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 First Quarter Results and Raises Full Year Outlook By: LiveRamp via Business Wire August 05, 2021 at 16:05 PM EDT Total Revenue Up 20% GAAP Gross Margin of 71% and Non-GAAP Gross Margin of 76% Now Expects Full Year Revenue to Increase by Approximately 18% LiveRamp’s Global Authenticated Traffic Solution (ATS) Adopted by Over 450 Publishers LiveRamp® (NYSE: RAMP), the leading global data connectivity platform, today announced its financial results for the quarter ended June 30, 2021. This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20210805006081/en/ First Quarter Financial Highlights Total revenue was $119 million, up 20% compared to the prior year period. Subscription revenue was $97 million, up 16% compared to the prior year period and contributed 81% of total revenue. Marketplace & Other revenue was $23 million, up 36% compared to the prior year period. GAAP gross profit was $85 million, up 30% compared to the prior year period. GAAP gross margin of 71% expanded 6 percentage points. Non-GAAP gross profit was $90 million, up 27% compared to the prior year period. Non-GAAP gross margin of 76% expanded 4 percentage points. GAAP operating loss was $18 million compared to a GAAP operating loss of $26 million in the prior year period. Non-GAAP operating income was $7 million compared to a non-GAAP operating income of $1 million in the prior year period. GAAP earnings per share were $0.25, and non-GAAP earnings per share were $0.09. GAAP earnings included a $30 million investment gain reported in other income. Net cash used in operating activities was $17 million compared to net cash used in operating activities of $24 million in the prior year period. Cash and cash equivalents totaled $541 million with no debt at quarter end. Since March 31, 2021, LiveRamp repurchased 1 million shares for approximately $44 million under the current share repurchase program. Since inception of the share repurchase program in August 2011, the Company has returned approximately $1.2 billion in capital to shareholders. A reconciliation between GAAP and non-GAAP results is provided in the schedules to this press release. “Global companies are increasingly turning to LiveRamp to power their customer data strategies and momentum across our key expansion levers continues to build,” said LiveRamp CEO Scott Howe. “In the quarter, we added 30 net new customers and total revenue growth accelerated to 20%. Connected television revenue was up 80% and our global Safe Haven flywheel is accelerating. We now work with 30% of big box grocery and retail in the US and 40% of the world’s top 50 consumer packaged goods companies.” “Our Q1 results were strong, and our trendlines are building,” added LiveRamp President and CFO Warren Jenson. “Revenue growth is accelerating, we had another elevated bookings quarter, and we again delivered a record gross margin performance. On a non-GAAP basis, gross margin was 76%, and we were profitable for the fifth consecutive quarter.” GAAP and Non-GAAP Results The following table summarizes the Company’s financial results for its first fiscal quarter ($ in millions): Q1 Fiscal 2022 Q1 Fiscal 2021 Results Results GAAP Non-GAAP GAAP Non-GAAP Subscription revenue $97 — $83 — YoY change % 16% 21% Marketplace & other revenue $23 — $17 — YoY change % 36% 16% Total revenue $119 — $99 — YoY change % 20% 21% Gross profit $85 $90 $65 $71 % Gross margin 71% 76% 65% 71% YoY change, pts 6 pts 4 pts 9 pts 9 pts Operating income (loss) ($18) $7 ($26) $1 % Operating margin (15%) 6% (26%) 1% YoY change, pts 11 pts 4 pts 32 pts 29 pts Net income (loss) $17 $7 ($22) $1 Earnings (loss) per share $0.25 $0.09 ($0.33) $0.01 Shares to Calculate EPS 69.6 69.6 65.6 67.3 YoY change % 3% 3% (5%) (6%) Net operating cash flow ($17) — ($24) — Free cash flow to equity — ($18) — ($20) 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 25 supply-side platforms (SSPs) live or committed to implementing ATS. In addition, there are over 45 demand-side platforms (DSPs) live or committed to bid on RampID, including The Trade Desk, Amobee, Criteo, dataxu, and MediaMath. Lastly, to date, more than 450 publishers globally have adopted ATS, including 75% of the U.S. comScore 50. LiveRamp announced an expanded global partnership with Carrefour to enable robust data collaboration and analytics capabilities through LiveRamp’s Safe Haven. The partnership spans nine international markets and signals the growing momentum of Safe Haven, which has now been adopted by more than 55 customers across retail, grocery, CPG, consumer electronics and other verticals. During the first quarter, subscription net retention was 103% and platform net retention was 108%. Current remaining performance obligations (CRPO), which is contracted and committed revenue expected to be recognized over the next 12 months, was $256 million, up 15% compared to the first quarter of last year. LiveRamp added 30 net new direct subscription customers in the first quarter. Customer count at quarter end was 855, up from 780 a year ago. LiveRamp has 70 customers whose subscription contracts exceed $1 million in annual revenue, up 17% 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 second quarter of fiscal 2022, LiveRamp expects to report: Revenue of approximately $124 million, an increase of approximately 18% year-over-year GAAP operating loss of approximately $22 million Non-GAAP operating income of approximately $4 million For fiscal 2022, LiveRamp increases its outlook and now expects to report: Revenue of approximately $522 million, an increase of approximately 18% year-over-year GAAP operating loss of approximately $96 million Non-GAAP operating income of approximately $15 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 2021. 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Ⓡ, RampID™, 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 June 30, $ % 2021 2020 Variance Variance Revenues 119,038 99,437 19,601 19.7 % Cost of revenue 34,315 34,465 (150 ) (0.4 %) Gross profit 84,723 64,972 19,751 30.4 % % Gross margin 71.2 % 65.3 % Operating expenses: Research and development 34,776 26,989 7,787 28.9 % Sales and marketing 41,979 38,627 3,352 8.7 % General and administrative 24,291 23,368 923 3.9 % Gains, losses and other items, net 1,278 1,995 (717 ) (35.9 %) Total operating expenses 102,324 90,979 11,345 12.5 % Loss from operations (17,601 ) (26,007 ) 8,406 32.3 % % Margin -14.8 % -26.2 % Total other income, net 30,601 463 30,138 6509.3 % Income (loss) from operations before income taxes 13,000 (25,544 ) 38,544 150.9 % Income tax benefit (4,365 ) (3,816 ) (549 ) (14.4 %) Net earnings (loss) 17,365 (21,728 ) 39,093 179.9 % Basic earnings (loss) per share 0.25 (0.33 ) 0.59 176.7 % Diluted earnings (loss) per share: 0.25 (0.33 ) 0.58 175.3 % Basic weighted average shares 68,328 65,570 Diluted weighted average shares 69,605 65,570 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 June 30, 2021 2020 