Magnite (NASDAQ:MGNI) is seeing accelerating growth in connected television advertising as demand broadens beyond large brands and agencies, according to Nick Kormeluk, the company’s senior vice president of investor relations, speaking at a KeyBanc event.
Kormeluk said the company’s CTV business had moved from better-than-mid-teens growth to growth rates in the 20% range during the second half of the prior year. He said CTV growth reached 36% in the company’s latest quarter and characterized the performance as broad-based across partners and demand channels.
CTV market structure supports supply-side platforms
Kormeluk said CTV’s concentrated publisher landscape differs materially from the broader open internet. While Magnite has no publisher representing even 1% of its revenue in its non-CTV DV+ business, he said 30 global publishers account for 80% of worldwide CTV inventory.
That concentration, along with publishers’ concerns about protecting their data and audience identifiers, has increased the value of trusted independent supply-side partners, he said. Kormeluk added that programmatic selling can help broadcasters improve profitability because it can provide a lower-cost route to market than a traditional sales force.
He said Magnite’s ability to serve multiple forms of advertising demand—including DSPs, agencies and self-service buyers—has helped the company participate across the CTV market.
However, Kormeluk said the company remains in the early stages of capturing potential growth from live sports and SMB advertising. He noted that live sports is generally viewed as accounting for about 40% of television ad spending, but said a more substantial shift to CTV would produce growth far above the company’s current mid-30% rate.
Magnite only began participating in NFL advertising last year after ESPN used Disney’s technology stack to make inventory available programmatically, he said. The company sees further opportunity in NFL, NCAA football and March Madness advertising, among other sports programming.
Commerce media and web traffic pressures
Kormeluk described commerce media as a potential growth area for Magnite’s DV+ business. He said the company can help commerce-data owners use their own data to improve monetization of owned advertising inventory, as well as create revenue opportunities by applying that data to third-party web, app and CTV inventory.
Examples cited included data from Walmart, Pinterest and United Airlines. Kormeluk said Magnite’s commerce-media relationships are often exclusive, contrasting with the more fragmented market structure for conventional open-web supply-side platforms.
“In commerce media, just about all of our announcements are exclusive,” he said, adding that exclusivity gives buyers a greater incentive to engage with the platform when it is the only way to access a particular inventory source or dataset.
At the same time, Kormeluk acknowledged pressure on web publishers from Google AI Overviews and lower web referrals relative to crawling activity. He said some publishers are responding by prioritizing mobile apps, logged-in users, premium offerings and data-driven targeting. Magnite’s web business has declined in the high single digits, he said.
He also discussed the potential implications of remedies in the U.S. Department of Justice’s ad-tech case against Google. Kormeluk said behavioral remedies would be more meaningful to Magnite than structural remedies because they could more quickly alter market-share dynamics. He pointed specifically to the possibility of separating advantages between Google’s ad server and exchange, including how impression-level data and pricing information are shared.
AI tools and financial outlook
Magnite has been testing agentic AI capabilities intended to streamline advertising workflows, Kormeluk said. The company has introduced mediation agents for publisher yield management, seller agents to help define audiences, buyer agents and an orchestration layer designed to connect buyer and seller agents.
He said the tools are intended to shorten a process that can currently take agencies six to eight weeks—from campaign planning and creative versions through testing and analysis—to about 10 minutes. The company is initially targeting insertion orders that agencies still manage manually.
Kormeluk cautioned that the technology is not yet expected to be a major near-term revenue contributor, though he said adoption has been among the fastest Magnite has seen for a new product.
- Magnite raised its growth outlook to 13% to 14%, according to Kormeluk.
- He said the outlook implies EBITDA growth of about 20% and free-cash-flow growth of more than 40% this year.
- The company raised its adjusted EBITDA margin target to more than 37%, from a prior range around 35% to 35.5%.
Kormeluk said Magnite’s operating model becomes margin-neutral at roughly 7% revenue growth and generates approximately 80% EBITDA flow-through from incremental revenue above 10% growth. In the latest quarter, he said a $10 million ex-TAC top-line beat translated into an $8 million adjusted EBITDA beat.
Looking ahead, Kormeluk said CTV programmatic advertising is “coming into its own,” while DV+ should retain growth opportunities in mobile apps and commerce media even if it expands more slowly than CTV.
About Magnite (NASDAQ:MGNI)
Magnite, Inc (NASDAQ: MGNI) operates as an independent sell-side advertising platform that enables publishers and digital media owners to monetize their inventory through programmatic advertising. Formed in 2020 through the merger of Rubicon Project and Telaria, Magnite combines technologies for desktop, mobile, connected television (CTV) and digital out-of-home (DOOH) ad exchanges. The company provides an end-to-end solution designed to help media owners optimize yield across open marketplaces, private marketplaces and programmatic guaranteed deals.
At the core of Magnite’s offering is its supply-side platform (SSP), which connects publishers’ ad impressions to demand-side platforms (DSPs) through real-time bidding (RTB).
