MAGNITE, INC.

Previous wording

Over the past several years, we have made a number of investments to build what we believe is the leading independent programmatic CTV platform, including our 2021 acquisitions of SpotX, a leading CTV supply side platform, and SpringServe, a leading ad server for CTV. We believe these transactions are highly strategic, as the combination of our SSP and ad server allows us to offer publishers an independent full-stack solution that works across their entire video advertising business, for both programmatic and directly sold inventory, to manage yield and drive value. As a result of our investments, CTV has become the biggest growth driver of our business, with revenue growing 13% and Contribution ex-TAC growing 19% year over year from 2023 to 2024.

Current wording

Over the past several years, we have made a number of investments to build what we believe is the leading independent programmatic CTV platform, including our 2021 acquisitions of SpotX, a leading CTV supply side platform, and SpringServe, a leading ad server for CTV. We believe these transactions are highly strategic, as the combination of our SSP and ad server allows us to offer publishers an independent full-stack solution that works across their entire video advertising business, for both programmatic and directly sold inventory, to manage yield and drive value. As a result of our investments, CTV has become the biggest growth driver of our business, with revenue growing 9% and Contribution ex-TAC growing 17% year-over-year from 2024 to 2025.

Previous wording

We believe that we are well positioned to take advantage of a number of favorable market trends in CTV. In particular, as the pace of consumer adoption has accelerated and the streaming market has proliferated, the largest streaming publishers have adopted ad-supported models leading to a significant increase in the amount of CTV inventory available for advertisers.

Current wording

We believe that we are well positioned to take advantage of a number of favorable market trends in CTV. In particular, as the pace of adoption has accelerated and the streaming market has proliferated, the largest streaming publishers have adopted ad-supported models leading to a significant increase in the amount of CTV inventory available for advertisers.

Previous wording

As the industry matures, we anticipate that market dynamics will lead CTV sellers to make a greater percentage of inventory available through biddable auction environments in order to attract a broader set of advertisers that have not historically advertised on linear TV. We believe that this shift, if it were to occur, would likely be beneficial to our CTV growth as biddable transactions tend to require a higher level of service and therefore carry a higher take-rate compared to reserve auctions. At the same time, we expect CTV advertisers that have historically transacted on our platform through managed service insertion orders to continue to shift budgets towards more automated solutions, which tend to carry a lower take rate; and as a result, we expect transactions through managed service insertion orders to become a smaller component of our overall business.

Current wording

As the industry matures, we anticipate that market dynamics will lead CTV sellers to make a greater percentage of inventory available through biddable auction environments with multiple buyers rather than programmatic guaranteed, in order to accommodate a broader set of advertisers that have not historically advertised on linear TV. We believe that this shift, if it were to occur, would likely be beneficial to our CTV growth as biddable transactions tend to require a higher level of service and therefore carry a higher take-rate compared to reserve auctions. At the same time, we expect CTV advertisers that have historically transacted on our platform through managed service insertion orders to continue to shift budgets towards more automated solutions, which tend to carry a lower take rate; and as a result, we expect transactions through managed service insertion orders to become a smaller component of our overall business.

Previous wording

In addition to CTV, we track mobile and desktop channels. We expect our revenue and Contribution ex-TAC from each of these channels to grow at a slower rate compared to CTV, with mobile expected to grow at a higher rate than desktop. As such, we expect our desktop business to continue to decline as an overall percentage of our revenue in future periods; however, we expect that it will continue to represent a significant percentage of our revenue in the near term. Therefore, the mix of our desktop business will continue to have a negative effect on our overall growth rate.

Current wording

In addition to CTV, we track mobile and desktop channels. We expect our revenue and Contribution ex-TAC from each of these channels to grow at a slower rate compared to CTV, with mobile expected to grow at a higher rate than desktop. In particular, we believe growth rates for open web display will be lower across both mobile and desktop, consistent with the overall decline in search referral traffic. We expect our desktop and mobile web business to continue to decline as an overall percentage of our revenue in future periods; however, we expect that contributions from these channels will continue to represent a significant percentage of our revenue in the near term. Therefore, the mix of our desktop and mobile web business will continue to have a negative effect on our overall growth rate.

