Magnite (NASDAQ: MGNI), the world's largest independent sell-side
advertising company, today reported its results of operations for
the fourth quarter and year ended December 31, 2023.
Recent Highlights:
- Revenue of $186.9 million for Q4 2023,
up 7% from Q4 2022
- Contribution ex-TAC(1) of $165.3
million for Q4 2023, exceeded guidance of $158 to $162 million, and
was up 6% from Q4 2022
- Contribution ex-TAC(1) attributable to
CTV for Q4 2023 was $63.5 million, exceeded guidance of $61 to $63
million, and was down 2% year-over-year
- Contribution ex-TAC(1) attributable to
DV+ for Q4 2023 was $101.8 million, exceeded guidance of $97 to $99
million, and was up 11% year-over-year
- Net income for Q4 2023 of $30.9
million, or $0.16 per diluted share, compared to a net loss of
$36.4 million, or $0.27 per share for Q4 2022
- Adjusted EBITDA(1) of $70.4 million in
Q4 2023 representing a 43% Adjusted EBITDA margin(2), compared to
Adjusted EBITDA(1) of $64.2 million, a margin of 41% for Q4
2022
- Non-GAAP diluted earnings per share(1)
of $0.29 for Q4 2023, compared to $0.24 non-GAAP diluted earnings
per share(1) for Q4 2022
- Operating cash flow(4) in Q4 2023 was
$58.6 million
Expectations:
- Total Contribution ex-TAC(1) for Q1
2024 to be between $122 and $126 million
- Contribution ex-TAC(1) attributable to
CTV for Q1 2024 to be between $49 and $51 million
- Contribution ex-TAC(1) attributable to
DV+ for Q1 2024 to be between $73 and $75 million
- Adjusted EBITDA operating expenses(5)
for Q1 2024 to be between $106 and $108 million
- Adjusted EBITDA operating expenses(5)
for Q2 2024 to be between $101 and $103 million
- Total Contribution ex-TAC(1) growth of
approximately 10% for the full-year 2024, with CTV growing faster
than DV+
- Adjusted EBITDA margin(2) expansion of
100 basis points for 2024
- Double digit percentage growth of
Adjusted EBITDA(1) for 2024, and even higher growth in free cash
flow(6)
“We delivered a strong fourth quarter with CTV and DV+ revenue
both exceeding the high end of our guidance ranges. We are even
more encouraged to see improving top line trends to start 2024,
particularly in CTV” said Michael G. Barrett, President and CEO of
Magnite. “For the full-year, we delivered solid results despite a
muted ad spend environment, combined our two CTV platforms and
launched ClearLine, our direct buying solution that allows buyers
to transact in CTV inventory with a greatly streamlined supply
path. We are expanding our relationships with leading streaming
partners as they continue to invest in programmatic, which we
believe will drive strong top line growth and profitability for
us.”
Magnite
Fourth Quarter 2023 Results
Summary |
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(in millions, except
per share amounts and percentages) |
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Three Months Ended |
|
Year Ended |
|
December 31, 2023 |
|
December 31, 2022 |
|
ChangeFavorable/
(Unfavorable) |
|
December 31, 2023 |
|
December 31, 2022 |
|
ChangeFavorable/
(Unfavorable) |
Revenue |
$186.9 |
|
$175.4 |
|
7% |
|
$619.7 |
|
$577.1 |
|
7% |
Gross profit |
$116.9 |
|
$64.4 |
|
82% |
|
$209.8 |
|
$269.9 |
|
(22)% |
Contribution ex-TAC(1) |
$165.3 |
|
$156.6 |
|
6% |
|
$549.1 |
|
$514.6 |
|
7% |
Net income (loss) |
$30.9 |
|
($36.4) |
|
185% |
|
($159.2) |
|
($130.3) |
|
(22)% |
Adjusted EBITDA(1) |
$70.4 |
|
$64.2 |
|
10% |
|
$171.4 |
|
$178.8 |
|
(4)% |
Adjusted EBITDA margin(2) |
43% |
|
41% |
|
2 ppt |
|
31% |
|
35% |
|
(4) ppt |
Basic earnings (loss) per
share |
$0.22 |
|
($0.27) |
|
181% |
|
($1.17) |
|
($0.98) |
|
(19)% |
Diluted earnings (loss) per
share |
$0.16 |
|
($0.27) |
|
159% |
|
($1.17) |
|
($0.98) |
|
(19)% |
Non-GAAP earnings per
share(1) |
$0.29 |
|
$0.24 |
|
21% |
|
$0.54 |
|
$0.64 |
|
(16%) |
Notes: |
(1 |
) |
Contribution ex-TAC, Adjusted
EBITDA, and non-GAAP earnings (loss) per share are non-GAAP
financial measures. Please see the discussion in the section called
"Non-GAAP Financial Measures" and the reconciliations included at
the end of this press release. |
(2 |
) |
Adjusted EBITDA margin is
calculated as Adjusted EBITDA divided by Contribution ex-TAC. |
(3 |
) |
Advertising spend, or ad spend,
is defined as the total volume of spending between buyers and
sellers transacted on our platform. |
(4 |
) |
Operating cash flow is calculated
as Adjusted EBITDA less capital expenditures. |
(5 |
) |
Adjusted EBITDA operating
expenses is calculated as Contribution ex-TAC less Adjusted
EBITDA. |
(6 |
) |
Free cash flow is defined as
operating cash flow (Adjusted EBITDA less capital expenditures)
less net interest expense. |
Fourth Quarter 2023
Results Conference Call and Webcast:
The Company will host a conference call on February 28,
2024 at 1:30 PM (PT) / 4:30 PM (ET) to discuss the results for its
fourth quarter of 2023.
Live conference call |
|
Toll free number: |
(844) 875-6911 (for domestic
callers) |
Direct dial number: |
(412) 902-6511 (for
international callers) |
Passcode: |
Ask to join the Magnite
conference call |
Simultaneous audio
webcast: |
http://investor.magnite.com,
under "Events and Presentations" |
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|
Conference call
replay |
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Toll free number: |
(877) 344-7529 (for domestic
callers) |
Direct dial number: |
(412) 317-0088 (for
international callers) |
Passcode: |
5127377 |
Webcast link: |
http://investor.magnite.com,
under "Events and Presentations" |
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|
About MagniteWe’re Magnite (NASDAQ: MGNI), the
world’s largest independent sell-side advertising platform.
