally on our platform. These are guys like Roku and Amazon, Fire TV apps, DirecTV, Spectrum, Vizio. Media buyers, so all the big holdcos, number of brands, you know, DSPs. is commerce media networks, so companies like Instacart, Kroger, Klarna, Intuit, Western Union. And then lastly, data partners.

So, almost 200 data partners, Nielsen, Experian, Comscore, etcetera, that bring data to our platform. And so we’re really just focused on how do we enable all of these principles in digital advertising to conduct their transactions on our platform.

Barton Crockett, Analyst, Rosenblatt: Yeah. And I think differentiation is one of the questions that comes up a lot. Right? And so I think you would describe a lot of what you just walked through as kind of differentiating. But I was wondering if you could drill down into that a little bit.

So the data companies could partner with any number of SSPs. Why is that differentiating for you? And you are providing kind of a unified kind of platform for accessing different types of media. How is that differentiating from what else is out there in terms of SSP alternatives?

Rajeev Gul, Co-founder and CEO, PubMatic: Sure. Yeah. So when you think about what are the needs of the largest content creators and the needs of the largest advertisers, there’s a couple of things. Right? They want omnichannel platforms.

They want global platforms. Omnichannel in the sense of, you know, consumers consume media across a variety of different devices. Right? They might consume media on mobile app, in a app in a mobile browser, streaming device, in a laptop. So the buyer and seller, they need platforms that can cover all of that ground.

At the same time, those businesses tend to be global. So let’s think about Procter and Gamble as an advertiser, News Corp as a content creator or publisher. You know, they’re doing business in dozens of countries around the world. So it’s not enough to say, oh, hey. I can meet your need in just The US or just Germany.

You’ve gotta be able to do business in, you know, the vast majority of the countries that that those guys do business in. So when you start to filter for who’s omnichannel and who’s global, you actually very quickly get down to just a couple of different companies. And then when you factor in independence and objectivity, which I think is only becoming more and more important. Obviously, we have which I’m sure we’ll get into the antitrust case against Google. You know, a lot of big tech companies, Apple, Meta, Amazon, are involved in variety in different, you know, variety of of antitrust cases.

You know, I think more and more the participants in our ecosystem are saying, hey. We we wanna sleep well at night. We’ll sleep better at night knowing that whoever we partnered with is gonna be around for the long run and is gonna be independent and objective and, you know, looking after my interests. So when you put all of that together, you know, there’s only a couple of different companies, you know, I think that that actually meet those requirements. And then I think there’s some further differentiation beyond that, right, which is we have a single platform to do all of this.

So we can connect all of these different participants across the globe, across all these devices in different ad formats in a single platform. And that’s important because the pace of innovation is higher. The cost to operate is lower. Your ability to tell a cohesive story to the consumer across all of their different touch points of media is enabled versus when you’re when you’re working in in different platforms. And then lastly, you know, we own all of our own infrastructure.

So, obviously, everybody hears about public cloud and, you know, how so much compute is moving to the public cloud. But, actually, you know, if you also look at the stocks of the infrastructure providers, the companies running the data centers, they’re actually doing very well. And part of the reason they’re doing very well is once companies get to a certain scale, and I think particularly in digital advertising, which is real time and very data intensive, so there’s a specific profile of of the transaction that we’re processing. It’s actually far more cost efficient to operate our own infrastructure. So we actually own tens of thousands of servers in data centers around the world.

We own the networking equipment, and then we’re running our software in this private cloud infrastructure. And what we find is that we can generate significantly more free cash flow while also maintaining greater control over each auction or each transaction. And so that drives top line as well as bottom line. And I think you see that in our p and l where, you know, last quarter was our 30 consecutive quarter of profitability at adjusted EBITDA. We do significant share repurchases, and, you know, we have a healthy free cash flow generation.

Barton Crockett, Analyst, Rosenblatt: Yeah. So thanks for that overview. Now one of the questions I think that keeps coming up is that I hear is this idea of DSPs and SSPs, right? So the industry is very kind of bifurcated. There’s DSPs and SSPs, and you guys are classified as an SSP.

