PubMatic, Inc. — Call Transcript 2025

Hello everyone and welcome. We will begin momentarily. Hello everyone and welcome. We will begin momentarily. Hello everyone and welcome. We will begin momentarily. Hello everyone and welcome to PubMatic's third quarter 2025 earnings call. My name is Emmanuel and I will be your Zoom operator today. Thank you for your attendance today. As a reminder, this webinar is being recorded. I will now turn the call over to Stacie Clements with The Blueshirt Group. Good afternoon everyone and welcome to PubMatic's earnings call for the third quarter of 2025. This is Stacie Clements with The Blueshirt Group and I'll be your operator today. Joining me on the call are Rajeev Goel, co-founder and CEO, and Steve Pantelick, CFO. Before we get started, I have a few housekeeping items. Today's prepared remarks have been recorded, after which Rajeev and Steve will host live Q&A. If you plan to ask a question, please ensure you set your Zoom name to display your full name and firm and use the raise hand function located at the bottom of your screen. A copy of our press release can be found on the website at investors.pubmatic.com. I would like to remind participants that during this call, management will make forward-looking statements, including without limitations, statements regarding our future performance, market opportunity, growth strategy, and financial outlook. Forward-looking statements are based on our current expectations and assumptions regarding our business, the economy, and future conditions. These forward-looking statements are subject to inherent risks, uncertainties, and changes in circumstances that are difficult to predict. You can find more information about these risks, uncertainties, and other factors in our reports filed from time to time with the Securities and Exchange Commission and are available at investors.pubmatic.com, including our most recent Form 10-K and any subsequent filings on Form 10-Q or 8-K. Our actual results may differ materially from those contemplated by the forward-looking statements. We caution you therefore against relying on any of these forward-looking statements. All information discussed today is as of November 10th, 2025, and we do not intend and undertake no obligation to update any forward-looking statement, whether as a result of new information, future developments, or otherwise, except as may be required by law. In addition, today's discussion will include references to certain non-GAAP financial measures, including adjusted EBITDA, non-GAAP net income, cash flow from operations, and free cash flow. These non-GAAP measures are presented for supplemental informational purposes only and should not be considered a substitute for financial information presented in accordance with GAAP. A reconciliation of these measures to the most directly comparable GAAP measures is available in our press release. I will now turn the call over to Rajeev. Thank you, Stacie, and welcome everyone. We delivered a stronger-than-expected quarter with revenue and adjusted EBITDA ahead of guidance, as well as strong cash flow, demonstrating the power of our platform, the continued diversification of our business, and our accelerated pace of innovation. CTV significantly outpaced the market rate of growth and grew over 50% year over year, excluding political, driven by increased premium supply, continued scaling of agency marketplaces, traction in our live sports marketplace, and growth of small and mid-market advertisers. Emerging revenues grew over 80% year over year as sell-side targeting and newly launched AI solutions quickly ramped. We also strengthened our end-to-end platform with cutting-edge AI innovations that are deepening our competitive moat and unlocking measurable incremental revenue opportunities. The industry is rapidly redefining itself, and we are actively shaping its future. The impending Google AdTech Remedies verdict will very likely shift market share. The prioritization of data targeting and performance is shifting value creation in the ecosystem to the sell side. Over the past few months, we've seen a groundswell of AI-driven innovation reshaping the entire ecosystem. AI is now at the center of every strategic conversation, whether the objective is advertising performance, transparency, or automation. As an early adopter of AI, our leadership is a defining advantage for us, which will grow over time. We continue to innovate with an AI strategy centered around three distinct layers of programmatic advertising: the infrastructure layer, the application layer, and the transaction layer. For the infrastructure layer, we own and operate our full technology stack, giving us the efficiencies, control, and independence that many of our peers don't have, evidenced by multiple recent public cloud outages. Through our technical collaboration with NVIDIA, we are deploying next-generation AI models on the world's most advanced GPU architecture. Five years in the making, this collaboration required three ingredients: physical infrastructure capable of deploying GPUs at scale, massive transaction volume to test and optimize across the full open internet, and technical sophistication to be an early adopter. Today, our infrastructure is a clear differentiator, and we believe years ahead of peers. The business impacts are tangible. 5x faster bid responses and 85% fewer auction timeouts, all recovering millions in ad spend. These results close the infrastructure advantage of walled gardens and directly translate into advertiser performance with higher publisher yield. Looking ahead, as autonomous AI agents begin planning and negotiating ad campaigns, industry compute requirements are expected to grow dramatically. These early investments only widen our infrastructure advantage as legacy platforms are constrained by cloud and computing limits. This is the monumental shift for open internet digital advertising that PubMatic has been building for. Next, at the application layer, we're deploying some of the most exciting and innovative capabilities we've ever launched, embedding AI directly into our products to power intelligent workflows and decision automation. We launched AI-powered buyer and publisher platforms that now handle more complexity with significantly less manual effort. Our solutions cut campaign setup time by 87% and speed up issue resolution by 70%, translating directly into faster activations, higher productivity, and better outcomes for our customers. Independent agency Butler/Till has been using our AI-powered PubMatic for Buyers platform. Scott Ensign, their Chief Strategy Officer, said, and I quote, "Historically, systems don't talk to each other. Data sets are disparate. Walled garden data is hard to connect. AI allows us to scale human reasoning and run campaigns that truly look across all channels and optimize across them. Working with PubMatic for Buyers helps make that possible." This same enthusiasm is building on the publisher side. Our newly launched publisher suite already includes 17 operational AI agents guiding yield, diagnostics, and creative setup. Customer feedback has been exceptional. One of our largest omnichannel partners, Overwolf, told us that the PubMatic Assistant AI chatbot is unique with respect to the accuracy and speed of execution. Finally, at the transaction layer, we're preparing for the next major step, Agentic AI, where advertisers and publishers' AI agents will be able to transact directly through our infrastructure. We are a co-founder of the newly established Ad Context Protocol, or AdCP, alongside partners like Yahoo, LG Ad Solutions, and Raptive, and the first to publish a model context protocol specification for agent-to-agent communication in the programmatic industry. We are establishing the protocols, safety mechanisms, and the interoperability standards that will enable AI agents across the entire ecosystem to transact efficiently and securely. With this three-layer strategy, infrastructure, application, and transaction, we are building the complete system for Agentic AI. The high-performance car, the roads to drive on, and the traffic laws to govern it all. While still in early days, we are already seeing material benefits. First, AI is driving increased platform usage. As we roll out new generative AI and Agentic AI features across our platform, our customers are able to launch campaigns and resolve issues faster and improve performance. Validating our leadership in AI, customers have repeatedly said they are not seeing this level of innovation from other companies in the industry. Second, AI solutions are generating new revenue streams. One example is our new AI-based yield optimization solution for publishers, which uses adaptive learning models to automate pricing and improve auction efficiency. This AI solution is driving growth for our publishers, increasing their revenue on average by 10%. Launched just a few months ago, it has already unlocked tens of millions of dollars in incremental revenue for our publishers and, in turn, is generating new PubMatic revenue as part of our emerging revenue category. Third, AI is improving our operational efficiency and profitability. In the last two months, we deployed a dozen AI agents internally to automate operational workflows, accelerate development, and reduce overhead. Our goal is to deploy substantially more agents in the coming quarters to give us measurable margin leverage while we continue to invest and strengthen our long-term moat. Looking ahead, despite the significant progress we have made, we believe we're just scratching the surface. AI will continue to drive higher usage across our platform, generate incremental revenue streams, and improve operational leverage. Because we're investing across all three layers, PubMatic is poised to lead the next era of Agentic AI advertising. While AI is a powerful driver of our long-term growth strategy, it's equally important that we execute across the four other strategic priorities I outlined last quarter. I'm pleased to report that we're making significant progress in each of those areas. First, we're broadening our demand-side ecosystem and accelerating our pipeline. We expanded a top-three DSP partnership, introducing programmatic guarantee deals that streamline execution for advertisers across premium streaming content. This integration reduces friction in deal setup, accelerates time to market for campaigns, and unlocks incremental budgets. It's a great example of how our relationships with global DSP partners are becoming more strategic as we diversify beyond the legacy DSPs. We also launched a new partnership with Blis, an omnichannel DSP that brings high-value demand from leading global brands across automotive, retail, and financial services. Blis combines T-Mobile's app engagement data with real-world movement patterns and transaction signals to drive performance-focused campaigns with measurable outcomes, from brand awareness to store visits and sales. This partnership expands our reach into premium brand advertisers who prioritize full funnel measurement and offline attribution. These mid-market-focused DSPs, like Blis, represent one of the fastest-growing advertising segments. In Q3, ad spend from this segment grew 25%+ year over year, reflecting meaningful progress in our diversification strategy. Second, we're accelerating our investment on the buy side. We're extending our reach with independent agencies and direct advertisers, expanding our focus from the top 20 agencies to the top 150, and from the top 500 advertisers to approximately 1,500. Supply path optimization remains a key growth driver, with the majority of this addressable market as greenfield opportunity. SPO represented over 55% of activity on our platform in Q3. As a pioneer in SPO, we are the leading incumbent, offering scale and a rich history of performance and efficiency gains. Building on this momentum, we are onboarding more buyers onto Activate, our direct-to-supply buying platform. Over the first nine months of the year, the number of active campaigns grew more than 4x over last year, with a 35% increase in customers. Activate is a key solution that enables the ecosystem-wide push for increased performance, transparency, and efficiency of programmatic advertising. This is only the beginning. We have begun integrating AI-powered agent-to-agent workflows into Activate to boost performance and reduce friction, making advertiser adoption even easier. We believe that this new technology could have a massive impact on Activate adoption over the medium term as we accelerate investment in mid-tail buyers. Finally, we continue to deepen our integration with DSPs to create value beyond real-time bidding transactions. We are the first SSP to integrate The Trade Desk's price discovery and provisioning API, which allows publishers and advertisers to share deal metadata between our platforms to better identify and resolve issues with underperforming deals in real time. Today, over 50% of programmatic deals sit dormant because this information was previously only available offline. We anticipate this innovation will accelerate our share of PMP and PG deals as we drive adoption together with The Trade Desk. Third, our momentum in Activate is also fueling our growth in CTV. Excluding political advertising, CTV revenue grew more than 50% year over year, and the format remains a primary growth engine for our business. Live Sports is an especially exciting category. Buying activity rose more than 150% sequentially from Q2 to Q3 as we scaled our AI-powered live sports marketplace and launched new programmatic guarantee deals around tentpole events like the US Open for tennis and Monday Night Football. We also continue to expand our CTV publisher footprint. New deals and expanded partnerships with a number of free ad-supported streaming services, including Tubi, Future Today, and Local Now, added to a strong roster with over 90% of the top 30 global streamers now on PubMatic. We offer these premium content streamers incremental ad demand that other platforms can't offer because of the scale of our SPO, Activate, curation, and commerce businesses. For example, Fremantle, one of the world's largest entertainment content creators behind franchises like American Idol, America's Got Talent, and The X Factor, generated a 78% increase in incremental programmatic demand across their expanding fast channel portfolio by partnering with PubMatic. This is a remarkable outcome and highlights significant incremental ad revenue our platform generates for our partners. Additionally, we're expanding ad formats on our platform. In collaboration with Dentsu, we recently launched pause ads for CTV through Activate. Advertisers can now serve dynamic, contextually relevant ads when viewers pause content, representing a premium, brand-safe moment that boosts engagement and yields incremental revenue for publishers. What's more, with $155 billion of ad dollars still in linear television, we believe our CTV business has a long runway for growth given the scale, performance, and ad formats now available for buyers on PubMatic. Fourth, we're making significant progress in scaling our emerging revenue streams, which grew over 80% year over year in the third quarter. Commerce media continues to gain momentum. We continue onboarding and scaling with some of the world's leading retailers and transaction-based enterprises as they seek to activate and monetize their first-party audience intelligence. These partnerships are expanding our reach beyond the traditional impression model while generating platform fees and database monetization that accelerate revenue growth. Sell-side curation is another fast-growing emerging revenue stream. We expanded partnerships with leading data providers around the world. Nielsen, for example, tapped PubMatic as their exclusive sell-side partner to bring their more than 10,000 audience segments to Australian advertisers and agencies. Together with the previously mentioned AI yield solution for publishers, these initiatives drive incremental, high-margin revenue that is scaling quickly. In closing, our results demonstrate the power of our differentiated business model. We continue to innovate, diversify our business, and operate with discipline. We are leading from a position of strength. We're confident that the investments we're making today, particularly across the three layers of our AI strategy, are expanding our competitive advantage while creating sustainable, profitable growth over the mid to long term. All of this is happening alongside a once-in-a-generation shift in digital advertising that will likely result in the competitive landscape being reshaped, where even a modest share shift could unlock substantial, incremental, high-margin revenue for us, given our owned and operated infrastructure. PubMatic is not only positioned to adapt; we're helping define what comes next. We have the technology, the talent, and the financial foundation to build a more intelligent, efficient, and enduring business, one that creates lasting value for our customers, partners, and shareholders. Let me now turn the call over to Steve. Thank you, Rajeev, and welcome, everyone. We exceeded expectations on both revenue and adjusted EBITDA. This outperformance was driven by CTV, combined with stronger-than-expected year-over-year growth for online video and mobile app. We managed expenses, leveraged AI, and delivered improved margins and strong free cash flow. Stepping back, it is important to call out that our efforts to transform our business started several years ago as we anticipated the value of the ecosystem shifting to the sell side. We built an end-to-end solution that prioritizes control, performance, and transparency while recognizing the need to diversify our business and unlock new paths to monetization. Today, over 40% of our revenue is derived from CTV, mobile app, and emerging revenue streams, which represent long-term value for our business, up from less than 30% two years ago. Further, these efforts directly benefit our profitability and enable continued innovation and investment in the business. Turning to the quarterly results, starting with the revenue breakdown. To provide apples-for-apples comparability, year-over-year growth rates for video are adjusted to exclude political ad spend. On that basis, total omnichannel video revenues grew 21%, underscoring the strength of our premium video portfolio and growing adoption of AI-powered optimization across formats. Within this category, CTV once again grew over 50% year-over-year, driven by the success of our Live Sports marketplace and growth in programmatic guarantee deals across expanding buyer relationships. We monetized CTV inventory from over 90% of the top 30 global streamers. Omnichannel video contributed approximately 38% of total revenue in Q3 2025. Emerging revenue streams continued their high-growth trajectory, growing over 80% year-over-year while scaling to 10% of total revenue in the third quarter. This growth represents incremental, durable revenue streams beyond our core sell-side platform capabilities. Most notably, year-over-year revenue from Activate grew over 100%, and our curation and data business Connect grew over 40%. Based on the results we are seeing, we will continue to invest for incremental growth opportunities that diversify our revenue, like the new AI-driven product capabilities for publishers that are already showing meaningful traction. The growth across these key secular areas helped offset the impact from lower spend by a large DSP we identified last quarter. Following our optimizations and integration adjustments by SPO partners, spend stabilized from this DSP in August and September, resulting in lower but steady run rate. As anticipated, display revenue was down -5% year-over-year and was the format most affected by the DSP impact. Excluding this DSP, display grew in the low single-digit percentages. With respect to Q3 ad spend across the top 10 verticals, in aggregate, they grew in the single-digit percentages year-over-year. Health and fitness, personal finance, and technology each increased over 15%. We saw softer trends in business and in automotive, which declined single-digit percentages in the quarter. Ad spend from our mid-tier DSP partners grew over 25% year-over-year in Q3. Importantly, our AI-driven buyer platform is resonating well with performance-focused buyers across CTV, mobile app, and e-commerce verticals, and we believe lays the foundation for sustainable growth in the quarters ahead. We anticipate that new buyer relationships like Blis and MNTN will bring incremental ad demand across our wide portfolio of verticals. Regionally, APAC and EMEA revenues grew +12% and +7% respectively, offsetting a -14% decline in the Americas, which was primarily due to spend declines from the large DSP buyer. Moving on to our operating priorities, we continue to invest and reallocate resources to the highest return areas of the business. As Rajeev noted, we're seeing strong growth across our DSP mix and within Activate as customers increase usage and new products drive incremental revenue. Our focus on generative AI is also improving operational agility, streamlining internal workflows, and allowing us to redirect resources towards growth initiatives without adding structural cost. This efficiency has allowed us to expand our sales team, focus on buyers, and grow spend from existing partners and onboard new partners. We are making great progress integrating with the fast-growing mid-to-long tail segment, and so far in 2025, we've added over 25 new DSP partners. All of these efforts help us counter the near-term headwinds from legacy DSPs and further diversify beyond the top five, as I described last quarter. Core to our long-term strategy is being nimble in identifying opportunities and then executing rapidly to capitalize on them. We have achieved this while managing our costs and consistently delivering profits in many different environments. The foundation of this approach is expanding our capacity while driving down our unit costs. We process approximately 87 trillion gross impressions in Q3, a 24% increase over last year, and a 12% sequential gain versus Q2. Nearly 60% of total impressions were from CTV and mobile app inventory, highlighting our increasing focus on high engagement channels. Further, the increase in impressions is highly leveraged over a fixed cost base. Over a trailing 12-month basis, unit costs in the third quarter declined 19% over the comparable prior year period. In terms of operating expenses, our early investments in AI to drive operational efficiency are yielding measurable results. Year to date, every quarter, we have successfully kept our total operating expenses roughly flat at $51 million, while realigning investments to the areas that deliver the strongest ROI. This allows us to scale profitably, even as we invest ahead of growth. For example, we increased our buyer-focused sales team by 19% in Q3 compared to the prior year, while the overall total headcount was flat. This disciplined approach enables us to deliver our 38th straight quarter of adjusted EBITDA profitability. This is a track record few companies in our sector can match. Q3 adjusted EBITDA was $11.2 million, or 16% margin, which included foreign exchange costs of approximately $1 million due to the weakening US dollar over the quarter. US GAAP net loss was -$6.5 million, or -$0.14 per diluted share. Moving to cash and our capital allocation, our balance sheet remains a core strategic advantage. In the third quarter, we generated $32.4 million in net operating cash flows and free cash flow of $22.8 million. In addition to efficient working capital management, there were two other factors that improved our cash flow for this period. The DSP that had made changes in mid-2024 returned to growth in Q3, which favorably improved our DSOs. There was also a reduction in cash taxes paid because of the new federal tax bill that went into effect earlier this year. To underscore our long-term ability to generate cash, since the beginning of 2021 through Q3, we have generated over $390 million in net cash from operations and more than $215 million in free cash flow. We ended the quarter with $136.5 million in cash and zero debt. Given the strength, we continue to deploy our capital to maximize shareholder value. Since the inception of our repurchase program in February 2023 through the end of Q3, we have bought back 12.4 million Class A common shares for $180.6 million. We have $94.4 million remaining in our repurchase program authorized to the end of 2026. This program, combined with our ongoing investments in AI innovation, reflects a balanced approach to capital allocation and a commitment to long-term shareholder value. Turning to our Q4 outlook, we anticipate strong growth in secular areas of the business, including double-digit growth for CTV when excluding political advertising and 30%+ growth for emerging revenues. As a reminder, Q4 2024 political advertising represented about 12% of revenue, nearly 80% of which was via CTV. In terms of the latest trends, in October, the typical holiday seasonal uptick thus far has been relatively muted for some consumer discretionary ad verticals such as food and drink and arts and entertainment. Accordingly, we are taking a prudent approach to guidance based on the latest trends. We expect Q4 revenue to be in the range of $73 million-$77 million. As it relates to the large DSP that declined in July, we are assuming its associated revenue to be flat in Q4 relative to Q3. We anticipate Q4 operating expenses to be similar to Q3's level as AI-driven efficiencies continue to offset selective investments in our sales team. Q4 adjusted EBITDA is projected to be in the range of $19 million-$21 million, which also factors in continued weakness of the US dollar. For the full year, we expect revenue to be in the range of $276 million-$280 million and adjusted EBITDA to be in the range of $53 million-$55 million, inclusive of more than $5 million of estimated negative FX impact. We are maintaining our full-year CapEx projection at $15 million, which is a year-over-year reduction made possible by AI-driven optimization efforts. In closing, our Q3 results highlighted the durability of our financial model and validated the progress we are making behind our business transformation. Looking ahead, we're confident in our robust, multifaceted strategy. Our AI-first end-to-end platform is driving measurable results. We're adding new revenue streams, expanding our SPO relationships, and rapidly diversifying our DSPs in line with future growth opportunities in commerce, performance CTV, and mobile app. With respect to potential remedies in the Google AdTech antitrust trial, we continue to believe that any remedies that level the competitive playing field, whether structural, behavioral, or both, will benefit the open internet and PubMatic. In 2026 and beyond, as revenue growth reaccelerates, we anticipate margin expansion at both the gross and adjusted EBITDA levels because of our efficient and leveraged business. Our decade-plus experience owning and operating our global private cloud infrastructure has given us several advantages. First, it has enabled us to expand capacity while at the same time progressively reduce our rate of CapEx and drive down unit costs through optimization initiatives. Second, it's allowed us to invest early on in next-generation technology with NVIDIA. Today, our infrastructure is a clear differentiator with investments well ahead of our peers that will continue to drive efficiencies and business impact. We are also continuing to leverage AI to drive efficiency and increase our team's productivity. We anticipate total headcount will remain relatively flat in 2026, while investments supporting our fastest-growing areas of our business will increase through internal reallocations. Finally, we are also laser-focused on free cash flow generation and aim to increase cash flow next year supported by further working capital