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DATE

Wednesday, Nov. 5, 2025, at 4:30 p.m. ET

CALL PARTICIPANTS

  • Chief Executive Officer — Michael G. Barrett
  • Chief Financial Officer — David L. Day
  • President of Revenue — Sean Buckley

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RISKS

  • DVplus Guidance Pressure -- CFO David L. Day said, "we've seen some near-term pressure from a recent feature change by a top DSP partner affecting all SSPs," which is contributing to a "slightly lower growth" outlook for DVplus contribution ex-TAC in the fourth quarter.
  • Vertical Weakness -- The company cited "some additional drop in vertical spend in automotive and some additional weakness in technology and in home and garden" according to David L. Day as contributing to a "slightly softening macro environment."

TAKEAWAYS

  • Total Revenue -- Total revenue was $179 million for Q3 2025, up 11% year over year, with growth supported by CTV and DVplus performance.
  • Contribution ex-TAC -- Contribution ex-TAC (non-GAAP) totaled $167 million for Q3 2025. Contribution ex-TAC (non-GAAP) increased 12% year over year, surpassing the high end of guidance.
  • CTV Contribution ex-TAC -- CTV contribution ex-TAC (non-GAAP) was $76 million for Q3 2025, up 18% year over year (non-GAAP), or 25% excluding political, exceeding the upper end of expectations.
  • DVplus Contribution ex-TAC -- DVplus contribution ex-TAC was $91 million for Q3 2025, up 7% year over year, or 10% excluding political, aligning with the guided range.
  • Adjusted EBITDA -- Adjusted EBITDA totaled $57 million for Q3 2025, increasing 13% year over year, with Adjusted EBITDA margin reaching 34%.
  • Net Income -- CapEx investment increased to $20 million in Q3 2025, up from $5 million a year ago.
  • GAAP Diluted EPS -- Diluted EPS was $0.13 in Q3 2025, compared to $0.04 a year ago; Non-GAAP EPS was $0.02 for Q3 2025, versus $0.17 a year ago.
  • Operating Expenses -- Operating expenses were $154 million for Q3 2025, up from $147 million a year ago, attributed to personnel, cloud, and data center costs.
  • Cash Balance -- Cash balance was $482 million at the end of Q3 2025, up from $426 million at the end of Q2 2025.
  • Operating Cash Flow -- Operating cash flow totaled $39 million for Q3 2025, with capital expenditures were $18 million for Q3 2025.
  • Q4 2025 Guidance: Contribution ex-TAC -- Range of $191 million to $196 million (6%-9% growth in contribution ex-TAC (non-GAAP) expected for Q4 2025, or 13%-16% contribution ex-TAC growth excluding political expected for Q4 2025).
  • Q4 2025 Guidance: CTV Contribution ex-TAC -- Range of $87 million to $89 million (12%-14% growth in CTV contribution ex-TAC expected for Q4 2025, or 23%-25% CTV contribution ex-TAC growth expected for Q4 2025, excluding political).
  • Q4 2025 Guidance: DVplus Contribution ex-TAC -- Range of $104 million to $107 million (2%-5% growth in DVplus contribution ex-TAC expected for Q4 2025, or 7%-10% growth excluding political expected for Q4 2025), reflecting current vertical and DSP challenges.
  • CapEx Guidance -- CapEx for Q4 2025 is expected to be $23 million; Full-year 2025 CapEx is now projected at $80 million, and CapEx for FY2026 is anticipated to be $60 million.
  • Net Leverage -- 0.3x, declining from 0.6x last quarter, with $205 million principal balance of convertible notes maturing in March 2025 to be paid with existing cash.
  • Share Repurchases -- Over 3,300,000 shares have been repurchased or withheld for approximately $50 million year-to-date as of Q3 2025; $88 million remains under authorization.
  • Key Customer Updates -- Continued programmatic expansion with partners such as Netflix, Roku, LG, NBCU, Vizio, Walmart, and Warner Bros. Discovery, and specific mention of Warner Bros.' NEO platform launch.
  • AI Integration and Acquisitions -- Integration of Streamer.ai and planned AI feature enhancements for Clearline were announced, with ITV and Wolt named as Streamer clients.
  • Agency Marketplaces/SPO -- Clearline surpasses 30 clients, with growth in buyer marketplaces and expanded SPO efforts.
  • Product Innovations in Live Sports -- Increasing programmatic adoption highlighted in NFL, college football, MLB, and WNBA, driven by SpringServe and the Live Stream Accelerator product.
  • Commerce Media and Audio -- Commerce media offering momentum and audio was the fastest-growing format on TVplus in Q3 2025, with collaborations announced with Spotify (SACS) and Acast.
  • Legal Developments -- Management filed an independent lawsuit against Google for anticompetitive conduct, and continues to monitor judicial remedies closely, noting each 1% market share shift could drive "$50,000,000 of additional contribution ex-TAC (non-GAAP) on an annualized basis, with flow-through margins exceeding 90%," according to Michael G. Barrett.

SUMMARY

Magnite (MGNI 14.97%) reported CTV-driven growth, operational cash generation, and investments in infrastructure and talent. Management demonstrated clear strategic priorities across AI product development, CTV live sports enablement, and agency marketplace expansion. Near-term DVplus growth guidance was tempered by DSP-driven feature changes and sector-specific ad spend softness, with mitigating actions in place.

