LiveRamp Announces Fourth Quarter and Fiscal Year Results

Q4 Revenue Increased by 30%

Q4 Subscription Revenue Grew 40%

Extends Lead in Omnichannel Identity and Data Connectivity with
IdentityLink for Real-Time Bidding and Faktor Acquisition

SAN FRANCISCO–(BUSINESS WIRE)–LiveRamp
(NYSE: RAMP), the identity platform powering exceptional experiences,
today announced its financial results for the fourth quarter and fiscal
year ended March 31, 2019.


Fourth Quarter Financial Highlights

  • Total revenue was $78 million, up 30% compared to the prior year
    period. Excluding the impact of Facebook, total revenue increased 40%.
  • Subscription revenue was $66 million, up 40% and contributed 84% of
    total revenue.
  • Marketplace & Other revenue of $13 million declined 4% on a reported
    basis. Excluding the impact of Facebook, Marketplace & Other revenue
    increased 43%.
  • GAAP loss per share from continuing operations was $0.73, and non-GAAP
    loss per share from continuing operations was $0.13.
  • Cash flow from operating activities improved to $38 million, compared
    to net cash used in operating activities of $9 million during the
    fourth quarter of fiscal 2018. Fourth quarter cash flow included a tax
    benefit of approximately $60 million.
  • During the quarter, LiveRamp repurchased 175 thousand shares for $10
    million under its $1 billion stock repurchase program. Since inception
    of the share repurchase program in 2011, the Company has repurchased
    22.6 million shares for $449 million, leaving remaining capacity of
    $551 million.

Fiscal Year Financial Highlights

  • Total revenue was $286 million, up 30% compared to the prior year
    period. Excluding the impact of Facebook, revenue increased 41%.
  • Subscription revenue was $237 million, up 38% and contributed 83% of
    total revenue.
  • Marketplace & Other revenue of $49 million grew 2%. Excluding the
    impact of Facebook, Marketplace & Other revenue increased 60%.
  • GAAP loss per share from continuing operations was $1.79, and non-GAAP
    loss per share from continuing operations was $0.29.
  • Cash flows used in operating activities was $2 million compared to $14
    million during fiscal 2018.
  • Cash and cash equivalents totaled $1.1 billion with no debt at fiscal
    year end.

“The fourth quarter represented a strong finish to an incredible year,”
said LiveRamp CEO Scott Howe. “I’m extremely proud of the team’s
performance and our momentum entering FY20. LiveRamp has solidified its
position as the leading provider of people-based identity and data
connectivity for the open ecosystem. In the coming year, we plan to
double down on key growth areas like Advanced TV, enterprise data
networks and global expansion.”

“Each of our growth initiatives continues to build momentum,” said
LiveRamp CFO Warren Jenson. “As enterprises look for new ways to better
leverage data to power the customer experience, they are increasingly
turning to LiveRamp as the trusted and open choice.”

GAAP and Non-GAAP Results

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

     
Q4 Fiscal 2019 Full Year Fiscal 2019
Results Results
 

GAAP

  Non-GAAP GAAP   Non-GAAP
Subscription revenue $66 $237
YoY change % 40% 38%
Marketplace & other revenue $13

$49

YoY change %

(4%)

 

 

2%

 

 

Total revenue $78 $286
YoY change % 30% 30%
 
Gross profit $41 $47 $165 $188
% Gross margin 52% 60% 58% 66%
YoY change pts (9 pts) (12 pts) 2 pts (2 pts)
 
Operating loss ($82) ($22) ($198) ($54)
% Operating margin (105%) (29%) (69%) (19%)
YoY change pts (59 pts) (17 pts) (9 pts) (2 pts)
 
Net loss1 ($50) ($9) ($134) ($22)
 
