PUBM 10-K & 10-Q changes, risk factors and insider trading

Our business depends on the overall demand for advertising and on the economic health of our current and prospective publishers and buyers. In recent years, macroeconomic factors such as general economic volatility, recessionary fears, inflation, risingvolatile interest rates and softening demand in certain verticals caused some advertisers to reduce their advertising budgets. Such macroeconomic factors, as well as broader economic downturns, recessions, transnational trade wars or disruptions, inflation, further changesvolatility in interest rates or foreign exchange rates or any supply chain disruptions, changes in the tax treatment of advertising expenses, or general uncertainty,financial uncertainty in North America, Europe, and Asia, where we do most of our business; could adversely affect our business, results of operations, and financial condition. In addition, the conflict in Ukraine and the resumption of the conflict in Israel could cause unpredictable economic effects in Europe and EMEA, including potentially softening general consumer demand. Such conflicts havemay increasedincrease costs of labor and other items impacting our cost of revenue, and these conflictsfactors and potential others may do so in the future. Reductions in overall advertising spending due to these factors or other factors could make it difficult to predict our revenue and could adversely affect our business, results of operations, and financial condition.

If our existing customers do not expand their usage of our platform, or if we fail to attract new publishers and buyers,customers, our growth will suffer. Moreover, any decrease in the use of the advertising channels or formats that we primarily depend on, or failure to expand into emerging channels,channels or formats, could adversely affect our business, results of operations, and financial condition.

A limited number of large demand side platforms (“DSPs”) – The Trade Desk and Google DV360 in particular – account for a significant portion of the ad impressions purchased on our platform. We depend upon these DSPs for a large percentage of impressions purchased and expect to do so for the foreseeable future. We have no minimum commitments from buyers to spend on our platform, so the amount of demand available to us can change at any time with little or no prior notice, and we cannot assureprovide youassurance that we will have access to a consistent volume or quality of ad campaigns or demand for our ad impressions at a reasonable price, or at all. Any disruptions in our relationships with DSPs, agencies, advertisers, or buyers could adversely affect our business, results of operations, and financial condition. If a buyer or group of buyers representing a significant portion of the demand in our marketplace decides to materially reduce use of our platform, it could cause an immediate and significant decline in our revenue and profitability and adversely affect our business, results of operations, and financial condition. In addition, our business results, including revenues, may be impacted by changes in their pricing strategies, bidding algorithms, or go-to-market efforts.

Historically, our buyers have predominantly used our platform to purchase mobile, display, and video advertising inventory from our publishers. We expect that these will continue to be significant channels used by our customers for digital advertising in the future. We also believe that our revenue growth may depend on our ability to expand within mobile, video, and in particular, CTV, and we are continuing to enhance such channels. We believe our ability to incorporate Artificial Intelligence, or “AI”, and specifically agentic AI, into our new and existing products will also be a key factor to encourage expanded use of our platform. We may not be able to accurately predict changes in overall advertiser demand for the channels in which we operate and cannot assure you that our investment in formats will correspond to any such changes or shifts in demand. Any decrease in the use of mobile, display, and video advertising, whether due to customers losing confidence in the value or effectiveness of such channels, regulatory restrictions or other causes, or any inability to further penetrate CTV or enter new and emerging advertising channels, could adversely affect our business, results of operations, and financial condition.

We operate in an evolving industry with ever-changing customer needs,needs and behavior, and, as a result, our business has evolved over time such that our operating history makes it difficult to evaluate our business and future prospects. Our results of operations have fluctuated in the past, and future results of operations are likely to fluctuate as well. Although we have experienced periods of prolonged revenue growth, we may not be able to sustain oura historicalconsistent growth rate, current revenue levels, or profitability. In addition, because our business is evolving, our historical results of operations may be of limited utility in assessing our future prospects. We expect to face challenges, risks, and difficulties frequently experienced by growing companies in rapidly developing industries, including those relating to:

•changes in demand due to changes in macroeconomic environment, including as a result of an economic downturn, recession, inflation, changesvolatility in interest rates or foreign exchange rates, disruptions to supply chains, disruptions to global trade, or otherwise;

Any one or more of the factors above may result in significant fluctuations in our results of operations. YouPast results should not relybe onrelied our past resultsupon as an indicator of our future performance.

If we fail to make the right investment decisions in our platform, or if we fail to innovate and develop new solutions that are adopted by publishers,customers, we may not attract and retain publishers and buyers,customers, which could adversely affect our business, results of operations, and financial condition.

We face intense competition in the marketplace and are confronted by rapidly changing technology and artificial intelligence, evolving industry standards and consumer preferences, regulatory changes, and the frequent introduction of new solutions by our competitors that we must adapt and respond to. We need to continuously update our platform and the technology we invest in and develop, including our machine learning and other proprietary algorithms, in order to attract publishers and buyers and keep ahead of changes in technology, evolving industry standards and a rapidly changing regulatory environment. Our platform is complex and new solutions can require a significant investment of time and resources to develop, test, introduce, and enhance. These activities can take longer than we expect and may require the hiring of employees or contractors with new skill sets, which we may not be able to do in a cost-effective manner or at all. Moreover, we may not make the right decisions regarding these investments.investments, and new product or feature launches may fail to meet partner expectations, resulting in reduced adoption, loss of customer confidence, and adverse impact on our results. For example, we have launched two products, Activate and Convert,Commerce whichMedia mayproducts notto ultimatelyaddress beevolving widelymarket adoptedopportunities. orAdditionally, result in incremental value. Newernewer formats and channels, such as mobile header bidding and CTV, present unique challenges that we must address to succeed. Our success in new formats and channels depends upon our ability to integrate our platform with these new formats and channels. If we fall behind in this rapidly evolving environment, the effects may be difficult to reverse, as customers, publishers, and buyers may establish relationships with competitors that are challenging to displace. If our mobile, video, or CTV solutions are not widely adopted by publishers and buyers, we may not retain such publishers and buyers. In addition, new demands from publishers and buyers,customers, superior offerings by competitors, changes in technology,technology or format, or new industry standards or regulatory requirements could render our platform or our existing solutions less effective and require us to make unanticipated changes to our platform or business model. Our failure to adapt to a rapidly changing market and regulatory environment, anticipate publisher and buyer demand, or attract and retain publishers and buyerscustomers would cause our revenue or revenue growth rate to decline, and adversely affect our business, results of operations, and financial condition.