  • Magnite's proactive hybrid infrastructure investment is intended to achieve future data capacity while structurally lowering per-unit cloud costs for 2026 and beyond.
  • Customer engagement broadened as Streamer.ai enabled ITV and Wolt to create and activate CTV campaigns with enhanced AI-powered workflows.
  • Management underscored that no publisher share gain from the Google AdTech litigation is currently reflected in guidance, but quantifies material incremental profit opportunity should remedies drive market share shifts.
  • Live sports programmatic inventory growth—especially with Disney and major league partnerships—positions Magnite to benefit from accelerating spend in high-value, addressable video formats.
  • Agency holding companies increased direct engagement through Magnite-powered marketplaces to regain data and pricing leverage, enhancing supply path optimization initiatives for both supply and demand partners.

INDUSTRY GLOSSARY

  • CTV: Connected TV; digital video content delivered via internet-enabled television devices leveraging programmatic ad buying.
  • Contribution ex-TAC: Revenue after deducting traffic acquisition costs (TAC); a measure of net sales to publishers excluding distributor payments.
  • SPO: Supply path optimization; the process of optimizing/directing ad buy routes for efficiency, transparency, and cost savings.
  • SpringServe: Magnite’s CTV ad serving and mediation platform enabling demand and direct ad server integration.
  • Clearline: Magnite’s agency-facing platform facilitating direct discovery, packaging, and activation of differentiated media inventory, including enhanced AI workflow capabilities.
  • NEO Platform: Warner Bros. Discovery’s unified ad technology interface, launched with Magnite powering transactions.
  • DVplus: Magnite’s media solution for display, video, and commerce-focused advertising outside CTV.
  • MCP: Model Context Protocol; an open standard permitting AI agents and large language models to connect to external systems for operational integration.
  • Live Stream Accelerator (LSA): Magnite’s technology solution for optimizing programmatic monetization of live-streamed sports content.

Full Conference Call Transcript

Michael G. Barrett, CEO, and David L. Day, our CFO. I would like to point out that we have posted financial highlights slides on our Investor Relations website to accompany today's presentation. Before we get started, I will remind you that our prepared remarks and answers will include information that may be considered to be forward-looking statements, including, but not limited to, statements concerning our anticipated financial performance and strategic objectives, including the potential impacts of macroeconomic factors on our business. These statements are not guarantees of future performance.

They reflect our current views with respect to future events and are based on assumptions and estimates and subject to known and unknown risks, uncertainties, and other factors that may cause our actual results, performance, or achievements to be materially different from expectations or results projected or implied by forward-looking statements. A discussion of these and other risks, uncertainties, and assumptions is set forth in the company's periodic reports filed with the SEC, including our quarterly reports on Form 10-Q and our 2024 annual report on Form 10-K. We undertake no obligation to update forward-looking statements or relevant risks.

Our commentary today will include non-GAAP financial measures, including contribution ex-TAC or less traffic acquisition costs, adjusted EBITDA, and non-GAAP income per share. Reconciliations for our reported results can be found in our earnings press release and in the financial highlights deck that is posted on our Investor Relations website. At times, in response to your questions, we may offer additional metrics to provide greater insights into the dynamics of our business. Please be advised that this additional detail may be one-time in nature and we may or may not provide an update on the future of these metrics.

I encourage you to visit our Investor Relations website to access our press release, financial highlights deck, periodic SEC reports, and the webcast replay of today's call to learn more about Magnite. I will now turn the call over to Michael. Michael, please go ahead.

Michael G. Barrett: Thank you, Nick. Q3 came in strong and we once again exceeded total top-line expectations, with CTV contribution ex-TAC growing 18% excluding political. DVplus continued to perform well, growing in line with expectations. Adjusted EBITDA was also strong at $57 million, beating expectations resulting in a margin of 34%. Our performance in CTV was driven by growth of our largest publisher partners, significant traction with agency marketplaces, Clearline adoption, positive SMB trends, and programmatic expansion in live sports. Our most significant growth came from the industry's largest players, including LG, NBCU, Netflix, Roku, Vizio, Walmart, and Warner Bros. Discovery. Regarding Netflix, we've supported the expansion of their ads business to all ad-supported markets.

The pacing of the Netflix ramp has gone very well, and we remain excited about our continued growth opportunity with them in 2026. Roku also continues to be a very fast-growing publisher with their Roku exchange, where Magnite is the preferred programmatic partner. This quarter in particular demonstrated especially great momentum; our partnership saw meaningful traction in sports and in attracting SMBs to their platform. We continue to explore areas for further expansion of our relationship to drive more revenue for them. Warner Brothers Discovery has also made great progress with its NEO platform launching in September.

NEO, a new ad platform, will provide buyers direct access to Warner Brothers' entire premium video inventory through one simplified and intuitive user interface where Magnite is helping to power transactions. Clearline continues to gain momentum with over 30 clients, and we recently rolled out a number of key enhancements to the product. Earlier this year, we announced that native home screen units are available through Clearline. This update will enable buyers and curators to discover, package, and activate inventory in one platform with the most comprehensive access to differentiated supply, unique first-party data, and content signals.

Finally, we also announced plans to integrate AI assistance and agentic workflows into Clearline, which will be powered in part by technology from our acquisition of Streamer.ai, which we announced in September. As I've mentioned before, the CTV advertising opportunity for small and medium-sized businesses is enormous, but it's historically been bottlenecked by complexity and high cost. To address this, Streamer.ai gives small businesses the tools to create production-quality CTV commercials in minutes and in an extremely cost-efficient manner. We're licensing Streamer to large media owners, commerce players, agencies, DSPs, and other media buyers.

