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 Second Quarter Results By: LiveRamp via Business Wire November 08, 2023 at 16:05 PM EST Revenue up 9% year over year GAAP Operating Margin of 5% and Non-GAAP Operating Margin of 20% Operating Cash Flow of $36 million Raises Fiscal 2024 Guidance LiveRamp® (NYSE: RAMP), the leading data collaboration platform, today announced its financial results for the fiscal 2024 second quarter ended September 30, 2023. This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20231108738860/en/ Q2 Financial Highlights1 Total revenue was $160 million, up 9%. Subscription revenue was $126 million, up 5%, and accounted for 79% of total revenue. Marketplace & Other revenue was $34 million, up 25%. GAAP gross profit was $119 million, up 13%. GAAP gross margin of 74% expanded by 3 percentage points. Non-GAAP gross profit was $121 million, up 9%. Non-GAAP gross margin of 75% was flat year-on-year. GAAP operating income was $8 million compared to a loss of $29 million. GAAP operating margin was 5% compared to negative 20%. Non-GAAP operating income was $32 million compared to $17 million. Non-GAAP operating margin of 20% expanded by 8 percentage points. GAAP diluted earnings per share was $0.07 and non-GAAP diluted earnings per share was $0.43. Net cash provided by operating activities was $36 million compared to $21 million. Share repurchases in the second quarter totaled approximately 490,000 shares for $15 million, bringing the fiscal first half total to 1.3 million shares for $35 million. A reconciliation between GAAP and non-GAAP results is provided in the schedules to this press release. “We posted strong second quarter results, with both revenue and operating income exceeding our expectations; operating margin was a record high and operating cash flow was positive for a fifth consecutive quarter,” said LiveRamp CEO Scott Howe. “We had our best new logo quarter in two years, including the addition of multiple Fortune 500 customers, demonstrating the traction our Data Collaboration Platform has with marketers looking to more fully leverage their first-party customer data across the digital advertising ecosystem.” ______________ 1 Unless otherwise indicated, all comparisons are to the prior year period. GAAP and Non-GAAP Results The following table summarizes the Company’s financial results for the fiscal 2024 second quarter ended September 30, 2023 ($ in millions, except per share amounts): GAAP Non-GAAP Q2 FY24 Q2 FY23 Q2 FY24 Q2 FY23 Subscription revenue $126 $120 — — YoY change % 5% 14% — — Marketplace & Other revenue $34 $27 — — YoY change % 25% 25% — — Total revenue $160 $147 — — YoY change % 9% 16% — — Gross profit $119 $105 $121 $111 % Gross margin 74% 71% 75% 75% YoY change, pts 3 pts (1 pt) 0 pts (2 pts) Operating income (loss) $8 ($29) $32 $17 % Operating margin 5% (20%) 20% 12% YoY change, pts 25 pts (15 pts) 8 pts (2 pts) Net earnings (loss) $5 ($30) $29 $15 Diluted earnings (loss) per share $0.07 ($0.45) $0.43 $0.22 Shares to calculate diluted EPS 67.9 67.1 67.9 67.6 YoY change % 1% (1%) 0% (3%) Net operating cash flow $36 $21 — — Free cash flow to equity — — $36 $19 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 attached to this press release. Additional Business Highlights & Metrics In August 2023 we were selected as a 2023 Google Cloud Partner of the Year. LiveRamp was recognized as a “Global Industry Technology Partner of the Year” for delivering embedded solutions that help customers enrich their Google Cloud environment and extend value to wherever their data lives. In October 2023 we announced that our identity capabilities are now natively available within AWS Entity Resolution and support additional identifier types. With this integration, marketers, publishers, tech platforms, and agencies can extend the interoperability of data in the cloud to marketing and advertising destinations using RampID. In August 2023 we expanded our reach in the MarTech space by announcing a new partnership with Sendbird, a global in-app conversations platform with over 300 million monthly active users. Joint customers of Sendbird and LiveRamp can now power personalized marketing and consumer experiences using LiveRamp's identity solutions. For the first time marketers can bring together media exposure logs and marketing technology exposure logs to build a more robust view of the customer journey. The Company’s globally scaled Authenticated Traffic Solution (ATS) has more than 165 supply-side platforms (SSPs) and demand-side platforms (DSPs) live or committed to bid on RampID™ and ATS, including The Trade Desk, Xandr, Yahoo, Amobee, Criteo, Adobe Ad Cloud, and Roku Oneview. To date, over 16,000 publisher domains and over 70% of the comScore 100 publishers, have adopted ATS, including Amazon Publisher Services, Microsoft, Hearst, CafeMedia, Leaf Group, Prisma Media and Burda. Through these integrations, LiveRamp is now connected to over 92% of consumer time spent online in the US. We recently announced new partnerships with Epsilon, FreeWheel, and Yahoo that extend the RampID footprint and give brands greater reach to data-driven premium advertising inventory: In September 2023 we announced that our connectivity solution, ATS, is now interoperable with Epsilon’s identity framework. In September 2023 we announced that we are integrating RampID with FreeWheel, a leading supply-side platform for CTV publishers. In October 2023 we announced an expanded partnership with Yahoo to scale advertising addressability and reach by making Yahoo’s ConnectID interoperable with RampID. LiveRamp ended the quarter with 99 customers whose subscription contracts exceed $1 million in annual revenue, compared to 92 in the prior year period. LiveRamp ended the quarter with 895 direct subscription customers, compared to 920 in the prior year period. Second quarter subscription net retention was 101% and platform net retention was 104%. Current remaining performance obligations (CRPO), which is contracted and committed revenue expected to be recognized over the next 12 months, was $339 million, up 16% compared to the prior year period. Financial Outlook LiveRamp’s non-GAAP operating income guidance excludes the impact of non-cash stock compensation, purchased intangible asset amortization, and restructuring and related charges. For the third quarter of fiscal 2024, LiveRamp expects to report: Revenue of $165 million, an increase of 4% GAAP operating income of $8 million Non-GAAP operating income of $29 million For fiscal 2024, LiveRamp updates its guidance and expects to report: Revenue of between $632 million and $637 million, an increase of between 6% and 7% GAAP operating income of between $8 million and $11 million Non-GAAP operating income of between $97 million and $100 million Conference Call LiveRamp will hold a conference call today at 1:30 p.m. PT 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 data collaboration platform of choice for the world’s most innovative companies. A groundbreaking leader in consumer privacy, data ethics, and foundational identity, LiveRamp is setting the new standard for building a connected customer view with unmatched clarity and context while protecting precious brand and consumer trust. LiveRamp offers complete flexibility to collaborate wherever data lives to support the widest range of data collaboration use cases—within organizations, between brands, and across its premier global network of top-quality partners. Hundreds of global innovators, from iconic consumer brands and tech giants to banks, retailers, and healthcare leaders, turn to LiveRamp to build enduring brand and business value by deepening customer engagement and loyalty, activating new partnerships, and maximizing the value of their first-party data while staying on the forefront of rapidly evolving compliance and privacy requirements. LiveRamp is based in San Francisco, California with offices worldwide. Learn more at 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 for fiscal 2024 and beyond, 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 rising interest rates, cost increases, the possibility of a recession, general inflationary pressure, geo-political circumstances that could result in increased economic uncertainties and the associated impacts of these potential events 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; rapidly changing technology’s impact on our products and services; and attracting, motivating and retaining talent. Additional risks include maintaining our culture and our ability to innovate and evolve while operating in a hybrid work environment, with some employees working remotely at least some of the time within a rapidly changing industry, while also avoiding disruption from reductions in our current workforce as well as disruptions resulting from acquisition, divestiture and other activities affecting our workforce. Our global workforce strategy could possibly encounter difficulty and not be as beneficial as planned. Our international operations are also subject to risks, including the performance of third parties as well as impacts from war and civil unrest, 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’ data and/or computer systems, or the risk that our current insurance coverage may not be adequate for such a breach, that an insurer might deny coverage for a claim or that such insurance will continue to be available to us on commercially reasonable terms, or at all, 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 or cloud 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 2023 ended March 31, 2023, and LiveRamp's Quarterly Reports on Form 10-Q issued in fiscal year 2024. 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Ⓡ and RampIDTM and all other LiveRamp marks contained herein are trademarks or service marks of LiveRamp, Inc. All other marks are the property of their respective owners. LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (Dollars in thousands, except per share amounts) For the Three Months Ended September 30, $ % 2023 2022 Variance Variance Revenues 159,871 147,099 12,772 8.7 % Cost of revenue 41,212 42,304 (1,092 ) (2.6 %) Gross profit 118,659 104,795 13,864 13.2 % % Gross margin 74.2 % 71.2 % Operating expenses: Research and development 33,733 46,139 (12,406 ) (26.9 %) Sales and marketing 44,135 45,949 (1,814 ) (3.9 %) General and administrative 26,009 28,718 (2,709 ) (9.4 %) Gains, losses and other items, net 6,574 13,111 (6,537 ) (49.9 %) Total operating expenses 110,451 133,917 (23,466 ) (17.5 %) Income (loss) from operations 8,208 (29,122 ) 37,330 128.2 % % Margin 5.1 % -19.8 % Total other income, net 6,431 2,248 4,183 186.1 % Income (loss) from continuing operations before income taxes 14,639 (26,874 ) 41,513 154.5 % Income tax expense 10,163 3,562 6,601 185.3 % Net earnings (loss) from continuing operations 4,476 (30,436 ) 34,912 114.7 % Earnings from discontinued operations, net of tax 387 - 387 n/a Net earnings (loss) 4,863 (30,436 ) 35,299 116.0 % Basic earnings (loss) per share: Continuing operations 0.07 (0.45 ) 0.52 114.9 % Discontinued operations 0.01 - 0.01 n/a Basic earnings (loss) per share 0.07 (0.45 ) 0.53 115.8 % Diluted earnings (loss) per share: Continuing operations 0.07 (0.45 ) 0.52 114.5 % Discontinued operations 0.01 - 0.01 n/a Diluted earnings (loss) per share: 0.07 (0.45 ) 0.53 115.8 % Basic weighted average shares 66,284 67,096 Diluted weighted average shares 67,868 67,096 LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (Dollars in thousands, except per share amounts) For the Six Months Ended September 30, $ % 2023 2022 Variance Variance Revenues 313,940 289,342 24,598 8.5 % Cost of revenue 86,833 83,325 3,508 4.2 % Gross profit 227,107 206,017 21,090 10.2 % % Gross margin 72.3 % 71.2 % Operating expenses: Research and development 68,252 93,800 (25,548 ) (27.2 %) Sales and marketing 89,014 97,229 (8,215 ) (8.4 %) General and administrative 