LiveRamp Announces Third Quarter Results

By: LiveRamp, Inc. via Business Wire News Releases

February 11, 2019 at 16:05 PM EST

LiveRampⓇ (NYSE: RAMP), the identity platform powering exceptional experiences, today announced its financial results for the quarter ended December 31, 2018.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20190211005709/en/

Third Quarter Financial Highlights

Total revenue of $80 million, up 35% compared to the prior year period. Excluding the impact of Facebook, revenue increased 49%.
Subscription revenue of $65 million, up 42%.
Marketplace & Other revenue of $15 million grew 13%. Excluding the impact of Facebook, Marketplace & Other revenue increased 91%.
GAAP loss per share from continuing operations was ($0.20) and non-GAAP earnings per share from continuing operations was $0.03. Earnings benefited from interest income related to invested proceeds from the Acxiom Marketing Solutions (AMS) sale.
Cash flow used in operating activities improved sequentially to $11 million compared to $27 million during the second quarter of fiscal 2019. At quarter end, the Company had cash and cash equivalents totaling $1.5 billion and no debt. LiveRamp expects to pay taxes of roughly $450 million during its fiscal fourth quarter as a result of the gain on the sale of AMS.
The Company completed a $500 million tender for 11.2 million shares, reducing its share count by approximately 14%. Additionally, during the quarter, LiveRamp repurchased 0.4 million shares for $18 million under its $1 billion stock repurchase program. Since inception of its share repurchase program in 2011, the Company has repurchased 22.4 million shares for $439 million, leaving remaining capacity of $561 million.

“This was a landmark quarter for LiveRamp,” said LiveRamp CEO Scott Howe. “During our first official quarter as a stand-alone public company, we received $2.3 billion from the sale of AMS, completed a $500 million share repurchase, and at the same time, delivered a record top-line performance. We are excited about the value we bring to our customers and our role as the neutral and open platform for the safe and ethical use of data across the ecosystem.”

“Land, expand and extend is our way of life,” said LiveRamp President and CFO Warren Jenson. “This quarter, we added 30 new direct customers and meaningfully grew our existing customer relationships. As a result, subscription revenue was up 42%, and our dollar-based net retention rate exceeded 115% for the tenth consecutive quarter.”

Third Quarter GAAP and Non-GAAP Results

The following table summarizes the Company’s financial results for its third fiscal quarter ($ in millions):

	Q3 Fiscal 2019		Q3 Fiscal 2019
	GAAP Results		Non-GAAP Results
		YoY		YoY
Subscription	$65	42%	$65	42%
Marketplace & other	$15	13%	$15	13%
Total Revenue	$80	35%	$80	35%

Gross profit	$45	31%	$51	24%
% Gross margin	56%	(200 bps)	64%	(590 bps)

Operating loss	($48)	nm	($11)	nm
% Operating margin	(60%)	(1,340 bps)	(14%)	(710 bps)

Net earnings (loss) from continuing operations	($15)	nm	$2	nm
Earnings (loss) per share	($0.20)	nm	$0.03	nm
Net cash used in operating activities	($11)	nm	($11)	nm
Free cash flow	nm	nm	($13)	nm

A detailed discussion of our non-GAAP financial measures and a reconciliation between GAAP and non-GAAP results is provided in the schedules to this press release.

Key Metrics and Business Highlights

LiveRamp added 30 new direct customers during the quarter, bringing its total direct customer count to 640, an increase of 23% year-over-year. We now serve 19% of the Fortune 500 compared to 15% in the prior year period.
LiveRamp has 42 clients whose subscription contracts exceed $1 million in annual revenue, up from 31 in the prior year period.
Dollar-based net retention was in excess of 115% for the tenth consecutive quarter.
During the quarter, TV related revenue grew 38% year-over-year and addressable campaign volumes more than doubled. Recent LiveRamp TV wins included Cox, Turner and iSpot.

Financial Outlook

LiveRamp’s non-GAAP guidance excludes the impact of non-cash stock compensation, purchased intangible asset amortization, restructuring charges and business separation costs.

For fiscal 2019, LiveRamp now expects to report:

Revenue of up to $284 million, an increase of 29% year-over-year as compared to the Company’s previous revenue growth guidance of 25% to 30%.
GAAP operating loss from continuing operations of approximately $181 million as compared to previous GAAP operating loss guidance of $170 million to $158 million. The increased GAAP operating loss is associated with incremental restructuring charges and higher stock compensation.
Non-GAAP operating loss from continuing operations of approximately $55 million as compared to previous operating loss guidance of $64 million to $52 million.

The Company’s GAAP and non-GAAP operating loss guidance includes approximately $21 million of transition-related spend associated with establishing standalone operations at LiveRamp. The $21 million is broken out as follows: approximately $4 million in the second quarter, $9 million in the third quarter and $8 million in the fourth quarter. Transition-related spending is expected to be largely complete by mid-FY20.

Conference Call

LiveRamp will hold a conference call at 2:00 p.m. PT today to further discuss this information. Interested parties are invited to listen to the call which will be broadcast via the Internet and can be found on our investor site. A slide presentation will be referenced during the call and can be accessed here.

Upcoming Conference Attendance

LiveRamp management will be presenting at the 2019 Morgan Stanley TMT Conference on February 27th at 3:50 p.m. PT in San Francisco, California.

