MAGNITE, INC.

Previous wording

This Quarterly Report on Form 10-Q and related statements by the Company contain forward-looking statements, including statements based upon or relating to our expectations, assumptions, estimates, and projections. In some cases, you can identify forward-looking statements by terms such as "may," "might," "will," "objective," "intend," "should," "could," "can," "would," "expect," "believe," "design," "anticipate," "estimate," "predict," "potential," "plan" or the negative of these terms, and similar expressions. Forward-looking statements may include, but are not limited to, statements concerning the Company's guidance or expectations with respect to future financial performance; acquisitions by the Company, or the anticipated benefits thereof; macroeconomic conditions or concerns related thereto; the growth of ad-supported programmatic connected television ("CTV"); our ability to use and collect data to provide our offerings; the scope and duration of client relationships; the fees we may charge in the future; key strategic objectives; anticipated benefits of new offerings; business mix; sales growth; benefits from supply path optimization; our ability to adapt to advancements in artificial intelligence; the development of identity solutions; client utilization of our offerings; the impact of requests for discounts, rebates, or other fee concessions; our competitive differentiation; our market share and leadership position in the industry; market conditions, trends, and opportunities; the effects of regulatory developments or antitrust rulings on competitive dynamics in our industry; certain statements regarding future operational performance measures; and other statements that are not historical facts. 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.

Current wording

This Quarterly Report on Form 10-Q and related statements by the Company contain forward-looking statements, including statements based upon or relating to our expectations, assumptions, estimates, and projections. In some cases, you can identify forward-looking statements by terms such as "may," "might," "will," "objective," "intend," "should," "could," "can," "would," "expect," "believe," "design," "anticipate," "estimate," "predict," "potential," "plan" or the negative of these terms, and similar expressions. Forward-looking statements may include, but are not limited to, statements concerning the Company's guidance or expectations with respect to future financial performance; acquisitions by the Company, or the anticipated benefits thereof; macroeconomic conditions or concerns related thereto; the growth of ad-supported programmatic connected television ("CTV"); our ability to use and collect data to provide our offerings; the scope and duration of client relationships; the fees we may charge in the future; key strategic objectives; anticipated benefits of new offerings; business mix; sales growth; benefits from supply path optimization; our ability to adapt to advancements in artificial intelligence; the development of identity solutions; client utilization of our offerings; the impact of requests for discounts, rebates, or other fee concessions; our competitive differentiation; our market share and leadership position in the industry; market conditions, trends, and opportunities; the effects of regulatory developments or antitrust rulings on competitive dynamics in our industry; our litigation against Google LLC, or the anticipated benefits thereof; certain statements regarding future operational performance measures; and other statements that are not historical facts. 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.

Previous wording

We discuss many of these risks and additional factors that could cause actual results to differ materially from those anticipated by our forward-looking statements under the headings "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations," and elsewhere in this report and in other filings we have made and will make from time to time with the Securities and Exchange Commission, or SEC, including our Annual Report on Form 10-K for the year ended December 31, 2024 and subsequent filings. These forward-looking statements represent our estimates and assumptions only as of the date of the report in which they are included. Unless required by federal securities laws, we assume no obligation to update any of these forward-looking statements, or to update the reasons actual results could differ materially from those anticipated, to reflect circumstances or events that occur after the statements are made. Without limiting the foregoing, any guidance we may provide will generally be given only in connection with quarterly and annual earnings announcements, without interim updates, and we may appear at industry conferences or make other public statements without disclosing material nonpublic information in our possession. Given these uncertainties, investors should not place undue reliance on these forward-looking statements.

Current wording

We discuss many of these risks and additional factors that could cause actual results to differ materially from those anticipated by our forward-looking statements under the headings "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations," and elsewhere in this report and in other filings we have made and will make from time to time with the Securities and Exchange Commission, or SEC, including our Annual Report on Form 10-K for the year ended December 31, 2024, our Quarterly Report on Form 10-Q for the period ended March 31, 2025, and subsequent filings. These forward-looking statements represent our estimates and assumptions only as of the date of the report in which they are included. Unless required by federal securities laws, we assume no obligation to update any of these forward-looking statements, or to update the reasons actual results could differ materially from those anticipated, to reflect circumstances or events that occur after the statements are made. Without limiting the foregoing, any guidance we may provide will generally be given only in connection with quarterly and annual earnings announcements, without interim updates, and we may appear at industry conferences or make other public statements without disclosing material nonpublic information in our possession. Given these uncertainties, investors should not place undue reliance on these forward-looking statements.