52,673 55,862 (3,189 ) (5.7 %) Gains, losses and other items, net 6,690 13,850 (7,160 ) (51.7 %) Total operating expenses 216,629 260,741 (44,112 ) (16.9 %) Income (loss) from operations 10,478 (54,724 ) 65,202 119.1 % % Margin 3.3 % -18.9 % Total other income, net 11,280 2,947 8,333 282.8 % Income (loss) from continuing operations before income taxes 21,758 (51,777 ) 73,535 142.0 % Income tax expense 18,868 5,877 12,991 221.0 % Net earnings (loss) from continuing operations 2,890 (57,654 ) 60,544 105.0 % Earnings from discontinued operations, net of tax 387 - 387 n/a Net earnings (loss) 3,277 (57,654 ) 60,931 105.7 % Basic earnings (loss) per share: Continuing operations 0.04 (0.85 ) 0.89 105.1 % Discontinued operations 0.01 - 0.01 n/a Basic earnings (loss) per share 0.05 (0.85 ) 0.90 105.8 % Diluted earnings (loss) per share: Continuing operations 0.04 (0.85 ) 0.89 105.0 % Discontinued operations 0.01 - 0.01 n/a Diluted earnings (loss) per share: 0.05 (0.85 ) 0.90 105.7 % Basic weighted average shares 66,391 67,750 Diluted weighted average shares 67,628 67,750 LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES RECONCILIATION OF GAAP TO NON-GAAP EPS (1) (Unaudited) (Dollars in thousands, except per share amounts) For the Three Months Ended For the Six Months Ended September 30, September 30, 2023 2022 2023 2022 Income (loss) from continuing operations before income taxes 14,639 (26,874 ) 21,758 (51,777 ) Income tax expense 10,163 3,562 18,868 5,877 Net earnings (loss) from continuing operations 4,476 (30,436 ) 2,890 (57,654 ) Earnings from discontinued operations, net of tax 387 - 387 - Net earnings (loss) 4,863 (30,436 ) 3,277 (57,654 ) Earnings (loss) per share: Basic 0.07 (0.45 ) 0.05 (0.85 ) Diluted 0.07 (0.45 ) 0.05 (0.85 ) Excluded items: Purchased intangible asset amortization (cost of revenue) 1,217 4,637 4,507 9,280 Non-cash stock compensation (cost of revenue and operating expenses) 15,735 27,293 29,027 51,518 Transformation costs (general and administrative) - 1,250 1,875 1,250 Restructuring charges (gains, losses, and other) 6,574 13,111 6,690 13,850 Total excluded items, continuing operations 23,526 46,291 42,099 75,898 Income from continuing operations before income taxes and excluding items 38,165 19,417 63,857 24,121 Income tax expense (2) 9,036 4,557 15,203 5,794 Non-GAAP net earnings from continuing operations 29,129 14,860 48,654 18,327 Non-GAAP earnings per share from continuing operations: Basic 0.44 0.22 0.73 0.27 Diluted 0.43 0.22 0.72 0.27 Basic weighted average shares 66,284 67,096 66,391 67,750 Diluted weighted average shares 67,868 67,568 67,628 68,384 (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 consolidated financial statements prepared in accordance with GAAP. For a detailed explanation of the adjustments made to comparable GAAP measures, the reasons why management uses these measures and the material limitations on the usefulness of these measures, please see Appendix A. (2) Income taxes were calculated by applying the estimated annual effective tax rate to year-to-date pretax income or loss and adjusting for discrete tax items in the period. The differences between our GAAP and non-GAAP effective tax rates were primarily due to the net tax effects of the excluded items, coupled with larger pre-tax losses for GAAP purposes versus smaller pre-tax losses or income for non-GAAP purposes. LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES RECONCILIATION OF GAAP TO NON-GAAP INCOME (LOSS) FROM OPERATIONS (1) (Unaudited) (Dollars in thousands) For the Three Months Ended For the Six Months Ended September 30, September 30, 2023 2022 2023 2022 Income (loss) from continuing operations 8,208 (29,122 ) 10,478 (54,724 ) Excluded items: Purchased intangible asset amortization (cost of revenue) 1,217 4,637 4,507 9,280 Non-cash stock compensation (cost of revenue and operating expenses) 15,735 27,293 29,027 51,518 Transformation costs (general and administrative) - 1,250 1,875 1,250 Restructuring charges (gains, losses, and other) 6,574 13,111 6,690 13,850 Total excluded items 23,526 46,291 42,099 75,898 Income from continuing operations before excluded items 31,734 17,169 52,577 21,174 (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 and the material limitations on the usefulness of these measures, please see Appendix A. LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES RECONCILIATION OF ADJUSTED EBITDA (1) (Unaudited) (Dollars in thousands) For the Three Months Ended For the Six Months Ended September 30, September 30, 2023 2022 2023 2022 Net earnings (loss) from continuing operations 4,476 (30,436 ) 2,890 (57,654 ) Income tax expense 10,163 3,562 18,868 5,877 Other income (6,431 ) (2,248 ) (11,280 ) (2,947 ) Income (loss) from operations 8,208 (29,122 ) 10,478 (54,724 ) Depreciation and amortization 1,864 5,689 5,903 11,430 EBITDA 10,072 (23,433 ) 16,381 (43,294 ) Other adjustments: Non-cash stock compensation (cost of revenue and operating expenses) 15,735 27,293 29,027 51,518 Transformation costs (general and administrative) - 1,250 1,875 1,250 Restructuring charges (gains, losses, and other) 6,574 13,111 6,690 13,850 Other adjustments 22,309 41,654 37,592 66,618 Adjusted EBITDA 32,381 18,221 53,973 23,324 (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 CONDENSED CONSOLIDATED BALANCE SHEETS (Dollars in thousands) September 30, March 31, $ % 2023 2023 Variance Variance Assets Current assets: Cash and cash equivalents 492,169 464,448 27,721 6.0 % Short-term investments 31,920 32,807 (887 ) (2.7 %) Trade accounts receivable, net 174,703 157,379 17,324 11.0 % Refundable income taxes, net - 28,897 (28,897 ) (100.0 %) Other current assets 29,054 31,028 (1,974 ) (6.4 %) Total current assets 727,846 714,559 13,287 1.9 % Property and equipment 38,221 39,393 (1,172 ) (3.0 %) Less - accumulated depreciation and amortization 32,647 32,308 339 1.0 % Property and equipment, net 5,574 7,085 (1,511 ) (21.3 %) Intangible assets, net 5,361 9,868 (4,507 ) (45.7 %) Goodwill 360,016 363,116 (3,100 ) (0.9 %) Deferred commissions, net 39,937 37,030 2,907 7.9 % Other assets, net 41,785 41,045 740 1.8 % 1,180,519 1,172,703 7,816 0.7 % Liabilities and Stockholders' Equity Current liabilities: Trade accounts payable 79,344 86,568 (7,224 ) (8.3 %) Accrued payroll and related expenses 35,331 33,434 1,897 5.7 % Other accrued expenses 37,133 35,736 1,397 3.9 % Deferred revenue 20,978 19,091 1,887 9.9 % Income taxes payable 13,911 - 13,911 n/a Total current liabilities 186,697 174,829 11,868 6.8 % Other liabilities 71,964 71,798 166 0.2 % Stockholders' equity: Preferred stock - - - n/a Common stock 15,473 15,399 74 0.5 % Additional paid-in capital 1,889,178 1,855,916 33,262 1.8 % Retained earnings 1,305,568 1,302,291 3,277 0.3 % Accumulated other comprehensive income 3,567 4,504 (937 ) (20.8 %) Treasury stock, at cost (2,291,928 ) (2,252,034 ) (39,894 ) 1.8 % Total stockholders' equity 921,858 926,076 (4,218 ) (0.5 %) 1,180,519 1,172,703 7,816 0.7 % LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Dollars in thousands) For the Three Months Ended September 30, 2023 2022 Cash flows from operating activities: Net earnings (loss) 4,863 (30,436 ) Earnings from discontinued operations, net of tax (387 ) Non-cash operating activities: Depreciation and amortization 1,864 5,689 Gain on disposal or impairment of assets (6 ) (192 ) Lease impairments 2,315 12,225 Provision for doubtful accounts (18 ) 118 Impairment of goodwill 2,875 - Deferred income taxes 40 31 Non-cash stock compensation expense 15,735 27,293 Changes in operating assets and liabilities: Accounts receivable (1,867 ) (3,716 ) Deferred commissions (2,993 ) (551 ) Other assets 735 4,608 Accounts payable and other liabilities 12,340 5,080 Income taxes 6,463 (618 ) Deferred revenue (6,195 ) 1,844 Net cash provided by operating activities 35,764 21,375 Cash flows from investing activities: Capital expenditures (200 ) (2,673 ) Purchases of investments (24,385 ) - Proceeds from sale of investments 25,750 - Purchases of strategic investments (500 ) - Proceeds from sale of strategic investment - 400 Net cash provided by (used in) investing activities 665 (2,273 ) Cash flows from financing activities: Proceeds related to the issuance of common stock under stock and employee benefit plans 2 2 Shares repurchased for tax withholdings upon vesting of stock-based awards (677 ) (708 ) Acquisition of treasury stock (15,122 ) (40,038 ) Net cash used in financing activities (15,797 ) (40,744 ) Cash flows from discontinued operations: From operating activities 387 - Net cash provided by discontinued operations 387 - Effect of exchange rate changes on cash 377 (1,010 ) Net change in cash and cash equivalents 21,396 (22,652 ) Cash and cash equivalents at beginning of period 470,773 508,254 Cash and cash equivalents at end of period 492,169 485,602 Supplemental cash flow information: Cash paid for income taxes, net - continuing operations 3,514 4,157 Cash (received) for income taxes, net - discontinued operations (595 ) - Cash paid for operating lease liabilities 2,689 1,105 Operating lease assets obtained in exchange for operating lease liabilities 1,112 - Operating lease assets relinquished in exchange for operating lease liabilities - (6,781 ) Purchases of property, plant, & equipment, net remaining unpaid at end of period 211 187 LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Dollars in thousands) For the Six Months Ended September 30, 2023 2022 Cash flows from operating activities: Net earnings (loss) 3,277 (57,654 ) Earnings from discontinued operations, net of tax (387 ) Non-cash operating activities: Depreciation and amortization 5,903 11,430 Loss (gain) on disposal or impairment of assets 273 (197 ) Lease impairments 2,344 12,225 Provision for doubtful accounts (237 ) 1,115 Impairment of goodwill 2,875 - Deferred income taxes 87 218 Non-cash stock compensation expense 29,027 51,518 Changes in operating assets and liabilities: Accounts receivable (16,258 ) (11,449 ) Deferred commissions (2,907 ) (920 ) Other assets 5,743 8,960 Accounts payable and other liabilities (12,885 ) (29,477 ) Income taxes 43,699 1,513 Deferred revenue 903 724 Net cash provided by (used in) operating activities 61,457 (11,994 ) Cash flows from investing activities: Capital expenditures (253 ) (4,414 ) Purchases of investments (24,385 ) - Proceeds from sales of investments 25,750 - Purchases of strategic investments (1,000 ) - Proceeds from sales of strategic investments - 400 Net cash provided by (used in) investing activities 112 (4,014 ) Cash flows from financing activities: Proceeds related to the issuance of common stock under stock and employee benefit plans 5,575 4,591 Shares repurchased for tax withholdings upon vesting of stock-based awards (4,569 ) (1,290 ) Acquisition of treasury stock (35,325 ) (100,091 ) Net cash used in financing activities (34,319 ) (96,790 ) Cash flows from discontinued operations: From operating activities 387 - Net cash provided by discontinued operations 387 - Effect of exchange rate changes on cash 84 (1,762 ) Net change in cash and cash equivalents 27,721 (114,560 ) Cash and cash equivalents at beginning of period 464,448 600,162 Cash and cash equivalents at end of period 492,169 485,602 Supplemental cash flow information: Cash (received) paid for income taxes, net - continuing operations (25,139 ) 4,161 Cash (received) for income taxes, net - discontinued operations (595 ) - Cash paid for operating lease liabilities 5,148 3,261 Operating lease assets obtained in exchange for operating lease liabilities 11,677 - Operating lease assets relinquished in exchange for operating lease liabilities (4,486 ) (6,781 ) Purchases of property, plant, & equipment, net remaining unpaid at end of period 211 187 LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES CALCULATION OF FREE CASH FLOW TO EQUITY (1) (Unaudited) (Dollars in thousands) 06/30/22 09/30/22 12/31/22 03/31/23 FY2023 06/30/23 09/30/23 