What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2025-02-26 compared with 2024-02-28 · 310 added, 423 removed, 970 unchanged (43% of the section changed)

6 unchanged sentences

Consolidated Statements of Operations 64

Consolidated Statements of Comprehensive Loss 65

Consolidated Statements of Comprehensive Income (Loss)

Consolidated Statements of Stockholders' Equity 66

42 unchanged sentences

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

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

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

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

15 unchanged sentences

Property and equipment, net 68,730 47,371

Right of use lease asset 60,549 78,211

Right-of-use lease assets 50,329 60,549

Internal use software development costs, net 26,625 21,926

15 unchanged sentences

Lease liabilities, non-current 38,983 49,665

Deferred tax liabilities, net

Other liabilities, non-current

27 unchanged sentences

Total expenses 617,083 774,719 689,853

Loss from operations ( 155,009 ) ( 112,784 ) ( 81,070 )

Income (loss) from operations

51,087 ( 155,009 ) ( 112,784 )

Other (income) expense:

2 unchanged sentences

Foreign exchange (gain) loss, net ( 5,083 ) 1,953 ( 1,129 )

Gain on extinguishment of debt

(Gain) loss on extinguishment of debt

7,706 ( 26,480 ) —

2 unchanged sentences

24,603 2,538 22,813

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

Income (loss) before income taxes

26,484 ( 157,547 ) ( 135,597 )

Provision (benefit) for income taxes 3,698 1,637 ( 5,274 )

8 unchanged sentences

MAGNITE, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In thousands)

5 unchanged sentences

( 2,345 ) 1,075 ( 1,775 )

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

Comprehensive income (loss)

$ 20,441 $ ( 158,109 ) $ ( 132,098 )

The accompanying notes to consolidated financial statements are an integral part of these statements.

17 unchanged sentences

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

Issuance of common stock associated with the SpotX Acquisition

12,374 — 495,591 — — — — 495,591

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

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

Retirement of common stock

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

Stock-based compensation

9 unchanged sentences

438 — 3,513 — — — — 3,513

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

Shares withheld related to net share settlement

Issuance of common stock related to RSU and PSU vesting

4,777 — — — — — — —

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

Retirement of common stock

Shares withheld related to net share settlement

( 1,039 ) — ( 11,814 ) — — — — ( 11,814 )

1 unchanged sentence

— — 74,629 — — — — 74,629

Other comprehensive loss

Other comprehensive income

— — — 1,075 — — — 1,075

3 unchanged sentences

Issuance of common stock related to employee stock purchase plan 463 — 3,589 — — — — 3,589

Issuance of common stock related to RSU and PSU vesting

Issuance of common stock related to RSU vesting

5,433 — — — — — — —

Shares withheld related to net share settlement ( 1,995 ) — ( 22,472 ) — — — — ( 22,472 )

Purchase of treasury stock — — — — — ( 1,160 ) ( 14,573 ) ( 14,573 )

Retirement of common stock ( 1,160 ) — ( 14,573 ) — — 1,160 14,573 —

Stock-based compensation — — 78,978 — — — — 78,978

Other comprehensive income

Other comprehensive loss

— — — ( 2,345 ) — — — ( 2,345 )

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

— — — — 22,786 — — 22,786

Balance at December 31, 2024 141,427

11 unchanged sentences

Impairment of intangible assets — — 3,320

Gain on extinguishment of debt

(Gain) loss on extinguishment of debt

7,706 ( 26,480 ) —

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

Provision for (recovery of) doubtful accounts

16 unchanged sentences

Capitalized internal use software development costs ( 14,260 ) ( 10,619 ) ( 13,582 )

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

Other investing activities

Mergers and acquisitions, net of indemnification claims holdback

— — ( 20,755 )

Net cash used in investing activities

1 unchanged sentence

FINANCING ACTIVITIES:

Proceeds from Convertible Senior Notes offering — — 400,000

Proceeds from issuance of debt, net of debt discount — — 349,200

Payment for capped call options — — ( 38,960 )

Proceeds from the Term Loan B Facility refinancing and repricing activities, net of debt discount 413,463 — —

Repayment of the Term Loan B Facility from refinancing and repricing activities ( 403,113 ) — —

Payment for debt issuance costs ( 4,547 ) — —

Proceeds from exercise of stock options 2,166 2,234 9,425

Proceeds from issuance of common stock under employee stock purchase plan 3,513 3,744 3,714

Repayment of debt

( 1,823 ) ( 3,600 ) ( 3,600 )

Repurchase of Convertible Senior Notes

— ( 165,518 ) —

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

Purchase of treasury stock — ( 15,663 ) ( 6,007 )

Proceeds from exercise of stock options 572 2,166 2,234

Proceeds from issuance of common stock under employee stock purchase plan 3,589 3,513 3,744

Taxes paid related to net share settlement ( 22,472 ) ( 11,814 ) ( 14,498 )

Purchase of treasury stock ( 14,573 ) — ( 15,663 )

Repayment of finance leases

— ( 276 ) ( 807 )

Payment of indemnification claims holdback — ( 2,313 ) ( 1,582 )

Net cash provided by (used in) financing activities ( 177,842 ) ( 30,172 ) 678,053

Net cash used in financing activities

( 28,904 ) ( 177,842 ) ( 30,172 )

EFFECT OF EXCHANGE RATE CHANGES ON CASH, CASH EQUIVALENTS AND RESTRICTED CASH ( 1,794 ) 575 ( 1,417 )

10 unchanged sentences

Restricted cash included in prepaid expenses and other current assets — — 248

Restricted cash included in other assets, non-current — — 52

Total cash, cash equivalents and restricted cash $ 483,220 $ 326,219 $ 326,502

6 unchanged sentences

Operating lease right-of-use assets obtained in exchange for operating lease liabilities $ 13,628 $ 4,017 $ 20,131

Operating lease right-of-use assets reduction and corresponding adjustment to operating lease liabilities from lease terminations

4,622 $ — $ —

Purchase consideration - indemnification claims holdback $ — $ — $ 2,293

Common stock and options issued for mergers and acquisitions $ — $ — $ 495,591

Debt discount, non-cash $ — $ — $ 10,800

Non-cash financing activity related to Amendment No.

1 to the 2024 Credit Agreement $ 311,974 $ — $ —

The accompanying notes to consolidated financial statements are an integral part of these statements.

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

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

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

4 unchanged sentences

The Company's clients include many of the world's leading sellers and buyers of digital advertising inventory.

Sellers monetize their inventory through the Company’s platform by seamlessly connecting to a global market of integrated buyers that transact through real-time bidding, which includes direct sale of premium inventory to a buyer, referred to as private marketplace, and open auction bidding, where buyers bid against each other in a real-time auction for the right to purchase a publisher’s inventory, referred to as open marketplace.

Sellers monetize their inventory through the Company’s platform by seamlessly connecting to a global market of integrated buyers that transact through real-time bidding.

These transactions include biddable auctions, where multiple buyers bid against each other in a real-time auction for the right to purchase a publisher's inventory, as well as reserve auctions, where publishers establish direct deals or private marketplaces with select buyers.

At the same time, buyers leverage the Company’s platform to manage their advertising spending and reach their target audiences, simplify order management and campaign tracking, obtain actionable insights into audiences for their advertising, and access impression-level purchasing from thousands of sellers.

3 unchanged sentences

All significant intercompany transactions and balances have been eliminated in consolidation.

Management has determined that the Company operates as one segment.

The Company’s chief operating decision maker reviews financial information on an aggregated and consolidated basis, together with certain operating and performance measures principally to make decisions about how to allocate resources and to measure the Company’s performance.

Management has determined that the Company operates as one operating segment and one reportable segment.

The Company’s chief operating decision maker is the Chief Executive Officer ("CEO").

The Company has one primary business activity, where it provides a platform to all of its customers, buyers and sellers, that automates the purchase and sale of digital advertising inventory globally, across all channels, formats, and auction types, as described above in Note 1—Nature of Operations.

