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 First Quarter Results By: LiveRamp via Business Wire August 09, 2023 at 16:05 PM EDT Revenue up 8% year over year GAAP Operating Margin of 1% and Non-GAAP Operating Margin of 14% Operating Cash Flow of $26 million $20 million in Share Repurchases LiveRamp® (NYSE: RAMP), the leading data collaboration platform, today announced its financial results for the fiscal 2024 first quarter ended June 30, 2023. This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20230809407441/en/ Q1 Financial Highlights1 Total revenue was $154 million, up 8% Subscription revenue was $122 million, up 5%, and accounted for 79% of total revenue. Marketplace & Other revenue was $32 million, up 21%. GAAP gross profit was $108 million, up 7%. GAAP gross margin of 70% contracted by 1 percentage point. Non-GAAP gross profit was $112 million, up 5%. Non-GAAP gross margin of 73% contracted by 2 percentage points. GAAP operating income was $2 million compared to a loss of $26 million. GAAP operating margin was 1% compared to negative 18%. Non-GAAP operating income was $21 million compared to $4 million. Non-GAAP operating margin of 14% expanded by 11 percentage points. GAAP diluted loss per share was $0.02 and non-GAAP diluted earnings per share was $0.29. Net cash provided by operating activities was $26 million compared to a use of $33 million. Operating cash flow benefited from a $29 million tax refund for fiscal 2021. Repurchased approximately 835,000 shares for $20 million in the first quarter. A reconciliation between GAAP and non-GAAP results is provided in the schedules to this press release. "We’re off to a strong start to the fiscal year, with first quarter revenue and operating income exceeding our expectations, operating margin expanding by double-digits and our first quarter ever with positive GAAP operating income,” said LiveRamp CEO Scott Howe. “Our data collaboration platform remains in high demand with the world’s most sophisticated marketers, helping them deliver relevant messages and measure results across all addressable channels, including social networks, the open web, programmatic, retail media networks and connected TV.” ______________ 1Unless otherwise indicated, all comparisons are to the prior year period. GAAP and Non-GAAP Results The following table summarizes the Company’s financial results for the fiscal first quarter ended June 30, 2023 ($ in millions): Q1 Fiscal 2024 Q1 Fiscal 2023 Results Results GAAP Non-GAAP GAAP Non-GAAP Subscription revenue $122 — $116 — YoY change % 5% 20% Marketplace & Other revenue $32 — $27 — YoY change % 21% 18% Total revenue $154 — $142 — YoY change % 8% 19% Gross profit $108 $112 $101 $107 % Gross margin 70% 73% 71% 75% YoY change, pts (1) pt (2) pts — — Operating income (loss) $2 $21 ($26) $4 % Operating margin 1% 14% (18%) 3% YoY change, pts 19 pts 11 pts (3) pts (3) pts Net earnings (loss) ($2) $20 ($27) $3 Diluted earnings (loss) per share ($0.02) $0.29 ($0.40) $0.05 Shares to calculate diluted EPS 66.5 67.4 68.4 69.2 YoY change % (3%) (3%) 0% (1%) Net operating cash flow $26 — ($33) — Free cash flow to equity — $26 — ($35) 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 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, Xander, Amobee, Criteo, Adobe Ad Cloud, and Roku Oneview. To date, over 14,000 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 90% of consumer time spent online in the US. In May 2023 we integrated Google Display & Video 360's PAIR (Publisher Advertiser Identity Reconciliation) into the LiveRamp platform and started running brand campaigns. With PAIR, publishers and marketers can securely and privately reconcile their first-party data for marketing use cases on Display & Video 360, Google's DSP. This step forward unlocks additional scale across inventory already impacted by third-party cookie changes, while also providing a sustainable solution for the future across all channels, including Connected TV. In June 2023 our native applications for identity resolution debuted in the Snowflake Native App Framework. This means LiveRamp customers can seamlessly access our identity resolution and activation capabilities directly in their Snowflake data environment, eliminating the need to move or copy data and, thereby, reducing security and privacy risks. LiveRamp has 915 direct subscription customers, up from 910 in the prior year period. LiveRamp has 96 customers whose subscription contracts exceed $1 million in annual revenue, up from 90 in the prior year period. During the first quarter, subscription net retention was 98% and platform net retention was 102%. Current remaining performance obligations (CRPO), which is contracted and committed revenue expected to be recognized over the next 12 months, was $351 million, up 19% 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 second quarter of fiscal 2024, LiveRamp expects to report: Revenue of $152 million, an increase of 3% GAAP operating income of $1 million Non-GAAP operating income of $19 million For fiscal 2024, LiveRamp updates its guidance and expects to report: Revenue of between $620 million and $630 million, an increase of between 4% and 6% GAAP operating income of between $2 million and $5 million Non-GAAP operating income of between $90 million and $93 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, 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; and attracting 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 June 30, $ % 2023 2022 Variance Variance Revenues 154,069 142,243 11,826 8.3 % Cost of revenue 45,621 41,021 4,600 11.2 % Gross profit 108,448 101,222 7,226 7.1 % % Gross margin 70.4 % 71.2 % Operating expenses: Research and development 34,519 47,661 (13,142 ) (27.6 %) Sales and marketing 44,879 51,280 (6,401 ) (12.5 %) General and administrative 26,664 27,144 (480 ) (1.8 %) Gains, losses and other items, net 116 739 (623 ) (84.3 %) Total operating expenses 106,178 126,824 (20,646 ) (16.3 %) Income (loss) from operations 2,270 (25,602 ) 27,872 108.9 % % Margin 1.5 % -18.0 % Total other income, net 4,849 699 4,150 593.7 % Income (loss) from operations before income taxes 7,119 (24,903 ) 32,022 128.6 % Income tax expense 8,705 2,315 6,390 276.0 % Net loss (1,586 ) (27,218 ) 25,632 94.2 % Basic loss per share (0.02 ) (0.40 ) 0.37 94.0 % Diluted loss per share: (0.02 ) (0.40 ) 0.37 94.0 % Basic weighted average shares 66,497 68,403 Diluted weighted average shares 66,497 68,403 LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES RECONCILIATION OF GAAP TO NON-GAAP EPS (1) (Unaudited) (Dollars in thousands, except per share amounts) For the Three Months Ended June 30, 2023 2022 Income (loss) from operations before income taxes 7,119 (24,903 ) Income tax expense 8,705 2,315 Net loss (1,586 ) (27,218 ) Loss per share: Basic (0.02 ) (0.40 ) Diluted (0.02 ) (0.40 ) Excluded items: Purchased intangible asset amortization (cost of revenue) 3,290 4,643 Non-cash stock compensation (cost of revenue and operating expenses) 13,292 24,225 Transformation costs (general and administrative) 1,875 - Restructuring and merger charges (gains, losses, and other) 116 739 Total excluded items 18,573 29,607 Income from operations before income taxes and excluding items 25,692 4,704 Income tax expense (2) 6,167 1,237 Non-GAAP net earnings 19,525 3,467 Non-GAAP earnings per share: Basic 0.29 0.05 Diluted 0.29 0.05 Basic weighted average shares 66,497 68,403 Diluted weighted average shares 67,388 69,195 (1) This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our condensed consolidated financial statements prepared in accordance with GAAP. For a detailed explanation of the adjustments made to comparable GAAP measures, the reasons why management uses these measures and the material limitations on the usefulness of these measures, please see Appendix A. (2) Income taxes were calculated by applying the estimated annual effective tax rate to year-to-date pretax income or loss and adjusting for discrete tax items in the period. The differences between our GAAP and non-GAAP effective tax rates were primarily due to the net tax effects of the excluded items, coupled with larger pre-tax losses for GAAP purposes versus