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LiveRamp Announces First Quarter Results

Revenue up 8% year over year

GAAP Operating Margin of 1% and Non-GAAP Operating Margin of 14%

Operating Cash Flow of $26 million

$20 million in Share Repurchases

LiveRamp® (NYSE: RAMP), the leading data collaboration platform, today announced its financial results for the fiscal 2024 first quarter ended June 30, 2023.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20230809407441/en/

Q1 Financial Highlights1

  • Total revenue was $154 million, up 8%
  • Subscription revenue was $122 million, up 5%, and accounted for 79% of total revenue.
  • Marketplace & Other revenue was $32 million, up 21%.
  • GAAP gross profit was $108 million, up 7%. GAAP gross margin of 70% contracted by 1 percentage point. Non-GAAP gross profit was $112 million, up 5%. Non-GAAP gross margin of 73% contracted by 2 percentage points.
  • GAAP operating income was $2 million compared to a loss of $26 million. GAAP operating margin was 1% compared to negative 18%. Non-GAAP operating income was $21 million compared to $4 million. Non-GAAP operating margin of 14% expanded by 11 percentage points.
  • GAAP diluted loss per share was $0.02 and non-GAAP diluted earnings per share was $0.29.
  • Net cash provided by operating activities was $26 million compared to a use of $33 million. Operating cash flow benefited from a $29 million tax refund for fiscal 2021.
  • Repurchased approximately 835,000 shares for $20 million in the first quarter.

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

"We’re off to a strong start to the fiscal year, with first quarter revenue and operating income exceeding our expectations, operating margin expanding by double-digits and our first quarter ever with positive GAAP operating income,” said LiveRamp CEO Scott Howe. “Our data collaboration platform remains in high demand with the world’s most sophisticated marketers, helping them deliver relevant messages and measure results across all addressable channels, including social networks, the open web, programmatic, retail media networks and connected TV.”

______________

1Unless otherwise indicated, all comparisons are to the prior year period.

GAAP and Non-GAAP Results

The following table summarizes the Company’s financial results for the fiscal first quarter ended June 30, 2023 ($ in millions):

 

Q1 Fiscal 2024

 

Q1 Fiscal 2023

 

Results

 

Results

 

GAAP

Non-GAAP

 

GAAP

Non-GAAP

Subscription revenue

$122

 

$116

YoY change %

5%

 

 

20%

 

Marketplace & Other revenue

$32

 

$27

YoY change %

21%

 

 

18%

 

Total revenue

$154

 

$142

YoY change %

8%

 

 

19%

 

 

 

 

 

 

 

Gross profit

$108

$112

 

$101

$107

% Gross margin

70%

73%

 

71%

75%

YoY change, pts

(1) pt

(2) pts

 

 

 

 

 

 

 

Operating income (loss)

$2

$21

 

($26)

$4

% Operating margin

1%

14%

 

(18%)

3%

YoY change, pts

19 pts

11 pts

 

(3) pts

(3) pts

 

 

 

 

 

 

Net earnings (loss)

($2)

$20

 

($27)

$3

Diluted earnings (loss) per share

($0.02)

$0.29

 

($0.40)

$0.05

 

 

 

 

 

 

Shares to calculate diluted EPS

66.5

67.4

 

68.4

69.2

YoY change %

(3%)

(3%)

 

0%

(1%)

 

 

 

 

 

 

Net operating cash flow

$26

 

($33)

Free cash flow to equity

$26

 

($35)

 

 

 

 

 

 

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 attached to this press release.

