Magnite (NASDAQ: MGNI), the world's largest independent sell-side
advertising company, today reported its results of operations for
the quarter ended September 30, 2023.
Q3 2023 Highlights:
- Revenue of $150.1 million, up 3%
year-over-year
- Contribution ex-TAC(1) of $133.1
million, up 4% year-over-year
- Contribution ex-TAC(1) attributable to
CTV of $52.5 million, down 6% year-over-year, compared to guidance
of $50.0 to $52.0 million
- Contribution ex-TAC(1) attributable to
DV+ of $80.7 million, up 12% year-over year, compared to guidance
of $78.0 to $80.0 million
- Net loss of $17.5 million, for a loss
per share of $0.13, compared to net loss of $24.4 million in Q3
2022, for a loss per share of $0.18
- Adjusted EBITDA(1) of $40.3 million,
representing a 30% Adjusted EBITDA margin(4), compared to Adjusted
EBITDA(1) of $44.4 million in Q3 2022
- Non-GAAP earnings per share(1) of
$0.12, compared to non-GAAP earnings per share(1) of $0.18 for Q3
2022
- Operating cash flow(5) of $31.8
million
- Repurchased $34.5 million of
convertible notes during the quarter, approximately $125 million or
31% of total now retired
Expectations:
- Total Contribution ex-TAC(1) for Q4
2023 to be between $158 million and $162 million
- Contribution ex-TAC(1) attributable to
CTV for Q4 2023 to be between $61 million and $63 million
- Contribution ex-TAC(1) attributable to
DV+ for Q4 2023 to be between $97 million and $99 million
- Adjusted EBITDA operating expenses(3)
for Q4 2023 to be between $94 million and $96 million
- Total Contribution ex-TAC(1) growth in
the high single digits for the full-year 2024, with CTV growing
faster than DV+
- Targeting Adjusted EBITDA margin(4)
expansion of 50-100 basis points for 2024
- Double digit percentage growth of
Adjusted EBITDA(1) for 2024, and even higher growth in free cash
flow(6)
- Total capital expenditures for 2024 to
be in the mid $40 million range
“We exceeded our top line guidance in the third quarter, with
contribution ex-TAC for CTV and DV+ both coming in above the high
end of our guidance range. We continued to grow our market share in
both DV+ and CTV. In fact, our CTV ad spend increased over 20% in
the third quarter, strongly outpacing market growth estimates. We
have a tremendous opportunity to expand our share growth as the
largest CTV market participants accelerate their programmatic CTV
offerings,” said Michael G. Barrett, President and CEO of
Magnite.
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Third
Quarter 2023 Results
Summary |
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(in millions, except
per share amounts and percentages) |
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Three Months Ended |
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Nine Months Ended |
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September 30, 2023 |
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September 30, 2022 |
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ChangeFavorable/
(Unfavorable) |
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September 30,2023 |
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September 30, 2022 |
|
ChangeFavorable/
(Unfavorable) |
Revenue |
$150.1 |
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$145.8 |
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3% |
|
$432.8 |
|
$401.7 |
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8% |
Gross profit |
$65.2 |
|
$74.1 |
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(12)% |
|
$92.9 |
|
$205.5 |
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(55)% |
Contribution ex-TAC(1) |
$133.1 |
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$127.7 |
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4% |
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$383.9 |
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$358.0 |
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7% |
Net loss |
($17.5) |
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($24.4) |
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28% |
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($190.1) |
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($93.9) |
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(102)% |
Adjusted EBITDA(1) |
$40.3 |
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$44.4 |
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(9)% |
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$101.0 |
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$114.6 |
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(12)% |
Adjusted EBITDA operating
expenses(3) |
$92.8 |
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$83.3 |
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(12)% |
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$282.9 |
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$243.4 |
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(16)% |
Adjusted EBITDA margin(4) |
30% |
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35% |
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(5 ppt) |
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26% |
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32% |
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(6 ppt) |
Basic and diluted loss per
share |
($0.13) |
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($0.18) |
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28% |
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($1.40) |
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($0.71) |
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(97)% |
Non-GAAP earnings per
share(1) |
$0.12 |
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$0.18 |
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(33)% |
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$0.25 |
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$0.40 |
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(38)% |
Footnotes: |
(1) |
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Contribution ex-TAC, Adjusted EBITDA, and non-GAAP earnings per
share are non-GAAP financial measures. Please see the discussion in
the section called "Non-GAAP Financial Measures" and the
reconciliations included at the end of this press release. |
(2) |
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Advertising spend, or ad spend,
is defined as the total volume of spending between buyers and
sellers transacted on our platform. |
(3) |
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Adjusted EBITDA operating
expenses is calculated as Contribution ex-TAC less Adjusted
EBITDA. |
(4) |
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Adjusted EBITDA margin is
calculated as Adjusted EBITDA divided by Contribution ex-TAC. |
(5) |
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Operating cash flow is calculated
as Adjusted EBITDA less capital expenditures. |
(6) |
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Free cash flow is defined as
operating cash flow (Adjusted EBITDA less capital expenditures)
less net interest expense. |
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Third Quarter 2023
Results Conference Call and Webcast:
The Company will host a conference call on November 8, 2023
at 1:30 PM (PT) / 4:30 PM (ET) to discuss the results for its third
quarter of 2023.
