NYSE:RAMP LiveRamp Q4 2024 Earnings Report $27.02 +0.42 (+1.58%) Closing price 04/25/2025 03:59 PM EasternExtended Trading$27.02 0.00 (0.00%) As of 04/25/2025 04:20 PM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. Earnings HistoryForecast LiveRamp EPS ResultsActual EPS-$0.11Consensus EPS -$0.04Beat/MissMissed by -$0.07One Year Ago EPSN/ALiveRamp Revenue ResultsActual Revenue$171.85 millionExpected Revenue$159.95 millionBeat/MissBeat by +$11.90 millionYoY Revenue GrowthN/ALiveRamp Announcement DetailsQuarterQ4 2024Date5/22/2024TimeN/AConference Call DateWednesday, May 22, 2024Conference Call Time4:30PM ETUpcoming EarningsLiveRamp's Q4 2025 earnings is scheduled for Tuesday, May 20, 2025, with a conference call scheduled on Wednesday, May 21, 2025 at 4:00 PM ET. Check back for transcripts, audio, and key financial metrics as they become available.Conference Call ResourcesConference Call AudioConference Call TranscriptSlide DeckPress Release (8-K)Annual Report (10-K)Earnings HistoryCompany ProfileSlide DeckFull Screen Slide DeckPowered by LiveRamp Q4 2024 Earnings Call TranscriptProvided by QuartrMay 22, 2024 ShareLink copied to clipboard.There are 9 speakers on the call. Operator00:00:00Good afternoon, ladies and gentlemen, and welcome to LiveRamp's Fiscal 2024 Fourth Quarter Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer As a reminder, this conference call is being recorded. I would now like to turn the call over to your host, Drew Borst, Vice President of Investor Relations. Speaker 100:00:31Thank you, operator. Good afternoon and welcome. Thank you for joining our fiscal 2024 Q4 earnings call. With me today are Scott Howe, our CEO and Lauren Dillard, our CFO. Today's press release and this call may contain forward looking statements that are subject to risks and uncertainties that could cause actual results to differ materially. Speaker 100:00:53For a detailed description of these risks, please read the Risk Factors section of our public filings and the press release. A copy of our press release and financial schedules, including any reconciliations to non GAAP financial measures, is available at liveramp.com. Also during the call today, we'll be referring to the slide deck posted on our website. And with that, I'll turn the call over to Scott. Speaker 200:01:20Thank you, Drew, and thanks to everyone joining our call today. As I've done in past year ending earnings calls, today I'll strike a balance between talking about the quarter and the year that just ended and perhaps more importantly provide a bit of color around what we intend to accomplish across the coming year. We ended fiscal 2024 on a high note with Q4 revenue and operating income exceeding our expectations and a positive inflection in several key performance indicators. As we look ahead to FY 2025, we like our strategic position. Our data collaboration platform seems well positioned to capitalize on the growing need for secure first party data collaboration and to sustain addressable digital advertising in a world of 3rd party signal loss. Speaker 200:02:15Operationally, we also feel as if there are still a lot of ways we can run the business even more effectively and efficiently. Before turning to our FY Before turning to our FY 'twenty five priorities, however, let me spend some time on Q4 and FY 'twenty four. Q4 revenue growth exceeded our expectations across the board with total revenue up 16%, subscription up 11% and marketplace up 38%. Revenue was ahead of our guidance by $12,000,000 or 7% and non GAAP operating income was ahead by $3,000,000 or 20%. Revenue growth came a long way in FY 2024. Speaker 200:03:05You might recall that our initial guide 12 months ago was for revenue growth of 2% to 4%. Over the past year, we actually grew our top line at 11% or 10% on a like for like basis excluding Havu. The majority of the upside was driven by our marketplace business, but subscription also revenue growth after positively inflecting in Q3 accelerated again in Q4 by 1.9% on a like for like basis. This growth acceleration demonstrates the progress we made throughout FY 2024 improving our sales productivity and customer retention. The best leading indicator of subscription revenue is ARR or annual recurring revenue and in Q4 growth accelerated for a 2nd consecutive quarter. Speaker 200:04:09On a like for like basis, ARR grew by 7%, a 1 point acceleration sequentially and the fastest quarterly growth since Q3 FY 'twenty three. We continue to see positive momentum in new logo bookings in Q4. Last quarter, I highlighted that Q3 was our highest quarter for new logo dollar bookings in over 2 years. Well, Q4 was the 2nd highest and just 1% below Q3. We signed a new 3 year contract with a 7 figure annual value with a major home improvement retailer for a bundle of our solutions across identity, connectivity and data collaboration. Speaker 200:04:58We signed another 7 figure annual contract with a multiyear term with a major pharmacy retailer for identity and connectivity. We also continue to successfully upsell our existing customers. Our subscription net retention was better than we expected at 103%. This is still below the levels we aspire to achieve, but I'm pleased with the progress we made in FY 2024 improving retention by 6 percentage points. We had a notable 7 figure upsell with a multi year term with a major pharmaceutical manufacturer for our identity onboarding solutions. Speaker 200:05:43We had a high 6 figure upsell with a 2 year term with a major cosmetics and beauty retailer for our clean room and data collaboration solutions. These customer wins speak to the broader success we're having with the largest, most innovative brand customers. In Q4, our $1,000,000 plus customer cohort count increased by 10 quarter on quarter to 115 equaling our highest net add quarter on record. And FY 2024 was our best fiscal year on record with 20 net $1,000,000 plus customer adds. While I am pleased with our progress in FY 2024, there remains room for improvement. Speaker 200:06:38The entire LiveRamp team is focused not just on sustaining our current momentum, but hopefully improving upon it. I am energized about the opportunity in front of us with our data collaboration platform and the industry megatrends that should continue to be a wind at our back. From the transition from 3rd party signals to authenticated addressability to accelerating growth in major CTV and commerce media providers to cloud computing and artificial intelligence. All of these market trends are seemingly poised to drive incremental demand for our solutions and it's our responsibility to seize this opportunity. We have 4 overarching corporate priorities for FY 2025. Speaker 200:07:311st, enhance both our products and customer experience to help improve customer retention while positioning us for greater upsell success. 2nd, extend our leadership position in data collaboration. 3rd, scale our partner and connectivity ecosystem and 4th, simplify LiveRamp for our customers and employees. I will elaborate on each of these in a minute. But the common thread is that if we successfully execute on these priorities, then we will continue to make progress with our primary financial objective of becoming a Rule of 40 company. Speaker 200:08:19Starting with upgrading our products and customer experience to improve customer retention. This is and will always be an ongoing effort as great customers always expect constant progress. But let me share a few examples. First, we have better aligned our pre and post sales teams to more efficiently and effectively onboard new customers and reduce the amount of time between contract signing and go live. 2nd, we continue to modernize our technology to facilitate greater scale and faster turnaround time. Speaker 200:08:593rd, we've upgraded all customers from cookie based workflows to our Ramp ID, which readies them for payer and other non cookie integrations where the advertising performance typically is significantly better. Finally, we deployed dedicated resources to help our activation customers expand the number of destinations where their first party data is being used. Our internal data tells us that both customer retention and profitability are positively correlated to the number of publisher destinations to which our customers activate their first party data. We made significant progress with customer retention in FY 2024, but we think these initiatives and others will help us continue improving in FY 2025. Our second priority is extending our leadership in data collaboration. Speaker 200:09:59Data collaboration helps companies manage and optimize data that is siloed across a growing number of cloud computing environments. Data collaboration is also an antidote to 3rd party cookie deprecation and other signal loss. In a recent eMarketer survey, advertisers and publishers were asked which solutions held the greatest promise of replacing cookie dependent solutions. The number one response from approximately half of the advertiser and publisher respondents was first party data activation. We believe this is particularly true for the largest most sophisticated companies. Speaker 200:10:45After all, 1st party data is not equally distributed across the ecosystem. Some companies are rich in 1st party data like retailers and major publishers and others are 1st party data poor. Our data collaboration platform provides a solution for this data inequality by enabling the secure sharing of first party data with trusted business partners for mutual benefit. In a manner similar to the mutual benefits retailers and CPG companies get through data sharing in retail media networks. Habu is an important component of our data collaboration strategy. Speaker 200:11:29We're now 4 months into the Haboo acquisition and I'm convinced the influx of both talented people and elegantly simple yet sophisticated technology make us a better company and position us for greater long term success. We have already integrated Haboo's cleanroom technology into our data collaboration platform. The onboarding of our new colleagues was fairly easy given our shared excitement about the future. And the talented Habu leadership team has been given expanded responsibilities and access to even more resources. Customers are responding positively to Haboo's product, particularly its key differentiators of seamless cross cloud interoperability, customizable analytics in walled gardens and a simple user friendly UX. Speaker 200:12:29As a result, our sales pipeline continues to scale. 1 month after the deal closed, our incremental data collaboration pipeline was $30,000,000 and now 4 months in, it's over $40,000,000 While Haboo's capabilities are a key component of our data collaboration strategy, together they are only one part of a much broader holistic offering. At ramp up in February, we officially launched the next generation of the LiveRamp data collaboration platform, modernizing and unifying our identity, connectivity, data access and data collaboration capabilities onto a single composable platform. The modernized platform introduces new capabilities such as a simplified user ingestion pipes that reduce processing time and accelerates speed to value, composable technology for cross cloud interoperability to unlock data collaboration partnerships and an expanded partner marketplace where 3rd party developers can build custom applications. By bringing all of our capabilities into a single seamless user interface with simplified orchestration, customers are able to more easily connect audiences across partners and unlock greater value across all of their data collaboration needs. Speaker 200:14:02In addition, we will continue to invest this year in unifying our back end systems to modernize our platform architecture to drive improved speed, stability and scalability. This matters to our clients, many of whom have scaled their usage of our platform in ways we never imagined even a few short years ago. The combination of technology scalability and network density help extend our leadership position in data collaboration as well as help with our first corporate priority of improving customer retention. Our 3rd priority is to continue scaling our partner and connectivity ecosystem. Ecosystem. Speaker 200:14:49This has long been a key competitive advantage as the efficacy of our product is in part a function of where and how our technology can be used. Network scale matters and we have the world's leading ecosystem across publishers, technology platforms and data providers, all either powered by or being upgraded to post signal solutions. Our authenticated traffic solution or ATS has been in the making for 5 plus years in anticipation of 3rd party signal loss. Today, ATS is a fully scaled solution that connects publisher and marketer data to better personalize and measure advertising across channels and across geographies. ATS has been adopted by over 21,000 publisher domains, including 75% of the Comscore 100 Publishers and it connects to over 92% of U. Speaker 200:15:53S. Consumer time spent online. Irrespective of Chrome's deprecation timeline, the digital advertising market has largely moved beyond 3rd party cookies. Marketers look to reach their consumers not just on Chrome browsers, but across the compelling channels of Safari, mobile in app, retail media and CTV. ATS is omnichannel. Speaker 200:16:23We partnered with Disney Plus Tubi, NBCU, Paramount Plus and many more