LiveRamp Announces Strong Second Quarter Results and Raises Full Year Outlook

Rhea-AI Summary

LiveRamp (NYSE: RAMP) reported a strong financial performance for Q2 fiscal 2022, with total revenue increasing by 22% to $127 million. Subscription revenue rose by 23% to $105 million, constituting 83% of total revenue. GAAP gross margin expanded to 72%, while non-GAAP gross margin reached 77%. The company achieved a record operating performance, adding 15 new direct subscription customers, bringing the total to 870. LiveRamp’s outlook for fiscal 2022 has been raised, expecting revenue of $525 million and non-GAAP operating income of $40 million.

Positive

• Total revenue increased by 22% to $127 million.
• Subscription revenue grew by 23% to $105 million, making up 83% of total revenue.
• GAAP gross margin improved to 72%, up 6 percentage points year-over-year.
• Non-GAAP gross margin rose to 77%, up 5 percentage points year-over-year.
• Record operating performance with 80 customers generating over $1 million in annual revenue, a 29% increase.
• Current remaining performance obligations (CRPO) up 23% to $266 million.

Negative

• GAAP operating loss of $6 million, although improved from a $27 million loss the prior year.

Total Revenue Up 22% and Subscription Revenue Up 23%

GAAP Gross Margin of 72% and Non-GAAP Gross Margin of 77%

Record Operating Performance

Eighty $1 Million Customers – Largest Sequential Increase

SAN FRANCISCO--(BUSINESS WIRE)-- LiveRamp^® (NYSE: RAMP), the leading global data connectivity platform, today announced its financial results for the quarter ended September 30, 2021.

Second Quarter Financial Highlights

• Total revenue was $127 million, up 22% compared to the prior year period.

• Subscription revenue was $105 million, up 23% compared to the prior year period and contributed 83% of total revenue.

• Marketplace & Other revenue was $22 million, up 16% compared to the prior year period.

• GAAP gross profit was $92 million, up 32% compared to the prior year period. GAAP gross margin of 72% expanded 6 percentage points. Non-GAAP gross profit was $98 million, up 30% compared to the prior year period. Non-GAAP gross margin of 77% expanded 5 percentage points.

• GAAP operating loss was $6 million compared to a GAAP operating loss of $27 million in the prior year period. Non-GAAP operating income was $18 million compared to a non-GAAP operating income of $1 million in the prior year period.

• GAAP loss per share was $0.09, and non-GAAP earnings per share were $0.26.

• Net cash provided by operating activities was $11 million compared to $6 million in the prior year period.

• During the quarter, LiveRamp repurchased approximately 365 thousand shares for $15 million under the current share repurchase program. Since inception of the share repurchase program in August 2011, the Company has returned approximately $1.2 billion in capital to shareholders.

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

“LiveRamp is making it safe and easy for companies to use their data, and many of the world’s most successful companies are embracing LiveRamp,” said LiveRamp CEO Scott Howe. “You can see this in our results: top line growth accelerated, innovative new products such as Safe Haven^Ⓡ gained even greater adoption, and LiveRamp is well positioned for the future.”

“Q2 was another great quarter,” added LiveRamp President and CFO Warren Jenson. “Revenue growth accelerated, gross margin expanded, and we delivered a record operating performance. This is our sixth consecutive quarter of non-GAAP profitability. Given the strength of our performance, we are raising our top and bottom line guidance for the year.”

GAAP and Non-GAAP Results

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

		Q2 Fiscal 2022				Q2 Fiscal 2021
		Results				Results
		GAAP		Non-GAAP		GAAP		Non-GAAP
Subscription revenue		$105		—		$86		—
YoY change %		23%				19%
Marketplace & other revenue		$22		—		$19		—
YoY change %		16%				4%
Total revenue		$127		—		$105		—
YoY change %		22%				16%
Gross profit		$92		$98		$70		$75
% Gross margin		72%		77%		67%		72%
YoY change, pts		6 pts		5 pts		13 pts		9 pts
Operating income (loss)		($6)		$18		($27)		$1
% Operating margin		(5%)		14%		(26%)		1%
YoY change, pts		21 pts		13 pts		30 pts		23 pts
Net income (loss)		($6)		$18		($24)		$2
Earnings (loss) per share		($0.09)		$0.26		($0.36)		$0.03
Shares to Calculate EPS		68.0		69.3		66.0		68.8
YoY change %		3%		1%		(2%)		2%
Net operating cash flow		$11		—		$6		—
Free cash flow to equity		—		$10		—		$6
Totals may not sum due to rounding.