Live conference
call |
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Toll free number: |
(844) 875-6911 (for domestic
callers) |
Direct dial number: |
(412) 902-6511 (for
international callers) |
Passcode: |
Ask to join the Magnite
conference call |
Simultaneous audio
webcast: |
http://investor.magnite.com under "Events and
Presentations" |
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Conference call
replay |
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Toll free number: |
(877) 344-7529 (for domestic
callers) |
Direct dial number: |
(412) 317-0088 (for
international callers) |
Passcode: |
7301687 |
Webcast link: |
http://investor.magnite.com under "Events and
Presentations" |
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About MagniteWe’re Magnite (NASDAQ: MGNI), the
world’s largest independent sell-side advertising company.
Publishers use our technology to monetize their content across all
screens and formats including CTV, online video, display, and
audio. The world's leading agencies and brands trust our platform
to access brand-safe, high-quality ad inventory and execute
billions of advertising transactions each month. Anchored in
bustling New York City, sunny Los Angeles, mile high Denver,
historic London, colorful Singapore, and down under in Sydney,
Magnite has offices across North America, EMEA, LATAM, and
APAC.
Forward-Looking Statements:This press release
and management's prepared remarks during the conference call
referred to above include, and management's answers to questions
during the conference call may include, forward-looking statements,
including statements based upon or relating to our expectations,
assumptions, estimates, and projections. In some cases, you can
identify forward-looking statements by terms such as "may,"
"might," "will," "objective," "intend," "should," "could," "can,"
"would," "expect," "believe," "design," "anticipate," "estimate,"
"predict," "potential," "plan" or the negative of these terms, and
similar expressions. Forward-looking statements may include, but
are not limited to, statements concerning acquisitions by the
Company, including the acquisition of SpotX, Inc. ("SpotX," and
such acquisition the "SpotX Acquisition"), the acquisition of
SpringServe, LLC ("SpringServe," and such acquisition the
"SpringServe Acquisition"), and the merger with Telaria, Inc.
("Telaria," and such merger the "Telaria Merger"), or the
anticipated benefits thereof; statements concerning potential
synergies from the Company's acquisitions; statements concerning
macroeconomic conditions or concerns related thereto; our
anticipated financial performance; key strategic objectives;
industry growth rates for ad-supported connected television ("CTV")
and the shift in video consumption from linear TV to CTV;
anticipated benefits of new offerings, including the introduction
of our new Magnite Streaming platform and our ClearLine solution;
the success of the consolidation of our two CTV platforms; the
effects of our cost reduction initiatives; scope and duration of
client relationships; the fees we may charge in the future;
business mix; sales growth; benefits from supply path optimization;
the development of identity solutions; client utilization of our
offerings; our competitive differentiation; our market share and
leadership position in the industry; market conditions, trends, and
opportunities; certain statements regarding future operational
performance measures; and other statements that are not historical
facts. 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. Risks that our business faces include,
but are not limited to, the following: our ability to realize the
anticipated benefits of the SpotX Acquisition, SpringServe
Acquisition, and other acquisitions; the impact of macroeconomic
challenges on the overall demand for advertising and the
advertising marketplace, including as a result of global conflict,
global pandemics and the responses to such pandemics by
governments, inflation, supply chain issues, labor strikes, capital
market disruptions and instability of financial institutions, the
occurrence of a recession, or concerns relating to the foregoing;
CTV spend on our platform may grow more slowly than we expect if
industry growth rates for ad supported CTV are not accurate, if CTV
sellers fail to adopt programmatic advertising solutions or if we
are unable to maintain or increase access to CTV advertising
inventory; we may be unsuccessful in our supply path optimization
efforts with buyers; our ability to introduce new offerings and
bring them to market in a timely manner and potential responses or
reactions of clients, vendors, and competitors to the announcement
of new products and offerings; uncertainty of our estimates and
expectations associated with new offerings, including our
SpringServe ad server, ClearLine product, and our developing
identity solutions; potential negative impacts associated with the
integration of our CTV platforms and the introduction of Magnite
Streaming; we must increase the scale and efficiency of our
technology infrastructure to support our growth and recent
developments in artificial intelligence and machine learning may
accelerate or exacerbate potential risks related to technological
developments; the emergence of header bidding has increased
competition from other demand sources and may cause infrastructure
strain and added costs; our access to mobile inventory may be
limited by third-party technology or lack of direct relationships
with mobile sellers; we may experience lower take rates, which may
not be offset by increases in ad spend; the impact of requests for
discounts, fee concessions, rebates, refunds or favorable payment
terms; our business may be subject to sales and use tax,
advertising and other taxes; failure by us or our clients to meet
advertising and inventory content standards; the freedom of buyers
and sellers to direct their spending and inventory to competing
sources of inventory and demand, and to establish direct
relationships and integrations without the use of our platform; our
reliance on large aggregators of advertising inventory, and the
concentration of CTV among a small number of large sellers that
enjoy significant negotiating leverage with respect to take rates
and other terms; our ability to provide value to both buyers and
sellers of advertising without being perceived as favoring one over
the other or being perceived as competing with them through our
service offerings; our reliance on large sources of advertising
demand, including demand side platforms ("DSPs") that may have or
develop high-risk credit profiles or fail to pay invoices when due;
our sales efforts may require significant time and expense and may
not yield the results we seek; we may be exposed to claims from
clients for breach of contract; the effects of seasonal trends on
our results of operations; we operate in an intensely competitive
market that includes companies that have greater financial,
technical and marketing resources than we do; the effects of
consolidation in the ad tech industry or among our publisher
clients; our ability to differentiate our offerings and compete
effectively to combat commodification and disintermediation;
potential limitations on our ability to collect or use data as a
result of consumer tools, regulatory restrictions and technological
limitations; the development and use of new identity solutions as a
