0001595974-20-000151 | 10-Q | XBRL Viewer

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Cover Page - shares	9 Months Ended
Cover Page - shares	Sep. 30, 2020	Nov. 05, 2020
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2020
Document Transition Report	false
Entity File Number	001-36384
Entity Registrant Name	MAGNITE, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	20-8881738
Entity Address, Address Line One	12181 Bluff Creek Drive,
Entity Address, Address Line Two	4th Floor
Entity Address, City or Town	Los Angeles,
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	90094
City Area Code	(310)
Local Phone Number	207-0272
Title of 12(b) Security	Common stock, par value $0.00001 per share
Trading Symbol	MGNI
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		111,958,965
Entity Central Index Key	0001595974
Amendment Flag	false
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q3
Current Fiscal Year End Date	--12-31

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Current assets:
Cash and cash equivalents	$ 103,797	$ 88,888
Accounts receivable, net	412,435	217,571
Prepaid expenses and other current assets	13,367	6,591
TOTAL CURRENT ASSETS	529,599	313,050
Property and equipment, net	18,876	23,667
Right-of-use lease asset	42,736	21,491
Internal use software development costs, net	17,386	16,053
Intangible assets, net	97,131	11,386
Other assets, non-current	2,942	2,103
Goodwill	157,804	7,370
TOTAL ASSETS	866,474	395,120
Current liabilities:
Accounts payable and accrued expenses	457,428	259,439
Lease liabilities, current	11,176	7,282
Other current liabilities	5,019	778
TOTAL CURRENT LIABILITIES	473,623	267,499
Lease liabilities, non-current	34,242	15,231
Other liabilities, non-current	2,478	454
TOTAL LIABILITIES	510,343	283,184
Commitments and contingencies (Note 11)
STOCKHOLDERS' EQUITY
Preferred stock, $0.00001 par value, 10,000 shares authorized at September 30, 2020 and December 31, 2019; 0 shares issued and outstanding at September 30, 2020 and December 31, 2019	0	0
Common stock, $0.00001 par value; 500,000 shares authorized at September 30, 2020 and December 31, 2019; 110,712 and 53,888 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively	2	1
Additional paid-in capital	759,116	453,064
Accumulated other comprehensive loss	(2,585)	(45)
Accumulated deficit	(400,402)	(341,084)
TOTAL STOCKHOLDERS' EQUITY	356,131	111,936
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 866,474	$ 395,120

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2020	Dec. 31, 2019
Statement of Financial Position [Abstract]
Preferred stock, par value (usd per share)	$ 0.00001	$ 0.00001
Preferred stock, shares authorized (in shares)	10,000,000	10,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (usd per share)	$ 0.00001	$ 0.00001
Common stock, shares authorized (in shares)	500,000,000	500,000,000
Common stock, shares, issued (in shares)	110,712,000	53,888,000
Common stock, shares, outstanding (in shares)	110,712,000	53,888,000

Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Income Statement [Abstract]
Revenue	$ 60,982	$ 37,642	$ 139,625	$ 107,928
Expenses:
Cost of revenue	21,031	13,869	56,579	44,070
Sales and marketing	21,761	11,040	53,059	33,151
Technology and development	13,562	10,293	37,318	29,848
General and administrative	13,314	9,121	38,221	29,428
Merger and restructuring costs	2,254	0	16,677	0
Total expenses	71,922	44,323	201,854	136,497
Loss from operations	(10,940)	(6,681)	(62,229)	(28,569)
Other (income) expense:
Interest (income) expense, net	30	(218)	(112)	(625)
Other income	(1,194)	(48)	(2,487)	(236)
Foreign exchange (gain) loss, net	293	(296)	(845)	(138)
Total other income, net	(871)	(562)	(3,444)	(999)
Loss before income taxes	(10,069)	(6,119)	(58,785)	(27,570)
Provision (benefit) for income taxes	446	55	533	(569)
Net loss	$ (10,515)	$ (6,174)	$ (59,318)	$ (27,001)
Net loss per share:
Basic and Diluted (usd per share)	$ (0.10)	$ (0.12)	$ (0.65)	$ (0.52)
Weighted average shares used to compute net loss per share:
Basic and Diluted (in shares)	110,416	53,023	91,371	52,324

Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Statement of Comprehensive Income [Abstract]
Net loss	$ (10,515)	$ (6,174)	$ (59,318)	$ (27,001)
Other comprehensive income (loss):
Unrealized gain on investments	0	0	0	2
Foreign currency translation adjustments	18	(292)	(2,540)	(328)
Other comprehensive income (loss)	18	(292)	(2,540)	(326)
Comprehensive loss	$ (10,497)	$ (6,466)	$ (61,858)	$ (27,327)

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

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+ Details

Condensed Consolidated Statements of Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands	Total	Common Stock	Additional Paid-In Capital	Accumulated Other Comprehensive Income (Loss)	Accumulated Deficit
Beginning Balance (in shares) at Dec. 31, 2018		51,159
Beginning Balance at Dec. 31, 2018	$ 118,013	$ 1	$ 433,877	$ (259)	$ (315,606)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercise of common stock options (in shares)		76
Exercise of common stock options	251		251
Restricted stock awards, net (in shares)		(182)
Issuance of common stock related to RSU vesting (in shares)		1,171
Shares withheld related to net share settlement (in shares)		459
Shares withheld related to net share settlement	(1,835)		(1,835)
Stock-based compensation	4,514		4,514
Other comprehensive income (loss)	94			94
Net loss	(12,546)				(12,546)
Ending Balance (in shares) at Mar. 31, 2019		51,765
Ending Balance at Mar. 31, 2019	108,491	$ 1	436,807	(165)	(328,152)
Beginning Balance (in shares) at Dec. 31, 2018		51,159
Beginning Balance at Dec. 31, 2018	118,013	$ 1	433,877	(259)	(315,606)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Other comprehensive income (loss)	(326)
Net loss	(27,001)
Ending Balance (in shares) at Sep. 30, 2019		53,073
Ending Balance at Sep. 30, 2019	104,123	$ 1	447,314	(585)	(342,607)
Beginning Balance (in shares) at Mar. 31, 2019		51,765
Beginning Balance at Mar. 31, 2019	108,491	$ 1	436,807	(165)	(328,152)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercise of common stock options (in shares)		79
Exercise of common stock options	132	$ 0	132	0	0
Issuance of common stock related to employee stock purchase plan (in shares)		118
Issuance of common stock related to employee stock purchase plan	477		477
Issuance of common stock related to RSU vesting (in shares)		1,022
Shares withheld related to net share settlement	(12)		(12)
Stock-based compensation	4,949		4,949
Other comprehensive income (loss)	(128)			(128)
Net loss	(8,281)				(8,281)
Ending Balance (in shares) at Jun. 30, 2019		52,984
Ending Balance at Jun. 30, 2019	105,628	$ 1	442,353	(293)	(336,433)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercise of common stock options (in shares)		83
Exercise of common stock options	146		146
Issuance of common stock related to RSU vesting (in shares)		6
Stock-based compensation	4,815		4,815
Other comprehensive income (loss)	(292)			(292)
Net loss	(6,174)				(6,174)
Ending Balance (in shares) at Sep. 30, 2019		53,073
Ending Balance at Sep. 30, 2019	$ 104,123	$ 1	447,314	(585)	(342,607)
Beginning Balance (in shares) at Dec. 31, 2019	53,888	53,888
Beginning Balance at Dec. 31, 2019	$ 111,936	$ 1	453,064	(45)	(341,084)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercise of common stock options (in shares)		27
Exercise of common stock options	23		23
Issuance of common stock related to RSU vesting (in shares)		1,861
Shares withheld related to net share settlement (in shares)		716
Shares withheld related to net share settlement	(7,485)		(7,485)
Stock-based compensation	4,218		4,218
Other comprehensive income (loss)	(789)			(789)
Net loss	(9,675)				(9,675)
Ending Balance (in shares) at Mar. 31, 2020		55,060
Ending Balance at Mar. 31, 2020	$ 98,228	$ 1	449,820	(834)	(350,759)
Beginning Balance (in shares) at Dec. 31, 2019	53,888	53,888
Beginning Balance at Dec. 31, 2019	$ 111,936	$ 1	453,064	(45)	(341,084)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Other comprehensive income (loss)	(2,540)
Net loss	$ (59,318)
Ending Balance (in shares) at Sep. 30, 2020	110,712	110,712
Ending Balance at Sep. 30, 2020	$ 356,131	$ 2	759,116	(2,585)	(400,402)
Beginning Balance (in shares) at Mar. 31, 2020		55,060
Beginning Balance at Mar. 31, 2020	98,228	$ 1	449,820	(834)	(350,759)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercise of common stock options (in shares)		746
Exercise of common stock options	2,276		2,276
Issuance of common stock related to employee stock purchase plan (in shares)		159
Issuance of common stock related to employee stock purchase plan	693		693
Issuance of common stock related to RSU vesting (in shares)		1,904
Shares withheld related to net share settlement (in shares)		107
Shares withheld related to net share settlement	(349)		(349)
Issuance of common stock associated with the Merger (in shares)		52,099
Issuance of common stock associated with the Merger	275,773	$ 1	275,772
Exchange of stock options and RSU related to Merger	11,646		11,646
Stock-based compensation	10,101		10,101
Other comprehensive income (loss)	(1,769)			(1,769)
Net loss	(39,128)				(39,128)
Ending Balance (in shares) at Jun. 30, 2020		109,861
Ending Balance at Jun. 30, 2020	357,471	$ 2	749,959	(2,603)	(389,887)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercise of common stock options (in shares)		563
Exercise of common stock options	1,569		1,569
Issuance of common stock related to RSU vesting (in shares)		289
Shares withheld related to net share settlement (in shares)		1
Shares withheld related to net share settlement	(7)		(7)
Stock-based compensation	7,595		7,595
Other comprehensive income (loss)	18			18
Net loss	$ (10,515)				(10,515)
Ending Balance (in shares) at Sep. 30, 2020	110,712	110,712
Ending Balance at Sep. 30, 2020	$ 356,131	$ 2	$ 759,116	$ (2,585)	$ (400,402)