improvements and incremental AI-driven efficiencies. Collectively, we believe our efforts will drive a return to double-digit revenue growth in the future. With that, I'll turn the call over to Stacie for questions. Thank you, Steve. As a reminder, you can ask a question by raising your hand located on the dashboard, or if you're on your phone, please press star nine. In the interest of time, we ask that you please limit your question to one and one follow-up. With that, the first question comes from Andrew Marok at Raymond James. Please go ahead, Andrew. Hi, can you hear me now? Yes, we can. Okay, thanks. Rajeev, if you could maybe expand a bit on the topic of SPO and some of the recent moves companies like The Trade Desk have made, kind of leaning into OpenPath, launching OpenAds, and declaring all SSPs as resellers. On the other hand, the two of you are collaborating on that DLID management API. I guess since we last spoke last quarter, how would you characterize the state of play there? I have a follow-up for Steve. Sure. Yeah, thanks, Andrew, for the question. Yeah, let me first just clarify on the reseller kind of noise that's out there. The industry standard definition, which has been with the industry for over a decade, is that a reseller is the term for when inventory flows from a publisher to an intermediary and then to an SSP. An intermediary can be another exchange or some sort of aggregator of inventory. In contrast, direct is when inventory flows from the publisher directly to the SSP. PubMatic is a platform for direct inventory monetization. Reselling is not our business. We are a direct connection to publishers, and that's how we're able to provide significant incremental value to publishers and to buyers. I think it's pretty clear we provide value in ways that DSPs do not. Yield optimization is a key example of that. Trade Desk, in particular, has been very clear that they are not in the yield optimization business. A publisher needs to have a yield function in place in order to maximize their revenue, which is core to what we do. At the same time, we are also providing value to Trade Desk and others, right? Who, as you noted, Andrew, they are relying on us to improve deals with our price discovery and provisioning API integration announcement. I think what you can see here is that the ecosystem is multifaceted, certainly complex. Our focus is really on taking that direct integrations with publishers that we have, all of that inventory flowing through our platform, the data, the audiences, and really creating value for buyers in such a way that they're able to generate increased return on ad spend, increased ROI, which causes them to then spend more on our platform. That, in turn, generates higher yield for our publishers. That is really the core and the focus that we have. What we're finding with Activate and other capabilities on our platform, a lot of the focus on AI that we talked about in the prepared remarks, is that we have a lot of opportunity coming at it from the sell side of the ecosystem based on the auctions and the data and our close integrations with publishers to be able to add value to both the buyers and to the publishers. Great. Thank you for that. Maybe Steve, if I could, on the COGS point, can you just expand a little bit on the ability to drive that unit cost leverage there and how we should think about that line either on an absolute dollar basis or percentage of revenue going forward? Thank you. Sure. Good to reconnect, Andrew. From our perspective, we for many years have been focused on owning and operating our own infrastructure and have done it very successfully, as you noted, driving down unit costs. We've consistently done that for a decade, often double-digit unit growth reductions. From our perspective, 2026 is no different. Other than that, we've continued to leverage AI more and more to drive optimizations. As you saw in our prepared comments, we increased the number of gross impressions processed by over 20% in the quarter. We did not do that by just throwing a lot of CapEx at it. We did it through software and AI. That basic process is going to continue, but we have more tools and more ability to do that. I would expect in the future, as our revenue reaccelerates, we're going to increase our gross margin. It's going to be a function of revenue and managing our costs. Great. Thanks, Steve. Our next question comes from Matt Swanson at RBC. Please go ahead, Matt. Yeah, great. Thank you, guys, for taking my question. Obviously, a super strong quarter for CTV growth ex-political. You called out a lot of the drivers there, right? The great growth in the Live Sports, maybe some of that expansion of mid-market DSPs and the 90% coverage now of top 30 streamers. Could you give us kind of a little more color, maybe over the past year, just what sort of evolution you've seen in the CTV environment and kind of how you're investing to grow or continue to grow next year? Sure. Yeah. Thank you, Matt, for the question. CTV has been obviously a very strong growth area for us, and we've seen tremendous scale, really building from zero organically several years ago to where we are today. I think there's a couple of trends that are happening. First of all, we are working with more and more premium publishers, right? This quarter, we shared over 90% of the top 30 globally. We added some new FAST streamers, Tubi, Future Today, and Local Now. That builds on our base of premium inventory from existing publishers like Roku and Paramount and NBC. At the same time, there's huge growth in the advertiser mix in CTV. Whereas traditional TV has a couple hundred, maybe 500 advertisers in aggregate, that are the lion's share of ad budgets. With streaming TV, what we see is that there's tens of thousands of advertisers reaching now into the hundreds of thousands, and that number is growing very quickly. As we have focused on going after mid-market-focused DSPs, many of them are focused on small and medium businesses like MNTN or TV Scientific, or they're focused on performance advertising, again, some of those same folks. There's a lot more dollars that we're able to bring onto the platform. That is creating another layer of growth. Third, we've really leaned into AI, as you could tell from the past calls and also the prepared remarks today, at all three layers of the technology stack. I think that's really unlocking incremental budgets as well. Live Sports is just one example of that. Actually, one of our first generative AI creative tools we launched last year, which was focused on helping publishers bring in more political ad spend by scanning political ad creatives. We are continuing to apply that technology for other use cases. There are a lot of other verticals like pharma, for instance, health and wellness, where there are sensitive categories, but we are able to generate unlock of spend through AI. We think it is a really, obviously, exciting area for us. We are going to continue to focus global investment in this area. As we bring more buyers onto our platform via Activate, via our curation capabilities, and now with the AdCP launch, we think there is a long runway of growth ahead of us for CTV. Yeah, that's super helpful. Maybe following up on your commentary on GenAI and some of the agentic, obviously, we've been hearing a lot from a lot of players in the space around these two themes. Can you just talk a little bit about kind of the right to win and how you help your stakeholders understand the value creation versus the noise around these themes? Maybe, as you said, with the AdCP, it's not about winning yourselves, but creating a tame expanding ecosystem around those themes. Yeah. I think let's take each of those in turn. First of all, I think the right to win comes from a couple of things. First of all, it's owning all of our own infrastructure. What that means is that we're in a unique position to be able to deploy cutting-edge AI technology, AI foundational infrastructure, like the partnership that we announced with NVIDIA. That came as a result of multiple years of collaboration. It's not just something you can wake up and do all of a sudden. To be able to do that, you have to really own and control and be in a position to manage all of that infrastructure. I think that's the first right to win, our long-term capability set there and expertise. Second is you've got to have the transactions and the data flowing on your platform. An AI algorithm is only useful to your customers and only relevant to them if you have the scale and ability to transact. Of course, we have that with a trillion or so daily ad impressions flowing on our platform, almost 2,000 publishers, depth in CTV and mobile app and display and so on and so forth. I think that's the second key for the right to win. I think the third is a demonstrated ability to innovate and to really build solutions, not just talk about them. I think what you've seen from us over the last year is that we are significantly ahead of our competition. We have launched 17 agents in our publisher platform already using AI. I think one of our competitors shared that they're planning to build their first agent, right? You can see that's a one to two-year advantage that we have in terms of track record of execution. What that means is that when we're launching things like AdCP, the Ad Context Protocol, which is managing workflow via AI, we are in a position to be able to go talk to both publishers and buyers about, "Here's how you get started. Here are the first use cases to implement, and these things are available on our platform today." I think that's a key part of creating value within the ecosystem, being able to participate in those early transactions, being on the frontier, and then benefiting from the groundswell of growth that we see in front of us. Thank you. Our next question comes from Shweta Khajuria at Wolfe. Please go ahead, Shweta. Thanks, Stacie. Thanks for taking my question. I have a follow-up on the first question on OpenPath, not specifically just OpenPath, but are you seeing, Rajeev, any trends that would suggest that perhaps Trade Desk is increasingly going direct and you are getting impacted by not only just as a reseller, but in terms of the impressions volume? Are you seeing any impact to your business in general? And is it related to them actually launching that Kokai platform? I would think not, but there is this concern in the industry. If you could please perhaps comment on that to correct that, that would be great. Thank you. Sure. Yeah, absolutely. First of all, good news is we are a platform for direct inventory. Regardless of what label anybody wants to put on anything, we know that we are working directly with premium publishers, and there is not a more efficient way for buyers to access the inventory than what is coming through our platform. I think underlying your question, the new Trade Desk platform, Kokai, does evaluate and buy media differently from what we have seen. We took two important steps over the course of Q3, resulting in spend from them stabilizing in August and September, as Steve mentioned. The first is that we revised our machine learning algorithms to ensure we are sending an optimal mix of inventory to them. That work is largely behind us, so we are always doing some level of continuous optimization to drive more spend. We worked with our SPO, Supply Path Optimization partners, to help them configure their seat in the DSP to ensure that they're getting the benefit of their SPO relationships with us. That work is largely completed as well. We have agency marketplaces set up with pretty much every major hold co in different parts of the world, in many different parts of the world. These agencies had to make changes over the last couple of months to ensure that their marketplaces stay intact and that they continue to get the performance and efficiency that they're seeking. These marketplaces are critical to the agency's media buying offerings that they provide to their advertiser clients. We've shared publicly, for instance, we power WPP's premium marketplace. That's built on top of our SSP. Making sure that they're receiving their SPO data, workflow, efficiency, benefits is key to their being able to continue to offer that in market. Similarly, given we're a market leader in curation, we work with our curation partners to ensure that their campaigns continue to run via our SSP and that they get the ROI, the transparency, and the control that caused them to choose to work with us in the first place. I think Trade Desk shared that I believe 85% of their clients are now up and live on Kokai. We think probably the bulk of this movement is behind us. That's a key part of why we're also very rapidly diversifying our DSP mix. As the market evolves to a more fragmented DSP landscape, we're finding significant success with 25%+ year-over-year growth with mid-market DSPs on our platform in Q3. Makes sense. Thanks, Rajeev. Our next question comes from Matt Condon at JMP. Please go ahead, Matt. Thank you so much for taking my questions. My first one is just that there has been a lot of talk of just the impact across the open web on publisher traffic, just given these AI platforms that are taking increased share. Can you just talk about what you are seeing across your publisher base as far as search traffic? Yeah, absolutely. We've seen, I would say, a fairly limited impact. I would say just stepping back, we believe the exposure overall in our business is limited to a single-digit percentage of revenue if there was zero search traffic going to our publishers, and we took no steps to mitigate it. That's probably a high-end kind of watermark of potential impact. We shared in our comments today that roughly 60% of the impressions that we are processing are for CTV and mobile app. Of course, those are unaffected by AI search. Now, of the remaining business, which is browser-based where search is relevant, industry data indicates that search referral traffic is roughly 15%, with the rest of publisher's traffic coming from either social or direct navigation. Given that we work in the head of the market with the top publishers rather than the long tail, I would expect that 15% number to actually be even a little bit lower. If you take, okay, 40% of the impressions, 15% impact at the high end, that gets you to a mid-single-digit percentage potential impact. Again, if we had no mitigating steps that we took. Actually, there's a lot that we can do in terms of continuing to bring on board more CTV, more mobile app, more commerce impressions, and the like. I think the other thing that we're seeing is the offensive opportunity, which is that there's a growing number of AI search experiences that consumers are spending more and more time on. For instance, Gannett launched a solution where users on their properties can search the archives of Gannett articles and get answers to questions. I think that is actually a growing canvas of inventory of opportunity for us as consumers get more and more used to that AI search kind of consumption behavior than they're looking for that from many of their traditional content partners where they consume content. We think that's a new tailwind that is emerging in the business. That's very helpful. My second one is just on your O&O infrastructure and just the differentiation there and your partnership that you announced with NVIDIA, just the 5x speed improvements in bid response times. Can you just talk about the structural difference that's allowing, and is it allowing win rates and auctions to be higher? Just talk about the differentiation there and how that can drive sustainable growth as we think about 2026. Yeah, absolutely. Actually, the good news is that there's multiple ways that having this kind of infrastructure cooperation, collaboration with Nvidia can benefit our business. It really is a collaboration, not just in hardware, but also in software. I think NVIDIA themselves says that I think it's over half, maybe over 60% of their revenue comes from software solutions, right? Obviously, they're well known for hardware, but it's really a combination of hardware and software. I'll give you kind of three specific examples. We use NVIDIA GPUs to power real-time ad decisioning in very low-latency environments. Think about things like connected TV or live sports, where if we can process ad transactions faster, if we can cut latency, that leads to fewer timeouts, more bids in the auction on our platform, and more opportunities for us to win with the publisher. That boosts outcomes, ROI for both advertisers and publishers, also boosts our revenue. The second example is using NVIDIA Triton inference servers, where we use a specific hardware-software implementation with them for traffic shaping. Traffic shaping is a very important and critical role that anybody on the sell side plays, which is to figure out which of the roughly trillion ad impressions we have per day we should send to each particular DSP. Some DSPs, we might send tens of billions. Some might be single-digit billions. Some might be hundreds of billions of ad impressions. It is really important that we pick the right ones. For every DSP, there has got to be a different decision set of calculus based on the types of advertisers and campaigns that are in their platform. Of course, these decisions have to be made within milliseconds of the publisher requesting a bid from us. Third is in the reporting area. We're using an NVIDIA software accelerator for Apache Spark, which allows us to streamline and improve the speed at which we're able to process data. That in turn allows for smarter optimization across a wide array of different use cases. Those are, I think, hopefully just three tangible examples of how our NVIDIA partnership is really leading to the leadership that we talked about in the prepared remarks, in particular at the infrastructure layer, which then allows us to derive benefit in the application and transaction layers of the AI stack. Very helpful. Thanks, Rajeev. This one comes from Rob Coolbrith at Evercore. Please go ahead, Rob. Great. Thank you very much. Rajeev, wanting to go back to this 5x faster in bid response, we had unlocking optimization strategies previously impossible at standard programmatic rates. Can you unpack that? Assuming you have a very substantial lead in accelerated computing in this space, are there counterparties on the demand side who can take advantage of that, or do you think you need to take on a bigger role either in optimizing demand or hosting demand-side logic and optimization to sort of fully take advantage of those capabilities? There's something more akin to what the walled gardens do, maybe in terms of their highly vertically integrated supply chains. Steve, just wanted to maybe get a finer point on this Trade Desk issue. Just given current trends, do you see the potential to maybe see growth alongside their growth in the back half of 2026? Thank you. Yeah, thanks, Rob. Yeah, let me start with your first question, then I'll hand it over to Steve. We absolutely do see opportunity to better leverage our infrastructure through vertical integration. I'll give you two examples of that. One is, as we work more and more with mid-market-focused DSPs, who themselves tend to be smaller, what we find is that there's a lot of opportunity for us to use our platform to help them compete more effectively. What I mean by that is we have huge amounts of data on our platform from this one trillion daily ad impressions. A typical mid-market DSP, they may see 5%-10% of the traffic that a very large DSP like a Google DV360 would see. These mid-market DSPs, because they're smaller in nature, they don't have access to all of that same data. At the same time, they also don't have access to all of the performance aspects of the auction that we're running on behalf of the publisher. There are opportunities for us, which we are working very hard on, to use our platform to help those DSPs derive better performance, better targeting, and ultimately better ROI. That plays very closely with the infrastructure that we've deployed. That's one example, Rob, of where I think vertical integration, where we can do more than we have done traditionally for a legacy DSP. I think these mid-market DSPs, because they're growing quickly, they're very hungry for that kind of collaboration and our ability to help them solve problems. The second is with our Activate solution, where buyers are buying directly in our SSP. Here, that faster processing of bids, better inferencing, all of these things, they help make Activate a very effective solution. We are seeing that play out in terms of the growth, up 4x year over year. Campaign numbers are growing on a similar basis in terms of the number of campaigns run. We think there is a lot of benefit from vertical integration. As you said, Rob, that is somewhat akin to what the walled gardens do. Of course, it is no secret that they are very good at driving performance. We think that vertical integration is a key part of that. I will turn it over to Steve now. Sure, Rob. Just correct me if I do not have the right question, but in terms of our growth opportunities in 2026, obviously, we are going to come back shortly with the next earnings, talk about 2026. There is a lot of things that we have focused on to put us in a very strong position to re-accelerate growth. You have heard some of the stats from the third quarter, strong CTV growth, mobile, as well as our emerging revenues. Once we work through the current transition that we have identified in the second half of this year, we are very confident that we are going to be growing on a number of different fronts. Just as a reminder, we have been investing in secular growth areas. This has been a long-term strategy, and we are seeing the results of that. We are expanding, diversifying our DSP base. We're growing very strongly with commerce DSPs, specialized DSPs around pharma. The coupling of our focus on secular growth, expanding our buyer base, and then innovation around AI, not just in the infrastructure, but certainly in terms of capabilities, functionality. We launched this past quarter AI-driven publisher products, and that will continue to be sources of growth. We are very positive about the growth in the second half of 2026 as we look at the plethora of opportunities ahead of us. Great. Thank you, Steve. Thank you, Rajeev. Our next question comes from Jacob Armstrong at KeyBanc. Please go ahead, Jacob. Thanks for taking my question. This is Jacob on for Justin. Can you discuss how you believe the role the SSP needs to evolve in the coming years as Agentic AI expands? What are the key investments needed to ensure PubMatic is its best position to capitalize off this transition over the next few years? Sure. Yeah. I think the role of the SSP is going to expand significantly from transaction automation to a much bigger role in workflow automation, particularly around audience and inventory discovery and planning and in measurement. If we think about where programmatic technologies have been applied so far, maybe for the last 15 or so years, I would say it's been heavily applied at the transaction level. Meaning we have an ad impression, and we want to get a number of advertiser bids on it, and then we're helping DSPs bid on that individual ad impression. There has been a lot of maturation and innovation and focus on that single atomic impression. We still have RFPs that advertisers send or agencies send out to publishers via email, fill out the spreadsheet. We're launching this ad campaign. We want to understand what audiences or what inventory you might have available. Some human at the publisher fills that out, and then they email that back to the agency. The agency collects those, and then they decide where they're going to set up and allocate budget. That is still a largely manual process. Some things have improved, but still a lot of manual approaches. I think there is a huge opportunity to think outside of the pure atomic impression or transaction around the discovery and planning, and then after the transaction to the measurement, to use AI where an advertiser's agent or an agency's agent can say, "Hey, I'm launching this product or service. Please tell me what you can do for me as a publisher or media owner from an audience and an inventory perspective." We can take a structured response, aggregate that up across many of the publishers that we're working with, and then deliver a pre-constructed campaign brief to the agency. The agency can begin to buy that using our transaction pipes. We can have a feedback loop around measurement with that. The agency can revise their campaign. I think there's a lot that can be done outside of that single transaction element. That's really where we are focused with the transaction layer of the stack that I mentioned earlier with Ad Context Protocol. We're working out what exactly should those structured requests and responses look like, and then how do they get set up, who owns what data, and then how do they get optimized. I think there's a long runway, Jacob, ahead in that area. Thank you. Next question comes from Ed Alter at Jefferies. Please go ahead. Hi. Thanks for the question. I wanted to talk about the investments you're making to meet the demand from the mid-market DSPs like MNTN. Where exactly are those going to show up? Is that more headcount, tech investments? Just be great to talk about the color on that. Sure. We have been very focused throughout this year and really leading into this year to be as efficient as possible in terms of where we deploy our teams. We made a very conscious decision in the last 18 months to move more and more resources towards the fastest-growing areas, segment-growth areas, of which, of course, critical DSPs are a part of that. We have been increasing investment in the team that goes directly and calls on these DSPs. This year, we increased thus far about 19% in terms of headcount. We have done that by reallocating team members around the organization. You can see from our results, our overall headcount is roughly flat. We have done a very careful analysis of how we are going to keep on leveraging our existing resources. Of course, all of this is supported by the progress we've made in AI in terms of becoming more efficient just in our daily activities. When I look ahead to 2026, I'm anticipating we're going to keep our headcount roughly flat, but we're going to keep increasing the resources against those areas that are driving the greatest results. We're on a great mission to do that. It's not just on the OpEx side. We are looking at our CapEx, and we do not anticipate increasing our CapEx in 2026 based upon sort of all the optimization, the work with NVIDIA, a lot of other things that are in the pipeline around efficiency and optimizations. From our perspective, we're very confident that we are able to move dollars against the right opportunities without burdening the P&L. Feeling good about the progress and our ability to increase our margins as revenue re-accelerates. Thanks, Steve. Thanks, Steve. Unfortunately, we are just about out of time. So I'm going to turn the call back over to Rajeev for closing remarks, and we'll talk to you all in your follow-up calls very shortly. Thank you, Stacey, and thank you all for joining us today. Our results demonstrate the power of our differentiated business model. We continue to innovate, diversify our business, and operate with discipline. Our AI innovation is leading the industry with measurable outcomes driving momentum across the ecosystem. Looking to 2026 and beyond, as revenue growth re-accelerates, we anticipate margin expansion at both the gross and adjusted EBITDA levels because of our efficient and leveraged business. We look forward to seeing many of you at upcoming conferences, including the UBS Technology and AI Conference on December 2, the Wolfe Virtual SMIDCAP Conference on December 3, and Raymond James TMT Conference on December 9. Thanks, everyone, for joining us today. Have a great afternoon.

