• by Laurie Sullivan , Staff Writer, August 12, 2025

PubMatic on Monday reported 5.7% revenue growth to $71.1 million in Q2 2025, but marked a record net loss of $0.11 per share.

The company’s stock fell and then began to climb its way back from sharp declines, despite the company’s CEO and co-founder Rajeev Goel highlighted more than a 50% increase driven by connected TV (CTV) revenue and advantages from AI-driven ad targeting.

PubMatic faces serious challenges as the lines continue to blur between SSPs and demand-side platforms (DSP) and the industry questions whether these stand-alone businesses can survive.

Goel agreed that the industry is continuing to evolve -- specifically around the blurring of these two industries, with a shift toward connected TV (CTV) and performance media, and the shift away from cookies toward more identity-based targeting or AI to target users.

“Even with the early onset of AI and workflows, what we see is that all of these things are driving more toward an end-to-end platform,” he said. “AI, for instance, works better if it's not constrained, but instead can optimize, you know, across all aspects of a transaction.”

Spend on PubMatic Activate, a platform to improve efficiency and transparency of digital advertising, more than doubled sequentially from the first quarter in 2025 to the second quarter. It demonstrates how the lines have blurred between what SSPs and DSPs separately do for advertising, specifically in terms of revenue for publishers.

Management pointed to a headwind stemming from recent platform changes made by one of its top DSP buyers, signaling potential pressure ahead despite the solid earnings performance. Although gains stabilized in August, the company expects it to take several months to optimize. The top two DSPs that work with PubMatic account for roughly half of its spend.

Goel highlighted how DSPs have changed the way they value inventory, saying “we need to do a better job -- a different job to prioritize across all the hundreds of billions of daily ad impressions that we have, which subset of those impressions that we send to this DSP.”

It’s a normal part of how PubMatic’s platform shapes traffic to DSPs. When the company revise the way it sends and optimizes traffic, he expects spend with this unnamed DSP will normalize.

Every impression is not made available to all DSPs.