LiveRamp (RAMP)2025-02-05 23:47Financial Data and Key Metrics Changes - Revenue for Q3 2025 was $195 million, exceeding guidance by $4 million, representing a 12% year-over-year increase [35][36] - Operating income increased by 24% to $45 million, with an operating margin expanding by 2 points to a record high of 23% [10][35] - Free cash flow for the fiscal year-to-date reached $91 million, a 20% increase year-over-year [10] Business Line Data and Key Metrics Changes - Subscription revenue was $146 million, up 10%, with fixed subscription revenue also increasing by 10% [36] - Subscription usage revenue grew by 9%, slightly above expectations [36] - Annual Recurring Revenue (ARR) grew by 10% year-over-year, reaching $491 million [22][36] Market Data and Key Metrics Changes - Data marketplace revenue increased by 20% to $50 million, with CTV accounting for approximately 20% of this revenue [39] - Contracted backlog (Total RPO) rose by 6% to $579 million, with current RPO up 13% to $434 million [37][38] Company Strategy and Development Direction - The company is focused on enhancing its data collaboration platform to meet the growing demand for measurable marketing outcomes [9][14] - Strategic adjustments made to product and go-to-market strategies are yielding positive results, with improved sales momentum and pipeline conversion rates [11][31] - The company aims to achieve or surpass the Rule of 30 with projected revenue growth of 12% to 13% and an 18% operating margin for FY 2025 [26][47] Management's Comments on Operating Environment and Future Outlook - Management noted an improvement in the IT spending environment and a growing recognition of the importance of data collaboration for measuring advertising outcomes [12][31] - The sales pipeline remains robust, and the company is optimistic about sustaining recent momentum [52][72] - Future growth opportunities are anticipated in the areas of AI and data collaboration, with a focus on integrating more AI capabilities into their offerings [120][126] Other Important Information - The company plans to host its annual customer and partner conference, RampUp, at the end of February, which is expected to engage over 3,000 attendees [25] - Stock-based compensation increased to $27 million, reflecting the impact of the Habu acquisition [42] Q&A Session Summary Question: Can you provide additional color on the drivers of improved sales momentum? - Management attributed improved sales momentum to experienced salespeople, network scale, and an improved pipeline conversion rate following a more favorable economic environment [60][62] Question: Was there any impact from Oracle on the Data Marketplace? - Management estimated that Oracle contributed a few points of growth to the Data Marketplace in Q3, with expectations for continued impact moving forward [70][71] Question: How do you view the sales momentum and its potential impact on future growth? - Management expressed confidence that the current sales momentum is durable, with expectations for stronger growth in the back half of FY 2026 [80][84] Question: What are the expectations for customer count and $1 million-plus customer count? - Management noted some pressure on total customer count due to market consolidation but expects stabilization moving forward, with a positive trend in $1 million-plus customers anticipated in the next quarter [96][99] Question: What enhancements are planned for product usability? - Management highlighted ongoing improvements in usability, measurement capabilities, and increased integrations as key areas of focus for product enhancements [105][110]