LIVERAMP ANNOUNCES FOURTH QUARTER AND FISCAL YEAR RESULTS
Q4 Revenue Up 19% and Subscription Revenue Up 22%
Q4 GAAP Gross Margin of 72% and Non-GAAP Gross Margin of 76%
$78 Million of Operating Cash Flow for Full Year
LiveRamp Intends to Repurchase $150 Million of Stock by December 31, 2022
SAN FRANCISCO, Calif., May 24, 2022—LiveRamp® (NYSE: RAMP), the leading global data enablement platform, today announced its financial results for the quarter and fiscal year ended March 31, 2022.
Fourth Quarter Financial Highlights
All metrics compared to the prior year fourth quarter
•Total revenue was $142 million, up 19%.
•Subscription revenue was $116 million, up 22% and contributed 82% of total revenue.
•Marketplace & Other revenue was $26 million, up 6%.
•GAAP gross profit was $102 million, up 25%, and GAAP gross margin of 72% expanded 4 percentage points. Non-GAAP gross profit was $108 million, up 22% and non-GAAP gross margin of 76% expanded 2 percentage points.
•GAAP operating loss was $28 million compared to a GAAP operating loss of $52 million in the prior year period. Non-GAAP operating income was $3 million compared to a non-GAAP operating income of $1 million in the prior year period.
•GAAP loss per share was $0.43, and non-GAAP loss per share was $0.01.
•Net cash provided by operating activities was $59 million compared to net cash used in operating activities of $18 million in the prior year period.
Fiscal Year Financial Highlights
All metrics compared to the prior fiscal year
•Total revenue was $529 million, up 19%.
•Subscription revenue was $429 million, up 20%, and contributed 81% of total revenue.
•Marketplace & Other revenue was $100 million, up 16%.
•GAAP gross profit was $381 million, up 27%, and GAAP gross margin of 72% expanded 5 percentage points. Non-GAAP gross profit was $404 million, up 25%, and non-GAAP gross margin of 76% expanded 4 percentage points.
•GAAP operating loss was $66 million compared to a GAAP operating loss of $121 million in the prior year period. Non-GAAP operating income was $42 million compared to non-GAAP operating income of $16 million.
•GAAP loss per share was $0.50, and non-GAAP earnings per share were $0.48.
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•Net cash provided by operating activities was $78 million compared to net cash used in operating activities of $21 million in the prior fiscal year.
•In fiscal 2022, LiveRamp repurchased approximately 1.3 million shares for $59 million, including approximately 220,000 shares for $9 million in the fourth quarter. In total, since the inception of the share repurchase program in August 2011, the Company has returned over $1.2 billion in capital to shareholders.
A reconciliation between GAAP and non-GAAP results is provided in the schedules to this press release.
“We delivered another solid quarter and our results underscore the critical value our Safe Haven® enterprise platform delivers to customers,” said LiveRamp CEO Scott Howe. “We ended the year with 87 customers paying $1 million or more in annual revenue and with approximately $400 million of ARR. Despite the macroenvironment, we enter FY23 with confidence in our forward outlook. We are executing on our growth strategy, expanding internationally and delivering category-creating innovation to our customers.”
“Our operating trends remain strong,” added LiveRamp President and CFO Warren Jenson. “Our revenue growth was solid, non-GAAP gross margin was 76%, and we were profitable on a non-GAAP operating income basis for the eighth quarter in a row. In addition, we generated $78 million of operating cash flow for fiscal 2022. We are well positioned to deliver both revenue growth and continued operating profit expansion in fiscal 2023.”