Income (loss) from operations before income taxes 13,000 (25,544 ) Income taxes (benefit) (4,365 ) (3,816 ) Net earnings (loss) 17,365 (21,728 ) Earnings (loss) per share: Basic 0.25 (0.33 ) Diluted 0.25 (0.33 ) Excluded items: Purchased intangible asset amortization (cost of revenue) 4,645 5,306 Non-cash stock compensation (cost of revenue and operating expenses) 18,496 16,485 Transformation costs (general and administrative) - 3,605 Restructuring and merger charges (gains, losses, and other) 1,278 1,995 Gain on retained profits interest (other income) (30,052 ) - Total excluded items (5,633 ) 27,391 Income from operations before income taxes and excluding items 7,367 1,847 Income taxes (2) 865 934 Non-GAAP net earnings 6,502 913 Non-GAAP earnings per share: Basic 0.10 0.01 Diluted 0.09 0.01 Basic weighted average shares 68,328 65,570 Diluted weighted average shares 69,605 67,337 (1) This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our condensed consolidated financial statements prepared in accordance with GAAP. For a detailed explanation of the adjustments made to comparable GAAP measures, the reasons why management uses these measures and the material limitations on the usefulness of these measures, please see Appendix A. (2) Income taxes were calculated using an effective non-GAAP tax rate of 11.7% and 50.5% in the first quarter of fiscal 2022 and 2021, respectively. The difference between our GAAP and non-GAAP tax rates were primarily due to the net tax effects of the excluded items. 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 June 30, 2021 2020 Loss from operations (17,601 ) (26,007 ) Excluded items: Purchased intangible asset amortization (cost of revenue) 4,645 5,306 Non-cash stock compensation (cost of revenue and operating expenses) 18,496 16,485 Transformation costs (general and administrative) - 3,605 Restructuring and merger charges (gains, losses, and other) 1,278 1,995 Total excluded items 24,419 27,391 Income from operations before excluded items 6,818 1,384 (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 June 30, 2021 2020 Net earnings (loss) 17,365 (21,728 ) Income tax benefit (4,365 ) (3,816 ) Total other income, net 30,601 463 Loss from operations (17,601 ) (26,007 ) Depreciation and amortization 6,585 8,054 EBITDA (11,016 ) (17,953 ) Other adjustments: Non-cash stock compensation (cost of revenue and operating expenses) 18,496 16,485 Transformation costs (general and administrative) - 3,605 Restructuring and merger charges (gains, losses, and other) 1,278 1,995 Other adjustments 19,774 22,085 Adjusted EBITDA 8,758 4,132 (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) June 30, March 31, $ % 2021 2021 Variance Variance Assets Current assets: Cash and cash equivalents 541,024 572,787 (31,763 ) (5.5 %) Restricted cash 8,731 8,900 (169 ) (1.9 %) Trade accounts receivable, net 120,434 114,284 6,150 5.4 % Refundable income taxes 64,221 65,692 (1,471 ) (2.2 %) Other current assets 37,049 64,052 (27,003 ) (42.2 %) Total current assets 771,459 825,715 (54,256 ) (6.6 %) Property and equipment 44,659 44,284 375 0.8 % Less - accumulated depreciation and amortization 34,036 32,327 1,709 5.3 % Property and equipment, net 10,623 11,957 (1,334 ) (11.2 %) Intangible assets, net 38,607 39,730 (1,123 ) (2.8 %) Goodwill 364,241 357,446 6,795 1.9 % Deferred commissions, net 26,002 22,619 3,383 15.0 % Other assets, net 38,973 30,854 8,119 26.3 % 1,249,905 1,288,321 (38,416 ) (3.0 %) Liabilities and Stockholders' Equity Current liabilities: Trade accounts payable 32,231 39,955 (7,724 ) (19.3 %) Accrued payroll and related expenses 20,513 46,438 (25,925 ) (55.8 %) Other accrued expenses 57,511 58,353 (842 ) (1.4 %) Acquisition escrow payable 8,731 8,900 (169.00 ) (1.9 %) Deferred revenue 11,197 11,603 (406 ) (3.5 %) Total current liabilities 130,183 165,249 (35,066 ) (21.2 %) Other liabilities 39,126 42,389 (3,263 ) (7.7 %) Stockholders' equity: Preferred stock - - - n/a Common stock 14,866 14,781 85 0.6 % Additional paid-in capital 1,653,525 1,630,072 23,453 1.4 % Retained earnings 1,472,191 1,454,826 17,365 1.2 % Accumulated other comprehensive income 6,970 7,522 (552 ) (7.3 %) Treasury stock, at cost (2,066,956 ) (2,026,518 ) (40,438 ) (2.0 %) Total stockholders' equity 1,080,596 1,080,683 (87 ) (0.0 %) 1,249,905 1,288,321 (38,416 ) (3.0 %) LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Dollars in thousands) For the Three Months Ended June 30, 2021 2020 Cash flows from operating activities: Net earnings (loss) 17,365 (21,728 ) Non-cash operating activities: Depreciation and amortization 6,585 8,054 Loss on disposal or impairment of assets 113 2 Gain on distribution from retained profits interest (30,052 ) - Provision for doubtful accounts 955 1,330 Deferred income taxes (912 ) (672 ) Non-cash stock compensation expense 18,496 16,485 Changes in operating assets and liabilities: Accounts receivable (7,049 ) (5,860 ) Deferred commissions (3,383 ) (1,681 ) Other assets 19,336 4,904 Accounts payable and other liabilities (37,276 ) (22,684 ) Income taxes (1,000 ) (1,105 ) Deferred revenue (419 ) (657 ) Net cash used in operating activities (17,241 ) (23,612 ) Cash flows from investing activities: Capital expenditures (427 ) (832 ) Payment for investment - (667 ) Distribution from retained profits interest 31,000 - Cash paid in acquisition, net of cash received (8,368 ) - Net cash provided by (used in) investing activities 22,205 (1,499 ) Cash flows from financing activities: Proceeds related to the issuance of common stock under stock and employee benefit plans 3,281 1,137 Shares repurchased for tax withholdings upon vesting of stock-based awards (11,361 ) (1,827 ) Acquisition of treasury stock (29,077 ) (42,312 ) Net cash used in financing activities (37,157 ) (43,002 ) Effect of exchange rate changes on cash 261 197 Net change in cash and cash equivalents (31,932 ) (67,916 ) Cash and cash equivalents at beginning of period 581,687 732,626 Cash and cash equivalents at end of period 549,755 664,710 Supplemental cash flow information: Cash paid (received) during the period for: Income taxes (2,451 ) (2,041 ) 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 Net Cash Provided by (Used in) Operating Activities (23,612 ) 6,249 14,690 (17,887 ) (20,560 ) (17,241 ) Less: Capital expenditures (832 ) (296 ) (678 ) (376 ) (2,182 ) (427 ) Free Cash Flow to Equity (24,444 ) 5,953 14,012 (18,263 ) (22,742 ) (17,668 ) (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) Q1 FY22 to Q1 FY21 06/30/20 09/30/20 12/31/20 03/31/21 FY2021 06/30/21 % $ Revenues 99,437 104,661 119,753 119,175 443,026 119,038 19.7 % 19,601 Cost of revenue 34,465 34,897 37,085 37,557 144,004 34,315 (0.4 %) (150 ) Gross profit 64,972 69,764 82,668 81,618 299,022 84,723 30.4 % 19,751 % Gross margin 65.3 % 66.7 % 69.0 % 68.5 % 67.5 % 71.2 % Operating expenses Research and development 26,989 31,035 30,608 46,479 135,111 34,776 28.9 % 7,787 Sales and marketing 38,627 41,705 43,904 53,307 177,543 41,979 