Q1 2022 Magnite Inc Earnings Call

Good evening and welcome to the Mack make first quarter 2022 earnings conference call.

All participants will be in listen only mode.

Should you need assistance. Please signal a conference specialist by pressing Star then zero on your telephone keypad.

After todays presentation, there will be an opportunity to ask questions to ask a question you May press star one.

On your telephone keypad to withdraw your question. Please press star two.

Please note this event is being recorded.

I would now like to turn the conference over to Mr. Nick Carmela <unk> head of Investor Relations. Please go ahead Sir.

Thank you operator, and good afternoon, everyone. Welcome to magnates first quarter 2022 earnings Conference call. As a reminder, the comparisons you will see in the 10-Q as reported include the financial results of spot X and springs or for Q1 2022, but for periods. Prior to the acquisition dates the results do not include spot extra <unk>.

<unk>, which were acquired on April 32021, and July one 2021, respectively. During the course of this call when we refer to results and associated year over year comparisons with the phrase as reported we are referring to the basis as reported in our 10-Q, when we make comments referring to pro forma comparisons we are including spot X and spring served for the realm.

<unk> pre acquisition period in order to provide a like to like comparison. Please keep in mind as it relates to spot X and spring sort of acquisitions. Prior quarterly results are estimated and unaudited 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 description.

And of these and other risks uncertainties and assumptions is set forth in the Companys periodic reports filed with the SEC, including our first quarter 2022 quarterly report on Form 10-Q, and our 10-K.

We undertake no obligation to update forward looking statements or relevant risks. Our commentary today will include non-GAAP financial measures, including revenue 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.

In our financial highlights deck that is posted on our Investor relations website at.

At times in response to your questions. We may offer incremental metrics to provide greater insights into the dynamics of our business. Please be advised that this additional detail maybe onetime 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 take deck periodic SEC.

All reports and webcast replay of today's call to learn more about magnet I will now turn the call over to Michael Michael. Please go ahead.

Thank you Nick we delivered strong Q1 results in total revenue CTV revenue adjusted EBITDA and free cash flow and we're providing a positive outlook for Q2.

David will provide greater detail on Q1 results and Q2 outlook.

Thank you use my remarks today to focus on our broader strategic view of the industry.

Recently questions have been raised about the relevance of the sell side platform.

And where it might fit in a world where sellers can connect directly to buyers.

We've said before that we don't see these connections as a threat and today I'm going to go further and say that we see that as an indication that the SSP is becoming more valuable than ever and magnates independent omnichannel approach positions us to lead the group long term.

To understand our perspective I think it is helpful to explore the evolution of magnet and SSP is more generally first I'll focus on the role of the <unk> and then I'll transition to CTV.

Let's start nearly two thousands when programmatic wasn't yet is saying and display publishers made most of their money selling AD inventory directly which they book in their primary AD server, usually google's DSP.

They sell everything they could direct and throw the remaining impressions known as remnant into the bargain been where dozens of AD networks Jackie to get first look.

It was difficult and inefficient for publishers to predict which of these networks should make them. The most money. So in 2007 AD network optimizer, such as Rubicon project emerged to help publishers maximize the remnant yield.

And the 2000 tens as programmatic buying ramped up and DSP is gradually replace the AD networks.

Network optimize you retain the SSP managing yield across all indirect sources and offering an array of additional services such as tools for private deals add quality billing and reconciliation and real time reporting and controls.

In this era, most publishers partner lose one SSP relying on them to navigate a rapidly changing space and maximize what was quickly becoming a significant portion of their revenue.

In 2015 programmatic truly kicked into high gear, when publishers began calling direct and programmatic demand simultaneously known as header bidding.

The practice was difficult and manual, but it finally put programmatic on a level playing field and publishers, who were leaving far less money on the table.

In time.

<unk> learned that the more SSP as they call it in their headers the more money they made.

Which was once a valued one on one relationship became one of many and the SSP was pushed away from its core yield management role and towards something closer to an AD exchange.

At this time, we saw an opportunity to embrace the disruption by helping to make header bidding more transparent and flexible we co founded pre bid data ward and open source header bidding framework and once demand manager a suite of software that makes it easy for publishers to configure and optimize their pre bid headers.

Yeah.

As header bidding expanded even as buyers dramatically limited their connections to only the most credible ssp's it became increasingly clear to buyers.

The header model was inefficient and expensive as it required them to bid against themselves. So the same impression across multiple exchanges.

The trade desk <unk> recent announcement of development path is in many ways in response to these inefficiencies.

Attempting to acquire supply directly from the very largest publishers.

Some publishers will add open passenger demand source, we expect it will be supplementary to other sources and pads not a replacement for that.

After all it's not just the trade desk or even just DSP is looking for more direct access to publishers. It's also agencies.

As a result, large publishers will need to manage and optimize a growing list of newly minted direct connections with buyers.

Something they can't do by adding another SSP into the header instead, they will need to partner with one scaled unconstructed SSP to unify the auction.

<unk> yields and deliver a full suite of seller focus tools, including the ability to embrace and activate the shift towards sellers centric audience and identity.

In many ways. This was a return to the one on one publisher SSP relationship that preceded header bidding and.

And for several reasons no platform is better positioned to lead in this role then magnet.

First our deep expertise in pre bid now the pre eminent header bidding standard in our work enhancing and expanding it with double demand manager puts us in a unique position to be the clear leader for yield management across every type of demand.

<unk> display audio and video.

We've only just begun to scratch the surface on maximizing the value of each impression through machine learning and AI.

Second as the industry moves away from the third party cookie and other buy side identifiers.

Towards solutions that are sellers centric.

Our robust audience technologies bolstered by our recent acquisitions of <unk> Party and carbon.

In our deal management tools, which are among the best in the business will enable publishers to activate and monetize their audiences across every media tight with an eye towards privacy and security.

Third our relationships with brands and agencies are strong and continuously growing.

Which benefits our seller clients by bringing them, new and unique pools of demand. Our recently announced preferred partnership with group <unk> is a great example of this.

And lastly, magnates omnichannel footprint enables us to meet our clients' needs across a wider range of channels and formats, including CTV.

Each other ssp's talk about doing but no independent SSD can match, our full stack of capabilities in this area.

And that's a good transition to CTV, which is fundamentally different from TV plus and how it operates.

Because CTV is a world in which there is a finite amount of available inventory.

And viewer experience takes precedence over CPM.

There isn't the same need for header bidding.

Direct selling plays a dominant role in CTV, and probably always well even if the means of executing these direct sales is increasingly programmatic.

Many cases Theres no auction at all for this reason our clients prefer to work, primarily with Magna and they look to us to provide far more than the highest bid.

We have a track record of building custom software and unique features for a broad range of CTV industry players.

These range from device manufacturers and Oems, such as LG, Vizio, Samsung and Roku to virtual mvpds, such as <unk>, Hulu Sling and Directv.

To digital first and free AD supported streaming TV services, like Pluto, TV, and crackle and broadcasters and programmers such as Disney Discovery Fox in A&D.

For many of these companies were not just helping them sell or serve the ads, but more importantly to manage a highly complex series of decisions that balance revenue targeting and enforcement and business rules, while fiercely guarding viewer experience and publisher data.

Moreover by.

Integrating our proprietary AD server spring serve we offer CTV sellers, a holistic yield management solution that drives value across our entire AD business by dynamically allocating between programmatic and non programmatic inventory.

And we are constantly innovating to solve the evolving needs of CTV sellers for example through spring <unk> newly announced binge watch your product a tool set to rapidly review creatives and improve the user experience.

We see our ability to address the nuance needs of CTV clients to advanced software solutions as a formidable barrier to entry for our competitors.

In the final analysis at magnet, we believe strongly in two key principles. One all media display CTV audio you name it will be bought sold or executed programmatically and to sellers will always need a scaled and unconvicted agent.

To help them make the most of every programmatic opportunity.

Debt on magnet is a bet on these principles.

With that I will hand, the call over to David who will provide additional detail regarding our financial performance and expectations.

David.

Thanks, Michael.

Despite macro headwinds we are pleased that Q1 revenue came in consistent with our guide.

Adjusted EBITDA came in above our implied guidance.

<unk> and strong cash flow and non-GAAP earnings per share.

We also see this translating into solid guidance for Q2, but I'll cover after I discuss our first quarter results.

Total revenue for Q1 was $118 1 million.

Revenue ex Tac was $107 1 million up 79% from Q1 2021 on an as reported basis and up 15% on a pro forma basis.

CTV revenue ex Tac was $42 3 million in Q1 2022.

Up from $12 million or 253% from last year on an as reported basis and up 27% on a pro forma basis.

Mobile revenue ex Tac grew 12% and desk top revenue ex Tac grew 3% year over year, both on a pro forma basis.

Our revenue ex Tac mix for Q1, 2022, with 40% CTV, 35% mobile and 25% desktop.

Operating expenses, which in our case includes cost of revenue for the first quarter.

Or $157 $9 million.

Versus $74 $5 million in the same period a year ago.

Increases were primarily driven by the acquisition of <unk>, including the amortization of acquired intangibles.

And by increase in personnel related expenses.

Adjusted EBITDA operating expenses, which represents the difference between revenue ex Tac and adjusted EBITDA was $78 2 million for Q1, an increase of $3 7 million sequentially and up from $50 million. In Q1, 2021 also driven primarily by the acquisition of Spartech and a year over year compare.

Arison.

For the first quarter were lower than expected, primarily driven by slower hiring.

And with the overall labor market, lower technology, and cloud cost and lower office and travel expenses in the quarter.

Net loss was $44 $6 million in the first quarter of 2022 as compared to a net loss of $12 9 million in the first quarter of 2021.

