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LiveRamp Announces Strong First Quarter Results and Raises Full Year Outlook

Total Revenue Up 20%

GAAP Gross Margin of 71% and Non-GAAP Gross Margin of 76%

Now Expects Full Year Revenue to Increase by Approximately 18%

LiveRamp’s Global Authenticated Traffic Solution (ATS) Adopted by Over 450 Publishers

LiveRamp® (NYSE: RAMP), the leading global data connectivity platform, today announced its financial results for the quarter ended June 30, 2021.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20210805006081/en/

First Quarter Financial Highlights

  • Total revenue was $119 million, up 20% compared to the prior year period.
  • Subscription revenue was $97 million, up 16% compared to the prior year period and contributed 81% of total revenue.
  • Marketplace & Other revenue was $23 million, up 36% compared to the prior year period.
  • GAAP gross profit was $85 million, up 30% compared to the prior year period. GAAP gross margin of 71% expanded 6 percentage points. Non-GAAP gross profit was $90 million, up 27% compared to the prior year period. Non-GAAP gross margin of 76% expanded 4 percentage points.
  • GAAP operating loss was $18 million compared to a GAAP operating loss of $26 million in the prior year period. Non-GAAP operating income was $7 million compared to a non-GAAP operating income of $1 million in the prior year period.
  • GAAP earnings per share were $0.25, and non-GAAP earnings per share were $0.09. GAAP earnings included a $30 million investment gain reported in other income.
  • Net cash used in operating activities was $17 million compared to net cash used in operating activities of $24 million in the prior year period.
  • Cash and cash equivalents totaled $541 million with no debt at quarter end.
  • Since March 31, 2021, LiveRamp repurchased 1 million shares for approximately $44 million under the current share repurchase program. Since inception of the share repurchase program in August 2011, the Company has returned approximately $1.2 billion in capital to shareholders.

A reconciliation between GAAP and non-GAAP results is provided in the schedules to this press release.

“Global companies are increasingly turning to LiveRamp to power their customer data strategies and momentum across our key expansion levers continues to build,” said LiveRamp CEO Scott Howe. “In the quarter, we added 30 net new customers and total revenue growth accelerated to 20%. Connected television revenue was up 80% and our global Safe Haven flywheel is accelerating. We now work with 30% of big box grocery and retail in the US and 40% of the world’s top 50 consumer packaged goods companies.”

“Our Q1 results were strong, and our trendlines are building,” added LiveRamp President and CFO Warren Jenson. “Revenue growth is accelerating, we had another elevated bookings quarter, and we again delivered a record gross margin performance. On a non-GAAP basis, gross margin was 76%, and we were profitable for the fifth consecutive quarter.”

GAAP and Non-GAAP Results

The following table summarizes the Company’s financial results for its first fiscal quarter ($ in millions):

 

Q1 Fiscal 2022

 

Q1 Fiscal 2021

 

Results

 

Results

 

GAAP

Non-GAAP

 

GAAP

Non-GAAP

Subscription revenue

$97

 

$83

YoY change %

16%

 

 

21%

 

Marketplace & other revenue

$23

 

$17

YoY change %

36%

 

 

16%

 

Total revenue

$119

 

$99

YoY change %

20%

 

 

21%

 

 

 

 

 

 

 

Gross profit

$85

$90

 

$65

$71

% Gross margin

71%

76%

 

65%

71%

YoY change, pts

6 pts

4 pts

 

9 pts

9 pts

 

 

 

 

 

 

Operating income (loss)

($18)

$7

 

($26)

$1

% Operating margin

(15%)

6%

 

(26%)

1%

YoY change, pts

11 pts

4 pts

 

32 pts

29 pts

 

 

 

 

 

 

Net income (loss)

$17

$7

 

($22)

$1

Earnings (loss) per share

$0.25

$0.09

 

($0.33)

$0.01

 

 

 

 

 

 

Shares to Calculate EPS

69.6

69.6

 

65.6

67.3

YoY change %

3%

3%

 

(5%)

(6%)

Net operating cash flow

($17)

 

($24)

Free cash flow to equity

($18)

 

($20)

 

 

 

 

 

 

Totals may not sum due to rounding.

