Shares of PubMatic (PUBM -1.51%) charged sharply higher Wednesday, surging as much as 33.2%. As of 11:55 a.m. EST, the stock was up 28.7%.
The catalyst that drove the digital advertiser higher was third-quarter financial results that came in above even the most bullish estimates.
PubMatic delivered revenue of $58.1 million, up 54% year over year, allaying investor fears that its growth story might take a hit. Furthermore, the company delivered earnings per share (EPS) of $0.24, which soared 140%. This marked the fourth consecutive quarter of growth over 50% and net margin over 10%.
To give the top and bottom-line results some context, analysts' consensus estimates were calling for revenue of $52.5 million and EPS of $0.10, so this was by all accounts a blowout.
Like many companies in the digital advertising space, the warning bell sounded by Snap earlier this quarter had investors on edge, fearing the one-two punch of Apple's new privacy measures, coupled with Alphabet's plans to phase out Google's ad-tracking cookies, would stunt PubMatic's growth.
However, not all digital advertisers are created equal, as investors recently discovered when The Trade Desk reported explosive results earlier this week.
As a result of PubMatic's continued strong growth, the company provided its fourth-quarter forecast, which was more robust than expected, while simultaneously raising its full-year outlook.
PubMatic is guiding for fourth-quarter revenue of $75 million, which would represent year-over-year growth of roughly 34% at the midpoint of its guidance. It also raised its full-year revenue forecast to about $226 million (up from $207 million), which would represent growth of 52%.
The stock isn't cheap in terms of traditional valuation metrics, with a price-to-sales ratio of 11. Thus far, however, investors have been willing to give the company a pass, as the result of PubMatic's track record of strong growth.
Additionally, the company's beat and raise -- beating analysts' consensus estimates, while raising its full-year guidance -- was enough to send PubMatic stock soaring.