LiveRamp Announces First Quarter Results
LiveRamp® (NYSE: RAMP), the leading data collaboration platform, today announced its financial results for the fiscal 2024 first quarter ended June 30, 2023.
This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20230809407441/en/
Q1 Financial Highlights1
Total revenue was $154 million, up 8% Subscription revenue was $122 million, up 5%, and accounted for 79% of total revenue. Marketplace Other revenue was $32 million, up 21%. GAAP gross profit was $108 million, up 7%. GAAP gross margin of 70% contracted by 1 percentage point. Non-GAAP gross profit was $112 million, up 5%. Non-GAAP gross margin of 73% contracted by 2 percentage points. GAAP operating income was $2 million compared to a loss of $26 million. GAAP operating margin was 1% compared to negative 18%. Non-GAAP operating income was $21 million compared to $4 million. Non-GAAP operating margin of 14% expanded by 11 percentage points. GAAP diluted loss per share was $0.02 and non-GAAP diluted earnings per share was $0.29. Net cash provided by operating activities was $26 million compared to a use of $33 million. Operating cash flow benefited from a $29 million tax refund for fiscal 2021. Repurchased approximately 835,000 shares for $20 million in the first quarter.A reconciliation between GAAP and non-GAAP results is provided in the schedules to this press release.
"We’re off to a strong start to the fiscal year, with first quarter revenue and operating income exceeding our expectations, operating margin expanding by double-digits and our first quarter ever with positive GAAP operating income,” said LiveRamp CEO Scott Howe. “Our data collaboration platform remains in high demand with the world’s most sophisticated marketers, helping them deliver relevant messages and measure results across all addressable channels, including social networks, the open web, programmatic, retail media networks and connected TV.”
______________
1Unless otherwise indicated, all comparisons are to the prior year period.
GAAP and Non-GAAP Results
The following table summarizes the Company’s financial results for the fiscal first quarter ended June 30, 2023 ($ in millions):
Q1 Fiscal 2024
Q1 Fiscal 2023
Results
Results
GAAP
Non-GAAP
GAAP
Non-GAAP
Subscription revenue
$122
—
$116
—
YoY change %
5%
20%
Marketplace Other revenue
$32
—
$27
—
YoY change %
21%
18%
Total revenue
$154
—
$142
—
YoY change %
8%
19%
Gross profit
$108
$112
$101
$107
% Gross margin
70%
73%
71%
75%
YoY change, pts
(1) pt
(2) pts
—
—
Operating income (loss)
$2
$21
($26)
$4
% Operating margin
1%
14%
(18%)
3%
YoY change, pts
19 pts
11 pts
(3) pts
(3) pts
Net earnings (loss)
($2)
$20
($27)
$3
Diluted earnings (loss) per share
($0.02)
$0.29
($0.40)
$0.05
Shares to calculate diluted EPS
66.5
67.4
68.4
69.2
YoY change %
(3%)
(3%)
0%
(1%)
Net operating cash flow
$26
—
($33)
—
Free cash flow to equity
—
$26
—
($35)
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
The Company’s globally scaled Authenticated Traffic Solution (ATS) has more than 165 supply-side platforms (SSPs) and demand-side platforms (DSPs) live or committed to bid on RampID™ and ATS, including The Trade Desk, Xander, Amobee, Criteo, Adobe Ad Cloud, and Roku Oneview. To date, over 14,000 publisher domains and over 70% of the comScore 100 publishers, have adopted ATS, including Amazon Publisher Services, Microsoft, Hearst, CafeMedia, Leaf Group, Prisma Media and Burda. Through these integrations, LiveRamp is now connected to over 90% of consumer time spent online in the US. In May 2023 we integrated Google Display Video 360's PAIR (Publisher Advertiser Identity Reconciliation) into the LiveRamp platform and started running brand campaigns. With PAIR, publishers and marketers can securely and privately reconcile their first-party data for marketing use cases on Display Video 360, Google's DSP. This step forward unlocks additional