LiveRamp Announces Second Quarter Results

LiveRamp (NYSE: RAMP), the trusted platform that makes data accessible and meaningful, today announced its financial results for the second quarter ended September 30, 2019.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20191106005973/en/

Financial Highlights

• Total revenue was $90 million, up 39% compared to the prior year period.
• Subscription revenue was $72 million, up 31% and contributed 80% of total revenue.
• Marketplace & Other revenue was $18 million, up 83% compared to the prior year period.
• GAAP operating loss was $50 million compared to a GAAP operating loss of $38 million in the prior year period. Non-GAAP operating loss was $20 million compared to a non-GAAP operating loss of $14 million in the prior year period.
• GAAP loss per share from continuing operations was $0.59, and non-GAAP loss per share from continuing operations was $0.23.
• Net cash used in operating activities was $29 million compared to net cash used in operating activities of $27 million during the second quarter of fiscal 2019.
• LiveRamp has repurchased 2.1 million shares for $100.5 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 $777 million with no debt at quarter end.

“The quality of our quarter again demonstrates LiveRamp’s importance in the ecosystem,” said LiveRamp CEO Scott Howe. “Today, we work with 720 direct enterprise customers and serve thousands of additional companies through our partner network. We power more than 550 integrations and, with Data Plus Math, are providing a new way to buy, sell and measure advanced TV.”

“This was another outstanding quarter, fueled by record bookings and accelerating top-line growth,” said LiveRamp President and CFO Warren Jenson. “Our forward growth metrics remain strong: ARR exiting Q2 was up 40% year-over-year, and our Marketplace business grew by more than 80%. Added together, our business continues to demonstrate its strength and durability. In addition, the acquisition of Data Plus Math is already paying dividends. LiveRamp TV was up more than 70% year-over-year.”

GAAP and Non-GAAP Results

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

	Q2 Fiscal 2020			Q2 Fiscal 2019
	Results			Results
	GAAP	Non-GAAP		GAAP	Non-GAAP
Subscription revenue	$72	--		$55	--
YoY change %	31%			30%
Marketplace & other revenue	$18	--		$10	--
YoY change %	83%			(15%)
Total revenue	$90	--		$65	--
YoY change %	39%			20%
Gross profit	$49	$56		$40	$45
% Gross margin	54%	63%		62%	69%
YoY change, pts	(8 pts)	(6 pts)		7 pts	1 pt
Operating loss	($50)	($20)		($38)	($14)
% Operating margin	(56%)	(22%)		(59%)	(22%)
YoY change, pts	3 pts	- pt		12 pts	(2) pts
Net loss1	($40)	($15)		($41)	($11)
YoY change %	nm	nm		nm	nm
Loss per share1	($0.59)	($0.23)		($0.53)	($0.14)
YoY change %	nm	nm		nm	nm
Shares to Calculate EPS	67.7	67.7		77.4	77.4
YoY change %	(13%)
Net operating cash flow	($29)	--		($27)	--
YoY change %	nm	--		nm	--
Free cash flow to equity	--	($31)		--	($32)
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 30 new direct subscription customers during the quarter, bringing its total direct customer count to 720, an increase of 18% year-over-year. We now serve 21% of the Fortune 500 compared to 18% in the prior year period.
• LiveRamp has 44 clients whose subscription contracts exceed $1 million in annual revenue, up from 40 in the prior year period.
• Subscription net retention¹ was approximately 109% in the quarter. Platform net retention was 119% in Q2.
• LiveRamp announced new partnerships with MediaMath and Rubicon Project to enable marketers to buy publisher inventory with LiveRamp's IdentityLink graph as part of its Authenticated Traffic Solution (ATS) and IdentityLink in the bidstream efforts. These integrations allow people-based identity to be efficiently passed in real-time and enable marketers to connect with their customers using a consistent, omnichannel view of the consumer that is not reliant on third-party cookies.

