What happened

Shares of advertising-technology company PubMatic (PUBM 4.53%) popped on Wednesday after it released its first quarterly earnings update. The company went public via an initial public offering (IPO) in December, and it's already feeling the love from investors. PubMatic stock was up 22% as of 11 a.m. EST today and hit all-time highs earlier in the session.

So what

PubMatic is a sell-side advertising platform, just like better-known Magnite. And sell-side advertising is the other side of the equation from buy-side companies like The Trade Desk. Since PubMatic has exposure to a lot of high-growth industries like connected TV, its performance in 2020 was quite impressive. Full-year revenue increased 31% year over year to $148.7 million.

A businessman rides a rocket ship expelling cash exhaust over a multi-colored bar chart.

Image source: Getty Images.

Much of PubMatic's growth came in the fourth quarter of 2020, when revenue was up a whopping 64% year over year to $56.2 million. Furthermore, net income surged to $18.8 million in the quarter, an incredible 356% improvement from the fourth quarter of 2019.

Now what

With IPO stocks, it takes time to establish a track record. But I'd say PubMatic is off to a great start with this quarterly report, and it's one to watch in my opinion.

That said, management doesn't foresee growth as robust in 2021 as it was in 2020. It expects to report 34% to 41% year-over-year revenue growth in the upcoming first quarter of 2021, with 21% to 24% growth for the entire year. Interpreting these projections, growth should decelerate throughout 2021. It will be interesting to see how Wall Street responds to those future reports.