Hello, everyone and welcome to PubMatic's First Quarter 2024 Earnings Call. My name is Kelsey and I will be your Zoom operator today. We thank you all for your attendance today and as a reminder, today's webinar is being recorded. I will now turn the webinar over to Stacie Clements with The Blueshirt Group. Stacie, over to you.

Good afternoon, everyone, and welcome to PubMatic's earnings call for the first quarter ended March 31st, 2024. 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. Today's prepared remarks have been recorded, after which Rajeev and Steve will host live Q&A. [Operator Instructions] 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 the 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, including our most recent Form 10-K and any subsequent filings on Forms 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 7, 2024 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, 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. And now, I will turn the call over to Rajeev.

Thank you, Stacie, and good afternoon, everyone. We delivered another outstanding quarter, which highlights the growing need for sell-side technology for digital advertising, our strong customer relationships and our breadth of solutions, resulting in growth across all formats and channels. Revenue and profit significantly exceeded our expectations, marking multiple quarters of accelerating revenue growth. Revenue grew 20% over Q1 last year. Excluding revenue from Yahoo!'s owned and operated inventory, year-over-year revenue growth was 25%. Adjusted EBITDA margin was 23% and we generated over $16 million in free cash flow. I'm incredibly proud of the team's hard work and focused execution, which has positioned us well for the growth opportunities that lie ahead. We built an integrated platform that is flexible and efficient so we can meet the needs of a growing customer base as we expand our total addressable market. We see continued momentum in the business, evidenced by adoption of new solutions and growth in customer count as clients across the ecosystem choose to build their ad businesses on PubMatic technology. With these strong results continuing into April, we are raising our full year guidance. Adding to our confidence is the increasing importance of being positioned on the sell-side as the advertising ecosystem evolves. The need for deep and specialized technology to monetize ad inventory and audiences is increasing at a rapid pace. New opportunities, including changing privacy regulations, the onslaught of new ad inventory from CTV and Commerce Media and the increasing need for buyers to control how their ad budgets are deployed are best addressed on the sell-side, which sits closest to the consumer. PubMatic is unique. Our focus on our owned and operated infrastructure and strength in organic innovation results in robust technology that efficiently connects buyers and sellers. We've spent 17 years building differentiated solutions…

Thank you Rajeev, and welcome everyone. We once again exceeded guidance on the top and bottom line, led by strong execution and continued momentum in our business. Several factors drove accelerated year-over-year revenue growth of 20%. Monetized impressions increased for every format and channel, in aggregate by 17%; CPMs were stable across formats and channels; and emerging revenue streams, comprised of new products, data partnerships and enterprise software integrations, contributed approximately 2 percentage points of growth in the quarter, on track to double their contribution by the end of the year. This strong outperformance also drove incremental margin expansion, with adjusted EBITDA margins of 23%, once again demonstrating the strength of our business model which is built on owned and operated infrastructure, innovation investments to deliver differentiated products, and operational excellence. Compared to Q1 last year, we doubled our adjusted EBITDA and tripled our free cash flow. Breaking Q1 down by format and channel, which includes Yahoo unless otherwise called out: omnichannel video revenue from CTV, mobile and desktop devices grew 33% over Q1 last year, driven by an increase of monetized impressions by more than 50%. As we continue expanding our roster of new customers and growing our share of wallet with existing customers, we see a long runway of opportunity in this high value channel. We also saw continued strength in display, most of which was via the mobile channel. Display revenue grew 10% over Q1 last year, led by a double-digit percentage increase in monetized impressions. Excluding Yahoo owned and operated inventory, display revenue grew 17% year-over-year. On a global basis, every region grew double-digit percentages in the first quarter. As mentioned in prior earnings calls, our results include the revenue headwind in our business from Yahoo. Excluding revenue from Yahoo's owned and operated inventory, revenue grew…

[Operator Instructions] Our first question comes from Matt Swanson at RBC.

Yes, congratulations on the quarter. This might be a little bit of an SPO question, but I kind of want to phrase it differently and go back to an idea we used to always talk about, which is omni-channel. So as new formats like commerce media and CTV continue to gain scale. Could you just talk a little bit about customers focus on being able to get these things back to a single pane of glass, right, as they get bigger and more part of their ad buying process? And then I guess the importance of the work that you're doing at PubMatic to kind of redefine yourself for this expanded definition of omnichannel.

