Hello, everyone, and welcome to PubMatic's Fourth Quarter and Full-Year 2025 Earnings Call. My name is Rees, and I will be your Zoom operator today. Thank you for your attendance today. And as a reminder, this webinar is being recorded. I will now turn the call over to Stacie Clements.

Good afternoon, everyone, and welcome to PubMatic's Earnings Call for the Fourth Quarter and Full-Year 2025. This is Stacie Clements, and I'll be your operator today. Joining me on the call are Rajeev Goel, Co-Founder and CEO; and Steve Pantelick, CFO. Before we get started, I have a few housekeeping items. Today's prepared remarks have been recorded, after which Rajeev and Steve will host live Q&A. A copy of our press release can be found on our website at investors.pubmatic.com. I would like to remind participants that during this call, management will make forward-looking statements, including, without limitation, statements regarding our future performance, market opportunity, growth strategy and financial outlook. Forward-looking statements are based on our current expectations and assumptions regarding our business, the economy and future conditions. These forward-looking statements are subject to inherent risks, uncertainties and changes in circumstances that are difficult to predict. You can find more information about these risks, uncertainties and other factors in our forms filed from time to time with the Securities and Exchange Commission and are available at investors.pubmatic.com, including our most recent Form 10-K and any subsequent filings on Forms 10-Q or 8-K. Our actual results may differ materially from those contemplated by the forward-looking statements. We caution you, therefore, against relying on any of these forward-looking statements. All information discussed today is as of February 26, 2026, and we do not intend and undertake no obligation to update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law. In addition, today's discussion will include references to certain non-GAAP financial measures, including adjusted EBITDA, non-GAAP net income, cash flow from operations and free cash flow. These non-GAAP measures are presented for supplemental informational purposes only and should not be considered a substitute for financial information presented in accordance with GAAP. A reconciliation of these measures to the most directly comparable GAAP measures is available in our press release. And now, I will turn the call over to Rajeev.