scale across inventory already impacted by third-party cookie changes, while also providing a sustainable solution for the future across all channels, including Connected TV. In June 2023 our native applications for identity resolution debuted in the Snowflake Native App Framework. This means LiveRamp customers can seamlessly access our identity resolution and activation capabilities directly in their Snowflake data environment, eliminating the need to move or copy data and, thereby, reducing security and privacy risks. LiveRamp has 915 direct subscription customers, up from 910 in the prior year period. LiveRamp has 96 customers whose subscription contracts exceed $1 million in annual revenue, up from 90 in the prior year period. During the first quarter, subscription net retention was 98% and platform net retention was 102%. Current remaining performance obligations (CRPO), which is contracted and committed revenue expected to be recognized over the next 12 months, was $351 million, up 19% 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 second quarter of fiscal 2024, LiveRamp expects to report:
Revenue of $152 million, an increase of 3% GAAP operating income of $1 million Non-GAAP operating income of $19 millionFor fiscal 2024, LiveRamp updates its guidance and expects to report:
Revenue of between $620 million and $630 million, an increase of between 4% and 6% GAAP operating income of between $2 million and $5 million Non-GAAP operating income of between $90 million and $93 millionConference Call
LiveRamp will hold a conference call today at 1:30 p.m. PT to further discuss this information. Interested parties are invited to listen to the call which will be broadcast via the Internet and can be found on LiveRamp’s investor site. A slide presentation will be referenced during the call and can be accessed here.
About LiveRamp
LiveRamp is the data collaboration platform of choice for the world’s most innovative companies. A groundbreaking leader in consumer privacy, data ethics, and foundational identity, LiveRamp is setting the new standard for building a connected customer view with unmatched clarity and context while protecting precious brand and consumer trust. LiveRamp offers complete flexibility to collaborate wherever data lives to support the widest range of data collaboration use cases—within organizations, between brands, and across its premier global network of top-quality partners. Hundreds of global innovators, from iconic consumer brands and tech giants to banks, retailers, and healthcare leaders, turn to LiveRamp to build enduring brand and business value by deepening customer engagement and loyalty, activating new partnerships, and maximizing the value of their first-party data while staying on the forefront of rapidly evolving compliance and privacy requirements. LiveRamp is based in San Francisco, California with offices worldwide. Learn more at LiveRamp.com.
Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, as amended (the “PSLRA”). These statements, which are not statements of historical fact, may contain estimates, assumptions, projections and/or expectations regarding the Company’s financial position, results of operations for fiscal 2024 and beyond, market position, product development, growth opportunities, economic conditions, and other similar forecasts and statements of expectation. Forward-looking statements are often identified by words or phrases such as “anticipate,” “estimate,” “plan,” “expect,” “believe,” “intend,” “foresee,” or the negative of these terms or other similar variations thereof.
These forward-looking statements are not guarantees of future performance and are subject to a number of factors and uncertainties that could cause the Company’s actual results and experiences to differ materially from the anticipated results and expectations expressed in the forward-looking statements.
