RAMP — LiveRamp Holdings, Inc.

Summary of LiveRamp's Q2 2026 Earnings Call

1. Key Financial Results and Metrics:

• Revenue: Increased by 8% year-over-year to $200 million, exceeding guidance by $3 million.
• Subscription Revenue: Grew by 5% to $150 million.
• Net New ARR: Reached $14 million, marking the largest organic increase in 7 quarters, with year-on-year growth of 7%.
• Operating Income: Non-GAAP operating income rose by 10% to $45 million; GAAP operating income more than doubled to $21 million, with a record margin expansion of 7 points.
• Free Cash Flow: Totaled $57 million, with $50 million allocated to share repurchases.
• Million-Dollar Plus Customers: Increased by 5% sequentially to a new high of 132.

2. Strategic Updates and Business Highlights:

• AI and Commerce Media: Strong focus on enhancing AI capabilities and expanding Commerce Media integrations with major clients like Uber and PayPal.
• New Pricing Model: A usage-based pricing model is being rolled out, which has received positive feedback and is expected to drive incremental revenue growth.
• Clean Room Solutions: Continued momentum in Clean Room Insights, particularly for CTV and cross-media measurement, indicating strong demand across various sectors.

3. Forward Guidance and Outlook:

• FY 2026 Revenue Guidance: Updated to between $804 million and $818 million, reflecting 8% to 10% growth.
• Operating Income Guidance: Expected to be between $178 million and $182 million, with a margin of approximately 22%.
• Q3 Revenue Expectations: Projected to be between $209 million and $213 million, with non-GAAP operating income between $55 million and $57 million.

4. Challenges and Points of Concern:

• Gross Margin Pressure: Expected to remain at approximately 72%, down from prior expectations due to higher cloud hosting expenses.
• Macro Economic Risks: Guidance includes conservatism regarding potential macroeconomic deterioration, particularly affecting variable revenue sources like subscription usage and data marketplace.
• Customer Churn: Although churn improved, it remains a focus area, especially as the company navigates its renewal cycles.

5. Notable Q&A Insights:

• Drivers of ARR Improvement: Strength in gross new ARR, cross-sell opportunities, and lower churn were highlighted as key factors.
• Upsell Opportunities: Management expressed optimism about upsell potential in the upcoming quarters, driven by new solutions and integrations.
• AI Impact: The company sees low exposure to negative trends affecting the open web and believes that their first- and second-party data positions them well to leverage AI advancements.
• Investment Strategy: Investments in platform upgrades and AI capabilities are expected to yield long-term revenue growth without sacrificing short-term profitability.

Overall, LiveRamp's Q2 2026 results reflect solid financial performance, strategic advancements in AI and pricing models, and a cautiously optimistic outlook, while also acknowledging potential macroeconomic challenges and the need to manage customer churn effectively.