MAGNITE, INC.

Note 1—Organization and Summary of Significant Accounting Policies

Company Overview

Magnite, Inc. ("Magnite" or the "Company") was formed in Delaware and began operations on April 20, 2007. The Company's common stock is listed on the Nasdaq Global Select Market of The Nasdaq Stock Market LLC ("Nasdaq") under the symbol "MGNI." Magnite has its principal offices in New York City, Los Angeles, Denver, London, and Sydney, and additional offices in Europe, Asia, North America, and South America.

The Company provides technology solutions to automate the purchase and sale of digital advertising inventory for buyers and sellers globally, across all channels, formats and auction types. The Company's platform features applications and services for sellers of digital advertising inventory, or publishers, that own and operate connected television ("CTV") channels, applications, websites, and other digital media properties, to manage and monetize their inventory; applications and services for buyers, including advertisers, agencies, agency trading desks, and demand side platforms, to buy digital advertising inventory; and a transparent, independent marketplace that brings buyers and sellers together and facilitates intelligent decision making and automated transaction execution at scale. The Company's clients include many of the world's leading buyers and sellers of digital advertising inventory.

Sellers monetize their inventory through the Company’s platform by seamlessly connecting to a global market of integrated buyers that transact through real-time bidding. These 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. At the same time, buyers leverage the Company’s platform to reach their target audiences across thousands of sellers.

Basis of Presentation and Summary of Significant Accounting Policies

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"), for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair statement of the results for the interim period presented have been included. Operating results for the three and six months ended June 30, 2026 are not necessarily indicative of the results that may be expected for any future interim period, the year ending December 31, 2026, or for any future year.

The condensed consolidated balance sheet at December 31, 2025 has been derived from the audited financial statements at that date, but does not include all of the disclosures required by GAAP. The accompanying condensed consolidated financial statements should be read in conjunction with the Company's audited consolidated financial statements and notes thereto for the year ended December 31, 2025 included in its 2025 Annual Report on Form 10-K.

There have been no significant changes in the Company's accounting policies from those disclosed in its audited consolidated financial statements and notes thereto for the year ended December 31, 2025 included in its Annual Report on Form 10-K, except for the adoption of Accounting Standard Update ("ASU") 2025-05 as described in "Recently Adopted Accounting Standards" below.

Segments

Management has determined that the Company operates asone operating segment andone reportable segment. The Company’s chief operating decision maker ("CODM") is the Chief Executive Officer ("CEO"). The Company has one primary business activity, where it provides a platform to all of its customers, buyers and sellers, that automates the purchase and sale of digital advertising inventory globally, across all channels, formats, and auction types, as described above. The Company’s CODM reviews financial information on a consolidated basis, principally to make decisions about how to allocate resources and to measure the Company’s performance. The CODM reviews consolidated net income, which is the measure of financial profit and loss most closely aligned with generally accepted accounting principles. The CODM considers budget-to-actual variances for this measure, predominantly in the annual budget, forecasting process, and quarterly results assessment. The CODM does not review any balance sheet information at any other level than on a consolidated basis and does not review any income statement information at any other level than on a consolidated basis with the exception of revenue by geography and by channel (refer to Note 3). The significant expense information regularly provided to the CODM is the same as that included in the face of the Company's consolidated statement of operations.

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported and disclosed financial statements and accompanying footnotes. Actual results could differ materially from these estimates.

Recently Adopted Accounting Standards

In July 2025, the Financial Accounting Standards Board ("FASB") issued ASU 2025-05, Financial Instruments - Credit Losses (Topic 326) - Measurement of Credit Losses for Accounts Receivable and Contract Assets ("ASU 2025-05"), which provides a practical expedient to measure credit losses on current accounts receivable and current contract assets. The practical expedient allows companies to assume that current conditions as of the balance sheet date do not change for the remaining life of the asset when measuring credit losses. ASU 2025-05 is effective for annual periods beginning after December 15, 2025 and for interim periods within those annual reporting periods on a prospective basis. Early adoption is permitted. The Company adopted ASU 2025-05 as of January 1, 2026 on a prospective basis. As permitted by ASU 2025-05, the Company elected the practical expedient to assume that current conditions as of the balance sheet date do not change for the remaining life of its current accounts receivable when developing reasonable and supportable forecasts. The adoption of ASU 2025-05 did not have a material impact on the Company's consolidated financial statements and disclosures.

