LiveRamp Blazes a Trail: Record-Breaking Q4 Earnings and a Bright Future Ahead
The latest fiscal year-end results from LiveRamp, a leading data connectivity platform provider, have made headlines with a standout performance that cements the company's position as a leader in its field. The Fiscal 2025 Fourth Quarter Earnings Call transcript reveals a remarkable set of achievements that showcase the company's continued growth and commitment to shareholder value.
Scott Howe, LiveRamp's CEO, took center stage during the earnings call, highlighting the company's strong financial performance in Q4. Revenue increased by a double-digit rate for the fifth consecutive quarter, beating expectations on both the top and bottom line. This impressive growth was driven by significant expansions in Subscription revenue (11% growth) and marketplace and other revenue (21% surge). The addition of 13 $1 million-plus Subscription customers during the year, including three new additions in Q4, further underscored the company's ability to win with its largest clients.
The significance of these customers cannot be overstated. Not only did they see aggregate revenue increase by 13%, exceeding overall subscription revenue growth rate, but also two new $1 million-plus customers from the financial services sector were signed on in Q4. These deals include a leading global digital payments platform and the nation's largest bank and credit card issuer.
A notable example of LiveRamp's success was its Clean Room solution being adopted by a leading global security software provider to enhance collaboration with PC partners, achieving a more comprehensive understanding of its customer base across both indirect and direct sales channels. Additionally, a record-setting quarter for renewals saw the company secure 20 multimillion-dollar ACV contracts, roughly half of which are multiyear contracts.
LiveRamp's efforts in modernizing its platform on both the front and back end also contributed to a reduction in contraction rate (including dollar churn and down sell) to the lowest level ever. The ongoing migration to an upgraded back end has yielded substantial improvements in stability and processing speed, with half of customer workflows already migrated and the remainder slated for this year.
The impressive financial results were matched by equally impressive bottom-line gains, with operating margin expanding by 2 percentage points to 18%, marking LiveRamp's sixth consecutive year of margin expansion. A record-breaking $153 million in free cash flow was achieved, driven partly by tighter management of working capital. Moreover, the company returned $101 million in cash to shareholders through its share repurchase program.
LiveRamp concluded the fiscal year with a strong balance sheet, boasting $421 million in cash and short-term investments, equating to over $6 per diluted share. The company's achievement of the Rule of 31 (13% revenue growth and an 18% operating margin) serves as a testament to its growing momentum, while its ambition to achieve the Rule of 40 by FY '28 targets significant growth in both revenue and operating margins.