The increase in net loss was primarily attributable to an increase in amortization of acquired intangibles related to the <unk> acquisition, which had no cash impact.

Q1, 2022, adjusted EBITDA was $28 8 million, an increase of 208% versus prior year, resulting in a margin of 27% as compared to adjusted EBITDA of $9 $4 million or margin of 16% in the first quarter of 2021.

This was driven by continued organic revenue growth and by the acquisition of <unk>.

Note that we calculate our adjusted EBITDA margin as a percentage of revenue ex Tac.

GAAP loss per share was 34 for the first quarter of 2022 compared to GAAP loss per share of <unk> 11 in the same period in 2021.

non-GAAP earnings per share in the first quarter of 2022 plus eight.

It was up compared to non-GAAP earnings per share of <unk> reported for the same period in 2021.

There were $132 2 million weighted average basic and diluted shares outstanding for the first quarter of 2022.

Fully diluted shares utilized for non-GAAP earnings per share for $143 7 million for the first quarter of 2022.

Capital expenditures, including both purchases of property and equipment and capitalized internal use software development costs were $8 7 million for the first quarter of 2022 in line with our expectations.

Operating cash flow was $21 million in the quarter, which we define as adjusted EBITDA less capex.

Our interest expense for Q1, 2020 to $7 1 million.

Of which roughly $5 7 million was cash.

At the end of Q1, we had $204 $6 million in cash on the balance sheet.

For Q1, our cash outflows included $21 million for our acquisition of carbon.

Our priorities for the deployment of capital remain balanced and have not changed.

Regarding M&A opportunities, we believe that we have the core assets that we need at this point in time.

Though we will always consider tuck ins or aqua hires that would expand our talent pool or accelerate our product features and functionality such as our recent acquisitions of <unk> Party and carbon.

Regarding debt, we continue to reduce our net leverage ratio, which was approximately three onex at the end of Q1 as compared to $6 <unk>.

At the time, we close to spot X at the end of April last year.

This represents further progress towards our ultimate goal of <unk> or less.

As it relates to our $50 million share buyback program announced in December we repurchased 931000 shares for $12 million in Q1, leaving $31 9 million in the program at the end of the quarter.

In addition for our regular RSC vesting during the quarter, we utilized the withhold to cover method to cover employee taxes.

Holding 315000 shares for $4 million.

As a result share dilution it was reduced by about one 2 million shares during the quarter.

We expect to continue a balanced approach to reducing leverage and share repurchases throughout the remainder of 2022.

I will now share our future expectations wed.

We'd like to reiterate that we expect revenue ex Tac for the full year 2020 to be well above $500 million.

We expect revenue ex Tac for the second quarter to be in the range of $123 million to $127 million.

We expect revenue ex Tac attributable to CTV for the second quarter to be in the range of $51 million to $53 million.

We expect adjusted EBITDA operating expenses in Q2 could.

It could be $83 million to $85 million implying.

Implying an adjusted EBITDA margin of 33% at the midpoint.

The sequential increase in adjusted EBITDA operating expenses is primarily driven by an increase in technology infrastructure costs.

<unk>, a full quarter impact of our return to office and the return of TNT and marketing events.

For the second half of 2022, we expect quarterly adjusted EBITDA operating expenses to increase roughly $3 million to $4 million each quarter.

These increases are primarily the result of return to office costs and increased head count and other technology operating costs to support our growing business.

We continue to expect that Capex for 2022 will be between 40% and $45 million.

And for 2022, we continue to expect that we will generate over $100 million in free cash flow.

We define free cash flow as operating cash flow less cash interest payments.

We continue to target long term annual revenue ex Tac growth of 25% and adjusted EBITDA margins of 35% to 40%.

We're very pleased with our results for the first quarter of 2022 and are optimistic about our growth trajectory, especially in the back half of the year.

We have a very attractive financial model and expect increasing flow through over time from revenue growth to adjusted EBITDA margin expansion to free cash flow.

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

Thank you.

We will now begin the question and answer session to ask a question you May press star one on your telephone keypad.

If youre asking I'm sorry, if you are using a speakerphone. Please pick up your handset before pressing the keys.

If at any time. Your question has been addressed and you would like to withdraw your question. Please press star two.

At this time, we will pause momentarily.

Symbol roster.

The first question comes from the line of Laura Martin with Needham. Please go ahead.

Hi, there, let's start with <unk>.

Sure.

Do you feel that Netflix, adding an add here and Disney earlier than that adding an add here.

It's good for the ecosystem cost per thousand or bad like and I'm looking at sort of short term long term could you speak to these big streamers, adding add tiers in the next 12 months.

Hey, Laura it's Michael.

Ill jump on that.

David can pile on if you'd like.

I see it as nothing but good.

Hi.

Inventory.

Dollars are just starting to shift from linear into CTV and.

<unk> be an inexorable March as more and more consumers decided to consume their entertainment news sports and that in that manner.

I think that.

They're going to be measured.

In the AD load and so even though the scarcity in the market today, it's not exactly inflating prices I think.

With Cpm's now is.

Advanced targeting and that you are able to do versus what linear always had so I think over time, even though it's more inventory I don't see it having a dramatic impact on CPM because of adding more supply into the marketplace.

David anything from you.

Got it covered now.

Okay.

Excellent that's super helpful. And then separately you said in your prepared comments, Michael that we thought everything was going to be programmatic and the second thing you said with sellers will always needed independent sell side platform. So.

Just wanted to push on that a little bit because we have Andy do you have any captive.

<unk> and freewheel and now we have the standard being bought by Microsoft and I do get questions from investors about why does Disney just INR 15, and doing it itself. So when you said the second thing is yes.

Sellers will have to have an independent platform is that really been borne out by the largest sellers do you think.

Well I think that are the meaning there Laura was at the end of the <unk>.

Vast majority of publishers don't have.

Means <unk> ability to land.

Major Tech player.

Bring in house.

Obviously always examples of folks that do it and then of course, the pendulum swings both ways.

Microsoft picked up standard from AT&T, who tried <unk> tried to do in house.

That didn't work out so great and.

Factset unruly and they've said that in all piece has been rumored to be looking to move.

And so I think these things are somewhat cyclical, but arent meaning is that.

I think folks have learned when they put all their eggs in one basket in the divi plus world.

As it relates to Google.

A little over the course of 2014 years, they learn that it wasn't the most efficient way and they broke the system by doing pre bid and bring your header bidding into the world.

<unk>.

It's not worse than folks that.

If your partners independent isn't in conflict with <unk> doesn't own inventory doesn't sell ads against other inventory and thats in their transparent and above board I think that.

Our meaning of that is that the vast majority of publishers need that type of a profile of the company.

Super helpful. Thanks, very much.

Thanks, Laura.

Thank you. Our next question is from the line of Jason <unk> with Craig Hallum. Please go ahead.

Alright, thanks for taking the questions guys. So kind of an inline Q1 from the topline perspective, but when we look at the Q2 guide that looks a lot more robust, particularly on the CTV side. So just curious if maybe you can parse out.

The puts and takes on what you saw last quarter versus how things are progressing kind of a month into Q2 here.

Yes, I'll take it first and then.

David can help as well.

Yeah, So Jason I think that look we saw the same impact that others did.

In the.

The face of the crisis in the Ukraine.

Our CPM is across the board.

Particularly in EMEA.

Plunged dramatically.

Dig.

TG multinational corporation, that's kind of it's suspended spend.

And so.

We had definitely had.

Headwind impacts on Q1 results and when we see it continuing into Q2, but what changes about Q2 well.

Obviously.

We think that there's going to be some eating of political that's going to kick in for <unk>.

Mid terms.

We also think that we've seen some strengthening in some verticals.

That hadn't.

And then back to normal since the pandemic.

We also see some.

<unk>, our managed service business on the CTV side.

With the return to some of the.

AD verticals I wouldn't say, 100% return by any stretch, but strengthening so so we feel we feel good about.

Q2.

<unk> uptake over Q1, I don't know David if you have any more specificity.

Yeah, I think that's right I think.

I would still say cautiously optimistic in Q2, just because theres so much.

Going on but certainly as Michael mentioned, as we especially get into the latter half of the year with the political.

Our group an spo deal.

We are continuing to.

The upfront process agencies are really going to be pushing for greater amounts to run through.

Programmatic and and the feedback that we're getting from agencies has some optimism in the second half.

With with spending and some committed committed budgets.

David I'm wondering if maybe you can just quantify that impact that.

Our EMEA might have had in Q1 that you or your Q2 guide.

Yes, a couple of factors that that we're observing.

One is we had a small number of Russian publishers.

We no longer have.

On the exchange.

Had a smaller impact.

Also seen some softening of Cpm's, particularly.

In our DB plus business in EMEA, and we think that comes from from.

Suppose some general skittishness around the Ukraine situation also a lot of advertisers don't.

I don't like to be advertising around these kinds of events, so even though theres a primary inventory.

There isn't as much advertising demand and.

And also <unk>.

Strong dollar so we've had we not or we don't see significant impacts from the normal.

Sex volatility, but there has been a very significant strengthening in the dollar.

And so we've seen.

So that impacts those those cps as well.

Perfect and then just a follow up from me so any updates on the relationship with Disney kind of looking at this two ways just first any indications in your potential involvement with an AD supported Disney plus and then second I know, we're starting to approach the term on that 18 month agreement from a year ago. So just curious if you have any thoughts on <unk>.

That engagement goes from here.

Yes, Jason the relationship remains.

Credibly strong.

The.

Ed.

Renewal is coming up as you pointed out but we.

Don't perceive.

Any material change there.

As for Disney Classic biggest it validates the model right.

Idea of having an AD supported tier.

