Magnite (Nasdaq: MGNI), the world's largest independent sell-side
advertising platform, today reported its results of operations for
the quarter ended March 31, 2022. First quarter 2022 financial
results of Magnite represent the combined performance of Magnite,
SpotX, and SpringServe. First quarter 2021 comparative numbers do
not include results from SpotX and SpringServe, unless noted as
pro-forma(1).
Recent Magnite Highlights
- Revenue of $118.1 million for Q1 2022,
up 94% from Q1 2021
- Revenue ex-TAC(2) of $107.1 million for
Q1 2022, up 79% from Q1 2021 and up 15% on a pro-forma
basis(1)
- Revenue ex-TAC(2) attributable to CTV
of $42.3 million for Q1 2022, up 253% year-over-year, and up 27% on
a pro forma basis(1)
- Net loss of $44.6 million in Q1 2022,
for a loss per share of $0.34, compared to net loss of $12.9
million, for a loss per share of $0.11 in Q1 of 2021
- Adjusted EBITDA(2) was $28.8 million in
Q1 2022, up 208% over Adjusted EBITDA of $9.4 million in Q1 of
2021
- Adjusted EBITDA margin in Q1 2022 was
27%(4)
- Non-GAAP earnings per share(2) of $0.08
for Q1 2022, compared to non-GAAP earnings per share of $0.03 for
Q1 of 2021
- Operating cash flow(5) in Q1 2022 was
$20.1 million
Expectations:
- Revenue ex-TAC(2) for Q2 2022 to be
between $123 million and $127 million
- Revenue ex-TAC(2) attributable to CTV
for Q2 2022 to be between $51 million and $53 million
- Adjusted EBITDA operating expenses(3)
to be between $83 and $85 million for Q2 2022
- Maintain that revenue ex-TAC(2) for
full year 2022 to be well over $500 million
- Maintain that free cash flow(6) for the
full year 2022, after capital expenditures and cash interest
payments, to exceed $100 million
- Maintain that total capital
expenditures for 2022 to be approximately $40 million to $45
million
“We are pleased with the strong CTV and DV+ revenue growth in
Q1, resulting in outperformance on EBITDA margins and solid bottom
line results. We continue to build upon our leading independent CTV
capabilities and market leading position, and continue to add scale
to better serve our existing customers, and win new customers in
this exciting market. We expect solid growth in Q2 and further
growth acceleration in the second half of the year, with many
contributing growth drivers. We believe that the biggest
opportunities in the CTV market are still ahead of us.” said
Michael G. Barrett, President and CEO of Magnite.
First quarter
2022 Results Summary |
|
|
|
|
(in millions, except
per share amounts and percentages) |
|
|
|
|
|
Three Months Ended |
|
March 31, 2022 |
|
March 31, 2021 |
|
ChangeFavorable/
(Unfavorable) |
Revenue |
$ |
118.1 |
|
|
$ |
60.7 |
|
|
94 |
% |
Revenue ex-TAC(2) |
$ |
107.1 |
|
|
$ |
59.9 |
|
|
79 |
% |
Gross profit |
$ |
58.7 |
|
|
$ |
40.0 |
|
|
47 |
% |
Net income (loss) |
$ |
(44.6 |
) |
|
$ |
(12.9 |
) |
|
(246 |
)% |
Adjusted EBITDA(2) |
$ |
28.8 |
|
|
$ |
9.4 |
|
|
208 |
% |
Adjusted EBITDA operating
expenses(3) |
$ |
78.2 |
|
|
$ |
50.5 |
|
|
(55 |
)% |
Adjusted EBITDA margin(4) |
|
27 |
% |
|
|
16 |
% |
|
11 ppt |
|
Basic earnings (loss) per
share |
$ |
(0.34 |
) |
|
$ |
(0.11 |
) |
|
(209 |
)% |
Diluted earnings (loss) per
share |
$ |
(0.34 |
) |
|
$ |
(0.11 |
) |
|
(209 |
)% |
Non-GAAP earnings (loss) per
share(2) |
$ |
0.08 |
|
|
$ |
0.03 |
|
|
167 |
% |
Footnotes: |
(1 |
) |
Pro forma comparisons include
SpotX and SpringServe results for Q1 2021. |
(2 |
) |
Revenue ex-TAC, Adjusted EBITDA,
Adjusted EBITDA operating expenses, and non-GAAP earnings (loss)
per share are non-GAAP financial measures. Please see the
discussion in the section called "Non-GAAP Financial Measures" and
the reconciliations included at the end of this press release. |
(3 |
) |
Adjusted EBITDA operating
expenses is calculated as Revenue ex-TAC less Adjusted EBITDA. |
(4 |
) |
Adjusted EBITDA margin is
calculated as Adjusted EBITDA divided by Revenue ex-TAC. |
(5 |
) |
Operating cash flow is calculated
as Adjusted EBITDA less capital expenditures. |
(6 |
) |
Free cash flow is defined as
operating cash flow (AEBITDA less Capex) less cash interest
payments. |
First quarter 2022 Results Conference Call and
Webcast:
The Company will host a conference call on May 4, 2022 at
1:30 PM (PT) / 4:30 PM (ET) to discuss the results for its first
quarter of 2022.