But the the question is, why does this need to be? Why do we need to have, you know, someone representing the buyer and the seller? And, you know, could that potentially change, you know, as this becomes much more of a CTV business with maybe fewer kind of publishers on the streaming video side than we have right now on the open Internet websites?

Rajeev Gul, Co-founder and CEO, PubMatic: Yeah. I mean, I think it is absolutely evolving, the the you know, people have said the lines are blurring. I I would agree with that. So historically, in our industry, you know, as you said, Barton, right, there’s SSPs and DSPs. It’s kind of like the real estate transaction mentality, right, which is, you know, if you go to buy or sell a home, there’s a buyer’s agent, and there’s a seller’s agent.

And it’s a it’s a win it’s a win lose game. Right? Meaning, one person’s gain is another person’s loss. Right? Like, the buyer wants to pay less and the seller wants to to get more.

And the price is gonna be whatever it is, and it’s just a matter of shifting the pie between those two parties. And what we have focused on and what we’ve pioneered, we could talk about supply path optimization later, but we pioneered a different approach, which is, hey. Actually, the sell side platform in delivering on its objective to drive more revenue for the publisher, if we can, in fact, deliver more return on ad spend to the advertiser, the advertiser will pay more, the publisher will generate more revenue, and both parties will be happy. Right? And that’s exactly what we’ve proven out.

So we focus a lot on how can we use our position in the ecosystem and our platform to deliver higher ROAS or higher ROI to the buyer? And when we do that, the buyer’s gonna say, hey. Great. This is working. And by the way, my choice isn’t to shrink my budget.

It’s actually I’m gonna take money out of the non digital advertising things that I’m doing. I’m gonna take money out of linear TV, out of radio, out of, you know, billboards, of all of those other things that every major marketer is also doing alongside digital, maybe out of social and search. And I’m gonna put more of that into digital, and I’m gonna put more of it onto the PubMatic platform. And that, you know, higher ROI will cause the buyer to consolidate their digital ad spend, grow that spend, and consolidate it onto our platform. So some of the the drivers here of, I think, why the SSP is the sell side is coming more into prominence.

of all, there’s a rise in the use of party data and insights for audience targeting and curation. And the sell side is actually where a lot more of that is available. Right? Because more and more data requires consent. That’s happening in states around The US.

I think now, like, 20 states have have privacy bills or privacy laws in place, bills or laws. Obviously, all of Europe does. Australia does. And so consent is sitting between the publisher and the consumer, and we’re the the technology system of record there. And so we have greater access to consent and rights to data.

buyers are demanding more efficiency and transparency, and that can happen, I think, more so on the sell side. We see all the bids across the ecosystem, whereas inside of the DSP, they only see a portion of the traffic, and they only see a limited view into the the downstream auctions that are happening. And so that’s a significant advantage that the sell side has. So for example, a buyer on our platform can get full transparency into bids that they lost, what the winning bid amount was so they can train their algorithms better, whereas a traditional DSP only knows that they lost the bid but not, you know, all of the other telemetry around it. And then, you know, finally, I think there’s a significant challenge around traffic shaping in our ecosystem.

So with traffic shaping, we have over 800,000,000,000 ad impressions and growing on a daily basis. The average DSP can take a small fraction of that inventory, So we have to decide which inventory, which impressions to send to the DSP. What that means is that the the buyer inside of the DSP is getting a very fragmented look at the ecosystem, both the users and the impressions that are available to them. So if you move to targeting on the sell side, then the the buyer can see a lot broader set of the the industry in terms of the users and the impressions. And so we published many great case studies around this.

So IPG media brands, they leverage our sell side targeting technology to enhance advertiser ROI. We we closed SPO deals recently with Coca Cola, Halion, Mars. So all great examples of companies that are moving, targeting, to the sell side for all of the reasons that I mentioned.

Barton Crockett, Analyst, Rosenblatt: You know? So maybe maybe we can segue a little bit into, activate and supply SPO. So I think you guys are talking about the growth in this as in a percentage of your mix. I was wondering if you could outline, I think it’s over half and you see it could be much bigger even over time. So what’s happening there?

