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LiveRamp Announces Strong Third Quarter Results and Raises Full Year Outlook

Total Revenue Up 17% and Subscription Revenue Up 19%

GAAP Gross Margin of 73% and Non-GAAP Gross Margin of 77%

$25 Million of Operating Cash Flow

86 $1 Million+ Customers

LiveRamp® (NYSE: RAMP), the leading global data connectivity platform, today announced its financial results for the quarter ended December 31, 2021.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20220209005439/en/

Third Quarter Financial Highlights

  • Total revenue was $141 million, up 17% compared to the prior year period.
  • Subscription revenue was $111 million, up 19% compared to the prior year period and contributed 79% of total revenue.
  • Marketplace & Other revenue was $29 million, up 12% compared to the prior year period.
  • GAAP gross profit was $102 million, up 23% compared to the prior year period. GAAP gross margin of 73% expanded 4 percentage points. Non-GAAP gross profit was $108 million, up 23% compared to the prior year period. Non-GAAP gross margin of 77% expanded 3 percentage points.
  • GAAP operating loss was $14 million compared to a GAAP operating loss of $16 million in the prior year period. Non-GAAP operating income was $15 million compared to non-GAAP operating income of $12 million in the prior year period.
  • GAAP loss per share was $0.23, and non-GAAP earnings per share were $0.14.
  • Net cash provided by operating activities was $25 million compared to $15 million in the prior year period.
  • During the quarter, LiveRamp repurchased approximately 115,000 shares for $5 million under the Company’s current share repurchase program. Since inception of the 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.

“LiveRamp is fast becoming critical data infrastructure for global brands,” said LiveRamp CEO Scott Howe. “Adoption of Safe Haven®, our enterprise platform, is accelerating. We ended the quarter with 86 million dollar plus customers and approximately 20% of our ARR is now driven by Safe Haven®.”

“Our operating trends remain strong,” added LiveRamp President and CFO Warren Jenson. “Our revenue growth was robust, gross margin was 77%, ahead of our stated long-term target, and we were profitable on a non-GAAP operating income basis for the seventh quarter in a row. In addition, we expect to be operating cash flow positive for fiscal 2022.”

GAAP and Non-GAAP Results

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

 

Q3 Fiscal 2022

 

Q3 Fiscal 2021

 

Results

 

Results

 

GAAP

 

Non-GAAP

 

GAAP

 

Non-GAAP

Subscription revenue

$111

$93

YoY change %

19%

 

15%

 

Marketplace & other revenue

$29

$26

YoY change %

12%

 

27%

 

Total revenue

$141

$120

YoY change %

17%

 

17%

 

 

 

 

 

 

Gross profit

$102

$108

$83

$88

% Gross margin

73%

77%

69%

73%

YoY change, pts

4 pts

3 pts

6 pts

4 pts

 

 

 

 

 

Operating income (loss)

($14)

$15

($16)

$12

% Operating margin

(10%)

10%

(13%)

10%

YoY change, pts

3 pts

27 pts

15 pts

 

 

 

 

 

Net earnings (loss)

($15)

$10

($12)

$10

Earnings (loss) per share

($0.23)

$0.14

($0.18)

$0.14

 

 

 

 

 

Shares to Calculate EPS

68.2

69.9

66.5

69.8

YoY change %

3%

0%

(1%)

0%

Net operating cash flow

$25

$15

Free cash flow to equity

$24

$14

 

 

 

 

 

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 Company’s Authenticated Traffic Solution (ATS) has reached global scale. There are currently more than 125 supply-side platforms (SSPs) and demand-side platforms (DSPs) live or committed to bid on RampID™ and ATS, including The Trade Desk, Amobee, Criteo, dataxu, and MediaMath.
  • During the third quarter, LiveRamp extended its global reach and announced the integration of ATS into Amazon Publisher Services (APS). Thousands of publishers using APS now have a better way to connect authenticated inventory to advertiser demand globally.
  • To date, over 500 publishers, representing more than 11,000 deployed domains, have integrated ATS worldwide, including Amazon, Microsoft, CafeMedia, Leaf Group, Prisma Media and Burda. Through these integrations, LiveRamp is now connected to over 70% of time spent online in the U.S.
  • Safe Haven® now serves more than 60% of big box retail in the U.S. and is the clear enterprise choice for enabling the global growth of retail media networks and data collaboration. In the quarter, LiveRamp entered into a new Safe Haven® agreement with JD.com, the second largest ecommerce platform in the world.
  • LiveRamp added 20 net new direct subscription customers in the third quarter. Customer count at quarter end was 890, up from 810 a year ago.
  • LiveRamp has 86 customers whose subscription contracts exceed $1 million in annual revenue, up 32% compared to the prior year period.
  • During the third quarter, subscription net retention was 110% and platform net retention was 109%.
  • Current remaining performance obligations (CRPO), which is contracted and committed revenue expected to be recognized over the next 12 months, was $289 million, up 25% 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 fourth quarter of fiscal 2022, LiveRamp expects to report:

