Thank you, operator, and good afternoon, everyone. Welcome to Magnite's fourth quarter 2025 earnings conference call.

As a reminder, this conference call is being recorded. Joining me on the call today are Michael Barrett, CEO, and David Day, our CFO.

I would like to point out that we have posted financial highlight slides on our Investor Relations website to accompany today's presentation. Before we get started, I will remind you that our prepared remarks and answers to questions will include information that might be considered to be forward-looking statements, including, but not limited to, statements concerning our anticipated financial performance and strategic objectives, including the potential impacts of macroeconomic factors on our business.

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.

A discussion of these and other risks, uncertainties, and assumptions is set forth in the company's periodic reports filed with the SEC, including our quarterly reports on Form 10-Q and our 2025 annual report on Form 10-K. We undertake no obligation to update forward-looking statements or relevant risks.

Our commentary today will include non-GAAP financial measures, including contribution ex-TAC, or less traffic acquisition costs, adjusted EBITDA, and non-GAAP income per share. Reconciliations between GAAP and non-GAAP metrics for our reported results can be found in our earnings press release and the financial highlights deck that is posted on our Investor Relations website.

At times, in response to your questions, we may offer additional metrics to provide greater insights into the dynamics of our business. Please be advised that this additional detail may be one-time in nature, and we may or may not provide an update on the future of these metrics.

I encourage you to visit our Investor Relations website to access our press release, financial highlights deck, periodic SEC reports, and the webcast replay of today's call to learn more about Magnite. I will now turn the call over to Michael.

Please go ahead, Michael.

Thank you, Nick, and what an end to 2025. We exceeded consensus expectations for both the quarter and the full year.

In a mixed macro environment, our results reflect the durability of our model and the accelerating shift towards streaming. In Q4, CTV contribution ex-TAC grew 32% ex-political, meaningfully above our guide.

That acceleration began in Q3 and strengthened into year-end. As we enter 2026, CTV is now larger than DV+, making streaming the majority of our business.

That is a defining moment for Magnite. The long anticipated ramp of programmatic CTV is no longer emerging.

It is underway at scale. Adoption is broad-based across media owners, agencies, and DSPs.

We saw strong growth from many of the largest players in the industry, including LG Ads, Netflix, Paramount, Roku, Vizio, Walmart, and Warner Bros. Discovery.

TV OEMs are leaning aggressively into programmatic across home screens, pause ads, data enablement, and marketplaces. Programmatic enablement in live sports continues to expand across the largest global streamers.

On the demand side, the largest global agencies are now driving meaningful volume through buyer marketplaces and DSP-agnostic pipes powered by Magnite. ClearLine activation continues to gain momentum as buyers increasingly seek direct, transparent, and efficient access to premium streaming supply.

Stepping back, the industry trajectory is unmistakable. Consumers have moved to streaming.

Time spent has already shifted. Advertisers are following, and dollars are now catching up.

CTV combines the brand impact of television with the precision and measurability of digital. As inventory has scaled and pricing has normalized, CTV has become accessible to a broader range of advertisers, from global brands to performance marketers to SMBs.

For Magnite, this shift is structurally advantageous. In DV+, we operate in a highly competitive market where we hold mid-single-digits share.

In CTV, our share is multiple times higher. As dollars migrate into streaming, they move into a segment where we have deeper integrations, stronger publisher relationships, and differentiated infrastructure.

Now turning to DV+. DV+ grew 4% ex-political in Q4, modestly below expectations, and that pressure has increased in Q1.

We observed accelerated budget reallocation from DV+ into CTV across agencies, DSPs, and brands. This trend has intensified in Q1.

This makes sense. As CTV becomes more measurable and performance driven, and inventory scales, dollars are naturally consolidating into streaming environments.

Within DV+, there are encouraging signs. Our mobile in-app business remains healthy.

Commerce media partnerships are gaining momentum, with more than 15 partners announced, 11 of which are deployed and ramping, including United Airlines, PayPal, Pinterest, and Best Buy. These partnerships combine owned inventory with first-party data layered through ClearLine curation.

We do not believe that the decline in search referral traffic is impacting our DV+ business. Our footprint remains diversified across open web, mobile app, online video, audio, and digital out-of-home.

In fact, our DV+ supply continues to expand, with ad requests growing over 30% year-over-year in Q4 and at similar rates in Q1. Our DV+ business has never been supply constrained.

Now turning to AI. There has been speculation that generative AI and agent-based buying could disintermediate infrastructure platforms.

We believe what is actually unfolding reinforces the importance of scaled sell-side infrastructure. In Q4, we embedded an Advertising Context Protocol, or AdCP, based seller agent directly into SpringServe and executed what we believe was the industry's first agent-to-agent campaign.

