LiveRamp Holdings, Inc. (NYSE:RAMP) is a global technology company that helps businesses build enduring brand and customer value by collaborating responsibly with data. As a leader in consumer privacy, data ethics, and foundational identity, LiveRamp offers a connected customer view with clarity and context while protecting brand and consumer trust.

Business Overview

The company's enterprise platform enables data collaboration, where companies can share first-party consumer data with trusted business partners securely and in a privacy-conscious manner. LiveRamp's solutions provide flexibility to collaborate wherever data lives, supporting a wide range of data collaboration use cases - within organizations, between brands, and across its global network of premier partners.

Global innovators, from iconic consumer brands and tech platforms to retailers, financial services, and healthcare leaders, turn to LiveRamp to deepen customer engagement and loyalty, activate new partnerships, and maximize the value of their first-party data while staying on the forefront of rapidly evolving compliance and privacy requirements.

Financials

In the fiscal year ended March 31, 2023, LiveRamp reported annual revenue of $659,661,000 and net income of $11,881,000. The company generated robust operating cash flow of $107,446,000 and free cash flow of $103,191,000 during the year, demonstrating its ability to convert earnings into cash.

For the latest quarter ended December 31, 2023, LiveRamp reported revenue of $173,869,000, up 10% year-over-year. Subscription revenue grew 5% to $132,351,000, while Marketplace and Other revenue surged 29% to $41,518,000. The company's gross margin remained stable at 74.2%, while operating income increased to $15,201,000, compared to a loss of $23,949,000 in the prior-year quarter.

LiveRamp's geographic revenue breakdown shows that the United States accounted for $628,503,000, or 95% of total revenue, while international markets contributed the remaining $31,158,000. The company's revenue growth was driven by strong performance across both its Subscription and Marketplace and Other segments.

Within the Subscription segment, the company saw continued momentum in new logo bookings, with Q4 being the second-highest quarter for new logo dollar bookings in over two years. LiveRamp also reported a subscription net retention rate of 103%, a two-point improvement sequentially, reflecting progress in customer retention efforts.

The Marketplace and Other segment benefited from robust growth in the data marketplace, which grew 32% year-over-year and accounted for 78% of the segment's revenue. The company also saw strong growth in professional services, which contributed approximately 30% of the segment's revenue growth.

Outlook

Looking ahead, LiveRamp provided guidance for the fiscal year 2025, expecting revenue to be in the range of $710 million to $730 million, representing growth of 8% to 11% year-over-year. The company anticipates subscription revenue growth to accelerate to the high single-digits, while marketplace and other revenue is expected to grow in the low double-digits to mid-teens range.

Gross margin is expected to remain stable at around 75%, while non-GAAP operating income is projected to be between $125 million and $129 million, translating to a margin of approximately 18%, up 2 percentage points from the prior year.

Recent Developments

LiveRamp's strong performance in the latest quarter and its forward-looking guidance underscore the company's ability to capitalize on the growing demand for secure first-party data collaboration and the shift towards authenticated addressability in the digital advertising landscape. The company's investments in product innovation, customer experience, and partner ecosystem expansion position it well to sustain its leadership in the data collaboration market.

Furthermore, LiveRamp's focus on simplifying its offerings and leveraging artificial intelligence to enhance internal productivity and customer experience could drive further operational efficiencies and customer stickiness. The company's robust financial position, with healthy cash flow generation and a disciplined capital allocation strategy, provides the flexibility to invest in growth initiatives while returning capital to shareholders.

Risks and Challenges

However, the company faces risks related to the ongoing transition in the digital advertising industry, including the potential for short-term disruption from the delayed deprecation of third-party cookies. LiveRamp's ability to navigate these industry changes and continue executing on its strategic priorities will be crucial in driving long-term shareholder value.

Conclusion

Overall, LiveRamp's strong financial performance, innovative product offerings, and strategic positioning in the evolving data collaboration market make it a compelling investment opportunity for investors seeking exposure to the growing data and digital advertising sectors.