LiveRamp (RAMP) - 2025 Q2 - Quarterly Results

LiveRamp Q2 FY25 Earnings Release Q2 FY25 Financial Highlights LiveRamp reported strong Q2 FY25 results with total revenue growing 16% year-over-year to $185 million, marking the third consecutive quarter of double-digit growth, alongside expanded non-GAAP operating margin and significant net cash generation Q2 FY25 Key Financial Results | Metric | Q2 FY25 | YoY Change | | :--- | :--- | :--- | | Total Revenue | $185 million | +16% | | Subscription Revenue | $143 million | +14% | | Marketplace & Other Revenue | $42 million | +23% | | GAAP Operating Income | $7 million | -12.5% | | Non-GAAP Operating Income | $41 million | +28.1% | | GAAP Diluted EPS | $0.03 | -57.1% | | Non-GAAP Diluted EPS | $0.51 | +18.6% | | Net Cash from Operating Activities | $56 million | +55.6% | - The company repurchased approximately 1.9 million shares for $50 million in Q2, bringing the fiscal year-to-date total to $66 million[4] - CEO Scott Howe highlighted strong momentum with the Data Collaboration Platform, recent platform updates to accelerate customer value, and the scaling of the clean room network[5] Business Highlights & Key Metrics The company expanded its share repurchase authorization and extended its duration, while also announcing new AI partnerships and demonstrating strong customer retention and growth in annualized revenue - The Board of Directors expanded the share repurchase program authorization by $200 million to $1.3 billion and extended it by two years; as of September 30, 2024, $292 million remained available[10] - Announced new AI partnerships with Perplexity and Chalice to enable marketers to personalize AI-powered searches and connect AI-powered custom audiences on platforms like Meta and YouTube[12] Key Business Metrics (as of Q2 FY25) | Metric | Value | Prior Year Value | | :--- | :--- | :--- | | $1M+ Subscription Customers | 125 | 99 | | Subscription Net Retention | 107% | N/A | | Platform Net Retention | 110% | N/A | | Annual Recurring Revenue (ARR) | $483 million (+13% YoY) | N/A | | Current RPO (CRPO) | $374 million (+10% YoY) | N/A | Financial Outlook LiveRamp provided an optimistic financial outlook, forecasting 10% revenue growth for Q3 FY25 and raising its full-year FY25 guidance for both revenue and non-GAAP operating income Q3 Fiscal 2025 Guidance | Metric | Guidance | | :--- | :--- | | Revenue | $191 million (+10% YoY) | | GAAP Operating Income | $8 million | | Non-GAAP Operating Income | $39 million | Full Fiscal 2025 Guidance (Increased) | Metric | Guidance | | :--- | :--- | | Revenue | $737 million - $739 million (+12% YoY) | | GAAP Operating Income | $6 million - $8 million | | Non-GAAP Operating Income | $133 million - $135 million | Financial Statements This section presents the unaudited condensed consolidated financial statements for the three and six months ended September 30, 2024, including the Statements of Operations, Balance Sheets, and Statements of Cash Flows, providing a detailed view of the company's financial performance and position on a GAAP basis Consolidated Statements of Operations For Q2 FY25, revenues increased 16.0% YoY to $185.5 million, but GAAP income from operations and net earnings decreased due to rising costs and operating expenses, with the six-month period recording a net loss Q2 Statement of Operations Summary (Three Months Ended Sep 30) | Metric (in thousands) | 2024 | 2023 | % Change | | :--- | :--- | :--- | :--- | | Revenues | $185,483 | $159,871 | 16.0% | | Gross Profit | $134,249 | $118,659 | 13.1% | | Income from Operations | $7,487 | $8,208 | (8.8)% | | Net Earnings | $1,732 | $4,863 | (64.4)% | | Diluted EPS | $0.03 | $0.07 | (64.1)% | YTD Statement of Operations Summary (Six Months Ended Sep 30) | Metric (in thousands) | 2024 | 2023 | % Change | | :--- | :--- | :--- | :--- | | Revenues | $361,444 | $313,940 | 15.1% | | Gross Profit | $258,461 | $227,107 | 13.8% | | Income