Magnite (NASDAQ: MGNI), the world's largest independent sell-side
advertising platform, today reported its results of operations for
the fourth quarter and year ended December 31, 2022.
Recent Highlights
- Revenue of $175.4 million for Q4 2022,
up 9% from Q4 2021
- Revenue ex-TAC(1) of $156.6 million for
Q4 2022, up 10% from Q4 2021
- Revenue ex-TAC(1) attributable to CTV
for Q4 2022 was $64.6 million, up 20% year-over-year
- Net loss for Q4 2022 of $36.4 million,
for a loss per share of $0.27, compared to net income of $0.5
million, or break even diluted earnings per share for the fourth
quarter of 2021
- Adjusted EBITDA(1) of $64.2 million in
Q4 2022 representing a 41% Adjusted EBITDA margin(3), compared to
Adjusted EBITDA of $67.5 million for the fourth quarter of
2021
- Non-GAAP diluted earnings per share(1)
of $0.24 for Q4 2022, compared to $0.26 non-GAAP diluted earnings
per share for the fourth quarter of 2021
- Operating cash flow(4) in Q4 2022 was
$56.9 million
Expectations:
- Revenue ex-TAC(1) for Q1 2023 to be
between $109 and $113 million
- Revenue ex-TAC(1) attributable to CTV
for Q1 2023 to be between $42.5 and $44.5 million
- Adjusted EBITDA operating expenses(2)
to be between $92 and $94 million for Q1 2023
- Revenue ex-TAC(1) for full-year 2023 to
grow versus 2022
- Adjusted EBITDA(1) in 2023 to be
approximately the same as 2022
- Adjusted EBITDA margin(3) to improve
meaningfully in the back half of 2023, following CTV platform
consolidation
- Total capital expenditures for 2023 to
be $40 million or less
- Total free cash flow(5) for 2023 to be
over $100 million
“We delivered a strong fourth quarter with total and CTV revenue
at the high end of our guidance ranges,” said Michael G. Barrett,
President and CEO of Magnite. “For the full year, we also exceeded
revenue targets and continue to build on our leading independent
market position by growing both the CTV and the DV+ business. We
are excited to introduce Magnite Streaming, which is our new
industry leading CTV & OTT platform, and continue to grow and
expand our partnerships, especially on the CTV side of the
business, to accelerate the programmatic growth in the industry
that remains ahead. We continue to expect to grow this year and
will remain efficient and focused on managing expenses, to deliver
strong profitability and free cash flow in 2023 for
shareholders.”
Magnite
Fourth Quarter 2022 Results
Summary |
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(in millions, except
per share amounts and percentages) |
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|
Three Months Ended |
|
Year Ended |
|
December 31, 2022 |
|
December 31, 2021 |
|
ChangeFavorable/
(Unfavorable) |
|
December 31, 2022 |
|
December 31, 2021 |
|
ChangeFavorable/
(Unfavorable) |
Revenue |
$175.4 |
|
$161.3 |
|
9% |
|
$577.1 |
|
$468.4 |
|
23% |
Revenue ex-TAC(1) |
$156.6 |
|
$142.1 |
|
10% |
|
$514.6 |
|
$416.5 |
|
24% |
Gross profit |
$64.4 |
|
$94.4 |
|
(32)% |
|
$269.9 |
|
$266.8 |
|
1% |
Net income (loss) |
($36.4) |
|
$0.5 |
|
NM |
|
($130.3) |
|
$0.1 |
|
NM |
Adjusted EBITDA(1) |
$64.2 |
|
$67.5 |
|
(5)% |
|
$178.8 |
|
$148.7 |
|
20% |
Adjusted EBITDA operating
expenses(2) |
$92.4 |
|
$74.6 |
|
(24)% |
|
$335.8 |
|
$267.8 |
|
(25%) |
Adjusted EBITDA margin(3) |
41% |
|
48% |
|
(7) ppt |
|
35% |
|
36% |
|
(1) ppt |
Basic earnings (loss) per
share |
($0.27) |
|
$— |
|
NM |
|
($0.98) |
|
$— |
|
NM |
Diluted earnings (loss) per
share |
($0.27) |
|
$— |
|
NM |
|
($0.98) |
|
$— |
|
NM |
Non-GAAP earnings (loss) per
share(1) |
$0.24 |
|
$0.26 |
|
(8)% |
|
$0.64 |
|
$0.55 |
|
16% |
Notes: |
(1) |
Revenue ex-TAC, Adjusted EBITDA, 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. |
(2) |
Adjusted EBITDA operating expenses is calculated as Revenue ex-TAC
less Adjusted EBITDA. |
(3) |
Adjusted EBITDA margin is calculated as Adjusted EBITDA divided by
Revenue ex-TAC. |
(4) |
Operating cash flow is calculated as Adjusted EBITDA less capital
expenditures. |
(5) |
Free cash flow is defined as operating cash flow (Adjusted EBITDA
less capital expenditures) less net interest expense. |
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|
Fourth Quarter 2022
Results Conference Call and Webcast:
The Company will host a conference call on February 22,
2023 at 1:30 PM (PT) / 4:30 PM (ET) to discuss the results for its
fourth 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: |
2032270 |
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, colorful Singapore, and down under in Sydney,
Magnite has offices across North America, EMEA, LATAM, and
APAC.
