MAGNITE, INC.

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, 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.

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. ("Streamr.ai"), a self-service platform that 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 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.

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, traffic filtering technology that reduces the cost of working with us, and brand safety measures.

Previous 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.

Current wording

In addition, header bidding has led to a significant increase in the number of ad impressions to be processed through our platform as well as by DSPs, which can lead to increased costs if not properly addressed. Our platform analyzes large repositories of data and utilizes machine learning to continuously increase the operational efficiency of our platform, so as to enable buyers and sellers to achieve their objectives in a cost-effective manner, including through the use of traffic optimization and bid filtering technology.

Previous 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.

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, supply chain disruptions and tariffs could result in an increase in our cost base relative to our revenue, and increased cost or difficulty procuring items 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

For the three months ended March 31, 2026 and 2025, our revenue reported on a gross basis was 4% and 11%, respectively, of total revenue. The decline in our revenue reported on a gross basis as a percentage of our revenue is primarily due to declines in our managed service business, which is accounted for on a gross basis, as advertisers continue to shift budgets towards more automated solutions.

Current wording

For the three and six months ended June 30, 2026, our revenue reported on a gross basis was 3% and 3%, respectively, of total revenue and for the three and six months ended June 30, 2025, our revenue reported on a gross basis was 11% and 11%. The decline in our revenue reported on a gross basis as a percentage of our revenue is primarily due to declines in our managed service business, which is accounted for on a gross basis, as advertisers continue to shift budgets towards more automated solutions.

Previous wording

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

Current wording

Comparison of the Three and Six Months Ended June 30, 2026 and 2025

Previous 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.

Current wording

Revenue increased $28.1 million, or 9%, for the six months ended June 30, 2026 compared to the prior year period. Our revenue growth was primarily driven by growth in CTV, which increased by $30.5 million, or 20%. This increase was partially offset by a decline in desktop and mobile revenue of $1.4 million, or 3%, and $1.1 million, or 1%, respectively.

Previous 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.

Current wording

Our CTV revenue growth for the six months ended June 30, 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

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.

Current wording

Cost of revenue expenses decreased $2.9 million, or 4%, for the three months ended June 30, 2026 compared to the prior year period, primarily due to a decrease of $8.1 million in traffic acquisition costs due to a decrease in revenue reported on a gross basis, which was partially offset by increases of $3.1 million in depreciation and amortization expenses, $1.2 million in software license expenses and $0.8 million in personnel costs.

Previous 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.

Current wording

Sales and marketing expenses increased $4.7 million, or 11%, for the three months ended June 30, 2026 compared to the prior year period, primarily due to an increase of $4.9 million in personnel costs, which was partially offset by a decrease of $0.8 million in depreciation and amortization, which was driven by certain acquired intangible assets becoming fully amortized in 2025.

Previous wording

Technology and development expenses increased $2.9 million, or 13%, for the three months ended March 31, 2026 compared to the prior year period, primarily due to increases of $1.7 million in event and travel-related expenses and $1.2 million in personnel costs.

Current wording

Technology and development expenses increased $5.4 million, or 12%, for the six months ended June 30, 2026 compared to the prior year period, primarily due to increases of $3.3 million in personnel costs and $1.7 million in event and travel-related expenses.

Previous 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.

Current wording

General and administrative expenses increased $5.9 million, or 26%, for the three months ended June 30, 2026 compared to the prior year period, primarily due to increases of $4.1 million in professional fees, including legal costs, $0.8 million in personnel costs, $0.5 million in insurance and taxes related costs, and $0.4 million in software license fees.

Previous 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.

Current wording

Foreign exchange (gain) loss, net decreased by $5.2 million and $7.5 million for the three and six months ended June 30, 2026, respectively, compared to the prior year periods 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 three months ended March 31, 2025, was due to the March 2025 repricing of our 2024 Term Loan B Facility (defined below).

Current wording

The loss on extinguishment of debt of $2.2 million in the six months ended June 30, 2025, was due to the March 2025 repricing of our 2024 Term Loan B Facility (defined below).

Previous 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.

Current wording

Other income was relatively flat for the three and six months ended June 30, 2026 compared to the prior year periods as we had similar levels of sublease activity in both periods.

Previous 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.

Current wording

We recorded an income tax provision of $6.2 million and $1.0 million for the three months ended June 30, 2026 and 2025, respectively, and $5.5 million and $0.1 million for the six months ended June 30, 2026 and 2025, respectively. The tax provision for the three and six months ended June 30, 2026 was primarily the result of federal, state and foreign income tax provisions. The tax provision for the three and six months ended June 30, 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 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.

Current wording

Our income tax provision for the three and six months ended June 30, 2026 reflects the impacts of the "One Big Beautiful Bill Act," which became effective on July 4, 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 2026 to be immaterial. We will continue to monitor for any impact of future guidance.