Scope3 served as the buyer agent on behalf of MiQ, with media running across LG and Warner Bros. Discovery inventory.

While still early, this marks an important milestone. It represents the first step toward a future where buyer and seller agents can interpret campaign briefs, intelligently match inventory with audiences, and ultimately transact media in a more automated and efficient fashion.

Magnite is uniquely positioned on the sell side. We believe we will be long-term winners in digital advertising given our differentiated access to supply, scaled and interoperable data assets, and ability to apply AI across the end-to-end workflow.

Layering AI into that ecosystem modernizes the buying experience, streamlining historically manual insertion order processes, matching briefs with audiences and inventory at scale, and enhancing traditional programmatic execution. Even in a world of autonomous agents, infrastructure becomes more critical, not less.

Agents may interpret intent, but they still rely on scaled marketplaces to clear transactions, enforce auction mechanics, ensure compliance, manage fraud prevention, and handle financial settlements. As the ecosystem evolves toward potentially thousands of buyer and seller agents, aggregation and interoperability become essential.

You cannot have a market where every agent negotiates bilaterally with every other agent. Standards-based, scaled platforms are required to make that system function.

That is the role Magnite plays. In Q1, we are continuing to run test campaigns and refine the AdCP framework.

It's early, but we are encouraged by the progress and view this as a meaningful step toward a more intelligent and efficient advertising marketplace. AI is not displacing our infrastructure.

It is increasing throughput across it. Lastly, on DV+, we continue to await the court's final order in the Google ad tech remedies phase.

We believe remedies could create meaningful share reallocation opportunities. As we have stated, every 1% of market share gained could represent approximately $50 million of incremental contribution ex-TAC annually at very high incremental margins.

We remain prepared. To conclude, we are in the early innings of a multi-year replatforming of television and video advertising.

Streaming is now the dominant form of video consumption. CTV represents the majority of digital video time spent, yet ad dollars still lag engagement.

Industry forecasts call for sustained double-digit CTV advertising growth for years to come, with tens of billions of dollars expected to shift from linear television and fragmented digital channels into streaming environments. Magnite sits at the center of that shift.

CTV is now the majority of our business. We are deeply integrated with the largest streaming publishers and OEMs in the world.

We operate in premium, largely logged-in environments that are inherently more defensible and more measurable. As dollars consolidate into CTV, they move into a segment where our market share is meaningfully higher and our infrastructure is embedded.

At the same time, automation and AI are increasing efficiency across the ecosystem, expanding working media, and driving more volume through scaled platforms like ours. Secular CTV growth, expanding total addressable market, increasing automation, strong share position, those forces are durable.

We believe Magnite is foundational to how the next era of advertising will transact, and we have never been more confident in our strategic position. With that, I'll turn the call over to David for more detail on the financials.

David?

Thanks, Michael. As Michael mentioned, we had a strong Q4 and finish to the year, with a great performance in CTV, achieving 20% contribution ex-TAC growth or 32% excluding political, significantly exceeding our expectations.

CTV reached 48% of our total contribution ex-TAC for Q4. DV+ came in below expectations, declining 1% and up 4% excluding political.

Adjusted EBITDA grew 9% to $84 million, resulting in a 43% margin. We're pleased with results, particularly the continued acceleration in CTV growth we saw in Q4.

For the full year, contribution ex-TAC totaled $670 million, a year-over-year increase of 10% or 14% excluding the impact of political. For CTV in 2025, we achieved contribution ex-TAC of $304 million, an increase of 17% or 22% excluding political.

For DV+, we reported $365 million for the year, growth of 5% or 8% ex-political. We processed total ad spend approaching $7 billion.

Adjusted EBITDA for the full year 2025 was $232 million, an increase of 18% from 2024, resulting in an adjusted EBITDA margin for the year of 34.7%. Total revenue for Q4 was $205 million, up 6% from Q4 2024.

Contribution ex-TAC was $195 million, up 8% within our guidance range and up 16% excluding political. CTV contribution ex-TAC was $94 million, up 20% year-over-year or 32% excluding political, significantly exceeding the top end of our guidance range.

DV+ contribution ex-TAC was $101 million, a decrease of 1% or an increase of 4% excluding political from the fourth quarter last year. This result was below our guidance range.

As Michael noted, we saw a growing spend shift from DV+ to CTV. Our contribution ex-TAC mix for Q4 was 48% CTV, 37% mobile, and 15% desktop.

From a vertical perspective, retail, health and fitness, and financial were the strongest performing categories, while automotive was again one of our weakest performing categories. In DV+, we saw additional weakness in technology and food and beverage.

Total operating expenses, which includes cost of revenue, were $153 million, a slight decrease from $154 million for the same period last year. Adjusted EBITDA operating expense for the fourth quarter was $111 million, $1 million better than the low end of our guidance range and an increase from $104 million in the same period last year.