smaller pre-tax losses or income for non-GAAP purposes. LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES RECONCILIATION OF GAAP TO NON-GAAP INCOME (LOSS) FROM OPERATIONS (1) (Unaudited) (Dollars in thousands) For the Three Months Ended June 30, 2023 2022 Income (loss) from operations 2,270 (25,602 ) Excluded items: Purchased intangible asset amortization (cost of revenue) 3,290 4,643 Non-cash stock compensation (cost of revenue and operating expenses) 13,292 24,225 Transformation costs (general and administrative) 1,875 - Restructuring and merger charges (gains, losses, and other) 116 739 Total excluded items 18,573 29,607 Income from operations before excluded items 20,843 4,005 (1) This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our condensed consolidated financial statements prepared in accordance with GAAP. For a detailed explanation of the adjustments made to comparable GAAP measures, the reasons why management uses these measures and the material limitations on the usefulness of these measures, please see Appendix A. LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES RECONCILIATION OF ADJUSTED EBITDA (1) (Unaudited) (Dollars in thousands) For the Three Months Ended June 30, 2023 2022 Net loss (1,586 ) (27,218 ) Income tax expense 8,705 2,315 Other income (4,849 ) (699 ) Income (loss) from operations 2,270 (25,602 ) Depreciation and amortization 4,039 5,741 EBITDA 6,309 (19,861 ) Other adjustments: Non-cash stock compensation (cost of revenue and operating expenses) 13,292 24,225 Transformation costs (general and administrative) 1,875 - Restructuring and merger charges (gains, losses, and other) 116 739 Other adjustments 15,283 24,964 Adjusted EBITDA 21,592 5,103 (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) June 30, March 31, $ % 2023 2023 Variance Variance Assets Current assets: Cash and cash equivalents 470,773 464,448 6,325 1.4 % Short-term investments 33,099 32,807 292 0.9 % Trade accounts receivable, net 173,083 157,379 15,704 10.0 % Refundable income taxes, net - 28,897 (28,897 ) (100.0 %) Other current assets 29,091 31,028 (1,937 ) (6.2 %) Total current assets 706,046 714,559 (8,513 ) (1.2 %) Property and equipment 37,927 39,393 (1,466 ) (3.7 %) Less - accumulated depreciation and amortization 31,872 32,308 (436 ) (1.3 %) Property and equipment, net 6,055 7,085 (1,030 ) (14.5 %) Intangible assets, net 6,578 9,868 (3,290 ) (33.3 %) Goodwill 363,178 363,116 62 0.0 % Deferred commissions, net 36,944 37,030 (86 ) (0.2 %) Other assets, net 45,130 41,045 4,085 10.0 % 1,163,931 1,172,703 (8,772 ) (0.7 %) Liabilities and Stockholders' Equity Current liabilities: Trade accounts payable 74,077 86,568 (12,491 ) (14.4 %) Accrued payroll and related expenses 23,929 33,434 (9,505 ) (28.4 %) Other accrued expenses 39,322 35,736 3,586 10.0 % Deferred revenue 27,267 19,091 8,176 42.8 % Income taxes payable 7,782 - 7,782 n/a Total current liabilities 172,377 174,829 (2,452 ) (1.4 %) Other liabilities 73,023 71,798 1,225 1.7 % Stockholders' equity: Preferred stock - - - n/a Common stock 15,455 15,399 56 0.4 % Additional paid-in capital 1,873,935 1,855,916 18,019 1.0 % Retained earnings 1,300,705 1,302,291 (1,586 ) (0.1 %) Accumulated other comprehensive income 4,565 4,504 61 1.4 % Treasury stock, at cost (2,276,129 ) (2,252,034 ) (24,095 ) 1.1 % Total stockholders' equity 918,531 926,076 (7,545 ) (0.8 %) 1,163,931 1,172,703 (8,772 ) (0.7 %) LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Dollars in thousands) For the Three Months Ended June 30, 2023 2022 Cash flows from operating activities: Net loss (1,586 ) (27,218 ) Non-cash operating activities: Depreciation and amortization 4,039 5,741 Loss (gain) on disposal or impairment of assets 308 (5 ) Provision for doubtful accounts (219 ) 997 Deferred income taxes 47 187 Non-cash stock compensation expense 13,292 24,225 Changes in operating assets and liabilities: Accounts receivable (14,391 ) (7,733 ) Deferred commissions 86 (369 ) Other assets 5,008 4,352 Accounts payable and other liabilities (25,225 ) (34,557 ) Income taxes 37,236 2,131 Deferred revenue 7,098 (1,120 ) Net cash provided by (used in) operating activities 25,693 (33,369 ) Cash flows from investing activities: Capital expenditures (53 ) (1,741 ) Purchases of strategic investments (500 ) - Net cash used in investing activities (553 ) (1,741 ) Cash flows from financing activities: Proceeds related to the issuance of common stock under stock and employee benefit plans 5,573 4,589 Shares repurchased for tax withholdings upon vesting of stock-based awards (3,892 ) (582 ) Acquisition of treasury stock (20,203 ) (60,053 ) Net cash used in financing activities (18,522 ) (56,046 ) Effect of exchange rate changes on cash (293 ) (752 ) Net change in cash and cash equivalents 6,325 (91,908 ) Cash and cash equivalents at beginning of period 464,448 600,162 Cash and cash equivalents at end of period 470,773 508,254 Supplemental cash flow information: Cash paid (received) during the period for: Income taxes related to continuing operations (28,653 ) 4 Operating lease liabilities 2,459 2,156 Operating lease assets obtained in exchange for operating lease liabilities 10,565 - Operating lease assets relinquished in exchange for operating lease liabilities (4,486 ) - Purchases of property, plant, & equipment, net remaining unpaid at end of period - 1,666 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 % $ Revenues 142,243 147,099 158,615 148,626 596,583 154,069 8.3 % 11,826 Cost of revenue 41,021 42,304 43,287 43,472 170,084 45,621 11.2 % 4,600 Gross profit 101,222 104,795 115,328 105,154 426,499 108,448 7.1 % 7,226 % Gross margin 71.2 % 71.2 % 72.7 % 70.8 % 71.5 % 70.4 % Operating expenses Research and development 47,661 46,139 43,175 52,220 189,195 34,519 (27.6 %) (13,142 ) Sales and marketing 51,280 45,949 47,702 57,506 202,437 44,879 (12.5 %) (6,401 ) General and administrative 27,144 28,718 36,657 32,832 125,351 26,664 (1.8 %) (480 ) Gains, losses and other items, net 739 13,111 11,743 9,723 35,316 116 (84.3 %) (623 ) Total operating expenses 126,824 133,917 139,277 152,281 552,299 106,178 (16.3 %) (20,646 ) Income (loss) from operations (25,602 ) (29,122 ) (23,949 ) (47,127 ) (125,800 ) 2,270 108.9 % 27,872 % Margin -18.0 % -19.8 % -15.1 % -31.7 % -21.1 % 1.5 % Total other income (expense), net 699 2,248 (736 ) 4,735 6,946 4,849 593.7 % 4,150 Income (loss) from continuing operations before income taxes (24,903 ) (26,874 ) (24,685 ) (42,392 ) (118,854 ) 7,119 128.6 % 32,022 Income taxes expense (benefit) 2,315 3,562 5,835 (6,460 ) 5,252 8,705 276.0 % 6,390 Net loss from continuing operations (27,218 ) (30,436 ) (30,520 ) (35,932 ) (124,106 ) (1,586 ) 94.2 % 25,632 Earnings from discontinued operations, net of tax - - 836 4,568 5,404 - n/a - Net loss (27,218 ) (30,436 ) (29,684 ) (31,364 ) (118,702 ) (1,586 ) 94.2 % 25,632 Diluted loss per share (0.40 ) (0.45 ) (0.46 ) (0.48 ) (1.79 ) (0.02 ) 94.0 % 0.37 Some earnings (loss) per share amounts may not add due to rounding. Basic shares 68,403 67,096 64,784 65,126 66,352 66,497 Diluted shares 69,195 67,568 65,356 66,268 67,097 67,388 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 Net Cash Provided by (Used in) Operating Activities-Continuing Operations (33,369 ) 21,375 15,770 30,665 34,441 25,693 Less: Capital expenditures (1,741 ) (2,673 ) (179 ) (103 ) (4,696 ) (53 ) Free Cash Flow to Equity (35,110 ) 18,702 15,591 30,562 29,745 25,640 (1) This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our condensed consolidated financial statements prepared in accordance with GAAP. For a detailed explanation of the adjustments made to comparable GAAP measures, the reasons why management uses these measures and the material limitations on the usefulness of these measures, please see Appendix A. LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES RECONCILIATION OF GAAP TO NON-GAAP EXPENSES (1) (Unaudited) (Dollars in thousands) 06/30/22 09/30/22 12/31/22 03/31/23 FY2023 06/30/23 Expenses, continuing operations: Cost of revenue 41,021 42,304 43,287 43,472 170,084 45,621 Research and development 47,661 46,139 43,175 52,220 189,195 34,519 Sales and marketing 51,280 45,949 47,702 57,506 202,437 