The Company’s chief operating decision maker reviews financial information on a consolidated basis, principally to make decisions about how to allocate resources and to measure the Company’s performance.

The chief operating decision maker reviews consolidated net income (loss), which is the measure of financial profit and loss most closely aligned with generally accepted accounting principles.

The chief operating decision maker considers budget-to-actual variances for this measure, predominantly in the annual budget, forecasting process, and quarterly results assessment.

The chief operating decision maker does not review any balance sheet information at any other level than on a consolidated basis and does not review any income statement information at any other level than on a consolidated basis with the exception of revenue by geography and by channel.

Refer to Note 4 — Revenues.

The significant expense information regularly provided to the chief operating decision maker is the same as that included in the face of the Company's consolidated income statement of operations.

Reclassifications

Certain prior period amounts have been reclassified to conform with current period presentation.

Specifically, this includes deferred tax liabilities at December 31, 2023, being reclassified to other liabilities, non-current on the consolidated balance sheets and (gain) loss on disposal of property and equipment for the years ended December 31, 2023 and December 31, 2022, respectively, being reclassified to other items, net on the consolidated statements of cash flows.

Use of Estimates

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

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

Estimates relating to the allowance for doubtful accounts, amounts capitalized and estimated useful lives of internal-use software development costs, estimated useful lives of long-lived assets, recoverability of intangible assets and goodwill, and income taxes, including the realization of tax assets and estimates of tax liabilities require the selection of appropriate valuation methodologies and models, and judgment in evaluating ranges of assumptions and financial inputs.

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

In connection with the Company's periodic review of the estimated useful lives of its property and equipment, the Company extended the estimated useful lives of its network hardware assets from three years to five years effective January 1, 2024.

The change in estimated useful lives were due to actual and expected longer refresh cycles for these assets.

Based on the carrying value of network hardware assets as of December 31, 2023 and those placed in service during the year ended December 31, 2024, the effect of this change in estimate was an increase in income from operations of $ 12.6 million for the year ended December 31, 2024 and an increase in net income of $ 12.6 million, or $ 0.09 per basic and diluted share for the year ended December 31, 2024.

The updated policy reflecting the change in estimated useful lives is below.

Revenue Recognition

13 unchanged sentences

The Company recognizes revenue upon fulfillment of its performance obligation to a client, which occurs at the point in time an ad renders and is counted as a paid impression, subject to a contract existing with the client and a fixed or determinable transaction price.

The Company does not have arrangements with multiple performance obligations.

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

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

The Company considers the following when determining if a contract exists (i) contract approval by all parties, (ii) identification of each

party’s rights regarding the goods or services to be transferred, (iii) specified payment terms, (iv) commercial substance of the contract, and (v) collectability of substantially all of the consideration is probable.

The determination of whether revenue should be reported on a gross or net basis is based on an assessment of whether the Company is acting as the principal or an agent in the transaction.

3 unchanged sentences

Cost of Revenue.

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

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

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

3 unchanged sentences

Sales and Marketing.

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

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

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

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

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

Technology and Development.

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

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

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

3 unchanged sentences

General and Administrative.

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

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

Merger, Acquisition, and Restructuring Costs.

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

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

Stock-Based Compensation

2 unchanged sentences

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

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

The fair value of each option award containing service conditions is estimated on the

grant date using the Black-Scholes option-pricing model.

Generally, option awards have a contractual term of ten years .

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

2 unchanged sentences

For market condition awards, expense recognized is not subsequently reversed if the market conditions are not achieved.

The Company accounts for forfeitures when they occur.

The assumptions and estimates used in the Black-Scholes pricing model are as follows:

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

These estimates involve inherent

uncertainties and the application of management’s judgment.

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

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

8 unchanged sentences

The Company has issued common stock, which is included in outstanding common stock on the Company's consolidated balance sheets.

During 2021 and 2022, the Company repurchased shares of common stock, which was recorded as treasury stock on the Company's consolidated balance sheets.

In 2022, all repurchased shares, including any outstanding treasury stock from 2021, were subsequently retired.

From time to time, the Company has repurchased shares of common stock, which has been recorded as treasury stock on the Company's consolidated balance sheets.

All treasury stock has been subsequently retired.

The Company has not issued any shares of its preferred stock subsequent to the Company's initial public offering ("IPO") and does not have any preferred stock outstanding.

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government and its agencies.

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

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

Investments held in U.S.

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

The Company classifies investments held in money market funds as cash equivalents because the money market funds have weighted-average maturities at the date of purchase of less than 90 days, are freely redeemable into cash and have a constant net asset value.

Restricted Cash

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The estimated useful lives of the Company’s property and equipment are as follows:

Computer equipment and network hardware 3

Computer equipment and network hardware 3 to 5

Furniture, fixtures and office equipment 5 to 7

Leasehold improvements Shorter of useful life or life of lease

Purchased software

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

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

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

flows of the acquired assets.

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

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

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

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

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

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

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

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For identified leases, the Company used its incremental borrowing rate to discount the related future payment obligations, which represents the rate of interest the Company would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment.

The Company records rent expense for operating leases, including leases of office locations, data centers, and equipment, on a straight-line basis over the lease term.

The Company records rent expense for operating leases, including leases of office facilities, data centers, and equipment, on a straight-line basis over the lease term.

The straight-line calculation of rent expense includes rent escalations on certain leases, as well as lease incentives provided by the landlords, including payments for leasehold improvements and rent-free periods.

The Company begins recognition of rent expense on the commencement date, which is generally the date that the asset is made available for use.

The Company also records variable lease expense primarily related to operating expenses, utilities, or other costs that are subject to fluctuation.

Lease liability, which represents the present value of the Company's obligation related to the estimated future lease payments, is included in lease liabilities, current and lease liabilities, non-current within the consolidated balance sheets.

These liability balances are reduced as lease related payments are made.

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

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

Fair Value of Financial Instruments

21 unchanged sentences

Recently Adopted Accounting Standards

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

ASU 2021-08 requires the recognition and measurement of contract assets and contract liabilities acquired in a business combination in accordance with ASC 606, Revenue from Contracts with Customers .

Considerations to determine the amount of contract assets and contract liabilities to record at the acquisition date include the terms of the acquired contract, such as timing of payment, identification of each performance obligation in the contract and allocation of the contract transaction price to each identified performance obligation on a relative standalone selling price basis as of contract inception.

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

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

Recent Accounting Pronouncements Not Yet Adopted

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

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

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

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

Early adoption is permitted.

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

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

The Company adopted this standard during the year ended December 31, 2024.

See section Segments within this footnote for further detail.

Recent Accounting Pronouncements Not Yet Adopted

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

ASU 2023-09 is effective for annual periods beginning after December 15, 2024 on a prospective basis.

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

Early adoption and retrospective application are permitted.

The Company will adopt the guidance for the annual period beginning January 1, 2025.

The Company expects the impact of adoption of this guidance to be limited to footnote disclosure and to result in additional disaggregation of information disclosed in the rate reconciliation and with respect to income taxes paid.

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40) - Disaggregation of Income Statement Expenses ("ASU 2024-03").

ASU 2024-03 requires additional disclosures of the nature of expenses included in the income statement and presented in the footnotes.

ASU 2024-03 is effective for annual periods beginning after December 15, 2026 and for interim periods beginning after December 15, 2027 on a prospective basis.

Early adoption and retrospective application are permitted.

