LiveRamp (US:RAMP)2022-11-09 03:01Financial Data and Key Metrics Changes - Total revenue for Q2 2023 was $147 million, representing a 16% year-on-year increase, with subscription revenue up 14% and Marketplace & Other revenue up 25% [57] - Annual Recurring Revenue (ARR) reached $420 million, up 15% compared to the previous year [8][58] - Non-GAAP operating profit was $17 million, marking the 10th consecutive quarter of profitability, while operating cash flow nearly doubled to $21 million [59][44] Business Line Data and Key Metrics Changes - Subscription net retention was 106%, and platform net retention was 108%, with subscription usage as a percentage of total subscription business at approximately 14% [14][58] - The customer count for $1 million-plus customers grew to 92%, an increase of 15% year-on-year [13][58] - Data Marketplace revenue, which constitutes about 80% of Marketplace & Other, increased by 23% [57] Market Data and Key Metrics Changes - International revenue grew approximately 26%, and when adjusted for foreign exchange, it increased by 39% [57] - The company added 10 new customers in Q2, which is an improvement from Q1 but still below historical trends [12] Company Strategy and Development Direction - The company is focused on strengthening its U.S. sales team and expanding channel partnerships to drive future growth [29][33] - LiveRamp is committed to improving its product offerings based on customer feedback and enhancing its operational efficiency [44][68] - The company aims to capitalize on the transition from Data Management Platforms (DMPs) to Customer Data Platforms (CDPs) and public clouds [51][102] Management's Comments on Operating Environment and Future Outlook - Management expressed caution regarding the economic environment, noting that while there are positive signs, challenges remain, particularly in the SMB segment [17][65] - The company is optimistic about its long-term growth trajectory, emphasizing its foundational identity solutions and partnerships with major players like Google and Salesforce [26][120] - Management highlighted the importance of adapting to changing market conditions and customer needs, particularly in light of the ongoing economic uncertainty [47][129] Other Important Information - The company announced a 10% reduction in workforce as part of its restructuring efforts to improve profitability [45][73] - LiveRamp repurchased 1.7 million shares for $40 million in Q2, with a total of 3.8 million shares repurchased for $100 million year-to-date [60] Q&A Session Summary Question: Improvement in net customer adds and retention - Management acknowledged that while there was some improvement, caution is warranted due to ongoing economic uncertainties [90][92] Question: Sustainability of usage as a percentage of revenue - Management noted consistent strength in utilization from data partners and platform providers, but cautioned about potential weaknesses from brand customers [94][96] Question: Pipeline for expansion and new logo acquisition - Management indicated that a significant portion of bookings came from existing customers, but emphasized the need to improve new logo acquisition through channel partnerships [100][102] Question: Revenue generation from partnerships with Snowflake and others - Management projected that channel partnerships could generate nearly $10 million in revenue this year, indicating a growing opportunity [107][108] Question: Progress on the Facebook relationship and advantages of using ATS - Management highlighted the importance of bifurcated consent and the robustness of their identity solutions compared to other methods [111][115] Question: Impact of Google PAIR on alternative IDs and industry - Management expressed optimism that the PAIR announcement aligns with their approach and could drive significant opportunities in the post-cookie world [119][120] Question: Progress with Carrefour and other flagship deals - Management confirmed strong progress with Carrefour across various regions and highlighted the growing network of partnerships [123][125]