LiveRamp Announces First Quarter Results
LiveRamp® (NYSE: RAMP), the leading global data connectivity platform, today announced its financial results for the quarter ended June 30, 2020.
This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20200810005666/en/
First Quarter Financial Highlights
Total revenue was $99 million, up 21% compared to the prior year period. Subscription revenue was $83 million, up 21% compared to the prior year period and contributed 83% of total revenue. Marketplace & Other revenue was $17 million, up 16% compared to the prior year period. GAAP gross profit was $65 million, up 41% compared to the prior year period. GAAP gross margin of 65% expanded 9 percentage points. Non-GAAP gross profit was $71 million, up 38% compared to the prior year period. Non-GAAP gross margin of 71% also expanded 9 percentage points. GAAP operating loss was $26 million compared to a GAAP operating loss of $48 million in the prior year period. Non-GAAP operating income was $1 million compared to a non-GAAP operating loss of $22 million in the prior year period. GAAP loss per share was $0.33, and non-GAAP earnings per share was $0.01. Net cash used in operating activities was $24 million compared to net cash used by operating activities of $15 million in the prior year period. During the quarter, LiveRamp repurchased 1.3 million shares for $42 million under the current share repurchase program. Since inception of the share repurchase program in August 2011, the Company has returned approximately $1.17 billion in capital to shareholders.A reconciliation between GAAP and non-GAAP results is provided in the schedules to this press release.
“As COVID-19 forces companies to innovate and transform to drive customer value, data matters more than ever,” said LiveRamp CEO Scott Howe. “Global brands and their partners are turning to LiveRamp to enable their data-driven marketing strategies, and our strong Q1 results reflect this. The Authenticated Traffic Solution (or ATS) is gaining widespread global adoption. During the quarter, we more than tripled our ATS publisher adoption and now work with over 125 publishers worldwide, including 60% of the US Comscore 20 and 50% of the US Comscore 50.”
“Our value proposition is strong and our business durable and recurring,” added LiveRamp President and CFO Warren Jenson. “In Q1, our top-line grew by 21%, and we delivered our first quarterly non-GAAP operating profit. In addition, our Advanced TV business and Safe Haven® are winning globally. TV revenue was up over 50% in the quarter, and Safe Haven bookings, ARR and revenue were all up over 100%.”
GAAP and Non-GAAP Results
The following table summarizes the Company’s financial results for its first fiscal quarter ($ in millions):
Q1 Fiscal 2021
Q1 Fiscal 2020
Results
Results
GAAP
Non-GAAP
GAAP
Non-GAAP
Subscription revenue
$83
—
$68
—
YoY change %
21%
33%
Marketplace & other revenue
$17
—
$14
—
YoY change %
16%
27%
Total revenue
$99
—
$83
—
YoY change %
21%
32%
Gross profit
$65
$71
$46
$51
% Gross margin
65%
71%
56%
62%
YoY change, pts
9pts
9pts
(6pts)
(10pts)
Operating income (loss)
($26)
$1
($48)
($22)
% Operating margin
(26%)
1%
(59%)
(27%)
YoY change, pts
32pts
29pts
(11pts)
(18pts)
Net income (loss)
($22)
$1
($42)
($16)
YoY change %
nm
nm
nm
nm
Earnings (loss) per share
($0.33)
$0.01
($0.61)
($0.24)
YoY change %
nm
nm
nm
nm
Shares to Calculate EPS
65.6
67.3
68.9
68.9
YoY change %
(5%)
(5%)
(10%)
(10%)
Net operating cash flow
($24)
—
($15)
—
YoY change %
nm
—
nm
Free cash flow to equity
—
($24)
—
($20)
YoY change %
—
nm
—
nm
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
