LiveRamp Announces Strong Third Quarter Results and Raises Full Year Outlook
LiveRamp® (NYSE: RAMP), the leading global data connectivity platform, today announced its financial results for the quarter ended December 31, 2021.
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Third Quarter Financial Highlights
Total revenue was $141 million, up 17% compared to the prior year period. Subscription revenue was $111 million, up 19% compared to the prior year period and contributed 79% of total revenue. Marketplace & Other revenue was $29 million, up 12% compared to the prior year period. GAAP gross profit was $102 million, up 23% compared to the prior year period. GAAP gross margin of 73% expanded 4 percentage points. Non-GAAP gross profit was $108 million, up 23% compared to the prior year period. Non-GAAP gross margin of 77% expanded 3 percentage points. GAAP operating loss was $14 million compared to a GAAP operating loss of $16 million in the prior year period. Non-GAAP operating income was $15 million compared to non-GAAP operating income of $12 million in the prior year period. GAAP loss per share was $0.23, and non-GAAP earnings per share were $0.14. Net cash provided by operating activities was $25 million compared to $15 million in the prior year period. During the quarter, LiveRamp repurchased approximately 115,000 shares for $5 million under the Company’s current share repurchase program. Since inception of the program in August 2011, the Company has returned approximately $1.2 billion in capital to shareholders.A reconciliation between GAAP and non-GAAP results is provided in the schedules to this press release.
“LiveRamp is fast becoming critical data infrastructure for global brands,” said LiveRamp CEO Scott Howe. “Adoption of Safe Haven®, our enterprise platform, is accelerating. We ended the quarter with 86 million dollar plus customers and approximately 20% of our ARR is now driven by Safe Haven®.”
“Our operating trends remain strong,” added LiveRamp President and CFO Warren Jenson. “Our revenue growth was robust, gross margin was 77%, ahead of our stated long-term target, and we were profitable on a non-GAAP operating income basis for the seventh quarter in a row. In addition, we expect to be operating cash flow positive for fiscal 2022.”
GAAP and Non-GAAP Results
The following table summarizes the Company’s financial results for its third fiscal quarter ($ in millions):
Q3 Fiscal 2022
Q3 Fiscal 2021
Results
Results
GAAP
Non-GAAP
GAAP
Non-GAAP
Subscription revenue
$111
—
$93
—
YoY change %
19%
15%
Marketplace & other revenue
$29
—
$26
—
YoY change %
12%
27%
Total revenue
$141
—
$120
—
YoY change %
17%
17%
Gross profit
$102
$108
$83
$88
% Gross margin
73%
77%
69%
73%
YoY change, pts
4 pts
3 pts
6 pts
4 pts
Operating income (loss)
($14)
$15
($16)
$12
% Operating margin
(10%)
10%
(13%)
10%
YoY change, pts
3 pts
—
27 pts
15 pts
Net earnings (loss)
($15)
$10
($12)
$10
Earnings (loss) per share
($0.23)
$0.14
($0.18)
$0.14
Shares to Calculate EPS
68.2
69.9
66.5
69.8
YoY change %
3%
0%
(1%)
0%
Net operating cash flow
$25
—
$15
—
Free cash flow to equity
—
$24
—
$14
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.
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. During the third quarter, LiveRamp extended its global reach and announced the integration of ATS into Amazon Publisher Services (APS). Thousands of publishers using APS now have a better way to connect authenticated inventory to advertiser demand globally. To date, over 500 publishers, representing more than 11,000 deployed domains, have integrated ATS worldwide, including Amazon, Microsoft, CafeMedia, Leaf Group, Prisma Media and Burda. Through these integrations, LiveRamp is now connected to over 70% of time spent online in the U.S. Safe Haven® now serves more than 60% of big box retail in the U.S. and is the clear enterprise choice for enabling the global growth of retail media networks and data collaboration. In the quarter, LiveRamp entered into a new Safe Haven® agreement with JD.com, the second largest ecommerce platform in the world. LiveRamp added 20 net new direct subscription customers in the third quarter. Customer count at quarter end was 890, up from 810 a year ago. LiveRamp has 86 customers whose subscription contracts exceed $1 million in annual revenue, up 32% compared to the prior year period. During the third quarter, subscription net retention was 110% 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 $289 million, up 25% 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 fourth quarter of fiscal 2022, LiveRamp expects to report:
Revenue of approximately $139 million, an increase of 17% year-over-year GAAP operating loss of approximately $31 million Non-GAAP operating income of approximately $2 millionFor fiscal 2022, LiveRamp has increased its outlook and now expects to report:
Revenue of approximately $526 million, an increase of 19% year-over-year GAAP operating loss of approximately $69 million Non-GAAP operating income of approximately $41 million In addition, the Company expects to be operating cash flow positive for the yearConference 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 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 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 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.