RampUp™ 2019

LiveRamp will be hosting RampUp 2019, the premiere conference for leaders in MarTech, on February 25th and 26th in San Francisco, California. This year’s event will include speakers from Cars.com, Dun & Bradstreet, Macy’s, Spark Foundry, Unity Technologies, and many more.

About LiveRamp

LiveRamp provides the identity platform leveraged by brands and their partners to deliver innovative products and exceptional experiences. LiveRamp IdentityLink connects people, data, and devices across the digital and physical world, powering the people-based marketing revolution and allowing consumers to safely connect with the brands and products they love. For more information, visit www.LiveRamp.com.

Forward-Looking Statements

This release and today’s conference call contain forward-looking statements including, without limitation, statements regarding expected levels of revenue and earnings per share. Such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially. The following are factors, among others, that could cause actual results to differ materially from these forward-looking statements: the possibility that expected revenue may not be realized within the expected timeframe; the possibility that the integration of acquired businesses may not be successful as planned; the possibility that certain contracts may not generate the anticipated revenue or profitability or may not be closed within the anticipated time frames; the possibility that significant customers may experience extreme, severe economic difficulty or otherwise reduce or cancel the amount of business they do with us; the possibility that we will not successfully complete customer contract requirements on time or meet the service levels specified in the contracts, which may result in contract penalties or lost revenue; the possibility that data purchasers will reduce their reliance on us by developing and using their own, or alternative, sources of data generally or with respect to certain data elements or categories; the possibility that third-party cookies will be restricted by regulators and or platform partners, which could impact the accuracy of our Identity Graph; the possibility that data suppliers might withdraw data from us, leading to our inability to provide certain products and services to our clients; the possibility that we may not be able to attract, retain or motivate qualified technical, sales and leadership associates, or that we may lose key associates; the possibility that we may not be able to adequately adapt to rapidly changing computing environments, technologies and marketing practices; the possibility that negative changes in economic conditions in general or other conditions might lead to a reduction in demand for our products and services; the possibility that there will be changes in consumer or business information industries and markets that negatively impact the company; the possibility that the historical seasonality of our business may change; the possibility that we will not be able to achieve anticipated cost reductions and avoid unanticipated costs; the possibility that the fair value of certain of our assets may not be equal to the carrying value of those assets now or in future time periods; the possibility that unusual charges may be incurred; the possibility that changes in accounting pronouncements may occur and may impact these forward-looking statements; the possibility that we may encounter difficulties when entering new markets or industries; the possibility that we could experience loss of data center capacity or interruption of telecommunication links; the possibility the European General Data Protection Regulation, which became effective May 25, 2018, will make it more difficult and/or costly for us to do business in the EU; the possibility the California Consumer Privacy Act of 2018, which becomes effective January 1, 2020, will make it more difficult and/or costly for us to do business in California and other states within the U.S.; the possibility that new laws may be enacted which limit our ability to provide services to our clients and/or which limit the use of data; and the possibility that other risks and uncertainties may emerge, including those detailed from time to time in our current and periodic reports filed with the Securities and Exchange Commission, including our current reports on Form 8-K, quarterly reports on Form 10-Q and annual reports on Form 10-K, particularly the discussion under the caption “Item 1A. RISK FACTORS” in our Annual Report on Form 10-K for the year ended March 31, 2018, which was filed with the Securities and Exchange Commission on May 25, 2018 and the discussion under the caption “Item 1A. RISK FACTORS” in our Quarterly Report on Form 10-Q for the quarter ended September 30, 2018, which was filed with the Securities and Exchange Commission on November 1, 2018.

With respect to the provision of products or services outside our primary base of operations in the United States, all the above factors apply, along with the difficulty of doing business in numerous sovereign jurisdictions due to differences in scale, competition, culture, laws and regulations.

We undertake no obligation to update the information contained in this press release or any other forward-looking statement.

To automatically receive LiveRampⓇ financial news by email, please visit www.LiveRamp.com and subscribe to email alerts.

LiveRampⓇ, IdentityLink™, Abilitec™ and all other LiveRampⓇ marks contained herein are trademarks or service marks of LiveRamp, Inc. All other marks are the property of their respective owners.


LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except per share amounts)


	For the Three Months Ended
	December 31,
					$		%
	2018		2017		Variance		Variance

Revenues	80,021		59,121		20,900		35.4	%

Cost of revenue	34,838		24,526		10,312		42.0	%
Gross profit	45,183		34,595		10,588		30.6	%
% Gross margin	56.5	%	58.5	%

Operating expenses:
Research and development	20,469		14,311		6,158		43.0	%
Sales and marketing	40,054		27,832		12,222		43.9	%
General and administrative	27,828		20,929		6,899		33.0	%
Gains, losses and other items, net	5,043		(788	)	5,831		740.0	%
Total operating expenses	93,394		62,284		31,110		49.9	%

Loss from operations	(48,211	)	(27,689	)	(20,522	)	(74.1	%)
% Margin	-60.2	%	-46.8	%

Total other income	10,404		432		9,972		2308.3	%

Loss from continuing operations before income taxes	(37,807	)	(27,257	)	(10,550	)	(38.7	%)

Income taxes (benefit)	(22,546	)	(29,791	)	7,245		24.3	%

Net earnings (loss) from continuing operations	(15,261	)	2,534		(17,795	)	(702.2	%)

Earnings from discontinued operations, net of tax	1,071,661		20,407		1,051,254		5151.4	%

