LiveRamp Announces Second Quarter Results

Rhea-AI Summary

LiveRamp reported Q2 fiscal 2023 revenue of $147 million, up 16%, with subscription revenue at $120 million, rising 14%. The GAAP operating loss was $29 million compared to $6 million last year. Non-GAAP operating income improved to $17 million. Share repurchases totaled $100 million this fiscal year. The company raised its fiscal 2023 revenue guidance to between $595 million and $600 million, reflecting a 13% increase year-over-year. The non-GAAP operating income guidance is now $60 million.

Positive

• Total revenue increased by 16% to $147 million.
• Subscription revenue rose by 14% to $120 million, accounting for 81% of total revenue.
• Non-GAAP operating income guidance raised to $60 million, a growth of over 40% year-on-year.
• Customer count increased to 920, reflecting a strong growth trajectory.

Negative

• GAAP operating loss widened to $29 million from $6 million a year ago.
• GAAP loss per share was $0.45, indicating a decline in profitability.

Total Revenue Up 16% and Subscription Revenue Up 14%

Raising FY23 Operating Income Guidance

$100 Million of Stock Repurchased Fiscal Year to Date

SAN FRANCISCO--(BUSINESS WIRE)-- LiveRamp^® (NYSE: RAMP), the leading global data enablement platform, today announced its financial results for the quarter ended September 30, 2022.

Q2 Financial Highlights¹

• Total revenue was $147 million, up 16%.
• Subscription revenue was $120 million, up 14%, and accounted for 81% of total revenue.
• Marketplace & Other revenue was $27 million, up 25%.
• GAAP gross profit was $105 million, up 14%. GAAP gross margin of 71% contracted by 1 percentage point. Non-GAAP gross profit was $111 million, up 13%. Non-GAAP gross margin of 75% contracted by 2 percentage points.
• GAAP operating loss was $29 million compared to $6 million in the prior year period. Non-GAAP operating income was $17 million compared to $18 million in the prior year period.
• GAAP loss per share was $0.45, and non-GAAP earnings per share were $0.22.
• Net cash provided by operating activities was $21 million compared to $11 million in the prior year period.
• During the quarter, the Company repurchased approximately 1.7 million shares for $40 million under its current share repurchase program. Fiscal year to date the Company has repurchased approximately 3.8 million shares for $100 million. Since inception of the program in August 2011, the Company has returned approximately $1.3 billion in capital to shareholders.

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

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

“Despite challenging macroeconomic conditions, we delivered healthy second quarter results, with 16% revenue growth and strong free cash flow,” said LiveRamp CEO Scott Howe. “Our second quarter results demonstrate the vital role LiveRamp plays for our customers. We continue to lead the industry in identity resolution and data collaboration through our Safe Haven^® platform.”

“In this period of uncertainty, we’ve tightened our belts,” added President and CFO Warren Jenson. “As a result, we’re increasing our FY23 non-GAAP operating income guidance to approximately $60 million, representing growth of more than 40% year-on-year.”

GAAP and Non-GAAP Results

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

	Q2 Fiscal 2023			Q2 Fiscal 2022
	Results			Results
	GAAP	Non-GAAP		GAAP	Non-GAAP
Subscription revenue	$120	—		$105	—
YoY change %	14%			23%
Marketplace & other revenue	$27	—		$22	—
YoY change %	25%			16%
Total revenue	$147	—		$127	—
YoY change %	16%			22%
Gross profit	$105	$111		$92	$98
% Gross margin	71%	75%		72%	77%
YoY change, pts	(1) pt	(2) pts		6 pts	5 pts
Operating income (loss)	($29)	$17		($6)	$18
% Operating margin	(20%)	12%		(5%)	14%
YoY change, pts	(15) pts	(2) pts		21 pts	13 pts
Net earnings (loss)	($30)	$15		($6)	$18
Earnings (loss) per share	($0.45)	$0.22		($0.09)	$0.26
Shares to Calculate EPS	67.1	67.6		68.0	69.3
YoY change %	(1%)	(3%)		3%	1%
Net operating cash flow	$21	—		$11	—
Free cash flow to equity	—	$19		—	$10
Totals may not sum due to rounding.

A detailed discussion of our non-GAAP financial measures and a reconciliation between GAAP and non-GAAP results is provided in the schedules attached to this press release.

