Magnite(MGNI) - 2025 Q1 - Quarterly Report

PART I. FINANCIAL INFORMATION This section provides Magnite's unaudited condensed consolidated financial statements, management's discussion, market risk disclosures, and internal controls Item 1. Condensed Consolidated Financial Statements (Unaudited) This section presents Magnite, Inc.'s unaudited condensed consolidated financial statements, including the balance sheets, statements of operations, comprehensive income (loss), stockholders' equity, and cash flows, along with detailed notes explaining significant accounting policies, revenue recognition, fair value measurements, debt, and stock-based compensation Condensed Consolidated Balance Sheets This section presents the company's financial position, detailing assets, liabilities, and equity at specific dates | Metric | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--- | :--- | :--- | | Total Assets | $2,674,650 | $2,854,768 | | Total Liabilities | $1,932,897 | $2,086,550 | | Total Stockholders' Equity | $741,753 | $768,218 | | Cash and cash equivalents | $429,708 | $483,220 | | Accounts receivable, net | $1,053,153 | $1,200,046 | | Accounts payable and accrued expenses | $1,306,517 | $1,466,377 | Condensed Consolidated Statements of Operations This section details the company's revenues, expenses, and net loss over specific reporting periods | Metric | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | | :--- | :--- | :--- | | Revenue | $155,771 | $149,319 | | Loss from operations | $(1,364) | $(13,828) | | Net loss | $(9,634) | $(17,757) | | Net loss per share: Basic and diluted | $(0.07) | $(0.13) | Condensed Consolidated Statements of Comprehensive Income (Loss) This section presents the company's net loss and other comprehensive income (loss) components | Metric | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | | :--- | :--- | :--- | | Net loss | $(9,634) | $(17,757) | | Foreign currency translation adjustments | $829 | $(1,015) | | Comprehensive loss | $(8,805) | $(18,772) | Condensed Consolidated Statements of Stockholders' Equity This section outlines changes in the company's equity accounts over specific reporting periods | Metric | Balance at March 31, 2025 (in thousands) | Balance at March 31, 2024 (in thousands) | | :--- | :--- | :--- | | Total Stockholders' Equity | $741,753 | $695,377 | | Stock-based compensation | $21,631 | $21,407 | | Purchase of treasury stock | $(19,229) | — | Condensed Consolidated Statements of Cash Flows This section reports cash inflows and outflows from operating, investing, and financing activities | Activity | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $2,561 | $(60,411) | | Net cash used in investing activities | $(17,198) | $(9,252) | | Net cash used in financing activities | $(39,450) | $(3,101) | | Change in cash, cash equivalents and restricted cash | $(53,512) | $(73,385) | | Cash, cash equivalents and restricted cash — End of period | $429,708 | $252,834 | Notes to Condensed Consolidated Financial Statements This section provides detailed explanations and disclosures supporting the condensed consolidated financial statements Note 1—Organization and Summary of Significant Accounting Policies This note describes the company's business and outlines its significant accounting policies - Magnite provides a technology solution to automate the purchase and sale of digital advertising inventory globally, across all channels, formats, and auction types[24] - The Company operates as one operating segment, with the CEO reviewing financial information on a consolidated basis, except for revenue by geography and channel[29] - ASU 2023-09 (Income Taxes) is effective for annual periods beginning after December 15, 2024, and ASU 2024-03 (Expense Disaggregation) is effective for annual periods beginning after December 15, 2026, both expected to impact footnote disclosures[32][33] Note 2—Net Loss Per Share This note details the calculation of basic and diluted net loss per share | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net loss per share (Basic and Diluted) | $(0.07) | $(0.13) | | Weighted-average common shares outstanding | 141,852 | 139,297 | | Total shares excluded from diluted net loss per share | 11,466 | 7,646 | Note 3—Revenue This note provides a breakdown of revenue recognition policies and revenue by basis, channel, and