Magnite at Rosenblatt Summit: Strategic Growth Amid AI Era

On Monday, 18 August 2025, Magnite (NASDAQ:MGNI) presented at the Rosenblatt 5th Annual Technology Summit: The Age of AI. The conference call showcased Magnite’s strategic position in the supply-side platform (SSP) market, highlighting its growth potential in connected TV (CTV) and programmatic advertising. While the company faces challenges from macroeconomic conditions, it remains optimistic about future growth, particularly with potential benefits from Google’s antitrust remedies.

Key Takeaways

• Magnite reported over 10% revenue growth despite a challenging macro environment.
• The company is poised to benefit from Google’s antitrust remedies, potentially increasing its market share.
• CTV revenue accounted for 44% of Magnite’s total revenue last quarter.
• Magnite’s SpringServe platform integration streamlines ad operations, enhancing efficiency.
• The company anticipates a significant increase in CTV market share, aiming for 35% or higher.

Financial Results

Magnite has demonstrated robust financial performance:

• Revenue growth has exceeded 10%, showcasing resilience in a tough economic climate.
• EBITDA growth stands at 15%, reflecting operational efficiency.
• Free cash flow increased by 20%, indicating strong cash generation capabilities.
• CTV revenue represents 44% of total revenue, underscoring its strategic focus on this segment.
• The company reaffirmed its full-year guidance for contribution ex-TAC growth of over 10%.

Operational Updates

Magnite continues to strengthen its operational capabilities:

• Secured exclusive deals with premium publishers, capturing 100% of their ad spend.
• Collaborates with most CTV partners, excluding YouTube, and assists major players like NBC and Amazon.
• Integrated its ad server and SSP into the SpringServe platform, improving operational efficiency.
• The Clearline initiative provides a direct execution path for programmatic guaranteed deals.

Future Outlook

Looking ahead, Magnite is optimistic about its growth prospects:

• Anticipates growth acceleration in both CTV and non-CTV businesses, driven by new wins and customer ramp-up.
• Aims to increase CTV market share from the mid-twenties to 35% or higher.
• Expects Google’s antitrust remedies to commence next year, potentially shifting market share towards Magnite.
• Considering civil litigation against Google, which could result in significant damages.
• Maintains a cautious market outlook, despite better-than-feared conditions.

Q&A Highlights

The Q&A session provided further insights:

• No share shift observed yet from Google’s antitrust findings, as Google’s ad serving practices remain unchanged.
• DSP changes, such as those by Trade Desk, have not impacted Magnite due to its focus on premium publishers.
• Each percentage point of share shift from Google could add $50 million in revenue for Magnite.
• There is a 75%+ customer crossover between streaming and ad serving post-SpringServe acquisition.

In conclusion, Magnite’s strategic initiatives and market positioning make it well-placed to capitalize on future opportunities. For more details, refer to the full transcript below.

Full transcript - Rosenblatt 5th Annual Technology Summit: The Age of AI:

Barton, Analyst: Okay. Hello, everybody. Thanks for joining us this morning in our fireside chat with Nick Cormaluk at Magnite. And, you know, Mac Nick, your your title is a unique title. You’re you’re head of investor relations in real estate.

I think everybody knows you as mister Magnite. But before we get dig into it, tell us about this real estate empire that’s falling apart while we do this conversation. What do you manage there?

Nick Cormaluk, Head of Investor Relations and Real Estate, Magnite: Yeah. So, you know, it’s it’s not as glamorous as it might seem. It’s you know, I I in charge of, you know, where we have and where we operate all of our global offices. So whenever there’s a time that we either, you know, do acquisitions and need to shed space or sublease space or find new space or grow into new space, I’m the one that’s I’m the one that makes the decisions. I think that Michael and David were very, very keen to put me in that role.

I’m generally good with people and and kinda managing people’s expectations, but they also know that I’ll never screw things up, meaning that I’ll never get a real estate space or an office that, you know, causes expenses to run too high. So it’s a kind of a self correcting circular, reference. So, so it’s pretty easy to to to, sign leases that I put in place because it creates very attractive space for investors to come and visit as well as our employees to work at, but also it’s never gonna break the bank and never going to create a create a p and l or a margin hit that that that nobody on the street likes to see. But all kidding aside, our offices are in the largest global financial center. So you think about London, you think about Sydney, you think about Paris, you think about New York, you think about LA, San Francisco.

It’s in many of the, you know, places in the world where large marketers are based as well as investors are based. Anytime I go out to, you know, help find office space or renew leases, etcetera, I also go and meet with investors. So there’s a lot of synergy with, with my travel. It’s usually dual purpose from that, from that regard.

Barton, Analyst: Okay. Alright. Well, thanks for, answering that question that I’ve had really since I met you, so I appreciate that. So so just to to level set here. So I cover Magnite.