Recent Accounting Pronouncements Not Yet Adopted

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40) - Disaggregation of Income Statement Expenses ("ASU 2024-03"). ASU 2024-03 requires additional disclosures of the nature of expenses included in the income statement and presented in the footnotes. ASU 2024-03 is effective for annual periods beginning after December 15, 2026 and for interim periods beginning after December 15, 2027 on a prospective basis. Early adoption and retrospective application are permitted. The Company is currently evaluating the impact of adopting ASU 2024-03 on its disclosures.

In September 2025, the FASB issued ASU 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40) - Targeted Improvements to the Accounting for Internal-Use Software ("ASU 2025-06"), which modernizes and simplifies the recognition and disclosure framework for internal-use software costs by changing from a project-stage approach to a more judgment-based approach. ASU 2025-06 is effective for annual periods beginning after December 15, 2027 and for interim periods within those annual reporting periods on a prospective basis. Early adoption is permitted. The Company is currently evaluating the impact of adopting ASU 2025-06 on its financial statements and disclosures.

The Company does not believe there are any other recently issued and effective or not yet effective pronouncements that would have or are expected to have a material impact on the Company’s present or future condensed consolidated financial statements.

Note 2—Net Income Per Share

The following table presents the basic and diluted net income per share:

The following weighted-average shares have been excluded from the calculation of diluted net income per share attributable to common stockholders for each period presented because they were anti-dilutive:

The following table presents the achievement levels for the performance stock units as of June 30, 2026, using actual achievement levels for the tranches for which the performance period had been completed and expected achievement levels for ongoing performance periods:

The following table presents the achievement levels for the performance stock units as of June 30, 2025, using actual achievement levels for the tranches for which the performance period had been completed and expected achievement levels for ongoing performance periods:

These expected and actual achievement levels as of June 30, 2026 and 2025 are included in the calculation of weighted-average shares in the net income per share tables above. Refer to Note 11 for additional information related to performance stock units.

For the six months ended June 30, 2026 and 2025, the number of shares that would be issuable assuming conversion of all of the Convertible Senior Notes (as defined in Note 9) was approximately 1,319,707 and 3,210,098, respectively, and were excluded from the calculation of diluted net income per share because they were anti-dilutive. The Convertible Senior Notes had an initial conversion rate of 15.6539 shares of common stock per $1,000 principal amount of the Convertible Senior Notes, which was subject to anti-dilution adjustments in certain circumstances. On March 15, 2026, the Convertible Senior Notes matured, andno Convertible Senior Notes remained outstanding at June 30, 2026.

Note 3—Revenue

For the majority of transactions on the Company's platform, the Company reports revenue on a net basis as it does not act as the principal in the purchase and sale of digital advertising inventory because it does not have control of the digital advertising inventory and does not set prices agreed upon within the auction marketplace. For certain advertising campaigns that are transacted through insertion orders, the Company reports revenue on a gross basis, based primarily on its determination that the Company acts as the primary obligor in the delivery of advertising campaigns for buyers with respect to such transactions.

The following table presents the Company's revenue recognized on a net basis and on a gross basis for the three and six months ended June 30, 2026 and 2025:

The following table presents the Company's revenue by channel for the three and six months ended June 30, 2026 and 2025:

The following table presents the Company's revenue disaggregated by geographic location, based on the location of the Company's sellers for the three and six months ended June 30, 2026 and 2025:

Payment terms are specified in agreements between the Company and the buyers and sellers on its platform. The Company generally bills buyers at the end of each month for the full purchase price of impressions filled in that month. The Company recognizes volume discounts as a reduction of revenue as they are incurred. Specific payment terms may vary by agreement, but are generally seventy-five days or less. The Company's accounts receivable are recorded at the amount of gross billings to buyers, net of allowances for the amounts the Company is responsible to collect. The Company's accounts payable related to amounts due to sellers are recorded at the net amount payable to sellers (refer to Note 7). Accordingly, both accounts receivable and accounts payable appear large in relation to revenue reported on a net basis.