  • Revenue of approximately $139 million, an increase of 17% year-over-year
  • GAAP operating loss of approximately $31 million
  • Non-GAAP operating income of approximately $2 million

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

  • Revenue of approximately $526 million, an increase of 19% year-over-year
  • GAAP operating loss of approximately $69 million
  • Non-GAAP operating income of approximately $41 million
  • In addition, the Company expects to be operating cash flow positive for the year

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 include 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 2022.

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

 

 

December 31,

 

 

 

 

 

 

$

 

%

 

 

2021

 

2020

 

Variance

 

Variance

 
Revenues

140,604

 

119,753

 

20,851

 

17.4

%

 
Cost of revenue

38,557

 

37,085

 

1,472

 

4.0

%

Gross profit

102,047

 

82,668

 

19,379

 

23.4

%

% Gross margin

72.6

%

69.0

%

 
Operating expenses:
Research and development

41,870

 

30,608

 

11,262

 

36.8

%

Sales and marketing

46,324

 

43,904

 

2,420

 

5.5

%

General and administrative

27,639

 

23,943

 

3,696

 

15.4

%

Gains, losses and other items, net

-

 

(6

)

6

 

100.0

%

Total operating expenses

115,833

 

98,449

 

17,384

 

17.7

%

 
Loss from operations

(13,786

)

(15,781

)

1,995

 

12.6

%

% Margin

-9.8

%

-13.2

%

 
Total other expense, net

(241

)

(86

)

(155

)

(180.2

%)

 
Loss before income taxes

(14,027

)

(15,867

)

1,840

 

11.6

%

 
Income tax expense (benefit)

1,348

 

(4,142

)

5,490

 

132.5

%

 
Net loss

(15,375

)

(11,725

)

(3,650

)

(31.1

%)

 
Basic loss per share

(0.23

)

(0.18

)

(0.05

)

(27.9

%)

 
Diluted loss per share:

(0.23

)

(0.18

)

(0.05

)

(27.9

%)

 
Basic weighted average shares

68,190

 

66,523

 

 
Diluted weighted average shares

68,190

 

66,523

 

 

LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(Dollars in thousands, except per share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Nine Months Ended

 

 

December 31,

 

 

 

 

 

 

$

 

%

 

 

2021

 

2020

 

Variance

 

Variance

 
Revenues

386,932

 

323,851

 

63,081

 

19.5

%

 
Cost of revenue

107,951

 

106,447

 

1,504

 

1.4

%

Gross profit

278,981

 

217,404

 

61,577

 

28.3

%

% Gross margin

72.1

%

67.1

%

 
Operating expenses:
Research and development

112,434

 

88,632

 

23,802

 

26.9

%

Sales and marketing

127,812

 

124,236

 

3,576

 

2.9

%

General and administrative

75,008

 

71,806

 

3,202

 

4.5

%

Gains, losses and other items, net

1,296

 

1,370

 

(74

)

(5.4

%)

Total operating expenses

316,550

 

286,044

 

30,506

 

10.7

%

 
Loss from operations

(37,569

)

(68,640

)

31,071

 

45.3

%

% Margin

-9.7

%

-21.2

%

 
Total other income, net

30,510

 

152

 

30,358

 

n/a

 

 
Loss before income taxes

(7,059

)

(68,488

)

61,429

 

89.7

%

 
Income tax benefit

(2,618

)

(11,067

)

8,449

 

76.3

%

 
Net loss

(4,441

)

(57,421

)

52,980

 

92.3

%

 
Basic loss per share

(0.07

)

(0.87

)

0.80

 

92.5

%

 
Diluted loss per share:

(0.07

)

(0.87

)

0.80

 