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"), the acquisition of
SpringServe, LLC ("SpringServe," and such acquisition the
"SpringServe Acquisition"), and the merger with Telaria, Inc.
("Telaria," and such merger the "Telaria Merger"), or the
anticipated benefits thereof; statements concerning potential
synergies from the Company's acquisitions; statements concerning
macroeconomic conditions, including inflation, supply chain issues
or the occurrence of a recession, or concerns related thereto; our
anticipated financial performance; 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, including the introduction
of our new Magnite Streaming platform; the impact of our traffic
shaping technology on our business; the success of the
consolidation of our two CTV platforms; 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
SpotX Acquisition, SpringServe Acquisition, and other acquisitions,
including with respect to the consolidation of our two CTV
platforms; the impact of macroeconomic challenges on the overall
demand for advertising and the advertising marketplace, including
as a result of global conflict, global pandemics and the responses
to such pandemics by governments, inflation, supply chain issues,
the occurrence of a recession, or concerns relating to the
foregoing; CTV spend on our platform 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 with buyers; our ability to introduce new
offerings and bring them to market in a timely manner, and to
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 acquired in
the SpringServe Acquisition and our developing identity solutions,
as well as potential negative impacts associated with the
integration of our CTV platforms and the introduction of Magnite
Streaming; 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; our business may be subject
to sales and use tax, advertising and other taxes; 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; our sales efforts may
require significant time and expense and may not yield the results
we seek; we may be exposed to claims from clients for breach of
contract; 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 or among our media clients; 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; the impact of antitrust regulations or enforcement actions
targeting the digital advertising ecosystem; our ability to comply
with, and the effect on our business of, evolving legal standards
and regulations, particularly concerning data protection and
privacy; 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; 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; 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; failure to maintain an effective system
of internal control over financial reporting, which could adversely
affect investor confidence; the use of our net operating losses and
tax credit carryforwards may be subject to certain limitations; our
ability to raise additional capital if needed and the elimination
of LIBOR; volatility in the price of our common stock; the impact
of our repurchase program on our stock price and cash reserves;
competition for investors and the impact of negative analyst or
investor research reports; and provisions of our charter documents
and Delaware law may inhibit a potential acquisition of the company
and limit the ability of stockholders to cause changes in company
management.