pubs and these partnerships are not limited by the cookie. ATS is available wherever a consumer is today and will be in the future. And we envision a future where today's connections with major platforms, publishers and CTV providers increasingly are complemented by AI applications and new consumer touch points. Additionally, we have partnered with Google's DSP Display and Video 360 on its PAIR initiative. PAIR, which stands for publisher advertiser identity reconciliation, is DV360's answer to 3rd party cookie deprecation and allows advertisers and publishers to securely and privately reconcile their first party data to enable personalized advertising. Speaker 200:17:26Our role is providing the clean room infrastructure that allows advertisers and publishers to securely activate their 1st party data on DV360. PAIR continues to scale adoption with large publishers, including CTV Publishers like NBCUniversal. The early results from PAIR are highly encouraging. Our case study with Omni Hotels and Resorts showed payer campaigns delivered a 4x increase in conversion rate over traditional cookie based targeting in DV360. And we've seen similar results in as of yet unpublished case studies. Speaker 200:18:09A recent analysis of our brands who use PAIR showed that they were able to increase their match rates by 27%. This is meaningful incremental reach that is available today because PAIR is not limited to Chrome, but is available across Safari, Firefox, Edge and CTV inventory. Results like this convince us that the industry should just embrace cookie less alternatives like Pear and ATS and stop fretting about deprecation timelines. But we'll make use of the extra time afforded to all by Google's recent announcement to delay full implementation until after the holiday shopping season. In the coming months, in partnership with Google and others, we will continue to publish case studies and educate the ecosystem so they are ready for full cookie deprecation when it occurs in early calendar year 2025. Speaker 200:19:13As Perris scales, the benefit to LiveRamp should show up in the form of 1st incremental activation from our existing subscription customers and second, new logo opportunities that are doing 1st party data targeting exclusively off third party cookies today. Of course, 3rd party cookie deprecation is certainly a catalyst for the adoption of PAIR. So Google's decision to delay Chrome 3rd party cookie deprecation until early 2025 will have an impact on our PAIR opportunities. We think we've appropriately reflected this in the FY 2025 guidance Lauren will provide today. However, in the medium to long term, we remain well positioned and we think improved advertising performance customers can achieve with payer will ultimately win out. Speaker 200:20:09Finally, our 4th priority for FY 2025 is simplifying LiveRamp for our customers and employees. There's a plethora of coordinated activities that will ultimately simplify our technology and ease of use. We're always working to improve our UIs, simplify and streamline our contract processes, re examine our pricing policies and modernize our technology. 1 of the emerging initiatives is leveraging artificial intelligence, both internally to improve our own productivity and make our products better and externally to help our customers organize and accumulate the data that is the fuel for their own AI models and initiatives. Internally, we are using AI in a number of ways from helping our software developers write code more quickly to helping all LiveRampers find useful information more quickly through an AI powered assistant tool with enterprise search. Speaker 200:21:18More specifically, approximately 15% of our developers are now regularly using AI tools to assist with coding. And on average, these tools have generated an estimated double digit percentage improvement in productivity. We are also incorporating AI into our data collaboration platform and data marketplace that will provide ease of use and accelerated time to value benefits. Offers JetAI powered data queries that can produce reports without requiring SQL coding skills, which makes the platform more usable for less technical business users. In our data marketplace, we are training a proprietary AI model to accelerate our review of the data labels and descriptions provided by data sellers, which is critical to ensuring favorable buyer experience. Speaker 200:22:21Finally, we are using AI with our IV Graph to drive increased accuracy and stability through a more sophisticated understanding of data fragment relationships. Beyond our internal use of AI, the LiveRamp data collaboration platform has a much larger and critical role to play in helping customers use data to propel their own AI initiatives. Our data collaboration and enrichment products and connected partner ecosystem help brand marketers improve the quality, quantity and diversity of customer data used. This customer data is the foundation for training generalized AI models and transforming them into the kind of proprietary models that produce brand specific predictive customer insights such as optimized segmentation, interests, propensities and affinities. Ultimately, these AI powered insights help brand marketers deliver personalized marketing experiences more effectively and efficiently. Speaker 200:23:32In closing, let me reiterate what I believe to be the key themes from the quarter. First, Q4 was a strong finish to FY 2024 with revenue and operating income exceeding our expectations and a positive inflection in several key performance indicators. Notably, the growth in ARR, which is the best leading indicator of our fixed subscription accelerated for a 2nd consecutive quarter to double digits on a reported basis. 2nd, we're not satisfied. As we look ahead to FY 2025, we have an ambitious set goals and priorities that will, if we successfully execute, help us advance toward our goal of being a rule of 40 company. Speaker 200:24:25Finally, we believe we're well positioned against the trends that matter. Our data collaboration platform is well positioned to capitalize on the growing need for secure first party data collaboration to sustain addressable digital advertising. Our platform provides the right capabilities and there are multiple industry megatrends working in our favor, including the shift to cloud computing, the proliferation of AI tools and marketing, growth in new walled gardens in CTV and Commerce Media, and of course, the rise of authenticated addressability over 3rd party signals. Thank you again for joining us today and a special thanks to our exceptional, exceptional customers, partners and to all LiveRampers for their ongoing hard work and support. We look forward to updating you on our progress in the coming quarters. Speaker 200:25:27I will now turn the call over to Lauren. Speaker 300:25:30Thanks, Scott, and thank you all for joining us. Today, I will cover 2 topics. 1st, a review of our Q4 financial results and second, provide our outlook for FY 2025 and Q1. Unless otherwise indicated, my remarks pertain to non GAAP results and growth is relative to the year ago period. Starting with Q4. Speaker 300:25:55We had a strong finish to FY 2024 with revenue and operating income exceeding our original expectations. Revenue came in at $172,000,000 $12,000,000 above our guide and operating income was $16,000,000 $3,000,000 above our guide. Operating margin was 9% and we generated $28,000,000 in operating cash flow in the quarter and $106,000,000 in the fiscal year. Let me provide some additional details. Please turn to Slide 5. Speaker 300:26:28First, as a reminder, we closed the acquisition of Habu on January 31. Consistent with what we shared previously, the transaction contributed $2,000,000 of revenue in the quarter or approximately 2 points of subscription growth and roughly $3,000,000 of expense. As you would expect, it also positively impacted our other revenue metrics. Total revenue was 172,000,000 up 16%, with subscription revenue and marketplace and other significantly ahead of expectations, driven primarily by continued sales execution and a stronger than expected digital advertising market. Subscription revenue was $134,000,000 up 11%. Speaker 300:27:15Fixed subscription revenue was 9% and usage as a percentage of total subscription revenue was 14%, in line with the historical 10% to 15% range. ARR was $467,000,000 up 10%, reflecting a $12,000,000 impact from Habu and continued growth in customer upsell and new logo. Subscription net retention was 103%, 2 points better sequentially and ahead of our expectation. The outperformance was driven in part by Habu and by strong upsell of our clean room and connectivity products. Current RPO or our next 12 month contracted backlog was $414,000,000 up 23%. Speaker 300:28:05Total RPO including contracted backlog beyond the next 12 months was up 20% to $566,000,000 As a reminder, RPO and CRPO are very sensitive to the timing of renewals and to contract duration. And given our focus on large enterprise customers and shift to more multiyear deals, both of these factors again benefited growth in the quarter. Overall, we see some positive and challenges with the current selling environment. Our pipeline continues to build nicely and new logo activity remains strong in Q4, as Scott pointed out. Importantly, our focus on large customers continues to yield results. Speaker 300:28:52In Q4, we added 10 new $1,000,000 plus subscription customers, matching our all time best quarter. That said, our average sales cycle ticked up slightly in the quarter from recent trends of 8 to 9 months. In addition, we continue to experience softness with smaller low ACV customers, both brands as well as technology platforms, including Ad Tech that is experiencing some structural change. Marketplace and other revenue of $38,000,000 increased 38%, driven by data marketplace, which grew 32% and accounted for 78% of marketplace and other revenue. Data marketplace growth was aided by an easy year ago comp as well as a healthy digital ad market with particular strength in CTV. Speaker 300:29:47We also continue to see strong growth in professional services, which accounted for approximately 30% of marketplace and other growth. Moving beyond revenue, gross margin was 75%, flat year on year. Operating expenses were $113,000,000 up 16%, reflecting the acquisition of Habu and higher performance based compensation. Operating income was $16,000,000 up from $14,000,000 a year ago and our operating margin was 9%. GAAP operating loss was 14,000,000 dollars Stock based compensation was $25,000,000 down from $45,000,000 a year ago, which included the accelerated vesting of certain non NEO RSUs for tax planning purposes. Speaker 300:30:37Operating cash flow was $28,000,000 down from $31,000,000 a year ago due to higher cash taxes and working capital. For the full year, operating cash flow was 106,000,000 dollars up from $34,000,000 last year. We repurchased $15,000,000 of stock in Q4, bringing the full year buyback to $61,000,000 We have approximately $157,000,000 remaining under the current authorization that expires in December of this year. In summary, Q4 was a strong finish to the fiscal year, with revenue and operating income exceeding our expectations. Growth in subscription revenue and ARR positively inflected, returning to double digits. Speaker 300:31:26And subscription net retention was comfortably above 100%. Operating margin was stable on a reported basis and on a like for like basis expanded by 1 point. In FY 2024, we generated over $100,000,000 in free cash flow for the first time in our history and returned the majority to shareholders through our share repurchase program. Please now turn to Slides 1213. Please keep in mind our non GAAP guidance excludes intangible amortization, stock based compensation and restructuring and related charges. Speaker 300:32:04Starting with the full year, we expect revenue of between $710,000,000 $730,000,000 up 8% to 11% year on year. Our revenue guidance reflects the continuation of the Q4 momentum in the fiscal first half and slightly slower revenue growth in the second half, given limited visibility into the macro as well as the potential for cookie deprecation to cause some short term disruption among customers. Cookie deprecation is obviously a big change to the digital advertising market and will require the industry and our customers to adapt. We don't have perfect visibility into how and when our customers adapt, particularly in the near term. We see both opportunities and risks associated with cookie deprecation and the wider than normal range on our revenue guide reflects this. Speaker 300:33:02We expect subscription revenue growth to accelerate to the high single digits and fixed subscription revenue is expected to grow high single to low double digits. Subscription usage revenue is forecasted to be roughly flat year on year. We also expect Our outlook for subscription revenue assumes net retention remains within a range of 100% to 105%, broadly consistent with the recent trend. As Scott discussed, we have several initiatives underway to improve customer retention and we would hope net retention will improve as the year unfolds. For now, however, this is not embedded in our guide. Speaker 300:33:53We expect marketplace and other revenue growth to be between low double digits and mid teens. Underpinning this estimate is an expectation that data marketplace