PubMatic (PUBM 4.29%) held its fourth-quarter and full-year 2024 earnings call on February 27, 2025. The advertising technology company delivered 9% revenue growth for the full year despite headwinds from a major demand-side platform (DSP) partner that changed its bidding approach. Management highlighted continued success in high-growth areas like connected TV (CTV), mobile app, and emerging revenue streams while managing margins effectively. Here are the three most important takeaways for long-term investors.
CTV Business Reaches 20% of Total Revenue
PubMatic's strategic investments in connected TV are paying off significantly as the company continues to capture market share in this high-growth segment. CTV revenue has become a material contributor to the business.
CTV revenue more than doubled in 2024 and in Q4 reached 20% of total revenue. Mobile app increased 16% and represented 20% of total revenue. Emerging revenue streams doubled in 2024.
-- Steven Pantelick, Chief Financial Officer
This rapid growth demonstrates PubMatic's success in diversifying away from traditional display advertising and positioning itself in high-engagement, high-value formats where programmatic advertising is still in early adoption phases.
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Key Data Points
Revenue Diversification Beyond Traditional Display
Despite headwinds from one major DSP buyer, PubMatic's underlying business showed robust growth in key strategic areas, reflecting a successful pivot toward higher-growth segments in the advertising ecosystem.
Excluding revenue from this DSP and political advertising, Q4 revenue was up 16% year over year. I'm particularly pleased with the scale of our CTV business, which represented 20% of our Q4 revenue, more than doubling its share of our business versus the prior year.
-- Rajeev K. Goel, Co-Founder, CEO, and Director
This strong underlying growth suggests PubMatic is successfully executing its diversification strategy, making it less dependent on any single revenue source while capturing emerging opportunities in the digital advertising landscape.
Supply Path Optimization Driving Growth
PubMatic continues to gain traction with its supply path optimization (SPO) strategy, with major advertising agencies consolidating their buying on the platform. This shift creates a flywheel effect by attracting both premium publishers and valuable data providers.
We crossed a major milestone in 2024, with more than half of the activity on our platform, 53% transacted via supply path optimization. This is up from 1/3 of activity just 2 years ago, driven by new media buyers on the platform and expanding customers via multiyear strategic partnerships.
-- Rajeev K. Goel, Co-Founder, CEO, and Director
The increase in SPO activity reflects growing industry adoption of more efficient and transparent advertising supply chains, with PubMatic positioned as a key technology provider in this evolution.
Looking Ahead
PubMatic's management expressed confidence in the company's strategic position despite near-term challenges with a specific DSP partner. The business transformation toward high-growth areas is evident in the results.
We are confident that our growth strategies are on track, and we are well positioned to execute them. Over the first half of 2025, as previously called out, we will be transitioning through the lower year-over-year spend levels by this DSP buyer until we lap it at the end of Q2.
-- Steven Pantelick, Chief Financial Officer
With focused investments in CTV, mobile app, commerce media, and data curation, along with operational efficiency from generative artificial intelligence, PubMatic appears well positioned for sustainable growth. As CEO Rajeev Goel emphasized, "The investments we've made put us at the forefront of this shift, and I couldn't be more proud of the business we are today and the opportunities that now lie ahead of us."