Our business depends on processing advertising impressions in milliseconds, and we must handle an increasingly large volume of such transactions. The demands on our platform infrastructure have increased over time due to, among other factors, the addition of new solutions, such as our Activate or ConvertCommerce Media offerings, the need to support evolving advertising formats, the handling and increased use of large amounts of data, support of AI-enabled offerings, and overall growth in impressions. Expanding our platform infrastructure and the number of ad impressions we can process requires resource commitment over a period of months or years, and we may not be able to scale quickly or efficiently enough if demand increases rapidly as short-term solutions may be too costly or unavailable. The increasing use of AI by consumers and businesses has also increased the cost to grow our infrastructure and secure colocation services on financially beneficial terms. If we are unable to grow our platform to support substantial increases in the number of transactions and in the amount of data we process, on a high-performance, cost-effective basis, or we are slow in growing our infrastructure compared to demand, our business, results of operations, and financial condition could be adversely affected. We expect to continue to invest in our platform in order to meet these requirements, and that investment could adversely affect our business, results of operations, and financial condition. Additionally, if we overestimate future usage of our platform, we may incur expense in adding infrastructure without a commensurate increase in revenue, which could adversely affect our business, results of operations, and financial condition.

We believe there is significant and growing demand for our offerings and those we are developing, and we are making significant investments to meet that demand and grow our market share.share, including through the use of AI. That demand may not materialize and, even if it does so,does, we may not be able to take advantage of that increased demand if we cannot scale our offerings in a timely manner or if the demand for one of our offerings cannibalizes the demand for otheranother productsproduct we offer. In some cases, we have experienced fee pressure as we have built out our offerings, and we expect this fee pressure to increase as more competitors, including new entrants as well as publishers themselves, build their own technology and infrastructure to enter the markets in which we do business. Even if the market for these offerings develops as we anticipate, publishers and buyers might not embrace our offerings to the degree we expect due to various factors such as inertia from usage of existing implementations of competitive products.products or technological advances by our competitors. While continued investment in and use of our products has allowed us to achieve efficiencies, the investment cost to gain such efficiencies may grow over time, especially with our existing products which may be closer to technical and economic maturity, and the potential expansion of our business or offerings may increase regulatory scrutiny of our company. Additionally, even if publishers and buyers embrace our new or expanded offerings, the positive effect of these new or expanded offerings on our results of operations may be offset or negated if such adoption cannibalizes business from our existing solutions, if we are unable to scale our offerings to keep up with demand, if we are unable to hire or retain personnel with the requisite skills and experience related to our new or expanded offerings, if publishers and buyers prefer similar offerings from our competitors, or by other adverse developments.

We use “cookies,” or small text files placed on consumer devices when an Internet browser is used, as well as mobile advertising identifiers, and other permitted tracking or contextual signals to gather data that enables our platform to better serve our customers. OurThese cookies and mobile advertising identifierssignals do not identify consumers directly, but allow for our customers to provide us accessinsight tointo suchfactors information,, such as whenad aexposure, consumerengagement, isdevice ablecharacteristics, to view or clicks on an advertisement, when a consumer uses a mobile app, the consumer’sapproximate location, and browserusage orpatterns otherthat generalare deviceused information.to improve relevance, measurement, and pricing efficiency. Publishers, buyers, third-party data providers, and partners may also choose to share their information about consumers’ interests or give us permission to use their cookies and mobile advertising identifiers. We then use this data from cookies, mobile device identifiers, and other tracking technologies to help advertisers decide whether to bid on, and how to price, an ad impression in a certain location, at a given time, for a particular consumer.

Without cookies, mobile advertising identifiers, and other tracking technology data, transactions processed through our platform would be executed with less insight into consumer preferences, reducing the precision of advertisers' decisions about which impressions to purchase for an advertising campaign. This could make advertising through our platform less valuable and decrease our revenue as advertising budgets may be decreased or directed to alternatives that are not exclusively reliant on cookies, mobile advertising identifiers, and other tracking technology data.data, or favor platforms that rely more heavily on first-party data, authenticated users, or closed ecosystems. If our ability to use cookies, mobile advertising identifiers or other tracking technologies is limited as a result of consumers rejecting targeted advertising, we may be required to develop or obtain additional applications and technologies to compensate for the lack of cookies, mobile advertising identifiers and other tracking technology data, which may not be available to us or could be time consuming or costly to develop, less effective,effective than current services, and subject to additional regulation.

Additionally, consumers can, with increasing ease, implement technologies that limit our ability to collect and use data to deliver targeted advertisements or otherwise limit the effectiveness of our platform. Cookies may be deleted or blocked by consumers. The most commonly used Internet browsers allow consumers to modify their browser settings to block first-party cookies (placed directly by the publisher or website owner that the consumer intends to interact with) or third-party cookies (placed by parties, like us, that have no direct relationship with the consumer), and some browsers block third-party cookies by default, throughor browser-basedimplement globalbrowser-level or operating system level privacy controls (alsoincluding knownglobal asprivacy universalcontrol optor outsimilar mechanisms), whichthat aremay newlyrestrict availabledata collection or use, as a result of changes to a growing list of US state privacy laws.