And although it's obviously Disney's decision and how they go to market with Disney plus and the other streaming assets. Our understanding is it's all going to be available through <unk> and obviously, we powered a nice chunk of that and so therefore.

We see it as nothing but a positive opportunity.

Perfect. Thank you.

Okay.

Thank you.

Our next question comes from the line of Sean <unk> with Susquehanna.

<unk> Financial group. Please go ahead.

Hey, guys nice quarter and outlook at a couple of questions.

Michael when you were talking about the ecosystem in your prepared remarks, you talked about.

Independent becoming more valuable.

I know you talked about a little bit in the first question, but can you just talk a little bit more about what kind of conversations you're having now with your larger publisher partners.

Given open path and what do you foresee in terms of economics and market share for magnate going forward kind of related related to open path and then second question.

In terms of CTV.

How are you guys thinking about the pro forma growth there throughout the year I know you are cautiously optimistic lot of moving parts, but how are you guys just thinking about the pro forma growth for CTV throughout the year end.

Generally speaking at a high level, what do you think is the right kind of baseline as we as you guys think about this business over the next few years I know you said at least market growth rates, but is it are you still thinking like 30% plus 40%, 50%. How are you thinking about this growth opportunity.

You.

Yes sure.

So.

I'll, let David take the pro forma growth for CTV, but.

As it relates to open path.

I think it's and it's nascent.

The formation.

We haven't heard much from.

Publishers other than the folks that were listed that we're going to take part in the beta.

I think that as we pointed out in our remarks.

Others will seek direct path, particularly agencies I think agencies feel that that part of their value to their advertising clients is their relationship with publishers.

The challenge is a lot of them don't have the technology to work directly with publishers and that's why I think you see deals like the group them deal that we announced in the <unk> deal, we talked about in IPG and advice.

Working with a technology partner to be to try to work their way out of like a header bidding open auction and more of a structured relationship with the publisher is a trend that is only going to continue it adds a degree a degree of complexity for our publishers and that's why we think that our.

<unk> is that an SSP will never be more valuable because they are the ones that can help manage this.

<unk> and manage the yield of the complexity and the other thing that we're seeing in terms of the conversations of the publishers is a growing appetite for.

Publishers centered first party data.

To be completely candid.

As a third party cookie exists is going to be hard to make that like revolutionary it might be evolutionary but once the cookie is deprecated I think youre going to see a big rush to first party data being readily used by buyers that's provided by the sell side.

Tools the tools that we've acquired are going to play an integral role in that so.

Quite excited about those developments.

David maybe you want to talk about the pro forma growth CTV expectations.

So we grew pro forma.

<unk> in Q1 at 27%.

And as we mentioned.

In the second half of this year, we have some really significant tailwind and so we see upside certainly to those.

Those growth rates.

And.

We've always talked about the CTV business being very volatile it's nascent.

That will continue but we do believe that over time, our growth rates should definitely.

Exceed those of market, which I think folks handicap and theyre in the low 30% range right now and so.

Should we.

We should take our share and then some.

Market continues.

Thank you guys.

Yeah.

Thank you. Our next question comes from the line of Tim Nolan with Macquarie. Please go ahead.

Thanks, very much I'd like to pick up on the Q2 guidance again please.

Last couple of quarters, you've talked about a few supply chain issues in the auto business. It sounds like that seems to have moved past you know and in fact seems to be something positive. If theres anything you could give us a bit more in terms of that or any other sectors that are affecting your Q2 number because on a very difficult comparison actually in Q2 I think it is fair.

Nice to see a 25%.

<unk> growth forecast for the top line and then Relatedly the new fronts in the Upfronts are upon US now I just wonder if there is any.

Particularly the role you could point to that Youre, playing in that process and if there's any news flow to look forward to as this upfront season is upon us.

Thanks.

Okay.

Yes, I'll start with the key.

Oh go ahead.

No.

Okay.

Yes, I think on Q2.

We're still seeing.

I don't know that were really past the issues that we've talked about it I think.

Supply chain and particularly auto.

<unk> remains a challenge.

Not sure that that gets resolved fully this year.

So we see continued headwinds there.

Yes.

The Ukraine situation I think still has a.

Bit of a dampening effect.

Particularly in our EMEA business so.

We factored that into our guide I think where we've seen improvement I think travel in particular.

<unk> has had some rebound still not fully back to pre COVID-19 levels by any by any margin but.

We've seen we've seen significant improvement there and have expectations for growth there.

Yes, Timna I'll comment on the new front upfront, yes, so they've just got kicked into gear.

I would say that the biggest difference this year than in previous years is the kind of direct involvement of players like magnay in the conversation as it relates to.

Chunks of the Upfronts being allocated.

Programmatically and I think if you look at the group them premium marketplace and their partnership with us there.

I think youre going to.

We certainly hope that that will have an impact in terms of.

Moving dollars over whereas before the upfront you would conclude.

Much.

Historically, they have and then.

Programmatic would probably play much more in the spot world.

There's many many more conversations regarding having programmatic front and center in the.

<unk>.

Actual upfronts itself the guaranteed world so.

Yes, it's a nice development early stage.

Sure that there'll be a milestone announcements or events, but hopefully it would play through in our back half numbers as David kind of alluded to in his.

Prepared remarks.

So if I could have a quick follow up on that please Michael so does that mean.

More direct deals now being done with a programmatic component, which is just naturally good for your business and would there be as opposed to.

I guess, it kind of falling to remnant spot inventory kind of over time. This is kind of what you were saying just to make sure I understand that.

Yes, that's correct.

Buyers, who have always wanted this right and it was it changed or.

Sellers are who they are linear.

Our strategy is the broadcaster programmers.

So what youre seeing now is that that much.

Much more of a.

Kind of a mutual agreement at the table at the bargaining table during the upfront about a chunk of the dollars being allocated programmatically as part of the guarantee so.

Sure.

Agency, you're guaranteeing when our broadcast there is $50 million you in the past wanted somebody to go programmatic, but it was never part of the deal you are seeing more and more of the.

<unk> debt.

We agree that blank is going to be served programmatically and so thats yes.

Yes, that's it.

The maturation that we thought was going to happen in the business.

And I think again with deals like the group M deal Youre going to eat that shows you how invested they are wanting to.

Transact business why it this way.

Alright, and that would presumably be good news and any news that we do get in the next two weeks or whatever it would presumably be good across the next several quarters and because this would be deals being struck across the upcoming TV.

TV seasons right over the next three quarters.

Got it.

That's exactly right yes.

Okay. Thanks.

Thank you. Our next question comes from the line of Matt Swanson with RBC capital markets. Please go ahead.

Yes.

Alright. Thank you so much for taking my question.

Michael if I could ask my quarterly Divi plus question.

I know last quarter, you didn't really want to get.

<unk> of the investments, but could you maybe just comment for us how you feel about the progress you're making on those investments that you've done or maybe what sort of returns you are starting to see so far.

Yes, Matt.

Great question.

I think that.

As we've talked about this in the past.

TV plus and in a world where you're transacting.

Hundreds of millions of auctions.

Every little bit tweak here or tweak there.

<unk>.

Improvement.

And if you look at the laundry list.

Uh huh.

<unk> numbers into the hundreds of things that you can constantly redoing some of it is fixing things other is innovating on things.

<unk>.

Speed of auction.

Your hardware settings.

All the way to making sure that the plumbing is clean and the connections are good with the buyers and the sellers. So.

It's an ongoing effort.

I wish there was a seminal.

Product or project that we could point to that once it's completed.

It unlocks the floodgates, but it's a it's a constant areas.

Maintenance for us innovation for us and admittedly an area that was under.

Maintenance or innovated over the years as we.

<unk> acquired the CTV asset so we have some catch up to do.

I'm pleased with the focus on it.

Our results can get better and improve over time, so I think that.

We analyze where we can.

Gain improvement, where our highest return.

For investment will be and are well down the path in those areas.

That's super helpful. And then this is probably a little bit David a little bit Michael.

But when we're thinking about the full year guide and you mentioned Q2, starting to see some political obviously the TV environment has changed so much since the last midterm cycle and it feels to me like mid terms might be a little bit better position that general election for you because of the emphasis on targeting right because they are all.

Regionalized elections can you just talk a little bit maybe about how youre thinking about.

<unk>.

Political spend this year and whether or not you do think there could be a bigger shift towards <unk>.

Yes, I think we feel as though.

If and when we see the impact of political spend for the mid terms it will be predominantly through CTV.

There'll be some online video bought as well, but I think CTV will be our primary focus and you're right it'll be highly directed in those battleground states.

And.

You probably saw.

Ah released with that the folks from Scripps who were bundling inventory from other non Scripps stations to create a bigger pool of available inventory in those markets and they are working exclusively with us on that and so.

Of course, we have our direct team in the middle markets in those states are working with the agencies that are special specialize in.

Spending so our best guess is that this mid term probably will behave more like a general election.

Two years ago than it will like a traditional mid term, especially as it relates to CTV. So so yes, we're cautiously optimistic that we're going to see some flow through in Q2, and certainly in the back half of the year.

David if you have any other thoughts or specifics.

I think you covered it I think there'll be some flow through in Q2 I don't.

It won't be Super significant I think the vast majority of it will be Q3 and.

In Q4, and yeah as far as the volume of spend Michael mentioned, maybe similar to the presidential and with this recently leaked the news on ROE V. Wade.

Supercharge that spend as well so.

Time will tell.

Alright, guys Thats Super helpful. Thanks for the time.

Thank you.

Next question comes from the line of CME, Jonathan with Cannonball Research. Please go ahead.

Thank you good afternoon I wanted to ask a question about political.

My question is if you look at broadcasting companies.

<unk>.

And he is once they have strong political spending non political advertising revenue.

Growth is usually depressed from what the coal displacement Wednesday, because political campaigns.

