LiveRamp Holdings (RAMP)·Q3 2026 Earnings Summary
LiveRamp Beats Q3 as Operating Margin Hits Record 29%
February 5, 2026 · by Fintool AI Agent
LiveRamp delivered a solid Q3 FY26 (December quarter), posting record operating margin and free cash flow while beating both revenue and EPS estimates. The data collaboration platform reported revenue of $212M (+9% YoY) and non-GAAP EPS of $0.55, with management positioning AI as a "tailwind" rather than a threat to the business.
Did LiveRamp Beat Earnings?
Yes — beat on both revenue and EPS. This marks the 11th consecutive quarter exceeding guidance.
*Consensus estimates from S&P Global
The EPS beat was substantial, driven by a record non-GAAP operating margin of 29% — up 6 percentage points year-over-year. Operating expenses fell 6% YoY while revenue grew 9%, demonstrating strong operating leverage.
What Changed From Last Quarter?
Three key developments:
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Record profitability — Non-GAAP operating margin expanded to 29%, up from ~23% in Q2, with record free cash flow of $67M
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Customer count inflection — Total customers increased by 15 QoQ, the best performance in more than 12 quarters, driven by both lower churn and higher gross adds
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AI strategy crystallized — Management explicitly positioned AI as a tailwind, with 20+ AI partners signed and ~10% of activations already going to AI-enabled partners
*Values retrieved from S&P Global
How Is AI a Tailwind?
CEO Scott Howe made a forceful case that AI amplifies rather than threatens LiveRamp's platform. The core argument: AI systems need trusted, scaled data to function effectively in marketing — and LiveRamp provides exactly that.
Four competitive moats in an AI world:
- Identity — Largest, most accurate consented identity graph, foundational for AI personalization
- Interoperability — Only truly interoperable platform connecting data across any cloud and partner
- Data Governance — Enterprise-grade controls and privacy-enhancing technologies for regulated AI deployment
- Network Scale — Largest data collaboration network with thousands of interconnected customers
AI progress update:
"We have enhanced our architecture so AI applications and agents can securely access our network alongside humans and APIs... We are actively partnering with the AI ecosystem, having signed over 20 AI partners to date."
- 21+ live AI partnerships — Mix of AI natives (e.g., Scout for walled garden optimization) and incumbents (e.g., Google's AI shopping mode)
- ~10% of activations already going to AI-enabled partners
- Data Marketplace expanded to support data licensing for AI training plus licensing of third-party AI models and agents
Ask Fintool AI AgentRevenue Breakdown
Subscription revenue remains the core driver, with both segments showing healthy growth.
Customer metrics:
- $1M+ ARR customers: 140 (up 8 QoQ, up from 125 YoY)
- Total customers: Up 15 QoQ — best performance in 12+ quarters
- Subscription net retention: 101%
- ARR: +$11M QoQ, +7% YoY
- CRPO: $471M (+9% YoY)
- Total RPO: $710M (+23% YoY)
Strong bookings: Q3 bookings were up "strong double digits" YoY, mostly driven by expansion with existing customers through Clean Room cross-sell for commerce media and measurement use cases.
What Did Management Guide?
Q4 guidance in line; FY26 maintained; clear path to Rule of 40 by FY28.
*Consensus estimates from S&P Global
Rule of 40 roadmap:
- FY26: Rule of 31 (9% revenue growth + 22% operating margin)
- FY28 Target: Rule of 40 (10-15% revenue growth + 25-30% operating margin)
- Pathway: AI tailwinds, usage-based pricing expansion, ongoing cost efficiencies from offshoring
CFO Lauren Dillard noted: "We have clear visibility into 10%+ growth next year if current execution holds."
Q&A Highlights
On the Publicis Partnership
CEO Scott Howe explained the "Intel Inside" philosophy for reseller partnerships:
"We want every major platform and agency to use our modular composable platform and innovate on top of it... By building using LiveRamp pieces, they can deliver better products to their customers."
The Publicis deal is usage-based and covers all platform capabilities, making LiveRamp "economically neutral" on whether customers use them directly or through partners.
On Commerce Media Expansion
Management highlighted three high-growth verticals beyond retail:
- Travel — Nearly every major airline has launched a commerce media network
- Food Delivery — Uber, DoorDash with captive audience on screens
- Finance/Payments — Access to merchant spending data
The new usage-based pricing model enables serving smaller SMB clients through these commerce media partners.
On CTV Momentum
CFO Lauren Dillard: "About 70% of our 50 largest integrations today are either pure play CTV providers or ad tech/media platforms enabled to buy CTV." Netflix integration continues to scale, and CTV data purchased from the marketplace is outpacing overall marketplace growth.
On AI Demand Impact
When asked if AI is disrupting software demand, management pushed back firmly:
"We had a remarkably strong sales quarter in the third quarter. Conversion rates, deal cycle length, consistent sequentially. Our average deal size was up double digits, individual rep productivity up as well. And so we're not. We're simply not seeing that dynamic right now."
Ask Fintool AI AgentUsage-Based Pricing Expansion
A key growth initiative gaining momentum. Management is in final quarters of a year-long pilot with brand direct customers.
What's changing:
- Lower entry cost — Reduces friction for new logos, especially mid-sized brands
- Fungible usage tokens — Valid across all platform capabilities for 12 months (vs. monthly limits)
- Reseller expansion — Recently implemented with Publicis, in active talks with "handful of other resellers"
Early results: New usage-based contracts have lower average ACV than legacy deals (smaller, newer customers landing) but expected to grow over time.
CFO guidance: "I would expect we'd have more to share on our May call. It's certainly gonna take a few quarters for this to play out in our results, but we do expect some modest upside in the back half of next year as a result of this pricing initiative."
How Did the Stock React?
The stock is trading near 52-week lows despite the strong quarter, reflecting broader ad tech sector pressure. At ~11x forward EPS and 1.8x forward revenue, valuation appears compressed relative to the margin expansion story and AI positioning.
Key Risks and Concerns
Despite the beat, several factors warrant monitoring:
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Revenue growth still single-digit — 9% growth is solid but not accelerating meaningfully; Rule of 40 requires 10-15%
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CRPO growth decelerating — Up 9% YoY vs. stronger prior periods; CFO attributed to timing of multi-year deal renewals
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Usage-based transition uncertainty — Lower upfront ACV during transition could pressure near-term revenue recognition
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Cookie deprecation — Platform economics depend on identity resolution as browser-based tracking evolves
Forward Catalysts
- RampUp 2026 conference: March 3-5 in San Francisco — potential for new AI/product announcements
- Q4 FY26 earnings: ~May 2026 — FY27 guidance and usage-based pricing update
- AI partnership announcements: "Robust pipeline" of additional AI partners expected in coming quarters
- Reseller pricing deals: Active negotiations with multiple agencies/ad tech platforms
The Bottom Line
LiveRamp delivered a clean beat driven by exceptional margin expansion and record free cash flow. The AI narrative has evolved from defensive ("we're not threatened") to offensive ("AI is a tailwind"), with 20+ AI partnerships and ~10% of activations already AI-enabled. The usage-based pricing transition is progressing well and should support FY27 growth. With shares near 52-week lows and management confident in 10%+ growth visibility, the setup appears favorable for long-term investors willing to bet on the Rule of 40 trajectory.
Ask Fintool AI AgentData sourced from LiveRamp Q3 FY26 earnings call transcript and S&P Global estimates.