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

Additional Business Highlights & Metrics

• The Authenticated Traffic Solution (ATS) continues to experience strong global adoption. There are currently more than 55 supply-side platforms (SSPs) and 70 demand-side platforms (DSPs) live or committed to bid on RampID™ and ATS, including The Trade Desk, Amobee, Criteo, dataxu, and MediaMath. Lastly, more than 500 publishers, representing more than 8,000 publisher domains, are deployed with ATS.

• LiveRamp launched its enhanced TV platform with support from Innovid, E.W. Scripps Company, Publica, Philo, Plex, Univision and Dish. New capabilities enable marketers, programmers, and sell-side CTV platforms to more easily and effectively collaborate, activate, and quantify media campaigns in a coordinated way across all TV inventory: linear, streaming, and digital video.

• LiveRamp added 15 net new direct subscription customers in the second quarter. Customer count at quarter end was 870, up from 795 a year ago.

• LiveRamp has 80 customers whose subscription contracts exceed $1 million in annual revenue, up 29% compared to the prior year period. This represents LiveRamp’s largest sequential increase in $1 million customers.

• During the second quarter, subscription net retention was 108% and platform net retention was 109%.

• Current remaining performance obligations (CRPO), which is contracted and committed revenue expected to be recognized over the next 12 months, was $266 million, up 23% compared to the prior year period.

Financial Outlook

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

For the third quarter of fiscal 2022, LiveRamp expects to report:

• Revenue of approximately $139 million, an increase of 16% year-over-year
• GAAP operating loss of approximately $20 million
• Non-GAAP operating income of approximately $10 million

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

• Revenue of approximately $525 million, an increase of 19% year-over-year
• GAAP operating loss of approximately $70 million
• Non-GAAP operating income of approximately $40 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, market position, product development, growth opportunities, economic conditions, and other similar forecasts and statements of expectation. Forward-looking statements are often identified by words or phrases such as “anticipate,” “estimate,” “plan,” “expect,” “believe,” “intend,” “foresee,” or the negative of these terms or other similar variations thereof.

These forward-looking statements are not guarantees of future performance and are subject to a number of factors and uncertainties that could cause the Company’s actual results and experiences to differ materially from the anticipated results and expectations expressed in the forward-looking statements.

Among the factors that may cause actual results and expectations to differ from anticipated results and expectations expressed in forward-looking statements are uncertainties related to COVID-19 and the associated impact on our suppliers, customers and partners; the Company’s dependence upon customer renewals; new customer additions and upsell within our subscription business; our reliance upon partners, including data suppliers; competition; and attracting and retaining talent. Additional risks relate to maintaining our culture and our ability to innovate and evolve while working remotely and within a rapidly changing industry, while also avoiding disruption from acquisition and divestiture activities. Our international operations are also subject to risks that may harm the Company’s business. The risk of a significant breach of the confidentiality of the information or the security of our or our customers’, suppliers’, or other partners’ computer systems could be detrimental to our business, reputation and results of operations. Other business risks include unfavorable publicity and negative public perception about our industry; interruptions or delays in service from data center hosting vendors we rely upon; and our dependence on the continued availability of third-party data hosting and transmission services. Our clients’ ability to use data on our platform could be restricted if the industry’s use of third-party cookies and tracking technology declines due to technology platform changes, regulation or increased user controls. Changes in regulations relating to information collection and use represents a risk, as well as changes in tax laws and regulations that are applied to our customers which could cause enterprise software budget tightening. In addition, third parties may claim that we are infringing their intellectual property or may infringe our intellectual property which could result in competitive injury and / or the incurrence of significant costs and draining of our resources.

For a discussion of these and other risks and uncertainties, please refer to LiveRamp’s Annual Report on Form 10-K for our fiscal year 2021 ended March 31, 2021, and LiveRamp's Quarterly Reports on Form 10-Q issued in fiscal year 2022.

