LiveRamp Announces Second Quarter Results

LiveRamp (NYSE: RAMP), the leading global data connectivity platform, today announced its financial results for the quarter ended September 30, 2020.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20201109006019/en/

Second Quarter Financial Highlights

• Total revenue was $105 million, up 16% compared to the prior year period.
• Subscription revenue was $86 million, up 19% compared to the prior year period and contributed 82% of total revenue.
• Marketplace & Other revenue was $19 million, up 4% compared to the prior year period.
• GAAP gross profit was $70 million, up 43% compared to the prior year period. GAAP gross margin of 67% expanded 13 percentage points. Non-GAAP gross profit was $75 million, up 33% compared to the prior year period. Non-GAAP gross margin of 72% expanded 9 percentage points.
• GAAP operating loss was $27 million compared to a GAAP operating loss of $50 million in the prior year period. Non-GAAP operating income was $1 million compared to a non-GAAP operating loss of $20 million in the prior year period.
• GAAP loss per share was $0.36, and non-GAAP earnings per share was $0.03.
• Net cash generated from operating activities was $6 million compared to net cash used by operating activities of $29 million in the prior year period.
• Cash and cash equivalents totaled $651 million with no debt at quarter end.

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

“We are playing a critical role in enabling the digital transformations and data-driven strategies of our customers and partners,” said LiveRamp CEO Scott Howe. “The pandemic has put a spotlight on the importance of addressability and measurement, and global brands are increasingly turning to LiveRamp to drive greater media efficiency and higher ROI on their marketing spend. Our recent global success with the Authenticated Traffic Solution (or ATS) reflects this trend. More than 215 publishers worldwide are now committed to ATS, including 60% of the US comScore 50.”

“Our strong, durable and recurring business model was once again on display in the second quarter,” added LiveRamp President and CFO Warren Jenson. “Subscription revenue was up 19%, our gross margin was a record 72%, and we delivered another quarter of non-GAAP operating profit. Looking ahead, we now expect to be profitable on a non-GAAP basis for the full year.”

GAAP and Non-GAAP Results

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

	Q2 Fiscal 2021					Q2 Fiscal 2020
	Results					Results
	GAAP		Non-GAAP			GAAP		Non-GAAP
Subscription revenue	$86		—			$72		—
YoY change %	19%					31%
Marketplace & other revenue	$19		—			$18		—
YoY change %	4%					83%
Total revenue	$105		—			$90		—
YoY change %	16%					39%
Gross profit	$70		$75			$49		$56
% Gross margin	67%		72%			54%		63%
YoY change, pts	13 pts		9 pts			(8 pts)		(6 pts)
Operating income (loss)	($27)		$1			($50)		($20)
% Operating margin	(26%)		1%			(56%)		(22%)
YoY change, pts	30 pts		23 pts			3 pts		0 pts
Net income (loss)	($24)		$2			($40)		($15)
YoY change %	nm		nm			nm		nm
Earnings (loss) per share	($0.36)		$0.03			($0.59)		($0.23)
YoY change %	nm		nm			nm		nm
Shares to Calculate EPS	66.0		68.8			67.7		67.7
YoY change %	(2%)		2%			(13%)		(13%)
Net operating cash flow	$6		—			($29)		—
YoY change %	nm		—			nm
Free cash flow to equity	—		$6			—		($31)
YoY change %	—		nm			—		nm
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 25 supply-side platforms (SSPs) live or committed to implementing ATS. In addition, there are over 45 demand-side platforms (DSPs) live or committed to bid on the LiveRamp identifier, including The Trade Desk, Amobee, Criteo, dataxu, and MediaMath. Lastly, to date, 215 publishers globally have adopted ATS, including 60% of the US comScore 50.
• LiveRamp recently announced that the Unified ID 2.0, created by The Trade Desk, will be made available to publishers via LiveRamp’s Authenticated Identity Infrastructure. As part of the expanded partnership, marketers who work with both LiveRamp and The Trade Desk can now also bid on LiveRamp's identifier within The Trade Desk's platform to optimize media buying across channels.
• During the second quarter, subscription net retention was approximately 111% and platform net retention was 109%.
• Current remaining performance obligations (RPO), which is contracted and committed revenue expected to be recognized over the next 12 months, was $216 million, up 13% compared to the second quarter of last year.
• LiveRamp has 62 clients whose subscription contracts exceed $1 million in annual revenue, up from 44 in the prior year period.
• LiveRamp’s direct subscription customer count at quarter end was 795, an increase of 10% year over year.