Additional Business Highlights & Metrics

  • The Company’s globally scaled Authenticated Traffic Solution (ATS) has more than 165 supply-side platforms (SSPs) and demand-side platforms (DSPs) live or committed to bid on RampID™ and ATS, including The Trade Desk, Xander, Amobee, Criteo, Adobe Ad Cloud, and Roku Oneview.
  • To date, over 14,000 publisher domains and over 70% of the comScore 100 publishers, have adopted ATS, including Amazon Publisher Services, Microsoft, Hearst, CafeMedia, Leaf Group, Prisma Media and Burda. Through these integrations, LiveRamp is now connected to over 90% of consumer time spent online in the US.
  • In May 2023 we integrated Google Display & Video 360's PAIR (Publisher Advertiser Identity Reconciliation) into the LiveRamp platform and started running brand campaigns. With PAIR, publishers and marketers can securely and privately reconcile their first-party data for marketing use cases on Display & Video 360, Google's DSP. This step forward unlocks additional scale across inventory already impacted by third-party cookie changes, while also providing a sustainable solution for the future across all channels, including Connected TV.
  • In June 2023 our native applications for identity resolution debuted in the Snowflake Native App Framework. This means LiveRamp customers can seamlessly access our identity resolution and activation capabilities directly in their Snowflake data environment, eliminating the need to move or copy data and, thereby, reducing security and privacy risks.
  • LiveRamp has 915 direct subscription customers, up from 910 in the prior year period.
  • LiveRamp has 96 customers whose subscription contracts exceed $1 million in annual revenue, up from 90 in the prior year period.
  • During the first quarter, subscription net retention was 98% and platform net retention was 102%.
  • Current remaining performance obligations (CRPO), which is contracted and committed revenue expected to be recognized over the next 12 months, was $351 million, up 19% compared to the prior year period.

Financial Outlook

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

For the second quarter of fiscal 2024, LiveRamp expects to report:

  • Revenue of $152 million, an increase of 3%
  • GAAP operating income of $1 million
  • Non-GAAP operating income of $19 million

For fiscal 2024, LiveRamp updates its guidance and expects to report:

  • Revenue of between $620 million and $630 million, an increase of between 4% and 6%
  • GAAP operating income of between $2 million and $5 million
  • Non-GAAP operating income of between $90 million and $93 million

Conference Call

LiveRamp will hold a conference call today at 1:30 p.m. PT 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 data collaboration platform of choice for the world’s most innovative companies. A groundbreaking leader in consumer privacy, data ethics, and foundational identity, LiveRamp is setting the new standard for building a connected customer view with unmatched clarity and context while protecting precious brand and consumer trust. LiveRamp offers complete flexibility to collaborate wherever data lives to support the widest range of data collaboration use cases—within organizations, between brands, and across its premier global network of top-quality partners. Hundreds of global innovators, from iconic consumer brands and tech giants to banks, retailers, and healthcare leaders, turn to LiveRamp to build enduring brand and business value by deepening customer engagement and loyalty, activating new partnerships, and maximizing the value of their first-party data while staying on the forefront of rapidly evolving compliance and privacy requirements. LiveRamp is based in San Francisco, California with offices worldwide. Learn more at 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 for fiscal 2024 and beyond, 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 rising interest rates, cost increases, the possibility of a recession, general inflationary pressure, and the associated impacts of these potential events 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 operating in a hybrid work environment, with some employees working remotely at least some of the time within a rapidly changing industry, while also avoiding disruption from reductions in our current workforce as well as disruptions resulting from acquisition, divestiture and other activities affecting our workforce. Our global workforce strategy could possibly encounter difficulty and not be as beneficial as planned. Our international operations are also subject to risks, including the performance of third parties as well as impacts from war and civil unrest, 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’ data and/or computer systems, or the risk that our current insurance coverage may not be adequate for such a breach, that an insurer might deny coverage for a claim or that such insurance will continue to be available to us on commercially reasonable terms, or at all, 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 or cloud 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 2023 ended March 31, 2023, and LiveRamp's Quarterly Reports on Form 10-Q issued in fiscal year 2024.

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.

LiveRampand RampIDTM 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,
$ %

2023

 

2022

 

Variance

Variance

 
Revenues

154,069

 

142,243

 

11,826

 

8.3

%

 
Cost of revenue

45,621

 

41,021

 

4,600

 

11.2

%

Gross profit

108,448

 

101,222

 

7,226

 

7.1

%

% Gross margin

70.4

%

71.2

%

 
Operating expenses:
Research and development

34,519

 

47,661

 

(13,142

)

(27.6

%)

Sales and marketing

44,879

 

51,280

 

(6,401

)

(12.5

%)

General and administrative

26,664

 

27,144

 

(480

)

(1.8

%)

Gains, losses and other items, net

116

 

739

 

(623

)

(84.3

%)

Total operating expenses

106,178

 

126,824

 

(20,646

)

(16.3

%)

 
Income (loss) from operations

2,270

 

(25,602

)

27,872

 

