LiveRamp Announces Second Quarter Results
LiveRamp® (NYSE: RAMP), the trusted platform that makes data accessible and meaningful, today announced its financial results for the second quarter ended September 30, 2019.
This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20191106005973/en/
Financial Highlights
Total revenue was $90 million, up 39% compared to the prior year period. Subscription revenue was $72 million, up 31% and contributed 80% of total revenue. Marketplace & Other revenue was $18 million, up 83% compared to the prior year period. GAAP operating loss was $50 million compared to a GAAP operating loss of $38 million in the prior year period. Non-GAAP operating loss was $20 million compared to a non-GAAP operating loss of $14 million in the prior year period. GAAP loss per share from continuing operations was $0.59, and non-GAAP loss per share from continuing operations was $0.23. Net cash used in operating activities was $29 million compared to net cash used in operating activities of $27 million during the second quarter of fiscal 2019. LiveRamp has repurchased 2.1 million shares for $100.5 million under the current stock repurchase program since March 31, 2019. Since August 2011, the Company has returned over $1 billion in capital to shareholders. Cash and cash equivalents totaled $777 million with no debt at quarter end.“The quality of our quarter again demonstrates LiveRamp’s importance in the ecosystem,” said LiveRamp CEO Scott Howe. “Today, we work with 720 direct enterprise customers and serve thousands of additional companies through our partner network. We power more than 550 integrations and, with Data Plus Math, are providing a new way to buy, sell and measure advanced TV.”
“This was another outstanding quarter, fueled by record bookings and accelerating top-line growth,” said LiveRamp President and CFO Warren Jenson. “Our forward growth metrics remain strong: ARR exiting Q2 was up 40% year-over-year, and our Marketplace business grew by more than 80%. Added together, our business continues to demonstrate its strength and durability. In addition, the acquisition of Data Plus Math is already paying dividends. LiveRamp TV was up more than 70% year-over-year.”
GAAP and Non-GAAP Results
The following table summarizes the Company’s financial results for its second fiscal quarter ($ in millions):
Q2 Fiscal 2020
Q2 Fiscal 2019
Results
Results
GAAP
Non-GAAP
GAAP
Non-GAAP
Subscription revenue
$72
--
$55
--
YoY change %
31%
30%
Marketplace & other revenue
$18
--
$10
--
YoY change %
83%
(15%)
Total revenue
$90
--
$65
--
YoY change %
39%
20%
Gross profit
$49
$56
$40
$45
% Gross margin
54%
63%
62%
69%
YoY change, pts
(8 pts)
(6 pts)
7 pts
1 pt
Operating loss
($50)
($20)
($38)
($14)
% Operating margin
(56%)
(22%)
(59%)
(22%)
YoY change, pts
3 pts
- pt
12 pts
(2) pts
Net loss1
($40)
($15)
($41)
($11)
YoY change %
nm
nm
nm
nm
Loss per share1
($0.59)
($0.23)
($0.53)
($0.14)
YoY change %
nm
nm
nm
nm
Shares to Calculate EPS
67.7
67.7
77.4
77.4
YoY change %
(13%)
Net operating cash flow
($29)
--
($27)
--
YoY change %
nm
--
nm
--
Free cash flow to equity
--
($31)
--
($32)
YoY change %
--
nm
--
nm
1 From continuing operations, does not include AMS results.
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 Metrics & Highlights
LiveRamp added 30 new direct subscription customers during the quarter, bringing its total direct customer count to 720, an increase of 18% year-over-year. We now serve 21% of the Fortune 500 compared to 18% in the prior year period. LiveRamp has 44 clients whose subscription contracts exceed $1 million in annual revenue, up from 40 in the prior year period. Subscription net retention1 was approximately 109% in the quarter. Platform net retention was 119% in Q2. LiveRamp announced new partnerships with MediaMath and Rubicon Project to enable marketers to buy publisher inventory with LiveRamp's IdentityLink™ graph as part of its Authenticated Traffic Solution (ATS) and IdentityLink in the bidstream efforts. These integrations allow people-based identity to be efficiently passed in real-time and enable marketers to connect with their customers using a consistent, omnichannel view of the consumer that is not reliant on third-party cookies.Financial Outlook
LiveRamp’s non-GAAP guidance excludes the impact of non-cash stock compensation, purchased intangible asset amortization, and restructuring charges.
