Cover Page
Cover Page - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Feb. 16, 2023 | Jun. 30, 2022 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2022 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 001-36384 | ||
Entity Registrant Name | MAGNITE, INC. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 20-8881738 | ||
Entity Address, Address Line One | 1250 Broadway, | ||
Entity Address, Address Line Two | 15th Floor | ||
Entity Address, City or Town | New York, | ||
Entity Address, State or Province | NY | ||
Entity Address, Postal Zip Code | 10001 | ||
City Area Code | 212 | ||
Local Phone Number | 243-2769 | ||
Title of 12(b) Security | Common stock, par value $0.00001 per share | ||
Trading Symbol | MGNI | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 688,440,018 | ||
Entity Common Stock, Shares Outstanding | 135,057,173 | ||
Documents Incorporated by Reference | To the extent herein specifically referenced in Part III, portions of the Registrant's definitive Proxy Statement for the 2023 Annual General Meeting of Shareholders to be filed with the Securities and Exchange Commission pursuant to Regulation 14A. See Part III. | ||
Entity Central Index Key | 0001595974 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2022 | |
Auditor Information [Abstract] | |
Auditor Firm ID | 34 |
Auditor Name | Deloitte & Touche LLP |
Auditor Location | Los Angeles, California |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
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 |
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 |
Commitments and contingencies (Note 16) | ||
STOCKHOLDERS' EQUITY | ||
Preferred stock, $0.00001 par value, 10,000 shares authorized at December 31, 2022 and December 31, 2021; 0 shares issued and outstanding at December 31, 2022 and December 31, 2021 | 0 | 0 |
Common stock, $0.00001 par value; 500,000 shares authorized; 134,006 and 132,553 shares issued at December 31, 2022 and December 31, 2021, respectively, and 134,006 and 132,204 shares outstanding at December 31, 2022 and December 31, 2021, respectively | 2 | 2 |
Additional paid-in capital | 1,319,221 | 1,282,589 |
Accumulated other comprehensive loss | (3,151) | (1,376) |
Treasury stock at cost, 0 and 349 shares outstanding at December 31, 2022 and December 31, 2021, respectively | 0 | (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 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2022 | Dec. 31, 2021 |
STOCKHOLDERS' EQUITY | ||
Preferred stock, par or stated value per share (USD per share) | $ 0.00001 | $ 0.00001 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par or stated value per share (USD per share) | $ 0.00001 | $ 0.00001 |
Common stock, shares authorized (in shares) | 500,000,000 | 500,000,000 |
Common stock, shares, issued (in shares) | 134,006,000 | 132,553,000 |
Common stock, shares, outstanding (in shares) | 134,006,000 | 132,204,000 |
Treasury stock, common, shares (in shares) | 0 | 349,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Statement [Abstract] | |||
Revenue | $ 577,069 | $ 468,413 | $ 221,628 |
Expenses: | |||
Cost of revenue | 307,165 | 201,662 | 77,747 |
Sales and marketing | 200,081 | 170,406 | 76,030 |
Technology and development | 93,757 | 74,449 | 51,546 |
General and administrative | 81,382 | 64,789 | 52,987 |
Merger, acquisition, and restructuring costs | 7,468 | 38,177 | 17,552 |
Total expenses | 689,853 | 549,483 | 275,862 |
Loss from operations | (112,784) | (81,070) | (54,234) |
Other (income) expense: | |||
Interest (income) expense, net | 29,260 | 19,848 | (50) |
Other income | (5,318) | (4,450) | (3,665) |
Foreign exchange (gain) loss, net | (1,129) | (1,480) | 2,220 |
Total other (income) expense, net | 22,813 | 13,918 | (1,495) |
Loss before income taxes | (135,597) | (94,988) | (52,739) |
Provision (benefit) for income taxes | (5,274) | (95,053) | 693 |
Net income (loss) | $ (130,323) | $ 65 | $ (53,432) |
Net income (loss) per share: | |||
Basic (in USD per share) | $ (0.98) | $ 0 | $ (0.55) |
Diluted (in USD per share) | $ (0.98) | $ 0 | $ (0.55) |
Weighted average shares used to compute net income (loss) per share: | |||
Basic (in shares) | 132,887 | 126,294 | 96,700 |
Diluted (in shares) | 132,887 | 136,261 | 96,700 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Statement of Comprehensive Income [Abstract] | |||
Net income (loss) | $ (130,323) | $ 65 | $ (53,432) |
Other comprehensive loss: | |||
Foreign currency translation adjustments | (1,775) | (419) | (912) |
Other comprehensive loss | (1,775) | (419) | (912) |
Comprehensive loss | $ (132,098) | $ (354) | $ (54,344) |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | Treasury Stock |
Beginning Balance (in shares) at Dec. 31, 2019 | 53,888 | |||||
Beginning balance, treasury stock (in shares) at Dec. 31, 2019 | 0 | |||||
Beginning Balance at Dec. 31, 2019 | $ 111,936 | $ 1 | $ 453,064 | $ (45) | $ (341,084) | $ 0 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Exercise of common stock options (in shares) | 3,359 | |||||
Exercise of common stock options | 13,548 | 13,548 | ||||
Issuance of common stock related to employee stock purchase plan (in shares) | 381 | |||||
Issuance of common stock related to employee stock purchase plan | 1,660 | 1,660 | ||||
Issuance of common stock related to RSU vesting (in shares) | 5,126 | |||||
Shares withheld related to net share settlement (in shares) | (824) | |||||
Shares withheld related to net share settlement | (7,854) | (7,854) | ||||
Issuance of common stock associated with merger or acquisition (in shares) | 52,099 | |||||
Issuance of common stock associated with merger or acquisition | 275,773 | $ 1 | 275,772 | |||
Exchange of stock options and RSU related to Telaria Merger | 11,646 | 11,646 | ||||
Stock-based compensation | 29,248 | 29,248 | ||||
Other comprehensive income (loss) | (912) | (912) | ||||
Net income (loss) | (53,432) | (53,432) | ||||
Ending Balance (in shares) at Dec. 31, 2020 | 114,029 | |||||
Ending balance, treasury stock (in shares) at Dec. 31, 2020 | 0 | |||||
Ending Balance at Dec. 31, 2020 | 381,613 | $ 2 | 777,084 | (957) | (394,516) | $ 0 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Exercise of common stock options (in shares) | 1,560 | |||||
Exercise of common stock options | 9,425 | 9,425 | ||||
Issuance of common stock related to employee stock purchase plan (in shares) | 255 | |||||
Issuance of common stock related to employee stock purchase plan | 3,714 | 3,714 | ||||
Issuance of common stock related to RSU vesting (in shares) | 4,624 | |||||
Shares withheld related to net share settlement (in shares) | (289) | |||||
Shares withheld related to net share settlement | (6,496) | (6,496) | ||||
Issuance of common stock associated with merger or acquisition (in shares) | 12,374 | |||||
Issuance of common stock associated with merger or acquisition | 495,591 | 495,591 | ||||
Purchase of treasury stock (in shares) | (349) | |||||
Purchase of treasury stock | (6,007) | $ (6,007) | ||||
Retirement of common stock | (38,960) | (38,960) | ||||
Stock-based compensation | 42,231 | 42,231 | ||||
Other comprehensive income (loss) | (419) | (419) | ||||
Net income (loss) | $ 65 | 65 | ||||
Ending Balance (in shares) at Dec. 31, 2021 | 132,204 | 132,553 | ||||
Ending balance, treasury stock (in shares) at Dec. 31, 2021 | (349) | (349) | ||||
Ending Balance at Dec. 31, 2021 | $ 880,757 | $ 2 | 1,282,589 | (1,376) | (394,451) | $ (6,007) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Exercise of common stock options (in shares) | 613 | |||||
Exercise of common stock options | 2,234 | 2,234 | ||||
Issuance of common stock related to employee stock purchase plan (in shares) | 426 | |||||
Issuance of common stock related to employee stock purchase plan | 3,744 | 3,744 | ||||
Issuance of common stock related to RSU vesting (in shares) | 3,276 | |||||
Shares withheld related to net share settlement (in shares) | (1,270) | |||||
Shares withheld related to net share settlement | (14,498) | (14,498) | ||||
Purchase of treasury stock (in shares) | (1,243) | |||||
Purchase of treasury stock | $ (15,663) | $ (15,663) | ||||
Retirement of common stock (in shares) | (1,592) | 1,592 | ||||
Retirement of common stock | $ 0 | (21,670) | $ 21,670 | |||
Stock-based compensation | 66,822 | 66,822 | ||||
Other comprehensive income (loss) | (1,775) | (1,775) | ||||
Net income (loss) | $ (130,323) | (130,323) | ||||
Ending Balance (in shares) at Dec. 31, 2022 | 134,006 | 134,006 | ||||
Ending balance, treasury stock (in shares) at Dec. 31, 2022 | 0 | 0 | ||||
Ending Balance at Dec. 31, 2022 | $ 791,298 | $ 2 | $ 1,319,221 | $ (3,151) | $ (524,774) | $ 0 |
Consolidated Statement of Cash
Consolidated Statement of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
OPERATING ACTIVITIES: | |||
Net income (loss) | $ (130,323) | $ 65 | $ (53,432) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||
Depreciation and amortization | 216,052 | 146,886 | 49,248 |
Stock-based compensation | 64,118 | 40,735 | 28,491 |
Impairment of intangible assets | 3,320 | 0 | 0 |
(Gain) loss on disposal of property and equipment | (86) | 130 | (22) |
Provision for doubtful accounts | (163) | 49 | (138) |
Amortization of debt discount and issuance costs | 6,785 | 4,925 | 0 |
Non-cash lease expense | 1,485 | (350) | (784) |
Deferred income taxes | (8,802) | (98,770) | 789 |
Unrealized foreign currency gains, net | (271) | (2,259) | (1,161) |
Other items, net | 0 | 3,292 | 0 |
Changes in operating assets and liabilities, net of effect of business acquisitions: | |||
Accounts receivable | (46,325) | (254,368) | (103,836) |
Prepaid expenses and other assets | (4,228) | 1,324 | (10,095) |
Accounts payable and accrued expenses | 91,377 | 284,905 | 75,064 |
Other liabilities | (389) | 25 | 3,811 |
Net cash provided by (used in) operating activities | 192,550 | 126,589 | (12,065) |
INVESTING ACTIVITIES: | |||
Purchases of property and equipment | (30,815) | (17,697) | (14,292) |
Capitalized internal use software development costs | (13,582) | (11,431) | (7,667) |
Mergers and acquisitions, net of cash acquired and indemnification claims holdback | (20,755) | (661,869) | 54,595 |
Net cash provided by (used in) investing activities | (65,152) | (690,997) | 32,636 |
FINANCING ACTIVITIES: | |||
Proceeds from Convertible Senior Notes offering | 0 | 400,000 | 0 |
Proceeds from issuance of debt, net of debt discount | 0 | 349,200 | 0 |
Payment for capped call options | 0 | (38,960) | 0 |
Payment for debt issuance costs | 0 | (30,378) | 0 |
Proceeds from exercise of stock options | 2,234 | 9,425 | 13,548 |
Proceeds from issuance of common stock under employee stock purchase plan | 3,744 | 3,714 | 1,660 |
Repayment of debt | (3,600) | (1,800) | 0 |
Repayment of financing lease | (807) | (645) | 0 |
Purchase of treasury stock | (15,663) | (6,007) | 0 |
Taxes paid related to net share settlement | (14,498) | (6,496) | (7,854) |
Payment for Contingent Consideration Liability, Financing Activities | (1,582) | 0 | 0 |
Net cash provided by (used in) financing activities | (30,172) | 678,053 | 7,354 |
EFFECT OF EXCHANGE RATE CHANGES ON CASH, CASH EQUIVALENTS AND RESTRICTED CASH | (1,417) | (683) | 918 |
CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | 95,809 | 112,962 | 28,843 |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH — Beginning of period | 230,693 | 117,731 | 88,888 |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH — End of period | 326,502 | 230,693 | 117,731 |
RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH TO CONSOLIDATED BALANCE SHEETS: | |||
Cash and cash equivalents | 326,254 | 230,401 | 117,676 |
Restricted cash included in prepaid expenses and other current assets | 248 | 240 | 0 |
Restricted cash included in other assets, non-current | 0 | 52 | 55 |
Total cash, cash equivalents and restricted cash | 326,502 | 230,693 | 117,731 |
SUPPLEMENTAL DISCLOSURES OF OTHER CASH FLOW INFORMATION: | |||
Cash paid for income taxes | 4,932 | 2,141 | 1,614 |
Cash paid for interest | 26,320 | 12,908 | 101 |
Capitalized assets financed by accounts payable and accrued expenses | 1,295 | 2,171 | 42 |
Capitalized stock-based compensation | 2,704 | 1,496 | 757 |
Operating lease right-of-use assets obtained in exchange for operating lease liabilities | 20,131 | 42,013 | 2,036 |
Purchase consideration - indemnification claims holdback | 2,293 | 1,602 | 0 |
Common stock and options issued for mergers and acquisitions | 0 | 495,591 | 287,418 |
Debt discount, non-cash | $ 0 | $ 10,800 | $ 0 |
Nature of Operations
Nature of Operations | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Operations | Nature of Operations Company Overview Magnite, Inc. ("Magnite" or the "Company"), formerly known as The Rubicon Project, Inc., was formed in Delaware and began operations on April 20, 2007. On April 1, 2020, Magnite completed a stock-for-stock merger with Telaria, Inc., ("Telaria" and such merger the "Telaria Merger"), a leading sell side advertising platform and provider of connected television ("CTV") technology. On April 30, 2021, the Company completed its acquisition of SpotX, Inc. ("SpotX" and such acquisition the "SpotX Acquisition"), a leading CTV and video advertising platform. On July 1, 2021, the Company completed its acquisition of SpringServe, LLC ("SpringServe" and such acquisition the "SpringServe Acquisition"), a leading ad serving platform for CTV. The Company operates a sell side advertising platform that offers buyers and sellers of digital advertising a single partner for transacting globally across all channels, formats, and auction types. On June 8, 2020, the Company voluntarily delisted its common stock from the New York Stock Exchange ("NYSE") and commenced listing on The Nasdaq Global Select Market of The Nasdaq Stock Market LLC ("Nasdaq"). On June 30, 2020, the Company changed its name from "The Rubicon Project, Inc." to "Magnite, Inc." In connection with the name change, the Company also changed its ticker symbol from "RUBI" to "MGNI." Magnite has its principal offices in New York City, Los Angeles, Denver, London, and Sydney, and additional offices in Europe, Asia, North America, and South America. The Company provides a technology solution to automate the purchase and sale of digital advertising inventory for buyers and sellers globally, across all channels, formats and auction types. The Company's platform features applications and services for sellers of digital advertising inventory, or publishers, that own or operate websites, applications, CTV channels, and other digital media properties, to manage and monetize their inventory; applications and services for buyers, including advertisers, agencies, agency trading desks, and demand side platforms, to buy digital advertising inventory; and a transparent, independent marketplace that brings buyers and sellers together and facilitates intelligent decision making and automated transaction execution at scale. The Company's clients include many of the world's leading sellers and buyers of digital advertising inventory. |
Organization and Summary of Sig
Organization and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Organization and Summary of Significant Accounting Policies | Organization and Summary of Significant Accounting Policies Basis of Consolidation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP, and include the operations of the Company and its wholly owned subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation. Segments Management has determined that the Company operates as one segment. The Company’s chief operating decision maker reviews financial information on an aggregated and consolidated basis, together with certain operating and performance measures principally to make decisions about how to allocate resources and to measure the Company’s performance. Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported and disclosed financial statements and accompanying footnotes. Due to the economic uncertainty as a result of the COVID-19 pandemic, geopolitical events, including the conflict in Ukraine, and economic and macroeconomic factors like labor shortages, supply chain disruptions, inflation, and recessionary concerns impacting the markets and communities in which the Company's clients operate, it has become more difficult to apply certain assumptions and judgments into these estimates. The extent of the impact of these factors on the Company's operational and financial performance will depend on future developments, which are highly uncertain and cannot be predicted, including but not limited to, the duration and how quickly and to what extent normal economic and operating conditions can resume. During the year ended December 31, 2022, this uncertainty continued to result in a higher level of judgment related to its estimates and assumptions. As of the date of issuance of the consolidated financial statements, the Company is not aware of any specific event or circumstance that would require the Company to update its estimates, judgments, or revise the carrying value of its assets or liabilities. These estimates may change, as new events occur and additional information is obtained, and are recognized in the consolidated financial statements as soon as they become known. Actual results could differ materially from these estimates. On an ongoing basis, management evaluates its estimates, primarily those related to: (i) revenue recognition criteria, including the determination of revenue reporting as net versus gross in the Company’s revenue arrangements, (ii) accounts receivable and allowances for doubtful accounts, (iii) amounts capitalized and the useful lives of intangible assets, internal use software development costs, and property and equipment, (iv) valuation of long-lived assets and their recoverability, including goodwill, (v) the realization of tax assets and estimates of tax liabilities, (vi) assumptions used in valuation models to determine the fair value of stock-based awards, (vii) fair value of financial instruments, (viii) the recognition and disclosure of contingent liabilities, and (ix) the assumptions used in valuing acquired assets and assumed liabilities in business combinations. These estimates are based on historical data and experience, as well as various other factors that management believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Estimates relating to the estimated useful lives of internal-use software development costs, assumptions used in the valuation models to determine the fair value of stock options and stock-based compensation expense, business combinations, estimated useful lives of long-lived assets, recoverability of intangible assets and goodwill, the assumptions used in the valuation of acquired assets and liabilities in business combinations, and income taxes, including the realization of tax assets and estimates of tax liabilities. require the selection of appropriate valuation methodologies and models, and significant judgment in evaluating ranges of assumptions and financial inputs. Actual results may differ materially from those estimates under different assumptions or circumstances. Revenue Recognition The Company generates revenue from transactions where it provides a platform for the purchase and sale of digital advertising inventory. Generally, our revenue is based on a percentage of the ad spend that runs through our platform, although for certain clients or transaction types we may receive a fixed CPM for each impression sold, and for advertising campaigns that are transacted through insertion orders we earn revenue based on the full amount of ad spend that runs through our platform. The Company also generates revenue from the SpringServe ad server and Demand Manager header-bidding product, where fees are either based on the number of impressions processed or a percentage of ad spend. In addition, the Company may receive certain fixed monthly fees for the use of its platform or products. The Company's platform dynamically connects sellers and buyers of advertising inventory in a digital marketplace. The Company's solution incorporates proprietary machine-learning algorithms, sophisticated data processing, high-volume storage, detailed analytics capabilities, and a distributed infrastructure. Digital advertising inventory is created when consumers access sellers’ content. Sellers provide digital advertising inventory to the Company's platform in the form of advertising requests, or ad requests. When the Company receives ad requests from sellers, it sends bid requests to buyers, which enable buyers to bid on sellers’ digital advertising inventory. Winning bids can create advertising, or paid impressions, for the seller to present to the consumer. The total volume of spending between buyers and sellers on the Company's platform is referred to as advertising spend. The Company keeps a percentage of that advertising spend as a fee, and remits the remainder to the seller. The fee that the Company retains from the gross advertising spend on its platform is recognized as revenue. The fee earned on each transaction is based on the pre-existing agreement between the Company and the seller and the clearing price of the winning bid. The Company recognizes revenue upon fulfillment of its performance obligation to a client, which occurs at the point in time an ad renders and is counted as a paid impression, subject to a contract existing with the client and a fixed or determinable transaction price. The Company does not have arrangements with multiple performance obligations. The Company considers the following when determining if a contract exists (i) contract approval by all parties, (ii) identification of each party’s rights regarding the goods or services to be transferred, (iii) specified payment terms, (iv) commercial substance of the contract, and (v) collectability of substantially all of the consideration is probable. The determination of whether revenue should be reported on a gross or net basis is based on an assessment of whether the Company is acting as the principal or an agent in the transaction. In determining whether the Company is acting as the principal or an agent, the Company follows the accounting guidance for principal-agent considerations. Making such determinations involves judgment and is based on an evaluation of the terms of each arrangement, none of which are considered presumptive or determinative. Expenses The Company classifies its expenses into the following categories: Cost of Revenue. The Company's cost of revenue consists primarily of data center costs, bandwidth costs, ad protection costs, depreciation and maintenance expense of hardware supporting the Company's revenue-producing platform, amortization of software costs for the development of the Company's revenue-producing platform, amortization expense associated with acquired developed technologies, personnel costs, facilities-related costs, and cloud computing costs. In addition, for revenue booked on a gross basis, cost of revenue includes traffic acquisition costs. Personnel costs included in cost of revenue include salaries, bonuses, and stock-based compensation, and are primarily attributable to personnel in the Company's network operations group who support the Company's platform. The Company capitalizes costs associated with software that is developed or obtained for internal use and amortizes the costs associated with its revenue-producing platform in cost of revenue over their estimated useful lives. The Company amortizes acquired developed technologies over their estimated useful lives. Sales and Marketing. The Company's sales and marketing expenses consist primarily of personnel costs, including salaries, bonuses, and stock-based compensation, as well as marketing expenses such as brand marketing, travel expenses, trade shows and marketing materials, professional services, and amortization expense associated with client relationships, backlog, and non-compete agreements from the Company's business acquisitions and, to a lesser extent, facilities-related costs and depreciation and amortization. The Company's sales organization focuses on increasing the adoption of the Company's solution by existing and new buyers and sellers. The Company amortizes acquired intangibles associated with client relationships and backlog from its business acquisitions over their estimated useful lives. Technology and Development. The Company's technology and development expenses consist primarily of personnel costs, including salaries, bonuses, and stock-based compensation, and professional services associated with the ongoing development and maintenance of the Company's solution, depreciation and amortization, and, to a lesser extent, facilities-related costs. These expenses include costs incurred in the development, implementation and maintenance of internal use software, including platform and related infrastructure. Technology and development costs are expensed as incurred, except to the extent that such costs are associated with internal use software development that qualifies for capitalization, which are then recorded as internal use software development costs, net on the Company's consolidated balance sheets. The Company amortizes internal use software development costs that relate to its revenue-producing activities on the Company's platform to cost of revenue and amortizes other internal use software development costs to technology and development costs or general and administrative expenses, depending on the nature of the related project. The Company amortizes acquired intangibles associated with technology and development functions from its business acquisitions over their estimated useful lives. General and Administrative. The Company's general and administrative expenses consist primarily of personnel costs, including salaries, bonuses, and stock-based compensation, associated with the Company's executive, finance, legal, human resources, compliance, and other administrative personnel, as well as accounting and legal professional services fees, facilities-related costs and depreciation and amortization, and other corporate-related expenses. General and administrative expenses also include amortization of internal use software development costs and acquired intangible assets from the Company's business acquisitions over their estimated useful lives that relate to general and administrative functions. Merger, Acquisition, and Restructuring Costs. The Company's merger, acquisition, and restructuring costs consist primarily of professional service fees associated with merger and acquisition activities, cash-based employee termination costs, related stock-based compensation charges associated with mergers, acquisitions, or restructuring activities, and other restructuring activities, including facility closures, relocation costs, and impairment costs of abandoned technology associated with restructuring activities. Stock-Based Compensation Compensation expense related to employee and non-employee stock-based awards is measured and recognized in the consolidated financial statements based on the fair value of the awards granted. The Company grants awards to employees that vest based solely on continued service, or service conditions, awards that vest based on the achievement of performance targets, or performance conditions, and awards that vest based on our stock price exceeding a peer index, or market conditions. The fair value of each option award containing service and/or performance conditions is estimated on the grant date using the Black-Scholes option-pricing model. The fair value of awards containing market conditions is estimated using a Monte-Carlo lattice model. For service condition awards, stock-based compensation expense is recognized on a straight-line basis over the requisite service periods of the awards, which is generally four years. For performance condition and market condition awards, stock-based compensation expense is recognized using a graded vesting model over the requisite service period of the awards. For market condition awards, expense recognized is not subsequently reversed if the market conditions are not achieved. The assumptions and estimates used in the Black-Scholes pricing model are as follows: Fair Value of Common Stock. The fair value of common stock is based on the closing price of the Company's common stock as reported on the NASDAQ on the grant date. Risk-Free Interest Rate. The Company bases the risk-free interest rate used in the Black-Scholes option-pricing model on the yields of U.S. Treasury securities with maturities appropriate for the term of stock option awards. Expected Term. For employee stock options in which the Company did not have significant history and that contain service conditions, the Company applies the simplified approach, in which the expected term of an award is presumed to be the mid-point between the vesting date and the expiration date of the award. For employee stock options issued in the periods in which the Company did have significant history and that contain service conditions, the expected term is determined based on historical trends. The expected term of employee stock options that contain performance conditions represents the weighted-average period that the stock options are estimated to remain outstanding. Volatility. For grants issued in periods in which the Company did not have significant trading history for the Company’s common stock, the Company determined the price volatility based on the historical volatilities of a publicly traded peer group based on daily price observations over a period equivalent to the expected term of the stock option grants. For grants issued in periods in which the Company has sufficient history, the computation of the expected volatility assumption is based on the historical volatility of the Company’s common stock. Dividend Yield. The dividend yield assumption is based on the Company’s history and current expectations of dividend payouts. The Company has never declared or paid any cash dividends on its common stock and does not anticipate paying any cash dividends in the foreseeable future, so the Company used an expected dividend yield of zero. Determining the fair value of stock-based awards using a pricing model requires judgment. The Company’s use of the Black-Scholes option-pricing model requires the input of subjective assumptions such as the expected term of the award, the expected volatility of the price of the Company’s common stock, risk-free interest rates, and the expected dividend yield of the Company’s common stock. The assumptions used in the Company’s valuation model represent management’s best estimates. These estimates involve inherent uncertainties and the application of management’s judgment. If factors change and different assumptions are used, the Company’s stock-based compensation expense could be materially different in the future. Income Taxes Deferred income tax assets and liabilities are determined based upon the net tax effects of the differences between the Company’s consolidated financial statement carrying amounts and the tax basis of assets and liabilities and are measured using the enacted tax rate expected to apply to taxable income in the years in which the differences are expected to be reversed. A valuation allowance is used to reduce some or all of the deferred tax assets if, based upon the weight of available evidence, it is more likely than not that those deferred tax assets will not be realized. The Company maintains a partial valuation allowance to offset its domestic net deferred tax assets due to the uncertainty of realizing future tax benefits from the net operating loss carryforwards and other deferred tax assets. The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized. The Company recognizes interest and penalties accrued related to its uncertain tax positions in its income tax provision (benefit) in the consolidated statements of operations. Capital Stock The Company has authorized capital stock of 500,000,000 shares of common stock and 10,000,000 shares of preferred stock. The Company has issued common stock, which is included in outstanding common stock on the Company's consolidated balance sheets. During 2021 and 2022, the Company repurchased shares of common stock, which was recorded as treasury stock on the Company's consolidated balance sheets. In 2022, all repurchased shares, including any outstanding treasury stock from 2021, were subsequently retired. The Company has not issued any shares of its preferred stock subsequent to the Company's initial public offering ("IPO") and does not have any preferred stock outstanding. The Company is required to reserve and keep available out of its authorized but unissued shares of common stock such number of shares sufficient to affect the conversion of all shares granted and available for grant under the Company’s stock award plans. The number of shares of the Company's stock reserved for these purposes at December 31, 2022 was 33,067,253. The board of directors is authorized to establish, from time to time, the number of shares to be included in each series of preferred stock, and to fix the designation, powers, privileges, preferences, and relative participating, optional or other rights, if any, of the shares of each series of preferred stock, and any of its qualifications, limitations or restrictions. Net Income (Loss) Per Share Attributable to Common Stockholders Basic net income (loss) per share of common stock is calculated by dividing the net income (loss) by the weighted-average number of shares of common stock outstanding. Diluted income (loss) per share attributable to common stockholders adjusts the basic weighted-average number of shares of common stock outstanding for the effect of potentially dilutive securities during the period. Potentially dilutive securities consist of stock options, restricted stock awards, restricted stock units, potential shares issuable under the Company's Employee Stock Purchase Plan ("ESPP"), shares held in escrow, potential shares issuable as part of contingent consideration as a result of business combinations, and potential shares issuable as part of the Convertible Senior Notes. For purposes of this calculation, potentially dilutive securities are excluded from the calculation of diluted net income (loss) per share if their effect is anti-dilutive. Comprehensive Income (Loss) Comprehensive income (loss) encompasses all changes in equity other than those arising from transactions with stockholders, and consists of net income (loss), unrealized gains (losses) on investments and foreign currency translation adjustments. Cash and Cash Equivalents The Company invests excess cash primarily in money market funds, corporate debt securities, and highly liquid debt instruments of the U.S. government and its agencies. The Company classifies investments held in money market funds as cash equivalents because the money market funds have weighted-average maturities at the date of purchase of less than 90 days. Investments held in U.S. government and agency bonds and corporate debt securities with stated maturities of less than one year are classified as short-term investments included in marketable securities and prepaid expenses and other current assets. Restricted Cash The Company classifies certain restricted cash balances within prepaid expenses and other current assets and other assets, non-current on the consolidated balance sheets based upon the term of the remaining restrictions. At December 31, 2022 and 2021, the Company had restricted cash of $0.2 million and $0.3 million, respectively. Accounts Receivable Allowance for Doubtful Accounts Accounts receivable are recorded at the invoiced amount, are unsecured, and do not bear interest. The allowance for doubtful accounts is based on the best estimate of the amount of probable credit losses in existing accounts receivable. The allowance for doubtful accounts is determined based on historical collection experience and the review in each period of the status of the then-outstanding accounts receivable, while taking into consideration current client information, subsequent collection history and other relevant data. The Company reviews the allowance for doubtful accounts on a quarterly basis. Account balances are charged off against the allowance when the Company believes it is probable the receivable will not be recovered. Property and Equipment, Net Property and equipment, which includes amounts recorded under finance leases, are recorded at historical cost, less accumulated depreciation and amortization. Depreciation is computed using the straight-line method based upon the estimated useful lives of the assets. The estimated useful lives of the Company’s property and equipment are as follows: Years Computer equipment and network hardware 3 Furniture, fixtures and office equipment 5 to 7 Leasehold improvements Shorter of useful life or life of lease Network hardware under right-of-use finance arrangements Shorter of useful life or life of lease Repair and maintenance costs are charged to expense as incurred, while renewals and improvements are capitalized. