LiveRamp (RAMP) - 2026 Q1 - Quarterly Results

Executive Summary LiveRamp reports strong Q1 FY26 financial performance, exceeding expectations with double-digit revenue growth and significant operating margin expansion Q1 FY26 Financial Highlights LiveRamp reported a strong start to fiscal 2026, with first-quarter results surpassing initial expectations, achieving double-digit revenue growth and substantial operating margin expansion alongside significant share repurchases Q1 FY26 Financial Performance (GAAP & Non-GAAP, in millions) | Metric | Q1 FY26 (GAAP) | YoY Change | Q1 FY26 (Non-GAAP) | YoY Change | | :-------------------------------- | :------------- | :--------- | :----------------- | :--------- | | Total Revenue | $195 | +11% | - | - | | Subscription Revenue | $148 | +10% | - | - | | Marketplace & Other Revenue | $46 | +13% | - | - | | Gross Profit | $137 | +10% | $141 | +9% | | Gross Margin | 70% | -1 pt | 72% | -1 pt | | Operating Income (Loss) | $7 | vs. ($5) | $36 | +34% | | Operating Margin | 4% | +7 pts | 18% | +3 pts | | Diluted EPS | $0.12 | - | $0.44 | - | | Net Cash Used by Operating Activities | $16 | vs. $9 | - | - | | Share Repurchases | $30 | - | - | - | CEO Commentary CEO Scott Howe expressed confidence in the company's performance, noting that Q1 FY26 results exceeded expectations due to strong revenue growth and operating margin expansion, highlighting good sales momentum across the Data Collaboration Network - Fiscal 2026 started strong, with Q1 results surpassing initial expectations, driven by double-digit revenue growth and substantial operating margin expansion[4] - The company is experiencing good sales momentum across its Data Collaboration Network, especially with the new Cross Media Intelligence measurement solution[4] - This performance provides confidence in the growth outlook for FY26 and beyond[4] Detailed Financial Results (GAAP & Non-GAAP) This section provides a comprehensive overview of LiveRamp's GAAP and Non-GAAP financial results, including statements of operations, balance sheets, cash flows, and reconciliations Summary of GAAP and Non-GAAP Results This section provides a comparative summary of LiveRamp's GAAP and Non-GAAP financial results for the first quarter of fiscal years 2026 and 2025, detailing key metrics such as revenue, gross profit, operating income, net earnings, and diluted earnings per share Q1 FY26 vs Q1 FY25 Financial Summary (GAAP & Non-GAAP, in millions) | Metric | Q1 FY26 GAAP | Q1 FY25 GAAP | Q1 FY26 Non-GAAP | Q1 FY25 Non-GAAP | | :-------------------------------- | :----------- | :----------- | :--------------- | :--------------- | | Subscription revenue | $148 | $135 | - | - | | YoY change % | 10 % | 11 % | - | - | | Marketplace & Other revenue | $46 | $41 | - | - | | YoY change % | 13 % | 28 % | - | - | | Total revenue | $195 | $176 | - | - | | YoY change % | 11 % | 14 % | - | - | | Gross profit | $137 | $124 | $141 | $130 | | % Gross margin | 70 % | 71 % | 72 % | 74 % | | YoY change, pts | (1) pt | 0 pts | (1) pt | 1 pt | | Operating income (loss) | $7 | ($5) | $36 | $27 | | % Operating margin | 4 % | (3)% | 18 % | 15 % | | YoY change, pts | 7 pts | (4) pts | 3 pts | 2 pts | | Net earnings (loss) | $8 | ($7) | $30 | $24 | | Diluted earnings (loss) per share | $0.12 | ($0.11) | $0.44 | $0.35 | | Shares to calculate diluted EPS | 66.7 | 66.6 | 66.7 | 68.5 | | YoY change % (Diluted EPS Shares) | 0 % | 0 % | (3)% | 2 % | | Operating cash flow | ($16) | ($9) | - | - | | Free cash flow | - | - | ($16) | ($10) | Consolidated Statements of Operations (GAAP) This chapter presents the detailed GAAP consolidated statements of operations for LiveRamp, offering a comprehensive view of revenues, cost of revenue, gross profit, operating expenses, and net earnings (loss) for Q1 FY26 and Q1 FY25, including quarter-to-quarter comparisons for FY2025 Consolidated Statements of Operations (GAAP, in thousands) | Metric | Q1 FY26 (2025) | Q1 FY25 (2024) | Variance | % Variance | | :------------------------------------ | :------------- | :------------- | :------- | :--------- | | Revenues | 194,822 | 175,961 | 18,861 | 10.7 % | | Cost of revenue | 58,319 | 51,749 | 6,570 | 12.7 % | | Gross profit | 136,503 | 124,212 | 12,291 | 9.9 % | | % Gross margin | 70.1 % | 70.6 % | - | - | | Research and development | 39,608 | 44,118 | (4,510) | (10.2)% | | Sales and marketing | 51,906 | 54,175 | (2,269) | (4.2)% | | General and administrative | 37,345 | 30,961 | 6,384 | 20.6 % | | Gains, losses and other items, net | 423 | 206 | 217 | 105.3 % | | Total operating expenses | 129,282 | 129,460 | (178) | (0.1)% | | Income (loss) from operations | 7,221 | (5,248) | 12,469 | N/A | | % Margin | 3.7 % | (3.0)% | - | - | | Total other income, net | 3,709 | 4,444 | (735) | (16.5)% | | Income (loss) from continuing operations before income taxes | 10,930 | (804) | 11,734 | N/A | | Income tax expense | 3,183 | 6,685 | (3,502) | (52.4)% | | Net earnings (loss) | 7,747 | (7,489) | 15,236 | N/A | | Basic earnings (loss) per share | 0.12 | (0.11) | 0.23 | N/A | | Diluted earnings (loss) per share | 0.12 | (0.11) | 0.23 | N/A | Quarterly Consolidated Statements of Operations (GAAP, in thousands) | Metric | Q1 FY25 (6/30/2024) | Q2 FY25 (9/30/2024) | Q3 FY25 (12/31/2024) | Q4 FY25 (3/31/2025) | FY2025 Total | Q1 FY26 (6/30/2025) | Qtr-to-Qtr % Change (Q1 FY26 vs Q1 FY25) | | :------------------------------------ | :------------------ | :------------------ | :------------------- | :------------------ | :----------- | :------------------ | :--------------------------------------- | | Revenues | 175,961 | 185,483 | 195,412 | 188,724 | 745,580 | 194,822 | 10.7 % | | Cost of revenue | 51,749 | 51,234 | 54,998 | 57,929 | 215,910 | 58,319 | 12.7 % | | Gross profit | 124,212 | 134,249 | 140,414 | 130,795 | 529,670 | 136,503 | 9.9 % | | % Gross margin | 70.6 % | 72.4 % | 71.9 % | 69.3 % | 71.0 % | 70.1 % | - | | Income (loss) from operations | (5,248) | 7,487 | 14,673 | (11,508) | 5,404 | 7,221 | N/A | | % Margin | (3.0)% | 4.0 % | 7.5 % | (6.1)% | 0.7 % | 3.7 % | - | | Net earnings (loss) from continuing operations | (7,489) | 1,732 | 9,522 | (6,267) | (2,502) | 7,747 | N/A | | Basic earnings (loss) per share (Continuing Operations) | (0.11) | 0.03 | 0.15 | (0.10) | (0.04) | 0.12 | N/A | | Diluted earnings (loss) per share (Continuing Operations) | (0.11) | 0.03 | 0.14 | (0.10) | (0.04) | 0.12 | N/A | Reconciliation of Non-GAAP Measures This section provides detailed reconciliations of GAAP financial measures to their corresponding Non-GAAP counterparts, adjusting for items such as purchased intangible asset amortization, non-cash stock compensation, and restructuring charges to offer a clearer view of the company's underlying operational performance Non-GAAP EPS Reconciliation This sub-section reconciles GAAP net earnings and diluted EPS to Non-GAAP figures by excluding specific non-cash and non-recurring items, providing an adjusted view of profitability for Q1 FY26 and Q1 FY25, as well as a quarter-to-quarter comparison for FY2025 and Q1 FY2026 Non-GAAP EPS Reconciliation (in thousands, except per share) | Metric | Q1 FY26 (2025) | Q1 FY25 (2024) | | :------------------------------------------ | :------------- | :------------- | | Net earnings (loss) (GAAP) | 7,747 | (7,489) | | Purchased intangible asset amortization | 2,750 | 3,846 | | Non-cash stock compensation | 25,410 | 27,985 | | Restructuring and merger charges | 423 | 206 | | Total excluded items | 28,583 | 32,037 | | Non-GAAP net earnings from continuing operations | 29,635 | 23,862 | | Non-GAAP diluted EPS from continuing operations | 0.44 | 0.35 | Quarterly Non-GAAP EPS Reconciliation (in thousands, except per share) | Metric | Q1 FY25 (6/30/2024) | Q2 FY25 (9/30/2024) | Q3 FY25 (12/31/2024) | Q4 FY25 (3/31/2025) | FY2025 Total | Q1 FY26 (6/30/2025) | | :------------------------------------------ | :------------------ | :------------------ | :------------------- | :------------------ | :----------- | :------------------ | | Net earnings (loss) from continuing operations (GAAP) | (7,489) | 1,732 | 9,522 | (6,267) | (2,502) | 7,747 | | Total excluded items from continuing operations | 32,037 | 33,213 | 30,595 | 34,542 | 130,387 | 28,583 | | Non-GAAP net earnings from continuing operations | 23,862 | 34,152 | 36,880 | 20,037 | 114,931 | 29,635 | | Non-GAAP diluted EPS from continuing operations | 0.35 | 0.51 | 0.55 | 0.30 | 1.70 | 0.44 | Non-GAAP Operating Income Reconciliation This sub-section reconciles GAAP income (loss) from operations to Non-GAAP operating income by adding back purchased intangible asset amortization, non-cash stock compensation, and restructuring charges, providing a normalized view of operating profitability for Q1 FY26 and Q1 FY25 Non-GAAP Operating Income Reconciliation (in thousands) | Metric | Q1 FY26 (2025) | Q1 FY25 (2024) | | :------------------------------------ | :------------- | :------------- | | Income (loss) from operations (GAAP) | 7,221 | (5,248) | | Operating income (loss) margin (GAAP) | 3.7 % | (3.0)% | | Purchased intangible asset amortization | 2,750 | 3,846 | | Non-cash stock compensation | 25,410 | 27,985 | | Restructuring and merger charges | 423 | 206 | | Total excluded items | 28,583 | 32,037 | | Income from operations before excluded items (Non-GAAP) | 35,804 | 26,789 | | Non-GAAP operating income margin | 18.4 % | 15.2 % | Adjusted EBITDA Reconciliation This sub-section reconciles GAAP net earnings from continuing operations to Adjusted EBITDA, a non-GAAP measure used to assess performance, by adding back income tax expense, other income, depreciation and amortization, non-cash stock compensation, and restructuring charges for Q1 FY26 and Q1 FY25 Adjusted EBITDA Reconciliation (in thousands) | Metric | Q1 FY26 (2025) | Q1 FY25 (2024) | | :------------------------------------ | :------------- | :------------- | | Net earnings (loss) from continuing operations (GAAP) | 7,747 | (7,489) | | Income tax expense | 3,183 | 6,685 | | Total other income, net | (3,709) | (4,444) | | Income (loss) from operations | 7,221 | (5,248) | | Depreciation and amortization | 3,389 | 4,554 | | EBITDA | 10,610 | (694) | | Non-cash stock compensation | 25,410 | 27,985 | | Restructuring and merger charges | 423 | 206 | | Other adjustments | 25,833 | 28,191 | | Adjusted EBITDA | 36,443 | 27,497 | Non-GAAP Expenses Reconciliation This sub-section provides a detailed reconciliation of GAAP expenses (Cost of revenue, Research and development, Sales and marketing, General and administrative) to their Non-GAAP equivalents by excluding purchased intangible asset amortization, non-cash stock compensation, and restructuring charges across fiscal year 2025 and Q1 FY2026 Non-GAAP Expenses Reconciliation (in thousands) | Expense Category | Q1 FY25 (6/30/2024) | Q1 FY26 (6/30/2025) | | :------------------------------------ | :------------------ | :------------------ | | Cost of revenue (GAAP) | 51,749 | 58,319 | | Research and development (GAAP) | 44,118 | 39,608 | | Sales and marketing (GAAP) | 54,175 | 51,906 | | General and administrative (GAAP) | 30,961 | 37,345 | | Gains, losses and other items, net (GAAP) | 206 | 423 | | Total excluded items | 32,037 | 28,583 | | Cost of revenue (Non-GAAP) | 46,307 | 54,028 | | Research and development (Non-GAAP) | 33,913 | 31,276 | | Sales and marketing (Non-GAAP) | 47,082 | 45,892 | | General and administrative (Non-GAAP) | 21,870 | 27,822 | | Gross profit, excluding items (Non-GAAP) | $129,654 | $140,794 | | % Gross margin (Non-GAAP) | 73.7 % | 72.3 % | Consolidated Balance Sheets This chapter presents LiveRamp's consolidated balance sheets as of June 30, 2025, and March 31, 2025, providing a snapshot of the company's assets, liabilities, and stockholders' equity, highlighting changes over the quarter Consolidated Balance Sheets (in thousands) | Metric | June 30, 2025 | March 31, 2025 | Variance | % Variance | | :------------------------------------ | :------------ | :------------- | :------- | :--------- | | Assets | | | | | | Cash and cash equivalents | 363,612 | 413,331 | (49,719) | (12.0)% | | Total current assets | 632,427 | 656,189 | (23,762) | (3.6)% | | Total Assets | 1,232,095 | 1,259,371 | (27,276) | (2.2)% | | Liabilities and Stockholders' Equity | | | | | | Total current liabilities | 222,384 | 247,518 | (25,134) | (10.2)% | | Total Stockholders' equity | 947,812 | 948,859 | (1,047) | (0.1)% | | Total Liabilities and Stockholders' Equity | 1,232,095 | 1,259,371 | (27,276) | (2.2)% | Consolidated Statements of Cash Flows This chapter details LiveRamp's consolidated statements of cash flows for the three months ended June 30, 2025, and 2024, categorizing cash movements into operating, investing, and financing activities, and showing the net change in cash and cash equivalents Consolidated Statements of Cash Flows (in thousands) | Cash Flow Activity | Q1 FY26 (2025) | Q1 FY25 (2024) | | :------------------------------------ | :------------- | :------------- | | Net cash used in operating activities | (15,821) | (9,328) | | Net cash used in investing activities | (917) | (593) | | Net cash used in financing activities | (34,797) | (16,465) | | Net cash used in continuing operations | (51,535) | (26,386) | | Net change in cash, cash equivalents and restricted cash | (50,314) | (26,457) | | Cash, cash equivalents and restricted cash at end of period | 363,612 | 313,014 | Free Cash Flow Calculation This chapter presents the calculation of Free Cash Flow, a non-GAAP measure, by subtracting capital expenditures from net cash provided by (used in) operating activities, offering insights into the cash available for discretionary spending for Q1 FY26 and prior quarters Free Cash Flow (in thousands) | Metric | Q1 FY25 (6/30/2024) | Q2 FY25 (9/30/2024) | Q3 FY25 (12/31/2024) | Q4 FY25 (3/31/2025) | FY2025 Total | Q1 FY26 (6/30/2025) | | :------------------------------------ | :------------------ | :------------------ | :------------------- | :------------------ | :----------- | :------------------ | | Net cash provided by (used in) operating activities | (9,328) | 55,596 | 45,117 | 62,580 | 153,965 | (15,821) | | Less: Capital expenditures | (226) | (241) | (282) | (293) | (1,042) | (336) | | Free Cash Flow | (9,554) | 55,355 | 44,835 | 62,287 | 152,923 | (16,157) | Business Performance & Outlook LiveRamp achieved key business milestones and provided financial guidance for Q2 and full-year FY26, projecting continued growth and profitability Additional Business Highlights & Metrics LiveRamp achieved significant business milestones in Q1 FY26, including industry recognition as a Leader in Data Clean Room Technology, strong ROI demonstrated by a Forrester study, and expanded partnerships, with key operational metrics showing growth in high-value customers and strong retention rates - Recognized as a Leader in the IDC Marketscape: Worldwide Data Clean Room Technology for Advertising and Marketing Use Cases, highlighting an extensive partner network (over 1,000 partners), interoperable architecture, and native activation capabilities[8] - A Forrester Consulting study revealed a 313% ROI and $9.6 million in business benefits over three years for a composite LiveRamp customer, with a payback period of less than 6 months[8] - New and expanded partnerships include powering the clean room solution for Walgreens Advertising Group (WAG), partnering with REMAX for its new media network, and expanding the partnership with Western Union[8] Key Business Metrics | Metric | Q1 FY26 (June 30, 2025) | Q1 FY25 (Prior Year Period) | | :------------------------------------ | :---------------------- | :-------------------------- | | Customers with >$1M Annualized Subscription Revenue | 127 | 115 | | Direct Subscription Customers | 835 | 900 | | Subscription Net Retention | 104% | - | | Platform Net Retention | 105% | - | | Annualized Recurring Revenue (ARR) | $502 million | Up 5% YoY | | Current Remaining Performance Obligations (CRPO) | $451 million | Up 14% YoY | Financial Outlook LiveRamp provided its financial guidance for the upcoming second quarter of fiscal 2026 and the full fiscal year 2026, projecting continued revenue growth and operating income, with specific targets for both GAAP and Non-GAAP measures Q2 FY26 Guidance (Quarter ending September 30, 2025, in millions) | Metric | Expectation | | :---------------------- | :------------ | | Revenue | $197 (6% increase) | | GAAP Operating Income | Approximately $15 | | Non-GAAP Operating Income | Approximately $39 | FY26 Guidance (Year ending March 31, 2026, in millions) | Metric | Expectation | | :---------------------- | :-------------------------------- | | Revenue | Between $798 and $818 (7% to 10% increase) | | GAAP Operating Income | Between $81 and $85 | | Non-GAAP Operating Income | Between $178 and $182 | Company Information & Legal Disclosures This section provides an overview of LiveRamp's business, outlines forward-looking statements and risk factors, and explains non-GAAP financial measures About LiveRamp LiveRamp is a leading data collaboration technology company that empowers marketers and media owners to enhance marketing performance, facilitating seamless data integration across various platforms to drive insights, consumer experiences, and measurable growth - LiveRamp is a leading data collaboration technology company, empowering marketers and media owners to deliver and measure marketing performance[11] - Its data collaboration network unites data across advertisers, platforms, publishers, data providers, and commerce media networks to unlock insights and drive growth[11] - Built on neutrality, interoperability, and global scale, LiveRamp helps maximize data value and accelerate innovation in an AI-driven, outcomes-focused world[12] Forward-Looking Statements & Risk Factors This section serves as a legal disclaimer, identifying forward-looking statements within the press release and outlining various factors and uncertainties that could cause LiveRamp's actual results to differ materially from its projections - The press release contains forward-looking statements, including guidance for Q2 and full-year FY26, which are not guarantees of future performance[15][16] - Factors that could cause actual results to differ include economic uncertainties (geopolitical, recession, inflation, interest rates), customer retention and upsell ability, reliance on data suppliers and partners, increased competition, rapidly changing technology, and integration challenges from acquisitions[17] - Additional risks involve maintaining company culture, attracting and retaining talent, global workforce strategy, international operations, data security breaches, unfavorable publicity, service interruptions, and changes in judicial, legislative, regulatory, and tax environments[17] Explanation of Non-GAAP Measures (Appendix A) Appendix A provides a detailed explanation of LiveRamp's non-GAAP financial measures, outlining the specific adjustments made to GAAP results and the rationale for their use in understanding and evaluating the company's operational performance - Non-GAAP measures are used to supplement financial results by excluding certain acquisition-related expenses, non-cash stock compensation, and restructuring charges, providing a clearer view of past performance and future results[60] - Adjustments include purchased intangible asset amortization (non-cash expense from acquisitions), non-cash stock compensation (ongoing but non-cash expense not used to assess core profitability), and restructuring charges (non-recurring costs related to operational alignment)[61][62][63] - Key non-GAAP measures defined are Non-GAAP EPS, Non-GAAP Income from Operations, Non-GAAP Operating Income Margin, Non-GAAP Expenses, Adjusted EBITDA, and Free Cash Flow, each with specific adjustments and purposes for management and investor analysis[67][68][69]