LiveRamp (NYSE:RAMP), an advertising data platform, reported revenue of $148.6 million in its Q4 FY2023 quarter, up 4.87% year on year, but the figure missed analyst expectations by 0.67%. The company’s GAAP loss in the quarter was $31.4 million, more than its loss of $29.4 million during the same period last year. Although LiveRamp’s revenue guidance for Q1 2024 exceeded analyst expectations, with $147 million at the midpoint, its guidance for the upcoming fiscal year fell short of expectations by 1.07%, coming in at $615 million. LiveRamp CEO Scott Howe was optimistic about the company’s financial outlook, highlighting its cost-efficiency and increasing sales momentum.
LiveRamp, spun-off from RapLeaf in 2011, merges offline and online data to help companies better target their customers. With the digital advertising sector continuing to expand, shoppers and media are becoming more varied, driving the need for ad placement automation and data optimization software.
LiveRamp (RAMP) Q4 FY2023 Highlights:
- Revenue: $148.6 million versus analyst estimates of $149.6 million (0.67% below expectations)
- EPS (non-GAAP): $0.32 versus analyst estimates of $0.18, with a $0.14 beat
- Revenue guidance for Q1 2024: $147 million at the midpoint, above analyst expectations of $144.9 million
- Management’s revenue guidance for upcoming financial year 2024: $615 million at the midpoint, missing analyst expectations by 1.07% and predicting 3.09% growth (vs 13.2% in FY2023)
- Free cash flow: $30.6 million, a 96% increase from the previous quarter
- Net Revenue Retention Rate: 97%, down from 101% in the previous quarter
- Customers: 920, up from 910 in the previous quarter
- Gross Margin (GAAP): 70.8%, down from 72.1% in the same quarter last year
LiveRamp’s revenue growth has been sluggish, rising from $119.2 million quarterly revenue in Q4 FY2021 to $148.6 million in Q4 FY2023, a 4.87% YoY increase. This growth rate may disappoint shareholders. LiveRamp’s net revenue retention rate, which measures the percentage of revenue generated by customers from a year ago at the end of the quarter, was 97%, down from 101% in the previous quarter. This suggests that some of the customers are unsuccessful in adopting the product, resulting in LiveRamp losing contracts and revenue streams.
Although LiveRamp’s Q1 2024 revenue guidance exceeded expectations, with revenue forecasted to grow at 3.34%, YoY, to $147 million, the growth rate has slowed compared to the YoY increase of 19.5% in the same quarter last year. The company’s guidance for the financial year 2024 fell below expectations by 1.07%, predicting revenue growth of 3.09% to reach $615 million, compared to 12.8% in FY2023.
With a market capitalization of $1.72 billion and over $497.3 million in cash, LiveRamp is in a strong position to invest in growth. While the Q4 results were a mixed bag, LiveRamp’s acceleration in customer growth was commendable, and the revenue guidance for the next quarter exceeded expectations.
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