Not price sensitive, but just outbid nonpolitical.

Political advertising so given that you.

Probably more on the.

Supply constraints side are you.

Seeing anything like that with the scenario that you're thinking about that it might not be 100% additive when all we expect a political comes in so I know we're in uncharted waters, but would appreciate your thoughts.

Okay.

Mythili.

Very keen observation.

There is far less supply constraint in online video. So I think what you see in the online video is that Theres just.

Theres always a lot of inventory and therefore this a lot less displacement in CTV I. Thank you.

You do see some displacement, but I think that that.

Any displacement is more than made up for as you pointed out there's not a lot of price elasticity as it relates to CPM and so youre seeing.

Higher CPM and so although.

And even though inventory.

Generally speaking is very tight in the CTV world, It's not always all sold.

And theres different day parts and things like that where political maybe less sensitive about running it and so I think that.

All in all.

We have seen historically that even if there is displacement it's a net positive because of the rates.

As it relates to.

<unk>.

So if I just.

Just a follow up if we look at the previous political cycle did you see any displacement at all I'm just curious.

Yes, I mean, I think that generally speaking, especially if you get into Q4.

So right at the tail end of the election cycle.

Those are pretty tight windows anyway, and so.

There was certainly.

There were certainly.

Some displacement there.

But as I said before it was it was still a good guide because of.

The rates of displaced these buyers.

Sure.

Significantly higher than market.

Right well, thank you very much.

Thanks.

Thank you. Our next question comes from the line of Nick <unk> with.

Stephens. Please go ahead.

Yeah, Hey, guys.

<unk>.

Thinking about these new <unk> services, you touched on this a plus but with regard to Netflix maybe Apple TV plus just in general if you could comment.

And how do you think about your ability to win new business.

For these large streaming services how long.

Do you suspect it would take to go from having absolutely nothing to something.

With regard to building an ad business.

Yeah, Hey, Nik.

On that one so.

Yes, it's a very fair question and then of course, you start to ask are you.

Launching in the USA launching in foreign countries.

If you never had an AD business before.

It's hard to predict how long it would take especially if youre starting from scratch, but one would say it's.

Obviously.

A multi quarter journey given.

Given the fact that yes.

I haven't even.

Pitched.

Your customer base on this tier.

Tried to figure out what the cannibalization might be et cetera, et cetera. So I think that there is.

There's a lot more that goes into it obviously than just add technology, but as it does relate to add technology I think we are in.

Extraordinary well positioned.

We talk about all the assets that we have and not just doing the traditional work of bringing demand like an FSP to fill these ad.

<unk>.

But having the server to actually serve them and Theres, one thing everyone needs or it doesn't matter, if you're a legacy broadcast or or a new program or a platform you need an AD server you need something something that can serve had since youre going to get into the AD business. So at the very minimum we have the leading CTV AD server.

And especially if you don't have a legacy business.

Not really.

Our need for a server that was built in the online video world that meets the conditions and rules that broadcasters needed to spreads.

Thread the needle between linear and streamed so I think we feel really good about.

The company that we've built and obviously every day, we're helping these new services I get off the ground and sell ads and some of them have a direct sales team where the rules of engagement.

The structured and others don't have any.

Direct sellers and they rely upon us for the vast majority of their demand so.

I just think it's a validation for the company and we built it to validation on the for the consumer in terms of a choice right.

I think we.

We really enjoyed the position we have in the marketplace right now.

I agree it's good to hear.

Just one more from me you briefly touched on it but.

Any update just with regard to the construction of the seller defined audiences.

Maybe specifically within CTV utilizing that first party data from publishers.

You guys do you guys keep making acquisitions here.

For sure. So are you are you monetizing audience segmentation and creation at all yet and maybe you could just comment.

On the overall roadmap.

Within seller defined audiences.

Yes so.

Early days as I said before.

One of the earlier questions.

As long as a third party cookie world exists.

It's hard to.

<unk> generate enough urgency on the publisher side.

It's a need that necessarily doesn't.

Match.

What buyers want but at the minute third party cookies going away buyers, who desperately going to need these targeting parameters and so that's where the.

Publisher gets in so what we're doing is building for that future. We know it's coming we know that.

It will happen it will be multiple solutions, but we feel very good about the assets that we have and the work that we're doing right now on those assets, we do a ton of data.

The data overlays and CTV right now some of it first party a lot of it third party.

So I would say CTV is even more advanced and D request as it relates to data oriented packages and.

Quite easier frankly.

And probably more valued audiences just given the wide did nature of the user rate.

Many many open web sites and apps don't have a rising component and it makes you know profiling and audience a little bit more difficult than the wagon user approach of CTV and so yes.

In CTV youre going to find that thats going to quickly move to the front and center.

<unk>.

Buyer needs because of the displacement of the cookie.

Great I appreciate it guys. Thanks good luck.

Thanks.

Thank you next.

Next question is from the line of Matt Duncan, but.

<unk> Securities. Please go ahead.

Hey, good afternoon guys.

Maybe two if I could first on.

Excuse me trade desk moving away from Google Open bidding I know, it's still fairly early but I'm curious what you're seeing in terms of impact I think the.

Thinking had been from you and some of your peers that it could be neutral to positive I'm kind of curious what the early read is there and then just secondly, any update on the merged platform taking kind of the best of hilarity of the best spot X I think you've talked about having that out fully in the market I think as.

Bye Bye <unk> 'twenty three so I'm, just curious how how thats progressing.

What might happen once that's fully launch is there any benefits from a share gain standpoint from a cost efficiency standpoint, just any any.

Color there would be helpful. Thanks, guys.

Yeah, Hey, Matt so as far as there'll be as concerned trade.

Yes.

Definitely has moved away from it we can see.

Flow of money from trade desk through Ob has.

Kind of gone down to a trickle the reality is Google trade desk it moved away from open bidding.

Incrementally over the last year and a half.

They came to all the Ssp's and they went to publishers and they basically said hey, we're buying your inventories through multiple paths.

We've taken a look at it in the most efficient path is pre bid or the most efficient path is Amazon and so we're switching.

Our dollars over to those pads and so <unk> was not a huge contributor.

Foreign magnate drew from a trade desk spend standpoint.

It's kind of hard to track it as to whether or not.

It's flown three pre bid.

And it's also too early to see if.

Hundreds of Ssp's that were in the <unk> program.

If that shift of share to the.

Validated ssp's of which magnates one of them for trade desk.

That hasnt resulted in any huge wish right now, but I do think again very early days and we could be seeing it just.

Pre bid and that recognizing the specific dollars.

And as far as the platform consolidation concern.

Continues.

At pace.

That timing is around right.

As you know.

Not just dependent upon us it's when the publishers are going to be able to allocate the resources to move to the new platform and so we've always felt as though Q4 indicators will be a cutoff for any migrations and so we will be migrating clients into.

2023 Q1 for sure.

And.

<unk> two.

<unk> appointed direct revenue boost.

Difficult, we'll probably be able to educate.

You and others more as they.

Platform comes online.

But I think if you build.

Nextgen platform that has all the bells and whistles and while the debt.

Everyone's asked for.

It just leads to more revenue opportunities in terms of access to inventory. So we feel pretty good about the path we're on there.

Yes.

Licensee perspective, you'll see that primarily in a more efficient.

<unk> technology infrastructure cost base.

Okay got you that's helpful.

Maybe one quick follow up and this has been I think touch on a couple of times, but I think that my question is I think when you think about some of the opportunities or changes out. There. So you know Disney launching native odd in the U S by fourth quarter calendar fourth quarter or the Warner discovery merger now being done when you think about your full year commentary.

And guidance and.

And we don't need to get into specifics, but I guess does that contemplate or take any take anything into account in terms of some of these incremental perhaps opportunities out there or would you landing when one of these or an increased role with one of these being incremental to kind of what you've talked about thanks guys.

Okay.

I think Matt you know whenever you.

Look at new business opportunities, you're kind of baking into a general forecast. So a lot of our business growth every year organic same store sales, but.

We always rely upon.

Of an unknown number out there that will come from new client relationships and so so I think by and large it's it's it's already baked into the forecast and that dam.

And these things tend to start off as you know.

Walk before you run types of relationships and so.

I think that.

I wouldn't necessarily say that.

A one particular client out there might you know.

<unk> dramatically increased revenue for for magnet.

Don't know David if you have a different view on that.

No I think that's right I mean, it certainly would add to our ability to take market.

Market share.

And but.

I think you've covered it.

Okay awesome.

Thanks, Matt.

Thank you.

This concludes our question and answer session I would now like to turn the conference back over to Michael Barrett, President and CEO for any closing remarks.

Thank you Robyn.

Like to thank every magnate team member for their hard work and efforts we have one of the best teams in the industry and their expertise and unmatched customer focus yielded a very differentiated leading company with comprehensive customer solutions, we continue to see and invest and clear areas for growth in CTV, TV, plus an audience and identity.

We've established ourselves as a critical long term partner for many of our publishers and buyers, especially in CTV and believe much of our future success lies in both our execution and in winning new business.

We've never been more excited about the opportunity we have ahead of us.

As we look at the back half of the year, we feel strongly that our selection by group and in CTV.

Disney plus recently announcing an AD supported alternative return of verticals such as travel and political spend are tangible examples of growth drivers for the quarters ahead.

Most all see TV streaming services have either launched or announced Avon offerings and even the largest subscription CTV streaming service has recently moved from a position of never to actively exploring it.

Thank you for joining us for our Q1 results call.

Look forward to talking to many of you at virtual Investor meetings hosted by say tomorrow conferences by Needham on May 17th and Craig Hallum on June 1st.

Have a great evening.

Everyone else. Thank you off the call.