92.5

%

 
Basic weighted average shares

68,187

 

66,034

 

 
Diluted weighted average shares

68,187

 

66,034

 

 

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 Nine Months Ended

 

 

December 31,

 

December 31,

 

 

2021

 

2020

 

2021

 

2020

 
Loss before income taxes

(14,027

)

(15,867

)

(7,059

)

(68,488

)

 
Income tax expense (benefit)

1,348

 

(4,142

)

(2,618

)

(11,067

)

 
Net loss

(15,375

)

(11,725

)

(4,441

)

(57,421

)

 
Loss per share:
Basic

(0.23

)

(0.18

)

(0.07

)

(0.87

)

 
Diluted

(0.23

)

(0.18

)

(0.07

)

(0.87

)

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

4,647

 

4,213

 

13,904

 

13,869

 

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

23,758

 

23,894

 

61,475

 

64,583

 

Transformation costs (general and administrative)

-

 

-

 

-

 

3,863

 

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

-

 

(6

)

1,296

 

1,370

 

Gain on retained profits interest (other income)

(183

)

-

 

(30,235

)

-

 

 
Total excluded items

28,222

 

28,101

 

46,440

 

83,685

 

 
Income before income taxes and excluding items

14,195

 

12,234

 

39,381

 

15,197

 

 
Income taxes (2)

4,271

 

2,347

 

5,124

 

1,990

 

 
Non-GAAP net earnings

9,924

 

9,887

 

34,257

 

13,207

 

 
Non-GAAP earnings per share:
Basic

0.15

 

0.15

 

0.50

 

0.20

 

 
Diluted

0.14

 

0.14

 

0.49

 

0.19

 

 
Basic weighted average shares

68,190

 

66,523

 

68,187

 

66,034

 

 
Diluted weighted average shares

69,938

 

69,775

 

69,626

 

68,639

 

(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 Nine Months Ended

 

 

December 31,

 

December 31,

 

 

2021

 

2020

 

2021

 

2020

 
Loss from operations

(13,786

)

(15,781

)

(37,569

)

(68,640

)

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

4,647

 

4,213

 

13,904

 

13,869

 

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

23,758

 

23,894

 

61,475

 

64,583

 

Transformation costs (general and administrative)

-

 

-

 

-

 

3,863

 

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

-

 

(6

)

1,296

 

1,370

 

 
Total excluded items

28,405

 

28,101

 

76,675

 

83,685

 

 
Income from operations before excluded items

14,619

 

12,320

 

39,106

 

15,045

 

(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 Nine Months Ended

December 31,

 

December 31,

2021

 

2020

 

2021

 

2020

 
Net loss

(15,375

)

(11,725

)

(4,441

)

(57,421

)

 
Income tax expense (benefit)

1,348

 

(4,142

)

(2,618

)

(11,067

)

 
Total other income (expense), net

(241

)

(86

)

30,510

 

152

 

 
Loss from operations

(13,786

)

(15,781

)

(37,569

)

(68,640

)

 
Depreciation and amortization

5,827

 

6,509

 

18,231

 

21,464

 

 
EBITDA

(7,959

)

(9,272

)

(19,338

)

(47,176

)

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

23,758

 

23,894

 

61,475

 

64,583

 

Transformation costs (general and administrative)

-

 

-

 

-

 

3,863

 

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

-

 

(6

)

1,296

 

1,370

 

 
Other adjustments

23,758

 

23,888

 

62,771

 

69,816

 

 
Adjusted EBITDA

15,799

 

14,616

 

43,433

 

22,640

 

(1)

This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our 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)

 

 

 

 

 

 

 

 

 

 

 

December 31,

 

March 31,

 

$

 

%

 

 

2021

 

2021

 

Variance

 

Variance

 
Assets
Current assets:
Cash and cash equivalents

552,959

 

572,787

 

(19,828

)

(3.5

%)

Restricted cash

8,731

 

8,900

 

(169

)

(1.9

%)

Trade accounts receivable, net

156,827

 

114,284

 

42,543

 

37.2

%

Refundable income taxes

62,679

 

65,692

 

(3,013

)

(4.6

%)

Other current assets

40,584

 

64,052

 

(23,468

)

(36.6

%)

 
Total current assets

821,780

 

825,715

 

(3,935

)

(0.5

%)

 
Property and equipment

46,666

 

44,284

 

