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You should carefully consider the risks set forth below and the other information contained in this report, including our consolidated financial statements and related notes and Management's Discussion and Analysis of Financial Condition and Results of Operations, before making investment decisions related to our common stock.
−Removed: However, this report cannot anticipate and fully address all
−Removed: possible risks of investing in our common stock, the risks of investing in our common stock may change over time, and additional risks and uncertainties that we are not aware of, or that we do not consider to be material, may emerge.
+Added: However, this report cannot anticipate and fully address all possible risks of investing in our common stock, the risks of investing in our common stock may change over time, and additional risks and uncertainties that we are not aware of, or that we do not consider to be material, may emerge.
+Added: Moreover, some of the factors, events, and contingencies discussed below may have occurred in the past, but the disclosures below are not representations as to whether or not the factors, events or contingencies have occurred in the past, and instead reflect our beliefs and opinions as to the factors, events, or contingencies that could materially and adversely affect us in the future.
Accordingly, you are advised to consider additional sources of information and exercise your own judgment in addition to the information we provide.
Risks Related to Our Business, Growth Prospects and Operating Results
−Removed: We may not be able to achieve anticipated cost savings or other anticipated benefits of the SpotX Acquisition and other recent acquisitions.
−Removed: There could be lingering issues related to the integration of SpotX and other recently acquired companies into our core business, and anticipated long term anticipated benefits may not ultimately be realized, including synergies, cost savings, technological innovation and operational efficiencies from such transactions.
−Removed: For example, in 2023 we introduced our unified CTV platform, Magnite Streaming, which merges leading technology from our legacy Magnite CTV and SpotX CTV platforms.
−Removed: Although we believe our new Magnite Streaming platform represents an industry leading solution, which incorporates cutting edge technology from our legacy platforms, there are certain risks inherent in introducing a new platform.
−Removed: For example, it is possible that our new platform will experience bugs or errors, or clients may not be satisfied with the functionality compared to our legacy CTV platforms, which could lead to a loss of business and negatively impact our results.
−Removed: If we are unable to achieve the anticipated benefits of our recent acquisition or the integration of our CTV platforms, it could negatively affect our business and result of operations.
−Removed: Any acquisitions we undertake may disrupt our business, adversely affect operations, dilute stockholders, and expose us to costs and liabilities.
−Removed: Acquisitions have been an important element of our business strategy, and we may pursue future acquisitions in an effort to increase revenue, expand our market position, add to our service offering and technological capabilities, respond to dynamic market conditions, or for other strategic or financial purposes.
−Removed: However, there is no assurance that we will identify suitable acquisition candidates or complete any acquisitions on favorable terms, or at all.
−Removed: Further, any acquisitions we do complete would involve a number of risks, which may include the following:
−Removed: • the identification, acquisition, and integration of acquired businesses require substantial attention from management.
−Removed: The diversion of management's attention and any difficulties encountered in the integration process could hurt our business;
−Removed: • the identification, acquisition, and integration of acquired businesses requires significant investment, including to determine which new service offerings we might wish to acquire, harmonize service offerings, expand management capabilities and market presence, and improve or increase development efforts and technology features and functions;
−Removed: • the anticipated benefits from the acquisition may not be achieved, including as a result of loss of clients or personnel of the target, other difficulties in supporting and transitioning the target's clients, the inability to realize expected synergies from an acquisition, or negative organizational cultural effects arising from the integration of new personnel;
−Removed: • we may face difficulties in integrating the personnel, technologies, solutions, operations, and existing contracts of the acquired business;
−Removed: • we may fail to identify all of the problems, liabilities or other shortcomings or challenges of an acquired company, technology, or solution, including issues related to intellectual property, solution quality or architecture, income or other taxes and other regulatory compliance practices, revenue recognition or other accounting practices, or employee or client issues;
−Removed: • to pay for future acquisitions, we could issue additional shares of our common stock or pay cash.
−Removed: Issuance of shares would dilute stockholders.
−Removed: Use of cash reserves could diminish our ability to respond to other opportunities or challenges.
−Removed: Borrowing to fund any cash purchase price would result in increased fixed obligations and could also include covenants or other restrictions that would impair our ability to manage our operations;
−Removed: • acquisitions expose us to the risk of assumed known and unknown liabilities including contract, tax, regulatory or other legal, and other obligations incurred by the acquired business or fines or penalties, for which indemnity obligations, escrow arrangements or insurance may not be available or may not be sufficient to provide coverage;
−Removed: • new business acquisitions can generate significant intangible assets that result in substantial related amortization charges and possible impairments;
−Removed: • the operations of acquired businesses, or our adaptation of those operations, may require that we apply revenue recognition or other accounting methodologies, assumptions, and estimates that are different from those we use in our current business, which could complicate our financial statements, expose us to additional accounting and audit costs, and increase the risk of accounting errors;
−Removed: • acquired businesses may have insufficient internal controls that we must remediate, and the integration of acquired businesses may require us to modify or enhance our own internal controls, in each case resulting in increased
−Removed: administrative expense and risk that we fail to comply with the requirements of Section 404 of the Sarbanes-Oxley Act of 2002 (the "Sarbanes-Oxley Act");
−Removed: • acquisition of businesses based outside the United States would require us to operate in foreign languages and manage non-U.S.
−Removed: currency, billing, and contracting needs, comply with laws and regulations, including labor laws and privacy laws that in some cases may be more restrictive on our operations than laws applicable to our business in the United States;
−Removed: • acquisitions can sometimes lead to disputes with the former owners of the acquired company, which can result in increased legal expenses, management distraction and the risk that we may suffer an adverse judgment if we are not the prevailing party in the dispute.
Our revenue and operating results are highly dependent on the overall demand for advertising and any macroeconomic challenges may adversely affect our business, financial position, results of operations and/or cash flows.
Our business depends on the overall demand for advertising and on the economic health of our current and prospective sellers and buyers.
−Removed: If advertisers reduce their overall advertising spending, our revenue and results of operations are directly affected.
−Removed: Accordingly, our business and operations have been, and could in the future be, adversely affected by events beyond our control, such as health epidemics or pandemics, geopolitical events, including the conflicts in Ukraine and the Middle East, and economic and macroeconomic factors like labor strikes, labor shortages, supply chain disruptions, capital market disruptions and instability of financial institutions, inflation and recessionary concerns impacting the markets and communities in which our clients operate.
−Removed: Our business has been negatively impacted as a result of macroeconomic challenges, such as inflation, global hostilities, fears of a recession, global pandemics, and other macroeconomic factors, which have generally negatively impacted ad budgets, and in turn led to reduced ad spend through our platform.
+Added: If advertisers reduce their overall advertising spending, our revenue and results of operations are directly
+Added: Accordingly, our business and operations have been, and could in the future be, adversely affected by events beyond our control, such as health epidemics or pandemics, geopolitical events, and economic and macroeconomic factors like labor strikes, labor shortages, supply chain disruptions, capital market disruptions and instability of financial institutions, inflation and recessionary concerns impacting the markets and communities in which our clients operate.
Any worsening of macroeconomic conditions in future periods would likely have a negative effect on our financial results, the magnitude of which is difficult to predict.
+Added: We operate in an intensely competitive market that includes companies that have greater financial, technical and marketing resources than we do.
+Added: We face intense competition in the marketplace.
+Added: We compete for advertising spending against competitors that, in some cases, are also buyers and/or sellers on our platform.
+Added: We also compete for supply of advertising inventory against a variety of competitors.
+Added: Some of our existing and potential competitors are better established, benefit from greater name recognition, may have offerings and technology that we do not have or have significantly more financial, technical, sales, and marketing resources than we do.
+Added: In addition, some competitors, particularly those with greater scale or a more diversified revenue base and a broader offering, have greater flexibility than we do to compete aggressively on the basis of price and other contract terms, or to compete with us by including in their product offerings services that we may not provide.
+Added: Some existing and potential buyers have their own direct relationships with sellers or are seeking to establish such relationships, and many sellers are investing in capabilities that enable them to connect more effectively directly with buyers without the use of intermediaries such as us.
+Added: Our business suffers to the extent that buyers and sellers purchase and sell advertising inventory directly from one another or through intermediaries other than us, reducing the amount of advertising spend on our platform.
+Added: New or stronger competitors may emerge through acquisitions and industry consolidation or through development of disruptive technologies.
+Added: If our offerings are not perceived as competitively differentiated, we could lose clients, market share or be compelled to reduce our prices, making it more difficult to grow our business profitably.
+Added: There has been rapid evolution and consolidation in the advertising technology industry, and we expect these trends to continue, thereby increasing the capabilities and competitive posture of larger companies, particularly those that are already dominant in various ways, and enabling new or stronger competitors to emerge.
+Added: There is a finite number of large buyers and sellers in our target markets, and any consolidation of buyers or sellers may give the resulting enterprises greater bargaining power or result in the loss of buyers and sellers that use our platform, and thus reduce our potential base of buyers and sellers, each of which would lead to erosion of our revenue.
