LiveRamp Announces Fourth Quarter and Fiscal Year Results
LiveRamp® (NYSE: RAMP), the leading global data connectivity platform, today announced its financial results for the fourth quarter and fiscal year ended March 31, 2020.
This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20200521005703/en/
Fourth Quarter Financial Highlights
Total revenue was $106 million, up 35% compared to the prior year period. Subscription revenue was $84 million, up 28% and contributed 79% of total revenue. Marketplace & Other revenue was $22 million, up 71%. GAAP gross profit was $69 million, up 70% compared to the prior year period. GAAP gross margin of 65% expanded 13 percentage points. Non-GAAP gross profit was $75 million, up 59% compared to the prior year period. Non-GAAP gross margin of 71% expanded 11 percentage points. GAAP operating loss was $41 million compared to a GAAP operating loss of $82 million in the prior year period. Non-GAAP operating loss was $16 million compared to a non-GAAP operating loss of $22 million in the prior year period. GAAP loss per share from continuing operations was $0.07, and non-GAAP loss per share from continuing operations was $0.05. GAAP and non-GAAP operating results include an incremental $3.5 million bad debt charge largely as a result of current economic conditions. Net cash provided by operating activities was roughly break-even compared to net cash provided by operating activities of $38 million during the fourth quarter of fiscal 2019. Prior year cash flow from operating activities included a $55 million cash tax benefit associated with the sale of the Acxiom Marketing Solutions (AMS) business. As of May 20, 2020, LiveRamp has repurchased 3.1 million shares for $103 million under the current stock repurchase program since December 31, 2019. Since August 2011, the Company has returned over $1.17 billion in capital to shareholders.Fiscal Year Financial Highlights
Total revenue was $381 million, up 33% compared to the prior year. Subscription revenue was $306 million, up 29% and contributed 80% of total revenue. Marketplace & Other revenue was $75 million, up 53%. GAAP gross profit was $228 million, up 38% compared to the prior year. GAAP gross margin of 60% expanded 2 percentage points. Non-GAAP gross profit was $253 million, up 34% compared to the prior year. Non-GAAP gross margin of 67% expanded 1 percentage point. GAAP operating loss was $181 million compared to a GAAP operating loss of $198 million in the prior year. Non-GAAP operating loss was $64 million compared to a non-GAAP operating loss of $54 million in the prior year. GAAP loss per share from continuing operations was $1.85, and non-GAAP loss per share from continuing operations was $0.55. Net cash used in operating activities was $29 million compared to net cash used in operating activities of $2 million during the prior year. Prior year cash flow from operating activities included a $55 million cash tax benefit associated with the sale of the Acxiom Marketing Solutions (AMS) business. Cash and cash equivalents totaled $718 million with no debt at quarter end as compared to $767 million at December 31, 2019.A reconciliation between GAAP and non-GAAP results is provided in the schedules to this press release.
“During this unprecedented time, we remain focused on the health and well-being of our employees and partners who continue to serve our global network of customers,” said LiveRamp CEO Scott Howe. “Now more than ever, it is important for brands to remain close to their customers and to demonstrate that their marketing investments are driving real results and returns. LiveRamp plays a critical role in enabling enterprise marketers to spend smarter. Our product suite, and in particular the Authenticated Traffic Solution® (or ATS), Safe Haven® and Advanced TV products, ensure every marketing dollar spent is addressable, accountable and measurable.”
“I would also like to take this opportunity to thank the entire LiveRamp team for the resiliency and exceptionalism they have demonstrated during this period,” added Howe. “In times of adversity, the true character of a team emerges, and I could not be more proud to lead this incredible group of people.”
COVID-19 Business Update
“LiveRamp, along with most companies, is being impacted by the COVID-19 crisis. That said, we are fortunate to be operating from a position of strength,” said LiveRamp President and CFO Warren Jenson. “In addition to our robust balance sheet, we have great customers, dedicated employees, a subscription business model and products that benefit from the secular wave toward outcome-based marketing and advertising. However, we are watching and monitoring our business closely, and in particular, usage trends and our Data Marketplace.”
