Magnite's Q3 2025: Contradictions on Trade Desk's Impact, CTV Growth, and Google Case Outcomes

Business Commentary:

* CTV Ad Revenue Growth:

- Magnite reported CTV contribution ex TAC grew 18% and 25% excluding political, exceeding expectations.
- The growth was driven by increased collaboration with major publishers, agency marketplaces, Clear Line adoption, and programmatic expansion in live sports.

• Adjusted EBITDA and Margin Expansion:
• Adjusted EBITDA was $57 million, reflecting a margin of 34%, beating expectations and showing 13% year-over-year growth.

• Margin expansion was supported by strong CTV performance and operational efficiencies.

• Live Sports and Programmatic Adoption:

• Live sports contributed significantly to Magnite's growth, with new contributions from Disney and other major sports leagues.

• The development of the Live Stream Accelerator product and partnerships with leading sports properties positioned Magnite for further growth in this segment.

• Impact of Trade Desk Changes:

• Magnite experienced a temporary impact due to The Trade Desk's OpenPath prioritization, affecting DV+ growth.
• However, the company worked with its largest buyers to reconnect, mitigating negative financial impacts and demonstrating Magnite's strategic importance in the ecosystem.
  

Contradiction Point 1

Impact of The Trade Desk's Changes

It involves differing perspectives on the impact of The Trade Desk's changes to its operating system, which could influence Magnite's strategic positioning and market share.

Can you explain the impact of The Trade Desk's OS changes prioritizing OpenPath and how Magnite's value proposition is affected? - Cheyenne Patel(Susquehanna)

2025Q3: Magnite worked with major buyers to reconnect after The Trade Desk's change, limiting impact to DV+. Magnite's importance is seen in its role in building buyer marketplaces and providing key supply and services. - Michael Barrett(CEO)

Can Google's behavioral changes increase Magnite's market share? - Robert Coolbrith (Evercore ISI)

2025Q1: The Trade Desk's OpenPath initiative could lead to a short-term shift of spend but should be additive to the ecosystem over time. - Michael Barrett(CEO)

Contradiction Point 2

Connected TV (CTV) Growth Projections

It involves differing expectations and explanations regarding the growth projections for the Connected TV (CTV) business, which is a key revenue driver for the company.

What caused the slowdown in CTV growth projections for 2026, and what are the prospects of behavioral remedies in the Google case? - Bart Crockett (Rosenblatt)

2025Q3: The slowdown is partly due to conservatism and DV+ performance, expected to revert to mid-single-digit growth. - David Day(CFO)

How is the CTV ex-TAC business growing and how are data initiatives contributing? - Dan Kurnos (The Benchmark Company)

2024Q4: We expect to outpace the market, with a full-year growth rate in CTV around mid-teens. - Michael Barrett(CEO)

Contradiction Point 3

Impact of Trade Desk's Operating System Changes

It involves the interpretation and impact of The Trade Desk's changes to their operating system, which could potentially affect Magnite's market position and revenue.

Can you explain how The Trade Desk's OS changes prioritizing OpenPath affect Magnite's value in the ecosystem? - Cheyenne Patel (Susquehanna)

2025Q3: Magnite worked with major buyers to reconnect after The Trade Desk's change, limiting impact to DV+. - Michael Barrett(CEO)

How should we assess the economic impact of OpenPath versus Magnite for publishers? - Shweta Khajuria (Wolfe Research)

2024Q4: The economics for publishers are unchanged as they still pay fees to Trade Desk, similar to Magnite's fees. - Michael Barrett(CEO)

Contradiction Point 4

Google Ad Tech Case and Market Share Opportunities

It reveals differing expectations regarding the potential impact of the Google Ad Tech case on Magnite's market share and competitive position.

What is your position on the Google Ad Tech case and what is included in your 2026 guidance? - Shweta Khare(Evercore ISI)

2025Q3: We remain optimistic about Google case remedies, whether structural or behavioral. 2026 guidance excludes potential Google market share gains, focusing on current opportunities, macroeconomic factors, and AI initiatives. - Michael Barrett(CEO)

Could the Google antitrust case create an opportunity for Magnite, and if so, would it stem from structural changes or earlier behavioral adjustments? - Jason Kreyer(Craig-Hallam)

2025Q1: We like our competitive positioning. More importantly, we like the leverage that we have because of Google in particular potentially being more challenged. - Michael Barrett(CEO)