+Added: As technology continues to improve and market factors continue to attract investment, competition and pricing pressure may increase and market saturation may change the competitive landscape in favor of larger competitors with greater scale and broader offerings, including those that can afford to spend more than we can to grow more quickly and strengthen their competitive position.
+Added: Competition may be further impacted by advancements in artificial intelligence, and our ability to compete in the future may be dependent, in part, on our ability to further develop artificial intelligence into our solutions.
+Added: In addition, our competitors or potential competitors may adopt certain aspects of our business model, which could reduce our ability to differentiate our solutions.
+Added: For all of these reasons, we may not be able to compete successfully against our current and future competitors.
If CTV advertising spend grows more slowly than we expect, or growth occurs disproportionately through platforms that we cannot access, our operating results and growth prospects could be harmed.
The growth of our business is dependent, in part, on the continued growth in CTV advertising spend.
−Removed: Growth in the CTV advertising market is dependent on a number of factors, including the pace of cord-cutting (the replacement of tradition linear TV for CTV streaming), the continued proliferation of digital content and CTV providers, the adoption of ad-supported models by CTV sellers in lieu of, or in addition to, subscription models, and an acceleration in the shift of ad dollars from traditional linear TV to CTV to keep pace with changing viewership habits.
−Removed: In addition, if CTV sellers that have traditionally utilized subscription models were to adopt additional ad-supported models or tiers, there is no guarantee that we would have access to such inventory, as they may rely on proprietary solutions or enter into preferred or exclusive arrangements with third parties.
−Removed: Moreover, if we are able to access such inventory it may be on less favorable terms or at a reduced take rate.
−Removed: There is the additional risk that these CTV sellers will represent a disproportionate amount of the overall ad spend growth in CTV and that a substantial increase in available CTV ad inventory will result in an overall decline in CPMs.
+Added: Growth in the CTV advertising market is dependent on a number of factors, including the pace of user adoption, the continued proliferation of digital content and CTV providers, the adoption of ad-supported models by CTV sellers in lieu of, or in addition to, subscription models, and an acceleration in the shift of ad dollars from traditional linear TV to CTV to keep pace with changing viewership habits.
+Added: In addition, it is possible that CTV advertising spend growth may be disproportionately focused on CTV sellers that do not utilize our solution, which could impact our ability to grow our business in line with industry growth rates.
If the market for ad-supported CTV develops more slowly than we expect or fails to develop our operating results and growth prospects could be harmed.
In addition, to the extent that CTV advertising spend growth is concentrated among inventory that is not available to us or not available on favorable terms it could hurt our overall growth prospects.
−Removed: If CTV sellers fail to adopt programmatic advertising solutions, or adopt such solutions more slowly than we expect, our operating and growth prospects could be harmed.
+Added: Our contracts with buyers and sellers are generally not exclusive, may be terminated upon relatively short notice, and generally do not require minimum volumes or long-term commitments.
+Added: If buyers or sellers representing a significant portion of the demand or inventory in our marketplace decide to materially reduce the use of our solution, we could experience an immediate and significant decline in our revenue and profitability and harm to our business.
+Added: Generally, our buyers and sellers are not obligated to provide us with any minimum volumes of business, may do business with our competitors as well as with us, may reduce or cancel their business with us or terminate our contracts without
+Added: penalty, and may bypass us and transact directly with each other or through other intermediaries that compete with us.
+Added: Accordingly, our business is highly vulnerable to changes in the macro environment, price competition, and development of new or more compelling offerings by our competitors, which could reduce business generally or motivate buyers or sellers to migrate to competitors’ offerings.
+Added: Sellers and buyers may seek to change the terms on which they do business with us, or allocate their advertising inventory or demand to our competitors who provide advertising demand and supply to them on more favorable terms or whose offerings are considered more beneficial.
+Added: Supply of advertising inventory is also limited for some sellers, such as special sites or new technologies, and sellers may request higher prices, fixed price arrangements or guarantees that we cannot provide as effectively as our competitors, or that would reduce the profitability of that business.
+Added: In addition, sellers sometimes place significant restrictions on the sale of their advertising inventory, such as strict security requirements, limitations on data sharing, prohibitions on advertisements from specific advertisers or specific industries, and restrictions on the use of specified creative content or format.
+Added: Finally, with the proliferation of header bidding in desktop and mobile, sellers' inventory is available for purchase through multiple exchanges simultaneously.
+Added: Buyers, in turn, are free to direct their spend to us or one or more of our competitors, and increasingly are seeking price concessions, rebates, or other consideration to direct more spend towards us.
+Added: We serve many buyers and sellers, but certain large buyers and sellers have accounted for and will continue to account for a disproportionate share of business transacted through our solution.
+Added: In 2024, there were two buyers of advertising inventory that indirectly contributed to approximately 39% of revenue through their buying activity from sellers on our platform.
+Added: If a buyer or group of buyers representing a significant portion of the demand in our marketplace, or a seller or group of sellers representing a significant portion of the inventory in our marketplace decides to materially reduce use of our solutions, it could cause an immediate and significant decline in our revenue and profitability and harm to our business.
+Added: In addition, loss of substantial inventory or demand could degrade our marketplace.
+Added: Loss of major DSP sources of demand could adversely affect bid density or pricing in our auctions, and reduction in fees if we are not able to redirect inventory to other demand sources.
+Added: Loss of important unique inventory could reduce fees from demand that cannot be shifted to other sellers and make it harder to differentiate ourselves from our competitors.
+Added: The number of large media buyers and sellers in the market is finite, and it could be difficult for us to replace the losses from any buyers or sellers whose relationships with us diminish or terminate.
+Added: Programmatic advertising presents unique challenges for CTV sellers, and CTV sellers may not adopt or may be slow to adopt programmatic solutions that transact in biddable auction environments.
As digital advertising has continued to scale and evolve, the amount of advertising being bought and sold programmatically has increased dramatically.
−Removed: Despite the opportunities created by programmatic advertising, CTV sellers have been slower to adopt programmatic solutions compared to desktop and mobile video sellers.
+Added: Although programmatic represents a substantial majority of CTV advertising, CTV sellers have generally been more cautious to adopt programmatic solutions compared to desktop and mobile video sellers, and in particular, with respect to biddable auctions.
Many CTV sellers have backgrounds in cable or broadcast television and have limited experience with digital advertising, and in particular programmatic advertising.
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In this regard, programmatic advertising presents a number of potential challenges, including the ability to ensure that ads are brand safe, comply with business rules around competitive separation, are not overly repetitive, are played at the appropriate volume and do not cause delays in load-time of content.
−Removed: Our platform was designed to address these challenges and we have invested significant time and resources cultivating relationships with CTV sellers to establish best practices and evangelize the benefits of programmatic CTV.
−Removed: While we believe that programmatic advertising will continue to grow as a percentage of overall CTV advertising, there can be no assurance that CTV sellers will adopt programmatic solutions or the speed at which they may adopt such solutions.
+Added: In light of these challenges, programmatic CTV has largely been transacted through reserve auctions.
+Added: Reserve auctions allow publishers to establish direct deals with a buyer, and may be "guaranteed," where a buyer has negotiated a pre-established price and volume with a seller.
+Added: These transaction types allow the seller to maintain tighter control over their advertising allocation and are often used by sellers that maintain a direct sales force but still want to experience the benefits of automation.
+Added: In general, advertising impressions monetized through reserve auctions carry a lower fee than impressions monetized through auctions with multiple bidders.
+Added: Accordingly, an increase in the percentage of CTV inventory monetized through reserve auctions, at the expense of biddable auctions, could drive a decrease in our overall take rate which may negatively impact our growth.
+Added: While we believe that CTV sellers will begin to expand their use of biddable inventory to attract a more diverse array of advertisers, there can be no assurance that CTV sellers will adopt such solutions or guarantees regarding the speed at which they may adopt such solutions.
Any such failure or delay in adoption could negatively impact our finance results and growth prospects.
−Removed: We may not be able to maintain or increase access to the CTV advertising inventory monetized through our platform on terms acceptable to us.
+Added: We may not be able to maintain or increase access to the CTV advertising inventory monetized through our platform on terms acceptable to us, and our efforts to maintain such access may subject us to an increased risk of losses.
Our success requires us to maintain and expand our access to premium and unique advertising inventory.
We do not own or control the ad inventory upon which our business depends and do not own or create content.
−Removed: Sellers are generally not required to offer a specified level of inventory on our platform, and we cannot be assured that any publisher will continue to make their ad inventory available on our platform.
−Removed: Sellers may seek to change the terms on which they offer inventory on our platform, including with respect to pricing, or may elect to make advertising inventory available to our competitors who offer more favorable economic terms.
−Removed: Sellers may also require us to take increased risks in some of our commercial agreements in the form of offering revenue guarantees or minimum spend commitments.
−Removed: Furthermore, sellers may enter into exclusive relationships with our competitors, which preclude us from offering their inventory.
+Added: Sellers are generally not required to offer a specified level of inventory on our platform, and we cannot be assured that any publisher will continue to
+Added: make their ad inventory available on our platform.
+Added: Sellers may seek to change the terms on which they offer inventory on our platform, including with respect to pricing, may elect to make advertising inventory available to our competitors who offer more favorable economic terms, may create their own ad-tech solutions, or may connect with buyers directly.
