Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil EL&P Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries LiveRamp Announces Strong Second Quarter Results and Raises Full Year Outlook By: LiveRamp via Business Wire November 02, 2021 at 16:05 PM EDT Total Revenue Up 22% and Subscription Revenue Up 23% GAAP Gross Margin of 72% and Non-GAAP Gross Margin of 77% Record Operating Performance Eighty $1 Million Customers – Largest Sequential Increase LiveRamp® (NYSE: RAMP), the leading global data connectivity platform, today announced its financial results for the quarter ended September 30, 2021. This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20211102006069/en/ Second Quarter Financial Highlights Total revenue was $127 million, up 22% compared to the prior year period. Subscription revenue was $105 million, up 23% compared to the prior year period and contributed 83% of total revenue. Marketplace & Other revenue was $22 million, up 16% compared to the prior year period. GAAP gross profit was $92 million, up 32% compared to the prior year period. GAAP gross margin of 72% expanded 6 percentage points. Non-GAAP gross profit was $98 million, up 30% compared to the prior year period. Non-GAAP gross margin of 77% expanded 5 percentage points. GAAP operating loss was $6 million compared to a GAAP operating loss of $27 million in the prior year period. Non-GAAP operating income was $18 million compared to a non-GAAP operating income of $1 million in the prior year period. GAAP loss per share was $0.09, and non-GAAP earnings per share were $0.26. Net cash provided by operating activities was $11 million compared to $6 million in the prior year period. During the quarter, LiveRamp repurchased approximately 365 thousand shares for $15 million under the current share repurchase program. Since inception of the share repurchase program in August 2011, the Company has returned approximately $1.2 billion in capital to shareholders. A reconciliation between GAAP and non-GAAP results is provided in the schedules to this press release. “LiveRamp is making it safe and easy for companies to use their data, and many of the world’s most successful companies are embracing LiveRamp,” said LiveRamp CEO Scott Howe. “You can see this in our results: top line growth accelerated, innovative new products such as Safe HavenⓇ gained even greater adoption, and LiveRamp is well positioned for the future.” “Q2 was another great quarter,” added LiveRamp President and CFO Warren Jenson. “Revenue growth accelerated, gross margin expanded, and we delivered a record operating performance. This is our sixth consecutive quarter of non-GAAP profitability. Given the strength of our performance, we are raising our top and bottom line guidance for the year.” GAAP and Non-GAAP Results The following table summarizes the Company’s financial results for its second fiscal quarter ($ in millions): Q2 Fiscal 2022 Q2 Fiscal 2021 Results Results GAAP Non-GAAP GAAP Non-GAAP Subscription revenue $105 — $86 — YoY change % 23% 19% Marketplace & other revenue $22 — $19 — YoY change % 16% 4% Total revenue $127 — $105 — YoY change % 22% 16% Gross profit $92 $98 $70 $75 % Gross margin 72% 77% 67% 72% YoY change, pts 6 pts 5 pts 13 pts 9 pts Operating income (loss) ($6) $18 ($27) $1 % Operating margin (5%) 14% (26%) 1% YoY change, pts 21 pts 13 pts 30 pts 23 pts Net income (loss) ($6) $18 ($24) $2 Earnings (loss) per share ($0.09) $0.26 ($0.36) $0.03 Shares to Calculate EPS 68.0 69.3 66.0 68.8 YoY change % 3% 1% (2%) 2% Net operating cash flow $11 — $6 — Free cash flow to equity — $10 — $6 Totals may not sum due to rounding. 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. Additional Business Highlights & Metrics The Authenticated Traffic Solution (ATS) continues to experience strong global adoption. There are currently more than 55 supply-side platforms (SSPs) and 70 demand-side platforms (DSPs) live or committed to bid on RampID™ and ATS, including The Trade Desk, Amobee, Criteo, dataxu, and MediaMath. Lastly, more than 500 publishers, representing more than 8,000 publisher domains, are deployed with ATS. LiveRamp launched its enhanced TV platform with support from Innovid, E.W. Scripps Company, Publica, Philo, Plex, Univision and Dish. New capabilities enable marketers, programmers, and sell-side CTV platforms to more easily and effectively collaborate, activate, and quantify media campaigns in a coordinated way across all TV inventory: linear, streaming, and digital video. LiveRamp added 15 net new direct subscription customers in the second quarter. Customer count at quarter end was 870, up from 795 a year ago. LiveRamp has 80 customers whose subscription contracts exceed $1 million in annual revenue, up 29% compared to the prior year period. This represents LiveRamp’s largest sequential increase in $1 million customers. During the second quarter, subscription net retention was 108% and platform net retention was 109%. Current remaining performance obligations (CRPO), which is contracted and committed revenue expected to be recognized over the next 12 months, was $266 million, up 23% compared to the prior year period. Financial Outlook LiveRamp’s non-GAAP guidance excludes the impact of non-cash stock compensation, purchased intangible asset amortization, and restructuring charges. For the third quarter of fiscal 2022, LiveRamp expects to report: Revenue of approximately $139 million, an increase of 16% year-over-year GAAP operating loss of approximately $20 million Non-GAAP operating income of approximately $10 million For fiscal 2022, LiveRamp has increased its outlook and now expects to report: Revenue of approximately $525 million, an increase of 19% year-over-year GAAP operating loss of approximately $70 million Non-GAAP operating income of approximately $40 million Conference Call LiveRamp will hold a conference call at 1:30 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 LiveRamp’s investor site. A slide presentation will be referenced during the call and can be accessed here. About LiveRamp LiveRamp is the leading data connectivity platform for the safe and effective use of data. Powered by core identity capabilities and an unparalleled network, LiveRamp enables companies and their partners to better connect, control, and activate data to transform customer experiences and generate more valuable business outcomes. LiveRamp’s fully interoperable and neutral infrastructure delivers end-to-end addressability for the world’s top brands, agencies, and publishers. For more information, visit www.LiveRamp.com. Forward-Looking Statements This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, as amended (the “PSLRA”). These statements, which are not statements of historical fact, may contain estimates, assumptions, projections and/or expectations regarding the Company’s financial position, results of operations, market position, product development, growth opportunities, economic conditions, and other similar forecasts and statements of expectation. Forward-looking statements are often identified by words or phrases such as “anticipate,” “estimate,” “plan,” “expect,” “believe,” “intend,” “foresee,” or the negative of these terms or other similar variations thereof. These forward-looking statements are not guarantees of future performance and are subject to a number of factors and uncertainties that could cause the Company’s actual results and experiences to differ materially from the anticipated results and expectations expressed in the forward-looking statements. Among the factors that may cause actual results and expectations to differ from anticipated results and expectations expressed in forward-looking statements are uncertainties related to COVID-19 and the associated impact on our suppliers, customers and partners; the Company’s dependence upon customer renewals; new customer additions and upsell within our subscription business; our reliance upon partners, including data suppliers; competition; and attracting and retaining talent. Additional risks relate to maintaining our culture and our ability to innovate and evolve while working remotely and within a rapidly changing industry, while also avoiding disruption from acquisition and divestiture activities. Our international operations are also subject to risks that may harm the Company’s business. The risk of a significant breach of the confidentiality of the information or the security of our or our customers’, suppliers’, or other partners’ computer systems could be detrimental to our business, reputation and results of operations. Other business risks include unfavorable publicity and negative public perception about our industry; interruptions or delays in service from data center hosting vendors we rely upon; and our dependence on the continued availability of third-party data hosting and transmission services. Our clients’ ability to use data on our platform could be restricted if the industry’s use of third-party cookies and tracking technology declines due to technology platform changes, regulation or increased user controls. Changes in regulations relating to information collection and use represents a risk, as well as changes in tax laws and regulations that are applied to our customers which could cause enterprise software budget tightening. In addition, third parties may claim that we are infringing their intellectual property or may infringe our intellectual property which could result in competitive injury and / or the incurrence of significant costs and draining of our resources. For a discussion of these and other risks and uncertainties, please refer to LiveRamp’s Annual Report on Form 10-K for our fiscal year 2021 ended March 31, 2021, and LiveRamp's Quarterly Reports on Form 10-Q issued in fiscal year 2022. The financial information set forth in this press release reflects estimates based on information available at this time. LiveRamp assumes no obligation and does not currently intend to update these forward-looking statements. To automatically receive LiveRamp financial news by email, please visit www.LiveRamp.com and subscribe to email alerts. LiveRampⓇ, RampIDTM, AbilitecⓇ, Safe HavenⓇ 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 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (Dollars in thousands, except per share amounts) For the Three Months Ended September 30, $ % 2021 2020 Variance Variance Revenues 127,290 104,661 22,629 21.6 % Cost of revenue 35,079 34,897 182 0.5 % Gross profit 92,211 69,764 22,447 32.2 % % Gross margin 72.4 % 66.7 % Operating expenses: Research and development 35,788 31,035 4,753 15.3 % Sales and marketing 39,509 41,705 (2,196 ) (5.3 %) General and administrative 23,078 24,495 (1,417 ) (5.8 %) Gains, losses and other items, net 18 (619 ) 637 102.9 % Total operating expenses 98,393 96,616 1,777 1.8 % Loss from operations (6,182 ) (26,852 ) 20,670 77.0 % % Margin -4.9 % -25.7 % Total other income (expense), net 150 (225 ) 375 166.7 % Loss from operations before income taxes (6,032 ) (27,077 ) 21,045 77.7 % Income tax expense (benefit) 399 (3,109 ) 3,508 112.8 % Net loss (6,431 ) (23,968 ) 17,537 73.2 % Basic loss per share (0.09 ) (0.36 ) 0.27 74.0 % Diluted loss per share: (0.09 ) (0.36 ) 