What are you doing kind of product wise to help support that?

Rajeev Gul, Co-founder and CEO, PubMatic: Yeah, absolutely. So SPO is a big part of our business. It is over half of our business today, you mentioned, and it’s up probably about 20 points in terms of mix from two years ago. And so let me maybe just briefly define what SPO is for all the all the audience members. So supply path optimization is a process through which we go to a buyer, could be an advertiser, could be an agency, and we say, we make the case for why they should consolidate their spend on our platform.

And that case is usually around technology value proposition for efficiency or effectiveness and how we can make the buyer’s ad budget more efficient or how we can help them grow effectiveness, maybe two sides of the same coin. And as a result, they should consolidate spend on our platform. And so we’ve done many of these deals. I just mentioned some of the brands. We’ve done it with every agency, Holdco, independent agencies as well.

And so we view that absolutely as a way to grow the ecosystem and grow our business in terms of the efficiency and effectiveness that advertisers generate on our platform, but also the revenue that publishers can drive because that effectiveness drives a higher CPM and more revenue for that publisher. There were, I think, couple of other aspects of the question that you asked, Barton. Maybe you can remind me.

Barton Crockett, Analyst, Rosenblatt: Yeah, sure. So I would just talk about the growth, then I think you’ve had some product development that’s been helpful. Yeah.

Rajeev Gul, Co-founder and CEO, PubMatic: Absolutely. So we think, as you mentioned, we’ve stated that we think that that can be 75% of the business over the long run. It is a key way for us to consolidate the ecosystem. Our most recent product capability here is something called Activate, which is an extension of our SPO strategy. So we launched Activate about two years ago, and the way to think about Activate is it’s direct buying within the SSP.

So a advertiser or agency can buy, and it’s really focused primarily on video, although there’s value props in in display as well. CTV, online video, they can buy that directly within our SSP. And the benefits that we’re going after are that, you know, a lot of video transactions even today are still insertion order based. And so we wanna bring that spend into the programmatic ecosystem. There’s a lot of benefits in terms of higher ROI when buyers move to programmatic transactions to auction based, you know, using data and and automation.

And so Activate allows them to do that. They can it solves all of the problems we talked about earlier with sell side targeting. So more data, full access to all of the the inventory and the audiences. It’s, of course, more efficient, and there’s two levels of efficiency there. One is operational.

So a lot of the challenges in our ecosystem today stem from when an ad impression is processed by an SSP and a DSP, you know, we have to physically send the ad impression from our data center to the DSP’s data center. That creates latency. It spreads data, which is against privacy regulations. It can be against privacy regulations. It creates discrepancies.

It creates operational overhead. If a deal doesn’t scale, then the buyer or the seller, they’re trying to figure out, well, is the problem in the DSP? Is the problem in the SSP? Which system should I adjust? Okay.

I’ve made an adjustment. Let me monitor it for twenty four hours and then see what happens. So there’s a lot of operational efficiency that when you put all of that into one platform, now you don’t have that request going. You don’t have discrepancies. You don’t have latency.

You don’t have the privacy concerns. The operational ease is much greater because you’re in a single platform, so there’s no confusion over what the issue is. And then, of course, there can be fee efficiency. By not having to process the ad impression multiple times, the cost to process is lower, and so that benefit can be passed on to the end customer. So there’s a lot of different benefits around that.

Now most recently, just a month ago, we announced an AI enabled version of Activate. So we’ve gone in and we’ve AI enabled a lot of the the core use cases, inventory planning and discovery, deal setup, deal optimization, reporting. So these are now, you know, supercharged workflows where they’re a lot more automated, a lot more efficient for the trader. And WPP Media or GroupM Media is our launch partner in that product. So we’re super excited to launch that with them.

Barton Crockett, Analyst, Rosenblatt: Yeah. So it sounds like you believe that in this kind of consolidation of the DSP and SSP functionalities, that that’s something where you could be gaining share. What would you say to the kind of the response from the DSP side that the power ultimately lies with the ad buyer, you know, is their kind of defense in this environment?