LiveRamp addressability solutions, including ATS, continue to experience strong global adoption. There are currently 20 supply-side platforms (SSPs) live or committed to implementing IdentityLink™ in the bidstream, including OpenX, Index Exchange, Pubmatic, Rubicon Project and TripleLift. In addition, there are 40 demand-side platforms (DSPs) live or committed to bid on IdentityLink, including Amobee, Criteo, dataxu, and MediaMath. Lastly, to date, LiveRamp has signed on more than 125 publishers globally for ATS, spanning four continents. LiveRamp completed the acquisition of Acuity Data, a team of global retail and consumer packaged goods (CPG) experts, in early July to strengthen the retail analytics capabilities of its Safe Haven platform. These capabilities will enable better reporting, insights, and collaboration for retailers and CPG companies, bridging the gap between trade and media by bringing consumers’ digital signals and retail transaction data together in a privacy-conscious manner. Total purchase consideration was immaterial. During the first quarter, subscription net retention was approximately 109% and platform net retention was 111%. Current remaining performance obligations (RPO), which is contracted and committed revenue expected to be recognized over the next 12 months, was $223 million, up 33% compared to the first quarter of last year. LiveRamp has 60 clients whose subscription contracts exceed $1 million in annual revenue, up from 45 in the prior year period. LiveRamp’s direct subscription customer count at quarter end was 780, an increase of 13% year over year. It now serves 22% of the Fortune 500 compared to 20% in the prior year period.Financial Outlook
Given macro economic uncertainties, LiveRamp is providing second quarter guidance only.
LiveRamp’s non-GAAP guidance excludes the impact of non-cash stock compensation, purchased intangible asset amortization, business transformation costs and restructuring charges.
For the second quarter of fiscal 2021, LiveRamp expects to report:
Revenue of approximately $100 million, an increase of approximately 11% year-over-year GAAP operating loss of up to $39 million Non-GAAP operating loss of up to $7 millionConference 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 relate to maintaining our culture and our ability to innovate and evolve while working remotely and within a rapidly changing industry, while also avoiding disruption from acquisition and divestiture activities. Our international operations are also subject to risks that may harm the Company’s business. The risk of a significant breach of the confidentiality of the information or the security of our or our customers’, suppliers’, or other partners’ computer systems could be detrimental to our business, reputation and results of operations. Other business risks include unfavorable publicity and negative public perception about our industry; interruptions or delays in service from data center hosting vendors we rely upon; and our dependence on the continued availability of third-party data hosting and transmission services. Our clients’ ability to use data on our platform could be restricted if the industry’s use of third-party cookies and tracking technology declines due to technology platform changes, regulation or increased user controls. Changes in regulations relating to information collection and use represents a risk, as well as changes in tax laws and regulations that are applied to our customers which could cause enterprise software budget tightening. In addition, third parties may claim that we are infringing their intellectual property or may infringe our intellectual property which could result in competitive injury and / or the incurrence of significant costs and draining of our resources.
For a discussion of these and other risks and uncertainties, please refer to LiveRamp’s Annual Report on Form 10-K for our fiscal year 2020 ended March 31, 2020, and LiveRamp's Quarterly Reports on Form 10-Q issued in fiscal year 2021.
