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LiveRamp Announces Second Quarter Results

Revenue up 9% year over year

GAAP Operating Margin of 5% and Non-GAAP Operating Margin of 20%

Operating Cash Flow of $36 million

Raises Fiscal 2024 Guidance

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

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20231108738860/en/

Q2 Financial Highlights1

  • Total revenue was $160 million, up 9%.
  • Subscription revenue was $126 million, up 5%, and accounted for 79% of total revenue.
  • Marketplace & Other revenue was $34 million, up 25%.
  • GAAP gross profit was $119 million, up 13%. GAAP gross margin of 74% expanded by 3 percentage points. Non-GAAP gross profit was $121 million, up 9%. Non-GAAP gross margin of 75% was flat year-on-year.
  • GAAP operating income was $8 million compared to a loss of $29 million. GAAP operating margin was 5% compared to negative 20%. Non-GAAP operating income was $32 million compared to $17 million. Non-GAAP operating margin of 20% expanded by 8 percentage points.
  • GAAP diluted earnings per share was $0.07 and non-GAAP diluted earnings per share was $0.43.
  • Net cash provided by operating activities was $36 million compared to $21 million.
  • Share repurchases in the second quarter totaled approximately 490,000 shares for $15 million, bringing the fiscal first half total to 1.3 million shares for $35 million.

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

“We posted strong second quarter results, with both revenue and operating income exceeding our expectations; operating margin was a record high and operating cash flow was positive for a fifth consecutive quarter,” said LiveRamp CEO Scott Howe. “We had our best new logo quarter in two years, including the addition of multiple Fortune 500 customers, demonstrating the traction our Data Collaboration Platform has with marketers looking to more fully leverage their first-party customer data across the digital advertising ecosystem.”

______________

1 Unless 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 2024 second quarter ended September 30, 2023 ($ in millions, except per share amounts):

 

 

 

 

 

GAAP

 

Non-GAAP

 

Q2 FY24

Q2 FY23

 

Q2 FY24

Q2 FY23

Subscription revenue

$126

$120

 

YoY change %

5%

14%

 

Marketplace & Other revenue

$34

$27

 

YoY change %

25%

25%

 

Total revenue

$160

$147

 

YoY change %

9%

16%

 

 

 

 

 

 

 

Gross profit

$119

$105

 

$121

$111

% Gross margin

74%

71%

 

75%

75%

YoY change, pts

3 pts

(1 pt)

 

0 pts

(2 pts)

 

 

 

 

 

 

Operating income (loss)

$8

($29)

 

$32

$17

% Operating margin

5%

(20%)

 

20%

12%

YoY change, pts

25 pts

(15 pts)

 

8 pts

(2 pts)

 

 

 

 

 

 

Net earnings (loss)

$5

($30)

 

$29

$15

Diluted earnings (loss) per share

$0.07

($0.45)

 

$0.43

$0.22

 

 

 

 

 

 

Shares to calculate diluted EPS

67.9

67.1

 

67.9

67.6

YoY change %

1%

(1%)

 

0%

(3%)

 

 

 

 

 

 

Net operating cash flow

$36

$21

 

Free cash flow to equity

 

$36

$19

 

 

 

 

 

 