Previous wording

Supply Path Optimization ("SPO") refers to efforts by buyers to consolidate the number of vendors with which they work to find the most effective and cost-efficient paths to procure media. SPO is important to buyers because it can increase the proportion of their advertising ultimately spent on working media, with the goal of increasing return on their advertising spend, and can help them gain efficiencies by reducing the number of vendors with which they work in a complex ecosystem.

Current wording

Supply Path Optimization ("SPO") refers to efforts by buyers to consolidate the number of vendors with which they work to find the most effective and cost-efficient paths to procure media.

Previous wording

SPO is important for us because it allows us to potentially attract unique advertising demand and increase revenue opportunities for our seller clients. We typically enter into SPO agreements directly with agencies or agency holding companies, which may provide for custom integrations, data flows or volume-based discounts. Under these SPO agreements, we may be designated as a preferred partner or otherwise enter into terms intended to increase the overall spend on our platform.

Current wording

Our SPO efforts with buyers are important because they allow us to build deeper relationships with buyers and potentially attract unique advertising demand, which, in turn, increase revenue opportunities for our seller clients. We typically enter into SPO agreements directly with agencies or agency holding companies, which may provide for custom integrations, data flows or volume-based discounts. Under these SPO agreements, we may be designated as a preferred partner or otherwise enter into terms intended to increase the overall spend on our platform.

Previous wording

Header bidding is a programmatic technique by which sellers offer inventory to multiple ad exchanges and supply side platforms, such as our platform, simultaneously. Header bidding has been rapidly adopted in recent years in the desktop and mobile channels and has experienced modest adoption in CTV. The adoption of header bidding has created a number of challenges and technical complexities for both sellers and buyers, which require sophisticated tools to manage.

Current wording

Header bidding is a programmatic technique by which sellers offer inventory to multiple ad exchanges and supply side platforms, such as our platform, simultaneously. Header bidding has been rapidly adopted in recent years in the desktop and mobile channels and header bidding-like solutions have experienced modest adoption in CTV. The adoption of header bidding has created a number of challenges and technical complexities for both sellers and buyers, which require sophisticated tools to manage. In addition, header bidding has led to a significant increase in the number of ad impressions to be processed and analyzed through our platform as well as by DSPs, which can lead to increased costs if not properly addressed. We continuously work to increase the operational efficiency of our platform, so as to enable buyers and sellers to achieve their campaign and monetization objectives in a cost-effective manner.

Previous wording

On April 17, 2025, the United States District Court for the Eastern District of Virginia (the "Court") ruled that Google had violated federal antitrust laws by willfully acquiring and maintaining monopoly power in the display publisher ad server market and display ad exchange (also called an SSP) market, and had unlawfully tied its display ad server and ad exchange. Having found Google liable, the Court is scheduled to hold a hearing commencing September 2025 to determine what remedies are appropriate to restore competition to the affected markets. While the specific timing and nature of these remedies remains uncertain, and Google has indicated its intent to appeal the decision, we expect this ruling to have a significant positive impact on our industry and business prospects.

Current wording

On April 17, 2025, the United States District Court for the Eastern District of Virginia (the "Court") ruled that Google LLC ("Google") had violated federal antitrust laws by willfully acquiring and maintaining monopoly power in the display publisher ad server market and display ad exchange (also called an SSP) market, and had unlawfully tied its display ad server and ad exchange. Having found Google liable, the Court is currently in the process of determining what remedies are appropriate to restore competition to the affected markets, with closing arguments scheduled to be held in November 2025. While the specific timing and nature of these remedies remains uncertain, and Google has indicated its intent to appeal the decision, we expect this ruling to have a significant positive impact on our industry and business prospects.

Previous wording

Refer to Item 1A. "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2024 for additional information related to risks associated with macroeconomic challenges.

Current wording

Refer to Part I, Item 1A. "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2024 and Part II, Item 1A. "Risk Factors" in our Quarterly Report on Form 10-Q for the period ended March 31, 2025 for additional information related to risks associated with macroeconomic challenges.

