Summary
LiveRamp's fiscal 2026 third quarter revenue was $212.2 million, up 8.6% from $195.4 million in the prior year quarter. The increase of $16.8 million came from upsell to existing customers, higher variable revenue and Data Marketplace growth. International revenue growth carried about 5 percentage points of currency help. Management described the period as a record quarter for operating margin and operating cash flow.
Profitability scaled much faster than the top line. Operating income was $39.5 million, up 169.4% from $14.7 million, and operating margin expanded 11.1 percentage points to 18.6% from 7.5%. Net income was $39.9 million, up 255.7% from $11.2 million, and diluted earnings per share was $0.62 against $0.17. Two items did much of that work. Non-cash stock compensation fell to $18.1 million from $26.8 million, and the effective tax rate dropped to 7.1% from 49.1% after the 2025 Tax Act allowed immediate expensing of domestic research and development costs.
Gross profit was $152.5 million, up 8.6%, and gross margin held at 71.9%, flat with the prior year quarter. Cloud infrastructure costs rose $5.8 million on higher customer usage and platform migration costs, offset by lower purchased intangible amortization. The nine-month picture looks similar but with a thinner margin. Year-to-date revenue was $606.8 million, up 9.0% from $556.9 million, while gross margin slipped to 70.7% from 71.6%. Year-to-date operating income was $68.2 million, up 303.1% from $16.9 million, and operating margin was 11.2% against 3.0%. Year-to-date net income was $75.0 million, up 1,276.1% from $5.5 million, and diluted earnings per share was $1.14 against $0.08.
Cash generation held up. Year-to-date operating cash flow was $108.9 million, up 19.1% from $91.4 million. Free cash flow, which the company defines as operating cash flow less capital expenditures, was $67.1 million in the quarter. Capital expenditures were $0.2 million in the quarter, down 42.6%, and $1.1 million year to date, up 45.1%. Cash and cash equivalents were $395.9 million at December 31, 2025. LiveRamp repurchased 1.4 million shares for $39.2 million in the quarter and 4.3 million shares for $119 million fiscal year to date, leaving $137.4 million of authorization remaining. Diluted weighted average shares fell to 64.3 million from 66.7 million, which flatters per share comparisons. Days sales outstanding stretched to 95 days from 89 days at March 31, 2025, partly because Data Marketplace receivables are billed gross and recognized net.
Subscription metrics were steady rather than strong. Subscription net retention was 101% and platform net retention was 103%. Annualized recurring revenue was $527 million, up 7%, a slowdown management tied to lower net growth from existing customers after the Habu acquisition lifted the prior year period. Current remaining performance obligations were $471 million, up 9%, and total remaining performance obligations were $709.8 million, up 22.6% from $579.1 million, helped by several large multi-year renewals. Current deferred revenue was $46.0 million, up 2.6%. The company ended the quarter with 849 direct subscription customers, down from 865 a year ago, while the count of customers spending more than $1 million in annualized subscription revenue rose to 140 from 125.
Guidance points to more of the same. For the fourth quarter of fiscal 2026, management expects revenue to keep growing, with non-GAAP operating income of approximately $38 million. For the full fiscal year 2026, non-GAAP operating income guidance is approximately $180 million. The company expects a material decrease in cash tax payments this fiscal year because of the new tax law, and it noted a reasonable possibility that a substantial portion of the valuation allowance could be released within the next 12 months. Risks in the filings include churn and downsell, dependence on data suppliers and partners who could withhold data, rapid technology change around AI, integration of acquisitions, privacy and data-use regulation, cybersecurity breaches, litigation costs tied to the class action lawsuit, tariffs and trade restrictions, inflation and high interest rates.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q3 FY2026 | Q2 FY2026 | QoQ | Q3 FY2025 | YoY |
|---|---|---|---|---|---|
| Revenue | $212.2M | $199.8M | +6.2% | $195.4M | +8.6% |
| Gross profit | $152.5M | $140.2M | +8.8% | $140.4M | +8.6% |
| Gross margin | 71.9% | 70.2% | +1.7 pp | 71.9% | +0.0 pp |
| Research & development | $33.8M | $37.0M | -8.5% | $42.7M | -20.9% |
| Sales & marketing | $48.9M | $48.7M | +0.4% | $50.9M | -3.9% |
| General & administrative | $29.1M | $33.2M | -12.3% | $32.0M | -9.1% |
| Total operating expenses | $113.0M | $118.8M | -4.9% | $125.7M | -10.1% |
| Operating income (loss) | $39.5M | $21.4M | +84.5% | $14.7M | +169.4% |
| Operating margin | 18.6% | 10.7% | +7.9 pp | 7.5% | +11.1 pp |
| Net income (loss) | $39.9M | $27.4M | +45.4% | $11.2M | +255.7% |
| Net margin | 18.8% | 13.7% | +5.1 pp | 5.7% | +13.0 pp |
| Diluted EPS | $0.62 | $0.42 | +$0.20 | $0.17 | +$0.45 |
| Net retention rate | 101.0% | 102.0% | -1.0 pp | 108.0% | -7.0 pp |
Risks
Subscription net retention was 101% in the quarter ended December 31, 2025, compared with 108% in the prior-year quarter, and ARR growth decelerated to 7% from 10% in the prior-year period. MD&A attributes the deceleration to lower variable revenue and lower net growth, meaning upsell revenue less downsell and churn, in existing customer revenue.
Gross margin for the nine months ended December 31, 2025 was 70.7%, down 0.9 percentage points from 71.6% in the prior-year period. MD&A cites an increase in cloud infrastructure costs of $21.4 million for the nine months, driven by higher customer usage and platform migration costs, and U.S. gross margins decreased to 71.2% from 72.5%.
General and administrative expense for the nine months ended December 31, 2025 increased 5.6% from the prior-year period, primarily due to higher professional services expenses largely related to litigation costs, including those associated with the class action lawsuit.
SaaS KPIs
All quarters →Non-GAAP Operating Margin
Platform Net Retention
Subscription Net Retention
Current Remaining Performance Obligations (CRPO)
Customers > $1M ARR
Direct Subscription Customers
Annualized Recurring Revenue (ARR)
Free Cash Flow
Remaining Performance Obligations (RPO)
Summary, forecast, risks and KPIs are extracted from LiveRamp Holdings, Inc.'s SEC filings for Q3 FY2026 (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.