The RAMP (NYSE: RAMP) “AI vs. Core Growth” Question: Infrastructure or Illusion?

LiveRamp wants to be the data backbone for the AI revolution, but the Q2 fiscal 2026 results were a reality check on the core business. The core engine is sputtering: subscription growth slowed to just 5%, net retention dipped, and EPS missed significantly ($0.42 vs. $0.51 consensus), overshadowing a revenue beat ($200M, +8% YoY).

Management’s narrative fix? Double down on data collaboration and AI infrastructure. The critical question: Is this a strategic pivot or a desperate attempt to mask a decelerating core business?

The "Marketplace & Other" segment—RAMP’s AI bet—grew 18% YoY. This validates the demand for clean, privacy-safe data pipelines. GAAP operating income surged 186%, demonstrating leverage when the model works. But the subscription business, which accounts for the majority of revenue, is clearly facing churn and pricing pressure in the post-cookie environment.

The bull case: AI models desperately need RAMP’s identity graph. If Marketplace reaches 30%+ of the revenue mix by 2027, growth re-accelerates to 15%+. The bear case: AI is a buzzword, not a moat. The core slowdown is structural, costs will bloat, and the stock retests $25. This is a transition play. Q3 net retention will be the critical tell.

The Filing

• Nov 5 10-Q: $200M revenue (+8% YoY).

• Subscription: +5%, NRR dipped.

• Marketplace & Other: +18%.

The Context

• EPS miss: $0.42 vs. $0.51 consensus.

• Op income: +186% YoY.

• Stock -30% YTD.

The Sharper Take

• Bull: Marketplace = AI data moat, 30%+ mix by 2027.

• Bear: Core churn + AI hype = margin squeeze.

Investor Action

1. Monitor the Subscription Net Retention Rate (NRR) closely in Q3; a continued dip below 100% signals underlying core weakness.

2. Track the revenue mix shift; faster growth in Marketplace is needed to validate the AI infrastructure pivot.

3. Evaluate Q3 EPS performance to ensure the cost of driving Marketplace growth is not eroding overall profitability