MGNI - Earnings call transcript Q2 2022

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Operator

Good morning, afternoon, evening and welcome to the Magnite Second Quarter 2022 Conference Call. All participants will be in listen-only mode. [Operator instructions] After today's presentation, there will be an opportunity to ask questions. [Operator instructions] Please note this event is being recorded. I would now like to turn the conference over to Nick, Head of Investor Relations. ahead. go Please

Nick Kormeluk

and quarter operator, everyone. to Welcome Thank earnings good conference second XXXX call. Magnite's you, afternoon,

As a because July SpotX reminder, XX-Q the or XXXX not comparisons you will and SpotX XXXX were include QX but results financial acquired include for XX, April as XXXX see respectively. the results businesses SpringServe X, of SpringServe, XXXX and QX XXXX, do those reported in the April

as comparisons, the acquisitions, in we and provide of reported course Please are a we call, as associated quarterly referring year-over-year are SpringServe this with for When including in we mind the as and comparison. results results the During unaudited. order relates and make to SpotX refer the it relevant prior to estimated comparisons comments when to phrase XX-Q. SpringServe to basis SpotX pre-acquisition and we reported, referring to the forma like-to-like pro period in are keep our

being this conference As recorded. call a reminder, is

me CFO. I today Joining to presentation. our we to Relations out point slides our David like have Investor are CEO; that and today's on on website Michael financial would Day, highlight Barrett, accompany call posted the

remarks quarterly remind projected may to results, risks, and that risks, statements business. events subject these started, implied financial to quarter our estimates, relevant objectives, not other of or current statements including strategic XX-Q and and report of factors our undertake and get or cause future results our other the obligation is statements our by on including, from forward-looking to, include set different respect periodic reports known concerning and factors of These achievements with with XX-K. filed to uncertainties based We forward-looking Before and we answers second company's expectations assumptions anticipated but assumptions performance our or are impacts and future statements. forward-looking including the They will you discussion and views statements, and potential or our guarantees on are to might A performance. that and reflect macroeconomic questions actual risks. I be will the XXXX SEC, to considered prepared information no be on not unknown be materially update uncertainties forth performance that in to Form limited

revenue for of Our reported commentary metrics about Magnite. release, Relations of our detail less traffic that release provide financial including to today posted results and into costs, GAAP in non-GAAP response measures, income include and on adjusted deck between acquisition ex-TAC press will offer may per Relations our share. the found can dynamics At insights financial non-GAAP website. non-GAAP greater our the questions, Reconciliations EBITDA in is highlights to metrics or Investor earnings incremental in our your and go we be times, more to Michael, provide update advised turn to will Michael. business. in call future SEC and be one-time I you may our Please highlights encourage on nature, may reports additional that periodic access our and may we webcast of not an to this metrics. be replay over press I these website to Investor visit now today's call the or financial the learn ahead. deck, please

Michael Barrett

In in a XX% outlook. at XX%, strong QX margin year-over-year of QX what three did to you the provide deliver experience adjusted the EBITDA pleased line also the revenue EMEA with A a our Like and we we implied quarter in you, dollar to especially spending and U.S. of proved and spend communicated months I'm APAC with ago. finished progressed, U.S. and DV+ CTV the David our these not in QX immune world. business. the and will EBITDA midpoint the and expectations. overall ad of of environment, we softening guide have in In in ability in pressured the with geographies. ad detail growth trends more strong continued sector, of DV+, midpoint are Thank the we DV+ resilient guide. also as challenges achieved were others team's our into These reflected in the Nick. challenging at more rest impacts our than of to in did results greater macroeconomic

growth continues XX% business year-over-year Given CTV back half pro rates in market XX% in ex-TAC pleased optimistic are year. see stronger reported will our basis started as an QX has and we that or a are forma. quarter driver improving we even the conditions very grew our business to of the the on CTV be revenue as that growth

importantly both great have It reduces complexity, improves drives CTV SSP business sales parties, force channel. and customers multiple for specifically We server and a our in traction most enhances are the between powerful. our seeing a integration in between and ad The that programmatic SpringServe. functionality yield is ad server direct sales management incredibly inventory

We home are native TVs. which this of solution ad continuously screen the ad such tiles, as connected units into introducing new presented integrated are features on the

in these with in Vizio, TV the OEMs. quickly aggressively rely Solutions system viewers the have your market scaled operating continue CTV likes to such put The catch have digital a and will their on us great share one strengthen of as in fastest advertising Samsung growing They market, further content. as for to their years in the to position and as groups of more access to to TV continue come. LG businesses players the invest key

