LiveRamp Announces Third Quarter Results
LiveRamp® (NYSE: RAMP), the leading data collaboration platform, today announced its financial results for the fiscal 2024 third quarter ended December 31, 2023.
This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20240208650365/en/
Q3 Financial Highlights1
Total revenue was $174 million, up 10%. Subscription revenue was $132 million, up 5%. Marketplace Other revenue was $42 million, up 29%. GAAP gross profit was $129 million, up 12%. GAAP gross margin of 74% expanded by 1 percentage point. Non-GAAP gross profit was $131 million, up 8%. Non-GAAP gross margin of 75% contracted by 1 percentage point. GAAP operating income was $15 million compared to a loss of $24 million. GAAP operating margin was 9% compared to negative 15%. Non-GAAP operating income was $36 million compared to $26 million. Non-GAAP operating margin of 21% expanded by 5 percentage points. GAAP diluted earnings per share was $0.21 and non-GAAP diluted earnings per share was $0.47. Net cash provided by operating activities was $17 million compared to $16 million. Share repurchases in the third quarter totaled approximately 347,000 shares for $10 million, bringing the fiscal year-to-date total to 1.7 million shares for $45 million.A reconciliation between GAAP and non-GAAP results is provided in the schedules to this press release.
"We outperformed again this quarter, with revenue and operating income ahead of our expectations,” said LiveRamp CEO Scott Howe. “Our forward sales momentum also continued in the quarter, including another strong new logo quarter, demonstrating healthy customer demand and good sales execution. We are moving quickly to integrate the recently closed Habu acquisition, and the initial customer response reinforces our confidence in the power of this combination.”
__________________________ 1Unless otherwise indicated, all comparisons are to the prior year period.GAAP and Non-GAAP Results
The following table summarizes the Company’s financial results for the fiscal 2024 third quarter ended December 31, 2023 ($ in millions, except per share amounts):
GAAP
Non-GAAP
Q3 FY24
Q3 FY23
Q3 FY24
Q3 FY23
Subscription revenue
$132
$126
—
—
YoY change %
5%
14%
—
—
Marketplace Other revenue
$42
$32
—
—
YoY change %
29%
9%
—
—
Total revenue
$174
$159
—
—
YoY change %
10%
13%
—
—
Gross profit
$129
$115
$131
$121
% Gross margin
74%
73%
75%
76%
YoY change, pts
1 pt
0 pts
(1 pt)
(1 pt)
Operating income (loss)
$15
($24)
$36
$26
% Operating margin
9%
(15%)
21%
16%
YoY change, pts
24 pts
(5 pts)
5 pts
6 pts
Net earnings (loss)
$14
($30)
$32
$19
Diluted earnings (loss) per share
$0.21
($0.46)
$0.47
$0.28
Shares to calculate diluted EPS
67.9
64.8
67.9
65.4
YoY change %
5%
(5%)
4%
(7%)
Net operating cash flow
$17
$16
—
—
Free cash flow to equity
—
—
$14
$16
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
On January 31, 2024, we closed the acquisition of Habu, a leading data clean room software provider. The acquisition will further accelerate LiveRamp’s ability to offer global data collaboration at scale, across all clouds and walled gardens, unlocking powerful measurement and analytics use cases that will bolster our growth and create value for shareholders (additional information). During the quarter we announced the promotion of four senior leaders to accelerate our recent momentum: Lauren Dillard to Chief Financial Officer, Vihan Sharma to Chief Revenue Officer, Kimberly Bloomston to Chief Product Officer, and Travis Clinger to Chief Connectivity Ecosystem Officer (additional information here and here). In November 2023 we were selected as a 2023 Amazon Web Services (AWS) Global Industry Partner of the Year