Ad tech continues to do well for the Street.
After going public in December, sell-side platform PubMatic announced strong Q4 2020 earnings on Tuesday, beating estimates.
Compared to Q4 2019, PubMatic’s revenue rose 64%, totaling $56.2 million, while its adjusted EBITDA increased 190% to $26.9 million. For the full year, revenue approached $150 million ($148.7 million), a 31% increase.
“Our record performance demonstrates PubMatic’s differentiated market position across the digital advertising ecosystem,” said CEO and co-founder Rajeev Goel in the company’s earnings release. “We are executing well and growing organically… Our buyer supply path optimization relationships are expanding, and we are gaining market share in the large and growing global digital advertising market.”
The company attributed the growth to several factors, noting that mobile, digital video and CTV formats were fastest-growing, accounting for 65% of total revenue in Q4. Video was an especially strong segment for PubMatic, with omnichannel video revenues — including short form and CTV inventory — increasing 100% year-over-year.
PubMatic’s SSP is used by publishers like Verizon Media, News Corp and Future PLC, as well as app developers like Electronic Arts and Zynga.
A potential area of concern for PubMatic, however, is that Verizon Media accounts “for about 20% of revenue 2020,” which Goel shared during the earnings call. That’s down from 28% in 2019, with the company adding new publishers — 368 in 2020 — to reduce its dependency on Verizon.
Bear in mind, Verizon Media has its own SSP so why wouldn’t it shift its publisher business there? That would take away a massive chunk of PubMatic’s revenue, though the company is obviously working hard to future proof against such an outcome.
PubMatic expects its strong revenue growth to continue in Q1 2021, with revenue ranging from $38 to $40 million. That would be a 34% to 41% improvement over Q1 2020.
