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Magnite (MGNI)

Magnite is the world's largest independent sell-side advertising platform that combines Rubicon Project's programmatic expertise with Telaria's leadership in CTV. Publishers use its technology to monetize their content across all screens and formats-including desktop, mobile, audio and CTV. And the world's leading agencies and brands trust its platform to access brand-safe, high-quality ad inventory and execute billions of advertising transactions each month. Anchored in sunny Los Angeles, bustling New York City, historic London, and down under in Sydney, Magnite has offices across North America, EMEA, LATAM and APAC.

Company profile

Ticker
MGNI
Exchange
Website
CEO
Michael Barrett
Employees
Incorporated
Location
Fiscal year end
Former names
RUBICON PROJECT, INC.
SEC CIK
Subsidiaries
Magnite CTV, Inc. • SpotX, Inc. • Magnite Australia PTY Limited • Magnite Servicos De Internet Ltda • Magnite SARL • Magnite GmbH • Magnite S.R.L. • Magnite K.K. • The Rubicon Project Netherlands B.V. • Magnite Singapore Pte Ltd. ...
IRS number
208881738

MGNI stock data

Calendar

4 May 22
29 Jun 22
31 Dec 22
Quarter (USD) Mar 22 Dec 21 Sep 21 Jun 21
Revenue
Cost of revenue
Operating income
Operating margin
Net income
Net profit margin
Cash on hand
Change in cash
Diluted EPS
Annual (USD) Dec 21 Dec 20 Dec 19 Dec 18
Revenue
Cost of revenue
Operating income
Operating margin
Net income
Net profit margin
Cash on hand
Change in cash
Diluted EPS
Cash burn rate (est.) Burn method: Change in cash Burn method: Operating income Burn method: FCF (opex + capex)
Last Q Avg 4Q Last Q Avg 4Q Last Q Avg 4Q
Cash on hand (at last report) 204.88M 204.88M 204.88M 204.88M 204.88M 204.88M
Cash burn (monthly) 8.6M 21.98M 15.53M 10.24M (no burn) (no burn)
Cash used (since last report) 25.52M 65.2M 46.08M 30.38M n/a n/a
Cash remaining 179.36M 139.69M 158.81M 174.51M n/a n/a
Runway (months of cash) 20.8 6.4 10.2 17.0 n/a n/a

Beta Read what these cash burn values mean

Date Owner Security Transaction Code Indirect 10b5-1 $Price #Shares $Value #Remaining
7 Jun 22 Frankenberg Robert J Common Stock Grant Acquire A No No 0 16,489 0 105,347
7 Jun 22 Spillane Robert F Common Stock Grant Acquire A No No 0 16,489 0 105,347
7 Jun 22 Troe Lisa L Common Stock Grant Acquire A No No 0 16,489 0 119,989
7 Jun 22 Harden Sarah Patricia Common Stock Grant Acquire A No No 0 16,489 0 111,369
7 Jun 22 Knopper Douglas S Common Stock Grant Acquire A No No 0 16,489 0 121,545
18.8% owned by funds/institutions
13F holders Current Prev Q Change
Total holders 2 2
Opened positions 0 0
Closed positions 0 0
Increased positions 0 0
Reduced positions 0 0
13F shares Current Prev Q Change
Total value 819.18M 819.18M
Total shares 24.75M 24.75M
Total puts 0 0
Total calls 0 0
Total put/call ratio
Largest owners Shares Value Change
Bertelsmann SE & Co. KGaA 12.37M $495.59M 0.0%
RTL Group GmbH 12.37M $323.59M 0.0%
Largest transactions Shares Bought/sold Change
Bertelsmann SE & Co. KGaA 12.37M 0 0.0%
RTL Group GmbH 12.37M 0 0.0%