For fiscal 2020, LiveRamp now expects to report:
Revenue of between $376 million and $381 million, an increase of 32% to 33% year-over-year as compared to the Company’s previous revenue growth guidance of 27% to 32%. GAAP operating loss from continuing operations of between $180 million and $175 million as compared to previous GAAP operating loss guidance of $189 million to $169 million. Non-GAAP operating loss of between $68 million and $63 million as compared to previous operating loss guidance of $76 million to $56 million.The Company’s guidance includes the Data Plus Math acquisition. GAAP and non-GAAP operating loss guidance also includes $11 million of transition-related spend in the first half of the fiscal year associated with establishing standalone operations at LiveRamp.
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 provides the identity platform leveraged by brands and their partners to deliver innovative products and exceptional experiences. LiveRamp’s IdentityLink™ connects people, data, and devices across the digital and physical world, powering the people-based marketing revolution and allowing consumers to safely connect with the brands and products they love. 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 relate to 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 within a rapidly changing industry including digital advertising, 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 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.
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 Quarterly Report on Form 10-Q for the period ended September 30, 2019, which LiveRamp expects to file on November 6, 2019.
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
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except per share amounts)
For the Three Months Ended
September 30,
$
%
2019
2018
Variance
Variance
Revenues90,143
64,812
25,331
39.1
%
Cost of revenue41,460
24,466
16,994
69.5
%
Gross profit48,683
40,346
8,337
20.7
%
% Gross margin54.0
%
62.3
%
Operating expenses: Research and development26,445
16,940
9,505
56.1
%
Sales and marketing45,204
35,940
9,264
25.8
%
General and administrative27,262
25,176
2,086
8.3
%
Gains, losses and other items, net45
489
(444
)
(90.8
%)
Total operating expenses98,956
78,545
20,411
26.0
%
Loss from operations(50,273
)
(38,199
)
(12,074
)
(31.6
%)
% Margin-55.8
%
-58.9
%
Total other income (expense)4,780
(281
)
5,061
1801.1
%
Loss from continuing operations before income taxes(45,493
)
(38,480
)
(7,013
)
(18.2
%)
Income taxes (benefit)(5,291
)
2,700
(7,991
)
(296.0
%)
Net loss from continuing operations(40,202
)
(41,180
)
978
2.4
%
Earnings from discontinued operations, net of tax-
61,803
(61,803
)
(100.0
%)
Net earnings (loss)(40,202
)
20,623
(60,825
)
(294.9
%)
Basic earnings (loss) per share: Continuing operations(0.59
)
(0.53
)
(0.06
)
(11.7
%)
Discontinued operations-
0.80
(0.80
)
(100.0
%)
Net earnings (loss)(0.59
)
0.27
(0.86
)
(323.1
%)
Diluted earnings (loss) per share: Continuing operations(0.59
)
(0.53
)
(0.06
)
(11.7
%)
Discontinued operations-
0.80
(0.80
)
(100.0
%)
Net earnings (loss)(0.59
)
0.27
(0.86
)
(323.1
%)
Basic weighted average shares67,684
77,448
Diluted weighted average shares
67,684
77,448
LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except per share amounts)
For the Six Months Ended
September 30,
$
%
2019
2018
Variance
Variance
Revenues172,654
127,283
45,371
35.6
%
Cost of revenue77,886
48,120
29,766
61.9
%
Gross profit94,768
79,163
15,605
19.7
%
% Gross margin54.9
%
62.2
%
Operating expenses: Research and development50,167
33,910
16,257
47.9
%
Sales and marketing88,348
69,263
19,085
27.6
%
General and administrative52,580
43,301
9,279
21.4
%
Gains, losses and other items, net2,321
490
1,831
373.7
%
Total operating expenses193,416
146,964
46,452
31.6
%