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

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

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(in thousands, except per share amounts)

Basic Income (Loss) Per Share:

Basic and Diluted Net Income (Loss) Per Share:

Net income (loss) $ 22,786 $ ( 159,184 ) $ ( 130,323 )

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

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

140,557 136,620 132,887

1 unchanged sentence

Diluted Income (Loss) Per Share:

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

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

Net income (loss) used to calculate diluted income (loss) per share

$ 22,786 $ ( 159,184 ) $ ( 130,323 )

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

140,557 136,620 132,887

Dilutive effect of weighted-average restricted stock units 3,731 — —

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Diluted net income (loss) per share $ 0.16 $ ( 1.17 ) $ ( 0.98 )

The following weighted-average shares have been excluded from the calculation of diluted net income (loss) per share attributable to common stockholders for each period presented because they are anti-dilutive:

December 31, 2024 December 31, 2023 December 31, 2022

5 unchanged sentences

Convertible Senior Notes 3,210 4,981 6,262

Total shares excluded from net income (loss) per share 8,270 9,774 4,940

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

Total shares excluded from diluted net income (loss) per share

3,210 8,270 9,774

As of December 31, 2024, the performance stock units granted during 2021, 2022, 2023, and 2024 had expected achievement levels of 0 %, 121 %, 137 %, and 150 %, respectively.

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

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

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

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

These expected achievement levels are included in the calculation of weighted-average shares in the tables above.

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

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

For the years ended December 31, 2024, 2023, and 2022, the number of shares that would be issuable assuming conversion of all of the Convertible Senior Notes (as defined in Note 17) was approximately 3,210,098 , 3,210,098 , and 6,261,560 , respectively, and were excluded from the calculation of diluted loss per share because they were anti-dilutive.

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

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

Note 4— Revenues

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Total $ 668,170 100 % $ 619,710 100 % $ 577,069 100 %

The following table presents the Company's revenue disaggregated by geographic location, based on the location of the Company's sellers:

The following table presents the Company's revenue disaggregated by geographic location, based on the location of the Company's sellers for the years ended December 31, 2024, 2023, 2022:

December 31, 2024 December 31, 2023 December 31, 2022

(in thousands)

(in thousands, except percentages)

United States $ 498,440 75 % $ 462,167 75 % $ 447,634 78 %

22 unchanged sentences

$ 20,363 $ 1,092 $ 3,475

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

Write-offs ( 18,954 ) ( 856 ) ( 751 )

2 unchanged sentences

Allowance for doubtful accounts, December 31 $ 2,902 $ 20,363 $ 1,092

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

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

During the year ended December 31, 2024, the Company wrote off $ 19.0 million of allowance for doubtful accounts, of which $ 18.5 million was attributable to the outstanding accounts receivable from a buyer that filed for bankruptcy during 2023.

The change in provision for expected credit losses associated with accounts receivable and the offsetting impact of the change to contra seller payables related to recoveries of uncollected buyer receivables result in the amount of bad debt expense or recoveries the Company recognizes each year.

During the year ended December 31, 2024, the increase in the provision for expected credit losses associated with accounts receivable of $ 1.4 million was partially offset by increases of contra seller payables related to recoveries of uncollected buyer receivables, which resulted in an immaterial amount of bad debt expense.

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

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

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

Note 5— Fair Value Measurements

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$ 281,162 $ 281,162 $ — $ —

At December 31, 2023 and 2022, cash equivalents of $ 281.2 million and $ 259.6 million, respectively, consisted of money market funds and commercial paper, with original maturities of three months or less.

At December 31, 2024 and 2023, cash equivalents of $ 436.7 million and $ 281.2 million, respectively, consisted of money market funds, with original maturities of three months or less.

The carrying amounts of cash equivalents are classified as Level 1 or Level 2 depending on whether or not their fair values are based on quoted market prices for identical securities that are traded in an active market.

At December 31, 2023 and 2022, the Company had Convertible Senior Notes and its Term Loan B Facility (as defined in Note 17) included in its balance sheets.

At December 31, 2024, the Company had debt outstanding under its Convertible Senior Notes and loans under its 2024 Term Loan B Facility (as defined in Note 17) and at December 31, 2023, had debt outstanding under its Convertible Senior Notes and loans under its 2021 Term Loan B Facility (as defined in Note 17) included in its balance sheets.

The estimated fair value of the Company's Convertible Senior Notes was $ 190.2 million and $ 174.3 million, as of December 31, 2024 and 2023, respectively.

The estimated fair value of Convertible Senior Notes is based on market rates and the closing trading price of the Convertible Senior Notes as of December 31, 2024 and 2023 and is classified as Level 2 in the fair value hierarchy.

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

At December 31, 2024 and 2023, the estimated fair value of the Company's 2024 Term Loan B Facility and of the Company's 2021 Term Loan B Facility was $ 368.2 million and $ 352.3 million, respectively.

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

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(in thousands)

Purchased software $ 1,124 $ 1,250

Computer equipment and network hardware $ 184,155 $ 154,821

1 unchanged sentence

Leasehold improvements 2,576 3,893

Purchased software

Gross property and equipment 191,340 163,869

1 unchanged sentence

Net property and equipment $ 68,730 $ 47,371

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

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

Depreciation expense related to property and equipment totaled $ 16.4 million, $ 24.0 million, and $ 19.0 million for the years ended December 31, 2024, 2023, and 2022, respectively.

See Note 2 for information related to the change in estimated useful lives of network hardware assets.

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

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Amortization expense was $ 12.0 million, $ 14.3 million, and $ 12.6 million for the years ended December 31, 2024, 2023, and 2022, respectively.

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

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

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

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

Based on the Company’s internal use software development costs at December 31, 2024, excluding projects that are not ready for their intended use with a value of $ 7.3 million, estimated amortization expense of $ 10.8 million, $ 6.4 million, and $ 2.1 million is expected to be recognized in 2025, 2026, and 2027, respectively.

Note 8— Goodwill and Intangible Assets

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

Beginning balance at December 31, 2021

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

Adjustments to the Acquisition of SpotX (Note 9) ( 112 )

Ending balance at December 31, 2022

Additions or adjustments

Ending balance at December 31, 2023

The Company's goodwill balance as of December 31, 2024 and December 31, 2023 was $ 978.2 million.

The Company's qualitative assessment for impairment in the fourth quarter of 2024 did not indicate that it is more likely than not that the fair value of its goodwill is less than the aggregate carrying amount.

The Company’s intangible assets as of December 31, 2024 and 2023 included the following:

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In-process research and development 8,830 8,830

Other intangible assets

Non-compete agreements

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In-process research and development ( 6,856 ) ( 4,832 )

Other intangible assets

( 900 ) ( 750 )

Non-compete agreements

( 185 ) ( 562 )

Total accumulated amortization—intangible assets

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Amortization of intangible assets for the years ended December 31, 2024, 2023, and 2022 was $ 30.1 million, $ 202.5 million, and $ 184.4 million, respectively.

For the years ended December 31, 2023, 2022, and 2021, the Company wrote off fully amortized intangible assets with a historical cost of $ 383.7 million, $ 40.5 million and $ 11.1 million, respectively.

During the year ended December 31, 2022, the Company abandoned certain in-process research and development projects and technology intangible assets.

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

During the fourth quarter of 2022, the Company reassessed the remaining estimated useful lives of the developed technology and in-process research and development related to the SpotX acquisition based on the remaining expected benefit from those assets, which were revised to end during the third quarter of 2023.

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

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

The estimated remaining amortization expense associated with the Company's intangible assets was as follows as of December 31, 2024:

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2025 $ 14,488

Thereafter 216

Total $ 21,309

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

Note 9— Business Combinations

2021 Acquisition—SpotX

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

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

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

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

The Cash Consideration is subject to customary working capital and other adjustments.

The working capital was approximately $ 65.2 million, including cash balances acquired and other working capital adjustments, resulting in a total purchase price of $ 1.2 billion.

The Company financed the Cash Consideration through borrowings under the Term Loan B Facility and the Convertible Senior Notes (Note 17).

In accordance with ASC 805, the Company recorded the acquisition based on the fair value of the consideration transferred and then allocated the purchase price to the identifiable assets acquired and liabilities assumed based on their respective fair values as of the acquisition date.

The excess of the value of consideration transferred over the aggregate fair value of those net assets was recorded as goodwill.

