In Its First Quarter Since Going Public, PubMatic Grew Revenue 64% To $56.2 Million

PubMatic earningsPubMatic, in its first earnings call since going public, reported Q4 revenue of $56.2 million, a 64% increase from the year before. The company was also profitable, with a 72% gross margin.

The exchange’s stock rose 10% in after-hours trading.

Despite the pandemic, PubMatic grew revenue 31% for the full year, totaling $148.7 million. That revenue doesn’t reflect media spend, but rather the fees that PubMatic collects for all the advertising dollars flowing through its exchange.

“The COVID impact has made the internet advertising opportunity significantly bigger than we anticipated pre-COVID,” said CEO Rajeev Goel. “People were spending their time on the internet and doing things like car shopping and fitness classes online. We executed against that opportunity to grow our revenue and market share.”

One factor behind PubMatic’s growth has been its deepening relationship with the buy side. PubMatic has made supply path optimization (SPO) deals with marketers, such as P&G and Bayer. Those deals now account for 25% of PubMatic’s revenue, up from 10% the year before.

“When you have an unwieldy supply chain, and too many partners you’re spending on, it’s very hard to innovate,” Goel said.

PubMatic is striking more of these deals as buyers seek transparency into their supply chain. Buyers also want to make their marketing more efficient during the pandemic and consolidate with scaled players, Goel said. PubMatic has increased its agency sales force in order to have more conversations with marketers and agencies.

PubMatic has also been able to strike SPO deals in part because it owns and optimizes its proprietary infrastructure, which makes its exchange more cost effective than others. The supply-side platform processed 15.8 trillion impressions in Q4.

And what about, CTV which has been all the rage for ad tech?

PubMatic’s approach is to focus on the broader digital video opportunity and gain adoption with publishers for its programmatic header bidding product. Sixty publishers now use the product. Overall, CTV, OTT and short-form video grew more than 100% year over year.

PubMatic also added 368 publishers in 2020, for a total of 1,208 publishers, including larger publishers that may own dozens or hundreds of sites.

But how will the loss of identifiers affect PubMatic?

The exchange expects that it will “not [be] overly exposed,” Goel said, because it’s an omnichannel exchange that handles multiple media types for multiple devices, with both brand and performance advertising dollars running through its platform.

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