Net earnings	1,056,400		22,941		1,033,459		4504.9	%

Basic earnings (loss) per share:
Continuing operations	(0.20	)	0.03		(0.23	)	(715.0	%)
Discontinued operations	13.85		0.26		13.59		5263.1	%
Net earnings	13.65		0.29		13.36		4602.7	%

Diluted earnings (loss) per share:
Continuing operations	(0.20	)	0.03		(0.23	)	(737.0	%)
Discontinued operations	13.85		0.25		13.60		5454.8	%
Net earnings	13.65		0.28		13.37		4770.9	%

Basic weighted average shares	77,398		79,043
Diluted weighted average shares	77,398		81,869


LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except per share amounts)


	For the Nine Months Ended
	December 31,
					$		%
	2018		2017		Variance		Variance

Revenues	207,304		159,891		47,413		29.7	%

Cost of revenue	82,958		72,596		10,362		14.3	%
Gross profit	124,346		87,295		37,051		42.4	%
% Gross margin	60.0	%	54.6	%

Operating expenses:
Research and development	54,379		44,750		9,629		21.5	%
Sales and marketing	109,317		77,904		31,413		40.3	%
General and administrative	71,129		68,240		2,889		4.2	%
Gains, losses and other items, net	5,533		2,042		3,491		171.0	%
Total operating expenses	240,358		192,936		47,422		24.6	%

Loss from operations	(116,012	)	(105,641	)	(10,371	)	(9.8	%)
% Margin	-56.0	%	-66.1	%

Total other income	10,479		115		10,364		9012.2	%

Loss from continuing operations before income taxes	(105,533	)	(105,526	)	(7	)	(0.0	%)

Income taxes (benefit)	(21,274	)	(54,980	)	33,706		61.3	%

Net loss from continuing operations	(84,259	)	(50,546	)	(33,713	)	(66.7	%)

Earnings from discontinued operations, net of tax	1,158,267		68,851		1,089,416		1582.3	%

Net earnings	1,074,008		18,305		1,055,703		5767.3	%

Basic earnings (loss) per share:
Continuing operations	(1.09	)	(0.64	)	(0.45	)	(70.4	%)
Discontinued operations	14.99		0.87		14.12		1619.8	%
Net earnings	13.90		0.23		13.67		5898.1	%

Diluted earnings (loss) per share:
Continuing operations	(1.09	)	(0.64	)	(0.45	)	(70.4	%)
Discontinued operations	14.99		0.87		14.12		1619.8	%
Net earnings	13.90		0.23		13.67		5898.1	%

Basic weighted average shares	77,260		78,983
Diluted weighted average shares	77,260		78,983


LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP EPS (1)
(Unaudited)
(Dollars in thousands, except per share amounts)

	For the Three Months Ended				For the Nine Months Ended
	December 31,				December 31,
	2018		2017		2018		2017


Loss from continuing operations before income taxes	(37,807	)	(27,257	)	(105,533	)	(105,526	)

Income taxes (benefit)	(22,546	)	(29,791	)	(21,274	)	(54,980	)

Net earnings (loss) from continuing operations	(15,261	)	2,534		(84,259	)	(50,546	)

Earnings from discontinued operations, net of tax	1,071,661		20,407		1,158,267		68,851

Net earnings	1,056,400		22,941		1,074,008		18,305

Earnings per share:
Basic	13.65		0.29		13.90		0.23
Diluted	13.65		0.28		13.90		0.23

Excluded items:
Purchased intangible asset amortization (cost of revenue)	3,359		5,965		12,877		17,939
Non-cash stock compensation (cost of revenue and operating expenses)	26,082		13,290		61,547		38,844
Accelerated depreciation (cost of revenue and operating expenses)	1,959		-		1,959		-
Restructuring and merger charges (gains, losses, and other)	5,043		(788	)	5,533		2,042
Separation and transformation costs (general and administrative)	700		5,214		2,822		17,786

Total excluded items, continuing operations	37,143		23,681		84,738		76,611

Earnings (loss) from continuing operations before income taxes and excluding items	(664	)	(3,576	)	(20,795	)	(28,915	)

Income taxes (benefit) (2)	(2,941	)	(2,514	)	(7,809	)	(10,234	)

Non-GAAP net earnings (loss) from continuing operations	2,277		(1,062	)	(12,986	)	(18,681	)

Non-GAAP earnings (loss) per share from continuing operations:

Basic	0.03		(0.01	)	(0.17	)	(0.24	)

Diluted	0.03		(0.01	)	(0.17	)	(0.24	)

Basic weighted average shares	77,398		79,043		77,260		78,983
Diluted weighted average shares	80,674		79,043		77,260		78,983

(1) This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our condensed consolidated financial statements prepared in accordance with GAAP. For a detailed explanation of the adjustments made to comparable GAAP measures, the reasons why management uses these measures and the material limitations on the usefulness of these measures, please see Appendix A.

(2) Income taxes were calculated using an effective non-GAAP tax rate of 442.9% and 70.3% in the third quarter of fiscal 2019 and 2018, respectively, and 37.5% and 35.4% for the nine months ended December 31, 2018 and 2017, respectively. The difference between our GAAP and non-GAAP tax rates were primarily due to the net tax effects of the excluded items. The rates for the three months and nine months ended December 31, 2018 reflect the impact of the Tax Acts and Jobs Act.


LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP LOSS FROM OPERATIONS (1)
(Unaudited)
(Dollars in thousands)

	For the Three Months Ended				For the Nine Months Ended
	December 31,				December 31,
	2018		2017		2018		2017


Loss from continuing operations	(48,211	)	(27,689	)	(116,012	)	(105,641	)

Excluded items:
Purchased intangible asset amortization (cost of revenue)	3,359		5,965		12,877		17,939
Non-cash stock compensation (cost of revenue and operating expenses)	26,082		13,290		61,547		38,844
Accelerated depreciation (cost of revenue and operating expenses)	1,959		-		1,959		-
Restructuring and merger charges (gains, losses, and other)	5,043		(788	)	5,533		2,042
Separation and transformation costs (general and administrative)	700		5,214		2,822		17,786

Total excluded items	37,143		23,681		84,738		76,611

Loss from continuing operations before excluded items	(11,068	)	(4,008	)	(31,274	)	(29,030	)


LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
RECONCILIATION OF ADJUSTED EBITDA (1)
(Unaudited)
(Dollars in thousands)

	For the Three Months Ended				For the Nine Months Ended
	December 31,				December 31,
	2018		2017		2018		2017


Net loss from continuing operations	(15,261	)	2,534		(84,259	)	(50,546	)

Income taxes (benefit)	(22,546	)	(29,791	)	(21,274	)	(54,980	)

Other income (expense)	10,404		432		10,479		115

Loss from operations	(48,211	)	(27,689	)	(116,012	)	(105,641	)

Depreciation and amortization	8,853		9,297		25,274		28,255

EBITDA	(39,358	)	(18,392	)	(90,738	)	(77,386	)

Other adjustments:
Non-cash stock compensation (cost of revenue and operating expenses)	26,082		13,290		61,547		38,844
Restructuring and merger charges (gains, losses, and other)	5,043		(788	)	5,533		2,042
Separation and transformation costs (general and administrative)	700		5,214		2,822		17,786

Other adjustments	31,825		17,716		69,902		58,672

Adjusted EBITDA	(7,533	)	(676	)	(20,836	)	(18,714	)

(1) This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our condensed consolidated financial statements prepared in accordance with GAAP. For a detailed explanation of the adjustments made to comparable GAAP measures, the reasons why management uses these measures, the usefulness of these measures and the material limitations on the usefulness of these measures, please see Appendix A.


LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)

	December 31,		March 31,		$		%
	2018		2018		Variance		Variance

Assets
Current assets:
Cash and cash equivalents	1,546,774		140,018		1,406,756		1004.7	%
Trade accounts receivable, net	71,906		52,047		19,859		38.2	%
Refundable income taxes	-		9,977		(9,977	)	(100.0	%)
Other current assets	27,366		20,173		7,193		35.7	%
Assets held for sale	-		138,374		(138,374	)	(100.0	%)

Total current assets	1,646,046		360,589		1,285,457		356.5	%

Property and equipment	58,782		62,353		(3,571	)	(5.7	%)
Less - accumulated depreciation and amortization	34,195		30,013		4,182		13.9	%

Property and equipment, net	24,587		32,340		(7,753	)	(24.0	%)

Software, net of accumulated amortization	8,027		13,970		(5,943	)	(42.5	%)
Goodwill	204,671		203,639		1,032		0.5	%
Deferred income taxes	149		10,703		(10,554	)	(98.6	%)
Deferred commissions, net	9,478		-		9,478		-
Other assets, net	34,560		37,854		(3,294	)	(8.7	%)
Assets held for sale	-		550,402		(550,402	)	(100.0	%)

	1,927,518		1,209,497		718,021		59.4	%

Liabilities and Stockholders' Equity
Current liabilities:
Current installments of long-term debt	-		1,583		(1,583	)	(100.0	%)
Trade accounts payable	25,125		18,759		6,366		33.9	%
Accrued payroll and related expenses	13,960		13,774		186		1.4	%
Other accrued expenses	55,135		39,624		15,511		39.1	%
Deferred revenue	2,929		4,506		(1,577	)	(35.0	%)
Income taxes payable	443,590		-		443,590		-
Liabilities held for sale	-		100,353		(100,353	)	(100.0	%)

Total current liabilities	540,739		178,599		362,140		202.8	%

Long-term debt	-		227,837		(227,837	)	(100.0	%)

Deferred income taxes	178		40,243		(40,065	)	(99.6	%)

Other liabilities	26,985		10,016		16,969		169.4	%

Other liabilities held for sale	-		3,707		-		(100.0	%)

Stockholders' equity:
Common stock	14,084		13,609		475		3.5	%
Additional paid-in capital	1,366,221		1,235,679		130,542		10.6	%
Retained earnings	1,715,066		628,331		1,086,735		173.0	%
Accumulated other comprehensive income	7,891		10,767		(2,876	)	(26.7	%)
Treasury stock, at cost	(1,743,646	)	(1,139,291	)	(604,355	)	(53.0	%)
Total stockholders' equity	1,359,616		749,095		610,521		81.5	%

	1,927,518		1,209,497		718,021		59.4	%


LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)

