rubi-20200810
0001595974FALSE00015959742020-08-102020-08-10

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________
FORM 8-K
__________________

CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934

August 10, 2020
Date of Report (Date of earliest event reported)
__________________
MAGNITE, INC.
(Exact name of registrant as specified in its charter)
 __________________
Delaware
001-36384
20-8881738
(State or other jurisdiction of incorporation)
(Commission File Number)
(IRS Employer Identification No.)
12181 Bluff Creek Drive, 4th Floor
Los Angeles, CA 90094
(Address of principal executive offices, including zip code)
(310) 207-0272
(Registrant’s telephone number, including area code)
Not applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name on each exchange on which registered
Common stock, par value $0.00001 per shareMGNINasdaq Global Select Market
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company  
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  





Item 2.02. Results of Operations and Financial Condition.
        On August 10, 2020, Magnite, Inc., or the Company, issued a press release announcing financial results for its fiscal quarter ended June 30, 2020. The full text of the press release issued in connection with the announcement is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
        The information in this Form 8-K (including Exhibit 99.1) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.

Item 9.01. Financial Statements and Exhibits.

(d)Exhibits
The following exhibit relating to Item 2.02 shall be deemed to be furnished, and not filed:
 
Exhibit NumberDescription
99.1




SIGNATURE
        Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
  THE RUBICON PROJECT, INC.
Date:August 10, 2020  By:/s/ David Day
  David Day
  Chief Financial Officer


Document

Exhibit 99.1
 
Magnite Reports Second Quarter 2020 Results
CTV Revenue Grew 12% Year over Year
Revenue Growth Accelerating in Q3 - Most Significantly in CTV
LOS ANGELES, California – August 10, 2020 – Magnite, Inc. (Nasdaq: MGNI), the largest independent sell-side advertising platform, today reported its results of operations for the second quarter ended June 30, 2020. With the Rubicon Project and Telaria merger closing on April 1, 2020, second quarter 2020 financial results of the newly renamed Magnite represent the combined performance of both companies. The second quarter 2019 comparative numbers reflect only the results of standalone Rubicon Project, unless otherwise noted as pro-forma.
Recent Highlights
Magnite revenue was $42.3 million for Q2 2020, up 12% from Q2 2019 on an as reported basis
CTV revenue for Q2 2020 was $7.9 million up 12% year over year on a pro-forma basis
CTV growth accelerated to approximately 50% year over year in Q3 since start of July on a pro-forma basis
Expect revenue for Q3 2020 to be between $51 to $55 million
Expect Adjusted EBITDA operating expenses to be between $49 to $50 million for Q3 2020
Expect to be Adjusted EBITDA positive for Q3 2020
Net loss for Q2 2020 was $39.1 million, or loss per share of $0.36 which includes $19.5 million of acquisition related costs including non-cash acquired intangible amortization, compared to net loss of $8.3 million, or loss per share of $0.16 for Q2 of 2019
Adjusted EBITDA(1) loss was $3.5 for Q2 2020, compared to Adjusted EBITDA of $4.4 million for Q2 of 2019
Non-GAAP loss per share(1) was $0.10 for Q2 2020, compared to $0.06 non-GAAP loss per share for Q2 of 2019
Merger related cost synergies of more than $20 million run-rate on track


“We are pleased to see a meaningful recovery in revenue across our entire business, specifically with the pace of year over year growth in CTV to start the third quarter. This follows our first full post-merger quarter creating an industry leading CTV and full service SSP. Programmatic ad-supported CTV is benefiting from the acceleration of cord cutting, buyers wanting more flexibility and control of their spend, inventory growth and overall consumer adoption rates,” said Michael G. Barrett, President and CEO of Magnite. “Going to market as the leading independent omnichannel supply-side platform, newly branded as Magnite, puts us in a strong position to best serve buyer and publisher needs. We are seeing a number of positive drivers including sustained recovery in brand spending, supply path optimization share gains, a return of live sports, a pickup in political spending in CTV specifically, and spend re-allocation due to social advertising boycotts.”

