What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2024-02-28 compared with 2023-02-22 · 299 added, 378 removed, 1094 unchanged (38% of the section changed)

12 unchanged sentences

To the stockholders and the Board of Directors of Magnite, Inc.

Opinions on the Financial Statements and Internal Control over Financial Reporting

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Magnite, Inc.

and subsidiaries (the "Company") as of December 31, 2023 and 2022, the related consolidated statements of operations, comprehensive loss, stockholders' equity, and cash flows for each of the three years in the period ended December 31, 2023 and the related notes (collectively referred to as the "financial statements").

We also have audited the Company’s internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America.

Also, in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.

Basis for Opinions

The Company’s management is responsible for these financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting.

Our responsibility is to express an opinion on these financial statements and an opinion on the Company’s internal control over financial reporting based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 28, 2024, expressed an unqualified opinion on the Company's internal control over financial reporting.

Basis for Opinion

These financial statements are the responsibility of the Company's management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud , and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the financial statements included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures to respond to those risks.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.

Our audits also included performing such other procedures as we considered necessary in the circumstances.

We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Revenue — Highly Automated Systems to Process and Record Revenue - Refer to Note 4 to the financial statements .

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Revenue — Refer to Notes 2 and 4 to the financial statements .

Critical Audit Matter Description

The Company’s revenues consist of transaction-based fees and is made up of a significant volume of low-dollar transactions, sourced from multiple systems, databases, and other tools.

Due to the fact that revenue transactions do not consist of the transfer of physical goods, but are derived from the purchase and sale of digital advertising inventory through their platforms, the processing and recording of revenue is highly automated and is based on contractual terms with advertisers and publishers.

Because of the nature of the Company’s transaction-based fees, the Company uses automated systems to process and record its revenue transactions.

We identified revenue as a critical audit matter because the of the information technology (IT)-dependent nature of the Company’s revenue stream and the significant audit effort required in performing our audit procedures, including involvement of professionals with expertise in IT to identify, test, and evaluate the Company’s systems, software applications, and automated controls related to the revenue cycle.

The Company generates revenue from transactions where it provides a platform for the purchase and sale of digital advertising inventory.

The Company uses automated systems to process and record revenue based on contractual terms with buyers and publishers, and its revenue is comprised of a significant volume of low-dollar transactions.

We identified revenue as a critical audit matter because the Company’s systems to process and record revenue are highly automated.

This required increased extent of effort, including the need for us to involve professionals with expertise in Information Technology (IT) to identify, test, and evaluate the Company’s systems, software applications, and automated controls.

How the Critical Audit Matter Was Addressed in the Audit

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• With the assistance of our IT specialists, we:

◦ Identified the significant systems used to process revenue transactions and tested the design, implementation, effectiveness of general IT controls over the systems, including testing of user access controls, change management controls, and IT operations controls.

◦ We tested the design, implementation, and operating effectiveness of system interface controls and automated controls within the revenue process, as well as controls designed to ensure the accuracy and completeness of revenue.

◦ For the relevant platform systems, in order to test that transactions are being processed and recorded completely and accurately, we independently created test impressions and traced such impressions through the systems to final output for financial reporting.

• We tested the design, implementation, and operating effectiveness of controls within the relevant revenue business processes, including those in place to reconcile the various systems to the Company’s general ledger.

◦ Identified the significant systems used to process revenue transactions and tested the general IT controls over each of these systems, including testing of user access controls, change management controls, and IT operations controls.

◦ Performed testing of system interface controls and automated controls within the relevant revenue streams, as well as controls designed to ensure the accuracy and completeness of revenue.

◦ Independently created test transactions and traced such transactions through the systems to final output for financial reporting.

• We tested internal controls within the relevant revenue business processes, including those in place to reconcile the various systems to the Company’s general ledger.

• We evaluated recorded revenue and revenue trends and used data analytics to analyze transactional revenue data.

• We tested revenue through the use of technology-based data analysis tools, to inspect journal entries to:

◦ Identify significant relationships in the revenue population and

◦ Sufficiently understand significant relationships and related accounts affecting revenue

• We used technology-based data analysis tools to inspect journal entries to:

◦ Identify significant relationships in the revenue population.

◦ Sufficiently understand identified significant relationships and related accounts affecting revenue.

• We performed audit procedures on those related accounts determined to have a significant relationship with revenue.

Such procedures included sending confirmations to customers for a selection of accounts receivable and tracing cash receipts received after year end back to accounts receivable as of the balance sheet date.

We also performed a combination of audit procedures on publisher payables, which included subsequent disbursements testing, recalculation of publisher payable amounts, and substantive analytical procedures.

Such procedures included:

◦ For a sample of accounts receivable balances, evaluating responses to confirmations sent to customers or other evidence such as cash receipts received after year end.

◦ For a sample of accounts payables – seller balances, performing detail transaction testing by agreeing the amounts recognized to source documents.

◦ For a sample of cash disbursements made after year end, evaluating whether the amounts were appropriately included in accounts payable – seller as of the balance sheet date.

◦ Analytical procedures on the accounts payable – seller balance by developing an independent expectation for the recorded balance based on a historical relationship with revenue.

/s/ Deloitte & Touche LLP

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$ 1,372,176 $ 1,094,321

Lease liabilities - current portion 21,172 19,142

Lease liabilities, current

20,402 21,172

Debt, current 3,600 3,600

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Lease liabilities, non-current 49,665 66,331

Deferred tax liability, net

Deferred tax liabilities, net

Other liabilities, non-current

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Common stock, $ 0.00001 par value;

500,000 shares authorized;

134,006 and 132,553 shares issued at December 31, 2022 and December 31, 2021, respectively, and 134,006 and 132,204 shares outstanding at December 31, 2022 and December 31, 2021, respectively

500,000 shares authorized at December 31, 2023 and December 31, 2022;

138,577 and 134,006 shares issued and outstanding at December 31, 2023 and December 31, 2022, respectively

Additional paid-in capital 1,387,715 1,319,221

Accumulated other comprehensive loss ( 2,076 ) ( 3,151 )

Treasury stock at cost, 0 and 349 shares outstanding at December 31, 2022 and December 31, 2021, respectively

Accumulated deficit ( 683,958 ) ( 524,774 )

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Other (income) expense:

Interest (income) expense, net 29,260 19,848 ( 50 )

Other income ( 5,318 ) ( 4,450 ) ( 3,665 )

Interest expense, net

32,369 29,260 19,848

Foreign exchange (gain) loss, net 1,953 ( 1,129 ) ( 1,480 )

Total other (income) expense, net 22,813 13,918 ( 1,495 )

Gain on extinguishment of debt

( 26,480 ) — —

Other income ( 5,304 ) ( 5,318 ) ( 4,450 )

Total other expense, net

2,538 22,813 13,918

Loss before income taxes ( 157,547 ) ( 135,597 ) ( 94,988 )

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Net income (loss) $ ( 159,184 ) $ ( 130,323 ) $ 65

Other comprehensive loss:

Other comprehensive income (loss):

Foreign currency translation adjustments 1,075 ( 1,775 ) ( 419 )

Other comprehensive loss ( 1,775 ) ( 419 ) ( 912 )

Other comprehensive income (loss)

1,075 ( 1,775 ) ( 419 )

Comprehensive loss $ ( 158,109 ) $ ( 132,098 ) $ ( 354 )

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( 289 ) — ( 6,496 ) — — — — ( 6,496 )

Issuance of common stock associated with the Telaria Merger 52,099 1 275,772 — — — — 275,773

Exchange of stock options and RSU related to Telaria Merger — — 11,646 — — — — 11,646

Issuance of common stock associated with the SpotX Acquisition

12,374 — 495,591 — — — — 495,591

Purchase of treasury stock — — — — — ( 349 ) ( 6,007 ) ( 6,007 )

Capped call options — — ( 38,960 ) — — — — ( 38,960 )

Stock-based compensation

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( 1,270 ) — ( 14,498 ) — — — — ( 14,498 )

Issuance of common stock associated with SpotX Acquisition 12,374 — 495,591 — — — — 495,591

Purchase of treasury stock — — — — — ( 1,243 ) ( 15,663 ) ( 15,663 )

Capped call options — — ( 38,960 ) — — — — ( 38,960 )

Retirement of common stock

( 1,592 ) — ( 21,670 ) — — 1,592 21,670 —

Stock-based compensation

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Issuance of common stock related to employee stock purchase plan 438 — 3,513 — — — — 3,513

Issuance of common stock related to RSU vesting 3,276 — — — — — — —

Issuance of common stock related to RSU and PSU vesting

4,777 — — — — — — —

Shares withheld related to net share settlement ( 1,039 ) — ( 11,814 ) — — — — ( 11,814 )

Purchase of treasury stock — — — — — ( 1,243 ) ( 15,663 ) ( 15,663 )

Retirement of common stock ( 1,592 ) — ( 21,670 ) — — 1,592 21,670 —

Stock-based compensation — — 74,629 — — — — 74,629

Other comprehensive loss — — — ( 1,775 ) — — — ( 1,775 )

Other comprehensive income

— — — 1,075 — — — 1,075

Net loss — — — — ( 159,184 ) — — ( 159,184 )

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Net income (loss) $ ( 159,184 ) $ ( 130,323 ) $ 65

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Depreciation and amortization 240,820 216,052 146,886

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Impairment of intangible assets — 3,320 —

Gain on extinguishment of debt

( 26,480 ) — —

(Gain) loss on disposal of property and equipment 311 ( 86 ) 130

Provision for doubtful accounts ( 163 ) 49 ( 138 )

Provision for (recovery of) doubtful accounts

4,666 ( 163 ) 49

Amortization of debt discount and issuance costs 6,279 6,785 4,925

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Deferred income taxes ( 2,379 ) ( 8,802 ) ( 98,770 )

Unrealized foreign currency gains, net ( 271 ) ( 2,259 ) ( 1,161 )

Unrealized foreign currency (gain) loss, net

1,266 ( 271 ) ( 2,259 )

Other items, net 2,696 — 3,292

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Other liabilities ( 112 ) ( 389 ) 25

Net cash provided by (used in) operating activities 192,550 126,589 ( 12,065 )

Net cash provided by operating activities

214,367 192,550 126,589

INVESTING ACTIVITIES:

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Mergers and acquisitions, net of cash acquired and indemnification claims holdback — ( 20,755 ) ( 661,869 )

Net cash provided by (used in) investing activities ( 65,152 ) ( 690,997 ) 32,636

Net cash used in investing activities

( 37,383 ) ( 65,152 ) ( 690,997 )

FINANCING ACTIVITIES:

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Repayment of debt ( 3,600 ) ( 3,600 ) ( 1,800 )

Repurchase of Convertible Senior Notes

( 165,518 ) — —

Repayment of financing lease ( 276 ) ( 807 ) ( 645 )

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Cash paid for interest $ 37,028 $ 26,320 $ 12,908

Capitalized assets financed by accounts payable and accrued expenses $ 1,295 $ 2,171 $ 42

Capitalized assets financed by accounts payable and accrued expenses and other liabilities

$ 1,690 $ 1,295 $ 2,171

Capitalized stock-based compensation $ 2,012 $ 2,704 $ 1,496

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("Magnite" or the "Company"), formerly known as The Rubicon Project, Inc., was formed in Delaware and began operations on April 20, 2007.

On April 1, 2020, Magnite completed a stock-for-stock merger with Telaria, Inc., ("Telaria" and such merger the "Telaria Merger"), a leading sell side advertising platform and provider of connected television ("CTV") technology.

On April 30, 2021, the Company completed its acquisition of SpotX, Inc.

("SpotX" and such acquisition the "SpotX Acquisition"), a leading CTV and video advertising platform.

On July 1, 2021, the Company completed its acquisition of SpringServe, LLC ("SpringServe" and such acquisition the "SpringServe Acquisition"), a leading ad serving platform for CTV.

The Company operates a sell side advertising platform that offers buyers and sellers of digital advertising a single partner for transacting globally across all channels, formats, and auction types.

On June 8, 2020, the Company voluntarily delisted its common stock from the New York Stock Exchange ("NYSE") and commenced listing on The Nasdaq Global Select Market of The Nasdaq Stock Market LLC ("Nasdaq").

On June 30, 2020, the Company changed its name from "The Rubicon Project, Inc." to "Magnite, Inc." In connection with the name change, the Company also changed its ticker symbol from "RUBI" to "MGNI." Magnite has its principal offices in New York City, Los Angeles, Denver, London, and Sydney, and additional offices in Europe, Asia, North America, and South America.