Share Repurchase Program Extension

LiveRamp also announced today that its board of directors authorized the extension of its share repurchase program through December 31, 2022. The Company had approximately $326 million of remaining capacity available under the program as of September 30, 2020.

Since the inception of the share repurchase program in August 2011, the Company has returned approximately $1.17 billion to shareholders.

Under the program, LiveRamp is authorized to repurchase outstanding shares in open market or privately negotiated transactions depending on prevailing market conditions and other factors. The repurchase program may be suspended or discontinued at any time.

Financial Outlook

Given macro economic uncertainties, LiveRamp is providing third quarter guidance only.

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

For the third quarter of fiscal 2021, LiveRamp expects to report:

• Revenue of approximately $113 million, an increase of approximately 11% year-over-year
• GAAP operating loss of approximately $25 million
• Non-GAAP operating income of up to $4 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, share repurchase program, 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 2020 ended March 31, 2020, and LiveRamp's Quarterly Reports on Form 10-Q issued in fiscal year 2021.

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^Ⓡ, 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,
								$			%
		2020			2019			Variance			Variance
Revenues		104,661			90,143			14,518			16.1	%
Cost of revenue		34,897			41,460			(6,563	)		(15.8	%)
Gross profit		69,764			48,683			21,081			43.3	%
% Gross margin		66.7	%		54.0	%
Operating expenses:
Research and development		31,035			26,445			4,590			17.4	%
Sales and marketing		41,705			45,204			(3,499	)		(7.7	%)
General and administrative		24,495			27,262			(2,767	)		(10.1	%)
Gains, losses and other items, net		(619	)		45			(664	)		(1475.6	%)
Total operating expenses		96,616			98,956			(2,340	)		(2.4	%)
Loss from operations		(26,852	)		(50,273	)		23,421			46.6	%
% Margin		-25.7	%		-55.8	%
Total other income (expense)		(225	)		4,780			(5,005	)		(104.7	%)
Loss from operations before income taxes		(27,077	)		(45,493	)		18,416			40.5	%
Income taxes (benefit)		(3,109	)		(5,291	)		2,182			41.2	%
Net loss		(23,968	)		(40,202	)		16,234			40.4	%
Basic loss per share		(0.36	)		(0.59	)		0.23			38.9	%
Diluted loss per share:		(0.36	)		(0.59	)		0.23			38.9	%
Basic weighted average shares		66,010			67,684
Diluted weighted average shares		66,010			67,684

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,
								$			%
		2020			2019			Variance			Variance
Revenues		204,098			172,654			31,444			18.2	%
Cost of revenue		69,362			77,886			(8,524	)		(10.9	%)
Gross profit		134,736			94,768			39,968			42.2	%
% Gross margin		66.0	%		54.9	%
Operating expenses:
Research and development		58,024			50,167			7,857			15.7	%
Sales and marketing		80,332			88,348			(8,016	)		(9.1	%)
General and administrative		47,863			52,580			(4,717	)		(9.0	%)
Gains, losses and other items, net		1,376			2,321			(945	)		(40.7	%)
Total operating expenses		187,595			193,416			(5,821	)		(3.0	%)
Loss from operations		(52,859	)		(98,648	)		45,789			46.4	%
% Margin		-25.9	%		-57.1	%
Total other income		238			10,662			(10,424	)		(97.8	%)
Loss from operations before income taxes		(52,621	)		(87,986	)		35,365			40.2	%
Income taxes (benefit)		(6,925	)		(5,644	)		(1,281	)		(22.7	%)
Net loss		(45,696	)		(82,342	)		36,646			44.5	%
Basic loss per share		(0.69	)		(1.21	)		0.51			42.4	%
Diluted loss per share:		(0.69	)		(1.21	)		0.51			42.4	%
Basic weighted average shares		65,790			68,295
Diluted weighted average shares		65,790			68,295

