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PubMatic, a leading supply-side platform (SSP), has declared that both its company and the broader advertising industry are at a critical inflection point, with the company placing a significant bet on agentic artificial intelligence (AI) for its future growth. This strategic pivot was highlighted during PubMatic’s fourth-quarter 2025 earnings call, where the company reported $80 million in revenue for the quarter, a 6% decrease year-over-year. For the full fiscal year 2025, revenue stood at $282.9 million, marking a 3% decline from the previous year.
Despite the negative growth trajectory, PubMatic framed these results positively, emphasizing that they surpassed internal revenue projections. This optimism was seemingly shared by investors, as PubMatic’s stock price saw an approximate 6% increase in after-hours trading following the earnings announcement.
The company’s Chief Financial Officer, Steve Pantelick, attributed the full-year revenue figures to a period of downturn followed by a stabilization of ad spend from a significant, though unnamed, incumbent demand-side platform (DSP). Pantelick alluded to this partner as a substantial player in the market, with industry observers widely speculating this refers to The Trade Desk, a prominent DSP known for its direct-to-publisher initiatives. To mitigate the impact of this single partner’s fluctuating spend, PubMatic has been actively diversifying its DSP relationships, onboarding new midtier partners that demonstrate greater potential for increased investment.
PubMatic CEO Rajeev Goel expressed confidence in the company’s future, forecasting significant growth in the latter half of 2026. He cited the increasing adoption of PubMatic’s proprietary AgenticOS platform, coupled with robust demand in Connected TV (CTV) and mobile advertising, and a resurgence in display advertising as key drivers. Goel anticipates this combination will propel PubMatic’s business into double-digit growth for the remainder of the year.
The Rise of Agentic AI in Advertising
PubMatic’s long-term strategy is intrinsically linked to the emerging paradigm of agentic AI. Goel projected that by 2028, agentic AI will be responsible for executing 25% of all digital advertising, a figure expected to climb to 50% by 2030. The company’s proactive efforts to establish itself as an early leader in this space, through the introduction of AgenticOS and its involvement in the development of the Ad Context Protocol, are seen as crucial for capitalizing on this transformative shift.
The Ad Context Protocol, a collaborative initiative aimed at enhancing the understanding and utilization of context in ad targeting, is designed to foster greater efficiency and effectiveness in an increasingly automated advertising ecosystem. By participating in such foundational industry efforts, PubMatic is positioning itself to shape the future of programmatic advertising.
Since launching its first agent-executed CTV campaign in collaboration with the ad agency Butler/Till in January 2026, PubMatic has reportedly facilitated over 250 such campaigns. Goel highlighted that a significant portion of these campaigns have involved new advertisers, underscoring agentic solutions’ ability to attract incremental revenue to the platform. Furthermore, PubMatic generates additional fees for AgenticOS campaigns, distinct from its standard SSP take rate. This creates a new, high-margin revenue stream, akin to the fees collected through its Activate direct-to-buyer offering.
To accelerate partner adoption of its agentic AI technology, PubMatic launched an AI accelerator program. This initiative has already garnered participation from nearly 100 brands, agencies, and streaming platforms, a rapid uptake that Goel described as the "fastest early-stage adoption of any product we’ve launched." This strong initial interest suggests a clear market demand for AI-driven advertising solutions.
Navigating a Shifting DSP Landscape
Beyond the strategic focus on agentic AI, PubMatic’s earnings call also provided insights into its evolving relationships with DSP partners. The full-year 2025 revenue figures were notably impacted by The Trade Desk’s decision in August 2025 to reclassify all SSPs as resellers. This move prompted The Trade Desk to increase its utilization of OpenPath, its direct-to-publisher connection technology, which bypasses SSPs and directly connects buyers to publishers. This strategic maneuver by a major DSP has created ripples across the ad tech ecosystem, forcing SSPs to adapt to a more complex and potentially disintermediated supply chain.
Both Goel and Pantelick made several references to a specific unnamed DSP partner whose reduced spending in Q3 2025 had a noticeable impact on PubMatic’s revenue. They noted that spend from this platform stabilized around August and September, leading to a recovery. Pantelick further elaborated that, when excluding the impact of this specific DSP and the influence of 2024 political ad spending, PubMatic’s revenue would have shown a healthy 18% year-over-year increase in Q4 and a 9% increase for the full year 2025. This analysis highlights the significant influence of individual large partners on the financial performance of SSPs.
