What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2026-02-25 compared with 2025-02-26 · 522 added, 409 removed, 871 unchanged (52% of the section changed)

28 unchanged sentences

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

Critical Audit Matter

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

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

Critical Audit Matters

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

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

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

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

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

We identified revenue as a critical audit matter because the Company’s systems to process and record revenue are highly automated and involve complex logic supporting the recognition of revenue.

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

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

Income Taxes — Valuation Allowance Release– Refer to Notes 2 and 17 to the financial statements

Critical Audit Matter Description

The Company is subject to income taxes in the U.S.

(federal and state) and numerous foreign jurisdictions.

Deferred income tax assets and liabilities are determined based upon the net tax effects of the differences between the Company’s consolidated financial statement carrying amounts and the tax bases of assets and liabilities and are measured using the enacted tax rate expected to apply to taxable income in the years in which differences are expected to be reversed.

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

Future realization of deferred tax assets depends on the existence of sufficient taxable income of the appropriate character.

Sources of taxable income include future reversals of deferred tax assets and liabilities, expected future taxable income, taxable income in prior carryback years if permitted under the tax law, and tax planning strategies.

As of December 31, 2025, management concluded that it is more likely than not that sufficient taxable income will be generated in the future to realize the Company’s U.S.

federal and the majority of the Company’s U.S.

state net deferred income tax assets.

We identified management’s determination that it is more likely than not that sufficient taxable income will be generated in the future to realize these deferred tax assets as a critical audit matter because of the significant judgments management makes related to determining whether it is appropriate to consider expected future taxable income as a source of taxable income.

This required a high degree of auditor judgment and an increased extent of effort, including the need to involve our income tax specialists, when performing audit procedures to evaluate the reasonableness of management’s judgments.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the release of the valuation allowance included the following, among others:

• We tested internal controls over management's determination of whether it is more likely than not that the deferred tax assets will be realized.

• With the assistance of our income tax specialists, we evaluated the reasonableness of the methods, assumptions, and judgments used by management to determine whether a valuation allowance was necessary.

• We evaluated management’s ability to accurately estimate future taxable income by comparing actual results to management’s historical estimates and evaluating whether there have been any changes that would affect management’s ability to continue accurately estimating taxable income.

• We tested the reasonableness of management’s estimates of future taxable income by comparing the estimates to:

◦ Internal budgets.

◦ Historical taxable income, as adjusted for nonrecurring items.

◦ Internal communications to management and the Board of Directors.

◦ Forecasted information included in Company press releases as well as in analyst and industry reports for the Company and certain of its peer companies.

• We evaluated whether the estimates of future taxable income were consistent with evidence obtained in other areas of the audit.

/s/ Deloitte & Touche LLP

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20,163 16,086

Debt, current 3,641 3,600

Debt, current, net of debt issuance costs

208,447 3,641

Other current liabilities 5,462 9,880

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1,841,736 1,495,984

Debt, non-current, net of debt issuance costs 550,104 532,986

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

347,665 550,104

Lease liabilities, non-current 50,085 38,983

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Provision (benefit) for income taxes

( 73,986 ) 3,698 1,637

Net income (loss) $ 144,613 $ 22,786 $ ( 159,184 )

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

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

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 )

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— — 74,629 — — — — 74,629

Other comprehensive loss

Other comprehensive income

— — — 1,075 — — — 1,075

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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 — — — — — — —

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( 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 )

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Issuance of common stock related to employee stock purchase plan 310 — 3,941 — — — — 3,941

Issuance of common stock related to RSU vesting

Issuance of common stock related to RSU and PSU vesting

5,931 — — — — — — —

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Stock-based compensation — — 78,751 — — — — 78,751

Other comprehensive loss

Other comprehensive income

— — — 2,970 — — — 2,970

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Stock-based compensation 76,648 76,519 72,617

Impairment of intangible assets — — 3,320

(Gain) loss on extinguishment of debt

2,152 7,706 ( 26,480 )

Provision for (recovery of) doubtful accounts

Provision for doubtful accounts

1,145 587 4,666

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Other items, net 124 23 3,007

Changes in operating assets and liabilities, net of effect of business acquisitions:

Changes in operating assets and liabilities:

Accounts receivable ( 103,761 ) ( 26,024 ) ( 220,102 )

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Capitalized internal use software development costs ( 13,768 ) ( 14,260 ) ( 10,619 )

Other investing activities

Mergers and acquisitions, net of indemnification claims holdback

( 8,100 ) — —

Other investing activities

( 362 ) ( 432 ) —

Net cash used in investing activities

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FINANCING ACTIVITIES:

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 ) — —

Proceeds from the term loan facility refinancing and repricing activities, net of debt discount

92,622 413,463 —

Repayment of the term loan facility from refinancing and repricing activities

( 92,622 ) ( 403,113 ) —

Payment for debt issuance costs ( 159 ) ( 4,547 ) —

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Repayment of finance leases

— ( 276 ) ( 807 )

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

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( 75,084 ) ( 28,904 ) ( 177,842 )

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

CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH 157,001 ( 283 ) 95,809

CASH, CASH EQUIVALENTS AND RESTRICTED CASH — Beginning of period 326,219 326,502 230,693

CASH, CASH EQUIVALENTS AND RESTRICTED CASH — End of period $ 483,220 $ 326,219 $ 326,502

EFFECT OF EXCHANGE RATE CHANGES ON CASH, AND CASH EQUIVALENTS

1,823 ( 1,794 ) 575

CHANGE IN CASH AND CASH EQUIVALENTS

70,142 157,001 ( 283 )

CASH AND CASH EQUIVALENTS — Beginning of period

483,220 326,219 326,502

CASH AND CASH EQUIVALENTS — End of period

$ 553,362 $ 483,220 $ 326,219

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

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December 31, 2025 December 31, 2024 December 31, 2023

RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH TO CONSOLIDATED BALANCE SHEETS:

Cash and cash equivalents $ 483,220 $ 326,219 $ 326,254

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

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

SUPPLEMENTAL DISCLOSURES OF OTHER CASH FLOW INFORMATION:

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Operating lease right-of-use assets obtained in exchange for operating lease liabilities $ 37,606 $ 13,628 $ 4,017

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

Operating lease right-of-use assets reduction and corresponding non-cash adjustment to operating lease liabilities

$ 2,178 $ 4,622 $ —

Purchase consideration - indemnification claims holdback $ 2,000 $ — $ —

Non-cash financing activity related to Amendment No.