+Added: Sellers may also require us to take increased risks in some of our commercial agreements in the form of offering revenue guarantees or minimum spend commitments, and we may be subject to losses if we cannot meet these guarantees or commitments.
+Added: Furthermore, sellers may enter into exclusive relationships with our competitors or with DSPs directly, which may preclude us from offering their inventory.
These risks are particularly pronounced with CTV sellers.
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We may be unsuccessful in our Supply Path Optimization efforts.
−Removed: SPO refers to efforts by buyers to consolidate the number of vendors with which they work to find the most effective and cost-efficient paths to procure media.
+Added: Supply path optimization refers to efforts by buyers to consolidate the number of vendors with which they work to find the most effective and cost-efficient paths to procure media.
There are a number of criteria that buyers use to evaluate supply partners.
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We believe that because our business has many fixed costs, increases in advertising spend volume generally create opportunities to disproportionately improve our bottom line results, even with increased discounts, rebates or other buyer incentives.
−Removed: However, our revenue could be negatively impacted by discounts, rebates and other buyer incentives, notwithstanding an increase in ad spend.
+Added: However, our results could be negatively impacted by discounts, rebates and other buyer incentives, notwithstanding an increase in ad spend.
Our technology development efforts may be inefficient or ineffective, which may impair our ability to attract buyers and sellers.
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If our solution is not competitive, buyers and sellers can be expected to shift their business to competing solutions.
−Removed: Buyers and sellers may also resist
−Removed: adopting our new solutions for various reasons, including reluctance to disrupt existing relationships and business practices or to invest in necessary technological integration.
+Added: Buyers and sellers may also resist adopting our new solutions for various reasons, including reluctance to disrupt existing relationships and business practices or to invest in necessary technological integration.
Clients, vendors, and competitors may also react negatively to the announcement of new products and offerings, which may have a harmful effect on our relationships and our business.
The emergence of header bidding has increased competition from other demand sources and may cause infrastructure strain and added cost.
−Removed: In the mobile and desktop channels, the vast majority of sellers have embraced header bidding technology, a solution by which impressions that would have previously been exposed to different potential sources of demand in a sequence dictated by ad server priorities are instead available for concurrent competitive bidding by demand sources.
+Added: In the mobile and desktop channels, the vast majority of sellers have embraced header bidding technology, a solution by which impressions that would have previously been exposed to different potential sources of demand in a sequence dictated
+Added: by ad server priorities are instead available for concurrent competitive bidding by demand sources.
This can help sellers increase revenue by exposing their inventory to more bidders, thereby allocating more inventory to demand sources that value it most highly.
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We have addressed the market need for such requirements in part, through our ad server, SpringServe, which offers a unified programmatic demand solution for CTV, which leverages our existing programmatic SSP capabilities and connects with third party programmatic demand sources.
−Removed: However, this is a new offering and it may not be adopted by clients, or such clients may adopt competing solutions.
+Added: However, this offering may not be adopted by clients, or such clients may adopt competing solutions.
While still relatively nascent, as the programmatic market for CTV advertising continues to mature, other ad serving or similar technology platforms are likely to enter the market and/or gain market share, creating additional competitive pressure and attendant risks.
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It must perform these transactions end-to-end within milliseconds.
−Removed: We must continue to increase the capacity of our platform to support our high-volume strategy, to cope with increased data volumes and parties resulting from header bidding and an increasing variety of advertising formats and platforms, and to maintain a stable service infrastructure and reliable service delivery.
+Added: We must continue to increase the capacity of our platform to support our high-volume strategy, to cope with increased data volumes and parties resulting from header bidding and an increasing variety of advertising formats and platforms.
+Added: Additionally, we must maintain a stable service infrastructure and reliable service delivery.
To the extent we are unable, for cost or other reasons, to effectively increase the capacity of our platform, continue to process transactions at fast enough speeds, and support emerging advertising formats or services preferred by buyers, our revenue will suffer.
−Removed: We expect to continue to invest in our platform to meet increasing demand.
+Added: Furthermore, failure to optimize and manage infrastructure costs efficiently could result in margin compression and increased financial strain.
+Added: We expect to continue to invest in our platform to meet increasing demand, which may require significant expenditures on data processing capabilities, infrastructure, security enhancements, and compliance measures.
Such investment may negatively affect our profitability and results of operations.
+Added: Additionally, any unexpected surges in traffic, inefficiencies in scaling, or disruptions to our infrastructure could degrade platform performance, harm our reputation, and cause us to lose business to competitors with more resilient or cost-effective solutions.
To the extent our access to mobile inventory is limited by third-party technology or lack of direct relationships with mobile sellers, our ability to grow our business will be impaired.
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We expect mobile applications to be the largest driver of our mobile business.
−Removed: Many mobile apps utilize software development kits, or SDKs, and other proprietary technology of third parties, such as aggregators, and it is those third parties,
−Removed: not the application providers themselves, that contract with us to provide exchange services to help monetize the inventory.
−Removed: Due to this consolidation, if our relationships with these third parties decline or are terminated, it may result in a larger than usual loss of access to mobile inventory.
+Added: Many mobile apps utilize software development kits, or SDKs, and other proprietary technology of third parties, such as aggregators, and it is those third parties, not the application providers themselves, that contract with us to provide exchange services to help monetize the inventory.
+Added: to this consolidation, if our relationships with these third parties decline or are terminated, it may result in a larger than usual loss of access to mobile inventory.
Any rapid and/or significant decline in the availability of mobile inventory can adversely affect our mobile advertising spend and growth prospects.
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Moreover, the majority of CTV transactions are currently executed through reserve auctions and we expect reserve auctions to grow as a percentage of revenue in mobile and desktop as well.
−Removed: Reserve auctions generally involve lower fees than we can charge for open marketplace transactions and we may experience additional fee pressure as more competitors, including new entrants as well as sellers themselves, build their own technology and infrastructure to enable reserve auctions.
+Added: Reserve auctions generally involve lower fees than we can charge for auction transactions and we may experience additional fee pressure as more competitors, including new entrants as well as sellers themselves, build their own technology and infrastructure to enable reserve auctions.
Our revenue, take rate (our fee as a percentage of advertising spend), the value of our business, and the price of our stock could be adversely affected if we cannot maintain and grow our revenue and profitability through volume increases that compensate for price reductions, or if we are forced to make significant fee concessions, rebates, or refunds, or if buyers reduce spending with us or sellers reduce inventory available through our exchange due to fee disputes or pricing issues.
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Our take rate varies by publisher and transaction type.
−Removed: For instance, our take rate tends to be lower for reserve auctions compared to open auctions, and tends to be lower on CTV transactions compared to other channels.
+Added: For instance, our take rate tends to be lower for reserve auctions compared to auctions with multiple bidders, and tends to be lower on CTV transactions compared to other channels.
Additionally, take rates tend to be higher for our managed service business where we are responsible for delivering a campaign at a fixed price.
−Removed: We may also negotiate lower take rates with large sellers to win additional business or share of inventory.
+Added: Our managed service business has been declining as a percentage of our revenue on a year-over-year basis, and we expect this trend to continue.
+Added: Should our managed service business continue to decline, we may experience a shift in revenue composition, and our overall financial performance could be affected, particularly if we are unable to offset any potential revenue loss with increased adoption of our programmatic solutions.
+Added: We may also negotiate lower take rates with large sellers to win additional business or share of inventory, and these sellers may account for a disproportionately higher percentage of advertising spend on our platform.
As a result of these factors, even if we are able to accurately forecast the anticipated total advertising spend transacted by buyers across our platform, we may have limited visibility regarding the revenue or Contribution ex-TAC (as defined in section "Key Operating and Financial Performance Metrics") we will generate.
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We have a history of losses and we face many risks that may prevent us from achieving or sustaining profitability in the future.
−Removed: We reported net loss of $159.2 million, net loss of $130.3 million, and net income of $0.1 million during the years ended December 31, 2023, 2022, and 2021, respectively.
+Added: We reported net income of $22.8 million during the year ended December 31, 2024 and net loss of $159.2 million and $130.3 million during the years ended December 31, 2023, and 2022, respectively.
As of December 31, 2024, we had an accumulated deficit of $661.2 million.
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In general, sales of tangible personal property are subject to sales and use tax unless a specific exemption applies, while services generally are not subject to sales tax unless specifically enumerated.
−Removed: Advertising services are considered a service and are generally not subject to sales and use tax, except in certain states.
+Added: Advertising services are
+Added: considered a service and are generally not subject to sales and use tax, except in certain states.
Additionally, Maryland adopted a tax on gross revenues from digital advertising.
While the law is being challenged in the courts, the law took effect and we are technically subject to the tax, which increases our cost of doing business.
−Removed: Other states are looking to follow suit and tax either
−Removed: digital advertising or other goods or services.
+Added: Other states are looking to follow suit and tax either digital advertising or other goods or services.
In addition, the continual evolution of our services and the expansion of our business offerings may further complicate the determination of the sales taxability of our services in certain jurisdictions.
