LiveRamp Announces Second Quarter Results
LiveRamp® (NYSE: RAMP), the leading data collaboration platform, today announced its financial results for the fiscal 2024 second quarter ended September 30, 2023.
This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20231108738860/en/
Q2 Financial Highlights1
Total revenue was $160 million, up 9%. Subscription revenue was $126 million, up 5%, and accounted for 79% of total revenue. Marketplace Other revenue was $34 million, up 25%. GAAP gross profit was $119 million, up 13%. GAAP gross margin of 74% expanded by 3 percentage points. Non-GAAP gross profit was $121 million, up 9%. Non-GAAP gross margin of 75% was flat year-on-year. GAAP operating income was $8 million compared to a loss of $29 million. GAAP operating margin was 5% compared to negative 20%. Non-GAAP operating income was $32 million compared to $17 million. Non-GAAP operating margin of 20% expanded by 8 percentage points. GAAP diluted earnings per share was $0.07 and non-GAAP diluted earnings per share was $0.43. Net cash provided by operating activities was $36 million compared to $21 million. Share repurchases in the second quarter totaled approximately 490,000 shares for $15 million, bringing the fiscal first half total to 1.3 million shares for $35 million.A reconciliation between GAAP and non-GAAP results is provided in the schedules to this press release.
“We posted strong second quarter results, with both revenue and operating income exceeding our expectations; operating margin was a record high and operating cash flow was positive for a fifth consecutive quarter,” said LiveRamp CEO Scott Howe. “We had our best new logo quarter in two years, including the addition of multiple Fortune 500 customers, demonstrating the traction our Data Collaboration Platform has with marketers looking to more fully leverage their first-party customer data across the digital advertising ecosystem.”
______________
1 Unless otherwise indicated, all comparisons are to the prior year period.
GAAP and Non-GAAP Results
The following table summarizes the Company’s financial results for the fiscal 2024 second quarter ended September 30, 2023 ($ in millions, except per share amounts):
GAAP
Non-GAAP
Q2 FY24
Q2 FY23
Q2 FY24
Q2 FY23
Subscription revenue
$126
$120
—
—
YoY change %
5%
14%
—
—
Marketplace Other revenue
$34
$27
—
—
YoY change %
25%
25%
—
—
Total revenue
$160
$147
—
—
YoY change %
9%
16%
—
—
Gross profit
$119
$105
$121
$111
% Gross margin
74%
71%
75%
75%
YoY change, pts
3 pts
(1 pt)
0 pts
(2 pts)
Operating income (loss)
$8
($29)
$32
$17
% Operating margin
5%
(20%)
20%
12%
YoY change, pts
25 pts
(15 pts)
8 pts
(2 pts)
Net earnings (loss)
$5
($30)
$29
$15
Diluted earnings (loss) per share
$0.07
($0.45)
$0.43
$0.22
Shares to calculate diluted EPS
67.9
67.1
67.9
67.6
YoY change %
1%
(1%)
0%
(3%)
Net operating cash flow
$36
$21
—
—
Free cash flow to equity
—
—
$36
$19
Totals may not sum due to rounding.
A detailed discussion of our non-GAAP financial measures and a reconciliation between GAAP and non-GAAP results is provided in the schedules attached to this press release.
Additional Business Highlights Metrics
In August 2023 we were selected as a 2023 Google Cloud Partner of the Year. LiveRamp was recognized as a “Global Industry Technology Partner of the Year” for delivering embedded solutions that help customers enrich their Google Cloud environment and extend value to wherever their data lives. In October 2023 we announced that our identity capabilities are now natively available within AWS Entity Resolution and support additional identifier types. With this integration, marketers, publishers, tech platforms, and agencies can extend the interoperability of data in the cloud to marketing and advertising destinations using RampID. In August 2023 we expanded our reach in the MarTech space by announcing a new partnership with Sendbird, a global in-app conversations platform with over 300 million monthly active users. Joint customers of Sendbird and LiveRamp can now power personalized marketing and consumer experiences using LiveRamp's identity solutions. For the first time marketers can bring together media exposure logs and marketing technology exposure logs to build a more robust view of the customer journey. The Company’s globally scaled Authenticated Traffic Solution (ATS) has more than 165 supply-side platforms (SSPs) and demand-side platforms (DSPs) live or committed to bid on RampID™ and ATS, including The Trade Desk, Xandr, Yahoo, Amobee, Criteo, Adobe Ad Cloud, and Roku Oneview. To date, over 16,000 publisher domains and over 70% of the comScore 100 publishers, have adopted ATS, including Amazon Publisher Services, Microsoft, Hearst, CafeMedia, Leaf Group, Prisma Media and Burda. Through these integrations, LiveRamp is now connected to over 92% of consumer time spent online in the US. We recently announced new partnerships with Epsilon, FreeWheel, and Yahoo that extend the RampID footprint and give brands greater reach to data-driven premium advertising inventory: In September 2023 we announced that our connectivity solution, ATS, is now interoperable with Epsilon’s identity framework. In September 2023 we announced that we are integrating RampID with FreeWheel, a leading supply-side platform for CTV publishers. In October 2023 we announced an expanded partnership with Yahoo to scale advertising addressability and reach by making Yahoo’s ConnectID interoperable with RampID. LiveRamp ended the quarter with 99 customers whose subscription contracts exceed $1 million in annual revenue, compared to 92 in the prior year period. LiveRamp ended the quarter with 895 direct subscription customers, compared to 920 in the prior year period. Second quarter subscription net retention was 101% and platform net retention was 104%. Current remaining performance obligations (CRPO), which is contracted and committed revenue expected to be recognized over the next 12 months, was $339 million, up 16% compared to the prior year period.Financial Outlook
LiveRamp’s non-GAAP operating income guidance excludes the impact of non-cash stock compensation, purchased intangible asset amortization, and restructuring and related charges.