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

  • In August 2023 we were selected as a 2023 Google Cloud Partner of the Year. LiveRamp was recognized as a “Global Industry Technology Partner of the Year” for delivering embedded solutions that help customers enrich their Google Cloud environment and extend value to wherever their data lives.
  • In October 2023 we announced that our identity capabilities are now natively available within AWS Entity Resolution and support additional identifier types. With this integration, marketers, publishers, tech platforms, and agencies can extend the interoperability of data in the cloud to marketing and advertising destinations using RampID.
  • In August 2023 we expanded our reach in the MarTech space by announcing a new partnership with Sendbird, a global in-app conversations platform with over 300 million monthly active users. Joint customers of Sendbird and LiveRamp can now power personalized marketing and consumer experiences using LiveRamp's identity solutions. For the first time marketers can bring together media exposure logs and marketing technology exposure logs to build a more robust view of the customer journey.
  • 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, Xandr, Yahoo, Amobee, Criteo, Adobe Ad Cloud, and Roku Oneview.
  • To date, over 16,000 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 92% of consumer time spent online in the US.
  • We recently announced new partnerships with Epsilon, FreeWheel, and Yahoo that extend the RampID footprint and give brands greater reach to data-driven premium advertising inventory:
    • In September 2023 we announced that our connectivity solution, ATS, is now interoperable with Epsilon’s identity framework.
    • In September 2023 we announced that we are integrating RampID with FreeWheel, a leading supply-side platform for CTV publishers.
    • In October 2023 we announced an expanded partnership with Yahoo to scale advertising addressability and reach by making Yahoo’s ConnectID interoperable with RampID.
  • LiveRamp ended the quarter with 99 customers whose subscription contracts exceed $1 million in annual revenue, compared to 92 in the prior year period.
  • LiveRamp ended the quarter with 895 direct subscription customers, compared to 920 in the prior year period.
  • Second 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 $339 million, up 16% 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 third quarter of fiscal 2024, LiveRamp expects to report:

  • Revenue of $165 million, an increase of 4%
  • GAAP operating income of $8 million
  • Non-GAAP operating income of $29 million

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

  • Revenue of between $632 million and $637 million, an increase of between 6% and 7%
  • GAAP operating income of between $8 million and $11 million
  • Non-GAAP operating income of between $97 million and $100 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, geo-political circumstances that could result in increased economic uncertainties 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; rapidly changing technology’s impact on our products and services; and attracting, motivating 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
September 30,

 

 

 

 

$

%

2023

 

2022

 

Variance

Variance

 
Revenues

159,871

 

147,099

 

12,772

 

8.7

%

 
Cost of revenue

41,212

 

42,304

 

(1,092

)

(2.6

%)

Gross profit

118,659

 

104,795

 

13,864

 

13.2

%

% Gross margin

74.2

%

71.2

%

 
Operating expenses:
Research and development

33,733

 

46,139

 

(12,406

)

(26.9

%)

Sales and marketing

44,135

 

45,949

 

(1,814

)

(3.9

%)

General and administrative

26,009

 

28,718

 

(2,709

)

(9.4

%)

Gains, losses and other items, net

6,574

 

13,111

 

(6,537

)

(49.9

%)

Total operating expenses

110,451

 

133,917

 

(23,466

)

(17.5

%)

 
Income (loss) from operations

8,208

 

(29,122

)

37,330

 

128.2

%

% Margin

5.1

%

-19.8

%

 
Total other income, net

6,431

 

2,248

 

4,183

 

186.1

%

 
Income (loss) from continuing operations before income taxes

14,639

 

(26,874

)

41,513

 

154.5

%

 
Income tax expense

10,163

 

3,562

 

6,601

 

185.3

%

 
Net earnings (loss) from continuing operations

4,476

 

(30,436

)

34,912

 

114.7

%

 
Earnings from discontinued operations, net of tax

387

 

-

 

387

 

n/a

 

 
Net earnings (loss)

4,863

 

(30,436

)

35,299

 

116.0

%

 
Basic earnings (loss) per share:
Continuing operations

0.07

 

(0.45

)

0.52

 

114.9

%

Discontinued operations

0.01

 

-

 

0.01

 

n/a

 

Basic earnings (loss) per share

0.07

 

(0.45

)

0.53

 

115.8

%

 
Diluted earnings (loss) per share:
Continuing operations

0.07

 

(0.45

)

0.52

 

114.5

%

Discontinued operations

0.01

 

-

 

0.01

 

n/a

 

Diluted earnings (loss) per share:

0.07

 

(0.45

)

0.53

 

115.8

%

 
Basic weighted average shares

66,284

 

67,096

 

Diluted weighted average shares

67,868

 

67,096

 

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

 

 

 

 

$

 

%

2023

 

2022

 

Variance

 

Variance

 
Revenues

313,940

 

289,342

 

24,598

 