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 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, 2022, and subsequent Quarterly Reports
on Form 10-Q for 2023. 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 and other 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. Adjusted EBITDA operating expense is calculated as Revenue
ex-TAC less Adjusted EBITDA. 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, acquisition, or restructuring 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 and other
expenses or income, foreign currency gains and losses, and in
periods in which the Company generates net income, non-GAAP net
income (loss) 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)
|
December 31, 2022 |
|
December 31, 2021 |
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
326,254 |
|
|
$ |
230,401 |
|
Accounts receivable, net |
|
976,506 |
|
|
|
927,781 |
|
Prepaid expenses and other current assets |
|
23,501 |
|
|
|
19,934 |
|
TOTAL CURRENT ASSETS |
|
1,326,261 |
|
|
|
1,178,116 |
|
Property and equipment,
net |
|
44,969 |
|
|
|
34,067 |
|
Right-of-use lease asset |
|
78,211 |
|
|
|
76,986 |
|
Internal use software development
costs, net |
|
23,671 |
|
|
|
20,093 |
|
Intangible assets, net |
|
253,501 |
|
|
|
426,615 |
|
Goodwill |
|
978,217 |
|
|
|
969,873 |
|
Other assets, non-current |
|
7,383 |
|
|
|
6,862 |
|
TOTAL ASSETS |
$ |
2,712,213 |
|
|
$ |
2,712,612 |
|
LIABILITIES AND
STOCKHOLDERS' EQUITY |
|
|
|
Current liabilities: |
|
|
|
Accounts payable and accrued expenses |
|
1,094,321 |
|
|
$ |
1,000,956 |
|
Lease liabilities - current portion |
|
21,172 |
|
|
|
19,142 |
|
Debt, current |
|
3,600 |
|
|
|
3,600 |
|
Other current liabilities |
|
5,939 |
|
|
|
5,697 |
|
TOTAL CURRENT LIABILITIES |
|
1,125,032 |
|
|
|
1,029,395 |
|
Debt, non-current, net of debt
issuance costs |
|
722,757 |
|
|
|
720,023 |
|
Lease liabilities,
non-current |
|
66,331 |
|
|
|
66,487 |
|
Deferred tax liability, net |
|
5,072 |
|
|
|
13,303 |
|
Other liabilities,
non-current |
|
1,723 |
|
|
|
2,647 |
|
TOTAL LIABILITIES |
|
1,920,915 |
|
|
|
1,831,855 |
|
STOCKHOLDERS' EQUITY |
|
|
|
Common stock |
|
2 |
|
|
|
2 |
|
Additional paid-in capital |
|
1,319,221 |
|
|
|
1,282,589 |
|
Accumulated other comprehensive
loss |
|
(3,151 |
) |
|
|
(1,376 |
) |
Treasury stock |
|
— |
|
|
|
(6,007 |
) |
Accumulated deficit |
|
(524,774 |
) |
|
|
(394,451 |
) |
TOTAL STOCKHOLDERS' EQUITY |
|
791,298 |
|
|
|
880,757 |
|
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY |
$ |
2,712,213 |
|
|
$ |
2,712,612 |
|
|
|
|
|
|
|
|
|
MAGNITE, INC.CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS(In
thousands, except per share
amounts)(unaudited)
|
Three Months Ended |
|
Year Ended |
|
December 31, 2022 |
|
December 31, 2021 |
|
December 31, 2022 |
|
December 31, 2021 |
Revenue |
$ |
175,399 |
|
|
$ |
161,286 |
|
|
$ |
577,069 |
|
|
$ |
468,413 |
|
Expenses (1)(2): |
|
|
|
|
|
|
|
Cost of revenue |
|
111,015 |
|
|
|
66,839 |
|
|
|
307,165 |
|
|
|
201,662 |
|
Sales and marketing |
|
48,406 |
|
|
|
52,284 |
|
|
|
200,081 |
|
|
|
170,406 |
|
Technology and development |
|
22,543 |
|
|
|
21,013 |
|
|
|
93,757 |
|
|
|
