Summary
LiveRamp reported fiscal 2024 second-quarter revenue of $159.9 million, up 8.7% from the prior-year quarter. Year-to-date revenue was $313.9 million, up 8.5%. Gross profit was $118.7 million, up 13.2%, and gross margin was 74.2%, up 3.0 percentage points. Operating income was $8.2 million, up from an operating loss in the prior-year quarter, and operating margin was 5.1%, up 24.9 percentage points. Net income was $4.9 million, up from a net loss, and diluted EPS was $0.07, up from a loss per share a year earlier. The swing to profitability came as operating expenses fell and gross margin expanded.
The non-GAAP picture showed similar momentum. Non-GAAP operating income was $32 million compared to $17 million, and non-GAAP operating margin was 20%, expanded by 8 percentage points. Non-GAAP gross profit was $121 million, up 9%, while non-GAAP gross margin of 75% was flat year-on-year. Non-GAAP diluted EPS was $0.43. Adjusted EBITDA was $32.4 million compared to $18.2 million. Operating cash flow for the six months ended September 30, 2023 was $61.5 million, up from the prior-year period. Capital expenditures were $0.2 million in the quarter, down 92.5%. Current deferred revenue was $21.0 million, up 27.9%.
Remaining performance obligations were $489.8 million, up 26.0%, and current remaining performance obligations were $339 million, up 16%. Subscription CRPO was $294.1 million, up 15.5%. Annualized recurring revenue was $427.5 million, up 1.9%. Subscription net retention was 101%, down from 106% in the prior year, and platform net retention was 104%. The company ended the quarter with 99 customers whose subscription contracts exceed $1 million in annual revenue, compared to 92 a year earlier, and 895 direct subscription customers, compared to 920. Management called it the best new logo quarter in two years, including multiple Fortune 500 customers. Subscription revenue accounted for 79% of total revenue.
LiveRamp expanded its partner network during the period. It was selected as a 2023 Google Cloud Partner of the Year, made its identity capabilities natively available within AWS Entity Resolution, and announced a partnership with Sendbird. It also announced interoperability work with Epsilon and FreeWheel and an expanded partnership with Yahoo. The Authenticated Traffic Solution has more than 165 supply-side platforms and demand-side platforms live or committed to bid on RampID and ATS, over 16,000 publisher domains, and over 70% of the comScore 100 publishers. The company says it is connected to over 92% of consumer time spent online in the US.
Guidance points to slower growth. For the third quarter of fiscal 2024, management guided revenue of $165 million, an increase of 4%, and non-GAAP operating income of $29 million. For the full fiscal year 2024, the company guided revenue of between $632 million and $637 million, an increase of between 6% and 7%, and non-GAAP operating income of between $97 million and $100 million. The MD&A notes that subscription net retention and ARR growth slowed because of increasing downsell and churn, driven in part by budget and economic pressures on customers. LiveRamp expects subscription revenue growth in fiscal year 2024 to be lower than rates of growth in fiscal year 2023.
Risks include customer renewals, competition, rapidly changing technology, third-party cookie declines, regulation, data breaches, rising interest rates, inflation, recession, and geopolitical uncertainty. The company repurchased approximately 490,000 shares for $15 million in the second quarter, bringing the fiscal first-half total to 1.3 million shares for $35 million. Through September 30, 2023, LiveRamp had repurchased a total of 37.0 million shares for $917.5 million under its program, leaving remaining capacity of $182.5 million. The quarter showed solid margin gains and positive operating cash flow on a year-to-date basis, but the weaker retention and ARR trends explain why management expects slower subscription revenue growth for the full fiscal year.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q2 FY2024 | Q1 FY2024 | QoQ | Q2 FY2023 | YoY |
|---|---|---|---|---|---|
| Revenue | $159.9M | $154.1M | +3.8% | $147.1M | +8.7% |
| Gross profit | $118.7M | $108.4M | +9.4% | $104.8M | +13.2% |
| Gross margin | 74.2% | 70.4% | +3.8 pp | 71.2% | +3.0 pp |
| Research & development | $33.7M | $34.5M | -2.3% | $46.1M | -26.9% |
| Sales & marketing | $44.1M | $44.9M | -1.7% | $45.9M | -3.9% |
| General & administrative | $26.0M | $26.7M | -2.5% | $28.7M | -9.4% |
| Total operating expenses | $110.5M | $106.2M | +4.0% | $133.9M | -17.5% |
| Operating income (loss) | $8.2M | $2.3M | +261.6% | -$29.1M | +128.2% |
| Operating margin | 5.1% | 1.5% | +3.7 pp | -19.8% | +24.9 pp |
| Net income (loss) | $4.9M | -$1.6M | +406.6% | -$30.4M | +116.0% |
| Net margin | 3.0% | -1.0% | +4.1 pp | -20.7% | +23.7 pp |
| Diluted EPS | $0.07 | -$0.02 | +$0.09 | -$0.45 | +$0.52 |
| Customers | 500 | 96 | +420.8% | 92 | +443.5% |
| Net retention rate | 101.0% | 98.0% | +3.0 pp | 106.0% | -5.0 pp |
Risks
Customer budget and economic pressures drove increased downsell and churn, causing subscription net retention to decrease to 101% at September 30, 2023 from 106% a year earlier and ARR growth to slow to 1.9% from 15.0%. The company expects fiscal 2024 subscription revenue growth to be lower than fiscal 2023.
Lower contribution from new customer activity and new logo deals compounded the ARR slowdown, even though RPO increased 26.0% to $489.8 million at September 30, 2023, largely from multi-year renewals rather than new business. Current RPO increased 15.8% to $339.3 million and subscription CRPO increased 15.5% to $294.1 million.
International gross margins decreased to 46.4% from 53.4% in the quarter and to 44.9% from 54.1% year to date, and the quarter included a $2.8 million APAC goodwill impairment plus lease impairments and restructuring. This suggests weaker profitability outside the U.S.
The effective tax rate was 69% for the quarter and 87% year to date, driven by the capitalization of R&D expenditures under IRC Section 174, which may continue to elevate tax expense relative to pretax income.
SaaS KPIs
All quarters →Non-GAAP Operating Margin
Platform Net Retention
Subscription Net Retention
Customers > $1M ARR
Direct Subscription Customers
Free Cash Flow to Equity
Annualized Recurring Revenue (ARR)
Subscription CRPO
Summary, forecast, risks and KPIs are extracted from LiveRamp Holdings, Inc.'s SEC filings for Q2 FY2024 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 2, 2026.