Insider Brief
- LiveRamp®, a leading data collaboration platform, announced the acquisition of Habu, a data clean room software provider, for approximately $200 million in a cash and stock transaction, aiming to enhance global data collaboration capabilities across all clouds and walled gardens.
- The acquisition will integrate Habu’s technology, enabling secure sharing of first-party customer data among businesses and publishers for more effective marketing, and solving structural challenges by connecting and making data interoperable while maintaining privacy.
- LiveRamp will use the acquisition to streamline cross-cloud collaboration, provide a unified view of measurement across various platforms, and expand its data collaboration network.
PRESS RELASE — SAN FRANCISCO/January 17, 2024 — (BUSINESS WIRE) — LiveRamp® (NYSE: RAMP), the leading data collaboration platform, today announced that it 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 will further accelerate LiveRamp’s ability to offer global data collaboration at scale, across all clouds and walled gardens, solving fundamental challenges for customers while also unlocking powerful measurement and analytics use cases.
Global brands and media companies use Habu’s technology to securely share first-party customer data with business partners and publishers to enable more effective and personalized marketing.
Companies are overwhelmed with data and even the most sophisticated companies find it challenging to fully realize the value of their data. Today, data still sits in operational silos, making it difficult to leverage internally and even more so with external partners. The combination of LiveRamp and Habu solves these structural challenges by connecting data and making it interoperable across all clouds, walled gardens, and clean room environments while maintaining privacy and governance protocols.
“LiveRamp enables next-generation data collaboration that delivers unmatched brand and business value. Through this acquisition, we will further empower our customers to unlock insights, use cases, and revenue streams by seamlessly connecting data and deepening measurement, across any platform or partner they prefer,” said Scott Howe, CEO of LiveRamp. “Habu shares our vision, and together, we will help more global enterprises benefit from the transformative power of data collaboration.”
The Habu acquisition will allow LiveRamp to deliver differentiated capabilities to customers to:
- Streamline and simplify cross-cloud collaboration by seamlessly connecting data across clouds, warehouses, and clean rooms while reducing complexity and IT infrastructure constraints.
- Achieve a first-of-its-kind, single view of measurement across any walled garden, programmatic channel, or media partner, including media networks and all major CTV and TV platforms.
- Access enhanced enterprise identity and connectivity solutions to break down data silos and navigate signal loss and evolving privacy regulation with confidence.
- Expand LiveRamp’s industry leading data collaboration network, enabling global connectivity to the world’s most scaled network of publishers, walled gardens, retailers, brands, and agencies.
- Advance AI initiatives through greater data access to train and optimize analytical models that inform marketing decisions and enable other enterprise use cases.
Matt Kilmartin, CEO of Habu, added, “LiveRamp and Habu approached the data collaboration market with two complementary strategies that share the common goal of creating the largest data collaboration network rooted in privacy. As we look ahead to our next chapter as part of LiveRamp, we’re as committed as ever to our mission of paving the way for the next frontier of responsible data collaboration.”
The Habu team will help lead LiveRamp’s data collaboration strategy, reporting to LiveRamp’s Chief Revenue Officer, Vihan Sharma.
To learn more about LiveRamp’s acquisition of Habu, please visit this website.
Shareholder Value and Financial Impact
Under the terms of the agreement, LiveRamp will acquire Habu for approximately $200 million, subject to customary adjustments, consisting of approximately $170 million in cash to be paid at closing and the remaining consideration in the form of LiveRamp stock related to unvested stock awards and holdback agreements with certain key employees that will vest in future periods. In addition, approximately $16 million of restricted stock unit awards will be extended at closing to continuing employees for retention purposes.
The addition of Habu will extend LiveRamp’s lead in data collaboration, driving accelerated growth and value for LiveRamp shareholders in the form of:
- Greater cross-sell and upsell. The combined capabilities will unlock several powerful and new cloud and walled garden clean room use cases for existing customers. In addition, it will provide the opportunity to extend LiveRamp’s core identity and connectivity products across a rapidly scaling collaboration network, driving additional usage of the LiveRamp platform.
- New customer acquisition. Offering a simple, cross-cloud user interface and enhanced self-service capabilities will enable LiveRamp to better address a broader set of customers, including non-technical mid-market organizations.