0.27 74.0 % Basic weighted average shares 68,042 66,010 Diluted weighted average shares 68,042 66,010 LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (Dollars in thousands, except per share amounts) For the Six Months Ended September 30, $ % 2021 2020 Variance Variance Revenues 246,328 204,098 42,230 20.7 % Cost of revenue 69,394 69,362 32 0.0 % Gross profit 176,934 134,736 42,198 31.3 % % Gross margin 71.8 % 66.0 % Operating expenses: Research and development 70,564 58,024 12,540 21.6 % Sales and marketing 81,488 80,332 1,156 1.4 % General and administrative 47,369 47,863 (494 ) (1.0 %) Gains, losses and other items, net 1,296 1,376 (80 ) (5.8 %) Total operating expenses 200,717 187,595 13,122 7.0 % Loss from operations (23,783 ) (52,859 ) 29,076 55.0 % % Margin -9.7 % -25.9 % Total other income, net 30,751 238 30,513 12820.6 % Income (loss) from operations before income taxes 6,968 (52,621 ) 59,589 113.2 % Income tax benefit (3,966 ) (6,925 ) 2,959 42.7 % Net earnings (loss) 10,934 (45,696 ) 56,630 123.9 % Basic earnings (loss) per share 0.16 (0.69 ) 0.85 123.1 % Diluted earnings (loss) per share: 0.16 (0.69 ) 0.85 122.7 % Basic weighted average shares 68,185 65,790 Diluted weighted average shares 69,473 65,790 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 Six Months Ended September 30, September 30, 2021 2020 2021 2020 Income (loss) from operations before income taxes (6,032 ) (27,077 ) 6,968 (52,621 ) Income tax expense (benefit) 399 (3,109 ) (3,966 ) (6,925 ) Net earnings (loss) (6,431 ) (23,968 ) 10,934 (45,696 ) Earnings (loss) per share: Basic (0.09 ) (0.36 ) 0.16 (0.69 ) Diluted (0.09 ) (0.36 ) 0.16 (0.69 ) Excluded items: Purchased intangible asset amortization (cost of revenue) 4,612 4,350 9,257 9,656 Non-cash stock compensation (cost of revenue and operating expenses) 19,221 24,204 37,717 40,689 Transformation costs (general and administrative) - 258 - 3,863 Restructuring and merger charges (gains, losses, and other) 18 (619 ) 1,296 1,376 Gain on retained profits interest (other income) - - (30,052 ) - Total excluded items 23,851 28,193 18,218 55,584 Income from operations before income taxes and excluding items 17,819 1,116 25,186 2,963 Income taxes (2) (12 ) (1,291 ) 853 (357 ) Non-GAAP net earnings 17,831 2,407 24,333 3,320 Non-GAAP earnings per share: Basic 0.26 0.04 0.36 0.05 Diluted 0.26 0.03 0.35 0.05 Basic weighted average shares 68,042 66,010 68,185 65,790 Diluted weighted average shares 69,333 68,804 69,473 68,071 (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 by applying the estimated annual effective tax rate to year-to-date pretax income or loss and adjusting for discrete tax items in the period. The differences between our GAAP and non-GAAP effective tax rates were primarily due to the net tax effects of the excluded items, coupled with larger pre-tax losses for GAAP purposes versus smaller pre-tax losses or income for non-GAAP purposes. LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES RECONCILIATION OF GAAP TO NON-GAAP INCOME (LOSS) FROM OPERATIONS (1) (Unaudited) (Dollars in thousands) For the Three Months Ended For the Six Months Ended September 30, September 30, 2021 2020 2021 2020 Loss from operations (6,182 ) (26,852 ) (23,783 ) (52,859 ) Excluded items: Purchased intangible asset amortization (cost of revenue) 4,612 4,350 9,257 9,656 Non-cash stock compensation (cost of revenue and operating expenses) 19,221 24,204 37,717 40,689 Transformation costs (general and administrative) - 258 - 3,863 Restructuring and merger charges (gains, losses, and other) 18 (619 ) 1,296 1,376 Total excluded items 23,851 28,193 48,270 55,584 Income from operations before excluded items 17,669 1,341 24,487 2,725 (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. LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES RECONCILIATION OF ADJUSTED EBITDA (1) (Unaudited) (Dollars in thousands) For the Three Months Ended For the Six Months Ended September 30, September 30, 2021 2020 2021 2020 Net earnings (loss) (6,431 ) (23,968 ) 10,934 (45,696 ) Income tax expense (benefit) 399 (3,109 ) (3,966 ) (6,925 ) Total other income (expense), net 150 (225 ) 30,751 238 Loss from operations (6,182 ) (26,852 ) (23,783 ) (52,859 ) Depreciation and amortization 5,819 6,901 12,404 14,955 EBITDA (363 ) (19,951 ) (11,379 ) (37,904 ) Other adjustments: Non-cash stock compensation (cost of revenue and operating expenses) 19,221 24,204 37,717 40,689 Transformation costs (general and administrative) - 258 - 3,863 Restructuring and merger charges (gains, losses, and other) 18 (619 ) 1,296 1,376 Other adjustments 19,239 23,843 39,013 45,928 Adjusted EBITDA 18,876 3,892 27,634 8,024 (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 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 CONDENSED CONSOLIDATED BALANCE SHEETS (Dollars in thousands) September 30, March 31, $ % 2021 2021 Variance Variance Assets Current assets: Cash and cash equivalents 535,590 572,787 (37,197 ) (6.5 %) Restricted cash 8,731 8,900 (169 ) (1.9 %) Trade accounts receivable, net 130,948 114,284 16,664 14.6 % Refundable income taxes 64,079 65,692 (1,613 ) (2.5 %) Other current assets 35,246 64,052 (28,806 ) (45.0 %) Total current assets 774,594 825,715 (51,121 ) (6.2 %) Property and equipment 45,214 44,284 930 2.1 % Less - accumulated depreciation and amortization 34,916 32,327 2,589 8.0 % Property and equipment, net 10,298 11,957 (1,659 ) (13.9 %) Intangible assets, net 33,970 39,730 (5,760 ) (14.5 %) Goodwill 363,895 357,446 6,449 1.8 % Deferred commissions, net 27,988 22,619 5,369 23.7 % Other assets, net 71,627 30,854 40,773 132.1 % 1,282,372 1,288,321 (5,949 ) (0.5 %) Liabilities and Stockholders' Equity Current liabilities: Trade accounts payable 44,267 39,955 4,312 10.8 % Accrued payroll and related expenses 24,427 46,438 (22,011 ) (47.4 %) Other accrued expenses 47,766 58,353 (10,587 ) (18.1 %) Acquisition escrow payable 8,731 8,900 (169.00 ) (1.9 %) Deferred revenue 11,058 11,603 (545 ) (4.7 %) Total current liabilities 136,249 165,249 (29,000 ) (17.5 %) Other liabilities 73,176 42,389 30,787 72.6 % Stockholders' equity: Preferred stock - - - n/a Common stock 14,887 14,781 106 0.7 % Additional paid-in capital 1,669,461 1,630,072 39,389 2.4 % Retained earnings 1,465,760 1,454,826 10,934 0.8 % Accumulated other comprehensive income 5,976 7,522 (1,546 ) (20.6 %) Treasury stock, at cost (2,083,137 ) (2,026,518 ) (56,619 ) (2.8 %) Total stockholders' equity 1,072,947 1,080,683 (7,736 ) (0.7 %) 1,282,372 1,288,321 (5,949 ) (0.5 %) LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Dollars in thousands) For the Three Months Ended September 30, 2021 2020 Cash flows from operating activities: Net loss (6,431 ) (23,968 ) Non-cash operating activities: Depreciation and amortization 5,819 6,901 Loss on disposal or impairment of assets 29 331 Provision for doubtful accounts 327 1,192 Deferred income taxes 141 187 Non-cash stock compensation expense 19,221 24,204 Changes in operating assets and liabilities: Accounts receivable (11,024 ) (3,724 ) Deferred commissions (1,986 ) (1,764 ) Other assets 4,072 2,799 Accounts payable and other liabilities 447 2,013 Income taxes 368 (2,478 ) Deferred revenue (82 ) 556 Net cash provided by operating activities 10,901 6,249 Cash flows from investing activities: Capital expenditures (876 ) (296 ) Payment for investment - (1,206 ) Cash paid in acquisition, net of cash received - (2,933 ) Net cash used in investing activities (876 ) (4,435 ) Cash flows from financing activities: Proceeds related to the issuance of common stock under stock and employee benefit plans 997 2,424 Shares repurchased for tax withholdings upon vesting of stock-based awards (1,181 ) (3,928 ) Acquisition of treasury stock (15,000 ) - Net cash used in financing activities (15,184 ) (1,504 ) Effect of exchange rate changes on cash (275 ) 486 Net change in cash and cash equivalents (5,434 ) 796 Cash and cash equivalents at beginning of period 549,755 664,710 Cash and cash equivalents at end of period 544,321 665,506 Supplemental cash flow information: Cash received during the period for: Income taxes (118 ) (822 ) Operating lease assets obtained in exchange for operating lease liabilities 35,691 - LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Dollars in thousands) For the Six Months Ended September 30, 2021 2020 Cash flows from operating activities: Net earnings (loss) 10,934 (45,696 ) Non-cash operating activities: Depreciation and amortization 12,404 14,955 Loss on disposal or impairment of assets 142 333 Gain on distribution from retained profits interest (30,052 ) - Provision for doubtful accounts 1,282 2,522 Deferred income taxes (771 ) (485 ) Non-cash stock compensation expense 37,717 40,689 Changes in operating assets and liabilities: Accounts receivable (18,073 ) (9,584 ) Deferred commissions (5,369 ) (3,445 ) Other assets 23,408 7,703 Accounts payable and other liabilities (36,829 ) (20,671 ) Income taxes (632 ) (3,583 ) Deferred revenue (501 ) (101 ) Net cash used in operating activities (6,340 ) (17,363 ) Cash flows from investing activities: Capital expenditures (1,303 ) (1,128 ) Payment for investment - (1,873 ) Distribution from retained profits interest 31,000 - Cash paid in acquisition, net of cash received (8,368 ) (2,933 ) Net cash provided by (used in) investing activities 21,329 (5,934 ) Cash flows from financing activities: Proceeds related to the issuance of common stock under stock and employee benefit plans 4,278 3,561 Shares repurchased for tax withholdings upon vesting of stock-based awards (12,542 ) (5,755 ) Acquisition of treasury stock (44,077 ) (42,312 ) Net cash used in financing activities (52,341 ) (44,506 ) Effect of exchange rate changes on cash (14 ) 683 Net change in cash and cash equivalents (37,366 ) (67,120 ) Cash and cash equivalents at beginning of period 581,687 732,626 Cash and cash equivalents at end of period 544,321 665,506 Supplemental cash flow information: Cash received during the period for: Income taxes (2,569 ) (2,863 ) Operating lease assets obtained in exchange for operating lease liabilities 35,691 - LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES CALCULATION OF FREE CASH FLOW TO EQUITY (1) (Unaudited) (Dollars in thousands) 06/30/20 09/30/20 12/31/20 03/31/21 FY2021 06/30/21 09/30/21 FY2022 Net Cash Provided by (Used in) Operating Activities (23,612 ) 6,249 14,690 (17,887 ) (20,560 ) (17,241 ) 10,901 (6,340 ) Less: Capital expenditures (832 ) (296 ) (678 ) (376 ) (2,182 ) (427 ) (876 ) (1,303 ) Free Cash Flow to Equity (24,444 ) 5,953 14,012 (18,263 ) (22,742 ) (17,668 ) 10,025 (7,643 ) (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. LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (Dollars in thousands, except per share amounts) Q2 FY22 to Q2 FY21 06/30/20 09/30/20 12/31/20 03/31/21 FY2021 06/30/21 09/30/21 FY2022 % $ Revenues 99,437 104,661 119,753 119,175 443,026 119,038 127,290 246,328 21.6 % 22,629 Cost of revenue 34,465 34,897 37,085 37,557 144,004 34,315 35,079 69,394 0.5 % 182 Gross profit 64,972 69,764 82,668 81,618 299,022 84,723 92,211 176,934 32.2 % 22,447 % Gross margin 65.3 % 66.7 % 69.0 % 68.5 % 67.5 % 71.2 % 72.4 % 71.8 % Operating expenses Research and development 26,989 31,035 30,608 