Magnite, Inc.

And welcome to the Magnite Second Quarter 2022 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 will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Nick, Head of Investor Relations. Please go ahead.

Thank you, Operator, and good afternoon, everyone. Welcome to Magnite's second quarter 2022 earnings conference call. As a reminder, the comparisons you will see in the 10-Q as reported include the financial results of SpotX and SpringServe for Q2 2022, but do not include April 21 SpotX results or Q2 21 SpringServe results because those businesses were acquired April 30, 2021, and July 1, 2021, respectively. 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 10-Q. When we make comments referring to pro forma comparisons, we are including SpotX and SpringServe for the relevant pre-acquisition period in order to provide a like-to-like comparison. Please keep in mind as it relates to the 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'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 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 that and subject to known and unknown risks, uncertainties, and other factors that may cause 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 second 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 our 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. In a more challenging ad spending environment, I'm pleased with our team's ability to deliver revenue and EBITDA in line with what we communicated to you three months ago. CTV finished at the midpoint of our guide, and we achieved strong adjusted EBITDA growth of 30% year-over-year with a margin of 34%, also at the midpoint of our implied guide. David will provide greater detail on Q2 results and Q3 outlook. Like others in the sector, we were not immune to the impacts of macroeconomic challenges, and we did experience softening as the quarter progressed, especially in EMEA and APAC in the DV Plus business. A strong US dollar also pressured overall ad spend in these geographies. In DV Plus, the US proved more resilient than did the rest of the world. These trends in DV Plus have continued into Q3 and are reflected in our expectations. Given market conditions, we are very pleased that our CTV business continued to be a growth driver in the quarter, as revenue XTAC grew 52% year-over-year on an as-reported basis, or 19% pro forma. Q3 has started even stronger, and we are optimistic that our CTV business will see improving growth rates in the back half of the year. We are seeing great traction in CTV, and specifically our ad server business, SpringServe. The integration between our ad server and the SSP is incredibly powerful. It reduces complexity, improves inventory management between multiple parties, enhances functionality, and most importantly, drives yield for customers that have both a direct sales force and a programmatic sales channel. We are continuously introducing new features into this integrated solution, such as ad tiles, which are the native ad units presented on the home screen of connected TVs. Solutions such as these have put us in a great position to catch your share with one of the fastest growing groups in the CTV market, the TV OEMs. They have quickly scaled and will continue to further strengthen as key players in the market for years to come. The likes of Vizio, Samsung, and LG continue to invest aggressively in their advertising businesses as more viewers rely on their TV operating system to access digital content. This quarter, we announced a multi-year deal with LG Ads Solutions. We will have access to their automatic content recognition, or ACR, data for planning, activation, measurement, and advanced analytics across our platforms. Through the agreement, ACR data from opted-in LG smart TVs in the U.S. will be made available across our U.S. inventory footprint this year and will expand to other countries starting in 2023. Simply put, this is technology built into connected TVs, which captures everything that is viewed, both content and ads, and regardless of source, whether linear or streamed. It is extremely valuable and unlocks unique capabilities such as targeting around content viewership, incremental reach, and frequency management across both linear and streaming environments within the household. Through this partnership, we have also renewed our relationship with LG, which spans ad serving, programmatic execution, and demand generation. This landmark deal also highlights the unique positioning Magnite has established in market around data enablement. While most major players in this category have reserved the use of their first-party data assets against only their own inventory, LG has opted to partner with Magnite and leverage the scaled and secure data enablement infrastructure we have spent years developing across our broader inventory footprint. This enhances LG's ability to scale their advertising business while protecting this incredibly valuable data asset. Other CTV growth drivers that keep us optimistic are Disney Plus' ad-supported tier, our strategic relationship with Group M continuing to scale, and the 2022 midterm election season, which is just starting to emerge in August and is likely to accelerate through early November. We are extremely well positioned to capture political dollars with our managed service team, as well as with partners such as the Scripps Political Consortium, where we are the exclusive SSP. Scripps is leading a group of premium publishers, including Cox Media Group, Capital Broadcasting Company, Grand Media Group, and other broadcasters to provide billions of monthly CTV impressions to Magnite available to political advertisers. On the DBplus side, we have identified key initiatives for growth and are working on delivering against them in the coming months. In the first half of the year, we have nearly doubled ad request volumes compared to last year. This is a key first step to driving higher conversion of these ad requests to ad spend. We have done this with tremendous efficiency and continuously lowering costs per ad request. Our AMI channel, I'm sorry, our AMI channel scale ability to serve all types of publisher inventories unmatched among independent SSPs, and is a key differentiator for Magnite. Our demand manager business continues to perform well. We've had very good traction recently with a number of large, notable publisher wins, such as Disney, Time, and BuzzFeed. These are expected to onboard over the next several quarters. We are pleased to see larger and more complex publishers increasing their adoption of demand manager and lean heavily on Magnite for yield optimization and monetization. Looking ahead to the second half of the year, our overall growth rate could be tempered by a macro environment that is challenging. However, we believe that we have unique drivers that will support further growth and prudent investments. We continue to hire key talent, invest in our CTV platform, build out more capabilities on the audience and identity front, introduce new ad server functionality, and optimize the DVplus business for better growth and market share gains. We believe we have all the key strategic pieces that we need across these areas. Additionally, our platform integration is progressing well with functionality expected to be completed this year and migration of customers beginning next year. I'm pleased that the strength in our business allows us, even in challenging times, to balance growth investments while continuing to deliver strong and improving financial results. Before turning the call over, I wanted to step back from the short term and provide some comments on Magnite and our position in the market. In the last two to three years, we have transformed Magnite into a half-a-billion-dollar revenue company, aiming at a billion as our next milestone. With a strategic and durable market position and a business model with a very attractive earnings and cash flow profile, This has been done through the combination of strategic M&A, as well as internal investment in organic growth. Most importantly, we have grown a CTV business that now represents 42% of our total revenue XTAC, up from 0% in 2019. With customers like Disney, Warner Brothers Discovery, Paramount, Samsung, Vizio, LG, Roku, DirecTV, Sling, and many more. I'm incredibly proud of what we've accomplished and built for the long term. With that, I'll turn the call over to David. David?