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 now expects to report:

• Revenue of between $376 million and $381 million, an increase of 32% to 33% year-over-year as compared to the Company’s previous revenue growth guidance of 27% to 32%.
• GAAP operating loss from continuing operations of between $180 million and $175 million as compared to previous GAAP operating loss guidance of $189 million to $169 million.
• Non-GAAP operating loss of between $68 million and $63 million as compared to previous operating loss guidance of $76 million to $56 million.

The Company’s guidance includes the Data Plus Math acquisition. GAAP and non-GAAP operating loss guidance also includes $11 million of transition-related spend in the first half of the fiscal year associated with establishing standalone operations at LiveRamp.

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’s 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; 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 September 30, 2019, which LiveRamp expects to file on November 6, 2019.

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^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,
											$				%
					2019			2018			Variance				Variance
Revenues					90,143			64,812				25,331			39.1	%
Cost of revenue					41,460			24,466				16,994			69.5	%
Gross profit					48,683			40,346				8,337			20.7	%
% Gross margin					54.0	%		62.3	%
Operating expenses:
Research and development					26,445			16,940				9,505			56.1	%
Sales and marketing					45,204			35,940				9,264			25.8	%
General and administrative					27,262			25,176				2,086			8.3	%
Gains, losses and other items, net					45			489				(444	)		(90.8	%)
Total operating expenses					98,956			78,545				20,411			26.0	%
Loss from operations					(50,273	)		(38,199	)			(12,074	)		(31.6	%)
% Margin					-55.8	%		-58.9	%
Total other income (expense)					4,780			(281	)			5,061			1801.1	%
Loss from continuing operations before income taxes					(45,493	)		(38,480	)			(7,013	)		(18.2	%)
Income taxes (benefit)					(5,291	)		2,700				(7,991	)		(296.0	%)
Net loss from continuing operations					(40,202	)		(41,180	)			978			2.4	%
Earnings from discontinued operations, net of tax					-			61,803				(61,803	)		(100.0	%)
Net earnings (loss)					(40,202	)		20,623				(60,825	)		(294.9	%)
Basic earnings (loss) per share:
Continuing operations					(0.59	)		(0.53	)			(0.06	)		(11.7	%)
Discontinued operations					-			0.80				(0.80	)		(100.0	%)
Net earnings (loss)					(0.59	)		0.27				(0.86	)		(323.1	%)
Diluted earnings (loss) per share:
Continuing operations					(0.59	)		(0.53	)			(0.06	)		(11.7	%)
Discontinued operations					-			0.80				(0.80	)		(100.0	%)
Net earnings (loss)					(0.59	)		0.27				(0.86	)		(323.1	%)
Basic weighted average shares					67,684			77,448
Diluted weighted average shares					67,684			77,448

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,
											$				%
					2019			2018			Variance				Variance
Revenues					172,654			127,283				45,371			35.6	%
Cost of revenue					77,886			48,120				29,766			61.9	%
Gross profit					94,768			79,163				15,605			19.7	%
% Gross margin					54.9	%		62.2	%
Operating expenses:
Research and development					50,167			33,910				16,257			47.9	%
Sales and marketing					88,348			69,263				19,085			27.6	%
General and administrative					52,580			43,301				9,279			21.4	%
Gains, losses and other items, net					2,321			490				1,831			373.7	%
Total operating expenses					193,416			146,964				46,452			31.6	%
Loss from operations					(98,648	)		(67,801	)			(30,847	)		(45.5	%)
% Margin					-57.1	%		-53.3	%
Total other income					10,662			75				10,587			14116.0	%
Loss from continuing operations before income taxes					(87,986	)		(67,726	)			(20,260	)		(29.9	%)
Income taxes (benefit)					(5,644	)		1,272				(6,916	)		(543.7	%)
Net loss from continuing operations					(82,342	)		(68,998	)			(13,344	)		(19.3	%)
Earnings from discontinued operations, net of tax					-			86,606				(86,606	)		(100.0	%)
Net earnings (loss)					(82,342	)		17,608				(99,950	)		(567.6	%)
Basic earnings (loss) per share:
Continuing operations					(1.21	)		(0.89	)			(0.31	)		(34.9	%)
Discontinued operations					-			1.12				(1.12	)		(100.0	%)
Net earnings (loss)					(1.21	)		0.23				(1.43	)		(628.6	%)
Diluted earnings (loss) per share:
Continuing operations					(1.21	)		(0.89	)			(0.31	)		(34.9	%)
Discontinued operations					-			1.12				(1.12	)		(100.0	%)
Net earnings (loss)					(1.21	)		0.23				(1.43	)		(628.6	%)
Basic weighted average shares					68,295			77,192
Diluted weighted average shares					68,295			77,192