Previous wording

For the three and six months ended June 30, 2025, our revenue reported on a gross basis was 11% and 11%, respectively, of total revenue and for the three and six months ended June 30, 2024, our revenue reported on a gross basis was 16% and 17%, respectively, of total revenue. Any mix shift that causes an increase in the relative percentage of our revenue accounted for on a gross basis would result in a higher revenue contribution and an associated decrease in our gross margin percentage (with no underlying impact on gross profit or Contribution ex-TAC, as defined in section "Key Operating and Financial Performance Metrics"). Our revenue recognition policies are discussed in more detail in our audited consolidated financial statements and Note 2 thereto included in our Annual Report on Form 10-K for the year ended December 31, 2024.

Current wording

For the three and nine months ended September 30, 2025, our revenue reported on a gross basis was 11% and 11%, respectively, of total revenue and for the three and nine months ended September 30, 2024, our revenue reported on a gross basis was 12% and 16%, respectively, of total revenue. Any mix shift that causes an increase in the relative percentage of our revenue accounted for on a gross basis would result in a higher revenue contribution and an associated decrease in our gross margin percentage (with no underlying impact on gross profit or Contribution ex-TAC, as defined in section "Key Operating and Financial Performance Metrics"). Our revenue recognition policies are discussed in more detail in our audited consolidated financial statements and Note 2 thereto included in our Annual Report on Form 10-K for the year ended December 31, 2024.

Previous wording

Sales and Marketing. Our 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 our business acquisitions, professional services, facilities-related costs, and depreciation expense. Our sales and support organization focuses on increasing the adoption of our solution by existing and new buyers and sellers and supports ongoing client relationships. We amortize acquired intangibles associated with client relationships from our business acquisitions over their estimated useful lives.

Current wording

Sales and Marketing. Our 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 our business acquisitions, professional services, facilities-related costs, and depreciation expense. Our sales and support organization focuses on increasing the adoption of our solution by existing and new buyers and sellers and supports ongoing client relationships. We amortize acquired intangibles associated with client relationships from our business acquisitions over their estimated useful lives.

Previous wording

Technology and Development. Our 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 our 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. Technology and development costs are expensed as incurred, except to the extent that such costs are associated with internal use software development that qualifies for capitalization, which are then recorded as internal use software development costs, net, on our condensed consolidated balance sheets. We amortize internal use software development costs that relate to our revenue-producing activities on our platform to cost of revenue and amortize other internal use software development costs to technology and development costs or general and administrative expenses, depending on the nature of the related project. We amortize acquired intangibles associated with technology and development functions from our business acquisitions over their estimated useful lives.

Current wording

Technology and Development. Our 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 our 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. Technology and development costs are expensed as incurred, except to the extent that such costs are associated with internal use software development that qualifies for capitalization, which are then recorded as internal use software development costs, net, on our condensed consolidated balance sheets. We amortize internal use software development costs that relate to our revenue-producing activities on our platform to cost of revenue and amortize other internal use software development costs to technology and development costs or general and administrative expenses, depending on the nature of the related project. We amortize acquired intangibles associated with technology and development functions from our business acquisitions over their estimated useful lives.

Previous wording

General and Administrative. Our general and administrative expenses primarily consists of personnel costs, including salaries, bonuses, and stock-based compensation, associated with our 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.

Current wording

General and Administrative. Our general and administrative expenses primarily consist of personnel costs, including salaries, bonuses, and stock-based compensation, associated with our 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.

Previous wording

Comparison of the Three and Six Months Ended June 30, 2025 and 2024

Current wording

Comparison of the Three and Nine Months Ended September 30, 2025 and 2024

Previous wording

Revenue increased $10.5 million, or 6%, for the three months ended June 30, 2025 compared to the prior year period. Our revenue growth was driven by growth in mobile and CTV revenue, which increased by $5.6 million, or 10%, and $4.6 million, or 6%, respectively. Revenue from desktop for the three months ended June 30, 2025 was relatively flat compared to the prior year period.

Current wording

Revenue increased $17.5 million, or 11%, for the three months ended September 30, 2025 compared to the prior year period. Our revenue growth was primarily driven by growth in CTV and mobile revenue, which increased by $11.6 million, or 15%, and $5.1 million, or 9%, respectively.

