SAN FRANCISCO–(BUSINESS WIRE)–LiveRamp® (NYSE: RAMP), the leading global data connectivity platform, today announced its financial results for the quarter and fiscal year ended March 31, 2021.
Fourth Quarter Financial Highlights
All metrics compared to the prior year period
Total revenue was $119 million, up 13%. Subscription revenue was $94 million, up 13% and contributed 79% of total revenue. Marketplace & Other revenue was $25 million, up 13%. GAAP gross profit was $82 million, up 19%, and GAAP gross margin of 68% expanded 3 percentage points. Non-GAAP gross profit was $88 million, up 18%, and non-GAAP gross margin of 74% expanded 3 percentage points. GAAP operating loss was $52 million compared to a GAAP operating loss of $41 million in the prior year period. Non-GAAP operating income was $1 million compared to a non-GAAP operating loss of $16 million in the prior year period. GAAP loss per share was $0.49, and non-GAAP earnings per share was $0.04. Net cash used in operating activities was $18 million compared to net cash used in operating activities of $0 million in the prior year period. Fiscal Year Financial Highlights
All metrics compared to the prior fiscal year
Total revenue was $443 million, up 16%. Subscription revenue was $357 million, up 17% and contributed 80% of total revenue. Marketplace & Other revenue was $86 million, up 15%. GAAP gross profit was $299 million, up 31%, and GAAP gross margin of 67% expanded 8 percentage points. Non-GAAP gross profit was $322 million, up 27%, and Non-GAAP gross margin of 73% expanded 6 percentage points. GAAP operating loss was $121 million compared to a GAAP operating loss of $181 million in the prior fiscal year. Non-GAAP operating income was $16 million compared to a non-GAAP operating loss of $64 million in the prior fiscal year. GAAP loss per share was $1.36, and non-GAAP earnings per share were $0.23. Net cash used from operating activities was $21 million compared to net cash used from operating activities of $29 million in the prior fiscal year. In fiscal 2021, LiveRamp repurchased 1.3 million shares for $42 million. Since March 31, 2021, the Company has repurchased an additional 275 thousand shares for $13.3 million. In total, since the inception of the share repurchase program in August 2011, the Company has returned over $1.19 billion in capital to shareholders. A reconciliation between GAAP and non-GAAP results is provided in the schedules to this press release.
“LiveRamp had an exceptional year amidst an unprecedented macro environment. I am proud of how our team showed up for our customers and each other in FY21,” said LiveRamp CEO Scott Howe. “LiveRamp’s Authenticated Traffic Solution has become the industry standard for identity in a post cookie world, and Safe Haven® is game changing for the future of data-driven customer experience.”
“LiveRamp again delivered on its commitments in FY21,” said LiveRamp President and CFO Warren Jenson. “Not only did we meaningfully grow our top-line, we delivered a record bottom-line performance, as well. We were profitable on a non-GAAP operating income basis in each quarter of FY21. Further, our record bookings performance positions us well for another strong year in FY22.”
GAAP and Non-GAAP Results
The following table summarizes the Company’s financial results for its fourth fiscal quarter and fiscal year ($ in millions):
Q4 Fiscal 2021
Full Year Fiscal 2021
Results
Results
GAAP
Non-GAAP
GAAP
Non-GAAP
Subscription revenue
$94
—
$357
—
YoY change %
13%
17%
Marketplace & other revenue
$25
—
$86
—
YoY change %
13%
15%
Total revenue
$119
—
$443
—
YoY change %
13%
16%
Gross profit
$82
$88
$299
$322
% Gross margin
68%
74%
67%
73%
YoY change, pts
3pts
3pts
8pts
6pts
Operating income (loss)
($52)
$1
($121)
$16
% Operating margin
(44%)
1%
(27%)
4%
YoY change, pts
(5pts)
16pts
20pts
20pts
Net income (loss)
($33)
$3
($90)
$16
Earnings (loss) per share
($0.49)
$0.04
($1.36)
$0.23
Shares to Calculate EPS
67.1
69.9
66.3
69.0
YoY change %
0%
4%
(2%)
2%
Net operating cash flow
($18)
—
($21)
—
Free cash flow to equity
—
($18)
—
($23)
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
ATS continues to experience strong global adoption, solidifying its role as the leading post-cookie solution. To date, more than 400 publishers have adopted ATS, including 70% of the U.S Comscore 20 and 65% of the U.S. Comscore 50. In addition, ATS has been adopted by more than 70 leading supply-side and demand-side platforms. Importantly, it is generating results: Brand advertisers are generating better returns. A new Forrester Consulting Total Economic Impact™ (TEI) study, commissioned by LiveRamp, found advertisers who use LiveRamp’s ATS can achieve 343% ROI over three years with payback within only six months of initial investment. Publishers are making more money. Recent case studies with top publishers suggest potential to increase CPM (cost per thousand impression) by over 40% using ATS compared to legacy third-party cookie methods. During the fourth quarter, subscription net retention was 101% and platform net retention was 104%. Current remaining performance obligations (CRPO), which is contracted and committed revenue expected to be recognized over the next 12 months, was $256 million, up 14% compared to the fourth quarter of last year. Sequentially, CRPO was up 11%. LiveRamp has 70 clients whose subscription contracts exceed $1 million in annual revenue, up 32% compared to the prior year. LiveRamp’s direct subscription customer count at quarter end was 825, up from 780 a year ago. Financial Outlook
LiveRamp’s non-GAAP guidance excludes the impact of non-cash stock compensation, purchased intangible asset amortization, and restructuring charges.