geography - Revenue is primarily recognized on a net basis (Company as agent), with certain advertising campaigns through insertion orders reported on a gross basis (Company as primary obligor)[38] Revenue by Basis | Basis | March 31, 2025 (in thousands) | % | March 31, 2024 (in thousands) | % | | :--- | :--- | :--- | :--- | :--- | | Net basis | $138,074 | 89% | $121,092 | 81% | | Gross basis | $17,697 | 11% | $28,227 | 19% | | Total | $155,771 | 100% | $149,319 | 100% | Revenue by Channel | Channel | March 31, 2025 (in thousands) | % | March 31, 2024 (in thousands) | % | | :--- | :--- | :--- | :--- | :--- | | CTV | $72,549 | 47% | $72,592 | 49% | | Mobile | $58,461 | 37% | $53,953 | 36% | | Desktop | $24,761 | 16% | $22,774 | 15% | | Total | $155,771 | 100% | $149,319 | 100% | Revenue by Geographic Location (Sellers) | Region | March 31, 2025 (in thousands) | % | March 31, 2024 (in thousands) | % | | :--- | :--- | :--- | :--- | :--- | | United States | $116,784 | 75% | $113,412 | 76% | | International | $38,987 | 25% | $35,907 | 24% | | Total | $155,771 | 100% | $149,319 | 100% | - Allowance for doubtful accounts decreased to $2.6 million at March 31, 2025, from $2.9 million at December 31, 2024[40][41] Note 4—Fair Value Measurements This note details the fair value of financial instruments and their classification within the fair value hierarchy Fair Value of Financial Instruments | Instrument | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | Fair Value Hierarchy Level | | :--- | :--- | :--- | :--- | | Cash equivalents | $325,252 | $436,731 | Level 1 or Level 2 | | Convertible Senior Notes | $193,800 | $190,200 | Level 2 | | 2024 Term Loan B Facility | $362,300 | $368,200 | Level 2 | Note 5—Accounts Payable and Accrued Expenses This note provides a breakdown of the company's accounts payable and accrued expenses | Category | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--- | :--- | :--- | | Accounts payable—seller | $1,261,402 | $1,417,780 | | Accounts payable—trade | $22,829 | $30,899 | | Accrued employee-related payables | $22,286 | $17,698 | | Total | $1,306,517 | $1,466,377 | Note 6—Property and Equipment This note details the company's property and equipment, including depreciation expense | Metric | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--- | :--- | :--- | | Net property and equipment | $79,134 | $68,730 | | Depreciation expense (Q1) | $5,000 | $3,200 | - Net property and equipment in the United States increased to $62.3 million at March 31, 2025, from $51.7 million at December 31, 2024[51] Note 7—Intangible Assets This note provides information on the company's identifiable intangible assets and their amortization | Metric | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--- | :--- | :--- | | Total identifiable intangible assets, net | $13,926 | $21,309 | | Amortization of intangible assets (Q1) | $7,400 | $7,600 | - Estimated remaining amortization expense for intangible assets in 2025 is $7.1 million[53] Note 8—Stock-Based Compensation This note details the company's stock-based compensation plans and related expenses - Unrecognized stock-based compensation expense for unvested stock options is approximately $3.1 million, expected over 2.1 years[54] - Unrecognized stock-based compensation expense for unvested restricted stock units is approximately $144.9 million, expected over 2.7 years[57] - Unrecognized stock-based compensation expense for unvested performance stock units is approximately $12.7 million, expected over 1.6 years[62] Total Stock-Based Compensation Expense | Category | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | | :--- | :--- | :--- | | Cost of revenue | $572 | $500 | | Sales and marketing | $9,144 | $8,236 | | Technology and development | $4,635 | $5,416 | | General and administrative | $6,858 | $6,679 | | Total | $21,209 | $20,831 | Note 9—Income Taxes This note explains the company's income tax benefit, deferred tax assets, and net operating loss carryforwards - The Company recorded an income tax benefit of $0.9 million for Q1 2025, compared to $7.8 million for Q1 2024, primarily due to the recognition of deferred tax assets (DTAs)[66] - A partial valuation allowance is maintained for domestic DTAs, but management believes there is a reasonable possibility of reversal for all or a significant portion within the next twelve