	For the Three Months Ended
	December 31,
	2018		2017

Cash flows from operating activities:
Net earnings	1,056,400		22,941
Earnings from discontinued operations, net of tax	(1,071,661	)	(20,407	)
Non-cash operating activities:
Depreciation and amortization	8,853		9,297
Loss on disposal or impairment of assets	2,870		178
Provision for doubtful accounts	628		60
Deferred income taxes	8,279		(16,793	)
Non-cash stock compensation expense	26,082		13,290
Changes in operating assets and liabilities:
Accounts receivable	(32,362	)	(5,143	)
Deferred commissions	(988	)	-
Other assets	13,134		3,501
Accounts payable and other liabilities	(22,117	)	5,505
Deferred revenue	(40	)	1,667
Net cash provided by (used in) operating activities	(10,922	)	14,096
Cash flows from investing activities:
Capitalized software	-		(507	)
Capital expenditures	(1,938	)	(2,562	)
Payments for investments	-		(1,000	)
Net cash used in investing activities	(1,938	)	(4,069	)
Cash flows from financing activities:
Payments of debt	(230,000	)	(582	)
Sale of common stock	9,234		3,645
Shares repurchased for tax withholdings upon vesting of stock-based awards	(22,282	)	(2,233	)
Acquisition of treasury stock	(18,341	)	(19,665	)
Acquisition of treasury stock from tender offer	(503,393	)	-
Net cash used in financing activities	(764,782	)	(18,835	)
Cash flows from discontinued operations:
From operating activities	(13,336	)	29,249
From investing activities	-		(12,749	)
From investing activities - proceeds from sale of AMS	2,251,032		-
Effect of exchange rate changes on cash	-		64
Net cash provided by discontinued operations	2,237,696		16,564
Effect of exchange rate changes on cash	(327	)	259

Net change in cash and cash equivalents	1,459,727		8,015
Cash and cash equivalents at beginning of period	87,047		168,352
Cash and cash equivalents at end of period	1,546,774		176,367

Supplemental cash flow information:
Cash (received) during the period for:
Income taxes	(124	)	(133	)

Noncash investing and financing activities:
Leasehold improvements paid directly by lessor	-		978


LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)

	For the Nine Months Ended
	December 31,
	2018		2017

Cash flows from operating activities:
Net earnings	1,074,008		18,305
Earnings from discontinued operations	(1,158,267	)	(68,851	)
Non-cash operating activities:
Depreciation and amortization	25,274		28,255
Loss on disposal or impairment of assets	3,345		2,303
Provision for doubtful accounts	1,259		322
Accelerated deferred debt costs	-		720
Deferred income taxes	20,723		(19,425	)
Non-cash stock compensation expense	61,547		38,844
Changes in operating assets and liabilities:
Accounts receivable	(35,011	)	(9,818	)
Deferred commissions	(3,035	)	-
Other assets	654		2,365
Accounts payable and other liabilities	(29,274	)	1,786
Deferred revenue	(1,555	)	439
Net cash used in operating activities	(40,332	)	(4,755	)
Cash flows from investing activities:
Capitalized software	(1,322	)	(1,720	)
Capital expenditures	(3,973	)	(5,249	)
Net cash received in disposition	-		4,000
Payments for investments	(2,500	)	(1,000	)
Net cash used in investing activities	(7,795	)	(3,969	)
Cash flows from financing activities:
Proceeds from debt	-		230,000
Payments of debt	(233,293	)	(226,732	)
Fees from debt refinancing	(300	)	(4,001	)
Sale of common stock	17,355		15,309
Shares repurchased for tax withholdings upon vesting of stock-based awards	(36,906	)	(10,202	)
Acquisition of treasury stock	(64,107	)	(39,441	)
Acquisition of treasury stock from tender offer	(503,393	)	-
Net cash used in financing activities	(820,644	)	(35,067	)
Cash flows from discontinued operations:
From operating activities	40,980		81,369
From investing activities	(14,502	)	(30,934	)
From investing activities - proceeds from sale of AMS	2,251,032		-
Effect of exchange rate changes on cash	(172	)	175
Net cash provided by discontinued operations	2,277,338		50,610
Effect of exchange rate changes on cash	(1,811	)	868

Net change in cash and cash equivalents	1,406,756		7,687
Cash and cash equivalents at beginning of period	140,018		168,680
Cash and cash equivalents at end of period	1,546,774		176,367

Supplemental cash flow information:
Cash (received) during the period for:
Income taxes	(239	)	(362	)

Noncash investing and financing activities:
Leasehold improvements paid directly by lessor	-		978


LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
CALCULATION OF FREE CASH FLOW TO EQUITY (1)
(Unaudited)
(Dollars in thousands)


		06/30/17		09/30/17		12/31/17		03/31/18		FY2018		06/30/18		09/30/18		12/31/18		YTD FY2019

Net Cash Provided by (Used in) Operating Activities-Continuing Operations		(10,822	)	(8,029	)	14,096		(9,335	)	(14,090	)	(2,280	)	(27,130	)	(10,922	)	(40,332	)

Less (plus):
	Capitalized software	(575	)	(638	)	(507	)	(1,546	)	(3,266	)	(899	)	(423	)	-		(1,322	)
	Capital expenditures	(2,357	)	(330	)	(2,562	)	(4,126	)	(9,375	)	(712	)	(1,323	)	(1,938	)	(3,973	)
	Required debt payments	(572	)	(578	)	(582	)	(588	)	(2,320	)	(592	)	(2,701	)	-		(3,293	)
	Net cash received in disposition	-		4,000		-		-		4,000		-		-		-		-

Free Cash Flow to Equity		(14,326	)	(5,575	)	10,445		(15,595	)	(25,051	)	(4,483	)	(31,577	)	(12,860	)	(48,920	)

(1) This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our condensed consolidated financial statements prepared in accordance with GAAP. For a detailed explanation of the adjustments made to comparable GAAP measures, the reasons why management uses these measures, the usefulness of these measures and the material limitations on the usefulness of these measures, please see Appendix A.


LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except per share amounts)

																				Q3 FY19 to Q3 FY18
		06/30/17		09/30/17		12/31/17		03/31/18		FY2018		06/30/18		09/30/18		12/31/18		YTD FY2019		%		$
	Revenues	46,757		54,013		59,121		60,210		220,101		62,471		64,812		80,021		207,304		35.4	%	20,900

	Cost of revenue	24,061		24,009		24,526		23,800		96,396		23,654		24,466		34,838		82,958		42.0	%	10,312
	Gross profit	22,696		30,004		34,595		36,410		123,705		38,817		40,346		45,183		124,346		30.6	%	10,588
	% Gross margin	48.5	%	55.5	%	58.5	%	60.5	%	56.2	%	62.1	%	62.3	%	56.5	%	60.0	%

	Operating expenses
	Research and development	14,840		15,599		14,311		15,963		60,713		16,970		16,940		20,469		54,379		43.0	%	6,158
	Sales and marketing	24,091		25,981		27,832		30,735		108,639		33,323		35,940		40,054		109,317		43.9	%	12,222
	General and administrative	23,587		23,724		20,929		16,914		85,154		18,125		25,176		27,828		71,129		33.0	%	6,899
	Gains, losses and other items, net	(3	)	2,833		(788	)	681		2,723		1		489		5,043		5,533		740.0	%	5,831
	Total operating expenses	62,515		68,137		62,284		64,293		257,229		68,419		78,545		93,394		240,358		49.9	%	31,110

	Loss from operations	(39,819	)	(38,133	)	(27,689	)	(27,883	)	(133,524	)	(29,602	)	(38,199	)	(48,211	)	(116,012	)	(74.1	%)	(20,522	)
	% Margin	-85.2	%	-70.6	%	-46.8	%	-46.3	%	-60.7	%	-47.4	%	-58.9	%	-60.2	%	-56.0	%

	Total other income (expense)	(580	)	263		432		387		502		356		(281	)	10,404		10,479		2308.3	%	9,972

	Loss from continuing operations before income taxes	(40,399	)	(37,870	)	(27,257	)	(27,496	)	(133,022	)	(29,246	)	(38,480	)	(37,807	)	(105,533	)	(38.7	%)	(10,550	)

	Income taxes (benefit)	(13,320	)	(11,869	)	(29,791	)	(7,898	)	(62,878	)	(1,428	)	2,700		(22,546	)	(21,274	)	24.3	%	7,245

	Net earnings (loss) from continuing operations	(27,079	)	(26,001	)	2,534		(19,598	)	(70,144	)	(27,818	)	(41,180	)	(15,261	)	(84,259	)	(702.2	%)	(17,795	)

	Earnings from discontinued operations, net of tax	25,779		22,665		20,407		24,773		93,624		24,803		61,803		1,071,661		1,158,267		5151.4	%	1,051,254

	Net earnings (loss)	(1,300	)	(3,336	)	22,941		5,175		23,480		(3,015	)	20,623		1,056,400		1,074,008		4504.9	%	1,033,459

	Diluted earnings (loss) per share	(0.02	)	(0.04	)	0.28		0.07		0.30		(0.04	)	0.27		13.65		13.90		4770.9	%	13.37

	Diluted earnings (loss) per share continuing operations	(0.34	)	(0.33	)	0.03		(0.25	)	(0.89	)	(0.36	)	(0.53	)	(0.20	)	(1.09	)	(737.0	%)	(0.23	)

	Some earnings (loss) per share amounts may not add due to rounding.


LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP EPS (1)
(Unaudited)
(Dollars in thousands, except per share amounts)



	06/30/17		09/30/17		12/31/17		03/31/18		FY2018		06/30/18		09/30/18		12/31/18		YTD FY2019


Loss from continuing operations before income taxes	(40,399	)	(37,870	)	(27,257	)	(27,496	)	(133,022	)	(29,246	)	(38,480	)	(37,807	)	(105,533	)

Income taxes (benefit)	(13,320	)	(11,869	)	(29,791	)	(7,898	)	(62,878	)	(1,428	)	2,700		(22,546	)	(21,274	)

Net earnings (loss) from continuing operations	(27,079	)	(26,001	)	2,534		(19,598	)	(70,144	)	(27,818	)	(41,180	)	(15,261	)	(84,259	)

Earnings from discontinued operations, net of tax	25,779		22,665		20,407		24,773		93,624		24,803		61,803		1,071,661		1,158,267

Net earnings (loss)	(1,300	)	(3,336	)	22,941		5,175		23,480		(3,015	)	20,623		1,056,400		1,074,008

Earnings (loss) per share:
Basic	(0.02	)	(0.04	)	0.29		0.07		0.30		(0.04	)	0.27		13.65		13.90
Diluted	(0.02	)	(0.04	)	0.29		0.07		0.30		(0.04	)	0.27		13.09		13.90

Excluded items:
Purchased intangible asset amortization (cost of revenue)	5,959		6,015		5,965		5,956		23,895		5,970		3,548		3,359		12,877
Non-cash stock compensation (cost of revenue and operating expenses)	12,400		13,154		13,290		14,022		52,866		17,798		17,667		26,082		61,547
Accelerated depreciation (cost of revenue and operating expenses)	-		-		-		-		-		-		-		1,959		1,959
Restructuring and merger charges (gains, losses, and other)	(3	)	2,833		(788	)	682		2,724		1		489		5,043		5,533
Separation and transformation costs (general and administrative)	7,119		5,453		5,214		-		17,786		-		2,122		700		2,822