Live conference call |
|
Toll free number: |
(844) 875-6911 (for domestic
callers) |
Direct dial number: |
(412) 902-6511 (for
international callers) |
Passcode: |
Ask to join the Magnite
conference call |
Simultaneous audio
webcast: |
http://investor.magnite.com under "Events and
Presentations" |
|
|
Conference call
replay |
|
Toll free number: |
(877) 344-7529 (for domestic
callers) |
Direct dial number: |
(412) 317-0088 (for
international callers) |
Passcode: |
1117246 |
Webcast link: |
http://investor.magnite.com under "Events and
Presentations" |
About MagniteWe’re Magnite (NASDAQ: MGNI), the
world’s largest independent sell-side advertising platform.
Publishers use our technology to monetize their content across all
screens and formats including CTV, online video, display, and
audio. The world’s leading agencies and brands trust our platform
to access brand-safe, high-quality ad inventory and execute
billions of advertising transactions each month. Anchored in
bustling New York City, sunny Los Angeles, mile high Denver,
historic London, and down under in Sydney, Magnite has offices
across North America, EMEA, LATAM, and APAC.
Note: Magnite and the Magnite logo are service marks of Magnite,
Inc.
Forward-Looking Statements:This press release
and management's prepared remarks during the conference call
referred to above include, and management's answers to questions
during the conference call may include, forward-looking statements,
including statements based upon or relating to our expectations,
assumptions, estimates, and projections. In some cases, you can
identify forward-looking statements by terms such as "may,"
"might," "will," "objective," "intend," "should," "could," "can,"
"would," "expect," "believe," "design," "anticipate," "estimate,"
"predict," "potential," "plan" or the negative of these terms, and
similar expressions. Forward-looking statements may include, but
are not limited to, statements concerning acquisitions by the
Company, including the acquisition of SpotX, Inc. ("SpotX," and
such acquisition the "SpotX Acquisition"), or SpringServe, LLC
("SpringServe," and such acquisition the "SpringServe
Acquisition"), or the anticipated benefits thereof; statements
concerning potential synergies from the Company's acquisitions;
statements concerning the potential impacts of the COVID-19
pandemic on our business operations, financial condition, and
results of operations and on the world economy; our anticipated
financial performance; anticipated benefits or effects related to
our completed merger with Telaria, Inc. in April 2020 ("Telaria"
and such merger the "Telaria Merger"); key strategic objectives;
industry growth rates for ad-supported connected television ("CTV")
and the shift in video consumption from linear TV to CTV;
anticipated benefits of new offerings; the impact of transparency
initiatives we may undertake; the impact of our traffic shaping
technology on our business; the effects of our cost reduction
initiatives; scope and duration of client relationships; the fees
we may charge in the future; business mix; sales growth; benefits
from supply path optimization; the development of identity
solutions; client utilization of our offerings; our competitive
differentiation; our market share and leadership position in the
industry; market conditions, trends, and opportunities; certain
statements regarding future operational performance measures; and
other statements that are not historical facts. 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. Risks
that our business faces include, but are not limited to, the
following: our ability to realize the anticipated benefits of the
Telaria Merger, SpotX Acquisition, SpringServe Acquisition, and
other acquisitions; the severity, magnitude, and duration of the
COVID-19 pandemic, including impacts of the pandemic and of
responses to the pandemic by governments; the impact of inflation
and supply chain issues on the advertising marketplace; our CTV
spend may grow more slowly than we expect if industry growth rates
for ad supported CTV are not accurate, if CTV sellers fail to adopt
programmatic advertising solutions or if we are unable to maintain
or increase access to CTV advertising inventory; we may be
unsuccessful in our supply path optimization efforts; our ability
to introduce new offerings and bring them to market in a timely
manner, and otherwise adapt in response to client demands and
industry trends; uncertainty of our estimates and expectations
associated with new offerings, including the CTV ad server product
that we recently acquired in the SpringServe Acquisition and our
developing identity solutions; we must increase the scale and
efficiency of our technology infrastructure to support our growth;
the emergence of header bidding has increased competition from
other demand sources and may cause infrastructure strain and added
costs; our access to mobile inventory may be limited by third-party
technology or lack of direct relationships with mobile sellers; we
may experience lower take rates, which may not be offset by
increases in the volume of ad requests, improvements in fill-rate,
and/or increases in the value of transactions through our platform;
the impact of requests for discounts, fee concessions, rebates,
refunds or favorable payment terms; our history of losses, and the
fact that in the past our operating results have and may in the
future fluctuate significantly, be difficult to predict, and fall
below analysts' and investors' expectations; the effect on the
advertising market and our business from difficult economic
conditions or uncertainty; the effects of seasonal trends on our
results of operations; we operate in an intensely competitive
market that includes companies that have greater financial,
technical and marketing resources than we do; the effects of
consolidation in the ad tech industry; the growing percentage of
digital advertising spend captured by closed "walled gardens" (such
as Google, Facebook, Comcast, and Amazon); our ability to