Thank you, Stacie, and welcome, everyone. We delivered an exceptionally strong fourth quarter, with revenue and adjusted EBITDA ahead of guidance, healthy margins and strong cash flow. Our results highlight continued growth in our underlying business, our leadership position in AI solutions and the durability of our business model. For the full year, CTV grew over 50% year-over-year, excluding political, and Activate activity grew over 3x. Emerging revenues, which include Activate, commerce media and new AI solutions, nearly doubled over 2024 and now represent nearly 10% of total revenues. Over the past year, we made decisive moves to reposition PubMatic for renewed profitable growth. Those actions are bearing fruit and have directly contributed to our performance over the last two quarters. They have strengthened our competitive moat and have positioned us to deliver accelerated double-digit percentage growth for the second half of 2026. These moves represent the first critical steps of our 5-year road map designed to reaccelerate growth, expand margins and compound long-term shareholder value. This road map marks an important turning point for PubMatic and coincides with the pivotal transformation in the industry driven by AI. In fact, AI in the form of agentic advertising, has emerged as a new and incremental tailwind to our business. Advertising is entering a new phase, one defined by AI-driven autonomous systems operating in real-time. We sit at the center of a highly competitive, millisecond-level auction environment where value is determined by measurable outcomes such as yield, performance and efficiency. PubMatic is enabling AI adoption across the open Internet. Our proprietary data, scaled infrastructure and thousands of deep integrations across buyers and publishers form a real-time execution layer that cannot be replicated by generic software. Our leadership in agentic advertising gives us confidence we can shape this next evolution of digital advertising, and we are investing and executing aggressively to capture that opportunity. In October, we co-founded the Ad Context Protocol alongside Yahoo, LG Ad Solutions, Raptive and others, setting industry standards for safe and interoperable agent-to-agent interaction. In December, we partnered with Butler/Till and Geloso Beverage Group to launch the industry's first fully autonomous, end-to-end agentic campaign, proving that PubMatic's agents can execute media plans and optimize outcomes on behalf of advertisers. The campaign delivered more than 5x cost efficiencies, enabling significantly more advertiser spend to shift directly into working media. Following this success, the agency quickly launched a second campaign. In addition to delivering top-tier agentic performance, our AI-powered platform handles more complexity with significantly less manual effort. We are cutting campaign setup time by 87% and speeding up issue resolution time by 70%. This means faster activations, higher productivity and better outcomes for our customers. In January, agent-to-agent transactions became a scalable reality. At the Consumer Electronics Show, we unveiled AgenticOS alongside our launch partners including WPP Media, Foxtel Media, and multiple independent agencies and tech partners. As Skyler McGill, Head of Video and Programmatic at independent agency Wpromote put it, 'We're witnessing the biggest transformation in programmatic since real-time bidding. Our work with PubMatic puts us at the forefront of defining how human strategy and autonomous systems converge to unlock new capabilities in personalization and scale.' Now, building on this momentum, we recently delivered one of the industry's first agentic CTV advertising campaigns with Abovo Maxlead in Europe, integrating directly with the largest independent media agency in the Netherlands. Adoption of AgenticOS continues to be swift. We have already run over 250 agentic deals across our platform, many of which represent new and incremental advertisers to PubMatic. Our Agentic AI Accelerator Program enables customers and partners to launch live agentic campaigns within weeks and quickly scale usage. Remarkably, almost 100 brands, agencies and streamers have applied to join, making it the fastest early-stage adoption of any product we've launched. This strong uptake underscores two important and distinctive points. First is the magnitude of the secular growth opportunity as digital advertising adopts agentic AI. By 2028, I expect 25% of all digital advertising to be executed autonomously via agentic AI. And by 2030, I expect that to jump to 50%. As an early AI leader, this unlocks transformative growth for PubMatic long before our peers. With our scale already building in agentic AI, this leading advantage is widening, with each transaction enhancing our model's ability to drive improved performance, fueling long-term revenue growth and incremental margin expansion. And second, the opportunity is much bigger than simply technology revolution. Agentic AI will upend and collapse the industry's value chain, bringing advertisers and publishers much closer together. This will create a step-function change in advertising efficiency and effectiveness, which will significantly expand the open Internet advertising market in aggregate with new advertisers and increased budgets. In short, AI is an incremental tailwind for PubMatic, and we are uniquely positioned to take advantage of this opportunity with nearly 2,000 premium publisher integrations representing over 100,000 sites and apps, 250-plus data partners on Connect, our direct buying platform, Activate and our fully owned AI-enabled infrastructure. While the past 20 years were about real-time bidding, the next decade will be about AI-led intelligence that connects the entire customer journey. The depth of our publisher inventory, combined with our tech stack, gives PubMatic a clear competitive advantage in this transition. We own our own infrastructure, sit at the intersection of media and the consumer, and innovate rapidly without dependence on third parties. These strengths power our 3-layer architecture of advertising intelligence. At the infrastructure layer, our NVIDIA partnership enables next-gen AI models to run in our private cloud, with hardware and software solutions optimized for digital advertising. Owning our infrastructure also means that as compute requirements grow, our efficiency and margins expand with scale. At the application layer, AI is embedded into core workflows and publisher solutions that unlock new revenue opportunities. Nearly 10% of publishers