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We have experienced significant variations in revenue and operating results from period to period, and operating results may continue to fluctuate and be difficult to predict due to a number of factors, including:
−Removed: • seasonality in demand for digital advertising, as many advertisers devote a disproportionate amount of their advertising budgets to the fourth quarter of the calendar year to coincide with increased holiday purchasing, and advertising inventory in the fourth quarter may be more expensive due to increased demand for advertising inventory;
+Added: • seasonality in demand for digital advertising, as many advertisers devote a disproportionate amount of their advertising budgets to the fourth quarter of the calendar year;
• changes in pricing of advertising inventory or pricing for our solution and our competitors' offerings, including potential further reductions in our pricing and overall take rate as a result of competitive pressure, changes in supply, improvements in technology and extension of automation to higher-value inventory, uncertainty regarding rate of adoption, changes in the allocation of demand spend by buyers, changes in revenue mix, auction dynamics, pricing discussions or negotiations with clients and potential clients, header bidding and other factors;
+Added: • the variability and unpredictability of our managed service business, which depends on seasonal advertising trends and discretionary advertising budgets, and are typically tied to one-off or seasonal campaigns rather than recurring revenue models;
• diversification of our revenue mix to include new services, some of which may have lower pricing or may cannibalize existing business;
+Added: • the effect of political advertising, which has an intermittent impact on our business depending on election cycles, and may be highly unpredictable and variable based on circumstances outside of our control;
• the addition or loss of buyers or sellers;
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If our revenue or operating results fall below the expectations of investors or securities analysts, or below any guidance we may provide to the market, the price of our common stock could decline substantially.
−Removed: Risks Related to Our Relationships with Buyers and Sellers and Other Strategic Relationships
−Removed: We rely on buyers and sellers to abide by contractual requirements and relevant laws, rules, and regulations when using our solution.
−Removed: The acts or omissions of buyers or sellers, or our own failure to meet advertising and inventory content standards and provide services that our buyers and sellers trust, could harm our brand and reputation and those of our partners, and negatively impact our business, financial condition and results of operations.
−Removed: Though we contractually require buyers and sellers to abide by relevant laws, rules and regulations, as well as restrictions by their counterparties, when transacting on our platform, we do not control the content of the advertisements that we serve or the content of the websites providing the inventory, and there are many circumstances in which it is difficult or impossible for us to monitor or evaluate the compliance of our buyers and sellers.
−Removed: If buyers or sellers fail to abide by relevant laws, rules and regulations, or contract requirements, we could potentially face liability for such misuse.
−Removed: In addition, both advertisers and inventory suppliers are concerned about being associated with content they consider inappropriate, competitive or inconsistent with their brands, or illegal, and they are hesitant to spend money or make inventory available, respectively, without some guarantee of brand security.
−Removed: Consequently, our reputation depends in part on providing services that our buyers and sellers trust, and we have contractual obligations to meet content and inventory standards.
−Removed: We contractually prohibit the misuse of our platform by our buyers and sellers and actively monitor inventory against our quality guidelines.
−Removed: Despite such efforts, we may provide access to inventory that is objectionable to our buyers or serve advertising that contains objectionable content, which could harm our or our clients’ brand and reputation, decrease their trust in our platform, and negatively impact our business, financial condition and results of operations.
−Removed: Furthermore, we may receive public pressure to discontinue working with certain sellers or buyers on our platform and our determination whether to continue or cease working with a given client may subject us to reputational risk.
−Removed: Our contracts with buyers and sellers are generally not exclusive, may be terminated upon relatively short notice, and generally do not require minimum volumes or long-term commitments.
−Removed: If buyers or sellers representing a significant portion of the demand or inventory in our marketplace decide to materially reduce the use of our solution, we could experience an immediate and significant decline in our revenue and profitability and harm to our business.
−Removed: Generally, our buyers and sellers are not obligated to provide us with any minimum volumes of business, may do business with our competitors as well as with us, may reduce or cancel their business with us or terminate our contracts without penalty, and may bypass us and transact directly with each other or through other intermediaries that compete with us.
−Removed: Accordingly, our business is highly vulnerable to changes in the macro environment, price competition, and development of new or more compelling offerings by our competitors, which could reduce business generally or motivate buyers or sellers to migrate to competitors’ offerings.
−Removed: Sellers and buyers may seek to change the terms on which they do business with us, or allocate their advertising inventory or demand to our competitors who provide advertising demand and supply to them on more favorable terms or whose offerings are considered more beneficial.
−Removed: Supply of advertising inventory is also limited for some sellers, such as special sites or new technologies, and sellers may request higher prices, fixed price arrangements or guarantees that we cannot provide as effectively as our competitors, or that would reduce the profitability of that business.
−Removed: In addition, sellers sometimes place significant restrictions on the sale of their advertising inventory, such as strict security requirements, limitations on data sharing, prohibitions on advertisements from specific advertisers or specific industries, and restrictions on the use of specified creative content or format.
−Removed: Finally, with the proliferation of header bidding, sellers' inventory is available for purchase through multiple exchanges simultaneously.
−Removed: Buyers, in turn, are free to direct their spend to us or one or more of our competitors, and increasingly are seeking price concessions, rebates, or other consideration to direct more spend towards us.
−Removed: We serve many buyers and sellers, but certain large buyers and sellers have accounted for and will continue to account for a disproportionate share of business transacted through our solution.
−Removed: In 2023, there were two buyers of advertising inventory that indirectly contributed to approximately 37% of revenue through their buying activity from sellers on our platform.
−Removed: If a buyer or group of buyers representing a significant portion of the demand in our marketplace, or a seller or group of sellers representing a significant portion of the inventory in our marketplace decides to materially reduce use of our solutions, it could cause an immediate and significant decline in our revenue and profitability and harm to our business.
−Removed: In addition, loss of substantial inventory or demand could degrade our marketplace.
−Removed: Loss of major DSP sources of demand could adversely affect bid density or pricing in our auctions, and reduction in fees if we are not able to redirect inventory to other demand sources.
−Removed: Loss of important unique inventory could reduce fees from demand that cannot be shifted to other sellers and make it harder to differentiate ourselves from our competitors.
−Removed: The number of large media buyers and sellers in the market is finite, and it could be difficult for us to replace the losses from any buyers or sellers whose relationships with us diminish or terminate.
+Added: Any acquisitions we undertake in the future may disrupt our business, adversely affect operations, dilute stockholders, and expose us to costs and liabilities, and we may not achieve the anticipated benefits or synergies of such transactions.
+Added: Acquisitions have been an important element of our business strategy.
+Added: Moreover, we may pursue future acquisitions in an effort to increase revenue, expand our market position, add to our service offering and technological capabilities, respond to dynamic market conditions, or for other strategic or financial purposes.
+Added: However, there is no assurance that we will identify
+Added: suitable acquisition candidates or complete any acquisitions on favorable terms, or at all.
+Added: Further, any acquisitions we do complete would involve a number of risks, which may include the following:
+Added: • the identification, acquisition, and integration of acquired businesses require substantial attention from management.
+Added: The diversion of management's attention and any difficulties encountered in the integration process could hurt our business;
+Added: • the identification, acquisition, and integration of acquired businesses requires significant investment, including to determine which new service offerings we might wish to acquire, harmonize service offerings, expand management capabilities and market presence, and improve or increase development efforts and technology features and functions;
+Added: • the anticipated benefits from the acquisition may not be achieved, including as a result of loss of clients or personnel of the target, other difficulties in supporting and transitioning the target's clients, the inability to realize expected synergies from an acquisition, or negative organizational cultural effects arising from the integration of new personnel;
+Added: • we may face difficulties in integrating the personnel, technologies, solutions, operations, and existing contracts of the acquired business;
+Added: • we may fail to identify all of the problems, liabilities or other shortcomings or challenges of an acquired company, technology, or solution, including issues related to intellectual property, solution quality or architecture, income or other taxes and other regulatory compliance practices, revenue recognition or other accounting practices, or employee or client issues;
+Added: • to pay for future acquisitions, we could issue additional shares of our common stock or pay cash.
+Added: Issuance of shares would dilute stockholders.
+Added: Use of cash reserves could diminish our ability to respond to other opportunities or challenges.
+Added: Borrowing to fund any cash purchase price would result in increased fixed obligations and could also include covenants or other restrictions that would impair our ability to manage our operations;
+Added: • acquisitions expose us to the risk of assumed known and unknown liabilities including contract, tax, regulatory or other legal, and other obligations incurred by the acquired business or fines or penalties, for which indemnity obligations, escrow arrangements or insurance may not be available or may not be sufficient to provide coverage;
+Added: • new business acquisitions can generate significant intangible assets that result in substantial related amortization charges and possible impairments;
+Added: • the operations of acquired businesses, or our adaptation of those operations, may require that we apply revenue recognition or other accounting methodologies, assumptions, and estimates that are different from those we use in our current business, which could complicate our financial statements, expose us to additional accounting and audit costs, and increase the risk of accounting errors;
+Added: • acquired businesses may have insufficient internal controls that we must remediate, and the integration of acquired businesses may require us to modify or enhance our own internal controls, in each case resulting in increased administrative expense and risk that we fail to comply with the requirements of Section 404 of the Sarbanes-Oxley Act of 2002 (the "Sarbanes-Oxley Act");
+Added: • acquisition of businesses based outside the United States would require us to operate in foreign languages and manage non-U.S.