months[67] - Net operating loss carryforwards and tax credits are subject to annual use limitations under Section 382 due to prior ownership changes[69] Note 10—Lease Obligations This note outlines the company's lease liabilities, lease terms, and related expenses - The weighted average remaining lease term for operating leases is 4.7 years as of March 31, 2025, with a weighted average discount rate of 6.12%[71] - Operating lease expense was $5.1 million for Q1 2025, down from $5.7 million for Q1 2024[72] Maturity of Lease Liabilities (as of March 31, 2025) | Fiscal Year | Amount (in thousands) | | :--- | :--- | | Remaining 2025 | $14,868 | | 2026 | $15,700 | | 2027 | $11,505 | | 2028 | $9,435 | | 2029 | $9,333 | | Thereafter | $7,972 | | Total lease liabilities (discounted) | $59,988 | - Future commitments for uncommenced office space and data center leases total $13.8 million over a 4.3-year term[75] Note 11—Commitments and Contingencies This note describes the company's letters of credit, contractual obligations, indemnifications, and legal proceedings - The Company had $5.5 million in letters of credit associated with office leases as of March 31, 2025, with no outstanding borrowings[77] - Non-cancelable contractual obligations with a remaining term over one year total $22.9 million, primarily for software services and data center providers[78] - The Company provides indemnification to various parties for claims including intellectual property infringement and business losses, and has indemnification agreements with directors and officers[79][80] - Management believes that the final resolution of current legal proceedings will not have a material adverse effect on the Company's financial position, results of operations, or cash flows[81] Note 12—Debt This note provides detailed information on the company's debt instruments, including convertible senior notes and term loan facilities Current and Long-Term Debt | Debt Type | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--- | :--- | :--- | | Convertible Senior Notes (net) | $203,936 | $203,643 | | 2024 Term Loan B Facility (net) | $352,633 | $350,102 | | Total debt | $556,569 | $553,745 | Maturities of Principal Amount of Debt (as of March 31, 2025) | Fiscal Year | Amount (in thousands) | | :--- | :--- | | Remaining 2025 | $2,724 | | 2026 | $208,699 | | 2027 | $3,632 | | 2028 | $3,632 | | 2029 | $3,632 | | Thereafter | $345,925 | | Total | $568,244 | - Convertible Senior Notes (0.25% interest) were issued in March 2021 for $400.0 million, maturing March 15, 2026, with an initial conversion rate of 15.6539 shares per $1,000 principal amount[85][87][94] - The 2024 Term Loan B Facility ($365.0 million) matures in February 2031 and, after Amendment No. 2 on March 18, 2025, accrues interest at Term SOFR plus a margin of 3.00% (contractual rate of 7.32% as of March 31, 2025)[101][104][105] - Amendment No. 2 to the 2024 Credit Agreement on March 18, 2025, reduced the interest rate by 75 basis points and resulted in a $2.2 million loss on extinguishment of debt[104][114] Total Interest Expense, Net | Metric | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | | :--- | :--- | :--- | | Interest expense | $8,420 | $10,454 | | Interest income | $(3,243) | $(2,496) | | Interest expense, net | $5,177 | $7,958 | Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on Magnite's financial condition and results of operations for the three months ended March 31, 2025, compared to the prior year. It covers an overview of the business, industry trends, detailed analysis of revenue and expenses, key performance metrics, liquidity, capital resources, and critical accounting policies Overview This section provides a high-level introduction to Magnite's business as an independent omni-channel sell-side advertising platform - Magnite is the world's largest independent omni-channel sell-side advertising platform (SSP) and the largest independent programmatic CTV marketplace[122] - The Company's platform connects buyers and sellers of digital advertising inventory, facilitating intelligent decision-making and automated transaction execution at scale[123] - SpringServe, Magnite's combined streaming SSP and ad server, offers CTV sellers a holistic solution to manage and monetize their ad inventory, including tools for mediation, yield optimization, and brand safety[124] Industry