Nine-year-old PubMatic insists it is on solid financial footing. Four months ago it disclosed a net revenue run rate of $130 million, and said its GAAP net revenue had grown 90% from 2013 to 2014. Further, its headcount has actually risen 20% since Q3 2014 (in light of which Goel characterized the recent cuts more as a realignment than a reduction). And the company turned a small profit in each of the last two years.
"This is how many businesses evolve in the space," he said. "Three years ago mobile was so new we needed specialized resources to understand it. Then it became big enough we had to mainstream it. Every customer has to focus on mobile."
But it's also clear that PubMatic has pulled back somewhat on its previous growth plans.
Less than two years ago, PubMatic had planned to increase its headcount to 900 in the run up to a public offering. That was before sources of funding dried up for late stage ad tech companies and the public markets punished a number of ad tech stocks. Most publicly traded companies in the sector are down substantially from their trading prices six months ago, as The Wall Street Journal noted Friday.
The response from many large companies has been to implement cost controls. Rocket Fuel was the first big player to do so earlier this year, laying off 11% of its workforce, or 129 people, as part of a $30 million cost-cutting effort.
PubMatic's cuts are an order of magnitude smaller than Rocket Fuel's, but may speak to the same retrenched mindset, where sustainability matters more than raw revenue growth.