+Added: currency, billing, and contracting needs, comply with laws and regulations, including labor laws and privacy laws that in some cases may be more restrictive on our operations than laws applicable to our business in the United States;
+Added: • acquisitions can sometimes lead to disputes with the former owners of the acquired company, which can result in increased legal expenses, management distraction and the risk that we may suffer an adverse judgment if we are not the prevailing party in the dispute.
We must provide value to both buyers and sellers of advertising without being perceived as favoring one over the other or being perceived as competing with them through our service offerings.
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In addition, as our own capabilities evolve, we may be perceived by clients, particularly buyers, as competing with them, which could result in a loss of their business or otherwise negatively impact our relationships.
−Removed: For instance, we recently introduced ClearLine, a self-service buying tool that provides agencies direct access to premium advertising on our platform.
−Removed: This solution helps agencies maximize the spend going towards working media, makes it easier for sellers and agencies to securely share data, improves workflow for campaigns traditionally transacted manually, and helps publishers generate more revenue and develop new sources of unique
+Added: For instance, ClearLine, a self-service buying tool that provides agencies direct access to premium advertising on our platform helps agencies maximize the spend going towards working media, makes it easier for sellers and agencies to securely share data, improves workflow for campaigns traditionally transacted
+Added: manually, and helps publishers generate more revenue and develop new sources of unique demand.
If we fail to balance our clients' interests appropriately, our ability to provide a full suite of services and our growth prospects may be compromised.
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In addition, we attempt to coordinate collections from our buyers so as to fund our payment obligations to our sellers.
−Removed: However, some buyers and sellers may require direct billing and collection arrangements between themselves, and some providers of header bidding wrappers or other downstream decisioning mechanisms in which we participate (such as Google EB) may control billing and collection for transactions we win through their platforms.
+Added: However, some buyers and sellers may require direct billing and collection arrangements between themselves, and some providers of header bidding wrappers or other downstream decisioning mechanisms in which we participate (such as Google OB) may control billing and collection for transactions we win through their platforms.
In the past, some buyers have experienced financial pressures that have motivated them to slow the timing of their payments to us.
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This may result in additional costs and cause us to forgo or defer other more productive uses of that working capital.
+Added: The digital advertising market may develop more slowly or differently than we expect, including as a response to advancements in AI, and if so, our business, growth prospects and financial condition would be adversely affected.
+Added: Advancements in artificial intelligence ("AI”) present both opportunities and risks to our business, particularly within the context of the open internet and display advertising.
+Added: AI-driven platforms, especially those integrated with walled gardens or closed ecosystems, have the potential to alter the competitive dynamics of digital advertising by changing the way in which users access information and content on the open internet.
+Added: This shift could reduce advertiser reliance on the open internet and create challenges for independent publishers, which in turn may negatively impact our business model.
+Added: Furthermore, the rapid evolution of AI technologies could lead to diminishing demand for display advertising or reallocating budgets to new formats and approaches.
+Added: If we are unable to address these disruptions, adapt to evolving market expectations, or compete effectively with AI-driven ecosystems, our growth and market position could be adversely impacted.
+Added: We rely on buyers and sellers to abide by contractual requirements and relevant laws, rules, and regulations when using our solution.
+Added: The acts or omissions of buyers or sellers, or our own failure to meet advertising and inventory content standards and provide services that our buyers and sellers trust, could harm our brand and reputation and those of our partners, and negatively impact our business, financial condition and results of operations.
+Added: Though we contractually require buyers and sellers to abide by relevant laws, rules and regulations, as well as restrictions by their counterparties, when transacting on our platform, we do not control the content of the advertisements that we serve or the content of the websites providing the inventory, and there are many circumstances in which it is difficult or impossible for us to monitor or evaluate the compliance of our buyers and sellers.
+Added: If buyers or sellers fail to abide by relevant laws, rules and regulations, or contract requirements, we could potentially face liability for such misuse.
+Added: In addition, both advertisers and inventory suppliers are concerned about being associated with content they consider inappropriate, competitive or inconsistent with their brands, or illegal, and they are hesitant to spend money or make inventory available, respectively, without some guarantee of brand security.
+Added: Consequently, our reputation depends in part on providing services that our buyers and sellers trust, and we have contractual obligations to meet content and inventory standards.
+Added: We contractually prohibit the misuse of our platform by our buyers and sellers and actively monitor inventory against our quality guidelines.
+Added: Despite such efforts, we may provide access to inventory that is objectionable to our buyers or serve advertising that contains objectionable content, which could harm our or our clients’ brand and reputation, decrease their trust in our platform, and negatively impact our business, financial condition and results of operations.
+Added: Furthermore, we may receive public pressure to discontinue working with certain sellers or buyers on our platform and our determination whether to continue or cease working with a given client may subject us to reputational risk.
Our sales efforts with buyers and sellers may require significant time and expense and may not yield the results we seek.
Attracting new buyers and sellers and increasing our business with existing buyers and sellers involves substantial time, expense, and personnel investments, and we may not be successful in our efforts.
−Removed: This is particularly true with respect to our managed service business, which relies on direct relationships with advertisers, and is therefore more resource intensive.
+Added: This is particularly true with respect to
+Added: our managed service business, which relies on direct relationships with advertisers, and is therefore more resource intensive.
+Added: Our managed service business also tends to be more susceptible to quarterly variability, as it is typically more sensitive to seasonality and advertising budget volatility.
Certain of our product offerings require a significant amount of time and costs in the initial client setup and implementation, and we generally do not recognize revenue from such clients until we commence services.
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If we are held to have breached the terms of an open source software license, we could be required to seek licenses from third parties to continue operating using our solution on terms that are not economically feasible, to re-engineer our solution or the supporting computational infrastructure to discontinue use of certain code, or to make generally available, in source code form, portions of our proprietary code.
−Removed: Risks Related to the Advertising Technology Industry, Market, and Competition
−Removed: The digital advertising market may develop more slowly or differently than we expect, if so our business, growth prospects and financial condition would be adversely affected.
−Removed: Our future growth will be constrained if we are not able to adapt successfully to market evolution.
−Removed: It is difficult to predict adoption rates, demand for our solution, the future growth rate and size of the digital advertising solutions market or the entry of competitive solutions.
−Removed: Any expansion of the market for digital advertising solutions depends on a number of factors, including social and regulatory acceptance, the growth of the overall digital advertising market and the growth of specific sectors including CTV, social, mobile, video, and out-of-home as well as the actual or perceived technological viability, quality, cost, performance and value associated with emerging digital advertising solutions.
−Removed: If digital marketing does not develop in the manner we expect, our business and financial condition would be adversely affected.
−Removed: We operate in an intensely competitive market that includes companies that have greater financial, technical and marketing resources than we do.
−Removed: We face intense competition in the marketplace.
−Removed: We compete for advertising spending against competitors that, in some cases, are also buyers and/or sellers on our platform.
−Removed: We also compete for supply of advertising inventory against a variety of competitors.
−Removed: Some of our existing and potential competitors are better established, benefit from greater name recognition, may have offerings and technology that we do not have or have significantly more financial, technical, sales, and marketing resources than we do.
−Removed: In addition, some competitors, particularly those with greater scale or a more diversified revenue base and a broader offering, have greater flexibility than we do to compete aggressively on the basis of price and other contract terms, or to compete with us by including in their product offerings services that we may not provide.
−Removed: Some existing and potential buyers have their own direct relationships with sellers or are seeking to establish such relationships, and many sellers are investing in capabilities that enable them to connect more effectively directly with buyers without the use of intermediaries such as us.
−Removed: Our business suffers to the extent that buyers and sellers purchase and sell advertising inventory directly from one another or through intermediaries other than us, reducing the amount of advertising spend on our platform.
−Removed: New or stronger competitors may emerge through acquisitions and industry consolidation or through development of disruptive technologies.
−Removed: If our offerings are not perceived as competitively differentiated, we could lose clients, market share or be compelled to reduce our prices, making it more difficult to grow our business profitably.
−Removed: There has been rapid evolution and consolidation in the advertising technology industry, and we expect these trends to continue, thereby increasing the capabilities and competitive posture of larger companies, particularly those that are already dominant in various ways, and enabling new or stronger competitors to emerge.
−Removed: There is a finite number of large buyers and sellers in our target markets, and any consolidation of buyers or sellers may give the resulting enterprises greater bargaining power or result in the loss of buyers and sellers that use our platform, and thus reduce our potential base of buyers and sellers, each of which would lead to erosion of our revenue.
−Removed: As technology continues to improve and market factors continue to attract investment, competition and pricing pressure may increase and market saturation may change the competitive landscape in favor of larger competitors with greater scale and broader offerings, including those that can afford to spend more than we can to grow more quickly and strengthen their competitive position.
−Removed: Competition may be further impacted by advancements in artificial intelligence, and our ability to compete in the future may be dependent, in part, on our ability to further develop artificial intelligence into our solutions.