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

Non-cash financing activity related to Amendment Nos.

1 and 2 to the 2024 Credit Agreement

$ 270,555 $ 311,974 $ —

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

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Magnite, Inc.

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

("Magnite" or the "Company") was formed in Delaware and began operations on April 20, 2007.

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

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

The Company's platform features applications and services for sellers of digital advertising inventory, or publishers, that own or operate websites, applications, CTV channels, and other digital media properties, to manage and monetize their inventory;

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

The Company's platform features applications and services for sellers of digital advertising inventory, or publishers, that own and operate CTV channels, applications, websites, and other digital media properties, to manage and monetize their inventory;

applications and services for buyers, including advertisers, agencies, agency trading desks, and demand side platforms, to buy digital advertising inventory;

and a transparent, independent marketplace that brings buyers and sellers together and facilitates intelligent decision making and automated transaction execution at scale.

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

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

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.

At the same time, buyers leverage the Company’s platform to reach their target audiences across thousands of sellers.

Note 2— Organization and Summary of Significant Accounting Policies

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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’s chief operating decision maker ("CODM") 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.

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

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

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

The CODM 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 ) .

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

Use of Estimates

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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.

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

Personnel costs included in cost of revenue include salaries, bonuses, and stock-based compensation, and are primarily attributable to personnel in the Company's network operations group who support the Company's platform.

The Company capitalizes costs associated with software that is developed or obtained for internal use and amortizes the costs associated with its revenue-producing platform in cost of revenue over their estimated useful lives.

Personnel costs included in cost of revenue include salaries, bonuses, and stock-based compensation, and are primarily attributable to personnel in the Company's network operations

group who support the Company's platform.

The Company capitalizes costs associated with software that is developed or obtained for internal use and amortize the costs associated with its revenue-producing platform in cost of revenue over their estimated useful lives.

The Company amortizes acquired developed technologies over their estimated useful lives.

Sales and Marketing.

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 marketing expenses primarily consist 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.

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Technology and Development.

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.

The Company's technology and development expenses primarily consist 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.

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General and Administrative.

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.

The Company's general and administrative expenses primarily consist 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 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.

The Company's merger, acquisition, and restructuring costs primarily consist 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 .

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Deferred income tax assets and liabilities are determined based upon the net tax effects of the differences between the Company’s consolidated financial statement carrying amounts and the tax basis of assets and liabilities and are measured using the enacted tax rate expected to apply to taxable income in the years in which the differences are expected to be reversed.

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

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

The Company assesses the realizability of deferred tax assets on a jurisdictional basis and considers all available positive and negative evidence, including cumulative results of operations, projections of future taxable income, the reversal of taxable temporary differences, tax planning strategies, and the carryforward periods of existing tax attributes.

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

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

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

For periods in which the Company reports net

loss, diluted net loss per share is the same as basic net loss per share because the effects of potentially dilutive securities would be anti-dilutive.

Comprehensive Income (Loss)

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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

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

Accounts Receivable Allowance for Doubtful Accounts

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Internal use software development costs are amortized using a straight-line method over the estimated useful life, which is generally three years , commencing when the software is ready for its intended use.

The straight-line recognition method approximates the manner in which the expected benefit will be derived.

The straight-line recognition method approximates the manner in which the expected benefit

will be derived.

On an ongoing basis, the Company assesses the remaining estimated useful lives of internal use software projects.

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The Company’s intangible assets are being amortized over their estimated useful lives as follows:

Developed technology 5

Developed technology 3 to 5

In-process research and development 3 to 5

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The carrying amounts of the Company's cash equivalents, accounts receivable, accounts payable, accrued expenses, and seller payables approximate fair value due to the short-term nature of these instruments.

Certain assets of the Company are recorded at their fair value, using the fair value hierarchy, on a recurring basis, and other assets and liabilities, including goodwill and intangible assets are subject to measurement at fair value on a non-recurring basis if they are deemed to be impaired as a result of an impairment review (see Note 5).

Certain assets of the Company are recorded at their fair value, using the fair value hierarchy, on a recurring basis, and other assets and liabilities, including goodwill and

intangible assets are subject to measurement at fair value on a non-recurring basis if they are deemed to be impaired as a result of an impairment review (see Note 5).

Concentration of Risk

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

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

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

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Recently Adopted Accounting Standards

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 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.

In December 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("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.

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.

The Company adopted the standard for the fiscal year ended December 31, 2025 on a prospective basis.

See Note 17 for the required disclosures.

Recent Accounting Pronouncements Not Yet Adopted

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").

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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 is currently evaluating the impact of adopting ASU 2024-03 on its disclosures.

In July 2025, the FASB issued ASU 2025-05, Financial Instruments - Credit Losses (Topic 326) - Measurement of Credit Losses for Accounts Receivable and Contract Assets ("ASU 2025-05"), which provides a practical expedient to measure credit losses on current accounts receivable and current contract assets.

The practical expedient allows companies to assume that current conditions as of the balance sheet date do not change for the remaining life of the asset when measuring credit losses.

ASU 2025-05 is effective for annual periods beginning after December 15, 2025 and for interim periods within those annual reporting periods on a prospective basis.

Early adoption is permitted.

The Company will adopt ASU 2025-05 on January 1, 2026 and does not expect the standard to have a material impact on its financial statements and disclosures.

In September 2025, the FASB issued ASU 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40) - Targeted Improvements to the Accounting for Internal-Use Software ("ASU 2025-06"), which modernizes and simplifies the recognition and disclosure framework for internal-use software costs by changing from a project-stage approach to a more judgment-based approach.

ASU 2025-06 is effective for annual periods beginning after December 15, 2027 and for interim periods within those annual reporting periods on a prospective basis.

Early adoption is permitted.