Some consumers also download “ad blocking” software on their computers or mobile devices, not only for privacy reasons, but also to counteract the adverse effect advertisements can have on the consumer experience, including increased load times, data consumption, and screen overcrowding. Ad-blocking technologies and other global privacy controls may prevent some third-party cookies, or other tracking technologies, from being stored on a consumer's computer or mobile device. If more consumers adopt these measures, or more regulators mandate the use of specific controls, it could reduce the volume or effectiveness and value of targeted advertising, which could adversely affect our business, results of operations, and financial condition. In addition, some ad blocking technologies block only ads that are targeted through use of third-party data, while allowing ads based on first-party data (i.e., data owned by the publisher). These ad blockers could place us at a disadvantage becauserelative we rely on third-party data, while some largeto competitors havewith troves ofextensive first-party data theyassets, useincluding tocompanies direct advertising. Mobile devices using Android and iOS operating systems do notthat operate withconsumer-facing cookies, but with mobile advertising identifiers, and these operating system developers offer ways for consumers to limit the ability to track consumers while they are using applications other than their web browser on the device. As a result, fewer mobile advertising identifiers may be be accessible in mobile devices, which could adversely impact our business. Other technologies allow ads that are deemed “acceptable,” which could be defined in ways that place us or our publishers at a disadvantage, particularly if such technologies are controlled or influenced by our competitors.platforms. Even if ad blockers do not ultimately have an adverse effect on our business, investor concerns about ad blockers could cause our stock price to decline.

The continued restriction, reduced utility, or future deprecation of third-partytracking cookies,technologies, andor the potential development of others to develop proprietary replacementsor forclosed alternatives to cookies, could adversely affect our business, results of operations, and financial condition.

Some prominent technology companies, including Google, have previously announced intentions to discontinue the use of third-party cookies, and to develop alternative methods and mechanisms for targeting advertisements, though the expected timeline for such changes is difficult to predict and has changed over time. While Google announced in July 2024 that it was discontinuing plans to phase out cookies in its Chrome browser, newlarge identitytechnology solutionsplatforms orand alternativesother aremarket likely toparticipants continue to beinvest ain, strongpromote, focusand expand the use of Googlealternative identity solutions, including deterministic identifiers, proprietary identity graphs, and others.authenticated Ifuser‑based companiestracking aremethods. forcedThese toapproaches may rely on targetinglogin methodologiescredentials, otherfirst‑party thandata cookies, such companies may instead rely on proprietary products, algorithms, or statistical methods to track consumers without cookies. Companies may also utilize log-in credentials entered by consumers into other web properties owned by those companies, such as their email services or other offerings, to track web usage, including usagecollected across multiple devices.owned properties, or closed technical systems that enable tracking and targeting outside of traditional cookie‑based mechanisms, including across devices and environments.

Additionally, some companies may build different and potentially proprietary consumer tracking methods into their widely used web browsers, which we may not be able to effectively use for our publishers and buyers. Such proprietary methods may favor closed or vertically integrated ecosystems, limit interoperability, or restrict independent ad-tech providers’ access to data or functionality, which could reduce demand for our services. Many applications and other content creators also allow consumers to avoid receiving advertisements by paying for subscriptions or other downloads. Although we believe our platform is well-positioned to adapt and continue to provide key data insights to our publishers without cookies, this transition could be more disruptive, slower, or more expensive than we currently anticipate, or publishers and buyers could elect to move a larger proportion of their advertising inventory or spend to these providers to take advantage of proprietary consumer tracking methods, any of which could materially affect our ability to serve our customers, publishers, and buyers, and our business, results of operations, and financial condition could be adversely affected.

We collect this data and analyze it in order to enhance our services, including the pricing, placement, and scheduling of advertisements. As part of our real-time analytics service offering, we also share the data, or analyses based on it, with our publishers and buyers. Our ability to collect, use and share data about advertising transactions and consumer behavior is critical to the value of our services, and is subject to a rapidly evolving regulatory framework that is not always consistent across geographies and jurisdictions. Evolving and conflicting regulatory standards could place restrictions on the collection, management, aggregation and use of information, which could result in a material increase in the cost of collecting or otherwise obtaining certain kinds of data and could limit the ways in which we may use or disclose information.services. Internet users can, with increasing ease, implement practices or technologies that may limit our ability to collect and use data to deliver targeted advertisements, or otherwise inhibit the effectiveness of our platform. Although our publishers and buyers generally permit us to aggregate and use data from advertising placements, subject to certain restrictions, publishers or buyers might decide to restrict our collection or use of their data.data based on their own regulatory, commercial, or risk considerations. Any limitations on this ability could impair our ability to deliver effective solutions, which could adversely affect our business, results of operations, and financial condition.

Because we do not generally have direct relationships with consumers, we rely on publishers, buyers, and data providers, as applicable, to obtain the consent of the consumer on our behalf to process their data and deliver interest-based advertisements, and to implement any notice or choice mechanisms required under applicable laws. Our reliance on third parties for consent and notice creates inherent compliance risk, including situations where regulatory authorities or plaintiffs seek to impose liability on multiple participants in the advertising supply chain regardless of contractual allocations of responsibility. If publishers, buyers, or data providers do not follow the applicable requirements and processes or otherwise fail to secure any legally-required consents or provide required notice and choice mechanisms, which can be difficult given the rapidly evolving regulatory consent frameworks being promulgated, we could be subject to fines and liability. Additionally, if our data, privacy, or consent practices are found to be inadequate, or we make errors in the deployment of existing and future policies or technical safeguards, we may be subject to regulatory enforcement action or named in class-action lawsuits. We may not have adequate insurance or contractual indemnity arrangements to protect us against any such fines, penalties, claims, and losses.

The digital advertising ecosystem is competitive and complex due to a variety of factors. While programmatic header bidding and other digital advertising has enabled the purchasing and selling of vast amounts of digital advertising inventory, there are significant challenges related to proliferation of media across platforms, including maintaining competitive transaction speed, increased costs, transparency, and evolving regulatory requirements. To address these issues at scale for both buyers and sellers, we provide specialized software and hardware infrastructure to optimally power technology-driven transactions. To successfully grow our business, we compete with a range of SSPs, including large, publicly-traded SSPs like Magnite, Inc.,and smaller private SSPs in markets around the world, as well as divisions of larger companies like Google.