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,
			2019			2018			2019			2018
Loss from continuing operations before income taxes			(45,493	)		(38,480	)		(87,986	)		(67,726	)
Income taxes (benefit)			(5,291	)		2,700			(5,644	)		1,272
Net loss from continuing operations			(40,202	)		(41,180	)		(82,342	)		(68,998	)
Earnings from discontinued operations, net of tax			-			61,803			-			86,606
Net earnings (loss)			(40,202	)		20,623			(82,342	)		17,608
Earnings (loss) per share:
Basic			(0.59	)		0.27			(1.21	)		0.23
Diluted			(0.59	)		0.27			(1.21	)		0.23
Excluded items:
Purchased intangible asset amortization (cost of revenue)			5,369			3,548			8,492			9,518
Non-cash stock compensation (cost of revenue and operating expenses)			23,354			17,667			41,984			35,465
Accelerated depreciation (cost of revenue and operating expenses)			1,663			-			3,569			-
Restructuring and merger charges (gains, losses, and other)			45			489			2,321			490
Separation and transformation costs (general and administrative)			-			2,122			-			2,122
Total excluded items, continuing operations			30,431			23,826			56,366			47,595
Loss from continuing operations before income taxes and excluding items			(15,062	)		(14,654	)		(31,620	)		(20,131	)
Income taxes (benefit) (2)			190			(3,790	)		(26	)		(4,868	)
Non-GAAP net loss from continuing operations			(15,252	)		(10,864	)		(31,594	)		(15,263	)
Non-GAAP loss per share from continuing operations:
Basic			(0.23	)		(0.14	)		(0.46	)		(0.20	)
Diluted			(0.23	)		(0.14	)		(0.46	)		(0.20	)
Basic weighted average shares			67,684			77,448			68,295			77,192
Diluted weighted average shares			67,684			77,448			68,295			77,192

(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 1.2% and 25.9% in the second quarter of fiscal 2020 and 2019, respectively, and 0.0% and 24.2% for the six months ended September 30, 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 Six Months Ended
			September 30,						September 30,
			2019			2018			2019			2018
Loss from continuing operations			(50,273	)		(38,199	)		(98,648	)		(67,801	)
Excluded items:
Purchased intangible asset amortization (cost of revenue)			5,369			3,548			8,492			9,518
Non-cash stock compensation (cost of revenue and operating expenses)			23,354			17,667			41,984			35,465
Accelerated depreciation (cost of revenue and operating expenses)			1,663			-			3,569			-
Restructuring and merger charges (gains, losses, and other)			45			489			2,321			490
Separation and transformation costs (general and administrative)			-			2,122			-			2,122
Total excluded items			30,431			23,826			56,366			47,595
Loss from continuing operations before excluded items			(19,842	)		(14,373	)		(42,282	)		(20,206	)