It’s actually my top pick on our top picks list for the firm. I have a a $39 price target, you know, well elevated from where the stock is currently trading, predicated a lot on our optimism that there is a good argument for some good things to come to these guys out of the the Google antitrust remedies process that’ll be kicking into high gear here in September with the trial and hopefully a decision shortly after that. But leaving that aside for the moment, we’ll talk about the antitrust here at the end. Nick, what would you say is the investment case for Magni? You know, what what is it?

Why should investors be interested right here?

Nick Cormaluk, Head of Investor Relations and Real Estate, Magnite: Yeah. No. It’s a it’s a pretty compelling story that, you know, the the the the macro and the overall ad environment has not been a a massively positive one in the last kinda two to three years or so, and and that environment’s actually been very healthy to us. We’ve been kind of slogging through that environment and putting up respectable growth numbers, not phenomenal growth numbers, but, you know, good growth numbers. And on, you know, 10 plus percent revenue growth, we’ve been able to grow EBITDA 15% and free cash flow 20%, you know, in each of the last you know, you know, this year for kind of what we guided as well as the last couple of years.

So being in that position, I think people are being paid to wait. And what we’ve demonstrated is in both sides of the business, CTV as well as in the non CTV pieces of the business, the pro the the profile, both the growth profile and the margin, you know, profile of those businesses are getting better and improving. And I think you’re seeing a momentum, at least from press releases we’ve been putting out and a little bit of pickup that has started in the revenue lines in both businesses. You’re starting to see an acceleration and a pickup of the growth rate that’s directly attributable to some of these new wins that we’ve put on the board. So we can talk about kind of each of those businesses separately, but I think there really is, you know, there really is scale and advantage and being a trusted partner and monetizing for people that now, you know, previously thought walled gardens who only transacted their inventory on a one first party basis are now hiring us to do so.

So I think that’s a change in philosophy, and you you’ve seen a lot of that momentum take place. And we are inside the walled gardens and CTV, and we’ve even won, you know, business with folks like an NBC and an Amazon for their owned inventory that we never thought would happen since they have fully integrated stacks, but they’ve come to us to also be able to assist in that. So the the wins that we’ve put on the board and the complexity with some of these have happened and our role that we’ve been asked to play, I think, has even surprised us a little bit, and the momentum continues. So I I don’t think we’re done making announcements. We’re definitely not done ramping the customers that we’ve announced already.

Some are starting to contribute. Others are yet to contribute. But it’s a pretty exciting time, and and I think there’s better growth ahead for for both sides of the business.

Barton, Analyst: Okay. So just stepping back here for a little bit. I mean, Magni is credited with being the second largest SSP with about a 6% share after Google with 60, but ahead of publicly traded peer PubMatic with about 4%. What has Magnite done well to achieve this prominent share position in this market that Google has been monopolizing?

Nick Cormaluk, Head of Investor Relations and Real Estate, Magnite: Yeah. I think, you know, it’s it’s a lot of different things. There’s not one lever that you pull and all of a sudden spend daily spend goes up, you know, 500,000 or a million dollars a day. It’s a lot of little things. So some of it’s on the product side.

You know, we continue to invest in the product side from, you know, other formats and and other, you know, inventory sources and how people bid across different, you know, different, you know, different device types and different formats. Some of it’s been that. Some of it’s been our wins. And in the past, I would have told you in DV plus that a win in DV plus for for those of you that aren’t as familiar, DV plus is non CTV is how we describe it. In that side of the business, if we want a publisher historically, then there was nothing really to get excited about.

If we want a publisher and they used header bidding and they used many other SSPs, what happened is we would get our 6% share, and another public competitor would get their 4% share, and Google would get their 60% share. And then even that one publisher, we didn’t know if demand coming through Google and Trade Desk and Amazon and Mountain and others, if it was incremental demand or simply coming from one publisher and flowing into the new publisher that we signed. So it was kind of a yawn when we’d sign a new publisher on the DV plus side of the business. The reason that’s different now is a lot of these wins, especially in the commerce media space that we put on the board, are exclusive. So these deals now are not our 5% or 6% share.

It’s a 100% share, and they’re premium publishers. So if you think of this, you think about a a an x, a United Airlines, a Western Union, a Pinterest, a Redfin, a REMAX, a FanDuel. There’s a lot of these players that all of a sudden now, they matter, and the demand that comes through isn’t the same old DSP dollars. There’s incremental dollars coming into the ecosystem that we never touched before. So that’s why I think that growth rate is is really starting to inflect, and they’re choosing one partner.

Why one partner all of a sudden? Why are they not as promiscuous as they used as other partners used to be, you know, two, three years ago? What they’ve seen in Connected TV is a heavy guarding of user IDs. Meaning, they don’t want the buyer to get that user ID, build an ID graph off of there, and then never buy on their property again. So if you found out Barton’s email address and you were, you know, you were a Netflix, you know, viewer, you could buy off property and never send another dollar to Netflix and buy inventory buy you as a as a as a potential, you know, customer much, much cheaper than $50 on chain on stranger things.