8.5

%

 
Cost of revenue

86,833

 

83,325

 

3,508

 

4.2

%

Gross profit

227,107

 

206,017

 

21,090

 

10.2

%

% Gross margin

72.3

%

71.2

%

 
Operating expenses:
Research and development

68,252

 

93,800

 

(25,548

)

(27.2

%)

Sales and marketing

89,014

 

97,229

 

(8,215

)

(8.4

%)

General and administrative

52,673

 

55,862

 

(3,189

)

(5.7

%)

Gains, losses and other items, net

6,690

 

13,850

 

(7,160

)

(51.7

%)

Total operating expenses

216,629

 

260,741

 

(44,112

)

(16.9

%)

 
Income (loss) from operations

10,478

 

(54,724

)

65,202

 

119.1

%

% Margin

3.3

%

-18.9

%

 
Total other income, net

11,280

 

2,947

 

8,333

 

282.8

%

 
Income (loss) from continuing operations before income taxes

21,758

 

(51,777

)

73,535

 

142.0

%

 
Income tax expense

18,868

 

5,877

 

12,991

 

221.0

%

 
Net earnings (loss) from continuing operations

2,890

 

(57,654

)

60,544

 

105.0

%

 
Earnings from discontinued operations, net of tax

387

 

-

 

387

 

n/a

 

 
Net earnings (loss)

3,277

 

(57,654

)

60,931

 

105.7

%

 
Basic earnings (loss) per share:
Continuing operations

0.04

 

(0.85

)

0.89

 

105.1

%

Discontinued operations

0.01

 

-

 

0.01

 

n/a

 

Basic earnings (loss) per share

0.05

 

(0.85

)

0.90

 

105.8

%

 
Diluted earnings (loss) per share:
Continuing operations

0.04

 

(0.85

)

0.89

 

105.0

%

Discontinued operations

0.01

 

-

 

0.01

 

n/a

 

Diluted earnings (loss) per share:

0.05

 

(0.85

)

0.90

 

105.7

%

 
Basic weighted average shares

66,391

 

67,750

 

Diluted weighted average shares

67,628

 

67,750

 

 
LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP EPS (1)
(Unaudited)
(Dollars in thousands, except per share amounts)
 

For the Three Months Ended

 

For the Six Months Ended

September 30,

 

September 30,

2023

 

2022

 

2023

 

2022

 
Income (loss) from continuing operations before income taxes

14,639

(26,874

)

21,758

(51,777

)

 
Income tax expense

10,163

3,562

 

18,868

5,877

 

 
Net earnings (loss) from continuing operations

4,476

(30,436

)

2,890

(57,654

)

 
Earnings from discontinued operations, net of tax

387

-

 

387

-

 

 
Net earnings (loss)

4,863

(30,436

)

3,277

(57,654

)

 
Earnings (loss) per share:
Basic

0.07

(0.45

)

0.05

(0.85

)

Diluted

0.07

(0.45

)

0.05

(0.85

)

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

1,217

4,637

 

4,507

9,280

 

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

15,735

27,293

 

29,027

51,518

 

Transformation costs (general and administrative)

-

1,250

 

1,875

1,250

 

Restructuring charges (gains, losses, and other)

6,574

13,111

 

6,690

13,850

 

 
Total excluded items, continuing operations

23,526

46,291

 

42,099

75,898

 

 
Income from continuing operations before income taxes and excluding items

38,165

19,417

 

63,857

24,121

 

 
Income tax expense (2)

9,036

4,557

 

15,203

5,794

 

 
Non-GAAP net earnings from continuing operations

29,129

14,860

 

48,654

18,327

 

 
Non-GAAP earnings per share from continuing operations:
Basic

0.44

0.22

 

0.73

0.27

 

Diluted

0.43

0.22

 

0.72

0.27

 

 
Basic weighted average shares

66,284

67,096

 

66,391

67,750

 

Diluted weighted average shares

67,868

67,568

 

67,628

68,384

 

 

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

September 30,

 

September 30,

2023

 

2022

 

2023

 