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in the Company’s results of operations. Internal Use Software Development Costs The Company capitalizes certain internal use software development costs associated with creating and enhancing internally developed software related to the Company’s technology infrastructure. These costs include personnel and related employee benefits expenses for employees who are directly associated with and who devote time to software projects, and external direct costs of materials and services consumed in developing or obtaining the software. Software development costs that do not meet the qualification for capitalization, as further discussed below, are expensed as incurred and recorded in technology and development expenses in the results of operations. Software development activities generally consist of three stages, (i) the planning stage, (ii) the application and infrastructure development stage, and (iii) the post implementation stage. Costs incurred in the planning and post implementation stages of software development, including costs associated with the post-configuration training and repairs and maintenance of the developed technologies, are expensed as incurred. The Company capitalizes costs associated with software developed for internal use when the planning stage is completed, management has authorized further funding for the completion of the project, and it is probable that the project will be completed and perform as intended. Costs incurred in the application and infrastructure development stages, including significant enhancements and upgrades, are capitalized. Capitalization ends once a project is substantially complete and the software and technologies are ready for their intended purpose. Internal use software development costs are amortized using a straight-line method over the estimated useful life, which is generally three years, commencing when the software is ready for its intended use. The straight-line recognition method approximates the manner in which the expected benefit will be derived. On an ongoing basis, the Company assesses the remaining estimated useful lives of internal use software projects. If remaining useful lives are revised, the change is accounted for as a change in estimate. The Company does not transfer ownership of its software, or lease its software, to third parties. Capitalized Costs Incurred in Cloud Computing Arrangements Cloud computing arrangements, such as software as a service and other hosting arrangements, are evaluated for capitalized implementation costs in a similar manner as capitalized software development costs. If a cloud computing arrangement includes a software license, the software license element of the arrangement is accounted for in a manner consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the service element of the arrangement is accounted for as a service contract. The Company capitalized certain implementation costs for its cloud computing arrangements that are service contracts, which are included in prepaid expenses and other current assets and other assets, non-current within the consolidated balance sheets. The Company amortizes capitalized implementation costs in a cloud computing arrangement over the life of the service contract, which generally is three years. Intangible Assets Intangible assets primarily consist of acquired developed technology, client relationships, and non-compete agreements resulting from business combinations, which are recorded at acquisition-date fair value, less accumulated amortization. The Company determines the appropriate useful life of its intangible assets by performing an analysis of expected cash flows of the acquired assets. Intangible assets are amortized over their estimated useful lives using a straight-line method, which approximates the pattern in which the economic benefits are consumed. The Company’s intangible assets are being amortized over their estimated useful lives as follows: Years Developed technology 5 In-process research and development 3 to 5 Customer relationships 0.5 to 4 Backlog 0.75 Non-compete agreements 1 to 2 Other intangible assets 0.25 to 1.5 On an ongoing basis, the Company assesses the remaining estimated useful lives of intangible assets. If remaining useful lives are revised, the change is accounted for as a change in estimate. Intangible assets are reviewed for impairment indicators at least annually and whenever events or changes in circumstances indicate that the carrying amount of the assets might not be recoverable. Conditions that would necessitate an impairment assessment include a significant decline in the observable market value of an asset, a significant change in the extent or manner in which an asset is used, or any other significant adverse change that would indicate that the carrying amount of an asset or group of assets may not be recoverable. For intangible assets used in operations, impairment losses are only recorded if the asset’s carrying amount is not recoverable through its undiscounted, probability-weighted future cash flows. The Company measures the impairment loss based on the difference between the carrying amount and estimated fair value. Impairment of Long-Lived Assets including Internal Use Capitalized Software Costs The Company assesses the recoverability of its long-lived assets when events or changes in circumstances indicate their carrying value may not be recoverable. Such events or changes in circumstances may include: a significant adverse change in the extent or manner in which a long-lived asset is being used, significant adverse change in legal factors or in the business climate that could affect the value of a long-lived asset, an accumulation of costs significantly in excess of the amount originally expected for the acquisition or development of a long-lived asset, current or future operating or cash flow losses that demonstrate continuing losses associated with the use of a long-lived asset, or a current expectation that, more likely than not, a long-lived asset will be sold or otherwise disposed of significantly before the end of its previously estimated useful life. The Company performs impairment testing at the asset group level that represents the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. The Company assesses recoverability of a long-lived asset by determining whether the carrying value of the asset group can be recovered through projected undiscounted cash flows over their remaining lives. If the carrying value of the asset group exceeds the forecasted undiscounted cash flows, an impairment loss is recognized, measured as the amount by which the carrying amount exceeds estimated fair value. An impairment loss is charged to operations in the period in which management determines such impairment. Business Combinations The results of businesses acquired in a business combination are included in the Company’s consolidated financial statements from the date of acquisition. The Company allocates the purchase price of a business combination, which is the sum of the consideration provided, which may consist of cash, equity or a combination of the two, to the identifiable assets and liabilities of the acquired business at their acquisition date fair values. The excess of the purchase price over the amount allocated to the identifiable assets and liabilities, if any, is recorded as goodwill. Determining the fair value of assets acquired and liabilities assumed requires management to use significant judgment and estimates including the selection of valuation methodologies, estimates of future revenues and cash flows, discount rates and selection of comparable companies. When the Company issues stock-based or cash awards to an acquired company’s stockholders, the Company evaluates whether the awards are contingent consideration or compensation for post-business combination services. The evaluation includes, among other things, whether the vesting of the awards is contingent on the continued employment of the selling stockholder beyond the acquisition date. If continued employment is required for vesting, the awards are treated as compensation for post-acquisition services and recognized as expense over the requisite service period. The Company estimates the fair value of intangible assets acquired generally using a discounted cash flow approach, which includes an analysis of the future cash flows expected to be generated by the asset and the risk associated with achieving these cash flows. The key assumptions used in the discounted cash flow model include the discount rate that is applied to the forecasted future cash flows to calculate the present value of those cash flows and the estimate of future cash flows attributable to the acquired intangible asset, which include revenue, expenses and taxes. The carrying value of acquired working capital assets and liabilities approximates its fair value, given the short-term nature of these assets and liabilities. Acquisition-related transaction costs are not included as a component of consideration transferred, but are accounted for as an expense in the period in which the costs are incurred. Goodwill Goodwill represents the excess of the aggregate fair value of the consideration transferred in a business combination over the fair value of the assets acquired, net of liabilities assumed. Goodwill is not amortized, but is subject to impairment testing conducted annually during the fou |
Net Income (Loss) Per Share
Net Income (Loss) Per Share | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) Per Share | Net Income (Loss) Per Share The following table presents the basic and diluted net income (loss) per share: Year Ended December 31, 2022 December 31, 2021 December 31, 2020 (in thousands, except per share amounts) Basic Income (Loss) Per Share: Net income (loss) $ (130,323) $ 65 $ (53,432) Weighted-average common shares outstanding 132,887 126,294 96,700 Weighted-average unvested restricted shares — — — Weighted-average common shares outstanding used to compute net income (loss) per share 132,887 126,294 96,700 Basic net income (loss) per share $ (0.98) $ — $ (0.55) Diluted Income (Loss) Per Share: Net income (loss) $ (130,323) $ 65 $ (53,432) Denominator adjustment: Weighted-average common shares used in basic EPS 132,887 126,294 96,700 Dilutive effect of weighted-average restricted stock units — 5,294 — Dilutive effect of weighted-average common stock options — 4,435 — Dilutive effect of weighted-average performance stock units — 197 — Dilutive effect of weighted-average ESPP shares — 41 — Weighted-average shares used to compute diluted net income (loss) per share 132,887 136,261 96,700 Diluted net income (loss) per share $ (0.98) $ — $ (0.55) The following weighted-average shares have been excluded from the calculation of diluted net income (loss) per share attributable to common stockholders for each period presented because they are anti-dilutive: Year Ended December 31, 2022 December 31, 2021 December 31, 2020 (in thousands) Unvested restricted stock units 1,506 — 4,713 Options to purchase common stock 1,864 — 2,317 Unvested performance awards 124 — 40 ESPP shares 18 — 50 Convertible Senior Notes 6,262 4,940 — Total shares excluded from net income (loss) per share 9,774 4,940 7,120 For the years ended December 31, 2022 and December 31, 2020, the Company excluded outstanding performance stock units from the calculation of diluted net loss per share because they were anti-dilutive. As of December 31, 2022, the performance stock units granted during April 2020, April 2021, August 2021, and February 2022 had expected achievement levels of 116%, 0%, 0%, and 81%, respectively. As of December 31, 2020, the performance stock units granted during April 2020 had expected achievement level of 150%. As of December 31, 2021, the Company included outstanding performance stock units in the calculation of diluted net income per share. As of December 31, 2021, the performance stock units granted during April 2020, April 2021, and August 2021 had expected achievement levels of 150%, 0%, and 0%, respectively. Refer to Note 12 —"Stock-Based Compensation" for additional information related to performance stock units. For the years ended December 31, 2022 and December 31, 2021, shares that would be issuable assuming conversion of all of the Convertible Senior Notes (as defined in Note 17) were excluded from the calculation of diluted loss per share because they were anti-dilutive. Diluted earnings per share for the Convertible Senior Notes is calculated under the if-converted method in accordance with ASC 260, Earnings Per Share . The Convertible Senior Notes have an initial conversion rate of 15.6539 shares of common stock per $1,000 principal amount of the Convertible Senior Notes, which will be subject to anti-dilution adjustments in certain circumstances. As of December 31, 2022 and 2021, the number of shares that would be issuable assuming conversion of all of the Convertible Senior Notes is approximately 6,261,560. Refer to Note 17—"Debt" for additional information related to accounting for Convertible Senior Notes issued and associated Capped Call Transactions. |
Revenues
Revenues | 12 Months Ended |
Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenues | Revenues For the majority of transactions on the Company's platform, the Company reports revenue on a net basis as it does not act as the principal in the purchase and sale of digital advertising inventory because it does not have control of the digital advertising inventory and does not set prices agreed upon within the auction marketplace. For certain advertising campaigns that are transacted through insertion orders, the Company reports revenue on a gross basis, based primarily on its determination that the Company acts as the primary obligor in the delivery of advertising campaigns for buyers with respect to such transactions. The Company does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which the Company recognizes revenue at the amount to which it has the right to invoice for services performed. The following table presents our revenue recognized on a net basis and on a gross basis for the years ended December 31, 2022, 2021, and 2020: Year Ended December 31, 2022 December 31, 2021 December 31, 2020 (in thousands, except percentages) Revenue: Net basis $ 475,633 82 % $ 389,358 83 % $ 218,222 98 % Gross basis 101,436 18 79,055 17 3,406 2 Total $ 577,069 100 % $ 468,413 100 % $ 221,628 100 % The following table presents our revenue by channel for the years ended December 31, 2022, 2021, 2020: Year Ended December 31, 2022 December 31, 2021 December 31, 2020 (in thousands, except percentages) Channel: CTV $ 268,572 47 % $ 185,254 40 % $ 34,319 15 % Mobile 192,803 33 164,977 35 108,353 49 Desktop 115,694 20 118,182 25 78,956 36 Total $ 577,069 100 % $ 468,413 100 % $ 221,628 100 % The following table presents the Company's revenue disaggregated by geographic location, based on the location of the Company's sellers: Year Ended December 31, 2022 December 31, 2021 December 31, 2020 (in thousands) United States $ 447,634 $ 365,161 $ 161,570 International 129,435 103,252 60,058 Total $ 577,069 $ 468,413 $ 221,628 Payment terms are specified in agreements between the Company and the buyers and sellers on its platform. The Company generally bills buyers at the end of each month for the full purchase price of impressions filled in that month. The Company recognizes volume discounts as a reduction of revenue as they are incurred. Specific payment terms may vary by agreement, but are generally seventy-five days or less. The Company's accounts receivable are recorded at the amount of gross billings to buyers, net of allowances for the amounts the Company is responsible to collect. The Company's accounts payable related to amounts due to sellers are recorded at the net amount payable to sellers (see Note 10). Accordingly, both accounts receivable and accounts payable appear large in relation to revenue reported on a net basis. Accounts receivable are recorded at the invoiced amount, are unsecured, and do not bear interest. The allowance for doubtful accounts is reviewed quarterly, requires judgment, and is based on the best estimate of the amount of probable credit losses in existing accounts receivable. The Company reviews the status of the then-outstanding accounts receivable on a customer-by-customer basis, taking into consideration the aging schedule of receivables, its historical collection experience, current information regarding the client, subsequent collection history, and other relevant data, in establishing the allowance for doubtful accounts. Accounts receivable are presented net of an allowance for doubtful accounts of $1.1 million at December 31, 2022, and $3.5 million at December 31, 2021. Accounts receivable are written off against the allowance for doubtful accounts when the Company determines amounts are no longer collectible. The Company reviews the associated payable to sellers for recovery of buyer receivable allowance and write-offs; in some cases, the Company can reduce the payable to sellers. The reduction of seller payables related to recovery of uncollected buyer receivables is netted against allowance expense. The contra seller payables related to recoveries were $0.6 million and $2.1 million as of December 31, 2022 and December 31, 2021, respectively. The following is a summary of activity in the allowance for doubtful accounts for the years ended December 31, 2022, 2021, and 2020, respectively: Year Ended December 31, 2022 December 31, 2021 December 31, 2020 (in thousands) Allowance for doubtful accounts, Beginning Balance $ 3,475 $ 2,360 $ 3,400 Allowance for doubtful accounts, assumed from mergers or acquisitions — 835 1,033 Write-offs (751) (337) (3,054) Increase (decrease) in provision for expected credit losses (1,719) 597 870 Recoveries of previous write-offs 87 20 111 Allowance for doubtful accounts, December 31 $ 1,092 $ 3,475 $ 2,360 |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Recurring Fair Value Measurements Fair value represents the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Observable inputs are based on market data obtained from independent sources. The fair value hierarchy is based on the following three levels of inputs, of which the first two are considered observable and the last one is considered unobservable: • Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. • Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. • Level 3 – Unobservable inputs. The table below sets forth a summary of financial instruments that are measured at fair value on a recurring basis at December 31, 2022: Total Quoted Prices in Significant Other Significant (in thousands) Cash equivalents $ 259,647 $ 259,647 $ — $ — The table below sets forth a summary of financial instruments that are measured at fair value on a recurring basis at December 31, 2021: Total Quoted Prices in Significant Other Significant (in thousands) Cash equivalents $ 7,869 $ 7,869 $ — $ — At December 31, 2022 and 2021, cash equivalents of $259.6 million and $7.9 million, respectively, consisted of money market funds and commercial paper, with original maturities of three months or less. The carrying amounts of cash equivalents are classified as Level 1 or Level 2 depending on whether or not their fair values are based on quoted market prices for identical securities that are traded in an active market. At December 31, 2022 and 2021, the Company had Convertible Senior Notes and its Term Loan B Facility (as defined in Note 17) included in its balance sheets. The estimated fair value of the Company's Convertible Senior Notes was $305.0 million and $315.5 million, as of December 31, 2022 and 2021,respectively. The estimated fair value of Convertible Senior Notes is based on market rates and the closing trading price of the Convertible Senior Notes as of December 31, 2022 and 2021 and is classified as Level 2 in the fair value hierarchy. At December 31, 2022, the estimated fair value of the Company's Term Loan B Facility was $333.3 million and at December 31, 2021, the estimated fair value of the Company's Term Loan B Facility approximated the carrying value. The estimated fair value is based on borrowing rates currently available to the Company for financing with similar terms and is classified as Level 2 in the fair value hierarchy. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment Major classes of property and equipment were as follows: December 31, 2022 December 31, 2021 (in thousands) Purchased software $ 1,250 $ 1,214 Computer equipment and network hardware 150,405 124,907 Furniture, fixtures and office equipment 3,659 3,476 Leasehold improvements 3,368 3,307 Gross property and equipment 158,682 132,904 Accumulated depreciation (113,713) (98,837) Net property and equipment $ 44,969 $ 34,067 Depreciation expense on property and equipment totaled $19.0 million, $16.1 million, and $16.0 million for the years ended December 31, 2022, 2021, and 2020, respectively. There were no impairment charges to property and equipment for the years ended December 31, 2022, 2021, and 2020. As part of the April 30, 2021 acquisition of SpotX, the Company acquired finance leases related primarily to network hardware. The accumulated depreciation related to assets under finance leases was approximately $1.3 million and $0.5 million as of December 31, 2022 and 2021, respectively, and was included in depreciation expense when recognized. See Note 15 for more information regarding the related finance lease obligation. The Company's property and equipment, net by geographical region was as follows: December 31, 2022 December 31, 2021 (in thousands) United States $ 31,036 $ 23,495 International 13,933 10,572 Total $ 44,969 $ 34,067 |
Internal Use Software Developme
Internal Use Software Development Costs | 12 Months Ended |
Dec. 31, 2022 | |
Research and Development [Abstract] | |
Internal Use Software Development Costs | Internal Use Software Development Costs Internal use software development costs were as follows: December 31, 2022 December 31, 2021 (in thousands) Internal use software development costs, gross 77,151 $ 62,490 Accumulated amortization (53,480) (42,397) Internal use software development costs, net $ 23,671 $ 20,093 During the years ended December 31, 2022, 2021, and 2020, the Company capitalized $16.2 million, $12.9 million, and $9.2 million, respectively, of internal use software development costs. Amortization expense was $12.6 million, $9.0 million, and $8.3 million for the years ended December 31, 2022, 2021, and 2020, respectively. In the years ended December 31, 2022, 2021, and 2020, amortization expense included the write-off of software development costs of $1.5 million, $0.1 million, and $0.1 million, in the respective periods, related to the abandonment of the associated projects. During the fourth quarter of 2022, the Company reassessed the remaining estimated useful lives of capitalized software projects related to integration of its technology platforms. The change in the remaining estimated useful lives for the related projects resulted in increased amortization expense of $0.7 million for the year ended December 31, 2022. The increased amortization expense increased the basic and diluted loss per share by $0.01, net of tax, for the year ended December 31, 2022. Based on the Company’s internal use software development costs at December 31, 2022, excluding projects that are not ready for their intended use with a value of $7.5 million, estimated amortization expense of $10.7 million, $4.1 million, and $1.4 million is expected to be recognized in 2023, 2024, and 2025, respectively. |
Goodwill, Intangible Assets, an
Goodwill, Intangible Assets, and Capitalized Costs Incurred in Cloud Computing Arrangements | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill, Intangible Assets, and Capitalized Costs Incurred in Cloud Computing Arrangements | Goodwill, Intangible Assets, and Capitalized Costs Incurred in Cloud Computing Arrangements Details of the Company’s goodwill were as follows (in thousands): Total Beginning balance at December 31, 2020 $ 158,125 Additions for Acquisition of SpotX (Note 9) 782,831 Additions for Acquisition of SpringServe (Note 9) 24,156 Additions for Acquisition of Nth Party (Note 9) 4,761 Ending balance at December 31, 2021 969,873 Additions for Acquisition of Carbon (Note 9) 8,456 Adjustments to the Acquisition of SpotX (Note 9) (112) Ending balance at December 31, 2022 $ 978,217 The Company’s intangible assets as of December 31, 2022 and 2021 included the following: December 31, 2022 December 31, 2021 (in thousands) Amortizable intangible assets: Developed technology $ 390,136 $ 378,958 Customer relationships 136,000 173,950 In-process research and development 12,730 14,630 Non-compete agreements 900 2,270 Trademarks 900 1,400 Total identifiable intangible assets, gross 540,666 571,208 Accumulated amortization—intangible assets: Developed technology (184,439) (75,850) Customer relationships (97,316) (65,702) In-process research and development (4,398) (1,250) Non-compete agreements (562) (1,197) Trademarks (450) (594) Total accumulated amortization—intangible assets (287,165) (144,593) Total identifiable intangible assets, net $ 253,501 $ 426,615 Amortization of intangible assets for the years ended December 31, 2022, 2021, and 2020 was $184.4 million, $121.9 million, and $24.9 million, respectively. For the years ended December 31, 2022, 2021, and 2020 the Company wrote off fully amortized intangible assets with a historical cost of $40.5 million, $11.1 million and $1.1 million, respectively. During the year ended December 31, 2022, the Company abandoned certain in-process research and development projects and technology intangible assets. The abandonment resulted in $3.3 million of impairment costs, which was included in merger, acquisition, and restructuring costs During the fourth quarter of 2022, the Company reassessed the remaining estimated useful lives of the developed technology and in-process research and development related to the SpotX acquisition based on the remaining expected benefit from those assets. The change in the remaining estimated useful lives for developed technology and in-process research and development resulted in increased amortization expense of $34.7 million for the year ended December 31, 2022. The increased amortization expense increased the basic and diluted loss per share by $0.27, net of tax, for the year ended December 31, 2022. The estimated remaining amortization expense associated with the Company's intangible assets was as follows as of December 31, 2022: Fiscal Year Amount (in thousands) 2023 $ 202,490 2024 30,134 2025 14,445 2026 6,001 2027 431 Total $ 253,501 The Company capitalizes costs related to arrangements for infrastructure as a service, platform as a service, and software as a service. As of December 31, 2022 and 2021, capitalized costs associated with these arrangements was included in prepaid expenses and other current assets in the amounts of $0.7 million and $0.5 million, respectively, and within other assets, non-current in the amounts of $0.5 million and $0.7 million, respectively. The amortization of these agreements was $0.7 million and $0.4 million for the years ended December 31, 2022 and 2021, respectively, and an insignificant amount for the year ended December 31, 2020. The Company's qualitative assessment in the fourth quarter of 2022 did not indicate that it is more likely than not that the fair value of its goodwill, intangible assets, and other long-lived assets is less than the aggregate carrying amount. |
Business Combinations
Business Combinations | 12 Months Ended |
Dec. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Business Combinations | Business Combinations 2020 Merger—Telaria On April 1, 2020, (the "Acquisition Date"), the Company completed the merger with Telaria. Upon completion of the Telaria Merger, each share of Telaria common stock issued and outstanding was converted into 1.082 shares of Magnite common stock. As a result, the Company issued 52,098,945 shares of Magnite common stock. In connection with the Telaria Merger, Magnite also assumed Telaria’s 2013 Equity Incentive Plan, as amended; 2008 Stock Plan, as amended; and the ScanScout, Inc. 2009 Equity Incentive Plan, as amended. As of the Acquisition Date, former holders of Telaria common stock owned approximately 48% and pre-merger holders of Magnite common stock owned approximately 52% of the common stock of the combined company on a fully diluted basis. As part of the Telaria Merger, existing outstanding restricted stock units of Telaria common stock and stock options to purchase common stock of Telaria were exchanged for 1.082 restricted stock units of the Company and options to purchase the Company's common stock, respectively. The fair value of stock options exchanged on the date of the Telaria Merger attributable to pre-acquisition services was recorded as purchase consideration. The fair value of the restricted stock units and stock options exchanged on the date of the Telaria Merger attributable to post-acquisition services will be recorded as additional stock-based compensation expense in the Company's consolidated statements of operations over their remaining requisite service (vesting) periods. The following table summarizes the total purchase consideration (in thousands): Shares of Magnite common stock $ 274,604 Fair value of stock-based awards exchanged 11,646 Acceleration of single trigger equity awards, converted 1,168 Total purchase consideration $ 287,418 The purchase consideration for the acquisition included 52,008,316 shares of the Company's common stock with a fair value of approximately $274.6 million, based on the Company's stock price as reported on the NYSE on the Acquisition Date. The fair value of stock options and restricted stock units exchanged on the Acquisition Date attributable to pre-acquisition services of approximately $10.4 million and $1.2 million, respectively, have been recorded as purchase consideration. In addition, the Company recorded additional purchase consideration associated with acceleration of 90,629 shares of common stock issued associated with single-trigger equity awards in the amount of $1.2 million. The fair value of stock options and restricted stock units exchanged on the Acquisition Date attributable to post-acquisition services of $4.7 million and $12.2 million, respectively, will be recorded as additional stock-based compensation expense on the Company's consolidated statements of operations over their remaining requisite service (vesting) periods. The fair value of the purchase price was allocated to the identifiable assets acquired and liabilities assumed based upon their estimated fair values as of the date of the acquisition as set forth below (in thousands): Cash and cash equivalents $ 51,848 Accounts receivable, net 150,924 Prepaid expenses and other current assets 3,054 Property and equipment, net 1,814 Right-of-use lease asset 26,627 Intangible assets 103,410 Restricted cash 2,747 Other assets, non-current 369 Deferred tax assets, non-current 103 Goodwill 150,755 Total assets acquired 491,651 Accounts payable and accrued expenses 172,751 Lease liabilities - current portion 5,322 Deferred revenue 11 Other current liabilities 365 Lease liabilities - non-current portion 23,323 Other liabilities, non-current 194 Deferred tax liability 2,267 Total liabilities assumed 204,233 Total purchase price $ 287,418 The Company believes the amount of goodwill resulting from the purchase price allocation is primarily attributable to expected synergies from assembled workforce, an increase in development capabilities, increased offerings to customers, and enhanced opportunities for growth and innovation. Goodwill will not be amortized but instead will be tested for impairment at least annually or more frequently if certain indicators of impairment are present. In the event that goodwill has become impaired, the Company will record an expense for the amount impaired during the quarter in which the determination is made. The acquired intangibles and goodwill resulting from the Telaria Merger are not amortizable for tax purposes. The following table summarizes the components of the intangible assets and estimated useful lives as of the Acquisition Date (dollars in thousands): Estimated Useful Life Technology $ 58,000 5 years In-process research and development 8,030 4.7 years* Customer relationships 36,300 2.5 years Backlog 880 0.75 years Trademarks 200 0.25 years Total intangible assets acquired $ 103,410 * In-process research and development consists of two projects with a weighted-average useful life of 4.7 years. Amortization begins once associated projects are completed and it is determined the projects have alternative future use. The fair value of the acquired technology and in-process research and development was valued using The Revenue Split Method. This methodology included allocating future revenue projections to the existing technologies and applying decay rates and appropriate discount rates that reflect the respective intangible asset's relative risk profile when compared to other intangible assets as well as considering the risk associated with the overall business. At the Acquisition Date, Telaria had existing Customer Relationships. To the extent that future cash flows of the business would be negatively affected in the absence of these relationships, they would be deemed to have economic value. The Company used the Loss‐of‐Revenue and Income Method in its valuation of the existing Customer Relationships. This method attempts to quantify the scenario whereby the owner loses the right to the intangible asset and the resulting losses of revenue and income. Under this analysis, the value of the cash flows with the intangible asset is compared to the value of the cash flows without the intangible asset and the difference represents the value of the intangible asset. This methodology included applying a discount rate and the expected timing it would take to further enhance customer relationships. The fair value of the backlog was based on the Excess Earnings Model, taking into consideration the existing contracts as of the Acquisition Date and the respective cost to complete the servicing of the existing agreements. The resulting stream of after tax earnings were discounted to present value by applying an appropriate discount rate for the asset. The discount rate was selected based on the intangible asset’s relative risk profile when compared to the other intangible assets as well as the discount rate for the overall business. Intangible assets are generally amortized on a straight-line basis, which approximates the pattern in which the economic benefits are consumed, over their estimated useful lives. Amortization of developed technology is included in cost of revenues and the amortization of customer relationships, backlog, and trademarks is included in sales and marketing expenses in the consolidated statements of operations. Once the projects associated with acquired in-process research and development are completed, amortization will be included in cost of revenues in the consolidated statements of operations. The intangible assets generated in the Telaria Merger are not tax deductible. As such, as part of the Telaria Merger, deferred tax liabilities were established, which were fully offset by the estimated income tax effect of the partial release of Telaria's valuation allowance. The Company recognized approximately $17.6 million of acquisition related costs during the year ended December 31, 2020 (see Note 13). In addition, as part of the Telaria Merger, the Company acquired Telaria's U.S. federal NOLs of approximately $126.1 million and state NOLs of approximately $87.6 million. Pursuant to Section 382 of the Internal Revenue Code, Telaria, Inc. underwent an ownership change for tax purposes. As a result, the use of the NOLs will be subject to annual Section 382 use limitations. The Company believes the ownership change will not impact the Company's ability to utilize substantially all of the NOLs to the extent it generates taxable income that can be offset by such losses. Unaudited Pro Forma Information The following table provides unaudited pro forma information as if Telaria had been merged with the Company as of January 1, 2019. The unaudited pro forma information reflects adjustments for additional amortization resulting from the fair value adjustments to assets acquired and liabilities assumed, adjustments for alignment of accounting policies, and transaction expenses as if the Telaria Merger occurred on January 1, 2019. The pro forma results do not include any anticipated cost synergies or other effects of the integration merged companies. Accordingly, pro forma amounts are not necessarily indicative of the results that actually would have occurred had the acquisition been completed on the dates indicated, nor is it indicative of the future operating results of the combined company. Year Ended December 31, 2020 (in thousands) Pro Forma Revenue $ 236,666 Pro Forma Net Loss $ (64,030) During the year ended December 31, 2020, post-merger revenue on a stand-alone basis for Telaria was $60.1 million. During the year ended December 31, 2020, due to the process of integrating the operations of Telaria into the operations of the Company, the determination of Telaria's post-merger operating results on a standalone basis was impracticable. 