growth will be in line to above the growth in the overall digital ad market. We expect a gross margin of approximately 75%. We expect non GAAP operating income of between 125 $1,000,000 and $129,000,000 At the midpoint, this represents 21% growth and a margin of 18%, up approximately 2 percentage points. Operating expenses are expected to increase mid to high single digits, of which the Habu acquisition accounts for approximately 3 points. Speaker 300:34:40The remaining growth reflects investments in our sales force, cloud strategy and scaling our partner network, partially offset by incremental savings from our offshoring initiatives. We expect stock based compensation to be $116,000,000 up from $71,000,000 last year. The year on year increase is primarily driven by 2 items. First, dollars 23,000,000 from the normalization of accelerated vesting in FY2023 and second, dollars 12,000,000 associated with the Havu acquisition. We expect GAAP operating loss to between $8,000,000 $4,000,000 Lastly, we expect to return a significant portion of our FY 2025 free cash flow to share owners through our share repurchase program. Speaker 300:35:29We expect to spend approximately $15,000,000 per quarter depending on market conditions. We believe this is a great investment and will largely offset the impact of forecasted dilution. Now moving to Q1. We expect total revenue of $172,000,000 non GAAP operating income of $25,000,000 and an operating margin of 15%, up 100 basis points year on year. A few other call outs for Q1. Speaker 300:35:59We expect subscription revenue to be up roughly 10% and marketplace and other revenue to be up high teens year over year. We expect Q1 gross margin to be approximately 74% and we expect stock based compensation to be approximately 29,000,000 dollars Before opening the call to questions, I'll conclude with a few final thoughts. First, we had a very strong Q4, ahead of our expectations on both the top and bottom line, demonstrating improved sales execution against the backdrop of healthy ad market and our continued commitment to efficient growth. Q4 revenue growth returned to double digits, including low double digit subscription growth. For the year, we produced over $100,000,000 in free cash flow and returned the majority to shareholders through our buyback. Speaker 300:36:55And finally, FY 2025 will be a year of improved subscription growth compared to last year and continued margin expansion. Our revenue guidance reflects a continuation of the Q4 momentum in the fiscal first half and slightly slower revenue in the second half, mostly in the name of conservatism. The swing factors within the revenue range will be first, the health of digital ad markets as it relates to our variable revenue streams 2nd, sales execution, particularly with the assumed improvement in bookings driven by Habu in the second half. And third, customer churn and down sell relative to the modest improvement assumed in our guide. With that, on behalf of all LiveRampers, thank you for joining us today and thank you to our amazing customers. Speaker 300:37:46Operator, we will now open the call to questions. Operator00:37:51Thank you. The floor is now open for questions. Your first question comes from the line of Shyam Patil of Susquehanna. Your line is open. Speaker 400:38:11Hey guys, congrats on the nice results. I had a couple of questions on Habu. First one, can you elaborate on the integration and the customer's response relative to your initial expectations? And then second one, can you remind us of your financial targets for AHU in fiscal 2025? Thank you. Speaker 200:38:34Yes, Sean. In terms of Haboo integration progress, we've done this a few times now and we think we're pretty good at it. And it's complex, so I'll talk about a few different pieces. First off and most importantly is always the people integration. And there we've had 100% migration of Habu employees over to LiveRamp. Speaker 200:38:59And I'm really pleased. I mean this is an injection of world class talent and fresh ideas, which is great for our company, because it brings new thinking, but it also energizes our legacy team. It's also given us some bench strength. And if you look at the Habu leadership team, many of them have already taken on expanded roles within LiveRamp and others of them have taken on brand new challenges. And an example I would give is Matt Kilmartin. Speaker 200:39:31He's just a brilliant CEO, talented entrepreneur and the acquisition has kind of freed him from the day to day management grind. So we're using his entrepreneurial skills to tap in. He's going to lead the charge on new use cases and verticals. And as you know, Shyam, this is something we've talked about for a couple of years now, but we haven't ever made as much progress as we would like, outside of advertising and marketing. And so we feel like we have a good product. Speaker 200:40:02We got, with some small configuration or maybe some slight design mods. It's extendable to all kinds of other use cases. We just need someone smart and entrepreneurial thinking about it all the time and driving the charge. And so Matt's going to do that. So very excited about the people integration. Speaker 200:40:22The second big piece that is very visible to our clients is the product integration. And there I'm really pleased. I mean Haboo has done a great job of building simple yet elegant technology. And because we were starting to think about the technology integration well before we announced the deal, this was a pretty easy lift. As importantly, we brought in an influx of talented engineers who can look at our architecture and product design for the first time with fresh eyes. Speaker 200:41:03The CTO over at Habu, a guy named Roopak Gupta, I mean, he's just brilliant. And the conversations that we've had together is, I've said Roopak, challenge everything, because that fresh thinking is going to make us better and the intersection of Haboo's technology with LiveRamp's thinking is going to lead to a better outcome for our clients. The 3rd piece, which comes after the first two is pipeline. And here, it came pretty quickly because literally within a month of the deal, we had created $30,000,000 of pipeline. We're now up to $40,000,000 I would tell you, clients are intrigued. Speaker 200:41:47And I've spoken to a handful of our very largest clients. I've heard nothing but good things. And then because we've done the first three right, I think performance comes next. And I would tell you that we're on track with the deal model. Lauren can talk about that, unpack that a little bit more detail. Speaker 200:42:07But as importantly, we have really strong line of sight to what we need to do. And we're ensuring through pretty aggressive project management that our teams are moving fast and we're removing the obstacles in front of them. I don't know. What did I miss, Lauren? Speaker 300:42:26Yes. Hi, Shyam. With respect to the second part of your question on our financial targets, as we shared in the call, we added about $12,000,000 of ARR in Q4, which you can think about as the inorganic contribution to growth in 2025. We continue to target $18,000,000 of revenue in 2025. Again, this is a synergized number, so inclusive of a few million of synergies from cross sell in the back half of the year. Speaker 300:42:57A point I would make and Scott just made it as well, but Habu is being fully integrated into our platform and given the strong opportunity for cross sell of LiveRamp products alongside Habu, drawing the line between LiveRamp and Habu will become increasingly challenging as we move through the year. And then just a final point on the bottom line, we continue to target breakeven on an op income basis, which equates to about a point of dilution on op margin in Speaker 400:43:312025. Great. Thank you, guys. Operator00:43:34Your next question comes from the line of Jason Kreyer of Craig Hallum Capital Group. Your line is open. Speaker 500:43:43Wanted to stick with Habu. We've talked about that the last couple of months as kind of being a plug and play solution for smaller marketers. So just curious any updates on that, any progress with smaller customers in the quarter or what we should anticipate for the evolution of that, that being a better solution for that lower end of the market? Yes. Speaker 200:44:03I mean, that's certainly part of our pipeline and no particular updates in terms of new clients to share that I didn't talk about in my prepared remarks. So I feel pretty good about that. I ultimately think one of the bigger catalysts is still out in front of us. I believe that when we get across the finish line on cookie deprecation, that's going to be the biggest catalyst that we've seen for adoption of a data collaboration platform because you need 1 in order to activate in DV360. And DV360 is the market share leader along with Amazon's DSP. Speaker 200:44:46It drives the most tonnage on most media plans. So most advertisers are going to have to embrace what we do if they want to avoid disruption in their advertising efforts. So we're a little bit bummed about the slowdown in deprecation probably most so because having planned for this for 5 years, I just want it behind us and to start talking about the glorious future as opposed to what's to come. But I think all good things in store for the future of clean rooms. Speaker 500:45:26Thanks, Scott. And then like a month ago, Google announced that they're moving pair to an open source platform in conjunction with the IAB. Just curious if there are any implications there? I'm wondering if this kind of broadens the reach of Pare by expanding the developer network and making it available to more developers, but curious your thoughts on the opportunity. Speaker 200:45:51Well, we'd sure like to think so. I love the fact that Google open source that and put the hands put it into the hands of the IAB. The more standardization that there is around adoption of authenticated ways to buy, bifurcated consents at both the buyer and seller side. That's the future is to get consented users. And so the more that that can take wing, not just with Google, but with major CTV players with all the social media platforms, it's just better for the entire industry. Speaker 200:46:34It fuels more standardization and we've seen the great returns that you get through Pear. It's pretty significant lift, not just for advertisers, but also for publishers in terms of their yield. So everything that Google can do to spread adoption is something we're cheering for. And I should also just say, I mean, a big chunk of our summer here at LiveRamp is going to be spent out in the road evangelizing. We'll take use of the extra time Google afforded with their pair deprecation timeline to educate and evangelize the offering in the market, in many cases with Google. Speaker 200:47:12So we'll be doing some stuff with them at Cannes in next month. And just a lot of roadshows, seminars, things like that to ensure that the market's ready. Operator00:47:32Your next question comes from the line of Elizabeth Porter of Morgan Stanley. Your line is open. Speaker 600:47:38Great. Thank you so much. I just wanted to follow-up on your comment about kind of the bigger catalyst being data collaboration and really needing it for DV360. I understand that the time line to recognize some of this opportunity has been pushed out a bit. But any sort of framework you're providing in terms of how to think about sizing the opportunity tied with payer and how that could impact LiveRamp? Speaker 200:48:02Yes. Well, first off, Elizabeth, and I'm sure that Lauren can dive into this a little bit more. I would tell you, if you look at our guidance, I mean, we're being what we think is appropriately conservative with respect to payer. And with the timeline now really shifting into the last quarter of our fiscal year, so that January to March timeline. Yes, we won't see a huge impact of it in our year this year, but we've been very what we think appropriately conservative because there's just going to be gazins and gazouts. Speaker 200:48:46Remember that you have an entire industry that was built on cookies and has operated on them for the last 30 years. And we got 9 months to get them fully ready for the cutover. And my guess is we'll be pretty successful with advertisers, but there's probably going to be a lot in the industry who won't be ready. And so it'll be interesting come next calendar Q1 to see how that plays out. It wouldn't surprise me if there is a stall as folks figure out what they're doing operationally before there's an acceleration. Speaker 200:49:27That said, as you know Elizabeth, we're out in the market telling folks not to wait, because the same techniques that can be utilized in PARE, it's just an extension of what folks are doing in cookies today, but it gets you pretty significant incremental reach because it allows you to reach the consented users on Firefox and Edge and Safari. And that drives a pretty significant increase in performance. So we're going to try really hard to prepare the industry and get them converted well before next Q1. But I think it's a little bit unpredictable. Now the last thing I would say is initially, we think that we'll see the first impact on just usage because people will switch from cookies to true authentication and everything that they do. Speaker 200:50:33It will make our existing clients even stickier. It might drive some incremental