The Company's common stock is listed on the Nasdaq Global Select Market of The Nasdaq Stock Market LLC ("Nasdaq") under the symbol "MGNI." Magnite has its principal offices in New York City, Los Angeles, Denver, London, and Sydney, and additional offices in Europe, Asia, North America, and South America.

The Company provides a technology solution to automate the purchase and sale of digital advertising inventory for buyers and sellers globally, across all channels, formats and auction types.

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The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported and disclosed financial statements and accompanying footnotes.

Due to the economic uncertainty as a result of the COVID-19 pandemic, geopolitical events, including the conflict in Ukraine, and economic and macroeconomic factors like labor shortages, supply chain disruptions, inflation, and recessionary concerns impacting the markets and communities in which the Company's clients operate, it has become more difficult to apply certain assumptions and judgments into these estimates.

The extent of the impact of these factors on the Company's operational and financial performance will depend on future developments, which are highly uncertain and cannot be predicted, including but not limited to, the duration and how

quickly and to what extent normal economic and operating conditions can resume.

During the year ended December 31, 2022, this uncertainty continued to result in a higher level of judgment related to its estimates and assumptions.

As of the date of issuance of the consolidated financial statements, the Company is not aware of any specific event or circumstance that would require the Company to update its estimates, judgments, or revise the carrying value of its assets or liabilities.

These estimates may change, as new events occur and additional information is obtained, and are recognized in the consolidated financial statements as soon as they become known.

Actual results could differ materially from these estimates.

On an ongoing basis, management evaluates its estimates, primarily those related to:

(i) revenue recognition criteria, including the determination of revenue reporting as net versus gross in the Company’s revenue arrangements, (ii) accounts receivable and allowances for doubtful accounts, (iii) amounts capitalized and the useful lives of intangible assets, internal use software development costs, and property and equipment, (iv) valuation of long-lived assets and their recoverability, including goodwill, (v) the realization of tax assets and estimates of tax liabilities, (vi) assumptions used in valuation models to determine the fair value of stock-based awards, (vii) fair value of financial instruments, (viii) the recognition and disclosure of contingent liabilities, and (ix) the assumptions used in valuing acquired assets and assumed liabilities in business combinations.

These estimates are based on historical data and experience, as well as various other factors that management believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources.

Estimates relating to the estimated useful lives of internal-use software development costs, assumptions used in the valuation models to determine the fair value of stock options and stock-based compensation expense, business combinations, estimated useful lives of long-lived assets, recoverability of intangible assets and goodwill, the assumptions used in the valuation of acquired assets and liabilities in business combinations, and income taxes, including the realization of tax assets and estimates of tax liabilities.

require the selection of appropriate valuation methodologies and models, and significant judgment in evaluating ranges of assumptions and financial inputs.

Estimates relating to the allowance for doubtful accounts, amounts capitalized and estimated useful lives of internal-use software development costs, estimated useful lives of long-lived assets, recoverability of intangible assets and goodwill, and income taxes, including the realization of tax assets and estimates of tax

liabilities require the selection of appropriate valuation methodologies and models, and judgment in evaluating ranges of assumptions and financial inputs.

Actual results may differ materially from those estimates under different assumptions or circumstances.

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The Company generates revenue from transactions where it provides a platform for the purchase and sale of digital advertising inventory.

Generally, our revenue is based on a percentage of the ad spend that runs through our platform, although for certain clients or transaction types we may receive a fixed CPM for each impression sold, and for advertising campaigns that are transacted through insertion orders we earn revenue based on the full amount of ad spend that runs through our platform.

The Company also generates revenue from the SpringServe ad server and Demand Manager header-bidding product, where fees are either based on the number of impressions processed or a percentage of ad spend.

Generally, the Company's revenue is based on a percentage of the ad spend that runs through its platform, although for certain clients, services, or transaction types the Company may receive a fixed CPM for each impression sold, and for advertising campaigns that are transacted through insertion orders the Company earns revenue based on the full amount of ad spend that runs through its platform.

In addition, the Company may receive certain fixed monthly fees for the use of its platform or products.

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The Company does not have arrangements with multiple performance obligations.

The Company does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which the Company recognizes revenue at the amount to which it has the right to invoice for services performed.

The Company considers the following when determining if a contract exists (i) contract approval by all parties, (ii) identification of each party’s rights regarding the goods or services to be transferred, (iii) specified payment terms, (iv) commercial substance of the contract, and (v) collectability of substantially all of the consideration is probable.

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Cost of Revenue.

The Company's cost of revenue consists primarily of data center costs, bandwidth costs, ad protection costs, depreciation and maintenance expense of hardware supporting the Company's revenue-producing platform, amortization of software costs for the development of the Company's revenue-producing platform, amortization expense associated with acquired developed technologies, personnel costs, facilities-related costs, and cloud computing costs.

The Company's cost of revenue consists primarily of cloud hosting, data center, and bandwidth costs, ad protection costs, depreciation and maintenance expense of hardware supporting the Company's revenue-producing platform, amortization of software costs for the development of the Company's revenue-producing platform, amortization expense associated with acquired developed technologies, and personnel costs.

In addition, for revenue booked on a gross basis, cost of revenue includes traffic acquisition costs.

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Sales and Marketing.

The Company's sales and marketing expenses consist primarily of personnel costs, including salaries, bonuses, and stock-based compensation, as well as marketing expenses such as brand marketing, travel expenses, trade shows and marketing materials, professional services, and amortization expense associated with client relationships, backlog, and non-compete agreements from the Company's business acquisitions and, to a lesser extent, facilities-related costs and depreciation and amortization.

The Company's sales organization focuses on increasing the adoption of the Company's solution by existing and new buyers and sellers.

The Company's sales and marketing expenses consist primarily of personnel costs, including salaries, bonuses, and stock-based compensation, as well as marketing expenses such as brand marketing, travel expenses, trade shows and marketing materials, amortization expense associated with client relationships, backlog, and non-compete agreements from the Company's business acquisitions, professional services, facilities-related costs, and depreciation expense.

The Company's sales and support organization focuses on increasing the adoption of the Company's solution by existing and new buyers and sellers and supports ongoing client relationships.

The Company amortizes acquired intangibles associated with client relationships and backlog from its business acquisitions over their estimated useful lives.

Technology and Development.

The Company's technology and development expenses consist primarily of personnel costs, including salaries, bonuses, and stock-based compensation, and professional services associated with the ongoing development and maintenance of the Company's solution, depreciation and amortization, and, to a lesser extent, facilities-related costs.

The Company's technology and development expenses consist primarily of personnel costs, including salaries, bonuses, and stock-based compensation, as well as professional services associated with the ongoing development and maintenance of the Company's solution, third-party software license costs, facilities-related costs, and depreciation and amortization expense.

These expenses include costs incurred in the development, implementation, and maintenance of internal use software, including platform and related infrastructure.

Technology and development costs are expensed as incurred, except to the extent that such costs are associated with internal use software development that qualifies for capitalization, which are then recorded as internal use software development costs, net on the Company's consolidated balance sheets.

The Company amortizes internal use software development costs that relate to its revenue-producing activities on the Company's platform to cost of revenue and amortizes other internal use software development costs to technology and development costs or general and administrative expenses, depending on the nature of the related project.

The Company amortizes internal use software development costs that relate to its revenue-producing activities on the Company's platform to cost of revenue and amortize other internal use software development costs to technology and development costs or general and administrative expenses, depending on the nature of the related project.

The Company amortizes acquired intangibles associated with technology and development functions from its business acquisitions over their estimated useful lives.

General and Administrative.

The Company's general and administrative expenses consist primarily of personnel costs, including salaries, bonuses, and stock-based compensation, associated with the Company's executive, finance, legal, human resources, compliance, and other administrative personnel, as well as accounting and legal professional services fees, facilities-related costs and depreciation and amortization, and other corporate-related expenses.

General and administrative expenses also include amortization of internal use software development costs and acquired intangible assets from the Company's business acquisitions over their estimated useful lives that relate to general and administrative functions.

The Company's general and administrative expenses consist primarily of personnel costs, including salaries, bonuses, and stock-based compensation, associated with the Company's executive, finance, legal, human resources, compliance, and other administrative personnel, as well as accounting and legal professional services fees, facilities-related costs, depreciation expense, bad debt expense, and other corporate-related expenses.

Merger, Acquisition, and Restructuring Costs.

The Company's merger, acquisition, and restructuring costs consist primarily of professional service fees associated with merger and acquisition activities, cash-based employee termination costs, related stock-based compensation charges associated with mergers, acquisitions, or restructuring activities, and other restructuring activities, including facility closures, relocation costs, and impairment costs of abandoned technology associated with restructuring activities.

The Company's merger, acquisition, and restructuring costs consist primarily of professional service fees associated with merger and acquisition activities, cash-based employee termination costs, related stock-based compensation charges, and other restructuring activities, including facility closures, relocation costs, contract termination costs, and impairment costs of abandoned technology associated with restructuring activities.

Stock-Based Compensation

Compensation expense related to employee and non-employee stock-based awards is measured and recognized in the consolidated financial statements based on the fair value of the awards granted.

The Company grants awards to employees that vest based solely on continued service, or service conditions, awards that vest based on the achievement of performance targets, or performance conditions, and awards that vest based on our stock price exceeding a peer index, or market conditions.

The fair value of each option award containing service and/or performance conditions is estimated on the grant date using the Black-Scholes option-pricing model.

The fair value of awards containing market conditions is estimated using a Monte-Carlo lattice model.

The Company grants awards to employees that vest based solely on continued service, or service conditions, awards that vest based on the achievement of performance targets, or performance conditions, and awards that vest based on the Company's stock price exceeding a peer index, or market conditions.

The fair value of restricted stock units that vest based on continued service is equal to the closing price of the Company's common stock as reported on the Nasdaq on the grant date.

The fair value of each option award containing service conditions is estimated on the grant date using the Black-Scholes option-pricing model.

The fair value of awards containing market conditions is estimated using a Monte-Carlo simulation model.

For service condition awards, stock-based compensation expense is recognized on a straight-line basis over the requisite service periods of the awards, which is generally four years .

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Expected Term.

For employee stock options in which the Company did not have significant history and that contain service conditions, the Company applies the simplified approach, in which the expected term of an award is presumed to be the mid-point between the vesting date and the expiration date of the award.

For employee stock options issued in the periods in which the Company did have significant history and that contain service conditions, the expected term is determined based on historical trends.

For employee stock options the expected term is determined based on historical trends.

The expected term of employee stock options that contain performance conditions represents the weighted-average period that the stock options are estimated to remain outstanding.

For grants issued in periods in which the Company did not have significant trading history for the Company’s common stock, the Company determined the price volatility based on the historical volatilities of a publicly traded peer group based on daily price observations over a period equivalent to the expected term of the stock option grants.

For grants issued in periods in which the Company has sufficient history, the computation of the expected volatility assumption is based on the historical volatility of the Company’s common stock.

The computation of the expected volatility assumption is based on the historical volatility of the Company’s common stock.

Dividend Yield.

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The Company has never declared or paid any cash dividends on its common stock and does not anticipate paying any cash dividends in the foreseeable future, so the Company used an expected dividend yield of zero .

Determining the fair value of stock-based awards using a pricing model requires judgment.

The Company’s use of the Black-Scholes option-pricing model requires the input of subjective assumptions such as the expected term of the award, the expected volatility of the price of the Company’s common stock, risk-free interest rates, and the expected dividend yield of the Company’s common stock.

Determining the fair value of stock-based awards with performance and market conditions requires judgment.

The Company's use of the Monte-Carlo simulation model requires the input of subjective assumptions, such as the expected term of the award, the expected volatility of the price of the Company’s common stock, risk-free interest rates, the expected dividend yield of the Company’s common stock, in addition for those awards containing market conditions, which also include expected volatilities of selected peer companies, and expected correlation coefficients of the Company and those of the selected peer companies.

The assumptions used in the Company’s valuation model represent management’s best estimates.

These estimates involve inherent uncertainties and the application of management’s judgment.

These estimates involve inherent

uncertainties and the application of management’s judgment.

If factors change and different assumptions are used, the Company’s stock-based compensation expense could be materially different in the future.

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A valuation allowance is used to reduce some or all of the deferred tax assets if, based upon the weight of available evidence, it is more likely than not that those deferred tax assets will not be realized.

The Company maintains a partial valuation allowance to offset its domestic net deferred tax assets due to the uncertainty of realizing future tax benefits from the net operating loss carryforwards and other deferred tax assets.

The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position.

The tax benefits recognized in the consolidated financial statements from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized.

