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Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________
FORM 10-Q
__________________
  (Mark One)

  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2020
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____________ to _____________
 
Commission File Number: 001-36384
__________________
MAGNITE, INC.
(Exact name of registrant as specified in its charter)
 __________________
Delaware20-8881738
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
12181 Bluff Creek Drive, 4th FloorLos Angeles, CA
90094
(Address of principal executive offices, including zip code)
Registrant's telephone number, including area code:
(310) 207-0272
______________

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common stock, par value $0.00001 per shareMGNINasdaq Global Select Market
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes    No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).   Yes    No   
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Accelerated filer
Non-accelerated filer
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).   Yes  No
Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date.
ClassOutstanding as of August 6, 2020
Common Stock, $0.00001 par value110,250,959


Table of Contents
MAGNITE, INC.
QUARTERLY REPORT ON FORM 10-Q
TABLE OF CONTENTS
Page No.
Part I.
Item 1.
Item 2.
Item 3.
Item 4.
Part II.
Item 1.
Item 1A.
Item 2.
Item 6.
2

Table of Contents
PART I. FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements
MAGNITE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except per share amounts)
(unaudited)
June 30, 2020December 31, 2019
ASSETS
Current assets:
Cash and cash equivalents
$107,490  $88,888  
Accounts receivable, net
292,433  217,571  
Prepaid expenses and other current assets
10,265  6,591  
TOTAL CURRENT ASSETS
410,188  313,050  
Property and equipment, net
19,704  23,667  
Right-of-use lease asset
43,814  21,491  
Internal use software development costs, net
17,256  16,053  
Intangible assets, net
104,953  11,386  
Other assets, non-current
3,403  2,103  
Goodwill
157,804  7,370  
TOTAL ASSETS
$757,122  $395,120  
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses
$347,432  $259,439  
Lease liabilities, current
12,030  7,282  
Other current liabilities
2,881  778  
TOTAL CURRENT LIABILITIES
362,343  267,499  
Lease liabilities, non-current
34,598  15,231  
Other liabilities, non-current
2,710  454  
TOTAL LIABILITIES
399,651  283,184  
Commitments and contingencies (Note 11)


STOCKHOLDERS' EQUITY
Preferred stock, $0.00001 par value, 10,000 shares authorized at June 30, 2020 and December 31, 2019; 0 shares issued and outstanding at June 30, 2020 and December 31, 2019
    
Common stock, $0.00001 par value; 500,000 shares authorized at June 30, 2020 and December 31, 2019; 109,861 and 53,888 shares issued and outstanding at June 30, 2020 and December 31, 2019, respectively
2  1  
Additional paid-in capital
749,959  453,064  
Accumulated other comprehensive loss(2,603) (45) 
Accumulated deficit
(389,887) (341,084) 
TOTAL STOCKHOLDERS' EQUITY
357,471  111,936  
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
$757,122  $395,120  

The accompanying notes to unaudited condensed consolidated financial statements are an integral part of these statements.

3

Table of Contents
MAGNITE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(unaudited)
 Three Months EndedSix Months Ended
June 30, 2020June 30, 2019June 30, 2020June 30, 2019
Revenue$42,348  $37,870  $78,643  $70,286  
Expenses:
Cost of revenue21,545  15,085  35,548  30,201  
Sales and marketing20,029  11,519  31,298  22,111  
Technology and development13,063  9,839  23,756  19,555  
General and administrative15,780  10,027  24,907  20,307  
Merger and restructuring costs12,493    14,423    
Total expenses82,910  46,470  129,932  92,174  
Loss from operations(40,562) (8,600) (51,289) (21,888) 
Other (income) expense:
Interest (income) expense, net2  (214) (142) (407) 
Other income(1,284) (46) (1,293) (188) 
Foreign exchange (gain) loss, net(440) (143) (1,138) 158  
Total other income, net(1,722) (403) (2,573) (437) 
Loss before income taxes(38,840) (8,197) (48,716) (21,451) 
Provision (benefit) for income taxes288  84  87  (624) 
Net loss$(39,128) $(8,281) $(48,803) $(20,827) 
Net loss per share:
Basic and Diluted$(0.36) $(0.16) $(0.60) $(0.40) 
Weighted average shares used to compute net loss per share:
Basic and Diluted108,530  52,358  81,698  51,969  

The accompanying notes to unaudited condensed consolidated financial statements are an integral part of these statements.


