Magnite, Inc.

Good day and welcome to the MAGNITE First Quarter 2024 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 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 hand the call to Nick Kormeluk of Investor Relations. Please go ahead.

Thank you, operator, and good afternoon, everyone. Welcome to Magnite's first quarter 2024 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 are subject to known and unknown risks, uncertainties, and other factors It 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 2024 quarterly report on Form 10-Q and 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 the 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 to 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 that results for Q1 once again exceeded our top line guidance for contribution XTAC across all business lines, particularly CTV, which grew 18% in the quarter. Our DV plus business also performed very well delivering contribution XTAC growth of 9%. We've had a great start to 2024 and an exceptionally strong March and remain optimistic that positive trends will continue throughout the year. Our best-in-class CTV platform benefited from a number of key accelerators. Last quarter, we emphasized the strength of our platform in handling live sports. In the quarter, this was demonstrated through strong performance in NCAA basketball March Madness, proving how valuable Magnite is as a monetization partner for this highly sought-after inventory. Our ad-serving business, SpringServe, also delivered stellar results from new wins and ramping partners and continues to be a strong differentiator for us and highly strategic. The combination of SpringServe and our Magnite Streaming SSP makes us much more than just a conduit for demand. We offer a complete solution that includes ad serving, yield monetization, audience capabilities, and a host of tools to protect the consumer viewing experience and honor complex rules around competitive separation and frequency capping. We are also deeply embedded within our client's workflow. So from their perspective, this combined implementation of our ad server and SSP looks more like a typical enterprise software solution. This stickiness creates a meaningful moat and barrier to entry for others. And in our case, The barrier is not just workflow from ad operations, it is also in the form of superior monetization. For all of these reasons, we believe having the best streaming first ad server and the most technologically advanced SSP combined in one offering gives us a significant market advantage in retaining, expanding, and winning new businesses. We've been really excited to build on our U.S. leadership position by expanding SpringServe globally with new wins internationally and broadening existing partnerships. These wins and ramping customers include Titan for Philips operating system, Barca One, Barcelona Football Club streaming app, Altice France, and YTV Japan, a leading Japanese broadcaster. ClearLine, Our self-service direct buying platform is continuing to gain traction, and we have numerous agencies and multiple brands testing and transacting through Clearline. Of particular note, we were very excited to announce an expansion of our MediaOcean partnership to include an exclusive deal for CTV buying through Clearline. MediaOcean represents over $200 billion in total spend and their products are deeply integrated into the linear TV and media buying workflows of agencies and brands. Through this partnership, linear TV buyers will be able to use the MediaOcean planning tool to directly buy CTV inventory through ClearLine, specifically targeting a large $60 billion-plus U.S. linear TV total addressable market for us to be able to convert into CTV ad buys. In addition, through feedback from our various agency partners, we are hard at work on building and launching additional features and functionality in Q2 in preparation for live sports programming like the Summer Olympics, NFL, and college football, as well as the fall elections. Now stepping back to look a little bit more broadly at the CTV market. Recently, some attention has been given to the advent of DSPs connecting directly to sellers in the connected TV landscape. Some observers have been anxious about what this means for sell-side platforms like Magnite. Our perspective, backed by both data and experience, leaves us more optimistic than anxious. It's important to remember that the concept direct connections isn't new. The Trade Desk introduced OpenPath across display and video just over two years ago, sparking similar concerns. Despite this, our DVplus business has continued to gain share, and we have accelerated our growth rate year over year. This experience strengthens our confidence. While some large media owners are likely to test or adopt a dual pipeline approach to drive incremental programmatic demand, We believe differentiated SSPs like Magnite will continue to thrive for the following reasons. First, it's about values and incentive alignment. Demand-side platforms are, by definition, incentivized to prioritize the needs of advertisers and agencies over anyone else. In contrast, SSPs like Magnite are built to help the sell-side win, full stop. Everything we do is through this lens, including the guidance we give on a daily basis and the tech we provide for complex operations such as billing, collections, reconciliation, fraud protection, and of course, yield management. Second reason relates to holistic yield management. SSPs are uniquely positioned to help media owners optimize yield decisions holistically, leveraging data, and AI insights to maximize clients' revenue across all formats and channels. The larger, more global, and more technically comprehensive the SSP, the more effective it is. And Magnite is uniquely positioned on all these fronts. The third reason is a universal, more efficient, safer publisher deal environment. A universal deal library, such as what we provide for many of our seller clients, enhances deal value by ensuring broader and more equitable demand access. The alternative under a direct connect scenario is multiple deal libraries in each connected DSP, resulting in buyer inefficiency, potential data leakage, and poor user experience. Number four is all about the ability to capture demand from a growing number of diversified streaming advertisers. We are in the early stages of CTV advertising, and the focus, rightfully so, is capturing linear dollars spent by broadcast advertisers. Today, a handful of DSPs handle this business. But that isn't the future. The future is 5,000-plus advertisers, not 500. These digital-first advertisers will demand precise targeting in a biddable environment and will partner with a host of DSPs in buying tools. It will be impossible. for a streaming publisher to directly connect all of this demand without absorbing huge build-out costs for no economic value. These publishers will lean on a tech partner that can easily integrate this disparate demand and ensure the best yield. Magnite's combination of SSP and ad server uniquely positions us as the monetization partner of choice for CTV publishers. And the last reason is our unique demand. Magnite's strategic agency deals, managed service operations, clear line demand, and partnerships like our exclusive deal with Mediocean represents a vital part of publisher revenue streams, and this revenue only flows through our SSP pipes. It's also important to mention that almost any direct DSP implementation is integrated through SpringServe. either as the primary ad server or as the programmatic layer sitting on top of third-party ad servers. So, while the disintermediation narrative makes for a nice headline, Magnet continues to participate in the economics. Our deep partnerships with the likes of Disney, Roku, Warner Brothers Discovery, Paramount, Fox, Samsung, LG, and Vizio ensure we have a valuable long-term role in the growth of the CTV market. We are excited to enter the 2024 upfront season during which a majority of these partners will continue to expand their programmatic advertising efforts as it relates to CTV ad sales. Now moving over to DV Plus. Q1 once again finished strong with revenue extract growth of 9%. Our results continue to be driven by extreme focus on buyers, improving monetization for sellers, improving performance with AI, and investing in formats such as native, audio, podcasts, and digital out of home. As you are aware, Google recently announced yet another delay in its deprecation of third-party cookies. The announcement was not unexpected, and notwithstanding the delay, we will continue to do testing and work with Google so that we are prepared to fully support Privacy Sandbox when it eventually launches. In addition, we believe we have built the industry's best technology platform to help publishers better monetize their first-party data. Ultimately, we believe the elimination of third-party cookies will greatly strengthen our market position as other SSP competitors will struggle to support new third-party solutions and do not possess the scale or strategic proximity to publishers necessary to support first-party segment creation. Our DV Plus scale continues to grow as we add new publishers and see over 1.2 trillion ad requests daily, offering the broadest and most efficient customized supply of inventory for our DSPs and brands to find and target the users they are looking to reach. In closing, we are excited about the business we have built and off to a great start to 2024. The prospects for Magnite and our growth opportunities are very strong. With that, I'll turn the call over to David for more detail on the financials. David?