substitute for third-party cookies and other identifiers may
disrupt the programmatic ecosystem, require additional investment
and resources, and cause the performance of our platform to
decline; the industry may not adopt or may be slow to adopt the use
of first-party publisher segments as an alternative to third-party
cookies; the impact of antitrust regulations or enforcement actions
targeting the digital advertising ecosystem; our ability to comply
with, and the effect on our business of, evolving legal standards
and regulations, particularly concerning data protection and
privacy; errors or failures in the operation of our solution,
interruptions in our access to network infrastructure or data, and
breaches of our computer systems; our ability to ensure a high
level of brand safety for our clients and to detect "bot" traffic
and other fraudulent or malicious activity; our ability to attract
and retain qualified employees and key personnel; costs associated
with enforcing our intellectual property rights or defending
intellectual property infringement; our ability to comply with the
terms of our financing arrangements; restrictions in our Credit
Agreement may limit our ability to make strategic investments,
respond to changing market conditions, or otherwise operate our
business; increases in our debt leverage may put us at greater risk
of defaulting on our debt obligations, subject us to additional
operating restrictions and make it more difficult to obtain future
financing on favorable terms; conversion of our Convertible Senior
Notes would dilute the ownership interest of existing stockholders;
the Capped Call Transactions subject us to counterparty risk and
may affect the value of the Convertible Senior Notes and our common
stock; the conditional conversion feature of the Convertible Senior
Notes, if triggered, may adversely affect our financial condition
and operating result; failure to successfully execute our
international growth plans; failure to maintain an effective system
of internal control over financial reporting, which could adversely
affect investor confidence; the use of our net operating losses and
tax credit carryforwards may be subject to certain limitations; our
ability to raise additional capital if needed; volatility in the
price of our common stock; the impact of our repurchase program on
our stock price and cash reserves; competition for investors and
the impact of negative analyst or investor research reports; and
provisions of our charter documents and Delaware law may inhibit a
potential acquisition of the company and limit the ability of
stockholders to cause changes in company management.
We discuss many of these risks and additional
factors that could cause actual results to differ materially from
those anticipated by our forward-looking statements under the
headings "Risk Factors" and "Management's Discussion and Analysis
of Financial Condition and Results of Operations," and elsewhere in
this press release and in other filings we have made and will make
from time to time with the Securities and Exchange Commission, or
SEC, including our Annual Report on Form 10-K for the year ended
December 31, 2022 and subsequent Quarterly Reports on Form 10-Q.
These forward-looking statements represent our estimates and
assumptions only as of the date of the report in which they are
included. Unless required by federal securities laws, we assume no
obligation to update any of these forward-looking statements, or to
update the reasons actual results could differ materially from
those anticipated, to reflect circumstances or events that occur
after the statements are made. Without limiting the foregoing, any
guidance we may provide will generally be given only in connection
with quarterly and annual earnings announcements, without interim
updates, and we may appear at industry conferences or make other
public statements without disclosing material nonpublic information
in our possession. Given these uncertainties, investors should not
place undue reliance on these forward-looking statements. Investors
should read this press release and the documents that we reference
in this press release and have filed or will file with the SEC
completely and with the understanding that our actual future
results may be materially different from what we expect. We qualify
all of our forward-looking statements by these cautionary
statements.
Non-GAAP Financial Measures and Operational
Measures:
In addition to our GAAP results, we review certain non-GAAP
financial measures to help us evaluate our business on a consistent
basis, measure our performance, identify trends affecting our
business, establish budgets, measure the effectiveness of
investments in our technology and development and sales and
marketing, and assess our operational efficiencies. These non-GAAP
measures include Contribution ex-TAC, Adjusted EBITDA, Non-GAAP
Income (Loss), and Non-GAAP Earnings (Loss) per share, each of
which is discussed below.
These non-GAAP financial measures are not intended to be
considered in isolation from, as substitutes for, or as superior
to, the corresponding financial measures prepared in accordance
with GAAP. You are encouraged to evaluate these adjustments, and
review the reconciliation of these non-GAAP financial measures to
their most comparable GAAP measures, and the reasons we consider
them appropriate. It is important to note that the particular items
we exclude from, or include in, our non-GAAP financial measures may
differ from the items excluded from, or included in, similar
non-GAAP financial measures used by other companies. See
"Reconciliation of Revenue to Gross Profit to Contribution ex-TAC,"
"Reconciliation of net income (loss) to Adjusted EBITDA,"
"Reconciliation of net income (loss) to non-GAAP income (loss),"
and "Reconciliation of GAAP earnings (loss) per share to non-GAAP
earnings (loss) per share" included as part of this press
release.
We do not provide a reconciliation of our non-GAAP financial
expectations for Contribution ex-TAC and Adjusted EBITDA, or a
forecast of the most comparable GAAP measures, because the amount
and timing of many future charges that impact these measures (such
as amortization of future acquired intangible assets,
acquisition-related charges, foreign exchange (gain) loss, net,
stock-based compensation, impairment charges, provision or benefit
for income taxes, and our future revenue mix), which could be
material, are variable, uncertain, or out of our control and
therefore cannot be reasonably predicted without unreasonable
effort, if at all. In addition, we believe such reconciliations or
forecasts could imply a degree of precision that might be confusing
or misleading to investors.
Contribution ex-TAC:
Contribution ex-TAC is calculated as gross profit plus cost of
revenue, excluding traffic acquisition cost ("TAC"). Traffic
acquisition cost, a component of cost of revenue, represents what
we must pay sellers for the sale of advertising inventory through
our platform for revenue reported on a gross basis. Contribution
ex-TAC is a non-GAAP financial measure that is most comparable to
gross profit. We believe Contribution ex-TAC is a useful measure in
assessing the performance of Magnite and facilitates a consistent
comparison against our core business without considering the impact
of traffic acquisition costs related to revenue reported on a gross
basis.