on our platform are now deriving revenue from our AI solutions and generating incremental revenue for PubMatic. And at the transaction layer, Activate and AgenticOS are transforming how advertisers and publishers connect, delivering higher performance and efficiency. Together, these layers form a flywheel for growth. Each innovation drives usage and strengthens our long-term competitive moat. They also allow us to innovate around growing opportunities within open Internet advertising. We recently partnered with Kontext, a monetization layer for generative AI content experiences. Our integration enables publishers to monetize conversational AI experiences programmatically while maintaining control over their content, data and user experience. Our direct integrations and AI-first infrastructure position us well to support and scale as these and other emerging ad formats evolve. Even as agentic advertising accelerates, we remain sharply focused on the 5 strategic priorities we set mid last year. These priorities are fueling underlying growth across our platform and will underpin double-digit revenue expansion in the second half of 2026. First, we continued to diversify our buyer mix, integrating with 50 new DSP partners last year. The mid-market advertisers represented by these DSPs are the fastest-growing segment of the market as demand for performance-oriented solutions accelerates. This growth is reflected by the strength of the open Internet, which offers professionally created content and a growing logged-in user base across CTV and mobile app. This logged-in scale is critical for measurement, conversion and ROI, making the open Internet increasingly compelling for performance advertisers. Second, we grew our buyer-focused go-to-market team by nearly 20% year-over-year and strengthened that team with new leadership to support deeper market penetration and account expansion. These investments are translating into stronger direct relationships with brands and agencies, with Activate consistently delivering top-tier performance that drives repeat spend and broader adoption. For example, in an IPG Kinesso-led campaign, Activate outperformed on every key metric, generating 72% more clicks, 11% more impressions purchased and nearly 20% lower CPMs for a leading global oil company, upending their traditional approach to programmatic buying. Similarly, MiQ, a global programmatic partner, significantly boosted brand visibility. Using Activate, MiQ powered a CTV campaign that required transparent, show-level reporting, capabilities unavailable in its legacy buying platform. These outcomes demonstrate how Activate collapses the value chain in the open Internet, improving efficiency and ROI. What's more, with AgenticOS, Activate will increasingly serve as a gateway to AI-enabled advertising for a broad range of advertisers. Third, CTV remains one of our most exciting growth channels. We recently added a new marquee global streamer to our platform and now partner with 28 of the top 30 global streamers, including Roku, Samsung TV Plus, DirecTV, Fox Sports, Tubi, Vizio and more. This leadership continues to attract top global brands to our platform. Sony Network Communications recently chose PubMatic to seamlessly reach both linear and CTV audiences programmatically via our platform. The campaign highlights how PubMatic helps brands unlock new incremental customers while driving stronger monetization for CTV publishers. Longer term, this campaign illustrates how PubMatic's programmatic solutions can drive execution across linear formats. Similarly, our mobile app business continued to scale with major mediation solutions. Most recently, we announced that PubMatic's OpenWrap SDK is now integrated with one of the largest global mobile ad networks, Google AdMob and Google Ad Manager for mobile app. This integration gives buyers a direct connection to high-quality, brand-safe inventory. As we enter 2026, mobile remains a strong secular growth area for us, with more partnership announcements in the near future. Fourth, emerging revenues will continue to be a significant growth driver in 2026 as adoption increases across several new products, in particular, new AI-powered solutions. Strategically, these solutions strengthen our revenue model in two ways. They increase platform usage as automation drives more transactions and higher performance, and they introduce incremental revenue streams. For example, earlier this month, we announced AI Insights, which gives publishers actionable sales intelligence so they can maximize yield. Using these insights, leading CTV and online video publishers are unlocking 20%-plus higher CPMs. Realtor.com's Senior Vice President of Digital Media and Advertising, Yi-Fang Yen, explained that PubMatic's AI Insights deliver the timely market-level visibility we need to spot performance opportunities, understand shifts in demand and make confident real-time optimizations as conditions change. And finally, just as we are using AI to drive increased customer performance, we're also using AI to drive our own operational excellence. AI has become a core productivity engine across PubMatic, embedding into processes and work streams across the business. In engineering, over 40% of new code in the second half of 2025 was written by AI, boosting productivity and accelerating time to market. These efficiencies funded new investments in sales and marketing while slightly reducing overall headcount. We'll continue to drive increased productivity in 2026 through AI adoption, which in turn will fund investments for profitable growth. I'm proud of the progress we've made and the discipline with which we built a more durable, scalable growth model. As we enter 2026, we remain focused on our key strategic priorities: Activate adoption, DSP diversification and accelerating growth in CTV, mobile and emerging revenue streams. We expect these initiatives to drive double-digit year-over-year revenue growth in the second half of the year. Looking ahead, agentic AI is an incremental tailwind and a defining advantage for PubMatic. It enhances advertiser performance, expands our addressable market and increases the flow of budgets to the open Internet. With adoption accelerating faster than anticipated, PubMatic is leading the next wave of innovation, helping our customers drive better outcomes through more automated, intelligent and transparent advertising. We have the strategy, technology and team in place to capture the opportunities ahead and to create lasting value for our shareholders. I will now turn the call over to Steve.