44,879 General and administrative 27,144 28,718 36,657 32,832 125,351 26,664 Gains, losses and other items, net 739 13,111 11,743.00 9,723 35,316 116 Gross profit, continuing operations: 101,222 104,795 115,328 105,154 426,499 108,448 % Gross margin 71.2 % 71.2 % 72.7 % 70.8 % 71.5 % 70.4 % Excluded items: Purchased intangible asset amortization (cost of revenue) 4,643 4,637 4,209 3,336 16,825 3,290 Non-cash stock compensation (cost of revenue) 1,163 1,293 1,208 2,653 6,317 629 Non-cash stock compensation (research and development) 11,656 12,360 10,654 20,737 55,407 5,077 Non-cash stock compensation (sales and marketing) 5,884 6,116 5,871 11,558 29,429 3,736 Non-cash stock compensation (general and administrative) 5,522 7,524 11,891 9,710 34,647 3,850 Restructuring and merger charges (gains, losses, and other) 739 13,111 11,743 9,723 35,316 116 Transformation costs (general and administrative) - 1,250 4,112 3,663 9,025 1,875 Total excluded items 29,607 46,291 49,688 61,380 186,966 18,573 Expenses, continued operations excluding items: Cost of revenue 35,215 36,374 37,870 37,483 146,942 41,702 Research and development 36,005 33,779 32,521 31,483 133,788 29,442 Sales and marketing 45,396 39,833 41,831 45,948 173,008 41,143 General and administrative 21,622 19,944 20,654 19,459 81,679 20,939 Gains, losses and other items, net - - - - - - Gross profit, continued operations excluding items: 107,028 110,725 120,745 111,143 449,641 112,367 % Gross margin 75.2 % 75.3 % 76.1 % 74.8 % 75.4 % 72.9 % (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 Income (loss) from continuing operations before income taxes (24,903 ) (26,874 ) (24,685 ) (42,392 ) (118,854 ) 7,119 Income taxes (benefit) 2,315 3,562 5,835 (6,460 ) 5,252 8,705 Net earnings (loss) from continuing operations (27,218 ) (30,436 ) (30,520 ) (35,932 ) (124,106 ) (1,586 ) Earnings from discontinued operations, net of tax - - 836 4,568 5,404 - Net earnings (loss) (27,218 ) (30,436 ) (29,684 ) (31,364 ) (118,702 ) (1,586 ) Earnings (loss) per share: Basic (0.40 ) (0.45 ) (0.46 ) (0.48 ) (1.79 ) (0.02 ) Diluted (0.40 ) (0.45 ) (0.46 ) (0.48 ) (1.79 ) (0.02 ) Excluded items: Purchased intangible asset amortization (cost of revenue) 4,643 4,637 4,209 3,336 16,825 3,290 Non-cash stock compensation (cost of revenue and operating expenses) 24,225 27,293 29,624 44,658 125,800 13,292 Restructuring and merger charges (gains, losses, and other) 739 13,111 11,743 9,723 35,316 116 Transformation costs (general and administrative) - 1,250 4,112 3,663 9,025 1,875 Total excluded items from continuing operations 29,607 46,291 49,688 61,380 186,966 18,573 Income from continuing operations before income taxes and excluding items 4,704 19,417 25,003 18,988 68,112 25,692 Income taxes expense (benefit) 1,237 4,557 6,468 (2,141 ) 10,121 6,167 Non-GAAP net earnings from continuing operations 3,467 14,860 18,535 21,129 57,991 19,525 Non-GAAP earnings per share from continuing operations: Basic 0.05 0.22 0.29 0.32 0.87 0.29 Diluted 0.05 0.22 0.28 0.32 0.86 0.29 Basic weighted average shares 68,403 67,096 64,784 65,126 66,352 66,497 Diluted weighted average shares 69,195 67,568 65,356 66,268 67,097 67,388 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 September 30, 2023 March 31, 2024 Low High GAAP income from operations 1,000 2,000 5,000 Excluded items: Purchased intangible asset amortization 1,000 7,000 7,000 Non-cash stock compensation 16,000 72,000 72,000 Restructuring charges 1,000 7,000 7,000 Transformation costs - 2,000 2,000 Total excluded items 18,000 88,000 88,000 Non-GAAP income from operations $ 19,000 $ 90,000 $ 93,000 (1) This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our condensed consolidated financial statements prepared in accordance with GAAP. For a detailed explanation of the adjustments made to comparable GAAP measures, the reasons why management uses these measures, the usefulness of these measures and the material limitations on the usefulness of these measures, please see Appendix A. APPENDIX A LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES Q1 FISCAL 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 leasehold improvement write offs. These items, reported as gains, losses, and other items, net, are excluded from non-GAAP results because such amounts are not used by us to assess the core profitability of our business operations. Transformation costs: In previous years, we incurred significant expenses to separate the financial statements of our operating segments, with particular focus on segment-level balance sheets, and to evaluate portfolio priorities. Our criteria for excluding transformation expenses from our non-GAAP measures is as follows: 1) projects are discrete in nature; 2) excluded expenses consist only of third-party consulting fees that we would not incur otherwise; and 3) we do not exclude employee related expenses or other costs associated with the ongoing operations of our business. We substantially completed those projects during the third quarter of fiscal year 2018. Beginning in the fourth quarter of fiscal 2018, and through most of fiscal 2019, we incurred transaction support expenses and system separation costs related to the Company's announced evaluation of strategic options for its Marketing Solutions (AMS) business. In the first and second quarters of fiscal 2021 in response to the potential COVID-19 pandemic impact on our business 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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LiveRamp Announces First Quarter Results By: LiveRamp via Business Wire August 09, 2023 at 16:05 PM EDT Revenue up 8% year over year GAAP Operating Margin of 1% and Non-GAAP Operating Margin of 14% Operating Cash Flow of $26 million $20 million in Share Repurchases LiveRamp® (NYSE: RAMP), the leading data collaboration platform, today announced its financial results for the fiscal 2024 first quarter ended June 30, 2023. This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20230809407441/en/ Q1 Financial Highlights1 Total revenue was $154 million, up 8% Subscription revenue was $122 million, up 5%, and accounted for 79% of total revenue. Marketplace & Other revenue was $32 million, up 21%. GAAP gross profit was $108 million, up 7%. GAAP gross margin of 70% contracted by 1 percentage point. Non-GAAP gross profit was $112 million, up 5%. Non-GAAP gross margin of 73% contracted by 2 percentage points. GAAP operating income was $2 million compared to a loss of $26 million. GAAP operating margin was 1% compared to negative 18%. Non-GAAP operating income was $21 million compared to $4 million. Non-GAAP operating margin of 14% expanded by 11 percentage points. GAAP diluted loss per share was $0.02 and non-GAAP diluted earnings per share was $0.29. Net cash provided by operating activities was $26 million compared to a use of $33 million. Operating cash flow benefited from a $29 million tax refund for fiscal 2021. Repurchased approximately 835,000 shares for $20 million in the first quarter. A reconciliation between GAAP and non-GAAP results is provided in the schedules to this press release. "We’re off to a strong start to the fiscal year, with first quarter revenue and operating income exceeding our expectations, operating margin expanding by double-digits and our first quarter ever with positive GAAP operating income,” said LiveRamp CEO Scott Howe. “Our data collaboration platform remains in high demand with the world’s most sophisticated marketers, helping them deliver relevant messages and measure results across all addressable channels, including social networks, the open web, programmatic, retail media networks and connected TV.” ______________ 1Unless otherwise indicated, all comparisons are to the prior year period. GAAP and Non-GAAP Results The following table summarizes the Company’s financial results for the fiscal first quarter ended June 30, 2023 ($ in millions): Q1 Fiscal 2024 Q1 Fiscal 2023 Results Results GAAP Non-GAAP GAAP Non-GAAP Subscription revenue $122 — $116 — YoY change % 5% 20% Marketplace & Other revenue $32 — $27 — YoY change % 21% 18% Total revenue $154 — $142 — YoY change % 8% 19% Gross profit $108 $112 $101 $107 % Gross margin 70% 