We've announced two client wins since the acquisition: ITV, which is the UK's largest commercial broadcaster, and Wolt, which is part of DoorDash, with many more to come. We are seeing agencies becoming more active in their programmatic SPO efforts, and it's driving spend now. We have long supported agencies and have dedicated teams in place to support their growth in efforts in this area. As evidence of this acceleration, a significant driver of our growth with agencies is from Magnite-powered buyer marketplaces. These private label marketplaces allow agencies to connect directly with publishers to develop curated pools of inventory that are enriched by proprietary data, are DSP agnostic, and maximize working media spend.

Our combined CTV ad serving and SSP platform, SpringServe, continues to be a significant differentiator for us with publishers. As well as offering a leading ad server in CTV, SpringServe plays a crucial role as the mediation layer for publishers. In addition to supporting traditional DSP to SSP connections, our unique position enables us to provide a direct connection for buyers directly into the ad server. We just added Vyance Direct Access product to our list of direct integrations that include Amazon, APS, Yahoo! Backstage, and Trade Desk's OpenPath. SpringServe also allows publishers to maximize their yield by unifying demand from these direct ad server integrations directly amongst buyers that connect through our SSP.

Live sports continues to drive growth in our and we see tremendous potential in the future as programmatic adoption continues to escalate. We have seen new contributions notably from Disney, of NFL and college football as well as Major League Baseball in the WNBA. Our live stream accelerator product, which was specifically developed for live sports, is currently utilized by numerous partners globally. Leaders in this area are choosing Magnite because of our unique tech and continued commitment to invest in this area. On the DVplus side of the business, Q3 contribution ex-TAC was up 7% or 10% excluding the impact of political last year. Our DVplus business continues to benefit from ramping partners as well as new client wins.

A notable update is that our partnership with Pinterest began to ramp in Q3. In particular, we've been really pleased with the progress of our commerce media offering. As our roster of partners continues to grow. and Connected Media by United Airlines. Commerce entities are attracted to the unique technology Magnite provides. They each have some form of O and O inventory and leverage Magnite DVplus or SpringServe tools for monetizing or ad serving. In addition, these entities possess valuable first-party data and are utilizing ClearLine to layer their first-party data on top of third-party supply for curation. The first-party data enriches the supply and allows commerce entities to package their media with data to extend their overall footprint.

Our fastest-growing format in TVplus in the third quarter was audio. We are gaining traction in this area and see it as a significant opportunity in the future. Earlier this year, Spotify announced its new Spotify Ad Exchange or SACS and selected Magnite at its global programmatic partner. SACS has integrated SpringServe to power its omnichannel advertising across audio, video, and native display. Acast, a leading podcast monetization platform, announced a partnership with Magnite during the third quarter as well. This strategic collaboration will make ACAS podcast inventory which includes more than 140,000 podcasts and more than 1,000,000,000 listens quarterly available to advertisers through Magnite's infrastructure. Turning to AI.

We've delivered another quarter of progress and have an increasingly clear view of how Agentic technologies will show up across the industry and in our products. In October, an industry association comprises some of the industry best regarded executives introduced the Add Context Protocol or AdCP, a proposed standard for how buy and sell side agents will transact. When you look into the structure, you see that the agents are designed to operate on top of the transactional infrastructure that exists today. Much of which we built. As always, these transactions must be vetted, negotiated, processed and cleared in a privacy compliant manner. Jobs we excel at.

We envision the new world as one where sell side assets in particular are going to be even more valuable and especially magnets, with our strong publisher relationships SPO partnerships and leading technology. A key focus of our AI efforts involves the integration of the model context protocol or MCP, a generalized open standard that lets agents and LLMs connect to external systems and data. The AI business we recently acquired Streamr, is built on MCP, and we've wired its foundation into Clearline. Enabling partners like the aforementioned ITV, and WOLT to generate CTV creative receive campaign recommendations, and place buys. Clearline is the first of several Magnet products to integrate MCP.

This work will enable agents to that automate tedious tasks such as setup and adjustment, to surface valuable insights and drive increased monetization while freeing partners valuable time. Beyond agents, we continue to strengthen the machine learning that powers many of our products and operations. Improving optimization, raising win rates and lowering unit costs. We're also applying AI across our internal operations combining process redesigns with efficiency gains, and investing in the platform services and training our teams need to serve our growing partner list without meaningfully increasing headcount. Next, I wanna provide an update on the Google AdTech trial.

As you likely know, Judge Brinkema concluded a two week trial on the remedies phase of the DOJ's case in early October. The post trial briefing has recently been filed and closing arguments are scheduled for November 17. After that, it will likely take some time for Judge Brinkman to issue a final order outlining the remedies she'll put in place. At this stage, having found that Google had illegally engaged in a series of anti competitive acts to establish monopolies in the ad exchange and ad server market. Both structural and behavioral remedies remain on the table.

Structural referring to the forced divestiture of parts of their ad tech business, and behavioral being a set of rules and practices designed to rectify and prohibit Google's illegal anticompetitive conduct. We think there are merits of both types remedies and have confidence that the court will reach the right outcome. The remedy hearings in September did not change our positive outlook about remedies. Ultimately, our point of view is that any decision that helps restore competition and eliminates Google's self preferencing behavior will be a big win for the open Internet as well as Magnite specifically.

