Digital advertising platform Magnite (NASDAQ: MGNI) reported Q3 CY2025 results beating Wall Street’s revenue expectations, with sales up 10.8% year on year to $179.5 million. Its non-GAAP profit of $0.20 per share was in line with analysts’ consensus estimates.
Is now the time to buy MGNI? Find out in our full research report (it’s free for active Edge members).
Magnite (MGNI) Q3 CY2025 Highlights:
- Revenue: $179.5 million vs analyst estimates of $178 million (10.8% year-on-year growth, 0.9% beat)
- Adjusted EPS: $0.20 vs analyst estimates of $0.20 (in line)
- Adjusted EBITDA: $57.17 million vs analyst estimates of $53.1 million (31.9% margin, 7.7% beat)
- Operating Margin: 14%, up from 9.3% in the same quarter last year
- Market Capitalization: $2.44 billion
StockStory’s Take
Magnite’s third quarter saw revenue growth that outpaced Wall Street’s expectations, but the market responded negatively to the results. Management attributed the quarter’s performance to continued strength in Connected TV (CTV), specifically citing growth from large publisher partners and the expansion of agency-powered marketplaces. CEO Michael Barrett pointed to “significant traction with agency marketplaces, ClearLine adoption, positive SMB trends and programmatic expansion in live sports” as key drivers. Despite these positives, management acknowledged that sector headwinds and recent changes by major demand-side platforms influenced the overall outcome.
Looking forward, Magnite’s outlook is shaped by ongoing investment in CTV capabilities, expanding AI-driven tools, and navigating evolving macroeconomic trends. Management is focused on increasing operational efficiency through hybrid infrastructure and capitalizing on agency and SMB adoption of programmatic advertising. CFO David Day noted, “We have so much potential and opportunity on the CTV front that we felt like it was important to accelerate some of our investment activities.” The company also recognizes that outcomes from regulatory actions and industry consolidation could create additional upside or headwinds in upcoming quarters.
Key Insights from Management’s Remarks
Management attributed revenue growth to CTV momentum, new agency relationships, and the ramp-up of key technology partners, while noting sector pressures and evolving industry dynamics.
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CTV publisher partnerships: Magnite reported notable growth from major streaming companies such as Netflix, Roku, and Warner Bros. Discovery, emphasizing the expansion of programmatic advertising into live sports and international markets.
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Agency marketplace traction: The company highlighted increasing adoption of its private label marketplaces by leading ad agencies, which enables agencies to curate inventory, leverage proprietary data, and maximize media spend across publisher partners.
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ClearLine platform enhancements: Magnite rolled out new features for its ClearLine platform, including AI assistance and integration with technology from its acquisition of streamer.ai. This enables buyers and curators to access differentiated supply and utilize first-party data for more effective campaigns.
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SMB and Commerce Media expansion: Management sees significant opportunity in bringing small and medium-sized businesses into CTV advertising through partnerships and tools like Streamer. Recent wins with clients such as ITV and Wolt illustrate increasing demand from commerce and SMB sectors.
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Industry dynamics and regulatory activity: The management team addressed the ongoing impact of major demand-side platform changes—such as The Trade Desk’s OpenPath shift—and potential benefits from regulatory actions involving Google’s ad tech practices. The company filed its own lawsuit against Google, aiming to address anti-competitive behavior and open new growth avenues.
Drivers of Future Performance
Magnite’s forward-looking strategy centers on deepening CTV integration, leveraging AI tools, and adapting to industry shifts, while also monitoring regulatory and macroeconomic developments.
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AI-driven technology adoption: The integration of agentic technologies and machine learning is expected to automate campaign setup, surface insights, and improve monetization. Management believes these advancements will help partners create higher-quality creative assets, boost operational efficiency, and maintain competitive positioning.
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Hybrid infrastructure investment: The company is increasing investments in data center infrastructure to optimize the balance between cloud and on-premise processing. CFO David Day explained this will “lead to additional efficiencies and plan to reinvest some of the savings in critical growth areas,” especially within the CTV segment.
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Regulatory and demand-side shifts: The outcome of Google’s ad tech trial and the industry’s response to supply path optimization (SPO) changes could materially impact Magnite’s market share and profitability. Management is not modeling these effects into current guidance but sees them as potential sources of upside, particularly if behavioral remedies are enacted swiftly.
Catalysts in Upcoming Quarters
Looking ahead, our team will be monitoring (1) the continued ramp of CTV partnerships and the adoption of ClearLine enhancements, (2) the company’s ability to drive operational efficiency through hybrid infrastructure investments, and (3) any regulatory or competitive developments related to Google and major DSPs that could shift market share. Progress in SMB and agency marketplace adoption will also be important indicators of growth trajectory.
Magnite currently trades at $16.25, down from $17.17 just before the earnings. Is the company at an inflection point that warrants a buy or sell? See for yourself in our full research report (it’s free for active Edge members).
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