First $100 Million Revenue Quarter
GAAP Gross Margin Increases to 63% –
Non-GAAP Gross Margin Surges to 69%
Operating Cash Flow Positive $16
Million
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.
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version on businesswire.com: https://www.businesswire.com/news/home/20200205005789/en/
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