For the third quarter of fiscal 2024, LiveRamp expects to report:
Revenue of $165 million, an increase of 4% GAAP operating income of $8 million Non-GAAP operating income of $29 millionFor fiscal 2024, LiveRamp updates its guidance and expects to report:
Revenue of between $632 million and $637 million, an increase of between 6% and 7% GAAP operating income of between $8 million and $11 million Non-GAAP operating income of between $97 million and $100 millionConference Call
LiveRamp will hold a conference call today at 1:30 p.m. PT to further discuss this information. Interested parties are invited to listen to the call which will be broadcast via the Internet and can be found on LiveRamp’s investor site. A slide presentation will be referenced during the call and can be accessed here.
About LiveRamp
LiveRamp is the data collaboration platform of choice for the world’s most innovative companies. A groundbreaking leader in consumer privacy, data ethics, and foundational identity, LiveRamp is setting the new standard for building a connected customer view with unmatched clarity and context while protecting precious brand and consumer trust. LiveRamp offers complete flexibility to collaborate wherever data lives to support the widest range of data collaboration use cases—within organizations, between brands, and across its premier global network of top-quality partners. Hundreds of global innovators, from iconic consumer brands and tech giants to banks, retailers, and healthcare leaders, turn to LiveRamp to build enduring brand and business value by deepening customer engagement and loyalty, activating new partnerships, and maximizing the value of their first-party data while staying on the forefront of rapidly evolving compliance and privacy requirements. LiveRamp is based in San Francisco, California with offices worldwide. Learn more at LiveRamp.com.
Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, as amended (the “PSLRA”). These statements, which are not statements of historical fact, may contain estimates, assumptions, projections and/or expectations regarding the Company’s financial position, results of operations for fiscal 2024 and beyond, market position, product development, growth opportunities, economic conditions, and other similar forecasts and statements of expectation. Forward-looking statements are often identified by words or phrases such as “anticipate,” “estimate,” “plan,” “expect,” “believe,” “intend,” “foresee,” or the negative of these terms or other similar variations thereof.
These forward-looking statements are not guarantees of future performance and are subject to a number of factors and uncertainties that could cause the Company’s actual results and experiences to differ materially from the anticipated results and expectations expressed in the forward-looking statements.
Among the factors that may cause actual results and expectations to differ from anticipated results and expectations expressed in forward-looking statements are uncertainties related to rising interest rates, cost increases, the possibility of a recession, general inflationary pressure, geo-political circumstances that could result in increased economic uncertainties and the associated impacts of these potential events on our suppliers, customers and partners; the Company’s dependence upon customer renewals; new customer additions and upsell within our subscription business; our reliance upon partners, including data suppliers; competition; rapidly changing technology’s impact on our products and services; and attracting, motivating and retaining talent. Additional risks include maintaining our culture and our ability to innovate and evolve while operating in a hybrid work environment, with some employees working remotely at least some of the time within a rapidly changing industry, while also avoiding disruption from reductions in our current workforce as well as disruptions resulting from acquisition, divestiture and other activities affecting our workforce. Our global workforce strategy could possibly encounter difficulty and not be as beneficial as planned. Our international operations are also subject to risks, including the performance of third parties as well as impacts from war and civil unrest, that may harm the Company’s business. The risk of a significant breach of the confidentiality of the information or the security of our or our customers’, suppliers’, or other partners’ data and/or computer systems, or the risk that our current insurance coverage may not be adequate for such a breach, that an insurer might deny coverage for a claim or that such insurance will continue to be available to us on commercially reasonable terms, or at all, could be detrimental to our business, reputation and results of operations. Other business risks include unfavorable publicity and negative public perception about our industry; interruptions or delays in service from data center or cloud hosting vendors we rely upon; and our dependence on the continued availability of third-party data hosting and transmission services. Our clients’ ability to use data on our platform could be restricted if the industry’s use of third-party cookies and tracking technology declines due to technology platform changes, regulation or increased user controls. Changes in regulations relating to information collection and use represents a risk, as well as changes in tax laws and regulations that are applied to our customers which could cause enterprise software budget tightening. In addition, third parties may claim that we are infringing their intellectual property or may infringe our intellectual property which could result in competitive injury and / or the incurrence of significant costs and draining of our resources.
For a discussion of these and other risks and uncertainties, please refer to LiveRamp’s Annual Report on Form 10-K for our fiscal year 2023 ended March 31, 2023, and LiveRamp's Quarterly Reports on Form 10-Q issued in fiscal year 2024.