for playing a key role helping customers drive innovation and build solutions on AWS (additional information). Similarly, in August 2023 we were selected as a 2023 Google Cloud Platform (GCP) Partner of the Year. In January 2024 Google deprecated third-party cookies for 1% of Chrome users globally – the next milestone in Google’s previously announced plan to phase out third-party cookies for all Chrome users globally in the second half of 2024. LiveRamp’s Authenticated Traffic Solution (ATS) for global addressability is a fully scaled solution to help marketers deal with third-party cookie deprecation by connecting publisher and marketer data to better personalize and measure advertising on authenticated inventory. 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 18,000 publisher domains and 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. LiveRamp ended the quarter with 105 customers whose subscription contracts exceed $1 million in annual revenue, compared to 94 in the prior year period. LiveRamp ended the quarter with 895 direct subscription customers, compared to 910 in the prior year period. Third quarter subscription net retention was 101% and platform net retention was 105%. Current remaining performance obligations (CRPO), which is contracted and committed revenue expected to be recognized over the next 12 months, was $382 million, up 18% 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 fourth quarter of fiscal 2024, LiveRamp expects to report:
Revenue of between $158 million and $162 million, an increase of between 6% and 9% GAAP operating loss of between $18 million and $17 million Non-GAAP operating income of between $13 million and $14 millionFor fiscal 2024, LiveRamp updates its guidance and expects to report:
Revenue of between $646 million and $650 million, an increase of between 8% and 9% GAAP operating income of between $8 million and $9 million Non-GAAP operating income of between $102 million and $103 millionConference Call
LiveRamp will hold a conference call today at 1:30 p.m. PT (4:30 p.m. ET) to further discuss this information. Interested parties are invited to listen to a webcast of the conference, which can be accessed on LiveRamp’s investor site. A slide presentation will be referenced during the call and is available here.
RampUp 2024 Conference
RampUp is the Company’s annual customer and partner conference that brings together leaders across marketing, media, technology and more to discuss data collaboration. This year’s conference is being held on February 27-29 in San Francisco. For additional information please visit the RampUp 2024 website. Members of the financial community who are interested in attending, please contact investor relations.
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, the integration and expected benefits from the acquisition of Habu, 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; the risk that we fail to realize the potential benefits of or have difficulty integrating Habu; 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 December 31, $ %2023
2022
Revenues173,869
158,615
15,254
9.6
%
Cost of revenue44,934
43,287
1,647
3.8
%
Gross profit128,935
115,328
13,607
11.8
%
% Gross margin74.2
%
72.7
%
Operating expenses: Research and development37,788
43,175
(5,387
)
(12.5
%)
Sales and marketing46,203
47,702
(1,499
)
(3.1
%)
General and administrative27,241
36,657
(9,416
)
(25.7
%)
Gains, losses and other items, net2,502
11,743
(9,241
)
(78.7
%)
Total operating expenses113,734
139,277
(25,543
)
(18.3
%)
Income (loss) from operations15,201
(23,949
)
39,150
163.5
%
%8.7
%
-15.1
%
Total other income (expense), net6,607
(736
)
7,343
997.7
%
