Digital advertising platform Magnite (NASDAQ: MGNI) beat Wall Street’s revenue expectations in Q3 2026, with sales up 13.8% year on year to $204.2 million. Its non-GAAP profit of $0.33 per share was 16.9% above analysts’ consensus estimates.

Is now the time to buy MGNI? Find out in our full research report (it’s free for active Edge members).

StockStory’s take

Magnite posted a strong third quarter, surpassing Wall Street’s revenue and profitability expectations and prompting a significant positive reaction from the market. Management highlighted that robust growth in connected TV (CTV) advertising, as well as a surge in political ad spend, were key contributors to the quarter’s performance. CEO Michael Barrett pointed out that the company’s CTV segment grew 39% year-over-year and that political advertising, especially on CTV, “far exceeded our expectations,” accounting for over $12 million in the quarter.

Looking ahead, Magnite’s guidance is underpinned by expectations of continued CTV growth, expanding partnerships with major media owners, and further gains from political advertising. Management emphasized the durability of CTV momentum and the potential impact of new deals with platforms like Pinterest and OpenAI. CFO Brian Gephart stated, “We remain very bullish on our business for 2027, with top-line growth, excluding political, accelerating over 2026,” while also noting the anticipated efficiency improvements from AI and cloud investments.

Key insights from management’s remarks

Management attributed outperformance in the quarter to CTV momentum, exceptional political ad growth, and improved operating leverage driven by strategic partnerships and technology investments.

• CTV momentum: CTV continued to outpace other segments, representing 53% of contribution ex-TAC (revenue less traffic acquisition costs), with growth supported by partnerships with major platforms like Disney, Fox, LG Ads, Netflix, Roku, and Vizio Walmart.
• Political ad surge: Political ad spend was a major driver, exceeding internal expectations and making up over $12 million in Q3, with more than three-quarters benefiting the CTV segment. Management expects political to account for over $40 million in 2026, a substantial increase from previous cycles.
• SpringServe’s strategic role: The SpringServe ad server was cited as a core differentiator, enabling Magnite to anchor its position in CTV and provide efficient programmatic access for both publishers and advertisers.
• Mobile in-app and DV+ stability: Mobile in-app advertising, part of Magnite's DV+ segment, grew 17% year-over-year and now comprises roughly 35% of the DV+ business. The company noted that its diversification into commerce media and mobile in-app helped offset softness in other display channels.
• AI-driven cost and product gains: Management reported that internal use of AI tools has accelerated product development cycles and delivered measurable efficiency gains, particularly in cloud infrastructure, reducing costs per ad request by over 50% for streaming.

Drivers of future performance

Magnite’s outlook is shaped by ongoing CTV expansion, new product and partnership launches, and sustained operating efficiency gains.

• CTV and partnership expansion: Management expects CTV growth to remain above industry averages due to deepening relationships with major media owners and new deals with platforms like Pinterest and OpenAI. CEO Michael Barrett emphasized that many recently signed partnerships have yet to reach full revenue potential, which should support continued strength into next year.
• AI and operational efficiency: Investments in AI and on-premises cloud infrastructure are expected to drive further cost reductions and operational improvements. CFO Brian Gephart noted that these changes have already “reduced our cost per billion ad requests by over 50%,” and management anticipates additional productivity gains.
• Regulatory and industry changes: The company is monitoring the final outcome of the Google antitrust remedies, which could unlock new demand sources and improve competitive dynamics for Magnite’s DV+ business. Management cautioned that while timing is uncertain, any increased access to AdWords demand or changes to auction processes would be meaningful drivers.

Catalysts in upcoming quarters

In upcoming quarters, the StockStory team will be closely tracking (1) the pace at which new CTV partnerships like Pinterest and OpenAI begin contributing material revenue, (2) the effect of political ad spend as the U.S. election cycle peaks, and (3) the company’s ability to maintain operating leverage through further AI-driven cost savings. We will also monitor the implementation of Google’s antitrust remedies as a potential catalyst for DV+ growth.

Magnite currently trades at $24.93, up from $22.79 just before the earnings. Is there an opportunity in the stock? The answer lies in our full research report (it’s free).

Now could be the perfect time to invest in these stocks

WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don’t just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.

But our AI platform says the party isn’t over. Find out which 9 stocks made the cut this week — FREE. Get Our Top 9 Market-Beating Stocks for Free HERE.

Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+1,154% between June 2020 and June 2025). Find your next big winner with StockStory today.