Sure. So I can take that. So absolutely, I think what we see is that complexity for the ad buyer, right? So whether that's an advertiser or it's an agency, that complexity is growing, right. And you've got privacy regulations, you've got whole classes of new media, impressions and data coming online, like CTV and commerce media that you mentioned. And buyers are increasingly trying to assert their control over the buying process, right, meaning how do they buy, what inventory, what signals are they using, what are the performance or brand KPIs of those campaigns? And doing that across multiple platforms is very challenging for the brands, right. It creates a lot of operational complexity. Their teams have to learn a lot of different user interfaces. Enforcing something like a frequency cap when you have siloed systems that you're working in is difficult, workflow, data aggregation, performance measurement, all of these things are much harder. And so we are finding great benefit, as evidenced by the SPO metric at 50%. We're finding great benefit for buyers and being able to consolidate, lean into fewer partners, manage the workflow, manage the data, manage the targeting, and that's exactly where we are focused. And I think what we're continuing to see, which we've been seeing over the last couple of years, but we're going to continue to see is a consolidation of the ecosystem towards fewer, bigger platforms that can provide the control, that can provide the data, that can provide the workflow capabilities. And I think a particular note, which we're calling out here in the earnings comments earlier is that -- that capability to deliver on the needs of buyers is shifting to the sell-side of the ecosystem. And we talked already about what are some of the drivers of that? But privacy regulation is certainly one of them, where data is more and more encapsulated on the sell-side of the ecosystem, and of course, primarily as an SSP. But now, of course, doing more and more with buyers via SPO and Activate, we're able to bridge from the buyer into the sell-side of the ecosystem very deeply.

Maybe picking up right on SPO, obviously, impressive to get to 50% this quickly, but also thinking about that long-term view of 75%. Could you just kind of talk about; one, is that expansion going to imply moving, I mean, not down market but to smaller enterprises, or is it just even more spend from the largest enterprises? And then I guess, how does that kind of dictate how you're thinking about maybe R&D and where your costs are going, if it is more of an emphasis on those largest customers?

Sure. Yes. So there's, I think, 2 key ingredients. One is, further share of ad budgets within buyers that were already penetrated into, and then the second is of course going after entirely new buyers. And so on the first, obviously, we've been doing SPO now for, I think maybe about 6 years. We've grown, as you said, that metric quite a bit. We were in, I think the [ 30-ish ] percentage a year ago, up to 50% now. But there's still plenty of runway inside of the large agencies and advertisers that were already penetrated into. And so when we look at share by ad format, by geo, by type of publisher, there's still plenty of runway inside of those existing customers. And then the second piece, which is a key area of investment for us, is expanding our sales team that is covering SPO opportunities is to go after independent agencies and a bigger roster of brands. And the bigger roster of brands is still very much large brands. I think where our sales team was historically, we didn't have enough bandwidth to cover as many brands as we wanted to. One of the key things that the industry report I think was the ANA, Association of National Advertisers report last fall highlighted is that only about 30% of large brands have engaged in Supply Path Optimization. So that speaks to the opportunity that for us is underpenetrated, that remains in net new brand acquisition for us.

Our next question comes from Ian Peterson at Evercore.

Two quick questions. First one, I know the Q2 guide implies a material decel to 12% year-over-year growth at the high end and softer than historical seasonality despite the continued into comps. Can you help us unpack this? Steve, I know you called out the potential impact from the DSP changes. Have you sized this potential impact? And is there any other puts and takes embedded in your Q2 guide that we should be aware of? And secondly, for the raised full year guide, can you help us unpack your confidence in the back half of the year? Besides the timeline for cookie deprecation getting pushed out, are there other factors that give you more confidence, maybe from emerging products?