Any identified definite lived intangible assets will be amortized over their estimated useful lives and any identified intangible assets with indefinite useful lives and goodwill will not be amortized but will be tested for impairment at least annually.

All intangible assets and goodwill will be tested for impairment when certain indicators are present.

Determining the fair value of assets acquired and liabilities assumed requires management to use significant judgment and estimates including the selection of valuation methodologies, estimates of future revenues and cash flows, discount rates, and selection of comparable companies.

For purposes of measuring the estimated fair value, where applicable, of the assets acquired and the liabilities assumed, the Company has applied the guidance in ASC 820, Fair Value Measurement, which establishes a framework for measuring fair value.

In accordance with ASC 820, fair value is an exit price and is defined as "the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date." Under ASC 805, acquisition-related transaction costs and acquisition-related restructuring charges are not included as components of consideration transferred but are accounted for as expenses in the period in which the costs are incurred.

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

Cash Consideration $ 640,000

Stock Consideration (Fair Value of Shares of Magnite common stock) 495,591

Working capital adjustment 65,152

Total purchase consideration $ 1,200,743

The purchase consideration for the SpotX Acquisition included 12,374,315 shares of the Company's common stock with a fair value of approximately $ 495.6 million, based on the close price of the Company's common stock at closing on April 30, 2021, which was $ 40.05 per share, and working capital adjustment of $ 65.2 million, mainly consisting of cash balances acquired on the date of the SpotX Acquisition and other opening balance sheet adjustments.

During the first quarter of 2022, the Company adjusted the preliminary purchase price allocation for SpotX based on updated fair values associated with the acquired assets and liabilities.

Adjustments impacted acquisition related accounts payable and tax accruals.

The Company finalized the purchase price allocation of SpotX in the second quarter of 2022, resulting in no additional changes to the purchase price allocation.

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

Cash $ 81,967

Restricted cash 199

Accounts receivable 199,649

Prepaid and other assets, current 12,308

Fixed assets 6,823

Intangible assets 429,600

Right-of-use lease asset 10,055

Goodwill 782,719

Total assets to be acquired 1,523,320

Accounts payable and accrued expenses 205,822

Other current liabilities 1,091

Lease liabilities 12,625

Deferred tax liability, net 103,039

Total liabilities to be assumed 322,577

Total purchase price $ 1,200,743

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

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

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

The acquired intangibles and goodwill resulting from the SpotX Acquisition are not amortizable for tax purposes.

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

Estimated Useful Life

Technology $ 280,400 5 years

Customer relationships 130,300 2 to 4 years

Backlog 11,100 < 1 year

In-process research and development 5,800 3 years*

Non-compete agreements 1,500 1 year

Trademarks 500 < 1 year

Total intangible assets acquired $ 429,600

* In-process research and development consists of six projects with a weighted-average useful life of 3 years.

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

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

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

The Company used the Loss‐of‐Revenue and Income Method in its valuation of the existing customer relationships and non-compete agreements.

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

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

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

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

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

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

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

The fair value of the trademarks was based on the Income Approach, specifically the Relief‐from‐Royalty Method.

Under this method, data is obtained regarding actual royalty payments made for similar intangible assets.

After the appropriate royalty rate is determined, the reasonable royalty savings is then discounted to its present value over the remaining technological, economic, or legal life of the intangible asset.

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

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

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

The acquired intangible assets and goodwill resulting from the SpotX Acquisition are not tax deductible.

As part of the SpotX Acquisition, deferred tax liabilities were established.

As a result of the deferred tax liability balance created by the acquisition, the Company reduced its deferred tax asset ("DTA") valuation allowance by $ 56.2 million for the year ended December 31, 2021.

Such reduction was recognized as an income tax benefit in the post-acquisition consolidated statements of operations for the year ended December 31, 2021.

The Company recognized approximately $ 27.9 million of acquisition related costs included in the merger, acquisition, and restructuring costs in the Company's consolidated statements of operations during the year ended December 31, 2021 related to the SpotX Acquisition.

2021 Acquisition—SpringServe

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

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

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

Cash Consideration $ 31,136

SpotX initial cash investment in SpringServe 2,075

Fair value appreciation of SpotX purchase right 7,450

Indemnification claims - holdback 1,409

Total purchase consideration $ 42,070

In 2020, SpotX made a minority investment of $ 2.1 million in SpringServe in conjunction with a strategic partnership agreement between the two companies, which included an option agreement to purchase SpringServe.

At the time of Magnite's acquisition of SpotX, the fair value of SpotX's minority investment and purchase right were valued at a combined $ 7.5 million for a total minority investment and purchase right of $ 9.5 million.

In connection with the SpringServe Acquisition, $ 1.4 million of the purchase price was held back to cover possible indemnification claims.

The excess of the value of consideration transferred over the aggregate fair value of those net assets was recorded as goodwill.

All intangible assets and goodwill will be tested for impairment when certain indicators are present.

related transaction costs and acquisition-related restructuring charges are not included as components of consideration transferred but are accounted for as expenses in the period in which the costs are incurred.

The Company finalized the purchase price allocation of SpringServe in the third quarter of 2022, resulting in no additional changes to the purchase price allocation and the full payment of the $ 1.4 million holdback liability.

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

Accounts receivable 3,234

Prepaid and other assets, current 157

Fixed assets 25

Intangible assets 23,400

Right-of-use lease asset 1,879

Goodwill 24,156

Total assets to be acquired 53,913

Accounts payable and accrued expenses 2,475

Other current liabilities 35

Lease liabilities 3,179

Deferred tax liability, net 6,154

Total liabilities to be assumed 11,843

Total preliminary purchase price $ 42,070

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

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

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

Estimated Useful Life

Technology $ 15,500 5 years

Customer relationships 5,700 2 years

Trademarks and Trade Names 900 3 years

In-process research and development 800 3 years*

Non-compete agreements 500 2 years

Total intangible assets acquired $ 23,400

* In-process research and development consists of two projects with a weighted-average useful life of 3 years.

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

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

At the acquisition date, SpringServe had existing customer relationships.

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

In addition, certain employees of SpringServe signed two year non-compete agreements.

The Company used the Loss‐of‐Revenue and Income Method in its valuation of the existing customer relationships and non-compete agreements.

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

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

The fair value of the trademarks and trade names were based on the Income Approach, specifically the Relief‐from‐Royalty Method.

Under this method, data is obtained regarding actual royalty payments made for similar intangible assets.

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

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

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

The acquired intangibles and goodwill resulting from the SpringServe Acquisition are not tax deductible.

As part of the SpringServe Acquisition, deferred tax liabilities were established.

As a result of this and the SpotX deferred tax liability balance, the Company recognized an income tax benefit in the post-acquisition consolidated statements of operations for the year ended December 31, 2021.

SpringServe Acquisition related costs included in merger, acquisition, and restructuring costs in the Company's consolidated statements of operations during the year ended December 31, 2021 were immaterial.

2021 Acquisition—Nth Party

The Company completed the acquisition of Nth Party, Ltd.

(“Nth Party”), a developer of cryptographic software for secure audience data sharing and analysis in December 2021 for a total purchase price of $ 9.0 million, in cash.

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

The allocation of purchase consideration resulted in approximately $ 5.4 million of developed technology intangible assets with an estimated useful life of five years , approximately $ 0.2 million non-compete intangible assets with an estimated useful life of two years , approximately $ 1.3 million of deferred tax liability, and goodwill of approximately $ 4.8 million, which is attributable to the workforce of Nth Party and revenue growth from the acquisition.

Acquired intangibles and goodwill resulting from the Nth Party acquisition are not deductible for income tax purposes.

Unaudited Pro Forma Information

The following table provides unaudited pro forma information as if the SpotX and SpringServe Acquisitions had been acquired by the Company as of January 1, 2020.

The unaudited pro forma information reflects adjustments for additional amortization resulting from the fair value adjustments to assets acquired and liabilities assumed, adjustments for alignment of accounting policies, and transaction expenses as if the SpotX and SpringServe Acquisitions occurred on January 1, 2020.