Among the factors that may cause actual results and expectations to differ from anticipated results and expectations expressed in forward-looking statements are uncertainties related to rising interest rates, cost increases, the possibility of a recession, general inflationary pressure, 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; and attracting 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 June 30, $ %2023
2022
Revenues
154,069
142,243
11,826
8.3
%
Cost of revenue45,621
41,021
4,600
11.2
%
Gross profit108,448
101,222
7,226
7.1
%
% Gross margin70.4
%
71.2
%
Operating expenses: Research and development34,519
47,661
(13,142
)
(27.6
%)
Sales and marketing44,879
51,280
(6,401
)
(12.5
%)
General and administrative26,664
27,144
(480
)
(1.8
%)
Gains, losses and other items, net116
739
(623
)
(84.3
%)
Total operating expenses106,178
126,824
(20,646
)
(16.3
%)
Income (loss) from operations2,270
(25,602
)
27,872
108.9
%
%1.5
%
-18.0
%
Total other income, net4,849
699
4,150
593.7
%
Income (loss) from operations before Income taxes7,119
(24,903
)
32,022
128.6
%
Income tax expense8,705
2,315
6,390
276.0
%
Net loss(1,586
)
(27,218
)
25,632
94.2
%
Basic loss per share(0.02
)
(0.40
)
0.37
94.0
%
Diluted loss per share:(0.02
)
(0.40
)
0.37
94.0
%
Basic weighted average shares66,497
68,403
Diluted weighted average shares
66,497
68,403
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,
2023
2022
Income (loss) from operations before Income taxes7,119
(24,903
)
Income tax expense8,705
2,315
Net loss
(1,586
)
(27,218
)
Loss per share: Basic(0.02
)
(0.40
)
Diluted(0.02
)
(0.40
)
Excluded items: Purchased intangible asset amortization (cost of revenue)3,290
4,643
Non-cash stock compensation (cost of revenue and operating expenses)
13,292
24,225
Transformation costs (general and administrative)
1,875
-
Restructuring and merger charges (gains, losses, and other)
116
739
Total excluded items
18,573
29,607
Income from operations before Income taxes and excluding items
25,692
4,704
Income tax expense (2)
6,167
1,237
Non-GAAP net earnings
19,525
3,467
Non-GAAP earnings per share: Basic
0.29
0.05
Diluted
0.29
0.05
Basic weighted average shares
66,497
68,403
Diluted weighted average shares
67,388
69,195
(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 June 30,2023
2022
Income (loss) from operations2,270
(25,602
)
Excluded items: Purchased intangible asset amortization (cost of revenue)3,290
4,643
Non-cash stock compensation (cost of revenue and operating expenses)
13,292
24,225
Transformation costs (general and administrative)
1,875
-
Restructuring and merger charges (gains, losses, and other)
116
739
Total excluded items
18,573
29,607
Income from operations before excluded items
20,843
4,005
(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 30,2023
2022
Net loss(1,586
)
(27,218
)
Income tax expense8,705
2,315
Other income
(4,849
)
(699
)
Income (loss) from operations2,270
(25,602
)
Depreciation and amortization4,039
5,741
EBITDA
6,309
(19,861
)
Other adjustments: Non-cash stock compensation (cost of revenue and operating expenses)13,292
24,225
Transformation costs (general and administrative)
1,875
-
Restructuring and merger charges (gains, losses, and other)
116
739
Other adjustments
15,283
24,964
Adjusted EBITDA
21,592
5,103
(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) June 30, March 31, $ %2023
2023
Assets Current assets: Cash and cash equivalents470,773
464,448
6,325
1.4
%
Short-term investments33,099
32,807
292
0.9
%
Trade accounts receivable, net173,083
157,379
15,704
10.0
%
Refundable income taxes, net-
28,897
(28,897
)
(100.0
%)
Other current assets29,091
31,028
(1,937
)
(6.2
%)
Total current assets706,046
714,559
(8,513
)
(1.2
%)
Property and equipment37,927
39,393
(1,466
)
(3.7
%)
Less - accumulated depreciation and amortization31,872
32,308
(436
)
(1.3
%)
Property and equipment, net6,055