−Removed: In addition, our competitors or potential competitors may adopt certain aspects of our business model, which could reduce our ability to differentiate our solutions.
−Removed: For all of these reasons, we may not be able to compete successfully against our current and future competitors.
Risks Related to Our Collection, Use and Disclosure of Data
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In order to target advertising, we and our clients must collect and use data in a variety of ways.
−Removed: Our ability to collect, use, and share data about advertising purchase and sale transactions and user behavior and interaction with content is critical to the value of our services, and any limitation on our data practices could impair our ability to deliver effective solutions to our clients.
+Added: Our ability to collect, use, and disclose data about advertising purchase and sale transactions and user behavior and interaction with content is critical to the value of our services, and any limitation on our data practices could impair our ability to deliver effective solutions to our clients.
Any restriction on the types of data we collect could make placement of advertising through our solution less valuable, with commensurate reductions in revenue.
Consumers can, with increasing ease, implement practices or technologies that limit our ability, or that of our sellers, buyers and business partners, to collect data.
−Removed: For example, users may delete or block the use of the cookies and similar technologies used to collect data, including through their browser or mobile device settings.
−Removed: Consumers may also download "ad blocking" software that prevents certain cookies and other tracking technologies from being stored on a user’s computer or mobile device or from making calls to advertising partners.
−Removed: This may prevent the display of targeted or other advertisements.
+Added: For example, users may delete or block the use of the cookies and similar technologies used to collect data, including through their browser or connected device settings.
+Added: Consumers may also download "ad blocking" software that prevents certain cookies and other tracking technologies from being stored on a user’s computer or mobile device or from making calls to advertising partners, which may prevent the delivery of targeted or other advertisements.
In addition, device manufacturers, browsers and other tools are increasingly promoting features that allow users to disable the collection of data.
−Removed: For example, Apple now requires user opt-in before permitting access to Apple’s unique identifier, or IDFA.
−Removed: Further, Google has announced that it will deprecate the mobile advertising identifier used on Android devices.
+Added: For example, Apple requires user opt-in before permitting access to Apple’s unique identifier, or IDFA.
+Added: Further, it is likely that Google will eventually deprecate the mobile advertising identifier used on Android devices.
These shifts have had, and will likely continue to have, a substantial impact on the mobile advertising ecosystem and could harm growth in this channel.
−Removed: User privacy features of other channels of programmatic advertising are growing, such as use of browser-based opt out signals like Global Privacy Control (“GPC”) on web browsers, and privacy features on CTV or over-the-top video.
+Added: Laws governing the processing of personal data also continue to impact our ability to collect data.
+Added: For example, Directive 2002/58/EC (as amended by Directive 2009/136/EC), commonly referred to as the ePrivacy Directive, directs EU member states to ensure that accessing personal data on an Internet user’s computer, such as through cookies and similar technologies, generally requires opt in consent and is allowed only if the user has been informed about such access and given his or her opt-in consent.
+Added: Further, numerous comprehensive state privacy laws across the U.S.
+Added: require businesses that engage in certain advertising uses of personal data to offer and honor an opt-out of such activities, including, in some states, through browser or device-based opt-out signals, such as the Global Privacy Control (“GPC”).
+Added: Use of GPC and similar user privacy features provided on other channels of programmatic advertising, such as CTV, are growing.
Technical or policy changes, including regulation or industry self-regulation, could also harm our growth in those channels.
−Removed: In addition, as further described in the risk factors below, current and potential future privacy laws and regulations in the U.S.
+Added: As further described in the risk factors below, current and potential future privacy laws and regulations in the U.S.
and abroad already restrict, and could further restrict, the ability to collect and process certain types of user data.
−Removed: Further, much of the data we collect and use belongs to our buyers or sellers, and we receive their permission to use it.
+Added: In addition, much of the data we collect and process belongs to our buyers or sellers, and we receive their permission to use it.
Although our sellers and buyers generally permit us to aggregate and use data from advertising placements, subject to certain restrictions, sellers or buyers might decide to restrict our collection or use of their data.
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Any limitation on our ability to collect data about user behavior and interaction with content could make it more difficult for us to deliver effective solutions that meet the needs of sellers and buyers.
−Removed: As cookies are replaced by alternative tracking mechanisms, our performance may decline and we may lose buyers and revenue.
−Removed: Industry participants in the advertising technology ecosystem have taken or may take action to eliminate or restrict the use of cookies and other identifiers, and we expect the use of third-party cookies to be largely phased out by the end of 2024.
−Removed: For instance, Google has announced plans to fully eliminate support for third-party cookies in the Chrome browser by the end of 2024.
−Removed: While Magnite generally supports the notion of third-party cookie deprecation, these efforts could lead to significant uncertainty and instability in the short term as well as a decrease in CPMs and a shift in advertising spend, as the industry adjusts to a new targeting paradigm.
−Removed: In the absence of third-party cookies, it is possible that other companies in our ecosystem that we work with, or with which we may compete, may develop alternative solutions to target users, including through the use of first party data, proprietary algorithms or statistical methods or other proprietary identifiers.
−Removed: These solutions may favor walled gardens or other owned properties that have access to large amounts of first party data and may build solutions into their widely-used web browsers or social platforms.
−Removed: For instance, Google has announced its Privacy Sandbox, which is intended to create web standards for websites to access user information without compromising privacy.
−Removed: In the absence of third-party cookies, it is possible that other companies in our ecosystem that we work with, or with which we may compete, may develop alternative solutions to target users, including through the use of first party data, proprietary algorithms or statistical methods or other proprietary identifiers.
−Removed: While new identification solutions will likely provide some level of consistency and compatibility with our platform, they are unreleased and unproven, and may require substantial development and commercial changes for us to support.
−Removed: In addition, these solutions may favor walled gardens or other owned properties that have access to large amounts of first party data and may build solutions into their widely-used web browsers or social platforms.
−Removed: For instance, Google has announced its Privacy Sandbox, which is intended to facilitate audience targeting for personalized advertising without the use of third party cookies.
−Removed: This tool set is still being tested in the industry, but its current design does not support all current ad tech use cases and business practices, and may be less effective than solutions based on third-party cookies.There is also a substantial risk that the Privacy Sandbox is developed in a way that self-preferences Google’s own ad tech solutions, including products which are competitive with our SSP.
−Removed: Even if third-party cookies are
−Removed: effectively replaced by open industry-wide tracking standards rather than proprietary standards, we may still incur substantial re-engineering costs to replace cookies with these new technologies.
−Removed: This may also diminish the quality or value of our services to buyers if such new technologies do not provide us with the quality or timeliness of the data that we currently generate from cookies.
+Added: If third-party cookies are replaced by alternative tracking mechanisms, our performance may decline and we may lose buyers and revenue.
+Added: Industry participants in the advertising technology ecosystem have long anticipated the deprecation of third-party cookies and other identifiers, making it more difficult to rely on such technologies to identify users' devices.
+Added: For several years, Google had announced plans to fully eliminate support for third-party cookies in the Chrome browser.
+Added: However, as of the end of 2024, Google has decided to continue supporting third-party cookies for the foreseeable future, citing the need for additional time to refine alternative solutions.
+Added: While this decision provides temporary continuity in the digital advertising ecosystem, it also perpetuates ongoing uncertainty for the long-term evolution of audience targeting and measurement practices.
+Added: Despite the continuation of cookies, advertisers, publishers, and technology platforms are increasingly prioritizing privacy-focused solutions, and a number of industry participants have suggested alternative identity solutions.
+Added: Efforts like Google’s Privacy Sandbox, which aims to provide alternative tools for audience targeting without relying on third-party cookies, continue to be developed and tested.
+Added: These tools, while intended to balance privacy and utility, may not fully replicate the capabilities of cookies and could disrupt established advertising workflows.
+Added: Moreover, alternative identification solutions may require substantial development and commercial changes for us to support.
+Added: There is also a risk that such tools will favor proprietary ad tech ecosystems, including Google’s, potentially disadvantaging independent platforms like Magnite.
+Added: Furthermore, market dynamics may still shift as buyers explore first-party data strategies, proprietary identifiers, and other solutions that reduce reliance on cookies.
+Added: This trend could favor walled gardens and platforms with extensive access to first-party data, presenting competitive challenges for companies operating within the open internet.
+Added: The growing adoption of these approaches may diminish the effectiveness of our platform in attracting buyers and advertisers, potentially leading to reduced revenue and market share.
+Added: Even in the absence of third-party cookie deprecation, evolving regulatory and consumer expectations around privacy may require significant investment in re-engineering our platform and adapting to new data usage paradigms.
+Added: If alternative solutions fail to deliver comparable performance or interoperability, or if they fundamentally shift the economics of digital advertising, our ability to compete effectively could be adversely impacted.
Our belief that the elimination of third-party cookies will lead to an increased use of first-party publisher data may be incorrect.
−Removed: We believe that the elimination of third-party cookies has the potential to shift the programmatic ecosystem from an identity model powered by buyers that are able to aggregate and target audiences through cookies and other tracking technologies to one enabled by sellers that have direct relationships with consumers and are therefore better positioned to obtain user data and consent for implementing first party identifiers.
