Core Insights - The digital advertising market is projected to grow at a CAGR of 15.4% from 2025 to 2030, driven by mobile penetration, social media, and programmatic advertising [2] - The Trade Desk (TTD) and Magnite (MGNI) are key players in this space, with TTD focusing on demand-side solutions and MGNI on supply-side solutions [1][3] Company Analysis: The Trade Desk (TTD) - TTD reported a record-breaking spend of over $12 billion on its platform in Q4 2024, indicating strong advertiser demand [4] - The introduction of the Ventura Operating System for Connected TV (CTV) aims to enhance efficiency and targeting capabilities [4][5] - TTD's acquisition of Sincera is expected to improve its programmatic advertising platform by integrating data quality insights [5] - The company faces operational challenges due to maintaining two platforms, which could impact performance if delays occur in adopting the new Kokai platform [6] - TTD is under pressure from macroeconomic uncertainties and competition from major players like Google and Amazon [7] Company Analysis: Magnite (MGNI) - MGNI's contribution from CTV increased by 19% year-over-year for 2024, generating $607 million in contribution ex-TAC and processing over $6 billion in ad spend [8] - The company sees Netflix as a significant opportunity for growth as it expands its ad tier, expecting contribution ex-TAC growth of over 10% in 2025 [9] - MGNI's partnerships with major companies like Disney and its expansion into live sports are expected to drive further growth [10] - The SpringServe ad server and streaming SSP platform are key catalysts for MGNI, enabling direct relationships with major streaming platforms [12] - MGNI's costs per ad request have decreased significantly, with a 26% reduction for DV+ and a 45% reduction for CTV in 2024 [12] Market Performance - Both TTD and MGNI shares have declined due to a tech sell-off, with MGNI down 28.5% and TTD down 54% over the past three months [14] - TTD is considered overvalued with a Value Score of F, while MGNI has a Value Score of B [15] Valuation and Earnings Estimates - TTD's forward 12-month price/earnings ratio is 28.37X, compared to MGNI's 12.83X [17] - Analysts have revised TTD's earnings estimates downward, while MGNI's estimates remain unchanged [18][20] Investment Recommendation - MGNI is viewed as the smarter pick due to its stronger valuation, diversified partnerships, and expanding CTV footprint [21]

Entering Closed Beta, the New SpringServe Platform Reduces Layers Between Buyers and 99% of Streaming Supply NEW YORK, April 23, 2025 (GLOBE NEWSWIRE) -- Magnite (NASDAQ: MGNI), the largest independent sell-side advertising company, today unveiled the next generation of its SpringServe video platform, a CTV/OTT solution combining its award-winning SpringServe ad server with the advanced programmatic capabilities of the Magnite Streaming SSP. Initial clients to include Disney Advertising, LG Ad Solutions, Pa ...

Core Viewpoint - The Trade Desk (TTD) has significantly underperformed in the digital advertising sector, with a year-to-date decline of 52.9%, compared to the broader Computer & Technology sector's decline of 10% and the Internet Services industry's decrease of 13.8% [1][3]. Group 1: Performance Analysis - TTD's underperformance is attributed to slower adoption of its next-generation platform, Kokai, and a complex reorganization [2]. - Despite the challenges, TTD has seen a record-breaking spend of over $12 billion on its platform in Q4 2024, indicating strong advertiser demand [2]. Group 2: Growth Drivers - TTD's focus on Connected TV (CTV) remains a key growth driver, with CTV being its largest and fastest-growing channel [5]. - The company is leveraging Unified ID 2.0 (UID2) to enhance precision and addressability in programmatic advertising on CTV [5][6]. - The introduction of the Ventura Operating System aims to improve efficiency and transparency in CTV advertising, enhancing data management and targeting capabilities [8]. Group 3: Strategic Acquisitions - TTD's acquisition of Sincera in January 2025 is expected to strengthen its programmatic advertising platform by integrating actionable insights on data quality [10]. Group 4: Partnerships and Client Base - TTD has established extensive partnerships with industry leaders such as Disney, NBCU, Walmart, Roku, LG, Fox, and Netflix, which bolster its market position [11]. Group 5: Financial Outlook - TTD anticipates revenues of at least $575 million in Q1 2025, with a Zacks Consensus Estimate of $576.13 million, reflecting a year-over-year increase of 17.28% [12]. - The Zacks Consensus Estimate for Q1 2025 earnings is 26 cents per share, remaining unchanged over the past 30 days [12]. Group 6: Valuation Concerns - TTD is currently trading at a premium, with a forward 12-month Price/Sales ratio of 8.79X compared to the industry average of 4.61X, indicating a stretched valuation [13].

