Magnite Earnings: Recovering Advertising Demand Lifts Revenue and Cash Flow

Magnite posted a nice acceleration in revenue growth during the fourth quarter as it benefited from the rebound in demand for digital advertising. Revenue, excluding traffic acquisition costs, exceeded management’s forecast across all channels, including connected television. CTV revenue still declined slightly year over year, but would have grown about 4% excluding political ad spending a year ago. Total revenue, excluding TACs, increased 5.5% year over year to $165 million. Cash flow remained solid as Magnite generated more than $75 million during the quarter, partly thanks to favorable working capital changes, and about $177 million for the full year. Management modestly increased its outlook for 2024 revenue growth, excluding TACs, to about 10% from the high single digits, which aligns more closely with the expectation in our $15.50 fair value estimate.