What happened
Shares of Magnite (MGNI -1.74%) jumped today after the ad tech company posted better-than-expected results in its second-quarter earnings report. The stock finished the day up 10.2%.
Image source: Getty Images.
So what
Magnite, which provides a supply-side platform for publishers, posted soaring revenue growth of 170% to $114.5 million, which easily beat estimates of $94.1 million. It benefited from the lockdown quarter a year ago and its acquisition of SpotX, a connected TV (CTV) specialist, back in February.
Revenue excluding traffic acquisition costs and including SpotX's results a year ago was still up 79%, showing the growth in the underlying business. CTV revenue more than doubled to $34.3 million, and revenue from online video was strong as well at 60%.
Magnite has made video its biggest focus following the SpotX acquistion, and the figures above show the company gaining momentum in the high-growth segment.
On the bottom line, adjusted EBITDA flipped from a loss to a profit of $31.8 million, equivalent to a margin of 28%. Adjusted earnings per share came in at $0.11, improving from a loss of $0.10, which missed estimates by a penny.
CEO Michael Barrett said, "We are progressing well with our integration efforts and are positioned to better serve the fast-growing CTV market with combined customer teams, a strong and greatly enhanced development organization."
Now what
Magnite also impressed with its guidance for the third quarter, which includes its recent acquisition of CTV ad server SpringServe. For the current quarter, management expects revenue excluding traffic acquisition costs of $112 million to $116 million, which compares to the analyst consensus for total revenue of $107.1 million. It also sees $41 million to $45 million in CTV revenue, excluding the impact of the SpotX acquisition.
Magnite shares have fallen sharply from earlier this year, but the results above show the growth story remains intact. With strong growth across ad tech and a sharpening focus on CTV, investors might want to take advantage of the sell-off over the last few months.