74,449 |
|
General and administrative |
|
21,977 |
|
|
|
17,116 |
|
|
|
81,382 |
|
|
|
64,789 |
|
Merger, acquisition, and restructuring costs |
|
— |
|
|
|
399 |
|
|
|
7,468 |
|
|
|
38,177 |
|
Total expenses |
|
203,941 |
|
|
|
157,651 |
|
|
|
689,853 |
|
|
|
549,483 |
|
Income (loss) from
operations |
|
(28,542 |
) |
|
|
3,635 |
|
|
|
(112,784 |
) |
|
|
(81,070 |
) |
Other expense: |
|
|
|
|
|
|
|
Interest expense, net |
|
7,987 |
|
|
|
7,253 |
|
|
|
29,260 |
|
|
|
19,848 |
|
Other income |
|
(1,327 |
) |
|
|
(1,133 |
) |
|
|
(5,318 |
) |
|
|
(4,450 |
) |
Foreign exchange (gain) loss, net |
|
3,913 |
|
|
|
(122 |
) |
|
|
(1,129 |
) |
|
|
(1,480 |
) |
Total other expense, net |
|
10,573 |
|
|
|
5,998 |
|
|
|
22,813 |
|
|
|
13,918 |
|
Income (loss) before income
taxes |
|
(39,115 |
) |
|
|
(2,363 |
) |
|
|
(135,597 |
) |
|
|
(94,988 |
) |
Benefit for income taxes |
|
(2,730 |
) |
|
|
(2,816 |
) |
|
|
(5,274 |
) |
|
|
(95,053 |
) |
Net income (loss) |
$ |
(36,385 |
) |
|
$ |
453 |
|
|
$ |
(130,323 |
) |
|
$ |
65 |
|
Net income (loss) per share: |
|
|
|
|
|
|
|
Basic |
$ |
(0.27 |
) |
|
$ |
— |
|
|
$ |
(0.98 |
) |
|
$ |
— |
|
Diluted |
$ |
(0.27 |
) |
|
$ |
— |
|
|
$ |
(0.98 |
) |
|
$ |
— |
|
Weighted average shares used to
compute net income (loss) per share: |
|
|
|
|
|
|
|
Basic |
|
133,706 |
|
|
|
132,099 |
|
|
|
132,887 |
|
|
|
126,294 |
|
Diluted |
|
133,706 |
|
|
|
139,470 |
|
|
|
132,887 |
|
|
|
136,261 |
|
(1) Stock-based compensation expense included in our expenses was
as follows: |
|
Three Months Ended |
|
Year Ended |
December 31, 2022 |
|
December 31, 2021 |
|
December 31, 2022 |
|
December 31, 2021 |
Cost of revenue |
$ |
475 |
|
$ |
262 |
|
$ |
1,666 |
|
$ |
792 |
Sales and marketing |
|
5,301 |
|
|
5,292 |
|
|
21,558 |
|
|
15,718 |
Technology and development |
|
3,316 |
|
|
3,662 |
|
|
19,961 |
|
|
11,857 |
General and administrative |
|
4,833 |
|
|
2,998 |
|
|
18,929 |
|
|
11,297 |
Merger, acquisition, and
restructuring costs |
|
— |
|
|
— |
|
|
2,004 |
|
|
1,071 |
Total stock-based compensation
expense |
$ |
13,925 |
|
$ |
12,214 |
|
$ |
64,118 |
|
$ |
40,735 |
(2) Depreciation and amortization expense included in our expenses
was as follows: |
|
Three Months Ended |
|
Year Ended |
|
December 31, 2022 |
|
December 31, 2021 |
|
December 31, 2022 |
|
December 31, 2021 |
Cost of revenue |
$ |
61,977 |
|
$ |
26,007 |
|
$ |
142,616 |
|
$ |
78,115 |
Sales and marketing |
|
15,072 |
|
|
23,426 |
|
|
71,887 |
|
|
67,463 |
Technology and development |
|
216 |
|
|
206 |
|
|
913 |
|
|
674 |
General and administrative |
|
146 |
|
|
163 |
|
|
636 |
|
|
634 |
Total depreciation and
amortization expense |
$ |
77,411 |
|
$ |
49,802 |
|
$ |
216,052 |
|
$ |
146,886 |
|
|
|
|
|
|
|
|
|
|
|
|
MAGNITE, INC.CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS(In
thousands)(unaudited)
|
Year Ended |
|
December 31, 2022 |
|
December 31, 2021 |
OPERATING ACTIVITIES: |
|
|
|
Net income (loss) |
$ |
(130,323 |
) |
|
$ |
65 |
|
Adjustments to reconcile net income (loss) to net cash provided by
operating activities: |
|
|
|
Depreciation and amortization |
|
216,052 |
|
|
|
146,886 |
|
Stock-based compensation |
|
64,118 |
|