Publishers use our technology to monetize their content across all
screens and formats, including CTV, online video, display, and
audio. The world’s leading agencies and brands trust our platform
to access brand-safe, high-quality ad inventory and execute
billions of advertising transactions each month. Anchored in
bustling New York City, sunny Los Angeles, mile-high Denver,
historic London, colorful Singapore, and down under in Sydney,
Magnite has offices across North America, EMEA, LATAM, and
APAC.
Forward-Looking Statements:This press release
and management's prepared remarks during the conference call
referred to above include, and management's answers to questions
during the conference call may include, forward-looking statements,
including statements based upon or relating to our expectations,
assumptions, estimates, and projections. In some cases, you can
identify forward-looking statements by terms such as "may,"
"might," "will," "objective," "intend," "should," "could," "can,"
"would," "expect," "believe," "design," "anticipate," "estimate,"
"predict," "potential," "plan" or the negative of these terms, and
similar expressions. Forward-looking statements may include, but
are not limited to, statements concerning acquisitions by the
Company, including the acquisition of SpotX, Inc. ("SpotX," and
such acquisition the "SpotX Acquisition"), the acquisition of
SpringServe, LLC ("SpringServe," and such acquisition the
"SpringServe Acquisition"), and the merger with Telaria, Inc.
("Telaria," and such merger the "Telaria Merger"), or the
anticipated benefits thereof; statements concerning potential
synergies from the Company's acquisitions; statements concerning
macroeconomic conditions or concerns related thereto; our
anticipated financial performance; key strategic objectives;
industry growth rates for ad-supported connected television ("CTV")
and the shift in video consumption from linear TV to CTV;
anticipated benefits of new offerings, including the introduction
of our new Magnite Streaming platform and our ClearLine solution;
the success of the consolidation of our two CTV platforms; the
effects of our cost reduction initiatives; scope and duration of
client relationships; the fees we may charge in the future;
business mix; sales growth; benefits from supply path optimization;
the development of identity solutions; client utilization of our
offerings; our competitive differentiation; our market share and
leadership position in the industry; market conditions, trends, and
opportunities; certain statements regarding future operational
performance measures; and other statements that are not historical
facts. These statements are not guarantees of future performance;
they reflect our current views with respect to future events and
are based on assumptions and estimates and subject to known and
unknown risks, uncertainties and other factors that may cause our
actual results, performance or achievements to be materially
different from expectations or results projected or implied by
forward-looking statements. Risks that our business faces include,
but are not limited to, the following: our ability to realize the
anticipated benefits of the SpotX Acquisition, SpringServe
Acquisition, and other acquisitions; the impact of macroeconomic
challenges on the overall demand for advertising and the
advertising marketplace; CTV spend on our platform may grow more
slowly than we expect if growth occurs disproportionately through
platforms that we cannot access, industry growth rates for ad
supported CTV are not accurate, if CTV sellers fail to adopt
programmatic advertising solutions or if we are unable to maintain
or increase access to CTV advertising inventory; we may be
unsuccessful in our supply path optimization efforts with buyers;
our ability to introduce new offerings and bring them to market in
a timely manner, and potential responses or reactions of clients,
vendors, and competitors to the announcement of new products and
offerings; uncertainty of our estimates and expectations associated
with new offerings, including our SpringServe ad server, ClearLine
solution, and our developing identity solutions; potential negative
impacts associated with the integration of our CTV platforms and
the introduction of Magnite Streaming; we must increase the scale
and efficiency of our technology infrastructure to support our
growth and recent developments in artificial intelligence and
machine learning may accelerate or exacerbate potential risks
related to technological developments; the emergence of header
bidding has increased competition from other demand sources and may
cause infrastructure strain and added costs; our access to mobile
inventory may be limited by third-party technology or lack of
direct relationships with mobile sellers; we may experience lower
take rates, which may not be offset by increases in ad spend; the
impact of requests for discounts, fee concessions, rebates, refunds
or favorable payment terms; our business may be subject to sales
and use tax, advertising and other taxes; failure by us or our
clients to meet advertising and inventory content standards; the
freedom of buyers and sellers to direct their spending and
inventory to competing sources of inventory and demand, and to
establish direct relationships and integrations without the use of
our platform; our reliance on large aggregators of advertising
inventory, and the concentration of CTV among a small number of
large sellers that enjoy significant negotiating leverage with
respect to take rates and other terms; our ability to provide value
to both buyers and sellers of advertising without being perceived
as favoring one over the other or being perceived as competing with
them through our service offerings; our reliance on large sources
of advertising demand, including demand side platforms ("DSPs")
that may have or develop high-risk credit profiles or fail to pay
invoices when due; our sales efforts may require significant time
and expense and may not yield the results we seek; we may be
exposed to claims from clients for breach of contract; the effects
of seasonal trends on our results of operations; we operate in an
intensely competitive market that includes companies that have
greater financial, technical and marketing resources than we do;
the effects of consolidation in the ad tech industry or among our
publisher clients; our ability to differentiate our offerings and
compete effectively to combat commodification and
disintermediation; potential limitations on our ability to collect
or use data as a result of consumer tools, regulatory restrictions
and technological limitations; the deprecation of third-party
cookies and other identifiers, and the development of new targeting
and identity solutions, may disrupt the programmatic ecosystem,
cause reduced CPMs and fill rates, result in a shift of ad spend
towards "walled gardens," require additional investment and
resources, and cause the overall performance of our platform to
decline; the industry may not adopt or may be slow to adopt the use
of first-party publisher segments as an alternative to third-party
cookies; the impact of antitrust regulations or enforcement actions
targeting the digital advertising ecosystem; our ability to comply
with, and the effect on our business of, evolving legal standards
and regulations, particularly concerning data protection and
privacy; evolving corporate governance and public disclosure
regulations and expectations, including with respect to cyber
security, environmental, social and governance matters; errors or
failures in the operation of our solution, interruptions in our
access to network infrastructure or data, and breaches of our
computer systems including as a result of cyber security incidents;
our ability to ensure a high level of brand safety for our clients
and to detect "bot" traffic and other fraudulent or malicious
activity; our ability to attract and retain qualified employees and
key personnel; costs associated with enforcing our intellectual
property rights or defending intellectual property infringement;
our ability to comply with the terms of our financing arrangements;
restrictions in our Credit Agreement may limit our ability to make
strategic investments, respond to changing market conditions, or
otherwise operate our business; increases in our debt leverage may
put us at greater risk of defaulting on our debt obligations,
subject us to additional operating restrictions and make it more
difficult to obtain future financing on favorable terms; conversion
of our Convertible Senior Notes would dilute the ownership interest
of existing stockholders; the Capped Call Transactions subject us
to counterparty risk and may affect the value of the Convertible
Senior Notes and our common stock; the conditional conversion
feature of the Convertible Senior Notes, if triggered, may
adversely affect our financial condition and operating result;
failure to successfully execute our international growth plans;
failure to maintain an effective system of internal control over
financial reporting, which could adversely affect investor
confidence; the use of our net operating losses and tax credit
carryforwards may be subject to certain limitations; our ability to
raise additional capital if needed; volatility in the price of our
common stock; the impact of our repurchase program on our stock
price and cash reserves; competition for investors and the impact
of negative analyst or investor research reports; and provisions of
our charter documents and Delaware law may inhibit a potential
acquisition of the company and limit the ability of stockholders to
cause changes in company management.