Income (loss) from continuing operations before Income taxes21,808
(24,685
)
46,493
188.3
%
Income tax expense8,429
5,835
2,594
44.5
%
Net earnings (loss) from continuing operations13,379
(30,520
)
43,899
143.8
%
Earnings from discontinued operations, net of tax598
836
(238
)
(28.5
%)
Net earnings (loss)13,977
(29,684
)
43,661
147.1
%
Basic earnings (loss) per share: Continuing operations0.20
(0.47
)
0.67
143.1
%
Discontinued operations0.01
0.01
(0.00
)
n/a
Basic earnings (loss) per share
0.21
(0.46
)
0.67
146.2
%
Diluted earnings (loss) per share: Continuing operations0.20
(0.47
)
0.67
141.8
%
Discontinued operations0.01
0.01
(0.00
)
n/a
Diluted earnings (loss) per share:
0.21
(0.46
)
0.66
144.9
%
Basic weighted average shares65,961
64,784
Diluted weighted average shares
67,943
64,784
Some totals may not sum due to rounding. 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, $ %
2023
2022
Revenues487,809
447,957
39,852
8.9
%
Cost of revenue131,767
126,612
5,155
4.1
%
Gross profit356,042
321,345
34,697
10.8
%
% Gross margin73.0
%
71.7
%
Operating expenses: Research and development106,040
136,975
(30,935
)
(22.6
%)
Sales and marketing135,217
144,931
(9,714
)
(6.7
%)
General and administrative79,914
92,519
(12,605
)
(13.6
%)
Gains, losses and other items, net9,192
25,593
(16,401
)
(64.1
%)
Total operating expenses330,363
400,018
(69,655
)
(17.4
%)
Income (loss) from operations25,679
(78,673
)
104,352
132.6
%
%5.3
%
-17.6
%
Total other income, net17,887
2,211
15,676
709.0
%
Income (loss) from continuing operations before Income taxes43,566
(76,462
)
120,028
157.0
%
Income tax expense27,297
11,712
15,585
133.1
%
Net earnings (loss) from continuing operations16,269
(88,174
)
104,443
118.5
%
Earnings from discontinued operations, net of tax985
836
149
17.8
%
Net earnings (loss)17,254
(87,338
)
104,592
119.8
%
Basic earnings (loss) per share: Continuing operations0.25
(1.32
)
1.57
118.6
%
Discontinued operations0.01
0.01
0.00
18.7
%
Basic earnings (loss) per share0.26
(1.31
)
1.57
119.9
%
Diluted earnings (loss) per share: Continuing operations0.24
(1.32
)
1.56
118.2
%
Discontinued operations0.01
0.01
0.00
16.1
%
Diluted earnings (loss) per share:0.25
(1.31
)
1.56
119.5
%
Basic weighted average shares66,247
66,761
Diluted weighted average shares
67,733
66,761
Some totals may not sum due to rounding. 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,
2023
2022
2023
2022
Income (loss) from continuing operations before Income taxes21,808
(24,685
)
43,566
(76,462
)
Income tax expense8,429
5,835
27,297
11,712
Net earnings (loss) from continuing operations
13,379
(30,520
)
16,269
(88,174
)
Earnings from discontinued operations, net of tax598
836
985
836
Net earnings (loss)
13,977
(29,684
)
17,254
(87,338
)
Earnings (loss) per share: Basic0.21
(0.46
)
0.26
(1.31
)
Diluted0.21
(0.46
)
0.25
(1.31
)
Excluded items: Purchased intangible asset amortization (cost of revenue)1,181
4,209
5,688
13,489
Non-cash stock compensation (cost of revenue and operating expenses)
17,497
29,624
46,524
81,142
Transformation costs (general and administrative)
-
4,112
1,875
5,362
Restructuring charges (gains, losses, and other)
2,502
11,743
9,192
25,593
Total excluded items, continuing operations
21,180
49,688
63,279
125,586
Income from continuing operations before Income taxes and excluding items
42,988
25,003
106,845
49,124
Income tax expense (2)
10,732
6,468
25,935
12,262
Non-GAAP net earnings from continuing operations
32,256
18,535
80,910
36,862
Non-GAAP earnings per share from continuing operations: Basic
0.49
0.29
1.22
0.55
Diluted
0.47
0.28
1.19
0.55
Basic weighted average shares
65,961
64,784
66,247
66,761
Diluted weighted average shares
67,943