2021 Acquisition—SpotX On April 30, 2021, the Company completed the SpotX Acquisition, pursuant to a Stock Purchase Agreement, dated as of February 4, 2021 (the "Purchase Agreement"), by and between the Company and RTL US Holdings, Inc. ("RTL"). The initial purchase price for the SpotX Acquisition was $560 million in cash ("Cash Consideration") and 14,000,000 shares of the Company's common stock. Per the terms of the Purchase Agreement, at the completion of the Company’s offering of its Convertible Senior Notes, RTL elected to increase the Cash Consideration by an amount equal to 20% of the gross proceeds of the Convertible Senior Notes (which amount was equal to $80 million) and to reduce the number of shares of common stock it would otherwise receive by a number of shares of common stock equal to 20% of the gross proceeds of the proposed offering of notes ($80 million) divided by the closing price of a share of our common stock on the trading day immediately prior to the date of pricing of the proposed offering of notes ($49.21). As a result of this election, the adjusted purchase price was $1.1 billion, prior to customary working capital adjustments and other adjustments, consisting of $640.0 million in cash plus 12,374,315 shares of common stock (based on the fair value of the Company's common stock on April 30, 2021). The Cash Consideration is subject to customary working capital and other adjustments. The working capital was approximately $65.2 million, including cash balances acquired and other working capital adjustments, resulting in a total purchase price of $1.2 billion. The Company financed the Cash Consideration through borrowings under the Term Loan B Facility and the Convertible Senior Notes (Note 17). In accordance with ASC 805, the Company recorded the acquisition based on the fair value of the consideration transferred and then allocated the purchase price to the identifiable assets acquired and liabilities assumed based on their respective fair values as of the acquisition date. The excess of the value of consideration transferred over the aggregate fair value of those net assets was recorded as goodwill. Any identified definite lived intangible assets will be amortized over their estimated useful lives and any identified intangible assets with indefinite useful lives and goodwill will not be amortized but will be tested for impairment at least annually. All intangible assets and goodwill will be tested for impairment when certain indicators are present. Determining the fair value of assets acquired and liabilities assumed requires management to use significant judgment and estimates including the selection of valuation methodologies, estimates of future revenues and cash flows, discount rates, and selection of comparable companies. For purposes of measuring the estimated fair value, where applicable, of the assets acquired and the liabilities assumed, the Company has applied the guidance in ASC 820, Fair Value Measurement, which establishes a framework for measuring fair value. In accordance with ASC 820, fair value is an exit price and is defined as "the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date." Under ASC 805, acquisition-related transaction costs and acquisition-related restructuring charges are not included as components of consideration transferred but are accounted for as expenses in the period in which the costs are incurred. The following table summarizes the total purchase consideration (in thousands): Cash Consideration $ 640,000 Stock Consideration (Fair Value of Shares of Magnite common stock) 495,591 Working capital adjustment 65,152 Total purchase consideration $ 1,200,743 The purchase consideration for the SpotX Acquisition included 12,374,315 shares of the Company's common stock with a fair value of approximately $495.6 million, based on the close price of the Company's common stock at closing on April 30, 2021, which was $40.05 per share, and working capital adjustment of $65.2 million, mainly consisting of cash balances acquired on the date of the SpotX Acquisition and other opening balance sheet adjustments. During the first quarter of 2022, the Company adjusted the preliminary purchase price allocation for SpotX based on updated fair values associated with the acquired assets and liabilities. Adjustments impacted acquisition related accounts payable and tax accruals. The Company finalized the purchase price allocation of SpotX in the second quarter of 2022, resulting in no additional changes to the purchase price allocation. The fair value of the purchase price was allocated to the identifiable assets acquired and liabilities assumed based upon their estimated fair values as of the date of the SpotX Acquisition as set forth below (in thousands): Cash $ 81,967 Restricted cash 199 Accounts receivable 199,649 Prepaid and other assets, current 12,308 Fixed assets 6,823 Intangible assets 429,600 Right-of-use lease asset 10,055 Goodwill 782,719 Total assets to be acquired 1,523,320 Accounts payable and accrued expenses 205,822 Other current liabilities 1,091 Lease liabilities 12,625 Deferred tax liability, net 103,039 Total liabilities to be assumed 322,577 Total purchase price $ 1,200,743 The Company believes the amount of goodwill resulting from the purchase price allocation is primarily attributable to expected synergies from the assembled workforce, an increase in development capabilities, increased offerings to customers, and enhanced opportunities for growth and innovation. Goodwill will not be amortized but instead will be tested for impairment at least annually or more frequently if certain indicators of impairment are present. In the event that goodwill has become impaired, the Company will record an expense for the amount impaired during the quarter in which the determination is made. The acquired intangibles and goodwill resulting from the SpotX Acquisition are not amortizable for tax purposes. The following table summarizes the components of the intangible assets and estimated useful lives as of the date of the SpotX Acquisition (dollars in thousands): Estimated Useful Life Technology $ 280,400 5 years Customer relationships 130,300 2 to 4 years Backlog 11,100 <1 year In-process research and development 5,800 3 years* Non-compete agreements 1,500 1 year Trademarks 500 <1 year Total intangible assets acquired $ 429,600 * In-process research and development consists of six projects with a weighted-average useful life of 3 years. Amortization begins once associated projects are completed and it is determined the projects have alternative future use. The fair value of the acquired technology and in-process research and development was valued using the Excess Earnings Method. This methodology included allocating future revenue projections to the existing technologies and applying decay rates and appropriate discount rates that reflect the respective intangible asset's relative risk profile when compared to other intangible assets as well as the discount rate for the overall business. The Company used the Loss‐of‐Revenue and Income Method in its valuation of the existing customer relationships and non-compete agreements. To the extent that future cash flows of the business would be negatively affected in the absence of these relationships and non-compete agreements, they would be deemed to have economic value. This method attempts to quantify the scenario whereby the owner loses the right to the intangible asset and the resulting losses of revenue and income. Under this analysis, the value of the cash flows with the intangible asset is compared to the value of the cash flows without the intangible asset and the difference represents the value of the intangible asset. This methodology included applying a discount rate and the expected timing it would take to further enhance customer relationships. The fair value of the backlog was based on the Excess Earnings Method, taking into consideration the existing contracts as of the date of the SpotX Acquisition and the respective cost to complete the servicing of the existing agreements. The resulting stream of after tax earnings were discounted to present value by applying an appropriate discount rate for the asset. The discount rate was selected based on the intangible asset’s relative risk profile when compared to the other intangible assets as well as the discount rate for the overall business. The fair value of the trademarks was based on the Income Approach, specifically the Relief‐from‐Royalty Method. Under this method, data is obtained regarding actual royalty payments made for similar intangible assets. After the appropriate royalty rate is determined, the reasonable royalty savings is then discounted to its present value over the remaining technological, economic, or legal life of the intangible asset. Intangible assets are generally amortized on a straight-line basis, which approximates the pattern in which the economic benefits are consumed, over their estimated useful lives. Amortization of developed technology is included in cost of revenues and the amortization of customer relationships, backlog, non-compete agreements, and trademarks is included in sales and marketing expenses in the consolidated statements of operations. Once the projects associated with acquired in-process research and development are completed, amortization will be included in cost of revenues in the consolidated statements of operations. The acquired intangible assets and goodwill resulting from the SpotX Acquisition are not tax deductible. As part of the SpotX Acquisition, deferred tax liabilities were established. As a result of the deferred tax liability balance created by the acquisition, the Company reduced its deferred tax asset ("DTA") valuation allowance by $56.2 million for the year ended December 31, 2021. Such reduction was recognized as an income tax benefit in the post-acquisition consolidated statements of operations for the year ended December 31, 2021. The Company recognized approximately $27.9 million of acquisition related costs included in the merger, acquisition, and restructuring costs in the Company's consolidated statements of operations during the year ended December 31, 2021 related to the SpotX Acquisition. 2021 Acquisition—SpringServe On July 1, 2021, the Company, through its wholly-owned subsidiary, SpotX, completed the SpringServe Acquisition. As a result of the SpringServe Acquisition, SpringServe became a wholly-owned subsidiary of SpotX, and a wholly-owned indirect subsidiary of the Company. The following table summarizes the total purchase consideration (in thousands): Cash Consideration $ 31,136 SpotX initial cash investment in SpringServe 2,075 Fair value appreciation of SpotX purchase right 7,450 Indemnification claims - holdback 1,409 Total purchase consideration $ 42,070 In 2020, SpotX made a minority investment of $2.1 million in SpringServe in conjunction with a strategic partnership agreement between the two companies, which included an option agreement to purchase SpringServe. At the time of Magnite's acquisition of SpotX, the fair value of SpotX's minority investment and purchase right were valued at a combined $7.5 million for a total minority investment and purchase right of $9.5 million. In connection with the SpringServe Acquisition, $1.4 million of the purchase price was held back to cover possible indemnification claims. In accordance with ASC 805, the Company recorded the acquisition based on the fair value of the consideration transferred and then allocated the purchase price to the identifiable assets acquired and liabilities assumed based on their respective fair values as of the acquisition date. The excess of the value of consideration transferred over the aggregate fair value of those net assets was recorded as goodwill. Any identified definite lived intangible assets will be amortized over their estimated useful lives and any identified intangible assets with indefinite useful lives and goodwill will not be amortized but will be tested for impairment at least annually. All intangible assets and goodwill will be tested for impairment when certain indicators are present. Determining the fair value of assets acquired and liabilities assumed requires management to use significant judgment and estimates including the selection of valuation methodologies, estimates of future revenues and cash flows, discount rates, and selection of comparable companies. For purposes of measuring the estimated fair value, where applicable, of the assets acquired and the liabilities assumed, the Company has applied the guidance in ASC 820, Fair Value Measurement, which establishes a framework for measuring fair value. In accordance with ASC 820, fair value is an exit price and is defined as "the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date." Under ASC 805, acquisition- related transaction costs and acquisition-related restructuring charges are not included as components of consideration transferred but are accounted for as expenses in the period in which the costs are incurred. The Company finalized the purchase price allocation of SpringServe in the third quarter of 2022, resulting in no additional changes to the purchase price allocation and the full payment of the $1.4 million holdback liability. The fair value of the purchase price was allocated to the identifiable assets acquired and liabilities assumed based upon their estimated fair values as of the date of the SpringServe Acquisition as set forth below (in thousands): Cash $ 1,062 Accounts receivable 3,234 Prepaid and other assets, current 157 Fixed assets 25 Intangible assets 23,400 Right-of-use lease asset 1,879 Goodwill 24,156 Total assets to be acquired 53,913 Accounts payable and accrued expenses 2,475 Other current liabilities 35 Lease liabilities 3,179 Deferred tax liability, net 6,154 Total liabilities to be assumed 11,843 Total preliminary purchase price $ 42,070 The Company believes the amount of goodwill resulting from the purchase price allocation is primarily attributable to expected synergies from the assembled workforce, an increase in development capabilities, increased offerings to customers, and enhanced opportunities for growth and innovation. Goodwill will not be amortized but instead will be tested for impairment at least annually or more frequently if certain indicators of impairment are present. In the event that goodwill has become impaired, the Company will record an expense for the amount impaired during the quarter in which the determination is made. The following table summarizes the components of the intangible assets and estimated useful lives as of the date of the SpringServe Acquisition (dollars in thousands): Estimated Useful Life Technology $ 15,500 5 years Customer relationships 5,700 2 years Trademarks and Trade Names 900 3 years In-process research and development 800 3 years* Non-compete agreements 500 2 years Total intangible assets acquired $ 23,400 * In-process research and development consists of two projects with a weighted-average useful life of 3 years. Amortization begins once associated projects are completed and it is determined the projects have alternative future use. The fair value of the acquired technology and in-process research and development was valued using the Excess Earnings Method. This methodology included allocating future revenue projections to the existing technologies and applying decay rates and appropriate discount rates that reflect the respective intangible asset's relative risk profile when compared to other intangible assets as well as considering the risk associated with the overall business. At the acquisition date, SpringServe had existing customer relationships. To the extent that future cash flows of the business would be negatively affected in the absence of these relationships, they would be deemed to have economic value. In addition, certain employees of SpringServe signed two year non-compete agreements. The Company used the Loss‐of‐Revenue and Income Method in its valuation of the existing customer relationships and non-compete agreements. This method attempts to quantify the scenario whereby the owner loses the right to the intangible asset and the resulting losses of revenue and income. Under this analysis, the value of the cash flows with the intangible asset is compared to the value of the cash flows without the intangible asset and the difference represents the value of the intangible asset. This methodology included applying a discount rate and the expected timing it would take to further enhance customer relationships. The fair value of the trademarks and trade names were based on the Income Approach, specifically the Relief‐from‐Royalty Method. Under this method, data is obtained regarding actual royalty payments made for similar intangible assets. After the appropriate royalty rate is determined, the reasonable royalty savings is then discounted to its present value over the remaining technological, economic, or legal life of the intangible asset. Intangible assets are generally amortized on a straight-line basis, which approximates the pattern in which the economic benefits are consumed, over their estimated useful lives. Amortization of developed technology is included in cost of revenues and the amortization of customer relationships, non-compete agreements, and trademarks is included in sales and marketing expenses in the consolidated statements of operations. Once the projects associated with acquired in-process research and development are completed, amortization will be included in cost of revenues in the consolidated statements of operations. The acquired intangibles and goodwill resulting from the SpringServe Acquisition are not tax deductible. As part of the SpringServe Acquisition, deferred tax liabilities were established. As a result of this and the SpotX deferred tax liability balance, the Company recognized an income tax benefit in the post-acquisition consolidated statements of operations for the year ended December 31, 2021. SpringServe Acquisition related costs included in merger, acquisition, and restructuring costs in the Company's consolidated statements of operations during the year ended December 31, 2021 were immaterial. 2021 Acquisition—Nth Party The Company completed the acquisition of Nth Party, Ltd. (“Nth Party”), a developer of cryptographic software for secure audience data sharing and analysis in December 2021 for a total purchase price of $9.0 million, in cash. The Company acquired Nth Party as part of its strategy to further invest in the development and enhancement of industry leading identity and audience solutions. The allocation of purchase consideration resulted in approximately $5.4 million of developed technology intangible assets with an estimated useful life of five years, approximately $0.2 million non-compete intangible assets with an estimated useful life of two years, approximately $1.3 million of deferred tax liability, and goodwill of approximately $4.8 million, which is attributable to the workforce of Nth Party and revenue growth from the acquisition. Acquired intangibles and goodwill resulting from the Nth Party acquisition are not deductible for income tax purposes. Unaudited Pro Forma Information The following table provides unaudited pro forma information as if the SpotX and SpringServe Acquisitions had been acquired by the Company as of January 1, 2020. The unaudited pro forma information reflects adjustments for additional amortization resulting from the fair value adjustments to assets acquired and liabilities assumed, adjustments for alignment of accounting policies, and transaction expenses as if the SpotX and SpringServe Acquisitions occurred on January 1, 2020. The pro forma results do not include any anticipated cost synergies or other effects of the combined companies. Accordingly, pro forma amounts are not necessarily indicative of the results that actually would have occurred had the SpotX and SpringServe Acquisitions been completed on the dates indicated, nor is it indicative of the future operating results of the combined company. The table below excludes Nth Party as its impact on pro forma results were immaterial. Year Ended December 31, 2021 December 31, 2020 (in thousands) Pro Forma Revenue $ 540,466 $ 400,039 Pro Forma Net Loss $ (86,621) $ (156,638) During the year ended December 31, 2021, due to the process of integrating the operations of SpotX into the operations of the Company, the determination of SpotX's post-acquisition revenue and operating results on a standalone basis was impracticable. The SpringServe post-acquisition revenue and operating results on a standalone basis were immaterial. 2022 Acquisition—Carbon The Company completed the acquisition of the business of Carbon (AI) Limited ("Carbon" and such acquisition the "Carbon Acquisition"), a platform that enables publishers to measure, manage, and monetize audience segments, in February 2022 for a total purchase price of $23.1 million in cash. Approximately $2.3 million of the purchase price was held back to cover possible indemnification claims, which is expected to be paid in cash one year after the acquisition. The Company acquired Carbon as part of its strategy to further invest in the development and enhancement of industry leading identity and audience solutions. The allocation of purchase consideration resulted in an estimated $14.2 million of developed technology intangible assets with an estimated useful life of five years, $0.2 million non-compete intangible assets with an estimated useful life of two years, $0.2 million of customer relationships with an estimated useful life of six months, and goodwill of $8.5 million, which is attributable to the workforce of Carbon and revenue growth from the acquisition. For tax purposes, the Carbon Acquisition was treated as an asset acquisition. The acquisition of identified intangibles results in tax deductible amortization pursuant to IRC Section 197. |
Accounts Payable and Accrued Ex
Accounts Payable and Accrued Expenses | 12 Months Ended |
Dec. 31, 2022 | |
Payables and Accruals [Abstract] | |
Accounts Payable and Accrued Expense | Accounts Payable and Accrued Expenses Accounts payable and accrued expenses included the following: December 31, 2022 December 31, 2021 (in thousands) Accounts payable—seller $ 1,057,556 $ 971,220 Accounts payable—trade 19,387 11,904 Accrued employee-related payables 15,065 16,230 Accrued holdback - indemnification claims 2,313 1,602 Total $ 1,094,321 $ 1,000,956 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss The components of accumulated other comprehensive loss, which relate to foreign currency translation, were as follows (in thousands): Accumulated Other Comprehensive Loss Balance at December 31, 2019 $ (45) Other comprehensive loss (912) Balance at December 31, 2020 (957) Other comprehensive loss (419) Balance at December 31, 2021 (1,376) Other comprehensive loss (1,775) Balance at December 31, 2022 $ (3,151) |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation In connection with its IPO, the Company implemented its 2014 Equity Incentive Plan, which governs equity awards made to employees and directors of the Company since the IPO. Prior to the IPO, the Company granted equity awards under its 2007 Stock Incentive Plan, which governs equity awards made to employees and contractors prior to the IPO. In November 2014, the Company approved the 2014 Inducement Grant Equity Incentive Plan (the "Inducement Plan"), which governs certain equity awards made to certain employees in connection with commencement of employment. In connection with the Company's acquisitions of Chango Inc. ("Chango"), iSocket, Inc. ("iSocket"), and nToggle, Inc. ("nToggle") it assumed the existing employee equity award plans, the 2009 Chango Stock Option Plan (the "Chango Plan"), the iSocket 2009 Equity Incentive Plan (the "iSocket Plan"), and the nToggle 2014 Equity Incentive Plan (the "nToggle Plan"). In connection with the Merger with Telaria, the Company assumed Telaria's 2013 Equity Incentive Plan, as amended (the "Telaria Plan"); the 2008 Stock Plan, as amended (the "2008 Stock Plan"); and the ScanScout, Inc. 2009 Equity Incentive Plan, as amended (the "ScanScout Plan"). All compensatory equity awards outstanding at December 31, 2022 were issued pursuant to the 2014 Equity Incentive Plan, the nToggle Plan, the Telaria Plan, the 2008 Stock Plan, the Inducement Plan, or the Company's 2007 Stock Incentive Plan. The Company’s equity incentive plans provide for the grant of equity awards, including non-statutory or incentive stock options, restricted stock awards ("RSAs"), restricted stock units that vest based on continuous service ("RSUs"), and restricted stock units that include performance criteria (“performance stock units” or "PSUs"), to the Company's employees, officers, directors, and consultants. The Company's board of directors administers the plans. Options vest based upon continued service at varying rates, but generally over four years from issuance with 25% vesting after one year of service and the remainder vesting monthly thereafter. RSAs and RSUs vest at varying rates, typically approximately 25% vesting after approximately one year of service and the remainder vesting annually, semi-annually, or quarterly thereafter. The restricted stock units granted in 2022, 2021, and 2020, included 0.7 million, 0.4 million, and 0.7 million, respectively, awards that vest 50% on each of the first and second anniversaries of the grant date. Options, RSAs, and RSUs granted under the plans accelerate under certain circumstances for certain participants upon a change in control, as defined in the governing plan. No further awards were granted under the iSocket Plan, the Chango Plan, or the nToggle Plan from the date of acquisition and no further awards were granted under the 2007 Stock Incentive Plan since the IPO. Available shares under the nToggle Plan and the Telaria Plan were rolled into the available share pool under the 2014 Equity Incentive Plan at the time of acquisition of each company, and available shares under the 2007 Stock Incentive Plan were rolled into the available share pool under the 2014 Equity Incentive Plan at the time of the IPO. An aggregate of 13,926,252 shares remained available for future grants at December 31, 2022 under the plans. The 2014 Equity Incentive Plan has an evergreen provision pursuant to which the share reserve will automatically increase on January 1 st of each year in an amount equal to 5% of the total number of shares of capital stock outstanding on December 31 st of the preceding calendar year, although the Company’s board of directors may provide for a lesser increase, or no increase, in any year. The 2014 Inducement Grant Equity Incentive Plan has a provision pursuant to which the share reserve may be increased at the discretion of the Company's board of directors. Stock Options A summary of stock option activity for the year ended December 31, 2022 is as follows: Shares Under Option Weighted- Average Exercise Price Weighted- Average Contractual Life Aggregate Intrinsic Value (in thousands) (in thousands) Outstanding at December 31, 2021 5,129 $ 7.25 Granted 699 $ 13.90 Exercised (613) $ 3.64 Expired (418) $ 5.84 Forfeited (125) $ 12.14 Outstanding at December 31, 2022 4,672 $ 8.71 5.6 years $ 19,676 Exercisable at December 31, 2022 3,593 $ 7.00 4.7 years $ 18,005 The total intrinsic value of options exercised during the year ended December 31, 2022 was $5.1 million. At December 31, 2022, the Company had unrecognized employee stock-based compensation expense relating to nonvested stock options of approximately $8.4 million, which is expected to be recognized over a weighted-average period of 2.4 years. Total fair value of options vested during the year ended December 31, 2022 was $5.4 million. The Company estimates the fair value of stock options that contain service and/or performance conditions using the Black-Scholes option pricing model. The grant date fair value of options granted during the year ended December 31, 2022 was $8.93 per share. The weighted-average input assumptions used by the Company were as follows: Year Ended December 31, 2022 December 31, 2021 December 31, 2020 Expected term (in years) 5.0 5.0 6.3 Risk-free interest rate 1.63 % 0.88 % 0.45 % Expected volatility 79 % 79 % 67 % Dividend yield — % — % — % Restricted Stock Units A summary of restricted stock unit activity for the year ended December 31, 2022 is as follows: Number of Shares Weighted-Average Grant Date Fair Value (in thousands) Restricted stock units outstanding at December 31, 2021 6,634 $ 18.39 Granted 8,322 $ 12.69 Canceled (1,680) $ 15.71 Vested and released (3,276) $ 15.43 Restricted stock units outstanding at December 31, 2022 10,000 * $ 15.06 Restricted stock units outstanding and unvested at December 31, 2022 9,982 $ 15.08 *At December 31, 2022, outstanding restricted stock units included 18,436 units that were vested but deferred. The weighted-average grant date fair value per share of restricted stock units granted during the year ended December 31, 2022 was $12.69. The intrinsic value of restricted stock units that vested during the year ended December 31, 2022 was $37.0 million. At December 31, 2022, the intrinsic value of unvested restricted stock units was $105.7 million. At December 31, 2022, the Company had unrecognized stock-based compensation expense relating to unvested restricted stock units of approximately $123.4 million, which is expected to be recognized over a weighted-average period of 2.7 years. Performance Stock Units In April 2020, April 2021, and February 2022, the Company granted the Company's CEO 146,341, 26,291, and 86,806 performance stock units that vest based on share price metrics tied to total shareholder return over a three-year period with a fair value of $0.9 million, $1.4 million, and $1.5 million, respectively. The grant date fair value per share of these grants was $6.15, $52.49, and $17.28, respectively, which was estimated using a Monte-Carlo lattice model. At December 31, 2022, the Company had unrecognized employee stock-based compensation expense for the April 2020, April 2021, and February 2022 grants of approximately $0.1 million, $0.6 million, and $1.0 million which is expected to be recognized over the remaining 0.3 years, 1.3 years, and 2.1 years, respectively. Between 0% and 150% of the performance stock units will vest on the third anniversary of its grant date. In August 2021, the Company granted the Company's CEO 379,635 performance stock units, which are subject to both time-based and performance-based vesting conditions. The performance stock units consist of three equal tranches (each, a "Performance Tranche"), based on achievement of a share price condition if the Company achieves share price targets of $60.00, $80.00, and $100.00, respectively over 60 consecutive trading days during a performance period commencing on August 26, 2022 and ending on August 26, 2026. To the extent any of the performance-based requirements are met, the Company's CEO must also provide continued service to the Company through at least August 26, 2024 to receive any shares of common stock underlying the grant and through August 26, 2026 to receive all of the shares of common stock underlying the performance units that have satisfied the applicable performance-based requirement. The fair value of each of the Performance Tranches was $3.0 million, $2.8 million, and $2.6 million, respectively, and have a grant date fair value per share of restricted stock of $23.94, $21.93, and $20.30, respectively, which was estimated using a Monte-Carlo lattice model. At December 31, 2022, the Company had unrecognized employee stock-based compensation expense of approximately $1.7 million, $1.8 million, and $1.9 million, which is expected to be recognized over the remaining 1.7 years, 2.7 years, and 3.7 years, respectively. Between 0% and 100% of the performance stock units will vest on each of the tranche dates. For the years ended December 31, 2022, 2021 and 2020, the Company recognized $3.4 million, $1.4 million, and $0.2 million, respectively, of stock-based compensation related to these performance stock units. Stock-based compensation expense for these awards is based on a performance measurement of 100%. The compensation expense will not be reversed if the performance metrics are not met. Employee Stock Purchase Plan In November 2013, the Company adopted the Company's 2014 Employee Stock Purchase Plan ("ESPP"). The ESPP is designed to enable eligible employees to periodically purchase shares of the Company's common stock at a discount through payroll deductions of up to 10% of their eligible compensation, subject to any plan limitations. At the end of each six-month offering period, employees are able to purchase shares at a price per share equal to 85% of the lower of the fair market value of the Company's common stock on the first trading day of the offering period or on the last trading day of the offering period. Offering periods generally commence and end in May and November of each year. As of December 31, 2022, the Company has reserved 3,829,518 shares of its common stock for issuance under the ESPP. The ESPP has an evergreen provision pursuant to which the share reserve will automatically increase on January 1 st of each year in an amount equal to 1% of the total number of shares of capital stock outstanding on December 31 st of the preceding calendar year, although the Company’s board of directors may provide for a lesser increase, or no increase, in any year. Stock-Based Compensation Expense Total stock-based compensation expense recorded in the consolidated statements of operations was as follows: Year Ended December 31, 2022 December 31, 2021 December 31, 2020 (in thousands) Cost of revenue $ 1,666 $ 792 $ 525 Sales and marketing 21,558 15,718 8,229 Technology and development 19,961 11,857 7,451 General and administrative 18,929 11,297 10,416 Merger, acquisition, and restructuring costs 2,004 1,071 1,870 Total stock-based compensation expense $ 64,118 $ 40,735 $ 28,491 For the year ended December 31, 2022, the Company recognized $6.4 million of tax expense on stock-based compensation expense related to 2022, which was reflected in the provision (benefit) for income taxes in the consolidated statements of operations. For the year ended December 31, 2022, tax benefit realized related to awards vested or exercised during 2022 was $9.6 million. For the year ended December 31, 2021, the Company recognized $151.6 million of tax benefit on stock-based compensation expense related to 2021 and years prior, which was reflected in the provision (benefit) for income taxes in the consolidated statements of operations. For the year ended December 31, 2021, tax benefit realized related to awards vested or exercised during 2021 and years prior was $40.5 million. Due to the full valuation allowance provided on its net deferred tax assets, the Company had not recorded any tax benefit attributable to stock-based awards for the year ended December 31, 2020. |