Previous wording

Our mobile channel consists of mobile web and mobile applications, with mobile applications expected to be a larger driver of our growth in future periods. A significant portion of the mobile application inventory on our platform is made available through third-party mobile technology platforms or aggregators, rather than application developers themselves. Accordingly, we are focused on expanding our relationships with these third parties in order to increase our access to inventory. Other important growth initiatives for our mobile and desktop channels include: bringing additional advertising demand to sellers through SPO and other buyer initiatives; increasing the operational efficiency of our platform to reduce costs for us as well as the process costs for buyers; developing alternative identity solutions to increase the value of seller inventory, as the industry shifts away from third-party cookies; and leveraging our machine learning and big data set to improve traffic shaping and generate higher-quality matching between buyers and sellers.

Current wording

Our mobile channel consists of mobile web and mobile applications, with mobile applications expected to be a larger driver of our growth in future periods. A significant portion of the mobile application inventory on our platform is made available through third-party mobile technology platforms or aggregators, rather than application developers themselves. Accordingly, we are focused on expanding our relationships with these third parties in order to increase our access to inventory. Other important growth initiatives for our mobile and desktop channels include: bringing additional advertising demand to sellers through SPO and other buyer initiatives; increasing the operational efficiency of our platform to reduce costs for us as well as the process costs for buyers; developing alternative identity solutions to increase the value of seller inventory, as the industry shifts away from third-party cookies; leveraging our machine learning and big data set to improve traffic shaping and generate higher-quality matching between buyers and sellers; and increasing adoption of our proprietary SDK for mobile in-app advertising.

Previous wording

We anticipate that our operating expenses will continue to increase in the foreseeable future as we invest in technology and development to enhance our product features, in particular CTV, as well as sales and marketing to acquire new clients and reinforce our relationships with existing clients. At the same time, we are making additional investments in on-prem data centers to support a higher percentage of CTV transactions, with the goal of increasing the operational efficiency of our platform in order to realize long-term cost savings.

Current wording

We anticipate that our operating expenses will continue to increase in absolute dollars for the foreseeable future as we invest in technology and development to enhance our product features, in particular CTV, as well as sales and marketing to acquire new clients and reinforce our relationships with existing clients. At the same time, we are making additional investments in on-prem data centers to support a higher percentage of CTV transactions, with the goal of increasing the operational efficiency of our platform in order to realize long-term cost savings.

Previous wording

Macroeconomic challenges, such as inflation, the interest rate environment, global conflicts, the risk of a recession, and labor strikes, generally have a negative impact on ad budgets, which in turn may lead to slower ad spend growth through our platform. Any worsening of macroeconomic conditions in future periods would likely have a negative effect on our financial results, the magnitude of which is difficult to predict. In addition, continued inflation could result in an increase in our cost base relative to our revenue.

Current wording

Macroeconomic challenges, such as inflation, tariffs and trade wars, the interest rate environment, global conflicts, the risk of a recession, and labor strikes, generally have a negative impact on ad budgets, which in turn may lead to slower ad spend growth through our platform. Any worsening of macroeconomic conditions in future periods would likely have a negative effect on our financial results, the magnitude of which is difficult to predict. In addition, inflation and tariffs could result in an increase in our cost base relative to our revenue and increased cost associated with our infrastructure investments. Moreover, in response to U.S. tariffs, foreign countries in which we operate may enact additional or new taxes that are applicable to our business.

Previous wording

We generate revenue from the use of our platform for the purchase and sale of digital advertising inventory. Generally, our revenue is based on a percentage of the ad spend that runs through our platform, although for certain clients, services, or transaction types, we may receive a fixed CPM for each impression sold, and for advertising campaigns that are transacted through insertion orders, we earn revenue based on the full amount of ad spend that runs through our platform. In addition, we may receive certain fixed monthly fees for the use of our platform or products. We recognize revenue upon the fulfillment of our contractual obligations in connection with a completed transaction, subject to satisfying all other revenue recognition criteria. For the majority of transactions executed through our platform, we act as an agent on behalf of the publisher that is monetizing its inventory, and revenue is recognized net of any advertising inventory costs that we remit to sellers. With respect to certain revenue streams for managed advertising campaigns that are transacted through insertion orders, we report revenue on a gross basis, based primarily on our determination that the Company acts as the primary obligor in the delivery of advertising campaigns for our buyer clients with respect to such transactions.