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GAAP and Non-GAAP Results
The following table summarizes the Company’s financial results for its fourth quarter and fiscal year ($ in millions):
Q4 Fiscal 2022
Full Year Fiscal 2022
Results
Results
GAAP
Non-GAAP
GAAP
Non-GAAP
Subscription revenue
$
116
—
$
429
—
YoY change %
22
%
20
%
Marketplace & other revenue
$
26
—
$
100
—
YoY change %
6
%
16
%
Total revenue
$
142
—
$
529
—
YoY change %
19
%
19
%
Gross profit
$
102
$
108
$
381
$
404
% Gross margin
72
%
76
%
72
%
76
%
YoY change, pts
4pts
2pts
5pts
4pts
Operating income (loss)
$
(28)
$
3
$
(66)
$
42
% Operating margin
(20)
%
2
%
(12)
%
8
%
YoY change, pts
24pts
1pts
15pts
4pts
Net earnings (loss)
$
(29)
$
(1)
$
(34)
$
34
Earnings (loss) per share
$
(0.43)
$
(0.01)
$
(0.50)
$
0.48
Shares to Calculate EPS
68.3
68.3
68.2
69.6
YoY change %
2
%
(2)
%
3
%
1
%
Net operating cash flow
$
59
—
$
78
—
Free cash flow to equity
—
$
57
—
$
74
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 Company’s Authenticated Traffic Solution (ATS) has reached global scale. There are currently more than 125 supply-side platforms (SSPs) and demand-side platforms (DSPs) live or committed to bid on RampID™ and ATS, including The Trade Desk, Amobee, Criteo, dataxu, and MediaMath. Further, in March 2022, LiveRamp announced an expanded partnership with The Trade Desk to power European Unified ID (EUID) via our ATS infrastructure.
•To date, over 1,500 publishers, representing more than 11,000 deployed domains, have integrated ATS worldwide, including Amazon Publisher Services, Microsoft, CafeMedia, Leaf Group, Prisma Media and Burda. Through these integrations, LiveRamp is now connected to over 85% of consumer time spent online in the U.S.
•LiveRamp added 15 net new direct subscription customers in the fourth quarter. Customer count at quarter end was 905, up from 825 a year ago.
•LiveRamp has 87 customers whose subscription contracts exceed $1 million in annual revenue, up 24% compared to the prior year period.
•During the fourth quarter, subscription net retention was 111%, and platform net retention was 110%.
•Current remaining performance obligations (CRPO), which is contracted and committed revenue expected to be recognized over the next 12 months, was $309 million, up 21% 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 first quarter of fiscal 2023, LiveRamp expects to report:
•Revenue of approximately $139 million, an increase of 17% year-over-year
•GAAP operating loss of approximately $33 million
•Non-GAAP operating income of approximately $1 million
For fiscal 2023, LiveRamp expects to report:
•Revenue of between $608 million and $625 million, an increase of between 15% and 18% year-over-year
•GAAP operating loss of approximately $93 million
•Non-GAAP operating income of approximately $49 million
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Share Repurchase
LiveRamp today also announced that it intends to repurchase approximately $150 million of its common stock by the end of the third quarter of fiscal 2023.
Share repurchases will be made under the Company’s existing share repurchase program that extends through December 31, 2022. Under its share repurchase program, LiveRamp is authorized to repurchase outstanding shares in the open market or privately negotiated transactions depending on prevailing market conditions, corporate and regulatory requirements, stock price, acquisition opportunities and other factors.
“This announcement demonstrates our confidence in LiveRamp, the strength of our operating cash flow, and our commitment to continue delivering value to shareholders,” continued Howe. “Upon completion of the $150 million buyback, LiveRamp will have returned roughly $1.4 billion of capital to shareholders since the inception of its share repurchase program.”
Conference Call
LiveRamp will hold a conference call at 1:30 p.m. PT today to further discuss this information. Interested parties are invited to listen to the call which will be broadcast via the Internet and can be found on LiveRamp’s investor site. A slide presentation will be referenced during the call and can be accessed here.
About LiveRamp
LiveRamp is the leading data enablement 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”), including statements regarding financial guidance for the first quarter of fiscal 2023 and the full year ended March 31, 2023. 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 include 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, including 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
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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.
The forward-looking statements contained in this press release are made as of the date hereof, and 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.
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.