65,356
67,733
67,373
(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 Nine Months Ended December 31, December 31,2023
2022
2023
2022
Income (loss) from continuing operations15,201
(23,949
)
25,679
(78,673
)
Excluded items: Purchased intangible asset amortization (cost of revenue)1,181
4,209
5,688
13,489
Non-cash stock compensation (cost of revenue and operating expenses)
17,497
29,624
46,524
81,142
Transformation costs (general and administrative)
-
4,112
1,875
5,362
Restructuring charges (gains, losses, and other)
2,502
11,743
9,192
25,593
Total excluded items
21,180
49,688
63,279
125,586
Income from continuing operations before excluded items
36,381
25,739
88,958
46,913
(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 Nine Months Ended December 31, December 31,2023
2022
2023
2022
Net earnings (loss) from continuing operations13,379
(30,520
)
16,269
(88,174
)
Income tax expense8,429
5,835
27,297
11,712
Other income
(6,607
)
736
(17,887
)
(2,211
)
Income (loss) from operations15,201
(23,949
)
25,679
(78,673
)
Depreciation and amortization1,782
5,131
7,685
16,561
EBITDA
16,983
(18,818
)
33,364
(62,112
)
Other adjustments: Non-cash stock compensation (cost of revenue and operating expenses)17,497
29,624
46,524
81,142
Transformation costs (general and administrative)
-
4,112
1,875
5,362
Restructuring charges (gains, losses, and other)
2,502
11,743
9,192
25,593
Other adjustments
19,999
45,479
57,591
112,097
Adjusted EBITDA
36,982
26,661
90,955
49,985
(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) December 31, March 31, $ %2023
2023
Assets Current assets: Cash and cash equivalents498,946
464,448
34,498
7.4
%
Short-term investments32,264
32,807
(543
)
(1.7
%)
Trade accounts receivable, net199,383
157,379
42,004
26.7
%
Refundable income taxes, net1,143
28,897
(27,754
)
(96.0
%)
Other current assets37,926
31,028
6,898
22.2
%
Total current assets769,662
714,559
55,103
7.7
%
Property and equipment35,125
39,393
(4,268
)
(10.8
%)
Less - accumulated depreciation and amortization26,923
32,308
(5,385
)
(16.7
%)
Property and equipment, net8,202
7,085
1,117
15.8
%
Intangible assets, net4,180
9,868
(5,688
)
(57.6
%)
360,227
363,116
(2,889
)
(0.8
%)
Deferred commissions, net44,172
37,030
7,142
19.3
%
Other assets, net38,298
41,045
(2,747
)
(6.7
%)
1,224,741
1,172,703
52,038
4.4
%
Liabilities and Stockholders' Equity Current liabilities: Trade accounts payable88,797
86,568
2,229
2.6
%
Accrued payroll and related expenses47,398
33,434
13,964
41.8
%
Other accrued expenses42,600
35,736
6,864
19.2
%
Deferred revenue29,957
19,091
10,866
56.9
%
Total current liabilities208,752
174,829
33,923
19.4
%
Other liabilities69,499
71,798
(2,299
)
(3.2
%)
Stockholders' equity: Preferred stock-
-
-
n/a
Common stock
15,542
15,399
143
0.9
%
Additional paid-in capital1,909,370
1,855,916
53,454
2.9
%
Retained earnings1,319,545
1,302,291
17,254
1.3
%
Accumulated other comprehensive income4,508
4,504
4
0.1
%
Treasury stock, at cost(2,302,475
)
(2,252,034
)
(50,441
)
2.2
%
Total stockholders' equity946,490
926,076
20,414
2.2
%
1,224,741
1,172,703
52,038
4.4
%
LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Dollars in thousands) For the Three Months Ended December 31,2023
2022
Cash flows from operating activities: Net earnings (loss)13,977
(29,684
)
Earnings from discontinued operations, net of tax(598
)
(836
)
Non-cash operating activities: Depreciation and amortization1,782
5,131
Loss on disposal or impairment of assets
911
4,124
Lease impairments
-
5,940
Provision for doubtful accounts
544
613
Deferred income taxes
(47
)
(14
)
Non-cash stock compensation expense17,497
29,624
Changes in operating assets and liabilities: Accounts receivable