LiveRamp has taken proactive steps to keep its employees safe and global customer base serviced during these unprecedented times:
In early March, LiveRamp, in coordination with local government guidance, began implementing its Pandemic Plan for staged movement to work from home in order to protect its workforce. The vast majority of LiveRamp’s global employees have seamlessly transitioned to working remotely. Given the SaaS nature of its model, LiveRamp does not depend on any on-premise components or personnel for the products and services it provides. LiveRamp is, however, dependent on its cloud infrastructure and the ability for its workforce to work remotely. To date, service to customers and partners has continued uninterrupted. LiveRamp’s balance sheet remains exceptionally strong, with over $700 million of cash and no debt at year-end. The company is carefully managing working capital, tightening its hiring practices and reducing costs where appropriate. The company increased its reserves for bad debts during the fourth quarter by approximately $3.5 million in response to increased future collection risk associated with certain customer segments.GAAP and Non-GAAP Results
The following table summarizes the Company’s financial results for its fourth fiscal quarter and fiscal year ($ in millions):
Q4 Fiscal 2020
Full Year Fiscal 2020
Results
Results
GAAP
Non-GAAP
GAAP
Non-GAAP
Subscription revenue
$84
—
$306
—
YoY change %
28%
29%
Marketplace & other revenue
$22
—
$75
—
YoY change %
71%
53%
Total revenue
$106
—
$381
—
YoY change %
35%
33%
Gross profit
$69
$75
$228
$253
% Gross margin
65%
71%
60%
67%
YoY change, pts
13pts
11pts
2pts
1pts
Operating loss
($41)
($16)
($181)
($64)
% Operating margin
(39%)
(15%)
(48%)
(17%)
YoY change, pts
66pts
14pts
22pts
2pts
Net loss from continuing operations
($5)
($3)
($125)
($37)
YoY change %
nm
nm
nm
nm
Loss per share from continuing operations
($0.07)
($0.05)
($1.85)
($0.55)
YoY change %
nm
nm
nm
nm
Shares to Calculate EPS
67.0
67.0
67.8
67.8
YoY change %
(2%)
(2%)
(10%)
(10)%
Net operating cash flow
($0)
—
($29)
—
YoY change %
nm
—
nm
Free cash flow to equity
—
($2)
—
($40)
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 Metrics & Highlights
LiveRamp added 10 net new direct subscription customers during the quarter, bringing its total direct customer count to 780, an increase of 17% year over year. It now serves 22% of the Fortune 500 compared to 19% in the prior year period. LiveRamp has 53 clients whose subscription contracts exceed $1 million in annual revenue, up from 46 in the prior year period. During the fourth quarter, subscription net retention was approximately 110%. Platform net retention was 122% driven by strong Marketplace & Other trends. Current remaining performance obligations (RPO), which is contracted and committed revenue expected to be recognized over the next 12 months, was $221 million, up 29% compared to the fourth quarter of last year. The company recently launched LiveRamp Safe Haven, a new platform that enables secure, permission-enabled data collaboration for brands and their partners. Two of the top five largest U.S. retailers are implementing Safe Haven, and to date, more than 35 companies world-wide are using this technology in their workflows. LiveRamp addressability solutions, including ATS, continue to experience strong global adoption. There are currently 18 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 35 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 45 publishers globally for ATS, spanning the US, UK, France, Spain, Italy, and Japan.Board of Directors Update
LiveRamp also announced today that William T. Dillard II is retiring from the LiveRamp Board of Directors when his current term ends at the next annual meeting of shareholders, expected to be held in August 2020. Mr. Dillard has been a trusted advisor during the company’s evolution.
“Bill’s guidance has been invaluable to LiveRamp, and I want to personally thank him for his decades of service to the company. Bill has brought a strong customer perspective plus a wealth of executive experience to LiveRamp. He was instrumental in transforming the company into a category-creating software business. Both the board and the leadership team are deeply appreciative of Bill’s long service to LiveRamp,” said Scott Howe.
Financial Outlook
Given uncertainties related to the rapidly changing global economic environment, LiveRamp is providing first quarter guidance only.
LiveRamp’s non-GAAP guidance excludes the impact of non-cash stock compensation, purchased intangible asset amortization, and restructuring and related charges.
For the first quarter of fiscal 2021, LiveRamp expects to report:
Revenue of approximately $88 million, an increase of approximately 7% year-over-year. GAAP operating loss from continuing operations of up to $47 million. Non-GAAP operating loss of up to $12 million.Conference 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 suppliers and customers; 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 2019 ended March 31, 2019, and LiveRamp's Quarterly Reports on Form 10-Q issued in fiscal year 2020.
The financial information set forth in this press release reflects estimates based on information available at this time. These amounts could differ from actual reported amounts stated in LiveRamp’s Annual Report on Form 10-K for the period ended March 31, 2020, which LiveRamp expects to file by end of May 2020.