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
OPERATING ACTIVITIES:
Net loss	$ (59,318)	$ (27,001)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation and amortization	36,157	24,841
Stock-based compensation	21,298	13,877
(Gain) loss on disposal of property and equipment	(17)	92
Provision for doubtful accounts	31	897
Accretion of available-for-sale securities	0	24
Non-cash lease expense	(601)	(469)
Unrealized foreign currency gains, net	(2,108)	(391)
Deferred income taxes	837	(748)
Changes in operating assets and liabilities:
Accounts receivable	(46,145)	32,149
Prepaid expenses and other assets	(2,896)	672
Accounts payable and accrued expenses	23,464	(34,018)
Other liabilities	5,260	(117)
Net cash (used in) provided by operating activities	(24,038)	9,808
INVESTING ACTIVITIES:
Purchases of property and equipment	(4,211)	(5,605)
Capitalized internal use software development costs	(6,894)	(6,000)
Cash, cash equivalents and restricted cash acquired in Merger	54,595	0
Maturities of available-for-sale securities	0	7,500
Net cash provided by (used in) investing activities	43,490	(4,105)
FINANCING ACTIVITIES:
Proceeds from exercise of stock options	3,868	529
Proceeds from issuance of common stock under employee stock purchase plan	693	477
Taxes paid related to net share settlement	(7,841)	(1,847)
Net cash used in financing activities	(3,280)	(841)
EFFECT OF EXCHANGE RATE CHANGES ON CASH, CASH EQUIVALENTS AND RESTRICTED CASH	41	(192)
CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH	16,213	4,670
CASH, CASH EQUIVALENTS AND RESTRICTED CASH — Beginning of period	88,888	80,452
CASH, CASH EQUIVALENTS AND RESTRICTED CASH — End of period	105,101	85,122
SUPPLEMENTAL DISCLOSURES OF OTHER CASH FLOW INFORMATION:
Cash paid for income taxes	829	300
Cash paid for interest	49	46
Capitalized assets financed by accounts payable and accrued expenses	2,388	2,005
Capitalized stock-based compensation	616	401
Operating lease right-of-use assets obtained in exchange for new operating lease liabilities	2,036	13,074
Change in restricted cash	1,304	0
Common stock and options issued for Merger	$ 287,418	$ 0

Organization and Summary of Significant Accounting Policies	9 Months Ended
	Sep. 30, 2020
Accounting Policies [Abstract]
Organization and Summary of Significant Accounting Policies	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 nine months ended September 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 for the three months ended March 31, 2020 to conform to the current presentation for the three and nine months ended September 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 how quickly and to what extent normal economic and operating conditions can resume. During the nine months ended September 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 nine months ended September 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. The Company does not believe there are any other recently issued and effective or not yet effective pronouncements that would have or are expected to have any significant effect on the Company’s financial position, cash flows or results of operations.

Net Income (Loss) Per Share

9 Months Ended

Sep. 30, 2020

Earnings Per Share [Abstract]

Net Income (Loss) Per Share

The following table presents the basic and diluted net loss per share:


	Three Months Ended				Nine Months Ended
	September 30, 2020		September 30, 2019		September 30, 2020		September 30, 2019
	(in thousands, except per share data)
Basic and Diluted EPS:
Net loss	$	(10,515)	$	(6,174)	$	(59,318)	$	(27,001)
Weighted-average common shares outstanding	110,416		53,029		91,371		52,349
Weighted-average unvested restricted stock	—		(6)		—		(25)

Weighted-average common shares outstanding used to compute net loss per share	110,416		53,023		91,371		52,324
Basic and diluted net loss per share	$	(0.10)	$	(0.12)	$	(0.65)	$	(0.52)

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 Ended		Nine Months Ended
	September 30, 2020	September 30, 2019	September 30, 2020	September 30, 2019
	(in thousands)		(in thousands)
Options to purchase common stock	1,920	1,078	1,720	732
Unvested restricted stock awards	—	—	—	16
Unvested restricted stock units	3,768	5,168	3,851	3,911
Unvested performance stock units	14	—	6	—
ESPP	30	48	40	35
Total shares excluded from net loss per share	5,732	6,294	5,617	4,694

Revenues

9 Months Ended

Sep. 30, 2020

Revenue from Contract with Customer [Abstract]

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 on any advertising marketplace. The Company's platform dynamically connects sellers and buyers of advertising inventory in a digital marketplace. The Company's solution incorporates proprietary machine-learning algorithms, sophisticated data processing, high-volume storage, detailed analytics capabilities, and a distributed infrastructure. 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

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 September 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 nine months ended September 30, 2020 and 2019:


	Three Months Ended								Nine Months Ended
	September 30, 2020				September 30, 2019				September 30, 2020				September 30, 2019
	(in thousands, except percentages)
Channel:
CTV	$	11,059	18	%	$	—	—	%	$	18,978	14	%	$	—	—	%
Desktop	20,901		34		15,936		42		51,468		37		47,745		44
Mobile	29,022		48		21,706		58		69,179		49		60,183		56
Total	$	60,982	100	%	$	37,642	100	%	$	139,625	100	%	$	107,928	100	%

The following table presents our revenue disaggregated by geographic location, based on the location of the Company's sellers:


	Three Months Ended				Nine Months Ended
	September 30, 2020		September 30, 2019		September 30, 2020		September 30, 2019
	(in thousands)				(in thousands)
United States	$	45,048	$	26,378	$	101,168	$	73,654

International	15,934		11,264		38,457		34,274
Total	$	60,982	$	37,642	$	139,625	$	107,928

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 September 30, 2020, two buyers accounted for 37% and 9%, 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 $4.5 million at September 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 $1.9 million and $0.9 million as of September 30, 2020 and December 31, 2019, respectively.

The following is a summary of activity in the allowance for doubtful accounts for the three and nine months ended September 30, 2020 and 2019:


	Three Months Ended				Nine Months Ended
	September 30, 2020		September 30, 2019		September 30, 2020		September 30, 2019
	(in thousands)				(in thousands)
Allowance for doubtful accounts, Beginning Balance	$	4,672	$	1,720	$	3,400	$	1,340
Allowance for doubtful accounts, Merger-assumed	—		—		1,033		—
Write-offs	(1)		(71)		(1,897)		(3,278)
Increase (decrease) in provision for expected credit losses	(274)		(33)		1,854		3,554
Recoveries of previous write-offs	83		14		90		14
Allowance for doubtful accounts, September 30	$	4,480	$	1,630	$	4,480	$	1,630

During the three months ended September 30, 2020 and September 30, 2019, the provision for expected credit losses associated with accounts receivable and the offset by increases of contra seller payables related to recoveries of uncollected buyer receivables were insignificant, resulting in insignificant amount of bad debt. During the nine months ended September 30, 2020, the provision for expected credit losses associated with accounts receivable of $1.9 million was offset by increases of contra seller payables related to recoveries of uncollected buyer receivables of $1.8 million, which resulted in an insignificant amount of bad debt expense. During the nine months ended September 30, 2019, the provision for expected credit losses associated with accounts receivable of $3.6 million was offset by increases of contra seller payables related to recoveries of uncollected buyer receivables of $2.7 million, which resulted in bad debt expense of $0.9 million.

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-URI http://asc.fasb.org/topic&trid=49130388

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 10
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130551-203045

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (b)(2)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130556-203045

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 9
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130550-203045

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (e)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (d)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 15
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130558-203045

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045

+ Details

Fair Value Measurements

9 Months Ended

Sep. 30, 2020

Fair Value Disclosures [Abstract]

Fair Value Measurements

Recurring Fair Value Measurements

Fair value represents the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Observable inputs are based on market data obtained from independent sources. The fair value hierarchy is based on the following three levels of inputs, of which the first two are considered observable and the last one is considered unobservable:

•Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

•Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

•Level 3 – Unobservable inputs.

The table below sets forth a summary of financial instruments that are measured at fair value on a recurring basis at September 30, 2020:


	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(in thousands)
Cash equivalents	$	7,868	$	7,868	$	—	$	—

The table below sets forth a summary of financial instruments that are measured at fair value on a recurring basis at December 31, 2019:


	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(in thousands)
Cash equivalents	$	13,501	$	13,501	$	—	$	—

At September 30, 2020 and December 31, 2019, cash equivalents of $7.9 million and $13.5 million, respectively, consisted of money market funds and commercial paper, with original maturities of three months or less. The carrying amounts of cash equivalents are classified as Level 1 or Level 2 depending on whether or not their fair values are based on quoted market prices for identical securities that are traded in an active market.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Other Balance Sheet Amounts

9 Months Ended

Sep. 30, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Other Balance Sheet Amounts

Accounts payable and accrued expenses included the following:


	September 30, 2020		December 31, 2019
	(in thousands)
Accounts payable—seller	$	434,340	$	247,891
Accounts payable—trade	10,065		4,822
Accrued employee-related payables	13,023		6,726
Total	$	457,428	$	259,439

Restricted cash was $1.3 million at September 30, 2020, which is included in the ending balance of cash, cash equivalents and cash in the condensed consolidated statement of cash flows for the nine months ended September 30, 2020. Restricted cash of $0.6 million was included within prepaid and other current assets and $0.7 million was included within other assets, non-current. There was no restricted cash at December 31, 2019.

Goodwill and Intangible Assets

9 Months Ended

Sep. 30, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

The Company's goodwill balance as of September 30, 2020 and December 31, 2019 was $157.8 million and $7.4 million, respectively. The increase during the nine months ended September 30, 2020 was a result of the Merger with Telaria (see Note 7).

The Company’s intangible assets as of September 30, 2020 and December 31, 2019 included the following:


	September 30, 2020		December 31, 2019
	(in thousands)
Amortizable intangible assets:
Developed technology	$	77,158	$	19,658
Customer relationships	37,450		1,650
In-process research and development	8,230		—
Backlog	920		—
Non-compete agreements	70		70
Trademarks	200		20
Total identifiable intangible assets, gross	124,028		21,398
Accumulated amortization—intangible assets:
Developed technology	(18,110)		(9,823)
Customer relationships	(7,941)		(162)
In-process research and development	—		—
Backlog	(613)		—
Non-compete agreements	(33)		(7)
Trademarks	(200)		(20)
Total accumulated amortization—intangible assets	(26,897)		(10,012)
Total identifiable intangible assets, net	$	97,131	$	11,386

Amortization of intangible assets for the three months ended September 30, 2020 and 2019 was $7.8 million and $0.7 million, respectively, and $16.9 million and $2.3 million for the nine months ended September 30, 2020 and 2019, respectively.

The estimated remaining amortization expense associated with the Company's intangible assets was as follows as of September 30, 2020:


Fiscal Year	Amount
	(in thousands)
Remaining 2020	$	7,822
2021	30,772
2022	26,132
2023	13,881
2024	13,697
Thereafter	4,827
Total	$	97,131

Due to the economic impact associated with the COVID-19 pandemic, the Company performed a qualitative assessment of its long-lived assets and goodwill and concluded based on the Company's assessment of current market capitalization, adequate cash position, and expected future results, that there were no impairment indicators as of September 30, 2020 that would indicate impairment of its long-lived assets, including fixed assets, intangibles, and internal use capitalized software costs, and goodwill.

