10q10k10q10k.net

What changed in PubMatic, Inc.'s 10-K — 2023 vs 2024

vs

Paragraph-level year-over-year comparison of PubMatic, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+310 added−313 removedSource: 10-K (2025-02-27) vs 10-K (2024-02-28)

Top changes in PubMatic, Inc.'s 2024 10-K

310 paragraphs added · 313 removed · 257 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

55 edited+8 added−13 removed69 unchanged
Biggest changeData Privacy and Regulatory Challenges: There is an increasing awareness of how Internet user data is being leveraged to target ads, resulting in a growing number of privacy laws and regulations. In addition to governmental actors, including legislatures and regulatory agencies, there have also been a growing number of consumer-focused non-profit organizations and commercial entities advocating for privacy rights.
Biggest changeIn addition to governmental actors, including legislatures and regulatory agencies at the national and state level, there have also been a growing number of consumer-focused non-profit organizations and commercial entities advocating for privacy rights. These laws and institutions enable Internet consumers to assert their rights over the use of their online data in advertising transactions, a trend which we support.
We leverage our artificial intelligence and machine learning capabilities, alongside our growing publisher and buyer relationships, to improve liquidity in our marketplace. Increasing numbers of ad impressions, increasing advertiser bids, and data proliferation provide us with many opportunities to better match sellers and buyers of ad inventory.
We leverage our increasing artificial intelligence and machine learning capabilities, alongside our growing publisher and buyer relationships, to improve liquidity in our marketplace. Increasing numbers of ad impressions, increasing advertiser bids, and data proliferation provide us with many opportunities to better match sellers and buyers of ad inventory.
We have dedicated teams focused on new publisher acquisition and existing publisher relationship management. New publishers on our platform work closely with our Customer Success team, which handles on-boarding and providing support throughout the publisher relationship life cycle.
We have dedicated teams focused on new publisher acquisition and existing publisher relationship management. Publishers on our platform work closely with our Customer Success team, which handles on-boarding and providing support throughout the publisher relationship life cycle.
We have also adopted the IAB CCPA Compliance Framework, which includes a technical specification to identify consumer signals to opt-out of sale of their data, and have signed the IAB Limited Service Provider Agreement that imposes service provider obligations for certain opted-out bid requests.
We have also adopted the IAB CCPA Compliance Framework, which includes a technical specification to identify consumer signals to opt-out of the sale of their data, and have signed the IAB Limited Service Provider Agreement that imposes service provider obligations for certain opted-out bid requests.
We believe that improved matching will lead to the growth of our platform and greater publisher and buyer retention. Accelerate New Revenue Streams: As we grow our customer base and process increasing volumes of ad impressions and data, we gain insights into new challenges we can solve on behalf of our customers.
We believe that improved matching will lead to the growth of our platform and greater publisher and buyer retention. Accelerate Emerging Revenue Streams: As we grow our customer base and process increasing volumes of ad impressions and data, we gain insights into new challenges we can solve on behalf of our customers.
The hundreds of billions of ad impressions and trillion advertiser bids that we process every day generate enormous volumes of data that we harness to drive higher revenue for our publishers and increased ROI for our buyers. • Transparency: We provide log-level data to buyers and provide transparency on every ad impression, which gives buyers full control over which publishers, ad formats, and specific ad impressions on which they would like to bid. • Built in Quality Controls: We have developed a multi-pronged strategy to create a high-quality marketplace beginning with high quality publisher selection, supported by proprietary and third-party fraud detection software, manual review, timely fraud investigations, and a fraud-free program in which buyers are credited for any fraudulent inventory they may have purchased on our platform. 8 Table of Contents • Data Driven Decisions: We leverage our artificial intelligence and machine learning capabilities to record, aggregate, analyze, and act on vast amounts of data in a matter of milliseconds to help our customers optimize their digital advertising businesses in real-time.
The hundreds of billions of ad impressions and trillion advertiser bids that we process every day generate enormous volumes of data that we harness to drive higher revenue for our publishers and increased ROI for our buyers. • Transparency: We provide log-level data to buyers and provide transparency on every ad impression, which gives buyers full control over which publishers, ad formats, and specific ad impressions on which they would like to bid. • Built in Quality Controls: We have developed a multi-pronged strategy to create a high-quality marketplace beginning with high quality publisher selection, supported by proprietary and third-party fraud detection software, manual review, timely fraud investigations, and a fraud-free program in which buyers are credited for any fraudulent inventory they may have purchased on our platform. • Data Driven Decisions: We leverage our artificial intelligence and machine learning capabilities to record, aggregate, analyze, and act on vast amounts of data in a matter of milliseconds to help our customers optimize their digital advertising businesses in real-time.
We do not own media and therefore do not have a vested interest in driving ad revenue to specific media properties. We do not take a position in media or arbitrage media. Transparency is a fundamental principle of our business and we provide detailed insights into fees to our customers.
We do not own media and therefore do not have a vested interest in driving ad revenue to specific media properties. We do not take a position in media or arbitrage media. Transparency is a fundamental principle of our business and we provide detailed insights of fees to our customers.
We have maintained a demonstrated track record of stability and agility to address these market conditions and provide superior outcomes for both publishers and buyers. Additionally, we own and operate our proprietary software and hardware infrastructure around the world.
We have maintained a demonstrated track record of stability and agility to address these regulatory and market conditions, and provide superior outcomes for both publishers and buyers. Additionally, we own and operate our proprietary software and hardware infrastructure around the world.
These capabilities improve long term marketplace liquidity resulting in increased publisher revenue and higher advertiser ROI. • Self-Serve: Our cloud infrastructure solutions are available via self-serve to publishers and buyers, including an easy-to-use customer user interface and a set of application programming interfaces that allow our publisher customers to configure new inventory, extend into new geographies or ad formats, review reporting insights, and manage and track payments and billing cycles. • Reporting: Our technology platform provides extensive reporting capabilities to both buyers and publishers via application programming interfaces for direct integration into a customer’s reporting systems.
These capabilities improve long term marketplace liquidity resulting in increased publisher revenue and higher advertiser ROI. 8 Table of Contents • Self-Serve: Our cloud infrastructure solutions are available via self-serve to publishers and buyers, including an easy-to-use customer user interface and a set of application programming interfaces that allow our publisher customers to configure new inventory, extend into new geographies or ad formats, review reporting insights, and manage and track payments and billing cycles. • Reporting: Our technology platform provides extensive reporting capabilities to both buyers and publishers via application programming interfaces for direct integration into a customer’s reporting systems.
Regulatory Compliance: A growing set of privacy regulations have introduced complexity regarding the collection, use, and transmission of consumer data to the digital advertising ecosystem.
Regulatory Compliance: A growing set of privacy regulations have introduced complexity regarding the collection, use, processing, and transmission of consumer data to the digital advertising ecosystem.
As a result, our technology platform and business practices must be assessed regularly against a continuously evolving legal and regulatory landscape, and we have adopted data minimization practices that mitigate our compliance risks. There are also a number of specific laws and regulations governing the collection and use of certain types of consumer data relevant to our business.
As a result, our technology platform and business practices must be assessed regularly against a continuously evolving legal and regulatory landscape, and we have adopted data minimization practices that mitigate our compliance risks. There are also an increasing number of specific laws and regulations governing the collection and use of certain types of consumer data relevant to our business.
Website addresses referred to in this Annual Report on Form 10-K are not intended to function as hyperlinks, and the information contained on or available through our website is not incorporated into, and does not form a part of this Annual Report on Form 10-K or any other report or documents we file with or furnish to the SEC. 13 Table of Contents
Website addresses referred to in this Annual Report on Form 10-K are not intended to function as hyperlinks, and the information contained on or available through our website is not incorporated into, and does not form a part of this Annual Report on Form 10-K or any other report or documents we file with or furnish to the SEC. 12 Table of Contents
Interest-based advertising, or the use of data to draw inferences about a consumer’s interests and deliver relevant advertising to that consumer, has come under increasing scrutiny by legislatures, regulatory agencies, and self-regulatory bodies, privacy advocates, academics, and commercial interests in the United States and abroad that focus on data protection and consumer privacy.
Interest-based advertising, or the use of data to draw inferences about a consumer’s interests and deliver relevant advertising to that consumer, has come under increasing scrutiny by state and federal legislatures, regulatory agencies, and self-regulatory bodies, privacy advocates, academics, and commercial interests in the United States and abroad that focus on data protection and consumer privacy.
Technology infrastructure platforms must rapidly process this data while offering a seamless digital ad experience for consumers. Companies must continue to innovate and find efficiencies in their data processing, including through the use of machine learning and artificial intelligence, to maintain pace with growing volumes of transactions to maintain profitability.
Technology infrastructure platforms must rapidly process this data while offering a seamless digital ad experience. Companies must continue to innovate and find efficiencies in their data processing, including through the use of machine learning and artificial intelligence, to maintain pace with growing volumes of transactions to maintain profitability.
We believe the “Open Internet” outside the “walled gardens” (a colloquial term that refers to closed advertising platforms such as Google and Facebook) will shift from targeting by anonymized and invisible third-party cookies or identifiers to known identities based on consumer choice and opt-in.
We believe the “Open Internet” outside the “walled gardens” (a colloquial term that refers to closed advertising platforms such as Google and Meta) will shift from targeting by anonymized and invisible third-party cookies or identifiers to known identities based on consumer choice and opt-in.
Our growth strategy includes: Attract New Customers and Expand our Relationship with Existing Customers Globally: We constantly seek to acquire new customers and retain our relationships with existing publishers and buyers around the world. We invest in continued innovation based on the ever-changing market.
Our growth strategy includes: Attract New Customers and Expand our Relationship with Existing Customers Globally: We constantly seek to acquire new customers and expand our relationships with existing publishers and buyers around the world. We invest in continued innovation based on an ever-changing market.
Our ability to meet the demands of both buyers and inventory sellers enables us to produce superior outcomes for all industry participants. Sustained Innovation of our Cloud Platform: Our specialized cloud platform enables real-time programmatic advertising transactions in a market characterized by significant data and impression volumes, regulatory complexity, and increased focus on transparency and privacy.
Our ability to meet the demands of both buyers and inventory sellers enables us to produce superior outcomes for all industry participants. 6 Table of Contents Sustained Innovation of our Cloud Platform: Our specialized cloud platform enables real-time programmatic advertising transactions in a market characterized by significant data and impression volumes, regulatory complexity, and increased focus on transparency and privacy.
At the same time, we believe our direct publisher relationships, omnichannel header bidding capabilities, global scale, and access to incremental advertiser demand through direct relationships with buyers drive superior yield for publishers.
At the same time, we believe our direct publisher relationships, omnichannel header bidding capabilities, global scale, emerging solutions, and access to incremental advertiser demand through direct relationships with buyers drive superior yield for publishers.
In particular, much of this scrutiny has focused on the use of cookies and other tracking technologies that collect or aggregate information about consumers’ online browsing and mobile app usage activity.
In particular, much of this scrutiny has focused on consumer consent and the use of cookies and other tracking technologies that collect or aggregate information about consumers’ online browsing and mobile app usage activity.
Due to the global, omnichannel reach of our infrastructure, we believe we are well positioned to help publishers and ad buyers make their advertising businesses more efficient and effective. 6 Table of Contents Customer Control and Partnership: Due to our status as an independent infrastructure provider prioritizing transparency, we can be more closely aligned with both publishers and buyers.
Due to the global, omnichannel reach of our infrastructure, we believe we are well positioned to help publishers and ad buyers make their advertising businesses more efficient and effective. Customer Control and Partnership: Due to our status as an independent infrastructure provider prioritizing transparency, we can be more closely aligned with both publishers and buyers.
Additionally we believe our Activate platform provides buyers with the transparency and reporting demands of the buyers and a more efficient, programmatic way to access publisher inventory. Expansion of Video and Mobile: We see significant growth opportunities in both video and mobile as consumers shift more of their time online to mobile devices and online streaming services.
Additionally, we believe our Activate platform provides buyers with the transparency and reporting they demand and a more efficient, programmatic way to access publisher inventory. Expansion of Video and Mobile: We see significant growth opportunities in both video and mobile as consumers shift more of their time online to mobile devices and online streaming services.
We expect to continue to invest in both software and hardware infrastructure to continue growing the number of valuable ad impressions we process on our platform. Additionally, we analyze the data on our platform through extensive application of artificial intelligence technologies, including machine learning and natural language processing.
We expect to continue to invest in both software and hardware infrastructure to continue growing the number of valuable ad impressions we process on our platform. 7 Table of Contents Additionally, we analyze the data on our platform through extensive application of artificial intelligence technologies, including machine learning and natural language processing.
These laws also set forth high potential liabilities for data privacy violations, including on a per-record basis, and the industry faces an uncertain compliance burden as our partners and publishers work to become compliant with these laws in the future.
These laws can set forth high potential liabilities for data privacy violations, including on a per-record basis, and the industry faces an uncertain compliance burden as our partners and publishers work to become compliant with these and other laws in the future.
In California, for example, the Attorney General of the newly created California Privacy Protection Agency (“CPPA”, which is charged with CCPA rule-making and enforcement) may bring regulatory actions for violations of the CCPA. We have registered as a data broker in California with the California Attorney General. .
In California, for example, the state’s Attorney General and the California Privacy Protection Agency (“CPPA”, which is charged with CCPA rule-making and enforcement) may bring regulatory actions for violations of the CCPA. We have registered as a data broker in California with the California Attorney General.
Similarly, many of our advertiser and agency customers have brand portfolios that span the globe with a variety of ad campaign requirements – from branding to performance, to combinations thereof. All of these parties actively seek global, omnichannel platform providers that can solve for their needs around the world and across ad formats and devices.
Similarly, many of our buyers have brand portfolios that span the globe with a variety of ad campaign requirements – from branding to performance, to combinations thereof. All of these parties actively seek global, omnichannel platform providers that can solve for their needs around the world and across ad formats and devices.
We typically do collect and store IP addresses, geo-location information, and device identifiers that are considered personal data or personal information under the privacy laws of some jurisdictions or otherwise may be the subject of current or future data privacy legislation or regulation.
We typically do collect and store IP addresses, geolocation information, and device identifiers that are considered personal data or personal information under the privacy laws of some jurisdictions or otherwise may be the subject of current or future data privacy legislation or regulation.
Many of our publisher customers have diversified businesses with media properties and audiences across the globe and with a wide variety of ad products, including display and video ads across desktop, tablet, mobile, and connected TV devices.
Many of our publishers have diversified businesses with media properties and audiences across the globe and with a wide variety of ad products, including display and video ads across desktop, tablet, mobile, and connected TV devices.
Some jurisdictions, including Russia and China, have in recent years enacted data localization laws, which require any personal information of citizens of those jurisdictions to be stored and processed on servers located in those jurisdictions. Such laws are gaining momentum and are being enforced by local authorities.
Some jurisdictions have in recent years enacted data localization laws, which require any personal data of citizens of those jurisdictions to be stored and processed on servers located in those jurisdictions. Such laws are gaining momentum and are being enforced by local authorities.
We utilize customer feedback to help address the demands of publishers and buyers in order to maintain and improve our relationships with those customers. We are constantly evaluating new markets with a strategy to use our existing global infrastructure and adjacent sales offices, or by expanding our infrastructure footprint and placing personnel directly in those markets.
We utilize customer feedback to help address the demands of publishers and buyers in order to maintain and improve our relationships with those customers. We continue to evaluate new markets with a strategy to use our existing global infrastructure and adjacent sales offices, or by expanding our infrastructure footprint and placing personnel directly in those markets.
Our Industry As the digital advertising ecosystem continues to evolve, some key industry trends include: 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. Numerous activities that historically occurred offline continue to shift online.
Some key industry trends include: 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. Numerous activities that historically occurred offline continue to shift online.
We continue to invest in new features for our existing solutions and new solutions such as our new product Activate, which allows buyers to execute direct deals on our platform across publisher inventory, and Convert, our commerce media solution, both of which were launched in 2023.
We continue to invest in new features for our existing solutions and emerging solutions such as our product Activate, which allows buyers to execute direct deals on our platform across publisher inventory, and Convert, our commerce media solution.
ITEM 1. BUSINESS Overview PubMatic, Inc. (“we”, or “us) is an independent technology company seeking to maximize customer value by delivering digital advertising’s supply chain of the future. Our mission is to fuel the endless potential of Internet content creators.
ITEM 1. BUSINESS Overview PubMatic, Inc. (“we”, or “us) is an independent technology company seeking to maximize customer value by delivering digital advertising’s supply chain of the future.
As of December 31, 2023, we had 948 employees, of whom 290 were located in the United States, 537 in India, and 121 in our other offices around the world. Corporate Information We were incorporated in the State of Delaware in 2006. Our internet address is www.pubmatic.com.
As of December 31, 2024, we had 1,049 employees, of whom 319 were located in the United States, 604 in India, and 126 in our other offices around the world. Corporate Information We were incorporated in the State of Delaware in 2006. Our internet address is www.pubmatic.com.
Our platform also 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 platform also 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 Industry The digital advertising ecosystem continues to evolve and adapt at a rapid pace.
Values: • We put the customer first. • We are biased towards action. • We are leaders and innovators. • We are committed to integrity. • We celebrate teamwork. 12 Table of Contents Cultural Principles: • We will empower every individual team member and treat each other as partners. • We will make having fun a priority. • We will hire and retain the best talent. • We will communicate internally with honesty, transparency, and authenticity, including positive and negative information. • We will encourage diversity and inclusion of ideas and people, creating a high-trust and high-performance workplace.
Cultural Principles: • We will empower every individual team member and treat each other as partners. • We will make having fun a priority. • We will hire and retain the best talent. • We will communicate internally with honesty, transparency, and authenticity, including positive and negative information. • We will encourage diversity and inclusion of ideas and people, creating a high-trust and high-performance workplace.
Most notably, these include the General Data Protection Regulation (the “GDPR”) which took effect in the European Union in May 2018, and the California Consumer Privacy Act (the “CCPA”) which took effect in January 2020 and was later amended by the California Privacy Rights Act (the “CPRA”), with those amendments taking effect in January 2023.
Most notably, these include the General Data Protection Regulation (the “GDPR”) which took effect in the European Union in May 2018, and the California Consumer Privacy Act (as amended, the “CCPA”) which took effect in January 2020.
This desire for efficiency and control has led to a growing trend among advertisers to establish direct relationships with vendors in the digital advertising ecosystem that have transparent business practices and technical capabilities to meet their objectives.
This desire for efficiency and control has led to a growing trend among advertisers to establish direct relationships with vendors in the digital advertising ecosystem that have transparent business practices and technical capabilities to meet their objectives. Additionally, buyers are increasingly interested in adopting integrated solutions on one platform that provides both demand side and sell side functionality.
The initial one-year term of the current agreement ended in May 2019, and it automatically renews for successive one-year terms unless either party provides written notice at least 60 days’ prior to the end of the initial term or such successive terms. Either party may terminate for convenience upon providing at least 30 days’ prior written notice.
We are party to an agreement with Google LLC, under which Google is a buyer on our platform. The initial one-year term of the current agreement ended in May 2019, and it automatically renews for successive one-year terms unless either party provides written notice at least 60 days’ prior to the end of the initial term or such successive terms.
The use of standard contractual clauses for the transfer of personal data specifically to the United States remains under review by a number of European data protection supervisory authorities.
The use of other approved cross-border transfer mechanisms, such as the standard contractual clauses for the transfer of personal data specifically to the United States, remains under review by a number of European data protection supervisory authorities, and United States regulators have increasingly scrutinized cross-border bulk transfers of data.
Data Privacy Framework, and in October 2023 we self-certified to comply with the EU-U.S. Data Privacy Framework, the UK Extension to the EU-U.S. Data Privacy Framework, and the Swiss-U.S. Data Privacy Framework as a mechanism to legally facilitate personal data transfers from the EU, the U.K., and Switzerland to the U.S.
On July 10, 2023, the European Commission approved the EU-U.S. Data Privacy Framework as a valid transfer mechanism, and in October 2023 we self-certified to comply with the EU-U.S. Data Privacy Framework, the UK Extension to the EU-U.S. Data Privacy Framework, and the Swiss-U.S.
Efficiency includes reducing operational costs, increasing the simplicity of the buying process, and increasing the return on ad spend or investment. Control refers to the buyer determining which media, content, or consumer their ad spend is being invested with to avoid appearing next to content that reflects poorly on the advertiser’s brand or purchasing fraudulent or fake inventory.
Additionally, buyers want control in determining which media, content, or consumer their ad spend is being invested with to avoid appearing next to content that reflects poorly on the advertiser’s brand or purchasing fraudulent or fake inventory.
We will continue to invest in our go to market efforts to sell these new offerings such as Connect, Activate and Convert, which drives new revenues streams, and have begun to shift customers from a free to fee model for existing solutions such as OpenWrap. 7 Table of Contents Infrastructure Platform Efficiency: We have a track record of expanding the capacity of our infrastructure platform, while maintaining or reducing the corresponding costs related to processing impressions transacted on our platform on a per impressions basis.
We will continue to invest in our go to market efforts to sell these new offerings such as Connect, Activate and Convert, which drives new revenues streams, and have begun to shift customers from a free to fee model for existing solutions such as OpenWrap.
Consolidation and Convergence of the Sell Side and Buy Side Technology Platforms: As advertisers increase the percentage of their overall advertising budgets spent on digital formats, they are increasingly demanding greater efficiency and control of their entire digital advertising supply chain.
Consolidation and Convergence of the Digital Advertising Supply Chain: As advertisers increase the percentage of their overall advertising budgets spent on digital formats, they are increasingly demanding greater efficiency and control of their entire digital advertising supply chain. Buyers are looking to reduce operational costs, simplify their buying operations, and increase the return on ad spend or investment.
The GDPR and the CCPA, as well as other global and U.S. state consumer privacy laws and regulations, have created a compliance burden for advertisers, publishers, and their partners to navigate.
The GDPR and the CCPA, as well as other global and U.S. state consumer privacy laws and regulations, have created a compliance burden for advertisers, publishers, and their partners to navigate. More recently, state privacy regimes have continued to expand, and we must monitor and comply with a growing number of state regulations that may be inconsistent or imprecise.
The CCPA and CPRA set forth high potential liabilities for data privacy violations on a per-record basis, and the industry faces an uncertain compliance burden as our partners and publishers work to become compliant with the law.
The CCPA sets forth high potential liabilities for data privacy violations on a per-record basis, and the industry faces an uncertain compliance burden as our partners and publishers work to become compliant with the law. Likewise, over a third of U.S. states have passed their own comprehensive consumer privacy laws and many other states are considering doing so as well.
Despite our efforts to protect our intellectual property rights, they may not be respected in the future or may be invalidated, circumvented, or challenged. In addition, the laws of various foreign countries where our products are distributed may not protect our intellectual property rights to the same extent as laws in the United States.
In addition, the laws of various foreign countries where our products are distributed may not protect our intellectual property rights to the same extent as laws in the United States. Privacy and Data We are subject to laws and regulations governing privacy and the transmission, collection, and use of personal data.
We signed a prior similar agreement with a Google subsidiary in 2012. We are also party to an agreement with The Trade Desk, Inc., under which The Trade Desk is a buyer on our platform. The initial term of the agreement ended in November 2013, and it automatically renews for successive one-year terms.
Either party may terminate for convenience upon providing at least 30 days’ prior written notice. We signed a prior similar agreement with a Google subsidiary in 2012. We are also party to an agreement with The Trade Desk, Inc., under which The Trade Desk is a buyer on our platform.
Our workplaces have been recognized as a Great Place to Work in the United States, India, Asia, and Europe. We have achieved these results by delivering custom learning programs and creating opportunities for advancement that align with the dynamic needs of our business.
Our workplaces have been recognized as a Great Place to Work in the United States, India, Asia, and Europe. 11 Table of Contents We have achieved these results by creating employee experiences that foster deep employee engagement built upon personal development and achievement that is supported by continuous feedback, learning, and team building.
This new Data Privacy Framework could be subject to legal challenge in front of the CJEU, specifically by Max Schrems, who successfully litigated to invalidate the Privacy Shield in 2020 and has indicated that he will legally challenge these new frameworks.
Data Privacy Framework as a mechanism to legally facilitate personal data transfers from the EU, the U.K., and Switzerland to the U.S. This new Data Privacy Framework could be subject to legal challenge in front of the Court of Justice of the European Union (“CJEU”), specifically by Max Schrems, who successfully litigated to invalidate the prior EU-U.S.
Intellectual Property The protection of our technology and intellectual property is an important component of our success. We protect our intellectual property rights by relying on federal and state statutory and common law rights, foreign laws where applicable, and contractual restrictions.
We protect our intellectual property rights by relying on federal and state statutory and common law rights, foreign laws where applicable, and contractual restrictions. We seek to control access to our proprietary technology by entering into non-disclosure agreements with third parties and disclosure and invention assignment agreements with our employees and contractors.
We currently own two issued U.S. patents, expiring in 2034, relating to online advertising and auction techniques. We also own one issued Japanese patent. We also own trademark registrations and applications for the “PubMatic” name and variants thereof and other product-related marks in the United States and certain foreign countries.
We consider our trademarks, patents, copyrights, trade secrets, and other intellectual property rights to be, in the aggregate, material to our business. We currently own two issued U.S. patents, expiring in 2034, relating to online advertising and auction techniques. We also own one issued Japanese patent.
Additionally, the UK GDPR will also have the ability to fine up to the greater of £17.5 million or 4% of global turnover.
Additionally, the UK GDPR will also have the ability to fine up to the greater of £17.5 million or 4% of global turnover. Other jurisdictions have enacted legislation that closely tracks the concepts, obligations, and consumer rights described in the GDPR, including Brazil’s General Data Protection law and India’s Digital Personal Data Protection Act of 2023.
We have also registered numerous Internet domain names related to our business. We believe our platform would be difficult, time consuming, and costly to replicate. We intend to pursue additional intellectual property protection to the extent we believe it would be beneficial and cost effective.
We also own trademark registrations and applications for the “PubMatic” name and variants thereof and other product-related marks in the United States and certain foreign countries. We have also registered numerous Internet domain names related to our business. We believe our platform would be difficult, time consuming, and costly to replicate.
We also enter into written service agreements with our buyers, primarily DSPs, that allow them to use our platform to buy ad inventory. Two of our largest DSP relationships are with Google and The Trade Desk. We are party to an agreement with Google LLC, under which Google is a buyer on our platform.
To facilitate the sale of publisher inventory, we enter into written service agreements with our buyers, primarily DSPs, that allow them to use our platform to buy ad inventory. Digital advertising spend has historically been subject to seasonality.
We believe that strong and diverse customer teams deepen customer relationships, promote innovation, and increase productivity. Our people strategy revolves around creating employee experiences that foster deep employee engagement built upon personal development and achievement that is supported by continuous feedback, learning, and team building.
We believe that strong and diverse customer teams deepen customer relationships, promote innovation, and increase productivity.
Removed
Additionally, buyers are increasingly interested in adopting integrated solutions on one platform that provides both demand side and sell side functionality, to deliver on their efficiency and control objectives. This has resulted in a larger portion of media spend consolidating onto fewer, more capable technology platforms.
Added
Our mission is to fuel the endless potential of Internet content creators and to enable a thriving, advertisement-funded open internet where global audiences can gain free or affordable access to information and entertainment.
Removed
These laws and institutions enable Internet consumers to assert their rights over the use of their online data in advertising transactions, a trend which we support.
Added
This has resulted in a larger portion of media spend consolidating onto fewer, more capable technology platforms. Data Privacy and Regulatory Challenges: There is an increasing awareness of how Internet user data is being leveraged to target ads, resulting in a growing number of privacy laws and regulations.
Removed
Either party may terminate for convenience upon providing at least 30 days’ prior written notice. Digital advertising spending has historically been subject to seasonality.
Added
Infrastructure Platform Efficiency: We have a track record of expanding the capacity of our infrastructure platform, while maintaining or reducing the corresponding costs related to processing impressions transacted on our platform on a per impressions basis.
Removed
We seek to control access to our proprietary technology by entering into non-disclosure agreements with third parties and disclosure and invention assignment agreements with our employees and contractors. 9 Table of Contents We consider our trademarks, patents, copyrights, trade secrets, and other intellectual property rights to be, in the aggregate, material to our business.
Added
Customer Concentration 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. Two of our largest DSP relationships are with Google and The Trade Desk.
Removed
Privacy and Data We are subject to laws and regulations governing privacy and the transmission, collection, and use of personal data.
Added
The initial term of the agreement ended in November 2013, and it automatically renews for successive one-year terms. Either party may terminate for convenience upon providing at least 30 days’ prior written notice. 9 Table of Contents Intellectual Property The protection of our technology and intellectual property is an important component of our success.
Removed
Adding further complexity in California, the CPRA imposed additional data protection obligations on companies doing business in California, including additional consumer rights processes and opt-outs for certain uses of sensitive data and sharing of personal data.
Added
We intend to pursue additional intellectual property protection to the extent we believe it would be beneficial and cost effective. Despite our efforts to protect our intellectual property rights, they may not be respected in the future or may be invalidated, circumvented, or challenged.
Removed
Likewise, several U.S. state laws took effect in 2023: Virginia enacted the Consumer Data Protection Act (“CDPA”), Connecticut enacted the Connecticut Data Privacy Act (“CTDPA”), Colorado enacted the Colorado Privacy Act (“CPA”), and Utah enacted the Utah Consumer Privacy Act (“UCPA”), which impose consumer rights processes and requires user consent for certain types of sensitive data.
Added
Privacy Shield framework in 2020 and has indicated that he will legally challenge these new frameworks.
Removed
Additional state privacy laws have been enacted and are set to take effect between 2024 and 2026: the Florida Digital Bill of Rights (July 1, 2024), Oregon’s protections for the personal data of consumer enacted through SB 619 (July 1, 2024), the Texas Data Privacy and Security Act (July 1, 2024), Montana’s Consumer Data Privacy Act (October 1, 2024), the Delaware Personal Data Privacy Act (January 1, 2025), Iowa’s Consumer Data Protection Act (January 1, 2025), the New Jersey Senate Bill 332 (January 15, 2025), the Tennessee Information Protection Act (July 1, 2025) and the Indiana Consumer Data Protection Act (January 1, 2026).
Added
Values: • We put the customer first. • We are biased towards action. • We are leaders and innovators. • We are committed to integrity. • We celebrate teamwork.
Removed
We had relied on the EU-U.S. Privacy Shield framework (“Privacy Shield Framework”), to transfer personal data of EU subjects to the United States, but the Privacy Shield Framework was declared invalid by the Court of Justice of the European Union (“CJEU”) on July 16, 2020.
Removed
In October 2022, the Biden administration negotiated new privacy transfer terms with EU regulators, and signed an Executive Order directing the steps the United States would take to implement its commitments to an EU/U.S. Data Privacy Framework. On July 10, 2023, the European Commission adopted an adequacy decision for the EU-U.S.
Removed
Related to cross-border transfers, in its July 16, 2020 decision, while the CJEU upheld the adequacy of the standard contractual clauses (a standard form of contract approved and promulgated by the European Commission as an adequate personal data transfer mechanism and potential alternative to the then-invalidated Privacy Shield Framework), it made clear that reliance on them alone may not necessarily be sufficient in all circumstances and cast doubt on their future use.
Removed
Use of the standard contractual clauses must now be assessed on a case-by-case basis taking into account the legal regime applicable in the destination country, in particular applicable surveillance laws and rights of individuals.
Removed
Further, the EU is currently in discussions to replace the ePrivacy Directive (commonly called the “Cookie Directive”) with the ePrivacy Regulation that governs the use of technologies that collect, access, and store consumer information and may create additional compliance burdens for us in Europe. 11 Table of Contents Other jurisdictions have enacted legislation that closely tracks the concepts, obligations, and consumer rights described in the GDPR, including Brazil’s General Data Protection law and Thailand’s Personal Data Protection Act.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

