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Magnite (MGNI) Expands Its Existing Deal With Horizon Media

Magnite MGNI recently announced that it is expanding its existing relationship with Horizon Media to focus on supply path optimization, which will bring significant efficiency gains for advertisers and the marketplace as a whole.

The company will be encompassing Horizon Media’s efforts to consolidate purchases across all formats including CTV, online video, display, mobile and audio. Magnite, which is the most trusted, transparent, and effective technology provider, will be a preferred supply-side platform of Horizon Media for the private marketplace and programmatic guaranteed CTV deals.

The supply side and the buyer side coming together to work creates a huge opportunity to deliver improved outcomes for marketers, especially in the CTV segment that has been gaining huge traction.

Magnite’s CTV Business Expected to Grow

Along with the deal with Horizon Media, Magnite has been winning other clients that are likely to serve as future drivers of its CTV business.

Recently, Vizio leveraged SpringServe, the leading independent TV ad-serving platform of Magnite, to enhance the content discovery experience across VIZIO SmartCast for millions of users in the United States.

SpringServe’s advanced ad-serving functionality, including targeting and reporting, gives publishers workflow efficiency and flexibility to showcase custom creatives within the streaming interface in various sizes and a wide variety of formats.

Fox Corporation FOXA also announced a partnership with Magnite to serve as a sell-side advertising platform connected to the OneFOX inventory.

Together, they will build custom technology solutions that further streamline the buying process and enable advertisers to create one simple and unified plan to deliver their private marketplace and programmatic guaranteed campaigns across the FOX portfolio.

Magnite, Inc. Price and Consensus

Magnite, Inc. Price and Consensus
Magnite, Inc. Price and Consensus

Magnite, Inc. price-consensus-chart | Magnite, Inc. Quote

Magnite has also been selected as one of the inaugural CTV platforms to support Kroger's KR retail media advertising business, Kroger Precision Marketing. This will enable advertisers to package Kroger's first-party data with Magnite's premium omnichannel inventory with an emphasis on CTV but spanning all formats, including display and online video.

LG ads solution also signed a multi-year deal with Magnite. Through the deal, ACR data from opted-in LG smart TVs in the United States will be made available across Magnite’s U.S. inventory footprint and will expand to other countries starting in 2023.

This technology built into connected TVs that captures everything that is viewed — both content and ads — is extremely valuable and unlocks unique capabilities such as targeting around content viewership, incremental reach and frequency management across both linear and streaming environments within the household.

Magnite continues to be a strategic programmatic technology partner of Disney DIS. Together, they are expected to focus on shifting more streaming inventory into a biddable programmatic environment.

The company’s collaboration with GroupM continues to scale and gain momentum as well. It is witnessing new advertiser demand across OTT on all screens, including mobile and CTV. In the third-quarter fiscal 2022, revenues ex-TAC, attributable to CTV, were $56 million, up from $43 million or 29% year over year.

With these partnerships expecting to boost the company’s top line, Magnite has projected fourth-quarter fiscal 2022 revenues ex-TAC to be in the range of $151-$157 million and ex-TAC attributable to CTV to be in the range of $63-$65 million.

 

Headwinds

However, this Zacks Rank #4 (Sell) company does face headwinds that can affect these projections. Magnite’s business depends on the overall demand for advertising and the economic health of the current and prospective sellers and buyers. This has been and might even continue to be affected by events such as health epidemics, including the COVID-19 pandemic and geopolitical events, including the conflict in Ukraine.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here

The company has recently experienced some downward pressure due to global supply chain disruptions, inflationary concerns, global hostilities, recessionary concerns and other macroeconomic factors, which have generally negatively impacted ad budgets.

Magnite also expects some slight margin compression in the coming year with the higher tech stack costs as it completes the CTV platform client migration.

Shares of Magnite have declined 39.8% year to date compared with the Zacks Computer and Technology Sector, which declined 31.7%.


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