Magnite, Inc.

Good day and welcome to Magnite Q1 2025 Warnings 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 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 Karmaluk in Investor Relations. Please go ahead.

Thank you, Operator, and good afternoon, everyone. Welcome to Magnite's first quarter 2025 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 first quarter 2025 quarterly report on Form 10-Q and our 2024 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 XTAC or less traffic acquisition costs, adjusted EBITDA, and non-GAAP net 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. Q1 came in very strong, and we exceeded total top-line guidance, with CTV growing 15% and DV Plus growing 9%. We saw a nice bounce back in DV Plus after Q4, showing how quickly ad spend can restart on our platform after a market slowdown. Adjusted EBITDA came in significantly above expectations at $37 million, growing 47%, representing an adjusted EBITDA margin of 25% versus 19% in Q1 last year. Our CTV business continued to produce excellent results in Q1, driven primarily by the industry's largest players' wider adoption of programmatic, continued traction with the agency marketplaces, and growth in live sports. Let me go one by one, starting with the industry's largest streamers, where we continue to deepen our relationships. Our most significant growth came from Roku, LG, Warner Brothers Discovery, Fox, Vizio, Walmart, and Netflix. Netflix continues to roll out their programmatic business globally, most recently in EMEA, with further expansion coming through the rest of the year. Magnite continues to be a critical part of Netflix's programmatic ad stack, and we remain bullish about the work we're doing together. These partnerships underscore the tremendous opportunity for Magnite and CTV, but as we said last quarter, that opportunity isn't available to legacy SSPs that don't have a purpose-built CTV ad server at the core of their platform. Two weeks ago, we widened our lead even further by unveiling the next generation of SpringServe. a unified solution that combines our ad server with the advanced programmatic capabilities of the Magnite Streaming SSP. Set for general availability this July, this new platform offers something truly differentiated. For buyers, a more efficient, transparent path to premium supply, and for media owners, streamlined workflows and smarter, more holistic yield optimization. As more budgets flow into CTV, marketers are asking for more control, better transparency, and the shortest possible path to inventory. By collapsing the ad server and SSP into one platform, we remove an entire step in the process, simplifying buying, improving signal, and helping advertisers place their message where they'll have the most impact. And for media owners, In addition to increased demand from buyers, the next generation of SpringServe provides intelligent ad decisioning and dynamic mediation, centralized deal management, and unified reporting through a single user interface. According to a recent independent study by Chounce Media, Magnite represents more than 99% of US streaming supply in the open internet. The new SpringServe is designed to make that inventory even more accessible drawing more investment into CTV and flowing more value back to publishers. In the agency marketplace, the response has been clear. Buyers like GroupM, Omnicom, and The Trade Desk have publicly voiced their support, as have sellers like Disney, Roku, Paramount, LG, Samsung, and Warner Bros. Discovery. And we've heard similar feedback from many other behind the scenes. All of this reinforces what we've said for some time. CTV advertising isn't display advertising, and it can't run on display-era infrastructure. The combination of our ad server and SSP gives Magnite a structural advantage, an integrated purpose-built stack designed for the way CTV actually works, and no other independent platform can match. Agency marketplaces, which are powered by our Clearline product, remain a bright spot for us. This has been a strong focal point for agencies, and Group M, Horizon, and Dentsu have been aggressively working on their differentiated marketplaces with the help of Magnite. Now to live sports. We saw strong growth again in Q1, driven by nearly 20 partners using our live stream acceleration technology. NCAA basketball continued to be an important live sports growth driver for Q1. Looking ahead, We're excited about major upcoming events across MLB, the NBA, and WNBA, NHL playoffs, as well as a wide range of college sports. We've also increased our international sports portfolio to include opportunities with FIFA Plus, Champions League, and Liga MK. On the product side, live sports is a top priority, and we are accelerating investment in enhancements to live event pacing, predictive pre-ad requests, and live ad retention. Stepping back, all these factors in CTV have led to further stabilization of our business mix and corresponding take rate. And we believe that they make CTV less sensitive to macro volatility for several reasons. First, programmatic CTV is TV advertising, but more targetable and measurable. And in lean times, advertisers always opt for more accountability from their ad spend. Secondly, programmatic TV is TV advertising without the upfront guarantee. In uncertain times, marketers still want to advertise, particularly in a TV-like environment, but are uncomfortable committing ad spend beyond the current quarter, which is the norm for linear TV. Programmatic CTV provides maximum spend flexibility, the TV environment marketers crave, and advanced analytics that can better track performance. And lastly, in Magnite's case, programmatic CTV growth rate is roughly double the growth rate of our DVplus business, and CTV represents over 40% of our total contribution XTAC revenue. So even in a macro slowdown, we'll outperform our peers who all lack meaningful revenue exposure to CTV. Now to DVplus. This business had a strong bounce-back quarter, growing 9% contribution ex-tax versus prior year. This was primarily driven by broad market recovery, with 10 of our largest 11 verticals posting strong growth, paced by technology, food and beverage, retail, and financials. We also remain excited about our opportunity in audio. In early April, Spotify announced its new Spotify ad exchange, Saks. and named Magnite a global partner for its programmatic offering. Magnite SpringServe will be integrated into SACS to power omnichannel advertising across audio, video, and native display for Spotify subscribers worldwide. Now let's pivot to AI. On the efficiency front, as we noted last quarter, our neural net and machine learning systems play a key role in cost-effectively scaling our infrastructure across both data centers and the cloud. These capabilities have contributed nicely to reductions in EBITDA OpEx, helping buyers achieve better outcomes on our platforms. On the product side, we're excited about the momentum building generative AI into our portfolio. Our AI-powered audience discovery feature in our Curator product is now live and gaining traction. and we have a robust pipeline of features and tools that will benefit from GenAI going forward. In addition, we are investing in the use of LLMs to make our supply under management more addressable, particularly in CTV, and we expect to begin rolling out these enhancements over the coming quarters. To conclude my comments, I want to dive deeper into the recent antitrust ruling against Google. which could potentially change the entire landscape of the open internet and drive significant upside for our DV Plus business. As you know, the court found that Google had engaged in illegal monopolistic practices with respect to its ad server and ad exchange, also known as an SSP. It's clear that for years, Google has been engaging in illegal practices that resulted in in an unfair auction within its ad server, which disproportionately drove volume through its SSP at the expense of rival SSPs like Magnite. The court has scheduled the remedy phase for September 22nd and has indicated that there will be attention to both behavioral and structural remedies. Although the specific timing and nature of remedies are still being debated, we are highly encouraged by the court's initial ruling on liability And we believe that it will be highly beneficial for the open internet, result in a more fair and transparent process, and drive greater returns for publishers and advertisers. We are looking forward to a more level playing field where all members of the ad tech industry have an equal chance to compete on their own merits. And we believe that a level playing field will significantly improve our opportunity to monetize publishers' inventory. and correspondingly increase our win rate. We estimate Google's exchange currently controls greater than 60% share in the DV Plus market. As the second largest player in the space, with share only in the mid single digits, and given our leading technology and deep publisher relationships, we believe that we are exceptionally well positioned to capture any shift in market share that occurs as a result of Google ceasing its illegal practices without changing our existing cost structure. With that, I'll turn the call over to David for more detail on financials.