A detailed discussion of our non-GAAP financial measures and a reconciliation between GAAP and non-GAAP results is provided in the schedules to this press release.

Additional Business Highlights & Metrics

  • The Authenticated Traffic Solution (ATS), continues to experience strong global adoption. There are currently more than 25 supply-side platforms (SSPs) live or committed to implementing ATS. In addition, there are over 45 demand-side platforms (DSPs) live or committed to bid on RampID, including The Trade Desk, Amobee, Criteo, dataxu, and MediaMath. Lastly, to date, more than 450 publishers globally have adopted ATS, including 75% of the U.S. comScore 50.
  • LiveRamp announced an expanded global partnership with Carrefour to enable robust data collaboration and analytics capabilities through LiveRamp’s Safe Haven. The partnership spans nine international markets and signals the growing momentum of Safe Haven, which has now been adopted by more than 55 customers across retail, grocery, CPG, consumer electronics and other verticals.
  • During the first quarter, subscription net retention was 103% and platform net retention was 108%.
  • Current remaining performance obligations (CRPO), which is contracted and committed revenue expected to be recognized over the next 12 months, was $256 million, up 15% compared to the first quarter of last year.
  • LiveRamp added 30 net new direct subscription customers in the first quarter. Customer count at quarter end was 855, up from 780 a year ago.
  • LiveRamp has 70 customers whose subscription contracts exceed $1 million in annual revenue, up 17% compared to the prior year period.

Financial Outlook

LiveRamp’s non-GAAP guidance excludes the impact of non-cash stock compensation, purchased intangible asset amortization, and restructuring charges.

For the second quarter of fiscal 2022, LiveRamp expects to report:

  • Revenue of approximately $124 million, an increase of approximately 18% year-over-year
  • GAAP operating loss of approximately $22 million
  • Non-GAAP operating income of approximately $4 million

For fiscal 2022, LiveRamp increases its outlook and now expects to report:

  • Revenue of approximately $522 million, an increase of approximately 18% year-over-year
  • GAAP operating loss of approximately $96 million
  • Non-GAAP operating income of approximately $15 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 our suppliers, customers and partners; the Company’s dependence upon customer renewals; new customer additions and upsell within our subscription business; our reliance upon partners, including data suppliers; competition; and attracting and retaining talent. Additional risks relate to maintaining our culture and our ability to innovate and evolve while working remotely and within a rapidly changing industry, while also avoiding disruption from acquisition and divestiture activities. Our international operations are also subject to risks that may harm the Company’s business. The risk of a significant breach of the confidentiality of the information or the security of our or our customers’, suppliers’, or other partners’ computer systems could be detrimental to our business, reputation and results of operations. Other business risks include unfavorable publicity and negative public perception about our industry; interruptions or delays in service from data center hosting vendors we rely upon; and our dependence on the continued availability of third-party data hosting and transmission services. Our clients’ ability to use data on our platform could be restricted if the industry’s use of third-party cookies and tracking technology declines due to technology platform changes, regulation or increased user controls. Changes in regulations relating to information collection and use represents a risk, as well as changes in tax laws and regulations that are applied to our customers which could cause enterprise software budget tightening. In addition, third parties may claim that we are infringing their intellectual property or may infringe our intellectual property which could result in competitive injury and / or the incurrence of significant costs and draining of our resources.

For a discussion of these and other risks and uncertainties, please refer to LiveRamp’s Annual Report on Form 10-K for our fiscal year 2021 ended March 31, 2021, and LiveRamp's Quarterly Reports on Form 10-Q issued in fiscal year 2021.