Loss from operations(98,648
)
(67,801
)
(30,847
)
(45.5
%)
% Margin-57.1
%
-53.3
%
Total other income10,662
75
10,587
14116.0
%
Loss from continuing operations before income taxes(87,986
)
(67,726
)
(20,260
)
(29.9
%)
Income taxes (benefit)(5,644
)
1,272
(6,916
)
(543.7
%)
Net loss from continuing operations(82,342
)
(68,998
)
(13,344
)
(19.3
%)
Earnings from discontinued operations, net of tax-
86,606
(86,606
)
(100.0
%)
Net earnings (loss)(82,342
)
17,608
(99,950
)
(567.6
%)
Basic earnings (loss) per share: Continuing operations(1.21
)
(0.89
)
(0.31
)
(34.9
%)
Discontinued operations-
1.12
(1.12
)
(100.0
%)
Net earnings (loss)(1.21
)
0.23
(1.43
)
(628.6
%)
Diluted earnings (loss) per share: Continuing operations(1.21
)
(0.89
)
(0.31
)
(34.9
%)
Discontinued operations-
1.12
(1.12
)
(100.0
%)
Net earnings (loss)(1.21
)
0.23
(1.43
)
(628.6
%)
Basic weighted average shares68,295
77,192
Diluted weighted average shares
68,295
77,192
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 Six Months Ended
September 30,
September 30,
2019
2018
2019
2018
Loss from continuing operations before income taxes(45,493
)
(38,480
)
(87,986
)
(67,726
)
Income taxes (benefit)(5,291
)
2,700
(5,644
)
1,272
Net loss from continuing operations
(40,202
)
(41,180
)
(82,342
)
(68,998
)
Earnings from discontinued operations, net of tax-
61,803
-
86,606
Net earnings (loss)
(40,202
)
20,623
(82,342
)
17,608
Earnings (loss) per share: Basic
(0.59
)
0.27
(1.21
)
0.23
Diluted
(0.59
)
0.27
(1.21
)
0.23
Excluded items: Purchased intangible asset amortization (cost of revenue)
5,369
3,548
8,492
9,518
Non-cash stock compensation (cost of revenue and operating expenses)
23,354
17,667
41,984
35,465
Accelerated depreciation (cost of revenue and operating expenses)
1,663
-
3,569
-
Restructuring and merger charges (gains, losses, and other)
45
489
2,321
490
Separation and transformation costs (general and administrative)
-
2,122
-
2,122
Total excluded items, continuing operations
30,431
23,826
56,366
47,595
Loss from continuing operations before income taxes and excluding items
(15,062
)
(14,654
)
(31,620
)
(20,131
)
Income taxes (benefit) (2)190
(3,790
)
(26
)
(4,868
)
Non-GAAP net loss from continuing operations(15,252
)
(10,864
)
(31,594
)
(15,263
)
Non-GAAP loss per share from continuing operations: Basic(0.23
)
(0.14
)
(0.46
)
(0.20
)
Diluted(0.23
)
(0.14
)
(0.46
)
(0.20
)
Basic weighted average shares67,684
77,448
68,295
77,192
Diluted weighted average shares
67,684
77,448
68,295
77,192
(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 1.2% and 25.9% in the second quarter of fiscal 2020 and 2019, respectively, and 0.0% and 24.2% for the six months ended September 30, 2019 and 2018, 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 Six Months Ended
September 30,
September 30,
2019
2018
2019
2018
Loss from continuing operations(50,273
)
(38,199
)
(98,648
)
(67,801
)
Excluded items: Purchased intangible asset amortization (cost of revenue)5,369
3,548
8,492
9,518
Non-cash stock compensation (cost of revenue and operating expenses)
23,354
17,667
41,984
35,465
Accelerated depreciation (cost of revenue and operating expenses)
1,663
-
3,569
-
Restructuring and merger charges (gains, losses, and other)
45
489
2,321
490
Separation and transformation costs (general and administrative)
-
2,122
-
2,122
Total excluded items
30,431
23,826
56,366
47,595
Loss from continuing operations before excluded items
(19,842
)
(14,373
)
(42,282
)
(20,206
)
(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 Six Months Ended
September 30,
September 30,
2019
2018
2019
2018
Net loss from continuing operations(40,202
)
(41,180
)
(82,342
)
(68,998
)
Income taxes (benefit)(5,291
)
2,700
(5,644
)
1,272
Other income (expense)
(4,780
)
281
(10,662
)
(75
)
Loss from operations(50,273
)
(38,199
)
(98,648
)
(67,801
)
