Financial Data and Key Metrics Changes - Q3 revenue grew by 9%, reaching $212 million, with subscription revenue also increasing by 9% to $158 million [24][4] - Non-GAAP operating income rose by 36%, exceeding expectations, while GAAP operating income more than doubled for the second consecutive quarter [23][24] - Annual Recurring Revenue (ARR) increased by $11 million quarter-over-quarter and 7% year-over-year [4][24] - Free cash flow reached a record $67 million, with $39 million allocated for share repurchases [28][29] Business Line Data and Key Metrics Changes - Subscription revenue growth included an 8% increase in fixed revenue and a 13% increase in usage revenue year-over-year [24] - The total customer count increased by 15, marking the largest quarterly increase in over three and a half years, with million-dollar-plus customers rising to 140 [4][24] - Subscription net retention was 101%, consistent with expectations [25] Market Data and Key Metrics Changes - The Data Marketplace and other revenue increased by 8% to $54 million, although it fell slightly below expectations due to timing-related dynamics [26] - Demand for the Data Marketplace re-accelerated in mid-November, returning to double-digit growth [27] Company Strategy and Development Direction - The company is focused on achieving the "Rule of 40" by FY 2028, targeting revenue growth of 10%-15% and a non-GAAP operating margin of 25%-30% [16][17] - The strategy includes expanding the Data Marketplace to support AI models and applications, and transitioning to a usage-based pricing model [12][14] - Partnerships with major players like Publicis and Uber are being leveraged to enhance service offerings and drive growth [15][16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business's durability and scalability, emphasizing AI as a significant tailwind for future growth [3][6] - The company anticipates achieving double-digit revenue growth in the near future, supported by strong ARR momentum and a pivot to usage-based pricing [17][20] - Management highlighted the importance of a trusted data network for AI applications, positioning the company as a critical enabler in the advertising ecosystem [7][9] Other Important Information - The company has zero debt and a strong balance sheet with approximately $403 million in cash and short-term investments [29] - The upcoming annual customer and partner conference, Ramp Up, is scheduled for March 3rd to 5th, providing an opportunity for investors to engage with the ecosystem [21] Q&A Session Summary Question: Insights on Publicis partnership - The partnership with Publicis is a culmination of years of platform modernization and pricing model changes, allowing for innovative collaboration [36][37] Question: Upsell and cross-sell opportunities - Q3 saw strong sales driven by expansion with existing customers, particularly through the Clean Room offering [39][40] Question: AI partnerships and prioritization - The company prioritizes AI partnerships based on client feedback and existing relationships, focusing on both legacy companies and new startups [44][46] Question: Growth in commerce media networks - Significant growth is expected in travel, food delivery, and finance sectors, with new pricing models facilitating access to smaller clients [50][52] Question: CTV integration performance - CTV continues to grow as a strong component of the business, with expectations for ongoing growth in FY 2027 and beyond [54][55] Question: AI's impact on subscription business model - Management reassured that AI is not disrupting demand for their products, with strong sales performance and increasing deal sizes [61][67]

Financial Data and Key Metrics Changes - Q3 revenue growth was 9%, with subscription revenue also growing by 9%, reflecting a 4-point acceleration [4][24] - ARR increased by $11 million quarter-over-quarter and 7% year-over-year, driven by various use cases [4][24] - Operating income increased by 36%, with GAAP operating income more than doubling for the second consecutive quarter [23][28] - Free cash flow reached a record $67 million, with $39 million used for share repurchases [28][34] Business Line Data and Key Metrics Changes - Total revenue was $212 million, with subscription revenue at $158 million, both up 9% [24] - Fixed subscription revenue grew by 8%, while usage-based revenue increased by 13% year-over-year [24] - Total customer count increased by 15, marking the best performance in the past 12 quarters, with million-dollar-plus customers rising to 140 [24][25] Market Data and Key Metrics Changes - Strong demand was noted across the business, particularly in the reseller channel and Clean Room Insights offering [25] - Marketplace and other revenue increased by 8% to $54 million, although slightly below expectations due to timing-related dynamics [26] - CTV continues to be a strong growth component, with expectations for CTV data purchased off the marketplace to outpace overall data marketplace growth [57] Company Strategy and Development Direction - The company is focused on achieving the Rule of 40 by FY 2028, targeting revenue growth of 10%-15% and a non-GAAP operating margin of 25%-30% [16][20] - The pivot towards a usage-based pricing model is expected to unlock incremental revenue growth and enhance customer engagement [14][20] - The company is actively partnering with over 20 AI partners to expand its data marketplace and support AI training [12][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business's durability and scalability, emphasizing AI as a tailwind for growth [3][6] - The company is not seeing any negative impact from AI on demand for its products, with strong sales momentum and improved deal sizes [70][72] - Management remains committed to achieving double-digit growth, viewing AI as an enabler rather than a disruptor [66][72] Other Important Information - The company has a strong balance sheet with approximately $403 million in cash and short-term investments and zero debt [29] - The upcoming Ramp Up conference is highlighted as an opportunity for investors to engage with key stakeholders in the marketing ecosystem [21] Q&A Session Summary Question: Insights on Publicis partnership - The partnership is a result of years of platform modernization and pricing model changes, allowing for innovative collaboration [38] Question: Upsell and cross-sell progress - Q3 saw strong bookings driven by expansion with existing customers, particularly through Clean Room offerings [41] Question: AI partnerships and prioritization - The company prioritizes AI partnerships based on client feedback and existing relationships, focusing on both legacy and new companies [46] Question: Growth in commerce media networks - Significant growth is expected in travel, food delivery, and finance sectors, with new pricing models facilitating access to smaller clients [51][53] Question: CTV integration performance - CTV continues to grow, with a significant portion of the largest integrations being CTV providers, driving Clean Room adoption [56][57] Question: AI's impact on subscription business model - Management reassured that AI is not negatively impacting demand, with strong sales performance and increased activations related to AI [70][72] Question: Pricing tests and client acquisition - The company is methodically rolling out a new pricing model, focusing on new logo opportunities and expecting modest revenue upside from SMBs [80][81]

Financial Data and Key Metrics Changes - Q3 revenue grew by 9%, reaching $212 million, with subscription revenue also increasing by 9% to $158 million [22][23] - Non-GAAP operating income rose by 36%, totaling $62 million, while GAAP operating income more than doubled to $40 million [22][26] - Annual Recurring Revenue (ARR) increased by $11 million quarter-over-quarter and 7% year-over-year [4][23] - Free cash flow reached a record $67 million, with $39 million allocated for share repurchases [26][29] Business Line Data and Key Metrics Changes - Subscription revenue growth included a fixed revenue increase of 8% and a usage revenue increase of 13% year-over-year [23] - Total customer count increased by 15, marking the largest growth in over three years, with million-dollar-plus customers rising to 140 [4][23] - Subscription net retention was stable at 101%, aligning with expectations [24] Market Data and Key Metrics Changes - Marketplace and other revenue grew by 8% to $54 million, although slightly below expectations due to timing-related dynamics [25] - Demand for data marketplace services re-accelerated in mid-November, returning to double-digit growth [25] Company Strategy and Development Direction - The company aims to achieve the "Rule of 40" by FY 2028, targeting revenue growth of 10%-15% and a non-GAAP operating margin of 25%-30% [16][17] - A shift towards a usage-based pricing model is being implemented to unlock incremental revenue growth, particularly appealing to mid-sized brands [14][19] - The company is expanding its data marketplace to include AI models and applications, positioning itself as a central hub for AI-powered marketing [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business's durability and scalability, highlighting AI as a significant tailwind for future growth [3][5] - The company is focused on maintaining strong customer relationships and executing effectively, with expectations for continued revenue growth [18][31] - Management noted that AI adoption is expected to drive more data across the network, enhancing revenue without proportional cost increases [9][19] Other Important Information - The company has signed over 20 AI partners, including both startups and established firms like Google, to enhance its offerings [10][11] - The annual customer and partner conference, Ramp Up, is scheduled for March, providing an opportunity for investors to engage with the ecosystem [20] Q&A Session Summary Question: Insights on Publicis partnership - Management highlighted the readiness for expanding partnerships and the value added through their modular