The financial information set forth in this press release reflects estimates based on information available at this time.
LiveRamp assumes no obligation and does not currently intend to update these forward-looking statements.
To automatically receive LiveRamp financial news by email, please visit www.LiveRamp.com and subscribe to email alerts.
LiveRampⓇ and RampIDTM and all other LiveRamp marks contained herein are trademarks or service marks of LiveRamp, Inc. All other marks are the property of their respective owners.
LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (Dollars in thousands, except per share amounts) For the Three Months Ended September 30,
$
%
2023
2022
Revenues
159,871
147,099
12,772
8.7
%
Cost of revenue41,212
42,304
(1,092
)
(2.6
%)
Gross profit118,659
104,795
13,864
13.2
%
% Gross margin74.2
%
71.2
%
Operating expenses: Research and development33,733
46,139
(12,406
)
(26.9
%)
Sales and marketing44,135
45,949
(1,814
)
(3.9
%)
General and administrative26,009
28,718
(2,709
)
(9.4
%)
Gains, losses and other items, net6,574
13,111
(6,537
)
(49.9
%)
Total operating expenses110,451
133,917
(23,466
)
(17.5
%)
Income (loss) from operations8,208
(29,122
)
37,330
128.2
%
%5.1
%
-19.8
%
Total other income, net6,431
2,248
4,183
186.1
%
Income (loss) from continuing operations before Income taxes14,639
(26,874
)
41,513
154.5
%
Income tax expense10,163
3,562
6,601
185.3
%
Net earnings (loss) from continuing operations4,476
(30,436
)
34,912
114.7
%
Earnings from discontinued operations, net of tax387
-
387
n/a
Net earnings (loss)
4,863
(30,436
)
35,299
116.0
%
Basic earnings (loss) per share: Continuing operations0.07
(0.45
)
0.52
114.9
%
Discontinued operations0.01
-
0.01
n/a
Basic earnings (loss) per share
0.07
(0.45
)
0.53
115.8
%
Diluted earnings (loss) per share: Continuing operations0.07
(0.45
)
0.52
114.5
%
Discontinued operations0.01
-
0.01
n/a
Diluted earnings (loss) per share:
0.07
(0.45
)
0.53
115.8
%
Basic weighted average shares66,284
67,096
Diluted weighted average shares
67,868
67,096
LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (Dollars in thousands, except per share amounts) For the Six Months Ended September 30,
$
%
2023
2022
Revenues
313,940
289,342
24,598
8.5
%
Cost of revenue86,833
83,325
3,508
4.2
%
Gross profit227,107
206,017
21,090
10.2
%
% Gross margin72.3
%
71.2
%
Operating expenses: Research and development68,252
93,800
(25,548
)
(27.2
%)
Sales and marketing89,014
97,229
(8,215
)
(8.4
%)
General and administrative52,673
55,862
(3,189
)
(5.7
%)
Gains, losses and other items, net6,690
13,850
(7,160
)
(51.7
%)
Total operating expenses216,629
260,741
(44,112
)
(16.9
%)
Income (loss) from operations10,478
(54,724
)
65,202
119.1
%
%3.3
%
-18.9
%
Total other income, net11,280
2,947
8,333
282.8
%
Income (loss) from continuing operations before Income taxes21,758
(51,777
)
73,535
142.0
%
Income tax expense18,868
5,877
12,991
221.0
%
Net earnings (loss) from continuing operations2,890
(57,654
)
60,544
105.0
%
Earnings from discontinued operations, net of tax387
-
387
n/a
Net earnings (loss)
3,277
(57,654
)
60,931
105.7
%
Basic earnings (loss) per share: Continuing operations0.04
(0.85
)
0.89
105.1
%
Discontinued operations0.01
-
0.01
n/a
Basic earnings (loss) per share
0.05
(0.85
)
0.90
105.8
%
Diluted earnings (loss) per share: Continuing operations0.04
(0.85
)
0.89
105.0
%
Discontinued operations0.01
-
0.01
n/a
Diluted earnings (loss) per share:
0.05
(0.85
)
0.90
105.7
%
Basic weighted average shares66,391
67,750
Diluted weighted average shares
67,628
67,750
LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES RECONCILIATION OF GAAP TO NON-GAAP EPS (1) (Unaudited) (Dollars in thousands, except per share amounts)
For the Three Months Ended
For the Six Months Ended
September 30,
September 30,
2023
2022
2023
2022
Income (loss) from continuing operations before Income taxes14,639
(26,874
)
21,758
(51,777
)
Income tax expense10,163
3,562
18,868
5,877
Net earnings (loss) from continuing operations
4,476
(30,436
)
2,890
(57,654
)
Earnings from discontinued operations, net of tax387
-
387
-
Net earnings (loss)
4,863
(30,436
)
3,277
(57,654
)
Earnings (loss) per share: Basic0.07
(0.45
)
0.05
(0.85
)
Diluted0.07
(0.45
)
0.05
(0.85
)
Excluded items: Purchased intangible asset amortization (cost of revenue)1,217
4,637
4,507
9,280
Non-cash stock compensation (cost of revenue and operating expenses)
15,735
27,293
29,027
51,518
Transformation costs (general and administrative)
-
1,250
1,875
1,250
Restructuring charges (gains, losses, and other)
6,574
13,111
6,690
13,850
Total excluded items, continuing operations
23,526
46,291
42,099
75,898
Income from continuing operations before Income taxes and excluding items
38,165
19,417
63,857
24,121
Income tax expense (2)
9,036
4,557
15,203
5,794
Non-GAAP net earnings from continuing operations
29,129
14,860
48,654
18,327
Non-GAAP earnings per share from continuing operations: Basic
0.44
0.22
0.73
0.27
Diluted
0.43
0.22
0.72
0.27
Basic weighted average shares
66,284
67,096
66,391
67,750
Diluted weighted average shares
67,868
67,568
67,628
68,384
(1) This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. For a detailed explanation of the adjustments made to comparable GAAP measures, the reasons why management uses these measures and the material limitations on the usefulness of these measures, please see Appendix A.
