Magnite's Q3 2024 Earnings: EPS Surges, CTV Market Share Expands

Magnite (MGNI), the world's largest independent sell-side advertising company, reported its third-quarter 2024 earnings on November 7, 2024, with earnings per share (EPS) beating expectations. The company's strategic focus on Connected TV (CTV) and operational efficiencies drove this impressive performance. This article delves into Magnite's Q3 2024 earnings, highlighting the key drivers behind its EPS growth and market positioning.
Magnite's CTV market share growth has been a significant driver of its revenue and earnings growth. In Q3 2024, the company's contribution ex-TAC from CTV grew by 23% year-over-year to $64.4 million, surpassing its guidance of $62.0 to $64.0 million. This growth was supported by strategic initiatives such as supporting Netflix's initial programmatic CTV ad launch. Magnite's CTV contribution ex-TAC now represents approximately 45% of its total revenue, highlighting the company's successful focus on expanding its CTV market share.
Operational efficiencies and cost management have played a significant role in Magnite's improved financial performance. The company reported a gross profit of $99.5 million, a 53% increase from the previous year, highlighting improved cost management. Additionally, Magnite's adjusted EBITDA margin expanded by 400 basis points to 34%, reflecting enhanced operational efficiency. This improvement in profitability, coupled with a 12% year-over-year growth in contribution ex-TAC, demonstrates Magnite's ability to effectively manage costs while driving revenue growth.
Magnite's partnership with Netflix and other strategic initiatives have significantly contributed to its financial performance. The company supported Netflix's initial programmatic CTV ad launch, which led to a 23% year-over-year growth in Contribution ex-TAC attributable to CTV, reaching $64.4 million. This growth, coupled with a 5% increase in Contribution ex-TAC from DV+, drove an overall 12% year-over-year growth in Contribution ex-TAC to $149.4 million. Additionally, Magnite's adjusted EBITDA margin expanded by 4 percentage points to 34%, reflecting operational efficiencies and effective cost management. These strategic initiatives have helped Magnite achieve an 8% year-over-year revenue growth and a net income of $5.2 million, outperforming analyst expectations.
Magnite's Q3 2024 financial performance compares favorably to its competitors in the online advertising industry. While The Trade Desk (TTD) reported a revenue growth of 7% in Q3 2024, Magnite's 8% growth is more impressive. Furthermore, Magnite's net income improvement from a loss of $17.5 million in Q3 2023 to a profit of $5.2 million in Q3 2024 is more significant than TTD's net income growth of 10%. Magnite's adjusted EBITDA margin expansion of 4 percentage points to 34% also outperforms TTD's 32% margin and Criteo's (CRTO) 25% margin.
In conclusion, Magnite's Q3 2024 earnings demonstrate the company's resilience and growth potential in the online advertising industry. Its strategic focus on CTV, operational efficiencies, and successful partnerships have driven its EPS growth and market positioning. With a strong balance sheet and cash flow generation, Magnite is well-positioned to capitalize on long-term growth trends in the advertising sector. As an undervalued opportunity with strong growth potential and solid fundamentals, Magnite presents an attractive investment prospect for value-oriented investors.