+Added: Even though third-party cookies remain supported, the programmatic ecosystem is increasingly shifting toward privacy-centric approaches that prioritize first-party data.
+Added: We believe that this trend has the potential to shift the programmatic ecosystem from an identity model powered by buyers that are able to aggregate and target audiences through cookies and other tracking technologies to one enabled by sellers that have direct relationships with consumers and are therefore better positioned to obtain user data and consent for implementing first party identifiers.
+Added: Google's shift away from eliminating third party cookies today may simply slow down this shift.
While we believe that our platform and scale position us well to provide the infrastructure and tools needed for a publisher-centric identity model to succeed, there is no guarantee that our efforts will lead to an increase of the use of first-party publisher segments in the ecosystem.
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and foreign governments, consumer agencies, self-regulatory bodies, and public advocacy groups have called for or implemented new regulation directly impacting the digital advertising industry.
−Removed: While California was the first state to enact an omnibus consumer privacy law in 2018, similar laws enacted by four other states became enforceable in 2023, each of which affect the digital advertising ecosystem.
−Removed: Numerous other states have recently passed similar laws, which go into effect throughout 2024 and beyond.
−Removed: In the coming months and years, we expect to see more state regulation, as well as potential federal regulation, aimed at the collection and use of data to target advertisements and communicate with consumers.
+Added: A number of states, including California, have enacted comprehensive consumer privacy laws regulating the collection and use of data to target advertisements, and we expect to see more state laws and potentially federal regulation in the future.
Such legislation or regulation could affect the costs of doing business online and may adversely affect the demand for or the effectiveness and value of our solution.
−Removed: Recently enacted state laws define “personal information” or “personal data” in ways that capture the types of data that we collect, such as device identifiers and IP addresses.
−Removed: Under these laws, consumers have broad privacy rights (including rights of access and deletion), which bear similarity to some of the data subject rights granted to EEA and UK residents under the GDPR and UK GDPR.
−Removed: In addition, these laws require all businesses that engage in certain advertising uses of consumer personal information to offer and honor an opt-out of such activities, including, in some states, through browser or device-based preference signals.
+Added: These state laws require all businesses that engage in certain advertising uses of consumer personal data to offer and honor an opt-out of such activities, including, in some states, through universal browser or device-based preference signals such as GPC.
The implementation of these state laws and any corresponding regulations will cause us to incur additional compliance costs and may impose additional restrictions on us and on our industry partners.
Separate from these comprehensive state consumer privacy laws, lawmakers continue to focus their efforts on data collection, processing, and disclosures by companies that do not have direct relationships with the consumers whose personal data they process.
−Removed: Several states, including California and Texas, have recently enacted or updated laws restricting the activities of data brokers.
−Removed: Notably, California recently passed the Delete Act, dramatically increasing obligations and potential penalties relative to the state’s preexisting data broker statute.
+Added: Several states, including California, Oregon, and Texas, have recently enacted or updated laws restricting the activities of "data brokers." Notably, California's Delete Act, dramatically increases obligations and potential penalties relative to the state’s preexisting data broker statute.
Beyond additional transparency requirements, beginning in August 2026, companies registered as data brokers in California (including Magnite), must honor universal deletion requests consumers make of all data brokers via a deletion mechanism the state will create.
−Removed: Beginning in 2028, data brokers must undergo audits verifying their compliance with the Delete Act.
These obligations may reduce the data available to Magnite, require us to develop complex and expensive compliance tools and procedures, and may result in reductions in revenue.
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The GDPR and UK GDPR also set out substantial potential liabilities for certain data protection violations and create a compliance burden for us in the course of delivering our solution in Europe.
−Removed: Compliance stakes are high because penalties for violation of the law can reach up to the greater of 20 million Euros (GDPR)/£17.5 million (UK GDPR) or 4% of total worldwide annual turnover (revenue).
Further, many governments are restricting the transmission or storage of information about individuals beyond their national borders.
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Following a decision by the Belgian Data Protection Authority ("ADP"), the TCF was revised in 2023.
−Removed: There is still significant uncertainty as to whether the new TCF (or any other) tool to convey legal basis (including consent) is acceptable to regulators as an appropriate mechanism to provide transparency and establish lawful grounds for processing, and a referral case is pending before the CJEU.
−Removed: Depending on its outcome, it may become difficult or impossible for us to rely on standardized solutions to provide transparency and compliance with consent requirements, which may increase costs and risks related to compliance.
−Removed: This legal uncertainty and evolving guidance may result in certain sellers removing personal data from their inventory, which would reduce the value to buyers.
+Added: While the TCF is actively in use, its viability as a compliance mechanism remains under review by European authorities and we cannot predict its effectiveness over the long term.
Legal standards and regulatory guidance will continue to evolve.
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We are subject to regulation with respect to political advertising activities, which are governed by various federal and state laws in the U.S., and national and provincial laws worldwide.
−Removed: Online political advertising laws are rapidly evolving and in
−Removed: certain jurisdictions we have compliance requirements with respect to political ads delivered on our platform.
+Added: Online political advertising laws are rapidly evolving and in certain jurisdictions we have compliance requirements with respect to political ads delivered on our platform.
In some jurisdictions we may determine not to serve political advertisements due to uncertainty around these requirements and potential burdens of compliance.
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Any such action against us could be costly and time consuming, require us to change our business practices, divert management's attention and our resources, and be damaging to our reputation and our business.
−Removed: In addition, we could be adversely affected by new or altered self-regulatory guidelines that are inconsistent with our practices.
Our business is subject to evolving corporate governance and public disclosure regulations and expectations, including with respect to environmental, social and governance matters that could expose us to numerous risks.
−Removed: Increasingly, regulators, customers, investors, employees and other stakeholders are focusing on environmental, social and governance ("ESG") matters and related disclosures.
+Added: Regulators, customers, investors, employees and other stakeholders are increasingly focusing on environmental, social and governance ("ESG") matters and related disclosures.
These changing rules, regulations and stakeholder expectations have resulted in, and are likely to continue to result in, increased general and administrative expenses and increased management time and attention spent complying with or meeting such regulations and expectations.
+Added: Emerging regulations in various jurisdictions, including mandatory disclosure requirements and carbon reporting obligations, as well as related uncertainty from modifications to or reversals of such regulations or inconsistency between regulatory requirements in different jurisdictions, may further increase the complexity and cost of compliance.
We may also communicate certain initiatives and goals regarding environmental matters, diversity, responsible advertising, social investments and other ESG matters in our SEC filings or in other public disclosures.
−Removed: We could face scrutiny from certain stakeholders for the scope or nature of such initiatives or goals, or for any revisions to these goals.
−Removed: If our ESG related data, processes and reporting are incomplete or inaccurate, or if we fail to achieve progress with respect to our ESG goals on a timely basis, or at all, our business, financial performance and growth could be adversely affected.
+Added: While we aim to achieve these goals, we could face scrutiny from certain stakeholders for the scope, ambition, or execution of such initiatives, and stakeholders and regulators have increasingly expressed or pursued opposing views, legislation, and investment expectations with respect to ESG initiatives, including the enactment or proposal of "anti-ESG" legislation or policies.
+Added: Revisions to our goals, delays in achieving progress, or perceived shortcomings in our commitments could harm our reputation, erode stakeholder trust, and adversely impact our relationships with customers, investors, or employees.
+Added: Furthermore, if our sustainability-related data, processes, and reporting are incomplete, inaccurate, or fail to meet regulatory standards, we could be subject to penalties, regulatory scrutiny, or legal actions.
+Added: Misalignment between our ESG practices and stakeholder expectations could also impact our ability to attract and retain investors, secure partnerships, or compete effectively in the marketplace.
+Added: Additionally, failure to address emerging ESG issues, such as supply chain sustainability or climate-related risks, could expose us to operational disruptions, increased costs, and reputational damage, adversely affecting our business, financial performance, and growth prospects.
Risks Related to Our Operations
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Because our software is complex, undetected errors and failures may occur, especially when new versions or updates are made to our software or network infrastructure, changes are made to sellers' or buyers' software interfacing with our solution, or as we further integrate acquired technologies.
−Removed: For example, our Magnite Streaming platform is relatively new, and unknown errors or bugs in our software, faulty algorithms, technical or infrastructure problems, or updates to our systems could lead to an inability to effect transactions or process data to place advertisements or price inventory effectively, cause the inadvertent disclosure of proprietary data, or cause advertisements to display improperly or be placed in proximity to inappropriate content.
+Added: Any unknown errors or bugs in our software, faulty algorithms, technical or infrastructure problems, or updates to our systems could lead to an inability to effect transactions or process data to place advertisements or price inventory effectively, cause the inadvertent disclosure of proprietary data, or cause advertisements to display improperly or be placed in proximity to inappropriate content.
Such errors or failures could also result in negative publicity, disclosure of confidential information, damage to our reputation, loss of or delay in market acceptance of our solution, increased costs or loss of revenue, loss of competitive position, or claims by advertisers for losses sustained by them.