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, cost of 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 are discussed above under the headings "Components of Our Results of Operations" and "Results of Operations."

Previous wording

Our use of Contribution ex-TAC has limitations as an analytical tool and you should not consider it in isolation or as a substitute for analysis of our financial results as reported under GAAP. A potential limitation of this non-GAAP financial measure is that other companies, including companies in our industry which have similar business arrangements, may define Contribution ex-TAC differently, which may make comparisons difficult. Because of these and other limitations, you should consider our non-GAAP measures only as supplemental to GAAP-based financial performance measures, including revenue, gross profit, net income (loss) and cash flows.

Current wording

Our use of Contribution ex-TAC has limitations as an analytical tool and you should not consider it in isolation or as a substitute for analysis of our financial results as reported under GAAP. A potential limitation of this non-GAAP financial measure is that other companies, including companies in our industry which have similar business arrangements, may define Contribution ex-TAC differently, which may make comparisons difficult. Because of these and other limitations, you should consider our non-GAAP measures only as supplemental to GAAP-based financial performance measures, including revenue, gross profit, net income and cash flows.

Previous 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:

Current wording

The following table presents the calculation of gross profit and reconciliation of gross profit to Contribution ex-TAC for the three and six months ended June 30, 2026 and 2025:

Previous wording

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

Current wording

The following table presents Contribution ex-TAC by channel for the three and six months ended June 30, 2026 and 2025:

Previous wording

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

Current wording

We define Adjusted EBITDA as net income adjusted to exclude stock-based compensation expense, depreciation and amortization, including amortization of acquired intangible assets, impairment charges, interest income or expense, provision 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, severance costs and other 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

Our Adjusted EBITDA is influenced by fluctuations in our revenue, cost of revenue, and the timing and amounts of the cost of our operations. Adjusted EBITDA should not be considered as an alternative to net income (loss), income (loss) from operations, or any other measure of financial performance calculated and presented in accordance with GAAP.

Current wording

Our Adjusted EBITDA is influenced by fluctuations in our revenue, cost of revenue, and the timing and amounts of the cost of our operations. Adjusted EBITDA should not be considered as an alternative to net income, income from operations, or any other measure of financial performance calculated and presented in accordance with GAAP.

Previous 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:

Current wording

The following table presents a reconciliation of net income, the most comparable GAAP measure, to Adjusted EBITDA for the three and six months ended June 30, 2026 and 2025:

Previous wording

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

Current wording

Adjusted EBITDA increased by $16.2 million, or 30%, during the three months ended June 30, 2026 compared to the prior year period and increased by $22.3 million, or 24%, during the six months ended June 30, 2026 compared to the prior year period.

Previous 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.

Current wording

As of June 30, 2026, we had cash and cash equivalents of $332.6 million, of which $55.4 million was held in foreign currency denominated cash and cash equivalents accounts, and an aggregate gross principal amount of $358.6 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.

Previous wording

On February 1, 2024, the Board of Directors approved a repurchase plan (the "2024 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. From January 1, 2026 to February 1, 2026, we repurchased 33,800 shares of the Company's common stock for an aggregate amount of $0.5 million pursuant to the 2024 Repurchase Plan. As of February 1, 2026, $63.7 million was available under the 2024 Repurchase Plan, which subsequently expired.

Current wording

On February 1, 2024, the Board of Directors approved a repurchase plan (the "2024 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. From January 1, 2026 to February 1, 2026, we repurchased 33,800 shares of the Company's common stock for an aggregate amount of $0.5 million pursuant to the 2024 Repurchase Plan.

Previous wording

On February 23, 2026, the Board of Directors approved a new repurchase plan (the "2026 Repurchase Plan"), which authorized the repurchase of common stock with an aggregate market value of up to $200.0 million, through February 29, 2028. During three months ended March 31, 2026, we repurchased 1,063,217 shares of the Company's common stock for an aggregate amount of $14.0 million pursuant to the 2026 Repurchase Plan. As of March 31, 2026, $186.0 million was available under the 2026 Repurchase Plan.

Current wording

On February 23, 2026, the Board of Directors approved a new repurchase plan (the "2026 Repurchase Plan"), which authorized the repurchase of common stock with an aggregate market value of up to $200.0 million, through February 29, 2028. During six months ended June 30, 2026, we repurchased 2,667,795 shares of the Company's common stock for an aggregate amount of $35.0 million pursuant to the 2026 Repurchase Plan. As of June 30, 2026, $164.9 million was available under the 2026 Repurchase Plan.

Previous wording

As of March 31, 2026, the balance of the 2024 Term Loan B Facility was $350.8 million, net of unamortized debt discount and debt issuance costs of $8.7 million, and amounts available under the 2024 Revolving Credit Facility were $170.9 million, net of letters of credit outstanding in the amount of $4.1 million.