Accounts receivable are recorded at the invoiced amount, are unsecured, and do not bear interest. The allowance for credit losses is reviewed quarterly, requires judgment, and is based on the best estimate of the amount of expected credit losses in existing accounts receivable. The Company reviews the status of the then-outstanding accounts receivable on a customer-by-customer basis, taking into consideration the aging schedule of receivables, its historical collection experience, current information regarding the client, subsequent collection history, and other relevant data, in establishing the allowance for credit losses. Accounts receivable are presented net of an allowance for credit losses of $3.3 million at June 30, 2026, and $4.0 million at December 31, 2025. Accounts receivable are written off against the allowance for credit losses when the Company determines amounts are no longer collectible.

The Company reviews the associated payable to sellers for recovery of buyer receivable allowance and write-offs; in some cases, the Company can reduce the payable to sellers. The reduction of seller payables related to recovery of uncollected buyer receivables is netted against allowance expense. The contra seller payables related to recoveries were $2.1 million and $2.2 million as of June 30, 2026 and December 31, 2025, respectively.

The following is a summary of activity in the allowance for credit losses for the three and six months ended June 30, 2026 and 2025:

The change in provision for expected credit losses associated with accounts receivable and the offsetting impact of the change to contra seller payables related to recoveries of uncollected buyer receivables result in the amount of credit loss expense or recoveries the Company recognizes each period. During the three and six months ended June 30, 2026 and 2025, the activity related to the provision for expected credit losses associated with accounts receivable and the activity of contra seller payables related to recoveries of uncollected buyer receivables were immaterial, which resulted in immaterial amounts of credit loss expense or recovery recognized in the respective periods.

Note 4—Fair Value Measurements

Recurring Fair Value Measurements

Fair value represents the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Observable inputs are based on market data obtained from independent sources. The fair value hierarchy is based on the following three levels of inputs, of which the first two are considered observable and the last one is considered unobservable:

•Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

•Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

•Level 3 – Unobservable inputs.

The table below sets forth a summary of financial instruments that are measured at fair value on a recurring basis at June 30, 2026:

The table below sets forth a summary of financial instruments that are measured at fair value on a recurring basis at December 31, 2025:

At June 30, 2026 and December 31, 2025, cash equivalents of $161.4 million and $342.8 million, respectively, consisted of money market funds with original maturities of three months or less. The carrying amounts of cash equivalents are classified as Level 1 or Level 2 depending on whether or not their fair values are based on quoted market prices for identical securities that are traded in an active market.

At June 30, 2026 and December 31, 2025, the Company had debt outstanding under its 2024 Term Loan B Facility and at December 31, 2025, the Company also had debt outstanding under its Convertible Senior Notes (as defined in Note 9) included in its balance sheets. On March 15, 2026, the Convertible Senior Notes matured and the Company repaid the outstanding principal balance of $205.1 million in full with cash on hand. No Convertible Senior Notes remained outstanding at June 30, 2026. The estimated fair value of the Company's Convertible Senior Notes was $199.2 million as of December 31, 2025. The estimated fair value of Convertible Senior Notes is based on market rates and the closing trading price of the Convertible Senior Notes as of December 31, 2025 and is classified as Level 2 in the fair value hierarchy. At June 30, 2026 and December 31, 2025, the estimated fair value of the Company's 2024 Term Loan B Facility was $358.6 million and $360.0 million, respectively. The estimated fair value is based on borrowing rates currently available to the Company for financing with similar terms and is classified as Level 2 in the fair value hierarchy.

Note 5—Property and Equipment

Major classes of property and equipment were as follows:

Depreciation expense related to property and equipment totaled $8.7 million and $5.8 million for the three months ended June 30, 2026 and 2025, respectively, and $16.8 million and $10.9 million for the six months ended June 30, 2026 and 2025, respectively.

The Company's property and equipment, net by geographical region was as follows:

Note 6—Intangible Assets

The Company’s intangible assets as of June 30, 2026 and December 31, 2025 included the following:

Amortization of intangible assets for the three months ended June 30, 2026 and 2025 was $2.5 million and $2.9 million, respectively, and $5.1 million and $10.3 million for the six months ended June 30, 2026 and 2025, respectively.