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

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

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

December 31, 2021

(in thousands)

Pro Forma Revenue $ 540,466

Pro Forma Net Loss $ ( 86,621 )

During the year ended December 31, 2021, due to the process of integrating the operations of SpotX into the operations of the Company, the determination of SpotX's post-acquisition revenue and operating results on a standalone basis was impracticable.

The SpringServe post-acquisition revenue and operating results on a standalone basis were immaterial.

2022 Acquisition—Carbon

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

The allocation of purchase consideration resulted in an estimated $ 14.2 million of developed technology intangible assets with an estimated useful life of five years , $ 0.2 million non-compete intangible assets with an estimated useful life of two years , $ 0.2 million of customer relationships with an estimated useful life of six months , and goodwill of $ 8.5 million, which is attributable to the workforce of Carbon and revenue growth from the acquisition.

revenue growth from the acquisition.

For tax purposes, the Carbon Acquisition was treated as an asset acquisition.

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Accrued employee-related payables 17,698 15,090

Accrued holdback - indemnification claims — 2,313

Total $ 1,466,377 $ 1,372,176

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Balance at December 31, 2022

Other comprehensive loss ( 1,775 )

Balance at December 31, 2022

Other comprehensive income

Balance at December 31, 2023

Other comprehensive loss

Balance at December 31, 2024

Note 12— Stock-Based Compensation

In connection with its IPO, the Company implemented its 2014 Equity Incentive Plan, which governs equity awards made to employees and directors of the Company since the IPO.

Prior to the IPO, the Company granted equity awards under its 2007 Stock Incentive Plan, which governs equity awards made to employees and contractors prior to the IPO.

In November 2014, the Company approved the 2014 Inducement Grant Equity Incentive Plan (the "Inducement Plan"), which governs certain equity awards made to certain employees in connection with commencement of employment.

In connection with the Company's acquisitions of Chango Inc.

("Chango"), iSocket, Inc.

("iSocket"), and nToggle, Inc.

("nToggle") it assumed the existing employee equity award plans, the 2009 Chango Stock Option Plan (the "Chango Plan"), the iSocket 2009 Equity Incentive Plan (the "iSocket Plan"), and the nToggle 2014 Equity Incentive Plan (the "nToggle Plan").

In connection with the merger with Telaria, the Company assumed Telaria's 2013 Equity Incentive Plan, as amended (the "Telaria Plan");

the 2008 Stock Plan, as amended (the "2008 Stock Plan");

and the ScanScout, Inc.

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

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

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

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

In connection with the Company's acquisition of nToggle, Inc.

("nToggle"), it assumed the nToggle 2014 Equity Incentive Plan (the "nToggle Plan"), and in connection with the merger with Telaria, Inc.

("Telaria"), the Company assumed Telaria's 2013 Equity Incentive Plan, as amended (the "Telaria Plan").

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

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

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

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

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

All compensatory equity awards outstanding at December 31, 2024 were issued pursuant to the Amended and Restated 2014 Equity Incentive Plan, the 2014 Equity Incentive Plan, the nToggle Plan, the Telaria Plan, or the Inducement Plan.

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

2 unchanged sentences

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

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

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

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

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

In addition, each Director of the Company's Board of Directors

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

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

As of December 31, 2024, an aggregate of 18,669,345 shares remained available for future grants, assuming target number of PSUs, under the Amended and Restated 2014 Equity Incentive Plan.

Stock Options

8 unchanged sentences

Exercisable at December 31, 2024 3,760 $ 8.09 4.3 years $ 34,203

The total intrinsic value of options exercised during the year ended December 31, 2023 was $ 2.2 million.

At December 31, 2023, the Company had unrecognized employee stock-based compensation expense relating to nonvested stock options of approximately $ 5.6 million, which is expected to be recognized over a weighted-average period of 2.0 years.

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

The total intrinsic value of options exercised during the years ended December 31, 2024, 2023, and 2022 was $ 1.0 million, $ 2.2 million, and $ 5.1 million, respectively, based on their respective exercise dates.

At December 31, 2024, the Company had unrecognized stock-based compensation expense relating to unvested stock options of approximately $ 3.0 million, which is expected to be recognized over a weighted-average period of 1.8 years.

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

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

The grant date fair value of options granted during the years ended December 31, 2024, 2023, and 2022 was $ 6.34 , $ 7.27 , and $ 8.93 , respectively, per share.

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

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Restricted stock units outstanding at December 31, 2024 11,809 $ 10.69

Restricted stock units outstanding and unvested at December 31, 2023

11,450 $ 12.63

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

The intrinsic value of restricted stock units that vested during the year ended December 31, 2023 was $ 50.7 million.

The weighted-average grant date fair value per share of restricted stock units granted during the years ended December 31, 2024, 2023, and 2022 was $ 9.43 , $ 10.67 , and $ 12.69 , respectively.

The fair value of restricted stock units that vested and were released during the years ended December 31, 2024, 2023, and 2022 was $ 61.9 million, $ 50.7 million, and $ 37.0 million, respectively, based on their respective vesting dates.

At December 31, 2024, the intrinsic value of unvested restricted stock units was $ 188.0 million.

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Performance Stock Units

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

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

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

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

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

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

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

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

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

In 2022 and 2023, the Company granted PSUs to select executive employees that vest based on share price metrics tied to total shareholder return ("TSR") relative to a peer group over a three-year period, assuming a performance measurement of 100 %.

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

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

In 2024, the Company additionally granted PSUs with an aggregate target of 486,431 shares, assuming a performance measurement of 100 %.

The amount of shares that will ultimately vest will be determined based on the Company's TSR relative to the TSRs of a peer group for the three-year period beginning January 1, 2024, as well as certain interim measurements based on relative TSR for the one-year and two-year periods beginning on January 1, 2024.

At December 31, 2024, the first one-year interim performance measurement was 150 %, subject to the remaining vesting criteria.

Stock-based compensation expense for PSUs is based on the grant date fair value and the number of shares assuming a performance measurement of 100 %.

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

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Outstanding at December 31, 2023

Vested and released

Granted 486 $ 11.76

( 26 ) $ 52.49

Outstanding at December 31, 2024

1,427 $ 15.35

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

The grant date fair value of PSUs granted during the years ended December 31, 2024, 2023, and 2022 was $ 11.76 , $ 13.32 , and $ 17.28 , respectively, per share.

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

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Dividend yield — % — % — %

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

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

No PSUs vested during the years ended December 31, 2024 and 2022.

The fair value of PSUs that vested and were released during the year ended December 31, 2023 was $ 1.2 million, based on their respective vesting dates.

At December 31, 2024, the intrinsic value of unvested performance stock units based on expected achievement levels was $ 23.6 million.

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

As of December 31, 2024, the Company had unrecognized stock-based compensation expense relating to unvested PSUs of approximately $ 7.3 million,

which will be recognized over a weighted-average period of 1.5 years.

Employee Stock Purchase Plan

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

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

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

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Total stock-based compensation expense $ 76,519 $ 72,617 $ 64,118

For the year ended December 31, 2024, the Company recognized $ 1.1 million of income tax benefit on stock-based compensation expense related to 2024, which was reflected in the provision (benefit) for income taxes in the consolidated statements of operations.

For the year ended December 31, 2024, income tax benefit realized related to awards vested or exercised during 2024 was $ 14.5 million.

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

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

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

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

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

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

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

Note 13— Merger, Acquisition, and Restructuring Costs

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

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

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

During the year ended December 31, 2024, the Company did not incur any merger, acquisition, and restructuring costs.

("SpotX") acquisition, including loss contracts for office facilities the Company does not plan to continue to occupy and impairment charges related to certain assets it no longer plans to utilize.

During the year ended December 31, 2022, these activities consisted primarily of professional services fees and employee termination costs, including stock-based compensation charges, associated with the Telaria merger, the SpotX acquisition, the SpringServe, LLC ("SpringServe") acquisition, and restructuring activities.