Net Cash Provided by (Used in) Operating Activities-Continuing Operations (33,369 ) 21,375 15,770 30,665 34,441 25,693 35,764 Less: Capital expenditures (1,741 ) (2,673 ) (179 ) (103 ) (4,696 ) (53 ) (200 ) Free Cash Flow to Equity (35,110 ) 18,702 15,591 30,562 29,745 25,640 35,564 (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) FY24 to FY23 06/30/22 09/30/22 12/31/22 03/31/23 FY2023 06/30/23 09/30/23 FY2024 % $ Revenues 142,243 147,099 158,615 148,626 596,583 154,069 159,871 313,940 8.7 % 12,772 Cost of revenue 41,021 42,304 43,287 43,472 170,084 45,621 41,212 86,833 (2.6 %) (1,092 ) Gross profit 101,222 104,795 115,328 105,154 426,499 108,448 118,659 227,107 13.2 % 13,864 % Gross margin 71.2 % 71.2 % 72.7 % 70.8 % 71.5 % 70.4 % 74.2 % 72.3 % Operating expenses Research and development 47,661 46,139 43,175 52,220 189,195 34,519 33,733 68,252 (26.9 %) (12,406 ) Sales and marketing 51,280 45,949 47,702 57,506 202,437 44,879 44,135 89,014 (3.9 %) (1,814 ) General and administrative 27,144 28,718 36,657 32,832 125,351 26,664 26,009 52,673 (9.4 %) (2,709 ) Gains, losses and other items, net 739 13,111 11,743 9,723 35,316 116 6,574 6,690 (49.9 %) (6,537 ) Total operating expenses 126,824 133,917 139,277 152,281 552,299 106,178 110,451 216,629 (17.5 %) (23,466 ) Income (loss) from operations (25,602 ) (29,122 ) (23,949 ) (47,127 ) (125,800 ) 2,270 8,208 10,478 128.2 % 37,330 % Margin -18.0 % -19.8 % -15.1 % -31.7 % -21.1 % 1.5 % 5.1 % 3.3 % Total other income (expense), net 699 2,248 (736 ) 4,735 6,946 4,849 6,431 11,280 186.1 % 4,183 Income (loss) from continuing operations before income taxes (24,903 ) (26,874 ) (24,685 ) (42,392 ) (118,854 ) 7,119 14,639 21,758 154.5 % 41,513 Income taxes expense (benefit) 2,315 3,562 5,835 (6,460 ) 5,252 8,705 10,163 18,868 185.3 % 6,601 Net loss from continuing operations (27,218 ) (30,436 ) (30,520 ) (35,932 ) (124,106 ) (1,586 ) 4,476 2,890 114.7 % 34,912 Earnings from discontinued operations, net of tax - - 836 4,568 5,404 - 387 387 n/a 387.00 Net earnings (loss) (27,218 ) (30,436 ) (29,684 ) (31,364 ) (118,702 ) (1,586 ) 4,863 3,277 116.0 % 35,299 Diluted earnings (loss) per share (0.40 ) (0.45 ) (0.46 ) (0.48 ) (1.79 ) (0.02 ) 0.07 0.05 n/a 0.53 Some earnings (loss) per share amounts may not add due to rounding. LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES RECONCILIATION OF GAAP TO NON-GAAP EXPENSES (1) (Unaudited) (Dollars in thousands) 06/30/22 09/30/22 12/31/22 03/31/23 FY2023 06/30/23 09/30/23 FY2024 Expenses, continuing operations: Cost of revenue 41,021 42,304 43,287 43,472 170,084 45,621 41,212 86,833 Research and development 47,661 46,139 43,175 52,220 189,195 34,519 33,733 68,252 Sales and marketing 51,280 45,949 47,702 57,506 202,437 44,879 44,135 89,014 General and administrative 27,144 28,718 36,657 32,832 125,351 26,664 26,009 52,673 Gains, losses and other items, net 739 13,111 11,743 9,723 35,316 116 6,574 6,690 Gross profit, continuing operations: 101,222 104,795 115,328 105,154 426,499 108,448 118,659 227,107 % Gross margin 71.2 % 71.2 % 72.7 % 70.8 % 71.5 % 70.4 % 74.2 % 72.3 % Excluded items: Purchased intangible asset amortization (cost of revenue) 4,643 4,637 4,209 3,336 16,825 3,290 1,217 4,507 Non-cash stock compensation (cost of revenue) 1,163 1,293 1,208 2,653 6,317 629 629 1,258 Non-cash stock compensation (research and development) 11,656 12,360 10,654 20,737 55,407 5,077 5,293 10,370 Non-cash stock compensation (sales and marketing) 5,884 6,116 5,871 11,558 29,429 3,736 4,786 8,522 Non-cash stock compensation (general and administrative) 5,522 7,524 11,891 9,710 34,647 3,850 5,027 8,877 Restructuring charges (gains, losses, and other) 739 13,111 11,743 9,723 35,316 116 6,574 6,690 Transformation costs (general and administrative) - 1,250 4,112 3,663 9,025 1,875 - 1,875 Total excluded items 29,607 46,291 49,688 61,380 186,966 18,573 23,526 42,099 Expenses, continuing operations excluding items: Cost of revenue 35,215 36,374 37,870 37,483 146,942 41,702 39,366 81,068 Research and development 36,005 33,779 32,521 31,483 133,788 29,442 28,440 57,882 Sales and marketing 45,396 39,833 41,831 45,948 173,008 41,143 39,349 80,492 General and administrative 21,622 19,944 20,654 19,459 81,679 20,939 20,982 41,921 Gains, losses and other items, net - - - - - - - - Gross profit, continuing operations excluding items: 107,028 110,725 120,745 111,143 449,641 112,367 120,505 232,872 % Gross margin 75.2 % 75.3 % 76.1 % 74.8 % 75.4 % 72.9 % 75.4 % 74.2 % (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 RECONCILIATION OF GAAP TO NON-GAAP EPS (1) (Unaudited) (Dollars in thousands, except per share amounts) 06/30/22 09/30/22 12/31/22 03/31/23 FY 2023 06/30/23 09/30/23 FY 2024 Income (loss) from continuing operations before income taxes (24,903 ) (26,874 ) (24,685 ) (42,392 ) (118,854 ) 7,119 14,639 21,758 Income taxes (benefit) 2,315 3,562 5,835 (6,460 ) 5,252 8,705 10,163 18,868 Net earnings (loss) from continuing operations (27,218 ) (30,436 ) (30,520 ) (35,932 ) (124,106 ) (1,586 ) 4,476 2,890 Earnings from discontinued operations, net of tax - - 836 4,568 5,404 - 387 387 Net earnings (loss) (27,218 ) (30,436 ) (29,684 ) (31,364 ) (118,702 ) (1,586 ) 4,863 3,277 Earnings (loss) per share: Basic (0.40 ) (0.45 ) (0.46 ) (0.48 ) (1.79 ) (0.02 ) 0.07 0.05 Diluted (0.40 ) (0.45 ) (0.46 ) (0.48 ) (1.79 ) (0.02 ) 0.07 0.05 Excluded items: Purchased intangible asset amortization (cost of revenue) 4,643 4,637 4,209 3,336 16,825 3,290 1,217 4,507 Non-cash stock compensation (cost of revenue and operating expenses) 24,225 27,293 29,624 44,658 125,800 13,292 15,735 29,027 Restructuring charges (gains, losses, and other) 739 13,111 11,743 9,723 35,316 116 6,574 6,690 Transformation costs (general and administrative) - 1,250 4,112 3,663 9,025 1,875 - 1,875 Total excluded items from continuing operations 29,607 46,291 49,688 61,380 186,966 18,573 23,526 42,099 Income from continuing operations before income taxes and excluding items 4,704 19,417 25,003 18,988 68,112 25,692 38,165 63,857 Income taxes expense (benefit) 1,237 4,557 6,468 (2,141 ) 10,121 6,167 9,036 15,203 Non-GAAP net earnings from continuing operations 3,467 14,860 18,535 21,129 57,991 19,525 29,129 48,654 Non-GAAP earnings per share from continuing operations: Basic 0.05 0.22 0.29 0.32 0.87 0.29 0.44 0.73 Diluted 0.05 0.22 0.28 0.32 0.86 0.29 0.43 0.72 Basic weighted average shares 68,403 67,096 64,784 65,126 66,352 66,497 66,284 66,391 Diluted weighted average shares 69,195 67,568 65,356 66,268 67,097 67,388 67,868 67,628 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 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 OPERATING INCOME GUIDANCE (1) (Unaudited) (Dollars in thousands) For the quarter ending For the year ending December 31, 2023 March 31, 2024 Low High GAAP income from operations 8,000 8,000 11,000 Excluded items: Purchased intangible asset amortization 1,000 7,000 7,000 Non-cash stock compensation 18,000 69,000 69,000 Restructuring charges 2,000 11,000 11,000 Transformation costs - 2,000 2,000 Total excluded items 21,000 89,000 89,000 Non-GAAP income from operations $ 29,000 $ 97,000 $ 100,000 (1) This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our condensed consolidated financial statements prepared in accordance with GAAP. For a detailed explanation of the adjustments made to comparable GAAP measures, the reasons why management uses these measures, the usefulness of these measures and the material limitations on the usefulness of these measures, please see Appendix A. APPENDIX A LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES Q2 FISCAL 2024 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 employees whose positions were eliminated, lease and other contract termination charges, and asset impairments. 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 and again during fiscal 2023 in response to macroeconomic conditions, 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/20231108738860/en/Contacts 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 Second Quarter Results By: LiveRamp via Business Wire November 08, 2023 at 16:05 PM EST Revenue up 9% year over year GAAP Operating Margin of 5% and Non-GAAP Operating Margin of 20% Operating Cash Flow of $36 million Raises Fiscal 2024 Guidance LiveRamp® (NYSE: RAMP), the leading data collaboration platform, today announced its financial results for the fiscal 2024 second quarter ended September 30, 2023. This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20231108738860/en/ Q2 Financial Highlights1 Total revenue was $160 million, up 9%. Subscription revenue was $126 million, up 5%, and accounted for 79% of total revenue. Marketplace & Other revenue was $34 million, up 25%. GAAP gross profit was $119 million, up 13%. GAAP gross margin of 74% expanded by 3 percentage points. Non-GAAP gross profit was $121 million, up 9%. Non-GAAP gross margin of 75% was flat year-on-year. GAAP operating income was $8 million compared to a loss of $29 million. GAAP operating margin was 5% compared to negative 20%. Non-GAAP operating income was $32 million compared to $17 million. Non-GAAP operating margin of 20% expanded by 8 percentage points. GAAP diluted earnings per share was $0.07 and non-GAAP diluted earnings per share was $0.43. Net cash provided by operating activities was $36 million compared to $21 million. Share repurchases in the second quarter totaled approximately 490,000 shares for $15 million, bringing the fiscal first half total to 1.3 million shares for $35 million. A reconciliation between GAAP and non-GAAP results is provided in the schedules to this press release. “We posted strong second quarter results, with both revenue and operating income exceeding our expectations; operating margin was a record high and operating cash flow was positive for a fifth consecutive quarter,” said LiveRamp CEO Scott Howe. “We had our best new logo quarter in two years, including the addition of multiple Fortune 500 customers, demonstrating the traction our Data Collaboration Platform has with marketers looking to more fully leverage their first-party customer data across the digital advertising ecosystem.” ______________ 1 Unless otherwise indicated, all comparisons are to the prior year period. GAAP and Non-GAAP Results The following table summarizes the Company’s financial results for the fiscal 2024 second quarter ended September 30, 2023 ($ in millions, except per share amounts): GAAP Non-GAAP Q2 FY24 Q2 FY23 Q2 FY24 Q2 FY23 Subscription revenue $126 $120 — — YoY change % 5% 14% — — Marketplace & Other revenue $34 $27 — — YoY change % 25% 25% — — Total revenue $160 $147 — — YoY change % 9% 16% — — Gross profit $119 $105 $121 $111 % Gross margin 74% 71% 75% 75% YoY change, pts 3 pts (1 pt) 0 pts (2 pts) Operating income (loss) $8 ($29) $32 $17 % Operating margin 5% (20%) 20% 12% YoY change, pts 25 pts (15 pts) 8 pts (2 pts) Net earnings (loss) $5 ($30) $29 $15 Diluted earnings (loss) per share $0.07 ($0.45) $0.43 $0.22 Shares to calculate diluted EPS 67.9 67.1 67.9 67.6 YoY change % 1% (1%) 0% (3%) Net operating cash flow $36 $21 — — Free cash flow to equity — — $36 $19 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 attached to this press release. Additional Business Highlights & Metrics In August 2023 we were selected as a 2023 Google Cloud Partner of the Year. LiveRamp was recognized as a “Global Industry Technology Partner of the Year” for delivering embedded solutions that help customers enrich their Google Cloud environment and extend value to wherever their data lives. In October 2023 we announced that our identity capabilities are now natively available within AWS Entity Resolution and support additional identifier types. With this integration, marketers, publishers, tech platforms, and agencies can extend the interoperability of data in the cloud to marketing and advertising destinations using RampID. In August 2023 we expanded our reach in the MarTech