Well, hello everyone, and welcome to PubMatic's first quarter of 2022 earnings webinar. My name is Kelsey, and I will be your operator today. Before I hand the call over to the PubMatic team, I'd like to go over a few housekeeping notes. As a reminder, this webinar is being recorded. After the speaker's remarks, there will be a Q&A session. If you plan to ask a question, please ensure you've set your Zoom name to display your full name and firm. If you would like to ask a question, please use the Raise Hand function located at the bottom of your screen. We thank you all for your attendance today, and I will now turn the webinar over to Stacie Clements with The Blueshirt Group. Thank you, operator, and good afternoon, everyone. Thank you for joining us on PubMatic's earnings call for the first quarter ended March 31, 2022. Joining me on the call are Rajeev Goel, Co-founder and CEO, and Steve Pantelick, CFO. Today's prepared remarks have been recorded, after which Rajeev and Steve will host live Q&A. A copy of our press release can be found on our website at investors.pubmatic.com. Before we start, I would like to remind participants that during this call, management will make forward-looking statements, including without limitation, statements regarding our future performance, market opportunity, growth strategy, and financial outlook. Forward-looking statements are based on our current expectations and assumptions regarding our business, the economy, and other future conditions. These forward-looking statements are subject to inherent risks, uncertainties, and changes in circumstances that are difficult to predict. You can find more information about these risks and uncertainties and other factors in our reports filed from time to time with the Securities and Exchange Commission, including our most recent Form 10-K and any subsequent filings on Form 10-Q or 8-K, which are on file with the Securities and Exchange Commission and are available at investors.pubmatic.com. Our actual results may differ materially from those contemplated by the forward-looking statements. We caution you therefore against relying on any of these forward-looking statements. All information discussed today is as of May 9, 2022, and we do not intend and undertake no obligation to update any forward-looking statement, whether as a result of new information, future developments, or otherwise, except as may be required by law. In addition, today's discussion will include references to certain non-GAAP financial measures. These non-GAAP measures are presented for supplemental information purposes only and should not be considered a substitute for financial information presented in accordance with GAAP. A reconciliation of these measures to the most directly comparable GAAP measures is available in our press release. With that, I will now turn the call over to Rajeev. Thank you, Stacy, and welcome everyone. We delivered our 7th consecutive quarter of durable growth with a compelling combination of high-growth revenue, significant profitability, and meaningful cash generation. Organic revenue in the quarter grew 25% year-over-year, reflecting the strength of our usage-based software platform. Adjusted EBITDA margin was 31%, demonstrating the tremendous leverage in our business. Cash flow from operations, an important indicator of the health of our overall business, was $19 million. Our long track record of profitability allows us to continually invest in innovation to capture the long-term growth opportunities in the face of a dynamic macroeconomic environment. Our consistent performance is driven by our unique infrastructure-driven approach to digital advertising. We own our own infrastructure, which gives us the ability to control and optimize the entire technology stack, as well as benefit from significant leverage from increased usage of our platform. The resulting flywheel of high-margin revenue, reinvestment in innovation, and expanded customer usage is a key competitive differentiator underpinning our results. We are hard at work building the digital advertising supply chain of the future. This is a supply chain that connects publishers, agencies, advertisers, data owners, and e-retailers with each other and with consumers on a global basis across ad formats and devices. It is a supply chain that is efficient, transparent, free of fraud, and both rich in data and respectful of consumers' desires for privacy. Ultimately, it's a supply chain that maximizes value for our customers in terms of publisher revenue and advertiser return on investment. This vision creates a long runway for growth. Global digital ad spend is expected to be almost $630 billion in 2024, and it continues to grow at a rapid rate. A programmatic approach is the only way to efficiently manage the growing variety of channels and ad formats alongside the expanding volume of inventory and advertisers. As a pioneer in programmatic advertising, we believe we are in the early days of a long runway for growth. We entered the year with an estimated market share of 3%-4%. Over the long term, our objective is to grow our market share to 20%. To accomplish this, we are continuing to invest in multiple growth drivers that fuel the supply chain of the future, including supply path optimization, omni-channel technology, and audience addressability, all with a dual focus on short-term results and long-term opportunity. Buyers are actively consolidating their ad spend on fewer supply paths as they look to optimize their spend through robust targeting, direct technology integrations and workflows, and premium ad inventory across channels. Additionally, buyers are seeking more transparent and efficient media buying across the open internet. We are partnering with buyers to build for this future. For Q1, SPO represented over 27% of total activity on our platform, up from 10% two years ago. Our partnership with GroupM is a great example of the SPO journey we are on with many of our buyers. After working together for multiple years in different parts of the world, we first announced a PubMatic and GroupM partnership in March 2021. In February of this year, we announced the expansion of our global partnership, which is rolling out in multiple stages over the course of the year. As part of this expansion, PubMatic will enable the GroupM Premium Marketplace, a programmatic marketplace focused on connected TV and online video