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; 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.

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 ("AI"); 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, outcomes, performance or achievements, or the timing thereof, 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, 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.

Current wording

We discuss many of these risks, uncertainties, and additional factors that could cause actual results, outcomes, or timing thereof, 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, 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 or outcomes 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

Our recently combined streaming SSP and ad server, which we refer to as SpringServe, offers CTV sellers a holistic solution to manage and monetize their entire portfolio of CTV ad inventory, across both programmatic and direct-sold video inventory. We provide sellers with a full suite of tools to protect the consumer viewing experience and brand safety expectations, while increasing revenue opportunities, including tools for mediation and yield optimization, forecasting tools, customized ad experiences and ad formats, frequency capping, and advanced podding logic. These tools are particularly important to CTV sellers who need to provide a TV-like viewing and advertising experience for consumers.

Current wording

In April 2025, we announced the introduction of our next generation SpringServe CTV platform, which combines the features and functionalities of our streaming SSP and ad server. Our SpringServe platform offers CTV sellers a holistic solution to manage and monetize their entire portfolio of CTV ad inventory, across both programmatic and direct-sold video inventory, while providing a more efficient connection for buyers to premium CTV supply. We provide sellers with a full suite of tools to protect the consumer viewing experience and brand safety expectations, while increasing revenue opportunities, including tools for mediation and yield optimization, forecasting and planning, customized ad experiences and formats, dynamic ad insertion to serve live streaming events and advanced podding logic to manage competitive separation. These tools are particularly important to CTV sellers who need to provide a TV-like viewing and advertising experience for consumers.

Previous wording

Buyers leverage our platform to reach their target audiences across thousands of sellers in a premium brand-safe environment, simplify order management and campaign tracking, and obtain actionable insights into audiences for their advertising. We believe that our scale, platform features, and omni-channel offering makes us an essential partner for buyers.

Current wording

Buyers leverage our platform to reach their target audiences across thousands of sellers in a premium brand-safe environment. We offer a suite of tools designed to help buyers discover and curate inventory, simplify workflow and execute on their campaign objectives in a cost effective manner. For instance, our ClearLine product provides buyers with direct access to premium CTV inventory and integrated curation capabilities, enabling buyers to build custom deal packages that can be enriched with high-fidelity first-party or third-party data. We believe that our scale, platform features, and omni-channel offering makes us an essential partner for buyers.

Previous wording

Due to the size and complexity of the digital advertising ecosystem and purchasing process, manual processes cannot effectively manage digital advertising inventory at scale. In addition, both buyers and sellers are demanding more transparency, better controls and more relevant insights from their advertising inventory purchases and sales. This has created a need for software solutions, known as programmatic advertising, that automate the process for planning, buying, selling and measuring digital advertising across screens. Programmatic transactions include biddable auctions, where multiple buyers bid against each other in a real-time auction for the right to purchase a publisher's inventory, as well as reserve auctions, where publishers establish direct deals or private marketplaces with select buyers. These reserve auctions may be "guaranteed," where a buyer has negotiated a pre-established price and volume with a seller, otherwise referred to as "programmatic guaranteed."

Current wording

Due to the size and complexity of the digital advertising ecosystem and purchasing process, manual processes cannot effectively manage digital advertising inventory at scale. In addition, both buyers and sellers are demanding more transparency, better controls and more relevant insights from their advertising inventory purchases and sales. This has created a need for software solutions, known as programmatic advertising, that automate the process for planning, buying, selling and measuring digital advertising across screens. Programmatic transactions include biddable auctions, where multiple buyers bid against each other in a real-time auction for the right to purchase a publisher's inventory, as well as reserve auctions, where publishers establish direct deals or private marketplaces with select buyers. These reserve auctions may also be guaranteed, where a buyer has negotiated a pre-established price and volume with a seller.

