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PUBM, PubMatic Inc.

Software asset-light Cyclical

PubMatic Inc. is an independent, artificial intelligence-powered advertising technology company that delivers digital advertising performance.

Our integrated technology platform connects buyers, publishers, data providers, and commerce media networks on a single, unified platform, to deliver advertising performance, control, transparency and efficiency.

Continued Growth of Digital Media Across Multiple Platforms: Consumers have dramatically increased the amount of time they spend online, on mobile devices, or watching content through connected television, or CTV.

Latest annual: FY2025 10-K

PUBM · PubMatic Inc.

The business

What it sells, where the money comes from, the kind of company it is.

Revenue · FY2025

$283M

−2.9% YoY · 14% 5-yr CAGR

Vital signs · TTM, with 5-yr average

Revenue $282M 5-yr avg $265M

Gross margin 63% 5-yr avg 67%

Operating margin −7.3% 5-yr avg 7.5%

ROIC −15% 5-yr avg 7%

Owner-earnings margin 25% 5-yr avg 25%

Free cash flow margin 25% 5-yr avg 23%

The business in brief

read the 10-K →

What this business is and what moves its needle, from its own SEC filings.

Situation: Cyclical. Margins collapse and recover repeatedly across the record; a single year, good or bad, misstates the through-cycle earning power.
What moves the needle: Gross margin has run about 68% and operating margin about 7.5% through the cycle, a wide spread between price and the cost of what it sells — whether that advantage is durable pricing power or a margin that can erode is the question the record is for. The operating margin has swung widely — from −6.1% to 26% — on a steadier 68% gross margin, so what moves it sits below the gross line, in operating spend and one-off charges more than in the cost of the product itself. Capital spending runs about 8.4% of sales, well above depreciation, so the return earned on what it sinks into that plant weighs as much as the margin. Read this kind of business on retention and the cost of growth. On its own account, the filing leans hardest on pricing power & competition, set against the numbers in what the filing emphasizes, below.
Is it a good business?: Return on capital has sat near the cost of capital (median 8%). The steadier read is owner earnings: roughly 25% of revenue reaches owners as cash, consistently, and customers and suppliers fund the business through negative working capital. The cycle and the balance sheet decide this one; the worst year tells more than the median, and the rest is in the 10-K.

Every line is arithmetic on the company's filings, shown in full in the sections below.

Where the money comes from

read the 10-K →

44% of revenue comes from outside the United States.

Revenue by geography, FY2025

United States56%$158M
EMEA32%$91M
Asia Pacific10%$28M
Rest of the world2%$6M

From the segment footnote of the company's own 10-K. Shares are of total revenue; the profit bar shows each segment's share of segment operating profit, before unallocated corporate costs.

The record

Ten years of arithmetic, read across the cycle.

