PubMatic, a leading sell-side platform (SSP), is aggressively pushing the boundaries of artificial intelligence in advertising, signaling a pivotal shift away from traditional direct ad buys. The company announced significant advancements and substantial growth driven by its agentic AI platform, AgenticOS, during its first-quarter earnings call on Thursday, May 8th, 2026. CEO Rajeev Goel revealed that PubMatic has successfully executed over 30 fully autonomous, end-to-end agentic campaigns, marking a significant leap in the automation of advertising processes. This milestone, coupled with more than 1,000 direct publisher deals already processed through AgenticOS, underscores the growing integration of AI into the core of programmatic advertising.
The impact of this AI-driven strategy is clearly reflected in PubMatic’s financial performance. The company reported an 80% year-over-year growth rate in its emerging revenue category, which is now largely fueled by AI deals. This burgeoning segment now constitutes a substantial 14% of PubMatic’s total revenue. This impressive growth in its AI-centric offerings contributed to an overall 13% year-over-year increase in Q1 revenue, reaching $62.6 million. PubMatic also witnessed double-digit year-over-year growth in monetized impressions, with Connected TV (CTV) as a standalone category experiencing an 18% surge and mobile app revenue climbing by a robust 25%.
The Agentic Advantage: Efficiency and Cost Savings
PubMatic’s agentic AI is not merely a technological innovation; it is demonstrably enhancing campaign efficiency and delivering tangible benefits to buyers. According to CEO Rajeev Goel, clients utilizing the AgenticOS platform are experiencing a remarkable 30% to 40% improvement in Cost Per Mille (CPM) rates. Furthermore, buyers are able to acquire 40% more publisher inventory, a significant advantage attributed to the elimination of intermediary fees often associated with traditional ad tech workflows.
Goel elaborated on this competitive edge, stating, "It’s a single layer of technology, and it looks a lot like what the walled gardens leverage to drive ad performance." This streamlined approach, mirroring the efficiency of closed advertising ecosystems, allows PubMatic to offer a more direct and cost-effective path for advertisers.
PubMatic’s strategic initiatives to consolidate the ad tech supply chain are also yielding positive results. The company’s Activate direct-to-buyer connection has seen its business triple since the first quarter of the previous year. Simultaneously, its Connect data platform has expanded its network to include over 300 data and commerce media partners, featuring prominent names like Walmart Connect and PayPal Ads, thereby enriching its data capabilities and partnership ecosystem.
The strong performance of PubMatic’s mobile app business, which grew by 25% year-over-year and contributed to a 5% increase in display advertising revenue, was another key revenue driver. Combined revenue from mobile and omnichannel video now accounts for a significant 79% of PubMatic’s Q1 revenue. PubMatic’s deep integration within the mobile advertising ecosystem is further solidified by its presence across the three leading mobile mediation platforms: AppLovin Max, Google AdMob, and Unity LevelPlay. This integration grants PubMatic access to over 90% of global mobile SDK inventory, positioning it as a central player in mobile ad monetization.
Adding to its AI-driven solutions, Goel highlighted AgenticOS’s Creative Innovation Suite. This AI-powered tool is designed to generate consistent creative assets across various touchpoints, including CTV, mobile, and online display advertising, ensuring a unified brand experience for targeted audiences. Agencies such as Horizon Media, Crossmedia, and Kelly Scott Madison have already adopted this innovative creative suite. These advancements provide PubMatic with a robust foundation for continued AI-driven growth. The company reaffirmed its Q4 projection of achieving a double-digit growth rate in the latter half of the current year.
Despite these promising developments, some investors have expressed skepticism regarding the sustainability of PubMatic’s agentic AI business in terms of true revenue growth. A notable concern raised was that the volume of direct deals and autonomous campaigns processed through AgenticOS, while substantial, still represents "an immaterial percentage" of PubMatic’s overall business. In response, PubMatic CFO Steve Pantelick emphasized that AI’s impact extends beyond campaign execution. He explained that AI is also enhancing operational efficiencies across PubMatic’s business, such as accelerating campaign setup and troubleshooting for publishers. These improvements, he asserted, are expected to continue driving double-digit growth, in parallel with the ongoing expansion of mobile and CTV segments.