space by announcing a new partnership with Sendbird, a global in-app conversations platform with over 300 million monthly active users. Joint customers of Sendbird and LiveRamp can now power personalized marketing and consumer experiences using LiveRamp's identity solutions. For the first time marketers can bring together media exposure logs and marketing technology exposure logs to build a more robust view of the customer journey. The Company’s globally scaled Authenticated Traffic Solution (ATS) has more than 165 supply-side platforms (SSPs) and demand-side platforms (DSPs) live or committed to bid on RampID™ and ATS, including The Trade Desk, Xandr, Yahoo, Amobee, Criteo, Adobe Ad Cloud, and Roku Oneview. To date, over 16,000 publisher domains and over 70% of the comScore 100 publishers, have adopted ATS, including Amazon Publisher Services, Microsoft, Hearst, CafeMedia, Leaf Group, Prisma Media and Burda. Through these integrations, LiveRamp is now connected to over 92% of consumer time spent online in the US. We recently announced new partnerships with Epsilon, FreeWheel, and Yahoo that extend the RampID footprint and give brands greater reach to data-driven premium advertising inventory: In September 2023 we announced that our connectivity solution, ATS, is now interoperable with Epsilon’s identity framework. In September 2023 we announced that we are integrating RampID with FreeWheel, a leading supply-side platform for CTV publishers. In October 2023 we announced an expanded partnership with Yahoo to scale advertising addressability and reach by making Yahoo’s ConnectID interoperable with RampID. LiveRamp ended the quarter with 99 customers whose subscription contracts exceed $1 million in annual revenue, compared to 92 in the prior year period. LiveRamp ended the quarter with 895 direct subscription customers, compared to 920 in the prior year period. Second quarter subscription net retention was 101% and platform net retention was 104%. Current remaining performance obligations (CRPO), which is contracted and committed revenue expected to be recognized over the next 12 months, was $339 million, up 16% compared to the prior year period. Financial Outlook LiveRamp’s non-GAAP operating income guidance excludes the impact of non-cash stock compensation, purchased intangible asset amortization, and restructuring and related charges. For the third quarter of fiscal 2024, LiveRamp expects to report: Revenue of $165 million, an increase of 4% GAAP operating income of $8 million Non-GAAP operating income of $29 million For fiscal 2024, LiveRamp updates its guidance and expects to report: Revenue of between $632 million and $637 million, an increase of between 6% and 7% GAAP operating income of between $8 million and $11 million Non-GAAP operating income of between $97 million and $100 million Conference Call LiveRamp will hold a conference call today at 1:30 p.m. PT 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 data collaboration platform of choice for the world’s most innovative companies. A groundbreaking leader in consumer privacy, data ethics, and foundational identity, LiveRamp is setting the new standard for building a connected customer view with unmatched clarity and context while protecting precious brand and consumer trust. LiveRamp offers complete flexibility to collaborate wherever data lives to support the widest range of data collaboration use cases—within organizations, between brands, and across its premier global network of top-quality partners. Hundreds of global innovators, from iconic consumer brands and tech giants to banks, retailers, and healthcare leaders, turn to LiveRamp to build enduring brand and business value by deepening customer engagement and loyalty, activating new partnerships, and maximizing the value of their first-party data while staying on the forefront of rapidly evolving compliance and privacy requirements. LiveRamp is based in San Francisco, California with offices worldwide. Learn more at 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 for fiscal 2024 and beyond, 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 rising interest rates, cost increases, the possibility of a recession, general inflationary pressure, geo-political circumstances that could result in increased economic uncertainties and the associated impacts of these potential events 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; rapidly changing technology’s impact on our products and services; and attracting, motivating and retaining talent. Additional risks include maintaining our culture and our ability to innovate and evolve while operating in a hybrid work environment, with some employees working remotely at least some of the time within a rapidly changing industry, while also avoiding disruption from reductions in our current workforce as well as disruptions resulting from acquisition, divestiture and other activities affecting our workforce. Our global workforce strategy could possibly encounter difficulty and not be as beneficial as planned. Our international operations are also subject to risks, including the performance of third parties as well as impacts from war and civil unrest, 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’ data and/or computer systems, or the risk that our current insurance coverage may not be adequate for such a breach, that an insurer might deny coverage for a claim or that such insurance will continue to be available to us on commercially reasonable terms, or at all, 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 or cloud 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 2023 ended March 31, 2023, and LiveRamp's Quarterly Reports on Form 10-Q issued in fiscal year 2024. 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Ⓡ and RampIDTM and all other LiveRamp marks contained herein are trademarks or service marks of LiveRamp, Inc. All other marks are the property of their respective owners. LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (Dollars in thousands, except per share amounts) For the Three Months Ended September 30, $ % 2023 2022 Variance Variance Revenues 159,871 147,099 12,772 8.7 % Cost of revenue 41,212 42,304 (1,092 ) (2.6 %) Gross profit 118,659 104,795 13,864 13.2 % % Gross margin 74.2 % 71.2 % Operating expenses: Research and development 33,733 46,139 (12,406 ) (26.9 %) Sales and marketing 44,135 45,949 (1,814 ) (3.9 %) General and administrative 26,009 28,718 (2,709 ) (9.4 %) Gains, losses and other items, net 6,574 13,111 (6,537 ) (49.9 %) Total operating expenses 110,451 133,917 (23,466 ) (17.5 %) Income (loss) from operations 8,208 (29,122 ) 37,330 128.2 % % Margin 5.1 % -19.8 % Total other income, net 6,431 2,248 4,183 186.1 % Income (loss) from continuing operations before income taxes 14,639 (26,874 ) 41,513 154.5 % Income tax expense 10,163 3,562 6,601 185.3 % Net earnings (loss) from continuing operations 4,476 (30,436 ) 34,912 114.7 % Earnings from discontinued operations, net of tax 387 - 387 n/a Net earnings (loss) 4,863 (30,436 ) 35,299 116.0 % Basic earnings (loss) per share: Continuing operations 0.07 (0.45 ) 0.52 114.9 % Discontinued operations 0.01 - 0.01 n/a Basic earnings (loss) per share 0.07 (0.45 ) 0.53 115.8 % Diluted earnings (loss) per share: Continuing operations 0.07 (0.45 ) 0.52 114.5 % Discontinued operations 0.01 - 0.01 n/a Diluted earnings (loss) per share: 0.07 (0.45 ) 0.53 115.8 % Basic weighted average shares 66,284 67,096 Diluted weighted average shares 67,868 67,096 LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (Dollars in thousands, except per share amounts) For the Six Months Ended September 30, $ % 2023 2022 Variance Variance Revenues 313,940 289,342 24,598 8.5 % Cost of revenue 86,833 83,325 3,508 4.2 % Gross profit 227,107 206,017 21,090 10.2 % % Gross margin 72.3 % 71.2 % Operating expenses: Research and development 68,252 93,800 (25,548 ) (27.2 %) Sales and marketing 89,014 97,229 (8,215 ) (8.4 %) General and administrative 52,673 55,862 (3,189 ) (5.7 %) Gains, losses and other items, net 6,690 13,850 (7,160 ) (51.7 %) Total operating expenses 216,629 260,741 (44,112 ) (16.9 %) Income (loss) from operations 10,478 (54,724 ) 65,202 119.1 % % Margin 3.3 % -18.9 % Total other income, net 11,280 2,947 8,333 282.8 % Income (loss) from continuing operations before income taxes 21,758 (51,777 ) 73,535 142.0 % Income tax expense 18,868 5,877 12,991 221.0 % Net earnings (loss) from continuing operations 2,890 (57,654 ) 60,544 105.0 % Earnings from discontinued operations, net of tax 387 - 387 n/a Net earnings (loss) 3,277 (57,654 ) 60,931 105.7 % Basic earnings (loss) per share: Continuing operations 0.04 (0.85 ) 0.89 105.1 % Discontinued operations 0.01 - 0.01 n/a Basic earnings (loss) per share 0.05 (0.85 ) 0.90 105.8 % Diluted earnings (loss) per share: Continuing operations 0.04 (0.85 ) 0.89 105.0 % Discontinued operations 0.01 - 0.01 n/a Diluted earnings (loss) per share: 0.05 (0.85 ) 0.90 105.7 % Basic weighted average shares 66,391 67,750 Diluted weighted average shares 67,628 67,750 LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES RECONCILIATION OF GAAP TO NON-GAAP EPS (1) (Unaudited) (Dollars in thousands, except per share amounts) For the Three Months Ended For the Six Months Ended September 30, September 30, 2023 2022 2023 2022 Income (loss) from continuing operations before income taxes 14,639 (26,874 ) 21,758 (51,777 ) Income tax expense 10,163 3,562 18,868 5,877 Net earnings (loss) from continuing operations 4,476 (30,436 ) 2,890 (57,654 ) Earnings from discontinued operations, net of tax 387 - 387 - Net earnings (loss) 4,863 (30,436 ) 3,277 (57,654 ) Earnings (loss) per share: Basic 0.07 (0.45 ) 0.05 (0.85 ) Diluted 0.07 (0.45 ) 0.05 (0.85 ) Excluded items: Purchased intangible asset amortization (cost of revenue) 1,217 4,637 4,507 9,280 Non-cash stock compensation (cost of revenue and operating expenses) 15,735 27,293 29,027 51,518 Transformation costs (general and administrative) - 1,250 1,875 1,250 Restructuring charges (gains, losses, and other) 6,574 13,111 6,690 13,850 Total excluded items, continuing operations 23,526 46,291 42,099 75,898 Income from continuing operations before income taxes and excluding items 38,165 19,417 63,857 24,121 Income tax expense (2) 9,036 4,557 15,203 5,794 Non-GAAP net earnings from continuing operations 29,129 14,860 48,654 18,327 Non-GAAP earnings per share from continuing operations: Basic 0.44 0.22 0.73 0.27 Diluted 0.43 0.22 0.72 0.27 Basic weighted average shares 66,284 67,096 66,391 67,750 Diluted weighted average shares 67,868 67,568 67,628 68,384 (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 consolidated financial statements prepared in accordance with GAAP. For a detailed explanation of the adjustments made to comparable GAAP measures, the reasons why management uses these measures and the material limitations on the usefulness of these measures, please see Appendix A. (2) Income taxes were calculated by applying the estimated annual effective tax rate to year-to-date pretax income or loss and adjusting for discrete tax items in the period. The differences between our GAAP and non-GAAP effective tax rates were primarily due to the net tax effects of the excluded items, coupled with larger pre-tax losses for GAAP purposes versus smaller pre-tax losses or income for non-GAAP purposes. LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES RECONCILIATION OF GAAP TO NON-GAAP INCOME (LOSS) FROM OPERATIONS (1) (Unaudited) (Dollars in thousands) For the Three Months Ended For the Six Months Ended September 30, September 30, 2023 2022 2023 2022 Income (loss) from continuing operations 8,208 (29,122 ) 10,478 (54,724 ) Excluded items: Purchased intangible asset amortization (cost of revenue) 1,217 4,637 4,507 9,280 Non-cash stock compensation (cost of revenue and operating expenses) 15,735 27,293 29,027 51,518 Transformation costs (general and administrative) - 1,250 