Magnite, a leading independent supply-side ad platform (SSP), reported a revenue ex-TAC (excluding acquisition costs) of USD 134.7 million (9% YoY growth) for Q2 2023, which was in line with company guidance and above analyst estimates. Growth in demand for connected TV (CTV) continued to support topline performance, which grew by 8% YoY in Q2 2023 and accounted for ~42% of ex-TAC revenue (Q1 2023: 40%, Q4 2022: 41%; Q3 2022: ~44%; Q2 2022: 42%).

The firm recorded an adjusted EBITDA of USD 37.3 million (~10% YoY decline) during Q2 2023, which represents an adjusted EBITDA margin of 28%. The decline in EBITDA was due to a USD 4.5 million bad debt expense that was recognized as a result of the MediaMath bankruptcy. The firm recorded a net loss of USD 73.9 million in Q2 2023 (compared to a net loss of USD 25 million in Q2 2022) which corresponds to an adjusted net profit of USD 0.09 per share, surpassing the analyst expectation of USD 0.03 per share.

For the third quarter of 2023 (Q3 2023E), the firm expects to achieve a revenue ex-TAC between USD 128 million and USD 132 million, and for CTV revenue to be between USD 50 million and USD 52 million. For FY2023E, the company expects revenue ex-TAC to be in the mid-to-high single digits. 

Analyst QuickTake: Magnite reported strong Q2 2023 growth in both contributions ex-TAC attributable to CTV (8% YoY growth) and DV+ (10% YoY growth), driven by its expansion in CTV and DV+ market share. Proactively innovating to position itself as a vital ally for programmatic CTV advertisers, Magnite's collaborations like FreeWheel amplify its impact, while robust financial gains validate the effectiveness of its strategy.