You could get you for $8 on LG or, you know, Tubi or Pluto or even buy you in open Internet. So the role that we play in guarding IDs is now a similar role that these walled gardens want us to play on the open Internet, and that’s why they’re not willing to share with everybody. They want one strong monetization, strong trusted partner to be able to monetize for them and also guard and protect against their IDs leaking out to the buy side. So that’s a little bit of the reason for the change of how the industry’s embraced SSPs differently. And I think the other important point on CTV that I’ll just call out is is the market is much less fragmented.

Today, most of our CTV partners think of themselves as walled gardens. We tend to think of themself them as hedged gardens, but there’s 30 partners that represent 80% of the world’s inventory, and we work with all of them except for YouTube. So they now have already worked with us. The buy side when you move to the SMB market is exploding. There’s tens and thousands of new buyers are coming that are coming in.

That’ll come from a variety of DSPs. And even the DSPs that come in, we are the access point for the publisher to manage all of them, and most of them are running any biddable inventory that they do through private marketplaces. And you don’t need two SSPs to run your ad stack, your complex rules, be your ad server, as well as manage a certain amount of finite demand and not just open unlimited demand as you’re running auctions for your inventory. So the other thing that we do is we we provide the full ad operations, including ad serving and all the complexities, and not just a bid and not just, you know, a a in getting paid by winning a bid.

Barton, Analyst: Okay. Alright. Now we’ll we’ll drill into some of that a little bit more here. But just stepping back again on you know, I one of the things that that I find interesting about your sector is that there are all these kind of secular trends that seem positive. Right?

There’s this secular trend of people watching more streaming television versus linear. That seems to be a tailwind for connected television. There seems to be a tailwind behind programmatic, people wanting to get more kind of targeted. What would you describe as your level of exposure and your level of growth in those kind of secular growth areas like CTV and programmatic?

Nick Cormaluk, Head of Investor Relations and Real Estate, Magnite: Yeah. Very high. So, you know, programmatic was not seen as being kind of mainstream or the preferred, you know, monetization path, you know, up until two, three years ago. You know, even in, you know, even in open Internet or even in, you know, DD plus, was you know, it probably gained its prominence to really touch and sell premium inventory three, four years ago. That’s now moving to CTD, and we’re in the right place at the right time.

Remember, not too long ago in connected television, the largest two players where, you know, streaming was viewed never even had ads and said it was, you know, it was against their religion almost to run ads, which is Disney plus and Netflix, which have now massively embraced, first of all, connected TV, now moving more and more towards, you know, programmatic, and that’s the way that they prefer transacting because it’s the most economic path to unlock the next $10.20, 30,000,000,000 of spend, which is gonna come from small and medium businesses. Live sports is one of those other factors that’s still, you know, in the, you know, in the front view mirror where we’ve got a lot of, you know, a lot of space in front of us. A lot of that has been very prized inventory that salespeople have sold and really try to hold on to it. Now that is starting to open up with the people that are owning sports rights. They really wanna use programmatic to squeeze every revenue dollar out of that, not just use it as an offset for subscription fees or customer retention.

Barton, Analyst: Yeah. Right now, we’ll we’ll go more to that also in just a minute. But the just to to level set here, what would you say is your percentage of revenues at this point from CTV?

Nick Cormaluk, Head of Investor Relations and Real Estate, Magnite: Last quarter was 44% CTV. It was 39% desktop, and about and the remainder was the remainder oh, sorry. 39% mobile, and the remainder was desktop. Now just to remind folks, our 44% that was CTV, that is only large screen, large format TV. So 55 inch glass in your living room is what that’s defined by IAB standards.

We do have a significant amount that runs through that mobile and desktop channel that is streaming on mobile or streaming on desktop. So that CTV number or that streaming TV number, if you include OTT, would be even higher.

Barton, Analyst: Yeah. And your CTV is growing, I think, in share. Right? What what what would be some sense of the relative growth for that versus your overall business?

Nick Cormaluk, Head of Investor Relations and Real Estate, Magnite: Yeah. The share you know, our share growth in CTV is is, you know, we were probably post acquisition four years ago at about, you know, a mid teens market share. That’s not that number has migrated in the programmatic side to probably mid twenties. And we’ve said that, you know, there’s no reason that shouldn’t grow 35% and higher. So we feel really good about where we’re positioned, the wins that we’ve had, some of the new ramping partners that are very, very early days as a percentage of mix in the market.

You know, we’ve we’ve got the largest growth players as as our largest customers.

Barton, Analyst: Yeah. Now just on the other side, there’s a lot of concern now about websites, and I think you kind of alluded to this, but the the notion of declining click through rates because of the embrace of large language models by Google and others. What’s your exposure to that behavior, and how do you see that evolving?

Nick Cormaluk, Head of Investor Relations and Real Estate, Magnite: Yeah. No. It’s clearly been something that started back in the fourth quarter, and that’s a very, you know, very clear observable trend that, you know, that search traffic is being diminished by AI search. Right? There’s no question.

That generally would manifest itself in, you know, in mobile web as well as in as well as in traditional desktop business. I would say that affects lower quality publishers in the ecosystem. Right? People that are really search dependent. If you look at, you know, a part of our DBplus business, you know, what I mentioned is a lot of that, you know, or a good portion of that also includes streaming on those devices.