(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,
			2019			2018			2019			2018
Net loss from continuing operations			(40,202	)		(41,180	)		(82,342	)		(68,998	)
Income taxes (benefit)			(5,291	)		2,700			(5,644	)		1,272
Other income (expense)			(4,780	)		281			(10,662	)		(75	)
Loss from operations			(50,273	)		(38,199	)		(98,648	)		(67,801	)
Depreciation and amortization			10,977			7,010			19,854			16,540
EBITDA			(39,296	)		(31,189	)		(78,794	)		(51,261	)
Other adjustments:
Non-cash stock compensation (cost of revenue and operating expenses)			23,354			17,667			41,984			35,465
Restructuring and merger charges (gains, losses, and other)			45			489			2,321			490
Separation and transformation costs (general and administrative)			-			2,122			-			2,122
Other adjustments			23,399			20,278			44,305			38,077
Adjusted EBITDA			(15,897	)		(10,911	)		(34,489	)		(13,184	)

(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,			$				%
	2019			2019			Variance				Variance
Assets
Current assets:
Cash and cash equivalents	777,443			1,061,473				(284,030	)		(26.8	%)
Restricted cash	14,815			-				14,815			n/a
Trade accounts receivable, net	88,150			78,563				9,587			12.2	%
Refundable income taxes	15,676			7,890				7,786			98.7	%
Other current assets	51,055			44,150				6,905			15.6	%
Total current assets	947,139			1,192,076				(244,937	)		(20.5	%)
Property and equipment	64,440			64,852				(412	)		(0.6	%)
Less - accumulated depreciation and amortization	43,278			38,809				4,469			11.5	%
Property and equipment, net	21,162			26,043				(4,881	)		(18.7	%)
Software, net of accumulated amortization	27,413			6,861				20,552			299.5	%
Goodwill	297,477			204,656				92,821			45.4	%
Deferred income taxes	35			35				-			0.0	%
Deferred commissions, net	11,347			10,741				606			5.6	%
Other assets, net	58,657			32,499				26,158			80.5	%
	1,363,230			1,472,911				(109,681	)		(7.4	%)
Liabilities and Stockholders' Equity
Current liabilities:
Trade accounts payable	31,721			31,203				518			1.7	%
Accrued payroll and related expenses	16,716			18,715				(1,999	)		(10.7	%)
Other accrued expenses	55,724			40,916				14,808			36.2	%
Acquisition escrow payable	14,815			-				14,815			n/a
Deferred revenue	4,447			4,284				163			3.8	%
Total current liabilities	123,423			95,118				28,305			29.8	%
Deferred income taxes	1,500			39				1,461			3746.2	%
Other liabilities	51,949			46,922				5,027			10.7	%
Stockholders' equity:
Common stock	14,310			14,187				123			0.9	%
Additional paid-in capital	1,460,120			1,406,813				53,307			3.8	%
Retained earnings	1,587,263			1,669,605				(82,342	)		(4.9	%)
Accumulated other comprehensive income	6,619			7,801				(1,182	)		(15.2	%)
Treasury stock, at cost	(1,881,954	)		(1,767,574	)			(114,380	)		(6.5	%)
Total stockholders' equity	1,186,358			1,330,832				(144,474	)		(10.9	%)
	1,363,230			1,472,911				(109,681	)		(7.4	%)

LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
	For the Three Months Ended
	September 30,
	2019			2018
Cash flows from operating activities:
Net earnings (loss)	(40,202	)		20,623
Earnings from discontinued operations, net of tax	-			(61,803	)
Non-cash operating activities:
Depreciation and amortization	10,977			7,010
Loss (gain) on disposal or impairment of assets	(225	)		490
Provision for doubtful accounts	1,468			1,095
Deferred income taxes	(5,090	)		14,136
Non-cash stock compensation expense	23,354			17,667
Changes in operating assets and liabilities:
Accounts receivable	(7,807	)		(1,797	)
Deferred commissions	(780	)		(1,049	)
Other assets	(7,497	)		1,838
Accounts payable and other liabilities	3,009			(8,880	)
Income taxes	(6,926	)		(14,518	)
Deferred revenue	968			(1,942	)
Net cash used in operating activities	(28,751	)		(27,130	)
Cash flows from investing activities:
Capitalized software	-			(423	)
Capital expenditures	(2,641	)		(1,323	)
Proceeds from sales of property and equipment	517			-
Cash paid in acquisition, net of cash received	(100,886	)		-
Net cash used in investing activities	(103,010	)		(1,746	)
Cash flows from financing activities:
Payments of debt	-			(2,701	)
Proceeds related to the issuance of common stock under stock and employee benefit plans	1,032			4,005
Shares repurchased for tax withholdings upon vesting of stock-based awards	(1,814	)		(4,580	)
Acquisition of treasury stock	(80,374	)		-
Net cash used in financing activities	(81,156	)		(3,276	)
Cash flows from discontinued operations:
From operating activities	-			34,135
From investing activities	-			(7,929	)
Effect of exchange rate changes on cash	-			(5	)
Net cash provided by discontinued operations	-			26,201
Effect of exchange rate changes on cash	(302	)		(557	)
Net change in cash, cash equivalents and restricted cash	(213,219	)		(6,508	)
Cash, cash equivalents and restricted cash at beginning of period	1,005,477			93,555
Cash, cash equivalents and restricted cash at end of period	792,258			87,047
Supplemental cash flow information:
Cash paid (received) during the period for:
Income taxes	6,042			(741	)

LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
	For the Six Months Ended
	September 30,
	2019			2018
Cash flows from operating activities:
Net earnings (loss)	(82,342	)		17,608
Earnings from discontinued operations, net of tax	-			(86,606	)
Non-cash operating activities:
Depreciation and amortization	19,854			16,540
Loss (gain) on disposal or impairment of assets	(140	)		475
Provision for doubtful accounts	2,430			631
Deferred income taxes	(5,083	)		12,444
Non-cash stock compensation expense	41,984			35,465
Changes in operating assets and liabilities:
Accounts receivable	(11,258	)		(2,649	)
Deferred commissions	(606	)		(2,047	)
Other assets	(3,897	)		1,264
Accounts payable and other liabilities	2,821			(4,604	)
Income taxes	(7,789	)		(16,416	)
Deferred revenue	(133	)		(1,515	)
Net cash used in operating activities	(44,159	)		(29,410	)
Cash flows from investing activities:
Capitalized software	-			(1,322	)
Capital expenditures	(7,529	)		(2,035	)
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	(112,377	)		(5,857	)
Cash flows from financing activities:
Payments of debt	-			(3,293	)
Fees from debt refinancing	-			(300	)
Proceeds related to the issuance of common stock under stock and employee benefit plans	2,092			8,121
Shares repurchased for tax withholdings upon vesting of stock-based awards	(13,907	)		(14,624	)
Acquisition of treasury stock	(100,473	)		(45,766	)
Net cash used in financing activities	(112,288	)		(55,862	)
Cash flows from discontinued operations:
From operating activities	-			54,316
From investing activities	-			(14,502	)
Effect of exchange rate changes on cash	-			(172	)
Net cash provided by discontinued operations	-			39,642
Effect of exchange rate changes on cash	(391	)		(1,484	)
Net change in cash, cash equivalents and restricted cash	(269,215	)		(52,971	)
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	792,258			87,047
Supplemental cash flow information:
Cash paid during the period for:
Income taxes	6,152			115

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			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	)		(44,159	)
Less (plus):
	Capitalized software	(899	)		(423	)		-			-			(1,322	)		-			-			-
	Capital expenditures	(712	)		(1,323	)		(1,938	)		(3,347	)		(7,320	)		(4,888	)		(2,641	)		(7,529	)
	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	)		(51,688	)