Note: The year over year comparisons as reported, reflect Rubicon Project only results in Q2 2019. When comparisons are referred to as proforma, Telaria results in the prior year period in 2019 are added in order to provide additional detailed insights to business performance.
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Second Quarter 2020 Results Summary
(in millions, except per share amounts and percentages)
Three Months EndedSix Months Ended
June 30, 2020June 30, 2019Change
Favorable/ (Unfavorable)
June 30, 2020June 30, 2019Change
Favorable/ (Unfavorable)
Revenue$42.3$37.912%$78.6$70.312%
Net loss($39.1)($8.3)(371)%($48.8)($20.8)(135)%
Adjusted EBITDA(1)
($3.5)$4.4(180)%($0.7)$4.3(116)%
Adjusted EBITDA operating expenses(2)
$45.8$33.5(37)%$79.3$66.0(20)%
Adjusted EBITDA margin(3)
(8%)12%(20 ppt)(1%)6%(7 ppt)
Basic income (loss) per share($0.36)($0.16)(125)%($0.60)($0.40)(50)%
Diluted income (loss) per share($0.36)($0.16)(125)%($0.60)($0.40)(50)%
Non-GAAP income (loss) per share(1)
($0.10)($0.06)(67)%($0.17)($0.19)11%
Definitions:
(1)Adjusted EBITDA and non-GAAP income (loss) per share are non-GAAP financial measures. Please see the discussion in the section called "Non-GAAP Financial Measures" and the reconciliations included at the end of this press release.
(2)Adjusted EBITDA operating expenses is calculated as revenue less Adjusted EBITDA.
(3)Adjusted EBITDA margin is calculated as Adjusted EBITDA divided by revenue. A reconciliation for net loss to Adjusted EBITDA is included at the end of this press release. For further discussion, please see "Non-GAAP Financial Measures."
Second Quarter 2020 Results Conference Call and Webcast:
The Company will host a conference call on August 10, 2020 at 1:30 PM (PT) / 4:30 PM (ET) to discuss the results for its second quarter of 2020.
Live conference call
Toll free number:(844) 875-6911 (for domestic callers)
Direct dial number:(412) 902-6511 (for international callers)
Passcode:Ask to join the Magnite conference call
Simultaneous audio webcast:
investor.magnite.com under "Events and Presentations"
Conference call replay
Toll free number:(877) 344-7529 (for domestic callers)
Direct dial number:(412) 317-0088 (for international callers)
Passcode:10146164
Webcast link:
investor.magnite.com under "Events and Presentations"
About Magnite
We’re Magnite (Nasdaq: MGNI), the world’s largest independent sell-side advertising platform that combines Rubicon Project’s programmatic expertise with Telaria’s leadership in CTV. Publishers use our technology to monetize their content across all screens and formats—including desktop, mobile, audio and CTV. The world's leading agencies and brands trust our platform to access brand-safe, high-quality ad inventory and execute billions of advertising transactions each month. Anchored in sunny Los Angeles, bustling New York City, historic London, and down under in Sydney, Magnite has offices across North America, EMEA, LATAM and APAC.