platform, allowing agencies to innovate on top of LiveRamp [34][36] Question: Upsell and cross-sell progress - Management reported strong sales momentum, particularly in expanding existing customer relationships through offerings like Clean Room [37][38] Question: AI partnerships and prioritization - Management emphasized a client-led approach to innovation, prioritizing partnerships based on client feedback and market dynamics [42][44] Question: Growth in commerce media networks - Management noted rapid growth in non-retail commerce networks, particularly in travel and food delivery sectors, which are expected to drive future revenue [48][51] Question: CTV integration and performance - Management confirmed that CTV continues to be a strong growth area, with significant integration and performance improvements [52][55] Question: AI's impact on subscription business model - Management reassured that AI is seen as a tailwind, enhancing the business rather than disrupting it, with strong sales performance observed [61][68]

Financial Performance - The company reported strong financial performance in Q4, beating expectations on both revenue and operating income, with revenue of $189 million, up 10% year-over-year [28][29] - Operating income was $23 million, reflecting a 43% increase, and operating margin expanded by three points to 12% [28][11] - For FY 2025, the company achieved 13% revenue growth, marking the third consecutive year of hitting the 10% to 15% growth target [6][7] - Free cash flow reached a record $153 million, a 51% year-over-year increase, demonstrating improved working capital management [11][37] Business Line Performance - Subscription revenue grew by 9% to $145 million, while marketplace and other revenue increased by 14% to $44 million [29][33] - The company added 13,100 subscription customers during the year, with significant growth in the $1 million plus customer cohort [7][9] - The reduction in contraction rate contributed to revenue growth, achieving the lowest level of dollar churn and downsell ever [10] Market Performance - The data marketplace, which accounted for 77% of marketplace revenue, grew by 13%, reflecting continued strength in U.S. digital ad spending [33] - The company did not detect any change in customer behavior due to macroeconomic conditions in Q4 or April [33] Strategic Direction and Industry Competition - The company aims to achieve the "Rule of 40" by FY 2028, targeting 10% to 15% revenue growth and 25% to 30% operating margin [12][25] - Key initiatives include enhancing the data collaboration network and launching cross media intelligence solutions to improve advertising measurement [14][18] - The company is focused on expanding its clean room solutions, which have shown to significantly increase annual recurring revenue (ARR) for customers [23][89] Management Commentary on Operating Environment and Future Outlook - Management expressed optimism about FY 2026, highlighting strong demand signals and a robust sales pipeline despite macroeconomic uncertainties [32][39] - The company anticipates revenue for FY 2026 to be between $787 million and $817 million, reflecting growth of 6% to 10% [39] - Management noted that the macro environment is a key swing factor in revenue guidance, with a stable economy assumed for the high end of the range [39][41] Other Important Information - The company successfully renewed 20 multimillion-dollar annual contract value (ACV) contracts, with over half being multi-year contracts [9][100] - The balance sheet remains strong with zero debt and cash and short-term investments totaling $421 million [37] Q&A Session Summary Question: Customer reaction to cross media intelligence - Management expressed optimism about the cross media intelligence solution, noting strong early feedback and increased customer conversations [52][54] Question: Key factors impacting revenue guidance - Management indicated that the macro environment is the primary swing factor between the low and high ends of the revenue guidance range [57][59] Question: New customer acquisition strategies - Management highlighted that the decline in customer count was primarily due to smaller customers, while the million-dollar plus customer count continued to grow [66][68] Question: Impact of Google’s cookie announcement - Management stated that the announcement was largely a non-event for customers, as the industry has been moving away from cookies for years [71][72] Question: Sales pipeline and customer hesitation - Management noted some customer hesitation in Q4 but reported that many deals that slipped have already closed in early Q1 [76][78] Question: Clean room adoption and customer segmentation - Management indicated that clean room adoption is primarily a function of time and execution, with larger companies leading the way [86][88] Question: Net retention rate outlook - Management expects net retention to stabilize between 100% and 105% in the near term, with potential for improvement as new strategies are executed [93][94]