Financial report summary

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Competition
CanadaDigital TurbineTeamAT&TComcastCriteo S.ATaboola.com
Risks
  • Risks Related to Recent Mergers and Acquisitions
  • We may not be able to achieve anticipated cost savings or other anticipated benefits of the Telaria Merger, SpotX Acquisition and other acquisitions.
  • Any acquisitions we undertake may disrupt our business, adversely affect operations, dilute stockholders, and expose us to costs and liabilities.
  • Risks Related to COVID-19
  • The recent COVID-19 pandemic and spread of COVID-19 has impacted and may have material adverse effects on our business, financial position, results of operations and/or cash flows.
  • Risks Related to Our Business, Growth Prospects and Operating Results
  • If CTV advertising spend grows more slowly than we expect our operating results and growth prospects could be harmed.
  • If CTV sellers fail to adopt programmatic advertising solutions, or adopt such solutions more slowly that we expect, our operating and growth prospects could be harmed.
  • We may be unsuccessful in our Supply Path Optimization efforts.
  • Some of our product offerings require significant upfront investments, have long on-boarding and ramp-up periods, and may not be successful.
  • Our technology development efforts may be inefficient or ineffective, which may impair our ability to attract buyers and sellers.
  • The emergence of header bidding has increased competition from other demand sources and may cause infrastructure strain and added cost.
  • We must increase the scale and efficiency of our technology infrastructure to support our growth and transaction volumes.
  • Our belief that there is significant and growing demand for reserve auctions may be inaccurate, and we may not realize a return from our investments in that area.
  • We have invested heavily in our mobile technology, which poses additional risks that did not affect our legacy desktop display business. To the extent our access to mobile inventory is limited by third-party technology or lack of direct relationships with mobile sellers, our ability to grow our business will be impaired.
  • Fee issues have in the past and could in the future have a material adverse effect on our business.
  • Our take rates may be difficult to forecast and may decrease in future periods; any decrease in our take rates may result in a decrease in our revenue notwithstanding an increase in the amount of spend transacted through our platform.
  • We have a history of losses and we face many risks that may prevent us from achieving or sustaining profitability in the future.
  • Our business and the businesses of our advertiser clients may be subject to sales and use tax, advertising and other taxes.
  • As a result of various factors, our operating results have in the past and may in the future fluctuate significantly, be difficult to predict, and fall below analysts' and investors' expectations.
  • Risks Related to Financing Arrangements
  • Our financing of the SpotX Acquisition significantly increased our leverage, which may put us at greater risk of defaulting on our debt obligations and limit our ability to conduct necessary operating activities, make strategic investments, respond to changing market conditions, or obtain future financing on favorable terms.
  • Our Credit Agreement subjects us to operating restrictions and financial covenants that impose risk of default and may restrict our business and financing activities.
  • Conversion of our Convertible Senior Notes will dilute the ownership interest of existing stockholders, including holders who had previously converted their Convertible Senior Notes, or may otherwise depress the price of our common stock.
  • The Capped Call Transactions may affect the value of the Convertible Senior Notes and our common stock.
  • We are subject to counterparty risk with respect to the Capped Call Transactions.
  • The conditional conversion feature of the Convertible Senior Notes, if triggered, may adversely affect our financial condition and operating results.
  • Provisions in the indenture for the Convertible Senior Notes may deter or prevent a business combination that may be favorable to our stockholders.
  • Sales of our common stock by the former owner of SpotX may have an adverse effect on the price of our common stock.
  • Risks Related to the Advertising Technology Industry, Market, and Competition
  • Our revenue and operating results are highly dependent on the overall demand for advertising. Factors that affect the amount of advertising spending, such as economic downturns, can make it difficult to predict our revenue and could adversely affect our business.
  • The digital advertising market is relatively new. If this market develops more slowly or differently than we expect, our business, growth prospects and financial condition would be adversely affected.
  • We operate in an intensely competitive market that includes companies that have greater financial, technical and marketing resources than we do.
  • Risks Related to Our Collection, Use and Disclosure of Data
