MGNI - Earnings call 3 2023

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Operator

Good afternoon, and welcome to the Magnite Third Quarter 2023 Earnings Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Nick Kormeluk of Investor Relations. Please go ahead.

Nick Kormeluk

Thank you, operator, and good afternoon, everyone. Quarter Conference Third Magnite's to XXXX Call. Earnings Welcome

is a reminder, recorded. call this As being

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

but to statements to I information that include our our started, get that be we performance objectives,; will statements, remind you and to, factors our business. including impacts be questions considered not prepared anticipated financial Before the will on remarks concerning of forward-looking including, and limited answers strategic may macroeconomic potential

statements to from by and known results, and These be reflect respect future They events other performance. unknown risks, and materially to subject different to uncertainties on results forward-looking of or that statements. actual not or estimates our are and may are cause future and performance with our implied current factors achievements projected views based expectations or guarantees assumptions

A SEC on discussion company's no with XXXX XX-Q report other filed our assumptions We and XX-K. forward-looking quarter reports periodic in uncertainties the set and risks, forth obligation risks. our report is to on the third annual XXXX or Form of undertake update statements Form including these and relevant

website. reported deck non-GAAP Relations our our our the financial commentary will for in share. measures, and posted Our that earnings income GAAP acquisition EBITDA non-GAAP press include is on including financial metrics per contribution non-GAAP be traffic and Reconciliations today can adjusted ex-TAC or highlights found Investor release costs, less and results between in

periodic highlights now I press detail the future that may SEC be we call access the may learn over insights I Magnite. provide of the times, encourage that call our not Investor Relations an to onetime may business. and of additional the of in website nature go into Please today's we financial our advised offer metrics. metrics Michael. provide release, will webcast these additional replay turn to response visit may in deck, greater At our to reports your or about to Michael. on ahead, to dynamics you update Please this be to more and questions,

Michael Barrett

Thank to QX guidance free and flow. top BB+ for report you, happy profitability Nick. exceeded strong contribution I'm our for TTV while that results total delivering line ex-TAC, and cash

over industry performed our to Moreover, contribution growth market. continue with Our business growth of in despite we we with in solidify our very in Disney+ independent XX% market We well, grow the delivering a were position execution to estimates. exceeding continue CTV. depressed leading XX% CTV, year-over-year, quarter spend growing pleased share as player ex-TAC ad as CPM the our

that Marquee and contribution approach as remember are it's believe advertisers. normal, to programmatic demand high CTV time, and early spend inventory just ad in And still their macro to our returns the of is growth and we by ramping AVOD publishers in important limited are now days shifts CTV. spend over we In growth. our will, product ad mix stabilize ex-TAC this respect,

direct The pubs sell to teams. is execute With their technology good this dynamic, deals those generally using through are refer programmatic transactions. they news to our sales

we the versus previously, inventory lower rate programmatic more business sell carries on take direct services. explained layer we've as a when and However, the

both and and majority a will be broader the CPM more team. with can't that attract scales, better environments, a data using sellers. programmatic competitive This CTV that invitable believe buyers buyers spend, using want a advanced of programmatically for their COGS as base, targeting increased significantly ad and CTV advertiser evolution will direct a We to purchase ROI executed environment, sales process

in through Magnite streaming IQ including Paramount's our quarter, combined the partnership program have Disney+ an had Paramount expansion offerings Buyers of biddable with this be we'd well that their We wins via announcing streaming Magnite. Advertising. all some customer marketplace access powering as now noteworthy to as

to by server business serve. encouraged with the enabled CTV also our integrations growth a fact We're advanced spring that in lot of ad being is the our

publisher us their As Spring puts is you relationship X platform know, step more embedded serving strategy. a closer ad a to monetization becomes central creates and workflow client the deeply technology within the our serve stickier with in and overall

far of The CTV in than is model. development stickiness software typical different we provide the SSP a and

I'll clients growth their These shown the XX%. working of as gardens. of this spend And relationship continually world are small the nearly owner by with using a our workflow part for and We with media is sold business every expanded clearly campaigns. U.S. of result streamer company outside directly and market-leading both a is above and vertically share, started One have media growing in their us horizontally. ad scale us, offer examples. X that

expanded biddable programmatic has partner uses countries SSP. the our services platforms to us access that through Now demand streaming to now and to Magnite additional other

a in OEM is started with ad market-leading example incremental well a CTV demand SSP serving. TV as of as source to products. engine tiles revenue us us use now new as Another They and that their our

