LiveRamp Holdings, Inc.

Good afternoon, ladies and gentlemen, and welcome to LiveRAMP's fiscal 2022 second quarter earnings call. After the speaker's presentation, there will be a Q&A session. If you would like to ask a question at that time, please press star and then the number one on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the call over to your host, Lauren Dillard, Senior Vice President of Finance and Investor Relations.

Thank you, operator. Good afternoon and welcome. Thank you for joining us to discuss our fiscal 2022 second quarter results. With me today are Scott Howe, our CEO, Warren Jensen, president and CFO, and David Pan, our new chief product officer. 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. For a detailed description of these risks, please read the risk factor section of our public filings in the press release. A copy of our press release and financial schedules, including any reconciliation to non-GAAP financial measures, is available at LiveRAMP.com. Also, during the call today, we will be referring to the slide deck posted on our website. At this time, I'll turn the call over to Scott.

Thank you, Lauren, and thanks to all of you for joining us today. We delivered an outstanding second quarter, highlighted by accelerating top line growth, near record net new ARR, and record margins. The market trends we discussed last quarter continue to play out, and momentum is building across all areas of the business. I'll begin today by sharing some highlights from the quarter. and then talk about the opportunity we see to drive sustained high growth and profitability in FY23 and beyond. Second quarter performance. By almost any measure, Q2 was another exceptional quarter. Total revenue grew 22% and subscription revenue was up 23%. Normalizing for the wholesale contraction, Total revenue grew 32%, and subscription revenue was up 35%, a nice acceleration from last quarter. Bookings in the quarter again were strong, and total growth bookings were up more than 30% in Q2 and up more than 40% on a trailing 12-month basis. From a margin standpoint, Our gross margin expanded to 77%, and we remain profitable with operating margin in the double digits. This performance is a reflection of the leverage in our model and demonstrates our continued ability to drive profitable growth at scale. In fact, as a leadership team, one of the key metrics we measure our progress against is the rule of 40, the combined percentage of revenue growth and operating margin. And here, I feel really good about both our recent progress, we were at 36% in Q2, and the opportunity to drive this metric much higher over time, which perhaps is a nice segue to our longer-term outlook. Our opportunity. My confidence in our future has truly never been greater, and I would like to highlight three key investment themes fueling my optimism. First, we are operating from a strong strategic position. LiveRamp's vision is to make it safe and easy for companies to use data. And as we shared last call, it feels like our vision matches the moment we are in. The secular trends propelling our business are only getting stronger and represent a significant market opportunity for LiveRamp. Digital transformation remains a top priority for many, And core to these efforts is establishing a strong customer data infrastructure. Enterprise leaders across every industry recognize that competitive advantage in today's data-driven marketplace requires a safe and efficient way to access, connect, and collaborate with data, not only across their own silos and environments, but across partners. They also need a simple solution to activate that data to power the thousands, thousands of applications that, working seamlessly together, create more holistic, omnichannel customer experiences. Addressability also continues to be an important theme driving recent customer wins. Enabling addressability across the entire digital ecosystem is the linchpin to delivering efficient, personalized, and measurable engagement with consumers. And the breadth and global scale of our identity capabilities is an important differentiator and a key reason companies choose LiveRamp. And finally, use case expansion remains a meaningful opportunity for our business. we believe that marketing and advertising is only the first application for our technology, and medium-term represents a springboard into the broader data ecosystem, including greater support for other enterprise functions, such as commerce, customer service, and support. Next, we have multiple levers for strong, sustained revenue growth. The positive business trends from recent quarters continued in Q2. Demand signals for our products remain strong, and we are executing against the multi-product land and expand strategy that Diego outlined on our last call, which we believe gives us multiple growth levers to pull over the medium to long term. Land. As I mentioned, bookings in the quarter were again strong. and we are making steady progress adding new customers. We added 15 net new customers in Q2 and ended the quarter with 870 direct subscription customers. A few years ago, data activation was the