LiveRamp Announces Strong Second Quarter Results and Raises Full Year Outlook

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		–