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Ⓡ, IdentityLinkTM, 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 CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (Dollars in thousands, except per share amounts) For the Three Months Ended March 31,
$
%
2020
2019
Variance
Variance
Revenues105,701
78,316
27,385
35.0
%
Cost of revenue36,852
37,760
(908
)
(2.4
%)
Gross profit68,849
40,556
28,293
69.8
%
% Gross margin65.1
%
51.8
%
Operating expenses: Research and development28,411
31,318
(2,907
)
(9.3
%)
Sales and marketing48,564
49,223
(659
)
(1.3
%)
General and administrative30,216
27,749
2,467
8.9
%
Gains, losses and other items, net2,447
14,400
(11,953
)
(83.0
%)
Total operating expenses109,638
122,690
(13,052
)
(10.6
%)
Loss from operations(40,789
)
(82,134
)
41,345
50.3
%
% Margin-38.6
%
-104.9
%
Total other income1,565
8,311
(6,746
)
(81.2
%)
Loss from continuing operations before income taxes(39,224
)
(73,823
)
34,599
46.9
%
Income taxes (benefit)(34,345
)
(24,135
)
(10,210
)
(42.3
%)
Net loss from continuing operations(4,879
)
(49,688
)
44,809
90.2
%
Earnings from discontinued operations, net of tax750
4,227
(3,477
)
(82.3
%)
Net loss(4,129
)
(45,461
)
41,332
90.9
%
Basic earnings (loss) per share: Continuing operations(0.07
)
(0.73
)
0.66
90.0
%
Discontinued operations0.01
0.06
(0.05
)
(82.3
%)
Net loss(0.06
)
(0.67
)
0.60
90.7
%
Diluted earnings (loss) per share: Continuing operations(0.07
)
(0.73
)
0.66
90.0
%
Discontinued operations0.01
0.06
(0.05
)
(82.3
%)
Net loss(0.06
)
(0.67
)
0.60
90.7
%
Basic weighted average shares66,977
68,299
Diluted weighted average shares
66,977
68,299
LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (Dollars in thousands, except per share amounts) For the Twelve Months Ended March 31,
$
%
2020
2019
Variance
Variance
Revenues380,572
285,620
94,952
33.2
%
Cost of revenue152,704
120,718
31,986
26.5
%
Gross profit227,868
164,902
62,966
38.2
%
% Gross margin59.9
%
57.7
%
Operating expenses: Research and development105,981
85,697
20,284
23.7
%
Sales and marketing188,905
158,540
30,365
19.2
%
General and administrative108,903
98,878
10,025
10.1
%
Gains, losses and other items, net5,001
19,933
(14,932
)
(74.9
%)
Total operating expenses408,790
363,048
45,742
12.6
%
Loss from operations(180,922
)
(198,146
)
17,224
8.7
%
% Margin-47.5
%
-69.4
%
Total other income15,385
18,790
(3,405
)
(18.1
%)
Loss from continuing operations before income taxes(165,537
)
(179,356
)
13,819
7.7
%
Income taxes (benefit)(40,276
)
(45,409
)
5,133
11.3
%
Net loss from continuing operations(125,261
)
(133,947
)
8,686
6.5
%
Earnings from discontinued operations, net of tax750
1,162,494
(1,161,744
)
(99.9
%)
Net earnings (loss)(124,511
)
1,028,547
(1,153,058
)
(112.1
%)
Basic earnings (loss) per share: Continuing operations(1.85
)
(1.79
)
(0.06
)
(3.6
%)
Discontinued operations0.01
15.50
(15.49
)
(99.9
%)
Net earnings (loss)(1.84
)
13.71
(15.55
)
(113.4
%)
Diluted earnings (loss) per share: Continuing operations(1.85
)
(1.79
)
(0.06
)
(3.6
%)
Discontinued operations0.01
15.50
(15.49
)
(99.9
%)
Net earnings (loss)(1.84
)
13.71
(15.55
)
(113.4
%)
Basic weighted average shares67,760
75,020
Diluted weighted average shares
67,760
75,020
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 Twelve Months Ended
March 31,
March 31,
2020
2019
2020
2019
Loss from continuing operations before income taxes(39,224
)
(73,823
)
(165,537
)
(179,356
)
Income taxes (benefit)(34,345
)
(24,135
)
(40,276
)
(45,409
)
Net loss from continuing operations(4,879
)
(49,688
)
(125,261
)
(133,947
)
Earnings from discontinued operations, net of tax750
4,227
750
1,162,494
Net earnings (loss)
(4,129
)
(45,461
)
(124,511
)
1,028,547
Earnings (loss) per share: Basic
(0.06
)
(0.67
)
(1.84
)
13.71
Diluted
(0.06
)
(0.67
)
(1.84
)
13.71
Excluded items: Purchased intangible asset amortization (cost of revenue)
5,181
2,981
19,042
15,858
Non-cash stock compensation (cost of revenue and operating expenses)
17,168
41,175
89,447
102,722
Accelerated depreciation (cost of revenue and operating expenses)
