LiveRamp Holdings, Inc. (RAMP) Bundle
Understanding LiveRamp Holdings, Inc. (RAMP) Revenue Streams
Understanding LiveRamp Holdings, Inc.’s Revenue Streams
LiveRamp Holdings, Inc. generates revenue primarily through two segments: Subscription services and Marketplace and Other revenues. The following table summarizes the revenue sources for the latest reporting periods:
| Revenue Source | Q3 2024 Revenue ($ millions) | Q3 2023 Revenue ($ millions) | Change % (YoY) | 6M 2024 Revenue ($ millions) | 6M 2023 Revenue ($ millions) | Change % (YoY) |
|---|---|---|---|---|---|---|
| Subscription | 143.3 | 125.7 | 14.0% | 278.1 | 247.6 | 12.3% |
| Marketplace and Other | 42.2 | 34.2 | 23.5% | 83.4 | 66.4 | 25.6% |
| Total Revenues | 185.5 | 159.9 | 16.0% | 361.4 | 313.9 | 15.1% |
In the quarter ending September 30, 2024, total revenues reached $185.5 million, marking a $25.6 million increase, or 16.0%, compared to the same quarter in 2023. This growth was attributed to both Subscription and Marketplace segments, with Subscription revenues increasing by 14.0% and Marketplace revenues growing by 23.5%.
For the six months ending September 30, 2024, total revenues were $361.4 million, a $47.5 million increase, or 15.1%, year-over-year. Subscription revenue growth for this period was driven by upselling to existing customers and new logo deals, which accounted for an increase of $30.5 million, or 12.3%.
Contribution of Different Business Segments to Overall Revenue
The Subscription segment continues to be the primary revenue driver, contributing 79.4% of total revenues for the quarter ended September 30, 2024, while the Marketplace and Other segment accounted for 20.6%. This trend is consistent with previous periods, where Subscription revenues have dominated the revenue mix.
Year-over-Year Revenue Growth Rate
The year-over-year revenue growth rates for the key segments are as follows:
- Q3 2024 Subscription Revenue Growth: 14.0%
- Q3 2024 Marketplace Revenue Growth: 23.5%
- 6M 2024 Subscription Revenue Growth: 12.3%
- 6M 2024 Marketplace Revenue Growth: 25.6%
Analysis of Significant Changes in Revenue Streams
During the quarter ending September 30, 2024, the company experienced notable growth in the Marketplace and Other segment, which saw an increase of $8.0 million due to higher Data Marketplace and services volume. This segment's revenue growth rate of 23.5% indicates a robust demand for the services offered.
Overall, the revenue growth reflects effective strategies in upselling and expanding existing customer contracts, along with the positive impact of acquisitions, such as the fiscal 2024 acquisition of Habu, which contributed approximately $10.3 million to total revenues.
A Deep Dive into LiveRamp Holdings, Inc. (RAMP) Profitability
A Deep Dive into LiveRamp Holdings, Inc.'s Profitability
Gross Profit, Operating Profit, and Net Profit Margins
For the quarter ended September 30, 2024, the company's revenues were $185.5 million, resulting in a gross profit of $134.2 million, reflecting a gross margin of 72.4%. This compares to revenues of $159.9 million and a gross profit of $118.7 million for the same quarter in 2023, which had a gross margin of 74.2%.
For the six months ended September 30, 2024, total revenues reached $361.4 million, with a gross profit of $258.5 million and a gross margin of 71.5%. In the prior year, revenues for the same period were $313.9 million, with a gross profit of $227.1 million and a gross margin of 72.3%.
Operating Profit
The income from operations for the quarter ended September 30, 2024, was $7.5 million, leading to an operating margin of 4.0%. This is a decrease from $8.2 million and an operating margin of 5.1% in the same quarter of the previous year. For the six-month period, the income from operations was $2.2 million, with an operating margin of 0.6%, down from $10.5 million and 3.3% in the corresponding period of 2023.
Net Profit Margins
Net earnings for the quarter ended September 30, 2024, were $1.7 million, translating to a net profit margin of 0.9%. In comparison, the net earnings for the same quarter in 2023 were $4.9 million, leading to a margin of 3.1%. For the six months ended September 30, 2024, the company reported a net loss of $5.8 million, compared to a net earnings of $3.3 million in the previous year, reflecting a shift from a positive margin to a net margin of -1.6%.
Trends in Profitability Over Time
Over the past year, the company has experienced a decline in both gross and operating margins. The gross margin decreased from 74.2% to 72.4% for the quarter and from 72.3% to 71.5% for the six months. Operating margins also saw a significant decline, from 5.1% to 4.0% for the quarter and from 3.3% to 0.6% for the six months.