Those are logged in users. If you think about our mobile business, well north of half of that business is mobile app, right, which is completely unaffected. People are going to an app, either a travel app or a news app or a content or audio or video or other content that they’re directly going to in app. So in app really isn’t affected by search trend. Long tail, we think does consolidate.

We think long tail might become the dead tail. So I think the number of publishers, you know, that that really survive, they’re gonna have to reinvent themselves. I’m not sure if getting some fees for scraping their sites is gonna be the savior to to be able to, you know, save them and and kinda change their monetization path. But today, if you step back and we use some of the stats we apply to, you know, some of the Google map that we do for people, we take in trillion and a half numbers that we kinda last formally reported. I’m sure that there’s some days we’re at 2,000,000,000,000 ad requests that we receive from publishers a day.

We throw out 70% of that every single day. So think about long tail. That that is the long tail. We immediately cut out 70% of all inventory as a long tail that never even sees the light of day of an auction that we take to market. And in those auctions that we do take to market, it’s not like our win rates in those auctions are 50 or 60 or 70%.

So you even have a massive amount of that inventory that is out of that 30% that is not monetizing inventory that we’re not generating revenue from. So I would say that, you know, we are fairly insulated from that perspective. I I think that there is a future in which, you know, the gold rush in AI does change and, you know, subscription, you know, is the easy button. And when everybody you know, when something’s hot and something’s new and everybody wants it and everybody’s chasing subscription dollars right now, I do think it may not be in ’26, ’27, or even ’28, but I do think there’s a point in time that a lot of the AI players together either with browser or stand up through app or on their own do use advertising as a monetization vehicle for monetizing, what they’re doing in AI related search, but that may be a point in time. But in the meantime, what we do is we is we believe the more premium publishers with user IDs that have good data against them that aren’t seeing that decline.

I think there’s a move to inventory quality. And I think one of the big things that’s happened and the reason people buy long tail is it’s been cheap, and it’s a way to show that you’re buying at relatively lower CPMs by averaging that out in your overall campaign buy. And you’re probably removing what your CPM criteria are by buying further up ad, you know, ad quality if you’re getting the performance that you’re looking for. So I think that’s at least what we’re observing to date, and there’s no reason to think that that would change. But the the trend of lowering search traffic is absolutely, you know, honest and something that, you know, is is very visible.

But you’ve seen our DV plus growth rates, and they’ve been doing nothing but inflecting during that same kind of three, four quarters that we’ve experienced those trends.

Barton, Analyst: Okay. Now I wanna pause here for a second. So if people wanna put questions into this conversation, there is a chat function, and I should be able to to see the questions here on the screen as they come through. And I can try and work them into the conversation if you’d like us to cover some things here. So so turning to SpringServe, tell us a little bit about what this is, why it’s important to you, and how it’s differentiated in the market.

Nick Cormaluk, Head of Investor Relations and Real Estate, Magnite: It’s, it’s really table stakes of what you need to really be the true ad operations for a streamer, a TV OEM, a virtual MVPD, or a broadcaster looking to run their ad operation. The value that we bring in connected television to a partner is overall yield management and optimization, following all the complex CTD rules, and getting, you know, getting the best type of inventory sold to the best parties and configuring it quickly and doing it at scale to the broadest set of approved buyers. That is really, really hard to do. If you don’t have an ad server and you haven’t put those two pieces together, meaning the ad server and your supply side platform into one, First of all, you got great inefficiency, and you’ve got multiple vendors and partners that you have to manage and multiple inter interfaces to go to to do, you know, similar similar and combined work. So first of all, you log in to the new SpringServe platform that went to general availability.

You have one interface, and you see all the tools and all the different services that Magnet offers in one platform and one interface versus going to two separate systems. So that’s the first advantage you have. You then can have an advantage of when you’d like to get a call. Do you wanna get it early from the ad server? Do you wanna get it from the streaming platform?

Do you want that to happen to you multiple times? Do you want it both times? To us, we’re indifferent, but you can actually reduce your overall cost, and we can reduce our cost of sending that ad call to a buyer, you know, once versus twice, so there’s an efficiency there. But if you still wanna see it twice, some publishers want us to sell send it multiple times for different price floors. Start at a high price floor if you have no takers, wind that thing down, and then send it off again and see if you get a bid on it.

So there’s a variety of reasons why you might want that to happen. But, really, it’s streamlining your operations. It also becomes more sticky. If you’re on one platform, you’re less apt to go out there and say, hey. I’m gonna go look at different, you know, ad serving platforms and different exchanges.

So it really makes your workload and your life easier, and it makes the product more sticky. And that’s not to say it hasn’t been sticky already, because since we made our first announcement entering into the CTV space, we’ve not lost a single customer. And over that time, our crossover of customers between streaming and ad serving, after picking up the SpringServe acquisition, our crossover is 75 plus percent, where both customers use both sides of the house. So that also made it really, really obvious and easy to say, if we’ve got that much customer crossover and and we’ve done so well at cross selling each, it makes sense to simplify and ease the platform for them.