Merger, Acquisition, and Restru
Merger, Acquisition, and Restructuring Costs | 12 Months Ended |
Dec. 31, 2022 | |
Restructuring and Related Activities [Abstract] | |
Merger, Acquisition, and Restructuring Costs | Merger, Acquisition, and Restructuring Costs Merger, acquisition, and restructuring costs consist primarily of professional services fees and employee termination costs, including stock-based compensation charges, associated with the Telaria Merger, the SpotX Acquisition, the SpringServe Acquisition, and restructuring activities. The following table summarizes merger, acquisition, and restructuring cost activity: Year Ended December 31, 2022 December 31, 2021 December 31, 2020 (in thousands) Professional Service (investment banking advisory, legal and other professional services) $ 917 $ 28,422 $ 9,935 Personnel related (severance and one-time termination benefit costs) 1,227 6,184 5,747 Non-cash stock-based compensation (double-trigger acceleration and severance) 2,004 1,071 1,870 Impairment costs of abandoned technology 3,320 — — Loss contracts (lease related) — 2,500 — Total merger, acquisition, and restructuring costs $ 7,468 $ 38,177 $ 17,552 Accrued restructuring costs related to mergers and acquisitions were $1.2 million and $2.7 million at December 31, 2022 and December 31, 2021, respectively and were primarily related to the SpotX Acquisition, the SpringServe Acquisition, and the Telaria Merger. Accrued restructuring costs associated with personnel costs are included in accounts payable and accrued expenses and accruals related to assumed loss contracts are included in other current liabilities and other liabilities, non-current on the Company's consolidated balance sheets. Year Ended December 31, 2022 December 31, 2021 December 31, 2020 (in thousands) Accrued merger. acquisition, and restructuring costs at beginning of period $ 2,742 $ 2,935 $ — Restructuring costs (personnel related and non-cash stock-based compensation) 3,231 7,255 7,617 Restructuring activity, merger and acquisition loss contracts — 2,500 3,543 Restructuring activity, impairments 3,320 — — Cash paid for restructuring costs (2,747) (6,377) (6,355) Non-cash loss contracts (lease related) — (2,500) — Non-cash impairments (3,320) — — Non-cash stock-based compensation (2,004) (1,071) (1,870) Accrued merger, acquisition, and restructuring costs at end of period $ 1,222 $ 2,742 $ 2,935 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The following are the domestic and foreign components of the Company’s income (loss) before income taxes for the years ended December 31, 2022, 2021, and 2020: Year Ended December 31, 2022 December 31, 2021 December 31, 2020 (in thousands) Domestic $ (145,480) $ (105,168) $ (57,253) International 9,883 10,180 4,514 Loss before income taxes $ (135,597) $ (94,988) $ (52,739) The following are the components of the provision (benefit) for income taxes for the years ended December 31, 2022, 2021, and 2020: Year Ended December 31, 2022 December 31, 2021 December 31, 2020 (in thousands) Current: Federal $ (186) $ 128 $ (144) State 1,056 1,515 15 Foreign 2,735 2,275 1,117 Total current provision 3,605 3,918 988 Deferred: Federal (2,039) (89,404) 9 State (6,324) (8,296) (12) Foreign (516) (1,271) (292) Total deferred benefit (8,879) (98,971) (295) Total provision (benefit) for income taxes $ (5,274) $ (95,053) $ 693 The Company recorded an income tax benefit of $5.3 million for the year ended December 31, 2022 compared to an income tax benefit of $95.1 million and income tax expense of $0.7 million for the years ended December 31, 2021 and 2020, respectively. The tax benefit for the year ended December 31, 2022 was primarily the result of the domestic valuation allowance on the Company's deferred tax asset and the tax liability associated with foreign subsidiaries. The tax benefit for the year ended December 31, 2021 was primarily the result of the deferred tax liability associated with acquisitions that occurred during the year and the tax liability associated with foreign subsidiaries. The tax expense for the year ended December 31, 2020 was primarily the result of the domestic valuation allowance and the tax liability associated with the foreign subsidiaries. Set forth below is a reconciliation of the components that caused the Company’s provision (benefit) for income taxes to differ from amounts computed by applying the U.S. Federal statutory rate of 21% for the years ended December 31, 2022, 2021, and 2020: Year Ended December 31, 2022 December 31, 2021 December 31, 2020 U.S. federal statutory income tax rate 21.0 % 21.0 % 21.0 % State income taxes, net of federal benefit 3.1 % 5.6 % (0.2) % Foreign loss at other than U.S. rates (0.1) % (0.5) % (0.5) % Stock-based compensation expense (2.4) % 31.7 % 11.4 % Meals and entertainment (0.1) % (0.1) % (0.1) % Other permanent items (0.7) % (1.6) % (1.1) % Change in valuation allowance (15.5) % 58.0 % (19.5) % Sec 162(m) officers compensation (4.1) % (14.2) % (12.7) % Provision to return adjustments 0.3 % 0.2 % 0.4 % Research and development tax credits 2.5 % — % — % Foreign withholding taxes (0.1) % — % — % Effective income tax rate 3.9 % 100.1 % (1.3) % Set forth below are the tax effects of temporary differences that give rise to a significant portion of the deferred tax assets and deferred tax liabilities as of December 31, 2022 and 2021: December 31, 2022 December 31, 2021 (in thousands) Deferred Tax Assets: Accrued liabilities $ 1,308 $ 1,208 Lease liabilities 15,679 18,499 Stock-based compensation 4,830 5,573 Net operating loss carryovers 111,587 131,509 Tax credit carryovers 9,131 5,308 Other 2,460 1,555 Total deferred tax assets 144,995 163,652 Less valuation allowance (76,772) (56,049) Deferred tax assets, net of valuation allowance 68,223 107,603 Deferred Tax Liabilities: Fixed assets (2,132) (2,059) Intangible assets (56,022) (101,477) Right of use lease asset (12,763) (15,563) Total deferred tax liabilities (70,917) (119,099) Net deferred tax assets (liability) $ (2,694) $ (11,496) As of December 31, 2022, the net deferred tax liability of $2.7 million is presented in the Company's consolidated balance sheets as deferred tax liabilities, net of $5.1 million and other assets, non-current of $2.4 million. As of December 31, 2021, the net deferred tax liability of $11.5 million is presented in the Company's consolidated balance sheets as deferred tax liabilities, net of $13.3 million and other assets, non-current of $1.8 million. The valuation allowance was increased by $20.7 million for the year ended December 31, 2022, and reduced by $53.9 million, and increased by $16.4 million for the years ended December 31, 2021 and 2020, respectively. At December 31, 2022, the Company had U.S. federal net operating loss carryforwards, or NOLs, of approximately $403.7 million, which will begin to expire in 2027. At December 31, 2022, the Company had state NOLs of approximately $256.6 million, which will begin to expire in 2023. At December 31, 2022, the Company had foreign NOLs of approximately $27.7 million, which will begin to expire in 2026. At December 31, 2022, the Company had acquired federal research and development tax credit carryforwards of approximately $3.7 million, and state research and development tax credits of approximately $9.9 million, both of which carry forward indefinitely. No amounts for any federal or state research and development tax credits for the years ended December 31, 2020, 2021, or 2022 related to business operations are included herein. On August 16, 2022, President Biden signed the Inflation Reduction Act of 2022 (the “IRA”) into law. The IRA includes a new corporate alternative minimum tax (the “Corporate AMT”) of 15% on the adjusted financial statement income (the “AFSI”) of corporations with average AFSI exceeding $1.0 billion over a three-year period. The Corporate AMT is effective for tax years beginning after December 31, 2022 and is not expected to impact the Company. Additionally, the IRA imposes an excise tax of 1% on the fair market value of net stock repurchases made after December 31, 2022. The impact of this latter provision to the Company will be dependent upon the extent of share repurchases made in future periods. In addition, various foreign jurisdictions where the Company has activity have enacted or are considering enacting a variety of measures that could impact our tax liabilities. The Company is monitoring new legislation and evaluating the potential tax implications of these measures globally. Pursuant to Section 382 of the Internal Revenue Code, the Company and Telaria, Inc. both underwent ownership changes for tax purposes (i.e. a more than 50% change in stock ownership in aggregated 5% shareholders) on April 1, 2020 due to the Telaria Merger. As a result, the use of the Company’s total domestic NOL carryforwards and tax credits generated prior to the ownership change will be subject to annual use limitations under Section 382 and Section 383 of the Code and comparable state income tax laws. The Company believes that the ownership change will not impact its ability to utilize substantially all of its NOLs and state research and development carryforward tax credits to the extent it will generate taxable income that can be offset by such losses. The Company reasonably expects its federal research and development carryforward tax credits will not be recovered prior to expiration. Additionally, for tax years beginning after December 31, 2017, the Tax Cuts and Jobs Act limits the NOL deduction to 80% of taxable income, repeals carryback of all NOLs arising in a tax year ending after 2017, and permits indefinite carryforward for all such NOLs. NOL’s arising in a tax year ending in or before 2017 can offset 100% of taxable income, are available for carryback, and expire 20 years after they arise. At December 31, 2022, unremitted earnings of the subsidiaries outside of the United States were approximately $38.9 million, on which the Company recorded a provisional transition tax of $6.1 million. The Company’s intention is to indefinitely reinvest these earnings outside the United States. Upon distribution of those earnings in the form of a dividend or otherwise, the Company would be subject to withholding taxes payable to various foreign countries and, potentially, various state taxes. The amounts of such tax liabilities that might be payable upon actual repatriation of foreign earnings, after consideration of corresponding foreign tax credits, are not material. The following table summarizes the activity related to the unrecognized tax benefits (in thousands): Amount Balance as of December 31, 2020 $ 3,214 Increases related to current year tax positions 200 Decreases related to prior year tax positions (41) Increases related to prior year tax positions 342 Balance as of December 31, 2021 3,715 Increases related to current year tax positions 398 Decreases related to prior year tax positions (634) Increases related to prior year tax positions 772 Balance as of December 31, 2022 $ 4,251 Interest and penalties related to the Company’s unrecognized tax benefits accrued at December 31, 2022, 2021, and 2020 were not material. Due to the net operating loss carryforwards, the Company's United States federal and a majority of its state returns are open to examination by the Internal Revenue Service and state jurisdictions for all years since inception. The 2017 U.S. Income Tax Return for Telaria was under examination by the IRS, which was closed during the period ended June 30, 2021 with no change to tax as reported. The IRS is currently conducting a Form 1042 Withholding Tax Audit for Telaria for 2017. The Company settled the audit during the quarter ended December 31, 2022. Tax due was not material. For the Netherlands, Malaysia, India, Sweden, and the United Kingdom, all tax years remain open for examination by the local country tax authorities, for France only 2020 and forward are open, for Singapore only 2019 and forward are open for examination, for New Zealand, Australia, Brazil, and Germany 2018 and forward are open for examination, for Canada 2017 and forward are open for examination, and for Japan and Italy 2016 and forward remain open for examination. The Company does not expect its uncertain income tax positions to have a material impact on its consolidated financial statements within the next twelve months. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Leases | Leases The Company has operating and finance leases for office facilities, data centers, and equipment. The lease terms of the Company’s leases generally range from 1.0 year to 10.0 years. The weighted average remaining lease term of leases included in lease liabilities is 5.6 years and 6.3 years as of December 31, 2022 and December 31, 2021, respectively. As of December 31, 2022 and December 31, 2021, a weighted average discount rate of 6.11% and 5.09%, respectively, were applied to the remaining lease payments to calculate the lease liabilities included within the consolidated balance sheets. For the years ended December 31, 2022, 2021 and 2020, the Company recognized $23.3 million, $20.7 million and $13.4 million of lease expense, respectively, which included operating lease expenses associated with leases included in the lease liability and ROU asset on the consolidated balance sheets. In addition, for the years ended December 31, 2022, 2021 and 2020, the Company recognized expenses of $57.9 million, $35.1 million and $20.4 million, respectively, for cloud-based services and other lease costs related to data centers and $1.2 million, $1.2 million and $1.0 million, respectively, of lease expense related to short-term leases that are not included in the ROU asset or lease liability balances. The maturity of the Company's lease liabilities associated with leases included in the lease liability and ROU asset were as follows as of December 31, 2022 (in thousands): Fiscal Year 2023 $ 25,711 2024 22,224 2025 14,466 2026 12,007 2027 7,425 Thereafter 21,011 Total lease payments (undiscounted) 102,844 Less: imputed interest (15,341) Lease liabilities—total (discounted) $ 87,503 The Company also received rental income of $5.2 million, $4.4 million, and $3.7 million for real estate leases for which it subleases the property to a third party during the years ended December 31, 2022, 2021, and 2020, respectively. Rental income is included in other income in the consolidated statements of operations. In addition to the lease liabilities included in these consolidated financial statements at December 31, 2022, during 2022, the Company entered into agreements for office space that have not commenced as of December 31, 2022, and is therefore, not included in the lease liability on the balance sheet. The Company has future commitments totaling $2.2 million with a weighted average term of 10.1 years. As part of the April 30, 2021 acquisition of SpotX, the Company acquired finance leases related primarily to computer equipment and network hardware. These finance leases are included in lease liabilities - current portion lease liabilities, non-current |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Commitments The Company has commitments under non-cancelable operating leases for facilities, certain equipment, and its managed data center facilities (Note 15). As of December 31, 2022 and 2021, the Company had $5.3 million and $5.1 million, respectively, of letters of credit associated with office leases available for borrowing, on which there were no outstanding borrowings as of either date. In the normal course of business, the Company enters into non-cancelable contractual obligations with various parties, primarily related to software services agreements and data center providers that are not included in the Company's lease liability obligations and ROU assets. As of December 31, 2022, the Company's outstanding non-cancelable contractual obligations with a remaining term of one year or longer consist of the following (in thousands): Fiscal Year 2023 $ 7,140 2024 6,859 2025 2,070 Total $ 16,069 Additionally, as of December 31, 2022, the Company has an agreement for third-party cloud-managed services containing commitments that are variable in nature. Under this agreement, the Company has a non-cancelable minimum spend commitment from July 2023 to June 2025 based on actual spend, as defined in the agreement, with the third-party provider from July 2022 to June 2023. The estimated non-cancelable minimum annual obligation is approximately $27 million in each twelve-month period (i.e., July 2023 to June 2024 and July 2024 to June 2025), based on spend in the six months ended December 31, 2022. Per the agreement, the commitment from July 2023 to June 2025 will generally increase as the amount of spend during the period from July 2022 to June 2023 increases. Because the Company expects to continue to spend under this agreement through June 2023, the Company also expects that the minimum future commitment will likely increase as a result of the higher level of spend. Guarantees and Indemnification The Company’s agreements with sellers, buyers, and other third parties typically obligate the Company to provide indemnity and defense for losses resulting from claims of intellectual property infringement, damages to property or persons, business losses, or other liabilities. Generally, these indemnity and defense obligations relate to the Company’s own business operations, obligations, and acts or omissions. However, under some circumstances, the Company agrees to indemnify and defend contract counterparties against losses resulting from their own business operations, obligations, and acts or omissions, or the business operations, obligations, and acts or omissions of third parties. For example, because the Company’s business interposes the Company between buyers and sellers in various ways, buyers often require the Company to indemnify them against acts and omissions of sellers, and sellers often require the Company to indemnify them against acts and omissions of buyers. In addition, the Company’s agreements with sellers, buyers, and other third parties typically include provisions limiting the Company’s liability to the counterparty, and the counterparty’s liability to the Company. These limits sometimes do not apply to certain liabilities, including indemnity obligations. These indemnity and limitation of liability provisions generally survive termination or expiration of the agreements in which they appear. The Company has also entered into indemnification agreements with its directors, executive officers and certain other officers that will require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors, officers, or employees. No material demands have been made upon the Company to provide indemnification under such agreements and there are no claims that the Company is aware of that could have a material effect on the Company’s consolidated financial statements. Litigation The Company and its subsidiaries may from time to time be parties to legal or regulatory proceedings, lawsuits and other claims incident to their business activities and to the Company’s status as a public company. Such matters may include, among other things, assertions of contract breach or intellectual property infringement, claims for indemnity arising in the course of the Company’s business, regulatory investigations or enforcement proceedings, and claims by persons whose employment has been terminated. Such matters are subject to many uncertainties, and outcomes are not predictable with assurance. Consequently, management is unable to ascertain the ultimate aggregate amount of monetary liability, amounts which may be covered by insurance or recoverable from third parties, or the financial impact with respect to such matters as of December 31, 2022. However, based on management’s knowledge as of December 31, 2022, management believes that the final resolution of these matters known at such date, individually and in the aggregate, will not have a material adverse effect upon the Company’s consolidated financial position, results of operations or cash flows. Employment Contracts |
Debt
Debt | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Debt Disclosure | Debt Long term debt as of December 31, 2022 and 2021 consisted of the following: December 31, 2022 December 31, 2021 (in thousands) Convertible Senior Notes $ 400,000 $ 400,000 Less: Unamortized debt issuance cost (7,355) (9,643) Net 392,645 390,357 Term Loan B Facility 354,600 358,200 Less: Unamortized discount and debt issuance cost (20,888) (24,934) Net 333,712 333,266 Less: Current portion (3,600) (3,600) Total non-current debt $ 722,757 $ 720,023 Maturities of the principal amount of the Company's long-term debt as of December 31, 2022 are as follows (in thousands): Fiscal Year 2023 $ 3,600 2024 3,600 2025 3,600 2026 403,600 2027 3,600 Thereafter 336,600 Total (discounted) $ 754,600 Amortization of the debt issuance cost and the discount associated with our indebtedness totaled $6.3 million and $4.5 million for the years ended December 31, 2022 and 2021, respectively. Amortization of debt issuance costs is computed using the effective interest method and is included in interest expense. In addition, amortization of deferred financing costs was $0.5 million and $0.4 million for the years ended December 31, 2022 and 2021, respectively. Deferred financing costs are included in prepaid expenses and other current assets and other assets, non-current assets. Amortization of debt issuance cost and discount as well as amortization of deferred financing costs were immaterial for the year ended December 31, 2020. Bank Loan On September 25, 2020, the Company amended and restated its loan and security agreement with Silicon Valley Bank ("SVB") (the "Loan Agreement"), which was scheduled to expire on September 26, 2020. The Loan Agreement provides a senior secured revolving credit facility of up to the lesser of $60.0 million and 85% of eligible accounts receivable, with a maturity date of September 25, 2022. The Loan Agreement includes a letter of credit, foreign exchange and cash management facility with a sublimit up to $10.0 million. On April 30, 2021, the Company entered into the Credit Agreement. In connection with entering into the Credit Agreement, the Loan Agreement with SVB was terminated on April 30, 2021. As of the termination date, there were no amounts outstanding under the Loan Agreement. In March 2021, the Company issued $400.0 million aggregate principal amount of 0.25% convertible senior notes in a private placement, including $50.0 million aggregate principal amount of such notes pursuant to the exercise in full of the over-allotment options of the initial purchasers (collectively, the "Convertible Senior Notes"). The Convertible Senior Notes will mature on March 15, 2026, unless earlier repurchased, redeemed or converted. The total net proceeds from the offering, after deducting debt issuance costs paid by the Company, were approximately $388.6 million. The Company used approximately $39.0 million of the net proceeds from the offering to pay for the Capped Call Transactions (as described below). The Convertible Senior Notes are senior, unsecured obligations and are (i) equal in right of payment with the existing and future senior, unsecured indebtedness; (ii) senior in right of payment to any of the Company’s future indebtedness that is expressly subordinated to the Convertible Senior Notes; (iii) effectively subordinated to the Company’s existing and future secured indebtedness, to the extent of the value of the collateral securing that indebtedness, including amounts outstanding under our Loan Agreement or our new Credit Agreement (see section below); and (iv) structurally subordinated to all existing and future indebtedness and other liabilities, including trade payables, and (to the extent we are not a holder thereof) preferred equity, if any, of the Company’s subsidiaries that do not guarantee the Convertible Senior Notes. The Convertible Senior Notes accrue interest at 0.25% per annum payable semi-annually in arrears on March 15 and September 15 of each year, beginning on September 15, 2021. The Convertible Senior Notes will mature on March 15, 2026 unless they are redeemed, repurchased or converted prior to such date. The Convertible Senior Notes are convertible at the option of holders only during certain periods and upon satisfaction of certain conditions. Holders have the right to convert their notes (or any portion of a note in an authorized denomination), in the following circumstances: (i) during any calendar quarter commencing after the calendar quarter ending on June 30, 2021, if the last reported sale price per share of the Company’s common stock exceeds 130% of the conversion price for each of at least 20 trading days during the 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter; (ii) during the five consecutive business days immediately after any ten consecutive trading day period (such ten consecutive trading day period, the "measurement period") in which the trading price per $1,000 principal amount of notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price per share of the Company’s common stock on such trading day and the conversion rate on such trading day; (iii) upon the occurrence of certain corporate events or distributions on the Company’s common stock; (iv) if the Company calls such Convertible Senior Notes for redemption; and (v) on or after September 15, 2025, until the close of business on the second scheduled trading day immediately before the maturity date, holders of the Convertible Senior Notes may, at their option, convert all or a portion of their Convertible Senior Notes regardless of the foregoing conditions at any time from, and including, September 15, 2025 until the close of business on the second scheduled trading day immediately before the maturity date. Upon conversion, the Convertible Senior Notes may be settled in shares of the Company’s common stock, cash or a combination of cash and shares of the Company’s common stock, at the Company’s election. All conversions with a conversion date that occurs on or after September 15, 2025 will be settled using the same settlement method, and the Company will send notice of such settlement method to noteholders no later than the open of business on September 15, 2025. The Company may not redeem the Convertible Senior Notes at their option at any time before March 20, 2024. Subject to the terms of the indenture agreement, the Company has the right, at its election, to redeem all, or any portion (subject to the partial redemption limitation) in an authorized denomination, of the Convertible Senior Notes, at any time, and from time to time, on a redemption date on or after March 20, 2024 and on or before the 40th scheduled trading day immediately before the maturity date, for cash, but only if the "last reported sale price," as defined under the Offering Memorandum, per share of common stock exceeds 130% of the “conversion price” on (i) each of at least 20 trading days, during the 30 consecutive trading days ending on, and including, the trading day immediately before the date the Company sends the related redemption notice; and (ii) the trading day immediately before the date we send such notice. In addition, calling any note for redemption will constitute a "make-whole fundamental change" (as defined below) with respect to that note, in which case the conversion rate applicable to the conversion of that note will be increased in certain circumstances if it is converted after it is called for redemption. If the Company elects to redeem less than all of the outstanding notes, then the redemption will not constitute a make-whole fundamental change with respect to the notes not called for redemption, and holders of the notes not called for redemption will not be entitled to an increased conversion rate for such notes as described above on account of the redemption, except to the limited extent described further below. No sinking fund is provided for the Convertible Senior Notes, which means that the Company is not required to redeem or retire the Convertible Senior Notes periodically. If a fundamental change occurs, then each noteholder will have the right to require the Company to repurchase its notes (or any portion thereof in an authorized denomination) for cash on a date (the "fundamental change repurchase date") of the Company’s choosing, which must be a business day that is no more than 45, nor less than 20, business days after the date the Company distributes the related fundamental change notice. If an event of default, other than a reporting default remedied by special interest as defined in the indenture agreement, occurs with respect to the Company or any guarantor, then the principal amount of, and all accrued and unpaid interest on, all of the notes then outstanding will immediately become due and payable without any further action or notice by any person. If an event of default (other than a reporting event of default described above with respect to the Company or any guarantor and not solely with respect to a significant subsidiary of the Company’s or a guarantor, other than the Company or such guarantor) occurs and is continuing, then, the trustee, by notice to the Company, or noteholders of at least 25% of the aggregate principal amount of notes then outstanding, by written notice to the Company and the trustee, may declare the principal amount of, and all accrued and unpaid interest on, all of the notes then outstanding to become due and payable immediately. The Convertible Senior Notes have an initial conversion rate of 15.6539 shares of common stock per $1,000 principal amount of the Convertible Senior Notes, which will be subject to customary anti-dilution adjustments in certain circumstances. In connection with the pricing of the Convertible Senior Notes, the Company entered into privately negotiated capped call transactions with various financial institutions (the "Capped Call Transactions"). The Capped Call Transactions were entered into with third party broker-dealers to limit the potential dilution that would occur if the Company has to settle the conversion value in excess of the principal in shares. This exposure will be covered (i.e., the Company will receive as many shares as are required to be issued between the conversion price of $63.8818 and the maximum price of $91.2600). Any shares required to be issued by the Company over this amount would have net earnings per share dilution impact. By entering into the Capped Call Transactions, the Company expects to reduce the potential