The increase was primarily driven by higher cloud and data center costs and higher personnel-related expenses supporting the growth of our CTV business and investment in CTV-related features and functionality, and was better than expected due to lower personnel expenses including slower-than-anticipated hiring. Our net income was $123 million for the quarter compared to net income of $36 million for the fourth quarter of 2024.

This was driven by a $90 million one-time tax benefit resulting from the release of the valuation allowance on our deferred tax assets. As background to the release, we met the specific accounting criteria of 12 quarters of cumulative positive pre-tax income and the necessary expectations for future profitability.

Adjusted EBITDA grew 9% year-over-year to $84 million, reflecting a margin of 43%. As a reminder, we calculate adjusted EBITDA margin as a percentage of contribution ex-TAC.

GAAP earnings per diluted share were 80 cents for the fourth quarter of 2025 compared to 24 cents for the fourth quarter of 2024. Non-GAAP earnings per share for the fourth quarter of 2025 was 34 cents compared to 34 cents last year.

The reconciliations to non-GAAP income and non-GAAP earnings per share are included with our Q4 results press release. Our cash balance at the end of Q4 was $553 million, an increase from $482 million at the end of the third quarter.

Operating cash flow, which we define as adjusted EBITDA less CapEx, was $61 million. Capital expenditures, including both purchases of property and equipment and capitalized internal-use software development costs, were $23 million, consistent with the expectations we discussed last quarter.

Net interest expense for the quarter was $4 million. Net leverage for the quarter was zero, down from 0.3x at the end of Q3.

As a reminder, the remaining $205 million principal balance of our convertible notes is a current liability on the balance sheet as the notes mature this quarter. We plan to pay off the converts at maturity with cash on hand next month.

As $400 million in converts were part of our original financing for the SpotX acquisition, and when all was said and done, provided capital at an extremely favorable rate. During 2025, we repurchased or withheld over 5.2 million shares for approximately $79 million.

We're also announcing a new two-year share repurchase plan today, which authorizes the repurchase of common stock with a value up to $200 million. Following the repayment of our convert, we plan to be more aggressive with share repurchases given our future expected significant and consistent free cash flow generation.

Our capital allocation strategy will target approximately 50% of free cash flow generation to be returned to shareholders via share repurchases over time, provided our share price provides a reasonable return compared to our estimated intrinsic value. Note also that M&A opportunities may arise in the future that might change our perspective.

I will now share our expectations for the first quarter of 2026 and our current thoughts for the full year. For the first quarter, we expect contribution ex-TAC to be in the range of $157 million to $161 million, which represents growth of 8% to 10%.

Contribution ex-TAC attributable to CTV to be in a range of $81 million to $83 million, which represents growth of 28% to 31%, surpassing 50% of total contribution ex-TAC for the first time. DV+ contribution ex-TAC to be in the range of $76 million to $78 million, which represents a decline of 6% to 8%.

We anticipate adjusted EBITDA operating expenses to be approximately $122 million, which implies adjusted EBITDA margin of over 23%. As a reminder, the first quarter is always seasonally our lowest margin quarter.

For the full year 2026, we anticipate total contribution ex-TAC growth to be at least 11%, adjusted EBITDA percentage growth in the mid-teens, adjusted EBITDA margin greater than 35%, free cash flow growth greater than 30%, and CapEx of approximately $60 million, a reduction from prior year. I want to point out that our estimates do not include any potential market share gains as a result of remedies from the Google ad tech trial.

Finally, regarding our tax position, we would not expect to have any significant increases in cash taxes for the next few years. We are proud of our team's execution and our resulting fourth quarter and full year results.

We believe we are very well-positioned to continue winning and thriving with the changes that are taking place in the programmatic ecosystem. We continue testing and implementing the right AI capabilities to build on Magnite's industry-leading platform and making strategic investments to improve our efficiencies.

With that, let's open the line for Q&A.

Hey there. Congratulations, good numbers.

I wanted to talk about the breadth of CTV and how much of that is sustainable. Ex-political, CTV up 32% in growth.

Can you break down how much of that is SMBs, how much is by vertical? You named a lot of really big studio companies that are growing.

I'm really interested in what's growing and where do you see that continuing. That's my first question.

Hey, Laura, great question. I'll handle the first, and maybe David dive in with some specifics.

We really haven't gotten into breaking out, Lord knows we have a hard enough time figuring out DV+ and CTV buckets, let alone getting a little bit more specific on the CTV. I will say, and you did see the announcement from Mountain recently about their direct connection into us as their first platform to do so.

That's a very encouraging sign of a high growth area of performance-oriented SMBs. We are seeing just across the board.