46,479 135,111 34,776 35,788 70,564 15.3 % 4,753 Sales and marketing 38,627 41,705 43,904 53,307 177,543 41,979 39,509 81,488 (5.3 %) (2,196 ) General and administrative 23,368 24,495 23,943 32,395 104,201 24,291 23,078 47,369 (5.8 %) (1,417 ) Gains, losses and other items, net 1,995 (619 ) (6 ) 1,345 2,715 1,278 18 1,296 102.9 % 637 Total operating expenses 90,979 96,616 98,449 133,526 419,570 102,324 98,393 200,717 1.8 % 1,777 Loss from operations (26,007 ) (26,852 ) (15,781 ) (51,908 ) (120,548 ) (17,601 ) (6,182 ) (23,783 ) 77.0 % 20,670 % Margin -26.2 % -25.7 % -13.2 % -43.6 % -27.2 % -14.8 % -4.9 % -9.7 % Total other income (expense), net 463 (225 ) (86 ) (404 ) (252 ) 30,601 150 30,751 166.7 % 375 Loss from operations before income taxes (25,544 ) (27,077 ) (15,867 ) (52,312 ) (120,800 ) 13,000 (6,032 ) 6,968 77.7 % 21,045 Income taxes benefit (3,816 ) (3,109 ) (4,142 ) (19,465 ) (30,532 ) (4,365 ) 399 (3,966 ) 112.8 % 3,508 Net earnings (loss) (21,728 ) (23,968 ) (11,725 ) (32,847 ) (90,268 ) 17,365 (6,431 ) 10,934 73.2 % 17,537 Diluted earnings (loss) per share (0.33 ) (0.36 ) (0.18 ) (0.49 ) (1.36 ) 0.25 (0.09 ) 0.16 74.0 % 0.27 Some earnings (loss) per share amounts may not add due to rounding. Basic shares 65,570 66,010 66,523 67,111 66,304 68,328 68,042 68,185 Diluted shares 65,570 66,010 66,523 67,111 66,304 69,605 69,333 69,473 LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES RECONCILIATION OF GAAP TO NON-GAAP EPS (1) (Unaudited) (Dollars in thousands, except per share amounts) 06/30/20 09/30/20 12/31/20 03/31/21 FY2021 06/30/21 09/30/21 FY 2022 Income (loss) from operations before income taxes (25,544 ) (27,077 ) (15,867 ) (52,312 ) (120,800 ) 13,000 (6,032 ) 6,968 Income taxes (benefit) (3,816 ) (3,109 ) (4,142 ) (19,465 ) (30,532 ) (4,365 ) 399 (3,966 ) Net earnings (loss) (21,728 ) (23,968 ) (11,725 ) (32,847 ) (90,268 ) 17,365 (6,431 ) 10,934 Earnings (loss) per share: Basic (0.33 ) (0.36 ) (0.18 ) (0.49 ) (1.36 ) 0.25 (0.09 ) 0.16 Diluted (0.33 ) (0.36 ) (0.18 ) (0.49 ) (1.36 ) 0.25 (0.09 ) 0.16 Excluded items: Purchased intangible asset amortization (cost of revenue) 5,306 4,350 4,213 4,177 18,046 4,645 4,612 9,257 Non-cash stock compensation (cost of revenue and operating expenses) 16,485 24,204 23,894 47,124 111,707 18,496 19,221 37,717 Restructuring and merger charges (gains, losses, and other) 1,995 (619 ) (6 ) 1,345 2,715 1,278 18 1,296 Transformation costs (general and administrative) 3,605 258 - - 3,863 - - - Gain on retained profits interest (other income) - - - - - (30,052 ) - (30,052 ) Total excluded items 27,391 28,193 28,101 52,646 136,331 (5,633 ) 23,851 18,218 Income from operations before income taxes and excluding items 1,847 1,116 12,234 334 15,531 7,367 17,819 25,186 Income taxes expense (benefit) 934 (1,291 ) 2,347 (2,628 ) (638 ) 865 (12 ) 853 Non-GAAP net earnings 913 2,407 9,887 2,962 16,169 6,502 17,831 24,333 Non-GAAP earnings per share: Basic 0.01 0.04 0.15 0.04 0.24 0.10 0.26 0.36 Diluted 0.01 0.03 0.14 0.04 0.23 0.09 0.26 0.35 Basic weighted average shares 65,570 66,010 66,523 67,111 66,304 68,328 68,042 68,185 Diluted weighted average shares 67,337 68,804 69,775 69,935 68,963 69,605 69,333 69,473 Some totals may not add due to rounding (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. LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES RECONCILIATION OF GAAP TO NON-GAAP EXPENSES (1) (Unaudited) (Dollars in thousands) 06/30/20 09/30/20 12/31/20 03/31/21 FY2021 06/30/21 09/30/21 FY2022 Expenses: Cost of revenue 34,465 34,897 37,085 37,557 144,004 34,315 35,079 69,394 Research and development 26,989 31,035 30,608 46,479 135,111 34,776 35,788 70,564 Sales and marketing 38,627 41,705 43,904 53,307 177,543 41,979 39,509 81,488 General and administrative 23,368 24,495 23,943 32,395 104,201 24,291 23,078 47,369 Gains, losses and other items, net 1,995 (619 ) (6 ) 1,345 2,715 1,278 18 1,296 Gross profit: 64,972 69,764 82,668 81,618 299,022 84,723 92,211 176,934 % Gross margin 65.3 % 66.7 % 69.0 % 68.5 % 67.5 % 71.2 % 72.4 % 71.8 % Excluded items: Purchased intangible asset amortization (cost of revenue) 5,306 4,350 4,213 4,177 18,046 4,645 4,612 9,257 Non-cash stock compensation (cost of revenue) 775 913 988 2,624 5,300 790 948 1,738 Non-cash stock compensation (research and development) 5,886 7,713 7,376 17,985 38,960 5,348 7,184 12,532 Non-cash stock compensation (sales and marketing) 7,123 9,233 9,212 14,833 40,401 6,793 6,749 13,542 Non-cash stock compensation (general and administrative) 2,701 6,345 6,318 11,682 27,046 5,565 4,340 9,905 Restructuring and merger charges (gains, losses, and other) 1,995 (619 ) (6 ) 1,345 2,715 1,278 18 1,296 Transformation costs (general and administrative) 3,605 258 - - 3,863 - - - Gain on retained profits interest (other income) - - - - - (30,052 ) - (30,052 ) Total excluded items 27,391 28,193 28,101 52,646 136,331 (5,633 ) 23,851 18,218 Expenses, excluding items: Cost of revenue 28,384 29,634 31,884 30,756 120,658 28,880 29,519 58,399 Research and development 21,103 23,322 23,232 28,494 96,151 29,428 28,604 58,032 Sales and marketing 31,504 32,472 34,692 38,474 137,142 35,186 32,760 67,946 General and administrative 17,062 17,892 17,625 20,713 73,292 18,726 18,738 37,464 Gains, losses and other items, net - - - - - - - - Gross profit, excluding items: 71,053 75,027 87,869 88,419 322,368 90,158 97,771 187,929 % Gross margin 71.5 % 71.7 % 73.4 % 74.2 % 72.8 % 75.7 % 76.8 % 76.3 % (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 INCOME (LOSS) GUIDANCE (1) (Unaudited) (Dollars in thousands) For the quarter ending For the year ending December 31, 2021 March 31, 2022 GAAP loss from operations (20,000 ) (70,000 ) Excluded items: Purchased intangible asset amortization 5,000 19,000 Non-cash stock compensation 25,000 90,000 Restructuring and transformation costs - 1,000 Total excluded items 30,000 110,000 Non-GAAP income from operations $ 10,000 $ 40,000 (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 Q2 FISCAL 2022 FINANCIAL RESULTS EXPLANATION OF NON-GAAP MEASURES AND OTHER KEY METRICS 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 (loss) per share, income (loss) 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 and other contract 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. Transformation costs: In previous years, we incurred significant expenses to separate the financial statements of our operating segments, with particular focus on segment-level balance sheets, and to evaluate portfolio priorities. Our criteria for excluding 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, and through most of fiscal 2019, 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. In the first and second quarters of fiscal 2021 in response to the potential COVID-19 pandemic impact on our business, we incurred significant costs associated with the assessment of strategic and operating plans, including our long-term location strategy, and assistance in implementing the restructuring activities as a result of this assessment. Our criteria for excluding these costs are the same. We believe excluding these items from our non-GAAP financial measures is useful for investors and provides meaningful supplemental information. Our non-GAAP financial schedules are: Non-GAAP EPS, Non-GAAP Income from Operations, and Non-GAAP expenses: Our Non-GAAP earnings per share, Non-GAAP income from operations, and Non-GAAP expenses 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/20211102006069/en/Contacts Lauren Dillard LiveRamp Investor Relations Investor.Relations@LiveRamp.com ERAMP Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. By accessing this page, you agree to the following Privacy Policy and Terms and Conditions.
LiveRamp Announces Strong Second Quarter Results and Raises Full Year Outlook By: LiveRamp via Business Wire November 02, 2021 at 16:05 PM EDT Total Revenue Up 22% and Subscription Revenue Up 23% GAAP Gross Margin of 72% and Non-GAAP Gross Margin of 77% Record Operating Performance Eighty $1 Million Customers – Largest Sequential Increase LiveRamp® (NYSE: RAMP), the leading global data connectivity platform, today announced its financial results for the quarter ended September 30, 2021. This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20211102006069/en/ Second Quarter Financial Highlights Total revenue was $127 million, up 22% compared to the prior year period. Subscription revenue was $105 million, up 23% compared to the prior year period and contributed 83% of total revenue. Marketplace & Other revenue was $22 million, up 16% compared to the prior year period. GAAP gross profit was $92 million, up 32% compared to the prior year period. GAAP gross margin of 72% expanded 6 percentage points. Non-GAAP gross profit was $98 million, up 30% compared to the prior year period. Non-GAAP gross margin of 77% expanded 5 percentage points. GAAP operating loss was $6 million compared to a GAAP operating loss of $27 million in the prior year period. Non-GAAP operating income was $18 million compared to a non-GAAP operating income of $1 million in the prior year period. GAAP loss per share was $0.09, and non-GAAP earnings per share were $0.26. Net cash provided by operating activities was $11 million compared to $6 million in the prior year period. During the quarter, LiveRamp repurchased approximately 365 thousand shares for $15 million under the current share repurchase program. Since inception of the share repurchase program in August 2011, the Company has returned approximately $1.2 billion in capital to shareholders. A reconciliation between GAAP and non-GAAP results is provided in the schedules to this press release. “LiveRamp is making it safe and easy for companies to use their data, and many of the world’s most successful companies are embracing LiveRamp,” said LiveRamp CEO Scott Howe. “You can see this in our results: top line growth accelerated, innovative new products such as Safe HavenⓇ gained even greater adoption, and LiveRamp is well positioned for the future.” “Q2 was another great quarter,” added LiveRamp President and CFO Warren Jenson. “Revenue growth accelerated, gross margin expanded, and we delivered a record operating performance. This is our sixth consecutive quarter of non-GAAP profitability. Given the strength of our performance, we are raising our top and bottom line guidance for the year.” GAAP and Non-GAAP Results The following table summarizes the Company’s financial results for its second fiscal quarter ($ in millions): Q2 Fiscal 2022 Q2 Fiscal 2021 Results Results GAAP Non-GAAP GAAP Non-GAAP Subscription revenue $105 — $86 — YoY change % 23% 19% Marketplace & other revenue $22 — $19 — YoY change % 16% 4% Total revenue $127 — $105 — YoY change % 22% 16% Gross profit $92 $98 $70 $75 % Gross margin 72% 77% 67% 72% YoY change, pts 6 pts 5 pts 13 pts 9 pts Operating income (loss) ($6) $18 ($27) $1 % Operating margin (5%) 14% (26%) 1% YoY change, pts 21 pts 13 pts 30 pts 23 pts Net income (loss) ($6) $18 ($24) $2 Earnings (loss) per share ($0.09) $0.26 ($0.36) $0.03 Shares to Calculate EPS 68.0 69.3 66.0 68.8 YoY change % 3% 1% (2%) 2% Net operating cash flow $11 — $6 — Free cash flow to equity — $10 — $6 Totals may not sum due to rounding. 