Our relationships with buyers continue to expand as activity from SPO climbed to 50% of total activity on our platform, underscoring the long-term strategic value and stickiness of these relationships, the trailing 12 month net spend retention rate from SPO partners with at least three years of spending on our platform was 125%. As the share of SPO to total activity increases, we anticipate revenue visibility further improving and the proportion of high margin revenue growing. In February, I outlined our key operating priorities for delivering accelerated year-over-year revenue growth and incremental margin expansion. Consistent with our long-term track record, we remain focused on investing in high impact, high return projects, while driving further efficiencies across the business.
First, we are executing our plan of adding over 150 net new team members this year to accelerate product innovation and go-to-market expansion. We are adding engineers to create incremental data monetization opportunities for PubMatic as we generate both publisher revenue and data fees from our connect transactions. Prior investments in this area have led to increased value creation for clients, resulting in the number of connect customers more than doubling over the last 12 months. These investments are also focused on expanding our alternative data signals. Similarly, increased sales and engineering investments in OpenWrap have broadened our value proposition and capabilities that we deliver. Our wrapper solution generates revenue via our core SSP revenue stream as well as software based fee from all publisher revenue flowing through the wrapper.
We’ve also expanded our buyer focused sales team by nearly 20% year-over-year to accelerate growth in SPO and Activate. We expect this broader team will enable us to further penetrate large agencies and advertisers as well as bring on mid-tier buyers who are starting to embark on SPO initiatives. You recall that in February I shared that our plan was to increase this SPO focused team by 50% over the course of 2024. Second, we continue to make prudent investments in CapEx with a focus on funding new products and efficiently increasing capacity on the platform. As previously communicated, we anticipate full year CapEx to be marginally higher than last year’s level. And third, our team is building on cost saving efforts from last year and optimizing via software and AI to deliver incremental efficiencies across our own and operated infrastructure.
For the trailing 12 months, these efforts reduced our cost of revenue per million impressions processed by 10% compared to the comparable prior 12-month period. Moving down the P&L, GAAP operating expenses in Q1 were in line with expectations at $46.8 million, an 11% increase over the prior year, reflecting targeted investments across the business. Q1 GAAP net loss was $2.5 million or $0.05 net loss per diluted share. Non-GAAP net income, which adjusts for stock-based compensation expense and related adjustments for income tax was $4.8 million, or approximately $0.09 per diluted share. We have a strong balance sheet that supports our long-term capital allocation strategy. We ended the quarter with $174 million in cash and marketable securities and zero debt.
Year-to-date through April 30, 2024, we repurchased 1.1 million shares of Class A common stock for $20.1 million in cash. Since the inception of our repurchase program in February 2023, we have repurchased a total of 5.1 million shares for $79.4 million. We have $95.6 million remaining in our repurchase program authorized through December 31, 2025. We generated $24 million in net cash provided by operating activities and delivered $16 million of free cash flow, which was more than 3 times the free cash flow we generated in Q1 of last year. Now, turning to our outlook. In Q1, we saw terrific growth across our business and this momentum continued through April with revenues up double-digit percentages over last year. Both omni-channel video and display revenues in April increased over last year and the majority of our top 10 ad verticals grew over 20% year-over-year.
We are also making steady progress on our 2024 operating priorities in terms of hiring for continued product innovation and go-to-market expansion that we believe will help accelerate year-over-year revenue growth. These data points give us confidence in our underlying growth strategy and the effectiveness of the growth investments we are making. Our Q2 and full year outlook also reflects an anticipated headwind as one of our top DSPs has informed us, it is modifying its bidding methodology in Q2. This change had been made by other DSPs over the past several years. Nearly 100% of impressions on our platform will now be transacted via a similar bidding approach. Based on prior experience from similar DSP changes, we expect lower bid prices from this specific buyer to be partially offset by real time competitive reactions by other DSPs. Further, we anticipate that our strong underlying growth across ad formats, channels and regions, as well as growth of our emerging revenue streams will help us offset this headwind throughout the year.
For Q2 revenue, we are projecting $69 million to $71 million, or approximately 11% year-over-year growth at the mid-point. For the full year, we expect revenue between $296 million and $304 million, or 12% year-over-year growth at the mid-point. In terms of costs, we expect GAAP cost of revenue to increase sequentially each quarter in the low-single digit percentage range. We also expect Q2 GAAP OpEx and subsequent quarters to increase sequentially in the low-single digit percentages as we continue to invest for long-term growth. With our revenue guidance and expected cost structure, which is largely fixed in the near-term by design, we expect Q2 adjusted EBITDA between $17 million and $19 million, or approximately 26% margin at the mid-point.
For the full year, we expect adjusted EBITDA between $90 million and $94 million, or approximately 31% margin at the mid-point. We expect CapEx between $16 million to $18 million for the full year. In summary, we had a very strong start to the year, which continued into April. SPO relationships now account for 50% of activity on our platform. We added significant new customers. All regions grew double-digit percentages and new products are contributing to growth. Our results highlight the profitability and the durability of our model as we focus on sustained innovation, go-to-market expansion and operational excellence. As one of the largest independent sell-side technology providers, I am very excited about our long-term growth opportunities and the trajectory we are on for sustained double-digit revenue growth this year and beyond.
With that, I’ll turn the call over to Stacie for questions.
A – Stacie Clements: Thank you, Steve. [Operator Instructions] Our first question comes from Matt Swanson at RBC. Please go ahead, Matt.
Matt Swanson: Yes. Thank you, guys. 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.
Rajeev Goel: Sure. Yes. Hey, Matt. Thank you. 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 KPI’s 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 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.
Matt Swanson: That’s really helpful. 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?
Rajeev Goel: Sure. Yes. So there’s, I think, two 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 six years. We’ve grown, as you said, that metric quite a bit. We were in, I think the 30%s 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.
Matt Swanson: Thank you.
Stacie Clements: Thanks, Rajeev. Our next question comes from Ian Peterson at Evercore. Please go ahead, Ian.
Ian Peterson: 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? Thanks.
Steve Pantelick: Sure. Thanks Ian for the question. So when we put together our Q2 guide, as we typically do, we focus on providing an objective viewpoint. 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 one, 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, six 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.
Ian Peterson: Thank you, Steve.
Stacie Clements: Our next question comes from Justin Patterson, KeyBanc. Please go ahead, Justin.
Rajeev Goel: Stacie, Justin has disconnected.
Stacie Clements: Thank you, Kelsey. Moving on, we’ll take next question from James Heaney at Jefferies.