dilution to its common stock (or, in the event the conversion is settled in cash, to reduce its cash payment obligation) in the event that at the time of conversion its stock price exceeds the conversion price under the Convertible Senior Notes. The Company paid $39.0 million for the Capped Call Transactions, which was recorded as additional paid-in capital, using a portion of the gross proceeds from the sale of the Convertible Senior Notes. The cost of the Capped Call Transactions is not expected to be tax deductible as the Company did not elect to integrate the capped call into the Convertible Senior Notes for tax purposes. The cost of the Capped Call Transaction was recorded as a reduction of the Company’s additional paid-in capital in the accompanying consolidated financial statements. The Company incurred debt issuance costs of $11.4 million in March 2021. The Convertible Senior Notes are presented net of issuance costs on the Company's consolidated balance sheets. The debt issuance costs are amortized on an effective interest basis over the term of the Convertible Senior Notes and are included in interest expense and amortization of debt discount in the accompanying consolidated statements of operations. The following table sets forth interest expense related to the Convertible Senior Notes for the years ended December 31, 2022 and 2021: December 31, 2022 December 31, 2021 (in thousands, except interest rates) Contractual interest expense $ 1,000 $ 786 Amortization of debt issuance costs 2,288 1,798 Total interest expense $ 3,288 $ 2,584 Effective interest rate 0.82 % 0.82 % Amortization expense for the Company's debt issuance costs related to the Convertible Senior notes for fiscal years 2023 through 2026 is as follows (in thousands): Fiscal Year Debt Issuance Costs 2023 $ 2,288 2024 2,288 2025 2,288 2026 491 Total $ 7,355 Credit Agreement On April 30, 2021, the Company entered into a credit agreement (the "Credit Agreement") with Goldman Sachs Bank USA as administrative agent and collateral agent, and other lender parties thereto. The Credit Agreement provides for a $360.0 million seven-year senior secured term loan facility ("Term Loan B Facility") and a $52.5 million senior secured revolving credit facility (the "Revolving Credit Facility"). As part of the Term Loan B Facility, the Company received $325 million in proceeds, net of discounts and fees, which were used to finance the SpotX Acquisition and related transactions, and for general corporate purposes. Loans, if any, under the Revolving Credit Facility are expected to be used for general corporate purposes. The obligations under the Credit Agreement are secured by substantially all of the assets of the Company and those of its subsidiaries that are guarantors under the Credit Agreement. Amounts outstanding under the Credit Agreement accrue interest at a rate equal to either, (1) for the Term Loan B Facility, at the Company’s election, the Eurodollar Rate (as defined in the Credit Agreement) plus a margin of 5.00% per annum, or ABR (as defined in the Credit Agreement) plus a margin of 4.00%, and (2) for the Revolving Credit Facility, at the Company’s election, the Eurodollar Rate plus a margin of 4.25% to 4.75%, or ABR plus a margin of 3.25% to 3.75%, in each case, depending on the Company’s first lien net leverage ratio. As of December 31, 2022, the contractual interest rate related to the Term Loan B Facility was 9.33%. The covenants of the Credit Agreement include customary negative covenants that, among other things, restrict the Company’s ability to incur additional indebtedness, grant liens and make certain acquisitions, investments, asset dispositions and restricted payments. In addition, the Credit Agreement contains a financial covenant, tested on the last day of any fiscal quarter if utilization of the Revolving Credit Facility exceeds 35% of the total revolving commitments, that requires the Company to maintain a first lien net leverage ratio not greater than 3.25 to 1.00. As of December 31, 2022, the Company was in compliance with its debt covenants. The Credit Agreement includes customary events of default, and customary rights and remedies upon the occurrence of any event of default thereunder, including rights to accelerate the loans, terminate the commitments thereunder and realize upon the collateral securing the obligations under the Credit Agreement. The Credit Agreement calls for customary scheduled loan amortization payments of 0.25% of the initial principal balance payable quarterly (i.e. 1% in aggregate per year) as well as a provision that requires the Company to prepay the Term Loan B based on an annual calculation of cumulative free cash flow ("Excess Cash Flow") generated by the company as defined within the terms of the Agreement. The Company was not required to make any such mandatory prepayment required by the Excess Cash Flow provision for the period ended December 31, 2022. In addition, the Credit Agreement will mature in the event that any portion of the Convertible Senior Notes remains outstanding 91 days prior to the maturity date of the Convertible Senior Notes. On June 28, 2021, the Company entered into an Incremental Assumption Agreement (the "Incremental Agreement") to the Credit Agreement. Pursuant to the terms of the Incremental Agreement, the Company’s existing revolving credit facility under the Credit Agreement was increased by $12.5 million (the "Incremental Revolver"), and the letter of credit sublimit under the Credit Agreement was increased by $5.0 million. The Incremental Revolver bears the same interest rate as the existing revolving credit facility and has the same maturity date as the existing revolving credit facility. No other terms of the Credit Agreement were amended. As a result, amounts available under the Revolving Credit Facility were $65.0 million. At December 31, 2022, amounts available under the Revolving Credit Facility were $59.7 million, net of letters of credit outstanding in the amount of $5.3 million. The following table summarizes the amount outstanding under the Term Loan B Facility as of December 31, 2022 and 2021: December 31, 2022 December 31, 2021 (in thousands) Term Loan B Facility $ 354,600 $ 358,200 Unamortized debt discounts (8,158) (9,738) Unamortized debt issuance costs (12,730) (15,196) Debt, net of debt discounts and issuance costs $ 333,712 $ 333,266 The Company incurred debt issuance costs of $27.7 million in April 2021, of which $10.8 million were associated with debt discount netted against the proceeds and $16.9 million were associated with other deferred financing costs associated with the Term Loan B Facility. Debt outstanding under the Term Loan B Facility are presented net of issuance costs on the Company's consolidated balance sheets. The debt issuance costs are amortized on an effective interest basis over the term of the Term Loan B Facility and are included in interest expense and amortization of debt discount in the accompanying consolidated statements of operations. The following table sets forth interest expense related to the Term Loan B Facility for the years ended December 31, 2022 and 2021: December 31, 2022 December 31, 2021 (in thousands. except interest rates) Contractual interest expense 24,322 14,074 Amortization of debt discount 1,580 1,062 Amortization of debt issuance costs 2,466 1,657 Total interest expense 28,368 16,793 Effective interest rate 7.95 % 7.00 % Amortization expense for the Term Loan B Facility debt discount and debt issuance costs for fiscal years 2023 through 2028 is as follows (in thousands): Fiscal Year Debt Discount Debt Issuance Costs 2023 $ 1,564 $ 2,441 2024 1,548 2,416 2025 1,532 2,391 2026 1,516 2,366 2027 1,500 2,341 Thereafter 498 775 Total $ 8,158 $ 12,730 |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders' Equity In December 2021, the Board of Directors approved a repurchase program (the "2021 Repurchase Plan"), under which the Company was authorized to purchase up to $50.0 million of its common stock over the twelve month period commencing December 10, 2021. In November 2022, the Board of Directors approved an extension of the 2021 Repurchase Plan through December 15, 2023. Under the 2021 Repurchase Plan, 1,592,257 shares were purchased in open market purchases through December 31, 2022 for a total of approximately $21.7 million at an average of $13.61 per share. In February 2023, the 2021 Repurchase Plan was replaced by the 2023 Repurchase Plan (Note 20). For accounting purposes, common stock repurchases under our stock repurchase program are recorded based upon the purchase date of the applicable trade. Repurchased shares are accounted for as treasury stock in the consolidated balance sheets and have all been subsequently retired. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party TransactionsDuring the years ended December 31, 2022, 2021, and 2020, the Company did not have material transactions with its related parties or affiliates of its related parties requiring disclosure pursuant to the applicable rules of the Financial Accounting Standards Boards or the U.S. Securities and Exchange Commission. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On January 1, 2023, the Company granted 6,429,784 restricted stock units, 129,870 stock options, and 456,092 performance stock units to the Company's employees. The options granted will vest over four years from grant date, with 25% vesting after one year and the remainder vesting monthly thereafter. The RSUs granted will vest over four years from issuance with 25% after one year, and the remainder vesting quarterly thereafter. Between 0% and 150% of the performance stock units will vest on the third anniversary of its grant date based on certain stock price performance metrics. On January 19, 2023, the Company announced that it would be reducing its global workforce by approximately 6%. The reduction in force is primarily associated with the elimination of duplicative roles resulting from the integration of the Company's CTV platforms and the realization of acquisition operating cost synergies. On February 16, 2023, the Company's Board of Directors approved a repurchase plan (the "2023 Repurchase Plan"), pursuant to which the Company is authorized to purchase up to an aggregate of $75.0 million of common stock or Convertible Senior Notes through February 16, 2025. The 2023 Repurchase Plan allows the Company to repurchase its common stock or Convertible Senior Notes using open market stock purchases, privately negotiated transactions, block trades or other means in accordance with U.S. securities laws. The number of shares or notes repurchased and the timing of repurchases will depend on a number of factors, including, but not limited to, price, trading volume and general market conditions, along with working capital requirements, general business conditions, other opportunities that the Company may have for the use or investment of its capital and other factors. The repurchase program does not obligate the Company to repurchase any particular amount of common stock or notes and may be suspended, modified or discontinued at any time at the Company’s discretion. The Company intends to finance the repurchase program through cash on hand. |
Organization and Summary of S_2
Organization and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Consolidation | Basis of Consolidation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP, and include the operations of the Company and its wholly owned subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation. |
Segments | Segments Management has determined that the Company operates as one segment. The Company’s chief operating decision maker reviews financial information on an aggregated and consolidated basis, together with certain operating and performance measures principally to make decisions about how to allocate resources and to measure the Company’s performance. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported and disclosed financial statements and accompanying footnotes. Due to the economic uncertainty as a result of the COVID-19 pandemic, geopolitical events, including the conflict in Ukraine, and economic and macroeconomic factors like labor shortages, supply chain disruptions, inflation, and recessionary concerns impacting the markets and communities in which the Company's clients operate, it has become more difficult to apply certain assumptions and judgments into these estimates. The extent of the impact of these factors on the Company's operational and financial performance will depend on future developments, which are highly uncertain and cannot be predicted, including but not limited to, the duration and how quickly and to what extent normal economic and operating conditions can resume. During the year ended December 31, 2022, this uncertainty continued to result in a higher level of judgment related to its estimates and assumptions. As of the date of issuance of the consolidated financial statements, the Company is not aware of any specific event or circumstance that would require the Company to update its estimates, judgments, or revise the carrying value of its assets or liabilities. These estimates may change, as new events occur and additional information is obtained, and are recognized in the consolidated financial statements as soon as they become known. Actual results could differ materially from these estimates. On an ongoing basis, management evaluates its estimates, primarily those related to: (i) revenue recognition criteria, including the determination of revenue reporting as net versus gross in the Company’s revenue arrangements, (ii) accounts receivable and allowances for doubtful accounts, (iii) amounts capitalized and the useful lives of intangible assets, internal use software development costs, and property and equipment, (iv) valuation of long-lived assets and their recoverability, including goodwill, (v) the realization of tax assets and estimates of tax liabilities, (vi) assumptions used in valuation models to determine the fair value of stock-based awards, (vii) fair value of financial instruments, (viii) the recognition and disclosure of contingent liabilities, and (ix) the assumptions used in valuing acquired assets and assumed liabilities in business combinations. These estimates are based on historical data and experience, as well as various other factors that management believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Estimates relating to the estimated useful lives of internal-use software development costs, assumptions used in the valuation models to determine the fair value of stock options and stock-based compensation expense, business combinations, estimated useful lives of long-lived assets, recoverability of intangible assets and goodwill, the assumptions used in the valuation of acquired assets and liabilities in business combinations, and income taxes, including the realization of tax assets and estimates of tax liabilities. require the selection of appropriate valuation methodologies and models, and significant judgment in evaluating ranges of assumptions and financial inputs. Actual results may differ materially from those estimates under different assumptions or circumstances. |
Revenue Recognition | Revenue Recognition The Company generates revenue from transactions where it provides a platform for the purchase and sale of digital advertising inventory. Generally, our revenue is based on a percentage of the ad spend that runs through our platform, although for certain clients or transaction types we may receive a fixed CPM for each impression sold, and for advertising campaigns that are transacted through insertion orders we earn revenue based on the full amount of ad spend that runs through our platform. The Company also generates revenue from the SpringServe ad server and Demand Manager header-bidding product, where fees are either based on the number of impressions processed or a percentage of ad spend. In addition, the Company may receive certain fixed monthly fees for the use of its platform or products. The Company's platform dynamically connects sellers and buyers of advertising inventory in a digital marketplace. The Company's solution incorporates proprietary machine-learning algorithms, sophisticated data processing, high-volume storage, detailed analytics capabilities, and a distributed infrastructure. Digital advertising inventory is created when consumers access sellers’ content. Sellers provide digital advertising inventory to the Company's platform in the form of advertising requests, or ad requests. When the Company receives ad requests from sellers, it sends bid requests to buyers, which enable buyers to bid on sellers’ digital advertising inventory. Winning bids can create advertising, or paid impressions, for the seller to present to the consumer. The total volume of spending between buyers and sellers on the Company's platform is referred to as advertising spend. The Company keeps a percentage of that advertising spend as a fee, and remits the remainder to the seller. The fee that the Company retains from the gross advertising spend on its platform is recognized as revenue. The fee earned on each transaction is based on the pre-existing agreement between the Company and the seller and the clearing price of the winning bid. The Company recognizes revenue upon fulfillment of its performance obligation to a client, which occurs at the point in time an ad renders and is counted as a paid impression, subject to a contract existing with the client and a fixed or determinable transaction price. The Company does not have arrangements with multiple performance obligations. The Company considers the following when determining if a contract exists (i) contract approval by all parties, (ii) identification of each party’s rights regarding the goods or services to be transferred, (iii) specified payment terms, (iv) commercial substance of the contract, and (v) collectability of substantially all of the consideration is probable. |
Cost of Revenue | Cost of Revenue. The Company's cost of revenue consists primarily of data center costs, bandwidth costs, ad protection costs, depreciation and maintenance expense of hardware supporting the Company's revenue-producing platform, amortization of software costs for the development of the Company's revenue-producing platform, amortization expense associated with acquired developed technologies, personnel costs, facilities-related costs, and cloud computing costs. In addition, for revenue booked on a gross basis, cost of revenue includes traffic acquisition costs. Personnel costs included in cost of revenue include salaries, bonuses, and stock-based compensation, and are primarily attributable to personnel in the Company's network operations group who support the Company's platform. The Company capitalizes costs associated with software that is developed or obtained for internal use and amortizes the costs associated with its revenue-producing platform in cost of revenue over their estimated useful lives. The Company amortizes acquired developed technologies over their estimated useful lives. |
Sales and Marketing | Sales and Marketing. The Company's sales and marketing expenses consist primarily of personnel costs, including salaries, bonuses, and stock-based compensation, as well as marketing expenses such as brand marketing, travel expenses, trade shows and marketing materials, professional services, and amortization expense associated with client relationships, backlog, and non-compete agreements from the Company's business acquisitions and, to a lesser extent, facilities-related costs and depreciation and amortization. The Company's sales organization focuses on increasing the adoption of the Company's solution by existing and new buyers and sellers. The Company amortizes acquired intangibles associated with client relationships and backlog from its business acquisitions over their estimated useful lives. |
Technology and Development | Technology and Development. The Company's technology and development expenses consist primarily of personnel costs, including salaries, bonuses, and stock-based compensation, and professional services associated with the ongoing development and maintenance of the Company's solution, depreciation and amortization, and, to a lesser extent, facilities-related costs. These expenses include costs incurred in the development, implementation and maintenance of internal use software, including platform and related infrastructure. Technology and development costs are expensed as incurred, except to the extent that such costs are associated with internal use software development that qualifies for capitalization, which are then recorded as internal use software development costs, net on the Company's consolidated balance sheets. The Company amortizes internal use software development costs that relate to its revenue-producing activities on the Company's platform to cost of revenue and amortizes other internal use software development costs to technology and development costs or general and administrative expenses, depending on the nature of the related project. The Company amortizes acquired intangibles associated with technology and development functions from its business acquisitions over their estimated useful lives. |
General and Administrative | General and Administrative. The Company's general and administrative expenses consist primarily of personnel costs, including salaries, bonuses, and stock-based compensation, associated with the Company's executive, finance, legal, human resources, compliance, and other administrative personnel, as well as accounting and legal professional services fees, facilities-related costs and depreciation and amortization, and other corporate-related expenses. General and administrative expenses also include amortization of internal use software development costs and acquired intangible assets from the Company's business acquisitions over their estimated useful lives that relate to general and administrative functions. |
Merger and Restructuring Costs | Merger, Acquisition, and Restructuring Costs. The Company's merger, acquisition, and restructuring costs consist primarily of professional service fees associated with merger and acquisition activities, cash-based employee termination costs, related stock-based compensation charges associated with mergers, acquisitions, or restructuring activities, and other restructuring activities, including facility closures, relocation costs, and impairment costs of abandoned technology associated with restructuring activities. |
Stock-Based Compensation | Stock-Based Compensation Compensation expense related to employee and non-employee stock-based awards is measured and recognized in the consolidated financial statements based on the fair value of the awards granted. The Company grants awards to employees that vest based solely on continued service, or service conditions, awards that vest based on the achievement of performance targets, or performance conditions, and awards that vest based on our stock price exceeding a peer index, or market conditions. The fair value of each option award containing service and/or performance conditions is estimated on the grant date using the Black-Scholes option-pricing model. The fair value of awards containing market conditions is estimated using a Monte-Carlo lattice model. For service condition awards, stock-based compensation expense is recognized on a straight-line basis over the requisite service periods of the awards, which is generally four years. For performance condition and market condition awards, stock-based compensation expense is recognized using a graded vesting model over the requisite service period of the awards. For market condition awards, expense recognized is not subsequently reversed if the market conditions are not achieved. The assumptions and estimates used in the Black-Scholes pricing model are as follows: Fair Value of Common Stock. The fair value of common stock is based on the closing price of the Company's common stock as reported on the NASDAQ on the grant date. Risk-Free Interest Rate. The Company bases the risk-free interest rate used in the Black-Scholes option-pricing model on the yields of U.S. Treasury securities with maturities appropriate for the term of stock option awards. Expected Term. For employee stock options in which the Company did not have significant history and that contain service conditions, the Company applies the simplified approach, in which the expected term of an award is presumed to be the mid-point between the vesting date and the expiration date of the award. For employee stock options issued in the periods in which the Company did have significant history and that contain service conditions, the expected term is determined based on historical trends. The expected term of employee stock options that contain performance conditions represents the weighted-average period that the stock options are estimated to remain outstanding. Volatility. For grants issued in periods in which the Company did not have significant trading history for the Company’s common stock, the Company determined the price volatility based on the historical volatilities of a publicly traded peer group based on daily price observations over a period equivalent to the expected term of the stock option grants. For grants issued in periods in which the Company has sufficient history, the computation of the expected volatility assumption is based on the historical volatility of the Company’s common stock. Dividend Yield. The dividend yield assumption is based on the Company’s history and current expectations of dividend payouts. The Company has never declared or paid any cash dividends on its common stock and does not anticipate paying any cash dividends in the foreseeable future, so the Company used an expected dividend yield of zero. |
Income Taxes | Income Taxes Deferred income tax assets and liabilities are determined based upon the net tax effects of the differences between the Company’s consolidated financial statement carrying amounts and the tax basis of assets and liabilities and are measured using the enacted tax rate expected to apply to taxable income in the years in which the differences are expected to be reversed. A valuation allowance is used to reduce some or all of the deferred tax assets if, based upon the weight of available evidence, it is more likely than not that those deferred tax assets will not be realized. The Company maintains a partial valuation allowance to offset its domestic net deferred tax assets due to the uncertainty of realizing future tax benefits from the net operating loss carryforwards and other deferred tax assets. The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized. The Company recognizes interest and penalties accrued related to its uncertain tax positions in its income tax provision (benefit) in the consolidated statements of operations. |
Capital Stock | Capital Stock The Company has authorized capital stock of 500,000,000 shares of common stock and 10,000,000 shares of preferred stock. The Company has issued common stock, which is included in outstanding common stock on the Company's consolidated balance sheets. During 2021 and 2022, the Company repurchased shares of common stock, which was recorded as treasury stock on the Company's consolidated balance sheets. In 2022, all repurchased shares, including any outstanding treasury stock from 2021, were subsequently retired. The Company has not issued any shares of its preferred stock subsequent to the Company's initial public offering ("IPO") and does not have any preferred stock outstanding. The Company is required to reserve and keep available out of its authorized but unissued shares of common stock such number of shares sufficient to affect the conversion of all shares granted and available for grant under the Company’s stock award plans. The number of shares of the Company's stock reserved for these purposes at December 31, 2022 was 33,067,253. |
Net Income (Loss) Per Share Attributable to Common Stockholders | Net Income (Loss) Per Share Attributable to Common Stockholders Basic net income (loss) per share of common stock is calculated by dividing the net income (loss) by the weighted-average number of shares of common stock outstanding. Diluted income (loss) per share attributable to common stockholders adjusts the basic weighted-average number of shares of common stock outstanding for the effect of potentially dilutive securities during the period. Potentially dilutive securities consist of stock options, restricted stock awards, restricted stock units, potential shares issuable under the Company's Employee Stock Purchase Plan ("ESPP"), shares held in escrow, potential shares issuable as part of contingent consideration as a result of business combinations, and potential shares issuable as part of the Convertible Senior Notes. For purposes of this calculation, potentially dilutive securities are excluded from the calculation of diluted net income (loss) per share if their effect is anti-dilutive. |
Comprehensive Income (Loss) | Comprehensive Income (Loss) Comprehensive income (loss) encompasses all changes in equity other than those arising from transactions with stockholders, and consists of net income (loss), unrealized gains (losses) on investments and foreign currency translation adjustments. |
Cash, Cash Equivalents, and Restricted Cash | Cash and Cash Equivalents The Company invests excess cash primarily in money market funds, corporate debt securities, and highly liquid debt instruments of the U.S. government and its agencies.Restricted Cash The Company classifies certain restricted cash balances within prepaid expenses and other current assets and other assets, non-current on the consolidated balance sheets based upon the term of the remaining restrictions. |
Marketable Securities | The Company classifies investments held in money market funds as cash equivalents because the money market funds have weighted-average maturities at the date of purchase of less than 90 days. Investments held in U.S. government and agency bonds and corporate debt securities with stated maturities of less than one year are classified as short-term investments included in marketable securities and prepaid expenses and other current assets. |
Accounts Receivable Allowance for Doubtful Accounts | Accounts Receivable Allowance for Doubtful Accounts Accounts receivable are recorded at the invoiced amount, are unsecured, and do not bear interest. The allowance for doubtful accounts is based on the best estimate of the amount of probable credit losses in existing accounts receivable. The allowance for doubtful accounts is determined based on historical collection experience and the review in each period of the status of the then-outstanding accounts receivable, while taking into consideration current client information, subsequent collection history and other relevant data. The Company reviews the allowance for doubtful accounts on a quarterly basis. Account balances are charged off against the allowance when the Company believes it is probable the receivable will not be recovered. |
Property and Equipment, Net | Property and Equipment, Net Property and equipment, which includes amounts recorded under finance leases, are recorded at historical cost, less accumulated depreciation and amortization. Depreciation is computed using the straight-line method based upon the estimated useful lives of the assets. The estimated useful lives of the Company’s property and equipment are as follows: Years Computer equipment and network hardware 3 Furniture, fixtures and office equipment 5 to 7 Leasehold improvements Shorter of useful life or life of lease Network hardware under right-of-use finance arrangements Shorter of useful life or life of lease Repair and maintenance costs are charged to expense as incurred, while renewals and improvements are capitalized. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in the Company’s results of operations. |
Internal Use Software Development Costs | Internal Use Software Development Costs The Company capitalizes certain internal use software development costs associated with creating and enhancing internally developed software related to the Company’s technology infrastructure. These costs include personnel and related employee benefits expenses for employees who are directly associated with and who devote time to software projects, and external direct costs of materials and services consumed in developing or obtaining the software. Software development costs that do not meet the qualification for capitalization, as further discussed below, are expensed as incurred and recorded in technology and development expenses in the results of operations. Software development activities generally consist of three stages, (i) the planning stage, (ii) the application and infrastructure development stage, and (iii) the post implementation stage. Costs incurred in the planning and post implementation stages of software development, including costs associated with the post-configuration training and repairs and maintenance of the developed technologies, are expensed as incurred. The Company capitalizes costs associated with software developed for internal use when the planning stage is completed, management has authorized further funding for the completion of the project, and it is probable that the project will be completed and perform as intended. Costs incurred in the application and infrastructure development stages, including significant enhancements and upgrades, are capitalized. Capitalization ends once a project is substantially complete and the software and technologies are ready for their intended purpose. Internal use software development costs are amortized using a straight-line method over the estimated useful life, which is generally three years, commencing when the software is ready for its intended use. The straight-line recognition method approximates the manner in which the expected benefit will be derived. On an ongoing basis, the Company assesses the remaining estimated useful lives of internal use software projects. If remaining useful lives are revised, the change is accounted for as a change in estimate. The Company does not transfer ownership of its software, or lease its software, to third parties. Capitalized Costs Incurred in Cloud Computing Arrangements |
Intangible Assets | Intangible Assets Intangible assets primarily consist of acquired developed technology, client relationships, and non-compete agreements resulting from business combinations, which are recorded at acquisition-date fair value, less accumulated amortization. The Company determines the appropriate useful life of its intangible assets by performing an analysis of expected cash flows of the acquired assets. Intangible assets are amortized over their estimated useful lives using a straight-line method, which approximates the pattern in which the economic benefits are consumed. The Company’s intangible assets are being amortized over their estimated useful lives as follows: Years Developed technology 5 In-process research and development 3 to 5 Customer relationships 0.5 to 4 Backlog 0.75 Non-compete agreements 1 to 2 Other intangible assets 0.25 to 1.5 On an ongoing basis, the Company assesses the remaining estimated useful lives of intangible assets. If remaining useful lives are revised, the change is accounted for as a change in estimate. |
