Welcome, everyone. We will begin shortly. Hello, everyone. We will begin shortly. Hello, everyone, and welcome to PubMatic's second quarter 2025 earnings call. My name is Oren, and I will be your Zoom operator today. Thank you for your attendance today. As a reminder, this webinar is being recorded. I will now turn the call over to Stacie Clements with The Blueshirt Group. Good afternoon, everyone, and welcome to PubMatic's earnings call for the second quarter of 2025. This is Stacie Clements with The Blueshirt Group, and I'll be your operator today. Joining me on the call are Rajeev Goel, Co-Founder and CEO, and Steve Pantelick, CFO. Before we get started, I have a few housekeeping items. Today's prepared remarks have been recorded, after which Rajeev and Steve will host live Q&A. If you plan to ask a question, please ensure that you've set your Zoom name to display your full name and firm, and use the raise hand function located at the bottom of your screen. A copy of our press release can be found on our website at investors.pubmatic.com. 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 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, uncertainties, and other factors in our reports filed from time to time with the Securities and Exchange Commission and are available at investors.pubmatic.com, including our most recent Form 10-K and our subsequent filings on Forms 10-Q or 8-K. 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 August 11, 2025, 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, including adjusted EBITDA, non-GAAP net income, cash flow from operations, and free cash flow. These non-GAAP measures are presented for supplemental informational 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. Now I will turn the call over to Rajeev. Thank you, Stacie, and welcome, everyone. We delivered a strong second quarter with revenue and adjusted EBITDA ahead of expectations. Revenue from our underlying business, which excludes the affected DSP and political advertising, grew 19% year- over- year. Importantly, our reported revenue returned to year-over-year growth at 6%. Our performance was driven by CTV and emerging revenue streams, which includes Activate, sell-side data targeting, and commerce media, as clients increasingly turned to the PubMatic platform for greater performance, transparency, and control over their digital advertising strategies. Once again, our robust business model drove the incremental revenue through to the bottom line. We delivered 20% adjusted EBITDA margin, marking our 37th consecutive quarter of adjusted EBITDA profitability. I'm proud of these results and the value that PubMatic delivers to clients. Our journey to transform the business started years ago, evolving from an SSP provider only to an end-to-end platform serving publishers, ad buyers, commerce media networks, and data providers and curators. We pioneered supply path optimization and launched Activate to put more control in the hands of advertisers and agencies. We delivered significant growth with sell-side data targeting and commerce media. We expanded relationships with the world's largest streamers, with CTV now representing nearly 20% of total revenue, and we recently added a top five U.S. streamer, which increased our market penetration to 26 of the top 30 global streamers. The execution in these secular growth areas has been strong, yet our financial results are not yet reflecting where I know they can be. Today, our top legacy DSP partners contribute the majority of ad spend on our platform. Historically, this strategy has delivered growth and scale, but platform changes on their end are often done with limited visibility and create revenue headwinds for us while we take steps to mitigate them. The most recent example occurred just last month in July and will impact our revenue in the second half of this year as we work through mitigation initiatives. Steve will provide more details in a few minutes. I've seen this industry evolve for two decades, and it's clear that we are at an inflection point. The lines between SSPs and DSPs are blurring, and AI is fundamentally changing how advertising is created, transacted, and optimized. Long-term, we believe the reshaping of the programmatic ecosystem will be to our advantage. The status quo simply won't do. As we look to the second half and beyond, our key priority is to accelerate stronger, more sustainable growth. As our model continues to deliver significant efficiencies via AI and software optimizations, we are able to fund, even accelerate investments to match the pace of change we're seeing across the ecosystem. This includes diversifying our DSP mix, accelerating investment on the buy side, advancing our leadership in CTV, scaling emerging revenue streams, and integrating AI across our tech stack and operations. The good news is that we have already been investing in these areas. We have the team, the tech, the customer relationships, and the financial resources to accelerate the opportunities in front of us. My confidence stems from the progress we've already made in these areas. First, we have been actively diversifying our DSP mix over the past couple of years. Performance marketers and mid-tier DSPs are gaining share of ad budgets as spend shifts to ROI-based outcomes, including in CTV. We see this on our platform. Ad spend from these newer DSPs is growing at 20%+ rates, and we're adding more of these high-growth ad buyers to our platform every quarter, including SMB CTV ad platforms like MNTN and tvS cientific and China-based performance DSPs to support their non-China business. Collectively, these DSPs strengthen our platform and bring better demand diversity, buyer resilience, and platform stickiness. Second, we are accelerating investment on the buy side. The momentum we are seeing with our direct buying platform, Activate, is a testament that our strategy is working. Buying activity more than doubled from Q1 to Q2 as advertisers look beyond legacy platforms for increased performance, control, and transparency. We're seeing success across both brand and agency partners. Omnicom Media Group Germany recently used Activate to power a CTV campaign for a leading online marketplace for handmade goods and was able to exceed their client's performance benchmarks. According to their Managing Partner, Nikolai Heiland, the collaboration with PubMatic allowed the agency to, quote, "implement an efficient programmatic setup for the CTV campaign that delivered impressive results in both visibility and brand impact." At the same time, commerce media players are integrating with Activate to power their