Magnite, Inc.

And welcome to the Magnite First Quarter 2022 Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing star, then zero on your telephone keypad. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star one on your telephone keypad to withdraw your questions. please press star 2. Please note this event is being recorded. I would now like to turn the conference over to Mr. Nick Kormeluk, Head of Investor Relations. Please go ahead, sir.

Thank you, Operator, and good afternoon, everyone. Welcome to Magnite's first quarter 2022 earnings conference call. As a reminder, the comparisons you will see in the 10Q as reported include the financial results of SpotX and SpringServe for Q1 2022, But for periods prior to the acquisition dates, the results do not include spot X or spring serve, which were acquired on April 30th, 2021, and July 1st, 2021, respectively. Through the course of this call, when we refer to results in associated year-over-year comparisons with the phrase as reported, we are referring to the basis as reported in our 10-Q. When we make comments referring to pro forma comparisons, we are including spot X and spring serve for the relevant pre-acquisition period in order to provide a like-to-like comparison. Please keep in mind as it relates to SpotX and SpringServe acquisitions, prior quarterly results are estimated and unaudited. 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 on our investor relations website to accompany today's presentation. Before we get started, I will 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 macroeconomic factors on our business. 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. 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 first quarter 2022 quarterly report on Form 10-Q and our 10-K. We undertake no obligation to update forward-looking statements or relevant risks. Our commentary today will include non-GAAP financial measures, including revenue ex-tac or less traffic acquisition costs, adjusted EBITDA, and non-GAAP income per share. Reconciliations between GAAP and non-GAAP metrics for reported results can be found in our earnings press release and in the financial highlights deck that is posted on our investor relations website. At times, 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 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. We delivered strong Q1 results on total revenue, CTV revenue, adjusted EBITDA, and free cash flow, and we're providing a positive outlook for Q2. David will provide greater detail on Q1 results and Q2 outlook. I'd like to use my remarks today to focus on our broader strategic view of the industry. Recently, questions have been raised about the relevance of the sell-side platform and where it might sit in a world where sellers can connect directly to buyers. We've said before that we don't see these connections as a threat. And today I'm going to go further and say that we see them as an indication that the SSP is becoming more valuable than ever. and Magnite's independent omnichannel approach positions us to lead the group long-term. To understand our perspective, I think it's helpful to explore the evolution of Magnite and SSPs more generally. First, I'll focus on the role of the SSP in DBplus, and then I'll transition to CTV. Let's start in the early 2000s when programmatic wasn't yet a thing and display publishers made most of their money selling ad inventory directly. which they'd book in their primary ad server, usually Google's DFP. They'd sell everything they could direct and throw the remaining impressions, known as remnant, into the bargain bin where dozens of ad networks jockeyed to get first look. It was difficult and inefficient for publishers to predict which of these networks would make them the most money. So in 2007, ad network optimizers, such as the Rubicon Project, emerged to help publishers maximize their remnant yield. In the 2010s, as programmatic buying ramped up and DSPs gradually replaced ad networks, the ad network optimizer became the SSP, managing yield across all indirect sources and offering an array of additional services, such as tools for private deals, ad quality, billing and reconciliation, and real-time reporting and controls. In this era, Most publishers partnered with one SSP, relying on them to navigate a rapidly changing space and maximize what was quickly becoming a significant portion of the revenue. In 2015, programmatic truly kicked into high gear when publishers began calling direct and programmatic demand simultaneously, known as header bidding. The practice was difficult and manual, but it finally put programmatic on a level playing field. and publishers were leaving far less money on the table. In time, publishers learned that the more SSPs they called in their headers, the more money they made, which was once a valued one-on-one relationship became one of many, and the SSP was pushed away from its core yield management role and towards something closer to an ad exchange. At this time, we saw an opportunity to embrace the disruption by helping to make header bidding more transparent and flexible. We co-founded prebid.org, an open source header bidding framework, and launched Demand Manager, a suite of software