Solutions. with deal multi-year a announced we LG Ads quarter This

also advanced will starting connected is smart footprint, captures across available into our renewed put in streamed. made Through within built and to the whether our that targeting countries highlights household. both ACR will spans It in which programmatic as agreement, XXXX. be market viewed unlocks from linear unique and our data planning, for and Simply regardless content of valuable environments content generation. access ads streaming this frequency ACR and and both other such capabilities across data this data or is content extremely U.S. technology TVs, inventory analytics also or is management TVs their opted-in execution unique platforms. established measurement and around everything expand deal reach activation, incremental viewership, enablement. we across source, serving, and partnership, around We U.S. the LG with the LG, recognition, positioning demand will in ad which Through have the Magnite This relationship landmark have in has automatic to linear

business and in to data and infrastructure secure in GroupM footprint. scale this While inventory, our only inventory strategic protecting spent tier, mid-term valuable broader we has season, with years the data August their most continuing while their that in scale against developing relationship LG to data own to through partner leverage category November. this early election have Other scaled are growth asset. have to enhances and is drivers our CTV enablement LG's major keep us ability the accelerate to with advertising the players first-party incredibly their Magnite ad use assets supported is Disney+'s likely which of optimistic This reserved across XXXX emerge starting just opted

to well capture political as team the consortium, SSP. are Group, Broadcasting dollars provide is impressions to Group available and leading as are service Scripps Capitol exclusive others extremely billions Company, Graham a to our broadcasters Media where group Political well to We as Cox of monthly including Scripps as Media political premium the we CTV the Magnite positioned of publishers, partners advertisers. such managed

the doubled them of are have the to in volumes ad in first growth nearly for compared spend. we coming This months. of have a half request we conversion first requests these ad step and ad identified DV+ delivering to working the On year. side, higher is against key last In the driving initiatives key to year,

efficiency We lowing request. tremendous have per cost and done ad this with continuously

of independent and ability all publisher omniscale sorry, omnichannel Our is among omnichannel for serve differentiator scale is our Magnite. - our I'm to inventories key SSPs a unmatched – types

business Demand Our perform Manager well. to continues

such quarters. These very notable publisher of onboard and We Disney, a to over expected number the Time large had have recently traction as several next good wins with are Buzzfeed.

and complex optimization monetization. to publishers their lean pleased Demand for see larger and Manager of are We yield increasing and more heavily Magnite on adoption

be overall could macro the challenging. Looking our is half a ahead environment rate year, that of to the second by tempered growth

prudent we However, drivers will further and that growth support unique we investments. have that believe

on We key the talent, hire audience functionality server continue these and capabilities pieces in ad front, believe strategic need and key across new have to better business the all share identity we invest introduce the more that for market our DV+ platform, gains. We build areas. growth optimize we out CTV and

to times financial is allows to growth in pleased platform functionality integration well this deliver customers us results. that beginning progressing completed and of and strength Additionally, be year improving expected business to while investments our with in strong next even year. challenging I'm migration the continuing our balance

and call Discovery, provide done X% of Warner CTV turning Magnite M&A for investment $X.X a billion turn milestone of our With Before growth. I and last has the grown to represents revenue wanted accomplished with you Most attractive Samsung, This Brothers Vizio, model a now $X position call importantly, next I'm some many very years, of through short-term Paramount, up in the business that and incredibly over, as into more. proud the three customers from we what internal organic the we strategic comments aiming our market. market Sling David. long-term. flow two Roku, Disney, the we've the business durable cash billion DirecTV, in XXXX back revenue as have profile. In and like the company with a at combination earnings David? well the and at as built been I'll and to XX% in over Magnite transformed to step have position ex-TAC with total strategic that LG, our from and

David Day

This in our guide, benefit revenue we the diversity ex-TAC the guidance positioning our the at midpoint. EBITDA model. solid of guidance Michael. came our leverage demonstrates CTV our midpoint of revenue Thanks, in which with challenges. implied context our macroeconomic quarter TV the the within at Expenses in the lower range business of finished range. than of Overall, a and within resulted have adjusted Revenue

strong XXXX and pro an cautiously at million. Revenue for or continue million million from ex-TAC very revenue year half $XXX basis on year basis. reported $XXX a It last basis up XX% pro revenue pro QX up prior revenue up ex-TAC second while an XXXX. revenue QX results XX% X% from is grew DV+ of CTV was XX% as be on forma to ex-TAC last on look reported versus optimistic in on X% declined forma We a forma these revenue was as desktop and $XX as from pro flat Total on the were was note that a year. basis. achieved important ex-TAC growth the of X% basis. cycling Mobile year-over-year, a we million quarter ex-TAC on and up basis. $XX forma was both back to

