Magnite, Inc. Q1 FY2026 earnings call

• Strong first quarter with revenue and profitability exceeding expectations; CTV outperformed guide, DV+ declined but better than expected. • CTV contribution ex-TAC grew 30% y-o-y, representing 51% of total, with broad-based growth across leading publishers and top 10 accounts growing mid-30% y-o-y. • SpringServe evolved into operating system for CTV monetization, unifying demand, optimizing yield, etc. • Live sports saw over 80% y-o-y revenue growth from March Madness. • Commerce media emerging as important driver with partnerships like Expedia Group, Walmart Connect, etc. • DV+ declined 5% but trends improved exiting Q1 and into Q2 with signs of stabilization. • AI embedded across platform to improve media buying and selling, with AI enhancing inventory valuation, campaign execution, etc. • David L. Day announced retirement after 13 years of service, remaining in role through September 30.

Total revenue for Q1 was $164 million, up 6% from Q1 2025. Contribution ex-TAC was $161 million, up 10% at the high end of guidance range. CTV contribution ex-TAC was $82 million, up 30% year-over-year, representing 51% of total. DV+ contribution ex-TAC was $79 million, a decrease of 5% from Q1 2025. Contribution ex-TAC mix for Q1 was 51% CTV, 34% mobile, and 15% desktop. Overall verticals: health and fitness, retail, and food and beverage were strongest; automotive and technology were weakest.

• Q2 contribution ex-TAC expected to be $177M - $181M (9% - 12% growth); CTV contribution ex-TAC $90M - $92M (26% - 29% growth); DV+ contribution ex-TAC $87M - $89M (4% - 2% decline). • Q2 Adjusted EBITDA operating expenses expected $115M - $117M, implying Adjusted EBITDA margin 34% - 36%. • Full year 2026: reaffirms total contribution ex-TAC growth at least 11%, Adjusted EBITDA percentage growth mid-teens, Adjusted EBITDA margin at least 35.5% (up from >35%), free cash flow growth mid-30% range, CapEx ~$60M (reduction from prior year). • Estimates do not include potential market share gains from Google AdTech remedies. • No significant increases in cash taxes expected.

Q: Daniel Louis Kurnos asked about DV+ stabilization, commerce media wins, and impact of Summer World Cup.

A: Michael G. Barrett said DV+ showed stabilization with growth in mobile in-app, commerce media, etc., and World Cup will be a good catalyst for revenue.

Q: Shyam Vasant Patil asked about macro impact, CTV growth sustainability, and secular profile for desktop and mobile.

A: David L. Day said macro had some impact in certain verticals, Michael G. Barrett said CTV growth is sustainable and DV+ has high-growth areas.

Q: Jason Michael Kreyer asked about AI demand and adoption, and durability of EBITDA OpEx savings.

A: Michael G. Barrett said AI will drive workflow and productivity, David L. Day said savings are durable with more to come.

Q: Laura Anne Martin asked about agentic replacing software companies and pricing power with AI.

A: Michael G. Barrett said AI enables seamless execution and there is upside with pricing, David L. Day said CTV take rates are stabilizing with value-add.

Q: Analyst with B. Riley asked about commerce media scale and live sports penetration.

A: Michael G. Barrett said commerce media is growing with partners and live sports is a sizable opportunity with low penetration currently.

Q: Shweta Khajuria asked about OpenPath impact and EBITDA in second half of 2026.

A: Michael G. Barrett said OpenPath impact was neutral, David L. Day said EBITDA margin is increasing with revenue upside flowing to free cash flow.

Q: Robert James Coolbrith asked about AI creative generation and monetizing AI engine inventory.

A: Michael G. Barrett said SpringServe Streamr product is taking off, and monetizing AI engine inventory is early but promising.

Q: Matthew John Swanson asked about CTV vs DV+ reallocation of budget and its impact.

A: Michael G. Barrett said reallocation is a headwind but DV+ is a grower with revenue balance shifting to more CTV.

Q: Analyst with Lake Street Capital Markets asked about incremental margins on CTV vs DV+.

A: David L. Day said incremental margins are generally equal with no significant headwinds from CTV mix shift.