LIVERAMP ANNOUNCES STRONG SECOND QUARTER RESULTS AND RAISES FULL YEAR OUTLOOK
Total Revenue Up 22% and Subscription Revenue Up 23%
GAAP Gross Margin of 72% and Non-GAAP Gross Margin of 77%
Record Operating Performance
Eighty $1 Million Customers – Largest Sequential Increase
SAN FRANCISCO, Calif., November 2, 2021—LiveRamp® (NYSE: RAMP), the leading global data connectivity platform, today announced its financial results for the quarter ended September 30, 2021.
Second Quarter Financial Highlights
•Total revenue was $127 million, up 22% compared to the prior year period.
•Subscription revenue was $105 million, up 23% compared to the prior year period and contributed 83% of total revenue.
•Marketplace & Other revenue was $22 million, up 16% compared to the prior year period.
•GAAP gross profit was $92 million, up 32% compared to the prior year period. GAAP gross margin of 72% expanded 6 percentage points. Non-GAAP gross profit was $98 million, up 30% compared to the prior year period. Non-GAAP gross margin of 77% expanded 5 percentage points.
•GAAP operating loss was $6 million compared to a GAAP operating loss of $27 million in the prior year period. Non-GAAP operating income was $18 million compared to a non-GAAP operating income of $1 million in the prior year period.
•GAAP loss per share were $0.09, and non-GAAP earnings per share were $0.26.
•Net cash provided by operating activities was $11 million compared to $6 million in the prior year period.
•During the quarter, LiveRamp repurchased approximately 365 thousand shares for $15 million under the current share repurchase program. Since inception of the share repurchase program in August 2011, the Company has returned approximately $1.2 billion in capital to shareholders.
A reconciliation between GAAP and non-GAAP results is provided in the schedules to this press release.
“LiveRamp is making it safe and easy for companies to use their data, and many of the world’s most successful companies are embracing LiveRamp,” said LiveRamp CEO Scott Howe. “You can see this in our results: top line growth accelerated, innovative new products such as Safe HavenⓇ gained even greater adoption, and LiveRamp is well positioned for the future.”
“Q2 was another great quarter,” added LiveRamp President and CFO Warren Jenson. “Revenue growth accelerated, gross margin expanded, and we delivered a record operating performance. This is our sixth consecutive quarter of non-GAAP profitability. Given the strength of our performance, we are raising our top and bottom line guidance for the year.”
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GAAP and Non-GAAP Results
The following table summarizes the Company’s financial results for its first fiscal quarter ($ in millions):
Q2 Fiscal 2022
Q2 Fiscal 2021
Results
Results
GAAP
Non-GAAP
GAAP
Non-GAAP
Subscription revenue
$
105
—
$
86
—
YoY change %
23
%
19
%
Marketplace & other revenue
$
22
—
$
19
—
YoY change %
16
%
4
%
Total revenue
$
127
—
$
105
—
YoY change %
22
%
16
%
Gross profit
$
92
$
98
$
70
$
75
% Gross margin
72
%
77
%
67
%
72
%
YoY change, pts
6pts
5pts
13pts
9pts
Operating income (loss)
$
(6)
$
18
$
(27)
$
1
% Operating margin
(5)
%
14
%
(26)
%
1
%
YoY change, pts
21pts
13pts
30pts
23pts
Net income (loss)
$
(6)
$
18
$
(24)
$
2
Earnings (loss) per share
$
(0.09)
$
0.26
$
(0.36)
$
0.03
Shares to Calculate EPS
68.0
69.3
66.0
68.8
YoY change %
3
%
1
%
(2)
%
2
%
Net operating cash flow
$
11
—
$
6
—
Free cash flow to equity
—
$
10
—
$
6
Totals may not sum due to rounding.
A detailed discussion of our non-GAAP financial measures and a reconciliation between GAAP and non-GAAP results is provided in the schedules to this press release.
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Additional Business Highlights & Metrics
•The Authenticated Traffic Solution (ATS), continues to experience strong global adoption. There are currently more than 55 supply-side platforms (SSPs) and 70 demand-side platforms (DSPs) live or committed to bid on RampID™ and ATS, including The Trade Desk, Amobee, Criteo, dataxu, and MediaMath. Lastly, more than 500 publishers, representing more than 8,000 publisher domains, are deployed with ATS.
•LiveRamp launched its enhanced TV platform with support from Innovid, E.W. Scripps Company, Publica, Philo, Plex, Univision and Dish. New capabilities enable marketers, programmers, and sell-side CTV platforms to more easily and effectively collaborate, activate, and quantify media campaigns in a coordinated way across all TV inventory: linear, streaming, and digital video.
