8-K: LiveRamp Exceeds Q2 Guidance, Boosts FY26 Outlook on AI & Data Demand

LiveRamp Holdings, Inc. reported strong second-quarter fiscal 2026 results, surpassing revenue and operating income guidance, driven by robust demand for its data collaboration network and new AI tools.

Summary

• Total revenue for the second quarter ended September 30, 2025, was $200 million, an 8% increase year-over-year.
• Subscription revenue grew 5% to $150 million, while Marketplace & Other revenue increased 18% to $50 million.
• GAAP income from operations significantly expanded to $21 million, up from $7 million in the prior year, with GAAP operating margin expanding by 7 percentage points to 11%.
• Non-GAAP operating income rose 10% to $45 million, maintaining a 22% non-GAAP operating margin.
• GAAP diluted earnings per share (EPS) was $0.42, a substantial increase from $0.03, and non-GAAP diluted EPS was $0.55, up from $0.51.
• Annualized Recurring Revenue (ARR) increased by $14 million quarter-over-quarter to $516 million, representing a 7% year-over-year growth.
• Current Remaining Performance Obligations (CRPO) grew 15% year-over-year to $430 million.
• The company repurchased 1.8 million shares for $50 million during the quarter, bringing fiscal year-to-date repurchases to 2.9 million shares for $80 million.
• LiveRamp introduced three new AI tools for its data collaboration platform, including autonomous AI agents, AI-powered segmentation, and AI-powered search in its Data Marketplace.
• Expanded first-party data activation capabilities on Netflix to ten new international markets.
• Enabled retail media networks (RMNs) to unlock new attribution insights from Meta advertising campaigns through the LiveRamp Clean Room.
• Recognized as a Leader in Data Collaboration in Snowflake's 2026 Modern Marketing Stack Report.
• The company now expects full fiscal year 2026 revenue between $804 million and $818 million, an increase of 8% to 10%.

Sentiment

Score: 9

Explanation: The filing indicates strong financial performance, with revenue and operating income exceeding guidance. Key metrics like ARR and CRPO show robust growth, and strategic initiatives in AI and global expansion are promising. The company also raised its full-year outlook and is actively repurchasing shares, all contributing to a highly positive sentiment.

Positives

• Total revenue increased 8% year-over-year to $200 million, exceeding guidance.
• GAAP income from operations surged to $21 million from $7 million, expanding the GAAP operating margin by 7 percentage points to 11%.
• Non-GAAP operating income grew 10% to $45 million, with the non-GAAP operating margin remaining strong at 22%.
• GAAP diluted EPS significantly improved to $0.42 from $0.03, and non-GAAP diluted EPS increased to $0.55 from $0.51.
• Annualized Recurring Revenue (ARR) grew 7% year-over-year to $516 million, marking the largest sequential like-for-like increase in seven quarters.
• Current Remaining Performance Obligations (CRPO) increased 15% year-over-year to $430 million, indicating strong future contracted revenue.
• Net cash provided by operating activities was $57 million, up from $56 million in the prior year.
• The company repurchased $50 million in shares during the quarter and $80 million fiscal year-to-date, demonstrating commitment to shareholder returns.
• Introduction of three new AI tools for data collaboration, enhancing platform capabilities and market relevance.
• Expansion of Netflix first-party data activation to ten new international markets, broadening global reach.
• New integration allowing retail media networks to gain attribution insights from Meta campaigns via LiveRamp Clean Room, adding significant value for partners.
• Recognition as a Leader in Data Collaboration in Snowflake's 2026 Modern Marketing Stack Report validates product strength.
• Increased number of customers with annualized subscription revenue exceeding $1 million, growing to 132 from 125.

Negatives

• GAAP gross margin compressed by 2 percentage points to 70% year-over-year.
• Non-GAAP gross margin compressed by 3 percentage points to 72% year-over-year.
• The number of direct subscription customers decreased to 834 from 885 in the prior year period.

