RAMP

LiveRamp has crossed from a perennial GAAP money-loser into a durable cash machine. Revenue rose to $813M (+9%) and, more importantly, operating income reached $83.5M (10.3% margin) versus a near-breakeven prior year, on a strong 70.7% gross margin — this is the third straight year of improving operating economics, not a one-off. Operating cash flow of $168M against just $1.38M of capex implies roughly $166M of free cash flow, a ~7% FCF yield on the $2.25B market cap. The balance sheet is a fortress: $380M cash, $972M equity, liabilities/equity of only 0.15x, and no meaningful debt (the long-term-debt and current-debt tags shown are stale FY2015/FY2019 figures). Management is converting that cash into per-share value aggressively — $195M of buybacks shrank the share count 7.5% to 60.1M.

A critical caveat on quality: the headline net income of $146M and $2.24 diluted EPS (and thus the 16.7 P/E) are flattered by a large below-operating-income benefit — net income ($146M) far exceeds operating income ($83.5M), pointing to a one-time tax/valuation-allowance release rather than recurring earnings. Do not anchor on that P/E. The honest valuation lenses are P/S of 2.8x and roughly 13.5x free cash flow for a 70%-gross-margin, recurring-subscription business compounding revenue ~9–13% annually since FY2022 ($529M→$813M). For that profile, neither multiple is demanding, and the buyback provides a steady per-share tailwind.