8.7 % 3,352 General and administrative 23,368 24,495 23,943 32,395 104,201 24,291 3.9 % 923 Gains, losses and other items, net 1,995 (619 ) (6 ) 1,345 2,715 1,278 (35.9 %) (717 ) Total operating expenses 90,979 96,616 98,449 133,526 419,570 102,324 12.5 % 11,345 Loss from operations (26,007 ) (26,852 ) (15,781 ) (51,908 ) (120,548 ) (17,601 ) 32.3 % 8,406 % Margin -26.2 % -25.7 % -13.2 % -43.6 % -27.2 % -14.8 % Total other income, net 463 (225 ) (86 ) (404 ) (252 ) 30,601 6509.3 % 30,138 Income (loss) from operations before income taxes (25,544 ) (27,077 ) (15,867 ) (52,312 ) (120,800 ) 13,000 150.9 % 38,544 Income taxes benefit (3,816 ) (3,109 ) (4,142 ) (19,465 ) (30,532 ) (4,365 ) (14.4 %) (549 ) Net earnings (loss) (21,728 ) (23,968 ) (11,725 ) (32,847 ) (90,268 ) 17,365 179.9 % 39,093 Diluted earnings (loss) per share (0.33 ) (0.36 ) (0.18 ) (0.49 ) (1.36 ) 0.25 175.3 % 0.58 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 Diluted shares 65,570 66,010 66,523 67,111 66,304 69,605 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 Income (loss) from operations before income taxes (25,544 ) (27,077 ) (15,867 ) (52,312 ) (120,800 ) 13,000 Income taxes (benefit) (3,816 ) (3,109 ) (4,142 ) (19,465 ) (30,532 ) (4,365 ) Net earnings (loss) (21,728 ) (23,968 ) (11,725 ) (32,847 ) (90,268 ) 17,365 Earnings (loss) per share: Basic (0.33 ) (0.36 ) (0.18 ) (0.49 ) (1.36 ) 0.25 Diluted (0.33 ) (0.36 ) (0.18 ) (0.49 ) (1.36 ) 0.25 Excluded items: Purchased intangible asset amortization (cost of revenue) 5,306 4,350 4,213 4,177 18,046 4,645 Non-cash stock compensation (cost of revenue and operating expenses) 16,485 24,204 23,894 47,124 111,707 18,496 Restructuring and merger charges (gains, losses, and other) 1,995 (619 ) (6 ) 1,345 2,715 1,278 Transformation costs (general and administrative) 3,605 258 - - 3,863 - Gain on retained profits interest (other income) - - - - - (30,052 ) Total excluded items 27,391 28,193 28,101 52,646 136,331 (5,633 ) Income from operations before income taxes and excluding items 1,847 1,116 12,234 334 15,531 7,367 Income taxes expense (benefit) 934 (1,291 ) 2,347 (2,628 ) (638 ) 865 Non-GAAP net earnings 913 2,407 9,887 2,962 16,169 6,502 Non-GAAP earnings per share: Basic 0.01 0.04 0.15 0.04 0.24 0.10 Diluted 0.01 0.03 0.14 0.04 0.23 0.09 Basic weighted average shares 65,570 66,010 66,523 67,111 66,304 68,328 Diluted weighted average shares 67,337 68,804 69,775 69,935 68,963 69,605 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 Expenses: Cost of revenue 34,465 34,897 37,085 37,557 144,004 34,315 Research and development 26,989 31,035 30,608 46,479 135,111 34,776 Sales and marketing 38,627 41,705 43,904 53,307 177,543 41,979 General and administrative 23,368 24,495 23,943 32,395 104,201 24,291 Gains, losses and other items, net 1,995 (619 ) (6 ) 1,345 2,715 1,278 Gross profit: 64,972 69,764 82,668 81,618 299,022 84,723 % Gross margin 65.3 % 66.7 % 69.0 % 68.5 % 67.5 % 71.2 % Excluded items: Purchased intangible asset amortization (cost of revenue) 5,306 4,350 4,213 4,177 18,046 4,645 Non-cash stock compensation (cost of revenue) 775 913 988 2,624 5,300 790 Non-cash stock compensation (research and development) 5,886 7,713 7,376 17,985 38,960 5,348 Non-cash stock compensation (sales and marketing) 7,123 9,233 9,212 14,833 40,401 6,793 Non-cash stock compensation (general and administrative) 2,701 6,345 6,318 11,682 27,046 5,565 Restructuring and merger charges (gains, losses, and other) 1,995 (619 ) (6 ) 1,345 2,715 1,278 Transformation costs (general and administrative) 3,605 258 - - 3,863 - Gain on retained profits interest (other income) - - - - - (30,052 ) Total excluded items 27,391 28,193 28,101 52,646 136,331 (5,633 ) Expenses, excluding items: Cost of revenue 28,384 29,634 31,884 30,756 120,658 28,880 Research and development 21,103 23,322 23,232 28,494 96,151 29,428 Sales and marketing 31,504 32,472 34,692 38,474 137,142 35,186 General and administrative 17,062 17,892 17,625 20,713 73,292 18,726 Gains, losses and other items, net - - - - - - Gross profit, excluding items: 71,053 75,027 87,869 88,419 322,368 90,158 % Gross margin 71.5 % 71.7 % 73.4 % 74.2 % 72.8 % 75.7 % (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 September 30, 2021 March 31, 2022 GAAP loss from operations (22,000 ) (96,000 ) Excluded items: Purchased intangible asset amortization 5,000 19,000 Non-cash stock compensation 21,000 91,000 Restructuring and transformation costs - 1,000 Total excluded items 26,000 111,000 Non-GAAP income from operations $ 4,000 $ 15,000 (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 Q1 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/20210805006081/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 First Quarter Results and Raises Full Year Outlook By: LiveRamp via Business Wire August 05, 2021 at 16:05 PM EDT Total Revenue Up 20% GAAP Gross Margin of 71% and Non-GAAP Gross Margin of 76% Now Expects Full Year Revenue to Increase by Approximately 18% LiveRamp’s Global Authenticated Traffic Solution (ATS) Adopted by Over 450 Publishers LiveRamp® (NYSE: RAMP), the leading global data connectivity platform, today announced its financial results for the quarter ended June 30, 2021. This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20210805006081/en/ First Quarter Financial Highlights Total revenue was $119 million, up 20% compared to the prior year period. Subscription revenue was $97 million, up 16% compared to the prior year period and contributed 81% of total revenue. Marketplace & Other revenue was $23 million, up 36% compared to the prior year period. GAAP gross profit was $85 million, up 30% compared to the prior year period. GAAP gross margin of 71% expanded 6 percentage points. Non-GAAP gross profit was $90 million, up 27% compared to the prior year period. Non-GAAP gross margin of 76% expanded 4 percentage points. GAAP operating loss was $18 million compared to a GAAP operating loss of $26 million in the prior year period. Non-GAAP operating income was $7 million compared to a non-GAAP operating income of $1 million in the prior year period. GAAP earnings per share were $0.25, and non-GAAP earnings per share were $0.09. GAAP earnings included a $30 million investment gain reported in other income. Net cash used in operating activities was $17 million compared to net cash used in operating activities of $24 million in the prior year period. Cash and cash equivalents totaled $541 million with no debt at quarter end. Since March 31, 2021, LiveRamp repurchased 1 million shares for approximately $44 million under the current share repurchase program. Since inception of the share repurchase program in August 2011, the Company has returned approximately $1.2 billion in capital to shareholders. A reconciliation between GAAP and non-GAAP results is provided in the schedules to this press release. “Global companies are increasingly turning to LiveRamp to power their customer data strategies and momentum across our key expansion