The estimated remaining amortization expense associated with the Company's intangible assets was as follows as of June 30, 2026:

Note 7—Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses included the following:

Note 8—Lease Obligations

The Company has operating leases for office facilities and data centers. The lease terms of the Company’s operating leases generally range from 1.0 year to 10.0 years. The Company's lease terms include periods under options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. The weighted average remaining lease term of leases included in lease liabilities is 3.7 years and 4.2 years as of June 30, 2026 and December 31, 2025, respectively. As of June 30, 2026 and December 31, 2025, a weighted average discount rate of 6.09% and 6.03%, respectively, has been applied to the remaining lease payments to calculate the lease liabilities included within the condensed consolidated balance sheets.

Operating lease expense was $7.1 million and $5.6 million for the three months ended June 30, 2026 and 2025, respectively, and $13.8 million and $10.7 million for the six months ended June 30, 2026 and 2025, respectively. The Company recognized variable lease expense of $1.5 million and $0.9 million for the three months ended June 30, 2026 and 2025, respectively, and $2.8 million and $1.8 million for the six months ended June 30, 2026 and 2025, respectively.

Cash paid for amounts included in lease liabilities was $7.0 million and $5.4 million for the three months ended June 30, 2026 and 2025, respectively, and $13.2 million and $10.3 million for the six months ended June 30, 2026 and 2025, respectively.

The maturity of the Company's lease liabilities associated with leases included in the lease liabilities and right-of-use ("ROU") assets were as follows as of June 30, 2026 (in thousands):

In addition to the lease liabilities included in these consolidated financial statements, the Company entered into agreements for office space and data centers that had not commenced as of June 30, 2026; therefore, the leases were not included in the lease liabilities and ROU assets balance as of June 30, 2026. The Company has future commitments totaling $55.8 million over a weighted average term of 9.2 years related to these agreements, of which $32.8 million relates to one lease that will commence in 2030 over 8.2 years.

The Company's operating lease right-of-use assets by geographical region were as follows:

Early Termination of Lease

In May 2026, the Company initiated an early termination of its existing office lease in Los Angeles California. As a result, the Company remeasured the right of use asset and lease liability, resulting in a decrease of $8.0 million and $7.9 million, respectively, in the consolidated balance sheet as of June 30, 2026.

Note 9—Debt

Current and long term debt as of June 30, 2026 and December 31, 2025 consisted of the following:

Maturities of the principal amount of the Company's debt were as follows as of June 30, 2026 (in thousands):

Amortization of debt discount and debt issuance costs is computed using the effective interest method and is included in interest expense in the condensed consolidated statement of operations. Amortization of the debt discount and debt issuance costs associated with the Company's indebtedness totaled $0.5 million and $1.2 million for the three and six months ended June 30, 2026 and $0.8 million and $1.6 million for the three and six months ended June 30, 2025, respectively.

Convertible Senior Notes and Capped Call Transactions

In March 2021, the Company issued $400.0 million aggregate principal amount of 0.25% convertible senior notes in a private placement, including $50.0 million aggregate principal amount of such notes pursuant to the exercise in full of the over-allotment options of the initial purchasers (collectively, the "Convertible Senior Notes").

During the year ended December 31, 2023, the Company repurchased $194.9 million of principal balance of its Convertible Senior Notes in the open market with cash on hand for $165.5 million.

The Convertible Senior Notes matured on March 15, 2026, and the Company repaid the outstanding principal balance of $205.1 million in full with cash on hand. No Convertible Senior Notes remained outstanding as of June 30, 2026.

In connection with the pricing of the Convertible Senior Notes, the Company entered into privately negotiated capped call transactions with various financial institutions (the "Capped Call Transactions"). The cost of the Capped Call Transactions were recorded as a reduction of the Company's additional paid-in capital in the accompanying consolidated financial statements. The Capped Call Transactions expired as of March 15, 2026.