 
4

Table of Contents
MAGNITE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(In thousands)
(unaudited)
Three Months EndedSix Months Ended
June 30, 2020June 30, 2019June 30, 2020June 30, 2019
Net loss$(39,128) $(8,281) $(48,803) $(20,827) 
Other comprehensive income (loss):
Unrealized gain on investments      2  
Foreign currency translation adjustments(1,769) (128) (2,558) (36) 
Other comprehensive loss(1,769) (128) (2,558) (34) 
Comprehensive loss$(40,897) $(8,409) $(51,361) $(20,861) 

The accompanying notes to unaudited condensed consolidated financial statements are an integral part of these statements.



5

Table of Contents
 

MAGNITE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(In thousands)
(unaudited)
Common Stock Additional
Paid-In
Capital
Accumulated  Other
Comprehensive
Income (Loss)
Accumulated
Deficit
Total
Stockholders’
Equity
Shares
Amount
Balance at December 31, 201851,159  $1  $433,877  $(259) $(315,606) $118,013  
Exercise of common stock options76  —  251  —  —  251  
Restricted stock awards, net(182) —  —  —  —  —  
Issuance of common stock related to employee stock purchase plan—  —  —  —  —  —  
Issuance of common stock related to RSU vesting1,171  —  —  —  —  —  
Shares withheld related to net share settlement(459) —  (1,835) —  —  (1,835) 
Stock-based compensation—  —  4,514  —  —  4,514  
Other comprehensive income—  —  —  94  —  94  
Net loss—  —  —  —  (12,546) (12,546) 
Balance at March 31, 201951,765  

$1  

$436,807  

$(165) 

$(328,152) 

$108,491  
Exercise of common stock options79  132    132  
Restricted stock awards, net—  —  —  —  —  —  
Issuance of common stock related to employee stock purchase plan118  —  477  —  —  477  
Issuance of common stock related to RSU vesting1,022  —  —  —  —  —  
Shares withheld related to net share settlement  —  (12) —  —  (12) 
Stock-based compensation—  —  4,949  —  —  4,949  
Other comprehensive income—  —  —  (128) —  (128) 
Net loss—  —  —  —  (8,281) (8,281) 
Balance at Balance at June 30, 201952,984  

$1  

$442,353  

$(293) 

$(336,433) 

$105,628  

6

Table of Contents
Common Stock Additional
Paid-In
Capital
Accumulated  Other
Comprehensive
Income (Loss)
Accumulated
Deficit
Total
Stockholders’
Equity
SharesAmount
Balance at December 31, 201953,888  $1  $453,064  $(45) $(341,084) $111,936  
Exercise of common stock options27  —  23  —  23  
Restricted stock awards, net—  —  —  —  —  —  
Issuance of common stock related to employee stock purchase plan—  —  —  —  —  —  
Issuance of common stock related to RSU vesting1,861  —  —  —  —  —  
Shares withheld related to net share settlement(716) —  (7,485) —  —  (7,485) 
Stock-based compensation—  —  4,218  —  —  4,218  
Other comprehensive loss—  —  —  (789) —  (789) 
Net loss—  —  —  —  (9,675) (9,675) 
Balance at March 31, 202055,060  $1  $449,820  $(834) $(350,759) $98,228  
Exercise of common stock options746  —  2,276  —  —  2,276  
Issuance of common stock related to employee stock purchase plan159  —  693  —  —  693  
Issuance of common stock related to RSU vesting1,904  —  —  —  —  —  
Shares withheld related to net share settlement(107) —  (349) —  —  (349) 
Issuance of common stock associated with the Merger52,099  1  275,772  —  —  275,773  
Exchange of stock options and RSU related to Merger—  —  11,646  —  —  11,646  
Stock-based compensation—  —  10,101  —  —  10,101  
Other comprehensive loss—  —  —  (1,769) —  (1,769)
Net loss—  —  —  —  (39,128) (39,128) 
Balance at Balance at June 30, 2020109,861  2  749,959  (2,603) (389,887) 357,471  