Rajeev Gul, Co-founder and CEO, PubMatic: Sure. I mean, I think that’s true. I don’t know that it’s a defense in the sense that, you know, with SPO, right, the majority of spend on our platform, you know, we’re working directly with the ad buyer. So I do think there’s value in being very close to the ad buyer, that’s why we’ve been, you know, vigorously focused on on SPO. I think one of the advantages that we have is, you know, we’ve been building up the publisher relationships and publisher base over almost two decades.

So we have, you know, almost 2,000 publishers. We focus on the head of the market, the most premium publishers. When I look at, you know, others that are approaching it from the buy side and they publicly share these numbers. Right? They might have 20 publishers integrated, 40 publishers, a 100 publishers integrated.

So if you want to take that efficiency value proposition out to your clients, it’s only gonna cover a small portion of the of the traffic. Right? Whereas in our case, we’ve got 95% of the open Internet. So you can buy almost the entire open Internet using Activate and our SSP within our platform. So I think we have a significant advantage in terms of being able to deliver on that value proposition today.

Barton Crockett, Analyst, Rosenblatt: Yeah. Now there’s one other issue that I’d like to talk about, and that is the question of mix and growth. So I think when I talk to investors, there is this kind of knee jerk belief that having more exposure to CTV is good and having more exposure to kind of display is not given what’s happening with LLMs and search. But the reality, I think, your perspective is a little bit subtler and more interesting. So I was wondering if you could talk about your mix and how you would kind of respond to the idea that you automatically just want to have more CTV to get better growth.

Rajeev Gul, Co-founder and CEO, PubMatic: Sure. Yeah. So let’s start with our mix. So our mix, over 20% of our business is CTV. Mhmm.

We have about 20% of our business in mobile app. And then omnichannel video, which is a combination of online video, so that short form video, as well as CTV, which and, of course, short form video can be on a mobile device. It can be on a, you know, laptop, desktop browser, or it can be on a on a CTV device. So omnichannel video combined is about 40% of the business. Where we started, the desktop display business, is less than 2020% of our business today.

So it’s a small and, you know, growing but shrinking as a share of our business. Our strategy in general is to be well positioned in the fastest growing ad formats. And so CTV is certainly one of them. You know, commerce media is not an ad format, but let’s say it’s an ad, you know, ad business and we’re, you know, well positioned there. You know, data and curation is another area that we talked about that we’re, you know, I think well well positioned there.

So we’re positioned in all of these kind of areas. And I think what we’ve seen is that it can be difficult to predict where exactly are advertisers gonna spend their ad budgets. Right? You know, when COVID hit, all of a sudden it went to streaming, you know, almost overnight. Right?

People bought tablets and, you know, individual devices, and, you know, that scaled up very quickly. But then people are starting to come back to the office, and so now we see trends where, you know, browser based monetization on your laptop is, you know, growing, you know, faster than it did a year or two ago because, you know, people are coming back into the office, and so their their behaviors are changing. So I think CTV is absolutely a significant part of our future, a significant part of our business today with, you know, over 80% penetration of the of the top 30 streamers. But I think it is important to be balanced because it’s difficult to predict where exactly is the consumer gonna wanna consume media. I see a lot of omnichannel advertisers where they say, hey.

If I augment my CTV buy with some display ad buying, I get disproportionate return on ad spend with the display. Right? Having that mix puts a bit of a halo effect on my CTV investment, and so omnichannel is the way to go. So I think it’s important to be diversified in all of the the growth formats. And so, certainly, mobile app is a growth format, commerce media is a growth environment, and CTV is growth.

Barton Crockett, Analyst, Rosenblatt: And I also think the decision by Google to stick with cookies maybe lends little bit more life under the display business. And then there’s also this question of the LLMs in search.

Rajeev Gul, Co-founder and CEO, PubMatic: So

Barton Crockett, Analyst, Rosenblatt: I was wondering if you could talk a little bit about that. I think your view is interesting there.