Note: Magnite and the Magnite logo are service marks of Magnite, Inc.
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Forward-Looking Statements:
This press release and management's prepared remarks during the conference call referred to above include, and management's answers to questions during the conference call may include, forward-looking statements, including statements based upon or relating to our expectations, assumptions, estimates, and projections. In some cases, you can identify forward-looking statements by terms such as "may," "might," "will," "objective," "intend," "should," "could," "can," "would," "expect," "believe," "design," "anticipate," "estimate," "predict," "potential," "plan" or the negative of these terms, and similar expressions. Forward-looking statements may include, but are not limited to, statements concerning the potential impacts of the COVID-19 pandemic on our business operations, financial condition, and results of operations and on the world economy; our anticipated financial performance, including, without limitation, revenue, advertising spend, profitability, net loss, loss per share, and cash flow; anticipated benefits or effects related to the consummation of the merger with Telaria, including estimated synergies and cost savings resulting from the merger; strategic objectives, including focus on header bidding, connected television ("CTV"), mobile, video, Demand Manager, identity solutions and private marketplace opportunities; investments in our business; development of our technology; industry growth rates for ad-supported CTV and the shift in video consumption from linear TV to CTV; introduction new offerings; the impact of transparency initiatives we may undertake; the impact of our traffic shaping technology on our business; the effects of our cost reduction initiatives; scope and duration of client relationships; the fees we may charge in the future; business mix and expansion of our CTV, mobile, video and private marketplace offerings; sales growth; client utilization of our offerings; our competitive differentiation; our market share and leadership position in the industry; market conditions, trends, and opportunities; user reach; certain statements regarding future operational performance measures including ad requests, fill rate, paid impressions, average CPM, take rate, and advertising spend; benefits from supply path optimization; and other statements that are not historical facts. These statements are not guarantees of future performance; they reflect our current views with respect to future events and are based on assumptions and estimates and subject to known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from expectations or results projected or implied by forward-looking statements. These risks include, but are not limited to: the severity, magnitude, and duration of the COVID-19 pandemic, including impacts of the pandemic and of responses to the pandemic by governments, business and individuals on our operations, personnel, buyers, sellers, and on the global economy and the advertising marketplace; our ability to successfully integrate the Telaria business, and realize the anticipated benefits of the merger; our ability to grow and to manage our growth effectively; our ability to develop innovative new technologies and remain a market leader; our ability to attract and retain buyers and sellers of digital advertising inventory, or publishers, and increase our business with them; our vulnerability to loss of, or reduction in spending by, buyers; our reliance on large sources of advertising demand, including demand side platforms ("DSPs") that may have or develop high-risk credit profiles or fail to pay invoices when due, including as a result of general liquidity constraints experienced by buyers from the COVID-19 pandemic, which has caused certain buyers to delay payments or seek revised payment terms; our ability to maintain and grow a supply of advertising inventory from sellers and to fill the increased inventory; the effect on the advertising market and our business from difficult economic conditions or uncertainty; the freedom of buyers and sellers to direct their spending and inventory to competing sources of inventory and demand; our ability to cause buyers and sellers to use our solution to purchase and sell higher value advertising and to expand the use of our solution by buyers and sellers utilizing evolving digital media platforms, including CTV; our reliance on large aggregators of advertising inventory, and the concentration of CTV among a small number of large publishers that enjoy significant negotiating leverage; our ability to introduce new offerings and bring them to market in a timely manner, and otherwise adapt in response to client demands and industry trends, including shifts in linear TV to CTV, digital advertising growth from desktop to mobile channels and other platforms and from display to video formats and the introduction and market acceptance of Demand Manager; uncertainty of our estimates and expectations associated with new offerings, including CTV, header bidding, private marketplace, mobile, video, Demand Manager, and traffic shaping; the possibility of lower take rates and the need to grow through increasing the volume and/or value of transactions on our platform and increasing our fill rate; our vulnerability to the depletion of our cash resources as a result of the adverse impacts of the COVID-19 pandemic, or as we incur additional investments in technology required to support the increased volume of transactions on our exchange and to develop