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LiveRamp (RAMP) - 2025 Q1 - Earnings Call Transcript
RAMPLiveRamp (RAMP)2024-08-08 01:14
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Financial Data and Key Metrics Changes - Q1 revenue reached 176million,exceedingguidanceby176 million, exceeding guidance by 4 million, with a 14% year-on-year increase [21][22] - Operating income was 27million,27 million, 2 million above guidance, with an operating margin of 15%, up two points year-on-year [21][25] - Annual recurring revenue (ARR) grew by 12% year-on-year, totaling 478million,withaquarter−on−quarterincreaseof478 million, with a quarter-on-quarter increase of 11 million [22][23] - Subscription net retention improved to 105%, a two-point increase sequentially [22][25] Business Line Data and Key Metrics Changes - Subscription revenue was 135million,up11135 million, up 11%, with fixed subscription revenue growing by 12% and subscription usage revenue up by 1% [22][25] - Marketplace and other revenue increased by 28% to 41 million, driven by strong demand in digital advertising, particularly in CTV, which doubled year-on-year [22][24] Market Data and Key Metrics Changes - The digital advertising market showed strength in Q1, benefiting the company's marketplace performance [36] - Data marketplace revenue, which accounted for 78% of marketplace revenue, grew by 23% [24][36] Company Strategy and Development Direction - The company aims to be a "Rule of 40" company, targeting sustainable revenue growth of 10% to 15% [4][19] - Focus on data collaboration opportunities, emphasizing ease of use and building a robust collaboration network [12][20] - Integration of Habu is progressing well, contributing approximately 3millioninrevenue[22][39]Management′sCommentsonOperatingEnvironmentandFutureOutlook−Managementacknowledgesmacroeconomicuncertaintiesaffectingcustomerbehaviorandsalescycles,leadingtocautiousspending[5][24][50]−Despitetheuncertainenvironment,thecompanyremainsoptimisticaboutlong−termgrowthdrivenbymegatrendsindatacollaborationandpersonalizedmarketing[10][20]OtherImportantInformation−Operatingcashflowwasnegative3 million in revenue [22][39] Management's Comments on Operating Environment and Future Outlook - Management acknowledges macroeconomic uncertainties affecting customer behavior and sales cycles, leading to cautious spending [5][24][50] - Despite the uncertain environment, the company remains optimistic about long-term growth driven by megatrends in data collaboration and personalized marketing [10][20] Other Important Information - Operating cash flow was negative 9 million due to seasonal working capital movements, expected to normalize over the year [25] - The company repurchased 16millionofstockinQ1,withapproximately16 million of stock in Q1, with approximately 142 million remaining under the current authorization [26] Q&A Session Summary Question: What needs to happen for advertisers to better understand and adopt RampID and ATS? - Management noted the need to evangelize the benefits of these technologies, especially in a challenging economic environment [33][34] Question: Can you provide an update on the integration of Habu? - Integration is progressing smoothly, with a robust pipeline and consistent bookings expected [38][39] Question: How does the new cookie deprecation discussion affect clients on the fence? - Clients are not overly concerned, as they believe the market will still move towards authenticated solutions due to economic pressures [58][60] Question: What is the outlook for the marketplace related to Oracle? - The company expects a net positive impact from Oracle, with incremental data marketplace gains anticipated to outweigh subscription revenue [54][56]