The Company is currently evaluating the

impact of adopting ASU 2025-06 on its financial statements and 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 and Diluted Net Income (Loss) Per Share:

Basic Net Income (Loss) Per Share:

Net income (loss) $ 144,613 $ 22,786 $ ( 159,184 )

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Basic net income (loss) per share $ 1.01 $ 0.16 $ ( 1.17 )

Diluted Income (Loss) Per Share:

Diluted Net Income (Loss) Per Share:

Net income (loss) $ 144,613 $ 22,786 $ ( 159,184 )

Interest expense, Convertible Notes, net of tax $ 1,260 $ — $ —

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

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Dilutive effect of weighted-average ESPP shares 36 42 —

Dilutive effect of weighted-average Convertible Notes 3,210 — —

Weighted-average shares used to compute diluted net income (loss) per share 153,770 146,810 136,620

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As of December 31, 2025, the performance stock units granted during 2021, 2024, and 2025 had expected achievement levels of 0 %, 150 %, and 80 %, respectively.

The performance stock units granted during 2022 vested on February 1, 2025 with an actual achievement of approximately 125 %.

The performance stock units granted during 2023 had an actual achievement level of approximately 126 % as of December 31, 2025.

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

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

Refer to Note 16 for additional information related to performance stock units.

For the year ended December 31, 2025, the shares issuable assuming conversion of the Convertible Senior Notes (as defined in Note 12) were included in the calculation of diluted net income per share because they were dilutive.

For the years ended December 31, 2024 and 2023, the shares issuable assuming conversion were excluded from the calculation of diluted net income (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.

Note 4— Revenues

Note 4— Revenue

For the majority of transactions on the Company's platform, the Company reports revenue on a net basis as it does not act as the principal in the purchase and sale of digital advertising inventory because it does not have control of the digital advertising inventory and does not set prices agreed upon within the auction marketplace.

24 unchanged sentences

The Company's accounts receivable are recorded at the amount of gross billings to buyers, net of allowances for the amounts the Company is responsible to collect.

The Company's accounts payable related to amounts due to sellers are recorded at the net amount payable to sellers (see Note 10).

The Company's accounts payable related to amounts due to sellers are recorded at the net amount payable to sellers (refer to Note 10).

Accordingly, both accounts receivable and accounts payable appear large in relation to revenue reported on a net basis.

Accounts receivable are recorded at the invoiced amount, are unsecured, and do not bear interest.

The allowance for doubtful accounts is reviewed quarterly, requires judgment, and is based on the best estimate of the amount of probable credit losses in existing accounts receivable.

The allowance for doubtful accounts is reviewed quarterly, requires judgment, and is based on the best estimate of the amount of expected credit losses in existing accounts receivable.

The Company reviews the status of the then-outstanding accounts receivable on a customer-by-customer basis, taking into consideration the aging schedule of receivables, its historical collection experience, current information regarding the client, subsequent collection history, and other relevant data, in establishing the allowance for doubtful accounts.

16 unchanged sentences

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, 2025, the increase in the provision for expected credit losses associated with accounts receivable of $ 2.4 million was partially offset by increases of contra seller payables related to recoveries of uncollected buyer receivables of $ 1.3 million, which resulted in $ 1.1 million of bad debt expense.

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.

1 unchanged sentence

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 immaterial amount of bad debt recoveries.

Note 5— Fair Value Measurements

31 unchanged sentences

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, 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.

At December 31, 2025 and 2024, the Company had debt outstanding under its Convertible Senior Notes and loans under its 2024 Term Loan B Facility (as defined in Note 12) included in its balance sheets.

The estimated fair value of the Company's Convertible Senior Notes was $ 199.2 million and $ 190.2 million, as of December 31, 2025 and 2024, 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, 2025 and 2024 and is classified as Level 2 in the fair value hierarchy.

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.

At December 31, 2025 and 2024, the estimated fair value of the Company's 2024 Term Loan B Facility was $ 360.0 million and $ 368.2 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.

There were no transfers between Level 1 and Level 2 fair value measurements during the years ended December 31, 2024 and 2023.

Note 6— Property and Equipment

8 unchanged sentences

Accumulated depreciation ( 124,080 ) ( 122,610 )

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

Property and equipment, net

$ 108,546 $ 68,730

Depreciation expense related to property and equipment totaled $ 24.8 million, $ 16.4 million, and $ 24.0 million for the years ended December 31, 2025, 2024, and 2023, 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:

14 unchanged sentences

Based on the Company’s internal use software development costs at December 31, 2025, excluding projects that are not ready for their intended use with a value of $ 8.8 million, estimated amortization expense of $ 10.9 million, $ 6.7 million, and $ 2.3 million is expected to be recognized in 2026, 2027, and 2028, respectively.

Note 8— Goodwill and Intangible Assets

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.

Note 8— Business Combinations

2025 Acquisition—Streamrai, Inc.

In September 2025, the Company completed the acquisition of the business of Streamrai, Inc.

("Streamr.ai" and such acquisition the "Streamr.ai Acquisition"), a platform that specializes in artificial intelligence tools that make CTV advertising accessible to small and medium-sized businesses ("SMBs").

The total purchase consideration was $ 10.1 million, of which $ 8.1 million was paid in cash and $ 2.0 million was held back to cover possible indemnification claims that will be partially released one year after the acquisition, with the remainder released by March 2027.

In accordance with the accounting for business combinations, 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.

The allocation of purchase consideration resulted in an estimated $ 5.0 million of developed technology intangible assets with an estimated useful life

of 3 years, $ 0.7 million of non-compete intangible assets with an estimated useful life of 2 to 3 years, $ 0.1 million of customer relationships with an estimated useful life of 0.5 years, $ 0.2 million of trademark and trade name intangible assets with an estimated useful life of 3 years, goodwill of $ 5.7 million, which is attributable to the workforce of Streamr.ai and revenue synergies from the acquisition, and deferred tax liability of $ 1.5 million.

The purchase price allocation is preliminary and subject to change pending finalization of any contingent matters.

For tax purposes, the acquisition of Streamr.ai will be treated as a stock acquisition.

The goodwill recognized in the acquisition of Streamr.ai is not tax deductible for tax purposes.