was growth for of quarter compared up This and $XX personnel ex-TAC office revenue capitalized second of per for QX, diluted XXXX. in costs prior and to and of expenditures, in was year. On the driven mix average which quarter our SpotX. calculate expectations. quarter for to was $XXX increase sequentially was million offset million $XX primarily than expected, percentage the Adjusted $X.XX Operating utilized Total Fully by of XXXX. intangibles attributable acquisition net the delayed of a from compared lower non-GAAP decrease of increase software which earnings revenue was driven million to cloud was EBITDA as in QX result in revenue $X margin and XXXX, result lower and outstanding were XX% last $XX and CTV, was a acquisition a weighted that of million purchases we our acquisition. Our per XXXX. tax non-GAAP and the mentioned a XXXX SpotX, a an the DV+ diluted is internal million, by our $X.XX primarily same technology acquisition or and above. diluted the an Costs for XX% which per also up from $XX facilities restructuring share ago. total shares primarily including was as period margin which of weighted reported diluted in million. and second XXXX, million second mobile to QX the flow, second cost adjusted through define hiring, year-over-year XXXX. Operating period benefit GAAP $XXX period share for There continued than Net the expense $X.XX revenue adjusted as million compared over marketing grew of of CapEx in operating net of earnings second was operating of in cash in basis in for more desktop. income case XX% million in the slower $X.XX, the and basic ex-TAC earnings same same with slightly property were QX versus lower share merger loss were second sequential GAAP were compared Non-GAAP the million adjusted shares year comparison. $XX of for million due to of QX XXXX. decrease EBITDA and basis, of XX% year-over-year a This equipment XXXX margin related increases includes in versus XX%. cost EBITDA for include XXX XX% XXXX. in expenses million a decreased XXXX, revenue XX% XX% the expenses, in to use quarter, amortization average the Adjusted Capital costs CTV share to benefit XX% ex-TAC in year $XXX acquired of of of XXXX. costs for revenue, quarter SpotX by decrease for and earnings resulting both the energy less costs SpotX second million and development quarter EBITDA events. were $XX ex-TAC. of recorded line one-time quarter to EBITDA was from of income of million of XXXX the quarter the as loss $XX a in quarter we share was The compared $XX a the per Note, and $XX tax expenses

the Our we interest million $X was expense for QX, At quarter which cash roughly $X in sheet. balance million cash. $XXX the had was the million on of of end

leverage progress Regarding time X.Xx which net SpotX end as ratio, end at X.Xx our QX, was debt, of of Xx we last at goal of continued to year. to approximately the our we April the at This or further the less. towards reduce closed compared [ph] ultimate represents

approximately at December, million in million we on update repurchase in announced $XX program leaving quarter. million the an XXX,XXX As shares our for of QX, share end buyback $XX in program the $X the

RSU XXX,XXX vesting method with utilized for cover reduction. and regular between the during we our buyback for the debt withhold goal started the We a addition, In shares $X quarter, to to cover employee year balanced withholding million. taxes share approximately

future of share current plan our our repurchases shares We'll we the our to ratio. to discount use our intrinsic that buy lean expectations. accumulation with forward leverage That believe to of attractive more flexibility being to at represents maximize to now we at said, Going goal reducing value. share cash to a an price capital and continue net

and Our of broad not improvement economic end does the approach to anticipate year. guidance through is the conservative

quarter, in ex-TAC range revenue be the expect million third of million. $XXX to we the $XXX to For

of million $XX revenue expect be ex-TAC million. to CTV We in range attributable to $XX to the

We be an expect midpoint. XX% adjusted operating million million EBITDA, $XX $XX EBITDA margin adjusted at expenses to implying the to of

operating technology For driven would roughly to QX, EBITDA business. compared increase quarterly growing head counts primarily be expenses $X our increased This cost by operating expect million support adjusted QX. to increase we to currently and

expect For be the $XXX to full revenue million. year, we above ex-TAC

EBITDA, CapEx be flow. we And payment. $XXX our less a as free We in which flow We $XX cash million net generate define QX. will in expect free will we maintain approximately interest CapEx million and cash adjusted cash expectation $XX to approximately that million of be over

opportunities deliver have areas. path managing at hard growth work prudently all continuing are in We and invest to expenses the to second across we strategic while our in

Our line revenue for open and macroeconomic EBITDA with the model pressure. lower generations, Q&A. to continues driven cash even strong let's show growth flow that, With by

Operator

Our comes the begin Patil SIG, Shyam with go please now will ahead. Instructions] We session. first [Operator question-and-answer from question

Shyam Patil

over your Hey just a addition and had and of I more maybe talk a little how takes? you And outlook than the to about talked rates, which to you've and know your I CTV growth about Michael, some people of think, around market questions. growth opportunity time? see guys. XX%. continue better kind just kind bit that, have of you afternoon. in of I couple Good can puts pegged

follow-up. Just kind could have I walk of a through curious just if you And kind those. of

Michael Barrett

Yes, sure.

a the obviously level. else's, there we think a ball there and at of paused anyone crystal on table. as spend that depending off the time our market been a – been So, feeling general have that but in but I have advertising marketer taken is than with good more and general the And is is cut really budgets buyers, lot vertical, agencies

Board second is year, hope there resumption to able you get to so of into half see as And across the we that. that a late the the are be of going

