RAMP
$30.50
Liveramp Holdings
$1.95
6.83%
Earnings Details
3rd Quarter December 2019
Wednesday, February 5, 2020 4:05:00 PM
Tweet Share Watch
Summary

LiveRamp Reaffirms

Liveramp Holdings (RAMP) reported a 3rd Quarter December 2019 loss of $0.56 per share on revenue of $102.2 million. The consensus estimate was a loss of $0.50 per share on revenue of $103.0 million. Revenue grew 27.7% on a year-over-year basis.

The company said it continues to expect fiscal 2020 revenue of $376.0 million to $381.0 million. The current consensus estimate is revenue of $378.9 million for the year ending March 31, 2020.

Results
Reported Earnings
($0.56)
Earnings Whisper
-
Consensus Estimate
($0.50)
Reported Revenue
$102.2 Mil
Revenue Estimate
$103.0 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

LiveRamp Announces Record Third Quarter Results

First $100 Million Revenue Quarter

GAAP Gross Margin Increases to 63% – Non-GAAP Gross Margin Surges to 69%

Operating Cash Flow Positive $16 Million

SAN FRANCISCO--(BUSINESS WIRE)--LiveRamp® (NYSE: RAMP), the trusted platform that makes data accessible and meaningful, today announced its financial results for the third quarter ended December 31, 2019.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20200205005789/en/

Financial Highlights:

  • Total revenue was $102 million, up 28% compared to the prior year period.
  • Subscription revenue was $82 million, up 25%, and contributed 80% of total revenue.
  • Marketplace & Other revenue was $21 million, up 38%.
  • GAAP gross profit was $64 million, up 42% compared to the prior year period. GAAP gross margin of 63% expanded 6 percentage points. Non-GAAP gross profit was $71 million, up 38% compared to the prior year period. Non-GAAP gross margin of 69% expanded 5 percentage points.
  • GAAP operating loss was $41 million compared to a GAAP operating loss of $48 million in the prior year period. Non-GAAP operating loss was $6 million compared to a non-GAAP operating loss of $11 million in the prior year period.
  • GAAP loss per share from continuing operations was $0.56, and non-GAAP loss per share from continuing operations was $0.03.
  • Net cash provided by operating activities was $16 million compared to net cash used in operating activities of $11 million during the third quarter of fiscal 2019.
  • LiveRamp has repurchased 2.6 million shares for $121 million under the current stock repurchase program since March 31, 2019. Since August 2011, the Company has returned over $1 billion in capital to shareholders.
  • Cash and cash equivalents totaled $767 million with no debt at quarter end.

“LiveRamp has emerged as the safe and neutral choice for using data effectively,” said LiveRamp CEO Scott Howe. “Leading brands, agencies and publishers around the world are relying on us to provide the foundational infrastructure for navigating a complex ecosystem of evolving regulations and technologies. In addition, our Authenticated Traffic Solution continues to gain global acceptance as the ecosystem welcomes a simple and unbiased standard.”

“Our business model demonstrated its strong potential this quarter,” said LiveRamp President and CFO Warren Jenson. “We reported our first $100 million revenue quarter, our non-GAAP gross margin expanded to 69%, and we were operating cash flow positive.”

GAAP and Non-GAAP Results:

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

 

Q3 Fiscal 2020

 

Q3 Fiscal 2019

 

Results

 

Results

 

GAAP

Non-GAAP

 

GAAP

Non-GAAP

Subscription revenue

$82

 

$65

YoY change %

25%

 

 

42%

 

Marketplace & other revenue

$21

 

$15

YoY change %

38%

 

 

13%

 

Total revenue

$102

 

$80

YoY change %

28%

 

 

35%

 

 

 

 

 

 

 

Gross profit

$64

$71

 

$45

$51

% Gross margin

63%

69%

 

56%

64%

YoY change, pts

6 pts

5 pts

 

(2) pts

(6) pts

 

 

 

 

 

 

Operating loss

($41)

($6)

 

($48)

($11)

% Operating margin

(41%)

(5%)

 

(60)%

(14%)

YoY change, pts

20 pts

8 pts

 

(13) pts

(7) pts

 

 

 

 

 

 

Net loss1

($38)

($2)

 

($15)

$2

YoY change %

nm

nm

 

nm

nm

Loss per share1

($0.56)

($0.03)

 