Impairment of Long-Lived Assets including Internal Use Capitalized Software Costs | Impairment of Long-Lived Assets including Internal Use Capitalized Software Costs The Company assesses the recoverability of its long-lived assets when events or changes in circumstances indicate their carrying value may not be recoverable. Such events or changes in circumstances may include: a significant adverse change in the extent or manner in which a long-lived asset is being used, significant adverse change in legal factors or in the business climate that could affect the value of a long-lived asset, an accumulation of costs significantly in excess of the amount originally expected for the acquisition or development of a long-lived asset, current or future operating or cash flow losses that demonstrate continuing losses associated with the use of a long-lived asset, or a current expectation that, more likely than not, a long-lived asset will be sold or otherwise disposed of significantly before the end of its previously estimated useful life. The Company performs impairment testing at the asset group level that represents the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. The Company assesses recoverability of a long-lived asset by determining whether the carrying value of the asset group can be recovered through projected undiscounted cash flows over their remaining lives. If the carrying value of the asset group exceeds the forecasted undiscounted cash flows, an impairment loss is recognized, measured as the amount by which the carrying amount exceeds estimated fair value. An impairment loss is charged to operations in the period in which management determines such impairment. |
Business Combinations | Business Combinations The results of businesses acquired in a business combination are included in the Company’s consolidated financial statements from the date of acquisition. The Company allocates the purchase price of a business combination, which is the sum of the consideration provided, which may consist of cash, equity or a combination of the two, to the identifiable assets and liabilities of the acquired business at their acquisition date fair values. The excess of the purchase price over the amount allocated to the identifiable assets and liabilities, if any, is recorded as goodwill. Determining the fair value of assets acquired and liabilities assumed requires management to use significant judgment and estimates including the selection of valuation methodologies, estimates of future revenues and cash flows, discount rates and selection of comparable companies. When the Company issues stock-based or cash awards to an acquired company’s stockholders, the Company evaluates whether the awards are contingent consideration or compensation for post-business combination services. The evaluation includes, among other things, whether the vesting of the awards is contingent on the continued employment of the selling stockholder beyond the acquisition date. If continued employment is required for vesting, the awards are treated as compensation for post-acquisition services and recognized as expense over the requisite service period. The Company estimates the fair value of intangible assets acquired generally using a discounted cash flow approach, which includes an analysis of the future cash flows expected to be generated by the asset and the risk associated with achieving these cash flows. The key assumptions used in the discounted cash flow model include the discount rate that is applied to the forecasted future cash flows to calculate the present value of those cash flows and the estimate of future cash flows attributable to the acquired intangible asset, which include revenue, expenses and taxes. The carrying value of acquired working capital assets and liabilities approximates its fair value, given the short-term nature of these assets and liabilities. Acquisition-related transaction costs are not included as a component of consideration transferred, but are accounted for as an expense in the period in which the costs are incurred. |
Goodwill | Goodwill Goodwill represents the excess of the aggregate fair value of the consideration transferred in a business combination over the fair value of the assets acquired, net of liabilities assumed. Goodwill is not amortized, but is subject to impairment testing conducted annually during the fourth quarter or more frequently if events or changes in circumstances indicate that goodwill may be impaired. In accordance with guidance related to impairment testing, the Company has the option to first assess qualitative factors to determine whether or not it is necessary to perform the quantitative goodwill impairment test. If the qualitative assessment option is not elected, or if the qualitative assessment indicates that it is more likely than not that the fair value is less than its carrying amount, a quantitative analysis is then performed. The quantitative analysis, if performed, compares the estimated fair value of the Company with its respective carrying amount, including goodwill. If the estimated fair value of the Company exceeds its carrying amount, including goodwill, goodwill is considered not to be impaired and no additional steps are necessary. If the fair value is less than the carrying amount, including goodwill, then an impairment adjustment must be recorded up to the carrying amount of goodwill. The Company operates as a single operating segment and has identified a single reporting unit. |
Operating and Finance Leases | Operating and Finance Leases The Company determines if an arrangement is a lease at inception. A contract is or contains a lease if it conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The Company's classes of assets that are leased include office facilities, data centers, and equipment. The Company has elected not to recognize short-term leases on the balance sheet, nor separate lease and non-lease components for data center leases. In addition, the Company utilized the portfolio approach to group leases with similar characteristics together. For identified leases, the Company used its incremental borrowing rate to discount the related future payment obligations, which represents the rate of interest the Company would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying amounts of the Company's cash equivalents, accounts receivable, accounts payable, accrued expenses, and seller payables approximate fair value due to the short-term nature of these instruments. Certain assets of the Company are recorded at their fair value, using the fair value hierarchy, on a recurring basis, and other assets and liabilities, including goodwill and intangible assets are subject to measurement at fair value on a non-recurring basis if they are deemed to be impaired as a result of an impairment review (see Note 5). |
Concentration of Risk | Concentration of Risk Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash, cash equivalents, restricted cash and accounts receivable. Cash and cash equivalents maintained with financial institutions exceed applicable federally insured limits. Accounts receivable include amounts due from buyers with principal operations primarily in the United States. The Company performs ongoing credit evaluations of its buyers. |
Foreign Currency Transactions and Translation | Foreign Currency Transactions and Translation Transactions in foreign currencies are translated into the functional currency of the applicable entity at the rates of exchange in effect at the date of the transaction. Foreign exchange gains or losses are included in foreign exchange (gain) loss, net in the accompanying consolidated statements of operations. To the extent that the functional currency is different from the U.S. Dollar, the financial statements have then been translated into U.S. Dollars using period-end exchange rates for assets and liabilities and average exchange rates for the results of operations. Foreign currency translation gains and losses are included as a component of accumulated other comprehensive income (loss) on the consolidated balance sheets. |
Recently Adopted Accounting Pronouncements and Recent Accounting Pronouncements | Recently Adopted Accounting Standards In July 2021, the FASB issued Update No. 2021-05, Leases (Topic 842)— Lessors – Certain Leases with Variable Lease Payments ("ASU 2021-05"). ASU 2021-05 requires a lessor to classify a lease with variable lease payments that do not depend on an index or rate as an operating lease if specified criteria are met. The Company adopted ASU 2021-05 on January 1, 2022 on a prospective basis, which did not have a material impact on the Company’s consolidated financial statements and related disclosures. Recent Accounting Pronouncements Not Yet Adopted In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805) – Accounting for Contract Assets and Contract Liabilities from Contracts with Customers ("ASU 2021-08"). ASU 2021-08 requires the recognition and measurement of contract assets and contract liabilities acquired in a business combination in accordance with ASC 606, Revenue from Contracts with Customers . Considerations to determine the amount of contract assets and contract liabilities to record at the acquisition date include the terms of the acquired contract, such as timing of payment, identification of each performance obligation in the contract and allocation of the contract transaction price to each identified performance obligation on a relative standalone selling price basis as of contract inception. ASU 2021-08 is effective for the Company beginning in the first quarter of 2023. The Company will adopt this standard prospectively and apply the guidance to future acquisitions, if any. The Company does not believe there are any other recently issued and effective or not yet effective pronouncements that would have or are expected to have a material impact on the Company’s present or future consolidated financial statements. |
Organization and Summary of S_3
Organization and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Property, Plant and Equipment | The estimated useful lives of the Company’s property and equipment are as follows: Years Computer equipment and network hardware 3 Furniture, fixtures and office equipment 5 to 7 Leasehold improvements Shorter of useful life or life of lease Network hardware under right-of-use finance arrangements Shorter of useful life or life of lease December 31, 2022 December 31, 2021 (in thousands) Purchased software $ 1,250 $ 1,214 Computer equipment and network hardware 150,405 124,907 Furniture, fixtures and office equipment 3,659 3,476 Leasehold improvements 3,368 3,307 Gross property and equipment 158,682 132,904 Accumulated depreciation (113,713) (98,837) Net property and equipment $ 44,969 $ 34,067 December 31, 2022 December 31, 2021 (in thousands) United States $ 31,036 $ 23,495 International 13,933 10,572 Total $ 44,969 $ 34,067 |
Finite-lived Intangible Assets Amortization | The Company’s intangible assets are being amortized over their estimated useful lives as follows: Years Developed technology 5 In-process research and development 3 to 5 Customer relationships 0.5 to 4 Backlog 0.75 Non-compete agreements 1 to 2 Other intangible assets 0.25 to 1.5 |
Net Income (Loss) Per Share (Ta
Net Income (Loss) Per Share (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table presents the basic and diluted net income (loss) per share: Year Ended December 31, 2022 December 31, 2021 December 31, 2020 (in thousands, except per share amounts) Basic Income (Loss) Per Share: Net income (loss) $ (130,323) $ 65 $ (53,432) Weighted-average common shares outstanding 132,887 126,294 96,700 Weighted-average unvested restricted shares — — — Weighted-average common shares outstanding used to compute net income (loss) per share 132,887 126,294 96,700 Basic net income (loss) per share $ (0.98) $ — $ (0.55) Diluted Income (Loss) Per Share: Net income (loss) $ (130,323) $ 65 $ (53,432) Denominator adjustment: Weighted-average common shares used in basic EPS 132,887 126,294 96,700 Dilutive effect of weighted-average restricted stock units — 5,294 — Dilutive effect of weighted-average common stock options — 4,435 — Dilutive effect of weighted-average performance stock units — 197 — Dilutive effect of weighted-average ESPP shares — 41 — Weighted-average shares used to compute diluted net income (loss) per share 132,887 136,261 96,700 Diluted net income (loss) per share $ (0.98) $ — $ (0.55) |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following weighted-average shares have been excluded from the calculation of diluted net income (loss) per share attributable to common stockholders for each period presented because they are anti-dilutive: Year Ended December 31, 2022 December 31, 2021 December 31, 2020 (in thousands) Unvested restricted stock units 1,506 — 4,713 Options to purchase common stock 1,864 — 2,317 Unvested performance awards 124 — 40 ESPP shares 18 — 50 Convertible Senior Notes 6,262 4,940 — Total shares excluded from net income (loss) per share 9,774 4,940 7,120 |
Revenues (Tables)
Revenues (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Schedules of Revenue Recognized on a Net Basis and on a Gross Basis | The following table presents our revenue recognized on a net basis and on a gross basis for the years ended December 31, 2022, 2021, and 2020: Year Ended December 31, 2022 December 31, 2021 December 31, 2020 (in thousands, except percentages) Revenue: Net basis $ 475,633 82 % $ 389,358 83 % $ 218,222 98 % Gross basis 101,436 18 79,055 17 3,406 2 Total $ 577,069 100 % $ 468,413 100 % $ 221,628 100 % |
Disaggregation of Revenue | The following table presents our revenue by channel for the years ended December 31, 2022, 2021, 2020: Year Ended December 31, 2022 December 31, 2021 December 31, 2020 (in thousands, except percentages) Channel: CTV $ 268,572 47 % $ 185,254 40 % $ 34,319 15 % Mobile 192,803 33 164,977 35 108,353 49 Desktop 115,694 20 118,182 25 78,956 36 Total $ 577,069 100 % $ 468,413 100 % $ 221,628 100 % The following table presents the Company's revenue disaggregated by geographic location, based on the location of the Company's sellers: Year Ended December 31, 2022 December 31, 2021 December 31, 2020 (in thousands) United States $ 447,634 $ 365,161 $ 161,570 International 129,435 103,252 60,058 Total $ 577,069 $ 468,413 $ 221,628 |
Accounts Receivable, Allowance for Credit Loss | The following is a summary of activity in the allowance for doubtful accounts for the years ended December 31, 2022, 2021, and 2020, respectively: Year Ended December 31, 2022 December 31, 2021 December 31, 2020 (in thousands) Allowance for doubtful accounts, Beginning Balance $ 3,475 $ 2,360 $ 3,400 Allowance for doubtful accounts, assumed from mergers or acquisitions — 835 1,033 Write-offs (751) (337) (3,054) Increase (decrease) in provision for expected credit losses (1,719) 597 870 Recoveries of previous write-offs 87 20 111 Allowance for doubtful accounts, December 31 $ 1,092 $ 3,475 $ 2,360 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value, Assets Measured on Recurring Basis | The table below sets forth a summary of financial instruments that are measured at fair value on a recurring basis at December 31, 2022: Total Quoted Prices in Significant Other Significant (in thousands) Cash equivalents $ 259,647 $ 259,647 $ — $ — The table below sets forth a summary of financial instruments that are measured at fair value on a recurring basis at December 31, 2021: Total Quoted Prices in Significant Other Significant (in thousands) Cash equivalents $ 7,869 $ 7,869 $ — $ — |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | The estimated useful lives of the Company’s property and equipment are as follows: Years Computer equipment and network hardware 3 Furniture, fixtures and office equipment 5 to 7 Leasehold improvements Shorter of useful life or life of lease Network hardware under right-of-use finance arrangements Shorter of useful life or life of lease December 31, 2022 December 31, 2021 (in thousands) Purchased software $ 1,250 $ 1,214 Computer equipment and network hardware 150,405 124,907 Furniture, fixtures and office equipment 3,659 3,476 Leasehold improvements 3,368 3,307 Gross property and equipment 158,682 132,904 Accumulated depreciation (113,713) (98,837) Net property and equipment $ 44,969 $ 34,067 December 31, 2022 December 31, 2021 (in thousands) United States $ 31,036 $ 23,495 International 13,933 10,572 Total $ 44,969 $ 34,067 |
Internal Use Software Develop_2
Internal Use Software Development Costs (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Research and Development [Abstract] | |
Schedule Of Internal Use Software Costs | Internal use software development costs were as follows: December 31, 2022 December 31, 2021 (in thousands) Internal use software development costs, gross 77,151 $ 62,490 Accumulated amortization (53,480) (42,397) Internal use software development costs, net $ 23,671 $ 20,093 |
Goodwill, Intangible Assets, _2
Goodwill, Intangible Assets, and Capitalized Costs Incurred in Cloud Computing Arrangements (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | Details of the Company’s goodwill were as follows (in thousands): Total Beginning balance at December 31, 2020 $ 158,125 Additions for Acquisition of SpotX (Note 9) 782,831 Additions for Acquisition of SpringServe (Note 9) 24,156 Additions for Acquisition of Nth Party (Note 9) 4,761 Ending balance at December 31, 2021 969,873 Additions for Acquisition of Carbon (Note 9) 8,456 Adjustments to the Acquisition of SpotX (Note 9) (112) Ending balance at December 31, 2022 $ 978,217 |
Schedule of Finite-Lived Intangible Assets | The Company’s intangible assets as of December 31, 2022 and 2021 included the following: December 31, 2022 December 31, 2021 (in thousands) Amortizable intangible assets: Developed technology $ 390,136 $ 378,958 Customer relationships 136,000 173,950 In-process research and development 12,730 14,630 Non-compete agreements 900 2,270 Trademarks 900 1,400 Total identifiable intangible assets, gross 540,666 571,208 Accumulated amortization—intangible assets: Developed technology (184,439) (75,850) Customer relationships (97,316) (65,702) In-process research and development (4,398) (1,250) Non-compete agreements (562) (1,197) Trademarks (450) (594) Total accumulated amortization—intangible assets (287,165) (144,593) Total identifiable intangible assets, net $ 253,501 $ 426,615 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | The estimated remaining amortization expense associated with the Company's intangible assets was as follows as of December 31, 2022: Fiscal Year Amount (in thousands) 2023 $ 202,490 2024 30,134 2025 14,445 2026 6,001 2027 431 Total $ 253,501 |
Business Combinations (Tables)
Business Combinations (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Business Acquisitions, by Acquisition | The following table summarizes the total purchase consideration (in thousands): Shares of Magnite common stock $ 274,604 Fair value of stock-based awards exchanged 11,646 Acceleration of single trigger equity awards, converted 1,168 Total purchase consideration $ 287,418 The following table summarizes the total purchase consideration (in thousands): Cash Consideration $ 640,000 Stock Consideration (Fair Value of Shares of Magnite common stock) 495,591 Working capital adjustment 65,152 Total purchase consideration $ 1,200,743 The following table summarizes the total purchase consideration (in thousands): Cash Consideration $ 31,136 SpotX initial cash investment in SpringServe 2,075 Fair value appreciation of SpotX purchase right 7,450 Indemnification claims - holdback 1,409 Total purchase consideration $ 42,070 |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The fair value of the purchase price was allocated to the identifiable assets acquired and liabilities assumed based upon their estimated fair values as of the date of the acquisition as set forth below (in thousands): Cash and cash equivalents $ 51,848 Accounts receivable, net 150,924 Prepaid expenses and other current assets 3,054 Property and equipment, net 1,814 Right-of-use lease asset 26,627 Intangible assets 103,410 Restricted cash 2,747 Other assets, non-current 369 Deferred tax assets, non-current 103 Goodwill 150,755 Total assets acquired 491,651 Accounts payable and accrued expenses 172,751 Lease liabilities - current portion 5,322 Deferred revenue 11 Other current liabilities 365 Lease liabilities - non-current portion 23,323 Other liabilities, non-current 194 Deferred tax liability 2,267 Total liabilities assumed 204,233 Total purchase price $ 287,418 The fair value of the purchase price was allocated to the identifiable assets acquired and liabilities assumed based upon their estimated fair values as of the date of the SpotX Acquisition as set forth below (in thousands): Cash $ 81,967 Restricted cash 199 Accounts receivable 199,649 Prepaid and other assets, current 12,308 Fixed assets 6,823 Intangible assets 429,600 Right-of-use lease asset 10,055 Goodwill 782,719 Total assets to be acquired 1,523,320 Accounts payable and accrued expenses 205,822 Other current liabilities 1,091 Lease liabilities 12,625 Deferred tax liability, net 103,039 Total liabilities to be assumed 322,577 Total purchase price $ 1,200,743 Cash $ 1,062 Accounts receivable 3,234 Prepaid and other assets, current 157 Fixed assets 25 Intangible assets 23,400 Right-of-use lease asset 1,879 Goodwill 24,156 Total assets to be acquired 53,913 Accounts payable and accrued expenses 2,475 Other current liabilities 35 Lease liabilities 3,179 Deferred tax liability, net 6,154 Total liabilities to be assumed 11,843 Total preliminary purchase price $ 42,070 |
Schedule of Finite-lived Intangible Assets Acquired as Part of Business Combination | The following table summarizes the components of the intangible assets and estimated useful lives as of the Acquisition Date (dollars in thousands): Estimated Useful Life Technology $ 58,000 5 years In-process research and development 8,030 4.7 years* Customer relationships 36,300 2.5 years Backlog 880 0.75 years Trademarks 200 0.25 years Total intangible assets acquired $ 103,410 * In-process research and development consists of two projects with a weighted-average useful life of 4.7 years. Amortization begins once associated projects are completed and it is determined the projects have alternative future use. The following table summarizes the components of the intangible assets and estimated useful lives as of the date of the SpotX Acquisition (dollars in thousands): Estimated Useful Life Technology $ 280,400 5 years Customer relationships 130,300 2 to 4 years Backlog 11,100 <1 year In-process research and development 5,800 3 years* Non-compete agreements 1,500 1 year Trademarks 500 <1 year Total intangible assets acquired $ 429,600 * In-process research and development consists of six projects with a weighted-average useful life of 3 years. Amortization begins once associated projects are completed and it is determined the projects have alternative future use. The following table summarizes the components of the intangible assets and estimated useful lives as of the date of the SpringServe Acquisition (dollars in thousands): Estimated Useful Life Technology $ 15,500 5 years Customer relationships 5,700 2 years Trademarks and Trade Names 900 3 years In-process research and development 800 3 years* Non-compete agreements 500 2 years Total intangible assets acquired $ 23,400 * In-process research and development consists of two projects with a weighted-average useful life of 3 years. Amortization begins once associated projects are completed and it is determined the projects have alternative future use. |
Business Acquisition, Pro Forma Information | The following table provides unaudited pro forma information as if Telaria had been merged with the Company as of January 1, 2019. The unaudited pro forma information reflects adjustments for additional amortization resulting from the fair value adjustments to assets acquired and liabilities assumed, adjustments for alignment of accounting policies, and transaction expenses as if the Telaria Merger occurred on January 1, 2019. The pro forma results do not include any anticipated cost synergies or other effects of the integration merged companies. Accordingly, pro forma amounts are not necessarily indicative of the results that actually would have occurred had the acquisition been completed on the dates indicated, nor is it indicative of the future operating results of the combined company. Year Ended December 31, 2020 (in thousands) Pro Forma Revenue $ 236,666 Pro Forma Net Loss $ (64,030) The following table provides unaudited pro forma information as if the SpotX and SpringServe Acquisitions had been acquired by the Company as of January 1, 2020. The unaudited pro forma information reflects adjustments for additional amortization resulting from the fair value adjustments to assets acquired and liabilities assumed, adjustments for alignment of accounting policies, and transaction expenses as if the SpotX and SpringServe Acquisitions occurred on January 1, 2020. The pro forma results do not include any anticipated cost synergies or other effects of the combined companies. Accordingly, pro forma amounts are not necessarily indicative of the results that actually would have occurred had the SpotX and SpringServe Acquisitions been completed on the dates indicated, nor is it indicative of the future operating results of the combined company. The table below excludes Nth Party as its impact on pro forma results were immaterial. Year Ended December 31, 2021 December 31, 2020 (in thousands) Pro Forma Revenue $ 540,466 $ 400,039 Pro Forma Net Loss $ (86,621) $ (156,638) |
Accounts Payable and Accrued _2
Accounts Payable and Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts Payable and Accrued Liabilities | Accounts payable and accrued expenses included the following: December 31, 2022 December 31, 2021 (in thousands) Accounts payable—seller $ 1,057,556 $ 971,220 Accounts payable—trade 19,387 11,904 Accrued employee-related payables 15,065 16,230 Accrued holdback - indemnification claims 2,313 1,602 Total $ 1,094,321 $ 1,000,956 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Loss (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | The components of accumulated other comprehensive loss, which relate to foreign currency translation, were as follows (in thousands): Accumulated Other Comprehensive Loss Balance at December 31, 2019 $ (45) Other comprehensive loss (912) Balance at December 31, 2020 (957) Other comprehensive loss (419) Balance at December 31, 2021 (1,376) Other comprehensive loss (1,775) Balance at December 31, 2022 $ (3,151) |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Share-based Compensation, Stock Options, Activity | A summary of stock option activity for the year ended December 31, 2022 is as follows: Shares Under Option Weighted- Average Exercise Price Weighted- Average Contractual Life Aggregate Intrinsic Value (in thousands) (in thousands) Outstanding at December 31, 2021 5,129 $ 7.25 Granted 699 $ 13.90 Exercised (613) $ 3.64 Expired (418) $ 5.84 Forfeited (125) $ 12.14 Outstanding at December 31, 2022 4,672 $ 8.71 5.6 years $ 19,676 Exercisable at December 31, 2022 3,593 $ 7.00 4.7 years $ 18,005 |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | The Company estimates the fair value of stock options that contain service and/or performance conditions using the Black-Scholes option pricing model. The grant date fair value of options granted during the year ended December 31, 2022 was $8.93 per share. The weighted-average input assumptions used by the Company were as follows: Year Ended December 31, 2022 December 31, 2021 December 31, 2020 Expected term (in years) 5.0 5.0 6.3 Risk-free interest rate 1.63 % 0.88 % 0.45 % Expected volatility 79 % 79 % 67 % Dividend yield — % — % — % |
Schedule of Nonvested Restricted Stock Units Activity | A summary of restricted stock unit activity for the year ended December 31, 2022 is as follows: Number of Shares Weighted-Average Grant Date Fair Value (in thousands) Restricted stock units outstanding at December 31, 2021 6,634 $ 18.39 Granted 8,322 $ 12.69 Canceled (1,680) $ 15.71 Vested and released (3,276) $ 15.43 Restricted stock units outstanding at December 31, 2022 10,000 * $ 15.06 Restricted stock units outstanding and unvested at December 31, 2022 9,982 $ 15.08 *At December 31, 2022, outstanding restricted stock units included 18,436 units that were vested but deferred. |
Schedule of Stock-Based Compensation Expense Recorded in the Consolidated Statements of Operations | Total stock-based compensation expense recorded in the consolidated statements of operations was as follows: Year Ended December 31, 2022 December 31, 2021 December 31, 2020 (in thousands) Cost of revenue $ 1,666 $ 792 $ 525 Sales and marketing 21,558 15,718 8,229 Technology and development 19,961 11,857 7,451 General and administrative 18,929 11,297 10,416 Merger, acquisition, and restructuring costs 2,004 1,071 1,870 Total stock-based compensation expense $ 64,118 $ 40,735 $ 28,491 |
Merger, Acquisition, and Rest_2
Merger, Acquisition, and Restructuring Costs (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring and Other Exit Costs | The following table summarizes merger, acquisition, and restructuring cost activity: Year Ended December 31, 2022 December 31, 2021 December 31, 2020 (in thousands) Professional Service (investment banking advisory, legal and other professional services) $ 917 $ 28,422 $ 9,935 Personnel related (severance and one-time termination benefit costs) 1,227 6,184 5,747 Non-cash stock-based compensation (double-trigger acceleration and severance) 2,004 1,071 1,870 Impairment costs of abandoned technology 3,320 — — Loss contracts (lease related) — 2,500 — Total merger, acquisition, and restructuring costs $ 7,468 $ 38,177 $ 17,552 Accrued restructuring costs related to mergers and acquisitions were $1.2 million and $2.7 million at December 31, 2022 and December 31, 2021, respectively and were primarily related to the SpotX Acquisition, the SpringServe Acquisition, and the Telaria Merger. Accrued restructuring costs associated with personnel costs are included in accounts payable and accrued expenses and accruals related to assumed loss contracts are included in other current liabilities and other liabilities, non-current on the Company's consolidated balance sheets. Year Ended December 31, 2022 December 31, 2021 December 31, 2020 (in thousands) Accrued merger. acquisition, and restructuring costs at beginning of period $ 2,742 $ 2,935 $ — Restructuring costs (personnel related and non-cash stock-based compensation) 3,231 7,255 7,617 Restructuring activity, merger and acquisition loss contracts — 2,500 3,543 Restructuring activity, impairments 3,320 — — Cash paid for restructuring costs (2,747) (6,377) (6,355) Non-cash loss contracts (lease related) — (2,500) — Non-cash impairments (3,320) — — Non-cash stock-based compensation (2,004) (1,071) (1,870) Accrued merger, acquisition, and restructuring costs at end of period $ 1,222 $ 2,742 $ 2,935 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income before Income Tax, Domestic and Foreign | The following are the domestic and foreign components of the Company’s income (loss) before income taxes for the years ended December 31, 2022, 2021, and 2020: Year Ended December 31, 2022 December 31, 2021 December 31, 2020 (in thousands) Domestic $ (145,480) $ (105,168) $ (57,253) International 9,883 10,180 4,514 Loss before income taxes $ (135,597) $ (94,988) $ (52,739) |
Schedule of Components of Income Tax Expense (Benefit) | The following are the components of the provision (benefit) for income taxes for the years ended December 31, 2022, 2021, and 2020: Year Ended December 31, 2022 December 31, 2021 December 31, 2020 (in thousands) Current: Federal $ (186) $ 128 $ (144) State 1,056 1,515 15 Foreign 2,735 2,275 1,117 Total current provision 3,605 3,918 988 Deferred: Federal (2,039) (89,404) 9 State (6,324) (8,296) (12) Foreign (516) (1,271) (292) Total deferred benefit (8,879) (98,971) (295) Total provision (benefit) for income taxes $ (5,274) $ (95,053) $ 693 |
Schedule of Effective Income Tax Rate Reconciliation | Set forth below is a reconciliation of the components that caused the Company’s provision (benefit) for income taxes to differ from amounts computed by applying the U.S. Federal statutory rate of 21% for the years ended December 31, 2022, 2021, and 2020: Year Ended December 31, 2022 December 31, 2021 December 31, 2020 U.S. federal statutory income tax rate 21.0 % 21.0 % 21.0 % State income taxes, net of federal benefit 3.1 % 5.6 % (0.2) % Foreign loss at other than U.S. rates (0.1) % (0.5) % (0.5) % Stock-based compensation expense (2.4) % 31.7 % 11.4 % Meals and entertainment (0.1) % (0.1) % (0.1) % Other permanent items (0.7) % (1.6) % (1.1) % Change in valuation allowance (15.5) % 58.0 % (19.5) % Sec 162(m) officers compensation (4.1) % (14.2) % (12.7) % Provision to return adjustments 0.3 % 0.2 % 0.4 % Research and development tax credits 2.5 % — % — % Foreign withholding taxes (0.1) % — % — % Effective income tax rate 3.9 % 100.1 % (1.3) % |
Schedule of Deferred Tax Assets and Liabilities | Set forth below are the tax effects of temporary differences that give rise to a significant portion of the deferred tax assets and deferred tax liabilities as of December 31, 2022 and 2021: December 31, 2022 December 31, 2021 (in thousands) Deferred Tax Assets: Accrued liabilities $ 1,308 $ 1,208 Lease liabilities 15,679 18,499 Stock-based compensation 4,830 5,573 Net operating loss carryovers 111,587 131,509 Tax credit carryovers 9,131 5,308 Other 2,460 1,555 Total deferred tax assets 144,995 163,652 Less valuation allowance (76,772) (56,049) Deferred tax assets, net of valuation allowance 68,223 107,603 Deferred Tax Liabilities: Fixed assets (2,132) (2,059) Intangible assets (56,022) (101,477) Right of use lease asset (12,763) (15,563) Total deferred tax liabilities (70,917) (119,099) Net deferred tax assets (liability) $ (2,694) $ (11,496) |