The record, 2019–2025

realized figures from each filing · older years to the left

2019’19	2020’20	2021’21	2022’22	2023’23	2024’24	2025’25	TTMTTMMar 2026
								Income statement
$114M	$149M	$227M	$256M	$267M	$291M	$283M	$282M	RevenueRevenue
68%	72%	74%	68%	63%	65%	64%	63%	Gross marginGross mgn
18%	14%	16%	18%	21%	20%	21%	22%	SG&A / revenueSG&A/rev
11%	8%	7%	8%	10%	11%	12%	12%	R&D / revenueR&D/rev
$9M	$32M	$59M	$41M	$2M	$4M	($17M)	($21M)	Operating incomeOp. inc.
7.5%	21.3%	25.9%	15.8%	0.8%	1.3%	−6.1%	−7.3%	Operating marginOp. mgn
$7M	$27M	$57M	$29M	$9M	$13M	($14M)	($17M)	Net incomeNet inc.
28%	16%	13%	23%	15%	30%	—	—	Effective tax rateTax rate
								Cash flow & returns
$35M	$24M	$89M	$87M	$81M	$73M	$81M	$83M	Operating cash flowOp. cash
$7M	$16M	$16M	$24M	$29M	$25M	$19M	$17M	DepreciationDeprec.
$22M	($18M)	$16M	$35M	$44M	$36M	$77M	$84M	Working capital & otherWC & other
$10M	$24M	$30M	$36M	$11M	$18M	$14M	$13M	CapexCapex
8.4%	16.3%	13.4%	14.0%	4.0%	6.0%	5.1%	4.6%	Capex / revenueCapex/rev
$28M	$9M	$73M	$64M	$71M	$56M	$67M	$70M	Owner earningsOwner earn.
24.8%	5.8%	32.2%	24.8%	26.4%	19.2%	23.6%	24.8%	Owner earnings marginOE mgn
$26M	$153K	$58M	$51M	$71M	$56M	$67M	$70M	Free cash flowFCF
22.5%	0.1%	25.7%	20.0%	26.4%	19.2%	23.6%	24.8%	Free cash flow marginFCF mgn
—	$0	$0	$28M	$0	$0	—	$0	AcquisitionsAcquis.
$5K	$3K	$52K	$0	$59M	$75M	$46M	—	BuybacksBuybacks
—	28%	29%	14%	1%	2%	-12%	-15%	ROICROIC
50%	15%	22%	9%	3%	5%	-6%	-7%	Return on equityROE
50%	15%	22%	9%	3%	5%	−6%	−7%	Retained to equityRetained/eq
								Balance sheet
$34M	$81M	$83M	$92M	$79M	$100M	$146M	$145M	Cash & investmentsCash+inv
—	$220M	$287M	$314M	$375M	$425M	$358M	$337M	ReceivablesReceiv.
—	$177M	$244M	$277M	$348M	$387M	$344M	$343M	Accounts payablePayables
—	$43M	$43M	$37M	$28M	$38M	$15M	($6M)	Operating working capitalOper. WC
—	$327M	$461M	$503M	$562M	$576M	$523M	$504M	Current assetsCur. assets
—	$192M	$267M	$302M	$380M	$419M	$376M	$369M	Current liabilitiesCur. liab.
—	1.7×	1.7×	1.7×	1.5×	1.4×	1.4×	1.4×	Current ratioCurr. ratio
—	$6M	$6M	$30M	$30M	$30M	$30M	$30M	GoodwillGoodwill
—	$371M	$550M	$642M	$695M	$740M	$680M	$659M	Total assetsAssets
($34M)	($81M)	($83M)	($92M)	($79M)	($100M)	($146M)	($145M)	Net debt / (cash)Net debt
$13M	$175M	$257M	$312M	$296M	$277M	$263M	$251M	Shareholders’ equityEquity
								Per share
12.2M	17.1M	56.6M	56.9M	56.0M	54.3M	47.0M	47.1M	Shares out (diluted)Shares
$9.36	$8.69	$4.01	$4.51	$4.77	$5.36	$6.02	$5.98	Revenue / shareRev/sh
$0.55	$1.55	$1.00	$0.50	$0.16	$0.23	$-0.31	$-0.37	EPS (diluted)EPS
$2.32	$0.50	$1.29	$1.12	$1.26	$1.03	$1.42	$1.48	Owner earnings / shareOE/sh
$2.10	$0.01	$1.03	$0.90	$1.26	$1.03	$1.42	$1.48	Free cash flow / shareFCF/sh
$0.78	$1.41	$0.54	$0.63	$0.19	$0.32	$0.31	$0.27	Cap. spending / shareCapex/sh
$1.09	$10.24	$4.54	$5.49	$5.29	$5.11	$5.59	$5.33	Book value / shareBVPS

The diluted share count moved ×1.41 into 2020 — shares issued, not a split the totals corroborate — and the per-share figures carry the counts as filed.

The diluted share count moved ×3.31 into 2021 — shares issued, not a split the totals corroborate — and the per-share figures carry the counts as filed.

