Magnite, Inc.

Good day and welcome to the Magnite Q2 2025 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 a touch-tone 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 Kormelik in Investor Relations. Please go ahead.

Thank you, operator, and good afternoon, everyone. Welcome to Magnite's second quarter 2025 earnings conference call. As a reminder, this conference 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 first and second quarter 2025 quarterly reports on Form 10Q and our 2024 annual report on Form 10K. We undertake no obligation to update forward-looking statements or relevant risks. Our commentary today will include non-GAAP financial measures, including contribution extact or less traffic acquisition costs, adjusted EBITDA, and non-GAAP income per share. Reconciliation 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 to access our press release, financial highlights deck, periodic SEC reports, and the webcast replay of today's call to learn more about Magni. I will now turn the call over to

Michael. Please go ahead, Michael. Thank you, Nick. Q2 came in strong and we exceeded total top-line guidance with CTV contribution extact growing 14% or 15% excluding political and DV Plus growing 8%. Adjusted EBITDA also came in significantly above expectations at $54 million, growing 22% with a margin of 34% versus 30% in Q2 last year. Our CTV business continued to produce strong results driven by new and expanding partnerships, positive SMB trends, growth in agency marketplaces, and programmatic growth in live sports. Let's 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, Netflix, LG, Warner Brothers Discovery, and Paramount this quarter. Warner Brothers Discovery announced their Neo platform during the up front in Q2. This is a new programmatic platform that allows CTV buyers direct access to WBD's entire premium video inventory through one simplified and intuitive user interface. The programmatic component is powered by Magni. One of the most compelling future sources of CTV growth will be mid-sized direct to consumer brands and we see that trend gaining momentum now. This segment of the market has been unlocked by a number of critical factors. The technology to run programmatically has matured and been implemented by the largest publishers. Inventory is scaled and CPMs have normalized to drive higher return on ad spend. Additionally, AI has dramatically reduced ad creative production costs and targeting All making CTV become a desired and high performing channel delivering strong results for digital first advertisers. We are very pleased to see an SMB focused DSP partner Mountain go public this quarter which further shows that the entry of SMBs into CTV is very real. We see the SMB segment exploding over the next three to five years through newer specialized DSPs like TV Scientific, Vibe, Streamer and more and they'll all need access to premium CTV supply through an integrated ad server and SSP. That's exactly where Magnite is positioned to lead with its spring serve product. We continue to deepen our partnerships with the largest agency Holdcos as we recently announced another buyer marketplace with Dentsu and EMEA. This continues to show our unique strength with agencies who can leverage our end to end technology to create curated packages of CTV inventory to drive greater returns for their clients. Next I'll talk about live sports. You've heard me say that we are in the early days and that remains true. However, each year we cycle a sports season programmatic grows as an effective go to market tool to sell more inventory. I would position this as a growth opportunity that is great promise with most of the leading players choosing Magnite due to our unparalleled tech and continued commitment to invest in this area. Our newly announced deal with FanDuel Sports Network who produces over 3,000 live sporting events year round in local markets is yet another example of a partner who chose Magnite and is already operating at scale. On the CTV technology front we moved to general availability for our combined CTV platform with streaming and ad serving now branded as SpringServe. As a reminder this is a unique combination of our ad serving streaming platform that truly gives us a competitive advantage while improving our internal operating efficiency. Now to DVPlus. DVPlus contribution XTAC was up 8% this quarter driven mostly by new product functionality and also by early contributions from recently announced partners. Additional publisher launches that are expected to start or ramp this year include Spotify, T-Mobile and Redfin. We're also seeing share gains in DVPlus from some of the largest DSPs. We have also seen significant success in the commerce media space. Our expanded partner list now includes Western Union, PayPal and Connected Media by United Airlines as well as recently announced Remax. We will be monetizing Remax's on-site digital inventory and activating their home buyer by our curation tools. Look for commerce media to be a continued growth area for Magnite. On the DSP side Magnite continues to benefit from supply path optimization. DSPs are rapidly consolidating their spend to a handful of platforms, platforms that can provide access to all types of programmatic media in a safe and transparent environment. Magnite is uniquely positioned to capitalize on this spend consolidation. A great example of this is our growing