Magnite, Inc.

Good day and welcome to the Mad Night Q4 2023 Earnings Conference Call. All participants will be in a 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 touchtone phone. 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 Kormeluk, Investor Relations. Please go ahead.

Thank you, operator, and good afternoon, everyone. Welcome to Magnite's fourth quarter 2023 earnings conference call. 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 2023 annual report on Form 10-K. We undertake no obligation to update forward-looking statements or relevant risks. Our commentary today will include non-GAAP financial measures, including contribution ex-tax 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 additional 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 and access our press release, financial highlights deck, periodic SEC reports, and the webcast replay of today's call to learn more about Magnite. I will now turn the call over to Michael.

Please go ahead. Thank you, Nick. I'm pleased to report results for Q4 that once again exceeded our top-line guidance for contribution X-TAC across all business lines while delivering very strong profitability and free cash flow. Our DV Plus business performed particularly well, delivering contribution X-TAC growth of 11%, and CTV rebounded nicely from Q3, exceeding the high end of our guidance. To start 2024, our momentum has been especially strong with our CTV business. We are encouraged to see these positive trends and are optimistic they will continue. We are pleased to report that we finished 2023 with total ad spend over $5 billion, representing growth approaching 20%. with CTV ad spend growing above 20% for the full year. For 2024, we expect ad spend growth to accelerate on a full year basis over 2023. We believe this represents continued market share gains for Magnite. Our CTV platform is best in class, which is validated by our strong and growing partnerships with the majority of the largest industry players, including Roku, Warner Brothers Discovery, Paramount, Disney, Fox, Samsung, LG, and Vizio. These partners continue to rapidly expand their programmatic advertising efforts and investments that will drive meaningful industry growth for the next several years, which we believe will fuel additional Magnite growth. Streamers just entering ad-supported programmatic such as Prime Video and the new sports partnership between ESPN, Fox, and Warner Brothers Discovery, all of which are important Magnet partners, are also going to drive industry growth and provide additional opportunities. As the market matures and the landscape of TV ad buying continues to evolve, we are very confident our role and the services we provide will expand. We believe we are uniquely suited to accelerate partner success in CTV based on our strong value proposition. There are a number of key reasons we are positioned to continue growing market share. Number one, we offer a complete solution, including the industry-leading programmatic CTV ad server, SpringServe, combined with the most advanced streaming platform, Magnite Streaming. Number two, we have industry-leading tools supporting sports and live advertising. Three, we offer advanced data and audience solutions. Four, we are facilitating the rapid growth of new buyers entering into the CTV ad market, including direct buying through our Clearline product. And last but certainly not least, five, we're independent. Today, I want to spend a little more time on CTV and sports, as this is a highly technical and complex part of the CTV ecosystem, where we have a strong offering and leadership position. Historically, almost all sports advertising has been done by sellers directly, but we believe this is a tremendous opportunity for us in the future as more of this inventory goes programmatic. This remains a key investment area for us. In sports, you have an extremely valuable and engaged audience that can spike exponentially at any moment, making it ideal for programmatic. Delivering real-time demand that matches the viewing audience and meets all the complex TV rules takes massive scale and technical execution that greatly exceeds typical programmatic CTV needs. Our technology is unrivaled with features such as LSA, or live sports acceleration, a technology that helps better monetize live inventory by increasing ad pod fill rates without impacting the user experience. We support all of the largest sporting events, including all of the major North American professional leagues, NFL, NBA, MLB, and NHL, college football and basketball, international events such as the Olympics, Cricket World Cup, and World Cup Soccer, in other sports such as tennis and golf. Beyond our prowess in sports, our publisher partners are increasingly reaping the benefits of our holistic solution, which leverages our ad server and SSP to enhance monetization and efficiency. Much of our CTV business is enabled through advanced integrations with our ad server. As a reminder, ad serving puts us one step closer to the publisher and creates a stickier relationship. With SpringServe, our platform is deeply embedded within the client workflow and becomes a central technology in their overall monetization strategy. Now, more than three quarters of our streaming partners use both our SpringServe technology and SSP services. That compares to less than 50% at the time of the SpringServe acquisition. The wins at SpringServe also keep coming, especially on an international basis. The most recent additions or expansions include iHeart, Virgin Media, Whirl, and Crackle, to name a few. In CTV, we saw Amazon make a big move by opting all Prime Video viewers into an ad-supported tier in late January. This is part of a continuing trend. Premium streaming platforms adopting ad-supported tiers. We believe Prime Video launching an ad-supported tier will be a lift for the whole streaming ecosystem, including Magnet. Let me explain. Prime Video has a reported 200 million subscribers. That is a massive scale. Linear-only advertisers can't ignore that reach. Therefore, more linear dollars will shift to streaming. Of course, the top TV advertisers will be a part of this shift, but more importantly, Prime Video will drag over thousands of Amazon merchants into CTV. And these merchants are used to purchasing ad inventory programmatically with advanced targeting. This cohort will help realize streaming's capabilities, advanced performing targeting and scale. Over time, these advertisers will sample other platforms to drive performance results. This will help the entire ecosystem. But Magnite does not have to wait for this transition to occur to benefit from Prime Video's ad tier. Amazon syndicates more broadcaster and cable content than any other streaming service. By some accounts, 50% of all Prime Video content consumed is broadcast and cable shows. Our broadcast and cable partners rely on us to monetize their share of this inventory. So as their ad supply grows on Prime Video, so too do our revenue opportunities. We have already seen a surge in partner inventory. We expect prime success will be greatly driven by the syndicated content, and Magnite is perfectly positioned to participate in these economics. Now, moving over to DV+. We finished the year with growth of 10%, capped by 11% contribution extract growth in Q4. I am incredibly proud of our team's efforts and extreme focus on buyer engagement buyer's needs to drive these results. We're also improving monetization for sellers by investing in formats such as native, audio, podcasts, and digital out-of-home. Our roadmap of new product innovation in DVPlus has never been stronger in the seven years I've been at the helm at Backday. Our growth in DVPlus has also been supported by our adoption of AI. Our technology uses AI to filter the best impressions out of the more than 1 trillion ad requests per day in order to deliver the highest ROI to the right client over and over and over. We also continue to invest in other AI tools that we have built into our client solutions, such as Demand Manager, which uses machine learning for dynamic auction optimization and management of price floors to lift revenues. In industry development, which has received a lot of attention, is Google's plan to deprecate third-party cookies this year. We have been preparing and are ready for the next chapter in the cookie-less world. We intend to fully support privacy sandbox as well as all the other leading alternative identity solutions. In addition, we are continuing to invest in our own audience capabilities to help publishers better monetize their first-party data. Ultimately, we believe the elimination of third-party cookies will strengthen our market position as competitors will struggle to support new third-party solutions and do not possess the scale necessary to support first-party segment creation. In closing, we feel very good about our business, particularly driving a return to growth in CTV. Now that our platform consolidation is in the rearview mirror, we are in a position to focus our engineering and product efforts exclusively on delivering cutting-edge tech that will further cement our leadership position in the industry. With that, I'll turn the call over to David for more detail on the financials. David?