We discuss many of these risks and additional factors that could
cause actual results to differ materially from those anticipated by
our forward-looking statements under the headings "Risk Factors"
and "Management's Discussion and Analysis of Financial Condition
and Results of Operations," and elsewhere in filings we have made
and will make from time to time with the Securities and Exchange
Commission, or SEC, including our Annual Report on Form 10-K for
the year ended December 31, 2023, and subsequent Quarterly Reports
on Form 10-Q for 2024. These forward-looking statements represent
our estimates and assumptions only as of the date of the report in
which they are included. Unless required by federal securities
laws, we assume no obligation to update any of these
forward-looking statements, or to update the reasons actual results
could differ materially from those anticipated, to reflect
circumstances or events that occur after the statements are made.
Without limiting the foregoing, any guidance we may provide will
generally be given only in connection with quarterly and annual
earnings announcements, without interim updates, and we may appear
at industry conferences or make other public statements without
disclosing material nonpublic information in our possession. Given
these uncertainties, investors should not place undue reliance on
these forward-looking statements. Investors should read this press
release and the documents that we reference in this press release
and have filed or will file with the SEC completely and with the
understanding that our actual future results may be materially
different from what we expect. We qualify all of our
forward-looking statements by these cautionary statements.
Non-GAAP Financial Measures and Operational
Measures:
In addition to our GAAP results, we review certain non-GAAP
financial measures to help us evaluate our business on a consistent
basis, measure our performance, identify trends affecting our
business, establish budgets, measure the effectiveness of
investments in our technology and development and sales and
marketing, and assess our operational efficiencies. These non-GAAP
measures include Contribution ex-TAC, Adjusted EBITDA, Non-GAAP
Income (Loss), and Non-GAAP Earnings (Loss) per share, each of
which is discussed below.
These non-GAAP financial measures are not intended to be
considered in isolation from, as substitutes for, or as superior
to, the corresponding financial measures prepared in accordance
with GAAP. You are encouraged to evaluate these adjustments, and
review the reconciliation of these non-GAAP financial measures to
their most comparable GAAP measures, and the reasons we consider
them appropriate. It is important to note that the particular items
we exclude from, or include in, our non-GAAP financial measures may
differ from the items excluded from, or included in, similar
non-GAAP financial measures used by other companies. See
"Reconciliation of Revenue to Gross Profit to Contribution ex-TAC,"
"Reconciliation of net income (loss) to Adjusted EBITDA,"
"Reconciliation of net income (loss) to non-GAAP income (loss),"
and "Reconciliation of GAAP earnings (loss) per share to non-GAAP
earnings (loss) per share" included as part of this press
release.
We do not provide a reconciliation of our non-GAAP financial
expectations for Contribution ex-TAC and Adjusted EBITDA, or a
forecast of the most comparable GAAP measures, because the amount
and timing of many future charges that impact these measures (such
as amortization of future acquired intangible assets,
acquisition-related charges, foreign exchange (gain) loss, net,
stock-based compensation, impairment charges, provision or benefit
for income taxes, and our future revenue mix), which could be
material, are variable, uncertain, or out of our control and
therefore cannot be reasonably predicted without unreasonable
effort, if at all. In addition, we believe such reconciliations or
forecasts could imply a degree of precision that might be confusing
or misleading to investors.
Contribution ex-TAC:
Contribution ex-TAC is calculated as gross profit plus cost of
revenue, excluding traffic acquisition cost ("TAC"). Traffic
acquisition cost, a component of cost of revenue, represents what
we must pay sellers for the sale of advertising inventory through
our platform for revenue reported on a gross basis. Contribution
ex-TAC is a non-GAAP financial measure that is most comparable to
gross profit. We believe Contribution ex-TAC is a useful measure in
assessing the performance of Magnite and facilitates a consistent
comparison against our core business without considering the impact
of traffic acquisition costs related to revenue reported on a gross
basis.