that will increase media buying transparency and efficiency. With our technology, GroupM is able to make the media buying process simpler and more transparent, enabling publishers to gain better inventory monetization and exposure to new clients within the GroupM portfolio, as advertisers will be able to shift more of their ad spend to programmatic buying. As more spending moves towards programmatic channels, we see opportunity in our omni-channel capabilities as buyers and publishers seek to simplify their workflows and tech stacks by leveraging a single technology platform that works across formats and channels. For instance, we continue to drive expansion across the fastest-growing ad formats, CTV, online video, and mobile app and web. With our single platform, we match buyer needs to publisher inventory at scale regardless of device or content type in use by the consumer. This omni-channel approach has positioned us as being particularly resilient over the last two years as we've seen rapid changes in consumer behavior. CTV is in the early stages of market adoption, however, it's growing quickly. GroupM estimates global CTV ad spend to be $20 billion this year, growing to $32 billion by 2026. We believe this market can be substantially greater with the onslaught of premium inventory as large broadcasters and publishers broaden their offerings with ad-supported models. We are building for this future, whether it's data-enriched deals, private marketplace deals, or programmatic guaranteed transactions. Our vision continues to rapidly gain market traction, and we delivered another great quarter of outsized growth. Revenue from CTV grew more than five times over Q1 2021. We continue to add more premium CTV inventory to our platform and are now monetizing inventory from 176 CTV publishers. We're also working with device manufacturers, rising stakeholders within the CTV ecosystem. We recently signed three of the top five largest connected TV manufacturers who are utilizing our platform to gain access to the rapidly growing programmatic CTV advertising demand that we bring to them. In addition, we are seeing growth and significant opportunity in the mobile app channel. We recently partnered with ironSource to bring incremental brand advertising demand to their in-app publishing inventory. These ads kept users engaged and inside the app, promoting a better user experience that benefits both advertisers and publishers, and proving the value buyers and publishers gain with in-app video. A critical aspect of the digital advertising supply chain of the future is audience addressability. As third-party data becomes less sustainable and relevant, the value of data is shifting to the sell side at the nexus of the publisher and the consumer. We see a significant role to play as a result of our being a leading technology provider to publishers. We offer a portfolio of solutions using known identity, first-party data, contextual advertising, and cohorts. With this approach, we can create a stronger, more sustainable, and privacy-safe advertising ecosystem that delivers superior monetization for publishers and increased ROI for buyers. Our investments and advancements in addressability solutions help us unlock the massive retail media opportunity and expand our addressable market. Retail media is expected to be a more than $140 billion market by 2024. We are building technology and solutions to help retailers monetize their own media, extend their data off-site to monetize impressions from non-retail publishers, and to optimize ROI for buyers. At the same time, our addressability solutions are gaining traction with retailers and e-commerce companies today. A major grocery chain and other retail giants are already choosing PubMatic to monetize their valuable first-party data off-site to unlock incremental revenue streams. In addition, digital-savvy e-commerce platforms are leveraging PubMatic technology to power on-site, audience-based private marketplaces. In summary, I'm extremely proud of the team and all that we've accomplished. We operate in a large and growing market with significant long-term opportunity. Regardless of the near-term macroeconomic conditions, we are incredibly excited about and focused on the long-term growth runway ahead of us. We've demonstrated resilience through peaks and valleys of the economic cycle, leveraging the strength of our infrastructure-driven approach, usage-based business model, and deep focus on innovation. Our profitability allows us to focus on and invest in long-term innovation and serve our customers while delivering consistent, durable growth quarter- after- quarter. Let me now turn it over to our Chief Financial Officer, Steve Pantelick, to provide additional detail. Thank you, Rajeev, and welcome everyone. In Q1, PubMatic continued its outstanding track record of durable growth, market share gains, and profitability with revenue of $54.6 million, representing year-over-year growth of 25%, the seventh straight quarter above our long-term target of 20%+. It was also our 12th straight quarter of positive GAAP net income and our 24th consecutive quarter of positive Adjusted EBITDA. As a reminder, 2021 was our ninth straight year of Adjusted EBITDA profitability. These results are particularly noteworthy and demonstrate the strength and resiliency of our business in view of the various macro headwinds that have emerged over the last several months, notably in EMEA. Robust growth in the Americas and APAC regions have helped offset these challenges. Our investments in innovation, go-to-market resources, and infrastructure have been instrumental to our financial results and produce a powerful network effect with increased visibility and scale, driving higher revenues from existing customers and delivering significant benefits to our customers and us. We continued to outperform on the bottom line with first quarter GAAP net income of $4.8 million and Adjusted EBITDA of $17 million, representing margins of 9% and 31% respectively. Our cash flow from operations was $19.3 million, and Free Cash Flow was $14.9 million or 27% of revenue. Before turning to the details of the quarter, I want to highlight the drivers that have underpinned our financial success to date and give us confidence in our long-term growth and profit trajectory. First, we've built a scaled business in a highly fragmented industry that offers an omni-channel