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®, IdentityLink™, 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 June 30, $ %2020
2019
Variance
Variance
Revenues99,437
82,511
16,926
20.5
%
Cost of revenue34,465
36,426
(1,961
)
(5.4
%)
Gross profit64,972
46,085
18,887
41.0
%
% Gross margin65.3
%
55.9
%
Operating expenses: Research and development26,989
23,722
3,267
13.8
%
Sales and marketing38,627
43,144
(4,517
)
(10.5
%)
General and administrative23,368
25,318
(1,950
)
(7.7
%)
Gains, losses and other items, net1,995
2,276
(281
)
(12.3
%)
Total operating expenses90,979
94,460
(3,481
)
(3.7
%)
Loss from operations(26,007
)
(48,375
)
22,368
46.2
%
% Margin-26.2
%
-58.6
%
Total other income463
5,882
(5,419
)
(92.1
%)
Loss from operations before income taxes(25,544
)
(42,493
)
16,949
39.9
%
Income taxes (benefit)(3,816
)
(353
)
(3,463
)
(981.0
%)
Net loss(21,728
)
(42,140
)
20,412
48.4
%
Basic loss per share(0.33
)
(0.61
)
0.28
45.8
%
Diluted loss per share:(0.33
)
(0.61
)
0.28
45.8
%
Basic weighted average shares65,570
68,906
Diluted weighted average shares
65,570
68,906
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 June 30,
2020
2019
Loss from operations before income taxes(25,544)
(42,493)
Income taxes (benefit)(3,816)
(353)
Net loss(21,728)
(42,140)
Loss per share: Basic(0.33)
(0.61)
Diluted(0.33)
(0.61)
Excluded items: Purchased intangible asset amortization (cost of revenue)5,306
3,123
Non-cash stock compensation (cost of revenue and operating expenses)16,485
18,630
Accelerated depreciation (cost of revenue and operating expenses)-
1,906
Transformation costs (general and administrative)3,605
-
Restructuring and merger charges (gains, losses, and other)1,995
2,276
Total excluded items27,391
25,935
Income (loss) from operations before income taxes and excluding items1,847
(16,558)
Income taxes (benefit) (2)934
(216)
Non-GAAP net earnings (loss)913
(16,342)
Non-GAAP earnings (loss) per share: Basic0.01
(0.24)
Diluted0.01
(0.24)
Basic weighted average shares65,570
68,906
Diluted weighted average shares67,337
68,906
(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 using an effective non-GAAP tax rate of 50.5% and 1.3% in the first quarter of fiscal 2021 and 2020, respectively. The difference between our GAAP and non-GAAP tax rates were primarily due to the net tax effects of the excluded items.
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 June 30,2020
2019
Loss from operations(26,007
)
(48,375
)
Excluded items: Purchased intangible asset amortization (cost of revenue)5,306
3,123
Non-cash stock compensation (cost of revenue and operating expenses)
16,485
18,630
Accelerated depreciation (cost of revenue and operating expenses)
-
1,906
Transformation costs (general and administrative)
3,605
-
Restructuring and merger charges (gains, losses, and other)
1,995
2,276
Total excluded items
27,391
25,935
Income (loss) from operations before excluded items
1,384
(22,440
)
(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 June 30,2020
2019
Net loss(21,728
)
(42,140
)
Income taxes (benefit)(3,816
)
(353
)
Other income(463
)
(5,882
)
Loss from operations(26,007
)
(48,375
)
Depreciation and amortization8,054
8,877
EBITDA
(17,953
)
(39,498
)
Other adjustments: Non-cash stock compensation (cost of revenue and operating expenses)16,485
18,630
Transformation costs (general and administrative)
3,605
-
Restructuring and merger charges (gains, losses, and other)
1,995
2,276
Other adjustments
22,085
20,906
Adjusted EBITDA
4,132
(18,592
)
(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) June 30, March 31, $ %2020