For the first quarter of fiscal 2022, LiveRamp expects to report:
Revenue of up to $112 million, an increase of up to 13% year-over-year GAAP operating loss of approximately $30 million Non-GAAP operating loss of up to $2 million For fiscal 2022, LiveRamp expects to report:
Revenue of up to $509 million, an increase of up to 15% year-over-year GAAP operating loss of between $119 million and $114 million Non-GAAP operating income of between $0 million and $5 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 2020 ended March 31, 2020, and LiveRamp’s Quarterly Reports on Form 10-Q issued in fiscal year 2021.
The financial information set forth in this press release reflects estimates based on information available at this time.
LiveRamp assumes no obligation and does not currently intend to update these forward-looking statements.
To automatically receive LiveRamp financial news by email, please visit www.LiveRamp.com and subscribe to email alerts.
LiveRampⓇ, 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 $
%
2021
2020
Variance
Variance
Revenues 119,175
105,701
13,474
12.7
%
Cost of revenue 37,557
36,852
705
1.9
%
Gross profit 81,618
68,849
12,769
18.5
%
% Gross margin 68.5
%
65.1
%
Operating expenses: Research and development 46,479
28,411
18,068
63.6
%
Sales and marketing 53,307
48,564
4,743
9.8
%
General and administrative 32,395
30,216
2,179
7.2
%
Gains, losses and other items, net 1,345
2,447
(1,102
)
(45.0
%)
Total operating expenses 133,526
109,638
23,888
21.8
%
Loss from operations (51,908
)
(40,789
)
(11,119
)
(27.3
%)
% Margin -43.6
%
-38.6
%
Total other income (expense) (404
)
1,565
(1,969
)
(125.8
%)
Loss from continuing operations before income taxes (52,312
)
(39,224
)
(13,088
)
(33.4
%)
Income taxes (benefit) (19,465
)
(34,345
)
14,880
43.3
%
Net loss from continuing operations (32,847
)
(4,879
)
(27,968
)
(573.2
%)
Earnings from discontinued operations, net of tax –
750
(750
)
(100.0
%)
Net loss (32,847
)
(4,129
)
(28,718
)
(695.5
%)
Basic earnings (loss) per share: Continuing operations (0.49
)
(0.07
)
(0.42
)
(571.9
%)
Discontinued operations –
0.01
(0.01
)
(100.0
%)
Basic loss per share (0.49
)
(0.06
)
(0.43
)
(688.7
%)
Diluted earnings (loss) per share: Continuing operations (0.49
)
(0.07
)
(0.42
)
(571.9
%)
Discontinued operations –
0.01
(0.01
)
(100.0
%)
Diluted loss per share (0.49
)
(0.06
)
(0.43
)
(688.7
%)
Basic weighted average shares 67,111
66,977
Diluted weighted average shares 67,111
66,977
LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (Dollars in thousands, except per share amounts) For the Twelve Months Ended March 31
$
%
2021
2020
Variance
Variance
Revenues 443,026
380,572
62,454
16.4
%
Cost of revenue 144,004
152,704
(8,700
)
(5.7
%)
Gross profit 299,022
227,868
71,154
31.2
%
% Gross margin 67.5
%
59.9
%
Operating expenses: Research and development 135,111
105,981
29,130
27.5
%
Sales and marketing 177,543
188,905
(11,362
)
(6.0
%)
General and administrative 104,201
108,903
(4,702
)
(4.3
%)
Gains, losses and other items, net 2,715
5,001
(2,286
)
(45.7
%)
Total operating expenses 419,570
408,790
10,780
2.6
%
Loss from operations (120,548
)
(180,922
)
60,374
33.4
%
% Margin -27.2
%
-47.5
%
Total other income (expense) (252
)
15,385
(15,637
)
(101.6
%)
Loss from continuing operations before income taxes (120,800
)
(165,537
)
44,737
27.0
%
Income taxes (benefit) (30,532
)
(40,276
)
9,744
24.2
%
Net loss from continuing operations (90,268
)
(125,261
)
34,993
27.9
%
Earnings from discontinued operations, net of tax –
750
(750
)
(100.0
%)
Net loss (90,268
)
(124,511
)
34,243
27.5
%
Basic earnings (loss) per share: Continuing operations (1.36
)
(1.85
)
0.49
26.4
%
Discontinued operations –
0.01
(0.01
)
(100.0
%)
Basic loss per share (1.36
)
(1.84
)
0.48
26.0
%
Diluted earnings (loss) per share: Continuing operations (1.36
)
(1.85
)
0.49
26.4
%
Discontinued operations –
0.01
(0.01
)
(100.0
%)
Diluted loss per share (1.36
)
(1.84
)
0.48
26.0
%