- Global expansion. Habu’s network of walled garden and premium publishers span 200+ markets globally, which will accelerate LiveRamp’s international expansion efforts.
- New use cases across the enterprise. Frictionless cross-cloud capabilities will enable new data collaboration use cases outside of marketing, such as supply chain optimization and inventory management.
LiveRamp expects the acquisition, inclusive of revenue synergies, to deliver approximately $18 million in revenue in FY25 and to help accelerate the Company’s progress toward Rule of 40 achievement.
The transaction is expected to be completed in LiveRamp’s fiscal fourth quarter. The transaction is not expected to have a material impact on LiveRamp’s fiscal 2024 revenue and non-GAAP operating income results. The Company expects the transaction to negatively impact GAAP operating income as a result of higher non-cash stock compensation, purchased intangible amortization and one-time transaction related expenses. LiveRamp will provide an updated outlook for the remainder of fiscal 2024 when it releases its complete third quarter results on February 8, 2024.
Evercore is acting as the exclusive financial advisor to LiveRamp, and Baker McKenzie is acting as legal counsel to LiveRamp. Goldman Sachs is acting as the exclusive financial advisor to Habu, and Gunderson Dettmer is acting as legal counsel to Habu.
Preliminary Results for Third Quarter Fiscal 2024
LiveRamp today also provided preliminary financial results for its fiscal 2024 third quarter ended December 31, 2023.
“We had a strong fiscal third quarter, with preliminary revenue and operating income results significantly exceeding our guidance,” said CFO Lauren Dillard. “Additionally, our forward sales momentum continued, giving us increasing confidence as we look ahead to fiscal 2025.”
For the third quarter, the Company expects to report:
- Revenue of approximately $174 million, an increase of 10% year-on-year and ahead of the prior expectation of $165 million. The upside relative to guidance was driven by both Subscription and Marketplace & Other revenue.
- Operating income of approximately $15 million, above the Company’s prior expectation of $8 million.
- Non-GAAP operating income of approximately $36 million, above the Company’s prior expectation of $29 million.
A reconciliation between GAAP and non-GAAP operating income is provided in the appendix to this press release.
This unaudited financial information above is based on preliminary estimates and information as of the date hereof and is subject to revision in connection with the Company’s financial closing procedures and finalization of the Company’s financial statements for its fiscal 2024 third quarter. Actual results for the third quarter may differ materially from these preliminary unaudited financial results.
The Company will provide additional details about its third quarter results on its upcoming earnings call on February 8, 2024.
Conference Call
LiveRamp will hold a conference call today at 2:30 PM PT (5:30 PM ET) to further discuss the acquisition. The conference call will be webcast live on the Company’s website www.investors.liveramp.com and will be available for replay. The conference call is also accessible via telephone by dialing 1(888) 414–4513 or 1(646) 960–0379 for international callers and using Conference ID code 6394771.
A slide presentation will be referenced during the call and is available here.
About LiveRamp
LiveRamp is the data collaboration platform of choice for the world’s most innovative companies. A groundbreaking leader in consumer privacy, data ethics, and foundational identity, LiveRamp is setting the new standard for building a connected customer view with unmatched clarity and context while protecting precious brand and consumer trust. LiveRamp offers complete flexibility to collaborate wherever data lives to support the widest range of data collaboration use cases — within organizations, between brands, and across its premier global network of top-quality partners. Hundreds of global innovators, from iconic consumer brands and tech giants to banks, retailers, and healthcare leaders, turn to LiveRamp to build enduring brand and business value by deepening customer engagement and loyalty, activating new partnerships, and maximizing the value of their first-party data while staying on the forefront of rapidly evolving compliance and privacy requirements. LiveRamp is based in San Francisco, California with offices worldwide. Learn more at LiveRamp.com.
About Habu
Habu is a global leader in data clean room software, enabling companies to benefit from the value of data without the risk. Habu connects data internally and externally with other departments, partners, customers, and providers in privacy-safe and compliant ways for better collaboration, decision making, and results. The Company is headquartered in San Francisco, CA, and Boston, MA. For more information on Habu data collaboration solutions, visit www.habu.com.