Previous wording

Revenue increased $16.9 million, or 5%, for the six months ended June 30, 2025 compared to the prior year period. Our revenue growth was primarily driven by growth in mobile and CTV revenue, which increased by $10.1 million, or 9%, and $4.6 million, or 3%, respectively. In addition, revenue from desktop increased by $2.2 million or 5% for the six months ended June 30, 2025 compared to the prior year period.

Current wording

Revenue increased $34.4 million, or 7%, for the nine months ended September 30, 2025 compared to the prior year period. Our revenue growth was primarily driven by growth in CTV and mobile revenue, which increased by $16.2 million, or 7%, $15.2 million, or 9%, respectively.

Previous wording

Transactions reported on a gross basis generally result in a higher revenue contribution with an associated increase in our traffic acquisition costs. See Key Operating and Financial Performance Metrics below for a discussion of Contribution ex-TAC, which presents a year-over-year comparison of our CTV growth, without considering the impact of traffic acquisition costs related to revenue reported on a gross basis.

Current wording

Our CTV revenue growth for the nine months ended September 30, 2025 compared to the respective prior year period was negatively impacted by a decline in the relative percentage of transactions reported on a gross basis, compared to on a net basis. Transactions reported on a gross basis generally result in a higher revenue contribution with an associated increase in our traffic acquisition costs. See "Key Operating and Financial Performance Metrics" below for a discussion of Contribution ex-TAC, which presents a year-over-year comparison of our CTV growth, without considering the impact of traffic acquisition costs related to revenue reported on a gross basis.

Previous wording

Cost of revenue increased $2.3 million, or 4%, for the three months ended June 30, 2025 compared to the prior year period, primarily due to increases of $3.8 million in software costs and $2.6 million in cloud hosting, data center, and bandwidth expenses. The increases were partially offset by a decrease of $4.7 million in traffic acquisition costs due to a decrease in revenue reported on a gross basis.

Current wording

Cost of revenue increased $6.1 million, or 3%, for the nine months ended September 30, 2025 compared to the prior year period, primarily due to increases of $8.8 million in software costs, $6.6 million in cloud hosting, data center, and bandwidth expenses, and $3.5 million in personnel costs. The increases were partially offset by a decrease of $13.4 million in traffic acquisition costs due to a decrease in revenue reported on a gross basis.

Previous wording

Sales and marketing expenses were relatively flat for the three months ended June 30, 2025 compared to the prior year period. An increase of $2.1 million in personnel costs was offset primarily by a decrease of $1.7 million in depreciation and amortization, which was driven by certain acquired intangible assets becoming fully amortized in 2025.

Current wording

Sales and marketing expenses increased $0.8 million, or 2%, for the three months ended September 30, 2025 compared to the prior year period, primarily due to an increase of $2.6 million in personnel costs. The increase was partially offset by a decrease of $2.4 million in depreciation and amortization, which was driven by certain acquired intangible assets becoming fully amortized in 2025.

Previous wording

Sales and marketing expenses increased $4.5 million, or 5%, for the six months ended June 30, 2025 compared to the prior year period primarily due to an increase of $5.7 million in personnel costs. This increase was partially offset by a decrease of $1.9 million in depreciation and amortization for the same reasons as above.

Current wording

Sales and marketing expenses increased $5.3 million, or 4%, for the nine months ended September 30, 2025 compared to the prior year period, primarily due to an increase of $8.3 million in personnel costs. The increase was partially offset by a decrease of $4.3 million in depreciation and amortization for the same reasons as above.

Previous wording

General and administrative expenses decreased $2.8 million, or 6%, for the six months ended June 30, 2025 compared to the prior year period, primarily due to decreases of $2.2 million in refinancing expenses associated with our 2024 Term Loan B Facility (defined below) and $1.8 million in facilities-related costs.

Current wording

General and administrative expenses decreased $2.8 million, or 4%, for the nine months ended September 30, 2025 compared to the prior year period, primarily due to decreases of $3.1 million in refinancing expenses associated with our 2024 Term Loan B Facility (defined below) and $1.9 million in facilities-related costs. The decreases were partially offset by an increase of $1.8 million in personnel costs.