2,382

 

5.4

%

Less - accumulated depreciation and amortization

36,080

 

32,327

 

3,753

 

11.6

%

 
Property and equipment, net

10,586

 

11,957

 

(1,371

)

(11.5

%)

 
Intangible assets, net

31,536

 

39,730

 

(8,194

)

(20.6

%)

Goodwill

363,789

 

357,446

 

6,343

 

1.8

%

Deferred commissions, net

29,483

 

22,619

 

6,864

 

30.3

%

Other assets, net

85,361

 

30,854

 

54,507

 

176.7

%

 

1,342,535

 

1,288,321

 

54,214

 

4.2

%

 
Liabilities and Stockholders' Equity
Current liabilities:
Trade accounts payable

71,655

 

39,955

 

31,700

 

79.3

%

Accrued payroll and related expenses

32,496

 

46,438

 

(13,942

)

(30.0

%)

Other accrued expenses

56,221

 

58,353

 

(2,132

)

(3.7

%)

Acquisition escrow payable

8,731

 

8,900

 

(169.00

)

(1.9

%)

Deferred revenue

14,933

 

11,603

 

3,330

 

28.7

%

 
Total current liabilities

184,036

 

165,249

 

18,787

 

11.4

%

 
Other liabilities

88,085

 

42,389

 

45,696

 

107.8

%

 
Stockholders' equity:
Preferred stock

-

 

-

 

-

 

n/a

 

Common stock

14,925

 

14,781

 

144

 

1.0

%

Additional paid-in capital

1,689,172

 

1,630,072

 

59,100

 

3.6

%

Retained earnings

1,450,385

 

1,454,826

 

(4,441

)

(0.3

%)

Accumulated other comprehensive income

5,890

 

7,522

 

(1,632

)

(21.7

%)

Treasury stock, at cost

(2,089,958

)

(2,026,518

)

(63,440

)

(3.1

%)

Total stockholders' equity

1,070,414

 

1,080,683

 

(10,269

)

(1.0

%)

 

1,342,535

 

1,288,321

 

54,214

 

4.2

%

 

LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(Dollars in thousands)

 

 

 

 

 

 

 

For the Three Months Ended

 

 

December 31,

 

 

2021

 

2020

Cash flows from operating activities:
Net loss

(15,375

)

(11,725

)

Non-cash operating activities:
Depreciation and amortization

5,827

 

6,509

 

Loss on disposal or impairment of assets

-

 

1

 

Gain on distribution from retained profits interest

(183

)

-

 

Provision for doubtful accounts

1,845

 

824

 

Deferred income taxes

315

 

485

 

Non-cash stock compensation expense

23,758

 

23,894

 

Changes in operating assets and liabilities:
Accounts receivable

(27,803

)

(17,062

)

Deferred commissions

(1,495

)

(1,637

)

Other assets

(1,331

)

(192

)

Accounts payable and other liabilities

34,358

 

13,824

 

Income taxes

1,630

 

(5,399

)

Deferred revenue

3,927

 

5,168

 

Net cash provided by operating activities

25,473

 

14,690

 

Cash flows from investing activities:
Capital expenditures

(1,316

)

(678

)

Purchases of investments

-

 

(3,000

)

Purchases of strategic investments

-

 

(327

)

Distribution from retained profits interest

184

 

-

 

Cash paid in acquisition, net of cash received

(2,008

)

(14,815

)

Net cash used in investing activities

(3,140

)

(18,820

)

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

1,905

 

5,115

 

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

(1,674

)

(3,627

)

Acquisition of treasury stock

(5,147

)

-

 

Net cash provided by (used in) financing activities

(4,916

)

1,488

 

Effect of exchange rate changes on cash

(48

)

537

 

 
Net change in cash and cash equivalents

17,369

 

(2,105

)

Cash and cash equivalents at beginning of period

544,321

 

665,506

 

Cash and cash equivalents at end of period

561,690

 

663,401

 

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

(246

)

(771

)

 
Operating lease assets obtained in exchange for operating lease liabilities

17,211

 

-

 

 

LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(Dollars in thousands)

 

 

 

 

 

 

 

For the Nine Months Ended

 

 

December 31,

 

 

2021

 

2020

Cash flows from operating activities:
Net loss

(4,441

)

(57,421

)

Non-cash operating activities:
Depreciation and amortization

18,231

 

