Delivered record Q4 2021 revenue of $75.6 million, representing 34% growth, GAAP net income margin of 37% and adjusted EBITDA margin of 51%Full year record revenue of $226.9 million, representing 53% growth, GAAP net income margin of 25% and adjusted EBITDA margin of 42%
NO-HEADQUARTERS/REDWOOD CITY, Calif., Feb. 28, 2022 (GLOBE NEWSWIRE) -- PubMatic, Inc. (Nasdaq: PUBM), an independent technology company delivering digital advertising’s supply chain of the future, today reported financial results for the fourth quarter and fiscal year ended December 31, 2021.
“For the second consecutive year, we delivered an incredible combination of revenue growth and profitability. Organic revenue growth in 2021 was 53% over last year, reflecting significant market share gains in a large and rapidly growing market,” said Rajeev Goel, co-founder and CEO at PubMatic. “PubMatic delivers the digital advertising supply chain of the future where both publishers and buyers can maximize value. Our infrastructure-driven approach, combined with our usage-based software model, strengthens our competitive advantages and funds continuous innovation and investment in future growth. This flywheel underpins our strong position in the market and I couldn’t be more excited about the number and magnitude of growth opportunities in front of us.”
Fourth Quarter 2021 Financial Highlights
Fiscal Year 2021 Financial Highlights
The section titled “Non-GAAP Financial Measures” below describes our usage of non-GAAP financial measures. Reconciliations between historical GAAP and non-GAAP information are contained at the end of this press release following the accompanying financial data.
Business Highlights
“2021 was an outstanding year for PubMatic. We outpaced the growth of the overall market, delivered record profits and cash flow, and significantly invested for continued long-term growth,” said Steve Pantelick, CFO at PubMatic. “Over the last two years, we doubled our revenue and scaled the business very profitably. Our business is emerging with structurally higher levels of profitability than prior to the pandemic, with an anticipated annual adjusted EBITDA margin of 35% plus for fiscal year 2022. With the strength and durability of our model, coupled with numerous growth opportunities from existing and new products, we are confident in our 25% profitable revenue growth target for 2022.”
Financial OutlookOur guidance assumes that the global economy continues to recover and we do not have any major COVID-19-related setbacks that may cause economic conditions to deteriorate or otherwise significantly reduce advertiser demand. Accordingly, we estimate the following:
Although we provide guidance for adjusted EBITDA, we are not able to provide guidance for net income, the most directly comparable GAAP measure. Certain elements of the composition of GAAP net income, including stock-based compensation expenses, are not predictable, making it impractical for us to provide guidance on net income or to reconcile our adjusted EBITDA guidance to net income without unreasonable efforts. For the same reason, we are unable to address the probable significance of the unavailable information.
Conference Call and Webcast detailsPubMatic will host a conference call to discuss its financial results on Monday, February 28, 2022 at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time). A live webcast of the call can be accessed from PubMatic’s Investor Relations website at https://investors.pubmatic.com. An archived version of the webcast will be available from the same website after the call.
Non-GAAP Financial MeasuresIn addition to our results determined in accordance with U.S. generally accepted accounting principles (“GAAP”), including, in particular operating income, net cash provided by operating activities, and net income, we believe that adjusted EBITDA, adjusted EBITDA margin, non-GAAP net income and non-GAAP diluted EPS, each a non-GAAP measure, are useful in evaluating our operating performance. We define adjusted EBITDA as net income adjusted for stock-based compensation expense, depreciation and amortization, unrealized gains on equity investments, impairments of long-lived assets, interest income, and provision for income taxes. Adjusted EBITDA margin represents adjusted EBITDA calculated as a percentage of revenue. We define non-GAAP net income as net income adjusted for stock-based compensation expense, unrealized gains/losses on equity investments and the income tax impact on those adjustments. In order to calculate non-GAAP diluted EPS, we use a non-GAAP weighted-average share count. We define non-GAAP weighted-average shares, diluted, as GAAP weighted average shares used to compute net income per share attributable to common stockholders adjusted to reflect the common stock issued in connection with our initial public offering that are outstanding as of the end of the period as if they were outstanding as of the beginning of the period for comparability.