programmatic advertising businesses. PayPal is leveraging Activate to combine their unique transaction-based audience data from over 430 million accounts with PubMatic's premium inventory to streamline campaign execution for advertisers across multiple formats, including CTV. This demonstrates how buyers are increasingly turning to PubMatic's unified platform to improve targeting precision, reduce operational complexity, and scale their programmatic commerce media strategies efficiently. I'm excited about the potential this partnership has in the near term, but more importantly, see it as a blueprint for broader adoption across the commerce media landscape. They've made their data in premium brand-safe environments. Our end-to-end platform provides scalable programmatic infrastructure that complements their direct sales efforts. These integrations unlock high margin revenue opportunities for PubMatic across data, media, and buying technology, further diversifying and accelerating our growth engine. To support growth, we are adding headcount in our go-to-market teams with a focus toward independent agencies and direct brand relationships. This complements our ongoing leadership in supply path optimization, which continues to represent a majority of activity on our platform. To capitalize on this increased demand, our third priority is to advance our leadership position in CTV as buyers increasingly move budgets from linear to programmatic stream. CTV revenue grew over 50% year -over -year in Q2, indicating continued significant market share gains. International expansion and new innovative formats are driving CTV growth. In a recent landmark partnership with Nippon TV, one of Japan's largest broadcast companies, PubMatic is now powering programmatic access to their traditional broadcast TV inventory for the first time. This reflects a broader trend among broadcasters globally who are turning to PubMatic to modernize their monetization strategies at scale. We were also selected as the exclusive SSP partner for performance marketing company WunderKIND's launch of Pause ads across their premium CTV inventory. Also driving growth in CTV are our curated marketplaces. Most recently, we launched our live sports marketplace, allowing advertisers to access sports inventory from FanServ, MLB, FuboTV, DirecTV, Spectrum Reach, and Roku. Our proprietary marketplace solves ad monetization for one of the most underserved and high-potential segments. FanServ's VP of Demand Partnerships, Ben Goodfriend, explains, quote, "It empowers brands to connect meaningfully at the exact moment that matter most across every platform they love." End quote. As our growing live sports footprint expands, related buyer activity in the first half of 2025 was up nearly 3x year -over -year. Fourth, we continue to scale emerging revenue streams that monetize outside of traditional auction dynamics. This includes platform fees from data curation, commerce media, and enterprise software solutions, all of which are high margin and contribute to the natural flywheel of our existing platform. For example, we recently partnered with Trainline, Europe's leading train and coach app with 27 million active customers worldwide. This commerce-focused company has integrated with our platform to drive incremental performance-based revenue at scale. By leveraging our SSP as well as our Connect and OpenWrap offerings, they are monetizing both onsite inventory and offsite activations. This allows us to diversify our revenue via our SSP, data, and software fees. Connect is a powerful solution that allows data owners, publishers, and commerce media networks to create curated audience segments using their first-party data. For example, one large digital media company with a diverse portfolio across technology, gaming, and shopping leveraged our platform to unify audience data across their properties. This enabled advertisers to tap into an expansive set of high-value audience segments like tech enthusiasts or deal seekers. By offering these holistic cross-property segments, the publisher is able to drive increased advertiser demand and improve CPMs. Plus, they're able to use Activate to monetize that audience across third-party inventory as well. These use cases demonstrate how publishers are moving from selling ad space to selling true audience insight and how PubMatic is empowering them to do it with full control and transparency, all while unlocking revenue streams outside of traditional DSP-controlled auction dynamics. Finally, as we accelerate these priorities, AI is a critical component integrated across our tech stack to further automate decisioning and streamline activation. This not only drives cost efficiency for our customers, but enhances campaign performance and optimization. In the past 12 months alone, we've launched multiple AI-powered capabilities that will help drive even greater adoption and usage of our platform, including PubMatic for Buyers, our generative AI media buying solution launched in May that enables advertisers to build optimized campaigns using natural language prompts. Our solution lets buyers run campaigns through Activate or their DSP of choice, accelerating setup and improving time to value. PubMatic Assistant, an AI-powered analytics engine, allows publishers and buyers to access insights, troubleshoot issues, and guide campaign decisions through an intuitive chat-based interface. Predictive diagnostics detects yield anomalies in real time and surfaces optimization opportunities via agentic AI workflows to improve publisher monetization with less manual effort. A dynamic floor yield module, currently in beta, uses live auction signals to adjust pricing per impression, outperforming static solutions in early testing. We have owned and operated our infrastructure for many years and optimized our integrations with industry-leading technology solutions to deploy high-performance machine learning models that enable increased data ingestion and faster processing, setting us apart from others. The scale, premium inventory, and wide variety of data sets on our platform allow us to deliver measurable results that give us a differentiated advantage. We are moving fast on the AI front, and it's changing the game. It's opening up the market in new ways and deepening our customer engagements. We believe that focusing on these key priorities will ultimately result in a stronger, more sustainable revenue profile for PubMatic over time and drive better outcomes for our customers and shareholders. Further, these priorities are converging with a major inflection point in the industry that we believe could result