136 edited+34 added−31 removed276 unchanged
Biggest changeIf companies are forced to rely on targeting methodologies other than cookies, such companies may instead rely on proprietary products, algorithms, or statistical methods to track consumers without cookies, or may utilize log-in credentials entered by consumers into other web properties owned by those companies such as their email services to track web usage, including usage across multiple devices. 17 Table of Contents Additionally, such 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.
Biggest changeAdditionally, 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. Many applications and other content creators also allow consumers to avoid receiving advertisements by paying for subscriptions or other downloads.
Additionally, AI applications generally state they do not use personal information or other classes of protected information, but we may not know the source of data used by an AI application and may inadvertently incorporate personal information, or data derived from personal information, in the course of using an AI application.
Additionally, AI applications generally state they do not use personal data or other classes of protected data, but we may not know the source of data used by an AI application and may inadvertently incorporate personal information, or data derived from personal data, in the course of using an AI application.
However, the ruling requires that European organizations seeking to rely on the SCCs to export data out of the European Union must ensure the data is protected to a standard that is “essentially equivalent” to that in the European Union, including, where necessary, by taking “supplementary measures” to protect the data.
However, the ruling requires that organizations seeking to rely on the SCCs to export data out of the European Union must ensure the data is protected to a standard that is “essentially equivalent” to that in the European Union, including, where necessary, by taking “supplementary measures” to protect the data.
These provisions include: • a provision that our board of directors will be classified into three classes of directors with staggered three-year terms at such time as the outstanding shares of our Class B common stock represent less than a majority of the combined voting power of our common stock, which could delay the ability of stockholders to change the membership of our board; • the ability of our board to issue shares of preferred stock without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer; • a prohibition on stockholder action by written consent effective upon such time as the outstanding shares of our Class B common stock represent less than a majority of the combined voting power of our common stock; • the requirement that a special meeting of stockholders may be called only by the chairman of the board, our chief executive officer, our lead director, or a majority of our board; • the requirement for the affirmative vote of holders of at least 66-2/3% of the voting power of all of the then outstanding shares of the voting stock, voting together as a single class, to amend provisions of our restated certificate of incorporation or our restated bylaws; • the ability of our board to amend the bylaws, which may allow it to take additional actions to prevent an unsolicited takeover and inhibit the ability of an acquirer; • the requirement that stockholders submitting notice of a nomination or proposal to be considered at an annual meeting of our stockholders must have continuously beneficially owned at least 1% of our outstanding common stock for a period of one year before giving such notice; 39 Table of Contents • advance notice procedures with which stockholders must comply to nominate candidates to our board or to propose matters to be acted upon at a stockholders’ meeting; and • the dual class common stock structure in which holders of our Class B common stock have the ability to control the outcome of matters requiring stockholder approval, even if they own significantly less than a majority of the outstanding shares of our common stock, including the election of directors and significant corporate transactions, such as a merger or other sale of our company or its assets.
These provisions include: • a provision that our board of directors will be classified into three classes of directors with staggered three-year terms at such time as the outstanding shares of our Class B common stock represent less than a majority of the combined voting power of our common stock, which could delay the ability of stockholders to change the membership of our board; • the ability of our board to issue shares of preferred stock without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer; • a prohibition on stockholder action by written consent effective upon such time as the outstanding shares of our Class B common stock represent less than a majority of the combined voting power of our common stock; • the requirement that a special meeting of stockholders may be called only by the chairman of the board, our chief executive officer, our lead director, or a majority of our board; • the requirement for the affirmative vote of holders of at least 66-2/3% of the voting power of all of the then outstanding shares of the voting stock, voting together as a single class, to amend provisions of our restated certificate of incorporation or our restated bylaws; • the ability of our board to amend the bylaws, which may allow it to take additional actions to prevent an unsolicited takeover and inhibit the ability of an acquirer; • the requirement that stockholders submitting notice of a nomination or proposal to be considered at an annual meeting of our stockholders must have continuously beneficially owned at least 1% of our outstanding common stock for a period of one year before giving such notice; • advance notice procedures with which stockholders must comply to nominate candidates to our board or to propose matters to be acted upon at a stockholders’ meeting; and • the dual class common stock structure in which holders of our Class B common stock have the ability to control the outcome of matters requiring stockholder approval, even if they own significantly less than a majority of the outstanding shares of our common stock, including the election of directors and significant corporate transactions, such as a merger or other sale of our company or its assets.
For example, digital advertisers tend to devote a large portion of their budgets to campaigns in the fourth quarter of the year, to coincide with consumer holiday spending, and then have a significantly smaller advertising budget in the first calendar quarter. Pricing of digital ad impressions in the fourth quarter is likely to be higher due to increased demand.
For example, digital advertisers historically tend to devote a large portion of their budgets to campaigns in the fourth quarter of the year, to coincide with consumer holiday spending, and then have a significantly smaller advertising budget in the first calendar quarter. Pricing of digital ad impressions in the fourth quarter is likely to be higher due to increased demand.
Restrictions have been placed upon the collection, management, aggregation, and use of information, and compliance with those restrictions may require us to change how we collect, manage, aggregate, and use data in the future, which could result in a material increase in the cost of collecting or otherwise obtaining certain kinds of data.
Restrictions have been placed upon the collection, management, aggregation, transfer, and use of information, and compliance with those restrictions may require us to change how we collect, manage, aggregate, transfer, and use data in the future, which could result in a material increase in the cost of collecting or otherwise obtaining certain kinds of data.
Accordingly, the remedies and damages available to us for unauthorized use of our software or products may be limited. Historically, we have prioritized keeping our technology architecture, trade secrets, and engineering roadmap private, and as a general matter, have not patented our proprietary technology.
Accordingly, the remedies and damages available to us for unauthorized use of our software or products may be limited. Historically, we have prioritized keeping our technology architecture, trade secrets, and engineering roadmap private and confidential, and as a general matter, have not patented our proprietary technology.
Moreover, on March 10, 2023, SVB was closed by the California Department of Financial Protection and Innovation and subsequently appointed the Federal Deposit Insurance Corporation (“FDIC”) as receiver. Similarly, on March 12, 2023, Signature Bank and Silvergate Capital Corp. were each swept into receivership.
On March 10, 2023, SVB was closed by the California Department of Financial Protection and Innovation and subsequently appointed the Federal Deposit Insurance Corporation (“FDIC”) as receiver. Similarly, on March 12, 2023, Signature Bank and Silvergate Capital Corp. were each swept into receivership.
If we cannot retain or add individual publishers with valuable ad impressions, or if such publishers decide not to make their valuable ad impressions available to us, then our buyers may be less inclined to use our platform, which could adversely affect our business, results of operations, and financial condition. 14 Table of Contents 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.
If we cannot retain or add individual publishers with valuable ad impressions, or if such publishers decide not to make their valuable ad impressions available to us, then our buyers may be less inclined to use our platform, which could adversely affect our business, results of operations, and financial condition. 13 Table of Contents 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.
If we fail to meet or exceed such expectations for these or any other reasons, the trading price of our Class A common stock could fall, and we could face costly litigation, including securities class action lawsuits. 15 Table of Contents 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, we may not attract and retain publishers and buyers, which could adversely affect our business, results of operations, and financial condition.
If we fail to meet or exceed such expectations for these or any other reasons, the trading price of our Class A common stock could fall, and we could face costly litigation, including securities class action lawsuits. 14 Table of Contents 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, we may not attract and retain publishers and buyers, which could adversely affect our business, results of operations, and financial condition.
As we rely heavily on our data center facilities, computer and communications systems, and the Internet to conduct our business and provide high-quality customer service, these disruptions could negatively impact our ability to operate our business and either directly or indirectly disrupt publishers’ and partners’ businesses, which could adversely affect our business, results of operations, and financial condition. 26 Table of Contents We use artificial intelligence in our business, and challenges with properly managing its use could result in reputational harm, competitive harm, and legal liability, and adversely affect our results of operations.
As we rely heavily on our data center facilities, computer and communications systems, and the Internet to conduct our business and provide high-quality customer service, these disruptions could negatively impact our ability to operate our business and either directly or indirectly disrupt publishers’ and partners’ businesses, which could adversely affect our business, results of operations, and financial condition. 25 Table of Contents We use artificial intelligence in our business, and challenges with properly managing its use could result in reputational harm, competitive harm, and legal liability, and adversely affect our results of operations.
Additionally, consumers can, with increasing ease, implement technologies that limit our ability to collect and use data to deliver advertisements or otherwise limit the effectiveness of our platform. Cookies may be deleted or blocked by consumers.
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.
Maintaining and upgrading our capabilities associated with ad quality and inventory quality is complex and costly. Maintaining high-quality inventory may become increasingly difficult with the advent of “deep fake” video and other media produced using artificial intelligence (“AI”).
Maintaining and upgrading our capabilities associated with ad quality and inventory quality is complex and costly. Maintaining high-quality inventory may become increasingly difficult with the advent and proliferation of “deep fake” video and other media produced using artificial intelligence (“AI”).
We also generally receive representations from publishers, buyers, and data providers about their privacy practices and compliance with applicable laws and regulations, including their maintenance of adequate privacy policies that disclose and permit our data collection practices.
We also generally receive representations from publishers, buyers, and data providers about their privacy practices and compliance with applicable laws and regulations, including their maintenance of adequate privacy policies that disclose and permit our data collection and transfer practices.
Internet users can, with increasing ease, implement practices or technologies that may limit our ability to collect and use data to deliver advertisements, or otherwise inhibit the effectiveness of our platform.
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.
In addition, any party who is able to illicitly obtain a user’s password could access the user’s transaction data or personal information, resulting in the perception that our systems are insecure.
In addition, any party who is able to illicitly obtain a user’s password could access the user’s transaction data or personal data, resulting in the perception that our systems are insecure.
As part of our growth strategy, we may acquire or invest in other businesses, assets, or technologies that we believe are complementary to and fit within our strategic goals. Any acquisition or investment may divert the attention of management and require us to use significant amounts of cash, issue dilutive equity securities, or incur debt.
As part of our growth strategy, we may acquire or invest in other businesses, assets, or technologies that we believe fit within our strategic goals. Any acquisition or investment may divert the attention of management and require us to use significant amounts of cash, issue dilutive equity securities, or incur debt.
In addition, the conflicts in Ukraine and Israel could cause unpredictable economic effects in Europe and EMEA, including potentially softening general consumer demand. Such conflicts have increased costs of labor and other items impacting our cost of revenue, and these conflicts and potential others may do so in the future.
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 have increased costs of labor and other items impacting our cost of revenue, and these conflicts and potential others may do so in the future.
The CCPA is also still enforceable by the California Attorney General, and there is a CCPA private right of action relating to certain data security incidents. The CCPA generally requires covered businesses to, among other things, provide new disclosures to California consumers regarding the collection, use and disclosure of their personal information.
The CCPA is also still enforceable by the California Attorney General, and there is a CCPA private right of action relating to certain data security incidents. The CCPA generally requires covered businesses to, among other things, provide disclosures to California consumers regarding the collection, use and disclosure of their personal data.
As of December 31, 2023, we had no outstanding borrowings under our Senior Secured Credit Facilities Credit Agreement (the “Credit Agreement”) with Silicon Valley Bank (“SVB”). Borrowings under the Credit Agreement are secured by substantially all of our assets. The Credit Agreement contains customary representations and warranties as well as customary affirmative and negative covenants.
As of December 31, 2024, we had no outstanding borrowings under our Senior Secured Credit Facilities Credit Agreement (the “Credit Agreement”) with Silicon Valley Bank (“SVB”). Borrowings under the Credit Agreement are secured by substantially all of our assets. The Credit Agreement contains customary representations and warranties as well as customary affirmative and negative covenants.
The U.S. federal government and various state and foreign governments have adopted or proposed limitations on the collection, distribution, use, and storage of data relating to individuals, including the use of contact information and other data for marketing, advertising and other communications with individuals and businesses.
The U.S. federal government and various state and foreign governments have adopted or proposed limitations on the collection, distribution, use, and storage of data relating to individuals, including the use of contact information, precise geolocation information, and other data for marketing, advertising and other communications with individuals and businesses.
IAB Europe previously collaborated with the digital advertising industry to create a user-facing framework (the Transparency and Control Framework, or “TCF”) for establishing and managing legal bases under the GDPR and other U.K. and EU privacy laws including the ePrivacy Directive.
IAB Europe previously collaborated with the digital advertising industry to create a user-facing framework (the Transparency and Consent Framework, or “TCF”) for establishing and managing legal bases under the GDPR and other U.K. and EU privacy laws including the ePrivacy Directive.
Problems faced by our third-party data center operations, with the telecommunications network providers with whom we or they contract, or with the systems by which our telecommunications providers allocate capacity among their customers, including us, could adversely affect the experience of publishers.
Problems faced by our third-party data center operations, with the telecommunications network providers with whom we or they contract, or with the systems by which our telecommunications providers allocate capacity among their customers, including us, could adversely affect the experience of publishers on our platform.
Our results of operations have fluctuated in the past, and future results of operations are likely to fluctuate as well. Although we have experienced prolonged revenue growth, we may not be able to sustain this growth rate, current revenue levels, or profitability.
Our results of operations have fluctuated in the past, and future results of operations are likely to fluctuate as well. Although we have experienced prolonged revenue growth, we may not be able to sustain our historical growth rate, current revenue levels, or profitability.
We face intense competition in the marketplace and are confronted by rapidly changing technology, 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 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 may not have adequate insurance or contractual indemnity arrangements to protect us against any such fines, penalties, claims, and losses. 18 Table of Contents Risk Related to the Advertising Industry and Competition The digital advertising industry is intensely competitive, and if we do not effectively compete against current and future competitors, our business, results of operations, and financial condition could be adversely affected.
We may not have adequate insurance or contractual indemnity arrangements to protect us against any such fines, penalties, claims, and losses. Risk Related to the Advertising Industry and Competition The digital advertising industry is intensely competitive, and if we do not effectively compete against current and future competitors, our business, results of operations, and financial condition could be adversely affected.
One or more large, successful claims against us in excess of our available insurance coverage, or changes in our insurance policies, including premium increases or large deductible or co-insurance requirements, could have an adverse effect on our business, operating results and financial condition. 32 Table of Contents Failure to comply with industry self-regulation could adversely affect our business, results of operations, and financial condition.
One or more large, successful claims against us in excess of our available insurance coverage, or changes in our insurance policies, including premium increases or large deductible or co-insurance requirements, could have an adverse effect on our business, operating results and financial condition. Failure to comply with industry self-regulation could adversely affect our business, results of operations, and financial condition.
If we were to be found responsible for such a violation, it could adversely affect our reputation, as well as our business, results of operations, and financial condition. Legal uncertainty and industry unpreparedness for new regulations may mean substantial disruption and inefficiency, demand constraints, and reduced inventory supply and value.
If we were to be found responsible for such a violation, it could adversely affect our reputation, as well as our business, results of operations, and financial condition. 29 Table of Contents Legal uncertainty and industry unpreparedness for new regulations may mean substantial disruption and inefficiency, demand constraints, and reduced inventory supply and value.
In addition, cyberattack techniques are constantly evolving and becoming increasingly diverse and sophisticated, and could involve denial-of-service attacks or other maneuvers that have the effect of disrupting the availability of services on our platform. Other types of cyberattacks could harm us even if our platform operations are left undisturbed.
In addition, cyberattack techniques are constantly evolving and becoming increasingly diverse and sophisticated, and could involve denial-of-service attacks or other maneuvers that have the effect of disrupting the availability of services on our platform. 22 Table of Contents Other types of cyberattacks could harm us even if our platform operations are left undisturbed.
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 device identifiers.
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.
The 2023 Repurchase Program may be modified, suspended, or terminated at any time, and we cannot guarantee that the 2023 Repurchase Program will be fully consummated or that it will enhance long-term stockholder value.
The 2024 Repurchase Program may be modified, suspended, or terminated at any time, and we cannot guarantee that the 2024 Repurchase Program will be fully consummated or that it will enhance long-term stockholder value.
Online political advertising laws are rapidly evolving and our publishers may impose restrictions on receiving political advertising, especially in light of the 2024 elections both in the United States and in foreign jurisdictions.
Online political advertising laws are rapidly evolving, and our publishers may impose restrictions on receiving political advertising, especially in light of recent elections both in the United States and in foreign jurisdictions.
Without cookies, mobile device identifiers, and other tracking technology data, transactions processed through our platform would be executed with less insight into consumer activity, reducing the precision of advertisers' decisions about which impressions to purchase for an advertising campaign.
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.
Any change in export or import regulations, economic sanctions or related legislation, or change in the countries, governments, persons, or technologies targeted by such regulations, could result in decreased use of our platform by, or in our decreased ability to export our technology and services to, existing or potential customers with international operations.
Any change in export or import regulations, global trade activity, economic sanctions or related legislation, or change in the countries, governments, persons, or technologies targeted by such regulations, could result in decreased use of our platform by, or in our decreased ability to export our technology and services to, existing or potential customers with international operations.
Ineffective disclosure controls and procedures and internal control over financial reporting could also cause investors to lose confidence in our reported financial and other information, which would likely have a negative effect on the trading price of our Class A common stock.
Ineffective disclosure controls and procedures and internal control over financial reporting could also cause investors to lose confidence in our reported financial and other information, which would likely 35 Table of Contents have a negative effect on the trading price of our Class A common stock.
In any of these cases, we may be required to expend significant time and expense to prevent infringement or to enforce our rights. 34 Table of Contents Our customer agreements generally restrict the use of our confidential information solely to such customer’s use in connection with its use of our offerings.
In any of these cases, we may be required to expend significant time and expense to prevent infringement or to enforce our rights. Our customer agreements generally restrict the use of our confidential information solely to such customer’s use in connection with its use of our offerings.
Any failure to achieve required data protection standards (which are not currently clear when applied to the online advertising ecosystem) may result in lawsuits, regulatory fines, or other actions or liability, all of which may harm our results of operations.
Any failure to achieve required data protection standards (which are not currently clear when applied to the online advertising ecosystem) may result in lawsuits, regulatory fines, or other actions or liability, all of which may harm our results of operations and revenue opportunities.
