Revenue Growth Above Guidance
Total revenue of $212M, up 9% year-over-year and $1M above the midpoint of guidance; subscription revenue $158M, also up 9%.
LiveRamp Holdings
· RAMP
February 5th, 2026
Summary
- Earnings Call Date:
- 2026-02-05
- Change Since:
- +66.95%
- Next Earnings Date:
- 2026-08-12
Earnings Call Sentiment
PositiveThe call conveyed strong operational and financial performance: double-digit improvements in profitability, record free cash flow, meaningful customer growth, ARR momentum, and a clear strategic position around AI and usage-based pricing. Near-term headwinds were limited and mostly timing-related (marketplace sequencing, platform upgrade margins, and contract renewal timing). Management provided raised confidence in multi-year targets (Rule of 40 by FY28) and reiterated guidance with narrow ranges for FY26, while noting that some benefits from pricing and AI will materialize over several quarters.
Company Guidance
The company updated FY‑26 guidance calling for revenue of $810–814M (roughly 9% growth), gross margin of ~72–73% (down 1–2 pts as platform migration completes), and non‑GAAP operating income of $180M (a 22% margin), while GAAP operating income is expected to be ~ $84M (≈10% margin); management reiterated FY‑26 as “rule of 31” (9% revenue growth, 22% operating margin) and a longer‑term goal of Rule of 40 by FY‑28 (10–15% revenue growth and 25–30% non‑GAAP operating margin). For Q4 they guided revenue of $203–207M, non‑GAAP operating income of ~ $38M (≈18% margin), subscription revenue up high single digits, marketplace & other revenue up low double digits, and gross margin ~72%. They expect free cash flow to be up slightly for the year, EBITDA conversion >75%, continued share repurchases (Q3 FCF $67M; $39M repurchased in Q3; FY‑to‑date repurchases $119M vs. FCF $108M), stock‑based comp of roughly $81M (down ~25% YoY), and signaled confidence in returning to 10%+ revenue growth next year given ARR momentum and AI/usage‑based pricing tailwinds.
ARR and Net New ARR Momentum
ARR increased $11M sequentially and 7% year-over-year; net new ARR was $11M+ for the quarter, marking a second consecutive quarter of meaningful net new ARR.
Customer Expansion and Retention
Total customers increased by 15 (best in 12 quarters); million-dollar-plus customers rose by 8 to a record 140; subscription net retention was 101% (in line with 100–105% target).
Record Profitability and Cash Generation
Non-GAAP operating income rose 36% to $62M; operating margin expanded to a record 29% (up 6 points year-over-year); record free cash flow of $67M in the quarter.
Balance Sheet Strength and Shareholder Returns
Cash and short-term investments approx. $403M, zero debt; repurchased $39M of stock in the quarter and $119M year-to-date with $137M remaining buyback authorization.
Strong RPO Backlog
Total RPO (contracted backlog) increased 23% to $710M; current RPO up 9% to $471M, reflecting bookings strength and seasonality in renewals.
Marketplace and Product Momentum
Data marketplace and CTV demand reaccelerated to double-digit growth late in the quarter; marketplace & other revenue $54M (up 8%) with reacceleration into January.
Strategic AI Positioning and Partnerships
Positioned as foundational data network for AI with 20+ AI partners signed; expanded data marketplace to include AI models, agents, and applications to support AI training and licensing.
Usage-Based Pricing Progress
Year-long usage-based pricing pilot showed benefits for land-and-expand motions; expanded model to reseller customers (e.g., Publicis, Uber) with broader rollout planned in FY27.
Clear Rule of 40 Roadmap
Reiterated target to achieve Rule of 40 by FY28 (10–15% revenue growth and 25–30% non-GAAP operating margin); expect Rule of 31 in FY26 with ~9% revenue growth and 22% operating margin.
Operator
Good afternoon, ladies and gentlemen, and welcome to LiveRamp Holdings, Inc.'s Fiscal 2026 Third Quarter Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. And to withdraw your question, simply press star one again. As a reminder, this conference call is being recorded. I would now like to turn the call over to your host, Drew Borst, Vice President of Investor Relations. Please go ahead.
Drew Borst
Thank you, operator. Good afternoon, everyone, and thank you for joining our fiscal 2026 third quarter earnings call. With me today are our CEO, Scott Howe, and CFO, Lauren Dillard. Today's call and the earnings press release may contain forward-looking statements.
Drew Borst
That are subject to risks and uncertainties that could cause actual results to differ materially. For a detailed description of these risks, please read the risk factors section of our public filings and the press release. A copy of our press release and financial schedules, including any reconciliation to non-GAAP financial measures, is available at investors.liveramp.com.
Drew Borst
Also, during the call today, we'll be referring to the slide deck that is also available on our IR website. With that, I'll turn the call over to Scott. Thank you, Drew, and thanks to everyone joining us today.
Scott Howe
You'll hear three main themes during my remarks today. First, our business continues to demonstrate durability, predictability,...
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