Adjusted EBITDA:
We define Adjusted EBITDA as net income (loss) adjusted to
exclude stock-based compensation expense, depreciation and
amortization, amortization of acquired intangible assets,
impairment charges, interest income or expense, and other cash and
non-cash based income or expenses that we do not consider
indicative of our core operating performance, including, but not
limited to foreign exchange gains and losses, acquisition and
related items, gains or losses on extinguishment of debt,
non-operational real estate and other expense (income), net, and
provision (benefit) for income taxes. We also track future expenses
on an Adjusted EBITDA basis, and describe them as Adjusted EBITDA
operating expenses, which includes total operating expenses. Total
operating expenses include cost of revenue. Adjusted EBITDA
operating expenses is calculated as Contribution ex-TAC less
Adjusted EBITDA. We adjust Adjusted EBITDA operating expenses for
the same expense items excluded in Adjusted EBITDA. We believe
Adjusted EBITDA is useful to investors in evaluating our
performance for the following reasons:
- Adjusted EBITDA is widely used by
investors and securities analysts to measure a company’s
performance without regard to items such as those we exclude in
calculating this measure, which can vary substantially from company
to company depending upon their financing, capital structures, and
the method by which assets were acquired.
- Our management uses Adjusted EBITDA in
conjunction with GAAP financial measures for planning purposes,
including the preparation of our annual operating budget, as a
measure of performance and the effectiveness of our business
strategies, and in communications with our board of directors
concerning our performance. Adjusted EBITDA may also be used as a
metric for determining payment of cash incentive compensation.
- Adjusted EBITDA provides a measure of
consistency and comparability with our past performance that many
investors find useful, facilitates period-to-period comparisons of
operations, and also facilitates comparisons with other peer
companies, many of which use similar non-GAAP financial measures to
supplement their GAAP results.
Although Adjusted EBITDA is frequently used by investors and
securities analysts in their evaluations of companies, Adjusted
EBITDA has limitations as an analytical tool, and should not be
considered in isolation or as a substitute for analysis of our
results of operations as reported under GAAP. These limitations
include:
- Stock-based compensation is a non-cash
charge and will remain an element of our long-term incentive
compensation package, although we exclude it as an expense when
evaluating our ongoing operating performance for a particular
period.
- Depreciation and amortization are
non-cash charges, and the assets being depreciated or amortized
will often have to be replaced in the future, but Adjusted EBITDA
does not reflect any cash requirements for these replacements.
- Impairment charges are non-cash charges
related to goodwill, intangible assets and/or long-lived
assets.
- Adjusted EBITDA does not reflect
certain cash and non-cash charges related to acquisition and
related items, such as amortization of acquired intangible assets,
merger, acquisition, or restructuring related severance costs, and
changes in the fair value of contingent consideration.
- Adjusted EBITDA does not reflect cash
and non-cash charges and changes in, or cash requirements for,
acquisition and related items, such as certain transaction expenses
and expenses associated with earn-out amounts.
- Adjusted EBITDA does not reflect
changes in our working capital needs, capital expenditures,
non-operational real estate expenses or income, or contractual
commitments.
- Adjusted EBITDA does not reflect cash
requirements for income taxes and the cash impact of other income
or expense.
- Other companies may calculate Adjusted
EBITDA differently than we do, limiting its usefulness as a
comparative measure.
Our Adjusted EBITDA is influenced by fluctuations in our
revenue, cost of revenue, and the timing and amounts of the cost of
our operations. Adjusted EBITDA should not be considered as an
alternative to net income (loss), income (loss) from operations, or
any other measure of financial performance calculated and presented
in accordance with GAAP.
Non-GAAP Income (Loss) and Non-GAAP Earnings (Loss) per
Share:
We define non-GAAP earnings (loss) per share as non-GAAP income
(loss) divided by non-GAAP weighted-average shares outstanding.
Non-GAAP income (loss) is equal to net income (loss) excluding
stock-based compensation, cash and non-cash based acquisition and
related expenses, including amortization of acquired intangible
assets, merger related severance costs, transaction expenses, gains
or losses on extinguishment of debt, non-operational real estate
and other expenses or income, foreign currency gains and losses,
and interest expense associated with Convertible Senior Notes. In
periods in which we have non-GAAP income, non-GAAP weighted-average
shares outstanding used to calculate non-GAAP earnings per share
includes the impact of potentially dilutive shares. Potentially
dilutive shares consist of stock options, restricted stock awards,
restricted stock units, performance stock units, and potential
shares issued under the Employee Stock Purchase Plan, each computed
using the treasury stock method. In periods in which the Company
generates net income, non-GAAP weighted-average shares may also
include the impact of shares that would be issuable assuming
conversion of all of the Convertible Senior Notes, calculated under
the if-converted method. We believe non-GAAP earnings (loss) per
share is useful to investors in evaluating our ongoing operational
performance and our trends on a per share basis, and also
facilitates comparison of our financial results on a per share
basis with other companies, many of which present a similar
non-GAAP measure. However, a potential limitation of our use of
non-GAAP earnings (loss) per share is that other companies may
define non-GAAP earnings (loss) per share differently, which may
make comparison difficult. This measure may also exclude expenses
that may have a material impact on our reported financial results.
Non-GAAP earnings (loss) per share is a performance measure and
should not be used as a measure of liquidity. Because of these
limitations, we also consider the comparable GAAP measure of net
income (loss).