•LiveRamp added 15 net new direct subscription customers in the second quarter. Customer count at quarter end was 870, up from 795 a year ago.
•LiveRamp has 80 customers whose subscription contracts exceed $1 million in annual revenue, up 29% compared to the prior year period. This represents LiveRamp’s largest sequential increase in $1 million customers.
•During the second quarter, subscription net retention was 108% and platform net retention was 109%.
•Current remaining performance obligations (CRPO), which is contracted and committed revenue expected to be recognized over the next 12 months, was $266 million, up 23% compared to the prior year period.
Financial Outlook
LiveRamp’s non-GAAP guidance excludes the impact of non-cash stock compensation, purchased intangible asset amortization, and restructuring charges.
For the third quarter of fiscal 2022, LiveRamp expects to report:
•Revenue of approximately $139 million, an increase of 16% year-over-year
•GAAP operating loss of approximately $20 million
•Non-GAAP operating income of approximately $10 million
For fiscal 2022, LiveRamp has increased its outlook and now expects to report:
•Revenue of approximately $525 million, an increase of 19% year-over-year
•GAAP operating loss of approximately $70 million
•Non-GAAP operating income of approximately $40 million
Conference Call
LiveRamp will hold a conference call at 1:30 p.m. PT today to further discuss this information. Interested parties are invited to listen to the call which will be broadcast via the Internet and can be found on LiveRamp’s investor site. A slide presentation will be referenced during the call and can be accessed here.
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About LiveRamp
LiveRamp is the leading data connectivity platform for the safe and effective use of data. Powered by core identity capabilities and an unparalleled network, LiveRamp enables companies and their partners to better connect, control, and activate data to transform customer experiences and generate more valuable business outcomes. LiveRamp’s fully interoperable and neutral infrastructure delivers end-to-end addressability for the world’s top brands, agencies, and publishers. For more information, visit www.LiveRamp.com.
Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, as amended (the “PSLRA”). These statements, which are not statements of historical fact, may contain estimates, assumptions, projections and/or expectations regarding the Company’s financial position, results of operations, market position, product development, growth opportunities, economic conditions, and other similar forecasts and statements of expectation. Forward-looking statements are often identified by words or phrases such as “anticipate,” “estimate,” “plan,” “expect,” “believe,” “intend,” “foresee,” or the negative of these terms or other similar variations thereof.
These forward-looking statements are not guarantees of future performance and are subject to a number of factors and uncertainties that could cause the Company’s actual results and experiences to differ materially from the anticipated results and expectations expressed in the forward-looking statements.
Among the factors that may cause actual results and expectations to differ from anticipated results and expectations expressed in forward-looking statements are uncertainties related to COVID-19 and the associated impact on our suppliers, customers and partners; the Company’s dependence upon customer renewals; new customer additions and upsell within our subscription business; our reliance upon partners, including data suppliers; competition; and attracting and retaining talent. Additional risks relate to maintaining our culture and our ability to innovate and evolve while working remotely and within a rapidly changing industry, while also avoiding disruption from acquisition and divestiture activities. Our international operations are also subject to risks that may harm the Company’s business. The risk of a significant breach of the confidentiality of the information or the security of our or our customers’, suppliers’, or other partners’ computer systems could be detrimental to our business, reputation and results of operations. Other business risks include unfavorable publicity and negative public perception about our industry; interruptions or delays in service from data center hosting vendors we rely upon; and our dependence on the continued availability of third-party data hosting and transmission services. Our clients’ ability to use data on our platform could be restricted if the industry’s use of third-party cookies and tracking technology declines due to technology platform changes, regulation or increased user controls. Changes in regulations relating to information collection and use represents a risk, as well as changes in tax laws and regulations that are applied to our customers which could cause enterprise software budget tightening. In addition, third parties may claim that we are infringing their intellectual property or may infringe our intellectual property which could result in competitive injury and / or the incurrence of significant costs and draining of our resources.
For a discussion of these and other risks and uncertainties, please refer to LiveRamp’s Annual Report on Form 10-K for our fiscal year 2021 ended March 31, 2021, and LiveRamp's Quarterly Reports on Form 10-Q issued in fiscal year 2022.
The financial information set forth in this press release reflects estimates based on information available at this time.
LiveRamp assumes no obligation and does not currently intend to update these forward-looking statements.
To automatically receive LiveRamp financial news by email, please visit www.LiveRamp.com and subscribe to email alerts.
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For more information, contact:
LiveRamp Investor Relations
Investor.Relations@LiveRamp.com
ERAMP
LiveRampⓇ, RampIDTM, AbilitecⓇ, Safe HavenⓇ and all other LiveRamp marks contained herein are trademarks or service marks of LiveRamp, Inc. All other marks are the property of their respective owners.