Basic weighted average shares 66,304
67,760
Diluted weighted average shares 66,304
67,760
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,
2021
2020
2021
2020
Loss from continuing operations before income taxes (52,312
)
(39,224
)
(120,800
)
(165,537
)
Income taxes (benefit) (19,465
)
(34,345
)
(30,532
)
(40,276
)
Net loss from continuing operations (32,847
)
(4,879
)
(90,268
)
(125,261
)
Earnings from discontinued operations, net of tax –
750
–
750
Net loss (32,847
)
(4,129
)
(90,268
)
(124,511
)
Loss per share: Basic (0.49
)
(0.06
)
(1.36
)
(1.84
)
Diluted (0.49
)
(0.06
)
(1.36
)
(1.84
)
Excluded items: Purchased intangible asset amortization (cost of revenue) 4,177
5,181
18,046
19,042
Non-cash stock compensation (cost of revenue and operating expenses) 47,124
17,168
111,707
89,447
Accelerated depreciation (cost of revenue and operating expenses) –
–
–
3,569
Transformation costs (general and administrative) –
–
3,863
–
Restructuring and merger charges (gains, losses, and other) 1,345
2,447
2,715
5,001
Total excluded items 52,646
24,796
136,331
117,059
Income (loss) from operations before income taxes and excluding items 334
(14,428
)
15,531
(48,478
)
Income taxes (benefit) (2) (2,628
)
(11,199
)
(638
)
(11,452
)
Non-GAAP net earnings (loss) 2,962
(3,229
)
16,169
(37,026
)
Non-GAAP earnings (loss) per share: Basic 0.04
(0.05
)
0.24
(0.55
)
Diluted 0.04
(0.05
)
0.23
(0.55
)
Basic weighted average shares 67,111
66,977
66,304
67,760
Diluted weighted average shares 69,935
66,977
68,963
67,760
(1) This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our condensed consolidated financial statements prepared in accordance with GAAP. For a detailed explanation of the adjustments made to comparable GAAP measures, the reasons why management uses these measures and the material limitations on the usefulness of these measures, please see Appendix A.
(2) Income taxes were calculated by applying the estimated annual effective tax rate to year-to-date pretax income or loss and adjusting for discrete tax items in the period. The differences between our GAAP and non-GAAP effective tax rates were primarily due to the net tax effects of the excluded items, coupled with larger pre-tax losses for GAAP purposes versus smaller pre-tax losses or income for non-GAAP purposes.
LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES RECONCILIATION OF GAAP TO NON-GAAP INCOME (LOSS) FROM OPERATIONS (1) (Unaudited) (Dollars in thousands) For the Three Months Ended
For the Twelve Months Ended
March 31,
March 31,
2021
2020
2021
2020
Loss from continuing operations (51,908
)
(40,789
)
(120,548
)
(180,922
)
Excluded items: Purchased intangible asset amortization (cost of revenue) 4,177
5,181
18,046
19,042
Non-cash stock compensation (cost of revenue and operating expenses) 47,124
17,168
111,707
89,447
Accelerated depreciation (cost of revenue and operating expenses) –
–
–
3,569
Transformation costs (general and administrative) –
–
3,863
–
Restructuring and merger charges (gains, losses, and other) 1,345
2,447
2,715
5,001
Total excluded items 52,646
24,796
136,331
117,059
Income (loss) from continuing operations before excluded items 738
(15,993
)
15,783
(63,863
)
(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,
2021
2020
2021
2020
Net loss from continuing operations (32,847
)
(4,879
)
(90,268
)
(125,261
)
Income taxes (benefit) (19,465
)
(34,345
)
(30,532
)
(40,276
)
Other expense (income) 404
(1,565
)
252
(15,385
)
Loss from operations (51,908
)
(40,789
)
(120,548
)
(180,922
)
Depreciation and amortization 6,277
7,943
27,741
35,901
EBITDA (45,631
)
(32,846
)
(92,807
)
(145,021
)
Other adjustments: Non-cash stock compensation (cost of revenue and operating expenses) 47,124
17,168
111,707
89,447
Transformation costs (general and administrative) –
–
3,863
–
Restructuring and merger charges (gains, losses, and other) 1,345
2,447
2,715
5,001
Other adjustments 48,469
19,615
118,285
94,448
Adjusted EBITDA 2,838
(13,231
)
25,478
(50,573