($0.20)

$0.03

YoY change %

nm

nm

 

nm

nm

 

 

 

 

 

 

Shares to Calculate EPS

67.5

67.5

 

77.4

80.7

YoY change %

(13%)

(13%)

 

 

 

Net operating cash flow

$16

 

($11)

YoY change %

nm

 

nm

 

Free cash flow to equity

$13

 

($13)

YoY change %

nm

 

nm

 

 

 

 

 

 

1 From continuing operations, does not include AMS results.

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 Metrics & Highlights

  • LiveRamp added 50 new direct subscription customers during the quarter, bringing its total direct customer count to 770, an increase of 20% year over year. It now serves 21% of the Fortune 500 compared to 19% in the prior year period.
  • LiveRamp has 50 clients whose subscription contracts exceed $1 million in annualized revenue, up from 42 in the prior year period.
  • During the third quarter, subscription net retention was approximately 112%. Platform net retention was 119%.
  • LiveRamp addressability solutions, including the Authenticated Traffic Solution (or ATS), continue to experience strong global adoption. There are currently 12 supply-side platforms (SSPs) live or committed to implementing IdentityLink in the bidstream, including Beachfront, Index Exchange, Pubmatic, Rubicon Project and TripleLift. In addition, there are 30 demand-side platforms (DSPs) live or committed to bid on IdentityLink™, including Amobee, Criteo, dataxu, and MediaMath.
  • LiveRamp launched Privacy Manager, a configurable consent and preference management platform, to help global organizations comply with data privacy laws like GDPR and CCPA. Privacy Manager is built on Faktor’s platform. LiveRamp acquired Faktor in April 2019.

Financial Outlook

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

For fiscal 2020, LiveRamp expects to report:

  • Revenue of between $376 million and $381 million, an increase of 32% to 33% year-over-year.
  • GAAP operating loss from continuing operations of between $186 million and $184 million.
  • Non-GAAP operating loss of between $63 million and $61 million.

Conference Call

LiveRamp will hold a conference call at 1:30 p.m. PT today to further discuss this information. Interested parties are invited to listen to the call which will be broadcast via the Internet and can be found on LiveRamp’s investor site. A slide presentation will be referenced during the call and can be accessed here.

About LiveRamp

LiveRamp provides the identity platform leveraged by brands and their partners to deliver innovative products and exceptional experiences. Powered by its core capabilities in data accessibility, identity, connectivity, and data stewardship, LiveRamp makes it easy to connect the world’s data, people and applications. 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 relate to the Company’s dependence upon customer renewals; new customer additions and upsell within our subscription business; our reliance upon partners including data suppliers; competition; and attracting and retaining talent. Additional risks relate to maintaining our culture and our ability to innovate and evolve within a rapidly changing industry including digital advertising, 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 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 2019 ended March 31, 2019.

The financial information set forth in this press release reflects estimates based on information available at this time. These amounts could differ from actual reported amounts stated in LiveRamp’s Quarterly Report on Form 10-Q for the period ended December 31, 2019, which LiveRamp expects to file on February 5, 2020.

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?, IdentityLink™ , 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,

 

 

 

 

$

%

2019

 

2018

 

Variance

Variance

 
Revenues

102,217

80,021

22,196

27.7%

 
Cost of revenue

37,966

34,838

3,128

9.0%

Gross profit

64,251

45,183

19,068

42.2%

% Gross margin

62.9%

56.5%

 
Operating expenses:
Research and development

27,403

20,469

6,934

33.9%

Sales and marketing

51,993

40,054

11,939

29.8%

General and administrative

26,107

27,828

(1,721)

(6.2%)

Gains, losses and other items, net

233

5,043

(4,810)

(95.4%)

Total operating expenses

105,736

93,394

12,342

13.2%

 
Loss from operations

(41,485)

(48,211)

6,726

14.0%

% Margin

-40.6%

-60.2%

 
Total other income

3,158

10,404

(7,246)

(69.6%)

 
Loss from continuing operations before income taxes

(38,327)

(37,807)

(520)

(1.4%)

 
Income taxes (benefit)

(287)

(22,546)

22,259

98.7%

 
Net loss from continuing operations

(38,040)

(15,261)

(22,779)

(149.3%)

 
Earnings from discontinued operations, net of tax

-

1,071,661

(1,071,661)

(100.0%)