differentiate our offerings and compete effectively to combat
commodification and disintermediation; potential limitations on our
ability to collect or use data as a result of consumer tools,
regulatory restrictions and technological limitations; the
development and use of new identity solutions as a replacement for
third-party cookies and other identifiers may disrupt the
programmatic ecosystem and cause the performance of our platform to
decline; the industry may not adopt or may be slow to adopt the use
of first-party publisher segments as an alternative to third-party
cookies; our ability to comply with, and the effect on our business
of, evolving legal standards and regulations, particularly
concerning data protection and privacy; failure by us or our
clients to meet advertising and inventory content standards; the
freedom of buyers and sellers to direct their spending and
inventory to competing sources of inventory and demand and to
establish direct relationships and integrations without the use of
our platform; our reliance on large aggregators of advertising
inventory, and the concentration of CTV among a small number of
large sellers that enjoy significant negotiating leverage; our
ability to provide value to both buyers and sellers of advertising
without being perceived as favoring one over the other or being
perceived as competing with them through our service offerings; our
reliance on large sources of advertising demand, including demand
side platforms ("DSPs") that may have or develop high-risk credit
profiles or fail to pay invoices when due; we may be exposed to
claims from clients for breach of contracts; errors or failures in
the operation of our solution, interruptions in our access to
network infrastructure or data, and breaches of our computer
systems; our ability to ensure a high level of brand safety for our
clients and to detect "bot" traffic and other fraudulent or
malicious activity; the use of our net operating losses and tax
credit carryforwards may be subject to certain limitations; our
business may be subject to sales and use tax, advertising, and
other taxes; our ability to raise additional capital if needed; the
impact of our share repurchase program on our stock price and cash
reserves; volatility in the price of our common stock; the impact
of negative analyst or investor research reports; our ability to
attract and retain qualified employees and key personnel; costs
associated with enforcing our intellectual property rights or
defending intellectual property infringement; our ability to comply
with the terms of our financing arrangements; restrictions in our
Credit Agreement may limit our ability to make strategic
investments, respond to changing market conditions, or otherwise
operate our business; increases in our debt leverage may put us at
greater risk of defaulting on our debt obligations, subject us to
additional operating restrictions and make it more difficult to
obtain future financing on favorable terms; sales of our common
stock by the former owner of SpotX may have an adverse effect on
the price of our common stock; conversion of our Convertible Senior
Notes would dilute the ownership interest of existing stockholders;
the Capped Call Transactions subject us to counterparty risk and
may affect the value of the Convertible Senior Notes and our common
stock; the conditional conversion feature of the Convertible Senior
Notes, if triggered, may adversely affect our financial condition
and operating result; failure to successfully execute our
international growth plans; and our ability to identify future
acquisitions of or investments in complementary companies or
technologies and our ability to consummate the acquisitions and
integrate such companies or technologies.
We discuss many of these risks and additional
factors that could cause actual results to differ materially from
those anticipated by our forward-looking statements under the
headings "Risk Factors" and "Management's Discussion and Analysis
of Financial Condition and Results of Operations," and elsewhere in
this press release and in other filings we have made and will make
from time to time with the Securities and Exchange Commission, or
SEC, including our Annual Report on Form 10-K for the year ended
December 31, 2021 and subsequent Quarterly Reports on Form 10-Q.
These forward-looking statements represent our estimates and
assumptions only as of the date of the report in which they are
included. Unless required by federal securities laws, we assume no
obligation to update any of these forward-looking statements, or to
update the reasons actual results could differ materially from
those anticipated, to reflect circumstances or events that occur
after the statements are made. Without limiting the foregoing, any
guidance we may provide will generally be given only in connection
with quarterly and annual earnings announcements, without interim
updates, and we may appear at industry conferences or make other
public statements without disclosing material nonpublic information
in our possession. Given these uncertainties, investors should not
place undue reliance on these forward-looking statements. Investors
should read this press release and the documents that we reference
in this press release and have filed or will file with the SEC
completely and with the understanding that our actual future
results may be materially different from what we expect. We qualify
all of our forward-looking statements by these cautionary
statements.
Non-GAAP Financial Measures and Operational
Measures:
In addition to our GAAP results, we review certain non-GAAP
financial measures to help us evaluate our business, measure our
performance, identify trends affecting our business, establish
budgets, measure the effectiveness of investments in our technology
and development and sales and marketing, and assess our operational
efficiencies. These non-GAAP measures include Revenue ex-TAC,
Adjusted EBITDA, Non-GAAP Income (Loss) and Non-GAAP Earnings
(Loss) per share, each of which is discussed below.