These their also utilize capabilities our partner our top to we do its examples and are have so that as sell businesses and same both in CTV the on our shown package properties grow through direct partners first-party and which data leverages partners, ways common our audience services. audience This its continually extension. across they

with Accelerated supply curated on make our the me often publisher are driven positioned macro spend I'll turnaround. particularly we Despite few uniquely our on believe Consolidated QX a margins. largely the marketplaces. our more just touch by a briefly things start platform agency leads supply and capitalize to most enhance conditions, soft on XXXX. to to inevitable path market exclusive we that and partners, in optimization excited for other

line. Clear

and tool expect off the is functionality continued features adoption. buy-side quarters, additional launched coming a to for start recently and and planned Our strong with we momentum

dollars and innovation enormous our across TV capture that SpringServe, built tools, Magnite Disney+ platforms. linear audience to and streaming aren't in ad a of ecosystem, you CTV recall, currently planned If proportion server, the ClearLine TAM is

products new existing works innovative Disney+ our the focus across every With us, our customer CTV offering behind with can publisher Magnite and omnichannel on supporting CTV landscape. integration although we expansion, and new platform unrivaled exclusively and now

We new and and existing entrants in have opportunities CTV. business our tremendous markets capture fast-growing to like dynamic grow

In summary, there is a to lot excited about. be

strategic Our our our better I've our partners. business, our customers people, to about grow and and long never ability felt position term.

work investments it's hard right to the made and have deliver. put and heads our We down, time

great best we at being an do. growth market portion when We by to inflects are in a and the what outsized position capture executing of it

on David? David turn details the financials. for I'll that, With the over call to more

David Day

ranges. for from Total million, $XXX ex-TAC $XX up was up million, from X% contribution of down X% XXXX. Michael. QX CTV revenue Contribution million, $XX year. end was exceeded last was Thanks, guidance from X%. ex-TAC QX of contribution $XX was $XXX our of the million XX% compared an Both million million Disney+ increase year. high $XX to these ex-TAC . or last

ex-TAC doctors weaker services outpaced overall vertical mix contribution U.S. performing Our strikes. performing a Disney+ XX% XX% retail, to categories by our results and rider for volume strongest and Geographically, QX perspective, was publisher our international CTV, XX% results mobile growth. business entertainment while led financial desktop. our related and wins category our and media From travel included new was with

shift. impacted the CTV was in contribution managed negatively expected service softness ex-TAC by mix and by

Disney+ CTV with ex-TAC contribution comps quarter. to reminder, tough area results last political X%. be QX negatively of growth in year impacted a continued roughly the from XX% by As an strength,

offer publishers are We demand that to excited of to continue launch in key programmatic and Disney+, allowing ad target the native native innovate with formats across formats.

better We expect bring products to that their publishers to to Disney+ to enable continue monetize our new supply. will

which Operating third third to consolidation. our the $XXX this of expenses accelerated $XXX period amortization for the platform operating cost quarter resulting quarter year Total million includes year. includes revenue for the the $X from of in expenses, last same the final million, million were noncash similar

to and XX% net the loss for for $XX as Adjusted increase EBITDA data $XX was expenses. third as Adjusted $XX Adjusted guidance was year-over-year quarter $XX EBITDA The quarter from of for of adjusted and resulted of million loss higher for the of was quarter operating midpoint compared center million. year our quarter. bandwidth EBITDA the $XX EBITDA range. was operating million. third a higher well Net at million XXXX million margin payroll-related the the expense last costs was expense

calculate share was the last adjusted diluted as basic a for of to third Please of $X.XX $X.XX quarter quarter earnings $X.XX third EBITDA compared note, share margin year. of we reported percentage in of and per for loss XXXX contribution third XXXX for quarter of GAAP a Non-GAAP the loss $X.XX ex-TAC. XXXX. was the to compared

of basic share QX non-GAAP XXXX. with earnings results million utilized third to shares share for reconciliations were outstanding per average and diluted XXX non-GAAP the earnings income XXX press included per million average The for the quarter. weighted third are quarter for non-GAAP our release. shares There diluted Fully were and weighted

of capitalized flow, for million quarter. we both development software Operating the and was costs $XX quarter. the define million EBITDA CapEx, cash including for $X expenditures, property purchases as and Capital which adjusted internal less equipment were use