Note 9— Intangible Assets and Goodwill

The Company’s intangible assets as of December 31, 2025 and 2024 included the following:

5 unchanged sentences

Customer relationships

37,300 37,300

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

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Amortization of intangible assets for the years ended December 31, 2025, 2024, and 2023 was $ 15.1 million, $ 30.1 million, and $ 202.5 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.

For the year ended December 31, 2025, the Company wrote off fully amortized intangible assets with a historical cost of $ 39.8 million.

The estimated remaining amortization expense associated with the Company's intangible assets was as follows as of December 31, 2025:

1 unchanged sentence

(in thousands)

2025 $ 14,488

Thereafter 359

Total $ 12,445

Note 9— Business Combinations

2022 Acquisition—Carbon

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

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

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

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.

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

The acquisition of identified intangibles results in tax deductible amortization pursuant to IRC Section 197.

Acquisition related costs associated with the Carbon Acquisition included in merger, acquisition, and restructuring costs in the Company's consolidated statements of operations during the year ended December 31, 2022 were immaterial.

In addition, Carbon's post-acquisition revenue and operating results on a standalone basis were immaterial.

Changes to the Company's goodwill were as follows (in thousands):

Ending balance at December 31, 2023

Ending balance at December 31, 2024

Additions for the Streamr.ai Acquisition

Ending balance at December 31, 2025

The Company's qualitative assessment for impairment in the fourth quarter of 2025 did not indicate that it is more likely than not that the fair value of its goodwill is less than the aggregate carrying amount.

Note 10— Accounts Payable and Accrued Expenses

5 unchanged sentences

Accrued employee-related payables 19,524 17,698

Accrued holdback - indemnification claims 1,000 —

Total $ 1,607,664 $ 1,466,377

Note 11— Leases

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

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 4.2 years and 4.6 years as of December 31, 2025 and December 31, 2024, respectively.

As of December 31, 2025 and December 31, 2024, a weighted average discount rate of 6.03 % and 6.12 %, respectively, has been applied to the remaining lease payments to calculate the lease liabilities included within the consolidated balance sheets.

Operating lease expense was $ 22.9 million, $ 21.2 million and $ 24.5 million for the years ended December 31, 2025, 2024 and 2023, 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 $ 4.4 million, $ 1.6 million, and $ 3.8 million for the years ended December 31, 2025, 2024 and 2023, 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, 2025 (in thousands):

2026 $ 23,385

Thereafter 3,718

Total lease payments (undiscounted) 79,267

imputed interest ( 9,019 )

Lease liabilities—total (discounted) $ 70,248

Cash paid for amounts included in lease liabilities was $ 23.0 million, $ 24.1 million, and $ 26.6 million for the years ended December 31, 2025, 2024, and 2023, respectively.

The Company also received rental income of $ 1.1 million, $ 5.0 million, and $ 5.3 million for real estate leases for which it subleased the property to a third party during the years ended December 31, 2025, 2024, and 2023, 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, 2025;

therefore, the leases were not included in the lease liabilities and ROU assets balance as of December 31, 2025.

The Company has future commitments totaling $ 46.3 million over a weighted average term of 7.3 years related to these agreements, of which $ 32.8 million relate to one lease that will commence in 2030 over 8.2 years.

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

December 31, 2025 December 31, 2024

(in thousands)

United States

$ 59,634 $ 45,178

International

$ 66,611 $ 50,329

Note 12— Debt

Current and long term debt as of December 31, 2025 and 2024 consisted of the following:

December 31, 2025

December 31, 2024

(in thousands)

Convertible Senior Notes $ 205,067 $ 205,067

Unamortized debt issuance costs

( 252 ) ( 1,424 )

Net carrying value of Convertible Senior Notes

204,815 203,643

2024 Term Loan B Facility

360,454 363,177

Unamortized debt discount and issuance costs

( 9,157 ) ( 13,075 )

Net carrying value of 2024 Term Loan B Facility

351,297 350,102

Balance Sheet Presentation:

Debt, current, net of debt issuance costs

208,447 3,641

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

347,665 550,104

$ 556,112 $ 553,745

Maturities of the principal amount of the Company's debt were as follows as of December 31, 2025 (in thousands):

2026 $ 208,699

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 $ 3.1 million, $ 3.6 million, and $ 5.8 million for the years ended December 31, 2025, 2024, and 2023, respectively.

Convertible Senior Notes and Capped Call Transactions

In March 2021, the Company issued $ 400.0 million aggregate principal amount of 0.25 % convertible senior notes in a private placement, including $ 50.0 million aggregate principal amount of such notes pursuant to the exercise in full of the over-allotment options of the initial purchasers (collectively, the "Convertible Senior Notes").

The Convertible Senior Notes will mature on March 15, 2026, unless earlier repurchased, redeemed or converted.

The Company plans to repay the outstanding balance upon maturity with its cash and cash equivalents balance.

The Convertible Senior Notes are senior, unsecured obligations and are (i) equal in right of payment with the existing and future senior, unsecured indebtedness;

(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 Loan Agreement or the new Credit Agreement (see section below);

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

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

The Convertible Senior Notes will mature on March 15, 2026 unless they are redeemed, repurchased or converted prior to such date.

The Convertible Senior Notes are convertible at the option of holders only during certain periods and upon satisfaction of certain conditions.

Holders have the right to convert their notes (or any portion of a note in an authorized denomination), in the following circumstances:

(i) during any calendar quarter commencing after the calendar quarter ending on June 30, 2021, if the last reported sale price per share of the Company’s common stock exceeds 130 % of the conversion price for each of at least 20 trading days during the 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter;

(ii) during the five consecutive business days immediately after any ten consecutive trading day period (such ten consecutive trading day period, the "measurement period") in which the trading price per $1,000 principal amount of notes for each trading day of the measurement period was less than 98 % of the product of the last reported sale price per share of the Company’s common stock on such trading day and the conversion rate on such trading day;

(iii) upon the occurrence of certain corporate events or distributions on the Company’s common stock;

(iv) if the Company calls such Convertible Senior Notes for redemption;

and (v) on or after September 15, 2025, until the close of business on the second scheduled trading day immediately before the maturity date, holders of the Convertible Senior Notes may, at their option, convert all or a portion of their Convertible Senior Notes regardless of the foregoing conditions at any time from, and including, September 15, 2025 until the close of business on the second scheduled trading day immediately before the maturity date.