You don't grow at 32% and not have everything firing at all cylinders. Big branded advertisers that used to advertise in TV, we've cited a big shift from performance advertisers that were digital online video, digital display shifting into CTV.

Throughout all our channel checks, the same note was sung by every major agency, brand, marketer. The appeal of CTV, the pricing, the performance metrics of it, it's really just increasing in velocity of appeal.

We're just seeing it across the board, Laura.

Great. Then my second question is about risk.

You have a lot of really specific deep infrastructure integrations into some of these large CTV performers. Do you get the sense that elongating your client relationship time, increasing your lifetime value, and lowering the risk of investing in Magnite as a stock?

No question. You hit the nail in the head, and I think we tried to harp on that in the script.

We look so different in CTV than we do perhaps even in DV+ and display. We are highly differentiated.

We have a leading programmatic ad server that's coupled with the leading SSP platform. We're building more and more tools.

We have a buying tool, ClearLine, that's integrated across the board. We look quite different, unique, and with a enjoyable moat that we built in CTV, which is, as the fastest-growing segment in the digital advertising sector.

Thank you very much.

Thanks, Laura.

Great. Thanks.

Michael, let me just stick with the CTV question for a second. Is there any way to kind of parse out the mix shift to CTV versus your organic partner growth, like what you had before?

Because there's a clear acceleration, I think, on both fronts. How much of that's coming from live events?

Yeah. Live is a huge, increasingly contributor each quarter, so that's definitely a good guy for us.

As it relates to parsing it out, David, do you want to say kind of the dollar shift that we saw from DV+ into CTV and that to give you some idea of the baseline growth level versus the acceleration?

I guess if you just look at the expectations versus consensus for Q1, for example, you've got DV+, $8 million or $9 million lower and CTV higher by that same amount. I'm not sure you can differentiate spend shift versus organic because the spend shift is rolling into our organic numbers and is rolling through, obviously all of those same partners.

It is a very dramatic shift, right?

Right.

Go ahead.

No, I was saying if you looked at it let's just say if the expected performance is 20% and it winds up being 32%, it's pretty easy to parse it out as to what the accelerant was from a spend shift from platform to platform.

No, that's helpful color. I's just trying to make sure to flag, I guess, that the underlying is still growing ex the shift, just want

to

make sure that we

get Oh, yeah, very much so.

Very much so. I think the

thing, Dan, that from a larger perspective from what we talked about is those very marketers, and making up a number, say someone spends $100 with us, they're just spending it differently, allocating it differently. Good news for us, they're allocating into the faster-growing platform that you certainly look ahead in 3 to 5 years from a CAGR standpoint it's going to be super impressive.

Number one, the allocation's happening on our platform, we're catching dollar for dollar, and we're still having that organic growth on the CTV side that's far exceeding the marketplace. Both very positives for us.

Just to layer on

to

Oh, sorry, I was going to say layer on to Laura's point is de-risking. A dollar of CTV revenue and growth is more protectable and sustainable in some ways than DV+, which can be a little bit more volatile.

We love where this is heading ultimately.

Not just that, David. I guess the next question I'd ask is margins are still improving.

There's always been questions around take rate and economics, and you're still driving margins higher. Some of that's been your cost to take out, cost to serve initiatives.

Just maybe any comments you guys have on that would be great. Thanks.

In fact, and we talked about this a little bit I think the last quarter or two, because of the opportunity that we have in CTV, we've actually made some additional internal investments into CTV. Into engineering, into accelerating some of our feature and functionality in the CTV business.

All things being equal, our margin expansion could have been even greater in 2026. We'll still expand margins, but with this opportunity in CTV, it's sort of a little bit of a one-time shot on the headcount and continuing to make the improvements on our tech stack infrastructure, as you mentioned, getting better leverage out of that to really set us up for more rapidly expanding margin in future years.

Hey, guys. I had a couple of questions.

I guess maybe following along the lines of the great previous two as well. What do you guys think is the right way to think about CTV growth and then DV+ growth kind of going forward?

I know you gave kind of 1Q outlook and kind of high-level for the year for overall. If we kind of look at the two businesses, what's the right way to think about the growth rate kind of going forward on a sustainable basis?

I know, Michael, you said CTV is double-digit grower and obviously we've seen that strong growth rate. Then just a follow-up, just on OpenPath, can you just maybe talk about that a little bit, just kind of the impact that you had seen?

It seems like that situation might be behind us now. Maybe if you could just talk about that and if you think that that's been resolved and kind of behind us or if there's potentially anything to be aware of on that front.

Thank you.

Sure, great questions and I would have David jump in on some of it. Certainly if you look at CTV, the market from a estimate standpoint has always been probably lagging the actual growth rates.