To that point, as we said previously, every 1% of market share that shifts to magnite as a result of these remedies could mean $50,000,000 of additional contribution ex TAC on an annualized basis and at a very high 90% plus flow through margins. Needless to say, we're watching developments in this case very closely. On a related note, we recently announced that we had filed our own lawsuit against Google relating to its anti competitive conduct The suit which seeks financial damages as well as other remedies, is a follow on action to the DOJ litigation and builds on the allegations proved in that case. The complaint further details how Google's illegal conduct served to bribe Magnite.

And other independent players the opportunity to compete fairly and grow their businesses while harming advertisers and publishers alike. We're at the early stages of the process and we'll provide further updates on the litigation as it progresses. With that, I'll turn the call over to David for more detail on financials. David?

David L. Day: Thanks, Michael. As Michael mentioned, we had a very strong Q3 with standout performance in CTV achieving 18% contribution ex-TAC growth or 25% excluding political, exceeding our expectations. DVplus performed well and was in line with our guide. Adjusted EBITDA was solid as well, growing 13% to $57 million and beating expectations, resulting in a 34% margin. We're pleased with these results, particularly the acceleration in CTV growth which was significantly above market growth. Total revenue for Q3 was $179 million, up 11% from 2024. Contribution ex-TAC was $167 million, up 12%, exceeding the high end of our guidance range.

CTV contribution ex-TAC was $76 million, up 18% year over year or 25% excluding political, exceeding the top end of our guidance range, as I mentioned. DVplus contribution ex-TAC was $91 million, an increase of 7% or 10% excluding political from the third quarter of last year. This result was in line with our guidance range. Our contribution ex-TAC mix for Q3 was 45% CTV, 39% mobile, and 16% desktop. From a vertical perspective, health and fitness, shopping, and technology were the strongest performing categories, while automotive was one of our weakest performing categories. Total operating expenses, which includes cost of revenue, were $154 million, an increase from $147 million for the same period last year.

Adjusted EBITDA operating expense for the third quarter was $110 million, in line with expectations and an increase from $99 million in the same period last year. The increase was primarily driven by personnel expenses, and higher cloud and data center costs, supporting the growth of our CTV business and investment in CTV related features and functionality. Our net income was $20 million for the quarter compared to net income of $5 million for the 2024. As I previously mentioned, adjusted EBITDA grew 13% year over year to $57 million reflecting a margin of 34%. As a reminder, we calculate adjusted EBITDA margin as a percentage of contribution ex-TAC GAAP earnings per diluted share were $0.13 for the 2025.

Compared to $0.04 for the 2024. Non GAAP earnings per share for the 2025 was $0.02 compared to $0.17 last year. The reconciliations to non GAAP income and non GAAP earnings per share are included with our Q3 results press release. Our cash balance at the end of Q3 was $482 million, an increase from $426 million at the end of the second quarter. Operating cash flow, which we define as adjusted EBITDA less CapEx, was $39 million. Capital expenditures, including both purchases of property and equipment, and capitalized internal use software development costs, were $18 million. In addition, as Michael mentioned earlier, we acquired Streamr for $10 million.

As we've discussed, our technology team has made significant progress improving operational efficiency and reducing per unit cloud costs, which is allowing us to manage significant increases in ad request volumes with modest total cost increases. As part of our ongoing efforts to enhance efficiency, and maximize the value of our hybrid infrastructure, we've been evaluating the optimal allocation of on-prem and cloud resources. As a result, we decided to increase our CapEx investment by $20 million this quarter, specifically investing in two new data center build outs in Ashburn, Virginia, and Santa Clara, California, to secure future data capacity needs. We now expect CapEx for Q4 and the full year to be approximately $23 million and $80 million respectively.

For 2026 and beyond, we believe this increased investment will lead to additional efficiencies and plan to reinvest some of the savings in critical growth areas. We expect CapEx to be in the $60 million range in 2026. Net interest expense for the quarter was $5 million. Net leverage for the quarter was well below our goal of less than 1x and came in at 0.3x at the end of Q3, down from 0.6x at the end of the second quarter. Just as a reminder, the $205 million principal balance of our convertible notes is a current liability on the balance sheet as the notes mature this coming March.

We plan to pay off the converts with cash at maturity, and have sufficient liquidity to do so. During the first March of the year, we repurchased or withheld over 3,300,000 shares for approximately $50 million. We have an $88 million remaining in our authorized share repurchase program, which we will continue to deploy opportunistically. I will now share our thoughts about the fourth quarter and outlook for 2026. Consistent with last quarter and given the concentration of political spend in the fourth quarter last year, we will provide guidance both with and without political contribution ex-TAC to show underlying business performance.

Contribution ex-TAC to be in the range of $191 million to $196 million, which represents growth of 6% to 9% or 13% to 16% excluding political. Contribution ex-TAC attributable to CTV to be in the range of $87 million to $89 million, which represents growth of 12% to 14%, or 23% to 25% when excluding political. In DVplus, our guide reflects slightly lower growth versus the year-to-date performance due to a couple of factors. First, in October, we've seen some additional drop in vertical spend in automotive and some additional weakness in technology and in home and garden, indicating a slightly softening macro environment.

We're also seeing some spend movement from online video to CTV, which makes a ton of sense given more competitive CTV CPMs and expanded SMB access to CTV inventory. Lastly, we've seen some near-term pressure from a recent feature change by a top DSP partner affecting all SSPs. Despite these factors, we're still experiencing or expecting growth in DVplus and expect contribution ex-TAC for DVplus to be in the range of $104 million to $107 million, which represents growth of 2% to 5% or 7% to 10% excluding political. We anticipate adjusted EBITDA operating expenses to be between $112 million and $114 million and CapEx of approximately $23 million, including the incremental investment mentioned earlier.