Earnings (loss) per share1 ($0.73) ($0.13) ($1.79) ($0.29)
YoY change % nm nm nm nm
Net operating cash flow $38 ($2)
YoY change % nm nm
Free cash flow to equity $35 ($14)
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 25 new direct subscription customers during the
    quarter, bringing its total direct customer count to 665, an increase
    of 21% year-over-year. We now serve 20% of the Fortune 500 compared to
    16% in the prior year period.
  • LiveRamp has 46 clients whose subscription contracts exceed $1 million
    in annual revenue, up from 34 in the prior year period.
  • Dollar-based net retention was approximately 114% in the quarter.
  • LiveRamp announced the availability of IdentityLink for Real-Time
    Bidding (RTB) – providing demand-side platforms free perpetual access
    to its scaled, people-based identifier. This offering compliments the
    free access to IdentityLink
    that supply-side platforms get through the Advertising
    ID Consortium
    .
  • In April 2019, LiveRamp acquired consent management platform Faktor to
    enable streamlined consent management across the open web. LiveRamp
    remains committed to helping its clients manage consent and maintain
    transparency in order to comply with the California Consumer Privacy
    Act (CCPA).

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 $358 million to $372 million, an increase of between 25%
    and 30% year-over-year.
  • GAAP operating loss from continuing operations of between $165.5
    million and $145.5 million.
  • Non-GAAP operating loss of between $70 million to $50 million.

The Company’s GAAP and non-GAAP operating loss guidance includes up to
$15 million of transition-related spend associated with establishing
standalone operations at LiveRamp following the AMS sale.
Transition-related spending is expected to be complete by the end of the
second fiscal quarter.

LiveRamp continues to expect full year non-GAAP operating profitability
in fiscal 2021.

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.
LiveRamp IdentityLink connects people, data, and devices across the
digital and physical world, powering the people-based marketing
revolution and allowing consumers to safely connect with the brands and
products they love. 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, the reliance upon partners including data
suppliers, competition, attracting and retaining talent. Additional
risks relate to maintaining our culture, our ability to innovate and
evolve within rapidly changing industry including digital advertising,
while also avoiding disruption from acquisition and divestiture
activities. Our international operations are 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, our dependence on the
continued availability of third-party data hosting and transmission
services, our client’s 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. Finally, 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 2018
ended March 31, 2018, and LiveRamp’s Quarterly Reports on Form 10-Q
issued in fiscal year 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 Annual
Report on Form 10-K for our fiscal year ended March 31, 2019, which
LiveRamp expects to file on May 28, 2019.

LiveRamp assumes no obligation to, 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, IdentityLinkTM, AbilitecTM
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 SUBDISIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except per share amounts)
 
 
For the Three Months Ended
March 31,
$ %
2019 2018   Variance Variance
 
Revenues 78,316 60,210 18,106 30.1 %
 
Cost of revenue 37,760   23,800   13,960 58.7 %
Gross profit 40,556 36,410 4,146 11.4 %
% Gross margin 51.8 % 60.5 %
 
Operating expenses:
Research and development 31,318 15,963 15,355 96.2 %
Sales and marketing 49,223 30,735 18,488 60.2 %
General and administrative 27,749 16,914 10,835 64.1 %
Gains, losses and other items, net 14,400   681   13,719 2014.5 %
Total operating expenses 122,690   64,293   58,397 90.8 %
 
Loss from operations (82,134 ) (27,883 ) (54,251 ) (194.6 %)
% Margin -104.9 % -46.3 %
 
Total other income 8,311   387   7,924 2047.5 %
 
Loss from continuing operations before income taxes (73,823 ) (27,496 ) (46,327 ) (168.5 %)
 
Income taxes (benefit) (24,135 ) (8,486 ) (15,649 ) (184.4 %)
 
Net loss from continuing operations (49,688 ) (19,010 ) (30,678 ) (161.4 %)
 
Earnings from discontinued operations, net of tax 4,227   24,185   (19,958 ) (82.5 %)
 
Net earnings (loss) (45,461 ) 5,175   (50,636 ) (978.5 %)
 
Basic earnings (loss) per share:
Continuing operations (0.73 ) (0.24 ) (0.49 ) (200.9 %)
Discontinued operations 0.06   0.31   (0.25 ) (79.9 %)
Net earnings (loss) (0.67 ) 0.07   (0.73 ) (1111.1 %)
 