And us some so confidence. that gives

about talk programmatic their direct is broadcasters folks The “competition”, like programmatic more willing CTV often large about is publishers And CTV by with partners. and our work markets we other Magnite to precisely the programmers. business really in and/or that these sales find inventory will you at these piece with sales

we well. that so certainly benefit And as from

that kind of political high it effect tide a can inventory on whole goes a that terms so very price be we the has publisher's in which at but in rising driver Tier steam team as, is big is service up in for picking our a political of the well which about talked Still rebound we're X them. managed regional and CPM, we've of a think category As seeing automotive, nice script in travel, softness the monetization.

we're the the year. So nutshell, that's for seeing second what after kind of in a

Unidentified Analyst

around Disney, get then talk expand Thank and follow-up. on you. just and that the to contract Hulu questions the time? a relationship a could is an bit and over the ability maybe quick more evergreen I just Got and I'm We if just it. economics a lot basis now, know you. of relationship wondering you and And Thank about little the

Michael Barrett

contract is classify that Yes, position feel we're the Disney. I say a partner but would I evergreen, in our terrific with

of our areas. the this relationship has into Over expanded course contract, other

Plus contract. launch and/or on really original the really there an a that Disney that as-reported Of anticipated course, wasn't of peer to factored in is wasn't

And so demand talked adopting manager. that's accretive. we Disney And about

out benefit of play there. it's kind starting going So pay see and that the market in that story to starting omnichannel now to you was are something was we to felt this dividends

So I would very of Disney, intertwined build feel very with a standpoint and say about where a heading relationship relationship. our strong from in the good technology we're continuation

Unidentified Analyst

Great. Thank you guys.

Operator

Laura with Please next comes ahead. Magnite Martin Our question go [ph].

Laura Martin

there. Hi

to stepping other whether this sort which up of Does of as you Netflix So a of Microsoft date AT&T Michael, and hands SSPs? weak in the Microsoft, been of competitor really XXXX first I'm adds feet, competitor choice a interested that's meaningful reinvigorate it my in to Xender, sort has to think question.

Michael Barrett

would I reported. that has emphasize credibility. Laura that I would add been it Microsoft’s Hey, the say But certainly hurt Yes. doesn't Netflix

I was sales That testing there. whether these not goes not of it quite a of through. through Almost that, and can what cloud than or a that capabilities, meet publishers a teams. goes needs. normal guarantees Right. is of would what have pieces publisher The insight revenue the process large their different publisher So the go technology blinding A talk have deal, don't any all through. publisher normal all

zero. from So they aren't starting

haven't RFP that a their level they ability normal would compete on to that level. proven I so really And driven say on

that in aspirations and together. resources stand comfortable to the they discount this So I as who really ultimately a to where Microsoft have silly put But doesn't be player feel be I pieces it'd space. we someone have the that think we in

Laura Martin

my is walled versus thinking. Super helpful. then open gardens one internet also strategic And other sort of macro

to whereas And internet Trade so, if the biggest to XX% abysmal internet revenue open and So growth, growth you why wall really numbers, open Why we gardens walled internet? SSD, reported revenue Are that guiding DSD. XX% open had down up Facebook search the from three X%, shift just YouTube a just reported biggest now? Desk X%, XX%, Meta earlier now? reported getting revenue Roku up growth, gardens X%

Michael Barrett

be coming able up within to Well, across make their on in data We've walled all be that like lastly, we've places, mix. data. very know, think to run garden next to and the I has to the And monopoly bring difficult and the into buys. to learning market it's it's increasing that Google many a results, it is that you a vehicles. our and now doesn't think able done in particular, other with that want And very is web. search, to table choice. content any and information in situation and in social. available wall leaned Disney as that stays as you big and create interesting in CTV a to always ad-supported done from has all garden the track relates clear something smarter they want bring I to they They video marketer, their learn buyers and able Premium very, it's to also that a like been Facebook really buy data choices to Netflix want into They spending only a their their have it what use point, Laura, their be the onto apply want and want

that so have here finding marketers, what I real first are choice, is agencies that a for think And true time choice. the you a

as bit every good getting targeting. You're

FX from certain not the And of inventory need good advertising. table them. cap are type has your from run to every buy as You held because bit getting a being someone you're you on

you And might seeing I think some be that play of so through.

Laura Martin

lot. Thanks. a Thank you appreciate IQ. letting borrow Super me your I helpful. for it

Michael Barrett

Thanks, Laura.