These non-GAAP financial measures are not intended to be
considered in isolation from, as substitutes for, or as superior
to, the corresponding financial measures prepared in accordance
with GAAP. You are encouraged to evaluate these adjustments, and
review the reconciliation of these non-GAAP financial measures to
their most comparable GAAP measures, and the reasons we consider
them appropriate. It is important to note that the particular items
we exclude from, or include in, our non-GAAP financial measures may
differ from the items excluded from, or included in, similar
non-GAAP financial measures used by other companies. See
"Reconciliation of Revenue to Gross Profit to Revenue ex-TAC,"
"Reconciliation of net income (loss) to Adjusted EBITDA,"
"Reconciliation of net income (loss) to non-GAAP income (loss),"
and "Reconciliation of GAAP earnings (loss) per share to non-GAAP
earnings (loss) per share" included as part of this press
release.
We do not provide a reconciliation of our non-GAAP financial
expectations for Revenue ex-TAC, Adjusted EBITDA, Adjusted EBITDA
operating expenses or free cash flow, or a forecast of the most
comparable GAAP measures, because the amount and timing of many
future charges that impact these measures (such as amortization of
future acquired intangible assets, acquisition-related charges,
foreign exchange (gain) loss, net, stock-based compensation,
impairment charges, provision or benefit for income taxes, and our
future revenue mix), which could be material, are variable,
uncertain, or out of our control and therefore cannot be reasonably
predicted without unreasonable effort, if at all. In addition, we
believe such reconciliations or forecasts could imply a degree of
precision that might be confusing or misleading to investors.
Revenue ex-TAC:
Revenue ex-TAC is revenue excluding traffic acquisition cost
("TAC"). Traffic acquisition cost, a component of Cost of revenue,
represents what we must pay sellers for the sale of advertising
inventory through our platform for revenue reported on a gross
basis. In calculating Revenue ex-TAC, we add back the cost of
revenue, excluding TAC, to gross profit, the most comparable GAAP
measurement. Revenue ex-TAC is a non-GAAP financial measure. We
believe Revenue ex-TAC is a useful measure in assessing the
performance of Magnite as a combined company following our
acquisition of SpotX and facilitates a consistent comparison
against our core business without considering the impact of traffic
acquisition costs related to revenue reported on a gross basis.
Adjusted EBITDA:
We define Adjusted EBITDA as net income (loss) adjusted to
exclude stock-based compensation expense, depreciation and
amortization, amortization of acquired intangible assets,
impairment charges, interest income or expense, and other cash and
non-cash based income or expenses that we do not consider
indicative of our core operating performance, including, but not
limited to foreign exchange gains and losses, acquisition and
related items, non-operational real estate expense (income), net,
and provision (benefit) for income taxes. We also track future
expenses on an Adjusted EBITDA basis, and describe them as Adjusted
EBITDA operating expenses, which includes total operating expenses.
Total operating expenses include cost of revenue. We adjust
Adjusted EBITDA operating expenses for the same expense items
excluded in Adjusted EBITDA. We believe Adjusted EBITDA is useful
to investors in evaluating our performance for the following
reasons:
- Adjusted EBITDA is widely used by
investors and securities analysts to measure a company’s
performance without regard to items such as those we exclude in
calculating this measure, which can vary substantially from company
to company depending upon their financing, capital structures, and
the method by which assets were acquired.
- Our management uses Adjusted EBITDA in
conjunction with GAAP financial measures for planning purposes,
including the preparation of our annual operating budget, as a
measure of performance and the effectiveness of our business
strategies, and in communications with our board of directors
concerning our performance. Adjusted EBITDA may also be used as a
metric for determining payment of cash incentive compensation.
- Adjusted EBITDA provides a measure of
consistency and comparability with our past performance that many
investors find useful, facilitates period-to-period comparisons of
operations, and also facilitates comparisons with other peer
companies, many of which use similar non-GAAP financial measures to
supplement their GAAP results.
Although Adjusted EBITDA is frequently used by investors and
securities analysts in their evaluations of companies, Adjusted
EBITDA has limitations as an analytical tool, and should not be
considered in isolation or as a substitute for analysis of our
results of operations as reported under GAAP. These limitations
include:
- Stock-based compensation is a non-cash
charge and will remain an element of our long-term incentive
compensation package, although we exclude it as an expense when
evaluating our ongoing operating performance for a particular
period.
- Depreciation and amortization are
non-cash charges, and the assets being depreciated or amortized
will often have to be replaced in the future, but Adjusted EBITDA
does not reflect any cash requirements for these replacements.
- Impairment charges are non-cash charges
related to goodwill, intangible assets and/or long-lived
assets.