Upon conversion, the Convertible Senior Notes may be settled in shares of the Company’s common stock, cash or a combination of cash and shares of the Company’s common stock, at the Company’s election.

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.

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

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

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

If the Company elects to redeem less than all of the outstanding notes, then the redemption will not constitute a make-whole fundamental change with respect to the notes not called for redemption, and holders of the notes not called for redemption will not be entitled to an increased conversion rate for such notes as described above on account of the redemption, except to the limited extent described further below.

No sinking fund is provided for the Convertible Senior Notes, which means that the Company is not required to redeem or retire the Convertible Senior Notes periodically.

If a fundamental change occurs, then each noteholder will have the right to require the Company to repurchase its notes (or any portion thereof in an authorized denomination) for cash on a date (the "fundamental change repurchase date") of the Company’s choosing, which must be a business day that is no more than 45 , nor less than 20 , business days after the date the Company distributes the related fundamental change notice.

If an event of default, other than a reporting default remedied by special interest as defined in the indenture agreement, occurs with respect to the Company or any guarantor, then the principal amount of, and all accrued and unpaid interest on, all of the notes then outstanding will immediately become due and payable without any further action or notice by any person.

If an event of default (other than a reporting event of default described above with respect to the Company or any guarantor and not solely with respect to a significant subsidiary of the Company’s or a guarantor, other than the Company or such guarantor) occurs and is continuing, then, the trustee, by notice to the Company, or noteholders of at least 25 % of the aggregate principal amount of notes then outstanding, by written notice to the Company and the trustee, may declare the principal amount of, and all accrued and unpaid interest on, all of the notes then outstanding to become due and payable immediately.

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 customary anti-dilution adjustments in certain circumstances.

In connection with the pricing of the Convertible Senior Notes, the Company entered into privately negotiated capped call transactions with various financial institutions (the "Capped Call Transactions").

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 ).

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.

The cost of the Capped Call Transactions is not expected to be tax deductible as the Company did not elect to integrate the capped call into the Convertible Senior Notes for tax purposes.

The cost of the Capped Call Transaction was recorded as a reduction of the Company’s additional paid-in capital in the accompanying consolidated financial statements.

The Company incurred debt issuance costs of $ 11.4 million in March 2021.

The Convertible Senior Notes 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 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 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, 2025, 2024, and 2023 (in thousands, except interest rates):

December 31, 2025 December 31, 2024 December 31, 2023

(in thousands, except interest rates)

Contractual interest expense $ 513 $ 513 $ 797

Amortization of debt issuance costs 1,172 1,173 1,823

Total interest expense $ 1,685 $ 1,686 $ 2,620

Effective interest rate 0.82 % 0.82 % 0.82 %

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 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 the Amended 2021 Credit Agreement and 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, N.A.

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"), which 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 %, and on March 18, 2025, the Company entered into Amendment No.

2 to the 2024 Credit Agreement ("Amendment No.

2"), which reduced the interest rate of the 2024 Term Loan B Facility by an additional 75 basis points to Term SOFR plus a margin of 3.00 %.

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

As of December 31, 2025, the contractual interest rate related to the 2024 Term Loan B Facility was 6.72 %.

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, 2025, no amounts were outstanding under the 2024 Revolving Credit Facility and the Company was in compliance with its debt covenants.

At December 31, 2025, amounts available under the 2024 Revolving Credit Facility were $ 171.0 million, net of letters of credit outstanding in the amount of $ 4.0 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 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.

2 was $ 363.2 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, 2025.

The following table summarizes the amount outstanding under the Company's 2024 Term Loan B Facility as of December 31, 2025 and 2024:

December 31, 2025 December 31, 2024

(in thousands)

2024 Term Loan B Facility

$ 360,454 $ 363,177

Unamortized debt discount

( 4,275 ) ( 6,198 )

Unamortized debt issuance costs ( 4,882 ) ( 6,877 )

2024 Term Loan B Facility, net of debt discount and issuance costs

$ 351,297 $ 350,102

February 6, 2024 Debt Refinance

As part of the debt refinance on February 6, 2024, where lenders under the Amended 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.

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

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.

March 18, 2025 Debt Repricing

The Company analyzed the changes of Amendment No.

2 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 a loss on extinguishment of $ 2.2 million related to $ 1.0 million of unamortized debt discount and $ 1.1 million of unamortized debt issuance costs related to the portion of the 2024 Term Loan B Facility that was extinguished.

The Company incurred $ 1.0 million of third-party debt refinancing expense, which was included in general and administrative expenses in the Company's consolidated statement of operations for the year ended December 31, 2025.

As part of Amendment No.

2, most of the 2024 Term Loan B lenders decided to roll their loan balances over from Amendment No.

1 to Amendment No.

2, while some decided to cash out and reassign their loan balances.

On March 18, 2025, $ 270.6 million of the 2024 Term Loan B principal balance from Amendment No.

1 was rolled over to Amendment No.

2 as part of non-cash financing

activities while $ 92.6 million of the 2024 Term Loan B Facility principal balance from Amendment No.

1 was repaid and then reissued as part of Amendment No.

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, 2025, 2024, and 2023 (in thousands, except interest rates):

December 31, 2025

December 31, 2024 December 31, 2023

(in thousands, except interest rates)

Contractual interest expense $ 27,211 $ 35,139 $ 36,261

Amortization of debt discount 903 1,111 1,564

Amortization of debt issuance costs 1,022 1,299 2,441

Total interest expense $ 29,136 $ 37,549 $ 40,266

Effective interest rate 8.04 % 10.35 % 11.40 %

The estimated remaining amortization expense for the 2024 Term Loan B Facility debt discount and debt issuance costs for fiscal years 2026 through 2030 and thereafter was as follows (in thousands):

Fiscal Year Debt Discount Debt Issuance Costs

2026 $ 856 $ 978

Total $ 4,275 $ 4,882

Total Interest Expense and Interest Income

Interest expense consists primarily of contractual interest expense and amortization of debt discount, debt issuance costs, and deferred financing costs related to the Company's debt facilities under its 2024 Credit Agreement, Amended 2021 Credit Agreement as well as its Convertible Senior Notes.