LiveRampⓇ, RampID™, 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.
LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except per share amounts)
For the Three Months Ended
December 31,
$
%
2021
2020
Variance
Variance
Revenues140,604
119,753
20,851
17.4
%
Cost of revenue38,557
37,085
1,472
4.0
%
Gross profit102,047
82,668
19,379
23.4
%
% Gross margin72.6
%
69.0
%
Operating expenses: Research and development41,870
30,608
11,262
36.8
%
Sales and marketing46,324
43,904
2,420
5.5
%
General and administrative27,639
23,943
3,696
15.4
%
Gains, losses and other items, net-
(6
)
6
100.0
%
Total operating expenses115,833
98,449
17,384
17.7
%
Loss from operations(13,786
)
(15,781
)
1,995
12.6
%
% Margin-9.8
%
-13.2
%
Total other expense, net(241
)
(86
)
(155
)
(180.2
%)
Loss before income taxes(14,027
)
(15,867
)
1,840
11.6
%
Income tax expense (benefit)1,348
(4,142
)
5,490
132.5
%
Net loss(15,375
)
(11,725
)
(3,650
)
(31.1
%)
Basic loss per share(0.23
)
(0.18
)
(0.05
)
(27.9
%)
Diluted loss per share:(0.23
)
(0.18
)
(0.05
)
(27.9
%)
Basic weighted average shares68,190
66,523
Diluted weighted average shares
68,190
66,523
LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except per share amounts)
For the Nine Months Ended
December 31,
$
%
2021
2020
Variance
Variance
Revenues386,932
323,851
63,081
19.5
%
Cost of revenue107,951
106,447
1,504
1.4
%
Gross profit278,981
217,404
61,577
28.3
%
% Gross margin72.1
%
67.1
%
Operating expenses: Research and development112,434
88,632
23,802
26.9
%
Sales and marketing127,812
124,236
3,576
2.9
%
General and administrative75,008
71,806
3,202
4.5
%
Gains, losses and other items, net1,296
1,370
(74
)
(5.4
%)
Total operating expenses316,550
286,044
30,506
10.7
%
Loss from operations(37,569
)
(68,640
)
31,071
45.3
%
% Margin-9.7
%
-21.2
%
Total other income, net30,510
152
30,358
n/a
Loss before income taxes
(7,059
)
(68,488
)
61,429
89.7
%
Income tax benefit(2,618
)
(11,067
)
8,449
76.3
%
Net loss(4,441
)
(57,421
)
52,980
92.3
%
Basic loss per share(0.07
)
(0.87
)
0.80
92.5
%
Diluted loss per share:(0.07
)
(0.87
)
0.80
92.5
%
Basic weighted average shares68,187
66,034
Diluted weighted average shares
68,187
66,034
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 Nine Months Ended
December 31,
December 31,
2021
2020
2021
2020
Loss before income taxes(14,027
)
(15,867
)
(7,059
)
(68,488
)
Income tax expense (benefit)1,348
(4,142
)
(2,618
)
(11,067
)
Net loss(15,375
)
(11,725
)
(4,441
)
(57,421
)
Loss per share: Basic(0.23
)
(0.18
)
(0.07
)
(0.87
)
Diluted(0.23
)
(0.18
)
(0.07
)
(0.87
)
Excluded items: Purchased intangible asset amortization (cost of revenue)4,647
4,213
13,904
13,869
Non-cash stock compensation (cost of revenue and operating expenses)
23,758
23,894
61,475
64,583
Transformation costs (general and administrative)
-
-
-
3,863
Restructuring and merger charges (gains, losses, and other)
-
(6
)
1,296
1,370
Gain on retained profits interest (other income)
(183
)
-
(30,235
)
-
Total excluded items
28,222
28,101
46,440
83,685
Income before income taxes and excluding items
14,195
12,234
39,381
15,197
Income taxes (2)
4,271
2,347
5,124
1,990
Non-GAAP net earnings
9,924
9,887
34,257
13,207
Non-GAAP earnings per share: Basic
0.15
0.15
0.50
0.20
Diluted
0.14
0.14
0.49
0.19
Basic weighted average shares
68,190
66,523
68,187
66,034
Diluted weighted average shares
69,938
69,775
69,626
68,639
(1)
This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our condensed consolidated financial statements prepared in accordance with GAAP. For a detailed explanation of the adjustments made to comparable GAAP measures, the reasons why management uses these measures and the material limitations on the usefulness of these measures, please see Appendix A.