2022

 
Income (loss) from continuing operations

8,208

(29,122

)

10,478

(54,724

)

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

1,217

4,637

 

4,507

9,280

 

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

15,735

27,293

 

29,027

51,518

 

Transformation costs (general and administrative)

-

1,250

 

1,875

1,250

 

Restructuring charges (gains, losses, and other)

6,574

13,111

 

6,690

13,850

 

 
Total excluded items

23,526

46,291

 

42,099

75,898

 

 
Income from continuing operations before excluded items

31,734

17,169

 

52,577

21,174

 

 

(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 ADJUSTED EBITDA (1)
(Unaudited)
(Dollars in thousands)
 

For the Three Months Ended

 

For the Six Months Ended

September 30,

 

September 30,

2023

 

2022

 

2023

 

2022

 
Net earnings (loss) from continuing operations

4,476

 

(30,436

)

2,890

 

(57,654

)

 
Income tax expense

10,163

 

3,562

 

18,868

 

5,877

 

 
Other income

(6,431

)

(2,248

)

(11,280

)

(2,947

)

 
Income (loss) from operations

8,208

 

(29,122

)

10,478

 

(54,724

)

 
Depreciation and amortization

1,864

 

5,689

 

5,903

 

11,430

 

 
EBITDA

10,072

 

(23,433

)

16,381

 

(43,294

)

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

15,735

 

27,293

 

29,027

 

51,518

 

Transformation costs (general and administrative)

-

 

1,250

 

1,875

 

1,250

 

Restructuring charges (gains, losses, and other)

6,574

 

13,111

 

6,690

 

13,850

 

 
Other adjustments

22,309

 

41,654

 

37,592

 

66,618

 

 
Adjusted EBITDA

32,381

 

18,221

 

53,973

 

23,324

 

 

(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)
 

September 30,

 

March 31,

 

$

 

%

2023

 

2023

 

Variance

 

Variance

 
Assets
Current assets:
Cash and cash equivalents

492,169

 

464,448

 

27,721

 

6.0

%

Short-term investments

31,920

 

32,807

 

(887

)

(2.7

%)

Trade accounts receivable, net

174,703

 

157,379

 

17,324

 

11.0

%

Refundable income taxes, net

-

 

28,897

 

(28,897

)

(100.0

%)

Other current assets

29,054

 

31,028

 

(1,974

)

(6.4

%)

 
Total current assets

727,846

 

714,559

 

13,287

 

1.9

%

 
Property and equipment

38,221

 

39,393

 

(1,172

)

(3.0

%)

Less - accumulated depreciation and amortization

32,647

 

32,308

 

339

 

1.0

%

 
Property and equipment, net

5,574

 

7,085

 

(1,511

)

(21.3

%)

 
Intangible assets, net

5,361

 

9,868

 

(4,507

)

(45.7

%)

Goodwill

360,016

 

363,116

 

(3,100

)

(0.9

%)

Deferred commissions, net

39,937

 

37,030

 

2,907

 

7.9

%

Other assets, net

41,785

 

41,045

 

740

 

1.8

%

 

1,180,519

 

1,172,703

 

7,816

 

0.7

%

 
Liabilities and Stockholders' Equity
Current liabilities:
Trade accounts payable

79,344

 

86,568

 

(7,224

)

(8.3

%)

Accrued payroll and related expenses

35,331

 

33,434

 

1,897

 

5.7

%

Other accrued expenses

37,133

 

35,736

 

1,397

 

3.9

%

Deferred revenue

20,978

 

19,091

 

1,887

 

9.9

%

Income taxes payable

13,911

 

-

 

13,911

 

n/a

 

 
Total current liabilities

186,697

 

174,829

 

11,868

 

6.8

%

 
Other liabilities

71,964

 

71,798

 

166

 

0.2

%

 
Stockholders' equity:
Preferred stock

-

 

-

 

-

 

n/a

 

Common stock

15,473

 

15,399

 

74

 

0.5

%

Additional paid-in capital

1,889,178

 

1,855,916

 

33,262

 

