What happened

Shares of supply-side advertising technology platform Magnite (MGNI -2.08%) went up 22.4% in August, according to data provided by S&P Global Market Intelligence. The company is the combination of former Telaria and The Rubicon Project, and it reported its first combined quarterly results on Aug. 10.

Investors liked the developing trends in Magnite's business and sent the stock flying after the quarterly report. After the initial post-earnings pop, the stock essentially traded sideways for the remainder of the month.

MGNI Chart

MGNI data by YCharts

So what

Magnite is an omni-channel ad platform, meaning it's part of the ad-display process across various forms of media. The company reported a drop in overall revenue in the second quarter of 2020 when compared to what Telaria and The Rubicon Project did individually last year. This reflects a coronavirus reality: Advertisers reduced spending in the first half of the year.

While Magnite is omnichannel, connected TV (CTV) is the one channel investors are particularly interested in. On a pro forma basis (comparing Magnite to the combined efforts of the former companies) CTV revenue was up 12% year over year in Q2. That's good, but doesn't account for the stock's gains. It's only modest growth especially considering how much CTV people consumed while sheltering at home.

However, Magnite reported forward trends that finally confirmed what investors have been waiting to see. From the beginning of July up to when it reported Q2 earnings, CTV revenue was up a whopping 50% year over year. Investors had hoped the combined company could better accelerate growth in CTV, and it appears it's finally taking shape. Magnite stock traded higher because of this.

A hand plots an arrow higher on a graph.

Image source: Getty Images.

Now what

With the upcoming U.S. presidential election, there should be a steady stream of advertising dollars rolling in for Magnite to capitalize on. The company recently conducted a survey finding 40% of persuadable voters don't have traditional TV, but 70% do have a form of CTV. This dynamic could provide a nice tailwind for the company for the remainder of 2020.

That's great. But as with all growth stocks like Magnite, success will be measured over years, not months.