The financial information set forth in this press release reflects estimates based on information available at this time.

LiveRamp assumes no obligation and does not currently intend to update these forward-looking statements.

To automatically receive LiveRamp financial news by email, please visit www.LiveRamp.com and subscribe to email alerts.

LiveRamp, RampID™, Abilitec, Safe Haven and all other LiveRamp marks contained herein are trademarks or service marks of LiveRamp, Inc. All other marks are the property of their respective owners.

LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except per share amounts)
 
 
For the Three Months Ended
June 30,
$ %

2021

2020

Variance Variance
 
Revenues

119,038

 

99,437

 

19,601

 

19.7

%

 
Cost of revenue

34,315

 

34,465

 

(150

)

(0.4

%)

Gross profit

84,723

 

64,972

 

19,751

 

30.4

%

% Gross margin

71.2

%

65.3

%

 
Operating expenses:
Research and development

34,776

 

26,989

 

7,787

 

28.9

%

Sales and marketing

41,979

 

38,627

 

3,352

 

8.7

%

General and administrative

24,291

 

23,368

 

923

 

3.9

%

Gains, losses and other items, net

1,278

 

1,995

 

(717

)

(35.9

%)

Total operating expenses

102,324

 

90,979

 

11,345

 

12.5

%

 
Loss from operations

(17,601

)

(26,007

)

8,406

 

32.3

%

% Margin

-14.8

%

-26.2

%

 
Total other income, net

30,601

 

463

 

30,138

 

6509.3

%

 
Income (loss) from operations before income taxes

13,000

 

(25,544

)

38,544

 

150.9

%

 
Income tax benefit

(4,365

)

(3,816

)

(549

)

(14.4

%)

 
Net earnings (loss)

17,365

 

(21,728

)

39,093

 

179.9

%

 
Basic earnings (loss) per share

0.25

 

(0.33

)

0.59

 

176.7

%

 
Diluted earnings (loss) per share:

0.25

 

(0.33

)

0.58

 

175.3

%

 
Basic weighted average shares

68,328

 

65,570

 

 
Diluted weighted average shares

69,605

 

65,570

 

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,

2021

 

2020

 
 
Income (loss) from operations before income taxes

13,000

 

(25,544

)

 
Income taxes (benefit)

(4,365

)

(3,816

)

 
Net earnings (loss)

17,365

 

(21,728

)

 
Earnings (loss) per share:
Basic

0.25

 

(0.33

)

 
Diluted

0.25

 

(0.33

)

 
Excluded items:
Purchased intangible asset amortization (cost of revenue)

4,645

 

5,306

 

Non-cash stock compensation (cost of revenue and operating expenses)

18,496

 

16,485

 

Transformation costs (general and administrative)

-

 

3,605

 

Restructuring and merger charges (gains, losses, and other)

1,278

 

1,995

 

Gain on retained profits interest (other income)

(30,052

)

-

 

 
Total excluded items

(5,633

)

27,391

 

 
Income from operations before income taxes and excluding items

7,367

 

1,847

 

 
Income taxes (2)

865

 

934

 

 
Non-GAAP net earnings

6,502

 

913

 

 
Non-GAAP earnings per share:
Basic

0.10

 

0.01

 

 
Diluted

0.09

 

0.01

 

 
Basic weighted average shares

68,328

 

65,570

 

 
Diluted weighted average shares

69,605

 

67,337

 

 

(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 11.7% and 50.5% in the first quarter of fiscal 2022 and 2021, respectively. The difference between our GAAP and non-GAAP tax rates were primarily due to the net tax effects of the excluded items.

LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP INCOME (LOSS) FROM OPERATIONS (1)
(Unaudited)
(Dollars in thousands)
 
For the Three Months Ended
June 30,

2021

2020

 
 
Loss from operations

(17,601

)

(26,007

)

 
Excluded items:
Purchased intangible asset amortization (cost of revenue)

4,645

 

5,306

 

Non-cash stock compensation (cost of revenue and operating expenses)

18,496

 

16,485

 

Transformation costs (general and administrative)

-

 

3,605

 

Restructuring and merger charges (gains, losses, and other)

1,278

 

1,995

 

 
Total excluded items

24,419

 

27,391

 

 
Income from operations before excluded items

6,818

 

1,384

 

 

(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,

2021

2020

 
 
Net earnings (loss)

17,365

 

(21,728

)

 
Income tax benefit

(4,365

)

(3,816

)

 
Total other income, net

30,601

 

463

 

 
Loss from operations

(17,601

)

(26,007

)

 
Depreciation and amortization

6,585

 

8,054

 

 
EBITDA

(11,016

)

(17,953

)

 
Other adjustments:
Non-cash stock compensation (cost of revenue and operating expenses)

18,496

 

16,485

 

Transformation costs (general and administrative)

-

 

3,605

 

Restructuring and merger charges (gains, losses, and other)

1,278

 

1,995

 

 
Other adjustments

19,774

 

22,085

 

 
Adjusted EBITDA

8,758

 

4,132

 

 

(1) This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. For a detailed explanation of the adjustments made to comparable GAAP measures, the reasons why management uses these measures, the usefulness of these measures and the material limitations on the usefulness of these measures, please see Appendix A.

LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
 
June 30, March 31, $ %

2021

2021

Variance Variance
 
Assets
Current assets:
Cash and cash equivalents

541,024

 

572,787

 

(31,763

)

(5.5

%)

Restricted cash

8,731

 

8,900

 

(169

)

(1.9

%)

Trade accounts receivable, net

120,434

 

114,284

 

6,150

 

5.4

%

Refundable income taxes

64,221

 

65,692

 

(1,471

)

(2.2

%)

Other current assets

37,049

 

64,052

 

(27,003

)

(42.2

%)

 
Total current assets

771,459

 

825,715

 

(54,256

)

(6.6

%)

 
Property and equipment

44,659

 

44,284

 

375

 

0.8

%

Less - accumulated depreciation and amortization

34,036

 

32,327

 

1,709

 

5.3

%

 
Property and equipment, net

10,623

 

11,957

 

(1,334

)

(11.2

%)

 
Intangible assets, net

38,607

 

39,730

 

(1,123

)

(2.8

%)

Goodwill

364,241

 

357,446

 

6,795

 

1.9

%

Deferred commissions, net

26,002

 

22,619

 

3,383

 

15.0

%

Other assets, net

38,973

 

30,854

 

8,119

 

26.3

%

 

1,249,905

 

1,288,321

 

(38,416

)

(3.0

%)

 
Liabilities and Stockholders' Equity
Current liabilities:
Trade accounts payable

32,231

 

39,955

 

(7,724

)

(19.3

%)

Accrued payroll and related expenses

20,513

 

46,438

 

(25,925

)

(55.8

%)

Other accrued expenses

57,511

 

58,353

 

(842

)

(1.4

%)

Acquisition escrow payable

8,731

 

8,900

 

(169.00

)

(1.9

%)

Deferred revenue

11,197

 

11,603

 

(406

)

(3.5

%)

 
Total current liabilities

130,183

 

165,249

 

(35,066

)

(21.2

%)

 
Other liabilities

39,126

 

42,389

 

(3,263

)

(7.7

%)

 
Stockholders' equity:
Preferred stock

-

 

-

 

-

 

n/a

 

Common stock

14,866

 

14,781

 

85

 

0.6

%

Additional paid-in capital

1,653,525

 

1,630,072

 

23,453

 

1.4

%

Retained earnings

1,472,191

 

1,454,826

 

17,365

 

1.2

%

Accumulated other comprehensive income

6,970

 

7,522

 

(552

)

(7.3

%)

Treasury stock, at cost

(2,066,956

)