)
(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,
$
%
2021
2020
Variance
Variance
Assets Current assets: Cash and cash equivalents 572,787
717,811
(145,024
)
(20.2
%)
Restricted cash 8,900
14,815
(5,915
)
(39.9
%)
Trade accounts receivable, net 114,284
92,761
21,523
23.2
%
Refundable income taxes 65,692
38,340
27,352
71.3
%
Other current assets 64,052
32,666
31,386
96.1
%
Total current assets 825,715
896,393
(70,678
)
(7.9
%)
Property and equipment 44,284
44,786
(502
)
(1.1
%)
Less – accumulated depreciation and amortization 32,327
25,465
6,862
26.9
%
Property and equipment, net 11,957
19,321
(7,364
)
(38.1
%)
Intangible assets, net 39,730
45,200
(5,470
)
(12.1
%)
Goodwill 357,446
297,796
59,650
20.0
%
Deferred commissions, net 22,619
16,014
6,605
41.2
%
Other assets, net 30,854
27,165
3,689
13.6
%
1,288,321
1,301,889
(13,568
)
(1.0
%)
Liabilities and Stockholders’ Equity Current liabilities: Trade accounts payable 39,955
42,204
(2,249
)
(5.3
%)
Accrued payroll and related expenses 46,438
28,791
17,647
61.3
%
Other accrued expenses 58,353
68,991
(10,638
)
(15.4
%)
Acquisition escrow payable 8,900
14,815
(5,915
)
(39.9
%)
Deferred revenue 11,603
6,581
5,022
76.3
%
Total current liabilities 165,249
161,382
3,867
2.4
%
Other liabilities 42,389
52,995
(10,606
)
(20.0
%)
Stockholders’ equity: Preferred stock –
–
–
n/a
Common stock 14,781
14,394
387
2.7
%
Additional paid-in capital 1,630,072
1,496,565
133,507
8.9
%
Retained earnings 1,454,826
1,545,094
(90,268
)
(5.8
%)
Accumulated other comprehensive income 7,522
5,745
1,777
30.9
%
Treasury stock, at cost (2,026,518
)
(1,974,286
)
(52,232
)
(2.6
%)
Total stockholders’ equity 1,080,683
1,087,512
(6,829
)
(0.6
%)
1,288,321
1,301,889
(13,568
)
(1.0
%)
LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Dollars in thousands) For the Three Months Ended March 31, 2021
2020
Cash flows from operating activities: Net loss (32,847
)
(4,129
)
Earnings from discontinued operations, net of tax –
(750
)
Non-cash operating activities: Depreciation and amortization 6,277
7,943
Loss on disposal or impairment of assets 54
1,865
Provision for doubtful accounts (431
)
3,450
Deferred income taxes (1,418
)
(8,343
)
Non-cash stock compensation expense 47,124
17,168
Changes in operating assets and liabilities: Accounts receivable 1,818
(8,667
)
Deferred commissions (1,523
)
(2,563
)
Other assets (26,283
)
(8,548
)
Accounts payable and other liabilities 6,731
12,326
Income taxes (17,233
)
(12,030
)
Deferred revenue (156
)
2,058
Net cash used in operating activities (17,887
)
(220
)
Cash flows from investing activities: Capital expenditures (376
)
(1,409
)
Proceeds from sales of property and equipment –
356
Purchases of investments (4,500
)
–
Cash paid in acquisition, net of cash received (58,264
)
–
Net cash used in investing activities (63,140
)
(1,053
)
Cash flows from financing activities: Proceeds related to the issuance of common stock under stock and employee benefit plans 61
1,331
Shares repurchased for tax withholdings upon vesting of stock-based awards (538
)
(6,465
)
Acquisition of treasury stock –
(61,002
)
Net cash used in financing activities (477
)
(66,136
)
Cash flows from discontinued operations: From operating activities –
(207
)
From investing activities –
18,582
Net cash provided by discontinued operations –
18,375
Effect of exchange rate changes on cash (210
)
(355
)
Net change in cash, cash equivalents, and restricted cash (81,714
)
(49,389
)
Cash, cash equivalents, and restricted cash at beginning of period 663,401
782,015
Cash, cash equivalents, and restricted cash at end of period 581,687
732,626
Supplemental cash flow information: Cash paid (received) during the period for: Income taxes (819
)
(13,515
)
LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Dollars in thousands) For the Twelve Months Ended March 31, 2021
2020
Cash flows from operating activities: Net loss (90,268
)
(124,511
)
Earnings from discontinued operations, net of tax –