- Adjusted EBITDA does not reflect
non-cash charges related to acquisition and related items, such as
amortization of acquired intangible assets, merger related
severance costs, and changes in the fair value of contingent
consideration.
- Adjusted EBITDA does not reflect cash
and non-cash charges and changes in, or cash requirements for,
acquisition and related items, such as certain transaction expenses
and expenses associated with earn-out amounts.
- Adjusted EBITDA does not reflect
changes in our working capital needs, capital expenditures,
non-operational real estate expenses or income, or contractual
commitments.
- Adjusted EBITDA does not reflect cash
requirements for income taxes and the cash impact of other income
or expense.
- Other companies may calculate Adjusted
EBITDA differently than we do, limiting its usefulness as a
comparative measure.
Our Adjusted EBITDA is influenced by fluctuations in our
revenue, cost of revenue, and the timing and amounts of the cost of
our operations. Adjusted EBITDA should not be considered as an
alternative to net income (loss), income (loss) from operations, or
any other measure of financial performance calculated and presented
in accordance with GAAP.
Non-GAAP Income (Loss) and Non-GAAP Earnings (Loss) per
Share:
We define non-GAAP earnings (loss) per share as non-GAAP income
(loss) divided by non-GAAP weighted-average shares outstanding.
Non-GAAP income (loss) is equal to net income (loss) excluding
stock-based compensation, cash and non-cash based acquisition and
related expenses, including amortization of acquired intangible
assets, merger related severance costs, transaction expenses,
non-operational real estate expenses or income, foreign currency
gains and losses, and in periods in which the Company generates net
income, non-GAAP net income also excludes interest expense
associated with Convertible Senior Notes. In periods in which we
have non-GAAP income, non-GAAP weighted-average shares outstanding
used to calculate non-GAAP earnings per share includes the impact
of potentially dilutive shares. Potentially dilutive shares consist
of stock options, restricted stock awards, restricted stock units,
performance stock units, and potential shares issued under the
Employee Stock Purchase Plan, each computed using the treasury
stock method. In periods in which the Company generates net income,
non-GAAP weighted-average shares will also include the impact of
shares that would be issuable assuming conversion of all of the
Convertible Senior Notes, calculated under the if-converted method.
We believe non-GAAP earnings (loss) per share is useful to
investors in evaluating our ongoing operational performance and our
trends on a per share basis, and also facilitates comparison of our
financial results on a per share basis with other companies, many
of which present a similar non-GAAP measure. However, a potential
limitation of our use of non-GAAP earnings (loss) per share is that
other companies may define non-GAAP earnings (loss) per share
differently, which may make comparison difficult. This measure may
also exclude expenses that may have a material impact on our
reported financial results. Non-GAAP earnings (loss) per share is a
performance measure and should not be used as a measure of
liquidity. Because of these limitations, we also consider the
comparable GAAP measure of net income (loss).
Investor Relations ContactNick Kormeluk(949)
500-0003nkormeluk@magnite.com
Media ContactCharlstie Veith(516)
300-3569press@magnite.com
MAGNITE, INC.CONDENSED
CONSOLIDATED BALANCE SHEETS(In
thousands)(unaudited)
|
March 31, 2022 |
|
December 31, 2021 |
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
204,589 |
|
|
$ |
230,401 |
|
Accounts receivable, net |
|
782,956 |
|
|
|
927,781 |
|
Prepaid expenses and other current assets |