Export Administration Regulations and the various sanctions programs administered by the U.S. Department of the Treasury’s Office of Foreign Assets Control (collectively, “Trade Controls”). U.S. Trade Controls may prohibit the shipment of specified products and services to certain countries, governments, and persons.
Export Administration Regulations and the various sanctions programs administered by the U.S. Department of the 32 Table of Contents Treasury’s Office of Foreign Assets Control (collectively, “Trade Controls”). U.S. Trade Controls may prohibit the shipment of specified products and services to certain countries, governments, and persons.
In the future, we or our third-party service providers may experience social engineering, ransomware, phishing, malware and similar attacks and threats of denial-of-service attacks and such attacks could have a material adverse effect on our operations and financial condition.
In the future, we or our third-party service providers may experience social engineering, ransomware, phishing, malware and similar attacks and threats of denial-of-service 31 Table of Contents attacks and such attacks could have a material adverse effect on our operations and financial condition.
Moreover, we may not make the right decisions regarding these investments. For example, we recently launched two new products, Activate and Convert, which may not be widely adopted or result in incremental value. New formats and channels, such as mobile header bidding and CTV, present unique challenges that we must address to succeed.
Moreover, we may not make the right decisions regarding these investments. For example, we launched two products, Activate and Convert, which may not ultimately be widely adopted or result in incremental value. Newer formats and channels, such as mobile header bidding and CTV, present unique challenges that we must address to succeed.
In addition, adverse economic conditions, inflation, changes in foreign exchange rates or interest rates, or general economic uncertainty may cause advertisers to decrease purchases of digital ad impressions, adversely affecting our business, results of operation and financial condition.
In addition, adverse economic conditions, inflation, changes in foreign exchange rates or interest rates, international trade tensions, or general economic uncertainty may cause advertisers to decrease purchases of digital ad impressions, adversely affecting our business, results of operation and financial condition.
Outages and disruptions of our platform, including any caused by cyberattacks, may harm our reputation and adversely affect our business, results of operations, and financial condition. 23 Table of Contents Our software platform could be susceptible to errors, defects, or unintended performance problems that could adversely affect our business, results of operations, and financial condition.
Outages and disruptions of our platform, including any caused by cyberattacks, may harm our reputation and adversely affect our business, results of operations, and financial condition. Our software platform could be susceptible to errors, defects, or unintended performance problems that could adversely affect our business, results of operations, and financial condition.
Because the interpretation and application of privacy and data protection laws, such as the CCPA and GDPR, and their related regulations and standards, are uncertain and sometimes contradictory across jurisdictions, it is possible that these laws, regulations and standards may be interpreted and applied in manners that are, or are asserted to be, inconsistent with our data management practices or the technological features of our solutions.
Because the interpretation and application of privacy and data protection laws, such as the CCPA and GDPR, and their related regulations and standards, are potentially uncertain and may be different across jurisdictions, it is possible that these laws, regulations and standards may be interpreted and applied in manners that are, or are asserted to be, inconsistent with our data management practices or the technological features of our solutions.
While the FDIC has taken steps to make whole all depositors of SVB, there is no assurance that similar guarantees will be made in the event of further bank closures and continued instability in the global banking system.
While the FDIC has taken steps to make whole all depositors of SVB, there is no assurance that similar guarantees will be made in the event of further bank closures or instability in the global banking system.
Although our board of directors has authorized the 2023 Repurchase Program, the program does not obligate us to repurchase any specific dollar amount or to acquire any specific number of shares of our Class A common stock.
Although our board of directors authorized the 2024 Repurchase Program, the program does not obligate us to repurchase any specific dollar amount or to acquire any specific number of shares of our Class A common stock.
In February 2023, our board of directors authorized and approved the 2023 Repurchase Program pursuant to which we may repurchase up to $75.0 million in aggregate of shares of our Class A common stock, with the authorization to expire on December 31, 2024.
In February 2023, our board of directors authorized and approved a program pursuant to which we could repurchase up to $75.0 million in aggregate of shares of our Class A common stock, with the authorization to expire on December 31, 2024 (the “2023 Repurchase Program”).
Moreover, events such as the closure of SVB, in addition to other global macroeconomic conditions, may cause further turbulence and uncertainty in the capital markets. Our tax liabilities may be greater than anticipated. The U.S. and non-U.S. tax laws applicable to our business activities are subject to interpretation and change.
Moreover, events such as the closure of SVB, in addition to other global macroeconomic conditions, may cause further disruptions and uncertainty in the capital markets. 36 Table of Contents Our tax liabilities may be greater than anticipated. The U.S. and non-U.S. tax laws applicable to our business activities are subject to interpretation and change.
These challenges may be exacerbated by the overall market and economic volatility, inflation, changes in foreign exchange rates or interest rates, disruptions to supply chains, pandemics, epidemics or other public health crises, and the resulting economic impacts, as many of our buyers are experiencing financial difficulties and liquidity constraints.
These challenges may be exacerbated by the overall market and economic volatility, inflation, changes in foreign exchange rates or interest rates, disruptions to supply chains, pandemics, epidemics or other public health crises, and the resulting economic impacts, as our buyers may experience financial difficulties and liquidity constraints.
This new proposed legislation may add additional complexity, variation in requirements, restrictions, and potential legal risk, require additional investment in resources to compliance programs, and could impact strategies and availability of previously useful data and could result in increased compliance costs and/or changes in business practices and policies.
New and proposed legislation has added and may in the future add additional complexity, variation in requirements, restrictions, and potential legal risk, require additional investment in resources to compliance programs, and could impact strategies and availability of previously useful data and could result in increased compliance costs and/or changes in business practices and policies.
In 2023, macroeconomic factors such as inflation, rising interest rates and softening demand in certain verticals caused some advertisers to reduce their advertising budgets.
In recent years, macroeconomic factors such as inflation, rising interest rates and softening demand in certain verticals caused some advertisers to reduce their advertising budgets.
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 safeguards, we may be subject to regulatory action.
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 safeguards, we may be subject to regulatory enforcement action or named in class-action lawsuits.
Significant portions of our development and advertising operations work is located in Pune, India, which is susceptible to earthquakes and flooding. In addition, economic or political instability caused by the conflicts in Ukraine, or Israel or international responses thereto, could adversely affect our business, results of operations, and financial condition.
Significant portions of our development and advertising operations work is located in Pune, India, which is susceptible to earthquakes and flooding. In addition, economic or political instability or international responses thereto could adversely affect our business, results of operations, and financial condition.
The CCPA also affords California consumers new abilities to opt-out of certain sales of personal information, a concept that is defined broadly and is subject to evolving regulations promulgated initially by the California Attorney General, and now the California Privacy Protection Agency (“CPPA”), a newly created agency under the CPRA charged with CCPA rulemaking and enforcement.
The CCPA also affords California consumers the ability to opt-out of certain sales of personal data, a concept that is defined broadly and is subject to evolving regulations promulgated initially by the California Attorney General, and now the California Privacy Protection Agency (“CPPA”), a newly created agency charged with CCPA rulemaking and enforcement.
Our platform relies on third-party open source software components. Failure to comply with the terms of the underlying open source software licenses could expose us to liabilities, and the combination of open source software with code that we develop could compromise the proprietary nature of our platform.
Failure to comply with the terms of the underlying open source software licenses could expose us to liabilities, and the combination of open source software with code that we develop could compromise the proprietary nature of our platform.
If our ability to use cookies, mobile device identifiers or other tracking technologies is limited, we may be required to develop or obtain additional applications and technologies to compensate for the lack of cookies, mobile device identifiers and other tracking technology data, which may not be available to us or could be time consuming or costly to develop, less effective, and subject to additional regulation.
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, and subject to additional regulation.
The costs and risks inherent in conducting business internationally include, but are not limited to: • difficulties and costs associated with maintaining effective controls at foreign locations; • adapting our platform and solutions to non-U.S. publishers’ preferences and customs; • regulatory and other delays and difficulties in setting up foreign operations, including difficulties in hiring personnel with skill sets and experience that match our international expansion efforts; • compliance with anti-bribery laws and regulations, export and import control and economic sanctions, laws and regulations; • compliance with foreign data privacy laws; • economic and political instability in some countries, including as a result of the conflicts in Ukraine and Israel; and • compliance with the laws of numerous taxing jurisdictions.
The costs and risks inherent in conducting business internationally include, but are not limited to: • difficulties and costs associated with maintaining effective controls at foreign locations; • adapting our platform and solutions to non-U.S. publishers’ preferences and customs; • regulatory and other delays and difficulties in setting up foreign operations, including difficulties in hiring personnel with skill sets and experience that match our international expansion efforts; • compliance with anti-bribery laws and regulations, export and import control and economic sanctions, laws and regulations; • compliance with foreign data privacy laws; • compliance with domestic and foreign bulk data transfer laws; • economic and political instability in some countries, including as a result of the conflict in Ukraine or a resumption of the conflict between Israel and Palestine; • trade disputes among countries, and changes in international trade volumes or pricing; and • compliance with the laws of numerous taxing jurisdictions.
The actual timing and amount of repurchases remain subject to a variety of factors, including stock price, trading volume, market conditions and other general business considerations, all of which may be negatively impacted by macroeconomic conditions and factors, including, for example, rising interest rates, inflation, and the wars in Ukraine and Israel.
The actual timing and amount of repurchases remain subject to a variety of factors, including stock price, trading volume, market conditions and other general business considerations, all of which may be negatively impacted by macroeconomic conditions and factors, including, for example, volatile interest rates, inflation, and geopolitical uncertainty.
If we are unable to obtain or maintain rights to any of this technology because of intellectual property infringement claims brought by third parties against our suppliers and licensors or against us, or if we are unable to continue to obtain the technology or enter into new agreements on commercially reasonable terms, our ability to operate and expand our business could be adversely affected.
If we are unable to obtain or maintain rights to any of this technology because of intellectual property infringement claims brought by third parties against our suppliers and licensors or against us, or if we are unable to continue to obtain the technology or enter into new agreements on commercially reasonable terms, our ability to operate and expand our business could be adversely affected. 34 Table of Contents Our platform relies on third-party open source software components.
This could make advertising through our platform less valuable and decrease our revenue as advertising budgets may be decreased or directed to alternatives that don’t rely on cookies, mobile device identifiers, and other tracking technology data.
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.
We operate in an industry with extensive intellectual property litigation. There is a risk that our business, platform, and services may infringe or be alleged to infringe the trademarks, copyrights, patents, and other intellectual property rights of third parties, including patents held by our competitors or by non-practicing entities.
There is a risk that our business, platform, and services may infringe or be alleged to infringe the trademarks, copyrights, patents, and other intellectual property rights of third parties, including patents held by our competitors or by non-practicing entities.
As of January 31, 2024, our directors and officers, and their respective affiliates, beneficially owned in the aggregate approximately 67.67% of the voting power of our capital stock.
As of January 31, 2025, our directors and officers, and their respective affiliates, beneficially owned in the aggregate approximately 68.3% of the voting power of our capital stock.
In the past, certain buyers have sought to slow their payments to us or been forced into filing for bankruptcy protection, resulting in us not receiving payment.
In the past, certain buyers have sought to slow their payments to us or have filed for bankruptcy protection, resulting in us not receiving payment.
The trading price of our Class A common stock has fluctuated substantially and may continue to do so. These fluctuations could cause you to incur substantial losses, including all of your investment in our Class A common stock.
Technology stocks historically have experienced high levels of volatility. The trading price of our Class A common stock has fluctuated substantially and may continue to do so. These fluctuations could cause you to incur substantial losses, including all of your investment in our Class A common stock.
We collect this data through various means, including from our own systems, pixels that publishers allow us to place on their websites to track consumer visits, software development kits installed in mobile applications, cookies, and other tracking technologies. Our publishers, buyers, and data providers may also choose to provide us with their proprietary data about consumers.
We collect this data through various means, including from our own systems, pixels that publishers allow us to place on their websites to track consumer visits, software development kits installed in mobile applications, cookies, and other tracking technologies.
We use “cookies,” or small text files placed on consumer devices when an Internet browser is used, as well as mobile device identifiers, to gather data that enables our platform to be more effective.
We use “cookies,” or small text files placed on consumer devices when an Internet browser is used, as well as mobile advertising identifiers, to gather data that enables our platform to better serve our customers.
We cannot yet fully predict the impact of such state laws or subsequent guidance on our business or operations, but it may require us to further modify our data processing practices and policies and to incur substantial costs and expenses in an effort to comply.
We cannot yet fully predict the impact of such state laws or subsequent guidance on our business or operations, but it may require us to further modify our data processing practices and policies and to incur substantial costs and expenses in an effort to comply, including the opportunity cost of devoting resources to developing compliance solutions over expanded platform capabilities.
On July 10, 2023, the European Commission adopted an adequacy decision for the EU-U.S. Data Privacy Framework, and we have self-certified to comply with the EU - U.S. Data Privacy Framework, the UK Extension to the EU-U.S. Data Privacy Framework, and the Swiss-U.S.
On July 10, 2023, the European Commission adopted an adequacy decision for the EU-U.S. Data Privacy Framework (“DPF”) as a valid transfer mechanism for data transfers to the United States, and we have self-certified to comply with the EU - U.S. Data Privacy Framework, the UK Extension to the EU-U.S. Data Privacy Framework, and the Swiss-U.S.
It remains possible that the SCCs may be later determined inadequate to cover our use of cookies and other tracking technologies placed directly on consumer’s browsers or devices through our publishers or buyers’ websites. We may also need to continue to restructure our data export practices because of Brexit.
It remains possible that the SCCs may be later determined inadequate to cover our use of cookies and other tracking technologies placed directly on consumer’s browsers or devices through our publishers or buyers’ websites.
We collect, maintain, transmit and store data about consumers, employees, partners and others, including personal and other confidential information. We also engage third parties that store, process, and transmit these types of information on our behalf. We rely on encryption and authentication technology licensed from third parties in an effort to securely transmit confidential and sensitive information, including payment information.
We also engage third parties that store, process, and transmit these types of information on our behalf. We rely on encryption and authentication technology licensed from third parties in an effort to securely transmit confidential and sensitive information, including payment information.
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.
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.
In addition, the Inflation Reduction Act of 2022 (the “Inflation Reduction Act”) imposes a 15% corporate alternative minimum tax and 1% excise tax on repurchases of corporate stock.
In addition, the Inflation Reduction Act of 2022 (the “Inflation Reduction Act”) imposes a 15% corporate alternative minimum tax and 1% excise tax on repurchases of corporate stock. We anticipate further changes in the tax laws of the United States in the future.
Further, European regulators continue to be focused on compliance with requirements in the online behavioral advertising ecosystem and enforcing national laws that implement the ePrivacy Directive (commonly called the “Cookie Directive”) in those ecosystems.
Further, European regulators continue to be focused on compliance with requirements in the online behavioral advertising ecosystem and enforcing national laws that implement the ePrivacy Directive (commonly called the “Cookie Directive”) in those ecosystems. European court decisions and regulators’ recent guidance continue to drive increased attention to cookies and tracking technologies.
If we fail to comply with any such laws or regulations, we may be subject to enforcement actions that may not only expose us to litigation, fines, and civil and/or criminal penalties, but also require us to change our business practices, each of which could adversely affect our business, results of operations, and financial condition.
If we fail to comply with any such laws or regulations, we may be subject to enforcement actions that may not only expose us to litigation, fines, and civil and/or criminal penalties, but also require us to change our business practices, each of which could adversely affect our business, results of operations, and financial condition. 26 Table of Contents The regulatory framework for data privacy worldwide is evolving and is likely to remain uncertain for the foreseeable future.
On our website, we offer consumers the ability to opt out of receiving advertisements based on cookies or other technologies. If we encounter difficulties implementing such guidelines, or our opt-out mechanisms fail to work as designed, we may experience negative publicity and be the subject of investigations or litigation.
If we encounter difficulties implementing such guidelines, or our opt-out mechanisms fail to work as designed, we may experience negative publicity and be the subject of investigations or litigation.
Our restated certificate of incorporation and restated bylaws contain provisions that could delay or prevent a change in control of our company. These provisions could also make it difficult for stockholders to elect directors who are not nominated by the current members of our board of directors or take other corporate actions, including effecting changes in our management.
These provisions could also make it difficult for stockholders to elect directors who are not nominated by the current members of our board of directors or take other corporate actions, including effecting changes in our management.
We expect to continue to rely on significant cost savings obtained by concentrating our technology and development and engineering work in India, rather than in the United States, but difficulties resulting from the factors noted above and other risks related to our operations in India could increase our expenses and harm our competitive position.
Further, such litigation may require significant expenditures of cash and management efforts and could harm our business, financial condition, and results of operations. 21 Table of Contents We expect to continue to rely on significant cost savings obtained by concentrating our technology and development and engineering work in India, rather than in the United States, but difficulties resulting from the factors noted above and other risks related to our operations in India could increase our expenses and harm our competitive position.
We may not have adequate indemnity to protect us against, and our insurance policies, may not cover, such claims and losses. 25 Table of Contents We cannot guarantee that our share repurchase program will be fully consummated or that it will enhance long-term stockholder value.
We may not have adequate indemnity to protect us against, and our insurance policies, may not cover, such claims and losses. We cannot guarantee that our share repurchase program will be fully consummated or that it will enhance long-term stockholder value. Share repurchases could also increase the volatility of the trading price of our stock and diminish our cash reserves.
If not waived, future defaults could cause all of the outstanding indebtedness under our Credit Agreement to become immediately due and payable and terminate all commitments to extend further credit. 36 Table of Contents If we do not have or are unable to generate sufficient cash to repay our debt obligations when they become due and payable, either upon maturity or in the event of a default, it could negatively impact our ability to operate and continue our business as a going concern.
If we do not have or are unable to generate sufficient cash to repay our debt obligations when they become due and payable, either upon maturity or in the event of a default, it could negatively impact our ability to operate and continue our business as a going concern.
Further, since we do not have direct relationships with end users, we rely on publishers to obtain such consents as required and may be subject to liability, including fines, lawsuits, and other penalties, if they fail to adhere to evolving consent requirements.
This may lower their inventory, at least temporarily, resulting in loss of ad spend and revenue for us. Further, since we do not have direct relationships with end users, we rely on publishers to obtain such consents as required and may be subject to liability, including fines, lawsuits, and other penalties, if they fail to adhere to evolving consent requirements.
Our revenue, net cash provided by operating activities, results of operations, and other key operating and performance metrics vary from quarter to quarter due to the seasonal nature of digital advertising spending.
Seasonal fluctuations or market changes in digital advertising activity could adversely affect our business, results of operations, and financial condition. Our revenue, net cash provided by operating activities, results of operations, and other key operating and performance metrics vary from quarter to quarter due to the seasonal nature of digital advertising spending.

