SSPs are having a moment.
After PubMatic wowed investors earlier this week, on Wednesday, Magnite, the rolled up Rubicon Project and Telaria SSP, announced strong Q4 2020 earnings, exceeding estimates.
Compared to Q4 2019, Magnite’s revenue rose nearly 70% (69%) to $82 million, beating estimates by as much as $10 million. Meanwhile, the company’s adjusted EBITDA increased to $30 million — almost doubling the $15.3 million EBITDA for the fourth quarter of 2019. On the year, Magnite’s revenue hit $221.6 million, a 42% increase over the prior year.
CTV was key for Magnite’s growth. Full year 2020 total video revenue — CTV and online video — was $106 million or 45% of total revenue.
“As linear TV spend accelerates its move to ad-supported CTV, we believe growth from this secular trend will fuel our growth for the foreseeable future,” said President and CEO Michael Barrett in the company’s earnings release.
Magnite anticipates even greater growth in the video sector, especially with the recent acquisition of SpotX. According to Magnite, SpotX’s revenue in 2020 was $116 million, of which $67 million was from CTV.
“SpotX is an important strategic win for Magnite and our customers, and is fast growing and highly profitable,” added Barrett. “Following the closing of the pending acquisition of SpotX, CTV and OLV formats would represent two-thirds of our total company revenue, which would further improve our position in the fastest growing segments of the programmatic marketplace.”
Together, Magnite and SpotX clients include a number of top broadcasters and content companies, ranging from A+E Networks and Disney/Hulu to Roku and ViacomCBS.
During the Q&A portion of the earnings call, Barrett also spoke to the need for CTV measurement to improve at large in order to meet demand and keep advertisers happy. The ecosystem is fragmented, walled gardens abound and measurement standards are still in-progress.
“I think we, as an industry, have to get our measurement house in order, and that’s more of an ecosystem thing than a Magnite thing,” he said. “But we have to figure out how it is that marketers who have spent the last 50 years advertising on TV and relying upon household audience numbers and gross rating points, how does that translate to CTV? And how are they able to know that they’re selling boxes of Tide, right? So all those things take a little bit of evolution.”
Magnite expects its strong revenue growth to continue in Q1 2021, with revenue between $58 to $62 million.