The accompanying notes to unaudited condensed consolidated financial statements are an integral part of these statements.
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MAGNITE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(unaudited)
Six Months Ended
June 30, 2020June 30, 2019
OPERATING ACTIVITIES:
Net loss$(48,803) $(20,827) 
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation and amortization22,081  16,814  
Stock-based compensation13,948  9,164  
(Gain) loss on disposal of property and equipment(12) 16  
Provision for doubtful accounts44  966  
Accretion of available-for-sale securities  24  
Non-cash lease expense(232) (379) 
Unrealized foreign currency gains, net(2,296) 777  
Deferred income taxes361  (752) 
Changes in operating assets and liabilities:
Accounts receivable73,728  26,831  
Prepaid expenses and other assets8,716  593  
Accounts payable and accrued expenses(83,193) (27,567) 
Other liabilities(5,838) (127) 
Net cash (used in) provided by operating activities(21,496) 5,533  
INVESTING ACTIVITIES:
Purchases of property and equipment(3,420) (2,212) 
Capitalized internal use software development costs(4,718) (4,160) 
Cash, cash equivalents and restricted cash acquired in Merger54,595    
Maturities of available-for-sale securities  7,500  
Net cash provided by investing activities46,457  1,128  
FINANCING ACTIVITIES:
Proceeds from exercise of stock options2,299  383  
Proceeds from issuance of common stock under employee stock purchase plan693  477  
Taxes paid related to net share settlement(7,834) (1,847) 
Net cash used in financing activities(4,842) (987) 
EFFECT OF EXCHANGE RATE CHANGES ON CASH, CASH EQUIVALENTS AND RESTRICTED CASH(265) (15) 
CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH19,854  5,659  
CASH, CASH EQUIVALENTS AND RESTRICTED CASH — Beginning of period88,888  80,452  
CASH, CASH EQUIVALENTS AND RESTRICTED CASH — End of period$108,742  $86,111  
SUPPLEMENTAL DISCLOSURES OF OTHER CASH FLOW INFORMATION:
Cash paid for income taxes$306  $145  
Cash paid for interest$34  $25  
Capitalized assets financed by accounts payable and accrued expenses$56  $118  
Capitalized stock-based compensation$371  $299  
Operating lease right-of-use assets obtained in exchange for new operating lease liabilities$162  $3,237  
Change in restricted cash$1,252  $  
Common stock and options issued for merger$287,418  $  
The accompanying notes to unaudited condensed consolidated financial statements are an integral part of these statements.
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MAGNITE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
Note 1—Organization and Summary of Significant Accounting Policies
Company Overview
Magnite, Inc., ("Magnite" or the "Company"), formerly known as The Rubicon Project, Inc., was formed and began operations in April 2007. On April 1, 2020, Magnite completed a stock-for-stock merger ("Merger") with Telaria, Inc., ("Telaria"), a leading provider of connected television ("CTV") technology. The Company operates a sell side advertising platform that offers buyers and sellers of digital advertising a single partner for transacting globally across all channels, formats, and auction types.
On June 8, 2020, the Company voluntarily delisted its common stock from the New York Stock Exchange ("NYSE") and commenced listing on The Nasdaq Global Select Market of The Nasdaq Stock Market LLC ("Nasdaq"). On June 30, 2020, the Company changed its name from "The Rubicon Project, Inc." to "Magnite, Inc." In connection with the name change, the Company also changed its ticker symbol from "RUBI" to "MGNI." Magnite has its principal offices in Los Angeles, New York City, London, and Sydney, and additional offices in Europe, Asia, North America, and South America.
The Company provides a technology solution to automate the purchase and sale of digital advertising inventory for buyers and sellers. The Company’s platform features applications and services for sellers of digital advertising inventory, or publishers, that own or operate websites, applications, CTV channels, and other digital media properties, to manage and monetize their inventory; applications and services for buyers, including advertisers, agencies, agency trading desks, and demand side platforms, to buy digital advertising inventory; and a transparent, independent marketplace that brings buyers and sellers together and facilitates intelligent decision making and automated transaction execution at scale. The Company's clients include many of the world's leading publishers of websites, CTV channels, mobile applications, and buyers of digital advertising inventory.
Publishers monetize their inventory through the Company’s platform by seamlessly connecting to a global market of integrated buyers that transact through real-time bidding, which includes direct sale of premium inventory to a buyer, referred to as private marketplace ("PMP"), and open auction bidding, where buyers bid against each other in a real-time auction for the right to purchase a publisher’s inventory, referred to as open marketplace ("OMP"). At the same time, buyers leverage the Company’s platform to manage their advertising spending and reach their target audiences, simplify order management and campaign tracking, obtain actionable insights into audiences for their advertising, and access impression-level purchasing from thousands of sellers.
Basis of Presentation and Summary of Significant Accounting Policies
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with United States Generally Accepted Accounting Principles, or GAAP, for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair statement of the results for the interim period presented have been included. Operating results for the six months ended June 30, 2020 are not necessarily indicative of the results that may be expected for any future interim period, the year ending December 31, 2020, or for any future year.
The condensed consolidated balance sheet at December 31, 2019 has been derived from the audited financial statements at that date, but does not include all of the disclosures required by GAAP. The accompanying condensed consolidated financial statements should be read in conjunction with the Company's audited consolidated financial statements and notes thereto for the year ended December 31, 2019 included in its 2019 Annual Report on Form 10-K.