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. Additional Business Highlights & Metrics The Authenticated Traffic Solution (ATS) continues to experience strong global adoption. There are currently more than 55 supply-side platforms (SSPs) and 70 demand-side platforms (DSPs) live or committed to bid on RampID™ and ATS, including The Trade Desk, Amobee, Criteo, dataxu, and MediaMath. Lastly, more than 500 publishers, representing more than 8,000 publisher domains, are deployed with ATS. LiveRamp launched its enhanced TV platform with support from Innovid, E.W. Scripps Company, Publica, Philo, Plex, Univision and Dish. New capabilities enable marketers, programmers, and sell-side CTV platforms to more easily and effectively collaborate, activate, and quantify media campaigns in a coordinated way across all TV inventory: linear, streaming, and digital video. LiveRamp added 15 net new direct subscription customers in the second quarter. Customer count at quarter end was 870, up from 795 a year ago. LiveRamp has 80 customers whose subscription contracts exceed $1 million in annual revenue, up 29% compared to the prior year period. This represents LiveRamp’s largest sequential increase in $1 million customers. During the second quarter, subscription net retention was 108% and platform net retention was 109%. Current remaining performance obligations (CRPO), which is contracted and committed revenue expected to be recognized over the next 12 months, was $266 million, up 23% compared to the prior year period. Financial Outlook LiveRamp’s non-GAAP guidance excludes the impact of non-cash stock compensation, purchased intangible asset amortization, and restructuring charges. For the third quarter of fiscal 2022, LiveRamp expects to report: Revenue of approximately $139 million, an increase of 16% year-over-year GAAP operating loss of approximately $20 million Non-GAAP operating income of approximately $10 million For fiscal 2022, LiveRamp has increased its outlook and now expects to report: Revenue of approximately $525 million, an increase of 19% year-over-year GAAP operating loss of approximately $70 million Non-GAAP operating income of approximately $40 million Conference Call LiveRamp will hold a conference call at 1:30 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 LiveRamp’s investor site. A slide presentation will be referenced during the call and can be accessed here. About LiveRamp LiveRamp is the leading data connectivity platform for the safe and effective use of data. Powered by core identity capabilities and an unparalleled network, LiveRamp enables companies and their partners to better connect, control, and activate data to transform customer experiences and generate more valuable business outcomes. LiveRamp’s fully interoperable and neutral infrastructure delivers end-to-end addressability for the world’s top brands, agencies, and publishers. For more information, visit www.LiveRamp.com. Forward-Looking Statements This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, as amended (the “PSLRA”). These statements, which are not statements of historical fact, may contain estimates, assumptions, projections and/or expectations regarding the Company’s financial position, results of operations, market position, product development, growth opportunities, economic conditions, and other similar forecasts and statements of expectation. Forward-looking statements are often identified by words or phrases such as “anticipate,” “estimate,” “plan,” “expect,” “believe,” “intend,” “foresee,” or the negative of these terms or other similar variations thereof. These forward-looking statements are not guarantees of future performance and are subject to a number of factors and uncertainties that could cause the Company’s actual results and experiences to differ materially from the anticipated results and expectations expressed in the forward-looking statements. Among the factors that may cause actual results and expectations to differ from anticipated results and expectations expressed in forward-looking statements are uncertainties related to COVID-19 and the associated impact on our suppliers, customers and partners; the Company’s dependence upon customer renewals; new customer additions and upsell within our subscription business; our reliance upon partners, including data suppliers; competition; and attracting and retaining talent. Additional risks relate to maintaining our culture and our ability to innovate and evolve while working remotely and within a rapidly changing industry, while also avoiding disruption from acquisition and divestiture activities. Our international operations are also subject to risks that may harm the Company’s business. The risk of a significant breach of the confidentiality of the information or the security of our or our customers’, suppliers’, or other partners’ computer systems could be detrimental to our business, reputation and results of operations. Other business risks include unfavorable publicity and negative public perception about our industry; interruptions or delays in service from data center hosting vendors we rely upon; and our dependence on the continued availability of third-party data hosting and transmission services. Our clients’ ability to use data on our platform could be restricted if the industry’s use of third-party cookies and tracking technology declines due to technology platform changes, regulation or increased user controls. Changes in regulations relating to information collection and use represents a risk, as well as changes in tax laws and regulations that are applied to our customers which could cause enterprise software budget tightening. In addition, third parties may claim that we are infringing their intellectual property or may infringe our intellectual property which could result in competitive injury and / or the incurrence of significant costs and draining of our resources. For a discussion of these and other risks and uncertainties, please refer to LiveRamp’s Annual Report on Form 10-K for our fiscal year 2021 ended March 31, 2021, and LiveRamp's Quarterly Reports on Form 10-Q issued in fiscal year 2022. The financial information set forth in this press release reflects estimates based on information available at this time. LiveRamp assumes no obligation and does not currently intend to update these forward-looking statements. To automatically receive LiveRamp financial news by email, please visit www.LiveRamp.com and subscribe to email alerts. LiveRampⓇ, RampIDTM, AbilitecⓇ, Safe HavenⓇ 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 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (Dollars in thousands, except per share amounts) For the Three Months Ended September 30, $ % 2021 2020 Variance Variance Revenues 127,290 104,661 22,629 21.6 % Cost of revenue 35,079 34,897 182 0.5 % Gross profit 92,211 69,764 22,447 32.2 % % Gross margin 72.4 % 66.7 % Operating expenses: Research and development 35,788 31,035 4,753 15.3 % Sales and marketing 39,509 41,705 (2,196 ) (5.3 %) General and administrative 23,078 24,495 (1,417 ) (5.8 %) Gains, losses and other items, net 18 (619 ) 637 102.9 % Total operating expenses 98,393 96,616 1,777 1.8 % Loss from operations (6,182 ) (26,852 ) 20,670 77.0 % % Margin -4.9 % -25.7 % Total other income (expense), net 150 (225 ) 375 166.7 % Loss from operations before income taxes (6,032 ) (27,077 ) 21,045 77.7 % Income tax expense (benefit) 399 (3,109 ) 3,508 112.8 % Net loss (6,431 ) (23,968 ) 17,537 73.2 % Basic loss per share (0.09 ) (0.36 ) 0.27 74.0 % Diluted loss per share: (0.09 ) (0.36 ) 0.27 74.0 % Basic weighted average shares 68,042 66,010 Diluted weighted average shares 68,042 66,010 LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (Dollars in thousands, except per share amounts) For the Six Months Ended September 30, $ % 2021 2020 Variance Variance Revenues 246,328 204,098 42,230 20.7 % Cost of revenue 69,394 69,362 32 0.0 % Gross profit 176,934 134,736 42,198 31.3 % % Gross margin 71.8 % 66.0 % Operating expenses: Research and development 70,564 58,024 12,540 21.6 % Sales and marketing 81,488 80,332 1,156 1.4 % General and administrative 47,369 47,863 (494 ) (1.0 %) Gains, losses and other items, net 1,296 1,376 (80 ) (5.8 %) Total operating expenses 200,717 187,595 13,122 7.0 % Loss from operations (23,783 ) (52,859 ) 29,076 55.0 % % Margin -9.7 % -25.9 % Total other income, net 30,751 238 30,513 12820.6 % Income (loss) from operations before income taxes 6,968 (52,621 ) 59,589 113.2 % Income tax benefit (3,966 ) (6,925 ) 2,959 42.7 % Net earnings (loss) 10,934 (45,696 ) 56,630 123.9 % Basic earnings (loss) per share 0.16 (0.69 ) 0.85 123.1 % Diluted earnings (loss) per share: 0.16 (0.69 ) 0.85 122.7 % Basic weighted average shares 68,185 65,790 Diluted weighted average shares 69,473 65,790 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 Six Months Ended September 30, September 30, 2021 2020 2021 2020 Income (loss) from operations before income taxes (6,032 ) (27,077 ) 6,968 (52,621 ) Income tax expense (benefit) 399 (3,109 ) (3,966 ) (6,925 ) Net earnings (loss) (6,431 ) (23,968 ) 10,934 (45,696 ) Earnings (loss) per share: Basic (0.09 ) (0.36 ) 0.16 (0.69 ) Diluted (0.09 ) (0.36 ) 0.16 (0.69 ) Excluded items: Purchased intangible asset amortization (cost of revenue) 4,612 4,350 9,257 9,656 Non-cash stock compensation (cost of revenue and operating expenses) 19,221 24,204 37,717 40,689 Transformation costs (general and administrative) - 258 - 3,863 Restructuring and merger charges (gains, losses, and other) 18 (619 ) 1,296 1,376 Gain on retained profits interest (other income) - - (30,052 ) - Total excluded items 23,851 28,193 18,218 55,584 Income from operations before income taxes and excluding items 17,819 1,116 25,186 2,963 Income taxes (2) (12 ) (1,291 ) 853 (357 ) Non-GAAP net earnings 17,831 2,407 24,333 3,320 Non-GAAP earnings per share: Basic 0.26 0.04 0.36 0.05 Diluted 0.26 0.03 0.35 0.05 Basic weighted average shares 68,042 66,010 68,185 65,790 Diluted weighted average shares 69,333 68,804 69,473 68,071 (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 by applying the estimated annual effective tax rate to year-to-date pretax income or loss and adjusting for discrete tax items in the period. The differences between our GAAP and non-GAAP effective tax rates were primarily due to the net tax effects of the excluded items, coupled with larger pre-tax losses for GAAP purposes versus smaller pre-tax losses or income for non-GAAP purposes. LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES RECONCILIATION OF GAAP TO NON-GAAP INCOME (LOSS) FROM OPERATIONS (1) (Unaudited) (Dollars in thousands) For the Three Months Ended For the Six Months Ended September 30, September 30, 2021 2020 2021 2020 Loss from operations (6,182 ) (26,852 ) (23,783 ) (52,859 ) Excluded items: Purchased intangible asset amortization (cost of revenue) 4,612 4,350 9,257 9,656 Non-cash stock compensation (cost of revenue and operating expenses) 19,221 24,204 37,717 40,689 Transformation costs (general and administrative) - 258 - 3,863 Restructuring and merger charges (gains, losses, and other) 18 (619 ) 1,296 1,376 Total excluded items 23,851 28,193 48,270 