… 121 more changes not shown on this page.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

6 edited+3 added−0 removed19 unchanged
Biggest changeOur information technology standards and infrastructure safeguards include information security standards prescribed for use by NIST, security measures aligned with the ISO/IEC 27000 series of standards, the Sarbanes-Oxley Act and SSAE 18/ISAE 3402, privacy regulations compliance, and other generally recognized industry standards, in each case, designed to safeguard the confidentiality, integrity and availability of our infrastructure and data and the resiliency of our operations. 40 Table of Contents In connection with these policies, we deploy technical safeguards that are designed to protect our information systems from cybersecurity threats, including firewalls, anti-malware functionality and access controls, which are evaluated and improved through vulnerability assessments and cybersecurity threat intelligence.
Biggest changeOur information technology standards and infrastructure safeguards include information security standards prescribed for use by NIST, security measures aligned with the ISO/IEC 27000 series of standards, the Sarbanes-Oxley Act and SSAE 18/ISAE 3402, privacy regulations compliance, and other generally recognized industry standards, in each case, designed to safeguard the confidentiality, integrity and availability of our infrastructure and data and the resiliency of our operations.
The Board and the Audit Committee also receive prompt and timely information regarding any cybersecurity incident that meets established reporting thresholds, as well as ongoing updates regarding any such incident until it has been addressed. On an annual basis, the Board and the Audit Committee will have the opportunity to discuss our approach to cybersecurity risk management with the SIMT.
The Board and the Audit Committee also receive prompt and timely information regarding any cybersecurity incident that meets established reporting thresholds, as well as ongoing updates regarding any such incident until it has been addressed. On an annual basis, the Board and the Audit Committee have the opportunity to discuss our approach to cybersecurity risk management with the SIMT.
Beginning in 2024, the Audit Committee will be provided updates on our process, procedures, policies and any cybersecurity incidents at least quarterly. In the event of a material incident, or incident that may be determined to be material, the Audit Committee is informed as soon as reasonably practical and provided regular updates by the SIMT.
Beginning in 2024, the Audit Committee was provided updates on our process, procedures, policies and any cybersecurity incidents at least quarterly. In the event of a material incident, or incident that may be determined to be material, the Audit Committee is informed as soon as reasonably practical and provided regular updates by the SIMT.
Our cybersecurity risk management program is overseen by our Senior Vice President, Infrastructure and Security (“SVP Security”), our executive management team, and our Board through the Audit Committee. Risk Management and Strategy We maintain a cross-functional cybersecurity program to identify, prevent, and mitigate cybersecurity threats and incidents.
Our cybersecurity risk management program is overseen by our Senior Vice President, Infrastructure and Security (“SVP Security”), who also serves as our Information Security Officer, our executive management team, and our Board through the Audit Committee. Risk Management and Strategy We maintain a cross-functional cybersecurity program to identify, prevent, and mitigate cybersecurity threats and incidents.
Our incident response and recovery planning are overseen by the SIMT and Company personnel who become aware of an incident or potential incident are required to notify the SIMT. The SIMT is comprised of senior members of management and subject matter experts and is responsible for overseeing our cybersecurity program and our response to any cybersecurity incidents.
Our incident response and recovery planning are overseen by the SIMT and Company personnel who become aware of an incident or potential incident are required to notify the SIMT.
These documents are reviewed on a periodic basis by the SIMT, and the Audit Committee will be apprised of the SIMT’s actions and potential improvements to the Security Policy and CIM process. 41 Table of Contents Our SVP Security has a strong background in engineering with over 30 years’ of industry experience in technology and security, and previously operated one of the world’s largest retail websites instituting and undergoing PCI and HIPPA certifications.
Our SVP Security has a strong background in engineering with over 30 years’ of industry experience in technology and security, and previously operated one of the world’s largest retail websites instituting and undergoing PCI and HIPPA certifications.
Added
In connection with these policies, we deploy technical safeguards that are designed to protect our information systems from cybersecurity threats, including firewalls, anti-malware functionality and access controls, which are evaluated and improved through vulnerability assessments and cybersecurity threat intelligence.
Added
The SIMT is comprised of senior members of 40 Table of Contents management and subject matter experts and is responsible for overseeing our cybersecurity program and our response to any cybersecurity incidents.
Added
These documents are reviewed on a periodic basis by the SIMT, and the Audit Committee is apprised of the SIMT’s actions and potential improvements to the Security Policy and CIM process.