For the full year 2025, which is implied in the Q4 guide, we continue to expect total contribution ex-TAC growth above 10% or mid-teens excluding political. Adjusted EBITDA to grow in the mid-teens 180 basis points at the midpoints. And we are raising CapEx to be approximately $80 million. Now turning to 2026, want to point out that our estimates do not include any potential market share gains as a result of remedies from the Google AdTech trial. We currently expect contribution ex-TAC growth for 2020 to be at least 11%.

We also expect to get back into our target margin range, which is 35% at the low end, inclusive of a sizable investment in people we are making to support our growth initiatives. And CapEx to be approximately $60 million. The third quarter was really positive for Magnite as we continue to see significant traction from our partners and from our strategic initiatives. I'm excited about the progress in our business and look forward to continued momentum into 2026. With that, let's open the line for Q&A.

Operator: We will now begin the question and answer session. To ask a question, you may press star then 1 on your touch-tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed, and you would like to withdraw your question, please press star then 2. At this time, we will pause momentarily to assemble our roster. Our first question comes from Shyam Vasant Patil of Susquehanna. Go ahead please.

Shyam Vasant Patil: Hey, guys. Nice job on the quarter. Michael, I have a question for you. You know, a fairly kind of a kind of recent question or even discussion has been around The Trade Desk, Kokai, OpenPath and the potential impact to Magnite just given you know, some of the some of the impact that we've seen it have on others in the industry. Can you just talk about this and maybe just also talk about your value add to the ecosystem? Thank you.

Michael G. Barrett: Yeah. Thanks for the question, Shyam. Yes, so in late Q3, Trade Desk made a software change to their operating system that prioritized OpenPath as the default path for supply. And since that occurred, we've worked with all of our major buyers, which include agency holding companies, to reconnect Magnite as a preferred supply path. And as we noted in the script, Magnite powers many of the HoldCo's buyer marketplaces. So connection to Magnite is essential for their business. So there was impact. We project impact for Q4 and that's kind of softer DVplus guide that we put forth. But we do feel as though the bulk of the impact has already occurred. That it's been limited to DVplus.

We've been able to work with our largest buyers, again, many of the agency holding companies, to reconnect Magnite. And we feel confident going forward that will mitigate any negative financial impact in out quarters. I will say we definitely support Trade Desk's goal of cleaning up the ecosystem and cutting out supply players that provide very little value. And I assure you this move will do that. But I also think this shows Magnite's importance to the buyer buying community, the profile of the media that we supply, the services that we provide, building their businesses, buyer marketplaces on our rails. And obviously, the importance that we bring to the supply side.

So I think that, certainly, Magnite's proven its efficacy in the industry. And I think that the strength of those relationships will help us mitigate any headwinds that come from these changes or other changes for other DSPs.

Operator: Thank you, Michael. The next question comes from Daniel Louis Kurnos of The Benchmark Company. Go ahead please.

Daniel Louis Kurnos: Thanks, Michael. Just to obviously tack on to that. I don't want to read too much into the press release, but you know, you said DVplus continues to perform well, growing in line with expectations driven by exclusive partner expansion. I think we all believe Amazon is your fastest growing DSP partner, and it seems like you're gaining share across kind of DVplus with them as they expand. So maybe your thoughts as they press their own DSP and your partnership there. And then secondarily, you know, SMB is becoming a real thing now.

You know, I think people forget how deeply integrated SpringServe is with all of the DSPs, but just kind of your thoughts on where you're at from the SMB marketplace from an integration perspective, how the market directly, and if you want to bring up some of the Streamer AI stuff again, that's fine too. Thank you.

Michael G. Barrett: Yeah. Thanks for the question, Dan. Yes. Listen, our spend from the leading DSPs remain very strong. We are closing that gap that we had highlighted multiple quarters ago, where the total ad spend was outpacing the contribution ex-TAC growth. And that's narrowed, but we still have a very healthy spend pattern. And with all DSPs and Amazon in particular is having a banner year. And we really enjoy that partnership both with Amazon as a buyer of inventory and Amazon as a publisher, where we can help them monetize the inventory there. And the SMB is a very exciting chapter. Obviously, partners like Mountain are doing a phenomenal job in buying a lot of supply from us.

And the idea of Streamer is to help folks like that, not just Mountain, but other DSPs that may not have the tools to attract SMB dollars or, you know, merchant, or agencies. And so the idea is that we offer Streamer product to those folks who have direct relationships with SMBs. The idea isn't for us to be chasing SMBs ourselves, but to make sure that spend winds up on our platform. And that's why we're super excited about the Streamer acquisition because it accomplishes that. In addition, as we pointed out, we get the side benefit of having this AI infusion, this AI-first way of thinking into our technology organization.

And you see that already Clearline is being built on MCP rails. And so it's going to help accelerate our total kind of AI agentic focused business. So very, very happy with that acquisition.

Daniel Louis Kurnos: Super helpful, Michael. And despite all the noise, really nice print in Outlook. Thank you.

Michael G. Barrett: Thanks, Dan.

Operator: Next question comes from Jason Michael Kreyer of Craig Hallum. Go ahead please.

Jason Michael Kreyer: Michael, I appreciate the comments on AI and you had talked about ad CP. You had mentioned the sell side's role becoming more important. And maybe you just expand on how Magnite's role changes in a more agentic world?

Michael G. Barrett: Yeah. Thanks, Jason. Obviously, early days and a lot of this just exists on whiteboards. But I do think that the shift that we've seen in a non-agentic world, the idea of first-party data owned by the large media companies becoming extraordinarily important and their desire to keep that data as close as possible to the supply side. So we're playing a huge role in the audience creation business today. And we see that as accelerating.