Per-share growththe realized rate an owner's share compounded

	6-yr	5-yr
Revenue / share	−7.1%/yr	−7.1%/yr
Owner earnings / share	−7.9%/yr	+23.0%/yr
Capital spending / share	−14.6%/yr	−26.4%/yr
Book value / share	+31.3%/yr	−11.4%/yr

The record, charted

FY2019–2025

Each measure over its full record; the current point and the worst year marked.

Share count

47Mpeak FY2022

ROIC

−12%low FY2025

Gross margin

64%low FY2023

Owner earnings vs. net income

Owner earningsNet income

The accountant's number, and the cash an owner can take; the gap is the tell.

$67Mowner earningsvs.($14M)net incomelow FY2020

Where the cash went

ReinvestBuybacksDividendsAcquisitionsRetainedBeyond op. cash

Each year's outlays against its operating cash: the mix, and how it drifts. The hatched cap is spending beyond that year's operating cash — financed from the balance sheet or borrowing, not operations.

FY2019FY2025

Owner-earnings bridge

FY2021–FY2025cash-flow statement, SEC EDGAR →

Net income is the accountant's number; owner earnings is the cash an owner could take out. The walk between them, off the cash-flow statement, and whether the gap is widening or holding.

In fiscal 2025 the business turned a $14M loss into $67M of owner earnings: more cash than the profit line showed, after the non-cash charges and the capital it put back in.

	FY2025	FY2024	FY2023	FY2022	FY2021
Reported net income	($14M)	$13M	$9M	$29M	$57M
Depreciation & amortizationnon-cash charge added back	+$19M	+$25M	+$29M	+$24M	+$16M
Working capital & othertiming of cash in and out, other non-cash items	+$77M	+$36M	+$44M	+$35M	+$16M
Cash from operations	$81M	$73M	$81M	$87M	$89M
Maintenance capital expenditurethe spending needed just to hold position and volume	−$14M	−$18M	−$11M	−$24M	−$16M
Owner earnings	$67M	$56M	$71M	$64M	$73M
Growth capital expenditurediscretionary; spent to get bigger, not to stand still	—	—	—	−$12M	−$15M
Free cash flow	$67M	$56M	$71M	$51M	$58M
Owner-earnings marginowner earnings ÷ revenue	24%	19%	26%	25%	32%

Owner earnings is the cash an owner could pull out without starving the business: operating cash less the capital it must spend to hold its position .

Maintenance capex is estimated as depreciation where a growing business invests above it; free cash flow is the figure the scorecard's free-cash margin reads.

III

Quality & stewardship

Returns, the balance sheet, capital allocation, and pay.

Owner’s Scorecard

FY2025 10-K · source on SEC EDGAR →

Will it survive?

Can it pay its interest? —

No meaningful interest burden

Little or no interest expense reported

What this means
Little or no interest expense reported, the business isn't leaning on lenders to operate.
How heavy is the debt, net of cash? +$146M

Net cash, debt-free

Cash $146M − debt $0

What this means
Cash and short-term investments exceed every dollar of debt by $146M, on net the company owes nothing, and can act from strength when others can't. Net debt is the leverage figure that matters: the cash is already set against the debt. Strategic or illiquid investments aren't counted here.
How long is cash tied up? -755d

Negative, funded by others

DSO 462 + DIO 0 − DPO 1217 days

What this means
Days cash is tied up between paying suppliers and collecting from customers. A negative cycle is a quiet moat: suppliers and customers fund the operation (Buffett's “float”), the company grows on other people's money. (Little or no inventory, a services / asset-light model, so the inventory leg is ~0.)

Is it a good business?