-
1,853
3,569
3,812
Restructuring and merger charges (gains, losses, and other)
2,447
14,400
5,001
19,933
Separation and transformation costs (general and administrative)
-
(705
)
-
2,117
Total excluded items, continuing operations
24,796
59,704
117,059
144,442
Loss from continuing operations before income taxes and excluding items
(14,428
)
(14,119
)
(48,478
)
(34,914
)
Income taxes (benefit) (2)(11,199
)
(5,155
)
(11,452
)
(12,964
)
Non-GAAP net loss from continuing operations(3,229
)
(8,964
)
(37,026
)
(21,950
)
Non-GAAP loss per share from continuing operations: Basic(0.05
)
(0.13
)
(0.55
)
(0.29
)
Diluted(0.05
)
(0.13
)
(0.55
)
(0.29
)
Basic weighted average shares66,977
68,299
67,760
75,020
Diluted weighted average shares
66,977
68,299
67,760
75,020
(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 77.6% and 36.5% in the fourth quarter of fiscal 2020 and 2019, respectively, and 23.6% and 37.1% for the twelve months ended March 31, 2020 and 2019, 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 LOSS FROM OPERATIONS (1) (Unaudited) (Dollars in thousands)For the Three Months Ended
For the Twelve Months Ended
March 31,
March 31,
2020
2019
2020
2019
Loss from continuing operations(40,789
)
(82,134
)
(180,922
)
(198,146
)
Excluded items: Purchased intangible asset amortization (cost of revenue)5,181
2,981
19,042
15,858
Non-cash stock compensation (cost of revenue and operating expenses)
17,168
41,175
89,447
102,722
Accelerated depreciation (cost of revenue and operating expenses)
-
1,853
3,569
3,812
Restructuring and merger charges (gains, losses, and other)
2,447
14,400
5,001
19,933
Separation and transformation costs (general and administrative)
-
(705
)
-
2,117
Total excluded items
24,796
59,704
117,059
144,442
Loss from continuing operations before excluded items
(15,993
)
(22,430
)
(63,863
)
(53,704
)
(1) This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our condensed consolidated financial statements prepared in accordance with GAAP. For a detailed explanation of the adjustments made to comparable GAAP measures, the reasons why management uses these measures and the material limitations on the usefulness of these measures, please see Appendix A.
LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES RECONCILIATION OF ADJUSTED EBITDA (1) (Unaudited) (Dollars in thousands) For the Three Months Ended For the Twelve Months Ended March 31, March 31,2020
2019
2020
2019
Net loss from continuing operations(4,879
)
(49,688
)
(125,261
)
(133,947
)
Income taxes (benefit)(34,345
)
(24,135
)
(40,276
)
(45,409
)
Other income(1,565
)
(8,311
)
(15,385
)
(18,790
)
Loss from operations(40,789
)
(82,134
)
(180,922
)
(198,146
)
Depreciation and amortization7,943
8,508
35,901
33,782
EBITDA
(32,846
)
(73,626
)
(145,021
)
(164,364
)
Other adjustments: Non-cash stock compensation (cost of revenue and operating expenses)17,168
41,175
89,447
102,722
Restructuring and merger charges (gains, losses, and other)
2,447
14,400
5,001
19,933
Separation and transformation costs (general and administrative)
-
(705
)
-
2,117
Other adjustments
19,615
54,870
94,448
124,772
Adjusted EBITDA
(13,231
)
(18,756
)
(50,573
)
(39,592
)
(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 CONSOLIDATED BALANCE SHEETS (Dollars in thousands)March 31,
March 31,
$
%
2020
2019
Variance
Variance
Assets Current assets: Cash and cash equivalents717,811
1,061,473
(343,662
)
(32.4
%)
Restricted cash14,815
-
14,815
n/a
Trade accounts receivable, net
92,761
78,563
14,198
18.1
%
Refundable income taxes38,340
7,890
30,450
385.9
%
Other current assets32,666
44,150
(11,484
)
(26.0
%)
Total current assets896,393
1,192,076
(295,683
)
(24.8
%)
Property and equipment44,786
64,852
(20,066
)
(30.9
%)
Less - accumulated depreciation and amortization25,465
38,809
(13,344
)
(34.4
%)
Property and equipment, net19,321
26,043
(6,722
)
(25.8
%)
Intangible assets, net45,200
28,592
16,608
58.1
%
Goodwill297,796
204,656
93,140
45.5
%
Deferred commissions, net16,014
10,741
5,273
49.1
%