The following table sets forth interest expense related to the Convertible Senior Notes for the three and six months ended June 30, 2026 and 2025 (in thousands, except interest rates):

2021 and 2024 Credit Agreements

On April 30, 2021, the Company entered into a credit agreement (the "2021 Credit Agreement") with Goldman Sachs Bank USA as administrative agent and collateral agent, and other lender parties thereto. The 2021 Credit Agreement provided for a $360.0 million seven-year senior secured term loan facility ("2021 Term Loan B Facility"), which had a maturity in April 2028, and a $65.0 million senior secured revolving credit facility (as amended in June 2021, the "2021 Revolving Credit Facility"), which had a maturity in December 2025. In June 2023, the Company amended the 2021 Credit Agreement (the "Amended 2021 Credit Agreement") to transition away from a variable interest rate based on the Eurodollar Rate towards a similar variable interest rate based on Adjusted Term SOFR, as defined in the Amended 2021 Credit Agreement, which is based on the secured overnight financing rate ("SOFR").

On February 6, 2024, the Company refinanced the Amended 2021 Credit Agreement and entered into a new credit agreement (the "2024 Credit Agreement") with Morgan Stanley Senior Funding, Inc. as the Company term loan administrative agent and Citibank, N.A. as the Company's revolving facility administrative agent and collateral agent, and other lender parties thereto. The 2024 Credit Agreement included a $365.0 million seven-year senior secured term loan facility (the "2024 Term Loan B Facility"), which will mature in February 2031 and a $175.0 million five-year senior secured revolving credit facility (the "2024 Revolving Credit Facility"), which will mature in February 2029. The Company primarily used the proceeds from the 2024 Term Loan B Facility to repay in full all outstanding amounts owed under the Company's Amended 2021 Credit Agreement. Accordingly, the Amended 2021 Credit Agreement was terminated and replaced in its entirety. The obligations under the 2024 Credit Agreement are secured by substantially all of the assets of the Company.

On September 18, 2024, the Company 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 (as defined in the 2024 Credit Agreement) plus a margin of 3.75% from the previous rate of Term SOFR plus a margin of 4.50%, and on March 18, 2025, the Company 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.

As of June 30, 2026, the contractual interest rate related to the 2024 Term Loan B Facility was 6.64%. In addition to having to pay contractual interest on the 2024 Term Loan B Facility, the Company is also required to pay certain other fees, primarily to the lenders under the 2024 Revolving Credit Facility, in order to maintain their revolving facility commitments.

The covenants of the 2024 Credit Agreement include customary negative covenants that, among other things, restrict the Company’s ability to incur additional indebtedness, grant liens and make certain acquisitions, investments, asset dispositions and restricted payments. In addition, the 2024 Credit Agreement contains a springing financial covenant that is tested on the last day of any fiscal quarter only if utilization of the 2024 Revolving Credit Facility exceeds 35% of the total revolving commitments, whereby the Company is required to maintain a First Lien Net Leverage Ratio below 3.25 to 1.00. As of June 30, 2026, no amounts were outstanding under the 2024 Revolving Credit Facility and the Company was in compliance with its debt covenants. During the three and six months ended June 30, 2026, the Company borrowed and subsequently repaid $60.0 million under the 2024 Revolving Credit Facility, incurring $0.6 million of interest expense in connection with the borrowing. At June 30, 2026, 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.

The 2024 Credit Agreement includes customary events of default, and customary rights and remedies upon the occurrence of any event of default thereunder, including rights to accelerate the loans, terminate the commitments thereunder and realize upon the collateral securing the obligations under the 2024 Credit Agreement. The 2024 Credit Agreement calls for customary scheduled loan amortization payments of 0.25% of the initial principal balance, which at the time of Amendment No. 2 was $363.2 million, payable quarterly (i.e.1% in aggregate per year) as well as a provision that requires the Company to prepay the 2024 Term Loan B Facility based on an annual calculation of free cash flow ("Excess Cash Flow") as defined by the 2024 Credit Agreement. The Company was not required to make any such mandatory prepayment required by the Excess Cash Flow provision for the period ended June 30, 2026.