  • Our business depends on our ability to collect and use data to deliver advertisements, and to disclose data relating to the performance of advertisements. Any limitation imposed on our collection, use or disclosure of this data could significantly diminish the value of our solution and cause us to lose sellers, buyers, and revenue. Consumer tools, regulatory restrictions and technological limitations all threaten our ability to use and disclose data.
  • If cookies are replaced by alternative tracking mechanisms, our performance may decline and we may lose buyers and revenue.
  • Our belief that the elimination of third-party cookies will lead to an increased use of first-party publisher segments may be incorrect.
  • Risks Related to Regulation
  • Legislation and regulation of digital businesses, including privacy and data protection regimes, could create unexpected additional costs, subject us to enforcement actions for compliance failures, or cause us to change our technology solution or business model, which may have an adverse effect on the demand for our solution.
  • The GDPR and UK GDPR impose strict requirements for transferring personal data from the European Economic Area and United Kingdom to the United States and other countries, and regulatory guidance and case law on international transfers is continually evolving; this increases uncertainty and may require us to change our EEA and UK data practices and/or change our technology solution or business model, which may in turn adversely effect demand for our solution.
  • The GDPR and changes in U.S. laws impose new requirements for end user consent or opt-out that are not yet well understood.
  • In Europe, it remains unclear whether certain legal bases for data processing are permitted for behavioral advertising.
  • Legal uncertainty and industry unpreparedness may mean substantial disruption and inefficiency, demand constraints, and reduced inventory supply and value.
  • We are subject to regulation with respect to political advertising, which lacks clarity and uniformity.
  • Failure to comply with industry self-regulation could harm our brand, reputation, and our business.
  • Risks Related to Our Relationships with Buyers and Sellers and Other Strategic Relationships
  • We rely on buyers and sellers to abide by contractual requirements and relevant laws, rules, and regulations when using our solution. The acts or omissions of buyers or sellers, or our own failure to meet advertising and inventory content standards and provide services that our buyers and sellers trust, could harm our brand and reputation and those of our partners, and negatively impact our business, financial condition and results of operations.
  • Our contracts with buyers and sellers are generally not exclusive, may be terminated upon relatively short notice, and generally do not require minimum volumes or long-term commitments. If buyers or sellers representing a significant portion of the demand or inventory in our marketplace decide to materially reduce the use of our solution, we could experience an immediate and significant decline in our revenue and profitability and harm to our business.
  • We must provide value to both buyers and sellers of advertising without being perceived as favoring one over the other or being perceived as competing with them through our service offerings.
  • We rely on technological intermediaries such as DSPs to purchase advertising on behalf of advertisers. Such buyers may have or develop high-risk credit profiles or pay slowly, which may result in credit risk to us or require additional working capital to fund our accounts payable. In addition, direct billing arrangements between buyers and sellers may result in unfavorable fee dynamics and increased working capital demands.
  • Our sales efforts with buyers and sellers may require significant time and expense and may not yield the results we seek.
  • Our business relationships expose us to risk of substantial liability for contract breach, violation of laws and regulations, intellectual property infringement and other losses, and our contractual indemnities and limitations of liability may not protect us adequately.
  • Our solution relies on third-party open source software components. Failure to comply with the terms of the underlying open source software licenses could expose us to liabilities, and the combination of certain open source software with code that we develop could compromise the proprietary nature of our solution.
  • Risks Related to Our Operations
  • Real or perceived errors or failures in the operation of our solution could damage our reputation and impair our sales.
  • Various risks could interrupt access to our network infrastructure or data, exposing us to significant costs and other liabilities.
  • Any breach of our computer systems or confidential data in our possession could expose us to significant expense and liabilities and harm our reputation.
  • Failure to detect or prevent fraud, intrusion of malware through our platform into the systems or devices of our clients and their customers, or other actions that impact the integrity of our solution or advertisement performance, could cause sellers and buyers to lose confidence in our solution and expose us to legal claims, which would cause our business to suffer. If we terminate relationships with sellers as a result of our screening efforts, our volume of paid impressions may decline.
  • Failure to maintain the brand security features of our solution could harm our reputation and expose us to liabilities.
