• Magnite, a leading independent supply-side ad platform (SSP), reported its Q4 2021 and full-year (FY2021) results. The firm achieved a revenue ex-TAC (net of ad acquisition costs) of USD 142.1 million (76% YoY growth) for Q4, exceeding analyst expectations by 15.2%. The growth was driven by demand for connected TV (CTV) advertising, which witnessed a 252% YoY growth, contributing USD 54 million to its topline performance. CTV accounted for 38% of total revenue ex-TAC in Q4 2021 (compared with 19% in Q4 2020), overtaking mobile to become the most popular advertising channel. 

• For FY2021, revenue ex-TAC was USD 416.5 million (90% YoY growth), which was supported by its acquisitions in the CTV space of SpotX (a video advertising platform) and Spring Serve (video ad serving tool), propelling Magnite to become the market leader for CTV advertising.

• During the quarter, the firm recorded an adjusted EBITDA of USD 67.5 million (125% YoY Growth), while its adjusted EBITDA margin improved to 48% (compared with 37% in Q4 2020). For FY 2021, adjusted EBITDA amounted to USD 148.7 million (245% YoY growth). However, the non-GAAP earnings per share (EPS) of USD 0.26 recorded for the quarter was 16.1% below analyst expectations. 

• For the full year of 2022, the firm expects to achieve revenue ex-TAC above USD 500 million (~20%+ YoY growth) with a long-term growth rate of 25%+. Separately, the long-term adjusted EBITDA margin is expected to be between 35%–40%. This reflects a 500–1,000 basis points (BPS) upward revision from the previously announced target. 

• The company also announced the launch of “Live Stream Acceleration” today, which is a new feature for its SSP platform that allows CTV publishers to optimize programmatic ads in real-time. The management claims the new feature would enable it to capitalize on the growth in popularity of live stream programming. 

Analyst QuickTake: Even after adjusting for the acquisitions, the firm’s FY2021 pro forma revenue ex-TAC grew by 50% YoY, while achieving its target of growing its CTV share of revenue to more than 30% is a reflection of the strong preference for CTV, which is fast becoming the preferred advertising channel.