The following table summarizes the amount outstanding under the Company's 2024 Term Loan B Facility at June 30, 2026 and December 31, 2025:

March 18, 2025 Debt Repricing

The Company analyzed the changes of Amendment No. 2 on a lender-by-lender basis and determined that the transaction would primarily be accounted for as a modification, with a portion of it accounted for as debt extinguishment and new debt issuance. As a result, the Company recognized a loss on extinguishment of $2.2 million related to $1.0 million of unamortized debt discount and $1.1 million of unamortized debt issuance costs related to the portion of the 2024 Term Loan B Facility that was extinguished. The Company paid $1.1 million in third-party fees related to Amendment No. 2 of which animmaterial amount was capitalized as debt issuance costs and $1.0 million was included in general and administrative expenses in the Company's condensed consolidated statement of operations for the six months ended June 30, 2025. As part of Amendment No. 2, most of the 2024 Term Loan B lenders decided to roll their loan balances over from Amendment No. 1 to Amendment No. 2, while some decided to cash out and reassign their loan balances. On March 18, 2025, $270.6 million of the 2024 Term Loan B principal balance from Amendment No. 1 was rolled over to Amendment No. 2 as part of non-cash financing activities while $92.6 million of the 2024 Term Loan B Facility principal balance from Amendment No. 1 was repaid and then reissued as part of Amendment No. 2.

The following table sets forth interest expense related to the 2024 Term Loan B Facility and the 2021 Term Loan B Facility (in thousands, except interest rates):

The estimated remaining amortization expense for the 2024 Term Loan B Facility debt discount and debt issuance costs was as follows as of June 30, 2026 (in thousands):

Total Interest Expense and Interest Income

Interest expense consists primarily of contractual interest expense and amortization of debt discount, debt issuance costs, and deferred financing costs related to the Company's debt facilities under its 2024 Credit Agreement and Amended 2021 Credit Agreement as well as its Convertible Senior Notes. Interest income primarily consists of interest earned on the Company's cash equivalents. The following includes interest expense and interest income, as presented within interest expense, net in the condensed consolidated statement of operations (in thousands):

Note 10—Commitments and Contingencies

Commitments

The Company has commitments under non-cancelable operating leases for facilities and its managed data center facilities (refer to Note 8).

As of June 30, 2026 and December 31, 2025, the Company had $4.1 million and $4.0 million, respectively, of letters of credit associated with office leases available for borrowing, on which there were no outstanding borrowings as of either date.

In the normal course of business, the Company enters into non-cancelable contractual obligations with various parties, primarily related to cloud-managed service agreements, software service agreements, and data center providers. As of June 30, 2026, the Company's outstanding non-cancelable contractual obligations with a remaining term in excess of one year consist of the following (in thousands):

The amounts above include commitments under a cloud-managed services agreement, under which the Company has a non-cancelable commitment from July 2025 to June 2028 containing minimum spend amounts for each twelve-month period (i.e. July 2025 to June 2026, July 2026 to June 2027, and July 2027 to June 2028) as well as an additional minimum spend amount over the entire three-year term. The table above approximates the manner in which the Company expects to fulfill the obligation.

Guarantees and Indemnification

The Company’s agreements with sellers, buyers, and other third parties typically obligate the Company to provide indemnity and defense for losses resulting from claims of intellectual property infringement, damages to property or persons, business losses, or other liabilities. Generally, these indemnity and defense obligations relate to the Company’s own business operations, obligations, and acts or omissions. However, under some circumstances, the Company agrees to indemnify and defend contract counterparties against losses resulting from their own business operations, obligations, and acts or omissions, or the business operations, obligations, and acts or omissions of third parties. For example, because the Company’s business interposes the Company between buyers and sellers in various ways, buyers often require the Company to indemnify them against acts and omissions of sellers, and sellers often require the Company to indemnify them against acts and omissions of buyers. In addition, the Company’s agreements with sellers, buyers, and other third parties typically include provisions limiting the Company’s liability to the counterparty, and the counterparty’s liability to the Company. These limits sometimes do not apply to certain liabilities, including indemnity obligations. These indemnity and limitation of liability provisions generally survive termination or expiration of the agreements in which they appear. The Company has also entered into indemnification agreements with its directors, executive officers, and certain other officers that will require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors, officers, or employees. No material demands have been made upon the Company to provide indemnification under such agreements and there are no claims that the Company is aware of that could have a material effect on the Company’s condensed consolidated financial statements.

