LiveRamp Holdings Inc (NYSE:RAMP) delivered a mixed financial performance for its fiscal third quarter, beating profit expectations but falling slightly short on revenue, while providing a conservative outlook that appears to have tempered investor enthusiasm.
The data collaboration platform reported results for the quarter ended December 31, 2025, showcasing significant profitability gains and robust cash generation. However, the market's initial reaction, reflected in a flat after-hours performance following a recent downtrend, suggests a focus on the company's forward guidance relative to Wall Street's expectations.
Earnings and Revenue Versus Estimates
LiveRamp's third-quarter results presented a clear divergence between top-line performance and bottom-line strength.
- Revenue: The company reported total revenue of $212.2 million, representing a 9% year-over-year increase. This figure came in slightly below the analyst consensus estimate of approximately $215.7 million.
- Earnings Per Share (Non-GAAP): On profitability, the company outperformed. Non-GAAP diluted EPS came in at $0.76, solidly above the $0.70 per share analysts had anticipated. This represents a 38% increase from the $0.55 reported in the same quarter last year.
The earnings beat was driven by substantial operating margin expansion. GAAP operating income surged to $40 million, up from $15 million a year ago, with the operating margin expanding by 11 percentage points to 19%. The company also highlighted a record $67 million in operating cash flow for the quarter.
Market Reaction and Forward Outlook
The stock's performance in recent weeks, showing declines over the past month, likely reflects broader market sentiment and pre-earnings caution. The muted after-hours reaction to the report itself can be attributed to the company's guidance for the upcoming fourth quarter.
LiveRamp provided an outlook for Q4 FY2026 that calls for revenue between $203 million and $207 million. The midpoint of this range, $205 million, sits just below the analyst consensus estimate of approximately $209.9 million. For the full fiscal year 2026, the company raised its revenue guidance to a range of $810 million to $814 million, aligning closely with the current analyst consensus of approximately $827.6 million for the calendar year.
This conservative near-term revenue forecast, juxtaposed with the strong profitability achieved in Q3, appears to be the central factor in the market's measured response.
Key Highlights from the Quarterly Report
Beyond the headline numbers, the press release emphasized several operational and strategic achievements:
- Profitability and Cash Flow: Management stressed "record quarterly operating margin and operating cash flow." This underscores a successful shift towards a more efficient, profitable business model.
- Capital Return: The company remains active in returning capital to shareholders. Share repurchases totaled $39 million for Q3 and $119 million for the fiscal year-to-date, reducing the share count and providing support for earnings per share.
- Strategic AI Initiatives: LiveRamp is pivoting its Data Marketplace to include AI tools, models, and data sets, positioning it as a hub for AI development fueled by permissioned data.
- Partner Expansion: Notable partnerships were highlighted, including a deepened strategic relationship with advertising giant Publicis and a new data insights platform launch with Uber Advertising.
- Customer Metrics: The company reported growth in larger clients, with 140 customers generating over $1 million in annual subscription revenue, up from 125 a year ago.
Conclusion
LiveRamp's Q3 FY2026 results paint a picture of a company successfully executing on profitability and cash generation, handily exceeding earnings expectations. The primary point of investor scrutiny is the top-line growth trajectory, as evidenced by the slight revenue miss and a Q4 outlook that modestly trails consensus. The market's reaction indicates a balancing act between applauding the improved earnings power and weighing the pace of revenue acceleration moving forward.
The company's strategic moves into AI-enabled data collaboration and its strong partnership announcements suggest it is building a foundation for future growth, but the immediate financial guidance has set a cautious tone.
For a detailed look at historical earnings, future estimates, and analyst projections for LiveRamp, you can review the data here.
Disclaimer: This article is for informational purposes only and does not constitute financial advice, nor a recommendation to buy or sell any security. Investors should conduct their own research and consult with a qualified financial advisor before making any investment decisions.