55,584 Income from operations before excluded items 17,669 1,341 24,487 2,725 (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. LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES RECONCILIATION OF ADJUSTED EBITDA (1) (Unaudited) (Dollars in thousands) For the Three Months Ended For the Six Months Ended September 30, September 30, 2021 2020 2021 2020 Net earnings (loss) (6,431 ) (23,968 ) 10,934 (45,696 ) Income tax expense (benefit) 399 (3,109 ) (3,966 ) (6,925 ) Total other income (expense), net 150 (225 ) 30,751 238 Loss from operations (6,182 ) (26,852 ) (23,783 ) (52,859 ) Depreciation and amortization 5,819 6,901 12,404 14,955 EBITDA (363 ) (19,951 ) (11,379 ) (37,904 ) Other adjustments: Non-cash stock compensation (cost of revenue and operating expenses) 19,221 24,204 37,717 40,689 Transformation costs (general and administrative) - 258 - 3,863 Restructuring and merger charges (gains, losses, and other) 18 (619 ) 1,296 1,376 Other adjustments 19,239 23,843 39,013 45,928 Adjusted EBITDA 18,876 3,892 27,634 8,024 (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 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 CONDENSED CONSOLIDATED BALANCE SHEETS (Dollars in thousands) September 30, March 31, $ % 2021 2021 Variance Variance Assets Current assets: Cash and cash equivalents 535,590 572,787 (37,197 ) (6.5 %) Restricted cash 8,731 8,900 (169 ) (1.9 %) Trade accounts receivable, net 130,948 114,284 16,664 14.6 % Refundable income taxes 64,079 65,692 (1,613 ) (2.5 %) Other current assets 35,246 64,052 (28,806 ) (45.0 %) Total current assets 774,594 825,715 (51,121 ) (6.2 %) Property and equipment 45,214 44,284 930 2.1 % Less - accumulated depreciation and amortization 34,916 32,327 2,589 8.0 % Property and equipment, net 10,298 11,957 (1,659 ) (13.9 %) Intangible assets, net 33,970 39,730 (5,760 ) (14.5 %) Goodwill 363,895 357,446 6,449 1.8 % Deferred commissions, net 27,988 22,619 5,369 23.7 % Other assets, net 71,627 30,854 40,773 132.1 % 1,282,372 1,288,321 (5,949 ) (0.5 %) Liabilities and Stockholders' Equity Current liabilities: Trade accounts payable 44,267 39,955 4,312 10.8 % Accrued payroll and related expenses 24,427 46,438 (22,011 ) (47.4 %) Other accrued expenses 47,766 58,353 (10,587 ) (18.1 %) Acquisition escrow payable 8,731 8,900 (169.00 ) (1.9 %) Deferred revenue 11,058 11,603 (545 ) (4.7 %) Total current liabilities 136,249 165,249 (29,000 ) (17.5 %) Other liabilities 73,176 42,389 30,787 72.6 % Stockholders' equity: Preferred stock - - - n/a Common stock 14,887 14,781 106 0.7 % Additional paid-in capital 1,669,461 1,630,072 39,389 2.4 % Retained earnings 1,465,760 1,454,826 10,934 0.8 % Accumulated other comprehensive income 5,976 7,522 (1,546 ) (20.6 %) Treasury stock, at cost (2,083,137 ) (2,026,518 ) (56,619 ) (2.8 %) Total stockholders' equity 1,072,947 1,080,683 (7,736 ) (0.7 %) 1,282,372 1,288,321 (5,949 ) (0.5 %) LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Dollars in thousands) For the Three Months Ended September 30, 2021 2020 Cash flows from operating activities: Net loss (6,431 ) (23,968 ) Non-cash operating activities: Depreciation and amortization 5,819 6,901 Loss on disposal or impairment of assets 29 331 Provision for doubtful accounts 327 1,192 Deferred income taxes 141 187 Non-cash stock compensation expense 19,221 24,204 Changes in operating assets and liabilities: Accounts receivable (11,024 ) (3,724 ) Deferred commissions (1,986 ) (1,764 ) Other assets 4,072 2,799 Accounts payable and other liabilities 447 2,013 Income taxes 368 (2,478 ) Deferred revenue (82 ) 556 Net cash provided by operating activities 10,901 6,249 Cash flows from investing activities: Capital expenditures (876 ) (296 ) Payment for investment - (1,206 ) Cash paid in acquisition, net of cash received - (2,933 ) Net cash used in investing activities (876 ) (4,435 ) Cash flows from financing activities: Proceeds related to the issuance of common stock under stock and employee benefit plans 997 2,424 Shares repurchased for tax withholdings upon vesting of stock-based awards (1,181 ) (3,928 ) Acquisition of treasury stock (15,000 ) - Net cash used in financing activities (15,184 ) (1,504 ) Effect of exchange rate changes on cash (275 ) 486 Net change in cash and cash equivalents (5,434 ) 796 Cash and cash equivalents at beginning of period 549,755 664,710 Cash and cash equivalents at end of period 544,321 665,506 Supplemental cash flow information: Cash received during the period for: Income taxes (118 ) (822 ) Operating lease assets obtained in exchange for operating lease liabilities 35,691 - LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Dollars in thousands) For the Six Months Ended September 30, 2021 2020 Cash flows from operating activities: Net earnings (loss) 10,934 (45,696 ) Non-cash operating activities: Depreciation and amortization 12,404 14,955 Loss on disposal or impairment of assets 142 333 Gain on distribution from retained profits interest (30,052 ) - Provision for doubtful accounts 1,282 2,522 Deferred income taxes (771 ) (485 ) Non-cash stock compensation expense 37,717 40,689 Changes in operating assets and liabilities: Accounts receivable (18,073 ) (9,584 ) Deferred commissions (5,369 ) (3,445 ) Other assets 23,408 7,703 Accounts payable and other liabilities (36,829 ) (20,671 ) Income taxes (632 ) (3,583 ) Deferred revenue (501 ) (101 ) Net cash used in operating activities (6,340 ) (17,363 ) Cash flows from investing activities: Capital expenditures (1,303 ) (1,128 ) Payment for investment - (1,873 ) Distribution from retained profits interest 31,000 - Cash paid in acquisition, net of cash received (8,368 ) (2,933 ) Net cash provided by (used in) investing activities 21,329 (5,934 ) Cash flows from financing activities: Proceeds related to the issuance of common stock under stock and employee benefit plans 4,278 3,561 Shares repurchased for tax withholdings upon vesting of stock-based awards (12,542 ) (5,755 ) Acquisition of treasury stock (44,077 ) (42,312 ) Net cash used in financing activities (52,341 ) (44,506 ) Effect of exchange rate changes on cash (14 ) 683 Net change in cash and cash equivalents (37,366 ) (67,120 ) Cash and cash equivalents at beginning of period 581,687 732,626 Cash and cash equivalents at end of period 544,321 665,506 Supplemental cash flow information: Cash received during the period for: Income taxes (2,569 ) (2,863 ) Operating lease assets obtained in exchange for operating lease liabilities 35,691 - LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES CALCULATION OF FREE CASH FLOW TO EQUITY (1) (Unaudited) (Dollars in thousands) 06/30/20 09/30/20 12/31/20 03/31/21 FY2021 06/30/21 09/30/21 FY2022 Net Cash Provided by (Used in) Operating Activities (23,612 ) 6,249 14,690 (17,887 ) (20,560 ) (17,241 ) 10,901 (6,340 ) Less: Capital expenditures (832 ) (296 ) (678 ) (376 ) (2,182 ) (427 ) (876 ) (1,303 ) Free Cash Flow to Equity (24,444 ) 5,953 14,012 (18,263 ) (22,742 ) (17,668 ) 10,025 (7,643 ) (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. LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (Dollars in thousands, except per share amounts) Q2 FY22 to Q2 FY21 06/30/20 09/30/20 12/31/20 03/31/21 FY2021 06/30/21 09/30/21 FY2022 % $ Revenues 99,437 104,661 119,753 119,175 443,026 119,038 127,290 246,328 21.6 % 22,629 Cost of revenue 34,465 34,897 37,085 37,557 144,004 34,315 35,079 69,394 0.5 % 182 Gross profit 64,972 69,764 82,668 81,618 299,022 84,723 92,211 176,934 32.2 % 22,447 % Gross margin 65.3 % 66.7 % 69.0 % 68.5 % 67.5 % 71.2 % 72.4 % 71.8 % Operating expenses Research and development 26,989 31,035 30,608 46,479 135,111 34,776 35,788 70,564 15.3 % 4,753 Sales and marketing 38,627 41,705 43,904 53,307 177,543 41,979 39,509 81,488 (5.3 %) (2,196 ) General and administrative 23,368 24,495 23,943 32,395 104,201 24,291 23,078 47,369 (5.8 %) (1,417 ) Gains, losses and other items, net 1,995 (619 ) (6 ) 1,345 2,715 1,278 18 1,296 102.9 % 637 Total operating expenses 90,979 96,616 98,449 133,526 419,570 102,324 98,393 200,717 1.8 % 1,777 Loss from operations (26,007 ) (26,852 ) (15,781 ) (51,908 ) (120,548 ) (17,601 ) (6,182 ) (23,783 ) 77.0 % 20,670 % Margin -26.2 % -25.7 % -13.2 % -43.6 % -27.2 % -14.8 % -4.9 % -9.7 % Total other income (expense), net 463 (225 ) (86 ) (404 ) (252 ) 30,601 150 30,751 166.7 % 375 Loss from operations before income taxes (25,544 ) (27,077 ) (15,867 ) (52,312 ) (120,800 ) 13,000 (6,032 ) 6,968 77.7 % 21,045 Income taxes benefit (3,816 ) (3,109 ) (4,142 ) (19,465 ) (30,532 ) (4,365 ) 399 (3,966 ) 112.8 % 3,508 Net earnings (loss) (21,728 ) (23,968 ) (11,725 ) (32,847 ) (90,268 ) 17,365 (6,431 ) 10,934 73.2 % 17,537 Diluted earnings (loss) per share (0.33 ) (0.36 ) (0.18 ) (0.49 ) (1.36 ) 0.25 (0.09 ) 0.16 74.0 % 0.27 Some earnings (loss) per share amounts may not add due to rounding. Basic shares 65,570 66,010 66,523 67,111 66,304 68,328 68,042 68,185 Diluted shares 65,570 66,010 66,523 67,111 66,304 69,605 69,333 69,473 LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES RECONCILIATION OF GAAP TO NON-GAAP EPS (1) (Unaudited) (Dollars in thousands, except per share amounts) 06/30/20 09/30/20 12/31/20 03/31/21 FY2021 06/30/21 09/30/21 FY 2022 Income (loss) from operations before income taxes (25,544 ) (27,077 ) (15,867 ) (52,312 ) (120,800 ) 13,000 (6,032 ) 6,968 Income taxes (benefit) (3,816 ) (3,109 ) (4,142 ) (19,465 ) (30,532 ) (4,365 ) 399 (3,966 ) Net earnings (loss) (21,728 ) (23,968 ) (11,725 ) (32,847 ) (90,268 ) 17,365 (6,431 ) 10,934 Earnings (loss) per share: Basic (0.33 ) (0.36 ) (0.18 ) (0.49 ) (1.36 ) 0.25 (0.09 ) 0.16 Diluted (0.33 ) (0.36 ) (0.18 ) (0.49 ) (1.36 ) 0.25 (0.09 ) 0.16 Excluded items: Purchased intangible asset amortization (cost of revenue) 5,306 4,350 4,213 4,177 18,046 4,645 4,612 9,257 Non-cash stock compensation (cost of revenue and operating expenses) 16,485 24,204 23,894 47,124 111,707 18,496 19,221 37,717 Restructuring and merger charges (gains, losses, and other) 1,995 (619 ) (6 ) 1,345 2,715 1,278 18 1,296 Transformation costs (general and administrative) 3,605 258 - - 3,863 - - - Gain on retained profits interest (other income) - - - - - (30,052 ) - (30,052 ) Total excluded items 27,391 28,193 28,101 52,646 136,331 (5,633 ) 23,851 18,218 Income from operations before income taxes and excluding items 1,847 1,116 12,234 334 15,531 7,367 17,819 25,186 Income taxes expense (benefit) 934 (1,291 ) 2,347 (2,628 ) (638 ) 865 (12 ) 853 Non-GAAP net earnings 913 2,407 9,887 2,962 16,169 6,502 17,831 24,333 Non-GAAP earnings per share: Basic 0.01 0.04 0.15 0.04 0.24 0.10 0.26 0.36 Diluted 0.01 0.03 0.14 0.04 0.23 0.09 0.26 0.35 Basic weighted average shares 65,570 66,010 66,523 67,111 66,304 68,328 68,042 68,185 Diluted weighted average shares 67,337 68,804 69,775 69,935 68,963 69,605 69,333 69,473 Some totals may not add due to rounding (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. LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES RECONCILIATION OF GAAP TO NON-GAAP EXPENSES (1) (Unaudited) (Dollars in thousands) 06/30/20 09/30/20 12/31/20 03/31/21 FY2021 06/30/21 09/30/21 FY2022 Expenses: Cost of revenue 34,465 34,897 37,085 37,557 144,004 34,315 35,079 69,394 Research and development 26,989 31,035 