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LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except per share amounts)
For the three months ended March 31,
$
%
2022
2021
Variance
Variance
Revenues
$
141,725
$
119,175
$
22,550
18.9
%
Cost of revenue
39,476
37,557
1,919
5.1
%
Gross profit
102,249
81,618
20,631
25.3
%
% Gross margin
72.1
%
68.5
%
Operating expenses:
Research and development
45,501
46,479
(978)
(2.1)
%
Sales and marketing
54,951
53,307
1,644
3.1
%
General and administrative
29,583
32,395
(2,812)
(8.7)
%
Gains, losses and other items, net
183
1,345
(1,162)
(86.4)
%
Total operating expenses
130,218
133,526
(3,308)
(2.5)
%
Loss from operations
(27,969)
(51,908)
23,939
46.1
%
% Margin
(19.7)
%
(43.6)
%
Total other income (expense), net
(47)
(404)
357
88.4
%
Loss before income taxes
(28,016)
(52,312)
24,296
46.4
%
Income tax expense (benefit)
1,376
(19,465)
20,841
107.1
%
Net loss
$
(29,392)
$
(32,847)
$
3,455
10.5
%
Basic loss per share
$
(0.43)
$
(0.49)
$
0.06
12.1
%
Diluted loss per share
$
(0.43)
$
(0.49)
$
0.06
12.1
%
Basic weighted average shares
68,283
67,111
Diluted weighted average shares
68,283
67,111
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LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except per share amounts)
For the twelve months ended March 31,
$
%
2022
2021
Variance
Variance
Revenues
$
528,657
$
443,026
$
85,631
19.3
%
Cost of revenue
147,427
144,004
3,423
2.4
%
Gross profit
381,230
299,022
82,208
27.5
%
% Gross margin
72.1
%
67.5
%
Operating expenses:
Research and development
157,935
135,111
22,824
16.9
%
Sales and marketing
182,763
177,543
5,220
2.9
%
General and administrative
104,591
104,201
390
0.4
%
Gains, losses and other items, net
1,479
2,715
(1,236)
(45.5)
%
Total operating expenses
446,768
419,570
27,198
6.5
%
Loss from operations
(65,538)
(120,548)
55,010
45.6
%
% Margin
(12.4)
%
(27.2)
%
Total other income (expense), net
30,463
(252)
30,715
12,188.5
%
Loss before income taxes
(35,075)
(120,800)
85,725
71.0
%
Income tax benefit
(1,242)
(30,532)
29,290
95.9
%
Net loss
$
(33,833)
$
(90,268)
$
56,435
62.5
%
Basic loss per share
$
(0.50)
$
(1.36)
$
0.87
63.6
%
Diluted loss per share
$
(0.50)
$
(1.36)
$
0.87
63.6
%
Basic weighted average shares
68,211
66,304
Diluted weighted average shares
68,211
66,304
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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 March 31,
For the twelve months ended March 31,
2022
2021
2022
2021
Loss before income taxes
$
(28,016)
$
(52,312)
$
(35,075)
$
(120,800)
Income tax expense (benefit)
1,376
(19,465)
(1,242)
(30,532)
Net loss
$
(29,392)
$
(32,847)
$
(33,833)
$
(90,268)
Loss per share:
Basic
$
(0.43)
$
(0.49)
$
(0.50)
$
(1.36)
Diluted
$
(0.43)
$
(0.49)
$
(0.50)
$
(1.36)
Excluded items:
Purchased intangible asset amortization (cost of revenue)
$
4,807
$
4,177
$
18,711
$
18,046
Non-cash stock compensation (cost of revenue and operating expenses)
25,782
47,124
87,257
111,707
Restructuring and merger charges (gains, losses, and other)
183
1,345
1,479
2,715
Transformation costs (general and administrative)
—
—
—
3,863
Gain on retained profits interest (other income)
—
—
(30,235)
—
Total excluded items
30,772
52,646
77,212
136,331
Income from operations before income taxes and excluding items
2,756
334
42,137
15,531
Income taxes (2)
3,391
(2,628)
8,515
(638)
Non-GAAP net earnings (loss)
$
(635)
$
2,962
$
33,622
$
16,169
Non-GAAP earnings (loss) per share:
Basic
$
(0.01)
$
0.04
$
0.49
$
0.24
Diluted
$
(0.01)
$
0.04
$
0.48
$
0.23
Basic weighted average shares
68,283
67,111
68,211
66,304
Diluted weighted average shares
68,283
69,935
69,560
68,963
(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.
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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 March 31,
For the twelve months ended March 31,
2022
2021
2022
2021
Loss from operations
$
(27,969)
$
(51,908)
$
(65,538)
$
(120,548)
Excluded items:
Purchased intangible asset amortization (cost of revenue)
4,807
4,177
18,711
18,046
Non-cash stock compensation (cost of revenue and operating expenses)
25,782
47,124
87,257
111,707
Restructuring and merger charges (gains, losses, and other)
183
1,345
1,479
2,715
Transformation costs (general and administrative)
—
—
—
3,863
Total excluded items
30,772
52,646
107,447
136,331
Income from operations before excluded items
$
2,803
$
738
$
41,909
$
15,783
(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.