7,085
(1,030
)
(14.5
%)
Intangible assets, net6,578
9,868
(3,290
)
(33.3
%)
363,178
363,116
62
0.0
%
Deferred commissions, net36,944
37,030
(86
)
(0.2
%)
Other assets, net45,130
41,045
4,085
10.0
%
1,163,931
1,172,703
(8,772
)
(0.7
%)
Liabilities and Stockholders' Equity Current liabilities: Trade accounts payable74,077
86,568
(12,491
)
(14.4
%)
Accrued payroll and related expenses23,929
33,434
(9,505
)
(28.4
%)
Other accrued expenses39,322
35,736
3,586
10.0
%
Deferred revenue27,267
19,091
8,176
42.8
%
Income taxes payable7,782
-
7,782
n/a
Total current liabilities
172,377
174,829
(2,452
)
(1.4
%)
Other liabilities73,023
71,798
1,225
1.7
%
Stockholders' equity: Preferred stock-
-
-
n/a
Common stock
15,455
15,399
56
0.4
%
Additional paid-in capital1,873,935
1,855,916
18,019
1.0
%
Retained earnings1,300,705
1,302,291
(1,586
)
(0.1
%)
Accumulated other comprehensive income4,565
4,504
61
1.4
%
Treasury stock, at cost(2,276,129
)
(2,252,034
)
(24,095
)
1.1
%
Total stockholders' equity918,531
926,076
(7,545
)
(0.8
%)
1,163,931
1,172,703
(8,772
)
(0.7
%)
LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Dollars in thousands) For the Three Months Ended June 30,2023
2022
Cash flows from operating activities: Net loss(1,586
)
(27,218
)
Non-cash operating activities: Depreciation and amortization4,039
5,741
Loss (gain) on disposal or impairment of assets
308
(5
)
Provision for doubtful accounts(219
)
997
Deferred income taxes
47
187
Non-cash stock compensation expense
13,292
24,225
Changes in operating assets and liabilities: Accounts receivable
(14,391
)
(7,733
)
Deferred commissions86
(369
)
Other assets5,008
4,352
Accounts payable and other liabilities
(25,225
)
(34,557
)
Income taxes37,236
2,131
Deferred revenue
7,098
(1,120
)
Net cash provided by (used in) operating activities25,693
(33,369
)
Cash flows from investing activities: Capital expenditures(53
)
(1,741
)
Purchases of strategic investments(500
)
-
Net cash used in investing activities
(553
)
(1,741
)
Cash flows from financing activities: Proceeds related to the issuance of common stock under stock and employee benefit plans5,573
4,589
Shares repurchased for tax withholdings upon vesting of stock-based awards
(3,892
)
(582
)
Acquisition of treasury stock(20,203
)
(60,053
)
Net cash used in financing activities(18,522
)
(56,046
)
Effect of exchange rate changes on cash(293
)
(752
)
Net change in cash and cash equivalents6,325
(91,908
)
Cash and cash equivalents at beginning of period464,448
600,162
Cash and cash equivalents at end of period
470,773
508,254
Supplemental cash flow information: Cash paid (received) during the period for: Income taxes related to continuing operations
(28,653
)
4
Operating lease liabilities
2,459
2,156
Operating lease assets obtained in exchange for operating lease liabilities
10,565
-
Operating lease assets relinquished in exchange for operating lease liabilities
(4,486
)
-
Purchases of property, plant, equipment, net remaining unpaid at end of period
-
1,666
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 % $ Revenues
142,243
147,099
158,615
148,626
596,583
154,069
8.3
%
11,826
Cost of revenue
41,021
42,304
43,287
43,472
170,084
45,621
11.2
%
4,600
Gross profit
101,222
104,795
115,328
105,154
426,499
108,448
7.1
%
7,226
% Gross margin
71.2
%
71.2
%
72.7
%
70.8
%
71.5
%
70.4
%
Operating expenses Research and development47,661
46,139
43,175
52,220
189,195
34,519
(27.6
%)
(13,142
)
Sales and marketing51,280
45,949
47,702
57,506
202,437
44,879
(12.5
%)
(6,401
)
General and administrative27,144
28,718
36,657
32,832
125,351
26,664
(1.8
%)
(480
)
Gains, losses and other items, net739
13,111
11,743
9,723
35,316
116
(84.3
%)
(623
)
Total operating expenses126,824
133,917
139,277
152,281
552,299
106,178
(16.3
%)
(20,646
)
Income (loss) from operations(25,602
)
(29,122
)
(23,949
)
(47,127
)
(125,800