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,
		2020			2019			2020			2019
Loss from operations before income taxes		(27,077	)		(45,493	)		(52,621	)		(87,986	)
Income taxes (benefit)		(3,109	)		(5,291	)		(6,925	)		(5,644	)
Net loss		(23,968	)		(40,202	)		(45,696	)		(82,342	)
Loss per share:
Basic		(0.36	)		(0.59	)		(0.69	)		(1.21	)
Diluted		(0.36	)		(0.59	)		(0.69	)		(1.21	)
Excluded items:
Purchased intangible asset amortization (cost of revenue)		4,350			5,369			9,656			8,492
Non-cash stock compensation (cost of revenue and operating expenses)		24,204			23,354			40,689			41,984
Accelerated depreciation (cost of revenue and operating expenses)		-			1,663			-			3,569
Transformation costs (general and administrative)		258			-			3,863			-
Restructuring and merger charges (gains, losses, and other)		(619	)		45			1,376			2,321
Total excluded items		28,193			30,431			55,584			56,366
Income (loss) from operations before income taxes and excluding items		1,116			(15,062	)		2,963			(31,620	)
Income taxes (benefit) (2)		(1,291	)		190			(357	)		(26	)
Non-GAAP net earnings (loss)		2,407			(15,252	)		3,320			(31,594	)
Non-GAAP earnings (loss) per share:
Basic		0.04			(0.23	)		0.05			(0.46	)
Diluted		0.03			(0.23	)		0.05			(0.46	)
Basic weighted average shares		66,010			67,684			65,790			68,295
Diluted weighted average shares		68,804			67,684			68,071			68,295

(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,
		2020			2019			2020			2019
Loss from operations		(26,852	)		(50,273	)		(52,859	)		(98,648	)
Excluded items:
Purchased intangible asset amortization (cost of revenue)		4,350			5,369			9,656			8,492
Non-cash stock compensation (cost of revenue and operating expenses)		24,204			23,354			40,689			41,984
Accelerated depreciation (cost of revenue and operating expenses)		-			1,663			-			3,569
Transformation costs (general and administrative)		258			-			3,863			-
Restructuring and merger charges (gains, losses, and other)		(619	)		45.00			1,376			2,321
Total excluded items		28,193			30,431			55,584			56,366
Income (loss) from operations before excluded items		1,341			(19,842	)		2,725			(42,282	)

(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,
		2020			2019			2020			2019
Net loss		(23,968	)		(40,202	)		(45,696	)		(82,342	)
Income taxes (benefit)		(3,109	)		(5,291	)		(6,925	)		(5,644	)
Other expense (income)		225			(4,780	)		(238	)		(10,662	)
Loss from operations		(26,852	)		(50,273	)		(52,859	)		(98,648	)
Depreciation and amortization		6,901			10,977			14,955			19,854
EBITDA		(19,951	)		(39,296	)		(37,904	)		(78,794	)
Other adjustments:
Non-cash stock compensation (cost of revenue and operating expenses)		24,204			23,354			40,689			41,984
Transformation costs (general and administrative)		258			-			3,863			0
Restructuring and merger charges (gains, losses, and other)		(619	)		45			1,376			2,321
Other adjustments		23,843			23,399			45,928			44,305
Adjusted EBITDA		3,892			(15,897	)		8,024			(34,489	)