Adjusted EBITDA:
We define Adjusted EBITDA as net income (loss) adjusted to
exclude stock-based compensation expense, depreciation and
amortization, amortization of acquired intangible assets,
impairment charges, interest income or expense, and other cash and
non-cash based income or expenses that we do not consider
indicative of our core operating performance, including, but not
limited to foreign exchange gains and losses, acquisition and
related items, gains or losses on extinguishment of debt,
non-operational real estate and other expense (income), net, and
provision (benefit) for income taxes. We also track future expenses
on an Adjusted EBITDA basis, and describe them as Adjusted EBITDA
operating expenses, which includes total operating expenses. Total
operating expenses include cost of revenue. Adjusted EBITDA
operating expenses is calculated as Contribution ex-TAC less
Adjusted EBITDA. We adjust Adjusted EBITDA operating expenses for
the same expense items excluded in Adjusted EBITDA. We believe
Adjusted EBITDA is useful to investors in evaluating our
performance for the following reasons:
- Adjusted EBITDA is widely used by
investors and securities analysts to measure a company’s
performance without regard to items such as those we exclude in
calculating this measure, which can vary substantially from company
to company depending upon their financing, capital structures, and
the method by which assets were acquired.
- Our management uses Adjusted EBITDA in
conjunction with GAAP financial measures for planning purposes,
including the preparation of our annual operating budget, as a
measure of performance and the effectiveness of our business
strategies, and in communications with our board of directors
concerning our performance. Adjusted EBITDA is also used as a
metric for determining payment of cash incentive compensation.
- Adjusted EBITDA provides a measure of
consistency and comparability with our past performance that many
investors find useful, facilitates period-to-period comparisons of
operations, and also facilitates comparisons with other peer
companies, many of which use similar non-GAAP financial measures to
supplement their GAAP results.
Although Adjusted EBITDA is frequently used by investors and
securities analysts in their evaluations of companies, Adjusted
EBITDA has limitations as an analytical tool, and should not be
considered in isolation or as a substitute for analysis of our
results of operations as reported under GAAP. These limitations
include:
- Stock-based compensation is a non-cash
charge and will remain an element of our long-term incentive
compensation package, although we exclude it as an expense when
evaluating our ongoing operating performance for a particular
period.
- Depreciation and amortization are
non-cash charges, and the assets being depreciated or amortized
will often have to be replaced in the future, but Adjusted EBITDA
does not reflect any cash requirements for these replacements.
- Impairment charges are non-cash charges
related to goodwill, intangible assets and/or long-lived
assets.
- Adjusted EBITDA does not reflect
certain cash and non-cash charges related to acquisition and
related items, such as amortization of acquired intangible assets,
merger, acquisition, or restructuring related severance costs, and
changes in the fair value of contingent consideration.
- Adjusted EBITDA does not reflect cash
and non-cash charges and changes in, or cash requirements for,
acquisition and related items, such as certain transaction expenses
and expenses associated with earn-out amounts.
- Adjusted EBITDA does not reflect changes in our working capital
needs, capital expenditures, non-operational real estate expenses
or income, or contractual commitments.
- Adjusted EBITDA does not reflect cash
requirements for income taxes and the cash impact of other income
or expense.
- Other companies may calculate Adjusted
EBITDA differently than we do, limiting its usefulness as a
comparative measure.
Our Adjusted EBITDA is influenced by fluctuations in our
revenue, cost of revenue, and the timing and amounts of the cost of
our operations. Adjusted EBITDA should not be considered as an
alternative to net income (loss), income (loss) from operations, or
any other measure of financial performance calculated and presented
in accordance with GAAP.
Non-GAAP Income (Loss) and Non-GAAP Earnings (Loss) per
Share:
We define non-GAAP earnings (loss) per share as non-GAAP income
(loss) divided by non-GAAP weighted-average shares outstanding.
Non-GAAP income (loss) is equal to net income (loss) excluding
stock-based compensation, cash and non-cash based merger,
acquisition, and restructuring costs, which consist primarily of
professional service fees associated with merger and acquisition
activities, cash-based employee termination costs, and other
restructuring activities, including facility closures, relocation
costs, contract termination costs, and impairment costs of
abandoned technology associated with restructuring activities,
amortization of acquired intangible assets, gains or losses on
extinguishment of debt, non-operational real estate and other
expenses or income, foreign currency gains and losses, interest
expense associated with Convertible Senior Notes, and the tax
impact of these items. In periods in which we have non-GAAP income,
non-GAAP weighted-average shares outstanding used to calculate
non-GAAP earnings per share includes the impact of potentially
dilutive shares. Potentially dilutive shares consist of stock
options, restricted stock units, performance stock units, and
potential shares issued under the Employee Stock Purchase Plan,
each computed using the treasury stock method, and the impact of
shares that would be issuable assuming conversion of all of the
Convertible Senior Notes, calculated under the if-converted method.
We believe non-GAAP earnings (loss) per share is useful to
investors in evaluating our ongoing operational performance and our
trends on a per share basis, and also facilitates comparison of our
financial results on a per share basis with other companies, many
of which present a similar non-GAAP measure. However, a potential
limitation of our use of non-GAAP earnings (loss) per share is that
other companies may define non-GAAP earnings (loss) per share
differently, which may make comparison difficult. This measure may
also exclude expenses that may have a material impact on our
reported financial results. Non-GAAP earnings (loss) per share is a
performance measure and should not be used as a measure of
liquidity. Because of these limitations, we also consider the
comparable GAAP measure of net income (loss).