in significant market share expansion. The recent ruling in the Google ad tech antitrust trial confirmed what we've long known. We have been operating in a monopolistic environment for decades, and yet PubMatic has grown our market share. Now, with remedies on the horizon, we are entering a new chapter. Advertisers and publishers will need trusted, independent technology providers with the scale and innovation to replace what they've relied on in legacy systems. PubMatic is that partner. We anticipate that a significant portion of Google's 60% market share will be up for grabs in 2026. Further, we estimate that a 1% market share shift to PubMatic would represent approximately $50 million- $75 million in net revenue, with most of that flowing through to our bottom line. This is a singular once-in-a-generation opportunity. On top of that, given our full stack platform and breadth of capabilities, we believe any structural changes could unlock multiplicative effects as ad buyers expand adoption of our end-to-end platform, such as adding audience targeting functionality or consolidating buying via Activate and supply path optimization. In closing, our Q2 results reflect strong secular growth and highlight how our platform is meeting the needs of today's digital advertising ecosystem. While we are actively addressing the recent disruption related to one of our DSP partners and seeing early signs of stabilization, it only reinforces conviction in our strategy to diversify demand and revenue streams and invest in the highest growth areas. We're building for what we believe will be one of the largest market shifts our industry has seen in years. As a programmatic ecosystem evolves, customers are demanding performance, control, and transparency, all of which is increasingly dependent on AI. We've built a platform that gives buyers and publishers choice and independence. We have the team to deliver, and we are making the investments. I'm confident that we are building a stronger, more sustainable growth business that creates long-term value for our customers and shareholders. I'll now turn the call over to Steve for the financial details and outlook. Thank you, Rajeev, and welcome, everyone. We delivered a great second quarter and exceeded both revenue and adjusted EBITDA guidance. Driving this performance were secular growth areas, CTV, and emerging revenue. We ended the quarter with strong margins and healthy free cash flow. We have made significant progress in transforming our business, and as Rajeev discussed earlier, we are accelerating our efforts. We proactively began evolving PubMatic several years ago from an SSP provider to an end-to-end platform. This evolution has significantly increased our total addressable market, and we've accelerated growth in key secular areas and improved our profit mix. Today, I will briefly comment on the second quarter highlights, which underline our confidence in our go-forward strategy. I'll then spend the remaining time outlining our second half plan, anticipated changes, and how it flows through to our outlook. Starting with the revenue highlights, omnichannel video revenues grew 34% year -over- year and represented 41% of total revenues in the quarter. CTV revenues increased by over 50% year -over -year for the fourth consecutive quarter and represented approximately 20% of total revenue in the quarter. Emerging revenue streams more than doubled year -over -year and accounted for 8% of total revenue in the second quarter. Within this category, Connect, our curation and data business, continued its rapid revenue growth trajectory, growing over 100% year on year as publishers and buyers prioritize sell-side targeting through a more controlled and transparent environment. Our strong momentum is being driven by expanded AI product capabilities and expanded sales team. Revenue from display was flat year- over- year, a significant improvement from Q1's year-over-year decline of 10%. As a reminder, we lapped a sizable DSP headwind in the second quarter, and as we had anticipated, this DSP spend returned to year-over-year growth in July. We processed approximately 78 trillion impressions in Q2, which was 28% higher than last year and a 4% increase versus Q1. I want to give a little more color on the composition of these impressions to address concerns around AI search traffic as it relates to our business. Nearly 60% of all of these impressions were CTV and mobile app, which are unaffected by AI search. The remaining impressions are largely from web-based premium publishers, which are primarily accessed via direct navigation rather than search. Additionally, with our expanding publisher and streaming partnerships, we have growing access to more high-value traffic from which to choose and process. With respect to Q2 ad spending in aggregate, the top 10 ad verticals grew in the mid-single-digit percentages year -over -year. Health and fitness, technology and computing, travel, and arts and entertainment each increased over 20%. We saw softer trends for shopping, automotive, and business, which declined by single-digit percentages. On a regional basis, EMEA and APAC revenues grew 18% and 7% respectively, while Americas declined 1%. Dovetailing with Rajeev's comments, we also made progress diversifying DSP spend across our platform. In the second quarter, we expanded the share of spending from DSPs outside the top five as spend from performance marketers and mid-tier DSPs grew over 20% year -over -year. Turning to profitability, our robust leverage cost model highlights that when we meet or beat our revenue targets, we deliver high incremental flow-through. Our revenue outperformance and continued focus on efficiency enable us to significantly exceed the upper end of adjusted EBITDA expectations by over 15%, inclusive of a significant FX headwind. Q2 adjusted EBITDA was $14.2 million, or 20% margin, and was our 37th straight quarter of adjusted EBITDA profitability. Included was a foreign exchange impact of approximately $2 million due to the weakening U.S. dollar over the quarter. Total operating expenses in the second quarter were $50 million, flat with Q1, as ongoing cost savings from AI-driven efficiencies funded investments in high-growth secular areas. On a year-on-year basis, we managed our total headcount growth to less than 3% and realigned our team and resources to the highest growth areas like CTV, emerging revenues, and SPO. We increased our buyer-focused sales team members by over 20% compared to Q2 last year, which helped diversify revenue and drive our quarter's top-line results. Q2 GAAP net loss was - $5.2 million, or - $0.11 per diluted