Diluted earnings (loss) per share:
Continuing operations (0.73 ) (0.24 ) (0.49 ) (200.9 %)
Discontinued operations 0.06   0.31   (0.25 ) (79.9 %)
Net earnings (loss) (0.67 ) 0.07   (0.73 ) (1111.1 %)
 
Basic weighted average shares 68,299 78,614
Diluted weighted average shares 68,299 78,614
 
       
LIVERAMP HOLDINGS, INC. AND SUBDISIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except per share amounts)
 
 
For the Twelve Months Ended
March 31,
$ %
2019 2018 Variance Variance
 
Revenues 285,620 220,101 65,519 29.8 %
 
Cost of revenue 120,718   96,396   24,322 25.2 %
Gross profit 164,902 123,705 41,197 33.3 %
% Gross margin 57.7 % 56.2 %
 
Operating expenses:
Research and development 85,697 60,713 24,984 41.2 %
Sales and marketing 158,540 108,639 49,901 45.9 %
General and administrative 98,878 85,154 13,724 16.1 %
Gains, losses and other items, net 19,933   2,723   17,210 632.0 %
Total operating expenses 363,048   257,229   105,819 41.1 %
 
Loss from operations (198,146 ) (133,524 ) (64,622 ) (48.4 %)
% Margin -69.4 % -60.7 %
 
Total other income 18,790   502   18,288 3643.0 %
 
Loss from continuing operations before income taxes (179,356 ) (133,022 ) (46,334 ) (34.8 %)
 
Income taxes (benefit) (45,409 ) (65,723 ) 20,314 30.9 %
 
Net loss from continuing operations (133,947 ) (67,299 ) (66,648 ) (99.0 %)
 
Earnings from discontinued operations, net of tax 1,162,494   90,779   1,071,715 1180.6 %
 
Net earnings 1,028,547   23,480   1,005,067 4280.5 %
 
Basic earnings (loss) per share:
Continuing operations (1.79 ) (0.85 ) (0.93 ) (109.3 %)
Discontinued operations 15.50   1.15   14.35 1246.7 %
Net earnings 13.71   0.30   13.41 4506.6 %
 
Diluted earnings (loss) per share:
Continuing operations (1.79 ) (0.85 ) (0.93 ) (109.3 %)
Discontinued operations 15.50   1.15   14.35 1246.7 %
Net earnings 13.71   0.30   13.41 4506.6 %
 
Basic weighted average shares 75,020 78,891
Diluted weighted average shares 75,020 78,891
 
       
LIVERAMP HOLDINGS, INC. AND SUBDISIARIES

RECONCILIATION OF GAAP TO NON-GAAP EPS (1)

(Unaudited)
(Dollars in thousands, except per share amounts)
 
For the Three Months Ended For the Twelve Months Ended
March 31, March 31,
2019 2018 2019 2018
 
 
Loss from continuing operations before income taxes (73,823 ) (27,496 ) (179,356 ) (133,022 )
Income taxes (benefit) (24,135 ) (8,486 ) (45,409 ) (65,723 )
Net earnings (loss) from continuing operations (49,688 ) (19,010 ) (133,947 ) (67,299 )
Earnings from discontinued operations, net of tax 4,227   24,185   1,162,494   90,779  
Net earnings (loss) (45,461 ) 5,175   1,028,547   23,480  
 
Earnings per share:
Basic (0.67 ) 0.07   13.71   0.30  
Diluted (0.67 ) 0.07   13.71   0.30  
 
Excluded items:
Purchased intangible asset amortization (cost of revenue) 2,981 5,956 15,858 23,895
Non-cash stock compensation (cost of revenue and operating expenses) 41,175 14,023 102,722 52,867
Accelerated depreciation (cost of revenue and operating expenses) 1,853 3,812
Restructuring and merger charges (gains, losses, and other) 14,400 681 19,933 2,723
Separation and transformation costs (general and administrative) (705 )   2,117   17,786  
Total excluded items, continuing operations 59,704   20,660   144,442   97,271  
 