PubMatic’s growth strategy prioritizes diversifying its DSP partner mix by cultivating relationships with more midtier and specialized platforms. This initiative is the foremost point in PubMatic’s five-point growth plan. The company has reportedly onboarded 50 new DSP partners and has strategically reshaped its largest DSP relationships to favor rapidly growing commerce and high-value advertising verticals, such as pharmaceuticals.
Indicating the intensifying competition between Amazon and The Trade Desk, Goel revealed that Amazon DSP has now become one of PubMatic’s top five buyers. This development suggests a potential shift in market dynamics, with major players like Amazon actively seeking to strengthen their positions within the programmatic supply chain.
Meanwhile, ad spend from mid-market DSPs experienced a substantial 30% year-over-year increase in Q4. Pantelick identified mid-market advertisers, represented by these DSPs, as the "fastest-growing segment of the market" in 2025, underscoring the increasing importance of this segment for SSPs.
PubMatic’s Multifaceted Growth Strategy
PubMatic’s strategic blueprint for growth encompasses several key initiatives beyond its agentic AI focus. The second pillar of this plan is the expansion of its Activate direct-to-buyer business, which experienced a remarkable tripling in Q4 2025. Supply-path optimization (SPO), with Activate playing a significant role, accounted for a substantial 55% of all activity on PubMatic’s platform in 2025, demonstrating the growing advertiser and publisher demand for greater transparency and efficiency in ad sourcing.
The third strategic point centers on sustained growth in CTV, mobile, and other emerging revenue streams. Excluding the impact of 2024 political ad spend, PubMatic’s CTV revenue surged by 50% year-over-year in Q4. Mobile app revenue saw a 25% increase during the same quarter. Emerging revenues, which Goel defined as encompassing Activate, commerce media, and new AI solutions, grew by an impressive 75% in Q4 and now constitute nearly 10% of PubMatic’s total revenue. This diversification into new and high-growth areas is crucial for offsetting potential headwinds in more traditional segments.
Interestingly, PubMatic’s legacy display advertising business also showed resilience, with revenue increasing by 20% in Q4. This indicates that despite the focus on newer channels, traditional display advertising remains a significant contributor to the company’s performance.
The fourth and fifth points of PubMatic’s growth plan are dedicated to emerging AI solutions and internal AI optimizations, respectively. The company has made significant strides in integrating AI into its operations, with 40% of its new code written in the latter half of 2025 being AI-generated. Currently, 10% of PubMatic’s publishers are generating revenue from AI-powered solutions, including AgenticOS and other publisher-facing products. Goel expressed his ambition to see this figure reach 100% eventually, stating, "We’re still early, and there’s a lot of runway ahead of us." This internal adoption of AI is not only aimed at improving efficiency but also at developing innovative solutions for its publisher partners.
Industry Implications and Future Outlook
PubMatic’s strategic embrace of agentic AI signals a broader industry trend towards automation and intelligent decision-making in advertising. The decline in revenue, while concerning on the surface, appears to be a symptom of larger industry shifts, including increased competition, evolving DSP strategies, and the ongoing consolidation of ad tech. The company’s ability to rebound and achieve double-digit growth in the second half of 2026 will hinge on the successful adoption of its agentic AI solutions and its continued diversification of revenue streams.
The company’s proactive approach to developing new revenue streams, such as AgenticOS and Activate, is a crucial hedge against the increasing complexity of the supply chain and the potential for further disintermediation by large DSPs. By creating value-added services beyond traditional SSP functions, PubMatic aims to secure its position as an indispensable partner for both publishers and advertisers.
The continued growth in CTV and mobile advertising, alongside the resurgence of display, suggests a healthy and dynamic digital advertising market. PubMatic’s ability to capture a significant share of these growth areas, particularly through its innovative AI-driven offerings, will be a key determinant of its future success. The industry is watching closely to see if PubMatic’s bold bet on agentic AI will indeed propel it and the broader ad industry into a new era of efficiency and effectiveness.
