Q4 2024 LiveRamp Holdings Inc Earnings Call

Operator: Good afternoon, ladies and gentlemen, and welcome to LiveRamp's fiscal 2024 fourth quarter earnings call. All lines have been placed on mute to prevent any background noise.

Good afternoon, ladies and gentlemen, and welcome to lifetime fiscal 'twenty 'twenty four fourth quarter earnings call. All lines have been placed on mute to prevent any background noise. After.

Operator: After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number 1 on your telephone keypad. If you would like to withdraw your question, press star 1 again. As a reminder, this conference call is being recorded. I would now like to turn the call over to your host, Drew Borst, Vice President of Investor Relations.

The speaker's remarks, there will be a question and answer session.

Speaker Change: We'd like to ask a question. During this time simply press star followed by the number one on your telephone keypad. If he would like to withdraw your question Press Star one again.

Speaker Change: As a reminder, this conference call is being recorded I would now like to turn the call over to your host drew Borst, Vice President of Investor Relations.

drew Borst: Thank you, operator. Good afternoon, and welcome.

drew Borst: Thank you operator, good afternoon and welcome. Thank you for joining our fiscal 2020 for fourth quarter earnings call.

drew Borst: With me today are Scott Howe, our CEO and Lauren Dillard our CFO.

drew Borst: Thank you for joining our fiscal 2024 fourth quarter earnings call. With me today are Scott Howe, our CEO, and Lauren Dillard, our CFO. Today's press release and this call may contain forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially. For a detailed description of these risks, please read the risk factors section of our public filings and the press release. A copy of our press release and financial schedules, including any reconciliations to non-GAAP financial measures, is available at LiveRamp.com. Also, during the call today, we'll be referring to the slide deck posted on our website. And with that, I'll turn the call over to Scott. Thank you.

Speaker Change: Today's press release and this call may contain forward looking statements that are subject to risks and uncertainties that could cause actual results to differ materially.

Speaker Change: For a detailed description of these risks please read the risk factors sections of our public filings and the press release.

Lauren Dillard: A copy of our press release and financial schedules, including any reconciliation to non-GAAP financial measures is available at <unk> Dot com.

Speaker Change: Also during the call today will be referring to the slide deck posted on our website.

Speaker Change: And with that I'll turn the call over to Scott.

Scott E. Howe: Thank you, Drew, and thanks to everyone joining our call today. As I've done in past year-ending earnings calls, today I'll strike a balance between talking about the quarter that just ended and, perhaps more importantly, providing a bit of color around what we intend to accomplish across the coming year. We ended fiscal 2024 on a high note, with Q4 revenue and operating income exceeding our expectations and a positive inflection in several key performance indicators.

Speaker Change: Thank you drew and thanks to everyone joining our call today.

Scott E. Howe: As I've done in past year, ending earnings calls today, I will strike a balance between talking about the quarter and the year that just ended and perhaps more importantly provide a bit of color around what we intend to accomplish across the coming year.

Scott E. Howe: We ended fiscal 2024 on a high note with Q4 revenue and operating income exceeding our expectations and a positive inflection in several key performance indicators.

Scott E. Howe: As we look ahead to FY25, we like our strategic position. Our data collaboration platform seems well-positioned to capitalize on the growing need for secure first-party data collaboration and to sustain addressable digital advertising in a world of third-party signal loss. Operationally, we also feel as if there are still a lot of ways we can run the business even more effectively and efficiently. Before turning to our FY25 priorities, however, let me spend some time on Q4 and FY24.

Speaker Change: As we look ahead to FY 'twenty five.

Speaker Change: Like our strategic position.

Speaker Change: Our data collaboration platform seems well positioned to capitalize on the growing need for secure first party data collaboration.

Speaker Change: To sustain addressable digital advertising in a world of third party signal loss.

Speaker Change: Operationally, we also feel as if there are still a lot of ways, we can run the business, even more effectively and efficiently.

Scott E. Howe: Q4 revenue growth exceeded our expectations across the board, with total revenue up 16%, subscription up 11%, and marketplace up 38%. Revenue was ahead of our guidance by $12 million, or 7%, and non-GAAP operating income was ahead by $3 million, or 20%. Revenue growth came a long way in FY24. You might recall that our initial guide 12 months ago was for revenue growth of 2 to 4 percent. However, over the past year, we actually grew our top line by 11% or 10% on a like-for-like basis, excluding Habu. The majority of the upside was driven by our marketplace business, but subscription also overperformed in the fiscal second half.

Speaker Change: Before turning to our FY 'twenty five priorities. However, let me spend some time on Q4 and FY 'twenty four.

Speaker Change: Q4 revenue growth exceeded our expectations across the board.

Speaker Change: With total revenue up 16%.

Speaker Change: Subscription up 11% and marketplace up 38%.

Speaker Change: Revenue was ahead of our guidance by $12 million or 7% and non-GAAP operating income was ahead by $3 million or 20%.

Revenue growth came a long way in FY 'twenty for you.

Speaker Change: Recall that our initial guide 12 months ago was for revenue growth of 2% to 4%.

Speaker Change: Over the past year, we actually grew our top line of 11% or 10% on a like for like basis, excluding havas.

Speaker Change: The majority of the upside was driven by our marketplace business.

Speaker Change: Subscription also over performed in the fiscal second half.

Scott E. Howe: Subscription revenue growth, after positively inflecting in Q3, accelerated again in Q4 by 1.9% on a like-for-like basis. This growth acceleration demonstrates the progress we made throughout FY24, improving our sales productivity and customer retention. The best leading indicator of subscription revenue is ARR, or Annual Recurring Revenue, and in Q4, growth accelerated for a second consecutive quarter. On a like-for-like basis, ARR grew by 7%, a one-point acceleration sequentially, and the fastest quarterly growth since Q3 FY23.

Speaker Change: Subscription revenue growth after positively inflected in Q3 accelerated again in Q4 by one point to 9% on a like for like basis.

Speaker Change: This growth acceleration demonstrates the progress we made throughout FY 'twenty for improving our sales productivity and customer retention.

The best leading indicator of subscription revenue as <unk> or annual recurring revenue and in Q4 growth accelerated for a second consecutive quarter.

On a like for like basis.

Speaker Change: <unk> grew by 7%, a one point acceleration sequentially and the fastest quarterly growth since Q3, FY2023.

Scott E. Howe: We continue to see positive momentum in new logo bookings in Q4. Last quarter, I highlighted that Q3 was our highest quarter for new logo dollar bookings in over two years. Well, Q4 was the second highest, and just 1% below Q3.

Speaker Change: We continued to see positive momentum in new logo bookings in Q4 last quarter I highlighted that Q3 was our highest quarter for new logo dollar bookings in over two years.

Speaker Change: Well Q4 was the second highest in just 1% below Q3.

Scott E. Howe: We signed a new three-year contract with a seven-figure annual value with a major home improvement retailer for a bundle of our solutions across identity, connectivity, and data collaboration. We also signed another seven-figure annual contract with a multi-year term with a major pharmacy retailer for identity and connectivity. We also continue to successfully upsell our existing customers. Our subscription net retention was better than we expected, at 103%. However, this is still below the levels we aspire to achieve.

Speaker Change: We signed a new three year contract with a seven figure annual value with a major home improvement retailer for a bundle of our solutions across identity connectivity and data collaboration.

Speaker Change: We signed another seven figure annual contract with a multi year term with a major pharmacy retailer for identity and kind of activity.

Speaker Change: We also continue to successfully upsell our existing customers are.

Speaker Change: Our subscription net retention was better than we expected at 103%.

Speaker Change: This is still below the levels, we aspire to achieve but I'm pleased with the progress we made in FY 'twenty for improving retention by six percentage points.

Scott E. Howe: But I'm pleased with the progress we made in FY24, improving retention by 6 percentage points. Additionally, we had a notable seven-figure upsell with a multi-year term with a major pharmaceutical manufacturer for our identity onboarding solution. We had a high six-figure upsell with a two-year term with a major cosmetics and beauty retailer for our clean room and data collaboration solution. These customer wins speak to the broader success we're having with our largest, most innovative brand customers.

Speaker Change: We had a notable seven figure upsell with a multi year term with a major pharmaceutical manufacturer for our identity Onboarding solutions.

Speaker Change: We had a high six figure upsell with a two year term with a major cosmetics and beauty retailer for our clean room and data collaboration solutions.

Speaker Change: These customer wins speak to the broader success, we're having with the largest most innovative brand customers.

Scott E. Howe: In Q4, our $1 million plus customer cohort count increased by 10 quarter on quarter to 115, equaling our highest net add quarter on record, and we asked why 24 was our best fiscal year on record, with 20 net million dollar plus customer ads.

Speaker Change: In Q4 are $1 million plus customer cohort count.

Speaker Change: Increased by 10 quarter on quarter to 115, equaling our highest net add quarter on record.

Speaker Change: And FY 'twenty four was our best fiscal year on record.

Speaker Change: With 20 net million plus customer adds.

Scott E. Howe: While I am pleased with our progress in FY24, there remains room for improvement. The entire LiveRamp team is focused not just on sustaining our current momentum but hopefully improving upon it. I am energized about the opportunity in front of us with our data collaboration platform and the industry megatrends that should continue to be a wind at our back, from the transition from third-party signals to Authenticated Addressability, to accelerating growth in major CTV and commerce media providers, to Cloud Computing and Artificial Intelligence. All of these market trends are seemingly poised to drive incremental demand for our solutions. And it's our responsibility to seize this opportunity.

Speaker Change: While I am pleased with our progress in FY 'twenty four there remains room for improvement.

Speaker Change: The entire library and team is focused not just on sustaining our current momentum, but hopefully improving upon it.

Speaker Change: I am energized about the opportunity in front of us with our data collaboration platform in the industry Megatrends that should continue to be a wind at our back.

Speaker Change: From the transition from third party signals to authenticated address ability.

Speaker Change: Two accelerating growth in major CTV and commerce media providers.

Speaker Change: Cloud computing and artificial intelligence.

Speaker Change: All of these market trends are seemingly poised to drive incremental demand for our solutions.

It's our responsibility to seize this opportunity.

Scott E. Howe: We have four overarching corporate priorities for FY25. First, enhance both our products and customer experience to help improve customer retention while positioning us for greater upsell success. Second, extend our leadership position in data collaboration. Third, scale our partner and connectivity ecosystem, and fourth, simplify LiveRamp for our customers and employees. I will elaborate on each of these in a minute.

Speaker Change: We have four overarching corporate priorities for FY 'twenty five.

Speaker Change: First.

Speaker Change: And enhance both our products and customer experience to help improve customer retention, while positioning us for greater upsell success.

Speaker Change: Second extend our leadership position and data collaboration.

Speaker Change: Third scale, our partner in connectivity ecosystem and fourth.

Speaker Change: Simplify live ramp for our customers and employees.

Speaker Change: I will elaborate on each of these in a minute.

Scott E. Howe: But the common thread is that if we successfully execute on these priorities, then we will continue to make progress with our primary financial objective of becoming a Rule of Forty company. Starting with upgrading our products and customer experience to improve customer retention. This is, and will always be, an ongoing effort, as great customers always expect constant progress. But let me share a few examples.

Speaker Change: But the common thread is that if we successfully execute on these priorities.

Speaker Change: Then we will continue to make progress with our primary financial objective of becoming a rule of 40 company.