MAGNITE, INC.CONDENSED CONSOLIDATED
BALANCE SHEETS(In
thousands)(unaudited) |
|
|
December 31, 2023 |
|
December 31, 2022 |
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
326,219 |
|
|
$ |
326,254 |
|
Accounts receivable, net |
|
1,176,276 |
|
|
|
976,506 |
|
Prepaid expenses and other current assets |
|
20,508 |
|
|
|
23,501 |
|
TOTAL CURRENT ASSETS |
|
1,523,003 |
|
|
|
1,326,261 |
|
Property and equipment,
net |
|
47,371 |
|
|
|
44,969 |
|
Right-of-use lease asset |
|
60,549 |
|
|
|
78,211 |
|
Internal use software development
costs, net |
|
21,926 |
|
|
|
23,671 |
|
Intangible assets, net |
|
51,011 |
|
|
|
253,501 |
|
Goodwill |
|
978,217 |
|
|
|
978,217 |
|
Other assets, non-current |
|
6,729 |
|
|
|
7,383 |
|
TOTAL ASSETS |
$ |
2,688,806 |
|
|
$ |
2,712,213 |
|
LIABILITIES AND
STOCKHOLDERS' EQUITY |
|
|
|
Current liabilities: |
|
|
|
Accounts payable and accrued expenses |
$ |
1,372,176 |
|
|
$ |
1,094,321 |
|
Lease liabilities - current portion |
|
20,402 |
|
|
|
21,172 |
|
Debt, current |
|
3,600 |
|
|
|
3,600 |
|
Other current liabilities |
|
5,957 |
|
|
|
5,939 |
|
TOTAL CURRENT LIABILITIES |
|
1,402,135 |
|
|
|
1,125,032 |
|
Debt, non-current, net of debt
issuance costs |
|
532,986 |
|
|
|
722,757 |
|
Lease liabilities,
non-current |
|
49,665 |
|
|
|
66,331 |
|
Deferred tax liabilities,
net |
|
680 |
|
|
|
5,072 |
|
Other liabilities,
non-current |
|
1,657 |
|
|
|
1,723 |
|
TOTAL LIABILITIES |
|
1,987,123 |
|
|
|
1,920,915 |
|
STOCKHOLDERS' EQUITY |
|
|
|
Common stock |
|
2 |
|
|
|
2 |
|
Additional paid-in
capital |
|
1,387,715 |
|
|
|
1,319,221 |
|
Accumulated other comprehensive
loss |
|
(2,076 |
) |
|
|
(3,151 |
) |
Accumulated deficit |
|
(683,958 |
) |
|
|
(524,774 |
) |
TOTAL STOCKHOLDERS' EQUITY |
|
701,683 |
|
|
|
791,298 |
|
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY |
$ |
2,688,806 |
|
|
$ |
2,712,213 |
|
|
|
|
|
|
|
|
|
MAGNITE, INC.CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS(In thousands, except per
share amounts)(unaudited) |
|
|
Three Months Ended |
|
Year Ended |
|
December 31, 2023 |
|
December 31, 2022 |
|
December 31, 2023 |
|
December 31, 2022 |
Revenue |
$ |
186,932 |
|
|
$ |
175,399 |
|
|
$ |
619,710 |
|
|
$ |
577,069 |
|
Expenses(1)(2): |
|
|
|
|
|
|
|
Cost of revenue |
|
70,025 |
|
|
|
111,015 |
|
|
|
409,906 |
|
|
|
307,165 |
|
Sales and marketing |
|
37,575 |
|
|
|
48,406 |
|
|
|
173,982 |
|
|
|
200,081 |
|
Technology and development |
|
23,183 |
|
|
|
22,543 |
|
|
|
94,318 |
|
|
|
93,757 |
|
General and administrative |
|
21,025 |
|
|
|
21,977 |
|
|
|
89,048 |
|
|
|
81,382 |
|
Merger, acquisition, and restructuring costs |
|
— |
|
|
|
— |
|
|
|
7,465 |
|
|
|
7,468 |
|
Total expenses |
|
151,808 |
|
|
|
203,941 |
|
|
|
774,719 |
|
|
|
689,853 |
|
Income (loss) from
operations |
|
35,124 |
|
|
|
(28,542 |
) |
|
|
(155,009 |
) |
|
|
(112,784 |
) |
Other expense: |
|
|
|
|
|
|
|
Interest expense, net |
|
8,100 |
|
|
|
7,987 |
|
|
|
32,369 |
|
|
|
29,260 |
|
Foreign exchange (gain) loss, net |
|
3,495 |
|
|
|
3,913 |
|
|
|
1,953 |
|
|
|
(1,129 |
) |
Gain on extinguishment of debt |
|
(8,348 |
) |
|
|
— |
|
|
|
(26,480 |
) |
|
|
— |
|
Other income |
|
(1,287 |
) |
|
|
(1,327 |
) |
|
|
(5,304 |
) |
|
|
(5,318 |
) |
Total other expense, net |
|
1,960 |
|
|
|
10,573 |
|
|
|
2,538 |
|
|
|
22,813 |
|
Income (loss) before income
taxes |
|
33,164 |
|
|
|
(39,115 |
) |
|
|
(157,547 |
) |
|
|
(135,597 |
) |
Provision (benefit) for income taxes |
|
2,250 |
|
|
|
(2,730 |
) |
|
|
1,637 |
|
|
|
(5,274 |
) |
Net income (loss) |
$ |
30,914 |
|
|
$ |
(36,385 |
) |
|
$ |
(159,184 |
) |
|
$ |
(130,323 |
) |
Net earnings (loss) per
share: |
|
|
|
|
|
|
|
Basic |
$ |
0.22 |
|
|
$ |
(0.27 |
) |
|
$ |
(1.17 |
) |
|
$ |
(0.98 |
) |
Diluted |
$ |
0.16 |
|
|
$ |
(0.27 |
) |
|
$ |
(1.17 |
) |
|
$ |
(0.98 |
) |
Weighted average shares used to
compute net earnings (loss) per share: |
|
|
|
|
|
|
|
Basic |
|
138,212 |
|
|
|
133,706 |
|
|
|
136,620 |
|
|
|
132,887 |
|
Diluted |
|
143,793 |
|
|
|
133,706 |
|
|
|
136,620 |
|
|
|
132,887 |
|
(1) Stock-based compensation
expense included in our expenses was as follows: |
|
Three Months Ended |
|
Year Ended |
December 31, 2023 |
|
December 31, 2022 |
|
December 31, 2023 |
|
December 31, 2022 |
Cost of revenue |
$ |
436 |
|
$ |
475 |
|
$ |
1,809 |
|
$ |
1,666 |
Sales and marketing |
|
6,394 |
|
|
5,301 |
|
|
27,263 |
|
|
21,558 |
Technology and development |
|
4,624 |