108.9

%

% Margin

1.5

%

-18.0

%

 
Total other income, net

4,849

 

699

 

4,150

 

593.7

%

 
Income (loss) from operations before income taxes

7,119

 

(24,903

)

32,022

 

128.6

%

 
Income tax expense

8,705

 

2,315

 

6,390

 

276.0

%

 
Net loss

(1,586

)

(27,218

)

25,632

 

94.2

%

 
Basic loss per share

(0.02

)

(0.40

)

0.37

 

94.0

%

 
Diluted loss per share:

(0.02

)

(0.40

)

0.37

 

94.0

%

 
Basic weighted average shares

66,497

 

68,403

 

Diluted weighted average shares

66,497

 

68,403

 

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,

2023

2022

 
Income (loss) from operations before income taxes

7,119

 

(24,903

)

 
Income tax expense

8,705

 

2,315

 

 
Net loss

(1,586

)

(27,218

)

 
Loss per share:
Basic

(0.02

)

(0.40

)

Diluted

(0.02

)

(0.40

)

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

3,290

 

4,643

 

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

13,292

 

24,225

 

Transformation costs (general and administrative)

1,875

 

-

 

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

116

 

739

 

 
Total excluded items

18,573

 

29,607

 

 
Income from operations before income taxes and excluding items

25,692

 

4,704

 

 
Income tax expense (2)

6,167

 

1,237

 

 
Non-GAAP net earnings

19,525

 

3,467

 

 
Non-GAAP earnings per share:
Basic

0.29

 

0.05

 

Diluted

0.29

 

0.05

 

 
Basic weighted average shares

66,497

 

68,403

 

Diluted weighted average shares

67,388

 

69,195

 

(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
June 30,

2023

2022

 
Income (loss) from operations

2,270

(25,602

)

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

3,290

4,643

 

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

13,292

24,225

 

Transformation costs (general and administrative)

1,875

-

 

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

116

739

 

 
Total excluded items

18,573

29,607

 

 
Income from operations before excluded items

20,843

4,005

(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,

2023

2022

 
Net loss

(1,586

)

(27,218

)

 
Income tax expense

8,705

 

2,315

 

 
Other income

(4,849

)

(699

)

 
Income (loss) from operations

2,270

 

(25,602

)

 
Depreciation and amortization

4,039

 

5,741

 

 
EBITDA

6,309

 

(19,861

)

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

13,292

 

24,225

 

Transformation costs (general and administrative)

1,875

 

-

 

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

116

 

739

 

 
Other adjustments

15,283

 

24,964

 

 
Adjusted EBITDA

21,592

 

5,103

 

(1)

 

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

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

2023

2023

Variance Variance
 
Assets
Current assets:
Cash and cash equivalents

470,773

 

464,448

 

6,325

 

1.4

%

Short-term investments

33,099

 

32,807

 

292

 

0.9

%

Trade accounts receivable, net

173,083

 

157,379

 

15,704

 

10.0

%

Refundable income taxes, net

-

 

28,897

 

(28,897

)

(100.0

%)

Other current assets

29,091

 

31,028

 

(1,937

)

(6.2

%)

 
Total current assets

706,046

 

714,559

 

(8,513

)

(1.2

%)

 
Property and equipment

37,927

 

39,393

 

(1,466

)

(3.7

%)

Less - accumulated depreciation and amortization

31,872

 

32,308

 

(436

)

(1.3

%)

 
Property and equipment, net

6,055

 

7,085

 

(1,030

)

(14.5

%)

 
Intangible assets, net

6,578

 

9,868

 

(3,290

)

(33.3

%)

Goodwill

363,178

 

363,116

 

62

 

0.0

%

Deferred commissions, net

36,944

 

37,030

 

(86

)

(0.2

%)

Other assets, net

45,130

 

41,045

 

4,085

 

10.0

%

 

1,163,931

 

1,172,703

 

(8,772

)

(0.7

%)

 
Liabilities and Stockholders' Equity
Current liabilities:
Trade accounts payable

74,077

 

86,568

 

(12,491

)

(14.4

%)

Accrued payroll and related expenses

23,929

 

33,434

 

(9,505

)

(28.4

%)

Other accrued expenses

39,322

 

35,736

 

3,586

 