Barton, Analyst: Okay. Alright. So that’s that’s been an important part. Now is this is this a lower margin business for you, and how do you guys kinda manage the that implication?

Nick Cormaluk, Head of Investor Relations and Real Estate, Magnite: I’d say well, now SpringServe is the, you know, is the brand name for our entire platform. Right? So now it’s just one. Ad serving is a lower take rate business, but make no mistake. Lower take rate does not mean lower margin.

We are priced extremely efficiently there. So not only do we wanna go to market as we’re in this market share up for grabs, tying up largest customers out there, we wanna be best tech, best best performance, best monetization, and best price. So we deliver on all those to make it a no brainer, and you see that in our win rate. There’s not a big chunk of business that’s gone out out and that we’ve not won as it’s been an you know, as it’s been up for grabs. So we feel really, really good about our position.

But you see our margin profile. It’s not like we’re pricing at a point where we return to investors and say, hey. Just wait for it. At some point, we’ll make money in this business. CTV is a very, very good margin business even at lower take rates across our rate card.

Barton, Analyst: Okay. Alright. So, you know, so that’s that’s an important thing. Now let’s let’s talk for a minute about your your I think it’s Clearline is your direct kind of initiative and this idea of, you know, does this open the kimono for DSPs and SSPs to be more competitive with each other where before you were more kind of complements? What do see happening there?

I mean, how did you know, is this something that is a change in the nature of what’s happening in the marketplace, and what does it mean for you guys? You know, supply path optimization.

Nick Cormaluk, Head of Investor Relations and Real Estate, Magnite: I think these are at the yeah. I think it’s at the edges that you’ve got, you know, different use cases and dollars that are very sensitive to price that want an execution path, especially if there’s not additional work done. So, you know, in Connected TV, if you know, and which is really where Clearline has pointed, you know, if if there’s a programmatic guaranteed deal out in the market, right, and, the buyer publisher and the buyer are arranging the price and sale or the agencies involved in negotiating the volume and the price of that inventory, and then Magna is executing it, why do you need to pay a full fledged, fully functioning DSP for your checking account at a 20% take rate? Right? It’s like paying it’s like paying your bank 20% for every transaction you’re doing.

You probably would find a more economic path for it. So I think, know, to the to the extent that you’re doing fully decision programmatic, it makes sense to use your DSP. If you’re doing it in a PG world or even in a private marketplace world where, again, most of that is predetermined and the DSP is not bringing the same value that they bring in OpenBiddable, then there should be different economics there, and Clearline provides that, you know, provides that solution. So the way to think about Clearline is a lot of these buyer marketplaces that we set up. And we set the buyer marketplaces either individually for a publisher, think of it as like a Roku or Warner Brothers Neo, or you think about it from an agency perspective, the marketplaces that we stand up across lots of different inventory, like we do for WPP Media or Dentsu or Horizon, then in those paths, every one of those marketplaces have asked us to include Clearline as the way in which to be able to transact that inventory.

So what the reason for that is is a Roku and a Warner, they would prefer brands coming to them directly. Because if you’re buying on your DSP and a brand’s buying through a DSP, you enter your criteria. You’re looking for people like Barton and Nick, and then you don’t know which deal IDs you get. You don’t know what inventory you’re buying. You know that your spend was was committed, and you hit your price thresholds, and you reached the users that you wanted, but you don’t have control to say, I wanna buy

I wanna buy on Warner specifically. So what happens is you just get deal ID shared with you, and you really wanna do that directly. So Roku and Warner are interested in doing that, or the agency is saying, hey. If you wanna pick Disney and Netflix, we have it available for you. You can choose just those two, or you can choose everything, or you can deselect or select the ones that you want.

So what happens at the end of that transaction process in their marketplaces is you go through, find what you want, buy what you want, and then while you’re exiting, you choose your payment method. And your payment method is either your Amazon DSP, your Trade Desk DSP, your, you know, Google DSP, or your Magnet ClearLine path. And, effectively, you choose which way you’re gonna actually deploy your spend and how you’re gonna pay for the inventory that you just selected. That’s what these marketplaces are. That’s how Clearline is a very, very easy choice depending on the level of service that you’re requiring in order to make that work.

Barton, Analyst: Okay. So, you know, I wanna ask a couple of quick questions about the market place right now, and then we’ll talk a bit about Google antitrust. Then I’ll work in some of the questions. We’ve got at least one in here that I want to work in. So in terms of the current market conditions, you guys at the high end, you guided for third quarter kind of contribution ex TAC growth of around 10% consistent with what you did in the second quarter.

You’ve got maybe a little bit of political comp, so arguably ex political, it’s a bit of couple of points of strengthening. And you’ve kind of brought back the full year guidance that you had for contribution ex TAC growth over 10% this year and ex political mid teens. So it feels like you’re seeing, you know, an okay marketplace out there despite all the noise. Is that correct?