The conference has now concluded. Thank you for attending today's presentation you may now disconnect.

Yeah.

[music].

[music].

Good evening and welcome to the Mcknight first quarter 2022 earning conference call.

All participants will be in listen only mode.

Should you need assistance. Please signal a conference specialist by pressing Star then zero on your telephone keypad.

After todays presentation, there will be an opportunity to ask questions.

To ask a question you May press Star one.

On your telephone keypad to withdraw your question. Please press star two.

Please note this event is being recorded.

I would now like to turn the conference over to Mr. Nick Carmela.

<unk> of Investor Relations. Please go ahead Sir.

Thank you operator, and good afternoon, everyone. Welcome to magnates first quarter 2022 earnings Conference call. As a reminder, the comparisons you will see in the 10-Q as reported include the financial results of spot X and springs or for Q1 2022, but for periods. Prior to the acquisition dates the results do not include spot X or <unk>.

<unk>, which were acquired on April 32021, and July one 2021, respectively for the course of this call when we refer to results and associated year over year comparisons with the phrase as reported we are referring to the basis as reported in our 10-Q, when I make comments, referring to pro forma comparisons we are including spot X and spring served for the rail.

<unk> pre acquisition period in order to provide a like to like comparison. Please keep in mind as it relates to spot X and spring sort of acquisitions. Prior quarterly results are estimated and unaudited 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'd 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 and discuss.

One of these and other risks uncertainties and assumptions is set forth in the Companys periodic reports filed with the SEC, including our first quarter 2022 quarterly report on Form 10-Q, and our 10-K, we undertake no obligation to update forward looking statements or relevant risks. Our commentary today will include non-GAAP financial measures, including revenue ex Tac.

<unk> 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 in our financial highlights deck that is posted on our Investor Relations website at.

At times in response to your questions. We may offer incremental metrics to provide greater insights into the dynamics of our business. Please be advised that this additional detail maybe onetime 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.

All reports and webcast replay of today's call to learn more about magnate I will now turn the call over to Michael Michael. Please go ahead.

Thank you Nick we delivered strong Q1 results in total revenue CTV revenue adjusted EBITDA and free cash flow and we're providing a positive outlook for Q2 David.

David will provide greater detail on Q1 results and Q2 outlook.

Thank you use my remarks today to focus on our broader strategic view of the industry.

Recently questions have been raised about the relevance of the sell side platform.

Where it might fit in a world where sellers can connect directly to buyers.

We have said before that we don't see these connections as a threat and today I'm going to go further and say that we see them as an indication that the SSP is becoming more valuable than ever and magnates independent omnichannel approach positions us to lead the group long term.

To understand our perspective I think it is helpful to explore the evolution of magnet and SSP is more generally first I'll focus on the role of the <unk> and then I'll transition to CTV.

Let's start nearly two thousands when programmatic wasn't yet is saying and display publishers made most of their money selling AD inventory directly which they booked in their primary AD server, usually google's DSP.

They sell everything they could direct and throw the remaining impressions known as amendment into the bargain been where dozens of AD networks Jackie to get first look.

It was difficult and inefficient for publishers to predict which of these networks should make them. The most money so in 2007.

AD network optimizer, such as Rubicon project emerged to help publishers maximize the remnant yield.

And the 2000 tens as programmatic buying ramped up and DSP is gradually replaced AD networks.

AD network optimize you retain the SSP managing yield across all indirect sources and offering an array of additional services such as tools for private deals add quality billing and reconciliation and real time reporting and controls.

In this era, most publishers partner, who has one SSP relying on them to navigate a rapidly changing space and maximize what was quickly becoming a significant portion of their revenue.

In 2015 programmatic truly kicked into high gear, when publishers began calling direct and programmatic demand simultaneously known as header bidding.

The practice was difficult and manual, but if finally put programmatic on a level playing field and publishers, who are leaving far less money on the table.

In time publishers learn that the more SSP as they call it in their headers the more money they made which was winter valued one on one relationship became one of meeting and the SSP was pushed away from its core yield management role and towards something closer to an AD exchange.

At this time, we saw an opportunity to embrace the disruption by helping to make header bidding more transparent and flexible we co founded pre bid data word and open source header bidding framework and launch demand manager suite of software that makes it easy for publishers to configure and optimize their pre bid headers.

As header bidding expanded even as buyers dramatically limited their connections to only the most credible ssp's it became increasingly clear to buyers.

The header model was inefficient and expensive.

It required them to bid against themselves. So the same impression across multiple exchanges.

The trade desk <unk> recent announcement of open path is in many ways in response to these inefficiencies by attempting to acquire supply directly from the very largest publishers.

There are some publishers will add open path as a demand source, we expect it will be supplementary to other sources and pads not a replacement for them.

After all it's not just the trade desk or even just DSP is looking for more direct access to publishers. It's also agencies.

As a result, large publishers will need to manage and optimize a growing list of newly minted direct connections with buyers.

Something they can't do by adding another SSP into the header instead, they will need to partner with one scaled unconstructed SSP to unify the auction optimize yields and deliver a full suite of seller focus tools, including the ability to embrace and activate.

The shift towards seller centric audience and identity.

In many ways. This was a return to the one on one publisher SSP relationship that preceded header bidding.

And for several reasons no platform is better positioned to lead in this role the magnet.

First our deep expertise in pre bid now the pre eminent header bidding standard in our work enhancing and expanding it with double demand manager puts us in a unique position to be the clear leader for yield management across every type of demand.

Cleaning display audio and video.

And we've only just begun to scratch the surface on maximizing the value of each impression through machine learning and AI.

Second as the industry moves away from the third party cookie and other buy side identifiers.

Towards solutions that are seller centric.

Our robust audience technologies bolstered by our recent acquisitions of <unk> Party and carbon.

And our deal management tools, which are among the vessels business will enable publishers to activate and monetize their audiences across every media tight with an eye towards privacy and security.

Third our relationships with brands and agencies are strong and continuously growing.

Which benefits our seller clients by bringing them, new and unique pools of demand. Our recently announced preferred partnership with Groupe Bam is a great example of this.

And lastly, magnates omnichannel footprint enables us to meet our clients' needs across a wider range of channels and formats, including CTV.

Which other ssp's talk about doing but no independent SSD can match, our full stack of capabilities in this area.

And that's a good transition to CTV, which is fundamentally different from DB plus and how it operates.

CTV is a world in which there is a finite amount of the available inventory.

And viewer experience takes precedence over CPM.

There isn't the same need for header bidding.

Direct selling plays a dominant role in CTV, and probably always well even if the means of executing these direct sales is increasingly programmatic in many cases there is no auction at all for this reason our clients prefer to work primarily with magazine and they look to us to provide far more than the highest bid.

We have a track record of building custom software and unique features for a broad range of CTV industry players.

These range from device manufacturers and Oems, such as LG, Vizio, Samsung and Roku to virtual mvpds, such as <unk>, Hulu Sling and Directv.

The digital first and free AD supported streaming TV services, like Pluto, TV, and crackle and broadcasters and programmers such as Disney Discovery Fox in A&D.

For many of these companies were not just helping them sell or serve the ads, but more importantly to manage a highly complex series of decisions that balance revenue targeting and enforcement and business rules, while fiercely guarding viewer experience and publisher data.

Moreover, by integrating our proprietary AD server spring serve we offer CTV sellers, a holistic yield management solution that drives value across our entire AD business by dynamically allocating between programmatic and non programmatic inventory.

And we are constantly innovating to solve the evolving needs of CTV sellers for example through spring <unk> newly announced binge watch your product a tool set to rapidly review creatives and improve the user experience.

We see our ability to address the nuance needs of CTV clients to advanced software solutions as a formidable barrier to entry for our competitors.

In the final analysis at magnet, we believe strongly in two key principles. One all media display CTV audio you name it will be bought sold or executed programmatically and to sellers will always need a scaled and unconvicted agent.

To help them make the most of every programmatic opportunity.

Debt on magnet is a bet on these principles.

With that I will hand, the call over to David who will provide additional detail regarding our financial performance and expectations.

David.

Thanks, Michael.

Despite macro headwinds we are pleased that Q1 revenue came in consistent with our guide.

Adjusted EBITDA came in above our implied guidance.

<unk> and strong cash flow and non-GAAP earnings per share.

We also see this translating into solid guidance for Q2, but I'll cover after I discuss our first quarter results.

Total revenue for Q1 was $118 1 million.

Revenue ex Tac was $107 1 million up 79% from Q1 2021 on an as reported basis and up 15% on a pro forma basis.

CTV revenue ex Tac was $42 3 million in Q1, 2022 up from $12 million or 253% from last year on an as reported basis and up 27% on a pro forma basis.

Mobile revenue ex Tac grew 12% and desk top revenue ex Tac grew 3% year over year, both on a pro forma basis.

Our revenue ex Tac mix for Q1, 2022, with 40% CTV, 35% mobile and 25% desktop.

Operating expenses, which in our case includes cost of revenue for the first quarter.

Or $157 9 million.

Versus $74 $5 million in the same period a year ago.

Increases were primarily driven by the acquisition of spot X, including the amortization of acquired intangibles.

And by increase in personnel related expenses.

Adjusted EBITDA operating expenses, which represents the difference between revenue ex Tac and adjusted EBITDA was $78 2 million for Q1, an increase of $3 7 million sequentially and up from $50 million. In Q1, 2021 also driven primarily by the acquisition of <unk> and a year over year.

Arison.

For the first quarter were lower than expected, primarily driven by slower hiring.

And with the overall labor market, lower technology, and cloud cost and lower office and travel expenses in the quarter.

Net loss was $44 6 million in the first quarter of 2022 as compared to a net loss of $12 9 million in the first quarter of 2021.