Current wording

We generate revenue from the use of our platform for the purchase and sale of digital advertising inventory. Generally, our revenue is based on a percentage of the ad spend that runs through our platform, although for certain clients, services, or transaction types, we may receive a fixed CPM for each impression sold, and for advertising campaigns that are transacted through insertion orders, we earn revenue based on the full amount of ad spend that runs through our platform. In addition, we may receive certain fixed monthly fees for the use of our platform or products. We recognize revenue upon the fulfillment of our contractual obligations in connection with a completed transaction, subject to satisfying all other revenue recognition criteria. For the majority of transactions executed through our platform, we act as an agent on behalf of the publisher that is monetizing its inventory, and revenue is recognized net of any advertising inventory costs that we remit to sellers. With respect to managed advertising campaigns that are transacted through insertion orders, we report revenue on a gross basis, based primarily on our determination that the Company acts as the primary obligor in the delivery of advertising campaigns for our buyer clients with respect to such transactions.

Previous wording

For the years ended December 31, 2024, 2023, and 2022, our revenue reported on a gross basis was 14%, 18%, and 18% of total revenue for the respective periods. 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 Note 2 of the "Notes to the Consolidated Financial Statements."

Current wording

Our revenue recognition policies are discussed in more detail in Note 2 of the "Notes to the Consolidated Financial Statements."

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 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 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

Merger, Acquisition, and Restructuring Costs. Our merger, acquisition, and restructuring costs primarily consists of professional service fees associated with merger and acquisition activities, cash-based employee termination costs, related stock-based compensation charges, and other restructuring activities, including facility closures, relocation costs, contract termination costs, and impairment costs of abandoned technology associated with restructuring activities.

Current wording

Merger, Acquisition, and Restructuring Costs. Our merger, acquisition, and restructuring costs primarily consist of professional service fees associated with merger and acquisition activities, cash-based employee termination costs, related stock-based compensation charges, and other restructuring activities, including facility closures, relocation costs, contract termination costs, and impairment costs of abandoned technology associated with restructuring activities.

Previous wording

Foreign Currency Exchange (Gain) Loss, Net. Foreign currency exchange (gain) loss, net consists of gains and losses on foreign currency transactions and remeasurement of monetary assets and liabilities on our balance sheet denominated in foreign currencies. Foreign currency monetary assets and liabilities primarily consists of cash and cash equivalents, accounts receivable, accounts payable, and various intercompany balances held between our subsidiaries. Our primary foreign currency exposures are currencies other than the U.S. Dollar, principally the Australian Dollar, British Pound, Canadian Dollar, Euro, Japanese Yen, and New Zealand Dollar.

Current wording

Foreign Currency Exchange (Gain) Loss, Net. Foreign currency exchange (gain) loss, net consists of gains and losses on foreign currency transactions and remeasurement of monetary assets and liabilities on our balance sheet denominated in foreign currencies. Foreign currency monetary assets and liabilities primarily consists of cash and cash equivalents, accounts receivable, accounts payable, and various intercompany balances held between our subsidiaries. Our primary foreign currency exposures are currencies other than the U.S. Dollar, principally the Australian Dollar, British Pound, Euro, Japanese Yen, and New Zealand Dollar.

Previous wording

Cost of revenue decreased $151.1 million, or 37%, for the year ended December 31, 2024 compared to the prior year, primarily due to decreases of $164.4 million in depreciation and amortization, which was primarily driven by certain acquired intangible assets becoming fully amortized in the third quarter of 2023. These decreases were partially offset by increases of $11.8 million in cloud hosting, data center, and bandwidth expenses, primarily due to revenue growth and an associated increase in the volume of transactions processed on our platform.