P 5
LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except per share amounts)
For the three months ended September 30,
$
%
2021
2020
Variance
Variance
Revenues
$
127,290
$
104,661
$
22,629
21.6
%
Cost of revenue
35,079
34,897
182
0.5
%
Gross profit
92,211
69,764
22,447
32.2
%
% Gross margin
72.4
%
66.7
%
Operating expenses:
Research and development
35,788
31,035
4,753
15.3
%
Sales and marketing
39,509
41,705
(2,196)
(5.3)
%
General and administrative
23,078
24,495
(1,417)
(5.8)
%
Gains, losses and other items, net
18
(619)
637
102.9
%
Total operating expenses
98,393
96,616
1,777
1.8
%
Loss from operations
(6,182)
(26,852)
20,670
77.0
%
% Margin
(4.9)
%
(25.7)
%
Total other income (expense), net
150
(225)
375
166.7
%
Income (loss) from operations before income taxes
(6,032)
(27,077)
21,045
77.7
%
Income tax expense (benefit)
399
(3,109)
3,508
112.8
%
Net earnings (loss)
$
(6,431)
$
(23,968)
$
17,537
73.2
%
Basic earnings (loss) per share
$
(0.09)
$
(0.36)
$
0.27
74.0
%
Diluted earnings (loss) per share
$
(0.09)
$
(0.36)
$
0.27
74.0
%
Basic weighted average shares
68,042
66,010
Diluted weighted average shares
68,042
66,010
P 6
LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except per share amounts)
For the six months ended September 30,
$
%
2021
2020
Variance
Variance
Revenues
$
246,328
$
204,098
$
42,230
20.7
%
Cost of revenue
69,394
69,362
32
—
%
Gross profit
176,934
134,736
42,198
31.3
%
% Gross margin
71.8
%
66.0
%
Operating expenses:
Research and development
70,564
58,024
12,540
21.6
%
Sales and marketing
81,488
80,332
1,156
1.4
%
General and administrative
47,369
47,863
(494)
(1.0)
%
Gains, losses and other items, net
1,296
1,376
(80)
(5.8)
%
Total operating expenses
200,717
187,595
13,122
7.0
%
Loss from operations
(23,783)
(52,859)
29,076
55.0
%
% Margin
(9.7)
%
(25.9)
%
Total other income (expense)
30,751
238
30,513
12,820.6
%
Loss from continuing operations before income taxes
6,968
(52,621)
59,589
113.2
%
Income tax benefit
(3,966)
(6,925)
2,959
42.7
%
Net earnings (loss)
$
10,934
$
(45,696)
$
56,630
123.9
%
Basic earnings (loss) per share
$
0.16
$
(0.69)
$
0.85
123.1
%
Diluted earnings (loss) per share
$
0.16
$
(0.69)
$
0.85
122.7
%
Basic weighted average shares
68,185
65,790
Diluted weighted average shares
69,473
65,790
P 7
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 September 30,
For the six months ended September 30,
2021
2020
2021
2020
Income (loss) from operations before income taxes
$
(6,032)
$
(27,077)
$
6,968
$
(52,621)
Income tax expense (benefit)
399
(3,109)
(3,966)
(6,925)
Net earnings (loss)
$
(6,431)
$
(23,968)
$
10,934
$
(45,696)
Earnings (loss) per share:
Basic
$
(0.09)
$
(0.36)
$
0.16
$
(0.69)
Diluted
$
(0.09)
$
(0.36)
$
0.16
$
(0.69)
Excluded items:
Purchased intangible asset amortization (cost of revenue)
$
4,612
$
4,350
$
9,257
$
9,656
Non-cash stock compensation (cost of revenue and operating expenses)
19,221
24,204
37,717
40,689
Restructuring and merger charges (gains, losses, and other)
18
(619)
1,296
1,376
Transformation costs (general and administrative)
—
258
—
3,863
Gain on retained profits interest (other income)
—
—
(30,052)
—
Total excluded items
23,851
28,193
18,218
55,584
Income from operations before income taxes and excluding items
17,819
1,116
25,186
2,963
Income taxes (2)
(12)
(1,291)
853
(357)
Non-GAAP net earnings
$
17,831
$
2,407
$
24,333
$
3,320
Non-GAAP earnings per share:
Basic
$
0.26
$
0.04
$
0.36
$
0.05
Diluted
$
0.26
$
0.03
$
0.35
$
0.05
Basic weighted average shares
68,042
66,010
68,185
65,790
Diluted weighted average shares
69,333
68,804
69,473
68,071
(1) This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our condensed consolidated financial statements prepared in accordance with GAAP. For a detailed explanation of the adjustments made to comparable GAAP measures, the reasons why management uses these measures and the material limitations on the usefulness of these measures, please see Appendix A.