73% 71% 75% YoY change, pts (1) pt (2) pts — — Operating income (loss) $2 $21 ($26) $4 % Operating margin 1% 14% (18%) 3% YoY change, pts 19 pts 11 pts (3) pts (3) pts Net earnings (loss) ($2) $20 ($27) $3 Diluted earnings (loss) per share ($0.02) $0.29 ($0.40) $0.05 Shares to calculate diluted EPS 66.5 67.4 68.4 69.2 YoY change % (3%) (3%) 0% (1%) Net operating cash flow $26 — ($33) — Free cash flow to equity — $26 — ($35) 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 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, Xander, Amobee, Criteo, Adobe Ad Cloud, and Roku Oneview. To date, over 14,000 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 90% of consumer time spent online in the US. In May 2023 we integrated Google Display & Video 360's PAIR (Publisher Advertiser Identity Reconciliation) into the LiveRamp platform and started running brand campaigns. With PAIR, publishers and marketers can securely and privately reconcile their first-party data for marketing use cases on Display & Video 360, Google's DSP. This step forward unlocks additional scale across inventory already impacted by third-party cookie changes, while also providing a sustainable solution for the future across all channels, including Connected TV. In June 2023 our native applications for identity resolution debuted in the Snowflake Native App Framework. This means LiveRamp customers can seamlessly access our identity resolution and activation capabilities directly in their Snowflake data environment, eliminating the need to move or copy data and, thereby, reducing security and privacy risks. LiveRamp has 915 direct subscription customers, up from 910 in the prior year period. LiveRamp has 96 customers whose subscription contracts exceed $1 million in annual revenue, up from 90 in the prior year period. During the first quarter, subscription net retention was 98% and platform net retention was 102%. Current remaining performance obligations (CRPO), which is contracted and committed revenue expected to be recognized over the next 12 months, was $351 million, up 19% 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 second quarter of fiscal 2024, LiveRamp expects to report: Revenue of $152 million, an increase of 3% GAAP operating income of $1 million Non-GAAP operating income of $19 million For fiscal 2024, LiveRamp updates its guidance and expects to report: Revenue of between $620 million and $630 million, an increase of between 4% and 6% GAAP operating income of between $2 million and $5 million Non-GAAP operating income of between $90 million and $93 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, 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; and attracting 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 June 30, $ % 2023 2022 Variance Variance Revenues 154,069 142,243 11,826 8.3 % Cost of revenue 45,621 41,021 4,600 11.2 % Gross profit 108,448 101,222 7,226 7.1 % % Gross margin 70.4 % 71.2 % Operating expenses: Research and development 34,519 47,661 (13,142 ) (27.6 %) Sales and marketing 44,879 51,280 (6,401 ) (12.5 %) General and administrative 26,664 27,144 (480 ) (1.8 %) Gains, losses and other items, net 116 739 (623 ) (84.3 %) Total operating expenses 106,178 126,824 (20,646 ) (16.3 %) Income (loss) from operations 2,270 (25,602 ) 27,872 108.9 % % Margin 1.5 % -18.0 % Total other income, net 4,849 699 4,150 593.7 % Income (loss) from operations before income taxes 7,119 (24,903 ) 32,022 128.6 % Income tax expense 8,705 2,315 6,390 276.0 % Net loss (1,586 ) (27,218 ) 25,632 94.2 % Basic loss per share (0.02 ) (0.40 ) 0.37 94.0 % Diluted loss per share: (0.02 ) (0.40 ) 0.37 94.0 % Basic weighted average shares 66,497 68,403 Diluted weighted average shares 66,497 68,403 LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES RECONCILIATION OF GAAP TO NON-GAAP EPS (1) (Unaudited) (Dollars in thousands, except per share amounts) For the Three Months Ended June 30, 2023 2022 Income (loss) from operations before income taxes 7,119 (24,903 ) Income tax expense 8,705 2,315 Net loss (1,586 ) (27,218 ) Loss per share: Basic (0.02 ) (0.40 ) Diluted (0.02 ) (0.40 ) Excluded items: Purchased intangible asset amortization (cost of revenue) 3,290 4,643 Non-cash stock compensation (cost of revenue and operating expenses) 13,292 24,225 Transformation costs (general and administrative) 1,875 - Restructuring and merger charges (gains, losses, and other) 116 739 Total excluded items 18,573 29,607 Income from operations before income taxes and excluding items 25,692 4,704 Income tax expense (2) 6,167 1,237 Non-GAAP net earnings 19,525 3,467 Non-GAAP earnings per share: Basic 0.29 0.05 Diluted 0.29 0.05 Basic weighted average shares 66,497 68,403 Diluted weighted average shares 67,388 69,195 (1) This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our condensed consolidated financial statements prepared in accordance with GAAP. For a detailed explanation of the adjustments made to comparable GAAP measures, the reasons why management uses these measures and the material limitations on the usefulness of these measures, please see Appendix A. (2) Income taxes were calculated by applying the estimated annual effective tax rate to year-to-date pretax income or loss and adjusting for discrete tax items in the period. The differences between our GAAP and non-GAAP effective tax rates were primarily due to the net tax effects of the excluded items, coupled with larger pre-tax losses for GAAP purposes versus smaller pre-tax losses or income for non-GAAP purposes. LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES RECONCILIATION OF GAAP TO NON-GAAP INCOME (LOSS) FROM OPERATIONS (1) (Unaudited) (Dollars in thousands) For the Three Months Ended June 30, 2023 2022 Income (loss) from operations 2,270 (25,602 ) Excluded items: Purchased intangible asset amortization (cost of revenue) 3,290 4,643 Non-cash stock compensation (cost of revenue and operating expenses) 13,292 24,225 Transformation costs (general and administrative) 1,875 - Restructuring and merger charges (gains, losses, and other) 116 739 Total excluded items 18,573 29,607 Income from operations before excluded items 20,843 4,005 (1) This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our condensed consolidated financial statements prepared in accordance with GAAP. For a detailed explanation of the adjustments made to comparable GAAP measures, the reasons why management uses these measures and the material limitations on the usefulness of these measures, please see Appendix A. LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES RECONCILIATION OF ADJUSTED EBITDA (1) (Unaudited) (Dollars in thousands) For the Three Months Ended June 30, 2023 2022 Net loss (1,586 ) (27,218 ) Income tax expense 8,705 2,315 Other income (4,849 ) (699 ) Income (loss) from operations 2,270 (25,602 ) Depreciation and amortization 4,039 5,741 EBITDA 6,309 (19,861 ) Other adjustments: Non-cash stock compensation (cost of revenue and operating expenses) 13,292 24,225 Transformation costs (general and administrative) 1,875 - Restructuring and merger charges (gains, losses, and other) 116 739 Other adjustments 15,283 24,964 Adjusted EBITDA 21,592 5,103 (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) June 30, March 31, $ % 2023 2023 Variance Variance Assets Current assets: Cash and cash equivalents 470,773 464,448 6,325 1.4 % Short-term investments 33,099 32,807 292 0.9 % Trade accounts receivable, net 173,083 157,379 15,704 10.0 % Refundable income taxes, net - 28,897 (28,897 ) (100.0 %) Other current assets 29,091 31,028 (1,937 ) (6.2 %) Total current assets 706,046 714,559 (8,513 ) (1.2 %) Property and equipment 37,927 39,393 (1,466 ) (3.7 %) Less - accumulated depreciation and amortization 31,872 32,308 (436 ) (1.3 %) Property and equipment, net 6,055 7,085 (1,030 ) (14.5 %) Intangible assets, net 6,578 9,868 (3,290 ) (33.3 %) Goodwill 363,178 363,116 62 0.0 % Deferred commissions, net 36,944 37,030 (86 ) (0.2 %) Other assets, net 45,130 41,045 4,085 10.0 % 1,163,931 1,172,703 (8,772 ) (0.7 %) Liabilities and Stockholders' Equity Current liabilities: Trade accounts payable 74,077 86,568 (12,491 ) (14.4 %) Accrued payroll and related