from Operations | $2,239 | $10,478 | (78.6)% | | Net Earnings (Loss) | $(5,757) | $3,277 | (275.7)% | Condensed Consolidated Balance Sheets As of September 30, 2024, LiveRamp's balance sheet showed a slight decrease in total assets and stockholders' equity, while total liabilities saw a more significant reduction Balance Sheet Summary (as of Sep 30, 2024 vs Mar 31, 2024) | Account (in thousands) | Sep 30, 2024 | Mar 31, 2024 | % Change | | :--- | :--- | :--- | :--- | | Cash and cash equivalents | $338,946 | $336,867 | 0.6% | | Total Current Assets | $582,120 | $602,032 | (3.3)% | | Total Assets | $1,194,888 | $1,231,443 | (3.0)% | | Total Current Liabilities | $199,468 | $216,576 | (7.9)% | | Total Stockholders' Equity | $932,057 | $949,135 | (1.8)% | Condensed Consolidated Statements of Cash Flows For the three months ended September 30, 2024, net cash provided by operating activities increased significantly, while financing activities primarily involved substantial share repurchases Cash Flow Summary (Three Months Ended Sep 30) | Activity (in thousands) | 2024 | 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $55,596 | $35,764 | | Net cash provided by investing activities | $22,754 | $665 | | Net cash used in financing activities | $(50,601) | $(15,797) | | Net change in cash | $28,563 | $21,396 | - The company significantly increased its share buybacks, with the acquisition of treasury stock rising to $49.9 million in Q2 FY25 from $15.1 million in Q2 FY24[43] GAAP to Non-GAAP Reconciliation This section provides detailed reconciliations of GAAP financial measures to their non-GAAP counterparts, adjusting for items such as purchased intangible asset amortization, non-cash stock compensation, and restructuring charges, which significantly impacted net earnings Q2 FY25 GAAP to Non-GAAP EPS Reconciliation | Metric (in thousands, except per share) | GAAP | Adjustments | Non-GAAP | | :--- | :--- | :--- | :--- | | Income from continuing operations before taxes | $11,684 | $33,213 | $44,897 | | Net Earnings from continuing operations | $1,732 | $32,420 | $34,152 | | Diluted EPS | $0.03 | $0.48 | $0.51 | - The primary adjustments to reconcile GAAP to Non-GAAP income include purchased intangible asset amortization ($3.7 million), non-cash stock compensation ($29.1 million), and restructuring charges ($0.4 million)[32] Forward-Looking Statements This section contains standard cautionary language regarding forward-looking statements, including the financial outlook for FY25, highlighting that these statements are not guarantees of future performance and are subject to numerous risks and uncertainties - The press release contains forward-looking statements regarding financial position, results of operations for fiscal 2025, and growth opportunities, which are subject to significant risks and uncertainties[20][21] - Key risks include economic uncertainties (high interest rates, inflation), dependence on customer renewals, competition, technological changes, data security breaches, and evolving privacy regulations[22] Appendix: Explanation of Non-GAAP Measures The appendix details the company's rationale for using non-GAAP financial measures, which management believes provide a clearer view of core operational performance by excluding certain non-cash or non-recurring expenses - Management uses non-GAAP measures internally to understand, manage, and evaluate the business, as well as for planning and forecasting; executive compensation is also partly based on these measures[70] - Key non-GAAP adjustments include: - Purchased intangible asset amortization: A non-cash expense related to acquisitions - Non-cash stock compensation: An ongoing, non-cash expense that is not used to assess core profitability - Restructuring charges: Costs related to activities like workforce reductions and lease terminations, which are not considered part of core business operations[71][72][73]