and global solution for publishers and buyers. Our purpose-built, globally distributed private cloud infrastructure and local go-to-market presence enable us to do business in every major ad market apart from China. This foundation allows us to expand across the world effectively and efficiently. Second, our usage-based model, combined with our proven ability to retain and grow revenues from existing customers, provides a high degree of revenue stickiness and corresponding visibility. Third, we have built a business with structural advantages emanating from our owned and operated infrastructure and offshore R&D that enables us to expand our competitive moat and consistently invest in innovation on behalf of our publishers and buyers. Fourth, our operating model and global team have consistently achieved strong profit margins by staying focused on operational excellence while delivering value to our customers. Lastly, we generate consistent cash flow through rigorous working capital management and efficient capital expenditure. Now, turning to the highlights for Q1. Despite the various macro headwinds in the quarter, we successfully navigated our business to deliver strong revenue growth across formats and channels. We benefited from having a broad set of over 60,000 advertisers who leveraged our omni-channel global platform. Our 25% growth in the quarter, combined with last year's increase, translates to a two-year stack growth of 79%. In aggregate, spending from our top 10 ad verticals increased over 40% year-over-year. Shopping grew well above the average, supported by a strong rebound in travel at 150% and arts and entertainment at nearly 100%. All top 10 verticals grew double digits or more. The benefit of having diverse business activity on our platform was borne out in the quarter with faster growth verticals offsetting slower growth in the automotive and health and fitness verticals. In April, we saw some softening in several verticals that was partially offset by continued strength in shopping and travel. Revenues for our mobile and omni-channel video business, the combination of online video and connected TV, grew 41% year-over-year and accounted for 67% of our total revenues in Q1. This growth was on top of the prior year's growth of more than 63%. Revenue from CTV, inclusive of OTT, grew over 5x over Q1 2021. Our total desktop business, comprised of display and online video, also performed well with revenue up 15% year-over-year on top of prior year's 23% growth. We also continued to diversify our customer base as Yahoo revenues represented less than 15% of our total revenues in the first quarter. Supply path optimization relationships play a key role in terms of our growth and revenue stickiness as advertisers and agencies expand usage of our platform. In Q1, we continued to sign new SPO deals, renew existing agreements, and grow ad spending via these deals. Our multi-year success with SPO supports further investment behind this opportunity, and we are building more tools to allow buyers to find the right audiences and media on our platform. The proportion of SPO spend to total ad spend increased from Q4 and represented over 27% of spending in the quarter. An important indicator of publisher satisfaction and usage of our platform is net dollar-based retention. We again performed very well against this metric. For the last 12 months through Q1 2022, net dollar-based retention was 140%. As a reminder, it will naturally normalize and come down from this level once Q2 2020 results are no longer in the comparison set. Our long-term success in achieving high gross margins is a result of our strategy and execution. We aim to put in service our maximum capacity every calendar year by the beginning of Q4. Once capacity is put in place, it becomes a fixed cost in the near term that we then leverage over the succeeding periods. In seasonally lower spend periods such as Q1 and Q2, our gross margins are typically lower than second half levels. As the year progresses, the combination of ongoing infrastructure optimization, the expansion of activity with our new and existing customers, and higher seasonal ad spending results in significant structural leverage. By owning and operating our infrastructure, we have been able to drive down our unit costs. Over the last two years, we have reduced our cost of revenue per million impressions processed by 50%. Our experience has shown us that the return on investment for incremental capacity is high and typically pays for itself on a cash basis in months. With this cost advantage, we plan to continue expanding our processing capacity to capitalize on growth opportunities and to increase our competitive moat. In Q1, the combination of increased headcount for growth and stock-based compensation resulted in operating expenses of $32 million, up 30% year-over-year. Excluding stock-based compensation, Q1 operating expenses increased 25%. Over the last 12- months, we increased our technology team by 39% and our go-to-market team by 14%. Q1 GAAP net income was $4.8 million. Non-GAAP net income, which adjusts for stock-based compensation, the unrealized gain on equity investments, and related income tax effects, was $8.1 million or 15% of revenue. Diluted EPS was $0.08 and non-GAAP diluted EPS was $0.14. Turning to our cash flow, we generated net cash from operating activities of $19.3 million in Q1 2022. Our Free Cash Flow was $14.9 million, equal to a Free Cash Flow margin of 27%. We ended Q1 2022 with cash equivalents, and marketable securities of $175 million and no debt. Now on to our Q2 and full year 2022 guidance. First and foremost, the factors that are driving our durable revenue, profit, and cash generation remain solidly intact. We are confident in our long-term growth trajectory. We have built a business with strong innovation capabilities, which allows us to capture digital advertising's biggest opportunities in mobile and omnichannel video today, while positioning us to take advantage of new opportunities that are emerging. Looking to Q2, while we see several headwinds, our revenue is trending within the range of our expectations. To be clear, there is potential for further softening of European consumer demand amidst the Ukraine-Russia war and challenging economic conditions ranging from high inflation to rising interest rates that may dampen consumer activity and advertiser spending levels. In