1,875 1,250 Restructuring charges (gains, losses, and other) 6,574 13,111 6,690 13,850 Total excluded items 23,526 46,291 42,099 75,898 Income from continuing operations before excluded items 31,734 17,169 52,577 21,174 (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 and the material limitations on the usefulness of these measures, please see Appendix A. LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES RECONCILIATION OF ADJUSTED EBITDA (1) (Unaudited) (Dollars in thousands) For the Three Months Ended For the Six Months Ended September 30, September 30, 2023 2022 2023 2022 Net earnings (loss) from continuing operations 4,476 (30,436 ) 2,890 (57,654 ) Income tax expense 10,163 3,562 18,868 5,877 Other income (6,431 ) (2,248 ) (11,280 ) (2,947 ) Income (loss) from operations 8,208 (29,122 ) 10,478 (54,724 ) Depreciation and amortization 1,864 5,689 5,903 11,430 EBITDA 10,072 (23,433 ) 16,381 (43,294 ) Other adjustments: Non-cash stock compensation (cost of revenue and operating expenses) 15,735 27,293 29,027 51,518 Transformation costs (general and administrative) - 1,250 1,875 1,250 Restructuring charges (gains, losses, and other) 6,574 13,111 6,690 13,850 Other adjustments 22,309 41,654 37,592 66,618 Adjusted EBITDA 32,381 18,221 53,973 23,324 (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 CONDENSED CONSOLIDATED BALANCE SHEETS (Dollars in thousands) September 30, March 31, $ % 2023 2023 Variance Variance Assets Current assets: Cash and cash equivalents 492,169 464,448 27,721 6.0 % Short-term investments 31,920 32,807 (887 ) (2.7 %) Trade accounts receivable, net 174,703 157,379 17,324 11.0 % Refundable income taxes, net - 28,897 (28,897 ) (100.0 %) Other current assets 29,054 31,028 (1,974 ) (6.4 %) Total current assets 727,846 714,559 13,287 1.9 % Property and equipment 38,221 39,393 (1,172 ) (3.0 %) Less - accumulated depreciation and amortization 32,647 32,308 339 1.0 % Property and equipment, net 5,574 7,085 (1,511 ) (21.3 %) Intangible assets, net 5,361 9,868 (4,507 ) (45.7 %) Goodwill 360,016 363,116 (3,100 ) (0.9 %) Deferred commissions, net 39,937 37,030 2,907 7.9 % Other assets, net 41,785 41,045 740 1.8 % 1,180,519 1,172,703 7,816 0.7 % Liabilities and Stockholders' Equity Current liabilities: Trade accounts payable 79,344 86,568 (7,224 ) (8.3 %) Accrued payroll and related expenses 35,331 33,434 1,897 5.7 % Other accrued expenses 37,133 35,736 1,397 3.9 % Deferred revenue 20,978 19,091 1,887 9.9 % Income taxes payable 13,911 - 13,911 n/a Total current liabilities 186,697 174,829 11,868 6.8 % Other liabilities 71,964 71,798 166 0.2 % Stockholders' equity: Preferred stock - - - n/a Common stock 15,473 15,399 74 0.5 % Additional paid-in capital 1,889,178 1,855,916 33,262 1.8 % Retained earnings 1,305,568 1,302,291 3,277 0.3 % Accumulated other comprehensive income 3,567 4,504 (937 ) (20.8 %) Treasury stock, at cost (2,291,928 ) (2,252,034 ) (39,894 ) 1.8 % Total stockholders' equity 921,858 926,076 (4,218 ) (0.5 %) 1,180,519 1,172,703 7,816 0.7 % LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Dollars in thousands) For the Three Months Ended September 30, 2023 2022 Cash flows from operating activities: Net earnings (loss) 4,863 (30,436 ) Earnings from discontinued operations, net of tax (387 ) Non-cash operating activities: Depreciation and amortization 1,864 5,689 Gain on disposal or impairment of assets (6 ) (192 ) Lease impairments 2,315 12,225 Provision for doubtful accounts (18 ) 118 Impairment of goodwill 2,875 - Deferred income taxes 40 31 Non-cash stock compensation expense 15,735 27,293 Changes in operating assets and liabilities: Accounts receivable (1,867 ) (3,716 ) Deferred commissions (2,993 ) (551 ) Other assets 735 4,608 Accounts payable and other liabilities 12,340 5,080 Income taxes 6,463 (618 ) Deferred revenue (6,195 ) 1,844 Net cash provided by operating activities 35,764 21,375 Cash flows from investing activities: Capital expenditures (200 ) (2,673 ) Purchases of investments (24,385 ) - Proceeds from sale of investments 25,750 - Purchases of strategic investments (500 ) - Proceeds from sale of strategic investment - 400 Net cash provided by (used in) investing activities 665 (2,273 ) Cash flows from financing activities: Proceeds related to the issuance of common stock under stock and employee benefit plans 2 2 Shares repurchased for tax withholdings upon vesting of stock-based awards (677 ) (708 ) Acquisition of treasury stock (15,122 ) (40,038 ) Net cash used in financing activities (15,797 ) (40,744 ) Cash flows from discontinued operations: From operating activities 387 - Net cash provided by discontinued operations 387 - Effect of exchange rate changes on cash 377 (1,010 ) Net change in cash and cash equivalents 21,396 (22,652 ) Cash and cash equivalents at beginning of period 470,773 508,254 Cash and cash equivalents at end of period 492,169 485,602 Supplemental cash flow information: Cash paid for income taxes, net - continuing operations 3,514 4,157 Cash (received) for income taxes, net - discontinued operations (595 ) - Cash paid for operating lease liabilities 2,689 1,105 Operating lease assets obtained in exchange for operating lease liabilities 1,112 - Operating lease assets relinquished in exchange for operating lease liabilities - (6,781 ) Purchases of property, plant, & equipment, net remaining unpaid at end of period 211 187 LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Dollars in thousands) For the Six Months Ended September 30, 2023 2022 Cash flows from operating activities: Net earnings (loss) 3,277 (57,654 ) Earnings from discontinued operations, net of tax (387 ) Non-cash operating activities: Depreciation and amortization 5,903 11,430 Loss (gain) on disposal or impairment of assets 273 (197 ) Lease impairments 2,344 12,225 Provision for doubtful accounts (237 ) 1,115 Impairment of goodwill 2,875 - Deferred income taxes 87 218 Non-cash stock compensation expense 29,027 51,518 Changes in operating assets and liabilities: Accounts receivable (16,258 ) (11,449 ) Deferred commissions (2,907 ) (920 ) Other assets 5,743 8,960 Accounts payable and other liabilities (12,885 ) (29,477 ) Income taxes 43,699 1,513 Deferred revenue 903 724 Net cash provided by (used in) operating activities 61,457 (11,994 ) Cash flows from investing activities: Capital expenditures (253 ) (4,414 ) Purchases of investments (24,385 ) - Proceeds from sales of investments 25,750 - Purchases of strategic investments (1,000 ) - Proceeds from sales of strategic investments - 400 Net cash provided by (used in) investing activities 112 (4,014 ) Cash flows from financing activities: Proceeds related to the issuance of common stock under stock and employee benefit plans 5,575 4,591 Shares repurchased for tax withholdings upon vesting of stock-based awards (4,569 ) (1,290 ) Acquisition of treasury stock (35,325 ) (100,091 ) Net cash used in financing activities (34,319 ) (96,790 ) Cash flows from discontinued operations: From operating activities 387 - Net cash provided by discontinued operations 387 - Effect of exchange rate changes on cash 84 (1,762 ) Net change in cash and cash equivalents 27,721 (114,560 ) Cash and cash equivalents at beginning of period 464,448 600,162 Cash and cash equivalents at end of period 492,169 485,602 Supplemental cash flow information: Cash (received) paid for income taxes, net - continuing operations (25,139 ) 4,161 Cash (received) for income taxes, net - discontinued operations (595 ) - Cash paid for operating lease liabilities 5,148 3,261 Operating lease assets obtained in exchange for operating lease liabilities 11,677 - Operating lease assets relinquished in exchange for operating lease liabilities (4,486 ) (6,781 ) Purchases of property, plant, & equipment, net remaining unpaid at end of period 211 187 LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES CALCULATION OF FREE CASH FLOW TO EQUITY (1) (Unaudited) (Dollars in thousands) 06/30/22 09/30/22 12/31/22 03/31/23 FY2023 06/30/23 09/30/23 Net Cash Provided by (Used in) Operating Activities-Continuing Operations (33,369 ) 21,375 15,770 30,665 34,441 25,693 35,764 Less: Capital expenditures (1,741 ) (2,673 ) (179 ) (103 ) (4,696 ) (53 ) (200 ) Free Cash Flow to Equity (35,110 ) 18,702 15,591 30,562 29,745 25,640 35,564 (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) FY24 to FY23 06/30/22 09/30/22 12/31/22 03/31/23 FY2023 06/30/23 09/30/23 FY2024 % $ Revenues 142,243 147,099 158,615 148,626 596,583 154,069 159,871 313,940 8.7 % 12,772 Cost of revenue 41,021 42,304 43,287 43,472 170,084 45,621 41,212 86,833 (2.6 %) (1,092 ) Gross profit 101,222 104,795 115,328 105,154 426,499 108,448 118,659 227,107 13.2 % 13,864 % Gross margin 71.2 % 71.2 % 72.7 % 70.8 % 71.5 % 70.4 % 74.2 % 72.3 % Operating expenses Research and development 47,661 46,139 43,175 52,220 189,195 34,519 33,733 68,252 (26.9 %) (12,406 ) Sales and marketing 51,280 45,949 47,702 57,506 202,437 44,879 44,135 89,014 (3.9 %) (1,814 ) General and administrative 27,144 28,718 36,657 32,832 125,351 26,664 26,009 52,673 (9.4 %) (2,709 ) Gains, losses and other items, net 739 13,111 11,743 9,723 35,316 116 6,574 6,690 (49.9 %) (6,537 ) Total operating expenses 126,824 133,917 139,277 152,281 552,299 106,178 110,451 216,629 (17.5 %) (23,466 ) Income (loss) from operations (25,602 ) (29,122 ) (23,949 ) (47,127 ) (125,800 ) 2,270 8,208 10,478 128.2 % 37,330 % Margin -18.0 % -19.8 % -15.1 % -31.7 % -21.1 % 1.5 % 5.1 % 3.3 % Total other income (expense), net 699 2,248 (736 ) 4,735 6,946 4,849 6,431 11,280 186.1 % 4,183 Income (loss) from continuing operations before income taxes (24,903 ) (26,874 ) (24,685 ) (42,392 ) (118,854 ) 7,119 14,639 21,758 154.5 % 41,513 Income taxes expense (benefit) 2,315 3,562 5,835 (6,460 ) 5,252 8,705 10,163 18,868 185.3 % 6,601 Net loss from continuing operations (27,218 ) (30,436 ) (30,520 ) (35,932 ) (124,106 ) (1,586 ) 4,476 2,890 114.7 % 34,912 Earnings from discontinued operations, net of tax - - 836 4,568 5,404 - 387 387 n/a 387.00 Net earnings (loss) (27,218 ) (30,436 ) (29,684 ) (31,364 ) (118,702 ) (1,586 ) 4,863 3,277 116.0 % 35,299 Diluted earnings (loss) per share (0.40 ) (0.45 ) (0.46 ) (0.48 ) (1.79 ) (0.02 ) 0.07 0.05 n/a 0.53 Some earnings (loss) per share amounts may not add due to rounding. LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES RECONCILIATION OF GAAP TO NON-GAAP EXPENSES (1) (Unaudited) (Dollars in thousands) 06/30/22 09/30/22 12/31/22 03/31/23 FY2023 06/30/23 09/30/23 FY2024 Expenses, continuing operations: Cost of revenue 41,021 42,304 43,287 43,472 170,084 45,621 41,212 86,833 Research and development 47,661 46,139 43,175 52,220 189,195 34,519 33,733 68,252 Sales and marketing 51,280 45,949 47,702 57,506 202,437 44,879 44,135 89,014 General and administrative 27,144 28,718 36,657 32,832 125,351 26,664 26,009 52,673 Gains, losses and other items, net 739 13,111 11,743 9,723 35,316 116 6,574 6,690 Gross profit, continuing operations: 101,222 104,795 115,328 105,154 426,499 108,448 118,659 227,107 % Gross margin 71.2 % 71.2 % 72.7 % 70.8 % 71.5 % 70.4 % 74.2 % 72.3 % Excluded items: Purchased intangible asset amortization (cost of revenue) 4,643 4,637 4,209 3,336 16,825 3,290 1,217 4,507 Non-cash stock compensation (cost of revenue) 1,163 1,293 1,208 2,653 6,317 629 629 1,258 Non-cash stock compensation (research and development) 11,656 12,360 10,654 20,737 55,407 5,077 5,293 10,370 Non-cash stock compensation (sales and marketing) 5,884 6,116 5,871 11,558 29,429 3,736 4,786 8,522 Non-cash stock compensation (general and administrative) 5,522 7,524 11,891 9,710 34,647 3,850 5,027 8,877 Restructuring charges (gains, losses, and other) 739 13,111 11,743 9,723 35,316 116 6,574 6,690 Transformation costs (general and administrative) - 1,250 4,112 3,663 9,025 1,875 - 1,875 Total excluded items 29,607 46,291 49,688 61,380 186,966 18,573 23,526 42,099 Expenses, continuing operations excluding items: Cost of revenue 35,215 36,374 37,870 