Magnite, Inc.

After today's remarks, there will be an opportunity to ask questions. To ask a question, you may press star, then 1 on your touchtone phone. To withdraw your question, please press star, then 2. Please note, this event is being recorded. I would now like to turn the conference over to Nick Kormeluk of Investor Relations. Please go ahead.

Thank you, operator, and good afternoon, everyone. Welcome to Magnet's second 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 subject to known and unknown risks, uncertainties, and other factors that may cause our actual results, performance, or achievement to be materially different from expectations or results projected or implied by forward-looking statements. The discussion of these and other risks, uncertainties, and assumptions is set forth in the company's specific reports filed with the SEC, including our second 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 extract for 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 insight to 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. Michael, please go ahead.

Thank you, Nick. It's been a very exciting 90 days or so since we last reported. We delivered strong Q2 results that once again exceeded our top-line guidance, and we reinforced our leadership in CTV with the Netflix win. We are absolutely thrilled to have been chosen by Netflix as a programmatic SSP partner. The deal has created significant momentum for our business with new and existing partners and customers asking us how we can do more for them and help them move faster into programmatic CTV advertising. Our win in the competitive moat we have built is a result of our investment in numerous features and capabilities that took years to assemble, integrate, and transform. It clearly demonstrates the breadth and depth of what we offer in CTV and validates the work we've been doing to create the world's leading holistic programmatic CTV platform. We look forward to supporting Netflix programmatic launch starting this summer and ramping throughout 2025, and we've been working at a feverish pace with them since the announcement in May. For the quarter, CTV contribution X-TAC grew 12% year-over-year, and DV Plus contribution X-TAC grew 7%. Key drivers of CTV performance were strong overall ad spend growth, increasing programmatic adoption by the industry's largest players, and ad-serving strength. Our ad spend for the quarter continued to pace above 20%. Regarding CPM trends in CTV, we've seen flight decreases year over year. However, we believe these are supply-driven by the largest industry players scaling their CTV inventory and not from a drop-off in demand. Volume increases have significantly offset CPM reductions, and we believe these trends of accelerating programmatic adaption will continue. The expansion of supply sources makes programmatic selling even more important. Lower CPMs and better targeting in programmatic CTV also help facilitate the entry of newer CTV buyers who may be more ROI and price sensitive. We believe these trends are very powerful in expanding industry programmatic participation and growing our accessible TAM. In addition to the Netflix win, I also want to highlight two of our other big partnerships. First is United Airlines. where we recently announced that Magnite will be the centralized ad platform for in-flight entertainment. This demonstrates our continued growth in the commerce media space with one of the largest airlines in the world choosing Magnite as their exclusive partner as they enter the programmatic advertising arena. The second is Roku, where we have announced an expansion of our seven-year partnership in support of powering the new Roku exchange. The Roku exchange connects to the programmatic ecosystem through an integration with Magnate. In addition to connecting Roku with third-party buyers, we're also providing them with incremental advertising opportunities through our ClearLine and agency marketplace solutions, as well as our demand facilitation team. ClearLine, our self-service direct buying platform, is continuing to gain adoption and we are seeing very good growth, albeit off of a small base. It has traction with numerous agencies and multiple brands that are in testing and early development. Our exclusive media ocean partnership also represents a big opportunity for Clearline, and we are launching our first campaigns with them this quarter. Our deep and evolving partnerships with the likes of Netflix, 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. In fact, some of the fastest-growing accounts this quarter included Roku, Warner, Disney, LG, and Paramount, with much of the growth coming from our SpringServe and Magnite streaming SSP combination, which gives us a big advantage as a programmatic-first partner relative to the competition and continues to differentiate us in market. Our tools are deeply embedded within our clients' workflow, whether it be creative review, ad potting logic, or audience tools. And from the client's perspective, the combined implementation of our ad serving capabilities and FSP looks more like a typical enterprise software solution. We believe 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. Our strategic partners view us as part of their core ad operations platform, and having more than one solution would complicate workflow and be comparable to running two ERPs or two CRMs. Now to DV+. Q2 once again finished strong with contributions XTAC growth of 7%. Our results continue to be driven by adding scale, improving efficiency through traffic shaping, improving monetization and performance with AI, and by investing in formats such as native, audio, podcasts, and digital out of home. On the AI front, You may have seen our release last Thursday about our new feature within Demand Manager using machine learning. The new feature finds the optimal configurations in a publisher's pre-bid wrapper per impression in real time. It has the potential to rapidly enhance billions of impressions to improve performance versus manual configuration. In the broader industry, as I'm sure you're aware, Google recently announced they will not deprecate third-party cookies. Frankly, we're not surprised with their decision given some of the challenges they've acknowledged with the rollout. In any event, we've done deep testing and work with Google so that we are prepared to support Privacy Sandbox for a future iteration of it for those that may want it. Although our position has always been that cookies being deprecated was not a meaningful risk for our business in the long term, we do believe the decision does relieve some short-term uncertainty and potential CPM volatility, so we view it as a net positive. Regardless of Google's decision, we continue to believe that a decreased reliance on third-party cookies and other non-transparent tracking methods are positive for the industry, and the future is bright for an identity model powered by sellers who are better positioned to obtain user data and consent for implementing first-party identifiers. In closing, we delivered a strong first half and are thrilled with the momentum in our business and the ever-growing roster of CTV partners that have selected Magnite. The strategic investments we've made to create the world's leading holistic programmatic CTV platform have clearly paid off, and we are excited about the acceleration in our growth rate in CTV for the remainder of the year. With that, I'll turn the call over to David for more details on financials.