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LiveRamp Holdings, Inc. (RAMP)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 FY25 delivered double-digit top-line growth with total revenue of $195.4M (+12% YoY), non-GAAP operating income of $45.3M (+24% YoY) and a record quarterly non-GAAP operating margin of 23%; GAAP diluted EPS was $0.17 and non-GAAP diluted EPS was $0.55 .
  • Subscription revenue rose 10% to $146.0M and Marketplace & Other grew 20% to $50.0M; Data Marketplace strength continues with CTV now ~20% of marketplace revenue, supporting outperformance vs broader digital ad markets .
  • KPIs strengthened: ARR $491M (+10% YoY), CRPO $434M (+13% YoY), subscription net retention 108% (10-quarter high), while $1M+ customers remained at 125; direct subscription customers declined to 865 amid smaller-account pressure and reseller transitions .
  • Guidance raised: FY25 revenue to $741–$743M and non-GAAP operating income to $135M; Q4 FY25 guidance calls for $184–$186M revenue and $22M non-GAAP operating income; management reiterated progress toward Rule of 40 and expects 20–25% operating margin in FY26 .
  • Near-term catalysts: Investor Day and RampUp conference (Feb 25–27), continued clean room network scaling across CTV and commerce media, and standardized clean room queries accelerating time-to-value; management highlighted Q3 sales conversion materially rebounded on improved IT spend environment and refined go-to-market .

What Went Well and What Went Wrong

What Went Well

  • Sales momentum and pipeline conversion rebounded materially in Q3, with conversion rates nearly doubling versus prior three quarters; renewal rates hit a 10-quarter high, and average deal size increased >25% sequentially .
  • Marketplace & Other revenue grew 20% YoY (Data Marketplace +18%) aided by strength in CTV (roughly 20% of marketplace revenue); operating cash flow surged to $45.1M from $16.6M YoY .
  • Management emphasized network-scale advantages and clean room adoption across premium publishers and commerce media networks, with concrete upsells and new logos (e.g., high-6-figure retail upsell; 7-figure QSR upsell; top 5 retail media network; global hotel operator) .

Specific quotes:

  • “We posted strong third quarter results, exceeding our guidance and consensus on the top and bottom line… Operating margin… reached a record quarterly high of 23%.”
  • “Conversion rates nearly doubled… average deal size… up over 25%… renewal rates… at a 10-quarter high.”
  • “Our network enables… measure and optimize outcomes… scale creates a defensible advantage.”

What Went Wrong

  • GAAP gross margin compressed ~2 pts YoY to 71.9% and GAAP operating margin fell ~1 pt YoY to 7.5%; GAAP diluted EPS declined to $0.17 from $0.21 YoY, reflecting higher stock-based compensation and amortization .
  • Direct subscription customers fell to 865 (from 885 in Q2), with persistent pressure among small, low-ACV accounts and international reseller transitions; million-dollar customer count did not rise sequentially due to timing lag of Q3 signings .
  • Management continued to note elongated sales cycles and macro caution earlier in the year, though Q3 improved; gross margin outlook guided to the low end of 74–75% due to short-term reliability and processing investments .

Financial Results

Revenue, EPS, and Margins by Quarter

MetricQ1 FY25Q2 FY25Q3 FY25
Total Revenue ($M)$176.0 $185.0 $195.4
Subscription Revenue ($M)$135.0 $143.0 $146.0
Marketplace & Other Revenue ($M)$41.0 $42.0 $50.0
GAAP Diluted EPS ($)$(0.11) $0.03 $0.17
Non-GAAP Diluted EPS ($)$0.35 $0.51 $0.55
GAAP Gross Margin (%)71% 72% 71.9%
Non-GAAP Gross Margin (%)74% 75% 74%
GAAP Operating Income ($M)$(5.2) $7.0 $14.7
Non-GAAP Operating Income ($M)$27.0 $41.0 $45.3

Notes: Management stated Q3 exceeded guidance and consensus on top/bottom lines .

Q3 Actual vs Company Guidance (from Q2 guide)

MetricQ3 Guidance (from Q2)Q3 Actual
Revenue ($M)$191 $195.4
Non-GAAP Operating Income ($M)$39 $45.3
Non-GAAP Operating Margin (%)20% 23%

Segment Breakdown

Segment ($M)Q1 FY25Q2 FY25Q3 FY25
Subscription$135.0 $143.0 $146.0
Marketplace & Other$41.0 $42.0 $50.0

KPIs

KPIQ1 FY25Q2 FY25Q3 FY25
$1M+ Customers (count)115 125 125
Direct Subscription Customers (count)900 885 865
Subscription Net Retention (%)105% 107% 108%
Platform Net Retention (%)108% 110% 111%
ARR ($M)$478 $483 $491
CRPO ($M)$398 $374 $434

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($M)FY25$737–$739 $741–$743 Raised
Non-GAAP Operating Income ($M)FY25$133–$135 $135 Raised to top-end
GAAP Operating Income ($M)FY25$6–$8 $10 Raised
Revenue ($M)Q4 FY25n/a$184–$186 New
Non-GAAP Operating Income ($M)Q4 FY25n/a$22 New
GAAP Operating Loss ($M)Q4 FY25n/a$(8) New

