PubMatic's 2025 Q2 Earnings Call: Unraveling Contradictions in DSP Changes, Revenue Growth, and AI Impact

DSP platform change and impact on display revenue, CTV revenue growth expectations, DSP change impact and optimization, impact of generative AI on display business, SPO metrics and market evolution are the key contradictions discussed in PubMatic's latest 2025Q2 earnings call.



Strong Financial Performance:
- PubMatic reported revenue growth of 19% year-over-year for its underlying business, with reported revenue returning to year-over-year growth at 6%.
- The performance was driven by CTV and emerging revenue streams, including Activate, sell-side data targeting, and commerce media.

Increased Market Share in CTV:
- CTV revenue grew by over 50% year-over-year in Q2, indicating significant market share gains.
- This growth is attributed to international expansion, innovative formats, and strategic partnerships such as the one with Wunderkind for Pause Ads.

Emerging Revenue Stream Expansion:
- Emerging revenue streams more than doubled year-over-year, accounting for 8% of total revenue in Q2.
- The growth is supported by AI product capabilities and an expanded sales team focusing on sell-side curation and data targeting.

Impact of Platform Changes by DSPs:
- In July, a top DSP partner made changes that led to a notable drop in spend from that DSP, but the spend stabilized in August.
- The company is working to optimize inventory selection for this DSP, anticipating a multi-month process to stabilize and normalize spend.