(2)
Income taxes were calculated by applying the estimated annual effective tax rate to year-to-date pretax income or loss and adjusting for discrete tax items in the period. The differences between our GAAP and non-GAAP effective tax rates were primarily due to the net tax effects of the excluded items, coupled with larger pre-tax losses for GAAP purposes versus smaller pre-tax losses or income for non-GAAP purposes.
LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP INCOME (LOSS) FROM OPERATIONS (1)
(Unaudited)
(Dollars in thousands)
For the Three Months Ended
For the Nine Months Ended
December 31,
December 31,
2021
2020
2021
2020
Loss from operations(13,786
)
(15,781
)
(37,569
)
(68,640
)
Excluded items: Purchased intangible asset amortization (cost of revenue)4,647
4,213
13,904
13,869
Non-cash stock compensation (cost of revenue and operating expenses)
23,758
23,894
61,475
64,583
Transformation costs (general and administrative)
-
-
-
3,863
Restructuring and merger charges (gains, losses, and other)
-
(6
)
1,296
1,370
Total excluded items
28,405
28,101
76,675
83,685
Income from operations before excluded items
14,619
12,320
39,106
15,045
(1)
This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our condensed consolidated financial statements prepared in accordance with GAAP. For a detailed explanation of the adjustments made to comparable GAAP measures, the reasons why management uses these measures and the material limitations on the usefulness of these measures, please see Appendix A.
LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES RECONCILIATION OF ADJUSTED EBITDA (1) (Unaudited) (Dollars in thousands)For the Three Months Ended
For the Nine Months Ended
December 31,
December 31,
2021
2020
2021
2020
Net loss(15,375
)
(11,725
)
(4,441
)
(57,421
)
Income tax expense (benefit)1,348
(4,142
)
(2,618
)
(11,067
)
Total other income (expense), net(241
)
(86
)
30,510
152
Loss from operations
(13,786
)
(15,781
)
(37,569
)
(68,640
)
Depreciation and amortization5,827
6,509
18,231
21,464
EBITDA
(7,959
)
(9,272
)
(19,338
)
(47,176
)
Other adjustments: Non-cash stock compensation (cost of revenue and operating expenses)23,758
23,894
61,475
64,583
Transformation costs (general and administrative)
-
-
-
3,863
Restructuring and merger charges (gains, losses, and other)
-
(6
)
1,296
1,370
Other adjustments
23,758
23,888
62,771
69,816
Adjusted EBITDA
15,799
14,616
43,433
22,640
(1)
This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our 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)
December 31,
March 31,
$
%
2021
2021
Variance
Variance
Assets Current assets: Cash and cash equivalents552,959
572,787
(19,828
)
(3.5
%)
Restricted cash8,731
8,900
(169
)
(1.9
%)
Trade accounts receivable, net156,827
114,284
42,543
37.2
%
Refundable income taxes62,679
65,692
(3,013
)
(4.6
%)
Other current assets40,584
64,052
(23,468
)
(36.6
%)
Total current assets821,780
825,715
(3,935
)
(0.5
%)
Property and equipment46,666
44,284
2,382
5.4
%
Less - accumulated depreciation and amortization36,080
32,327
3,753
11.6
%
Property and equipment, net10,586
11,957
(1,371
)
(11.5
%)
Intangible assets, net31,536
39,730
(8,194
)
(20.6
%)
Goodwill363,789
357,446
6,343
1.8
%
Deferred commissions, net29,483
22,619
6,864
30.3
%
Other assets, net85,361
30,854
54,507
176.7
%
1,342,535
1,288,321
54,214
4.2
%
Liabilities and Stockholders' Equity Current liabilities: Trade accounts payable71,655
39,955
31,700
79.3
%
Accrued payroll and related expenses32,496
46,438
(13,942
)
(30.0
%)
Other accrued expenses56,221
58,353
(2,132
)
(3.7
%)
Acquisition escrow payable8,731
