LiveRamp Holdings, Inc. Q1 FY2025 earnings call

Key Quarter Highlights - Q1 exceeded top and bottom-line expectations, marked the second consecutive quarter of double-digit growth in total and subscription revenue, with marketplace revenue up 28%. - Annual recurring revenue grew by $11 million quarter-on-quarter for the third consecutive quarter of double-digit millions net new ARR, and subscription net retention increased to 105%. ### Google's Chrome Cookie Plan - Chrome abandoned the original plan to deprecate third-party cookies in early 2025 but introduced new initiatives like making it easier for consumers to opt out of third-party tracking and IP protection. - LiveRamp's Authenticated Traffic Solution (ATS) is well-positioned as it has user authentication at its core, especially for cookie-less channels like CTV, and generates better results than cookies. ### Data Collaboration Opportunity - Focused on making data collaboration simple from product and go-to-market aspects, integrating capabilities into the Clean Room platform, building a scaled collaboration network by adding critical nodes like large social, CTV, and media properties, and fine-tuning the story to highlight additional use cases and economic return.

In Fiscal 2025 First Quarter, total revenue reached $176 million. Subscription revenue was $135 million, accounting for approximately 76.7% of total revenue. Fixed subscription revenue grew by 12%, while subscription usage revenue increased by 1%. Marketplace and other revenue stood at $41 million, a 28% increase. Data marketplace, which made up 78% of marketplace and other revenue, grew by 23%, with CTV roughly doubling in the quarter. Annual recurring revenue (ARR) grew by $11 million quarter-on-quarter, and subscription net retention improved to 105%.

FY'25 Guidance - Total revenue expected to be between $715 million and $735 million, up 10% at midpoint. - Subscription revenue: fixed subscription expected to grow high-single to low double-digits, usage revenue flat year-on-year. - Marketplace and other revenue expected to grow in mid-teens. - Gross margin expected to be approximately 75%. - Non-GAAP operating income between $127 million and $131 million. - GAAP operating income between negative $2 million and positive $2 million. - Share repurchases expected to spend between $60 million and $70 million. ### Q2 Guidance - Expected total revenue of approximately $176 million, non-GAAP operating income of $31 million, and operating margin of 18%. - Subscription revenue expected to be high single-digits, marketplace and other revenue expected to be up high teens.

• Elongated sales cycles due to macroeconomic uncertainty. - Customers being cautious amidst uncertain economic conditions. - Chrome's announcement potentially lessening urgency for some advertisers to switch to alternative identity technologies.

Q: What needs to happen for advertisers to better understand and act quicker on PAIR?

A: Evangelize the results, tighten the data collaboration story, and highlight bottom-line results in the hard economic environment.

Q: Update on Habu integration?

A: Integration is smooth, pipeline is robust but need to push pipeline from interest to closed deals and build network density.

Q: Thoughts on Oracle marketplace pipeline?

A: Expect net positive, subscription revenue is committed but incremental data marketplace gains will be significant.

Q: How is the discussion with clients on consent and opt-in/opt-out?

A: Clients are not overly concerned, market forces like economics and CTV usage will drive adoption, and LiveRamp will continue evangelization.