Impact of DSP Platform Change and Traffic Optimization Efforts
In July, PubMatic experienced a notable drop in spend from a top DSP due to platform valuation changes, which stabilized in August.
The company is actively working to reimplement SPO settings on the affected DSP's new platform, a process expected to take several months.
Management emphasized that traffic shaping and optimization are ongoing efforts to align with the new valuation parameters of the DSP.
Despite the headwind, PubMatic is diversifying its DSP relationships, with spend outside the top 5 growing over 30% year-over-year in July.
The company believes that the platform change was driven by client shifts to different platforms, not by auction dynamics or bid acceptance issues.
PubMatic's approach involves iterative testing and traffic shaping to recover and optimize traffic to the impacted DSP, with a focus on long-term diversification.
Strategic Restructuring and Cost Optimization Initiatives
3D Systems is executing a comprehensive restructuring plan aiming to deliver over $85 million in annualized savings by mid-2026.
The company has in-sourced manufacturing operations over the past two years to improve quality control and reduce costs.
Restructuring efforts include facility closures, business and legal entity rationalization, and automation of back-office processes.
The company is targeting to reduce operating expenses to the low $40 million range by the end of 2025, supporting a move to positive cash flow.
Management highlighted that the scale and balance sheet flexibility have enabled them to navigate the restructuring while maintaining core R&D investments.
The timing of facility subleases remains a challenge, impacting the full realization of cost savings.
Industrial Business Recovery and Inventory Dynamics
ADI's industrial business has shown a consistent recovery, with growth accelerating across all subsectors including aerospace, defense, and healthcare.
Channel inventories remain lean, with end demand still below consumption by double digits, indicating ongoing inventory digestion.
Management expects Q4 industrial growth to be in the low to mid-teens quarter-over-quarter, despite typical seasonal declines.
The company has observed some catch-up in demand in Q4, supported by increased activity in aerospace, defense, and automation sectors.
Supply constraints in aerospace and defense are primarily due to capacity limitations and tooling delays, not demand shortages.
CapEx investments are being deployed to expand manufacturing capacity, especially in proprietary aerospace and defense products, to meet surging demand.
Dafinchi