30,608 46,479 135,111 34,776 35,788 70,564 Sales and marketing 38,627 41,705 43,904 53,307 177,543 41,979 39,509 81,488 General and administrative 23,368 24,495 23,943 32,395 104,201 24,291 23,078 47,369 Gains, losses and other items, net 1,995 (619 ) (6 ) 1,345 2,715 1,278 18 1,296 Gross profit: 64,972 69,764 82,668 81,618 299,022 84,723 92,211 176,934 % Gross margin 65.3 % 66.7 % 69.0 % 68.5 % 67.5 % 71.2 % 72.4 % 71.8 % Excluded items: Purchased intangible asset amortization (cost of revenue) 5,306 4,350 4,213 4,177 18,046 4,645 4,612 9,257 Non-cash stock compensation (cost of revenue) 775 913 988 2,624 5,300 790 948 1,738 Non-cash stock compensation (research and development) 5,886 7,713 7,376 17,985 38,960 5,348 7,184 12,532 Non-cash stock compensation (sales and marketing) 7,123 9,233 9,212 14,833 40,401 6,793 6,749 13,542 Non-cash stock compensation (general and administrative) 2,701 6,345 6,318 11,682 27,046 5,565 4,340 9,905 Restructuring and merger charges (gains, losses, and other) 1,995 (619 ) (6 ) 1,345 2,715 1,278 18 1,296 Transformation costs (general and administrative) 3,605 258 - - 3,863 - - - Gain on retained profits interest (other income) - - - - - (30,052 ) - (30,052 ) Total excluded items 27,391 28,193 28,101 52,646 136,331 (5,633 ) 23,851 18,218 Expenses, excluding items: Cost of revenue 28,384 29,634 31,884 30,756 120,658 28,880 29,519 58,399 Research and development 21,103 23,322 23,232 28,494 96,151 29,428 28,604 58,032 Sales and marketing 31,504 32,472 34,692 38,474 137,142 35,186 32,760 67,946 General and administrative 17,062 17,892 17,625 20,713 73,292 18,726 18,738 37,464 Gains, losses and other items, net - - - - - - - - Gross profit, excluding items: 71,053 75,027 87,869 88,419 322,368 90,158 97,771 187,929 % Gross margin 71.5 % 71.7 % 73.4 % 74.2 % 72.8 % 75.7 % 76.8 % 76.3 % (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 INCOME (LOSS) GUIDANCE (1) (Unaudited) (Dollars in thousands) For the quarter ending For the year ending December 31, 2021 March 31, 2022 GAAP loss from operations (20,000 ) (70,000 ) Excluded items: Purchased intangible asset amortization 5,000 19,000 Non-cash stock compensation 25,000 90,000 Restructuring and transformation costs - 1,000 Total excluded items 30,000 110,000 Non-GAAP income from operations $ 10,000 $ 40,000 (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 Q2 FISCAL 2022 FINANCIAL RESULTS EXPLANATION OF NON-GAAP MEASURES AND OTHER KEY METRICS 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 (loss) per share, income (loss) 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 and other contract 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. Transformation costs: In previous years, we incurred significant expenses to separate the financial statements of our operating segments, with particular focus on segment-level balance sheets, and to evaluate portfolio priorities. Our criteria for excluding 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, and through most of fiscal 2019, 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. In the first and second quarters of fiscal 2021 in response to the potential COVID-19 pandemic impact on our business, we incurred significant costs associated with the assessment of strategic and operating plans, including our long-term location strategy, and assistance in implementing the restructuring activities as a result of this assessment. Our criteria for excluding these costs are the same. We believe excluding these items from our non-GAAP financial measures is useful for investors and provides meaningful supplemental information. Our non-GAAP financial schedules are: Non-GAAP EPS, Non-GAAP Income from Operations, and Non-GAAP expenses: Our Non-GAAP earnings per share, Non-GAAP income from operations, and Non-GAAP expenses 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/20211102006069/en/Contacts Lauren Dillard LiveRamp Investor Relations Investor.Relations@LiveRamp.com ERAMP
Total Revenue Up 22% and Subscription Revenue Up 23% GAAP Gross Margin of 72% and Non-GAAP Gross Margin of 77% Record Operating Performance Eighty $1 Million Customers – Largest Sequential Increase
LiveRamp® (NYSE: RAMP), the leading global data connectivity platform, today announced its financial results for the quarter ended September 30, 2021. This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20211102006069/en/ Second Quarter Financial Highlights Total revenue was $127 million, up 22% compared to the prior year period. Subscription revenue was $105 million, up 23% compared to the prior year period and contributed 83% of total revenue. Marketplace & Other revenue was $22 million, up 16% compared to the prior year period. GAAP gross profit was $92 million, up 32% compared to the prior year period. GAAP gross margin of 72% expanded 6 percentage points. Non-GAAP gross profit was $98 million, up 30% compared to the prior year period. Non-GAAP gross margin of 77% expanded 5 percentage points. GAAP operating loss was $6 million compared to a GAAP operating loss of $27 million in the prior year period. Non-GAAP operating income was $18 million compared to a non-GAAP operating income of $1 million in the prior year period. GAAP loss per share was $0.09, and non-GAAP earnings per share were $0.26. Net cash provided by operating activities was $11 million compared to $6 million in the prior year period. During the quarter, LiveRamp repurchased approximately 365 thousand shares for $15 million under the current share repurchase program. Since inception of the share repurchase program in August 2011, the Company has returned approximately $1.2 billion in capital to shareholders. A reconciliation between GAAP and non-GAAP results is provided in the schedules to this press release. “LiveRamp is making it safe and easy for companies to use their data, and many of the world’s most successful companies are embracing LiveRamp,” said LiveRamp CEO Scott Howe. “You can see this in our results: top line growth accelerated, innovative new products such as Safe HavenⓇ gained even greater adoption, and LiveRamp is well positioned for the future.” “Q2 was another great quarter,” added LiveRamp President and CFO Warren Jenson. “Revenue growth accelerated, gross margin expanded, and we delivered a record operating performance. This is our sixth consecutive quarter of non-GAAP profitability. Given the strength of our performance, we are raising our top and bottom line guidance for the year.” GAAP and Non-GAAP Results The following table summarizes the Company’s financial results for its second fiscal quarter ($ in millions): Q2 Fiscal 2022 Q2 Fiscal 2021 Results Results GAAP Non-GAAP GAAP Non-GAAP Subscription revenue $105 — $86 — YoY change % 23% 19% Marketplace & other revenue $22 — $19 — YoY change % 16% 4% Total revenue $127 — $105 — YoY change % 22% 16% Gross profit $92 $98 $70 $75 % Gross margin 72% 77% 67% 72% YoY change, pts 6 pts 5 pts 13 pts 9 pts Operating income (loss) ($6) $18 ($27) $1 % Operating margin (5%) 14% (26%) 1% YoY change, pts 21 pts 13 pts 30 pts 23 pts Net income (loss) ($6) $18 ($24) $2 Earnings (loss) per share ($0.09) $0.26 ($0.36) $0.03 Shares to Calculate EPS 68.0 69.3 66.0 68.8 YoY change % 3% 1% (2%) 2% Net operating cash flow $11 — $6 — Free cash flow to equity — $10 — $6 Totals may not sum due to rounding. 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. Additional Business Highlights & Metrics The Authenticated Traffic Solution (ATS) continues to experience strong global adoption. There are currently more than 55 supply-side platforms (SSPs) and 70 demand-side platforms (DSPs) live or committed to bid on RampID™ and ATS, including The Trade Desk, Amobee, Criteo, dataxu, and MediaMath. Lastly, more than 500 publishers, representing more than 8,000 publisher domains, are deployed with ATS. LiveRamp launched its enhanced TV platform with support from Innovid, E.W. Scripps Company, Publica, Philo, Plex, Univision and Dish. New capabilities enable marketers, programmers, and sell-side CTV platforms to more easily and effectively collaborate, activate, and quantify media campaigns in a coordinated way across all TV inventory: linear, streaming, and digital video. LiveRamp added 15 net new direct subscription customers in the second quarter. Customer count at quarter end was 870, up from 795 a year ago. LiveRamp has 80 customers whose subscription contracts exceed $1 million in annual revenue, up 29% compared to the prior year period. This represents LiveRamp’s largest sequential increase in $1 million customers. During the second quarter, subscription net retention was 108% and platform net retention was 109%. Current remaining performance obligations (CRPO), which is contracted and committed revenue expected to be recognized over the next 12 months, was $266 million, up 23% compared to the prior year period. Financial Outlook LiveRamp’s non-GAAP guidance excludes the impact of non-cash stock compensation, purchased intangible asset amortization, and restructuring charges. For the third quarter of fiscal 2022, LiveRamp expects to report: Revenue of approximately $139 million, an increase of 16% year-over-year GAAP operating loss of approximately $20 million Non-GAAP operating income of approximately $10 million For fiscal 2022, LiveRamp has increased its outlook and now expects to report: Revenue of approximately $525 million, an increase of 19% year-over-year GAAP operating loss of approximately $70 million Non-GAAP operating income of approximately $40 million Conference Call LiveRamp will hold a conference call at 1:30 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 LiveRamp’s investor site. A slide presentation will be referenced during the call and can be accessed here. About LiveRamp LiveRamp is the leading data connectivity platform for the safe and effective use of data. Powered by core identity capabilities and an unparalleled network, LiveRamp enables companies and their partners to better connect, control, and activate data to transform customer experiences and generate more valuable business outcomes. LiveRamp’s fully interoperable and neutral infrastructure delivers end-to-end addressability for the world’s top brands, agencies, and publishers. For more information, visit www.LiveRamp.com. Forward-Looking Statements This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, as amended (the “PSLRA”). These statements, which are not statements of historical fact, may contain estimates, assumptions, projections and/or expectations regarding the Company’s financial position, results of operations, market position, product development, growth opportunities, economic conditions, and other similar forecasts and statements of expectation. Forward-looking statements are often identified by words or phrases such as “anticipate,” “estimate,” “plan,” “expect,” “believe,” “intend,” “foresee,” or the negative of these terms or other similar variations thereof. These forward-looking statements are not guarantees of future performance and are subject to a number of factors and uncertainties that could cause the Company’s actual results and experiences to differ materially from the anticipated results and expectations expressed in the forward-looking