addition, there is of course, the reality that some parts of the world remain in COVID-induced lockdowns that affect both the supply chain and consumer activity. If any of these trends significantly worsen, our Q2 revenues may be affected. For Q2, we expect revenue growth of 20%-25% or $60 million-$62 million. As a reminder, we had a very strong Q2 last year with 88% growth. On a two-year stack basis, our guidance translates to over 100% for the two-year period. We expect Adjusted EBITDA between $18 million and $20 million or approximately a 31% margin at the midpoint. In terms of our investments to achieve our long-term growth potential, we plan to maintain our previously disclosed strategy of stepped-up investment in our technology organization. Over the next several quarters, we aim to double this team with the majority of new hires to be added in our India technology center. Our hiring was slower than anticipated in the quarter, but we have seen solid progress thus far in Q2. We also plan to continue adding key go-to-market team members across the globe to drive new product adoption and new market expansion. We believe we are still in the early days of our growth and realizing the considerable business opportunity ahead of us. Accordingly, we are making investments now for long-term market share gains. Of course, we will revisit these plans if there are any major changes in macro conditions. We are maintaining our full-year revenue guidance of $282 million-$286 million or 25% growth at the midpoint, supported by the anticipated robust second half growth from our SPO relationships, continued ramp-up of our CTV business, and political ad spending. Our full-year guidance today assumes that macro conditions do not deteriorate significantly from where they are currently. In terms of FX exposure, we believe the risk is limited because most of the transactions flowing on our platform are denominated in U.S. dollars. On a full-year basis, we anticipate that GAAP operating expenses will increase in absolute dollars at roughly a similar percentage rate as 2021, with some quarter-to-quarter variability as the year progresses based on timing of hiring and investments. Our operating expense assumptions include incremental operating costs of $5 million-$6 million related to new offices we are adding, offices reopening, and significantly higher travel and entertainment expenses as our team reengages in person with customers around the globe. We're also maintaining our full-year Adjusted EBITDA margin range between $101 million-$106 million or approximately 36%-37% margin. We expect CapEx for the year to be $33 million-$36 million, up from our original expectations at the beginning of the year. We continue to see supply chain delays and therefore will be accelerating some 2023 CapEx investments into 2022. Based on timing of equipment availability and shipments, the bulk of our CapEx will occur in Q3 and will disproportionately affect Free Cash Flow in that period. As noted earlier, our proven track record of return on investment for incremental capacity is high, and we believe this positions us well for future growth. Overall, we expect to increase the total number of impressions processed in 2022 by over 50% compared to 2021. In closing, our first quarter results underscore the strength of our platform and the basis for our confidence in our future prospects. We believe we have the right platform and the right approach to be at the forefront of our industry. PubMatic delivers a compelling combination of durable growth and profitability, including cash generation, due to our unique infrastructure-driven approach to digital advertising. We see a long runway of growth ahead of us as our TAM continues to grow. We are consolidating the sell side as one of the few scaled global omni-channel platforms. Our profitability gives us a high degree of agility and the ability to invest in long-term market share gains, which is our plan. With that, I'll turn the call over to Stacy to open it up for questions. Thank you, Steve. As a reminder, you can ask a question by raising your hand located on the dashboard, or if you're on your phone, press star nine. Our first question comes from Shweta Khajuria from Evercore. Please go ahead, Shweta. Thanks, Stacy. Hi, Steve and Rajeev. I guess a couple questions. When you think about the macro headwinds, so you said your assumption in the guide is not meaningful deterioration of trends from here on. I guess could you talk about the magnitude of headwinds you saw, whether it is Ukraine, supply chain, or inflation and interest rates? How would you rate them in terms of the magnitude of the impact? Second, what kind of impact are you expecting from political spend in the back half of this year? You called that out. Thank you. Sure. Nice to reconnect, Shweta. You know, from my perspective, the ranking of the risk is, you know, of course, there's a lot of challenges in the EMEA region, notably the war that's going on there. That does have some potential to have an overhang effect on consumer behavior. We have roughly a little over 25% of our business in the EMEA region. The strength of our platform as an omni-channel platform and globally scaled really has allowed us to navigate quite successfully in spite of some of that softness. As noted, you know, we saw very strong continued results out of our advertising verticals in shopping, travel, and offsetting, you know, where there was some other weaknesses in another couple of ad verticals. Overall, you know, we feel that that's probably the top of the most immediate risk. You know, the other factors are really industry-wide questions and aspects that everybody's addressing and trying to figure out how best to work through it. Of course, there's inflation risks as well as high rising interest rates. Overall, you know, we've built a business that is well-balanced and diversified to allow us to navigate, you know, these macro headwinds. In terms of the anticipated upside from political ad spend, you know, as we saw in the prior big spending cycle, we anticipate several million dollars in the fourth quarter coming into our business as a result of that activity. Shweta, good to connect. If I can just add a little bit of context as well. Obviously, your question was on the short-term economic dynamics. From my perspective, I'd just like to add, you know, I see a long runway of growth ahead