LiveRamp Holdings, Inc. ((RAMP)) has held its Q1 earnings call. Read on for the main highlights of the call.
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The recent earnings call for LiveRamp Holdings, Inc. was marked by a generally positive sentiment, reflecting strong financial performance that exceeded expectations. The company reported record operating margins and expressed a positive outlook for the remainder of the fiscal year. New product momentum and opportunities in artificial intelligence further contributed to the optimistic tone. However, some challenges were acknowledged, including higher dollar churn and conservative guidance for upcoming quarters.
Strong Revenue Growth
LiveRamp reported a robust 11% increase in total revenue, reaching $195 million, which surpassed expectations and marked the sixth consecutive quarter of double-digit growth. Subscription revenue rose by 10%, while Marketplace and Other revenue saw a 13% increase, underscoring the company’s strong market position.
Record Operating Margins
The company achieved a record first-quarter high in operating margins, with non-GAAP operating income increasing by 34% and operating margin expanding by 3 points to 18%. This performance highlights LiveRamp’s efficiency and ability to capitalize on its revenue growth.
Positive Outlook and Increased Guidance
LiveRamp raised its FY ’26 revenue guidance by $6 million at the midpoint, reflecting confidence in its future performance. The outlook for free cash flow improved due to recent tax legislation, and GAAP operating income is projected to be between $81 million and $85 million.
New Business and Product Momentum
The introduction of the Cross-Media Intelligence solution exceeded initial expectations, contributing to growth alongside Commerce Media Networks. The company secured significant deals with major clients like Walgreens and a leading U.S. department store, bolstering its business momentum.
AI Opportunities and Strategic Positioning
LiveRamp is strategically positioned for the AI-driven future of advertising, focusing on data connectivity and partner networks to support AI advancements. This strategic positioning is expected to drive future growth and innovation.
Higher Dollar Churn
The earnings call noted higher dollar churn than desired, attributed to unique customer events such as Oracle’s exit from the ad tech business, which impacted metrics for customers spending over $1 million.
Marketplace Growth Below Expectations
Data Marketplace growth fell slightly below expectations due to an issue with a new integration feature. However, this issue has been resolved, and the company remains optimistic about future marketplace performance.
Flat Usage Growth Forecast
The company provided conservative guidance for Q2, with subscription usage growth expected to remain flat year-on-year over the remaining three quarters. This cautious approach reflects the company’s strategic planning in a dynamic market environment.
Forward-Looking Guidance
During the earnings call, LiveRamp provided an optimistic forward-looking guidance, raising its FY ’26 revenue and free cash flow expectations. The company emphasized its strong sales momentum, driven by innovative solutions and new high-profile customers. LiveRamp’s strategic focus on AI and data collaboration is expected to capitalize on the evolving digital landscape, positioning the company for future success.
In summary, LiveRamp Holdings, Inc.’s earnings call painted a positive picture of the company’s financial health and strategic direction. With strong revenue growth, record operating margins, and a focus on innovation and AI, the company is well-positioned for future success. Despite some challenges, such as higher dollar churn and conservative guidance, LiveRamp’s outlook remains optimistic, promising continued growth and development in the coming quarters.