Business Combinations

9 Months Ended

Sep. 30, 2020

Business Combinations [Abstract]

Business Combinations

On April 1, 2020, (the "Acquisition Date"), the Company completed the Merger with Telaria. Upon completion of the Merger, each share of Telaria common stock issued and outstanding was converted into 1.082 shares of Magnite common stock. As a result, the Company issued 52,098,945 shares of Magnite common stock. In connection with the Merger, Magnite also assumed Telaria’s 2013 Equity Incentive Plan, as amended; 2008 Stock Plan, as amended; and the ScanScout, Inc. 2009 Equity Incentive Plan, as amended.

As of the Acquisition Date, former holders of Telaria common stock owned approximately 48% and pre-merger holders of Magnite common stock owned approximately 52% of the common stock of the combined company on a fully diluted basis.

The Merger was accounted for using the acquisition method of accounting in accordance with Accounting Standards Codification, referred to as ASC 805, Business Combinations. Magnite management determined that Magnite was the acquiror for financial accounting purposes. In identifying Magnite as the accounting acquiror, management considered the structure of the transaction and other actions contemplated by the merger agreement, relative outstanding share ownership and market values, the composition of the combined company’s board of directors, the relative size of Magnite and Telaria, and the designation of certain senior management positions of the combined company.

In accordance with ASC 805, the Company recorded the acquisition based on the fair value of the consideration transferred and then allocated the purchase price to the identifiable assets acquired and liabilities assumed based on their respective fair values as of the Acquisition Date. The excess of the value of consideration transferred over the aggregate fair value of those net assets was recorded as goodwill. Any identified definite lived intangible assets will be amortized over their estimated useful lives and any identified intangible assets with indefinite useful lives and goodwill will not be amortized but will be tested for impairment at least annually. All intangible assets and goodwill will be tested for impairment when certain indicators are present. Determining the fair value of assets acquired and liabilities assumed requires management to use significant judgment and estimates including the selection of valuation methodologies, estimates of future revenues and cash flows, discount rates, and selection of comparable companies.

Management's purchase price allocation is preliminary and subject to change pending finalization of the valuation, including finalization of tax attributes and tax related liabilities. Under the acquisition method of accounting for business combinations, if the Company identifies changes to acquired deferred tax asset ("DTA") valuation allowances or liabilities related to uncertain tax positions during the measurement period, and they are related to new information obtained about facts and circumstances that existed as of the acquisition date, those changes are considered a measurement-period adjustment, and the Company will record the offset to goodwill. The Company records all other changes to DTA valuation allowances and liabilities related to uncertain tax positions in current- period income tax expense.

For purposes of measuring the estimated fair value, where applicable, of the assets acquired and the liabilities assumed as reflected in the unaudited condensed combined financial information, the Company has applied the guidance in ASC 820, Fair Value Measurement, which establishes a framework for measuring fair value. In accordance with ASC 820, fair value is an exit price and is defined as "the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date." Under ASC 805, acquisition-related transaction costs and acquisition-related

restructuring charges are not included as components of consideration transferred but are accounted for as expenses in the period in which the costs are incurred.

As part of the Merger, existing outstanding restricted stock units of Telaria common stock and stock options to purchase common stock of Telaria were exchanged for 1.082 restricted stock units of the Company and options to purchase the Company's common stock, respectively. The fair value of stock options exchanged on the date of the Merger attributable to pre-acquisition services was recorded as purchase consideration. The fair value of the restricted stock units and stock options exchanged on the date of the Merger attributable to post-acquisition services will be recorded as additional stock-based compensation expense in the Company's consolidated statements of operations over their remaining requisite service (vesting) periods.

The following table summarizes the total purchase consideration (in thousands):


Shares of Magnite common stock	$	274,604
Fair value of stock-based awards exchanged	11,646
Acceleration of single trigger equity awards, converted	1,168
Total purchase consideration	$	287,418

The purchase consideration for the acquisition included 52,008,316 shares of the Company's common stock with a fair value of approximately $274.6 million, based on the Company's stock price as reported on the NYSE on the Acquisition Date. The fair value of stock options and restricted stock units exchanged on the Acquisition Date attributable to pre-acquisition services of approximately $10.4 million and $1.2 million, respectively, have been recorded as purchase consideration. In addition, the Company recorded additional purchase consideration associated with acceleration of 90,629 shares of common stock issued associated with single-trigger equity awards in the amount of $1.2 million.

The fair value of stock options and restricted stock units exchanged on the Acquisition Date attributable to post-acquisition services of $4.7 million and $12.2 million, respectively, will be recorded as additional stock-based compensation expense on the Company's consolidated statement of operations over their remaining requisite service (vesting) periods.

The fair value of the purchase price was allocated to the identifiable assets acquired and liabilities assumed based upon their estimated fair values as of the date of the acquisition as set forth below:


Cash and cash equivalents	$	51,848
Accounts receivable, net	150,924
Prepaid expenses and other current assets	3,190
Property and equipment, net	1,814
Right-of-use lease asset	26,627
Intangible assets	102,650
Restricted cash	2,747
Other assets, non-current	369
Deferred tax assets, non-current	103
Goodwill	150,434
Total assets acquired	$	490,706
Accounts payable and accrued expenses	173,643
Lease liabilities - current portion	5,322
Deferred revenue	11
Other current liabilities	365
Lease liabilities - non-current portion	23,323
Other liabilities, non-current	624

Total liabilities assumed	203,288
Total purchase price	$	287,418

The Company believes the amount of goodwill resulting from the purchase price allocation is primarily attributable to expected synergies from assembled workforce, an increase in development capabilities, increased offerings to customers, and enhanced opportunities for growth and innovation. Goodwill will not be amortized but instead will be tested for impairment at least

annually or more frequently if certain indicators of impairment are present. In the event that goodwill has become impaired, the Company will record an expense for the amount impaired during the quarter in which the determination is made. The goodwill generated in the Merger is not tax deductible.

The following table summarizes the components of the intangible assets and estimated useful lives (dollars in thousands):


			Estimated Useful Life
Technology	$	57,500	5 years
In-process research and development	8,230		4.7 years*
Customer relationships	35,800		2.5 years
Backlog	920		0.75 years
Trademarks	200		0.25 years
Total intangible assets acquired	$	102,650
* In-process research and development consists of two projects with a weighted-average useful life of 4.7 years. Amortization begins once associated projects are completed and it is determined the projects have alternative future use.

The intangible assets are generally amortized on a straight-line basis, which approximates the pattern in which the economic benefits are consumed, over their estimated useful lives. Amortization of developed technology is included in cost of revenues and the amortization of customer relationships, backlog, and trademarks is included in sales and marketing expenses in the condensed consolidated statement of operations. Once the projects associated with acquired in-process research and development are completed, amortization will be included in cost of revenues in the consolidated statement of operations. The intangible assets generated in the Merger are not tax deductible.

As such, as part of the Merger, deferred tax liabilities of $23.9 million were established related to the acquired intangible assets, which were fully offset by the estimated income tax effect of the partial release of Telaria's valuation allowance. The deferred tax liability was calculated based on an estimated combined tax rate of 23.3%.

The Company recognized approximately $2.3 million and $16.7 million of acquisition related costs during the three and nine months ended September 30, 2020, respectively (see Note 8). In addition, as part of the Merger, the Company acquired Telaria's U.S. federal NOLs of approximately $126.2 million and state NOLs of approximately $128.0 million. Pursuant to Section 382 of the Internal Revenue Code, Telaria, Inc. underwent an ownership change for tax purposes. As a result, the use of the NOLs will be subject to annual Section 382 use limitations. The Company believes the ownership change will not impact the Company's ability to utilize substantially all of the NOLs to the extent it generates taxable income that can be offset by such losses.

Unaudited Pro Forma Information

The following table provides unaudited pro forma information as if Telaria had been merged with the Company as of January 1, 2019. The unaudited pro forma information reflects adjustments for additional amortization resulting from the fair value adjustments to assets acquired and liabilities assumed, adjustments for alignment of accounting policies, and transaction expenses as if the Merger occurred on January 1, 2019. The pro forma results do not include any anticipated cost synergies or other effects of the integration merged companies. Accordingly, pro forma amounts are not necessarily indicative of the results that actually would have occurred had the acquisition been completed on the dates indicated, nor is it indicative of the future operating results of the combined company.


	Three Months Ended		Nine Months Ended
	September 30, 2019		September 30, 2020		September 30, 2019
	(in thousands)
Pro Forma Revenue	$	54,206	$	154,663	$	156,330
Pro Forma Net Loss	$	(15,592)	$	(69,706)	$	(73,358)

During the three and nine months ended September 30, 2020, post-Merger revenue on a stand-alone basis for Telaria was $19.7 million and $32.8 million, respectively. During the three and nine months ended September 30, 2020, due to the process of integrating the operations of Telaria into the operations of the Company, the determination of Telaria's post-Merger operating results on a standalone basis were impracticable.

Merger and Restructuring Costs

9 Months Ended

Sep. 30, 2020

Restructuring and Related Activities [Abstract]

Merger and Restructuring Costs

Merger and restructuring costs consist primarily of professional services fees and employee termination costs, including stock-based compensation charges, associated with the Merger and resulting restructuring activities.

The following table summarizes Merger and restructuring cost activity (in thousands):


	Three Months Ended		Nine Months Ended
	September 30, 2020		September 30, 2020
	(in thousands)
Professional Service (investment banking advisory, legal and other professional services)	$	952	$	9,533
Personnel related (severance and one-time termination benefit costs)	948		5,590
Non-cash stock-based compensation (double-trigger acceleration and severance)	354		1,554
Total merger and restructuring costs	$	2,254	$	16,677

Accrued restructuring costs related to the Merger were $5.1 million at September 30, 2020. Accrued restructuring costs are included within other liabilities on the Company's condensed consolidated balance sheets.


	(in thousands)
Accrued Merger and restructuring costs at December 31, 2019	$	—
Restructuring costs, personnel related and non-cash stock-based compensation	7,144
Restructuring costs, Merger assumed loss contracts	3,592
Cash paid for restructuring costs	(4,071)
Non-cash stock-based compensation	(1,554)
Accrued Merger and restructuring costs at September 30, 2020	$	5,111

Stock-Based Compensation

9 Months Ended

Sep. 30, 2020

Share-based Payment Arrangement [Abstract]

Stock-Based Compensation

Stock-Based CompensationThe Company’s equity incentive plans provide for the grant of equity awards, including non-statutory or incentive stock options, restricted stock awards ("RSAs"), and restricted stock units ("RSUs"), to the Company's employees, officers, directors, and consultants. The Company's board of directors administers the plans. Outstanding options vest based upon continued service at varying rates, but generally over four years from issuance with 25% vesting after one year of service and the remainder vesting monthly thereafter. RSAs and RSUs vest at varying rates, typically with approximately 25% vesting after approximately one year of service and the remainder vesting semi-annually thereafter, but with certain retention grants vesting 50% on each of the first and second anniversaries of the grant date. Restricted stock units granted in 2020 have approximately 25% of the award vesting after approximately one year of service and the remainder vesting quarterly thereafter. Options, RSAs, and RSUs granted under the plans accelerate under certain circumstances for certain participants upon a change in control, as defined in the governing plan or award agreement. An aggregate of 9,509,867 shares remained available for future grants at September 30, 2020 under the plans.