(2) Income taxes were calculated by applying the estimated annual effective tax rate to year-to-date pretax income or loss and adjusting for discrete tax items in the period. The differences between our GAAP and non-GAAP effective tax rates were primarily due to the net tax effects of the excluded items, coupled with larger pre-tax losses for GAAP purposes versus smaller pre-tax losses or income for non-GAAP purposes.
P 8
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 September 30,
For the six months ended September 30,
2021
2020
2021
2020
Loss from operations
$
(6,182)
$
(26,852)
$
(23,783)
$
(52,859)
Excluded items:
Purchased intangible asset amortization (cost of revenue)
4,612
4,350
9,257
9,656
Non-cash stock compensation (cost of revenue and operating expenses)
19,221
24,204
37,717
40,689
Restructuring and merger charges (gains, losses, and other)
18
(619)
1,296
1,376
Transformation costs (general and administrative)
—
258
—
3,863
Total excluded items
23,851
28,193
48,270
55,584
Income from operations before excluded items
$
17,669
$
1,341
$
24,487
$
2,725
(1) This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our condensed consolidated financial statements prepared in accordance with GAAP. For a detailed explanation of the adjustments made to comparable GAAP measures, the reasons why management uses these measures and the material limitations on the usefulness of these measures, please see Appendix A.
P 9
LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
RECONCILIATION OF ADJUSTED EBITDA (1)
(Unaudited)
(Dollars in thousands)
For the three months ended September 30,
For the six months ended September 30,
2021
2020
2021
2020
Net earnings (loss)
$
(6,431)
$
(23,968)
$
10,934
$
(45,696)
Income tax expense (benefit)
399
(3,109)
(3,966)
(6,925)
Total other income (expense), net
(150)
225
(30,751)
(238)
Loss from operations
(6,182)
(26,852)
(23,783)
(52,859)
Depreciation and amortization
5,819
6,901
12,404
14,955
EBITDA
$
(363)
$
(19,951)
$
(11,379)
$
(37,904)
Other adjustments:
Non-cash stock compensation (cost of revenue and operating expenses)
19,221
24,204
37,717
40,689
Restructuring and merger charges (gains, losses, and other)
18
(619)
1,296
1,376
Transformation costs (general and administrative)
—
258
—
3,863
Other adjustments
19,239
23,843
39,013
45,928
Adjusted EBITDA
$
18,876
$
3,892
$
27,634
$
8,024
(1) This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. For a detailed explanation of the adjustments made to comparable GAAP measures, the reasons why management uses these measures, the usefulness of these measures and the material limitations on the usefulness of these measures, please see Appendix A.
P 10
LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
September 30,
March 31,
$
%
2021
2021
Variance
Variance
Assets
Current assets:
Cash and cash equivalents
$
535,590
$
572,787
$
(37,197)
(6.5)
%
Restricted cash
8,731
8,900
(169)
(1.9)
%
Trade accounts receivable, net
130,948
114,284
16,664
14.6
%
Refundable income taxes
64,079
65,692
(1,613)
(2.5)
%
Other current assets
35,246
64,052
(28,806)
(45.0)
%
Total current assets
774,594
825,715
(51,121)
(6.2)
%
Property and equipment
45,214
44,284
930
2.1
%
Less - accumulated depreciation and amortization
34,916
32,327
2,589
8.0
%
Property and equipment, net
10,298
11,957
(1,659)
(13.9)
%
Intangible assets, net
33,970
39,730
(5,760)
(14.5)
%
Goodwill
363,895
357,446
6,449
1.8
%
Deferred commissions, net
27,988
22,619
5,369
23.7
%
Other assets, net
71,627
30,854
40,773
132.1
%
$
1,282,372
$
1,288,321
$
(5,949)
(0.5)
%
Liabilities and Stockholders' Equity
Current liabilities:
Trade accounts payable
$
44,267
$
39,955
$
4,312
10.8
%
Accrued payroll and related expenses
24,427
46,438
(22,011)
(47.4)
%
Other accrued expenses
47,766
58,353
(10,587)
(18.1)
%
Acquisition escrow payable
8,731
8,900
(169)
(1.9)
%
Deferred revenue
11,058
11,603
(545)
(4.7)
%
Total current liabilities
136,249
165,249
(29,000)
(17.5)
%
Other liabilities
73,176
42,389
30,787
72.6
%
Stockholders' equity:
Preferred stock
—
—
—
—
%
Common stock
14,887
14,781
106
0.7
%
Additional paid-in capital
1,669,461
1,630,072
39,389
2.4
%
Retained earnings
1,465,760
1,454,826
10,934
0.8
%
Accumulated other comprehensive income
5,976
7,522
(1,546)
(20.6)
%
Treasury stock, at cost
(2,083,137)
(2,026,518)
(56,619)
2.8
%
Total stockholders' equity
1,072,947
1,080,683
(7,736)
(0.7)
%
$
1,282,372
$
1,288,321
$
(5,949)
(0.5)
%
P 11
LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
For the three months ended September 30,
2021
2020
Cash flows from operating activities:
Net loss
(6,431)
(23,968)
Earnings from discontinued operations
—
—
Non-cash operating activities:
Depreciation and amortization
5,819
6,901
Loss on disposal or impairment of assets
29
331
Provision for doubtful accounts
327
1,192
Deferred income taxes
141
187
Non-cash stock compensation expense
19,221
24,204
Changes in operating assets and liabilities:
Accounts receivable, net
(11,024)
(3,724)
Deferred commissions
(1,986)
(1,764)
Other assets
4,072
2,799
Accounts payable and other liabilities
447
2,013
Income taxes, net
368
(2,478)
Deferred revenue
(82)
556
Net cash provided by operating activities
10,901
6,249
Cash flows from investing activities:
Capital expenditures
(876)
(296)
Cash paid in acquisitions, net of cash received
—
(2,933)
Purchases of strategic investments
—
(1,206)
Net cash used in investing activities
(876)
(4,435)
Cash flows from financing activities:
Proceeds related to the issuance of common stock under stock and employee benefit plans
997
2,424
Shares repurchased for tax withholdings upon vesting of stock-based awards
(1,181)
(3,928)
Acquisition of treasury stock
(15,000)
—
Net cash used in financing activities
(15,184)
(1,504)
Effect of exchange rate changes on cash
(275)
486
Net change in cash and cash equivalents
(5,434)
796
Cash and cash equivalents at beginning of period
549,755
664,710
Cash and cash equivalents at end of period
544,321
665,506
Supplemental cash flow information:
Cash (received) for income taxes, net
(118)
(822)
Operating lease assets obtained in exchange for operating lease liabilities
35,691
—
P 12
LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
For the six months ended September 30,
2021
2020
Cash flows from operating activities:
Net earnings (loss)
10,934
(45,696)
Non-cash operating activities:
Depreciation and amortization
12,404
14,955
Loss on disposal or impairment of assets
142
333
Gain on distribution from retained profits interest
(30,052)
—
Provision for doubtful accounts
1,282
2,522
Deferred income taxes
(771)
(485)
Non-cash stock compensation expense
37,717
40,689
Changes in operating assets and liabilities:
Accounts receivable, net
(18,073)
(9,584)
Deferred commissions
(5,369)
(3,445)
Other assets
23,408
7,703
Accounts payable and other liabilities
(36,829)
(20,671)
Income taxes, net
(632)
(3,583)
Deferred revenue
(501)
(101)
Net cash used in operating activities
(6,340)
(17,363)
Cash flows from investing activities:
Capital expenditures
(1,303)
(1,128)
Cash paid in acquisitions, net of cash received
(8,368)
(2,933)
Distribution from retained profits interest
31,000
—
Purchases of strategic investments
—
(1,873)
Net cash provided by (used in) investing activities
21,329
(5,934)
Cash flows from financing activities:
Proceeds related to the issuance of common stock under stock and employee benefit plans
4,278
3,561
Shares repurchased for tax withholdings upon vesting of stock-based awards
(12,542)
(5,755)
Acquisition of treasury stock
(44,077)
(42,312)
Net cash used in financing activities
(52,341)
(44,506)
Effect of exchange rate changes on cash
(14)
683
Net change in cash and cash equivalents
(37,366)
(67,120)
Cash and cash equivalents at beginning of period
581,687
732,626
Cash and cash equivalents at end of period
544,321
665,506
Supplemental cash flow information:
Cash (received) for income taxes, net
(2,569)
(2,863)
Operating lease assets obtained in exchange for operating lease liabilities
35,691
—
P 13
LIVERAMP HOLDINGS, INC AND SUBSIDIARIES
CALCULATION OF FREE CASH FLOW TO EQUITY (1)
(Unaudited)
(Dollars in thousands)
6/30/2020
9/30/2020
12/31/2020
3/31/2021
FY2021
6/30/2021
9/30/2021
FY2022
Net Cash Provided by (Used in) Operating Activities
$
(23,612)
$
6,249
$
14,690
$
(17,887)
$
(20,560)
$
(17,241)
$
10,901
$
(6,340)
Less:
Capital expenditures
(832)
(296)
(678)
(376)
(2,182)
(427)
(876)
(1,303)
Free Cash Flow to Equity
$
(24,444)
$
5,953
$
14,012
$
(18,263)
$
(22,742)
$
(17,668)
$
10,025
$
(7,643)
(1) This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our condensed consolidated financial statements prepared in accordance with GAAP. For a detailed explanation of the adjustments made to comparable GAAP measures, the reasons why management uses these measures and the material limitations on the usefulness of these measures, please see Appendix A.