37,483 146,942 41,702 39,366 81,068 Research and development 36,005 33,779 32,521 31,483 133,788 29,442 28,440 57,882 Sales and marketing 45,396 39,833 41,831 45,948 173,008 41,143 39,349 80,492 General and administrative 21,622 19,944 20,654 19,459 81,679 20,939 20,982 41,921 Gains, losses and other items, net - - - - - - - - Gross profit, continuing operations excluding items: 107,028 110,725 120,745 111,143 449,641 112,367 120,505 232,872 % Gross margin 75.2 % 75.3 % 76.1 % 74.8 % 75.4 % 72.9 % 75.4 % 74.2 % (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 RECONCILIATION OF GAAP TO NON-GAAP EPS (1) (Unaudited) (Dollars in thousands, except per share amounts) 06/30/22 09/30/22 12/31/22 03/31/23 FY 2023 06/30/23 09/30/23 FY 2024 Income (loss) from continuing operations before income taxes (24,903 ) (26,874 ) (24,685 ) (42,392 ) (118,854 ) 7,119 14,639 21,758 Income taxes (benefit) 2,315 3,562 5,835 (6,460 ) 5,252 8,705 10,163 18,868 Net earnings (loss) from continuing operations (27,218 ) (30,436 ) (30,520 ) (35,932 ) (124,106 ) (1,586 ) 4,476 2,890 Earnings from discontinued operations, net of tax - - 836 4,568 5,404 - 387 387 Net earnings (loss) (27,218 ) (30,436 ) (29,684 ) (31,364 ) (118,702 ) (1,586 ) 4,863 3,277 Earnings (loss) per share: Basic (0.40 ) (0.45 ) (0.46 ) (0.48 ) (1.79 ) (0.02 ) 0.07 0.05 Diluted (0.40 ) (0.45 ) (0.46 ) (0.48 ) (1.79 ) (0.02 ) 0.07 0.05 Excluded items: Purchased intangible asset amortization (cost of revenue) 4,643 4,637 4,209 3,336 16,825 3,290 1,217 4,507 Non-cash stock compensation (cost of revenue and operating expenses) 24,225 27,293 29,624 44,658 125,800 13,292 15,735 29,027 Restructuring charges (gains, losses, and other) 739 13,111 11,743 9,723 35,316 116 6,574 6,690 Transformation costs (general and administrative) - 1,250 4,112 3,663 9,025 1,875 - 1,875 Total excluded items from continuing operations 29,607 46,291 49,688 61,380 186,966 18,573 23,526 42,099 Income from continuing operations before income taxes and excluding items 4,704 19,417 25,003 18,988 68,112 25,692 38,165 63,857 Income taxes expense (benefit) 1,237 4,557 6,468 (2,141 ) 10,121 6,167 9,036 15,203 Non-GAAP net earnings from continuing operations 3,467 14,860 18,535 21,129 57,991 19,525 29,129 48,654 Non-GAAP earnings per share from continuing operations: Basic 0.05 0.22 0.29 0.32 0.87 0.29 0.44 0.73 Diluted 0.05 0.22 0.28 0.32 0.86 0.29 0.43 0.72 Basic weighted average shares 68,403 67,096 64,784 65,126 66,352 66,497 66,284 66,391 Diluted weighted average shares 69,195 67,568 65,356 66,268 67,097 67,388 67,868 67,628 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 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 OPERATING INCOME GUIDANCE (1) (Unaudited) (Dollars in thousands) For the quarter ending For the year ending December 31, 2023 March 31, 2024 Low High GAAP income from operations 8,000 8,000 11,000 Excluded items: Purchased intangible asset amortization 1,000 7,000 7,000 Non-cash stock compensation 18,000 69,000 69,000 Restructuring charges 2,000 11,000 11,000 Transformation costs - 2,000 2,000 Total excluded items 21,000 89,000 89,000 Non-GAAP income from operations $ 29,000 $ 97,000 $ 100,000 (1) This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our condensed consolidated financial statements prepared in accordance with GAAP. For a detailed explanation of the adjustments made to comparable GAAP measures, the reasons why management uses these measures, the usefulness of these measures and the material limitations on the usefulness of these measures, please see Appendix A. APPENDIX A LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES Q2 FISCAL 2024 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 employees whose positions were eliminated, lease and other contract termination charges, and asset impairments. 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 and again during fiscal 2023 in response to macroeconomic conditions, 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/20231108738860/en/Contacts LiveRamp Investor Relations Investor.Relations@LiveRamp.com ERAMP
Revenue up 9% year over year GAAP Operating Margin of 5% and Non-GAAP Operating Margin of 20% Operating Cash Flow of $36 million Raises Fiscal 2024 Guidance
LiveRamp® (NYSE: RAMP), the leading data collaboration platform, today announced its financial results for the fiscal 2024 second quarter ended September 30, 2023. This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20231108738860/en/ Q2 Financial Highlights1 Total revenue was $160 million, up 9%. Subscription revenue was $126 million, up 5%, and accounted for 79% of total revenue. Marketplace & Other revenue was $34 million, up 25%. GAAP gross profit was $119 million, up 13%. GAAP gross margin of 74% expanded by 3 percentage points. Non-GAAP gross profit was $121 million, up 9%. Non-GAAP gross margin of 75% was flat year-on-year. GAAP operating income was $8 million compared to a loss of $29 million. GAAP operating margin was 5% compared to negative 20%. Non-GAAP operating income was $32 million compared to $17 million. Non-GAAP operating margin of 20% expanded by 8 percentage points. GAAP diluted earnings per share was $0.07 and non-GAAP diluted earnings per share was $0.43. Net cash provided by operating activities was $36 million compared to $21 million. Share repurchases in the second quarter totaled approximately 490,000 shares for $15 million, bringing the fiscal first half total to 1.3 million shares for $35 million. A reconciliation between GAAP and non-GAAP results is provided in the schedules to this press release. “We posted strong second quarter results, with both revenue and operating income exceeding our expectations; operating margin was a record high and operating cash flow was positive for a fifth consecutive quarter,” said LiveRamp CEO Scott Howe. “We had our best new logo quarter in two years, including the addition of multiple Fortune 500 customers, demonstrating the traction our Data Collaboration Platform has with marketers looking to more fully leverage their first-party customer data across the digital advertising ecosystem.” ______________ 1 Unless otherwise indicated, all comparisons are to the prior year period. GAAP and Non-GAAP Results The following table summarizes the Company’s financial results for the fiscal 2024 second quarter ended September 30, 2023 ($ in millions, except per share amounts): GAAP Non-GAAP Q2 FY24 Q2 FY23 Q2 FY24 Q2 FY23 Subscription revenue $126 $120 — — YoY change % 5% 14% — — Marketplace & Other revenue $34 $27 — — YoY change % 25% 25% — — Total revenue $160 $147 — — YoY change % 9% 16% — — Gross profit $119 $105 $121 $111 % Gross margin 74% 71% 75% 75% YoY change, pts 3 pts (1 pt) 0 pts (2 pts) Operating income (loss) $8 ($29) $32 $17 % Operating margin 5% (20%) 20% 12% YoY change, pts 25 pts (15 pts) 8 pts (2 pts) Net earnings (loss) $5 ($30) $29 $15 Diluted earnings (loss) per share $0.07 ($0.45) $0.43 $0.22 Shares to calculate diluted EPS 67.9 67.1 67.9 67.6 YoY change % 1% (1%) 0% (3%) Net operating cash flow $36 $21 — — Free cash flow to equity — — $36 $19 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 attached to this press release. Additional Business Highlights & Metrics In August 2023 we were selected as a 2023 Google Cloud Partner of the Year. LiveRamp was recognized as a “Global Industry Technology Partner of the Year” for delivering embedded solutions that help customers enrich their Google Cloud environment and extend value to wherever their data lives. In October 2023 we announced that our identity capabilities are now natively available within AWS Entity Resolution and support additional identifier types. With this integration, marketers, publishers, tech platforms, and agencies can extend the interoperability of data in the cloud to marketing and advertising destinations using RampID. In August 2023 we expanded our reach in the MarTech space by announcing a new partnership with Sendbird, a global in-app conversations platform with over 300 million monthly active users. Joint customers of Sendbird and LiveRamp can now power personalized marketing and consumer experiences using LiveRamp's identity solutions. For the first time marketers can bring together media exposure logs and marketing technology exposure logs to build a more robust view of the customer journey. The Company’s globally scaled Authenticated Traffic Solution (ATS) has more than 165 supply-side platforms (SSPs) and demand-side platforms (DSPs) live or committed to bid on RampID™ and ATS, including The Trade Desk, Xandr, Yahoo, Amobee, Criteo, Adobe Ad Cloud, and Roku Oneview. To date, over 16,000 publisher domains and over 70% of the comScore 100 publishers, have adopted ATS, including Amazon Publisher Services, Microsoft, Hearst, CafeMedia, Leaf Group, Prisma Media and Burda. Through these integrations, LiveRamp is now connected to over 92% of consumer time spent online in the US. We recently announced new partnerships with Epsilon, FreeWheel, and Yahoo that extend the RampID footprint and give brands greater reach to data-driven premium advertising inventory: In September 2023 we announced that our connectivity solution, ATS, is now interoperable with Epsilon’s identity framework. In September 2023 we announced that we are integrating RampID with FreeWheel, a leading supply-side platform for CTV publishers. In October 2023 we announced an expanded partnership with Yahoo to scale advertising addressability and reach by making Yahoo’s ConnectID interoperable with RampID. LiveRamp ended the quarter with 99 customers whose subscription contracts exceed $1 million in annual revenue, compared to 92 in the prior year period. LiveRamp ended the quarter with 895 direct subscription customers, compared to 920 in the prior year period. Second quarter subscription net retention was 101% and platform net retention was 104%. Current remaining performance obligations (CRPO), which is contracted and committed revenue expected to be recognized over the next 12 months, was $339 million, up 16% compared to the prior year period. Financial Outlook LiveRamp’s non-GAAP operating income guidance excludes the impact of non-cash stock compensation, purchased intangible asset amortization, and restructuring and related charges. For the third quarter of fiscal 2024, LiveRamp expects to report: Revenue of $165 million, an increase of 4% GAAP operating income of $8 million Non-GAAP operating income of $29 million For fiscal 2024, LiveRamp updates its guidance and expects to report: Revenue of between $632 million and $637 million, an increase of between 6% and 7% GAAP operating income of between $8 million and $11 million Non-GAAP operating income of between $97 million and $100 million Conference Call LiveRamp will hold a conference call today at 1:30 p.m. PT 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 data collaboration platform of choice for the world’s most innovative companies. A groundbreaking leader in consumer privacy, data ethics, and foundational identity, LiveRamp is setting the new standard for building a connected customer view with unmatched clarity and context while protecting precious brand and consumer trust. LiveRamp offers complete flexibility to collaborate wherever data lives to support the widest range of data collaboration use cases—within organizations, between brands, and across its premier global network of top-quality partners. Hundreds of global innovators, from iconic consumer brands and tech giants to banks, retailers, and healthcare leaders, turn to LiveRamp to build enduring brand and business value by deepening customer engagement and loyalty, activating new partnerships, and maximizing the value of their first-party data while staying on the forefront of rapidly evolving compliance and privacy requirements. LiveRamp is based in San Francisco, California with offices worldwide. Learn more at 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 for fiscal 2024 and beyond, 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 rising interest rates, cost increases, the possibility of a recession, general inflationary pressure, geo-political circumstances that could result in increased economic uncertainties and the associated impacts of these potential events 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; rapidly changing technology’s impact on our products and services; and attracting, motivating and retaining talent. Additional risks include maintaining our culture and our ability to innovate and evolve while operating in a hybrid work environment, with some employees working remotely at least some of the time within a rapidly changing industry, while also avoiding disruption from reductions in our current workforce as well as disruptions resulting from acquisition, divestiture and other activities affecting our workforce. Our global workforce strategy could possibly encounter difficulty and not be as beneficial as planned. Our international operations are also subject to risks, including the performance of third parties as well as impacts from war and civil unrest, 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’ data and/or computer systems, or the risk that our current insurance coverage may not be adequate for such a breach, that an insurer might deny coverage for a claim or that such insurance will continue to be available to us on commercially reasonable terms, or at all, 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 or cloud 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 2023 ended March 31, 2023, and LiveRamp's Quarterly Reports on Form 10-Q issued in fiscal year 2024. 