Magnite Inc (MGNI) Posts Mixed Q3 2023 Results with Revenue Growth and Net Loss Improvement
Total revenue increased by 3% year-over-year to $150.1 million in Q3 2023.
Contribution ex-TAC grew by 4% year-over-year, with a notable 20% growth in CTV ad spend.
Net loss improved by 28%, with a reduced loss per share from $0.18 to $0.13.
Adjusted EBITDA margin contracted by 5 percentage points year-over-year to 30%.
On November 8, 2023, Magnite Inc (NASDAQ:MGNI), the world's largest independent sell-side advertising company, released its third-quarter earnings report for the period ending September 30, 2023. The company reported a modest revenue increase and a significant improvement in net loss compared to the same quarter in the previous year.
Financial Performance Overview
Magnite Inc (NASDAQ:MGNI) reported a total revenue of $150.1 million for Q3 2023, marking a 3% increase from the $145.8 million recorded in Q3 2022. The company's Contribution ex-TAC, which excludes traffic acquisition costs, also saw a 4% rise to $133.1 million. Notably, the Contribution ex-TAC attributable to Connected TV (CTV) decreased by 6% year-over-year to $52.5 million, while Digital Video and other channels (DV+) experienced a 12% increase to $80.7 million.
The net loss for the quarter improved by 28%, with the company reporting a loss of $17.5 million, or $0.13 per share, compared to a net loss of $24.4 million, or $0.18 per share, in the same period last year. Adjusted EBITDA was $40.3 million, representing a 30% margin, a decrease from the $44.4 million, or 35% margin, reported in Q3 2022. Non-GAAP earnings per share were $0.12, down from $0.18 in the prior-year quarter.
Balance Sheet and Cash Flow Highlights
The balance sheet of Magnite Inc (NASDAQ:MGNI) as of September 30, 2023, showed $310.5 million in cash and cash equivalents, a slight decrease from $326.3 million as of December 31, 2022. Accounts receivable stood at $937.2 million, while total current assets amounted to $1.27 billion. The company's total assets were valued at $2.45 billion.
Current liabilities included $1.1 billion in accounts payable and accrued expenses, with total current liabilities reaching $1.13 billion. Total liabilities were $1.79 billion, and stockholders' equity was $652.1 million.
Operating cash flow for the quarter was $31.8 million, and the company repurchased $34.5 million of convertible notes during the period, retiring approximately 31% of the total.
Market Position and Future Outlook
Michael G. Barrett, President and CEO of Magnite, commented on the company's performance, stating,
We exceeded our top line guidance in the third quarter, with contribution ex-TAC for CTV and DV+ both coming in above the high end of our guidance range. We continued to grow our market share in both DV+ and CTV. In fact, our CTV ad spend increased over 20% in the third quarter, strongly outpacing market growth estimates."
Looking ahead, Magnite Inc (NASDAQ:MGNI) expects total Contribution ex-TAC for Q4 2023 to be between $158 million and $162 million, with CTV's contribution forecasted to be between $61 million and $63 million. The company also anticipates high single-digit growth in total Contribution ex-TAC for the full year 2024, with CTV growing faster than DV+. Adjusted EBITDA margin is expected to expand by 50-100 basis points for 2024, with double-digit percentage growth in Adjusted EBITDA and even higher growth in free cash flow.
Magnite Inc (NASDAQ:MGNI) remains focused on expanding its market share and capitalizing on the growth opportunities within the CTV and programmatic advertising sectors. The company's strategic investments and cost management initiatives are aimed at driving long-term profitability and shareholder value.
For detailed financial tables and further information, readers are encouraged to visit the full earnings release on Magnite's investor relations website.
Explore the complete 8-K earnings release (here) from Magnite Inc for further details.
This article first appeared on GuruFocus.