Starting with upgrading our products and customer experience to improve customer retention.

Speaker Change: This is and will always be an ongoing effort as great customers always expect constant progress.

But let me share a few examples.

Scott E. Howe: First, we have better aligned our pre- and post-sales teams to more efficiently and effectively onboard new customers and reduce the amount of time between contract signing and go-live. Second, we continue to modernize our technology to facilitate greater scale and faster turnaround time. Third, we've upgraded all customers from cookie-based workflows to our Ramp ID, which readies them for pair and other non-cookie integrations, where the advertising performance is typically significantly better. Finally, we deploy dedicated resources to help our activation customers expand the number of destinations where their first-party data is being used.

Speaker Change: First we have better aligned our pre and post sales teams to more efficiently and effectively onboard new customers and reduce the amount of time between contract signing and go live.

Speaker Change: Second we continue to modernize our technology to facilitate greater scale and faster turnaround time.

Speaker Change: Third we've upgraded all customers from cookie based workflows to a ramp with ready them for repair and other non cookie integrations, where the advertising performance typically is significantly better.

Speaker Change: Finally, we deploy dedicated resources to help our activation customers expand the number of destinations where their first party data is being used.

Scott E. Howe: Our internal data tells us that both customer retention and profitability are positively correlated to the number of publisher destinations to which our customers activate their first-party data. We made significant progress with customer retention in FY24, but we think these initiatives and others will help us continue improving in FY25.

Speaker Change: Our internal data tells us that both customer retention and profitability are positively correlated to the number of publisher destinations to which our customers activate their first party data.

Speaker Change: We made significant progress with customer retention in FY 'twenty four but we think these initiatives and others will help us continue improving in FY 'twenty five.

Scott E. Howe: Our second priority is extending our leadership and data collaboration. Data collaboration helps companies manage and optimize data that is siloed across a growing number of cloud computing environments. Data collaboration is also an antidote to third-party cookie deprecation and other signal loss. In a recent eMarketer survey, advertisers and publishers were asked which solutions held the greatest promise of replacing cookie-dependent solutions. The number one response from approximately half of the advertiser and publisher respondents was first party data activation.

Speaker Change: Our second priority is extending our leadership in data collaboration.

Data collaboration helps companies manage and optimize data that is siloed across a growing number of cloud computing environments.

Speaker Change: Data collaboration is also an antidote to third party cookie deprecation and other signal loss.

Speaker Change: In a recent E marketer survey advertisers and publishers were asked which solutions held the greatest promise of replacing Cookie dependent solutions.

Speaker Change: The number one response from approximately half of the Advertiser and publisher respondents was first party data activation.

Scott E. Howe: We believe this is particularly true for the largest, most sophisticated companies. After all, first-party data is not equally distributed across the ecosystem. Some companies are rich in first-party data, like retailers and major publishers, and others are first-party data poor.

Speaker Change: We believe this is particularly true for the largest most sophisticated companies.

Speaker Change: After all first party data is not equally distributed across the ecosystem.

Speaker Change: Companies are rich and first party data like retailers and major publishers and others are first party data poor.

Scott E. Howe: Our data collaboration platform provides a solution for this data inequality by enabling the secure sharing of first-party data with trusted business partners for mutual benefit, in a manner similar to the mutual benefits retailers and CPG companies get through data sharing in retail media networks. HABU is an important component of our data collaboration strategy. We're now four months into the Habu acquisition, and I'm convinced the influx of both talented people and elegantly simple yet sophisticated technology makes us a better company and positions us for greater long-term success.

Speaker Change: Our data collaboration platform provides a solution for this data and our quality by enabling the secure sharing a first party data with trusted business partners for mutual benefit.

Speaker Change: In a manner similar to the mutual benefits retailers and CPG companies get through data sharing in retail media networks.

Speaker Change: <unk> is an important component of our data collaboration strategy.

Speaker Change: Now four months into the Habu acquisition and I am convinced the influx of both talented people and elegantly simple yet sophisticated technology make us a better company and position us for greater long term success.

Scott E. Howe: We have already integrated HABU's clean room technology into our data collaboration platform. The onboarding of our new colleagues was fairly easy, given our shared excitement about the future, and the talented Habu Leadership Team has been given expanded responsibilities and access to even more resources.

Speaker Change: We have already integrated habu as clean room technology into our data collaboration platform.

Speaker Change: The onboarding of our new colleagues was fairly easy given our shared excitement about the future.

Speaker Change: And the talented habu leadership team.

Speaker Change: Has been given expanded responsibilities and access to even more resources.

Scott E. Howe: Customers are responding positively to Habu's product, particularly its key differentiators of seamless cross-cloud interoperability, customizable Analytics in Walled Gardens, and a simple, user-friendly UX. As a result, our sales pipeline continues to scale. One month after the deal closed, our incremental data collaboration pipeline was $30 million. And now, four months in, it's over $40 million.

Speaker Change: Customers are responding positively to <unk> product, particularly its key differentiators of seamless cross cloud interoperability.

Speaker Change: <unk> analytics, and walled gardens, and a simple user friendly UX.

Speaker Change: As a result, our sales pipeline continues to scale.

Speaker Change: One month after the deal closed or incremental data collaboration pipeline was 30 million now four months in its over $40 million.

Scott E. Howe: While HABU's capabilities are a key component of our data collaboration strategy, together they are only one part of a much broader, holistic offering. At RampUp in February, we officially launched the next generation of the LiveRamp data collaboration platform, modernizing and unifying our identity, connectivity, data access, and data collaboration capabilities onto a single, composable platform. The modernized platform introduces new capabilities such as a simplified user interface and new ingestion pipelines that reduce processing time and accelerate speed to value.

Speaker Change: While <unk> capabilities are a key component of our data collaboration strategy together. They are only one part of a much broader holistic offering.

Speaker Change: That ramp up in February we officially launched the next generation of the live ramp data collaboration platform.

Speaker Change: Modernizing and unifying our identity connectivity data access and data collaboration capabilities onto a single composer Bowl platform.

Speaker Change: The modernized platform introduces new capabilities, such as a simplified user interface, new ingestion pipes that reduce processing time and accelerate speed to value.

Scott E. Howe: Composable Technology for Cross-Cloud Interoperability to Unlock Data Collaboration Partnerships, and an expanded partner marketplace where third-party developers can build custom applications. By bringing all of our capabilities into a single, seamless user interface with simplified orchestration, customers are able to more easily connect audiences across partners and unlock greater value across all of their data collaboration needs. In addition, we will continue to invest this year in unifying our back-end systems to modernize our platform architecture to drive improved speed, stability, and scalability.

Speaker Change: <unk> technology for cross cloud interoperability to unlock data collaboration partnerships.

Speaker Change: And then an expanded partner marketplace, where third party developers can build custom applications.

Speaker Change: By bringing all of our capabilities into a single seamless user interface with simplified orchestration customers are able to more easily connect audiences across partners and unlock greater value across all of their data collaboration needs.

Speaker Change: In addition, we will continue to invest this year in unifying our back end systems to modernize our platform architecture to drive improve speed stability and scalability.

Scott E. Howe: This matters to our clients, many of whom have scaled their usage of our platform in ways we never imagined even a few short years ago. The combination of technology scalability and network density helps extend our leadership position in data collaboration, as well as help with our first corporate priority of improving customer retention. Our third priority is to continue scaling our partner and connectivity ecosystem.

Speaker Change: This matters to our clients many of whom have scaled their usage of our platform in ways, we never imagined even a few short years ago.

Speaker Change: The combination of technology scalability and network density help extend our leadership position in data collaboration as well as help with our first corporate priority of improving customer retention.

Speaker Change: Our third priority is to continue scaling our partner and connectivity ecosystem.

Scott E. Howe: This has long been a key competitive advantage, as the efficacy of our product is in part a function of where and how our technology can be used. Network scale matters, and we have the world's leading ecosystem across publishers, technology platforms, and data providers, all either powered by or being upgraded to post-signal solutions. Our Authenticated Traffic Solution, or ATS, has been in the making for five-plus years in anticipation of third-party signal loss

Speaker Change: This has long been a key competitive advantage as the efficacy of our product is in part a function of where and how our technology can be used.

Speaker Change: Network scale matters, and we have the world's leading ecosystem across publishers technology platforms and data providers, all either powered by or being upgraded to post signal solutions.

Scott E. Howe: Today, ATS is a fully scaled solution that connects publisher and marketer data to better personalize and measure advertising across channels and across geographies. ATS has been adopted by over 21,000 publisher domains, including 75% of the Comscore 100 publishers, and it connects to over 92% of U.S. consumer time spent online. Irrespective of Chrome's deprecation timeline, the digital advertising market has largely moved beyond third-party cookies. Marketers look to reach their consumers not just on Chrome browsers but across the compelling channels of Safari, mobile in-app, retail media, and CTV. ATS is an omnichannel service.

Speaker Change: Our authenticated traffic solution or Ats has been in the making for five plus years in anticipation of third party signal loss.

Speaker Change: Today.

Speaker Change: <unk> is a fully scaled solution that connects publisher and marketer data to better personalize and measure advertising across channels and across geographies.

Speaker Change: Ats has been adopted by over 21000 publisher domains, including 75% of the Comscore 100 publishers and it connects to over 92% of U S. Consumer time spent online.

Speaker Change: Irrespective of Crohn's deprecation timeline, the digital advertising market has largely moved beyond third party cookies.

Speaker Change: Marketers look to reach their consumers not just on chrome browsers, but across the compelling channels of Safari mobile in App retail media and CTV.

Scott E. Howe: We've partnered with Disney+, Tubi, NBCU, Paramount+, and many more pubs, and these partnerships are not limited by geography; ATS is available wherever a consumer is today and will be in the future. And we envision a future where today's connections with major platforms, publishers, and CTV providers are increasingly complemented by AI applications and new consumer touchpoints. Additionally, we have partnered with Google's DSP, Display, and Video 360 on its PAIR initiative, which stands for Publisher Advertiser Identity Reconciliation.

Speaker Change: Acs as Omnichannel, we partnered with Disney plus <unk>, NBC U Paramount plus and many more pumps and these partnerships are not limited by the cookie.

Speaker Change: Ats's available wherever a consumer is today and will be in the future and we envision a future where today's connections with major platforms publishers and CTV providers increasingly are complemented by AI applications and new construction.

Speaker Change: <unk> touch points.

Speaker Change: Additionally, we have partnered with Google's DSP display and video $3 60 on its pair initiative.

Speaker Change: <unk>, which stands for publisher Advertiser identity reconciliation.

Scott E. Howe: Is DB360's answer to third-party cookie deprecation? and allows advertisers and publishers to securely and privately reconcile their first-party data to enable personalized advertising. Our role is providing the clean room infrastructure that allows advertisers and publishers to securely activate their first-party data on TV360. PEAR continues to scale adoption with large publishers, including CTV publishers like NBC Universal.

Speaker Change: Is <unk> hundred 60, <unk> answered a third party cookie deprecation and allows advertisers and publishers to securely and privately reconcile their first party data to enable personalized advertising.

Speaker Change: Our role is providing the clean room infrastructure that allows advertisers and publishers to securely activate their first party data on PV 360.

Speaker Change: <unk> continues to scale adoption with large publishers, including CTV publishers like NBC Universal.