Our was net interest expense million. for quarter the $X

third and in using in million cash, purchased of we value a face the XX%. quarter, resulting discount notes in million During $XX $XX of retired convertible our

par to value note million, convertible $XXX through $XXX convertible balance million approximately total our was million. from quarter reducing Our $XXX repurchased notes total third debt the

debt. shares the remaining have program convertible for million We either $XX under common current our repurchase of or

an the increase of Our target reached $XXX balance initial end with cash QX leverage from net We're million last QX. less of end million, our at pleased at than was Xx quarter. X.Xx end $XXX the very at that we the of of

QX. free We cash seasonal flow expect generate in to increased significantly

high-level continue now to of use We and thoughts some debt evaluate our for and I'll expectations share will quarter cash share for fourth to it reduction XXXX. as the the best relates our repurchases.

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

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

reminder, of roughly X% headwind a political create As XXXX. a QX in comps

of contribution Disney+ to range ex-TAC to be million. expect attributable in the $XX to We million $XX

million, midpoint. margin QX million of adjusted EBITDA adjusted expenses which to EBITDA the for expect $XX approximately XX% between be implies We $XX operating and at

cash particularly be EBITDA we growth margin ad to including growth, range, points to spend property, flow free expect growth, of contribution in XXX and digits of high software. grow double-digit even ahead percentage the with and adjusted expansion Looking CTV and to with grow CapEx single XX high basis higher than adjusted in million XXXX, total in equipment total the continued ex-TAC Disney+, -- CTV, mid-$XX this EBITDA growth faster plant in to digits capitalized to level at of revenue strong

shift uncertainty It's better our than our the expectations. performance worth environment, from guidance particular, the for the reflects the quarter Overall, potential I'm Mideast macro noting was impact company's in conflict. some third that in the mix that we've the negative to that revenue even to especially of pleased macro strong able with we've current with and such the continue soft generate cash a been experiencing, flows. impact CTV been

maturity flows over greater As will spend CTV a also of to to year, of XX% market past I'm ad continue. well [ our expand CTV achieved ad ratio in our their those we'll closing result that initial than of partner retire that this gap relationships, net revenue target growth ]. confident before continue outstanding and and to spend I'm growth leverage our our X.Xx converts our cash able growth. CTV share the confident with leading we're

We opportunities uniquely for capabilities the With Q&A. SSP. our are independent continue leverage and the significant as us, open we to leading line of have let's to that, omnichannel ahead positioned

Operator

with Jason Craig-Hallum. Instructions] [Operator question first Kreyer Our from comes

Jason Kreyer

to talk evolution for the you evolves how step just maybe seems connected and and that that what the from on programmatic transaction of kind dominating biddable -- the model TV today you the how curious And Can into be just maybe of execution environment you the industry? migrates spend on road? just that see back of what that a about more more as think

Michael Barrett

that plus at ago, Yes, et be very, that publishers would question. services, top Yes. look stages. market. none talking advertisers. it's the you method want in We're today, that advertisers on whole not Great surprising and about . And broadcasters, Sure, guys very them sold them the early with CTV-first those highly the their our CTV in it's platform bigger if we direct the they players. they've of talking are And to to existence linear that that now that the leading X of I Jason. here's we're the working services mean right cetera, not legacy to continue advertisers. looked years revenue surprising the are were specialized at Magnite how they'll types their

look we're at some think can see, I you a services to been with see Hulu. starting that and it take around time, have for

because use largely may want they just You're that to buy see to biddable use starting more to just targeting side. and from sell openness they the buyers be data want more audience the this coming occur and are to not definition wanting that the side, to

have occurring hundred addition, the you converting that to of of we've we more missed that think over big automated, But in that just with data I couple broadcast really that all do to do do to this to So targeting is the really environments. advertisers a CTV, if advertisers, cohort more picture. believe do of advanced about desire biddable

coming this that And functionality and And picture is be find with to a a the very they're to predominantly social out always biddable going hire types now, the a They're features are on them. coming large the to these people going and to advertisers shoppable increasing Advertisers a right broadcaster. the to from you're find be advanced the and direct sales that they're big want going targeting with that going and call new right? to ads to they're environment, not to, of advertisers go are environment. in, find the team XX,XXX performing you're going going And in targeting video that hyper advertise environments. and that that to

kinds into So are all over ideal time they're play there. programmatic be we as cetera, already of contracts that's et programmatic ideally for in a fill is will is comes feel the sports gaps where And if ad to programmatic though suited time, streamed, beautifully. environment, most sports outs of those lastly,