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 (in thousands):

December 31, 2025

December 31, 2024 December 31, 2023

Interest expense

$ 31,648 $ 40,430 $ 43,461

Interest income

( 12,725 ) ( 13,398 ) ( 11,092 )

Interest expense, net

$ 18,923 $ 27,032 $ 32,369

Note 13— Commitments and Contingencies

The Company has commitments under non-cancelable operating leases for facilities, and its managed data center facilities (refer to Note 11).

As of December 31, 2025 and 2024, the Company had $ 4.0 million and $ 5.2 million, respectively, of letters of credit associated with office leases available for borrowing, on which there were no outstanding borrowings as of either date.

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

As of December 31,

2025, the Company's outstanding non-cancelable contractual obligations with a remaining term in excess of one year consist of the following (in thousands):

2026 $ 122,494

Total $ 204,082

The amounts above include commitments under a cloud-managed services agreement, under which the Company has a non-cancelable commitment from July 2025 to June 2028 containing minimum spend amounts for each twelve-month period (i.e.

July 2025 to June 2026, July 2026 to June 2027, and July 2027 to June 2028) as well as an additional minimum spend amount over the entire three-year term.

The table above approximates the manner in which the Company expects to fulfill the obligation.

Guarantees and Indemnification

The Company’s agreements with sellers, buyers, and other third parties typically obligate the Company to provide indemnity and defense for losses resulting from claims of intellectual property infringement, damages to property or persons, business losses, or other liabilities.

Generally, these indemnity and defense obligations relate to the Company’s own business operations, obligations, and acts or omissions.

However, under some circumstances, the Company agrees to indemnify and defend contract counterparties against losses resulting from their own business operations, obligations, and acts or omissions, or the business operations, obligations, and acts or omissions of third parties.

For example, because the Company’s business interposes the Company between buyers and sellers in various ways, buyers often require the Company to indemnify them against acts and omissions of sellers, and sellers often require the Company to indemnify them against acts and omissions of buyers.

In addition, the Company’s agreements with sellers, buyers, and other third parties typically include provisions limiting the Company’s liability to the counterparty, and the counterparty’s liability to the Company.

These limits sometimes do not apply to certain liabilities, including indemnity obligations.

These indemnity and limitation of liability provisions generally survive termination or expiration of the agreements in which they appear.

The Company has also entered into indemnification agreements with its directors, executive officers, and certain other officers that will require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors, officers, or employees.

No material demands have been made upon the Company to provide indemnification under such agreements and there are no claims that the Company is aware of that could have a material effect on the Company’s consolidated financial statements.

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

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

For example, the Company has recently been subject to class action lawsuits alleging violations of various privacy statutes.

Additionally, on September 16, 2025, the Company filed a lawsuit against Google LLC ("Google") in the U.S.

District Court of the Eastern District of Virginia.

The complaint alleges that Google has engaged in anticompetitive conduct in the ad exchange and ad server markets in violation of federal antitrust laws, including actions that restrict publishers' ability to use competing services and favor Google's own advertising exchange.

Magnite seeks monetary damages, an injunction, structural relief, and reimbursement of reasonable costs and expenses.

Magnite intends to pursue its claims vigorously, but cannot predict the outcome of this matter.

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

Consequently, management is unable to ascertain the ultimate aggregate amount of monetary liability or awards, amounts which may be covered by insurance or recoverable from third parties, or the financial impact with respect to such matters as of December 31, 2025.

However, based on management’s knowledge as of December 31, 2025, management believes that the final resolution of these matters known at such date, individually and in the aggregate, will not have a material adverse effect upon the Company’s consolidated financial position, results of operations or cash flows.

Employment Contracts

The Company has entered into severance agreements with certain employees and officers.

The Company may be required to pay severance and accelerate the vesting of certain equity awards in the event of involuntary terminations.

Note 14— Stockholders' Equity

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, 4.5 million shares were purchased in open market purchases through December 31, 2025 for a total of approximately $ 60.9 million at an average of $ 13.43 per share.

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

As of December 31, 2025, $ 64.1 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.

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

Note 15— Accumulated Other Comprehensive Loss

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Balance at December 31, 2022

Other comprehensive loss ( 1,775 )

Balance at December 31, 2022

Other comprehensive income

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Balance at December 31, 2024

Other comprehensive income

Balance at December 31, 2025

Note 16— Stock-Based Compensation

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

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.

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, 2025, an aggregate of 16,576,998 shares remained available for future grants, assuming target number of PSUs, under the Amended and Restated 2014 Equity Incentive Plan.

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Restricted Stock Units

A summary of restricted stock unit activity for the year ended December 31, 2024 is as follows:

A summary of restricted stock unit ("RSU") activity for the year ended December 31, 2025 is as follows:

Number of Shares Weighted-Average Grant Date Fair Value

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Performance Stock Units

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 Company granted 379,635 performance stock units ("PSU") 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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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 %.

In 2024, 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 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, assuming a performance measurement of 100 %.

At December 31, 2024, the one-year interim performance measurement was 150 %, subject to the remaining vesting criteria and at December 31, 2025, the two-year interim performance measurement was also 150 %, subject to the remaining vesting criteria.

In 2025, the Company granted PSUs with an aggregate target of 346,287 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, 2025, as well as certain interim measurements based on relative TSR for the one-year and two-year periods beginning on January 1, 2025.

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Outstanding at December 31, 2024

Granted 486 $ 11.76

1,427 $ 15.35

Vested and released*

( 108 ) $ 17.28

Outstanding at December 31, 2025

1,687 $ 16.40

* PSUs granted and weighted-average grant date fair value include 22 shares issued above the target shares for PSUs that vested and were released during the year ended December 31, 2025.

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

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Dividend yield — % — % — %

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, 2025 was $ 1.9 million, based on their respective vesting dates.