Scott E. Howe: The early results from PAIR are highly encouraging. For example, our case study with Omni Hotels and Resorts showed PAIR campaigns delivered a 4X increase in conversion rate over traditional cookie-based targeting in DV360. And we've seen similar results in as of yet unpublished case studies. A recent analysis of our brands that use PAIR showed that they were able to increase their match rates by 27%. This is meaningful incremental reach that is available today because Pear is not limited to Chrome but is available across Safari, Firefox, Edge, and CTV inventory.

Speaker Change: The early results from payer are highly encouraging our case study with omni hotels and resorts showed pair campaigns delivered a four X increase in conversion rate over traditional cookie based targeting and Dv $3 60.

Speaker Change: And we've seen similar results in as of yet unpublished case studies.

Speaker Change: A recent analysis of our brands, who used pair showed that they were able to increase their match rates by 27%.

Speaker Change: This is meaningful incremental reach that is available today, because pair is not limited to chrome, but is available across safari, Firefox edge and CTV inventory.

Scott E. Howe: Results like this convince us that the industry should just embrace cookie-less alternatives like PAIR and ATS and stop fretting about deprecation timelines. But we'll make use of the extra time afforded to all by Google's recent announcement to delay full implementation until after the holiday shopping season. In the coming months, in partnership with Google and others, we will continue to publish case studies and educate the ecosystem so they are ready for full cookie deprecation when it occurs in early calendar year 2025.

Speaker Change: Results like this convince us that the industry should just embrace cookie less alternatives like pair in Ats and stop fretting about deprecation timelines.

Speaker Change: But we will make use of the extra time afforded to all by Google's recent announcement to delay full implementation until after the holiday shopping season.

Speaker Change: In the coming months in partnership with Google and others. We will continue to published case studies and educate the ecosystem. So they are ready for full cookie deprecation when it occurs in early calendar year 2025.

Scott E. Howe: As Parrish scales, the benefit to LiveRamp should show up in the form of first, incremental activation from our existing subscription customers, and second, new logo opportunities that are doing first-party data targeting exclusively on third-party cookies today. Of course, third-party cookie deprecation is certainly a catalyst for the adoption of Pear. So Google's decision to delay Chrome's third-party cookie deprecation until early 2025 will have an impact on our pairing opportunities.

Speaker Change: As <unk> scales, the benefit to lie ramp should show up in the form of burst incremental activation from our existing subscription customers and second new logo opportunities that are doing first party data targeting exclusively off third party cookies today.

Speaker Change: Of course third party Cookie deprecation is certainly a catalyst for the adoption of pair so.

Speaker Change: So googles decision to delay Chrome third party cookie deprecation until early 2025, we will have an impact on our payer opportunities.

Scott E. Howe: We think we've appropriately reflected this in the FY25 guidance Lauren will provide today. However, in the medium to long term, we remain well-positioned, and we think improved advertising performance customers can achieve with PAIR will ultimately win out.

Lauren Dillard: We think we've appropriately reflected this in the FY 'twenty five guidance Lauren we will provide today.

Lauren Dillard: However, in the medium to long term, we remain well positioned and we think improved advertising performance customers can achieve with pair will ultimately win out.

Lauren Dillard: Finally.

Scott E. Howe: Our fourth priority for FY25 is simplifying LiveRamp for our customers and employees. There are a plethora of coordinated activities that will ultimately simplify our technology and ease of use. We're always working to improve our user interfaces.

Lauren Dillard: Our fourth priority for FY 'twenty five is simplifying live ramp for our customers and employees.

Lauren Dillard: There is a plethora of coordinated activities that will ultimately simplify our technology and ease of use.

Lauren Dillard: We're always working to improve our <unk> simplify and streamline our contract processes reexamine, our pricing policies and modernize our technology.

Scott E. Howe: Simplify and streamline our contract process, re-examine our pricing policy, and Modernize Our Technology. One of the emerging initiatives is leveraging artificial intelligence, both internally to improve our own productivity and make our products better, and externally to help our customers organize and accumulate the data that is the fuel for their own AI models and initiatives. Internally, we are using AI in a number of ways, from helping our software developers write code more quickly to helping all LiveRampers find useful information more quickly through an AI-powered assistant tool with Enterprise Search.

Scott E. Howe: More specifically, approximately 15% of our developers are now regularly using AI tools to assist with coding, and on average, these tools have generated an estimated double-digit percent improvement in productivity. We are also incorporating AI into our data collaboration platform and data marketplace, which will provide ease of use and accelerated time-to-value benefits. For example, our HABU technology offers JetAI-powered data queries that can produce reports without requiring SQL coding skills, which makes the platform more usable for less technical business users.

Lauren Dillard: One of the emerging initiatives is leveraging artificial intelligence, both internally to improve our own productivity and make our products better and externally to help our customers organize and accumulate the data that is the fuel for their own AI models and initiatives.

Lauren Dillard: Internally, we are using AI and a number of ways from helping our software developers write code more quickly to.

Lauren Dillard: To helping all <unk> finds useful information more quickly through an AI powered assistant tool with enterprise search.

Lauren Dillard: More specifically approximately 15% of our developers are now regularly using AI tools to assist with coding and on average. These tools have generated an estimated double digit percentage improvement in productivity.

Lauren Dillard: We are also incorporating AI into our data collaboration platform and data marketplace that will provide ease of use and accelerated time to value benefits. For example, our habu technology offers jet AI powered data queries that can produce reports without requiring.

Lauren Dillard: The sequel coding skills, which makes the platform more usable for less technical business users.

Scott E. Howe: In our data marketplace, we are training a proprietary AI model to accelerate our review of the data labels and descriptions provided by data sellers, which is critical to ensuring a favorable buyer experience. Finally, we are using AI with our IV graph to drive increased accuracy and stability through a more sophisticated understanding of data fragment relationships. Beyond our internal use of AI, the LiveRamp data collaboration platform has a much larger and critical role to play in helping customers use data to propel their own AI initiatives.

Lauren Dillard: And our data marketplace, we are training our proprietary AI model too.

Lauren Dillard: To accelerate our review of the data labels and descriptions provided by data sellers, which is critical to ensuring favorable buyer experience.

Lauren Dillard: Finally, we are using AI with our IV graph to drive increased accuracy and stability through a more sophisticated understanding of data fragment relationships.

Lauren Dillard: Beyond our internal use of AI. The live ramped data collaboration platform has a much larger and critical role to play in helping customers use data to propel their own AI initiatives.

Scott E. Howe: Our data collaboration and enrichment products and connected partner ecosystem help brand marketers improve the quality, quantity, and diversity of customer data use. This customer data is the foundation for training generalized AI models and transforming them into the kind of proprietary models that produce brand-specific predictive customer insights, such as optimized segmentation, interests, propensities, and affinities. Ultimately, these AI-powered insights help brand marketers deliver personalized marketing experiences more effectively and efficiently.

Our data collaboration and enrichment products and connected partner ecosystem health brand marketers improve the quality quantity and diversity of customer data use.

Lauren Dillard: This customer data is the foundation for training generalized AI models and transforming them into the kind of proprietary models that produce brand specific predictive customer insights such as optimized segmentation interest propensity and affinities.

Lauren Dillard: Ultimately these AI powered insights help brand marketers deliver personalized marketing experiences more effectively and efficiently.

Scott E. Howe: In closing, let me reiterate what I believe to be the key themes from the quarter. First, Q4 was a strong finish to FY24, with revenue and operating income exceeding our expectations and a positive inflection in several key performance indicators. Notably, the growth in ARR, which is the best leading indicator of our fixed subscription, accelerated for a second consecutive quarter to double digits on a reported basis. Second, we're not satisfied.

Speaker Change: In closing, let me reiterate what I believe to be the key themes from the quarter.

Speaker Change: First.

Speaker Change: Q4 was a strong finish to FY 'twenty four with revenue and operating income exceeding our expectations and a positive inflection in several key performance indicators.

Speaker Change: Notably the growth in <unk>, which is the best leading indicator of our fixed subscription accelerated for a second consecutive quarter to double digits on a reported basis.

Speaker Change: Second word.

Speaker Change: We're not satisfied as we look ahead to FY 'twenty five we have an ambitious set of corporate goals and priorities that will if we successfully execute.

Scott E. Howe: As we look ahead to FY25, we have an ambitious set of corporate goals and priorities that will, if we successfully execute, help us advance toward our goal of being a rule-governed company. Finally, we believe we're well positioned against the trends that matter. Our data collaboration platform is well-positioned to capitalize on the growing need for secure first-party data collaboration to sustain the Addressable Digital Average. Our platform provides the right capabilities, and there are multiple industry megatrends working in our favor, including the shift to cloud computing. The proliferation of AI tools and marketing, growth in new walled gardens and CTV and commerce media, and, of course, the rise of authenticated addressability over third-party signals.

Speaker Change: Help us advance toward our goal of being a rule of 40 company.

Speaker Change: Finally, we believe we are well positioned against the trends that matter.

Speaker Change: Our data collaboration platform is well positioned to capitalize on the growing need for secure first party data collaboration to sustain addressable digital advertising.

Speaker Change: Our platform provides the right capabilities and there are multiple industry megatrends working in our favor.

Speaker Change: The shift to cloud computing.

Speaker Change: The proliferation of AI tools and marketing.

Speaker Change: Growth in new walled gardens in CTV, and Commerce media and of course the.

Speaker Change: The rise of authenticated address ability over third party signals.

Scott E. Howe: Thank you again for joining us today and a special thanks to our exceptional customers, partners, and to all LiveRampers for their ongoing hard work and support. We look forward to updating you on our progress in the coming quarters. I will now turn the call over to Lauren.

Speaker Change: Thank you again for joining us today and a special effects.

Speaker Change: Through our exceptional exceptional customers partners and all of <unk> for their ongoing hard work and support.

Speaker Change: We look forward to updating you on our progress in the coming quarters.

Speaker Change: I will now turn the call over to Lauren.

Lauren Dillard: Thanks, Scott, and thank you all for joining us. Today I will cover two topics.

Lauren Dillard: Thanks, Scott and thank you all for joining us.

Lauren Dillard: First, a review of our Q4 financial results, and second, our outlook for FY25 and Q1. Unless otherwise indicated, my remarks pertain to non-GAAP results, and growth is relative to the year-ago period, starting with Q4. We had a strong finish to FY24, with revenue and operating income exceeding our original expectations. Revenue came in at $172 million, $12 million above our guide. And operating income was $16 million, $3 million above our guide. Operating margin was 9%, and we generated $28 million in operating cash flow in the quarter and $106 million in the fiscal year. Let me provide some additional details. Please turn to slide five.

Lauren Dillard: Today I will cover two topics.

Lauren Dillard: First a review of our Q4 financial results.

Lauren Dillard: Second provide our outlook for FY 'twenty five in Q1.

Lauren Dillard: Unless otherwise indicated my remarks pertain to non-GAAP results and growth is related to the year ago period.

Lauren Dillard: Starting with Q4.

Lauren Dillard: We had a strong finish to FY 'twenty four with revenue and operating income exceeding our original expectation.

Lauren Dillard: You came in at $172 million $12 million above our guidance.

Lauren Dillard: Income was $16 3 million above our guidance.

Lauren Dillard: Operating margin was 9% and we generated $28 million in operating cash flow in the quarter and $106 million in the fiscal year.

Let me provide some additional detail.

Lauren Dillard: Please turn to slide five.