Speaker 3: Hello everyone and welcome. We will begin momentarily. Hello everyone and welcome. We will begin momentarily. Hello everyone and welcome. We will begin momentarily. Hello everyone and welcome to PubMatic's third quarter 2025 earnings call. My name is Emmanuel and I will be your Zoom operator today. Thank you for your attendance today. As a reminder, this webinar is being recorded. I will now turn the call over to Stacie Clements with The Blueshirt Group. Hello everyone and welcome. hello everyone and welcome We will begin momentarily. we will begin momentarily Hello everyone and welcome. hello everyone and welcome We will begin momentarily. we will begin momentarily Hello everyone and welcome. hello everyone and welcome We will begin momentarily. we will begin momentarily Hello everyone and welcome to PubMatic's third quarter 2025 earnings call. hello everyone and welcome to pubmatic's third quarter 2025 earnings call My name is Emmanuel and I will be your Zoom operator today. my name is emmanuel and i will be your zoom operator today Thank you for your attendance today. thank you for your attendance today As a reminder, this webinar is being recorded. as a reminder this webinar is being recorded I will now turn the call over to Stacie Clements with The Blueshirt Group . i will now turn the call over to stacie clements with the blueshirt group

Speaker 5: Good afternoon everyone and welcome to PubMatic's earnings call for the third quarter of 2025. This is Stacie Clements with The Blueshirt Group and I'll be your operator today. Joining me on the call are Rajeev Goel, co-founder and CEO, and Steve Pantelick, CFO. Before we get started, I have a few housekeeping items. Today's prepared remarks have been recorded, after which Rajeev and Steve will host live Q&A. If you plan to ask a question, please ensure you set your Zoom name to display your full name and firm and use the raise hand function located at the bottom of your screen. A copy of our press release can be found on the website at investors.pubmatic.com. I would like to remind participants that during this call, management will make forward-looking statements, including without limitations, statements regarding our future performance, market opportunity, growth strategy, and financial outlook. Good afternoon everyone and welcome to PubMatic's earnings call for the third quarter of 2025. good afternoon everyone and welcome to pubmatic's earnings call for the third quarter of 2025 This is Stacie Clements with The Blueshirt Group and I'll be your operator today. this is stacie clements with the blueshirt group and i'll be your operator today Joining me on the call are Rajeev Goel, co-founder and CEO, and Steve Pantelick, CFO. joining me on the call are rajeev goel co-founder and ceo and steve pantelick cfo Before we get started, I have a few housekeeping items. before we get started i have a few housekeeping items Today's prepared remarks have been recorded, after which Rajeev and Steve will host live Q&A. today's prepared remarks have been recorded after which rajeev and steve will host live q&a If you plan to ask a question, please ensure you set your Zoom name to display your full name and firm and use the raise hand function located at the bottom of your screen. if you plan to ask a question please ensure you set your zoom name to display your full name and firm and use the raise hand function located at the bottom of your screen A copy of our press release can be found on the website at investors.pubmatic.com. a copy of our press release can be found on the website at investors.pubmatic.com I would like to remind participants that during this call, management will make forward-looking statements, including without limitations, statements regarding our future performance, market opportunity, growth strategy, and financial outlook. i would like to remind participants that during this call management will make forward-looking statements including without limitations statements regarding our future performance market opportunity growth strategy and financial outlook Forward-looking statements are based on our current expectations and assumptions regarding our business, the economy, and future conditions. These forward-looking statements are subject to inherent risks, uncertainties, and changes in circumstances that are difficult to predict. You can find more information about these risks, uncertainties, and other factors in our reports filed from time to time with the Securities and Exchange Commission and are available at investors.pubmatic.com, including our most recent Form 10-K and any subsequent filings on Form 10-Q or 8-K. Our actual results may differ materially from those contemplated by the forward-looking statements. We caution you therefore against relying on any of these forward-looking statements. All information discussed today is as of November 10th, 2025, and we do not intend and undertake no obligation to update any forward-looking statement, whether as a result of new information, future developments, or otherwise, except as may be required by law. Forward-looking statements are based on our current expectations and assumptions regarding our business, the economy, and future conditions. forward-looking statements are based on our current expectations and assumptions regarding our business the economy and future conditions These forward-looking statements are subject to inherent risks, uncertainties, and changes in circumstances that are difficult to predict. these forward-looking statements are subject to inherent risks uncertainties and changes in circumstances that are difficult to predict You can find more information about these risks, uncertainties, and other factors in our reports filed from time to time with the Securities and Exchange Commission and are available at investors.pubmatic.com, including our most recent Form 10-K and any subsequent filings on Form 10-Q or 8-K. you can find more information about these risks uncertainties and other factors in our reports filed from time to time with the securities and exchange commission and are available at investors.pubmatic.com including our most recent form 10-k and any subsequent filings on form 10-q or 8-k Our actual results may differ materially from those contemplated by the forward-looking statements. our actual results may differ materially from those contemplated by the forward-looking statements We caution you therefore against relying on any of these forward-looking statements. we caution you therefore against relying on any of these forward-looking statements All information discussed today is as of November 10th, 2025, and we do not intend and undertake no obligation to update any forward-looking statement, whether as a result of new information, future developments, or otherwise, except as may be required by law. all information discussed today is as of november 10th 2025 and we do not intend and undertake no obligation to update any forward-looking statement whether as a result of new information future developments or otherwise except as may be required by law In addition, today's discussion will include references to certain non-GAAP financial measures, including adjusted EBITDA, non-GAAP net income, cash flow from operations, and free cash flow. These non-GAAP measures are presented for supplemental informational purposes only and should not be considered a substitute for financial information presented in accordance with GAAP. A reconciliation of these measures to the most directly comparable GAAP measures is available in our press release. I will now turn the call over to Rajeev. In addition, today's discussion will include references to certain non-GAAP financial measures, including adjusted EBITDA, non-GAAP net income, cash flow from operations, and free cash flow. in addition today's discussion will include references to certain non-gaap financial measures including adjusted ebitda non-gaap net income cash flow from operations and free cash flow These non-GAAP measures are presented for supplemental informational purposes only and should not be considered a substitute for financial information presented in accordance with GAAP. these non-gaap measures are presented for supplemental informational purposes only and should not be considered a substitute for financial information presented in accordance with gaap A reconciliation of these measures to the most directly comparable GAAP measures is available in our press release. a reconciliation of these measures to the most directly comparable gaap measures is available in our press release I will now turn the call over to Rajeev. i will now turn the call over to rajeev