Current wording

Cost of revenue decreased$151.1 million, or 37%, for the year ended December 31, 2024 compared to the prior year, primarily due to decreases of $164.4 million in depreciation and amortization, which was primarily driven by certain acquired intangible assets becoming fully amortized in the third quarter of 2023. These decreases were partially offset by increases of $11.8 million in cloud hosting, data center, and bandwidth expenses, primarily due to revenue growth and an associated increase in the volume of transactions processed on our platform.

Previous wording

On January 1, 2024, we extended theestimated useful lives of our network hardware assets from three years to five years, which was due to actual and expected longer refresh cycles for these assets. Based on the related asset balance as of December 31, 2023 and those placed in service during theyear ended December 31, 2024, the effect of this change reduced depreciation expense by$12.6 million for the full year ending December 31, 2024 when compared to what depreciation expense would have been based on the original expected useful lives of three years.

Current wording

On January 1, 2024, we extended the estimated useful lives of our network hardware assets from three years to five years, which was due to actual and expected longer refresh cycles for these assets. Based on the related asset balance as of December 31, 2023 and those placed in service during the year ended December 31, 2024, the effect of this change reduced depreciation expense by $12.6 million for the full year ending December 31, 2024 when compared to what depreciation expense would have been based on the original expected useful lives of three years.

Previous wording

Cost of revenue may fluctuate from quarter to quarter and period to period, on an absolute dollar basis and as a percentage of revenue, depending on revenue levels and the volume of transactions we process supporting those revenues, and the timing and amounts of depreciation and amortization of equipment and software.

Current wording

Cost of revenue may fluctuate from quarter to quarter and period to period, on an absolute dollar basis and as a percentage of revenue, depending on revenue levels and the volume of transactions we process supporting those revenues, whether transactions are reported on a gross or net basis, and the timing and amounts of depreciation and amortization of equipment and software.

Previous wording

Sales and marketing expenses decreased $26.1 million, or 13%, for the year ended December 31, 2023 compared to the prior year, primarily due to decreases of $44.3 million in depreciation and amortization, which were primarily driven by certain acquired intangible assets becoming fully amortized in 2022 and 2023. These decreases were partially offset by increases of $15.3 million of personnel costs.

Current wording

Sales and marketing expenses increased $5.5 million, or 3%, for the year ended December 31, 2025 compared to the prior year, primarily due to increases of $10.2 million in personnel costs. These increases were partially offset by decreases of $6.6 million in depreciation and amortization, which were primarily driven by certain acquired intangible assets becoming fully amortized in 2025.

Previous wording

Sales and marketing expenses decreased $7.8 million, or 5%, for the year ended December 31, 2024 compared to the prior year, primarily due to decreases of $17.4 million in depreciation and amortization, which were primarily driven by certain acquired intangible assets becoming fully amortized in 2023. These decreases were partially offset by increases of $9.5 million in personnel costs.

Current wording

Sales and marketing expenses decreased $7.8 million, or 5%, for the year ended December 31, 2024 compared to the prior year, primarily due to decreases of $17.4 million in depreciation and amortization, which were primarily driven by certain acquired intangible assets becoming fully amortized in 2023. These decreases were partially offset by increases of $9.5 million of personnel costs.

Previous wording

General and administrative expenses increased $7.8 million, or 9%, for the year ended December 31, 2024 compared to the prior year, primarily due to increases of $5.9 million in personnel costs, $4.1 million in expenses associated with refinancing our 2021 Credit Agreement (defined below) in February 2024 and repricing our 2024 Term Loan B Facility (defined below) in September 2024, and $3.7 million in insurance and business taxes. These increases were partially offset by decreases of $4.1 million in bad debt expense and $2.7 million in facilities-related costs. The higher bad debt expense in 2023 as compared to 2024 was primarily due to a buyer defaulting on payment obligations and filing for bankruptcy, resulting in bad debt expense of $4.2 million.

Current wording

General and administrative expenses increased by $7.8 million, or 9%, for the year ended December 31, 2024 compared to the prior year, primarily due to increases of $5.9 million in personnel costs, $4.1 million in expenses associated with refinancing our 2021 Credit Agreement (defined below) in February 2024 and repricing our 2024 Term Loan B Facility (defined below) in September 2024, and $3.7 million in insurance and business taxes. These increases were partially offset by decreases of $4.1 million in bad debt expense and $2.7 million in facilities-related costs. The higher bad debt expense in 2023 as compared to 2024 was primarily due to a buyer defaulting on payment obligations and filing for bankruptcy, resulting in bad debt expense of $4.2 million.