partnership with Amazon both as a DSP and a publisher. We've mentioned before that Magnite is one of only three platforms approved for Amazon DSP spend which has resulted in significant growth. As a publisher we are thrilled they chose us to help monetize their own inventory on their Fire platform. We believe this is a strong indication of how important Magnite is to generating demand in the CTV ecosystem. We're pleased to report continued growth in our Curator product. Our Curator marketplace enables global holding companies, data providers, and specialized curators where they focus on contextual targeting, optimization, or advanced creative execution to operate and scale their businesses seamlessly on our platform across all inventory types and screens. Since the start of Q2 we've onboarded almost 50 curators with the vast majority transacting across multiple formats including CTV, display, and online video. This momentum underscores the market demand for sophisticated curation tools that live on the supply side. Shifting to an update on AI, we continue to develop and embed AI capabilities as a core product focus. I'll provide an update on some of the capabilities we highlighted on our previous call as well as some new offerings. First, we expanded our neural net and machine learning systems to shape the outbound connections to our CTV buyers. Our industry leading traffic shaping sends the most relevant available supply to bandwidth constrained DSPs allowing them to more efficiently discover inventory and increase their spend on our platform. Second, our AI powered audience discovery feature within our Curator marketplace tool is expanding to incorporate third party data in addition to our proprietary segments making it even easier for users to identify high value audiences aligned with their campaign objectives. And third, we're in the process of launching an LLM that uses AI to automatically categorize CTV inventory into contextual segments making it more addressable and driving increased campaign reach and monetization compared to current manual categorization methods. We're very excited with the progress we've made in incorporating AI into our technology and will continue to roll out AI agents and automated optimization as core components of our product roadmap. The last topic I want to briefly cover is the antitrust ruling against Google in the DOJ case which we believe will likely change the entire landscape of the open internet and drive significant upside for our DV plus business. As a reminder, 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 an unfair auction within its ad server which disproportionately drove volume through its SSP at the expense of rival SSPs like Magnite. The court also found that Google had illegally leveraged their control of advertising demand to artificially prop up their own ad exchange and prevent publishers from freely choosing what SSPs or ad server to work with. We are highly encouraged by the court's ruling and believe that it will drive beneficial changes to the open internet and result in a more fair and transparent process that yields greater returns for publishers and advertisers. We remain focused on preparing our business for potential outcomes of the remedy phase which is set to commence on September 22nd. In their initial filings, the DOJ is seeking both structural and behavioral remedies. On the structural side, they are seeking a divestiture of both Google's SSP and ad server. On the behavioral side, they have proposed a series of remedies to address Google's unfair auction practices as well as prohibitions on preferential routing of advertising demand or tying demand access to publishers' use of Google's supply side products. While with specific timing and nature the remedies remain uncertain and Google has already indicated an intent to appeal a decision, we believe any remedy that results in a more level playing field will be highly beneficial for our business and significantly improve our opportunity to monetize publishers' inventory and correspondingly increase our win rate. It is very possible that market share could begin to shift away from Google as soon as early 2026 as there have been indications that behavioral remedies will be implemented even during an appeals process. We estimate Google's exchange currently controls close to 60% share in the DV Plus market. As the second largest player in this 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 legal practices without any meaningful changes to our existing cost structure. Based on our estimates of the market, we expect that every 1% share shift in the market could result in 50 million of additional contribution extra on an annualized basis. One last thing to note, while the court's findings are focused on equitable remedies going forward, any civil damages that we could potentially realize would require us to file a separate action, which we believe has significant merit. Before turning the call over to David, I want to point out that even with some lingering tariff pressures, we are expecting to see second half 2025 growth rates accelerate, especially when looking at CTV ex-political. We also intend to continue to invest in our live TV, clear line and curation offerings as we believe these represent a very attractive growth area where we can increase our market share. With that, I'll turn the call over to David for more details on the financials.