statements. Among the factors that may cause actual results and expectations to differ from anticipated results and expectations expressed in forward-looking statements are uncertainties related to COVID-19 and the associated impact on our suppliers, customers and partners; the Company’s dependence upon customer renewals; new customer additions and upsell within our subscription business; our reliance upon partners, including data suppliers; competition; and attracting and retaining talent. Additional risks relate to maintaining our culture and our ability to innovate and evolve while working remotely and within a rapidly changing industry, while also avoiding disruption from acquisition and divestiture activities. Our international operations are also subject to risks that may harm the Company’s business. The risk of a significant breach of the confidentiality of the information or the security of our or our customers’, suppliers’, or other partners’ computer systems could be detrimental to our business, reputation and results of operations. Other business risks include unfavorable publicity and negative public perception about our industry; interruptions or delays in service from data center hosting vendors we rely upon; and our dependence on the continued availability of third-party data hosting and transmission services. Our clients’ ability to use data on our platform could be restricted if the industry’s use of third-party cookies and tracking technology declines due to technology platform changes, regulation or increased user controls. Changes in regulations relating to information collection and use represents a risk, as well as changes in tax laws and regulations that are applied to our customers which could cause enterprise software budget tightening. In addition, third parties may claim that we are infringing their intellectual property or may infringe our intellectual property which could result in competitive injury and / or the incurrence of significant costs and draining of our resources. For a discussion of these and other risks and uncertainties, please refer to LiveRamp’s Annual Report on Form 10-K for our fiscal year 2021 ended March 31, 2021, and LiveRamp's Quarterly Reports on Form 10-Q issued in fiscal year 2022. The financial information set forth in this press release reflects estimates based on information available at this time. LiveRamp assumes no obligation and does not currently intend to update these forward-looking statements. To automatically receive LiveRamp financial news by email, please visit www.LiveRamp.com and subscribe to email alerts. LiveRampⓇ, RampIDTM, AbilitecⓇ, Safe HavenⓇ 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 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (Dollars in thousands, except per share amounts) For the Three Months Ended September 30, $ % 2021 2020 Variance Variance Revenues 127,290 104,661 22,629 21.6 % Cost of revenue 35,079 34,897 182 0.5 % Gross profit 92,211 69,764 22,447 32.2 % % Gross margin 72.4 % 66.7 % Operating expenses: Research and development 35,788 31,035 4,753 15.3 % Sales and marketing 39,509 41,705 (2,196 ) (5.3 %) General and administrative 23,078 24,495 (1,417 ) (5.8 %) Gains, losses and other items, net 18 (619 ) 637 102.9 % Total operating expenses 98,393 96,616 1,777 1.8 % Loss from operations (6,182 ) (26,852 ) 20,670 77.0 % % Margin -4.9 % -25.7 % Total other income (expense), net 150 (225 ) 375 166.7 % Loss from operations before income taxes (6,032 ) (27,077 ) 21,045 77.7 % Income tax expense (benefit) 399 (3,109 ) 3,508 112.8 % Net loss (6,431 ) (23,968 ) 17,537 73.2 % Basic loss per share (0.09 ) (0.36 ) 0.27 74.0 % Diluted loss per share: (0.09 ) (0.36 ) 0.27 74.0 % Basic weighted average shares 68,042 66,010 Diluted weighted average shares 68,042 66,010 LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (Dollars in thousands, except per share amounts) For the Six Months Ended September 30, $ % 2021 2020 Variance Variance Revenues 246,328 204,098 42,230 20.7 % Cost of revenue 69,394 69,362 32 0.0 % Gross profit 176,934 134,736 42,198 31.3 % % Gross margin 71.8 % 66.0 % Operating expenses: Research and development 70,564 58,024 12,540 21.6 % Sales and marketing 81,488 80,332 1,156 1.4 % General and administrative 47,369 47,863 (494 ) (1.0 %) Gains, losses and other items, net 1,296 1,376 (80 ) (5.8 %) Total operating expenses 200,717 187,595 13,122 7.0 % Loss from operations (23,783 ) (52,859 ) 29,076 55.0 % % Margin -9.7 % -25.9 % Total other income, net 30,751 238 30,513 12820.6 % Income (loss) from operations before income taxes 6,968 (52,621 ) 59,589 113.2 % Income tax benefit (3,966 ) (6,925 ) 2,959 42.7 % Net earnings (loss) 10,934 (45,696 ) 56,630 123.9 % Basic earnings (loss) per share 0.16 (0.69 ) 0.85 123.1 % Diluted earnings (loss) per share: 0.16 (0.69 ) 0.85 122.7 % Basic weighted average shares 68,185 65,790 Diluted weighted average shares 69,473 65,790 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 Six Months Ended September 30, September 30, 2021 2020 2021 2020 Income (loss) from operations before income taxes (6,032 ) (27,077 ) 6,968 (52,621 ) Income tax expense (benefit) 399 (3,109 ) (3,966 ) (6,925 ) Net earnings (loss) (6,431 ) (23,968 ) 10,934 (45,696 ) Earnings (loss) per share: Basic (0.09 ) (0.36 ) 0.16 (0.69 ) Diluted (0.09 ) (0.36 ) 0.16 (0.69 ) Excluded items: Purchased intangible asset amortization (cost of revenue) 4,612 4,350 9,257 9,656 Non-cash stock compensation (cost of revenue and operating expenses) 19,221 24,204 37,717 40,689 Transformation costs (general and administrative) - 258 - 3,863 Restructuring and merger charges (gains, losses, and other) 18 (619 ) 1,296 1,376 Gain on retained profits interest (other income) - - (30,052 ) - Total excluded items 23,851 28,193 18,218 55,584 Income from operations before income taxes and excluding items 17,819 1,116 25,186 2,963 Income taxes (2) (12 ) (1,291 ) 853 (357 ) Non-GAAP net earnings 17,831 2,407 24,333 3,320 Non-GAAP earnings per share: Basic 0.26 0.04 0.36 0.05 Diluted 0.26 0.03 0.35 0.05 Basic weighted average shares 68,042 66,010 68,185 65,790 Diluted weighted average shares 69,333 68,804 69,473 68,071 (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 by applying the estimated annual effective tax rate to year-to-date pretax income or loss and adjusting for discrete tax items in the period. The differences between our GAAP and non-GAAP effective tax rates were primarily due to the net tax effects of the excluded items, coupled with larger pre-tax losses for GAAP purposes versus smaller pre-tax losses or income for non-GAAP purposes. LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES RECONCILIATION OF GAAP TO NON-GAAP INCOME (LOSS) FROM OPERATIONS (1) (Unaudited) (Dollars in thousands) For the Three Months Ended For the Six Months Ended September 30, September 30, 2021 2020 2021 2020 Loss from operations (6,182 ) (26,852 ) (23,783 ) (52,859 ) Excluded items: Purchased intangible asset amortization (cost of revenue) 4,612 4,350 9,257 9,656 Non-cash stock compensation (cost of revenue and operating expenses) 19,221 24,204 37,717 40,689 Transformation costs (general and administrative) - 258 - 3,863 Restructuring and merger charges (gains, losses, and other) 18 (619 ) 1,296 1,376 Total excluded items 23,851 28,193 48,270 55,584 Income from operations before excluded items 17,669 1,341 24,487 2,725 (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. LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES RECONCILIATION OF ADJUSTED EBITDA (1) (Unaudited) (Dollars in thousands) For the Three Months Ended For the Six Months Ended September 30, September 30, 2021 2020 2021 2020 Net earnings (loss) (6,431 ) (23,968 ) 10,934 (45,696 ) Income tax expense (benefit) 399 (3,109 ) (3,966 ) (6,925 ) Total other income (expense), net 150 (225 ) 30,751 238 Loss from operations (6,182 ) (26,852 ) (23,783 ) (52,859 ) Depreciation and amortization 5,819 6,901 12,404 14,955 EBITDA (363 ) (19,951 ) (11,379 ) (37,904 ) Other adjustments: Non-cash stock compensation (cost of revenue and operating expenses) 19,221 24,204 37,717 40,689 Transformation costs (general and administrative) - 258 - 3,863 Restructuring and merger charges (gains, losses, and other) 18 (619 ) 1,296 1,376 Other adjustments 19,239 23,843 39,013 45,928 Adjusted EBITDA 18,876 3,892 27,634 8,024 (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 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 CONDENSED CONSOLIDATED BALANCE SHEETS (Dollars in thousands) September 30, March 31, $ % 2021 2021 Variance Variance Assets Current assets: Cash and cash equivalents 535,590 572,787 (37,197 ) (6.5 %) Restricted cash 8,731 8,900 (169 ) (1.9 %) Trade accounts receivable, net 130,948 114,284 16,664 14.6 % Refundable income taxes 64,079 65,692 (1,613 ) (2.5 %) Other current assets 35,246 64,052 (28,806 ) (45.0 %) Total current assets 774,594 825,715 (51,121 ) (6.2 %) Property and equipment 45,214 44,284 930 2.1 % Less - accumulated depreciation and amortization 34,916 32,327 2,589 8.0 % Property and equipment, net 10,298 11,957 (1,659 ) (13.9 %) Intangible assets, net 33,970 39,730 (5,760 ) (14.5 %) Goodwill 363,895 357,446 6,449 1.8 % Deferred commissions, net 27,988 22,619 5,369 23.7 % Other assets, net 71,627 30,854 40,773 132.1 % 1,282,372 1,288,321 (5,949 ) (0.5 %) Liabilities and Stockholders' Equity Current liabilities: Trade accounts payable 44,267 39,955 4,312 10.8 % Accrued payroll and related expenses 24,427 46,438 (22,011 ) (47.4 %) Other accrued expenses 47,766 58,353 (10,587 ) (18.1 %) Acquisition escrow payable 8,731 8,900 (169.00 ) (1.9 %) Deferred revenue 11,058 11,603 (545 ) (4.7 %) Total current liabilities 136,249 165,249 (29,000 ) (17.5 %) Other liabilities 73,176 42,389 30,787 72.6 % Stockholders' equity: Preferred stock - - - n/a Common stock 14,887 14,781 106 0.7 % Additional paid-in capital 1,669,461 1,630,072 39,389 2.4 % Retained earnings 1,465,760 1,454,826 10,934 0.8 % Accumulated other comprehensive income 5,976 7,522 (1,546 ) (20.6 %) Treasury stock, at cost (2,083,137 ) (2,026,518 ) (56,619 ) (2.8 %) Total stockholders' equity 1,072,947 1,080,683 (7,736 ) (0.7 %) 1,282,372 1,288,321 (5,949 ) (0.5 %) LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Dollars in thousands) For the Three Months Ended September 30, 2021 2020 Cash flows from operating activities: Net loss (6,431 ) (23,968 ) Non-cash operating activities: Depreciation and amortization 5,819 6,901 Loss on disposal or impairment of assets 29 331 Provision for doubtful accounts 327 1,192 Deferred income taxes 141 187 Non-cash stock compensation expense 19,221 24,204 Changes in operating assets and liabilities: Accounts receivable (11,024 ) (3,724 ) Deferred commissions (1,986 ) (1,764 ) Other assets 4,072 2,799 Accounts payable and other liabilities 447 2,013 Income taxes 368 (2,478 ) Deferred revenue (82 ) 556 Net cash provided by operating activities 10,901 6,249 Cash flows from investing activities: Capital expenditures (876 ) (296 ) Payment for investment - (1,206 ) Cash paid in acquisition, net of cash received - (2,933 ) Net cash used in investing activities (876 ) (4,435 ) Cash flows from financing activities: Proceeds related to the