(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)
																									Q2 FY20 to Q2 FY19
	06/30/18			09/30/18			12/31/18			03/31/19			FY2019			06/30/19			09/30/19			FY2020			%			$
Revenues	62,471			64,812			80,021			78,316			285,620			82,511			90,143			172,654			40.5	%		25,331
Cost of revenue	23,654			24,466			34,838			37,760			120,718			36,426			41,460			77,886			71.8	%		16,994
Gross profit	38,817			40,346			45,183			40,556			164,902			46,085			48,683			94,768			21.5	%		8,337
% Gross margin	62.1	%		62.3	%		56.5	%		51.8	%		57.7	%		55.9	%		54.0	%		54.9	%
Operating expenses
Research and development	16,970			16,940			20,469			31,318			85,697			23,722			26,445			50,167			56.0	%		9,505
Sales and marketing	33,323			35,940			40,054			49,223			158,540			43,144			45,204			88,348			27.8	%		9,264
General and administrative	18,125			25,176			27,828			27,749			98,878			25,318			27,262			52,580			11.5	%		2,086
Gains, losses and other items, net	1			489			5,043			14,400			19,933			2,276			45			2,321			(44400.0	%)		(444	)
Total operating expenses	68,419			78,545			93,394			122,690			363,048			94,460			98,956			193,416			29.8	%		20,411
Loss from operations	(29,602	)		(38,199	)		(48,211	)		(82,134	)		(198,146	)		(48,375	)		(50,273	)		(98,648	)		(40.8	%)		(12,074	)
% Margin	-47.4	%		-58.9	%		-60.2	%		-104.9	%		-69.4	%		-58.6	%		-55.8	%		-57.1	%
Total other income (expense)	356			(281	)		10,404			8,311			18,790			5,882			4,780			10,662			1421.6	%		5,061
Loss from continuing operations before income taxes	(29,246	)		(38,480	)		(37,807	)		(73,823	)		(179,356	)		(42,493	)		(45,493	)		(87,986	)		(24.0	%)		(7,013	)
Income taxes (benefit)	(1,428	)		2,700			(22,546	)		(24,135	)		(45,409	)		(353	)		(5,291	)		(5,644	)		(559.6	%)		(7,991	)
Net loss from continuing operations	(27,818	)		(41,180	)		(15,261	)		(49,688	)		(133,947	)		(42,140	)		(40,202	)		(82,342	)		3.5	%		978
Earnings from discontinued operations, net of tax	24,803			61,803			1,071,661			4,227			1,162,494			-			-			-			(249.2	%)		(61,803	)
Net earnings (loss)	(3,015	)		20,623			1,056,400			(45,461	)		1,028,547			(42,140	)		(40,202	)		(82,342	)		(2017.4	%)		(60,825	)
Diluted earnings (loss) per share	(0.04	)		0.27			13.65			(0.67	)		13.71			(0.61	)		(0.59	)		(1.21	)		(2195.1	%)		(0.86	)
Diluted loss per share continuing operations	(0.36	)		(0.53	)		(0.20	)		(0.73	)		(1.79	)		(0.61	)		(0.59	)		(1.21	)		(17.2	%)		(0.06	)
Some earnings (loss) per share amounts may not add due to rounding.

LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP EPS (1)
(Unaudited)
(Dollars in thousands, except per share amounts)
				06/30/18			09/30/18			12/31/18			03/31/19			FY2019			06/30/19			09/30/19			FY2020
Loss from continuing operations before income taxes				(29,246	)		(38,480	)		(37,807	)		(73,823	)		(179,356	)		(42,493	)		(45,493	)		(87,986	)
Income taxes (benefit)				(1,428	)		2,700			(22,546	)		(24,135	)		(45,409	)		(353	)		(5,291	)		(5,644	)
Net loss from continuing operations				(27,818	)		(41,180	)		(15,261	)		(49,688	)		(133,947	)		(42,140	)		(40,202	)		(82,342	)
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	)		(82,342	)
Earnings (loss) per share:
Basic				(0.04	)		0.27			13.65			(0.67	)		13.71			(0.61	)		(0.59	)		(1.21	)
Diluted				(0.04	)		0.27			13.65			(0.67	)		13.71			(0.61	)		(0.59	)		(1.21	)
Excluded items:
Purchased intangible asset amortization (cost of revenue)				5,970			3,548			3,359			2,981			15,858			3,123			5,369			8,492
Non-cash stock compensation (cost of revenue and operating expenses)				17,798			17,667			26,082			41,175			102,722			18,630			23,354			41,984
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			2,321
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			56,366
Loss from continuing operations before income taxes and excluding items				(5,477	)		(14,654	)		(664	)		(14,119	)		(34,914	)		(16,558	)		(15,062	)		(31,620	)
Income taxes (benefit)				(1,078	)		(3,790	)		(2,941	)		(5,155	)		(12,964	)		(216	)		190			(26	)
Non-GAAP net earnings (loss) from continuing operations				(4,399	)		(10,864	)		2,277			(8,964	)		(21,950	)		(16,342	)		(15,252	)		(31,594	)
Non-GAAP earnings (loss) per share from continuing operations:
Basic				(0.06	)		(0.14	)		0.03			(0.13	)		(0.29	)		(0.24	)		(0.23	)		(0.46	)
Diluted				(0.06	)		(0.14	)		0.03			(0.13	)		(0.29	)		(0.24	)		(0.23	)		(0.46	)
Basic weighted average shares				76,935			77,448			77,398			68,299			75,020			68,906			67,684			68,295
Diluted weighted average shares				76,935			77,448			77,398			68,299			75,020			68,906			67,684			68,295
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		FY2020
Expenses, continuing operations:
Cost of revenue			23,654		24,466		34,838		37,760		120,718		36,426		41,460		77,886
Research and development			16,970		16,940		20,469		31,318		85,697		23,722		26,445		50,167
Sales and marketing			33,323		35,940		40,054		49,223		158,540		43,144		45,204		88,348
General and administrative			18,125		25,176		27,828		27,749		98,878		25,318		27,262		52,580
Gains, losses and other items, net			1		489		5,043		14,400		19,933		2,276		45		2,321
Excluded items:
Purchased intangible asset amortization (cost of revenue)			5,970		3,548		3,359		2,981		15,858		3,123		5,369		8,492
Non-cash stock compensation (cost of revenue)			712		782		1,052		2,163		4,709		755		1,060		1,815
Non-cash stock compensation (research and development)			4,341		3,745		5,945		14,193		28,224		4,451		6,346		10,797
Non-cash stock compensation (sales and marketing)			9,920		9,854		9,460		14,736		43,970		8,920		9,758		18,678
Non-cash stock compensation (general and administrative)			2,824		3,286		9,625		10,083		25,818		4,504		6,190		10,694
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		2,321
Separation and transformation costs (general and administrative)			-		2,122		700		(705)		2,117		-		-		-
Total excluded items			23,768		23,826		37,143		59,704		144,441		25,935		30,431		56,366
Expenses, continued operations excluding items:
Cost of revenue			16,972		20,136		28,900		31,171		97,179		31,061		33,786		64,847
Research and development			12,629		13,195		14,524		17,125		57,473		19,271		20,099		39,370
Sales and marketing			23,403		26,086		30,594		34,487		114,570		34,224		35,446		69,670
General and administrative			15,301		19,768		17,071		17,963		70,103		20,395		20,654		41,049
Gains, losses and other items, net			-		-		-		-		-		-		-		-

(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				(180,000	)			(175,000	)
Excluded items:
Purchased intangible asset amortization				19,000				19,000
Accelerated depreciation				4,000				4,000
Non-cash stock compensation				87,000				87,000
Gains, losses and other items, net				2,000				2,000
Total excluded items				112,000				112,000
Non-GAAP loss from operations			$	(68,000	)		$	(63,000	)

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

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

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

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