Speaker 1: Thank you, Stacie, and welcome everyone. We delivered a stronger-than-expected quarter with revenue and adjusted EBITDA ahead of guidance, as well as strong cash flow, demonstrating the power of our platform, the continued diversification of our business, and our accelerated pace of innovation. CTV significantly outpaced the market rate of growth and grew over 50% year over year, excluding political, driven by increased premium supply, continued scaling of agency marketplaces, traction in our live sports marketplace, and growth of small and mid-market advertisers. Emerging revenues grew over 80% year over year as sell-side targeting and newly launched AI solutions quickly ramped. We also strengthened our end-to-end platform with cutting-edge AI innovations that are deepening our competitive moat and unlocking measurable incremental revenue opportunities. The industry is rapidly redefining itself, and we are actively shaping its future. The impending Google AdTech Remedies verdict will very likely shift market share. Thank you, Stacie, and welcome everyone. thank you stacie and welcome everyone We delivered a stronger-than-expected quarter with revenue and adjusted EBITDA ahead of guidance, as well as strong cash flow, demonstrating the power of our platform, the continued diversification of our business, and our accelerated pace of innovation. we delivered a stronger-than-expected quarter with revenue and adjusted ebitda ahead of guidance as well as strong cash flow demonstrating the power of our platform the continued diversification of our business and our accelerated pace of innovation CTV significantly outpaced the market rate of growth and grew over 50% year over year, excluding political, driven by increased premium supply, continued scaling of agency marketplaces, traction in our live sports marketplace, and growth of small and mid-market advertisers. ctv significantly outpaced the market rate of growth and grew over 50% year over year excluding political driven by increased premium supply continued scaling of agency marketplaces traction in our live sports marketplace and growth of small and mid-market advertisers Emerging revenues grew over 80% year over year as sell-side targeting and newly launched AI solutions quickly ramped. emerging revenues grew over 80% year over year as sell-side targeting and newly launched ai solutions quickly ramped We also strengthened our end-to-end platform with cutting-edge AI innovations that are deepening our competitive moat and unlocking measurable incremental revenue opportunities. we also strengthened our end-to-end platform with cutting-edge ai innovations that are deepening our competitive moat and unlocking measurable incremental revenue opportunities The industry is rapidly redefining itself, and we are actively shaping its future. the industry is rapidly redefining itself and we are actively shaping its future The impending Google AdTech Remedies verdict will very likely shift market share. the impending google adtech remedies verdict will very likely shift market share The prioritization of data targeting and performance is shifting value creation in the ecosystem to the sell side. Over the past few months, we've seen a groundswell of AI-driven innovation reshaping the entire ecosystem. AI is now at the center of every strategic conversation, whether the objective is advertising performance, transparency, or automation. As an early adopter of AI, our leadership is a defining advantage for us, which will grow over time. We continue to innovate with an AI strategy centered around three distinct layers of programmatic advertising: the infrastructure layer, the application layer, and the transaction layer. For the infrastructure layer, we own and operate our full technology stack, giving us the efficiencies, control, and independence that many of our peers don't have, evidenced by multiple recent public cloud outages. The prioritization of data targeting and performance is shifting value creation in the ecosystem to the sell side. the prioritization of data targeting and performance is shifting value creation in the ecosystem to the sell side Over the past few months, we've seen a groundswell of AI-driven innovation reshaping the entire ecosystem. over the past few months we've seen a groundswell of ai-driven innovation reshaping the entire ecosystem AI is now at the center of every strategic conversation, whether the objective is advertising performance, transparency, or automation. ai is now at the center of every strategic conversation whether the objective is advertising performance transparency or automation As an early adopter of AI, our leadership is a defining advantage for us, which will grow over time. as an early adopter of ai our leadership is a defining advantage for us which will grow over time We continue to innovate with an AI strategy centered around three distinct layers of programmatic advertising: the infrastructure layer, the application layer, and the transaction layer. we continue to innovate with an ai strategy centered around three distinct layers of programmatic advertising the infrastructure layer the application layer and the transaction layer For the infrastructure layer, we own and operate our full technology stack, giving us the efficiencies, control, and independence that many of our peers don't have, evidenced by multiple recent public cloud outages. for the infrastructure layer we own and operate our full technology stack giving us the efficiencies control and independence that many of our peers don't have evidenced by multiple recent public cloud outages Through our technical collaboration with NVIDIA, we are deploying next-generation AI models on the world's most advanced GPU architecture. Five years in the making, this collaboration required three ingredients: physical infrastructure capable of deploying GPUs at scale, massive transaction volume to test and optimize across the full open internet, and technical sophistication to be an early adopter. Today, our infrastructure is a clear differentiator, and we believe years ahead of peers. The business impacts are tangible. 5x faster bid responses and 85% fewer auction timeouts, all recovering millions in ad spend. These results close the infrastructure advantage of walled gardens and directly translate into advertiser performance with higher publisher yield. Looking ahead, as autonomous AI agents begin planning and negotiating ad campaigns, industry compute requirements are expected to grow dramatically. These early investments only widen our infrastructure advantage as legacy platforms are constrained by cloud and computing limits. Through our technical collaboration with NVIDIA, we are deploying next-generation AI models on the world's most advanced GPU architecture. through our technical collaboration with nvidia we are deploying next-generation ai models on the world's most advanced gpu architecture Five years in the making, this collaboration required three ingredients: physical infrastructure capable of deploying GPUs at scale, massive transaction volume to test and optimize across the full open internet, and technical sophistication to be an early adopter. five years in the making this collaboration required three ingredients physical infrastructure capable of deploying gpus at scale massive transaction volume to test and optimize across the full open internet and technical sophistication to be an early adopter Today, our infrastructure is a clear differentiator, and we believe years ahead of peers. today our infrastructure is a clear differentiator and we believe years ahead of peers The business impacts are tangible. 5x faster bid responses and 85% fewer auction timeouts, all recovering millions in ad spend. the business impacts are tangible 5x faster bid responses and 85% fewer auction timeouts all recovering millions in ad spend These results close the infrastructure advantage of walled gardens and directly translate into advertiser performance with higher publisher yield. these results close the infrastructure advantage of walled gardens and directly translate into advertiser performance with higher publisher yield Looking ahead, as autonomous AI agents begin planning and negotiating ad campaigns, industry compute requirements are expected to grow dramatically. looking ahead as autonomous ai agents begin planning and negotiating ad campaigns industry compute requirements are expected to grow dramatically These early investments only widen our infrastructure advantage as legacy platforms are constrained by cloud and computing limits. these early investments only widen our infrastructure advantage as legacy platforms are constrained by cloud and computing limits This is the monumental shift for open internet digital advertising that PubMatic has been building for. Next, at the application layer, we're deploying some of the most exciting and innovative capabilities we've ever launched, embedding AI directly into our products to power intelligent workflows and decision automation. We launched AI-powered buyer and publisher platforms that now handle more complexity with significantly less manual effort. Our solutions cut campaign setup time by 87% and speed up issue resolution by 70%, translating directly into faster activations, higher productivity, and better outcomes for our customers. Independent agency Butler/Till has been using our AI-powered PubMatic for Buyers platform. Scott Ensign, their Chief Strategy Officer, said, and I quote, "Historically, systems don't talk to each other. Data sets are disparate. Walled garden data is hard to connect. This is the monumental shift for open internet digital advertising that PubMatic has been building for. this is the monumental shift for open internet digital advertising that pubmatic has been building for Next, at the application layer, we're deploying some of the most exciting and innovative capabilities we've ever launched, embedding AI directly into our products to power intelligent workflows and decision automation. next at the application layer we're deploying some of the most exciting and innovative capabilities we've ever launched embedding ai directly into our products to power intelligent workflows and decision automation We launched AI-powered buyer and publisher platforms that now handle more complexity with significantly less manual effort. we launched ai-powered buyer and publisher platforms that now handle more complexity with significantly less manual effort Our solutions cut campaign setup time by 87% and speed up issue resolution by 70%, translating directly into faster activations, higher productivity, and better outcomes for our customers. our solutions cut campaign setup time by 87% and speed up issue resolution by 70% translating directly into faster activations higher productivity and better outcomes for our customers Independent agency Butler/Till has been using our AI-powered PubMatic for Buyers platform. independent agency butler/till has been using our ai-powered pubmatic for buyers platform Scott Ensign, their Chief Strategy Officer, said, and I quote, "Historically, systems don't talk to each other. scott ensign their chief strategy officer said and i quote "historically systems don't talk to each other Data sets are disparate. data sets are disparate Walled garden data is hard to connect. walled garden data is hard to connect AI allows us to scale human reasoning and run campaigns that truly look across all channels and optimize across them. Working with PubMatic for Buyers helps make that possible." This same enthusiasm is building on the publisher side. Our newly launched publisher suite already includes 17 operational AI agents guiding yield, diagnostics, and creative setup. Customer feedback has been exceptional. One of our largest omnichannel partners, Overwolf, told us that the PubMatic Assistant AI chatbot is unique with respect to the accuracy and speed of execution. Finally, at the transaction layer, we're preparing for the next major step, Agentic AI, where advertisers and publishers' AI agents will be able to transact directly through our infrastructure. AI allows us to scale human reasoning and run campaigns that truly look across all channels and optimize across them. ai allows us to scale human reasoning and run campaigns that truly look across all channels and optimize across them Working with PubMatic for Buyers helps make that possible." This same enthusiasm is building on the publisher side. working with pubmatic for buyers helps make that possible." this same enthusiasm is building on the publisher side Our newly launched publisher suite already includes 17 operational AI agents guiding yield, diagnostics, and creative setup. our newly launched publisher suite already includes 17 operational ai agents guiding yield diagnostics and creative setup Customer feedback has been exceptional. customer feedback has been exceptional One of our largest omnichannel partners, Overwolf, told us that the PubMatic Assistant AI chatbot is unique with respect to the accuracy and speed of execution. one of our largest omnichannel partners overwolf told us that the pubmatic assistant ai chatbot is unique with respect to the accuracy and speed of execution Finally, at the transaction layer, we're preparing for the next major step, Agentic AI, where advertisers and publishers' AI agents will be able to transact directly through our infrastructure. finally at the transaction layer we're preparing for the next major step agentic ai where advertisers and publishers' ai agents will be able to transact directly through our infrastructure We are a co-founder of the newly established Ad Context Protocol, or AdCP, alongside partners like Yahoo, LG Ad Solutions, and Raptive, and the first to publish a model context protocol specification for agent-to-agent communication in the programmatic industry. We are establishing the protocols, safety mechanisms, and the interoperability standards that will enable AI agents across the entire ecosystem to transact efficiently and securely. With this three-layer strategy, infrastructure, application, and transaction, we are building the complete system for Agentic AI. The high-performance car, the roads to drive on, and the traffic laws to govern it all. While still in early days, we are already seeing material benefits. First, AI is driving increased platform usage. As we roll out new generative AI and Agentic AI features across our platform, our customers are able to launch campaigns and resolve issues faster and improve performance. We are a co-founder of the newly established Ad Context Protocol, or AdCP, alongside partners like Yahoo, LG Ad Solutions, and Raptive, and the first to publish a model context protocol specification for agent-to-agent communication in the programmatic industry. we are a co-founder of the newly established ad context protocol or adcp alongside partners like yahoo lg ad solutions and raptive and the first to publish a model context protocol specification for agent-to-agent communication in the programmatic industry We are establishing the protocols, safety mechanisms, and the interoperability standards that will enable AI agents across the entire ecosystem to transact efficiently and securely. we are establishing the protocols safety mechanisms and the interoperability standards that will enable ai agents across the entire ecosystem to transact efficiently and securely With this three-layer strategy, infrastructure, application, and transaction, we are building the complete system for Agentic AI. T he high-performance car, the roads to drive on, and the traffic laws to govern it all. with this three-layer strategy infrastructure application and transaction we are building the complete system for agentic ai. t he high-performance car the roads to drive on and the traffic laws to govern it all While still in early days, we are already seeing material benefits. while still in early days we are already seeing material benefits First, AI is driving increased platform usage. first ai is driving increased platform usage As we roll out new generative AI and Agentic AI features across our platform, our customers are able to launch campaigns and resolve issues faster and improve performance. as we roll out new generative ai and agentic ai features across our platform our customers are able to launch campaigns and resolve issues faster and improve performance Validating our leadership in AI, customers have repeatedly said they are not seeing this level of innovation from other companies in the industry. Second, AI solutions are generating new revenue streams. One example is our new AI-based yield optimization solution for publishers, which uses adaptive learning models to automate pricing and improve auction efficiency. This AI solution is driving growth for our publishers, increasing their revenue on average by 10%. Launched just a few months ago, it has already unlocked tens of millions of dollars in incremental revenue for our publishers and, in turn, is generating new PubMatic revenue as part of our emerging revenue category. Third, AI is improving our operational efficiency and profitability. In the last two months, we deployed a dozen AI agents internally to automate operational workflows, accelerate development, and reduce overhead. Validating our leadership in AI, customers have repeatedly said they are not seeing this level of innovation from other companies in the industry. validating our leadership in ai customers have repeatedly said they are not seeing this level of innovation from other companies in the industry Second, AI solutions are generating new revenue streams. second ai solutions are generating new revenue streams One example is our new AI-based yield optimization solution for publishers, which uses adaptive learning models to automate pricing and improve auction efficiency. one example is our new ai-based yield optimization solution for publishers which uses adaptive learning models to automate pricing and improve auction efficiency This AI solution is driving growth for our publishers, increasing their revenue on average by 10%. this ai solution is driving growth for our publishers increasing their revenue on average by 10% Launched just a few months ago, it has already unlocked tens of millions of dollars in incremental revenue for our publishers and, in turn, is generating new PubMatic revenue as part of our emerging revenue category. launched just a few months ago it has already unlocked tens of millions of dollars in incremental revenue for our publishers and in turn is generating new pubmatic revenue as part of our emerging revenue category Third, AI is improving our operational efficiency and profitability. third ai is improving our operational efficiency and profitability In the last two months, we deployed a dozen AI agents internally to automate operational workflows, accelerate development, and reduce overhead. in the last two months we deployed a dozen ai agents internally to automate operational workflows accelerate development and reduce overhead Our goal is to deploy substantially more agents in the coming quarters to give us measurable margin leverage while we continue to invest and strengthen our long-term moat. Looking ahead, despite the significant progress we have made, we believe we're just scratching the surface. AI will continue to drive higher usage across our platform, generate incremental revenue streams, and improve operational leverage. Because we're investing across all three layers, PubMatic is poised to lead the next era of Agentic AI advertising. While AI is a powerful driver of our long-term growth strategy, it's equally important that we execute across the four other strategic priorities I outlined last quarter. I'm pleased to report that we're making significant progress in each of those areas. First, we're broadening our demand-side ecosystem and accelerating our pipeline. Our goal is to deploy substantially more agents in the coming quarters to give us measurable margin leverage while we continue to invest and strengthen our long-term moat. our goal is to deploy substantially more agents in the coming quarters to give us measurable margin leverage while we continue to invest and strengthen our long-term moat Looking ahead, despite the significant progress we have made, we believe we're just scratching the surface. looking ahead despite the significant progress we have made we believe we're just scratching the surface AI will continue to drive higher usage across our platform, generate incremental revenue streams, and improve operational leverage. ai will continue to drive higher usage across our platform generate incremental revenue streams and improve operational leverage Because we're investing across all three layers, PubMatic is poised to lead the next era of Agentic AI advertising. because we're investing across all three layers pubmatic is poised to lead the next era of agentic ai advertising While AI is a powerful driver of our long-term growth strategy, it's equally important that we execute across the four other strategic priorities I outlined last quarter. while ai is a powerful driver of our long-term growth strategy it's equally important that we execute across the four other strategic priorities i outlined last quarter I'm pleased to report that we're making significant progress in each of those areas. i'm pleased to report that we're making significant progress in each of those areas First, we're broadening our demand-side ecosystem and accelerating our pipeline. first we're broadening our demand-side ecosystem and accelerating our pipeline We expanded a top-three DSP partnership, introducing programmatic guarantee deals that streamline execution for advertisers across premium streaming content. This integration reduces friction in deal setup, accelerates time to market for campaigns, and unlocks incremental budgets. It's a great example of how our relationships with global DSP partners are becoming more strategic as we diversify beyond the legacy DSPs. We also launched a new partnership with Blis, an omnichannel DSP that brings high-value demand from leading global brands across automotive, retail, and financial services. Blis combines T-Mobile's app engagement data with real-world movement patterns and transaction signals to drive performance-focused campaigns with measurable outcomes, from brand awareness to store visits and sales. This partnership expands our reach into premium brand advertisers who prioritize full funnel measurement and offline attribution. These mid-market-focused DSPs, like Blis, represent one of the fastest-growing advertising segments. We expanded a top-three DSP partnership, introducing programmatic guarantee deals that streamline execution for advertisers across premium streaming content. we expanded a top-three dsp partnership introducing programmatic guarantee deals that streamline execution for advertisers across premium streaming content This integration reduces friction in deal setup, accelerates time to market for campaigns, and unlocks incremental budgets. this integration reduces friction in deal setup accelerates time to market for campaigns and unlocks incremental budgets It's a great example of how our relationships with global DSP partners are becoming more strategic as we diversify beyond the legacy DSPs. it's a great example of how our relationships with global dsp partners are becoming more strategic as we diversify beyond the legacy dsps We also launched a new partnership with Blis, an omnichannel DSP that brings high-value demand from leading global brands across automotive, retail, and financial services. we also launched a new partnership with blis an omnichannel dsp that brings high-value demand from leading global brands across automotive retail and financial services Blis combines T-Mobile's app engagement data with real-world movement patterns and transaction signals to drive performance-focused campaigns with measurable outcomes, from brand awareness to store visits and sales. blis combines t-mobile's app engagement data with real-world movement patterns and transaction signals to drive performance-focused campaigns with measurable outcomes from brand awareness to store visits and sales This partnership expands our reach into premium brand advertisers who prioritize full funnel measurement and offline attribution. this partnership expands our reach into premium brand advertisers who prioritize full funnel measurement and offline attribution These mid-market-focused DSPs, like Blis, represent one of the fastest-growing advertising segments. these mid-market-focused dsps like blis represent one of the fastest-growing advertising segments In Q3, ad spend from this segment grew 25%+ year over year, reflecting meaningful progress in our diversification strategy. Second, we're accelerating our investment on the buy side. We're extending our reach with independent agencies and direct advertisers, expanding our focus from the top 20 agencies to the top 150, and from the top 500 advertisers to approximately 1,500. Supply path optimization remains a key growth driver, with the majority of this addressable market as greenfield opportunity. SPO represented over 55% of activity on our platform in Q3. As a pioneer in SPO, we are the leading incumbent, offering scale and a rich history of performance and efficiency gains. Building on this momentum, we are onboarding more buyers onto Activate, our direct-to-supply buying platform. In Q3, ad spend from this segment grew 25%+ year over year, reflecting meaningful progress in our diversification strategy. in q3 ad spend from this segment grew 25%+ year over year reflecting meaningful progress in our diversification strategy Second, we're accelerating our investment on the buy side. second we're accelerating our investment on the buy side We're extending our reach with independent agencies and direct advertisers, expanding our focus from the top 20 agencies to the top 150, and from the top 500 advertisers to approximately 1,500. we're extending our reach with independent agencies and direct advertisers expanding our focus from the top 20 agencies to the top 150 and from the top 500 advertisers to approximately 1,500 Supply path optimization remains a key growth driver, with the majority of this addressable market as greenfield opportunity. supply path optimization remains a key growth driver with the majority of this addressable market as greenfield opportunity SPO represented over 55% of activity on our platform in Q3. spo represented over 55% of activity on our platform in q3 As a pioneer in SPO, we are the leading incumbent, offering scale and a rich history of performance and efficiency gains. as a pioneer in spo we are the leading incumbent offering scale and a rich history of performance and efficiency gains Building on this momentum, we are onboarding more buyers onto Activate, our direct-to-supply buying platform. building on this momentum we are onboarding more buyers onto activate our direct-to-supply buying platform Over the first nine months of the year, the number of active campaigns grew more than 4x over last year, with a 35% increase in customers. Activate is a key solution that enables the ecosystem-wide push for increased performance, transparency, and efficiency of programmatic advertising. This is only the beginning. We have begun integrating AI-powered agent-to-agent workflows into Activate to boost performance and reduce friction, making advertiser adoption even easier. We believe that this new technology could have a massive impact on Activate adoption over the medium term as we accelerate investment in mid-tail buyers. Finally, we continue to deepen our integration with DSPs to create value beyond real-time bidding transactions. We are the first SSP to integrate The Trade Desk's price discovery and provisioning API, which allows publishers and advertisers to share deal metadata between our platforms to better identify and resolve issues with underperforming deals in real time. Over the first nine months of the year, the number of active campaigns grew more than 4x over last year, with a 35% increase in customers. over the first nine months of the year the number of active campaigns grew more than 4x over last year with a 35% increase in customers Activate is a key solution that enables the ecosystem-wide push for increased performance, transparency, and efficiency of programmatic advertising. activate is a key solution that enables the ecosystem-wide push for increased performance transparency and efficiency of programmatic advertising This is only the beginning. We have begun integrating AI-powered agent-to-agent workflows into Activate to boost performance and reduce friction, making advertiser adoption even easier. this is only the beginning. we have begun integrating ai-powered agent-to-agent workflows into activate to boost performance and reduce friction making advertiser adoption even easier We believe that this new technology could have a massive impact on Activate adoption over the medium term as we accelerate investment in mid-tail buyers. we believe that this new technology could have a massive impact on activate adoption over the medium term as we accelerate investment in mid-tail buyers Finally, we continue to deepen our integration with DSPs to create value beyond real-time bidding transactions. finally we continue to deepen our integration with dsps to create value beyond real-time bidding transactions We are the first SSP to integrate The Trade Desk's price discovery and provisioning API, which allows publishers and advertisers to share deal metadata between our platforms to better identify and resolve issues with underperforming deals in real time. we are the first ssp to integrate the trade desk's price discovery and provisioning api which allows publishers and advertisers to share deal metadata between our platforms to better identify and resolve issues with underperforming deals in real time Today, over 50% of programmatic deals sit dormant because this information was previously only available offline. We anticipate this innovation will accelerate our share of PMP and PG deals as we drive adoption together with The Trade Desk. Third, our momentum in Activate is also fueling our growth in CTV. Excluding political advertising, CTV revenue grew more than 50% year over year, and the format remains a primary growth engine for our business. Live Sports is an especially exciting category. Buying activity rose more than 150% sequentially from Q2 to Q3 as we scaled our AI-powered live sports marketplace and launched new programmatic guarantee deals around tentpole events like the US Open for tennis and Monday Night Football. We also continue to expand our CTV publisher footprint. Today, over 50% of programmatic deals sit dormant because this information was previously only available offline. today over 50% of programmatic deals sit dormant because this information was previously only available offline We anticipate this innovation will accelerate our share of PMP and PG deals as we drive adoption together with The Trade Desk. we anticipate this innovation will accelerate our share of pmp and pg deals as we drive adoption together with the trade desk Third, our momentum in Activate is also fueling our growth in CTV. third our momentum in activate is also fueling our growth in ctv Excluding political advertising, CTV revenue grew more than 50% year over year, and the format remains a primary growth engine for our business. excluding political advertising ctv revenue grew more than 50% year over year and the format remains a primary growth engine for our business Live Sports is an especially exciting category. live sports is an especially exciting category Buying activity rose more than 150% sequentially from Q2 to Q3 as we scaled our AI-powered live sports marketplace and launched new programmatic guarantee deals around tentpole events like the US Open for tennis and Monday Night Football. buying activity rose more than 150% sequentially from q2 to q3 as we scaled our ai-powered live sports marketplace and launched new programmatic guarantee deals around tentpole events like the us open for tennis and monday night football We also continue to expand our CTV publisher footprint. we also continue to expand our ctv publisher footprint New deals and expanded partnerships with a number of free ad-supported streaming services, including Tubi, Future Today, and Local Now, added to a strong roster with over 90% of the top 30 global streamers now on PubMatic. We offer these premium content streamers incremental ad demand that other platforms can't offer because of the scale of our SPO, Activate, curation, and commerce businesses. For example, Fremantle, one of the world's largest entertainment content creators behind franchises like American Idol, America's Got Talent, and The X Factor, generated a 78% increase in incremental programmatic demand across their expanding fast channel portfolio by partnering with PubMatic. This is a remarkable outcome and highlights significant incremental ad revenue our platform generates for our partners. Additionally, we're expanding ad formats on our platform. In collaboration with Dentsu, we recently launched pause ads for CTV through Activate. New deals and expanded partnerships with a number of free ad-supported streaming services, including Tubi, Future Today, and Local Now, added to a strong roster with over 90% of the top 30 global streamers now on PubMatic. new deals and expanded partnerships with a number of free ad-supported streaming services including tubi future today and local now added to a strong roster with over 90% of the top 30 global streamers now on pubmatic We offer these premium content streamers incremental ad demand that other platforms can't offer because of the scale of our SPO, Activate, curation, and commerce businesses. we offer these premium content streamers incremental ad demand that other platforms can't offer because of the scale of our spo activate curation and commerce businesses For example, Fremantle, one of the world's largest entertainment content creators behind franchises like American Idol, America's Got Talent, and The X Factor, generated a 78% increase in incremental programmatic demand across their expanding fast channel portfolio by partnering with PubMatic. for example fremantle one of the world's largest entertainment content creators behind franchises like american idol america's got talent and the x factor generated a 78% increase in incremental programmatic demand across their expanding fast channel portfolio by partnering with pubmatic This is a remarkable outcome and highlights significant incremental ad revenue our platform generates for our partners. this is a remarkable outcome and highlights significant incremental ad revenue our platform generates for our partners Additionally, we're expanding ad formats on our platform. additionally we're expanding ad formats on our platform In collaboration with Dentsu, we recently launched pause ads for CTV through Activate. in collaboration with dentsu we recently launched pause ads for ctv through activate Advertisers can now serve dynamic, contextually relevant ads when viewers pause content, representing a premium, brand-safe moment that boosts engagement and yields incremental revenue for publishers. What's more, with $155 billion of ad dollars still in linear television, we believe our CTV business has a long runway for growth given the scale, performance, and ad formats now available for buyers on PubMatic. Fourth, we're making significant progress in scaling our emerging revenue streams, which grew over 80% year over year in the third quarter. Commerce media continues to gain momentum. We continue onboarding and scaling with some of the world's leading retailers and transaction-based enterprises as they seek to activate and monetize their first-party audience intelligence. These partnerships are expanding our reach beyond the traditional impression model while generating platform fees and database monetization that accelerate revenue growth. Sell-side curation is another fast-growing emerging revenue stream. Advertisers can now serve dynamic, contextually relevant ads when viewers pause content, representing a premium, brand-safe moment that boosts engagement and yields incremental revenue for publishers. advertisers can now serve dynamic contextually relevant ads when viewers pause content representing a premium brand-safe moment that boosts engagement and yields incremental revenue for publishers What's more, with $155 billion of ad dollars still in linear television, we believe our CTV business has a long runway for growth given the scale, performance, and ad formats now available for buyers on PubMatic. what's more with $155 billion of ad dollars still in linear television we believe our ctv business has a long runway for growth given the scale performance and ad formats now available for buyers on pubmatic Fourth, we're making significant progress in scaling our emerging revenue streams, which grew over 80% year over year in the third quarter. fourth we're making significant progress in scaling our emerging revenue streams which grew over 80% year over year in the third quarter Commerce media continues to gain momentum. commerce media continues to gain momentum We continue onboarding and scaling with some of the world's leading retailers and transaction-based enterprises as they seek to activate and monetize their first-party audience intelligence. we continue onboarding and scaling with some of the world's leading retailers and transaction-based enterprises as they seek to activate and monetize their first-party audience intelligence These partnerships are expanding our reach beyond the traditional impression model while generating platform fees and database monetization that accelerate revenue growth. these partnerships are expanding our reach beyond the traditional impression model while generating platform fees and database monetization that accelerate revenue growth Sell-side curation is another fast-growing emerging revenue stream. sell-side curation is another fast-growing emerging revenue stream We expanded partnerships with leading data providers around the world. Nielsen, for example, tapped PubMatic as their exclusive sell-side partner to bring their more than 10,000 audience segments to Australian advertisers and agencies. Together with the previously mentioned AI yield solution for publishers, these initiatives drive incremental, high-margin revenue that is scaling quickly. In closing, our results demonstrate the power of our differentiated business model. We continue to innovate, diversify our business, and operate with discipline. We are leading from a position of strength. We're confident that the investments we're making today, particularly across the three layers of our AI strategy, are expanding our competitive advantage while creating sustainable, profitable growth over the mid to long term. We expanded partnerships with leading data providers around the world. we expanded partnerships with leading data providers around the world Nielsen, for example, tapped PubMatic as their exclusive sell-side partner to bring their more than 10,000 audience segments to Australian advertisers and agencies. nielsen for example tapped pubmatic as their exclusive sell-side partner to bring their more than 10,000 audience segments to australian advertisers and agencies Together with the previously mentioned AI yield solution for publishers, these initiatives drive incremental, high-margin revenue that is scaling quickly. together with the previously mentioned ai yield solution for publishers these initiatives drive incremental high-margin revenue that is scaling quickly In closing, our results demonstrate the power of our differentiated business model. in closing our results demonstrate the power of our differentiated business model We continue to innovate, diversify our business, and operate with discipline. we continue to innovate diversify our business and operate with discipline We are leading from a position of strength. we are leading from a position of strength We're confident that the investments we're making today, particularly across the three layers of our AI strategy, are expanding our competitive advantage while creating sustainable, profitable growth over the mid to long term. we're confident that the investments we're making today particularly across the three layers of our ai strategy are expanding our competitive advantage while creating sustainable profitable growth over the mid to long term All of this is happening alongside a once-in-a-generation shift in digital advertising that will likely result in the competitive landscape being reshaped, where even a modest share shift could unlock substantial, incremental, high-margin revenue for us, given our owned and operated infrastructure. PubMatic is not only positioned to adapt; we're helping define what comes next. We have the technology, the talent, and the financial foundation to build a more intelligent, efficient, and enduring business, one that creates lasting value for our customers, partners, and shareholders. Let me now turn the call over to Steve. All of this is happening alongside a once-in-a-generation shift in digital advertising that will likely result in the competitive landscape being reshaped, where even a modest share shift could unlock substantial, incremental, high-margin revenue for us, given our owned and operated infrastructure. all of this is happening alongside a once-in-a-generation shift in digital advertising that will likely result in the competitive landscape being reshaped where even a modest share shift could unlock substantial incremental high-margin revenue for us given our owned and operated infrastructure PubMatic is not only positioned to adapt; we're helping define what comes next. pubmatic is not only positioned to adapt we're helping define what comes next We have the technology, the talent, and the financial foundation to build a more intelligent, efficient, and enduring business, one that creates lasting value for our customers, partners, and shareholders. we have the technology the talent and the financial foundation to build a more intelligent efficient and enduring business one that creates lasting value for our customers partners and shareholders Let me now turn the call over to Steve. let me now turn the call over to steve