Lauren Dillard: First, as a reminder, we closed the acquisition of Habu on January 31st. Consistent with what we shared previously, the transaction contributed $2 million of revenue in the quarter, or approximately 2 points of subscription growth, and roughly $3 million of expense. As you would expect, it also positively impacted our other revenue metrics. Total revenue was $172 million, up 16%, with subscription revenue and marketplace and other revenue significantly ahead of expectations, driven primarily by continued sales execution and a stronger-than-expected digital advertising market. Subscription revenue was $134 million, up 11%.

Speaker Change: First as a reminder, we closed the acquisition of <unk> on January 31st.

Speaker Change: Consistent with what we shared previously the transaction contributed $2 million of revenue in the quarter or approximately two points and subscription growth.

Speaker Change: And roughly $3 million of expense as.

Speaker Change: As you would expect it also positively impacted our other revenue metrics.

Speaker Change: Total revenue was $172 million at 16% with subscription.

Speaker Change: <unk> revenue and market place. Another significantly ahead of expectations, driven primarily by continued sales execution and a stronger than expected digital advertising market.

Speaker Change: Subscription revenue was $134 million up 11%.

Lauren Dillard: Fixed subscription revenue was 9%, and usage as a percentage of total subscription revenue was 14%, in line with the historical 10-15% range. ARR was $467 million, up 10%, reflecting a $12 million impact from HABU and continued growth in customer upsell and new logo. Subscription net retention was 103%, two points better sequentially and ahead of our expectation. The outperformance was driven in part by Habu and by strong upsell of our clean room and connectivity products.

Speaker Change: Fixed subscription revenue was 9% and usage as a percentage of total subscription revenue was 14% in line with the historical 10% to 15% range.

Speaker Change: Error.

Speaker Change: $467 million at 10%, reflecting a $12 million impact from harvest and continued growth in customer upsell and new logo.

Speaker Change: Subscription net retention was 103% two points better sequentially and ahead of our expectation.

Speaker Change: The outperformance was driven in part by high Bill and by strong upsell of our clean room and connectivity products.

Lauren Dillard: Current RPO, or our next 12-month contracted backlog, was $414 million, up 23%. Total RPO, including contracted backlogs beyond the next 12 months, was up 20% to $566 million. As a reminder, RPO and CRPO are very sensitive to the timing of renewals and to contract duration.

Speaker Change: Current Rps or next 12 months contracted backlog was $414 million up 23%.

Speaker Change: At our IPO, including contracted backlog beyond the next 12 months does that 20% to $566 million.

Speaker Change: As a reminder, RPI Lindsay RPM are very sensitive to the timing of renewals and contract duration and given our focus on large enterprise customers and shifts to more multiyear deals.

Lauren Dillard: And given our focus on large enterprise customers and shift to more multi-year deals, both of these factors again benefited growth in the quarter. Overall, we see some positives and challenges with the current selling environment. Our pipeline continues to build nicely, and new logo activity remains strong in Q4, as Scott pointed out.

Speaker Change: These factors again benefited growth in the quarter.

Overall, we see some positive <unk>.

Speaker Change: With the current selling environment.

Speaker Change: Our pipeline continues to build nicely and new logo activity remained strong in Q4 as Scott pointed out.

Lauren Dillard: Importantly, our focus on large customers continues to yield results. In Q4, we added 10 new million-dollar-plus subscription customers, matching our all-time best quarter. That said, our average sales cycle ticked up slightly in the quarter from recent trends of eight to nine months. In addition, we continue to experience softness with smaller, low-ACD customers, both brands as well as technology platforms, including ad tech, which is experiencing some structural change.

Speaker Change: Importantly, our focus on large customers continues to yield results in.

Speaker Change: In Q4, we added 10 new million dollar plus subscription customers matching our all time best corner.

Speaker Change: That said, our average sales cycle ticked up slightly in the quarter from recent trends.

Speaker Change: Amen.

Speaker Change: In addition, we continued to experience softness with smaller low HCV customers.

Speaker Change: Brands as well as technology platform, including AD Tech that is experiencing some structural change.

Lauren Dillard: Marketplace and Other Revenue, of $38 million, increased 38%, driven by Data Marketplace, which grew 32% and accounted for 78% of Marketplace and Other Revenue. Data Marketplace growth was aided by an easy year-ago comp, as well as a healthy digital ad market, with particular strength in CTV. We also continue to see strong growth in professional services, which accounted for approximately 30% of marketplace and other growth. Moving beyond revenue, gross margin was 75%, flat year-on-year.

Speaker Change: Marketplace and other revenue of $38 million increased 38% driven by data marketplace, which grew 32% and accounted for 78% of marketplace and other revenue.

Speaker Change: Data marketplace growth was aided by an easy year ago comp as well as the healthy digital AD market with particular strength in CTV.

Speaker Change: We also continue to see strong growth in professional services, which accounted for approximately 30% of marketplace and other brands.

Moving beyond revenue gross margin was 75% flat year on year.

Lauren Dillard: Operating expenses were $113 million, up 16%, reflecting the acquisition of HABU and higher performance-based compensation. Operating income was $16 million, up from $14 million a year ago, and our operating margin was 9%. Gap's operating loss was $14 million.

Speaker Change: Operating expenses were $113 million up 16%, reflecting the acquisition of <unk> and higher performance based compensation.

Speaker Change: Operating income was $16 million up from $14 million, a year ago, and our operating margin was 9%.

Speaker Change: GAAP operating loss was $14 million.

Lauren Dillard: Stock-based compensation was $25 million, down from $45 million a year ago, which included the accelerated vesting of certain non-NEO RSUs for tax planning purposes. Operating cash flow was $28 million, down from $31 million a year ago due to higher cash taxes and working capital. For the full year, operating cash flow was $106 million, up from $34 million last year. We purchased $15 million of stock in Q4, bringing the full year buyback to $61 million. We have approximately $157 million remaining under the current authorization that expires in December of this year.

Stock based compensation was $25 million down from $45 million, a year ago, which included the accelerated vesting of certain non <unk> RF for tax planning purposes.

Speaker Change: Operating cash flow was $28 million down from $31 million, a year ago due to higher cash taxes and working capital for.

Speaker Change: For the full year operating cash flow was $106 million.

Speaker Change: Up from $34 million last year.

Speaker Change: We repurchased $15 million of stock in Q4, bringing the full year buyback to $61 million.

We have approximately $157 million remaining under the current authorization that expires in December of this year.

Lauren Dillard: In summary, Q4 was a strong finish to the fiscal year, with revenue and operating income exceeding our expectations. Growth in subscription revenue and ARR positively inflected, returning to double digits, and Subscription Net Retention was comfortably above 100%. Operating margin was stable on a reported basis and on a like-for-like basis expanded by one point. In FY24, we generated over $100 million in free cash flow for the first time in our history and returned the majority to shareholders through our share repurchase program. Please now turn to slides 12 and 13.

Speaker Change: In summary.

Speaker Change: Q4 was a strong finish to the fiscal year with revenue and operating income exceeding our expectation.

Speaker Change: Both in prescription revenue and are are positively inflected returning to double digit.

Speaker Change: Subscription net retention was comfortably above 100%.

Speaker Change: Operating margin was stable on a reported basis and on a like for like basis expanded by one point.

Speaker Change: In FY 'twenty four we generated over $100 million in free cash flow for the first time in our history and returned the majority to shareholders through our share repurchase program.

Speaker Change: Please now turn to slides 12 and 13.

Lauren Dillard: Please keep in mind our non-GAAP guidance excludes intangible amortization, stock-based compensation, and restructuring and related charges, starting with the full year. We expect revenue of between $710 and $730 million, up 8-11% year-on-year. Our revenue guidance reflects the continuation of the Q4 momentum in the fiscal first half and slightly slower revenue growth in the second half, given limited visibility into the macro, as well as the potential for cookie deprecation to cause some short-term disruption among customers.

Speaker Change: Please keep in mind, our non-GAAP guidance excludes intangible amortization stock based compensation and restructuring and related charges.

Speaker Change: Starting with the full year.

Speaker Change: Expect revenue of between 710 and $730 million.

Speaker Change: Up 8% to 11% year on year.

Speaker Change: Our revenue guidance reflects the continuation of the Q4 momentum in the fiscal first half and slightly slower revenue growth in the second half.

Speaker Change: Given limited visibility into the macro as well as the potential for cookie deprecation to cause some short term disruption among customers.

Lauren Dillard: Pre-deprecation is obviously a big change to the digital advertising market and will require the industry and our customers to adapt. However, we don't have perfect visibility into how and when our customers will adapt, particularly in the near term.

Speaker Change: Great Deprecation is obviously, a big change to the digital advertising market and will require the industry and our customers to adapt.

Speaker Change: Don't have perfect visibility into how and when our customers adapt particularly in the near term, we see both opportunities and risks associated with cookie deprecation and the wider than normal range on our revenue guide reflects that.

Lauren Dillard: We see both opportunities and risks associated with cookie deprecation, and the wider-than-normal range on our Revenue Guide reflects that. We expect subscription revenue growth to accelerate to the high single digits, and fixed subscription revenue is expected to grow high single to low double digits. Subscription usage revenue is forecasted to be roughly flat year-on-year. We also expect international subscription revenues to be down mid-teens year-on-year given our recent APAC restructuring.

Speaker Change: We expect subscription revenue growth to accelerate to the high single digits.

Speaker Change: Fixed subscription revenue is expected to grow high single to low double digits.

Speaker Change: Description usage revenue is forecasted to be roughly flat year on year.

Speaker Change: We also expect international subscription revenue to be down mid teens year on year, given our recent APAC restructuring.

Lauren Dillard: Our outlook for subscription revenue assumes net retention remains within a range of 100 to 105%, broadly consistent with the recent trend. As Scott discussed, we have several initiatives underway to improve customer retention, and we would hope that retention will improve as the year unfolds. For now, however, this is not embedded in our guidance.

Speaker Change: Our outlook for subscription revenue assumes net retention remains within a range of 100% to 105% Bradley.

Speaker Change: Broadly consistent with the recent trend.

Speaker Change: Scott discussed we have several initiatives underway to improve customer retention and we would hope that retention will improve as the year unfolds for.

Speaker Change: For now however, this is not embedded in our guidance.

Lauren Dillard: We expect marketplace and other revenue growth to be between low double digits and mid-teens. Underpinning this estimate is an expectation that data marketplace growth will be in line with or slightly above the growth in the overall digital ad market. We expect a gross margin of approximately 75%. Additionally, we expect non-GAAP operating income of between $125 and $129 million. At the midpoint, this represents 21% growth and a margin of 18%, up approximately 2%. Operating expenses are expected to increase mid to high single digits, of which the HABU acquisition accounts for approximately three points.

Speaker Change: We expect marketplace and other revenue growth to be between low double digits and mid teen.

Scott E. Howe: Underpinning. This estimate is an expectation that data marketplace growth will be in line to above the growth in the overall digital ad market.

Scott E. Howe: We expect a gross margin of approximately 75%.

Scott E. Howe: We expect non-GAAP operating income of between 125 and $129 million.

Scott E. Howe: At the midpoint this represents 21% growth and a margin of 18% up approximately two percentage points.

Scott E. Howe: Operating expenses are expected to increase mid to high single digits of which the <unk> acquisition accounts for approximately three point.