that makes it easy for publishers to configure and optimize their prebid headers. As header bidding expanded, and even as buyers dramatically limited their connections to only the most credible SSPs, it became increasingly clear to buyers that the header model was inefficient and expensive, as it required them to bid against themselves for the same impression across multiple exchanges. The Trade Desk's recent announcement of OpenPath is in many ways a response to these inefficiencies by attempting to acquire supply directly from the very largest publishers. Though some publishers will add OpenPath as a demand source, we expect it will be supplementary to other sources and paths, not a replacement for them. After all, it's not just the trade desk or even just DSPs looking for more direct access to publishers. It's also agencies. As a result, large publishers will need to manage and optimize a growing list of newly minted direct connections with buyers, something they can't do by adding another SSP into the header. Instead, they'll need to partner with one scaled, unconflicted SSP to unify the auction, optimize yields, and deliver a full suite of seller-focused tools, including the ability to embrace and activate the shift towards seller-centric audience and identity. In many ways, this is a return to the one-on-one publisher-SSP relationship that preceded header bidding, and for several reasons, no platform is better positioned to lead in this role than Magnet. First, Our deep expertise in pre-bid now the preeminent header bidding standard in our work, enhancing it, expanding it with double demand manager puts us in the unique position to be the clear leader for yield management across every type of demand, including display audio and video. And we've only just begun to scratch the surface on maximizing the value of each impression through machine learning and AI. Second, As the industry moves away from the third-party cookie and other buy-side identifiers towards solutions that are seller-centric, our robust audience technologies, bolstered by our recent acquisitions of Nth Party and Carbon, and our deal management tools, which are among the best in the business, will enable publishers to activate and monetize their audiences across every media type with an eye towards privacy and security. Third, our relationships with brands and agencies are strong and continuously growing, which benefits our seller clients by bringing them new and unique pools of demand. Our recently announced preferred partnership with GroupM is a great example of this. And lastly, Magnite's omni-channel footprint enables us to meet our clients' needs across a wider range of channels and formats, including CTVA, which other SSPs talk about doing, but no independent SSP can match our full stack of capabilities in this area. And that's a good transition to CTV, which is fundamentally different from DV Plus and how it operates. Because CTV is a world in which there's a finite amount of the available inventory and viewer experience takes precedent over CPMs, there isn't the same need for header bidding. Direct selling plays a dominant role in CTV and probably always will. Even if the means of executing these direct sales is increasingly programmatic, in many cases, there's no auction at all. For this reason, our clients prefer to work primarily with Magnite, and they look to us to provide far more than the highest bid. We have a track record of building custom software and unique features for a broad range of CTV industry players. These range from device manufacturers and OEMs, such as LG, Vizio, Samsung, and Roku, to virtual MVPDs, such as Fubo, Hulu, Sling, and DirecTV, to digital-first and free ad-supported streaming TV services like Pluto, Tubi, and Crackle, and broadcasters and programmers, such as Disney, Discovery, Fox, and A&E. For many of these companies, we're not just helping them sell or serve the ads, but more importantly, to manage a highly complex series of decisions that balance revenue, targeting, and enforcement of business rules while fiercely guarding viewer experience and publisher data. Moreover, by integrating our proprietary ad service, SpringServe, we offer CTV sellers a holistic yield management solution that drives value across their entire ad business by dynamically allocating between programmatic and non-programmatic inventory. And we are constantly innovating to solve the evolving needs of CTV sellers. For example, through SpringServe's newly announced Binge Watcher product, a tool set to rapidly review creatives and improve the user experience. We see our ability to address the nuanced needs of CTV clients through advanced software solutions as a formidable barrier to entry for our competitors. In the final analysis at Magnite, we believe strongly in two key principles. One, all media, display, CTV, audio, you name it, will be bought, sold, or executed programmatically. And two, sellers will always need a scaled and unconflicted agent to help them make the most of every programmatic opportunity. A bet on Magnite is a bet on these principles. With that, I will hand the call over to David, who will provide additional detail regarding our financial performance and expectations. David?