share. Moving to cash and our capital allocation, we have a healthy balance sheet and generate positive cash flow, which provides financial stability while at the same time allowing us to consistently invest for revenue growth. Over the last four years, since Q2 2021, we have produced approximately $350 million in net cash from operations and more than $180 million in free cash flow. In the second quarter, we generated $14.9 million in net operating cash flows and free cash flow of $9.3 million. We ended the quarter with $117.6 million in cash and marketable securities and zero debt. Given the strength, we continue to deploy our capital to maximize shareholder value. Since the inception of our repurchase program in February 2023, through the end of Q2, we have bought back 12.2 million Class A common shares for $178.2 million. We have $96.8 million remaining in our repurchase program authorized through the end of 2026. To recap, through the first half of the year, our results came in well ahead of our expectations, driven by CTV, growth in sell-side data targeting, and Activate. We added new publishers and DSPs to the platform, continued to scale commerce media, and are seeing significant growth in Connect. Looking to the second half of the year, we are confident that we will continue to see growth in these secular areas. Our end-to-end platform, SPO, and recently launched AI-driven solutions are helping customers scale their ad businesses while streamlining their operations. At the same time, beginning in July, we saw a headwind emerge from another top DSP buyer, which recently made platform changes. As a result, we saw a notable drop in spend in July from this DSP, which has stabilized in August. Given the scale and complexity, we anticipate it will take us several months to iterate and optimize our activity with this DSP. Outside the top five DSPs, all other DSP spend increased over 30%. To successfully navigate this headwind and to accelerate the key priorities that Rajeev outlined, we are well positioned both in terms of our capabilities and financial resources. We have a highly disciplined team focused on driving incremental cost efficiencies led by an AI-first strategy. We will optimize our existing resources and apply them to where we can achieve accelerated, sustainable revenues. Our financial discipline, combined with our operating capabilities, provides a strong foundation to deliver on our priorities. Turning to our outlook for the third quarter, we are taking a conservative approach as it relates to the current impact from the large DSP and the continued uncertainty in the macro environment. Our July revenues came in slightly below last year, and we saw some sequential weakness versus June in several consumer discretionary ad verticals. We expect Q3 revenue to be in the range of $61 million- $66 million. As a reminder, Q3 last year included approximately $5 million in political advertising, or 7% of revenue. We expect Q3 operating expenses to be relatively flat with Q2 as we realign resources and work aggressively to diversify our DSP spend and deliver continued growth in key secular areas. We expect our Q3 adjusted EBITDA to be in the range of $7 million- $10 million, which also factors in a $1 million + incremental impact of continued weakness of the U.S. dollar. We are maintaining our full-year CapEx projection at $15 million, which is a year-over-year reduction made possible by optimization efforts and cost-saving measures. In closing, in Q2, we delivered strong growth in key secular areas, continued investing for long-term growth, and benefited from our robust operating model. While our outlook includes a reduction in ad spend from one of our top DSP partners, the underlying health of the business remains strong while we mitigate the impact. We are optimizing resources to accelerate our key priorities that include diversifying DSP mix and expanding investment on the buy side, growing CTV, scaling emerging revenue streams, and integrating AI across our tech stack and operations. We have a healthy balance sheet and generate positive cash flow and are confident in our long-term strategy to drive durable, accelerated growth, increase profitability, and maximize shareholder value. I will now turn the call over to Stacie for questions. Thank you, Steve. As a reminder, you can ask a question by raising your hand located on the dashboard. If you're on your phone, please press star nine. In the interest of time, we ask that you please limit your question to one and one follow-up. Our first question comes from Matt Swanson at RBC. Please go ahead, Matt. Hey, guys, thanks for taking the question. Rajeev, I know sometimes you can't give us all the details, but anything else you can kind of tell us about the nature of the change from the DSP just because we weren't hearing this from some peers? Also, it sounds like drop in July, stable in August, what the process is of doing the iterations to optimize activity. Steve, if you could just kind of give us the balance between the DSP and the macro and how you were thinking about guidance, that'd be great. Thank you. Yeah, thank you, Matt. Beginning in July, we saw a headwind emerge from a top DSP buyer, which recently shifted a significant number of clients to a new platform that evaluates inventory differently. The parameters of how they value inventory have changed, and we are working to optimize the inventory that we send this DSP accordingly. In addition, for some of our SPO partners, they did not realize until after the changes were made that their SPO strategies were no longer implemented. As a result, they need to reimplement their SPO settings on this DSP's new platform, and that process takes time. Accordingly, we saw this notable drop in spend in July, and then we've seen that stabilize in August. Now, given the scale and complexity of our real-time platform, we anticipate that it will take several months to iterate and optimize the traffic that we send to this DSP. While we're doing this, a top priority for us is to accelerate the diversification of ad spend on our platform away from legacy DSPs. We've been making progress, but we plan to accelerate our strategy. For instance, in Q2, we expanded the share of spending from DSPs outside of the top five, with performance marketers and mid-tier DSPs growing 20% year- over- year, such as MNTN and tv Scientific and some China-based DSPs. In July, that same cohort accelerated to over 30% year -over -year. We think generally that there is significant opportunity as advertiser budgets outside of the top 250 advertisers and their old core representatives are growing