Lauren Dillard: The remaining growth reflects investments in our sales force, the cloud strategy, and scaling our partner network, partially offset by incremental savings from our offshoring initiative. We expect stock-based compensation to be $116 million, up from $71 million last year. The year-on-year increase is primarily driven by two items. First, $23 million from the normalization of accelerated vesting in FY23, and second, $12 million associated with the HABU acquisition. We expect the GAAP operating loss to be between $8 and $4 million.

Speaker Change: The remaining growth reflects investments in our sales force cloud strategy and scaling our partner network, partially offset by incremental savings from our offshoring initiatives.

Speaker Change: We expect stock based compensation to be $116 million up from $71 million last year.

Speaker Change: The year on year increase is primarily driven by two items.

Speaker Change: First $23 million from the normalization of accelerated vesting in FY 'twenty, three and second $12 million associated with the hydro acquisition.

Speaker Change: We expect GAAP operating loss to be between eight and $4 million.

Lauren Dillard: Lastly, we expect to return a significant portion of our FY25 free cash flow to shareowners through our share repurchase program. We expect to spend approximately $15 million per quarter, depending on market conditions. We believe this is a great investment and will largely offset the impact of forecasted dilution. Now, moving to Q1. We expect total revenue of $172 million, non-GAAP operating income of $25 million, and an operating margin of 15%, up 100 basis points year-on-year.

Speaker Change: Lastly, we expect to return a significant portion of our FY 'twenty five free cash flow to shareowners through our share repurchase program.

Speaker Change: We expect to spend approximately $15 million per quarter, depending on market conditions.

Speaker Change: We believe this is a great investment and will largely offset the impact of forecasted deletion.

Speaker Change: Now moving to Q1, we.

Speaker Change: We expect total revenue of $172 million non-GAAP operating income of $25 million and an operating margin of 15%.

Speaker Change: About 100 basis points year on year.

Lauren Dillard: A few other call-outs for Q1. We expect subscription revenue to be up roughly 10% and marketplace and other revenue to be up high teens year over year. We expect Q1 gross margin to be approximately 74%, and we expect staff-based compensation to be approximately 29%. Before opening the call to questions, I'll conclude with a few final thoughts.

Speaker Change: A few other call outs for Q1.

Speaker Change: We expect subscription revenue to be up roughly 10% and marketplace and other revenue should be up high teens year over year.

Speaker Change: We expect Q1 gross margin to be approximately 74% and we expect stock based compensation to be approximately $29 million.

Speaker Change: Before opening the call to questions I'll conclude with a few final thoughts.

Lauren Dillard: First, we had a very strong Q4, ahead of our expectations on both the top and bottom lines. Demonstrating Improved Sales Execution Against the Backdrop of Healthy Ad Markets and our continued commitment to efficient growth, Q4 revenue growth returned to double digits, including low double digit subscription growth. For the year, we produced over $100 million in pre-cash flow and returned the majority to shareholders through our buyback.

Speaker Change: First we had a very strong Q4 ahead of our expectations on both the top and bottom lines.

Speaker Change: Demonstrating improved sales execution against the backdrop of healthy AD market and our continued commitment to efficient growth.

Q4 revenue growth returned to double digits, including low double digit subscription growth.

Speaker Change: For the year, we produced over $100 million in free cash flow and returned the majority of the shareholders through our buyback.

Lauren Dillard: And finally, FY25 will be a year of improved subscription growth compared to last year and continued margin expansion. Our revenue guidance reflects a continuation of the Q4 momentum in the fiscal first half and slightly slower revenue in the second half, mostly in the name of conservatism. The swing factors within the revenue range will be, first, the health of the digital ad markets as it relates to our variable revenue. Second, sales execution, particularly with the assumed improvement in bookings driven by Habu in the second half. And third, customer churn and downfall relative to the modest improvement assumed in our guidance.

Speaker Change: And finally, FY 'twenty five will be a year of improved subscription growth compared to last year and continued margin expansion.

Speaker Change: Our revenue guidance reflects the continuation of the Q4 momentum in the fiscal first half and slightly softer revenue in the second half mostly in the name of conservatism.

Speaker Change: This swing factors within the revenue range will be first the health of digital AD market as it relates to our variable revenue streams.

Speaker Change: Second sales execution, particularly with the assumed improvement in bookings driven by <unk> in the second half.

Speaker Change: And third customer churn in downtown relative to the modest improvement assumed in our guidance.

Operator: With that, on behalf of all LiveRampers, thank you for joining us today, and thank you to our amazing customers. Operator, we will now open the call to questions. Thank you. The floor is now open for questions. If you have dialed in and would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star 1.

Speaker Change: With that on behalf of all <unk>. Thank you for joining us today and thank you to our amazing customers operator.

Speaker Change: Operator, we will now open the call to questions.

Operator: Thank you. The floor is now open for questions. If you have dialed in and would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, please press star 1 again. Your first question comes from the line of... Shyam Patil of Susquehanna. Your line is open.

Thank you the floor is now open for questions. If you have dialed in and we would like to ask a question. Please press star one on your telephone keypad to raise your hand and joined the queue.

Speaker Change: I'd like to withdraw your question. Please press star one again.

Speaker Change: Your first question comes from the line of.

Speaker Change: She M Michel.

Speaker Change: Your line is open.

Speaker Change: Hey, guys congrats on the nice results.

Speaker Change: I had a couple of questions on <unk>.

Speaker Change: First of all can you elaborate on the integration and the customer response relative to your initial expectations.

Speaker Change: Then second one can you remind us of your financial targets for <unk>.

Speaker Change: Fiscal 'twenty five thank you.

Scott E. Howe: Yeah, Shyam. In terms of HABU integration progress, we've done this a few times now, and we think we're pretty good at it. And it's complex, so I'll talk about a few different pieces.

Speaker Change: Yes, Sean.

Speaker Change: In terms of Habu integration progress we've done this a few times now and we think we're pretty good at it.

Speaker Change: Complex, so I'll talk about a few different pieces.

Speaker Change: First off and most importantly, as always the people integration and there we've had 100% migration of Habu employees overall live ramp and I'm really pleased I mean, this is an injection of world class talent.

Speaker Change: And fresh ideas.

Scott E. Howe: First off, and most importantly, is always the people integration. And there, we've had a 100% migration of HABU employees over to LiveRamp. And I'm really pleased. I mean, this is an injection of world-class talent and fresh ideas, which is great for our company because it brings new thinking, but it also energizes our legacy team. It's also given us some bench strength, and if you look at the Habu leadership team, many of them have already taken on expanded roles within LiveRamp, and others of them have taken on brand new challenges. An example I would give is Matt Kilmartin.

Speaker Change: Which is great for our company because it brings new thinking but it also energizes our legacy team.

Speaker Change: It's also given us some bench strength.

And if you look at the Habu leadership team many of them have already taken on expanded roles within live ramp and others of them have taken on brand new challenges and an example, I would I would give is Matt Cole Martin He's just a brilliant C O talented entrepreneur.

Scott E. Howe: He's just a brilliant CEO, a talented entrepreneur, and the acquisition has kind of freed him from the day-to-day management grind. So we're using his entrepreneurial skills to tap into it. He's going to lead the charge on new use cases and verticals. And as you know, Shyam, this is something we've talked about for a couple of years now, but we haven't ever made as much progress as we would like outside of advertising and marketing.

Speaker Change: And the acquisition is kind of freedom from the day to day management grind.

We're using his entrepreneurial skills to tap and he's going to lead the charge on new use cases and vertical and as you know Sean. This is something we've talked about for a couple of years out, but we haven't ever made as much progress as we would like.

Speaker Change: Outside of advertising and marketing and so we feel like we have a good product we got.

Scott E. Howe: And so we feel like we have a good product. With some small configuration or maybe some slight design mods, it's extendable to all kinds of other use cases. We just need someone smart and entrepreneurial, thinking about it all the time and driving the charge. And so Matt's going to do that.

Speaker Change: With some small configuration or maybe some slight design mods.

Speaker Change: Extendable to all kinds of other use cases, and we just need someone smart and entrepreneurial thinking about it all the time and driving the charge and so Matt is going to do that.

Scott E. Howe: So, I'm very excited about the people integration. The second big piece that is very visible to our clients is the product integration. And there, I'm really pleased. I mean, Habu has done a great job of building simple yet elegant technology.

Speaker Change: So very excited about the people integration the second big piece that is very visible to our clients as the product integration.

Speaker Change: And there I am really pleased I mean.

Speaker Change: Habu has done a great job of building simple yet elegant.

Speaker Change: Technology.

Scott E. Howe: And because we were starting to think about the technology integration well before we announced the deal, this was a pretty easy lift. As importantly, we brought in an influx of talented engineers who can look at our architecture and product design for the first time with fresh eyes. The CTO over at Habu, a guy named Rupak Gupta, I mean, he's just brilliant. And the conversations that we've had together, I've said, Rupak, challenge everything because that fresh thinking is going to make us better, and the intersection of Habu's technology with LiveRamp's thinking is going to lead to a better outcome for our clients. The third piece, which comes after the first two, is the pipeline.

Speaker Change: And because we were starting to think about the technology integration.

Speaker Change: Well before we announced the deal this was a pretty easy lift.

Speaker Change: As importantly, we brought in an influx of talented engineers, who can look at our architecture and product design for the first time with with fresh eyes.

Speaker Change: <unk>.

Speaker Change: The CTO over at Habu, a guy named Rupaul grouped up.

Speaker Change: Brilliant.

The conversations that we've had together as I've said rhubarb challenge everything.

Speaker Change: Because that fresh thinking is going to make us better.

Speaker Change: And the intersection of <unk> technology with live ramps thinking it's going to lead to a better outcome for our clients.

Speaker Change: The third piece, which comes after the first two is pipeline.

Scott E. Howe: And here, it came pretty quickly because, literally, within a month of the deal, we had created $30 million of pipeline. We're now up to $40 million. I would tell you that clients are intrigued. And I've spoken to a handful of our very largest clients. I've heard nothing but good things.

Speaker Change: And here came pretty quickly because literally within a month of the deal. We had created $30 million of pipeline. We're now up to $40 million I would tell you the clients are intrigued.

Speaker Change: And I've spoken to a handful of our very largest clients I've heard nothing but good things.

Scott E. Howe: And then, you know, because we've done the first three right, I think performance comes next, and I would tell you that we're on track with the deal model. Lauren can talk about that, unpack that in a little bit more detail. But, as importantly, we have a really strong line of sight to what we need to do. And we're ensuring, through pretty aggressive project management, that our teams are moving fast, and we're removing the obstacles in front of them. I don't know. What did I miss, Lauren? Yeah. Hi Shyam.

Speaker Change: And then because we've done the first three right I think performance comes next.

Speaker Change: And I would tell you that we're on track with the deal model Lauren can talk about that unpack that a little bit more detail.

Speaker Change: But as importantly, we have really strong line of sight to what we need to do.

Lauren Dillard: And we're ensuring through pretty aggressive project management that our teams are moving fast and we are removing the obstacles in front of them I don't know what I mean is Lauren yeah hi.