In addition to operating income and net income, we use adjusted EBITDA and non-GAAP net Income as measures of operational efficiency. We believe that these non-GAAP financial measures are useful to investors for period to period comparisons of our business and in understanding and evaluating our operating results for the following reasons:
Our use of these non-GAAP financial measures have limitations as analytical tools, and you should not consider them in isolation or as a substitute for analysis of our financial results as reported under GAAP. Some of these limitations are as follows:
Because of these and other limitations, you should consider adjusted EBITDA and non-GAAP net income along with other GAAP-based financial performance measures, including net income and our GAAP financial results.
Forward Looking StatementsThis press release contains “forward-looking statements” regarding our future business expectations, including our guidance relating to our revenue and adjusted EBITDA for the first quarter of 2022 and the full year 2022. These forward-looking statements are based on our current expectations and assumptions regarding our business, the economy and other future conditions and may differ materially from actual results due to a variety of factors including: our dependency on the overall demand for advertising and the channels we rely on; our existing customers not expanding their usage of our platform, or our failure to attract new publishers and buyers; the rejection of the use of digital advertising by consumers through opt-in, opt-out or ad-blocking technologies or other means; our failure to innovate and develop new solutions that are adopted by publishers; the ongoing COVID-19 pandemic, including the resulting global economic uncertainty; limitations imposed on our collection, use or disclosure of data about advertisements; any failure to scale our platform infrastructure to support anticipated growth and transaction volume; liabilities or fines due to publishers, buyers, and data providers not obtaining consents from consumers for us to process their personal data; any failure to comply with laws and regulations related to data privacy, data protection, information security, and consumer protection; and our ability to manage our growth. For more information about risks and uncertainties associated with our business, please refer to the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” sections of our SEC filings, including but not limited to, our annual report on Form 10-K and quarterly reports on From 10-Q, copies of which are available on our investor relations website at https://investors.pubmatic.com and on the SEC website at www.sec.gov. All information in this press release is as of February 28, 2022. We 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.
About PubMaticPubMatic is an independent technology company maximizing customer value by delivering digital advertising’s supply chain of the future. PubMatic’s sell-side platform empowers the world’s leading digital content creators across the open internet to control access to their inventory and increase monetization by enabling marketers to drive return on investment and reach addressable audiences across ad formats and devices. Since 2006, PubMatic’s infrastructure-driven approach has allowed for the efficient processing and utilization of data in real time. By delivering scalable and flexible programmatic innovation, PubMatic improves outcomes for its customers while championing a vibrant and transparent digital advertising supply chain.
CONDENSED CONSOLIDATED BALANCE SHEETS(In thousands)(unaudited) | |||||||
December 31, | December 31, | ||||||
ASSETS | 2021 | 2020 | |||||
Current Assets | |||||||
Cash and cash equivalents | $ | 82,505 | $ | 81,188 | |||
Marketable securities | 77,121 | 19,793 | |||||
Accounts receivable - net | 286,916 | 219,511 | |||||
Prepaid expenses and other current assets | 14,207 | 6,622 | |||||
Total Current Assets | 460,749 | 327,114 | |||||
Property, equipment and software - net | 50,140 | 30,044 | |||||
Operating lease right-of-use assets | 21,613 | — | |||||
Goodwill | 6,250 | 6,250 | |||||
Deferred income tax asset | 515 | 762 | |||||