Return on invested capital —

Not enough data

Industry peers: median -1%

What this means
The filing data didn't include the inputs for this check.
Owner-earnings margin 25%

High through the cycle

7-yr median margin, range 6%–32%; latest $67M = operating cash $81M − maintenance capex $14M

Industry peers: median 13%

What this means
What an owner could take out without starving the business: operating cash less the maintenance capital it must spend to hold its position — Buffett's owner earnings. That's 24% of revenue this year, a 25% median across 7 years.
Are earnings backed by cash? $81M

Loss, but cash-generative

Net income ($14M) · cash from operations $81M

What this means
The company reported a net loss, so a conversion ratio isn't meaningful. What matters then is whether operations still threw off cash, here, they did.

How is the cash used?

Where do the earnings go? 70%

Returns about half

Dividends + buybacks $46M ÷ Owner Earnings $67M

What this means
Of $67M Owner Earnings, $46M (70%) went back to shareholders, $0 dividends, $46M buybacks. Returning most of it is the mark of a mature business with little left to reinvest at a high return; reinvesting most could mean a long runway, or empire-building. The split doesn't say which; the return earned on it (see ROIC) does.
Investing or harvesting? 0.76×

Harvesting

Capex $14M ÷ depreciation $19M

What this means
Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.

Graham’s defensive tests · 0 of 5 met

Graham’s numerical criteria for the defensive investor (The Intelligent Investor, ch. 14), run on the filings. A floor of safety, not a buy signal; many fine modern businesses fail his strictest liquidity rules by design.

Adequate size Miss

Revenue ≥ $2B · $283M

What this means
Big enough to weather a storm. Graham's 1972 floor was ~$100M of sales (≈ $700M today); we use a $2B revenue line as a conservative modern stand-in.
Strong liquidity Miss

Current ratio ≥ 2× · 1.39×

What this means
Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.
Earnings stability Near

A profit every year (7-yr record) · 1 loss year

What this means
Graham wanted earnings in each of the past ten years, the stability a defensive owner leans on.
Dividend record Miss

Uninterrupted dividends · none paid

What this means
An unbroken dividend was Graham's mark of durability. He wanted twenty years; the filings show about ten, and a single suspension breaks the streak. Non-payers, many fine modern compounders, fall outside his defensive net by design.
Earnings growth Miss

Earnings +33% over the record · −92%

What this means
At least a third more earnings than a decade ago, averaging three years at each end. Net income (not per-share), so stock splits don't distort it, buybacks and dilution show up in the share-count line instead.
Moderate price —

P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price

What this means
Graham's valuation gate, the wall he kept between a sound business and a sound investment. Three-year average earnings are $0.05/share (latest year $-0.31), the averaged base the calculator's gate runs on, and book value is $5.57/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.

Durability & moat, 2019–2025

Whether the record’s returns held, and what the capital reinvested earned.

Profitable years 6 of 7

What this means
Lost money in 1 year(s), look at what happened there before trusting the average.
Operating margin 18% → −1% (3-yr avg ends)

What this means
Through the cycle the operating margin slipped — about 18% early to −1% lately, median 7% — competition or costs are biting in.
Owner earnings growth +22%/yr

What this means
Owner earnings grew about 22% a year over the record.
Worst year 2025 · −6.1% op. margin

What this means
Operations went underwater in 2025, understand why before trusting the good years.

Does AI threaten the moat?

Elevated contestability

The product is software or information, the very thing capable AI now produces more cheaply, so the moat is more contestable than the record alone implies.

In its own filing A competitive risk, new this year

Its FY2025 10-K names artificial intelligence as a competitive threat, in language that was not in the prior year's filing.

“Our increasing reliance on artificial intelligence to operate our platform and differentiate our offerings creates new operational, competitive, and execution risks that may be difficult to predict or manage.”

AI has collapsed the cost of building a capable substitute for the very thing this business sells. When a credible alternative can be assembled for a fraction of the incumbent's price, it is pricing power that erodes first, not revenue tomorrow. The live question is whether the moat survives that, not whether it held in the past. Whether that question is answerable at all is yours to decide, against your own circle of competence.

Read from the filing's own risk factors, paired with the industry's structure under its SIC code; the durability is read above, the price below.

