Magnite (MGNI Quick QuoteMGNI - Free Report) is set to release second-quarter 2021 results on Aug 5.

For the quarter, the company expects revenues excluding traffic acquisition cost (TAC) between $92 million and $96 million. The consensus mark for revenues is pegged at $95 million, suggesting a 124.3% surge from the year-ago quarter’s reported figure.

For the quarter, the Zacks Consensus Estimate for earnings has remained steady at 11 cents per share in the past 30 days. The projection indicates growth of 210% from the year-ago quarter’s levels.

The company has a trailing four-quarter earnings surprise of 100.74%, on average.

Let’s see how things have shaped up prior to this announcement.

Factors to Consider

Magnite’s strong product portfolio with new Unified Decisioning products and Demand Manager offering as well as steady traction in targeted advertising is expected to have benefitted the top line in the to-be-reported quarter.

Recovery witnessed in ad spending in sectors hit hard by the pandemic like travel, entertainment, commercial airlines, automotive and retail is expected to have acted as a tailwind.

Steady momentum across all formats and device types, which include Connected Television (CTV), mobile, non-CTV video and display is likely to have aided the company’s performance in the second quarter.

The recent acquisition of SpotX (April 2021) is likely to have contributed to the company’s CTV business. SpotX is one of the leading platforms shaping CTV and video advertising globally. In the first quarter of 2021, SpotX preliminary revenues excluding TAC were $31.2 million.

The company is anticipated to have benefited from increased cord cutting and increasing traction of ad-supported programmatic CTV led by a shift from direct sales to programmatic ad-spending. Healthy demand for the company’s CTV addressability capabilities — that offer data-driven audience targeting capabilties to advertisers — is expected to have driven the top line.

Expanded live sports access on ad-supported CTV, along with higher adoption of ad-supported free and lower-cost content and increasing streaming TV content line-up are anticipated to have boosted the performance in the second quarter.

In the last reported quarter, Magnite’s CTV pro forma revenues increased 32% year over year to $12 million, primarily on solid momentum in core programmatic business across channels.

Contributions from a robust partner base, including the likes of Sling, Pluto, Disney (DIS Quick QuoteDIS - Free Report) , DISH along with broadcasting cable companies, such as Discovery , FOX and NBC, and device manufacturing companies, such as Sony, LG, Samsung, and Vizio is likely to have positively contributed to Magnite’s revenues in the quarter under review for this Zacks Rank #2 (Buy) stock.

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

However, increasing operating expenses as well as higher costs related to COVID-19 recovery are likely to exert pressure on profitability in the second quarter.

Key Developments in Q2

On June 29, Magnite announced that it concluded the first phase of a Publisher First-Party Segments Initiative that boasts over 30 participants. This initiative deals with requirements of buyers and sellers in a “cookieless environment” and already manages three billion transactions every day, noted the company.

On Jun 9, Magnite partnered with tvScientific to roll out a program that will link CTV publishers with a new segment of TV buyers which have not been involved in CTV advertising.

On May 18, Magnite revealed that it was chosen by The E.W. Scripps Company to become the preferred sell-side platform for the entire connected TV inventory.