|
|
40,735 |
|
Impairment of intangible assets |
|
3,320 |
|
|
|
— |
|
(Gain) loss on disposal of property and equipment |
|
(86 |
) |
|
|
130 |
|
Provision for doubtful accounts |
|
(163 |
) |
|
|
49 |
|
Amortization of debt discount and issuance costs |
|
6,785 |
|
|
|
4,925 |
|
Non-cash lease expense |
|
1,485 |
|
|
|
(350 |
) |
Deferred income taxes |
|
(8,802 |
) |
|
|
(98,770 |
) |
Unrealized foreign currency gains, net |
|
(271 |
) |
|
|
(2,259 |
) |
Other items, net |
|
— |
|
|
|
3,292 |
|
Changes in operating assets and liabilities, net of effect of
business acquisitions: |
|
|
|
Accounts receivable |
|
(46,325 |
) |
|
|
(254,368 |
) |
Prepaid expenses and other assets |
|
(4,228 |
) |
|
|
1,324 |
|
Accounts payable and accrued expenses |
|
91,377 |
|
|
|
284,905 |
|
Other liabilities |
|
(389 |
) |
|
|
25 |
|
Net cash provided by operating activities |
|
192,550 |
|
|
|
126,589 |
|
INVESTING ACTIVITIES: |
|
|
|
Purchases of property and equipment |
|
(30,815 |
) |
|
|
(17,697 |
) |
Capitalized internal use software development costs |
|
(13,582 |
) |
|
|
(11,431 |
) |
Mergers and acquisitions, net of cash acquired and indemnification
claims holdback |
|
(20,755 |
) |
|
|
(661,869 |
) |
Net cash used in investing activities |
|
(65,152 |
) |
|
|
(690,997 |
) |
FINANCING ACTIVITIES: |
|
|
|
Proceeds from Convertible Senior Notes offering |
|
— |
|
|
|
400,000 |
|
Proceeds from issuance of debt, net of debt discount |
|
— |
|
|
|
349,200 |
|
Payment for capped call options |
|
— |
|
|
|
(38,960 |
) |
Payment for debt issuance costs |
|
— |
|
|
|
(30,378 |
) |
Proceeds from exercise of stock options |
|
2,234 |
|
|
|
9,425 |
|
Proceeds from issuance of common stock under employee stock
purchase plan |
|
3,744 |
|
|
|
3,714 |
|
Repayment of debt |
|
(3,600 |
) |
|
|
(1,800 |
) |
Repayment of financing lease |
|
(807 |
) |
|
|
(645 |
) |
Purchase of treasury stock |
|
(15,663 |
) |
|
|
(6,007 |
) |
Taxes paid related to net share settlement |
|
(14,498 |
) |
|
|
(6,496 |
) |
Payment of indemnification claims holdback |
|
(1,582 |
) |
|
|
— |
|
Net cash provided by (used in) financing activities |
|
(30,172 |
) |
|
|
678,053 |
|
EFFECT OF EXCHANGE RATE
CHANGES ON CASH, CASH EQUIVALENTS AND RESTRICTED CASH |
|
(1,417 |
) |
|
|
(683 |
) |
CHANGE IN CASH, CASH
EQUIVALENTS AND RESTRICTED CASH |
|
95,809 |
|
|
|
112,962 |
|
CASH, CASH EQUIVALENTS AND
RESTRICTED CASH — Beginning of period |
|
230,693 |
|
|
|
117,731 |
|
CASH, CASH EQUIVALENTS AND
RESTRICTED CASH — End of period |
$ |
326,502 |
|
|
$ |
230,693 |
|
|
|
|
|
|
|
|
|
MAGNITE, INC.CONDENSED
CONSOLIDATED STATEMENTS OF CASH
FLOWS-(Continued)(In
thousands)(unaudited)
|
Year Ended |
|
December 31, 2022 |
|
December 31, 2021 |
RECONCILIATION OF CASH, CASH
EQUIVALENTS AND RESTRICTED CASH TO CONSOLIDATED BALANCE
SHEETS: |
|
|
|
Cash and cash equivalents |
$ |
326,254 |
|
$ |
230,401 |
Restricted cash included in
prepaid expenses and other current assets |
|
248 |
|
|
240 |
Restricted cash included in
other assets, non-current |
|
— |
|
|
52 |
Total cash, cash equivalents and
restricted cash |
$ |
326,502 |
|
$ |
230,693 |
|
|
|
|
SUPPLEMENTAL DISCLOSURES OF