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

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

December 31, 2023 December 31, 2022

(in thousands)

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Exit costs 1,408 —

Impairment of property and equipment, net (Note 6)

Impairment of property and equipment, net

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

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

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

Accrued restructuring costs related to mergers, acquisition, and restructuring activities were primarily related to the SpotX acquisition and the Telaria merger.

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

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Loss contracts (facility related)

2,190 — 2,500

Impairment of property and equipment, net

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International 7,003 7,764 9,883

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

Income (loss) before income taxes

$ 26,484 $ ( 157,547 ) $ ( 135,597 )

The following are the components of the provision (benefit) for income taxes for the years ended December 31, 2024, 2023, and 2022:

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Foreign 251 2,272 ( 516 )

Total deferred benefit ( 2,282 ) ( 8,879 ) ( 98,971 )

Total deferred provision (benefit)

63 ( 2,282 ) ( 8,879 )

Total provision (benefit) for income taxes $ 3,698 $ 1,637 $ ( 5,274 )

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

The Company recorded an income tax expense of $ 3.7 million for the year ended December 31, 2024 compared to an income tax expense of $ 1.6 million and an income tax benefit of $ 5.3 million for the years ended December 31, 2023 and 2022, respectively.

The income tax expense for the year ended December 31, 2024 was primarily the result of the domestic valuation allowance on the Company's deferred tax assets and the federal, state, and foreign income tax liabilities.

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

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

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

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

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

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

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State income taxes, net of federal benefit 4.6 % 1.7 % 3.1 %

Foreign loss at other than U.S.

Foreign income (loss) at other than U.S.

rates 1.8 % ( 0.3 ) % ( 0.1 ) %

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Allowance for doubtful accounts

$ 1,597 $ 5,959

Accrued liabilities 2,102 1,133

1 unchanged sentence

Stock-based compensation 3,053 3,803

Intangible assets

Net operating loss carryovers 77,581 91,716

Tax credit carryovers 11,098 10,005

Capitalized facilitative costs

Other 816 2,384

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Intangible assets — ( 6,185 )

Right of use lease asset ( 10,356 ) ( 12,763 )

Right-of-use lease assets

( 7,647 ) ( 10,356 )

Debt issuance and original issue discount

Total deferred tax liabilities ( 18,239 ) ( 20,921 )

1 unchanged sentence

$ ( 410 ) $ ( 315 )

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

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

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

As of December 31, 2024, the net deferred tax liabilities of $ 0.4 million is presented in the Company's consolidated balance sheets as part of other liabilities, non-current, of $ 0.7 million and other assets, non-current of $ 0.3 million.

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

The valuation allowance was decreased by $ 12.6 million for the year ended December 31, 2024, and increased by $ 30.2 million, and $ 20.7 million for the years ended December 31, 2023 and 2022, respectively.

At December 31, 2024, the Company had U.S.

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At December 31, 2024, the Company had acquired federal research and development tax credit carryforwards of approximately $ 6.2 million which will begin to expire in 2036, and state research and development tax credits of approximately $ 10.2 million, the majority of which carry forward indefinitely.

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

The IRA includes a new corporate alternative minimum tax (the “Corporate AMT”) of 15% on the adjusted financial statement income (the “AFSI”) of corporations with average AFSI exceeding $1.0 billion over a three-year period.

The Corporate AMT is effective for tax years beginning after December 31, 2022 and is not expected to impact the Company.

Additionally, the IRA imposes an excise tax of 1% on the fair market value of net stock repurchases made after December 31, 2022.

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

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

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The Company believes that the ownership change will not impact its ability to utilize substantially all of its NOLs and state research and development carryforward tax credits to the extent it will generate taxable income that can be offset by such losses.

The Company reasonably expects its federal research and development carryforward tax credits will not be recovered prior to expiration.

The Company reasonably expects some of its federal research and development carryforward tax credits will not be recovered prior to expiration.

Additionally, for tax years beginning after December 31, 2017, the Tax Cuts and Jobs Act limits the NOL deduction to 80% of taxable income, repeals carryback of all NOLs arising in a tax year ending after 2017, and permits indefinite carryforward for all such NOLs.

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

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

For the India, Netherlands, Sweden, and the United Kingdom, all tax years remain open for examination by the local country tax authorities, for France only 2022 and forward are open, for Australia and Singapore only 2021 and forward are open for examination, for Brazil, Canada, Germany, and Malaysia only 2020 and forward are open for examination, for Italy and New Zealand only 2019 and forward are open for examination, and for Japan 2018 and forward remain open for examination.

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

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

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

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

The Company's lease terms include periods under options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option.

The weighted average remaining lease term of leases included in lease liabilities is 4.6 years and 5.2 years as of December 31, 2024 and December 31, 2023, respectively.

As of December 31, 2024 and December 31, 2023, a weighted average discount rate of 6.12 % and 6.19 %, respectively, were applied to the remaining lease payments to calculate the lease liabilities included within the consolidated balance sheets.

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

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

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

Operating lease expense was $ 21.2 million, $ 24.5 million and $ 23.3 million for the years ended December 31, 2024, 2023 and 2022, respectively.

Included in operating lease expense for the year ended December 31, 2024 was a gain of $ 1.8 million related to the early termination of an office facility lease.

The Company recognized variable lease expense of $ 1.6 million, $ 3.8 million, and

$ 3.1 million for the years ended December 31, 2024, 2023 and 2022, respectively.

For the year ended December 31, 2024, variable lease expense included $ 1.4 million of negative variable lease expense related to rent concessions for an office lease.

The maturity of the Company's lease liabilities associated with leases included in the lease liabilities and ROU assets were as follows as of December 31, 2024 (in thousands):

2025 $ 18,722

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Lease liabilities—total (discounted) $ 55,069

Cash paid for amounts included in lease liabilities was $ 24.1 million, $ 26.6 million, and $ 22.6 million for the years ended December 31, 2024, 2023, and 2022, respectively.

The Company also received rental income of $ 5.0 million, $ 5.3 million, and $ 5.2 million for real estate leases for which it subleased the property to a third party during the years ended December 31, 2024, 2023, and 2022, respectively.

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

In addition to the lease liabilities included in these consolidated financial statements, the Company entered into agreements for office space and data centers that had not commenced as of December 31, 2024;

therefore, the leases were not included in the lease liabilities and ROU assets balance as of December 31, 2024.

The Company has future commitments totaling $ 25.9 million over a term of 4.7 years related to these agreements.

The Company's operating lease right-of-use assets by geographical region was as follows:

December 31, 2024 December 31, 2023

(in thousands)

United States

$ 45,178 $ 52,307

International

$ 50,329 $ 60,549

Note 16— Commitments and Contingencies

2 unchanged sentences

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

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

2024 $ 62,038

As of December 31, 2024, the Company's outstanding non-cancelable contractual obligations with a remaining term in excess of one year consist of the following (in thousands):

Total $ 16,339

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

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

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

Guarantees and Indemnification

22 unchanged sentences

Convertible Senior Notes $ 205,067 $ 205,067

Unamortized debt issuance cost ( 2,598 ) ( 7,355 )

Net 202,469 392,645

Unamortized debt issuance costs

( 1,424 ) ( 2,598 )

Net carrying value of Convertible Senior Notes

203,643 202,469

Term Loan B Facility*

Unamortized discount and debt issuance cost ( 16,883 ) ( 20,888 )

Net 334,117 333,712

Current portion ( 3,600 ) ( 3,600 )

Total non-current debt $ 532,986 $ 722,757

363,177 351,000

Unamortized discount and debt issuance costs

( 13,075 ) ( 16,883 )

Net carrying value of Term Loan B Facility*

350,102 334,117

Balance Sheet Presentation:

Debt, current

Debt, non-current, net of debt discount and debt issuance costs

550,104 532,986

$ 553,745 $ 536,586

* Term Loan B Facility as of December 31, 2024 and December 31, 2023 reflect the balances under the 2024 Term Loan B Facility and the 2021 Term Loan B Facility, respectively.