|
|
3,316 |
|
|
20,542 |
|
|
19,961 |
General and administrative |
|
5,701 |
|
|
4,833 |
|
|
22,860 |
|
|
18,929 |
Merger, acquisition, and
restructuring costs |
|
— |
|
|
— |
|
|
143 |
|
|
2,004 |
Total stock-based compensation
expense |
$ |
17,155 |
|
$ |
13,925 |
|
$ |
72,617 |
|
$ |
64,118 |
(2) Depreciation and amortization
expense included in our expenses was as follows: |
|
Three Months Ended |
|
Year Ended |
|
December 31, 2023 |
|
December 31, 2022 |
|
December 31, 2023 |
|
December 31, 2022 |
Cost of revenue |
$ |
13,901 |
|
$ |
61,977 |
|
$ |
211,956 |
|
$ |
142,616 |
Sales and marketing |
|
2,628 |
|
|
15,072 |
|
|
27,584 |
|
|
71,887 |
Technology and development |
|
188 |
|
|
216 |
|
|
779 |
|
|
913 |
General and administrative |
|
103 |
|
|
146 |
|
|
501 |
|
|
636 |
Total depreciation and
amortization expense |
$ |
16,820 |
|
$ |
77,411 |
|
$ |
240,820 |
|
$ |
216,052 |
|
|
|
|
|
|
|
|
|
|
|
|
MAGNITE, INC.CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS(In
thousands)(unaudited) |
|
|
Year Ended |
|
December 31, 2023 |
|
December 31, 2022 |
OPERATING ACTIVITIES: |
|
|
|
Net loss |
$ |
(159,184 |
) |
|
$ |
(130,323 |
) |
Adjustments to reconcile net loss to net cash provided by operating
activities: |
|
|
|
Depreciation and amortization |
|
240,820 |
|
|
|
216,052 |
|
Stock-based compensation |
|
72,617 |
|
|
|
64,118 |
|
Impairment of intangible assets |
|
— |
|
|
|
3,320 |
|
Gain on extinguishment of debt |
|
(26,480 |
) |
|
|
— |
|
(Gain) loss on disposal of property and equipment |
|
311 |
|
|
|
(86 |
) |
Provision for (recovery of) doubtful accounts |
|
4,666 |
|
|
|
(163 |
) |
Amortization of debt discount and issuance costs |
|
6,279 |
|
|
|
6,785 |
|
Non-cash lease expense |
|
(1,712 |
) |
|
|
1,485 |
|
Deferred income taxes |
|
(2,379 |
) |
|
|
(8,802 |
) |
Unrealized foreign currency (gain) loss, net |
|
1,266 |
|
|
|
(271 |
) |
Other items, net |
|
2,696 |
|
|
|
— |
|
Changes in operating assets and liabilities, net of effect of
business acquisitions: |
|
|
|
Accounts receivable |
|
(220,102 |
) |
|
|
(46,325 |
) |
Prepaid expenses and other assets |
|
1,004 |
|
|
|
(4,228 |
) |
Accounts payable and accrued expenses |
|
294,677 |
|
|
|
91,377 |
|
Other liabilities |
|
(112 |
) |
|
|
(389 |
) |
Net cash provided by operating activities |
|
214,367 |
|
|
|
192,550 |
|
INVESTING ACTIVITIES: |
|
|
|
Purchases of property and equipment |
|
(26,764 |
) |
|
|
(30,815 |
) |
Capitalized internal use software development costs |
|
(10,619 |
) |
|
|
(13,582 |
) |
Mergers and acquisitions, net of cash acquired and indemnification
claims holdback |
|
— |
|
|
|
(20,755 |
) |
Net cash used in investing activities |
|
(37,383 |
) |
|
|
(65,152 |
) |
FINANCING ACTIVITIES: |
|
|
|
Proceeds from exercise of stock options |
|
2,166 |
|
|
|
2,234 |
|
Proceeds from issuance of common stock under employee stock
purchase plan |
|
3,513 |
|
|
|
3,744 |
|
Repayment of debt |
|
(3,600 |
) |
|
|
(3,600 |
) |
Repurchase of Convertible Senior Notes |
|
(165,518 |
) |
|
|
— |
|
Repayment of financing lease |
|
(276 |
) |
|
|
(807 |
) |
Purchase of treasury stock |
|
— |
|
|
|
(15,663 |
) |
Taxes paid related to net share settlement |
|
(11,814 |
) |
|
|
(14,498 |
) |
Payment of indemnification claims holdback |
|
(2,313 |
) |
|
|
(1,582 |
) |
Net cash used in financing activities |
|
(177,842 |
) |
|
|
(30,172 |
) |
EFFECT OF EXCHANGE RATE
CHANGES ON CASH, CASH EQUIVALENTS AND RESTRICTED CASH |
|
575 |
|
|
|
(1,417 |
) |
CHANGE IN CASH, CASH
EQUIVALENTS AND RESTRICTED CASH |
|
(283 |
) |
|
|
95,809 |
|
CASH, CASH EQUIVALENTS AND
RESTRICTED CASH — Beginning of period |
|
326,502 |
|
|
|
230,693 |
|
CASH, CASH EQUIVALENTS AND
RESTRICTED CASH — End of period |
$ |
326,219 |
|
|
$ |
326,502 |
|
|
|
|
|
|
|
|
|
MAGNITE, INC.CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS-(Continued)(In
thousands)(unaudited) |
|
|
Year Ended |
|
December 31, 2023 |
|
December 31, 2022 |
RECONCILIATION OF CASH, CASH
EQUIVALENTS AND RESTRICTED CASH TO CONSOLIDATED BALANCE
SHEETS: |
|
|
|
Cash and cash equivalents |
$ |
326,219 |
|
$ |
326,254 |
Restricted cash included in
prepaid expenses and other current assets |
|
— |
|
|
248 |
Total cash, cash equivalents and
restricted cash |
$ |
326,219 |
|
$ |
326,502 |
|
|
|
|
SUPPLEMENTAL DISCLOSURES OF
OTHER CASH FLOW INFORMATION: |
|
|
|
Cash paid for income
taxes |
$ |
5,357 |
|
$ |
4,932 |
Cash paid for interest |