There have been no significant changes in the Company's accounting policies from those disclosed in its audited consolidated financial statements and notes thereto for the year ended December 31, 2019 included in its Annual Report on Form 10-K.
Reclassifications
Certain prior period amounts have been reclassified to conform to the current period presentation. Specifically, this includes amounts reclassified during the six months ended June 30, 2020 to conform to the current presentation for the three months ended June 30, 2020 in the condensed consolidated statements of operations related to merger and restructuring costs.
Use of Estimates
The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported and disclosed financial statements and accompanying footnotes. Due to the economic uncertainty as a result of the COVID-19 pandemic, it has become more difficult to apply certain assumptions and judgments into these estimates. The extent of the impact of COVID-19 pandemic on the Company's operational and financial performance will depend on future developments, which are highly uncertain and cannot be predicted, including but not limited to, the duration and spread of the outbreak, its severity, including any resurgence, the actions to contain the virus or treat its impact, and
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how quickly and to what extent normal economic and operating conditions can resume, as discussed in more detail within Part II, Item 2: "Management's Discussion and Analysis" and Part II, Item 1A: "Risk Factors." During the six months ended June 30, 2020, this uncertainty resulted in a higher level of judgment related to its estimates and assumptions. As of the date of issuance of the condensed consolidated financial statements for the three and six months ended June 30, 2020, the Company is not aware of any specific event or circumstance that would require the Company to update its estimates, judgments, or revise the carrying value of its assets or liabilities. These estimates may change, as new events occur and additional information is obtained, and are recognized in the consolidated financial statements as soon as they become known. Actual results could differ from those estimates and any such differences may be material to the Company's financial statements.
Recently Adopted Accounting Standards
In June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-13—Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ("ASU 2016-13"). This guidance requires entities to use a current expected credit loss methodology to measure impairments of certain financial assets and to recognize an allowance for its estimate of lifetime expected credit losses. The main objective of this update is to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. The guidance was effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Company adopted ASU 2016-13 as of January 1, 2020. The standard had no material impact on its consolidated financial statements.
In August 2018, the FASB issued ASU 2018-13—Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement ("ASU 2018-13"), to streamline the disclosure requirements of ASC Topic 820—Fair Value Measurement. ASU 2018 removes certain disclosure requirements, including the valuation process for Level 3 fair value measurements, and adds certain quantitative disclosures around Level 3 fair value measurements. This ASU is effective for annual reporting periods beginning after December 15, 2019, including interim periods within that reporting period, with early adoption permitted. The provisions of ASU 2018-13 are required to be adopted retrospectively, with the exception of disclosure of the range and weighted average of significant unobservable inputs used to develop Level 3 measurements, which can be adopted prospectively. The Company adopted ASU 2018-13 as of January 1, 2020. The standard had no material impact on its consolidated financial statements and related disclosures.
In August 2018, the FASB issued ASU 2018-15—Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract ("ASU 2018-15"). ASU 2018-15 was issued to clarify the requirements of ASC 350-40—Intangibles—Goodwill and Other—Internal-Use Software ("ASC 350-40"). The ASU clarifies that implementation, setup and other upfront costs related to cloud computing agreements ("CCA") should be accounted for under ASC 350-40. ASC 2018-15 will require companies to capitalize certain costs incurred when purchasing a CCA that is a service. Under the new guidance, companies will apply the same criteria for capitalizing implementation costs in a CCA service as they would for internal-use software. The capitalized implementation costs will generally be expensed over the term of the service arrangement and the related assets will be assessed for impairment using the same model applied to long-lived assets. This ASU is effective for annual reporting periods beginning after December 15, 2019, including interim periods within that reporting period, with early adoption permitted. ASU 2018-15 can be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. The Company adopted ASU 2018-15 as of January 1, 2020 on a prospective basis. The standard had no material impact on its consolidated financial statements and related disclosures.
Recent Accounting Pronouncements
In December 2019, the FASB issued ASU 2019-12—Simplifying the Accounting for Income Taxes ("ASU 2019-12"). ASU 2019-12 simplifies the accounting for income taxes by removing certain exceptions to general principles in Topic 740 and clarifies and amends existing guidance for clarity and consistent application. This guidance is effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2020 including interim reporting periods within those fiscal years. Early adoption is permitted. The Company is evaluating the impact of adopting this new accounting guidance on its consolidated financial statements and related disclosures, but does not anticipate it will have a material impact.