Loss from continuing operations before income taxes and excluding
items

(14,119 ) (6,836 ) (34,914 ) (35,751 )
Income taxes (benefit) (2) (5,155 ) (2,352 ) (12,964 ) (12,586 )
Non-GAAP net loss from continuing operations (8,964 ) (4,484 ) (21,950 ) (23,165 )
 
Non-GAAP loss per share from continuing operations:
 
Basic (0.13 ) (0.06 ) (0.29 ) (0.29 )
Diluted (0.13 ) (0.06 ) (0.29 ) (0.29 )
 
Basic weighted average shares 68,299   78,614   75,020   78,891  
Diluted weighted average shares 68,299   78,614   75,020   78,891  
 

(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
36.5% and 34.4% in the fourth quarter of fiscal 2019 and 2018,
respectively, and 37.1% and 35.2% for the twelve months ended March 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 SUBDISIARIES

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

(Unaudited)
(Dollars in thousands)
 
For the Three Months Ended For the Twelve Months Ended

March 31,

March 31,

2019 2018 2019 2018
 
 
Loss from continuing operations (82,134 ) (27,883 ) (198,146 ) (133,524 )
 
Excluded items:
Purchased intangible asset amortization (cost of revenue) 2,981 5,956 15,858 23,895
Non-cash stock compensation (cost of revenue and operating expenses) 41,175 14,023 102,722 52,867
Accelerated depreciation (cost of revenue and operating expenses) 1,853 3,812
Restructuring and merger charges (gains, losses, and other) 14,400 681 19,933 2,723
Separation and transformation costs (general and administrative) (705 )   2,117   17,786  
Total excluded items 59,704   20,660   144,442   97,271  
 
Loss from continuing operations before excluded items (22,430 ) (7,223 ) (53,704 ) (36,253 )
 

(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 SUBDISIARIES
RECONCILIATION OF ADJUSTED EBITDA (1)
(Unaudited)
(Dollars in thousands)
 
For the Three Months Ended For the Twelve Months Ended

March 31,

March 31,

2019 2018 2019 2018
 
 
Net loss from continuing operations (49,688 ) (19,010 ) (133,947 ) (67,299 )
 
Income taxes (benefit) (24,135 ) (8,486 ) (45,409 ) (65,723 )
 
Other income (8,311 ) (387 ) (18,790 ) (502 )
 
Loss from operations (82,134 ) (27,883 ) (198,146 ) (133,524 )
 
Depreciation and amortization 8,508   9,392   33,782   37,647  
 
EBITDA (73,626 ) (18,491 ) (164,364 ) (95,877 )
 
Other adjustments:
Non-cash stock compensation (cost of revenue and operating expenses) 41,175 14,023 102,722 52,867
Restructuring and merger charges (gains, losses, and other) 14,400 681 19,933 2,723
Separation and transformation costs (general and administrative) (705 )   2,117   17,786  
 
Other adjustments 54,870   14,704   124,772   73,376  
 
Adjusted EBITDA (18,756 ) (3,787 ) (39,592 ) (22,501 )

(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 SUBDISIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
 
March 31, March 31, $ %
2019 2018 Variance Variance
 

Assets

Current assets:
Cash and cash equivalents 1,061,473 140,018 921,455 658.1 %
Trade accounts receivable, net 78,563 52,047 26,516 50.9 %
Refundable income taxes 7,890 9,977 (2,087 ) (20.9 %)
Other current assets 44,150 20,173 23,977 118.9 %
Assets held for sale   138,374   (138,374 ) (100.0 %)
 
Total current assets 1,192,076   360,589   831,487 230.6 %
 
Property and equipment 64,852 62,353 2,499 4.0 %
Less – accumulated depreciation and amortization 38,809   30,013   8,796 29.3 %
Property and equipment, net 26,043   32,340   (6,297 ) (19.5 %)
 
