Magnite, Inc.

First quarter 2021 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there'll be an opportunity to ask questions. Please note that this event is being recorded. I would now like to turn the conference over to Nick from Investor Relations. Please go ahead.

Thank you, Operator, and good afternoon, everyone. Welcome to Magnite's first quarter 2021 earnings conference call. As a reminder, the comparisons you will see in the 10-Q, as reported, include the financial results of Telaria for the first quarter of 2021. For the first quarter of 2020, the results do not include Telaria, given the merger date of April 1, 2020. During the course of this call, when we refer to results and associated year-over-year comparisons with the phrase, as reported, we are referring to the basis as reported in our 10Q. When we make comments referring to pro forma comparisons, we are including Telaria for the first quarter of 2020 in order to provide additional detailed insights that management also uses to evaluate our business performance. When discussing pro forma information as it relates to the SpotX acquisition, we are also including the preliminary and unaudited results of SpotX for the relevant period. The closing date of our SpotX acquisition was April 30, 2021. As a result, please keep in mind that our reported results for Q2 2021 will only include two out of three months for the quarter. We will be referencing revenue results for Spodex for Q1 2021. These results are preliminary and unaudited and are subject to change. As a reminder, this conference call is being recorded. Joining me on the call today are Michael Barrett, CEO, and David Day, our CFO. I would like to point out that we have posted financial highlight slides to our investor relations website to accompany today's presentation. Before we get started, I'll remind you that our prepared remarks and answers to questions will include information that might be considered to be forward-looking statements, including, but not limited to, statements concerning our anticipated financial performance and strategic objectives, including the potential impacts of COVID-19 on our business, as well as statements concerning the acquisition of SpotX and potential benefits and synergies we expect to realize they're from. 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 are 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. A discussion of these and other risks, uncertainties, and assumptions is set forth in the company's periodic reports filed with the SEC, including our 2020 annual report on Form 10-K and our 10-Q for Q1 2021. We undertake no obligation to update forward-looking statements or relevant risks. Our commentary today will include non-GAAP financial measures, including adjusted EBITDA, non-GAAP income per share, and with respect to pro forma comparisons that include spot X results and our expectations for Q2 2021, revenue excluding traffic acquisition costs also referred to revenue XTAC. We have previously used the term non-GAAP net revenue for this metric, but we'll be using revenue XTAC going forward to standardize to this more commonly used terminology. Reconciliations between GAAP and non-GAAP metrics for all our reported results and the preliminary anonymity spotting results can be found in our earnings press release and in the financial highlights deck that is posted on our investor relations website. At time, in response to your questions, we may offer incremental metrics to provide greater insights into the dynamics of our business. Please be advised that this additional detail may be one time in nature, and we may or may not provide an update on these results. in the future of these metrics. I encourage you to visit our investor relations website to access our press release, financial highlights deck, periodic SEC reports, and webcast replay of today's call to learn more about Magnite. I will now turn the call over to Michael. Michael, please go ahead.

