Home Ad Exchange News LiveRamp Earnings Show It Has The Runway (And Cash) To Weather This Crisis

LiveRamp Earnings Show It Has The Runway (And Cash) To Weather This Crisis

SHARE:

The recent string of relatively strong Q1 ad tech performances continued on Thursday, when LiveRamp announced revenue grew 35% year over year to $106 million.

The toughest quarter is still to come. LiveRamp CEO Scott Howe cautioned investors that Q2 could show a sequential decline in revenue and potentially be net-zero or negative in terms of direct subscription client additions, since few companies are adding vendors and about a fifth of LiveRamp’s business comes from categories like travel and hospitality or restaurants where marketing is sometimes going to zero.

Still, LiveRamp is securely positioned to weather this global crisis, Howe said.

For one thing, the highest churn in Q1 came at the low end of LiveRamp’s customer base, from clients that spend $50,000 or less per year, said President and Chief Commercial Officer James Arra. The number of clients with subscription packages worth more than $1 million per year grew from 46 to 53 last quarter, despite the global headwinds.

LiveRamp’s balance sheet is also “the envy of the industry,” said CFO Warren Jenson.

LiveRamp still operates at a loss – which it cut in half in Q1 from $82 million in 2019 to $41 million this year. But the company has $700 million cash on hand, more than enough to run the business for the year without making a cent.

LiveRamp has that arsenal of cash since it re-listed on the public market after selling Acxiom Marketing Services to IPG for $2.3 billion.

“We have a really strong balance sheet and that allows us to be very strategic in commercial deals,” Howe said. For instance, he said LiveRamp recently announced a major licensing deal with Comscore to add 80 million households with set-top box or connected TV devices to its identity graph.

And while other companies talk about belt-tightening measures, LiveRamp can still repurchase shares – a popular tactic for companies with huge cash positions because they can boost their stock value without adding revenue. The company “aggressively front-loaded” its share repurchases in Q1, Howe said.

LiveRamp spent $103 million so far this year to repurchase 3.1 million shares. That’s an average share price of $33.22. The only time this year when LiveRamp’s stock price dipped below that number was about a four-week stretch from early March to early April, when markets crashed and economies went into lockdown. LiveRamp had already been actively buying back shares since last year and in 2020 before the coronavirus crisis, which means the company must have very actively bought up shared during the March financial trough.

There are no other small-cap companies, especially not in ad tech, that could afford to spend their way through a financial crisis like LiveRamp.

Must Read

Advertible Makes Its Case To SSPs For Running Native Channel Extensions

Companies like TripleLift that created the programmatic native category are now in their awkward tween years. Cue Advertible, a “native-as-a-service” programmatic vendor, as put by co-founder and CEO Tom Anderson.

Mozilla acquires Anonym

Mozilla Acquires Anonym, A Privacy Tech Startup Founded By Two Top Former Meta Execs

Two years after leaving Meta to launch their own privacy-focused ad measurement startup in 2022, Graham Mudd and Brad Smallwood have sold their company to Mozilla.

Nope, We Haven’t Hit Peak Retail Media Yet

The move from in-store to digital shopper marketing continues, as United Airlines, Costco, PayPal, Chase and Expedia make new retail media plays. Plus: what the DSP Madhive saw in advertising sales software company Frequence.

Privacy! Commerce! Connected TV! Read all about it. Subscribe to AdExchanger Newsletters
Comic: Ad-ception

The New York Times And Instacart Integrate For Shoppable Recipes

The New York Times and Instacart are partnering for shoppable recipe videos.

Experian Enters The Third-Party Data Onboarding Business

Experian entered the third-party data onboarder market on Tuesday with a new product based on its Tapad acquisition.

Albertsons Takes Its First Steps Into Non-Endemic Advertising, Retail Media’s Next Frontier

Albertsons is taking that first step into non-endemic advertising next week via a partnership with Rokt to serve ads to people who have already purchased groceries.