Previous wording

CTV viewership is growing rapidly and the pace of adoption is accelerating the transition of linear television to CTV programming. Initially, many streaming services were subscription based, but as the market has matured, the largest streaming publishers have adopted ad-supported models or hybrid models that rely on a combination of subscription fees and advertising. With the proliferation of CTV advertising inventory, we believe that brand advertisers looking to engage with streaming viewers will continue to shift their budgets from linear to CTV. Moreover, we believe that as the amount of CTV inventory continues to scale, CTV sellers will make a greater percentage of inventory available through biddable auction environments with multiple buyers rather than programmatic guaranteed, 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

CTV viewership is growing rapidly and the pace of adoption is accelerating the transition of linear television to CTV programming. Initially, many streaming services were subscription based, but as the market has matured, the largest streaming publishers have adopted ad-supported models or hybrid models that rely on a combination of subscription fees and advertising. With the proliferation of CTV advertising inventory, we believe that brand advertisers looking to engage with streaming viewers will continue to shift their budgets from linear to CTV. Moreover, we believe that as the amount of CTV inventory continues to scale, it will become increasingly more accessible to small and medium sized businesses, many of whom have no experience advertising on linear TV. We believe this transition is likely to be accelerated by advancements in AI, and in September 2025 we completed the acquisition of Streamrai, Inc. ("Streamer.ai"), a self-service platform that specializes in artificial intelligence tools that make CTV advertising accessible to small and medium-sized businesses. The Streamr.ai technology leverages generative AI to automate the creation of broadcast-quality video ads and streamline campaign setup, allowing advertisers to launch CTV campaigns in significantly less time and at significantly less cost than traditional methods.

Previous wording

We have made and plan to continue to make significant investments in technology, sales and support related to our CTV growth initiatives, and believe CTV will be a significant driver of our revenue growth for the foreseeable future. In April 2025, we announced the introduction of our next generation SpringServe CTV platform. The new SpringServe platform combines the features and functionalities of our streaming SSP and ad server to provide a more efficient connection for buyers to premium CTV supply, while offering powerful tools and streamlined workflow for sellers through a single user interface.

Current wording

We have made and plan to continue to make significant investments in technology, sales and support related to our CTV growth initiatives, and believe CTV will be the most significant driver of our revenue growth for the foreseeable future.

Previous wording

One of the advantages of programmatic advertising is that it enables more precise audience targeting, which is generally more effective and valuable for buyers than other types of advertising, resulting in better performance for buyers and more revenue for sellers. Historically, in desktop and mobile, one of the primary methods for delivering targeted advertisements was through the use of third-party cookies. However, in recent years the use of third-party cookies and other tracking technologies that collect user information have come under greater scrutiny due to privacy concerns, and a number of participants in the advertising technology ecosystem, in particular web browsers and device manufacturers, have taken steps to eliminate or restrict the use of these technologies.

Current wording

One of the advantages of programmatic advertising is that it enables more precise audience targeting, which is generally more effective and valuable for buyers than other types of advertising, resulting in better performance for buyers and more revenue for sellers. Historically, in desktop and mobile, one of the primary methods for delivering targeted advertisements was through the use of third-party cookies. However, in recent years the use of third-party cookies and other tracking technologies that collect user information have come under greater scrutiny due to privacy concerns, and a number of participants in the advertising technology ecosystem have taken steps to eliminate or restrict the use of these technologies.

Previous wording

We believe that our scale and expertise in CTV position us well to take a leadership position in advancing this shift to a first-party identity model and creating additional value opportunities for our clients. Accordingly, we have invested and intend to further invest in the development and enhancement of industry leading identity and audience solutions, such as our Magnite Curator Marketplace, a self-service platform that allows buyers to create custom marketplaces that include curated pools of inventory that are enriched with the buyer's first-party or third-party data.

Current wording

We believe that our scale and expertise in CTV position us well to take a leadership position in advancing this shift to a first-party identity model and creating additional value opportunities for our clients. Accordingly, we have invested and intend to further invest in the development and enhancement of industry leading identity and audience solutions, such as our Magnite Curator Marketplace, a self-service solution integrated within ClearLine. The Magnite Curator Marketplace allows the creation of custom deal packages for buyers that include curated pools of premium inventory that can be enriched with the curator's first-party or third-party data.

Previous 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.

