Digital advertising technology company PubMatic (NASDAQ: PUBM) reported revenue ahead of Wall Street’s expectations in Q2 CY2026, with sales up 10.5% year on year to $78.59 million. On top of that, next quarter’s revenue guidance ($76 million at the midpoint) was surprisingly good and 7.3% above what analysts were expecting. Its non-GAAP profit of $0.12 per share was significantly above analysts’ consensus estimates.

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StockStory’s Take

PubMatic’s second quarter results were well received by the market, as the company’s return to double-digit revenue growth surpassed analyst expectations. Management attributed this momentum to increased adoption of its agentic advertising platform, AgenticOS, and ongoing diversification into channels like connected TV (CTV) and mobile app. CEO Rajeev Goel highlighted the impact of these investments, noting that “approximately 60% of our business comes from CTV, mobile app and emerging revenues, all of which fuel profitable double-digit growth.” The company’s ability to leverage its AI-native infrastructure and proprietary data was cited as a key factor in delivering improved performance for advertisers.

Looking ahead, PubMatic’s guidance for the next quarter reflects confidence in continued growth, grounded in the acceleration of AI-powered products and expansion into emerging digital advertising segments. Management pointed to the scaling of AgenticOS and new capabilities like Decision Fabric as drivers for future adoption, with CFO Steven Pantelick emphasizing that “as revenues expand with our leveraged cost model, we expect Q4 adjusted EBITDA margin similar to last year’s fourth quarter, leading to meaningful full year margin expansion.” The company also expects increased contribution from political advertising and new partnerships, which could further broaden its customer base and revenue streams.

Key Insights from Management’s Remarks

Management attributed the quarter’s outperformance to the rapid adoption of its AI-driven products, a shift toward high-value advertising channels, and greater operational efficiency supported by automation and infrastructure investment.

• AI-driven platform adoption: PubMatic’s AgenticOS platform saw a sharp rise in campaign volume, with over 80 agentic campaigns delivered in the quarter, up from 30 the previous quarter. This adoption is credited with attracting new types of advertisers and driving more revenue through the platform.
• CTV and mobile app strength: Approximately 60% of total revenue now comes from CTV, mobile app, and emerging channels, which grew nearly 40% year-over-year. CTV in the Americas grew 25%, while mobile app revenue grew over 40%, driven by new product integrations and expanding publisher relationships.
• Emerging revenue momentum: The emerging revenue category, including new AI-powered products, nearly doubled year-over-year, reaching 15% of total revenue. Management highlighted increased adoption of Activate and Decision Fabric as key contributors to this growth.
• Operational leverage through automation: AI and automation enabled PubMatic to reduce gross impressions processed while increasing monetized impressions, resulting in improved efficiency and higher margins. The company’s headcount declined year-over-year due to these productivity gains, despite increased investment in go-to-market roles.
• Leadership transition and expansion: CFO Steven Pantelick announced his planned retirement, with a transition period through mid-2027. Megan Ramm was named Global Chief Revenue Officer, bringing direct-to-brand and performance advertising expertise to further scale commercial execution.

Drivers of Future Performance

PubMatic sees its AI-powered infrastructure, expansion into emerging ad formats, and continued operational leverage as central to its growth outlook for the remainder of the year.

• Scaling agentic advertising: Management expects AgenticOS and related AI products to drive further adoption among advertisers and agencies, leading to increased monetization rates and new sources of demand. The company believes the shift to agentic workflows will compress the traditional ad buying process, allowing more revenue to flow through its platform.
• Broader market access and partnerships: New partnerships with major publishers like Sony Pictures Entertainment and Channel 4, as well as expansion into the creator economy and live sports, are set to open new revenue streams. PubMatic anticipates that these initiatives will diversify its customer base and expand its addressable market.
• Efficiency and margin expansion: Continued investment in AI-driven automation is expected to improve operational efficiency and profitability. Management projects that this focus will allow additional investment in sales and infrastructure, while maintaining disciplined expense growth and supporting margin expansion.

Catalysts in Upcoming Quarters

In future quarters, the StockStory team will be monitoring (1) adoption rates and revenue impact from new AI-powered products like Decision Fabric and expanded AgenticOS capabilities, (2) the scale and profitability of new publisher partnerships and the creator marketplace, and (3) operational efficiency gains from automation and AI. Additional attention will be paid to the influence of political advertising on revenue and further diversification within digital ad verticals.

PubMatic currently trades at $17.81, up from $13.48 just before the earnings. Is the company at an inflection point that warrants a buy or sell? See for yourself in our full research report (it’s free).

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