I think some of the latest numbers out there are in the mid to low teens. Certainly at 32%, that's far exceeding market growth.

That's where we expect to be given our market position. I think a growth rate in the high teens, 20s is very sustainable given the secular shift that's going on.

As it relates to DV+, I think it's fair to remind everyone the diverse portfolio that DV+ is. Certainly there's desktop and mobile web, and so that is definitely under pressure.

You have all sorts of things happening there. The big budget shifts that we talked about that we caught on the CTV side were essentially coming from that bucket.

You also have emerging categories like audio, digital out-of-home, mobile app, which you look at the numbers AppLovin's putting up. Mobile app for a long time was kind of out of our reach because the brand advertising that we sourced really couldn't compete with the app install.

Now it's been on a better level playing field than it ever has. We view that as a big opportunity for us.

We're deploying our SDK, we're partnering with AppLovin, we're partnering with Unity, we're partnering with all the big players, and we think that that's a big growth area for us. Where does that net out?

It's hard to say, but I think the encouraging thing is from a growth profile for Magnite, any weakness that we are seeing in DV+ is manifesting itself in the CTV bucket. Again, if the budget's 100 bucks, we're catching the $100.

It's just being allocated differently by the marketer. It's a little hard to put a growth rate on DV+, but if you parse it all out, there's going to be growers like mobile app that can be in the teens, and there's going to be desktop, mobile web that's probably flatish to slightly down if that's helpful.

You had also asked about OpenPath. As you noted, OpenPath has been around for years.

The reason why it became a subject of focus last quarter was the Kokai deployment and OpenPath being the default. We had painfully walked through in the Q&As and the script about our efforts to turn that around with our biggest buyers.

By most degrees, we've been successful in that, and the longer tail of OpenPath users, the smaller advertisers, smaller agencies, we had always said that that was going to be more of a street fight. OpenPath has played out exactly as we thought it would.

It's a modest impact in terms of the DV+ performance, has no impact on the CTV performance, and everything that we said we were going to do we did. I think OpenPath has been with us for years and will continue to be with us for years.

I think if anything, we've proven that it's not an existential threat to the business, that we have embedded ourselves with our largest buyers to the degree that we become invaluable to them to execute their programmatic businesses.

Thank you, guys. That's very helpful.

Thank you, guys. Michael, you talked about running volume through AdCP.

Just curious what you think the evolution is on that front and what is the client interest in running volume through AI agents.

Interest very high, reality very little budgets are being allocated to it. I think to frame it correctly is think of this as a massive remodeling of your house, but we're not knocking it down and building a brand-new house.

I think that it's all going to sit on top of the existing infrastructure in the industry. Hundreds of millions of dollars have been invested by Magnite alone to make programmatic work.

What AI agents are going to do is make it work better. It's going to alleviate menial tasks from the traders, the planners, the ops people, and it's going to put more working dollars to play, which is awesome.

We feel it's all going to flow through our pipes. I think we're doing the exact appropriate amount of investment in it, and we are ready to catch the dollars when they come scaled.

That is not going to happen any coming quarter. Interest high, execution actually putting your money where your mouth is is not high, but we believe we're in a great position technically and from a market position to take advantage of this next wave of innovation.

Is that more likely to occur on the DV+ side or on the CTV side?

I think across the board. The world I describe, there's a lot of heavy lifting that goes on in terms of planning campaigns, introducing opportunities for publishers, publishers introducing opportunities for buyers, making sure it works, line items broken here, this deal doesn't work here, why doesn't it work, 20 hours of troubleshooting to figure out, and then half the budget's already not been spent and you're wasting time.

I think there's all sorts of efficiencies that are in play across both platforms with an agentic approach as the UI level. Then the plumbing and the infrastructure powered the way it used to be, the way Magnite does it.

A quick follow-up for David. The EBITDA OpEx is a pretty big jump from Q4 to Q1.

Just curious if you can maybe talk about what investments are embedded in there.

If you recall, and we kind of have that jump literally every year. You have personnel raises effective January 1st that kick into place.

You also have employer taxes that kick into place, and some of those are attached to some annual grant vesting in that Q1. We have an off-site that occurs in the first quarter of the year.

Certain years it's full company, certain years it's the commercial team. You just got a number of those things.

Then the other component there would be some of the investment that I mentioned earlier, which is engineering and product talent for supporting the pace of development and velocity in our CTV business. Those kind of make up that increase.

Great. Thanks, guys.

Okay. Thanks for taking my questions.

Let me try two, please. I have a follow-up on the prior one.

Michael, if you could please explain the Context Protocol, how it works, what the real value proposition is, and what your differentiated advantages there. As it relates to CloudX, is that a competitive product?

Is that even related? How should we think about how all this evolves in an agentic world?