Item 2. Properties

Properties — owned and leased real estate

1 edited+0 added−0 removed0 unchanged
Biggest changeITEM 2. PROPERTIES We lease office and data center space in various cities across North America, Europe and Asia Pacific. We believe that our facilities are adequate to meet our needs for the immediate future and that, should it be needed, we will be able to secure additional space to accommodate expansion of our operations.
Biggest changeITEM 2. PROPERTIES We lease office and data center space in various cities across North America, Europe and Asia Pacific. We believe that our facilities are adequate to meet our needs for the immediate future and that, should it be needed, we will be able to secure additional space to accommodate expansion of our operations. 41 Table of Contents

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

5 edited+0 added−0 removed9 unchanged
Biggest changeIssuer Purchases of Equity Securities The following table provides information about our repurchases of our Class A common stock during the three months ended December 31, 2023: Period Total Number of Shares Purchased Average Price Paid Per Share (2) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (1) October 1, 2023 - October 31, 2023 616,300 $ 12.06 616,300 $ 28,465,793 November 1, 2023 - November 30, 2023 461,271 $ 15.93 461,271 $ 21,118,403 December 1, 2023 - December 31, 2023 314,600 $ 17.12 314,600 $ 15,732,751 Total 1,392,171 1,392,171 The amounts above do not include the 1% excise tax on stock repurchases enacted by the Inflation Reduction Act of 2022. _______________ (1) On February 28, 2023, we announced the authorization of a share repurchase program for the repurchase of shares of our Class A common stock in an aggregate amount of up to $75 million through December 31, 2024.
Biggest changeIssuer Purchases of Equity Securities The following table provides information about our repurchases of our Class A common stock during the three months ended December 31, 2024: Period Total Number of Shares Purchased Average Price Paid Per Share (2) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (1) October 1, 2024 - October 31, 2024 705,402 $ 14.88 705,402 $ 40,400,785 November 1, 2024 - November 30, 2024 — $ — — $ 40,400,785 December 1, 2024 - December 31, 2024 — $ — — $ 40,400,785 Total 705,402 705,402 The amounts above do not include the 1% excise tax on stock repurchases enacted by the Inflation Reduction Act of 2022. _______________ (1) On February 28, 2023, we announced the authorization of a share repurchase program for the repurchase of shares of our Class A common stock in an aggregate amount of up to $75 million through December 31, 2024.
Securities Authorized for Issuance Under Equity Compensation Plans The information required by this item will be included in our proxy statement relating to our 2024 annual meeting of stockholders to be filed by us with the SEC no later than 120 days after the close of our fiscal year ended December 31, 2023 (the “Proxy Statement”) and is incorporated herein by reference.
Securities Authorized for Issuance Under Equity Compensation Plans The information required by this item will be included in our proxy statement relating to our 2024 annual meeting of stockholders to be filed by us with the SEC no later than 120 days after the close of our fiscal year ended December 31, 2024 (the “Proxy Statement”) and is incorporated herein by reference.
The following graph compares the cumulative total stockholder return on an initial investment of $100 in our Class A common stock between December 9, 2020 (the date our Class A common stock commenced trading on the Nasdaq Global Market) through December 31, 2023, with the comparative cumulative total returns of the Nasdaq Composite Index, the Nasdaq US Benchmark Software and Computer Services TR Index and the Nasdaq CTA Internet Total Return Index over the same period.
The following graph compares the cumulative total stockholder return on an initial investment of $100 in our Class A common stock between December 9, 2020 (the date our Class A common stock commenced trading on the Nasdaq Global Market) through December 31, 2024, with the comparative cumulative total returns of the Nasdaq Composite Index, the Nasdaq US Benchmark Software and Computer Services TR Index and the Nasdaq CTA Internet Total Return Index over the same period.
On February 26, 2024, we announced an increase to the aggregate amount available for repurchases to $175 million through December 31, 2025. As of December 31, 2023, we had purchased approximately $59.3 million of our Class A common stock. (2) Average price paid per share includes costs associated with the repurchases.
On February 26, 2024, we announced an increase to the aggregate amount available for repurchases to $175 million through December 31, 2025. As of December 31, 2024, we had purchased approximately $134.6 million of our Class A common stock. (2) Average price paid per share includes costs associated with the repurchases.
There is no public trading market for our Class B common stock. Holders of Record As of January 31, 2024, there were 99 holders of record of our Class A common stock and 78 holders of record of our Class B common stock.
There is no public trading market for our Class B common stock. Holders of Record As of January 31, 2025, there were 65 holders of record of our Class A common stock and 89 holders of record of our Class B common stock.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