(24,778
)
(15,722
)
Deferred commissions(4,235
)
(1,203
)
Other assets(4,831
)
(7,372
)
Accounts payable and other liabilities21,639
20,168
Income taxes
(14,139
)
5,454
Deferred revenue
8,834
(453
)
Net cash provided by operating activities16,556
15,770
Cash flows from investing activities: Capital expenditures
(2,211
)
(179
)
Purchases of investments-
(3,000
)
Proceeds from sale of investments-
3,000
Purchases of strategic investments
-
(500
)
Net cash used in investing activities(2,211
)
(679
)
Cash flows from financing activities: Proceeds related to the issuance of common stock under stock and employee benefit plans1,646
1,664
Shares repurchased for tax withholdings upon vesting of stock-based awards
(547
)
(764
)
Acquisition of treasury stock(10,000
)
(49,906
)
Net cash used in financing activities(8,901
)
(49,006
)
Cash flows from discontinued operations: From operating activities598
836
Net cash provided by discontinued operations
598
836
Effect of exchange rate changes on cash
735
993
Net change in cash and cash equivalents
6,777
(32,086
)
Cash and cash equivalents at beginning of period492,169
485,602
Cash and cash equivalents at end of period
498,946
453,516
Supplemental cash flow information: Cash paid for income taxes, net - continuing operations
22,699
556
Cash (received) for income taxes, net - discontinued operations
(912
)
(1,307
)
Cash paid for operating lease liabilities2,551
2,472
Operating lease assets obtained in exchange for operating lease liabilities
-
69
Purchases of property, plant, equipment, net remaining unpaid at end of period
1,218
77
LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Dollars in thousands) For the Nine Months Ended December 31,
2023
2022
Cash flows from operating activities: Net earnings (loss)17,254
(87,338
)
Earnings from discontinued operations, net of tax(985
)
(836
)
Non-cash operating activities: Depreciation and amortization7,685
16,561
Loss on disposal or impairment of assets
3,528
4,121
Gain on sale of strategic investment
-
(194
)
Lease impairments-
18,165
Provision for doubtful accounts
307
1,728
Impairment of goodwill
2,875
-
Deferred income taxes
40
204
Non-cash stock compensation expense
46,524
81,142
Changes in operating assets and liabilities: Accounts receivable
(41,036
)
(27,171
)
Deferred commissions(7,142
)
(2,123
)
Other assets912
1,588
Accounts payable and other liabilities
8,754
(9,309
)
Income taxes29,560
6,967
Deferred revenue
9,737
271
Net cash provided by operating activities
78,013
3,776
Cash flows from investing activities: Capital expenditures
(2,464
)
(4,593
)
Purchases of investments(24,385
)
(3,000
)
Proceeds from sales of investments25,750
3,000
Purchases of strategic investments
(1,000
)
(500
)
Proceeds from sales of strategic investments-
400
Net cash used in investing activities
(2,099
)
(4,693
)
Cash flows from financing activities: Proceeds related to the issuance of common stock under stock and employee benefit plans7,221
6,255
Shares repurchased for tax withholdings upon vesting of stock-based awards
(5,116
)
(2,054
)
Acquisition of treasury stock(45,325
)
(149,997
)
Net cash used in financing activities(43,220
)
(145,796
)
Cash flows from discontinued operations: From operating activities985
836
Net cash provided by discontinued operations
985
836
Effect of exchange rate changes on cash
819
(769
)
Net change in cash and cash equivalents34,498
(146,646
)
Cash and cash equivalents at beginning of period464,448
600,162
Cash and cash equivalents at end of period
498,946
453,516
Supplemental cash flow information: Cash (received) paid for income taxes, net - continuing operations
(2,440
)
4,725
Cash (received) for income taxes, net - discontinued operations