Lauren Dillard: With respect to the second part of your question on our financial targets, as we shared in the call, we added about $12 million of ARR in Q4, which you can think about as the inorganic contribution to growth in 2025. We continue to target $18 million of revenue in 2025. Again, this is a synergized number, so inclusive of a few million in synergies from cross-sell in the back half of the year. A point I would make, and Scott just made it as well, but, you know, HABU is being fully integrated into our platform, and given the strong opportunity for cross-sell of LiveRamp products alongside HABU, drawing the line between LiveRamp and HABU will become increasingly challenging And then just a final point, on the bottom line, we continue to target break-even on an operating income basis, which equates to about a point of dilution on operating margin in 2025.

Lauren Dillard: Yeah. Hi Shyam.

Sean: Hi, Sean with respect to the second part of your question on our financial targets as we shared in the call. We added about $12 million of <unk> in Q4, which you can think about as the inorganic contribution to growth in 'twenty five we continue to target 18 million of revenue in 'twenty.

Speaker Change: Again this is a synergize numbers, so inclusive of a few million dollars.

Speaker Change: Synergies from cross sell in the back half of the year.

Speaker Change: Point I would make and then Scott just made it as well, but we will hover has been fully integrated into our platform and given the strong opportunity for cross sell of live ramp products alongside Habu, drawing the line between <unk> and <unk> will be kind of increasingly challenging as we move through the year and then just.

Speaker Change: A final point on the bottom line, we continue to target breakeven on an op income basis, which equates to about a point of dilution on an op margin in 25.

Speaker Change: Great. Thank you guys.

Operator: Your next question comes from the line of Jason Kreyer of Craig Helm Capital Group. Your line is open.

Speaker Change: Your next question comes from the line of Jason <unk> of Craig Hallum Capital Group. Your line is open.

Scott E. Howe: I'm going to just stick with Habu. You know, we've talked about that the last couple of months as kind of being a plug-and-play solution for smaller marketers. Just curious, any updates on that? Any progress with smaller customers in the quarter, or what we should anticipate for the evolution of that being a better solution for the lower end of the market?

Jason Michael Kreyer: Just sticking with Habu, we've talked about that the last couple of months as kind of being a plug and play solution for smaller marketers just curious any updates on that any progress with smaller customers in the quarter or what we should anticipate for the evolution of that that being a better solution for that the lower end of the market.

Scott E. Howe: Yeah, I mean, that's certainly part of our pipeline, and, you know, no particular updates in terms of new clients to share that I didn't talk about in my prepared remarks. So I feel pretty good about that.

Speaker Change: Yes, I mean, thats certainly part of our pipeline.

Speaker Change: No particular updates in terms of new clients to share.

Speaker Change: Didn't talk about in my prepared remarks, so I feel pretty good about that I. Ultimately think one of the bigger catalyst is still out in front of us.

Scott E. Howe: I ultimately think one of the bigger catalysts is still out in front of us. I believe that when we get across the finish line on cookie deprecation, that's going to be the biggest catalyst that we've seen for adoption of a data collaboration platform because you need one in order to activate DV360, and DV360 is the market share leader along with, you know, Amazon's DSP. It drives the most tonnage on most media plans.

Speaker Change: I believe that when we get across the finish line on cookie deprecation, that's going to be the biggest catalyst that we've seen for adoption of a data collaboration platform because you need one.

Speaker Change: Order to activate and DB $3 60, and <unk> 360.

Speaker Change: Is the market share leader along with Amazon's DSP.

Speaker Change: It drives the most tonnage on most media plans.

Scott E. Howe: So most advertisers are going to have to embrace what we do if they want to avoid disruption in their advertising efforts. So we're a little bit bummed about the slowdown in deprecation, probably most so because, having planned for this for five years, I just want it behind us and to start talking about the glorious future as opposed to what's to come. But I think all good things are in store for the future of clean rooms.

Speaker Change: So most advertisers are going to have to embrace.

Speaker Change: What we do.

Speaker Change: If they want to avoid disruption in their advertising efforts.

Speaker Change: So we're a little bit bummed about the slowdown in deprecation, probably most though because.

Speaker Change: Having planned for this for five years I, just want it behind us and to start talking about the glorious future as opposed to what's to come but.

Speaker Change: I think.

Speaker Change: All good things in store for the future of clean rooms.

Scott E. Howe: Thanks, Scott. And then, like a month ago, Google announced that they're moving Pair to an open source platform in conjunction with the IAB. Just curious if there are any implications there. I'm wondering if this kind of broadens the reach of Pair by expanding the developer network and making it available to more, you know, more developers. But curious about your thoughts on the opportunity. Well, we'd sure like to think so.

Speaker Change: Thanks, Scott and then like a month ago, Google announced that they're moving pair to an open source platform in conjunction with the Iab. Just curious if there are any implications there I'm wondering if this kind of broadens the reach of payer by expanding the developer.

Speaker Change: Network, and making it available to more more developers, but just curious your thoughts on the opportunity.

Scott E. Howe: Well, we'd sure like to think so. I love the fact that Google open-sourced that and put it into the hands of the IAB. The more standardization that there is around adoption of authenticated ways to buy, bifurcated consents at both the buyer and seller side, that's the future; getting consented users. And so the more that that can take wing, not just with Google, but with major CTV players, with all the social media platforms, it's just better for the entire industry.

Speaker Change: We'd sure like to think so I love, the fact that Google open source that and put their hands and put it into the hands of the iab the more standardization that there is around.

Speaker Change: The option of.

Speaker Change: <unk> ways to buy.

Speaker Change: Bifurcated 10, stents at both the buyer and seller side.

Speaker Change: That's the future.

Speaker Change: As to get consented users and so the more that that can take winning not just with Google.

Speaker Change: But with major CTV players with all the social media platforms.

Speaker Change: Better for the entire industry, but fuels more standardization and we've seen the great returns that you get through pear and it's a pretty significant lift not just for advertisers, but also for publishers in terms of their yield so everything that Google can do to spread adoption.

Scott E. Howe: It fuels more standardization, and we've seen the great returns that you get through pairing. It's a pretty significant lift, not just for advertisers, but also for publishers in terms of their yield. So everything that Google can do to spread adoption is something we're cheering for. And I should also just say, I mean, a big chunk of our summer here at LiveRamp is going to be spent out in the road evangelizing. We'll take use of the extra time Google afforded with their product deprecation timeline to educate and evangelize the offering in the market, in many cases with Google. So we'll be doing some stuff with them at Cannes next month, and just a lot of road shows, seminars, things like that to ensure that the market's ready.

Speaker Change: Something we're we're cheering for and I should also just say I mean, a big chunk of our summer here at live ramp is going to be spent.

Speaker Change: And the road evangelizing will take use of the extra time, Google afforded with their their pair deprecation timeline.

Speaker Change: To educate and evangelize the offerings in the market in many cases with Google.

Speaker Change: So we'll be doing some stuff with them. It can in next month.

Speaker Change: And.

Speaker Change: Just a lot of road shows seminars things like that to ensure that the market is ready.

Operator: Your next question comes from the line of Elizabeth Porter of Morgan Stanley. Your line is open.

Your next question comes from the line of Elizabeth Porter of Morgan Stanley. Your line is open.

Scott E. Howe: Great, thank you so much. I just wanted to follow up on your comment about kind of the bigger catalyst being data collaboration and really needing it for DV360. I understand that the timeline to recognize some of this opportunity has been pushed out a bit, but any sort of framework you're providing in terms of how to think about sizing the opportunity tied with PAIR and how that could impact LiveRamp? Yeah.

Elizabeth Mary Elliott Porter: Thank you so much I guess I wanted to follow up on your comment about kind of a bigger catalysts being data collaboration and really needing it for <unk> 16.

Speaker Change: Understand that the timeline to recognize some of this opportunity has been pushed out a bit but any sort of framework you are providing in terms of how to think about sizing the opportunity tied with per and how it could impact library.

Scott E. Howe: Yeah, well, first off, Elizabeth, and I'm sure that Lauren can dive into this a little bit more. I would tell you, if you look at our guidance, we're being what we think is appropriately conservative with respect to PEAR. And with the timeline now really sifting into the last quarter of our fiscal year, so that January to March timeline, you know, we won't see a huge impact of it on our year this year.

Speaker Change: Yes, well first off Elizabeth and I am sure that Lauren can dive into this a little bit more I would tell you if you look at.

Speaker Change: Our guidance I mean, we're we're being what we think is appropriately conservative with respect to pair.

Speaker Change: And with the timeline now really shifting into the last quarter of our fiscal year. So that January to March timeline.

Speaker Change: Yes, we won't see a huge impact of it in our year. This year, but we've been very what we think appropriately conservative because there's just going to be goes ins and goes outs.

Scott E. Howe: But we've been very, what we think appropriately conservative, because there's just going to be gizzins and gizzouts. Remember that you have an entire industry that was built on cookies and has operated on them for the last 30 years. And we have nine months to get them fully ready for the cutover.

Speaker Change: Remember that you have an entire industry that was built on cookies and has operated on them for the last 30 years.

And we got nine months.

Speaker Change: To get them fully ready for the cutover.

Scott E. Howe: And my guess is we'll be pretty successful with the sophisticated advertisers, but there's probably going to be a lot in the industry who won't be ready. And so it'll be interesting come next calendar Q1 to see how that plays out. It wouldn't surprise me if there's, you know, a stall as folks figure out what they're doing operationally before there's an acceleration. That said, as you know, Elizabeth, we're out in the market telling folks not to wait.

Speaker Change: And my guess is we'll be pretty successful with the sophisticated advertisers, but there is probably going to be a lot in the industry who.

Speaker Change: Won't be ready.

Speaker Change: So it'll be interesting come next calendar Q1 to see how that plays out it wouldn't surprise me if there is a <unk>.

Speaker Change: Stall as folks figure out what theyre doing operationally before there is an acceleration.

Speaker Change:

Speaker Change: That said.

Speaker Change: As you know Elizabeth went out in the market, telling folks not to wait.

Scott E. Howe: Because the same techniques that can be utilized in pair, it's just an extension of what folks are doing with cookies today, but it gets you pretty significant incremental reach because it allows you to reach the consented users on Firefox and Edge and Safari, and that drives a pretty significant increase in performance.

Speaker Change: Because the same techniques that can be utilized in pair. It's just an extension of what folks are doing in cookies today, but it gets you pretty significant incremental reach because it allows you to reach the consented users on Firefox.

Speaker Change: And so foray and that drives a pretty significant increase in performance.

Speaker Change: So.

Scott E. Howe: We're going to try really hard to prepare the industry and get them converted well before next Q1, but I think it's a little bit unpredictable. Now, the last thing I would say is, you know, initially, we think that we'll see the first impact on just usage because people will switch from cookies to true authentication and everything that they do. It'll make our existing clients even stickier, and it might drive some incremental usage.

Speaker Change: We're going to try really hard to prepare the industry and get them converted well before <unk>.

Speaker Change: <unk> Q1.

Speaker Change: But I just think it's a little bit unpredictable now the law.

Speaker Change: Last thing I would say.

Speaker Change: As you know initially we think that we'll see.

Speaker Change: The first impact on just usage because people will switch from cookies.

Speaker Change: True authentication and everything that they do it will make our existing clients even stickier it might drive some incremental usage, that's particularly true as authenticated met methods extend to the major CTV providers.

Scott E. Howe: That's particularly true as authenticated methods extend to the major CTV providers. But then, you know, the next catalyst will really not be seen in our subscription usage as much as just clean room adoption. We think that virtually everybody is going to need a clean room to do the kind of advertising, addressable advertising, that they've grown used to. And that should be a catalyst for us both in the U.S. to win potential new clients, but then also internationally, where, you know, in many cases, Google's market share internationally, DV360's market share internationally, is much higher than it is here in the U.S.