usage. That's particularly true as authenticated methods extend to the major CTV providers. But then the next catalyst will really be not seen in our subscription usage as much as just clean room adoption. We think that virtually everybody is going to need to have a clean room to do the kind of advertising addressable advertising that they've grown used to. Speaker 200:51:08And that should be a catalyst for us both in the U. S. To win potential new clients, but then also internationally where in many cases Google's market share internationally, DV360's market share internationally is much higher than it is here in the U. S. Speaker 600:51:28Great. Thank you so much. And just as a quick follow-up, it was good to see the new logos start to increase quarter over quarter after being flat to down earlier in the year. So could you just talk about kind of where are the incremental kind of customers coming from? Is this momentum with cloud partners, kind of HABU? Speaker 600:51:44And how should we think about just the durability of net adds? Speaker 300:51:48Yes. Hi, Elizabeth, Lauren here. Great question. And as we've mentioned in the past, there are a lot of moving pieces roughly stable in Q4 and the trends that we have been seeing in recent quarters played out again in Q4, which is continued strength in high ACV brand customers, partially offset by continued pressure with lower ACV customers, particularly in the ad tech cohort. As we look ahead to FY 2025, we would expect overall customer count to be somewhat muted, again given the dynamics that I just mentioned. Speaker 300:52:36That said and we've discussed this in recent quarters, we have shifted our sales focus to larger higher LTV brand customers over the past year plus and you really see that play out in metrics like our $100,000,000 customer count, which grew nicely in FY 2024 and we would expect to continue to grow nicely into FY 2025. Speaker 600:53:00Great. Thank you so much. Operator00:53:03Your next question comes from the line of Mark Zutowicz of Benchmark. Your line is open. Speaker 700:53:09Thank you. Hi, Scott and Lauren, congrats on an exceptional quarter. Just a couple of questions from me. On the pipeline $30,000,000 I guess $40,000,000 now since the Haboo acquisition. I'm curious if you think about what's driving that, maybe just a split between demand for walled garden, self-service, cloud interoperability from your existing clients versus new verticals, accelerating subscription outside of retail and CPG, if you could maybe provide some color there would be helpful? Speaker 200:53:47Yes, it really is both. So if I think back a year or 2 years ago, we obviously had a lot of success powering the retail media networks. But even in my prepared remarks, the examples that I gave went beyond retail. So I talked about a pharmaceutical, for instance, company and we're also doing some really interesting things in travel. And not surprisingly, some of the most interesting things that we're starting to talk about and you're starting to see are actually in the entertainment space. Speaker 200:54:31It's the case that as you think about a world that increasingly first party data is going to be really important, well, who has great sources of first party data? The major publishers, and they're not all named Google and Facebook. You think about all of the CTV providers that you authenticate every time you log in, they have deep viewership information, and they know a lot of demographic information as well. And so kind of the clean room capabilities that any advertiser can spin up with those destinations is pretty powerful. So I think retail and packaged goods gave every other industry a roadmap to follow here. Speaker 300:55:23And Mark, maybe just to put, some additional color against that. If we look at the collaboration or clean room deals we won in Q4, about half were with retail and CPG, but half were with the companies that Scott just mentioned, so publishers, travel and entertainment companies, automotive companies, healthcare. And if we look at the composition of our pipeline and the pipeline created, it kind of mirrors that split. Speaker 700:55:54Got it. That's helpful. And maybe on the new verticals, is it too early to start talking about potential sizable TAM expansion here outside of the CPG and retail meeting? Do you have adequate sales capacity to sort of address these newer verticals? Is that expanding? Speaker 700:56:15Will that sort of TAM expand as you add more capacity there? Or what is that just a learning curve more with those industries that just takes time? Speaker 200:56:25I feel really fortunate. I think we're a little bit ahead of this one because if you recall a couple of years ago during the great resignation, we really saw a big exodus for a short period of time to our sales force. And we used that opportunity when we backfilled to remake our sales force. We actually created vertical industry groups. So now we have a retail group. Speaker 200:56:58We have a financial services group. We have experts in travel. And that's so important. When LiveRamp was formed, we used to be able to go in and wow people just talking about the But now increasingly, particularly given the fact that we have higher level audiences within the clients we're calling on, oftentimes it's the CMO or the CEO. We have to go in and talk in their language. Speaker 200:57:28We have to understand how does the airline Speaker 800:57:30industry work for example, how Speaker 200:57:30do airlines make money in future, personal entertainment devices that you use in personal entertainment devices that you use in flight. And so by hiring that way for the last couple of years, I think it's actually improved our sales productivity and actually driven some of the success we're seeing in these new verticals. Speaker 700:57:59Sounds great. Thanks very much. Appreciate it. Speaker 300:58:02Thanks, Mark. Your Operator00:58:04next question comes from the line of Kirk Materne of Evercore ISI. Your line is open. Yes. Speaker 800:58:11Hi Scott. Hi Lawrence. This is actually Peter Berkley on for Kirk. I'll echo my congrats on a really nice quarter. Speaker 200:58:17Thanks, Peter. Speaker 800:58:19So a lot of like here, Couple of metrics that really stood out to us, the large customer growth, dollars 1,000,000 customers and then the NRR acceleration. So Scott, maybe I'm hoping I can start with you just on large customer growth. Does this feel like a broader opening up of wallets dynamic? Or is this reflective of the strong momentum in the data collaboration platform, which are generally larger deal sizes? And then Lauren, maybe just as the second one. Speaker 800:58:49On the NRR metric, understanding the color on HABU's contribution and assuming the large customers are acting as a tailwind here. But I'm curious the sort of pressure on the NRR has been contraction at the lower segment of the market of your customer base and sounds like that's sort of continuing on. But I'm just curious given the acceleration and kind of the go forward color, does it feel like that sort of stabilizing or perhaps even inflecting just in terms of that lower customer contraction and just a little bit more trouble at the low end? Thanks. Speaker 200:59:25Yes. So Peter, I'll start with the first. If you looked at our cohort of largest clients, these $1,000,000 plus a year spenders, I think you would recognize almost every single one of them as being kind of major advertisers, brands that you trust, really strong consumer brands. And we did a detailed analysis of we did a big customer segmentation about a year ago. And what we found is that those sophisticated large The The churn rate for those is significantly less. Speaker 201:00:15But the most interesting insight was the number of activations that they had. And for the largest clients, I can't remember exactly the number, but it was in excess of 18 activations that they had. And when you have 18 activations, you're lighting up different destinations, maybe point of sale, certainly a lot of different properties. You're a lot more sophisticated about what to do with your data. You probably are much more likely to want to have a clean room and set up data collaboration with partners. Speaker 201:00:57You're certainly much more likely to want measurement back. And so they just start becoming power users. And so I don't think it's a function of the macro or budgets becoming easier to get or anything like that. I think it's just a function of those are more sophisticated companies. They've learned how to use their data effectively and they're trying to do even more with their data. Speaker 201:01:30Our challenge internally is how do we get some of our smaller companies to look more like those big companies. So we're kind of laser focused on making sure that everybody activates more destinations on their media plan, which is going to lead them to adopt more usage with us. Speaker 301:01:53And Peter, with respect to your question on NRR, I will just again point out that Habu contributed a couple of points to NRR in the quarter. Outside of that, we are seeing some stabilization with our lower ACV customer cohort. But the bigger driver continues just to be stronger contribution from upsell with our largest customers as they adopt clean room and collaboration use cases. Speaker 801:02:23Very helpful. Thank you both. Speaker 101:02:24Operator, we have time for one more question. Operator01:02:28Your last question comes from the line of Brian Fitzgerald of Wells Fargo. Your line is open. Speaker 201:02:33Thanks. Scott, I want to follow-up on your Pairs commentary. Obviously, there are thousands of DV customers out there, and it seems like DV360 customers need to use Pairs to target ads off of 1st party data and measure performance after deprecation. Has Google built 3 tools to access payer via data hubs or otherwise? It seems like you are far and away the most important partner for Google's messaging about pairs, the announcement with NBCU and so on and customers more or less need to adopt. Speaker 201:03:12Is that a correct way to view the opportunity expansively? Or are there other considerations, free tools, more clean room partners likely to be named over time? Any other reason to look at it more conservatively? I'm sure that there will be more partners over time. We were fortunate to be one of what are now 2 launch partners Haboo, LiveRamp and then there was a third. Speaker 201:03:41So we actually comprised 2 thirds, I guess, of the original launch partners for this. And the deal is they're not building the technology, rather they're mandating that someone who does pairing has a clean room partner. Google wants to be agnostic in this And they want to ensure that someone can ensure that on both sides, the consents have been obtained and handle the security and anonymization that occurs. Now all that said, I would tell you anecdotally that it felt like for a long time we were having a lot of conversations with the Google product team. And we were really involved going back and forth with suggestions around their design and doing a lot of process mapping. Speaker 201:04:36Since January, the switch has really flipped on with the Google commercial teams. As for example, they invited me to come speak to their sales leadership in New York about a month ago. And likewise, their AdPlat sales leader came and spoke to LiveRamp's entire sales organization when we had our sales kickoff a few weeks ago. We're going to be out in market with them educating and evangelizing. I mentioned we'll do some stuff with them at Cannes, which is coming up here in a couple of weeks. Speaker 201:05:20And then we have a lot more things planned to educate and evangelize. I think the biggest barrier here isn't the technology at all. It is just kind of the inertia of 30 years of people using cookies and just educating them that there's a better way. And although it requires a process switch and that may be painful, As soon as you do it, you unlock better results. So that will be the key messages you'll hear both from Google and from us in the coming months. Speaker 201:05:57Got it. Appreciate it. Operator01:06:03I'll now turn the call back over to Lauren Dillard for closing remarks. Speaker 301:06:08Thanks so much. So in closing, we ended FY 2024 on a high note with both revenue and operating profit outperforming our original expectations. As we look ahead, FY 2025 will be a year of improving subscription growth and continued margin expansion. Our revenue guidance reflects a continuation of the Q4 momentum in the fiscal first half and slightly slower revenue growth in the second half, mostly in the name of conservatism. With that, thanks again for joining us today. Speaker 301:06:37We look forward to updating you on our continued progress in the quarters ahead. Operator01:06:43This concludes today's conference call. You may now disconnect.Read morePowered by Conference Call Audio Live Call not available Earnings Conference CallLiveRamp Q4 202400:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsSlide DeckPress Release(8-K)Annual report(10-K) LiveRamp Earnings HeadlinesLiveRamp, AdOmni partn to bring new targeting to CTV, OLV, DOOHApril 25 at 10:40 AM | markets.businessinsider.comThe Winners and Losers of Google's Big Cookie ReversalApril 24 at 7:28 PM | msn.comTrump purposefully forcing markets to crash…Whether you agree with the plan or not doesn’t matter. It’s happening. The only question is – are you ready for it?April 26, 2025 | Porter & Company (Ad)AdOmni And LiveRamp Bring New Targeting & Attribution To CTV, OLV And DOOHApril 24 at 7:28 PM | msn.comPerformance Unlocked: AdOmni and LiveRamp Bring New Targeting and Attribution to CTV, OLV, and DOOHApril 24 at 8:00 AM | globenewswire.comLiveRamp (NYSE:RAMP) Stock Rating Upgraded by StockNews.comApril 23 at 3:29 AM | americanbankingnews.comSee More LiveRamp Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like LiveRamp? Sign up for Earnings360's daily newsletter to receive timely earnings updates on LiveRamp and other key companies, straight to your email. Email Address About LiveRampLiveRamp (NYSE:RAMP), a technology company, operates a data collaboration platform in the United States, Europe, the Asia-Pacific, and internationally. The company operates LiveRamp Data Collaboration platform enables an organization to unify customer and prospect data to build a single view of the customer in a way that protects consumer privacy. Its platform supports various people-based marketing solutions, including data collaboration, activation, measurement and analytics, identity, and data marketplace. The company sells its solutions to enterprise marketers, agencies, marketing technology providers, publishers, and data providers in various industry verticals, such as financial, insurance and investment services, retail, automotive, telecommunications, high tech, consumer packaged goods, healthcare, travel, entertainment, and non-profit. The company was formerly known as Acxiom Holdings, Inc. and changed its name to LiveRamp Holdings, Inc. in October 2018. 