(2) Income taxes were calculated by applying the estimated annual effective tax rate to year-to-date pretax Income or loss and adjusting for discrete tax items in the period. The differences between our GAAP and non-GAAP effective tax rates were primarily due to the net tax effects of the excluded items, coupled with larger pre-tax losses for GAAP purposes versus smaller pre-tax losses or Income for non-GAAP purposes.
LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES RECONCILIATION OF GAAP TO NON-GAAP INCOME (LOSS) FROM OPERATIONS (1) (Unaudited) (Dollars in thousands)For the Three Months Ended
For the Six Months Ended
September 30,
September 30,
2023
2022
2023
2022
Income (loss) from continuing operations8,208
(29,122
)
10,478
(54,724
)
Excluded items: Purchased intangible asset amortization (cost of revenue)1,217
4,637
4,507
9,280
Non-cash stock compensation (cost of revenue and operating expenses)
15,735
27,293
29,027
51,518
Transformation costs (general and administrative)
-
1,250
1,875
1,250
Restructuring charges (gains, losses, and other)
6,574
13,111
6,690
13,850
Total excluded items
23,526
46,291
42,099
75,898
Income from continuing operations before excluded items
31,734
17,169
52,577
21,174
(1) This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. For a detailed explanation of the adjustments made to comparable GAAP measures, the reasons why management uses these measures and the material limitations on the usefulness of these measures, please see Appendix A.
LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES RECONCILIATION OF ADJUSTED EBITDA (1) (Unaudited) (Dollars in thousands)For the Three Months Ended
For the Six Months Ended
September 30,
September 30,
2023
2022
2023
2022
Net earnings (loss) from continuing operations4,476
(30,436
)
2,890
(57,654
)
Income tax expense10,163
3,562
18,868
5,877
Other income
(6,431
)
(2,248
)
(11,280
)
(2,947
)
Income (loss) from operations8,208
(29,122
)
10,478
(54,724
)
Depreciation and amortization1,864
5,689
5,903
11,430
EBITDA
10,072
(23,433
)
16,381
(43,294
)
Other adjustments: Non-cash stock compensation (cost of revenue and operating expenses)15,735
27,293
29,027
51,518
Transformation costs (general and administrative)
-
1,250
1,875
1,250
Restructuring charges (gains, losses, and other)
6,574
13,111
6,690
13,850
Other adjustments
22,309
41,654
37,592
66,618
Adjusted EBITDA
32,381
18,221
53,973
23,324
(1) This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our condensed consolidated financial statements prepared in accordance with GAAP. For a detailed explanation of the adjustments made to comparable GAAP measures, the reasons why management uses these measures, the usefulness of these measures and the material limitations on the usefulness of these measures, please see Appendix A.
LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Dollars in thousands)September 30,
March 31,
$
%
2023
2023
Assets Current assets: Cash and cash equivalents
492,169
464,448
27,721
6.0
%
Short-term investments31,920
32,807
(887
)
(2.7
%)
Trade accounts receivable, net174,703
157,379
17,324
11.0
%
Refundable income taxes, net-
28,897
(28,897
)
(100.0
%)
Other current assets29,054
31,028
(1,974
)
(6.4
%)
Total current assets727,846
714,559
13,287
1.9
%
Property and equipment38,221
39,393
(1,172
)
(3.0
%)
Less - accumulated depreciation and amortization32,647
32,308
339
1.0
%
Property and equipment, net5,574
7,085
(1,511
)
(21.3
%)
Intangible assets, net5,361
9,868
(4,507
)
(45.7
%)
360,016
363,116
(3,100
)
(0.9
%)
Deferred commissions, net39,937
37,030
2,907
7.9
%
Other assets, net41,785
41,045
740
1.8
%
1,180,519
1,172,703
7,816
0.7
%
Liabilities and Stockholders' Equity Current liabilities: Trade accounts payable79,344
86,568
(7,224
)
(8.3
%)
Accrued payroll and related expenses35,331
33,434
1,897
5.7
%
Other accrued expenses37,133
35,736
1,397
3.9
%
Deferred revenue20,978
19,091
1,887
9.9
%
Income taxes payable13,911
-
13,911
n/a
Total current liabilities
186,697
174,829
11,868
6.8
%
Other liabilities71,964
71,798
166
0.2
%
Stockholders' equity: Preferred stock-
-
-
n/a
Common stock
15,473
15,399
74
0.5
%
Additional paid-in capital1,889,178
1,855,916
33,262
1.8
%
Retained earnings1,305,568
1,302,291
3,277
0.3
%
Accumulated other comprehensive income3,567
4,504
(937
)
(20.8
%)
Treasury stock, at cost(2,291,928
)
(2,252,034
)
(39,894
)
1.8
%
Total stockholders' equity921,858
926,076
(4,218
)
(0.5
%)
1,180,519
1,172,703
7,816
0.7
%
LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Dollars in thousands)
For the Three Months Ended
September 30,
2023
2022
Cash flows from operating activities: Net earnings (loss)4,863
(30,436
)
Earnings from discontinued operations, net of tax(387
)
Non-cash operating activities: Depreciation and amortization1,864
5,689
Gain on disposal or impairment of assets
(6
)
(192
)
Lease impairments2,315
12,225
Provision for doubtful accounts
(18
)
118
Impairment of goodwill
2,875
-
Deferred income taxes
40
31
Non-cash stock compensation expense
15,735
27,293
