Pubmatic Q3 2025 Earnings Sharp Loss Widening, Revenue Declines 5.3%

Opening Paragraph

Pubmatic (PUBM) reported Q3 2025 earnings, beating revenue estimates but posting a wider-than-expected net loss. Revenue fell 5.3% to $67.96 million, while adjusted EBITDA of $11.2 million exceeded forecasts. The company guided Q4 revenue in line with expectations but reiterated challenges in operating margins.

Revenue

Revenue declined 5.3% year-over-year to $67.96 million, driven by a 5% drop in display advertising. However, CTV revenue surged over 50% YoY, excluding political ad impacts, and emerging revenue streams grew 80% YoY, including 100% growth in Activate revenue. Omnichannel video accounted for 38% of total revenue, while CTV inventory monetization expanded with partnerships like Tubi and Local Now.

Earnings/Net Income

Pubmatic’s losses deepened to $0.14 per share in Q3 2025, a 600% wider loss than the $0.02 per share in Q3 2024. Net loss widened to $6.45 million, a 607.5% increase from $912,000 in the prior year. The CFO noted unpredictability in stock-based compensation and litigation expenses as key drivers of the GAAP net income shortfall. The EPS reflects deteriorating profitability despite revenue resilience.

Post-Earnings Price Action Review

Following the earnings report, Pubmatic’s stock surged 19.24% in a single trading day, 39.39% in the subsequent full week, and 37.30% month-to-date as of Nov 11, 2025. The sharp post-earnings rally suggests market optimism about AI-driven efficiencies and CTV growth, though the widening loss raises questions about long-term sustainability.

CEO Commentary

CEO Rajeev Goel emphasized strong Q3 performance, with revenue and adjusted EBITDA exceeding guidance. He highlighted AI-powered platform efficiencies (87% faster campaign setup, 70% faster issue resolution) and strategic partnerships like NVIDIA for infrastructure advantages. Goel also noted a 25% YoY increase in mid-market DSP ad spend, underscoring competitive differentiation.

Guidance

Pubmatic guided Q4 2025 revenue to $73–77 million (inclusive of a top DSP buyer’s impact) and adjusted EBITDA of $19–21 million. The CFO noted margin expansion expectations as revenue growth re-accelerates, though no GAAP net income guidance was provided due to unpredictable expenses.

Additional News

1. Share Buyback: Pubmatic repurchased 12.4 million shares (24% of outstanding stock) in Q3, signaling management confidence in future growth.

2. Analyst Rating Update: B. Riley Securities raised its price target to $10.00 from $9.00, maintaining a Neutral rating.

3. AI-Driven Diversification: The company’s Q3 deep dive highlighted AI’s role in boosting publisher revenue by 10% and expanding mid-market DSP partnerships.

Article Polishing

Pubmatic’s Q3 results reflect a mix of resilience and challenges. While CTV and emerging revenue streams drove growth, the sharp decline in operating margins and insider selling activity underscore financial vulnerabilities. The CEO’s focus on AI and NVIDIA collaboration positions the company to capitalize on programmatic advertising trends, but execution risks remain. Investors must weigh short-term optimism against long-term profitability concerns.