Some of our competitors have greater financial, technical, sales, and marketing resources, longer operating histories, and greater name recognition. In addition, some competitors, particularly those with greater scale or a more diversified revenue base and a broader offering, have greater flexibility than we do to compete aggressively on the basis of price and other contract terms, or to compete with us by including in their product offerings services that we may not be able to provide. Competitors that are larger or more well-funded than our Company may be able to invest greater resources than we can in technological development and innovation, particularly in the area of AI where investments can be capital intensive without a guarantee of a return on the investment. Some of our competitors may also choose to sell products or services competitive to ours at lower prices by accepting lower margins and profitability, or they may be able to sell competitive products or services at lower prices given proprietary ownership of data, technical superiority, or economies of scale. The introduction of competitive products, pricing strategies, or other technologies by our competitors that are superior to or that achieve greater market acceptance than our products and services could adversely affect our business.

We experience requests from publishers and buyers for discounts, fee concessions, rebates, refunds, and greater levels of pricing transparency, in some cases as a condition to maintain the relationship or to increase the amount of advertising spend that the buyer sends to our platform. In addition, we charge fees to publishers for use of our platform, and we may decide to offer discounts or other pricing concessions in order to attract more inventory or demand, or to compete effectively with other providers that have different or lower pricing structures and may be able to undercut our pricing due to greater scale or other factors. Our revenue, take rate, business, results of operations and financial condition could be adversely affected if we cannot maintain and grow our revenue and profitability through volume increases that compensate for any price reductions, or if we are forced to make significant fee concessions, rebates, or refunds.

Market pressure may reduce our revenue per impression.revenues.

If changes in ad formatsformats, anddelivery digitalmechanisms, deviceor typesplatform develop in ways thatpolicies prevent advertisements from being delivered to consumers, our business, results of operations, and financial condition may be adversely affected.

Our success depends upon the ability of our platform to provide advertising for a variety of digital devices, the major operating systems or Internet browsers that run on them, and the thousands of applications that are downloaded onto them. The design of digital devices and operating systems or browsers is controlled by third parties that may also introduce new devices and operating systems or modify existing ones, including by implementing technical, contractual, or policy-based restrictions on advertising, data access, or interoperability, and our access to content on certain devices may be limited. If our platform cannot operate effectively with popular devices, operating systems, or Internet browsers, including, for example, as a result of Google’s deactivation of cookies or other similar events, our business, results of operations, and financial condition could be adversely affected. as a result of browser- or operating system-level privacy controls, restrictions on identifiers, limitations on APIs, or other platform policy changes, our business, results of operations, and financial condition could be adversely affected.

Our success depends upon the continued service of members of our senior management team and other key employees. Our Co-Founder and Chief Executive Officer, Rajeev K. Goel, is critical to our overall management, as well as the continued development of our platform and relationships with publishers, DSPs, and agencies, and our strategic direction. Our success also depends on our ability to hire, train, retain, and motivate new employees that align with our corporate culture that has fostered innovation, creativity, and teamwork across our business. Competition for employees in our industry can be intense, and we compete for experienced personnel with many companies that have greater resources than we have. Further, as our business grows and we introduce new offerings, we may need to hire employees with skills and experience that we have not historically required. This is especially true as our business increases focus and resources on emerging revenue streams or other offerings that were not historically a material part of our business. The market for talent in our key areas of operations, especially in engineering, and competition for qualified personnel is particularly intense in the San Francisco Bay Area, Pune, India, and New York, where we maintain offices. As we expand and change,evolve, in particular across multiple geographies or following acquisitions, it may be difficult to preserve our corporate culture, which could increase employee turnover or reduce our ability to innovate, create, and operate effectively.

In addition, a prolonged economic downturn or prolonged period of elevated interest rates may lead additional buyers to slow or default on payments or in some cases seek bankruptcy protection. We cannot assureprovide youassurance that we will not experience bad debt in the future, and write-offs for bad debt could adversely affect our business, results of operations, and financial condition in the periods in which the write-offs occur. If our cash collections are significantly diminished as a result of these dynamics, our revenue and/or cash flow could be adversely affected, and we may need to use working capital to fund our accounts payable pending collection from the buyers. This may result in additional costs and cause us to forgo or defer more strategic uses of that working capital.

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. Our platform empowers the world’s leading digital content creators (which we collectively refer to as “publishers”) across the open internet to maximize monetization of their advertising inventory.inventory Ourand platformaudiences alsoand provides control and transparency to buyers, which includes advertisers, agencies, agency trading desks, and demand side platforms (“DSPs”), (which we collectively refer to as “buyers”) and enables both publishers and buyers to drive better business outcomes. Our infrastructure-driven approach allows for the efficient processing and utilization of data in real time. By delivering scalable and flexible programmatic innovation, we believe we improve outcomes for our customers while championing a vibrant and transparent digital advertising supply chain..

We continue to focus on the strengths that we believe provide us with long-term competitive advantages. These strengths include our global, omnichannel reach which targets a diverse set of publishers touching many ad formats and digital device types, including mobile app, mobile web, desktop, display, video, over-the-top video/connected TV (“OTT/CTV”), and rich media. Additionally, as an independent infrastructure provider prioritizing transparency, we can be more closely aligned with both publishers and buyers which has enabled us to build direct relationships with publishers, advertisers, agencies, and DSPs and create bespoke products that meet our customers’ needs. We have also maintained a demonstrated track record of stability and agility to address thesechanges in market conditions and provide superior outcomes for both publishers and buyers. Finally, we have designed our technology to efficiently process real-time advertising transactions while leveraging data to optimize outcomes for publishers and buyers. We own and operate our software and hardware infrastructure globally, which saves significant infrastructure expenditures as compared to public cloud alternatives.

The digital advertising ecosystem continues to evolve and adapt at a rapid pace. Some noted trends include the continued growth of digital media across multiple platforms, aan continuedincreased increasefocus inon theperformance numberdriven of ad impressions processedmedia, and analyzed in real-time by each participant in the digital advertising ecosystem, a desire for transparency and control throughout the supply chain from both the buyers and publishers,publishers. andIn addition, rapidly evolving data and privacy regulations and standards.industry standards continue to impact our business.