All figures as filed; the source filing is linked above.

Current Position

as of the latest quarter, Mar 31, 2026

Can the business pay what it owes this year, off the freshest balance sheet: the quality of the assets, the debt actually coming due, and what a low ratio means here.

Current assets$504M

Cash & short-term investments$145M
Receivables$337M
Other current assets$22M

Current liabilities$369M

Accounts payable$343M
Other current liabilities$26M

Current ratio1.37×all current assets ÷ what's due · Graham looked for 2×

Quick ratio1.37×stricter: inventory excluded

Cash ratio0.39×strictest: cash alone against what's due

Working capital$135Mthe cushion left after near-term bills

Revenue, latest quarter vs. a year ago−2.0%the freshest read on whether the business is still growing

Current ratio, recent quarters1.4× → 1.4×

Deeper floors

Tangible book value$219Mequity stripped of goodwill & intangibles

Net current asset value$96MGraham's net-net: current assets less all liabilities

Debt incl. operating leases$42M$42M of it operating leases

From the company's latest filing.

How the cash was used, 2019–2025

Over the record, the business generated $471M of operating cash; how management split it reads as a balanced allocator, splitting cash between the business, owners, and the balance sheet.

Reinvested$143M · 30%
Buybacks$181M · 38%
Retained (debt / cash)$147M · 31%

Returned to owners$181M
49% of the owner earnings the business produced over the span, $0 as dividends and $181M as buybacks.
Source of fundingOperating cash
Operating cash covered reinvestment and returns; over the span cash and short-term investments rose $111M.
Average price paid for buybacks—
Buybacks ran $181M over the span, but the filings don't tag the share count needed to deduce the average price paid.
Net change in share count287.2%
The diluted count rose from 12M to 47M: issuance (stock pay, deals) outran any buybacks, so owners were diluted on net.
Dividend record—
No dividend line was reported in the filing data over the span; the record here neither confirms nor rules out a payout.

Buybacks are gross of stock issued to staff; the share-count line above is the net of that, the figure that decides whether owners gained. The average price paid blends a year of purchases (and any accelerated repurchase), so it is close, not exact. The record of where the cash went and on what terms.

Management, ownership & pay

read the proxy →

From the proxy: how much of the business the people running it own, and how they are paid, beside what the business earned for its owners in the same years.

Fiscal year	Chief executive	Pay, as filed	“Actually paid”	Owner earnings
2021	Rajeev Goel	$8.6M	$13.6M	$73M
2022	Rajeev Goel	$7.4M	−$4.3M	$64M
2023	Rajeev Goel	$10.3M	$13.2M	$71M
2024	Rajeev Goel	$9.2M	$11.5M	$56M
2025	Rajeev Goel	$9.1M	$773k	$67M

Both pay figures are the company’s own, from the pay-versus-performance table its proxy statement files. “As filed” is the Summary Compensation Table total: salary, bonus, and equity awards at their value on the day of grant. “Actually paid” is the SEC’s prescribed recalculation, which re-marks those equity awards to what they became as they vested; it can swing far above or below the filed figure in either direction, and negative years occur. Owner earnings are the whole business's, from the record above, for the same fiscal years.

Insider ownership7.8%
The stake all directors and executive officers hold together, per the 2026 proxy: skin in the game, the first thing Munger reads.
CEO pay ratio147:1
What the chief earns for every dollar the median employee makes, per the 2026 proxy. A high ratio alone settles nothing; some businesses are genuinely top-heavy in scarce skill. A runaway figure is where Buffett starts asking whether the board is doing its job.

Inverting the record

Invert: instead of why PubMatic Inc. is a good business, the question is what would make owning it a mistake, and whether those marks are in the record. Disconfirming tests across 2019–2025.

1 of the 4 tests turned up something to look into; the other 3 came back clean.