P 14
LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except per share amounts)
Q2 FY22 to Q2 FY21
6/30/2020
9/30/2020
12/31/2020
3/31/2021
FY2021
6/30/2021
9/30/2021
FY2022
%
$
Revenues
$
99,437
$
104,661
$
119,753
$
119,175
$
443,026
$
119,038
$
127,290
$
246,328
21.6
%
$
22,629
Cost of revenue
34,465
34,897
37,085
37,557
144,004
34,315
35,079
69,394
0.5
%
182
Gross profit
64,972
69,764
82,668
81,618
299,022
84,723
92,211
176,934
32.2
%
22,447
% Gross margin
65.3
%
66.7
%
69.0
%
68.5
%
67.5
%
71.2
%
72.4
%
71.8
%
Operating expenses
Research and development
26,989
31,035
30,608
46,479
135,111
34,776
35,788
70,564
15.3
%
4,753
Sales and marketing
38,627
41,705
43,904
53,307
177,543
41,979
39,509
81,488
(5.3)
%
(2,196)
General and administrative
23,368
24,495
23,943
32,395
104,201
24,291
23,078
47,369
(5.8)
%
(1,417)
Gains, losses and other items, net
1,995
(619)
(6)
1,345
2,715
1,278
18
1,296
102.9
%
637
Total operating expenses
90,979
96,616
98,449
133,526
419,570
102,324
98,393
200,717
1.8
%
1,777
Loss from operations
(26,007)
(26,852)
(15,781)
(51,908)
(120,548)
(17,601)
(6,182)
(23,783)
77.0
%
20,670
(26.2)
%
(25.7)
%
(13.2)
%
(43.6)
%
(27.2)
%
(14.8)
%
(4.9)
%
(9.7)
%
Total other income/(expense), net
463
(225)
(86)
(404)
(252)
30,601
150
30,751
166.7
%
375
Income (loss) from operations before income taxes
(25,544)
(27,077)
(15,867)
(52,312)
(120,800)
13,000
(6,032)
6,968
77.7
%
21,045
Income taxes (benefit)
(3,816)
(3,109)
(4,142)
(19,465)
(30,532)
(4,365)
399
(3,966)
112.8
%
3,508
Net earnings (loss)
$
(21,728)
$
(23,968)
$
(11,725)
$
(32,847)
$
(90,268)
$
17,365
$
(6,431)
$
10,934
73.2
%
$
17,537
Diluted earnings (loss) per share
$
(0.33)
$
(0.36)
$
(0.18)
$
(0.49)
$
(1.36)
$
0.25
(0.09)
0.16
74.0
%
$
0.27
Some earnings (loss) per share amounts may not add due to rounding.
P 15
LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP EPS (1)
(Unaudited)
(Dollars in thousands, except per share amounts)
6/30/2020
9/30/2020
12/31/2020
3/31/2021
FY2021
6/30/2021
9/30/2021
FY2022
Income (loss) from operations before income taxes
$
(25,544)
$
(27,077)
$
(15,867)
$
(52,312)
$
(120,800)
$
13,000
(6,032)
6,968
Income taxes (benefit)
(3,816)
(3,109)
(4,142)
(19,465)
(30,532)
(4,365)
399
(3,966)
Net earnings (loss)
(21,728)
(23,968)
(11,725)
(32,847)
(90,268)
17,365
(6,431)
10,934
Earnings (loss) per share:
Basic
$
(0.33)
$
(0.36)
$
(0.18)
$
(0.49)
$
(1.36)
$
0.25
(0.09)
0.16
Diluted
$
(0.33)
$
(0.36)
$
(0.18)
$
(0.49)
$
(1.36)
$
0.25
(0.09)
0.16
Excluded items:
Purchased intangible asset amortization (cost of revenue)
5,306
4,350
4,213
4,177
18,046
4,645
4,612
9,257
Non-cash stock compensation (cost of revenue and operating expenses)
16,485
24,204
23,894
47,124
111,707
18,496
19,221
37,717
Restructuring and merger charges (gains, losses, and other)
1,995
(619)
(6)
1,345
2,715
1,278
18
1,296
Transformation costs (general and administrative)
3,605
258
—
—
3,863
—
—
—
Gain on retained profits interest (other income)
—
—
—
—
—
(30,052)
—
(30,052)
Total excluded items
$
27,391
$
28,193
$
28,101
$
52,646
$
136,331
$
(5,633)
$
23,851
$
18,218
P 16
LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP EPS (1) (Continued)
(Unaudited)
(Dollars in thousands, except per share amounts)
6/30/2020
9/30/2020
12/31/2020
3/31/2021
FY2021
6/30/2021
9/30/2021
FY2022
Income from operations before income taxes and excluding items
$
1,847
$
1,116
$
12,234
$
334
$
15,531
$
7,367
$
17,819
$
25,186
Income taxes expense (benefit)
934
(1,291)
2,347
(2,628)
(638)
865
(12)
853
Non-GAAP net earnings
$
913
$
2,407
$
9,887
$
2,962