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There are 9 speakers on the call. Operator00:00:00Good afternoon, ladies and gentlemen, and welcome to LiveRamp's Fiscal 2024 Fourth Quarter Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer As a reminder, this conference call is being recorded. I would now like to turn the call over to your host, Drew Borst, Vice President of Investor Relations. Speaker 100:00:31Thank you, operator. Good afternoon and welcome. Thank you for joining our fiscal 2024 Q4 earnings call. With me today are Scott Howe, our CEO and Lauren Dillard, our CFO. Today's press release and this call may contain forward looking statements that are subject to risks and uncertainties that could cause actual results to differ materially. Speaker 100:00:53For a detailed description of these risks, please read the Risk Factors section of our public filings and the press release. A copy of our press release and financial schedules, including any reconciliations to non GAAP financial measures, is available at liveramp.com. Also during the call today, we'll be referring to the slide deck posted on our website. And with that, I'll turn the call over to Scott. Speaker 200:01:20Thank you, Drew, and thanks to everyone joining our call today. As I've done in past year ending earnings calls, today I'll strike a balance between talking about the quarter and the year that just ended and perhaps more importantly provide a bit of color around what we intend to accomplish across the coming year. We ended fiscal 2024 on a high note with Q4 revenue and operating income exceeding our expectations and a positive inflection in several key performance indicators. As we look ahead to FY 2025, we like our strategic position. Our data collaboration platform seems well positioned to capitalize on the growing need for secure first party data collaboration and to sustain addressable digital advertising in a world of 3rd party signal loss. Speaker 200:02:15Operationally, we also feel as if there are still a lot of ways we can run the business even more effectively and efficiently. Before turning to our FY Before turning to our FY 'twenty five priorities, however, let me spend some time on Q4 and FY 'twenty four. Q4 revenue growth exceeded our expectations across the board with total revenue up 16%, subscription up 11% and marketplace up 38%. Revenue was ahead of our guidance by $12,000,000 or 7% and non GAAP operating income was ahead by $3,000,000 or 20%. Revenue growth came a long way in FY 2024. Speaker 200:03:05You might recall that our initial guide 12 months ago was for revenue growth of 2% to 4%. Over the past year, we actually grew our top line at 11% or 10% on a like for like basis excluding Havu. The majority of the upside was driven by our marketplace business, but subscription also revenue growth after positively inflecting in Q3 accelerated again in Q4 by 1.9% on a like for like basis. This growth acceleration demonstrates the progress we made throughout FY 2024 improving our sales productivity and customer retention. The best leading indicator of subscription revenue is ARR or annual recurring revenue and in Q4 growth accelerated for a 2nd consecutive quarter. Speaker 200:04:09On a like for like basis, ARR grew by 7%, a 1 point acceleration sequentially and the fastest quarterly growth since Q3 FY 'twenty three. We continue to see positive momentum in new logo bookings in Q4. Last quarter, I highlighted that Q3 was our highest quarter for new logo dollar bookings in over 2 years. Well, Q4 was the 2nd highest and just 1% below Q3. We signed a new 3 year contract with a 7 figure annual value with a major home improvement retailer for a bundle of our solutions across identity, connectivity and data collaboration. Speaker 200:04:58We signed another 7 figure annual contract with a multiyear term with a major pharmacy retailer for identity and connectivity. We also continue to successfully upsell our existing customers. Our subscription net retention was better than we expected at 103%. This is still below the levels we aspire to achieve, but I'm pleased with the progress we made in FY 2024 improving retention by 6 percentage points. We had a notable 7 figure upsell with a multi year term with a major pharmaceutical manufacturer for our identity onboarding solutions. Speaker 200:05:43We had a high 6 figure upsell with a 2 year term with a major cosmetics and beauty retailer for our clean room and data collaboration solutions. These customer wins speak to the broader success we're having with the largest, most innovative brand customers. In Q4, our $1,000,000 plus customer cohort count increased by 10 quarter on quarter to 115 equaling our highest net add quarter on record. And FY 2024 was our best fiscal year on record with 20 net $1,000,000 plus customer adds. While I am pleased with our progress in FY 2024, there remains room for improvement. Speaker 200:06:38The entire LiveRamp team is focused not just on sustaining our current momentum, but hopefully improving upon it. I am energized about the opportunity in front of us with our data collaboration platform and the industry megatrends that should continue to be a wind at our back. From the transition from 3rd party signals to authenticated addressability to accelerating growth in major CTV and commerce media providers to cloud computing and artificial intelligence. All of these market trends are seemingly poised to drive incremental demand for our solutions and it's our responsibility to seize this opportunity. We have 4 overarching corporate priorities for FY 2025. Speaker 200:07:311st, enhance both our products and customer experience to help improve customer retention while positioning us for greater upsell success. 2nd, extend our leadership position in data collaboration. 3rd, scale our partner and connectivity ecosystem and 4th, simplify LiveRamp for our customers and employees. I will elaborate on each of these in a minute. But the common thread is that if we successfully execute on these priorities, then we will continue to make progress with our primary financial objective of becoming a Rule of 40 company. Speaker 200:08:19Starting with upgrading our products and customer experience to improve customer retention. This is and will always be an ongoing effort as great customers always expect constant progress. But let me share a few examples. First, we have better aligned our pre and post sales teams to more efficiently and effectively onboard new customers and reduce the amount of time between contract signing and go live. 2nd, we continue to modernize our technology to facilitate greater scale and faster turnaround time. Speaker 200:08:593rd, we've upgraded all customers from cookie based workflows to our Ramp ID, which readies them for payer and other non cookie integrations where the advertising performance typically is significantly better. Finally, we deployed dedicated resources to help our activation customers expand the number of destinations where their first party data is being used. Our internal data tells us that both customer retention and profitability are positively correlated to the number of publisher destinations to which our customers activate their first party data. We made significant progress with customer retention in FY 2024, but we think these initiatives and others will help us continue improving in FY 2025. Our second priority is extending our leadership in data collaboration. Speaker 200:09:59Data collaboration helps companies manage and optimize data that is siloed across a growing number of cloud computing environments. Data collaboration is also an antidote to 3rd party cookie deprecation and other signal loss. In a recent eMarketer survey, advertisers and publishers were asked which solutions held the greatest promise of replacing cookie dependent solutions. The number one response from approximately half of the advertiser and publisher respondents was first party data activation. We believe this is particularly true for the largest most sophisticated companies. Speaker 200:10:45After all, 1st party data is not equally distributed across the ecosystem. Some companies are rich in 1st party data like retailers and major publishers and others are 1st party data poor. Our data collaboration platform provides a solution for this data inequality by enabling the secure sharing of first party data with trusted business partners for mutual benefit. In a manner similar to the mutual benefits retailers and CPG companies get through data sharing in retail media networks. Habu is an important component of our data collaboration strategy. Speaker 200:11:29We're now 4 months into the Haboo acquisition and I'm convinced the influx of both talented people and elegantly simple yet sophisticated technology make us a better company and position us for greater long term success. We have already integrated Haboo's cleanroom technology into our data collaboration platform. The onboarding of our new colleagues was fairly easy given our shared excitement about the future. And the talented Habu leadership team has been given expanded responsibilities and access to even more resources. Customers are responding positively to Haboo's product, particularly its key differentiators of seamless cross cloud interoperability, customizable analytics in walled gardens and a simple user friendly UX. Speaker 200:12:29As a result, our sales pipeline continues to scale. 1 month after the deal closed, our incremental data collaboration pipeline was $30,000,000 and now 4 months in, it's over $40,000,000 While Haboo's capabilities are a key component of our data collaboration strategy, together they are only one part of a much broader holistic offering. At ramp up in February, we officially launched the next generation of the LiveRamp data collaboration platform, modernizing and unifying our identity, connectivity, data access and data collaboration capabilities onto a single composable platform. The modernized platform introduces new capabilities such as a simplified user ingestion pipes that reduce processing time and accelerates speed to value, composable technology for cross cloud interoperability to unlock data collaboration partnerships and an expanded partner marketplace where 3rd party developers can build custom applications. By bringing all of our capabilities into a single seamless user interface with simplified orchestration, customers are able to more easily connect audiences across partners and unlock greater value across all of their data collaboration needs. Speaker 200:14:02In addition, we will continue to invest this year in unifying our back end systems to modernize our platform architecture to drive improved speed, stability and scalability. This matters to our clients, many of whom have scaled their usage of our platform in ways we never imagined even a few short years ago. The combination of technology scalability and network density help extend our leadership position in data collaboration as well as help with our first corporate priority of improving customer retention. Our 3rd priority is to continue scaling our partner and connectivity ecosystem. Ecosystem. Speaker 200:14:49This has long been a key competitive advantage as the efficacy of our product is in part a function of where and how our technology can be used. Network scale matters and we have the world's leading ecosystem across publishers, technology platforms and data providers, all either powered by or being upgraded to post signal solutions. Our authenticated traffic solution or ATS has been in the making for 5 plus years in anticipation of 3rd party signal loss. Today, ATS is a fully scaled solution that connects publisher and marketer data to better personalize and measure advertising across channels and across geographies. ATS has been adopted by over 