Other assets, net27,165
10,803
16,362
151.5
%
1,301,889
1,472,911
(171,022
)
(11.6
%)
Liabilities and Stockholders' Equity Current liabilities: Trade accounts payable42,204
31,203
11,001
35.3
%
Accrued payroll and related expenses28,791
18,715
10,076
53.8
%
Other accrued expenses68,991
40,916
28,075
68.6
%
Acquisition escrow payable14,815
-
14,815
n/a
Deferred revenue
6,581
4,284
2,297
53.6
%
Total current liabilities161,382
95,118
66,264
69.7
%
Other liabilities52,995
46,961
6,034
12.8
%
Stockholders' equity: Preferred stock-
-
0
0.0
%
Common stock14,394
14,187
207
1.5
%
Additional paid-in capital1,496,565
1,406,813
89,752
6.4
%
Retained earnings1,545,094
1,669,605
(124,511
)
(7.5
%)
Accumulated other comprehensive income5,745
7,801
(2,056
)
(26.4
%)
Treasury stock, at cost(1,974,286
)
(1,767,574
)
(206,712
)
(11.7
%)
Total stockholders' equity1,087,512
1,330,832
(243,320
)
(18.3
%)
1,301,889
1,472,911
(171,022
)
(11.6
%)
LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Dollars in thousands) For the Three Months Ended March 31,2020
2019
Cash flows from operating activities: Net loss(4,129
)
(45,461
)
Earnings from discontinued operations, net of tax(750
)
(4,227
)
Non-cash operating activities: Depreciation and amortization7,943
8,508
Loss on disposal or impairment of assets
1,865
115
Provision for doubtful accounts
3,450
1,810
Deferred income taxes
(8,343
)
(18,639
)
Non-cash stock compensation expense17,168
41,175
Changes in operating assets and liabilities: Accounts receivable, net
(8,667
)
(9,400
)
Deferred commissions(2,563
)
(1,263
)
Other assets(8,548
)
1,781
Accounts payable and other liabilities
12,326
6,804
Income taxes, net
(12,030
)
55,134
Deferred revenue
2,058
2,017
Net cash provided by (used in) operating activities
(220
)
38,354
Cash flows from investing activities: Capital expenditures
(1,409
)
(3,347
)
Proceeds from sales of assets356
-
Cash paid in acquisition, net of cash received
-
-
Net cash used in investing activities
(1,053
)
(3,347
)
Cash flows from financing activities: Proceeds related to the issuance of common stock under stock and employee benefit plans1,331
3,064
Shares repurchased for tax withholdings upon vesting of stock-based awards
(6,465
)
(13,614
)
Acquisition of treasury stock(61,002
)
(10,314
)
Net cash used in financing activities(66,136
)
(20,864
)
Cash flows from discontinued operations: From operating activities(207
)
(499,505
)
From investing activities18,582
-
Effect of exchange rate changes on cash
-
-
Net cash provided by (used in) discontinued operations
18,375
(499,505
)
Effect of exchange rate changes on cash(355
)
61
Net change in cash, cash equivalents and restricted cash
(49,389
)
(485,301
)
Cash, cash equivalents and restricted cash at beginning of period782,015
1,546,774
Cash, cash equivalents and restricted cash at end of period
732,626
1,061,473
Supplemental cash flow information: Cash paid (received) during the period for: Income taxes
(13,515
)
438,875
LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Dollars in thousands) For the Twelve Months Ended March 31,
2020
2019
Cash flows from operating activities: Net earnings (loss)(124,511
)
1,028,547
Earnings from discontinued operations, net of tax
(750
)
(1,162,494
)
Non-cash operating activities: Depreciation and amortization35,901
33,782
Loss on disposal or impairment of assets
1,725
3,460
Provision for doubtful accounts
7,133
3,069
Deferred income taxes
(6,878
)
9,894
Non-cash stock compensation expense
89,447
102,722
Changes in operating assets and liabilities: Accounts receivable, net
(20,518
)
(44,411
)
Deferred commissions(5,273
)
(4,298
)
Other assets(6,144
)
(3,106
)
Accounts payable and other liabilities24,923
25,308
Income taxes, net
(25,453
)
5,087
Deferred revenue
1,823
462
Net cash used in operating activities
(28,575
)
(1,978
)
Cash flows from investing activities: Capitalized software-
(1,322
)
Capital expenditures(11,711
)
(7,320
)
Proceeds from sales of assets873
-
Payments for investments
-
(2,500
)
Cash paid in acquisition, net of cash received(105,365