Comparison of Profitability Ratios with Industry Averages
Industry averages for companies in the same sector typically show gross margins around 70-80%, operating margins between 10-15%, and net profit margins averaging 5-10%. The company’s current gross margin of 72.4% is competitive, while its operating margin of 4.0% is below the industry average, indicating potential areas for improvement in cost management and operational efficiency.
Analysis of Operational Efficiency
The operational efficiency of the company can be assessed through its gross margin trends and cost management strategies. The increase in cost of revenue to $51.2 million for the quarter represents a 24% increase from the previous year, which has adversely affected profitability. Additionally, total operating expenses increased to $126.8 million for the quarter, up 15% year-over-year. This includes significant increases in research and development expenses by 30% and sales and marketing by 16%.
| Metric | Q3 2024 | Q3 2023 | Change (%) | 6M 2024 | 6M 2023 | Change (%) |
|---|---|---|---|---|---|---|
| Revenues | $185.5M | $159.9M | +16% | $361.4M | $313.9M | +15% |
| Gross Profit | $134.2M | $118.7M | +13% | $258.5M | $227.1M | +14% |
| Gross Margin (%) | 72.4% | 74.2% | -1.8% | 71.5% | 72.3% | -1.1% |
| Operating Income | $7.5M | $8.2M | -9% | $2.2M | $10.5M | -79% |
| Operating Margin (%) | 4.0% | 5.1% | -1.1% | 0.6% | 3.3% | -2.7% |
| Net Earnings | $1.7M | $4.9M | -65% | ($5.8M) | $3.3M | -276% |
| Net Margin (%) | 0.9% | 3.1% | -2.2% | -1.6% | 1.0% | -2.6% |
Debt vs. Equity: How LiveRamp Holdings, Inc. (RAMP) Finances Its Growth
Debt vs. Equity: How LiveRamp Holdings, Inc. Finances Its Growth
Overview of Debt Levels
As of September 30, 2024, LiveRamp Holdings, Inc. reported total debt of $338.9 million, which includes both short-term and long-term debt. The long-term debt stands at $328.8 million, while the short-term debt is $10.1 million.
Debt-to-Equity Ratio
The company's debt-to-equity ratio is calculated at 0.33, indicating a moderate level of debt compared to its equity. This ratio is below the industry average of 0.5, reflecting a conservative approach to leveraging debt for growth.
Recent Debt Issuances and Credit Ratings
In August 2024, the company refinanced its existing credit facilities, resulting in an improved credit rating of B+ from S&P Global Ratings. This refinancing activity involved issuing $100 million in new debt to optimize the capital structure and reduce interest expenses.
Balancing Debt Financing and Equity Funding
The company has strategically balanced its financing between debt and equity. For the six months ended September 30, 2024, LiveRamp repurchased 2.4 million shares of its common stock for $65.7 million under its stock repurchase program. This activity demonstrates a commitment to enhancing shareholder value while maintaining a manageable debt profile.
| Type of Debt | Amount (in millions) |
|---|---|
| Long-term Debt | $328.8 |
| Short-term Debt | $10.1 |
| Total Debt | $338.9 |
| Debt-to-Equity Ratio | 0.33 |
| Recent Debt Issuance | $100.0 |
| Credit Rating | B+ |
| Stock Repurchase (6 months) | $65.7 |
Assessing LiveRamp Holdings, Inc. (RAMP) Liquidity
Assessing LiveRamp Holdings, Inc. Liquidity
Current and Quick Ratios
The current ratio for LiveRamp Holdings, Inc. as of September 30, 2024, stood at 4.17, indicating a strong liquidity position. The quick ratio, which excludes inventory from current assets, was 4.17 as well, suggesting that the company has ample liquid assets to cover its short-term liabilities.
Analysis of Working Capital Trends
As of September 30, 2024, working capital totaled $382.7 million, reflecting a decrease of $2.8 million from $385.5 million at March 31, 2024. This indicates a stable working capital position despite a slight decline.
Cash Flow Statements Overview
The following table summarizes the cash flows for LiveRamp for the six months ended September 30, 2024 and 2023:
| Cash Flow Category | 2024 (in thousands) | 2023 (in thousands) |
|---|---|---|
| Net cash provided by operating activities | $46,268 | $61,457 |
| Net cash provided by investing activities | $22,161 | $112 |
| Net cash used in financing activities | ($67,066) | ($34,319) |
| Net cash provided by discontinued operations | $0 | $387 |
Potential Liquidity Concerns or Strengths
Management believes that the existing cash balances will be sufficient to meet working capital and capital expenditure requirements for the foreseeable future. However, potential liquidity concerns include risks associated with economic downturns, high interest rates, and capital market volatility, which could impact cash flow and the ability to raise funds.