Previous wording

Interest expense, net decreased $1.7 million and $4.5 million for the three and six months ended June 30, 2025, respectively, compared to the prior year periods. The net decreases were primarily due to a decrease in interest expense as a result of the refinancing and repricing of our Term Loan B Facility (defined below).

Current wording

Interest expense, net decreased $2.2 million and $6.7 million for the three and nine months ended September 30, 2025, compared to the prior year periods, respectively. The net decreases were primarily due to a decrease in interest expense as a result of the refinancing and repricing of our term loan facilities.

Previous wording

Foreign exchange (gain) loss, net changed by $4.4 million and $9.0 million for the three and six months ended June 30, 2025 compared to the prior year periods, respectively, due to movements in foreign currency exchange rates and the amount of foreign currency-denominated cash, receivables, and payables, which were impacted by our billings to buyers, payments to sellers, and intercompany balances.

Current wording

Foreign exchange (gain) loss, net changed by $3.4 million and $5.5 million for the three and nine months ended September 30, 2025 compared to the prior year periods, respectively, due to movements in foreign currency exchange rates and the amount of foreign currency-denominated cash, receivables, and payables, which were impacted by our billings to buyers, payments to sellers, and intercompany balances.

Previous wording

The loss on extinguishment of debt of $2.2 million and $7.4 million for the six months ended June 30, 2025 and 2024, respectively, was due to the March 2025 repricing of our 2024 Term Loan B Facility (defined below) and the February 2024 refinancing of our prior 2021 Term Loan B Facility (defined below), which are further discussed below.

Current wording

The loss on extinguishment of debt of $2.2 million for the nine months ended September 30, 2025 was due to the March 2025 repricing of our 2024 Term Loan B Facility (defined below). The loss on extinguishment of debt of $0.3 million and $7.7 million for the three and nine months ended September 30, 2024, respectively, was due to the February 2024 refinancing of our prior 2021 Term Loan B Facility (defined below) and the September 2024 repricing of our 2024 Term Loan B Facility (defined below), which are further discussed below.

Previous wording

We recorded an income tax provision of $1.0 million and $0.1 million for the three and six months ended June 30, 2025, respectively, and an income tax provision of $4.6 million and a tax benefit of $3.2 million for the three and six months ended June 30, 2024, respectively. The tax provision for the three and six months ended June 30, 2025 was primarily the result of the Company's ability to recognize DTAs subject to the domestic valuation allowance and the federal, state, and foreign income tax provisions. The tax provision and benefit for the three and six months ended June 30, 2024, respectively, was primarily the result of the Company's ability to recognize DTAs subject to the domestic valuation allowance, and the foreign income tax provision. Given our current earnings and anticipated future earnings, we believe that there is a reasonable possibility that within the next twelve months, sufficient positive evidence may become available to allow us to reach a conclusion that all or a significant portion of the valuation allowance will no longer be needed. The exact timing and amount of the valuation allowance release are subject to change on the basis of the level of profitability that we are able to actually achieve.

Current wording

We recorded an income tax provision of $0.9 million and $1.0 million for the three and nine months ended September 30, 2025, respectively, and an income tax provision of $1.0 million and a tax benefit of $2.2 million for the three and nine months ended September 30, 2024, respectively. The tax provision for the three and nine months ended September 30, 2025 was primarily the result of the Company's ability to recognize DTAs subject to the domestic valuation allowance and the federal, state, and foreign income tax provisions. The tax provision and benefit for the three and nine months ended September 30, 2024, respectively, was primarily the result of the Company's ability to recognize DTAs subject to the domestic valuation allowance, and the foreign income tax provision. Given our current earnings and anticipated future earnings, we believe that there is a reasonable possibility that within the next twelve months, sufficient positive evidence may become available to allow us to reach a conclusion that all or a significant portion of the valuation allowance will no longer be needed. The exact timing and amount of the valuation allowance release are subject to change on the basis of the level of profitability that we are able to actually achieve.

Previous wording

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. These changes were not reflected in the income tax provision for the three and six months ended June 30, 2025, as enactment occurred after the balance sheet date. We have evaluated the tax law as it relates to our financials and determined there is no material impact on the periods presented above. Based on current projections, the impact will be a deferral of the payment of current income taxes over multiple years; however, we expect the net impact to our effective tax rate for 2025 to be immaterial.