Maturities of the principal amount of the Company's long-term debt as of December 31, 2024 are as follows (in thousands):

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

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

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

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

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

Amortization of the debt discount and debt issuance costs associated with the Company's indebtedness totaled $ 3.6 million, $ 5.8 million, and $ 6.3 million for the years ended December 31, 2024, 2023, and 2022, respectively.

In addition, amortization of deferred financing costs were an immaterial amount for each of the years ended December 31, 2024, 2023, and 2022, respectively.

Deferred financing costs are included in other assets, non-current in the consolidated balance sheets.

Convertible Senior Notes and Capped Call Transactions

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

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

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

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All conversions with a conversion date that occurs on or after September 15, 2025 will be settled using the same settlement method, and the Company will send notice of such settlement method to noteholders no later than the open of business on September 15, 2025.

The Company may not redeem the Convertible Senior Notes at their option at any time before March 20, 2024.

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

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The Capped Call Transactions were entered into with third party broker-dealers to limit the potential dilution that would occur if the Company has to settle the conversion value in excess of the principal in shares.

This exposure will be covered (i.e., the Company will receive as many shares as are required to be issued between the conversion price of $ 63.8818 and the maximum price of $ 91.2600 ).

This exposure will be covered (i.e., the Company will receive as many shares as are required to be

issued between the conversion price of $ 63.8818 and the maximum price of $ 91.2600 ).

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

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

Convertible Senior Notes.

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

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

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

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

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

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

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

December 31, 2023

December 31, 2022 December 31, 2021

The following table sets forth interest expense related to the Convertible Senior Notes for the years ended December 31, 2024, 2023, and 2022 (in thousands, except interest rates):

December 31, 2024 December 31, 2023 December 31, 2022

(in thousands, except interest rates)

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Effective interest rate 0.82 % 0.82 % 0.82 %

Amortization expense for the Company's debt issuance costs related to the Convertible Senior notes for fiscal years 2024 through 2026 is as follows (in thousands):

Amortization expense for the Company's debt issuance costs related to the Convertible Senior Notes for the fiscal years 2025 through 2026 is as follows (in thousands):

Fiscal Year Debt Issuance Costs

Total $ 1,424

Credit Agreement

2021 and 2024 Credit Agreements

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

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

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

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

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

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

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

The 2021 Credit Agreement provided for a $ 360.0 million seven-year senior secured term loan facility ("2021 Term Loan B Facility"), which had a maturity in April 2028, and a $ 65.0 million senior secured revolving credit facility (as amended in June 2021, the "2021 Revolving Credit Facility"), which had a maturity in December 2025.

In June 2023, the Company amended the 2021 Credit Agreement (the "Amended 2021 Credit Agreement") to transition away from a variable interest rate based on the Eurodollar Rate towards a similar variable interest rate based on Adjusted Term SOFR, as defined in the Amended 2021 Credit Agreement, which is based on the secured overnight financing rate ("SOFR").

Amounts outstanding under the Amended 2021 Credit Agreement accrue interest at a rate equal to either, (1) for the 2021 Term Loan B Facility, at the Company’s election, the Adjusted Term SOFR plus a margin of 5.00 % per annum, or ABR (as defined in the Amended 2021 Credit Agreement) plus a margin of 4.00 %, and (2) for the 2021 Revolving Credit Facility, at the Company’s election, the Adjusted Term SOFR plus a margin of 4.25 % to 4.75 %, or ABR plus a margin of 3.25 % to 3.75 %, in each case, depending on the Company’s first lien net leverage ratio.

On February 6, 2024, the Company refinanced its credit agreement whereby it entered into a new credit agreement (the "2024 Credit Agreement") with Morgan Stanley Senior Funding, Inc.

as the Company term loan administrative agent and Citibank,

as the Company's revolving facility administrative agent and collateral agent, and other lender parties thereto.

The 2024 Credit Agreement included a $ 365.0 million seven-year senior secured term loan facility (the "2024 Term Loan B Facility"), whose loans will mature in February 2031 and a $ 175.0 million five-year senior secured revolving credit facility (the "2024 Revolving Credit Facility"), which will mature in February 2029.

The Company primarily used the proceeds from the 2024 Term Loan B Facility to repay in full all outstanding amounts owed under the Company's Amended 2021 Credit Agreement.

Accordingly, the Amended 2021 Credit Agreement was terminated and replaced in its entirety.

The obligations under the 2024 Credit Agreement are secured by substantially all of the assets of the Company.

Amounts outstanding under the 2024 Credit Agreement accrue interest at a rate equal to either, (1) for the 2024 Term Loan B Facility, at the Company’s election, Term SOFR (as defined in the 2024 Credit Agreement) plus a margin of 4.50 % per annum, or ABR (as defined in the 2024 Credit Agreement) plus a margin of 3.50 %, and (2) for the 2024 Revolving Credit Facility, at the Company’s election, Term SOFR plus a margin of 3.50 % to 4.00 %, or ABR plus a margin of 2.50 % to 3.00 %, in each case, depending on the Company’s First Lien Net Leverage Ratio (as defined in the 2024 Credit Agreement).

On September 18, 2024, the Company entered into Amendment No.

1 to the 2024 Credit Agreement ("Amendment No.

1"), which reduced the interest rate of the 2024 Term Loan B Facility by 75 basis points to Term SOFR plus a margin of 3.75 %, from the previous rate of Term SOFR plus a margin of 4.50 %.

Amendment No.

1 also reduced the interest rate margin of any ABR Loans (as defined in Amendment No.

1) by 75 basis points to ABR plus a margin of 2.75 % from the previous rate of ABR plus a margin of 3.50 %.

The remaining terms of the 2024 Term Loan B Facility and 2024 Revolving Credit Facility were substantially unchanged.

As of December 31, 2024, the contractual interest rate related to the Term Loan B Facility was 8.11 %.

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

restricted payments.

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

As of December 31, 2023, the Company was in compliance with its debt covenants.

In addition to having to pay contractual interest on the 2024 Term Loan B Facility, the Company is also required to pay certain other fees, primarily to the lenders under the 2024 Revolving Credit Facility, in order to maintain their revolving facility commitments.

The covenants of the 2024 Credit Agreement include customary negative covenants that, among other things, restrict the Company’s ability to incur additional indebtedness, grant liens and make certain acquisitions, investments, asset dispositions and restricted payments.

In addition, the 2024 Credit Agreement contains a springing financial covenant that is tested on the last day of any fiscal quarter only if utilization of the 2024 Revolving Credit Facility exceeds 35 % of the total revolving commitments, whereby the Company is required to maintain a First Lien Net Leverage Ratio below 3.25 to 1.00.

As of December 31, 2024, no amounts were outstanding under the 2024 Revolving Credit Facility and the Company was in compliance with its debt covenants.

At December 31, 2024, amounts available under the 2024 Revolving Credit Facility were $ 169.8 million, net of letters of credit outstanding in the amount of $ 5.2 million.

The 2024 Credit Agreement includes customary events of default, and customary rights and remedies upon the occurrence of any event of default thereunder, including rights to accelerate the loans, terminate the commitments thereunder and realize upon the collateral securing the obligations under the 2024 Credit Agreement.

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

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

The 2024 Credit Agreement calls for customary scheduled loan amortization payments of 0.25 % of the initial principal balance, which at the time of Amendment No.

1 was $ 364.1 million, payable quarterly (i.e.

1 % in aggregate per year) as well as a provision that requires the Company to prepay the 2024 Term Loan B Facility based on an annual calculation of free cash flow ("Excess Cash Flow") as defined by the 2024 Credit Agreement.

The Company was not required to make any such mandatory prepayment required by the Excess Cash Flow provision for the period ended December 31, 2024.