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Moreover, the failure of our data center hosting facilities or any other third-party providers to meet our capacity requirements, or dramatically increased costs of such resources, could result in interruptions in the availability or functionality of our solutions or impede our ability to scale our operations.
−Removed: All of these facilities and systems are vulnerable to
−Removed: interruption and/or damage from a number of sources, many of which are beyond our control, including, without limitation:
+Added: All of these facilities and systems are vulnerable to interruption and/or damage from a number of sources, many of which are beyond our control, including, without limitation:
(i) loss of adequate power or cooling and telecommunications failures;
−Removed: (ii) fire, flood, earthquake, hurricane, and other natural disasters;
+Added: (ii) fire, flood, earthquake, hurricane, and other natural disasters or severe weather events;
(iii) software and hardware errors, failures, or crashes;
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The use of artificial intelligence has the potential to further exacerbate these cyber security threats.
−Removed: Further, because our Los Angeles office and San Francisco offices and our California data center sites are in seismically active areas, earthquakes present a particularly serious risk of business disruption.
+Added: Further, because our Los Angeles office and San Francisco offices
+Added: and our California data center sites are in seismically active areas, earthquakes present a particularly serious risk of business disruption.
These vulnerabilities may increase with the complexity and scope of our systems and their interactions with buyer and seller systems.
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It is important to buyers that their advertisements are placed on appropriate media, in proximity with appropriate content, that the impressions for which they are charged are legitimate, and that their advertising campaigns yield their desired results.
−Removed: various measures, including proprietary technology, in an effort to store, manage and process rules set by buyers and sellers and to ensure the quality and integrity of the results delivered to sellers and buyers through our solution.
+Added: We use various measures, including proprietary technology, in an effort to store, manage and process rules set by buyers and sellers and to ensure the quality and integrity of the results delivered to sellers and buyers through our solution.
If we fail to properly implement or honor rules established by buyers and sellers, or if our measures are not adequate, advertisements may be improperly placed through our platform, which can result in harm to our reputation as well as the need to pay refunds and other potential legal liabilities.
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whether an advertisement that can be seen is actually seen, in whole or part, or for how long) represents a way of assessing the value of particular inventory as a means to reach a target audience.
−Removed: If we do not handle viewability well, or if we are not positioned to transact the higher viewability inventory competitively, our revenue and profitability could be adversely affected and we could be competitively disadvantaged.
+Added: we do not handle viewability well, or if we are not positioned to transact the higher viewability inventory competitively, our revenue and profitability could be adversely affected and we could be competitively disadvantaged.
If we fail to attract, motivate, train, and retain highly qualified engineering, marketing, sales and management personnel, our ability to execute our business strategy could be impaired.
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we cannot be certain that we are not infringing any third-party intellectual property rights, and we may have liability or indemnification obligations as a result of such claims.
−Removed: Regardless of whether claims that we are infringing patents or infringing or misappropriating other intellectual property rights have any merit, these claims are time-
−Removed: consuming and costly to evaluate and defend, and can impose a significant burden on management and employees.
+Added: Regardless of whether claims that we are infringing patents or infringing or misappropriating other intellectual property rights have any merit, these claims are time-consuming and costly to evaluate and defend, and can impose a significant burden on management and employees.
The outcome of any claim is inherently uncertain, and we may receive unfavorable interim or preliminary rulings in the course of litigation, or we may decide to settle lawsuits and disputes on terms that are unfavorable to us.
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Risks Related to Financing Arrangements
−Removed: Our financing of the SpotX Acquisition and subsequent refinancing significantly increased our leverage, which may put us at greater risk of defaulting on our debt obligations and limit our ability to conduct necessary operating activities, make strategic investments, respond to changing market conditions, or obtain future financing on favorable terms.
+Added: Our financing of the SpotX, Inc.
+Added: ("SpotX") acquisition and subsequent refinancing significantly increased our leverage, which may put us at greater risk of defaulting on our debt obligations and limit our ability to conduct necessary operating activities, make strategic investments, respond to changing market conditions, or obtain future financing on favorable terms.
We financed the cash portion of the SpotX acquisition consideration in part through borrowings under a credit agreement (the "Credit Agreement") with Goldman Sachs Bank USA as administrative and collateral agent, and other lending parties thereto for a $360.0 million seven-year senior secured term loan facility ("Term Loan B Facility"), a $65.0 million senior secured revolving credit facility ("Revolving Credit Facility"), and the sale of $400.0 million of convertible senior notes ("Convertible Senior Notes").
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On February 6, 2024, we refinanced and terminated our existing Credit Agreement and entered into a new credit agreement with Morgan Stanley Senior Funding, Inc., as term facility administrative agent, Citibank, N.A., as revolving facility administrative agent and collateral agent, and other lending parties (the “New Credit Agreement”) for a $365.0 million term loan that matures in February 2031 and a $175.0 million revolving facility that matures February 2029.
+Added: On September 18, 2024, we amended our New Credit Agreement to reduce the interest rate margin applicable to our term loan by 0.75%.
Our debt leverage could adversely affect our business and operating results by:
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Any sales in the public market of the common stock issuable upon such conversion could adversely affect prevailing market prices of our common stock.
−Removed: In addition, the existence of the Convertible Senior Notes may encourage short selling by market participants because the conversion of the Convertible Senior Notes could be used to satisfy short positions, or anticipated conversion of the Convertible Senior Notes into shares of our common stock could depress the price of our common stock.
+Added: In addition, the existence of the Convertible Senior Notes may
+Added: encourage short selling by market participants because the conversion of the Convertible Senior Notes could be used to satisfy short positions, or anticipated conversion of the Convertible Senior Notes into shares of our common stock could depress the price of our common stock.
The Capped Call Transactions may affect the value of the Convertible Senior Notes and our common stock.
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If a fundamental change occurs prior to the maturity date of the Convertible Senior Notes, holders of the Convertible Senior Notes will have the right, at their option, to require us to repurchase all or a portion of their Convertible Senior Notes.
−Removed: In addition, if a "make-whole fundamental change" (as defined in the Indenture) occurs prior the maturity date, we will in some
−Removed: cases be required to increase the conversion rate of the Convertible Senior Notes for a holder that elects to convert its Convertible Senior Notes in connection with such make-whole fundamental change.
+Added: In addition, if a "make-whole fundamental change" (as defined in the Indenture) occurs prior the maturity date, we will in some cases be required to increase the conversion rate of the Convertible Senior Notes for a holder that elects to convert its Convertible Senior Notes in connection with such make-whole fundamental change.
Furthermore, the Indenture prohibits us from engaging in certain mergers or acquisitions unless, among other things, the surviving entity assumes our obligations under the Convertible Senior Notes.
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Moreover, not material federal and state NOLs and federal research and development tax credits were generated during the pre-acquisition period by corporations that we acquired, and thus those NOLs already are subject to limitation under Section 382 and 383 of the Code and comparable state income tax laws.
−Removed: prior to the merger, Telaria acquired corporations with pre-acquisition NOLs that are subject to limitation under Section 382 of the Code and comparable state income tax laws.
+Added: Also, prior to the merger, Telaria Inc.
+Added: ("Telaria") acquired corporations with pre-acquisition NOLs that are subject to limitation under Section 382 of the Code and comparable state income tax laws.
In addition, the Company and Telaria both underwent ownership changes for tax purposes (i.e.
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Also, depending on the timing and level of our taxable income, a portion of our NOLs may expire unutilized, which could prevent us from offsetting future taxable income we may generate by the amount of our NOLs and credit carryforwards generated in tax years beginning before December 31, 2018.
−Removed: federal NOLs generated for tax years beginning before December 31, 2018 can offset 100% of taxable income, however, these NOLs can only be carried forward for 20 years.
+Added: federal NOLs generated for tax years beginning before
+Added: December 31, 2018 can offset 100% of taxable income, however, these NOLs can only be carried forward for 20 years.
federal NOLs generated for tax years beginning after December 31, 2018 can offset 80% of taxable income, however, these NOLs can be carried forward indefinitely.
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Our amended and restated certificate of incorporation and amended and restated bylaws include provisions, as described below, that could delay or prevent a change in control of the company, and make it difficult for stockholders to elect directors who are not nominated by the current members of our board of directors or take other actions to change company management.
−Removed: • Our certificate of incorporation gives our board of directors the authority to issue shares of preferred stock in one or more series, and to establish the number of shares in each series and to fix the price, designations, powers, preferences
−Removed: and relative, participating, optional or other rights, if any, and the qualifications, limitations, or restrictions of each series of the preferred stock without any further vote or action by stockholders.
+Added: • Our certificate of incorporation gives our board of directors the authority to issue shares of preferred stock in one or more series, and to establish the number of shares in each series and to fix the price, designations, powers, preferences and relative, participating, optional or other rights, if any, and the qualifications, limitations, or restrictions of each series of the preferred stock without any further vote or action by stockholders.
The issuance of shares of preferred stock may discourage, delay or prevent a merger or acquisition of the company by significantly diluting the ownership of a hostile acquirer, resulting in the loss of voting power and reduced ability to cause a takeover or effect other changes.
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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.