Total excluded items, continuing operations	25,475		27,455		23,681		20,660		97,271		23,769		23,826		37,143		84,738

Loss from continuing operations before income taxes and excluding items	(14,924	)	(10,415	)	(3,576	)	(6,836	)	(35,751	)	(5,477	)	(14,654	)	(664	)	(20,795	)

Income taxes (benefit)	(4,556	)	(3,164	)	(2,514	)	(2,352	)	(12,586	)	(1,078	)	(3,790	)	(2,941	)	(7,809	)

Non-GAAP net earnings (loss) from continuing operations	(10,368	)	(7,251	)	(1,062	)	(4,484	)	(23,165	)	(4,399	)	(10,864	)	2,277		(12,986	)

Non-GAAP earnings (loss) per share from continuing operations:
Basic	(0.13	)	(0.09	)	(0.01	)	(0.06	)	(0.29	)	(0.06	)	(0.14	)	0.03		(0.17	)

Diluted	(0.13	)	(0.09	)	(0.01	)	(0.06	)	(0.29	)	(0.06	)	(0.14	)	0.03		(0.17	)

Basic weighted average shares	78,672		79,235		79,043		78,614		78,891		76,935		77,448		77,398		77,260

Diluted weighted average shares	78,672		79,235		79,043		78,614		78,891		76,935		77,448		80,674		77,260

Some totals may not add due to rounding


LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP EXPENSES (1)
(Unaudited)
(Dollars in thousands)


	06/30/17		09/30/17	12/31/17		03/31/18	FY2018	06/30/18	09/30/18	12/31/18	YTD FY2019

Expenses, continuing operations:
Cost of revenue	24,061		24,009	24,526		23,800	96,396	23,654	24,466	34,838	82,958
Research and development	14,840		15,599	14,311		15,963	60,713	16,970	16,940	20,469	54,379
Sales and marketing	24,091		25,981	27,832		30,735	108,639	33,323	35,940	40,054	109,317
General and administrative	23,587		23,724	20,929		16,914	85,154	18,125	25,176	27,828	71,129
Gains, losses and other items, net	(3	)	2,833	(788	)	681	2,723	1	489	5,043	5,533

Excluded items:
Purchased intangible asset amortization (cost of revenue)	5,959		6,015	5,965		5,956	23,895	5,970	3,548	3,359	12,877
Non-cash stock compensation (cost of revenue)	637		654	673		687	2,652	711	782	1,052	2,545
Non-cash stock compensation (research and development)	3,693		3,636	3,177		5,138	15,643	4,342	3,745	5,945	14,032
Non-cash stock compensation (sales and marketing)	5,454		5,730	6,251		5,946	23,381	9,920	9,854	9,460	29,234
Non-cash stock compensation (general and administrative)	2,616		3,134	3,190		2,252	11,191	2,824	3,286	9,625	15,735
Accelerated depreciation (cost of revenue)	-		-	-		-	-	-	-	1,527	1,527
Accelerated depreciation (general and administrative)	-		-	-		-	-	-	-	432	432
Restructuring and merger charges (gains, losses, and other)	(3	)	2,833	(788	)	681	2,723	1	489	5,043	5,533
Separation and transformation costs (general and administrative)	7,119		5,453	5,214		-	17,786	-	2,122	700	2,822
Total excluded items	25,475		27,455	23,682		20,660	97,271	23,769	23,826	37,143	84,738

Expenses, continued operations excluding items:
Cost of revenue	17,465		17,340	17,888		17,157	69,849	16,972	20,136	28,900	66,009
Research and development	11,147		11,963	11,134		10,825	45,070	12,628	13,195	14,524	40,347
Sales and marketing	18,637		20,251	21,581		24,789	85,258	23,403	26,086	30,594	80,083
General and administrative	13,852		15,137	12,525		14,662	56,177	15,301	19,768	17,071	52,140
Gains, losses and other items, net	-		-	-		-	-	-	-	-	-

(1) This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our condensed consolidated financial statements prepared in accordance with GAAP. For a detailed explanation of the adjustments made to comparable GAAP measures, the reasons why management uses these measures, the usefulness of these measures and the material limitations on the usefulness of these measures, please see Appendix A.


LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP OPERATING LOSS GUIDANCE (1)
(Unaudited)
(Dollars in thousands, except per share amounts)

	For the year ending
	March 31, 2019


Revenues	$	284,000

GAAP loss from operations		(181,000	)
		-64	%

Excluded items:
Purchased intangible asset amortization		16,000
Accelerated depreciation		4,000
Non-cash stock compensation		83,000
Gains, losses and other items, net		20,000
Separation and related costs		3,000

Total excluded items		126,000

Non-GAAP loss from operations		(55,000	)
		-19	%

(1) This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our condensed consolidated financial statements prepared in accordance with GAAP. For a detailed explanation of the adjustments made to comparable GAAP measures, the reasons why management uses these measures, the usefulness of these measures and the material limitations on the usefulness of these measures, please see Appendix A.