Operator

Jason from [ph]. comes AGI Kreyer with question Hallum next Our

Jason Kreyer

things Kreyer some DV+, are be little to alluded for about bit just think maybe you're the opportunity going guys. or differently the there. doing in Michael, a to seeing bit see little could Thanks you you Jason little bit wanted maybe that a Craig-Hallum. if you of strategic and I changes trends to more it's Magnite from and Okay, DV+? a talk

on the to a little hear more bit wanted is there. So strategy what

Michael Barrett

with Yes, we obviously, certainly huge numbers progress we're business, about global good made scale, are not DV+, be Jason do you feel don't good Listen, question. hundreds It's day. scene. in where good the the complicated put the I of we've requests we've talking to a is behind up. that want of What certainly billions that a and very I feel ad

modest seen given the we I a scale? saw there so much And been in would've just attractive think EMEA green And [indiscernible] can that it more for you go we distance the so long the shoots and headwinds in APAC. QX hadn't economic

CPMs became we've So set. I year, throughout But depressed to to with quarter got some implemented guide going the out David the built it's be kind so, and those now the Jason larger mechanics shared we're we've half that you. sample feel a quite that second results the have auction promising spreading early of into continued of that into good although, that

work on out a a team. of of here story ago. positive business anticipated from but the the it's It's than be hard us to gains, I onboarded I – longer we where SPO lot inventory. to didn't could getting group feel MDL, and think more think, I business And quarters walk slide return setting to like to don't I couple think said, more then are this good for we first about I run second. in DV+. Thanks that it's the As going we much been now, up for I With a the have felt terms that

Jason Kreyer

conference And talking cookies. it call Okay. can't a about make through without

enough first we've that's going yield deprecation guys. and than of more you data So third XX lot people beyond industry party Google, moved bit out be even a and to third-party appeal maybe answer, spent the creates party do the to time delays, not kicked that vacuum that is? of obviously deadline more has going first of we more the of little you these that once is as cookie a a going be to targeting data to about the is again, of going lot kind get a data, think mean, of how to benefit but, to feel a I think mechanism, like usage party a or talking I where but start so is

Michael Barrett

with I of their around, easy long on energy third-party unfortunately lot the dependent as and audience publishers efforts own started segments have that it's been of putting as creating third-party thinking cookies And cookies kind are button. working them to on I the are see help have just and side, think try appetite long merchandise and into the used to third-party been it's a rapid think forward- us a there going cookies, don't to. it. historically as they what you is to as buyer

they chose their look the I our Magnite LiveRamp, have data, with say of But data made for could while pushed like think company, our comfort an given helped of not and a identity could the largely business choice. still and And cetera. to the have that world deal accelerate And they take some had thriving out of never level is they and given our the use a ambitions perfectly cookies they cookies, have deal. themselves tools SSP. look LG to that envision So identity of in being space a we because our their what I think at is which do that have audience management and been deprecated. run the gone a CTV tools, lock as I that a through it or of that to LG gone gone et that world DSP They them a we ad is could could at had has the emblematic that let's and

you a in third-party are long do world, the I So, still the in I they cookie delay think as believe as Chrome the to in environment. thesis, in that just see going exist

Jason Kreyer

color appreciate Always Thank you. the Michael.

Michael Barrett

Thanks, Jason.

Operator

comes question Swanson next Matt RBC Our from Capital Markets. with

Matt Swanson

coming end If lot I where we're actually HBO, inventory into coming of touched the see Laura's together, you between here. CTV, content Netflix, and question at questions. going my pick the Disney, taking could idea for thanks to of Warner Yes, year of on was this next a this, up ad-supported and that kind on

than going talk little just and partnerships, how adapt market? come individual So to going looking how how CTV you but is might a about approach going level existing how high that could maybe more the advertisers to competition? impact then How is to ecosystem. that And inventory So at need to much to just supply thinking that's also impact? about maybe on publishers

Michael Barrett

Yes, perhaps rumors just Plus’ Max's fronts you Great think, Warner, the are think optionality. Discovery comes I I cannibalistic they spot were left they question. talking younger, is tipping is in already are products. the purposefully they Netflix Disney that just think, crossed up point loss. that going think our And I the sense hey and out of the larger coming on there more is play the we've I buyers it terms money audience it desirable, into how of are I out, being be and And to gates. to where down ergo, of to don't think that but to the harder it's year going streaming big money to reach to They that Plus’, played gain to probably market online Matt. when out in gets from, of HBO don't out going more find come that's have to and really this more are dollars.

environment. of into grab being it's are dollars are I streaming the really getting the dollars more linear up that the think pulled for

in each high see of because opposed occur are in going erosion SAM of that's also over. still of it CPM. services bottom the I fight CPMs dollars premium an kind of as think the And that expansion other premium the finite also price as I a cannibalizing to to pool its So of don't raise in terms holding to a

Matt Swanson

That's at super remarks optimism your mentioned the that's context. cautious conservatism some then And also guidance. a lot you David, about of helpful beginning then the the built into talked And we've the into prepared half. second

any just comes I on it basis, one and maybe comes, progress both you've benefit I or changes thinking And QX in through month-over-month on be around just QX? like it to trends So can tag then to assumptions like political maybe if separate how kind and could QX? anything September. it double kind if would going piece, you know noticed of those? click, of a just last helpful, And

So kind seasonality spend. political you about are the of thinking how of just

David Day

sure. unpack All few me of Yes, a right, let those.