new offerings; our ability to support our growth objectives with reduced resources from our cost reduction initiatives; our ability to raise additional capital if needed and/or renew our working capital line of credit; our limited operating history and history of losses; our ability to continue to expand into new geographic markets and grow our market share in existing markets; our ability to adapt effectively to shifts in digital advertising; increased prevalence of ad-blocking or cookie-blocking technologies and the slow adoption of common identifiers; the development and use of proprietary identity solutions as a replacement for third party cookies and other identifiers currently used in our platform; the slowing growth rate of desktop display advertising; the growing percentage of online and mobile advertising spending captured by owned and operated sites (such as Facebook, Google and Amazon); industry growth rates for ad-supported CTV and the shift in video consumption from linear TV to digital mediums such as CTV and over-the-top ("OTT"); the adoption of programmatic advertising by CTV publishers; the effects, including loss of market share, of increased competition in our market and increasing concentration of advertising spending, including mobile spending, in a small number of very large competitors; the effects of consolidation in the ad tech industry; acts of
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competitors and other third parties that can adversely affect our business; our ability to differentiate our offerings and compete effectively in a market trending increasingly toward commodification, transparency, and disintermediation; requests for discounts, fee concessions or revisions, rebates, refunds, favorable payment terms and greater levels of pricing transparency and specificity; our ability to ensure a high level of brand safety for our clients and to detect “bot” traffic and other fraudulent or malicious activity; the effects of seasonal trends on our results of operations; costs associated with defending intellectual property infringement and other claims; our ability to attract and retain qualified employees and key personnel; political uncertainty and the ability of the company to attract political advertising spend; our ability to identify future acquisitions of or investments in complementary companies or technologies and our ability to consummate the acquisitions and integrate such companies or technologies; and our ability to comply with, and the effect on our business of, evolving legal standards and regulations, particularly concerning data protection and consumer privacy and evolving labor standards.
We discuss many of these risks and additional factors that could cause actual results to differ materially from those anticipated by our forward-looking statements under the headings "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations," and elsewhere in filings we have made and will make from time to time with the Securities and Exchange Commission, or SEC, including our Annual Report on Form 10-K for the year ended December 31, 2019 and subsequent Quarterly Reports on Form 10-Q for 2020. These forward-looking statements represent our estimates and assumptions only as of the date of the report in which they are included. Unless required by federal securities laws, we assume no obligation to update any of these forward-looking statements, or to update the reasons actual results could differ materially from those anticipated, to reflect circumstances or events that occur after the statements are made. Without limiting the foregoing, any guidance we may provide will generally be given only in connection with quarterly and annual earnings announcements, without interim updates, and we may appear at industry conferences or make other public statements without disclosing material nonpublic information in our possession. Given these uncertainties, investors should not place undue reliance on these forward-looking statements. Investors should read this press release and the documents that we reference in this press release and have filed or will file with the SEC completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements.
Non-GAAP Financial Measures and Operational Measures:
In addition to our GAAP results, we review certain non-GAAP financial measures to help us evaluate our business, measure our performance, identify trends affecting our business, establish budgets, measure the effectiveness of investments in our technology and development and sales and marketing, and assess our operational efficiencies. These non-GAAP measures include Adjusted EBITDA and Non-GAAP Income (Loss) and Non-GAAP Earnings (Loss) per share, each of which is discussed below.
These non-GAAP financial measures are not intended to be considered in isolation from, as substitutes for, or as superior to, the corresponding financial measures prepared in accordance with GAAP. You are encouraged to evaluate these adjustments, and review the reconciliation of these non-GAAP financial measures to their most comparable GAAP measures, and the reasons we consider them appropriate. It is important to note that the particular items we exclude from, or include in, our non-GAAP financial measures may differ from the items excluded from, or included in, similar non-GAAP financial measures used by other companies. See "Reconciliation of net loss to Adjusted EBITDA," "Reconciliation of net loss to Non-GAAP net income (loss)," and "Reconciliation of GAAP loss per share to non-GAAP net income (loss) per share" included as part of this press release.