10.0

%

Deferred revenue

27,267

 

19,091

 

8,176

 

42.8

%

Income taxes payable

7,782

 

-

 

7,782

 

n/a

 

 
Total current liabilities

172,377

 

174,829

 

(2,452

)

(1.4

%)

 
Other liabilities

73,023

 

71,798

 

1,225

 

1.7

%

 
Stockholders' equity:
Preferred stock

-

 

-

 

-

 

n/a

 

Common stock

15,455

 

15,399

 

56

 

0.4

%

Additional paid-in capital

1,873,935

 

1,855,916

 

18,019

 

1.0

%

Retained earnings

1,300,705

 

1,302,291

 

(1,586

)

(0.1

%)

Accumulated other comprehensive income

4,565

 

4,504

 

61

 

1.4

%

Treasury stock, at cost

(2,276,129

)

(2,252,034

)

(24,095

)

1.1

%

Total stockholders' equity

918,531

 

926,076

 

(7,545

)

(0.8

%)

 

1,163,931

 

1,172,703

 

(8,772

)

(0.7

%)

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

2023

2022

 
Cash flows from operating activities:
Net loss

(1,586

)

(27,218

)

Non-cash operating activities:
Depreciation and amortization

4,039

 

5,741

 

Loss (gain) on disposal or impairment of assets

308

 

(5

)

Provision for doubtful accounts

(219

)

997

 

Deferred income taxes

47

 

187

 

Non-cash stock compensation expense

13,292

 

24,225

 

Changes in operating assets and liabilities:
Accounts receivable

(14,391

)

(7,733

)

Deferred commissions

86

 

(369

)

Other assets

5,008

 

4,352

 

Accounts payable and other liabilities

(25,225

)

(34,557

)

Income taxes

37,236

 

2,131

 

Deferred revenue

7,098

 

(1,120

)

Net cash provided by (used in) operating activities

25,693

 

(33,369

)

Cash flows from investing activities:
Capital expenditures

(53

)

(1,741

)

Purchases of strategic investments

(500

)

-

 

Net cash used in investing activities

(553

)

(1,741

)

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

5,573

 

4,589

 

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

(3,892

)

(582

)

Acquisition of treasury stock

(20,203

)

(60,053

)

Net cash used in financing activities

(18,522

)

(56,046

)

Effect of exchange rate changes on cash

(293

)

(752

)

 
Net change in cash and cash equivalents

6,325

 

(91,908

)

Cash and cash equivalents at beginning of period

464,448

 

600,162

 

Cash and cash equivalents at end of period

470,773

 

508,254

 

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

(28,653

)

4

 

Operating lease liabilities

2,459

 

2,156

 

Operating lease assets obtained in exchange for operating lease liabilities

10,565

 

-

 

Operating lease assets relinquished in exchange for operating lease liabilities

(4,486

)

-

 

Purchases of property, plant, & equipment, net remaining unpaid at end of period

-

 

1,666

 

LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES 
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS 
(Unaudited) 
(Dollars in thousands, except per share amounts) 
 
FY24 to FY23
06/30/22 09/30/22 12/31/22 03/31/23 FY2023 06/30/23 % $
Revenues

142,243

 

147,099

 

158,615

 

148,626

 

596,583

 

154,069

 

8.3

%

11,826

 

 
Cost of revenue

41,021

 

42,304

 

43,287

 

43,472

 

170,084

 

45,621

 

11.2

%

4,600

 

Gross profit

101,222

 

104,795

 

115,328

 

105,154

 

426,499

 

108,448

 

7.1

%

7,226

 

% Gross margin

71.2

%

71.2

%

72.7

%

70.8

%

71.5

%

70.4

%

 
Operating expenses
Research and development

47,661

 

46,139

 

43,175

 

52,220

 

189,195

 

34,519

 

(27.6

%)

(13,142

)

Sales and marketing

51,280

 

45,949

 

47,702

 

57,506

 

202,437

 

44,879

 

(12.5

%)

(6,401

)

General and administrative

27,144

 

28,718

 

36,657

 

32,832

 

125,351

 

26,664

 

(1.8

%)

(480

)

Gains, losses and other items, net

739

 

13,111

 

11,743

 

9,723

 

35,316

 

116

 

(84.3

%)

(623

)