Additionally, recent macroeconomic uncertainty, including adopted or proposed changes in the trade policies and tariff rates of the United States and international trade partners, slowing domestic growth, economic recession concerns, interest rate fluctuations, volatility in domestic and international equity and debt markets, foreign currency fluctuation and weakening of the U.S. Dollar, and persistent inflation in the U.S. and other markets globallyglobally, continue to create economic volatility and dislocation in the capital and credit markets in the U.S. and globally. To date, we have not observed material impacts in our business or outlook, but we intend to continue to monitor macroeconomic conditions closely and may determine to take certain financial or operational actions in response to such conditions to the extent our business begins to be adversely impacted.

(1)For a definition of Adjusted EBITDA, an explanation of our management’s use of this measure, and a reconciliation of Adjusted EBITDA to net income,income (loss), see “Non-GAAP Financial Measures” below.

Further, weWe work with DSPs to help them reduce their costs and improve advertiser ROI, which in turn makes us the specialized cloud infrastructure platform of choice for many of our buying partners. We depend upon a limited number of large DSPs for a large percentage of impressions purchased and our business results, including revenues, may be impacted by changes in their pricing strategies, bidding algorithms or go-to market efforts. As buyers increasingly consolidate their spending with fewer larger technology platforms, we seek to bring an increased proportion of their digital ad spending to our platform through direct deals. Supply Path Optimization (“SPO”) continues to be a major growth driver for us as we add new SPO relationships and expand existing ones. We have been investing in SPO technology and partnerships for six years and SPO represented approximately 50%55% of total activity for the year ended December 31, 2024.2025.

Our platform and suite of solutions serve four primary customer types: publishers, buyers, data partners and curators, and retail and commerce media participants. Through these customers, we generate revenue primarily through fees charged to our publishers, which are generally a percentage of the value of the advertising impressions that publishers monetize on the platform. We also generate revenues from our other products such as OpenWrap, our header bidding solution, and Connect, our solution that provides additional data and insights to buyers, which are sold separate from or in conjunction with use of our platform. WeIn continue2023, towe invest in new features for our existing solutions and new solutions such as our new productlaunched Activate, which allows buyers to execute direct deals on our platform with publisher inventory, and Convert, our commerce media solution, both of which were launched in 2023.solution.

We report revenue on a net basis. This represents gross billings to buyers, net of amounts we pay publishers.publishers and rebates associated with SPO agreements with buyers. We record our accounts receivable at the amount of gross billings to buyers, net of allowances, for the amounts we are responsible to collect, and we record our accounts payable at the net amount payable to publishers. Accordingly, both accounts receivable and accounts payable appear large in relation to revenue, which is reported on a net basis.

Cost of revenue consists of data center co-location costs, depreciation expense related to hardware supporting our platform, amortization expense related to capitalized internal useinternal-use software development costs and acquired developed technology,costs, personnel costs, and allocated facilities costs. Personnel costs include salaries, bonuses, stock-based compensation, and employee benefit costs, and are primarily attributable to our networkcloud operations group, which maintains our servers, and our client operations group, which is responsible for the integration of new publishers and buyers and providing customer support for existing customers.

Technology and Development. Technology and development expenses consist of personnel costs, including salaries, bonuses, stock-based compensation, and employee benefits costs, allocated facilities costs, and professional services. These expenses include costs incurred in the development, implementation and maintenance of internal useinternal-use software, including platform and related infrastructure. We expenseexpend technology and development costs as incurred, except to the extent that such costs are associated with internal useinternal-use software development that qualifies for capitalization. We expect technology and development expenses to generally increase in absolute dollars in future periods.

Sales and Marketing. Sales and marketing expenses consist of personnel costs, including salaries, bonuses, stock-based compensation, and employee benefits costscosts, for our employees engaged in sales, sales support, marketing, business development, and customer relationship functions. Sales and marketing expenses also include expenses related to promotional, advertising and marketing activities, allocated facilities costs, travel, and entertainment primarily related to sales activity and professional services. We expect sales and marketing expenses to increase in absolute dollars in future periods.

General and Administrative. General and administrative expenses consist of personnel costs, including salaries, bonuses, stock-based compensation, and employee benefits costs for our executive, finance, legal, human resources, information technology, and other administrative employees. General and administrative expenses also include outside consulting, legal and accounting services, allocated facilities costs, and travel and entertainment primarily related to inter-office travel and conferences. We expect general and administrative expenses to increase in absolute dollars in future periods.

Total other income (expense), net consists of interest income, unrealized gain (loss) on equity investmentincome and other income (expense), net. Interest income is generated by investing excess cash into money market accounts and marketable securities. Unrealized gain (loss) on equity investment consists of gains and losses on our investment in equity securities, including unrealized gains and losses from market price changes or impairment of securities we continue to hold. Other income (expense), net consists primarily of gains and losses from foreign currency exchange transactions.

Revenue increased $24.2 million, or 9%, in 2024 primarily due to an increase in the number of ad impressions processed from our publishers, growth in our emerging revenue streams, and increased demand from the growth of our buyer relationships primarily through SPO agreements. For the year ended 2024,2025, we served approximately 1,9001,980 publishers worldwide on our platform, compared to approximately 1,8001,900 publishers worldwide for the year ended 2023.2024. We ended fiscal 20242025 with approximately 10050 net new publishers, which represented over 60,00064,000 domains and 27,00044,000 apps in total, compared to approximately 150100 new publishers in 2023,2024, which represented approximately 66,00060,000 domains and 29,00027,000 apps in total. For purposes of our publisher count, we aggregate multiple business accounts from separate divisions, segments or subsidiaries into a single “master” publisher based on our assessment of the related nature of the group. In addition, in 2024 we completed a number of SPO initiatives which increased buyer spend on our platform.

We expect revenue to continue to increase in 2025,2026, primarily driven by growth in mobile and omnichannel video, which is the combination of short formconnected video (OTT/CTV), and OTT/CTV.new revenue streams including AI products. Additionally, we expect our revenues to be affected by macroeconomic conditions, and will continue to be impacted by the bidding methodology changes implemented by one of our buyers in the near term. The magnitude of these impacts on our future revenues is difficult to predict.