and Company Trends This section discusses key trends impacting the digital advertising market and Magnite's strategic responses - The digital advertising market continues to grow due to consumers shifting viewing habits towards digital mediums and expecting seamless content consumption across multiple devices[128] - Programmatic advertising is crucial for managing the complexity of the digital advertising ecosystem, offering transparency, better controls, and relevant insights for buyers and sellers[129] - CTV viewership is rapidly growing, accelerating the shift from linear TV to CTV programming, with Magnite making significant investments in CTV growth initiatives, including the introduction of its next-generation SpringServe CTV platform[130][131] - A decreased reliance on third-party cookies is shifting the programmatic ecosystem towards a first-party identity model, where publishers control access to identifiers and user data; Magnite launched Curator Marketplace in 2024 to support this shift[134][135][136] - Supply Path Optimization (SPO) is important for buyers to consolidate vendors and increase working media spend, and Magnite is well-positioned to benefit from SPO due to its transparency and broad inventory supply[137][139] - A U.S. District Court ruling that Google violated antitrust laws in the display ad server and exchange markets is expected to have a significant positive impact on Magnite's industry and business prospects by creating a more level playing field[143][144] - Macroeconomic challenges such as inflation, global conflicts, and recession risk generally have a negative impact on ad budgets and could lead to slower ad spend growth and increased costs for Magnite[145] Components of Our Results of Operations This section explains the primary components of Magnite's revenue, cost of revenue, and operating expenses - Revenue is generated from platform use for digital advertising, typically a percentage of ad spend, with some fixed CPMs or gross revenue for insertion orders[148] - Cost of revenue includes cloud hosting, data center, bandwidth, ad verification, depreciation, amortization of software/acquired tech, personnel, and traffic acquisition costs for gross revenue[150] - Operating expenses are categorized into Sales and Marketing, Technology and Development, and General and Administrative, covering personnel, marketing, professional services, software, and administrative costs[151][152][153] - Other (Income) Expense includes interest expense (debt facilities), foreign currency gains/losses, loss on extinguishment of debt, and other income (e.g., rental income)[154][155][156] Results of Operations This section presents a condensed consolidated overview of Magnite's financial performance for the reporting period Condensed Consolidated Results of Operations (Q1 2025 vs Q1 2024) | Metric | March 31, 2025 (in thousands) | March 31, 2024 (in thousands) | Change % | | :--- | :--- | :--- | :--- | | Revenue | $155,771 | $149,319 | 4% | | Cost of revenue | $62,799 | $65,902 | (5)% | | Sales and marketing | $48,106 | $43,689 | 10% | | Technology and development | $22,292 | $26,891 | (17)% | | General and administrative | $23,938 | $26,665 | (10)% | | Total expenses | $157,135 | $163,147 | (4)% | | Loss from operations | $(1,364) | $(13,828) | (90)% | | Other expense, net | $9,123 | $11,738 | (22)% | | Loss before income taxes | $(10,487) | $(25,566) | (59)% | | Benefit for income taxes | $(853) | $(7,809) | (89)% | | Net loss | $(9,634) | $(17,757) | (46)% | Comparison of the Three Months Ended March 31, 2025 and 2024 This section provides a detailed analysis of the changes in Magnite's financial results between the two periods - Revenue increased by $6.5 million (4%) year-over-year, driven by 8% growth in mobile and 9% growth in desktop revenue, while CTV revenue was flat, but Contribution ex-TAC attributable to CTV increased by 15%[159] - Cost of revenue decreased by $3.1 million (5%), primarily due to an $8.8 million decrease in traffic acquisition costs, partially offset by increases in software costs and depreciation/amortization[162] - Sales and marketing expenses increased by $4.4 million (10%), mainly due to a $3.6 million increase in personnel costs[164] - Technology and development expenses decreased by $4.6 million (17%), driven by reductions in software costs, personnel