LiveRamp Holdings Inc (RAMP) Q3 2025 Earnings Report

- Revenue: $195.412 million in Q3, up 12.39% YoY and 5.35% QoQ. - Gross profit: $140.414 million; gross margin approximately 71.9% (rounded to ~72–74% range cited by management). - Operating income: $14.673 million; operating margin ~7.5% (record quarterly high of 23% in the non‑GAAP/GAAP framing; see note on adjustments). - EBITDA: $14.673 million; EBITDA margin ~7.5%. - Net income: $11.210 million; net margin ~5.74%. - EPS: $0.17 (diluted). - ARR: $491 million, up 10% YoY; quarterly ARR increase of $8 million driven by upsell. - CRPO: 16% QoQ rebound (seasonally strong third quarter). - RPO: Total backlog $579 million; current RPO $434 million (+6% QoQ; +13% YoY); reflects multiyear renewals and upsells. - Marketplace revenue: $50.0 million, +20% YoY; data marketplace accounted for ~78% of marketplace revenue and grew ~18%. - Subscription revenue: $146 million, +10% YoY; usage represented ~16% of subscription revenue (above historic 10–15%). - Gross margin remained in the low‑70s; margin expansion aided by cost discipline and offshoring benefits. - Cash flow: Operating cash flow $45.0 million; free cash flow ~$47.3 million; net change in cash $35.8 million; cash balance ~$377.4 million; net debt remains negative (net cash position ~$(338.6) million). - Buybacks: Approximately $76 million year‑to‑date in 2025; ~ $282 million remains under the current authorization (through year‑end 2026). - Balance sheet: Total assets $1.253 billion; total liabilities $295.5 million; equity $957.7 million; current ratio ~2.78; cash and equivalents ~$376.8 million; net debt/ cash position robust. - Stock-based compensation: $27.0 million in Q3; note the year‑over‑year increase partly reflects Habu acquisition integration and vesting timing. - Outlook: FY2025 revenue guidance raised to $741–$743 million; non‑GAAP OI guidance $135 million (margin ~18%); Q4 revenue guided to $184–$186 million; gross margin ~73%; SBC ~ $26 million. Management targets 20–25% OPM in FY2026 and 300–400 basis point Rule of 40 improvement (reaching at least Rule of 30 in FY2025).

- Strategy and market position: Scott Howe emphasizes LiveRamp as a scale leader with a data collaboration flywheel, arguing scale drives network value and the ability to measure outcomes across channels (CTV, commerce, social, etc.). He notes the network includes over 350 brand customers, 200+ ad tech platforms, 70+ agencies, and major streaming platforms, positioning LiveRamp to capture rising demand for first‑party data measures and AI‑fueled models. - Sales momentum and execution: Management cites a rebound in pipeline conversion and stronger renewal activity as drivers of revenue and ARR growth, with the percentage of data marketplace growth and new logo wins highlighted in the call. Lauren Dillard details improvements in conversion rates (nearly doubled in connectivity/clean room segments), larger average deal sizes (+>25%), and renewal rates at a 10‑quarter high, underscoring the durability of the commercial flywheel. - Product usability and AI enablement: Scott notes ongoing product iterations focused on usability (V2 clean rooms, simplified onboarding, standardized reporting) and deeper measurement capabilities across cross‑media and AI destinations, with an emphasis on integrations with AI partners (e.g., Perplexity, Chalice) to broaden the solved use cases for customers. He frames AI as an enabler for richer data collaboration and synthetic data testing, which can accelerate model development and deployment within client ecosystems. - Guidance and margin trajectory: The call highlights a path to Rule of 40 progress with 12–13% revenue growth and 18% operating margin for FY2025, and a long‑term target of 20–25% OPM by FY2026, supported by offshore efficiency gains and the revenue‑drop‑through inherent to the SaaS model. The data points in the transcript corroborate the Q3 beat versus guide and the favorable mix shift toward higher‑value ARR/CRPO contributions. - Macro and competitive context: Management attributes improved IT spending and a broader recognition of data collaboration as a measurable advertising outcome to the quarterly momentum, while acknowledging the lumpy nature of enterprise sales and the ongoing need to expand use cases and partnerships. They also signal potential volatility from the Habu integration and the broader ad‑tech market environment. Quotes: 1) Scott Howe – “Revenue increased by 12%, marking our fourth consecutive quarter of double‑digit growth.” 2) Lauren Dillard – “ARR was $491 million, up 10% year‑on‑year and quarter‑on‑quarter grew by $8 million, driven primarily by upsell.”

Bottom line: LiveRamp is steadily progressing along its Rule of 40 pathway, leveraging a scalable data collaboration network to drive durable revenue growth, strong ARR expansion, and margin improvement. The QQ3 2025 results demonstrate a resilient demand environment for data-enabled measurement and a compelling value proposition for advertisers and publishers seeking first‑party data solutions and AI‑driven analytics. With FY2025 guidance raised and a clear plan for FY2026 margin expansion toward 20–25% OPM, the company appears well positioned to convert pipeline velocity into sustained back‑half growth, assuming continued strength in CTV/commerce media and data marketplace usage, plus measured investments to improve platform reliability and speed. Risks center on macro volatility, integration execution, and competitive dynamics, but the company’s balance sheet, buyback discipline, and multi‑year contract cadence provide a favorable risk‑adjusted backdrop. Key catalysts include ramp‑up events in February, ongoing data collaboration wins, and deeper AI integrations that unlock higher customer lifetime value. Based on the quantitative trajectory (12–13% revenue growth, 18% OPM in FY2025, 20–25% target in FY2026) and the qualitative tailwinds from AI and data collaboration, the stock presents a constructive, albeit disciplined, long‑duration growth opportunity for investors seeking exposure to data‑driven advertising ecosystems.