MAGNITE, INC.MGNI
MAGNITE, INC. Stock Compensation Disclosure
Stock-Based Compensation
In connection with its IPO, the Company implemented its 2014 Equity Incentive Plan, which governs equity awards made to employees and directors of the Company since the IPO. In November 2014, the Company approved the 2014 Inducement Grant Equity Incentive Plan (the "Inducement Plan"), which governs certain equity awards made to certain employees in connection with commencement of employment. In connection with the Company's acquisition of nToggle, Inc. ("nToggle"), it assumed the nToggle 2014 Equity Incentive Plan (the "nToggle Plan"), and in connection with the merger with Telaria, Inc. ("Telaria"), the Company assumed Telaria's 2013 Equity Incentive Plan, as amended (the "Telaria Plan"). Available shares under the nToggle Plan and the Telaria Plan were rolled into the available share pool under the 2014 Equity Incentive Plan at the time of acquisition of and merger with, respectively, each company. On June 14, 2023, the Company's stockholders approved the Magnite, Inc. Amended and Restated 2014 Equity Incentive Plan (the "Amended and Restated 2014 Equity Incentive Plan"), which, among other things, increased the aggregate maximum number of shares of common stock that may be issued under the plan, removed the prior evergreen provision, and extended the plan through April 2033. All compensatory equity awards outstanding at December 31, 2025 were issued pursuant to the Amended and Restated 2014 Equity Incentive Plan, the 2014 Equity Incentive Plan, the nToggle Plan, the Telaria Plan, or the Inducement Plan.
The Company’s equity incentive plans provide for the grant of equity awards, including non-statutory or incentive stock options, restricted stock awards ("RSAs"), restricted stock units that vest based on continuous service ("RSUs"), and restricted stock units that include performance criteria (“performance stock units” or "PSUs"), to the Company's employees, officers, directors, and consultants. The Company's board of directors administers the plans. 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 approximately 25% vesting after approximately one year of service and the remainder vesting annually, semi-annually, or quarterly thereafter. In addition, each Director of the Company's Board of Directors receives an annual grant which vests at the earlier of the one year anniversary of the grant date and the following annual shareholder meeting in addition to an initial equity awards in the first year of their election into the Board of Directors. Options, RSAs, RSUs,
and PSUs granted under the plans accelerate under certain circumstances for certain participants upon a change in control, as defined in the governing plan. As of December 31, 2025, an aggregate of 16,576,998 shares remained available for future grants, assuming target number of PSUs, under the Amended and Restated 2014 Equity Incentive Plan.
Stock Options
A summary of stock option activity for the year ended December 31, 2025 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, 2024 | 4,160 | $ | 8.57 | ||||||||||||||||||||
| Granted | 81 | $ | 16.46 | ||||||||||||||||||||
| Exercised | (526) | $ | 5.82 | ||||||||||||||||||||
| Expired | (28) | $ | 17.23 | ||||||||||||||||||||
| Outstanding at December 31, 2025 | 3,687 | $ | 9.07 | 3.9 years | $ | 31,543 | |||||||||||||||||
| Exercisable at December 31, 2025 | 3,477 | $ | 8.84 | 3.6 years | $ | 30,808 | |||||||||||||||||
The total intrinsic value of options exercised during the years ended December 31, 2025, 2024, and 2023 was $8.4 million, $1.0 million, and $2.2 million, respectively, based on their respective exercise dates. At December 31, 2025, the Company had unrecognized stock-based compensation expense relating to unvested stock options of approximately $1.5 million, which is expected to be recognized over a weighted-average period of 2.0 years.
The Company estimates the fair value of stock options that contain service conditions using the Black-Scholes option pricing model. The grant date fair value of options granted during the years ended December 31, 2025, 2024, and 2023 was $11.40, $6.34, and $7.27, respectively, per share. The weighted-average input assumptions used by the Company were as follows:
| Year Ended | ||||||||||||||||||||
| December 31, 2025 | December 31, 2024 | December 31, 2023 | ||||||||||||||||||
| Expected term (in years) | 5.0 | 5.0 | 5.0 | |||||||||||||||||
| Risk-free interest rate | 4.45 | % | 3.93 | % | 3.99 | % | ||||||||||||||
| Expected volatility | 84 | % | 84 | % | 84 | % | ||||||||||||||
| Dividend yield | — | % | — | % | — | % | ||||||||||||||
Restricted Stock Units
A summary of restricted stock unit ("RSU") activity for the year ended December 31, 2025 is as follows:
| Number of Shares | Weighted-Average Grant Date Fair Value | ||||||||||
| (in thousands) | |||||||||||
| Restricted stock units outstanding at December 31, 2024 | 11,809 | $ | 10.69 | ||||||||
| Granted | 4,372 | $ | 16.59 | ||||||||
| Canceled | (840) | $ | 11.73 | ||||||||
| Vested and released | (5,823) | $ | 11.43 | ||||||||
| Restricted stock units outstanding at December 31, 2025 | 9,518 | $ | 12.86 | ||||||||
The weighted-average grant date fair value per share of restricted stock units granted during the years ended December 31, 2025, 2024, and 2023 was $16.59, $9.43, and $10.67, respectively.