XX perfectly that to be It's winner side going maturation we're one using to in future. Disney+ a the of to not-too-distant they're for SSPs. the exception, we're it's business. accustomed positioned the CTV of you're going think really more see be With the a the going much months, and not take think in that we environment programmatic to So where position. that we in

Jason Kreyer

color wanted QX, I managed been impacted follow that See how going the any on with that, just has of progressed by along how to on that on perhaps on. just any I that then And are up if spend strikes some QX? through you some there's that's service. indications in going can give if of maybe think

pressure And be spend I'm category that so if that curious that, if to that will could in signs any alleviated? continue there's or

Michael Barrett

impervious anticipated surprises headwinds. say would. would there. behaving say, bit I'll Jason, but weaker that we're general, Yes. the thought to similar, let into than as citing macro David for. QX And would only in not give we a I It's it no we a I Managed going a had services company QX that's

And so service David, have share. if I an . know, details not any more to managed you is there. don't outlier

David Day

. important very a right. cautious I that's in what's think approach we've And guidance stabilized. No, is It's to take QX. for our tried

Operator

with next Susquehanna. The is Shyam question Patil from

Shyam Patil

I had a questions. couple of

and next just about a see scenario? CTV be You of be think, that year prepared remarks, potentially how when with some just enabling little applying, the might CTV and . And your talked new you strikes little about then that upside potentially kind factor faster those products, you guys growth Can high talked Michael, any follow-up, growth for new contributing bit as CTV. year launched offerings. And for maybe then you I Newtec the And about talk about in than what timing Can you revenue. a to well? just in the just TD+s, there? Hollywood specifics next impacting low single-digit CTV growing bit a on talk would platform double-digit start

Michael Barrett

the first, that's throughout be latter out think about sure. to, able No, CTV. upside XXXX talk we'll Yes. the roll innovation I'll Yes, to occurring. some the I let and related of David take factors

of with theme think going is. mean you're I SpringServe ad tighter to streaming the see Magnet programmatic is stitching a I the that general server the platform

do on of about not and visibility and CTV a to be to of more that perspective want same little giving because clients have that's would in would We just but you lead I like, or margin and goal, background think so a them and forth. discussion, we the profile for a making more of big will a multiple helpful better would time look this a our year that keeping just basis. I sure. David, helpful have aesthetic is financial that like XXXX don't about what QX thought certainly perhaps for talk of And be talk little our share to of what be monetization would our the set end -- certainly guidance use quarterly XXXX. for think, that's some of in..? Yes, a we around And harmonious of it publishers, be experience is as to degree client developments everyone would XXXX both look yes, we'll just lag. next for XXXX from level. thinking for the on user, We're in higher We our what super confidence our But it abreast

in guidance so modest presidential macro our around that the certainly And our caution revenue reflects in caution with XXXX year. mind, service expectations from business, managed the

I longer be the And upside a about upside rate around, could some perspective, think higher There so channels in from that as from presidential more take well. dollars CTV. certainly, if is macro certainly CTV election the our tail, of into turns

approach cost structure. with just So around overall, a take very visibility tried we've giving to some focus a cautious on our

Operator

Dan the kurnos The next with Benchmark question X.X Company. from Comas is

Daniel Kurnos

Trade the and ad know integration saw release Open Pass server the sort Yahoo! bunch in most. with streams about SSP tighter of you Michael, talked we their the stitching take and through that press of spend that to sort addition you I of spring SSP Desk winner solution. mean, of a with talking of -- serve I you full about the with kind time DSP

that that. I kind pursuing gain want a it like Freewheel has but of more feels to deals? direct you It know feels what kind to of of on golden process been And handcuffs kind talking in give a behind maybe or Is an call thought a the through sort integrations. share those it you're color bit of little And like can -- about? opportunity I way, so economics

Michael Barrett

great not it regulatory obviously, I a mean, thought huge we it's was Yes, a trend. development.