Nick Cormaluk, Head of Investor Relations and Real Estate, Magnite: Yeah. I would say the the marketplace is still okay, way better than feared, but it’s just okay. And some of the reasons for the inflection and growth is some of our kind of unique deals and partnerships we’ve announced that are, you know, additive, you know, at any level. Could they be more additive if the market was stronger? Yes.

But I think it’s more things, you know, it’s it’s more things kind of in our sights, and the overall market has been, you know, again, better than it was feared. But, you know, we’re definitely not off to the races in what we’ve seen in the market thus far and still leaves us a bit cautious in kind of what we put out there.

Barton, Analyst: So a bit cautious. You know? Okay. That’s certainly, a little bit of a different, story than what we’ve heard from your one of the other, you know, the other SSP that’s publicly traded PubMatic, you know, on their second quarter call, talked about an issue with a DSP that was unnamed, that was making some changes that was, you know, a meaningful kind of negative inflection in their revenue trajectory, at least in the near term as they work through this. That follows a year where they’ve had a DSP client that had transitioned from, I guess, a second auction to a first auction, which seemed to hit them by 15 percentage points or so.

What are you seeing you know, they talk about these as industry wide changes by major DSPs. Are you guys seeing this? Is this impacting you?

Nick Cormaluk, Head of Investor Relations and Real Estate, Magnite: The same DSPs made the same changes and no impact to us. Okay.

Barton, Analyst: How could that be different?

Nick Cormaluk, Head of Investor Relations and Real Estate, Magnite: It it depends on how you’re signaling first or second price auction. If you were signaling in the same way in the auctions prior to the change, it would have no impact on you. I know in this latest change, there was you know, we had heard from, you know, the DSP was Trade Desk that they were making some changes in, in how they were looking at direct inventory versus indirect inventory. And, you know, when we talked earlier about kind of AI search trends and that affects more of the long tail, and and not that, you know, certain publishers are not good versus good or, you know, the the top tier publishers, largest publishers are any better than others. In the top tier customers, they all have direct relationships with you because they have scale, they have size, and they have their own internal you know, they have their own internal teams to be able to create APIs and manage them to different SSPs.

If your general customer set tends to be longer tail, and there’s a reason to be there, you generally get higher take rates from longer tail inventory. But in some cases, those smaller players just don’t have size and scale, so they have to kind of partner and get together in order for them to be able to, you know, have resources by which they can sell their inventory. So in some cases, that looks like an ad network. Right? So you have, you know, a handful of guys that are together, and then it looks like it’s multi hop inventory or indirect inventory where there’s one party involved and there’s a second party stacked on top, which is the SSP.

What Trade Desk change says is, hey. We’re only doing and buying and transacting in direct sold inventory versus this indirect inventory. So I think that’s the other change that’s being made, and it’s just not a big part of our business. We tend to work with more of the premium pubs that are all direct relationships. So so I think that’s really the, you know, the the the latest, you know, the latest one that, again, you know, we heard heard from them earlier in the year that they were making these same changes, and it’s not something that’s, you know, affecting or disrupting us.

And I think overall, as I talked about, you know, there is a higher there’s a tendency to move towards higher quality publisher inventory with what’s happening in AI search trends as well. So I I I like where our position is, and, you know, I think this DSP issue as well as, you know, AI search trends, you know, puts us in a pretty good part of the ecosystem from where we’re and how we’re positioned in DBplus. And that’s also the addition of these new partners. They’re all super premium, previously, you know, determined to be walled gardens that are now striking, you know, direct relationships and, you know, exclusive relationships. That’s also helpful and additive to, you know, what our growth rate is relative to industry.

So we’re we’re pleased that this is driving share gains for Magnet during this time.

Barton, Analyst: Okay. Right. So now I wanna switch to a little bit of about Google antitrust. So I’ll work in one of the questions that we got over the transom. So, you know, we’re we’re looking for the the remedies trial.

So Google was found to have, you know, violated antitrust law in ad tech following, you know, finding that they had violated antitrust and search. And the, you know, ad tech trial about remedies is going to start on September 22. But the question that I have here is, can Google start to bleed share prior to remedies, prior to the ruling? You know, and just, you know, give a little bit of explanation, like, why why would that or why would that not happen?

Nick Cormaluk, Head of Investor Relations and Real Estate, Magnite: We’ve we’ve seen none of that. And remember the, you know, kind of the linchpin in the monopoly is the ad server. And there’s there’s, you know, nearly a 100% market share that Google has on the ad server. When we quote 60%, that’s in the SSP. So as an s s as an ad server, publishers use Google.

And by using Google, Google’s able to control how much market share they have, and they’re able to control, you know, essentially what take rates they have without a publisher having any choice. Google hasn’t started, you know, not renewing ad serving relationships or changing economics or changing behaviors at the moment. And I think part of that is Google still doesn’t know on structural remedies whether this is an asset they’re gonna own or not own. So they’re they’re heavily, heavily motivated to preserve the best economics they can, especially if they have to sell these assets. Right?