So when we put together our Q2 guide, as we typically do, we focus on providing an objective viewpoint and we took a look at the balanced view of opportunities and challenges. And as you point out, I called out a headwind that we anticipate emerging latter part of the second quarter related to a single DSP making bidding methodology change. And so that obviously does factor into our adjusted guide. And I'd say the way to think about it is our underlying growth has been very strong, very strong Q1, continued into April and we've tried to balance it out for the remainder of the year. And so the Q2 reflects a partial quarter impact from that DSP bidding methodology change and then a full quarter effect in the third quarter and fourth quarter. But what I call out is that in the background, you have strong growth across every format and channel. And so we anticipate, being able to offset that over the balance of the year. And so some of the things that we're very confident about in the second half is the SPL momentum. Of course, that's been a long-term growth driver for us. We are expanding our team as Rajeev just called out to go after incremental opportunities both within agencies and large brands, but also new SPL buyers. We're seeing really positive progress in our emerging revenue opportunities. We commented on the prepared comments, OpenWrap, Connect in the quarter that added a couple percentage points of growth. We anticipate that continue to develop in the second half. You've seen some of the very important deals that we've signed recently, Instacart, Klarna, GroupM. We anticipate those deals will add to the top line later in the year. And then, of course, as the Presidential election comes into focus, 6 months away, we're starting to see political spend starting to firm up. So when we put together our full-year outlook, we saw strong underlying growth, an offset related to this headwind. But overall, on balance, we're raising our full year guide to 12% at the midpoint.

Our next question comes from Justin Patterson, KeyBanc.

Stacie, Justin has disconnected.

Moving on, we'll take next question from James Heaney at Jefferies.

Can you just walk through just what this DSP bidding change really is? I just don't fully understand at a granular level, how it impacts the business. So if there's any more detail you could provide on that that would be super helpful.

So the DSP in question, they're converting all of their auctions to first price auctions. And historically they've used a combination of first price and second price auctions. And these changes will make their methodology consistent with what the rest of the industry does. And the rest of the industry has made this transition really over the last several years. So after this change from this DSP, nearly 100% of auctions on our platform will be first price auctions using a consistent methodology. Now, as Steve called out, we operate a real-time auction. And so based on our experience in managing this kind of a transition with other DSPs in the past, we anticipate that the bid prices from this particular DSP will be lower given their changes. But those lower bid prices will be partially offset by other DSPs who should see an increase in impression wins because they already -- had already moved to this methodology. And then further, we anticipate that given the strong underlying growth across ad formats, channels and regions, as well as the growth of our emerging revenue streams, that we will offset this headwind throughout the course of the year.

Just 1 more on Activate. Would love to hear just the momentum you're seeing on that business. And I'm also curious like where you feel we are in that transition from direct insertion order into biddable. Curious kind of where you see that journey.

I'll just briefly comment on that second part and then get more broadly into Activate. I think we're still quite early, so that journey is definitely underway, but I think still a lot of runway ahead of us. So in general, with Activate, we're really excited about the progress that we're making. And so there's a clear progression of steps. When you roll out a new product like Activate, we've trained our sales team to talk about it at scale. So that's in every region, across multiple customer types, agencies and advertisers. We've gotten very strong and positive feedback in terms of our vision and the initial capabilities. Our vision is definitely resonating with the problems or challenges that buyers have, that prospects have, and they do trust us to solve these challenges for them given our track record of success with supply path optimization. I think the commercial and contractual process is also resonating. And as a result, we're signing up advertisers and agencies at a pretty good pace and we've completed deals in every region around the world. Now what we're also learning is that inside of large agencies and large advertisers, this is very much an enterprise initiative. And so who we are pitching the value prop of the product into can be different from who are the hands on people on the keyboards that are setting up deals and managing the actual campaign spend. And so it takes time to get all of the teams on board fully up to speed, fully educated on how to use the product. And so there are things that we are looking into to try to accelerate that which we are in the process of working through. But at the same time, what I would also add is just that we see business acceleration around SPO even if Activate isn't in place. And that's because customers know that they can do more with us over time, right? And so as a result, they tend to pull Supply Path Optimization levers to move more business to us and grow the mutual relationship, even if they're not using Activate today and they plan to in the future, or if they don't have any current plans to use Activate, but it's something that creates optionality down the road.

Our next question comes from Mauricio Munoz at Raymond James. [Operator Instructions] Our next question comes from Mark Hagen at Lake Street.

So, just a lot of the stuff I had has already been addressed, but just wondering if there's any promising verticals that you're seeing, whether new or existing, the next, call it 6 months, year.

Steve, you want to take that from the ad vertical perspective? Any perspective you can share.