The increase in net loss was primarily attributable to an increase in amortization of acquired intangibles related to the <unk> acquisition, which had no cash impact.

Q1, 2022, adjusted EBITDA was $28 8 million, an increase of 208% versus prior year, resulting in a margin of 27% as compared to adjusted EBITDA of $9 $4 million or margin of 16% in the first quarter of 2021.

This was driven by continued organic revenue growth and by the acquisition of <unk>.

Note that we calculate our adjusted EBITDA margin as a percentage of revenue ex Tac.

GAAP loss per share was 34 for the first quarter of 2022 compared to GAAP loss per share of <unk> 11 in the same period in 2021.

non-GAAP earnings per share in the first quarter of 2022 plus eight.

It was up compared to non-GAAP earnings per share of <unk> reported for the same period in 2021.

There were $132 2 million weighted average basic and diluted shares outstanding for the first quarter of 2022.

Fully diluted shares utilized for non-GAAP earnings per share were $143 7 million for the first quarter of 2022.

Capital expenditures, including bulk purchases of property and equipment and capitalized internal use software development costs were $8 $7 million for the first quarter of 2022 in line with our expectations.

Operating cash flow was $21 million in the quarter, which we define as adjusted EBITDA less capex.

Our interest expense for Q1, 2020 to $7 1 million.

Of which roughly $5 7 million was cash.

At the end of Q1, we had $204 $6 million in cash on the balance sheet.

For Q1, our cash outflows included $21 million for our acquisition of carbon.

Our priorities for the deployment of capital remain balanced and have not changed.

Regarding M&A opportunities, we believe that we have the core assets that we need at this point in time.

Although we will always consider tuck ins or aqua hires that would expand our talent pool or accelerate our product features and functionality such as our recent acquisitions of <unk> Party and carbon.

Regarding debt, we continue to reduce our net leverage ratio, which was approximately three onex at the end of Q1 as compared to $6 <unk>.

At the time, we close spot X at the end of April last year.

This represents further progress towards our ultimate goal of <unk> or less.

As it relates to our $50 million share buyback program announced in December we repurchased 931000 shares for $12 million in Q1, leaving $31 $9 million in the program at the end of the quarter.

In addition for our regular RFU investing during the quarter, we utilized the withhold to cover method to cover employee taxes.

Holding 315000 shares for $4 million.

As a result share dilution it was reduced by about one 2 million shares during the quarter.

We expect to continue a balanced approach to reducing leverage and share repurchases throughout the remainder of 2022.

I will now share our future expectations.

We'd like to reiterate that we expect revenue ex Tac for the full year 2020 to be well above $500 million.

We expect revenue ex Tac for the second quarter to be in the range of $123 million to $127 million.

We expect revenue ex Tac attributable to CTV for the second quarter to be in the range of $51 million to $53 million.

We expect adjusted EBITDA operating expenses in Q2.

It could be $83 million to $85 million.

Implying an adjusted EBITDA margin of 33% at the midpoint.

The sequential increase in adjusted EBITDA operating expenses is primarily driven by an increase in technology infrastructure costs.

<unk>, a full quarter impact of our return to office and the return of TNT and marketing events.

For the second half of 2022, we expect quarterly adjusted EBITDA operating expenses to increase roughly $3 million to $4 million each quarter.

These increases are primarily the result of returned to office costs and increased head count and other technology operating cost to support our growing business.

We continue to expect that Capex for 2022 will be between 40% and $45 million.

And for 2022, we continue to expect that we will generate over $100 million in free cash flow.

We define free cash flow as operating cash flow less cash interest payments.

We continue to target long term annual revenue ex Tac growth of 25% and adjusted EBITDA margins of 35% to 40%.

We're very pleased with our results for the first quarter of 2022 and are optimistic about our growth trajectory, especially in the back half of the year.

We have a very attractive financial model and expect increasing flow through over time from revenue growth to adjusted EBITDA margin expansion to free cash flow.

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

Thank you.

We will now begin the question and answer session to ask a question you May press star one on your telephone keypad.

If youre asking I'm sorry, if you are using a speakerphone. Please pick up your handset before pressing the keys.

If at any time. Your question has been addressed and you would like to withdraw your question. Please press star two.

At this time, we will pause momentarily.

Symbol our roster.

The first question comes from the line of Laura Martin with Needham.

Needham. Please go ahead.

Hi, there, let's start with CTV.

<unk>.

Do you feel that Netflix, adding an AD tier and Disney earlier than that adding an add here is.

It's good for the ecosystem cost per thousand or bad like.

Looking sort of short term long term could you speak to these big streamers, adding add tiers in the next 12 months.

Hey, Laura it's Michael.

Ill jump on that.

David can pile on if you'd like.

I see it as nothing but good.

How the inventory.

Dollars are just starting to shift from linear into CTV and.

<unk> be an inexorable March as more and more consumers decided to consume their entertainment news sports and that in that manner.

I think that.

They're going to be measured.

In the AD load and so even though there is scarcity in the market today, if not exactly inflating prices I think.

With Cpm's now.

The advanced targeting and that you are able to do versus what linear always had so I think over time, even though it's more inventory I don't see it having a dramatic impact on CPM because of adding more supply into the marketplace.

David anything from you.

Got it covered now.

Okay.

Excellent that's Super helpful. And then secondly, you said in your prepared comments, Michael that you thought everything was going to be programmatic and the second thing you said with sellers will always needed independent sell side platform. So.

Just wanted to push on that a little bit because we have NBC have any captive.

Freewheel and now we have the standard be bought by Microsoft and I do get questions from investors about why does Disney just by necessity and do it itself. So when you said the second thing you see is that the sellers will have to have an independent platform is that really been borne out by the largest sellers do you think.

Well I think that our meaning there Laura was at the end of the.

The majority of publishers don't have.

Means <unk> ability to land me.

Major Tech player.

To bring in house.

There are obviously always examples and folks that do it and then of course, the pendulum swings both ways.

Microsoft picked up standard from AT&T, who tried <unk> tried to do it in house.

And that didn't work out so great and.

Fox said unruly and they've said that in all piece has been rumored to be looking to move.

And so I think these things are somewhat cyclical, but arent meaning is that.

I think folks have learned when they put all their eggs in one basket in the divi plus world.

As it relates to Google.

About a little over the course of 15 years, they learn that it wasn't the most efficient way and they broke the system by doing pre bid and bring your header bidding into the world.

I think that is.

Not at Westin folks that.

If your partners independent is in conflict with <unk> doesn't own inventory doesn't sell ads against other inventory.

In their transparent and above board I think that.

Meaning of that is that the vast majority of publishers need that type of a profile of the company.

Super helpful. Thanks, very much.

Thanks, Laura.

Thank you. Our next question is from the line of Jason Cryo with Craig Hallum. Please go ahead.

Alright, thanks for taking the questions guys. So kind of an inline Q1 from the topline perspective, but when we look at the Q2 guide that looks a lot more robust, particularly on the CTV side. So just curious if maybe you can parse out.

The puts and takes on what you saw last quarter versus how things are progressing kind of a month into Q2 here.

Yes, I'll take it first and then.

David can help as well.

Yeah, So Jason I think that look we saw the same impact that others did.

In the.

The face of the crisis in the Ukraine.

Our cpm's across the board.

Particularly in EMEA.

Plunged dramatically a lot of dig.

<unk>.

Multinational corporations kind of it's suspended spend.

And so.

We had definitely had.

Headwind impacts on Q1 results and when we see it continuing into Q2, but what changes about Q2 well.

Obviously.

We think that there's going to be some eating of political that's going to kick in for <unk>.

Mid terms.

We also think that we've seen some strengthening in some verticals.

And that Hasnt.

Been back to normal since the pandemic.

We also see some.

And our managed service business.

On the CTV side.

With the return to some of the important AD verticals I wouldn't say, 100% return by any stretch, but strengthening so so we feel we feel good about.

Q2.

<unk> uptake over Q1, I don't know David if you have any more specificity.

Yes, I think Thats right I think.

I would still say cautiously optimistic in Q2, just because theres so much.

Going on but certainly as Michael mentioned, as we especially get into the latter half of the year with the political with our group Ham Spo deal.

We're continuing to the.

The upfront process agencies are really going to be pushing for greater amounts to run through.

Programmatic and and the feedback that we're getting from agencies has some optimism in the second half.

With spending and some committed committed budgets.

David I'm wondering if maybe you can just quantify that impact that.

Russia EMEA might have had in Q1 or your Q2 guide.

Yes, a couple of factors that that we're observing.

One is we had a small number of Russian publishers.

We no longer have.

On the exchange.

Had a smaller impact.

Also seen some softening of Cpm's, particularly.

In our TV plus business in EMEA, and we think that comes from from.

As opposed some general skittishness around the Ukraine situation also a lot of advertisers don't.

I don't like to be advertising around these kinds of events. So we know there's a ton more inventory.

There isn't as much advertising demand.

And also.

Strong dollar so we've had we not only don't see significant impacts from the normal.

Sex volatility, but there.

Been a very significant strengthening in the dollar.

And so we've seen.

So that impacts those those CPM as well.

Perfect and then just a follow up from me so any updates on the relationship with Disney kind of looking at this two ways just first any indications in your potential involvement with them that support a Disney plus and then second I know, we're starting to approach the term on that 18 month agreement from a year ago. So just curious if you have any thoughts on.

Where that engagement goes from here.

Yes, Jason the relationship remains.

Incredibly strong.

The.

Renewal is coming up as you pointed out but we.

Don't perceive.

Any material change there.

As for Disney Classic.

It validates the model right.

Idea of having an AD supported tier.

And although it's obviously Disney's decision and how they go to market with Disney plus and the other streaming assets. Our understanding is it's all going to be available through <unk> and obviously, we powered a nice chunk of that so therefore.