(2,026,518

)

(40,438

)

(2.0

%)

Total stockholders' equity

1,080,596

 

1,080,683

 

(87

)

(0.0

%)

 

1,249,905

 

1,288,321

 

(38,416

)

(3.0

%)

LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
 
For the Three Months Ended
June 30,

2021

2020

 
Cash flows from operating activities:
Net earnings (loss)

17,365

 

(21,728

)

Non-cash operating activities:
Depreciation and amortization

6,585

 

8,054

 

Loss on disposal or impairment of assets

113

 

2

 

Gain on distribution from retained profits interest

(30,052

)

-

 

Provision for doubtful accounts

955

 

1,330

 

Deferred income taxes

(912

)

(672

)

Non-cash stock compensation expense

18,496

 

16,485

 

Changes in operating assets and liabilities:
Accounts receivable

(7,049

)

(5,860

)

Deferred commissions

(3,383

)

(1,681

)

Other assets

19,336

 

4,904

 

Accounts payable and other liabilities

(37,276

)

(22,684

)

Income taxes

(1,000

)

(1,105

)

Deferred revenue

(419

)

(657

)

Net cash used in operating activities

(17,241

)

(23,612

)

Cash flows from investing activities:
Capital expenditures

(427

)

(832

)

Payment for investment

-

 

(667

)

Distribution from retained profits interest

31,000

 

-

 

Cash paid in acquisition, net of cash received

(8,368

)

-

 

Net cash provided by (used in) investing activities

22,205

 

(1,499

)

Cash flows from financing activities:
Proceeds related to the issuance of common stock under stock and employee benefit plans

3,281

 

1,137

 

Shares repurchased for tax withholdings upon vesting of stock-based awards

(11,361

)

(1,827

)

Acquisition of treasury stock

(29,077

)

(42,312

)

Net cash used in financing activities

(37,157

)

(43,002

)

Effect of exchange rate changes on cash

261

 

197

 

 
Net change in cash and cash equivalents

(31,932

)

(67,916

)

Cash and cash equivalents at beginning of period

581,687

 

732,626

 

Cash and cash equivalents at end of period

549,755

 

664,710

 

 
Supplemental cash flow information:
Cash paid (received) during the period for:
Income taxes

(2,451

)

(2,041

)

LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
CALCULATION OF FREE CASH FLOW TO EQUITY (1)
(Unaudited)
(Dollars in thousands)
 
 
06/30/20 09/30/20 12/31/20 03/31/21 FY2021 06/30/21
 
Net Cash Provided by (Used in) Operating Activities

(23,612

)

6,249

 

14,690

 

(17,887

)

(20,560

)

(17,241

)

 
Less:
Capital expenditures

(832

)

(296

)

(678

)

(376

)

(2,182

)

(427

)

 
Free Cash Flow to Equity

(24,444

)

5,953

 

14,012

 

(18,263

)

(22,742

)

(17,668

)

 

(1) This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our condensed consolidated financial statements prepared in accordance with GAAP. For a detailed explanation of the adjustments made to comparable GAAP measures, the reasons why management uses these measures and the material limitations on the usefulness of these measures, please see Appendix A.

LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except per share amounts)
 

Q1 FY22 to Q1 FY21

06/30/20

09/30/20

12/31/20

03/31/21

FY2021

06/30/21

% $
Revenues

99,437

 

104,661

 

119,753

 

119,175

 

443,026

 

119,038

 

19.7

%

19,601

 

 
Cost of revenue

34,465

 

34,897

 

37,085

 

37,557

 

144,004

 

34,315

 

(0.4

%)

(150

)

Gross profit

64,972

 

69,764

 

82,668

 

81,618

 

299,022

 

84,723

 

30.4

%

19,751

 

% Gross margin

65.3

%

66.7

%

69.0

%

68.5

%

67.5

%

71.2

%

 
Operating expenses
Research and development

26,989

 