Speaker 8: Thank you, Rajeev, and welcome, everyone. We exceeded expectations on both revenue and adjusted EBITDA. This outperformance was driven by CTV, combined with stronger-than-expected year-over-year growth for online video and mobile app. We managed expenses, leveraged AI, and delivered improved margins and strong free cash flow. Stepping back, it is important to call out that our efforts to transform our business started several years ago as we anticipated the value of the ecosystem shifting to the sell side. We built an end-to-end solution that prioritizes control, performance, and transparency while recognizing the need to diversify our business and unlock new paths to monetization. Today, over 40% of our revenue is derived from CTV, mobile app, and emerging revenue streams, which represent long-term value for our business, up from less than 30% two years ago. Thank you, Rajeev, and welcome, everyone. thank you rajeev and welcome everyone We exceeded expectations on both revenue and adjusted EBITDA. we exceeded expectations on both revenue and adjusted ebitda This outperformance was driven by CTV, combined with stronger-than-expected year-over-year growth for online video and mobile app. this outperformance was driven by ctv combined with stronger-than-expected year-over-year growth for online video and mobile app We managed expenses, leveraged AI, and delivered improved margins and strong free cash flow. we managed expenses leveraged ai and delivered improved margins and strong free cash flow Stepping back, it is important to call out that our efforts to transform our business started several years ago as we anticipated the value of the ecosystem shifting to the sell side. stepping back it is important to call out that our efforts to transform our business started several years ago as we anticipated the value of the ecosystem shifting to the sell side We built an end-to-end solution that prioritizes control, performance, and transparency while recognizing the need to diversify our business and unlock new paths to monetization. we built an end-to-end solution that prioritizes control performance and transparency while recognizing the need to diversify our business and unlock new paths to monetization Today, over 40% of our revenue is derived from CTV, mobile app, and emerging revenue streams, which represent long-term value for our business, up from less than 30% two years ago. today over 40% of our revenue is derived from ctv mobile app and emerging revenue streams which represent long-term value for our business up from less than 30% two years ago Further, these efforts directly benefit our profitability and enable continued innovation and investment in the business. Turning to the quarterly results, starting with the revenue breakdown. To provide apples-for-apples comparability, year-over-year growth rates for video are adjusted to exclude political ad spend. On that basis, total omnichannel video revenues grew 21%, underscoring the strength of our premium video portfolio and growing adoption of AI-powered optimization across formats. Within this category, CTV once again grew over 50% year-over-year, driven by the success of our Live Sports marketplace and growth in programmatic guarantee deals across expanding buyer relationships. We monetized CTV inventory from over 90% of the top 30 global streamers. Omnichannel video contributed approximately 38% of total revenue in Q3 2025. Emerging revenue streams continued their high-growth trajectory, growing over 80% year-over-year while scaling to 10% of total revenue in the third quarter. Further, these efforts directly benefit our profitability and enable continued innovation and investment in the business. further these efforts directly benefit our profitability and enable continued innovation and investment in the business Turning to the quarterly results, starting with the revenue breakdown. turning to the quarterly results starting with the revenue breakdown To provide apples-for-apples comparability, year-over-year growth rates for video are adjusted to exclude political ad spend. to provide apples-for-apples comparability year-over-year growth rates for video are adjusted to exclude political ad spend On that basis, total omnichannel video revenues grew 21%, underscoring the strength of our premium video portfolio and growing adoption of AI-powered optimization across formats. on that basis total omnichannel video revenues grew 21% underscoring the strength of our premium video portfolio and growing adoption of ai-powered optimization across formats Within this category, CTV once again grew over 50% year-over-year, driven by the success of our Live Sports marketplace and growth in programmatic guarantee deals across expanding buyer relationships. within this category ctv once again grew over 50% year-over-year driven by the success of our live sports marketplace and growth in programmatic guarantee deals across expanding buyer relationships We monetized CTV inventory from over 90% of the top 30 global streamers. we monetized ctv inventory from over 90% of the top 30 global streamers Omnichannel video contributed approximately 38% of total revenue in Q3 2025. omnichannel video contributed approximately 38% of total revenue in q3 2025 Emerging revenue streams continued their high-growth trajectory, growing over 80% year-over-year while scaling to 10% of total revenue in the third quarter. emerging revenue streams continued their high-growth trajectory growing over 80% year-over-year while scaling to 10% of total revenue in the third quarter This growth represents incremental, durable revenue streams beyond our core sell-side platform capabilities. Most notably, year-over-year revenue from Activate grew over 100%, and our curation and data business Connect grew over 40%. Based on the results we are seeing, we will continue to invest for incremental growth opportunities that diversify our revenue, like the new AI-driven product capabilities for publishers that are already showing meaningful traction. The growth across these key secular areas helped offset the impact from lower spend by a large DSP we identified last quarter. Following our optimizations and integration adjustments by SPO partners, spend stabilized from this DSP in August and September, resulting in lower but steady run rate. As anticipated, display revenue was down -5% year-over-year and was the format most affected by the DSP impact. Excluding this DSP, display grew in the low single-digit percentages. This growth represents incremental, durable revenue streams beyond our core sell-side platform capabilities. this growth represents incremental durable revenue streams beyond our core sell-side platform capabilities Most notably, year-over-year revenue from Activate grew over 100%, and our curation and data business Connect grew over 40%. most notably year-over-year revenue from activate grew over 100% and our curation and data business connect grew over 40% Based on the results we are seeing, we will continue to invest for incremental growth opportunities that diversify our revenue, like the new AI-driven product capabilities for publishers that are already showing meaningful traction. based on the results we are seeing we will continue to invest for incremental growth opportunities that diversify our revenue like the new ai-driven product capabilities for publishers that are already showing meaningful traction The growth across these key secular areas helped offset the impact from lower spend by a large DSP we identified last quarter. the growth across these key secular areas helped offset the impact from lower spend by a large dsp we identified last quarter Following our optimizations and integration adjustments by SPO partners, spend stabilized from this DSP in August and September, resulting in lower but steady run rate. following our optimizations and integration adjustments by spo partners spend stabilized from this dsp in august and september resulting in lower but steady run rate As anticipated, display revenue was down -5% year-over-year and was the format most affected by the DSP impact. as anticipated display revenue was down -5% year-over-year and was the format most affected by the dsp impact Excluding this DSP, display grew in the low single-digit percentages. excluding this dsp display grew in the low single-digit percentages With respect to Q3 ad spend across the top 10 verticals, in aggregate, they grew in the single-digit percentages year-over-year. Health and fitness, personal finance, and technology each increased over 15%. We saw softer trends in business and in automotive, which declined single-digit percentages in the quarter. Ad spend from our mid-tier DSP partners grew over 25% year-over-year in Q3. Importantly, our AI-driven buyer platform is resonating well with performance-focused buyers across CTV, mobile app, and e-commerce verticals, and we believe lays the foundation for sustainable growth in the quarters ahead. We anticipate that new buyer relationships like Blis and MNTN will bring incremental ad demand across our wide portfolio of verticals. Regionally, APAC and EMEA revenues grew +12% and +7% respectively, offsetting a -14% decline in the Americas, which was primarily due to spend declines from the large DSP buyer. With respect to Q3 ad spend across the top 10 verticals, in aggregate, they grew in the single-digit percentages year-over-year. with respect to q3 ad spend across the top 10 verticals in aggregate they grew in the single-digit percentages year-over-year Health and fitness, personal finance, and technology each increased over 15%. health and fitness personal finance and technology each increased over 15% We saw softer trends in business and in automotive, which declined single-digit percentages in the quarter. we saw softer trends in business and in automotive which declined single-digit percentages in the quarter Ad spend from our mid-tier DSP partners grew over 25% year-over-year in Q3. ad spend from our mid-tier dsp partners grew over 25% year-over-year in q3 Importantly, our AI-driven buyer platform is resonating well with performance-focused buyers across CTV, mobile app, and e-commerce verticals, and we believe lays the foundation for sustainable growth in the quarters ahead. importantly our ai-driven buyer platform is resonating well with performance-focused buyers across ctv mobile app and e-commerce verticals and we believe lays the foundation for sustainable growth in the quarters ahead We anticipate that new buyer relationships like Blis and MNTN will bring incremental ad demand across our wide portfolio of verticals. we anticipate that new buyer relationships like blis and mntn will bring incremental ad demand across our wide portfolio of verticals Regionally, APAC and EMEA revenues grew +12% and +7% respectively, offsetting a -14% decline in the Americas, which was primarily due to spend declines from the large DSP buyer. regionally apac and emea revenues grew +12% and +7% respectively offsetting a -14% decline in the americas which was primarily due to spend declines from the large dsp buyer Moving on to our operating priorities, we continue to invest and reallocate resources to the highest return areas of the business. As Rajeev noted, we're seeing strong growth across our DSP mix and within Activate as customers increase usage and new products drive incremental revenue. Our focus on generative AI is also improving operational agility, streamlining internal workflows, and allowing us to redirect resources towards growth initiatives without adding structural cost. This efficiency has allowed us to expand our sales team, focus on buyers, and grow spend from existing partners and onboard new partners. We are making great progress integrating with the fast-growing mid-to-long tail segment, and so far in 2025, we've added over 25 new DSP partners. All of these efforts help us counter the near-term headwinds from legacy DSPs and further diversify beyond the top five, as I described last quarter. Moving on to our operating priorities, we continue to invest and reallocate resources to the highest return areas of the business. moving on to our operating priorities we continue to invest and reallocate resources to the highest return areas of the business As Rajeev noted, we're seeing strong growth across our DSP mix and within Activate as customers increase usage and new products drive incremental revenue. as rajeev noted we're seeing strong growth across our dsp mix and within activate as customers increase usage and new products drive incremental revenue Our focus on generative AI is also improving operational agility, streamlining internal workflows, and allowing us to redirect resources towards growth initiatives without adding structural cost. our focus on generative ai is also improving operational agility streamlining internal workflows and allowing us to redirect resources towards growth initiatives without adding structural cost This efficiency has allowed us to expand our sales team, focus on buyers, and grow spend from existing partners and onboard new partners. this efficiency has allowed us to expand our sales team focus on buyers and grow spend from existing partners and onboard new partners We are making great progress integrating with the fast-growing mid-to-long tail segment, and so far in 2025, we've added over 25 new DSP partners. we are making great progress integrating with the fast-growing mid-to-long tail segment and so far in 2025 we've added over 25 new dsp partners All of these efforts help us counter the near-term headwinds from legacy DSPs and further diversify beyond the top five, as I described last quarter. all of these efforts help us counter the near-term headwinds from legacy dsps and further diversify beyond the top five as i described last quarter Core to our long-term strategy is being nimble in identifying opportunities and then executing rapidly to capitalize on them. We have achieved this while managing our costs and consistently delivering profits in many different environments. The foundation of this approach is expanding our capacity while driving down our unit costs. We process approximately 87 trillion gross impressions in Q3, a 24% increase over last year, and a 12% sequential gain versus Q2. Nearly 60% of total impressions were from CTV and mobile app inventory, highlighting our increasing focus on high engagement channels. Further, the increase in impressions is highly leveraged over a fixed cost base. Over a trailing 12-month basis, unit costs in the third quarter declined 19% over the comparable prior year period. In terms of operating expenses, our early investments in AI to drive operational efficiency are yielding measurable results. Core to our long-term strategy is being nimble in identifying opportunities and then executing rapidly to capitalize on them. core to our long-term strategy is being nimble in identifying opportunities and then executing rapidly to capitalize on them We have achieved this while managing our costs and consistently delivering profits in many different environments. we have achieved this while managing our costs and consistently delivering profits in many different environments The foundation of this approach is expanding our capacity while driving down our unit costs. the foundation of this approach is expanding our capacity while driving down our unit costs We process approximately 87 trillion gross impressions in Q3, a 24% increase over last year, and a 12% sequential gain versus Q2. we process approximately 87 trillion gross impressions in q3 a 24% increase over last year and a 12% sequential gain versus q2 Nearly 60% of total impressions were from CTV and mobile app inventory, highlighting our increasing focus on high engagement channels. nearly 60% of total impressions were from ctv and mobile app inventory highlighting our increasing focus on high engagement channels Further, the increase in impressions is highly leveraged over a fixed cost base. further the increase in impressions is highly leveraged over a fixed cost base Over a trailing 12-month basis, unit costs in the third quarter declined 19% over the comparable prior year period. over a trailing 12-month basis unit costs in the third quarter declined 19% over the comparable prior year period In terms of operating expenses, our early investments in AI to drive operational efficiency are yielding measurable results. in terms of operating expenses our early investments in ai to drive operational efficiency are yielding measurable results Year to date, every quarter, we have successfully kept our total operating expenses roughly flat at $51 million, while realigning investments to the areas that deliver the strongest ROI. This allows us to scale profitably, even as we invest ahead of growth. For example, we increased our buyer-focused sales team by 19% in Q3 compared to the prior year, while the overall total headcount was flat. This disciplined approach enables us to deliver our 38th straight quarter of adjusted EBITDA profitability. This is a track record few companies in our sector can match. Q3 adjusted EBITDA was $11.2 million, or 16% margin, which included foreign exchange costs of approximately $1 million due to the weakening US dollar over the quarter. US GAAP net loss was -$6.5 million, or -$0.14 per diluted share. Moving to cash and our capital allocation, our balance sheet remains a core strategic advantage. Year to date, every quarter, we have successfully kept our total operating expenses roughly flat at $51 million, while realigning investments to the areas that deliver the strongest ROI. year to date every quarter we have successfully kept our total operating expenses roughly flat at $51 million while realigning investments to the areas that deliver the strongest roi This allows us to scale profitably, even as we invest ahead of growth. this allows us to scale profitably even as we invest ahead of growth For example, we increased our buyer-focused sales team by 19% in Q3 compared to the prior year, while the overall total headcount was flat. for example we increased our buyer-focused sales team by 19% in q3 compared to the prior year while the overall total headcount was flat This disciplined approach enables us to deliver our 38th straight quarter of adjusted EBITDA profitability. this disciplined approach enables us to deliver our 38th straight quarter of adjusted ebitda profitability This is a track record few companies in our sector can match. this is a track record few companies in our sector can match Q3 adjusted EBITDA was $11.2 million, or 16% margin, which included foreign exchange costs of approximately $1 million due to the weakening US dollar over the quarter. q3 adjusted ebitda was $11.2 million or 16% margin which included foreign exchange costs of approximately $1 million due to the weakening us dollar over the quarter US GAAP net loss was - $6.5 million, or - $0.14 per diluted share. us gaap net loss was - $6.5 million or - $0.14 per diluted share Moving to cash and our capital allocation, our balance sheet remains a core strategic advantage. moving to cash and our capital allocation our balance sheet remains a core strategic advantage In the third quarter, we generated $32.4 million in net operating cash flows and free cash flow of $22.8 million. In addition to efficient working capital management, there were two other factors that improved our cash flow for this period. The DSP that had made changes in mid-2024 returned to growth in Q3, which favorably improved our DSOs. There was also a reduction in cash taxes paid because of the new federal tax bill that went into effect earlier this year. To underscore our long-term ability to generate cash, since the beginning of 2021 through Q3, we have generated over $390 million in net cash from operations and more than $215 million in free cash flow. We ended the quarter with $136.5 million in cash and zero debt. Given the strength, we continue to deploy our capital to maximize shareholder value. In the third quarter, we generated $32.4 million in net operating cash flows and free cash flow of $22.8 million. in the third quarter we generated $32.4 million in net operating cash flows and free cash flow of $22.8 million In addition to efficient working capital management, there were two other factors that improved our cash flow for this period. in addition to efficient working capital management there were two other factors that improved our cash flow for this period The DSP that had made changes in mid-2024 returned to growth in Q3, which favorably improved our DSOs. the dsp that had made changes in mid-2024 returned to growth in q3 which favorably improved our dsos There was also a reduction in cash taxes paid because of the new federal tax bill that went into effect earlier this year. there was also a reduction in cash taxes paid because of the new federal tax bill that went into effect earlier this year To underscore our long-term ability to generate cash, since the beginning of 2021 through Q3, we have generated over $390 million in net cash from operations and more than $215 million in free cash flow. to underscore our long-term ability to generate cash since the beginning of 2021 through q3 we have generated over $390 million in net cash from operations and more than $215 million in free cash flow We ended the quarter with $136.5 million in cash and zero debt. we ended the quarter with $136.5 million in cash and zero debt Given the strength, we continue to deploy our capital to maximize shareholder value. given the strength we continue to deploy our capital to maximize shareholder value Since the inception of our repurchase program in February 2023 through the end of Q3, we have bought back 12.4 million Class A common shares for $180.6 million. We have $94.4 million remaining in our repurchase program authorized to the end of 2026. This program, combined with our ongoing investments in AI innovation, reflects a balanced approach to capital allocation and a commitment to long-term shareholder value. Turning to our Q4 outlook, we anticipate strong growth in secular areas of the business, including double-digit growth for CTV when excluding political advertising and 30%+ growth for emerging revenues. As a reminder, Q4 2024 political advertising represented about 12% of revenue, nearly 80% of which was via CTV. Since the inception of our repurchase program in February 2023 through the end of Q3, we have bought back 12.4 million Class A common shares for $180.6 million. since the inception of our repurchase program in february 2023 through the end of q3 we have bought back 12.4 million class a common shares for $180.6 million We have $94.4 million remaining in our repurchase program authorized to the end of 2026. we have $94.4 million remaining in our repurchase program authorized to the end of 2026 This program, combined with our ongoing investments in AI innovation, reflects a balanced approach to capital allocation and a commitment to long-term shareholder value. this program combined with our ongoing investments in ai innovation reflects a balanced approach to capital allocation and a commitment to long-term shareholder value Turning to our Q4 outlook, we anticipate strong growth in secular areas of the business, including double-digit growth for CTV when excluding political advertising and 30%+ growth for emerging revenues. turning to our q4 outlook we anticipate strong growth in secular areas of the business including double-digit growth for ctv when excluding political advertising and 30%+ growth for emerging revenues As a reminder, Q4 2024 political advertising represented about 12% of revenue, nearly 80% of which was via CTV. as a reminder q4 2024 political advertising represented about 12% of revenue nearly 80% of which was via ctv In terms of the latest trends, in October, the typical holiday seasonal uptick thus far has been relatively muted for some consumer discretionary ad verticals such as food and drink and arts and entertainment. Accordingly, we are taking a prudent approach to guidance based on the latest trends. We expect Q4 revenue to be in the range of $73 million-$77 million. As it relates to the large DSP that declined in July, we are assuming its associated revenue to be flat in Q4 relative to Q3. We anticipate Q4 operating expenses to be similar to Q3's level as AI-driven efficiencies continue to offset selective investments in our sales team. Q4 adjusted EBITDA is projected to be in the range of $19 million-$21 million, which also factors in continued weakness of the US dollar. In terms of the latest trends, in October, the typical holiday seasonal uptick thus far has been relatively muted for some consumer discretionary ad verticals such as food and drink and arts and entertainment. in terms of the latest trends in october the typical holiday seasonal uptick thus far has been relatively muted for some consumer discretionary ad verticals such as food and drink and arts and entertainment Accordingly, we are taking a prudent approach to guidance based on the latest trends. accordingly we are taking a prudent approach to guidance based on the latest trends We expect Q4 revenue to be in the range of $73 million-$77 million. we expect q4 revenue to be in the range of $73 million-$77 million As it relates to the large DSP that declined in July, we are assuming its associated revenue to be flat in Q4 relative to Q3. as it relates to the large dsp that declined in july we are assuming its associated revenue to be flat in q4 relative to q3 We anticipate Q4 operating expenses to be similar to Q3's level as AI-driven efficiencies continue to offset selective investments in our sales team. we anticipate q4 operating expenses to be similar to q3's level as ai-driven efficiencies continue to offset selective investments in our sales team Q4 adjusted EBITDA is projected to be in the range of $19 million-$21 million, which also factors in continued weakness of the US dollar. q4 adjusted ebitda is projected to be in the range of $19 million-$21 million which also factors in continued weakness of the us dollar For the full year, we expect revenue to be in the range of $276 million-$280 million and adjusted EBITDA to be in the range of $53 million-$55 million, inclusive of more than $5 million of estimated negative FX impact. We are maintaining our full-year CapEx projection at $15 million, which is a year-over-year reduction made possible by AI-driven optimization efforts. In closing, our Q3 results highlighted the durability of our financial model and validated the progress we are making behind our business transformation. Looking ahead, we're confident in our robust, multifaceted strategy. Our AI-first end-to-end platform is driving measurable results. We're adding new revenue streams, expanding our SPO relationships, and rapidly diversifying our DSPs in line with future growth opportunities in commerce, performance CTV, and mobile app. For the full year, we expect revenue to be in the range of $276 million-$280 million and adjusted EBITDA to be in the range of $53 million-$55 million, inclusive of more than $5 million of estimated negative FX impact. for the full year we expect revenue to be in the range of $276 million-$280 million and adjusted ebitda to be in the range of $53 million-$55 million inclusive of more than $5 million of estimated negative fx impact We are maintaining our full-year CapEx projection at $15 million, which is a year-over-year reduction made possible by AI-driven optimization efforts. we are maintaining our full-year capex projection at $15 million which is a year-over-year reduction made possible by ai-driven optimization efforts In closing, our Q3 results highlighted the durability of our financial model and validated the progress we are making behind our business transformation. in closing our q3 results highlighted the durability of our financial model and validated the progress we are making behind our business transformation Looking ahead, we're confident in our robust, multifaceted strategy. looking ahead we're confident in our robust multifaceted strategy Our AI-first end-to-end platform is driving measurable results. our ai-first end-to-end platform is driving measurable results We're adding new revenue streams, expanding our SPO relationships, and rapidly diversifying our DSPs in line with future growth opportunities in commerce, performance CTV, and mobile app. we're adding new revenue streams expanding our spo relationships and rapidly diversifying our dsps in line with future growth opportunities in commerce performance ctv and mobile app With respect to potential remedies in the Google AdTech antitrust trial, we continue to believe that any remedies that level the competitive playing field, whether structural, behavioral, or both, will benefit the open internet and PubMatic. In 2026 and beyond, as revenue growth reaccelerates, we anticipate margin expansion at both the gross and adjusted EBITDA levels because of our efficient and leveraged business. Our decade-plus experience owning and operating our global private cloud infrastructure has given us several advantages. First, it has enabled us to expand capacity while at the same time progressively reduce our rate of CapEx and drive down unit costs through optimization initiatives. Second, it's allowed us to invest early on in next-generation technology with NVIDIA. Today, our infrastructure is a clear differentiator with investments well ahead of our peers that will continue to drive efficiencies and business impact. With respect to potential remedies in the Google AdTech antitrust trial, we continue to believe that any remedies that level the competitive playing field, whether structural, behavioral, or both, will benefit the open internet and PubMatic. with respect to potential remedies in the google adtech antitrust trial we continue to believe that any remedies that level the competitive playing field whether structural behavioral or both will benefit the open internet and pubmatic In 2026 and beyond, as revenue growth reaccelerates, we anticipate margin expansion at both the gross and adjusted EBITDA levels because of our efficient and leveraged business. in 2026 and beyond as revenue growth reaccelerates we anticipate margin expansion at both the gross and adjusted ebitda levels because of our efficient and leveraged business Our decade-plus experience owning and operating our global private cloud infrastructure has given us several advantages. our decade-plus experience owning and operating our global private cloud infrastructure has given us several advantages First, it has enabled us to expand capacity while at the same time progressively reduce our rate of CapEx and drive down unit costs through optimization initiatives. first it has enabled us to expand capacity while at the same time progressively reduce our rate of capex and drive down unit costs through optimization initiatives Second, it's allowed us to invest early on in next-generation technology with NVIDIA. second it's allowed us to invest early on in next-generation technology with nvidia Today, our infrastructure is a clear differentiator with investments well ahead of our peers that will continue to drive efficiencies and business impact. today our infrastructure is a clear differentiator with investments well ahead of our peers that will continue to drive efficiencies and business impact We are also continuing to leverage AI to drive efficiency and increase our team's productivity. We anticipate total headcount will remain relatively flat in 2026, while investments supporting our fastest-growing areas of our business will increase through internal reallocations. Finally, we are also laser-focused on free cash flow generation and aim to increase cash flow next year supported by further working capital improvements and incremental AI-driven efficiencies. Collectively, we believe our efforts will drive a return to double-digit revenue growth in the future. With that, I'll turn the call over to Stacie for questions. We are also continuing to leverage AI to drive efficiency and increase our team's productivity. we are also continuing to leverage ai to drive efficiency and increase our team's productivity We anticipate total headcount will remain relatively flat in 2026, while investments supporting our fastest-growing areas of our business will increase through internal reallocations. we anticipate total headcount will remain relatively flat in 2026 while investments supporting our fastest-growing areas of our business will increase through internal reallocations Finally, we are also laser-focused on free cash flow generation and aim to increase cash flow next year supported by further working capital improvements and incremental AI-driven efficiencies. finally we are also laser-focused on free cash flow generation and aim to increase cash flow next year supported by further working capital improvements and incremental ai-driven efficiencies Collectively, we believe our efforts will drive a return to double-digit revenue growth in the future. collectively we believe our efforts will drive a return to double-digit revenue growth in the future With that, I'll turn the call over to Stacie for questions. with that i'll turn the call over to stacie for questions

