Magnite (MGNI -3.25%), an independent programmatic advertising platform specializing in digital video and Connected TV (CTV), published its Q2 2025 earnings on August 6, 2025. The company reported GAAP revenue of $173.3 million, surpassing analyst expectations of $157.6 million in GAAP revenue by $15.7 million, equating to a 10.0% beat in GAAP revenue. Non-GAAP earnings per share reached $0.20, outpacing the $0.17 non-GAAP consensus and the prior year’s non-GAAP $0.14 for Q2 2024. The period delivered significant outperformance across revenue, adjusted EBITDA (non-GAAP), and profitability metrics. Management raised its margin expansion targets and reinstated full-year contribution ex-TAC guidance, citing robust year-over-year growth in CTV and DV+ product lines.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (Non-GAAP) | $0.20 | $0.17 | $0.14 | 43% |
| Revenue | $173.3 million | $157.6 million | $162.9 million | 6% |
| Contribution ex-TAC | $162.0 million | $146.8 million | 10% | |
| Adjusted EBITDA | $54.4 million | $44.7 million | 22% | |
| Adjusted EBITDA Margin | 34% | 30% | 4 ppt |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.
Company Overview and Strategic Focus
Magnite offers a programmatic advertising platform, enabling digital ad sales for publishers with a particular strength in Connected TV (CTV) and digital video. It connects advertisers and agencies with digital publishers, delivering tailored ads on streaming TV, desktop, and mobile. Its core business model centers on maximizing the value of publishers' ad inventory while simplifying ad buying for agencies and brands.
The company’s main strategic priorities include growing CTV through its Magnite Streaming platform, driving efficiency via supply path optimization (streamlining the path from advertiser to publisher), and building first-party identity solutions in response to industry changes around digital privacy. Additionally, operational efficiency and cost control are recurring themes, as is international expansion to diversify growth. Performance in these focus areas often determines near- and medium-term success for Magnite.
Second Quarter: Segment Results and Notable Developments
Total revenue (GAAP) grew 6% in Q2 2025, coming in $15.7 million above analyst estimates (GAAP revenue) and ahead of the company’s guidance. Contribution ex-TAC, a key non-GAAP metric that excludes traffic acquisition costs, surged 10% year over year and came in ahead of the $154–$160 million non-GAAP range previously communicated by management, and marked a 43% increase on the prior year’s result (non-GAAP).
The CTV product family, comprising Magnite Streaming and SpringServe unified ad server tools, saw segment contribution ex-TAC (non-GAAP) rise 14% to $71.5 million. This accounted for 43% of the company’s total contribution ex-TAC, up from 41% in Q1 2025. Management credited new and expanded partnerships, increasing demand from small and midsize businesses (SMBs), success in live sports streaming, and expanded relationships with platforms such as Netflix for CTV growth. The company stated, "In CTV, our growth was fueled by new and expanded partnerships, entry of SMB advertisers, our critical role in buyer marketplaces and success in live sports." SpringServe, described as a unified ad server and supply-side platform (SSP), continues to function as a core differentiator for bigger CTV clients.
The DV+ segment, which encompasses mobile and desktop display and video ad formats, also outperformed. Contribution ex-TAC (non-GAAP) attributable to DV+ rose 8% to $90.4 million, marking the twentieth consecutive quarter of growth for this business line. Management noted that the segment achieved this result before factoring in any benefit from anticipated regulatory changes in the ad tech landscape, referencing antitrust remedies expected to impact competitive dynamics with Google in future periods.
Operational improvements also stood out this quarter. Adjusted EBITDA margin increased to 34% (non-GAAP), four percentage points higher than a year ago for Adjusted EBITDA margin (non-GAAP). Management pointed to improved utilization of hybrid infrastructure as well as a year-over-year decrease in technology and development costs, which fell from $25.8 million in Q2 2024 to $21.6 million. Operating cash flow (non-GAAP) was $33.9 million. Stock-based compensation remains a large expense at $19.6 million, though the company has an $88 million share repurchase authorization to mitigate dilution. The company did not pay a dividend.
Business Drivers: Product, Market, and Cost Trends
The CTV segment was a central focus this period, with continued progress in both revenue mix and partnerships. CTV’s share of contribution ex-TAC moved higher, and management outlined that the current product mix, with tools like SpringServe at the center, strengthens relationships with both premium streaming giants and SMB advertisers.
Supply path optimization tools, including transparent supply chain products for agencies and advertisers, remain a strategic priority. While the company has deep relationships with streaming platforms like Disney, Roku, and Paramount. The next-generation launch of SpringServe, combining ad serving with integrated programmatic buying, is positioned as a technical and operational advantage over legacy systems.
Magnite also continues to invest in first-party identity and audience solutions, enabling clients to target ads effectively in a post-cookie world, especially in digital video and CTV environments where traditional tracking is unavailable. Management noted increased activity around curated audience segments and non-cookie targeting built directly into its platform.
On cost optimization, Magnite has made substantial improvements. Hybrid infrastructure migration is reducing operating costs. General and administrative expenses remained stable, and sales and marketing expenses increased only marginally despite higher revenue. These shifts contributed to robust margin expansion and improved adjusted EBITDA (non-GAAP) results.
Outlook and What to Watch
Management forecasts contribution ex-TAC (non-GAAP) between $161–$165 million for Q3 2025, while CTV contribution ex-TAC (non-GAAP) should fall in the $71–$73 million range, representing an expected 10–13% segment increase. DV+ Contribution ex-TAC (non-GAAP) is projected to be $90–$92 million, which would continue the segment’s growth streak. Adjusted EBITDA operating expenses are expected to hold close to current levels, between $109–$111 million. The company also reinstated its outlook for full-year 2025, now guiding for total Contribution ex-TAC (non-GAAP) growth above 10% for the year, with “mid-teens” Contribution ex-TAC (non-GAAP) growth targeted when excluding the political ad cycle.
Looking ahead, key points for investors include the pace of market share gains in CTV and DV+, the realized impact from regulatory changes in the ad tech industry, and the effects of macro uncertainty in sensitive verticals like automotive and retail. Cash flow and capital allocation are also worth monitoring as capital expenditures trend higher and as the company continues buying back shares. No specific quarterly free cash flow target was provided for future quarters.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