You say there is nothing but a positive opportunity.

Perfect. Thank you.

Okay.

Thank you.

Our next question comes from the line of Sean <unk> with.

With Susquehanna Financial Group. Please go ahead.

Hey, guys nice quarter and outlook at a couple of questions.

Michael when you were talking about the ecosystem in your prepared remarks, you talked about India.

Independents, I think is becoming more valuable.

I know you talked about a little bit in the first question, but can you just talk a little bit more about what kind of conversations you're having now with your larger publisher partners.

Given open path and what do you foresee in terms of economics and market share for Mag night going forward kind of related related to open path and then second question.

In terms of CTV.

How are you guys thinking about the pro forma growth there throughout the year I know you are cautiously optimistic lot of moving parts, but how are you guys just thinking about the pro forma growth for CTV throughout the year end.

Generally speaking at a high level, what do you think is the right kind of baseline as we as you guys think about this business over the next few years I know you said at least market growth rates, but is it are you still thinking like 30% plus 40%, 50%. How are you thinking about this growth opportunity.

You.

Yes.

So.

I'll, let David take the pro forma growth for CTV, but.

As it relates to have been passed.

I think attendance nascent.

Formation.

We haven't heard much from.

Publishers other than the folks that were listed that we're going to take part in the beta.

I think that as we pointed out in our remarks.

Others will seek direct path, particularly agencies I think agencies feel that part of their value to their advertising clients is their relationship with publishers.

The challenge is a lot of them don't have the technology to work directly with publishers and that's why I think you see deals like the group them deal that we announced so the OMD deal we've talked about in IPG and Nebraska.

Working with a technology partner to be to try.

Try to work their way out of like a header bidding open auction and more of a structured.

Relationship with the publisher is it trend that's only going to continue it adds a degree a degree of complexity for our publishers and that's why we think that our thesis is that an SSP will never be more valuable because they are the ones that can help manage this complexity and manage the yield of the complexity.

And the other thing that we're seeing in terms of the conversations of the publishers is a growing appetite for <unk>.

Publisher centered first party data.

To be completely candid.

As long as the third party cookie exists is going to be hard to make that like revolutionary it might be evolutionary but once the cookie is deprecated I think youre going to see a big rush to first party data being readily used by buyers that's provided by the sell side and two.

The tools that we've acquired are going to play an integral role in that so.

Quite excited about those developments.

David maybe you want to talk about the pro forma growth CTV expectations.

Yeah. So we grew pro forma.

CTV in Q1 at 27%.

And as we mentioned.

Especially in the second half of this year, we have some really significant tailwind and so we see upside certainly to.

Those growth rates.

And.

We've always talked about the CTV business being very volatile it's nascent.

So that will continue but we do believe that over time, our growth rates should definitely.

Exceed those of market, which I think folks handicap and that in the low 30% range right now and so.

We should we.

We should take our share and then some.

Market continues.

Thank you guys.

Okay.

Thank you. Our next question comes from the line of Tim Nolan with Macquarie. Please go ahead.

Thanks, very much like to pick up on the Q2 guidance again please.

The last couple of quarters, you've talked about a few supply chain issues in the auto business. It sounds like that seems to have moved past you know and in fact, she has to be something positive. If theres anything you could give us a bit more in terms of that or any other sectors that are affecting your Q2 number because on a very difficult comparison actually in Q2 I think it's fair.

Nice to see a 25%.

Growth forecast for the top line and then Relatedly.

The new fronts in the Upfronts are upon US now I just wonder if there is any.

Particularly the role you could point to that Youre, playing in that process and if there's any news flow to look forward to as this upfront season is upon us.

Or not thanks.

Yes, I'll start with the key.

Go ahead.

No.

Okay.

Yes, I think on Q2.

We're still seeing.

I don't know that were really past the issues that we've talked about it I think.

Supply chain and particularly auto.

<unk> remains a challenge.

Not sure that that gets resolved fully this year.

So we see continued headwinds there.

Yes.

The Ukraine situation I think still has a.

Bit of a dampening effect.

Particularly in our EMEA business so.

We factored that into our guide I think where we've seen improvement I think travel in particular.

<unk> has had some rebound still not fully back to pre COVID-19 levels by any by any margin but.

We've seen we've seen significant.

<unk>, there and have expectations for growth there.

Yes, Tim.

And the new front upfront, yes, so they've just got kicked into gear I would say that the biggest difference this year than in previous years is the kind of direct involvement of players like magnay in the conversation as it relates to.

SCHUNK, so the upfront being allocated programmatically and I think if you look at the group them premium marketplace and their partnership with us there.

I think youre going to.

We certainly hope that that will have an impact in terms of.

Moving dollars over whereas before the upfront.

To conclude.

Pretty much.

Historically, they have and then.

Programmatic would probably play much more in the spot world.

There's many many more conversations regarding having programmatic front and center in the.

<unk>.

Actual upfronts itself the guaranteed world so.

Yes, it's a nice development early stage.

Sure that there'll be a milestone announcements or events, but hopefully it would play through in our back half numbers as David kind of alluded to in his.

Prepared remarks.

So if I could have a quick follow up on that please Michael so does that mean.

More direct deals now being done with a programmatic component, which is just naturally good for your business and would there be as opposed to.

I guess, it kind of fall into remnant spot inventory kind of over time. This is kind of what you were saying just just to make sure I understand that.

Yes, that's correct.

Buyers are always wanted this right and it was it changed or.

Sellers, who had their linear.

Our strategy is the broadcaster programmers.

So what youre seeing now is that that much.

Much more of a.

Kind of a mutual agreement at the table at the bargaining table during the upfront about a chunk of the dollars being allocated programmatically as part of the guarantee so.

Sure.

Agency, you're guaranteeing when our broadcast there is $50 million in the past wanted somebody to go programmatic, but it was never part of the deal you are seeing more and more of the.

<unk> debt.

We agree that blank is going to be served programmatically and so thats yes.

Yes, that's it.

The maturation that we thought was going to happen in the business.

Just that I think again with deals like the group M deal Youre going to eat.

That shows you how invested they are wanting to.

Transact business why it's this way.

Alright, and that would presumably be good news and any news that we do get in the next two weeks or whatever it would presumably be good across the next several quarters and because this would be deals being struck across the upcoming Tvs.

TV seasons right over the next three quarters.

Got it.

That's exactly right yes.

Okay. Thanks.

Thank you. Our next question comes from the line of Matt Swanson with RBC capital markets. Please go ahead.

Yes.

Alright. Thank you so much for taking my question.

Michael if I could ask my quarterly Divi plus question.

I know last quarter, you didn't really want it.

<unk> of the investments, but could you maybe just comment for us how you feel about the progress youre, making on those investments that you've done or maybe what sort of returns you are starting to see so far.

Yes, Matt.

Great question.

I think that.

As we've talked about this in the past.

TV plus and in a world where you're transacting.

Hundreds of millions of auctions.

Every little bit tweak here or tweak there.

<unk>.

Improvement.

And if you look at the laundry list.

Uh huh.

<unk> numbers into the hundreds of things that you can constantly be doing some of it is fixing things other is innovating on things.

Speed of auction.

Your hardware settings.

The way to making sure that the plumbing is clean and the connections are good with the buyers and the sellers. So.

It's an ongoing effort.

I wish there was a seminal.

Product or project that we could point to that once it's completed.

It unlocks the floodgates, but it's a it's a constant areas.

Maintenance for us innovation for us and admittedly an area that was under.

Maintenance or innovated over the years as we.

<unk> acquired the CTV asset so we have some catch up to do.

Pleased with the focus on it.

I think our results can get better and improve over time, so I think that.

We analyze where we can.

Gain improvement, where our highest return.

Our investment will be in.

We're well down the path in those areas.

That's super helpful. And then this is probably a little bit David a little bit Michael.

But when we're thinking about the full year guide and you mentioned Q2, starting to see some political obviously the free TV environment has changed so much since the last midterm cycle.

Feels to me like mid terms.

It'd be a little bit better position that general election for you because of the emphasis on targeting right because they are all.

Regionalized election could you just talk a little bit maybe about how youre thinking about the.

<unk>.

Political spend this year and whether or not you do think there could be a bigger shift towards <unk>.

Okay.

Yes, I think we feel as though.

If and when we see the impact of political spend for the mid terms it will be predominantly through CTV.

There'll be some online video bought as well, but I think CTV will be our primary focus and you're right it'll be highly directed in those battleground states.

And.

You probably saw.

Ah released with that the folks from Scripps who were bundling inventory from other non Scripps stations to create a bigger pool of available inventory in those markets and they are working exclusively with us on that and so.

Of course, we have our direct team in the middle markets in those states are working with the top agencies that are special specialize in.

Spending so our best guess is that this mid term probably will behave more like a general election.

Two years ago than it will like a traditional mid term, especially as it relates to CTV. So so yes, we're cautiously optimistic that we're going to see some flow through in Q2, and certainly in the back half of the year.

I don't know David if you have any other thoughts or specifics.

I think you covered it I think that there'll be some flow through in Q2.

It won't be Super significant I think the vast majority of it will be Q3.

In Q4, and yes as far as the volume of spend as Michael mentioned, maybe similar to the presidential and with this recently leaked to news on ROE V. Wade.

That would be a supercharge that spend as well so.

Time will tell.

Alright, guys Thats Super helpful. Thanks for the time.

Thank you.

Next question comes from the line of CME geography off with Cannonball Research. Please go ahead.

Thank you good afternoon I wanted to ask a question about political.

My question is if you look at broadcasting company.

<unk>.

Once they have strong political spending non political advertising revenue.

Growth is usually depressed from what the coal displacement Wednesday, because political campaigns.