1.8

%

Retained earnings

1,305,568

 

1,302,291

 

3,277

 

0.3

%

Accumulated other comprehensive income

3,567

 

4,504

 

(937

)

(20.8

%)

Treasury stock, at cost

(2,291,928

)

(2,252,034

)

(39,894

)

1.8

%

Total stockholders' equity

921,858

 

926,076

 

(4,218

)

(0.5

%)

 

1,180,519

 

1,172,703

 

7,816

 

0.7

%

 

 
LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
 

For the Three Months Ended

September 30,

2023

 

2022

 
Cash flows from operating activities:
Net earnings (loss)

4,863

 

(30,436

)

Earnings from discontinued operations, net of tax

(387

)

Non-cash operating activities:
Depreciation and amortization

1,864

 

5,689

 

Gain on disposal or impairment of assets

(6

)

(192

)

Lease impairments

2,315

 

12,225

 

Provision for doubtful accounts

(18

)

118

 

Impairment of goodwill

2,875

 

-

 

Deferred income taxes

40

 

31

 

Non-cash stock compensation expense

15,735

 

27,293

 

Changes in operating assets and liabilities:
Accounts receivable

(1,867

)

(3,716

)

Deferred commissions

(2,993

)

(551

)

Other assets

735

 

4,608

 

Accounts payable and other liabilities

12,340

 

5,080

 

Income taxes

6,463

 

(618

)

Deferred revenue

(6,195

)

1,844

 

Net cash provided by operating activities

35,764

 

21,375

 

Cash flows from investing activities:
Capital expenditures

(200

)

(2,673

)

Purchases of investments

(24,385

)

-

 

Proceeds from sale of investments

25,750

 

-

 

Purchases of strategic investments

(500

)

-

 

Proceeds from sale of strategic investment

-

 

400

 

Net cash provided by (used in) investing activities

665

 

(2,273

)

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

2

 

2

 

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

(677

)

(708

)

Acquisition of treasury stock

(15,122

)

(40,038

)

Net cash used in financing activities

(15,797

)

(40,744

)

Cash flows from discontinued operations:
From operating activities

387

 

-

 

Net cash provided by discontinued operations

387

 

-

 

Effect of exchange rate changes on cash

377

 

(1,010

)

 
Net change in cash and cash equivalents

21,396

 

(22,652

)

Cash and cash equivalents at beginning of period

470,773

 

508,254

 

Cash and cash equivalents at end of period

492,169

 

485,602

 

 
Supplemental cash flow information:
Cash paid for income taxes, net - continuing operations

3,514

 

4,157

 

Cash (received) for income taxes, net - discontinued operations

(595

)

-

 

Cash paid for operating lease liabilities

2,689

 

1,105

 

Operating lease assets obtained in exchange for operating lease liabilities

1,112

 

-

 

Operating lease assets relinquished in exchange for operating lease liabilities

-

 

(6,781

)

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

211

 

187

 

 
LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
 

For the Six Months Ended

September 30,

2023

 

2022

 
Cash flows from operating activities:
Net earnings (loss)

3,277

 

(57,654

)

Earnings from discontinued operations, net of tax

(387

)

Non-cash operating activities:
Depreciation and amortization

5,903

 

11,430

 

Loss (gain) on disposal or impairment of assets

273

 

(197

)

Lease impairments

2,344

 

12,225

 

Provision for doubtful accounts

(237

)

1,115

 

Impairment of goodwill

2,875

 

-

 

Deferred income taxes

87

 

218

 

Non-cash stock compensation expense

29,027

 

51,518

 

Changes in operating assets and liabilities:
Accounts receivable

(16,258

)

(11,449

)

Deferred commissions

(2,907

)

(920

)

Other assets

5,743

 

8,960

 

Accounts payable and other liabilities

(12,885

)

(29,477

)

Income taxes

43,699

 

1,513

 

Deferred revenue

903

 

724

 

Net cash provided by (used in) operating activities

61,457

 

(11,994

)

Cash flows from investing activities:
Capital expenditures

(253

)