 
Net earnings (loss)

(38,040)

1,056,400

(1,094,440)

(103.6%)

 
Basic earnings (loss) per share:
Continuing operations

(0.56)

(0.20)

(0.37)

(185.9%)

Discontinued operations

-

13.85

(13.85)

(100.0%)

Net earnings (loss)

(0.56)

13.65

(14.21)

(104.1%)

 
Diluted earnings (loss) per share:
Continuing operations

(0.56)

(0.20)

(0.37)

(185.9%)

Discontinued operations

-

13.85

(13.85)

(100.0%)

Net earnings (loss)

(0.56)

13.65

(14.21)

(104.1%)

 
Basic weighted average shares

67,473

77,398

Diluted weighted average shares

67,473

77,398

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,

 

 

 

 

 

$

%

 

2019

 

2018

 

Variance

Variance

 
Revenues

274,871

207,304

67,567

32.6%

 
Cost of revenue

115,852

82,958

32,894

39.7%

Gross profit

159,019

124,346

34,673

27.9%

% Gross margin

57.9%

60.0%

 
Operating expenses:
Research and development

77,570

54,379

23,191

42.6%

Sales and marketing

140,341

109,317

31,024

28.4%

General and administrative

78,687

71,129

7,558

10.6%

Gains, losses and other items, net

2,554

5,533

(2,979)

(53.8%)

Total operating expenses

299,152

240,358

58,794

24.5%

 
Loss from operations

(140,133)

(116,012)

(24,121)

(20.8%)

% Margin

-51.0%

-56.0%

 
Total other income

13,820

10,479

3,341

31.9%

 
Loss from continuing operations before income taxes

(126,313)

(105,533)

(20,780)

(19.7%)

 
Income taxes (benefit)

(5,931)

(21,274)

15,343

72.1%

 
Net loss from continuing operations

(120,382)

(84,259)

(36,123)

(42.9%)

 
Earnings from discontinued operations, net of tax

-

1,158,267

(1,158,267)

(100.0%)

 
Net earnings (loss)

(120,382)

1,074,008

(1,194,390)

(111.2%)

 
Basic earnings (loss) per share:
Continuing operations

(1.77)

(1.09)

(0.68)

(62.3%)

Discontinued operations

-

14.99

(14.99)

(100.0%)

Net earnings (loss)

(1.77)

13.90

(15.67)

(112.7%)

 
Diluted earnings (loss) per share:
Continuing operations

(1.77)

(1.09)

(0.68)

(62.3%)

Discontinued operations

-

14.99

(14.99)

(100.0%)

Net earnings (loss)

(1.77)

13.90

(15.67)

(112.7%)

 
Basic weighted average shares

68,021

77,260

Diluted weighted average shares

68,021

77,260

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,

 

2019

 

2018

 

2019

 

2018

 
 
Loss from continuing operations before income taxes

(38,327)

(37,807)

(126,313)

(105,533)

 
Income taxes (benefit)

(287)

(22,546)

(5,931)

(21,274)

 
Net loss from continuing operations

(38,040)

(15,261)

(120,382)

(84,259)

 
Earnings from discontinued operations, net of tax

-

1,071,661

-

1,158,267

 
Net earnings (loss)

(38,040)

1,056,400

(120,382)

1,074,008

 
Earnings (loss) per share:
Basic

(0.56)

13.65

(1.77)

13.90

Diluted

(0.56)

13.65

(1.77)

13.90

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

5,369

3,359

13,861

12,877

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

30,295

26,082

72,279

61,547

Accelerated depreciation (cost of revenue and operating expenses)

-

1,959

3,569

1,959

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

233

5,043

2,554

5,533

Separation and transformation costs (general and administrative)

-

700

-

2,822

 
Total excluded items, continuing operations

35,897

37,143

92,263

84,738

 
Loss from continuing operations before income taxes and excluding items

(2,430)

(664)

(34,050)

(20,795)

 
Income taxes (benefit) (2)

(227)

(2,941)

(253)

(7,809)

 
Non-GAAP net earnings (loss) from continuing operations

(2,203)

2,277

(33,797)

(12,986)

 
Non-GAAP earnings (loss) per share from continuing operations:
Basic

(0.03)

0.03

(0.50)

(0.17)

Diluted

(0.03)

0.03

(0.50)

(0.17)

 
Basic weighted average shares

67,473

77,398

68,021

77,260

Diluted weighted average shares

67,473

80,674

68,021

77,260

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

(2) Income taxes were calculated using an effective non-GAAP tax rate of 9.3% and 442.9% in the third quarter of fiscal 2020 and 2019, respectively, and 0.0% and 37.6% for the nine months ended December 31, 2019 and 2018, respectively. The difference between our GAAP and non-GAAP tax rates were primarily due to the net tax effects of the excluded items.

LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES

RECONCILIATION OF GAAP TO NON-GAAP LOSS FROM OPERATIONS (1)

(Unaudited)

(Dollars in thousands)

 

 

 

 

 

 

 

 

 

For the Three Months Ended

 

For the Nine Months Ended

 

December 31,

 

December 31,

 

2019

 

2018

 

2019

 

2018

 
 
Loss from continuing operations

(41,485)

(48,211)

(140,133)

(116,012)

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

5,369

3,359

13,861

12,877

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

30,295

26,082

72,279

61,547

Accelerated depreciation (cost of revenue and operating expenses)

-

1,959

3,569

1,959

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

233

5,043

2,554

5,533

Separation and transformation costs (general and administrative)

-

700

-

2,822

 
Total excluded items

35,897

37,143

92,263

84,738

 
Loss from continuing operations before excluded items

(5,588)

(11,068)

(47,870)

(31,274)

(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,

 

2019

 

2018

 

2019

 

2018

 
 
Net loss from continuing operations

(38,040)

(15,261)

(120,382)

(84,259)

 
Income taxes (benefit)

(287)

(22,546)

(5,931)

(21,274)

 
Other income

(3,158)

(10,404)

(13,820)

(10,479)

 
Loss from operations

(41,485)

(48,211)

(140,133)

(116,012)

 
Depreciation and amortization

8,104

8,853

27,958

25,274

 
EBITDA

(33,381)

(39,358)

(112,175)

(90,738)

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

30,295

26,082

72,279

61,547

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

233

5,043

2,554

5,533

Separation and transformation costs (general and administrative)

-

700

-

2,822

 
Other adjustments

30,528

31,825

74,833

69,902

 
Adjusted EBITDA

(2,853)

(7,533)

(37,342)

(20,836)

(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,

 

$

%

 

2019

 

2019

 

Variance

Variance

 
Assets
Current assets:
Cash and cash equivalents

767,200

1,061,473

(294,273)

(27.7%)

Restricted cash

14,815

-

14,815

n/a

Trade accounts receivable, net

87,709

78,563

9,146

11.6%

Refundable income taxes

17,129

7,890

9,239

117.1%

Other current assets

46,219

44,150

2,069

4.7%

 
Total current assets

933,072

1,192,076

(259,004)

(21.7%)

 
Property and equipment

43,519

64,852

(21,333)

(32.9%)

Less - accumulated depreciation and amortization

23,137

38,809

(15,672)

(40.4%)

 
Property and equipment, net

20,382

26,043

(5,661)

(21.7%)

 
Software, net of accumulated amortization

24,891

6,861

18,030

262.8%

Goodwill

297,780

204,656

93,124

45.5%

Deferred income taxes

36

35

1

2.9%

Deferred commissions, net

13,451

10,741

2,710

25.2%

Other assets, net

54,240

32,499

21,741

66.9%

 

1,343,852

1,472,911

(129,059)

(8.8%)

 
Liabilities and Stockholders' Equity
Current liabilities:
Trade accounts payable

34,417

31,203

3,214

10.3%

Accrued payroll and related expenses

21,211

18,715

2,496

13.3%

Other accrued expenses

74,079

40,916

33,163

81.1%

Acquisition escrow payable

14,815

-

14,815

n/a

Deferred revenue

4,553

4,284

269

6.3%

 
Total current liabilities

149,075

95,118

53,957

56.7%

 
Deferred income taxes

1,505

39

1,466

3759.0%

 
Other liabilities

50,731

46,922

3,809

8.1%

 
Stockholders' equity:
Common stock

14,343

14,187

156

1.1%

Additional paid-in capital

1,479,018

1,406,813

72,205

5.1%

Retained earnings

1,549,223

1,669,605

(120,382)

(7.2%)

Accumulated other comprehensive income

6,776

7,801

(1,025)

(13.1%)