Previous wording

We did not incur any merger, acquisition, and restructuring costs for the year ended December 31, 2024. We incurred merger, acquisition, and restructuring costs of $7.5 million and $7.5 million during the years ended December 31, 2023 and 2022, respectively, primarily related to the acquisitions of SpotX, Inc. and SpringServe, LLC, which were completed on April 30, 2021 and July 1, 2021, respectively.

Current wording

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

Previous wording

In 2023, these costs primarily included $3.4 million of severance related expenses, $2.2 million of facilities related loss contracts, and $1.4 million of exit costs, all due to restructuring activities as a result of consolidating our legacy CTV and SpotX CTV platforms following the SpotX acquisition.

Current wording

For the year ended December 31, 2023, we incurred $7.5 million of merger, acquisition, and restructuring costs consisting of $3.4 million of severance related expenses, $2.2 million of facilities related loss contracts, and $1.4 million of exit costs all due to restructuring activities as a result of consolidating our legacy CTV and SpotX CTV platforms following the SpotX, Inc. acquisition in 2021.

Previous wording

Interest expense, net decreased by $5.3 million during the year ended December 31, 2024 compared to the prior year. The net decrease is primarily due to an increase in interest income and a decrease in interest expense as a result of lower Convertible Senior Notes (defined below) outstanding throughout 2024 as compared to the prior year period and the lower interest incurred under the 2024 Term Loan B Facility (defined below) compared to the 2021 Term Loan B Facility (defined below).

Current wording

Interest expense, net decreased by $5.3 million during the year ended December 31, 2024 compared to the prior year primarily due to an increase in interest income and a decrease in interest expense as a result of lower Convertible Senior Notes (defined below) outstanding throughout 2024 as compared to the prior year period and the lower interest incurred under the 2024 Term Loan B Facility (defined below) compared to the 2021 Term Loan B Facility (defined below).

Previous wording

Foreign exchange (gain) loss, net changed by $7.0 million during the year ended December 31, 2024 compared to the prior year, 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. Foreign exchange (gain) loss, net changed by $3.1 million during the year ended December 31, 2023 compared to the prior year, for the same reasons above.

Current wording

Foreign exchange (gain) loss, net changed by $12.1 million during the year ended December 31, 2025 compared to the prior year, 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. Foreign exchange (gain) loss, net changed by $7.0 million during the year ended December 31, 2024 compared to the prior year, for the same reasons above.

Previous wording

The loss on extinguishment of debt of $7.7 million for the year ended December 31, 2024 was due to the refinancing of our 2021 Credit Agreement (defined below) in February 2024 and the repricing of our 2024 Term Loan B Facility (defined below) in September 2024, which are further discussed below. The gain on extinguishment of debt of $26.5 million for the year ended December 31, 2023 was due to the repurchase of portions of our Convertible Senior Notes (defined below).

Current wording

The loss on extinguishment of debt of $2.2 million for the year ended December 31, 2025 was due to the March 2025 repricing of our 2024 Term Loan B Facility (defined below) and the loss on extinguishment of debt of $7.7 million for the year ended December 31, 2024 was due to the refinancing of our 2021 Credit Agreement (defined below) in February 2024 and the repricing of our 2024 Term Loan B Facility (defined below) in September 2024. Our refinancing and repricing activities are further discussed below. The gain on extinguishment of debt of $26.5 million for the year ended December 31, 2023 was due to the repurchase of portions of our Convertible Senior Notes (defined below).

Previous wording

We recorded an income tax expense of $3.7 million for the year ended December 31, 2024 compared to an income tax expense of $1.6 million and an income tax benefit $5.3 million for the years ended December 31, 2023 and 2022, respectively. The income tax expense for the year ended December 31, 2024 was primarily the result of our ability to recognize DTAs subject to the domestic valuation allowance and the state and foreign income tax provisions. We continue to maintain a valuation allowance for our domestic deferred tax assets.