31,035

 

30,608

 

46,479

 

135,111

 

34,776

 

28.9

%

7,787

 

Sales and marketing

38,627

 

41,705

 

43,904

 

53,307

 

177,543

 

41,979

 

8.7

%

3,352

 

General and administrative

23,368

 

24,495

 

23,943

 

32,395

 

104,201

 

24,291

 

3.9

%

923

 

Gains, losses and other items, net

1,995

 

(619

)

(6

)

1,345

 

2,715

 

1,278

 

(35.9

%)

(717

)

Total operating expenses

90,979

 

96,616

 

98,449

 

133,526

 

419,570

 

102,324

 

12.5

%

11,345

 

 
Loss from operations

(26,007

)

(26,852

)

(15,781

)

(51,908

)

(120,548

)

(17,601

)

32.3

%

8,406

 

% Margin

-26.2

%

-25.7

%

-13.2

%

-43.6

%

-27.2

%

-14.8

%

 
Total other income, net

463

 

(225

)

(86

)

(404

)

(252

)

30,601

 

6509.3

%

30,138

 

 
Income (loss) from operations before income taxes

(25,544

)

(27,077

)

(15,867

)

(52,312

)

(120,800

)

13,000

 

150.9

%

38,544

 

 
Income taxes benefit

(3,816

)

(3,109

)

(4,142

)

(19,465

)

(30,532

)

(4,365

)

(14.4

%)

(549

)

 
Net earnings (loss)

(21,728

)

(23,968

)

(11,725

)

(32,847

)

(90,268

)

17,365

 

179.9

%

39,093

 

 
Diluted earnings (loss) per share

(0.33

)

(0.36

)

(0.18

)

(0.49

)

(1.36

)

0.25

 

175.3

%

0.58

 

 
Some earnings (loss) per share amounts may not add due to rounding.
 
Basic shares

65,570

 

66,010

 

66,523

 

67,111

 

66,304

 

68,328

 

Diluted shares

65,570

 

66,010

 

66,523

 

67,111

 

66,304

 

69,605

 

LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP EPS (1)
(Unaudited)
(Dollars in thousands, except per share amounts)
 
 
 
06/30/20 09/30/20 12/31/20 03/31/21 FY2021 06/30/21
 
 
Income (loss) from operations before income taxes

(25,544

)

(27,077

)

(15,867

)

(52,312

)

(120,800

)

13,000

 

Income taxes (benefit)

(3,816

)

(3,109

)

(4,142

)

(19,465

)

(30,532

)

(4,365

)

Net earnings (loss)

(21,728

)

(23,968

)

(11,725

)

(32,847

)

(90,268

)

17,365

 

 
Earnings (loss) per share:
Basic

(0.33

)

(0.36

)

(0.18

)

(0.49

)

(1.36

)

0.25

 

Diluted

(0.33

)

(0.36

)

(0.18

)

(0.49

)

(1.36

)

0.25

 

 
Excluded items:
Purchased intangible asset amortization (cost of revenue)

5,306

 

4,350

 

4,213

 

4,177

 

18,046

 

4,645

 

Non-cash stock compensation (cost of revenue and operating expenses)

16,485

 

24,204

 

23,894

 

47,124

 

111,707

 

18,496

 

Restructuring and merger charges (gains, losses, and other)

1,995

 

(619

)

(6

)

1,345

 

2,715

 

1,278

 

Transformation costs (general and administrative)

3,605

 

258

 

-

 

-

 

3,863

 

-

 

Gain on retained profits interest (other income)

-

 

-

 

-

 

-

 

-

 

(30,052

)

Total excluded items

27,391

 

28,193

 

28,101

 

52,646

 

136,331

 

(5,633

)

 
Income from operations before income taxes and excluding items

1,847

 

1,116

 

12,234

 

334

 

15,531

 

7,367

 