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LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
RECONCILIATION OF ADJUSTED EBITDA (1)
(Unaudited)
(Dollars in thousands)
For the three months ended March 31,
For the twelve months ended March 31,
2022
2021
2022
2021
Net loss
$
(29,392)
$
(32,847)
$
(33,833)
$
(90,268)
Income tax expense (benefit)
1,376
(19,465)
(1,242)
(30,532)
Other expense (income)
47
404
(30,463)
252
Loss from operations
(27,969)
(51,908)
(65,538)
(120,548)
Depreciation and amortization
6,017
6,277
24,248
27,741
EBITDA
$
(21,952)
$
(45,631)
$
(41,290)
$
(92,807)
Other adjustments:
Non-cash stock compensation (cost of revenue and operating expenses)
25,782
47,124
87,257
111,707
Restructuring and merger charges (gains, losses, and other)
183
1,345
1,479
2,715
Transformation costs (general and administrative)
—
—
—
3,863
Other adjustments
25,965
48,469
88,736
118,285
Adjusted EBITDA
$
4,013
$
2,838
$
47,446
$
25,478
(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.
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LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
March 31,
March 31,
$
%
2022
2021
Variance
Variance
Assets
Current assets:
Cash and cash equivalents
$
600,162
$
572,787
$
27,375
4.8
%
Restricted cash
—
8,900
(8,900)
(100.0)
%
Trade accounts receivable, net
148,343
114,284
34,059
29.8
%
Refundable income taxes
30,354
65,692
(35,338)
(53.8)
%
Other current assets
36,975
64,052
(27,077)
(42.3)
%
Total current assets
815,834
825,715
(9,881)
(1.2)
%
Property and equipment
45,001
44,284
717
1.6
%
Less - accumulated depreciation and amortization
33,470
32,327
1,143
3.5
%
Property and equipment, net
11,531
11,957
(426)
(3.6)
%
Intangible assets, net
26,718
39,730
(13,012)
(32.8)
%
Goodwill
363,845
357,446
6,399
1.8
%
Deferred commissions, net
30,594
22,619
7,975
35.3
%
Other assets, net
85,214
30,854
54,360
176.2
%
$
1,333,736
$
1,288,321
$
45,415
3.5
%
Liabilities and Stockholders' Equity
Current liabilities:
Trade accounts payable
$
83,197
$
39,955
$
43,242
108.2
%
Accrued payroll and related expenses
39,188
46,438
(7,250)
(15.6)
%
Other accrued expenses
46,067
58,353
(12,286)
(21.1)
%
Acquisition escrow payable
—
8,900
(8,900)
(100.0)
%
Deferred revenue
16,114
11,603
4,511
38.9
%
Total current liabilities
184,566
165,249
19,317
11.7
%
Other liabilities
86,110
42,389
43,721
103.1
%
Stockholders' equity:
Preferred stock
—
—
—
—
%
Common stock
14,984
14,781
203
1.4
%
Additional paid-in capital
1,721,118
1,630,072
91,046
5.6
%
Retained earnings
1,420,993
1,454,826
(33,833)
(2.3)
%
Accumulated other comprehensive income
5,730
7,522
(1,792)
(23.8)
%
Treasury stock, at cost
(2,099,765)
(2,026,518)
(73,247)
3.6
%
Total stockholders' equity
1,063,060
1,080,683
(17,623)
(1.6)
%
$
1,333,736
$
1,288,321
$
45,415
3.5
%
P 12
LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
For the three months ended March 31,
2022
2021
Cash flows from operating activities:
Net loss
(29,392)
(32,847)
Non-cash operating activities:
Depreciation and amortization
6,017
6,277
Loss on disposal or impairment of assets
41
54
Provision for doubtful accounts
1,090
(431)
Deferred income taxes
(1,084)
(1,418)
Non-cash stock compensation expense
25,782
47,124
Changes in operating assets and liabilities:
Accounts receivable, net
7,265
1,818
Deferred commissions
(1,111)
(1,523)
Other assets
4,786
(26,283)
Accounts payable and other liabilities
11,321
6,731
Income taxes, net
32,971
(17,233)
Deferred revenue
1,258
(156)
Net cash provided by operating activities
58,944
(17,887)