Software, net of accumulated amortization 6,861 13,970 (7,109 ) (50.9 %)
Goodwill 204,656 203,639 1,017 0.5 %
Deferred income taxes 35 10,703 (10,668 ) (99.7 %)
Deferred commissions, net 10,741 10,741
Other assets, net 32,499 37,854 (5,355 ) (14.1 %)
Assets held for sale   550,402   (550,402 ) (100.0 %)
1,472,911   1,209,497   263,414 21.8 %
 

Liabilities and Stockholders’ Equity

Current liabilities:
Current installments of long-term debt 1,583 (1,583 ) (100.0 %)
Trade accounts payable 31,203 18,759 12,444 66.3 %
Accrued payroll and related expenses 18,715 13,774 4,941 35.9 %
Other accrued expenses 40,916 39,624 1,292 3.3 %
Deferred revenue 4,284 4,506 (222 ) (4.9 %)
Liabilities held for sale   100,353   (100,353 ) (100.0 %)
Total current liabilities 95,118   178,599   (83,481 ) (46.7 %)
 
Long-term debt 227,837 (227,837 ) (100.0 %)
Deferred income taxes 39 40,243 (40,204 ) (99.9 %)
Other liabilities 46,922 10,016 36,906 368.5 %
Other liabilities held for sale 3,707 (100.0 %)
 
Stockholders’ equity:
Common stock 14,187 13,609 578 4.2 %
Additional paid-in capital 1,406,813 1,235,679 171,134 13.8 %
Retained earnings 1,669,605 628,331 1,041,274 165.7 %
Accumulated other comprehensive income 7,801 10,767 (2,966 ) (27.5 %)
Treasury stock, at cost (1,767,574 ) (1,139,291 ) (628,283 ) (55.1 %)
Total stockholders’ equity 1,330,832   749,095   581,737 77.7 %
1,472,911   1,209,497   263,414 21.8 %
 
   
LIVERAMP HOLDINGS, INC. AND SUBDISIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
 
For the Three Months Ended
March 31,
2019 2018
 
Cash flows from operating activities:
Net earnings (loss) (45,461 ) 5,175
Earnings from discontinued operations, net of tax (4,227 ) (24,185 )
Non-cash operating activities:
Depreciation and amortization 8,508 9,392
Loss on disposal or impairment of assets 115 588
Provision for doubtful accounts 1,810 892
Deferred income taxes (18,639 ) 3,591
Non-cash stock compensation expense 41,175 14,023
Changes in operating assets and liabilities:
Accounts receivable (9,400 ) (3,885 )
Deferred commissions (1,263 )
Other assets 1,781 (1,070 )
Accounts payable and other liabilities 6,804 (6,093 )
Income taxes 55,134 (7,042 )
Deferred revenue 2,017   (721 )
Net cash provided by (used in) operating activities 38,354   (9,335 )
Cash flows from investing activities:
Capitalized software (1,546 )
Capital expenditures (3,347 ) (4,126 )
Net cash paid in acquisitions   (4,478 )
Net cash used in investing activities (3,347 ) (10,150 )
Cash flows from financing activities:
Payments of debt (588 )
Proceeds related to the issuance of common stock under stock and
employee benefit plans
3,064 4,418
Shares repurchased for tax withholdings upon vesting of stock-based
awards
(13,614 ) (860 )
Acquisition of treasury stock (10,314 ) (49,443 )
Net cash used in financing activities (20,864 ) (46,473 )
Cash flows from discontinued operations:
From operating activities (499,505 ) 44,276
From investing activities (15,268 )
Effect of exchange rate changes on cash   31  
Net cash provided by (used in) discontinued operations (499,505 ) 29,039  
Effect of exchange rate changes on cash 61   570  
 
Net change in cash and cash equivalents (485,301 ) (36,349 )
Cash and cash equivalents at beginning of period 1,546,774   176,367  
Cash and cash equivalents at end of period 1,061,473   140,018  
 
Supplemental cash flow information:
Cash paid during the period for:
Income taxes (438,875 ) (84 )
 

Contacts

LiveRamp Investor Relations
Lauren Dillard, (650) 372-2242
[email protected]
ERAMP

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