50 edited+8 added−12 removed84 unchanged
Biggest changeYear Ended December 31, 2023 2022 2021 Consolidated Statements of Operations: Revenue $ 267,014 $ 256,380 $ 226,908 Cost of revenue (1) 99,229 81,512 58,313 Gross profit 167,785 174,868 168,595 Operating expenses (1) : Technology and development 26,727 20,846 15,885 Sales and marketing 82,803 68,562 58,160 General and administrative 56,219 44,940 35,761 Total operating expenses 165,749 134,348 109,806 Operating income 2,036 40,520 58,789 Total other income (expense), net 8,469 (3,053) 6,014 Income before income taxes 10,505 37,467 64,803 Provision for income taxes 1,624 8,762 8,199 Net income $ 8,881 $ 28,705 $ 56,604 _______________ (1) Amounts include stock-based compensation expense before tax benefit as follows: Year Ended December 31, 2023 2022 2021 (in thousands) Cost of revenue $ 1,472 $ 1,135 $ 825 Technology and development 4,346 3,225 2,232 Sales and marketing 10,462 7,645 5,176 General and administrative 12,582 8,641 5,874 Total stock-based compensation expense $ 28,862 $ 20,646 $ 14,107 Year Ended December 31, 2023 2022 2021 (as percentage of revenue) Revenue 100 % 100 % 100 % Cost of revenue 37 32 26 Gross profit 63 68 74 Operating expenses: Technology and development 10 8 7 Sales and marketing 31 27 26 General and administrative 21 17 16 Total operating expenses 62 52 49 Operating income 1 16 25 Total other income (expense), net 3 (2) 4 Income before income taxes 4 14 29 Provision for income taxes 1 3 4 Net income 3 % 11 % 25 % 49 Table of Contents Comparison of the Years Ended December 31, 2023 and 2022 Revenue, Cost of Revenue and Gross Profit Year Ended December 31, 2023 2022 $ Change % Change (dollars in thousands) Revenue $ 267,014 $ 256,380 $ 10,634 4 % Cost of revenue 99,229 81,512 17,717 22 % Gross profit $ 167,785 $ 174,868 $ (7,083) (4) % Gross profit margin 63 % 68 % Revenue increased $10.6 million, or 4%, in 2023 driven by growth in impressions processed on our platform from both existing and new publishers.
Biggest changeYear Ended December 31, 2024 2023 2022 Consolidated Statements of Operations: Revenue $ 291,256 $ 267,014 $ 256,380 Cost of revenue (1) 101,027 99,229 81,512 Gross profit 190,229 167,785 174,868 Operating expenses (1) : Technology and development 33,263 26,727 20,846 Sales and marketing 95,369 82,803 68,562 General and administrative 57,670 56,219 44,940 Total operating expenses 186,302 165,749 134,348 Operating income 3,927 2,036 40,520 Total other income (expense), net 13,847 8,469 (3,053) Income before income taxes 17,774 10,505 37,467 Provision for income taxes 5,270 1,624 8,762 Net income $ 12,504 $ 8,881 $ 28,705 _______________ (1) Amounts include stock-based compensation expense before tax benefit as follows: Year Ended December 31, 2024 2023 2022 (in thousands) Cost of revenue $ 1,855 $ 1,472 $ 1,135 Technology and development 6,313 4,346 3,225 Sales and marketing 13,407 10,462 7,645 General and administrative 16,101 12,582 8,641 Total stock-based compensation expense $ 37,676 $ 28,862 $ 20,646 Year Ended December 31, 2024 2023 2022 (as percentage of revenue) Revenue 100 % 100 % 100 % Cost of revenue 35 37 32 Gross profit 65 63 68 Operating expenses: Technology and development 11 10 8 Sales and marketing 33 31 27 General and administrative 20 21 17 Total operating expenses 64 62 52 Operating income 1 1 16 Total other income (expense), net 5 3 (2) Income before income taxes 6 4 14 Provision for income taxes 2 1 3 Net income 4 % 3 % 11 % 49 Table of Contents Comparison of the Years Ended December 31, 2024 and 2023 Revenue, Cost of Revenue and Gross Profit Year Ended December 31, 2024 2023 $ Change % Change (dollars in thousands) Revenue $ 291,256 $ 267,014 $ 24,242 9 % Cost of revenue 101,027 99,229 1,798 2 % Gross profit $ 190,229 $ 167,785 $ 22,444 13 % Gross profit margin 65 % 63 % 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.
Financing Activities For the year ended December 31, 2023, net cash used in financing activities of $56.0 million was primarily due to $59.3 million in stock repurchases, offset by $1.5 million proceeds from stock option exercises and $1.9 million proceeds from the employee stock purchase plan.
For the year ended December 31, 2023, net cash used in financing activities of $56.0 million was primarily due to $59.3 million in stock repurchases, offset by $1.5 million in proceeds from stock option exercises and $1.9 million in proceeds from the employee stock purchase plan.
Valuable ad impressions are transparent and data rich, viewable by humans, and verifiable. Each ad impression we auction consists of 573 independent data parameters, which can yield valuable insights if recorded and analyzed properly. This processing of voluminous data for each ad impression must occur in less than half a second as consumers expect a seamless digital ad experience.
Valuable ad impressions are transparent and data rich, viewable by humans, and verifiable. Each ad impression we auction consists of 644 independent data parameters, which can yield valuable insights if recorded and analyzed properly. This processing of voluminous data for each ad impression must occur in less than half a second as consumers expect a seamless digital ad experience.
Most notably, advertisers have historically spent relatively more in the fourth quarter of the calendar year to coincide with the holiday shopping season, and relatively less in the first quarter.
Most notably, advertisers have historically spent more in the fourth quarter of the calendar year to coincide with the holiday shopping season, and less in the first quarter.
Personnel costs include salaries, bonuses, stock-based compensation, and employee benefit costs, and are primarily attributable to our cloud 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. Operating Expenses Technology and Development.
Personnel costs include salaries, bonuses, stock-based compensation, and employee benefit costs, and are primarily attributable to our network 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. Operating Expenses Technology and Development.
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 2023 we completed a number of SPO initiatives which increased buyer spend on our platform.
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 the cost of revenue to be higher in 2024 compared to 2023 in absolute dollars primarily due to increases in depreciation and amortization expense from data center capacity expansion in 2023, as well as increases in in software, hardware and equipment maintenance to support the data centers.
We expect the cost of revenue to be higher in 2025 compared to 2024 in absolute dollars primarily due to increases in depreciation and amortization expense from data center capacity expansion in 2024, as well as increases in in software, hardware and equipment maintenance to support the data centers.
For discussion on comparison of the fiscal years ended December 31, 2022 and December 31, 2021, please refer to Part II, Item 7, “Management's Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022.
For discussion on comparison of the fiscal years ended December 31, 2023 and December 31, 2022, please refer to Part II, Item 7, “Management's Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.
Our revenue recognition policies are discussed in more detail under “Critical Accounting Policies and Estimates.” 47 Table of Contents Cost of Revenue Cost of revenue consists of data center co-location costs, depreciation expense related to hardware supporting our platform, amortization expense related to capitalized internal use software development costs, personnel costs, and allocated facilities costs.
Our revenue recognition policies are discussed in more detail under “Critical Accounting Policies and Estimates.” 47 Table of Contents Cost of Revenue Cost of revenue consists of data center co-location costs, depreciation expense related to hardware supporting our platform, amortization expense related to capitalized internal use software development costs and acquired developed technology, personnel costs, and allocated facilities costs.
Therefore, we consider these to be our critical accounting policies and estimates. 55 Table of Contents Revenue Recognition 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.
Therefore, we consider these to be our critical accounting policies and estimates. Revenue Recognition 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.
We have been investing in SPO technology and partnerships for five years and SPO represented approximately 45% of total activity for the year ended December 31, 2023. 46 Table of Contents Monetization Excellence We focus on monetizing digital impressions by coordinating over a hundred billion real-time auctions and nearly a trillion bids globally on a daily basis, using our specialized cloud software, machine learning algorithms, and scaled transaction infrastructure.
We have been investing in SPO technology and partnerships for six years and SPO represented approximately 50% of total activity for the year ended December 31, 2024. 46 Table of Contents Monetization Excellence We focus on monetizing digital impressions by coordinating over a hundred billion real-time auctions and nearly a trillion bids globally on a daily basis, using our specialized cloud software, machine learning algorithms, and scaled transaction infrastructure.
We expect sales and marketing expenses to increase in 2024 compared to 2023 in absolute dollars primarily due to additional headcount investment and marketing programs.
We expect sales and marketing expenses to increase in 2025 compared to 2024 in absolute dollars primarily due to additional headcount investment and marketing programs.
We expect general and administrative expenses to increase in 2024 compared to 2023 in absolute dollars primarily due to increases in expenses relating to our personnel.
We expect general and administrative expenses to increase in 2025 compared to 2024 in absolute dollars primarily due to increases in expenses relating to our personnel.
For discussion on operating, investing, and financing activities of the fiscal year ended December 31, 2021, see the Liquidity and Capital Resources section disclosed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K, which was filed with the SEC on March 1, 2022 and hereby incorporated by reference herein and considered part of this Annual Report on Form 10-K only to the extent referenced.
For discussion on operating, investing, and financing activities of the fiscal year ended December 31, 2022, see the Liquidity and Capital Resources section disclosed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K, which was filed with the SEC on February 28, 2023 and hereby incorporated by reference herein and considered part of this Annual Report on Form 10-K only to the extent referenced.
For the year ended December 31, 2023, we used $39.0 million of cash in investing activities, consisting of a net increase in investments of marketable securities of $29.6 million, $10.6 million in purchases of property and equipment (primarily data center infrastructure), $17.7 million of investments in capitalized internal use software, offset by an increase from sales of marketable securities prior to maturity of $18.9 million.
For the year ended December 31, 2023, net cash used in investing activities was $39.0 million, consisting of a net purchase of investments of marketable securities of $29.6 million, $10.6 million in purchases of property and equipment (primarily data center infrastructure), $17.7 million of investments in capitalized internal use software, offset by net inflows from sales of marketable securities prior to maturity of $18.9 million.
Additionally, recent interest rate increases, foreign currency fluctuation and persistent inflation in the U.S. and other markets globally continue to create economic volatility and dislocation in the capital and credit markets in the U.S. and globally.
Additionally, recent foreign currency fluctuation and persistent inflation in the U.S. and other markets globally continue to create economic volatility and dislocation in the capital and credit markets in the U.S. and globally.
As of December 31, 2023, the applicable interest rate under the Revolving Credit Facility was 9.50%. We had no amounts outstanding under the Revolving Credit Facility as of December 31, 2023. The Credit Agreement contains customary representations and warranties as well as customary affirmative and negative covenants.
As of December 31, 2024, the applicable interest rate under the Revolving Credit Facility was 8.50%. We had no amounts outstanding under the Revolving Credit Facility as of December 31, 2024. The Credit Agreement contains customary representations and warranties as well as customary affirmative and negative covenants.
The difference between the effective tax rate in 2022 of 23% and the federal statutory income tax rate of 21% was primarily due to state taxes, stock-based compensation, and Section 162(m) limitation partially offset by federal research and development credit, and a foreign derived intangible income deduction.
The difference between the effective tax rate in 2023 of 15% and the federal statutory income tax rate of 21% was primarily due to federal research and development credit and foreign derived intangible income (FDII) deduction partially offset by state taxes, stock-based compensation, and Section 162(m) limitation.
Cash flows from operating activities have been affected by changes in our working capital, particularly changes in accounts receivable and accounts payable. The timing of cash receipts from buyers and payments to publishers can significantly impact our cash flows from operating activities. In addition, we expect seasonality to impact quarterly cash flows from operating activities.
Cash flows from operating activities have been affected by changes in our working capital, particularly changes in accounts receivable and accounts payable. The timing of cash receipts from buyers and payments to publishers can significantly impact our cash flows from operating activities.
Because of these and other limitations, you should consider Adjusted EBITDA along with other GAAP-based financial performance measures, including net income and our GAAP financial results. Liquidity and Capital Resources We have financed our operations and capital expenditures primarily through utilization of cash generated from operations, as well as a public offering of our common stock.
Because of these and other limitations, you should consider Adjusted EBITDA along with other GAAP-based financial performance measures, including net income and our GAAP financial results. Liquidity and Capital Resources We have financed our operations and capital expenditures primarily through utilization of cash generated from operations.
For the year ended 2023, we served approximately 1,800 publishers worldwide on our platform, compared to approximately 1,650 publishers worldwide for the year ended 2022.
For the year ended 2024, we served approximately 1,900 publishers worldwide on our platform, compared to approximately 1,800 publishers worldwide for the year ended 2023.
The following table presents a reconciliation of Adjusted EBITDA to net income for each of the periods indicated: Year Ended December 31, 2023 2022 2021 (in thousands) Net income $ 8,881 $ 28,705 $ 56,604 Add back (deduct): Stock-based compensation 28,862 20,646 14,107 Depreciation and amortization 44,770 34,249 23,073 Unrealized (gain), loss and impairment of equity investment — 5,948 (5,433) Interest income (8,828) (2,214) (300) Acquisition-related and other expenses (1) — 918 — Provision for income taxes 1,624 8,762 8,199 Adjusted EBITDA $ 75,309 $ 97,014 $ 96,250 _______________ (1) We exclude acquisition-related and other expenses incurred in connection with our acquisition of Martin from Adjusted EBITDA because we do not believe such expenses are reflective of our ongoing core operations.
The following table presents a reconciliation of Adjusted EBITDA to net income for each of the periods indicated: Year Ended December 31, 2024 2023 2022 (in thousands) Net income $ 12,504 $ 8,881 $ 28,705 Add back (deduct): Stock-based compensation 37,676 28,862 20,646 Depreciation and amortization 45,352 44,770 34,249 Unrealized loss and impairment of equity investment — — 5,948 Interest income (8,477) (8,828) (2,214) Acquisition-related and other expenses (1) — — 918 Provision for income taxes 5,270 1,624 8,762 Adjusted EBITDA $ 92,325 $ 75,309 $ 97,014 _______________ (1) We exclude acquisition-related and other expenses incurred in connection with our acquisition of Martin from Adjusted EBITDA because we do not believe such expenses are reflective of our ongoing core operations.
See “Risk Factors” for further discussion of the risks related to inflation, rising interest rates, foreign currency fluctuations and public health crises on our business. 45 Table of Contents Financial Results Overview The table below summarizes the financial highlights of our business: Year Ended December 31, 2023 2022 2021 (in thousands) Revenue $ 267,014 $ 256,380 $ 226,908 Operating income 2,036 40,520 58,789 Net income 8,881 28,705 56,604 Adjusted EBITDA (1) 75,309 97,014 96,250 Net cash provided by operating activities 81,121 87,212 88,681 _______________ (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, see “Non-GAAP Financial Measures” below.
See “Risk Factors” for further discussion of the risks related to inflation, volatile interest rates, foreign currency fluctuations and public health crises on our business. 45 Table of Contents Financial Results Overview The table below summarizes the financial highlights of our business: Year Ended December 31, 2024 2023 2022 (in thousands) Revenue $ 291,256 $ 267,014 $ 256,380 Operating income $ 3,927 $ 2,036 $ 40,520 Net income $ 12,504 $ 8,881 $ 28,705 Adjusted EBITDA (1) $ 92,325 $ 75,309 $ 97,014 Net cash provided by operating activities $ 73,425 $ 81,121 $ 87,212 _______________ (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, see “Non-GAAP Financial Measures” below.
For additional information, see Note 7, “Business Combination” to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K. In addition to operating income and net income, we use Adjusted EBITDA as a measure of operational efficiency.
Acquisition-related expenses incurred in connection with our acquisition of Martin include third-party transaction costs. For additional information, see Note 7, “Business Combination” to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K. In addition to operating income and net income, we use Adjusted EBITDA as a measure of operational efficiency.
As a result, this amount is not included in the contractual obligations table above. Credit Facilities On October 17, 2022, we entered into a Senior Secured Credit Facilities Credit Agreement (the “Credit Agreement”) with the several lenders parties thereto, and Silicon Valley Bank, as administrative agent, lead arranger, issuing lender, and swingline lender.
Credit Facilities On October 17, 2022, we entered into a Senior Secured Credit Facilities Credit Agreement (the “Credit Agreement”) with the several lenders parties thereto, and Silicon Valley Bank, as administrative agent, lead arranger, issuing lender, and swingline lender.
We ended fiscal 2023 with approximately 150 net new publishers in 2023, which represented over 66,000 domains and 29,000 apps in total, compared to approximately 200 new publishers in 2022, which represented approximately 67,000 domains and 25,000 apps in total.
We ended fiscal 2024 with approximately 100 net new publishers, which represented over 60,000 domains and 27,000 apps in total, compared to approximately 150 new publishers in 2023, which represented approximately 66,000 domains and 29,000 apps in total.
Technology and Development Year Ended December 31, 2023 2022 $ Change % Change (dollars in thousands) Technology and development $ 26,727 $ 20,846 $ 5,881 28 % Percent of revenue 10 % 8 % The increase in technology and development costs was primarily due to an increase of $11.1 million in personnel costs associated with a headcount increase by 11% and higher stock-based compensation costs, an increase of $1.0 million in facilities costs associated with new offices, offset by a $6.7 million increase in the capitalization of internal use software.
Technology and Development Year Ended December 31, 2024 2023 $ Change % Change (dollars in thousands) Technology and development $ 33,263 $ 26,727 $ 6,536 24 % Percent of revenue 11 % 10 % The increase in technology and development costs was primarily due to an increase of $7.5 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 million increase in the capitalization of internal use software.
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.
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.
We expect technology and development expenses to increase in 2024 compared to 2023 in absolute dollars, primarily due to the additional headcount investment in our key growth opportunities. 50 Table of Contents Sales and Marketing Year Ended December 31, 2023 2022 $ Change % Change (dollars in thousands) Sales and marketing $ 82,803 $ 68,562 $ 14,241 21 % Percent of revenue 31 % 27 % Sales and marketing costs increased primarily due to a $10.7 million increase in personnel costs associated with a headcount increase by 5% and higher stock-based compensation costs, a $2.2 million increase in travel and entertainment expenses, and a $0.7 million increase in amortization for acquisition-related intangible assets.