Adjusted EBITDA:

We define Adjusted EBITDA as net income (loss) adjusted to exclude stock-based compensation expense, depreciation and amortization, amortization of acquired intangible assets, impairment charges, interest income or expense, and other cash and non-cash based income or expenses that we do not consider indicative of our core operating performance, including, but not limited to foreign exchange gains and losses, acquisition and related items, non-operational real estate expense (income), net, and provision (benefit) for income taxes. We believe Adjusted EBITDA is useful to investors in evaluating our performance for the following reasons:
Adjusted EBITDA is widely used by investors and securities analysts to measure a company’s performance without regard to items such as those we exclude in calculating this measure, which can vary substantially from company to company depending upon their financing, capital structures, and the method by which assets were acquired.
Our management uses Adjusted EBITDA in conjunction with GAAP financial measures for planning purposes, including the preparation of our annual operating budget, as a measure of performance and the effectiveness of our
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business strategies, and in communications with our board of directors concerning our performance. Adjusted EBITDA may also be used as a metric for determining payment of cash incentive compensation.
Adjusted EBITDA provides a measure of consistency and comparability with our past performance that many investors find useful, facilitates period-to-period comparisons of operations, and also facilitates comparisons with other peer companies, many of which use similar non-GAAP financial measures to supplement their GAAP results.
Although Adjusted EBITDA is frequently used by investors and securities analysts in their evaluations of companies, Adjusted EBITDA has limitations as an analytical tool, and should not be considered in isolation or as a substitute for analysis of our results of operations as reported under GAAP. These limitations include:
Stock-based compensation is a non-cash charge and will remain an element of our long-term incentive compensation package, although we exclude it as an expense when evaluating our ongoing operating performance for a particular period.
Depreciation and amortization are non-cash charges, and the assets being depreciated or amortized will often have to be replaced in the future, but Adjusted EBITDA does not reflect any cash requirements for these replacements.
Impairment charges are non-cash charges related to goodwill, intangible assets and/or long-lived assets.
Adjusted EBITDA does not reflect non-cash charges related to acquisition and related items, such as amortization of acquired intangible assets, merger related severance costs, and changes in the fair value of contingent consideration.
Adjusted EBITDA does not reflect cash and non-cash charges and changes in, or cash requirements for, acquisition and related items, such as certain transaction expenses and expenses associated with earn-out amounts.
Adjusted EBITDA does not reflect changes in our working capital needs, capital expenditures, non-operational real estate expenses or income, or contractual commitments.
Adjusted EBITDA does not reflect cash requirements for income taxes and the cash impact of other income or expense.
Other companies may calculate Adjusted EBITDA differently than we do, limiting its usefulness as a comparative measure.
Our Adjusted EBITDA is influenced by fluctuations in our revenue and the timing and amounts of our investments in our operations. Adjusted EBITDA should not be considered as an alternative to net income (loss), income (loss) from operations, or any other measure of financial performance calculated and presented in accordance with GAAP.
Non-GAAP Income (Loss) and Non-GAAP Earnings (Loss) per Share:
We define non-GAAP earnings (loss) per share as non-GAAP income (loss) divided by non-GAAP weighted-average shares outstanding. Non-GAAP income (loss) is equal to net income (loss) excluding stock-based compensation, cash and non-cash based acquisition and related expenses, including amortization of acquired intangible assets, merger related severance costs, transaction expenses, non-operational real estate expenses or income, and foreign currency gains and losses. In periods in which we have non-GAAP income, non-GAAP weighted-average shares outstanding used to calculate non-GAAP earnings per share includes the impact of potentially dilutive shares. Potentially dilutive shares consist of stock options, restricted stock awards, restricted stock units, and potential shares issued under the Employee Stock Purchase Plan, each computed using the treasury stock method. We believe non-GAAP earnings (loss) per share is useful to investors in evaluating our ongoing operational performance and our trends on a per share basis, and also facilitates comparison of our financial results on a per share basis with other companies, many of which present a similar non-GAAP measure. However, a potential limitation of our use of non-GAAP earnings (loss) per share is that other companies may define non-GAAP earnings (loss) per share differently, which may make comparison difficult. This measure may also exclude expenses that may have a material impact on our reported financial results. Non-GAAP earnings (loss) per share is a performance measure and should not be used as a measure of liquidity. Because of these limitations, we also consider the comparable GAAP measure of net income (loss).
Investor Relations Contact
Nick Kormeluk
(949) 500-0003
nkormeluk@magnite.com
Media Contact
Charlstie Veith
(516) 300-3569
press@magnite.com
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MAGNITE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(unaudited)
June 30, 2020December 31, 2019
ASSETS
Current assets:
   Cash and cash equivalents$107,490  $88,888  
   Accounts receivable, net292,433  217,571  
   Prepaid expenses and other current assets              10,265  6,591  
         TOTAL CURRENT ASSETS410,188  313,050  
Property and equipment, net19,704  23,667  
Right-of-use lease asset43,814  21,491  
Internal use software development costs, net17,256  16,053  
Intangible assets, net104,953  11,386  
Goodwill157,804  7,370  
Other assets, non-current3,403  2,103  
TOTAL ASSETS$757,122  $395,120  
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses$347,432  $259,439  
Lease liabilities, current12,030  7,282  
Other current liabilities2,881  778  
         TOTAL CURRENT LIABILITIES362,343  267,499  
Lease liabilities, non-current34,598  15,231  
Other liabilities, non-current2,710  454  
TOTAL LIABILITIES 399,651  283,184  
STOCKHOLDERS' EQUITY
Common stock  
Additional paid-in capital         749,959  453,064  
Accumulated other comprehensive loss(2,603) (45) 
Accumulated deficit(389,887) (341,084) 
TOTAL STOCKHOLDERS' EQUITY357,471  111,936  
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$757,122  $395,120  


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MAGNITE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(unaudited)
 Three Months EndedSix Months Ended
 June 30, 2020June 30, 2019June 30, 2020June 30, 2019
Revenue$42,348  $37,870  $78,643  $70,286  
Expenses (1)(2):
Cost of revenue
21,545  15,085  35,548  30,201  
Sales and marketing
20,029  11,519  31,298  22,111  
Technology and development
13,063  9,839  23,756  19,555  
General and administrative
15,780  10,027  24,907  20,307  
Merger restructuring costs
12,493  —  14,423  —  
Total expenses82,910  46,470  129,932  92,174  
Loss from operations(40,562) (8,600) (51,289) (21,888) 
Other (income) expense:
Interest income (expense), net (214) (142) (407) 
Other income(1,284) (46) (1,293) (188) 
Foreign exchange (gain) loss, net(440) (143) (1,138) 158  
Total other income, net(1,722) (403) (2,573) (437) 
Loss before income taxes(38,840) (8,197) (48,716) (21,451) 
Provision (benefit) for income taxes288  84  87  (624) 
Net loss$(39,128) $(8,281) $(48,803) $(20,827) 
Net loss per share:
Basic and Diluted$(0.36) $(0.16) $(0.60) $(0.40) 
Weighted average shares used to compute net loss per share:
Basic and Diluted108,530  52,358  81,698  51,969  