Speaker 5: Thank you, Steve. As a reminder, you can ask a question by raising your hand located on the dashboard, or if you're on your phone, please press star nine. In the interest of time, we ask that you please limit your question to one and one follow-up. With that, the first question comes from Andrew Marok at Raymond James. Please go ahead, Andrew. Thank you, Steve. thank you steve As a reminder, you can ask a question by raising your hand located on the dashboard, or if you're on your phone, please press star nine. as a reminder you can ask a question by raising your hand located on the dashboard or if you're on your phone please press star nine In the interest of time, we ask that you please limit your question to one and one follow-up. in the interest of time we ask that you please limit your question to one and one follow-up With that, the first question comes from Andrew Marok at Raymond James. with that the first question comes from andrew marok at raymond james Please go ahead, Andrew. please go ahead andrew

Speaker 7: Hi, can you hear me now? Hi, can you hear me now? hi can you hear me now

Speaker 1: Yes, we can. Yes, we can. yes we can

Speaker 7: Okay, thanks. Rajeev, if you could maybe expand a bit on the topic of SPO and some of the recent moves companies like The Trade Desk have made, kind of leaning into OpenPath, launching OpenAds, and declaring all SSPs as resellers. On the other hand, the two of you are collaborating on that DLID management API. I guess since we last spoke last quarter, how would you characterize the state of play there? I have a follow-up for Steve. Okay, thanks. okay thanks Rajeev, if you could maybe expand a bit on the topic of SPO and some of the recent moves companies like The Trade Desk have made, kind of leaning into OpenPath, launching OpenAds, and declaring all SSPs as resellers. rajeev if you could maybe expand a bit on the topic of spo and some of the recent moves companies like the trade desk have made kind of leaning into openpath launching openads and declaring all ssps as resellers On the other hand, the two of you are collaborating on that DLID management API. on the other hand the two of you are collaborating on that dlid management api I guess since we last spoke last quarter, how would you characterize the state of play there? i guess since we last spoke last quarter how would you characterize the state of play there I have a follow-up for Steve. i have a follow-up for steve

Speaker 1: Sure. Yeah, thanks, Andrew, for the question. Yeah, let me first just clarify on the reseller kind of noise that's out there. The industry standard definition, which has been with the industry for over a decade, is that a reseller is the term for when inventory flows from a publisher to an intermediary and then to an SSP. An intermediary can be another exchange or some sort of aggregator of inventory. In contrast, direct is when inventory flows from the publisher directly to the SSP. PubMatic is a platform for direct inventory monetization. Reselling is not our business. We are a direct connection to publishers, and that's how we're able to provide significant incremental value to publishers and to buyers. I think it's pretty clear we provide value in ways that DSPs do not. Yield optimization is a key example of that. Sure. sure Yeah, thanks, Andrew, for the question. yeah thanks andrew for the question Yeah, let me first just clarify on the reseller kind of noise that's out there. yeah let me first just clarify on the reseller kind of noise that's out there The industry standard definition, which has been with the industry for over a decade, is that a reseller is the term for when inventory flows from a publisher to an intermediary and then to an SSP. the industry standard definition which has been with the industry for over a decade is that a reseller is the term for when inventory flows from a publisher to an intermediary and then to an ssp An intermediary can be another exchange or some sort of aggregator of inventory. an intermediary can be another exchange or some sort of aggregator of inventory In contrast, direct is when inventory flows from the publisher directly to the SSP. in contrast direct is when inventory flows from the publisher directly to the ssp PubMatic is a platform for direct inventory monetization. pubmatic is a platform for direct inventory monetization Reselling is not our business. reselling is not our business We are a direct connection to publishers, and that's how we're able to provide significant incremental value to publishers and to buyers. we are a direct connection to publishers and that's how we're able to provide significant incremental value to publishers and to buyers I think it's pretty clear we provide value in ways that DSPs do not. i think it's pretty clear we provide value in ways that dsps do not Yield optimization is a key example of that. yield optimization is a key example of that Trade Desk, in particular, has been very clear that they are not in the yield optimization business. A publisher needs to have a yield function in place in order to maximize their revenue, which is core to what we do. At the same time, we are also providing value to Trade Desk and others, right? Who, as you noted, Andrew, they are relying on us to improve deals with our price discovery and provisioning API integration announcement. I think what you can see here is that the ecosystem is multifaceted, certainly complex. Trade Desk, in particular, has been very clear that they are not in the yield optimization business. trade desk in particular has been very clear that they are not in the yield optimization business A publisher needs to have a yield function in place in order to maximize their revenue, which is core to what we do. a publisher needs to have a yield function in place in order to maximize their revenue which is core to what we do At the same time, we are also providing value to Trade Desk and others, right? at the same time, we are also providing value to trade desk and others right Who, as you noted, Andrew, they are relying on us to improve deals with our price discovery and provisioning API integration announcement. who as you noted andrew, they are relying on us to improve deals with our price discovery and provisioning api integration announcement I think what you can see here is that the ecosystem is multifaceted, certainly complex. i think what you can see here is that the ecosystem is multifaceted certainly complex Our focus is really on taking that direct integrations with publishers that we have, all of that inventory flowing through our platform, the data, the audiences, and really creating value for buyers in such a way that they're able to generate increased return on ad spend, increased ROI, which causes them to then spend more on our platform. That, in turn, generates higher yield for our publishers. That is really the core and the focus that we have. Our focus is really on taking that direct integrations with publishers that we have, all of that inventory flowing through our platform, the data, the audiences, and really creating value for buyers in such a way that they're able to generate increased return on ad spend, increased ROI, which causes them to then spend more on our platform. our focus is really on taking that direct integrations with publishers that we have all of that inventory flowing through our platform the data the audiences and really creating value for buyers in such a way that they're able to generate increased return on ad spend increased roi which causes them to then spend more on our platform That, in turn, generates higher yield for our publishers. that in turn generates higher yield for our publishers That is really the core and the focus that we have. that is really the core and the focus that we have What we're finding with Activate and other capabilities on our platform, a lot of the focus on AI that we talked about in the prepared remarks, is that we have a lot of opportunity coming at it from the sell side of the ecosystem based on the auctions and the data and our close integrations with publishers to be able to add value to both the buyers and to the publishers. What we're finding with Activate and other capabilities on our platform, a lot of the focus on AI that we talked about in the prepared remarks, is that we have a lot of opportunity coming at it from the sell side of the ecosystem based on the auctions and the data and our close integrations with publishers to be able to add value to both the buyers and to the publishers. what we're finding with activate and other capabilities on our platform a lot of the focus on ai that we talked about in the prepared remarks is that we have a lot of opportunity coming at it from the sell side of the ecosystem based on the auctions and the data and our close integrations with publishers to be able to add value to both the buyers and to the publishers

Speaker 7: Great. Thank you for that. Maybe Steve, if I could, on the COGS point, can you just expand a little bit on the ability to drive that unit cost leverage there and how we should think about that line either on an absolute dollar basis or percentage of revenue going forward? Thank you. Great. great Thank you for that. thank you for that Maybe Steve, if I could, on the COGS point, can you just expand a little bit on the ability to drive that unit cost leverage there and how we should think about that line either on an absolute dollar basis or percentage of revenue going forward? maybe steve if i could on the cogs point can you just expand a little bit on the ability to drive that unit cost leverage there and how we should think about that line either on an absolute dollar basis or percentage of revenue going forward Thank you. thank you

Speaker 8: Sure. Good to reconnect, Andrew. From our perspective, we for many years have been focused on owning and operating our own infrastructure and have done it very successfully, as you noted, driving down unit costs. We've consistently done that for a decade, often double-digit unit growth reductions. From our perspective, 2026 is no different. Other than that, we've continued to leverage AI more and more to drive optimizations. As you saw in our prepared comments, we increased the number of gross impressions processed by over 20% in the quarter. We did not do that by just throwing a lot of CapEx at it. We did it through software and AI. That basic process is going to continue, but we have more tools and more ability to do that. Sure. sure Good to reconnect, Andrew. good to reconnect andrew From our perspective, we for many years have been focused on owning and operating our own infrastructure and have done it very successfully, as you noted, driving down unit costs. from our perspective we for many years have been focused on owning and operating our own infrastructure and have done it very successfully as you noted driving down unit costs We've consistently done that for a decade, often double-digit unit growth reductions. we've consistently done that for a decade often double-digit unit growth reductions From our perspective, 2026 is no different. from our perspective 2026 is no different Other than that, we've continued to leverage AI more and more to drive optimizations. other than that we've continued to leverage ai more and more to drive optimizations As you saw in our prepared comments, we increased the number of gross impressions processed by over 20% in the quarter. as you saw in our prepared comments we increased the number of gross impressions processed by over 20% in the quarter We did not do that by just throwing a lot of CapEx at it. we did not do that by just throwing a lot of capex at it We did it through software and AI. we did it through software and ai That basic process is going to continue, but we have more tools and more ability to do that. that basic process is going to continue but we have more tools and more ability to do that I would expect in the future, as our revenue reaccelerates, we're going to increase our gross margin. It's going to be a function of revenue and managing our costs. I would expect in the future, as our revenue reaccelerates, we're going to increase our gross margin. i would expect in the future as our revenue reaccelerates we're going to increase our gross margin It's going to be a function of revenue and managing our costs. it's going to be a function of revenue and managing our costs

Speaker 5: Great. Thanks, Steve. Our next question comes from Matt Swanson at RBC. Please go ahead, Matt. Great. great Thanks, Steve. thanks steve Our next question comes from Matt Swanson at RBC. our next question comes from matt swanson at rbc Please go ahead, Matt. please go ahead matt

Speaker 9: Yeah, great. Thank you, guys, for taking my question. Obviously, a super strong quarter for CTV growth ex-political. You called out a lot of the drivers there, right? The great growth in the Live Sports, maybe some of that expansion of mid-market DSPs and the 90% coverage now of top 30 streamers. Could you give us kind of a little more color, maybe over the past year, just what sort of evolution you've seen in the CTV environment and kind of how you're investing to grow or continue to grow next year? Yeah, great. yeah great Thank you, guys, for taking my question. thank you guys for taking my question Obviously, a super strong quarter for CTV growth ex-political. obviously a super strong quarter for ctv growth ex-political You called out a lot of the drivers there, right? you called out a lot of the drivers there right The great growth in the Live Sports, maybe some of that expansion of mid-market DSPs and the 90% coverage now of top 30 streamers. the great growth in the live sports maybe some of that expansion of mid-market dsps and the 90% coverage now of top 30 streamers Could you give us kind of a little more color, maybe over the past year, just what sort of evolution you've seen in the CTV environment and kind of how you're investing to grow or continue to grow next year? could you give us kind of a little more color maybe over the past year just what sort of evolution you've seen in the ctv environment and kind of how you're investing to grow or continue to grow next year

Speaker 1: Sure. Yeah. Thank you, Matt, for the question. CTV has been obviously a very strong growth area for us, and we've seen tremendous scale, really building from zero organically several years ago to where we are today. I think there's a couple of trends that are happening. First of all, we are working with more and more premium publishers, right? This quarter, we shared over 90% of the top 30 globally. We added some new FAST streamers, Tubi, Future Today, and Local Now. That builds on our base of premium inventory from existing publishers like Roku and Paramount and NBC. At the same time, there's huge growth in the advertiser mix in CTV. Whereas traditional TV has a couple hundred, maybe 500 advertisers in aggregate, that are the lion's share of ad budgets. Sure. sure Yeah. yeah Thank you, Matt, for the question. thank you matt for the question CTV has been obviously a very strong growth area for us, and we've seen tremendous scale, really building from zero organically several years ago to where we are today. ctv has been obviously a very strong growth area for us and we've seen tremendous scale really building from zero organically several years ago to where we are today I think there's a couple of trends that are happening. i think there's a couple of trends that are happening First of all, we are working with more and more premium publishers, right? first of all we are working with more and more premium publishers right This quarter, we shared over 90% of the top 30 globally. this quarter we shared over 90% of the top 30 globally We added some new FAST streamers, Tubi, Future Today, and Local Now. we added some new fast streamers tubi future today and local now That builds on our base of premium inventory from existing publishers like Roku and Paramount and NBC. that builds on our base of premium inventory from existing publishers like roku and paramount and nbc At the same time, there's huge growth in the advertiser mix in CTV. at the same time there's huge growth in the advertiser mix in ctv Whereas traditional TV has a couple hundred, maybe 500 advertisers in aggregate, that are the lion's share of ad budgets. whereas traditional tv has a couple hundred maybe 500 advertisers in aggregate that are the lion's share of ad budgets With streaming TV, what we see is that there's tens of thousands of advertisers reaching now into the hundreds of thousands, and that number is growing very quickly. As we have focused on going after mid-market-focused DSPs, many of them are focused on small and medium businesses like MNTN or TV Scientific, or they're focused on performance advertising, again, some of those same folks. There's a lot more dollars that we're able to bring onto the platform. That is creating another layer of growth. Third, we've really leaned into AI, as you could tell from the past calls and also the prepared remarks today, at all three layers of the technology stack. I think that's really unlocking incremental budgets as well. Live Sports is just one example of that. With streaming TV, what we see is that there's tens of thousands of advertisers reaching now into the hundreds of thousands, and that number is growing very quickly. with streaming tv what we see is that there's tens of thousands of advertisers reaching now into the hundreds of thousands and that number is growing very quickly As we have focused on going after mid-market-focused DSPs, many of them are focused on small and medium businesses like MNTN or TV Scientific, or they're focused on performance advertising, again, some of those same folks. as we have focused on going after mid-market-focused dsps many of them are focused on small and medium businesses like mntn or tv scientific or they're focused on performance advertising again some of those same folks There's a lot more dollars that we're able to bring onto the platform. there's a lot more dollars that we're able to bring onto the platform That is creating another layer of growth. that is creating another layer of growth Third, we've really leaned into AI, as you could tell from the past calls and also the prepared remarks today, at all three layers of the technology stack. third we've really leaned into ai as you could tell from the past calls and also the prepared remarks today at all three layers of the technology stack I think that's really unlocking incremental budgets as well. i think that's really unlocking incremental budgets as well Live Sports is just one example of that. live sports is just one example of that Actually, one of our first generative AI creative tools we launched last year, which was focused on helping publishers bring in more political ad spend by scanning political ad creatives. We are continuing to apply that technology for other use cases. There are a lot of other verticals like pharma, for instance, health and wellness, where there are sensitive categories, but we are able to generate unlock of spend through AI. We think it is a really, obviously, exciting area for us. We are going to continue to focus global investment in this area. As we bring more buyers onto our platform via Activate, via our curation capabilities, and now with the AdCP launch, we think there is a long runway of growth ahead of us for CTV. Actually, one of our first generative AI creative tools we launched last year, which was focused on helping publishers bring in more political ad spend by scanning political ad creatives. actually one of our first generative ai creative tools we launched last year which was focused on helping publishers bring in more political ad spend by scanning political ad creatives We are continuing to apply that technology for other use cases. we are continuing to apply that technology for other use cases There are a lot of other verticals like pharma, for instance, health and wellness, where there are sensitive categories, but we are able to generate unlock of spend through AI. there are a lot of other verticals like pharma for instance health and wellness where there are sensitive categories but we are able to generate unlock of spend through ai We think it is a really, obviously, exciting area for us. We are going to continue to focus global investment in this area. we think it is a really obviously exciting area for us. we are going to continue to focus global investment in this area As we bring more buyers onto our platform via Activate, via our curation capabilities, and now with the AdCP launch, we think there is a long runway of growth ahead of us for CTV. as we bring more buyers onto our platform via activate via our curation capabilities and now with the adcp launch we think there is a long runway of growth ahead of us for ctv

Speaker 9: Yeah, that's super helpful. Maybe following up on your commentary on GenAI and some of the agentic, obviously, we've been hearing a lot from a lot of players in the space around these two themes. Can you just talk a little bit about kind of the right to win and how you help your stakeholders understand the value creation versus the noise around these themes? Maybe, as you said, with the AdCP, it's not about winning yourselves, but creating a tame expanding ecosystem around those themes. Yeah, that's super helpful. yeah that's super helpful Maybe following up on your commentary on GenAI and some of the agentic, obviously, we've been hearing a lot from a lot of players in the space around these two themes. maybe following up on your commentary on genai and some of the agentic obviously we've been hearing a lot from a lot of players in the space around these two themes Can you just talk a little bit about kind of the right to win and how you help your stakeholders understand the value creation versus the noise around these themes? can you just talk a little bit about kind of the right to win and how you help your stakeholders understand the value creation versus the noise around these themes Maybe, as you said, with the AdCP, it's not about winning yourselves, but creating a tame expanding ecosystem around those themes. maybe as you said with the adcp it's not about winning yourselves but creating a tame expanding ecosystem around those themes

Speaker 1: Yeah. I think let's take each of those in turn. First of all, I think the right to win comes from a couple of things. First of all, it's owning all of our own infrastructure. What that means is that we're in a unique position to be able to deploy cutting-edge AI technology, AI foundational infrastructure, like the partnership that we announced with NVIDIA. That came as a result of multiple years of collaboration. It's not just something you can wake up and do all of a sudden. To be able to do that, you have to really own and control and be in a position to manage all of that infrastructure. I think that's the first right to win, our long-term capability set there and expertise. Second is you've got to have the transactions and the data flowing on your platform. Yeah. yeah I think let's take each of those in turn. i think let's take each of those in turn First of all, I think the right to win comes from a couple of things. first of all i think the right to win comes from a couple of things First of all, it's owning all of our own infrastructure. first of all it's owning all of our own infrastructure What that means is that we're in a unique position to be able to deploy cutting-edge AI technology, AI foundational infrastructure, like the partnership that we announced with NVIDIA. what that means is that we're in a unique position to be able to deploy cutting-edge ai technology ai foundational infrastructure like the partnership that we announced with nvidia That came as a result of multiple years of collaboration. that came as a result of multiple years of collaboration It's not just something you can wake up and do all of a sudden. it's not just something you can wake up and do all of a sudden To be able to do that, you have to really own and control and be in a position to manage all of that infrastructure. to be able to do that you have to really own and control and be in a position to manage all of that infrastructure I think that's the first right to win, our long-term capability set there and expertise. i think that's the first right to win our long-term capability set there and expertise Second is you've got to have the transactions and the data flowing on your platform. second is you've got to have the transactions and the data flowing on your platform An AI algorithm is only useful to your customers and only relevant to them if you have the scale and ability to transact. Of course, we have that with a trillion or so daily ad impressions flowing on our platform, almost 2,000 publishers, depth in CTV and mobile app and display and so on and so forth. I think that's the second key for the right to win. I think the third is a demonstrated ability to innovate and to really build solutions, not just talk about them. I think what you've seen from us over the last year is that we are significantly ahead of our competition. We have launched 17 agents in our publisher platform already using AI. I think one of our competitors shared that they're planning to build their first agent, right? An AI algorithm is only useful to your customers and only relevant to them if you have the scale and ability to transact. an ai algorithm is only useful to your customers and only relevant to them if you have the scale and ability to transact Of course, we have that with a trillion or so daily ad impressions flowing on our platform, almost 2,000 publishers, depth in CTV and mobile app and display and so on and so forth. of course we have that with a trillion or so daily ad impressions flowing on our platform almost 2,000 publishers depth in ctv and mobile app and display and so on and so forth I think that's the second key for the right to win. i think that's the second key for the right to win I think the third is a demonstrated ability to innovate and to really build solutions, not just talk about them. i think the third is a demonstrated ability to innovate and to really build solutions not just talk about them I think what you've seen from us over the last year is that we are significantly ahead of our competition. i think what you've seen from us over the last year is that we are significantly ahead of our competition We have launched 17 agents in our publisher platform already using AI. we have launched 17 agents in our publisher platform already using ai I think one of our competitors shared that they're planning to build their first agent, right? i think one of our competitors shared that they're planning to build their first agent right You can see that's a one to two-year advantage that we have in terms of track record of execution. What that means is that when we're launching things like AdCP, the Ad Context Protocol, which is managing workflow via AI, we are in a position to be able to go talk to both publishers and buyers about, "Here's how you get started. Here are the first use cases to implement, and these things are available on our platform today." I think that's a key part of creating value within the ecosystem, being able to participate in those early transactions, being on the frontier, and then benefiting from the groundswell of growth that we see in front of us. You can see that's a one to two-year advantage that we have in terms of track record of execution. you can see that's a one to two-year advantage that we have in terms of track record of execution What that means is that when we're launching things like AdCP, the Ad Context Protocol, which is managing workflow via AI, we are in a position to be able to go talk to both publishers and buyers about, "Here's how you get started. what that means is that when we're launching things like adcp the ad context protocol which is managing workflow via ai we are in a position to be able to go talk to both publishers and buyers about "here's how you get started Here are the first use cases to implement, and these things are available on our platform today." I think that's a key part of creating value within the ecosystem, being able to participate in those early transactions, being on the frontier, and then benefiting from the groundswell of growth that we see in front of us. here are the first use cases to implement and these things are available on our platform today." i think that's a key part of creating value within the ecosystem being able to participate in those early transactions being on the frontier and then benefiting from the groundswell of growth that we see in front of us

