Magnite Reports Q4 2024: Mixed Results with Strong CTV Growth

Magnite's Q4 2024 earnings call reveals mixed results, highlighting record contribution and free cash flow, but disappointing DV+ performance. Despite challenges, confidence remains high for growth in 2025.

Date: 27-02-2025

AI Rating: 6

Earnings Highlights
Magnite reported a record contribution, excluding Traffic Acquisition Costs (TAC), of $607 million and free cash flow of $118 million in Q4 2024. This was attributed to the company’s strong performance in the Connected TV (CTV) segment, which experienced a 23% year-over-year increase in contribution, ex-TAC.

Free Cash Flow and Net Income
For the quarter, Magnite achieved a net income of $36 million, compared to $31 million in the same period last year. The strong cash flow position and a significant increase in cash balance also indicate good financial health.

Revenue Growth Metrics
The CTV segment showed a robust growth trend which is encouraging for the future. However, the Digital Video Plus (DV+) segment encountered a post-election slowdown with only 1% contribution growth in Q4. The expectation of growth resetting to mid to high single digits in Q1 2025 suggests a potential rebound, which could positively affect overall revenue growth.

Future Outlook
Magnite's CTV contribution is projected to continue strong growth, which is crucial as it comprises a significant part of their business strategy moving forward. The anticipated adoption of generative AI tools is also expected to enhance productivity and revenue generation from existing clients, further benefitting the bottom line.

In summary, while the company faced challenges in its DV+ business, the momentum in its CTV operations and strong cash metrics point toward a stable outlook.

Stocks: MGNI