Look hereDid the share count rise anyway?287.2%
Diluted shares grew 287.2% over 2019–2025, even as the company spent $181M on buybacks. The repurchases were outrun by issuance — to staff, in a raise, or in a deal — and the filing says which; owners' slice still shrank. Read the buyback line beside this one, not on its own.

And these came back clean

Is it less profitable than it was?
Did reported profit become cash?
Are "one-time" charges a yearly habit?

Each test is read from the filings and is noisy alone; a flag can mark a cyclical trough or a year of heavy investment as easily as a problem. The filing says which.

What an owner would ask, FY2025

read the 10-K →

Which reported numbers are a judgment call?
Management names Revenue recognition as critical estimates
each rests partly on management's judgment; the filing's note sets out the assumptionsverify →

The questions the record and the charts do not answer on their own; each carries the figure and the place to look.

Peers, Software

The same industry, side by side on owner economics. Each figure is a through-cycle median, so a peak or trough year can’t distort it; the group median at the foot is the line to read each against.

Company	Revenue	Gross margin	Op. margin	ROIC	Owner earn. margin
ZIPZipRecruiter Inc.	$449M	89%	0.3%	10%	14%
GRNDGrindr Inc.	$440M	—	21.4%	22%	26%
DSPViant Technology Inc.	$344M	46%	1.2%	-8%	13%
HSTMHealthStream Inc.	$304M	86%	5.8%	4%	18%
PUBMPubMatic Inc.	$283M	68%	7.5%	8%	25%
OOMAOoma Inc.	$274M	61%	-2.7%	-11%	1%
NXDRNextdoor Holdings Inc.	$258M	83%	-55.8%	-24%	-28%
CRNCCerence Inc.	$252M	70%	1.3%	-1%	12%
Group median	—	70%	1.3%	2%	13%

The price

What a price has to assume.

What the price implies

reverse-DCF

Type today's close and see the owner-earnings growth you'd have to believe to justify it, beside what PubMatic Inc. has delivered.

Today’s price $

Through the cycle, PubMatic Inc. earns about $70M on its 24.8% median owner-earnings margin. This year’s 23.6% margin runs in line with that. Normalize, below, values the price on that through-cycle figure rather than the latest year.

Base Normalize · through-cycle ($70M) Net of stock comp

—

The assumptions Required return 9% Years of high growth 10 Terminal growth 2.5%

9.0% = the 4.55% 10-year Treasury (Jul 15, 2026) + 4.45 points of equity premium. The rate you require is yours to set.

Enter a price above to run it.

Implied by the price—

Owner-earnings growth · ’21→’25−3%/yr

Owner-earnings growth · ’19→’25+30%/yr

Owner-earnings yield—

P/E (3-yr earnings ’23–’25)—

P/B—

Graham’s price gate—

Graham capped the multiple at 15×; Buffett and Munger let that rule go: a wonderful business can deserve 50× if the thesis holds. The gate marks the bargain-hunter's floor.

Against a high-grade bond: Graham’s yardstick bond yield%

Prefilled with the 10-year Treasury (4.55%, as of Jul 15, 2026). Edit it for today’s exact figure, or a AAA corporate yield.

Graham measured a stock against the bond you could own instead, the heart of his margin of safety. Enter a price above to weigh the owner-earnings yield against this bond.

Owner earnings $70M on 47M shares outstanding (a weighted basic average, the only count this filer tags); net cash $145M. The base is the latest year by default; Normalize values it on the through-cycle median owner-earnings margin (to avoid paying on a peak year). Net of stock comp treats option pay as the expense it is. The dials set the multiple a growth belief justifies; the price, and every dollar on this page, is yours.

Weigh PUBM against another business →

Cite: Owner Scorecard, "PubMatic Inc. (PUBM), the owner's record," https://ownerscorecard.com/c/PUBM, data as of 2026-07-09.

Manual order: ← PTRN its page in the Manual PUMP →

Industry order: ← PTC the Software chapter QLYS →