The fair value of restricted stock units that vested and were released during the years ended December 31, 2025, 2024, and 2023 was $109.3 million, $61.9 million, and $50.7 million, respectively, based on their respective vesting dates. At December 31, 2025, the intrinsic value of unvested restricted stock units was $154.5 million. At December 31, 2025, the Company had unrecognized stock-based compensation expense relating to unvested restricted stock units of approximately $100.7 million, which is expected to be recognized over a weighted-average period of 2.3 years.
Performance Stock Units
The Company granted 379,635 performance stock units ("PSU") to the Company's CEO in August 2021, (the "August 2021 PSUs"), which are subject to both time-based and performance-based vesting conditions. The PSUs consist of three equal tranches (each, a "Performance Tranche"), based on achievement of a share price condition if the Company achieves share price targets of $60.00, $80.00, and $100.00, respectively, over 60 consecutive trading days during a performance period commencing on August 26, 2022 and ending on August 26, 2026. The grant date fair value for such PSUs was estimated using a Monte-Carlo simulation model that incorporates option-pricing inputs covering the period from the grant date through the end of the performance period. To the extent any of the performance-based requirements are met, the Company's CEO must also provide continued service to the Company through at least August 26, 2024 to receive any shares of common stock underlying the grant and through August 26, 2026 to receive all of the shares of common stock underlying the performance units that have satisfied the applicable performance-based requirement.
In 2022 and 2023, the Company granted PSUs to select executive employees that vest based on share price metrics tied to total shareholder return ("TSR") relative to a peer group over a three-year period, assuming a performance measurement of 100%. These PSUs are also subject to a time-based service component. The grant date fair value for such PSUs was estimated using a Monte-Carlo simulation model that incorporates option-pricing inputs covering the period from the grant date through the end of the performance period. Between 0% and 150% of the performance stock units will vest at the end of the performance period, which is generally on the third anniversary of the PSU grant date.
In 2024, the Company granted PSUs to select executive employees that vest based on share price metrics tied to total shareholder return ("TSR") relative to a peer group over a three-year period beginning January 1, 2024, as well as certain interim measurements based on relative TSR for the one-year and two-year periods beginning on January 1, 2024, assuming a performance measurement of 100%. At December 31, 2024, the one-year interim performance measurement was 150%, subject to the remaining vesting criteria and at December 31, 2025, the two-year interim performance measurement was also 150%, subject to the remaining vesting criteria.
In 2025, the Company granted PSUs with an aggregate target of 346,287 shares, assuming a performance measurement of 100%. The amount of shares that will ultimately vest will be determined based on the Company's TSR relative to the TSRs of a peer group for the three-year period beginning January 1, 2025, as well as certain interim measurements based on relative TSR for the one-year and two-year periods beginning on January 1, 2025. At December 31, 2025, the first one-year interim performance measurement was 80%, subject to the remaining vesting criteria.
Stock-based compensation expense for PSUs is based on the grant date fair value and the number of shares assuming a performance measurement of 100%. The compensation expense will not be reversed if the performance metrics are not met.