Current wording

We recorded an income tax benefit of $74.0 million for the year ended December 31, 2025 compared to an income tax expense of $3.7 million and $1.6 million for the years ended December 31, 2024 and 2023, respectively. The income tax benefit for the year ended December 31, 2025 was primarily driven by the release of our U.S. federal valuation allowances, the majority of our state valuation allowances, and certain of our foreign valuation allowances on deferred tax assets. The release was supported by sustained profitability and our cumulative three-year pre-tax income position, together with forecasts of future taxable income. As a result of the valuation allowance release, our effective tax rate for 2025 differs significantly from prior periods. A material valuation allowance release is not expected to recur in future periods.

Previous wording

In addition to our GAAP results, we review non-GAAP financial measures, including Contribution ex-TAC and Adjusted EBITDA, to help us evaluate our business on a consistent basis, measure our performance, identify trends affecting our business, establish budgets, measure the effectiveness of investments in our technology and development and sales and marketing, and assess our operational efficiencies. Our non-GAAP financial measures are discussed below. Revenue and net income (loss) are discussed above under the headings "Components of Our Results of Operations" and "Results of Operations."

Current wording

In addition to our GAAP results, we review non-GAAP financial measures, including Contribution ex-TAC and Adjusted EBITDA, to help us evaluate our business on a consistent basis, measure our performance, identify trends affecting our business, establish budgets, measure the effectiveness of investments in our technology and development and sales and marketing, and assess our operational efficiencies. Our non-GAAP financial measures are discussed below. Revenue, cost of revenue, and net income (loss) are discussed above under the headings "Components of Our Results of Operations" and "Results of Operations."

Previous wording

Contribution ex-TAC increased $57.8 million, or 11%, for the year ended December 31, 2024 compared to the year ended December 31, 2023. The increase in Contribution ex-TAC was primarily due to the growth drivers described above for revenue.

Current wording

Contribution ex-TAC increased $57.8 million, or 11%, for the year ended December 31, 2024 compared to the year ended December 31, 2023.

Previous wording

We define Adjusted EBITDA as net income (loss) adjusted to exclude stock-based compensation expense, depreciation and amortization, amortization of acquired intangible assets, impairment charges, interest income or expense, and other 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, non-operational real estate and other expenses (income), net, and provision (benefit) for income taxes. 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 cash and non-cash charges related to acquisition and related items, such as amortization of acquired intangible assets, merger, acquisition, or restructuring related severance costs, and changes in the fair value of contingent consideration.

Current wording

•Adjusted EBITDA does not reflect certain cash and non-cash charges related to acquisition and related items, such as amortization of acquired intangible assets, merger, acquisition, or restructuring related severance costs, certain transaction expenses, and changes in the fair value of contingent consideration.

Previous wording

•Adjusted EBITDA does not reflect cash and non-cash charges related to certain financing transactions such as gains or losses on extinguishment of debt or other debt refinancing expenses.

Current wording

•Adjusted EBITDA does not reflect cash and non-cash charges related to interest income and interest expense and certain financing transactions such as gains or losses on extinguishment of debt or other debt refinancing expenses.

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

Adjusted EBITDA increased by $25.5 million during the year ended December 31, 2024 compared to the year ended December 31, 2023, primarily due to increases in revenue, described above, which were partially offset by increases in expenses to support this revenue growth. Refer to discussion in section "Comparison of the Years Ended December 31, 2024, 2023, and 2022."

Current wording

Adjusted EBITDA increased by $35.3 million during the year ended December 31, 2025 compared to the year ended December 31, 2024 and increased by $25.5 million during the year ended December 31, 2024 compared to the year ended December 31, 2023.

Previous wording

At December 31, 2024, we had cash and cash equivalents of $483.2 million, of which $54.4 million was held in foreign currency denominated cash accounts, and an aggregate gross principal amount of $568.2 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 $5.2 million was assigned to outstanding but undrawn letters of credit. See "Capital Resources" below for further information about our outstanding debt.