OTHER CASH FLOW INFORMATION: |
|
|
|
Cash paid for income
taxes |
$ |
4,932 |
|
$ |
2,141 |
Cash paid for interest |
$ |
26,320 |
|
$ |
12,908 |
Capitalized assets financed by
accounts payable and accrued expenses |
$ |
1,295 |
|
$ |
2,171 |
Capitalized stock-based
compensation |
$ |
2,704 |
|
$ |
1,496 |
Operating lease right-of-use
assets obtained in exchange for operating lease liabilities |
$ |
20,131 |
|
$ |
42,013 |
Purchase consideration -
indemnification claims holdback |
$ |
2,293 |
|
$ |
1,602 |
Common stock and options
issued for mergers and acquisitions |
$ |
— |
|
$ |
495,591 |
Debt discount, non-cash |
$ |
— |
|
$ |
10,800 |
|
|
|
|
|
|
MAGNITE,
INC.RECONCILIATION OF REVENUE TO GROSS PROFIT TO
REVENUE EX-TAC(In
thousands)(unaudited)
|
Three Months Ended |
|
Year Ended |
|
December 31, 2022 |
|
December 31, 2021 |
|
December 31, 2022 |
|
December 31, 2021 |
Revenue |
$ |
175,399 |
|
$ |
161,286 |
|
$ |
577,069 |
|
$ |
468,413 |
Less: Cost of revenue |
|
111,015 |
|
|
66,839 |
|
|
307,165 |
|
|
201,662 |
Gross Profit |
|
64,384 |
|
|
94,447 |
|
|
269,904 |
|
|
266,751 |
Add back: Cost of revenue, excluding TAC |
|
92,233 |
|
|
47,651 |
|
|
244,711 |
|
|
149,704 |
Revenue ex-TAC |
$ |
156,617 |
|
$ |
142,098 |
|
$ |
514,615 |
|
$ |
416,455 |
|
|
|
|
|
|
|
|
MAGNITE,
INC.RECONCILIATION OF NET INCOME (LOSS) TO
ADJUSTED EBITDA(In
thousands)(unaudited)
|
Three Months Ended |
|
Year Ended |
|
December 31, 2022 |
|
December 31, 2021 |
|
December 31, 2022 |
|
December 31, 2021 |
Net income (loss) |
$ |
(36,385 |
) |
|
$ |
453 |
|
|
$ |
(130,323 |
) |
|
$ |
65 |
|
Add back (deduct): |
|
|
|
|
|
|
|
Depreciation and amortization expense, excluding amortization of
acquired intangible assets |
|
8,365 |
|
|
|
7,246 |
|
|
|
31,658 |
|
|
|
25,017 |
|
Amortization of acquired intangibles |
|
69,046 |
|
|
|
42,556 |
|
|
|
184,394 |
|
|
|
121,869 |
|
Stock-based compensation expense |
|
13,925 |
|
|
|
12,214 |
|
|
|
64,118 |
|
|
|
40,735 |
|
Merger, acquisition, and restructuring costs, excluding stock-based
compensation expense |
|
— |
|
|
|
399 |
|
|
|
5,464 |
|
|
|
37,106 |
|
Non-operational real estate and other expense, net |
|
107 |
|
|
|
355 |
|
|
|
622 |
|
|
|
552 |
|
Interest expense, net |
|
7,987 |
|
|
|
7,253 |
|
|
|
29,260 |
|
|
|
19,848 |
|
Foreign exchange (gain) loss, net |
|
3,913 |
|
|
|
(122 |
) |
|
|
(1,129 |
) |
|
|
(1,480 |
) |
Benefit for income taxes |
|
(2,730 |
) |
|
|
(2,816 |
) |
|
|
(5,274 |
) |
|
|
(95,053 |
) |
Adjusted EBITDA |
$ |
64,228 |
|
|
$ |
67,538 |
|
|
$ |
178,790 |
|
|
$ |
148,659 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MAGNITE,
INC.RECONCILIATION OF NET INCOME (LOSS) TO
NON-GAAP INCOME (LOSS)(In
thousands)(unaudited)
|
Three Months Ended |
|
Year Ended |
|
December 31, 2022 |
|
December 31, 2021 |
|
December 31, 2022 |
|
December 31, 2021 |
Net income (loss) |
$ |
(36,385 |
) |
|
$ |
453 |
|
|
$ |
(130,323 |
) |
|
$ |
65 |
|
Add back (deduct): |
|
|
|
|
|
|
|
Merger, acquisition, and restructuring costs, including
amortization of acquired intangibles and excluding stock-based
compensation expense |
|
69,046 |
|
|
|
42,955 |
|
|
|
189,858 |
|
|
|
158,975 |
|
