Magnite (MGNI) investor relations material

Growth and market performance

• CTV advertising revenue grew 36% year-on-year in Q3, outpacing the industry’s mid-to-high teens growth rate, with top 10 advertisers growing 40% year-on-year.

• Long-term annualized growth target is set at 25% CAGR, with expectations to consistently outpace industry averages.

• Political advertising is expected to provide a boost, but growth targets are set as a CAGR, not a floor.

• Upselling to global clients and expanding into new markets are key drivers of growth.

• Market penetration is ongoing, with newer publishers starting at lower take rates that are expected to improve over time.

Programmatic and product mix evolution

• Shift towards biddable programmatic is accelerating, with invite-only auctions becoming the norm for premium streaming inventory.

• Open auction programmatic is not seen as the ultimate goal for premium inventory, but broader adoption is expected for device manufacturers and mid-tier inventory.

• Product mix changes, such as publisher-sold programmatic, initially carry lower take rates but transition to higher-value services as comfort with programmatic grows.

Margin profile and operational efficiency

• Margin profile has improved, with adjusted EBITDA exceeding 40% in strong quarters and no cap on future margin expansion.

• Cost structure remains stable due to judicious hiring and cloud-to-on-premise migration, enabling higher revenue without proportional cost increases.

• Investments in infrastructure are primarily for streaming, but also position the company to absorb increased bidding volume from potential market share gains.