PubMatic (PUBM) Q1 2026 earnings summary

Executive summary

• Q1 2026 revenue was $62.6 million, with adjusted EBITDA of $2.6 million (4% margin), both exceeding guidance, driven by rapid AI adoption, diversified DSP mix, and operational efficiency gains, despite a 2% year-over-year revenue decline due to platform changes by a major DSP buyer and macroeconomic headwinds.

• Underlying business grew 13% year-over-year, with emerging AI-driven revenues up over 80% and now 14% of total revenues, fueled by AgenticOS and autonomous campaigns.

• Strategic transformation and partnerships with Walmart Connect, PayPal Ads, and Amazon DSP expanded platform reach and data integrations.

• Platform processed over 1 trillion impressions per day in March 2026, with significant workflow and efficiency gains from AI and infrastructure investments.

• Net loss widened to $12.5 million or -$0.27 per diluted share, compared to $9.5 million or -$0.20 per share in Q1 2025, reflecting higher operating expenses.

Financial highlights

• Q1 2026 revenue: $62.6 million; adjusted EBITDA: $2.6 million (4% margin); GAAP net loss: $12.5 million or -$0.27 per diluted share; non-GAAP net loss: $5.4 million or -$0.11 per share.

• Free cash flow: $10.7 million (17% margin), up from $7.3 million in Q1 2025; net operating cash flow: $17.3 million, up 11% year-over-year.

• Cash and cash equivalents stood at $145 million at quarter-end, with zero debt.

• Gross margin decreased to 58% from 60% year-over-year, mainly due to lower revenue.

• 40th consecutive quarter of positive adjusted EBITDA.

Outlook and guidance

• Q2 2026 revenue expected between $68 million and $70 million, with adjusted EBITDA guidance of $8 million to $10 million and margin expansion anticipated.

• Full-year CapEx projected at $16 million–$19 million, focused on AI and advanced computing.

• Double-digit revenue growth and margin expansion anticipated in the second half of 2026 as DSP headwinds subside.

• Management expects macroeconomic and buyer platform changes to continue impacting revenue in the near term.

• Cost of revenue is expected to rise in absolute dollars in 2026 as data center investments continue.