21,000 publisher domains, including 75% of the Comscore 100 Publishers and it connects to over 92% of U. Speaker 200:15:53S. Consumer time spent online. Irrespective of Chrome's deprecation timeline, the digital advertising market has largely moved beyond 3rd party cookies. Marketers look to reach their consumers not just on Chrome browsers, but across the compelling channels of Safari, mobile in app, retail media and CTV. ATS is omnichannel. Speaker 200:16:23We partnered with Disney Plus Tubi, NBCU, Paramount Plus and many more pubs and these partnerships are not limited by the cookie. ATS is available wherever a consumer is today and will be in the future. And we envision a future where today's connections with major platforms, publishers and CTV providers increasingly are complemented by AI applications and new consumer touch points. Additionally, we have partnered with Google's DSP Display and Video 360 on its PAIR initiative. PAIR, which stands for publisher advertiser identity reconciliation, is DV360's answer to 3rd party cookie deprecation and allows advertisers and publishers to securely and privately reconcile their first party data to enable personalized advertising. Speaker 200:17:26Our role is providing the clean room infrastructure that allows advertisers and publishers to securely activate their 1st party data on DV360. PAIR continues to scale adoption with large publishers, including CTV Publishers like NBCUniversal. The early results from PAIR are highly encouraging. Our case study with Omni Hotels and Resorts showed payer campaigns delivered a 4x increase in conversion rate over traditional cookie based targeting in DV360. And we've seen similar results in as of yet unpublished case studies. Speaker 200:18:09A recent analysis of our brands who use PAIR showed that they were able to increase their match rates by 27%. This is meaningful incremental reach that is available today because PAIR is not limited to Chrome, but is available across Safari, Firefox, Edge and CTV inventory. Results like this convince us that the industry should just embrace cookie less alternatives like Pear and ATS and stop fretting about deprecation timelines. But we'll make use of the extra time afforded to all by Google's recent announcement to delay full implementation until after the holiday shopping season. In the coming months, in partnership with Google and others, we will continue to publish case studies and educate the ecosystem so they are ready for full cookie deprecation when it occurs in early calendar year 2025. Speaker 200:19:13As Perris scales, the benefit to LiveRamp should show up in the form of 1st incremental activation from our existing subscription customers and second, new logo opportunities that are doing 1st party data targeting exclusively off third party cookies today. Of course, 3rd party cookie deprecation is certainly a catalyst for the adoption of PAIR. So Google's decision to delay Chrome 3rd party cookie deprecation until early 2025 will have an impact on our PAIR opportunities. We think we've appropriately reflected this in the FY 2025 guidance Lauren will provide today. However, in the medium to long term, we remain well positioned and we think improved advertising performance customers can achieve with payer will ultimately win out. Speaker 200:20:09Finally, our 4th priority for FY 2025 is simplifying LiveRamp for our customers and employees. There's a plethora of coordinated activities that will ultimately simplify our technology and ease of use. We're always working to improve our UIs, simplify and streamline our contract processes, re examine our pricing policies and modernize our technology. 1 of the emerging initiatives is leveraging artificial intelligence, both internally to improve our own productivity and make our products better and externally to help our customers organize and accumulate the data that is the fuel for their own AI models and initiatives. Internally, we are using AI in a number of ways from helping our software developers write code more quickly to helping all LiveRampers find useful information more quickly through an AI powered assistant tool with enterprise search. Speaker 200:21:18More specifically, approximately 15% of our developers are now regularly using AI tools to assist with coding. And on average, these tools have generated an estimated double digit percentage improvement in productivity. We are also incorporating AI into our data collaboration platform and data marketplace that will provide ease of use and accelerated time to value benefits. Offers JetAI powered data queries that can produce reports without requiring SQL coding skills, which makes the platform more usable for less technical business users. In our data marketplace, we are training a proprietary AI model to accelerate our review of the data labels and descriptions provided by data sellers, which is critical to ensuring favorable buyer experience. Speaker 200:22:21Finally, we are using AI with our IV Graph to drive increased accuracy and stability through a more sophisticated understanding of data fragment relationships. Beyond our internal use of AI, the LiveRamp data collaboration platform has a much larger and critical role to play in helping customers use data to propel their own AI initiatives. Our data collaboration and enrichment products and connected partner ecosystem help brand marketers improve the quality, quantity and diversity of customer data used. This customer data is the foundation for training generalized AI models and transforming them into the kind of proprietary models that produce brand specific predictive customer insights such as optimized segmentation, interests, propensities and affinities. Ultimately, these AI powered insights help brand marketers deliver personalized marketing experiences more effectively and efficiently. Speaker 200:23:32In closing, let me reiterate what I believe to be the key themes from the quarter. First, Q4 was a strong finish to FY 2024 with revenue and operating income exceeding our expectations and a positive inflection in several key performance indicators. Notably, the growth in ARR, which is the best leading indicator of our fixed subscription accelerated for a 2nd consecutive quarter to double digits on a reported basis. 2nd, we're not satisfied. As we look ahead to FY 2025, we have an ambitious set goals and priorities that will, if we successfully execute, help us advance toward our goal of being a rule of 40 company. Speaker 200:24:25Finally, we believe we're well positioned against the trends that matter. Our data collaboration platform is well positioned to capitalize on the growing need for secure first party data collaboration to sustain addressable digital advertising. Our platform provides the right capabilities and there are multiple industry megatrends working in our favor, including the shift to cloud computing, the proliferation of AI tools and marketing, growth in new walled gardens in CTV and Commerce Media, and of course, the rise of authenticated addressability over 3rd party signals. Thank you again for joining us today and a special thanks to our exceptional, exceptional customers, partners and to all LiveRampers for their ongoing hard work and support. We look forward to updating you on our progress in the coming quarters. Speaker 200:25:27I will now turn the call over to Lauren. Speaker 300:25:30Thanks, Scott, and thank you all for joining us. Today, I will cover 2 topics. 1st, a review of our Q4 financial results and second, provide our outlook for FY 2025 and Q1. Unless otherwise indicated, my remarks pertain to non GAAP results and growth is relative to the year ago period. Starting with Q4. Speaker 300:25:55We had a strong finish to FY 2024 with revenue and operating income exceeding our original expectations. Revenue came in at $172,000,000 $12,000,000 above our guide and operating income was $16,000,000 $3,000,000 above our guide. Operating margin was 9% and we generated $28,000,000 in operating cash flow in the quarter and $106,000,000 in the fiscal year. Let me provide some additional details. Please turn to Slide 5. Speaker 300:26:28First, as a reminder, we closed the acquisition of Habu on January 31. Consistent with what we shared previously, the transaction contributed $2,000,000 of revenue in the quarter or approximately 2 points of subscription growth and roughly $3,000,000 of expense. As you would expect, it also positively impacted our other revenue metrics. Total revenue was 172,000,000 up 16%, with subscription revenue and marketplace and other significantly ahead of expectations, driven primarily by continued sales execution and a stronger than expected digital advertising market. Subscription revenue was $134,000,000 up 11%. Speaker 300:27:15Fixed subscription revenue was 9% and usage as a percentage of total subscription revenue was 14%, in line with the historical 10% to 15% range. ARR was $467,000,000 up 10%, reflecting a $12,000,000 impact from Habu and continued growth in customer upsell and new logo. Subscription net retention was 103%, 2 points better sequentially and ahead of our expectation. The outperformance was driven in part by Habu and by strong upsell of our clean room and connectivity products. Current RPO or our next 12 month contracted backlog was $414,000,000 up 23%. Speaker 300:28:05Total RPO including contracted backlog beyond the next 12 months was up 20% to $566,000,000 As a reminder, RPO and CRPO are very sensitive to the timing of renewals and to contract duration. And given our focus on large enterprise customers and shift to more multiyear deals, both of these factors again benefited growth in the quarter. Overall, we see some positive and challenges with the current selling environment. Our pipeline continues to build nicely and new logo activity remains strong in Q4, as Scott pointed out. Importantly, our focus on large customers continues to yield results. Speaker 300:28:52In Q4, we added 10 new $1,000,000 plus subscription customers, matching our all time best quarter. That said, our average sales cycle ticked up slightly in the quarter from recent trends of 8 to 9 months. In addition, we continue to experience softness with smaller low ACV customers, both brands as well as technology platforms, including Ad Tech that is experiencing some structural change. Marketplace and other revenue of $38,000,000 increased 38%, driven by data marketplace, which grew 32% and accounted for 78% of marketplace and other revenue. Data marketplace growth was aided by an easy year ago comp as well as a healthy digital ad market with particular strength in CTV. Speaker 300:29:47We also continue to see strong growth in professional services, which accounted for approximately 30% of marketplace and other growth. Moving beyond revenue, gross margin was 75%, flat year on year. Operating expenses were $113,000,000 up 16%, reflecting the acquisition of Habu and higher performance based compensation. Operating income was $16,000,000 up from $14,000,000 a year ago and our operating margin was 9%. GAAP operating loss was 14,000,000 dollars Stock based compensation was $25,000,000 down from $45,000,000 a year ago, which included the accelerated vesting of certain non NEO RSUs for tax planning purposes. Speaker 300:30:37Operating cash flow was $28,000,000 down from $31,000,000 a year ago due to higher cash taxes and working capital. For the full year, operating cash flow was 106,000,000 dollars up from $34,000,000 last year. We repurchased $15,000,000 of stock in Q4, bringing the full year buyback to $61,000,000 We have approximately $157,000,000 remaining under the current authorization that expires in December of this year. In summary, Q4 was a strong finish to the fiscal year, with revenue and operating income exceeding our expectations. Growth in subscription revenue and ARR positively inflected, returning to double digits. Speaker 300:31:26And subscription net retention was comfortably above 100%. Operating margin was stable on a reported basis and on a like for like basis expanded by 1 point. In FY 2024, we generated over $100,000,000 in free cash flow for the first time in our history and returned the majority to shareholders through our share repurchase program. Please now turn to Slides 1213. Please keep in mind our non GAAP guidance excludes intangible amortization, stock based compensation and restructuring and related charges. Speaker 300:32:04Starting with the full year, we expect revenue of between $710,000,000 $730,000,000 up 8% to 11% year on year. Our revenue guidance reflects the continuation of the Q4 momentum in the fiscal first half and slightly slower revenue growth in the second half, given limited visibility into the macro as well as the potential for cookie deprecation to cause some short term disruption among customers. Cookie deprecation is obviously a big change to the digital advertising market and will require the industry and our customers to adapt. We don't have perfect visibility into how and when our customers adapt, particularly in the near term. We see both opportunities and risks associated with cookie deprecation and the wider than normal range on our revenue guide reflects this. Speaker 300:33:02We expect subscription revenue growth to accelerate to the high single digits and fixed subscription revenue is expected to grow high single to low double digits. Subscription usage revenue is forecasted to be roughly flat year on year. We also