PubMatic (PUBM) Q1 2026 earnings summary

Executive summary

• Q1 2026 revenue was $62.6 million, with adjusted EBITDA of $2.6 million, both exceeding guidance despite a 2% year-over-year revenue decline due to DSP platform changes and macroeconomic headwinds.

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

• Strategic transformation and AI-driven agentic advertising, along with diversified DSP mix, drove operational efficiency and global campaign scaling.

• Over 1,000 AI-powered publisher deals and 20+ AI agents active, with new partnerships expanding platform reach and data integrations.

• Platform advantages include scale, direct buying (Activate), AI agents, owned infrastructure, and robust data platform.

Financial highlights

• Q1 2026 revenue was $62.6 million and adjusted EBITDA was $2.6 million (4% margin), both above guidance.

• Free cash flow reached $10.7 million (17% margin), with $17.3 million in net operating cash flows, up 11% year-over-year.

• Q1 GAAP net loss was $12.5 million or -$0.27 per diluted share, with non-GAAP net loss at $5.4 million or -$0.11 per share.

• Ended Q1 2026 with $144.9 million in cash and no debt.

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

Outlook and guidance

• Q2 2026 revenue expected between $68 million and $70 million, with adjusted EBITDA of $8 million-$10 million and negative FX impact.

• Sequential margin expansion anticipated as revenue scales on a largely fixed cost base.

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

• Double-digit revenue growth and margin expansion expected in the second half as DSP headwinds are lapped.

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