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MAGNITE, INC. (MGNI)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 was solid: revenue $155.8M (+4% y/y), Contribution ex-TAC $145.8M (+12% y/y), and Adjusted EBITDA $36.8M (+47% y/y) with a 25% margin; non‑GAAP EPS $0.12 vs $0.05 last year .
  • Both CTV and DV+ topped guidance: CTV Contribution ex‑TAC $63.2M (+15% y/y) vs $61–$63M guided; DV+ $82.6M (+9% y/y) vs $79–$81M guided .
  • Against S&P Global consensus, MGNI beat: revenue $155.8M vs $142.5M* and EPS $0.12 vs $0.055*, driven by stronger programmatic CTV and a DV+ rebound; Adjusted EBITDA significantly outperformed internal expectations (25% margin) .
    Values retrieved from S&P Global.
  • Q2 outlook: Contribution ex‑TAC $154–$160M, CTV $70–$72M, DV+ $84–$88M, and Adjusted EBITDA OpEx $110–$112M (implying ~29% margin at midpoint), but full‑year 2025 expectations were not reaffirmed due to tariff‑driven economic uncertainty .
  • Call catalysts: Netflix’s global programmatic rollout and live sports momentum in CTV, plus potential share gains in DV+ from the Google antitrust remedies; mgmt emphasized cost efficiency via hybrid infra and lower cloud unit costs .

What Went Well and What Went Wrong

What Went Well

  • CTV and DV+ both exceeded top‑line guidance; CTV Contribution ex‑TAC grew 15% y/y to $63.2M and DV+ grew 9% y/y to $82.6M; Adjusted EBITDA rose 47% y/y to $36.8M (25% margin) .
  • CTV momentum from large streamers (Roku, LG, WBD, Fox, Vizio, Walmart, Netflix) and agency marketplaces; SpringServe next‑gen integration slated for July improves path‑to‑inventory and yield .
    “We beat the high end of our CTV and DV+ top line guidance... Adjusted EBITDA... significantly above expectations… Netflix continues to roll out their programmatic business globally” .
  • Efficiency tailwinds: lower cloud unit costs and hybrid infra transition reduced OpEx vs plan; Q1 Adjusted EBITDA OpEx $109M, with Q2 OpEx guided $110–$112M .

What Went Wrong

  • Sequential normalization from Q4 seasonality: revenue fell to $155.8M from $194.0M and Adjusted EBITDA margin to 25% from 42% in Q4 2024 .
  • GAAP remained a loss: net loss improved to $(9.6)M from $(17.8)M y/y, but FX losses ($2.2M) and interest expense ($5.2M) weighed; loss on extinguishment of debt $2.2M .
  • Macro caution: due to tariff‑driven uncertainty and sector risks (auto, retail, travel), mgmt widened Q2 ranges and did not reaffirm full‑year expectations despite quarter‑to‑date trends being in line .

Financial Results

P&L Summary (GAAP and Non‑GAAP)

MetricQ1 2024Q4 2024Q1 2025
Revenue ($M)$149.3 $194.0 $155.8
Contribution ex‑TAC ($M)$130.6 $180.2 $145.8
Adjusted EBITDA ($M)$25.0 $76.5 $36.8
Adjusted EBITDA Margin (%)19% 42% 25%
GAAP Net Income (Loss) ($M)$(17.8) $36.4 $(9.6)
Non‑GAAP EPS ($)$0.05 $0.34 $0.12

Results vs S&P Global Consensus (Q1 2025)

MetricConsensusActual
Revenue ($M)$142.5*$155.8
Primary EPS ($)$0.055*$0.12
Values retrieved from S&P Global.

Contribution ex‑TAC by Channel

ChannelQ1 2024 ($M, %)Q4 2024 ($M, %)Q1 2025 ($M, %)
CTV$54.9, 42% $77.9, 43%$63.2, 43%
Mobile$53.3, 41% $71.7, 40%$58.0, 40%
Desktop$22.4, 17% $30.6, 17%$24.6, 17%
Total$130.6, 100% $180.2, 100%$145.8, 100%

Additional KPIs and Cash

KPIQ1 2024Q4 2024Q1 2025
Operating cash flow (Adj. EBITDA – Capex) ($M)—$64.4 $18.2
Cash & Equivalents ($M)—$483.2 $429.7
Adjusted EBITDA OpEx ($M)——$109 (reported)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Contribution ex‑TAC (Total)Q2 2025—$154–$160M New
Contribution ex‑TAC (CTV)Q2 2025—$70–$72M New
Contribution ex‑TAC (DV+)Q2 2025—$84–$88M New
Adjusted EBITDA OpExQ2 2025—$110–$112M New
Adj. EBITDA Margin (implied)Q2 2025—~29% at midpoint New
Contribution ex‑TAC growthFY 2025>10% total; mid‑teens excl. political Not reaffirmed Withdrawn/Not reaffirmed
Adj. EBITDA margin expansionFY 2025≥100 bps expansion vs 2024 Not reaffirmed Withdrawn/Not reaffirmed
Adj. EBITDA growthFY 2025Mid‑teens Not reaffirmed Withdrawn/Not reaffirmed
Free Cash Flow growthFY 2025High‑teens to 20% Not reaffirmed Withdrawn/Not reaffirmed