Stock-based compensation expense |
|
13,925 |
|
|
|
12,214 |
|
|
|
64,118 |
|
|
|
40,735 |
|
Non-operational real estate and other expense, net |
|
107 |
|
|
|
355 |
|
|
|
622 |
|
|
|
552 |
|
Foreign exchange (gain) loss, net |
|
3,913 |
|
|
|
(122 |
) |
|
|
(1,129 |
) |
|
|
(1,480 |
) |
Interest expense, Convertible Senior Notes |
|
250 |
|
|
|
250 |
|
|
|
1,000 |
|
|
|
794 |
|
Tax effect of Non-GAAP adjustments (1) |
|
(16,197 |
) |
|
|
(18,525 |
) |
|
|
(32,487 |
) |
|
|
(121,812 |
) |
Non-GAAP income |
$ |
34,659 |
|
|
$ |
37,580 |
|
|
$ |
91,659 |
|
|
$ |
77,829 |
|
(1) |
Non-GAAP income (loss) includes the estimated tax impact from the
reconciling items reconciling between net income (loss) and
non-GAAP income (loss). |
|
|
MAGNITE,
INC.RECONCILIATION OF GAAP INCOME (LOSS) PER SHARE
TO NON-GAAP EARNINGS PER SHARE(In thousands,
except per share amounts)(unaudited)
|
Three Months Ended |
|
Year Ended |
|
December 31, 2022 |
|
December 31, 2021 |
|
December 31, 2022 |
|
December 31, 2021 |
GAAP net income (loss) per
share (1): |
|
|
|
|
|
|
|
Basic |
$ |
(0.27 |
) |
|
$ |
— |
|
$ |
(0.98 |
) |
|
$ |
— |
Diluted |
$ |
(0.27 |
) |
|
$ |
— |
|
$ |
(0.98 |
) |
|
$ |
— |
|
|
|
|
|
|
|
|
Non-GAAP income (loss)
(2) |
$ |
34,659 |
|
|
$ |
37,580 |
|
$ |
91,659 |
|
|
$ |
77,829 |
|
|
|
|
|
|
|
|
Weighted-average shares used
to compute basic net income (loss) per share |
|
133,706 |
|
|
|
132,099 |
|
|
132,887 |
|
|
|
126,294 |
Dilutive effect of weighted-average common stock options, RSAs,
RSUs, and PSUs |
|
2,883 |
|
|
|
7,354 |
|
|
3,494 |
|
|
|
9,926 |
Dilutive effect of weighted-average ESPP |
|
2 |
|
|
|
17 |
|
|
18 |
|
|
|
41 |
Dilutive effect of weighted-average Convertible Senior Notes |
|
6,262 |
|
|
|
6,262 |
|
|
6,262 |
|
|
|
4,940 |
Non-GAAP weighted-average
shares outstanding (3) |
|
142,853 |
|
|
|
145,732 |
|
|
142,661 |
|
|
|
141,201 |
Non-GAAP earnings per
share |
$ |
0.24 |
|
|
$ |
0.26 |
|
$ |
0.64 |
|
|
$ |
0.55 |
(1) Calculated as net income (loss) divided by basic and diluted
weighted-average shares used to compute net income (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 per
share is computed using the same weighted-average number of shares
that are used to compute GAAP net income (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, except
percentages)(unaudited)
|
Revenue ex-TAC |
|
Three Months Ended |
|
December 31, 2022 |
|
December 31, 2021 |
|
|
Channel: |
|
|
|
|
|
|
|
CTV |
|
64,623 |
|
41 |
% |
|
$ |
54,025 |
|
38 |
% |
Mobile |
|
61,117 |
|
39 |
|
|
$ |
51,658 |
|
36 |
|
Desktop |
|
30,877 |
|
20 |
|
|
$ |
36,415 |
|
26 |
|
Total |
$ |
156,617 |
|
100 |
% |
|
$ |
142,098 |
|
100 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue ex-TAC |
|
Year Ended |
|
December 31, 2022 |
|
December 31, 2021 |
|
|
Channel: |
|
|
|
|
|
|
|
CTV |
|
214,803 |
|
42 |
% |
|
$ |
143,407 |
|
34 |
% |
Mobile |
|
188,116 |
|
36 |
|
|
$ |
160,067 |
|
39 |
|
Desktop |
|
111,696 |
|
22 |
|
|
$ |
112,981 |
|
27 |
|
Total |
$ |
514,615 |
|
100 |
% |
|
$ |
416,455 |
|
100 |
% |
Magnite (NASDAQ:MGNI)
Historical Stock Chart
From Jun 2024 to Jul 2024
Magnite (NASDAQ:MGNI)
Historical Stock Chart
From Jul 2023 to Jul 2024