Magnite reported their first quarter of 2025 earnings on Wednesday, May 7. While the company delivered solid growth in CTV and beat expectations on multiple fronts, its cautious outlook for the remainder of the year signals that the road ahead may not be smooth. Nonetheless, structural shifts in digital advertising – including growing demand for programmatic CTV and legal pressure on Google – are starting to tilt in Magnite’s favor.
Business Highlights: A Quarter of Momentum in the Right Places
Magnite’s Q1 results were marked by steady topline growth, improving profitability, and strategic product rollouts aimed at deepening its leadership in connected TV. The company generated $155.8 million in revenue, up 4% year over year. Contribution ex-TAC – a key performance measure – grew 12% to $145.8 million, with connected TV (CTV) up 15% and DV+ (mobile and desktop display and video, excluding CTV) up 9%. Adjusted EBITDA rose 47% to $36.8 million, with a margin of 25%. The net loss shrank by 46% to $9.6 million. Non-GAAP EPS jumped 140% to $0.12, significantly above analyst estimates of $0.06.
This was a quarter where execution outperformed expectations, with upside across revenue lines and margins. And yet, the broader tone from management was cautious as it acknowledged the impact of tariff-driven uncertainty and paused its full-year guidance.
Modest Revenue Growth, But Beats Expectations
The 4% year-over-year revenue growth to $155.8 million is modest by most standards, yet notable when compared to a sluggish SSP sector. Rivals like PubMatic delivered flat or negative topline performance, making Magnite one of the few supply-side platforms to post consistent gains. Contribution ex-TAC growth of 12% suggests the company is managing traffic acquisition costs more effectively, indicating healthy underlying business mechanics.
The growth also fits within Magnite’s historical trend of mid-to-high single digit gross revenue gains – a pattern that reflects resilience, though it still lags broader programmatic ad industry growth, which remains in the low double digits. While not breakout, the performance positions Magnite above peers like PubMatic in topline velocity.
Revenue by Product Segment: CTV Keeps Rising as DV+ Holds Steady
Magnite’s product segmentation remains centered on CTV and DV+, with the latter encompassing desktop and mobile (including both display and non-CTV video). In Q1 2025, CTV Contribution ex-TAC reached $63.2 million, up 15% year-over-year and exceeding the high end of guidance. DV+ rose to $82.6 million, a 9% increase that also came in above expectations.
CTV accounted for 43% of contribution ex-TAC in the quarter, with DV+ contributing the remaining 57%. While CTV has grown significantly over the years – from less than 20% of the business in 2020 to over 40% today – its share has plateaued for the past four years. To fully capitalize on the strategic importance of the channel, Magnite will need to reignite growth in CTV’s share of the mix. Within DV+, the overall share has remained stable, but mobile has steadily gained ground at the expense of desktop. (The company provides a more granular breakdown of DV+ into desktop and mobile in its 10-Q filings.)
These gains were powered by partnerships with Netflix, LG, Vizio, and Warner Bros. Discovery, as well as strong demand around live sports and agency marketplaces.
Revenue by Geography: U.S. Heavy, with Room to Grow Abroad
Magnite breaks out revenue into U.S. and international segments. In Q1, about 73% of revenue came from the U.S., with the remaining 27% from international markets. This split has held steady for several quarters.
The U.S.-heavy footprint provides a stable core, but also limits exposure to faster-growing international markets. PubMatic, with a more globally diversified customer base, enjoys insulation from regional disruptions and has more room to tap into emerging markets. For Magnite, expanding its non-U.S. revenue share could become a strategic priority, particularly as CTV adoption accelerates globally.
Operating Income: Narrowing Losses, Expanding Margins
Operationally, Magnite is turning a corner. The company reported a net loss of $9.6 million, an improvement from a $17.8 million loss a year ago. More importantly, Adjusted EBITDA reached $36.8 million with a 25% margin, up from 19% in Q1 2024.
This margin expansion is tied to improved cost controls, notably a decline in cloud computing costs and headcount-related expenses. Magnite’s hybrid infrastructure strategy – shifting workloads from cloud to on-premise data centers – is beginning to show cost efficiencies. The company expects these efforts to drive further margin expansion in 2026 and beyond.
Performance vs. Guidance and Analyst Expectations: A Beat Across the Board
Magnite outperformed both its own guidance and Wall Street expectations across most key metrics. Revenue very slightly missed the $157 million consensus forecast at $156 million, but Contribution ex-TAC and profitability metrics exceeded the high end of internal projections. Adjusted EBITDA of $36.8 million beat the analyst consensus by more than 20%, and Non-GAAP EPS of $0.12 doubled expectations.
This overperformance reinforces management’s message of execution strength, even as it tempered forward-looking expectations. Despite a strong start to Q2, Magnite chose lower full-year guidance, citing macro volatility from tariffs and risk-averse spending in verticals like auto, travel, and retail.
Stock Price Reaction: A Warm Reception By Wall Street
Investors cheered the results. Magnite’s stock jumped by 19% on Thursday, the day after earnings were released, and by the following Monday had grown by 28% over the pre-earnings price, reflecting optimism around execution and the CTV narrative.
Cash Reserves: Dry Powder for the Right Opportunities
Magnite closed Q1 with $430 million in cash, down from $483 million at year-end, mostly due to share repurchases. Capital expenditures came in at $19 million, with operating cash flow of $18.2 million.
Management has signaled its intent to pay off debt in the amount of $205 million in convertible notes due March 2026 with cash. The remaining liquidity provides enough room to invest in AI tools, SpringServe innovation, and potentially smaller acquisitions.
Looking Ahead: Product Innovation and Competitive Shifts
Magnite’s roadmap includes the upcoming general availability of the next-generation SpringServe platform, a combined ad server and SSP tailored for CTV, which may succeed in growing CTV’s share of Magnite’s product portfolio again. The unified platform promises to reduce complexity, improve transparency, and increase publisher yields.
Live sports also remain a strategic priority, with investments in pacing and predictive ad delivery. Agency marketplaces powered by ClearLine are gaining traction, with buyers like WPP Media (the formerly called GroupM), Horizon, and Dentsu building their own direct-buy frameworks atop Magnite’s stack. This is in line with PubMatic’s success in going direct to buyers.
A major wildcard is the DOJ’s antitrust case against Google. With Google found liable and remedies expected to begin as early as 2026, Magnite sees a potential windfall. Management estimates that every 1% of market share shifted from Google to Magnite could add $50 million in Contribution ex-TAC. The company’s positioning as a leading independent SSP gives it a prime seat to capitalize on any industry-wide rebalancing.
On the flip side, macroeconomic risks remain. The tariff drag on key advertiser categories, coupled with a lack of international diversification, means Magnite must navigate carefully. While its infrastructure is becoming more efficient, DV+ remains exposed to display market volatility, and profitability remains shy of fully GAAP-positive territory.
Conclusion: Betting on the Tailwinds, Not the Turbulence
Magnite delivered a quarter of solid execution, disciplined spending, and strategic product momentum. While its near-term outlook is conservative, its long-term opportunity is brightening. CTV continues to gain share, live sports are becoming a programmatic catalyst, and regulatory tailwinds could unlock significant upside. With a strong cash position and a roadmap full of innovation, Magnite is well-positioned to ride the structural shifts in digital advertising – provided it can weather the macro storms along the way.
About Magnite
Magnite is a leading independent sell-side advertising platform, helping publishers monetize content across every screen and format. Learn more at https://www.magnite.com.
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