We expect technology and development expenses to increase in 2025 compared to 2024 in absolute dollars, primarily due to the additional headcount investment in our key growth opportunities. 50 Table of Contents Sales and Marketing Year Ended December 31, 2024 2023 $ Change % Change (dollars in thousands) Sales and marketing $ 95,369 $ 82,803 $ 12,566 15 % Percent of revenue 33 % 31 % Sales and marketing costs increased primarily due to a $11.7 million increase in personnel costs associated with a headcount increase by 7% and higher stock-based compensation costs and a $1.1 million increase in facilities costs, increase in travel and entertainment expenses of $0.4 million, and increase in marketing expenses of $0.2 million, offset by a decrease in amortization for acquisition-related intangible assets of $0.9 million.
The number of ad impressions processed on our platform was approximately 46.5 trillion, 48.8 trillion, 56.0 trillion, and 59.4 trillion for each of the three months ended March 31, 2023, June 30, 2023, September 30, 2023, and December 31, 2023, respectively, as compared to 32.6 trillion, 36.2 trillion, 42.1 trillion, and 48.2 trillion for each of the three months ended March 31, 2022, June 30, 2022, September 30, 2022, and December 31, 2022, respectively.
The number of ad impressions processed on our platform was approximately 57.9 trillion, 60.7 trillion, 69.8 trillion, and 74.7 trillion for each of the three months ended March 31, 2024, June 30, 2024, September 30, 2024, and December 31, 2024, respectively, as compared to 46.5 trillion, 48.8 trillion, 56.0 trillion, and 59.4 trillion for each of the three months ended March 31, 2023, June 30, 2023, September 30, 2023, and December 31, 2023, respectively.
The determination as to whether revenue should be reported gross of amounts billed to buyers (gross basis) or net of payments to publishers (net basis) requires significant judgment, and is based on our assessment of whether we are acting as the principal or an agent in the transaction.
We estimate and record reductions to revenue for volume discounts based on expected volumes during the incentive term. 55 Table of Contents The determination as to whether revenue should be reported gross of amounts billed to buyers (gross basis) or net of payments to publishers (net basis) requires significant judgment, and is based on our assessment of whether we are acting as the principal or an agent in the transaction.
Events or changes in circumstances which could trigger an impairment review include a significant adverse change in legal factors or in the business climate, an adverse action or assessment by a regulator, unanticipated competition, a loss of key personnel, significant changes in the manner of the Company’s use of the acquired assets, or the strategy for the Company’s overall business, significant negative industry or economic trends, or significant underperformance relative to expected historical or projected future results of operations.
Acquisition-related intangible assets and goodwill are tested for impairment at least annually or more frequently if events or changes in circumstances indicate that the acquisition-related intangible assets or goodwill may be impaired. 56 Table of Contents Events or changes in circumstances which could trigger an impairment review include a significant adverse change in legal factors or in the business climate, an adverse action or assessment by a regulator, unanticipated competition, a loss of key personnel, significant changes in the manner of the Company’s use of the acquired assets, or the strategy for the Company’s overall business, significant negative industry or economic trends, or significant underperformance relative to expected historical or projected future results of operations.
General and Administrative Year Ended December 31, 2023 2022 $ Change % Change (dollars in thousands) General and administrative $ 56,219 $ 44,940 $ 11,279 25 % Percent of revenue 21 % 17 % General and administrative expense increased primarily due to a $6.4 million increase in personnel costs associated with higher stock-based compensation costs, and a $5.7 million increase in provision for bad debt relating to a DSP buyer of our platform that filed for Chapter 11 bankruptcy.
General and Administrative Year Ended December 31, 2024 2023 $ Change % Change (dollars in thousands) General and administrative $ 57,670 $ 56,219 $ 1,451 3 % Percent of revenue 20 % 21 % General and administrative expense increased primarily due to a $6.3 million increase in personnel costs associated with higher stock-based compensation costs, and a $1.1 million increase in professional services, offset by a $5.7 million decrease in provision for bad debt relating to a DSP buyer of our platform that filed for Chapter 11 bankruptcy on June 30, 2023.
Further, 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.
Our net dollar-based retention rate was 107% for the year ended December 31, 2024, and 101% for the year ended December 31, 2023. Further, 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.
Cost of revenue increased $17.7 million, primarily due to a $4.0 million increase in depreciation of data center equipment, a $3.8 million increase in amortization of internal use software, a $6.2 million increase in data centers expansion and upgrades, a $2.0 million increase in personnel costs as headcount increased by 12% in order to support our growing business, and a $1.1 million increase in amortization for acquisition-related intangible assets.
Cost of revenue increased $1.8 million, primarily due to a $5.1 million increase in amortization of internal use software and a $1.3 million increase in personnel costs as headcount increased by 4% in order to support our growing business, offset by a $3.8 million decrease in depreciation of data center equipment.
For the year ended December 31, 2022, net cash provided by financing activities of $4.0 million was primarily due to $1.2 million in proceeds from stock option exercises and $3.0 million in proceeds from the employee stock purchase plan.
Financing Activities For the year ended December 31, 2024, net cash used in financing activities of $73.5 million was primarily due to $75.3 million in stock repurchases and $2.1 million in payment of a business combination indemnification holdback, offset by $1.8 million proceeds from stock option exercises and $2.4 million proceeds from the employee stock purchase plan.
Cash Flows The following table summarizes our cash flows for the periods presented: Year Ended December 31, 2023 2022 2021 (in thousands) Net cash provided by operating activities $ 81,121 $ 87,212 $ 88,681 Net cash used in investing activities (39,018) (81,371) (96,723) Net cash provided by (used in) financing activities (55,976) 4,036 9,359 Net increase (decrease) in cash and cash equivalents $ (13,873) $ 9,877 $ 1,317 53 Table of Contents Operating Activities Our cash flows from operating activities are primarily influenced by growth in our operations, increases or decreases in collections from our buyers and related payments to our publishers, as well as our investment in personnel to support the anticipated growth of our business.
Our future capital requirements and the adequacy of available funds will depend on many factors, including those set forth under “Risk Factors.” Cash Flows The following table summarizes our cash flows for the periods presented: Year Ended December 31, 2024 2023 2022 (in thousands) Net cash provided by operating activities $ 73,425 $ 81,121 $ 87,212 Net cash provided by (used in) investing activities 22,314 (39,018) (81,371) Net cash provided by (used in) financing activities (73,478) (55,976) 4,036 Effect of foreign currency on cash (318) — — Net increase (decrease) in cash and cash equivalents $ 21,943 $ (13,873) $ 9,877 Operating Activities Our cash flows from operating activities are primarily influenced by growth in our operations, increases or decreases in collections from our buyers and related payments to our publishers, as well as our investment in personnel to support the anticipated growth of our business.
As a result, we continue to expect general and administrative expenses to increase in absolute dollars in future periods. Total Other Income (expense), Net Total other income (expense), net consists of interest income, unrealized gain (loss) on equity investment and other income (expense), net. Interest income is generated by investing excess cash into money market accounts and marketable securities.
Total Other Income (expense), Net Total other income (expense), net consists of interest income, unrealized gain (loss) on equity investment and other income (expense), net. Interest income is generated by investing excess cash into money market accounts and marketable securities.
Total Other Income (Expense), net Year Ended December 31, 2023 2022 $ Change % Change (dollars in thousands) Total other income (expense), net $ (359) $ (5,267) $ 4,908 (93) % Total other income (expense), net increased for the year ended December 31, 2023, compared to the prior year period, primarily driven by impairment of our equity investment in 2022. 51 Table of Contents Provision for Income Taxes Year Ended December 31, 2023 2022 $ Change % Change (dollars in thousands) Provision for income taxes $ 1,624 $ 8,762 $ (7,138) (81) % The difference between the effective tax rate in 2023 of 15% and the federal statutory income tax rate of 21% was primarily due to federal research and development credit and foreign derived intangible income (FDII) deduction partially offset by state taxes, stock-based compensation, and Section 162(m) limitation.
Other income (expense) also benefited from foreign currency fluctuations for the year ended December 31, 2024 compared to the prior year period. 51 Table of Contents Provision for Income Taxes Year Ended December 31, 2024 2023 $ Change % Change (dollars in thousands) Provision for income taxes $ 5,270 $ 1,624 $ 3,646 225 % The difference between the effective tax rate in 2024 of 30% and the federal statutory income tax rate of 21% was primarily due to state taxes, Section 162(m) limitation, and acquisition-related costs partially offset by foreign derived intangible income (FDII) deduction and federal research and development credit.
As of December 31, 2023, we had cash, cash equivalents, and marketable securities of $175.3 million and net working capital, consisting of current assets less current liabilities, of $182.4 million. As of December 31, 2023, we had retained earnings of $136.9 million.
As of December 31, 2024, we had cash, cash equivalents, and marketable securities of $140.6 million and net working capital, consisting of current assets less current liabilities, of $156.7 million.
For additional information regarding stock-based compensation and the assumptions used for determining the fair value of stock options and ESPP awards, refer to Note 2—Basis of Presentation and Summary of Significant Accounting Policies and Note 10—Stockholders’ Equity and Equity Incentive Plans. 56 Table of Contents Acquisition-related Intangible Assets and Goodwill Acquisition-related intangible assets with finite lives are amortized over their estimated useful lives on a straight-line basis, while goodwill amounts are not amortized.
For additional information regarding stock-based compensation and the assumptions used for determining the fair value of stock options and ESPP awards, refer to Note 2—Basis of Presentation and Summary of Significant Accounting Policies and Note 10—Stockholders’ Equity and Equity Incentive Plans.
For the year ended December 31, 2022, net cash provided by operating activities of $87.2 million resulted primarily from net income of $28.7 million, adjustments for non-cash expenses of $59.0 million, including $34.2 million for depreciation and amortization, $20.6 million for stock-based compensation, and $7.2 million for deferred income taxes, and an increase in accounts receivable of $24.4 million, partially offset by an increase in accounts payable of $29.8 million.
In addition, we expect seasonality to impact quarterly cash flows from operating activities. 53 Table of Contents For the year ended December 31, 2024, net cash provided by operating activities of $73.4 million resulted primarily from net income of $12.5 million, adjustments for non-cash expenses of $74.7 million, including $45.4 million for depreciation and amortization, $37.7 million for stock-based compensation, and $11.0 million for deferred income taxes, and an increase in accounts receivable of $49.3 million, partially offset by an increase in accounts payable of $38.1 million.
For the year ended December 31, 2022, we used $81.4 million of cash in investing activities, consisting of a net increase in investments of marketable securities of $4.4 million, $35.9 million in purchases of property and equipment (primarily data center infrastructure), $13.0 million of investments in capitalized internal use software, and $28.1 million for the Martin acquisition.
For the year ended December 31, 2024, net cash provided by investing activities was $22.3 million of cash, consisting of a net inflows from investments of marketable securities of $60.8 million, offset by $17.6 million in purchases of property and equipment (primarily data center infrastructure), and $20.9 million of investments in capitalized internal use software.
Contractual Obligations and Future Cash Requirements Our principal contractual obligations consist of non-cancelable leases for our various facilities.
Contractual Obligations and Future Cash Requirements Our principal contractual obligations consist of non-cancelable leases for our various facilities. In certain cases, the terms of the lease agreements provide for rental payments that increase over time.
We recognize revenue when a bid is won and a buyer purchases inventory on our platform. We estimate and record reductions to revenue for volume discounts based on expected volumes during the incentive term.
We recognize revenue when a bid is won and a buyer purchases inventory on our platform.
Interest income Year Ended December 31, 2023 2022 $ Change % Change (dollars in thousands) Interest income $ 8,828 $ 2,214 $ 6,614 299 % Interest income increased due to the increase in interest rates.
Interest income Year Ended December 31, 2024 2023 $ Change % Change (dollars in thousands) Interest income $ 8,477 $ 8,828 $ (351) (4) % Interest income decreased due to the decrease in interest rates and a decrease in holdings in marketable securities.
As of December 31, 2023, we had $4.5 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.
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. As a result, this amount is not included in the contractual obligations table above.
We expect revenue to continue to increase in 2024, with mobile and omnichannel video, which is the combination of short form video and OTT/CTV, as our primary growth drivers.
We expect revenue to continue to increase in 2025, primarily driven by growth in mobile and omnichannel video, which is the combination of short form video and OTT/CTV. 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.
Overall, our cost of revenue per impression processed in 2023 declined by 8% compared to 2022.
Overall, our cost of revenue per impression processed in 2024 decreased by 18% compared to 2023. Our gross margin of 65% in 2024 increased compared to 2023 of 63% due to revenue growth accelerating faster than cost of revenues.
In certain cases, the terms of the lease agreements provide for rental payments that increase over time. 54 Table of Contents The following table summarizes our contractual obligations, at December 31, 2023 (in thousands): Payments due by period Total Less than 1 year 1 - 3 years 3 - 5 years More than 5 years Other contractual obligations (1) $ 24,771 $ 18,314 $ 6,457 $ — $ — Operating lease liabilities 23,169 6,842 11,055 5,272 — Finance lease liabilities 646 145 302 199 — Total $ 48,586 $ 25,301 $ 17,814 $ 5,471 $ — ______________ (1) Other contractual obligations consist primarily of contractual obligations to third-party data center providers.
The following table summarizes our contractual obligations, at December 31, 2024 (in thousands): Payments due by period Total Less than 1 year 1 - 3 years 3 - 5 years More than 5 years Other contractual obligations (1) $ 25,487 $ 21,872 $ 3,615 $ — $ — Operating lease liabilities 57,902 6,513 18,178 9,125 24,086 Finance lease liabilities 501 149 311 41 — Total $ 83,890 $ 28,534 $ 22,104 $ 9,166 $ 24,086 ______________ (1) Other contractual obligations consist primarily of contractual obligations to third-party data center providers. 54 Table of Contents As of December 31, 2024, we had $5.0 million of long-term income tax liabilities, including interest, related to uncertain tax positions.
Removed
Our net dollar-based retention rate was 101% for the year ended December 31, 2023, and 108% for the year ended December 31, 2022.
Added
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.
Removed
Our revenue growth in the period ended December 31, 2023 and 2022 was primarily attributable to an increase in the number of ad impressions processed from our publishers, upselling additional products, penetration of header bidding for mobile app and digital video, and increased demand from the growth of our buyer relationships primarily through SPO agreements.
Added
Our revenues in 2024 benefited by approximately $14.2 million from incremental political spend in the United States due to the 2024 presidential election. Conversely, our business was negatively impacted by bidding methodology changes implemented by one of our buyers in the second half of the second fiscal quarter of 2024.
Removed
Our net dollar-based retention rate and revenues for the period ended December 31, 2023 were negatively impacted due to a decline in run rate from one of our publishers as they closed a portion of their business in 2023.
Added
The magnitude of these impacts on our future revenues is difficult to predict.
Removed
We continue to invest in corporate infrastructure and incur additional expenses associated with our operation as a public company, including increased legal and accounting costs, increased investor relations costs, higher insurance premiums, and compliance costs associated with developing the requisite infrastructure required for internal controls.
Added
Total Other Income (Expense), net Year Ended December 31, 2024 2023 $ Change % Change (dollars in thousands) Total other income (expense), net $ 5,370 $ (359) $ 5,729 (1,596) % Total other income (expense), net increased for the year ended December 31, 2024, compared to the prior year period, primarily driven by other income of $4.0 million from the Google Privacy Sandbox initiative in connection with their previous initiative to phase out the use of third-party cookies.
Removed
We believe that investment gains and losses, whether realized from dispositions or unrealized from changes in market prices of equity securities, are generally meaningless in understanding our reported results or evaluating the economic performance of our businesses. These gains and losses have caused and will continue to cause significant volatility in our periodic earnings.
Added
The income from the Google Privacy Sandbox initiative was related to our efforts to build and test integrations with the privacy sandbox.
Removed
Our gross margin of 63% in 2023 decreased compared to 2022 of 68% due to increases in depreciation and amortization expense from significant data center capacity expansion, as well as an increase in hosting expenses as a result of an increase in volume of impressions.
Added
On an ongoing basis, we assess if the estimated remaining useful lives of capitalized projects continue to be reasonable based on the remaining expected benefit and usage.
Removed
Acquisition-related expenses incurred in connection with our acquisition of Martin include third-party transaction costs. Beginning in fiscal year 2023, we no longer exclude the impact of post-acquisition cash compensation arrangements for certain key acquired employees from our Adjusted EBITDA calculation. We have updated prior period results for comparability.
Added
If the remaining useful life of a capitalized project is revised, it is accounted for as a change in estimate and the remaining unamortized cost of the underlying asset is amortized prospectively over the updated remaining useful life.
Removed
Our future capital requirements and the adequacy of available funds will depend on many factors, including those set forth under “Risk Factors.” In the future, we may attempt to raise additional capital through the sale of equity securities or through equity-linked or debt financing arrangements.
Added
Acquisition-related Intangible Assets and Goodwill Acquisition-related intangible assets with finite lives are amortized over their estimated useful lives on a straight-line basis, while goodwill amounts are not amortized.
Removed
If we raise additional funds by issuing equity or equity-linked securities, the ownership of our existing stockholders will be diluted.
Removed
If we raise additional financing by incurring additional indebtedness, we may be subject to increased fixed payment obligations and could also be subject to additional restrictive covenants, such as limitations on our ability to incur additional debt, and other operating restrictions that could adversely impact our ability to conduct our business.
Removed
Any future indebtedness we incur may result in terms that could be unfavorable to equity investors. We cannot guarantee that we will be able to raise additional capital in the future on favorable terms, or at all. Any inability to raise capital could adversely affect our ability to achieve our business objectives.
Removed
Acquisition-related intangible assets and goodwill are tested for impairment at least annually or more frequently if events or changes in circumstances indicate that the acquisition-related intangible assets or goodwill may be impaired.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