Current wording

As of June 30, 2026, the balance of the 2024 Term Loan B Facility was $350.4 million, net of unamortized debt discount and debt issuance costs of $8.2 million, and amounts available under the 2024 Revolving Credit Facility were $170.9 million, net of letters of credit outstanding in the amount of $4.1 million.

Previous wording

For the three months ended March 31, 2026, net cash used in operating activities was $120.8 million compared to net cash provided by operating activities of $2.6 million for the three months ended March 31, 2025. Our operating activities included our net income of $4.4 million and non-cash adjustments of $31.2 million for the three months ended March 31, 2026 and net loss of $9.6 million offset by non-cash adjustments of $44.0 million for the three months ended March 31, 2025. Net changes in our working capital resulted in $156.4 million of cash used in operating activities and $31.8 million of cash used in operating activities for the three months ended March 31, 2026 and March 31, 2025, respectively. The net changes in working capital for both periods presented were primarily due to the timing of cash receipts from buyers and the timing of payments to sellers.

Current wording

For the six months ended June 30, 2026, net cash provided by operating activities was $65.9 million compared to $21.1 million for the six months ended June 30, 2025. Our operating activities included our net income of $23.8 million and non-cash adjustments of $64.7 million for the six months ended June 30, 2026 and net income of $1.5 million and non-cash adjustments of $78.7 million for the six months ended June 30, 2025. Net changes in our working capital resulted in $22.6 million and $59.1 million of cash used in operating activities for the six months ended June 30, 2026 and June 30, 2025, respectively. The net changes in working capital for both periods presented were primarily due to the timing of cash receipts from buyers and the timing of payments to sellers.

Previous wording

During the three months ended March 31, 2026 and 2025, our investing activities used net cash of $13.1 million and $17.2 million, respectively. During the three months ended March 31, 2026 and 2025, we used cash for purchases of property and equipment of $9.4 million and $14.4 million, respectively, and used cash for investments in our internally developed software of $3.7 million and $2.8 million, respectively.

Current wording

During the six months ended June 30, 2026 and 2025, our investing activities used net cash of $29.6 million and $33.3 million, respectively. During the six months ended June 30, 2026 and 2025, we used cash for purchases of property and equipment of $21.5 million and $26.9 million, respectively, and used cash for investments in our internally developed software of $8.1 million and $6.4 million, respectively.

Previous wording

For the three months ended March 31, 2026 and 2025, net cash used in financing activities was $235.1 million and $39.5 million, respectively. Cash outflows from financing activities for the three months ended March 31, 2026 primarily included a $205.1 million payment to settle matured Convertible Senior Notes, $14.6 million for taxes paid related to net share settlement of stock-based awards, and $14.5 million of payments related to share repurchases.

Current wording

For the six months ended June 30, 2026 and 2025, net cash used in financing activities was $257.4 million and $47.4 million, respectively. Cash outflows from financing activities for the six months ended June 30, 2026 primarily included a $205.1 million payment to settle matured Convertible Senior Notes, $21.4 million for taxes paid related to net share settlement of stock-based awards, and $35.5 million of payments related to share repurchases and $1.8 million of payments on our Term Loan B Facility. During the quarter, we borrowed $60.0 million under our 2024 Revolving Credit Facility to fund short-term operating requirements. The borrowings of $60.0 million were repaid before quarter end, and no amounts were outstanding under the 2024 Revolving Credit Facility as of June 30, 2026.

Previous wording

Cash outflows from financing activities for the three months ended March 31, 2025 primarily included $92.6 million of payments to certain 2024 Term Loan B Facility lenders related to our Amendment No. 2 repricing activity, $20.3 million for taxes paid related to net share settlement of stock-based awards, and $19.2 million of payments related to share repurchases. The outflows were partially offset by cash proceeds primarily consisting of $92.6 million from certain 2024 Term Loan B Facility lenders related to our Amendment No. 2 repricing activity. In connection with Amendment No. 2, $270.6 million of principal debt balance from Amendment No. 1 was rolled over as part of non-cash financing activities while the remaining $92.6 million principal balance from Amendment No. 1 were repaid and then reissued under Amendment No. 2 as mentioned above.

Current wording

Cash outflows from financing activities for the six months ended June 30, 2025 primarily included a $92.6 million payment to certain 2024 Term Loan B Facility lenders related to our Amendment No. 2 repricing activity, $27.3 million for taxes paid related to net share settlement of stock-based awards, and $22.9 million of payments related to share repurchases. The outflows were partially offset by cash proceeds primarily consisting of $92.6 million from certain 2024 Term Loan B Facility lenders related to our Amendment No. 2 repricing activity, cash proceeds from the employee stock purchase plan of $2.1 million, and cash proceeds from stock options exercises of $1.7 million. In connection with Amendment No. 2, $270.6 million of principal debt balance from Amendment No. 1 was rolled over as part of non-cash financing activities while the remaining $92.6 million principal balance from Amendment No. 1 were repaid and then reissued under Amendment No. 2 as mentioned above.