$ |
37,028 |
|
$ |
26,320 |
Capitalized assets financed by
accounts payable and accrued expenses and other liabilities |
$ |
1,690 |
|
$ |
1,295 |
Capitalized stock-based
compensation |
$ |
2,012 |
|
$ |
2,704 |
Operating lease right-of-use
assets obtained in exchange for operating lease liabilities |
$ |
4,017 |
|
$ |
20,131 |
Purchase consideration -
indemnification claims holdback |
$ |
— |
|
$ |
2,293 |
|
|
|
|
|
|
MAGNITE, INC.CALCULATION OF BASIC AND
DILUTED EARNINGS (LOSS) PER SHARE(In thousands,
except per share data)(unaudited) |
|
|
Three Months Ended |
|
Year Ended |
|
December 31, 2023 |
|
December 31, 2022 |
|
December 31, 2023 |
|
December 31, 2022 |
|
|
Basic and Diluted
Earnings (Loss) Per Share: |
|
|
|
|
|
|
|
Net income (loss) |
$ |
30,914 |
|
|
$ |
(36,385 |
) |
|
$ |
(159,184 |
) |
|
$ |
(130,323 |
) |
Weighted-average common shares
outstanding used to compute basic earnings (loss) per share |
|
138,212 |
|
|
|
133,706 |
|
|
|
136,620 |
|
|
|
132,887 |
|
Basic earnings (loss)
per share |
$ |
0.22 |
|
|
$ |
(0.27 |
) |
|
$ |
(1.17 |
) |
|
$ |
(0.98 |
) |
|
|
|
|
|
|
|
|
Diluted Earnings
(Loss) Per Share: |
|
|
|
|
|
|
|
Net income (loss) |
$ |
30,914 |
|
|
$ |
(36,385 |
) |
|
$ |
(159,184 |
) |
|
$ |
(130,323 |
) |
Adjustments: |
|
|
|
|
|
|
|
Interest expense, Convertible Senior Notes, net of tax |
|
508 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Gain on extinguishment of debt, net of tax |
|
(8,151 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Net income (loss) for
calculation of diluted income (loss) |
$ |
23,271 |
|
|
$ |
(36,385 |
) |
|
$ |
(159,184 |
) |
|
$ |
(130,323 |
) |
|
|
|
|
|
|
|
|
Weighted-average common shares
used in basic earnings (loss) per share |
|
138,212 |
|
|
|
133,706 |
|
|
|
136,620 |
|
|
|
132,887 |
|
Dilutive effect of
weighted-average restricted stock units |
|
545 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Dilutive effect of
weighted-average common stock options |
|
1,156 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Dilutive effect of
weighted-average performance stock units |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Dilutive effect of
weighted-average ESPP shares |
|
15 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Dilutive effect of
weighted-average convertible notes |
|
3,865 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Weighted-average shares used
to compute diluted net earnings (loss) per share |
|
143,793 |
|
|
|
133,706 |
|
|
|
136,620 |
|
|
|
132,887 |
|
Diluted net earnings (loss)
per share |
$ |
0.16 |
|
|
$ |
(0.27 |
) |
|
$ |
(1.17 |
) |
|
$ |
(0.98 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MAGNITE, INC.RECONCILIATION OF REVENUE TO
GROSS PROFIT TO CONTRIBUTION EX-TAC(In
thousands)(unaudited) |
|
|
Three Months Ended |
|
Year Ended |
|
December 31, 2023 |
|
December 31, 2022 |
|
December 31, 2023 |
|
December 31, 2022 |
Revenue |
$ |
186,932 |
|
$ |
175,399 |
|
$ |
619,710 |
|
$ |
577,069 |
Less: Cost of revenue |
|
70,025 |
|
|
111,015 |
|
|
409,906 |
|
|
307,165 |
Gross Profit |
|
116,907 |
|
|
64,384 |
|
|
209,804 |
|
|
269,904 |
Add back: Cost of revenue, excluding TAC |
|
48,373 |
|
|
92,233 |
|
|
339,343 |
|
|
244,711 |
Contribution ex-TAC |
$ |
165,280 |
|
$ |
156,617 |
|
$ |
549,147 |
|
$ |
514,615 |
|
|
|
|
|
|
|
|
MAGNITE, INC.RECONCILIATION OF NET INCOME
(LOSS) TO ADJUSTED EBITDA(In
thousands)(unaudited) |
|
|
Three Months Ended |
|
Year Ended |
|
December 31, 2023 |
|
December 31, 2022 |
|
December 31, 2023 |
|
December 31, 2022 |
Net income (loss) |
$ |
30,914 |
|
|
$ |
(36,385 |
) |
|
$ |
(159,184 |
) |
|
$ |
(130,323 |
) |
Add back (deduct): |
|
|
|
|
|
|
|
Depreciation and amortization expense, excluding amortization of
acquired intangible assets |
|
9,198 |
|
|
|
8,365 |
|
|
|
38,330 |
|
|
|
31,658 |
|
Amortization of acquired intangibles |
|
7,622 |
|
|
|
69,046 |
|
|
|
202,490 |
|
|
|
184,394 |
|
Stock-based compensation expense |
|
17,155 |
|
|
|
13,925 |
|
|
|
72,617 |
|
|
|
64,118 |
|
Merger, acquisition, and restructuring costs, excluding stock-based
compensation expense |
|
— |
|
|
|
— |
|
|
|
7,322 |
|
|
|
5,464 |
|
Non-operational real estate and other expense, net |
|
20 |
|
|
|
107 |
|
|
|
310 |
|
|
|
622 |
|
Interest expense, net |
|
8,100 |
|
|
|
7,987 |
|
|
|
32,369 |
|
|
|
29,260 |
|
Foreign exchange (gain) loss, net |
|
3,495 |
|
|
|
3,913 |
|
|
|
1,953 |
|
|
|
(1,129 |
) |