The Company maintains a partial valuation allowance to offset its domestic net deferred tax assets due to the uncertainty of realizing future income tax benefits from the net operating loss carryforwards and other deferred tax assets.

The Company recognizes the income tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position.

The income tax benefits recognized in the consolidated financial statements from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized.

The Company recognizes interest and penalties accrued related to its uncertain tax positions in its income tax provision (benefit) in the consolidated statements of operations.

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Basic net income (loss) per share of common stock is calculated by dividing the net income (loss) by the weighted-average number of shares of common stock outstanding.

Diluted income (loss) per share attributable to common stockholders adjusts the basic weighted-average number of shares of common stock outstanding for the effect of potentially dilutive securities during the period.

Potentially dilutive securities consist of stock options, restricted stock awards, restricted stock units, potential shares issuable under the Company's Employee Stock Purchase Plan ("ESPP"), shares held in escrow, potential shares issuable as part of contingent consideration as a result of business combinations, and potential shares issuable as part of the Convertible Senior Notes.

For purposes of this calculation, potentially dilutive securities are excluded from the calculation of diluted net income (loss) per share if their effect is anti-dilutive.

Diluted income per share considers adjustments to net income and the weighted-average number of shares of common stock outstanding for the effect of potentially dilutive securities during the period.

Potentially dilutive securities consist of stock options, restricted stock units, performance stock units, potential shares issuable under the Company's Employee Stock Purchase Plan ("ESPP"), and potential shares issuable as part of the Convertible Senior Notes.

Diluted income per share is computed utilizing the treasury method for options, restricted stock units, performance stock units, and potential ESPP shares.

Diluted income per share for the Convertible Senior Notes is calculated under the if-converted method.

Potential common share equivalents are excluded where their inclusion would be anti-dilutive.

For periods in which the Company reports net loss, diluted net loss per share is the same as basic net loss per share because the effects of potentially dilutive securities would be anti-dilutive.

Comprehensive Income (Loss)

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government and its agencies.

The Company classifies investments held in money market funds as cash equivalents because the money market funds have weighted-average maturities at the date of purchase of less than 90 days.

The Company classifies investments held in money market funds as cash equivalents because the money market funds have weighted-average maturities at the date of purchase of less than 90 days, are

freely redeemable into cash and have a constant net asset value.

Investments held in U.S.

government and agency bonds and corporate debt securities with stated maturities of less than one year are classified as short-term investments included in marketable securities and prepaid expenses and other current assets.

government and agency bonds and corporate debt securities with stated maturities of less than one year are classified as short-term investments.

Restricted Cash

The Company classifies certain restricted cash balances within prepaid expenses and other current assets and other assets, non-current on the consolidated balance sheets based upon the term of the remaining restrictions.

At December 31, 2022 and 2021, the Company had restricted cash of $ 0.2 million and $ 0.3 million, respectively.

Accounts Receivable Allowance for Doubtful Accounts

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Property and Equipment, Net

Property and equipment, which includes amounts recorded under finance leases, are recorded at historical cost, less accumulated depreciation and amortization.

Property and equipment are recorded at historical cost, less accumulated depreciation and amortization.

Depreciation is computed using the straight-line method based upon the estimated useful lives of the assets.

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Leasehold improvements Shorter of useful life or life of lease

Network hardware under right-of-use finance arrangements Shorter of useful life or life of lease

Repair and maintenance costs are charged to expense as incurred, while renewals and improvements are capitalized.

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The Company does not transfer ownership of its software, or lease its software, to third parties.

Capitalized Costs Incurred in Cloud Computing Arrangements

Cloud computing arrangements, such as software as a service and other hosting arrangements, are evaluated for capitalized implementation costs in a similar manner as capitalized software development costs.

If a cloud computing arrangement includes a software license, the software license element of the arrangement is accounted for in a manner consistent with the acquisition of other software licenses.

If a cloud computing arrangement does not include a software license, the service element of the arrangement is accounted for as a service contract.

The Company capitalized certain implementation costs for its cloud computing arrangements that are service contracts, which are included in prepaid expenses and other current assets and other assets, non-current within the consolidated balance sheets.

The Company amortizes capitalized implementation costs in a cloud computing arrangement over the life of the service contract, which generally is three years .

Intangible Assets

Intangible assets primarily consist of acquired developed technology, client relationships, and non-compete agreements resulting from business combinations, which are recorded at acquisition-date fair value, less accumulated amortization.

The Company determines the appropriate useful life of its intangible assets by performing an analysis of expected cash flows of the acquired assets.

Intangible assets primarily consist of acquired developed technology, client relationships, and in-process research and development projects resulting from business combinations, which are recorded at acquisition-date fair value, less accumulated amortization.

The Company determines the appropriate useful life of its intangible assets by performing an analysis of expected cash

flows of the acquired assets.

Intangible assets are amortized over their estimated useful lives using a straight-line method, which approximates the pattern in which the economic benefits are consumed.

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Conditions that would necessitate an impairment assessment include a significant decline in the observable market value of an asset, a significant change in the extent or manner in which an asset is used, or any other significant adverse change that would indicate that the carrying amount of an asset or group of assets may not be recoverable.

For intangible assets used in operations, impairment losses are only recorded if the asset’s carrying amount is not recoverable through its undiscounted, probability-weighted future cash flows.

For intangible assets used in operations, impairment losses are only recorded if the asset’s carrying amount is not recoverable through its undiscounted, probability-weighted future cash flows at the asset group level that represents the lowest level of independent cash flows.

The Company measures the impairment loss based on the difference between the carrying amount and estimated fair value.

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The Company estimates the fair value of intangible assets acquired generally using a discounted cash flow approach, which includes an analysis of the future cash flows expected to be generated by the asset and the risk associated with achieving these cash flows.

The key assumptions used in the discounted cash flow model include the discount rate that is applied to the forecasted future cash flows to calculate the present value of those cash flows and the estimate of future cash flows attributable to the acquired intangible asset, which include revenue, expenses and taxes.

The key assumptions used in the discounted cash flow model include the discount rate that is applied to the forecasted future

cash flows to calculate the present value of those cash flows and the estimate of future cash flows attributable to the acquired intangible asset, which include revenue, expenses and taxes.

The carrying value of acquired working capital assets and liabilities approximates its fair value, given the short-term nature of these assets and liabilities.

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The Company operates as a single operating segment and has identified a single reporting unit.

Operating and Finance Leases

Operating Leases

The Company determines if an arrangement is a lease at inception.

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For operating leases, the right of use ("ROU") asset is amortized on a periodic basis over the expected term of the lease (see Note 15).

Finance leases are included in property and equipment, net on the consolidated balance sheets.

Fair Value of Financial Instruments

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Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash, cash equivalents, restricted cash and accounts receivable.

Cash and cash equivalents maintained with financial institutions exceed applicable federally insured limits.

Cash maintained with financial institutions typically exceeds applicable federally insured limits in the U.S.

and may not be covered by similar local depositor insurance schemes for cash held in foreign currencies or in bank accounts outside of the U.S.

Cash equivalents, primarily money market fund investments, are not insured by federal insurance schemes and are exposed to other potential risks linked to high concentration among major custodial banks.

Accounts receivable include amounts due from buyers with principal operations primarily in the United States.

The Company performs ongoing credit evaluations of its buyers.

At December 31, 2022, two buyers accounted for 45 % and 9 %, respectively, of consolidated accounts receivable.

At December 31, 2021, two buyers accounted for 44 % and 10 %, respectively, of accounts receivable.

At December 31, 2023, two buyers accounted for 48 % and 11 %, respectively, of consolidated accounts receivable, net.

At December 31, 2022, two buyers accounted for 45 % and 9 %, respectively, of accounts receivable, net.

The Company recognizes revenue from its contracts with sellers.

No seller of advertising inventory accounted for 10% or more of revenue during the years ended December 31, 2023, 2022, and 2021.

At December 31, 2022, one seller of advertising inventory accounted for 28 % of accounts payable and at December 31, 2021, one seller of advertising inventory accounted for 21 % of accounts payable.

At December 31, 2023, one seller of advertising inventory accounted for 29 % of accounts payable and accrued expenses and at December 31, 2022, one seller of advertising inventory accounted for 28 % of accounts payable and accrued expenses.

Foreign Currency Transactions and Translation

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Recently Adopted Accounting Standards

In July 2021, the FASB issued Update No.

2021-05, Leases (Topic 842)— Lessors – Certain Leases with Variable Lease Payments ("ASU 2021-05").

ASU 2021-05 requires a lessor to classify a lease with variable lease payments that do not depend on an index or rate as an operating lease if specified criteria are met.

The Company adopted ASU 2021-05 on January 1, 2022 on a prospective basis, which did not have a material impact on the Company’s consolidated financial statements and related disclosures.

Recent Accounting Pronouncements Not Yet Adopted

In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805) – Accounting for Contract Assets and Contract Liabilities from Contracts with Customers ("ASU 2021-08").

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ASU 2021-08 is effective for the Company beginning in the first quarter of 2023.

The Company will adopt this standard prospectively and apply the guidance to future acquisitions, if any.

The Company adopted this standard January 1, 2023 and will apply the guidance to future acquisitions, if any.

Recent Accounting Pronouncements Not Yet Adopted

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280) – Improvements to Reportable Segment Disclosures ("ASU 2023-07").

ASU 2023-07 expands public entities’ segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items, and interim disclosures of a reportable segment’s profit or loss and assets.

ASU 2023-07 is effective for annual periods beginning after December 15, 2023 and for interim periods beginning after December 15, 2024.

Early adoption is permitted.

The Company is currently evaluating the impact of adopting this new accounting guidance on its disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) – Improvements to Income Tax Disclosures ("ASU 2023-09") to enhance income tax information primarily through changes in the rate reconciliation and income taxes paid information.

ASU 20203-09 is effective for annual periods beginning after December 15, 2024 on a prospective basis.

The Company is evaluating the impact of adopting this new accounting guidance on its disclosures.

The Company does not believe there are any other recently issued and effective or not yet effective pronouncements that would have or are expected to have a material impact on the Company’s present or future consolidated financial statements.

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Net income (loss) $ ( 159,184 ) $ ( 130,323 ) $ 65

Weighted-average common shares outstanding 132,887 126,294 96,700

Weighted-average unvested restricted shares — — —

Weighted-average common shares outstanding used to compute net income (loss) per share 132,887 126,294 96,700

Weighted-average common shares outstanding used to compute net income (loss) per share - basic

136,620 132,887 126,294

Basic net income (loss) per share $ ( 1.17 ) $ ( 0.98 ) $ —

Diluted Income (Loss) Per Share:

Net income (loss) $ ( 130,323 ) $ 65 $ ( 53,432 )

Denominator adjustment:

Weighted-average common shares used in basic EPS 132,887 126,294 96,700

Net income (loss), diluted income (loss) $ ( 159,184 ) $ ( 130,323 ) $ 65

Weighted-average common shares used in basic income (loss) per share

136,620 132,887 126,294

Dilutive effect of weighted-average restricted stock units — — 5,294

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Options to purchase common stock 1,566 1,864 —

Unvested performance awards 124 — 40

Unvested performance stock units 84 124 —

ESPP shares 31 18 —

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For the years ended December 31, 2023 and December 31, 2022, the Company excluded outstanding performance stock units from the calculation of diluted net loss per share because they were anti-dilutive.

As of December 31, 2022, the performance stock units granted during April 2020, April 2021, August 2021, and February 2022 had expected achievement levels of 116 %, 0 %, 0 %, and 81 %, respectively.

As of December 31, 2020, the performance stock units granted during April 2020 had expected achievement level of 150 %.

As of December 31, 2023, the performance stock units granted during 2021, 2022, and 2023 had expected achievement levels of 0 %, 58 %, and 46 %, respectively.

As of December 31, 2022, the performance stock units granted during 2020, 2021, and 2022 had expected achievement level of 116 %, 0 %, and 81 %, respectively.

As of December 31, 2021, the Company included outstanding performance stock units in the calculation of diluted net income per share.

As of December 31, 2021, the performance stock units granted during April 2020, April 2021, and August 2021 had expected achievement levels of 150 %, 0 %, and 0 %, respectively.

As of December 31, 2021, the performance stock units granted during 2020 and 2021 had expected achievement levels of 150 % and 0 %, respectively.

Refer to Note 12 —"Stock-Based Compensation" for additional information related to performance stock units.

For the years ended December 31, 2022 and December 31, 2021, shares that would be issuable assuming conversion of all of the Convertible Senior Notes (as defined in Note 17) were excluded from the calculation of diluted loss per share because they were anti-dilutive.