)
2,270
108.9
%
27,872
% Margin
-18.0
%
-19.8
%
-15.1
%
-31.7
%
-21.1
%
1.5
%
Total other income (expense), net699
2,248
(736
)
4,735
6,946
4,849
593.7
%
4,150
Income (loss) from continuing operations before Income taxes
(24,903
)
(26,874
)
(24,685
)
(42,392
)
(118,854
)
7,119
128.6
%
32,022
Income taxes expense (benefit)
2,315
3,562
5,835
(6,460
)
5,252
8,705
276.0
%
6,390
Net loss from continuing operations
(27,218
)
(30,436
)
(30,520
)
(35,932
)
(124,106
)
(1,586
)
94.2
%
25,632
Earnings from discontinued operations, net of tax
-
-
836
4,568
5,404
-
n/a
-
Net loss
(27,218
)
(30,436
)
(29,684
)
(31,364
)
(118,702
)
(1,586
)
94.2
%
25,632
Diluted loss per share
(0.40
)
(0.45
)
(0.46
)
(0.48
)
(1.79
)
(0.02
)
94.0
%
0.37
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
Diluted shares
69,195
67,568
65,356
66,268
67,097
67,388
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 Net Cash Provided by (Used in) Operating Activities-Continuing Operations
(33,369
)
21,375
15,770
30,665
34,441
25,693
Less: Capital expenditures
(1,741
)
(2,673
)
(179
)
(103
)
(4,696
)
(53
)
Free Cash Flow to Equity(35,110
)
18,702
15,591
30,562
29,745
25,640
(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 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) 06/30/22 09/30/22 12/31/22 03/31/23 FY2023 06/30/23 Expenses, continuing operations: Cost of revenue41,021
42,304
43,287
43,472
170,084
45,621
Research and development
47,661
46,139
43,175
52,220
189,195
34,519
Sales and marketing
51,280
45,949
47,702
57,506
202,437
44,879
General and administrative
27,144
28,718
36,657
32,832
125,351
26,664
Gains, losses and other items, net
739
13,111
11,743.00
9,723
35,316
116
Gross profit, continuing operations:
101,222
104,795
115,328
105,154
426,499
108,448
% Gross margin
71.2
%
71.2
%
72.7
%
70.8
%
71.5
%
70.4
%
Excluded items: Purchased intangible asset amortization (cost of revenue)4,643
4,637
4,209
3,336
16,825
3,290
Non-cash stock compensation (cost of revenue)
1,163
1,293
1,208
2,653
6,317
629
Non-cash stock compensation (research and development)
11,656
12,360
10,654
20,737
55,407
5,077
Non-cash stock compensation (sales and marketing)
5,884
6,116
5,871
11,558
29,429
3,736
Non-cash stock compensation (general and administrative)
5,522
7,524
11,891
9,710
34,647
3,850
Restructuring and merger charges (gains, losses, and other)
739
13,111
11,743
9,723
35,316
116
Transformation costs (general and administrative)
-
1,250
4,112
3,663
9,025
1,875
Total excluded items
29,607
46,291
49,688
61,380
186,966
18,573
Expenses, continued operations excluding items: Cost of revenue
35,215
36,374
37,870
37,483
146,942
41,702
Research and development
36,005
33,779
32,521
31,483
133,788
29,442
Sales and marketing
45,396
39,833
41,831
45,948
173,008
41,143
General and administrative
21,622
19,944
20,654
19,459
81,679
20,939
Gains, losses and other items, net
-
-
-
-
-
-
Gross profit, continued operations excluding items:
107,028
110,725
120,745
111,143
449,641
112,367
% Gross margin
75.2
%
75.3
%
76.1
%
74.8
%
75.4
%
72.9
%
(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 Income (loss) from continuing operations before Income taxes(24,903
)
(26,874
)
(24,685
)
(42,392
)
(118,854
)
7,119
Income taxes (benefit)
2,315
3,562
5,835
(6,460
)
5,252
8,705
Net earnings (loss) from continuing operations
(27,218
)
(30,436
)
(30,520
)
(35,932
)
(124,106
)
(1,586
)
Earnings from discontinued operations, net of tax-
-
836
4,568
5,404
-
Net earnings (loss)
(27,218
)
(30,436
)
(29,684
)
(31,364
)
(118,702
)
(1,586
)
Earnings (loss) per share: Basic(0.40
)
(0.45
)
(0.46
)
(0.48
)
(1.79
)
(0.02
)
Diluted(0.40
)
(0.45
)
(0.46
)
(0.48
)
(1.79
)
(0.02
)
Excluded items: Purchased intangible asset amortization (cost of revenue)4,643
4,637
4,209
3,336
16,825
3,290
Non-cash stock compensation (cost of revenue and operating expenses)
24,225
27,293