Litigation

The Company and its subsidiaries may from time to time be parties to legal or regulatory proceedings, lawsuits and other claims incident to their business activities and to the Company’s status as a public company. Such routine matters may include, among other things, assertions of contract breach or intellectual property infringement, claims for indemnity arising in the course of the Company’s business, claims relating to our collection or use of data, regulatory investigations, audits by taxing authorities, or enforcement proceedings, and claims by persons whose employment has been terminated. For example, the Company has recently been subject to class action lawsuits alleging violations of various privacy statutes. Additionally, on September 16, 2025, the Company filed a lawsuit against Google LLC ("Google") in the U.S. District Court of the Eastern District of Virginia. The complaint alleges that Google has 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. Magnite seeks monetary damages, an injunction, structural relief, and reimbursement of reasonable costs and expenses. Magnite intends to pursue its claims vigorously, but cannot predict the outcome of this matter.

Such matters are subject to many uncertainties, and outcomes are not predictable with assurance. Consequently, management is unable to ascertain the ultimate aggregate amount of monetary liability or awards, amounts which may be covered by insurance or recoverable from third parties, or the financial impact with respect to such matters as of June 30, 2026. However, based on management’s knowledge as of June 30, 2026, management believes that the final resolution of these matters known at such date, individually and in the aggregate, will not have a material adverse effect upon the Company’s condensed consolidated financial position, results of operations or cash flows.

Employment Contracts

The Company has entered into severance agreements with certain employees and officers. The Company may be required to pay severance and accelerate the vesting of certain equity awards in the event of involuntary terminations.

Note 11—Stock-Based Compensation

Stock Options

A summary of stock option activity for the six months ended June 30, 2026 was as follows:

The total intrinsic value of options exercised during the six months ended June 30, 2026 was $8.2 million, based on their respective exercise dates. At June 30, 2026, the Company had unrecognized stock-based compensation expense relating to unvested stock options of approximately $1.9 million, which is expected to be recognized over a weighted-average period of 2.5 years.

The Company estimates the fair value of stock options that contain service conditions using the Black-Scholes option pricing model. The grant date fair value of options granted during the six months ended June 30, 2026 and 2025 was $10.64 and $11.40, respectively, per share. The weighted-average input assumptions used by the Company were as follows:

Restricted Stock Units

A summary of restricted stock unit ("RSU") activity for the six months ended June 30, 2026 was as follows:

The weighted-average grant date fair value per share of restricted stock units granted during the six months ended June 30, 2026 and 2025 was $16.02 and $16.08, respectively.

The fair value of restricted stock units that vested and were released during the six months ended June 30, 2026 and 2025 was $40.1 million and $68.1 million, respectively, based on their respective vesting dates. At June 30, 2026, the intrinsic value of unvested restricted stock units was $191.0 million. At June 30, 2026, the Company had unrecognized stock-based compensation expense relating to unvested restricted stock units of approximately $127.5 million, which is expected to be recognized over a weighted-average period of 2.6 years.

Performance Stock Units

The Company grants performance stock units ("PSU") to select executive employees that vest based on share price metrics tied to total shareholder return ("TSR") relative to a peer group, subject to a time-based service component. Between 0% and 150% of the performance stock units will vest at the end of the performance period, which is generally on the third anniversary of the PSU grant date.

Stock-based compensation expense for PSUs is based on the grant date fair value and the number of shares assuming a performance measurement of 100%. The compensation expense will not be reversed if the performance metrics are not met.

During the six months ended June 30, 2026, the Company granted PSUs with an aggregate target of 373,653 shares, assuming a performance measurement of 100%. The amount of shares that will ultimately vest will be determined based on the Company's TSR relative to the TSRs of a peer group for thethree year-period beginning January 1, 2026, as well as certain interim measurements based on relative TSR for theone-year andtwo-year periods beginning on January 1, 2026.

A summary of PSU activity for the six months ended June 30, 2026 was as follows:

The grant date fair value for the PSUs was estimated using a Monte-Carlo simulation model. The grant date fair value of PSUs granted during the six months ended June 30, 2026 and June 30, 2025 was $20.35 and $20.93, respectively, per share. The weighted-average input assumptions used by the Company were as follows:

During the six months ended June 30, 2026 and 2025, the fair value of PSUs that vested and were released was $9.7 million and $1.9 million, respectively, based on their respective vesting dates. At June 30, 2026, the intrinsic value of unvested performance stock units based on expected achievement levels was $22.6 million. As of June 30, 2026, the Company had unrecognized stock-based compensation expense relating to unvested PSUs of approximately $9.3 million, which will be recognized over a weighted-average period of 1.1 years.