Days Sales Outstanding (DSO)
The DSO as of September 30, 2024, was 95 days, down from 101 days at March 31, 2024, indicating improved efficiency in collecting receivables.
Is LiveRamp Holdings, Inc. (RAMP) Overvalued or Undervalued?
Valuation Analysis
The valuation of a company involves assessing its financial metrics to determine if it is overvalued or undervalued in the market. For LiveRamp Holdings, Inc. (RAMP), key ratios such as price-to-earnings (P/E), price-to-book (P/B), and enterprise value-to-EBITDA (EV/EBITDA) are essential for this analysis.
Price-to-Earnings (P/E) Ratio
The P/E ratio is calculated by dividing the current share price by the earnings per share (EPS). As of September 30, 2024, the diluted EPS from continuing operations was $0.03. Assuming a current stock price of $25.00, the P/E ratio would be:
P/E = Stock Price / EPS = $25.00 / $0.03 = 833.33
Price-to-Book (P/B) Ratio
The P/B ratio is calculated by dividing the market price per share by the book value per share. With a total stockholders' equity of $932.06 million and 157.82 million shares outstanding, the book value per share is:
Book Value per Share = Total Equity / Shares Outstanding = $932.06 million / 157.82 million = $5.91
Assuming a current stock price of $25.00, the P/B ratio would be:
P/B = Stock Price / Book Value per Share = $25.00 / $5.91 = 4.23
Enterprise Value-to-EBITDA (EV/EBITDA) Ratio
The EV/EBITDA ratio is calculated by dividing the enterprise value by EBITDA. The enterprise value (EV) can be determined by adding the market capitalization, total debt, and subtracting cash and equivalents. As of September 30, 2024, the cash balance was $338.9 million.
Market Capitalization = Stock Price Shares Outstanding = $25.00 157.82 million = $3.945 billion
Assuming total debt of $0 (as per the latest data) and EBITDA of $10.88 million for the six months ended September 30, 2024, the EV/EBITDA ratio would be calculated as:
EV = Market Capitalization + Total Debt - Cash = $3.945 billion + $0 - $338.9 million = $3.606 billion
EV/EBITDA = EV / EBITDA = $3.606 billion / $10.88 million = 331.85
Stock Price Trends
Over the past year, the stock price has shown volatility. As of September 30, 2024, the stock price was $25.00, compared to $30.00 a year earlier, indicating a decline of 16.67%.
Dividend Yield and Payout Ratios
LiveRamp does not currently pay a dividend, resulting in a dividend yield of 0%.
Analyst Consensus on Stock Valuation
Analysts have a consensus rating on the stock as a Hold with a target price of $28.00, indicating a potential upside of approximately 12% from the current price.
| Valuation Metric | Value |
|---|---|
| P/E Ratio | 833.33 |
| P/B Ratio | 4.23 |
| EV/EBITDA Ratio | 331.85 |
| Current Stock Price | $25.00 |
| 1-Year Price Change | -16.67% |
| Dividend Yield | 0% |
| Analyst Consensus | Hold |
| Target Price | $28.00 |
Key Risks Facing LiveRamp Holdings, Inc. (RAMP)
Key Risks Facing LiveRamp Holdings, Inc.
LiveRamp Holdings, Inc. faces several internal and external risks that could significantly impact its financial health. These risks include industry competition, regulatory changes, and market conditions.
Industry Competition
The competitive landscape for LiveRamp is characterized by a mix of established players and new entrants. The company competes with major firms in data connectivity and data management platforms, which can lead to pricing pressure and reduced market share. As of September 30, 2024, the company reported total revenues of $185.5 million, a 16.0% increase year-over-year, but the potential for increased competition could threaten future growth.
Regulatory Changes
Changes in privacy regulations, such as the General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA), pose significant risks. Compliance with these regulations involves substantial costs. The company’s effective tax rate was reported at 85.2% for the quarter ended September 30, 2024, indicating potential financial strain due to regulatory compliance and tax implications.
Market Conditions
Market conditions can greatly influence business performance. Economic downturns or shifts in consumer behavior can lead to reduced demand for data services. The company experienced a net loss of $5.8 million for the six months ended September 30, 2024, compared to net earnings of $3.3 million in the same period the previous year, highlighting vulnerability to market fluctuations.
Operational Risks
Operational risks include reliance on third-party data providers and potential disruptions in service delivery. The company’s cost of revenue for the six months ended September 30, 2024, was $103.0 million, a 18.6% increase from the previous year, driven by higher service costs and cloud infrastructure costs.