seeing of guidance. absolutely – the is with lot uncertainty a there correct, And start of let's and kind we're that's think a lot signals. I mixed

And taken have approach so guidance. we to a conservative the

think there conservatism. that primary two of components I are

guidance environment. our for first of room deterioration does So macro the have further some

election. grow So September it highlighted does and We as on visibility for that that, this the but room into being spend side, then should have expect obviously that. will political absolutely midterm month. be October at don't not point, significant you have a political more the in we second, that significant And

taken a September, in political. indexed actually over pretty And and political conservative it. on see haven’t approach but so built on that growing we've We've some in we until

strengthening kind an dollar from perspective, bit little saw particular continued we DV+ and half second think, the impacted the of business. challenges, So of I weakening, overall continuing trend our a quarter, in of EMEA in latter I think,

And that buyers. sort Michael that a And trend. with of of highlighted kind so we're there weariness of seeing lot is

agencies, talked go. Some where big are seeing just of things about have wary is some spend of will increases, the just everyone they and sort but

just we're And I of levels. tightness, current in spending so that guess with kind feeling

Matt Swanson

time. I appreciate the

David Day

Great.

Operator

Dan The Our next question comes from Company. with Benchmark Kurnos

Dan Kurnos

just don't expansion around of sort the gave or from supply, know I sort planning you relationships, just direct you both alternative thanks. AVOD thinking the follow-up adoption programmatically what how of about sort Disney Michael acceleration means heard around TAM a those in But in than the Great, doing on what And prepare four Good Microsoft. of all I Netflix programmatic inventory in from going but talking with other, and Hulu, Netflix know question, incremental remarks and/or exactly are Disney the afternoon. on think bigger you of executable Maybe sales? about years. is direct we've rather we of

Michael Barrett

advertiser biddable in use being terms balance Dan, they look to supported, how a in mixture the will you I OG is. through if ad has the their be of kind This of think Magnite they the direct good they at amount And so talk expansion of conduct Yes. of it healthy good Hey, what you're most the question. biddable who right? because upfront that open who it's of I participants form auction, think the who can they really floors of of so and to sold auction, have we're is auction instructive the have CPM, go-to-market, is inventory to can that's against And the for not only good where And streaming what amount of tier, in are, you. very is much know is that the invite kind great So news through going price an very direct player are, run and Hulu, someone for And to inventory. drive right? that's biddable found know And highest the they to monetization. yields increase that premium not of they what an top an like header who help inventory overall auction a invite-only bidding see rise, are but don't others just the of against this utilizing and and what biddable what it help services at. sold participants where know pricing much

you kind you of so we long thousand the approach of let can go help day never portfolio them as programmatic in market. that I've a to this the true for on space. I'll further I I then utilization called out premium partners and round bring I if others all on they how that me even a and step well, can the see with first you see and think an and to, after that, get boy services appetite advertisers, And bring

running an then advertisers by sales just to traditionally called and/or big only true is television as teams. up SSP, opening advertisers direct upon not And invite auctions, an running auction auction so the are you're act that's it you a that that that that's class of not

Dan Kurnos

script the numbers. in political question's some my even than broadcasters also baked a sort have is of helpful. code around lot more is And I view more covering unique sort sort able record partnership I being Roku, your to mentioned a their XXXX. types perspective. under just in a starting you sales your a sales of terms guess is We're actually indexed know see super greater said Got going deals. is others the the expand be of and of of just them commentary a on to on political it. And That's the with desk. tech. response, to inventory if I of know you Disney But lot challenges or then And prior; now a to touch maybe those from and in part of every national one conservatism single being to unique. the of from issue ask the David,

but that, question how category? end you political either XX% much to to have amazing much What's CTV, I the grow? is order I in obviously you or the think expand of up is do guess goes early XX% how very estimate type how capturing obviously So kind the you continue and do educate a time to innings think over is, XX% to – over much if of to

Michael Barrett

but the out it comes team individuals Yes. and are located market it, where area. in play answer we've marketers the deep this question. a David's is this made agencies Great building attempt that in I'll been regionally with service embellish middle that into managed some some the and more of these have investment relationship because maybe of to all

to legacy very category and poised this able spend historically to well be And for of have so SpotX. done of new take they're advantage so

which a do folks as and them helps the with know, on through in and we relationship sometimes with a us agencies that are that as doing lot racer it's and it experience Senate DC-based to market specialized in [ph], gets greatly. political in So you a flow as dollars it bigger ground of having advertising year round,

think I we're tech standpoint. from a positioned that So well

We to but be I And think the footprint always not more targeted to challenges relationships CTV. like with that's have, you from all DMA comes in be some all can together we it now able all kind Lu, make inventory SSP with is said the inventory competing all from IP been together biggest if to along scripts. a have tech be get really you one add able of huge an scale, involved may of enough or these Hulu, service where Pluto, if to it particularly we able broadcasters meaningful. that Pluto And a bundle the with this to activate. the you of take now that's because flavor

of streaming, We good nascent folks it. much streaming have as in the to numbers, fared don't but So the in in itself, from history. you experience I if think terms streaming, there, we it's general we're XXXX Political's a and well, you nascent we can pretty benefit in really for definitely to position David as what last did or same think share the could perhaps from size extrapolate bigger. be going election that local