Thank you, Rajeev, and welcome, everyone. Q4 was a pivotal turning point for us, as we significantly exceeded expectations on both revenue and adjusted EBITDA. Adjusting for political revenues and revenues derived from the legacy DSP referenced mid last year, the remainder of our business, which represented 83% of revenue in Q4, grew 18% year-over-year. This strong double-digit growth was driven from secular growth areas: CTV, mobile app and emerging revenues as well as solid performance in display. These results materially expanded our Q4 adjusted EBITDA margin to 35%, underscoring the efficiency and operating leverage of our business as incremental revenue dropped to profit. Our strong Q4 capped a year in which we established ourselves as an AI leader among our peers, successfully realigned our business to address dynamic changes in our industry and positioned the company for sustained profitable growth. Here are some of the notable achievements we delivered in 2025. We generated revenue and increased usage on our platform from newly launched AI solutions. These existing products, along with new products being launched in the coming months, provide an incremental tailwind for us in 2026. We ended the year with nearly 50% of our revenues coming from high-engagement, first-party data-rich environments of CTV, mobile app and emerging revenues. We added 50 new DSP partnerships and reshaped the mix of our largest DSPs towards fast-growing commerce and high value-add verticals like pharma. We increased productivity through the effective use of AI across every business function, enabling us to increase investment in revenue growth initiatives while reducing overall headcount. We accelerated our free cash flow by 32% compared to 2024. And we've made significant progress executing on our multi-year innovation road map, investing in key growth areas with operational discipline, supported by a strong financial profile. I'm incredibly proud of what the team has accomplished and the momentum we're carrying into 2026. Our multi-year journey transforming our business focused on high-value, high engagement and data-driven revenue streams is on track. Beginning with CTV, our 2025 results represented the fourth year in a row of significant organic revenue growth. Over this period, CTV's compound annual growth rate has been over 50%. We now monetize inventory from 28 of the top 30 global streamers and over 450 CTV publishers. It is a global business with approximately 60% of our customers in the Americas and 40% in the rest of the world. In Q4, we saw robust incremental monetized impression growth from both newly signed partnerships and existing publishers. The 4-year compound annual growth rate for our mobile app business has been 15% and in Q4, delivered over 25% year-over-year revenue growth. This performance reflects the ramp-up of strategic partnerships, ongoing product innovation and continued expansion of our global app publisher base. Emerging revenue streams in the fourth quarter grew over 75% year-over-year and represented roughly 12% of total revenues, driven by increased adoption across several new products. Just 3 years ago, emerging revenues represented less than 1% of revenues, demonstrating our ability to scale innovation and diversify our revenue base into high-value profitable areas. We've achieved double-digit percentage growth across our curation, data, commerce and Activate offerings. Notably, our new AI-powered solutions are already starting to scale. In just a few months, nearly 10% of publishers on our platform are now deriving revenue from our AI solutions and generating incremental revenue for PubMatic. We anticipate our AI solutions will provide an incremental and growing tailwind for us in 2026 and beyond. Display revenues in the fourth quarter returned to year-over-year growth in the mid-single-digit percentages. Excluding the legacy DSP referenced earlier, display revenues grew over 20% in the fourth quarter, significantly outpacing the market rate of growth. Turning to ad spend. We benefit from a diversified portfolio of ad verticals. In Q4, we saw strong year-over-year double-digit percentage growth in the shopping, health and fitness and technology and computing verticals. We saw some softness in the business and food and drink verticals, which declined year-over-year in the single-digit percentages. Overall, our top 10 ad verticals in aggregate grew nearly 10%. As Rajeev shared, we continue to expand our business beyond the largest legacy DSPs, focusing on both product innovation and targeted sales execution. These efforts gained momentum in Q4, with ad spend from our mid-market DSP partners up 30% year-over-year, accelerating from 25% growth in Q3. With the addition of 50 new DSP partners to our platform, we are well positioned to further diversify our buyer mix. Regionally, our APAC and EMEA businesses grew rapidly at over 25% and 15%, respectively, offsetting a minus 18% decline in the Americas, which was primarily due to spend declines from political advertising and a large DSP buyer. Throughout 2025, disciplined cost management and AI-enabled automation supported both growth and profitability. We significantly expanded infrastructure capacity, processing 337 trillion impressions, up 28% over 2024, while keeping cost of revenues relatively flat. On a trailing 12-month basis, unit costs declined 20% year-over-year, demonstrating the efficiency and scalability of our own infrastructure and the leveraged model that we built. We also harness AI and automation across our back-office functions to drive measurable and sustainable efficiency gains. For example, in legal, the application of AI-enabled contracting tools has reduced average contract cycle times by roughly 15%, while also supporting a higher overall contract volume. In accounting, we achieved over 35% efficiency gains in our procure-to-pay process, enhancing speed and control in our financial operations. In FP&A, we've significantly reduced manual data aggregation efforts by nearly one-third while maintaining analytical rigor via AI-assisted data processing and reporting. Collectively, these initiatives showcase how AI-driven automation is unlocking real productivity, cost efficiency and operational leverage across PubMatic. Illustrating this point, in the fourth quarter, total operating expenses were flat year-over-year. At the same time, we increased investments in revenue-driving initiatives, most notably our buyer-focused sales team, which increased by nearly 20% year-over-year. Q4 adjusted EBITDA was $27.8 million or 35% margin, which included a foreign exchange impact of approximately $0.5 million due to the weakening U.S. dollar over the quarter. Q4 GAAP net income was $6.7 million, or $0.14 per diluted share. Moving to cash and our capital allocation. Our balance sheet remains a core strategic advantage. We generated $81 million in net operating cash flows in 2025, up 10% over 2024. We delivered free cash flow of $46 million, a 32% increase over last year. In addition to our disciplined approach in managing our working capital, cash flow benefited from lower cash taxes following the new federal tax legislation. To underscore our long-term ability to generate cash, since the beginning of 2021 through Q4, we have generated over $410 million in net cash from operations and more than $220 million in free cash flow. We ended the quarter with $145.5 million in cash and zero debt. Our capital allocation strategy remains disciplined and balanced, focused on long-term shareholder value creation. We continue to invest in innovation and infrastructure to drive incremental organic growth while maintaining the flexibility to pursue strategic M&A opportunities. We've also made a long-term commitment to return capital to shareholders via our share repurchase program. Since the inception of our repurchase program in February 2023 through the end of Q4, we have bought back 12.4 million Class A common shares for $181.1 million. We have $93.9 million remaining in our repurchase program authorized through the end of 2026. Moving on to our outlook. In terms of the latest trends, our January revenues came in line with our expectations and ad spending was healthy. Factoring in the changes from the legacy DSP we called out mid-2025, we expect Q1 revenue to be in the range of $58 million to $60 million. Spend from this DSP continues to be stable and in line with normal seasonal patterns. We expect to lap this impact by the end of Q2. Excluding this DSP, the midpoint of our outlook implies year-over-year growth in the high single-digit percentages. Q1 adjusted EBITDA is expected to be in the range of minus $0.5 million to positive $1 million, which includes a negative foreign exchange impact due to the continued weakness of the U.S. dollar. As a reminder, we have a fixed cost model and margin scale as we gain leverage over the course of the year. Looking beyond Q1, we expect to return to double-digit revenue growth in the second half of this year, with a corresponding expansion of our margins from revenue growth, supported by disciplined investment and increased efficiencies from AI. Full year cost of revenue is expected to marginally increase in the low single digits, primarily due to industry-wide utility cost pass-throughs from data center providers beginning in Q1. We anticipate partially offsetting these costs by continued efficiency efforts already underway. Full-year operating expenses are expected to grow in the mid-single-digit percentages and include the cost to pursue our litigation against Google. Sequentially, quarterly operating expenses are anticipated to marginally increase in the low single-digit percentages. We will continue to invest in high-return AI revenue initiatives while pursuing cost savings unlocked by AI productivity efforts across all functional areas. Full-year CapEx is projected to be approximately $15 million to $19 million and reflects a shift away from investments for increased ad impression capacity and instead towards expanding support for AI workloads where we're seeing strong performance gains and revenue from our AI solutions. In closing, Q4 represented an important structural inflection point for PubMatic. As our secular growth engines in CTV, mobile app and emerging revenue scale, our model generates operating leverage. In Q4, we delivered 35% adjusted EBITDA margins and strong free cash flow, reinforcing the durability of our own infrastructure and fixed cost base. As we move through 2026, three dynamics give us confidence. First, revenue growth is broadening. We are increasingly diversified across DSPs, verticals, geographies and high-engagement environments, which reduces concentration and strengthens the resilience of our model. Second, AI is not just a product catalyst, it is a financial lever. We are simultaneously driving incremental revenue from AI-powered solutions while using AI to expand margins, improve productivity and fund growth investments. Few companies in our space are capturing both sides of that equation. Third, our balance sheet remains a strategic advantage. With approximately $146 million in cash and no debt, strong operating cash generation and nearly $94 million remaining under repurchase authorization, we have the flexibility to invest, return capital and pursue strategic opportunities, all while maintaining financial discipline. Importantly, we expect to return to double-digit revenue growth in the second half of this year, with corresponding margin expansion driven by revenue scale and AI-enabled efficiencies. We enter 2026 with a stronger revenue mix, a more efficient cost structure and a scalable AI-enabled platform. That combination positions us to expand margins, grow cash flow and create durable long-term shareholder value.