of us. Our addressable market continues to grow. We're consolidating the sell side as one of the very few scaled global omni-channel platforms. You know, we have a very profitable business model, which gives us the ability to invest in innovation and be very agile. You know, the economic environment will kind of be what it's gonna be for the next couple of quarters, but we see great long-term opportunity and ability to continue to grow our share. Okay. Thank you, Rajeev. Thank you, Steve. Our next question comes from Brent Thill at Jefferies. Go ahead, Brent. Thanks. Good afternoon. Steve, I know you mentioned you're not anticipating the economy to get worse, but in the event that things did tick down, can you just give us a sense of how you would think about running the bottom line? Would you continue to invest through this cycle, or do you feel that you would take a different approach to the margins later, I'd say? Great. Well, good to reconnect with you, Brent. You know, with respect to your question, you know, one of the things that really has proven to be a big strength of our company is to be able to consistently invest over the long run. As a reminder, over the course of the pandemic, we actually increased our global team by 50% and our technology team by 80%, and that really set us up well for, you know, the growth that we're seeing today, you know, well above the industry average. From our perspective, you know, it's always a fine line to really assess, you know, the steepness of any particular point in time of the impact. There are things that really give us a lot of confidence. You know, first of all, you know, we have a long track record of profitability based on structural advantages that we built up over time. You know, that leads us to be able to invest, you know, through headwinds and with tailwinds. Second, you know, in terms of economic disruption, you know, what we've historically seen is that advertisers will reduce their budgets potentially, but then they shift towards the areas that we operate in, which is programmatic advertising, where it's more measurable, you can gauge the efficiency, it's flexible in a real-time environment. As a case in point, arguably, you know, what occurred, you know, when the pandemic really struck in Q2 2020 was a microcosm of the kinds of tailwinds that we're facing today. What we saw as a company is that despite the impact to the top line, we still delivered almost a 20% EBITDA margin. It's a function of multiple factors, strategy and execution, and also just being able to be very nimble in the marketplace. As everybody you know knows, from that point our business really ramped up and grew very nicely and finished the 2020 year up over 30%. Big picture, we keep a close eye on trends, but we feel that we are really doing our shareholders a service by consistently investing in innovation and preparing to take advantage of these considerable growth opportunity ahead of us. Great. Yeah. A quick follow-up for Rajeev. Just, you mentioned connected TV up 5x. Can you just give us a little more context of kind of what the next leg of the journey is for you in CTV and ultimately anything that you're seeing that's interesting that gives a little more color as it relates to what's happening with your success in that market? Sure. Yeah, absolutely. We're really excited about the growth there. I think we're seeing opportunities in a couple of different areas. First, I'll talk about the buy side. You know, we in my prepared remarks, I highlighted the GroupM Premium Marketplace. You know, that's a lot about online video and CTV. So we're seeing great traction on the buy side. That's just one example of major buyers shifting more spend towards our platform. That in turn, you know, brings more publishers to our platform, whether they're existing publishers that now we're expanding into CTV with or new publishers. I think one of the things that you'll see with us, given we're focused on efficiency, and programmatic methods of transacting CTV and being very efficient and scalable in doing that, is we will attract a wide variety of different, CTV media owners. We highlighted in the prepared remarks the, device manufacturers. That's a great category, you know, not really a category that existed even a couple of years ago. There's obviously broadcasters. Our model is also great, for the more niche-oriented, CTV apps. You know, they may not be 100 million, 200 million users. They may be 10 million, 20 million, 30 million, but they could be very focused on specialized types of content. You also see us grow very rapidly, in all markets around the world, given the nature of our global platform. There's, I think, a wide variety of different ways for us to engage with sellers and buyers from a CTV perspective, you know, leveraging the strength of our infrastructure, the transparency it brings. I expect to see that publisher number continue to grow, and I also expect to see the retention rates in terms of the volume of dollars that we're transacting for each pub to also grow. Great. Thank you. Thanks, Brent Thill. Our next question comes from Justin Patterson at KeyBanc. Great. Thank you, and good afternoon. Rajeev, Europe's generally been setting the tone on regulation and antitrust. With the Digital Markets Act looming about a year out, what threats and opportunities do you see from that for PubMatic? Then Steve, how should we think about the pace of unit cost reductions going forward? You've clearly had a lot of success with that the past few years, so curious how much further you can go. Thank you. Yeah. Hey, Justin. I think generally the focus on privacy regulation, and we could also maybe include in there some of the antitrust or anti-competition regulation and investigations is a tailwind for us. I think from a privacy perspective, you know, what's happening is the rules are becoming clearer around how consumers' desires for privacy should be respected in digital advertising, and it's something that we have, you know, long advocated for and long stood for. I see now the opportunity, you know, really to provide to advertisers, I think, what they've always wanted, which is the great high-quality content that the open internet is well known for. You know, so great premium content brands. also now with heavily consented data flows, you know, where the publisher, or sorry, where the consumer is able to say exactly what