Digital advertising platform Magnite (NASDAQ: MGNI) fell short of the market’s revenue expectations in Q2 CY2025, but sales rose 6.4% year on year to $173.3 million. Its non-GAAP profit of $0.20 per share was 20.3% above analysts’ consensus estimates.

Is now the time to buy MGNI? Find out in our full research report (it’s free).

StockStory’s Take

Magnite’s second quarter results were met with a negative market reaction, as revenue fell short of Wall Street expectations despite year-on-year growth. Management attributed the performance to continued strength in connected TV (CTV), where new partnerships and expanded programmatic adoption drove results. CEO Michael Barrett highlighted the company’s “unique combination of ad server and streaming platform” and noted robust growth from key clients like Roku, Netflix, and Warner Bros. Discovery. The team also pointed to progress in margin improvement, citing disciplined investment and technology-driven cost reductions.

Looking ahead, Magnite’s forward outlook centers on accelerating CTV growth, further progress in programmatic live sports, and the anticipated impact of regulatory changes in digital advertising. Management emphasized the potential for market share gains if remedies in the ongoing antitrust case against Google are implemented, with Barrett stating, “We believe any remedy that results in a more level playing field will be highly beneficial for our business.” CFO David Day also noted plans to reinvest in engineering and sales to support key initiatives, while continuing to drive operational efficiency.

Key Insights from Management’s Remarks

Management credited second quarter performance to CTV partnership momentum, cost discipline, and expanding programmatic opportunities, while highlighting ongoing headwinds and new growth initiatives.

• CTV partnership momentum: Magnite strengthened its position as a preferred supply-side partner for large streaming publishers, deepening relationships with Roku, Netflix, LG, Warner Bros. Discovery, and Paramount. Warner Bros. Discovery’s launch of the NEO platform, powered by Magnite, expanded access to premium video inventory.

• SMB and DSP expansion: The company cited growing demand from small and mid-sized brands entering CTV, enabled by maturing technology and normalized pricing. The public debut of MNTN, a small business-focused demand-side platform (DSP), signaled broader adoption, with Magnite’s SpringServe platform positioned to support these partners.

• Live sports programmatic growth: Magnite highlighted new wins in live sports, including a deal with FanDuel Sports Network, as evidence that programmatic buying is gaining traction in streaming sports rights, with the company investing in this area for future growth.

• DV+ product enhancements: The DV+ segment, covering non-CTV digital video and display, saw improved performance due to new product features and expanded partnerships, including launches with Spotify, T-Mobile, and Redfin. Management expects commerce media to be a sustained growth driver.

• AI and operational efficiency: Ongoing investment in artificial intelligence (AI) improved traffic shaping and audience discovery, while a shift from cloud-based infrastructure to hybrid on-premises systems contributed to margin expansion and lower per-unit costs.

Drivers of Future Performance

Magnite expects continued CTV adoption, regulatory developments, and operational efficiency efforts to shape its performance over the next year.

• CTV and programmatic adoption: Management believes continued migration of TV ad budgets to streaming platforms, the expansion of live sports rights, and increased small business adoption will drive revenue and strengthen Magnite’s position among leading publishers.

• Regulatory and industry shifts: The potential implementation of remedies in the Google antitrust case could create an opportunity for Magnite to capture market share in digital video and display (DV+), with management estimating each 1% shift could yield $50 million in annualized contribution.

• Margin expansion and tech investment: The company aims to further expand non-GAAP margins through ongoing infrastructure improvements and cost controls, while selectively increasing investment in engineering and sales to support growth initiatives like ClearLine, curation, and live sports.

Catalysts in Upcoming Quarters

In the coming quarters, our analysts will monitor (1) the pace of CTV and live sports programmatic adoption, (2) any shifts in DV+ market share as the Google antitrust case progresses, and (3) the company’s ability to maintain margin improvements as it invests in engineering and sales. Progress in expanding small business access to CTV and commercialization of new AI-powered tools will also be critical markers of execution.

Magnite currently trades at $22.14, down from $22.45 just before the earnings. At this price, is it a buy or sell? The answer lies in our full research report (it’s free).

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