Sure. I'm happy to. Let me just sort of preface to the comments. I mean, we've seen a pretty sizable shift over the last year in terms of just a more constructive ad environment. We saw that in the fourth quarter that has continued into the first quarter and April. And the good news from our perspective is, it's across the diverse group of ad verticals that we have. We [ commented ] on overall the top 10 and the first quarter grew 20% year-over-year. Within that significant majority of that group, grew close to 30%. So strong recovery across the board. And the call outs that just from a relative basis year-over-year shopping continues to perform well. It was definitely under duress in 2023 and that's recovered, business strongly performing, personal finance, food and drink, et cetera. So we have a diverse set of verticals that help us propel our revenue growth. Now, another component to think about is, as we go into these new areas that Rajeev called out in terms of Roblox, Instacart, et cetera, we are exposing ourselves to more and more advertising types. And that is going to be very helpful to us in terms of our diversity of our business, but also just the long-term tailwind of opening up new markets for us.

Our next question comes from Zach Cummins at B. Riley.

Can you potentially dive a little bit into the investments you're making on the SPO side, specifically expanding the sales efforts there? Can you talk about the progress you've made on hiring on that side and when you expect those investments to really start translating into improvements in the P&L?

Sure, I'll take the first part of that. So far, we've increased our SPO focused team by 20% on a year-over-year basis in the first quarter. So, absolutely making headway in terms of bringing on new team members. It is a process where we are bringing on highly skilled, experienced salespeople. So there's not what I would call a long lead time to get them up and running. And also it reflects the nature of the sale. We have a lot of connectivity into the major agencies, large brands, and so it's really about getting more coverage. And so we have a clear roadmap, a team focused on it. And so we continue to be right on track with our expectations. When we went into the year, we thought, based upon the opportunity and the momentum that we really wanted to put our foot on the accelerator. And so overall, our game plan is to increase this team focus on Supply Path Optimization by 50%. And so we're executing that plan and our expectation is that, there'll be a quarter or two of ramp up, but we should start to see some of the incremental benefit from these investments later this year. And of course, as the quarters to come 2025 and beyond.

And just my 1 follow up is really around product development. Maybe most of the new solutions over your history have really been through organic development. So just curious of how you're thinking of allocating ongoing investments into the organic development side versus maybe potentially looking at M&A to further expand your platform.

Yes, I can take that. And then, Steve, obviously, feel free to chime in. So, I mean, for sure, our primary focus is on organic innovation and organic growth. So, we have done, as you noted, a couple of acquisitions, maybe over the last 8 to 10 years. But while we remain open to the opportunity. Right. And constantly on the lookout for things that might be a good fit for us. As I mentioned, we're at now 500 people just crossing that mark in product management and engineering. So we are really built to focus on understanding from our customers what are the needs and opportunities, and then building organically at a very rapid pace in order to deliver those needs. So I think that's where we'll see the vast majority of innovation come from. Steve, anything to add?

I would say that from our perspective and when we think about how we utilize our balance sheet and we have a very targeted capital allocation strategy to ensure that we have investment dollars for organic growth. But we also have incremental dollars for M&A if it makes sense. Our typical strategy has been, if it can accelerate our roadmap development, we'll definitely take a hard look at it. And then the final tranche of our capital allocation strategy is to share buybacks, which we've been very successful over the last year plus. So overall, we feel like we're in a excellent position to make these choices in a very considered data-driven way. But as Rajeev called out, we've been very successful in organic innovation, certainly leveraging AI in the last year. And so we anticipate new, that becoming the main engine going forward. But we won't necessarily say no to an appropriate M&A opportunity.

Our next question comes from Jason Helfstein at Oppenheimer.

You came in nicely above the revenues, like 8%, $5 million or so. In case I missed it, did you call out, was there a specific catalyst or a broad base? That's the first question.

So I would say when you reflect on Q1, I think the thing that jumps out is that it really was across the board. Our team, our business was fired in all cylinders, all formats, all channels grew nicely. In terms of the omnichannel video business that grew 33% year-over-year display, including the Yahoo headwind grew 10%. So overall, very pleased with the underlying growth of the business. And of course, we hit a major milestone with SPO at 50% of overall activity. And into the second quarter that momentum continued double-digit growth for April. And underpinning all of this has been our long-term efforts in terms of innovation and building differentiated solution that continues to resonate with existing and new customers.