expenses 23,929 33,434 (9,505 ) (28.4 %) Other accrued expenses 39,322 35,736 3,586 10.0 % Deferred revenue 27,267 19,091 8,176 42.8 % Income taxes payable 7,782 - 7,782 n/a Total current liabilities 172,377 174,829 (2,452 ) (1.4 %) Other liabilities 73,023 71,798 1,225 1.7 % Stockholders' equity: Preferred stock - - - n/a Common stock 15,455 15,399 56 0.4 % Additional paid-in capital 1,873,935 1,855,916 18,019 1.0 % Retained earnings 1,300,705 1,302,291 (1,586 ) (0.1 %) Accumulated other comprehensive income 4,565 4,504 61 1.4 % Treasury stock, at cost (2,276,129 ) (2,252,034 ) (24,095 ) 1.1 % Total stockholders' equity 918,531 926,076 (7,545 ) (0.8 %) 1,163,931 1,172,703 (8,772 ) (0.7 %) LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Dollars in thousands) For the Three Months Ended June 30, 2023 2022 Cash flows from operating activities: Net loss (1,586 ) (27,218 ) Non-cash operating activities: Depreciation and amortization 4,039 5,741 Loss (gain) on disposal or impairment of assets 308 (5 ) Provision for doubtful accounts (219 ) 997 Deferred income taxes 47 187 Non-cash stock compensation expense 13,292 24,225 Changes in operating assets and liabilities: Accounts receivable (14,391 ) (7,733 ) Deferred commissions 86 (369 ) Other assets 5,008 4,352 Accounts payable and other liabilities (25,225 ) (34,557 ) Income taxes 37,236 2,131 Deferred revenue 7,098 (1,120 ) Net cash provided by (used in) operating activities 25,693 (33,369 ) Cash flows from investing activities: Capital expenditures (53 ) (1,741 ) Purchases of strategic investments (500 ) - Net cash used in investing activities (553 ) (1,741 ) Cash flows from financing activities: Proceeds related to the issuance of common stock under stock and employee benefit plans 5,573 4,589 Shares repurchased for tax withholdings upon vesting of stock-based awards (3,892 ) (582 ) Acquisition of treasury stock (20,203 ) (60,053 ) Net cash used in financing activities (18,522 ) (56,046 ) Effect of exchange rate changes on cash (293 ) (752 ) Net change in cash and cash equivalents 6,325 (91,908 ) Cash and cash equivalents at beginning of period 464,448 600,162 Cash and cash equivalents at end of period 470,773 508,254 Supplemental cash flow information: Cash paid (received) during the period for: Income taxes related to continuing operations (28,653 ) 4 Operating lease liabilities 2,459 2,156 Operating lease assets obtained in exchange for operating lease liabilities 10,565 - Operating lease assets relinquished in exchange for operating lease liabilities (4,486 ) - Purchases of property, plant, & equipment, net remaining unpaid at end of period - 1,666 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 % $ Revenues 142,243 147,099 158,615 148,626 596,583 154,069 8.3 % 11,826 Cost of revenue 41,021 42,304 43,287 43,472 170,084 45,621 11.2 % 4,600 Gross profit 101,222 104,795 115,328 105,154 426,499 108,448 7.1 % 7,226 % Gross margin 71.2 % 71.2 % 72.7 % 70.8 % 71.5 % 70.4 % Operating expenses Research and development 47,661 46,139 43,175 52,220 189,195 34,519 (27.6 %) (13,142 ) Sales and marketing 51,280 45,949 47,702 57,506 202,437 44,879 (12.5 %) (6,401 ) General and administrative 27,144 28,718 36,657 32,832 125,351 26,664 (1.8 %) (480 ) Gains, losses and other items, net 739 13,111 11,743 9,723 35,316 116 (84.3 %) (623 ) Total operating expenses 126,824 133,917 139,277 152,281 552,299 106,178 (16.3 %) (20,646 ) Income (loss) from operations (25,602 ) (29,122 ) (23,949 ) (47,127 ) (125,800 ) 2,270 108.9 % 27,872 % Margin -18.0 % -19.8 % -15.1 % -31.7 % -21.1 % 1.5 % Total other income (expense), net 699 2,248 (736 ) 4,735 6,946 4,849 593.7 % 4,150 Income (loss) from continuing operations before income taxes (24,903 ) (26,874 ) (24,685 ) (42,392 ) (118,854 ) 7,119 128.6 % 32,022 Income taxes expense (benefit) 2,315 3,562 5,835 (6,460 ) 5,252 8,705 276.0 % 6,390 Net loss from continuing operations (27,218 ) (30,436 ) (30,520 ) (35,932 ) (124,106 ) (1,586 ) 94.2 % 25,632 Earnings from discontinued operations, net of tax - - 836 4,568 5,404 - n/a - Net loss (27,218 ) (30,436 ) (29,684 ) (31,364 ) (118,702 ) (1,586 ) 94.2 % 25,632 Diluted loss per share (0.40 ) (0.45 ) (0.46 ) (0.48 ) (1.79 ) (0.02 ) 94.0 % 0.37 Some earnings (loss) per share amounts may not add due to rounding. Basic shares 68,403 67,096 64,784 65,126 66,352 66,497 Diluted shares 69,195 67,568 65,356 66,268 67,097 67,388 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 Net Cash Provided by (Used in) Operating Activities-Continuing Operations (33,369 ) 21,375 15,770 30,665 34,441 25,693 Less: Capital expenditures (1,741 ) (2,673 ) (179 ) (103 ) (4,696 ) (53 ) Free Cash Flow to Equity (35,110 ) 18,702 15,591 30,562 29,745 25,640 (1) This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our condensed consolidated financial statements prepared in accordance with GAAP. For a detailed explanation of the adjustments made to comparable GAAP measures, the reasons why management uses these measures and the material limitations on the usefulness of these measures, please see Appendix A. LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES RECONCILIATION OF GAAP TO NON-GAAP EXPENSES (1) (Unaudited) (Dollars in thousands) 06/30/22 09/30/22 12/31/22 03/31/23 FY2023 06/30/23 Expenses, continuing operations: Cost of revenue 41,021 42,304 43,287 43,472 170,084 45,621 Research and development 47,661 46,139 43,175 52,220 189,195 34,519 Sales and marketing 51,280 45,949 47,702 57,506 202,437 44,879 General and administrative 27,144 28,718 36,657 32,832 125,351 26,664 Gains, losses and other items, net 739 13,111 11,743.00 9,723 35,316 116 Gross profit, continuing operations: 101,222 104,795 115,328 105,154 426,499 108,448 % Gross margin 71.2 % 71.2 % 72.7 % 70.8 % 71.5 % 70.4 % Excluded items: Purchased intangible asset amortization (cost of revenue) 4,643 4,637 4,209 3,336 16,825 3,290 Non-cash stock compensation (cost of revenue) 1,163 1,293 1,208 2,653 6,317 629 Non-cash stock compensation (research and development) 11,656 12,360 10,654 20,737 55,407 5,077 Non-cash stock compensation (sales and marketing) 5,884 6,116 5,871 11,558 29,429 3,736 Non-cash stock compensation (general and administrative) 5,522 7,524 11,891 9,710 34,647 3,850 Restructuring and merger charges (gains, losses, and other) 739 13,111 11,743 9,723 35,316 116 Transformation costs (general and administrative) - 1,250 4,112 3,663 9,025 1,875 Total excluded items 29,607 46,291 49,688 61,380 186,966 18,573 Expenses, continued operations excluding items: Cost of revenue 35,215 36,374 37,870 37,483 146,942 41,702 Research and development 36,005 33,779 32,521 31,483 133,788 29,442 Sales and marketing 45,396 39,833 41,831 45,948 173,008 41,143 General and administrative 21,622 19,944 20,654 19,459 81,679 20,939 Gains, losses and other items, net - - - - - - Gross profit, continued operations excluding items: 107,028 110,725 120,745 111,143 449,641 112,367 % Gross margin 75.2 % 75.3 % 76.1 % 74.8 % 75.4 % 72.9 % (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 Income (loss) from continuing operations before income taxes (24,903 ) (26,874 ) (24,685 ) (42,392 ) (118,854 ) 7,119 Income taxes (benefit) 2,315 3,562 5,835 (6,460 ) 5,252 8,705 Net earnings (loss) from continuing operations (27,218 ) (30,436 ) (30,520 ) (35,932 ) (124,106 ) (1,586 ) Earnings from discontinued operations, net of tax - - 836 4,568 5,404 - Net earnings (loss) (27,218 ) (30,436 ) (29,684 ) (31,364 ) (118,702 ) (1,586 ) Earnings (loss) per share: Basic (0.40 ) (0.45 ) (0.46 ) (0.48 ) (1.79 ) (0.02 ) Diluted (0.40 ) (0.45 ) (0.46 ) (0.48 ) (1.79 ) (0.02 ) Excluded items: Purchased intangible asset amortization (cost of revenue) 4,643 4,637 4,209 3,336 16,825 3,290 Non-cash stock compensation (cost of revenue and operating expenses) 24,225 27,293 29,624 44,658 125,800 13,292 Restructuring and merger charges (gains, losses, and other) 739 13,111 11,743 9,723 35,316 116 Transformation costs (general and administrative) - 1,250 4,112 3,663 9,025 1,875 Total excluded items from continuing operations 29,607 46,291 49,688 61,380 186,966 18,573 Income from continuing operations before income taxes and excluding items 4,704 19,417 25,003 18,988 68,112 