LiveRamp Seems Pandemic Proof, As Subscription Revenues Grew Despite COVID

LiveRamp was one of the few advertising companies to post solid growth in its fiscal Q1, thanks to marketers seeking alternatives for addressable advertising.

Revenue for the quarter was $99 million, up 21% year over year, LiveRamp reported Monday. Subscription revenue, which include LiveRamp’s SaaS products such as its Authenticated Traffic Solution (ATS), Safe Haven and its TV products, also grew 21% YoY to $83 million.

Marketplace revenues, which includes LiveRamp’s data onboarding business, grew 16% to $17 million year over year. Marketplace revenues slowed slightly due to pressure on transaction revenues related to linear TV.

This was LiveRamp’s first profitable quarter since it spun out from Acxiom in 2018 and relisted on the stock exchange as an independent company. LiveRamp expects fiscal Q2 revenues to grow 11% to $100 million, and expects 2021 to be a growth year despite slower deal cycles and the economic fallout of COVID-19.

“The concept of addressability and measuring ever dollar is more important in a recession,” LiveRamp CEO Scott Howe told AdExchanger. “We think we’re onto a secular trend in that respect.”

LiveRamp once again ended the quarter in a strong cash position, with a $650 million balance and no debt. The company repurchased 1.3 million shares to return $42 million to investors in the quarter.

“We will continue to leverage our strong balance sheet and financial position to double own on key growth initiatives,” Howe said on the earnings call. “Financial flexibility allows us to make key bets on the future.”

Identity FTW

LiveRamp saw strong performance across all of its SaaS products, with total bookings up 50% YoY thanks to upselling clients on new solutions.

More than 125 publishers have adopted the relatively new ATS globally, including 60% of the largest 20 publishers rated by Comscore. Twenty SSPs are either live or implementing ATS, and 40 DSPs are bidding using LiveRamp’s buy-side identifier, IdentityLink. LiveRamp can reach roughly 90% of addressable households through ATS, Howe said.

While publishers are resistant to some attempts by ad tech companies to use their first-party cookies for measurement, they are adopting ATS because it allows them to maintain control over their first-party data, Howe said.

“Publishers are rightfully resistant to solutions proposed that…cause them to lose control of their data,” he said. “We’re not seeing any resistance to ATS, because our [solution] is really publisher friendly.”

And ATS is starting to show results. Howe said Fitbit achieved twice the return on ad spend it saw through cookie targeting when leveraging ATS.

“ATS works better than cookies,” Howe said.

Clients working with ATS are also adopting Safe Haven, which is running on 4 continents and has a business pipeline of $35 million. Five clients adopted Safe Haven in the quarter, including the pharma company GlaxoSmithKline, which is using the solution to segment and activate first-party data across platforms.

The ability to cross-sell ATS and Safe Haven “demonstrates the power of our model,” Howe said. “Through our platform, we can stack additional product offerings and increase the value we’re delivering.”

Investors on the call were curious about how LiveRamp positions itself against The Trade Desk, which talked up the 2.0 version of its unified ID solution on its earnings call last week.

But LiveRamp isn’t scared of a little competition, and believes it’s in a better position because its identity solution is neutral.

“[The Trade Desk] will have their own identity to power algorithms and decision making on their media platforms,” Howe said. “[Identity] has got to be neutral. It’s so important that a company doesn't have a bias in their decision making.”

You, me and CTV

LiveRamp’s TV revenues also grew 50% in the quarter and now make up 10% of overall revenue. CTV was up over 100%.

The company expanded its partnership with Ampersand to power cross-channel addressable TV buying and measurement, and is partnering directly with programmers such as Disney, Discovery and ViacomCBS to offer more data-driven and advanced measurement.

TV continues to remain a “massive opportunity” for LiveRamp as COVID-19 accelerates the shift to streaming, Howe said.

“COVID has pushed advanced TV and measurement to its inflection point,” he said. “We expect the industry will migrate to what can be addressable and measurable.”

 

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