LiveRamp (RAMP) Q4 2023 earnings summary

Executive summary

• FY23 advanced long-term goals despite tougher macro conditions: revenue grew 13%, operating cash flow was positive for a second year, and $150M was returned through repurchases.

• Customer count reached a record; customers with annual subscriptions above $1M grew 8% YoY, and those in the $500K–$1M range grew 25%.

• Lower bookings in H1, amid slower macro growth and salesforce turnover, led to slower subscription growth exiting FY23.

Financial highlights

• FY23 revenue was $596.6M, up 12.8% YoY; subscription revenue was $482.8M, up 12.6%, and Marketplace and Other was $113.8M, up 13.7%.

• Gross profit was $426.5M; gross margin was 71.5%, down from 72.1%, as cloud infrastructure costs contributed to higher cost of revenue.

• Operating loss widened to $125.8M from $65.5M; net loss was $118.7M, or $1.79 per diluted share, including $5.4M of discontinued-operations earnings.

• Operating cash flow was $34.4M versus $78.1M in FY22; cash and cash equivalents plus short-term investments totaled $497.3M at year-end.

• Cost of revenue and operating expenses included $125.8M of non-cash stock compensation, $35.3M of restructuring charges, and $9.0M of transformation costs.

Outlook and guidance

• FY24 subscription revenue growth is expected to be lower than FY23, reflecting slower growth in new customer additions and upsell, plus downsell and churn.

• Recent Marketplace and Other revenue trends may continue in FY24 if macro conditions keep weighing on global advertising spend.

• Normalized sales capacity and productivity, growing forward momentum, channel partnerships, and product integrations are expected to support revenue growth.

• FY23 cost actions are expected to support meaningful FY24 growth in operating income and margin; annualized expense savings of ~$30M began in Q4 FY23.

• A substantial amount of FY24 cash flow is expected to fund share repurchases.