Connected TV Helps Buoy Magnite's Rocky Q2 Results

Magnite saw a roughly 24% year-over-year decline in second-quarter revenue amid the coronavirus pandemic, but its business was buoyed by rapid growth in the connected TV space. Rubicon Project and Telaria officially merged in April to create the largest independent supply-side platform and then rebranded in June, and this is the company’s first earnings report under the Magnite name. Magnite reported quarterly revenue of $42.3 million, a 12% increase from Rubicon Project’s results during the same period last year. Telaria’s revenue for that period was $18.2 million, but that total was not included in the year-over-year comparison. Magnite president and CEO Michael Barrett said revenue in April and early May fell by 30% compared with last year’s combined results. By June, revenue declined by 17% year over year, and since the start of July, revenue is roughly equal to last year’s combined numbers. While programmatic has shown some signs of life since the advertising doldrums of the early days of the pandemic in the U.S., ad-tech companies are still seeing significant revenue drops. The Trade Desk, the largest independent demand-side platform, reported $139.4 million in Q2 revenue on Thursday, a 13% year-over-year decline, and PubMatic, a privately held SSP, said its Q2 revenue suffered a 4% year-over-year drop. CTV paying early dividends “We are pleased to see a meaningful recovery in revenue across our entire business, specifically with the pace of year over year growth in CTV to start the third quarter," Barrett said in a statement. "This follows our first full post-merger quarter creating an industry leading CTV and full service SSP. Programmatic ad-supported CTV is benefiting from the acceleration of cord cutting, buyers wanting more flexibility and control of their spend, inventory growth and overall consumer adoption rates.” The company’s CTV revenue for the quarter was $7.9 million, up 12% from last year’s combined numbers. Magnite CFO David Day said CTV revenue was completely additive due to the acquisition of Telaria, which specialized in CTV. Other channels saw steep declines, which Day attributed to advertisers pulling back spend during the pandemic. Mobile and desktop revenues declined 32% and 26%, respectively, compared to last year’s combined numbers. Barrett said continuing to invest in CTV, the company’s fastest growing area, is a top priority. Another priority is growing out Demand Manager, a tool that helps publishers implement header bidding through prebid. Magnite now has contracts with 172 publishers for the product, up from 156 customers last quarter. Barrett said the long-term goal is to combine the Demand Manager technology with the CTV technology to create a single platform for publishers. Before the outbreak, Magnite projected Demand Manager would contribute $5 million in revenue by the end of the year, but that likely won’t be the case now. “At this point, I don't think we're gonna hit those levels, but I think we're going to be better positioned for 2021,” Day said. Magnite is projecting third-quarter revenue to be between $51 million and $55 million.