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

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

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

LiveRamp^Ⓡ, RampID^TM, 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,
								$		%
		2021			2020			Variance		Variance
Revenues		127,290			104,661			22,629		21.6	%
Cost of revenue		35,079			34,897			182		0.5	%
Gross profit		92,211			69,764			22,447		32.2	%
% Gross margin		72.4	%		66.7	%
Operating expenses:
Research and development		35,788			31,035			4,753		15.3	%
Sales and marketing		39,509			41,705			(2,196	)	(5.3	%)
General and administrative		23,078			24,495			(1,417	)	(5.8	%)
Gains, losses and other items, net		18			(619	)		637		102.9	%
Total operating expenses		98,393			96,616			1,777		1.8	%
Loss from operations		(6,182	)		(26,852	)		20,670		77.0	%
% Margin		-4.9	%		-25.7	%
Total other income (expense), net		150			(225	)		375		166.7	%
Loss from operations before income taxes		(6,032	)		(27,077	)		21,045		77.7	%
Income tax expense (benefit)		399			(3,109	)		3,508		112.8	%
Net loss		(6,431	)		(23,968	)		17,537		73.2	%
Basic loss per share		(0.09	)		(0.36	)		0.27		74.0	%
Diluted loss per share:		(0.09	)		(0.36	)		0.27		74.0	%
Basic weighted average shares		68,042			66,010
Diluted weighted average shares		68,042			66,010

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,
								$		%
		2021			2020			Variance		Variance
Revenues		246,328			204,098			42,230		20.7	%
Cost of revenue		69,394			69,362			32		0.0	%
Gross profit		176,934			134,736			42,198		31.3	%
% Gross margin		71.8	%		66.0	%
Operating expenses:
Research and development		70,564			58,024			12,540		21.6	%
Sales and marketing		81,488			80,332			1,156		1.4	%
General and administrative		47,369			47,863			(494	)	(1.0	%)
Gains, losses and other items, net		1,296			1,376			(80	)	(5.8	%)
Total operating expenses		200,717			187,595			13,122		7.0	%
Loss from operations		(23,783	)		(52,859	)		29,076		55.0	%
% Margin		-9.7	%		-25.9	%
Total other income, net		30,751			238			30,513		12820.6	%
Income (loss) from operations before income taxes		6,968			(52,621	)		59,589		113.2	%
Income tax benefit		(3,966	)		(6,925	)		2,959		42.7	%
Net earnings (loss)		10,934			(45,696	)		56,630		123.9	%
Basic earnings (loss) per share		0.16			(0.69	)		0.85		123.1	%
Diluted earnings (loss) per share:		0.16			(0.69	)		0.85		122.7	%
Basic weighted average shares		68,185			65,790
Diluted weighted average shares		69,473			65,790