)
-
Net cash used in investing activities
(116,203
)
(11,142
)
Cash flows from financing activities: Payments of debt-
(233,293
)
Fees from debt refinancing-
(300
)
Proceeds related to the issuance of common stock under stock and employee benefit plans4,736
20,419
Shares repurchased for tax withholdings upon vesting of stock-based awards
(24,522
)
(50,520
)
Acquisition of treasury stock(182,190
)
(74,421
)
Acquisition of treasury stock from tender offer-
(503,393
)
Net cash used in financing activities
(201,976
)
(841,508
)
Cash flows from discontinued operations: From operating activities(207
)
(458,525
)
From investing activities18,582
2,236,530
Effect of exchange rate changes on cash
-
(172
)
Net cash provided by discontinued operations18,375
1,777,833
Effect of exchange rate changes on cash
(468
)
(1,750
)
Net change in cash, cash equivalents and restricted cash(328,847
)
921,455
Cash, cash equivalents and restricted cash at beginning of period
1,061,473
140,018
Cash, cash equivalents and restricted cash at end of period
732,626
1,061,473
Supplemental cash flow information: Cash paid (received) during the period for: Income taxes
(7,344
)
439,542
LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES CALCULATION OF FREE CASH FLOW TO EQUITY (1) (Unaudited) (Dollars in thousands) 06/30/18 09/30/18 12/31/18 03/31/19 FY2019 06/30/19 09/30/19 12/31/19 03/31/20 FY2020 Net Cash Provided by (Used in) Operating Activities of Continuing Operations
(2,280
)
(27,130
)
(10,922
)
38,354
(1,978
)
(15,408
)
(28,751
)
15,804
(220
)
(28,575
)
Less: Capitalized software(899
)
(423
)
-
-
(1,322
)
-
-
-
-
-
Capital expenditures
(712
)
(1,323
)
(1,938
)
(3,347
)
(7,320
)
(4,888
)
(2,641
)
(2,773
)
(1,409
)
(11,711
)
Required debt payments(592
)
(2,701
)
-
-
(3,293
)
-
-
-
-
-
Free Cash Flow to Equity
(4,483
)
(31,577
)
(12,860
)
35,007
(13,913
)
(20,296
)
(31,392
)
13,031
(1,629
)
(40,286
)
(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 CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (Dollars in thousands, except per share amounts)
FY20 to FY19
06/30/18 09/30/18 12/31/18 03/31/19 FY2019 06/30/19 09/30/19 12/31/19 03/31/20 FY2020%
$
Revenues62,471
64,812
80,021
78,316
285,620
82,511
90,143
102,217
105,701
380,572
33.2
%
94,952
Cost of revenue
23,654
24,466
34,838
37,760
120,718
36,426
41,460
37,966
36,852
152,704
26.5
%
31,986
Gross profit
38,817
40,346
45,183
40,556
164,902
46,085
48,683
64,251
68,849
227,868
38.2
%
62,966
% Gross margin
62.1
%
62.3
%
56.5
%
51.8
%
57.7
%
55.9
%
54.0
%
62.9
%
65.1
%
59.9
%
Operating expenses Research and development16,970
16,940
20,469
31,318
85,697
23,722
26,445
27,403
28,411
105,981
23.7
%
20,284
Sales and marketing
33,323
35,940
40,054
49,223
158,540
43,144
45,204
51,993
48,564
188,905
19.2
%
30,365
General and administrative
18,125
25,176
27,828
27,749
98,878
25,318
27,262
26,107
30,216
108,903
10.1
%
10,025
Gains, losses and other items, net
1
489
5,043
14,400
19,933
2,276
45
233
2,447
5,001
(74.9
%)
(14,932
)
Total operating expenses68,419
78,545
93,394
122,690
363,048
94,460
98,956
105,736
109,638
408,790
12.6
%
45,742
Loss from operations
(29,602
)
(38,199
)
(48,211
)
(82,134
)
(198,146
)
(48,375
)
(50,273
)
(41,485
)
(40,789
)
(180,922
)
8.7
%
17,224
% Margin
-47.4
%
-58.9
%
-60.2
%
-104.9
%
-69.4
%
-58.6
%
-55.8
%
-40.6
%
-38.6
%
-47.5
%
Total other income (expense)356
(281
)
10,404
8,311
18,790
5,882
4,780
3,158
1,565
15,385
(18.1
%)
(3,405
)
Loss from continuing operations before income taxes(29,246
)
(38,480
)
(37,807
)
(73,823
)
(179,356
)
(42,493
)
(45,493
)
(38,327
)
(39,224
)
(165,537
)
7.7
%
13,819
Income taxes (benefit)
(1,428
)
2,700
(22,546
)
(24,135
)
(45,409
)
(353
)
(5,291
)
(287
)
(34,345
)
(40,276
)
11.3
%
5,133
Net loss from continuing operations
(27,818
)
(41,180
)
(15,261
)
(49,688
)
(133,947
)
(42,140
)
(40,202
)
(38,040
)
(4,879
)
(125,261
)
6.5
%
8,686
Earnings from discontinued operations, net of tax
24,803
61,803
1,071,661
4,227
1,162,494
-
-
-
750
750
(99.9
%)
(1,161,744