Diluted earnings per share for the Convertible Senior Notes is calculated under the if-converted method in accordance with ASC 260, Earnings Per Share .

For the years ended December 31, 2023, 2022, and 2021, shares that would be issuable assuming conversion of all of the Convertible Senior Notes (as defined in Note 17) were excluded from the calculation of diluted loss per share because they were anti-dilutive.

The Convertible Senior Notes have an initial conversion rate of 15.6539 shares of common stock per $1,000 principal amount of the Convertible Senior Notes, which will be subject to anti-dilution adjustments in certain circumstances.

As of December 31, 2022 and 2021, the number of shares that would be issuable assuming conversion of all of the Convertible Senior Notes is approximately 6,261,560 .

Refer to Note 17—"Debt" for additional information related to accounting for Convertible Senior Notes issued and associated Capped Call Transactions.

As of December 31, 2023, 2022, and 2021, the number of shares that would be issuable assuming conversion of all of the Convertible Senior Notes is approximately 3,210,098 , 6,261,560 , and 6,261,560 , respectively.

Note 4— Revenues

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For certain advertising campaigns that are transacted through insertion orders, the Company reports revenue on a gross basis, based primarily on its determination that the Company acts as the primary obligor in the delivery of advertising campaigns for buyers with respect to such transactions.

The following table presents our revenue recognized on a net basis and on a gross basis for the years ended December 31, 2022, 2021, and 2020:

The following table presents the Company's revenue recognized on a net basis and on a gross basis for the years ended December 31, 2023, 2022, and 2021:

December 31, 2023 December 31, 2022 December 31, 2021

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Total $ 619,710 100 % $ 577,069 100 % $ 468,413 100 %

The following table presents our revenue by channel for the years ended December 31, 2022, 2021, 2020:

The following table presents the Company's revenue by channel for the years ended December 31, 2023, 2022, 2021:

December 31, 2023 December 31, 2022 December 31, 2021

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Allowance for doubtful accounts, beginning balance

$ 1,092 $ 3,475 $ 2,360

Allowance for doubtful accounts, assumed from mergers or acquisitions — — 835

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During the years ended December 31, 2023, 2022, and 2021, the provision for expected credit losses associated with accounts receivable and the offset by increases of contra seller payables related to recoveries of uncollected buyer receivables resulted in a net amount of bad debt each year.

During the year ended December 31, 2023, the increase in the provision for expected credit losses associated with accounts receivable of $ 20.1 million was offset by increases of contra seller payables related to recoveries of uncollected buyer receivables of $ 15.4 million, which resulted in an $ 4.7 million amount of bad debt expense.

The increase in the provision for expected credit losses was primarily attributed to one buyer filing for bankruptcy, resulting in $ 4.2 million of bad debt expense during the year ended December 31, 2023.

During the year ended December 31, 2022, the decrease in the provision for expected credit losses associated with accounts receivable of $ 1.7 million was offset by decreases of contra seller payables related to recoveries of uncollected buyer receivables of $ 1.6 million, which resulted in an $ 0.2 million amount of bad debt recoveries.

During the year ended December 31, 2021, the provision for expected credit losses associated with accounts receivable of $ 0.6 million was offset by increases of contra seller payables related to recoveries of uncollected buyer receivables of $ 0.5 million, which resulted in an immaterial amount of bad debt expense.

During the year ended December 31, 2020, the provision for expected credit losses associated with accounts receivable of $ 0.9 million was offset by increases of contra seller payables related to recoveries of uncollected buyer receivables of $ 1.0 million, which resulted in $ 0.1 million of bad debt recoveries.

Note 5— Fair Value Measurements

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The estimated fair value of Convertible Senior Notes is based on market rates and the closing trading price of the Convertible Senior Notes as of December 31, 2023 and 2022 and is classified as Level 2 in the fair value hierarchy.

At December 31, 2022, the estimated fair value of the Company's Term Loan B Facility was $ 333.3 million and at December 31, 2021, the estimated fair value of the Company's Term Loan B Facility approximated the carrying value.

At December 31, 2023 and 2022, the estimated fair value of the Company's Term Loan B Facility was $ 352.3 million and $ 333.3 million, respectively.

The estimated fair value is based on borrowing rates currently available to the Company for financing with similar terms and is classified as Level 2 in the fair value hierarchy.

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Depreciation expense on property and equipment totaled $ 24.0 million, $ 19.0 million, and $ 16.1 million for the years ended December 31, 2023, 2022, and 2021, respectively.

There were no impairment charges to property and equipment for the years ended December 31, 2022, 2021, and 2020.

As part of the April 30, 2021 acquisition of SpotX, the Company acquired finance leases related primarily to network hardware.

The accumulated depreciation related to assets under finance leases was approximately $ 1.3 million and $ 0.5 million as of December 31, 2022 and 2021, respectively, and was included in depreciation expense when recognized.

See Note 15 for more information regarding the related finance lease obligation.

There was impairment changes to property and equipment related to restructuring activities of $ 0.5 million for the year ended December 31, 2023 and there were no impairment charges to property and equipment for the years ended December 31, 2022 and 2021.

The Company's property and equipment, net by geographical region was as follows:

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In the years ended December 31, 2023, 2022, and 2021, amortization expense included the write-off of software development costs of $ 0.4 million, $ 1.5 million, and $ 0.1 million, in the respective periods, related to the abandonment of the associated projects.

During the fourth quarter of 2022, the Company reassessed the remaining estimated useful lives of capitalized software projects related to integration of its technology platforms.

The change in the remaining estimated useful lives for the related projects resulted in increased amortization expense of $ 0.7 million for the year ended December 31, 2022.

The increased amortization expense increased the basic and diluted loss per share by $ 0.01 , net of tax, for the year ended December 31, 2022.

During the fourth quarter of 2022, the Company reassessed the remaining estimated useful lives of capitalized software projects related to integration of its technology platforms, which were revised to end during the third quarter of 2023.

The change in the remaining estimated useful lives for the related projects resulted in increased amortization expense of $ 1.9 million and $ 0.7 million for the years ended December 31, 2023 and 2022, respectively.

The increased amortization expense increased the basic and diluted loss per share by $ 0.01 and $ 0.01 , net of tax, for the years ended December 31, 2023 and 2022, respectively.

Based on the Company’s internal use software development costs at December 31, 2023, excluding projects that are not ready for their intended use with a value of $ 3.9 million, estimated amortization expense of $ 9.3 million, $ 6.6 million, and $ 2.2 million is expected to be recognized in 2024, 2025, and 2026, respectively.

Note 8— Goodwill, Intangible Assets, and Capitalized Costs Incurred in Cloud Computing Arrangements

Note 8— Goodwill and Intangible Assets

Details of the Company’s goodwill were as follows (in thousands):

Beginning balance at December 31, 2021

Additions for Acquisition of SpotX (Note 9) 782,831

Additions for Acquisition of SpringServe (Note 9) 24,156

Additions for Acquisition of Nth Party (Note 9) 4,761

Ending balance at December 31, 2021

Additions for Acquisition of Carbon (Note 9) 8,456

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Ending balance at December 31, 2022

Additions or adjustments

Ending balance at December 31, 2023

The Company’s intangible assets as of December 31, 2023 and 2022 included the following:

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In-process research and development ( 4,832 ) ( 4,398 )

Non-compete agreements

( 750 ) ( 450 )

Non-compete agreements

( 185 ) ( 562 )

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The abandonment resulted in $ 3.3 million of impairment costs, which was included in merger, acquisition, and restructuring costs in the consolidated statements of operations.

During the fourth quarter of 2022, the Company reassessed the remaining estimated useful lives of the developed technology and in-process research and development related to the SpotX acquisition based on the remaining expected benefit from those assets.

The change in the remaining estimated useful lives for developed technology and in-process research and development resulted in increased amortization expense of $ 34.7 million for the year ended December 31, 2022.

The increased amortization expense increased the basic and diluted loss per share by $ 0.27 , net of tax, for the year ended December 31, 2022.

The change in the remaining estimated useful lives for developed technology and in-process research and development resulted in increased amortization expense of $ 97.6 million and $ 34.7 million for the years ended December 31, 2023 and 2022.

The increased amortization expense increased the basic and diluted loss per share by $ 0.71 and $ 0.27 , net of tax, for the years ended December 31, 2023 and 2022.

The estimated remaining amortization expense associated with the Company's intangible assets was as follows as of December 31, 2023:

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Total $ 51,011

The Company capitalizes costs related to arrangements for infrastructure as a service, platform as a service, and software as a service.

As of December 31, 2022 and 2021, capitalized costs associated with these arrangements was included in prepaid expenses and other current assets in the amounts of $ 0.7 million and $ 0.5 million, respectively, and within other assets, non-current in the amounts of $ 0.5 million and $ 0.7 million, respectively.

The amortization of these agreements was $ 0.7 million and $ 0.4 million for the years ended December 31, 2022 and 2021, respectively, and an insignificant amount for the year ended December 31, 2020.

The Company's qualitative assessment in the fourth quarter of 2023 did not indicate that it is more likely than not that the fair value of its goodwill, intangible assets, and other long-lived assets is less than the aggregate carrying amount.

Note 9— Business Combinations

2020 Merger—Telaria

On April 1, 2020, (the "Acquisition Date"), the Company completed the merger with Telaria.

Upon completion of the Telaria Merger, each share of Telaria common stock issued and outstanding was converted into 1.082 shares of Magnite common stock.

As a result, the Company issued 52,098,945 shares of Magnite common stock.

In connection with the Telaria Merger, Magnite also assumed Telaria’s 2013 Equity Incentive Plan, as amended;

2008 Stock Plan, as amended;

and the ScanScout, Inc.

2009 Equity Incentive Plan, as amended.

As of the Acquisition Date, former holders of Telaria common stock owned approximately 48 % and pre-merger holders of Magnite common stock owned approximately 52 % of the common stock of the combined company on a fully diluted basis.

As part of the Telaria Merger, existing outstanding restricted stock units of Telaria common stock and stock options to purchase common stock of Telaria were exchanged for 1.082 restricted stock units of the Company and options to purchase the Company's common stock, respectively.

The fair value of stock options exchanged on the date of the Telaria Merger attributable to pre-acquisition services was recorded as purchase consideration.

The fair value of the restricted stock units and stock options exchanged on the date of the Telaria Merger attributable to post-acquisition services will be recorded as additional stock-based compensation expense in the Company's consolidated statements of operations over their remaining requisite service (vesting) periods.

The following table summarizes the total purchase consideration (in thousands):

Shares of Magnite common stock $ 274,604

Fair value of stock-based awards exchanged 11,646

Acceleration of single trigger equity awards, converted 1,168

Total purchase consideration $ 287,418

The purchase consideration for the acquisition included 52,008,316 shares of the Company's common stock with a fair value of approximately $ 274.6 million, based on the Company's stock price as reported on the NYSE on the Acquisition Date.

The fair value of stock options and restricted stock units exchanged on the Acquisition Date attributable to pre-acquisition services of approximately $ 10.4 million and $ 1.2 million, respectively, have been recorded as purchase consideration.

In addition, the Company recorded additional purchase consideration associated with acceleration of 90,629 shares of common stock issued associated with single-trigger equity awards in the amount of $ 1.2 million.

The fair value of stock options and restricted stock units exchanged on the Acquisition Date attributable to post-acquisition services of $ 4.7 million and $ 12.2 million, respectively, will be recorded as additional stock-based compensation expense on the Company's consolidated statements of operations over their remaining requisite service (vesting) periods.

The fair value of the purchase price was allocated to the identifiable assets acquired and liabilities assumed based upon their estimated fair values as of the date of the acquisition as set forth below (in thousands):

Cash and cash equivalents $ 51,848

Accounts receivable, net 150,924

Prepaid expenses and other current assets 3,054

Property and equipment, net 1,814

Right-of-use lease asset 26,627

Intangible assets 103,410

Restricted cash 2,747

Other assets, non-current 369

Deferred tax assets, non-current 103

Goodwill 150,755

Total assets acquired 491,651

Accounts payable and accrued expenses 172,751

Lease liabilities - current portion 5,322

Deferred revenue 11

Other current liabilities 365

Lease liabilities - non-current portion 23,323

Other liabilities, non-current 194

Deferred tax liability 2,267

Total liabilities assumed 204,233

Total purchase price $ 287,418

The Company believes the amount of goodwill resulting from the purchase price allocation is primarily attributable to expected synergies from assembled workforce, an increase in development capabilities, increased offerings to customers, and enhanced opportunities for growth and innovation.