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(1) Stock-based compensation expense included in our expenses was as follows:
 Three Months EndedSix Months Ended
June 30, 2020June 30, 2019June 30, 2020June 30, 2019
Cost of revenue$189  $106  $290  $198  
Sales and marketing2,534  1,459  3,619  2,804  
Technology and development2,225  1,166  3,408  2,225  
General and administrative3,743  2,064  5,431  3,937  
Merger restructuring costs1,200  —  1,200  —  
Total stock-based compensation expense$9,891  $4,795  $13,948  $9,164  
(2) Depreciation and amortization expense included in our expenses was as follows:
 Three Months EndedSix Months Ended
June 30, 2020June 30, 2019June 30, 2020June 30, 2019
Cost of revenue$9,817  $7,758  $16,828  $15,803  
Sales and marketing4,365  113  4,645  238  
Technology and development97  178  197  374  
General and administrative278  125  411  399  
Total depreciation and amortization expense$14,557  $8,174  $22,081  $16,814  

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MAGNITE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(unaudited)
Six Months Ended
June 30, 2020June 30, 2019
OPERATING ACTIVITIES:
Net loss$(48,803) $(20,827) 
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation and amortization22,081  16,814  
Stock-based compensation13,948  9,164  
(Gain) loss on disposal of property and equipment(12) 16  
Provision for doubtful accounts44  966  
Accretion of available for sale securities—  24  
Non-cash lease expense(232) (379) 
Deferred income taxes361  (752) 
Unrealized foreign currency gains, net(2,296) 777  
Changes in operating assets and liabilities, net of effect of business acquisitions:
Accounts receivable73,728  26,831  
Prepaid expenses and other assets8,716  593  
Accounts payable and accrued expenses(83,193) (27,567) 
Other liabilities(5,838) (127) 
Net cash (used in) provided by operating activities(21,496) 5,533  
INVESTING ACTIVITIES:
Purchases of property and equipment(3,420) (2,212) 
Capitalized internal use software development costs(4,718) (4,160) 
Cash, cash equivalents and restricted cash acquired in Merger54,595  —  
Maturities of available-for-sale securities—  7,500  
Net cash provided by investing activities46,457  1,128  
FINANCING ACTIVITIES:
Proceeds from exercise of stock options2,299  383  
Proceeds from issuance of common stock under employee stock purchase plan693  477  
Taxes paid related to net share settlement(7,834) (1,847) 
Net cash used in financing activities(4,842) (987) 
EFFECT OF EXCHANGE RATE CHANGES ON CASH, CASH EQUIVALENTS AND RESTRICTED CASH(265) (15) 
CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH19,854  5,659  
CASH, CASH EQUIVALENTS AND RESTRICTED CASH — Beginning of period88,888  80,452  
CASH, CASH EQUIVALENTS AND RESTRICTED CASH — End of period$108,742  $86,111  
SUPPLEMENTAL DISCLOSURES OF OTHER CASH FLOW INFORMATION:
Cash paid for income taxes$306  $145  
Cash paid for interest$34  $25  
Capitalized assets financed by accounts payable and accrued expenses$56  $118  
Capitalized stock-based compensation$371  $299  
Operating lease right-of-use assets obtained in exchange for new operating lease liabilities$162  $3,237  
Change in restricted cash$1,252  $—  
Common stock and options issued for merger$287,418  $—  
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MAGNITE, INC.
RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA
(In thousands)
(unaudited)
 Three Months EndedSix Months Ended
 June 30, 2020June 30, 2019June 30, 2020June 30, 2019
Net loss$(39,128) $(8,281) $(48,803) $(20,827) 
Add back (deduct):
Depreciation and amortization expense, excluding amortization of acquired intangible assets6,535  7,381  12,999  15,228  
   Amortization of acquired intangibles8,022  793  9,082  1,586  
   Stock-based compensation expense9,891  4,795  13,948  9,164  
   Acquisition and related items11,295  —  13,223  —  
Non-operational real estate expense (income), net
40  —  40  —  
Interest income, net (214) (142) (407) 
Foreign exchange (gain) loss, net(440) (143) (1,138) 158  
Other non-operating (income) expense, net —   —  
Provision (benefit) for income taxes288  84  87  (624) 
Adjusted EBITDA$(3,486) $4,415  $(695) $4,278  