2020
Variance
Variance
Assets Current assets: Cash and cash equivalents649,895
717,811
(67,916
)
(9.5
%)
Restricted cash14,815
14,815
-
n/a
Trade accounts receivable, net
96,472
92,761
3,711
4.0
%
Refundable income taxes39,776
38,340
1,436
3.7
%
Other current assets24,314
32,666
(8,352
)
(25.6
%)
Total current assets825,272
896,393
(71,121
)
(7.9
%)
Property and equipment45,077
44,786
291
0.6
%
Less - accumulated depreciation and amortization27,969
25,465
2,504
9.8
%
Property and equipment, net17,108
19,321
(2,213
)
(11.5
%)
Intangible assets, net39,915
45,200
(5,285
)
(11.7
%)
Goodwill298,389
297,796
593
0.2
%
Deferred commissions, net17,695
16,014
1,681
10.5
%
Other assets, net35,552
27,165
8,387
30.9
%
1,233,931
1,301,889
(67,958
)
(5.2
%)
Liabilities and Stockholders' Equity Current liabilities: Trade accounts payable38,380
42,204
(3,824
)
(9.1
%)
Accrued payroll and related expenses16,727
28,791
(12,064
)
(41.9
%)
Other accrued expenses50,024
68,991
(18,967
)
(27.5
%)
Acquisition escrow payable14,815
14,815
-
n/a
Deferred revenue
5,938
6,581
(643
)
(9.8
%)
Total current liabilities125,884
161,382
(35,498
)
(22.0
%)
Other liabilities49,758
52,995
(3,237
)
(6.1
%)
Stockholders' equity: Preferred stock-
-
-
n/a
Common stock
14,525
14,394
131
0.9
%
Additional paid-in capital1,532,481
1,496,565
35,916
2.4
%
Retained earnings1,523,366
1,545,094
(21,728
)
(1.4
%)
Accumulated other comprehensive income6,342
5,745
597
10.4
%
Treasury stock, at cost(2,018,425
)
(1,974,286
)
(44,139
)
(2.2
%)
Total stockholders' equity1,058,289
1,087,512
(29,223
)
(2.7
%)
1,233,931
1,301,889
(67,958
)
(5.2
%)
LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Dollars in thousands) For the Three Months Ended June 30,2020
2019
Cash flows from operating activities: Net loss(21,728
)
(42,140
)
Non-cash operating activities: Depreciation and amortization8,054
8,877
Loss on disposal or impairment of assets
2
85
Provision for doubtful accounts
1,330
962
Deferred income taxes
(672
)
7
Non-cash stock compensation expense
16,485
18,630
Changes in operating assets and liabilities: Accounts receivable
(5,860
)
(3,451
)
Deferred commissions(1,681
)
174
Other assets
4,904
3,600
Accounts payable and other liabilities
(22,684
)
(188
)
Income taxes(1,105
)
(863
)
Deferred revenue(657
)
(1,101
)
Net cash used in operating activities(23,612
)
(15,408
)
Cash flows from investing activities: Capital expenditures(832
)
(4,888
)
Payment for investment(667
)
-
Cash paid in acquisition, net of cash received
-
(4,479
)
Net cash used in investing activities(1,499
)
(9,367
)
Cash flows from financing activities: Proceeds related to the issuance of common stock under stock and employee benefit plans1,137
1,060
Shares repurchased for tax withholdings upon vesting of stock-based awards
(1,827
)
(12,093
)
Acquisition of treasury stock(42,312
)
(20,099
)
Net cash used in financing activities(43,002
)
(31,132
)
Effect of exchange rate changes on cash197
(89
)
Net change in cash and cash equivalents(67,916
)
(55,996
)
Cash and cash equivalents at beginning of period732,626
1,061,473
Cash and cash equivalents at end of period
664,710
1,005,477
Supplemental cash flow information: Cash paid (received) during the period for: Income taxes
(2,041
)
110
LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES CALCULATION OF FREE CASH FLOW TO EQUITY (1) (Unaudited) (Dollars in thousands) 06/30/19 09/30/19 12/31/19 03/31/20 FY2020 06/30/20 Net Cash Provided by (Used in) Operating Activities
(15,408
)
(28,751
)
15,804
(220
)
(28,575
)
(23,612
)
Less: Capital expenditures(4,888