Cost of revenue increased $1.8$2.1 million, primarily due to a $5.1$4.2 million increase in amortization of internal use software and a $1.3$3.5 million increase in personneldata costscenter as headcount increased by 4% in order to support our growing business,costs, offset by a $3.8$5.5 million decrease in depreciation of data center equipment. Overall, our cost of revenue per impression processed in 20242025 decreased by 18%20% compared to 2023.2024.

Our gross margin of 65%64% in 20242025 increaseddecreased compared to 20232024 of 63%65% due to a higher decline in revenue growthas acceleratingopposed fasterto thanthe increase in cost of revenues.revenue.

We expect the cost of revenue to be higher in 20252026 compared to 20242025 in absolute dollars primarily due to increases in depreciation and amortization expense fromour data center capacity expansion in 2024,costs as well as increases in in software, hardwarehardware, and equipment maintenance to support the data centers.

The increase in technology and development costs was primarily due to an increase of $7.5$1.2 million in personnel costs associated with a headcount increase by 13% and higher stock-based compensation costs, an increase of $0.7 million in facilities costs associated with new offices, an increase in depreciation of $0.3 million, and an increase in travel and entertainment of $0.3 million, offset by a $2.3$0.6 million increase in the capitalization of internal use software.

We expect technology and development expenses in 2026 to increasebe in 2025flat compared to 20242025 in absolute dollars, primarily due to the additional headcount investment in our key growth opportunities.dollars.

Sales and marketing costs increased primarily due to a $11.7$6.0 million increase in personnel costs associated with a headcount increase by 7% and higher stock-based compensation costs and9%, a $1.1 million increase in facilities costs, and an increase in travel and entertainment expenses of $0.4 million, and increase in marketing expenses of $0.2$0.9 million, offset by a decrease in amortizationmarketing for acquisition-related intangible assetsexpenses of $0.9$0.5 million.

We expect generalGeneral and administrative expensesexpense to increase in 2025 compared to 2024 in absolute dollarsincreased primarily due to increasesa $1.0 million increase in expensesfacilities relatingcosts, toa our$0.9 personnel.million increase in personnel costs, and a $0.6 million increase in property taxes.

Total other income (expense), net increaseddecreased for the year ended December 31, 2024,2025, compared to the prior year period,period. primarilyInterest drivenincome bydecreased due to the decrease in interest rates and a decrease in holdings in marketable securities. Other income (expense), net for the year ended December 31, 2024 included approximately $4.0 million recognized as other income of $4.0 million from the Google Privacy Sandbox initiativeinitiative, in connection with their previous initiative to phase out the use of third-party cookies. The income from the Google Privacy Sandbox initiative was related to our efforts to build and test integrations with the privacy sandbox. Other income (expense), net, also benefiteddecreased fromdue to foreign currency fluctuations for the year ended December 31, 20242025 compared to the prior year period.

Provision forFor (Benefit From) Income Taxes

In addition to our results determined in accordance with U.S. generally accepted accounting principles (“GAAP”), includingincluding, in particularparticular, operating income,income (loss), net cash provided by operating activities, and net income,income (loss), we believe that Adjusted EBITDA, a non-GAAP measure, is useful in evaluating our operating performance. We define Adjusted EBITDA as net income (loss) adjusted for stock-based compensation expense, depreciation and amortization, unrealizedlitigation (gain)related loss and impairment of equity investment,expenses, interest income, acquisition-related and other expenses, and provision for (benefit from) income taxes.

The following table presents a reconciliation of Adjusted EBITDA to net income (loss) for each of the periods indicated:

In addition to operating income (loss) and net income,income (loss), we use Adjusted EBITDA as a measure of operational efficiency. We believe that this non-GAAP financial measure is useful to investors for period to period comparisons of our business and in understanding and evaluating our operating results for the following reasons:

We have financed our operations and capital expenditures primarily through utilization of cash generated from operations. As of December 31, 2024,2025, we had cash,cash and cash equivalents, and marketable securitiesequivalents of $140.6$145.5 million and net working capital, consisting of current assets less current liabilities, of $156.7$146.8 million.

We believe our existing cash, cash equivalents, marketable securities and anticipated net cash provided by operating activities, together with available borrowings under our credit facility, will be sufficient to meet our working capital requirements for at least the next 12 months. However, if our operating performance during the next 12 months is below our expectations, our liquidity and ability to operate our business could be adversely affected. Our future capital requirements and the adequacy of available funds will depend on many factors, including those set forth under “Risk Factors.”

For the year ended December 31, 2024,2025, net cash provided by investing activities was $22.3$6.1 million of cash, consisting of a net inflows from investments of marketable securities of $60.8$13.8 million, sales of marketable securities prior to maturity of $27.1 million, offset by $17.6$14.3 million in purchases of property and equipment (primarily data center infrastructure), and $20.9$20.5 million of investments in capitalized internal use software.

For the year ended December 31, 2023,2024, net cash usedprovided inby investing activities was $39.0$22.3 million, consisting of a net purchaseinflows offrom investments of marketable securities of $29.6$60.8 million, $10.6offset by $17.6 million in purchases of property and equipment (primarily data center infrastructure), $17.7and $20.9 million of investments in capitalized internal use software, offset by net inflows from sales of marketable securities prior to maturity of $18.9 million.software.

For the year ended December 31, 2023,2025, net cash used in financing activities of $56.0$42.7 million was primarily due to $59.3$46.5 million in stock repurchases, offset by $1.5$1.8 million in proceeds from stock option exercises and $1.9$2.1 million in proceeds from the employee stock purchase plan.

We refer to our publishers, app developers, and channel partners collectively as our publishers. We generate revenue through the monetization of publisher ad impressions processed on our platform. Our platform allows publishers to sell, in real time, ad impressions to buyers and provides automated inventory management and monetization tools to publishers across various device types and digital ad formats. We charge publishers a fee, which is typically a percentage of the value of the impressions monetized through our platform.