Income taxes expense (benefit)

934

 

(1,291

)

2,347

 

(2,628

)

(638

)

865

 

Non-GAAP net earnings

913

 

2,407

 

9,887

 

2,962

 

16,169

 

6,502

 

 
Non-GAAP earnings per share:
Basic

0.01

 

0.04

 

0.15

 

0.04

 

0.24

 

0.10

 

Diluted

0.01

 

0.03

 

0.14

 

0.04

 

0.23

 

0.09

 

 
Basic weighted average shares

65,570

 

66,010

 

66,523

 

67,111

 

66,304

 

68,328

 

Diluted weighted average shares

67,337

 

68,804

 

69,775

 

69,935

 

68,963

 

69,605

 

 
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)
 
 
06/30/20 09/30/20 12/31/20 03/31/21 FY2021 06/30/21
 
Expenses:
Cost of revenue

34,465

 

34,897

 

37,085

 

37,557

 

144,004

 

34,315

 

Research and development

26,989

 

31,035

 

30,608

 

46,479

 

135,111

 

34,776

 

Sales and marketing

38,627

 

41,705

 

43,904

 

53,307

 

177,543

 

41,979

 

General and administrative

23,368

 

24,495

 

23,943

 

32,395

 

104,201

 

24,291

 

Gains, losses and other items, net

1,995

 

(619

)

(6

)

1,345

 

2,715

 

1,278

 

 
Gross profit:

64,972

 

69,764

 

82,668

 

81,618

 

299,022

 

84,723

 

% Gross margin

65.3

%

66.7

%

69.0

%

68.5

%

67.5

%

71.2

%

 
Excluded items:
Purchased intangible asset amortization (cost of revenue)

5,306

 

4,350

 

4,213

 

4,177

 

18,046

 

4,645

 

Non-cash stock compensation (cost of revenue)

775

 

913

 

988

 

2,624

 

5,300

 

790

 

Non-cash stock compensation (research and development)

5,886

 

7,713

 

7,376

 

17,985

 

38,960

 

5,348

 

Non-cash stock compensation (sales and marketing)

7,123

 

9,233

 

9,212

 

14,833

 

40,401

 

6,793

 

Non-cash stock compensation (general and administrative)

2,701

 

6,345

 

6,318

 

11,682

 

27,046

 

5,565

 

Restructuring and merger charges (gains, losses, and other)

1,995

 

(619

)

(6

)

1,345

 

2,715

 

1,278

 

Transformation costs (general and administrative)

3,605

 

258

 

-

 

-

 

3,863

 

-

 

Gain on retained profits interest (other income)

-

 

-

 

-

 

-

 

-

 

(30,052

)

Total excluded items

27,391

 

28,193

 

28,101

 

52,646

 

136,331

 

(5,633

)

 
Expenses, excluding items:
Cost of revenue

28,384

 

29,634

 

31,884

 

30,756

 

120,658

 

28,880

 

Research and development

21,103

 

23,322

 

23,232

 

28,494

 

96,151

 

29,428

 

Sales and marketing

31,504

 

32,472

 

34,692

 

38,474

 

137,142

 

35,186

 

General and administrative

17,062

 

17,892

 

17,625

 

20,713

 

73,292

 

18,726

 

Gains, losses and other items, net

-

 

-

 

-

 

-

 

-

 

-

 

 
Gross profit, excluding items:

71,053

 

75,027

 

87,869

 

88,419

 

322,368

 

90,158

 

% Gross margin

71.5

%

71.7

%

73.4

%

74.2

%

72.8

%

75.7

%

 

(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 INCOME (LOSS) GUIDANCE (1)
(Unaudited)
(Dollars in thousands)
 
For the quarter ending For the year ending
September 30, 2021 March 31, 2022
 
 
GAAP loss from operations

 

(22,000

)

 

(96,000

)

 
Excluded items:
Purchased intangible asset amortization

 