So if you show a massively declining business from a revenue perspective in advance, you’re not gonna get top dollar for moving these assets or spinning these assets in any in any particular way. So I think that’s the the challenge. We’ve seen no behaviors today. You know, we are very clear that some of the market share, movements that we’ve seen are related to customers and some product work. I would say that if this was Google market share that was starting to shake loose, you’d see it not just with us, but you’d see it in the other public peer and seeing numbers really start to inflect or starting to turn up if there was any Google benefit that was coming in the market, and you’ve not seen that from us or from, you know, or from our other public peer.

Barton, Analyst: Okay. But, you know, to to just, push back a little bit on that, I mean, the Google network line that they report publicly spend flat to down a little bit. So certainly well underperforming you guys, and I think in general, your peer set to the extent we see their numbers. Wouldn’t that be in some way tied to antitrust, or is there something else that’s driving that?

Nick Cormaluk, Head of Investor Relations and Real Estate, Magnite: No. I mean, we’re we’re I mean, with with their size being 10 x our market share, it’s still not enough to move the needle. I mean, truly, if the market was becoming more fair and some of these practices were changing, you’re talking about a lot more movement than us going from a, you know, 5% growth rate to a six to 8% growth rate. That that that type of move would would almost you know, just doesn’t make sense from, you know, how fair open the market or the ecosystem would be transacting. So we’ve not seen and and and some of these practices, like again, have we seen Google’s DSP all of a sudden stop buying from us intra quarter like they used to?

Yeah. We probably haven’t seen that happen where they just shut down and stop buying from all others at a point in time because that’s probably the most egregious one, but that’s probably not the biggest market share driver. It really has to do with the rules, and nothing has changed from when we’re seeing auctions, what win rates we’re seeing in Google traffic and inventory. None of that has changed. So, you know, that’s where you would start to see it even incrementally in your March in your in your in your win points.

We’re just seeing, you know, our growth coming from new publishers, and we can deterministically be able to connect those dots or new formats that we launch. Some of these are 10,000 in spend a day. Some of these are 30,000 in spend a day. So we can tie it directly to others as opposed to our general auction rates going up.

Barton, Analyst: Okay. So, you know, you guys have spoken about an opportunity for, potentially $50,000,000 of incremental revenue for each percentage point of share shift, and, at a very high contribution margin. You guys are at about 6% share right now. Google is, like, 60, roughly. How much share do you believe you know, if if we actually got behavioral remedies, that are effective, how much share do you believe could shift to Magnite?

Nick Cormaluk, Head of Investor Relations and Real Estate, Magnite: A lot. There there’s the the way to think about the behaviors that they’ve put in place to support market share, it’s not just one item. It’s not just sending the auction out to people. It’s not just sharing data on the price floors. It’s not sharing the clearing price.

It’s not d v three sixty giving away some free YouTube credits if you buy on their DSP. It’s not just the AdWords data benefit buying for a public. It’s all of those things. So think about a pool net. Right?

So if you take out, like, a pool safety net that’s kinda holding their share up and propping their share up, if you take out one of the one of the ropes, right, the baby’s still not gonna fall into the water. Right? You’re still supportive enough that all these things together and combine are holding things together. That’s why getting rid of last look two years ago didn’t do anything to shake out market share movement because the other factors were still all in place, and it was probably the easiest one for them to remove. So I think it’s very, very hard to say how and when the share will move.

We can’t be as prescriptive as we are to what one market share point means. It’s easy to do to start with total ad spend, look at what our, you know, take rates are, look at, you know, how much, you know, how much market share we have versus them. It’s pretty easy to get to the 1% equals, you know, $50,000,000 in in revenue ex TAC. Understanding what the judge says after the remedy hearings conclude and the judge and judge brings him a rules, knowing what all the behaviors are is helpful. Knowing the timing of when those behavior changes will take place is also helpful.

It’s massively helpful that the judge said, we are not treating both of those separately, and which has informed us and given us confidence to say that behavioral remedies are very, very likely to start going in. And even if appealed, which we almost guarantee will be appealed, will start to take place next year. But the amount of changes, the pacing of those changes, we’re waiting to hear just like everybody else is when those might take place. But to your original question, if the judge is successful at truly making a more fair and open marketplace, there will be meaningful share that moves. It depends on are they and will they be successful, what other countermeasures would Google try to take to try to protect share.

We’re not, you know, we’re not naive in thinking that they’ll try to do as much to protect this as they can. But I think but I think the the judge is committed not just to rule that, you know, a few things need to happen, split the baby, and then there’s still a safety net in place that protects Google to a large degree. There is high intent to truly make it an open and fair marketplace, which I think as the proof point of that happening is publicly reported companies like us and like our peer who you would see the share shift happening, and you would see truly the market opening up, that’s the evidence that actually shows that there is a fair and op operating marketplace versus any other fact and any other stat that can be shown to the market is that. So I think the judge, the DOJ, even Google, you could argue, may have some incentive to show that they’re playing fair sooner if they don’t if they wanna win an appeal potentially on structural remedies and not have to spin off the assets, could they also be aligned to show that and get out of the front page news and be on back page news where people care less about it, and they’ve actually shown that they’re operating a fair ecosystem?