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, as well as brands and DSPs, 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

We believe we are well positioned to benefit from SPO in the long run as a result of our transparency, our broad and unique inventory supply across all channels and formats, buyer tools, such as our ClearLine product offering and agency marketplaces, traffic filtering technology that reduces the cost of working with us, and brand safety measures.

Current wording

We believe we are well positioned to benefit from SPO in the long run as a result of our transparency, our broad and unique inventory supply across all channels and formats, buyer tools, such as our ClearLine product offering and buyer marketplaces, traffic filtering technology that reduces the cost of working with us, and brand safety measures.

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 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.

Current wording

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 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.

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 held closing arguments in November 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.

Previous wording

On September 16, 2025, in light of the Court's decision, we filed a lawsuit against Google in the U.S. District Court of the Eastern District of Virginia, seeking damages and other remedies (the "Google Action"). Our complaint alleges that Google engaged in anticompetitive conduct in the ad exchange and ad server markets in violation of federal antitrust laws, including actions that restrict publishers' ability to use competing services and favor Google's own advertising exchange, which caused us substantial harm and lost opportunity. Refer to "Our litigation with Google LLC presents potential risks that could adversely affect our business, results of operations and financial condition" in Item 1A. Risk Factors below.

Current wording

On September 16, 2025, in light of the Court's decision, we filed a lawsuit against Google in the U.S. District Court of the Eastern District of Virginia, seeking damages and other remedies (the "Google Action"). Our complaint alleges that Google engaged in anticompetitive conduct in the ad exchange and ad server markets in violation of federal antitrust laws, including actions that restrict publishers' ability to use competing services and favor Google's own advertising exchange, which caused us substantial harm and lost opportunity.

Previous 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.

Current wording

Macroeconomic challenges such as inflation, tariffs and trade wars, the interest rate environment, global conflicts, the risk of a recession, labor strikes, and significant volatility in commodity prices, including the price of oil, 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

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.

Current wording

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

Previous wording

We report our financial results as one operating segment. Our consolidated operating results are regularly reviewed by our chief operating decision maker, principally to make decisions about how we allocate our resources and to measure our consolidated operating performance.

Current wording

We report our financial results as one operating segment. Our consolidated operating results are regularly reviewed by our chief operating decision maker, principally to make decisions about how we allocate our resources and to measure our operating performance.

Previous 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.

Current wording

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, 2025.

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

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

Current wording

Comparison of the Three Months Ended March 31, 2026 and 2025

Previous 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.

Current wording

Revenue increased $8.6 million, or 6%, for the three months ended March 31, 2026 compared to the prior year period. Our revenue growth was driven by growth in CTV, which increased by $12.8 million, or 18%. This increase was partially offset by a decline in revenue from mobile and desktop of $2.9 million, or 5%, and $1.4 million, or 6%, respectively.

Previous 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.

Current wording

Our CTV revenue growth for the three months ended March 31, 2026 compared to the 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

For the full year 2025, we believe our revenue will increase compared to the prior year period and we expect CTV and mobile to be our biggest growth drivers.

Current wording

For the full year 2026, we believe our revenue should increase compared to the prior year period and we expect CTV to be our biggest growth driver.

Previous 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.

Current wording

Cost of revenue expenses decreased $2.4 million, or 4%, for the three months ended March 31, 2026 compared to the prior year period, primarily due to a decrease of $6.5 million in traffic acquisition costs due to a decrease in revenue reported on a gross basis. This decrease was partially offset by increases of $2.6 million in cloud hosting, data center, and bandwidth expenses and $1.1 million in personnel costs.

Previous 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.

Current wording

Sales and marketing expenses decreased $2.0 million, or 4%, for the three months ended March 31, 2026 compared to the prior year period, primarily due to a decrease of $2.3 million in depreciation and amortization, which was driven by certain acquired intangible assets becoming fully amortized in 2025.

Previous wording

Sales and marketing expenses may fluctuate quarter to quarter and period to period, on an absolute dollar basis and as a percentage of revenue, based on revenue levels, the timing of our investments and seasonality in our industry and business.