Investor Relations ContactNick Kormeluk(949)
500-0003nkormeluk@magnite.com
Media ContactCharlstie Veith(516)
300-3569press@magnite.com
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MAGNITE, INC.CONDENSED CONSOLIDATED
BALANCE SHEETS(In
thousands)(unaudited) |
|
|
September 30, 2023 |
|
December 31, 2022 |
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
310,509 |
|
|
$ |
326,254 |
|
Accounts receivable, net |
|
937,218 |
|
|
|
976,506 |
|
Prepaid expenses and other current
assets |
|
21,453 |
|
|
|
23,501 |
|
TOTAL CURRENT ASSETS |
|
1,269,180 |
|
|
|
1,326,261 |
|
Property and equipment,
net |
|
46,112 |
|
|
|
44,969 |
|
Right-of-use lease asset |
|
64,551 |
|
|
|
78,211 |
|
Internal use software
development costs, net |
|
21,630 |
|
|
|
23,671 |
|
Intangible assets, net |
|
58,633 |
|
|
|
253,501 |
|
Goodwill |
|
978,217 |
|
|
|
978,217 |
|
Other assets, non-current |
|
6,686 |
|
|
|
7,383 |
|
TOTAL ASSETS |
$ |
2,445,009 |
|
|
$ |
2,712,213 |
|
LIABILITIES AND
STOCKHOLDERS' EQUITY |
|
|
|
Current liabilities: |
|
|
|
Accounts payable and accrued expenses |
$ |
1,100,752 |
|
|
$ |
1,094,321 |
|
Lease liabilities, current |
|
20,913 |
|
|
|
21,172 |
|
Debt, current |
|
3,600 |
|
|
|
3,600 |
|
Other current liabilities |
|
5,799 |
|
|
|
5,939 |
|
TOTAL CURRENT LIABILITIES |
|
1,131,064 |
|
|
|
1,125,032 |
|
Debt, non-current, net of debt
issuance costs |
|
601,609 |
|
|
|
722,757 |
|
Lease liabilities,
non-current |
|
54,025 |
|
|
|
66,331 |
|
Deferred tax liability,
net |
|
4,400 |
|
|
|
5,072 |
|
Other liabilities,
non-current |
|
1,801 |
|
|
|
1,723 |
|
TOTAL LIABILITIES |
|
1,792,899 |
|
|
|
1,920,915 |
|
STOCKHOLDERS' EQUITY |
|
|
|
Common stock |
|
2 |
|
|
|
2 |
|
Additional paid-in
capital |
|
1,370,619 |
|
|
|
1,319,221 |
|
Accumulated other
comprehensive loss |
|
(3,639 |
) |
|
|
(3,151 |
) |
Accumulated deficit |
|
(714,872 |
) |
|
|
(524,774 |
) |
TOTAL STOCKHOLDERS'
EQUITY |
|
652,110 |
|
|
|
791,298 |
|
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY |
$ |
2,445,009 |
|
|
$ |
2,712,213 |
|
|
MAGNITE, INC.CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS(In thousands, except per
share amounts)(unaudited) |
|
|
Three Months Ended |
|
Nine Months Ended |
|
September 30, 2023 |
|
September 30, 2022 |
|
September 30, 2023 |
|
September 30, 2022 |
Revenue |
$ |
150,085 |
|
|
$ |
145,815 |
|
|
$ |
432,778 |
|
|
$ |
401,670 |
|
Expenses (1)(2): |
|
|
|
|
|
|
|
Cost of revenue |
|
84,878 |
|
|
|
71,753 |
|
|
|
339,881 |
|
|
|
196,150 |
|
Sales and marketing |
|
38,227 |
|
|
|
49,848 |
|
|
|
136,407 |
|
|
|
151,675 |
|
Technology and development |
|
23,537 |
|
|
|
25,134 |
|
|
|
71,135 |
|
|
|
71,214 |
|
General and administrative |
|
21,286 |
|
|
|
20,235 |
|
|
|
68,023 |
|
|
|
59,405 |
|
Merger, acquisition, and restructuring costs |
|
— |
|
|
|
— |
|
|
|
7,465 |
|
|
|
7,468 |
|
Total expenses |
|
167,928 |
|
|
|
166,970 |
|
|
|
622,911 |
|
|
|
485,912 |
|
Loss from operations |
|
(17,843 |
) |
|
|
(21,155 |
) |
|
|
(190,133 |
) |
|
|
(84,242 |
) |
Other (income) expense: |
|
|
|
|
|
|
|
Interest expense, net |
|
7,574 |
|
|
|
7,016 |
|
|
|
24,269 |
|
|
|
21,273 |
|
Foreign exchange gain, net |
|
(1,471 |
) |
|
|
(1,976 |
) |
|
|
(1,542 |
) |
|
|
(5,042 |
) |
Gain on extinguishment of debt |
|
(4,156 |
) |
|
|
— |
|
|
|
(18,132 |
) |
|
|
— |
|
Other income |
|
(1,346 |
) |
|
|
(1,369 |
) |
|
|
(4,017 |
) |
|
|
(3,991 |
) |
Total other expense, net |
|
601 |
|
|
|
3,671 |
|
|
|
578 |
|
|
|
12,240 |
|
Loss before income taxes |
|
(18,444 |
) |
|
|
(24,826 |
) |
|
|
(190,711 |
) |
|
|
(96,482 |
) |
Benefit for income taxes |
|
(967 |
) |
|
|
(435 |
) |
|
|
(613 |
) |
|
|
(2,544 |
) |
Net loss |
$ |
(17,477 |
) |
|
$ |
(24,391 |
) |
|
$ |
(190,098 |
) |
|
$ |
(93,938 |
) |
Net loss per share: |