significantly faster than the growth rate within that top 250. It is clear that the concentration of our legacy DSP relationships is a significant factor that's constraining our growth, and we intend to address that head-on. We'll turn it over to Steve. Sure. With respect to the outlook, Matt, the vast majority of the outlook is being influenced by this change by the DSP in July. To give you some additional color, in providing the range, the way that I look at the bottom end of the range, it assumes that the latest trends that we're seeing today continue as such, and there's minimal, but some consumer softness from the macro. The upper end of the range assumes the mitigation efforts take hold and start to improve that spend, and there is limited impact from the macro. I think the key point to note for investors is that, as a business, we are very focused on moving quickly. Obviously, we have a bias towards action. We were surprised we had limited visibility from this change, but the team is moving very quickly. As we demonstrated with the DSP change that occurred mid-last year, we worked through that. As I commented in the prepared comments, we grew that spend for the first time in July from that DSP. We're confident we're on the right track. Thank you. Great. Thanks, Steve. Our next question comes from Jacob Armstrong at KeyBanc. Please go ahead, Jacob. Thank you for my question. This is Jacob Armstrong. Justin Patterson. With SPO now at 55% of activity on the platform, can you discuss how conversations with advertisers have evolved over time? Further, how is this impacting your go-to-market approach as you invest more behind direct sales efforts? Sure. Yeah, thanks for the question. SPO, as you mentioned, has reached about 55%. The way that our conversations are going are really going deeper in terms of how can we solve more of those advertisers' and agencies' problems. The challenges they face are around transition away from cookies into logged-in users or identity, more performance-based solutions. They've got to demonstrate ROI if you're an agency to the client or within the client to a CFO. They're around sell-side targeting and curation. We see a huge shift in that sense in the market. We see a mix in terms of format growth towards CTV and commerce media. A lot of our conversations are about how can we go deeper with the technology solutions that we built, things like Activate, which we think are going to be really important to our growth trajectory going forward, as well as commerce media and Connect, our data and curation platform. All of this, I think, in our conversations is really about how to compose the right capabilities within our platform as a solution that we can hand to the buyer. I do think as we expand more into the mid-market where we do see accelerated growth, our SPO metric will be a little bit of a push and pull there because not all of those deals are going to be SPO related. They may be more related to capabilities or performance or scale of media on our platform. We may see that statistic get a little bit more volatile in the future. Thank you. Our next question comes from Shweta Khajuria at Wolfe. Please go ahead, Shweta. Okay, thanks, Stacie. Let me try two, please. Rajeev, if the lines between DSPs and SSPs are merging, based on your earlier commentary, what's your view on the evolution of the industry? Do you think that the standalone DSPs and SSPs today will offer kind of an end-to-end solution? Do you think that the creates for just standalone DSPs and SSPs are at risk? The second question I have for either Rajeev or Steve is on the specific inventory changes that caused the headwind in the quarter. Is it fair to assume that PubMatic is still one of the platforms of choice or SSPs of choice? There's just a different change that they're making. I just want to understand what exactly that means. Steve, what is the concentration of DSPs today? Thank you. Thanks. Yeah, Shweta. As the industry evolves, and specifically around a shift towards CTV, a shift towards performance, whether it's commerce media or outcomes, a shift away from cookies and towards more identity-based targeting or AI to target users, and then even with the early onset of AI in workflows, what we see is that all of these things are driving more towards an end-to-end platform. Meaning, you know, AI, for instance, works better if it's not constrained, but instead can optimize across all aspects of a transaction. That's exactly in line with what our focus has been over the last couple of years with Activate, and we're seeing great success and traction with that. As I mentioned in the script, our Activate growth, Activate activity or spend more than doubled sequentially from Q1 to Q2. I do think there is this blurring of the lines. I think we're going to see as multiple ad tech ecosystem participants focus on how to drive the best possible outcomes for advertisers, whether it's to gain more share of advertisers' wallet or, by the same token, focusing on those outcomes can drive better yield or better revenue for publishers. I think we're going to see this continue. I would just say that it's not new. We've seen platforms like Google, Microsoft with Xandr, Yahoo, and others, they've been on both sides of the transaction for some time. We think performance, but we also think transparency and control are going to be extremely important going forward. The other part of your question, Shweta, I think was around being a platform of choice. We absolutely continue to see ourselves as a platform of choice, and that's rooted in the scale of our platform in terms of the volume of ad impressions, the omnichannel capabilities that we have, all of the data sets that we have on our platform through our Connect business, as well as our global footprint and scale. We absolutely see our continued investment and growth as being a platform of choice, not only to our existing top DSP partners, as well as with the growing cohort of SMB advertisers. I'll turn it over to Steve for the other part of your question. Shweta, with respect to your question on the format mix of this latest DSP change, when we took a look at what happened in July, the majority of the impact is being felt in display, both desktop and mobile. We're actually continuing to see really positive results in terms of CTV spending. From where we have been investing and focusing our energies, we're well positioned to continue to grow and to be successful. It is a function of the areas that we focus on. The Q2 results really indicated the strength that we see in those secular growth areas. With respect to the DSP concentration, our top