25,692 Income taxes expense (benefit) 1,237 4,557 6,468 (2,141 ) 10,121 6,167 Non-GAAP net earnings from continuing operations 3,467 14,860 18,535 21,129 57,991 19,525 Non-GAAP earnings per share from continuing operations: Basic 0.05 0.22 0.29 0.32 0.87 0.29 Diluted 0.05 0.22 0.28 0.32 0.86 0.29 Basic weighted average shares 68,403 67,096 64,784 65,126 66,352 66,497 Diluted weighted average shares 69,195 67,568 65,356 66,268 67,097 67,388 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 September 30, 2023 March 31, 2024 Low High GAAP income from operations 1,000 2,000 5,000 Excluded items: Purchased intangible asset amortization 1,000 7,000 7,000 Non-cash stock compensation 16,000 72,000 72,000 Restructuring charges 1,000 7,000 7,000 Transformation costs - 2,000 2,000 Total excluded items 18,000 88,000 88,000 Non-GAAP income from operations $ 19,000 $ 90,000 $ 93,000 (1) This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our condensed consolidated financial statements prepared in accordance with GAAP. For a detailed explanation of the adjustments made to comparable GAAP measures, the reasons why management uses these measures, the usefulness of these measures and the material limitations on the usefulness of these measures, please see Appendix A. APPENDIX A LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES Q1 FISCAL 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 leasehold improvement write offs. These items, reported as gains, losses, and other items, net, are excluded from non-GAAP results because such amounts are not used by us to assess the core profitability of our business operations. Transformation costs: In previous years, we incurred significant expenses to separate the financial statements of our operating segments, with particular focus on segment-level balance sheets, and to evaluate portfolio priorities. Our criteria for excluding transformation expenses from our non-GAAP measures is as follows: 1) projects are discrete in nature; 2) excluded expenses consist only of third-party consulting fees that we would not incur otherwise; and 3) we do not exclude employee related expenses or other costs associated with the ongoing operations of our business. We substantially completed those projects during the third quarter of fiscal year 2018. Beginning in the fourth quarter of fiscal 2018, and through most of fiscal 2019, we incurred transaction support expenses and system separation costs related to the Company's announced evaluation of strategic options for its Marketing Solutions (AMS) business. In the first and second quarters of fiscal 2021 in response to the potential COVID-19 pandemic impact on our business 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/20230809407441/en/Contacts LiveRamp Investor Relations Investor.Relations@LiveRamp.com ERAMP
Revenue up 8% year over year GAAP Operating Margin of 1% and Non-GAAP Operating Margin of 14% Operating Cash Flow of $26 million $20 million in Share Repurchases
LiveRamp® (NYSE: RAMP), the leading data collaboration platform, today announced its financial results for the fiscal 2024 first quarter ended June 30, 2023. This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20230809407441/en/ Q1 Financial Highlights1 Total revenue was $154 million, up 8% Subscription revenue was $122 million, up 5%, and accounted for 79% of total revenue. Marketplace & Other revenue was $32 million, up 21%. GAAP gross profit was $108 million, up 7%. GAAP gross margin of 70% contracted by 1 percentage point. Non-GAAP gross profit was $112 million, up 5%. Non-GAAP gross margin of 73% contracted by 2 percentage points. GAAP operating income was $2 million compared to a loss of $26 million. GAAP operating margin was 1% compared to negative 18%. Non-GAAP operating income was $21 million compared to $4 million. Non-GAAP operating margin of 14% expanded by 11 percentage points. GAAP diluted loss per share was $0.02 and non-GAAP diluted earnings per share was $0.29. Net cash provided by operating activities was $26 million compared to a use of $33 million. Operating cash flow benefited from a $29 million tax refund for fiscal 2021. Repurchased approximately 835,000 shares for $20 million in the first quarter. A reconciliation between GAAP and non-GAAP results is provided in the schedules to this press release. "We’re off to a strong start to the fiscal year, with first quarter revenue and operating income exceeding our expectations, operating margin expanding by double-digits and our first quarter ever with positive GAAP operating income,” said LiveRamp CEO Scott Howe. “Our data collaboration platform remains in high demand with the world’s most sophisticated marketers, helping them deliver relevant messages and measure results across all addressable channels, including social networks, the open web, programmatic, retail media networks and connected TV.” ______________ 1Unless otherwise indicated, all comparisons are to the prior year period. GAAP and Non-GAAP Results The following table summarizes the Company’s financial results for the fiscal first quarter ended June 30, 2023 ($ in millions): Q1 Fiscal 2024 Q1 Fiscal 2023 Results Results GAAP Non-GAAP GAAP Non-GAAP Subscription revenue $122 — $116 — YoY change % 5% 20% Marketplace & Other revenue $32 — $27 — YoY change % 21% 18% Total revenue $154 — $142 — YoY change % 8% 19% Gross profit $108 $112 $101 $107 % Gross margin 70% 73% 71% 75% YoY change, pts (1) pt (2) pts — — Operating income (loss) $2 $21 ($26) $4 % Operating margin 1% 14% (18%) 3% YoY change, pts 19 pts 11 pts (3) pts (3) pts Net earnings (loss) ($2) $20 ($27) $3 Diluted earnings (loss) per share ($0.02) $0.29 ($0.40) $0.05 Shares to calculate diluted EPS 66.5 67.4 68.4 69.2 YoY change % (3%) (3%) 0% (1%) Net operating cash flow $26 — ($33) — Free cash flow to equity — $26 — ($35) 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 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, Xander, Amobee, Criteo, Adobe Ad Cloud, and Roku Oneview. To date, over 14,000 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 90% of consumer time spent online in the US. In May 2023 we integrated Google Display & Video 360's PAIR (Publisher Advertiser Identity Reconciliation) into the LiveRamp platform and started running brand campaigns. With PAIR, publishers and marketers can securely and privately reconcile their first-party data for marketing use cases on Display & Video 360, Google's DSP. This step forward unlocks additional scale across inventory already impacted by third-party cookie changes, while also providing a sustainable solution for the future across all channels, including Connected TV. In June 2023 our native applications for identity resolution debuted in the Snowflake Native App Framework. This means LiveRamp customers can seamlessly access our identity resolution and activation capabilities directly in their Snowflake data environment, eliminating the need to move or copy data and, thereby, reducing security and privacy risks. LiveRamp has 915 direct subscription customers, up from 910 in the prior year period. LiveRamp has 96 customers whose subscription contracts exceed $1 million in annual revenue, up from 90 in the prior year period. During the first quarter, subscription net retention was 98% and platform net retention was 102%. Current remaining performance obligations (CRPO), which is contracted and committed revenue expected to be recognized over the next 12 months, was $351 million, up 19% 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 second quarter of fiscal 2024, LiveRamp expects to report: Revenue of $152 million, an increase of 3% GAAP operating income of $1 million Non-GAAP operating income of $19 million For fiscal 2024, LiveRamp updates its guidance and expects to report: Revenue of between $620 million and $630 million, an increase of between 4% and 6% GAAP operating income of between $2 million and $5 million Non-GAAP operating income of between $90 million and $93 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, 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; and attracting 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 June 30, $ % 2023 2022 Variance