  • The evolving concept of viewability involves competitive uncertainty and may cause us to incur additional costs and liability risk.
  • If we fail to attract, motivate, train, and retain highly qualified engineering, marketing, sales and management personnel, our ability to execute our business strategy could be impaired.
  • Our proprietary rights may be difficult to enforce, which could enable others to copy or use aspects of our solution without compensating us, thereby eroding our competitive advantages and harming our business.
  • We may be subject to intellectual property rights claims by third parties, which are costly to defend, could require us to pay significant damages and could limit our ability to use certain technologies and intellectual property.
  • Risks Related to Our International Business Strategy.
  • Our international operations require increased expenditures and impose additional risks and compliance imperatives, and failure to successfully execute our international plans will adversely affect our growth and operating results.
  • Operating in multiple countries requires us to comply with different legal and regulatory requirements.
  • Risks Related to Our Internal Controls and Finances
  • If we fail to maintain an effective system of internal control over financial reporting in the future, we may not be able to accurately or timely report our financial condition or results of operations. If our internal control over financial reporting is not effective, it may adversely affect investor confidence in us and the price of our common stock.
  • Our ability to use our net operating losses and tax credit carryforwards to offset future taxable income may be subject to certain limitations, which could result in higher tax liabilities.
  • We may require additional capital to support our business, and such capital might not be available on terms acceptable to us, if at all. Inability to obtain financing could limit our ability to conduct necessary operating activities and make strategic investments.
  • The elimination of LIBOR after June 2023 may affect our financial results
  • Risks Related to the Securities Markets and Ownership of our Common Stock
  • The price of our common stock has been and may continue to be volatile and the value of an investment in our common stock could decline.
  • We cannot guarantee that our share repurchase program will enhance shareholder value, and share repurchases could affect the price of our common stock.
  • Competition for investors could adversely affect the price of our stock.
  • If securities or industry analysts do not publish, or cease publishing, research or reports about us, our business or our market, if they publish negative evaluations of our stock, or if we fail to meet the expectations of analysts, the price of our stock and trading volume could decline.
  • Provisions of our charter documents and Delaware law may inhibit a potential acquisition of the company and limit the ability of stockholders to cause changes in company management.
Management Discussion
  • Revenue increased $57.4 million, or 94%, for the three months ended March 31, 2022 compared to the three months ended March 31, 2021. Our revenue growth was driven primarily by organic growth as well as incremental revenue from the SpotX Acquisition, which was completed on April 30, 2021, and the SpringServe Acquisition, which was completed on July 1, 2021. Revenue increases were primarily driven by growth in CTV and mobile. On a pro forma basis, including revenue from SpotX and SpringServe during the relevant pre-acquisition period, revenue increased 6% for the three months ended March 31, 2022 compared to the prior year period.
  • We expect our revenue will increase through the remainder of 2022 compared to 2021. Our revenue is largely a function of the number of advertising transactions and the price, or CPM, at which the inventory is sold, which results in total advertising spend on our platform, and, with respect to our revenue reported on a net basis, the take rate we charge for our services. Because pricing and take rate vary across publisher, channel and transaction type, our revenue is impacted by shifts in the mix of advertising spend on our platform. We believe that contributions to revenue from reserve auctions, in particular with respect to CTV which is largely transacted on a reserved basis, will continue to grow as a percentage of our total revenue. In general, we expect this shift will have a positive impact on our revenue due to both an increase in the volume of transactions and average CPM, despite the fact that reserve auctions generally carry a lower take rate compared to open auction transactions.
  • Our revenue growth has been tempered, and may be negatively impacted in the future, by reductions in revenue resulting from the economic impact of the COVID-19 pandemic and other challenges, such as another pandemic or health crisis, geopolitical events (including the conflict in Ukraine), and other macroeconomic factors like labor shortages, supply chain disruptions, and inflation impacting the markets and communities in which we operate. Refer to Item 1A. "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2021 for additional information related to these risks.

Content analysis

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