Speaker Change: But then the next catalyst will really be not seen in our subscription usage as much as just clean room adoption.

Speaker Change: We think that virtually everybody is going to need to have a clean room to do the kind of advertising addressable advertising that they've grown used to.

Speaker Change: And that should be a catalyst for us.

Speaker Change: Both in the U S.

Speaker Change: When potential new clients, but then also internationally where in many cases googles market share internationally DB $3. Six these market share internationally is much higher than it is here in the U S.

Speaker Change: Okay.

Lauren Dillard: Great, thank you so much. And just as a quick follow-up, it was great to see the new logos start to increase quarter over quarter after being flat to down earlier in the year. So could you just talk about kind of where the incremental kind of customers are coming from? Is this momentum with cloud partners, like Habu? And how should we think about just the durability of net ads?

Speaker Change: Great. Thank you so much and just as a quick follow up it was good to get a new logo. It would start to increase quarter over quarter after being flat to down earlier in the year. So could you just talk about kind of where are the incremental kind of customers coming from is this momentum cloud partners kind of <unk> and how should we think about just the durability of net adds.

Lauren Dillard: Yeah. Hi Elizabeth. Lauren here.

Speaker Change: Yeah, Hey, Elizabeth Moran here, Great question and as we've mentioned in the past there are a lot of moving pieces with respect to customer adds and how does that benefit this metric in the quarter.

Lauren Dillard: Great question. And as we've mentioned in the past, there are a lot of moving pieces with respect to customer ads, and HABU did benefit this metric in the quarter. On an organic basis, customer count was roughly stable in Q4, and the trends that we have been seeing in recent quarters played out again in Q4, which is continued strength in high ACB brand customers, partially offset by continued pressure with lower ACB customers, particularly in the ad tech cohort.

Speaker Change: On an organic basis customer count was roughly stable in Q4 and the trends that we have.

Speaker Change: <unk> been seeing in recent quarters played out again in Q4, which is continued strength in high ECB brand customers.

Speaker Change: Partially offset by continued pressure with lower HCV customers, particularly in the AD Tech, California.

Lauren Dillard: As we look ahead to FY25, we would expect the overall customer count to be somewhat muted, again, given the dynamics that I just mentioned. That said, and we've discussed this in recent quarters, we have shifted our sales focus to larger, higher LTV brand customers over the past year-plus, and you really see that play out in metrics like our $100 million customer count, which grew nicely in FY24, and we would expect to continue to grow nicely into FY25.

Speaker Change: We look ahead to FY 'twenty five we would expect overall customer count.

Speaker Change: To be somewhat muted.

Speaker Change: Again, given given the dynamics that I just mentioned.

Speaker Change: That said and we've discussed this in recent quarters, we have shifted our sales focus to larger higher LTV brand customers over the past year, plus and you really see that play out in metrics like our $100 million customer count, which grew nicely in FY 'twenty four and we would expect to continue to.

Speaker Change: Grow nicely into FY 'twenty five.

Speaker Change: Great. Thank you so much.

Operator: Great. Thank you so much.

Operator: Your next question comes from the line of Mark Zgutowicz of Benchmark. Your line is open.

Speaker Change: Your next question comes from the line of Mark <unk> of benchmark. Your line is open.

Scott E. Howe: Thank you. Hi Scott and Lauren, congratulations on an exceptional quarter.

Speaker Change: Thank you Hi, Scott Loren congrats on an exceptional quarter.

Speaker Change: Just to just a.

Mark John Zgutowicz: Couple of questions from me on the <unk>.

Scott E. Howe: Just a couple questions from me. On the pipeline, 30 million, I guess it's 40 million now since the Haboo acquisition. I'm curious if you think about what's driving this maybe this split between demand for walled garden, self-service, cloud interoperability from your existing clients versus New Verticals Accelerating Subscription Outside of Retail and CPG. If you could maybe provide some color there, it'd be helpful.

Speaker Change: $30 million 40 million now.

Since the <unk>.

Speaker Change: Acquisition I'm curious if you think about what's driving that maybe a split between demand for walled garden self service cloud interoperability from your existing clients versus.

Speaker Change: New verticals.

Speaker Change: Accelerating subscription outside of retail and CPG. If you could maybe provide some color there would be helpful.

Scott E. Howe: Yeah, it really is both. So if I think back, you know, a year, two years ago, we obviously had a lot of success powering the retail media networks. But even in my prepared remarks, you know, the examples that I gave went beyond retail. So I talked about a pharmaceutical company, for instance. And, you know, we're also doing that.

Speaker Change: Yeah. It really is both.

Speaker Change: So if I think back a year or two years ago.

Speaker Change: We obviously had a lot of success.

Speaker Change: Powering the retail media networks.

Speaker Change: But even in my prepared remarks.

Speaker Change: Examples that I gave went beyond <unk>.

Speaker Change: Retail sorry.

Speaker Change: So I talked about.

Speaker Change: Our pharmaceutical for instance, a company.

Speaker Change: And we're also doing some really interesting things in travel and not surprisingly some of the most interesting things that we're starting to talk about and you're starting to see.

Scott E. Howe: some really interesting things in travel. And not surprisingly, some of the most interesting things that we're starting to talk about and you're starting to see are actually in the entertainment space. You know, it's the case that as you think about a world where increasingly first-party data is going to be really important, well, who has great sources of first-party data? The major publishers, and they're not all named Google and Facebook. Think about all of the CTV providers that you authenticate every time you log in.

Speaker Change: Or actually in the entertainment space.

Speaker Change: It's the case that as you think about a world that increasingly.

Speaker Change: First party data is going to be really important dwell who has great sources of first party data the.

Speaker Change: The major publishers.

Speaker Change: Not all named.

Speaker Change: Google.

Speaker Change: And Facebook.

Speaker Change: Think about all of the CTV providers.

Speaker Change: That you authenticate every time you log in they have deep viewership information.

Scott E. Howe: They have deep viewership information, and they know a lot of demographic information as well. And so, you know, kind of the clean room capabilities that any advertiser can spin up with those destinations are pretty powerful. So I think retail and packaged goods gave every other industry a roadmap to follow here.

Speaker Change: And they know a lot of demographic information as well and so kind of the clean room capabilities that any advertiser can spin up with those destinations is pretty powerful.

Speaker Change: So I think retail.

Speaker Change: Packaged goods gave every other industry a roadmap to follow here.

Lauren Dillard: And, Mark, maybe just to put some additional color on that, if we look at the collaboration or clean room deals we won in Q4, about half were with retail and CPG, but half were with the companies that Scott just mentioned, so publishers, travel and entertainment companies, automotive companies, healthcare, and if we look at the composition of our pipeline and the pipeline created, it kind of mirrors that split.

Speaker Change: Mark maybe just to put.

Speaker Change: Some additional color against that if we if we look at the collaboration or clean room deals we won in Q4.

Speaker Change: About half.

Speaker Change: With retail and CPG, but have where with the companies that Scott just mentioned, so publishers travel and entertainment company is automotive companies healthcare and if we look at the composition of our pipeline and the pipeline created it kind of mirrors that that split.

Scott E. Howe: God, that's helpful. And maybe on the new verticals, is it too early to start talking about, you know, a potential sizable TAM expansion here, you know, outside of the CPG and retail meetings? Do you have adequate sales capacity to sort of address these newer verticals, is that expanding? And will that sort of TAM expand as you add more capacity there? Or is that just a learning curve? Or, with those industries, does that just take time?

Speaker Change #100: Got it that's helpful and maybe on the on the new verticals is it too early to start talking about.

Speaker Change #101: <unk> sizable Tam expansion here outside of the.

Speaker Change #102: CPG and retail, meaning do you have adequate sales capacity to sort of address.

Speaker Change #103: These newer verticals is that expanding and will that sort of Tam expand as you add more capacity there or what.

Is that just a learning curve or with those industries and that just takes time.

Scott E. Howe: I feel really fortunate. I think we're a little bit ahead of this one because, if you recall, a couple years ago during the Great Resignation, we really saw a big exodus for a short period of time from our sales force, and we used that opportunity when we backfilled to remake our sales force. We actually created vertical industry groups. So now we have a retail group. We have a financial services group. We have experts in travel. And that's so important.

Speaker Change #103: I feel really fortunate I think we're a little bit ahead of this one because if you recall a couple of years ago during the great resignation.

We really saw a big exodus for a short period of time to our sales force and we use that opportunity.

Speaker Change #103: When we backfill to remake our sales force, we actually created.

Speaker Change #103: Vertical industry groups.

Speaker Change #103: So now we have a retail group, we have a financial services group, we have experts in travel.

Scott E. Howe: When LiveRamp was formed, we used to be able to go in and wow people just talking about the technology. But now, increasingly, particularly given the fact that we have higher-level audiences within the clients we're calling on, oftentimes it's the CMO or the CEO, we have to go in and talk in their language.

Speaker Change #103: And that's so important.

Speaker Change #103: We and live ramp was formed we used to be able to go in and while people are just talking about the technology.

Speaker Change #103: But now increasingly particularly given the fact that we have higher level audiences within the clients were calling on oftentimes, it's the CMO or the CEO, we have to go in and talking their language. We have to understand how does the airline industry work for example, how do airlines make money in future.

Scott E. Howe: We have to understand how the airline industry works, for example. How will airlines make money in the future? How are they going to monetize their screens on their seat backs and personal entertainment devices that you use in flight? And so by hiring that way for the last couple years, I think it's actually improved our sales productivity and actually driven some of the success we're seeing in these new verticals.

Speaker Change #103: Sure.

Speaker Change #103: Are they going to monetize their screens on their seatbacks and personal entertainment devices that you use in flight.

Speaker Change #103: And so by hiring that way for the last couple of years I think it's actually improved our sales productivity and actually driven some of the success. We're seeing in these new verticals.

Operator: Sounds great. Thanks very much. I appreciate it.

Speaker Change #104: Sounds great. Thanks, very much I appreciate it.

Mark: Thanks Mark.

Operator: Your next question comes from the line of Kirk Materne of Evercore ISI. Your line is open.

Speaker Change #106: Your next question comes from the line of Kirk <unk> of Evercore ISI. Your line is open.

Operator: Yeah, hi, Scott. Hi, Lawrence. This is actually Peter Berkley on for Kirk.

Speaker Change #106: Yes, I've got how long this is actually Peter Berkeley on for Kirk I'll Echo My congrats on a nice quarter Peter.

Speaker Change #106: Peter.

Speaker Change #107: So all Apple Eyecare couple metrics that really stood out.

Speaker Change #108: The large company without the million dollar customers and then at our acceleration so.

Scott E. Howe: I'll echo my congratulations on our next quarter. You know, so a lot to like here, a couple metrics that really stood out to us, you know, the large customer growth to $9 customers and then the NRR acceleration. So, Scott, maybe I'm hoping I can start with you just on the large customer growth. Does this feel like a broader, you know, opening up of wallets dynamic, or is this reflective of, you know, the strong momentum in the data collaboration platform, which is generally, you know, larger deal sizes?

Speaker Change #109: Maybe I'm, hoping I can start with you just on the large customer growth does this feel like a broader.

Speaker Change #109: Opening up of wallets dynamic or is this reflective of that.