And then, just to follow-up I guess, we've talked about last quarter and I guess inter quarter, just some of the investments you're making in headcount, are we kind of at that rate, or are you thinking about kind of still material increases in headcount as you move through the year?

So for the first quarter, our overall headcount was up a little over 10%. And our game plan for the full year is to be about 11%, 12%. So by and large, we're on the track that we had set out to do. But I would say just from a timing perspective, you'll see some of that investment accelerate Q3, Q4, because of the normal cycle of bringing people on recruiting, et cetera. But overall, right on track with our goals. But I would expect some acceleration into the second half.

Yes. And maybe I can just add Jason, a little bit of context on the headcount investments. They're really focused on where the market, the industry is growing the fastest. And based on all of the product innovation work that we've been doing over the last couple of years, we see tremendous upside opportunity. So, for instance, last year we had 2 big product launches with Activate for SPO and Convert for commerce media. And so there's a lot of work to be done to now that we've validated those products. We've gotten great feedback from customers. Obviously, you saw, Klarna and Instacart as 2 examples on the convert front, SPO at 50% multitude of signed Activate deals now. So what's happening is as we engage more with customers, they're coming up with additional product requirements that they'd like to see. And so we're investing behind that opportunity, and then we are also investing in the sales team to go out and create more opportunities and convert those opportunities into closed deals. So we view it as all both growth -- both revenue as well as profit accretive over the medium to long-term.

And 1 thing I'd just like to add to Rajeev's comments, and because I think it's important for the group to understand, we've had some major new customers announce in the last couple of months, Instacart, Klarna, et cetera. And the reason why we're so positive about these is that it helps, it identifies a clear path to do what we've done in the past and that's land and expand, bring these customers in and then sell them the portfolio of opportunities products that we have. And the reason why that's important from a financial perspective is that all of these products are on top of our unified platform. And so these kinds of deals help us get more utilization of our platform and ultimately will help us expand our margin. For example, in the case of Instacart, we earn a data fee as well as our core SSP fee with GroupM, we anticipate continued acceleration of SPO spend, which is further driving utilization. So overall, the journey that we're on is to bring on customers that where we can really land and then upsell the portfolio of offerings that we have.

Our next question comes from Mauricio Munoz of Raymond James.

Yes, I just want to go back to the SPO results and objectives. Rajeev, you spoke about these on your prepared remarks, but maybe if you could please expand on the drivers of the 1Q upside. I'm particularly interested in contributions and traction from Activate this quarter. And then maybe while we are at it, you could speak about the competitive dynamics. We're seeing some DSPs commenting on some traction, trying to cross these SSP, DSP demarcation line. So if you could provide some color on that, that would be helpful? And then I have a follow up.

So let me try to get to all of that. If I leave out any part of your question, please remind me, and I'm happy to add to it. So I think the first thing, just from a context perspective is that from what we see in engaging with publishers and buyers, the importance of deep technology on the sell-side of the ecosystem is going up at a pretty dramatic rate, and there's a couple of drivers of that. One is certainly what's happening with privacy regulations, cookie deprecation timeline, obviously with chrome, that's just the latest, but we've seen similar moves by other browsers or other operating systems. And so data on the sell-side of the ecosystem is now being more and more limited in terms of the ability to transmit it to the buy side of the ecosystem, and so that's 1 driver. You have a lot of new media coming on board, high value media, in CTV, in commerce media, where buyers want to have a more efficient way to transact when these CPMs can be $10, $20, $30, $40, $50 as opposed to $1 and $2 display ad impressions. And then the third is that buyers are increasingly asserting themselves in terms of controlling how ad budgets are spent. And that can be for reasons of differentiation, for performance. They don't want a monopoly player in the industry to control both the sell-side and the buy-side of the ecosystem. So all of these things are driving up the importance of technology on the sell-side and that's exactly one of the primary opportunities we're going after with supply path optimization and Activate. And then to your Activate question, Mauricio, so what we are seeing there is that buyers and sellers alike, they want a more efficient way…

Yes, yes. We've seen some DSP also talking about gaining some traction on crossing over to...

Yes.

Yes. And we've seen that mainly. Well, okay, I'll give you the floor. Yes.