8,900
(169.00
)
(1.9
%)
Deferred revenue14,933
11,603
3,330
28.7
%
Total current liabilities184,036
165,249
18,787
11.4
%
Other liabilities88,085
42,389
45,696
107.8
%
Stockholders' equity: Preferred stock-
-
-
n/a
Common stock
14,925
14,781
144
1.0
%
Additional paid-in capital1,689,172
1,630,072
59,100
3.6
%
Retained earnings1,450,385
1,454,826
(4,441
)
(0.3
%)
Accumulated other comprehensive income5,890
7,522
(1,632
)
(21.7
%)
Treasury stock, at cost(2,089,958
)
(2,026,518
)
(63,440
)
(3.1
%)
Total stockholders' equity1,070,414
1,080,683
(10,269
)
(1.0
%)
1,342,535
1,288,321
54,214
4.2
%
LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
For the Three Months Ended
December 31,
2021
2020
Cash flows from operating activities: Net loss(15,375
)
(11,725
)
Non-cash operating activities: Depreciation and amortization5,827
6,509
Loss on disposal or impairment of assets
-
1
Gain on distribution from retained profits interest
(183
)
-
Provision for doubtful accounts
1,845
824
Deferred income taxes
315
485
Non-cash stock compensation expense
23,758
23,894
Changes in operating assets and liabilities: Accounts receivable
(27,803
)
(17,062
)
Deferred commissions(1,495
)
(1,637
)
Other assets(1,331
)
(192
)
Accounts payable and other liabilities34,358
13,824
Income taxes
1,630
(5,399
)
Deferred revenue3,927
5,168
Net cash provided by operating activities
25,473
14,690
Cash flows from investing activities: Capital expenditures
(1,316
)
(678
)
Purchases of investments-
(3,000
)
Purchases of strategic investments-
(327
)
Distribution from retained profits interest184
-
Cash paid in acquisition, net of cash received
(2,008
)
(14,815
)
Net cash used in investing activities(3,140
)
(18,820
)
Cash flows from financing activities: Proceeds related to the issuance of common stock under stock and employee benefit plans1,905
5,115
Shares repurchased for tax withholdings upon vesting of stock-based awards
(1,674
)
(3,627
)
Acquisition of treasury stock(5,147
)
-
Net cash provided by (used in) financing activities
(4,916
)
1,488
Effect of exchange rate changes on cash
(48
)
537
Net change in cash and cash equivalents
17,369
(2,105
)
Cash and cash equivalents at beginning of period544,321
665,506
Cash and cash equivalents at end of period
561,690
663,401
Supplemental cash flow information: Cash (received) during the period for: Income taxes
(246
)
(771
)
Operating lease assets obtained in exchange for operating lease liabilities17,211
-
LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
For the Nine Months Ended
December 31,
2021
2020
Cash flows from operating activities: Net loss(4,441
)
(57,421
)
Non-cash operating activities: Depreciation and amortization18,231
21,464
Loss on disposal or impairment of assets
142
334
Gain on distribution from retained profits interest
(30,235
)
-
Provision for doubtful accounts
3,127
3,346
Deferred income taxes
(456
)
-
Non-cash stock compensation expense
61,475
64,583
Changes in operating assets and liabilities: Accounts receivable
(45,876
)
(26,646
)
Deferred commissions(6,864
)
(5,082
)
Other assets22,077
7,511
Accounts payable and other liabilities
(2,471
)
(6,847
)
Income taxes998
(8,982
)
Deferred revenue3,426
5,067
Net cash provided by (used in) operating activities
19,133
(2,673
)
Cash flows from investing activities: Capital expenditures(2,619
)
(1,806
)
Purchases of investments-
(3,000
)
Purchases of strategic investments-
(2,200
)
Distribution from retained profits interest31,184
-
Cash paid in acquisition, net of cash received
(10,376
)
(17,748
)
Net cash provided by (used in) investing activities18,189
(24,754
)