Schedule of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns Roll Forward | The following table summarizes the activity related to the unrecognized tax benefits (in thousands): Amount Balance as of December 31, 2020 $ 3,214 Increases related to current year tax positions 200 Decreases related to prior year tax positions (41) Increases related to prior year tax positions 342 Balance as of December 31, 2021 3,715 Increases related to current year tax positions 398 Decreases related to prior year tax positions (634) Increases related to prior year tax positions 772 Balance as of December 31, 2022 $ 4,251 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Schedules of Maturity of Lease Liabilities | The maturity of the Company's lease liabilities associated with leases included in the lease liability and ROU asset were as follows as of December 31, 2022 (in thousands): Fiscal Year 2023 $ 25,711 2024 22,224 2025 14,466 2026 12,007 2027 7,425 Thereafter 21,011 Total lease payments (undiscounted) 102,844 Less: imputed interest (15,341) Lease liabilities—total (discounted) $ 87,503 |
Commitment and Contingencies (T
Commitment and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contractual Obligation, Fiscal Year Maturity | As of December 31, 2022, the Company's outstanding non-cancelable contractual obligations with a remaining term of one year or longer consist of the following (in thousands): Fiscal Year 2023 $ 7,140 2024 6,859 2025 2,070 Total $ 16,069 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | Long term debt as of December 31, 2022 and 2021 consisted of the following: December 31, 2022 December 31, 2021 (in thousands) Convertible Senior Notes $ 400,000 $ 400,000 Less: Unamortized debt issuance cost (7,355) (9,643) Net 392,645 390,357 Term Loan B Facility 354,600 358,200 Less: Unamortized discount and debt issuance cost (20,888) (24,934) Net 333,712 333,266 Less: Current portion (3,600) (3,600) Total non-current debt $ 722,757 $ 720,023 |
Schedule of Maturities of Long-term Debt | Maturities of the principal amount of the Company's long-term debt as of December 31, 2022 are as follows (in thousands): Fiscal Year 2023 $ 3,600 2024 3,600 2025 3,600 2026 403,600 2027 3,600 Thereafter 336,600 Total (discounted) $ 754,600 Amortization expense for the Company's debt issuance costs related to the Convertible Senior notes for fiscal years 2023 through 2026 is as follows (in thousands): Fiscal Year Debt Issuance Costs 2023 $ 2,288 2024 2,288 2025 2,288 2026 491 Total $ 7,355 Amortization expense for the Term Loan B Facility debt discount and debt issuance costs for fiscal years 2023 through 2028 is as follows (in thousands): Fiscal Year Debt Discount Debt Issuance Costs 2023 $ 1,564 $ 2,441 2024 1,548 2,416 2025 1,532 2,391 2026 1,516 2,366 2027 1,500 2,341 Thereafter 498 775 Total $ 8,158 $ 12,730 |
Interest Income and Interest Expense Disclosure | The following table sets forth interest expense related to the Convertible Senior Notes for the years ended December 31, 2022 and 2021: December 31, 2022 December 31, 2021 (in thousands, except interest rates) Contractual interest expense $ 1,000 $ 786 Amortization of debt issuance costs 2,288 1,798 Total interest expense $ 3,288 $ 2,584 Effective interest rate 0.82 % 0.82 % The following table sets forth interest expense related to the Term Loan B Facility for the years ended December 31, 2022 and 2021: December 31, 2022 December 31, 2021 (in thousands. except interest rates) Contractual interest expense 24,322 14,074 Amortization of debt discount 1,580 1,062 Amortization of debt issuance costs 2,466 1,657 Total interest expense 28,368 16,793 Effective interest rate 7.95 % 7.00 % |
Schedule of Debt | The following table summarizes the amount outstanding under the Term Loan B Facility as of December 31, 2022 and 2021: December 31, 2022 December 31, 2021 (in thousands) Term Loan B Facility $ 354,600 $ 358,200 Unamortized debt discounts (8,158) (9,738) Unamortized debt issuance costs (12,730) (15,196) Debt, net of debt discounts and issuance costs $ 333,712 $ 333,266 |
Organization and Summary of S_4
Organization and Summary of Significant Accounting Policies - Narrative (Details) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 USD ($) segment shares | Dec. 31, 2021 USD ($) shares | |
Concentration Risk [Line Items] | ||
Number of operating segments | segment | 1 | |
share-based payment award, award requisite service period | 4 years | |
Common stock, shares authorized (in shares) | 500,000,000 | 500,000,000 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Common stock reserved (in shares) | 33,067,253 | |
Restricted cash | $ | $ 0.2 | $ 0.3 |
Customer Concentration Risk | Accounts Receivable | Customer one | ||
Concentration Risk [Line Items] | ||
Concentration risk, percent | 45% | 44% |
Customer Concentration Risk | Accounts Receivable | Customer two | ||
Concentration Risk [Line Items] | ||
Concentration risk, percent | 9% | 10% |
Supplier Concentration Risk | Accounts Payable | One Seller | ||
Concentration Risk [Line Items] | ||
Concentration risk, percent | 28% | 21% |
Cloud computing software | ||
Concentration Risk [Line Items] | ||
Finite-lived intangible asset, amortization term | 3 years | |
Term of service arrangement | 3 years | |
Measurement input, expected dividend payment | ||
Concentration Risk [Line Items] | ||
Alternative investment, measurement input | 0 |
Organization and Summary of S_5
Organization and Summary of Significant Accounting Policies - Property and Equipment (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Computer equipment and network hardware | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 3 years |
Furniture, fixtures and office equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 5 years |
Furniture, fixtures and office equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 7 years |
Organization and Summary of S_6
Organization and Summary of Significant Accounting Policies - Intangible Assets (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Developed technology | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible asset, useful life | 5 years |
In-process research and development | Minimum | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible asset, useful life | 3 years |
In-process research and development | Maximum | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible asset, useful life | 5 years |
Customer relationships | Minimum | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible asset, useful life | 6 months |
Customer relationships | Maximum | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible asset, useful life | 4 years |
Backlog | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible asset, useful life | 9 months |
Non-compete agreements | Minimum | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible asset, useful life | 1 year |
Non-compete agreements | Maximum | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible asset, useful life | 2 years |
Other intangible assets | Minimum | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible asset, useful life | 3 months |
Other intangible assets | Maximum | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible asset, useful life | 1 year 6 months |
Net Income (Loss) Per Share - B
Net Income (Loss) Per Share - Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Basic Income (Loss) Per Share: | |||
Net income (loss) | $ (130,323) | $ 65 | $ (53,432) |
Weighted-average common shares outstanding (in shares) | 132,887 | 126,294 | 96,700 |
Weighted-average unvested restricted shares (in shares) | 0 | 0 | 0 |
Weighted-average common shares outstanding (in shares) | 132,887 | 126,294 | 96,700 |
Basic net income (loss) per share (in USD per share) | $ (0.98) | $ 0 | $ (0.55) |
Diluted Income (Loss) Per Share: | |||
Net income (loss) | $ (130,323) | $ 65 | $ (53,432) |
Denominator adjustment: | |||
Weighted-average common shares outstanding (in shares) | 132,887 | 126,294 | 96,700 |
Weighted-average shares used to compute diluted net income (loss) per share (in shares) | 132,887 | 136,261 | 96,700 |
Diluted net income (loss) per share (in USD per share) | $ (0.98) | $ 0 | $ (0.55) |
Restricted Stock Units (RSUs) | |||
Denominator adjustment: | |||
Dilutive effect of weighted-average share-based payments (in shares) | 0 | 5,294 | 0 |
Stock Option | |||
Denominator adjustment: | |||
Dilutive effect of weighted-average share-based payments (in shares) | 0 | 4,435 | 0 |
Performance Shares Units | |||
Denominator adjustment: | |||
Dilutive effect of weighted-average share-based payments (in shares) | 0 | 197 | 0 |
ESPP shares | |||
Denominator adjustment: | |||
Dilutive effect of weighted-average share-based payments (in shares) | 0 | 41 | 0 |
Net Income (Loss) Per Share - S
Net Income (Loss) Per Share - Shares Excluded and Included in Calculation of Diluted Earnings Per Share (Details) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total shares excluded from net income (loss) per share (in shares) | 9,774 | 4,940 | 7,120 |
Options to purchase common stock | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total shares excluded from net income (loss) per share (in shares) | 1,864 | 0 | 2,317 |
Unvested restricted stock units | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total shares excluded from net income (loss) per share (in shares) | 1,506 | 0 | 4,713 |
Unvested performance awards | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total shares excluded from net income (loss) per share (in shares) | 124 | 0 | 40 |
ESPP shares | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total shares excluded from net income (loss) per share (in shares) | 18 | 0 | 50 |
Convertible Senior Notes | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total shares excluded from net income (loss) per share (in shares) | 6,262 | 4,940 | 0 |
Net Income (Loss) Per Share - N
Net Income (Loss) Per Share - Narrative (Details) | 1 Months Ended | 12 Months Ended | ||
Mar. 31, 2021 | Dec. 31, 2022 project | Dec. 31, 2021 project | Dec. 31, 2020 | |
Convertible Senior Notes | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Shares issuable assuming conversion (in shares) | 6,261,560 | 6,261,560 | ||
Convertible Debt | Convertible Senior Notes | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Conversion ratio | 0.0156539 | 0.0156539 | ||
Performance Shares, Granted April 2020 | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Performance measurement percentage | 116% | 150% | 150% | |
Performance shares, Granted April 2021 | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Performance measurement percentage | 0% | 0% | ||
Performance shares, Granted August 2021 | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Performance measurement percentage | 0% | 0% | ||
Performance shares, Granted February 2022 | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Performance measurement percentage | 81% |
Revenues - Narrative (Details)
Revenues - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | ||||
Payment terms | 75 days | |||
Accounts receivable, allowance for credit loss | $ 1,092 | $ 3,475 | $ 2,360 | $ 3,400 |
Accounts payable, seller | 600 | 2,100 | ||
Increase (decrease) in provision for expected credit losses | (1,719) | 597 | 870 | |
Increase in contra seller payable | (1,600) | 500 | 1,000 | |
Provision for doubtful accounts | $ (163) | $ 49 | $ (138) |
Revenues - Revenue Recognized o
Revenues - Revenue Recognized on a Gross and Net Basis (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Disaggregation of Revenue [Line Items] | |||
Revenue | $ 577,069 | $ 468,413 | $ 221,628 |
Net basis | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 475,633 | 389,358 | 218,222 |
Gross basis | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | $ 101,436 | $ 79,055 | $ 3,406 |
Revenue Benchmark | Concentration of Basis of Revenue Recognition | |||
Disaggregation of Revenue [Line Items] | |||
Concentration risk, percent | 100% | 100% | 100% |
Revenue Benchmark | Concentration of Basis of Revenue Recognition | Net basis | |||
Disaggregation of Revenue [Line Items] | |||
Concentration risk, percent | 82% | 83% | 98% |
Revenue Benchmark | Concentration of Basis of Revenue Recognition | Gross basis | |||
Disaggregation of Revenue [Line Items] | |||
Concentration risk, percent | 18% | 17% | 2% |
Revenues - Revenue Disaggregate
Revenues - Revenue Disaggregated by Sales Distribution Channel (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Disaggregation of Revenue [Line Items] | |||
Revenues | $ 577,069 | $ 468,413 | $ 221,628 |
Revenue Benchmark | Product Concentration Risk | |||
Disaggregation of Revenue [Line Items] | |||
Concentration risk, percent | 100% | 100% | 100% |
CTV | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | $ 268,572 | $ 185,254 | $ 34,319 |
CTV | Revenue Benchmark | Product Concentration Risk | |||
Disaggregation of Revenue [Line Items] | |||
Concentration risk, percent | 47% | 40% | 15% |
Mobile | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | $ 192,803 | $ 164,977 | $ 108,353 |
Mobile | Revenue Benchmark | Product Concentration Risk | |||
Disaggregation of Revenue [Line Items] | |||
Concentration risk, percent | 33% | 35% | 49% |
Desktop | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | $ 115,694 | $ 118,182 | $ 78,956 |
Desktop | Revenue Benchmark | Product Concentration Risk | |||
Disaggregation of Revenue [Line Items] | |||
Concentration risk, percent | 20% | 25% | 36% |
Revenues - Revenue Disaggrega_2
Revenues - Revenue Disaggregated by Geographic Location (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Disaggregation of Revenue [Line Items] | |||
Revenues | $ 577,069 | $ 468,413 | $ 221,628 |
United States | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 447,634 | 365,161 | 161,570 |
International | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | $ 129,435 | $ 103,252 | $ 60,058 |
Revenues - Schedule of Allowanc
Revenues - Schedule of Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |||
Allowance for doubtful accounts, Beginning Balance | $ 3,475 | $ 2,360 | $ 3,400 |
Allowance for doubtful accounts, assumed from mergers or acquisitions | 0 | 835 | 1,033 |
Write-offs | (751) | (337) | (3,054) |
Increase (decrease) in provision for expected credit losses | (1,719) | 597 | 870 |
Recoveries of previous write-offs | 87 | 20 | 111 |
Allowance for doubtful accounts, December 31 | $ 1,092 | $ 3,475 | $ 2,360 |
Fair Value Measurements - Finan
Fair Value Measurements - Financial Instruments (Details) - Recurring - Cash equivalents - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | $ 259,647 | $ 7,869 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 259,647 | 7,869 |
Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | $ 0 | $ 0 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Secured Debt | Term Loan B Facility | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt, fair value | $ 333,300 | |
Recurring | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Convertible notes | 305,000 | $ 315,500 |
Cash equivalents | Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 259,647 | 7,869 |
Cash equivalents | Recurring | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | $ 0 | $ 0 |
Property and Equipment - Summar
Property and Equipment - Summary of Property and Equipment by Major Class (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Gross property and equipment | $ 158,682 | $ 132,904 |
Accumulated depreciation | (113,713) | (98,837) |
Net property and equipment | 44,969 | 34,067 |
Purchased software | ||
Property, Plant and Equipment [Line Items] | ||
Gross property and equipment | 1,250 | 1,214 |
Computer equipment and network hardware | ||
Property, Plant and Equipment [Line Items] | ||
Gross property and equipment | 150,405 | 124,907 |
Furniture, fixtures and office equipment | ||
Property, Plant and Equipment [Line Items] | ||
Gross property and equipment | 3,659 | 3,476 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Gross property and equipment | $ 3,368 | $ 3,307 |
Property and Equipment - Narrat
Property and Equipment - Narrative (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation expense on property and equipment | $ 19,000,000 | $ 16,100,000 | $ 16,000,000 |
Impairment of long-lived assets | 0 | 0 | $ 0 |
Finance lease, right-of-use asset, accumulated amortization | $ 1,300,000 | $ 500,000 |
Property and Equipment - Summ_2
Property and Equipment - Summary of Property and Equipment by Geographical Region (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, net | $ 44,969 | $ 34,067 |
United States | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, net | 31,036 | 23,495 |
International | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, net | $ 13,933 | $ 10,572 |
Internal Use Software Develop_3
Internal Use Software Development Costs - Schedule of Internal Use Software Development Costs (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Research and Development [Abstract] | ||
Internal use software development costs, gross | $ 77,151 | $ 62,490 |
Accumulated amortization | (53,480) | (42,397) |
Internal use software development costs, net | $ 23,671 | $ 20,093 |
Internal Use Software Develop_4
Internal Use Software Development Costs - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Research and Development Arrangement, Contract to Perform for Others [Line Items] | |||
Capitalized computer software, additions | $ 16.2 | $ 12.9 | $ 9.2 |
Capitalized computer software, amortization | 12.6 | 9 | 8.3 |
Internal use software development costs, write-offs | $ 1.5 | $ 0.1 | $ 0.1 |
Basic (in USD per share) | $ (0.98) | $ 0 | $ (0.55) |
Diluted (in USD per share) | $ (0.98) | $ 0 | $ (0.55) |
Computer software development in process | $ 7.5 | ||
Estimated amortization expense, 2023 | 10.7 | ||
Estimated amortization expense, 2024 | 4.1 | ||
Estimated amortization expense, 2025 | 1.4 | ||
Scenario, Adjustment | Capitalized Software Projects, Estimated Useful Life | |||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | |||
Capitalized computer software, amortization | $ 0.7 | ||
Basic (in USD per share) | $ 0.01 | ||
Diluted (in USD per share) | $ 0.01 |
Goodwill, Intangible Assets, _3
Goodwill, Intangible Assets, and Capitalized Costs Incurred in Cloud Computing Arrangements - Goodwill Activity (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Goodwill [Roll Forward] | ||
Beginning balance | $ 969,873 | $ 158,125 |
Ending balance | 978,217 | 969,873 |
SpotX, Inc. | ||
Goodwill [Roll Forward] | ||
Additions during period | 782,831 | |
Adjustments to the Acquisition of SpotX (Note 9) | (112) | |
SpringServe | ||
Goodwill [Roll Forward] | ||
Additions during period | 24,156 | |
Nth Party | ||
Goodwill [Roll Forward] | ||
Beginning balance | 4,800 | |
Additions during period | 4,761 | |
Ending balance | $ 4,800 | |
Carbon | ||
Goodwill [Roll Forward] | ||
Additions during period | $ 8,456 |
Goodwill, Intangible Assets, _4
Goodwill, Intangible Assets, and Capitalized Costs Incurred in Cloud Computing Arrangements - Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Finite-Lived Intangible Assets [Line Items] | ||
Total identifiable intangible assets, gross | $ 540,666 | $ 571,208 |
Total accumulated amortization—intangible assets | (287,165) | (144,593) |
Total identifiable intangible assets, net | 253,501 | 426,615 |
Developed technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total identifiable intangible assets, gross | 390,136 | 378,958 |
Total accumulated amortization—intangible assets | (184,439) | (75,850) |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total identifiable intangible assets, gross | 136,000 | 173,950 |
Total accumulated amortization—intangible assets | (97,316) | (65,702) |
In-process research and development | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total identifiable intangible assets, gross | 12,730 | 14,630 |
Total accumulated amortization—intangible assets | (4,398) | (1,250) |
Non-compete agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total identifiable intangible assets, gross | 900 | 2,270 |
Total accumulated amortization—intangible assets | (562) | (1,197) |
Trademarks | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total identifiable intangible assets, gross | 900 | 1,400 |
Total accumulated amortization—intangible assets | $ (450) | $ (594) |
Goodwill, Intangible Assets, _5
Goodwill, Intangible Assets, and Capitalized Costs Incurred in Cloud Computing Arrangements - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Amortization expense of intangible assets | $ 184,400 | $ 121,900 | $ 24,900 |
Historical cost | 40,500 | 11,100 | 1,100 |
Capitalized cloud computing costs, net | 23,671 | 20,093 | |
Impairment costs of abandoned technology | $ 3,320 | $ 0 | $ 0 |
Impairment, Intangible Asset, Finite-Lived, Statement of Income or Comprehensive Income [Extensible Enumeration] | Merger, acquisition, and restructuring costs | ||
Basic (in USD per share) | $ (0.98) | $ 0 | $ (0.55) |
Diluted (in USD per share) | $ (0.98) | $ 0 | $ (0.55) |
Computer Software, Intangible Asset [Member] | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Amortization expense of intangible assets | $ 700 | $ 400 | $ 0 |
Scenario, Adjustment | Intangible Assets, Amortization Period | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Amortization expense of intangible assets | $ 34,700 | ||
Basic (in USD per share) | $ 0.27 | ||
Diluted (in USD per share) | $ 0.27 | ||
Prepaid expenses and other current assets | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Capitalized cloud computing costs, net | $ 700 | 500 | |
Other assets, non-current | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Capitalized cloud computing costs, net | $ 500 | $ 700 |
Goodwill, Intangible Assets, _6
Goodwill, Intangible Assets, and Capitalized Costs Incurred in Cloud Computing Arrangements - Finite-Lived Intangible Assets, Future Amortization Expense (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2023 | $ 202,490 | |
2024 | 30,134 | |
2025 | 14,445 | |
2026 | 6,001 | |
2027 | 431 | |
Total identifiable intangible assets, net | $ 253,501 | $ 426,615 |
Business Combinations - Narrati
Business Combinations - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | |||||||
Jul. 01, 2021 | Apr. 30, 2021 | Feb. 04, 2021 | Apr. 01, 2020 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Apr. 29, 2021 | |
Business Acquisition [Line Items] | |||||||||
Percent of company owned by pre-merger holders of company | 52% | ||||||||
Merger, acquisition, and restructuring costs | $ 7,468 | $ 38,177 | $ 17,552 | ||||||
Increase (decrease) in valuation allowance | 20,700 | (53,900) | 16,400 | ||||||
Finite-lived intangible assets acquired | $ 23,400 | ||||||||
Goodwill | $ 969,873 | $ 978,217 | 969,873 | 158,125 | |||||
Non-compete agreements | |||||||||
Business Acquisition [Line Items] | |||||||||
Estimated useful life | 2 years | ||||||||
SpringServe | SpotX, Inc. | |||||||||
Business Acquisition [Line Items] | |||||||||
Prior investment | 2,100 | ||||||||
Fair value of prior investment | 9,500 | $ 7,500 | |||||||
Telaria | |||||||||
Business Acquisition [Line Items] | |||||||||
Common stock, issued and outstanding (in shares) | 1.082 | ||||||||
Issued in merger plus acceleration (in shares) | 52,098,945 | ||||||||
Percent of company owned by holders of acquired company | 48% | ||||||||
Issued in merger (in shares) | 52,008,316 | ||||||||
Stock Consideration (Fair Value of Shares of Magnite common stock) | $ 274,604 | ||||||||
Stock options exchanged pre-acquisition | 10,400 | ||||||||
Restricted stock units exchanged pre-acquisition | $ 1,200 | ||||||||
Common stock, acceleration (in shares) | 90,629 | ||||||||
Acceleration of single trigger equity awards, converted | $ 1,168 | ||||||||
Stock options exchanged post-acquisition | 4,700 | ||||||||
Restricted stock units exchanged post-acquisition | 12,200 | ||||||||
Net operating loss, federal | 126,100 | ||||||||
Net operating loss, state | 87,600 | ||||||||
Post merger revenue | 60,100 | ||||||||
Purchase consideration | 287,418 | ||||||||
Deferred tax liability | 2,267 | ||||||||
Goodwill | $ 150,755 | ||||||||
SpotX, Inc. | |||||||||
Business Acquisition [Line Items] | |||||||||
Issued in merger (in shares) | 12,374,315 | 14,000,000 | |||||||
Stock Consideration (Fair Value of Shares of Magnite common stock) | $ 495,591 | ||||||||
Merger, acquisition, and restructuring costs | 27,900 | ||||||||
Cash Consideration | $ 640,000 | $ 560,000 | |||||||
Cash consideration, elected increase, percent | 20% | ||||||||
Cash consideration, elected increase, amount | $ 80,000 | ||||||||
Shares issued, elected decrease, percent | 20% | ||||||||
Shares issued, elected decrease, value | $ 80,000 | ||||||||
Share Price (in USD per share) | $ 40.05 | $ 49.21 | |||||||
Purchase price prior to working capital adjustments | $ 1,100,000 | ||||||||
Working capital adjustment | 65,152 | ||||||||
Purchase consideration | 1,200,743 | ||||||||
Increase (decrease) in valuation allowance | (56,200) | ||||||||
Finite-lived intangible assets acquired | 429,600 | ||||||||
Deferred tax liability | 103,039 | ||||||||
Goodwill | $ 782,719 | ||||||||
SpotX, Inc. | Technology | |||||||||
Business Acquisition [Line Items] | |||||||||
Estimated useful life | 5 years | ||||||||
Finite-lived intangible assets acquired | $ 280,400 | ||||||||
SpotX, Inc. | Non-compete agreements | |||||||||
Business Acquisition [Line Items] | |||||||||
Estimated useful life | 1 year | ||||||||
Finite-lived intangible assets acquired | $ 1,500 | ||||||||
SpringServe | |||||||||
Business Acquisition [Line Items] | |||||||||
Cash Consideration | 31,136 | ||||||||
Purchase price held back to cover possible indemnification claims | 1,400 | ||||||||
Deferred tax liability | 6,154 | ||||||||
Goodwill | $ 24,156 | ||||||||
SpringServe | Technology | |||||||||
Business Acquisition [Line Items] | |||||||||
Estimated useful life | 5 years | ||||||||
Finite-lived intangible assets acquired | $ 15,500 | ||||||||
SpringServe | Non-compete agreements | |||||||||
Business Acquisition [Line Items] | |||||||||
Estimated useful life | 2 years | ||||||||
Finite-lived intangible assets acquired | $ 500 | ||||||||
Nth Party | |||||||||
Business Acquisition [Line Items] | |||||||||
Purchase consideration | $ 9,000 | ||||||||
Deferred tax liability | 1,300 | 1,300 | |||||||
Goodwill | $ 4,800 | $ 4,800 | |||||||
Nth Party | Technology | |||||||||
Business Acquisition [Line Items] | |||||||||
Estimated useful life | 5 years | ||||||||
Finite-lived intangible assets acquired | $ 5,400 | ||||||||
Nth Party | Non-compete agreements | |||||||||
Business Acquisition [Line Items] | |||||||||
Finite-lived intangible assets acquired | $ 200 | ||||||||
SpotX Acquisition, SpringServe Acquisition, and Telaria Merger | |||||||||
Business Acquisition [Line Items] | |||||||||
Merger, acquisition, and restructuring costs | $ 17,600 |
Business Combinations - Telaria
Business Combinations - Telaria Purchase Consideration (Details) - Telaria $ in Thousands | Apr. 01, 2020 USD ($) |
Business Acquisition [Line Items] | |
Stock Consideration (Fair Value of Shares of Magnite common stock) | $ 274,604 |
Fair value of stock-based awards exchanged | 11,646 |
Acceleration of single trigger equity awards, converted | 1,168 |
Total purchase consideration | $ 287,418 |
Business Combinations - Telar_2
Business Combinations - Telaria Schedule of Recognized Identified Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Apr. 01, 2020 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 978,217 | $ 969,873 | $ 158,125 | |
Telaria | ||||
Business Acquisition [Line Items] | ||||
Cash and cash equivalents | $ 51,848 | |||
Accounts receivable, net | 150,924 | |||
Prepaid expenses and other current assets | 3,054 | |||
Property and equipment, net | 1,814 | |||
Right-of-use lease asset | 26,627 | |||
Intangible assets | 103,410 | |||
Restricted cash | 2,747 | |||
Other assets, non-current | 369 | |||
Deferred tax assets, non-current | 103 | |||
Goodwill | 150,755 | |||
Total assets acquired | 491,651 | |||
Accounts payable and accrued expenses | 172,751 | |||
Lease liabilities - current portion | 5,322 | |||
Deferred revenue | 11 | |||
Other current liabilities | 365 | |||
Lease liabilities - non-current portion | 23,323 | |||
Other liabilities, non-current | 194 | |||
Deferred tax liability | 2,267 | |||
Total liabilities assumed | 204,233 | |||
Total purchase price | $ 287,418 |
Business Combinations - Telar_3
Business Combinations - Telaria Components of Intangible Assets and Estimated Useful Lives, Telaria Merger (Details) - Telaria $ in Thousands | Apr. 01, 2020 USD ($) project |
Business Acquisition [Line Items] | |
Finite-lived intangible assets | $ 103,410 |
Developed technology | |
Business Acquisition [Line Items] | |
Finite-lived intangible assets | $ 58,000 |
Estimated Useful Life | 5 years |
In-process research and development | |
Business Acquisition [Line Items] | |
Finite-lived intangible assets | $ 8,030 |
Estimated Useful Life | 4 years 8 months 12 days |
Number of projects | project | 2 |
Customer relationships | |
Business Acquisition [Line Items] | |
Finite-lived intangible assets | $ 36,300 |
Estimated Useful Life | 2 years 6 months |
Backlog | |
Business Acquisition [Line Items] | |
Finite-lived intangible assets | $ 880 |
Estimated Useful Life | 9 months |
Trademarks | |
Business Acquisition [Line Items] | |
Finite-lived intangible assets | $ 200 |
Estimated Useful Life | 3 months |
Business Combinations - Telar_4
Business Combinations - Telaria Pro Forma Information (Details) - Telaria $ in Thousands | 12 Months Ended |
Dec. 31, 2020 USD ($) | |
Business Acquisition [Line Items] | |
Pro Forma Revenue | $ 236,666 |
Pro Forma Net Loss | $ (64,030) |
Business Combinations - SpotX P
Business Combinations - SpotX Purchase Consideration (Details) - SpotX, Inc. - USD ($) $ in Thousands | Apr. 30, 2021 | Feb. 04, 2021 |
Business Acquisition [Line Items] | ||
Cash Consideration | $ 640,000 | $ 560,000 |
Stock Consideration (Fair Value of Shares of Magnite common stock) | 495,591 | |
Working capital adjustment | 65,152 | |
Total purchase consideration | $ 1,200,743 |
Business Combinations - SpotX S
Business Combinations - SpotX Schedule of Recognized Identified Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Apr. 30, 2021 | Dec. 31, 2020 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 978,217 | $ 969,873 | $ 158,125 | |
SpotX, Inc. | ||||
Business Acquisition [Line Items] | ||||
Cash and cash equivalents | $ 81,967 | |||
Restricted cash | 199 | |||
Accounts receivable, net | 199,649 | |||
Prepaid expenses and other current assets | 12,308 | |||
Fixed assets | 6,823 | |||
Intangible assets | 429,600 | |||
Right-of-use lease asset | 10,055 | |||
Goodwill | 782,719 | |||
Total assets acquired | 1,523,320 | |||
Accounts payable and accrued expenses | 205,822 | |||
Other current liabilities | 1,091 | |||
Lease liabilities | 12,625 | |||
Deferred tax liability | 103,039 | |||
Total liabilities assumed | 322,577 | |||
Total purchase price | $ 1,200,743 |
Business Combinations - SpotX C
Business Combinations - SpotX Components of Intangible Assets and Estimated Useful Life (Details) $ in Thousands | 1 Months Ended | ||
Jul. 01, 2021 USD ($) | Apr. 30, 2021 USD ($) project | Dec. 31, 2021 | |
Business Acquisition [Line Items] | |||
Finite-lived intangible assets acquired | $ 23,400 | ||
Non-compete agreements | |||
Business Acquisition [Line Items] | |||
Estimated Useful Life | 2 years | ||
SpotX, Inc. | |||
Business Acquisition [Line Items] | |||
Finite-lived intangible assets acquired | $ 429,600 | ||
SpotX, Inc. | Technology | |||
Business Acquisition [Line Items] | |||
Finite-lived intangible assets acquired | $ 280,400 | ||
Estimated Useful Life | 5 years | ||
SpotX, Inc. | Customer relationships | |||
Business Acquisition [Line Items] | |||
Finite-lived intangible assets acquired | $ 130,300 | ||
SpotX, Inc. | Customer relationships | Minimum | |||
Business Acquisition [Line Items] | |||
Estimated Useful Life | 2 years | ||
SpotX, Inc. | Customer relationships | Maximum | |||
Business Acquisition [Line Items] | |||
Estimated Useful Life | 4 years | ||
SpotX, Inc. | Backlog | |||
Business Acquisition [Line Items] | |||
Finite-lived intangible assets acquired | $ 11,100 | ||
Estimated Useful Life | 1 year | ||
SpotX, Inc. | In-process research and development | |||
Business Acquisition [Line Items] | |||
Finite-lived intangible assets acquired | $ 5,800 | ||
Estimated Useful Life | 3 years | ||
Number of projects | project | 6 | ||
SpotX, Inc. | Non-compete agreements | |||
Business Acquisition [Line Items] | |||
Finite-lived intangible assets acquired | $ 1,500 | ||
Estimated Useful Life | 1 year | ||
SpotX, Inc. | Trademarks | |||
Business Acquisition [Line Items] | |||
Finite-lived intangible assets acquired | $ 500 | ||
Estimated Useful Life | 1 year |
Business Combinations - SpringS
Business Combinations - SpringServe Purchase Consideration (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Jul. 01, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Business Acquisition [Line Items] | ||||
Indemnification claims - holdback | $ 2,293 | $ 1,602 | $ 0 | |
SpringServe | ||||
Business Acquisition [Line Items] | ||||
Cash Consideration | $ 31,136 | |||
SpotX initial cash investment in SpringServe | 2,075 | |||
Fair value appreciation of SpotX purchase right | 7,450 | |||
Indemnification claims - holdback | 1,409 | |||
Total purchase consideration | $ 42,070 |
Business Combinations - Sprin_2
Business Combinations - SpringServe Schedule of Recognized Identified Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Jul. 01, 2021 | Dec. 31, 2020 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 978,217 | $ 969,873 | $ 158,125 | |
SpringServe | ||||
Business Acquisition [Line Items] | ||||
Cash and cash equivalents | $ 1,062 | |||
Accounts receivable, net | 3,234 | |||
Prepaid expenses and other current assets | 157 | |||
Property and equipment, net | 25 | |||
Intangible assets | 23,400 | |||
Right-of-use lease asset | 1,879 | |||
Goodwill | 24,156 | |||
Total assets acquired | 53,913 | |||
Accounts payable and accrued expenses | 2,475 | |||
Other current liabilities | 35 | |||
Lease liabilities | 3,179 | |||
Deferred tax liability | 6,154 | |||
Total liabilities assumed | 11,843 | |||
Total purchase price | $ 42,070 |
Business Combinations - Sprin_3
Business Combinations - SpringServe Components of Intangible Assets and Estimated Useful Life (Details) $ in Thousands | 1 Months Ended | |
Jul. 01, 2021 USD ($) project | Dec. 31, 2021 | |
Business Acquisition [Line Items] | ||
Finite-lived intangible assets acquired | $ 23,400 | |
Non-compete agreements | ||
Business Acquisition [Line Items] | ||
Estimated Useful Life | 2 years | |
SpringServe | Technology | ||
Business Acquisition [Line Items] | ||
Finite-lived intangible assets acquired | $ 15,500 | |
Estimated Useful Life | 5 years | |
SpringServe | Customer relationships | ||
Business Acquisition [Line Items] | ||
Finite-lived intangible assets acquired | $ 5,700 | |
Estimated Useful Life | 2 years | |
SpringServe | Trademarks and Trade Names | ||
Business Acquisition [Line Items] | ||
Finite-lived intangible assets acquired | $ 900 | |
Estimated Useful Life | 3 years | |
SpringServe | In-process research and development | ||
Business Acquisition [Line Items] | ||
Finite-lived intangible assets acquired | $ 800 | |
Estimated Useful Life | 3 years | |
Number of projects | project | 2 | |
SpringServe | Non-compete agreements | ||
Business Acquisition [Line Items] | ||