Variance Revenues 154,069 142,243 11,826 8.3 % Cost of revenue 45,621 41,021 4,600 11.2 % Gross profit 108,448 101,222 7,226 7.1 % % Gross margin 70.4 % 71.2 % Operating expenses: Research and development 34,519 47,661 (13,142 ) (27.6 %) Sales and marketing 44,879 51,280 (6,401 ) (12.5 %) General and administrative 26,664 27,144 (480 ) (1.8 %) Gains, losses and other items, net 116 739 (623 ) (84.3 %) Total operating expenses 106,178 126,824 (20,646 ) (16.3 %) Income (loss) from operations 2,270 (25,602 ) 27,872 108.9 % % Margin 1.5 % -18.0 % Total other income, net 4,849 699 4,150 593.7 % Income (loss) from operations before income taxes 7,119 (24,903 ) 32,022 128.6 % Income tax expense 8,705 2,315 6,390 276.0 % Net loss (1,586 ) (27,218 ) 25,632 94.2 % Basic loss per share (0.02 ) (0.40 ) 0.37 94.0 % Diluted loss per share: (0.02 ) (0.40 ) 0.37 94.0 % Basic weighted average shares 66,497 68,403 Diluted weighted average shares 66,497 68,403 LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES RECONCILIATION OF GAAP TO NON-GAAP EPS (1) (Unaudited) (Dollars in thousands, except per share amounts) For the Three Months Ended June 30, 2023 2022 Income (loss) from operations before income taxes 7,119 (24,903 ) Income tax expense 8,705 2,315 Net loss (1,586 ) (27,218 ) Loss per share: Basic (0.02 ) (0.40 ) Diluted (0.02 ) (0.40 ) Excluded items: Purchased intangible asset amortization (cost of revenue) 3,290 4,643 Non-cash stock compensation (cost of revenue and operating expenses) 13,292 24,225 Transformation costs (general and administrative) 1,875 - Restructuring and merger charges (gains, losses, and other) 116 739 Total excluded items 18,573 29,607 Income from operations before income taxes and excluding items 25,692 4,704 Income tax expense (2) 6,167 1,237 Non-GAAP net earnings 19,525 3,467 Non-GAAP earnings per share: Basic 0.29 0.05 Diluted 0.29 0.05 Basic weighted average shares 66,497 68,403 Diluted weighted average shares 67,388 69,195 (1) This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our condensed consolidated financial statements prepared in accordance with GAAP. For a detailed explanation of the adjustments made to comparable GAAP measures, the reasons why management uses these measures and the material limitations on the usefulness of these measures, please see Appendix A. (2) Income taxes were calculated by applying the estimated annual effective tax rate to year-to-date pretax income or loss and adjusting for discrete tax items in the period. The differences between our GAAP and non-GAAP effective tax rates were primarily due to the net tax effects of the excluded items, coupled with larger pre-tax losses for GAAP purposes versus smaller pre-tax losses or income for non-GAAP purposes. LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES RECONCILIATION OF GAAP TO NON-GAAP INCOME (LOSS) FROM OPERATIONS (1) (Unaudited) (Dollars in thousands) For the Three Months Ended June 30, 2023 2022 Income (loss) from operations 2,270 (25,602 ) Excluded items: Purchased intangible asset amortization (cost of revenue) 3,290 4,643 Non-cash stock compensation (cost of revenue and operating expenses) 13,292 24,225 Transformation costs (general and administrative) 1,875 - Restructuring and merger charges (gains, losses, and other) 116 739 Total excluded items 18,573 29,607 Income from operations before excluded items 20,843 4,005 (1) This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our condensed consolidated financial statements prepared in accordance with GAAP. For a detailed explanation of the adjustments made to comparable GAAP measures, the reasons why management uses these measures and the material limitations on the usefulness of these measures, please see Appendix A. LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES RECONCILIATION OF ADJUSTED EBITDA (1) (Unaudited) (Dollars in thousands) For the Three Months Ended June 30, 2023 2022 Net loss (1,586 ) (27,218 ) Income tax expense 8,705 2,315 Other income (4,849 ) (699 ) Income (loss) from operations 2,270 (25,602 ) Depreciation and amortization 4,039 5,741 EBITDA 6,309 (19,861 ) Other adjustments: Non-cash stock compensation (cost of revenue and operating expenses) 13,292 24,225 Transformation costs (general and administrative) 1,875 - Restructuring and merger charges (gains, losses, and other) 116 739 Other adjustments 15,283 24,964 Adjusted EBITDA 21,592 5,103 (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) June 30, March 31, $ % 2023 2023 Variance Variance Assets Current assets: Cash and cash equivalents 470,773 464,448 6,325 1.4 % Short-term investments 33,099 32,807 292 0.9 % Trade accounts receivable, net 173,083 157,379 15,704 10.0 % Refundable income taxes, net - 28,897 (28,897 ) (100.0 %) Other current assets 29,091 31,028 (1,937 ) (6.2 %) Total current assets 706,046 714,559 (8,513 ) (1.2 %) Property and equipment 37,927 39,393 (1,466 ) (3.7 %) Less - accumulated depreciation and amortization 31,872 32,308 (436 ) (1.3 %) Property and equipment, net 6,055 7,085 (1,030 ) (14.5 %) Intangible assets, net 6,578 9,868 (3,290 ) (33.3 %) Goodwill 363,178 363,116 62 0.0 % Deferred commissions, net 36,944 37,030 (86 ) (0.2 %) Other assets, net 45,130 41,045 4,085 10.0 % 1,163,931 1,172,703 (8,772 ) (0.7 %) Liabilities and Stockholders' Equity Current liabilities: Trade accounts payable 74,077 86,568 (12,491 ) (14.4 %) Accrued payroll and related expenses 23,929 33,434 (9,505 ) (28.4 %) Other accrued expenses 39,322 35,736 3,586 10.0 % Deferred revenue 27,267 19,091 8,176 42.8 % Income taxes payable 7,782 - 7,782 n/a Total current liabilities 172,377 174,829 (2,452 ) (1.4 %) Other liabilities 73,023 71,798 1,225 1.7 % Stockholders' equity: Preferred stock - - - n/a Common stock 15,455 15,399 56 0.4 % Additional paid-in capital 1,873,935 1,855,916 18,019 1.0 % Retained earnings 1,300,705 1,302,291 (1,586 ) (0.1 %) Accumulated other comprehensive income 4,565 4,504 61 1.4 % Treasury stock, at cost (2,276,129 ) (2,252,034 ) (24,095 ) 1.1 % Total stockholders' equity 918,531 926,076 (7,545 ) (0.8 %) 1,163,931 1,172,703 (8,772 ) (0.7 %) LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Dollars in thousands) For the Three Months Ended June 30, 2023 2022 Cash flows from operating activities: Net loss (1,586 ) (27,218 ) Non-cash operating activities: Depreciation and amortization 4,039 5,741 Loss (gain) on disposal or impairment of assets 308 (5 ) Provision for doubtful accounts (219 ) 997 Deferred income taxes 47 187 Non-cash stock compensation expense 13,292 24,225 Changes in operating assets and liabilities: Accounts receivable (14,391 ) (7,733 ) Deferred commissions 86 (369 ) Other assets 5,008 4,352 Accounts payable and other liabilities (25,225 ) (34,557 ) Income taxes 37,236 2,131 Deferred revenue 7,098 (1,120 ) Net cash provided by (used in) operating activities 25,693 (33,369 ) Cash flows from investing activities: Capital expenditures (53 ) (1,741 ) Purchases of strategic investments (500 ) - Net cash used in investing activities (553 ) (1,741 ) Cash flows from financing activities: Proceeds related to the issuance of common stock under stock and employee benefit plans 5,573 4,589 Shares repurchased for tax withholdings upon vesting of stock-based awards (3,892 ) (582 ) Acquisition of treasury stock (20,203 ) (60,053 ) Net cash used in financing activities (18,522 ) (56,046 ) Effect of exchange rate changes on cash (293 ) (752 ) Net change in cash and cash equivalents 6,325 (91,908 ) Cash and cash equivalents at beginning of period 464,448 600,162 Cash and cash equivalents at end of period 470,773 508,254 Supplemental cash flow information: Cash paid (received) during the period for: Income taxes related to continuing operations (28,653 ) 4 Operating lease liabilities 2,459 2,156 Operating lease assets obtained in exchange for operating lease liabilities 10,565 - Operating lease assets relinquished in exchange for operating lease liabilities (4,486 ) - Purchases of property, plant, & equipment, net remaining unpaid at end of period - 1,666 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 % $ Revenues 142,243 147,099 158,615 148,626 596,583 154,069 8.3 % 11,826 Cost of revenue 41,021 42,304 