(4,414

)

Purchases of investments

(24,385

)

-

 

Proceeds from sales of investments

25,750

 

-

 

Purchases of strategic investments

(1,000

)

-

 

Proceeds from sales of strategic investments

-

 

400

 

Net cash provided by (used in) investing activities

112

 

(4,014

)

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

5,575

 

4,591

 

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

(4,569

)

(1,290

)

Acquisition of treasury stock

(35,325

)

(100,091

)

Net cash used in financing activities

(34,319

)

(96,790

)

Cash flows from discontinued operations:
From operating activities

387

 

-

 

Net cash provided by discontinued operations

387

 

-

 

Effect of exchange rate changes on cash

84

 

(1,762

)

 
Net change in cash and cash equivalents

27,721

 

(114,560

)

Cash and cash equivalents at beginning of period

464,448

 

600,162

 

Cash and cash equivalents at end of period

492,169

 

485,602

 

 
Supplemental cash flow information:
Cash (received) paid for income taxes, net - continuing operations

(25,139

)

4,161

 

Cash (received) for income taxes, net - discontinued operations

(595

)

-

 

Cash paid for operating lease liabilities

5,148

 

3,261

 

Operating lease assets obtained in exchange for operating lease liabilities

11,677

 

-

 

Operating lease assets relinquished in exchange for operating lease liabilities

(4,486

)

(6,781

)

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

211

 

187

 

 
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 09/30/23
 
Net Cash Provided by (Used in) Operating Activities-Continuing Operations

(33,369

)

21,375

 

15,770

 

30,665

 

34,441

 

25,693

 

35,764

 

 
Less:
Capital expenditures

(1,741

)

(2,673

)

(179

)

(103

)

(4,696

)

(53

)

(200

)

 
Free Cash Flow to Equity

(35,110

)

18,702

 

15,591

 

30,562

 

29,745

 

25,640

 

35,564

 

 

(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)
 
FY24 to FY23
06/30/22 09/30/22 12/31/22 03/31/23 FY2023 06/30/23 09/30/23 FY2024 % $
Revenues

142,243

 

147,099

 

158,615

 

148,626

 

596,583

 

154,069

 

159,871

 

313,940

 

8.7

%

12,772

 

 
Cost of revenue

41,021

 

42,304

 

43,287

 

43,472

 

170,084

 

45,621

 

41,212

 

86,833

 

(2.6

%)

(1,092

)

Gross profit

101,222

 

104,795

 

115,328

 

105,154

 

426,499

 

108,448

 

118,659

 

227,107

 

13.2

%

13,864

 

% Gross margin

71.2

%

71.2

%

72.7

%

70.8

%

71.5

%

70.4

%

74.2

%

72.3

%

 
Operating expenses
Research and development

47,661

 

46,139

 

43,175

 

52,220

 

189,195

 

34,519

 

33,733

 

68,252

 

(26.9

%)

(12,406

)

Sales and marketing

51,280

 

45,949

 

47,702

 

57,506

 

202,437

 

44,879

 

44,135

 

89,014

 

(3.9

%)

(1,814

)

General and administrative

27,144

 

28,718

 

36,657

 

32,832

 

125,351

 

26,664

 

26,009

 

52,673

 

(9.4

%)

(2,709

)

Gains, losses and other items, net

739

 

13,111

 

11,743

 

9,723

 

35,316

 

116

 

6,574

 

6,690

 

(49.9

%)

(6,537

)

Total operating expenses

126,824

 

133,917

 

139,277

 

152,281

 

552,299

 

106,178

 

110,451

 

216,629

 

(17.5

%)

(23,466

)

 
Income (loss) from operations

(25,602

)

(29,122

)

(23,949

)

(47,127

)

(125,800

)

2,270

 

8,208

 

10,478

 

128.2

%

37,330

 

% Margin

-18.0

%

-19.8

%

-15.1

%

-31.7

%

-21.1

%

1.5

%

5.1

%

3.3

%

 
Total other income (expense), net

699

 

2,248

 

(736

)