What the impact will eventually be? Is it that you're going to get greater share of ad dollars?

Is it that the TAM will expand? How should we think about the impact and how it works?

Then the second question I have is just on the ad tech case. You touched on it in your prepared remarks.

What is the base case expectation at this point? What should investors be expecting in terms of a realistic outcome?

If you have any sense on the timeline, that would be great, too. Thank you.

Sure, Shweta. AdCP is a protocol that allows agents to talk to agents.

There's nothing particularly unique about that. It's making sure your program can be agentic.

It's making sure your platform can have agents talk to each other. I think that given the size of our platform and the appeal of the types of publishers we have, we were approached by Scope3 first to execute that.

I think it's less as to the fact that we're prepared to move beyond the API world and get into the MCP, AdCP world where agents are talking to agents and need a point of connection as opposed to APIs where it was more people connecting to machines. I think that we feel very good about that.

Where I think our point of differentiation will lie, not just in our readiness, but I think in the vast amount of data that we sit on, in the years and years of data that we have, when we can help our publishers and help our buyers from a inventory discovery, price discovery, to maximize yield for publishers from mediation, I think that that's where the magic really happens. Anyone can build an agent.

The question is what data is that agent working on, and I think we feel that we sit on this repository of data across tens of thousands of publishers, many, many years of data worth, to be able to inform decisions. We've also organized the taxonomy of all the publishers on our platform so that if someone's looking for sports enthusiasts or auto enthusiasts, that the same protocol exists across all publishers, we can scale what would be very niche buys across agents.

Feeling very good about that. You also asked about CloudX.

Obviously, that's more germane in the mobile area, but we're integrated into CloudX right now, which is a newer mediation platform for mobile app. We're excited.

We know the guys well. I think it's just another opportunity to gain access to a super fast growing area of the DV+ business, which is app, and we are working closely with them.

It's a good thing for us, not kind of a disintermediation by any stretch. Lastly, in the ad tech case, very hard to pick timing.

The expectation is it's any week now, but that could be delayed a little bit longer. As it relates to predicted outcome, again, that's a little difficult.

I think given the types of conversations that were had in the final pre-judgment hearing between Google and the DOJ, it certainly seemed that given the questions from Judge Brinkema that structural was probably not going to be the likely outcome, that behavioral remedies were. I think some people misinterpret that as, oh, that's not a good guy for Magnite or their peers, which we couldn't disagree with more violently.

We were always expecting behavioral, and we thought that as long as, through behavioral or structural, it really didn't matter to us. As long as the playing field was more level, that we would be a huge beneficiary of that, and we still believe that to this day.

Okay. That's helpful.

Thanks, Michael.

Thanks, Shweta.

Hey, guys. This is Simran on for Matthew Swanson.

Congrats on the quarter. It seems like you guys have hit this tipping point in CTV, which has been great to see.

What would you think from an ecosystem standpoint has changed, and how much would you attribute to the secular market shift versus your growing company-specific moat?

Thanks for the question. I think David touched on that when he gave us specifics about perhaps it was the $9 million came from the DV+ platform and that was placed on the expected $9 million that we thought were going to be spent on DV+ was now spent on CTV.

That's on top of already high-growing base of organic spend there. I think no matter how you look at it, you take the $9 million off, you put it back on DV+, you're still looking at a 20%-plus grower, which is significantly above market average.

I think that you're right about the tipping point. It's just being accelerated by a spend shift from one platform to the other, but it's inherently a much higher-growing platform to begin with, and as we pointed out a couple times, with a much bigger moat for us.

It's a area where we're very differentiated, deep integrations with all the top streamers, ad server capabilities, quite different from the DV+ market.

Got it. That makes sense.

Then on the progress with these partnerships and integrations, could you double-click on the ramp of some of these and maybe touch on Netflix specifically, or any other partners that have progressed particularly well? Yeah.

Particularly in the streaming area, when we do our script and we talk about the most impactful clients of that quarter, we talked LG Ads, Netflix, Paramount, Roku, Vizio, Walmart, Warner Bros. Discovery, really across the board we're seeing.

In terms of the commerce partner in the DV+ part of the script that we talked about, you see a United Airlines, which has taken a while to ramp, but it's now contributing well. PayPal, Pinterest, Best Buy's taking a while.

All these have different flavors of ramps to them. If someone is in the ad business to begin with, having them allow programmatic into their world, that tends to impact the revenue line quicker than if, say, you're United Airlines, you've never been in the advertising business, and you're starting from scratch.

That's a longer gestation period. They each have their different flavors.

From time to time, we'll cite the ones that are active and contributing, and that was the list there.

Great. Thanks, guys.

Hi. Thanks for taking the question.