costs, and event/travel-related expenses[165] - General and administrative expenses decreased by $2.7 million (10%), primarily due to a $2.2 million decrease in refinancing expenses[167] - Other expense, net decreased by $2.8 million, attributed to increased interest income and lower interest expense from the 2024 Term Loan B Facility, and a $4.5 million change in foreign exchange (gain) loss[169][170] Key Operating and Financial Performance Metrics This section highlights key financial and non-GAAP metrics used to evaluate Magnite's operational performance Key Financial Measures and non-GAAP Financial Measures (Q1 2025 vs Q1 2024) | Metric | March 31, 2025 (in thousands) | March 31, 2024 (in thousands) | Change % | | :--- | :--- | :--- | :--- | | Revenue | $155,771 | $149,319 | 4% | | Gross profit | $92,972 | $83,417 | 11% | | Contribution ex-TAC | $145,848 | $130,553 | 12% | | Net loss | $(9,634) | $(17,757) | (46)% | | Adjusted EBITDA | $36,800 | $25,026 | 47% | - Contribution ex-TAC increased by $15.3 million (12%) year-over-year, with CTV being the biggest growth driver (15% increase)[177] Contribution ex-TAC by Channel (Q1 2025 vs Q1 2024) | Channel | March 31, 2025 (in thousands) | March 31, 2024 (in thousands) | Change % | | :--- | :--- | :--- | :--- | | CTV | $63,225 | $54,894 | 15% | | Mobile | $58,008 | $53,299 | 9% | | Desktop | $24,615 | $22,360 | 10% | | Total | $145,848 | $130,553 | 12% | - Adjusted EBITDA increased by $11.8 million (47%) year-over-year, driven by increases in revenue and decreases in certain operating expenses[183] Liquidity and Capital Resources This section assesses Magnite's ability to meet its short-term and long-term financial obligations and funding needs - As of March 31, 2025, the Company had $429.7 million in cash and cash equivalents and $568.2 million in total indebtedness[185] - The $175.0 million 2024 Revolving Credit Facility had $169.5 million available, net of outstanding letters of credit, as of March 31, 2025[185][197] - Under the February 2024 Repurchase Plan, $91.2 million remains available for common stock or Convertible Senior Notes repurchases as of March 31, 2025[187] - The Company believes its existing cash, operating cash flows, and the revolving credit facility will be sufficient to meet liquidity requirements for at least the next twelve months[190] Cash Flows This section analyzes Magnite's cash generation and usage across operating, investing, and financing activities Summary of Cash Flows (Q1 2025 vs Q1 2024) | Activity | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | | :--- | :--- | :--- | | Operating activities | $2,561 | $(60,411) | | Investing activities | $(17,198) | $(9,252) | | Financing activities | $(39,450) | $(3,101) | | Change in cash, cash equivalents and restricted cash | $(53,512) | $(73,385) | - Net cash provided by operating activities significantly improved to $2.6 million in Q1 2025 from $60.4 million used in Q1 2024, primarily due to changes in working capital[202] - Net cash used in investing activities increased to $17.2 million in Q1 2025, mainly for property and equipment purchases ($14.4 million) and internal use software development ($2.8 million)[204] - Net cash used in financing activities increased to $39.5 million in Q1 2025, driven by debt repricing payments, taxes paid for share settlement, and share repurchases, partially offset by proceeds from debt repricing[206] Contractual Obligations and Known Future Cash Requirements This section details Magnite's future payment commitments arising from various contractual agreements Total Contractual Obligations (as of March 31, 2025) | Obligation Type | Remaining 2025 (in thousands) | 2026 (in thousands) | 2027 (in thousands) | 2028 (in thousands) | 2029 (in thousands) | Thereafter (in thousands) | Total (in thousands) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Lease liabilities | $14,868 | $15,700 | $11,505 | $9,435 | $9,333 | $7,972 | $68,813 | | Uncommenced leases | $1,922 | $2,911 | $2,909 | $2,746 | $2,856 | $479 | $13,823 | | Convertible Senior Notes (Principal) | $0 | $205,067 | $0 | $0 | $0 | $0 | $205,067 | | Convertible Senior Notes (Interest) | $256 | $256 | $0 | $0 | $0 | $0 | $512 | | 2024 Term Loan B Facility (Principal) | $2,724 | $3,632 | $3,632 | $3,632 | $3,632 | $345,925 | $363,177 | | 2024 Term Loan B Facility (Interest) | $20,247 | $26,637 | $26,367 | $26,170 | $25,829 | $28,133 | $153,383 | | Contractual fees (2024 Credit Agreement) | $507 | $701 | $701 | $701 | $259 | $38 | $2,907 | | Other non-cancelable obligations | $2,026 | $15,953 | $4,651 | $241 | $0 | $0 | $22,871 | | Total | $42,550 | $270,857 | $49,765 | $42,925 | $41,909 | $382,547 | $830,553 | Critical Accounting Policies and Estimates This section identifies the accounting policies requiring significant judgment and estimation in financial reporting - Critical accounting policies and estimates include the determination of revenue recognition as net versus gross and the capitalization and estimated useful lives of internal-use software development costs[214] - There have been no significant changes in accounting policies or estimates from those disclosed in the 2024 Annual Report on Form 10-K[214] Recently Issued Accounting Pronouncements This section refers to disclosures regarding new accounting standards and their potential impact - For information regarding recent accounting pronouncements, refer to Note 1—Organization and Summary of Significant Accounting Policies[215] Item 3. Quantitative and Qualitative Disclosures About Market Risk This section discusses Magnite's exposure to market risks, including interest rate fluctuation risk, foreign currency exchange risk, and inflation risk, and their potential impact on the company's financial condition and results of operations Interest Rate Fluctuation Risk This section assesses the potential impact of interest rate changes on the company's financial instruments and expenses - The Company's cash and cash equivalents are relatively insensitive to interest rate changes due to their short maturity[217] - The Convertible Senior Notes have a fixed interest rate, eliminating interest rate expense exposure on these notes[218] - The 2024 Term Loan B Facility bears a floating interest rate, exposing the Company to changes in the underlying base interest rate[219] - An annualized 100 basis point increase above the SOFR Floor on the 2024 Term Loan B Facility would result in an approximate $3.6 million impact to interest expense[220] Foreign Currency Exchange Risk This section evaluates the company's exposure to fluctuations in foreign currency exchange rates - Magnite is exposed to foreign currency risks from revenue and expenses denominated in currencies such as the Australian Dollar, British Pound, Canadian Dollar, Euro, Japanese Yen, and New Zealand Dollar[222] - An immediate 10% adverse change in foreign exchange rates would result in a foreign currency loss of approximately $7.3 million at March 31, 2025, and $10.8 million at December 31, 2024[222] - The Company does not currently use derivatives to hedge foreign currency exchange risk but may do so in the future[222] Inflation Risk This section discusses the potential effects of inflation on the company's costs and overall business operations - Cost inflation has not had a material effect on the Company's business, financial condition, or results of operations[223] - Significant inflationary pressures could prevent the Company from offsetting higher costs through price increases, and broader economic inflation could indirectly harm the business by reducing ad spend[223] Item 4. Controls and Procedures This section details the evaluation of Magnite's disclosure controls and procedures, reports on changes in internal control over financial reporting, and acknowledges the inherent limitations on the effectiveness of control systems Evaluation of Disclosure Controls and Procedures This section reports on management's assessment of the effectiveness of the company's disclosure controls - Management, including the CEO and CFO, concluded that the Company's disclosure controls and procedures were effective at the reasonable assurance level as of March 31, 2025[224] Changes in Internal Control over Financial Reporting This section discloses any material changes in the company's internal control over financial reporting - There have been no changes in internal control over financial reporting during the three months ended March 31, 2025, that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting[225] Inherent Limitations on Effectiveness of Controls This section acknowledges the inherent limitations that prevent control systems from providing absolute assurance - Management acknowledges that control systems provide only reasonable, not absolute, assurance due to inherent limitations such as faulty judgments, simple errors, circumvention, and management override[226] PART II. OTHER INFORMATION This section covers legal proceedings, risk factors, equity security sales, other information, and a list of exhibits Item 1. Legal Proceedings This section discloses that Magnite is involved in various legal and regulatory proceedings, including lawsuits alleging privacy statute violations. Management believes these matters will not materially adversely affect the company's financial position, results of operations, or cash flows - The Company is subject to routine legal and regulatory proceedings, including assertions of contract breach, intellectual property infringement, data collection/use claims, and privacy statute lawsuits[227] - Management believes that the final resolution of known legal matters will not have a material adverse effect on the Company's condensed consolidated financial position, results of operations, or cash flows as of March 31, 2025[227] Item 1A. Risk Factors This section supplements the risk factors outlined in the Annual Report on Form 10-K, emphasizing that investing in Magnite's common stock involves high risk, particularly due to macroeconomic challenges that can negatively impact advertising demand and business operations - Investing in Magnite's common stock involves a high degree of risk, as detailed in the Annual Report on Form 10-K[229] - Macroeconomic challenges (e.g., inflation, global conflict, recession risk) may amplify existing risks and negatively impact ad budgets, revenue, and operating results[230][231] - Continued inflation and tariffs could increase the Company's cost base and lead to additional or new taxes in foreign countries[232] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This section reports on the absence of recent unregistered sales of equity securities and details the Company's common stock repurchases during the quarter ended March 31, 2025, including shares withheld for tax settlement and purchases under the February 2024 Repurchase Plan Recent Sales of Unregistered Securities This section reports on any recent sales of equity securities not registered under the Securities Act - No recent unregistered sales of equity securities, except as previously disclosed[233] Use of Proceeds This section details the application of proceeds from equity security sales, if applicable - Not Applicable[234] Purchases of Equity Securities by the Company and Affiliated Purchasers This section reports on the company's repurchases of its own equity securities Common Stock Repurchases (Q1 2025) | Period | Total Number of Shares Purchased | Average Price per Share | Total number of shares purchased as part of a Publicly Announced Program | Approximate Dollar Value that May Yet be Purchased Under the Program | | :--- | :--- | :--- | :--- | :--- | | January 1 - January 31, 2025 | 1 | $16.09 | 0 | $110,427 | | February 1 - February 28, 2025 | 1,020 | $19.89 | 0 | $110,427 | | March 1 - March 31, 2025 | 1,501 | $12.82 | 1,500 | $91,198 | | Total | 2,522 | | 1,500 | | - The February 2024 Repurchase Plan authorizes up to $125.0 million for common stock or Convertible Senior Notes repurchases through February 1, 2026, with $91.2 million remaining available as of March 31, 2025[236] Item 5. Other Information This section provides additional material information not covered elsewhere in the report - Several Section 16 officers and directors adopted Rule 10b5-1 trading plans in Q1 2025 to sell shares, with durations ranging from a few months to a year[237] - For example, CEO Michael Barrett adopted a plan on March 12, 2025, to sell up to 460,000 shares between June 15, 2025, and May 31, 2026[237] Item 6. Exhibits This section lists all documents filed as exhibits to the current report - Exhibit 10.1 is Amendment No. 2 to the 2024 Credit Agreement, dated March 18, 2025[239] - The exhibits include various certifications (31.1, 31.2, 32) and XBRL taxonomy documents (101.ins, 101.sch, 101.cal, 101.def, 101.lab, 101.pre, 104)[239] Signatures This section contains the official attestations and signatures for the filed report - The report was signed by David Day, Chief Financial Officer, on behalf of Magnite, Inc. on May 7, 2025[243]