Additional Business Highlights & Metrics

• The Company’s Authenticated Traffic Solution (ATS) has reached global scale. There are currently more than 125 supply-side platforms (SSPs) and demand-side platforms (DSPs) live or committed to bid on RampID™ and ATS, including The Trade Desk, Amobee, Criteo, dataxu, and MediaMath. Further, in March 2022, LiveRamp announced an expanded partnership with The Trade Desk to power European Unified ID (EUID) via its ATS infrastructure.
• To date, over 1,500 publishers, representing more than 11,500 deployed domains, have integrated ATS worldwide, including Amazon Publisher Services, Microsoft, Hearst, CafeMedia, Leaf Group, Prisma Media and Burda.
• The Company recently announced an expanded partnership with Meta, enabling marketers to privately and securely use their first-party data to target, measure, and optimize campaigns to drive greater returns from their marketing investments -- all powered by LiveRamp's people-based, privacy-first identifier, RampID. LiveRamp's ATS is also now available for marketers to connect to Facebook's Conversions API (CAPI), a tool that creates, measures and optimizes advertising campaigns in flight.
• In September 2022, the Company announced that its identity solutions will be directly integrated with Genie, Salesforce’s new real-time customer data platform (CDP). Genie customers will have access to LiveRamp tools to build more accurate audiences powered by RampID™, the Company’s people-based identifier that provides access to 125+ DSPs/SSPs and our network of publishers.
• LiveRamp added 10 net new direct subscription customers in the second quarter. Customer count at quarter end was 920, up from 870 a year ago.
• LiveRamp has 92 customers whose subscription contracts exceed $1 million in annual revenue, up 15% compared to the prior year period.
• During the second quarter, subscription net retention was 106% and platform net retention was 108%.
• Current remaining performance obligations (CRPO), which is contracted and committed revenue expected to be recognized over the next 12 months, was $293 million, up 10% compared to the prior year period.
• During the second quarter, the Company announced it will reduce its real estate footprint resulting in restructuring charges of $12 million. Subsequent to the end of the second quarter, the Company announced it will reduce its current workforce by approximately 10% and further reduce its real estate footprint. Collectively, these actions are expected to result in annualized operating expense savings of $30 million to $35 million.

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 2023, LiveRamp expects to report:

• Revenue of approximately $158 million, an increase of 12% year-over-year
• GAAP operating loss of approximately $27 million
• Non-GAAP operating income of approximately $22 million

For fiscal 2023, LiveRamp raises its guidance and now expects to report:

• Revenue of between $595 million and $600 million, an increase of 13% year-over-year
• GAAP operating loss of approximately $102 million
• Non-GAAP operating income of approximately $60 million

Conference Call

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

About LiveRamp

LiveRamp is the leading data connectivity platform for the safe and effective use of data. Powered by core identity capabilities and an unparalleled network, LiveRamp enables companies and their partners to better connect, control, and activate data to transform customer experiences and generate more valuable business outcomes. LiveRamp’s fully interoperable and neutral infrastructure delivers end-to-end addressability for the world’s top brands, agencies, and publishers. For more information, visit www.LiveRamp.com.

Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, as amended (the “PSLRA”). These statements, which are not statements of historical fact, may contain estimates, assumptions, projections and/or expectations regarding the Company’s financial position, results of operations for fiscal 2023 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 the ongoing COVID-19 pandemic, rising interest rates, cost increases and general inflationary pressure and the associated impacts on our suppliers, customers and partners; the Company’s dependence upon customer renewals; new customer additions and upsell within our subscription business; our reliance upon partners, including data suppliers; competition; and attracting and retaining talent. Additional risks include maintaining our culture and our ability to innovate and evolve while operating in a hybrid work environment, with some employees working remotely at least some of the time within a rapidly changing industry, while also avoiding disruption from reductions in our current workforce as well as disruptions resulting from acquisition and divestiture activities. Our international operations are also subject to risks, including 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’ 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 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 2022 ended March 31, 2022, and LiveRamp's Quarterly Reports on Form 10-Q issued in fiscal year 2023.

The financial information set forth in this press release reflects estimates based on information available at this time.

LiveRamp assumes no obligation and does not currently intend to update these forward-looking statements.

To automatically receive LiveRamp financial news by email, please visit www.LiveRamp.com and subscribe to email alerts.

LiveRamp^Ⓡ, RampID^™, Abilitec^Ⓡ, Safe Haven^Ⓡ and all other LiveRamp marks contained herein are trademarks or service marks of LiveRamp, Inc. All other marks are the property of their respective owners.

LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except per share amounts)
		For the Three Months Ended
		September 30,
								$			%
		2022			2021			Variance			Variance
Revenues		147,099			127,290			19,809			15.6	%
Cost of revenue		42,304			35,079			7,225			20.6	%
Gross profit		104,795			92,211			12,584			13.6	%
% Gross margin		71.2	%		72.4	%
Operating expenses:
Research and development		46,139			35,788			10,351			28.9	%
Sales and marketing		45,949			39,509			6,440			16.3	%
General and administrative		28,718			23,078			5,640			24.4	%
Gains, losses and other items, net		13,111			18			13,093			n/a
Total operating expenses		133,917			98,393			35,524			36.1	%
Loss from operations		(29,122	)		(6,182	)		(22,940	)		(371.1	%)
% Margin		-19.8	%		-4.9	%
Total other income, net		2,248			150			2,098			1398.7	%
Loss before income taxes		(26,874	)		(6,032	)		(20,842	)		(345.5	%)
Income tax expense		3,562			399			3,163			792.7	%
Net loss		(30,436	)		(6,431	)		(24,005	)		(373.3	%)
Basic loss per share		(0.45	)		(0.09	)		(0.36	)		(379.9	%)
Diluted loss per share:		(0.45	)		(0.09	)		(0.36	)		(379.9	%)
Basic weighted average shares		67,096			68,042
Diluted weighted average shares		67,096			68,042

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,
								$			%
		2022			2021			Variance			Variance
Revenues		289,342			246,328			43,014			17.5	%
Cost of revenue		83,325			69,394			13,931			20.1	%
Gross profit		206,017			176,934			29,083			16.4	%
% Gross margin		71.2	%		71.8	%
Operating expenses:
Research and development		93,800			70,564			23,236			32.9	%
Sales and marketing		97,229			81,488			15,741			19.3	%
General and administrative		55,862			47,369			8,493			17.9	%
Gains, losses and other items, net		13,850			1,296			12,554			968.7	%
Total operating expenses		260,741			200,717			60,024			29.9	%
Loss from operations		(54,724	)		(23,783	)		(30,941	)		(130.1	%)
% Margin		-18.9	%		-9.7	%
Total other income, net		2,947			30,751			(27,804	)		(90.4	%)
Income (loss) before income taxes		(51,777	)		6,968			(58,745	)		(843.1	%)
Income tax expense (benefit)		5,877			(3,966	)		9,843			248.2	%
Net earnings (loss)		(57,654	)		10,934			(68,588	)		(627.3	%)
Basic earnings (loss) per share		(0.85	)		0.16			(1.01	)		(630.7	%)
Diluted earnings (loss) per share:		(0.85	)		0.16			(1.01	)		(640.7	%)
Basic weighted average shares		67,750			68,185
Diluted weighted average shares		67,750			69,473

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,
	2022			2021			2022			2021
Income (loss) before income taxes	(26,874	)		(6,032	)		(51,777	)		6,968
Income tax expense (benefit)	3,562			399			5,877			(3,966	)
Net earnings (loss)	(30,436	)		(6,431	)		(57,654	)		10,934
Earnings (loss per share):
Basic	(0.45	)		(0.09	)		(0.85	)		0.16
Diluted	(0.45	)		(0.09	)		(0.85	)		0.16
Excluded items:
Purchased intangible asset amortization (cost of revenue)	,637			4,612			9,280			9,257
Non-cash stock compensation (cost of revenue and operating expenses)	27,293			19,221			51,518			37,717
Transformation costs (general and administrative)	1,250			-			1,250			-
Restructuring and merger charges (gains, losses, and other)	13,111			18			13,850			1,296
Gain on retained profits interest (other income)	-			-			-			(30,052	)
Total excluded items	46,291			23,851			75,898			18,218
Income before income taxes and excluding items	19,417			17,819			24,121			25,186
Income tax expense (benefit) (2)	4,557			(12	)		5,794			853
Non-GAAP net earnings	14,860			17,831			18,327			24,333
Non-GAAP earnings per share:
Basic	0.22			0.26			0.27			0.36
Diluted	0.22			0.26			0.27			0.35
Basic weighted average shares	67,096			68,042			67,750			68,185
Diluted weighted average shares	67,568			69,333			68,384			69,473
(1) This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our condensed consolidated financial statements prepared in accordance with GAAP. For a detailed explanation of the adjustments made to comparable GAAP measures, the reasons why management uses these measures and the material limitations on the usefulness of these measures, please see Appendix A.
(2) Income taxes were calculated by applying the estimated annual effective tax rate to year-to-date pretax income or loss and adjusting for discrete tax items in the period. The differences between our GAAP and non-GAAP effective tax rates were primarily due to the net tax effects of the excluded items, coupled with larger pre-tax losses for GAAP purposes versus smaller pre-tax losses or income for non-GAAP purposes

LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP INCOME (LOSS) FROM OPERATIONS (1)
(Unaudited)
(Dollars in thousands)
		For the Three Months Ended						For the Six Months Ended
		September 30,						September 30,
		2022			2021			2022			2021
Loss from operations		(29,122	)		(6,182	)		(54,724	)		(23,783	)
Excluded items:
Purchased intangible asset amortization (cost of revenue)		4,637			4,612			9,280			9,257
Non-cash stock compensation (cost of revenue and operating expenses)		27,293			19,221			51,518			37,717
Transformation costs (general and administrative)		1,250			-			1,250			-
Restructuring and merger charges (gains, losses, and other)		13,111			18			13,850			1,296
Total excluded items		46,291			23,851			75,898			48,270
Income from operations before excluded items		17,169			17,669			21,174			24,487
(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 Six Months Ended
		September 30,						September 30,
		2022			2021			2022			2021
Net earnings (loss)		(30,436	)		(6,431	)		(57,654	)		10,934
Income tax expense (benefit)		3,562			399			5,877			(3,966	)
Other income		(2,248	)		(150	)		(2,947	)		(30,751	)
Income (loss) from operations		(29,122	)		(6,182	)		(54,724	)		(23,783	)
Depreciation and amortization		5,689			5,819			11,430			12,404
EBITDA		(23,433	)		(363	)		(43,294	)		(11,379	)
Other adjustments:
Non-cash stock compensation (cost of revenue and operating expenses)		27,293			19,221			51,518			37,717
Transformation costs (general and administrative)		1,250			-			1,250			-
Restructuring and merger charges (gains, losses, and other)		13,111			18			13,850			1,296
Other adjustments		41,654			19,239			66,618			39,013
Adjusted EBITDA		18,221			18,876			23,324			27,634
(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)
		September 30,			March 31,			$			%
		2022			2022			Variance			Variance
Assets
Current assets:
Cash and cash equivalents		485,602			600,162			(114,560	)		(19.1	%)
Trade accounts receivable, net		157,711			148,343			9,368			6.3	%
Refundable income taxes		29,971			30,354			(383	)		(1.3	%)
Other current assets		31,512			36,975			(5,463	)		(14.8	%)
Total current assets		704,796			815,834			(111,038	)		(13.6	%)
Property and equipment		45,614			45,001			613			1.4	%
Less - accumulated depreciation and amortization		34,573			33,470			1,103			3.3	%
Property and equipment, net		11,041			11,531			(490	)		(4.2	%)
Intangible assets, net		17,394			26,718			(9,324	)		(34.9	%)
Goodwill		362,517			363,845			(1,328	)		(0.4	%)
Deferred commissions, net		31,514			30,594			920			3.0	%
Other assets, net		61,237			85,214			(23,977	)		(28.1	%)
		1,188,499			1,333,736			(145,237	)		(10.9	%)
Liabilities and Stockholders' Equity
Current liabilities:
Trade accounts payable		70,312			83,197			(12,885	)		(15.5	%)
Accrued payroll and related expenses		22,822			39,188			(16,366	)		(41.8	%)
Other accrued expenses		40,667			46,067			(5,400	)		(11.7	%)
Deferred revenue		16,397			16,114			283			1.8	%
Total current liabilities		150,198			184,566			(34,368	)		(18.6	%)
Other liabilities		78,232			86,110			(7,878	)		(9.1	%)
Stockholders' equity:
Preferred stock		-			-			-			n/a
Common stock		15,148			14,984			164			1.1	%
Additional paid-in capital		1,780,803			1,721,118			59,685			3.5	%
Retained earnings		1,363,339			1,420,993			(57,654	)		(4.1	%)
Accumulated other comprehensive income		1,925			5,730			(3,805	)		(66.4	%)
Treasury stock, at cost		(2,201,146	)		(2,099,765	)		(101,381	)		(4.8	%)
Total stockholders' equity		960,069			1,063,060			(102,991	)		(9.7	%)
		1,188,499			1,333,736			(145,237	)		(10.9	%)

LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
	For the Three Months Ended
	September 30,
	2022			2021
Cash flows from operating activities:
Net loss	(30,436	)		(6,431	)
Non-cash operating activities:
Depreciation and amortization	5,689			5,819
Loss (gain) on disposal or impairment of assets	(192	)		29
Lease impairments	12,225			-
Provision for doubtful accounts	118			327
Deferred income taxes	31			141
Non-cash stock compensation expense	27,293			19,221
Changes in operating assets and liabilities:
Accounts receivable	(3,716	)		(11,024	)
Deferred commissions	(551	)		(1,986	)
Other assets	4,608			4,072
Accounts payable and other liabilities	5,080			447
Income taxes	(618	)		368
Deferred revenue	1,844			(82	)
Net cash provided by operating activities	21,375			10,901
Cash flows from investing activities:
Capital expenditures	(2,673	)		(876	)
Proceeds from sale of strategic investment	400			-
Net cash used in investing activities	(2,273	)		(876	)
Cash flows from financing activities:
Proceeds related to the issuance of common stock under stock and employee benefit plans	2			997
Shares repurchased for tax withholdings upon vesting of stock-based awards	(708	)		(1,181	)
Acquisition of treasury stock	(40,038	)		(15,000	)
Net cash used in financing activities	(40,744	)		(15,184	)
Effect of exchange rate changes on cash	(1,010	)		(275	)
Net change in cash and cash equivalents	(22,652	)		(5,434	)
Cash and cash equivalents at beginning of period	508,254			549,755
Cash and cash equivalents at end of period	485,602			544,321
Supplemental cash flow information:
Cash paid (received) during the period for:
Income taxes	4,165			(118	)
Operating lease assets obtained in exchange for operating lease liabilities	-			35,691
Purchases of property, plant, & equipment, net remaining unpaid at end of period	187			195

LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
	For the Six Months Ended
	September 30,
	2022			2021
Cash flows from operating activities:
Net earnings (loss)	(57,654	)		10,934
Non-cash operating activities:
Depreciation and amortization	11,430			12,404
Loss on disposal or impairment of assets	(197	)		142
Lease impairments	12,225			-
Gain on distribution from retained profits interest	-			(30,052	)
Provision for doubtful accounts	1,115			1,282
Deferred income taxes	218			(771	)
Non-cash stock compensation expense	51,518			37,717
Changes in operating assets and liabilities:
Accounts receivable	(11,449	)		(18,073	)
Deferred commissions	(920	)		(5,369	)
Other assets	8,960			23,408
Accounts payable and other liabilities	(29,477	)		(36,829	)
Income taxes	1,513			(632	)
Deferred revenue	724			(501	)
Net cash used in operating activities	(11,994	)		(6,340	)
Cash flows from investing activities:
Capital expenditures	(4,414	)		(1,303	)
Proceeds from sale of strategic investment	400			-
Distribution from retained profits interest	-			31,000
Cash paid in acquisition, net of cash received	-			(8,368	)
Net cash provided by (used in) investing activities	(4,014	)		21,329
Cash flows from financing activities:
Proceeds related to the issuance of common stock under stock and employee benefit plans	4,591			4,278
Shares repurchased for tax withholdings upon vesting of stock-based awards	(1,290	)		(12,542	)
Acquisition of treasury stock	(100,091	)		(44,077	)
Net cash used in financing activities	(96,790	)		(52,341	)
Effect of exchange rate changes on cash	(1,762	)		(14	)
Net change in cash and cash equivalents	(114,560	)		(37,366	)
Cash and cash equivalents at beginning of period	600,162			581,687
Cash and cash equivalents at end of period	485,602			544,321
Supplemental cash flow information:
Cash paid (received) during the period for:
Income taxes	4,169			(2,569	)
Operating lease assets obtained in exchange for operating lease liabilities	-			35,691
Purchases of property, plant, & equipment, net remaining unpaid at end of period	187			195

LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
CALCULATION OF FREE CASH FLOW TO EQUITY (1)
(Unaudited)
(Dollars in thousands)
		06/30/21	09/30/21	12/31/21	03/31/22	FY2022		06/30/22	09/30/22	FY2023
Net Cash Provided by (Used in) Operating Activities		(17,241)	10,901	25,473	58,944	78,077		(33,369)	21,375	(11,994)
Less:
	Capital expenditures	(427)	(876)	(1,316)	(1,880)	(4,499)		(1,741)	(2,673)	(4,414)
Free Cash Flow to Equity		(17,668)	10,025	24,157	57,064	73,578		(35,110)	18,702	(16,408)
(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)
																			FY23 to FY22
	06/30/21		09/30/21		12/31/21		03/31/22		FY2022			06/30/22		09/30/22		FY2023			%		$
Revenues	119,038		127,290		140,604		141,725		528,657			142,243		147,099		289,342			15.6	%	19,809
Cost of revenue	34,315		35,079		38,557		39,476		147,427			41,021		42,304		83,325			20.6	%	7,225
Gross profit	84,723		92,211		102,047		102,249		381,230			101,222		104,795		206,017			13.6	%	12,584
% Gross margin	71.2	%	72.4	%	72.6	%	72.1	%	72.1	%		71.2	%	71.2	%	71.2	%
Operating expenses
Research and development	34,776		35,788		41,870		45,501		157,935			47,661		46,139		93,800			28.9	%	10,351
Sales and marketing	41,979		39,509		46,324		54,951		182,763			51,280		45,949		97,229			16.3	%	6,440
General and administrative	24,291		23,078		27,639		29,583		104,591			27,144		28,718		55,862			24.4	%	5,640
Gains, losses and other items, net	1,278		18		-		183		1,479			739		13,111		13,850			n/a		13,093
Total operating expenses	102,324		98,393		115,833		130,218		446,768			126,824		133,917		260,741			36.1	%	35,524
Loss from operations	(17,601	)	(6,182	)	(13,786	)	(27,969	)	(65,538	)		(25,602	)	(29,122	)	(54,724	)		(371.1	%)	(22,940	)
% Margin	-14.8	%	-4.9	%	-9.8	%	-19.7	%	-12.4	%		-18.0	%	-19.8	%	-18.9	%
Total other income (expense), net	30,601		150		(241	)	(47	)	30,463			699		2,248		2,947			1398.7	%	2,098
Loss before income taxes	13,000		(6,032	)	(14,027	)	(28,016	)	(35,075	)		(24,903	)	(26,874	)	(51,777	)		(345.5	%)	(20,842	)
Income taxes expense (benefit)	(4,365	)	399		1,348		1,376		(1,242	)		2,315		3,562		5,877			792.7	%	3,163
Net earnings (loss)	17,365		(6,431	)	(15,375	)	(29,392	)	(33,833	)		(27,218	)	(30,436	)	(57,654	)		(373.3	%)	(24,005	)
Diluted earnings (loss) per share	0.25		(0.09	)	(0.23	)	(0.43	)	(0.50	)		(0.40	)	(0.45	)	(0.85	)		(379.9	%)	(0.36	)
Some earnings (loss) per share amounts may not add due to rounding.

LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP EPS (1)
(Unaudited)
(Dollars in thousands, except per share amounts)
				06/30/21		09/30/21		12/31/21		03/31/22		FY2022			06/30/22		09/30/22		FY 2023
Income (loss) before income taxes				13,000		(6,032	)	(14,027	)	(28,016	)	(35,075	)		(24,903	)	(26,874	)	(51,777	)
Income taxes (benefit)				(4,365	)	399		1,348		1,376		(1,242	)		2,315		3,562		5,877
Net earnings (loss)				17,365		(6,431	)	(15,375	)	(29,392	)	(33,833	)		(27,218	)	(30,436	)	(57,654	)
Earnings (loss) per share:
Basic				0.25		(0.09	)	(0.23	)	(0.43	)	(0.50	)		(0.40	)	(0.45	)	(0.85	)
Diluted				0.25		(0.09	)	(0.23	)	(0.43	)	(0.50	)		(0.40	)	(0.45	)	(0.84	)
Excluded items:
Purchased intangible asset amortization (cost of revenue)				4,645		4,612		4,647		4,807		18,711			4,643		4,637		9,280
Non-cash stock compensation (cost of revenue and operating expenses)				18,496		19,221		23,758		25,782		87,257			24,225		27,293		51,518
Restructuring and merger charges (gains, losses, and other)				1,278		18		-		183		1,479			739		13,111		13,850
Transformation costs (general and administrative)				-		-		-		-		-			-		1,250		1,250
Gain on retained profits interest (other income)				(30,052	)	-		(183	)	-		(30,235	)		-		-		-
Total excluded items				(5,633	)	23,851		28,222		30,772		77,212			29,607		46,291		75,898
Income before income taxes and excluding items				7,367		17,819		14,195		2,756		42,137			4,704		19,417		24,121
Income taxes expense (benefit)				865		(12	)	4,271		3,391		8,515			1,237		4,557		5,794
Non-GAAP net earnings (loss)				6,502		17,831		9,924		(635	)	33,622			3,467		14,860		18,327
Non-GAAP earnings (loss) per share:
Basic				0.10		0.26		0.15		(0.01	)	0.49			0.05		0.22		0.27
Diluted				0.09		0.26		0.14		(0.01	)	0.48			0.05		0.22		0.27
Basic weighted average shares				68,328		68,042		68,190		68,283		68,211			68,403		67,096		67,750
Diluted weighted average shares				69,605		69,333		69,938		68,283		69,560			69,195		67,568		68,384
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)
			06/30/21		09/30/21		12/31/21		03/31/22		FY2022			06/30/22		09/30/22		FY2023
Expenses:
Cost of revenue			34,315		35,079		38,557		39,476		147,427			41,021		42,304		83,325
Research and development			34,776		35,788		41,870		45,501		157,935			47,661		46,139		93,800
Sales and marketing			41,979		39,509		46,324		54,951		182,763			51,280		45,949		97,229
General and administrative			24,291		23,078		27,639		29,583		104,591			27,144		28,718		55,862
Gains, losses and other items, net			1,278		18		0		183		1,479			739		13,111		13,850
Gross profit:			84,723		92,211		102,047		102,249		381,230			101,222		104,795		206,017
% Gross margin			71.2	%	72.4	%	72.6	%	72.1	%	72.1	%		71.2	%	71.2	%	71.2	%
Excluded items:
Purchased intangible asset amortization (cost of revenue)			4,645		4,612		4,647		4,807		18,711			4,643		4,637		9,280
Non-cash stock compensation (cost of revenue)			790		948		1,168		1,205		4,111			1,163		1,293		2,456
Non-cash stock compensation (research and development)			5,348		7,184		9,264		10,316		32,112			11,656		12,360		24,016
Non-cash stock compensation (sales and marketing)			6,793		6,749		7,329		7,715		28,586			5,884		6,116		12,000
Non-cash stock compensation (general and administrative)			5,565		4,340		5,997		6,546		22,448			5,522		7,524		13,046
Restructuring and merger charges (gains, losses, and other)			1,278		18		-		183		1,479			739		13,111		13,850
Transformation costs (general and administrative)			-		-		-		-		-			-		1,250		1,250
Gain on retained profits interest (other income)			(30,052	)	-		(183	)	-		(30,235	)		-		-		-
Total excluded items			(5,633	)	23,851		28,222		30,772		77,212			29,607		46,291		75,898
Expenses, excluding items:
Cost of revenue			28,880		29,519		32,742		33,464		124,605			35,215		36,374		71,589
Research and development			29,428		28,604		32,606		35,185		125,823			36,005		33,779		69,784
Sales and marketing			35,186		32,760		38,995		47,236		154,177			45,396		39,833		85,229
General and administrative			18,726		18,738		21,642		23,037		82,143			21,622		19,944		41,566
Gains, losses and other items, net			-		-		-		-		-			-		-		-
Gross profit, excluding items:			90,158		97,771		107,862		108,261		404,052			107,028		110,725		217,753
% Gross margin			75.7	%	76.8	%	76.7	%	76.4	%	76.4	%		75.2	%	75.3	%	75.3	%
(1) This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our condensed consolidated financial statements prepared in accordance with GAAP. For a detailed explanation of the adjustments made to comparable GAAP measures, the reasons why management uses these measures, the usefulness of these measures and the material limitations on the usefulness of these measures, please see Appendix A.

LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP OPERATING INCOME (LOSS) GUIDANCE (1)
(Unaudited)
(Dollars in thousands)
			For the quarter ending				For the year ending
			December 31, 2022				March 31, 2023
GAAP loss from operations				(27,000	)			(102,000	)
Excluded items:
Purchased intangible asset amortization				4,000				17,000
Non-cash stock compensation				26,000				105,000
Restructuring costs				14,000				33,000
Transformation costs				5,000				7,000
Total excluded items				49,000				162,000
Non-GAAP income from operations			$	22,000			$	60,000
(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 2023 FINANCIAL RESULTS
EXPLANATION OF NON-GAAP MEASURES AND OTHER KEY METRICS

To supplement our financial results, we use non-GAAP measures which exclude certain acquisition related expenses, non-cash stock compensation and restructuring charges. We believe these measures are helpful in understanding our past performance and our future results. Our non-GAAP financial measures and schedules are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read only in conjunction with our consolidated GAAP financial statements. Our management regularly uses these non-GAAP financial measures internally to understand, manage and evaluate our business and to make operating decisions. These measures are among the primary factors management uses in planning for and forecasting future periods. Compensation of our executives is also based in part on the performance of our business based on these non-GAAP measures.

Our non-GAAP financial measures, including non-GAAP earnings (loss) per share, income (loss) from operations and adjusted EBITDA reflect adjustments based on the following items, as well as the related income tax effects when applicable:

Purchased intangible asset amortization: We incur amortization of purchased intangibles in connection with our acquisitions. Purchased intangibles include (i) developed technology, (ii) customer and publisher relationships, and (iii) trade names. We expect to amortize for accounting purposes the fair value of the purchased intangibles based on the pattern in which the economic benefits of the intangible assets will be consumed as revenue is generated. Although the intangible assets generate revenue for us, we exclude this item because this expense is non-cash in nature and because we believe the non-GAAP financial measures excluding this item provide meaningful supplemental information regarding our operational performance.

