LiveRamp Holdings, Inc. (RAMP) - Q1 2027 10-Q Summary
Business Context and Reporting Period
This report covers the quarterly period ended June 30, 2026 (Q1 of fiscal year 2027). LiveRamp is a leading data collaboration technology company operating a single segment. The quarter was significantly defined by the announcement of a pending merger with a subsidiary of Publicis Groupe S.A. on May 16, 2026, at a price of $38.50 per share in cash.
Key Financial Metrics
| Metric | Q1 2027 (Ended June 30, 2026) | Q1 2026 (Ended June 30, 2025) |
|---|---|---|
| Revenue | $214.0 million | $194.8 million |
| Gross Profit | $150.9 million | $136.5 million |
| Gross Margin | 70.5% | 70.1% |
| Operating Income | $20.2 million | $7.2 million |
| Net Earnings | $17.5 million | $7.7 million |
| Diluted EPS | $0.28 | $0.12 |
| Operating Cash Flow | $17.0 million | ($15.8 million) used |
| Cash & Equivalents | $363.5 million | $363.6 million |
| Debt | None reported | None reported |
Material Changes vs. Prior Period
- Revenue Growth: Revenue increased 9.8% year-over-year, driven by 8.1% growth in Subscription revenue and 15.4% growth in Marketplace and Other revenue.
- Profitability Surge: Operating income more than doubled to $20.2 million (9.4% margin) from $7.2 million (3.7% margin), primarily due to gross profit expansion and controlled operating expenses.
- Expense Management: Total operating expenses remained flat at $130.8 million. R&D and G&A expenses decreased due to lower stock-based compensation, offset by increased third-party marketing and event costs in Sales & Marketing.
- Merger Charges: The company recorded $6.5 million in acquisition-related charges (legal and professional fees) within "Gains, losses and other items, net," compared to $0.4 million in the prior year.
- Cash Flow Improvement: Operating cash flow turned positive at $17.0 million, reversing a $15.8 million outflow in the prior year, largely due to improved working capital management.
Guidance, Outlook, and Risks
- Pending Merger: The company is in the process of merging with Publicis. The deal is expected to close by the end of calendar year 2026, subject to shareholder approval (scheduled for August 2026) and regulatory clearance. Upon closing, the stock will be delisted.
- Capital Allocation: Share repurchases under the $1.5 billion program have been paused pending the merger completion. The company has $244.2 million remaining capacity under the program.
- Key Metrics: Annualized Recurring Revenue (ARR) grew 7% to $539 million. Subscription Net Retention (SNR) was 103%. Remaining Performance Obligation (RPO) was $685 million.
- Risks: Significant risks include the potential failure or delay of the Merger, customer contract terminations due to change of control, and regulatory scrutiny regarding data privacy and antitrust. The company also faces ongoing litigation regarding consumer privacy (Riganian et al v. LiveRamp).
Investor Verification Checklist
- Verify the status of regulatory approvals and the timeline for the August 2026 shareholder vote on the Publicis merger.
- Confirm the treatment of outstanding stock options and RSUs under the Merger Agreement (conversion to restricted cash awards).
- Monitor the impact of the $6.5 million merger-related charges on future quarters and the potential for additional transaction costs.
- Review the details of the pending class action lawsuit (Riganian et al) and any potential accruals for damages.
- Assess the sustainability of the 70.5% gross margin given the noted increase in cloud infrastructure costs ($6.0 million increase).