Not price sensitive, but just outbid nonpolitical.

Political advertisers so given that you.

As an SSP or probably more.

Supply constraints side are you.

Seeing anything like that with a scenario, but youre thinking about that it might not be 100% additive when all we expect a political comes in.

I know, we're in uncharted waters, but would appreciate your thoughts here.

Yes.

Very keen observation.

<unk>.

There is far less supply constraint in online video. So I think what you see in the online video is that Theres just.

Theres always a lot of inventory and therefore this a lot less displacement and CTV I think you do see some displacement, but I think that that.

Any displacement is more than made up for as you pointed out there's not a lot of price elasticity as it relates to CPM and so youre seeing.

Higher CPM and so although.

And even though inventory G.

Generally speaking is very tight in the CTV world, It's not always all sold.

And theres different day parts and things like that where political maybe less sensitive about running it and so I think that.

All in all.

We have seen historically that even if there is displacement.

Positive because of the rates.

As it relates to.

Baghdad.

So just.

Just a follow up if we look at the previous political cycle did you see any displacement at all I'm just curious.

Yes, I mean, I think that generally speaking, especially if you get into Q4.

So right at the tail end of the election cycle.

Those are pretty tight windows anyway, and so.

There was certainly.

There were certainly.

Some displacement there.

But as I said before it was it was still a good guide because of.

The rates of displaced these buyers.

Sure.

Significantly higher than market.

Alright, well, thank you very much.

Thanks.

Thank you. Our next question comes from the line of Nick <unk>.

Stephen Please go ahead.

Yeah, Hey, guys.

<unk>.

Thinking about these new <unk> services, you touched on Disney plus but with regard to Netflix maybe Apple TV plus.

Just in general if you could comment on.

And how do you think about your ability to win new business.

And for these large streaming services how long.

Do you suspect it would take to go from having absolutely nothing to something.

With regard to building in that business.

Yeah, Hey, Nik.

On that one so.

Yes, it's a very fair question and then of course, you start to ask are you.

Launching in the USA launching in foreign countries.

If you never had an AD business before.

It's hard to predict how long it would take especially if youre starting from scratch, but one would say.

Obviously.

A multi quarter journey.

Given the fact that you.

I haven't even.

Pitched.

Your customer base on this tier.

<unk> tried to figure out what the cannibalization might be et cetera, et cetera. So I think that there is.

There's a lot more that goes into it obviously than just add technology, but as it does relate to add technology I think we are in.

Stored nearly well positioned.

As we've talked about all the assets that we have and not just doing the traditional work of bringing demand like an FSP to fill these AD slots, but having the server to actually serve them and Theres one thing everyone needs. It it doesn't matter, if you're a legacy broadcaster or a new program or a platform you need an AD server you need some.

Something that can serve had since youre going to get into the AD business. So at the very minimum we have the leading CTV AD server.

And especially if you don't have a legacy business.

There is not really.

Our need for a server that was built in the online video world that meets the conditions and rules that broadcasters needed to.

The needle between linear and streamed so I think we feel really good about the company that we've built and obviously every day, we're helping these new services I get off the ground and sell ads and some of them have a direct sales team where the rules of engagement are quiet.

The structured and others don't have any.

Direct sellers and they rely upon us for the vast majority of their demand. So so I just think it's a validation for the company. We've built its a validation for the consumer in terms of a choice right.

And I think.

We really enjoy the position we have in the marketplace right now.

I agree it's good to hear and then just.

One more from me you briefly touched on it but any update just with regard to the construction of the seller defined audiences.

Maybe specifically within CTV utilizing that first party data from publishers.

I know you guys do you guys keep making acquisitions here.

For sure. So are you are you monetizing audience segmentation and creation.

All yet and maybe you could just comment.

On the overall roadmap.

Within seller to find audiences. Thanks.

Yes so.

Early days right.

I said before.

One of the earlier questions.

And as long as a third party cookie world exists.

It's hard to.

Generate enough urgency on the publisher side.

Because it's a need that necessarily doesn't.

Match.

What buyers want but at the minute third party cookies go away buyers, who desperately going to need these targeting parameters and so that's where the publisher gets in so what we're doing is building for that future. We know it's coming we know that.

It will happen it will be multiple solutions, but we feel very good about the assets that we have and the work that we're doing right now on those assets, we do a ton of data.

Data overlays and CTV right now some of it first party a lot of it third party.

So I would say CTV is even more advanced than divi, plus as it relates to data oriented packages and.

Quite easier frankly.

And probably more valued audiences just given the wide did nature of the user rate.

Many many open web sites and apps don't have a lagging component and it makes.

Profiling and audience, a little bit more difficult than the wagon user approach of CTV and so yes.

I think in CTV youre going to find that thats going to quickly move to the front and center.

Buyer needs because of the displacement of the cookie.

Great I appreciate it guys. Thanks good luck.

Thanks.

Thank you.

Next question is from the line of Matt Duncan, but truest Securities. Please go ahead.

Hey, good afternoon guys.

Maybe two if I could first on.

Excuse me trade desk moving away from Google Open bidding I know, it's still fairly early but I'm curious what you're seeing in terms of impact I think the.

Thinking had been from you and some of your peers that it could be neutral to positive I'm kind of curious what the early read is there and then just secondly, any update on the merged platform taking kind of the best of Talaria. The best spot X I think you've talked about having that out fully to market I think as.

Bye Bye <unk> 'twenty three so I'm, just curious how how thats progressing.

What might happen once that's fully launch is there any benefits from share gain standpoint from a cost efficiency standpoint, just any color there would be helpful. Thanks guys.

Yeah.

Yeah, Hey, Matt so as far as there'll be as concerned trade desk.

Definitely.

We can see.

Flow of money from trade desk through Ob has.

Kind of gone down to a trickle. The reality is Google trade desk had moved away from open bidding.

Incrementally over the last year and a half.

They came to all the Fsp's and they went to publishers and they basically said hey, we're buying your inventories through multiple pads.

We've taken a look at it in the most efficient path is pre bid or the most efficient path is Amazon and so we're switching.

Our dollars over to those pads and so Ob was not a huge contributor foreign magnates drew from a trade desk spend standpoint.

It's kind of hard to track it as to whether or not.

It's fluid three pre bid.

And it's also too early to see if.

<unk>.

Hundreds of Ssp's that were in the <unk> program.

If that shift of share to the.

Validated ssp's of which magnates one of them for trade desk.

That hasnt resulted in any huge wished right now, but I do think again very early days and we could be seeing it just.

Pre bid and that recognizing the specific dollars.

And as far as the platform consolidation concern.

Continues.

At pace.

That timing is.

Is around right.

As you know.

All not just dependent upon us it's when the publishers are going to be able to allocate the resources to move to the new platform and so we've always felt as though Q4.

Q2 will be a cutoff for any migrations and so we will be migrating clients into <unk>.

2023 Q1 for sure.

And.

To pointed direct revenue boost.

It kind of difficult.

We will probably be able to educate.

You and others more as the.

Platform comes online.

But I think if you build.

Nextgen platform that has all the bells and whistles and while the everyone's asked for.

It just leads to more revenue opportunities in terms of access to inventory. So we feel pretty good about the path we're on there.

Yes.

Fee perspective, you'll see that primarily in <unk>.

A more efficient technology infrastructure cost base.

Okay got you that's helpful and maybe one quick follow up and this has been I think touch on a couple of times, but I think my question is I think.

When you think about some of the opportunities or changes out there. So you know Disney launching <unk> in the U S by fourth quarter calendar fourth quarter or.

The Warner Discovery merger now being done when you think about your full year commentary and guidance.

And we don't need to get into specifics, but I guess does that contemplate or take any take anything into account in terms of some of these incremental perhaps opportunities out there or would you landing when one of these or an increased role with one of these would be incremental to kind of what you've talked about thanks guys.

Okay.

I think Matt whenever you look at new business opportunities you kind of bake it into a general forecast. So a lot of our business growth every year organic same store sales, but.

We always rely upon.

Of an unknown number out there that will come from new client relationships and so so I think by and large it's already baked into the forecast in that.

And these things tend to start off as well.

Walk before you run types of relationships and so.

I think that that.

I wouldn't necessarily say that.

A one.

<unk> client out there Mike.

<unk> dramatically increased revenue for magnet.

I don't know David if you have a different view on that.

No I think thats right I mean, it certainly would add to our ability to take market.

Market share.

And.

I think you've covered it.

Okay awesome.

Thanks, Matt.

Thank you.

This concludes our question and answer session I would now like to turn the conference back over to Michael Barrett, President and CEO for any closing remarks.

Thank you Ryan.

Like to thank every magnate team member for their hard work and efforts. We are one of the best teams the industry and their expertise and unmatched customer focus yielded a very differentiated leading company with comprehensive customer solutions, we continue to see and invest and clear areas for growth in CTV, TV, plus an audience and identity.

We've established ourselves as a critical long term partner for many of our publishers and buyers, especially in CTV and believe much of our future success lies in both our execution and in winning new business.

We've never been more excited about the opportunity we have ahead of us.

As we look at the back half of the year, we feel strongly that our selection by group and in CTV.

Disney plus recently announcing an AD supported alternative return of verticals such as travel and political spend are tangible examples of growth drivers for the quarters ahead.

Most all CTV streaming services have either launched or announced Eva offerings and even the largest subscription CTV streaming service has recently moved from a position of never to actively exploring it.

Thank you for joining us for our Q1 results call.

Look forward to talking to many of you at virtual Investor meetings hosted by Sig Tomorrow conferences by Needham on May 17th and Craig Hallum on June 1st.

Have a great evening.

Everyone else. Thank you off the call.

The conference has now concluded. Thank you for attending today's presentation you may now disconnect.