tip of the spear with respect to new logo pursuits. Today, we have multiple product beachheads, which can be sold standalone or packaged as part of a more comprehensive solution. LiveRamp SafeHaven, our data collaboration platform, is a great, a great example of this. Given the strong network effects and the traction we are seeing in retail and CPG, SafeHaven continues to be a growing source of new customer wins for LiveRamp. As a result, we are adding larger, more sophisticated enterprise customers who want to both control and collaborate with data. This is reflected in the average ACV of new brand deals, which in the quarter expanded 23% compared to a year ago. During the quarter, we had a multimillion-dollar new customer win with a global beverage company. As part of its digital transformation, this customer in-housed their media buying measurement and data capabilities. Through our partnership with a major systems integrator, LiveRamp was brought on to help build a safe haven data environment powered by identity that will be used for audience creation, data activation, measurement, and critical business insights. Expand. The breadth of our product capabilities and our ability to deepen current client relationships was also reflected this quarter in the strength of existing client bookings. Approximately 70% of growth bookings this quarter came from expand deals. We continue to see usage increase and our product attach efforts are paying off in the form of cross-sell to new channels and product modules like data collaboration and measurement. This strong enterprise expansion motion was a key driver of our net retention performance and the big uptick in customer deals representing $1 million or more. Subscription net retention was 108%, and we added 10% $1 million customers in Q2, bringing our $1 million-plus customer count to 80. One example of this is an expansion deal we signed with a financial services company that was a new customer to LiveRamp last quarter, highlighted on our last call. Initially, this customer was leveraging our TV measurement product to apply more data to their TV, media, and brand awareness efforts. Seeking to accelerate their performance marketing function, this customer is now using LiveRamp to integrate customer data across their entire media plan, as well as leveraging LiveRamp to power measurement and analytics within their cloud environment. In a matter of two quarters, This customer became a million-dollar client for LiveRamp. Another notable expansion deal was with a top five global food and beverage company that has been using multiple LiveRamp products for the last two quarters. Partnering closely with their cloud provider, GCP, we cross-sold our identity module to enable the enterprise-wide consolidation and resolution of their customer data. These recent wins, and several that weren't mentioned, highlight an early but emerging trend I am very excited about, the growing momentum of our channel partner strategy. This includes ecosystem partners, systems integrators, and increasingly, cloud providers, where a better together approach has taken hold. We help our customers unlock value from their data wherever, wherever it lives. And as more customer data migrates to the cloud, LiveRamp is ensuring that our customers achieve faster returns on their investments reduce fragmentation, and can take advantage of the flexibility and simplicity of using identity in the cloud. Lastly, we are seeing our investment in international begin to pay off and believe we have a long runway for growth here. International growth bookings were up 110% on a trailing 12-month basis. Our global Carrefour deployment is well underway, and we have more than 100 safe haven tenants globally. To summarize, our land and expand model is working, and our new products are winning globally. The third and final theme I'll touch on is our continued operating strength. Warren will discuss our operating performance in more detail. but the strength of our model is evident and gives me a lot of confidence in our ability to drive durable, profitable growth while continuing to invest for the future. As part of our long-term model, we have an operating margin target of 25%. While we remain committed to this target, we also intend to step up our rate of innovation and development velocity because at the end of the day, For LiveRamp, strong results and outcomes come from one source, and that's innovation. You will hear from David Pan, our new Chief Product Officer, in a moment, but I am very encouraged by the initial progress he and the team have made. We're bringing in world-class, senior-level talent. Our operating strength affords us the opportunity to drive continued margin improvement while also reinvesting for future growth. So with that, thank you again for joining us today. And a special thanks to our exceptional customers, partners, and to all live rampers across the globe for their ongoing hard work and support. Fueled by them, we delivered another great quarter in Q2. And we look forward to updating you on our continued progress in the quarters ahead. With that, I'll now turn the call over to David Pan.