expect Our outlook for subscription revenue assumes net retention remains within a range of 100% to 105%, broadly consistent with the recent trend. As Scott discussed, we have several initiatives underway to improve customer retention and we would hope net retention will improve as the year unfolds. For now, however, this is not embedded in our guide. Speaker 300:33:53We expect marketplace and other revenue growth to be between low double digits and mid teens. Underpinning this estimate is an expectation that data marketplace growth will be in line to above the growth in the overall digital ad market. We expect a gross margin of approximately 75%. We expect non GAAP operating income of between 125 $1,000,000 and $129,000,000 At the midpoint, this represents 21% growth and a margin of 18%, up approximately 2 percentage points. Operating expenses are expected to increase mid to high single digits, of which the Habu acquisition accounts for approximately 3 points. Speaker 300:34:40The remaining growth reflects investments in our sales force, cloud strategy and scaling our partner network, partially offset by incremental savings from our offshoring initiatives. We expect stock based compensation to be $116,000,000 up from $71,000,000 last year. The year on year increase is primarily driven by 2 items. First, dollars 23,000,000 from the normalization of accelerated vesting in FY2023 and second, dollars 12,000,000 associated with the Havu acquisition. We expect GAAP operating loss to between $8,000,000 $4,000,000 Lastly, we expect to return a significant portion of our FY 2025 free cash flow to share owners through our share repurchase program. Speaker 300:35:29We expect to spend approximately $15,000,000 per quarter depending on market conditions. We believe this is a great investment and will largely offset the impact of forecasted dilution. Now moving to Q1. We expect total revenue of $172,000,000 non GAAP operating income of $25,000,000 and an operating margin of 15%, up 100 basis points year on year. A few other call outs for Q1. Speaker 300:35:59We expect subscription revenue to be up roughly 10% and marketplace and other revenue to be up high teens year over year. We expect Q1 gross margin to be approximately 74% and we expect stock based compensation to be approximately 29,000,000 dollars Before opening the call to questions, I'll conclude with a few final thoughts. First, we had a very strong Q4, ahead of our expectations on both the top and bottom line, demonstrating improved sales execution against the backdrop of healthy ad market and our continued commitment to efficient growth. Q4 revenue growth returned to double digits, including low double digit subscription growth. For the year, we produced over $100,000,000 in free cash flow and returned the majority to shareholders through our buyback. Speaker 300:36:55And finally, FY 2025 will be a year of improved subscription growth compared to last year and continued margin expansion. Our revenue guidance reflects a continuation of the Q4 momentum in the fiscal first half and slightly slower revenue in the second half, mostly in the name of conservatism. The swing factors within the revenue range will be first, the health of digital ad markets as it relates to our variable revenue streams 2nd, sales execution, particularly with the assumed improvement in bookings driven by Habu in the second half. And third, customer churn and down sell relative to the modest improvement assumed in our guide. With that, on behalf of all LiveRampers, thank you for joining us today and thank you to our amazing customers. Speaker 300:37:46Operator, we will now open the call to questions. Operator00:37:51Thank you. The floor is now open for questions. Your first question comes from the line of Shyam Patil of Susquehanna. Your line is open. Speaker 400:38:11Hey guys, congrats on the nice results. I had a couple of questions on Habu. First one, can you elaborate on the integration and the customer's response relative to your initial expectations? And then second one, can you remind us of your financial targets for AHU in fiscal 2025? Thank you. Speaker 200:38:34Yes, Sean. In terms of Haboo integration progress, we've done this a few times now and we think we're pretty good at it. And it's complex, so I'll talk about a few different pieces. First off and most importantly is always the people integration. And there we've had 100% migration of Habu employees over to LiveRamp. Speaker 200:38:59And I'm really pleased. I mean this is an injection of world class talent and fresh ideas, which is great for our company, because it brings new thinking, but it also energizes our legacy team. It's also given us some bench strength. And if you look at the Habu leadership team, many of them have already taken on expanded roles within LiveRamp and others of them have taken on brand new challenges. And an example I would give is Matt Kilmartin. Speaker 200:39:31He's just a brilliant CEO, talented entrepreneur and the acquisition has kind of freed him from the day to day management grind. So we're using his entrepreneurial skills to tap in. He's going to lead the charge on new use cases and verticals. And as you know, Shyam, this is something we've talked about for a couple of years now, but we haven't ever made as much progress as we would like, outside of advertising and marketing. And so we feel like we have a good product. Speaker 200:40:02We got, with some small configuration or maybe some slight design mods. It's extendable to all kinds of other use cases. We just need someone smart and entrepreneurial thinking about it all the time and driving the charge. And so Matt's going to do that. So very excited about the people integration. Speaker 200:40:22The second big piece that is very visible to our clients is the product integration. And there I'm really pleased. I mean Haboo has done a great job of building simple yet elegant technology. And because we were starting to think about the technology integration well before we announced the deal, this was a pretty easy lift. As importantly, we brought in an influx of talented engineers who can look at our architecture and product design for the first time with fresh eyes. Speaker 200:41:03The CTO over at Habu, a guy named Roopak Gupta, I mean, he's just brilliant. And the conversations that we've had together is, I've said Roopak, challenge everything, because that fresh thinking is going to make us better and the intersection of Haboo's technology with LiveRamp's thinking is going to lead to a better outcome for our clients. The 3rd piece, which comes after the first two is pipeline. And here, it came pretty quickly because literally within a month of the deal, we had created $30,000,000 of pipeline. We're now up to $40,000,000 I would tell you, clients are intrigued. Speaker 200:41:47And I've spoken to a handful of our very largest clients. I've heard nothing but good things. And then because we've done the first three right, I think performance comes next. And I would tell you that we're on track with the deal model. Lauren can talk about that, unpack that a little bit more detail. Speaker 200:42:07But as importantly, we have really strong line of sight to what we need to do. And we're ensuring through pretty aggressive project management that our teams are moving fast and we're removing the obstacles in front of them. I don't know. What did I miss, Lauren? Speaker 300:42:26Yes. Hi, Shyam. With respect to the second part of your question on our financial targets, as we shared in the call, we added about $12,000,000 of ARR in Q4, which you can think about as the inorganic contribution to growth in 2025. We continue to target $18,000,000 of revenue in 2025. Again, this is a synergized number, so inclusive of a few million of synergies from cross sell in the back half of the year. Speaker 300:42:57A point I would make and Scott just made it as well, but Habu is being fully integrated into our platform and given the strong opportunity for cross sell of LiveRamp products alongside Habu, drawing the line between LiveRamp and Habu will become increasingly challenging as we move through the year. And then just a final point on the bottom line, we continue to target breakeven on an op income basis, which equates to about a point of dilution on op margin in Speaker 400:43:312025. Great. Thank you, guys. Operator00:43:34Your next question comes from the line of Jason Kreyer of Craig Hallum Capital Group. Your line is open. Speaker 500:43:43Wanted to stick with Habu. We've talked about that the last couple of months as kind of being a plug and play solution for smaller marketers. So just curious any updates on that, any progress with smaller customers in the quarter or what we should anticipate for the evolution of that, that being a better solution for that lower end of the market? Yes. Speaker 200:44:03I mean, that's certainly part of our pipeline and no particular updates in terms of new clients to share that I didn't talk about in my prepared remarks. So I feel pretty good about that. I ultimately think one of the bigger catalysts is still out in front of us. I believe that when we get across the finish line on cookie deprecation, that's going to be the biggest catalyst that we've seen for adoption of a data collaboration platform because you need 1 in order to activate in DV360. And DV360 is the market share leader along with Amazon's DSP. Speaker 200:44:46It drives the most tonnage on most media plans. So most advertisers are going to have to embrace what we do if they want to avoid disruption in their advertising efforts. So we're a little bit bummed about the slowdown in deprecation probably most so because having planned for this for 5 years, I just want it behind us and to start talking about the glorious future as opposed to what's to come. But I think all good things in store for the future of clean rooms. Speaker 500:45:26Thanks, Scott. And then like a month ago, Google announced that they're moving pair to an open source platform in conjunction with the IAB. Just curious if there are any implications there? I'm wondering if this kind of broadens the reach of Pare by expanding the developer network and making it available to more developers, but curious your thoughts on the opportunity. Speaker 200:45:51Well, we'd sure like to think so. I love the fact that Google open source that and put the hands put it into the hands of the IAB. The more standardization that there is around adoption of authenticated ways to buy, bifurcated consents at both the buyer and seller side. That's the future is to get consented users. And so the more that that can take wing, not just with Google, but with major CTV players with all the social media platforms, it's just better for the entire industry. Speaker 200:46:34It fuels more standardization and we've seen the great returns that you get through Pear. It's pretty significant lift, not just for advertisers, but also for publishers in terms of their yield. So everything that Google can do to spread adoption is something we're cheering for. And I should also just say, I mean, a big chunk of our summer here at LiveRamp is going to be spent out in the road evangelizing. We'll take use of the extra time Google afforded with their pair deprecation timeline to educate and evangelize the offering in the market, in many cases with Google. Speaker 200:47:12So we'll be doing some stuff with them at Cannes in next month. And just a lot of roadshows, seminars, things like that to ensure that the market's ready. Operator00:47:32Your next question comes from the line of Elizabeth Porter of Morgan Stanley. Your line is open. Speaker 600:47:38Great. Thank you so much. I just wanted to follow-up on your comment about kind of the bigger catalyst being data collaboration and really needing it for DV360. I understand that the time line to recognize some of this opportunity has been pushed out a bit. But any sort of framework you're providing in terms of how to think about sizing the opportunity tied with payer and how that could impact LiveRamp? Speaker 200:48:02Yes. Well, first off, Elizabeth, and I'm sure that Lauren can dive into this a little bit more. I would tell you, if you look at our guidance, I mean, we're being what we think is appropriately conservative with respect to payer. And with the timeline now really shifting into the last quarter of our fiscal year, so that January to March timeline. Yes, we won't see a huge impact of it in our year this year, but we've been very what we think appropriately conservative because there's just going to be gazins and gazouts. Speaker 200:48:46Remember that you have an entire industry that was built on cookies and has operated on them for the last 30 years. And we got 9 months to get them fully ready for the cutover. And my guess is we'll be pretty successful with advertisers, but there's probably going to be a lot in the industry who won't be ready. And so it'll be interesting come next calendar Q1 to see how that plays out. It wouldn't surprise me if there is a stall as folks figure out what they're doing operationally before there's an acceleration. Speaker 200:49:27That said, as you know Elizabeth, we're out in the market telling folks not to wait, because the same techniques that can be utilized in PARE, it's just an extension of what folks are doing in cookies today, but it gets you pretty significant incremental reach because it allows you to reach the consented users on