two DSPs represent about half of our overall spending. As I just commented, notably, while there was some pressure in display, CTV spend from both of these DSPs continued to grow in the double digits. When we step back and take a look over time, we see the concentration of these two DSPs declining as other buyers, advertisers, DSPs are upping their spend. Of the top five, a commerce DSP is growing the fastest. In July, what we saw for the first time in many years, we have a new number five DSP that we've been nurturing and growing over time and has picked up the slack. We're focusing on diversifying the DSP mix, given the timeframe and impact that just happened a couple of weeks ago. We have some near-term headwinds, but we're obviously very confident in our strategy and our ability to execute. As we've done before, we're going to execute through this. Thanks, Rajeev. Thanks, Steve. Our next question comes from Jason Helfstein at Oppenheimer. Go ahead, Jason. Hey, everybody. At risk of sounding foolish, I'm going to try to do this. Is the best way to understand it that this DSP platform who hit you in July did not like the way you ran the auction for display ads or how you accepted bids? Is that, in a layman's term, the best way to understand it? No, I don't think it had anything to do with auction dynamics. Rather, it's how they value inventory has changed. 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. That's a normal part of our traffic shaping platform. When we revise that, iterate that, and optimize that, I would expect to see our spend with this DSP normalize. It's because you don't make every impression available, only the ones you choose to make available. That's correct. That is how we operate with the vast majority of DSPs. I think that is true across the ecosystem, as the volume of ad impressions that we take on across the world and in different formats is such that we need to shape that for each of our DSP partners. What made it specific to this DSP? I bet you understand, obviously, if your decision on what was valuable inventory was fine for everybody else, why was it not fine for this DSP suddenly? Yeah, our view is it was precipitated by a shift in clients that this DSP has from one platform to a different platform. That shift, you know, corresponded with the quarter border. We saw that impact starting in July. All right. Just two quick ones then. Are you seeing any retaliation on the DSP side for your continued effort on Activate? No, I don't think we are. The reality is Magnite has ClearLine, so they're out there with that. We've got Activate. There are obviously buyers, whether it's Yahoo with Backstage, The Trade Desk with OpenPath, Viant with their Direct platform. I think we're seeing across the ecosystem, in response to advertiser or buyer desire for more outcomes or more performance, this shift in the ecosystem, as I described earlier. I don't think it's really specific to anything that we're doing. Just a pop for Steve, just on Shweta's question on DSP concentration. I know you don't want to give out specific numbers, but if you just say, like, at this point, X% of revenue is coming from DSPs buying display, and you just think about who the biggest buyers are, is there just a way to kind of quantify, like, you know, have we gotten past the point of concentration risk? We obviously had the issue with that DSP end of last year, right? Last year. I guess just how should folks, like, get comfort that they shouldn't worry about DSP concentration risk on display? It's a process that we've been working on and undertaking for some time. The good news from our perspective, desktop display, a legacy format, is now roughly 20% of all of our revenue, down from 30% approximately two years ago. We're definitely moving in the right direction, and it's a function of where we're investing and what advertisers, buyers want. The reality is we still have a significant amount of display, but that's sort of, let's call it, roughly flat. As I shared, in the second quarter, our display revenues were flat year -over -year. CTV emerging revenues doubled. It's a shift over time. When you look at the specific DSPs within what they're buying, it's absolutely shifting to the faster secular growing areas. At the end of the day, advertisers want to touch consumers wherever they are. It doesn't mean display is going to go away, but it's going to grow at different rates. Yeah. Maybe I can just briefly add to that, Jason. It's clear that it's really critical for us to diversify our DSP mix. We called out MNTN and tv Scientific as two examples of ad platforms. We're bringing new SMB dollars, small medium business dollars, to our platform, China-based DSPs. I think it's also maybe useful to call out as an example, Amazon is a significant relationship for us, both as an inventory provider as well as a DSP buyer. We previously shared that we are one of three SSPs in their certified supply exchange program. On the sell side, we monetize Fire TV app inventory from almost a dozen different streaming apps. We've been monetizing that inventory for many quarters now. As Amazon is scaling their ad business, we are scaling with them. In fact, in June and July, our Amazon revenues grew very healthy double digits. All right, thank you. Our next question comes from Matt Condon at JMP. Go ahead, Matt. Thank you for my questions. My first one is just as you focus on building more and more buy-side direct relationships and you think about Activate, can you just talk about what the differentiation of PubMatic is compared to some of those other large SSPs in the market? Sure. Yeah, I think the key focus with Activate, and by the way, a lot of what we do is about enabling a buyer to transact through their DSP of choice or through Activate. For instance, we launched earlier this year AI-powered curation, where a buyer can come in and, you know, using simple text chat or prompt, they can configure audiences using dozens of different data providers. They can take that deal ID and they can run that in any DSP of their choice or in Activate. What we're focused on with Activate in terms of differentiation is how to create a much more efficient path for advertisers to be able to improve the outcomes from their business while at the same time realizing transparency and control. What I mean by that is in today's ecosystem, you know, with DSPs and SSPs underpinning most of the transactions, there is this, you know, traffic shaping where SSPs have to determine which impressions to send to a DSP. There's latency, there's hops, there's discrepancies that occur between platforms. By unifying all of this in a