levers continues to build,” said LiveRamp CEO Scott Howe. “In the quarter, we added 30 net new customers and total revenue growth accelerated to 20%. Connected television revenue was up 80% and our global Safe Haven flywheel is accelerating. We now work with 30% of big box grocery and retail in the US and 40% of the world’s top 50 consumer packaged goods companies.” “Our Q1 results were strong, and our trendlines are building,” added LiveRamp President and CFO Warren Jenson. “Revenue growth is accelerating, we had another elevated bookings quarter, and we again delivered a record gross margin performance. On a non-GAAP basis, gross margin was 76%, and we were profitable for the fifth consecutive quarter.” GAAP and Non-GAAP Results The following table summarizes the Company’s financial results for its first fiscal quarter ($ in millions): Q1 Fiscal 2022 Q1 Fiscal 2021 Results Results GAAP Non-GAAP GAAP Non-GAAP Subscription revenue $97 — $83 — YoY change % 16% 21% Marketplace & other revenue $23 — $17 — YoY change % 36% 16% Total revenue $119 — $99 — YoY change % 20% 21% Gross profit $85 $90 $65 $71 % Gross margin 71% 76% 65% 71% YoY change, pts 6 pts 4 pts 9 pts 9 pts Operating income (loss) ($18) $7 ($26) $1 % Operating margin (15%) 6% (26%) 1% YoY change, pts 11 pts 4 pts 32 pts 29 pts Net income (loss) $17 $7 ($22) $1 Earnings (loss) per share $0.25 $0.09 ($0.33) $0.01 Shares to Calculate EPS 69.6 69.6 65.6 67.3 YoY change % 3% 3% (5%) (6%) Net operating cash flow ($17) — ($24) — Free cash flow to equity — ($18) — ($20) 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 25 supply-side platforms (SSPs) live or committed to implementing ATS. In addition, there are over 45 demand-side platforms (DSPs) live or committed to bid on RampID, including The Trade Desk, Amobee, Criteo, dataxu, and MediaMath. Lastly, to date, more than 450 publishers globally have adopted ATS, including 75% of the U.S. comScore 50. LiveRamp announced an expanded global partnership with Carrefour to enable robust data collaboration and analytics capabilities through LiveRamp’s Safe Haven. The partnership spans nine international markets and signals the growing momentum of Safe Haven, which has now been adopted by more than 55 customers across retail, grocery, CPG, consumer electronics and other verticals. During the first quarter, subscription net retention was 103% and platform net retention was 108%. Current remaining performance obligations (CRPO), which is contracted and committed revenue expected to be recognized over the next 12 months, was $256 million, up 15% compared to the first quarter of last year. LiveRamp added 30 net new direct subscription customers in the first quarter. Customer count at quarter end was 855, up from 780 a year ago. LiveRamp has 70 customers whose subscription contracts exceed $1 million in annual revenue, up 17% 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 second quarter of fiscal 2022, LiveRamp expects to report: Revenue of approximately $124 million, an increase of approximately 18% year-over-year GAAP operating loss of approximately $22 million Non-GAAP operating income of approximately $4 million For fiscal 2022, LiveRamp increases its outlook and now expects to report: Revenue of approximately $522 million, an increase of approximately 18% year-over-year GAAP operating loss of approximately $96 million Non-GAAP operating income of approximately $15 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 2021. 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Ⓡ, RampID™, 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 June 30, $ % 2021 2020 Variance Variance Revenues 119,038 99,437 19,601 19.7 % Cost of revenue 34,315 34,465 (150 ) (0.4 %) Gross profit 84,723 64,972 19,751 30.4 % % Gross margin 71.2 % 65.3 % Operating expenses: Research and development 34,776 26,989 7,787 28.9 % Sales and marketing 41,979 38,627 3,352 8.7 % General and administrative 24,291 23,368 923 3.9 % Gains, losses and other items, net 1,278 1,995 (717 ) (35.9 %) Total operating expenses 102,324 90,979 11,345 12.5 % Loss from operations (17,601 ) (26,007 ) 8,406 32.3 % % Margin -14.8 % -26.2 % Total other income, net 30,601 463 30,138 6509.3 % Income (loss) from operations before income taxes 13,000 (25,544 ) 38,544 150.9 % Income tax benefit (4,365 ) (3,816 ) (549 ) (14.4 %) Net earnings (loss) 17,365 (21,728 ) 39,093 179.9 % Basic earnings (loss) per share 0.25 (0.33 ) 0.59 176.7 % Diluted earnings (loss) per share: 0.25 (0.33 ) 0.58 175.3 % Basic weighted average shares 68,328 65,570 Diluted weighted average shares 69,605 65,570 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 June 30, 2021 2020 Income (loss) from operations before income taxes 13,000 (25,544 ) Income taxes (benefit) (4,365 ) (3,816 ) Net earnings (loss) 17,365 (21,728 ) Earnings (loss) per share: Basic 0.25 (0.33 ) Diluted 0.25 (0.33 ) Excluded items: Purchased intangible asset amortization (cost of revenue) 4,645 5,306 Non-cash stock compensation (cost of revenue and operating expenses) 18,496 16,485 Transformation costs (general and administrative) - 3,605 Restructuring and merger charges (gains, losses, and other) 1,278 1,995 Gain on retained profits interest (other income) (30,052 ) - Total excluded items (5,633 ) 27,391 Income from operations before income taxes and excluding items 7,367 1,847 Income taxes (2) 865 934 Non-GAAP net earnings 6,502 913 Non-GAAP earnings per share: Basic 0.10 0.01 Diluted 0.09 0.01 Basic weighted average shares 68,328 65,570 Diluted weighted average shares 69,605 67,337 (1) This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our condensed consolidated financial statements prepared in accordance with GAAP. For a detailed explanation of the adjustments made to comparable GAAP measures, the reasons why management uses these measures and the material limitations on the usefulness of these measures, please see Appendix A. (2) Income taxes were calculated using an effective non-GAAP tax rate of 11.7% and 50.5% in the first quarter of fiscal 2022 and 2021, respectively. The difference between our GAAP and non-GAAP tax rates were primarily due to the net tax effects of the excluded items. 