Current wording

At December 31, 2025, we had cash and cash equivalents of $553.4 million, of which $74.5 million was held in foreign currency denominated cash and cash equivalents accounts, and an aggregate gross principal amount of $565.5 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, data center costs and cloud hosting costs, capital expenditures, payment of interest and required principal payments on our Convertible Senior Notes 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, 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 known 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. We plan to repay the outstanding Convertible Senior Notes upon maturity with our cash and cash equivalents balance. 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 the year ended December 31, 2024, we repurchased 1,160,496 shares of the Company's common stock for an aggregate amount of $14.6 million. As of December 31, 2024, $110.4 million remains available under the February 2024 Repurchase Plan.

Current wording

On February 1, 2024, the Board of Directors approved a repurchase plan (the "February 2024 Repurchase Plan"), which fully replaced the prior repurchase plan, pursuant to which we were 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 the year ended December 31, 2025, we repurchased 3.4 million shares of the Company's common stock for an aggregate amount of $46.3 million. As of December 31, 2025, $64.1 million remained available under the February 2024 Repurchase Plan. We repurchased 33,800 shares in

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 December 31, 2024, the balance of the Convertible Senior Notes was $203.6 million, net of unamortized debt issuance costs of $1.4 million.

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 December 31, 2025, the balance of the Convertible Senior Notes was $204.8 million, net of unamortized debt issuance costs of $0.3 million, and was reflected as debt, current, net of debt issuance costs in the Company's balance sheet.

Previous wording

On September 18, 2024, we entered into Amendment No. 1 to the 2024 Credit Agreement ("Amendment No. 1"), which reduced the interest rate of the 2024 Term Loan B Facility by 75 basis points to Term SOFR plus a margin of 3.75% from the previous rate of Term SOFR plus a margin of 4.50%. The remaining terms of the 2024 Term Loan B Facility and the 2024 Revolving Credit Facility were substantially unchanged.

Current wording

On September 18, 2024, we entered into Amendment No. 1 to the 2024 Credit Agreement ("Amendment No. 1"), which reduced the interest rate of the 2024 Term Loan B Facility by 75 basis points to Term SOFR plus a margin of 3.75% from the previous rate of Term SOFR plus a margin of 4.50% and on March 18, 2025, we entered into Amendment No. 2 to the 2024 Credit Agreement ("Amendment No. 2"), which reduced the interest rate of the 2024 Term Loan B Facility by an additional 75 basis points to Term SOFR plus a margin of 3.00%. The remaining terms of the 2024 Term Loan B Facility and the 2024 Revolving Credit Facility were substantially unchanged by these amendments.

Previous wording

At December 31, 2024, the balance of the 2024 Term Loan B Facility was $350.1 million, net of unamortized debt discount and debt issuance costs of $13.1 million, and amounts available under the 2024 Revolving Credit Facility were $169.8 million, net of letters of credit outstanding in the amount of $5.2 million.

Current wording

At December 31, 2025, the balance of the 2024 Term Loan B Facility was $351.3 million, net of unamortized debt discount and debt issuance costs of $9.2 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

In the future, we may attempt to raise additional capital through the sale of equity securities or through equity-linked or debt financing arrangements. If we raise additional funds by issuing equity or equity-linked securities, the ownership of our existing stockholders may be diluted. If we raise additional financing by incurring indebtedness, we will be subject to increased fixed payment obligations and could also be subject to financial maintenance covenants, or restrictive covenants, such as limitations on our ability to incur additional debt, and other operating restrictions that could adversely impact our ability to conduct our business. Any future indebtedness we incur may result in terms that could be unfavorable to equity investors. An inability to raise additional capital could adversely affect our ability to achieve our business objectives.

Current wording

In the future, we may attempt to raise additional capital through the sale of equity securities or through equity-linked or debt financing arrangements. If we raise additional funds by issuing equity or equity-linked securities, the ownership of our existing stockholders may be diluted. If we raise additional financing by incurring indebtedness, we will be subject to increased fixed payment obligations and could also be subject to financial maintenance covenants, or restrictive covenants, such as limitations on our ability to incur additional debt, and other operating restrictions that could adversely impact our ability to conduct our business.