|
22,219 |
|
|
|
19,934 |
|
TOTAL CURRENT ASSETS |
|
1,009,764 |
|
|
|
1,178,116 |
|
Property and equipment,
net |
|
34,986 |
|
|
|
34,067 |
|
Right-of-use lease asset |
|
72,363 |
|
|
|
76,986 |
|
Internal use software development
costs, net |
|
20,837 |
|
|
|
20,093 |
|
Intangible assets, net |
|
399,419 |
|
|
|
426,615 |
|
Goodwill |
|
978,216 |
|
|
|
969,873 |
|
Other assets, non-current |
|
6,877 |
|
|
|
6,862 |
|
TOTAL ASSETS |
$ |
2,522,462 |
|
|
$ |
2,712,612 |
|
LIABILITIES AND
STOCKHOLDERS' EQUITY |
|
|
|
Current liabilities: |
|
|
|
Accounts payable and accrued expenses |
$ |
859,178 |
|
|
$ |
1,000,956 |
|
Lease liabilities, current |
|
18,638 |
|
|
|
19,142 |
|
Debt, current |
|
3,600 |
|
|
|
3,600 |
|
Other current liabilities |
|
5,903 |
|
|
|
5,697 |
|
TOTAL CURRENT LIABILITIES |
|
887,319 |
|
|
|
1,029,395 |
|
Deferred tax liability |
|
11,509 |
|
|
|
13,303 |
|
Debt, non-current, net of debt
issuance costs |
|
720,710 |
|
|
|
720,023 |
|
Lease liabilities,
non-current |
|
62,777 |
|
|
|
66,487 |
|
Other liabilities,
non-current |
|
2,237 |
|
|
|
2,647 |
|
TOTAL LIABILITIES |
|
1,684,552 |
|
|
|
1,831,855 |
|
STOCKHOLDERS' EQUITY |
|
|
|
Common stock |
|
2 |
|
|
|
2 |
|
Additional paid-in
capital |
|
1,278,218 |
|
|
|
1,282,589 |
|
Accumulated other comprehensive
loss |
|
(1,266 |
) |
|
|
(1,376 |
) |
Treasury stock |
|
— |
|
|
|
(6,007 |
) |
Accumulated deficit |
|
(439,044 |
) |
|
|
(394,451 |
) |
TOTAL STOCKHOLDERS' EQUITY |
|
837,910 |
|
|
|
880,757 |
|
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY |
$ |
2,522,462 |
|
|
$ |
2,712,612 |
|
MAGNITE, INC.CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS(In
thousands, except per share
amounts)(unaudited)
|
Three Months Ended |
|
March 31, 2022 |
|
March 31, 2021 |
Revenue |
$ |
118,075 |
|
|
$ |
60,715 |
|
Expenses(1)(2): |
|
|
|
Cost of revenue |
|
59,396 |
|
|
|
20,756 |
|
Sales and marketing |
|
50,000 |
|
|
|
22,589 |
|
Technology and
development |
|
23,043 |
|
|
|
14,266 |
|
General and
administrative |
|
18,704 |
|
|
|
14,158 |
|
Merger, acquisition, and
restructuring costs |
|
6,756 |
|
|
|
2,722 |
|
Total expenses |
|
157,899 |
|
|
|
74,491 |
|
Loss from operations |
|
(39,824 |
) |
|
|
(13,776 |
) |
Other (income) expense: |
|
|
|
Interest income (expense), net |
|
7,111 |
|
|
|
143 |
|
Other income |
|
(1,263 |
) |
|
|
(1,223 |
) |
Foreign exchange (gain) loss, net |
|
926 |
|
|
|
15 |
|
Total other (income) expense,
net |
|
6,774 |
|
|
|
(1,065 |
) |
Loss before income taxes |
|
(46,598 |
) |
|
|
(12,711 |
) |
Provision (benefit) for income taxes |
|
(2,005 |
) |
|
|
166 |
|
Net loss |
$ |
(44,593 |
) |
|
$ |
(12,877 |
) |
Net loss per share: |
|
|
|
Basic and Diluted |
$ |
(0.34 |
) |
|
$ |
(0.11 |
) |
Weighted average shares used
to compute loss per share: |
|
|
|
Basic and Diluted |
|
132,236 |
|
|
|
115,296 |
|
(1) Stock-based compensation
expense included in our expenses was as follows: |
|
Three Months Ended |
March 31, 2022 |
|
March 31, 2021 |
Cost of revenue |
$ |
350 |
|
$ |
85 |
Sales and marketing |
|
5,341 |
|
|
2,461 |
Technology and development |
|
4,717 |
|
|
1,826 |
General and administrative |
|
4,237 |
|
|
2,244 |
Merger, acquisition, and
restructuring costs |
|
1,944 |
|
|
377 |
Total stock-based compensation expense |
$ |
16,589 |
|
$ |
6,993 |
(2) Depreciation and amortization
expense included in our expenses was as follows: |
|
Three Months Ended |
|
March 31, 2022 |
|
March 31, 2021 |
Cost of revenue |
$ |
26,322 |
|
$ |
8,240 |
Sales and marketing |
|
19,152 |
|
|
3,984 |
Technology and development |
|
224 |
|
|
113 |
General and administrative |
|
168 |
|
|
148 |
Total depreciation and amortization expense |
$ |
45,866 |
|
$ |
12,485 |
MAGNITE, INC.CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS(In
thousands)(unaudited)
|
