Magnite (NASDAQ:MGNI) executives said the company closed 2025 with results that exceeded consensus expectations, led by accelerating growth in connected TV (CTV) and a continued shift of ad budgets toward streaming. On the company’s fourth-quarter 2025 earnings call, CEO Michael Barrett characterized the quarter as a “defining moment,” noting that CTV has become larger than the company’s DV+ business, making streaming the majority of Magnite’s operations.
CTV growth accelerates as streaming becomes the majority
Barrett said the “long-anticipated ramp of programmatic CTV is no longer emerging” and is now “underway at scale,” with adoption expanding across media owners, agencies, and DSPs. Magnite cited strong growth from a range of large industry participants, including LG Ads, Netflix, Paramount, Roku, VIZIO, Walmart, and Warner Bros. Discovery, and highlighted expanding programmatic enablement in live sports across global streamers.
In Q&A, management attributed the CTV outperformance to broad-based momentum rather than a single “unlock,” citing the combined impact of organic growth, greater adoption of programmatic by buyers and sellers, increasing contribution from live events, and a shift in dollars from DV+ into CTV. Barrett also pointed to the role of upfront negotiations, saying streaming played a larger role than anticipated and those dollars tend to flow into the second half of the year and into the first quarter.
DV+ pressured by budget reallocation, though supply and partnerships expand
While CTV accelerated, Magnite’s DV+ performance was softer. Day said DV+ contribution ex-TAC was $101 million in Q4, down 1% year-over-year (but up 4% excluding political), coming in below the company’s guidance range. Barrett said pressure increased into the first quarter as the company observed “accelerated budget reallocation from DV+ into CTV across agencies, DSPs, and brands.”
Even with that pressure, management emphasized areas of resilience and growth within DV+. Barrett said Magnite’s mobile in-app business “remains healthy,” and the company’s commerce media partnerships are “gaining momentum,” with more than 15 partners announced and 11 deployed and ramping, including United Airlines, PayPal, Pinterest, and Best Buy. He also said the company does not believe declining search referral traffic is impacting DV+, citing a diversified footprint across open web, mobile app, online video, audio, and digital out-of-home.
Day added that Magnite’s DV+ supply is expanding, with ad requests up more than 30% year-over-year in Q4 and at similar rates in Q1, stressing the DV+ business “has never been supply constrained.”
From a category perspective, Day said retail, health and fitness, and financial were the strongest verticals in Q4, while automotive remained among the weakest. He also noted additional DV+ weakness in technology and food and beverage, and said trends seen in late November and December largely continued into Q1.
Financial results include higher profitability and a one-time tax benefit
For Q4, Magnite reported total revenue of $205 million, up 6% from Q4 2024. Contribution ex-TAC was $195 million, up 8% (or 16% excluding political). Adjusted EBITDA rose 9% year-over-year to $84 million, and Day said the adjusted EBITDA margin was 43%, calculated as a percentage of contribution ex-TAC.
Net income was $123 million for the quarter, compared with $36 million in the prior-year period. Day attributed the increase primarily to a $90 million one-time tax benefit tied to the release of a valuation allowance on deferred tax assets after Magnite met accounting criteria, including 12 quarters of cumulative positive pre-tax income and expectations for future profitability. GAAP earnings per diluted share were $0.80, while non-GAAP EPS was $0.34, unchanged from the prior year.
Magnite ended Q4 with $553 million in cash, up from $482 million at the end of Q3. Operating cash flow, defined as adjusted EBITDA less CapEx, was $61 million, and capital expenditures were $23 million. Day said net leverage was zero at quarter-end and the company plans to repay its remaining $205 million principal balance of convertible notes at maturity with cash on hand.
Capital returns: new repurchase authorization and plan to increase buybacks
Day said Magnite repurchased or withheld over 5.2 million shares for about $79 million during 2025 and announced a new two-year share repurchase plan authorizing up to $200 million of common stock repurchases. Following the convertible repayment, management said it expects to be more aggressive with buybacks given anticipated “significant and consistent free cash flow generation.” Day said the company’s capital allocation strategy targets returning about 50% of free cash flow to shareholders through repurchases over time, while noting potential M&A could alter that approach.
AI and ad tech remedies: early agent-to-agent campaigns and Google trial watch
Barrett addressed speculation that generative AI could disintermediate infrastructure platforms, arguing instead that it increases the importance of scaled sell-side infrastructure. He said Magnite embedded an Advertising Context Protocol (AdCP) seller agent into SpringServe and executed what the company believes was the industry’s first agent-to-agent campaign, with Scope 3 acting as the buyer agent on behalf of MiQ and ads running across LG and Warner Bros. Discovery inventory. Management said budgets tied to agentic buying are still small, but interest is high and Magnite is continuing tests in Q1.
Barrett also said the company is awaiting the court’s final order in the remedies phase of the Google ad tech case and reiterated that remedies could create share reallocation opportunities. He repeated Magnite’s view that each 1% of market share gained could represent approximately $50 million of incremental contribution ex-TAC annually at very high incremental margins.
Looking ahead, Day guided for Q1 2026 contribution ex-TAC of $157 million to $161 million (8% to 10% growth), including CTV contribution ex-TAC of $81 million to $83 million (28% to 31% growth), which would put CTV above 50% of total contribution ex-TAC for the first time. DV+ contribution ex-TAC was guided to $76 million to $78 million, representing a decline of 6% to 8%. For full-year 2026, Magnite expects at least 11% total contribution ex-TAC growth, mid-teens adjusted EBITDA growth, adjusted EBITDA margin above 35%, free cash flow growth above 30%, and CapEx of about $60 million, with guidance excluding any potential share gains from Google-related remedies.
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).
