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PubMatic (PUBM) Q1 Earnings Report Preview: What To Look For


Adam Hejl /
2023/05/08 4:48 am EDT

Programmatic advertising platform Pubmatic (NASDAQ: PUBM) will be reporting earnings tomorrow after the bell. Here's what you need to know.

Last quarter PubMatic reported revenues of $74.3 million, down 1.67% year on year, missing analyst expectations by 3.07%. It was a weak quarter for the company, with underwhelming revenue guidance for the next quarter and a miss of the top line analyst estimates.

Is PubMatic buy or sell heading into the earnings? Read our full analysis here, it's free.

This quarter analysts are expecting PubMatic's revenue to decline 6.45% year on year to $51 million, a further deceleration on the 25.1% year-over-year decrease in revenue the company had recorded in the same quarter last year. Adjusted loss is expected to come in at -$0.13 per share.

PubMatic Total Revenue

Majority of analysts covering the company have reconfirmed their estimates over the last thirty days, suggesting they are expecting the business to stay the course heading into the earnings. The company missed Wall St's revenue estimates twice over the last two years.

Looking at PubMatic's peers in the sales and marketing software segment, some of them have already reported Q1 earnings results, giving us a hint of what we can expect. Braze delivered top-line growth of 40.1% year on year, beating analyst estimates by 3.05% and VeriSign reported revenues up 5.04% year on year, missing analyst estimates by 0.8%. Both companies (Braze and Verisign) traded flat on the results.  Read our full analysis of Braze's results here and VeriSign's results here.

There is still much uncertainty in the markets. The Federal Reserve's hawkish stance on rates, meant to tame inflation, remains a key market narrative. There is an added wrinkle now with troubles in the banking sector, triggered by Silicon Valley Bank's fairly sudden and surprising collapse. Given these, the question is whether higher rates (which dampen economic activity) and potentially less lending from the overall banking sector will trigger a recession. While some tech stocks have recovered year-to-date, most are still well off their 52-week highs. PubMatic is down 12.9% over the last month, and is heading into the earnings with analyst price target of $18, compared to share price of $12.27.

One way to find opportunities in the market is to watch for generational shifts in the economy. Almost every company is slowly finding itself becoming a technology company and facing cybersecurity risks and as a result, the demand for cloud-native cybersecurity is skyrocketing. This company is leading a massive technological shift in the industry and with revenue growth of 70% year on year and best-in-class SaaS metrics it should definitely be on your radar.

The author has no position in any of the stocks mentioned.