Rajeev Gul, Co-founder and CEO, PubMatic: Yeah, exactly. Yeah, let’s get into the LLMs. So obviously there’s, I guess, a question from investors around, Hey, Is search gonna change, you know, where people no longer get a search result and link out to a to a website? Right? And so how how might that affect our business?

So a couple of thoughts on that. So of all, 40% of our business and growing share is totally unaffected by search, which is CTV and mobile app. Right? These are not search environments, and that mix is only growing. So sooner it’ll be the the majority of our business.

Now if we take the remaining 60%, of all, industry data shows that 15 of a publisher’s traffic is search referral traffic, the rest being, you know, direct navigation or social. It’s not new that a search result doesn’t take you to a publisher’s page. Right? Publishers actually have been complaining about this for almost ten years. If you go, you know, search the Pacers, you know, wolf score or whatever, underscore, like, it’s it’s not gonna take you to ESPN.

It’s gonna give you the result. Right? If you search, you know, the weather in Cannes next week, it’s not gonna take you to weather.com. It’s gonna give you the result right there. So there’s already a lot of searches where you don’t go to to the publisher’s website.

So about 15% of of traffic is search. Now we deal with the biggest brands. That’s our publisher market, and so it’s probably less than 15%. And then we’re talking about impressions. Browser monetization is actually lower than CTV.

Of course, it’s lower than mobile apps. So if we look at it on a revenue basis, it’s lower still. So if you take, you know, 15% of 60 and then decrease that a little bit for the fact that we’re dealing with big publisher brands and browser monetization is a bit lower, you get to the mid single digits. And so if search went away, you know, it would be a mid single digit revenue impact before any mitigation. Now as much inventory as we process, we’ve got more inventory available to us from all of our publishers.

And so we could, you know, fill our our platform with impressions from non search oriented publishers or inventory sources. So that would be one step of mitigation. And then I also think we’re gonna see, you know, the LLM companies, you know, drive and add business. Right? New formats like sponsored answers embedded within chatbot experiences.

We hear from our publishers that they’re getting more and more traffic from the likes of, you know, OpenAI or Perplexity. I think Perplexity is already, you know, publicly talked about an ad business. So I think all of these guys are gonna move towards an ad business. There’s there’s one universal in life in the online world, and that is if it can support an ad, it will. You know, Netflix talked for many years that they never do advertising.

They are. What’s different with Netflix than the LLM guys? The LLM guys burn a lot of money. Right? Netflix generates a lot of free cash flow.

So the LLM guys will have to turn to advertising in order to not dilute their shareholders, and so that’s kind of an inevitable for me.

Barton Crockett, Analyst, Rosenblatt: Okay. Now I want to switch gears a little bit and talk about Google and antitrust. So I know you guys have spoken to kind of an opportunity from ShareShift, which seems to be consistent with what one of the other companies has said. And I was wondering if you could articulate what that number is and how you kind of get to it and what your thinking is in terms of the timing and really just not just the timing, but how confident are you that at the end of the day you can start to see some of the fruits of this decision given that there’s an appeals process going on?

Rajeev Gul, Co-founder and CEO, PubMatic: Sure. Yeah. So we estimate Google is about a 60% share of the SSP slash exchange market, and we’re about a 4% market share player. And, you know, with the guilty verdict, obviously, there’s gonna be a set of remedies that are put into place, behavioral and then structural after probably. We estimate every percent of share that we can pick up is 50 to 75,000,000 of revenue to us.

And the vast majority of that, meaning 80 to 90% of that, should drop to the bottom line. The reason being that we have a heavy degree of publisher overlap with Google. So we have, you know, 95% of the open Internet, basically the same publisher basis as Google. So we’re already processing that those publishers inventory on our platform. And so we see that, you know, it’s not gonna be a lot of cost to process that inventory.

So high high flow through to to the bottom line. So I think the key question, Bart, as you mentioned is, like, what’s the timing and certainty around it? It’s not certain. Right? So let me be the the to say that.