Total operating expenses

126,824

 

133,917

 

139,277

 

152,281

 

552,299

 

106,178

 

(16.3

%)

(20,646

)

 
Income (loss) from operations

(25,602

)

(29,122

)

(23,949

)

(47,127

)

(125,800

)

2,270

 

108.9

%

27,872

 

% Margin

-18.0

%

-19.8

%

-15.1

%

-31.7

%

-21.1

%

1.5

%

 
Total other income (expense), net

699

 

2,248

 

(736

)

4,735

 

6,946

 

4,849

 

593.7

%

4,150

 

 
Income (loss) from continuing operations before income taxes

(24,903

)

(26,874

)

(24,685

)

(42,392

)

(118,854

)

7,119

 

128.6

%

32,022

 

 
Income taxes expense (benefit)

2,315

 

3,562

 

5,835

 

(6,460

)

5,252

 

8,705

 

276.0

%

6,390

 

 
Net loss from continuing operations

(27,218

)

(30,436

)

(30,520

)

(35,932

)

(124,106

)

(1,586

)

94.2

%

25,632

 

 
Earnings from discontinued operations, net of tax

-

 

-

 

836

 

4,568

 

5,404

 

-

 

n/a

 

-

 

 
Net loss

(27,218

)

(30,436

)

(29,684

)

(31,364

)

(118,702

)

(1,586

)

94.2

%

25,632

 

 
Diluted loss per share

(0.40

)

(0.45

)

(0.46

)

(0.48

)

(1.79

)

(0.02

)

94.0

%

0.37

 

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

68,403

 

67,096

 

64,784

 

65,126

 

66,352

 

66,497

 

Diluted shares

69,195

 

67,568

 

65,356

 

66,268

 

67,097

 

67,388

 

LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
CALCULATION OF FREE CASH FLOW TO EQUITY (1)
(Unaudited)
(Dollars in thousands)
 
06/30/22 09/30/22 12/31/22 03/31/23 FY2023 06/30/23
 
Net Cash Provided by (Used in) Operating Activities-Continuing Operations

(33,369

)

21,375

 

15,770

 

30,665

 

34,441

 

25,693

 

 
Less:
Capital expenditures

(1,741

)

(2,673

)

(179

)

(103

)

(4,696

)

(53

)

 
Free Cash Flow to Equity

(35,110

)

18,702

 

15,591

 

30,562

 

29,745

 

25,640

 

(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 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)
 
06/30/22 09/30/22 12/31/22 03/31/23 FY2023 06/30/23
 
Expenses, continuing operations:
Cost of revenue

41,021

 

42,304

 

43,287

 

43,472

 

170,084

 

45,621

 

Research and development

47,661

 

46,139

 

43,175

 

52,220

 

189,195

 

34,519

 

Sales and marketing

51,280

 

45,949

 

47,702

 

57,506

 

202,437

 

44,879

 

General and administrative

27,144

 

28,718

 

36,657

 

32,832

 

125,351

 

26,664

 

Gains, losses and other items, net

739

 

13,111

 

11,743.00

 

9,723

 

35,316

 

116

 

 
Gross profit, continuing operations:

101,222

 

104,795

 

115,328

 

105,154

 

426,499

 

108,448

 

% Gross margin

71.2

%

71.2

%

72.7

%

70.8

%

71.5

%

70.4

%

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

4,643

 

4,637

 

4,209

 

3,336

 

16,825

 

3,290

 

Non-cash stock compensation (cost of revenue)

1,163

 

1,293

 

1,208

 

2,653

 

6,317

 

629

 

Non-cash stock compensation (research and development)

11,656

 

12,360

 

10,654

 

20,737

 

55,407

 

5,077

 

Non-cash stock compensation (sales and marketing)

5,884

 

6,116

 

5,871

 

11,558

 

29,429

 

3,736

 

Non-cash stock compensation (general and administrative)

5,522

 

7,524

 

11,891

 

9,710

 

34,647

 

3,850

 

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

739

 

13,111

 

11,743

 

9,723

 

35,316

 

116

 

Transformation costs (general and administrative)

-

 

1,250

 

4,112

 

3,663

 

9,025

 

1,875

 

Total excluded items

29,607

 

46,291

 

49,688

 

61,380

 

186,966

 