Depreciation and amortization10,977
7,010
19,854
16,540
EBITDA
(39,296
)
(31,189
)
(78,794
)
(51,261
)
Other adjustments: Non-cash stock compensation (cost of revenue and operating expenses)23,354
17,667
41,984
35,465
Restructuring and merger charges (gains, losses, and other)
45
489
2,321
490
Separation and transformation costs (general and administrative)
-
2,122
-
2,122
Other adjustments
23,399
20,278
44,305
38,077
Adjusted EBITDA
(15,897
)
(10,911
)
(34,489
)
(13,184
)
(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)
September 30,
March 31,
$
%
2019
2019
Variance
Variance
Assets Current assets: Cash and cash equivalents777,443
1,061,473
(284,030
)
(26.8
%)
Restricted cash14,815
-
14,815
n/a
Trade accounts receivable, net
88,150
78,563
9,587
12.2
%
Refundable income taxes15,676
7,890
7,786
98.7
%
Other current assets51,055
44,150
6,905
15.6
%
Total current assets947,139
1,192,076
(244,937
)
(20.5
%)
Property and equipment64,440
64,852
(412
)
(0.6
%)
Less - accumulated depreciation and amortization43,278
38,809
4,469
11.5
%
Property and equipment, net21,162
26,043
(4,881
)
(18.7
%)
Software, net of accumulated amortization27,413
6,861
20,552
299.5
%
Goodwill297,477
204,656
92,821
45.4
%
Deferred income taxes35
35
-
0.0
%
Deferred commissions, net11,347
10,741
606
5.6
%
Other assets, net58,657
32,499
26,158
80.5
%
1,363,230
1,472,911
(109,681
)
(7.4
%)
Liabilities and Stockholders' Equity Current liabilities: Trade accounts payable31,721
31,203
518
1.7
%
Accrued payroll and related expenses16,716
18,715
(1,999
)
(10.7
%)
Other accrued expenses55,724
40,916
14,808
36.2
%
Acquisition escrow payable14,815
-
14,815
n/a
Deferred revenue
4,447
4,284
163
3.8
%
Total current liabilities123,423
95,118
28,305
29.8
%
Deferred income taxes1,500
39
1,461
3746.2
%
Other liabilities51,949
46,922
5,027
10.7
%
Stockholders' equity: Common stock14,310
14,187
123
0.9
%
Additional paid-in capital1,460,120
1,406,813
53,307
3.8
%
Retained earnings1,587,263
1,669,605
(82,342
)
(4.9
%)
Accumulated other comprehensive income6,619
7,801
(1,182
)
(15.2
%)
Treasury stock, at cost(1,881,954
)
(1,767,574
)
(114,380
)
(6.5
%)
Total stockholders' equity1,186,358
1,330,832
(144,474
)
(10.9
%)
1,363,230
1,472,911
(109,681
)
(7.4
%)
LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
For the Three Months Ended
September 30,
2019
2018
Cash flows from operating activities: Net earnings (loss)(40,202
)
20,623
Earnings from discontinued operations, net of tax
-
(61,803
)
Non-cash operating activities: Depreciation and amortization10,977
7,010
Loss (gain) on disposal or impairment of assets
(225
)
490
Provision for doubtful accounts
1,468
1,095
Deferred income taxes
(5,090
)
14,136
Non-cash stock compensation expense
23,354
17,667
Changes in operating assets and liabilities: Accounts receivable
(7,807
)
(1,797
)
Deferred commissions(780
)
(1,049
)
Other assets(7,497
)
1,838
Accounts payable and other liabilities
3,009
(8,880
)
Income taxes(6,926
)
(14,518
)
Deferred revenue968
(1,942
)
Net cash used in operating activities(28,751
)
(27,130
)
Cash flows from investing activities: Capitalized software-
(423
)
Capital expenditures(2,641
)
(1,323
)
Proceeds from sales of property and equipment517
-
Cash paid in acquisition, net of cash received
(100,886
)
-
Net cash used in investing activities
(103,010
)
(1,746
)
Cash flows from financing activities: Payments of debt-
(2,701
)
Proceeds related to the issuance of common stock under stock and employee benefit plans1,032
4,005
Shares repurchased for tax withholdings upon vesting of stock-based awards
(1,814
)
(4,580
)
Acquisition of treasury stock(80,374
)
-
Net cash used in financing activities
(81,156
)
(3,276
)
Cash flows from discontinued operations: From operating activities-
34,135
From investing activities
-
(7,929
)
Effect of exchange rate changes on cash-
