Digital advertising platform Magnite (NASDAQ: MGNI) reported Q3 CY2025 results topping the market’s revenue expectations, with sales up 10.8% year on year to $179.5 million. Its non-GAAP profit of $0.20 per share was in line with analysts’ consensus estimates.

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“Magnite once again exceeded total top-line expectations, delivering an exceptional CTV result, with growth of 18%, or 25% excluding political. Our CTV success is being driven by our largest publisher partners and strong agency and DSP momentum. ClearLine, buyer marketplaces, and live sports remain bright spots in CTV. We are also seeing early benefits from our streamer.ai acquisition. The additional AI tools have supported new business wins, particularly among SMB advertisers, further enhancing our competitive positioning. DV+ continues to perform well, growing in line with expectations, driven by exclusive partner expansion. We were encouraged by the Google remedies hearings and look forward to the positive impact on our DV+ business once remedies are implemented.” said Michael G. Barrett, CEO of Magnite.

Company Overview

Born from the 2020 merger of Rubicon Project and Telaria, Magnite (NASDAQ: MGNI) operates the world's largest independent sell-side advertising platform that automates the buying and selling of digital advertising inventory across all channels and formats.

Revenue Growth

A company’s long-term performance is an indicator of its overall quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul.

With $702.6 million in revenue over the past 12 months, Magnite is a small player in the business services space, which sometimes brings disadvantages compared to larger competitors benefiting from economies of scale and numerous distribution channels. On the bright side, it can grow faster because it has more room to expand.

As you can see below, Magnite grew its sales at an incredible 30.2% compounded annual growth rate over the last five years. This is a great starting point for our analysis because it shows Magnite’s demand was higher than many business services companies.

We at StockStory place the most emphasis on long-term growth, but within business services, a half-decade historical view may miss recent innovations or disruptive industry trends. Magnite’s annualized revenue growth of 7.5% over the last two years is below its five-year trend, but we still think the results suggest healthy demand.

This quarter, Magnite reported year-on-year revenue growth of 10.8%, and its $179.5 million of revenue exceeded Wall Street’s estimates by 0.9%.

Looking ahead, sell-side analysts expect revenue to grow 13.5% over the next 12 months, an improvement versus the last two years. This projection is noteworthy and indicates its newer products and services will fuel better top-line performance.

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Operating Margin

Although Magnite was profitable this quarter from an operational perspective, it’s generally struggled over a longer time period. Its expensive cost structure has contributed to an average operating margin of negative 8.3% over the last five years. Unprofitable business services companies require extra attention because they could get caught swimming naked when the tide goes out.

On the plus side, Magnite’s operating margin rose by 31.9 percentage points over the last five years, as its sales growth gave it operating leverage. Still, it will take much more for the company to show consistent profitability.

This quarter, Magnite generated an operating margin profit margin of 14%, up 4.6 percentage points year on year. This increase was a welcome development and shows it was more efficient.

Earnings Per Share

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

Magnite’s EPS grew at an astounding 65.2% compounded annual growth rate over the last five years, higher than its 30.2% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.

We can take a deeper look into Magnite’s earnings quality to better understand the drivers of its performance. As we mentioned earlier, Magnite’s operating margin expanded by 31.9 percentage points over the last five years. This was the most relevant factor (aside from the revenue impact) behind its higher earnings; interest expenses and taxes can also affect EPS but don’t tell us as much about a company’s fundamentals.

Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.

For Magnite, its two-year annual EPS growth of 32.5% was lower than its five-year trend. We still think its growth was good and hope it can accelerate in the future.

In Q3, Magnite reported adjusted EPS of $0.20, up from $0.17 in the same quarter last year. This print beat analysts’ estimates by 2.6%. Over the next 12 months, Wall Street expects Magnite’s full-year EPS of $0.86 to grow 23.3%.

Key Takeaways from Magnite’s Q3 Results

It was good to see Magnite narrowly top analysts’ revenue expectations this quarter. We were also glad its EPS was in line with Wall Street’s estimates. Overall, this print had some key positives. The stock remained flat at $17.30 immediately after reporting.

Should you buy the stock or not? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free for active Edge members.