Other assets, non-current | 10,948 | 7,076 | |||||
TOTAL ASSETS | $ | 550,215 | $ | 371,246 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Current Liabilities | |||||||
Accounts payable | $ | 244,321 | $ | 176,731 | |||
Accrued expenses and other current liabilities | 18,780 | 14,844 | |||||
Operating lease liabilities, current | 3,864 | — | |||||
Total Current Liabilities | 266,965 | 191,575 | |||||
Operating lease liabilities, non-current | 17,842 | — | |||||
Deferred tax liability | 6,067 | 1,561 | |||||
Other liabilities, non-current | 2,161 | 2,683 | |||||
TOTAL LIABILITIES | 293,035 | 195,819 | |||||
Stockholders' Equity: | |||||||
Common stock | 6 | 6 | |||||
Treasury stock | (11,486 | ) | (11,434 | ) | |||
Additional paid-in capital | 169,401 | 144,163 | |||||
Accumulated other comprehensive income | (36 | ) | 1 | ||||
Retained earnings | 99,295 | 42,691 | |||||
Total Stockholders' Equity | 257,180 | 175,427 | |||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 550,215 | $ | 371,246 | |||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(In thousands, except share and per share data)(unaudited) | |||||||||||||
Three Months EndedDecember 31, | Year EndedDecember 31, | ||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||
Revenue | $ | 75,556 | $ | 56,242 | $ | 226,908 | $ | 148,748 | |||||
Cost of revenue(1) | 16,905 | 11,450 | 58,313 | 41,186 | |||||||||
Gross profit | 58,651 | 44,792 | 168,595 | 107,562 | |||||||||
Operating expenses:(1) | |||||||||||||
Technology and development | 4,147 | 2,970 | 15,885 | 12,250 | |||||||||
Sales and marketing | 16,369 | 13,155 | 58,160 | 43,297 | |||||||||
General and administrative | 10,168 | 6,461 | 35,761 | 20,260 | |||||||||
Total operating expenses | 30,684 | 22,586 | 109,806 | 75,807 | |||||||||
Operating income | 27,967 | 22,206 | 58,789 | 31,755 | |||||||||
Total other income (expense), net | 5,776 | (518 | ) | 6,014 | (175 | ) | |||||||
Income before provision for income taxes | 33,743 | 21,688 | 64,803 | 31,580 | |||||||||
Provision for income taxes | 5,504 | 2,863 | 8,199 | 4,967 | |||||||||
Net income | $ | 28,239 | $ | 18,825 | $ | 56,604 | $ | 26,613 | |||||
Net income per share attributable to common stockholders: | |||||||||||||
Basic | $ | 0.55 | $ | 0.39 | $ | 1.13 | $ | 0.51 | |||||
Diluted | $ | 0.50 | $ | 0.34 | $ | 1.00 | $ | 0.46 | |||||
Weighted-average shares used to compute net income per | |||||||||||||
share attributable to common stockholders: | |||||||||||||
Basic | 51,460,452 | 19,980,116 | 50,184,455 | 12,642,293 | |||||||||
Diluted | 56,772,672 | 27,187,532 | 56,628,574 | 17,125,882 |
(1)Stock based compensation expense includes the following:
STOCK BASED COMPENSATION EXPENSE(In thousands)(unaudited) | |||||||||||
Three Months EndedDecember 31, | Year EndedDecember 31, | ||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||
Cost of revenue | $ | 220 | $ | 56 | $ | 825 | $ | 86 | |||
Technology and development | 586 | 222 | 2,232 | 599 | |||||||
Sales and marketing | 1,337 | 380 | 5,176 | 1,101 | |||||||
General and administrative | 1,456 | 466 | 5,874 | 1,777 | |||||||
Total stock-based compensation | $ | 3,599 | $ | 1,124 | $ | 14,107 | $ | 3,563 | |||
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS(In thousands)(unaudited) | |||||||
December 31, | |||||||
2021 | 2020 | ||||||
CASH FLOW FROM OPERATING ACTIVITIES: | |||||||
Net Income | $ | 56,604 | $ | 26,613 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 23,073 | 15,743 | |||||
Unrealized gain on equity investment | (5,433 | ) | — | ||||
Stock-based compensation | 14,107 | 3,563 | |||||
Provision for doubtful accounts | — | 319 | |||||
Deferred income taxes | 4,753 | 2,933 | |||||
Accretion of discount on marketable securities | (45 | ) | (145 | ) | |||
Non-cash lease expense | 2,042 | — | |||||
Other | 45 | 189 | |||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | (67,405 | ) | (102,175 | ) | |||
Prepaid expenses and other assets | (7,681 | ) | (2,801 | ) | |||
Accounts payable | 68,301 | 77,357 | |||||
Accrued expenses | 3,530 | 3,452 | |||||
Operating lease liabilities | (2,283 | ) | — | ||||
Other liabilities, non-current | (927 | ) | (718 | ) | |||