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Note 2—Net Income (Loss) Per Share
The following table presents the basic and diluted net loss per share:  
Three Months EndedSix Months Ended
June 30, 2020June 30, 2019June 30, 2020June 30, 2019
(in thousands, except per share data)
Basic and Diluted EPS:
Net loss$(39,128) $(8,281) $(48,803) $(20,827) 
Weighted-average common shares outstanding108,530  52,369  81,698  52,004  
Weighted-average unvested restricted stock  (11)   (35) 
Weighted-average common shares outstanding used to compute net loss per share108,530  52,358  81,698  51,969  
Basic and diluted net loss per share$(0.36) $(0.16) $(0.60) $(0.40) 
The following weighted-average shares have been excluded from the calculation of diluted net loss per share attributable to common stockholders for each period presented because they are anti-dilutive:
Three Months EndedSix Months Ended
June 30, 2020June 30, 2019June 30, 2020June 30, 2019
(in thousands)(in thousands)
Options to purchase common stock1,999  605  1,619  559  
Unvested restricted stock awards1  5  1  24  
Unvested restricted stock units3,805  3,818  3,892  3,282  
Unvested performance stock units5    3    
ESPP30  28  45  28  
Total shares excluded from net loss per share5,840  4,456  5,560  3,893  
Note 3—Revenues
The Company generates revenue from transactions where it provides a platform for the purchase and sale of digital advertising inventory. The Company also generates revenue from the fee it charges clients for use of its Demand Manager product, which generally is a percentage of the client's advertising spending. The Company provides a technology solution to automate the purchase and sale of digital advertising inventory for buyers and sellers. Digital advertising inventory is created when consumers access sellers’ content. Sellers provide digital advertising inventory to the Company’s platform in the form of advertising requests, or ad requests. When the Company receives ad requests from sellers, it sends bid requests to buyers, which enable buyers to bid on sellers’ digital advertising inventory. Winning bids can create advertising, or paid impressions, for the seller to present to the consumer.
The total volume of spending between buyers and sellers on the Company’s platform is referred to as advertising spend. The Company keeps a percentage of that advertising spend as a fee, and remits the remainder to the seller. The fee that the Company retains from the gross advertising spend on its platform is recognized as revenue. The fee earned on each transaction is based on the pre-existing agreement between the Company and the seller and the clearing price of the winning bid. The Company recognizes revenue upon fulfillment of its performance obligation to a client, which occurs at the point in time an ad renders and is counted as a paid impression, subject to an underlying agreement existing with the client and a fixed or determinable transaction price. Performance obligations for all transactions are satisfied, and the corresponding revenue is recognized, at a distinct point in time when an ad renders. The Company does not have arrangements with multiple performance obligations.
The determination of whether revenue should be reported on a gross or net basis is based on an assessment of whether the Company is acting as the principal or an agent in the transaction. In determining whether the Company is acting as the principal or an agent, the Company follows the accounting guidance for principal-agent considerations. Making such determinations involves judgment and is based on an evaluation of the terms of each arrangement, none of which are considered presumptive or determinative.
For substantially all transactions on the Company's platform, the Company reports revenue on a net basis as it does not act as the principal in the purchase and sale of digital advertising inventory because it does not have control of the digital advertising inventory and does not set prices agreed upon within the auction marketplace. However, for certain transactions related to revenue streams acquired in connection with the Merger with Telaria, the Company reports revenue on a gross basis, based primarily on its
