eResearch | Last week, PubMatic, a U.S. technology company that operates a cloud-driven advertisement platform, announced plans for an initial public offering (“IPO”). PubMatic filed its Form S-1 with the U.S. Securities and Exchange Commission, with plans to lists on the NASDAQ stock market under the ticker “PUBM”.
Jefferies Group and Royal Bank of Canada (TSX:RY) are expected to act as joint book-running managers. Co-managers for the IPO include JMP Group (NYSE:JMP), KeyCorp (NYSE:KEY), Oppenheimer Holdings (NYSE:OPY), and Raymond James Financial (NYSE:RJF).
PubMatic’s most recent funding round was in 2013 when NGP Capital invested $13 million. Investors from PubMatic’s prior funding rounds include Helion Venture Partners, Nexus Venture Partners, and SVP Financial Group (NASDAQ:SIVB).
PubMatic
PubMatic operates a programmatic advertising platform, driven by cloud infrastructure, which automates transactions between content publishers and advertisers.
According to ResearchAndMarkets, the global programmatic advertising platform market is estimated at $5 billion this year and is projected to reach $34 billion by 2027, growing at a CAGR of 31%.
The platform leverages artificial intelligence and machine learning to collect and analyze large amounts of data to allow real-time optimization of ad transactions.
PubMatic believes its platform can increase publisher revenue, advertiser return on investment, and marketplace liquidity while improving overall cost efficiency and transparency.
FIGURE 1: PubMatic Advertisement Platform
PubMatic supports 1,100 publishers and app developers that operate 55,000 domains and 8,000 apps, by facilitating approximately 134 billion ad impressions per day. Various content verticals sell ad space on PubMatic’s platform, including news, eCommerce, gaming, media, weather, fashion, and technology.
Publishers on PubMatic’s platform include companies such as Verizon Media, a division of Verizon Communications (NYSE:VZ), and News Corp (NASDAQ:NWSA). App developers on PubMatic’s platform include companies such as Zynga (NASDAQ:ZNGA) and Electronic Arts (NASDAQ:EA).
PubMatic connects its partnered publishers and app developers to an average of 68,000 advertisers per month, while processing over 1 trillion advertiser bids per day.
The platform is currently offered in the U.S., the U.K., Indonesia, Netherlands, Singapore, Japan, and South Korea.
PubMatic Financials
As the number of digital advertisement channels grows with the introduction of various new content creation platforms, PubMatic has achieved a track record of consistent revenue growth.
For the nine months ended September 30, 2020, PubMatic generated revenue of $93 million, a 16% increase from the same period last year, and a net income of $7.8 million, a 209% increase from the same period last year.
In 2019, PubMatic reported revenue of $114 million, a 15% increase year-over-year, and a net income of $6.6 million, a 50% increase year-over-year.
In addition to growing its top line, PubMatic has reported a positive net income since 2016, supported by a highly efficient infrastructure. Last year, the Company decreased its cost of revenue per impression processed by 18%, attributed to the optimization of its infrastructure.
Programmatic Advertising Platform Market
As consumers become more digitally connected through mobile devices and innovative technologies, online advertisements have quickly grown in demand. Publishers and advertisers seek a transparent and efficient method to manage transactions and marketing performances.
Other public technology companies focused on digital advertisement platforms include The Trade Desk (NASDAQ:TTD). Since listing publicly in 2016 with an IPO price of $18 per share, The Trade Desk’s stock price has increased by over 4000% to $827.
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