43,287 43,472 170,084 45,621 11.2 % 4,600 Gross profit 101,222 104,795 115,328 105,154 426,499 108,448 7.1 % 7,226 % Gross margin 71.2 % 71.2 % 72.7 % 70.8 % 71.5 % 70.4 % Operating expenses Research and development 47,661 46,139 43,175 52,220 189,195 34,519 (27.6 %) (13,142 ) Sales and marketing 51,280 45,949 47,702 57,506 202,437 44,879 (12.5 %) (6,401 ) General and administrative 27,144 28,718 36,657 32,832 125,351 26,664 (1.8 %) (480 ) Gains, losses and other items, net 739 13,111 11,743 9,723 35,316 116 (84.3 %) (623 ) Total operating expenses 126,824 133,917 139,277 152,281 552,299 106,178 (16.3 %) (20,646 ) Income (loss) from operations (25,602 ) (29,122 ) (23,949 ) (47,127 ) (125,800 ) 2,270 108.9 % 27,872 % Margin -18.0 % -19.8 % -15.1 % -31.7 % -21.1 % 1.5 % Total other income (expense), net 699 2,248 (736 ) 4,735 6,946 4,849 593.7 % 4,150 Income (loss) from continuing operations before income taxes (24,903 ) (26,874 ) (24,685 ) (42,392 ) (118,854 ) 7,119 128.6 % 32,022 Income taxes expense (benefit) 2,315 3,562 5,835 (6,460 ) 5,252 8,705 276.0 % 6,390 Net loss from continuing operations (27,218 ) (30,436 ) (30,520 ) (35,932 ) (124,106 ) (1,586 ) 94.2 % 25,632 Earnings from discontinued operations, net of tax - - 836 4,568 5,404 - n/a - Net loss (27,218 ) (30,436 ) (29,684 ) (31,364 ) (118,702 ) (1,586 ) 94.2 % 25,632 Diluted loss per share (0.40 ) (0.45 ) (0.46 ) (0.48 ) (1.79 ) (0.02 ) 94.0 % 0.37 Some earnings (loss) per share amounts may not add due to rounding. Basic shares 68,403 67,096 64,784 65,126 66,352 66,497 Diluted shares 69,195 67,568 65,356 66,268 67,097 67,388 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 Net Cash Provided by (Used in) Operating Activities-Continuing Operations (33,369 ) 21,375 15,770 30,665 34,441 25,693 Less: Capital expenditures (1,741 ) (2,673 ) (179 ) (103 ) (4,696 ) (53 ) Free Cash Flow to Equity (35,110 ) 18,702 15,591 30,562 29,745 25,640 (1) This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our condensed consolidated financial statements prepared in accordance with GAAP. For a detailed explanation of the adjustments made to comparable GAAP measures, the reasons why management uses these measures and the material limitations on the usefulness of these measures, please see Appendix A. LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES RECONCILIATION OF GAAP TO NON-GAAP EXPENSES (1) (Unaudited) (Dollars in thousands) 06/30/22 09/30/22 12/31/22 03/31/23 FY2023 06/30/23 Expenses, continuing operations: Cost of revenue 41,021 42,304 43,287 43,472 170,084 45,621 Research and development 47,661 46,139 43,175 52,220 189,195 34,519 Sales and marketing 51,280 45,949 47,702 57,506 202,437 44,879 General and administrative 27,144 28,718 36,657 32,832 125,351 26,664 Gains, losses and other items, net 739 13,111 11,743.00 9,723 35,316 116 Gross profit, continuing operations: 101,222 104,795 115,328 105,154 426,499 108,448 % Gross margin 71.2 % 71.2 % 72.7 % 70.8 % 71.5 % 70.4 % Excluded items: Purchased intangible asset amortization (cost of revenue) 4,643 4,637 4,209 3,336 16,825 3,290 Non-cash stock compensation (cost of revenue) 1,163 1,293 1,208 2,653 6,317 629 Non-cash stock compensation (research and development) 11,656 12,360 10,654 20,737 55,407 5,077 Non-cash stock compensation (sales and marketing) 5,884 6,116 5,871 11,558 29,429 3,736 Non-cash stock compensation (general and administrative) 5,522 7,524 11,891 9,710 34,647 3,850 Restructuring and merger charges (gains, losses, and other) 739 13,111 11,743 9,723 35,316 116 Transformation costs (general and administrative) - 1,250 4,112 3,663 9,025 1,875 Total excluded items 29,607 46,291 49,688 61,380 186,966 18,573 Expenses, continued operations excluding items: Cost of revenue 35,215 36,374 37,870 37,483 146,942 41,702 Research and development 36,005 33,779 32,521 31,483 133,788 29,442 Sales and marketing 45,396 39,833 41,831 45,948 173,008 41,143 General and administrative 21,622 19,944 20,654 19,459 81,679 20,939 Gains, losses and other items, net - - - - - - Gross profit, continued operations excluding items: 107,028 110,725 120,745 111,143 449,641 112,367 % Gross margin 75.2 % 75.3 % 76.1 % 74.8 % 75.4 % 72.9 % (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 Income (loss) from continuing operations before income taxes (24,903 ) (26,874 ) (24,685 ) (42,392 ) (118,854 ) 7,119 Income taxes (benefit) 2,315 3,562 5,835 (6,460 ) 5,252 8,705 Net earnings (loss) from continuing operations (27,218 ) (30,436 ) (30,520 ) (35,932 ) (124,106 ) (1,586 ) Earnings from discontinued operations, net of tax - - 836 4,568 5,404 - Net earnings (loss) (27,218 ) (30,436 ) (29,684 ) (31,364 ) (118,702 ) (1,586 ) Earnings (loss) per share: Basic (0.40 ) (0.45 ) (0.46 ) (0.48 ) (1.79 ) (0.02 ) Diluted (0.40 ) (0.45 ) (0.46 ) (0.48 ) (1.79 ) (0.02 ) Excluded items: Purchased intangible asset amortization (cost of revenue) 4,643 4,637 4,209 3,336 16,825 3,290 Non-cash stock compensation (cost of revenue and operating expenses) 24,225 27,293 29,624 44,658 125,800 13,292 Restructuring and merger charges (gains, losses, and other) 739 13,111 11,743 9,723 35,316 116 Transformation costs (general and administrative) - 1,250 4,112 3,663 9,025 1,875 Total excluded items from continuing operations 29,607 46,291 49,688 61,380 186,966 18,573 Income from continuing operations before income taxes and excluding items 4,704 19,417 25,003 18,988 68,112 25,692 Income taxes expense (benefit) 1,237 4,557 6,468 (2,141 ) 10,121 6,167 Non-GAAP net earnings from continuing operations 3,467 14,860 18,535 21,129 57,991 19,525 Non-GAAP earnings per share from continuing operations: Basic 0.05 0.22 0.29 0.32 0.87 0.29 Diluted 0.05 0.22 0.28 0.32 0.86 0.29 Basic weighted average shares 68,403 67,096 64,784 65,126 66,352 66,497 Diluted weighted average shares 69,195 67,568 65,356 66,268 67,097 67,388 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 September 30, 2023 March 31, 2024 Low High GAAP income from operations 1,000 2,000 5,000 Excluded items: Purchased intangible asset amortization 1,000 7,000 7,000 Non-cash stock compensation 16,000 72,000 72,000 Restructuring charges 1,000 7,000 7,000 Transformation costs - 2,000 2,000 Total excluded items 18,000 88,000 88,000 Non-GAAP income from operations $ 19,000 $ 90,000 $ 93,000 (1) This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our condensed consolidated financial statements prepared in accordance with GAAP. For a detailed explanation of the adjustments made to comparable GAAP measures, the reasons why management uses these measures, the usefulness of these measures and the material limitations on the usefulness of these measures, please see Appendix A. APPENDIX A LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES Q1 FISCAL 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 leasehold improvement write offs. These items, reported as gains, losses, and other items, net, are excluded from non-GAAP results because such amounts are not used by us to assess the core profitability of our business operations. Transformation costs: In previous years, we incurred significant expenses to separate the financial statements of our operating segments, with particular focus on segment-level balance sheets, and to evaluate portfolio priorities. Our criteria for excluding transformation expenses from our non-GAAP measures is as follows: 1) projects are discrete in nature; 2) excluded expenses consist only of third-party consulting fees that we would not incur otherwise; and 3) we do not exclude employee related expenses or other costs associated with the ongoing operations of our business. We substantially completed those projects during the third quarter of fiscal year 2018. Beginning in the fourth quarter of fiscal 2018, and through most of fiscal 2019, we incurred transaction support expenses and system separation costs related to the Company's announced evaluation of strategic options for its Marketing Solutions (AMS) business. In the first and second quarters of fiscal 2021 in response to the potential COVID-19 pandemic impact on our business 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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