data they're willing to share or not willing to share, and to be able to do that at scale. As that's happening, the nexus of data activation and targeting is moving to the sell side of the ecosystem, and that's because the consumer and the publisher sit on the sell side of the ecosystem. We think, you know, with our, obviously our publisher sell side focus, we're in a great position to be able to capitalize on that trend. We see exactly that playing out in our entire portfolio or our fairly broad portfolio at this point of addressability solutions. Justin, to get to your question regarding our ability to drive down our unit costs, you know, we are very confident that we're gonna be able to keep doing that on a fairly steady basis. You know, I anticipate doing it, you know, roughly about 10%-15% reductions on a per annum basis. The reason why we have this confidence is, as a reminder, you know, we control all layers of our tech stack, meaning the software layer, the network layer, and the hardware layer. We are always in a position to optimize depending on the opportunities. This really has a benefit, of course, in terms of reducing our unit costs, but it really is, you know, a terrific outcome for our customers because that leads to faster innovation, greater control, and dramatically better outcomes for all of our ecosystem partners. When we think about it in terms of what we are able to accomplish, we're gonna consistently invest. Because we have the confidence and proven ability to reduce those unit costs, that puts us in a very strong leverage position in terms of creating this competitive moat that allows us to start that cycle all over again and keep reinvesting in the business. Thank you. Our next question comes from Matt Swanson at RBC. Yeah. Thanks Stacy, and thank you guys for taking my questions. I guess following up on Justin's question, can we just get an update on Identity Hub and Audience Encore specifically around customer conversations? You know, as we inch closer to 2023, are you starting to see this, you know, pick up a lot? And could this be another catalyst for supply path optimization and really kind of focusing on the differentiation? Then Steve, just as a quick follow-up to an earlier comment, you mentioned some specific verticals still, you know, maybe being more impacted. Could you just go into a little bit on that? Obviously, it's good to hear that retail and travel are performing better now. Yeah. Hey, Matt. With respect to Identity Hub and Audience Encore, we continue to see great traction and uptake with our customers around those products. We have more and more publishers adopting Identity Hub on a monthly basis. I think it's becoming easier for publishers to deploy it, and it's also becoming more and more valuable, you know, as we add more identity providers into that solution. Buyers are also very excited about it because it means that when they wanna bring their identity solution to market, we can provide instant levels of scale, you know, given the installed base of Identity Hub. Audience Encore is also gaining rapid amounts of traction. I guess just as a reminder, Audience Encore allows any data owner, so it could be a buyer, could be a data partner, could be a publisher, to make their data available on our platform, and attach it to other publishers' inventory or media. In Audience Encore, we continue to innovate heavily behind this product. It's gaining more and more traction. We shared some case studies in the fact sheet with MiQ, LiveRamp, and others around that product. I do believe both of these products should lead us to more wins in terms of supply path optimization. I think buyers see an increasing level of differentiation from us on the audience addressability side, and they see that, you know, we're innovating heavily on their behalf, and they also see an advantage that we have in terms of our infrastructure. Just as an example, I was meeting with the leader of a, you know, top five, top six agency just a couple of weeks ago, and they asked about, you know, how can we help them in terms of compliance, privacy around compliance with privacy regulations around the world. The fact that we own our own infrastructure means that we can control very granularly what happens in any given country. That, you know, is in contrast to those that operate in public cloud, where they may not even know, you know, where the server instance that's processing data is sitting. I think our advantages are only gonna continue to grow, and that should lead to more stickiness both on the publisher side and on buyers via supply path optimization. Matt, with respect to your question on advert close, just as a reminder to everyone, one of the strengths of our business is that we have a very diversified advertiser base. We have more than 20 ad verticals. In the first quarter, our top 10 ad verticals grew over 40% year-over-year. We had some real stellar performance in travel and a couple other verticals like shopping. The reason why we are so confident in terms of the approach to the business is that that growth was able to offset some slower growth, but still all top 10 ad verticals grew in double digits year-over-year. It's not a function of sort of lagging growth, it's just where the growth is coming from at any point in time, and that's really an important call-out. For example, you know, the news vertical grew almost double year-over-year in the first quarter. Historically, that's a small part. It's outside the top ten. Real estate, you know, was outside the top ten, you know, struggled in the first quarter. The big picture point is, what has allowed us to more than grow at twice the rate of the market is this very robust omni-channel platform that has. It's really a portfolio based upon advertisers, verticals, and our, you know, global spread. That really, I think, is the key takeaway of why we are successful. That is sort of the thing that gives us confidence as we look ahead to the second half. Thank you. Our next question comes from Andrew Marok at Raymond James. Please go ahead, Andrew. Yes. Thanks for taking my question. You noted about the hiring trends that you might be a little bit lower than you had expected in 1Q. I guess, is that a result of increased competition for talent? I know you're concentrating a lot of your hiring on India. Is there any differences in the markets for talent between the domestic market