Dan Kurnos

add mid-single revenue. our political And that, total cycle, peak onto that to digits Yes. was its of at in presidential

So levels talked there? that upside some those certainly on if everything hit execute can and we we've about

Michael Barrett

Thanks very much. color. That's a it. great Got

Operator

Our next question comes from Stephens. Nick ahead. Zangler go with Please

Nick Zangler

are the point. It was one there in update still million improvement by to Are that? you or $X a about business? on an guys. some managed service seeing segment quarter we Hey at this How million limited $X

there? of update kind still the that's but think headwind, any I

Michael Barrett

also lagging, emerging there's furthermore, are David been definitely indexed their tending and mix if dealer back typically categories Tier improved. regional and the the to break out. Nick, business bit business now. Hey, Yes. going talked on towards specific no about regional margin in. is higher still ad in it's travels Automotive a portfolios but of take of more the advertising we're in exchange, we've bright definitely signs type X over business is question can the but travel and a other still, more not little them There's over we it's I'm that that sure not, we categories, general again automotive, give indexed two actually which versus if

well. guy the And him slag a so as and been macro. a again, it beneficiary bit a that therefore group We the the That'll political be captures of the we give that'll so has good spend therefore think of spend. freshening of there'll most the of because biggest service of and whereas be managed see

David Day

they would And actually... Yes.

Nick Zangler

then... ahead go David. And

David Day

areas the QX sequentially the they're to strongest company in Hey one of QX. growing

Nick Zangler

desktop are segment? advertisers of is more continue falling out to anything side Outside to obviously was Oh just hard of if just attracted question, just to. it specific down the year-over-year out of the it's But wow. CTV come with favor within that that segment thoughts quarter. there? by maybe Great. wondering just as this really Great. just And DV+, really on call your to macro, there then I and in we other think and forward kind advertisers the and to be growth, going I'm mobile is maybe push on

David Day

Yes. I start you... with could

Michael Barrett

Yes, to want ahead. hear David? from go You

David Day

Yes.

So look it's eMarketer MAGNA, if we low-single-digit. if on if prognosticators, at multi-year look CAGR you desktop, – you're at

for business. And got so as we've made masked what us, in it's bit DV+ by I Michael those think but improvements highlighted, the We've we a little our macro to you saw some of improvements make environment. some need

So I is generally overall comment think – your I think true.

business for XX% We is make the us won't to some be the total I progress but the major those that think it as low-single-digit continue with can have we'll over our in from opportunity take future. business. we time, DV+ growth Desktop driver share still. of of

Nick Zangler

Thank Got guys. Helpful it. you.

Operator

Our Thornton with from Securities. Matt next Truist question comes

Matt Thornton

good guys. me sneaking Thanks for for David, maybe afternoon guess I housekeeping in. one you. Hey,

something more at how but going just incremental if think You having AVOD called recently guys ago, of that helpful? there kind currency what opportunity? is, be that maybe in versus three potential services. And opportunity, then we out headwind there incremental quantify willing much risk, what merge And currency out you're with guys. starting to Michael my exposure over part Warner a on and there that you Thanks question of That's usually obviously not ways or is if standard obviously there to, Brothers, viewing to a lot of having that'd you'd as be was was called you to remarks. is think it prepared months

David Day

Sure.

stage record and get we current in and the to based U.S. our case, very foreign the input have and quantify front, on impact. – is some U.S. foreign currencies, So and currency results our budgets translated so don't translation at into companies It's easy then internationally system their a dollars.

And quantify, but typically itself so in manifests it to hard CPMs. it's a little

particular in so XX% so XX% and currency to the drops some degree. correlates to we range think And CPM or we've in seen the impact that in Europe

Michael Barrett

the Yes. Matt Warner Discovery. on

really feel service we others of ad now tempered lot Obviously have the with were was AT&T a and history they became it and part in an the or that So Discovery with Warner's. is bit when kind of team and operations Discovery and they, team tiered Xandr. Xandr about have of We of back of that But and a to good running Discovery a with Discovery+ they're long compliment family along the of free acquired working they their that there. that the the announced of obviously AppNexus fold relationship, the expansion HBO Max. launch of merger the

with vals closely we're that a and feel good even in to more partner. work position inventory opportunities, So more we

Matt Thornton

Maybe that GroupM of called relationship, the of the one kind couple different the what queue. as material? back guys size opportunities drivers launch any of and drive Thanks back would that driver of XXXX Anyway helpful. political, the those And is then than sense mean, kind as year, here helpful color help relationship that And about XXXX AVOD in the so of just some us I'll The of I guys. well? guess. general actually what's the may half in kind the biggest I drivers, jump as more be in. or That's of U.S. kind the can give be more LG, I SPO slide a ACR well – Disney+ have more the you

Michael Barrett

question, Great Yes. Matt.