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

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

Pursuant to the terms of the Incremental Agreement, the Company’s existing revolving credit facility under the Credit Agreement was increased by $ 12.5 million (the "Incremental Revolver"), and the letter of credit sublimit under the Credit Agreement was increased by $ 5.0 million.

The Incremental Revolver bears the same interest rate as the existing revolving credit facility and has the same maturity date as the existing revolving credit facility.

No other terms of the Credit Agreement were amended.

As a result, amounts available under the Revolving Credit Facility were $ 65.0 million.

At December 31, 2023, amounts available under the Revolving Credit Facility were $ 59.7 million, net of letters of credit outstanding in the amount of $ 5.3 million.

The following table summarizes the amount outstanding under the Term Loan B Facility as of December 31, 2023 and 2022:

The following table summarizes the amount outstanding under the Company's 2024 Term Loan B Facility and 2021 Term Loan B Facility as of December 31, 2024 and 2023:

December 31, 2024 December 31, 2023

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Term Loan B Facility*

Unamortized debt discounts ( 6,594 ) ( 8,158 )

$ 363,177 $ 351,000

Unamortized debt discount

( 6,198 ) ( 6,594 )

Unamortized debt issuance costs ( 6,877 ) ( 10,289 )

Debt, net of debt discounts and issuance costs $ 334,117 $ 333,712

The Company incurred debt issuance costs of $ 27.7 million in April 2021, of which $ 10.8 million were associated with debt discount netted against the proceeds and $ 16.9 million were associated with other deferred financing costs associated with the Term Loan B Facility.

Debt outstanding under the Term Loan B Facility are presented net of issuance costs on the Company's consolidated balance sheets.

The debt issuance costs are amortized on an effective interest basis over the term of the Term Loan B Facility and are included in interest expense and amortization of debt discount in the accompanying consolidated statements of operations.

The following table sets forth interest expense related to the Term Loan B Facility for the years ended December 31, 2023, 2022, and 2021:

Debt, net of debt discount and debt issuance costs

$ 350,102 $ 334,117

* Term Loan B Facility as of December 31, 2024 and December 31, 2023 reflect the balances under the 2024 Term Loan B Facility and the 2021 Term Loan B Facility, respectively.

February 6, 2024 Debt Refinance

As part of the debt refinance on February 6, 2024, where lenders under the 2021 Credit Agreement continued to be lenders under the 2024 Credit Agreement, certain of their loans and revolving facility commitments were deemed to have been modified

("Modified Loans" and "Modified Commitments," respectively).

The Company continued to defer debt discount costs of $ 3.7 million and debt issuance costs of $ 5.7 million from Modified Loans over the term of the new 2024 Term Loan B Facility.

The Company continued to defer financing costs as of February 6, 2024 of an immaterial amount from Modified Commitments over the term of the new 2024 Revolver Facility.

For lenders of the 2021 Credit Agreement that did not continue to participate in the 2024 Credit Agreement, their pro-rata portion of the unamortized debt discount of $ 2.8 million, unamortized debt issuance costs of $ 4.3 million, and an immaterial amount of unamortized deferred financing costs were deemed to be extinguished.

The resulting loss on extinguishment of debt of $ 7.4 million is included in other (income) expense in the Company's consolidated statement of operations for the year ended December 31, 2024.

The Company paid $ 7.7 million in third-party fees related to the closing of the 2024 Credit Agreement.

Third-party fees attributed to new lenders of $ 2.4 million were capitalized as part of the debt issuance costs and will be amortized over the term of the 2024 Term Loan B Facility while third-party fees attributed to Modified Loans of $ 3.1 million were included in general and administrative expenses in the Company's consolidated statement of operations for the year ended December 31, 2024.

In addition, third-party fees of $ 2.1 million attributed to new revolving lenders and Modified Commitments were capitalized as part of deferred financing costs and will be amortized over the term of the 2024 Revolving Facility.

The Company also capitalized additional debt discount costs of $ 3.7 million associated with the closing of the 2024 Term Loan B Facility, which will be amortized over the term of the 2024 Term Loan B Facility.

September 18, 2024 Debt Repricing

The Company analyzed the changes of Amendment No.

1 on a lender-by-lender basis and determined that the transaction would primarily be accounted for as a modification, with a portion of it accounted for as debt extinguishment and new debt issuance.

As a result, the Company recognized an immaterial loss on extinguishment related to unamortized debt discount and unamortized debt issuance costs related to the portion of the 2024 Term Loan B Facility that was extinguished.

The Company paid $ 1.0 million in third-party fees related to Amendment No.

1 of which an immaterial amount was capitalized as debt issuance costs and $ 1.0 million was included in general and administrative expenses in the Company's consolidated statement of operations for the year ended December 31, 2024.

As part of Amendment No.

1, most lenders decided to roll their loan balances over from the original 2024 Term Loan B Facility to the amended 2024 Term Loan B Facility, while some decided to cash out and reassign their loan balances.

On September 18, 2024, $ 312.0 million of the 2024 Term Loan B Facility principal balance was rolled over as part of non-cash financing activities while $ 52.1 million of the 2024 Term Loan B Facility principal balance was repaid and then reissued.

The following table sets forth interest expense related to the 2024 Term Loan B Facility and 2021 Term Loan B Facility for the years ended December 31, 2024, 2023, and 2022 (in thousands, except interest rates):

December 31, 2024

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Effective interest rate 10.35 % 11.40 % 7.95 %

Amortization expense for the Term Loan B Facility debt discount and debt issuance costs for fiscal years 2024 through 2028 is as follows (in thousands):

Amortization expense for the Term Loan B Facility debt discount and debt issuance costs for fiscal years 2025 through 2029 and thereafter is as follows (in thousands):

Fiscal Year Debt Discount Debt Issuance Costs

3 unchanged sentences

2028 1,011 1,122

2029 1,001 1,111

Total $ 6,198 $ 6,877

Interest expense consists primarily of contractual interest expense and amortization of debt discount and issuance costs related to the Company's 2024 Term Loan B Facility, 2021 Term Loan B Facility, Convertible Senior Notes, and 2024 Revolving Facility.

Interest income primarily consists of interest earned on the Company's cash equivalents.

The following includes interest expense and interest income, as presented within interest expense, net in the consolidated statement of operations:

December 31, 2024

December 31, 2023 December 31, 2022

(in thousands)

Interest expense

$ 40,430 $ 43,461 $ 32,179

Interest income

( 13,398 ) ( 11,092 ) ( 2,919 )

Interest expense, net

$ 27,032 $ 32,369 $ 29,260

Note 18— Stockholders' Equity

In December 2021, the Board of Directors approved a repurchase program (the "2021 Repurchase Plan"), under which the Company was authorized to purchase up to $ 50.0 million of its common stock over the twelve month period commencing December 10, 2021.

In November 2022, the Board of Directors approved an extension of the 2021 Repurchase Plan through December 15, 2023.

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

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

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

securities laws.

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

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

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

On February 1, 2024, the Board of Directors approved a share repurchase program (the "February 2024 Repurchase Plan") under which the Company is authorized to repurchase common stock or Convertible Senior Notes, with an aggregate market value of up to $ 125.0 million, through February 1, 2026.

Under the February 2024 Repurchase Plan, 1,160,496 shares were purchased in open market purchases through December 31, 2024 for a total of approximately $ 14.6 million at an average of $ 12.56 per share.

The average price paid per share purchased under the Program includes broker commission costs.

As of December 31, 2024, $ 110.4 million remains available under the February 2024 Repurchase Plan.

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

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Note 20— Subsequent Events

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

In January 2025, the Company granted 3,726,086 restricted stock units, 346,287 performance stock units, and 81,374 stock options to the Company's employees.

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

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

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

The PSUs will vest on the three-year anniversary of the grant date based on certain stock price performance metrics to be measured on December 31, 2025, December 31, 2026 and December 31, 2027.

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

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

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

securities laws.

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

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

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

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

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

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

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

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

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

What changed 10-K

Item 8. Financial Statements and Supplementary Data