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 June 30, 2021 2020 Loss from operations (17,601 ) (26,007 ) Excluded items: Purchased intangible asset amortization (cost of revenue) 4,645 5,306 Non-cash stock compensation (cost of revenue and operating expenses) 18,496 16,485 Transformation costs (general and administrative) - 3,605 Restructuring and merger charges (gains, losses, and other) 1,278 1,995 Total excluded items 24,419 27,391 Income from operations before excluded items 6,818 1,384 (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 June 30, 2021 2020 Net earnings (loss) 17,365 (21,728 ) Income tax benefit (4,365 ) (3,816 ) Total other income, net 30,601 463 Loss from operations (17,601 ) (26,007 ) Depreciation and amortization 6,585 8,054 EBITDA (11,016 ) (17,953 ) Other adjustments: Non-cash stock compensation (cost of revenue and operating expenses) 18,496 16,485 Transformation costs (general and administrative) - 3,605 Restructuring and merger charges (gains, losses, and other) 1,278 1,995 Other adjustments 19,774 22,085 Adjusted EBITDA 8,758 4,132 (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) June 30, March 31, $ % 2021 2021 Variance Variance Assets Current assets: Cash and cash equivalents 541,024 572,787 (31,763 ) (5.5 %) Restricted cash 8,731 8,900 (169 ) (1.9 %) Trade accounts receivable, net 120,434 114,284 6,150 5.4 % Refundable income taxes 64,221 65,692 (1,471 ) (2.2 %) Other current assets 37,049 64,052 (27,003 ) (42.2 %) Total current assets 771,459 825,715 (54,256 ) (6.6 %) Property and equipment 44,659 44,284 375 0.8 % Less - accumulated depreciation and amortization 34,036 32,327 1,709 5.3 % Property and equipment, net 10,623 11,957 (1,334 ) (11.2 %) Intangible assets, net 38,607 39,730 (1,123 ) (2.8 %) Goodwill 364,241 357,446 6,795 1.9 % Deferred commissions, net 26,002 22,619 3,383 15.0 % Other assets, net 38,973 30,854 8,119 26.3 % 1,249,905 1,288,321 (38,416 ) (3.0 %) Liabilities and Stockholders' Equity Current liabilities: Trade accounts payable 32,231 39,955 (7,724 ) (19.3 %) Accrued payroll and related expenses 20,513 46,438 (25,925 ) (55.8 %) Other accrued expenses 57,511 58,353 (842 ) (1.4 %) Acquisition escrow payable 8,731 8,900 (169.00 ) (1.9 %) Deferred revenue 11,197 11,603 (406 ) (3.5 %) Total current liabilities 130,183 165,249 (35,066 ) (21.2 %) Other liabilities 39,126 42,389 (3,263 ) (7.7 %) Stockholders' equity: Preferred stock - - - n/a Common stock 14,866 14,781 85 0.6 % Additional paid-in capital 1,653,525 1,630,072 23,453 1.4 % Retained earnings 1,472,191 1,454,826 17,365 1.2 % Accumulated other comprehensive income 6,970 7,522 (552 ) (7.3 %) Treasury stock, at cost (2,066,956 ) (2,026,518 ) (40,438 ) (2.0 %) Total stockholders' equity 1,080,596 1,080,683 (87 ) (0.0 %) 1,249,905 1,288,321 (38,416 ) (3.0 %) LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Dollars in thousands) For the Three Months Ended June 30, 2021 2020 Cash flows from operating activities: Net earnings (loss) 17,365 (21,728 ) Non-cash operating activities: Depreciation and amortization 6,585 8,054 Loss on disposal or impairment of assets 113 2 Gain on distribution from retained profits interest (30,052 ) - Provision for doubtful accounts 955 1,330 Deferred income taxes (912 ) (672 ) Non-cash stock compensation expense 18,496 16,485 Changes in operating assets and liabilities: Accounts receivable (7,049 ) (5,860 ) Deferred commissions (3,383 ) (1,681 ) Other assets 19,336 4,904 Accounts payable and other liabilities (37,276 ) (22,684 ) Income taxes (1,000 ) (1,105 ) Deferred revenue (419 ) (657 ) Net cash used in operating activities (17,241 ) (23,612 ) Cash flows from investing activities: Capital expenditures (427 ) (832 ) Payment for investment - (667 ) Distribution from retained profits interest 31,000 - Cash paid in acquisition, net of cash received (8,368 ) - Net cash provided by (used in) investing activities 22,205 (1,499 ) Cash flows from financing activities: Proceeds related to the issuance of common stock under stock and employee benefit plans 3,281 1,137 Shares repurchased for tax withholdings upon vesting of stock-based awards (11,361 ) (1,827 ) Acquisition of treasury stock (29,077 ) (42,312 ) Net cash used in financing activities (37,157 ) (43,002 ) Effect of exchange rate changes on cash 261 197 Net change in cash and cash equivalents (31,932 ) (67,916 ) Cash and cash equivalents at beginning of period 581,687 732,626 Cash and cash equivalents at end of period 549,755 664,710 Supplemental cash flow information: Cash paid (received) during the period for: Income taxes (2,451 ) (2,041 ) 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 Net Cash Provided by (Used in) Operating Activities (23,612 ) 6,249 14,690 (17,887 ) (20,560 ) (17,241 ) Less: Capital expenditures (832 ) (296 ) (678 ) (376 ) (2,182 ) (427 ) Free Cash Flow to Equity (24,444 ) 5,953 14,012 (18,263 ) (22,742 ) (17,668 ) (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) Q1 FY22 to Q1 FY21 06/30/20 09/30/20 12/31/20 03/31/21 FY2021 06/30/21 % $ Revenues 99,437 104,661 119,753 119,175 443,026 119,038 19.7 % 19,601 Cost of revenue 34,465 34,897 37,085 37,557 144,004 34,315 (0.4 %) (150 ) Gross profit 64,972 69,764 82,668 81,618 299,022 84,723 30.4 % 19,751 % Gross margin 65.3 % 66.7 % 69.0 % 68.5 % 67.5 % 71.2 % Operating expenses Research and development 26,989 31,035 30,608 46,479 135,111 34,776 28.9 % 7,787 Sales and marketing 38,627 41,705 43,904 53,307 177,543 41,979 8.7 % 3,352 General and administrative 23,368 24,495 23,943 32,395 104,201 24,291 3.9 % 923 Gains, losses and other items, net 1,995 (619 ) (6 ) 1,345 2,715 1,278 (35.9 %) (717 ) Total operating expenses 90,979 96,616 98,449 133,526 419,570 102,324 12.5 % 11,345 Loss from operations (26,007 ) (26,852 ) (15,781 ) (51,908 ) (120,548 ) (17,601 ) 32.3 % 8,406 % Margin -26.2 % -25.7 % -13.2 % -43.6 % -27.2 % -14.8 % Total other income, net 463 (225 ) (86 ) (404 ) (252 ) 30,601 6509.3 % 30,138 Income (loss) from operations before income taxes (25,544 ) (27,077 ) (15,867 ) (52,312 ) (120,800 ) 13,000 150.9 % 38,544 Income taxes benefit (3,816 ) (3,109 ) (4,142 ) (19,465 ) (30,532 ) (4,365 ) (14.4 %) (549 ) Net earnings (loss) (21,728 ) (23,968 ) (11,725 ) (32,847 ) (90,268 ) 17,365 179.9 % 39,093 Diluted earnings (loss) per share (0.33 ) (0.36 ) (0.18 ) (0.49 ) (1.36 ) 0.25 175.3 % 0.58 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 Diluted shares 65,570 66,010 66,523 67,111 66,304 69,605 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 Income (loss) from operations before income taxes (25,544 ) (27,077 ) (15,867 ) (52,312 ) (120,800 ) 13,000 Income taxes (benefit) (3,816 ) (3,109 ) (4,142 ) (19,465 ) (30,532 ) (4,365 ) Net earnings (loss) (21,728 ) (23,968 ) (11,725 ) (32,847 ) (90,268 ) 17,365 Earnings (loss) per share: Basic (0.33 ) (0.36 ) (0.18 ) (0.49 ) (1.36 ) 0.25 Diluted (0.33 ) (0.36 ) (0.18 ) (0.49 ) (1.36 ) 0.25 Excluded items: Purchased intangible asset amortization (cost of revenue) 5,306 4,350 4,213 4,177 18,046 4,645 Non-cash stock compensation (cost of revenue and operating expenses) 16,485 24,204 23,894 47,124 111,707 18,496 Restructuring and merger charges (gains, losses, and other) 1,995 (619 ) (6 ) 1,345 2,715 1,278 Transformation costs (general and administrative) 3,605 258 - - 3,863 - Gain on retained profits interest (other income) - - - - - (30,052 ) Total excluded items 27,391 28,193 28,101 52,646 136,331 (5,633 ) Income from operations before income taxes and excluding items 1,847 1,116 12,234 334 15,531 7,367 Income taxes expense (benefit) 934 (1,291 ) 2,347 (2,628 ) (638 ) 865 Non-GAAP net earnings 913 2,407 9,887 2,962 16,169 6,502 Non-GAAP earnings per share: Basic 0.01 0.04 0.15 0.04 0.24 0.10 Diluted 0.01 0.03 0.14 0.04 0.23 0.09 Basic weighted average