Non-cash stock compensation: Non-cash stock compensation consists of charges for associate restricted stock units, performance shares and stock options in accordance with current GAAP related to stock-based compensation including expense associated with stock-based compensation related to unvested options assumed in connection with our acquisitions. As we apply stock-based compensation standards, we believe that it is useful to investors to understand the impact of the application of these standards to our operational performance. Although stock-based compensation expense is calculated in accordance with current GAAP and constitutes an ongoing and recurring expense, such expense is excluded from non-GAAP results because it is not an expense that typically requires or will require cash settlement by us and because such expense is not used by us to assess the core profitability of our business operations.

Restructuring charges: During the past several years, we have initiated certain restructuring activities in order to align our costs in connection with both our operating plans and our business strategies based on then-current economic conditions. As a result, we recognized costs related to termination benefits for employees whose positions were eliminated, lease and other contract termination charges, and leasehold improvement write offs. These items, reported as gains, losses, and other items, net, are excluded from non-GAAP results because such amounts are not used by us to assess the core profitability of our business operations.

Transformation costs: In previous years, we incurred significant expenses to separate the financial statements of our operating segments, with particular focus on segment-level balance sheets, and to evaluate portfolio priorities. Our criteria for excluding transformation expenses from our non-GAAP measures is as follows: 1) projects are discrete in nature; 2) excluded expenses consist only of third-party consulting fees that we would not incur otherwise; and 3) we do not exclude employee related expenses or other costs associated with the ongoing operations of our business. We substantially completed those projects during the third quarter of fiscal year 2018. Beginning in the fourth quarter of fiscal 2018, and through most of fiscal 2019, we incurred transaction support expenses and system separation costs related to the Company's announced evaluation of strategic options for its Marketing Solutions (AMS) business. In the first and second quarters of fiscal 2021 in response to the potential COVID-19 pandemic impact on our business and again during fiscal 2023 in response to macroeconomic conditions, we incurred significant costs associated with the assessment of strategic and operating plans, including our long-term location strategy, and assistance in implementing the restructuring activities as a result of this assessment. Our criteria for excluding these costs are the same. We believe excluding these items from our non-GAAP financial measures is useful for investors and provides meaningful supplemental information.

Our non-GAAP financial schedules are:

Non-GAAP EPS, Non-GAAP Income from Operations, and Non-GAAP expenses: Our Non-GAAP earnings per share, Non-GAAP income from operations, and Non-GAAP expenses reflect adjustments as described above, as well as the related tax effects where applicable.

Adjusted EBITDA: Adjusted EBITDA is defined as net income from continuing operations before income taxes, other expenses, depreciation and amortization, and including adjustments as described above. We use Adjusted EBITDA to measure our performance from period to period both at the consolidated level as well as within our operating segments and to compare our results to those of our competitors. We believe that the inclusion of Adjusted EBITDA provides useful supplementary information to and facilitates analysis by investors in evaluating the Company's performance and trends. The presentation of Adjusted EBITDA is not meant to be considered in isolation or as an alternative to net earnings as an indicator of our performance.

Free Cash Flow to Equity: To supplement our statement of cash flows, we use a non-GAAP measure of cash flow to analyze cash flows generated from operations. Free cash flow to equity is defined as operating cash flow less cash used by investing activities (excluding the impact of cash paid in acquisitions), less required payments of debt, and excluding the impact of discontinued operations. Management believes that this measure of cash flow is meaningful since it represents the amount of money available from continuing operations for the Company's discretionary spending after funding all required obligations including scheduled debt payments. The presentation of non-GAAP free cash flow to equity is not meant to be considered in isolation or as an alternative to cash flows from operating activities as a measure of liquidity.

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LiveRamp Investor Relations

Investor.Relations@LiveRamp.com

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Source: LiveRamp

FAQ

What were the financial results of LiveRamp for Q2 fiscal 2023?

LiveRamp reported Q2 fiscal 2023 total revenue of $147 million, up 16%, with subscription revenue at $120 million, up 14%.

What is LiveRamp's updated revenue guidance for fiscal 2023?

LiveRamp raised its fiscal 2023 revenue guidance to between $595 million and $600 million, reflecting a 13% increase year-over-year.

What is the expected GAAP operating loss for LiveRamp in Q3 fiscal 2023?

LiveRamp expects a GAAP operating loss of approximately $27 million for Q3 fiscal 2023.

How many subscription customers does LiveRamp have as of Q2 2023?

As of Q2 2023, LiveRamp has 920 subscription customers, up from 870 a year ago.

What were the major highlights from LiveRamp's recent earnings call?

LiveRamp highlighted a 16% revenue growth, a GAAP operating loss of $29 million, and an increase in customer count to 920 during the earnings call.