4,735

 

6,946

 

4,849

 

6,431

 

11,280

 

186.1

%

4,183

 

 
Income (loss) from continuing operations before income taxes

(24,903

)

(26,874

)

(24,685

)

(42,392

)

(118,854

)

7,119

 

14,639

 

21,758

 

154.5

%

41,513

 

 
Income taxes expense (benefit)

2,315

 

3,562

 

5,835

 

(6,460

)

5,252

 

8,705

 

10,163

 

18,868

 

185.3

%

6,601

 

 
Net loss from continuing operations

(27,218

)

(30,436

)

(30,520

)

(35,932

)

(124,106

)

(1,586

)

4,476

 

2,890

 

114.7

%

34,912

 

 
Earnings from discontinued operations, net of tax

-

 

-

 

836

 

4,568

 

5,404

 

-

 

387

 

387

 

n/a

 

387.00

 

 
Net earnings (loss)

(27,218

)

(30,436

)

(29,684

)

(31,364

)

(118,702

)

(1,586

)

4,863

 

3,277

 

116.0

%

35,299

 

 
Diluted earnings (loss) per share

(0.40

)

(0.45

)

(0.46

)

(0.48

)

(1.79

)

(0.02

)

0.07

 

0.05

 

n/a

 

0.53

 

 
Some earnings (loss) per share amounts may not add due to rounding.
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 09/30/23 FY2024
 
Expenses, continuing operations:
Cost of revenue

41,021

 

42,304

 

43,287

 

43,472

 

170,084

 

45,621

 

41,212

 

86,833

 

Research and development

47,661

 

46,139

 

43,175

 

52,220

 

189,195

 

34,519

 

33,733

 

68,252

 

Sales and marketing

51,280

 

45,949

 

47,702

 

57,506

 

202,437

 

44,879

 

44,135

 

89,014

 

General and administrative

27,144

 

28,718

 

36,657

 

32,832

 

125,351

 

26,664

 

26,009

 

52,673

 

Gains, losses and other items, net

739

 

13,111

 

11,743

 

9,723

 

35,316

 

116

 

6,574

 

6,690

 

 
Gross profit, continuing operations:

101,222

 

104,795

 

115,328

 

105,154

 

426,499

 

108,448

 

118,659

 

227,107

 

% Gross margin

71.2

%

71.2

%

72.7

%

70.8

%

71.5

%

70.4

%

74.2

%

72.3

%

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

4,643

 

4,637

 

4,209

 

3,336

 

16,825

 

3,290

 

1,217

 

4,507

 

Non-cash stock compensation (cost of revenue)

1,163

 

1,293

 

1,208

 

2,653

 

6,317

 

629

 

629

 

1,258

 

Non-cash stock compensation (research and development)

11,656

 

12,360

 

10,654

 

20,737

 

55,407

 

5,077

 

5,293

 

10,370

 

Non-cash stock compensation (sales and marketing)

5,884

 

6,116

 

5,871

 

11,558

 

29,429

 

3,736

 

4,786

 

8,522

 

Non-cash stock compensation (general and administrative)

5,522

 

7,524

 

11,891

 

9,710

 

34,647

 

3,850

 

5,027

 

8,877

 

Restructuring charges (gains, losses, and other)

739

 

13,111

 

11,743

 

9,723

 

35,316

 

116

 

6,574

 

6,690

 

Transformation costs (general and administrative)

-

 

1,250

 

4,112

 

3,663

 

9,025

 

1,875

 

-

 

1,875

 

Total excluded items

29,607

 

46,291

 

49,688

 

61,380

 

186,966

 

18,573

 

23,526

 

42,099

 

 
Expenses, continuing operations excluding items:
Cost of revenue

35,215

 

36,374

 

37,870

 

37,483

 

146,942

 

41,702

 

39,366

 

81,068

 

Research and development

36,005

 

33,779

 

32,521

 

31,483

 

133,788

 

29,442

 

28,440

 

57,882

 

Sales and marketing

45,396

 

39,833

 

41,831

 

45,948

 