shares 65,570 66,010 66,523 67,111 66,304 68,328 Diluted weighted average shares 67,337 68,804 69,775 69,935 68,963 69,605 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 Expenses: Cost of revenue 34,465 34,897 37,085 37,557 144,004 34,315 Research and development 26,989 31,035 30,608 46,479 135,111 34,776 Sales and marketing 38,627 41,705 43,904 53,307 177,543 41,979 General and administrative 23,368 24,495 23,943 32,395 104,201 24,291 Gains, losses and other items, net 1,995 (619 ) (6 ) 1,345 2,715 1,278 Gross profit: 64,972 69,764 82,668 81,618 299,022 84,723 % Gross margin 65.3 % 66.7 % 69.0 % 68.5 % 67.5 % 71.2 % Excluded items: Purchased intangible asset amortization (cost of revenue) 5,306 4,350 4,213 4,177 18,046 4,645 Non-cash stock compensation (cost of revenue) 775 913 988 2,624 5,300 790 Non-cash stock compensation (research and development) 5,886 7,713 7,376 17,985 38,960 5,348 Non-cash stock compensation (sales and marketing) 7,123 9,233 9,212 14,833 40,401 6,793 Non-cash stock compensation (general and administrative) 2,701 6,345 6,318 11,682 27,046 5,565 Restructuring and merger charges (gains, losses, and other) 1,995 (619 ) (6 ) 1,345 2,715 1,278 Transformation costs (general and administrative) 3,605 258 - - 3,863 - Gain on retained profits interest (other income) - - - - - (30,052 ) Total excluded items 27,391 28,193 28,101 52,646 136,331 (5,633 ) Expenses, excluding items: Cost of revenue 28,384 29,634 31,884 30,756 120,658 28,880 Research and development 21,103 23,322 23,232 28,494 96,151 29,428 Sales and marketing 31,504 32,472 34,692 38,474 137,142 35,186 General and administrative 17,062 17,892 17,625 20,713 73,292 18,726 Gains, losses and other items, net - - - - - - Gross profit, excluding items: 71,053 75,027 87,869 88,419 322,368 90,158 % Gross margin 71.5 % 71.7 % 73.4 % 74.2 % 72.8 % 75.7 % (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 September 30, 2021 March 31, 2022 GAAP loss from operations (22,000 ) (96,000 ) Excluded items: Purchased intangible asset amortization 5,000 19,000 Non-cash stock compensation 21,000 91,000 Restructuring and transformation costs - 1,000 Total excluded items 26,000 111,000 Non-GAAP income from operations $ 4,000 $ 15,000 (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 Q1 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/20210805006081/en/Contacts Lauren Dillard LiveRamp Investor Relations Investor.Relations@LiveRamp.com ERAMP
Total Revenue Up 20% GAAP Gross Margin of 71% and Non-GAAP Gross Margin of 76% Now Expects Full Year Revenue to Increase by Approximately 18% LiveRamp’s Global Authenticated Traffic Solution (ATS) Adopted by Over 450 Publishers
LiveRamp® (NYSE: RAMP), the leading global data connectivity platform, today announced its financial results for the quarter ended June 30, 2021. This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20210805006081/en/ First Quarter Financial Highlights Total revenue was $119 million, up 20% compared to the prior year period. Subscription revenue was $97 million, up 16% compared to the prior year period and contributed 81% of total revenue. Marketplace & Other revenue was $23 million, up 36% compared to the prior year period. GAAP gross profit was $85 million, up 30% compared to the prior year period. GAAP gross margin of 71% expanded 6 percentage points. Non-GAAP gross profit was $90 million, up 27% compared to the prior year period. Non-GAAP gross margin of 76% expanded 4 percentage points. GAAP operating loss was $18 million compared to a GAAP operating loss of $26 million in the prior year period. Non-GAAP operating income was $7 million compared to a non-GAAP operating income of $1 million in the prior year period. GAAP earnings per share were $0.25, and non-GAAP earnings per share were $0.09. GAAP earnings included a $30 million investment gain reported in other income. Net cash used in operating activities was $17 million compared to net cash used in operating activities of $24 million in the prior year period. Cash and cash equivalents totaled $541 million with no debt at quarter end. Since March 31, 2021, LiveRamp repurchased 1 million shares for approximately $44 million under the current share repurchase program. Since inception of the share repurchase program in August 2011, the Company has returned approximately $1.2 billion in capital to shareholders. A reconciliation between GAAP and non-GAAP results is provided in the schedules to this press release. “Global companies are increasingly turning to LiveRamp to power their customer data strategies and momentum across our key expansion levers continues to build,” said LiveRamp CEO Scott Howe. “In the quarter, we added 30 net new customers and total revenue growth accelerated to 20%. Connected television revenue was up 80% and our global Safe Haven flywheel is accelerating. We now work with 30% of big box grocery and retail in the US and 40% of the world’s top 50 consumer packaged goods companies.” “Our Q1 results were strong, and our trendlines are building,” added LiveRamp President and CFO Warren Jenson. “Revenue growth is accelerating, we had another elevated bookings quarter, and we again delivered a record gross margin performance. On a non-GAAP basis, gross margin was 76%, and we were profitable for the fifth consecutive quarter.” GAAP and Non-GAAP Results The following table summarizes the Company’s financial results for its first fiscal quarter ($ in millions): Q1 Fiscal 2022 Q1 Fiscal 2021 Results Results GAAP Non-GAAP GAAP Non-GAAP Subscription revenue $97 — $83 — YoY change % 16% 21% Marketplace & other revenue $23 — $17 — YoY change % 36% 16% Total revenue $119 — $99 — YoY change % 20% 21% Gross profit $85 $90 $65 $71 % Gross margin 71% 76% 65% 71% YoY change, pts 6 pts 4 pts 9 pts 9 pts Operating income (loss) ($18) $7 ($26) $1 % Operating margin (15%) 6% (26%) 1% YoY change, pts 11 pts 4 pts 32 pts 29 pts Net income (loss) $17 $7 ($22) $1 Earnings (loss) per share $0.25 $0.09 ($0.33) $0.01 Shares to Calculate EPS 69.6 69.6 65.6 67.3 YoY change % 3% 3% (5%) (6%) Net operating cash flow ($17) — ($24) — Free cash flow to equity — ($18) — ($20) 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 25 supply-side platforms (SSPs) live or committed to implementing ATS. In addition, there are over 45 demand-side platforms (DSPs) live or committed to bid on RampID, including The Trade Desk, Amobee, Criteo, dataxu, and MediaMath. Lastly, to date, more than 450 publishers globally have adopted ATS, including 75% of the U.S. comScore 50. LiveRamp announced an expanded global partnership with Carrefour to enable robust data collaboration and analytics capabilities through LiveRamp’s Safe Haven. The partnership spans nine international markets and signals the growing momentum of Safe Haven, which has now been adopted by more than 55 customers across retail, grocery, CPG, consumer electronics and other verticals. During the first quarter, subscription net retention was 103% and platform net