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Ⓡ and RampIDTM and all other LiveRamp marks contained herein are trademarks or service marks of LiveRamp, Inc. All other marks are the property of their respective owners. LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (Dollars in thousands, except per share amounts) For the Three Months Ended September 30, $ % 2023 2022 Variance Variance Revenues 159,871 147,099 12,772 8.7 % Cost of revenue 41,212 42,304 (1,092 ) (2.6 %) Gross profit 118,659 104,795 13,864 13.2 % % Gross margin 74.2 % 71.2 % Operating expenses: Research and development 33,733 46,139 (12,406 ) (26.9 %) Sales and marketing 44,135 45,949 (1,814 ) (3.9 %) General and administrative 26,009 28,718 (2,709 ) (9.4 %) Gains, losses and other items, net 6,574 13,111 (6,537 ) (49.9 %) Total operating expenses 110,451 133,917 (23,466 ) (17.5 %) Income (loss) from operations 8,208 (29,122 ) 37,330 128.2 % % Margin 5.1 % -19.8 % Total other income, net 6,431 2,248 4,183 186.1 % Income (loss) from continuing operations before income taxes 14,639 (26,874 ) 41,513 154.5 % Income tax expense 10,163 3,562 6,601 185.3 % Net earnings (loss) from continuing operations 4,476 (30,436 ) 34,912 114.7 % Earnings from discontinued operations, net of tax 387 - 387 n/a Net earnings (loss) 4,863 (30,436 ) 35,299 116.0 % Basic earnings (loss) per share: Continuing operations 0.07 (0.45 ) 0.52 114.9 % Discontinued operations 0.01 - 0.01 n/a Basic earnings (loss) per share 0.07 (0.45 ) 0.53 115.8 % Diluted earnings (loss) per share: Continuing operations 0.07 (0.45 ) 0.52 114.5 % Discontinued operations 0.01 - 0.01 n/a Diluted earnings (loss) per share: 0.07 (0.45 ) 0.53 115.8 % Basic weighted average shares 66,284 67,096 Diluted weighted average shares 67,868 67,096 LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (Dollars in thousands, except per share amounts) For the Six Months Ended September 30, $ % 2023 2022 Variance Variance Revenues 313,940 289,342 24,598 8.5 % Cost of revenue 86,833 83,325 3,508 4.2 % Gross profit 227,107 206,017 21,090 10.2 % % Gross margin 72.3 % 71.2 % Operating expenses: Research and development 68,252 93,800 (25,548 ) (27.2 %) Sales and marketing 89,014 97,229 (8,215 ) (8.4 %) General and administrative 52,673 55,862 (3,189 ) (5.7 %) Gains, losses and other items, net 6,690 13,850 (7,160 ) (51.7 %) Total operating expenses 216,629 260,741 (44,112 ) (16.9 %) Income (loss) from operations 10,478 (54,724 ) 65,202 119.1 % % Margin 3.3 % -18.9 % Total other income, net 11,280 2,947 8,333 282.8 % Income (loss) from continuing operations before income taxes 21,758 (51,777 ) 73,535 142.0 % Income tax expense 18,868 5,877 12,991 221.0 % Net earnings (loss) from continuing operations 2,890 (57,654 ) 60,544 105.0 % Earnings from discontinued operations, net of tax 387 - 387 n/a Net earnings (loss) 3,277 (57,654 ) 60,931 105.7 % Basic earnings (loss) per share: Continuing operations 0.04 (0.85 ) 0.89 105.1 % Discontinued operations 0.01 - 0.01 n/a Basic earnings (loss) per share 0.05 (0.85 ) 0.90 105.8 % Diluted earnings (loss) per share: Continuing operations 0.04 (0.85 ) 0.89 105.0 % Discontinued operations 0.01 - 0.01 n/a Diluted earnings (loss) per share: 0.05 (0.85 ) 0.90 105.7 % Basic weighted average shares 66,391 67,750 Diluted weighted average shares 67,628 67,750 LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES RECONCILIATION OF GAAP TO NON-GAAP EPS (1) (Unaudited) (Dollars in thousands, except per share amounts) For the Three Months Ended For the Six Months Ended September 30, September 30, 2023 2022 2023 2022 Income (loss) from continuing operations before income taxes 14,639 (26,874 ) 21,758 (51,777 ) Income tax expense 10,163 3,562 18,868 5,877 Net earnings (loss) from continuing operations 4,476 (30,436 ) 2,890 (57,654 ) Earnings from discontinued operations, net of tax 387 - 387 - Net earnings (loss) 4,863 (30,436 ) 3,277 (57,654 ) Earnings (loss) per share: Basic 0.07 (0.45 ) 0.05 (0.85 ) Diluted 0.07 (0.45 ) 0.05 (0.85 ) Excluded items: Purchased intangible asset amortization (cost of revenue) 1,217 4,637 4,507 9,280 Non-cash stock compensation (cost of revenue and operating expenses) 15,735 27,293 29,027 51,518 Transformation costs (general and administrative) - 1,250 1,875 1,250 Restructuring charges (gains, losses, and other) 6,574 13,111 6,690 13,850 Total excluded items, continuing operations 23,526 46,291 42,099 75,898 Income from continuing operations before income taxes and excluding items 38,165 19,417 63,857 24,121 Income tax expense (2) 9,036 4,557 15,203 5,794 Non-GAAP net earnings from continuing operations 29,129 14,860 48,654 18,327 Non-GAAP earnings per share from continuing operations: Basic 0.44 0.22 0.73 0.27 Diluted 0.43 0.22 0.72 0.27 Basic weighted average shares 66,284 67,096 66,391 67,750 Diluted weighted average shares 67,868 67,568 67,628 68,384 (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 consolidated financial statements prepared in accordance with GAAP. For a detailed explanation of the adjustments made to comparable GAAP measures, the reasons why management uses these measures and the material limitations on the usefulness of these measures, please see Appendix A. (2) Income taxes were calculated by applying the estimated annual effective tax rate to year-to-date pretax income or loss and adjusting for discrete tax items in the period. The differences between our GAAP and non-GAAP effective tax rates were primarily due to the net tax effects of the excluded items, coupled with larger pre-tax losses for GAAP purposes versus smaller pre-tax losses or income for non-GAAP purposes. LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES RECONCILIATION OF GAAP TO NON-GAAP INCOME (LOSS) FROM OPERATIONS (1) (Unaudited) (Dollars in thousands) For the Three Months Ended For the Six Months Ended September 30, September 30, 2023 2022 2023 2022 Income (loss) from continuing operations 8,208 (29,122 ) 10,478 (54,724 ) Excluded items: Purchased intangible asset amortization (cost of revenue) 1,217 4,637 4,507 9,280 Non-cash stock compensation (cost of revenue and operating expenses) 15,735 27,293 29,027 51,518 Transformation costs (general and administrative) - 1,250 1,875 1,250 Restructuring charges (gains, losses, and other) 6,574 13,111 6,690 13,850 Total excluded items 23,526 46,291 42,099 75,898 Income from continuing operations before excluded items 31,734 17,169 52,577 21,174 (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 and the material limitations on the usefulness of these measures, please see Appendix A. LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES RECONCILIATION OF ADJUSTED EBITDA (1) (Unaudited) (Dollars in thousands) For the Three Months Ended For the Six Months Ended September 30, September 30, 2023 2022 2023 2022 Net earnings (loss) from continuing operations 4,476 (30,436 ) 2,890 (57,654 ) Income tax expense 10,163 3,562 18,868 5,877 Other income (6,431 ) (2,248 ) (11,280 ) (2,947 ) Income (loss) from operations 8,208 (29,122 ) 10,478 (54,724 ) Depreciation and amortization 1,864 5,689 5,903 11,430 EBITDA 10,072 (23,433 ) 16,381 (43,294 ) Other adjustments: Non-cash stock compensation (cost of revenue and operating expenses) 15,735 27,293 29,027 51,518 Transformation costs (general and administrative) - 1,250 1,875 1,250 Restructuring charges (gains, losses, and other) 6,574 13,111 6,690 13,850 Other adjustments 22,309 41,654 37,592 66,618 Adjusted EBITDA 32,381 18,221 53,973 23,324 (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 CONDENSED CONSOLIDATED BALANCE SHEETS (Dollars in thousands) September 30, March 31, $ % 2023 2023 Variance Variance Assets Current assets: Cash and cash equivalents 492,169 464,448 27,721 6.0 % Short-term investments 31,920 32,807 (887 ) (2.7 %) Trade accounts receivable, net 174,703 157,379 17,324 11.0 % Refundable income taxes, net - 28,897 (28,897 ) (100.0 %) Other current assets 29,054 31,028 (1,974 ) (6.4 %) Total current assets 727,846 714,559 13,287 1.9 % Property and equipment 38,221 39,393 (1,172 ) (3.0 %) Less - accumulated depreciation and amortization 32,647 32,308 339 1.0 % Property and equipment, net 5,574 7,085 (1,511 ) (21.3 %) Intangible assets, net 5,361 9,868 (4,507 ) (45.7 %) Goodwill 360,016 363,116 (3,100 ) (0.9 %) Deferred commissions, net 39,937 37,030 2,907 7.9 % Other assets, net 41,785 41,045 740 1.8 % 1,180,519 1,172,703 7,816 0.7 % Liabilities and Stockholders' Equity Current liabilities: Trade accounts payable 79,344 86,568 (7,224 ) (8.3 %) Accrued payroll and related expenses 35,331 33,434 1,897 5.7 % Other accrued expenses 37,133 35,736 1,397 3.9 % Deferred revenue 20,978 19,091 1,887 9.9 % Income taxes payable 13,911 - 13,911 n/a Total current liabilities 186,697 174,829 11,868 6.8 % Other liabilities 71,964 71,798 166 0.2 % Stockholders' equity: Preferred stock - - - n/a Common stock 15,473 15,399 74 0.5 % Additional paid-in capital 1,889,178 1,855,916 33,262 1.8 % Retained earnings 1,305,568 1,302,291 3,277 0.3 % Accumulated other comprehensive income 3,567 4,504 (937 ) (20.8 %) Treasury stock, at cost (2,291,928 ) (2,252,034 ) (39,894 ) 1.8 % Total stockholders' equity 921,858 926,076 (4,218 ) (0.5 %) 1,180,519 1,172,703 7,816 0.7 % LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Dollars in thousands) For the Three Months Ended September 30, 2023 2022 Cash flows from operating activities: Net earnings (loss) 4,863 (30,436 ) Earnings from discontinued operations, net of tax (387 ) Non-cash operating activities: Depreciation and amortization 1,864 5,689 Gain on disposal or impairment of assets (6 ) (192 ) Lease impairments 2,315 12,225 Provision for doubtful accounts (18 ) 118 Impairment of goodwill 2,875 - Deferred income taxes 40 31 Non-cash stock compensation expense 15,735 27,293 Changes in operating assets and liabilities: Accounts receivable (1,867 ) (3,716 ) Deferred commissions (2,993 ) (551 ) Other assets 735 4,608 Accounts payable and other liabilities 12,340 5,080 Income taxes 6,463 (618 ) Deferred revenue (6,195 ) 1,844 Net cash provided by operating activities 35,764 21,375 Cash flows from investing activities: Capital expenditures (200 ) (2,673 ) Purchases of investments (24,385 ) - Proceeds from sale of investments 25,750 - Purchases