Is LiveRamp (RAMP) a Hidden Gem in the Data Collaboration Space?

In an era where data privacy regulations are reshaping the digital landscape, companies that master the art of secure, compliant data collaboration are poised to thrive. LiveRamp Holdings (RAMP) has emerged as a key player in this space, leveraging its Data Collaboration Platform to help enterprises navigate the complexities of first-party data management. But is RAMP a hidden gem worth adding to your portfolio? Let's dissect its accelerating earnings growth, margin improvements, and insider alignment to determine its potential in the high-growth, privacy-first tech sector.

Earnings Growth: A Story of Resilience and Strategic Execution

LiveRamp's Q2 2025 results underscore its ability to scale in a competitive market. Total revenue hit $185 million, a 16% year-over-year increase, driven by 14% growth in subscription revenue ($143 million) and a 23% surge in Marketplace & Other revenue ($42 million). This outperformance is particularly notable given macroeconomic headwinds and the broader tech sector's mixed performance.

The company's non-GAAP operating margin expanded to 22%, up from 20% in Q2 2024, while GAAP operating income rose to $7 million (from $8 million in the prior year). These metrics highlight LiveRamp's operational efficiency, as it balances investment in innovation with disciplined cost management. For context, the S&P 500 Tech Index grew revenue by just 5% year-over-year in the same period, underscoring RAMP's outperformance.

Margin Improvements: A Path to Sustainable Profitability

LiveRamp's margin trends are equally compelling. While GAAP gross margin dipped slightly to 72% (from 74% in Q2 2024), non-GAAP gross margin remained stable at 75%, reflecting the company's ability to absorb cost pressures through pricing power and operational leverage. Non-GAAP operating income surged to $41 million, a 22% year-over-year increase, and free cash flow reached $55 million in Q2 2025.

The company's strategic focus on high-margin subscription services—now accounting for 77% of total revenue—has been a key driver. With Annual Recurring Revenue (ARR) at $483 million (up 13% YoY) and Current Remaining Performance Obligations (CRPO) at $374 million (up 10% YoY), LiveRamp's long-term revenue visibility is robust.

Insider Alignment: A Mixed Signal with Room for Caution

Insider ownership and transactions provide a nuanced picture. As of May 2025, insiders hold 3.4% of RAMP shares, valued at approximately $72 million, indicating meaningful alignment with shareholders. However, recent transactions reveal a mixed bag:
- Mohsin Hussain (CTO) sold $578,000 worth of shares at $33.00 per share, reducing his holdings by 18%.
- Vihan Sharma (CRO) sold $1.4 million in shares at $35.56 per share.
- Timothy R. Cadogan (Director) sold 85,000 shares at $34.00 per share in July 2025.

Despite these sales, insiders executed a net purchase of 596,908 shares in Q3 2025, reflecting confidence in the company's long-term prospects. Stock awards to executives like CEO Scott Howe (3.05 million shares) and CFO Lauren Dillard further align leadership with shareholder interests.

Strategic Positioning in a Privacy-First World

LiveRamp's recent product updates and partnerships position it to capitalize on the shift toward first-party data. The semi-annual update to its Data Collaboration Platform in October 2024 introduced self-service first-party identity graphs and AI-driven audience creation tools, enhancing its value proposition for marketers. Partnerships with AI platforms like Perplexity and Chalice also open new revenue streams by enabling personalized AI experiences on social platforms.

With 125 customers generating $1 million+ in annualized subscription revenue (up from 99 in 2024) and a 107% subscription net retention rate, LiveRamp's customer base is both sticky and expanding. Its $1.3 billion share repurchase program, extended through 2026, further underscores management's commitment to shareholder value.

Investment Thesis: A High-Growth Play with Caution

LiveRamp's financials and strategic initiatives paint a compelling case for its role in the privacy-first tech sector. Its 16% revenue growth, expanding margins, and aggressive share repurchases suggest a company on a strong trajectory. However, the insider selling activity—while not necessarily a red flag—warrants scrutiny. Investors should monitor whether management continues to reinvest in the business and whether the recent net purchases signal renewed confidence.

For risk-tolerant investors, RAMP offers exposure to a high-growth niche with strong tailwinds. However, the stock's valuation (trading at 12x FY25 non-GAAP EPS of $0.51) may appear stretched compared to peers like Adobe (ADBE) or Snowflake (SNOW). A more conservative approach might involve waiting for a pullback or using the company's $1.3 billion buyback program as a catalyst for entry.

Conclusion

LiveRamp is no longer a hidden gem—it's a well-known name in data collaboration. Its ability to grow revenue, improve margins, and innovate in a privacy-first world positions it as a key player in the sector. While insider transactions add a layer of complexity, the company's fundamentals remain strong. For investors willing to navigate the mixed signals, RAMP could offer a rewarding long-term opportunity in a market where data is the new currency.

Final Verdict: Buy for growth-focused portfolios, but monitor insider activity and valuation metrics closely.