Goodwill will not be amortized but instead will be tested for impairment at least annually or more frequently if certain indicators of impairment are present.

In the event that goodwill has become impaired, the Company will record an expense for the amount impaired during the quarter in which the determination is made.

The acquired intangibles and goodwill resulting from the Telaria Merger are not amortizable for tax purposes.

The following table summarizes the components of the intangible assets and estimated useful lives as of the Acquisition Date (dollars in thousands):

Estimated Useful Life

Technology $ 58,000 5 years

In-process research and development 8,030 4.7 years*

Customer relationships 36,300 2.5 years

Backlog 880 0.75 years

Trademarks 200 0.25 years

Total intangible assets acquired $ 103,410

* In-process research and development consists of two projects with a weighted-average useful life of 4.7 years.

Amortization begins once associated projects are completed and it is determined the projects have alternative future use.

The fair value of the acquired technology and in-process research and development was valued using The Revenue Split Method.

This methodology included allocating future revenue projections to the existing technologies and applying decay rates and appropriate discount rates that reflect the respective intangible asset's relative risk profile when compared to other intangible assets as well as considering the risk associated with the overall business.

At the Acquisition Date, Telaria had existing Customer Relationships.

To the extent that future cash flows of the business would be negatively affected in the absence of these relationships, they would be deemed to have economic value.

The Company used the Loss‐of‐Revenue and Income Method in its valuation of the existing Customer Relationships.

This method attempts to quantify the scenario whereby the owner loses the right to the intangible asset and the resulting losses of revenue and income.

Under this analysis, the value of the cash flows with the intangible asset is compared to the value of the cash flows without the intangible asset and the difference represents the value of the intangible asset.

This methodology included applying a discount rate and the expected timing it would take to further enhance customer relationships.

The fair value of the backlog was based on the Excess Earnings Model, taking into consideration the existing contracts as of the Acquisition Date and the respective cost to complete the servicing of the existing agreements.

The resulting stream of after tax earnings were discounted to present value by applying an appropriate discount rate for the asset.

The discount rate was selected based on the intangible asset’s relative risk profile when compared to the other intangible assets as well as the discount rate for the overall business.

Intangible assets are generally amortized on a straight-line basis, which approximates the pattern in which the economic benefits are consumed, over their estimated useful lives.

Amortization of developed technology is included in cost of revenues and the amortization of customer relationships, backlog, and trademarks is included in sales and marketing expenses in the consolidated statements of operations.

Once the projects associated with acquired in-process research and development are completed, amortization will be included in cost of revenues in the consolidated statements of operations.

The intangible assets generated in the Telaria Merger are not tax deductible.

As such, as part of the Telaria Merger, deferred tax liabilities were established, which were fully offset by the estimated income tax effect of the partial release of Telaria's valuation allowance.

The Company recognized approximately $ 17.6 million of acquisition related costs during the year ended December 31, 2020 (see Note 13).

In addition, as part of the Telaria Merger, the Company acquired Telaria's U.S.

federal NOLs of approximately $ 126.1 million and state NOLs of approximately $ 87.6 million.

Pursuant to Section 382 of the Internal Revenue Code, Telaria, Inc.

underwent an ownership change for tax purposes.

As a result, the use of the NOLs will be subject to annual Section 382 use limitations.

The Company believes the ownership change will not impact the Company's ability to utilize substantially all of the NOLs to the extent it generates taxable income that can be offset by such losses.

Unaudited Pro Forma Information

The following table provides unaudited pro forma information as if Telaria had been merged with the Company as of January 1, 2019.

The unaudited pro forma information reflects adjustments for additional amortization resulting from the fair value adjustments to assets acquired and liabilities assumed, adjustments for alignment of accounting policies, and transaction expenses as if the Telaria Merger occurred on January 1, 2019.

The pro forma results do not include any anticipated cost synergies or other effects of the integration merged companies.

Accordingly, pro forma amounts are not necessarily indicative of the results that actually would have occurred had the acquisition been completed on the dates indicated, nor is it indicative of the future operating results of the combined company.

December 31, 2020

(in thousands)

Pro Forma Revenue $ 236,666

Pro Forma Net Loss $ ( 64,030 )

During the year ended December 31, 2020, post-merger revenue on a stand-alone basis for Telaria was $ 60.1 million.

During the year ended December 31, 2020, due to the process of integrating the operations of Telaria into the operations of the Company, the determination of Telaria's post-merger operating results on a standalone basis was impracticable.

2021 Acquisition—SpotX

On April 30, 2021, the Company completed the SpotX Acquisition, pursuant to a Stock Purchase Agreement, dated as of February 4, 2021 (the "Purchase Agreement"), by and between the Company and RTL US Holdings, Inc.

On April 30, 2021, the Company completed the SpotX Acquisition, pursuant to a Stock Purchase Agreement, dated as of February 4, 2021 (the "Purchase Agreement"), ("SpotX" and such acquisition the "SpotX Acquisition"), by and between the Company and RTL US Holdings, Inc.

The initial purchase price for the SpotX Acquisition was $ 560 million in cash ("Cash Consideration") and 14,000,000 shares of the Company's common stock.

Per the terms of the Purchase Agreement, at the completion of the Company’s offering of its Convertible Senior Notes, RTL elected to increase the Cash Consideration by an amount equal to 20 % of the gross proceeds of the Convertible Senior Notes (which amount was equal to $ 80 million) and to reduce the number of shares of common stock it would otherwise receive by a number of shares of common stock equal to 20 % of the gross proceeds of the proposed offering of notes ($ 80 million) divided by the closing price of a share of our common stock on the trading day immediately prior to the date of pricing of the proposed offering of notes ($ 49.21 ).

Per the terms of the Purchase Agreement, at the completion of the Company’s offering of its Convertible Senior Notes, RTL elected to increase the Cash Consideration by an amount equal to 20 % of the gross proceeds of the Convertible Senior Notes (which amount was equal to $ 80 million) and to reduce the number of shares of common stock it would otherwise receive by a number of shares of common stock equal to 20 % of the gross proceeds of the proposed offering of notes ($ 80 million) divided by the closing price of a share of the Company's common stock on the trading day immediately prior to the date of pricing of the proposed offering of notes ($ 49.21 ).

As a result of this election, the adjusted purchase price was $ 1.1 billion, prior to customary working capital adjustments and other adjustments, consisting of $ 640.0 million in cash plus 12,374,315 shares of common stock (based on the fair value of the Company's common stock on April 30, 2021).

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2021 Acquisition—SpringServe

On July 1, 2021, the Company, through its wholly-owned subsidiary, SpotX, completed the SpringServe Acquisition.

On July 1, 2021, the Company, through its wholly-owned subsidiary, SpotX, completed the acquisition of SpringServe, LLC ("SpringServe" and such acquisition the "SpringServe Acquisition").

As a result of the SpringServe Acquisition, SpringServe became a wholly-owned subsidiary of SpotX, and a wholly-owned indirect subsidiary of the Company.

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The table below excludes Nth Party as its impact on pro forma results were immaterial.

December 31, 2021 December 31, 2020

December 31, 2021

(in thousands)

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The Company completed the acquisition of the business of Carbon (AI) Limited ("Carbon" and such acquisition the "Carbon Acquisition"), a platform that enables publishers to measure, manage, and monetize audience segments, in February 2022 for a total purchase price of $ 23.1 million in cash.

Approximately $ 2.3 million of the purchase price was held back to cover possible indemnification claims, which is expected to be paid in cash one year after the acquisition.

Approximately $ 2.3 million of the purchase price was held back to cover possible indemnification claims, which was subsequently paid out in February 2023.

The Company acquired Carbon as part of its strategy to further invest in the development and enhancement of industry leading identity and audience solutions.

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Balance at December 31, 2022

Other comprehensive loss ( 1,775 )

Other comprehensive income

Balance at December 31, 2023

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2009 Equity Incentive Plan, as amended (the "ScanScout Plan").

All compensatory equity awards outstanding at December 31, 2022 were issued pursuant to the 2014 Equity Incentive Plan, the nToggle Plan, the Telaria Plan, the 2008 Stock Plan, the Inducement Plan, or the Company's 2007 Stock Incentive Plan.

No further awards were granted under the iSocket Plan, the Chango Plan, or the nToggle Plan from the date of acquisition and no further awards were granted under the 2007 Stock Incentive Plan since the IPO.

Available shares under the nToggle Plan and the Telaria Plan were rolled into the available share pool under the 2014 Equity Incentive Plan at the time of acquisition of each company, and available shares under the 2007 Stock Incentive Plan were rolled into the available share pool under the 2014 Equity Incentive Plan at the time of the IPO.

On January 1, 2023, pursuant to the evergreen provision in the Company's 2014 Equity Incentive Plan, the Company increased the aggregate number of shares of common stock that may be issued pursuant to stock awards by 6,700,286 shares.

On June 14, 2023, the Company's stockholders approved the Magnite, Inc.

Amended and Restated 2014 Equity Incentive Plan (the "Amended and Restated 2014 Equity Incentive Plan"), which, among other things, increased the aggregate maximum number of shares of common stock that may be issued pursuant to stock awards by 8,056,129 shares, removed the prior evergreen provision, and extended the plan through April 2033.

All compensatory equity awards outstanding at December 31, 2023 were issued pursuant to the Amended and Restated 2014 Equity Incentive Plan, the 2014 Equity Incentive Plan, the nToggle Plan, the Telaria Plan, the Inducement Plan, or the Company's 2007 Stock Incentive Plan.

The Company’s equity incentive plans provide for the grant of equity awards, including non-statutory or incentive stock options, restricted stock awards ("RSAs"), restricted stock units that vest based on continuous service ("RSUs"), and restricted stock units that include performance criteria (“performance stock units” or "PSUs"), to the Company's employees, officers, directors, and consultants.

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RSAs and RSUs vest at varying rates, typically approximately 25 % vesting after approximately one year of service and the remainder vesting annually, semi-annually, or quarterly thereafter.

The restricted stock units granted in 2022, 2021, and 2020, included 0.7 million, 0.4 million, and 0.7 million, respectively, awards that vest 50 % on each of the first and second anniversaries of the grant date.

The restricted stock units granted in 2023, 2022, and 2021, included 0 , 0.7 million, and 0.4 million, respectively, awards that vest 50 % on each of the first and second anniversaries of the grant date.

In addition, each Director of the Company's Board of Directors receives an annual grant which vests at the earlier of the one year anniversary of the grant date and the following annual shareholder meeting in addition to an initial equity awards in the first year of their election into the Board of Directors.

Options, RSAs, and RSUs granted under the plans accelerate under certain circumstances for certain participants upon a change in control, as defined in the governing plan.

No further awards were granted under the iSocket Plan, the Chango Plan,

or the nToggle Plan from the date of acquisition and no further awards were granted under the 2007 Stock Incentive Plan since the IPO.

An aggregate of 13,926,252 shares remained available for future grants at December 31, 2022 under the plans.

The 2014 Equity Incentive Plan has an evergreen provision pursuant to which the share reserve will automatically increase on January 1 st of each year in an amount equal to 5 % of the total number of shares of capital stock outstanding on December 31 st of the preceding calendar year, although the Company’s board of directors may provide for a lesser increase, or no increase, in any year.

The 2014 Inducement Grant Equity Incentive Plan has a provision pursuant to which the share reserve may be increased at the discretion of the Company's board of directors.

As of December 31, 2023, an aggregate of 23,180,894 shares remained available for future grants.

Stock Options

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Expired ( 145 ) $ 21.02

Forfeited ( 125 ) $ 12.14

Outstanding at December 31, 2023 4,262 $ 8.65 5.3 years $ 13,806

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Total fair value of options vested during the year ended December 31, 2023 was $ 4.7 million.

The Company estimates the fair value of stock options that contain service and/or performance conditions using the Black-Scholes option pricing model.

The Company estimates the fair value of stock options that contain service conditions using the Black-Scholes option pricing model.

The grant date fair value of options granted during the year ended December 31, 2023 was $ 7.27 per share.

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Restricted stock units outstanding and unvested at December 31, 2023

*At December 31, 2022, outstanding restricted stock units included 18,436 units that were vested but deferred.

11,450 $ 12.63

The weighted-average grant date fair value per share of restricted stock units granted during the year ended December 31, 2023 was $ 10.67 .

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Performance Stock Units

In April 2020, April 2021, and February 2022, the Company granted the Company's CEO 146,341 , 26,291 , and 86,806 performance stock units that vest based on share price metrics tied to total shareholder return over a three-year period with a fair value of $ 0.9 million, $ 1.4 million, and $ 1.5 million, respectively.