Navigating DSP Competition and Global Market Dynamics
While PubMatic is championing the transformative potential of AI, the company is also grappling with persistent industry challenges, notably the ongoing competition between Demand-Side Platforms (DSPs) and Supply-Side Platforms (SSPs) for direct advertiser business.
PubMatic continues to face headwinds from a major, unnamed DSP – widely understood to be The Trade Desk – which has reportedly reduced its spending on PubMatic’s SSP. This reduction is likely a consequence of increased adoption of The Trade Desk’s OpenPath solution, a direct-to-publisher offering that bypasses SSPs. This strategic shift by the unnamed DSP contributed to a 12% year-over-year decline in PubMatic’s US revenue during Q1. However, this domestic downturn was effectively offset by significant growth in other key markets, with the Asia-Pacific region experiencing a 25% expansion and the Europe, Middle East, and Africa (EMEA) region showing a 10% increase.
The pullback from this major DSP is projected to continue impacting PubMatic’s earnings in the second quarter, with the company forecasting a revenue decrease of between 2% and 4% for the upcoming quarter. Multiple investors sought clarity on the extent of this DSP’s impact. Pantelick reassured them, stating that revenue from the DSP in question performed better than anticipated in Q1, largely due to PubMatic’s proactive efforts to "optimize our platform to meet the needs of this buyer." He further indicated that PubMatic expects to fully cycle past the impact of this DSP’s reduced spending by the third quarter.
To mitigate the revenue impact stemming from this particular DSP’s reduced activity, PubMatic has been actively diversifying its partnerships. The company added over 50 new DSPs to its partner roster in the past year and achieved a 20% growth in integrations with mid-market DSPs during Q1.
Further strengthening its ecosystem, PubMatic also secured a significant integration with Amazon DSP this quarter. This collaboration involves incorporating Amazon’s Dynamic Traffic Engine, which has reportedly boosted publisher CPMs by up to 10% since its implementation. This partnership underscores PubMatic’s commitment to forging strategic alliances that enhance value for its publisher partners.
Future Outlook and Strategic Priorities
Looking ahead, PubMatic has identified several key priorities to sustain its growth trajectory. The company is actively seeking to fill the vacant positions of CRO of the Americas, Kyle Dozeman, and Chief Growth Officer, Paulina Klimenko, both of whom are departing. CEO Rajeev Goel indicated that PubMatic is exploring opportunities to consolidate certain responsibilities into a new global Chief Revenue Officer (CRO) role.
PubMatic sees significant potential for expansion in serving mid-market, performance-focused DSPs and midsize independent agencies. Goel noted that these entities have demonstrated a more rapid adoption of AI solutions compared to their larger, institutional counterparts.
In an era increasingly defined by generative AI, PubMatic is also keenly focused on potential collaborations with emerging AI leaders, such as OpenAI. As ChatGPT expands its presence in the advertising domain, PubMatic is positioning itself to leverage these advancements. The SSP has already been engaging with smaller AI players like Kontext and Dappier, and is actively "innovating on the ad formats and appropriate signals to monetize that kind of inventory."
Goel referenced OpenAI’s ambitious goal of generating $100 billion in advertising revenue by 2030 as a clear indication of the necessity for broad ecosystem collaboration. "It’s going to be an ecosystem-wide effort for them to get to that level," he stated, emphasizing that platforms like PubMatic will be integral to achieving such large-scale revenue targets within the evolving AI advertising landscape. This forward-looking strategy highlights PubMatic’s intent to remain at the forefront of technological innovation and capitalize on the burgeoning opportunities presented by artificial intelligence in the digital advertising sphere.