|
|
|
|
|
|
|
Basic and diluted |
$ |
(0.13 |
) |
|
$ |
(0.18 |
) |
|
$ |
(1.40 |
) |
|
$ |
(0.71 |
) |
Weighted average shares used
to compute loss per share: |
|
|
|
|
|
|
|
Basic and diluted |
|
137,372 |
|
|
|
133,144 |
|
|
|
136,084 |
|
|
|
132,611 |
|
(1) Stock-based compensation
expense included in our expenses was as follows: |
|
Three Months Ended |
|
Nine Months Ended |
September 30, 2023 |
|
September 30, 2022 |
|
September 30, 2023 |
|
September 30, 2022 |
Cost of revenue |
$ |
446 |
|
$ |
424 |
|
$ |
1,373 |
|
$ |
1,191 |
Sales and marketing |
|
6,371 |
|
|
5,491 |
|
|
20,869 |
|
|
16,257 |
Technology and
development |
|
4,999 |
|
|
6,576 |
|
|
15,918 |
|
|
16,645 |
General and
administrative |
|
5,652 |
|
|
4,911 |
|
|
17,159 |
|
|
14,096 |
Merger, acquisition, and
restructuring costs |
|
— |
|
|
— |
|
|
143 |
|
|
2,004 |
Total stock-based compensation expense |
$ |
17,468 |
|
$ |
17,402 |
|
$ |
55,462 |
|
$ |
50,193 |
(2) Depreciation and amortization
expense included in our expenses was as follows: |
|
Three Months Ended |
|
Nine Months Ended |
|
September 30, 2023 |
|
September 30, 2022 |
|
September 30, 2023 |
|
September 30, 2022 |
Cost of revenue |
$ |
36,328 |
|
$ |
27,455 |
|
$ |
198,055 |
|
$ |
80,639 |
Sales and marketing |
|
2,620 |
|
|
18,759 |
|
|
24,956 |
|
|
56,815 |
Technology and
development |
|
199 |
|
|
240 |
|
|
591 |
|
|
697 |
General and
administrative |
|
119 |
|
|
161 |
|
|
398 |
|
|
490 |
Total depreciation and amortization expense |
$ |
39,266 |
|
$ |
46,615 |
|
$ |
224,000 |
|
$ |
138,641 |
|
MAGNITE, INC.CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS(In
thousands)(unaudited) |
|
|
Nine Months Ended |
|
September 30, 2023 |
|
September 30, 2022 |
OPERATING ACTIVITIES: |
|
|
|
Net loss |
$ |
(190,098 |
) |
|
$ |
(93,938 |
) |
Adjustments to reconcile net loss to net cash provided by operating
activities: |
|
|
|
Depreciation and amortization |
|
224,000 |
|
|
|
138,641 |
|
Stock-based compensation |
|
55,462 |
|
|
|
50,193 |
|
Impairment of intangible assets |
|
— |
|
|
|
3,320 |
|
Gain on extinguishment of debt |
|
(18,132 |
) |
|
|
— |
|
Gain on disposal of property and equipment |
|
(49 |
) |
|
|
(59 |
) |
Provision for (recovery of) doubtful accounts |
|
4,439 |
|
|
|
(357 |
) |
Amortization of debt discount and issuance costs |
|
4,816 |
|
|
|
5,092 |
|
Non-cash lease expense |
|
(804 |
) |
|
|
1,340 |
|
Deferred income taxes |
|
(676 |
) |
|
|
(1,626 |
) |
Unrealized foreign currency gain, net |
|
(3,734 |
) |
|
|
(5,231 |
) |
Other items, net |
|
2,696 |
|
|
|
— |
|
Changes in operating assets and liabilities, net of effect of
business acquisitions: |
|
|
|
Accounts receivable |
|
19,033 |
|
|
|
125,268 |
|
Prepaid expenses and other assets |
|
2,054 |
|
|
|
(1,751 |
) |
Accounts payable and accrued expenses |
|
26,341 |
|
|
|
(116,575 |
) |
Other liabilities |
|
(66 |
) |
|
|
(472 |
) |
Net cash provided by operating activities |
|
125,282 |
|
|
|
103,845 |
|
INVESTING ACTIVITIES: |
|
|
|
Purchases of property and equipment |
|
(17,139 |
) |
|
|
(18,004 |
) |
Capitalized internal use software development costs |
|
(8,200 |
) |
|
|
(11,177 |
) |
Mergers and acquisitions, net |
|
— |
|
|
|
(20,755 |
) |
Net cash used in investing activities |
|
(25,339 |
) |
|
|
(49,936 |
) |
FINANCING ACTIVITIES: |
|
|
|
Proceeds from exercise of stock options |
|
2,156 |
|
|
|
1,771 |
|
Proceeds from issuance of common stock under employee stock
purchase plan |
|
1,922 |
|
|
|
2,141 |
|
Repayment of debt |
|
(2,700 |
) |
|
|
(2,700 |
) |
Repurchase of Convertible Senior Notes |
|
(104,793 |
) |
|
|
— |
|
Repayment of financing lease |
|
(276 |
) |
|
|
(602 |
) |
Purchase of treasury stock |
|
— |
|
|
|
(15,663 |
) |
Taxes paid related to net share settlement |
|
(9,677 |
) |