Stock Options

A summary of stock option activity for the nine months ended September 30, 2020 is as follows:


	Shares Under Option	Weighted- Average Exercise Price		Weighted- Average Contractual Life	Aggregate Intrinsic Value
	(in thousands)				(in thousands)
Outstanding at December 31, 2019	4,262	$	6.82
Granted	1,145	$	5.32
Options assumed in Merger	4,998	$	3.80
Exercised	(1,336)	$	2.90
Expired	(148)	$	13.31
Forfeited	(131)	$	5.14
Outstanding at September 30, 2020	8,790	$	5.42	5.54 years	$	20,257
Exercisable at September 30, 2020	5,732	$	5.68	4.05 years	$	13,828

The total intrinsic values of options exercised during the nine months ended September 30, 2020 was $5.9 million. At September 30, 2020, the Company had unrecognized employee stock-based compensation expense relating to unvested stock options of approximately $8.3 million, which is expected to be recognized over a weighted-average period of 2.6 years. Total fair value of options vested during the nine months ended September 30, 2020 was $3.7 million.

The Company estimates the fair value of stock options that contain service and/or performance conditions using the Black-Scholes option pricing model. The grant date fair value of options granted and assumed during the nine months ended September 30, 2020 was $3.17 per share. The grant date fair value of options granted during the nine months ended September 30, 2020, was $3.22 per share and the fair value of options assumed in the Merger was $3.16 per share.

The weighted-average input assumptions used by the Company were as follows for options granted during the respective periods:


	Three Months Ended			Nine Months Ended
	September 30, 2020		September 30, 2019	September 30, 2020		September 30, 2019
Expected term (in years)	6.3		N/A	6.3		6.1
Risk-free interest rate	0.33	%	N/A	0.45	%	2.51	%
Expected volatility	68	%	N/A	67	%	60	%
Dividend yield	—	%	N/A	—	%	—	%

Restricted Stock Awards

A summary of RSA activity for the nine months ended September 30, 2020 is as follows:


	Number of Shares	Weighted-Average Grant Date Fair Value
	(in thousands)
Unvested shares of restricted stock awards outstanding at December 31, 2019	2	$	13.49
Granted	—	$	—
Canceled	—	$	—
Vested	(2)	$	13.49
Unvested shares of restricted stock awards outstanding at September 30, 2020	—	$	—

There is no unrecognized stock-based compensation expense for RSAs at September 30, 2020 as they were fully vested.

Restricted Stock Units

A summary of RSU activity for the nine months ended September 30, 2020 is as follows:


	Number of Shares	Weighted-Average Grant Date Fair Value
	(in thousands)
Unvested restricted stock units outstanding at December 31, 2019	8,077	$	4.46
Granted	4,816	$	5.41
Restricted stock units assumed in Merger	2,416	$	5.40
Canceled	(773)	$	5.17
Vested	(4,054)	$	4.08
Unvested restricted stock units outstanding at September 30, 2020	10,482	$	5.21

The weighted-average grant date fair value per share of RSUs granted during the nine months ended September 30, 2020 was $5.41. The aggregate fair value of RSUs that vested during the nine months ended September 30, 2020 was $32.1 million. At September 30, 2020, the intrinsic value of unvested RSUs was $72.8 million. At September 30, 2020, the Company had unrecognized stock-based compensation expense relating to unvested RSUs of approximately $42.8 million, which is expected to be recognized over a weighted-average period of 2.5 years.

Performance Stock Units

In April 2020, the Company granted the Company's CEO 146,341 restricted stock units that vest based on certain stock price performance metrics with a fair value of $0.9 million. The grant date fair value per share of restricted stock was $6.15, which was estimated using a Monte-Carlo lattice model. During the three and nine months ended September 30, 2020, the Company recognized $0.1 million of stock-based compensation related to these performance stock units based on a performance measurement of 44.8%. At September 30, 2020, the Company had unrecognized employee stock-based compensation expense of approximately $0.8 million, which is expected to be recognized over the remaining 2.5 years. Between 0% and 150% of the performance stock units will vest on the third anniversary of its grant date. The compensation expense will not be reversed if the performance metrics are not met.

Employee Stock Purchase Plan

In November 2013, the Company adopted the Company's 2014 Employee Stock Purchase Plan ("ESPP"). The ESPP is designed to enable eligible employees to periodically purchase shares of the Company's common stock at a discount through payroll deductions of up to 10% of their eligible compensation, subject to any plan limitations. At the end of each six-month offering period, employees are able to purchase shares at a price per share equal to 85% of the lower of the fair market value of the Company's common stock on the first trading day of the offering period or on the last trading day of the offering period. Offering periods generally commence and end in May and November of each year.

As of September 30, 2020, the Company has reserved 2,271,459 shares of its common stock for issuance under the ESPP. The ESPP has an evergreen provision pursuant to which the share reserve will automatically increase on January 1st of each year in an amount equal to 1% of the total number of shares of capital stock outstanding on December 31st of the preceding calendar year, although the Company’s board of directors may provide for a lesser increase, or no increase, in any year.

Stock-Based Compensation Expense

Total stock-based compensation expense recorded in the condensed consolidated statements of operations was as follows:


	Three Months Ended				Nine Months Ended
	September 30, 2020		September 30, 2019		September 30, 2020		September 30, 2019
	(in thousands)				(in thousands)
Cost of revenue	$	122	$	110	$	412	$	308
Sales and marketing	2,309		1,378		5,928		4,182
Technology and development	2,061		1,157		5,469		3,382
General and administrative	2,504		2,068		7,935		6,005
Restructuring and other exit costs	354		—		1,554		—
Total stock-based compensation expense	$	7,350	$	4,713	$	21,298	$	13,877

Income Taxes	9 Months Ended
Income Taxes	Sep. 30, 2020
Income Tax Disclosure [Abstract]
Income Taxes	Income Taxes In determining quarterly provisions for income taxes, the Company uses the annual estimated effective tax rate applied to the actual year-to-date income. The Company's annual estimated effective tax rate differs from the statutory rate primarily as a result of state taxes, foreign taxes, nondeductible stock option expenses, and changes in the Company's valuation allowance. The Company recorded income tax expense of $0.4 million and $0.1 million for the three months ended September 30, 2020 and 2019, respectively, and an income tax expense of $0.5 million and benefit of $0.6 million for the nine months ended September 30, 2020 and 2019, respectively. The tax expense for the three and nine months ended September 30, 2020 is primarily the result of the domestic valuation allowance and the tax liability associated with the foreign subsidiaries. On March 27, 2020, President Trump signed into law the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act"), in response to the COVID-19 pandemic. The CARES Act is meant to infuse negatively affected companies with various tax cash benefits to ease the impact of the COVID-19 pandemic. The CARES Act, among other things, includes provisions relating to refundable payroll tax credits, deferment of employer-side social security payments, and net operating loss carryback periods. The Company has determined the tax implications of the CARES Act will not be material. To date the Company has not taken advantage of any relief under the Cares Act. In addition, various foreign jurisdictions where the Company has activity have enacted or are considering enacting a variety of measures that could impact our tax liabilities. The Company is monitoring new legislation and evaluating the potential tax implications of these measures globally. Due to uncertainty as to the realization of benefits from the Company's domestic and certain international deferred tax assets, including net operating loss carryforwards and research and development tax credits, the Company has a full valuation allowance reserved against such assets. The Company intends to continue to maintain a full valuation allowance on the deferred tax assets until there is sufficient evidence to support the reversal of all or some portion of these allowances. Due to the net operating loss carryforwards, all of the Company's United States federal and a majority of its state returns are open to examination by the Internal Revenue Service and state jurisdictions for all years since inception. The 2017 U.S. Income Tax Return for Telaria, Inc. is under examination by the IRS. The audit is in a preliminary phase and there have been no issues identified through the period ending September 30, 2020. For Canada, the Netherlands, and the United Kingdom, all tax years remain open for examination by the local country tax authorities, for France only 2018 forward are open for examination, for Singapore 2017 and forward are open for examination, for Brazil, New Zealand, and Malaysia 2016 and forward are open for examination, for Australia and Germany 2015 and forward are open for examination, and for Japan 2014 and forward remain open for examination. Pursuant to Section 382 of the Internal Revenue Code, the Company and Telaria, Inc. both underwent ownership changes for tax purposes (i.e. a more than 50% change in stock ownership in aggregated 5% shareholders) on April 1, 2020 due to the Merger. As a result, the use of our total domestic NOL carryforwards and tax credits generated prior to the ownership change will be subject to annual Section 382 use limitations. We believe that the ownership change will not impact our ability to utilize substantially all of our NOLs and carryforward credits to the extent we generate taxable income that can be offset by such losses. There were no material changes to the Company's unrecognized tax benefits in the nine months ended September 30, 2020, and the Company does not expect to have any significant changes to unrecognized tax benefits through the end of the fiscal year.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References + Details

Commitments and Contingencies	9 Months Ended
Commitments and Contingencies	Sep. 30, 2020
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies Commitments As of September 30, 2020 and December 31, 2019, the Company had $4.3 million and $2.5 million, respectively, of letters of credit associated with office leases available for borrowing, on which there were no outstanding borrowings as of either date. The Company also has operating lease agreements, discussed in more detail in Note 12. In addition, during the three months ended September 30, 2020, the Company entered into an agreement for third-party cloud-managed services. As part of the agreement, the Company has a minimum commitment to pay $20.0 million over the course of five years, with no annual minimum commitment. Guarantees and Indemnification The Company’s agreements with sellers, buyers, and other third parties typically obligate the Company to provide indemnity and defense for losses resulting from claims of intellectual property infringement, damages to property or persons, business losses, or other liabilities. Generally, these indemnity and defense obligations relate to the Company’s own business operations, obligations, and acts or omissions. However, under some circumstances, the Company agrees to indemnify and defend contract counterparties against losses resulting from their own business operations, obligations, and acts or omissions, or the business operations, obligations, and acts or omissions of third parties. For example, because the Company’s business interposes the Company between buyers and sellers in various ways, buyers often require the Company to indemnify them against acts and omissions of sellers, and sellers often require the Company to indemnify them against acts and omissions of buyers. In addition, the Company’s agreements with sellers, buyers, and other third parties typically include provisions limiting the Company’s liability to the counterparty, and the counterparty’s liability to the Company. These limits sometimes do not apply to certain liabilities, including indemnity obligations. These indemnity and limitation of liability provisions generally survive termination or expiration of the agreements in which they appear. The Company has also entered into indemnification agreements with its directors, executive officers, and certain other officers that will require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors, officers, or employees. No material demands have been made upon the Company to provide indemnification under such agreements and there are no claims that the Company is aware of that could have a material effect on the Company’s condensed consolidated financial statements. Litigation The Company and its subsidiaries may from time to time be parties to legal or regulatory proceedings, lawsuits and other claims incident to their business activities and to the Company’s status as a public company. Such routine matters may include, among other things, assertions of contract breach or intellectual property infringement, claims for indemnity arising in the course of the Company’s business, regulatory investigations or enforcement proceedings, and claims by persons whose employment has been terminated. Such matters are subject to many uncertainties, and outcomes are not predictable with assurance. Consequently, management is unable to ascertain the ultimate aggregate amount of monetary liability, amounts which may be covered by insurance or recoverable from third parties, or the financial impact with respect to such matters as of September 30, 2020. However, based on management’s knowledge as of September 30, 2020, management believes that the final resolution of these matters known at such date, individually and in the aggregate, will not have a material adverse effect upon the Company’s condensed consolidated financial position, results of operations or cash flows. Employment Contracts The Company has entered into severance agreements with certain employees and officers. The Company may be required to pay severance and accelerate the vesting of certain equity awards in the event of involuntary terminations.