Speaker 9: Thank you. Thank you. thank you

Speaker 5: Our next question comes from Shweta Khajuria at Wolfe. Please go ahead, Shweta. Our next question comes from Shweta Khajuria at Wolfe. P lease go ahead, Shweta. our next question comes from shweta khajuria at wolfe. p lease go ahead shweta

Speaker 6: Thanks, Stacie. Thanks for taking my question. I have a follow-up on the first question on OpenPath, not specifically just OpenPath, but are you seeing, Rajeev, any trends that would suggest that perhaps Trade Desk is increasingly going direct and you are getting impacted by not only just as a reseller, but in terms of the impressions volume? Are you seeing any impact to your business in general? And is it related to them actually launching that Kokai platform? I would think not, but there is this concern in the industry. If you could please perhaps comment on that to correct that, that would be great. Thank you. Thanks, Stacie. thanks stacie Thanks for taking my question. thanks for taking my question I have a follow-up on the first question on OpenPath, not specifically just OpenPath, but are you seeing, Rajeev, any trends that would suggest that perhaps Trade Desk is increasingly going direct and you are getting impacted by not only just as a reseller, but in terms of the impressions volume? i have a follow-up on the first question on openpath not specifically just openpath but are you seeing rajeev any trends that would suggest that perhaps trade desk is increasingly going direct and you are getting impacted by not only just as a reseller but in terms of the impressions volume Are you seeing any impact to your business in general? are you seeing any impact to your business in general And is it related to them actually launching that Kokai platform? and is it related to them actually launching that kokai platform I would think not, but there is this concern in the industry. i would think not but there is this concern in the industry If you could please perhaps comment on that to correct that, that would be great. if you could please perhaps comment on that to correct that that would be great Thank you. thank you

Speaker 1: Sure. Yeah, absolutely. First of all, good news is we are a platform for direct inventory. Regardless of what label anybody wants to put on anything, we know that we are working directly with premium publishers, and there is not a more efficient way for buyers to access the inventory than what is coming through our platform. I think underlying your question, the new Trade Desk platform, Kokai, does evaluate and buy media differently from what we have seen. We took two important steps over the course of Q3, resulting in spend from them stabilizing in August and September, as Steve mentioned. The first is that we revised our machine learning algorithms to ensure we are sending an optimal mix of inventory to them. That work is largely behind us, so we are always doing some level of continuous optimization to drive more spend. Sure. sure Yeah, absolutely. yeah absolutely First of all, good news is we are a platform for direct inventory. first of all good news is we are a platform for direct inventory Regardless of what label anybody wants to put on anything, we know that we are working directly with premium publishers, and there is not a more efficient way for buyers to access the inventory than what is coming through our platform. regardless of what label anybody wants to put on anything we know that we are working directly with premium publishers and there is not a more efficient way for buyers to access the inventory than what is coming through our platform I think underlying your question, the new Trade Desk platform, Kokai, does evaluate and buy media differently from what we have seen. i think underlying your question the new trade desk platform kokai does evaluate and buy media differently from what we have seen We took two important steps over the course of Q3, resulting in spend from them stabilizing in August and September, as Steve mentioned. we took two important steps over the course of q3 resulting in spend from them stabilizing in august and september as steve mentioned The first is that we revised our machine learning algorithms to ensure we are sending an optimal mix of inventory to them. the first is that we revised our machine learning algorithms to ensure we are sending an optimal mix of inventory to them That work is largely behind us, so we are always doing some level of continuous optimization to drive more spend. that work is largely behind us so we are always doing some level of continuous optimization to drive more spend We worked with our SPO, Supply Path Optimization partners, to help them configure their seat in the DSP to ensure that they're getting the benefit of their SPO relationships with us. That work is largely completed as well. We have agency marketplaces set up with pretty much every major hold co in different parts of the world, in many different parts of the world. These agencies had to make changes over the last couple of months to ensure that their marketplaces stay intact and that they continue to get the performance and efficiency that they're seeking. These marketplaces are critical to the agency's media buying offerings that they provide to their advertiser clients. We've shared publicly, for instance, we power WPP's premium marketplace. That's built on top of our SSP. We worked with our SPO, Supply Path Optimization partners, to help them configure their seat in the DSP to ensure that they're getting the benefit of their SPO relationships with us. we worked with our spo supply path optimization partners to help them configure their seat in the dsp to ensure that they're getting the benefit of their spo relationships with us That work is largely completed as well. that work is largely completed as well We have agency marketplaces set up with pretty much every major hold co in different parts of the world, in many different parts of the world. we have agency marketplaces set up with pretty much every major hold co in different parts of the world in many different parts of the world These agencies had to make changes over the last couple of months to ensure that their marketplaces stay intact and that they continue to get the performance and efficiency that they're seeking. these agencies had to make changes over the last couple of months to ensure that their marketplaces stay intact and that they continue to get the performance and efficiency that they're seeking These marketplaces are critical to the agency's media buying offerings that they provide to their advertiser clients. these marketplaces are critical to the agency's media buying offerings that they provide to their advertiser clients We've shared publicly, for instance, we power WPP's premium marketplace. we've shared publicly for instance we power wpp's premium marketplace That's built on top of our SSP. that's built on top of our ssp Making sure that they're receiving their SPO data, workflow, efficiency, benefits is key to their being able to continue to offer that in market. Similarly, given we're a market leader in curation, we work with our curation partners to ensure that their campaigns continue to run via our SSP and that they get the ROI, the transparency, and the control that caused them to choose to work with us in the first place. I think Trade Desk shared that I believe 85% of their clients are now up and live on Kokai. We think probably the bulk of this movement is behind us. That's a key part of why we're also very rapidly diversifying our DSP mix. As the market evolves to a more fragmented DSP landscape, we're finding significant success with 25%+ year-over-year growth with mid-market DSPs on our platform in Q3. Making sure that they're receiving their SPO data, workflow, efficiency, benefits is key to their being able to continue to offer that in market. making sure that they're receiving their spo data workflow efficiency benefits is key to their being able to continue to offer that in market Similarly, given we're a market leader in curation, we work with our curation partners to ensure that their campaigns continue to run via our SSP and that they get the ROI, the transparency, and the control that caused them to choose to work with us in the first place. similarly given we're a market leader in curation we work with our curation partners to ensure that their campaigns continue to run via our ssp and that they get the roi the transparency and the control that caused them to choose to work with us in the first place I think Trade Desk shared that I believe 85% of their clients are now up and live on Kokai. i think trade desk shared that i believe 85% of their clients are now up and live on kokai We think probably the bulk of this movement is behind us. we think probably the bulk of this movement is behind us That's a key part of why we're also very rapidly diversifying our DSP mix. that's a key part of why we're also very rapidly diversifying our dsp mix As the market evolves to a more fragmented DSP landscape, we're finding significant success with 25%+ year-over-year growth with mid-market DSPs on our platform in Q3. as the market evolves to a more fragmented dsp landscape we're finding significant success with 25%+ year-over-year growth with mid-market dsps on our platform in q3

Speaker 6: Makes sense. Thanks, Rajeev. Makes sense. makes sense Thanks, Rajeev. thanks rajeev

Speaker 5: Our next question comes from Matt Condon at JMP. Please go ahead, Matt. Our next question comes from Matt Condon at JMP. our next question comes from matt condon at jmp Please go ahead, Matt. please go ahead matt

Speaker 4: Thank you so much for taking my questions. My first one is just that there has been a lot of talk of just the impact across the open web on publisher traffic, just given these AI platforms that are taking increased share. Can you just talk about what you are seeing across your publisher base as far as search traffic? Thank you so much for taking my questions. thank you so much for taking my questions My first one is just that there has been a lot of talk of just the impact across the open web on publisher traffic, just given these AI platforms that are taking increased share. my first one is just that there has been a lot of talk of just the impact across the open web on publisher traffic just given these ai platforms that are taking increased share Can you just talk about what you are seeing across your publisher base as far as search traffic? can you just talk about what you are seeing across your publisher base as far as search traffic

Speaker 1: Yeah, absolutely. We've seen, I would say, a fairly limited impact. I would say just stepping back, we believe the exposure overall in our business is limited to a single-digit percentage of revenue if there was zero search traffic going to our publishers, and we took no steps to mitigate it. That's probably a high-end kind of watermark of potential impact. We shared in our comments today that roughly 60% of the impressions that we are processing are for CTV and mobile app. Of course, those are unaffected by AI search. Now, of the remaining business, which is browser-based where search is relevant, industry data indicates that search referral traffic is roughly 15%, with the rest of publisher's traffic coming from either social or direct navigation. Yeah, absolutely. yeah absolutely We've seen, I would say, a fairly limited impact. we've seen i would say a fairly limited impact I would say just stepping back, we believe the exposure overall in our business is limited to a single-digit percentage of revenue if there was zero search traffic going to our publishers, and we took no steps to mitigate it. i would say just stepping back we believe the exposure overall in our business is limited to a single-digit percentage of revenue if there was zero search traffic going to our publishers and we took no steps to mitigate it That's probably a high-end kind of watermark of potential impact. that's probably a high-end kind of watermark of potential impact We shared in our comments today that roughly 60% of the impressions that we are processing are for CTV and mobile app. we shared in our comments today that roughly 60% of the impressions that we are processing are for ctv and mobile app Of course, those are unaffected by AI search. of course those are unaffected by ai search Now, of the remaining business, which is browser-based where search is relevant, industry data indicates that search referral traffic is roughly 15%, with the rest of publisher's traffic coming from either social or direct navigation. now of the remaining business which is browser-based where search is relevant industry data indicates that search referral traffic is roughly 15% with the rest of publisher's traffic coming from either social or direct navigation Given that we work in the head of the market with the top publishers rather than the long tail, I would expect that 15% number to actually be even a little bit lower. If you take, okay, 40% of the impressions, 15% impact at the high end, that gets you to a mid-single-digit percentage potential impact. Again, if we had no mitigating steps that we took. Actually, there's a lot that we can do in terms of continuing to bring on board more CTV, more mobile app, more commerce impressions, and the like. I think the other thing that we're seeing is the offensive opportunity, which is that there's a growing number of AI search experiences that consumers are spending more and more time on. Given that we work in the head of the market with the top publishers rather than the long tail, I would expect that 15% number to actually be even a little bit lower. given that we work in the head of the market with the top publishers rather than the long tail i would expect that 15% number to actually be even a little bit lower If you take, okay, 40% of the impressions, 15% impact at the high end, that gets you to a mid-single-digit percentage potential impact. if you take okay 40% of the impressions 15% impact at the high end that gets you to a mid-single-digit percentage potential impact Again, if we had no mitigating steps that we took. again if we had no mitigating steps that we took Actually, there's a lot that we can do in terms of continuing to bring on board more CTV, more mobile app, more commerce impressions, and the like. actually there's a lot that we can do in terms of continuing to bring on board more ctv more mobile app more commerce impressions and the like I think the other thing that we're seeing is the offensive opportunity, which is that there's a growing number of AI search experiences that consumers are spending more and more time on. i think the other thing that we're seeing is the offensive opportunity which is that there's a growing number of ai search experiences that consumers are spending more and more time on For instance, Gannett launched a solution where users on their properties can search the archives of Gannett articles and get answers to questions. I think that is actually a growing canvas of inventory of opportunity for us as consumers get more and more used to that AI search kind of consumption behavior than they're looking for that from many of their traditional content partners where they consume content. We think that's a new tailwind that is emerging in the business. For instance, Gannett launched a solution where users on their properties can search the archives of Gannett articles and get answers to questions. for instance gannett launched a solution where users on their properties can search the archives of gannett articles and get answers to questions I think that is actually a growing canvas of inventory of opportunity for us as consumers get more and more used to that AI search kind of consumption behavior than they're looking for that from many of their traditional content partners where they consume content. i think that is actually a growing canvas of inventory of opportunity for us as consumers get more and more used to that ai search kind of consumption behavior than they're looking for that from many of their traditional content partners where they consume content We think that's a new tailwind that is emerging in the business. we think that's a new tailwind that is emerging in the business

Speaker 4: That's very helpful. My second one is just on your O&O infrastructure and just the differentiation there and your partnership that you announced with NVIDIA, just the 5x speed improvements in bid response times. Can you just talk about the structural difference that's allowing, and is it allowing win rates and auctions to be higher? Just talk about the differentiation there and how that can drive sustainable growth as we think about 2026. That's very helpful. that's very helpful My second one is just on your O&O infrastructure and just the differentiation there and your partnership that you announced with NVIDIA, just the 5x speed improvements in bid response times. my second one is just on your o&o infrastructure and just the differentiation there and your partnership that you announced with nvidia just the 5x speed improvements in bid response times Can you just talk about the structural difference that's allowing, and is it allowing win rates and auctions to be higher? can you just talk about the structural difference that's allowing and is it allowing win rates and auctions to be higher Just talk about the differentiation there and how that can drive sustainable growth as we think about 2026. just talk about the differentiation there and how that can drive sustainable growth as we think about 2026

Speaker 1: Yeah, absolutely. Actually, the good news is that there's multiple ways that having this kind of infrastructure cooperation, collaboration with Nvidia can benefit our business. It really is a collaboration, not just in hardware, but also in software. I think NVIDIA themselves says that I think it's over half, maybe over 60% of their revenue comes from software solutions, right? Obviously, they're well known for hardware, but it's really a combination of hardware and software. I'll give you kind of three specific examples. We use NVIDIA GPUs to power real-time ad decisioning in very low-latency environments. Think about things like connected TV or live sports, where if we can process ad transactions faster, if we can cut latency, that leads to fewer timeouts, more bids in the auction on our platform, and more opportunities for us to win with the publisher. Yeah, absolutely. yeah absolutely Actually, the good news is that there's multiple ways that having this kind of infrastructure cooperation, collaboration with Nvidia can benefit our business. actually the good news is that there's multiple ways that having this kind of infrastructure cooperation collaboration with nvidia can benefit our business It really is a collaboration, not just in hardware, but also in software. it really is a collaboration not just in hardware but also in software I think NVIDIA themselves says that I think it's over half, maybe over 60% of their revenue comes from software solutions, right? i think nvidia themselves says that i think it's over half maybe over 60% of their revenue comes from software solutions right Obviously, they're well known for hardware, but it's really a combination of hardware and software. obviously they're well known for hardware but it's really a combination of hardware and software I'll give you kind of three specific examples. i'll give you kind of three specific examples We use NVIDIA GPUs to power real-time ad decisioning in very low-latency environments. we use nvidia gpus to power real-time ad decisioning in very low-latency environments Think about things like connected TV or live sports, where if we can process ad transactions faster, if we can cut latency, that leads to fewer timeouts, more bids in the auction on our platform, and more opportunities for us to win with the publisher. think about things like connected tv or live sports where if we can process ad transactions faster if we can cut latency that leads to fewer timeouts more bids in the auction on our platform and more opportunities for us to win with the publisher That boosts outcomes, ROI for both advertisers and publishers, also boosts our revenue. The second example is using NVIDIA Triton inference servers, where we use a specific hardware-software implementation with them for traffic shaping. Traffic shaping is a very important and critical role that anybody on the sell side plays, which is to figure out which of the roughly trillion ad impressions we have per day we should send to each particular DSP. Some DSPs, we might send tens of billions. Some might be single-digit billions. Some might be hundreds of billions of ad impressions. It is really important that we pick the right ones. For every DSP, there has got to be a different decision set of calculus based on the types of advertisers and campaigns that are in their platform. That boosts outcomes, ROI for both advertisers and publishers, also boosts our revenue. that boosts outcomes roi for both advertisers and publishers also boosts our revenue The second example is using NVIDIA Triton inference servers, where we use a specific hardware-software implementation with them for traffic shaping. the second example is using nvidia triton inference servers where we use a specific hardware-software implementation with them for traffic shaping Traffic shaping is a very important and critical role that anybody on the sell side plays, which is to figure out which of the roughly trillion ad impressions we have per day we should send to each particular DSP. traffic shaping is a very important and critical role that anybody on the sell side plays which is to figure out which of the roughly trillion ad impressions we have per day we should send to each particular dsp Some DSPs, we might send tens of billions. some dsps we might send tens of billions Some might be single-digit billions. some might be single-digit billions Some might be hundreds of billions of ad impressions. some might be hundreds of billions of ad impressions It is really important that we pick the right ones. it is really important that we pick the right ones For every DSP, there has got to be a different decision set of calculus based on the types of advertisers and campaigns that are in their platform. for every dsp there has got to be a different decision set of calculus based on the types of advertisers and campaigns that are in their platform Of course, these decisions have to be made within milliseconds of the publisher requesting a bid from us. Third is in the reporting area. We're using an NVIDIA software accelerator for Apache Spark, which allows us to streamline and improve the speed at which we're able to process data. That in turn allows for smarter optimization across a wide array of different use cases. Those are, I think, hopefully just three tangible examples of how our NVIDIA partnership is really leading to the leadership that we talked about in the prepared remarks, in particular at the infrastructure layer, which then allows us to derive benefit in the application and transaction layers of the AI stack. Of course, these decisions have to be made within milliseconds of the publisher requesting a bid from us. of course these decisions have to be made within milliseconds of the publisher requesting a bid from us Third is in the reporting area. third is in the reporting area We're using an NVIDIA software accelerator for Apache Spark, which allows us to streamline and improve the speed at which we're able to process data. we're using an nvidia software accelerator for apache spark which allows us to streamline and improve the speed at which we're able to process data That in turn allows for smarter optimization across a wide array of different use cases. that in turn allows for smarter optimization across a wide array of different use cases Those are, I think, hopefully just three tangible examples of how our NVIDIA partnership is really leading to the leadership that we talked about in the prepared remarks, in particular at the infrastructure layer, which then allows us to derive benefit in the application and transaction layers of the AI stack. those are i think hopefully just three tangible examples of how our nvidia partnership is really leading to the leadership that we talked about in the prepared remarks in particular at the infrastructure layer which then allows us to derive benefit in the application and transaction layers of the ai stack

Speaker 4: Very helpful. Thanks, Rajeev. Very helpful. very helpful Thanks, Rajeev. thanks rajeev

Speaker 5: This one comes from Rob Coolbrith at Evercore. Please go ahead, Rob. This one comes from Rob Coolbrith at Evercore . this one comes from rob coolbrith at evercore Please go ahead, Rob. please go ahead rob

Speaker 2: Great. Thank you very much. Rajeev, wanting to go back to this 5x faster in bid response, we had unlocking optimization strategies previously impossible at standard programmatic rates. Can you unpack that? Assuming you have a very substantial lead in accelerated computing in this space, are there counterparties on the demand side who can take advantage of that, or do you think you need to take on a bigger role either in optimizing demand or hosting demand-side logic and optimization to sort of fully take advantage of those capabilities? There's something more akin to what the walled gardens do, maybe in terms of their highly vertically integrated supply chains. Steve, just wanted to maybe get a finer point on this Trade Desk issue. Just given current trends, do you see the potential to maybe see growth alongside their growth in the back half of 2026? Thank you. Great. great Thank you very much. thank you very much Rajeev, wanting to go back to this 5x faster in bid response, we had unlocking optimization strategies previously impossible at standard programmatic rates. rajeev wanting to go back to this 5x faster in bid response we had unlocking optimization strategies previously impossible at standard programmatic rates Can you unpack that? can you unpack that Assuming you have a very substantial lead in accelerated computing in this space, are there counterparties on the demand side who can take advantage of that, or do you think you need to take on a bigger role either in optimizing demand or hosting demand-side logic and optimization to sort of fully take advantage of those capabilities? assuming you have a very substantial lead in accelerated computing in this space are there counterparties on the demand side who can take advantage of that or do you think you need to take on a bigger role either in optimizing demand or hosting demand-side logic and optimization to sort of fully take advantage of those capabilities There's something more akin to what the walled gardens do, maybe in terms of their highly vertically integrated supply chains. there's something more akin to what the walled gardens do maybe in terms of their highly vertically integrated supply chains Steve, just wanted to maybe get a finer point on this Trade Desk issue. steve just wanted to maybe get a finer point on this trade desk issue Just given current trends, do you see the potential to maybe see growth alongside their growth in the back half of 2026? just given current trends do you see the potential to maybe see growth alongside their growth in the back half of 2026 Thank you. thank you