|
|
(11,859 |
) |
Payment of indemnification claims holdback |
|
(2,313 |
) |
|
|
(1,409 |
) |
Net cash used in financing activities |
|
(115,681 |
) |
|
|
(28,321 |
) |
EFFECT OF EXCHANGE RATE
CHANGES ON CASH, CASH EQUIVALENTS AND RESTRICTED CASH |
|
(209 |
) |
|
|
(2,484 |
) |
CHANGE IN CASH, CASH
EQUIVALENTS AND RESTRICTED CASH |
|
(15,947 |
) |
|
|
23,104 |
|
CASH, CASH EQUIVALENTS AND
RESTRICTED CASH — Beginning of period |
|
326,502 |
|
|
|
230,693 |
|
CASH, CASH EQUIVALENTS AND
RESTRICTED CASH — End of period |
$ |
310,555 |
|
|
$ |
253,797 |
|
|
|
|
|
RECONCILIATION OF CASH, CASH
EQUIVALENTS AND RESTRICTED CASH TO CONSOLIDATED BALANCE SHEETS |
|
|
|
Cash and cash equivalents |
$ |
310,509 |
|
|
$ |
253,552 |
|
Restricted cash included in
prepaid expenses and other current assets |
|
46 |
|
|
|
245 |
|
Total cash, cash equivalents
and restricted cash |
$ |
310,555 |
|
|
$ |
253,797 |
|
|
|
|
MAGNITE, INC.CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS-(Continued)(In
thousands)(unaudited) |
|
|
Nine Months Ended |
SUPPLEMENTAL DISCLOSURES OF
OTHER CASH FLOW INFORMATION: |
September 30, 2023 |
|
September 30, 2022 |
Cash paid for income taxes |
$ |
4,601 |
|
$ |
4,356 |
Cash paid for interest |
$ |
27,609 |
|
$ |
18,624 |
Capitalized assets financed by
accounts payable and accrued expenses and other liabilities |
$ |
3,226 |
|
$ |
10,195 |
Capitalized stock-based
compensation |
$ |
1,535 |
|
$ |
1,017 |
Operating lease right-of-use
assets obtained in exchange for operating lease liabilities |
$ |
3,797 |
|
$ |
11,542 |
Purchase consideration -
indemnification claims holdback |
$ |
— |
|
$ |
2,293 |
|
MAGNITE, INC.RECONCILIATION OF REVENUE TO
GROSS PROFIT TO CONTRIBUTION EX-TAC(In
thousands)(unaudited) |
|
|
Three Months Ended |
|
Nine Months Ended |
|
September 30, 2023 |
|
September 30, 2022 |
|
September 30, 2023 |
|
September 30, 2022 |
Revenue |
$ |
150,085 |
|
$ |
145,815 |
|
$ |
432,778 |
|
$ |
401,670 |
Less: Cost of revenue |
|
84,878 |
|
|
71,753 |
|
|
339,881 |
|
|
196,150 |
Gross Profit |
|
65,207 |
|
|
74,062 |
|
|
92,897 |
|
|
205,520 |
Add back: Cost of revenue, excluding TAC |
|
67,929 |
|
|
53,588 |
|
|
290,970 |
|
|
152,478 |
Contribution ex-TAC |
$ |
133,136 |
|
$ |
127,650 |
|
$ |
383,867 |
|
$ |
357,998 |
|
|
|
|
|
|
|
|
|
MAGNITE, INC.RECONCILIATION OF NET LOSS TO
ADJUSTED EBITDA(In
thousands)(unaudited) |
|
|
Three Months Ended |
|
Nine Months Ended |
|
September 30, 2023 |
|
September 30, 2022 |
|
September 30, 2023 |
|
September 30, 2022 |
Net loss |
$ |
(17,477 |
) |
|
$ |
(24,391 |
) |
|
$ |
(190,098 |
) |
|
$ |
(93,938 |
) |
Add back (deduct): |
|
|
|
|
|
|
|
Depreciation and amortization expense, excluding amortization of
acquired intangible assets |
|
9,507 |
|
|
|
8,548 |
|
|
|
29,132 |
|
|
|
23,293 |
|
Amortization of acquired intangibles |
|
29,759 |
|
|
|
38,067 |
|
|
|
194,868 |
|
|
|
115,348 |
|
Stock-based compensation expense |
|
17,468 |
|
|
|
17,402 |
|
|
|
55,462 |
|
|
|
50,193 |
|
Merger, acquisition, and restructuring costs, excluding stock-based
compensation expense |
|
— |
|
|
|
— |
|
|
|
7,322 |
|
|
|
5,464 |
|
Non-operational real estate and other expense, net |
|
52 |
|
|
|
169 |
|
|
|
290 |
|
|
|
515 |
|
Interest expense, net |
|
7,574 |
|
|
|
7,016 |
|
|
|
24,269 |
|
|
|
21,273 |
|
Foreign exchange gain, net |
|
(1,471 |
) |
|
|
(1,976 |
) |
|
|
(1,542 |
) |
|
|
(5,042 |
) |
Gain on extinguishment of debt |
|
(4,156 |
) |
|
|
— |
|
|
|
(18,132 |
) |
|
|
— |
|
Benefit for income taxes |
|
(967 |
) |
|
|
(435 |
) |
|
|
(613 |
) |
|
|
(2,544 |
) |
Adjusted EBITDA |
$ |
40,289 |
|
|
$ |
44,400 |
|
|
$ |
100,958 |
|
|
$ |
114,562 |
|
|
|
|
|
|
|
|
|
|
MAGNITE, INC.RECONCILIATION OF NET LOSS TO
NON-GAAP INCOME(In
thousands)(unaudited) |
|
|
Three Months Ended |
