LiveRamp Holdings, Inc. Q2 FY2026 earnings call

• Q2 delivered solid results with revenue and operating income surpassing guidance. Revenue grew 8%, with Marketplace and other up 18%, subscription revenue up 5%.
• Key areas focus: impact of data collaboration platform on Commerce Media, CTV, and AI; update on new pricing model rollout; commitment to Rule of 40 financial targets.
• Commerce Media: powering new networks for industry giants; CTV and deeper publisher integrations with Meta attribution insights and expanded Netflix integrations.
• AI: 6 distinct areas of partnership, own AI tools like audience segment builder and AI Agentic orchestration.
• New pricing model: usage-based model rolling out, with positive feedback and expanded pilot, expected to drive incremental revenue growth.

Total revenue for Q2 was $200 million, up 8%. Subscription revenue was $150 million, up 5%. Marketplace and other revenue increased 18% to $50 million. Data Marketplace, accounting for roughly 75% of Marketplace and other revenue, grew by 14%. Net new ARR in Q2 was $14 million, the largest organic increase in the past 7 quarters, equating to year-on-year growth of 7%. $1 million-plus subscription customers increased by 5% sequentially to a new high of 132.

• FY '26 revenue guidance increased by $3 million at midpoint, expected to be between $804 million and $818 million (8%-10% growth).
• Gross margin expected to be ~72% vs prior mid-70s. Non-GAAP operating income between $178 million and $182 million. GAAP operating income between $83 million and $87 million.
• Q3 expected total revenue between $209 million and $213 million, non-GAAP operating income between $55 million and $57 million, operating margin ~27%.

Q: Elaborate on drivers of improvement in ARR in the quarter?

A: Lauren Dillard mentioned strong cross-sell/upsell of Clean Room solution, new logo activity, and lower churn.

Q: Upsell opportunity with new solutions in next 2 quarters?

A: Scott Howe felt optimistic due to multiple growth levers like XMI Cross-Media Intelligence, commerce-media networks, CTV expansion, and AI.

Q: Implications of AI search on business?

A: Scott Howe said LiveRamp's exposure to open web is low, and AI upside is high as first/second-party data is crucial for AI models.

Q: Macro conservatism in revenue guide and incrementality from pilots?

A: Lauren Dillard said guidance has conservatism in variable revenue sources; Scott Howe discussed retail vs non-retail commerce-media growth. Lauren also mentioned pricing pilot not baked into this year's guide.

Q: Platform investments and customer count growth?

A: Scott Howe talked about platform upgrades in 3 areas, and Lauren Dillard said customer count is stabilizing with new logo activity and pricing model/clean room strategy as growth levers.