(1,507
)
(1,307
)
Cash paid for operating lease liabilities7,699
5,733
Operating lease assets obtained in exchange for operating lease liabilities
11,677
69
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 period1,218
77
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 12/31/23 Net Cash Provided by (Used in) Operating Activities-Continuing Operations
(33,369
)
21,375
15,770
30,665
34,441
25,693
35,764
16,556
Less: Capital expenditures
(1,741
)
(2,673
)
(179
)
(103
)
(4,696
)
(53
)
(200
)
(2,211
)
Free Cash Flow to Equity(35,110
)
18,702
15,591
30,562
29,745
25,640
35,564
14,345
(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 12/31/23 FY2024 % $ Revenues142,243
147,099
158,615
148,626
596,583
154,069
159,871
173,869
487,809
9.6
%
15,254
Cost of revenue
41,021
42,304
43,287
43,472
170,084
45,621
41,212
44,934
131,767
3.8
%
1,647
Gross profit
101,222
104,795
115,328
105,154
426,499
108,448
118,659
128,935
356,042
11.8
%
13,607
% Gross margin
71.2
%
71.2
%
72.7
%
70.8
%
71.5
%
70.4
%
74.2
%
74.2
%
73.0
%
Operating expenses Research and development47,661
46,139
43,175
52,220
189,195
34,519
33,733
37,788
106,040
(12.5
%)
(5,387
)
Sales and marketing51,280
45,949
47,702
57,506
202,437
44,879
44,135
46,203
135,217
(3.1
%)
(1,499
)
General and administrative27,144
28,718
36,657
32,832
125,351
26,664
26,009
27,241
79,914
(25.7
%)
(9,416
)
Gains, losses and other items, net739
13,111
11,743
9,723
35,316
116
6,574
2,502
9,192
(78.7
%)
(9,241
)
Total operating expenses126,824
133,917
139,277
152,281
552,299
106,178
110,451
113,734
330,363
(18.3
%)
(25,543
)
Income (loss) from operations(25,602
)
(29,122
)
(23,949
)
(47,127
)
(125,800
)
2,270
8,208
15,201
25,679
163.5
%
39,150
% Margin
-18.0
%
-19.8
%
-15.1
%
-31.7
%
-21.1
%
1.5
%
5.1
%
8.7
%
5.3
%
Total other income (expense), net699
2,248
(736
)
4,735
6,946
4,849
6,431
6,607
17,887
997.7
%
7,343
Income (loss) from continuing operations before Income taxes
(24,903
)
(26,874
)
(24,685
)
(42,392
)
(118,854
)
7,119
14,639
21,808
43,566
188.3
%
46,493
Income taxes expense (benefit)
2,315
3,562
5,835
(6,460
)
5,252
8,705
10,163
8,429
27,297
44.5
%
2,594
Net loss from continuing operations
(27,218
)
(30,436
)
(30,520
)
(35,932
)
(124,106
)
(1,586
)
4,476
13,379
16,269
143.8
%
43,899
Earnings from discontinued operations, net of tax
-
-
836
4,568
5,404
-
387
598
985
(28.5
%)
(238
)
Net earnings (loss)(27,218
)
(30,436
)
(29,684
)
(31,364
)
(118,702
)
(1,586
)
4,863
13,977
17,254
147.1
%
43,661
Diluted earnings (loss) per share
(0.40
)
(0.45
)
(0.46
)
(0.48
)
(1.79
)
(0.02
)
0.07
0.21
0.25
n/a
0.66
Some earnings (loss) per share amounts may not add due to rounding. Basic shares
68,403
67,096
64,784
65,126
66,352
66,497
66,284
65,961
66,247
Diluted shares
69,195
67,568
65,356
66,268
67,097
67,388
67,868
67,943
67,733
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 12/31/23 FY2024 Expenses, continuing operations: Cost of revenue
41,021
42,304
43,287
43,472
170,084
45,621
41,212
44,934
131,767
Research and development
47,661
46,139
43,175
52,220
189,195
34,519
33,733
37,788
106,040
Sales and marketing
51,280
45,949
47,702
57,506
202,437
44,879
44,135
46,203
135,217
General and administrative
27,144
28,718
36,657
32,832
125,351
26,664
26,009
27,241
79,914
Gains, losses and other items, net
739
13,111
11,743.00
9,723
35,316
116
6,574
2,502
9,192
Gross profit, continuing operations:
101,222
104,795
115,328
105,154
426,499
108,448
118,659
128,935
356,042
% Gross margin
71.2
%
71.2
%
72.7
%
70.8
%
71.5
%
70.4
%
74.2
%
74.2
%
73.0
%
Excluded items: Purchased intangible asset amortization (cost of revenue)4,643
4,637
4,209
3,336
16,825
3,290
1,217
1,181
5,688