Yes, yes, absolutely. So I absolutely understand that. And I think the significant advantage that we have is that we've been building publisher relationships now for 17 years. So if we get 1 buyer to leverage our platform, they can access all of the media, all of the inventory, all of the audiences that we've been building over 17 years. I think when you approach this problem from the buy-side of the ecosystem, you have many buyers maybe using a particular buy-side platform, but the breadth of publisher inventory is quite limited, right. And so that DSP or buyer interface, they have maybe been working on plugging in inventory for the last 6 months, 12 months, 18 months. And so the scope of inventory, the scope of audiences, particularly when you think about a variety of ad formats, a variety of geographies that can be very limited. And so what we're seeing that resonates very strongly with buyers is we can go in and say, hey, all of the types of media that you might want to buy all over the world, we have that available inside of PubMatic and inside of Activate, and that's available today. And so I think that's a very compelling value proposition.

And if I can squeeze in 1 more, it looks like you're on full steam to expand from your historical focus on the top 5, 6 agency holdcos. And this is related to SPO as well, perhaps into other smaller independent agencies as well as directly with brands. I think you articulated the sort of investment required to do that, mainly in the form of headcount additions. But how should we think about the margin profile from revenue contributions from those somewhat smaller agencies and brands as you bring that cohort into the SPO fold?

Yes. Steve, do you want to take that?

Yes. Happy to. So from our perspective, we already get a significant amount of leverage just given sort of the centralized nature of our GTM organization. We have a few people, covering relatively large [ swaths ] of customers. And so we're going to apply the same model. We're not going after every SPO opportunity. We have our ideal client profile and we're focused on that. So, we're feeling pretty confident in terms of getting the leverage and the appropriate economics from the go to market side. Now, from an overall cost of serving and dropping it to the bottom line, all of these opportunities ultimately help us fill more of the impressions that we process. And because we've already incurred the cost to process, last count, 650 billion impressions, on a daily basis, the upside is fairly significant if we can increase that fill rate. And so we see this as a very positive direction for us because ultimately they were not having to incremental processing costs. We're just monetizing more of what we already process and we're doing that in every major region. So we're feeling very good about the strategy. We're early days in the execution. And as Rajeev has commented on previously, we anticipate upside to about 75% of activity through SPO relationships. And you can see, coming through the financials, how that does benefit us not just from a profitability perspective, but also from a stickiness perspective. I shared this data about 125% net spend retention. That's incredibly powerful just in terms of revenue visibility and, stickiness and scale over time.

We have time for one more question from Justin Patterson at KeyBanc.

I just wanted to go back to the land and expand strategy. With now 77% of revenue coming from high value formats and channels, that seems like it provides a nice margin tailwind of the business. So curious how you're thinking about just taking some of that margin and driving more growth, with new customers, existing customers, versus having that margin drop through play out?

And it's something that we think about every day given sort of our strong profitability, but also strong goal imperative to keep driving the top line. And you can see the results from the last quarter. From our perspective, it's a balance. But absolutely, going into the year, we said that we're going to incrementally invest in a couple key areas. The areas that we envision to be the fastest growing around video, mobile, Supply Path Optimization in the commerce media space. So, we feel that now is the time to make those investments and we're appropriately managing those in terms of timing and the magnitude. You can see from our guidance that we still have a very robust expectation forecast for the year at 31% at the midpoint. And I would say that for us, it's really about taking advantage of the opportunities that we have and we see them emerging and we've proven an ability to innovate and then capture that opportunity. And so we're going to keep doing that and still deliver very robust margins and free cash flow.

Great. Thank you all. We're just about, or we're actually over the top of the hour, so I'm going to go ahead and turn the call back over to Rajeev for closing remarks.

Thank you, Stacie, and thank you all for joining us today. We had a strong start to the year with continued momentum into April. This, along with the planned investments this year in high return areas, gives us confidence to raise our full-year guidance. Content creators, ad buyers, data partners, commerce, media networks, they're all choosing to build their ad tech stacks on PubMatic. Our platform offers efficiency and control across the digital advertising ecosystem, resulting in higher CPMs and increased advertiser ROI. And our logo list continues to grow, fueling greater access to ad dollars, data and high value inventory. We'll be out on the road over the next month and we look forward to seeing many of you then. Thanks and have a great afternoon, everyone.