Why PubMatic (PUBM) Is Up 18.7% After AI-Driven CTV Revenue Surge Outpaces Expectations

• PubMatic reported its third-quarter 2025 results last week, showing revenue of US$67.96 million and a net loss of US$6.45 million, both wider than the prior year period, but exceeding adjusted earnings and revenue expectations from analysts.
• The company spotlighted more than 50% year-over-year Connected TV ad revenue growth and emphasized the impact of its AI-driven innovations, developed with NVIDIA, which have contributed to increased publisher revenues and marketplace competitiveness.
• We'll examine how PubMatic's growth in AI and Connected TV is shaping its long-term investment narrative following these results.

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PubMatic Investment Narrative Recap

To be a PubMatic shareholder today, you need to believe in their ability to convert rapid Connected TV growth and AI innovation into sustainable revenue despite a challenging advertising market and persistent customer concentration risk. The recent earnings beat on adjusted metrics may buoy sentiment in the near term, yet the primary catalyst remains the transition of ad budgets to digital TV, while reliance on top DSP buyers remains the most significant risk, particularly as guidance for Q4 points to continued headwinds. The latest results did not fundamentally alter these dynamics, as underlying sales are still declining and management anticipates pressure from shifting DSP relationships.

Among recent announcements, PubMatic’s Q4 revenue guidance of US$73 million to US$77 million stands out since it includes expected headwinds from a major DSP buyer. This guidance offers some visibility into near-term performance and suggests that diversification efforts are ongoing but not yet sufficient to fully offset concentration risks. Investors should keep a close watch on how changes in top buyer relationships affect quarterly numbers, because even a single DSP change can...

Read the full narrative on PubMatic (it's free!)

PubMatic's narrative projects $302.3 million revenue and $30.6 million earnings by 2028. This requires 1.1% yearly revenue growth and a $32.3 million earnings increase from current earnings of -$1.7 million.

Uncover how PubMatic's forecasts yield a $11.17 fair value, a 17% upside to its current price.

Exploring Other Perspectives

Simply Wall St Community members offered four diverse fair value estimates for PubMatic, ranging from US$9.19 to over US$275 per share. With revenue still concentrated among two DSP partners, participants should weigh how customer concentration could shape future outcomes beyond consensus expectations.

Explore 4 other fair value estimates on PubMatic - why the stock might be worth just $9.19!

Build Your Own PubMatic Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your PubMatic research is our analysis highlighting 1 key reward and 2 important warning signs that could impact your investment decision.
• Our free PubMatic research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate PubMatic's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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