Investing in our common stock involves a high degree of risk. The Company’s business, operations, financial results, and our stock price can be affected by a number of factors, whether currently known or unknown, including those described in Part I, Item 1A, "“Risk Factors"” in our Annual Report on Form 10-K for the year ended December 31, 2025. When any one or more of these risks materialize from time to time, such developments could adversely affect our business, financial condition, results of operations, cash flows, and the trading price of our stock. These disclosures reflect the Company's beliefs and opinions as to factors that could materially and adversely affect the Company and its securities in the future. References to past events are provided by way of example only and are not intended to be a complete listing of such events or a representation as to whether or not such factors or similar events have occurred in the past or their likelihood of occurring in the future. BelowExcept as set forth in our Quarterly Report on Form 10-Q, as filed with the Securities and Exchange Commission on May 7, 2026, there are no material changes to our risk factors since our Annual Report on Form 10-K for the year ended December 31, 2025.

Our net dollar-based retention rate equals the Current Period Revenue divided by Prior Period Revenue. Our net dollar-based retention rate was 96%98% for the trailing twelve months ended MarchJune 31,30, 2026, and 102% for the trailing twelve months ended MarchJune 31,30, 2025.

We work with DSPs to help them reduce their costs and improve advertiser ROI, which in turn makes us the specialized cloud infrastructure platform of choice for many of our buying partners. We depend upon a limited number of large DSPs for a large percentage of impressions purchased and our business results, including revenues, may be impacted by changes in their pricing strategies, bidding algorithms or go-to market efforts. As buyers increasingly consolidate their spending with fewer larger technology platforms, we seek to bring an increased proportion of their digital ad spending to our platform through direct deals. Supply Path Optimization (“SPO”) continues to be a major growth driver for us as we add new SPO relationships and expand existing ones. We have been investing in SPO technology and partnerships for six years and SPO represented approximatelyover 56%55% of total activity for the three months ended MarchJune 31,30, 2026.

Our recent growth has been driven by a variety of factors including increased access to mobile web (display and video) and mobile app (display and video) impressions and desktop video impressions. Our performance is affected by our ability to maintain and grow our access to valuable ad impressions from current publishers as well as through new relationships with publishers. In MarchJune 2026, our platform processed approximately 11.0 trillion ad impressions daily, each in a fraction of a second.

Revenue for the three months ended MarchJune 31,30, 2026 decreasedincreased by $1.3$7.5 million, or (2)%,11%, compared to the three months ended MarchJune 31,30, 2025. Revenue for the six months ended June 30, 2026 increased by $6.2 million, or 5%, compared to the six months ended June 30, 2025. Our revenues were primarily driven by an increase in impressions processed on our platform,platform newincluding CTV and mobile app, emerging revenue streams, and growth in customer relationships. These increases were negatively impacted by platform changes implemented by one of our DSP buyers in the second half of 2025, resulting in a year over year decline in revenues.

As of MarchJune 31,30, 2026, we served approximately 1,9702,000 publishers and app developers worldwide on our platform, compared to approximately 1,9501,960 publishers and app developers worldwide as of MarchJune 31,30, 2025. For purposes of our publisher count, we aggregate multiple business accounts from separate divisions, segments or subsidiaries into a single “master” publisher based on our assessment of the related nature of the group.

Cost of revenue increaseddecreased $0.5$0.7 million for the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025, primarily due to a $2.0$1.7 million decrease in depreciation and amortization and a decrease of $0.2 million in professional services, offset by a $1.4 million increase in data center costs, offset by a $1.5 million decrease in depreciation and amortization.costs. Overall, our cost of revenue per million impressions processed for the three months ended MarchJune 31,30, 2026 decreased by approximately 19%18% compared to the three months ended MarchJune 31,30, 2025.

Our gross margin of 58%67% for the three months ended MarchJune 31,30, 2026 decreasedincreased compared to 60%63% for the three months ended MarchJune 31,30, 2025, and our gross margin of 63% for the six months ended June 30, 2026 increased compared to 61% for the six months ended June 30, 2025 primarily due to aan decreaseincrease in revenue.

We expect the cost of revenue to be higher in 2026 compared to 2025 in absolute dollars as we continue to supportinvest ourin datarevenue centers.driving business initiatives. Cost of revenue may fluctuate from quarter to quarter and period to period, on an absolute dollar basis and as a percentage of revenue, depending on revenue levels and the volume of transactions we process supporting those revenues,levels, and the timing and amounts of depreciation and amortization of equipment and software.

The decreaseincrease in technology and development costs for the three months ended MarchJune 31,30, 2026 was primarilynot due to a decrease of $1.5 million in personnel costs, offset by a $0.7 million decrease in capitalized internal-use software costs.material.

We expect technology and development expenses to be flatincrease in 2026 compared to 2025 in absolute dollars.dollars, primarily due to investment in technological innovation.

Sales and marketing costs for the three months ended MarchJune 31,30, 2026 increased primarily due to a $2.4$0.8 million increase in personnel costs.

We expect sales and marketing expenses to increase in 2026 compared to 2025 in absolute dollars primarily due to additional headcount investments and marketing programs.investments.

General and administrative expense increased for the three months ended MarchJune 31,30, 2026 primarily due to a $0.7 million increase in professionalbusiness services,taxes offset byand a $0.4$0.3 million decreaseincrease in personnel costs.

We expect generalGeneral and administrative expensesexpense toincreased increasefor inthe six months ended June 30, 2026 compared to 2025 in absolute dollars primarily due to additionala $1.0 million increase in professional services.services and a $0.7 million increase in business taxes.

Total other income (expense), net decreasedincreased for the three months ended MarchJune 31,30, 2026,2026 compared to the three months ended March 31, 2025 mainlyprimarily due to theforeign decreasecurrency in interest rates and a decrease in holdings in marketable securities.fluctuations.