of strategic investments (500 ) - Proceeds from sale of strategic investment - 400 Net cash provided by (used in) investing activities 665 (2,273 ) Cash flows from financing activities: Proceeds related to the issuance of common stock under stock and employee benefit plans 2 2 Shares repurchased for tax withholdings upon vesting of stock-based awards (677 ) (708 ) Acquisition of treasury stock (15,122 ) (40,038 ) Net cash used in financing activities (15,797 ) (40,744 ) Cash flows from discontinued operations: From operating activities 387 - Net cash provided by discontinued operations 387 - Effect of exchange rate changes on cash 377 (1,010 ) Net change in cash and cash equivalents 21,396 (22,652 ) Cash and cash equivalents at beginning of period 470,773 508,254 Cash and cash equivalents at end of period 492,169 485,602 Supplemental cash flow information: Cash paid for income taxes, net - continuing operations 3,514 4,157 Cash (received) for income taxes, net - discontinued operations (595 ) - Cash paid for operating lease liabilities 2,689 1,105 Operating lease assets obtained in exchange for operating lease liabilities 1,112 - Operating lease assets relinquished in exchange for operating lease liabilities - (6,781 ) Purchases of property, plant, & equipment, net remaining unpaid at end of period 211 187 LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Dollars in thousands) For the Six Months Ended September 30, 2023 2022 Cash flows from operating activities: Net earnings (loss) 3,277 (57,654 ) Earnings from discontinued operations, net of tax (387 ) Non-cash operating activities: Depreciation and amortization 5,903 11,430 Loss (gain) on disposal or impairment of assets 273 (197 ) Lease impairments 2,344 12,225 Provision for doubtful accounts (237 ) 1,115 Impairment of goodwill 2,875 - Deferred income taxes 87 218 Non-cash stock compensation expense 29,027 51,518 Changes in operating assets and liabilities: Accounts receivable (16,258 ) (11,449 ) Deferred commissions (2,907 ) (920 ) Other assets 5,743 8,960 Accounts payable and other liabilities (12,885 ) (29,477 ) Income taxes 43,699 1,513 Deferred revenue 903 724 Net cash provided by (used in) operating activities 61,457 (11,994 ) Cash flows from investing activities: Capital expenditures (253 ) (4,414 ) Purchases of investments (24,385 ) - Proceeds from sales of investments 25,750 - Purchases of strategic investments (1,000 ) - Proceeds from sales of strategic investments - 400 Net cash provided by (used in) investing activities 112 (4,014 ) Cash flows from financing activities: Proceeds related to the issuance of common stock under stock and employee benefit plans 5,575 4,591 Shares repurchased for tax withholdings upon vesting of stock-based awards (4,569 ) (1,290 ) Acquisition of treasury stock (35,325 ) (100,091 ) Net cash used in financing activities (34,319 ) (96,790 ) Cash flows from discontinued operations: From operating activities 387 - Net cash provided by discontinued operations 387 - Effect of exchange rate changes on cash 84 (1,762 ) Net change in cash and cash equivalents 27,721 (114,560 ) Cash and cash equivalents at beginning of period 464,448 600,162 Cash and cash equivalents at end of period 492,169 485,602 Supplemental cash flow information: Cash (received) paid for income taxes, net - continuing operations (25,139 ) 4,161 Cash (received) for income taxes, net - discontinued operations (595 ) - Cash paid for operating lease liabilities 5,148 3,261 Operating lease assets obtained in exchange for operating lease liabilities 11,677 - Operating lease assets relinquished in exchange for operating lease liabilities (4,486 ) (6,781 ) Purchases of property, plant, & equipment, net remaining unpaid at end of period 211 187 LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES CALCULATION OF FREE CASH FLOW TO EQUITY (1) (Unaudited) (Dollars in thousands) 06/30/22 09/30/22 12/31/22 03/31/23 FY2023 06/30/23 09/30/23 Net Cash Provided by (Used in) Operating Activities-Continuing Operations (33,369 ) 21,375 15,770 30,665 34,441 25,693 35,764 Less: Capital expenditures (1,741 ) (2,673 ) (179 ) (103 ) (4,696 ) (53 ) (200 ) Free Cash Flow to Equity (35,110 ) 18,702 15,591 30,562 29,745 25,640 35,564 (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) FY24 to FY23 06/30/22 09/30/22 12/31/22 03/31/23 FY2023 06/30/23 09/30/23 FY2024 % $ Revenues 142,243 147,099 158,615 148,626 596,583 154,069 159,871 313,940 8.7 % 12,772 Cost of revenue 41,021 42,304 43,287 43,472 170,084 45,621 41,212 86,833 (2.6 %) (1,092 ) Gross profit 101,222 104,795 115,328 105,154 426,499 108,448 118,659 227,107 13.2 % 13,864 % Gross margin 71.2 % 71.2 % 72.7 % 70.8 % 71.5 % 70.4 % 74.2 % 72.3 % Operating expenses Research and development 47,661 46,139 43,175 52,220 189,195 34,519 33,733 68,252 (26.9 %) (12,406 ) Sales and marketing 51,280 45,949 47,702 57,506 202,437 44,879 44,135 89,014 (3.9 %) (1,814 ) General and administrative 27,144 28,718 36,657 32,832 125,351 26,664 26,009 52,673 (9.4 %) (2,709 ) Gains, losses and other items, net 739 13,111 11,743 9,723 35,316 116 6,574 6,690 (49.9 %) (6,537 ) Total operating expenses 126,824 133,917 139,277 152,281 552,299 106,178 110,451 216,629 (17.5 %) (23,466 ) Income (loss) from operations (25,602 ) (29,122 ) (23,949 ) (47,127 ) (125,800 ) 2,270 8,208 10,478 128.2 % 37,330 % Margin -18.0 % -19.8 % -15.1 % -31.7 % -21.1 % 1.5 % 5.1 % 3.3 % Total other income (expense), net 699 2,248 (736 ) 4,735 6,946 4,849 6,431 11,280 186.1 % 4,183 Income (loss) from continuing operations before income taxes (24,903 ) (26,874 ) (24,685 ) (42,392 ) (118,854 ) 7,119 14,639 21,758 154.5 % 41,513 Income taxes expense (benefit) 2,315 3,562 5,835 (6,460 ) 5,252 8,705 10,163 18,868 185.3 % 6,601 Net loss from continuing operations (27,218 ) (30,436 ) (30,520 ) (35,932 ) (124,106 ) (1,586 ) 4,476 2,890 114.7 % 34,912 Earnings from discontinued operations, net of tax - - 836 4,568 5,404 - 387 387 n/a 387.00 Net earnings (loss) (27,218 ) (30,436 ) (29,684 ) (31,364 ) (118,702 ) (1,586 ) 4,863 3,277 116.0 % 35,299 Diluted earnings (loss) per share (0.40 ) (0.45 ) (0.46 ) (0.48 ) (1.79 ) (0.02 ) 0.07 0.05 n/a 0.53 Some earnings (loss) per share amounts may not add due to rounding. LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES RECONCILIATION OF GAAP TO NON-GAAP EXPENSES (1) (Unaudited) (Dollars in thousands) 06/30/22 09/30/22 12/31/22 03/31/23 FY2023 06/30/23 09/30/23 FY2024 Expenses, continuing operations: Cost of revenue 41,021 42,304 43,287 43,472 170,084 45,621 41,212 86,833 Research and development 47,661 46,139 43,175 52,220 189,195 34,519 33,733 68,252 Sales and marketing 51,280 45,949 47,702 57,506 202,437 44,879 44,135 89,014 General and administrative 27,144 28,718 36,657 32,832 125,351 26,664 26,009 52,673 Gains, losses and other items, net 739 13,111 11,743 9,723 35,316 116 6,574 6,690 Gross profit, continuing operations: 101,222 104,795 115,328 105,154 426,499 108,448 118,659 227,107 % Gross margin 71.2 % 71.2 % 72.7 % 70.8 % 71.5 % 70.4 % 74.2 % 72.3 % Excluded items: Purchased intangible asset amortization (cost of revenue) 4,643 4,637 4,209 3,336 16,825 3,290 1,217 4,507 Non-cash stock compensation (cost of revenue) 1,163 1,293 1,208 2,653 6,317 629 629 1,258 Non-cash stock compensation (research and development) 11,656 12,360 10,654 20,737 55,407 5,077 5,293 10,370 Non-cash stock compensation (sales and marketing) 5,884 6,116 5,871 11,558 29,429 3,736 4,786 8,522 Non-cash stock compensation (general and administrative) 5,522 7,524 11,891 9,710 34,647 3,850 5,027 8,877 Restructuring charges (gains, losses, and other) 739 13,111 11,743 9,723 35,316 116 6,574 6,690 Transformation costs (general and administrative) - 1,250 4,112 3,663 9,025 1,875 - 1,875 Total excluded items 29,607 46,291 49,688 61,380 186,966 18,573 23,526 42,099 Expenses, continuing operations excluding items: Cost of revenue 35,215 36,374 37,870 37,483 146,942 41,702 39,366 81,068 Research and development 36,005 33,779 32,521 31,483 133,788 29,442 28,440 57,882 Sales and marketing 45,396 39,833 41,831 45,948 173,008 41,143 39,349 80,492 General and administrative 21,622 19,944 20,654 19,459 81,679 20,939 20,982 41,921 Gains, losses and other items, net - - - - - - - - Gross profit, continuing operations excluding items: 107,028 110,725 120,745 111,143 449,641 112,367 120,505 232,872 % Gross margin 75.2 % 75.3 % 76.1 % 74.8 % 75.4 % 72.9 % 75.4 % 74.2 % (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 RECONCILIATION OF GAAP TO NON-GAAP EPS (1) (Unaudited) (Dollars in thousands, except per share amounts) 06/30/22 09/30/22 12/31/22 03/31/23 FY 2023 06/30/23 09/30/23 FY 2024 Income (loss) from continuing operations before income taxes (24,903 ) (26,874 ) (24,685 ) (42,392 ) (118,854 ) 7,119 14,639 21,758 Income taxes (benefit) 2,315 3,562 5,835 (6,460 ) 5,252 8,705 10,163 18,868 Net earnings (loss) from continuing operations (27,218 ) (30,436 ) (30,520 ) (35,932 ) (124,106 ) (1,586 ) 4,476 2,890 Earnings from discontinued operations, net of tax - - 836 4,568 5,404 - 387 387 Net earnings (loss) (27,218 ) (30,436 ) (29,684 ) (31,364 ) (118,702 ) (1,586 ) 4,863 3,277 Earnings (loss) per share: Basic (0.40 ) (0.45 ) (0.46 ) (0.48 ) (1.79 ) (0.02 ) 0.07 0.05 Diluted (0.40 ) (0.45 ) (0.46 ) (0.48 ) (1.79 ) (0.02 ) 0.07 0.05 Excluded items: Purchased intangible asset amortization (cost of revenue) 4,643 4,637 4,209 3,336 16,825 3,290 1,217 4,507 Non-cash stock compensation (cost of revenue and operating expenses) 24,225 27,293 29,624 44,658 125,800 13,292 15,735 29,027 Restructuring charges (gains, losses, and other) 739 13,111 11,743 9,723 35,316 116 6,574 6,690 Transformation costs (general and administrative) - 1,250 4,112 3,663 9,025 1,875 - 1,875 Total excluded items from continuing operations 29,607 46,291 49,688 61,380 186,966 18,573 23,526 42,099 Income from continuing operations before income taxes and excluding items 4,704 19,417 25,003 18,988 68,112 25,692 38,165 63,857 Income taxes expense (benefit) 1,237 4,557 6,468 (2,141 ) 10,121 6,167 9,036 15,203 Non-GAAP net earnings from continuing operations 3,467 14,860 18,535 21,129 57,991 19,525 29,129 48,654 Non-GAAP earnings per share from continuing operations: Basic 0.05 0.22 0.29 0.32 0.87 0.29 0.44 0.73 Diluted 0.05 0.22 0.28 0.32 0.86 0.29 0.43 0.72 Basic weighted average shares 68,403 67,096 64,784 65,126 66,352 66,497 66,284 66,391 Diluted weighted average shares 69,195 67,568 65,356 66,268 67,097 67,388 67,868 67,628 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 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 OPERATING INCOME GUIDANCE (1) (Unaudited) (Dollars in thousands) For the quarter ending For the year ending December 31, 2023 March 31, 2024 Low High GAAP income from operations 8,000 8,000 11,000 Excluded items: Purchased intangible asset amortization 1,000 7,000 7,000 Non-cash stock compensation 18,000 69,000 69,000 Restructuring charges 2,000 11,000 11,000 Transformation costs - 2,000 2,000 Total excluded items 21,000 89,000 89,000 Non-GAAP income from operations $ 29,000 $ 97,000 $ 100,000 (1) This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our condensed consolidated financial statements prepared in accordance with GAAP. For a detailed explanation of the adjustments made to comparable GAAP measures, the reasons why management uses these measures, the usefulness of these measures and the material limitations on the usefulness of these measures, please see Appendix A. APPENDIX A LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES Q2 FISCAL 2024 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 employees whose positions were eliminated, lease and other contract termination charges, and asset impairments. 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 and again during fiscal 2023 in response to macroeconomic conditions, 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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