Cash flows from investing activities:
Capital expenditures
(1,880)
(376)
Cash paid in acquisitions, net of cash received
(8,731)
(58,264)
Purchases of investments
—
(4,500)
Net cash used in investing activities
(10,611)
(63,140)
Cash flows from financing activities:
Proceeds related to the issuance of common stock under stock and employee benefit plans
83
61
Shares repurchased for tax withholdings upon vesting of stock-based awards
(410)
(538)
Acquisition of treasury stock
(9,397)
—
Net cash used in financing activities
(9,724)
(477)
Effect of exchange rate changes on cash
(137)
(210)
Net change in cash and cash equivalents
38,472
(81,714)
Cash and cash equivalents at beginning of period
561,690
663,401
Cash and cash equivalents at end of period
600,162
581,687
Supplemental cash flow information:
Cash (received) for income taxes, net
(30,101)
(819)
Operating lease assets obtained in exchange for operating lease liabilities
3,280
—
P 13
LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
For the twelve months ended March 31,
2022
2021
Cash flows from operating activities:
Net loss
(33,833)
(90,268)
Non-cash operating activities:
Depreciation and amortization
24,248
27,741
Loss on disposal or impairment of assets
183
388
Gain on distribution from retained profits interest
(30,235)
—
Provision for doubtful accounts
4,217
2,915
Deferred income taxes
(1,540)
(1,418)
Non-cash stock compensation expense
87,257
111,707
Changes in operating assets and liabilities:
Accounts receivable, net
(38,611)
(24,828)
Deferred commissions
(7,975)
(6,605)
Other assets
26,863
(18,772)
Accounts payable and other liabilities
8,850
(116)
Income taxes, net
33,969
(26,215)
Deferred revenue
4,684
4,911
Net cash provided by (used in) operating activities
78,077
(20,560)
Cash flows from investing activities:
Capital expenditures
(4,499)
(2,182)
Cash paid in acquisitions, net of cash received
(19,107)
(76,012)
Distribution from retained profits interest
31,184
—
Purchases of investments
—
(7,500)
Purchases of strategic investments
—
(2,200)
Net cash provided by (used in) investing activities
7,578
(87,894)
Cash flows from financing activities:
Proceeds related to the issuance of common stock under stock and employee benefit plans
6,266
8,737
Shares repurchased for tax withholdings upon vesting of stock-based awards
(14,626)
(9,920)
Acquisition of treasury stock
(58,621)
(42,312)
Net cash used in financing activities
(66,981)
(43,495)
Effect of exchange rate changes on cash
(199)
1,010
Net change in cash and cash equivalents
18,475
(150,939)
Cash and cash equivalents at beginning of period
581,687
732,626
Cash and cash equivalents at end of period
600,162
581,687
Supplemental cash flow information:
Cash (received) for income taxes, net
(32,916)
(2,911)
Operating lease assets obtained in exchange for operating lease liabilities
56,182
—
P 14
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
12/31/2021
3/31/2022
FY2022
Net Cash Provided by (Used in) Operating Activities
$
(23,612)
$
6,249
$
14,690
$
(17,887)
$
(20,560)
$
(17,241)
$
10,901
$
25,473
$
58,944
$
78,077
Less:
Capital expenditures
(832)
(296)
(678)
(376)
(2,182)
(427)
(876)
(1,316)
(1,880)
(4,499)
Free Cash Flow to Equity
$
(24,444)
$
5,953
$
14,012
$
(18,263)
$
(22,742)
$
(17,668)
$
10,025
$
24,157
$
57,064
$
73,578
(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 15
LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except per share amounts)
FY22 to FY21
6/30/2020
9/30/2020
12/31/2020
3/31/2021
FY2021
6/30/2021
9/30/2021
12/31/2021
3/31/2022
