Advertising data platform LiveRamp (NYSE: RAMP) fell short of the market’s revenue expectations in Q1 CY2025, but sales rose 9.8% year on year to $188.7 million. Its non-GAAP EPS of $0.30 per share was 7.1% above analysts’ consensus estimates.
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LiveRamp (RAMP) Q1 CY2025 Highlights:
- Operating Margin: -6.1%, up from -8.3% in the same quarter last year
- Customers: 840, down from 865 in the previous quarter
- Net Revenue Retention Rate: 104%, down from 108% in the previous quarter
- Annual Recurring Revenue: $504 million at quarter end, up 7.9% year on year
- Market Capitalization: $2.13 billion
StockStory’s Take
LiveRamp’s first quarter results were shaped by ongoing product modernization and expansion within its largest customer cohort. Management emphasized the addition of new $1 million-plus subscription customers in sectors such as financial services, as well as a record-setting quarter for contract renewals, including several multi-year agreements. CEO Scott Howe attributed revenue growth to successful upselling of existing clients—particularly into the company’s Clean Room solution, which supports collaborative data analytics—and highlighted improvements in platform stability and user experience following two major refreshes. CFO Lauren Dillard noted that while the sales environment was generally positive, new customer signings proved more challenging, partly due to the need for market education around emerging Clean Room capabilities and some hesitancy tied to macroeconomic uncertainty.
Looking ahead, management’s guidance for the next quarter and the full year is anchored by anticipated momentum in data collaboration products and new offerings such as Cross-Media Intelligence. Howe cited early customer interest in these capabilities, saying, “Our insights and measurement pipeline has more than doubled, and bookings are up nicely relative to the same period last year.” Dillard described a cautious outlook for variable revenue streams due to macroeconomic risks, but stated that execution against Clean Room and Cross-Media Intelligence sales could drive acceleration in the second half. Management also pointed to upcoming pilots of a new pricing model designed to attract mid-market customers, and ongoing investment in artificial intelligence features and platform migration as strategic priorities for sustainable growth.
Key Insights from Management’s Remarks
Management attributed this quarter’s performance to strong renewals among core customers, ongoing product enhancements, and increased adoption of its Clean Room and data measurement solutions.
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Large customer renewals: The renewal of 20 multimillion-dollar contracts, including half with multi-year terms, drove significant growth in remaining performance obligations. This signals the continued importance of LiveRamp’s solutions to its largest clients, which management identified as a key revenue pillar.
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Expansion of Clean Room usage: The Clean Room solution, enabling privacy-centric data collaboration, was a core driver of upsell activity. Management noted that only 25% of existing brand customers currently use a Clean Room, but those customers generate approximately four times more annual recurring revenue than those who do not, highlighting a substantial growth opportunity.
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Platform modernization and stability: Two major platform refreshes and backend upgrades have improved user experience, stability, and processing speed. Half of customer workflows have been migrated, with management expecting further gains in contraction rate as modernization continues.
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Marketplace and CTV partnerships: Growth in Marketplace & Other revenue reflected continued strength in digital ad spending and the expansion of partnerships in connected TV (CTV) advertising. Management cited nearly 50% year-over-year growth in CTV data purchases and upcoming new partnerships as bright spots.
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Customer count dynamics: The decline in total customer count was attributed primarily to international migration from direct to reseller arrangements, impacting small customers but not revenue. Management expects stabilization and eventual improvement in this metric as new Clean Room use cases and pricing models are rolled out.
Drivers of Future Performance
LiveRamp’s outlook is driven by adoption of new data measurement products, macroeconomic uncertainty, and ongoing investments in platform capabilities.
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Clean Room and Cross-Media Intelligence adoption: Management believes increased adoption of Clean Room solutions, especially the new Cross-Media Intelligence product for unified campaign measurement, will drive higher net retention and upsell activity. Early customer interest has expanded the sales pipeline, but broad adoption will depend on effective market education and execution.
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Macro and variable revenue risk: CFO Lauren Dillard outlined that roughly 30% of revenue is variable and sensitive to overall digital advertising trends. The guidance range reflects potential headwinds if macroeconomic conditions weaken, which could pressure Data Marketplace and usage-based revenues in the second half of the year.
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Mid-market pricing and AI investment: The upcoming pilot and rollout of a new pricing model aims to lower the cost of entry for mid-market customers, though material impact is expected beyond this year. Management is also investing in artificial intelligence integrations and platform migration, targeting efficiency and product differentiation.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will monitor (1) progress in Cross-Media Intelligence and Clean Room upsell activity, (2) stabilization or improvement in customer count following the international migration and new pricing pilots, and (3) the resilience of variable revenue streams amid potential macroeconomic headwinds. The pace of platform modernization and new CTV partnerships will also be important indicators of execution.
LiveRamp currently trades at a forward price-to-sales ratio of 2.7×. At this valuation, is it a buy or sell post earnings? The answer lies in our full research report (it’s free).
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