Gain on extinguishment of debt |
|
(8,348 |
) |
|
|
— |
|
|
|
(26,480 |
) |
|
|
— |
|
Provision (benefit) for income taxes |
|
2,250 |
|
|
|
(2,730 |
) |
|
|
1,637 |
|
|
|
(5,274 |
) |
Adjusted EBITDA |
$ |
70,406 |
|
|
$ |
64,228 |
|
|
$ |
171,364 |
|
|
$ |
178,790 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MAGNITE, INC.RECONCILIATION OF NET INCOME
(LOSS) TO NON-GAAP INCOME (LOSS)(In
thousands)(unaudited) |
|
|
Three Months Ended |
|
Year Ended |
|
December 31, 2023 |
|
December 31, 2022 |
|
December 31, 2023 |
|
December 31, 2022 |
Net income (loss) |
$ |
30,914 |
|
|
$ |
(36,385 |
) |
|
$ |
(159,184 |
) |
|
$ |
(130,323 |
) |
Add back (deduct): |
|
|
|
|
|
|
|
Merger, acquisition, and restructuring costs, including
amortization of acquired intangibles and excluding stock-based
compensation expense |
|
7,622 |
|
|
|
69,046 |
|
|
|
209,812 |
|
|
|
189,858 |
|
Stock-based compensation expense |
|
17,155 |
|
|
|
13,925 |
|
|
|
72,617 |
|
|
|
64,118 |
|
Non-operational real estate and other expense, net |
|
20 |
|
|
|
107 |
|
|
|
310 |
|
|
|
622 |
|
Foreign exchange (gain) loss, net |
|
3,495 |
|
|
|
3,913 |
|
|
|
1,953 |
|
|
|
(1,129 |
) |
Interest expense, Convertible Senior Notes |
|
508 |
|
|
|
250 |
|
|
|
2,620 |
|
|
|
1,000 |
|
Gain on extinguishment of debt |
|
(8,348 |
) |
|
|
— |
|
|
|
(26,480 |
) |
|
|
— |
|
Tax effect of Non-GAAP adjustments(1) |
|
(10,218 |
) |
|
|
(16,197 |
) |
|
|
(23,740 |
) |
|
|
(32,487 |
) |
Non-GAAP income |
$ |
41,148 |
|
|
$ |
34,659 |
|
|
$ |
77,908 |
|
|
$ |
91,659 |
|
(1 |
) |
Non-GAAP income (loss) includes
the estimated tax impact from the reconciling items reconciling
between net income (loss) and non-GAAP income (loss). |
|
|
|
MAGNITE, INC.RECONCILIATION OF GAAP
EARNINGS (LOSS) PER SHARE TO NON-GAAP EARNINGS PER
SHARE(In thousands, except per share
amounts)(unaudited) |
|
|
Three Months Ended |
|
Year Ended |
|
December 31, 2023 |
|
December 31, 2022 |
|
December 31, 2023 |
|
December 31, 2022 |
GAAP net earnings (loss) per
share (1): |
|
|
|
|
|
|
|
Basic |
$ |
0.22 |
|
$ |
(0.27 |
) |
|
$ |
(1.17 |
) |
|
$ |
(0.98 |
) |
Diluted |
$ |
0.16 |
|
$ |
(0.27 |
) |
|
$ |
(1.17 |
) |
|
$ |
(0.98 |
) |
|
|
|
|
|
|
|
|
Non-GAAP income (2) |
$ |
41,148 |
|
$ |
34,659 |
|
|
$ |
77,908 |
|
|
$ |
91,659 |
|
Non-GAAP earnings per
share |
$ |
0.29 |
|
$ |
0.24 |
|
|
$ |
0.54 |
|
|
$ |
0.64 |
|
|
|
|
|
|
|
|
|
Weighted-average shares used
to compute basic net earnings (loss) per share |
|
138,212 |
|
|
133,706 |
|
|
|
136,620 |
|
|
|
132,887 |
|
Dilutive effect of weighted-average common stock options, RSAs,
RSUs, and PSUs |
|
1,701 |
|
|
2,883 |
|
|
|
3,258 |
|
|
|
3,494 |
|
Dilutive effect of weighted-average ESPP shares |
|
15 |
|
|
2 |
|
|
|
31 |
|
|
|
18 |
|
Dilutive effect of weighted-average Convertible Senior Notes |
|
3,865 |
|
|
6,262 |
|
|
|
4,981 |
|
|
|
6,262 |
|
Non-GAAP weighted-average
shares outstanding (3) |
|
143,793 |
|
|
142,853 |
|
|
|
144,890 |
|
|
|
142,661 |
|
(1) Calculated as net income
(loss) divided by basic and diluted weighted-average shares used to
compute net income (loss) per share as included in the consolidated
statement of operations. |
(2) Refer to reconciliation of
net income (loss) to non-GAAP income (loss). |
(3) Non-GAAP earnings per
share is computed using the same weighted-average number of shares
that are used to compute GAAP net income (loss) per share in
periods where there is both a non-GAAP loss and a GAAP net
loss. |
|
MAGNITE, INC.CONTRIBUTION EX-TAC BY
CHANNEL(In thousands, except
percentages)(unaudited) |
|
|
Contribution ex-TAC |
|
Three Months Ended |
|
December 31, 2023 |
|
December 31, 2022 |
|
|
Channel: |
|
|
|
|
|
|
|
CTV |
$ |
63,530 |
|
38 |
% |
|
$ |
64,623 |
|
41 |
% |
Mobile |
|
71,566 |
|
44 |
|
|
|
61,117 |
|
39 |
|
Desktop |
|
30,184 |
|
18 |
|
|
|
30,877 |
|
20 |
|
Total |
$ |
165,280 |
|
100 |
% |
|
$ |
156,617 |
|
100 |
% |
|
Contribution ex-TAC |
|
Year Ended |
|
December 31, 2023 |
|
December 31, 2022 |
|
|
Channel: |
|
|
|
|
|
|
|
CTV |
$ |
218,494 |
|
40 |
% |
|
$ |
214,803 |
|
42 |
% |
Mobile |
|
226,826 |
|
41 |
|
|
|
188,116 |
|
36 |
|
Desktop |
|
103,827 |
|
19 |
|
|
|
111,696 |
|
22 |
|
Total |
$ |
549,147 |
|
100 |
% |
|
$ |
514,615 |
|
100 |
% |
Investor Relations Contact
Nick Kormeluk
(949) 500-0003
nkormeluk@magnite.com
Media Contact
Charlstie Veith
(516) 300-3569
press@magnite.com
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