(5
)
Net cash provided by discontinued operations-
26,201
Effect of exchange rate changes on cash
(302
)
(557
)
Net change in cash, cash equivalents and restricted cash(213,219
)
(6,508
)
Cash, cash equivalents and restricted cash at beginning of period1,005,477
93,555
Cash, cash equivalents and restricted cash at end of period
792,258
87,047
Supplemental cash flow information: Cash paid (received) during the period for: Income taxes
6,042
(741
)
LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
For the Six Months Ended
September 30,
2019
2018
Cash flows from operating activities: Net earnings (loss)(82,342
)
17,608
Earnings from discontinued operations, net of tax
-
(86,606
)
Non-cash operating activities: Depreciation and amortization19,854
16,540
Loss (gain) on disposal or impairment of assets
(140
)
475
Provision for doubtful accounts
2,430
631
Deferred income taxes
(5,083
)
12,444
Non-cash stock compensation expense
41,984
35,465
Changes in operating assets and liabilities: Accounts receivable
(11,258
)
(2,649
)
Deferred commissions(606
)
(2,047
)
Other assets(3,897
)
1,264
Accounts payable and other liabilities
2,821
(4,604
)
Income taxes(7,789
)
(16,416
)
Deferred revenue(133
)
(1,515
)
Net cash used in operating activities(44,159
)
(29,410
)
Cash flows from investing activities: Capitalized software-
(1,322
)
Capital expenditures(7,529
)
(2,035
)
Proceeds from sales of property and equipment517
-
Payments for investments
-
(2,500
)
Cash paid in acquisition, net of cash received(105,365
)
-
Net cash used in investing activities
(112,377
)
(5,857
)
Cash flows from financing activities: Payments of debt-
(3,293
)
Fees from debt refinancing-
(300
)
Proceeds related to the issuance of common stock under stock and employee benefit plans2,092
8,121
Shares repurchased for tax withholdings upon vesting of stock-based awards
(13,907
)
(14,624
)
Acquisition of treasury stock(100,473
)
(45,766
)
Net cash used in financing activities(112,288
)
(55,862
)
Cash flows from discontinued operations: From operating activities-
54,316
From investing activities
-
(14,502
)
Effect of exchange rate changes on cash-
(172
)
Net cash provided by discontinued operations-
39,642
Effect of exchange rate changes on cash
(391
)
(1,484
)
Net change in cash, cash equivalents and restricted cash(269,215
)
(52,971
)
Cash, cash equivalents and restricted cash at beginning of period1,061,473
140,018
Cash, cash equivalents and restricted cash at end of period
792,258
87,047
Supplemental cash flow information: Cash paid during the period for: Income taxes
6,152
115
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
FY2020
Net Cash Provided by (Used in) Operating Activities-Continuing Operations(2,280
)
(27,130
)
(10,922
)
38,354
(1,978
)
(15,408
)
(28,751
)
(44,159
)
Less (plus): Capitalized software(899
)
(423
)
-
-
(1,322
)
-
-
-
Capital expenditures
(712
)
(1,323
)
(1,938
)
(3,347
)
(7,320
)
(4,888
)
(2,641
)
(7,529
)
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
)
(51,688
)
(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 STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except per share amounts)
Q2 FY20 to Q2 FY19
06/30/18
09/30/18
12/31/18
03/31/19
FY2019
06/30/19
09/30/19
FY2020
%
$
Revenues62,471
64,812
80,021
78,316
285,620
82,511
90,143
172,654
40.5
%
25,331
Cost of revenue
23,654
24,466
34,838
37,760
120,718
36,426
41,460
77,886
71.8
%
16,994
Gross profit
38,817
40,346
45,183
40,556
164,902
46,085
48,683
94,768
21.5
%
8,337
% Gross margin
62.1
%
62.3
%
56.5
%
51.8
%
57.7
%
55.9
%
54.0
%
54.9
%
Operating expenses Research and development16,970
16,940
20,469
31,318
85,697
23,722
26,445
50,167
56.0
%
9,505
Sales and marketing
33,323
35,940
40,054
49,223
158,540
43,144
45,204
88,348
27.8
%
9,264
General and administrative
18,125
25,176
27,828
27,749
