MGNI

Magnite has emerged from its post-SpotX/SpringServe investment trough into durable profitability. After GAAP losses of -$130M (2022) and -$159M (2023), the company posted $22.8M net income in 2024 and $145M in 2025, with operating income up 91% to $97.6M and Adjusted EBITDA up 18% to $232M. The MD&A makes clear what is driving this: CTV is now 'the biggest growth driver,' with CTV revenue +9% and Contribution ex-TAC +17% year-over-year, against a backdrop where the legacy open-web desktop/mobile business is in structural decline (management explicitly expects open-web display to keep falling 'consistent with the overall decline in search referral traffic'). The headline 6.9% total revenue growth therefore understates the mix shift toward the higher-quality, higher-take CTV business.

Valuation is reasonable rather than stretched. The 20.1x P/E on $0.95 diluted EPS overstates richness because the $145M net income (+535%) sits well above the $97.6M of operating income — a sign of below-the-line/tax tailwinds rather than pure operating power. The cleaner reads are kinder: EV (~$2.76B market cap + ~$556M total debt − $553M cash) against $232M Adjusted EBITDA is roughly 12x, and operating cash flow of $236M less $70.5M capex yields ~$165M of free cash flow, a ~6% FCF yield, part of which is being returned via $46.3M of buybacks. For a CTV-levered platform compounding Contribution ex-TAC in the mid-teens, that is a fair-to-attractive price.