single platform, we're able to significantly simplify the transaction and deliver better outcomes. That's a key part of what we're focused on with Activate. At the same time, we're also focused on giving transparency and control. The buyer can come in and make sure they know exactly what inventory they're buying, you know, what does the fee kind of footprint look like, and then be able, again, to measure those outcomes. That's where really we're seeing significant traction in the growth of Activate in all regions of the world. In the second quarter, we more than doubled our activity on Activate because of those features that Rajeev just described. We are going to be accelerating the investment behind driving Activate in the coming months and quarters. I do think it's important to call out that our DSP partners, I think we're very important for them, and they're certainly very important for us. We plan to continue to work very closely with DSPs, and I think that that's a key feature of our platform and our business model. Great. Steve, just a follow-up. Just as you've built out the buyer sales force, just where are we today as far as that build-out? Is it complete, or are there more investments that need to be made in the back half of the year? Thank you so much. Yeah, we think that there's definitely incremental opportunities in the back half of the year, certainly in the mid-tier areas that Rajeev described, the performance marketers, mid-tier agencies, as well as putting more sales resources behind our emerging revenues, commerce, Connect. We're selectively identifying where we're going to have the greatest impact. As I called out, we're not doing it by adding incremental costs. We are optimizing the base that we have and putting those resources in the right area. Thank you. Our next question comes from James Heaney at Jefferies. Please go ahead, James. Great, guys. Thanks for the question. Rajeev, I just wanted to ask about generative AI and the potential risks that could present to your display business. I'm interested just to hear what you're seeing so far and why you think you're well positioned to navigate that secular shift. Yeah, absolutely. Thanks, James. We believe the exposure to our business is limited, as in single-digit percentage of revenue. If there was zero search traffic going to our publishers and we took no steps to mitigate it, as Steve shared in the script, roughly 60% of all the impressions we are processing today are for CTV and mobile app, which is unaffected by AI search. Of the remaining business, which is browser-based where, of course, search is relevant, industry data indicates that search referral traffic is roughly 15%. Given we work in the head of the market, you know, top publishers rather than the long tail, I would expect that share to be lower because most consumers are using direct navigation to get to those websites. We think, again, if you kind of run through that math, it's a single-digit percentage of revenue. There's also an offensive opportunity, which is that the growing cadre of AI search companies will likely need ad-supported business models to support the growth in their cost base and user growth. I'm not just talking about the large guys like an OpenAI or Perplexity. There are those guys, of course, but there are also B2B services, consumer AI chatbots, retail experiences. I think there's a wide canvas of probably thousands of companies in the not very distant future that will likely need ad-supported AI search or chat ad monetization that create significant opportunities for us. Great. Thanks. Maybe, Steve, just another one for you. Is there anything that you could share regarding the overall demand environment that you saw in April post-tariff announcements and how that's progressed through the remainder of the quarter? Sure. I mean, with respect to the second quarter, there's a couple of categories on a year-to-year basis that performed quite well. Technology, computing, arts and entertainment, health and fitness, and each of those increased over 20%. We did see some softer trends in a couple of areas in the second quarter, automotive and business, two notable areas, they did decline. Now, in terms of July ad spending, our total top 10 grew on a year-to-year basis. That obviously was very positive. We did see some sequential decline on a July versus June basis in a cohort that one could argue is sort of consumer discretionary, so food and drink, health and fitness, travel, arts and entertainment. It's too early to say if that's sort of a trend. As I called out, incorporated a portion of that into our outlook. We are not seeing a significant decline on a year-to-year basis. It's more on a sequential basis. Obviously, there is a lot of uncertainty out there. That's why we're very focused on keep on driving our business towards the fastest growing areas that can grow through these challenges. The other point to call out is, at the end of the day, in this environment that is uncertain, advertisers are going for performance, control, transparency. These are all strengths that we built and continue to evolve through our various product offerings. In this kind of uncertain environment, we think we're going to continue to do well and then be well positioned when this is all in the rearview mirror. That's great. Thank you. Our next question comes from Rob C oolbrith at Evercore. Please go ahead, Rob. Great. Thank you for taking our questions. I think the platform shift that you're talking about has been going on for some time. Just wondering if the triggering event in July was maybe incremental changes to that platform or a large number of your SBO customers finally making that transition or something else. Finally, any indication of a step up in activity around direct connects from that DSP? I guess the second question here would be if you could just revisit the timelines for potential recovery, both around getting those SBO instructions back up and running and optimizing the traffic shaping. If you could just repeat those, that'd be great. Thank you. Sure. Yeah, hey, Rob. We certainly saw an uptick or significant increase of this activity from the DSP causing the drop in spend in July. I can't speak to exactly what was their timeline or all the history of changes that they made, but that's what we observed on our platform, which we've stabilized but are working to improve. There are things that we need to do to shape the traffic accordingly from our platform more to the liking of that DSP, and we're heavily engaged in that process. I'll turn it over to Steve for the second half of your question. Yeah, just to quickly comment