A summary of PSU activity for the year ended December 31, 2025 is as follows:
| Number of Shares | Weighted-Average Grant Date Fair Value | ||||||||||
| (in thousands) | |||||||||||
Outstanding at December 31, 2024 | 1,427 | $ | 15.35 | ||||||||
Granted* | 368 | $ | 20.72 | ||||||||
Vested and released* | (108) | $ | 17.28 | ||||||||
Outstanding at December 31, 2025 | 1,687 | $ | 16.40 | ||||||||
* PSUs granted and weighted-average grant date fair value include 22 shares issued above the target shares for PSUs that vested and were released during the year ended December 31, 2025. | |||||||||||
The grant date fair value for the PSUs was estimated using a Monte-Carlo simulation model. The grant date fair value of PSUs granted during the years ended December 31, 2025, 2024, and 2023 was $20.93, $11.76, and $13.32, respectively, per share. The weighted-average input assumptions used by the Company were as follows:
| Year Ended | ||||||||||||||||||||
| December 31, 2025 | December 31, 2024 | December 31, 2023 | ||||||||||||||||||
Performance period (in years) | 3.0 | 3.0 | 3.0 | |||||||||||||||||
| Risk-free interest rate | 4.26 | % | 4.05 | % | 4.19 | % | ||||||||||||||
| Expected volatility of Magnite | 78 | % | 87 | % | 94 | % | ||||||||||||||
Expected volatility of selected peer companies | 56 | % | 55 | % | 64 | % | ||||||||||||||
Expected correlation coefficients of Magnite | 0.57 | 0.59 | 0.62 | |||||||||||||||||
Expected correlation coefficients of selected peer companies | 0.47 | 0.47 | 0.54 | |||||||||||||||||
| Dividend yield | — | % | — | % | — | % | ||||||||||||||
The fair value of PSUs that vested and were released during the year ended December 31, 2025 was $1.9 million, based on their respective vesting dates. No PSUs vested during the years ended December 31, 2024. The fair value of PSUs that vested and were released during the year ended December 31, 2023 was $1.2 million, based on their respective vesting dates. At December 31, 2025, the intrinsic value of unvested performance stock units based on expected achievement levels was $26.0 million. As of December 31, 2025, the Company had unrecognized stock-based compensation expense relating to unvested PSUs of approximately $7.1 million, which will be recognized over a weighted-average period of 1.2 years.
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.
On June 14, 2023, the Company's stockholders approved the Magnite, Inc. Amended and Restated 2014 Employee Stock Purchase Plan (the "Amended and Restated 2014 Employee Stock Purchase Plan"), which, among other things, removed the evergreen provision and extended the plan through June 2033. As of December 31, 2025, the Company has reserved 3,959,114 shares of its common stock for issuance under the Company's Amended and Restated 2014 Employee Stock Purchase Plan.
Stock-Based Compensation Expense
Total stock-based compensation expense recorded in the consolidated statements of operations was as follows:
| Year Ended | |||||||||||||||||
| December 31, 2025 | December 31, 2024 | December 31, 2023 | |||||||||||||||
| (in thousands) | |||||||||||||||||
| Cost of revenue | $ | 2,130 | $ | 1,924 | $ | 1,809 | |||||||||||
| Sales and marketing | 32,942 | 31,436 | 27,263 | ||||||||||||||
| Technology and development | 17,025 | 18,210 | 20,542 | ||||||||||||||
| General and administrative | 24,551 | 24,949 | 22,860 | ||||||||||||||
| Merger, acquisition, and restructuring costs | — | — | 143 | ||||||||||||||
| Total stock-based compensation expense | $ | 76,648 | $ | 76,519 | $ | 72,617 | |||||||||||
For the year ended December 31, 2025, the Company recognized $57.3 million of income tax benefit on stock-based compensation expense related to 2025, which was reflected in the provision (benefit) for income taxes in the consolidated statements of operations. For the year ended December 31, 2025, income tax benefit realized related to awards vested or exercised during 2025 was $27.3 million. For the year ended December 31, 2024, the Company recognized $1.1 million of income tax benefit on stock-based compensation expense related to 2024, which was reflected in the provision (benefit) for income taxes in the consolidated statements of operations. For the year ended December 31, 2024, income tax benefit realized related to awards vested or exercised during 2024 was $14.5 million. For the year ended December 31, 2023, the Company recognized $5.5 million of income tax expense on stock-based compensation expense related to 2023, which was reflected in the provision (benefit) for income
taxes in the consolidated statements of operations. For the year ended December 31, 2023, income tax benefit realized related to awards vested or exercised during 2023 was $12.5 million.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 25, 2026 | Showing above |
| 2017 | Mar 15, 2018 | |
About Stock Compensation Disclosures
Stock-based compensation disclosures detail the equity awards granted to employees and executives — including stock options, restricted stock units (RSUs), and performance shares — along with the valuation methods and assumptions used to expense them. This section reveals the true cost of talent retention and the alignment between management incentives and shareholder interests.
Key signals: total unrecognized compensation expense and its expected recognition period signal future earnings headwinds from already-granted awards. For stock options, examine Black-Scholes assumptions — expected volatility, risk-free rate, and expected term — as understating any of these reduces reported compensation expense. Compare stock compensation expense as a percentage of revenue against peers to assess dilution cost. Watch vesting schedules for acceleration clauses tied to change-of-control events. Performance-based awards with undemanding targets may indicate weak governance. Add back stock compensation to operating cash flow to calculate a more conservative free cash flow figure.