Lease Obligations

9 Months Ended

Sep. 30, 2020

Leases [Abstract]

Lease Obligations

For the three months ended September 30, 2020 and 2019, the Company recognized $3.7 million and $2.0 million, respectively, and $9.7 million and $5.7 million during the nine months ended September 30, 2020 and 2019, respectively, of lease expense under ASC 842, which included operating lease expenses associated with leases included in the lease liability and ROU asset on the condensed consolidated balance sheet. In addition, for the three months ended September 30, 2020 and 2019, the Company recognized $0.4 million and $0.1 million, respectively, and $0.8 million and $0.5 million during the nine months ended September 30, 2020 and 2019, respectively, of lease expense related to short-term leases, and $5.6 million and $2.0 million during the three months ended September 30, 2020 and 2019, respectively, and $14.0 million and $8.4 million during the nine months ended September 30, 2020 and 2019, respectively, of variable and cloud-based services related to data centers that are not included in the ROU asset or lease liability balances.

The Company also received rental income of $1.2 million and $48.4 thousand for real estate leases for which it subleases the property to third parties during the three months ended September 30, 2020 and 2019, respectively, and $2.5 million and $0.2 million for the nine months ended September 30, 2020 and 2019, respectively.

As of September 30, 2020, a weighted average discount rate of 5.01% has been applied to the remaining lease payments to calculate the lease liabilities included within the condensed consolidated balance sheet. The lease terms of the Company’s operating leases generally range from one year to ten years, and the weighted average remaining lease term of leases included in the lease liability is 6.22 years as of September 30, 2020.

The maturity of the Company's lease liabilities were as follows (in thousands):


Fiscal Year
Remaining 2020	$	3,874
2021	11,611
2022	8,403
2023	7,483
2024	6,740
Thereafter	14,954
Total lease payments (undiscounted)	53,065
Less: imputed interest	(7,647)
Lease liabilities—total (discounted)	$	45,418

Debt	9 Months Ended
Debt	Sep. 30, 2020
Debt Disclosure [Abstract]
Debt	Debt On September 25, 2020, the Company amended and restated its loan and security agreement with Silicon Valley Bank ("SVB") (the "Loan Agreement"), which was scheduled to expire on September 26, 2020. The Loan Agreement provides a senior secured revolving credit facility of up to the lesser of $60.0 million and 85% of eligible accounts receivable, with a maturity date of September 25, 2022. The Loan Agreement includes a letter of credit, foreign exchange and cash management facility with a sublimit up to $10.0 million, of which $4.3 million was utilized for letters of credit related to leases as of September 30, 2020 (see Note 11). As of September 30, 2020, the amount available for borrowing was $55.7 million. The Company incurred $0.1 million of debt issuance fees that were capitalized and are being amortized over the term of the Loan Agreement. An unused revolver fee in the amount of 0.15% per annum of the average unused portion of the revolver line is charged and is payable monthly in arrears. The Company may elect for advances to bear interest calculated by reference to prime or LIBOR. If the Company elects LIBOR, amounts outstanding under the amended credit facility bear interest at a rate per annum equal to LIBOR plus 2.25%, with LIBOR having a floor of 3.5%. If the Company elects prime, advances bear interest at a rate of prime plus 0.25%, with prime having a floor of 3.5%. The Loan Agreement is collateralized by security interests in substantially all of the Company's assets. Subject to certain exceptions, the Loan Agreement restricts the Company's ability to, among other things, pay dividends, sell assets, make changes to the nature of the business, engage in mergers or acquisitions, incur, assume or permit to exist, additional indebtedness and guarantees, create or permit to exist, liens, make distributions or redeem or repurchase capital stock, or make other investments, engage in transactions with affiliates, make payments with respect to subordinated debt, and enter into certain transactions without the consent of the financial institution. The Company is required to maintain a lockbox arrangement where clients payments received in the lockbox will be deposited daily into the Company's operating bank accounts. The Loan Agreement requires the Company to comply with financial covenants, measured quarterly, with respect to a minimum liquidity ratio and maximum quarterly cash burn. The Company is required to maintain a minimum liquidity ratio of at least 1.25 on the last day of each quarter and not exceed, on an absolute basis, a maximum quarterly cash burn for specific periods, as defined in the Loan Agreement. The Liquidity Ratio is defined as Cash and Cash Equivalents, plus Accounts Receivable, less Accounts Payable - Seller, divided by all obligations the Company has to pay to SVB, including all debt balances, interest, service fees, and unused credit line fees, net of outstanding letters of credit as of the balance sheet date. Cash Burn is defined as Adjusted EBITDA less Capital Expenditures during the trailing periods as outlined in the Loan Agreement. The Loan Agreement defines Capital Expenditures as the current period unfinanced cash expenditures that are capitalized and amortized, including but not limited to property and equipment and capitalized labor costs as they relate to internal use software development costs. As of September 30, 2020, the Company was in compliance with its financial covenants. The Loan Agreement also includes customary representations and warranties, affirmative covenants, and events of default, including events of default upon a change of control and material adverse change (as defined in the Loan Agreement). Following an event of default, SVB would be entitled to, among other things, accelerate payment of amounts due under the credit facility and exercise all rights of a secured creditor. As of September 30, 2020, there were no amounts outstanding under the Loan Agreement (other than with respect to letters of credit). Future availability under the credit facility is dependent on several factors including the available borrowing base and compliance with future covenant requirements.

Organization and Summary of Significant Accounting Policies (Policies)	9 Months Ended
	Sep. 30, 2020
Accounting Policies [Abstract]
Basis of Presentation and Summary of Significant Accounting Policies	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 nine months ended September 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	Reclassifications Certain prior period amounts have been reclassified to conform to the current period presentation. Specifically, this includes amounts reclassified for the three months ended March 31, 2020 to conform to the current presentation for the three and nine months ended September 30, 2020 in the condensed consolidated statements of operations related to merger and restructuring costs.
Use of Estimates	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 how quickly and to what extent normal economic and operating conditions can resume. During the nine months ended September 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 nine months ended September 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 and Recent Accounting Pronouncements	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. The Company does not believe there are any other recently issued and effective or not yet effective pronouncements that would have or are expected to have any significant effect on the Company’s financial position, cash flows or results of operations.

Net Income (Loss) Per Share (Tables)

9 Months Ended

Sep. 30, 2020

Earnings Per Share [Abstract]

Schedule of Net Loss Per Share, Basic and Diluted

The following table presents the basic and diluted net loss per share:


	Three Months Ended				Nine Months Ended
	September 30, 2020		September 30, 2019		September 30, 2020		September 30, 2019
	(in thousands, except per share data)
Basic and Diluted EPS:
Net loss	$	(10,515)	$	(6,174)	$	(59,318)	$	(27,001)
Weighted-average common shares outstanding	110,416		53,029		91,371		52,349
Weighted-average unvested restricted stock	—		(6)		—		(25)

Weighted-average common shares outstanding used to compute net loss per share	110,416		53,023		91,371		52,324
Basic and diluted net loss per share	$	(0.10)	$	(0.12)	$	(0.65)	$	(0.52)

Schedule of Antidilutive Securities Excluded from Computation of Diluted Net Loss Per Share


	Three Months Ended		Nine Months Ended
	September 30, 2020	September 30, 2019	September 30, 2020	September 30, 2019
	(in thousands)		(in thousands)
Options to purchase common stock	1,920	1,078	1,720	732
Unvested restricted stock awards	—	—	—	16
Unvested restricted stock units	3,768	5,168	3,851	3,911
Unvested performance stock units	14	—	6	—
ESPP	30	48	40	35
Total shares excluded from net loss per share	5,732	6,294	5,617	4,694

Revenues (Tables)

9 Months Ended

Sep. 30, 2020

Revenue from Contract with Customer [Abstract]

Summary of Disaggregation of Revenue

The following table presents our revenue by channel for the three and nine months ended September 30, 2020 and 2019:


	Three Months Ended								Nine Months Ended
	September 30, 2020				September 30, 2019				September 30, 2020				September 30, 2019
	(in thousands, except percentages)
Channel:
CTV	$	11,059	18	%	$	—	—	%	$	18,978	14	%	$	—	—	%
Desktop	20,901		34		15,936		42		51,468		37		47,745		44
Mobile	29,022		48		21,706		58		69,179		49		60,183		56
Total	$	60,982	100	%	$	37,642	100	%	$	139,625	100	%	$	107,928	100	%

The following table presents our revenue disaggregated by geographic location, based on the location of the Company's sellers:


	Three Months Ended				Nine Months Ended
	September 30, 2020		September 30, 2019		September 30, 2020		September 30, 2019
	(in thousands)				(in thousands)
United States	$	45,048	$	26,378	$	101,168	$	73,654

International	15,934		11,264		38,457		34,274
Total	$	60,982	$	37,642	$	139,625	$	107,928

Accounts Receivable, Allowance for Credit Loss

The following is a summary of activity in the allowance for doubtful accounts for the three and nine months ended September 30, 2020 and 2019:


	Three Months Ended				Nine Months Ended
	September 30, 2020		September 30, 2019		September 30, 2020		September 30, 2019
	(in thousands)				(in thousands)
Allowance for doubtful accounts, Beginning Balance	$	4,672	$	1,720	$	3,400	$	1,340
Allowance for doubtful accounts, Merger-assumed	—		—		1,033		—
Write-offs	(1)		(71)		(1,897)		(3,278)
Increase (decrease) in provision for expected credit losses	(274)		(33)		1,854		3,554
Recoveries of previous write-offs	83		14		90		14
Allowance for doubtful accounts, September 30	$	4,480	$	1,630	$	4,480	$	1,630

Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2020

Fair Value Disclosures [Abstract]

Fair Value, Assets Measured on Recurring Basis

The table below sets forth a summary of financial instruments that are measured at fair value on a recurring basis at September 30, 2020:


	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(in thousands)
Cash equivalents	$	7,868	$	7,868	$	—	$	—

The table below sets forth a summary of financial instruments that are measured at fair value on a recurring basis at December 31, 2019:


	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(in thousands)
Cash equivalents	$	13,501	$	13,501	$	—	$	—

Other Balance Sheet Amounts (Tables)

9 Months Ended

Sep. 30, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses included the following:


	September 30, 2020		December 31, 2019
	(in thousands)
Accounts payable—seller	$	434,340	$	247,891
Accounts payable—trade	10,065		4,822
Accrued employee-related payables	13,023		6,726
Total	$	457,428	$	259,439

Goodwill and Intangible Assets (Tables)

9 Months Ended

Sep. 30, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Finite-Lived Intangible Assets

The Company’s intangible assets as of September 30, 2020 and December 31, 2019 included the following:


	September 30, 2020		December 31, 2019
	(in thousands)
Amortizable intangible assets:
Developed technology	$	77,158	$	19,658
Customer relationships	37,450		1,650
In-process research and development	8,230		—
Backlog	920		—
Non-compete agreements	70		70
Trademarks	200		20
Total identifiable intangible assets, gross	124,028		21,398
Accumulated amortization—intangible assets:
Developed technology	(18,110)		(9,823)
Customer relationships	(7,941)		(162)
In-process research and development	—		—
Backlog	(613)		—
Non-compete agreements	(33)		(7)
Trademarks	(200)		(20)
Total accumulated amortization—intangible assets	(26,897)		(10,012)
Total identifiable intangible assets, net	$	97,131	$	11,386

Schedule of Finite-Lived Intangible Assets, Future Amortization Expense

The estimated remaining amortization expense associated with the Company's intangible assets was as follows as of September 30, 2020:


Fiscal Year	Amount
	(in thousands)
Remaining 2020	$	7,822
2021	30,772
2022	26,132
2023	13,881
2024	13,697
Thereafter	4,827
Total	$	97,131

Business Combinations (Tables)

9 Months Ended

Sep. 30, 2020

Business Combinations [Abstract]

Purchase Consideration

The following table summarizes the total purchase consideration (in thousands):


Shares of Magnite common stock	$	274,604
Fair value of stock-based awards exchanged	11,646
Acceleration of single trigger equity awards, converted	1,168
Total purchase consideration	$	287,418

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed


Cash and cash equivalents	$	51,848
Accounts receivable, net	150,924
Prepaid expenses and other current assets	3,190
Property and equipment, net	1,814
Right-of-use lease asset	26,627
Intangible assets	102,650
Restricted cash	2,747
Other assets, non-current	369
Deferred tax assets, non-current	103
Goodwill	150,434
Total assets acquired	$	490,706
Accounts payable and accrued expenses	173,643
Lease liabilities - current portion	5,322
Deferred revenue	11
Other current liabilities	365
Lease liabilities - non-current portion	23,323
Other liabilities, non-current	624

Total liabilities assumed	203,288
Total purchase price	$	287,418

The following table summarizes the components of the intangible assets and estimated useful lives (dollars in thousands):


			Estimated Useful Life
Technology	$	57,500	5 years
In-process research and development	8,230		4.7 years*
Customer relationships	35,800		2.5 years
Backlog	920		0.75 years
Trademarks	200		0.25 years
Total intangible assets acquired	$	102,650
* In-process research and development consists of two projects with a weighted-average useful life of 4.7 years. Amortization begins once associated projects are completed and it is determined the projects have alternative future use.

Unaudited Pro Forma Information


	Three Months Ended		Nine Months Ended
	September 30, 2019		September 30, 2020		September 30, 2019
	(in thousands)
Pro Forma Revenue	$	54,206	$	154,663	$	156,330
Pro Forma Net Loss	$	(15,592)	$	(69,706)	$	(73,358)

Merger and Restructuring Costs (Tables)

9 Months Ended

Sep. 30, 2020

Restructuring and Related Activities [Abstract]

Merger and Restructuring Cost Activity

The following table summarizes Merger and restructuring cost activity (in thousands):


	Three Months Ended		Nine Months Ended
	September 30, 2020		September 30, 2020
	(in thousands)
Professional Service (investment banking advisory, legal and other professional services)	$	952	$	9,533
Personnel related (severance and one-time termination benefit costs)	948		5,590
Non-cash stock-based compensation (double-trigger acceleration and severance)	354		1,554
Total merger and restructuring costs	$	2,254	$	16,677


	(in thousands)
Accrued Merger and restructuring costs at December 31, 2019	$	—
Restructuring costs, personnel related and non-cash stock-based compensation	7,144
Restructuring costs, Merger assumed loss contracts	3,592
Cash paid for restructuring costs	(4,071)
Non-cash stock-based compensation	(1,554)
Accrued Merger and restructuring costs at September 30, 2020	$	5,111

Stock-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2020

Share-based Payment Arrangement [Abstract]

Schedule of Share-based Compensation, Stock Options, Activity

A summary of stock option activity for the nine months ended September 30, 2020 is as follows:


	Shares Under Option	Weighted- Average Exercise Price		Weighted- Average Contractual Life	Aggregate Intrinsic Value
	(in thousands)				(in thousands)
Outstanding at December 31, 2019	4,262	$	6.82
Granted	1,145	$	5.32
Options assumed in Merger	4,998	$	3.80
Exercised	(1,336)	$	2.90
Expired	(148)	$	13.31
Forfeited	(131)	$	5.14
Outstanding at September 30, 2020	8,790	$	5.42	5.54 years	$	20,257
Exercisable at September 30, 2020	5,732	$	5.68	4.05 years	$	13,828

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions

The weighted-average input assumptions used by the Company were as follows for options granted during the respective periods:


	Three Months Ended			Nine Months Ended
	September 30, 2020		September 30, 2019	September 30, 2020		September 30, 2019
Expected term (in years)	6.3		N/A	6.3		6.1
Risk-free interest rate	0.33	%	N/A	0.45	%	2.51	%
Expected volatility	68	%	N/A	67	%	60	%
Dividend yield	—	%	N/A	—	%	—	%

Nonvested Restricted Stock Shares Activity

A summary of RSA activity for the nine months ended September 30, 2020 is as follows:


	Number of Shares	Weighted-Average Grant Date Fair Value
	(in thousands)
Unvested shares of restricted stock awards outstanding at December 31, 2019	2	$	13.49
Granted	—	$	—
Canceled	—	$	—
Vested	(2)	$	13.49
Unvested shares of restricted stock awards outstanding at September 30, 2020	—	$	—

Schedule of Nonvested Restricted Stock Units Activity

A summary of RSU activity for the nine months ended September 30, 2020 is as follows:


	Number of Shares	Weighted-Average Grant Date Fair Value
	(in thousands)
Unvested restricted stock units outstanding at December 31, 2019	8,077	$	4.46
Granted	4,816	$	5.41
Restricted stock units assumed in Merger	2,416	$	5.40
Canceled	(773)	$	5.17
Vested	(4,054)	$	4.08
Unvested restricted stock units outstanding at September 30, 2020	10,482	$	5.21

Schedule of Compensation Cost for Share-based Payment Arrangements, Allocation of Share-based Compensation Costs for all Plans

Total stock-based compensation expense recorded in the condensed consolidated statements of operations was as follows:


	Three Months Ended				Nine Months Ended
	September 30, 2020		September 30, 2019		September 30, 2020		September 30, 2019
	(in thousands)				(in thousands)
Cost of revenue	$	122	$	110	$	412	$	308
Sales and marketing	2,309		1,378		5,928		4,182
Technology and development	2,061		1,157		5,469		3,382
General and administrative	2,504		2,068		7,935		6,005
Restructuring and other exit costs	354		—		1,554		—
Total stock-based compensation expense	$	7,350	$	4,713	$	21,298	$	13,877

Lease Obligations (Tables)

9 Months Ended

Sep. 30, 2020

Leases [Abstract]

Schedule of Maturity of Lease Liabilities

The maturity of the Company's lease liabilities were as follows (in thousands):


Fiscal Year
Remaining 2020	$	3,874
2021	11,611
2022	8,403
2023	7,483
2024	6,740
Thereafter	14,954
Total lease payments (undiscounted)	53,065
Less: imputed interest	(7,647)
Lease liabilities—total (discounted)	$	45,418

Net Income (Loss) Per Share - Basic and Diluted Net Loss Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended						9 Months Ended
	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Sep. 30, 2020	Sep. 30, 2019
Basic and Diluted EPS:
Net loss	$ (10,515)	$ (39,128)	$ (9,675)	$ (6,174)	$ (8,281)	$ (12,546)	$ (59,318)	$ (27,001)
Weighted-average common shares outstanding (in shares)	110,416			53,029			91,371	52,349
Weighted-average unvested restricted stock (in shares)	0			(6)			0	(25)
Weighted-average common shares outstanding used to compute net loss per share (in shares)	110,416			53,023			91,371	52,324
Basic and diluted net loss per share (usd per share)	$ (0.10)			$ (0.12)			$ (0.65)	$ (0.52)

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

+ Details

Net Income (Loss) Per Share - Shares Excluded From Calculation of Diluted Net Loss Per Share (Details) - shares shares in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total shares excluded from net loss per share (in shares)	5,732	6,294	5,617	4,694
Options to purchase common stock
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total shares excluded from net loss per share (in shares)	1,920	1,078	1,720	732
Unvested restricted stock awards
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total shares excluded from net loss per share (in shares)	0	0	0	16
Unvested restricted stock units
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total shares excluded from net loss per share (in shares)	3,768	5,168	3,851	3,911
Unvested performance stock units
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total shares excluded from net loss per share (in shares)	14	0	6	0
ESPP
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total shares excluded from net loss per share (in shares)	30	48	40	35

Revenues - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
Revenues - Narrative (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2018
Disaggregation of Revenue [Line Items]
Percent of revenue (less than)	2.00%
Payment terms			75 days
Concentration risk, percentage	100.00%	100.00%	100.00%	100.00%
Accounts receivable, allowance for credit loss	$ 4,480	$ 1,630	$ 4,480	$ 1,630	$ 3,400	$ 4,672	$ 1,720	$ 1,340
Contra seller payable	1,900		1,900		$ 900
Provision for doubtful accounts	$ (274)	$ (33)	1,854	3,554
Increase in contra seller payable			1,800	2,700
Provision for doubtful accounts			$ 31	$ 897
Customer One \| Customer Concentration Risk
Disaggregation of Revenue [Line Items]
Concentration risk, percentage			37.00%		23.00%
Customer Two \| Customer Concentration Risk
Disaggregation of Revenue [Line Items]
Concentration risk, percentage			9.00%		17.00%