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,
		2021			2020			2021			2020
Income (loss) from operations before income taxes		(6,032	)		(27,077	)		6,968			(52,621	)
Income tax expense (benefit)		399			(3,109	)		(3,966	)		(6,925	)
Net earnings (loss)		(6,431	)		(23,968	)		10,934			(45,696	)
Earnings (loss) per share:
Basic		(0.09	)		(0.36	)		0.16			(0.69	)
Diluted		(0.09	)		(0.36	)		0.16			(0.69	)
Excluded items:
Purchased intangible asset amortization (cost of revenue)		4,612			4,350			9,257			9,656
Non-cash stock compensation (cost of revenue and operating expenses)		19,221			24,204			37,717			40,689
Transformation costs (general and administrative)		-			258			-			3,863
Restructuring and merger charges (gains, losses, and other)		18			(619	)		1,296			1,376
Gain on retained profits interest (other income)		-			-			(30,052	)		-
Total excluded items		23,851			28,193			18,218			55,584
Income from operations before income taxes and excluding items		17,819			1,116			25,186			2,963
Income taxes (2)		(12	)		(1,291	)		853			(357	)
Non-GAAP net earnings		17,831			2,407			24,333			3,320
Non-GAAP earnings per share:
Basic		0.26			0.04			0.36			0.05
Diluted		0.26			0.03			0.35			0.05
Basic weighted average shares		68,042			66,010			68,185			65,790
Diluted weighted average shares		69,333			68,804			69,473			68,071
(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,
		2021			2020			2021			2020
Loss from operations		(6,182	)		(26,852	)		(23,783	)		(52,859	)
Excluded items:
Purchased intangible asset amortization (cost of revenue)		4,612			4,350			9,257			9,656
Non-cash stock compensation (cost of revenue and operating expenses)		19,221			24,204			37,717			40,689
Transformation costs (general and administrative)		-			258			-			3,863
Restructuring and merger charges (gains, losses, and other)		18			(619	)		1,296			1,376
Total excluded items		23,851			28,193			48,270			55,584
Income from operations before excluded items		17,669			1,341			24,487			2,725
(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,
		2021			2020			2021			2020
Net earnings (loss)		(6,431	)		(23,968	)		10,934			(45,696	)
Income tax expense (benefit)		399			(3,109	)		(3,966	)		(6,925	)
Total other income (expense), net		150			(225	)		30,751			238
Loss from operations		(6,182	)		(26,852	)		(23,783	)		(52,859	)
Depreciation and amortization		5,819			6,901			12,404			14,955
EBITDA		(363	)		(19,951	)		(11,379	)		(37,904	)
Other adjustments:
Non-cash stock compensation (cost of revenue and operating expenses)		19,221			24,204			37,717			40,689
Transformation costs (general and administrative)		-			258			-			3,863
Restructuring and merger charges (gains, losses, and other)		18			(619	)		1,296			1,376
Other adjustments		19,239			23,843			39,013			45,928
Adjusted EBITDA		18,876			3,892			27,634			8,024
(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,			$		%
		2021			2021			Variance		Variance
Assets
Current assets:
Cash and cash equivalents		535,590			572,787			(37,197	)	(6.5	%)
Restricted cash		8,731			8,900			(169	)	(1.9	%)
Trade accounts receivable, net		130,948			114,284			16,664		14.6	%
Refundable income taxes		64,079			65,692			(1,613	)	(2.5	%)
Other current assets		35,246			64,052			(28,806	)	(45.0	%)
Total current assets		774,594			825,715			(51,121	)	(6.2	%)
Property and equipment		45,214			44,284			930		2.1	%
Less - accumulated depreciation and amortization		34,916			32,327			2,589		8.0	%
Property and equipment, net		10,298			11,957			(1,659	)	(13.9	%)
Intangible assets, net		33,970			39,730			(5,760	)	(14.5	%)
Goodwill		363,895			357,446			6,449		1.8	%
Deferred commissions, net		27,988			22,619			5,369		23.7	%
Other assets, net		71,627			30,854			40,773		132.1	%
		1,282,372			1,288,321			(5,949	)	(0.5	%)
Liabilities and Stockholders' Equity
Current liabilities:
Trade accounts payable		44,267			39,955			4,312		10.8	%
Accrued payroll and related expenses		24,427			46,438			(22,011	)	(47.4	%)
Other accrued expenses		47,766			58,353			(10,587	)	(18.1	%)
Acquisition escrow payable		8,731			8,900			(169.00	)	(1.9	%)
Deferred revenue		11,058			11,603			(545	)	(4.7	%)
Total current liabilities		136,249			165,249			(29,000	)	(17.5	%)
Other liabilities		73,176			42,389			30,787		72.6	%
Stockholders' equity:
Preferred stock		-			-			-		n/a
Common stock		14,887			14,781			106		0.7	%
Additional paid-in capital		1,669,461			1,630,072			39,389		2.4	%
Retained earnings		1,465,760			1,454,826			10,934		0.8	%
Accumulated other comprehensive income		5,976			7,522			(1,546	)	(20.6	%)
Treasury stock, at cost		(2,083,137	)		(2,026,518	)		(56,619	)	(2.8	%)
Total stockholders' equity		1,072,947			1,080,683			(7,736	)	(0.7	%)
		1,282,372			1,288,321			(5,949	)	(0.5	%)

LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
		For the Three Months Ended
		September 30,
		2021			2020
Cash flows from operating activities:
Net loss		(6,431	)		(23,968	)
Non-cash operating activities:
Depreciation and amortization		5,819			6,901
Loss on disposal or impairment of assets		29			331
Provision for doubtful accounts		327			1,192
Deferred income taxes		141			187
Non-cash stock compensation expense		19,221			24,204
Changes in operating assets and liabilities:
Accounts receivable		(11,024	)		(3,724	)
Deferred commissions		(1,986	)		(1,764	)
Other assets		4,072			2,799
Accounts payable and other liabilities		447			2,013
Income taxes		368			(2,478	)
Deferred revenue		(82	)		556
Net cash provided by operating activities		10,901			6,249
Cash flows from investing activities:
Capital expenditures		(876	)		(296	)
Payment for investment		-			(1,206	)
Cash paid in acquisition, net of cash received		-			(2,933	)
Net cash used in investing activities		(876	)		(4,435	)
Cash flows from financing activities:
Proceeds related to the issuance of common stock under stock and employee benefit plans		997			2,424
Shares repurchased for tax withholdings upon vesting of stock-based awards		(1,181	)		(3,928	)
Acquisition of treasury stock		(15,000	)		-
Net cash used in financing activities		(15,184	)		(1,504	)
Effect of exchange rate changes on cash		(275	)		486
Net change in cash and cash equivalents		(5,434	)		796
Cash and cash equivalents at beginning of period		549,755			664,710
Cash and cash equivalents at end of period		544,321			665,506
Supplemental cash flow information:
Cash received during the period for:
Income taxes		(118	)		(822	)
Operating lease assets obtained in exchange for operating lease liabilities		35,691			-

LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
		For the Six Months Ended
		September 30,
		2021			2020
Cash flows from operating activities:
Net earnings (loss)		10,934			(45,696	)
Non-cash operating activities:
Depreciation and amortization		12,404			14,955
Loss on disposal or impairment of assets		142			333
Gain on distribution from retained profits interest		(30,052	)		-
Provision for doubtful accounts		1,282			2,522
Deferred income taxes		(771	)		(485	)
Non-cash stock compensation expense		37,717			40,689
Changes in operating assets and liabilities:
Accounts receivable		(18,073	)		(9,584	)
Deferred commissions		(5,369	)		(3,445	)
Other assets		23,408			7,703
Accounts payable and other liabilities		(36,829	)		(20,671	)
Income taxes		(632	)		(3,583	)
Deferred revenue		(501	)		(101	)
Net cash used in operating activities		(6,340	)		(17,363	)
Cash flows from investing activities:
Capital expenditures		(1,303	)		(1,128	)
Payment for investment		-			(1,873	)
Distribution from retained profits interest		31,000			-
Cash paid in acquisition, net of cash received		(8,368	)		(2,933	)
Net cash provided by (used in) investing activities		21,329			(5,934	)
Cash flows from financing activities:
Proceeds related to the issuance of common stock under stock and employee benefit plans		4,278			3,561
Shares repurchased for tax withholdings upon vesting of stock-based awards		(12,542	)		(5,755	)
Acquisition of treasury stock		(44,077	)		(42,312	)
Net cash used in financing activities		(52,341	)		(44,506	)
Effect of exchange rate changes on cash		(14	)		683
Net change in cash and cash equivalents		(37,366	)		(67,120	)
Cash and cash equivalents at beginning of period		581,687			732,626
Cash and cash equivalents at end of period		544,321			665,506
Supplemental cash flow information:
Cash received during the period for:
Income taxes		(2,569	)		(2,863	)
Operating lease assets obtained in exchange for operating lease liabilities		35,691			-

LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
CALCULATION OF FREE CASH FLOW TO EQUITY (1)
(Unaudited)
(Dollars in thousands)
		06/30/20			09/30/20			12/31/20			03/31/21			FY2021				06/30/21			09/30/21			FY2022
Net Cash Provided by (Used in) Operating Activities		(23,612	)		6,249			14,690			(17,887	)		(20,560	)			(17,241	)		10,901			(6,340	)
Less:
Capital expenditures		(832	)		(296	)		(678	)		(376	)		(2,182	)			(427	)		(876	)		(1,303	)
Free Cash Flow to Equity		(24,444	)		5,953			14,012			(18,263	)		(22,742	)			(17,668	)		10,025			(7,643	)
(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)
																												Q2 FY22 to Q2 FY21
		06/30/20			09/30/20			12/31/20			03/31/21			FY2021				06/30/21			09/30/21			FY2022				%			$
Revenues		99,437			104,661			119,753			119,175			443,026				119,038			127,290			246,328				21.6	%		22,629
Cost of revenue		34,465			34,897			37,085			37,557			144,004				34,315			35,079			69,394				0.5	%		182
Gross profit		64,972			69,764			82,668			81,618			299,022				84,723			92,211			176,934				32.2	%		22,447
% Gross margin		65.3	%		66.7	%		69.0	%		68.5	%		67.5	%			71.2	%		72.4	%		71.8	%
Operating expenses
Research and development		26,989			31,035			30,608			46,479			135,111				34,776			35,788			70,564				15.3	%		4,753
Sales and marketing		38,627			41,705			43,904			53,307			177,543				41,979			39,509			81,488				(5.3	%)		(2,196	)
General and administrative		23,368			24,495			23,943			32,395			104,201				24,291			23,078			47,369				(5.8	%)		(1,417	)
Gains, losses and other items, net		1,995			(619	)		(6	)		1,345			2,715				1,278			18			1,296				102.9	%		637
Total operating expenses		90,979			96,616			98,449			133,526			419,570				102,324			98,393			200,717				1.8	%		1,777
Loss from operations		(26,007	)		(26,852	)		(15,781	)		(51,908	)		(120,548	)			(17,601	)		(6,182	)		(23,783	)			77.0	%		20,670
% Margin		-26.2	%		-25.7	%		-13.2	%		-43.6	%		-27.2	%			-14.8	%		-4.9	%		-9.7	%
Total other income (expense), net		463			(225	)		(86	)		(404	)		(252	)			30,601			150			30,751				166.7	%		375
Loss from operations before income taxes		(25,544	)		(27,077	)		(15,867	)		(52,312	)		(120,800	)			13,000			(6,032	)		6,968				77.7	%		21,045
Income taxes benefit		(3,816	)		(3,109	)		(4,142	)		(19,465	)		(30,532	)			(4,365	)		399			(3,966	)			112.8	%		3,508
Net earnings (loss)		(21,728	)		(23,968	)		(11,725	)		(32,847	)		(90,268	)			17,365			(6,431	)		10,934				73.2	%		17,537
Diluted earnings (loss) per share		(0.33	)		(0.36	)		(0.18	)		(0.49	)		(1.36	)			0.25			(0.09	)		0.16				74.0	%		0.27
Some earnings (loss) per share amounts may not add due to rounding.
Basic shares		65,570			66,010			66,523			67,111			66,304				68,328			68,042			68,185
Diluted shares		65,570			66,010			66,523			67,111			66,304				69,605			69,333			69,473

LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP EPS (1)
(Unaudited)
(Dollars in thousands, except per share amounts)
		06/30/20			09/30/20			12/31/20			03/31/21			FY2021			06/30/21			09/30/21			FY 2022
Income (loss) from operations before income taxes		(25,544	)		(27,077	)		(15,867	)		(52,312	)		(120,800	)		13,000			(6,032	)		6,968
Income taxes (benefit)		(3,816	)		(3,109	)		(4,142	)		(19,465	)		(30,532	)		(4,365	)		399			(3,966	)
Net earnings (loss)		(21,728	)		(23,968	)		(11,725	)		(32,847	)		(90,268	)		17,365			(6,431	)		10,934
Earnings (loss) per share:
Basic		(0.33	)		(0.36	)		(0.18	)		(0.49	)		(1.36	)		0.25			(0.09	)		0.16
Diluted		(0.33	)		(0.36	)		(0.18	)		(0.49	)		(1.36	)		0.25			(0.09	)		0.16
Excluded items:
Purchased intangible asset amortization (cost of revenue)		5,306			4,350			4,213			4,177			18,046			4,645			4,612			9,257
Non-cash stock compensation (cost of revenue and operating expenses)		16,485			24,204			23,894			47,124			111,707			18,496			19,221			37,717
Restructuring and merger charges (gains, losses, and other)		1,995			(619	)		(6	)		1,345			2,715			1,278			18			1,296
Transformation costs (general and administrative)		3,605			258			-			-			3,863			-			-			-
Gain on retained profits interest (other income)		-			-			-			-			-			(30,052	)		-			(30,052	)
Total excluded items		27,391			28,193			28,101			52,646			136,331			(5,633	)		23,851			18,218
Income from operations before income taxes and excluding items		1,847			1,116			12,234			334			15,531			7,367			17,819			25,186
Income taxes expense (benefit)		934			(1,291	)		2,347			(2,628	)		(638	)		865			(12	)		853
Non-GAAP net earnings		913			2,407			9,887			2,962			16,169			6,502			17,831			24,333
Non-GAAP earnings per share:
Basic		0.01			0.04			0.15			0.04			0.24			0.10			0.26			0.36
Diluted		0.01			0.03			0.14			0.04			0.23			0.09			0.26			0.35
Basic weighted average shares		65,570			66,010			66,523			67,111			66,304			68,328			68,042			68,185
Diluted weighted average shares		67,337			68,804			69,775			69,935			68,963			69,605			69,333			69,473
Some totals may not add due to rounding
(1) This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our condensed consolidated financial statements prepared in accordance with GAAP. For a detailed explanation of the adjustments made to comparable GAAP measures, the reasons why management uses these measures and the material limitations on the usefulness of these measures, please see Appendix A.

LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP EXPENSES (1)
(Unaudited)
(Dollars in thousands)
		06/30/20			09/30/20			12/31/20			03/31/21			FY2021			06/30/21			09/30/21			FY2022
Expenses:
Cost of revenue		34,465			34,897			37,085			37,557			144,004			34,315			35,079			69,394
Research and development		26,989			31,035			30,608			46,479			135,111			34,776			35,788			70,564
Sales and marketing		38,627			41,705			43,904			53,307			177,543			41,979			39,509			81,488
General and administrative		23,368			24,495			23,943			32,395			104,201			24,291			23,078			47,369
Gains, losses and other items, net		1,995			(619	)		(6	)		1,345			2,715			1,278			18			1,296
Gross profit:		64,972			69,764			82,668			81,618			299,022			84,723			92,211			176,934
% Gross margin		65.3	%		66.7	%		69.0	%		68.5	%		67.5	%		71.2	%		72.4	%		71.8	%
Excluded items:
Purchased intangible asset amortization (cost of revenue)		5,306			4,350			4,213			4,177			18,046			4,645			4,612			9,257
Non-cash stock compensation (cost of revenue)		775			913			988			2,624			5,300			790			948			1,738
Non-cash stock compensation (research and development)		5,886			7,713			7,376			17,985			38,960			5,348			7,184			12,532
Non-cash stock compensation (sales and marketing)		7,123			9,233			9,212			14,833			40,401			6,793			6,749			13,542
Non-cash stock compensation (general and administrative)		2,701			6,345			6,318			11,682			27,046			5,565			4,340			9,905
Restructuring and merger charges (gains, losses, and other)		1,995			(619	)		(6	)		1,345			2,715			1,278			18			1,296
Transformation costs (general and administrative)		3,605			258			-			-			3,863			-			-			-
Gain on retained profits interest (other income)		-			-			-			-			-			(30,052	)		-			(30,052	)
Total excluded items		27,391			28,193			28,101			52,646			136,331			(5,633	)		23,851			18,218
Expenses, excluding items:
Cost of revenue		28,384			29,634			31,884			30,756			120,658			28,880			29,519			58,399
Research and development		21,103			23,322			23,232			28,494			96,151			29,428			28,604			58,032
Sales and marketing		31,504			32,472			34,692			38,474			137,142			35,186			32,760			67,946
General and administrative		17,062			17,892			17,625			20,713			73,292			18,726			18,738			37,464
Gains, losses and other items, net		-			-			-			-			-			-			-			-
Gross profit, excluding items:		71,053			75,027			87,869			88,419			322,368			90,158			97,771			187,929
% Gross margin		71.5	%		71.7	%		73.4	%		74.2	%		72.8	%		75.7	%		76.8	%		76.3	%
(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, 2021				March 31, 2022
GAAP loss from operations			(20,000	)			(70,000	)
Excluded items:
Purchased intangible asset amortization			5,000				19,000
Non-cash stock compensation			25,000				90,000
Restructuring and transformation costs			-				1,000
Total excluded items			30,000				110,000
Non-GAAP income from operations		$	10,000			$	40,000
(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 2022 FINANCIAL RESULTS
EXPLANATION OF NON-GAAP MEASURES AND OTHER KEY METRICS

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

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

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

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

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

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

Our non-GAAP financial schedules are:

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

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

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

View source version on businesswire.com: https://www.businesswire.com/news/home/20211102006069/en/

Lauren Dillard

LiveRamp Investor Relations

Investor.Relations@LiveRamp.com

ERAMP

Source: LiveRamp

FAQ

What were LiveRamp's Q2 fiscal 2022 financial results?

LiveRamp reported total revenue of $127 million, up 22% from the prior year, with subscription revenue at $105 million, an increase of 23%.

How did LiveRamp's gross margins perform in Q2 fiscal 2022?

GAAP gross margin improved to 72%, while non-GAAP gross margin reached 77%.

What is LiveRamp's revenue guidance for fiscal 2022?

LiveRamp increased its revenue guidance to approximately $525 million, a 19% year-over-year increase.

How many new subscription customers did LiveRamp add in Q2 fiscal 2022?

LiveRamp added 15 new direct subscription customers, bringing the total to 870.

What is the outlook for LiveRamp's operating income in fiscal 2022?

LiveRamp expects non-GAAP operating income of approximately $40 million for fiscal 2022.