$
16,169
$
6,502
$
17,831
$
24,333
Non-GAAP earnings per share:
Basic
$
0.01
$
0.04
$
0.15
$
0.04
$
0.24
$
0.10
$
0.26
$
0.36
Diluted
$
0.01
$
0.03
$
0.14
$
0.04
$
0.23
$
0.09
$
0.26
$
0.35
Basic weighted average shares
65,570
66,010
66,523
67,111
66,304
68,328
68,042
68,185
Diluted weighted average shares
67,337
68,804
69,775
69,935
68,963
69,605
69,333
69,473
Some totals may not add due to rounding
(1) This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our condensed consolidated financial statements prepared in accordance with GAAP. For a detailed explanation of the adjustments made to comparable GAAP measures, the reasons why management uses these measures and the material limitations on the usefulness of these measures, please see Appendix A.
P 17
LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP EXPENSES (1)
(Unaudited)
(Dollars in thousands)
6/30/2020
9/30/2020
12/31/2020
3/31/2021
FY2021
6/30/2021
9/30/2021
FY2022
Expenses:
Cost of revenue
$
34,465
$
34,897
$
37,085
$
37,557
$
144,004
$
34,315
$
35,079
$
69,394
Research and development
26,989
31,035
30,608
46,479
135,111
34,776
35,788
70,564
Sales and marketing
38,627
41,705
43,904
53,307
177,543
41,979
39,509
81,488
General and administrative
23,368
24,495
23,943
32,395
104,201
24,291
23,078
47,369
Gains, losses and other items, net
1,995
(619)
(6)
1,345
2,715
1,278
18
1,296
Gross profit:
64,972
69,764
82,668
81,618
299,022
84,723
92,211
176,934
% Gross margin
65.3
%
66.7
%
69.0
%
68.5
%
67.5
%
71.2
%
72.4
%
71.8
%
Excluded items:
Purchased intangible asset amortization (cost of revenue)
5,306
4,350
4,213
4,177
18,046
4,645
4,612
9,257
Non-cash stock compensation (cost of revenue)
775
913
988
2,624
5,300
790
948
1,738
Non-cash stock compensation (research and development)
5,886
7,713
7,376
17,985
38,960
5,348
7,184
12,532
Non-cash stock compensation (sales and marketing)
7,123
9,233
9,212
14,833
40,401
6,793
6,749
13,542
Non-cash stock compensation (general and administrative)
2,701
6,345
6,318
11,682
27,046
5,565
4,340
9,905
Restructuring and merger charges (gains, losses, and other)
1,995
(619)
(6)
1,345
2,715
1,278
18
1,296
Transformation costs (general and administrative)
3,605
258
—
—
3,863
—
—
—
Gain on retained profits interest (other income)
$
—
$
—
$
—
$
—
—
(30,052)
—
(30,052)
Total excluded items
$
27,391
$
28,193
$
28,101
$
52,646
$
136,331
$
(5,633)
$
23,851
$
18,218
P 18
LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP EXPENSES (1) (Continued)
(Unaudited)
(Dollars in thousands)
6/30/2020
9/30/2020
12/31/2020
3/31/2021
FY2021
6/30/2021
9/30/2021
FY2022
Expenses, excluding items:
Cost of revenue
$
28,384
$
29,634
$
31,884
$
30,756
$
120,658
$
28,880
$
29,519
$
58,399
Research and development
21,103
23,322
23,232
28,494
96,151
29,428
28,604
58,032
Sales and marketing
31,504
32,472
34,692
38,474
137,142
35,186
32,760
67,946
General and administrative
17,062
17,892
17,625
20,713
73,292
18,726
18,738
37,464
Gains, losses and other items, net
—
—
—
—
—
—
—
—
Gross profit, excluding items:
$
71,053
$
75,027
$
87,869
$
88,419
$
322,368
$
90,158
$
97,771
$
187,929
% Gross margin
71.5
%
71.7
%
73.4
%
74.2
%
72.8
%
75.7
%
76.8
%
76.3
%
(1) This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our condensed consolidated financial statements prepared in accordance with GAAP. For a detailed explanation of the adjustments made to comparable GAAP measures, the reasons why management uses these measures, the usefulness of these measures and the material limitations on the usefulness of these measures, please see Appendix A.