Financial Data and Key Metrics Changes - Revenue in Q4 2024 increased 14% to $153 million, with a 40% adjusted EBITDA margin [6][37] - Full year 2024 revenue grew 12% to $530.1 million, achieving a 36% adjusted EBITDA margin [6][38] - Adjusted EBITDA for Q4 increased 29% to $61.4 million, with a margin increase from 35% to 40% year-over-year [44][49] - Net income for Q4 was $15.3 million or $0.09 per share, compared to $10.2 million or $0.06 per share in Q4 2023 [45][49] Business Line Data and Key Metrics Changes - Optimization revenue grew 11% to $70.6 million in Q4 [39] - Measurement revenue increased 12% to $59.1 million, with social media revenue growth at 25% [40] - Publisher revenue rose 30% to $23.4 million, driven by new product adoption and increased political spend [41] - International revenue grew 13% to $49 million, representing 32% of total revenue [42] Market Data and Key Metrics Changes - 32% of Q4 revenue came from markets outside of the Americas, with 45% of measurement revenue from international sources [17][42] - The US CTV market is projected to exceed $47 billion by 2028, indicating significant growth potential [15] Company Strategy and Development Direction - The company aims for continued double-digit growth in 2025, focusing on performance, reach expansion, and innovation [7][27] - Plans to expand into China and enhance operations in key APAC markets, unlocking significant digital ad spend opportunities [18][69] - The introduction of new capabilities in measurement and optimization products is expected to drive future growth [7][27] Management's Comments on Operating Environment and Future Outlook - Management noted a positive impact from political spending on the publisher side, while advertiser spending improved in retail and CPG sectors [104] - The shift towards real-time bidding in CTV is viewed as a tailwind for the business, with strong growth in publisher performance [105][106] - The company expects to deliver double-digit profitable growth in 2025, supported by ongoing investments in differentiated products [33][50] Other Important Information - The appointment of Jill Puttman as interim CFO was announced, bringing extensive finance experience to the role [34][83] - The company reduced long-term debt by $30 million to $35 million during the quarter [46] Q&A Session Summary Question: Impact of political spending and CTV shift - Political spending had limited impact on advertiser business but benefited the publisher side, with strong growth in retail and CPG [104] - The shift to real-time bidding in CTV is seen as beneficial, with a 30% year-over-year growth in the segment [105][106] Question: Pricing dynamics and measurement growth - The company experienced competitive pricing dynamics during RFPs, with strong adoption of total media quality (TMQ) across social platforms [110][111] - The pre-bid product on Meta has shown a 71% reduction in wasted ad spend, indicating strong early adoption [115] Question: Long-term visibility with pre-bid and post-bid products - The focus on performance and linking media quality signals with cost data enhances revenue forecasting and visibility [124][125] - The company is seeing strong adoption of pre-bid products, which is expected to improve overall business visibility [124] Question: Growth outlook by segment - Total advertiser revenue is expected to have double-digit growth, with measurement anticipated to see single-digit growth initially [128]

Financial Data and Key Metrics Changes - Revenue growth for 2024 was 9% over 2023, more than doubling the previous year's growth rate [10][45] - Adjusted EBITDA margins expanded to 32%, marking a return to the "Rule of 40" benchmark [11][46] - Q4 revenue, excluding a specific DSP impact and political advertising, increased by 16% year-over-year [12][39] - Full-year net income was $12.5 million, or $0.23 per diluted share [56] Business Line Data and Key Metrics Changes - CTV revenue more than doubled in 2024, representing 20% of total revenue in Q4 [45][52] - Mobile app business grew 16% year-over-year, also accounting for 20% of total revenue [45] - Emerging revenue streams doubled in 2024, with Connect, the curation and data business, growing 140% year-over-year [53][96] Market Data and Key Metrics Changes - Omni-channel video revenue reached over 40% in Q4, with half coming from CTV [20] - The company now works with 80% of the top 30 global streamers, up from 70% a quarter ago [21][103] - Political advertising contributed approximately 6% of total revenue in 2024 [68] Company Strategy and Development Direction - The company is focusing on high consumer engagement channels such as CTV, mobile app, and commerce media to drive growth [14][40] - Investments in product innovation and generative AI are expected to enhance operational efficiency and customer engagement [17][36] - The strategy includes diversifying revenue streams and increasing the value of ad impressions through data curation [34][95] Management's Comments on Operating Environment and Future Outlook - Management anticipates a challenging first half of 2025 due to a DSP headwind but expects underlying business growth of 15%+ year-over-year [61][72] - The company is confident in its ability to execute its growth strategy and deliver healthy margins [72] - The shift towards sell-side targeting is seen as a significant opportunity, driven by the decline of third-party cookies [90][92] Other Important Information - The company ended 2024 with $141 million in cash and marketable securities and no debt [48][60] - A share repurchase program has resulted in an 8% reduction in fully diluted shares outstanding [48][60] - The company is targeting a full-year adjusted EBITDA margin in the high 20% range for 2025 [70] Q&A Session Summary Question: Can you talk about month-on-month trends and overall CPM trends? - Management noted that the softness in Q4 was primarily due to one DSP's bidding changes, while CPMs were positive throughout the year [76][78] Question: Why is the impact limited to display, and is there a need to address the relationship with the DSP? - The impact is due to a structural change in the DSP's bidding approach, which has historically affected display formats [84][86] Question: What are the secular shifts in the industry driving the data opportunity? - The industry is shifting towards sell-side targeting due to the decline of cookies and the strength of first-party data [90][92] Question: Can you discuss the success and growth of Activate? - Activate has seen 6x growth year-over-year, simplifying the digital advertising supply chain and driving performance [112][114] Question: What is the outlook for CTV and its evolution? - CTV is transitioning towards programmatic buying, with significant opportunities in auction packages and managing yield for publishers [134][136]

