Magnite (NASDAQ: MGNI) reported a significant acceleration in connected television (CTV) advertising revenue, hitting a 36% growth rate in the most recent quarter. According to Nick Kormeluk, the company’s senior vice president of investor relations, this performance is driven by a diversification of demand, moving beyond traditional large-scale agencies to include small and medium-sized businesses (SMBs) and sports-focused advertisers.
Broadening Demand Across the CTV Landscape
Speaking at a recent KeyBanc event, Kormeluk highlighted that Magnite’s CTV business has seen a steady upward trajectory, climbing from mid-teens growth to the 20% range in the second half of last year, eventually reaching the current 36% surge. This growth is attributed to a wider array of participants in the ecosystem, including self-service marketplaces and demand-side platforms (DSPs) that are increasingly catering to the SMB sector.
Unlike the fragmented open internet, the CTV market is highly concentrated. Kormeluk noted that while Magnite’s non-CTV business (DV+) features no single publisher accounting for more than 1% of revenue, the global CTV market is dominated by just 30 publishers who control 80% of the total inventory. This concentration, paired with heightened publisher concerns regarding data privacy, has bolstered the value proposition for independent supply-side partners like Magnite.
The Untapped Potential of Live Sports
Despite the rapid growth, Kormeluk emphasized that the company is still in the early stages of capturing the full potential of live sports advertising. With live sports representing approximately 40% of total television ad spend, a more aggressive migration to CTV could push Magnite’s growth rates significantly higher.
Magnite only entered the NFL advertising space last year following ESPN’s integration of Disney’s technology stack for programmatic inventory. The company now views March Madness, NCAA football, and broader sports programming as key pillars for future expansion.
Commerce Media and Strategic Exclusivity
Beyond CTV, Magnite is betting on commerce media as a critical growth engine for its DV+ segment. By helping data owners—such as Walmart, Pinterest, and United Airlines—monetize their own inventory while applying that data to third-party assets, Magnite is carving out a niche defined by exclusivity. Kormeluk noted that most of the company’s commerce-media partnerships are exclusive, providing a strong incentive for buyers to utilize the platform to access unique datasets.
Adapting to AI and Regulatory Shifts
The company is also navigating headwinds in the web publishing space, where Google AI Overviews and shifting referral patterns have led to high-single-digit declines in web-related business. In response, publishers are pivoting toward mobile apps and logged-in user experiences.
Regarding the U.S. Department of Justice’s antitrust case against Google, Kormeluk suggested that behavioral remedies—such as restricting how Google shares impression-level data and pricing between its ad server and exchange—would be more impactful for Magnite than structural changes.
Streamlining Workflows with Agentic AI
Magnite is currently testing agentic AI tools designed to automate complex advertising workflows. These agents, which span mediation, seller, and buyer functions, aim to reduce the time required for campaign planning and execution from weeks to mere minutes. While Kormeluk clarified that these tools are not expected to be major revenue drivers in the immediate term, they have seen rapid adoption among agency partners.
Financially, the company’s operating model is designed for efficiency; it reaches margin neutrality at roughly 7% revenue growth, with approximately 80% of incremental revenue above 10% growth flowing through to EBITDA. In the most recent quarter, this leverage was evident as a $10 million ex-TAC revenue beat translated into an $8 million adjusted EBITDA beat.
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