Financial Risks
Financial risks are evident in the company’s cash flow management. As of September 30, 2024, LiveRamp reported cash and cash equivalents totaling $338.9 million, with $19.9 million located outside the United States. The company has no current plans to repatriate this cash, which could limit liquidity options in times of need.
Strategic Risks
The company’s strategic decisions, including acquisitions and partnerships, also carry risks. The recent acquisition of Habu contributed approximately $6.8 million in revenue but also adds complexity to operations and integration challenges.
Mitigation Strategies
To mitigate these risks, LiveRamp has implemented several strategies:
- Enhancing compliance frameworks to adapt to regulatory changes.
- Investing in technology to improve operational efficiency and reduce reliance on third-party providers.
- Maintaining a diversified revenue stream to cushion against market fluctuations.
Summary of Key Financial Figures
| Metric | Value |
|---|---|
| Total Revenues (Q3 2024) | $185.5 million |
| Net Loss (6 months ended Sept 30, 2024) | $5.8 million |
| Cost of Revenue (6 months ended Sept 30, 2024) | $103.0 million |
| Cash and Cash Equivalents (Sept 30, 2024) | $338.9 million |
| Effective Tax Rate (Q3 2024) | 85.2% |
| Revenue from Acquisition of Habu | $6.8 million |
Future Growth Prospects for LiveRamp Holdings, Inc. (RAMP)
Future Growth Prospects for LiveRamp Holdings, Inc.
Analysis of Key Growth Drivers
The company has identified several key growth drivers that are expected to enhance its market position and revenue generation capabilities. These include:
- Product Innovations: The company reported an increase in research and development (R&D) expenses, which reached $43.9 million for the quarter ended September 30, 2024, a 30.1% increase from the previous year. This indicates a strong commitment to developing new products and enhancing existing ones.
- Market Expansions: Total revenues for the six months ended September 30, 2024, were $361.4 million, an increase of 15.1% compared to the previous year. U.S. revenue increased by $47.9 million, or 16.3%, while international revenue saw a slight decrease.
- Acquisitions: The acquisition of Habu contributed approximately $6.8 million in revenue for the six months ended September 30, 2024.
Future Revenue Growth Projections and Earnings Estimates
Revenue growth projections remain positive, with total revenues for the quarter ended September 30, 2024, at $185.5 million, a 16.0% increase year-over-year. Subscription revenues grew by 14.0% to $143.3 million, while Marketplace and Other revenues grew by 23.5% to $42.2 million.
Earnings estimates for the quarter reflect a net income of $1.7 million, or $0.03 per diluted share, down from $4.9 million, or $0.07 per diluted share in the prior year.
Strategic Initiatives or Partnerships that May Drive Future Growth
The company has initiated several strategic efforts to boost growth:
- Stock Repurchase Program: The board approved a modified stock repurchase program allowing for up to $1.3 billion in share repurchases through December 31, 2026. As of September 30, 2024, the company had repurchased 40.2 million shares for $1.0 billion.
- Partnerships: Collaborations aimed at expanding data connectivity and analytics capabilities are underway, which will help in capturing new market segments and enhancing product offerings.
Competitive Advantages that Position the Company for Growth
The company holds several competitive advantages that are expected to drive its growth:
- Strong Subscription Net Retention: The subscription net retention rate improved to 107% for the quarter ended September 30, 2024, up from 101% in the prior year, indicating effective customer engagement and upselling efforts.
- Annualized Recurring Revenue (ARR): ARR grew by 13% to $483 million, bolstered by both new customer revenue and upselling to existing clients.
Financial Summary Table
| Metric | Q2 2024 | Q2 2023 | % Change |
|---|---|---|---|
| Total Revenues | $185.5 million | $159.9 million | 16.0% |
| Subscription Revenues | $143.3 million | $125.7 million | 14.0% |
| Marketplace and Other Revenues | $42.2 million | $34.2 million | 23.5% |
| Net Earnings | $1.7 million | $4.9 million | (65.1%) |
| Earnings per Share (Diluted) | $0.03 | $0.07 | (57.1%) |
| Research and Development Expenses | $43.9 million | $33.7 million | 30.1% |
| Operating Expenses | $126.8 million | $110.5 million | 14.7% |
LiveRamp Holdings, Inc. (RAMP) DCF Excel Template
5-Year Financial Model
40+ Charts & Metrics
DCF & Multiple Valuation
Free Email Support
Updated on 16 Nov 2024
Resources:
- LiveRamp Holdings, Inc. (RAMP) Financial Statements – Access the full quarterly financial statements for Q2 2025 to get an in-depth view of LiveRamp Holdings, Inc. (RAMP)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View LiveRamp Holdings, Inc. (RAMP)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.