Provision For (Benefit From) Income Taxes

The difference between the effective tax rate for the three months ended MarchJune 31,30, 2026 of 17%164% and the federal statutory income tax rate of 21% was related to tax benefitsexpense from research tax credits and deductions for equity awards, partially offset by nondeductible stock-based compensation,compensation and Section 162(m) limitation on the tax deductibility of officers’ compensation.compensation, partially offset by the tax benefits from research tax credits and deductions for equity awards. The difference between the effective income tax rate of 16%14% for the three months ended MarchJune 31,30, 2025 and the federal statutory income tax rate of 21% was related to the tax benefits from foreign-derived intangible income (FDII), research tax credits, and deductions for equity awards, partially offset by nondeductible stock-based compensation and Section 162(m) limitation on the tax deductibility of officers’ compensation.

In addition to our results determined in accordance with U.S. generally accepted accounting principles (“GAAP”), including, in particular, operating loss,income (loss), net cash provided by operating activities, and net loss, we believe that Adjusted EBITDA, a non-GAAP measure, is useful in evaluating our operating performance. We define Adjusted EBITDA as net loss adjusted for stock-based compensation expense, depreciation and amortization, litigation related expenses, interest income, and provision for (benefit from) income taxes.

(1)Litigation related expenses represents external legal fees and other expenses, net of insurance recoveries, associated with pending litigation that arose outside of the ordinary course of business. These costs relatedrelate to a discrete matter, and are not representative of our underlying operating performance. We do not adjust for legal expenses incurred in our ordinary course of business.

We have financed our operations and capital expenditures primarily through utilization of cash generated from operations as well as sales of equity securities. As of MarchJune 31,30, 2026, we had cash, cash equivalents, and cashmarketable equivalentssecurities of $144.9$137.5 million and net working capital, consisting of current assets less current liabilities, of $135.3$115.7 million.

We believe our existing cash, cash equivalents, marketable securities, and anticipated net cash provided by operating activities, together with available borrowings under our credit facility, will be sufficient to meet our working capital requirements for at least the next 12 months. However, if our operating performance during the next 12 months is below our expectations, our liquidity and ability to operate our business could be adversely affected. Our future capital requirements and the adequacy of available funds will depend on many factors, including those set forth under “Risk Factors” in this report and in our Annual Report on Form 10-K for the year ended December 31, 2025. As of MarchJune 31,30, 2026, our material cash requirements included the contractual commitments set forth under “Contractual Obligations and Future Cash Requirements.”

In February 2023, our board of directors authorized the 2023 Repurchase Program which was to terminate as of December 31, 2024 (as amended, the “2023 Repurchase Program”). In February 2024, our board of directors authorized an additional $100.0 million for repurchases under the 2023 Repurchase Program, and extended the termination date to December 31, 2025 (the “2024 Repurchase Program Extension”). In May 2025, the Company’s board of directors authorized the Company to repurchase up to an additional $100 million of its Class A common stock under the 2023 Repurchase Program (the “2025 Repurchase Program Extension”) in addition to the aggregate $175 million previously authorized under the 2023 Repurchase Program, and extended the expiration of the 2023 Repurchase Program to December 31, 2026. During the threesix months ended MarchJune 31,30, 2026, we repurchased 1,048,6503,118,823 shares of Class A common stock under the 2023 Repurchase Program for an aggregate purchase price of $8.8$30.3 million. As of MarchJune 31,30, 2026, $85.1$63.6 million remained available for future share repurchases under the 2023 Repurchase Program.

For the threesix months ended MarchJune 31,30, 2026, net cash provided by operating activities of $17.3$37.5 million resulted primarily from adjustments for non-cash expenses of $18.2$38.9 million, including $10.0$20.0 million for depreciation and amortization and $8.5$16.8 million for stock-based compensation, aan decreaseincrease in accounts receivablepayable of $21.3$36.6 million, and a decrease in prepaid expenses and other assets of $4.1$4.0 million, offset by a net loss of $12.5$13.7 million, aan decreaseincrease in accounts payablereceivable of $1.0$25.0 million, and a decrease in accrued liabilities of $11.4$1.7 million.

For the threesix months ended MarchJune 31,30, 2025, net cash provided by operating activities of $15.6$30.5 million resulted primarily from adjustments for non-cash expenses of $17.9$36.6 million, including $11.7$23.5 million for depreciation and amortization and $9.7$19.5 million for stock-based compensation, a decrease in accounts receivable of $75.7 million, a decrease in prepaid expenses and other assets of $5.7$41.4 million, offset by a net loss of $9.5$14.7 million, a decrease in accounts payable of $62.6$25.9 million, and a decrease in accrued liabilities of $11.3$5.6 million.

For the threesix months ended MarchJune 31,30, 2026, net cash used in investing activities was $9.6$34.1 million, primarily due to the purchase of a non-marketable equity investmentinvestments of $3.0$3.5 millionmillion, and $6.6$10.2 million of investments in capitalized internal use software.software, and net purchases in investments of marketable securities of $17.4 million.

For the threesix months ended MarchJune 31,30, 2025, net cash used in investing activities was $10.1$0.1 million, consisting of $1.4$2.8 million in purchases of property and equipment (primarily data center infrastructure), $6.9and $11.2 million of investments in capitalized internal use software, andoffset by a net increase in investments of marketable securities of $1.7$13.8 million.

For the threesix months ended MarchJune 31,30, 2026, net cash used in financing activities of $8.1$28.6 million was primarily due to purchases of treasury stock of $8.5$30.5 million, offset by $0.5$0.9 million in proceeds from stock option exercises.exercises and proceeds from the ESPP of $1.1 million.

For the threesix months ended MarchJune 31,30, 2025, net cash used in financing activities of $4.5$41.2 million was primarily due to purchases of treasury stock of $5.0 million, including the prepayment of funds for future purchases of approximately $1.4$43.6 million, offset by proceeds from employee stock option exercises of $0.6$1.2 million and proceeds from the ESPP of $1.4 million.

As of MarchJune 31,30, 2026, we had $6.5$8.1 million of long-term income tax liabilities, including interest, related to uncertain tax positions. Because of the high degree of uncertainty regarding the settlement of these liabilities, we are unable to estimate the years in which future cash outflows may occur.