Digital advertising platform Magnite (NASDAQ:MGNI) missed Wall Street’s revenue expectations in Q1 CY2025 as sales rose 4.3% year on year to $155.8 million. Its non-GAAP profit of $0.12 per share was significantly above analysts’ consensus estimates.
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Revenue: $155.8 million vs analyst estimates of $159.9 million (4.3% year-on-year growth, 2.6% miss)
Adjusted EPS: $0.12 vs analyst estimates of $0.06 (significant beat)
Adjusted EBITDA: $36.8 million vs analyst estimates of $30.43 million (23.6% margin, 20.9% beat)
Operating Margin: -0.9%, up from -9.3% in the same quarter last year
Market Capitalization: $2.46 billion
Magnite’s first quarter performance was influenced by continued expansion in connected TV (CTV) advertising and a rebound in its digital video (DV+) segment. Management credited growth to deeper partnerships with leading streaming platforms and the rollout of new programmatic tools. CEO Michael Barrett highlighted the launch of the next-generation SpringServe platform, describing it as a unified solution that streamlines premium ad buying and supply for both buyers and media owners. The quarter also benefited from increased live sports streaming and advancements in AI-powered audience curation, which improved the efficiency and targeting of campaigns across the platform.
Looking ahead, Magnite’s outlook is shaped by product investments, anticipated industry changes from the Google antitrust case, and macroeconomic uncertainty related to tariffs. Management emphasized that behavior or structural remedies arising from the court’s ruling could quickly level the competitive landscape in digital advertising. CFO David Day noted that improvements in operational efficiency and ongoing investments in hybrid infrastructure are expected to drive margin expansion in future periods. While management remains cautious due to potential dampening in certain advertiser verticals, Barrett stated, “We are highly encouraged by the Court’s initial ruling on liability and believe it will be highly beneficial for the open Internet.”
Management cited new product launches, deepening media partnerships, and industry developments as key drivers of quarterly results and future expectations.
SpringServe platform launch: Magnite introduced the next generation of its SpringServe platform, integrating ad serving and programmatic capabilities to offer buyers more efficient access to inventory and publishers streamlined operations. This differentiation aims to strengthen Magnite’s position as CTV ad budgets grow.
CTV partnership growth: The company deepened relationships with major streaming platforms such as Roku, LG, Netflix, and Warner Bros. Discovery. Notably, Netflix expanded its programmatic advertising globally, with Magnite playing a central role in the ad stack, which management expects will significantly contribute to revenue.
Live sports expansion: Live events remain a top priority, with Magnite’s Livestream acceleration technology supporting nearly 20 partners. The NCAA basketball tournament and expansion into international sports, including FIFA+ and Champions League, were highlighted as drivers of increased ad spend.
AI and curation investments: Magnite continued developing AI-driven tools for audience discovery and campaign optimization. The company’s AI-powered audience discovery feature within its Curator product is gaining traction, and management anticipates further benefits from integrating generative AI and large language models (LLMs) into CTV inventory targeting.
Google antitrust ruling: The recent court finding against Google for monopolistic practices in its ad server and exchange businesses presents a potential catalyst. Management estimates that even small increases in market share from Google could have an outsized impact on Magnite’s revenue and margins, given the high incremental profitability of additional ad auction wins.
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