(750
)
Non-cash operating activities: Depreciation and amortization 27,741
35,901
Loss on disposal or impairment of assets 388
1,725
Provision for doubtful accounts 2,915
7,133
Deferred income taxes (1,418
)
(6,878
)
Non-cash stock compensation expense 111,707
89,447
Changes in operating assets and liabilities: Accounts receivable (24,828
)
(20,518
)
Deferred commissions (6,605
)
(5,273
)
Other assets (18,772
)
(6,144
)
Accounts payable and other liabilities (116
)
24,923
Income taxes (26,215
)
(25,453
)
Deferred revenue 4,911
1,823
Net cash used in operating activities (20,560
)
(28,575
)
Cash flows from investing activities: Capital expenditures (2,182
)
(11,711
)
Proceeds from sales of property and equipment –
873
Purchases of investments (7,500
)
–
Purchases of strategic investments (2,200
)
–
Cash paid in acquisition, net of cash received (76,012
)
(105,365
)
Net cash used in investing activities (87,894
)
(116,203
)
Cash flows from financing activities: Proceeds related to the issuance of common stock under stock and employee benefit plans 8,737
4,736
Shares repurchased for tax withholdings upon vesting of stock-based awards (9,920
)
(24,522
)
Acquisition of treasury stock (42,312
)
(182,190
)
Net cash used in financing activities (43,495
)
(201,976
)
Cash flows from discontinued operations: From operating activities –
(207
)
From investing activities –
18,582
Net cash provided by discontinued operations –
18,375
Effect of exchange rate changes on cash 1,010
(468
)
Net change in cash, cash equivalents, and restricted cash (150,939
)
(328,847
)
Cash, cash equivalents, and restricted cash at beginning of period 732,626
1,061,473
Cash, cash equivalents, and restricted cash at end of period 581,687
732,626
Supplemental cash flow information: Cash paid (received) during the period for: Income taxes (2,911
)
(7,344
)
LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES CALCULATION OF FREE CASH FLOW TO EQUITY (1) (Unaudited) (Dollars in thousands) 06/30/19 09/30/19 12/31/19 03/31/20 FY2020 06/30/20 09/30/20 12/31/20 03/31/21 FY2021 Net Cash Provided by (Used in) Operating Activities (15,408
)
(28,751
)
15,804
(220
)
(28,575
)
(23,612
)
6,249
14,690
(17,887
)
(20,560
)
Less: Capital expenditures (4,888
)
(2,641
)
(2,773
)
(1,409
)
(11,711
)
(832
)
(296
)
(678
)
(376
)
(2,182
)
Free Cash Flow to Equity (20,296
)
(31,392
)
13,031
(1,629
)
(40,286
)
(24,444
)
5,953
14,012
(18,263
)
(22,742
)
(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) FY21 to FY20 06/30/19 09/30/19 12/31/19 03/31/20 FY2020 06/30/20 09/30/20 12/31/20 03/31/21 FY2021 % $ Revenues 82,511
90,143
102,217
105,701
380,572
99,437
104,661
119,753
119,175
443,026
16.4
%
62,454
Cost of revenue 36,426
41,460
37,966
36,852
152,704
34,465
34,897
37,085
37,557
144,004
(5.7
%)
(8,700
)
Gross profit 46,085
48,683
64,251
68,849
227,868
64,972
69,764
82,668
81,618
299,022
31.2
%
71,154
% Gross margin 55.9
%
54.0
%
62.9
%
65.1
%
59.9
%
65.3
%
66.7
%
69.0
%
68.5
%
67.5
%
Operating expenses Research and development 23,722
26,445
27,403
28,411
105,981
26,989
31,035
30,608
46,479
135,111
27.5
%
29,130
Sales and marketing 43,144
45,204
51,993
48,564
188,905
38,627
41,705
43,904
53,307
177,543
(6.0
%)
(11,362
)
General and administrative 25,318
27,262
26,107
30,216
108,903
23,368
24,495
23,943
32,395
104,201
(4.3
%)
(4,702
)
Gains, losses and other items, net 2,276
45
233
2,447
5,001
1,995
(619
)
(6
)
1,345
2,715
(45.7
%)
(2,286
)
Total operating expenses 94,460
98,956
105,736
109,638
408,790
90,979
96,616
98,449
133,526
419,570
2.6
%
10,780
Loss from operations (48,375
)
(50,273
)
(41,485
)
(40,789
)
(180,922
)
(26,007
)
(26,852
)
(15,781
)
(51,908
)
(120,548
)
33.4
%
60,374
% Margin -58.6
%
-55.8
%
-40.6
%
-38.6
%
-47.5
%
-26.2
%
-25.7
%
-13.2
%
-43.6
%
-27.2
%
Total other income (expense) 5,882
4,780
3,158
1,565
15,385
463
(225
)
(86
)
(404
)
(252
)
(101.6
%)
(15,637
)
Loss from continuing operations before income taxes (42,493
)
(45,493