Current wording

On July 4, 2025, the President of the United States signed H.R. 1, commonly referred to as the "One Big Beautiful Bill Act" into law. These changes were reflected in the income tax provision for the three and nine months ended September 30, 2025. We have evaluated the tax law as it relates to our financials and determined there is no material impact on the periods presented above. Based on current projections, the continuing impact will be a deferral of the payment of current income taxes over multiple years; however, we expect the net impact to our effective tax rate for 2025 to be immaterial.

Previous wording

The following table presents the calculation of gross profit and reconciliation of gross profit to Contribution ex-TAC for the three and six months ended June 30, 2025 and 2024:

Current wording

The following table presents the calculation of gross profit and reconciliation of gross profit to Contribution ex-TAC for the three and nine months ended September 30, 2025 and 2024:

Previous wording

The following table presents Contribution ex-TAC by channel for the three and six months ended June 30, 2025 and 2024:

Current wording

The following table presents Contribution ex-TAC by channel for the three and nine months ended September 30, 2025 and 2024:

Previous wording

Contribution ex-TAC increased $15.2 million, or 10%, for the three months ended June 30, 2025 compared to the prior year period. The increase in Contribution ex-TAC was primarily due to the growth in CTV and mobile.

Current wording

Contribution ex-TAC increased $17.4 million, or 12%, for the three months ended September 30, 2025 compared to the prior year period. The increase in Contribution ex-TAC was primarily due to the growth in CTV and mobile.

Previous wording

Contribution ex-TAC increased $30.5 million, or 11%, for the six months ended June 30, 2025 compared to the prior year period. The increase in Contribution ex-TAC was primarily due to the growth drivers described above.

Current wording

Contribution ex-TAC increased $47.8 million, or 11%, for the nine months ended September 30, 2025 compared to the prior year period. The increase in Contribution ex-TAC was primarily due to the growth drivers described above.

Previous wording

We define Adjusted EBITDA as net income (loss) adjusted to exclude stock-based compensation expense, depreciation and amortization, including amortization of acquired intangible assets, impairment charges, interest income or expense, provision (benefit) for income taxes, and certain cash and non-cash based income or expenses that we do not consider indicative of our core operating performance, including, but not limited to foreign exchange gains and losses, acquisition and related items, gains or losses on extinguishment of debt, other debt refinancing expenses, and non-operational real estate and other expenses (income), net. We believe Adjusted EBITDA is useful to investors in evaluating our performance for the following reasons:

Current wording

We define Adjusted EBITDA as net income (loss) adjusted to exclude stock-based compensation expense, depreciation and amortization, including amortization of acquired intangible assets, impairment charges, interest income or expense, provision (benefit) for income taxes, and certain cash and non-cash based income or expenses that we do not consider indicative of our core operating performance, including, but not limited to foreign exchange gains and losses, acquisition and related items, gains or losses on extinguishment of debt, other debt refinancing expenses, certain litigation expenses, and non-operational real estate and other expenses (income), net. We believe Adjusted EBITDA is useful to investors in evaluating our performance for the following reasons:

Previous wording

•Adjusted EBITDA does not reflect certain non-operational real estate and other (income) and expense, net, which consists of transactions or expenses that are typically by nature non-operating, one-time items, or unrelated to our core operations.

Current wording

•Adjusted EBITDA does not reflect certain non-operational real estate and other (income) and expense, net.

Previous wording

The following table presents a reconciliation of net income (loss), the most comparable GAAP measure, to Adjusted EBITDA for the three and six months ended June 30, 2025 and 2024:

Current wording

The following table presents a reconciliation of net income (loss), the most comparable GAAP measure, to Adjusted EBITDA for the three and nine months ended September 30, 2025 and 2024:

Previous wording

Adjusted EBITDA increased by $9.6 million during the three months ended June 30, 2025 compared to the prior year period and increased by $21.4 million during the six months ended June 30, 2025 compared to the prior year period.

Current wording

Adjusted EBITDA increased by $6.6 million during the three months ended September 30, 2025 compared to the prior year period and increased by $28.0 million during the nine months ended September 30, 2025 compared to the prior year period.