Stock-Based Compensation Expense

Total stock-based compensation expense recorded in the condensed consolidated statements of operations was as follows:

As of June 30, 2026, an aggregate of 13,949,630 shares remained available for future grants under the Magnite, Inc. Amended and Restated 2014 Equity Incentive Plan (the "Amended and Restated 2014 Equity Incentive Plan").

As of June 30, 2026, the Company has reserved 3,740,063 shares of its common stock for issuance under the Magnite, Inc. Amended and Restated 2014 Employee Stock Purchase Plan (the "Amended and Restated 2014 Employee Stock Purchase Plan").

Note 12—Income Taxes

In determining quarterly provisions for income taxes, the Company uses the annual estimated effective tax rate applied to the actual year-to-date income. The Company's annual estimated effective tax rate differs from the statutory rate primarily as a result of state taxes, foreign taxes, deductible stock option expenses, and nondeductible executive compensation.

The Company 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 an income tax provision of $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 ("DTAs") subject to the domestic valuation allowance and the federal, state, and foreign income tax provisions. The Company continues to maintain a partial valuation allowance against certain state and foreign DTAs where it is not more likely than not that such assets will be realized.

The Company released a majority of the domestic and foreign valuation allowances during the quarter ended December 31, 2025. The Company continues to maintain a partial valuation allowance on certain DTAs until there is sufficient evidence to support the reversal of all or some additional portion of these allowances. The exact timing and amount of future valuation allowance releases are dependent upon when sufficient evidence exists to support their realization.

Due to the net operating loss ("NOL") carryforwards, all of the Company's United States federal and a majority of its state returns are open to examination by the Internal Revenue Service and state jurisdictions for all years since inception. For India, Netherlands, Sweden, and the United Kingdom, all tax years remain open for examination by the local country tax authorities, for France, only 2023 and forward are open, for Australia and Singapore, only 2022 and forward are open for examination, for Brazil, Canada, Germany, Malaysia and New Zealand, only 2021 and forward are open for examination, for Italy, only 2020 and forward are open for examination, and for Japan, only 2019 and forward remain open for examination.

Pursuant to Section 382 of the Internal Revenue Code (the "Code"), the Company and Telaria, Inc. both underwent ownership changes for tax purposes (i.e. a more than 50% change in stock ownership in aggregated 5% shareholders) on April 1, 2020 due to the merger with Telaria Inc. As a result, the use of the Company's total domestic NOL carryforwards and tax credits generated prior to the ownership change will be subject to annual use limitations under Section 382 and Section 383 of the Code and comparable state income tax laws. The Company believes that the ownership change will not impact its ability to utilize substantially all of its NOLs and state research and development carryforward tax credits to the extent it will generate taxable income that can be offset by such losses. The Company reasonably expects some of its federal research and development carryforward tax credits will not be recovered prior to expiration.

There was no material change to the Company's unrecognized tax benefits in the six months ended June 30, 2026 and the Company does not expect to have any material changes to unrecognized tax benefits through the end of the fiscal year.

On July 4, 2025, the President of the United States signed H.R. 1, commonly referred to as the "One Big Beautiful Bill Act" ("OBBBA") into law. The legislation includes several changes to federal tax law that generally allow for more favorable deductibility of certain business expenses beginning in 2025, including the restoration of immediate expensing of domestic R&D expenditures, reinstatement of 100% bonus depreciation, and more favorable rules for determining the limitation on business interest expense. OBBBA also includes certain changes to the U.S. taxation of foreign activity, including changes to foreign tax credits, Global Intangible Low-Taxed Income, Foreign-Derived Intangible Income, and Base Erosion and Anti-Abuse Tax amongst other changes. These changes are generally effective for tax years beginning after December 31, 2025. OBBBA changes effective for 2025 were reflected in the income tax provision for the year ended December 31, 2025, and the OBBBA changes effective for 2026 are reflected in the Company's estimated effective tax rate for the six months ended June 30, 2026. Based on current projections, the continuing impact is expected to be a deferral of the payment of current income taxes over multiple years; however, the Company expects the net impact to its effective tax rate for 2026 to be immaterial.