The grant date fair value per share of these grants was $ 6.15 , $ 52.49 , and $ 17.28 , respectively, which was estimated using a Monte-Carlo lattice model.

At December 31, 2022, the Company had unrecognized employee stock-based compensation expense for the April 2020, April 2021, and February 2022 grants of approximately $ 0.1 million, $ 0.6 million, and $ 1.0 million which is expected to be recognized over the remaining 0.3 years, 1.3 years, and 2.1 years, respectively.

Between 0 % and 150 % of the performance stock units will vest on the third anniversary of its grant date.

In August 2021, the Company granted the Company's CEO 379,635 performance stock units, which are subject to both time-based and performance-based vesting conditions.

The performance stock units consist of three equal tranches (each, a "Performance Tranche"), based on achievement of a share price condition if the Company achieves share price targets of $ 60.00 , $ 80.00 , and $ 100.00 , respectively over 60 consecutive trading days during a performance period commencing on August 26, 2022 and ending on August 26, 2026.

The Company has granted PSUs to select executive employees that vest based on share price metrics tied to total shareholder return relative to a peer group over a three-year period.

These PSUs are also subject to a time-based service component.

The grant date fair value for such PSUs was estimated using a Monte-Carlo simulation model that incorporates option-pricing inputs covering the period from the grant date through the end of the performance period.

Between 0 % and 150 % of the performance stock units will vest at the end of the performance period, which is generally on the third anniversary of the PSU grant date.

The Company has additionally granted 379,635 PSUs to the Company's CEO in August 2021, (the "August 2021 PSUs"), which are subject to both time-based and performance-based vesting conditions.

The PSUs consist of three equal tranches (each, a "Performance Tranche"), based on achievement of a share price condition if the Company achieves share price targets of $ 60.00 , $ 80.00 , and $ 100.00 , respectively, over 60 consecutive trading days during a performance period commencing on August 26, 2022 and ending on August 26, 2026.

To the extent any of the performance-based requirements are met, the Company's CEO must also provide continued service to the Company through at least August 26, 2024 to receive any shares of common stock underlying the grant and through August 26, 2026 to receive all of the shares of common stock underlying the performance units that have satisfied the applicable performance-based requirement.

The fair value of each of the Performance Tranches was $ 3.0 million, $ 2.8 million, and $ 2.6 million, respectively, and have a grant date fair value per share of restricted stock of $ 23.94 , $ 21.93 , and $ 20.30 , respectively, which was estimated using a Monte-Carlo lattice model.

At December 31, 2022, the Company had unrecognized employee stock-based compensation expense of approximately $ 1.7 million, $ 1.8 million, and $ 1.9 million, which is expected to be recognized over the remaining 1.7 years, 2.7 years, and 3.7 years, respectively.

Between 0 % and 100 % of the performance stock units will vest on each of the tranche dates.

For the years ended December 31, 2022, 2021 and 2020, the Company recognized $ 3.4 million, $ 1.4 million, and $ 0.2 million, respectively, of stock-based compensation related to these performance stock units.

Stock-based compensation expense for these awards is based on a performance measurement of 100 %.

Stock-based compensation expense for PSUs is based on a performance measurement of 100 %.

The compensation expense will not be reversed if the performance metrics are not met.

A summary of PSU activity for the year ended December 31, 2023 is as follows:

Number of Shares Weighted-Average Grant Date Fair Value

(in thousands)

Outstanding at December 31, 2022

Vested and released

( 138 ) $ 6.15

Outstanding at December 31, 2023

The grant date fair value for the PSUs was estimated using a Monte-Carlo simulation model.

The weighted-average input assumptions used by the Company were as follows:

December 31, 2023 December 31, 2022 December 31, 2021

Performance period (in years)

Risk-free interest rate 4.19 % 1.39 % 0.81 %

Expected volatility of Magnite 94 % 84 % 79 %

Expected volatility of selected peer companies*

64 % 63 % 61 %

Expected correlation coefficients of Magnite*

0.62 0.56 0.54

Expected correlation coefficients of selected peer companies*

0.54 0.52 0.54

Dividend yield — % — % — %

*For the year ended December 31, 2021, weighted-average input assumptions exclude the August 2021 PSUs as these were not assumptions used in the Monte-Carlo simulation model for this grant.

The intrinsic value of PSUs that vested during the year ended December 31, 2023 was $ 1.2 million.

At December 31, 2023, the intrinsic value of unvested performance stock units based on expected achievement levels was $ 2.5 million.

As of December 31, 2023, the Company had unrecognized stock-based compensation expense relating to outstanding PSUs of approximately $ 8.1 million, which will be recognized over a weighted-average period of 2.1 years.

Employee Stock Purchase Plan

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Offering periods generally commence and end in May and November of each year.

As of December 31, 2022, the Company has reserved 3,829,518 shares of its common stock for issuance under the ESPP.

The ESPP has an evergreen provision pursuant to which the share reserve will automatically increase on January 1 st of each year in an amount equal to 1 % of the total number of shares of capital stock outstanding on December 31 st of the preceding calendar year, although the Company’s board of directors may provide for a lesser increase, or no increase, in any year.

On January 1, 2023, pursuant to the evergreen provision in the Company's 2014 Employee Stock Purchase Plan, the Company increased the aggregate number of shares of common stock that may be issued pursuant to the Company's 2014 Employee Stock Purchase Plan by 1,340,057 shares.

On June 14, 2023, the Company's stockholders approved the Magnite, Inc.

Amended and Restated 2014 Employee Stock Purchase Plan (the "Amended and Restated 2014 Employee Stock Purchase Plan"), which, among other things, removed the evergreen provision and extended the plan through June 2033.

As of December 31, 2023, the Company has reserved 4,730,838 shares of its common stock for issuance under the Company's Amended and Restated 2014 Employee Stock Purchase Plan.

Stock-Based Compensation Expense

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Total stock-based compensation expense $ 72,617 $ 64,118 $ 40,735

For the year ended December 31, 2022, the Company recognized $ 6.4 million of tax expense on stock-based compensation expense related to 2022, which was reflected in the provision (benefit) for income taxes in the consolidated statements of operations.

For the year ended December 31, 2022, tax benefit realized related to awards vested or exercised during 2022 was $ 9.6 million.

For the year ended December 31, 2021, the Company recognized $ 151.6 million of tax benefit on stock-based compensation expense related to 2021 and years prior, which was reflected in the provision (benefit) for income taxes in the consolidated statements of operations.

For the year ended December 31, 2021, tax benefit realized related to awards vested or exercised during 2021 and years prior was $ 40.5 million.

Due to the full valuation allowance provided on its net deferred tax assets, the Company had no t recorded any tax benefit attributable to stock-based awards for the year ended December 31, 2020.

For the year ended December 31, 2023, the Company recognized $ 5.5 million of income tax expense on stock-based compensation expense related to 2023, which was reflected in the provision (benefit) for income taxes in the consolidated statements of operations.

For the year ended December 31, 2023, income tax benefit realized related to awards vested or exercised during 2023 was $ 12.5 million.

For the year ended December 31, 2022, the Company recognized $ 6.4 million of income tax expense on stock-based compensation expense related to 2022, which was reflected in the provision (benefit) for income taxes in the consolidated statements of operations.

For the year ended December 31, 2022, income tax benefit realized related to awards vested

or exercised during 2022 and years prior was $ 9.6 million.

For the year ended December 31, 2021, the Company recognized $ 151.6 million of income tax benefit on stock-based compensation expense related to 2021 and years prior, which was reflected in the provision (benefit) for income taxes in the consolidated statements of operations.

For the year ended December 31, 2021, income tax benefit realized related to awards vested or exercised during 2021 and years prior was $ 40.5 million.

Note 13— Merger, Acquisition, and Restructuring Costs

Merger, acquisition, and restructuring costs consist primarily of professional services fees and employee termination costs, including stock-based compensation charges, associated with the Telaria Merger, the SpotX Acquisition, the SpringServe Acquisition, and restructuring activities.

Merger, acquisition, and restructuring costs consist primarily of professional services fees and employee termination costs, including stock-based compensation charges, associated with the SpotX Acquisition, the SpringServe Acquisition, and restructuring activities.

During the year ended December 31, 2023, these activities included the Company's reduction of its global workforce primarily associated with the elimination of duplicative roles and other costs associated with the consolidation of its legacy CTV and SpotX CTV platforms following the SpotX Acquisition, including loss contracts for office facilities the Company does not plan to continue to occupy and impairment charges related to certain assets it no longer plans to utilize.

The following table summarizes merger, acquisition, and restructuring cost activity:

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(in thousands)

Professional Service (investment banking advisory, legal and other professional services) $ 917 $ 28,422 $ 9,935

Personnel related (severance and one-time termination benefit costs) $ 3,218 $ 1,227 $ 6,184

Loss contracts (facility related) 2,190 — 2,500

Exit costs 1,408 — —

Impairment of property and equipment, net (Note 6)

Non-cash stock-based compensation (double trigger acceleration and severance) 143 2,004 1,071

Impairment costs of abandoned technology 3,320 — —

Loss contracts (lease related) — 2,500 —

Impairment costs of abandoned technology (Note 8)

Professional services (investment banking advisory, legal and other professional services) — 917 28,422

Total merger, acquisition, and restructuring costs $ 7,465 $ 7,468 $ 38,177

Accrued restructuring costs related to mergers and acquisitions were $ 1.2 million and $ 2.7 million at December 31, 2022 and December 31, 2021, respectively and were primarily related to the SpotX Acquisition, the SpringServe Acquisition, and the Telaria Merger.

Accrued restructuring costs related to mergers, acquisition, and restructuring activities were primarily related to the SpotX Acquisition and the SpringServe Acquisition.

Accrued restructuring costs associated with personnel costs are included in accounts payable and accrued expenses and accruals related to assumed loss contracts are included in other current liabilities and other liabilities, non-current on the Company's consolidated balance sheets.

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(in thousands)

Accrued merger.

acquisition, and restructuring costs at beginning of period $ 2,742 $ 2,935 $ —

Restructuring costs (personnel related and non-cash stock-based compensation) 3,231 7,255 7,617

Restructuring activity, merger and acquisition loss contracts — 2,500 3,543

Restructuring activity, impairments 3,320 — —

Accrued merger, acquisition, and restructuring costs at beginning of period

$ 1,222 $ 2,742 $ 2,935

Personnel related and non-cash stock-based compensation

3,361 3,231 7,255

Loss contracts (facility related)

2,190 — 2,500

Impairment of property and equipment, net

Impairment costs of abandoned technology

Cash paid for restructuring costs ( 4,521 ) ( 2,747 ) ( 6,377 )

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Total provision (benefit) for income taxes $ 1,637 $ ( 5,274 ) $ ( 95,053 )

The Company recorded an income tax benefit of $ 5.3 million for the year ended December 31, 2022 compared to an income tax benefit of $ 95.1 million and income tax expense of $ 0.7 million for the years ended December 31, 2021 and 2020, respectively.

The tax benefit for the year ended December 31, 2022 was primarily the result of the domestic valuation allowance on the Company's deferred tax asset and the tax liability associated with foreign subsidiaries.

The tax benefit for the year ended December 31, 2021 was primarily the result of the deferred tax liability associated with acquisitions that occurred during the year and the tax liability associated with foreign subsidiaries.

The tax expense for the year ended December 31, 2020 was primarily the result of the domestic valuation allowance and the tax liability associated with the foreign subsidiaries.

The Company recorded an income tax expense of $ 1.6 million for the year ended December 31, 2023 compared to an income tax benefit of $ 5.3 million and $ 95.1 million for the years ended December 31, 2022 and 2021, respectively.

The income tax expense for the year ended December 31, 2023 was primarily the result of the domestic valuation allowance on the Company's deferred tax assets and the federal, state, and foreign income tax liabilities.

The income tax benefit for the year ended December 31, 2022 was primarily the result of recognizing the benefit of deferred tax assets previously subject to the domestic valuation allowance and the income tax liability associated with foreign subsidiaries.

The net deferred tax liabilities recorded in connection with the prior year’s acquisitions and current taxable income for the year provided sources of taxable income to support the realization of pre-existing deferred tax assets.

The income tax benefit for the year ended December 31, 2021 was primarily the result of realizing the benefit of deferred tax assets previously subject to the domestic valuation allowance as a result of the deferred tax liabilities associated with acquisitions that occurred during the year and the income tax liability associated with foreign subsidiaries.

Set forth below is a reconciliation of the components that caused the Company’s provision (benefit) for income taxes to differ from amounts computed by applying the U.S.

