PubMatic is an advertising technology firm. It offers cloud infrastructure platform that enables real-time programmatic advertising transactions. Mainly purpose-built advertising database and sell-side delivery infrastructure. PubMatic helps publishers and application developers monetize their ad placement inventory in an efficient manner across different devices and platforms.
I met both founders during 2005-2007. CEO Rajeev have deeper product marketing experience before launching PubMatic.
- $100M IPO
- Ticker PUBM on Nasdaq
- Pricing date DEC 8th
- Offering 5.9M shares
- Price is $16 to $18 each
- $127M revenue last 12 months
- Good revenue growth
- Profits show resilience
- Strong growth prospects
- Reasonably priced
- Market Valuation: approx $1B
- 134B Ad impressions daily
- Drive data driven decisions in Ad campaigns to improve ROI
- Omnivhannel formats- web, mobile, OTT
- 1,100 publishers and app developers
PUBM has integrated its system with demand side platforms such as Trade Desk (TTD) and Google.
Financials:
PUBM has received at least $96M funding from investors including Nexus India Capital, Helion Venture Partners, August Capital and Draper Fisher Jurvetson.
Expenses vs. Revenue ratio is ~33% for last 2-3 years.
Total Revenues:
- 2018: $99.26M
- 2019: $113.87M
- 2020: $92.50M (9 months)
Gross Profits:
- 2018: $68.03M
- 2019: $77.78M
- 2020: $62.77M (9 months)
Gross Margin: ~68%
Net Income:
- 2018: $4.425M
- 2019: $6.643M
- 2020: $7.788M
Total Cash in Hand: $40.6M
Total Liabilities: $132M
Free Cash Flow: $4.1M
TAM: The total market for programmatic advertising currently valued at an estimated $5.2 billion in 2020 and is expected to reach $33.7 billion by 2027. This represents a forecast CAGR of 30.7% from 2020 to 2027.
Risk: major competitor is Google, Magnite
Bottomline: Profitable, nice free cash flow, decent top line revenue despite COVID19, expenses, sales and marketing cost are stable and efficient, market size is big to enjoy the tail winds. Moreover, PubMatic is seeking an Enterprise Value / Revenue multiple of 7X. PubMatic is small n niche offering that is worth consideration.
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