173,008

 

41,143

 

39,349

 

80,492

 

General and administrative

21,622

 

19,944

 

20,654

 

19,459

 

81,679

 

20,939

 

20,982

 

41,921

 

Gains, losses and other items, net

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

 
Gross profit, continuing operations excluding items:

107,028

 

110,725

 

120,745

 

111,143

 

449,641

 

112,367

 

120,505

 

232,872

 

% Gross margin

75.2

%

75.3

%

76.1

%

74.8

%

75.4

%

72.9

%

75.4

%

74.2

%

 

(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 09/30/23 FY 2024
 
Income (loss) from continuing operations before income taxes

(24,903

)

(26,874

)

(24,685

)

(42,392

)

(118,854

)

7,119

 

14,639

21,758

Income taxes (benefit)

2,315

 

3,562

 

5,835

 

(6,460

)

5,252

 

8,705

 

10,163

18,868

Net earnings (loss) from continuing operations

(27,218

)

(30,436

)

(30,520

)

(35,932

)

(124,106

)

(1,586

)

4,476

2,890

 
Earnings from discontinued operations, net of tax

-

 

-

 

836

 

4,568

 

5,404

 

-

 

387

387

 
Net earnings (loss)

(27,218

)

(30,436

)

(29,684

)

(31,364

)

(118,702

)

(1,586

)

4,863

3,277

 
Earnings (loss) per share:
Basic

(0.40

)

(0.45

)

(0.46

)

(0.48

)

(1.79

)

(0.02

)

0.07

0.05

Diluted

(0.40

)

(0.45

)

(0.46

)

(0.48

)

(1.79

)

(0.02

)

0.07

0.05

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

4,643

 

4,637

 

4,209

 

3,336

 

16,825

 

3,290

 

1,217

4,507

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

24,225

 

27,293

 

29,624

 

44,658

 

125,800

 

13,292

 

15,735

29,027

Restructuring charges (gains, losses, and other)

739

 

13,111

 

11,743

 

9,723

 

35,316

 

116

 

6,574

6,690

Transformation costs (general and administrative)

-

 

1,250

 

4,112

 

3,663

 

9,025

 

1,875

 

-

1,875

Total excluded items from continuing operations

29,607

 

46,291

 

49,688

 

61,380

 

186,966

 

18,573

 

23,526

42,099

 
Income from continuing operations before income taxes and excluding items

4,704

 

19,417

 

25,003

 

18,988

 

68,112

 

25,692

 

38,165

63,857

Income taxes expense (benefit)

1,237

 

4,557

 

6,468

 

(2,141

)

10,121

 

6,167

 

9,036

15,203

Non-GAAP net earnings from continuing operations

3,467

 

14,860

 

18,535

 

21,129

 

57,991

 

19,525

 

29,129

48,654

 
Non-GAAP earnings per share from continuing operations:
Basic

0.05

 

0.22

 

0.29

 

0.32

 

0.87

 

0.29

 

0.44

0.73

Diluted

0.05

 

0.22

 

0.28

 

0.32

 

0.86

 

0.29

 

0.43

0.72

 
Basic weighted average shares

68,403

 

67,096

 

64,784

 

65,126

 

66,352

 

66,497

 

66,284

66,391

Diluted weighted average shares

69,195

 

67,568

 

65,356

 

66,268

 

67,097

 

67,388

 

67,868

67,628

 
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
December 31, 2023 March 31, 2024
 
Low High
GAAP income from operations

 

8,000

 

8,000

 

11,000

 
Excluded items:
Purchased intangible asset amortization

 

1,000

 

7,000

 

7,000

Non-cash stock compensation

 

18,000

 

69,000

 

69,000

Restructuring charges

 

2,000

 

11,000

 

11,000

Transformation costs

 

-

 

2,000

 

2,000

Total excluded items

 

21,000

 

89,000

 

89,000

 
Non-GAAP income from operations

$

29,000

$

97,000

$

100,000

 

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

APPENDIX A

LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES

Q2 FISCAL 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 asset impairments. 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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