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Deferred Tax Assets:

Allowance for doubtful accounts

Accrued liabilities 1,133 1,308

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Total deferred tax liabilities ( 20,921 ) ( 70,917 )

Net deferred tax assets (liability) $ ( 2,694 ) $ ( 11,496 )

As of December 31, 2022, the net deferred tax liability of $ 2.7 million is presented in the Company's consolidated balance sheets as deferred tax liabilities, net of $ 5.1 million and other assets, non-current of $ 2.4 million.

As of December 31, 2021, the net deferred tax liability of $ 11.5 million is presented in the Company's consolidated balance sheets as deferred tax liabilities, net of $ 13.3 million and other assets, non-current of $ 1.8 million.

The valuation allowance was increased by $ 20.7 million for the year

ended December 31, 2022, and reduced by $ 53.9 million, and increased by $ 16.4 million for the years ended December 31, 2021 and 2020, respectively.

Net deferred tax liabilities

$ ( 315 ) $ ( 2,694 )

As of December 31, 2023, the net deferred tax liabilities of $ 0.3 million is presented in the Company's consolidated balance sheets as deferred tax liabilities, net of $ 0.7 million and other assets, non-current of $ 0.4 million.

As of December 31, 2022, the net deferred tax liabilities of $ 2.7 million is presented in the Company's consolidated balance sheets as deferred tax liabilities, net of $ 5.1 million and other assets, non-current of $ 2.4 million.

The valuation allowance was increased by $ 30.2 million for the year ended December 31, 2023, and increased by $ 20.7 million, and reduced by $ 53.9 million for the years ended December 31, 2022 and 2021, respectively.

At December 31, 2023, the Company had U.S.

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At December 31, 2023, the Company had foreign NOLs of approximately $ 23.3 million, which will begin to expire in 2026.

At December 31, 2022, the Company had acquired federal research and development tax credit carryforwards of approximately $ 3.7 million, and state research and development tax credits of approximately $ 9.9 million, both of which carry forward indefinitely.

No amounts for any federal or state research and development tax credits for the years ended December 31, 2020, 2021, or 2022 related to business operations are included herein.

At December 31, 2023, the Company had acquired federal research and development tax credit carryforwards of approximately $ 4.4 million which will begin to expire in 2028, and state research and development tax credits of approximately $ 10.5 million, the majority of which carry forward indefinitely.

On August 16, 2022, President Biden signed the Inflation Reduction Act of 2022 (the “IRA”) into law.

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The impact of this latter provision to the Company will be dependent upon the extent of share repurchases made in future periods.

In addition, various foreign jurisdictions where the Company has activity have enacted or are considering enacting a variety of measures that could impact our tax liabilities.

In addition, various foreign jurisdictions where the Company has activity have enacted or are considering enacting a variety of measures that could impact the Company's tax liabilities.

The Company is monitoring new legislation and evaluating the potential tax implications of these measures globally.

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both underwent ownership changes for tax purposes (i.e.

a more than 50% change in stock ownership in aggregated 5% shareholders) on April 1, 2020 due to the Telaria Merger.

a more than 50% change in stock ownership in aggregated 5% shareholders) on April 1, 2020 due to the merger with Telaria.

As a result, the use of the Company’s total domestic NOL carryforwards and tax credits generated prior to the ownership change will be subject to annual use limitations under Section 382 and Section 383 of the Code and comparable state income tax laws.

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NOL’s arising in a tax year ending in or before 2017 can offset 100% of taxable income, are available for carryback, and expire 20 years after they arise.

At December 31, 2022, unremitted earnings of the subsidiaries outside of the United States were approximately $ 38.9 million, on which the Company recorded a provisional transition tax of $ 6.1 million.

At December 31, 2023, unremitted earnings of the subsidiaries outside of the United States were approximately $ 30.8 million.

The Company’s intention is to indefinitely reinvest these earnings outside the United States.

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Due to the net operating loss carryforwards, the Company's United States federal and a majority of its state returns are open to examination by the Internal Revenue Service and state jurisdictions for all years since inception.

The 2017 U.S.

Return for Telaria was under examination by the IRS, which was closed during the period ended June 30, 2021 with no change to tax as reported.

The IRS is currently conducting a Form 1042 Withholding Tax Audit for Telaria for 2017.

The Company settled the audit during the quarter ended December 31, 2022.

Tax due was not material.

For the Netherlands, Malaysia, India, Sweden, and the United Kingdom, all tax years remain open for examination by the local country tax authorities, for France only 2020 and forward are open, for Singapore only 2019 and forward are open for examination, for New Zealand, Australia, Brazil, and Germany 2018 and forward are open for examination, for Canada 2017 and forward are open for examination, and for Japan and Italy 2016 and forward remain open for examination.

For the Netherlands, India, Sweden, and the United Kingdom, all tax years remain open for examination by the local country tax authorities, for France only 2021 and forward are open, for Singapore only 2019 and forward are open for examination, for New Zealand, Australia, Brazil, and Germany 2019 and forward are open for examination, for Canada, Italy, and Malaysia 2018 and forward are open for examination, and for Japan 2017 and forward remain open for examination.

The Company does not expect its uncertain income tax positions to have a material impact on its consolidated financial statements within the next twelve months.

Note 15— Leases

The Company has operating and finance leases for office facilities, data centers, and equipment.

The Company has operating leases for office facilities and data centers.

The lease terms of the Company’s leases generally range from 1.0 year to 10.0 years.

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As of December 31, 2023 and December 31, 2022, a weighted average discount rate of 6.19 % and 6.11 %, respectively, were applied to the remaining lease payments to calculate the lease liabilities included within the consolidated balance sheets.

For the years ended December 31, 2022, 2021 and 2020, the Company recognized $ 23.3 million, $ 20.7 million and $ 13.4 million of lease expense, respectively, which included operating lease expenses associated with leases included in the lease liability and ROU asset on the consolidated balance sheets.

In addition, for the years ended December 31, 2022, 2021 and 2020, the Company recognized expenses of $ 57.9 million, $ 35.1 million and $ 20.4 million, respectively, for cloud-based services and other lease costs related to data centers and $ 1.2 million, $ 1.2 million and $ 1.0 million, respectively, of lease expense related to short-term leases that are not included in the ROU asset or lease liability balances.

Operating lease expense associated with leases included in the lease liability and right of use ("ROU") asset on the consolidated balance sheets were $ 24.5 million, $ 23.3 million and $ 20.7 million for the years ended December 31, 2023, 2022 and 2021, respectively.

For lease expenses not included in the Company's ROU asset and lease liability balances, the Company recognized short term lease expense of $ 0.5 million, $ 1.2 million and $ 1.2 million and variable lease expense of $ 3.8 million, $ 3.1 million, and $ 2.4 million for the years ended December 31, 2023, 2022 and 2021, respectively.

The maturity of the Company's lease liabilities associated with leases included in the lease liability and ROU asset were as follows as of December 31, 2023 (in thousands):

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Lease liabilities—total (discounted) $ 70,067

The Company also received rental income of $ 5.2 million, $ 4.4 million, and $ 3.7 million for real estate leases for which it subleases the property to a third party during the years ended December 31, 2022, 2021, and 2020, respectively.

The Company also received rental income of $ 5.3 million, $ 5.2 million, and $ 4.4 million for real estate leases for which it subleased the property to a third party during the years ended December 31, 2023, 2022, and 2021, respectively.

Rental income is included in other income in the consolidated statements of operations.

In addition to the lease liabilities included in these consolidated financial statements at December 31, 2022, during 2022, the Company entered into agreements for office space that have not commenced as of December 31, 2022, and is therefore, not included in the lease liability on the balance sheet.

The Company has future commitments totaling $ 2.2 million with a weighted average term of 10.1 years.

As part of the April 30, 2021 acquisition of SpotX, the Company acquired finance leases related primarily to computer equipment and network hardware.

These finance leases are included in lease liabilities - current portion for $ 0.3 million and $ 0.8 million as of December 31, 2022 and December 31, 2021, respectively, and lease liabilities, non-current in the amount of $ 0.3 million as of December 31, 2021.

There were no amounts of lease liabilities, non-current as of December 31, 2022.

Note 16— Commitments and Contingencies

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As of December 31, 2023 and 2022, the Company had $ 5.3 million and $ 5.3 million, respectively, of letters of credit associated with office leases available for borrowing, on which there were no outstanding borrowings as of either date.

In the normal course of business, the Company enters into non-cancelable contractual obligations with various parties, primarily related to software services agreements and data center providers that are not included in the Company's lease liability obligations and ROU assets.

In the normal course of business, the Company enters into non-cancelable contractual obligations with various parties, primarily related to software services agreements and data center providers.

As of December 31, 2023, the Company's outstanding non-cancelable contractual obligations with a remaining term of one year or longer consist of the following (in thousands):

2024 $ 62,038

Total $ 86,724

Additionally, as of December 31, 2022, the Company has an agreement for third-party cloud-managed services containing commitments that are variable in nature.

Under this agreement, the Company has a non-cancelable minimum spend commitment from July 2023 to June 2025 based on actual spend, as defined in the agreement, with the third-party provider from July 2022 to June 2023.

The estimated non-cancelable minimum annual obligation is approximately $ 27 million in each twelve-month period (i.e., July 2023 to June 2024 and July 2024 to June 2025), based on spend in the six months ended December 31, 2022.

Per the agreement, the commitment from July 2023 to June 2025 will generally increase as the amount of spend during the period from July 2022 to June 2023 increases.

Because the Company expects to continue to spend under this agreement through June 2023, the Company also expects that the minimum future commitment will likely increase as a result of the higher level of spend.

The amounts above include commitments under a cloud-managed services agreement, under which the Company has a non-cancelable minimum spend commitment from July 2023 to June 2025 of $ 57.6 million in each twelve-month period (i.e.

July 2023 to June 2024 and July 2024 to June 2025).

The minimum spend commitment reflected above approximates the manner in which the Company expects to fulfill the obligations.

Guarantees and Indemnification

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The Company and its subsidiaries may from time to time be parties to legal or regulatory proceedings, lawsuits and other claims incident to their business activities and to the Company’s status as a public company.

Such matters may include, among other things, assertions of contract breach or intellectual property infringement, claims for indemnity arising in the course of the Company’s business, regulatory investigations or enforcement proceedings, and claims by persons whose employment has been terminated.

Such matters may include, among other things, assertions of contract breach or intellectual property infringement, claims for indemnity arising in the course of the Company’s business, regulatory investigations, audits by taxing authorities, or enforcement proceedings, and claims by persons whose employment has been terminated.

Such matters are subject to many uncertainties, and outcomes are not predictable with assurance.

Consequently, management is unable to ascertain the ultimate aggregate amount of monetary liability, amounts which may be covered by insurance or recoverable from third parties, or the financial impact with respect to such matters as of December 31, 2023.

However, based on management’s knowledge as of December 31, 2022, management believes that the final resolution of these matters known at such

date, individually and in the aggregate, will not have a material adverse effect upon the Company’s consolidated financial position, results of operations or cash flows.

However, based on management’s knowledge as of December 31, 2023, management believes that the final resolution of these matters known at such date, individually and in the aggregate, will not have a material adverse effect upon the Company’s consolidated financial position, results of operations or cash flows.

Employment Contracts

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Maturities of the principal amount of the Company's long-term debt as of December 31, 2023 are as follows (in thousands):

Thereafter 336,600

Total (discounted) $ 754,600

Amortization of the debt issuance cost and the discount associated with our indebtedness totaled $ 6.3 million and $ 4.5 million for the years ended December 31, 2022 and 2021, respectively.

Amortization of the debt issuance cost and the discount associated with the Company's indebtedness totaled $ 5.8 million, $ 6.3 million, and $ 4.5 million for the years ended December 31, 2023, 2022, and 2021, respectively.

Amortization of debt issuance costs is computed using the effective interest method and is included in interest expense.

In addition, amortization of deferred financing costs was $ 0.5 million and $ 0.4 million for the years ended December 31, 2022 and 2021, respectively.

In addition, amortization of deferred financing costs was $ 0.5 million, $ 0.5 million, and $ 0.4 million for the years ended December 31, 2023, 2022, and 2021, respectively.

Deferred financing costs are included in prepaid expenses and other current assets and other assets, non-current assets.

Amortization of debt issuance cost and discount as well as amortization of deferred financing costs were immaterial for the year ended December 31, 2020.

On September 25, 2020, the Company amended and restated its loan and security agreement with Silicon Valley Bank ("SVB") (the "Loan Agreement"), which was scheduled to expire on September 26, 2020.