to publishers with the possible equivalent. to the product plug really in of wanting world, that like that Disney+ there into open makes adapter be multiple a path DSPs publishers it direct to CTV type Some able get an isn't prebid in the to

saw publisher of in in those SpringServe enable world, with SpringServe. there opportunity because to connections we so connections an CTV through its And the every use major out to --

Pass So to we direct retain have kind of Trade someone that their the normal clients and the be should are noted that economics header spend pipe. prebid the able have the through of pipe we that increased post only seen largest the Open connection some a efficacy direct bidder. channel through It of while their of DSPs Desk like pitch and with

think So we this all publishers. our is that accretive for

same and are take to the winner for of I most. this capture publishers been connect doesn't are to that -- help able to part be publishers wanted of if revenue explained that economics. At retain revenue to budgets And it's Our yes, our that think, the the publisher into and delighted because these in us be out our so we with these we the of different to kind Dan, they're is this fashion, dollars marketers access kind going time, different them. DSP

of with a that or by is publishers when SSPs. become think to the majority a to auction our where be clients for head going as a in they run Even And we're be position the things terrific to vast XX SSPs progresses. invite-only need to an run we of walk biddable auction. world to X X.X going not bidding You're unified see able

Daniel Kurnos

share the curious planning of Got both of just in that given to helpful. U.S. some of international I EMEA. there sequentially points mean here? kind and conflicts ground and the of out it. ex about I'm kind grow kind kind I XX from is macro some tricky continuing data the And there. That's how suggests And But took seeds thinking know of you're guys right now you out there's

Michael Barrett

Yes. I specifics, in some over is the there London. on team David I'll let just And the of talk week, fire to but was last and

marketplace. we that some comps terms merger there way in. depressed when into it, of -- post the that pricing. and And at X CPM was SpotX. of war given several you its definitely Some through in we playing market quite now Magnit we're of with that Ukraine in look in kind years was . But Italia, worked Rubicon It the has we're a invested now of neither system

seeing this else know these that take there. market. And you Rubicon if legacy toolkit being you're thinness to now so have David, team able think new I I why And to in acceleration have explains of largely their to add? don't you out an success anything

David Day

We've it. a covered couple there. up opened in some nice an office over initiatives. you've in think progress office of specific an took reseller We I from opened Nordics. We've seeing in A India. the We're Sweden.

have greater So we're and excited modest should also about that investments future. the globally in making payoffs we're some

Operator

with The Martin question comes from Laura next Needham.

Laura Martin

chart my chart net levered favorite my years, chart leverage in this favorite is gone from X where X.X. is to you've So Xx --

you and delevering? you're you net is, Are Or like tell your going of you Can leverage then want you hit at stop Are use leverage, your the in do for are low here? you're -- X Xx. to to the know now you going times capital my leverage? I aiming question me to to keep going do sort for, early stay of how shares. X you what under that buy here goal that being to So

David Day

it Yes, -- think excited yes, Laura, goal. initial great. that is We're to I super achieve

the new be in Xx economic think Xx. current I environment, the might

do cost to I of don't benefit Xx. some there. that debt a lower somewhat. have . think We capital aspirations, There's benefit I think necessarily so to out And have we having some

have to it in we'll lower that urgency we won't the that some the same think had -- it to I So degree, past. continue but we've around be won't

Laura Martin

to have it I but helpful. of take super XX X. That's going into more, And sort I'm Okay.

were weak. for media -- upfronts my companies. So traditional really

is to the Evernote as question. you have this it to weak to I'm and so And money Amazon that ads your you frees for much wondering a to guys good it commit option an upfront where going up people on, didn't and more is I'm that as didn't upfront what into commit because tie much scatter in

know, Amazon, X, for bad to away willingness, you January that since didn't So Amazon Does against that as X questions. $X month your of that share you sort is you? Is sort extra on related, of consumer for adding X to going but those is a log So that take ads have Or start ask really want pays not that. you? good an things the sort of aren't guarded, I from a to

Michael Barrett

Yes.