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2)Current Period (Q3)Trend
Sales momentum & pipeline conversionElongated cycles; cautious budgets; robust pipeline; Q2 conversion below trend Conversion rates nearly doubled; average deal size +>25%; renewals at 10-quarter high; improved IT spend environment Improving
Clean room network & standardizationBuilding standardized queries and legal frameworks; adding 35 target publishers; Disney scaled >30 brand collaborations; Walmart use cases Continued traction; upsells/new logos across retail/QSR/hospitality; expanding use cases Accelerating
CTV as growth driverCTV accounted for ~20% of Data Marketplace; Netflix partnership planned; AI destinations (Perplexity/Chalice) Marketplace growth supported by CTV; strong demand; improved measurement via clean rooms Positive
AI integrations/use casesLaunched first AI destinations; plan for broad partner menu; enterprise synthetic data for model testing More usability improvements; AI-enabled queries/reporting and partner integrations roadmap Broadening
Rule of 40 path & marginsFY25 margin ~18%; FY26 target 20–25%; offshoring ramping (250 roles) Record quarterly margin (23% non-GAAP); reiterates FY26 20–25% margin On track
Macro/cookiesChrome cookie plans changed; urgency attenuated; PAIR continues; ATT implies opt-in low; economic caution IT environment improved; momentum more durable; focus on ROI and authenticated addressability Stabilizing

Management Commentary

  • “We exceeded our guidance and consensus on the top and bottom line… fourth consecutive quarter of double-digit growth… record quarterly high of 23% [non-GAAP operating margin].” — Scott Howe, CEO .
  • “Conversion rates nearly doubled… average deal size… up over 25%… renewal rates… at a 10-quarter high.” — Lauren Dillard, CFO .
  • “LiveRamp operates as a classic network business, where scale creates a defensible advantage… few companies have enough data to go alone… desire to collaborate in a secure clean room environment.” — Scott Howe .
  • “ARR grew by 10% year-on-year… CRPO rebounded with a 16% increase quarter-over-quarter… above normal seasonality.” — Scott Howe .
  • “We expect to reach or surpass Rule of 30… 12–13% revenue growth and 18% operating margin… remain on track to deliver 20–25% operating margin in FY ’26.” — Scott Howe .

Q&A Highlights

  • Drivers of turnaround: stronger sales execution, network scale flywheel, budgets “unstuck” post-election; connectivity and clean room nodes and usage doubled; conversion materially increased .
  • Oracle impact: estimated to add “a few points” of growth to Data Marketplace; majority of Oracle data providers already on LiveRamp; guidance treads lightly until trend established .
  • EBITDA/OpEx seasonality: Q4 OpEx sequential increase (~$12M) split between seasonal factors (payroll taxes, RampUp) and some project spend shifting from Q3 .
  • Durability of momentum: wins and upsells de-risk forward outlook; SaaS revenue recognition lag; expects momentum to support stronger back-half of next year .
  • Sales efficiency and channels: capacity rebuilt; progress with cloud hyperscalers/SIs; commerce media networks acting as channel partners to drive logos and usage .
  • Customer metrics: small-account pressure and international reseller transitions weighed on direct customer count; $1M+ customers expected to show more strength next quarter due to lag .
  • Product usability: prioritizing simplicity (AI-enabled queries, standardized reporting), measurement upgrades (cross-media insights), and deeper AI partner integrations .
  • AI halo: LiveRamp as an investment vehicle for AI enablement; collaboration provides authenticated data, synthetic data for model testing, and broad integration with AI apps .

Estimates Context

  • We attempted to pull S&P Global consensus for Q3 FY25 (Primary EPS and Revenue); data was unavailable due to SPGI daily request limits. Values could not be retrieved; therefore, explicit consensus comparisons are not provided. Management stated Q3 results exceeded consensus on top and bottom lines .
  • Where estimates materially drive narrative, analysts may need to update models for stronger subscription usage, faster pipeline conversion, and marketplace outperformance (CTV), alongside raised FY25 revenue/operating income guidance .

Key Takeaways for Investors

  • Q3 beat on revenue and profitability with record non-GAAP operating margin (23%), signaling improved execution and traction of the clean room/data collaboration strategy .
  • Marketplace momentum (Data Marketplace +18%; CTV ~20% of marketplace revenue) and stronger subscription usage (+9% vs flat expectation) suggest near-term upside as clean room endpoints proliferate .
  • KPIs point to healthier fundamentals (ARR +10%, CRPO +13%, net retention 108%), but investor focus should monitor small-account churn and direct customer count trends as reseller transitions complete .
  • Guidance raised for FY25 revenue ($741–$743M) and GAAP/non-GAAP operating income ($10M and $135M, respectively); Q4 guide prudently embeds seasonal OpEx and tough marketplace comps .
  • Medium term: reiterated path to 20–25% operating margin in FY26 via cost discipline, offshoring leverage, and SaaS drop-through; Rule of 40 progress (Rule of 30 in FY25) remains a core valuation pillar .
  • Tactical: watch Investor Day on Feb 25 for pricing model evolution, standardized clean room templates, and AI-partner expansions that can accelerate usage-linked revenue .
  • Trading implications: positive revision risk on near-term operating income and marketplace revenue; potential multiple support from margin expansion credibility and accelerated network effects; balance with GAAP gross margin compression and customer mix shift .

Appendix – Additional Q3-period Press Releases (context)

  • “LiveRamp Pioneers Cross-Media Intelligence…” (media intelligence expansion across premium publishers) .
  • “From Fierce Rivals to Partners: Omar Tawakol joins super{set}…” (ecosystem/leadership) .
  • Mohegan casino media network launch, enabling first-party insights across digital/on-premise channels .

Citations:

  • Q3 press release and financial schedules: .
  • Q3 earnings call transcript: .
  • Q2 press release and call for trend/guidance context: .
  • Q1 press release and call for trend context: .