Right? There’s the remedy phase of the trial is gonna start in the fall. Google has appealed the underlying verdict. You know, I suspect that the remedies will move forward in 2026 at some point, at least the behavioral remedies. And those are probably consist of some set of, you know, court mandated changes to how Google operates that should, you know, level the playing field or or open up the playing field.

So one way to think about that is, you know, we’re 4% in the remaining 40 that Google doesn’t have. Right? So if we consider that the kind of the level playing field part of the ecosystem, we’re a 10% market share player in the in the level playing field. So could we go to 10% across the entire ecosystem from our 4% position? You know, maybe that’s a natural place for us to get to.

But I think, you know, whether we get to six, seven, eight, or 10, it’s significant upside ahead of us that could start as soon as next year, but I think it’s not it’s not certainly not clear that that timing is is what’s gonna stick. I do think regardless of the timing of the remedies, Barton, we do see that the publishers and advertisers and commerce media networks and data owners, they are increasingly looking to independent solution providers like PubMatic. Right? So I think they all see when I talk to them, one of the things they voice is, hey. If Google may be forced to divest of these assets in the future, is Google committed to investing in innovation?

Right? Like, what’s their incentive to keep building these products and investing in these products? So that then creates a question of, well, what’s my dependency? Is that dependency too high? And should I start to take steps now to reduce that dependency?

And so I think we can start to see benefits, you know, even, even, before remedies, start to take effect.

Barton Crockett, Analyst, Rosenblatt: Yeah. It sounds like you have you believe, I think, that you guys can that Google will not prevail and appeal. That seems to be you know, who knows? But that would seem to be where your belief is at this point pretty strongly.

Rajeev Gul, Co-founder and CEO, PubMatic: Yeah. I mean, I guess it would take new information or finding that the judge made a significant error. And, you know, just in my own conversations and talking to a variety of industry and legal experts, I haven’t seen or heard that either of those two things is the case. So obviously, it remains to be seen. Google thinks there’s reasons to appeal.

I don’t know if that’s purely a timing issue or they think that there’s real grounds for the appeal, but that’ll play out. But I haven’t heard of, hey, either there’s new information or that the judge made a significant error in their finding.

Barton Crockett, Analyst, Rosenblatt: Yeah. So we spoke about a share shift on an operating basis. There is this question of the other kind of bite at the apple. Right? So there is, you know, potential civil liability.

There’s one company that’s been suing Gannett in the publishing space. I think some question about whether SSPs, which are alive to publishers, have been damaged, you know, whether there might be some litigation, you know, that could be at least considered. And, you know, I don’t know if that’s something that you can talk about, but I wanted to see if we could raise it with you.

Rajeev Gul, Co-founder and CEO, PubMatic: Sure. Yeah. I don’t have anything specific to share on it. I think it’s logical to conclude that SSPs, including PubMatic, have been damaged, and I think the prosecution made that case. Right?

They showed multiple examples of Google’s own data, right, where due to changes that Google made, you know, how individual SSPs were affected. So I don’t have anything to share specifically on that front, but I think it’s an open question.

Barton Crockett, Analyst, Rosenblatt: Okay. All right. Well, we’ll leave that one there. So I wanted to talk a little bit about some of the relationships that you have. I think that you guys, we hear a lot from one of the other kind of public players in the SSP space about their relationships with people like Amazon, with people like Netflix, with people like Disney.

How would you kind of stack up your relationships in the CTV world with what’s available out there? And how do you think that evolves over time?

Rajeev Gul, Co-founder and CEO, PubMatic: Yeah. The Amazon Fire TV app one in particular is interesting. We’ve been actually monetizing the Amazon Fire TV apps for over a year. So maybe that other SSP you’re referring to is just catching up. But, you know, we are over 80% penetrated into the top 30 streaming companies globally.