Our first question comes from Shweta Khajuria at Wolfe.

Could you please maybe speak to how you work with Amazon, what role Amazon plays with your partnership and in the industry as it relates to their involvement in the ad tech chain? Maybe that's not very well understood as we think about the supply side of it all.

Sure. We collaborate with Amazon in various ways and our partnership is developing as their advertising business expands. We are one of three SSPs in their Certified Supply Exchange program, which was publicly announced over a year ago. The aim of this program is to promote collaboration among our go-to-market teams for mutual growth both from a product and technology standpoint. This program has seen significant growth and has surpassed our targets for 2025, and we are optimistic about opportunities for growth in 2026. On the sell side, we monetize streaming inventory through our relationship with Amazon Publisher Services and Fire TV devices from nearly a dozen different streaming apps. We have been monetizing this inventory for multiple quarters, coupled with unique PubMatic ad demand to our streaming publishers while increasing the streaming inventory available to buyers on our platform. We also monetize omnichannel inventory, including non-streaming inventory such as mobile web and display via Amazon's Transparent Ad Marketplace. From a DSP standpoint, they have been expanding and are a top five buyer on PubMatic. We have worked together on various product releases, including traffic shaping for enhanced efficiency. There are several growth opportunities in the pipeline with them for 2026, and I look forward to sharing more about our partnership in the future.

Next question comes from Matt Condon, Citizens.

Just one for me. But Rajeev, as you take a step back and you look at this new AI world that we live in, it seems like ad platforms really need to differentiate on either data asset or access to unique inventory. As you think about PubMatic, just what are the structural assets that PubMatic has that really differentiates it from other platforms?

Yes. Thanks, Matt. So, I mean, first of all, I'd just say the interest and energy around agentic has been amazing to witness. I think we're seeing a wholesale revolution in how media is planned, transacted and optimized. And while it's early, we're well ahead of the curve on this. And just to kind of give a sense of where we see the opportunity, I think the last 10 to 15 years of the industry have really been about real-time bidding, right? So, optimizing that individual impression in real-time. But if we step back a little bit, we look at what's happening upstream and what's happening downstream, there's a lot of manual effort happening, discovery of inventory, planning, media plan, what inventory, what data, which users to go after pricing and then downstream of the actual RTB transaction. There's a lot of work to be done in measurement and optimization. So, now with the introduction of generative AI, we're in a position to automate all of those pieces and create a lot of value for the ecosystem in the process, right? And I think this is just kind of super obvious where we can leverage AI and allow humans to do more value-added work, more creative work and make advertising not only more effective, but also to make it a lot more efficient, which should grow the overall market opportunity as well as grow our addressable market. So, on your question about what's unique about how we're positioned, I think we are uniquely positioned to win in this arena for a few reasons. So, first is that we have a significant advantage with respect to deep customer integrations. So, you heard me talk about on the call, several thousand publishers representing over 100,000 sites and apps. So, we have code on those websites, in those apps, etc. That's a huge network effect where a buyer can effectively access the entire open Internet ecosystem on our platform. And that advantage only sits on the sell-side because of the yield optimization that we provide to publishers. Second, with Activate, buyers can now buy directly in our SSP, which really simplifies the end-to-end workflow and agentic communication. This is, I think, really critical because we are not in a position where we have to wait for standards to emerge so that sell-side tech and buy-side tech can communicate in a standardized protocol because we have Activate, which is direct buying in our SSP, we're free to innovate beyond any standards and so we can move a lot more quickly. Third is that we've launched AgenticOS to provide Model Context Protocol or MCP-enabled access to all of the core use cases on our platform and in the ecosystem. And we think we're well ahead of where the market is with AgenticOS. And then fourth, we have purpose-built AI infrastructure. So, we have owned and operated infrastructure, which we've partnered with NVIDIA on, and that enables us to run next-gen AI models in a customized hardware and software stack. And then finally, we have not only the data from our publisher base but also 250 data partners in our Connect data platform, providing very rich first-party data and commerce data and the like. So, when you put all of that together, that's why we're in the position we're in where we've gone from the first campaign in December to over 250 agentic campaigns being run in a very short period of time. I also want to just close by saying this is not something that can be built by a few developers with subscription access to AI tools. Even if you could recreate the application software overnight, generic software is not going to be tuned for high volume of transactions for high concurrency, for low latency, for efficient memory consumption, efficient storage. You need customized infrastructure for these advertising workloads, which has been built on over $100 million of capital expenditures. You need integrations with thousands of publishers and buyers around the world. You need commercial contracts in place, payment flows. So, we think we're in a really strong position to lead this revolution, which is much more than just technology. It's really something that's going to upend the entire value chain of the ecosystem.