Treasury stock, at cost

(1,906,819)

(1,767,574)

(139,245)

(7.9%)

Total stockholders' equity

1,142,541

1,330,832

(188,291)

(14.1%)

 

1,343,852

1,472,911

(129,059)

(8.8%)

LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(Dollars in thousands)

 

 

 

 

 

For the Three Months Ended

 

December 31,

 

2019

 

2018

 
Cash flows from operating activities:
Net earnings (loss)

(38,040)

1,056,400

Earnings from discontinued operations, net of tax

-

(1,071,661)

Non-cash operating activities:
Depreciation and amortization

8,104

8,853

Loss on disposal or impairment of assets

-

2,870

Provision for doubtful accounts

1,253

628

Deferred income taxes

6,548

16,089

Non-cash stock compensation expense

30,295

26,082

Changes in operating assets and liabilities:
Accounts receivable

(593)

(32,362)

Deferred commissions

(2,104)

(988)

Other assets

6,301

(6,151)

Accounts payable and other liabilities

9,776

22,989

Income taxes

(5,634)

(33,631)

Deferred revenue

(102)

(40)

Net cash provided by (used in) operating activities

15,804

(10,922)

Cash flows from investing activities:
Capital expenditures

(2,773)

(1,938)

Cash paid in acquisition, net of cash received

-

-

Net cash used in investing activities

(2,773)

(1,938)

Cash flows from financing activities:
Payments of debt

-

(230,000)

Proceeds related to the issuance of common stock under stock and employee benefit plans

1,313

9,234

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

(4,150)

(22,282)

Acquisition of treasury stock

(20,715)

(18,341)

Acquisition of treasury stock from tender offer

-

(503,393)

Net cash used in financing activities

(23,552)

(764,782)

Cash flows from discontinued operations:
From operating activities

-

(13,336)

From investing activities

-

2,251,032

Effect of exchange rate changes on cash

-

-

Net cash provided by discontinued operations

-

2,237,696

Effect of exchange rate changes on cash

278

(327)

 
Net change in cash, cash equivalents and restricted cash

(10,243)

1,459,727

Cash, cash equivalents and restricted cash at beginning of period

792,258

87,047

Cash, cash equivalents and restricted cash at end of period

782,015

1,546,774

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

19

124

LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(Dollars in thousands)

 

 

 

 

 

For the Nine Months Ended

 

December 31,

 

2019

 

2018

 
Cash flows from operating activities:
Net earnings (loss)

(120,382)

1,074,008

Earnings from discontinued operations, net of tax

-

(1,158,267)

Non-cash operating activities:
Depreciation and amortization

27,958

25,274

Loss (gain) on disposal or impairment of assets

(140)

3,345

Provision for doubtful accounts

3,683

1,259

Deferred income taxes

1,465

28,533

Non-cash stock compensation expense

72,279

61,547

Changes in operating assets and liabilities:
Accounts receivable

(11,851)

(35,011)

Deferred commissions

(2,710)

(3,035)

Other assets

2,404

(4,887)

Accounts payable and other liabilities

12,597

18,504

Income taxes

(13,423)

(50,047)

Deferred revenue

(235)

(1,555)

Net cash used in operating activities

(28,355)

(40,332)

Cash flows from investing activities:
Capitalized software

-

(1,322)

Capital expenditures

(10,302)

(3,973)

Proceeds from sales of property and equipment

517

-

Payments for investments

-

(2,500)

Cash paid in acquisition, net of cash received

(105,365)

-

Net cash used in investing activities

(115,150)

(7,795)

Cash flows from financing activities:
Payments of debt

-

(233,293)

Fees from debt refinancing

-

(300)

Proceeds related to the issuance of common stock under stock and employee benefit plans

3,405

17,355

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

(18,057)

(36,906)

Acquisition of treasury stock

(121,188)

(64,107)

Acquisition of treasury stock from tender offer

-

(503,393)

Net cash used in financing activities

(135,840)

(820,644)

Cash flows from discontinued operations:
From operating activities

-

40,980

From investing activities

-

2,236,530

Effect of exchange rate changes on cash

-

(172)

Net cash provided by discontinued operations

-

2,277,338

Effect of exchange rate changes on cash

(113)

(1,811)

 
Net change in cash, cash equivalents and restricted cash

(279,458)

