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| Statement |
|---|
| DV+ contribution ex-TAC was $102 million, an increase from $92 million or up 11% compared to last year and continues to be an area of strength as Michael mentioned |
| Our DV+ business performed particularly well delivering contribution ex-TAC growth of 11% and CTV rebounded nicely from Q3, exceeding the high end of our guidance |
| To start 2024, our momentum has been especially strong with our CTV business |
| We are encouraged to see these positive trends and are optimistic they will continue |
| We finished 2023 strongly, and I believe we are very well positioned for new heights in 2024 |
| And so what we're really pleased is those very same people who have a day job, but we're also doing the migration, are now fully focused on innovation and product features, whether it's on ClearLine, product features, on streaming product features within SpringServe, and we'll probably be able to get to talk more about product as the year goes on, but we feel really good about the roadmap and the bandwidth that we have |
| We believe this represents continued market share gains for Magnite |
| Our CTV platform is best-in-class, which is validated by our strong and growing partnerships with the majority of the largest industry players, including Roku, Warner Bros Discovery, Paramount, Disney, Fox, Samsung, LG and Vizio |
| These partners continue to rapidly expand their programmatic advertising efforts and investments that will drive meaningful industry growth for the next several years, which we believe will fuel additional Magnite growth |
| Streamers just entering ad supported programmatics such as Prime Video and the new sports partnership between ESPN, Fox and Warner Bros Discovery, all of which are important Magnite partners, are also going to drive industry growth and provide additional opportunities |
| As the market matures and the landscape of TV ad buying continues to evolve, we are very confident our role and the services we provide will expand |
| We believe we are uniquely suited to accelerate partner success in CTV based on our strong value proposition |
| So I think we feel real good about where we stand from a headcount standpoint and that we won't be missing any opportunities on our product roadmap and/or our sales efforts |
| I think that we feel really good about where we stand in terms of the number of bodies we have and our product roadmap and our ability to service our clients from a go-to-market standpoint |
| So the minute we are able to divine, we'll be happy to share with everyone and why we think we're better positioned than most to be able to play in this is that |
| I want to spend a little more time on CTV and sports as this is a highly technical and complex part of the CTV ecosystem, where we have a strong offering and leadership position |
| A couple of things to call out with Q1, so I would say the results for Q4 are what we expected with the growth of the business and with good top line performance |
| So it's an area where we have excelled at in our DV+ business, and we feel quite comfortable playing that in our CTV business |
| I think it's very good for us and for the whole industry |
| Beyond our prowess in sports, our publisher partners are increasingly reaping the benefits of our holistic solution, which leverages our ad server and SSP to enhance monetization and efficiency |
| I mean, from all the things that we've spoken with the Vizio guys, they're very happy about the deal, very happy about our partnership |
| That obviously benefits us and the rest of the industry, but it also helps |
| Really solid results, guys |
| I'm also particularly pleased with our completed refinancing, which provides a stable capital structure for the foreseeable future |
| I am very happy with our strong finish to 2023, and I'm encouraged by the progress in our CTV revenue growth recovery |
| We're also raising adjusted EBITDA margin expansion to 100 basis points, up from 50 basis points to 100 basis points previously at this level of top line growth |
| For the full year we expect strong continued ad spend growth, particularly in CTV, and we are raising total contribution ex-TAC to grow approximately 10%, up from high single digits previously, with CTV to grow faster than DV+ |
| We expect Prime's success will be greatly driven by the syndicated content, and Magnite is perfectly positioned to participate in these economics |
| This is a huge accomplishment driven by the strong cash flow generation of our business |
| I am incredibly proud of our team's efforts and extreme focus on buyers needs to drive these results |
| Statement |
|---|
| Categories that did not perform as well were business services, home and garden, and financial services, and political was also down significantly as we cycled the election spend from 2022 |
| CTV contribution ex-TAC was pressured in the quarter as we had expected by mix shift and managed service softness trends, which we've discussed in the last several quarters, but showed marked improvement over the third quarter |
| So we think of it as very positive, but boy, deal is a bit aways from closing, but I'm hard pressed to come up with a negative scenario for Magnite if the deal closes |
| GAAP earnings per diluted share was $0.16 for the fourth quarter of 2023 compared to a loss of $0.27 for the fourth quarter of 2022 |
| Furthermore, Privacy Sandbox isn't going to be the only way to try to replace the lost signal from third party cookies |
| But I will say that the challenge has been, as long as third party cookies exist, it's awfully difficult to have someone abandon that and test new methods |
| Right it’s like they are a huge technology company and it's going to be impossible for almost anyone to try to replicate what they can do |
| Total operating expenses, which includes cost of revenue for the fourth quarter, were $152 million, a decrease from $204 million in the same period last year |
| Our roadmap of new product innovation in DV+ has never been stronger in the seven years I've been at the helm at Magnite |
| And if you kind of triangulate on the guidance that we've given, that would imply that Q3 and Q4 adjusted EBITDA expenses would be actually slightly down from that Q2 run rate |
| So, Jason, it's too hard for us to see a signal of a 1% deprecation in a platform that does a trillion plus ad requests a day |
| And in my conversations with our publishing partners, it definitely has had an impact on them |
| Is that good for you or is that bad for you? If CTV is deemed more of a performance channel rather than just top of funnel substitute for linear TV? That's my first one |
| But I do think it will be a tumultuous period at the start |
| And then just on cookie deprecation, obviously, we've only seen 1% of that occur over the first two months here, but I'm curious if you've seen any impact to your business as that started |
| And so say double the 2022 level is not a bad expectation for us |
| To provide additional context beyond our Q1 expenses, we expect adjusted EBITDA operating expenses to come down in Q2 and to be between $101 million and $103 million |
| I would say an impact it's had is in CPMs |
| Net income was $31 million for the quarter compared to net loss for the fourth quarter of 2022 of $36 million |
| We've been somewhat conservative in our expectations for 2024 from a comp perspective |
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