LiveRamp shares rally 9% after announcing upside guidance, acquisition of Habu
LiveRamp (RAMP), a leading data collaboration platform, provided upside guidance for the third quarter of fiscal year 2024). The company expects revenue of approximately $174 million, surpassing Street expectations of $165.32 million. This growth is attributed to strong performance from both Subscription and Marketplace & Other revenue streams.
Shares rallied in react ion to the news and are now challenging critical resistance at the 200-weekl;y moving average.
LiveRamp anticipates a non-GAAP operating income of approximately $36 million, exceeding the company's previous estimate of $29 million.
In a strategic move to enhance its data collaboration capabilities, LiveRamp has entered into a definitive agreement to acquire Habu, a data clean room software provider, in a cash and stock transaction valued at approximately $200 million.
The acquisition aims to accelerate RAMP"s ability to offer global data collaboration at scale, facilitating seamless data connectivity across all clouds and walled gardens.
Habu's technology enables secure sharing of first-party customer data, allowing global brands and media companies to collaborate with business partners and publishers.
The combination of LiveRamp and Habu will overcome structural challenges by creating interoperability across various data environments while upholding privacy and governance protocols.
The transaction will be valued at approximately $200 million, with $170 million in cash to be paid at closing. The remaining consideration will be in the form of LiveRamp stock related to unvested stock awards and holdback agreements with certain key employees, which will vest in future periods. In addition, around $16 million of restricted stock unit awards will be extended to continuing employees for retention purposes.
These developments come alongside LiveRamp's impressive financial performance in the third quarter of fiscal year 2024. The company's preliminary results indicate revenue of approximately $174 million, reflecting a 10% year-on-year increase and surpassing its earlier expectation of $165 million. Non-GAAP operating income is estimated to reach approximately $36 million, exceeding the previous expectation of $29 million.
As investors consider LiveRamp's investment potential, they should carefully evaluate the company's ability to capitalize on the growing demand for data collaboration platforms and its capacity to drive revenue through its diverse revenue streams. Additionally, the successful integration of Habu's technology and the ability to expand its customer base will be critical factors contributing to LiveRamp's long-term success.
Disclaimer: The information provided in this article is for informational purposes only. It is not intended to be investment advice and should not be construed as such. Investors should always conduct their own research and analysis before making any investment decisions.