I think that the key really as you look at ad CP, you start to realize that the idea of inventory sitting way over here and dollars from buyers sitting way on the other side of the exchange, you start to see a world where they're commingled. And as you start to look at the value, the idea of whoever has the to that valuable supply as it gets co-mingled has a leg up. And so we feel very bullish about not just our prospects but the prospects for the supply side in this new kind of agentic world.

Jason Michael Kreyer: Appreciate that. I wanted to follow-up on live sports. Is it kind of your perspective on supply and demand? Seems like there's a ton of demand for more dollars flowing into live sports. Curious the perspective you get from publishers moving inventory into programmatic or even moving inventory into biddable and how that progresses over time?

Michael G. Barrett: Yeah. I mean, it's thanks, Jason. It's accelerating for sure. And it is playing a meaningful impact on our revenue. Again, let's be careful here. I don't think the Super Bowl is going to be programmatic anytime soon. But we're seeing a ton of inventory from college football. We're seeing NFL inventory. And so it's not just relegated to second-tier leagues or sports, if you will. And it's very early, right? Programmatic is not being utilized to its fullest capacity. So we're at the early stages of this, and we're pleased with our product lead in this area. We talked about LSA in the script.

And Disney has really been a key partner in the expansion of our footprint in sports inventory programmatically. So we feel real good about where we stand in it and the TAM that's associated with it.

Jason Michael Kreyer: Great. Thanks, Michael.

Michael G. Barrett: Thanks, Jason.

Operator: The next question comes from Shweta Khajuria of Wolfe Research. Go ahead, please.

Shweta Khajuria: Okay. Thank you for taking my question. Michael, could you please talk to where we stand on the Google AdTech case? There is this, you know, rising level of expectation that maybe structural breakup is not going to happen and may even on the behavioral side, perhaps the expectations have come down a little bit. Is there any reason to think that? And where do you think how do you think it went, and any update on the timeline from your vantage point? And then the second question I have is on 2026 guideline guidance, David, is it possible to comment on what's baked into your guidance and what would drive upside from your base case? Thanks.

Michael G. Barrett: Yeah. Hey, Shweta. It's Michael. Yes. No. We were very encouraged by the REMEDY's hearings. It pretty much stayed to the script. The DOJ was pressing structural changes. Google was recommending behavioral. And we've always, I think, been very clear that we don't view structural as the only way to win in this scenario. That a level fair playing field is exactly what we're looking for, what Judge Brinkman is very aware of. And I think we feel very good about the direction it's heading, structural or behavioral. So I think our outlook on it remains unchanged and our outlook has always been quite positive and we think it's a generational opportunity for a company like Magnite.

David L. Day: Great. And, Shweta, on the guide for 2026, I think a number of items. As a general matter, we've tried to be somewhat conservative given the continued tenuous nature of the macroeconomic environment. We have $0 baked into that, for any Google remedy, outcomes. Again, we're trying to be modest, so there's midterm elections. And so we've taken a fairly modest approach there. We'll see, you know, what kind of competitive, races we have when that comes around. I think the other factor is we have a number of tailwinds around some of these deals that we've signed, commerce media, you know, we've got, you know, these AI initiatives.

The challenge is it's so hard in this space to sort of peg the timing of when some of those might accelerate. And so I think we've layered in modest expectations on those fronts. And so I think that could also create, you know, potential upside there.

Operator: Thanks, Michael. Thanks, David. The next question comes from Laura Anne Martin of Needham. Go ahead please.

Laura Anne Martin: Hi, there. Yes. So Michael, for you, you guys represent primarily premium CTV ad units. And what I'm interested in is there's excess supply in CTV generally because there's fast channel selling CTV ad units at $6 and $7. My question is, can your CPMs and ad units are they immune? Or is there bleeding into those lower are they competing with those lower cost ad units, which puts downward pressure potentially on your rev share over time. And then for David, I'm going to push on you a little bit. You just raised the CapEx to $20 million in Q4. And in your last breath, you said you were adding FTEs.

So what we've seen when guys raise their CapEx estimates generally is they cut FTEs. They use capital to actually replace FTEs. So why do why are you projecting both more growth in CapEx and faster full-time equivalent employee growth? I would love clarity on that. Thanks, guys.

Michael G. Barrett: Yes. Thanks, Laura. Yes, as it relates to the CTV, CPM trends, we've seen a bit of stability for the last several quarters. And there are definitely trade-in bands, right? Like so you have the super premium, you have premium, and then you have a broader batch of inventory maybe in the fast channels. And they've been pretty steady and consistent. You may have buckets of dollars flow in each of those, channels, but generally speaking, I think people are aware of what the value of a Netflix ad is compared to perhaps an ad in an unspecified program in a free TV watch channel. Not that it doesn't have value, it just has a different value.

You also keep in mind that these folks have great first-party data, which helps really differentiate themselves from, you know, free TV where folks don't have to be registered or you have their personal information. And so that's valuable first-party data helps separate it as well. So, yes, I don't see this as a race to the bottom or an existential threat to our revenues in the coming quarters.

David L. Day: Great. And on the CapEx discussion, yes, good question. And so I'll bifurcate, kind of the discussion into the really two separate decisions. So the first side on the CapEx, we had two primary objectives. The first was to secure additional space on the East Coast and on the West Coast for future expansion. And so as you know, there's some scarcity, in data centers for space. And we wanted to make sure and, you know, lock down the expansion, space that we need looking out the next couple of years. And so there's some overhead infrastructure and other things that are related to that. And this is all under the umbrella of optimizing our hybrid infrastructure.