So that’s Roku, Amazon Fire TV apps, DirecTV, Spectrum, Vizio, Jio Hotstar in India, you know, so on and so If we back up, you know, five years, we launched our CTV business about four years ago. I think one of the the maybe the the public SSP that you’re referring to, you know, they acquired, you know, Telaria and then and then SpotX. So at the point at which they acquired SpotX, you know, they had infinitely more CTV publishers than we did. Now I think there’s two CTV publishers of scale that they have that we don’t have. So in the last four years, we’ve closed the gap from Infinite to two, and, you know, I think both of those are opportunities for us in the future.

So I don’t think there’s any any inventory advantage of significance or scale that our competitor has. In fact, I think the opportunity that we have is because we operate a single platform, and we talked about this already a little bit earlier, because we operate a single integrated platform, all formats, all devices, publishers and buyers can do things on our platform that they can’t do when it’s multiple platforms. So if you wanna be able to make sure that you don’t break a frequency cap and you send the right number of ads to a consumer in a twenty four hour period across different devices, across different formats, then we’re in a position to be able to do that for you. If you want innovation where you have a new data parameter you can target or a new data partner and you want that as fast as possible, then we can do that in a single platform versus, you know, the buyer or the seller having to wait to have that integrated into multiple platforms. That, I think, in turn has led us to have what we believe is the industry’s leading curation platform and a significant advantage in commerce media.

And all of these things are related to CTV, right, because they don’t list they don’t exist in static. So we have, for instance, data partners like Experian that can overlay data on top of streaming inventory and create, you know, unique advertising value propositions. So Instacart data is available on the platform. Experian data is available on the platform. It’s not available on other SSPs.

So we can combine that with streaming inventory and create a value proposition for a particular advertiser or agency to be able to lay that data on top of the media and be able to, you know, facilitate transactions that can’t happen anywhere else. So I think the power is really in a broad spectrum platform that brings together the inventory, the data, the commerce media networks, and enables them to transact and grow their businesses, and we, in turn, grow our business. Okay.

Barton Crockett, Analyst, Rosenblatt: Now I want to spend the last few minutes here just bringing us things down to kind of a little bit more kind of just what’s happening right now with the business. So obviously, we’re in kind of a crazy period of macro uncertainty, things that none of us has really seen before in our lifetime. And but it does seem like the the ad market’s been stable than one might have thought at one point. I was wondering if you could talk to that and tell us what you’re seeing.

Rajeev Gul, Co-founder and CEO, PubMatic: Sure. Yeah. Absolutely. I think there was a great deal of uncertainty earlier this year, and I should just maybe caveat that my comments are as of our last earnings call just in terms of the the kind of the timing. Yeah.

So I think in early April, there was a huge increase up in terms of the level of uncertainty, right, with the Liberation Day tariff announcements. But I think since then, you know, in April, in the May, we’ve seen the market be quite resilient, and so we shared on our earnings call that, you know, we had a very strong March. The macro seemed strong to us, and those trends continued through the first half of Q2. I think that’s because we saw that companies adjusted pretty quickly to the tariff environment. Some of the tariff antagonism ratcheted down.

Right? So a couple of deals were announced. The tariffs on China were lowered. There’s negotiations happening. I think all that being said, we’re still in an environment of uncertainty.

Right? So there’s you know, these conversations happening between The US and China and London, and I think investors are kind of hanging on, you know, what what is the output? What’s the outcome of those conversations? So it’s very possible that we wake up next week and, you know, we’re back into a negative scenario or scenario of greater uncertainty. It’s very possible that a lot of that uncertainty gets lifted, there’s a big breakthrough in something very positive.

So from our perspective, you know, we are planning for the worst but hoping for the best. Right? And so what that means is that we make sure that, we’re delivering on our AI road map. Yeah. I think AI is a significant disruptor in terms of being able to deliver both better outcomes.

So it’s a top line growth driver as well as better efficiency, and there’s not a lot of technology transformations that come along, that can do, you know, both of those things at the same time. We’re also focused on, you know, bringing bringing a high degree of focus on every line item of cost in our business. So making sure that, you know, every vendor, every employee, every partner, you know, every cost every line item cost, you know, is is, maximum productivity. And then we operate the business in the way that we’ve always operated, which is that in times of uncertainty, in times of change, the growth opportunities are gonna shift. And so we wanna invest behind the things that are gonna be the new growth opportunities.