1,406,756

Cash, cash equivalents and restricted cash at beginning of period

1,061,473

140,018

Cash, cash equivalents and restricted cash at end of period

782,015

1,546,774

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

6,171

666

LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES

CALCULATION OF FREE CASH FLOW TO EQUITY (1)

(Unaudited)

(Dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

06/30/18

09/30/18

12/31/18

03/31/19

FY2019

 

06/30/19

09/30/19

12/31/19

FY2020

 
Net Cash Provided by (Used in) Operating Activities-Continuing Operations

(2,280)

(27,130)

(10,922)

38,354

(1,978)

(15,408)

(28,751)

15,804

(28,355)

 
Less (plus):
Capitalized software

(899)

(423)

-

-

(1,322)

-

-

-

-

Capital expenditures

(712)

(1,323)

(1,938)

(3,347)

(7,320)

(4,888)

(2,641)

(2,773)

(10,302)

Required debt payments

(592)

(2,701)

-

-

(3,293)

-

-

-

-

 
Free Cash Flow to Equity

(4,483)

(31,577)

(12,860)

35,007

(13,913)

(20,296)

(31,392)

13,031

(38,657)

(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 STATEMENTS OF OPERATIONS

(Unaudited)

(Dollars in thousands, except per share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Q3 FY20 to Q3 FY19

 

06/30/18

09/30/18

12/31/18

03/31/19

FY2019

 

06/30/19

09/30/19

12/31/19

YTD FY2020

 

%

$

Revenues

62,471

64,812

80,021

78,316

285,620

82,511

90,143

102,217

274,871

27.7%

22,196

 
Cost of revenue

23,654

24,466

34,838

37,760

120,718

36,426

41,460

37,966

115,852

9.0%

3,128

Gross profit

38,817

40,346

45,183

40,556

164,902

46,085

48,683

64,251

159,019

42.2%

19,068

% Gross margin

62.1%

62.3%

56.5%

51.8%

57.7%

55.9%

54.0%

62.9%

57.9%

 
Operating expenses
Research and development

16,970

16,940

20,469

31,318

85,697

23,722

26,445

27,403

77,570

33.9%

6,934

Sales and marketing

33,323

35,940

40,054

49,223

158,540

43,144

45,204

51,993

140,341

29.8%

11,939

General and administrative

18,125

25,176

27,828

27,749

98,878

25,318

27,262

26,107

78,687

(6.2%)

(1,721)

Gains, losses and other items, net

1

489

5,043

14,400

19,933

2,276

45

233

2,554

(95.4%)

(4,810)

Total operating expenses

68,419

78,545

93,394

122,690

363,048

94,460

98,956

105,736

299,152

13.2%

12,342

 
Loss from operations

(29,602)

(38,199)

(48,211)

(82,134)

(198,146)

(48,375)

(50,273)

(41,485)

(140,133)

14.0%

6,726

% Margin

-47.4%

-58.9%

-60.2%

-104.9%

-69.4%

-58.6%

-55.8%

-40.6%

-51.0%

 
Total other income (expense)

356

(281)

10,404

8,311

18,790

5,882

4,780

3,158

13,820

(69.6%)

(7,246)

 
Loss from continuing operations before income taxes

(29,246)

(38,480)

(37,807)

(73,823)

(179,356)

(42,493)

(45,493)

(38,327)

(126,313)

(1.4%)

(520)

 
Income taxes (benefit)

(1,428)

2,700

(22,546)

(24,135)

(45,409)

(353)

(5,291)

(287)

(5,931)

98.7%

22,259

 
Net loss from continuing operations

(27,818)

(41,180)

(15,261)

(49,688)

(133,947)

(42,140)

(40,202)

(38,040)

(120,382)

(149.3%)

(22,779)

 
Earnings from discontinued operations, net of tax

24,803

61,803

1,071,661

4,227

1,162,494

-

-

-

-

(100.0%)

(1,071,661)

 
Net earnings (loss)

(3,015)

20,623

1,056,400

(45,461)

1,028,547

(42,140)

(40,202)

(38,040)

(120,382)

(103.6%)

(1,094,440)

 
Diluted earnings (loss) per share

(0.04)

0.27

13.65

(0.67)

13.71

(0.61)

(0.59)

(0.56)

(1.77)

(104.1%)

(14.21)

 
Diluted loss per share continuing operations

(0.36)