Risks

• Economic uncertainties, including geopolitical circumstances, tariffs, trade restrictions, recession, inflation, and high interest rates, could impact the company, its suppliers, customers, and partners.
• The ability and willingness of customers to renew agreements upon expiration is a key factor.
• Challenges in adding new customers and upselling within the subscription business.
• Reliance on partners, including data suppliers, who may withdraw or withhold data.
• Increased competition and rapidly changing technology could impact products and services.
• Risk of failing to realize potential benefits or experiencing difficulties integrating acquired businesses.
• Inability to attract, motivate, and retain talent.
• Challenges in maintaining company culture and innovation while operating in a hybrid work environment, and potential disruptions from workforce reductions or acquisition/divestiture activities.
• Risks associated with international operations, including performance of third parties, war, and civil unrest.
• Risk of a significant breach of confidentiality or security of data/systems, or inadequate insurance coverage for such breaches.
• Unfavorable publicity and negative public perception about the industry.
• Interruptions or delays in service from data center or cloud hosting vendors.
• Dependence on the continued availability of third-party data hosting and transmission services.
• Restrictions on clients' ability to use data on the platform due to the decline of third-party cookies, technology platform changes, regulation, or increased user controls.
• Continued changes in judicial, legislative, regulatory, accounting, cultural, and consumer environments, including litigation, investigations, legislation, regulations, and customs related to information collection and use.
• Changes in tax laws and regulations applied to customers, potentially leading to enterprise software budget tightening.
• Claims of intellectual property infringement by third parties or infringement of the company's intellectual property, which could result in competitive injury, significant costs, and resource drain.

Future Outlook

For the third quarter of fiscal 2026, LiveRamp expects revenue between $209 million and $213 million (7% to 9% increase), GAAP operating income between $33 million and $35 million, and Non-GAAP operating income between $55 million and $57 million. For the full fiscal year 2026, the company now expects revenue between $804 million and $818 million (8% to 10% increase), GAAP operating income between $83 million and $87 million, and Non-GAAP operating income between $178 million and $182 million.

Management Comments

• CEO Scott Howe stated that second quarter revenue and operating income exceeded guidance.
• Howe highlighted that Annualized Recurring Revenue (ARR) posted the largest like-for-like sequential increase in the last seven quarters.
• Management is observing strong demand for the Data Collaboration Network across various use cases, including retail and commerce media networks, cross-media measurement, and new AI-powered advertising and agentic orchestration.
• These trends provide confidence in the company's forward growth.

Industry Context

LiveRamp's strong performance and strategic initiatives align with several key industry trends. The introduction of AI tools for data collaboration, segmentation, and search positions the company at the forefront of AI integration in advertising technology, addressing the growing demand for more efficient and intelligent marketing solutions. The expansion of first-party data activation on Netflix and the integration with Meta for retail media networks underscore the increasing importance of privacy-centric data collaboration (e.g., clean rooms) and the rise of commerce media. As third-party cookies decline, LiveRamp's focus on identity resolution and first-party data activation becomes critical for marketers seeking effective cross-platform measurement and personalized advertising, reinforcing its role as a leading data collaboration platform in a rapidly evolving adtech landscape.

Stakeholder Impact

• Shareholders are positively impacted by strong financial results, increased earnings per share, share repurchases, and a raised full-year outlook, indicating potential for stock appreciation.
• Customers benefit from the introduction of new AI tools, expanded first-party data activation capabilities on Netflix, and enhanced attribution insights through the LiveRamp Clean Room, leading to more effective marketing and data collaboration.
• Employees may experience increased job stability and opportunities for growth within a company demonstrating strong performance and strategic innovation.

Next Steps

• LiveRamp will hold a conference call on November 5, 2025, at 1:30 PM PDT (4:30 PM ET) to further discuss the financial results and outlook.

Key Dates

Recommendation

LiveRamp's Q2 FY26 results significantly exceeded guidance, demonstrating robust operational execution and strong market demand for its data collaboration platform. Key indicators like ARR and CRPO show accelerating growth, and the company's strategic investments in AI and global expansion (e.g., Netflix, Meta integration) position it well for future innovation and market leadership in the evolving adtech landscape. The raised full-year guidance and ongoing share repurchases further underscore management's confidence and commitment to shareholder value. Despite some gross margin compression, the overall financial health and strategic trajectory warrant a 'strong buy' recommendation for investors seeking exposure to a growing leader in data collaboration and AI-powered marketing.

Keywords

LiveRamp, RAMP, data collaboration, AI, advertising technology, adtech, marketing, retail media, clean room, financial results, earnings, Q2 FY26, subscription revenue, ARR, operating income, EPS