Right? And so it’s data, it’s commerce, it’s CTV, and it’s our Activate product, our buy side solution. And so it’s making sure that we’re putting, you know, funneling more and more of our investment into those areas. And I think if we do all of those things, regardless of the economic outcome, we’re gonna deliver a combination of growth and profitability. And depending on exactly what we’re seeing, it could be higher profitability, lower growth, or or the opposite, but I think our investors will be well rewarded.

Barton Crockett, Analyst, Rosenblatt: Okay. All right. Just one kind of milestone you guys have coming up here. You’ve had a major DSP partner that you’ll be lapping a transition here. You’ve just lapped it, I think, in May.

So I think you’re looking at a third quarter that, you know, could be a normalized growth, clearer growth than we’ve seen for a few quarters. And I think you’re looking for, you know, in your guidance, you’re looking for a pretty good growth rate.

Rajeev Gul, Co-founder and CEO, PubMatic: Yeah. And so you just want me to comment on that?

Barton Crockett, Analyst, Rosenblatt: Just comment on that level set so we all understand.

Rajeev Gul, Co-founder and CEO, PubMatic: Yeah, absolutely. As you mentioned, a large DSP made an ecosystem wide change, which impacted us pretty significantly in May of last year, where they moved from and price auctions to price auctions. We’re just now lapping that change, which is great. So that’s now in the rearview mirror. As a result of that, we broke out, you know, how is our underlying business doing?

And underlying is our business without that DSP, as well as without the the tailwind of political ad spend, which is pretty significant last year. So we’ve been sharing that metric every quarter. Q three, that growth rate underlying business was 17%. Q four of last year was 16%. It accelerated to 21% in q one, and we set the expectation that it would be 15% plus on that basis, you know, for q two and and onwards.

So we, you know, we feel like we’re in a good position to be able to deliver that. The overall business will normalize, you know, with that DSP for the month of June and then for a full quarter, you know, in in q three. So I think investors will start to see that underlying business growth rate normalize to be the full business growth rate, and hopefully that’ll be an unlock in terms of investor sentiment and multiple and those types of things. But, you know, we’re we feel well we feel good about how well we’re positioned, and, you know, clearly, you can see that in the underlying growth. And so just to that point, we increased our share repurchase in the last earnings call.

We had I think we had about 40,000,000 left of 175,000,000 authorization. We increased that by an incremental 100,000,000, so now there’s about 140 ish million, and we’ve been hard at work with that repurchase.

Barton Crockett, Analyst, Rosenblatt: Okay. All right. That’s great. So I think that’s basically it. We’re just out at the end of the time here.

Is there anything else you wanted to leave for last word to think about or

Rajeev Gul, Co-founder and CEO, PubMatic: Yeah. The last thing I’d just comment on is I think there’s a great opportunity in our industry. There’s two public SSP companies, and there’s been a lot of, I think, questions, and rightfully so, from investors about how we differentiate against the other one. But in reality, there’s 90 points of the market outside of the two of us. Right?

And so there’s Google. There’s a long tail of of SSPs, you know, point solutions that are single format only or, you know, maybe one or two countries only. And so our focus is really on that 90 points of market share and how to grow our business and take share from that that 90 points. And I think in that regard, there’s a lot of upside. So, you know, I don’t think the industry is gonna consolidate down to a single SSP.

I I think I made the comment earlier in a in a smaller conversation, Bart, that would be like having one SSP would be like having one toothpaste factory for all of America. It could happen, but it’s probably not a good idea. I think most buyers, you know, they consolidate down to a couple. So I think there’s gonna be a couple of winners long term in our industry, and I think we’re really well positioned to to be one of those winners.

Barton Crockett, Analyst, Rosenblatt: Okay. That’s great. Thank you. Thanks a ton, Rajeev. We really appreciate

Rajeev Gul, Co-founder and CEO, PubMatic: it. Thank you. Okay.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.