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determination that the Company acts as the primary obligor in the delivery of advertising campaigns for buyers with respect to such transactions. For the three months ended June 30, 2020, revenue reported on a gross basis was less than 2% of total revenue.
The following table presents our revenue by channel for the three and six months ended June 30, 2020 and 2019:
Three Months EndedSix Months Ended
June 30, 2020June 30, 2019June 30, 2020June 30, 2019
(in thousands, except percentages)
Channel:
CTV$7,919  19 %$   %$7,919  10 %$   %
Desktop15,271  36  16,588  44  30,567  39  31,809  45  
Mobile19,158  45  21,282  56  40,157  51  38,477  55  
Total$42,348  100 %$37,870  100 %$78,643  100 %$70,286  100 %
        The following table presents our revenue disaggregated by geographic location, based on the location of the Company's sellers:
Three Months EndedSix Months Ended
June 30, 2020June 30, 2019June 30, 2020June 30, 2019
(in thousands)(in thousands)
United States$30,587  $25,790  $56,120  $47,276  
International11,761  12,080  22,523  23,010  
Total$42,348  $37,870  $78,643  $70,286  
Payment terms are specified in agreements between the Company and the buyers and sellers on its platform. The Company generally bills buyers at the end of each month for the full purchase price of impressions filled in that month. The Company recognizes volume discounts as a reduction of revenue as they are incurred. Specific payment terms may vary by agreement, but are generally seventy-five days or less. The Company's accounts receivable are recorded at the amount of gross billings to buyers, net of allowances for the amounts the Company is responsible to collect. The Company's accounts payable related to amounts due to sellers are recorded at the net amount payable to sellers (see Note 5). Accordingly, both accounts receivable and accounts payable appear large in relation to revenue reported on a net basis.
At June 30, 2020, two buyers accounted for 37% and 10%, respectively, of consolidated accounts receivable. At December 31, 2019, two buyers accounted for 23% and 17%, respectively, of consolidated accounts receivable.
Accounts receivable are recorded at the invoiced amount, are unsecured, and do not bear interest. The allowance for doubtful accounts is reviewed quarterly, requires judgment, and is based on the best estimate of the amount of probable credit losses in existing accounts receivable. The Company reviews the status of the then-outstanding accounts receivable on a customer-by-customer basis, taking into consideration the aging schedule of receivables, its historical collection experience, current information regarding the client, subsequent collection history, and other relevant data, in establishing the allowance for doubtful accounts. Accounts receivable is presented net of an allowance for doubtful accounts of $4.7 million at June 30, 2020, and $3.4 million at December 31, 2019. Accounts receivable are written off against the allowance for doubtful accounts when the Company determines amounts are no longer collectible.
The Company reviews the associated payable to sellers for recovery of buyer receivable allowance and write-offs; in some cases, the Company can reduce the payable to sellers. The reduction of seller payables related to recovery of uncollected buyer receivables is netted against allowance expense. The contra seller payables related to recoveries were $2.2 million and $0.9 million as of June 30, 2020 and December 31, 2019, respectively.
The following is a summary of activity in the allowance for doubtful accounts for the three and six months ended June 30, 2020 and 2019:
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Three Months EndedSix Months Ended
June 30, 2020June 30, 2019June 30, 2020June 30, 2019
(in thousands)(in thousands)
Allowance for doubtful accounts, Beginning Balance$3,080  $4,530