)
(2,641
)
(2,773
)
(1,409
)
(11,711
)
(832
)
Free Cash Flow to Equity(20,296
)
(31,392
)
13,031
(1,629
)
(40,286
)
(24,444
)
(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) Q1 FY21 to Q1 FY2006/30/19
09/30/19
12/31/19
03/31/20
FY2020
06/30/20
%
$
Revenues82,511
90,143
102,217
105,701
380,572
99,437
20.5
%
16,926
Cost of revenue
36,426
41,460
37,966
36,852
152,704
34,465
(5.4
%)
(1,961
)
Gross profit46,085
48,683
64,251
68,849
227,868
64,972
41.0
%
18,887
% Gross margin
55.9
%
54.0
%
62.9
%
65.1
%
59.9
%
65.3
%
Operating expenses Research and development23,722
26,445
27,403
28,411
105,981
26,989
13.8
%
3,267
Sales and marketing
43,144
45,204
51,993
48,564
188,905
38,627
(10.5
%)
(4,517
)
General and administrative25,318
27,262
26,107
30,216
108,903
23,368
(7.7
%)
(1,950
)
Gains, losses and other items, net2,276
45
233
2,447
5,001
1,995
(12.3
%)
(281
)
Total operating expenses94,460
98,956
105,736
109,638
408,790
90,979
(3.7
%)
(3,481
)
Loss from operations(48,375
)
(50,273
)
(41,485
)
(40,789
)
(180,922
)
(26,007
)
46.2
%
22,368
% Margin
-58.6
%
-55.8
%
-40.6
%
-38.6
%
-47.5
%
-26.2
%
Total other income5,882
4,780
3,158
1,565
15,385
463
(92.1
%)
(5,419
)
Loss from continuing operations before income taxes(42,493
)
(45,493
)
(38,327
)
(39,224
)
(165,537
)
(25,544
)
39.9
%
16,949
Income taxes (benefit)
(353
)
(5,291
)
(287
)
(34,345
)
(40,276
)
(3,816
)
(981.0
%)
(3,463
)
Net loss from continuing operations(42,140
)
(40,202
)
(38,040
)
(4,879
)
(125,261
)
(21,728
)
48.4
%
20,412
Earnings from discontinued operations, net of tax
-
-
-
750
750
-
n/a
-
Net loss
(42,140
)
(40,202
)
(38,040
)
(4,129
)
(124,511
)
(21,728
)
48.4
%
20,412
Diluted loss per share
(0.61
)
(0.59
)
(0.56
)
(0.06
)
(1.84
)
(0.33
)
45.8
%
0.28
Diluted loss per share continuing operations
(0.61
)
(0.59
)
(0.56
)
(0.07
)
(1.85
)
(0.33
)
45.8
%
0.28
Some loss per share amounts may not add due to rounding. Basic shares
68,906
67,684
67,473
66,977
67,760
65,570
Diluted shares
68,906
67,684
67,473
66,977
67,760
65,570
LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES RECONCILIATION OF GAAP TO NON-GAAP EPS (1) (Unaudited) (Dollars in thousands, except per share amounts)
06/30/19
09/30/19
12/31/19
03/31/20
FY2020
06/30/20
Loss from continuing operations before income taxes(42,493
)
(45,493
)
(38,327
)
(39,224
)
(165,537
)
(25,544
)
Income taxes (benefit)(353
)
(5,291
)
(287
)
(34,345
)
(40,276
)
(3,816
)
Net loss from continuing operations(42,140
)
(40,202
)
(38,040
)
(4,879
)
(125,261
)
(21,728
)
Earnings from discontinued operations, net of tax-
-
-
750
750
-
Net loss
(42,140
)
(40,202
)
(38,040
)
(4,129
)
(124,511
)
(21,728
)
Loss per share: Basic(0.61
)
(0.59
)
(0.56
)
(0.06
)
(1.84
)
(0.33
)
Diluted(0.61
)
(0.59
)
(0.56
)
(0.06
)
(1.84
)
(0.33
)
Excluded items: Purchased intangible asset amortization (cost of revenue)3,123
5,369
5,369
5,181
19,042
5,306
Non-cash stock compensation (cost of revenue and operating expenses)
18,630
23,354
30,295
17,168
89,447
16,485
Accelerated depreciation (cost of revenue and operating expenses)
1,906
1,663
-
-
3,569
-
Restructuring and merger charges (gains, losses, and other)
2,276
45
233
2,447
5,001
1,995
Transformation costs (general and administrative)
-
-
-
-
-
3,605
Total excluded items, continuing operations
25,935
30,431
35,897
24,796
117,059
27,391
Income (loss) from continuing operations before income taxes and excluding items
(16,558
)
(15,062
)
(2,430
)
(14,428
)
(48,478
)
1,847
Income taxes (benefit)
(216
)
190
(227
)
(11,199
)
(11,452
)
934
Non-GAAP net earnings (loss) from continuing operations