Net cash provided by operating activities | 88,681 | 24,330 | |||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||
Purchases of and deposits on property and equipment | (30,432 | ) | (24,177 | ) | |||
Capitalized software development costs | (8,929 | ) | (7,226 | ) | |||
Purchases of marketable securities | (90,562 | ) | (36,704 | ) | |||
Proceeds from sales of marketable securities | — | 2,295 | |||||
Proceeds from maturities of marketable securities | 33,200 | 35,950 | |||||
Purchase of equity securities | — | (15 | ) | ||||
Net cash used in investing activities | (96,723 | ) | (29,877 | ) | |||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||
Proceeds from initial public offering, net of underwriting discounts and commissions and other offering costs | (806 | ) | 45,811 | ||||
Proceeds from repayments of stockholders’ notes receivable | — | 4,268 | |||||
Proceeds from issuance of common stock for employee stock purchase plan | 4,804 | — | |||||
Proceeds from exercise of stock options | 5,423 | 2,409 | |||||
Principal payments on finance lease obligations | (10 | ) | — | ||||
Payments to acquire treasury stock | (52 | ) | (3 | ) | |||
Net cash provided by financing activities | 9,359 | 52,485 | |||||
NET INCREASE IN CASH AND CASH EQUIVALENTS | 1,317 | 46,938 | |||||
CASH AND CASH EQUIVALENTS - Beginning of year | 81,188 | 34,250 | |||||
CASH AND CASH EQUIVALENTS - End of year | $ | 82,505 | $ | 81,188 | |||
NON-GAAP FINANCIAL METRICS(In thousands, except per share amounts)(unaudited)
The following tables show the Company’s non-GAAP financial metrics reconciled to the comparable GAAP financial metrics included in this release.
Three Months EndedDecember 31, | Year EndedDecember 31, | ||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||
Net income | $ | 28,239 | $ | 18,825 | $ | 56,604 | $ | 26,613 | |||||||
Add back (deduct): | |||||||||||||||
Stock-based compensation | 3,599 | 1,124 | 14,107 | 3,563 | |||||||||||
Depreciation and amortization | 7,081 | 4,169 | 23,073 | 15,743 | |||||||||||
Unrealized gain on equity investments | (5,433 | ) | — | (5,433 | ) | — | |||||||||
Interest income | (92 | ) | (62 | ) | (300 | ) | (537 | ) | |||||||
Provision for income taxes | 5,504 | 2,863 | 8,199 | 4,967 | |||||||||||
Adjusted EBITDA | $ | 38,898 | $ | 26,919 | $ | 96,250 | $ | 50,349 | |||||||
Three Months EndedDecember 31, | Year EndedDecember 31, | ||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||
Net income | $ | 28,239 | $ | 18,825 | $ | 56,604 | $ | 26,613 | |||||||
Add back (deduct): | |||||||||||||||
Unrealized gain on equity investments | (5,433 | ) | — | (5,433 | ) | — | |||||||||
Stock-based compensation | 3,599 | 1,124 | 14,107 | 3,563 | |||||||||||
Adjustment for income taxes | 669 | (200 | ) | (603 | ) | (493 | ) | ||||||||
Non-GAAP Net Income | $ | 27,074 | $ | 19,749 | $ | 64,675 | $ | 29,683 | |||||||
GAAP diluted EPS | $ | 0.50 | $ | 0.34 | $ | 1.00 | $ | 0.46 | |||||||
Non-GAAP diluted EPS | $ | 0.48 | $ | 0.36 | $ | 1.14 | $ | 0.53 | |||||||
Weighted average shares outstanding—diluted | 56,772,672 | 27,187,532 | 56,628,574 | 17,125,882 |
____________________
1 Fourth quarter 2021 and fiscal year 2021 GAAP net income includes an unrealized gain on equity investments. Net of income taxes, the impact was $4.2 million.
2 Net dollar-based retention is calculated by starting with the revenue from publishers in the trailing twelve months ended December 31, 2020 (“Prior Period Revenue”). We then calculate the revenue from these same publishers in the trailing twelve months ended December 31, 2021 (“Current Period Revenue”). Current Period Revenue includes any upsells and is net of contraction or attrition, but excludes revenue from new publishers. Our net dollar-based retention rate equals the Current Period Revenue divided by Prior Period Revenue. Net dollar-based retention rate is an important indicator of publisher satisfaction and usage of our platform, as well as potential revenue for future periods.3 References to connected TV (CTV) include over-the-top (OTT).
Investors: The Blueshirt Group for PubMaticinvestors@pubmatic.com Press Contact: Broadsheet Communications for PubMaticpubmaticteam@broadsheetcomms.com Source: PubMatic, Inc.