(0.53)

(0.20)

(0.73)

(1.79)

(0.61)

(0.59)

(0.56)

(1.77)

(181.9%)

(0.36)

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

76,935

77,448

77,398

68,299

75,020

68,906

67,684

67,473

68,021

Diluted shares

76,935

77,448

77,398

68,299

75,020

68,906

67,684

67,473

68,021

LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES

RECONCILIATION OF GAAP TO NON-GAAP EPS (1)

(Unaudited)

(Dollars in thousands, except per share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

06/30/18

09/30/18

12/31/18

03/31/19

FY2019

 

06/30/19

09/30/19

12/31/19

YTD FY2020

 
 
Loss from continuing operations before income taxes

(29,246)

(38,480)

(37,807)

(73,823)

(179,356)

(42,493)

(45,493)

(38,327)

(126,313)

Income taxes (benefit)

(1,428)

2,700

(22,546)

(24,135)

(45,409)

(353)

(5,291)

(287)

(5,931)

Net loss from continuing operations

(27,818)

(41,180)

(15,261)

(49,688)

(133,947)

(42,140)

(40,202)

(38,040)

(120,382)

 
Earnings from discontinued operations, net of tax

24,803

61,803

1,071,661

4,227

1,162,494

-

-

-

-

 
Net earnings (loss)

(3,015)

20,623

1,056,400

(45,461)

1,028,547

(42,140)

(40,202)

(38,040)

(120,382)

 
Earnings (loss) per share:
Basic

(0.04)

0.27

13.65

(0.67)

13.71

(0.61)

(0.59)

(0.56)

(1.77)

Diluted

(0.04)

0.27

13.65

(0.67)

13.71

(0.61)

(0.59)

(0.56)

(1.77)

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

5,970

3,548

3,359

2,981

15,858

3,123

5,369

5,369

13,861

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

17,798

17,667

26,082

41,175

102,722

18,630

23,354

30,295

72,279

Accelerated depreciation (cost of revenue and operating expenses)

-

-

1,959

1,853

3,812

1,906

1,663

-

3,569

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

1

489

5,043

14,400

19,933

2,276

45

233

2,554

Separation and transformation costs (general and administrative)

-

2,122

700

(705)

2,117

-

-

-

-

Total excluded items, continuing operations

23,769

23,826

37,143

59,704

144,442

25,935

30,431

35,897

92,263

 
Loss from continuing operations before income taxes and excluding items

(5,477)

(14,654)

(664)

(14,119)

(34,914)

(16,558)

(15,062)

(2,430)

(34,050)

Income taxes (benefit)

(1,078)

(3,790)

(2,941)

(5,155)

(12,964)

(216)

190

(227)

(253)

Non-GAAP net earnings (loss) from continuing operations

(4,399)

(10,864)

2,277

(8,964)

(21,950)

(16,342)

(15,252)

(2,203)

(33,797)

 
Non-GAAP earnings (loss) per share from continuing operations:
Basic

(0.06)

(0.14)

0.03

(0.13)

(0.29)

(0.24)

(0.23)

(0.03)

(0.50)

Diluted

(0.06)

(0.14)

0.03

(0.13)

(0.29)

(0.24)

(0.23)

(0.03)

(0.50)

 
Basic weighted average shares

76,935

77,448

77,398

68,299

75,020

68,906

67,684

67,473

68,021

Diluted weighted average shares

76,935

77,448

80,674

68,299

75,020

68,906

67,684

67,473

68,021

 
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)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

06/30/18

09/30/18

12/31/18

03/31/19

FY2019

 

06/30/19

09/30/19

12/31/19

FY2020

 
Expenses, continuing operations:
Cost of revenue

23,654

24,466

34,838

37,760

120,718

36,426

41,460

37,966

115,852

Research and development

16,970

16,940

20,469

31,318

85,697

23,722

26,445

27,403

77,570

Sales and marketing

33,323

35,940

40,054

49,223

158,540

43,144

45,204

51,993

140,341

General and administrative

18,125

25,176

27,828

27,749

98,878

25,318

27,262

26,107

78,687

Gains, losses and other items, net

1

489

5,043

14,400

19,933

2,276

45

233

2,554

 
Gross profit, continuing operations:

38,817

40,346

45,183

40,556

164,902

46,085

48,683

64,251

159,019

% Gross margin

62.1%

62.3%

56.5%

51.8%

57.7%

55.9%

54.0%

62.9%

57.9%

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

5,970

3,548

3,359

2,981

15,858

3,123

5,369

5,369

13,861

Non-cash stock compensation (cost of revenue)

711

782

1,052

2,163

4,708

755

1,060

1,028

2,843

Non-cash stock compensation (research and development)

4,342

3,745

5,945

14,193

28,225

4,451

6,346

6,462

17,259

Non-cash stock compensation (sales and marketing)

9,920

9,854

9,460

14,736

43,970

8,920

9,758

15,670

34,348

Non-cash stock compensation (general and administrative)

2,824

3,286

9,625

10,083

25,818

4,504

6,190

7,135

17,829

Accelerated depreciation (cost of revenue)

-

-

1,527

1,445

2,972

1,487

1,245

-

2,732

Accelerated depreciation (general and administrative)

-

-

432

408

840

419

418

-

837

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

1

489

5,043

14,400

19,933

2,276

45

233

2,554

Separation and transformation costs (general and administrative)

-

2,122

700

(705)

2,117

-

-

-

-

Total excluded items

23,769

23,826

37,143

59,704

144,442

25,935

30,431

35,897

92,263

 
Expenses, continued operations excluding items:
Cost of revenue

16,972

20,136

28,900

31,171

97,179

31,061

33,786

31,569

96,416

Research and development

12,628

13,195

14,524

17,125

57,472

19,271

20,099

20,941

60,311

Sales and marketing

23,403

26,086

30,594

34,487

114,570

34,224

35,446

36,323

105,993

General and administrative

15,301

19,768

17,071

17,963

70,103

20,395

20,654

18,972

60,021

Gains, losses and other items, net

-

-

-

-

-

-

-

-

-

 
Gross profit, continuing operations excluding items:

45,499

44,676

51,121

47,145

188,441

51,450

56,357

70,648

178,455

% Gross margin

72.8%

68.9%

63.9%

60.2%

66.0%

62.4%

62.5%

69.1%

64.9%

(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 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 LOSS GUIDANCE (1)

(Unaudited)

(Dollars in thousands)

 

 

 

 

 

For the year ending

 

March 31, 2020

 

 

 

 

 

Low Range

 

High Range

 
Revenues

$ 376,000

$ 381,000

 
GAAP loss from operations

(186,000)

(184,000)

 
Excluded items:
Purchased intangible asset amortization

19,000

19,000

Accelerated depreciation

4,000

4,000

Non-cash stock compensation

97,000

97,000

Gains, losses and other items, net

3,000

3,000

Total excluded items

123,000

123,000

 
Non-GAAP loss from operations

$ (63,000)

$ (61,000)

(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 2020 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 per share, income 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.

Separation and transformation costs: In the prior year, 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. Our criteria for excluding separation and 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 believe excluding these items from our non-GAAP financial measures is useful for investors and provides meaningful supplemental information.

Accelerated depreciation: In the current year we are excluding depreciation costs associated with the reduced useful life of certain IT equipment in connection with the Company's migration to a cloud-based data center solution. This migration is part of our AMS separation strategy. These costs are excluded from our non-GAAP results because of the short-term nature of the incremental expenses and such amounts are not used by us to assess the core profitability of our business operations.

Other key metrics may be defined as:

Subscription net retention: The current period subscription revenue (net) from customers who have been on the platform for one year or more, divided by the prior year quarter subscription revenue (net), inclusive of upsell, churn and downsell.

Platform net retention: The current period subscription and marketplace revenue (net) from customers who have been on the platform for one year or more, divided by the prior year quarter subscription and marketplace revenue (net), inclusive of upsell, churn and downsell.

Annualized recurring revenue (ARR): The ending MRR (last month of quarter), annualized. Recurring revenue is fixed and contracted subscription revenue and does not include any variable or non-recurring revenue amounts.

Our non-GAAP financial schedules are:

Non-GAAP EPS, Non-GAAP Income from Operations, and Non-GAAP Expenses and Gross Profit: Our Non-GAAP earnings per share, Non-GAAP income from operations, and Non-GAAP expenses and Gross profit 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.

LiveRamp? Investor Relations
Lauren Dillard
Investor.Relations@LiveRamp.com
ERAMP

Source: LiveRamp, Inc.