Cash flows from financing activities: Proceeds related to the issuance of common stock under stock and employee benefit plans6,183
8,676
Shares repurchased for tax withholdings upon vesting of stock-based awards
(14,216
)
(9,382
)
Acquisition of treasury stock(49,224
)
(42,312
)
Net cash used in financing activities(57,257
)
(43,018
)
Effect of exchange rate changes on cash(62
)
1,220
Net change in cash and cash equivalents
(19,997
)
(69,225
)
Cash and cash equivalents at beginning of period581,687
732,626
Cash and cash equivalents at end of period
561,690
663,401
Supplemental cash flow information: Cash (received) during the period for: Income taxes
(2,815
)
(2,092
)
Operating lease assets obtained in exchange for operating lease liabilities52,902
-
LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
CALCULATION OF FREE CASH FLOW TO EQUITY (1)
(Unaudited)
(Dollars in thousands)
06/30/20
09/30/20
12/31/20
03/31/21
FY2021
06/30/21
09/30/21
12/31/21
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
19,133
Less: Capital expenditures
(832
)
(296
)
(678
)
(376
)
(2,182
)
(427
)
(876
)
(1,316
)
(2,619
)
Free Cash Flow to Equity(24,444
)
5,953
14,012
(18,263
)
(22,742
)
(17,668
)
10,025
24,157
16,514
(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)
Q3 FY22 to Q3 FY21
06/30/20
09/30/20
12/31/20
03/31/21
FY2021
06/30/21
09/30/21
12/31/21
FY2022
%
$
Revenues99,437
104,661
119,753
119,175
443,026
119,038
127,290
140,604
386,932
19.9
%
20,851
Cost of revenue
34,465
34,897
37,085
37,557
144,004
34,315
35,079
38,557
107,951
4.2
%
1,472
Gross profit
64,972
69,764
82,668
81,618
299,022
84,723
92,211
102,047
278,981
27.8
%
19,379
% Gross margin
65.3
%
66.7
%
69.0
%
68.5
%
67.5
%
71.2
%
72.4
%
72.6
%
72.1
%
Operating expenses Research and development26,989
31,035
30,608
46,479
135,111
34,776
35,788
41,870
112,434
36.3
%
11,262
Sales and marketing
38,627
41,705
43,904
53,307
177,543
41,979
39,509
46,324
127,812
5.8
%
2,420
General and administrative
23,368
24,495
23,943
32,395
104,201
24,291
23,078
27,639
75,008
15.1
%
3,696
Gains, losses and other items, net
1,995
(619
)
(6
)
1,345
2,715
1,278
18
-
1,296
1.0
%
6
Total operating expenses
90,979
96,616
98,449
133,526
419,570
102,324
98,393
115,833
316,550
18.0
%
17,384
Loss from operations
(26,007
)
(26,852
)
(15,781
)
(51,908
)
(120,548
)
(17,601
)
(6,182
)
(13,786
)
(37,569
)
7.4
%
1,995
% Margin
-26.2
%
-25.7
%
-13.2
%
-43.6
%
-27.2
%
-14.8
%
-4.9
%
-9.8
%
-9.7
%
Total other income (expense), net463
(225
)
(86
)
(404
)
(252
)
30,601
150
(241
)
30,510
(68.9
%)
(155
)
Loss before income taxes(25,544
)
(27,077
)
(15,867
)
(52,312
)
(120,800
)
13,000
(6,032
)
(14,027
)
(7,059
)
6.8
%
1,840
Income taxes expense (benefit)
(3,816
)
(3,109
)
(4,142
)
(19,465
)
(30,532
)
(4,365
)
399
1,348
(2,618
)
176.6
%
5,490
Net earnings (loss)
(21,728
)
(23,968
)
(11,725
)
(32,847
)
(90,268
)
17,365
(6,431
)
(15,375
)
(4,441
)
(15.2
%)
(3,650
)
Diluted earnings (loss) per share(0.33
)
(0.36
)
(0.18
)
(0.49
)
(1.36
)
0.25
(0.09
)
(0.23
)
(0.07
)
(13.6
%)
(0.05
)
Some earnings (loss) per share amounts may not add due to rounding. Basic shares65,570
66,010
66,523
67,111
66,304
68,328
68,042
68,190
68,187
Diluted shares
65,570
66,010
66,523
67,111
66,304
69,605
69,333
69,938
69,626
LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP EPS (1)
(Unaudited)
(Dollars in thousands, except per share amounts)
06/30/20
09/30/20
12/31/20
03/31/21
FY2021
06/30/21
09/30/21
12/31/21
FY 2022
Income (loss) before income taxes(25,544
)
(27,077
)
(15,867
)
(52,312
)
(120,800
)
13,000
(6,032
)
(14,027
)
(7,059
)
Income taxes (benefit)(3,816