on and net advertisers the for dollars that that a at first spot think probably upfronts be assumption market. they from the one, the have withholding a streaming having dollars their in So marketplace, benefit That normal go committed leisure, Magnite. for they would in I the in to can

the wasn't upfront reserving I folks think that what to because the not loss dollars seeing dollars you're of was having commit is necessarily folks it macros. spot, or

it spot is across between I distinction with bad upfront upfront said, streaming a big presentations upfront I a think front board. good that lousy being So it's center blur. programmatically, was all to in That the very and such starting role think the for being that

macro a let's that spend out plays the when from standpoint. how So in see back engine just ad kicks

longer just another think environment you for is having to And of look but are time at the in mass global dollars But to music spend with do NBC fought a think whole or going a dollars this going service that, they're can't you ears. -- Universal. come those I that successful world, market muted is like generally to Amazon I at AVOD those the a that an for. Disney Ad it without out in possible The be nothing be here an Paramount ad having our speaking, or slightly good it's this expense if at that firstly peer frame, in there Magnite. idea scale

like of exactly an in it's sales to Amazon So they we're their standpoint work longer share fine. when it. on help completely get be we from reach ad the us. an to partners think isn't distribute take Disney able term, and them programming out And to Amazon, able that we're for them with monetize going a

So margins can work with we on the Amazon.

Operator

Nick The Zangler next from question with Stephens. comes

Nicholas Zangler

upside Good to see quarter. the for the

last And as to managed you -- points called premium quarter, it in for soft and guide guess, CTV curious in shift pointed I XQ. same the order. X%. called the XQ, you on down you Curious think the I Are XQ, in spend pressure mix to for service about it these pressure out And got same as was Just services, Yes. that points? you is again on that out order?

think I Yes.

midpoint in of mean, in actual down X% versus I you in mentioned, it's as guide, let -- . The -- to I think out. interesting I QX we're -- so X% QX a call QX our to CTV an down first me think it's QX. dynamic in

take in QX If actually out impact and in a from QX. XXXX, the comps X% we political impact you had X% a

down And up those CTV X% X% in out, a in the actually from an so of QX adjusted goes growth sort if to QX. factor you

David Day

taking kind of comp In an QX on apples-to-apples basis. out that

think and masked, a about order think, as And drivers so far I actual we're business. I And little the are of all bit -- same accurate. yes, think acceleration in that drivers, the those comps I the as of growth fairly the seeing CTV that in

Nicholas Zangler

going you relief just to general, Hulu so expected. Disney it Comcast, forward? pretty that Got might as imagine And gets obviously, Disney, maybe benefit but and see doesn't by it. to fully much any goes a could was this in Hulu then to I'd in point go brought Helpful. that you

Michael Barrett

of globally, Hulu the again, and of large brand information the to business the But the right. family. than Great. have the Yes, that it Nick, there's I with could but my I there anticipated it's possibly HulU idea inside opportunity. think and it that a bundling upside a more having to conjecture. And relates fo this presenting service that properties . huge as I could think you're it's lead as footprint Disney opportunities ad it's the that to usual is extension in We more stay that extend other just Disney, no and --

Operator

from with Evercore is ISI. Shweta question next The Khajuria

Shweta Khajuria

Okay.

that for Let what this me we Is What try X between the macro, should and spend ad think you flection revenue would be? what's drive out for gap you there narrower? gives what going that that a narrow help outside Michael, all And looking would that is confidence inflection. to else gap? of be please. equal, could Michael, think drive you point do that

Michael Barrett

Yes.

I product macro more enrollment as this definitely as first will we be buy. be media more think had normal There'd wouldn't a OEMs plans spend I shift mix that just said, lot the of Because nearly a CTV want publications, native on diversified. in quarter be especially last plays of kind severe environment kind to

that X use they programmatic sold direct by than, And the services. of different product plus a say,

So much much -- data more to agency our so publishers a when is do But that at about it from every and macro a with spoke much think more so to much down, us, they're I spending targeting an can and environment the In biddable, spoke sure. more cloud programmatic. an standpoint desire universally more bring helps do for I dollar think it's that intention. to partners and buyer

buyers that's the cloud probably think And near I future. not-too-distant in in think supply and go short the in it's whether the to that's of that around. dollars are inflection so I an again, market that, point, where -- lot just And a have

Shweta Khajuria

you follow If be me that's on why let would seeing that. the today? up that Sorry, happening not case,

Michael Barrett

And of upfronts you Well, paucity keep in because just the that are strikes. now being content right? of mind, placed, this have

of now. it's think terms right kind again, dollars lot challenge, another of but of macro those are in pause on -- a I So

executed So but home them really be to programmatically, put to talked they've been not to in about there's any programmatically. execute

I the So part lag, that's sense, think that, . if that sure. of makes

Operator

is next with RBC Capital question The Matt from Swanson Markets.