21,464

 

Loss on disposal or impairment of assets

142

 

334

 

Gain on distribution from retained profits interest

(30,235

)

-

 

Provision for doubtful accounts

3,127

 

3,346

 

Deferred income taxes

(456

)

-

 

Non-cash stock compensation expense

61,475

 

64,583

 

Changes in operating assets and liabilities:
Accounts receivable

(45,876

)

(26,646

)

Deferred commissions

(6,864

)

(5,082

)

Other assets

22,077

 

7,511

 

Accounts payable and other liabilities

(2,471

)

(6,847

)

Income taxes

998

 

(8,982

)

Deferred revenue

3,426

 

5,067

 

Net cash provided by (used in) operating activities

19,133

 

(2,673

)

Cash flows from investing activities:
Capital expenditures

(2,619

)

(1,806

)

Purchases of investments

-

 

(3,000

)

Purchases of strategic investments

-

 

(2,200

)

Distribution from retained profits interest

31,184

 

-

 

Cash paid in acquisition, net of cash received

(10,376

)

(17,748

)

Net cash provided by (used in) investing activities

18,189

 

(24,754

)

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

6,183

 

8,676

 

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

(14,216

)

(9,382

)

Acquisition of treasury stock

(49,224

)

(42,312

)

Net cash used in financing activities

(57,257

)

(43,018

)

Effect of exchange rate changes on cash

(62

)

1,220

 

 
Net change in cash and cash equivalents

(19,997

)

(69,225

)

Cash and cash equivalents at beginning of period

581,687

 

732,626

 

Cash and cash equivalents at end of period

561,690

 

663,401

 

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

(2,815

)

(2,092

)

 
Operating lease assets obtained in exchange for operating lease liabilities

52,902

 

-

 

 

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

 

09/30/21

 

12/31/21

 

FY2022

 
Net Cash Provided by (Used in) Operating Activities

(23,612

)

6,249

 

14,690

 

(17,887

)

(20,560

)

(17,241

)

10,901

 

25,473

 

19,133

 

 
Less:
Capital expenditures

(832

)

(296

)

(678

)

(376

)

(2,182

)

(427

)

(876

)

(1,316

)

(2,619

)

 
Free Cash Flow to Equity

(24,444

)

5,953

 

14,012

 

(18,263

)

(22,742

)

(17,668

)

10,025

 

24,157

 

16,514

 

(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)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Q3 FY22 to Q3 FY21

 

 

06/30/20

 

09/30/20

 

12/31/20

 

03/31/21

 

FY2021

 

06/30/21

 

09/30/21

 

12/31/21

 

FY2022

 

%

 

$

Revenues

99,437

 

104,661

 

119,753

 

119,175

 

443,026

 

119,038

 

127,290

 

140,604

 

386,932

 

19.9

%

20,851

 

 
Cost of revenue

34,465

 

34,897

 

37,085

 

37,557

 

144,004

 

34,315

 

35,079

 

38,557

 

107,951

 

4.2

%

1,472

 

Gross profit

64,972

 

69,764

 

82,668

 

81,618

 

299,022

 

84,723

 

92,211

 

102,047

 

278,981

 

27.8

%

19,379

 

% Gross margin

65.3

%

66.7

%

69.0

%

68.5

%

67.5

%

71.2

%

72.4

%

72.6

%

72.1

%

 
Operating expenses
Research and development

26,989

 

31,035

 

30,608

 

46,479

 

135,111

 

34,776

 

35,788

 

41,870

 

112,434

 

36.3

%

11,262

 

Sales and marketing

38,627

 

41,705

 

43,904

 

53,307

 

177,543

 

41,979

 

39,509

 

46,324

 

127,812

 

5.8

%

2,420

 

General and administrative

23,368

 

24,495

 

23,943

 

32,395

 

104,201

 

24,291

 

23,078

 

27,639

 

75,008

 

15.1

%

3,696

 

Gains, losses and other items, net

1,995

 

(619

)

(6

)

1,345

 

2,715

 

1,278

 

18

 

-

 

1,296

 

1.0

%

6

 

Total operating expenses

90,979

 

96,616

 

98,449

 

133,526

 

419,570

 

102,324

 

98,393

 

115,833

 

316,550

 

18.0

%

17,384

 

 
Loss from operations

(26,007

)

(26,852

)

(15,781

)