Financial Data and Key Metrics Changes - Magnite generated contribution ex-TAC of $607 million and processed ad spend of over $6 billion, achieving record highs for the company [9][10] - Adjusted EBITDA reached $197 million, with free cash flow of $118 million, both record figures [10][39] - Total revenue for Q4 was $194 million, up 4% from Q4 2023, while contribution ex-TAC was $180 million, an increase of 9% [39][40] - Net income for the quarter was $36 million, compared to $31 million for Q4 2023, with GAAP earnings per diluted share increasing 50% to $0.24 [45][46] Business Line Data and Key Metrics Changes - CTV contribution ex-TAC increased 23% year-over-year, while DV+ contribution ex-TAC grew only 1% due to unusual spending patterns post-election [11][40] - CTV accounted for 43% of contribution ex-TAC, with mobile at 40% and desktop at 17% [41] - The company reported strong growth in CTV driven by ad spend growth and a stabilizing year-over-year average take rate [12] Market Data and Key Metrics Changes - Significant growth in CTV was noted from partners like Roku, LG, Vizio, and Netflix, with expectations for continued growth in live sports [13][14] - The DV+ business experienced a post-election spending pause, leading to a drop in CPMs by 15% to 20% [36][37] - Political advertising contributed approximately 6.5% to contribution ex-TAC in Q4, while for the full year it was 3.2% [41][123] Company Strategy and Development Direction - The company is focused on expanding its CTV platform and enhancing its technology stack, including the introduction of generative AI tools [20][21] - Magnite aims to differentiate itself from competitors by emphasizing its unique technology and direct relationships with major streaming platforms [24][30] - The company is optimistic about the growth of its agency marketplaces and the potential for new revenue streams from data initiatives [16][73] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the rebound of the DV+ business and the overall strength of the CTV market [17][38] - The company anticipates total contribution ex-TAC to grow above 10% in 2025, with adjusted EBITDA expected to grow in the mid-teens [51][52] - Management highlighted the importance of maintaining a healthy value exchange between buyers and sellers in the open Internet ecosystem [31][87] Other Important Information - The company ended the year with $483 million in cash and a net leverage ratio reduced to 0.4% [39][48] - Capital expenditures for 2024 were $52 million, with expectations of approximately $60 million for 2025, primarily focused on tech stack efficiency [47][80] Q&A Session Summary Question: Context on Q1 guidance and early 2025 trends - Management noted a rebound in DV+ growth in the mid to high single digits, while CTV typically sees lower growth in Q1 [56][57] Question: SMB participation in CTV - Management indicated that new entrants need to couple CTV ads with DV+ metrics to assess efficacy, highlighting a significant appetite for CTV [60][62] Question: Medium-term growth expectations for CTV - Management expects to outpace market growth, projecting closer to 20% CTV growth when excluding political contributions [66][72] Question: GenAI strategy and CapEx implications - The focus of new tools is to enhance existing client efficiency and revenue, with CapEx aimed at optimizing tech stack costs [78][80] Question: OpenPath economics and CPM pressures - Management clarified that OpenPath does not significantly change publisher revenue, and CPMs dropped due to reduced demand in Q4, with a rebound seen in early 2025 [94][96] Question: CTV business mix and future contributions - Management expects a stable mix in CTV revenue, with potential shifts as more publishers rely on Magnite for demand [128][130]