I wanted to ask about your kind of view of the future with AI, given that that's what's really driving all the stocks, and I know there's been some questions on it, but I want to see if you can give us your view of how this evolves in this way, which is, do you see AI as a force for compression of take rates throughout the kind of ad tech sector generally? Do you see this evolving to a circumstance where perhaps LLMs are a front end for ad plans and then SSPs are kind of a processing agent, maybe DSPs get squeezed?

Or do you think that DSPs and SSPs remain kind of players and maybe the smaller competitors in both sectors get squeezed, or any other kind of circumstance? How do you see this evolving in terms of players and take rates?

That's a great question. I think if you look at an agentic world and you see where the value is created, there's still a tremendous amount of value being created by Magnite, not just in the plumbing piece of it, but in educating these seller agents with the data that we have to make informed decisions on pricing, to mediate the buyer agents that come in.

I think what you really generally see again is it's a renovation of this house, not a leveling of it. It's a much more efficient world where folks are being freed up to do much more sophisticated tasks, as opposed to this back and forth of demand campaign management, fixing broken line items, all that kind of stuff.

I think that what you'll see is far more media going to work. I think you'll see certain people in-between the agents become less valuable.

I think that if you look at the top DSPs and what they have built and the rails that they run on, and the top SSPs like a Magnite and what we've built, that the value creation is the same if not greater. I don't necessarily see a take rate impact in the future, an agentic future for Magnite.

Okay. All right.

Now the other topic I was curious about on antitrust, there's been essentially an adoption of behavioral remedies in Europe with Google, essentially just kind of moving to adopt some of the key things that could be coming here. Would you agree that that's kind of a fair description, and if so, are you seeing any impact in terms of share shift in Europe from what Google's been doing over there?

Great question. I don't know if it's an astute observation, but I'm not so sure it's the exact remedies behaviorally that is being sought here in the States.

Let's just say it's a portion of that package, the lowest hanging fruit of the package, and it's also the one that requires kind of the most lift on the publisher side. What we have seen is the publishers that actually readjust the rankings of the exchanges and readjust the price floors, that there is improvement, but that's a process, right?

This came down in Q4, no one really starts to monkey with things during Q4 just given how important the quarter is, we'll see that play out. I think it's just kind of scratches the surface of what the DOJ is looking for here and what Judge Brinkema has been alluding to.

I think it's not apples to apples to compare Europe to the United States.

Okay. All right.

That's great. Thank you.

Great, thanks. Just to go back to the CTV strength, any key unlocks, whether it's around demand partners, supply partners, or maybe things that maybe had happened earlier in the year where the momentum just sort of built up in Q4 and surpassed your expectations?

Just wondering if we could maybe take another crack at that. Then secondly, on the agentic piece, is there anything that can come into the market incrementally in terms of volumes that remain sort of offline negotiated, inserted via IO, whether that's through some sort of electronic data interchange or a fax or whatever, or the things that can come into the market incrementally the net new programmatic from this sort of agentic shifts in the market?

Thanks.

Great. I'll take the last first.

Certainly I think that that is a area of hope, right? There is still a tremendous amount of dollars that are frozen in the linear world that are insanely rate-sensitive.

It's more of an automation as opposed to agentic. If you can build tools that allow at a very efficient pricing, allow those dollars to be transacted programmatically, that is something we've been trying to effect with ClearLine for a couple years now.

I think if you can make it even easier and add an agentic piece to it, that could make it that much easier to have it talk directly to the ad server, have it inserted into the ad server. I think that that's something that is of appeal, that it's not just all biddable, it's not just programmatic, that it is taking insertion orders and just taking the people out of it and making it automated.

We have high hopes for that occurring, and I think it would be very beneficial to the Magnite platform. I'm sorry, Robert, the first question again was?

Just wanted to take another crack at the CTV question about the inflection point, was there any demand partner unlock, supply partner unlock that drove the variance versus your expectations for the quarter, anything that may have happened in prior quarters that in retrospect when you look at it you're like, okay, that unlocked in Q2, but ramped in a big way in Q4 beyond our expectations. Just wanted to get a sense of an unlock, anything that was sort of beyond your

I would say broad-based across the board. Obviously certain DSPs have become stronger.

You look at the strength of an Amazon in the space, that's been impressive. Certainly Mountain, we've talked about them in the partnership that they've delivered.

I think across the board, you've seen strength in DSPs. I think one of the things that could be the unlock, Robert, is the upfront negotiation, they went stronger than anticipated.

The big question mark was how much was streaming going to be a part of it, because all these guys, the big ones, still run linear businesses. I think what we're finding out is streaming played a huge role in the upfronts, and you're starting to see that come to fruition because those dollars don't get spent until the second half of the year into the first quarter of the year.

