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01/11 10:51
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call shows strong financial performance with revenue and free cash flow growth, margin expansion, and a significant share repurchase program. The Q&A highlights optimism about new solutions and customer engagement, with minimal perceived risks. The raised revenue guidance and continued margin improvements further support a positive sentiment. Despite some unclear responses, the overall outlook and financial health suggest a positive stock price movement, especially given the small-cap nature of the company.
Revenue Q4 2025 $189 million, up 10% year-over-year, driven by strong performance in both Subscription and Marketplace revenue.
Subscription Revenue Q4 2025 $145 million, up 9% year-over-year, with fixed subscription revenue up 8% and subscription usage up 10%.
Marketplace & Other Revenue Q4 2025 $44 million, up 14% year-over-year, reflecting continued strength in US digital ad spending.
Operating Income Q4 2025 $23 million, up from $16 million a year ago, with operating margin expanding by three points to 12%.
Free Cash Flow Q4 2025 $62 million, more than double year-over-year, reflecting growth in adjusted EBITDA and improved working capital efficiency.
Total RPO (Remaining Performance Obligations) Q4 2025 $710 million, up 25% year-over-year, driven by the renewal of several multiyear $1 million plus contracts.
Current RPO Q4 2025 $471 million, up 14% year-over-year.
Operating Margin FY 2025 18%, up four percentage points from FY 2024, marking the sixth consecutive year of margin expansion.
Free Cash Flow FY 2025 $153 million, up over 50% year-over-year.
Stock-Based Compensation Q4 2025 $24 million, down 2% year-over-year.
Cash and Short-term Investments Q4 2025 $421 million, with zero debt.
Cross-Media Intelligence: Launched a new capability enabling marketers to measure and optimize advertising campaigns across screens and platforms with unified reporting.
Clean Room solution: Enhanced collaboration for clients, leading to upselling opportunities and increased revenue.
New Customer Acquisition: Added 13 $1 million plus subscription customers, including two from the financial services sector.
Renewals: Secured 20 multimillion dollar ACV contracts, with half being multiyear contracts.
Expansion into New Industries: Commerce media networks are scaling beyond retail, with new networks launched in various sectors.
Operating Margin: Expanded by three points to 12% in Q4, marking the sixth consecutive year of margin expansion.
Free Cash Flow: Achieved a record $153 million in free cash flow for FY'25, a 51% year-over-year increase.
Contraction Rate: Reduced to the lowest level ever, contributing to revenue growth.
Rule of 31: Achieved entry into the Rule of 31 club with 13% revenue growth and 18% operating margin.
Future Goals: Aiming for Rule of 40 by FY'28 with 10% to 15% revenue growth and 25% to 30% operating margin.
Macroeconomic Uncertainty: There is a noted customer hesitancy tied to macroeconomic uncertainty, which may impact new logo signings and overall revenue growth.
Variable Revenue Sensitivity: 30% of revenue is variable and sensitive to macro conditions, particularly in Data Marketplace and Subscription usage, which could decline in a softer economic environment.
Lengthening Deal Cycles: The average deal cycle has lengthened, partly due to the need to educate the market on newer Clean Room solutions.
Regulatory Challenges: The industry is navigating increasingly stringent privacy regulations, which necessitate robust privacy-centric measurement solutions.
Competitive Pressures: The reliance on outdated tools and fragmented third-party data creates challenges in accurately measuring consumer behavior, impacting marketing effectiveness.
Operational Risks: Higher cloud hosting expenses related to platform modernization have temporarily affected gross margins.
Revenue Growth Target: LiveRamp aims to achieve 10% to 15% revenue growth in FY'26, building on a 13% growth in FY'25.
Operating Margin Target: The company targets an operating margin of 25% to 30% by FY'28, having achieved an 18% margin in FY'25.
Cross-Media Intelligence: LiveRamp is launching Cross-Media Intelligence to enhance measurement and optimization of advertising campaigns, which is expected to drive significant growth.
Clean Room Solutions: The company sees a substantial revenue opportunity from upselling Clean Room solutions, with current customers having an ARR approximately four times larger than those without.
Data Collaboration Network: LiveRamp is focused on expanding its data collaboration network to enhance value and revenue generation.
FY'26 Revenue Guidance: LiveRamp expects FY'26 revenue to be between $787 million and $817 million, representing growth of 6% to 10%.
Operating Income Guidance: Non-GAAP operating income is projected to be between $178 million and $182 million for FY'26, equating to a margin of 22%.
Q1 Revenue Guidance: For Q1, total revenue is expected to be approximately $191 million.
Free Cash Flow: The company anticipates strong free cash flow for FY'26, with a substantial portion allocated for share repurchases.
Share Repurchase Program: Returned $101 million in cash to shareholders through share repurchase program in FY'25.
Share Repurchase Authorization: Approximately $256 million remaining under the current share repurchase authorization, expiring on December 31, 2026.
Q4 Share Repurchase: Repurchased $25 million in stock during Q4.
The earnings call shows strong financial performance, with revenue and ARR growth, and optimistic guidance. The Q&A section supports this with positive sentiment on growth opportunities, particularly in AI and new pricing models. Despite some lack of clarity on specifics, the overall sentiment is positive, with a focus on future growth and shareholder returns. The market cap suggests a moderate reaction, placing the stock price movement in the 'Positive' category (2% to 8%).
The earnings call indicates a positive sentiment with several growth catalysts. The company has raised its full-year outlook due to recent sales momentum and confidence in higher revenue growth in the second half. Partnerships with major companies and new pricing models are expected to drive further growth. The Q&A section revealed management's confidence in their strategies, despite some uncertainties. The market cap suggests a moderate reaction, leading to a positive prediction of 2% to 8% stock price increase over the next two weeks.
The earnings call reflects a mixed sentiment. Financial performance shows growth in revenue and operating income, but challenges exist with lengthening deal cycles and regulatory pressures. The Q&A reveals optimism about new solutions and customer engagement, but uncertainty regarding macroeconomic impacts and customer retention. Share repurchase is positive, but competitive pressures and unclear guidance responses weigh on sentiment. Given the small-cap status, the stock is likely to experience moderate volatility, but the overall impact is expected to be neutral, with a stock price movement between -2% to 2%.
The earnings call shows strong financial performance with revenue and free cash flow growth, margin expansion, and a significant share repurchase program. The Q&A highlights optimism about new solutions and customer engagement, with minimal perceived risks. The raised revenue guidance and continued margin improvements further support a positive sentiment. Despite some unclear responses, the overall outlook and financial health suggest a positive stock price movement, especially given the small-cap nature of the company.
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