APPENDIX A

LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
Q3 FISCAL 2019 FINANCIAL RESULTS
EXPLANATION OF NON-GAAP MEASURES

To supplement our financial results, we use non-GAAP measures which exclude certain acquisition related expenses, non-cash stock compensation and restructuring charges. We believe these measures are helpful in understanding our past performance and our future results. Our non-GAAP financial measures and schedules are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read only in conjunction with our consolidated GAAP financial statements. Our management regularly uses these non-GAAP financial measures internally to understand, manage and evaluate our business and to make operating decisions. These measures are among the primary factors management uses in planning for and forecasting future periods. Compensation of our executives is also based in part on the performance of our business based on these non-GAAP measures.

Our non-GAAP financial measures, including non-GAAP earnings per share, income from operations and adjusted EBITDA reflect adjustments based on the following items, as well as the related income tax effects when applicable:

Purchased intangible asset amortization: We incur amortization of purchased intangibles in connection with our acquisitions. Purchased intangibles include (i) developed technology, (ii) customer and publisher relationships, and (iii) trade names. We expect to amortize for accounting purposes the fair value of the purchased intangibles based on the pattern in which the economic benefits of the intangible assets will be consumed as revenue is generated. Although the intangible assets generate revenue for us, we exclude this item because this expense is non-cash in nature and because we believe the non-GAAP financial measures excluding this item provide meaningful supplemental information regarding our operational performance.

Non-cash stock compensation: Non-cash stock compensation consists of charges for associate restricted stock units, performance shares and stock options in accordance with current GAAP related to stock-based compensation including expense associated with stock-based compensation related to unvested options assumed in connection with our acquisitions. As we apply stock-based compensation standards, we believe that it is useful to investors to understand the impact of the application of these standards to our operational performance. Although stock-based compensation expense is calculated in accordance with current GAAP and constitutes an ongoing and recurring expense, such expense is excluded from non-GAAP results because it is not an expense that typically requires or will require cash settlement by us and because such expense is not used by us to assess the core profitability of our business operations.

Restructuring charges: During the past several years, we have initiated certain restructuring activities in order to align our costs in connection with both our operating plans and our business strategies based on then-current economic conditions. As a result, we recognized costs related to termination benefits for associates whose positions were eliminated, lease termination charges, and leasehold improvement write offs. These items, reported as gains, losses, and other items, net, are excluded from non-GAAP results because such amounts are not used by us to assess the core profitability of our business operations.

Separation and transformation costs: In previous years, we incurred significant expenses in connection with the separation of our IT Infrastructure Management ("ITO") and the subsequent transformation of our remaining operating segments. This work enabled us to transform our external reporting and provide investors with enhanced transparency and more granular segment-level disclosures in addition to facilitating the ITO disposition. In the prior year, we also incurred expenses to further separate the financial statements of our three operating segments, with particular focus on segment-level balance sheets, and to evaluate portfolio priorities. Our criteria for excluding separation and transformation expenses from our non-GAAP measures is as follows: 1) projects are discrete in nature; 2) excluded expenses consist only of third-party consulting fees that we would not incur otherwise; and 3) we do not exclude employee related expenses or other costs associated with the ongoing operations of our business. We substantially completed those projects during the third quarter of fiscal year 2018. Beginning in the fourth quarter of fiscal 2018, we incurred transaction support expenses and system separation costs related to the Company's announced evaluation of strategic options for its Marketing Solutions (AMS) business. Our criteria for excluding these transaction and system separation related costs are the same. We believe excluding these items from our non-GAAP financial measures is useful for investors and provides meaningful supplemental information.

Accelerated depreciation: In the current year we are excluding depreciation costs associated with the reduced useful life of certain IT equipment in connection with the Company's migration to a cloud-based data center solution. This migration is part of our AMS separation strategy. These costs are excluded from our non-GAAP results because of the short-term nature of the incremental expenses and such amounts are not used by us to assess the core profitability of our business operations.

Our non-GAAP financial schedules are:

Non-GAAP EPS and Non-GAAP Income from Operations: Our non-GAAP earnings per share and Non-GAAP income from operations reflect adjustments as described above, as well as the related tax effects where applicable.

Adjusted EBITDA: Adjusted EBITDA is defined as net income from continuing operations before income taxes, other expenses, depreciation and amortization, and including adjustments as described above. We use Adjusted EBITDA to measure our performance from period to period both at the consolidated level as well as within our operating segments and to compare our results to those of our competitors. We believe that the inclusion of Adjusted EBITDA provides useful supplementary information to and facilitates analysis by investors in evaluating the Company's performance and trends. The presentation of Adjusted EBITDA is not meant to be considered in isolation or as an alternative to net earnings as an indicator of our performance.

Free Cash Flow to Equity: To supplement our statement of cash flows, we use a non-GAAP measure of cash flow to analyze cash flows generated from operations. Free cash flow to equity is defined as operating cash flow less cash used by investing activities (excluding the impact of cash paid in acquisitions), less required payments of debt, and excluding the impact of discontinued operations. Management believes that this measure of cash flow is meaningful since it represents the amount of money available from continuing operations for the Company's discretionary spending after funding all required obligations including scheduled debt payments. The presentation of non-GAAP free cash flow to equity is not meant to be considered in isolation or as an alternative to cash flows from operating activities as a measure of liquidity.

View source version on businesswire.com: https://www.businesswire.com/news/home/20190211005709/en/

Contacts:

LiveRamp Investor Relations
Lauren Dillard, (650) 372-2242
Investor.Relations@LiveRamp.com
ERAMP