(51,908

)

(120,548

)

(17,601

)

(6,182

)

(13,786

)

(37,569

)

7.4

%

1,995

 

% Margin

-26.2

%

-25.7

%

-13.2

%

-43.6

%

-27.2

%

-14.8

%

-4.9

%

-9.8

%

-9.7

%

 
Total other income (expense), net

463

 

(225

)

(86

)

(404

)

(252

)

30,601

 

150

 

(241

)

30,510

 

(68.9

%)

(155

)

 
Loss before income taxes

(25,544

)

(27,077

)

(15,867

)

(52,312

)

(120,800

)

13,000

 

(6,032

)

(14,027

)

(7,059

)

6.8

%

1,840

 

 
Income taxes expense (benefit)

(3,816

)

(3,109

)

(4,142

)

(19,465

)

(30,532

)

(4,365

)

399

 

1,348

 

(2,618

)

176.6

%

5,490

 

 
Net earnings (loss)

(21,728

)

(23,968

)

(11,725

)

(32,847

)

(90,268

)

17,365

 

(6,431

)

(15,375

)

(4,441

)

(15.2

%)

(3,650

)

 
Diluted earnings (loss) per share

(0.33

)

(0.36

)

(0.18

)

(0.49

)

(1.36

)

0.25

 

(0.09

)

(0.23

)

(0.07

)

(13.6

%)

(0.05

)

 
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

 

68,042

 

68,190

 

68,187

 

Diluted shares

65,570

 

66,010

 

66,523

 

67,111

 

66,304

 

69,605

 

69,333

 

69,938

 

69,626

 

 

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

 

09/30/21

 

12/31/21

 

FY 2022

 
Income (loss) before income taxes

(25,544

)

(27,077

)

(15,867

)

(52,312

)

(120,800

)

13,000

 

(6,032

)

(14,027

)

(7,059

)

Income taxes (benefit)

(3,816

)

(3,109

)

(4,142

)

(19,465

)

(30,532

)

(4,365

)

399

 

1,348

 

(2,618

)

Net earnings (loss)

(21,728

)

(23,968

)

(11,725

)

(32,847

)

(90,268

)

17,365

 

(6,431

)

(15,375

)

(4,441

)

 
Earnings (loss) per share:
Basic

(0.33

)

(0.36

)

(0.18

)

(0.49

)

(1.36

)

0.25

 

(0.09

)

(0.23

)

(0.07

)

Diluted

(0.33

)

(0.36

)

(0.18

)

(0.49

)

(1.36

)

0.25

 

(0.09

)

(0.23

)

(0.07

)

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

5,306

 

4,350

 

4,213

 

4,177

 

18,046

 

4,645

 

4,612

 

4,647

 

13,904

 

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

16,485

 

24,204

 

23,894

 

47,124

 

111,707

 

18,496

 

19,221

 

23,758

 

61,475

 

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

1,995

 

(619

)

(6

)

1,345

 

2,715

 

1,278

 

18

 

-

 

1,296

 

Transformation costs (general and administrative)

3,605

 

258

 

-

 

-

 

3,863

 

-

 

-

 

-

 

-

 

Gain on retained profits interest (other income)

-

 

-

 

-

 

-

 

-

 

(30,052

)

-

 

(183

)

(30,235

)

Total excluded items

27,391

 

28,193

 

28,101

 

52,646

 

136,331

 

(5,633

)

23,851

 

28,222

 

46,440

 

 
Income before income taxes and excluding items

1,847

 

1,116

 

12,234

 

334

 

15,531

 

7,367

 

17,819

 

14,195

 

39,381

 

Income taxes expense (benefit)

934

 

(1,291

)

2,347

 

(2,628

)

(638

)

865

 

(12

)

4,271

 

5,124

 

Non-GAAP net earnings

913

 

2,407

 

9,887

 

2,962

 

16,169

 

6,502

 

17,831

 

9,924

 

34,257

 

 
Non-GAAP earnings per share:
Basic

0.01

 

0.04

 

0.15

 

0.04

 

0.24

 

0.10

 

0.26

 

0.15

 

0.50

 

Diluted

0.01

 

0.03

 

0.14

 

0.04

 

0.23

 

0.09

 

0.26

 

0.14

 

0.49

 

 
Basic weighted average shares

65,570

 

66,010

 

66,523

 

67,111

 