)
Net earnings (loss)(3,015
)
20,623
1,056,400
(45,461
)
1,028,547
(42,140
)
(40,202
)
(38,040
)
(4,129
)
(124,511
)
(112.1
%)
(1,153,058
)
Diluted earnings (loss) per share(0.04
)
0.27
13.65
(0.67
)
13.71
(0.61
)
(0.59
)
(0.56
)
(0.06
)
(1.84
)
(113.4
%)
(15.55
)
Diluted loss per share continuing operations(0.36
)
(0.53
)
(0.20
)
(0.73
)
(1.79
)
(0.61
)
(0.59
)
(0.56
)
(0.07
)
(1.85
)
(31.8
%)
(0.06
)
Some earnings (loss) per share amounts may not add due to rounding. Basic shares76,935
77,448
77,398
68,299
75,020
68,906
67,684
67,473
66,977
67,760
Diluted shares
76,935
77,448
77,398
68,299
75,020
68,906
67,684
67,473
66,977
67,760
LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES RECONCILIATION OF GAAP TO NON-GAAP EPS (1) (Unaudited) (Dollars in thousands, except per share amounts) 06/30/18 09/30/18 12/31/18 03/31/19 FY2019 06/30/19 09/30/19 12/31/19 03/31/20 FY2020 Loss from continuing operations before income taxes
(29,246
)
(38,480
)
(37,807
)
(73,823
)
(179,356
)
(42,493
)
(45,493
)
(38,327
)
(39,224
)
(165,537
)
Income taxes (benefit)(1,428
)
2,700
(22,546
)
(24,135
)
(45,409
)
(353
)
(5,291
)
(287
)
(34,345
)
(40,276
)
Net loss from continuing operations(27,818
)
(41,180
)
(15,261
)
(49,688
)
(133,947
)
(42,140
)
(40,202
)
(38,040
)
(4,879
)
(125,261
)
Earnings from discontinued operations, net of tax24,803
61,803
1,071,661
4,227
1,162,494
-
-
-
750
750
Net earnings (loss)
(3,015
)
20,623
1,056,400
(45,461
)
1,028,547
(42,140
)
(40,202
)
(38,040
)
(4,129
)
(124,511
)
Earnings (loss) per share: Basic(0.04
)
0.27
13.65
(0.67
)
13.71
(0.61
)
(0.59
)
(0.56
)
(0.06
)
(1.84
)
Diluted(0.04
)
0.27
13.65
(0.67
)
13.71
(0.61
)
(0.59
)
(0.56
)
(0.06
)
(1.84
)
Excluded items: Purchased intangible asset amortization (cost of revenue)5,970
3,548
3,359
2,981
15,858
3,123
5,369
5,369
5,181
19,042
Non-cash stock compensation (cost of revenue and operating expenses)
17,798
17,667
26,082
41,175
102,722
18,630
23,354
30,295
17,168
89,447
Accelerated depreciation (cost of revenue and operating expenses)
-
-
1,959
1,853
3,812
1,906
1,663
-
-
3,569
Restructuring and merger charges (gains, losses, and other)
1
489
5,043
14,400
19,933
2,276
45
233
2,447
5,001
Separation and transformation costs (general and administrative)
-
2,122
700
(705
)
2,117
-
-
-
-
-
Total excluded items, continuing operations
23,769
23,826
37,143
59,704
144,442
25,935
30,431
35,897
24,796
117,059
Loss from continuing operations before income taxes and excluding items
(5,477
)
(14,654
)
(664
)
(14,119
)
(34,914
)
(16,558
)
(15,062
)
(2,430
)
(14,428
)
(48,478
)
Income taxes (benefit)(1,078
)
(3,790
)
(2,941
)
(5,155
)
(12,964
)
(216
)
190
(227
)
(11,199
)
(11,452
)
Non-GAAP net earnings (loss) from continuing operations(4,399
)
(10,864
)
2,277
(8,964
)
(21,950
)
(16,342
)
(15,252
)
(2,203
)
(3,229
)
(37,026
)
Non-GAAP earnings (loss) per share from continuing operations: Basic(0.06
)
(0.14
)
0.03
(0.13
)
(0.29
)
(0.24
)
(0.23
)
(0.03
)
(0.05
)
(0.55
)
Diluted(0.06
)
(0.14
)
0.03
(0.13
)
(0.29
)
(0.24
)
(0.23
)
(0.03
)
(0.05
)
(0.55
)
Basic weighted average shares76,935
77,448
77,398
68,299
75,020
68,906
67,684
67,473
66,977
67,760
Diluted weighted average shares
76,935
77,448
80,674
68,299
75,020
68,906
67,684
67,473
66,977
67,760
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) 06/30/18 09/30/18 12/31/18 03/31/19 FY2019 06/30/19 09/30/19 12/31/19 03/31/20 FY2020 Expenses, continuing operations: Cost of revenue23,654
24,466
34,838
37,760
120,718
36,426
41,460
37,966
36,852
152,704
Research and development
16,970
16,940
20,469
31,318
85,697
23,722
26,445
27,403
28,411
105,981
Sales and marketing
33,323
35,940
40,054
49,223
158,540
43,144
45,204
51,993
48,564
188,905
General and administrative
18,125
25,176
27,828
27,749
98,878
25,318
27,262
26,107
30,216
108,903
Gains, losses and other items, net
1
489
5,043
14,400
19,933
2,276
45
233
2,447
5,001
Gross profit, continuing operations:
38,817
40,346
45,183
40,556
164,902
46,085
48,683
64,251
68,849
227,868
% Gross margin
62.1
%
62.3
%
56.5