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

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, 2025, the intrinsic value of unvested performance stock units based on expected achievement levels was $ 26.0 million.

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.

As of December 31, 2025, the Company had unrecognized stock-based compensation expense relating to unvested PSUs of approximately $ 7.1 million, which will be recognized over a weighted-average period of 1.2 years.

Employee Stock Purchase Plan

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For the year ended December 31, 2025, income tax benefit realized related to awards vested or exercised during 2025 was $ 27.3 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.

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, 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.

taxes in the consolidated statements of operations.

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

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 historical acquisitions and restructuring activities.

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

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, Inc.

("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

(in thousands)

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

Loss contracts (facility related) 2,190 —

Exit costs 1,408 —

Impairment of property and equipment, net

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

Impairment costs of abandoned technology (Note 8)

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

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 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.

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

(in thousands)

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

$ 1,327 $ 1,222 $ 2,742

Personnel related and non-cash stock-based compensation

— 3,361 3,231

Loss contracts (facility related)

Impairment of property and equipment, net

Impairment costs of abandoned technology

Cash paid for restructuring costs ( 858 ) ( 4,521 ) ( 2,747 )

Non-cash loss contracts (lease related) — ( 2,190 ) —

Non-cash impairments — ( 506 ) ( 3,320 )

Non-cash stock-based compensation — ( 143 ) ( 2,004 )

Accrued merger, acquisition, and restructuring costs at end of period $ 469 $ 1,327 $ 1,222

Note 17— Income Taxes

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Total provision (benefit) for income taxes $ ( 73,986 ) $ 3,698 $ 1,637

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 Company recorded an income tax benefit of $ 74.0 million for the year ended December 31, 2025 compared to an income tax expense of $ 3.7 million and $ 1.6 million for the years ended December 31, 2024 and 2023, respectively.

The income tax benefit for the year ended December 31, 2025 was primarily the result of the release of the majority of the domestic and certain foreign valuation allowances on the Company's deferred tax assets and the state and foreign income tax liabilities.

The release was supported by sustained profitability and the Company’s cumulative three-year pre-tax income position, inclusive of the impact of permanent book-to-tax differences, as of December 31, 2025, together with forecasts of future taxable income and the expected reversal of taxable temporary differences sufficient to support realization of deferred tax assets.

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 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.

federal statutory rate of 21% for the years ended December 31, 2024, 2023, and 2022:

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

The Company continues to maintain a valuation allowance against certain state and foreign deferred tax assets where it is not more likely than not that such assets will be realized.

Set forth below provides the updated requirements of ASU 2023-09 for 2025 (see Note 2).

The table 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.

federal statutory rate of 21% for the year ended December 31, 2025 (in thousands except for percentages):

Year Ended December 31, 2025

federal statutory income tax rate

$ 14,832 21.0 %

Domestic state and local income taxes, net of federal effect (1)

( 19,677 ) ( 27.9 ) %

Foreign tax effects:

United Kingdom:

Changes in valuation allowance

( 492 ) ( 0.7 ) %

Stock option windfall benefit

( 837 ) ( 1.2 ) %

Other foreign jurisdictions

( 589 ) ( 0.8 ) %

Research and development credits

( 1,889 ) ( 2.7 ) %

Nontaxable and nondeductible items:

Sec 162(m) officers' compensation

Stock-based compensation expense

( 8,867 ) ( 12.6 ) %

Changes in valuation allowances (2)

( 67,036 ) ( 94.9 ) %

Worldwide changes in prior years unrecognized tax expenses 130 0.2 %

Total tax provision (benefit) and effective income tax rate

$ ( 73,986 ) ( 104.8 ) %

(1) We consistently report the effects of the state valuation allowance on the state income tax expense line-item within our effective tax rate.

In 2025, we released $ 22.0 million of our valuation allowance on our U.S.

state deferred tax assets.

State taxes in California, New York, and Virginia made up the majority (greater than 50%) of the tax effect in this category.

See the income taxes paid table below as required under ASU 2023-09.

(2) In 2025, we released our entire valuation allowance of $ 67.0 million on our U.S.

federal deferred tax assets.

This is included on the change in valuation allowance line item.

As previously disclosed for the years ended December 31, 2024 and 2023, prior to the adoption of ASU 2023-09, the table 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.

federal statutory rate of 21%:

December 31, 2024 December 31, 2023

federal statutory income tax rate 21.0 % 21.0 %

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

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Debt issuance and original issue discount

( 2,066 ) ( 3,082 )

Total deferred tax liabilities ( 30,220 ) ( 18,239 )

Net deferred tax liabilities

Net deferred tax assets (liabilities)

$ 76,315 $ ( 410 )

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.

As of December 31, 2025, the net deferred tax asset of $ 76.3 million consists of deferred tax assets of $ 76.7 million and deferred tax liabilities of $ 0.3 million.

As of December 31, 2024, the net deferred tax liabilities of $ 0.4 million consists of deferred tax liabilities of $ 0.7 million and deferred tax assets of $ 0.3 million.

The valuation allowance was decreased by $ 90.1 million and $ 12.6 million for the years ended December 31, 2025 and 2024, respectively, and increased by $ 30.2 million for the year ended December 31, 2023.

The net deferred tax assets balance is presented in other assets, non-current within the Company's consolidated balance sheets and the net deferred tax liabilities balance is presented in other liabilities, non-current within the Company's consolidated balance sheets.

The Company evaluates the realizability of deferred tax assets on a jurisdictional basis at each reporting date and records a valuation allowance when it is more likely than not that some portion or all of a deferred tax asset will not be realized.

In assessing realizability, the Company considers all available positive and negative evidence, including cumulative results of operations, historical and projected taxable income, reversal of taxable temporary differences, and the carryforward periods of existing tax attributes.

During the year ended December 31, 2025, the Company concluded that it is more likely than not that substantially all of its U.S.

federal and certain state deferred tax assets will be realized.

This conclusion was primarily driven by (i) sustained profitability and a cumulative three-year pre-tax income position as of December 31, 2025, (ii) forecasts of future taxable income, and (iii) the expected reversal of taxable temporary differences sufficient to support realization of deferred tax assets.