Non-cash stock compensation (cost of revenue)
1,163
1,293
1,208
2,653
6,317
629
629
817
2,075
Non-cash stock compensation (research and development)
11,656
12,360
10,654
20,737
55,407
5,077
5,293
6,960
17,330
Non-cash stock compensation (sales and marketing)
5,884
6,116
5,871
11,558
29,429
3,736
4,786
4,089
12,611
Non-cash stock compensation (general and administrative)
5,522
7,524
11,891
9,710
34,647
3,850
5,027
5,631
14,508
Restructuring charges (gains, losses, and other)
739
13,111
11,743
9,723
35,316
116
6,574
2,502
9,192
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
21,180
63,279
Expenses, continuing operations excluding items: Cost of revenue
35,215
36,374
37,870
37,483
146,942
41,702
39,366
42,936
124,004
Research and development
36,005
33,779
32,521
31,483
133,788
29,442
28,440
30,828
88,710
Sales and marketing
45,396
39,833
41,831
45,948
173,008
41,143
39,349
42,114
122,606
General and administrative
21,622
19,944
20,654
19,459
81,679
20,939
20,982
21,610
63,531
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
130,933
363,805
% Gross margin
75.2
%
75.3
%
76.1
%
74.8
%
75.4
%
72.9
%
75.4
%
75.3
%
74.6
%
(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 12/31/23 FY 2024 Income (loss) from continuing operations before Income taxes(24,903
)
(26,874
)
(24,685
)
(42,392
)
(118,854
)
7,119
14,639
21,808
43,566
Income taxes (benefit)2,315
3,562
5,835
(6,460
)
5,252
8,705
10,163
8,429
27,297
Net earnings (loss) from continuing operations(27,218
)
(30,436
)
(30,520
)
(35,932
)
(124,106
)
(1,586
)
4,476
13,379
16,269
Earnings from discontinued operations, net of tax-
-
836
4,568
5,404
-
387
598
985
Net earnings (loss)(27,218
)
(30,436
)
(29,684
)
(31,364
)
(118,702
)
(1,586
)
4,863
13,977
17,254
Earnings (loss) per share: Basic(0.40
)
(0.45
)
(0.46
)
(0.48
)
(1.79
)
(0.02
)
0.07
0.21
0.26
Diluted(0.40
)
(0.45
)
(0.46
)
(0.48
)
(1.79
)
(0.02
)
0.07
0.21
0.26
Excluded items: Purchased intangible asset amortization (cost of revenue)4,643
4,637
4,209
3,336
16,825
3,290
1,217
1,181
5,688
Non-cash stock compensation (cost of revenue and operating expenses)24,225
27,293
29,624
44,658
125,800
13,292
15,735
17,497
46,524
Restructuring charges (gains, losses, and other)739
13,111
11,743
9,723
35,316
116
6,574
2,502
9,192
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
21,180
63,279
Income from continuing operations before Income taxes and excluding items4,704
19,417
25,003
18,988
68,112
25,692
38,165
42,988
106,845
Income taxes expense (benefit)1,237
4,557
6,468
(2,141
)
10,121
6,167
9,036
10,732
25,935
Non-GAAP net earnings from continuing operations3,467
14,860
18,535
21,129
57,991
19,525
29,129
32,256
80,910
Non-GAAP earnings per share from continuing operations: Basic0.05
0.22
0.29
0.32
0.87
0.29
0.44
0.49
1.22
Diluted0.05
0.22
0.28
0.32
0.86
0.29
0.43
0.47
1.19
Basic weighted average shares68,403
67,096
64,784
65,126
66,352
66,497
66,284
65,961
66,247
Diluted weighted average shares69,195
67,568
65,356
66,268
67,097
67,388
67,868
67,943
67,733
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 March 31, 2024 March 31, 2024 Low High Low High GAAP income (loss) from operations
(18,000
)
(17,000
)
8,000
9,000
Excluded items: Purchased intangible asset amortization
3,000
3,000
9,000
9,000
Non-cash stock compensation
25,000
25,000
71,000
71,000
Restructuring charges
3,000
3,000
12,000
12,000
Transformation costs
-
-
2,000
2,000
Total excluded items
31,000
31,000
94,000
94,000
Non-GAAP income from operations$
13,000
$
14,000
$
102,000
$
103,000