FY2022
%
$
Revenues
$
99,437
$
104,661
$
119,753
$
119,175
$
443,026
$
119,038
$
127,290
$
140,604
$
141,725
$
528,657
19.3
%
$
85,631
Cost of revenue
34,465
34,897
37,085
37,557
144,004
34,315
35,079
38,557
39,476
147,427
2.4
%
3,423
Gross profit
64,972
69,764
82,668
81,618
299,022
84,723
92,211
102,047
102,249
381,230
27.5
%
82,208
% Gross margin
65.3
%
66.7
%
69.0
%
68.5
%
67.5
%
71.2
%
72.4
%
72.6
%
72.1
%
72.1
%
Operating expenses
Research and development
26,989
31,035
30,608
46,479
135,111
34,776
35,788
41,870
45,501
157,935
16.9
%
22,824
Sales and marketing
38,627
41,705
43,904
53,307
177,543
41,979
39,509
46,324
54,951
182,763
2.9
%
5,220
General and administrative
23,368
24,495
23,943
32,395
104,201
24,291
23,078
27,639
29,583
104,591
0.4
%
390
Gains, losses and other items, net
1,995
(619)
(6)
1,345
2,715
1,278
18
—
183
1,479
(45.5)
%
(1,236)
Total operating expenses
90,979
96,616
98,449
133,526
419,570
102,324
98,393
115,833
130,218
446,768
6.5
%
27,198
Loss from operations
(26,007)
(26,852)
(15,781)
(51,908)
(120,548)
(17,601)
(6,182)
(13,786)
(27,969)
(65,538)
45.6
%
55,010
(26.2)
%
(25.7)
%
(13.2)
%
(43.6)
%
(27.2)
%
(14.8)
%
(4.9)
%
(9.8)
%
(19.7)
%
(12.4)
%
Total other income (expense), net
463
(225)
(86)
(404)
(252)
30,601
150
(241)
(47)
30,463
12,188.5
%
30,715
Loss before income taxes
(25,544)
(27,077)
(15,867)
(52,312)
(120,800)
13,000
(6,032)
(14,027)
(28,016)
(35,075)
71.0
%
85,725
Income taxes expense (benefit)
(3,816)
(3,109)
(4,142)
(19,465)
(30,532)
(4,365)
399
1,348
1,376
(1,242)
95.9
%
29,290
Net earnings (loss)
$
(21,728)
$
(23,968)
$
(11,725)
$
(32,847)
$
(90,268)
$
17,365
$
(6,431)
$
(15,375)
$
(29,392)
$
(33,833)
62.5
%
$
56,435
Diluted earnings (loss) per share
$
(0.33)
$
(0.36)
$
(0.18)
$
(0.49)
$
(1.36)
$
0.25
(0.09)
(0.23)
(0.43)
(0.50)
63.6
%
$
0.87
Some earnings (loss) per share amounts may not add due to rounding.
P 16
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
12/31/2021
3/31/2022
FY2022
Income (loss) before income taxes
$
(25,544)
$
(27,077)
$
(15,867)
$
(52,312)
$
(120,800)
$
13,000
(6,032)
(14,027)
(28,016)
(35,075)
Income taxes (benefit)
(3,816)
(3,109)
(4,142)
(19,465)
(30,532)
(4,365)
399
1,348
1,376
(1,242)
Net earnings (loss)
(21,728)
(23,968)
(11,725)
(32,847)
(90,268)
17,365
(6,431)
(15,375)
(29,392)
(33,833)
Earnings (loss) per share:
Basic
$
(0.33)
$
(0.36)
$
(0.18)
$
(0.49)
$
(1.36)
$
0.25
(0.09)
(0.23)
(0.43)
(0.50)
Diluted
$
(0.33)
$
(0.36)
$
(0.18)
$
(0.49)
$
(1.36)
$
0.25
(0.09)
(0.23)
(0.43)
(0.50)
Excluded items:
Purchased intangible asset amortization (cost of revenue)
5,306
4,350
4,213
4,177
18,046
4,645
4,612
4,647
4,807
18,711
Non-cash stock compensation (cost of revenue and operating expenses)
16,485
24,204
23,894
47,124
111,707
18,496
19,221
23,758
25,782
87,257
Restructuring and merger charges (gains, losses, and other)
1,995
(619)
(6)
1,345
2,715
1,278
18
—
183
1,479
Transformation costs (general and administrative)
3,605
258
—
—
3,863
—
—
—
—
—
Gain on retained profits interest (other income)
—
—
—
—
—
(30,052)
—
(183)
(30,235)
Total excluded items
$
27,391
$
28,193
$
28,101
$
52,646
$
136,331
$
(5,633)
$
23,851
$
28,222
$
30,772
$
77,212
P 17
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
12/31/2021
3/31/2022
FY2022
Income before income taxes and excluding items
$
1,847
$
1,116
$
12,234
$
334
$
15,531
$
7,367
$
17,819
$
14,195
$
2,756
$
42,137
Income taxes expense (benefit)
934
(1,291)
2,347
(2,628)
(638)
865
(12)
4,271
3,391
8,515
Non-GAAP net earnings (loss)
$
913
$
2,407
$
9,887
$
2,962
$
16,169
$
6,502