10



MAGNITE, INC.
RECONCILIATION OF NET LOSS TO NON-GAAP INCOME (LOSS)
(In thousands)
(unaudited)

 Three Months EndedSix Months Ended
 June 30, 2020June 30, 2019June 30, 2020June 30, 2019
Net loss$(39,128) $(8,281) $(48,803) $(20,827) 
Add back (deduct):
Acquisition and related items, including amortization of acquired intangibles19,317  793  22,305  1,586  
Stock-based compensation expense9,891  4,795  13,948  9,164  
Non-operational real estate expense (income), net
40  —  40  —  
Foreign exchange (gain) loss, net(440) (143) (1,138) 158  
Other non-operating (income) expense, net —   —  
Tax effect of Non-GAAP adjustments (1)
(138) (49) (369) (152) 
Non-GAAP income (loss)$(10,449) $(2,885) $(14,008) $(10,071) 
(1) Non-GAAP income (loss) includes the estimated tax impact from the expense items reconciling between net loss and non-GAAP income (loss). 


11


MAGNITE, INC.
RECONCILIATION OF GAAP INCOME (LOSS) PER SHARE TO NON-GAAP INCOME (LOSS) PER SHARE
(In thousands, except per share amounts)
(unaudited)

 Three Months EndedSix Months Ended
June 30, 2020June 30, 2019June 30, 2020June 30, 2019
GAAP net loss per share (1):
Basic$(0.36) $(0.16) $(0.60) $(0.40) 
Diluted$(0.36) $(0.16) $(0.60) $(0.40) 
Non-GAAP income (loss) (2)
$(10,449) $(2,885) $(14,008) $(10,071) 
Weighted-average shares used to compute basic net loss per share108,530  52,358  81,698  51,969  
Dilutive effect of weighted-average common stock options, RSAs, and RSUs—  —  —  —  
Dilutive effect of weighted-average ESPP—  —  —  —  
Non-GAAP weighted-average shares outstanding (3)
108,530  52,358  81,698  51,969  
Non-GAAP income (loss) per share$(0.10) $(0.06) $(0.17) $(0.19) 
(1) Calculated as net income (loss) divided by basic and diluted weighted-average shares used to compute net income (loss) per share as included in the consolidated statement of operations.
(2) Refer to reconciliation of net loss to non-GAAP income (loss).
(3) Non-GAAP (income) loss per share is computed using the same weighted-average number of shares that are used to compute GAAP net loss per share in periods where there is both a non-GAAP loss and a GAAP net loss.


12


MAGNITE, INC.
REVENUE BY CHANNEL
(In thousands, except percentages)
(unaudited)

Revenue
Three Months EndedSix Months Ended
June 30, 2020June 30, 2019June 30, 2020June 30, 2019
Channel:
CTV$7,919  19 %$—  — %$7,919  10 %$—  — %
Desktop15,271  36 %16,588  44 %30,567  39 %31,809  45 %
Mobile19,158  45 %21,282  56 %40,157  51 %38,477  55 %
Total$42,348  100 %$37,870  100 %$78,643  100 %$70,286  100 %


13
v3.20.2
Cover
Aug. 10, 2020
Cover [Abstract]  
Document Type 8-K
Document Period End Date Aug. 10, 2020
Entity Registrant Name MAGNITE, INC.
Entity Incorporation, State or Country Code DE
Entity File Number 001-36384
Entity Tax Identification Number 20-8881738
Entity Address, Address Line One 12181 Bluff Creek Drive,
Entity Address, Address Line Two 4th Floor
Entity Address, City or Town Los Angeles,
Entity Address, State or Province CA
Entity Address, Postal Zip Code 90094
City Area Code 310
Local Phone Number 207-0272
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common stock, par value $0.00001 per share
Trading Symbol MGNI
Security Exchange Name NASDAQ
Entity Emerging Growth Company false
Entity Central Index Key 0001595974
Amendment Flag false