I'll in as Certainly and David the let well. would think most political. chime I be seasonal opportunity discreet

drivers help with as would help more just with be – other evergreen. them not but QX, unique view and QX to QX The QX

know the you if one be varying opinion. quantify So attempt that political, or I I the have think to a most. quantify don't David, would could you

David Day

Nope, that's it.

Operator

Our with next Shweta Evercore from Khajuria ISI. comes question

Spencer Tan

Spencer Shweta. for Thanks. Tan This is on

kind of outside question quick political a had spend. Just the verticals in industry your of expectations and QX on

strength being spectrum. I is to think at travel auto pointed and you different to points of

kind are conservative vertical assumptions Thank your much. guess your so into going that for any assumptions just mix? around growth, of there I so are figures QX And underlying growth you

Michael Barrett

going handle that, to you are Sure, David?

David Day

with start Yes. that. I'll Yes,

strength we're service as and as computing pullback home seeing highlighted in highlight, particularly think garden, particularly fitness, some technology some So managed in strength team travel health you and I team. shoots some retail, auto and in in and green you mid-market and our

having third trends half continue And in deteriorate other year assuming lean those a than guidance the the particular some quarter. if over further cushion there's of our guidance last those the no and general so into in verticals from perspective, trends again

Spencer Tan

Great. much. so Thank you

Michael Barrett

Thank you.

Operator

comes Nollen Our from with next Macquarie. Tim question

Tim Nollen

from SpotX on today, was kind SpringServe that year. I'm need much. of acquisition I'm share ground is and you business, play Is that to question on your SpringServe the CTV. SpringServe gaining about linear the Thanks. over is, I've that. to an sound Do got of very status that. win that role how now? lot covered Magnite the very an to server? I Thanks you with SpringServe, made last is wondering of a curious you is tag more of the CTV what thought my to the use We've which plays it and just boost interesting And And I'm into one optimistic all – but extra wondering CTV on accounts

Michael Barrett

question. great a it's Tim, Yes.

press going wasn't will. replace goal that clear rip in goal look near-term initial SpringServe been the a release we've think is you're utilizing like I Magnite pretty all Australian Australian or with Ad as the programmatic to free uses a And server. every of the where one that very Magnite as combination of market. in for of and Take their, the the Google's GAM enviable position ad broadcasters for broadcaster their of marketplace top powering has those a Manager

case programmatic with just that for existing So to advanced functionality that's built can a bring in server that of an server ad perfect work CTV. and how wasn't ad we point enhanced really

our the had clients have. pitch it video built wasn't CTV, built have other the to FreeWheel others that for and and it wish to that's CTV inherent that be that was don't some is built even so SpringServe online CTV. comes morphed for real And for with functionalities into

see in desire. call the meantime, their services they alongside think chosen tier, plus for working the the top So us that their existing that I it, ad alongside server, optimization yield you and working providing functionality

made As their work like with powerful the server. tailor they OEMs with fast primary we're ad SpringServe ad folks the more primary you are or And to for start it's server coupled the Magnite. as even if services,

are we that to that deeply leading crushing SpringServe. team to is CTV So is SSP really evolve difficult as advantages think we the us and I think going And the to that very as start replicate. have elated with serving embedded to just I performance competitive with to within are capabilities it, Magnite provide ad the this

Tim Nollen

Great. Michael. Yes. Thanks

Michael Barrett

welcome. You're

Operator

This conference to for concludes like to the Michael remarks. over I question-and-answer the closing turn session. back would

Michael Barrett

Thank you, Jordan.

invest CTV, areas on leading We build position for in and our DV+, continue audience growth and clear and to market identity. in

return Evercore for call. of hosted of at many too Cannonball us Meetings look European supported ad poised selection Tour Thank you weathering half QX joining by alternative. an for on Virtual quarters on give York to As to RBC of DV+ travel great your our gain XXth, the last by New evening. the The year, was all York, the such September the the to virtual truest Craig-Hallum efforts. August you Xth we New in on globe XXth a political Meetings, second ahead. half again, thanks the like tomorrow. forward environment, September. a share. challenging we Xth have storm, of enter as to on that August in results but Conferences and we by Buzz – too macro tireless Benchmark the and drivers and GroupM for of year the to a spend we and of grow the the hard show you CTV Disney+ only look for around thank examples I'd you September growth are strongly We work QX Truist announcing on road and verticals at week in U.S. and talking and are Virtual huge not XXth, Investor tangible both Magniters ISI this back feel and September recently Thanks our in

Operator

Thank is you now attending today's for conference concluded. The presentation.

You may disconnect. now

Magnite (MGNI) 10 Aug 222022 Q2 Earnings call transcript