Firefox and Edge and Safari. And that drives a pretty significant increase in performance. So we're going to try really hard to prepare the industry and get them converted well before next Q1. But I think it's a little bit unpredictable. Now the last thing I would say is initially, we think that we'll see the first impact on just usage because people will switch from cookies to true authentication and everything that they do. Speaker 200:50:33It will make our existing clients even stickier. It might drive some incremental usage. That's particularly true as authenticated methods extend to the major CTV providers. But then the next catalyst will really be not seen in our subscription usage as much as just clean room adoption. We think that virtually everybody is going to need to have a clean room to do the kind of advertising addressable advertising that they've grown used to. Speaker 200:51:08And that should be a catalyst for us both in the U. S. To win potential new clients, but then also internationally where in many cases Google's market share internationally, DV360's market share internationally is much higher than it is here in the U. S. Speaker 600:51:28Great. Thank you so much. And just as a quick follow-up, it was good to see the new logos start to increase quarter over quarter after being flat to down earlier in the year. So could you just talk about kind of where are the incremental kind of customers coming from? Is this momentum with cloud partners, kind of HABU? Speaker 600:51:44And how should we think about just the durability of net adds? Speaker 300:51:48Yes. Hi, Elizabeth, Lauren here. Great question. And as we've mentioned in the past, there are a lot of moving pieces roughly stable in Q4 and the trends that we have been seeing in recent quarters played out again in Q4, which is continued strength in high ACV brand customers, partially offset by continued pressure with lower ACV customers, particularly in the ad tech cohort. As we look ahead to FY 2025, we would expect overall customer count to be somewhat muted, again given the dynamics that I just mentioned. Speaker 300:52:36That said and we've discussed this in recent quarters, we have shifted our sales focus to larger higher LTV brand customers over the past year plus and you really see that play out in metrics like our $100,000,000 customer count, which grew nicely in FY 2024 and we would expect to continue to grow nicely into FY 2025. Speaker 600:53:00Great. Thank you so much. Operator00:53:03Your next question comes from the line of Mark Zutowicz of Benchmark. Your line is open. Speaker 700:53:09Thank you. Hi, Scott and Lauren, congrats on an exceptional quarter. Just a couple of questions from me. On the pipeline $30,000,000 I guess $40,000,000 now since the Haboo acquisition. I'm curious if you think about what's driving that, maybe just a split between demand for walled garden, self-service, cloud interoperability from your existing clients versus new verticals, accelerating subscription outside of retail and CPG, if you could maybe provide some color there would be helpful? Speaker 200:53:47Yes, it really is both. So if I think back a year or 2 years ago, we obviously had a lot of success powering the retail media networks. But even in my prepared remarks, the examples that I gave went beyond retail. So I talked about a pharmaceutical, for instance, company and we're also doing some really interesting things in travel. And not surprisingly, some of the most interesting things that we're starting to talk about and you're starting to see are actually in the entertainment space. Speaker 200:54:31It's the case that as you think about a world that increasingly first party data is going to be really important, well, who has great sources of first party data? The major publishers, and they're not all named Google and Facebook. You think about all of the CTV providers that you authenticate every time you log in, they have deep viewership information, and they know a lot of demographic information as well. And so kind of the clean room capabilities that any advertiser can spin up with those destinations is pretty powerful. So I think retail and packaged goods gave every other industry a roadmap to follow here. Speaker 300:55:23And Mark, maybe just to put, some additional color against that. If we look at the collaboration or clean room deals we won in Q4, about half were with retail and CPG, but half were with the companies that Scott just mentioned, so publishers, travel and entertainment companies, automotive companies, healthcare. And if we look at the composition of our pipeline and the pipeline created, it kind of mirrors that split. Speaker 700:55:54Got it. That's helpful. And maybe on the new verticals, is it too early to start talking about potential sizable TAM expansion here outside of the CPG and retail meeting? Do you have adequate sales capacity to sort of address these newer verticals? Is that expanding? Speaker 700:56:15Will that sort of TAM expand as you add more capacity there? Or what is that just a learning curve more with those industries that just takes time? Speaker 200:56:25I feel really fortunate. I think we're a little bit ahead of this one because if you recall a couple of years ago during the great resignation, we really saw a big exodus for a short period of time to our sales force. And we used that opportunity when we backfilled to remake our sales force. We actually created vertical industry groups. So now we have a retail group. Speaker 200:56:58We have a financial services group. We have experts in travel. And that's so important. When LiveRamp was formed, we used to be able to go in and wow people just talking about the But now increasingly, particularly given the fact that we have higher level audiences within the clients we're calling on, oftentimes it's the CMO or the CEO. We have to go in and talk in their language. Speaker 200:57:28We have to understand how does the airline Speaker 800:57:30industry work for example, how Speaker 200:57:30do airlines make money in future, personal entertainment devices that you use in personal entertainment devices that you use in flight. And so by hiring that way for the last couple of years, I think it's actually improved our sales productivity and actually driven some of the success we're seeing in these new verticals. Speaker 700:57:59Sounds great. Thanks very much. Appreciate it. Speaker 300:58:02Thanks, Mark. Your Operator00:58:04next question comes from the line of Kirk Materne of Evercore ISI. Your line is open. Yes. Speaker 800:58:11Hi Scott. Hi Lawrence. This is actually Peter Berkley on for Kirk. I'll echo my congrats on a really nice quarter. Speaker 200:58:17Thanks, Peter. Speaker 800:58:19So a lot of like here, Couple of metrics that really stood out to us, the large customer growth, dollars 1,000,000 customers and then the NRR acceleration. So Scott, maybe I'm hoping I can start with you just on large customer growth. Does this feel like a broader opening up of wallets dynamic? Or is this reflective of the strong momentum in the data collaboration platform, which are generally larger deal sizes? And then Lauren, maybe just as the second one. Speaker 800:58:49On the NRR metric, understanding the color on HABU's contribution and assuming the large customers are acting as a tailwind here. But I'm curious the sort of pressure on the NRR has been contraction at the lower segment of the market of your customer base and sounds like that's sort of continuing on. But I'm just curious given the acceleration and kind of the go forward color, does it feel like that sort of stabilizing or perhaps even inflecting just in terms of that lower customer contraction and just a little bit more trouble at the low end? Thanks. Speaker 200:59:25Yes. So Peter, I'll start with the first. If you looked at our cohort of largest clients, these $1,000,000 plus a year spenders, I think you would recognize almost every single one of them as being kind of major advertisers, brands that you trust, really strong consumer brands. And we did a detailed analysis of we did a big customer segmentation about a year ago. And what we found is that those sophisticated large The The churn rate for those is significantly less. Speaker 201:00:15But the most interesting insight was the number of activations that they had. And for the largest clients, I can't remember exactly the number, but it was in excess of 18 activations that they had. And when you have 18 activations, you're lighting up different destinations, maybe point of sale, certainly a lot of different properties. You're a lot more sophisticated about what to do with your data. You probably are much more likely to want to have a clean room and set up data collaboration with partners. Speaker 201:00:57You're certainly much more likely to want measurement back. And so they just start becoming power users. And so I don't think it's a function of the macro or budgets becoming easier to get or anything like that. I think it's just a function of those are more sophisticated companies. They've learned how to use their data effectively and they're trying to do even more with their data. Speaker 201:01:30Our challenge internally is how do we get some of our smaller companies to look more like those big companies. So we're kind of laser focused on making sure that everybody activates more destinations on their media plan, which is going to lead them to adopt more usage with us. Speaker 301:01:53And Peter, with respect to your question on NRR, I will just again point out that Habu contributed a couple of points to NRR in the quarter. Outside of that, we are seeing some stabilization with our lower ACV customer cohort. But the bigger driver continues just to be stronger contribution from upsell with our largest customers as they adopt clean room and collaboration use cases. Speaker 801:02:23Very helpful. Thank you both. Speaker 101:02:24Operator, we have time for one more question. Operator01:02:28Your last question comes from the line of Brian Fitzgerald of Wells Fargo. Your line is open. Speaker 201:02:33Thanks. Scott, I want to follow-up on your Pairs commentary. Obviously, there are thousands of DV customers out there, and it seems like DV360 customers need to use Pairs to target ads off of 1st party data and measure performance after deprecation. Has Google built 3 tools to access payer via data hubs or otherwise? It seems like you are far and away the most important partner for Google's messaging about pairs, the announcement with NBCU and so on and customers more or less need to adopt. Speaker 201:03:12Is that a correct way to view the opportunity expansively? Or are there other considerations, free tools, more clean room partners likely to be named over time? Any other reason to look at it more conservatively? I'm sure that there will be more partners over time. We were fortunate to be one of what are now 2 launch partners Haboo, LiveRamp and then there was a third. Speaker 201:03:41So we actually comprised 2 thirds, I guess, of the original launch partners for this. And the deal is they're not building the technology, rather they're mandating that someone who does pairing has a clean room partner. Google wants to be agnostic in this And they want to ensure that someone can ensure that on both sides, the consents have been obtained and handle the security and anonymization that occurs. Now all that said, I would tell you anecdotally that it felt like for a long time we were having a lot of conversations with the Google product team. And we were really involved going back and forth with suggestions around their design and doing a lot of process mapping. Speaker 201:04:36Since January, the switch has really flipped on with the Google commercial teams. As for example, they invited me to come speak to their sales leadership in New York about a month ago. And likewise, their AdPlat sales leader came and spoke to LiveRamp's entire sales organization when we had our sales kickoff a few weeks ago. We're going to be out in market with them educating and evangelizing. I mentioned we'll do some stuff with them at Cannes, which is coming up here in a couple of weeks. Speaker 201:05:20And then we have a lot more things planned to educate and evangelize. I think the biggest barrier here isn't the technology at all. It is just kind of the inertia of 30 years of people using cookies and just educating them that there's a better way. And although it requires a process switch and that may be painful, As soon as you do it, you unlock better results. So that will be the key messages you'll hear both from Google and from us in the coming months. Speaker 201:05:57Got it. Appreciate it. Operator01:06:03I'll now turn the call back over to Lauren Dillard for closing remarks. Speaker 301:06:08Thanks so much. So in closing, we ended FY 2024 on a high note with both revenue and operating profit outperforming our original expectations. As we look ahead, FY 2025 will be a year of improving subscription growth and continued margin expansion. Our revenue guidance reflects a continuation of the Q4 momentum in the fiscal first half and slightly slower revenue growth in the second half, mostly in the name of conservatism. With that, thanks again for joining us today. Speaker 301:06:37We look forward to updating you on our continued progress in the quarters ahead. Operator01:06:43This concludes today's conference call. 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