|
Nine Months Ended |
|
September 30, 2023 |
|
September 30, 2022 |
|
September 30, 2023 |
|
September 30, 2022 |
Net loss |
$ |
(17,477 |
) |
|
$ |
(24,391 |
) |
|
$ |
(190,098 |
) |
|
$ |
(93,938 |
) |
Add back (deduct): |
|
|
|
|
|
|
|
Merger, acquisition, and restructuring costs, including
amortization of acquired intangibles and excluding stock-based
compensation expense |
|
29,759 |
|
|
|
38,067 |
|
|
|
202,190 |
|
|
|
120,812 |
|
Stock-based compensation expense |
|
17,468 |
|
|
|
17,402 |
|
|
|
55,462 |
|
|
|
50,193 |
|
Non-operational real estate and other expense, net |
|
52 |
|
|
|
169 |
|
|
|
290 |
|
|
|
515 |
|
Foreign exchange gain, net |
|
(1,471 |
) |
|
|
(1,976 |
) |
|
|
(1,542 |
) |
|
|
(5,042 |
) |
Interest expense, Convertible Senior Notes |
|
623 |
|
|
|
250 |
|
|
|
2,112 |
|
|
|
750 |
|
Gain on extinguishment of debt |
|
(4,156 |
) |
|
|
— |
|
|
|
(18,132 |
) |
|
|
— |
|
Tax effect of Non-GAAP adjustments (1) |
|
(7,290 |
) |
|
|
(3,883 |
) |
|
|
(13,522 |
) |
|
|
(16,290 |
) |
Non-GAAP income |
$ |
17,508 |
|
|
$ |
25,638 |
|
|
$ |
36,760 |
|
|
$ |
57,000 |
|
(1 |
) |
Non-GAAP income includes the
estimated tax impact from the reconciling items between net loss
and non-GAAP income. |
|
MAGNITE, INC.RECONCILIATION OF GAAP LOSS
PER SHARE TO NON-GAAP EARNINGS PER SHARE(In
thousands, except per share
amounts)(unaudited) |
|
|
Three Months Ended |
|
Nine Months Ended |
|
September 30, 2023 |
|
September 30, 2022 |
|
September 30, 2023 |
|
September 30, 2022 |
GAAP loss per share (1): |
|
|
|
|
|
|
|
Basic and diluted |
$ |
(0.13 |
) |
|
$ |
(0.18 |
) |
|
$ |
(1.40 |
) |
|
$ |
(0.71 |
) |
|
|
|
|
|
|
|
|
Non-GAAP income (2) |
$ |
17,508 |
|
|
$ |
25,638 |
|
|
$ |
36,760 |
|
|
$ |
57,000 |
|
Non-GAAP earnings per
share |
$ |
0.12 |
|
|
$ |
0.18 |
|
|
$ |
0.25 |
|
|
$ |
0.40 |
|
|
|
|
|
|
|
|
|
Weighted-average shares used
to compute basic earnings (loss) per share |
|
137,372 |
|
|
|
133,144 |
|
|
|
136,084 |
|
|
|
132,611 |
|
Dilutive effect of weighted-average common stock options, RSUs, and
PSUs |
|
3,643 |
|
|
|
2,237 |
|
|
|
3,776 |
|
|
|
3,698 |
|
Dilutive effect of weighted-average ESPP shares |
|
84 |
|
|
|
49 |
|
|
|
37 |
|
|
|
23 |
|
Dilutive effect of weighted-average Convertible Senior Notes |
|
4,746 |
|
|
|
6,262 |
|
|
|
5,357 |
|
|
|
6,262 |
|
Non-GAAP weighted-average
shares outstanding (3) |
|
145,845 |
|
|
|
141,692 |
|
|
|
145,254 |
|
|
|
142,594 |
|
(1) Calculated as net income
(loss) divided by basic and diluted weighted-average shares used to
compute earnings (loss) per share as included in the condensed
consolidated statement of operations. |
(2) Refer to reconciliation of
net loss to non-GAAP income. |
(3) Non-GAAP earnings per
share is computed using the same weighted-average number of shares
that are used to compute GAAP earnings (loss) per share in periods
where there is both a non-GAAP loss and a GAAP net loss. |
|
MAGNITE, INC.CONTRIBUTION EX-TAC BY
CHANNEL(In
thousands)(unaudited) |
|
|
Contribution ex-TAC |
|
Three Months Ended |
|
Nine Months Ended |
|
September 30, 2023 |
|
September 30, 2022 |
|
September 30, 2023 |
|
September 30, 2022 |
|
|
|
|
Channel: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CTV |
$ |
52,468 |
|
39 |
% |
|
$ |
55,761 |
|
44 |
% |
|
$ |
154,964 |
|
40 |
% |
|
$ |
150,180 |
|
42 |
% |
Mobile |
|
54,971 |
|
41 |
% |
|
|
44,734 |
|
35 |
% |
|
|
155,260 |
|
41 |
% |
|
|
126,999 |
|
35 |
% |
Desktop |
|
25,697 |
|
20 |
% |
|
|
27,155 |
|
21 |
% |
|
|
73,643 |
|
19 |
% |
|
|
80,819 |
|
23 |
% |
Total |
$ |
133,136 |
|
100 |
% |
|
$ |
127,650 |
|
100 |
% |
|
$ |
383,867 |
|
100 |
% |
|
$ |
357,998 |
|
100 |
% |
Grafico Azioni Magnite (NASDAQ:MGNI)
Storico
Da Apr 2024 a Mag 2024
Grafico Azioni Magnite (NASDAQ:MGNI)
Storico
Da Mag 2023 a Mag 2024