Three Months Ended |
|
March 31, 2022 |
|
March 31, 2021 |
OPERATING ACTIVITIES: |
|
|
|
Net loss |
$ |
(44,593 |
) |
|
$ |
(12,877 |
) |
Adjustments to reconcile net loss to net cash provided by (used in)
operating activities: |
|
|
|
Depreciation and amortization |
|
45,866 |
|
|
|
12,485 |
|
Stock-based compensation |
|
16,589 |
|
|
|
6,993 |
|
Impairment of intangible assets |
|
3,320 |
|
|
|
— |
|
(Gain) loss on disposal of property and equipment |
|
(2 |
) |
|
|
50 |
|
Provision for doubtful accounts |
|
(571 |
) |
|
|
(159 |
) |
Amortization of debt discount and issuance costs |
|
1,700 |
|
|
|
99 |
|
Non-cash lease expense |
|
610 |
|
|
|
(652 |
) |
Deferred income taxes |
|
(1,891 |
) |
|
|
62 |
|
Unrealized foreign currency (gains) losses, net |
|
458 |
|
|
|
(375 |
) |
Changes in operating assets and liabilities, net of effect of
business acquisitions: |
|
|
|
Accounts receivable |
|
146,241 |
|
|
|
70,252 |
|
Prepaid expenses and other assets |
|
(2,279 |
) |
|
|
1,578 |
|
Accounts payable and accrued expenses |
|
(141,312 |
) |
|
|
(80,074 |
) |
Other liabilities |
|
(2,504 |
) |
|
|
1,392 |
|
Net cash provided by (used in) operating activities |
|
21,632 |
|
|
|
(1,226 |
) |
INVESTING ACTIVITIES: |
|
|
|
Purchases of property and equipment |
|
(7,184 |
) |
|
|
(1,317 |
) |
Capitalized internal use software development costs |
|
(3,382 |
) |
|
|
(1,955 |
) |
Mergers and acquisitions, net of cash acquired |
|
(20,755 |
) |
|
|
— |
|
Net cash used in investing activities |
|
(31,321 |
) |
|
|
(3,272 |
) |
FINANCING ACTIVITIES: |
|
|
|
Proceeds from Convertible Senior Notes offering |
|
— |
|
|
|
389,000 |
|
Payment for capped call options |
|
— |
|
|
|
(38,960 |
) |
Payment for debt issuance costs |
|
— |
|
|
|
(198 |
) |
Proceeds from exercise of stock options |
|
1,107 |
|
|
|
5,785 |
|
Repayment of debt |
|
(900 |
) |
|
|
— |
|
Repayment of financing lease |
|
(197 |
) |
|
|
— |
|
Purchase of treasury stock |
|
(12,138 |
) |
|
|
— |
|
Taxes paid related to net share settlement |
|
(4,260 |
) |
|
|
— |
|
Net cash (used in) provided by financing activities |
|
(16,388 |
) |
|
|
355,627 |
|
EFFECT OF EXCHANGE RATE
CHANGES ON CASH, CASH EQUIVALENTS AND RESTRICTED CASH |
|
268 |
|
|
|
(256 |
) |
CHANGE IN CASH, CASH
EQUIVALENTS AND RESTRICTED CASH |
|
(25,809 |
) |
|
|
350,873 |
|
CASH, CASH EQUIVALENTS AND
RESTRICTED CASH — Beginning of period |
|
230,693 |
|
|
|
117,731 |
|
CASH, CASH EQUIVALENTS AND
RESTRICTED CASH — End of period |
$ |
204,884 |
|
|
$ |
468,604 |
|
|
|
|
|
RECONCILIATION OF CASH, CASH
EQUIVALENTS AND RESTRICTED CASH TO CONSOLIDATED BALANCE SHEETS |
|
|
|
Cash and cash equivalents |
$ |
204,589 |
|
|
$ |
468,550 |
|
Restricted cash included in
prepaid expenses and other current assets |
|
242 |
|
|
|
— |
|
Restricted cash included in
other assets, non-current |
|
53 |
|
|
|
54 |
|
Total cash, cash equivalents
and restricted cash |
$ |
204,884 |
|
|
$ |
468,604 |
|
|
|
MAGNITE, INC.CONDENSED
CONSOLIDATED STATEMENTS OF CASH
FLOWS-(Continued)(In
thousands)(unaudited)
|
Three Months Ended |
SUPPLEMENTAL DISCLOSURES OF
OTHER CASH FLOW INFORMATION: |
March 31, 2022 |
|
March 31, 2021 |
Cash paid for income taxes |
$ |
338 |
|
$ |
226 |
Cash paid for interest |
$ |
5,668 |
|
$ |
51 |
Capitalized assets financed by
accounts payable and accrued expenses |
$ |
372 |
|
$ |
6,050 |
Capitalized stock-based
compensation |
$ |
338 |
|
$ |
115 |
Purchase consideration -
indemnification claims holdback |
$ |
2,300 |
|
$ |
— |
Debt issuance costs included
in accrued expenses and other liabilities |
$ |
— |
|
$ |
1,349 |
Debt discount, non-cash |
$ |
— |
|
$ |
11,000 |
MAGNITE,
INC.RECONCILIATION OF REVENUE TO GROSS PROFIT TO
REVENUE EX-TAC(In
thousands)(unaudited)
|
Three Months Ended |
|
March 31, 2022 |
|
March 31, 2021 |
Revenue |
$ |
118,075 |
|
$ |