)
(3,109
)
(4,142
)
(19,465
)
(30,532
)
(4,365
)
399
1,348
(2,618
)
Net earnings (loss)(21,728
)
(23,968
)
(11,725
)
(32,847
)
(90,268
)
17,365
(6,431
)
(15,375
)
(4,441
)
Earnings (loss) per share: Basic(0.33
)
(0.36
)
(0.18
)
(0.49
)
(1.36
)
0.25
(0.09
)
(0.23
)
(0.07
)
Diluted(0.33
)
(0.36
)
(0.18
)
(0.49
)
(1.36
)
0.25
(0.09
)
(0.23
)
(0.07
)
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
13,904
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
61,475
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
)
-
(183
)
(30,235
)
Total excluded items27,391
28,193
28,101
52,646
136,331
(5,633
)
23,851
28,222
46,440
Income before income taxes and excluding items
1,847
1,116
12,234
334
15,531
7,367
17,819
14,195
39,381
Income taxes expense (benefit)
934
(1,291
)
2,347
(2,628
)
(638
)
865
(12
)
4,271
5,124
Non-GAAP net earnings
913
2,407
9,887
2,962
16,169
6,502
17,831
9,924
34,257
Non-GAAP earnings per share: Basic
0.01
0.04
0.15
0.04
0.24
0.10
0.26
0.15
0.50
Diluted
0.01
0.03
0.14
0.04
0.23
0.09
0.26
0.14
0.49
Basic weighted average shares
65,570
66,010
66,523
67,111
66,304
68,328
68,042
68,190
68,187
Diluted weighted average shares
67,337
68,804
69,775
69,935
68,963
69,605
69,333
69,938
69,626
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.
LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP EXPENSES (1)
(Unaudited)
(Dollars in thousands)
06/30/20
09/30/20
12/31/20
03/31/21
FY2021
06/30/21
09/30/21
12/31/21
FY2022
Expenses: Cost of revenue34,465
34,897
37,085
37,557
144,004
34,315
35,079
38,557
107,951
Research and development
26,989
31,035
30,608
46,479
135,111
34,776
35,788
41,870
112,434
Sales and marketing
38,627
41,705
43,904
53,307
177,543
41,979
39,509
46,324
127,812
General and administrative
23,368
24,495
23,943
32,395
104,201
24,291
23,078
27,639
75,008
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
102,047
278,981
% 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
13,904
Non-cash stock compensation (cost of revenue)
775
913
988
2,624
5,300
790
948
1,168
2,906
Non-cash stock compensation (research and development)
5,886
7,713
7,376
17,985
38,960
5,348
7,184
9,264
21,796
Non-cash stock compensation (sales and marketing)
7,123
9,233
9,212
14,833
40,401
6,793
6,749
7,329
20,871
Non-cash stock compensation (general and administrative)
2,701
6,345
6,318
11,682
27,046
5,565
4,340
5,997
15,902
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
)
-
(183
)
(30,235
)
Total excluded items27,391
28,193
28,101
52,646
136,331
(5,633
)
23,851
28,222
46,440
Expenses, excluding items: Cost of revenue
28,384
29,634
31,884
30,756
120,658
28,880
29,519
32,742
91,141
Research and development
21,103
23,322
23,232
28,494
96,151
29,428
28,604
32,606
90,638
Sales and marketing
31,504
32,472
34,692
38,474
137,142
35,186
32,760
38,995
106,941
General and administrative
17,062
17,892
17,625
20,713
73,292
18,726
18,738
21,642
59,106
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
295,791
% 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.
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
March 31, 2022
March 31, 2022
GAAP loss from operations
(31,000
)
(69,000
)
Excluded items: Purchased intangible asset amortization
5,000
19,000
Non-cash stock compensation
28,000
90,000
Restructuring and transformation costs
-
1,000
Total excluded items
33,000
110,000
Non-GAAP income from operations
$
2,000
$
41,000
(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
Q3 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 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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