(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 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, as well as third party expenses associated with business acquisitions in the current year, reported as gains, losses, and other items, net, are excluded from non-GAAP results because such amounts are not used by us to assess the core profitability of our business operations.
Transformation costs: In previous years, we incurred significant expenses to separate the financial statements of our operating segments, with particular focus on segment-level balance sheets, and to evaluate portfolio priorities. Our criteria for excluding transformation expenses from our non-GAAP measures is as follows: 1) projects are discrete in nature; 2) excluded expenses consist only of third-party consulting fees that we would not incur otherwise; and 3) we do not exclude employee related expenses or other costs associated with the ongoing operations of our business. We substantially completed those projects during the third quarter of fiscal year 2018. Beginning in the fourth quarter of fiscal 2018, and through most of fiscal 2019, we incurred transaction support expenses and system separation costs related to the Company's announced evaluation of strategic options for its Marketing Solutions (AMS) business. In the first and second quarters of fiscal 2021 in response to the potential COVID-19 pandemic impact on our business and again during fiscal 2023 in response to macroeconomic conditions, we incurred significant costs associated with the assessment of strategic and operating plans, including our long-term location strategy, and assistance in implementing the restructuring activities as a result of this assessment. Our criteria for excluding these costs are the same. We believe excluding these items from our non-GAAP financial measures is useful for investors and provides meaningful supplemental information.
Our non-GAAP financial schedules are:
Non-GAAP EPS, Non-GAAP Income from Operations, and Non-GAAP expenses: Our Non-GAAP earnings per share, Non-GAAP income from operations, and Non-GAAP expenses reflect adjustments as described above, as well as the related tax effects where applicable.
Adjusted EBITDA: Adjusted EBITDA is defined as net income from continuing operations before income taxes, other expenses, depreciation and amortization, and including adjustments as described above. We use Adjusted EBITDA to measure our performance from period to period both at the consolidated level as well as within our operating segments and to compare our results to those of our competitors. We believe that the inclusion of Adjusted EBITDA provides useful supplementary information to and facilitates analysis by investors in evaluating the Company's performance and trends. The presentation of Adjusted EBITDA is not meant to be considered in isolation or as an alternative to net earnings as an indicator of our performance.
Free Cash Flow to Equity: To supplement our statement of cash flows, we use a non-GAAP measure of cash flow to analyze cash flows generated from operations. Free cash flow to equity is defined as operating cash flow less cash used by investing activities (excluding the impact of cash paid in acquisitions), less required payments of debt, and excluding the impact of discontinued operations. Management believes that this measure of cash flow is meaningful since it represents the amount of money available from continuing operations for the Company's discretionary spending after funding all required obligations including scheduled debt payments. The presentation of non-GAAP free cash flow to equity is not meant to be considered in isolation or as an alternative to cash flows from operating activities as a measure of liquidity.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240208650365/en/