98,878
25,318
27,262
52,580
11.5
%
2,086
Gains, losses and other items, net
1
489
5,043
14,400
19,933
2,276
45
2,321
(44400.0
%)
(444
)
Total operating expenses68,419
78,545
93,394
122,690
363,048
94,460
98,956
193,416
29.8
%
20,411
Loss from operations
(29,602
)
(38,199
)
(48,211
)
(82,134
)
(198,146
)
(48,375
)
(50,273
)
(98,648
)
(40.8
%)
(12,074
)
% Margin-47.4
%
-58.9
%
-60.2
%
-104.9
%
-69.4
%
-58.6
%
-55.8
%
-57.1
%
Total other income (expense)356
(281
)
10,404
8,311
18,790
5,882
4,780
10,662
1421.6
%
5,061
Loss from continuing operations before income taxes
(29,246
)
(38,480
)
(37,807
)
(73,823
)
(179,356
)
(42,493
)
(45,493
)
(87,986
)
(24.0
%)
(7,013
)
Income taxes (benefit)(1,428
)
2,700
(22,546
)
(24,135
)
(45,409
)
(353
)
(5,291
)
(5,644
)
(559.6
%)
(7,991
)
Net loss from continuing operations(27,818
)
(41,180
)
(15,261
)
(49,688
)
(133,947
)
(42,140
)
(40,202
)
(82,342
)
3.5
%
978
Earnings from discontinued operations, net of tax
24,803
61,803
1,071,661
4,227
1,162,494
-
-
-
(249.2
%)
(61,803
)
Net earnings (loss)(3,015
)
20,623
1,056,400
(45,461
)
1,028,547
(42,140
)
(40,202
)
(82,342
)
(2017.4
%)
(60,825
)
Diluted earnings (loss) per share(0.04
)
0.27
13.65
(0.67
)
13.71
(0.61
)
(0.59
)
(1.21
)
(2195.1
%)
(0.86
)
Diluted loss per share continuing operations(0.36
)
(0.53
)
(0.20
)
(0.73
)
(1.79
)
(0.61
)
(0.59
)
(1.21
)
(17.2
%)
(0.06
)
Some earnings (loss) per share amounts may not add due to rounding. 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 FY2020 Loss from continuing operations before income taxes(29,246
)
(38,480
)
(37,807
)
(73,823
)
(179,356
)
(42,493
)
(45,493
)
(87,986
)
Income taxes (benefit)(1,428
)
2,700
(22,546
)
(24,135
)
(45,409
)
(353
)
(5,291
)
(5,644
)
Net loss from continuing operations(27,818
)
(41,180
)
(15,261
)
(49,688
)
(133,947
)
(42,140
)
(40,202
)
(82,342
)
Earnings from discontinued operations, net of tax24,803
61,803
1,071,661
4,227
1,162,494
-
-
-
Net earnings (loss)
(3,015
)
20,623
1,056,400
(45,461
)
1,028,547
(42,140
)
(40,202
)
(82,342
)
Earnings (loss) per share: Basic(0.04
)
0.27
13.65
(0.67
)
13.71
(0.61
)
(0.59
)
(1.21
)
Diluted(0.04
)
0.27
13.65
(0.67
)
13.71
(0.61
)
(0.59
)
(1.21
)
Excluded items: Purchased intangible asset amortization (cost of revenue)5,970
3,548
3,359
2,981
15,858
3,123
5,369
8,492
Non-cash stock compensation (cost of revenue and operating expenses)
17,798
17,667
26,082
41,175
102,722
18,630
23,354
41,984
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
2,321
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
56,366
Loss from continuing operations before income taxes and excluding items
(5,477
)
(14,654
)
(664
)
(14,119
)
(34,914
)
(16,558
)
(15,062
)
(31,620
)
Income taxes (benefit)(1,078
)
(3,790
)
(2,941
)
(5,155
)
(12,964
)
(216
)
190
(26
)
Non-GAAP net earnings (loss) from continuing operations(4,399
)
(10,864
)
2,277
(8,964
)
(21,950
)
(16,342
)
(15,252
)
(31,594
)
Non-GAAP earnings (loss) per share from continuing operations: Basic(0.06
)
(0.14
)
0.03
(0.13
)
(0.29
)
(0.24
)
(0.23
)
(0.46
)
Diluted(0.06
)
(0.14
)
0.03
(0.13
)
(0.29
)
(0.24
)
(0.23
)
(0.46
)
Basic weighted average shares76,935
77,448
77,398
68,299
75,020
68,906
67,684
68,295
Diluted weighted average shares
76,935
77,448
77,398
68,299
75,020
68,906
67,684
68,295
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
FY2020
Expenses, continuing operations: Cost of revenue23,654
24,466
34,838
37,760
120,718
36,426
41,460
77,886
Research and development16,970
16,940
20,469
31,318
85,697
23,722
26,445
50,167
Sales and marketing33,323
35,940
40,054
49,223
158,540
43,144
45,204
88,348
General and administrative18,125
25,176
27,828
27,749
98,878
25,318
27,262
52,580
Gains, losses and other items, net1
489
5,043
14,400
19,933
2,276
45
2,321
Excluded items: Purchased intangible asset amortization (cost of revenue)5,970