issuance of common stock under stock and employee benefit plans 997 2,424 Shares repurchased for tax withholdings upon vesting of stock-based awards (1,181 ) (3,928 ) Acquisition of treasury stock (15,000 ) - Net cash used in financing activities (15,184 ) (1,504 ) Effect of exchange rate changes on cash (275 ) 486 Net change in cash and cash equivalents (5,434 ) 796 Cash and cash equivalents at beginning of period 549,755 664,710 Cash and cash equivalents at end of period 544,321 665,506 Supplemental cash flow information: Cash received during the period for: Income taxes (118 ) (822 ) Operating lease assets obtained in exchange for operating lease liabilities 35,691 - LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Dollars in thousands) For the Six Months Ended September 30, 2021 2020 Cash flows from operating activities: Net earnings (loss) 10,934 (45,696 ) Non-cash operating activities: Depreciation and amortization 12,404 14,955 Loss on disposal or impairment of assets 142 333 Gain on distribution from retained profits interest (30,052 ) - Provision for doubtful accounts 1,282 2,522 Deferred income taxes (771 ) (485 ) Non-cash stock compensation expense 37,717 40,689 Changes in operating assets and liabilities: Accounts receivable (18,073 ) (9,584 ) Deferred commissions (5,369 ) (3,445 ) Other assets 23,408 7,703 Accounts payable and other liabilities (36,829 ) (20,671 ) Income taxes (632 ) (3,583 ) Deferred revenue (501 ) (101 ) Net cash used in operating activities (6,340 ) (17,363 ) Cash flows from investing activities: Capital expenditures (1,303 ) (1,128 ) Payment for investment - (1,873 ) Distribution from retained profits interest 31,000 - Cash paid in acquisition, net of cash received (8,368 ) (2,933 ) Net cash provided by (used in) investing activities 21,329 (5,934 ) Cash flows from financing activities: Proceeds related to the issuance of common stock under stock and employee benefit plans 4,278 3,561 Shares repurchased for tax withholdings upon vesting of stock-based awards (12,542 ) (5,755 ) Acquisition of treasury stock (44,077 ) (42,312 ) Net cash used in financing activities (52,341 ) (44,506 ) Effect of exchange rate changes on cash (14 ) 683 Net change in cash and cash equivalents (37,366 ) (67,120 ) Cash and cash equivalents at beginning of period 581,687 732,626 Cash and cash equivalents at end of period 544,321 665,506 Supplemental cash flow information: Cash received during the period for: Income taxes (2,569 ) (2,863 ) Operating lease assets obtained in exchange for operating lease liabilities 35,691 - LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES CALCULATION OF FREE CASH FLOW TO EQUITY (1) (Unaudited) (Dollars in thousands) 06/30/20 09/30/20 12/31/20 03/31/21 FY2021 06/30/21 09/30/21 FY2022 Net Cash Provided by (Used in) Operating Activities (23,612 ) 6,249 14,690 (17,887 ) (20,560 ) (17,241 ) 10,901 (6,340 ) Less: Capital expenditures (832 ) (296 ) (678 ) (376 ) (2,182 ) (427 ) (876 ) (1,303 ) Free Cash Flow to Equity (24,444 ) 5,953 14,012 (18,263 ) (22,742 ) (17,668 ) 10,025 (7,643 ) (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. LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (Dollars in thousands, except per share amounts) Q2 FY22 to Q2 FY21 06/30/20 09/30/20 12/31/20 03/31/21 FY2021 06/30/21 09/30/21 FY2022 % $ Revenues 99,437 104,661 119,753 119,175 443,026 119,038 127,290 246,328 21.6 % 22,629 Cost of revenue 34,465 34,897 37,085 37,557 144,004 34,315 35,079 69,394 0.5 % 182 Gross profit 64,972 69,764 82,668 81,618 299,022 84,723 92,211 176,934 32.2 % 22,447 % Gross margin 65.3 % 66.7 % 69.0 % 68.5 % 67.5 % 71.2 % 72.4 % 71.8 % Operating expenses Research and development 26,989 31,035 30,608 46,479 135,111 34,776 35,788 70,564 15.3 % 4,753 Sales and marketing 38,627 41,705 43,904 53,307 177,543 41,979 39,509 81,488 (5.3 %) (2,196 ) General and administrative 23,368 24,495 23,943 32,395 104,201 24,291 23,078 47,369 (5.8 %) (1,417 ) Gains, losses and other items, net 1,995 (619 ) (6 ) 1,345 2,715 1,278 18 1,296 102.9 % 637 Total operating expenses 90,979 96,616 98,449 133,526 419,570 102,324 98,393 200,717 1.8 % 1,777 Loss from operations (26,007 ) (26,852 ) (15,781 ) (51,908 ) (120,548 ) (17,601 ) (6,182 ) (23,783 ) 77.0 % 20,670 % Margin -26.2 % -25.7 % -13.2 % -43.6 % -27.2 % -14.8 % -4.9 % -9.7 % Total other income (expense), net 463 (225 ) (86 ) (404 ) (252 ) 30,601 150 30,751 166.7 % 375 Loss from operations before income taxes (25,544 ) (27,077 ) (15,867 ) (52,312 ) (120,800 ) 13,000 (6,032 ) 6,968 77.7 % 21,045 Income taxes benefit (3,816 ) (3,109 ) (4,142 ) (19,465 ) (30,532 ) (4,365 ) 399 (3,966 ) 112.8 % 3,508 Net earnings (loss) (21,728 ) (23,968 ) (11,725 ) (32,847 ) (90,268 ) 17,365 (6,431 ) 10,934 73.2 % 17,537 Diluted earnings (loss) per share (0.33 ) (0.36 ) (0.18 ) (0.49 ) (1.36 ) 0.25 (0.09 ) 0.16 74.0 % 0.27 Some earnings (loss) per share amounts may not add due to rounding. Basic shares 65,570 66,010 66,523 67,111 66,304 68,328 68,042 68,185 Diluted shares 65,570 66,010 66,523 67,111 66,304 69,605 69,333 69,473 LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES RECONCILIATION OF GAAP TO NON-GAAP EPS (1) (Unaudited) (Dollars in thousands, except per share amounts) 06/30/20 09/30/20 12/31/20 03/31/21 FY2021 06/30/21 09/30/21 FY 2022 Income (loss) from operations before income taxes (25,544 ) (27,077 ) (15,867 ) (52,312 ) (120,800 ) 13,000 (6,032 ) 6,968 Income taxes (benefit) (3,816 ) (3,109 ) (4,142 ) (19,465 ) (30,532 ) (4,365 ) 399 (3,966 ) Net earnings (loss) (21,728 ) (23,968 ) (11,725 ) (32,847 ) (90,268 ) 17,365 (6,431 ) 10,934 Earnings (loss) per share: Basic (0.33 ) (0.36 ) (0.18 ) (0.49 ) (1.36 ) 0.25 (0.09 ) 0.16 Diluted (0.33 ) (0.36 ) (0.18 ) (0.49 ) (1.36 ) 0.25 (0.09 ) 0.16 Excluded items: Purchased intangible asset amortization (cost of revenue) 5,306 4,350 4,213 4,177 18,046 4,645 4,612 9,257 Non-cash stock compensation (cost of revenue and operating expenses) 16,485 24,204 23,894 47,124 111,707 18,496 19,221 37,717 Restructuring and merger charges (gains, losses, and other) 1,995 (619 ) (6 ) 1,345 2,715 1,278 18 1,296 Transformation costs (general and administrative) 3,605 258 - - 3,863 - - - Gain on retained profits interest (other income) - - - - - (30,052 ) - (30,052 ) Total excluded items 27,391 28,193 28,101 52,646 136,331 (5,633 ) 23,851 18,218 Income from operations before income taxes and excluding items 1,847 1,116 12,234 334 15,531 7,367 17,819 25,186 Income taxes expense (benefit) 934 (1,291 ) 2,347 (2,628 ) (638 ) 865 (12 ) 853 Non-GAAP net earnings 913 2,407 9,887 2,962 16,169 6,502 17,831 24,333 Non-GAAP earnings per share: Basic 0.01 0.04 0.15 0.04 0.24 0.10 0.26 0.36 Diluted 0.01 0.03 0.14 0.04 0.23 0.09 0.26 0.35 Basic weighted average shares 65,570 66,010 66,523 67,111 66,304 68,328 68,042 68,185 Diluted weighted average shares 67,337 68,804 69,775 69,935 68,963 69,605 69,333 69,473 Some totals may not add due to rounding (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. LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES RECONCILIATION OF GAAP TO NON-GAAP EXPENSES (1) (Unaudited) (Dollars in thousands) 06/30/20 09/30/20 12/31/20 03/31/21 FY2021 06/30/21 09/30/21 FY2022 Expenses: Cost of revenue 34,465 34,897 37,085 37,557 144,004 34,315 35,079 69,394 Research and development 26,989 31,035 30,608 46,479 135,111 34,776 35,788 70,564 Sales and marketing 38,627 41,705 43,904 53,307 177,543 41,979 39,509 81,488 General and administrative 23,368 24,495 23,943 32,395 104,201 24,291 23,078 47,369 Gains, losses and other items, net 1,995 (619 ) (6 ) 1,345 2,715 1,278 18 1,296 Gross profit: 64,972 69,764 82,668 81,618 299,022 84,723 92,211 176,934 % Gross margin 65.3 % 66.7 % 69.0 % 68.5 % 67.5 % 71.2 % 72.4 % 71.8 % Excluded items: Purchased intangible asset amortization (cost of revenue) 5,306 4,350 4,213 4,177 18,046 4,645 4,612 9,257 Non-cash stock compensation (cost of revenue) 775 913 988 2,624 5,300 790 948 1,738 Non-cash stock compensation (research and development) 5,886 7,713 7,376 17,985 38,960 5,348 7,184 12,532 Non-cash stock compensation (sales and marketing) 7,123 9,233 9,212 14,833 40,401 6,793 6,749 13,542 Non-cash stock compensation (general and administrative) 2,701 6,345 6,318 11,682 27,046 5,565 4,340 9,905 Restructuring and merger charges (gains, losses, and other) 1,995 (619 ) (6 ) 1,345 2,715 1,278 18 1,296 Transformation costs (general and administrative) 3,605 258 - - 3,863 - - - Gain on retained profits interest (other income) - - - - - (30,052 ) - (30,052 ) Total excluded items 27,391 28,193 28,101 52,646 136,331 (5,633 ) 23,851 18,218 Expenses, excluding items: Cost of revenue 28,384 29,634 31,884 30,756 120,658 28,880 29,519 58,399 Research and development 21,103 23,322 23,232 28,494 96,151 29,428 28,604 58,032 Sales and marketing 31,504 32,472 34,692 38,474 137,142 35,186 32,760 67,946 General and administrative 17,062 17,892 17,625 20,713 73,292 18,726 18,738 37,464 Gains, losses and other items, net - - - - - - - - Gross profit, excluding items: 71,053 75,027 87,869 88,419 322,368 90,158 97,771 187,929 % Gross margin 71.5 % 71.7 % 73.4 % 74.2 % 72.8 % 75.7 % 76.8 % 76.3 % (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 INCOME (LOSS) GUIDANCE (1) (Unaudited) (Dollars in thousands) For the quarter ending For the year ending December 31, 2021 March 31, 2022 GAAP loss from operations (20,000 ) (70,000 ) Excluded items: Purchased intangible asset amortization 5,000 19,000 Non-cash stock compensation 25,000 90,000 Restructuring and transformation costs - 1,000 Total excluded items 30,000 110,000 Non-GAAP income from operations $ 10,000 $ 40,000 (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 Q2 FISCAL 2022 FINANCIAL RESULTS EXPLANATION OF NON-GAAP MEASURES AND OTHER KEY METRICS 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 (loss) per share, income (loss) 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 and other contract 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. Transformation costs: In previous years, we incurred significant expenses to separate the financial statements of our operating segments, with particular focus on segment-level balance sheets, and to evaluate portfolio priorities. Our criteria for excluding 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, and through most of fiscal 2019, 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. In the first and second quarters of fiscal 2021 in response to the potential COVID-19 pandemic impact on our business, we incurred significant costs associated with the assessment of strategic and operating plans, including our long-term location strategy, and assistance in implementing the restructuring activities as a result of this assessment. Our criteria for excluding these costs are the same. We believe excluding these items from our non-GAAP financial measures is useful for investors and provides meaningful supplemental information. Our non-GAAP financial schedules are: Non-GAAP EPS, Non-GAAP Income from Operations, and Non-GAAP expenses: Our Non-GAAP earnings per share, Non-GAAP income from operations, and Non-GAAP expenses 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. 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