So as you know, in CTV, we run a hybrid infrastructure with significant activity on the cloud, but moving to a greater proportion of our activity on-prem, which is cheaper. And so a portion of that CapEx expansion went direct to additional machines moving on-prem to move processing of volume AR processing from the cloud to on-prem. And so the financial result of that is would normally be margin greater margin expansion in 2026. So these machines are going in place late this year, early next year. And so that would be the normal output. And what we're saying is as a separate decision, we have so much potential and opportunity on the CTV front.

That we felt like it was important to accelerate some of our investment activities. So that is adding software engineers, product folks, to focus and accelerate audience work. Live sports development, clear line, and then also, AI implementation. So both in our product, but also, for internal efficiencies. And so for some of those categories, you need some upfront investment to get the payoff, you know, in the future. And so it's kind of two separate, you know, decisions going on there, and we're just allocating some of that additional margin to some really important investment initiatives.

Laura Anne Martin: Yeah. Thank you.

Operator: The next question comes from Barton Evans Crockett of Rosenblatt. Go ahead please.

Barton Evans Crockett: Okay, great. Thanks for taking the questions. First, I wanted to ask about the outlook in 2026 on CXT. Growing at least 11% as you put it. And that would be including the contribution from political. So maybe ex-political it's at least, like, nine, 10%. Or something like that. In 2025, your ex-political growth rates, you say, is mid-teens. So ex-political, you're talking about a slowdown. And I'm just wondering what's behind that. Why the slowdown? Is that conservatism, or is there something happening with autos or The Trade Desk? Tariffs, So that's the first question.

David L. Day: Yeah. I think there's an element of conservatism in there. I would say also DVplus was particularly strong, in 2025. And so there's sort of, you know, maybe a little reversion to the mean. You know, we kind of target that at, you know, mid-single-digit growth. And so I think that's, you know, that's part of that equation as well.

Barton Evans Crockett: Okay. Alright. That's helpful. And then Michael, on the antitrust, you know, I think one of the hopes is that there could be an impact in 2026 which was always predicated on the idea of behavioral that could be implemented quickly enough to actually matter in 2026. Structural, of course, could be appealed and would take, you know, a long time, so it was never in the view that it could impact 2026. So I'm just curious based on what's happened with some of the discussion around some of the technologies, you know, prebid maybe is a middleware other things.

How do you feel now about the possibility of there being behavioral remedies that could impact 2026 P&L for you guys?

Michael G. Barrett: Yeah. Question, Bart. Look. It's obviously not included in the guide. Because there's just too many unknowns. But we all we have felt that we if the rulings were if they paced along the timeline that we expected, and they are, that a judgment would be rendered in 2026, first half of it. And the belief that even if there were the judgment was structural that behavioral remedies will be put in place throughout the appeals process. So we still feel relatively good that we'll see impact from this in 2026. But I think we've always been pretty clear that no one should be thinking about it in the first half of the year.

They should be thinking about it in the second half of the year.

Barton Evans Crockett: Okay. But just to follow-up on that, technologically, are the things that are being discussed, looked at, that you see as likely things that could be done quickly?

Michael G. Barrett: Yeah. The most common ones, I think, are, you know, when it's related to the sell side, yes. Buy side probably requires a little bit more. But it would yeah. Unified pricing. Yeah. So that would be as something that could be done quite quickly. I was just I'm sorry. Was talking to her. General counsel who's the expert in the matter. He should probably be answering the question and not me. But yeah, the unified pricing would be a big win, and that is something that could be done quickly.

Barton Evans Crockett: Okay. That's great. Thank you.

Michael G. Barrett: Thanks, Bart.

Operator: The next question comes from Zachary Cummins of B. Riley. Go ahead please.

Zachary Cummins: Hi, good afternoon. Thanks for taking my questions. David, I think you mentioned in the script that some of your CTV strength was actually partially driven by some of your budgets from, like, mobile video actually moving into that direction. Is this a dynamic that you think could continue moving forward? Or more kind of a one-time thing that we experienced here in recent months?

David L. Day: No. I think it's a dynamic that moves forward. I do want to be clear. That was sort of in a bucket of a handful of items I would not call any of these, you know, any kind of earth-shattering volumes. It's just, you know, a little bit more on the margin. But we do think, especially in the, I guess, in the shorter term that there's a shift in budgets, you know, that will continue with SMBs into the CTV space. You know, it's a new TAM for the company. And so but, initially, I think the initial budget probably are a little bit cannibalistic, and then I think it draws from budgets that are outside of our ecosystem.

So I think it's net-net over time, it's a very positive development.

Zachary Cummins: Understood. And my follow-up question is just around Netflix. It seems like that relationship is progressing along pretty nicely. Any insight into how you think about ramping that up whether that's just executing now that you're live in all their ad-supported markets or additional features you plan on helping them roll out on their ad platform? Any incremental color there would be great.

Michael G. Barrett: Yeah. Zach, we've always been pretty clear about that's their story to tell. So, you know, they did highlight their success programmatically in Europe, international markets. And so that's the big driver of the relationship and will continue to be so. But, yeah, I mean, it's the relationship is incredibly strong and expectations are exactly where we thought we would be at this time of the year.

Zachary Cummins: Great. Thanks for taking my questions, and best of luck with the rest of the quarter.