As a result, the Company released its U.S.

federal, the majority of its state, and certain foreign valuation allowances during 2025.

A valuation allowance continues to be recorded against certain New York state and city net operating losses subject to Section 382 limitations and certain foreign net operating losses where realization is not considered more likely than not.

At December 31, 2025, the Company had U.S.

federal net operating loss carryforwards, or NOLs, of approximately $ 263.9 million, which will begin to expire in 2037.

federal net operating loss carryforwards, or NOLs, of approximately $ 252.6 million.

Approximately $ 103.5 million were generated in tax years beginning before January 1, 2018 and may offset 100% of taxable income, but begin to expire in 2037.

The remaining federal net operating losses were generated in tax years beginning after December 31, 2017, have an indefinite carryforward period, and may offset up to 80% of taxable income in a given year.

At December 31, 2025, the Company had state NOLs of approximately $ 205.3 million, which will begin to expire in 2028.

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At December 31, 2025, the Company had acquired federal research and development tax credit carryforwards of approximately $ 8.1 million which will begin to expire in 2036, and state research and development tax credits of approximately $ 10.1 million, the majority of which carry forward indefinitely.

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

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

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

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

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

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

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 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.

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

Based on current projections of future taxable income, the Company expects to fully utilize its federal net operating losses, federal research and development credits, and the majority of the state net operating losses prior to expiration.

Certain New York state and city net operating losses are subject to Section 382 limitations and are not expected to be fully realized.

Based on current foreign business operations in certain foreign jurisdictions, the Company continues to maintain valuation allowances for losses that are not likely to be realized.

At December 31, 2025, unremitted earnings of the subsidiaries outside of the United States were approximately $ 40.7 million.

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Decreases related to prior year tax positions ( 288 )

Increases related to prior year tax positions 18

Balance as of December 31, 2025

Interest and penalties related to the Company’s unrecognized tax benefits accrued at December 31, 2025, 2024, and 2023 were not material.

Set forth below provides the new requirements of ASU 2023-09 for 2025 (see Note 2).

The following table summarizes the income taxes paid, net of refunds, for the year ended December 31, 2025:

December 31, 2025

(in thousands)

state and local:

New York State

Total income taxes paid

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 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.

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 2023 and forward are open for examination, for Australia and Singapore only 2022 and forward are open for examination, for Brazil, Canada, Germany, Malaysia, and New Zealand only 2021 and forward are open for examination, for Italy only 2020 and forward are open for examination, and for Japan 2019 and forward remain open for examination.

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

Note 15— Leases

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

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 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

Thereafter 7,331

Total lease payments (undiscounted) 62,809

imputed interest ( 7,740 )

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.

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

The Company has commitments under non-cancelable operating leases for facilities, certain equipment, and its managed data center facilities (Note 15).

As of December 31, 2024 and 2023, the Company had $ 5.2 million and $ 5.3 million, respectively, of letters of credit associated with office leases available for borrowing, on which there were no outstanding borrowings as of either date.

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

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

Guarantees and Indemnification

Generally, these indemnity and defense obligations relate to the Company’s own business operations, obligations, and acts or omissions.

These limits sometimes do not apply to certain liabilities, including indemnity obligations.

These indemnity and limitation of liability provisions generally survive termination or expiration of the agreements in which they appear.

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

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

Consequently, management is unable to ascertain the ultimate aggregate amount of monetary liability, amounts which may be covered by insurance or recoverable from third parties, or the financial impact with respect to such matters as of December 31, 2024.

However, based on management’s knowledge as of December 31, 2024, management believes that the final resolution of these matters known at such date, individually and in the aggregate, will not have a material adverse effect upon the Company’s consolidated financial position, results of operations or cash flows.

Employment Contracts

The Company has entered into severance agreements with certain employees and officers.

The Company may be required to pay severance and accelerate the vesting of certain equity awards in the event of involuntary terminations.

Note 17— Debt

Long term debt as of December 31, 2024 and 2023 consisted of the following:

December 31, 2024

On July 4, 2025, the President of the United States signed H.R.

1, commonly referred to as the "One Big Beautiful Bill Act" ("OBBBA") into law.

The legislation includes several changes to federal tax law that generally allow for more favorable deductibility of certain business expenses beginning in 2025, including the restoration of immediate expensing of domestic R&D expenditures, reinstatement of 100% bonus depreciation, and more favorable rules for determining the limitation on business interest expense.

OBBBA also includes certain changes to the U.S.

taxation of foreign activity, including changes to foreign tax credits, Global Intangible Low-Taxed Income, Foreign-Derived Intangible Income, and Base Erosion and Anti-Abuse Tax amongst other changes.

These changes are generally effective for tax years beginning after December 31, 2025.

OBBBA changes effective for 2025 were reflected in the income tax provision for the year ended December 31, 2025.

Based on current projections, the continuing impact will be a deferral of the payment of current income taxes over multiple years;

however, the Company expects the net impact to its effective tax rate for 2026 to be immaterial.

The Company will monitor as additional guidance becomes available.

Note 18— Merger, Acquisition, and Restructuring Costs

The Company incurred $ 0.2 million of merger, acquisition, and restructuring costs for the year ended December 31, 2025 and did not incur any merger, acquisition, and restructuring costs for the year ended December 31, 2024.

During the year ended December 31, 2023, the Company incurred $ 7.5 million of merger, acquisition, and restructuring costs related to 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, Inc.

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

The following table summarizes merger, acquisition, and restructuring cost activity in the year ended December 31, 2023:

December 31, 2023

(in thousands)

Convertible Senior Notes $ 205,067 $ 205,067

Unamortized debt issuance costs

( 1,424 ) ( 2,598 )

Net carrying value of Convertible Senior Notes

203,643 202,469

Term Loan B Facility*

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 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

The Convertible Senior Notes will mature on March 15, 2026, unless earlier repurchased, redeemed or converted.

The total net proceeds from the offering, after deducting debt issuance costs, paid by the Company, were approximately $ 388.6 million.

The Company used approximately $ 39.0 million of the net proceeds from the offering to pay for the Capped Call Transactions (as described below).