retention was 108%. Current remaining performance obligations (CRPO), which is contracted and committed revenue expected to be recognized over the next 12 months, was $256 million, up 15% compared to the first quarter of last year. LiveRamp added 30 net new direct subscription customers in the first quarter. Customer count at quarter end was 855, up from 780 a year ago. LiveRamp has 70 customers whose subscription contracts exceed $1 million in annual revenue, up 17% 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 second quarter of fiscal 2022, LiveRamp expects to report: Revenue of approximately $124 million, an increase of approximately 18% year-over-year GAAP operating loss of approximately $22 million Non-GAAP operating income of approximately $4 million For fiscal 2022, LiveRamp increases its outlook and now expects to report: Revenue of approximately $522 million, an increase of approximately 18% year-over-year GAAP operating loss of approximately $96 million Non-GAAP operating income of approximately $15 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 2021. 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Ⓡ, RampID™, 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 June 30, $ % 2021 2020 Variance Variance Revenues 119,038 99,437 19,601 19.7 % Cost of revenue 34,315 34,465 (150 ) (0.4 %) Gross profit 84,723 64,972 19,751 30.4 % % Gross margin 71.2 % 65.3 % Operating expenses: Research and development 34,776 26,989 7,787 28.9 % Sales and marketing 41,979 38,627 3,352 8.7 % General and administrative 24,291 23,368 923 3.9 % Gains, losses and other items, net 1,278 1,995 (717 ) (35.9 %) Total operating expenses 102,324 90,979 11,345 12.5 % Loss from operations (17,601 ) (26,007 ) 8,406 32.3 % % Margin -14.8 % -26.2 % Total other income, net 30,601 463 30,138 6509.3 % Income (loss) from operations before income taxes 13,000 (25,544 ) 38,544 150.9 % Income tax benefit (4,365 ) (3,816 ) (549 ) (14.4 %) Net earnings (loss) 17,365 (21,728 ) 39,093 179.9 % Basic earnings (loss) per share 0.25 (0.33 ) 0.59 176.7 % Diluted earnings (loss) per share: 0.25 (0.33 ) 0.58 175.3 % Basic weighted average shares 68,328 65,570 Diluted weighted average shares 69,605 65,570 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 June 30, 2021 2020 Income (loss) from operations before income taxes 13,000 (25,544 ) Income taxes (benefit) (4,365 ) (3,816 ) Net earnings (loss) 17,365 (21,728 ) Earnings (loss) per share: Basic 0.25 (0.33 ) Diluted 0.25 (0.33 ) Excluded items: Purchased intangible asset amortization (cost of revenue) 4,645 5,306 Non-cash stock compensation (cost of revenue and operating expenses) 18,496 16,485 Transformation costs (general and administrative) - 3,605 Restructuring and merger charges (gains, losses, and other) 1,278 1,995 Gain on retained profits interest (other income) (30,052 ) - Total excluded items (5,633 ) 27,391 Income from operations before income taxes and excluding items 7,367 1,847 Income taxes (2) 865 934 Non-GAAP net earnings 6,502 913 Non-GAAP earnings per share: Basic 0.10 0.01 Diluted 0.09 0.01 Basic weighted average shares 68,328 65,570 Diluted weighted average shares 69,605 67,337 (1) This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our condensed consolidated financial statements prepared in accordance with GAAP. For a detailed explanation of the adjustments made to comparable GAAP measures, the reasons why management uses these measures and the material limitations on the usefulness of these measures, please see Appendix A. (2) Income taxes were calculated using an effective non-GAAP tax rate of 11.7% and 50.5% in the first quarter of fiscal 2022 and 2021, respectively. The difference between our GAAP and non-GAAP tax rates were primarily due to the net tax effects of the excluded items. 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 June 30, 2021 2020 Loss from operations (17,601 ) (26,007 ) Excluded items: Purchased intangible asset amortization (cost of revenue) 4,645 5,306 Non-cash stock compensation (cost of revenue and operating expenses) 18,496 16,485 Transformation costs (general and administrative) - 3,605 Restructuring and merger charges (gains, losses, and other) 1,278 1,995 Total excluded items 24,419 27,391 Income from operations before excluded items 6,818 1,384 (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 June 30, 2021 2020 Net earnings (loss) 17,365 (21,728 ) Income tax benefit (4,365 ) (3,816 ) Total other income, net 30,601 463 Loss from operations (17,601 ) (26,007 ) Depreciation and amortization 6,585 8,054 EBITDA (11,016 ) (17,953 ) Other adjustments: Non-cash stock compensation (cost of revenue and operating expenses) 18,496 16,485 Transformation costs (general and administrative) - 3,605 Restructuring and merger charges (gains, losses, and other) 1,278 1,995 Other adjustments 19,774 22,085 Adjusted EBITDA 8,758 4,132 (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) June 30, March 31, $ % 2021 2021 Variance Variance Assets Current assets: Cash and cash equivalents 541,024 572,787 (31,763 ) (5.5 %) Restricted cash 8,731 8,900 (169 ) (1.9 %) Trade accounts receivable, net 120,434 114,284 6,150 5.4 % Refundable income taxes 64,221 65,692 (1,471 ) (2.2 %) Other current assets 37,049 64,052 (27,003 ) (42.2 %) Total current assets 771,459 825,715 (54,256 ) (6.6 %) Property and equipment 44,659 44,284 375 0.8 % Less - accumulated depreciation and amortization 34,036 32,327 1,709 5.3 % Property and equipment, net 10,623 11,957 (1,334 ) (11.2 %) Intangible assets, net 38,607 39,730 (1,123 ) (2.8 %) Goodwill 364,241 357,446 6,795 1.9 % Deferred commissions, net 26,002 22,619 3,383 15.0 % Other assets, net 38,973 30,854 8,119 26.3 % 1,249,905 1,288,321 (38,416 ) (3.0 %) Liabilities and Stockholders' Equity Current liabilities: Trade accounts payable 32,231 39,955 (7,724 ) (19.3 %) Accrued payroll and related expenses 20,513 46,438 (25,925 ) (55.8 %) Other accrued expenses 57,511 58,353 (842 ) (1.4 %) Acquisition escrow payable 8,731 8,900 (169.00 ) (1.9 %) Deferred revenue 11,197 11,603 (406 ) (3.5 %) Total current liabilities 130,183 165,249 (35,066 ) (21.2 %) Other liabilities 39,126 42,389 (3,263 ) (7.7 %) Stockholders' equity: Preferred stock - - - n/a Common stock 14,866 14,781 85 0.6 % Additional paid-in capital 1,653,525 1,630,072 23,453 1.4 % Retained earnings 1,472,191 1,454,826 17,365 1.2 % Accumulated other comprehensive income 6,970 7,522 (552 ) (7.3 %) Treasury stock, at cost (2,066,956 ) (2,026,518 ) (40,438 ) (2.0 %) Total stockholders' equity 1,080,596 1,080,683 (87 ) (0.0 %) 1,249,905 1,288,321 (38,416 ) (3.0 %) LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Dollars in thousands) For the Three Months Ended June 30, 2021 2020 Cash flows from operating activities: Net earnings (loss) 17,365 (21,728 ) Non-cash operating activities: Depreciation and amortization 6,585 8,054 Loss on disposal or impairment of assets 113 2 Gain on distribution from retained profits interest (30,052 ) - Provision for doubtful accounts 955 1,330 Deferred income taxes (912 ) (672 ) Non-cash stock compensation expense 18,496 16,485 Changes in operating assets and liabilities: Accounts receivable (7,049 ) (5,860 ) Deferred commissions (3,383 ) (1,681 ) Other assets 19,336 4,904 Accounts payable and other liabilities (37,276 ) (22,684 ) Income taxes (1,000 ) (1,105 ) Deferred revenue (419 ) (657 ) Net cash used in operating activities (17,241 ) (23,612 ) Cash flows from investing activities: Capital expenditures (427 ) (832 ) Payment for investment - (667 ) Distribution from retained profits interest 31,000 - Cash paid in acquisition, net of cash received (8,368 ) - Net cash provided by (used in) investing activities 22,205 (1,499 ) Cash flows from financing activities: Proceeds related to the issuance of common stock under stock and employee benefit plans 3,281 1,137 Shares repurchased for tax withholdings upon vesting of stock-based awards (11,361 ) (1,827 ) Acquisition of treasury stock (29,077 ) (42,312 ) Net cash used in financing activities (37,157 ) (43,002 ) Effect of exchange rate changes on cash 261 197 Net change in cash and cash equivalents (31,932 ) (67,916 ) Cash and cash equivalents at beginning of period 581,687 732,626 Cash and cash equivalents at end of period 549,755 664,710 Supplemental cash flow information: Cash paid (received) during the period for: Income taxes (2,451 ) (2,041 ) 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 Net Cash Provided by (Used in) Operating Activities (23,612 ) 6,249 14,690 (17,887 ) (20,560 ) (17,241 ) Less: Capital expenditures (832 ) (296 ) (678 ) (376 ) (2,182 ) (427 ) Free Cash Flow to Equity (24,444 ) 5,953 14,012 (18,263 ) (22,742 ) (17,668 ) (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) Q1 FY22 to Q1 FY21 06/30/20 09/30/20 12/31/20 03/31/21 FY2021 06/30/21 % $ Revenues 99,437 104,661 119,753 119,175 443,026 119,038 19.7 % 19,601 Cost of revenue 34,465 34,897 37,085 37,557 144,004 34,315 (0.4 %) (150 ) Gross profit 64,972 69,764 82,668 81,618 299,022 84,723 30.4 % 19,751 % Gross margin 65.3 % 66.7 % 69.0 % 68.5 % 67.5 % 71.2 % Operating expenses Research and development 26,989 31,035 30,608 46,479 135,111 34,776 28.9 % 7,787 Sales and marketing 38,627 41,705 43,904 53,307 177,543 41,979 8.7 % 3,352 General and administrative 23,368 24,495 23,943 32,395 104,201 24,291 3.9 % 923 Gains, losses and other items, net 1,995 (619 ) (6 ) 1,345 2,715 1,278 (35.9 %) (717 ) Total operating expenses 90,979 96,616 98,449 133,526 419,570 102,324 12.5 % 11,345 Loss from operations (26,007 ) (26,852 ) (15,781 ) (51,908 ) (120,548 ) (17,601 ) 32.3 % 8,406 % Margin -26.2 % -25.7 % -13.2 % -43.6 % -27.2 % -14.8 % Total other income, net 463 (225 ) (86 ) (404 ) (252 ) 30,601 6509.3 % 30,138 Income (loss) from operations before income taxes (25,544 ) (27,077 ) (15,867 ) (52,312 ) (120,800 ) 13,000 150.9 % 38,544 Income taxes benefit (3,816 ) (3,109 ) (4,142 ) (19,465 ) (30,532 ) (4,365 ) (14.4 %) (549 ) Net earnings (loss) (21,728 ) (23,968 ) (11,725 ) (32,847 ) (90,268 ) 17,365 179.9 % 39,093 Diluted earnings (loss) per share (0.33 ) (0.36 ) (0.18 ) (0.49 ) (1.36 ) 0.25 175.3 % 0.58 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 Diluted shares 65,570 66,010 66,523 67,111 66,304 69,605 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 Income (loss) from operations before income taxes (25,544 ) (27,077 ) (15,867 ) (52,312 ) (120,800 ) 13,000 Income taxes (benefit) (3,816 ) (3,109 ) (4,142 ) (19,465 ) (30,532 ) (4,365 ) Net earnings (loss) (21,728 ) (23,968 ) (11,725 ) (32,847 ) (90,268 ) 17,365 Earnings (loss) per share: Basic (0.33 ) (0.36 ) (0.18 ) (0.49 ) (1.36 ) 0.25 Diluted (0.33 ) (0.36 ) (0.18 ) (0.49 ) (1.36 ) 0.25 Excluded items: Purchased intangible asset amortization (cost of revenue) 5,306 4,350 4,213 4,177 18,046 4,645 Non-cash stock compensation (cost of revenue and operating expenses) 16,485 24,204 23,894 47,124 111,707 18,496 Restructuring and merger charges (gains, losses, and other) 1,995 (619 ) (6 ) 1,345 2,715 1,278 Transformation costs (general and administrative) 3,605 258 - - 3,863 - Gain on retained profits interest (other income) - - - - - (30,052 ) Total excluded items 27,391 28,193 28,101 52,646 136,331 (5,633 ) Income from operations before income taxes and excluding items 1,847 1,116 12,234 334 15,531 7,367 Income taxes expense (benefit) 934 (1,291 ) 2,347 (2,628 ) (638 ) 865 Non-GAAP net earnings 913 2,407 9,887 2,962 16,169 6,502 Non-GAAP earnings per share: Basic 0.01 0.04 0.15 0.04 0.24 0.10 Diluted 0.01 0.03 0.14 0.04 0.23 0.09 Basic weighted average shares 65,570 66,010 66,523 67,111 66,304 68,328 Diluted weighted average shares 67,337 68,804 69,775 69,935 68,963 69,605 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 Expenses: Cost of revenue 34,465 34,897 37,085 37,557 144,004 34,315 Research and development 26,989 31,035 30,608 46,479 135,111 34,776 Sales and marketing 38,627 41,705 43,904 53,307 177,543 41,979 General and administrative 23,368 24,495 23,943 32,395 104,201 24,291 Gains, losses and other items, net 1,995 (619 ) (6 ) 1,345 2,715 1,278 Gross profit: 64,972 69,764 82,668 81,618 299,022 84,723 % Gross margin 65.3 % 66.7 % 69.0 % 68.5 % 67.5 % 71.2 % Excluded items: Purchased intangible asset amortization (cost of revenue) 5,306 4,350 4,213 4,177 18,046 4,645 Non-cash stock compensation (cost of revenue) 775 913 988 2,624 5,300 790 Non-cash stock compensation (research and development) 5,886 7,713 7,376 17,985 38,960 5,348 Non-cash stock compensation (sales and marketing) 7,123 9,233 9,212 14,833 40,401 6,793 Non-cash stock compensation (general and administrative) 2,701 6,345 6,318 11,682 27,046 5,565 Restructuring and merger charges (gains, losses, and other) 1,995 (619 ) (6 ) 1,345 2,715 1,278 Transformation costs (general and administrative) 3,605 258 - - 3,863 - Gain on retained profits interest (other income) - - - - - (30,052 ) Total excluded items 27,391 28,193 28,101 52,646 136,331 (5,633 ) Expenses, excluding items: Cost of revenue 28,384 29,634 31,884 30,756 120,658 28,880 Research and development 21,103 23,322 23,232 28,494 96,151 29,428 Sales and marketing 31,504 32,472 34,692 38,474 137,142 35,186 General and administrative 17,062 17,892 17,625 20,713 73,292 18,726 Gains, losses and other items, net - - - - - - Gross profit, excluding items: 71,053 75,027 87,869 88,419 322,368 90,158 % Gross margin 71.5 % 71.7 % 73.4 % 74.2 % 72.8 % 75.7 % (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 September 30, 2021 March 31, 2022 GAAP loss from operations (22,000 ) (96,000 ) Excluded items: Purchased intangible asset amortization 5,000 19,000 Non-cash stock compensation 21,000 91,000 Restructuring and transformation costs - 1,000 Total excluded items 26,000 111,000 Non-GAAP income from operations $ 4,000 $ 15,000 (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 Q1 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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