4 edited+0 added−0 removed5 unchanged
Biggest changeDollar to British Pound exchange rate could result in a change of $1.7 million and $1.4 million in our operating income for the year ended December 31, 2023 and December 31, 2022, respectively. Inflation Risk We do not believe that inflation has had a material effect on our business, results of operations, or financial condition.
Biggest changeDollar to British Pound exchange rate could result in a change of $2.1 million and $1.7 million in our operating income for the year ended December 31, 2024 and December 31, 2023, respectively. Inflation Risk We do not believe that inflation has had a material effect on our business, results of operations, or financial condition.
We had no amounts outstanding under our credit facility as of December 31, 2023. We do not believe that an increase or decrease in interest rates of 100 basis points would have a material effect on our operating results or financial condition. In future periods, we will continue to evaluate our investment policy relative to our overall objectives.
We had no amounts outstanding under our credit facility as of December 31, 2024. We do not believe that an increase or decrease in interest rates of 100 basis points would have a material effect on our operating results or financial condition. In future periods, we will continue to evaluate our investment policy relative to our overall objectives.
Dollar to India Rupee exchange rate could result in a change of $2.0 million and $1.6 million in our operating income for the year ended December 31, 2023 and December 31, 2022, respectively. A hypothetical 10% change in the U.S.
Dollar to India Rupee exchange rate could result in a change of $2.2 million and $2.0 million in our operating income for the year ended December 31, 2024 and December 31, 2023, respectively. A hypothetical 10% change in the U.S.
These risks primarily include: Interest Rate Risk We had cash and cash equivalents of $78.5 million and marketable securities of $96.8 million as of December 31, 2023, which consisted of bank deposits, money market accounts, commercial paper, agency debt securities, and U.S. Treasury and government debt securities.
These risks primarily include: Interest Rate Risk We had cash and cash equivalents of $100.5 million and marketable securities of $40.1 million as of December 31, 2024, which consisted of bank deposits, money market accounts, commercial paper, agency debt securities, and U.S. Treasury and government debt securities.

Other PUBM 10-K year-over-year comparisons