)
(38,327
)
(39,224
)
(165,537
)
(25,544
)
(27,077
)
(15,867
)
(52,312
)
(120,800
)
27.0
%
44,737
Income taxes (benefit) (353
)
(5,291
)
(287
)
(34,345
)
(40,276
)
(3,816
)
(3,109
)
(4,142
)
(19,465
)
(30,532
)
24.2
%
9,744
Net loss from continuing operations (42,140
)
(40,202
)
(38,040
)
(4,879
)
(125,261
)
(21,728
)
(23,968
)
(11,725
)
(32,847
)
(90,268
)
27.9
%
34,993
Earnings from discontinued operations, net of tax –
–
–
750
750
–
–
–
–
–
(100.0
%)
(750
)
Net loss (42,140
)
(40,202
)
(38,040
)
(4,129
)
(124,511
)
(21,728
)
(23,968
)
(11,725
)
(32,847
)
(90,268
)
27.5
%
34,243
Diluted loss per share (0.61
)
(0.59
)
(0.56
)
(0.06
)
(1.84
)
(0.33
)
(0.36
)
(0.18
)
(0.49
)
(1.36
)
25.9
%
0.48
Diluted loss per share continuing operations (0.61
)
(0.59
)
(0.56
)
(0.07
)
(1.85
)
(0.33
)
(0.36
)
(0.18
)
(0.49
)
(1.36
)
26.4
%
0.49
Some loss per share amounts may not add due to rounding. Basic shares 68,906
67,684
67,473
66,977
67,760
65,570
66,010
66,523
67,111
66,304
Diluted shares 68,906
67,684
67,473
66,977
67,760
65,570
66,010
66,523
67,111
66,304
LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES RECONCILIATION OF GAAP TO NON-GAAP EPS (1) (Unaudited) (Dollars in thousands, except per share amounts) 06/30/19 09/30/19 12/31/19 03/31/20 FY2020 06/30/20 09/30/20 12/31/20 03/31/21 FY2021 Loss from continuing operations before income taxes (42,493
)
(45,493
)
(38,327
)
(39,224
)
(165,537
)
(25,544
)
(27,077
)
(15,867
)
(52,312
)
(120,800
)
Income taxes (benefit) (353
)
(5,291
)
(287
)
(34,345
)
(40,276
)
(3,816
)
(3,109
)
(4,142
)
(19,465
)
(30,532
)
Net loss from continuing operations (42,140
)
(40,202
)
(38,040
)
(4,879
)
(125,261
)
(21,728
)
(23,968
)
(11,725
)
(32,847
)
(90,268
)
Earnings from discontinued operations, net of tax –
–
–
750
750
–
–
–
–
–
Net loss (42,140
)
(40,202
)
(38,040
)
(4,129
)
(124,511
)
(21,728
)
(23,968
)
(11,725
)
(32,847
)
(90,268
)
Loss per share: Basic (0.61
)
(0.59
)
(0.56
)
(0.06
)
(1.84
)
(0.33
)
(0.36
)
(0.18
)
(0.49
)
(1.36
)
Diluted (0.61
)
(0.59
)
(0.56
)
(0.06
)
(1.84
)
(0.33
)
(0.36
)
(0.18
)
(0.49
)
(1.36
)
Excluded items: Purchased intangible asset amortization (cost of revenue) 3,123
5,369
5,369
5,181
19,042
5,306
4,350
4,213
4,177
18,046
Non-cash stock compensation (cost of revenue and operating expenses) 18,630
23,354
30,295
17,168
89,447
16,485
24,204
23,894
47,124
111,707
Accelerated depreciation (cost of revenue and operating expenses) 1,906
1,663
–
–
3,569
–
–
–
–
–
Restructuring and merger charges (gains, losses, and other) 2,276
45
233
2,447
5,001
1,995
(619
)
(6
)
1,345
2,715
Transformation costs (general and administrative) –
–
–
–
–
3,605
258
–
–
3,863
Total excluded items, continuing operations 25,935
30,431
35,897
24,796
117,059
27,391
28,193
28,101
52,646
136,331
Income (loss) from continuing operations before income taxes and excluding items (16,558
)
(15,062
)
(2,430
)
(14,428
)
(48,478
)
1,847
1,116
12,234
334
15,531
Income taxes (benefit) (216
)
190
(227
)
(11,199
)
(11,452
)
934
(1,291
)
2,347
(2,628
)
(638
)
Non-GAAP net earnings (loss) from continuing operations (16,342
)
(15,252
)
(2,203
)
(3,229
)
(37,026
)
913
2,407
9,887
2,962
16,169
Non-GAAP earnings (loss) per share from continuing operations: Basic (0.24
)
(0.23
)
(0.03
)
(0.05
)
(0.55
)
0.01
0.04
0.15
0.04
0.24
Diluted (0.24
)
(0.23
)
(0.03
)
(0.05
)
(0.55
)
0.01
0.03
0.14
0.04
0.23
Basic weighted average shares 68,906
67,684
67,473
66,977
67,760
65,570
66,010
66,523
67,111
66,304
Diluted weighted average shares 68,906
67,684
67,473
66,977
67,760
67,337
68,804
69,775
69,935
68,963
Some totals may not add due to rounding (1) This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our condensed consolidated financial statements prepared in accordance with GAAP. For a detailed explanation of the adjustments made to comparable GAAP measures, the reasons why management uses these measures and the material limitations on the usefulness of these measures, please see Appendix A.
LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES RECONCILIATION OF GAAP TO NON-GAAP EXPENSES (1) (Unaudited) (Dollars in thousands) 06/30/19 09/30/19 12/31/19 03/31/20 FY2020 06/30/20 09/30/20 12/31/20 03/31/21 FY2021 Expenses: Cost of revenue 36,426
41,460
37,966
36,852
152,704
34,465
34,897
37,085
37,557
144,004
Research and development 23,722
26,445
27,403
28,411
105,981
26,989
31,035
30,608
46,479
135,111
Sales and marketing 43,144
45,204
51,993
48,564
188,905
38,627
41,705
43,904
53,307
177,543
General and administrative 25,318
27,262
26,107
30,216
108,903
23,368
24,495
23,943
32,395
104,201
Gains, losses and other items, net 2,276
45
233
2,447
5,001
1,995
(619
)
(6
)
1,345
2,715
Gross profit: 46,085
48,683
64,251
68,849
227,868
64,972
69,764
82,668
81,618
299,022
% Gross margin 55.9
%
54.0
%
62.9
%
65.1
%
59.9
%
65.3
%
66.7
%
69.0
%
68.5
%
67.5
%
Excluded items: Purchased intangible asset amortization (cost of revenue) 3,123
5,369
5,369
5,181
19,042
5,306
4,350
4,213
4,177
18,046
Non-cash stock compensation (cost of revenue) 755
1,060
1,028
926
3,769
775
913
988
2,624
5,300
Non-cash stock compensation (research and development) 4,451
6,346
6,462
6,001
23,260
5,886
7,713
7,376
17,985
38,960
Non-cash stock compensation (sales and marketing) 8,920
9,758
15,670
3,678
38,026
7,123
9,233
9,212
14,833
40,401
Non-cash stock compensation (general and administrative) 4,504
6,190
7,135
6,563
24,392
2,701
6,345
6,318
11,682
27,046
Accelerated depreciation (cost of revenue) 1,487
1,245
–
–
2,732
–
–
–
–
–
Accelerated depreciation (general and administrative) 419
418
–
–
837
–
–
–
–
–
Restructuring and merger charges (gains, losses, and other) 2,276
45
233
2,447
5,001
1,995
(619
)
(6
)
1,345
2,715
Transformation costs (general and administrative) –
–
–
–
–
3,605
258
–
–
3,863
Total excluded items 25,935
30,431
35,897
24,796
117,059
27,391
28,193
28,101
52,646
136,331
Expenses, excluding items: Cost of revenue 31,061
33,786
31,569
30,745
127,161
28,384
29,634
31,884
30,756
120,658
Research and development 19,271
20,099
20,941
22,410
82,721
21,103
23,322
23,232
28,494
96,151
Sales and marketing 34,224
35,446
36,323
44,886
150,879
31,504
32,472
34,692
38,474
137,142
General and administrative 20,395
20,654
18,972
23,653
83,674
17,062
17,892
17,625
20,713
73,292
Gains, losses and other items, net –
–
–
–
–
–
–
–
–
–
Gross profit, excluding items: 51,450
56,357
70,648
74,956
253,411
71,053
75,027
87,869
88,419
322,368
% Gross margin 62.4
%
62.5
%
69.1
%
70.9
%
66.6
%
71.5
%
71.7
%
73.4
%
74.2
%
72.8
%
(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 June 30, 2021 March 31, 2022 GAAP loss from operations (30,000
)
(116,500
)
Excluded items: Purchased intangible asset amortization 5,000
18,000
Non-cash stock compensation 21,000
99,000
Restructuring and merger charges 2,000
2,000
Total excluded items 28,000
119,000
Non-GAAP income (loss) from operations $
(2,000
)
$
2,500
(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
FISCAL 2021 FINANCIAL RESULTS
EXPLANATION OF NON-GAAP MEASURES AND OTHER KEY METRICS
To supplement our financial results, we use non-GAAP measures which exclude certain acquisition related expenses, non-cash stock compensation and restructuring charges. We believe these measures are helpful in understanding our past performance and our future results. Our non-GAAP financial measures and schedules are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read only in conjunction with our consolidated GAAP financial statements. Our management regularly uses these non-GAAP financial measures internally to understand, manage and evaluate our business and to make operating decisions. These measures are among the primary factors management uses in planning for and forecasting future periods. Compensation of our executives is also based in part on the performance of our business based on these non-GAAP measures.