Revenues - Revenue Disaggregated by Sales Distribution Channel (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Disaggregation of Revenue [Line Items]
Revenue	$ 60,982	$ 37,642	$ 139,625	$ 107,928
Concentration risk, percentage	100.00%	100.00%	100.00%	100.00%
CTV
Disaggregation of Revenue [Line Items]
Revenue	$ 11,059	$ 0	$ 18,978	$ 0
Concentration risk, percentage	18.00%	0.00%	14.00%	0.00%
Desktop
Disaggregation of Revenue [Line Items]
Revenue	$ 20,901	$ 15,936	$ 51,468	$ 47,745
Concentration risk, percentage	34.00%	42.00%	37.00%	44.00%
Mobile
Disaggregation of Revenue [Line Items]
Revenue	$ 29,022	$ 21,706	$ 69,179	$ 60,183
Concentration risk, percentage	48.00%	58.00%	49.00%	56.00%

- Definition

Amount, excluding tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value added and excise.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 30
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8906-108599

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 40
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9031-108599

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 41
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9038-108599

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 4
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130543-203045

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8736-108599

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8736-108599

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 42
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9054-108599

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 5
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130545-203045

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 924
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SAB Topic 11.L)
-URI http://asc.fasb.org/extlink&oid=6472922&loc=d3e499488-122856

+ Details

Revenues - Revenue Disaggregated by Geographic Location (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Disaggregation of Revenue [Line Items]
Revenue	$ 60,982	$ 37,642	$ 139,625	$ 107,928
United States
Disaggregation of Revenue [Line Items]
Revenue	45,048	26,378	101,168	73,654
International
Disaggregation of Revenue [Line Items]
Revenue	$ 15,934	$ 11,264	$ 38,457	$ 34,274

- Definition

+ References

+ Details

Revenues - Schedule of Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Accounts Receivable, Allowance for Credit Loss [Roll Forward]
Allowance for doubtful accounts, beginning balance	$ 4,672	$ 1,720	$ 3,400	$ 1,340
Allowance for doubtful accounts, Merger-assumed	0	0	1,033	0
Write-offs	(1)	(71)	(1,897)	(3,278)
Increase (decrease) in provision for expected credit losses	(274)	(33)	1,854	3,554
Recoveries of previous write-offs	83	14	90	14
Allowance for doubtful accounts, ending balance	$ 4,480	$ 1,630	$ 4,480	$ 1,630

Fair Value Measurements - Financial Instruments (Details) - Recurring - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	$ 7,868	$ 13,501
Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	7,868	13,501
Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	0	0
Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	$ 0	$ 0

Fair Value Measurements - Narrative (Details) - Recurring - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	$ 7,868	$ 13,501
Money Market Funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	$ 7,900	$ 13,500

Other Balance Sheet Amounts - Accounts Payable and Accrued Expenses (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Accounts payable—seller	$ 434,340	$ 247,891
Accounts payable—trade	10,065	4,822
Accrued employee-related payables	13,023	6,726
Total	$ 457,428	$ 259,439

Other Balance Sheet Amounts - Narrative (Details) - USD ($)	Sep. 30, 2020	Dec. 31, 2019
Condensed Balance Sheet Statements, Captions [Line Items]
Restricted cash	$ 1,300,000	$ 0
Prepaid Expenses and Other Current Assets
Condensed Balance Sheet Statements, Captions [Line Items]
Restricted cash	600,000
Other Noncurrent Assets
Condensed Balance Sheet Statements, Captions [Line Items]
Restricted cash	$ 700,000

Goodwill and Intangible Assets - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill	$ 157,804		$ 157,804		$ 7,370
Amortization expense of intangible assets	$ 7,800	$ 700	$ 16,900	$ 2,300

Goodwill and Intangible Assets - Finite-Lived Intangible Assets (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Finite-Lived Intangible Assets [Line Items]
Total identifiable intangible assets, gross	$ 124,028	$ 21,398
Total accumulated amortization—intangible assets	(26,897)	(10,012)
Total	97,131	11,386
Developed technology
Finite-Lived Intangible Assets [Line Items]
Total identifiable intangible assets, gross	77,158	19,658
Total accumulated amortization—intangible assets	(18,110)	(9,823)
Customer relationships
Finite-Lived Intangible Assets [Line Items]
Total identifiable intangible assets, gross	37,450	1,650
Total accumulated amortization—intangible assets	(7,941)	(162)
In-process research and development
Finite-Lived Intangible Assets [Line Items]
Total identifiable intangible assets, gross	8,230	0
Total accumulated amortization—intangible assets	0	0
Backlog
Finite-Lived Intangible Assets [Line Items]
Total identifiable intangible assets, gross	920	0
Total accumulated amortization—intangible assets	(613)	0
Non-compete agreements
Finite-Lived Intangible Assets [Line Items]
Total identifiable intangible assets, gross	70	70
Total accumulated amortization—intangible assets	(33)	(7)
Trademarks
Finite-Lived Intangible Assets [Line Items]
Total identifiable intangible assets, gross	200	20
Total accumulated amortization—intangible assets	$ (200)	$ (20)

Goodwill and Intangible Assets - Finite-Lived Intangible Assets, Future Amortization Expense (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Fiscal Year
Remaining 2020	$ 7,822
2021	30,772
2022	26,132
2023	13,881
2024	13,697
Thereafter	4,827
Total	$ 97,131	$ 11,386

Business Combinations - Narrative (Details) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
	Apr. 01, 2020	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Business Acquisition [Line Items]
Percent of company owned by pre-merger holders of company	52.00%
Merger and restructuring costs		$ 2,254	$ 0	$ 16,677	$ 0
Telaria
Business Acquisition [Line Items]
Common stock, shares, issued and outstanding (in shares)	1.082
Issued in merger plus acceleration (in shares)	52,098,945
Percent of company owned by holders of acquired company	48.00%
Issued in merger (in shares)	52,008,316
Shares of Magnite common stock	$ 274,604
Stock options exchanged pre-acquisition	10,400
Restricted stock units exchanged pre-acquisition	$ 1,200
Common stock, acceleration (in shares)	90,629
Acceleration of single trigger equity awards, converted	$ 1,168
Stock options exchanged post-acquisition	4,700
Restricted stock units exchanged post-acquisition	12,200
Deferred tax liabilities	$ 23,900
Deferred tax liabilities estimated tax rate	23.30%
Merger and restructuring costs		2,254		16,677
Net operating loss, federal				126,200
Net operating loss, state				128,000
Post merger revenue		$ 19,700		$ 32,800

Business Combinations - Purchase Consideration (Details) - Telaria $ in Thousands	Apr. 01, 2020 USD ($)
Business Acquisition [Line Items]
Shares of Magnite common stock	$ 274,604
Fair value of stock-based awards exchanged	11,646
Acceleration of single trigger equity awards, converted	1,168
Total purchase consideration	$ 287,418

Business Combinations - Schedule of Recognized Identified Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Apr. 01, 2020	Dec. 31, 2019
Business Acquisition [Line Items]
Goodwill	$ 157,804		$ 7,370
Telaria
Business Acquisition [Line Items]
Cash and cash equivalents		$ 51,848
Accounts receivable, net		150,924
Prepaid expenses and other current assets		3,190
Property and equipment, net		1,814
Right-of-use lease asset		26,627
Intangible assets		102,650
Restricted cash		2,747
Other assets, non-current		369
Deferred tax assets, non-current		103
Goodwill		150,434
Total assets acquired		490,706
Accounts payable and accrued expenses		173,643
Lease liabilities - current portion		5,322
Deferred revenue		11
Other current liabilities		365
Lease liabilities - non-current portion		23,323
Other liabilities, non-current		624
Total liabilities assumed		203,288
Total purchase price		$ 287,418

Business Combinations - Components of Intangible Assets and Estimated Useful Lives (Details) - Telaria $ in Thousands	Apr. 01, 2020 USD ($) project
Business Acquisition [Line Items]
Intangible assets	$ 102,650
Developed technology
Business Acquisition [Line Items]
Intangible assets	$ 57,500
Estimated Useful Life	5 years
In-process research and development
Business Acquisition [Line Items]
Intangible assets	$ 8,230
Estimated Useful Life	4 years 8 months 12 days
Number of projects \| project	2
Customer relationships
Business Acquisition [Line Items]
Intangible assets	$ 35,800
Estimated Useful Life	2 years 6 months
Backlog
Business Acquisition [Line Items]
Intangible assets	$ 920
Estimated Useful Life	9 months
Trademarks
Business Acquisition [Line Items]
Intangible assets	$ 200
Estimated Useful Life	3 months

Business Combinations - Unaudited Pro forma Information (Details) - Telaria - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Business Acquisition [Line Items]
Pro Forma Revenue	$ 54,206	$ 154,663	$ 156,330
Pro Forma Net Loss	$ (15,592)	$ (69,706)	$ (73,358)

Merger and Restructuring Costs - Merger and Restructuring Cost Activity (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Restructuring Cost and Reserve [Line Items]
Total merger and restructuring costs	$ 2,254	$ 0	$ 16,677	$ 0
Telaria
Restructuring Cost and Reserve [Line Items]
Professional Service (investment banking advisory, legal and other professional services)	952		9,533
Personnel related (severance and one-time termination benefit costs)	948		5,590
Non-cash stock-based compensation (double-trigger acceleration and severance)	354		1,554
Total merger and restructuring costs	$ 2,254		$ 16,677

Merger and Restructuring Costs - Narrative (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Telaria
Business Acquisition [Line Items]
Accrued restructuring costs related to the merger	$ 5,111	$ 0

Merger and Restructuring Costs - Accrued Merger and Restructuring Cost Activity (Details) - Telaria - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2020
Restructuring Reserve [Roll Forward]
Accrued Merger and restructuring costs at December 31, 2019		$ 0
Restructuring costs, personnel related and non-cash stock-based compensation		7,144
Restructuring costs, Merger assumed loss contracts		3,592
Cash paid for restructuring costs		(4,071)
Non-cash stock-based compensation	$ (354)	(1,554)
Accrued Merger and restructuring costs at September 30, 2020	$ 5,111	$ 5,111

Stock-Based Compensation - Narrative (Details)	9 Months Ended
Stock-Based Compensation - Narrative (Details)	Sep. 30, 2020 shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares available for grant	9,509,867
Stock Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	4 years
Stock Option \| Vesting After One Year of Service
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	1 year
Award vesting rights, percentage	25.00%
RSAs and RSUs \| Vesting After One Year of Service
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting rights, percentage	25.00%
RSAs and RSUs \| Vesting on First and Second Anniversary
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting rights, percentage	50.00%
Restricted Stock Units (RSUs) \| Vesting After One Year of Service
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	1 year
Award vesting rights, percentage	25.00%