5,000

 

 

19,000

 

Non-cash stock compensation

 

21,000

 

 

91,000

 

Restructuring and transformation costs

 

-

 

 

1,000

 

Total excluded items

 

26,000

 

 

111,000

 

 
Non-GAAP income from operations

$

4,000

 

$

15,000

 

 

(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 2022 FINANCIAL RESULTS

EXPLANATION OF NON-GAAP MEASURES AND OTHER KEY METRICS

To supplement our financial results, we use non-GAAP measures which exclude certain acquisition related expenses, non-cash stock compensation and restructuring charges. We believe these measures are helpful in understanding our past performance and our future results. Our non-GAAP financial measures and schedules are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read only in conjunction with our consolidated GAAP financial statements. Our management regularly uses these non-GAAP financial measures internally to understand, manage and evaluate our business and to make operating decisions. These measures are among the primary factors management uses in planning for and forecasting future periods. Compensation of our executives is also based in part on the performance of our business based on these non-GAAP measures.

Our non-GAAP financial measures, including non-GAAP earnings (loss) per share, income (loss) from operations and adjusted EBITDA reflect adjustments based on the following items, as well as the related income tax effects when applicable:

Purchased intangible asset amortization: We incur amortization of purchased intangibles in connection with our acquisitions. Purchased intangibles include (i) developed technology, (ii) customer and publisher relationships, and (iii) trade names. We expect to amortize for accounting purposes the fair value of the purchased intangibles based on the pattern in which the economic benefits of the intangible assets will be consumed as revenue is generated. Although the intangible assets generate revenue for us, we exclude this item because this expense is non-cash in nature and because we believe the non-GAAP financial measures excluding this item provide meaningful supplemental information regarding our operational performance.

Non-cash stock compensation: Non-cash stock compensation consists of charges for associate restricted stock units, performance shares and stock options in accordance with current GAAP related to stock-based compensation including expense associated with stock-based compensation related to unvested options assumed in connection with our acquisitions. As we apply stock-based compensation standards, we believe that it is useful to investors to understand the impact of the application of these standards to our operational performance. Although stock-based compensation expense is calculated in accordance with current GAAP and constitutes an ongoing and recurring expense, such expense is excluded from non-GAAP results because it is not an expense that typically requires or will require cash settlement by us and because such expense is not used by us to assess the core profitability of our business operations.

Restructuring charges: During the past several years, we have initiated certain restructuring activities in order to align our costs in connection with both our operating plans and our business strategies based on then-current economic conditions. As a result, we recognized costs related to termination benefits for associates whose positions were eliminated, lease and other contract termination charges, and leasehold improvement write offs. These items, reported as gains, losses, and other items, net, are excluded from non-GAAP results because such amounts are not used by us to assess the core profitability of our business operations.

Transformation costs: In previous years, we incurred significant expenses to separate the financial statements of our operating segments, with particular focus on segment-level balance sheets, and to evaluate portfolio priorities. Our criteria for excluding transformation expenses from our non-GAAP measures is as follows: 1) projects are discrete in nature; 2) excluded expenses consist only of third-party consulting fees that we would not incur otherwise; and 3) we do not exclude employee related expenses or other costs associated with the ongoing operations of our business. We substantially completed those projects during the third quarter of fiscal year 2018. Beginning in the fourth quarter of fiscal 2018, and through most of fiscal 2019, we incurred transaction support expenses and system separation costs related to the Company's announced evaluation of strategic options for its Marketing Solutions (AMS) business. In the first and second quarters of fiscal 2021 in response to the potential COVID-19 pandemic impact on our business, we incurred significant costs associated with the assessment of strategic and operating plans, including our long-term location strategy, and assistance in implementing the restructuring activities as a result of this assessment. Our criteria for excluding these costs are the same. We believe excluding these items from our non-GAAP financial measures is useful for investors and provides meaningful supplemental information.

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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