60,715 |
Less: Cost of revenue |
|
59,396 |
|
|
20,756 |
Gross Profit |
|
58,679 |
|
|
39,959 |
Add back: Cost of revenue, excluding TAC |
|
48,405 |
|
|
19,901 |
Revenue ex-TAC |
$ |
107,084 |
|
$ |
59,860 |
|
|
|
|
MAGNITE,
INC.RECONCILIATION OF NET LOSS TO ADJUSTED
EBITDA(In
thousands)(unaudited)
|
Three Months Ended |
|
March 31, 2022 |
|
March 31, 2021 |
Net loss |
$ |
(44,593 |
) |
|
$ |
(12,877 |
) |
Add back (deduct): |
|
|
|
Depreciation and amortization expense, excluding amortization of
acquired intangible assets |
|
7,390 |
|
|
|
4,894 |
|
Amortization of acquired intangibles |
|
38,476 |
|
|
|
7,591 |
|
Stock-based compensation expense |
|
16,589 |
|
|
|
6,993 |
|
Merger, acquisition, and restructuring costs, excluding stock-based
compensation expense |
|
4,812 |
|
|
|
2,345 |
|
Non-operational real estate expense (income), net |
|
135 |
|
|
|
92 |
|
Interest expense (income), net |
|
7,111 |
|
|
|
143 |
|
Foreign exchange (gain) loss, net |
|
926 |
|
|
|
15 |
|
Provision (benefit) for income taxes |
|
(2,005 |
) |
|
|
166 |
|
Adjusted EBITDA |
$ |
28,841 |
|
|
$ |
9,362 |
|
|
|
|
|
MAGNITE,
INC.RECONCILIATION OF NET LOSS TO NON-GAAP
INCOME(In
thousands)(unaudited)
|
Three Months Ended |
|
March 31, 2022 |
|
March 31, 2021 |
Net loss |
$ |
(44,593 |
) |
|
$ |
(12,877 |
) |
Add back (deduct): |
|
|
|
Merger, acquisition, and restructuring costs, including
amortization of acquired intangibles and excluding stock-based
compensation expense |
|
43,288 |
|
|
|
9,936 |
|
Stock-based compensation expense |
|
16,589 |
|
|
|
6,993 |
|
Non-operational real estate expense (income), net |
|
135 |
|
|
|
92 |
|
Foreign exchange (gain) loss, net |
|
926 |
|
|
|
15 |
|
Interest expense, Convertible Senior Notes |
|
250 |
|
|
|
— |
|
Tax effect of Non-GAAP adjustments(1) |
|
(5,326 |
) |
|
|
(588 |
) |
Non-GAAP income |
$ |
11,269 |
|
|
$ |
3,571 |
|
(1 |
) |
Non-GAAP income (loss) includes the estimated tax impact from the
expense items reconciling between net loss and non-GAAP income
(loss). |
MAGNITE,
INC.RECONCILIATION OF GAAP LOSS PER SHARE TO
NON-GAAP EARNINGS PER SHARE(In thousands, except
per share amounts)(unaudited)
|
Three Months Ended |
|
March 31, 2022 |
|
March 31, 2021 |
GAAP loss per share (1): |
|
|
|
Basic and Diluted |
$ |
(0.34 |
) |
|
$ |
(0.11 |
) |
|
|
|
|
Non-GAAP income (loss)(2) |
$ |
11,269 |
|
|
$ |
3,571 |
|
Non-GAAP earnings per
share |
$ |
0.08 |
|
|
$ |
0.03 |
|
|
|
|
|
Weighted-average shares used
to compute basic earnings (loss) per share |
|
132,236 |
|
|
|
115,296 |
|
Dilutive effect of weighted-average common stock options, RSUs, and
PSUs |
|
5,160 |
|
|
|
13,093 |
|
Dilutive effect of weighted-average ESPP shares |
|
— |
|
|
|
90 |
|
Dilutive effect of weighted-average Convertible Senior Notes |
|
6,262 |
|
|
|
— |
|
Non-GAAP weighted-average
shares outstanding(3) |
|
143,658 |
|
|
|
128,479 |
|
(1) Calculated as net income
(loss) divided by basic and diluted weighted-average shares used to
compute earnings (loss) per share as included in the consolidated
statement of operations. |
(2) Refer to reconciliation of
net income (loss) to non-GAAP income (loss). |
(3) Non-GAAP earnings (loss)
per share is computed using the same weighted-average number of
shares that are used to compute GAAP earnings (loss) per share in
periods where there is both a non-GAAP loss and a GAAP net
loss. |
MAGNITE, INC.REVENUE
EX-TAC BY CHANNEL(In
thousands)(unaudited)
|
Revenue ex-TAC |
|
Three Months Ended |
|
March 31, 2022 |
|
March 31, 2021 |
|
|
Channel: |
|
|
|
|
|
|
|
CTV |
$ |
42,303 |
|
40 |
% |
|
$ |
11,976 |
|
20 |
% |
Desktop |
|
26,484 |
|
25 |
% |
|
|
19,997 |
|
33 |
% |
Mobile |
|
38,297 |
|
35 |
% |
|
|
27,887 |
|
47 |
% |
Total |
$ |
107,084 |
|
100 |
% |
|
$ |
59,860 |
|
100 |
% |
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