Speaker Change #109: Growing momentum in the data collaboration platform, which are generally larger deal sizes.

Speaker Change #109: And then Lori maybe just a second one on the NR or metric you know understanding the color on <unk> contribution and assuming the large customers are acting as a tailwind here, but I'm curious.

Speaker Change #110: Pressure on the IRR has been.

Speaker Change #111: Contraction at the at the lower segment of the market.

Speaker Change #112: Of your customer base and it sounds like that sort of continuing on but I'm just curious given the acceleration in kind of the go forward color does it feel like that sort of stabilizing or perhaps even inflect inked up in terms of that lower customer contraction in.

Just a little bit more trouble at below it.

Scott E. Howe: And then Lauren, maybe just as a second one, on the NRR metric, you know, understanding the color on Habu's contribution and assuming the large customers are acting as a tailwind here. But I'm curious what the sort of pressure on the NRR has been, you know, contraction at the lower segment of the market. And it sounds like that's sort of continuing on. But I'm just curious, given the acceleration and, you know, kind of the go-forward color, does it feel like that's sort of stabilizing or perhaps even inflecting, just in terms of that lower customer contraction and, you know, just a little bit more trouble at the low end? Yeah, so Peter, I'll start with the first.

Speaker Change #113: Yes, so Peter I'll start with the first if you looked at our cohort of largest clients these million dollar.

Scott E. Howe: If you looked at our cohort of largest clients, these million-dollar-plus-a-year spenders, I think you would recognize almost every single one of them as being kind of major advertisers, brands that you trust, really strong consumer brands. And we did a detailed analysis of, we did a big customer segmentation about a year ago. And what we found is that those sophisticated, large spenders share some characteristics in common. You know, they're obviously more profitable to us.

Speaker Change #113: Plus a year spenders I think you would recognize almost every single one of them as being kind of out.

Speaker Change #113: Major advertisers.

Speaker Change #113: Brands that you trust really strong consumer brands.

Speaker Change #113: And we did a detailed analysis of.

Speaker Change #113: We did a big customer segmentation about a year ago.

Speaker Change #113: And what we found.

Speaker Change #113: Is that those sophisticated large spenders shares some characteristics in common.

Speaker Change #113: There are obviously more profitable to us.

Speaker Change #113: The churn rate for those is significantly less but the most interesting insight was the number of activations that they had and for the largest clients I can't remember exactly the number but it was in excess of 18.

Scott E. Howe: The churn rate for those is significantly less. But the most interesting insight was the number of activations that they had. For the largest clients, I can't remember exactly the number, but it was in excess of 18 activations that they had.

Speaker Change #113: Activations that they had.

Scott E. Howe: And when you have 18 activations, you're lighting up different destinations, maybe points of sale, certainly a lot of different properties. You're a lot more sophisticated about what to do with your data. You probably are much more likely to want to have a clean room and set up data collaboration with partners. You're certainly much more likely to want measurement back.

Speaker Change #113: And when you have 18, activations you're lighting up.

Speaker Change #113: Different.

Speaker Change #113: Destinations, maybe point of sale certainly a lot of different properties.

Speaker Change #113: Youre a lot more sophisticated about what to do with your data.

Speaker Change #113: <unk> probably are much more likely to.

Speaker Change #113: To want to have a clean room and setup data collaboration with partners.

Speaker Change #113: Certainly much more likely.

Two what measurement back.

Scott E. Howe: And so they just start becoming power users. And so I don't think it's a function of the macro or budgets becoming easier to get or anything like that. I think it's just a function of those are more sophisticated companies. They've learned how to use their data effectively. And they're trying to do even more with their data. Our challenge internally is, how do we get some of our smaller companies to look more like those big companies? So we're kind of laser focused on making sure that everybody activates more destinations on their media plan, which is going to lead them to adopt more usage with us.

Speaker Change #113: And so they just start becoming power users.

Speaker Change #114: And so I don't think it's a function of.

Speaker Change #114: The macro or budgets.

Speaker Change #114: Becoming.

Speaker Change #114: Easier to get or anything like that I think it's just a function of those are more sophisticated companies they've learned how to use their data effectively and they're trying to do even more with their data. Our challenge internally is how do we get some of our smaller companies to look.

Speaker Change #114: More like those big companies so.

Speaker Change #114: We're kind of laser focused on.

Making sure that everybody activates more destinations on their media plan.

Speaker Change #114: Which is going to lead them to adopt more usage with us.

Lauren Dillard: And Peter, with respect to your question on NRR, I will just again point out that Habu contributed a couple points to NRR in the quarter. Outside of that, we are seeing some stabilization with our lower ACB customer cohort, but the bigger driver continues just to be stronger contribution from Upsell with our largest customers as they adopt clean room and collaboration uses.

Speaker Change #115: And Peter with respect to your question on on NR.

Speaker Change #116: I will just again point out that Habu contributed a couple of points to <unk> in the quarter.

Speaker Change #116: Outside of that we are seeing some stabilization with with our lower ACB customer cohorts, but the bigger driver continues to be stronger contribution from upsell with our largest customers as they adopt clean rounding collaboration use cases.

Very helpful to think about.

Operator: Thank you both. Operator, we have time for one more question.

Speaker Change #117: Operator, we have time for one more question.

Operator: Your last question comes from the line of Brian Fitzgerald of Wells Fargo. Your line is open.

Speaker Change #118: Your last question comes from the line of Brian Fitzgerald of Wells Fargo. Your line is open.

Scott E. Howe: Thanks. Scott, I want to follow up on your pairs commentary. Obviously, there are thousands of DV customers out there, and it seems like DV360 customers need to use pairs, target ads, offer first-party data, and measure performance after deprecation. Has Google built free tools to access PAIR via data hubs or otherwise?

Thanks, Scott I wanted to follow up on that.

Brian Nicholas Fitzgerald: Your parents commentary, obviously, there are thousands of DVD customers out there and it seems like maybe three six and customers need to use there.

Brian Nicholas Fitzgerald: Ads off of first party data and measure performance at the deprecation.

Speaker Change #120: As Google built three tools.

Speaker Change #121: <unk> per.

Speaker Change #121: Via data hubs or otherwise.

Scott E. Howe: It seems like you are far and away the most important partner for Google's messaging about PAIRs. The announcement, NBCU, and so on, and customers more or less need to adopt it. Is that a correct way to view the opportunity? [inaudible]

It seems like you are far and away. The most important partner for Google's messaging about pairs the announcement with NBC, you and so on and customers more or less need to adopt.

Speaker Change #121: A correct way to view the opportunity.

Speaker Change #121: Statements.

Speaker Change #121: Or are there other considerations free tools more clean room partners likely be named overtime and any any other reason.

Speaker Change #121: Look at it more conservatively.

Scott E. Howe: I'm sure that there will be more partners over time. We were fortunate to be one of what are now two launch partners, Habu and LiveRamp, and then there was a third. So we actually comprised two-thirds, I guess, of the original launch partners for this. And the deal is, they're not building the technology. Rather, they're mandating that someone who does pairing has a cleanroom partner.

Speaker Change #121: I am sure that there'll be more partners over time, we were fortunate.

Speaker Change #122: B what of what are now to launch partners Habu live ramp and then there was a third.

So we actually comprised two thirds I guess of the original launch.

Speaker Change #122: Partners for this in.

The deal is theyre not building the technology, rather they're mandating that someone who does pairing.

Speaker Change #123: As a clean room partner Google.

Scott E. Howe: And Google wants to be agnostic about this, and they want to ensure that, on both sides, the consents have been obtained and handle the security and anonymity that occurs. Now, all that said, I would tell you anecdotally that it felt like for a long time we were having a lot of conversations with the Google product team, and we were really involved going back and forth with suggestions around their design and doing a lot of process mapping.

Speaker Change #124: Google wants to be agnostic in this.

Speaker Change #124: And they want to ensure that someone can ensure that on both sides. The consents have been obtained and handle the security and optimization that occurs.

Speaker Change #124: Now all that said I would tell you anecdotally that it felt like for a long time, we were having a lot of conversations with the Google product team.

Speaker Change #124: And we were really involved going back and forth with suggestions around their design and.

Speaker Change #124: Doing a lot of process mapping.

Speaker Change #124: Since January.

Speaker Change #124: The switches really flipped on with the Google commercial teams.

Scott E. Howe: For example, they invited me to come speak to their sales leadership in New York about a month ago, and likewise, their AdPlat sales leader came and spoke to LiveRamp's entire sales organization when we had our sales kickoff a few weeks ago. We're going to be out in the market with them, educating and evangelizing. I mentioned we'll do some stuff with them at CAN, which is coming up here in a couple weeks

Speaker Change #124: For example, they invited me to come.

Speaker Change #124: Come speak to their sales leadership in New York.

Speaker Change #124: A month ago and likewise.

Speaker Change #124: Their add plat sales leader came and spoke to lie ramps entire sales organization. When we had our sales kickoff a few few weeks ago.

Speaker Change #124: We're going to be out in market with them.

Speaker Change #124: Katy and evangelizing that mentioned.

Speaker Change #124: We'll do some stuff with them it can which is coming up here in a couple of weeks.

Scott E. Howe: And then we have a lot more things planned to educate and evangelize. I think the biggest barrier here isn't the technology at all. It is just the inertia of 30 years of people using cookies and just educating them that there is a better way. And although it requires a process switch, and that may be painful, as soon as you do it, you unlock better results. So those will be the key messages you'll hear both from Google and from us in the coming weeks.

Speaker Change #124: And then we have a lot more things planned educate and then evangelize I think the biggest barrier here isn't the technology at all it is just kind of.

Scott E. Howe: Got it. I appreciate it.

Speaker Change #124: And neuro Shah of <unk>.

Speaker Change #124: 30 years of people using cookies.

Speaker Change #124: And just educating them that there's a better way.

Speaker Change #124: And although it requires a process switch in that.

Speaker Change #124: That may be painful.

Speaker Change #124: As soon as you do it you unlock better results.

Speaker Change #124: That will be the key messages, you'll hear both from Google and from us in the coming months.

Speaker Change #125: Got it I appreciate it.

Lauren Dillard: I'll now turn the call back over to Lauren Dillard for her closing remarks.

Speaker Change #125: I'll now turn the call back over to Lauren Dillard for closing remarks.

Lauren Dillard: Thanks so much. In closing, we ended FY24 on a high note with both revenue and operating profit outperforming our original expectations. As we look ahead, FY25 will be a year of improving subscription growth and continued margin expansion. Our revenue guidance reflects a continuation of the Q4 momentum in the fiscal first half and slightly slower revenue growth in the second half, mostly in the name of conservatism. With that, thanks again for joining us today. We look forward to updating you on our continued progress in the quarters ahead.

Lauren Dillard: Thanks, so much so in closing we ended FY 'twenty four and a high note with both revenue and operating profit outperforming our original expectations. As we look ahead FY 'twenty five will be a year of improving subscription growth and continued margin expansion. Our revenue guidance reflects the continuation of the queue for a moment.

Tim: Tim in the fiscal first half and slightly slower revenue growth in the second half mostly in the name of conservatism.

Tim: With that thanks again for joining US today, we look forward to updating you on our continued progress.

Tim: And the quarters ahead.

Operator: This concludes today's conference call. You may now disconnect.

Speaker Change #127: This concludes today's conference call you may now disconnect.

Speaker Change #127: [music].