3,548
3,359
2,981
15,858
3,123
5,369
8,492
Non-cash stock compensation (cost of revenue)712
782
1,052
2,163
4,709
755
1,060
1,815
Non-cash stock compensation (research and development)4,341
3,745
5,945
14,193
28,224
4,451
6,346
10,797
Non-cash stock compensation (sales and marketing)9,920
9,854
9,460
14,736
43,970
8,920
9,758
18,678
Non-cash stock compensation (general and administrative)2,824
3,286
9,625
10,083
25,818
4,504
6,190
10,694
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
2,321
Separation and transformation costs (general and administrative)-
2,122
700
(705)
2,117
-
-
-
Total excluded items23,768
23,826
37,143
59,704
144,441
25,935
30,431
56,366
Expenses, continued operations excluding items: Cost of revenue16,972
20,136
28,900
31,171
97,179
31,061
33,786
64,847
Research and development12,629
13,195
14,524
17,125
57,473
19,271
20,099
39,370
Sales and marketing23,403
26,086
30,594
34,487
114,570
34,224
35,446
69,670
General and administrative15,301
19,768
17,071
17,963
70,103
20,395
20,654
41,049
Gains, losses and other items, net-
-
-
-
-
-
-
-
(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 year ending
March 31, 2020
Low Range
High Range
Revenues$
376,000
$
381,000
GAAP loss from operations
(180,000
)
(175,000
)
Excluded items: Purchased intangible asset amortization
19,000
19,000
Accelerated depreciation
4,000
4,000
Non-cash stock compensation
87,000
87,000
Gains, losses and other items, net
2,000
2,000
Total excluded items
112,000
112,000
Non-GAAP loss from operations
$
(68,000
)
$
(63,000
)
(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
Q2 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 the prior year, 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 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 period 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 period 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 ending MRR (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: Our Non-GAAP earnings per share, Non-GAAP income from operations, and Non-GAAP expenses reflect adjustments as described above, as well as the related tax effects where applicable.
Adjusted EBITDA: Adjusted EBITDA is defined as net income from continuing operations before income taxes, other expenses, depreciation and amortization, and including adjustments as described above. We use Adjusted EBITDA to measure our performance from period to period both at the consolidated level as well as within our operating segments and to compare our results to those of our competitors. We believe that the inclusion of Adjusted EBITDA provides useful supplementary information to and facilitates analysis by investors in evaluating the Company's performance and trends. The presentation of Adjusted EBITDA is not meant to be considered in isolation or as an alternative to net earnings as an indicator of our performance.
Free Cash Flow to Equity: To supplement our statement of cash flows, we use a non-GAAP measure of cash flow to analyze cash flows generated from operations. Free cash flow to equity is defined as operating cash flow less cash used by investing activities (excluding the impact of cash paid in acquisitions), less required payments of debt, and excluding the impact of discontinued operations. Management believes that this measure of cash flow is meaningful since it represents the amount of money available from continuing operations for the Company's discretionary spending after funding all required obligations including scheduled debt payments. The presentation of non-GAAP free cash flow to equity is not meant to be considered in isolation or as an alternative to cash flows from operating activities as a measure of liquidity.
View source version on businesswire.com: https://www.businesswire.com/news/home/20191106005973/en/