Question comes from Barton Crockett at Rosenblatt.

I was curious, Rajeev, about your outlook for 2028 and 2030, specifically regarding 25% to 50% of the volume being agentic. When you mention volume agentic, do you see it functioning similarly to Butler/Till, where it would be processed through an LLM like Claude directly to your team? Might this streamline the industry, reduce fees, and possibly eliminate a DSP in the process?

Yes. So, I think it could happen in a variety of different ways, Barton. And to be clear, we're quite early, right, in this kind of opportunity and revolution here. So it could be through LLMs. It could be through buyer agents, so specialized agents that various tech companies are building or launching into the ecosystem. It could also be directly through our platform. It could be through an agent that a DSP builds. So, I think all of those are opportunities. I do think that with AgenticOS and Activate bidding directly within our SSP, we are creating more value and adding more value across the ecosystem. And I expect us to participate in that with increased revenue from those transactions, even at the same time as we're reducing the cost to transact advertising. So, I see a really strong dual benefit on both the top line and the bottom line.

Okay. But just to follow up, I mean, is it your vision that AI over time streamlines and reduces fees in open Internet? Is that basically your kind of base case of what happens, and you're just trying to position to be the player within that?

Yes, that is right. So, I do think, as I mentioned earlier, this is going to be not just technology, but a value chain disruptor. By that, what I mean is the supply side and the buy side, I believe, are going to come much closer together. Activate is a great example of that where a buyer can buy directly in our SSP. Of course, they can continue to choose to work with any of 150-ish DSPs that are integrated into our platform. So, I do think that we can create efficiency in the ecosystem. Part of that is operational overhead of people and systems and part of that can absolutely be fee efficiency. And it's probably natural to expect that as any industry scales up, including digital advertising, there should be more and more fee efficiency built over time.

Next question comes from Rob Coolbrith at Evercore.

Rajeev, I'd like to ask about the 5x cost improvement and campaign execution you mentioned, which led to an increase in working media dollars. Is this due to the elimination of supply chain operations, particularly the DSP, or is there more to it? Also, stepping back, there seem to be different visions for agentic—one where it complements existing programmatic infrastructure and another where it could replace it, potentially creating many isolated systems. I'm curious about why one approach might prevail over the other. Do you have a preference? It's possible you could be the driving force behind these many isolated systems. How do you see this developing over time? Will agentic lead to a more centralized or federated programmatic world?

Sure. Yes. So, just on the first part of that question, so the 5x cost efficiency, it's looking at the entire cost to execute a campaign, right? And so pre-agentic, there's a lot more manual activity involved, as I talked about earlier in terms of campaign setup and then in-flight optimization, post-campaign measurement. And then there's, of course, multiple technology partners in the mix with fees kind of pre-using the agentic approach with us. And then post, we look at, okay, how much manual activity came out of that process. How many third parties were eliminated and look at that efficiency as a percentage of the total media campaign, and that's where we get the 5x cost efficiency. So, these are pretty substantial. And what it leads to is that performance in the open Internet when transacted agentically can be much stronger than what it is today. And I think that can be a big driver of total addressable market and of the market that we're going after. On the second part of your question, yes, I would say like maybe a month or two ago, I heard a lot of conversation about is AdCP or agentic going to replace programmatic or real-time bidding. I definitely do not see that. I see what's happening with agentic capabilities and what we're building with customers to be complementary, meaning a lot of this work is being done on top of programmatic pipes where ultimately, transactions do need to be bided in real time. And AI is just not at a place where it can deliver at the low latency and high throughput that is needed. And so I very much see this as bringing a lot more volume into our platform.

Great. Steve, just to ask you a quick follow-up. Just versus the forecast, I wanted to maybe ask if you could take us through the top couple of drivers of upside in the quarter from your perspective, any key verticals, demand platform, supply platforms that they have outperformed?

Sure. Yes, no, obviously, we're very pleased with our Q4 outcome. We exceeded our expectations by a significant amount. And the good news is that it was all driven by areas that we've been investing and innovating to see key secular growth areas. So, we saw strong growth in emerging revenues, which grew over 75% in the fourth quarter year-over-year. We saw mobile app accelerate to 25% growth. And we saw CTV continue to perform double-digit rates. And so from our perspective, we had all the key areas that we've been investing, innovated around, deliver above expectations. At the same time, we also saw stability in the DSP change that we called out mid last year. So, that was stable and was a net neutral to positive. And then importantly, I think when you step back and think about what we've done as a business, we've been transforming our business over the last couple of years. And so the fourth quarter really distilled down all those key trends and sort of laid down the foundation. As Rajeev called out, we've diversified our DSPs in the mid-market. And so feel really good about the outcome in terms of exceeding expectations and the setup for 2026. Now with respect to particular ad verticals, I called out there were a couple, shopping, for example, was robust in the fourth quarter, and there was overall pretty healthy ad spend. So, I think it speaks to stability in the ad ecosystem, and that's our expectations in '26 that that's going to continue.

