Shares of Magnite (MGNI -2.00%), the supply-side adtech company, were moving higher today after it topped estimates on the top and bottom lines in its first-quarter earnings report as it appears to be benefiting from the recovery in the digital advertising market.
As of 10:35 a.m. ET, the stock was up 12.7% on the news.
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Magnite sees accelerating revenue growth
Magnite, which was formed by a series of mergers and acquisitions to create a comprehensive, video-focused adtech platform serving publishers, said revenue in the quarter was up 15% to $149.3 million, which easily beat expectations at $124.2 million.
Contribution ex-TAC (traffic acquisition costs) rose 12% to $130.6 million with strong growth in connected TV (CTV), or ad-based streaming, which was up 18% to $54.9 million.
On the bottom line, adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) increased from $23.3 million to $25 million, and adjusted earnings per share ticked up from $0.04 to $0.05, which was better than expectations of breakeven.
Management said live sports gave its CTV results a boost and added, "A positive ad spend environment to start 2024, plus our share gains, have led to a great start to the year, and we remain optimistic this momentum will continue."
What's next?
Looking ahead, Magnite expected growth in contribution ex-TAC to continue in the second quarter, calling for between $142 million and $146 million, up 24% from the year-ago quarter, showing an acceleration from the first quarter. It also called for growth in the midteens in adjusted EBITDA.
Investors have been patient with Magnite, but the growth story seems to be finally coming together. Keep an eye on CTV growth, as that could hold the most potential for Magnite.