Finite-lived intangible assets acquired | $ 500 | |
Estimated Useful Life | 2 years |
Business Combinations - SpotX a
Business Combinations - SpotX and SpringServe Pro Forma Information (Details) - SpotX and SpringServe - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Business Acquisition [Line Items] | ||
Pro Forma Revenue | $ 540,466 | $ 400,039 |
Pro Forma Net Loss | $ (86,621) | $ (156,638) |
Business Combinations - Carbon
Business Combinations - Carbon (Details) - USD ($) $ in Thousands | 1 Months Ended | ||||
Jul. 01, 2021 | Feb. 28, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2020 | |
Business Acquisition [Line Items] | |||||
Finite-lived intangible assets acquired | $ 23,400 | ||||
Goodwill | $ 969,873 | $ 978,217 | $ 158,125 | ||
Non-compete agreements | |||||
Business Acquisition [Line Items] | |||||
Estimated Useful Life | 2 years | ||||
Carbon (AI) Limited and Mode Technologies, Inc. | |||||
Business Acquisition [Line Items] | |||||
Purchase consideration | $ 23,100 | ||||
Business Combination, Contingent Consideration, Liability | 2,300 | ||||
Goodwill | 8,500 | ||||
Carbon (AI) Limited and Mode Technologies, Inc. | Technology | |||||
Business Acquisition [Line Items] | |||||
Finite-lived intangible assets acquired | $ 14,200 | ||||
Estimated Useful Life | 5 years | ||||
Carbon (AI) Limited and Mode Technologies, Inc. | Non-compete agreements | |||||
Business Acquisition [Line Items] | |||||
Finite-lived intangible assets acquired | $ 200 | ||||
Estimated Useful Life | 2 years | ||||
Carbon (AI) Limited and Mode Technologies, Inc. | Customer relationships | |||||
Business Acquisition [Line Items] | |||||
Finite-lived intangible assets acquired | $ 200 | ||||
Estimated Useful Life | 6 months |
Accounts Payable and Accrued _3
Accounts Payable and Accrued Expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Payables and Accruals [Abstract] | ||
Accounts payable—seller | $ 1,057,556 | $ 971,220 |
Accounts payable—trade | 19,387 | 11,904 |
Accrued employee-related payables | 15,065 | 16,230 |
Accrued holdback - indemnification claims | 2,313 | 1,602 |
Total | $ 1,094,321 | $ 1,000,956 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Loss - Schedule of Components of Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning Balance | $ 880,757 | $ 381,613 | $ 111,936 |
Other comprehensive loss | (1,775) | (419) | (912) |
Ending Balance | 791,298 | 880,757 | 381,613 |
Accumulated Other Comprehensive Loss | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning Balance | (1,376) | (957) | (45) |
Other comprehensive loss | (1,775) | (419) | (912) |
Ending Balance | $ (3,151) | $ (1,376) | $ (957) |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) - shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares available for grant (in shares) | 13,926,252 | ||
Evergreen annual % increase | 5% | ||
Stock Option | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 4 years | ||
Award vesting rights, percentage | 25% | ||
Stock Option | Tranche One | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 1 year | ||
RSAs and RSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting rights, percentage | 25% | ||
RSAs and RSUs | Tranche One | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 1 year | ||
Restricted Stock Units (RSUs) | Tranche Two | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting rights, percentage | 50% | 50% | |
RSUs granted (in shares) | 700,000 | 400,000 | 700,000 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Options Outstanding (Details) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) $ / shares shares | |
Shares Under Option | |
Beginning balance (in shares) | shares | 5,129 |
Granted (in shares) | shares | 699 |
Exercised (in shares) | shares | (613) |
Expired (in shares) | shares | (418) |
Forfeited (in shares) | shares | (125) |
Ending balance (in shares) | shares | 4,672 |
Exercisable (in shares) | shares | 3,593 |
Weighted- Average Exercise Price | |
Beginning balance (in USD per share) | $ / shares | $ 7.25 |
Granted (in USD per share) | $ / shares | 13.90 |
Exercised (in USD per share) | $ / shares | 3.64 |
Expired (in USD per share) | $ / shares | 5.84 |
Forfeited (in USD per share) | $ / shares | 12.14 |
Ending balance (in USD per share) | $ / shares | 8.71 |
Exercisable (in USD per share) | $ / shares | $ 7 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | |
Weighted-Average Contractual Life, Outstanding | 5 years 7 months 6 days |
Weighted-Average Contractual Life, Exercisable | 4 years 8 months 12 days |
Aggregate Intrinsic Value, Outstanding | $ | $ 19,676 |
Aggregate Intrinsic Value, Exercisable | $ | $ 18,005 |
Stock-Based Compensation - St_2
Stock-Based Compensation - Stock Options Narrative (Details) $ / shares in Units, $ in Millions | 12 Months Ended |
Dec. 31, 2022 USD ($) $ / shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Intrinsic values of options exercised | $ 5.1 |
Unrecognized employee stock-based compensation | 8.4 |
Fair value of options vested in period | $ 5.4 |
Weighted average grant date fair value (usd per share) | $ / shares | $ 8.93 |
Stock Option | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized stock-based compensation, period for recognition | 2 years 4 months 24 days |
Unvested restricted stock units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized stock-based compensation, period for recognition | 2 years 8 months 12 days |
Share-based payment award, aggregate intrinsic value, vested | $ 37 |
Weighted-average grant date fair value of units granted (in USD per share) | $ / shares | $ 12.69 |
Intrinsic value of nonvested unit | $ 105.7 |
Unrecognized employee stock-based compensation | $ 123.4 |
Stock-Based Compensation - Valu
Stock-Based Compensation - Valuation Assumptions (Details) - Stock Option | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term (in years) | 5 years | 5 years | 6 years 3 months 18 days |
Risk-free interest rate | 1.63% | 0.88% | 0.45% |
Expected volatility | 79% | 79% | 67% |
Dividend yield | 0% | 0% | 0% |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock Units Activity (Details) - Restricted Stock Units (RSUs) | 12 Months Ended |
Dec. 31, 2022 $ / shares shares | |
Number of Shares | |
Beginning balance (in shares) | 6,634,000 |
Granted (in shares) | 8,322,000 |
Canceled (in shares) | (1,680,000) |
Vested and released (in shares) | (3,276,000) |
Ending balance (in shares) | 10,000,000 |
Restricted stock units outstanding and unvested (in shares) | 9,982,000 |
Vested but deferred (in shares) | 18,436 |
Weighted-Average Grant Date Fair Value | |
Beginning balance (in USD per share) | $ / shares | $ 18.39 |
Granted (in USD per share) | $ / shares | 12.69 |
Canceled (in USD per share) | $ / shares | 15.71 |
Vested (in USD per share) | $ / shares | 15.43 |
Ending balance (in USD per share) | $ / shares | 15.06 |
Restricted stock units outstanding and unvested (in USD per share) | $ / shares | $ 15.08 |
Stock-Based Compensation - Re_2
Stock-Based Compensation - Restricted Stock Units Narrative (Details) - Restricted Stock Units (RSUs) $ / shares in Units, $ in Millions | 12 Months Ended |
Dec. 31, 2022 USD ($) $ / shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Weighted-average grant date fair value of units granted (in USD per share) | $ / shares | $ 12.69 |
Intrinsic value of nonvested unit | $ 105.7 |
Unrecognized employee stock-based compensation | $ 123.4 |
Unrecognized stock-based compensation, period for recognition | 2 years 8 months 12 days |
Stock-Based Compensation - Perf
Stock-Based Compensation - Performance Stock Units Narrative (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | |||||
Feb. 28, 2022 USD ($) $ / shares shares | Aug. 31, 2021 USD ($) project $ / shares shares | Apr. 30, 2021 USD ($) $ / shares shares | Apr. 30, 2020 USD ($) $ / shares shares | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Stock-based compensation expense | $ 64,118 | $ 40,735 | $ 28,491 | ||||
Performance Shares Units | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Stock-based compensation expense | $ 3,400 | $ 1,400 | $ 200 | ||||
Performance measurement percentage | 100% | 100% | |||||
Performance Shares, Granted April 2020 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Performance measurement percentage | 116% | 150% | 150% | ||||
Performance shares, Granted April 2021 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Performance measurement percentage | 0% | 0% | |||||
Performance shares, Granted February 2022 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Performance measurement percentage | 81% | ||||||
Chief Executive Officer | Performance Shares Units | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Granted (in shares) | shares | 86,806 | 379,635 | 26,291 | 146,341 | |||
Fair value of restricted stock | $ 1,500 | $ 1,400 | $ 900 | ||||
Vested (in USD per share) | $ / shares | $ 17.28 | $ 52.49 | $ 6.15 | ||||
Trailing consecutive trading day performance period | project | 60 | ||||||
Vesting period | 3 years | ||||||
Chief Executive Officer | Performance Shares Units | Tranche One | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Unrecognized employee stock-based compensation | $ 1,700 | ||||||
Unrecognized stock-based compensation, period for recognition | 1 year 8 months 12 days | ||||||
Vesting, stock price trigger (in USD per share) | $ / shares | $ 60 | ||||||
Fair value of units granted | $ 3,000 | ||||||
Weighted-average grant date fair value of units granted (in USD per share) | $ / shares | $ 23.94 | ||||||
Chief Executive Officer | Performance Shares Units | Tranche Two | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Unrecognized employee stock-based compensation | $ 1,800 | ||||||
Unrecognized stock-based compensation, period for recognition | 2 years 8 months 12 days | ||||||
Vesting, stock price trigger (in USD per share) | $ / shares | $ 80 | ||||||
Fair value of units granted | $ 2,800 | ||||||
Weighted-average grant date fair value of units granted (in USD per share) | $ / shares | $ 21.93 | ||||||
Chief Executive Officer | Performance Shares Units | Tranche Three | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Unrecognized employee stock-based compensation | $ 1,900 | ||||||
Unrecognized stock-based compensation, period for recognition | 3 years 8 months 12 days | ||||||
Vesting, stock price trigger (in USD per share) | $ / shares | $ 100 | ||||||
Fair value of units granted | $ 2,600 | ||||||
Weighted-average grant date fair value of units granted (in USD per share) | $ / shares | $ 20.30 | ||||||
Chief Executive Officer | Performance Shares Units | Minimum | Third anniversary of grant date | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award vesting rights, percentage | 0% | ||||||
Chief Executive Officer | Performance Shares Units | Minimum | Tranche One | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award vesting rights, percentage | 0% | ||||||
Chief Executive Officer | Performance Shares Units | Minimum | Tranche Two | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award vesting rights, percentage | 0% | ||||||
Chief Executive Officer | Performance Shares Units | Minimum | Tranche Three | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award vesting rights, percentage | 0% | ||||||
Chief Executive Officer | Performance Shares Units | Maximum | Third anniversary of grant date | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award vesting rights, percentage | 150% | ||||||
Chief Executive Officer | Performance Shares Units | Maximum | Tranche One | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award vesting rights, percentage | 100% | ||||||
Chief Executive Officer | Performance Shares Units | Maximum | Tranche Two | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award vesting rights, percentage | 100% | ||||||
Chief Executive Officer | Performance Shares Units | Maximum | Tranche Three | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award vesting rights, percentage | 100% | ||||||
Chief Executive Officer | Performance Shares, Granted April 2020 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Unrecognized employee stock-based compensation | $ 100 | ||||||
Unrecognized stock-based compensation, period for recognition | 3 months 18 days | ||||||
Chief Executive Officer | Performance shares, Granted April 2021 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Unrecognized employee stock-based compensation | $ 600 | ||||||
Unrecognized stock-based compensation, period for recognition | 1 year 3 months 18 days | ||||||
Chief Executive Officer | Performance shares, Granted February 2022 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Unrecognized employee stock-based compensation | $ 1,000 | ||||||
Unrecognized stock-based compensation, period for recognition | 2 years 1 month 6 days |
Stock-Based Compensation - Empl
Stock-Based Compensation - Employee Stock Purchase Plan Narrative (Details) - shares | 1 Months Ended | 12 Months Ended |
Nov. 30, 2013 | Dec. 31, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares available for grant (in shares) | 13,926,252 | |
Evergreen annual % increase | 5% | |
ESPP shares | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Evergreen annual % increase | 1% | |
ESPP shares | 2014 Employee Stock Purchase Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Maximum employee subscription rate | 10% | |
Offering period | 6 months | |
Purchase price of common stock, percent | 85% | |
Number of shares available for grant (in shares) | 3,829,518 |
Stock-Based Compensation - St_3
Stock-Based Compensation - Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Stock-based compensation expense | $ 64,118 | $ 40,735 | $ 28,491 |
Cost of revenue | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Stock-based compensation expense | 1,666 | 792 | 525 |
Sales and marketing | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Stock-based compensation expense | 21,558 | 15,718 | 8,229 |
Technology and development | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Stock-based compensation expense | 19,961 | 11,857 | 7,451 |
General and administrative | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Stock-based compensation expense | 18,929 | 11,297 | 10,416 |
Merger, acquisition, and restructuring costs | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Stock-based compensation expense | $ 2,004 | $ 1,071 | $ 1,870 |
Stock-Based Compensation - St_4
Stock-Based Compensation - Stock-Based Compensation Expense Narrative (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-Based Payment Arrangement [Abstract] | |||
Tax expense (benefit) | $ 6,400,000 | ||
Tax benefit realized related to awards vested or exercised | $ 9,600,000 | $ 40,500,000 | |
Tax benefit on stock-based compensation expense | $ 151,600,000 | $ 0 |
Merger, Acquisition, and Rest_3
Merger, Acquisition, and Restructuring Costs - Merger and Restructuring Cost Activity (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Restructuring Cost and Reserve [Line Items] | |||
Professional Service (investment banking advisory, legal and other professional services) | $ 917 | $ 28,422 | $ 9,935 |
Non-cash stock-based compensation (double-trigger acceleration and severance) | 2,004 | 1,071 | 1,870 |
Impairment costs of abandoned technology | 3,320 | 0 | 0 |
Total merger, acquisition, and restructuring costs | 7,468 | 38,177 | 17,552 |
Personnel related (severance and one-time termination benefit costs) | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | 1,227 | 6,184 | 5,747 |
Loss contracts (lease related) | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | $ 0 | $ 2,500 | $ 0 |
Merger, Acquisition, and Rest_4
Merger, Acquisition, and Restructuring Costs - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Restructuring Cost and Reserve [Line Items] | ||||
Merger, acquisition, and restructuring costs | $ 7,468 | $ 38,177 | $ 17,552 | |
Accrued restructuring related to the merger | 1,222 | 2,742 | 2,935 | $ 0 |
SpotX Acquisition, SpringServe Acquisition, and Telaria Merger | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Merger, acquisition, and restructuring costs | $ 17,600 | |||
Accrued restructuring related to the merger | $ 1,200 | $ 2,700 |
Merger, Acquisition, and Rest_5
Merger, Acquisition, and Restructuring Costs - Accrued Merger and Restructuring Cost Activity (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Restructuring Reserve [Roll Forward] | |||
Accrued merger. acquisition, and restructuring costs at beginning of period | $ 2,742 | $ 2,935 | $ 0 |
Restructuring costs (personnel related and non-cash stock-based compensation) | 3,231 | 7,255 | 7,617 |
Restructuring activity, merger and acquisition loss contracts | 0 | 2,500 | 3,543 |
Restructuring activity, impairments | 3,320 | 0 | 0 |
Cash paid for restructuring costs | (2,747) | (6,377) | (6,355) |
Non-cash loss contracts (lease related) | 0 | (2,500) | 0 |
Non-cash impairments | (3,320) | 0 | 0 |
Non-cash stock-based compensation | (2,004) | (1,071) | (1,870) |
Accrued merger, acquisition, and restructuring costs at end of period | $ 1,222 | $ 2,742 | $ 2,935 |
Income Taxes - Income before In
Income Taxes - Income before Income Tax, Domestic and Foreign (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |||
Domestic | $ (145,480) | $ (105,168) | $ (57,253) |
International | 9,883 | 10,180 | 4,514 |
Loss before income taxes | $ (135,597) | $ (94,988) | $ (52,739) |
Income Taxes - Components of In
Income Taxes - Components of Income Tax Expense (Benefit) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Current: | |||
Federal | $ (186) | $ 128 | $ (144) |
State | 1,056 | 1,515 | 15 |
Foreign | 2,735 | 2,275 | 1,117 |
Total current provision | 3,605 | 3,918 | 988 |
Deferred: | |||
Federal | (2,039) | (89,404) | 9 |
State | (6,324) | (8,296) | (12) |
Foreign | (516) | (1,271) | (292) |
Total deferred benefit | (8,879) | (98,971) | (295) |
Total provision (benefit) for income taxes | $ (5,274) | $ (95,053) | $ 693 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Operating Loss Carryforwards [Line Items] | |||
Net deferred tax liability | $ 2,694 | $ 11,496 | |
Increase (decrease) in valuation allowance | 20,700 | (53,900) | $ 16,400 |
Unremitted earnings of the subsidiaries outside of the United States | 38,900 | ||
Provisional transition tax | 6,100 | ||
Deferred income tax liabilities, net | |||
Operating Loss Carryforwards [Line Items] | |||
Net deferred tax liability | 5,100 | 13,300 | |
Other assets, non-current | |||
Operating Loss Carryforwards [Line Items] | |||
Net deferred tax liability | 2,400 | $ 1,800 | |
Research Tax Credit Carryforward | |||
Operating Loss Carryforwards [Line Items] | |||
Tax credit carryforwards | 3,700 | ||
Domestic Tax Authority | |||
Operating Loss Carryforwards [Line Items] | |||
Operating loss carryforwards | 403,700 | ||
State and Local Jurisdiction | |||
Operating Loss Carryforwards [Line Items] | |||
Operating loss carryforwards | 256,600 | ||
State and Local Jurisdiction | Research Tax Credit Carryforward | |||
Operating Loss Carryforwards [Line Items] | |||
Tax credit carryforwards | 9,900 | ||
Foreign Tax Authority | |||
Operating Loss Carryforwards [Line Items] | |||
Operating loss carryforwards | $ 27,700 |
Income Taxes - Effective Income
Income Taxes - Effective Income Tax Rate Reconciliation (Details) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |||
U.S. federal statutory income tax rate | 21% | 21% | 21% |
State income taxes, net of federal benefit | 3.10% | 5.60% | (0.20%) |
Foreign loss at other than U.S. rates | (0.10%) | (0.50%) | (0.50%) |
Stock-based compensation expense | (2.40%) | 31.70% | 11.40% |
Meals and entertainment | (0.10%) | (0.10%) | (0.10%) |
Other permanent items | (0.70%) | (1.60%) | (1.10%) |
Change in valuation allowance | (15.50%) | 58% | (19.50%) |
Sec 162(m) officers compensation | (4.10%) | (14.20%) | (12.70%) |
Provision to return adjustments | 0.30% | 0.20% | 0.40% |
Research and development tax credits | 2.50% | 0% | 0% |
Foreign withholding taxes | (0.10%) | 0% | 0% |
Effective income tax rate | 3.90% | 100.10% | (1.30%) |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Deferred Tax Assets: | ||
Accrued liabilities | $ 1,308 | $ 1,208 |
Lease liabilities | 15,679 | 18,499 |
Stock-based compensation | 4,830 | 5,573 |
Net operating loss carryovers | 111,587 | 131,509 |
Tax credit carryovers | 9,131 | 5,308 |
Other | 2,460 | 1,555 |
Total deferred tax assets | 144,995 | 163,652 |
Less valuation allowance | (76,772) | (56,049) |
Deferred tax assets, net of valuation allowance | 68,223 | 107,603 |
Deferred Tax Liabilities: | ||
Fixed assets | (2,132) | (2,059) |
Intangible assets | (56,022) | (101,477) |
Right of use lease asset | (12,763) | (15,563) |
Total deferred tax liabilities | (70,917) | (119,099) |
Net deferred tax assets (liability) | $ (2,694) | $ (11,496) |
Income Taxes - Unrecognized Tax
Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Reconciliation of Unrecognized Tax [Roll Forward] | ||
Beginning balance | $ 3,715 | $ 3,214 |
Increases related to current year tax positions | 398 | 200 |
Decreases related to prior year tax positions | (634) | (41) |
Increases related to prior year tax positions | 772 | 342 |
Ending balance | $ 4,251 | $ 3,715 |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Lessee, Lease, Description [Line Items] | |||
Remaining lease term | 5 years 7 months 6 days | 6 years 3 months 18 days | |
Discount rate | 6.11% | 5.09% | |
Operating lease expense | $ 23.3 | $ 20.7 | $ 13.4 |
Short-term lease cost | 1.2 | 1.2 | 1 |
Sublease income | 5.2 | 4.4 | 3.7 |
Finance lease, liability, current | 0.3 | 0.8 | |
Finance lease, liability, noncurrent | $ 0 | $ 0.3 | |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Lease liabilities - current portion | Lease liabilities - current portion | |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Lease liabilities, non-current | Lease liabilities, non-current | |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Lease liabilities - current portion | ||
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Lease liabilities, non-current | Lease liabilities, non-current | |
Data Centers For Cloud-Based Services | |||
Lessee, Lease, Description [Line Items] | |||
Expense | $ 57.9 | $ 35.1 | $ 20.4 |
Corporate Headquarters | |||
Lessee, Lease, Description [Line Items] | |||
Operating lease not yet commenced, amount | $ 2.2 | ||
Operating lease not yet commenced, term of contract | 10 years 1 month 6 days | ||
Minimum | |||
Lessee, Lease, Description [Line Items] | |||
Term of lease contract | 1 year | ||
Maximum | |||
Lessee, Lease, Description [Line Items] | |||
Term of lease contract | 10 years |
Leases - Schedule of Lease Liab
Leases - Schedule of Lease Liability Maturities (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Fiscal Year | |
2023 | $ 25,711 |
2024 | 22,224 |
2025 | 14,466 |
2026 | 12,007 |
2027 | 7,425 |
Thereafter | 21,011 |
Total lease payments (undiscounted) | 102,844 |
Less: imputed interest | (15,341) |
Lease liabilities—total (discounted) | $ 87,503 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Non Cancelable Inventory And Other Services Purchase Commitments Member | ||
Other Commitments [Line Items] | ||
Non-cancelable purchase commitments | $ 27 | |
Financial Standby Letter of Credit | Office Lease | ||
Other Commitments [Line Items] | ||
Letters of credit outstanding, amount | $ 5.3 | $ 5.1 |
Commitments and Contingencies_2
Commitments and Contingencies - Contractual Obligations (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Other Commitments [Line Items] | |
2023 | $ 7,140 |
2024 | 6,859 |
2025 | 2,070 |
Total | $ 16,069 |
Debt - Summary of Long Term Deb
Debt - Summary of Long Term Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | ||
Total | $ 754,600 | |
Less: Current portion | (3,600) | $ (3,600) |
Debt, non-current, net of debt issuance costs | 722,757 | 720,023 |
Convertible Debt | Convertible Senior Notes | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 400,000 | 400,000 |
Less: Unamortized discount and debt issuance cost | (7,355) | (9,643) |
Total | 392,645 | 390,357 |
Secured Debt | Term Loan B Facility | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 354,600 | 358,200 |
Less: Unamortized discount and debt issuance cost | (20,888) | (24,934) |
Total | 333,712 | 333,266 |
Debt, non-current, net of debt issuance costs | $ 333,712 | $ 333,266 |
Debt - Maturities of Principle
Debt - Maturities of Principle Amount of Long Term Debt (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Debt Disclosure [Abstract] | |
2023 | $ 3,600 |
2024 | 3,600 |
2025 | 3,600 |
2026 | 403,600 |
2027 | 3,600 |
Thereafter | 336,600 |
Total | $ 754,600 |
Debt - Narrative (Details)
Debt - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Sep. 25, 2020 | |
Line of Credit Facility [Line Items] | ||||
Amortization of debt discount and issuance costs | $ 6,785 | $ 4,925 | $ 0 | |
Amortization of Debt Issuance Cost and Discount | 6,300 | 4,500 | ||
Amortization of Other Deferred Charges | $ 500 | $ 400 | ||
Revolving Credit Facility | Loan Agreement | ||||
Line of Credit Facility [Line Items] | ||||
Maximum borrowing capacity | $ 60,000 | |||
Eligible accounts receivable | 85% | |||
Revolving Credit Facility | Loan Agreement Sublimit | ||||
Line of Credit Facility [Line Items] | ||||
Maximum borrowing capacity | $ 10,000 |
Debt - Convertible Senior Notes
Debt - Convertible Senior Notes and Capped Call Transactions Narrative (Details) | 1 Months Ended | 12 Months Ended | |||
Mar. 31, 2021 USD ($) day $ / shares | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Apr. 30, 2021 USD ($) | |
Debt Instrument [Line Items] | |||||
Proceeds from Convertible Senior Notes offering | $ | $ 0 | $ 400,000,000 | $ 0 | ||
Debt issuance costs, gross | $ | $ 11,400,000 | $ 27,700,000 | |||
Convertible Senior Notes | Convertible Debt | |||||
Debt Instrument [Line Items] | |||||
Aggregate principle amount | $ | $ 400,000,000 | ||||
Interest rate | 0.25% | ||||
Over-allotment options | $ | $ 50,000,000 | ||||
Proceeds from Convertible Senior Notes offering | $ | 388,600,000 | ||||
Capped calls, transaction costs | $ | $ 39,000,000 | ||||
Percentage of outstanding balance holders able to call debt in the event of default | 25% | ||||
Conversion ratio | 0.0156539 | 0.0156539 | |||
Convertible Senior Notes | Convertible Debt | Maximum | |||||
Debt Instrument [Line Items] | |||||
Make-whole fundamental change period | 45 days | ||||
Conversion price (in USD per share) | $ / shares | $ 91.2600 | ||||
Convertible Senior Notes | Convertible Debt | Minimum | |||||
Debt Instrument [Line Items] | |||||
Make-whole fundamental change period | 20 days | ||||
Conversion price (in USD per share) | $ / shares | $ 63.8818 | ||||
Convertible Senior Notes | Convertible Debt | Conversion Term (i) | |||||
Debt Instrument [Line Items] | |||||
Threshold percentage of stock price trigger | 130% | ||||
Threshold trading days | day | 20 | ||||
Threshold consecutive trading days | day | 30 | ||||
Convertible Senior Notes | Convertible Debt | Conversion Term (ii) | |||||
Debt Instrument [Line Items] | |||||
Threshold percentage of stock price trigger | 98% | ||||
Threshold trading days | day | 5 | ||||
Threshold consecutive trading days | day | 10 | ||||
Convertible Senior Notes | Convertible Debt | Conversion Term (iv) | |||||
Debt Instrument [Line Items] | |||||
Threshold percentage of stock price trigger | 130% | ||||
Threshold trading days | day | 20 | ||||
Threshold consecutive trading days | day | 30 |
Debt - Interest Expense Related
Debt - Interest Expense Related to the Convertible Senior Notes (Details) - Convertible Senior Notes - Convertible Debt - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Debt Instrument [Line Items] | ||
Contractual interest expense | $ 1,000 | $ 786 |
Amortization of debt issuance costs | 2,288 | 1,798 |
Total interest expense | $ 3,288 | $ 2,584 |
Effective interest rate | 0.82% | 0.82% |
Debt - Amortization Expense for
Debt - Amortization Expense for Debt Issuance Costs (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Debt Issuance Costs | |
2023 | $ 2,288 |
Convertible Senior Notes | Convertible Debt | |
Debt Issuance Costs | |
2024 | 2,288 |
2025 | 2,288 |
2026 | 491 |
Total | $ 7,355 |
Debt - Credit Agreement Narrati
Debt - Credit Agreement Narrative (Details) - USD ($) | Apr. 30, 2021 | Dec. 31, 2022 | Jun. 28, 2021 | Mar. 31, 2021 |
Line of Credit Facility [Line Items] | ||||
Debt issuance costs, gross | $ 27,700,000 | $ 11,400,000 | ||
Term Loan B Facility | Secured Debt | ||||
Line of Credit Facility [Line Items] | ||||
Aggregate principle amount | $ 360,000,000 | |||
Long-term debt, term | 7 years | |||
Net proceeds | $ 325,000,000 | |||
Interest rate | 9.33% | |||
Term Loan B Facility | Secured Debt | Debt Discount | ||||
Line of Credit Facility [Line Items] | ||||
Debt issuance costs, gross | 10,800,000 | |||
Term Loan B Facility | Secured Debt | Deferred Financing Costs | ||||
Line of Credit Facility [Line Items] | ||||
Debt issuance costs, gross | $ 16,900,000 | |||
Term Loan B Facility | Secured Debt | Eurodollar | ||||
Line of Credit Facility [Line Items] | ||||
Variable interest rate | 5% | |||
Term Loan B Facility | Secured Debt | Alternate Base Rate | ||||
Line of Credit Facility [Line Items] | ||||
Variable interest rate | 4% | |||
Senior Secured Revolving Credit Facility | Revolving Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Maximum borrowing capacity | $ 52,500,000 | $ 65,000,000 | ||
Debt utilization triggering leverage ratio compliance, percent | 35% | |||
Leverage ratio maximum | 3.25 | |||
Quarterly payments of principle balance (percent) | 0.25% | |||
Aggregate annual payments of principle balance (percent) | 1% | |||
Debt instrument, maturity trigger, outstanding, period prior to maturity date | 91 days | |||
Remaining borrowing capacity | $ 59,700,000 | |||
Senior Secured Revolving Credit Facility | Revolving Credit Facility | Eurodollar | Minimum | ||||
Line of Credit Facility [Line Items] | ||||
Variable interest rate | 4.25% | |||
Senior Secured Revolving Credit Facility | Revolving Credit Facility | Eurodollar | Maximum | ||||
Line of Credit Facility [Line Items] | ||||
Variable interest rate | 4.75% | |||
Senior Secured Revolving Credit Facility | Revolving Credit Facility | Alternate Base Rate | Minimum | ||||
Line of Credit Facility [Line Items] | ||||
Variable interest rate | 3.25% | |||
Senior Secured Revolving Credit Facility | Revolving Credit Facility | Alternate Base Rate | Maximum | ||||
Line of Credit Facility [Line Items] | ||||
Variable interest rate | 3.75% | |||
Senior Secured Revolving Credit Facility | Letter of Credit | ||||
Line of Credit Facility [Line Items] | ||||
Letters of credit outstanding, amount | $ 5,300,000 | |||
Incremental Revolver | Revolving Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Increase in maximum borrowing capacity | 12,500,000 | |||
Incremental Revolver | Letter of Credit | ||||
Line of Credit Facility [Line Items] | ||||
Increase in maximum borrowing capacity | $ 5,000,000 |
Debt - Summary of Term Loan B F
Debt - Summary of Term Loan B Facility (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | ||
Debt, net of debt discounts and issuance costs | $ 722,757 | $ 720,023 |
Secured Debt | Term Loan B Facility | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 354,600 | 358,200 |
Unamortized debt discounts | (8,158) | (9,738) |
Less: Unamortized debt issuance cost | (12,730) | (15,196) |
Debt, net of debt discounts and issuance costs | $ 333,712 | $ 333,266 |
Debt - Interest Expense Relat_2
Debt - Interest Expense Related to the Term Loan B Facility (Details) - Term Loan B Facility - Secured Debt - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Debt Instrument [Line Items] | ||
Contractual interest expense | $ 24,322 | $ 14,074 |
Amortization of debt discount | 1,580 | 1,062 |
Amortization of debt issuance costs | 2,466 | 1,657 |
Total interest expense | $ 28,368 | $ 16,793 |
Debt Instrument, Interest Rate During Period | 7.95% | 7% |
Debt - Amortization Expense f_2
Debt - Amortization Expense for the Term Loan B Facility Debt Discount and Issuance Costs (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Debt Issuance Costs | ||
2023 | $ 2,288 | |
Term Loan B Facility | Secured Debt | ||
Debt Discount | ||
2023 | 1,564 | |
2024 | 1,548 | |
2025 | 1,532 | |
2026 | 1,516 | |
2027 | 1,500 | |
Thereafter | 498 | |
Total | 8,158 | $ 9,738 |
Debt Issuance Costs | ||
2023 | 2,441 | |
2024 | 2,416 | |
2025 | 2,391 | |
2026 | 2,366 | |
2026 | 2,341 | |
Thereafter | 775 | |
Total | $ 12,730 | $ 15,196 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 13, 2021 | |
Class of Stock [Line Items] | |||
Stock repurchase program, authorized amount | $ 50,000,000 | ||
Value of shares acquired | $ 15,663,000 | $ 6,007,000 | |
Share Repurchase Program | |||
Class of Stock [Line Items] | |||
Shares repurchased (in shares) | 1,592,257 | ||
Value of shares acquired | $ 21,700,000 | ||
Average cost per share acquired (in USD per share) | $ 13.61 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | 12 Months Ended | ||||
Jan. 19, 2023 | Jan. 01, 2023 | Dec. 31, 2022 | Feb. 16, 2023 | Dec. 13, 2021 | |
Subsequent Event [Line Items] | |||||
Options granted (in shares) | 699,000 | ||||
Stock repurchase program, authorized amount | $ 50,000,000 | ||||
Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Options granted (in shares) | 129,870 | ||||
Stock repurchase program, authorized amount | $ 75,000,000 | ||||
Restricted Stock Units (RSUs) | |||||
Subsequent Event [Line Items] | |||||
Equity instruments other than options granted (in shares) | 8,322,000 | ||||
Restricted Stock Units (RSUs) | Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Equity instruments other than options granted (in shares) | 6,429,784 | ||||
Vesting period | 4 years | ||||
Award vesting rights, percentage | 25% | ||||
Restricted Stock Units (RSUs) | Tranche One | Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Vesting period | 1 year | ||||
Performance Shares Units | Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Equity instruments other than options granted (in shares) | 456,092 | ||||
Performance Shares Units | Third anniversary of grant date | Minimum | Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Award vesting rights, percentage | 0% | ||||
Performance Shares Units | Third anniversary of grant date | Maximum | Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Award vesting rights, percentage | 150% | ||||
Restructuring, reduced workforce, period percentage | 6% | ||||
Stock Option | |||||
Subsequent Event [Line Items] | |||||
Vesting period | 4 years | ||||
Award vesting rights, percentage | 25% | ||||
Stock Option | Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Vesting period | 4 years | ||||
Award vesting rights, percentage | 25% | ||||
Stock Option | Tranche One | |||||
Subsequent Event [Line Items] | |||||
Vesting period | 1 year | ||||
Stock Option | Tranche One | Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Vesting period | 1 year |