Current wording

Sales and marketing expenses may fluctuate quarter to quarter and period to period, based on the timing of our investments and seasonality in our industry and business. Such fluctuations may not be directly proportional to changes in revenue.

Previous wording

The timing and amount of our capitalized development and enhancement projects may affect the amount of development costs expensed in any given period. As a percentage of revenue, technology and development expense may fluctuate from quarter to quarter and period to period based on revenue levels, the timing and amounts of technology and development efforts, the timing and the rate of the amortization of internally-developed capitalized projects and the timing and amounts of future capitalized internally-developed software costs.

Current wording

Technology and development expenses may fluctuate from quarter to quarter and period to period based on the timing and amounts of technology and development efforts, the timing and the rate of the amortization of internally-developed capitalized projects and the timing and amounts of future capitalized internally-developed software costs. Such fluctuations may not be directly proportional to changes in revenue.

Previous wording

Cost of revenue increased $6.8 million, or 11%, for the three months ended September 30, 2025 compared to the prior year period, primarily due to increases of $5.6 million in cloud hosting, data center, and bandwidth expenses.

Current wording

General and administrative expenses increased $1.0 million, or 4%, for the three months ended March 31, 2026 compared to the prior year period, primarily due to increases of $1.0 million in professional services expenses.

Previous 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.

Current wording

Interest expense, net decreased $0.6 million for the three months ended March 31, 2026, compared to the prior year period. The net decreases were primarily due to a decrease in interest expense as a result of the repricing of our term loan facilities.

Previous 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.

Current wording

Foreign exchange (gain) loss, net decreased by $2.4 million for the three months ended March 31, 2026 compared to the prior year period 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 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.

Current wording

The loss on extinguishment of debt of $2.2 million for the three months ended March 31, 2025, was due to the March 2025 repricing of our 2024 Term Loan B Facility (defined below).

Previous wording

Technology and development expenses were relatively flat for the three months ended September 30, 2025 compared to the prior year period.

Current wording

Other income was relatively flat for the three months ended March 31, 2026 compared to the prior year period as we had similar levels of sublease activity.

Previous 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.

Current wording

We recorded an income tax benefit of $0.7 million and $0.9 million for the three months ended March 31, 2026 and 2025, respectively. The tax benefit for the three months ended March 31, 2026 was primarily the result of the vesting of share-based awards. The tax benefit for the three months ended March 31, 2025 was primarily the result of the Company's ability to recognize deferred tax assets subject to the domestic valuation allowance and the federal, state, and foreign income tax provisions.

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" 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.

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 months ended March 31, 2026. 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 2026 to be immaterial. We will continue to monitor for any impact of future guidance.

Previous 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:

Current wording

The following table presents the calculation of gross profit and reconciliation of gross profit to Contribution ex-TAC for the three months ended March 31, 2026 and 2025:

Previous wording

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

Current wording

The following table presents Contribution ex-TAC by channel for the three months ended March 31, 2026 and 2025:

Previous wording

For the remainder of 2025, we expect Contribution ex-TAC will increase compared to the prior year period, and we expect CTV will be our biggest growth driver in 2025.

Current wording

For the remainder of 2026, we expect Contribution ex-TAC will increase compared to the prior year period and we expect CTV will be our biggest growth driver.

Previous 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:

Current wording

The following table presents a reconciliation of net income (loss), the most comparable GAAP measure, to Adjusted EBITDA for the three months ended March 31, 2026 and 2025:

Previous 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.

Current wording

Adjusted EBITDA increased by $6.1 million during the three months ended March 31, 2026 compared to the prior year period.

Previous 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.

Current wording

As of March 31, 2026, we had cash and cash equivalents of $184.6 million, of which $51.5 million was held in foreign currency denominated cash and cash equivalents accounts, and an aggregate gross principal amount of $359.5 million of indebtedness outstanding under our 2024 Term Loan B Facility (as defined below). In addition, we were party to a $175.0 million 2024 Revolving Credit Facility (as defined below), of which approximately $4.1 million was assigned to outstanding but undrawn letters of credit. See "Capital Resources" below for further information about our outstanding debt.