The Loan Agreement provides a senior secured revolving credit facility of up to the lesser of $ 60.0 million and 85 % of eligible accounts receivable, with a maturity date of September 25, 2022.

The Loan Agreement includes a letter of credit, foreign exchange and cash management facility with a sublimit up to $ 10.0 million.

On April 30, 2021, the Company entered into the Credit Agreement.

In connection with entering into the Credit Agreement, the Loan Agreement with SVB was terminated on April 30, 2021.

As of the termination date, there were no amounts outstanding under the Loan Agreement.

Convertible Senior Notes and Capped Call Transactions

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(ii) senior in right of payment to any of the Company’s future indebtedness that is expressly subordinated to the Convertible Senior Notes;

(iii) effectively subordinated to the Company’s existing and future secured indebtedness, to the extent of the value of the collateral securing that indebtedness, including amounts outstanding under our Loan Agreement or our new Credit Agreement (see section below);

and (iv) structurally subordinated to all existing and future indebtedness and other liabilities, including trade payables, and (to the extent we are not a holder thereof) preferred equity, if any, of the Company’s subsidiaries that do not guarantee the Convertible Senior Notes.

and (iv) structurally subordinated to all existing and future indebtedness and other liabilities, including trade payables, and (to the extent the Company is not a holder thereof) preferred equity, if any, of the Company’s subsidiaries that do not guarantee the Convertible Senior Notes.

The Convertible Senior Notes accrue interest at 0.25 % per annum payable semi-annually in arrears on March 15 and September 15 of each year, beginning on September 15, 2021.

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Subject to the terms of the indenture agreement, the Company has the right, at its election, to redeem all, or any portion (subject to the partial redemption limitation) in an authorized denomination, of the Convertible Senior Notes, at any time, and from time to time, on a redemption date on or after March 20, 2024 and on or before the 40 th scheduled trading day immediately before the maturity date, for cash, but only if the "last reported sale price," as defined under the Offering Memorandum, per share of common stock exceeds 130 % of the “conversion price” on (i) each of at least 20 trading days, during the 30 consecutive trading days ending on, and including, the trading day immediately before the date the Company sends the related redemption notice;

and (ii) the trading day immediately before the date we send such notice.

and (ii) the trading day immediately before the date the Company sends such notice.

In addition, calling any note for redemption will constitute a "make-whole fundamental change" (as defined below) with respect to that note, in which case the conversion rate applicable to the conversion of that note will be increased in certain circumstances if it is converted after it is called for redemption.

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Any shares required to be issued by the Company over this amount would have net earnings per share dilution impact.

By entering into the Capped Call Transactions, the Company expects to reduce the potential dilution to its common stock (or, in the event the conversion is settled in cash, to reduce its cash payment obligation) in the event that at the time of conversion its stock price exceeds the conversion price under the Convertible Senior Notes.

Convertible Senior Notes.

The Company paid $ 39.0 million for the Capped Call Transactions, which was recorded as additional paid-in capital, using a portion of the gross proceeds from the sale of the Convertible Senior Notes.

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The debt issuance costs are amortized on an effective interest basis over the term of the Convertible Senior Notes and are included in interest expense and amortization of debt discount in the accompanying consolidated statements of operations.

During the year ended December 31, 2023, the Company repurchased part of its Convertible Senior Notes in the open market with cash on hand for $ 165.5 million.

The Company recognized a gain on extinguishment of debt of $ 26.5 million related to the repurchase of $ 194.9 million of principal balance of Convertible Senior Notes and $ 2.9 million of unamortized debt issuance costs associated with the extinguished debt during the year ended December 31, 2023.

The gain on extinguishment is included in other (income) expense in the Company's consolidated statement of operations.

The following table sets forth interest expense related to the Convertible Senior Notes for the years ended December 31, 2023, 2022, and 2021:

December 31, 2023

December 31, 2021

December 31, 2022 December 31, 2021

(in thousands, except interest rates)

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On April 30, 2021, the Company entered into a credit agreement (the "Credit Agreement") with Goldman Sachs Bank USA as administrative agent and collateral agent, and other lender parties thereto.

The Credit Agreement provides for a $ 360.0 million seven-year senior secured term loan facility ("Term Loan B Facility") and a $ 52.5 million senior secured revolving credit facility (the "Revolving Credit Facility").

The Credit Agreement provides for a $ 360.0 million seven-year senior secured term loan facility ("Term Loan B Facility"), which matures in April 2028, and a $ 52.5 million senior secured revolving credit facility (the "Revolving Credit Facility"), which matures in December 2025.

As part of the Term Loan B Facility, the Company received $ 325 million in proceeds, net of discounts and fees, which were used to finance the SpotX Acquisition and related transactions, and for general corporate purposes.

Loans, if any, under the Revolving Credit Facility are expected to be used for general corporate purposes.

The obligations under the

Credit Agreement are secured by substantially all of the assets of the Company and those of its subsidiaries that are guarantors under the Credit Agreement.

The obligations under the Credit Agreement are secured by substantially all of the assets of the Company and those of its subsidiaries that are guarantors under the Credit Agreement.

Amounts outstanding under the Credit Agreement accrue interest at a rate equal to either, (1) for the Term Loan B Facility, at the Company’s election, the Eurodollar Rate (as defined in the Credit Agreement) plus a margin of 5.00 % per annum, or ABR (as defined in the Credit Agreement) plus a margin of 4.00 %, and (2) for the Revolving Credit Facility, at the Company’s election, the Eurodollar Rate plus a margin of 4.25 % to 4.75 %, or ABR plus a margin of 3.25 % to 3.75 %, in each case, depending on the Company’s first lien net leverage ratio.

In June 2023, the Company amended its Credit Agreement to transition away from a variable interest rate based on the Eurodollar Rate towards a similar variable interest rate based on Adjusted Term SOFR, as defined in the amendment to the Credit Agreement, which is based on the Secured Overnight Financing Rate ("SOFR").

As of December 31, 2023, the contractual interest rate related to the Term Loan B Facility was 10.56 %.

The covenants of the Credit Agreement include customary negative covenants that, among other things, restrict the Company’s ability to incur additional indebtedness, grant liens and make certain acquisitions, investments, asset dispositions and restricted payments.

restricted payments.

In addition, the Credit Agreement contains a financial covenant, tested on the last day of any fiscal quarter if utilization of the Revolving Credit Facility exceeds 35 % of the total revolving commitments, that requires the Company to maintain a first lien net leverage ratio not greater than 3.25 to 1.00.

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The Credit Agreement calls for customary scheduled loan amortization payments of 0.25 % of the initial principal balance payable quarterly (i.e.

1 % in aggregate per year) as well as a provision that requires the Company to prepay the Term Loan B based on an annual calculation of cumulative free cash flow ("Excess Cash Flow") generated by the company as defined within the terms of the Agreement.

1 % in aggregate per year) as well as a provision that requires the Company to prepay the Term Loan B Facility based on an annual calculation of cumulative free cash flow ("Excess Cash Flow") generated by the Company as defined within the terms of the Credit Agreement.

The Company was not required to make any such mandatory prepayment required by the Excess Cash Flow provision for the period ended December 31, 2023.

In addition, the Credit Agreement will mature in the event that any portion of the Convertible Senior Notes remains outstanding 91 days prior to the maturity date of the Convertible Senior Notes.

In addition, the Term Loan B Facility will mature in the event that any portion of the Convertible Senior Notes remains outstanding 91 days prior to the maturity date of the Convertible Senior Notes.

On June 28, 2021, the Company entered into an Incremental Assumption Agreement (the "Incremental Agreement") to the Credit Agreement.

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December 31, 2023

December 31, 2021

(in thousands.

except interest rates)

December 31, 2022 December 31, 2021

(in thousands, except interest rates)

Contractual interest expense $ 36,261 $ 24,322 $ 14,074

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2027 1,500 2,341

Thereafter 498 775

Total $ 6,594 $ 10,289

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Under the 2021 Repurchase Plan, 1,592,257 shares were purchased in open market purchases through December 31, 2023 for a total of approximately $ 21.7 million at an average of $ 13.61 per share.

In February 2023, the 2021 Repurchase Plan was replaced by the 2023 Repurchase Plan (Note 20).

For accounting purposes, common stock repurchases under our stock repurchase program are recorded based upon the purchase date of the applicable trade.

In February 2023, the Board of Directors approved a repurchase plan (the “February 2023 Repurchase Plan”), pursuant to which the Company was authorized to repurchase common stock or Convertible Senior Notes, with an aggregate market value of up to $ 75.0 million, through February 16, 2025.

The repurchase program allowed the Company to repurchase its common stock or Convertible Senior Notes using open market stock purchases, privately negotiated transactions, block trades or other means in accordance with U.S.

securities laws.

The February 2023 Repurchase Plan was completed during the second quarter of 2023.

On August 4, 2023, the Board of Directors approved a new repurchase plan (the "August 2023 Repurchase Plan"), pursuant to which the Company is authorized to repurchase common stock or Convertible Senior Notes, with an aggregate market value of up to $ 100.0 million, through August 4, 2025.

As of December 31, 2023, $ 9.5 million remains available under the August 2023 Repurchase Plan.

For accounting purposes, common stock repurchases under the Company's repurchase programs are recorded based upon the purchase date of the applicable trade.

Repurchased shares are accounted for as treasury stock in the consolidated balance sheets and have all been subsequently retired.

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On January 1, 2024, the Company granted 6,352,327 restricted stock units, 129,870 stock options, and 486,431 performance stock units to the Company's employees.

The RSUs granted will vest over four years from issuance with approximately 25 % after one year , and the remainder vesting quarterly thereafter.

The options granted will vest over four years from grant date, with 25 % vesting after one year and the remainder vesting monthly thereafter.

The RSUs granted will vest over four years from issuance with 25 % after one year , and the remainder vesting quarterly thereafter.

Between 0 % and 150 % of the performance stock units will vest on the third anniversary of its grant date based on certain stock price performance metrics.

On January 19, 2023, the Company announced that it would be reducing its global workforce by approximately 6 %.

The reduction in force is primarily associated with the elimination of duplicative roles resulting from the integration of the Company's CTV platforms and the realization of acquisition operating cost synergies.

On February 16, 2023, the Company's Board of Directors approved a repurchase plan (the "2023 Repurchase Plan"), pursuant to which the Company is authorized to purchase up to an aggregate of $ 75.0 million of common stock or Convertible Senior Notes through February 16, 2025.

The 2023 Repurchase Plan allows the Company to repurchase its common stock or Convertible Senior Notes using open market stock purchases, privately negotiated transactions, block trades or other means in accordance with U.S.

The PSUs will vest on the three-year anniversary of the grant date based on certain stock price performance metrics to be measured on each anniversary date.

The award is eligible to vest as to 0 % to 150 % of the target number of PSUs.

On February 1, 2024, the Company’s Board of Directors approved a repurchase program (the "February 2024 Repurchase Plan"), under which the Company is authorized to purchase up to $ 125.0 million of its common stock or Convertible Senior Notes through February 1, 2026.

The February 2024 Repurchase Plan allows the Company to repurchase its common stock or Convertible Senior Notes using open market stock purchases, privately negotiated transactions, block trades or other means in accordance with U.S.

securities laws.

The number of shares or notes repurchased and the timing of repurchases will depend on a number of factors, including, but not limited to, price, trading volume and general market conditions, along with working capital requirements, general business conditions, other opportunities that the Company may have for the use or investment of its capital and other factors.

The repurchase program does not obligate the Company to repurchase any particular amount of common stock or notes and may be suspended, modified or discontinued at any time at the Company’s discretion.

The Company intends to finance the repurchase program through cash on hand.

The February 2024 Repurchase Plan does not obligate us to repurchase any particular amount of common stock or Convertible Senior Notes and may be suspended, modified or discontinued at any time at the Company's discretion.

On February 6, 2024, the Company entered into a $ 540.0 million senior secured credit agreement (the "New Credit Agreement").

The New Credit Agreement includes a $ 365.0 million senior secured term loan facility that matures in February 2031, as well as a $ 175.0 million senior secured revolving credit facility that matures in February 2029.

Proceeds from the New Credit Agreement were used to fully refinance the Company’s existing senior secured Term Loan B Facility and Revolving Credit Facility, and to pay fees and expenses associated with the transaction.

The new senior secured term loan facility bears interest at Term SOFR

+ 4.50 % and was issued with a 99.0 % original issue price.

Loans under the new secured revolving credit facility will bear interest at Term SOFR plus a margin ranging from 3.50 % - 4.00 %.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data