on a little bit more on that color. That DSP that made that change is growing very nicely, double digits in June, and then a notable decline, a negative year-over-year in July. There was clearly a shift on their side in terms of how they were valuing inventory, in terms of what matters to them and how their platform operates. Remind me the second part. It was. Just the timeline that you have most with the stabilization in August. Does that indicate that most of your SBO customers have sort of gotten those instructions back into that platform? Any timeline on the optimization of the traffic shaping, how you're thinking about how long that could take to sort of get back to normal? Sure. Our teams have absolutely been reaching out to all of our SBO partners, letting them know that this has happened, that they need to go into this platform and to re-upload their SBO parameters. That's just a process that the SBO partners have to do on this DSP. That's in process and happening. After letting them know, it's largely in their hands. Now, with respect to the mitigation efforts, when we saw the trend start to really decel in July, obviously, we got all the appropriate folks focused on assessing. What we saw when we had this significant change a year ago is that there's a lot of iteration and testing that needs to be done because this is an incredibly complex ecosystem. You're talking about hundreds of billions of impressions a day that we ourselves are processing. It takes testing, iterating, and then doing it all over again and seeing what works and does it meet the criteria that's been established. Our approach is we're working hard to mitigate it. I incorporated at the low end of the outlook an assumption that the mitigation efforts are relatively limited in terms of effectiveness this quarter. We're going to keep working at it. I would say that given the important size of this DSP, it's just going to take time. We are well positioned to continue to work through it. I really want to emphasize sort of the step back. This is a situation we have experience doing. The big challenge here was we didn't have any visibility in terms of the big decel. We're obviously reacting pretty quickly. Number two, we are in really healthy financial shape. We have roughly $120 million in cash, no debt. We generate free cash. We are in this for the long run, and we're confident that we're going to work through this. In the near term, we are going to double down on the fastest growing areas that we have, diversify our DSP mix, et cetera. We believe we're on the right track, and we're going to work through this. Got it. Last quick one. It sounds like CTV has been relatively unimpacted. Is the implication there that this DSP wants to see as much CTV volume as they can take? There's not really a traffic shaping element there or just anything you tell us about that. What did you mean by OCV, Rob? I just want to make sure I understand. On the omnichannel video. Oh, got it. Okay. Or CTV. Yeah, repeat the question. You're hypothesizing. Just wondering if there is potentially an implication where, you know, is traffic shaping happening in your CTV or OCV inventory, or, you know, basically is the DSP willing to take as many QPS as they can within those growth channels? No, I think the traffic shaping changes, optimization that we are doing in response applies equally across all formats, including video, you know, omnichannel video. I do think in general video is more resilient, just given that's where advertisers are shifting more of their budgets. We do see that as a secular growth driver. Got it. Thank you so much. Our next question comes from Eric Martinuzzi at Lake Street. Please go ahead, Eric. Eric, are you there? We can't hear you. Yeah, now I'm unmuted. There you go. Yeah. Let me know. Given the, you guys have seen a pretty steady progression, the percent of revenue coming through the SBO channel, I guess, is there a chance we see a step down while this reconfiguration happens? Yeah, I can take that. I think more so than this reconfiguration would just be our diversification strategy around, you know, more of the mid-market buyers, where those aren't, you know, given their size, they're not often, they're not coming in through an SBO equation. We do see that in general in the market, you know, the advertiser segment that is growing the fastest is that mid-market segment as opposed to the, you know, the top 250 or so advertisers. I think that would probably be a bigger impact in, you know, diluting some of that SBO spend, which doesn't mean we're shrinking the pure dollars, but it's just a little bit of a mixed shift. Okay. A follow-up regarding just the fact that you guys were surprised that this large partner changed how it valued the inventory you were sending it. Is there a risk that other DSPs come to this same conclusion? In other words, how close are you to these DSPs where this kind of comes out of nowhere? Yeah, I mean, in general, I think we're pretty close to these DSPs, and it's certainly our goal to be as close to them as possible. I think it behooves the DSP as well to be continuously sharing feedback with us on what they want to see more of or what they want to see less of or how their advertiser requirements and mix is shifting. I think in general, we do quite a good job of being close to these DSPs. In this case, we are reacting with limited visibility. We need to certainly look into that and figure out how we can do a better job. Thank you. At this time, there are no more questions in the queue. I'm now going to turn the call back over to Rajeev for closing remarks. Thank you, Stacie, and thank you all for joining us today. Through the first half of the year, our results came in well ahead of our expectations, driven by CTV growth, growth in sell-side data targeting, and Activate. We added new publishers and DSPs to the platform, continued to scale commerce media, and are seeing significant growth in Connect. We're seeing one of the largest market shifts our industry has seen in years play out at a very fast pace, and we're positioned extremely well given our differentiated approach. An end-to-end platform focused on performance, and we give buyers control and transparency they need in order to scale their ad business. We look forward to seeing many of you at upcoming conferences, including Oppenheimer 's Virtual Tech Conference on Wednesday, Rosenblatt's Virtual Tech Summit on August 19, and Wolfe 's TMT Conference in San Francisco on September 10. We'll also be on the road over the next few weeks in Denver and New York. Thanks, everyone, for joining us today. Have a great afternoon.