66,304

 

68,328

 

68,042

 

68,190

 

68,187

 

Diluted weighted average shares

67,337

 

68,804

 

69,775

 

69,935

 

68,963

 

69,605

 

69,333

 

69,938

 

69,626

 

 
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

 

09/30/21

 

12/31/21

 

FY2022

 
Expenses:
Cost of revenue

34,465

 

34,897

 

37,085

 

37,557

 

144,004

 

34,315

 

35,079

 

38,557

 

107,951

 

Research and development

26,989

 

31,035

 

30,608

 

46,479

 

135,111

 

34,776

 

35,788

 

41,870

 

112,434

 

Sales and marketing

38,627

 

41,705

 

43,904

 

53,307

 

177,543

 

41,979

 

39,509

 

46,324

 

127,812

 

General and administrative

23,368

 

24,495

 

23,943

 

32,395

 

104,201

 

24,291

 

23,078

 

27,639

 

75,008

 

Gains, losses and other items, net

1,995

 

(619

)

(6

)

1,345

 

2,715

 

1,278

 

18

 

-

 

1,296

 

 
Gross profit:

64,972

 

69,764

 

82,668

 

81,618

 

299,022

 

84,723

 

92,211

 

102,047

 

278,981

 

% Gross margin

65.3

%

66.7

%

69.0

%

68.5

%

67.5

%

71.2

%

72.4

%

72.6

%

72.1

%

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

5,306

 

4,350

 

4,213

 

4,177

 

18,046

 

4,645

 

4,612

 

4,647

 

13,904

 

Non-cash stock compensation (cost of revenue)

775

 

913

 

988

 

2,624

 

5,300

 

790

 

948

 

1,168

 

2,906

 

Non-cash stock compensation (research and development)

5,886

 

7,713

 

7,376

 

17,985

 

38,960

 

5,348

 

7,184

 

9,264

 

21,796

 

Non-cash stock compensation (sales and marketing)

7,123

 

9,233

 

9,212

 

14,833

 

40,401

 

6,793

 

6,749

 

7,329

 

20,871

 

Non-cash stock compensation (general and administrative)

2,701

 

6,345

 

6,318

 

11,682

 

27,046

 

5,565

 

4,340

 

5,997

 

15,902

 

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

1,995

 

(619

)

(6

)

1,345

 

2,715

 

1,278

 

18

 

-

 

1,296

 

Transformation costs (general and administrative)

3,605

 

258

 

-

 

-

 

3,863

 

-

 

-

 

-

 

-

 

Gain on retained profits interest (other income)

-

 

-

 

-

 

-

 

-

 

(30,052

)

-

 

(183

)

(30,235

)

Total excluded items

27,391

 

28,193

 

28,101

 

52,646

 

136,331

 

(5,633

)

23,851

 

28,222

 

46,440

 

 
Expenses, excluding items:
Cost of revenue

28,384

 

29,634

 

31,884

 

30,756

 

120,658

 

28,880

 

29,519

 

32,742

 

91,141

 

Research and development

21,103

 

23,322

 

23,232

 

28,494

 

96,151

 

29,428

 

28,604

 

32,606

 

90,638

 

Sales and marketing

31,504

 

32,472

 

34,692

 

38,474

 

137,142

 

35,186

 

32,760

 

38,995

 

106,941

 

General and administrative

17,062

 

17,892

 

17,625

 

20,713

 

73,292

 

18,726

 

18,738

 

21,642

 

59,106

 

Gains, losses and other items, net

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

 
Gross profit, excluding items:

71,053

 

75,027

 

87,869

 

88,419

 

322,368

 

90,158

 

97,771

 

107,862

 

295,791

 

% Gross margin

71.5

%

71.7

%

73.4

%

74.2

%

72.8

%

75.7

%

76.8

%

76.7

%

76.4

%

(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

 

 

March 31, 2022

 

March 31, 2022

 
GAAP loss from operations

 

(31,000

)

 

(69,000

)

 
Excluded items:
Purchased intangible asset amortization

 

5,000

 

 

19,000

 

Non-cash stock compensation

 

28,000

 

 

90,000

 

Restructuring and transformation costs

 

-

 

 

1,000

 

Total excluded items

 

33,000

 

 

110,000

 

 
Non-GAAP income from operations

$

2,000

 

$

41,000

 

 

(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

Q3 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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