Barton, Analyst: Okay. Alright. And, you know, we just got a couple of minutes left here. You One know, of the things that’s related to antitrust, I mean, there’s this share shift opportunity. So the way we thought about it is if you’re 6% share now, you’re maybe 15% share in the ex Google market.

And in a fair market, maybe that could be your total And that would be, you know, theoretically nine points of potential times 50,000,000 at some point in the future with a big discount rate for being wrong that, you know, that gives us $10 of our price target. So we have another $10 of our price target and the idea that that also gives you guys grounds potentially to pursue civil litigation, which would be a little bit longer term, but, you know, happens in antitrust outcomes like this. What how are you guys thinking about that potential? What what what is your thought process at this point?

Nick Cormaluk, Head of Investor Relations and Real Estate, Magnite: Yeah. Doing a lot of work there. I I think, you heard at least a change in our, you know, in our commentary around that this quarter. On our earnings call, we said that in order for us to be able to, you know, be awarded civil damages, it’s an action that we would have to bring separately from the actions that are in place now. And we believe, without, you know, saying more, we believe that there is a lot of merit, to bringing an action.

So, so, again, I I I probably leave it there, but, it’s very, very compelling. And and I think a lot of people are doing very good math at trying to understand what that could look like. So, again, there’s certain timing windows that make, you know, that make a lot of sense and make more sense. There’s obviously venues that are more supportive or less supportive of doing that. So, again, we’re kind of doing that work right now and kind of more to come on that front.

Barton, Analyst: Okay. Right. And, you know, I think we just got a couple of minutes left here. So, Nick, if you just kind of wrap up, I mean, if you were to, you know, leave people with the closing kind of thought here, you know, what is it that’s interesting about Magnite across everything, your fundamentals, you know, Google, everything you’re doing? What what is it that you guys are doing that’s interesting, and why, you know, why should investors be thinking about Magnite right now?

Nick Cormaluk, Head of Investor Relations and Real Estate, Magnite: Yeah. I think the, I I think there’s you know, you you probably hear a lot of excitement in my voice. You heard a lot of excitement on Michael’s voice in the call. You know, we’re we’re happy to, you know, we’re happy to be kind of past the worst risk of the macro and, you know, tariff related concerns that were out there that I think overall kinda swamped the industry, you know, a quarter or so ago. I don’t think, you know, all right now are created equal.

I think there’s a lot of choppiness in the market that people are trying to understand, like, who’s who’s an outlier, who’s able to navigate the the environment a little bit better versus not. And that’s across the landscape. I’m not just talking about one, you know, kind of direct peer out there. But we feel really good about the wins we’ve put on the board, the fact that some of those are, you know, are are making it through to to revenue and and starting to help growth rates in in both sides of the business. So when we say acceleration, you know, we we really see it from wins that we’ve put on the board and customers that we’re ramping.

So we hope there’s more of that. By no means are we done putting logos up on the board. I think there’s a lot more to come, and, you know, it it’s for us to continue to kinda ramp those post announcement to get those, you know, converted into revenue and continuing to push the growth rate. So we certainly hope that there’s better growth ahead. The environment that we’ve lived in almost kinda pays you to wait and and gives you pretty good stability.

Know, in the last, you know, couple few years, you know, including this year’s guide, you know, at about a 10% plus growth rate, we’ve put up mid teens growth in EBITDA and 20% free cash flow. So pretty healthy financial fundamentals. And, you know, the changes, if our growth rate goes to 15 plus percent, 20 plus percent, if, you know, we get, you know, some some good movement and share movement from Google, our CTV growth rate and partners continue to grow, That means a lot more to EBITDA, and it means a lot more to free cash flow. So we really like how this business would perform in that environment. But we’re seated in a very strong position that when the market’s not great, a lot of partners in order to push their growth rates higher and get through an environment like this one tend to hire us for additional growth.

So that’s what’s shaken loose some of these walled gardens that really are seeking more revenue growth, and we’re able to provide that solution for them. So I feel pretty good for what our outlook looks like. I I would ask you one question that I get asked a ton, and given, you know, what you said earlier and and your price target math kind of answers a lot of that question. But, you know, investors ask me is but I I’d like your expert outside opinion. You know, investors say, hey.

How much of this Google potential outcome is priced in? How how would you answer that question for folks on the line today that I think is valuable for people to hear?

Barton, Analyst: Yeah. I mean I mean, look. We’ve got we’ll have to cut off here, but we’ve got $20 of Google antitrust in our $39 price target. So that tells you that not much is in. And so that’s part of our enthusiasm here.

So great. Thank you very, very much. We really appreciate it, Nick. Thanks, everybody, for joining us.

Nick Cormaluk, Head of Investor Relations and Real Estate, Magnite: Thank you, Bart.

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