Changes in operating assets and liabilities: Accounts receivable
(1,867
)
(3,716
)
Deferred commissions(2,993
)
(551
)
Other assets735
4,608
Accounts payable and other liabilities
12,340
5,080
Income taxes
6,463
(618
)
Deferred revenue(6,195
)
1,844
Net cash provided by operating activities
35,764
21,375
Cash flows from investing activities: Capital expenditures
(200
)
(2,673
)
Purchases of investments(24,385
)
-
Proceeds from sale of investments
25,750
-
Purchases of strategic investments
(500
)
-
Proceeds from sale of strategic investment
-
400
Net cash provided by (used in) investing activities
665
(2,273
)
Cash flows from financing activities: Proceeds related to the issuance of common stock under stock and employee benefit plans2
2
Shares repurchased for tax withholdings upon vesting of stock-based awards
(677
)
(708
)
Acquisition of treasury stock(15,122
)
(40,038
)
Net cash used in financing activities(15,797
)
(40,744
)
Cash flows from discontinued operations: From operating activities387
-
Net cash provided by discontinued operations
387
-
Effect of exchange rate changes on cash
377
(1,010
)
Net change in cash and cash equivalents21,396
(22,652
)
Cash and cash equivalents at beginning of period470,773
508,254
Cash and cash equivalents at end of period
492,169
485,602
Supplemental cash flow information: Cash paid for income taxes, net - continuing operations
3,514
4,157
Cash (received) for income taxes, net - discontinued operations
(595
)
-
Cash paid for operating lease liabilities
2,689
1,105
Operating lease assets obtained in exchange for operating lease liabilities
1,112
-
Operating lease assets relinquished in exchange for operating lease liabilities
-
(6,781
)
Purchases of property, plant, equipment, net remaining unpaid at end of period211
187
LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Dollars in thousands)
For the Six Months Ended
September 30,
2023
2022
Cash flows from operating activities: Net earnings (loss)3,277
(57,654
)
Earnings from discontinued operations, net of tax(387
)
Non-cash operating activities: Depreciation and amortization5,903
11,430
Loss (gain) on disposal or impairment of assets
273
(197
)
Lease impairments2,344
12,225
Provision for doubtful accounts
(237
)
1,115
Impairment of goodwill
2,875
-
Deferred income taxes
87
218
Non-cash stock compensation expense
29,027
51,518
Changes in operating assets and liabilities: Accounts receivable
(16,258
)
(11,449
)
Deferred commissions(2,907
)
(920
)
Other assets5,743
8,960
Accounts payable and other liabilities
(12,885
)
(29,477
)
Income taxes43,699
1,513
Deferred revenue
903
724
Net cash provided by (used in) operating activities
61,457
(11,994
)
Cash flows from investing activities: Capital expenditures(253
)
(4,414
)
Purchases of investments(24,385
)
-
Proceeds from sales of investments
25,750
-
Purchases of strategic investments
(1,000
)
-
Proceeds from sales of strategic investments
-
400
Net cash provided by (used in) investing activities
112
(4,014
)
Cash flows from financing activities: Proceeds related to the issuance of common stock under stock and employee benefit plans5,575
4,591
Shares repurchased for tax withholdings upon vesting of stock-based awards
(4,569
)
(1,290
)
Acquisition of treasury stock(35,325
)
(100,091
)
Net cash used in financing activities(34,319
)
(96,790
)
Cash flows from discontinued operations: From operating activities387
-
Net cash provided by discontinued operations
387
-
Effect of exchange rate changes on cash
84
(1,762
)
Net change in cash and cash equivalents27,721
(114,560
)
Cash and cash equivalents at beginning of period464,448
600,162
Cash and cash equivalents at end of period
492,169
485,602
Supplemental cash flow information: Cash (received) paid for income taxes, net - continuing operations
(25,139
)
4,161
Cash (received) for income taxes, net - discontinued operations
(595
)
-
Cash paid for operating lease liabilities
5,148
3,261
Operating lease assets obtained in exchange for operating lease liabilities
11,677
-
Operating lease assets relinquished in exchange for operating lease liabilities
(4,486
)
(6,781
)
Purchases of property, plant, equipment, net remaining unpaid at end of period211
187
LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES CALCULATION OF FREE CASH FLOW TO EQUITY (1) (Unaudited) (Dollars in thousands) 06/30/22 09/30/22 12/31/22 03/31/23 FY2023 06/30/23 09/30/23 Net Cash Provided by (Used in) Operating Activities-Continuing Operations
(33,369
)
21,375
15,770
30,665
34,441
25,693
35,764
Less: Capital expenditures
(1,741
)
(2,673
)
(179
)
(103
)
(4,696
)
(53
)
(200
)
Free Cash Flow to Equity(35,110
)
18,702
15,591
30,562
29,745
25,640
35,564
(1) This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our condensed consolidated financial statements prepared in accordance with GAAP. For a detailed explanation of the adjustments made to comparable GAAP measures, the reasons why management uses these measures and the material limitations on the usefulness of these measures, please see Appendix A.
LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (Dollars in thousands, except per share amounts) FY24 to FY23 06/30/22 09/30/22 12/31/22 03/31/23 FY2023 06/30/23 09/30/23 FY2024 % $ Revenues142,243
147,099
158,615
148,626
596,583
154,069
159,871
313,940
8.7
%
12,772
Cost of revenue
41,021
42,304
43,287
43,472
170,084
45,621
41,212
86,833
(2.6
%)
(1,092
)
Gross profit101,222
104,795
115,328
105,154
426,499
108,448
118,659
227,107
13.2
%
13,864
% Gross margin
71.2
%
71.2
%
72.7
%
70.8
%
71.5
%
70.4
%
74.2
%
72.3
%
Operating expenses Research and development47,661
46,139
43,175
52,220
189,195
34,519
33,733
68,252
(26.9
%)
(12,406
)
Sales and marketing51,280
45,949
47,702
57,506
202,437
44,879
44,135
89,014
(3.9
%)
(1,814
)
General and administrative27,144
28,718
36,657
32,832
125,351
26,664
26,009
52,673
(9.4
%)
(2,709
)
Gains, losses and other items, net739
13,111
11,743
9,723
35,316
116
6,574
6,690
(49.9
%)
(6,537
)
Total operating expenses126,824
133,917
139,277
152,281
552,299
106,178
110,451
216,629
(17.5
%)
(23,466
)
Income (loss) from operations(25,602
)
(29,122
)
(23,949
)
(47,127
)
(125,800
)
2,270
8,208
10,478
128.2
%
37,330
% Margin
-18.0
%
-19.8
%
-15.1
%
-31.7
%
-21.1
%
1.5
%
5.1
%
3.3
%
Total other income (expense), net699
2,248
(736
)
4,735
6,946
4,849
6,431
11,280
186.1
%
4,183
Income (loss) from continuing operations before Income taxes
(24,903
)
(26,874
)
(24,685
)
(42,392
)
(118,854
)
7,119
14,639
21,758
154.5
%
41,513
Income taxes expense (benefit)
2,315
3,562
5,835
(6,460
)
5,252
8,705
10,163
18,868
185.3
%
6,601
Net loss from continuing operations
(27,218
)
(30,436
)
(30,520
)
(35,932
)
(124,106
)
(1,586
)
4,476
2,890
114.7
%
34,912
Earnings from discontinued operations, net of tax
-
-
836
4,568
5,404
-
387
387
n/a
387.00
Net earnings (loss)
(27,218
)
(30,436
)
(29,684
)
(31,364
)
(118,702
)
(1,586
)
4,863
3,277
116.0
%
35,299
Diluted earnings (loss) per share
(0.40
)
(0.45
)
(0.46
)
(0.48
)
(1.79
)
(0.02
)
0.07
0.05
n/a
0.53
Some earnings (loss) per share amounts may not add due to rounding. LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES RECONCILIATION OF GAAP TO NON-GAAP EXPENSES (1) (Unaudited) (Dollars in thousands) 06/30/22 09/30/22 12/31/22 03/31/23 FY2023 06/30/23 09/30/23 FY2024 Expenses, continuing operations: Cost of revenue
41,021
42,304
43,287
43,472
170,084
45,621
41,212
86,833
Research and development
47,661
46,139
43,175
52,220
189,195
34,519
33,733
68,252
Sales and marketing
51,280
45,949
47,702
57,506
202,437
44,879
44,135
89,014
General and administrative
27,144
28,718
36,657
32,832
125,351
26,664
26,009
52,673
Gains, losses and other items, net
739
13,111
11,743
9,723
35,316
116
6,574
6,690
Gross profit, continuing operations:
101,222
104,795
115,328
105,154
426,499
108,448
118,659
227,107
% Gross margin
71.2
%
71.2
%
72.7
%
70.8
%
71.5
%
70.4
%
74.2
%
72.3
%
Excluded items: Purchased intangible asset amortization (cost of revenue)4,643
4,637
4,209
3,336
16,825
3,290
1,217
4,507
Non-cash stock compensation (cost of revenue)
1,163
1,293
1,208
2,653
6,317
629
629
1,258
Non-cash stock compensation (research and development)
11,656
12,360
10,654
20,737
55,407
5,077
5,293
10,370
Non-cash stock compensation (sales and marketing)
5,884
6,116
5,871
11,558
29,429
3,736
4,786
8,522
Non-cash stock compensation (general and administrative)
5,522
7,524
11,891
9,710
34,647
3,850
5,027
8,877
Restructuring charges (gains, losses, and other)
739
13,111
11,743
9,723
35,316
116
6,574
6,690
Transformation costs (general and administrative)
-
1,250
4,112
3,663
9,025
1,875
-
1,875
Total excluded items
29,607
46,291
49,688
61,380
186,966
18,573
23,526
42,099
Expenses, continuing operations excluding items: Cost of revenue
35,215
36,374
37,870
37,483
146,942
41,702
39,366
81,068
Research and development
36,005
33,779
32,521
31,483
133,788
29,442
28,440
57,882
Sales and marketing
45,396
39,833
41,831
45,948
173,008
41,143
39,349
80,492
General and administrative
21,622
19,944
20,654
19,459
81,679
20,939
20,982
41,921
Gains, losses and other items, net
-
-
-
-
-
-
-
-
Gross profit, continuing operations excluding items:
107,028
110,725
120,745
111,143
449,641
112,367
120,505
232,872
% Gross margin
75.2
%
75.3
%
76.1
%
74.8
%
75.4
%
72.9
%
75.4
%
74.2
%
(1) This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. For a detailed explanation of the adjustments made to comparable GAAP measures, the reasons why management uses these measures, the usefulness of these measures and the material limitations on the usefulness of these measures, please see Appendix A.
LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES RECONCILIATION OF GAAP TO NON-GAAP EPS (1) (Unaudited) (Dollars in thousands, except per share amounts) 06/30/22 09/30/22 12/31/22 03/31/23 FY 2023 06/30/23 09/30/23 FY 2024 Income (loss) from continuing operations before Income taxes(24,903
)
(26,874
)
(24,685
)
(42,392
)
(118,854
)
7,119
14,639
21,758
Income taxes (benefit)2,315
3,562
5,835
(6,460
)
5,252
8,705
10,163
18,868
Net earnings (loss) from continuing operations(27,218
)
(30,436
)
(30,520
)
(35,932
)
(124,106
)
(1,586
)
4,476
2,890
Earnings from discontinued operations, net of tax-
-
836
4,568
5,404
-
387
387
Net earnings (loss)(27,218
)
(30,436
)
(29,684
)
(31,364
)
(118,702
)
(1,586
)
4,863
3,277
Earnings (loss) per share: Basic(0.40
)
(0.45
)
(0.46
)
(0.48
)
(1.79
)
(0.02
)
0.07
0.05
Diluted(0.40
)
(0.45
)
(0.46
)
(0.48
)
(1.79
)
(0.02
)
0.07
0.05
Excluded items: Purchased intangible asset amortization (cost of revenue)4,643
4,637
4,209
3,336
16,825
3,290
1,217
4,507
Non-cash stock compensation (cost of revenue and operating expenses)24,225
27,293
29,624
44,658
125,800
13,292
15,735
29,027
Restructuring charges (gains, losses, and other)739
13,111
11,743
9,723
35,316
116
6,574
6,690
Transformation costs (general and administrative)-
1,250
4,112
3,663
9,025
1,875
-
1,875
Total excluded items from continuing operations29,607
46,291
49,688
61,380
186,966
18,573
23,526
42,099
Income from continuing operations before Income taxes and excluding items4,704
19,417
25,003
18,988
68,112
25,692
38,165
63,857
Income taxes expense (benefit)1,237
4,557
6,468
(2,141
)
10,121
6,167
9,036
15,203
Non-GAAP net earnings from continuing operations3,467
14,860
18,535
21,129
57,991
19,525
29,129
48,654
Non-GAAP earnings per share from continuing operations: Basic0.05
0.22
0.29
0.32
0.87
0.29
0.44
0.73
Diluted0.05
0.22
0.28
0.32
0.86
0.29
0.43
0.72
Basic weighted average shares68,403
67,096
64,784
65,126
66,352
66,497
66,284
66,391
Diluted weighted average shares69,195
67,568
65,356
66,268
67,097
67,388
67,868
67,628
Some totals may not add due to rounding(1) This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. For a detailed explanation of the adjustments made to comparable GAAP measures, the reasons why management uses these measures and the material limitations on the usefulness of these measures, please see Appendix A.
LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES RECONCILIATION OF GAAP TO NON-GAAP OPERATING INCOME GUIDANCE (1) (Unaudited) (Dollars in thousands) For the quarter ending For the year ending December 31, 2023 March 31, 2024 Low High GAAP income from operations
8,000
8,000
11,000
Excluded items: Purchased intangible asset amortization
1,000
7,000
7,000
Non-cash stock compensation
18,000
69,000
69,000
Restructuring charges
2,000
11,000
11,000
Transformation costs
-
2,000
2,000
Total excluded items
21,000
89,000
89,000
Non-GAAP income from operations$
29,000
$
97,000
$
100,000
(1) This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our condensed consolidated financial statements prepared in accordance with GAAP. For a detailed explanation of the adjustments made to comparable GAAP measures, the reasons why management uses these measures, the usefulness of these measures and the material limitations on the usefulness of these measures, please see Appendix A.