The next question comes from Matt Swanson, RBC.

Going back to what you were just talking about, Steve, but the question might be a little more for Rajeev, but just that DSP diversification. I mean, first of all, congratulations because I had no idea there were that many DSPs in the world that you're now working with. But could you just talk a little bit more after these last two years, kind of how much of a renewed point of emphasis that is within your company to make sure that you control everything that you can control and not get overly set on one or two large providers?

Yes. Sure. Let me take that off and then Steve, I'll hand it over to you. So, I think this is an exciting growth area for us, and we've made tremendous headway in expanding our DSP mix. If we go back a couple of years, the industry was characterized by DSP consolidation. A few DSPs emerged as winners and consolidators. But now what we've seen is something very different where in the last couple of years, as the industry has continued to fragment, we've seen depth in a lot of new verticals, retail media and pharma, for instance. We've seen new formats like CTV streaming come into the mix. Many more specialist DSPs are out there. This reflects a bigger broadening of the number of advertisers, many in the mid-market, that have diverse needs compared to larger advertisers. That's creating a lot of opportunity, and we have a robust road map going after these DSPs because we see there’s growth potential. Strategically, it's also good for us from a diversification perspective. Let me turn it over to Steve.

Sure. Matt, I think you hit the nail on the head when you commented on focusing on what we can control. Rajeev called out some of the key drivers of that, identifying opportunities. We added 50 more DSPs. That's a function of focus and ensuring we go after the right DSPs and innovate around them. We've actually put more resources into the sales area focused on advertisers, DSP buyers to take advantage of growth opportunities. So, we continue to control what we can control, investing where we see upside. You're starting to see the outcome of that with improved diversification. I mentioned that mid-market DSPs grew over 30% year-over-year.

Yes. That's super helpful. We've gone over a lot of company specifics for both the quarter and 2026. You've talked about the DSP headwind diminishing somewhat. Could you just talk a little bit more about what goes into that Q1 guidance? Obviously, a beat and raise quarter, but you're still showing some year-over-year decline. Is there still DSP headwinds, macro? Just how you're thinking through that, Steve?

Sure. No, absolutely. The main headwind is the large legacy DSP we called out mid last year. For Q4, if you adjust for that DSP as well as political, we grew 18%, which is above market growth rates. Our Q1 guidance, adjusted for that DSP, implies year-over-year growth in the high single-digit percentages. We're on track to get back to growth by midyear. For the second half, we've been investing in mobile app, CTV, and emerging revenues, expecting revenue acceleration. Ad spend in January was healthy. Six out of ten ad verticals grew double digits, so we see a stable background in the ecosystem. The DSP headwind is still really reflected in our reported numbers. We'll grow through that in the second half.

Next question comes from James Heaney at Jefferies.

Rajeev, when you say that your Q4 results represented an inflection point in your business, could you just elaborate on what you think the biggest unlock was this particular quarter? Is it a combination of things, or is there one thing you'd call out?

Sure. Yes, I would say it's a combination of a number of things, right? Steve told you excluding political and the legacy DSP, 83% of our business grew 18% year-over-year in Q4. So, clearly, a very positive signal. CTV grew double digits, excluding political. We partner now with 28 of the top 30 global streamers. Mobile app grew 25% year-over-year. The emerging revenue streams, that's now 10% of revenue growing very quickly. The DSP diversification we talked about earlier is also quite advantageous. The big one that I’m personally focused on is the emergence of agentic as a new incremental tailwind in our business. We started to see that in Q4 with initial campaigns in December, and we’re now at over 250 and counting. Obviously, we’re very excited and bullish on that opportunity.

I would like to add a few more comments. We have been navigating structural changes in the industry. The combination of our dedication to innovation and improving efficiencies positions us well for a robust and prosperous 2026, with revenue expected to accelerate in the latter half of the year. We are very optimistic about the business's path forward and are concentrating on areas that will provide us with long-term growth opportunities.

The next question comes from Jason Helfstein at Oppenheimer.

This is Steve Hromin on for Jason. Just a quick question on AgenticOS. The over 250 deals metric is encouraging. But just can you help us understand whether these deals are already driving meaningful revenue? Or is that more of a this year and next year story? And then also, how do the economics work? Are you charging higher CPMs or an expanded take rate or a separate fee structure?

Sure. Steve, do you want to take that?

Sure. From our perspective, we're out of the gate. We're absolutely the leader among our peers in this respect, having an end-to-end system working. So as we've done with many other innovations, we build out the foundation and then we scale it. To give you proof points, three years ago, our emerging revenues represented less than 1% of total revenues, and we exited 2025 at 12% of revenues. We expect our agentic efforts will build a base and accelerate over time. In the second half of the year, we assume that will be a similar profile, but it's going to take time. We're experimenting with different models in terms of CPM-based, etc. The powerful aspect of what we're doing is that we have a breadth of options. We have deep integrations that Rajeev mentioned, and we have the buying capability, providing flexibility in terms of economics over the long run. Any innovative company tests and analyzes what is best for customers and partners.