and India? Thank you. Hi, Andrew. You know, probably set the stage that, you know, first and foremost, that we've been very successful in hiring people over the last couple of years. As I said a few minutes ago, you know, we increased our global headcount by 50% by the end of last year, and the first quarter of this year over last year, you know, overall globally 25%. It's not that we're not able to hire people, but we have set a very high bar for what we want to accomplish because of the importance that we see in consistent innovation and expanding the markets where we operate with existing customers and new customers. I wouldn't say it's a function of a particular challenge on a relative basis. We are obviously hiring, you know, many people across the globe. We are specifically very focused on adding incremental team members in India, you know, as the heart of our innovation center. Over time, you know, there is sort of this challenge of competition, but we see less of that in some markets. Of course, you know, there is gonna be always puts and takes on a particular role or function in terms of the difficulty of hiring that individual. We've been very pleased, you know, what we've been able to accomplish in terms of growth of our team. I think in the first quarter, it was probably a function of a lot of macro challenges and, you know, there was some hesitation for people maybe to leave the jobs that they were currently sitting in. We don't anticipate being a major headwind. It's really just a call-out in terms of, we'll call it the timing of hiring. Andrew, I'll just briefly add, I mean, my own view is that hiring will get easier over the course of the year, really for two reasons. One is, you know, we're already seeing, you know, signs of pullbacks at many companies. You know, you had the Uber memo, right? That came out last night. I think Robinhood laid off 9%. Things are changing, right, as the environment changes. Second, we have a, I think, unique business in that we have long-term sustainable revenue growth and profitability. As I talk to some candidates, you know, that profitability is a very attractive element here at PubMatic because it signals a level of ongoing investment in growth and stability that, you know, not every employer can offer. Great. Thank you. Our next question comes from Andrew Boone at JMP. Hi, good afternoon, guys, and thanks for taking my questions. I'd like to start with retail media. Can you just help us understand the differentiation for PubMatic's offering versus others that are in the space? I think it's important just given the size of the opportunity. Secondly, given the fact that product development has been organic, you're profitable, you just hit on that point, Rajeev, and shares have really just come in. Can you just update us on your thoughts around the potential of a buyback and just capital allocation more broadly? Thank you so much. Yeah, sure. Why don't I take the first one, and then I'll turn it over to Steve on the buyback question. With respect to retail media, you know, first just for a little bit of context, you know, we view it as roughly $140 billion-$150 billion opportunity, you know, a couple of years out. It's a very large market, and I would say it's in very early stages of development. Obviously, you have companies like Amazon that are, you know, out in front of many others. But by and large, I think most other companies are fairly new to the opportunity. We also don't think it's a winner take all. There's a, you know, number of different ways to attack it. I think from our perspective, we view it as a very natural extension of our platform, given that we're omni-channel, we're global, we own the infrastructure, and then we have a deep portfolio of addressability solutions. What retail media is really looking to capitalize on is that the publisher or the e-retailer in this case, you know, they have logged in consumers, right? They know exactly what the consumer is looking for, is shopping for, is buying, or maybe is not buying, and they have that at scale, and they're looking to capitalize, you know, on the advertising opportunity that generates. That can be both, ads shown on site on the e-retailer's website, or it can be the data that those interactions generate that can be monetized on site or off site. We have, I think, a lot of great opportunity there. Consumers interact typically with e-commerce companies through multiple channels. It can be mobile, you know, it can be tablet, it can be computer, it can, of course, be offline. We have an omni-channel platform. A number of retailers are global, and certainly the advertisers and agencies are global. We have a global platform. We understand the retail advertising opportunity, and there is a dynamic there between focusing on e-commerce transactions versus advertising. My first startup was in the e-commerce space, so I understand that challenge well. As I mentioned, you know, we have a pretty robust set of solutions in terms of addressability that allows the retailers to take advantage of the data that they have about consumers. We think we have a lot of great opportunity here, as we look forward. You know, as Steve has called out, e-commerce retailing is already on the buy side, is a top five advertiser vertical for us, which means we also have great relationships on the buy side of the ecosystem. In terms of the process of thinking through a share buyback, you know, from our perspective, you know, in light of our ability to grow our revenues at 20%+ over the last seven quarters now and deliver EBITDA margins in the high 30s%, you know, we feel that currently the best use of our cash is to reinvest in our business. It's obviously a topic of conversation, and we'll continue to investigate and examine it. Remember, you know, just in the last two years, we've doubled our revenues and increased our profits and generated cash. You know, we ended Q1 with $175 million in cash and no debt. We continue to see really terrific returns on investing in our company innovation. Of course, the backdrop is the huge TAM that is growing. We're right at the heart of all the areas that are growing, mobile, omni-channel video. You know, we grew, as noted, in our comments over 40% for that category, and that was on top of, you know, over 70%, 80% the prior year. We feel really good about continuing to invest in the business and, you know, it's shown in