Previous wording

As of June 30, 2025, we had cash and cash equivalents of $426.0 million, of which $67.8 million was held in foreign currency denominated cash accounts, and an aggregate gross principal amount of $567.3 million of indebtedness outstanding under our 2024 Term Loan B Facility (as defined below) and our Convertible Senior Notes (as defined below). In addition, we were party to a $175.0 million 2024 Revolving Credit Facility (as defined below), of which approximately $3.7 million was assigned to outstanding but undrawn letters of credit. See "Capital Resources" below for further information about our outstanding debt.

Current wording

As of September 30, 2025, we had cash and cash equivalents of $482.1 million, of which $69.1 million was held in foreign currency denominated cash accounts, and an aggregate gross principal amount of $566.4 million of indebtedness outstanding under our 2024 Term Loan B Facility (as defined below) and our Convertible Senior Notes (as defined below). In addition, we were party to a $175.0 million 2024 Revolving Credit Facility (as defined below), of which approximately $4.0 million was assigned to outstanding but undrawn letters of credit. See "Capital Resources" below for further information about our outstanding debt.

Previous wording

Our principal cash requirements for the twelve-month period following this report primarily consists of personnel costs, contractual payment obligations, including office leases, cloud hosting, data center, and bandwidth expenses, capital expenditures, payment of interest, required principal payments on our Convertible Senior Notes, which mature in March 2026, and our 2024 Term Loan B Facility, cash outlays for income taxes, and cash requirements to fund working capital. In the longer term, we would expect to have similar cash requirements, excluding the one-time payment related to the maturity of our Convertible Senior Notes, with increases in absolute dollars associated with the continued growth of our business and expansion of operations. See "Contractual Obligations and Known Future Cash Requirements" for a further discussion of our known material contractual obligations.

Current wording

Our principal cash requirements for the twelve-month period following this report primarily consist of personnel costs, contractual payment obligations, including office leases, cloud hosting, data center, and bandwidth expenses, capital expenditures, payment of interest, required principal payments on our Convertible Senior Notes, which mature in March 2026, and our 2024 Term Loan B Facility, cash outlays for income taxes, and cash requirements to fund working capital. In the longer term, we would expect to have similar cash requirements, excluding the one-time payment related to the maturity of our Convertible Senior Notes, with increases in absolute dollars associated with the continued growth of our business and expansion of operations. See "Contractual Obligations and Known Future Cash Requirements" for a further discussion of our known material contractual obligations.

Previous wording

On February 1, 2024, the Board of Directors approved a new repurchase plan (the "February 2024 Repurchase Plan"), which fully replaced the prior repurchase plan, pursuant to which we are authorized to repurchase common stock or Convertible Senior Notes, with an aggregate market value of up to $125.0 million, through February 1, 2026. During six months ended June 30, 2025, we repurchased 1,869,700 shares of the Company's common stock for an aggregate amount of $22.9 million. As of June 30, 2025, $87.5 million remains available under the February 2024 Repurchase Plan.

Current wording

On February 1, 2024, the Board of Directors approved a new repurchase plan (the "February 2024 Repurchase Plan"), which fully replaced the prior repurchase plan, pursuant to which we are authorized to repurchase common stock or Convertible Senior Notes, with an aggregate market value of up to $125.0 million, through February 1, 2026. During nine months ended September 30, 2025, we repurchased 1,869,700 shares of the Company's common stock for an aggregate amount of $22.9 million. As of September 30, 2025, $87.5 million remains available under the February 2024 Repurchase Plan.

Previous wording

Our working capital needs and cash conversion cycle, which is influenced by seasonality and by the mix of terms among our buyers and sellers and which may be negatively impacted as a result of pandemics, inflationary, recessionary and other macroeconomic challenges, can have large fluctuations due to the timing of receipts from buyers and timing of disbursements to sellers. In addition, in the event a buyer defaults on payment, we may still be required to pay sellers for the inventory purchased. The impacts from changes in working capital and capital expenditures can significantly impact our cash flows and therefore, our liquidity during any period presented.

Current wording

Our working capital needs and cash conversion cycle, which is influenced by seasonality and by the mix of terms among our buyers and sellers and which may be negatively impacted as a result of pandemics, inflationary, recessionary and other macroeconomic challenges, can have large fluctuations due to the timing of receipts from buyers and timing of disbursements to sellers. In addition, in the event a buyer defaults on payment, we may still be required to pay sellers for the inventory purchased.

