RAMP Q2 Deep Dive: Product Momentum Overshadowed by Cautious Near-Term Outlook

Advertising data platform LiveRamp (NYSE:RAMP) reported Q2 CY2025 results exceeding the market’s revenue expectations, with sales up 10.7% year on year to $194.8 million. Revenue guidance for the full year exceeded analysts’ estimates, but next quarter’s guidance of $197 million was less impressive, coming in 1.1% below expectations. Its non-GAAP profit of $0.44 per share was 4.8% above analysts’ consensus estimates.

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StockStory’s Take

LiveRamp’s second quarter results surpassed Wall Street’s revenue and profit expectations, yet the market responded negatively amid concerns about the outlook for the coming quarter. Management attributed the strong performance to continued momentum in its data collaboration offerings, especially Cross-Media Intelligence, Commerce Media Networks, and connected TV (CTV) solutions. CEO Scott Howe highlighted, “Our data collaboration network is experiencing strong sales momentum, evidenced by an above-average conversion of pipeline into signings, a reduction in the average sales cycle length and an increase in average deal size during the first quarter.” However, management also acknowledged some elevated churn from specific large customers, such as Oracle, which impacted certain customer metrics.

Looking ahead, LiveRamp’s updated guidance reflects expectations for accelerating growth beyond the next quarter, with the company pointing to a robust pipeline, ongoing investments in its platform, and the rollout of a new pricing model. CFO Lauren Dillard noted that subscription usage growth is expected to normalize after a strong first quarter, stating, “We’re conservatively guiding [subscription usage] flat year-on-year [for Q2].” Management is prioritizing the expansion of its clean room capabilities and further integration with key industry partners, believing these will position LiveRamp well for shifts in the digital advertising landscape, particularly as artificial intelligence (AI) adoption advances.

Key Insights from Management’s Remarks

Management identified robust sales momentum in data collaboration solutions, continued expansion in Commerce Media, and operational efficiencies as primary drivers of the quarter’s results.

• Cross-Media Intelligence traction: The recently launched Cross-Media Intelligence solution gained several notable enterprise customers, addressing advertisers’ need for accurate measurement across fragmented digital channels. Early adoption by major firms supports management’s view that demand for privacy-preserving data collaboration is increasing.
• Commerce Media Network expansion: LiveRamp’s Commerce Media solutions extended beyond retail in the quarter, with partnerships in sectors such as airlines, automotive, and real estate. CEO Scott Howe cited new collaborations with companies like Walgreens and Western Union, describing a “network flywheel” effect as more industries leverage LiveRamp’s platform for audience targeting and personalization.
• CTV integrations driving adoption: The integration of large connected TV and streaming platforms, notably Netflix, enabled dozens of brands to connect first-party data to media exposures. Management expects this momentum to continue as advertisers shift budgets from linear TV to more measurable digital channels.
• New pricing model pilot: LiveRamp began piloting a new, usage-based pricing model with select customers, aiming to provide more flexibility and attract smaller clients. CFO Lauren Dillard emphasized that while no revenue from this pilot is included in the current year’s guidance, the new model is expected to enhance deal velocity and operational efficiency over time.
• Operational leverage and cost discipline: Margin expansion was supported by cost-saving initiatives such as increased offshoring and automation, along with a strategic reduction in stock-based compensation. These measures allowed for continued investment in product development and sales execution while improving profitability.

Drivers of Future Performance

LiveRamp’s outlook hinges on accelerating adoption of its collaboration and measurement products, a more flexible pricing model, and controlling costs amid evolving customer demands.

• Momentum in key product areas: Management sees ongoing strength in Cross-Media Intelligence, Commerce Media, and CTV solutions as drivers of subscription revenue growth. The company expects recent customer wins and expanding use cases to translate into higher sales, particularly in the second half of the year.
• Pricing model shift and customer expansion: The rollout of a flexible, token-based pricing model is designed to lower entry barriers for smaller clients and stimulate upsell opportunities across the platform. CEO Scott Howe explained that this approach should increase deal velocity and improve operational efficiency but will be methodically implemented to avoid disruption for existing customers.
• Margin expansion and investment balance: LiveRamp plans to maintain margin gains through offshoring, automation, and disciplined stock-based compensation, even as it invests in new product features and customer support. Risks include dependency on large clients and potential macroeconomic headwinds that could affect variable revenue streams.

Catalysts in Upcoming Quarters

In the coming quarters, the StockStory team will focus on (1) the pace at which LiveRamp’s new pricing model attracts and retains smaller and mid-sized customers, (2) further adoption of Cross-Media Intelligence and Commerce Media solutions across a broader set of industries, and (3) progress on operational efficiencies, including offshoring and automation. Execution on these priorities, along with continued growth in connected TV partnerships, will be critical to tracking whether LiveRamp can sustain both top-line growth and margin improvement.

LiveRamp currently trades at $25.76, down from $32.58 just before the earnings. Is there an opportunity in the stock?See for yourself in our full research report (it’s free).

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