P 19
LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP OPERATING INCOME(LOSS) GUIDANCE (1)
(Unaudited)
(Dollars in thousands)
For the quarter ending
For the year ending
December 31, 2021
March 31, 2022
GAAP loss from operations
$
(20,000)
$
(70,000)
Excluded items:
Purchased intangible asset amortization
5,000
19,000
Non-cash stock compensation
25,000
90,000
Restructuring and merger costs
—
1,000
Total excluded items
30,000
110,000
Non-GAAP income from operations
$
10,000
$
40,000
(1) This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our condensed consolidated financial statements prepared in accordance with GAAP. For a detailed explanation of the adjustments made to comparable GAAP measures, the reasons why management uses these measures, the usefulness of these measures and the material limitations on the usefulness of these measures, please see Appendix A.
P 20
APPENDIX A
LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
Q2 FISCAL 2022 FINANCIAL RESULTS
EXPLANATION OF NON-GAAP MEASURES AND OTHER KEY METRICS
To supplement our financial results, we use non-GAAP measures which exclude certain acquisition related expenses, non-cash stock compensation and restructuring charges. We believe these measures are helpful in understanding our past performance and our future results. Our non-GAAP financial measures and schedules are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read only in conjunction with our consolidated GAAP financial statements. Our management regularly uses these non-GAAP financial measures internally to understand, manage and evaluate our business and to make operating decisions. These measures are among the primary factors management uses in planning for and forecasting future periods. Compensation of our executives is also based in part on the performance of our business based on these non-GAAP measures.
Our non-GAAP financial measures, including non-GAAP earnings (loss) per share, income (loss) from operations and adjusted EBITDA reflect adjustments based on the following items, as well as the related income tax effects when applicable:
Purchased intangible asset amortization: We incur amortization of purchased intangibles in connection with our acquisitions. Purchased intangibles include (i) developed technology, (ii) customer and publisher relationships, and (iii) trade names. We expect to amortize for accounting purposes the fair value of the purchased intangibles based on the pattern in which the economic benefits of the intangible assets will be consumed as revenue is generated. Although the intangible assets generate revenue for us, we exclude this item because this expense is non-cash in nature and because we believe the non-GAAP financial measures excluding this item provide meaningful supplemental information regarding our operational performance.
Non-cash stock compensation: Non-cash stock compensation consists of charges for associate restricted stock units, performance shares and stock options in accordance with current GAAP related to stock-based compensation including expense associated with stock-based compensation related to unvested options assumed in connection with our acquisitions. As we apply stock-based compensation standards, we believe that it is useful to investors to understand the impact of the application of these standards to our operational performance. Although stock-based compensation expense is calculated in accordance with current GAAP and constitutes an ongoing and recurring expense, such expense is excluded from non-GAAP results because it is not an expense that typically requires or will require cash settlement by us and because such expense is not used by us to assess the core profitability of our business operations.
Restructuring charges: During the past several years, we have initiated certain restructuring activities in order to align our costs in connection with both our operating plans and our business strategies based on then-current economic conditions. As a result, we recognized costs related to termination benefits for associates whose positions were eliminated, lease and other contract termination charges, and leasehold improvement write offs. These items, reported as gains, losses, and other items, net, are excluded from non-GAAP results because such amounts are not used by us to assess the core profitability of our business operations.
Transformation costs: In previous years, we incurred significant expenses to separate the financial statements of our operating segments, with particular focus on segment-level balance sheets, and to evaluate portfolio priorities. Our criteria for excluding transformation expenses from our non-GAAP measures is as follows: 1) projects are discrete in nature; 2) excluded expenses consist only of third-party consulting fees that we would not incur otherwise; and 3) we do not exclude employee related expenses or other costs associated with the ongoing operations of our business. We substantially completed those projects during the third quarter of fiscal year 2018. Beginning in the fourth quarter of fiscal 2018, and through most of fiscal 2019, we incurred transaction support expenses and system separation costs related to the Company's announced evaluation of strategic options for its Marketing Solutions (AMS) business. In the first and second quarters of fiscal 2021 in response to the potential COVID-19 pandemic impact on our business, we incurred significant costs associated with the assessment of strategic and operating plans, including our long-term location strategy, and assistance in implementing the restructuring activities as a result of this assessment. Our criteria for excluding these costs are the same. We believe excluding these
P 21
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.