Michael G. Barrett: Thank you.

Operator: The next question comes from Robert James Coolbrith of Evercore ISI. Go ahead please.

Robert James Coolbrith: Great. Thank you very much. Wanted to go back to the Trade Desk change. Beyond the OpenPath issue, it seems like they and others are somewhat focused on dealing with the issue of reselling, particularly just given the changes to prebid transaction ID of late. Just, you know, wondering, given your direct publisher footprint, if you think there could ultimately be an opportunity to win some share in the market the demand side looks at the issue of reselling, particularly given that, you know, there's reduced transparency around the transaction ID. Thank you.

Michael G. Barrett: Yeah, it's a great question, Robert. And I think we're very excited about it. We're often painted as the foil to Trade Desk or Trade Desk encroaching on our turf. But I would say 99% of the stuff that Jeff does is brilliant, and we are so supportive of cleaning up the system. So if that is reselling and again, let's be clear, we don't believe Magnite is a reseller. I think the term applies to others, but we are a principal. We work directly with the publisher. We have a direct relationship, and we work with the top-tier biggest brands in the world.

So I think anything that helps clean up the system that gets rid of the obfuscation that the redundancy I mean, the traffic that we have to process that is redundant traffic that is multiple bids, you know, it's just spewing of inventory of the same unit across the system, anything that can clean up the duplication or reselling is something we lean into, and we would definitely be a beneficiary of that action.

Robert James Coolbrith: Got it. Thank you very much.

Operator: Our next question comes from Tim Nollen of SSR. Go ahead please.

Tim Nollen: Michael, I'd like to come back to the discussion of the ad agencies, which you spoke about a little bit in your prepared remarks. There's been a there is a lot of change going on in the agency landscape. Not to pick on names, but WPP and Dentsu are going through some turmoil right now. Omnicom and IPG are about to close this big merger. Publicis is riding high, and it has a lot of its own in-house ad tech.

I'm not trying to single out the agency in terms of what you're going to reply to, but my question is with so much change going on amongst the agencies, does it create an opportunity for you to strengthen your SPO ties? What can you do with them given so much disruption in the market, including to their businesses? Are there things you can do to help them and, in turn, things they can do that help you with supply path optimization?

Michael G. Barrett: Yeah, Tim. Great question. And I'll take a cut at it. We're also very fortunate to have our President of Revenue here, Sean Buckley. And so I'll let him jump in on it as well. But yes, I mean, these agencies are going through some challenges. On their media businesses in the programmatic space in particular. Had lost some relevance. They had ceded a lot of that control to the DSPs.

And so we have seen over the last several years a very lean-in increased awareness of supply side, how they can regain those relationships with those publishers that trust them, how they can renegotiate a proprietary data layover their own data, get preferred pricing, and all this has to be done in an efficient manner, a technological manner. And that makes us so important in that piece for them from a strategic standpoint. So, yeah, I think our value is only growing in importance for the holding companies and we are very leaned in. And as we cited, we have a big team that works with them on a daily basis.

Don't know, Sean, if you want to add any more color.

Sean Buckley: I totally agree. There's been a theme of the agencies really leaning in and working more with supply side technology in a big way. I also think that they've obviously either invested or built out proprietary data products, and we've spent a lot of time integrating those products into our technology. And so we're very excited about the future we have with the agencies and holding companies.

Tim Nollen: Great. Thanks very much.

Michael G. Barrett: Thanks, Tim.

Operator: The next question comes from L. Niebuhr of Lake Street Capital Markets. Go ahead please.

L. Niebuhr: Regarding Google, I'm wondering if you guys are seeing a shift in publisher RFP activity or deal flow towards Magnite?

Michael G. Barrett: Are you regarding specifically the ad DOJ trial?

L. Niebuhr: Yep. Correct.

Michael G. Barrett: Yeah. No. So to date, I mean, obviously, we have strong publisher relationships. But to date, there hasn't really been any movement because the structure remains the same. Right? And so until that structure is either changed through the divest or through behavior patterns, any of the share gains that we're seeing against our competitors aren't coming from Google. They're coming from the open web. And so all that is upside for us.

L. Niebuhr: Gotcha. Okay. That's it for me. Congrats again on the quarter.

Michael G. Barrett: Thank you so much. Okay. Well, thanks all for joining the session. I would like to turn the conference back over to Michael Barrett, CEO, for any closing remarks.

Michael G. Barrett: Thank you, Cindy. I want to thank all of you for joining us today and for your continued support. Our business is performing well, particularly with our growth trends in CTV. We are encouraged by the momentum from our partners who include the world's leading streamers. Our team is constantly innovating and enhancing our industry-leading technology. I'm excited about the new functionality improvements that I discussed which will further benefit our partners. We are very well positioned to build on our accomplishments and take advantage of the opportunities for growth and market share gains ahead. I'll turn it back over to Nick to cover our upcoming marketing events.

Nick Kormeluk: Yeah. Thanks, Michael. We look forward to speaking to any of you at our upcoming events. We have the SSR event virtually hosted by Tim Nollen tomorrow, that's a virtual NDR. We have the Seaport Virtual TMT Conference on November 17. Craig Hallum in New York on November 18, Wells Fargo in the Rancho Palos Verdes estate on November 18. The RBC Conference in New York on November 19, Stevens virtually on the twenty-first, a West Coast roadshow on the week of December 8, and finally, Raymond James in New York on December 9. Thank you all, and have a great evening.

Operator: This conference has now concluded. Thank you for attending today's presentation. You may now disconnect.