Yahoo Finance LiveRamp (NYSE:RAMP) Reports Bullish Q1, Stock Soars
Advertising data platform LiveRamp (NYSE:RAMP) reported Q1 CY2024 results beating Wall Street analysts' expectations , with revenue up 15.6% year on year to $171.9 million. On top of that, next quarter's revenue guidance ($172 million at the midpoint) was surprisingly good and 3.1% above what analysts were expecting. It made a non-GAAP profit of $0.25 per share, improving from its loss of $0.48 per share in the same quarter last year.
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LiveRamp (RAMP) Q1 CY2024 Highlights:
Revenue: $171.9 million vs analyst estimates of $160.6 million (7% beat)
EPS (non-GAAP): $0.25 vs analyst estimates of $0.21 (20.5% beat)
Revenue Guidance for Q2 CY2024 is $172 million at the midpoint, above analyst estimates of $166.9 million
Management's revenue guidance for the upcoming financial year 2025 is $720 million at the midpoint, beating analyst estimates by 2% and implying 9.1% growth (vs 10.6% in FY2024)
Gross Margin (GAAP): 72.2%, up from 70.8% in the same quarter last year
Free Cash Flow of $25.85 million, up 80.2% from the previous quarter
Net Revenue Retention Rate: 103%, in line with the previous quarter
Customers: 900, up from 895 in the previous quarter
Market Capitalization: $2.16 billion
Started in 2011 as a spin-out of RapLeaf, LiveRamp (NYSE:RAMP) is a software-as-a-service provider that helps companies better target their marketing by merging offline and online data about their customers.
Advertising Software
The digital advertising market is large, growing, and becoming more diverse, both in terms of audiences and media. As a result, there is a growing need for software that enables advertisers to use data to automate and optimize ad placements.
Sales Growth
As you can see below, LiveRamp's revenue growth has been mediocre over the last three years, growing from $119.2 million in Q4 2021 to $171.9 million this quarter.
This quarter, LiveRamp's quarterly revenue was once again up 15.6% year on year. However, the company's revenue actually decreased by $2.02 million in Q1 compared to the $14 million increase in Q4 CY2023. Sales also dropped by a similar amount a year ago and management is guiding for revenue to rebound in the coming quarter, which might hint at an emerging seasonal pattern.
Next quarter's guidance suggests that LiveRamp is expecting revenue to grow 11.6% year on year to $172 million, improving on the 8.3% year-on-year increase it recorded in the same quarter last year. For the upcoming financial year, management expects revenue to be $720 million at the midpoint, growing 9.1% year on year compared to the 10.6% increase in FY2024.
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Customer Growth
LiveRamp reported 900 customers at the end of the quarter, an increase of 5 from the previous quarter. That's a little better customer growth than last quarter and quite a bit above the typical growth we've seen in past quarters, demonstrating that the business has strong sales momentum. We've no doubt shareholders will take this as an indication that LiveRamp's go-to-market strategy is working very well.
Key Takeaways from LiveRamp's Q1 Results
We enjoyed seeing LiveRamp exceed analysts' revenue expectations this quarter. We were also glad next quarter's revenue guidance came in higher than Wall Street's estimates. On the other hand, its gross margin declined. Overall, we think this was a strong quarter that should satisfy shareholders. The stock is up 9.4% after reporting and currently trades at $35.37 per share.
LiveRamp may have had a good quarter, but does that mean you should invest right now? When making that decision, it's important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it's free.