the numbers. You know, for the first quarter at 25%, that's well ahead of the anticipated market rate, well ahead of our peers. We think we're gonna keep investing, doing what we do well, focus on operational excellence and of course, delivering for our customers. Thank you, Steve. Our next question comes from Jason Helfstein at Oppenheimer. Thanks. I think you've covered most of it. Just maybe what was the political impact in 2020? I think you said you expect several million dollars this year, which I would imagine would be a little smaller maybe than we would expect. Just what was it in 2020? Could you expand upon why you think it's only several million dollars this year? Thanks. Sure. Well, as a well-diversified business, we're not over-indexing in one particular area. Back at the last election cycle, Q4 2020, we had about $3 million-$4 million of net revenue from political. Basically in line with that expectation. Of course, you know, as our CTV business grows, there might be some upside there, but I'm not currently anticipating that. Big picture is, you know, we've built a business that's diversified. It can navigate sort of the vagaries of the global economy and, you know, all the other macro conditions out there. Political is a valuable, important part of it, but by no means is sort of the only thing that's, you know, gonna get us to our 25% revenue target for this year. Our next question comes from Vasily Karasyov at Cannonball. Vasily? Thank you. Good afternoon. Can you hear me? Yes, we can. We can. Oh, sorry about this. Wanted to ask you a question about the take rate. I know you don't disclose it, but you probably can guess that, when you talk to investors about companies like yours or your peers, you know, the take rate is something that people really focus on. I was wondering if you could give us maybe like directional commentary, where are you optimizing for it. Is SPO accretive to the take rates or not? Let's say is the take rate a headwind for the revenue or not? Any kind of commentary you could give us would really be appreciated. Sure. No, I'd be happy to. Good to see you, Vasily. You know, as you pointed out, we don't disclose take rate. From our perspective, we focus on driving activity on our platform and then of course, delivering net revenue dollars to the P&L. We have a portfolio business, meaning we are operating in every major ad market in the world. Roughly 60+% in America, 25-ish% EMEA, the rest in APAC. Each of those have different revenue share rates that we're able to achieve. We manage it on a global basis from a geo perspective. We also manage it from a format perspective. Of course, higher CPM formats like CTV, you get a lower revenue share rate. Overall, you know, our revenue share rates, take rates have been very stable over the last couple of years. I've said publicly that what I anticipate happening over time is that our take rate will decline about 1 percentage point, maybe a little bit more on a per annum basis related to these mix shifts. The important point to note is that the mix shift is towards high-value formats. Online video, CTV, as Rajeev called out, you know, we're you know, working with GroupM to deploy sort of a global solution in that very high-value format. Because we have such confidence in our ability to deliver profits, you know, we're always you know, looking at opportunities. If we have to be competitive to you know, drive the business, we'll do that. Our results demonstrate, you know, a consistent ability to achieve not just top line growth, but also bottom line. Now with respect to the number, I can tell you it's well below, you know, what is out there, for example, for Google or The Trade Desk. We've gotten to this point where we can really achieve the benefits for our publishers, deliver incremental business to them, and incremental revenues and profits to our business by managing this carefully, but also having the foundation to be able to deliver incremental profitability because of the cost advantage, not just on infrastructure, but also on innovation. As a reminder, 80% of our engineering headcount is based in India, and that's a huge, leverageable asset that we've been, you know, building on for, you know, 16 years. This is very helpful. Thank you. Thank you, Steve. We now have a question that has come in from the larger investment community. This question is for you, Rajeev. Could you talk more about the ongoing consolidation in the space and how favorable that could be for PubMatic? Yeah, we absolutely are seeing consolidation on the sell side, and I would say that we are a firm leader of that. You know, I see a great opportunity to consolidate the market, which really feeds into our goal for 20% market share, you know, as we previously talked about. There's multiple drivers of that consolidation, but what I see is that we have a unique platform that's global, it's omni-channel, it's transparent, and we have a significant competitive advantage with our infrastructure. On top of that platform, you know, as Steve has called out, we have a strong track record of innovation and profitability, really that allows us to get stickier with our customers each year. You know, our leadership in execution and supply path optimization is a great example of this. Our audience addressability set of solutions, our OpenWrap solution, also a great example on the publisher side. We get rewarded when we do that with our usage-based model, and so our, you know, our organization is trained to really find new opportunities with every existing customer, and continue to get deeper and stickier. I think we're in a great position to consolidate the market, and we're moving further and further down that path. Great. Thank you, Rajeev. There are no further additional questions in the queue, so I'm gonna turn it back over to you, Rajeev, for closing remarks. Well, thank you everyone for joining us today. We delivered another very strong quarter of revenue growth and profitability. We have a proven flywheel that allows us to invest in a wide variety of growth levers for the future, and we have demonstrated over many years that we're able to innovate and lead the market. I couldn't be more excited about how we're positioned and the opportunities in front of us. Thank you. This concludes our call today. We look forward to speaking with you over the coming weeks. Have a great rest of your afternoon, everyone.