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3’24, Q4’24)Current Period (Q1’25)Trend
AI/technologyAnnounced AI features in Curator; cost reductions via ML; planned client‑facing GenAI tools GenAI curation discovery live; LLMs to increase supply addressability; efficiency gains continue Improving
Live sportsStrong Q4 sports; expanding partners (FIFA, Sky NZ) ~20 partners using live stream acceleration; NCAA drove Q1; expanding to FIFA+, Champions League, Liga MX Accelerating
Agency marketplaces/ClearLineClearLine growth; GroupM/Horizon agency marketplaces Continued strong focus (GroupM, Horizon, Dentsu); structural advantage via unified SpringServe+SSP Improving
CTV pricing/supplyCTV growth strong; mix stabilizing CPMs recalibrated lower on supply surge; take‑rate resilient when MGNI brings demand Mixed (more supply, stable economics)
Macro/tariffsDV+ Q4 post‑election pause; Q1 rebound Q2‑to‑date in line; cautious on tariffs (auto/retail/travel); widened guide; not reaffirming FY Cautious
Regulatory/legal (Google)—Court’s antitrust ruling vs Google seen as potential share gain for MGNI; remedies phase Sept 22 Positive optionality
Hybrid infra/cost efficiencyLower unit cloud costs; hybrid on‑prem shift with ROI Continued cloud cost reductions; Q1/Q2 capex supports hybrid; margin expansion expected 2026+ Improving
Identity/cookies—Cookie status change doesn’t alter need for cookieless; CTV authenticated users aid SSP‑side audiences Neutral/steady

Management Commentary

  • “We beat the high end of our CTV and DV+ top line guidance... Adjusted EBITDA came in significantly above expectations... Netflix continues to roll out their programmatic business globally” — Michael Barrett, CEO .
  • “So far in Q2, CTV Contribution ex‑TAC has grown in the mid‑teens and DV+ in the mid‑single digits... given tariff‑related economic uncertainty… widened our Q2 ranges and are not reaffirming FY 2025” — David Day, CFO .
  • “Every 100 bps increase in market share for us would result in roughly $50M in Contribution ex‑TAC… more than 90% would flow through to the bottom line” — David Day on Google case implications .
  • “By collapsing the ad server and SSP into one platform, we remove an entire step in the process… creating the fastest, cleanest, highest‑fidelity path to premium CTV inventory” — Michael Barrett on SpringServe .

Q&A Highlights

  • Google antitrust remedies: MGNI expects potential DV+ share gains beginning as early as 2026 with high EBITDA flow‑through (>90%) given higher fill on existing ad requests .
  • CTV pricing/mix: CPM pressure from supply growth (OEMs, new ad tiers) but not pressuring take‑rates when MGNI sources demand; live sports expected to remain resilient .
  • Curation/SSP‑side data: Growing SSP‑side audience curation for privacy/efficiency; GenAI tools improving audience discovery; potential to capture economics traditionally at DSP layer .
  • Macro tone: Quarter‑to‑date healthy; cautious stance due to tariff uncertainty with pockets like European autos; no broad pullbacks reported in buyer meetings .
  • Netflix trajectory: Reiterated expectation Netflix will be “one of, if not” the largest CTV client by year‑end 2025 run‑rate .

Estimates Context

  • Q1 2025: Revenue $155.8M vs $142.5M* consensus; Primary EPS $0.12 vs $0.055* consensus — both beats, driven by CTV strength and DV+ rebound .
  • Street (as of S&P Global): FY 2025 revenue $680.2M*; FY 2025 Primary EPS $0.885*; given management’s non‑reaffirmation of full‑year guidance, estimate dispersion may widen.
    Values retrieved from S&P Global.

Key Takeaways for Investors

  • CTV engine remains healthy: +15% y/y Contribution ex‑TAC with broad streamer momentum and live sports tailwinds; unified SpringServe+SSP should enhance take‑rates and share of wallet .
  • Operating leverage improving: 25% Adjusted EBITDA margin with continued unit cloud cost reductions and hybrid infra transition; Q2 guide implies ~29% margin at midpoint .
  • DV+ optionality: Short‑term rebound (+9% y/y) and medium‑term potential share gains from Google remedies could be high‑flow‑through to EBITDA and FCF .
  • Risk management prudent: Q2 ranges widened and FY25 not reaffirmed due to tariff uncertainty; monitor autos/retail/travel exposure and Q2 exit run‑rate .
  • Cash and liquidity solid: $430M cash at Q1 end; converts ($205M) targeted to be repaid with cash at March 2026 maturity; continued anti‑dilution actions .
  • Near‑term catalysts: Netflix global programmatic ramp, live sports events, agency marketplaces/ClearLine adoption, and regulatory developments in Google case .