CORRECTION -- LiveRamp Announces Fourth Quarter and Fiscal Year 2025 Results

LiveRamp (RAMP) reported Q4 revenue up 10% year-over-year to $189 million and FY25 revenue up 13% to $746 million, with CEO Scott Howe noting Q4 revenue and operating income exceeded expectations. Operating cash flow reached a record high for the fiscal year, increasing 46% to $154 million, while the company repurchased $101 million in shares. LiveRamp anticipates Q1 fiscal 2026 revenue of $191 million, a 9% increase, and projects full-year revenue between $787 million and $817 million, representing a 6-10% increase.

Analysis

LiveRamp (NYSE: RAMP) reported a strong fiscal year 2025, with Q4 revenue increasing 10% year-over-year to $189 million, exceeding internal expectations, and full-year revenue climbing 13% to $746 million. A notable highlight was the 46% year-over-year surge in FY25 operating cash flow to $154 million, reaching a record high. The company also demonstrated commitment to shareholder returns by repurchasing $101 million in shares during FY25, with $256 million remaining under its authorization. While GAAP gross margins experienced compression in Q4 (69%, down 3 ppt) and for the full year (71%, down 2 ppt), Non-GAAP operating income showed robust growth, with Q4 Non-GAAP operating margin expanding 3 percentage points to 12% and FY25 Non-GAAP operating margin expanding 2 percentage points to 18%. Key forward-looking indicators were positive: Q4 Annualized Recurring Revenue (ARR) grew 8% to $504 million, and Current Remaining Performance Obligations (CRPO) increased 14% to $471 million. The company is also making strategic adjustments, including a workforce restructuring affecting approximately 5% of employees aimed at enhancing profitability, and launching new products like Cross-Media Intelligence to address evolving market needs, particularly in light of Google's revised stance on third-party cookies. The number of customers with annualized subscription revenue over $1 million increased to 128 from 115, though total direct subscription customers declined to 840 from 900. For fiscal 2026, LiveRamp projects revenue between $787 million and $817 million (a 6% to 10% increase) and continued growth in Non-GAAP operating income to between $178 million and $182 million, reflecting cautious optimism despite acknowledging near-term macroeconomic uncertainties.

Key Decisions for Investors

• Investors should note the company's consistent revenue growth, strong operating cash flow generation, and active share repurchase program as positive indicators, while also monitoring the impact of GAAP gross margin compression.
• Consider the progress of strategic initiatives such as the workforce restructuring on improving profitability and the market adoption of new solutions like Cross-Media Intelligence, especially in the context of evolving data privacy and ad-tech landscapes.
• Evaluate the forward-looking guidance for FY26, which suggests continued growth, and closely track key metrics including ARR, CRPO, subscription net retention, and the trend in direct subscription customer numbers to gauge sustained business momentum amidst macroeconomic uncertainties.