Our non-GAAP financial measures, including non-GAAP earnings (loss) per share, income (loss) from operations and adjusted EBITDA reflect adjustments based on the following items, as well as the related income tax effects when applicable:
Purchased intangible asset amortization: We incur amortization of purchased intangibles in connection with our acquisitions. Purchased intangibles include (i) developed technology, (ii) customer and publisher relationships, and (iii) trade names. We expect to amortize for accounting purposes the fair value of the purchased intangibles based on the pattern in which the economic benefits of the intangible assets will be consumed as revenue is generated. Although the intangible assets generate revenue for us, we exclude this item because this expense is non-cash in nature and because we believe the non-GAAP financial measures excluding this item provide meaningful supplemental information regarding our operational performance.
Non-cash stock compensation: Non-cash stock compensation consists of charges for associate restricted stock units, performance shares and stock options in accordance with current GAAP related to stock-based compensation including expense associated with stock-based compensation related to unvested options assumed in connection with our acquisitions. As we apply stock-based compensation standards, we believe that it is useful to investors to understand the impact of the application of these standards to our operational performance. Although stock-based compensation expense is calculated in accordance with current GAAP and constitutes an ongoing and recurring expense, such expense is excluded from non-GAAP results because it is not an expense that typically requires or will require cash settlement by us and because such expense is not used by us to assess the core profitability of our business operations.
Restructuring charges: During the past several years, we have initiated certain restructuring activities in order to align our costs in connection with both our operating plans and our business strategies based on then-current economic conditions. As a result, we recognized costs related to termination benefits for associates whose positions were eliminated, lease and other contract termination charges, and leasehold improvement write offs. These items, reported as gains, losses, and other items, net, are excluded from non-GAAP results because such amounts are not used by us to assess the core profitability of our business operations.
Transformation costs: In previous years, we incurred significant expenses to separate the financial statements of our operating segments, with particular focus on segment-level balance sheets, and to evaluate portfolio priorities. Our criteria for excluding transformation expenses from our non-GAAP measures is as follows: 1) projects are discrete in nature; 2) excluded expenses consist only of third-party consulting fees that we would not incur otherwise; and 3) we do not exclude employee related expenses or other costs associated with the ongoing operations of our business. We substantially completed those projects during the third quarter of fiscal year 2018. Beginning in the fourth quarter of fiscal 2018, and through most of fiscal 2019, we incurred transaction support expenses and system separation costs related to the Company’s announced evaluation of strategic options for its Marketing Solutions (AMS) business. Beginning in the first quarter of fiscal 2021 in response to the potential COVID-19 pandemic impact on our business, we incurred significant costs associated with the assessment of strategic and operating plans, including our long-term location strategy, and assistance in implementing the restructuring activities as a result of this assessment. Our criteria for excluding these costs are the same. We believe excluding these items from our non-GAAP financial measures is useful for investors and provides meaningful supplemental information.
Accelerated depreciation: In the prior year we excluded depreciation costs associated with the reduced useful life of certain IT equipment in connection with the Company’s migration to a cloud-based data center solution. This migration was part of our AMS separation strategy. These costs are excluded from our non-GAAP results because of the short-term nature of the incremental expenses and such amounts are not used by us to assess the core profitability of our business operations.
Our non-GAAP financial schedules are:
Non-GAAP EPS, Non-GAAP Income from Operations, and Non-GAAP expenses: Our Non-GAAP earnings per share, Non-GAAP income from operations, and Non-GAAP expenses reflect adjustments as described above, as well as the related tax effects where applicable.
Adjusted EBITDA: Adjusted EBITDA is defined as net income from continuing operations before income taxes, other expenses, depreciation and amortization, and including adjustments as described above. We use Adjusted EBITDA to measure our performance from period to period both at the consolidated level as well as within our operating segments and to compare our results to those of our competitors. We believe that the inclusion of Adjusted EBITDA provides useful supplementary information to and facilitates analysis by investors in evaluating the Company’s performance and trends. The presentation of Adjusted EBITDA is not meant to be considered in isolation or as an alternative to net earnings as an indicator of our performance.
Free Cash Flow to Equity: To supplement our statement of cash flows, we use a non-GAAP measure of cash flow to analyze cash flows generated from operations. Free cash flow to equity is defined as operating cash flow less cash used by investing activities (excluding the impact of cash paid in acquisitions), less required payments of debt, and excluding the impact of discontinued operations. Management believes that this measure of cash flow is meaningful since it represents the amount of money available from continuing operations for the Company’s discretionary spending after funding all required obligations including scheduled debt payments. The presentation of non-GAAP free cash flow to equity is not meant to be considered in isolation or as an alternative to cash flows from operating activities as a measure of liquidity.