Yes. Maybe just two data points to add to that. When a buyer uses AgenticOS as the agentic doorway into PubMatic and purchases through Activate, we do generate an incremental fee on those transactions in addition to the SSP fee. Secondly, I mentioned in the prepared remarks that 10% of publishers are now generating revenue from AI solutions, which include AgenticOS as well as various publisher solutions. This number should ideally approach 100% eventually, indicating that we're still early, and there is substantial runway ahead.

Zach Cummins at B. Riley.

I just wanted to start off with the impacts that we've seen to search traffic with the emergence of some of these large LLM models. Just curious if you've seen a meaningful shift in terms of channels that advertisers are now prioritizing versus maybe what you saw six or twelve months ago?

So, we have not seen a meaningful shift. I mean, obviously, OpenAI is out with a new advertising solution. I think it’s in the early stage. I don’t know if you call it alpha, beta, or something like that. So, I don’t think that’s at scale. That’s primarily competing with search budgets, which do not flow on our platform. So, we aren't seeing that from a channel perspective. I’d also say that our business has limited exposure from a traffic perspective. We've estimated it at a single-digit percentage of revenue if search traffic were to go away, since about 60% of our impressions are now for CTV and mobile app. Those are unaffected by changes in search. Industry data indicates that for the remainder of our business, about 15% of traffic is referral traffic versus direct navigation. We continue to grow impression volume on our platform. There's no shortage of browser web monetization web impressions as well as mobile app as we grow with the Google announcement. CTV is also expanding as we add more streamers to our platform.

One thing I'd add, Zach, to underscore the point and speak to PubMatic's strength in Q4: we had a robust display growth. We returned to growth on a year-over-year basis in the mid-single-digit percentages. If you adjust for the large legacy DSP, our display business actually grew 20% year-over-year in Q4. It's hard to see any bleed over from AI pressures in that regard. It speaks to the efforts we've made, executing against strategic priorities, lifting all boats. Display growth highlights the benefits of those efforts that are broad-based across our platform.

Understood. And Rajeev, I’m curious if you can give any sort of update around the Google Ad Tech Remedies trial. I'm still awaiting a final decision on that front, but maybe just level setting the base case outcome that you view is most likely. I’m assuming that none of that potential tailwind is included in the forward outlook.

Yes, that's right. That's not included because obviously, the timing and nature of the remedies are uncertain. So, maybe there's two things to comment on. One is the Google DOJ case and then the other is our own lawsuit against Google for damages. On the former, we, like you, are waiting for the court's verdict in terms of remedies. Many people expect it sometime this quarter and expect more behavioral remedies rather than structural remedies. The primary structural remedy is Google divestiture of AdX. We don’t know anything specific; we're waiting and seeing. As you know, we estimate Google holds a 60% market share. Each 1% of market share adds $50 million to $75 million in high-margin revenue to our platform. It's a remarkable opportunity. We're just waiting for that verdict on remedies. Our litigation against Google is a longer process for damages. There was a positive decision where the judge in New York determined that factual findings made by Judge Brinkema in the DOJ litigation should apply without relitigating the facts. This means we don't need to prove antitrust or anticompetitive behavior by Google but only demonstrate the magnitude of damages.

Question comes from Elle Niebuhr at Lake Street.

So, I was just wondering if you could quantify how much of the Q4 CTV growth is tied to live sports versus the always-on budgets. Do you guys see sports becoming a higher mix of CTV revenue? Or could you comment on that?

Sure. From our perspective, live sports is, of course, a key long-term driver for our CTV business and for the industry overall. We've been making great progress expanding inventory in not just live sports but agency marketplaces globally. These will be significant secular growth areas. Think about the opportunity: as we scale, bringing in more publishers, Rajeev shared we now work with 20 of the top 30 global streamers. We have over 450 global CTV publishers, and we’re growing all the time. We have inventory that buyers value; through our AI capabilities, we expect that CTV will certainly benefit. With inventory at scale, we anticipate that live sports will continue to be a long-term growth driver for us.

Yes. Just to give you a couple of examples. Last year, we monetized Cricket World Cup and U.S. Open for tennis, MLB, NFL, NHL. The list goes on of live sports. It is a key growth driver for our overall CTV business, and we're getting closer to both streamers and buyers to address many technical challenges.

We are out of time. So, I'm going to turn the call back over to Rajeev for closing remarks.

Thank you, Stacie. We entered 2026 with a stronger revenue mix and more efficient cost structure and expect to return to double-digit revenue growth in the second half of this year with corresponding margin expansion. Our early leadership in agentic AI is both an incremental tailwind and a structural advantage for PubMatic. Given our scale and proprietary data, it drives greater advertiser outcomes, unlocks new addressable ad demand and increases budgets to the open Internet. We look forward to seeing many of you at upcoming conferences, including the Citizens Tech Conference on Monday, March 2, and the KeyBanc Emerging Tech Summit on Tuesday, March 3, both in San Francisco. I will also be speaking at the NVIDIA GPU Technology Conference, or GTC, their Global AI Conference on March 19. Thanks, everyone, for joining us today, and have a great afternoon.