(16,342
)
(15,252
)
(2,203
)
(3,229
)
(37,026
)
913
Non-GAAP earnings (loss) per share from continuing operations: Basic
(0.24
)
(0.23
)
(0.03
)
(0.05
)
(0.55
)
0.01
Diluted
(0.24
)
(0.23
)
(0.03
)
(0.05
)
(0.55
)
0.01
Basic weighted average shares
68,906
67,684
67,473
66,977
67,760
65,570
Diluted weighted average shares
68,906
67,684
67,473
66,977
67,760
67,337
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)06/30/19
09/30/19
12/31/19
03/31/20
FY2020
06/30/20
Expenses: Cost of revenue36,426
41,460
37,966
36,852
152,704
34,465
Research and development
23,722
26,445
27,403
28,411
105,981
26,989
Sales and marketing
43,144
45,204
51,993
48,564
188,905
38,627
General and administrative
25,318
27,262
26,107
30,216
108,903
23,368
Gains, losses and other items, net
2,276
45
233
2,447
5,001
1,995
Gross profit:
46,085
48,683
64,251
68,849
227,868
64,972
% Gross margin
55.9
%
54.0
%
62.9
%
65.1
%
59.9
%
65.3
%
Excluded items: Purchased intangible asset amortization (cost of revenue)3,123
5,369
5,369
5,181
19,042
5,306
Non-cash stock compensation (cost of revenue)
755
1,060
1,028
926
3,769
775
Non-cash stock compensation (research and development)
4,451
6,346
6,462
6,001
23,260
5,886
Non-cash stock compensation (sales and marketing)
8,920
9,758
15,670
3,678
38,026
7,123
Non-cash stock compensation (general and administrative)
4,504
6,190
7,135
6,563
24,392
2,701
Accelerated depreciation (cost of revenue)
1,487
1,245
-
-
2,732
-
Accelerated depreciation (general and administrative)
419
418
-
-
837
-
Restructuring and merger charges (gains, losses, and other)
2,276
45
233
2,447
5,001
1,995
Transformation costs (general and administrative)
-
-
-
-
-
3,605
Total excluded items
25,935
30,431
35,897
24,796
117,059
27,391
Expenses, excluding items: Cost of revenue
31,061
33,786
31,569
30,745
127,161
28,384
Research and development
19,271
20,099
20,941
22,410
82,721
21,103
Sales and marketing
34,224
35,446
36,323
44,886
150,879
31,504
General and administrative
20,395
20,654
18,972
23,653
83,674
17,062
Gains, losses and other items, net
-
-
-
-
-
-
Gross profit, excluding items:
51,450
56,357
70,648
74,956
253,411
71,053
% Gross margin
62.4
%
62.5
%
69.1
%
70.9
%
66.6
%
71.5
%
(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 LOSS GUIDANCE (1) (Unaudited) (Dollars in thousands) For the quarter ending September 30, 2020 GAAP loss from operations
(39,000
)
Excluded items: Purchased intangible asset amortization
5,000
Non-cash stock compensation
25,000
Restructuring and transformation costs
2,000
Total excluded items
32,000
Non-GAAP loss from operations
$
(7,000
)
(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 easures and the material limitations on the usefulness of these measures, please see Appendix A.
APPENDIX A
LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
Q1 FISCAL 2021 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. Beginning in the first quarter 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.
Accelerated depreciation: In the prior year we excluded depreciation costs associated with the reduced useful life of certain IT equipment in connection with the Company's migration to a cloud-based data center solution. This migration was part of our AMS separation strategy. These costs are excluded from our non-GAAP results because of the short-term nature of the incremental expenses and such amounts are not used by us to assess the core profitability of our business operations.
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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