Thank you, Nick. You've heard us talk in the past about the attractive CTV opportunity. Following the very recent close of our SpotX acquisition, this gets even more exciting. as we believe we are clearly the leading independent CTV platform. Prior to Spotix, I was very pleased with our CTV team, business, traction with customers, and technology prowess to serve industry-leading customers like Disney. But adding Spotix to our business is transformational and immediately gives us much greater scale with a broadened offering, specifically in additional software capabilities and in a very attractive and strategic managed service business. We believe the combination is transformative because it immediately gives us critical mass and scale in CTV and more than doubles the size of our CTV business, which would have represented 35% of revenue XTAC in Q1 on a combined pro forma basis. It brings us direct relationships with clients like Roku and deeper relationships with Samsung, Viacom, CBS, NBC, Discovery, Scripps, Fubo, Pluto, Vizio, and others. It more than triples our dev team in CTV, giving us tremendous resources to support customers and accelerate technology development. It gives us a managed services capability, which serves as a very powerful onboarding ramp to move ad dollars from linear TV to CTV, and it creates access to a larger pool of data to help accelerate our best-in-class identity solutions for CTV and OLV ecosystems. Let's now shift gears and dig into Q1 revenue results for both companies. First, Magnet. Magnite standalone results for Q1 included revenue of $60.7 million for Q1 2021, up 67% from Q1 2020 on an as-reported basis, and up 18% on a pro forma basis inclusive of Tolaria. CTV revenue of $12 million, representing an increase of 32% year-over-year on a pro forma basis. SpotX's preliminary and unaudited standalone results for Q1 included revenue ex-tac of $31.2 million, up 45% year-over-year, of which $19.7 million was attributable to CTV, up 70% year-over-year. At a high level combined on a pro forma basis, including SpotX Q1 2021, we would have had 91 million in total revenue ex-tac, representing 58% year-over-year growth, and 32 million in CTV revenue ex-tac, representing 53% year-over-year growth. Our results reflected strong growth in core programmatic business across channels with high profitability and margin expansion. SpotX's results far exceeded our expectations and showed clear signs that they are executing well on their strategy, especially in CTV. They captured linear TV ad dollars through their managed service business and had healthy contribution from software services. These results help show the financial power of the combined company and highlight CTV revenue growth momentum. We have line of sight for total revenue XTAC of well over half a billion dollars in 2022, with future adjusted EBITDA margins in the 30s. Our strategy for CTV doesn't change with SpotX's pairing, only amplifies our executional surety, scale, and future industry leadership. Our strategy to grow CTV revenue is twofold. First part, is to convert direct CTV deals that are currently being sold by in-house reps into programmatic channels. Second is to facilitate and accelerate linear TV ad dollars moving over to CTV. As a programmatic first platform, our success in CTV has largely come from winning additional programmatic share within the CTV bucket, or step one of our strategy. This has been particularly effective with digital-first CTV publishers like Pluto, Hulu, and Tubi. With our acquisition of SpotX, we now have more powerful tools for the second prong of the strategy, accelerating the shift of linear TV ad dollars to programmatic CTV. SpotX brings a very robust managed service offering that is directly aimed at capturing these linear ad dollars. It provides traditional TV advertisers that are used to transacting through insertion orders and purchasing within the upfronts and scatter market with a comfortable on-ramp into digital CTV. Together, we are the clear independent industry leader, have much greater scale, more inventory, much, much more efficient development roadmap, greater support resources, product and partner diversity, giving us the opportunity to drive accelerated industry growth. On the identity front, we feel we are very well prepared for the future. The elimination of third-party cookies makes our role significantly more important than in the past. Most importantly, our pub-side solution or audience marketplace, which relies on consented first-party identifiers managed by publishers, continues to grow as a percent of our business and dovetails perfectly with our strategy for CTV. We also saw IDFA restrictions come into play just a couple weeks ago. This change is very new and we've not observed any discernible impact yet, but we are well positioned to help the ad community pivot to a new identity framework. Our business is largely tied to the broader economic recovery in the U.S. and globally. since ad budgets are typically deployed to stimulate demand when marketers are convinced there is customer engagement and follow-through. The long-awaited recovery in very large key sectors of ad spend has begun. This is evident in the following sectors as seen in recent ad spend. Travelers experience a strong resurgence as seen in spend, travel bookings, theme park reopening, and recent commentary from multiple airlines, with a lot of room to continue to grow. Entertainment is staging a comeback with audiences coming back to live sports, concerts, Broadway, and movie theaters, all looking to sell seats after a very long drought. And auto has also shown improvement relative to prior trends. There is a lot to unpack this quarter as it relates to our Q2 guidance. David will cover this in more detail, but I wanted to make a few things very clear. On a combined pro forma basis, CTV was 35% of our business and growing in excess of 50% year over year in Q1. Although the Magnite CTV growth rate standalone was a bit softer than that, we've seen material acceleration in Q2, allowing us to raise our expectations for the second quarter. We continue to be on track to exceed industry growth rates for CTV for the full year and and Spotix CTV is seeing continued strength as well. Lastly, as you might expect with Spotix just closing, we have a lot of work ahead of us in integrating two very strong and high-performing teams to now serve a broader set of customers. The results of these efforts will be a more scaled and powerful company that can help accelerate the growth of programmatic within the already attractive and fast-growing CTV market and further separates us from the competition. With that, I will hand things over to David, who will go into greater detail regarding financial performance and expectations. David?