Previous wording

In March 2021, we sold convertible senior notes ("Convertible Senior Notes") for gross proceeds of $400.0 million. The Convertible Senior Notes are senior, unsecured obligations with interest payable semi-annually in cash at a rate of 0.25% per annum in arrears on March 15 and September 15. The Convertible Senior Notes will mature on March 15, 2026, unless earlier converted, redeemed, or repurchased. The initial conversion rate is 15.6539 shares per $1,000 principal amount of notes, which represents an initial conversion price of approximately $63.88 per share of the Company’s common stock and is subject to adjustment as described in the Offering Memorandum. At June 30, 2025, the balance of the Convertible Senior Notes was $204.2 million, net of unamortized debt issuance costs of $0.8 million and is reflected as debt, current, net of debt issuance costs in the Company’s condensed balance sheet.

Current wording

In March 2021, we sold convertible senior notes ("Convertible Senior Notes") for gross proceeds of $400.0 million. The Convertible Senior Notes are senior, unsecured obligations with interest payable semi-annually in cash at a rate of 0.25% per annum in arrears on March 15 and September 15. The Convertible Senior Notes will mature on March 15, 2026, unless earlier converted, redeemed, or repurchased. The initial conversion rate is 15.6539 shares per $1,000 principal amount of notes, which represents an initial conversion price of approximately $63.88 per share of the Company’s common stock and is subject to adjustment as described in the Offering Memorandum. At September 30, 2025, the balance of the Convertible Senior Notes was $204.5 million, net of unamortized debt issuance costs of $0.5 million and is reflected as debt, current, net of debt issuance costs in the Company’s condensed balance sheet.

Previous wording

At June 30, 2025, the balance of the 2024 Term Loan B Facility was $352.2 million, net of unamortized debt discount and debt issuance costs of $10.1 million, and amounts available under the 2024 Revolving Credit Facility were $171.3 million, net of letters of credit outstanding in the amount of $3.7 million.

Current wording

At September 30, 2025, the balance of the 2024 Term Loan B Facility was $351.7 million, net of unamortized debt discount and debt issuance costs of $9.6 million, and 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.

Previous wording

For the six months ended June 30, 2025, net cash provided by operating activities was $21.1 million compared to $29.2 million for the six months ended June 30, 2024. Our operating activities included our net income of $1.5 million and non-cash adjustments of $78.7 million for the six months ended June 30, 2025 and net loss of $18.8 million offset by non-cash adjustments of $70.7 million for the six months ended June 30, 2024. Net changes in our working capital resulted in $59.1 million and $22.7 million of cash used in operating activities for the six months ended June 30, 2025 and June 30, 2024, respectively. The net changes in working capital for both periods presented are primarily due to the timing of cash receipts from buyers and the timing of payments to sellers.

Current wording

For the nine months ended September 30, 2025, net cash provided by operating activities was $107.7 million compared to $120.5 million for the nine months ended September 30, 2024. Our operating activities included our net income of $21.6 million and non-cash adjustments of $105.8 million for the nine months ended September 30, 2025 and net loss of $13.6 million offset by non-cash adjustments of $107.7 million for the nine months ended September 30, 2024. Net changes in our working capital resulted in $19.7 million of cash used in operating activities and $26.4 million of cash provided by operating activities for the nine months ended September 30, 2025 and September 30, 2024, respectively. The net changes in working capital for both periods presented are primarily due to the timing of cash receipts from buyers and the timing of payments to sellers.

Previous wording

During the six months ended June 30, 2025 and 2024, our investing activities used net cash of $33.3 million and $22.6 million, respectively. During the six months ended June 30, 2025 and 2024, we used cash for purchases of property and equipment of $26.9 million and $15.0 million, respectively, and used cash for investments in our internally developed software of $6.4 million and $7.5 million, respectively.

Current wording

During the nine months ended September 30, 2025 and 2024, our investing activities used net cash of $63.7 million and $40.7 million, respectively. During the nine months ended September 30, 2025 and 2024, we used cash for purchases of property and equipment of $45.1 million and $29.1 million, respectively, and used cash for investments in our internally developed software of $10.1 million and $11.6 million, respectively. During the nine months ended September 30, 2025, we also used cash of $8.1 million to acquire Streamrai, Inc. (the "Streamr.ai Acquisition").