LiveRamp's Canela Media Partnership Targets Hispanic Audiences, but Fails to Address Core Growth Deceleration

What happened

LiveRamp announced a strategic partnership with Canela Media, enabling advertisers to access over 30 million U.S. Hispanic audiences via OTT through its data collaboration network. This move aligns with LiveRamp's focus on expanding into high-value ecosystems like CTV and multicultural media, as highlighted in the DeepValue report's emphasis on retail media networks and CTV publishers. However, the report notes that LiveRamp is grappling with slowing ARR growth of 7% and subscription net retention at 102%, with the stock already pricing in moderate expansion. The partnership lacks specific financial terms or evidence that it will materially boost ARR or net retention, representing a typical incremental deal rather than a transformative catalyst. Thus, while it underscores LiveRamp's ongoing platform utility, it does not signal a reversal in the growth deceleration that underpins the cautious investment thesis.

Implication

The partnership may provide incremental revenue from the U.S. Hispanic market, reinforcing LiveRamp's role in data collaboration and its strategy to penetrate emerging media segments. It could support modest usage-based growth in the Marketplace & Other revenue segment, which has been outpacing subscriptions but contributes to gross margin pressure. However, it does not address the core issues of ARR growth deceleration to 7% and subscription net retention at 102%, which are critical for re-rating the stock. Investors should monitor upcoming earnings for signs that such partnerships translate into higher CRPO growth or net retention, but until then, they offer limited upside. Overall, this news reinforces the need for patience, as highlighted in the DeepValue report's 'WAIT' rating, rather than prompting aggressive buying.

Thesis delta

The partnership does not materially shift the investment thesis; the key drivers remain improvements in ARR growth and net retention, which are unchanged by this announcement. Investors should continue to wait for concrete evidence of re-acceleration, such as ARR growth reaching ≥10% or a pullback to ~$20, before considering a more bullish stance.