Matthew Swanson

take framework quite in us 'XX? that help growth CTV bit But about you're on can touches of you the a kind around rates about thinking your FY I what just I when guidance guess here. think of assumptions are kind we've -- point heard for 'XX

it Does trying that think strong. change? assume remains the lower? with no Like, variable of growth, and higher volume to that assume we're it really X is Does it as which model kind assumed of

Michael Barrett

you David? Do that, want handle to

David Day

these No, it continue expect these very mix the we're growth shifts we in I some assumes, Yes. of channels. robust sure. premium again, think to -- seeing Yes, that

the And take ad as average, overall so But growth somewhat. I rates decline spend will an think is significant. rate of

lead a and We as the us see year, us -- presidential see then we -- into get we to and Disney+,and end as is mid with something particularly was behind than in mid-single single as through to as the Year? the see And higher that you'll earlier, the average -- kind words, growth to, XXXX as see so guided and CTV great we we other momentum will double-digit of to probably -- our growth low XXXX, CTV in In double-digit is you'll comps mentioned there. move growth digits, low CTV. the high Next

Matthew Swanson

I revenue know margins, say on giving those then to that's when adjusted pointed EBITDA the the out helpful. that you Yes, numbers. specifically at context And you're

always think other You there ends investment revenue us growth just see expected? go of better think you'd to leverage? like if line. to a to to kind Like of you drop to that straight that? Or little leverage get we the Can than a that to up help deliver you upside top are after should bunch do expect opportunities bit and lot of a seem being that about

David Day

that we that to most model. is of would drop and all we're we you'll embedded few have I investments I make. bottom the that margin greater think a the this making in line. that we top But on need, see you'll line There think more important investments the see growth, if a are

we other the call out I'd thing I to -- and think is quarter. mentioned think like last briefly I it

almost points XXX lot in profile in it's you But that we our as basis of has that cost margin will have QX, a QX. actually important year. value a company see whole us. event We lower next but event also We're of plus. in together And $X super of represents margins That bringing a million at onetime look the -- it. it will for

so that And we do onetime event.

core future. in lower the we'll growth seeing think than the even rates the business, what so we're top flow-through have still we nice at line And

Operator

Day is from Dan Riley FBR. B. The next question with

Daniel Paul Day

we're you the especially made this point got there. point I product Yes, a Michael, sports. back XXXX accelerator to like ESPN potential live tipping earlier wanted live there, to I at it come feels out -- on direct-to-consumer agree, you've sports

in revenue active how wondering you Just the XXXX. business much whether Or the that's be driver pipeline new is at immaterial? today can how and business piece there. think that for of a significant all a of

Michael Barrett

a In now little contributor. think question. of right Because There's no bit that one, piping of disconnect XXXX, right? services be a environment. -- available yet aren't just into we programmatic a will dollars it the it's There's all made the tricky between a

an pace DSPs wants spend is time million about you you're on If X generally no they try way of think not work, period balance it, the over they right, off million the $X to day firing so and X. speaking, that one campaigns campaign, to $X a

of a spread to a time. huge period Saturday over miss it's spike And opportunity. . Sports and right? that want if afternoon, on You different, the is you gone. It's completely

that there's is everyone tweaking work work of to better. the making algorithms at but work So have it hard

think just you pull soon, will that see I'm your sports saying, watch X if programming hair we a billboard what streaming, you're consumer here,you're you from to says, going understand more return out. experience, yo I you to

it's yes, So think I a opportunity. huge

to publisher publisher areas openness premium much because I where it a with standpoint much programmatic so from just more think a of it's X those sense. standpoint, there's makes from engage

Daniel Paul Day

Disney+ minorDBP the strength or -- pulse on a go with now? post bodies. Disney+ just And Yes, side? happening that David. CPMs right Is there, mostly the What's or it's then minus just the volume-driven? plus it XX% on another ahead, growth, X all is

David Day

Yes. the going are You're still say same depressed. to thing. CPMs

the it's . volume so And side. on

Daniel Kurnos

Okay.

growth by . yes. offset So a than the what's volume price, better on going -- maintenance CPM on lower that's