I think that combined with some of the strengths of particular partners has really led to outsized growth in addition to the platform switch from the DV+ spending in the open web now spending in CTV. You add those all together and you get turbocharged growth rates.

Regarding the CTV performance, I think your comment on verticals was that there was retail strength, health and fitness, financial, and then you talked about weakness in auto, tech, and I can't recall the third one. Just wondering if the guide has any change in the assumptions for those verticals.

Is it status quo maintains or is there an expectation of recovery in some of the weaker verticals?

You want to have that, David?

I think status quo is sort of what we've been seeing. I would say the trends that we saw, latter half November and December are kind of continuing across the board into this first quarter.

No significant changes on those trends.

Hey, guys. Netflix I think recently said that they expect their ad business to double in size in 2026.

I wanted to ask you how you're thinking about your contribution from Netflix, as you progress through 2026 and how that might affect the overall take rate of your business. Then I have a follow-up.

Sure. I think that Netflix has been a terrific partner.

We anticipated them to exit this year as one of our top, if not top, on a run rate basis partner. That certainly has come to fruition.

We are anticipating a bigger year from them this year given their aspirations in the space. From a concentration standpoint, the take rate varies obviously on the services that we provide.

In some markets we do more than others, and so therefore, I think from a blended standpoint, take rate isn't going to impact the overall upper bound.

Okay. On Netflix in particular, how do we think about CTV growth as we kind of progress through 2026, right?

It looks like you had a nice acceleration for the last couple of quarters. Should we kind of think of an acceleration for the next few quarters as well as you try to upsell your products, as Netflix gets bigger?

Is that kind of the outlook for how you expect the year to pan out?

You want to grab that, David?

Sorry. Just clarify when you say CPV growth?

Year-on-year. If you look at the year-on-year growth in CTV

No, CPV. We have CPM, take rate.

I want to make sure we're talking the same language.

Growth in contribution ex-TAC.

Okay. All right.

I think what you're getting at is sort of mix changes overall. I think our take rates on a blended mixed basis in CTV have shallowed out, they're becoming fairly stable.

There still is a significant influx of what I would call premium inventory at our lower take rate tiers. We're having the contribution ex-TAC growth rates that we are even at those lower levels.

I would expect that bottoming out, I think that continues. Then I think, just from a mix perspective, we have opportunity to grow those take rates in the coming time.

I don't see a huge inflection, an increase in that average take rate in CTV in the near term, but we're building the foundation and the opportunity to provide those additional services on the demand side and so forth where we do make a slightly higher take rate, as we go forward.

All right. Good afternoon.

I'll keep it to one question just given the extent of the call. David or maybe Michael could address on this.

Just curious of the strength you've been seeing with agencies, particularly in agency marketplaces. Can you talk about the opportunity that you have there, specifically with maybe more ClearLine adoption with some of these key agency partners?

Zach, we're very enthused by the adoption and the volume. These things take a while to get going.

There's a bit of a sell-in process from agency to their clients, and so it's kind of a crawl, walk, run. The ones that have been up the longest are at run right now, and the others are in various stages.

Super encouraged by the model, super encouraged by the contribution for the company, and I think the stickiness is what really matters that when they build their business with Magnite as the backbone of their programmatic marketplaces, we become more than just a vendor or a partner that can be put in competition every quarter. We become much more of a partner that's a much more strategic longer-term partner, which isn't the easiest thing to do, particularly in the DV+ world.

They've been essential to our growth and the success of ClearLine.

Thank you, operator. Before we close, I want to thank our investors and our team.

To our shareholders, thank you for your continued confidence and long-term partnership. We remain focused on disciplined execution and building durable value.

To our employees around the world, thank you. CTV becoming the majority of our business, the acceleration across streaming, and our early leadership in AI-driven transactions are direct results of your innovation and commitment.

The shift toward streaming and automation is structural and still in its early innings. As ad dollars move into CTV, they move into an environment where Magnite has scale, deep integrations, and meaningful market share.

We believe we are building foundational infrastructure for the next era of advertising, and we are confident of our best days are ahead. Thank you for joining us.

We look forward to updating you next quarter. I'll turn it back over to Nick to cover our upcoming marketing events.

Or I won't. What?

I'll handle those.

Thank you, Michael. You got it.

Thank you, Michael. Yeah.

Sorry. Upcoming schedule, we've got Susquehanna conference now virtually tomorrow.

We've got meetings in San Francisco with Needham on March 5th, Sydney roadshow on March 11th, meetings in Boston with Bank of America on March 17th, investor lunch with Susquehanna on March 19th, Kansas City with RBC on March 24th, Dallas and Houston with Stephens on the 25th and 26th of March, and then San Diego and LA with Wolfe on the 30th and 31st. Thanks again, all, for joining.