Speaker 1: Yeah, thanks, Rob. Yeah, let me start with your first question, then I'll hand it over to Steve. We absolutely do see opportunity to better leverage our infrastructure through vertical integration. I'll give you two examples of that. One is, as we work more and more with mid-market-focused DSPs, who themselves tend to be smaller, what we find is that there's a lot of opportunity for us to use our platform to help them compete more effectively. What I mean by that is we have huge amounts of data on our platform from this one trillion daily ad impressions. A typical mid-market DSP, they may see 5%-10% of the traffic that a very large DSP like a Google DV360 would see. These mid-market DSPs, because they're smaller in nature, they don't have access to all of that same data. Yeah, thanks, Rob. yeah thanks rob Yeah, let me start with your first question, then I'll hand it over to Steve. yeah let me start with your first question then i'll hand it over to steve We absolutely do see opportunity to better leverage our infrastructure through vertical integration. we absolutely do see opportunity to better leverage our infrastructure through vertical integration I'll give you two examples of that. i'll give you two examples of that One is, as we work more and more with mid-market-focused DSPs, who themselves tend to be smaller, what we find is that there's a lot of opportunity for us to use our platform to help them compete more effectively. one is as we work more and more with mid-market-focused dsps who themselves tend to be smaller what we find is that there's a lot of opportunity for us to use our platform to help them compete more effectively What I mean by that is we have huge amounts of data on our platform from this one trillion daily ad impressions. what i mean by that is we have huge amounts of data on our platform from this one trillion daily ad impressions A typical mid-market DSP, they may see 5%-10% of the traffic that a very large DSP like a Google DV360 would see. a typical mid-market dsp they may see 5%-10% of the traffic that a very large dsp like a google dv360 would see These mid-market DSPs, because they're smaller in nature, they don't have access to all of that same data. these mid-market dsps because they're smaller in nature they don't have access to all of that same data At the same time, they also don't have access to all of the performance aspects of the auction that we're running on behalf of the publisher. There are opportunities for us, which we are working very hard on, to use our platform to help those DSPs derive better performance, better targeting, and ultimately better ROI. That plays very closely with the infrastructure that we've deployed. That's one example, Rob, of where I think vertical integration, where we can do more than we have done traditionally for a legacy DSP. I think these mid-market DSPs, because they're growing quickly, they're very hungry for that kind of collaboration and our ability to help them solve problems. The second is with our Activate solution, where buyers are buying directly in our SSP. At the same time, they also don't have access to all of the performance aspects of the auction that we're running on behalf of the publisher. at the same time they also don't have access to all of the performance aspects of the auction that we're running on behalf of the publisher There are opportunities for us, which we are working very hard on, to use our platform to help those DSPs derive better performance, better targeting, and ultimately better ROI. there are opportunities for us which we are working very hard on to use our platform to help those dsps derive better performance better targeting and ultimately better roi That plays very closely with the infrastructure that we've deployed. that plays very closely with the infrastructure that we've deployed That's one example, Rob, of where I think vertical integration, where we can do more than we have done traditionally for a legacy DSP. that's one example rob of where i think vertical integration where we can do more than we have done traditionally for a legacy dsp I think these mid-market DSPs, because they're growing quickly, they're very hungry for that kind of collaboration and our ability to help them solve problems. i think these mid-market dsps because they're growing quickly they're very hungry for that kind of collaboration and our ability to help them solve problems The second is with our Activate solution, where buyers are buying directly in our SSP. the second is with our activate solution where buyers are buying directly in our ssp Here, that faster processing of bids, better inferencing, all of these things, they help make Activate a very effective solution. We are seeing that play out in terms of the growth, up 4x year over year. Campaign numbers are growing on a similar basis in terms of the number of campaigns run. We think there is a lot of benefit from vertical integration. As you said, Rob, that is somewhat akin to what the walled gardens do. Of course, it is no secret that they are very good at driving performance. We think that vertical integration is a key part of that. I will turn it over to Steve now. Here, that faster processing of bids, better inferencing, all of these things, they help make Activate a very effective solution. here that faster processing of bids better inferencing all of these things they help make activate a very effective solution We are seeing that play out in terms of the growth, up 4x year over year. we are seeing that play out in terms of the growth up 4x year over year Campaign numbers are growing on a similar basis in terms of the number of campaigns run. campaign numbers are growing on a similar basis in terms of the number of campaigns run We think there is a lot of benefit from vertical integration. we think there is a lot of benefit from vertical integration As you said, Rob, that is somewhat akin to what the walled gardens do. as you said rob that is somewhat akin to what the walled gardens do Of course, it is no secret that they are very good at driving performance. of course it is no secret that they are very good at driving performance We think that vertical integration is a key part of that. I will turn it over to Steve now. we think that vertical integration is a key part of that. i will turn it over to steve now

Speaker 8: Sure, Rob. Just correct me if I do not have the right question, but in terms of our growth opportunities in 2026, obviously, we are going to come back shortly with the next earnings, talk about 2026. There is a lot of things that we have focused on to put us in a very strong position to re-accelerate growth. You have heard some of the stats from the third quarter, strong CTV growth, mobile, as well as our emerging revenues. Once we work through the current transition that we have identified in the second half of this year, we are very confident that we are going to be growing on a number of different fronts. Just as a reminder, we have been investing in secular growth areas. This has been a long-term strategy, and we are seeing the results of that. We are expanding, diversifying our DSP base. Sure, Rob. sure rob Just correct me if I do not have the right question, but in terms of our growth opportunities in 2026, obviously, we are going to come back shortly with the next earnings, talk about 2026. just correct me if i do not have the right question but in terms of our growth opportunities in 2026 obviously we are going to come back shortly with the next earnings talk about 2026 There is a lot of things that we have focused on to put us in a very strong position to re-accelerate growth. You have heard some of the stats from the third quarter, strong CTV growth, mobile, as well as our emerging revenues. there is a lot of things that we have focused on to put us in a very strong position to re-accelerate growth. you have heard some of the stats from the third quarter strong ctv growth mobile as well as our emerging revenues Once we work through the current transition that we have identified in the second half of this year, we are very confident that we are going to be growing on a number of different fronts. once we work through the current transition that we have identified in the second half of this year we are very confident that we are going to be growing on a number of different fronts Just as a reminder, we have been investing in secular growth areas. just as a reminder, we have been investing in secular growth areas This has been a long-term strategy, and we are seeing the results of that. this has been a long-term strategy and we are seeing the results of that We are expanding, diversifying our DSP base. we are expanding diversifying our dsp base We're growing very strongly with commerce DSPs, specialized DSPs around pharma. The coupling of our focus on secular growth, expanding our buyer base, and then innovation around AI, not just in the infrastructure, but certainly in terms of capabilities, functionality. We launched this past quarter AI-driven publisher products, and that will continue to be sources of growth. We are very positive about the growth in the second half of 2026 as we look at the plethora of opportunities ahead of us. We're growing very strongly with commerce DSPs, specialized DSPs around pharma. we're growing very strongly with commerce dsps specialized dsps around pharma The coupling of our focus on secular growth, expanding our buyer base, and then innovation around AI, not just in the infrastructure, but certainly in terms of capabilities, functionality. the coupling of our focus on secular growth expanding our buyer base and then innovation around ai not just in the infrastructure but certainly in terms of capabilities functionality We launched this past quarter AI-driven publisher products, and that will continue to be sources of growth. we launched this past quarter ai-driven publisher products and that will continue to be sources of growth We are very positive about the growth in the second half of 2026 as we look at the plethora of opportunities ahead of us. we are very positive about the growth in the second half of 2026 as we look at the plethora of opportunities ahead of us

Speaker 2: Great. Thank you, Steve. Thank you, Rajeev. Great. great Thank you, Steve. thank you steve Thank you, Rajeev. thank you rajeev

Speaker 5: Our next question comes from Jacob Armstrong at KeyBanc. Please go ahead, Jacob. Our next question comes from Jacob Armstrong at KeyBanc. our next question comes from jacob armstrong at keybanc Please go ahead, Jacob. please go ahead jacob

Speaker 10: Thanks for taking my question. This is Jacob on for Justin. Can you discuss how you believe the role the SSP needs to evolve in the coming years as Agentic AI expands? What are the key investments needed to ensure PubMatic is its best position to capitalize off this transition over the next few years? Thanks for taking my question. thanks for taking my question This is Jacob on for Justin. this is jacob on for justin Can you discuss how you believe the role the SSP needs to evolve in the coming years as Agentic AI expands? can you discuss how you believe the role the ssp needs to evolve in the coming years as agentic ai expands What are the key investments needed to ensure PubMatic is its best position to capitalize off this transition over the next few years? what are the key investments needed to ensure pubmatic is its best position to capitalize off this transition over the next few years

Speaker 1: Sure. Yeah. I think the role of the SSP is going to expand significantly from transaction automation to a much bigger role in workflow automation, particularly around audience and inventory discovery and planning and in measurement. If we think about where programmatic technologies have been applied so far, maybe for the last 15 or so years, I would say it's been heavily applied at the transaction level. Meaning we have an ad impression, and we want to get a number of advertiser bids on it, and then we're helping DSPs bid on that individual ad impression. There has been a lot of maturation and innovation and focus on that single atomic impression. We still have RFPs that advertisers send or agencies send out to publishers via email, fill out the spreadsheet. We're launching this ad campaign. Sure. sure Yeah. yeah I think the role of the SSP is going to expand significantly from transaction automation to a much bigger role in workflow automation, particularly around audience and inventory discovery and planning and in measurement. i think the role of the ssp is going to expand significantly from transaction automation to a much bigger role in workflow automation particularly around audience and inventory discovery and planning and in measurement If we think about where programmatic technologies have been applied so far, maybe for the last 15 or so years, I would say it's been heavily applied at the transaction level. if we think about where programmatic technologies have been applied so far maybe for the last 15 or so years i would say it's been heavily applied at the transaction level Meaning we have an ad impression, and we want to get a number of advertiser bids on it, and then we're helping DSPs bid on that individual ad impression. meaning we have an ad impression and we want to get a number of advertiser bids on it and then we're helping dsps bid on that individual ad impression There has been a lot of maturation and innovation and focus on that single atomic impression. there has been a lot of maturation and innovation and focus on that single atomic impression We still have RFPs that advertisers send or agencies send out to publishers via email, fill out the spreadsheet. we still have rfps that advertisers send or agencies send out to publishers via email fill out the spreadsheet We're launching this ad campaign. we're launching this ad campaign We want to understand what audiences or what inventory you might have available. Some human at the publisher fills that out, and then they email that back to the agency. The agency collects those, and then they decide where they're going to set up and allocate budget. That is still a largely manual process. Some things have improved, but still a lot of manual approaches. I think there is a huge opportunity to think outside of the pure atomic impression or transaction around the discovery and planning, and then after the transaction to the measurement, to use AI where an advertiser's agent or an agency's agent can say, "Hey, I'm launching this product or service. We want to understand what audiences or what inventory you might have available. we want to understand what audiences or what inventory you might have available Some human at the publisher fills that out, and then they email that back to the agency. some human at the publisher fills that out and then they email that back to the agency The agency collects those, and then they decide where they're going to set up and allocate budget. the agency collects those and then they decide where they're going to set up and allocate budget That is still a largely manual process. that is still a largely manual process Some things have improved, but still a lot of manual approaches. some things have improved but still a lot of manual approaches I think there is a huge opportunity to think outside of the pure atomic impression or transaction around the discovery and planning, and then after the transaction to the measurement, to use AI where an advertiser's agent or an agency's agent can say, "Hey, I'm launching this product or service. i think there is a huge opportunity to think outside of the pure atomic impression or transaction around the discovery and planning and then after the transaction to the measurement to use ai where an advertiser's agent or an agency's agent can say "hey i'm launching this product or service Please tell me what you can do for me as a publisher or media owner from an audience and an inventory perspective." We can take a structured response, aggregate that up across many of the publishers that we're working with, and then deliver a pre-constructed campaign brief to the agency. The agency can begin to buy that using our transaction pipes. We can have a feedback loop around measurement with that. The agency can revise their campaign. I think there's a lot that can be done outside of that single transaction element. That's really where we are focused with the transaction layer of the stack that I mentioned earlier with Ad Context Protocol. Please tell me what you can do for me as a publisher or media owner from an audience and an inventory perspective." We can take a structured response, aggregate that up across many of the publishers that we're working with, and then deliver a pre-constructed campaign brief to the agency. please tell me what you can do for me as a publisher or media owner from an audience and an inventory perspective." we can take a structured response aggregate that up across many of the publishers that we're working with and then deliver a pre-constructed campaign brief to the agency The agency can begin to buy that using our transaction pipes. the agency can begin to buy that using our transaction pipes We can have a feedback loop around measurement with that. we can have a feedback loop around measurement with that The agency can revise their campaign. the agency can revise their campaign I think there's a lot that can be done outside of that single transaction element. i think there's a lot that can be done outside of that single transaction element That's really where we are focused with the transaction layer of the stack that I mentioned earlier with Ad Context Protocol. that's really where we are focused with the transaction layer of the stack that i mentioned earlier with ad context protocol We're working out what exactly should those structured requests and responses look like, and then how do they get set up, who owns what data, and then how do they get optimized. I think there's a long runway, Jacob, ahead in that area. We're working out what exactly should those structured requests and responses look like, and then how do they get set up, who owns what data, and then how do they get optimized. we're working out what exactly should those structured requests and responses look like and then how do they get set up who owns what data and then how do they get optimized I think there's a long runway, Jacob, ahead in that area. i think there's a long runway jacob ahead in that area

Speaker 10: Thank you. Thank you. thank you

Speaker 5: Next question comes from Ed Alter at Jefferies. Please go ahead. Next question comes from Ed Alter at Jefferies. next question comes from ed alter at jefferies Please go ahead. please go ahead

Speaker 11: Hi. Thanks for the question. I wanted to talk about the investments you're making to meet the demand from the mid-market DSPs like MNTN. Where exactly are those going to show up? Is that more headcount, tech investments? Just be great to talk about the color on that. Hi. hi Thanks for the question. thanks for the question I wanted to talk about the investments you're making to meet the demand from the mid-market DSPs like MNTN. i wanted to talk about the investments you're making to meet the demand from the mid-market dsps like mntn Where exactly are those going to show up? where exactly are those going to show up Is that more headcount, tech investments? is that more headcount tech investments Just be great to talk about the color on that. just be great to talk about the color on that

Speaker 8: Sure. We have been very focused throughout this year and really leading into this year to be as efficient as possible in terms of where we deploy our teams. We made a very conscious decision in the last 18 months to move more and more resources towards the fastest-growing areas, segment-growth areas, of which, of course, critical DSPs are a part of that. We have been increasing investment in the team that goes directly and calls on these DSPs. This year, we increased thus far about 19% in terms of headcount. We have done that by reallocating team members around the organization. You can see from our results, our overall headcount is roughly flat. We have done a very careful analysis of how we are going to keep on leveraging our existing resources. Sure. sure We have been very focused throughout this year and really leading into this year to be as efficient as possible in terms of where we deploy our teams. we have been very focused throughout this year and really leading into this year to be as efficient as possible in terms of where we deploy our teams We made a very conscious decision in the last 18 months to move more and more resources towards the fastest-growing areas, segment-growth areas, of which, of course, critical DSPs are a part of that. we made a very conscious decision in the last 18 months to move more and more resources towards the fastest-growing areas segment-growth areas of which of course critical dsps are a part of that We have been increasing investment in the team that goes directly and calls on these DSPs. we have been increasing investment in the team that goes directly and calls on these dsps This year, we increased thus far about 19% in terms of headcount. this year we increased thus far about 19% in terms of headcount We have done that by reallocating team members around the organization. we have done that by reallocating team members around the organization You can see from our results, our overall headcount is roughly flat. you can see from our results our overall headcount is roughly flat We have done a very careful analysis of how we are going to keep on leveraging our existing resources. we have done a very careful analysis of how we are going to keep on leveraging our existing resources Of course, all of this is supported by the progress we've made in AI in terms of becoming more efficient just in our daily activities. When I look ahead to 2026, I'm anticipating we're going to keep our headcount roughly flat, but we're going to keep increasing the resources against those areas that are driving the greatest results. We're on a great mission to do that. It's not just on the OpEx side. We are looking at our CapEx, and we do not anticipate increasing our CapEx in 2026 based upon sort of all the optimization, the work with NVIDIA, a lot of other things that are in the pipeline around efficiency and optimizations. From our perspective, we're very confident that we are able to move dollars against the right opportunities without burdening the P&L. Of course, all of this is supported by the progress we've made in AI in terms of becoming more efficient just in our daily activities. of course all of this is supported by the progress we've made in ai in terms of becoming more efficient just in our daily activities When I look ahead to 2026, I'm anticipating we're going to keep our headcount roughly flat, but we're going to keep increasing the resources against those areas that are driving the greatest results. when i look ahead to 2026 i'm anticipating we're going to keep our headcount roughly flat but we're going to keep increasing the resources against those areas that are driving the greatest results We're on a great mission to do that. we're on a great mission to do that It's not just on the OpEx side. it's not just on the opex side We are looking at our CapEx, and we do not anticipate increasing our CapEx in 2026 based upon sort of all the optimization, the work with NVIDIA, a lot of other things that are in the pipeline around efficiency and optimizations. we are looking at our capex and we do not anticipate increasing our capex in 2026 based upon sort of all the optimization the work with nvidia a lot of other things that are in the pipeline around efficiency and optimizations From our perspective, we're very confident that we are able to move dollars against the right opportunities without burdening the P&L. from our perspective we're very confident that we are able to move dollars against the right opportunities without burdening the p&l Feeling good about the progress and our ability to increase our margins as revenue re-accelerates. Feeling good about the progress and our ability to increase our margins as revenue re-accelerates. feeling good about the progress and our ability to increase our margins as revenue re-accelerates

Speaker 11: Thanks, Steve. Thanks, Steve. thanks steve

Speaker 5: Thanks, Steve. Unfortunately, we are just about out of time. So I'm going to turn the call back over to Rajeev for closing remarks, and we'll talk to you all in your follow-up calls very shortly. Thanks, Steve. thanks steve Unfortunately, we are just about out of time. unfortunately we are just about out of time So I'm going to turn the call back over to Rajeev for closing remarks, and we'll talk to you all in your follow-up calls very shortly. so i'm going to turn the call back over to rajeev for closing remarks and we'll talk to you all in your follow-up calls very shortly

Speaker 1: Thank you, Stacey, and thank you all for joining us today. Our results demonstrate the power of our differentiated business model. We continue to innovate, diversify our business, and operate with discipline. Our AI innovation is leading the industry with measurable outcomes driving momentum across the ecosystem. Looking to 2026 and beyond, as revenue growth re-accelerates, we anticipate margin expansion at both the gross and adjusted EBITDA levels because of our efficient and leveraged business. We look forward to seeing many of you at upcoming conferences, including the UBS Technology and AI Conference on December 2, the Wolfe Virtual SMIDCAP Conference on December 3, and Raymond James TMT Conference on December 9. Thanks, everyone, for joining us today. Have a great afternoon. Thank you, Stacey, and thank you all for joining us today. thank you stacey and thank you all for joining us today Our results demonstrate the power of our differentiated business model. our results demonstrate the power of our differentiated business model We continue to innovate, diversify our business, and operate with discipline. we continue to innovate diversify our business and operate with discipline Our AI innovation is leading the industry with measurable outcomes driving momentum across the ecosystem. our ai innovation is leading the industry with measurable outcomes driving momentum across the ecosystem Looking to 2026 and beyond, as revenue growth re-accelerates, we anticipate margin expansion at both the gross and adjusted EBITDA levels because of our efficient and leveraged business. looking to 2026 and beyond as revenue growth re-accelerates we anticipate margin expansion at both the gross and adjusted ebitda levels because of our efficient and leveraged business We look forward to seeing many of you at upcoming conferences, including the UBS Technology and AI Conference on December 2, the Wolfe Virtual SMIDCAP Conference on December 3, and Raymond James TMT Conference on December 9. we look forward to seeing many of you at upcoming conferences including the ubs technology and ai conference on december 2 the wolfe virtual smidcap conference on december 3 and raymond james tmt conference on december 9 Thanks, everyone, for joining us today. thanks everyone for joining us today Have a great afternoon. have a great afternoon