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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 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%.
Revenue $189 million, up 10% year-over-year, driven by strong performance in both Subscription and Marketplace revenue.
Subscription Revenue $145 million, up 9% year-over-year, with fixed subscription revenue up 8% and subscription usage up 10%.
Marketplace & Other Revenue $44 million, up 14% year-over-year, reflecting continued strength in US digital ad spending.
Operating Income $23 million, up from $16 million a year ago, with operating margin expanding by three points to 12%.
Free Cash Flow $62 million, more than double year-over-year, reflecting growth in adjusted EBITDA and improved working capital efficiency.
Total RPO (Remaining Performance Obligations) $710 million, up 25% year-over-year, driven by the renewal of several multiyear $1 million plus contracts.
Current RPO $471 million, up 14% year-over-year.
Operating Margin 12%, up three points year-over-year.
Cash and Short-term Investments $421 million, with zero debt.
Stock-based Compensation $24 million, down 2% year-over-year.
Annual Free Cash Flow $153 million, up over 50% year-over-year.
Cross-Media Intelligence: Launched a new capability enabling marketers to measure and optimize advertising campaigns across screens and platforms.
Clean Room solution: Enhanced collaboration with partners for better understanding of customer bases.
New Customer Acquisition: Added 13 $1 million plus subscription customers, including two from the financial services sector.
Renewals: Secured 20 multimillion dollar ACV contracts, including a renewal with IPG.
Marketplace & Other Revenue: Increased by 14% to $44 million, reflecting strength in US digital ad spending.
Operating Margin: Expanded by three points to 12% in Q4.
Free Cash Flow: Achieved a record $62 million in Q4, more than double year-over-year.
Contraction Rate: Reduced to the lowest level ever, contributing to revenue growth.
Rule of 31: Achieved 13% revenue growth and 18% operating margin, aiming for Rule of 40 by FY’28.
Platform Modernization: Ongoing migration to an upgraded backend to improve stability and processing speed.
Earnings Expectations: LiveRamp Holdings, Inc. missed earnings expectations with a reported EPS of $0.3 against an expectation of $0.31.
Macroeconomic Uncertainty: There is a noted customer hesitancy tied to macroeconomic uncertainty, which may impact new logo signings and overall revenue.
Variable Revenue Sensitivity: 30% of revenue is variable and sensitive to macro conditions, with softer economic growth typically resulting in lower advertising activity.
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 company faces challenges related to increasingly stringent privacy regulations and the erosion of third-party cookies.
Supply Chain Challenges: Higher cloud hosting expenses related to platform modernization have impacted gross margins.
Competitive Pressures: The need for robust privacy-centric measurement solutions is critical as competition increases in the data collaboration space.
Revenue Growth Target: LiveRamp aims to achieve 10% to 15% revenue growth in FY’26, building on the 13% growth in FY’25.
Operating Margin Target: The company is targeting an operating margin of 25% to 30% by FY’28, up from 18% in FY’25.
Cross-Media Intelligence: LiveRamp is focusing on the launch of Cross-Media Intelligence to enhance measurement and optimization of advertising campaigns.
Data Collaboration Network: The company is expanding its data collaboration network to increase connections and enhance revenue generation.
Clean Room Solutions: LiveRamp is investing in Clean Room solutions to drive upsell opportunities and enhance measurement capabilities.
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, with a margin of 22%.
Q1 Revenue Guidance: For Q1, total revenue is expected to be approximately $191 million.
Gross Margin Guidance: Gross margin is expected to be consistent with last fiscal year, with first half margins in the low-70s and second half normalizing to mid-70s.
Free Cash Flow: LiveRamp 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 Program: Repurchased $25 million in stock in Q4, bringing the FY'25 total to just over $100 million.
Remaining Authorization: Approximately $256 million remaining under the current share repurchase authorization, expiring on December 31, 2026.
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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