%
51.8
%
57.7
%
55.9
%
54.0
%
62.9
%
65.1
%
59.9
%
Excluded items: Purchased intangible asset amortization (cost of revenue)5,970
3,548
3,359
2,981
15,858
3,123
5,369
5,369
5,181
19,042
Non-cash stock compensation (cost of revenue)
711
782
1,052
2,163
4,708
755
1,060
1,028
926
3,769
Non-cash stock compensation (research and development)
4,342
3,745
5,945
14,193
28,225
4,451
6,346
6,462
6,001
23,260
Non-cash stock compensation (sales and marketing)
9,920
9,854
9,460
14,736
43,970
8,920
9,758
15,670
3,678
38,026
Non-cash stock compensation (general and administrative)
2,824
3,286
9,625
10,083
25,818
4,504
6,190
7,135
6,563
24,392
Accelerated depreciation (cost of revenue)
-
-
1,527
1,445
2,972
1,487
1,245
-
-
2,732
Accelerated depreciation (general and administrative)
-
-
432
408
840
419
418
-
-
837
Restructuring and merger charges (gains, losses, and other)
1
489
5,043
14,400
19,933
2,276
45
233
2,447
5,001
Separation and transformation costs (general and administrative)
-
2,122
700
(705
)
2,117
-
-
-
-
-
Total excluded items
23,769
23,826
37,143
59,704
144,442
25,935
30,431
35,897
24,796
117,059
Expenses, continued operations excluding items: Cost of revenue
16,972
20,136
28,900
31,171
97,179
31,061
33,786
31,569
30,745
127,161
Research and development
12,628
13,195
14,524
17,125
57,472
19,271
20,099
20,941
22,410
82,721
Sales and marketing
23,403
26,086
30,594
34,487
114,570
34,224
35,446
36,323
44,886
150,879
General and administrative
15,301
19,768
17,071
17,963
70,103
20,395
20,654
18,972
23,653
83,674
Gains, losses and other items, net
-
-
-
-
-
-
-
-
-
-
Gross profit, continuing operations excluding items:
45,499
44,676
51,121
47,145
188,441
51,450
56,357
70,648
74,956
253,411
% Gross margin
72.8
%
68.9
%
63.9
%
60.2
%
66.0
%
62.4
%
62.5
%
69.1
%
70.9
%
66.6
%
(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 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 June 30, 2020 GAAP loss from operations
(47,000
)
Excluded items: Purchased intangible asset amortization
5,000
Non-cash stock compensation
24,000
Restructuring and related costs
6,000
Total excluded items
35,000
Non-GAAP loss from operations
$
(12,000
)
(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 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
Q4 FISCAL 2020 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 per share, income 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.
Separation and transformation costs: In prior years, 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. Our criteria for excluding separation and 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 believe excluding these items from our non-GAAP financial measures is useful for investors and provides meaningful supplemental information.
Accelerated depreciation: In the prior and current year we are excluding 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 is 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.
Other key metrics may be defined as:
Subscription net retention: The current quarter subscription revenue (net) from customers who have been on the platform for one year or more, divided by the prior year quarter subscription revenue (net), inclusive of upsell, churn and downsell.
Platform net retention: The current quarter subscription and marketplace revenue (net) from customers who have been on the platform for one year or more, divided by the prior year quarter subscription and marketplace revenue (net), inclusive of upsell, churn and downsell.
Annualized recurring revenue (ARR): The monthly recurring revenue (last month of quarter), annualized. Recurring revenue is fixed and contracted subscription revenue and does not include any variable or non-recurring revenue amounts.
Our non-GAAP financial schedules are:
Non-GAAP EPS, Non-GAAP Income from Operations, and Non-GAAP Expenses and Gross Profit: Our Non-GAAP earnings per share, Non-GAAP income from operations, and Non-GAAP expenses and Gross Profit 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/20200521005703/en/