18,573

 

 
Expenses, continued operations excluding items:
Cost of revenue

35,215

 

36,374

 

37,870

 

37,483

 

146,942

 

41,702

 

Research and development

36,005

 

33,779

 

32,521

 

31,483

 

133,788

 

29,442

 

Sales and marketing

45,396

 

39,833

 

41,831

 

45,948

 

173,008

 

41,143

 

General and administrative

21,622

 

19,944

 

20,654

 

19,459

 

81,679

 

20,939

 

Gains, losses and other items, net

-

 

-

 

-

 

-

 

-

 

-

 

 
Gross profit, continued operations excluding items:

107,028

 

110,725

 

120,745

 

111,143

 

449,641

 

112,367

 

% Gross margin

75.2

%

75.3

%

76.1

%

74.8

%

75.4

%

72.9

%

(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
RECONCILIATION OF GAAP TO NON-GAAP EPS (1)
(Unaudited)
(Dollars in thousands, except per share amounts)
 
 
 
06/30/22 09/30/22 12/31/22 03/31/23 FY 2023 06/30/23
 
Income (loss) from continuing operations before income taxes

(24,903

)

(26,874

)

(24,685

)

(42,392

)

(118,854

)

7,119

 

Income taxes (benefit)

2,315

 

3,562

 

5,835

 

(6,460

)

5,252

 

8,705

 

Net earnings (loss) from continuing operations

(27,218

)

(30,436

)

(30,520

)

(35,932

)

(124,106

)

(1,586

)

 
Earnings from discontinued operations, net of tax

-

 

-

 

836

 

4,568

 

5,404

 

-

 

 
Net earnings (loss)

(27,218

)

(30,436

)

(29,684

)

(31,364

)

(118,702

)

(1,586

)

 
Earnings (loss) per share:
Basic

(0.40

)

(0.45

)

(0.46

)

(0.48

)

(1.79

)

(0.02

)

Diluted

(0.40

)

(0.45

)

(0.46

)

(0.48

)

(1.79

)

(0.02

)

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

4,643

 

4,637

 

4,209

 

3,336

 

16,825

 

3,290

 

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

24,225

 

27,293

 

29,624

 

44,658

 

125,800

 

13,292

 

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

739

 

13,111

 

11,743

 

9,723

 

35,316

 

116

 

Transformation costs (general and administrative)

-

 

1,250

 

4,112

 

3,663

 

9,025

 

1,875

 

Total excluded items from continuing operations

29,607

 

46,291

 

49,688

 

61,380

 

186,966

 

18,573

 

 
Income from continuing operations before income taxes and excluding items

4,704

 

19,417

 

25,003

 

18,988

 

68,112

 

25,692

 

Income taxes expense (benefit)

1,237

 

4,557

 

6,468

 

(2,141

)

10,121

 

6,167

 

Non-GAAP net earnings from continuing operations

3,467

 

14,860

 

18,535

 

21,129

 

57,991

 

19,525

 

 
Non-GAAP earnings per share from continuing operations:
Basic

0.05

 

0.22

 

0.29

 

0.32

 

0.87

 

0.29

 

Diluted

0.05

 

0.22

 

0.28

 

0.32

 

0.86

 

0.29

 

 
Basic weighted average shares

68,403

 

67,096

 

64,784

 

65,126

 

66,352

 

66,497

 

Diluted weighted average shares

69,195

 

67,568

 

65,356

 

66,268

 

67,097

 

67,388

 

 
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 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 OPERATING INCOME GUIDANCE (1)
(Unaudited)
(Dollars in thousands)
For the quarter ending For the year ending
September 30, 2023 March 31, 2024
 
Low High
GAAP income from operations

 

1,000

 

2,000

 

5,000

 
Excluded items:
Purchased intangible asset amortization

 

1,000

 

7,000

 

7,000

Non-cash stock compensation

 

16,000

 

72,000

 

72,000

Restructuring charges

 

1,000

 

7,000

 

7,000

Transformation costs

 

-

 

2,000

 

2,000

Total excluded items

 

18,000

 

88,000

 

88,000

 
Non-GAAP income from operations

$

19,000

$

90,000

$

93,000

(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 2024 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 employees 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 and again during fiscal 2023 in response to macroeconomic conditions, 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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