On November 10, 2025, PubMatic, Inc. (Nasdaq: PUBM) released its financial results for the third quarter ending September 30, 2025. As an independent technology company that is shaping the future of digital advertising, PubMatic's latest report reveals both impressive growth in certain segments and challenges that the company is actively addressing.

1. Growth in Connected TV (CTV) Advertising

Rajeev Goel, co-founder and CEO of PubMatic, highlighted the company’s remarkable growth trajectory, particularly in the Connected TV (CTV) space. The company reported over 50% year-over-year growth in CTV revenue, excluding political advertising, a figure that significantly outpaces the broader market growth. Goel emphasized that this success is indicative of the power and versatility of PubMatic's platform, along with its robust innovation pipeline.

2. Financial Highlights of Q3 2025

Despite the positive growth in specific segments, the overall financial performance revealed some challenges:

Revenue: For Q3 2025, revenue was reported at $68.0 million, a decline from $71.8 million in Q3 2024. The previous year’s results included $5.0 million from political advertising, which was not a factor this quarter.

Net Dollar-Based Retention: The net dollar-based retention rate stood at 98% for the trailing twelve months ending September 30, 2025. This marks a significant decrease from 112% in the same period a year prior, indicating potential challenges in customer retention.

GAAP Net Loss: The company posted a GAAP net loss of $6.5 million, or $0.14 per diluted share, compared to a loss of $0.9 million, or $0.02 per diluted share, in Q3 2024. This reflects a widening loss margin, which came in at (9%) this quarter versus (1%) last year.

Adjusted EBITDA: PubMatic's adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) was reported at $11.2 million, which translates to a margin of 16%. This is a decline from $18.5 million and a 26% margin in Q3 2024.

Non-GAAP Net Income: The company recorded a non-GAAP net income of $1.6 million, equating to $0.03 per diluted share, down from $6.6 million, or $0.12 per diluted share, in the same quarter of the previous year.

3. Strong Cash Flow and Share Repurchase Program

Despite the declines in some financial metrics, PubMatic demonstrated strong operational cash flow. The net cash provided by operating activities increased to $32.4 million, compared to $19.1 million in the same period last year. Additionally, the company reported a robust cash position, with total cash and cash equivalents amounting to $136.5 million and no outstanding debt.

Since the inception of its share repurchase program, PubMatic has utilized $180.6 million to buy back 12.4 million shares of Class A common stock, representing 24% of fully diluted shares.

4. AI Leadership and Future Outlook

Goel underscored PubMatic's commitment to innovation and leadership in artificial intelligence (AI). The collaboration with NVIDIA is cited as a key differentiator, positioning the company’s infrastructure as years ahead of its competitors. The introduction of a new AI platform for buyers and publishers is expected to deepen the company’s competitive moat and unlock additional revenue opportunities.

In a rapidly evolving advertising landscape, PubMatic is not just responding to industry changes but actively shaping its future, focusing on enhancing advertising performance, transparency, and automation.

5. Conclusion

As PubMatic navigates the complexities of a changing market, its latest financial results reflect a blend of growth potential and challenges. With strong cash flow and significant investments in AI, the company is poised to continue its trajectory in the digital advertising space, even as it addresses retention and profitability concerns. Investors and industry watchers will be keenly observing how PubMatic leverages its strengths to turn around the metrics that fell short this quarter.

Original press release