APPENDIX A
LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
Q2 FISCAL 2024 FINANCIAL RESULTS
EXPLANATION OF NON-GAAP MEASURES AND OTHER KEY METRICS
To supplement our financial results, we use non-GAAP measures which exclude certain acquisition related expenses, non-cash stock compensation and restructuring charges. We believe these measures are helpful in understanding our past performance and our future results. Our non-GAAP financial measures and schedules are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read only in conjunction with our consolidated GAAP financial statements. Our management regularly uses these non-GAAP financial measures internally to understand, manage and evaluate our business and to make operating decisions. These measures are among the primary factors management uses in planning for and forecasting future periods. Compensation of our executives is also based in part on the performance of our business based on these non-GAAP measures.
Our non-GAAP financial measures, including non-GAAP earnings (loss) per share, income (loss) from operations and adjusted EBITDA reflect adjustments based on the following items, as well as the related income tax effects when applicable:
Purchased intangible asset amortization: We incur amortization of purchased intangibles in connection with our acquisitions. Purchased intangibles include (i) developed technology, (ii) customer and publisher relationships, and (iii) trade names. We expect to amortize for accounting purposes the fair value of the purchased intangibles based on the pattern in which the economic benefits of the intangible assets will be consumed as revenue is generated. Although the intangible assets generate revenue for us, we exclude this item because this expense is non-cash in nature and because we believe the non-GAAP financial measures excluding this item provide meaningful supplemental information regarding our operational performance.
Non-cash stock compensation: Non-cash stock compensation consists of charges for associate restricted stock units, performance shares and stock options in accordance with current GAAP related to stock-based compensation including expense associated with stock-based compensation related to unvested options assumed in connection with our acquisitions. As we apply stock-based compensation standards, we believe that it is useful to investors to understand the impact of the application of these standards to our operational performance. Although stock-based compensation expense is calculated in accordance with current GAAP and constitutes an ongoing and recurring expense, such expense is excluded from non-GAAP results because it is not an expense that typically requires or will require cash settlement by us and because such expense is not used by us to assess the core profitability of our business operations.
Restructuring charges: During the past several years, we have initiated certain restructuring activities in order to align our costs in connection with both our operating plans and our business strategies based on then-current economic conditions. As a result, we recognized costs related to termination benefits for employees whose positions were eliminated, lease and other contract termination charges, and asset impairments. These items, reported as gains, losses, and other items, net, are excluded from non-GAAP results because such amounts are not used by us to assess the core profitability of our business operations.
Transformation costs: In previous years, we incurred significant expenses to separate the financial statements of our operating segments, with particular focus on segment-level balance sheets, and to evaluate portfolio priorities. Our criteria for excluding transformation expenses from our non-GAAP measures is as follows: 1) projects are discrete in nature; 2) excluded expenses consist only of third-party consulting fees that we would not incur otherwise; and 3) we do not exclude employee related expenses or other costs associated with the ongoing operations of our business. We substantially completed those projects during the third quarter of fiscal year 2018. Beginning in the fourth quarter of fiscal 2018, and through most of fiscal 2019, we incurred transaction support expenses and system separation costs related to the Company's announced evaluation of strategic options for its Marketing Solutions (AMS) business. In the first and second quarters of fiscal 2021 in response to the potential COVID-19 pandemic impact on our business and again during fiscal 2023 in response to macroeconomic conditions, we incurred significant costs associated with the assessment of strategic and operating plans, including our long-term location strategy, and assistance in implementing the restructuring activities as a result of this assessment. Our criteria for excluding these costs are the same. We believe excluding these items from our non-GAAP financial measures is useful for investors and provides meaningful supplemental information.
Our non-GAAP financial schedules are:
Non-GAAP EPS, Non-GAAP Income from Operations, and Non-GAAP expenses: Our Non-GAAP earnings per share, Non-GAAP income from operations, and Non-GAAP expenses reflect adjustments as described above, as well as the related tax effects where applicable.
Adjusted EBITDA: Adjusted EBITDA is defined as net income from continuing operations before income taxes, other expenses, depreciation and amortization, and including adjustments as described above. We use Adjusted EBITDA to measure our performance from period to period both at the consolidated level as well as within our operating segments and to compare our results to those of our competitors. We believe that the inclusion of Adjusted EBITDA provides useful supplementary information to and facilitates analysis by investors in evaluating the Company's performance and trends. The presentation of Adjusted EBITDA is not meant to be considered in isolation or as an alternative to net earnings as an indicator of our performance.
Free Cash Flow to Equity: To supplement our statement of cash flows, we use a non-GAAP measure of cash flow to analyze cash flows generated from operations. Free cash flow to equity is defined as operating cash flow less cash used by investing activities (excluding the impact of cash paid in acquisitions), less required payments of debt, and excluding the impact of discontinued operations. Management believes that this measure of cash flow is meaningful since it represents the amount of money available from continuing operations for the Company's discretionary spending after funding all required obligations including scheduled debt payments. The presentation of non-GAAP free cash flow to equity is not meant to be considered in isolation or as an alternative to cash flows from operating activities as a measure of liquidity.
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