LiveRamp (US:RAMP)2025-08-06 21:32Financial Data and Key Metrics Changes - Total revenue increased by 11% year-on-year, reaching $195 million, exceeding expectations by $4 million [27][28] - Non-GAAP operating income rose by 34%, amounting to $36 million, surpassing guidance by $3 million [27][34] - GAAP operating margin expanded by seven points to a record high of 10% [34] - Free cash flow outlook improved significantly due to recent tax legislation [27][34] Business Line Data and Key Metrics Changes - Subscription revenue grew by 10% to $148 million, with subscription usage revenue up approximately 40% [28][29] - Marketplace and other revenue increased by 13% to $46 million, with Data Marketplace accounting for 76% of this revenue [32] - Total RPO (contracted backlog) rose by 29% to $690 million, while current RPO increased by 14% to $451 million [29] Market Data and Key Metrics Changes - The selling environment was characterized as generally positive, with strong sales momentum and several million-dollar deals [30][31] - Average deal cycle decreased to nine months, with a higher conversion rate of pipeline into bookings [30] Company Strategy and Development Direction - The company is modernizing its pricing model to offer greater flexibility and align costs with usage, which is expected to enhance upsell opportunities and attract new clients [14][15] - Focus on AI's transformative potential in digital advertising, positioning the company as a critical partner for clients' AI ambitions [22][23] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, citing a robust new business pipeline and good sales momentum across several solutions [4][5] - The company anticipates continued growth in commerce media and CTV, with strong customer interest in its cleanroom strategy [11][12][23] Other Important Information - The company repurchased $30 million in stock during the first quarter, maintaining a strong balance sheet with approximately $370 million in cash and no debt [34] - The company expects to deploy a substantial portion of higher free cash flow towards share repurchases [39][42] Q&A Session Summary Question: Can you elaborate on the assumptions behind the revenue growth for Q2? - Management indicated that while Q1 exceeded expectations, they are conservatively guiding Q2 subscription usage growth to be flat year-on-year due to timing-related factors [46][47] Question: What gives confidence that the strength in Commerce Media Networks can continue? - Management highlighted strong customer engagement and the expansion of partnerships across various industries, indicating a growing network effect [51][55] Question: Can you provide balance on the momentum across Clean Room, CMI, and Commerce Media? - Management acknowledged some churn events impacting million-dollar customers but expressed confidence in a rebound due to strong sales momentum in Q2 [63][66] Question: How are pricing changes impacting new deals? - Management noted that the new pricing model is viewed favorably, reducing friction in the new business process and allowing for a more flexible entry point for clients [77][78] Question: What is LiveRamp's right to win in the rapidly changing AI environment? - Management emphasized that the company is not an AI company but an enabler, focusing on integrating proprietary data to enhance AI performance for clients [83][86]