Magnite, Inc.

Good day and welcome to Magnite third quarter 2024 earnings call. All participants will be in the 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 Kormeluk, Investor Relations. Please go ahead.

Thank you, Operator, and good afternoon, everyone. Welcome to Magnite's third 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 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 third 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 extracts, 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 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, Michael.

Thank you, Nick. We are pleased to deliver another strong quarter of CTV growth and a strong beat on adjusted EBITDA, allowing us to boost full-year numbers. For the quarter... Our year-over-year growth rate in contribution ex-tac from CTV accelerated to 23% from a 12% growth rate in Q2. Strong CTV performance is driven by overall ad spend growth, increasing programmatic adoption by the industry's largest players, ad serving strength and solid contribution from political. Our growth rates in contribution ex-tac from CTV and ad spend have significantly narrowed, showing a stabilization in our mix and corresponding take rate. Robust programmatic CTV adoption is also continuing across a broad set of partners. As volumes continue to scale and CPM pressures persist, our clients are increasingly looking for us to help them add value to their inventory by layering on data to target and segment audiences. It is critically important for these partners to utilize programmatic selling to reach all demand sources, including SMB advertisers that didn't historically play in linear. We believe these trends are very powerful in expanding industry usage of programmatic and growing our accessible TAM. Partners more fully embracing programmatic include Roku, Netflix, Paramount, Warner Discovery, and Disney. Next, I want to highlight our Netflix and Disney partnerships. Netflix's rollout of Magnite-powered programmatic solutions continues to ramp, and we anticipate the partnership to grow in revenue contribution through 2025. We recently announced a two-year extension and expansion of our relationship with Disney. The recently signed deal now expands our partnership to include live sports like college football, the Latin American region, and podcasts for ESPN and ABC News. We will also make Disney inventory available through Clearline. Magnite will continue to be a key partner for Disney in the years to come, and we are pleased to further broaden our partnership. We are also seeing a nice boost from live sports to summer and fall. Recent areas of growth are college football, NFL, from the top MVPDs, and Olympics internationally. This is a market that is beginning its journey to programmatic, and our industry-leading tech offering, combined with our scale to monetize real-time inventory, is unmatched. We expect growth in live TV and live sports to continue with more sports and more partners in the coming years. This is a key investment focus for the company. We are optimistic about the commerce media vehicle being a powerful long-term growth driver, and I'm working many new opportunities in this space. Our partnership with United Airlines announced this summer is progressing well. We are now powering ad serving on personal devices on hundreds of planes, and look forward to expanding beyond personal device entertainment to include feedback screens in 2025. Clearline, our self-service direct buying platform, is continuing to grow and gain traction. We now have more than 20 agencies and brands buying through Clearline and continue to ramp their efforts. I want to double-click on our CTV ad-serving business which has been operating at nearly twice the ad impression volume from a year ago. Our software is deeply embedded within our partner workflows and go-to-market solutions as a core part of their operations, comparable to enterprise software solutions. It's very sticky and allows us to provide superior overall monetization. Our market leadership position in CTV continues to get stronger and we remain extremely focused on innovative features and services that will extend our lead into the future. Evidence of this is our deep and evolving partnerships with the likes of Netflix, Disney, Roku, Warner Brothers Discovery, Paramount, Fox, Samsung, LG, and Vizio. The fastest growing accounts this quarter included Roku, Warner Brothers Discovery, Disney, and LG. A solid portion of this growth comes from our SpringServe and Magnite streaming SSP combination, which gives us a competitive advantage as a programmatic first partner and is a major differentiator. Now to DV+. Q3 once again finished in line with our expectations, with contribution XTAC growth of 5%. Contributing to growth are investments in emerging formats such as native, audio, podcasts, and digital out-of-home. Our volume of ad requests continues to grow, and we continue to get much more efficient with our cost per ad request coming down by approximately 30% versus last year. Our improving efficiency is driven by filtering, traffic shaping, and AI. Another tailwind aiding our DV Plus and CTV businesses is is the increased importance of sell-side audience aggregation, a practice that is commonly referred to as curation. In simple terms, curation is the selective packaging of ad inventory using audience data to help advertisers reach audiences they might otherwise miss. For sellers, it means driving substantially higher yields on impressions that might have gone unsold. As Ad Age recently noted, there's an ongoing industry shift toward curation on the sell side, and it's being fueled in part by signal loss on the demand side, where data collection is becoming more restricted due to privacy changes in browsers and devices. We'd add to this that within the sell side, there's no better home for curation than the SSP. where it's easiest for premium publishers to lie with their peers to attract spend they'd have a harder time getting individually. In fact, Magnite's revenue from curating publisher audiences has grown over 100% year over year. It's early days, and we anticipate this growth to continue for the foreseeable future, given our strong tool set and unrivaled publisher footprint. Just last week, A Forrester report evaluating 10 SSPs highlighted curation as one of the top three capabilities publishers should prioritize to drive higher yields and differentiate themselves. Not only did Magnite receive the highest possible score for curation, but I'm proud to say we also achieved the highest overall score for the totality of our current offerings. Expanding our leadership and curation is critical and is another example of how our omni-channel footprint will enable capabilities for both CTV and DV Plus that no one else has and will drive outsized market share gains. In closing, we delivered strong Q3 results and Q4 guides. The strategic investments we've made to create the world's leading programmatic CTV platform are clearly paying off. We are confident about a strong finish to the year. It's an exciting time for the role of programmatic in the evolution of CTV advertising. And as the industry scales and evolves to bring in thousands of new buyers, we are also optimistic about 2025 as programmatic continues to gain steam at CTV We ramp up new and existing partners and see continued acceleration in sports and further growth of Clearline. With that, I'll turn the call over to David for more detail on the financials. David?