$
17,831
$
9,924
$
(635)
$
33,622
Non-GAAP earnings (loss) per share:
Basic
$
0.01
$
0.04
$
0.15
$
0.04
$
0.24
$
0.10
$
0.26
$
0.15
$
(0.01)
$
0.49
Diluted
$
0.01
$
0.03
$
0.14
$
0.04
$
0.23
$
0.09
$
0.26
$
0.14
$
(0.01)
$
0.48
Basic weighted average shares
65,570
66,010
66,523
67,111
66,304
68,328
68,042
68,190
68,283
68,211
Diluted weighted average shares
67,337
68,804
69,775
69,935
68,963
69,605
69,333
69,938
68,283
69,560
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 18
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
12/31/2021
3/31/2022
FY2022
Expenses:
Cost of revenue
$
34,465
$
34,897
$
37,085
$
37,557
$
144,004
$
34,315
$
35,079
$
38,557
$
39,476
$
147,427
Research and development
26,989
31,035
30,608
46,479
135,111
34,776
35,788
41,870
45,501
157,935
Sales and marketing
38,627
41,705
43,904
53,307
177,543
41,979
39,509
46,324
54,951
182,763
General and administrative
23,368
24,495
23,943
32,395
104,201
24,291
23,078
27,639
29,583
104,591
Gains, losses and other items, net
1,995
(619)
(6)
1,345
2,715
1,278
18
—
183
1,479
Gross profit:
64,972
69,764
82,668
81,618
299,022
84,723
92,211
102,047
102,249
381,230
% Gross margin
65.3
%
66.7
%
69.0
%
68.5
%
67.5
%
71.2
%
72.4
%
72.6
%
72.1
%
Excluded items:
Purchased intangible asset amortization (cost of revenue)
5,306
4,350
4,213
4,177
18,046
4,645
4,612
4,647
18,711
Non-cash stock compensation (cost of revenue)
775
913
988
2,624
5,300
790
948
1,168
4,111
Non-cash stock compensation (research and development)
5,886
7,713
7,376
17,985
38,960
5,348
7,184
9,264
32,112
Non-cash stock compensation (sales and marketing)
7,123
9,233
9,212
14,833
40,401
6,793
6,749
7,329
28,586
Non-cash stock compensation (general and administrative)
2,701
6,345
6,318
11,682
27,046
5,565
4,340
5,997
22,448
Restructuring and merger charges (gains, losses, and other)
1,995
(619)
(6)
1,345
2,715
1,278
18
—
1,479
Transformation costs (general and administrative)
3,605
258
—
—
3,863
—
—
—
—
Gain on retained profits interest (other income)
$
—
$
—
$
—
$
—
—
(30,052)
—
(183)
(30,235)
Total excluded items
$
27,391
$
28,193
$
28,101
$
52,646
$
136,331
$
(5,633)
$
23,851
$
28,222
$
—
$
77,212
P 19
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
12/31/2021
3/31/2022
FY2022
Expenses, excluding items:
Cost of revenue
$
28,384
$
29,634
$
31,884
$
30,756
$
120,658
$
28,880
$
29,519
$
32,742
$
33,464
$
124,605
Research and development
21,103
23,322
23,232
28,494
96,151
29,428
28,604
32,606
35,185
125,823
Sales and marketing
31,504
32,472
34,692
38,474
137,142
35,186
32,760
38,995
47,236
154,177
General and administrative
17,062
17,892
17,625
20,713
73,292
18,726
18,738
21,642
23,037
82,143
Gains, losses and other items, net
—
—
—
—
—
—
—
—
—
—
Gross profit, excluding items:
$
71,053
$
75,027
$
87,869
$
88,419
$
322,368
$
90,158
$
97,771
$
107,862
$
108,261
$
404,052
% Gross margin
71.5
%
71.7
%
73.4
%
74.2
%
72.8
%
75.7
%
76.8
%
76.7
%
76.4
%
(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
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
June 30, 2022
March 31, 2023
GAAP loss from operations
$
(33,000)
$
(93,000)
Excluded items:
Purchased intangible asset amortization
5,000
17,000
Non-cash stock compensation
29,000
125,000
Total excluded items
34,000
142,000
Non-GAAP income from operations
$
1,000
$
49,000
(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 21
APPENDIX A
LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
Q4 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 22
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.