Operator

with question next Tim from is Macquarie. Nollat$an The

Tim Nollen

advance, I little joined a late. call apologize I bit the in

been. manager most news already curious question the Disney about about but this this orders. So automated campaign server have for was others I I wasn't hope of answered insertion my using its ad own

you I'm us role just remind playing is could -- what curious, you with your Disney. if are

side the maybe way? as is in targeting audiences, that you that like Disney negative for Disney anyway. its not server, and doing Disney remind us game if any And it got you're if is the to of So ad terms lastly, you've Can its somewhere of pushes that's ESPN you in being seems just own the you kind Disney+, your SSP on point, that uses Hulu, got for Plus. somehow if what wide, campaign using own course, of you've local manager

know could a there. you points it's kind of So of in me. for lot I I just clarify hope

Michael Barrett

Yes. is of is and and Tim, some good degree question. I fact But simple terms the talking I'll server, in out yourselves and economics. the of participate If spring touch it spring can answer restrictions speaking, about it. the the the that ad it's delivered ad kind unless don't server with to serve, generally it's working campaign of even Disney by for right? if those serve, us it's publish in directly, of a we

publish will directly, it's deal. yourselves it That's Now a interact. programmatic but deal we when a

in Magnit within programmatically done role that. is has Empire, anything Disney the if a so And

That's a oftentimes managed a where multiple that's our get It's business car referring kind direct dealer, But step local about they with focused have of dollars, talking talking to kind the what our to of not service our but to region necessarily probably just purview you're that self-service you talking launched anyway, more sold, locations try what were Tier local to I a a those is beyond think about upon. local, tool X a like you're right? car you're and we're isn't refer in about business. the dealer they

efforts . necessarily in not it's so And of our area. that cannibalistic advertising

Tim Nollen

it's hoping something you effort, to going were that local of That's so thing. not more was is Okay. a say I it's really your

question, this X you in But discussed free I'm about news but Freewheel. asked, already this this you remarks. was sorry, already integrating ask with I several ago again, weeks and -- prepared news Could related and wheel Okay. the if this more

might if with other just provide advances a could integrated not you're chipping wheel, overtake bit of if more any way, kind serve into give color the publishers of I'm you to curious getting a away color spring but you more free bit on you more at a of just I could in making terms businesses? bit us their please? going on know business in that, some be kind

Michael Barrett

yes. Dysyr og yhr

platform ad for was to Tim, that quite success we So alternative to and an using with born and and a state-of-the-art an programmatic uptake. with terrific of for -- bit streaming publishers talked replacement about had born that state-of-the-art was streaming. a ideas provide and the it's server as with it's tools -- and

fell was that be wheel just helps to a piece wheel a wanted you extra stitching you ad So bit to It it. Fre you as programmatic there your if Magnet to used for free server, your wheel publisher, of together connection clue publisher free created efforts of a use little used that that the on a were workload.

lift with a Magnite wheel a choose programmatic not already uses allows having what dealing free the as that you're kind is to publisher with Now for to to integrated. integration that use partner seamless just of finger their because it's

standpoint, spring Magnite a because it using Certainly, that are marketplaces hopes them ad about access creating that. that are gives serve from server. the we have these for buyers streaming on high buyer not publishers a So be may all that excited to

great the talking a it it's deal to both for some them think hoop and we're been with companies. time . we get able happy yes, So We've quite for to

Operator

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

Michael Barrett

work you, solid host our thank you we both well team in their how upcoming positioned tomorrow. we're share strong I investor our to growing built working that we Thank our know for meetings delivering more ahead. to post-QX We will many results, and would quarter. partners look deliver and. DBS. to hard financial Debbie. that the with to tech, at lies growth the really building diligent the CTV effort of like We Macquarie like remain speaking required for I another at prepare Magnite vigorously with and events. forward all business

XX. York And XXth We'll November a busy on in Conference RBC Macquarie Stephens be on the schedule the Nashville XX. conference Sydney and Craig-Hallum November. have International We XX on in New York the the Conference XX, XX on Conference conference in of the November, November attending and and November in in New

Conference Meeting the We participating in New in York November on at in X an participating marketing will we New New January and will Thank and you be in York Research XX. further a Tour hosting great be our be on on EWY will XX, Wolf Nick the December have December Evercore XX. San Bus on in office Conference evening. out, and joining, York little a in Needham for Francisco And again

Operator

for today's attending you presentation. Thank

You may disconnect. now

Magnite (MGNI) 8 Nov 232023 Q3 Earnings call transcript