Stock-Based Compensation - Stock Options Outstanding (Details) $ / shares in Units, shares in Thousands, $ in Thousands	9 Months Ended
	Sep. 30, 2020 USD ($) $ / shares shares
Shares Under Option
Beginning balance (in shares) \| shares	4,262
Granted (in shares) \| shares	1,145
Options assumed in merger (in shares) \| shares	4,998
Exercised (in shares) \| shares	(1,336)
Expired (in shares) \| shares	(148)
Forfeited (in shares) \| shares	(131)
Ending balance (in shares) \| shares	8,790
Exercisable (in shares) \| shares	5,732
Weighted- Average Exercise Price
Beginning balance (usd per share) \| $ / shares	$ 6.82
Granted (usd per share) \| $ / shares	5.32
Options assumed in merger (usd per share) \| $ / shares	3.80
Exercised (usd per share) \| $ / shares	2.90
Expired (usd per share) \| $ / shares	13.31
Forfeited (usd per share) \| $ / shares	5.14
Ending balance (usd per share) \| $ / shares	5.42
Exercisable (usd per share) \| $ / shares	$ 5.68
Weighted- Average Contractual Life
Outstanding	5 years 6 months 14 days
Exercisable	4 years 18 days
Aggregate Intrinsic Value
Outstanding \| $	$ 20,257
Exercisable \| $	$ 13,828

Stock-Based Compensation - Stock Options Narrative (Details) - Stock Option $ / shares in Units, $ in Millions	9 Months Ended
	Sep. 30, 2020 USD ($) $ / shares
Number of Shares
Intrinsic values of options exercised \| $	$ 5.9
Unrecognized employee stock-based compensation \| $	$ 8.3
Unrecognized employee stock-based compensation, period for recognition	2 years 7 months 6 days
Fair value of options vested in period \| $	$ 3.7
Grant date fair value of options granted ad assumed (usd per share) \| $ / shares	$ 3.17
Grant date fair value of options granted (usd per share) \| $ / shares	3.22
Grant date fair value of options assumed (usd per share) \| $ / shares	$ 3.16

Stock-Based Compensation - Valuation Assumptions (Details) - Stock Option	3 Months Ended	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2020	Sep. 30, 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected term (in years)	6 years 3 months 18 days	6 years 3 months 18 days	6 years 1 month 6 days
Risk-free interest rate	0.33%	0.45%	2.51%
Expected volatility	68.00%	67.00%	60.00%
Dividend yield	0.00%	0.00%	0.00%

Stock-Based Compensation - Restricted Stock Activity (Details) - Unvested restricted stock awards shares in Thousands	9 Months Ended
	Sep. 30, 2020 $ / shares shares
Number of Shares
Beginning balance (in shares) \| shares	2
Granted (in shares) \| shares	0
Canceled (in shares) \| shares	0
Vested (in shares) \| shares	(2)
Ending balance (in shares) \| shares	0
Weighted-Average Grant Date Fair Value
Beginning balance (in dollars per share) \| $ / shares	$ 13.49
Granted (in dollars per share) \| $ / shares	0
Canceled (in dollars per share) \| $ / shares	0
Vested (in dollars per share) \| $ / shares	13.49
Ending balance (in dollars per share) \| $ / shares	$ 0

Stock-Based Compensation - Restricted Stock Narrative (Details)	Sep. 30, 2020 USD ($)
Unvested restricted stock awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized employee stock-based compensation	$ 0

Stock-Based Compensation - Restricted Stock Units Activity (Details) - Restricted Stock Units (RSUs) - $ / shares	1 Months Ended	9 Months Ended
	Apr. 30, 2020	Sep. 30, 2020
Number of Shares
Beginning balance (in shares)		8,077,000
Granted (in shares)	146,341	4,816,000
Restricted stock units assumed in merger (in shares)		2,416,000
Canceled (in shares)		(773,000)
Vested (in shares)		(4,054,000)
Ending balance (in shares)		10,482,000
Weighted-Average Grant Date Fair Value
Beginning balance (in dollars per share)		$ 4.46
Granted (in dollars per share)		5.41
Restricted stock units assumed in merger (in dollars per share)		5.40
Canceled (in dollars per share)		5.17
Vested (in dollars per share)	$ 6.15	4.08
Ending balance (in dollars per share)		$ 5.21

Stock-Based Compensation - Restricted Stock Units Narrative (Details) - Restricted Stock Units (RSUs) - USD ($) $ / shares in Units, $ in Millions	1 Months Ended	9 Months Ended
	Apr. 30, 2020	Sep. 30, 2020
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in dollars per share)		$ 5.41
Fair value of restricted stock vested	$ 0.9	$ 32.1
Intrinsic value of nonvested unit		72.8
Unrecognized employee stock-based compensation		$ 42.8
Unrecognized employee stock-based compensation, weighted average period		2 years 6 months

Stock-Based Compensation - Employee Stock Purchase Plan Narrative (Details) - shares	1 Months Ended	9 Months Ended
	Nov. 30, 2013	Sep. 30, 2020
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares reserved		9,509,867
Employee Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Annual percentage increase		1.00%
2014 Employee Stock Purchase Plan \| Employee Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Maximum employee subscription rate	10.00%
Offering period	6 months
Purchase price of common stock, percent	85.00%
Number of shares reserved		2,271,459

Stock-Based Compensation - Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense	$ 7,350	$ 4,713	$ 21,298	$ 13,877
Cost of revenue
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense	122	110	412	308
Sales and marketing
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense	2,309	1,378	5,928	4,182
Technology and development
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense	2,061	1,157	5,469	3,382
General and administrative
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense	2,504	2,068	7,935	6,005
Restructuring and other exit costs
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense	$ 354	$ 0	$ 1,554	$ 0

Stock-Based Compensation - Performance Stock Units (Details) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended	3 Months Ended		9 Months Ended
	Apr. 30, 2020	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense		$ 7,350	$ 4,713	$ 21,298	$ 13,877
Restricted Stock Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in shares)	146,341			4,816,000
Fair value of restricted stock vested	$ 900			$ 32,100
Vested (in dollars per share)	$ 6.15			$ 4.08
Unrecognized employee stock-based compensation		42,800		$ 42,800
Performance Shares Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense		$ 100		$ 100
Performance measurement percentage		44.80%		44.80%
Unrecognized employee stock-based compensation		$ 800		$ 800
Unrecognized employee stock-based compensation, period for recognition				2 years 6 months
Performance Shares Units \| Minimum \| Vesting on third anniversary
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting rights, percentage				0.00%
Performance Shares Units \| Maximum \| Vesting on third anniversary
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting rights, percentage				150.00%

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
Income Taxes (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Income Tax Disclosure [Abstract]
Provision (benefit) for income taxes	$ 446	$ 55	$ 533	$ (569)

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References + Details

Commitments and Contingencies (Details) - USD ($) $ in Millions	3 Months Ended
	Sep. 30, 2020	Dec. 31, 2019
Other Commitments [Line Items]
Minimum commitment amount	$ 20.0
Commitment period	5 years
Financial Standby Letter of Credit
Other Commitments [Line Items]
Letters of credit outstanding, amount	$ 4.3	$ 2.5

Lease Obligations - Narrative (Details) - USD ($)	3 Months Ended		9 Months Ended
Lease Obligations - Narrative (Details) - USD ($)	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Lessee, Lease, Description [Line Items]
Lease expense	$ 3,700,000	$ 2,000,000.0	$ 9,700,000	$ 5,700,000
Short-term lease expense	400,000	100,000	800,000	500,000
Sublease income	$ 1,200,000	48,400	$ 2,500,000	200,000
Weighted average discount rate	5.01%		5.01%
Operating lease, weighted average remaining lease term	6 years 2 months 19 days		6 years 2 months 19 days
Minimum
Lessee, Lease, Description [Line Items]
Operating lease, remaining lease term	1 year		1 year
Maximum
Lessee, Lease, Description [Line Items]
Operating lease, remaining lease term	10 years		10 years
Data centers for cloud-based services
Lessee, Lease, Description [Line Items]
Variable lease cost	$ 5,600,000		$ 14,000,000.0
Lease cost		$ 2,000,000.0		$ 8,400,000

Lease Obligations - Schedule of Lease Liability Maturities (Details) $ in Thousands	Sep. 30, 2020 USD ($)
Fiscal Year
Remaining 2020	$ 3,874
2021	11,611
2022	8,403
2023	7,483
2024	6,740
Thereafter	14,954
Total lease payments (undiscounted)	53,065
Less: imputed interest	(7,647)
Lease liabilities—total (discounted)	$ 45,418

Debt (Details) - USD ($)	Sep. 25, 2020	Sep. 30, 2020	Dec. 31, 2019
Financial Standby Letter of Credit
Debt Instrument [Line Items]
Letters of credit outstanding, amount		$ 4,300,000	$ 2,500,000
Revolving Credit Facility \| Loan Agreement
Debt Instrument [Line Items]
Maximum borrowing capacity	$ 60,000,000.0
Eligible accounts receivable	85.00%
Available borrowing capacity		55,700,000
Capitalized debt issuance costs		100,000
Unused capacity fee, percentage	0.15%
Minimum liquidity ratio	1.25
Debt outstanding amount		0
Revolving Credit Facility \| Loan Agreement \| Streamline Period Does Not Apply \| London Interbank Offered Rate (LIBOR)
Debt Instrument [Line Items]
Variable interest rate	2.25%
Debt instrument, variable rate floor	3.50%
Revolving Credit Facility \| Loan Agreement \| Streamline Period Applies \| Prime Rate
Debt Instrument [Line Items]
Variable interest rate	0.25%
Debt instrument, variable rate floor	3.50%
Revolving Credit Facility \| Loan Agreement Sublimit
Debt Instrument [Line Items]
Maximum borrowing capacity		$ 10,000,000.0

Stock-Based Compensation - Restricted Stock Activity (Details) - Unvested restricted stock awards shares in Thousands	9 Months Ended
	Sep. 30, 2020 $ / shares shares
Number of Shares
Beginning balance (in shares) \| shares	2
Granted (in shares) \| shares	0
Canceled (in shares) \| shares	0
Vested (in shares) \| shares	(2)
Ending balance (in shares) \| shares	0
Weighted-Average Grant Date Fair Value
Beginning balance (in dollars per share) \| $ / shares	$ 13.49
Granted (in dollars per share) \| $ / shares	0
Canceled (in dollars per share) \| $ / shares	0
Vested (in dollars per share) \| $ / shares	13.49
Ending balance (in dollars per share) \| $ / shares	$ 0