Home Investment SSP PubMatic Files For $75 Million IPO

SSP PubMatic Files For $75 Million IPO


This SSP is going IPO.

PubMatic is gearing up for a proposed $75 million initial public offering after filing an S-1 with the Securities and Exchange Commission on Friday.

The company, founded in 2006, is one of the ad tech old guard and planning to list its Class A common stock on the Nasdaq Global Market under the ticker symbol PUBM. Pricing terms, including the number of shares to be offered, have yet to be determined.

Jefferies and RBC Capital Markets will act as joint book-running managers, while JMP Securities, KeyBanc Capital Markets, Oppenheimer & Co. Inc. and Raymond James & Associates Inc. will act as co-managers.

Why now?

The move could be part of a bid to stay competitive. In the S-1, PubMatic outlines a growth strategy that includes attracting new publishers and expanding its relationships with existing partners, attracting new buyers and growing relationships with existing buyers, expanding its infrastructure platform to process more ad impressions, developing new products and ad formats and pushing into new geographies.

PubMatic isn’t the only ad tech company to enter the public market in recent years as investors reawaken to the category. The Trade Desk is a poster child for success after issuing an $86.3 million IPO in 2016, and LiveRamp, Magnite and Criteo are also doing well. Ad verification company DoubleVerify clinched a $350 million investment deal last month ahead of a reported initial public offering next year.

The financials

PubMatic reported $127 million in revenue for the 12-month period ending in Q3 2020 – a 33% YOY increase – and $12 million in net income. The company’s revenue was $99.3 million in revenue in 2018 and $113.9 million in 2019, representing a 15% growth rate. Revenue for the first three quarters of 2020 was $92.5 million, a 16% growth rate.

The company generated net income of $4.4 million in 2018, $6.6 million in 2019 and $7.8 million during the first nine months of this year.



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In its S-1 PubMatic said that its business depends on its ability “to maintain and expand access to valuable ad impressions from publishers, including our largest publishers.”In September 2020 alone, the platform processed approximately 134 billion ad impressions daily.

“By harnessing our massive data assets and advanced machine learning capabilities, we are able to deliver superior outcomes by increasing advertiser ROI and publisher revenue, while increasing the cost efficiency of our platform and our customers’ and partners’ businesses,” the company said.

In Q3 of this year, PubMatic said it served about 1,100 publishers and app developers, including multiple leading digital companies, such as Verizon Media Group and News Corp. The company also boasted a retention rate of 110% for the 12 months ending Sept. 30.

Opportunities for growth include the shift to connected TV, particularly in light of the pandemic, which PubMatic said “has further accelerated digital adoption habits” and “should lead to further rapid growth in the number of available ad impressions that can be monetized programmatically, as well as increased advertiser budgets seeking to reach these audiences online.”

The cookie problem

According to PubMatic, efforts by Apple and Google to significantly limit the use of third-party cookies – and Apple’s recent decision to make the app-based IDFA opt-in – are both a challenge and an opportunity.

“We believe the ‘open internet’ outside the walled gardens … will shift from targeting by anonymized and invisible third-party cookies or identifiers to known identities based on consumer choice and opt-in,” the company said. “This shift toward significantly more reliable and accurate consumer identity has the potential to significantly increase advertiser ROI and therefore publisher revenue.”

Still, the company cited a number of risks in its filing.

For example, if the use of third-party cookies, mobile device IDs or other tracking technologies is restricted without similar or better alternatives, “our platform’s effectiveness could be diminished and our business, results of operations and financial condition could be adversely affected.”

Additionally, the economic uncertainty surrounding the COVID-19 pandemic could adversely impact its business. Welcome to the club.

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