29,624
44,658
125,800
13,292
Restructuring and merger charges (gains, losses, and other)
739
13,111
11,743
9,723
35,316
116
Transformation costs (general and administrative)
-
1,250
4,112
3,663
9,025
1,875
Total excluded items from continuing operations
29,607
46,291
49,688
61,380
186,966
18,573
Income from continuing operations before Income taxes and excluding items
4,704
19,417
25,003
18,988
68,112
25,692
Income taxes expense (benefit)
1,237
4,557
6,468
(2,141
)
10,121
6,167
Non-GAAP net earnings from continuing operations
3,467
14,860
18,535
21,129
57,991
19,525
Non-GAAP earnings per share from continuing operations: Basic
0.05
0.22
0.29
0.32
0.87
0.29
Diluted
0.05
0.22
0.28
0.32
0.86
0.29
Basic weighted average shares
68,403
67,096
64,784
65,126
66,352
66,497
Diluted weighted average shares
69,195
67,568
65,356
66,268
67,097
67,388
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 September 30, 2023 March 31, 2024 Low High GAAP income from operations
1,000
2,000
5,000
Excluded items: Purchased intangible asset amortization
1,000
7,000
7,000
Non-cash stock compensation
16,000
72,000
72,000
Restructuring charges
1,000
7,000
7,000
Transformation costs
-
2,000
2,000
Total excluded items
18,000
88,000
88,000
Non-GAAP income from operations$
19,000
$
90,000
$
93,000
(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
Q1 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 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 and again during fiscal 2023 in response to macroeconomic conditions, we incurred significant costs associated with the assessment of strategic and operating plans, including our long-term location strategy, and assistance in implementing the restructuring activities as a result of this assessment. Our criteria for excluding these costs are the same. We believe excluding these items from our non-GAAP financial measures is useful for investors and provides meaningful supplemental information.
Our non-GAAP financial schedules are:
Non-GAAP EPS, Non-GAAP Income from Operations, and Non-GAAP expenses: Our Non-GAAP earnings per share, Non-GAAP income from operations, and Non-GAAP expenses reflect adjustments as described above, as well as the related tax effects where applicable.
Adjusted EBITDA: Adjusted EBITDA is defined as net income from continuing operations before income taxes, other expenses, depreciation and amortization, and including adjustments as described above. We use Adjusted EBITDA to measure our performance from period to period both at the consolidated level as well as within our operating segments and to compare our results to those of our competitors. We believe that the inclusion of Adjusted EBITDA provides useful supplementary information to and facilitates analysis by investors in evaluating the Company's performance and trends. The presentation of Adjusted EBITDA is not meant to be considered in isolation or as an alternative to net earnings as an indicator of our performance.
Free Cash Flow to Equity: To supplement our statement of cash flows, we use a non-GAAP measure of cash flow to analyze cash flows generated from operations. Free cash flow to equity is defined as operating cash flow less cash used by investing activities (excluding the impact of cash paid in acquisitions), less required payments of debt, and excluding the impact of discontinued operations. Management believes that this measure of cash flow is meaningful since it represents the amount of money available from continuing operations for the Company's discretionary spending after funding all required obligations including scheduled debt payments. The presentation of non-GAAP free cash flow to equity is not meant to be considered in isolation or as an alternative to cash flows from operating activities as a measure of liquidity.
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