(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,			$		%
		2020			2020			Variance		Variance
Assets
Current assets:
Cash and cash equivalents		650,691			717,811			(67,120	)	(9.4	%)
Restricted cash		14,815			14,815			-		n/a
Trade accounts receivable, net		99,362			92,761			6,601		7.1	%
Refundable income taxes		42,578			38,340			4,238		11.1	%
Other current assets		24,560			32,666			(8,106	)	(24.8	%)
Total current assets		832,006			896,393			(64,387	)	(7.2	%)
Property and equipment		43,604			44,786			(1,182	)	(2.6	%)
Less - accumulated depreciation and amortization		28,382			25,465			2,917		11.5	%
Property and equipment, net		15,222			19,321			(4,099	)	(21.2	%)
Intangible assets, net		36,709			45,200			(8,491	)	(18.8	%)
Goodwill		300,741			297,796			2,945		1.0	%
Deferred commissions, net		19,459			16,014			3,445		21.5	%
Other assets, net		34,500			27,165			7,335		27.0	%
		1,238,637			1,301,889			(63,252	)	(4.9	%)
Liabilities and Stockholders' Equity
Current liabilities:
Trade accounts payable		38,102			42,204			(4,102	)	(9.7	%)
Accrued payroll and related expenses		23,172			28,791			(5,619	)	(19.5	%)
Other accrued expenses		58,532			68,991			(10,459	)	(15.2	%)
Acquisition escrow payable		14,815			14,815			-		n/a
Deferred revenue		6,546			6,581			(35	)	(0.5	%)
Total current liabilities		141,167			161,382			(20,215	)	(12.5	%)
Other liabilities		46,608			52,995			(6,387	)	(12.1	%)
Stockholders' equity:
Preferred stock		-			-			-		n/a
Common stock		14,570			14,394			176		1.2	%
Additional paid-in capital		1,552,303			1,496,565			55,738		3.7	%
Retained earnings		1,499,398			1,545,094			(45,696	)	(3.0	%)
Accumulated other comprehensive income		6,944			5,745			1,199		20.9	%
Treasury stock, at cost		(2,022,353	)		(1,974,286	)		(48,067	)	(2.4	%)
Total stockholders' equity		1,050,862			1,087,512			(36,650	)	(3.4	%)
		1,238,637			1,301,889			(63,252	)	(4.9	%)

LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
		For the Three Months Ended
		September 30,
		2020			2019
Cash flows from operating activities:
Net loss		(23,968	)		(40,202	)
Non-cash operating activities:
Depreciation and amortization		6,901			10,977
Loss (gain) on disposal or impairment of assets		331			(225	)
Provision for doubtful accounts		1,192			1,468
Deferred income taxes		187			(5,090	)
Non-cash stock compensation expense		24,204			23,354
Changes in operating assets and liabilities:
Accounts receivable		(3,724	)		(7,807	)
Deferred commissions		(1,764	)		(780	)
Other assets		2,799			(7,497	)
Accounts payable and other liabilities		2,013			3,009
Income taxes		(2,478	)		(6,926	)
Deferred revenue		556			968
Net cash provided by (used in) operating activities		6,249			(28,751	)
Cash flows from investing activities:
Capital expenditures		(296	)		(2,641	)
Proceeds from sales of property and equipment		-			517
Payments for investments		(1,206	)		-
Cash paid in acquisition, net of cash received		(2,933	)		(100,886	)
Net cash used in investing activities		(4,435	)		(103,010	)
Cash flows from financing activities:
Proceeds related to the issuance of common stock under stock and employee benefit plans		2,424			1,032
Shares repurchased for tax withholdings upon vesting of stock-based awards		(3,928	)		(1,814	)
Acquisition of treasury stock		-			(80,374	)
Net cash used in financing activities		(1,504	)		(81,156	)
Effect of exchange rate changes on cash		486			(302	)
Net change in cash and cash equivalents		796			(213,219	)
Cash and cash equivalents at beginning of period		664,710			1,005,477
Cash and cash equivalents at end of period		665,506			792,258
Supplemental cash flow information:
Cash paid (received) during the period for:
Income taxes		(822	)		6,042

LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
		For the Six Months Ended
		September 30,
		2020			2019
Cash flows from operating activities:
Net loss		(45,696	)		(82,342	)
Non-cash operating activities:
Depreciation and amortization		14,955			19,854
Loss (gain) on disposal or impairment of assets		333			(140	)
Provision for doubtful accounts		2,522			2,430
Deferred income taxes		(485	)		(5,083	)
Non-cash stock compensation expense		40,689			41,984
Changes in operating assets and liabilities:
Accounts receivable		(9,584	)		(11,258	)
Deferred commissions		(3,445	)		(606	)
Other assets		7,703			(3,897	)
Accounts payable and other liabilities		(20,671	)		2,821
Income taxes		(3,583	)		(7,789	)
Deferred revenue		(101	)		(133	)
Net cash used in operating activities		(17,363	)		(44,159	)
Cash flows from investing activities:
Capital expenditures		(1,128	)		(7,529	)
Proceeds from sales of property and equipment		-			517
Payments for investments		(1,873	)		-
Cash paid in acquisition, net of cash received		(2,933	)		(105,365	)
Net cash used in investing activities		(5,934	)		(112,377	)
Cash flows from financing activities:
Proceeds related to the issuance of common stock under stock and employee benefit plans		3,561			2,092
Shares repurchased for tax withholdings upon vesting of stock-based awards		(5,755	)		(13,907	)
Acquisition of treasury stock		(42,312	)		(100,473	)
Net cash used in financing activities		(44,506	)		(112,288	)
Effect of exchange rate changes on cash		683			(391	)
Net change in cash and cash equivalents		(67,120	)		(269,215	)
Cash and cash equivalents at beginning of period		732,626			1,061,473
Cash and cash equivalents at end of period		665,506			792,258
Supplemental cash flow information:
Cash paid (received) during the period for:
Income taxes		(2,863	)		6,152

LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
CALCULATION OF FREE CASH FLOW TO EQUITY (1)
(Unaudited)
(Dollars in thousands)
	06/30/19		09/30/19		12/31/19		03/31/20		FY2020			06/30/20		09/30/20		FY2021
Net Cash Provided by (Used in) Operating Activities	(15,408	)	(28,751	)	15,804		(220	)	(28,575	)		(23,612	)	6,249		(17,363	)
Less:
Capital expenditures	(4,888	)	(2,641	)	(2,773	)	(1,409	)	(11,711	)		(832	)	(296	)	(1,128	)
Free Cash Flow to Equity	(20,296	)	(31,392	)	13,031		(1,629	)	(40,286	)		(24,444	)	5,953		(18,491	)

(1) This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our condensed consolidated financial statements prepared in accordance with GAAP. For a detailed explanation of the adjustments made to comparable GAAP measures, the reasons why management uses these measures and the material limitations on the usefulness of these measures, please see Appendix A.

LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except per share amounts)
																					Q2 FY21 to Q2 FY20
			06/30/19		09/30/19		12/31/19		03/31/20		FY2020			06/30/20		09/30/20		FY2021			%		$
	Revenues		82,511		90,143		102,217		105,701		380,572			99,437		104,661		204,098			17.6	%	14,518
	Cost of revenue		36,426		41,460		37,966		36,852		152,704			34,465		34,897		69,362			(18.0	%)	(6,563	)
	Gross profit		46,085		48,683		64,251		68,849		227,868			64,972		69,764		134,736			45.7	%	21,081
	% Gross margin		55.9	%	54.0	%	62.9	%	65.1	%	59.9	%		65.3	%	66.7	%	66.0	%
	Operating expenses
	Research and development		23,722		26,445		27,403		28,411		105,981			26,989		31,035		58,024			19.3	%	4,590
	Sales and marketing		43,144		45,204		51,993		48,564		188,905			38,627		41,705		80,332			(8.1	%)	(3,499	)
	General and administrative		25,318		27,262		26,107		30,216		108,903			23,368		24,495		47,863			(10.9	%)	(2,767	)
	Gains, losses and other items, net		2,276		45		233		2,447		5,001			1,995		(619	)	1,376			(29.2	%)	(664	)
	Total operating expenses		94,460		98,956		105,736		109,638		408,790			90,979		96,616		187,595			(2.5	%)	(2,340	)
	Loss from operations		(48,375	)	(50,273	)	(41,485	)	(40,789	)	(180,922	)		(26,007	)	(26,852	)	(52,859	)		48.4	%	23,421
	% Margin		-58.6	%	-55.8	%	-40.6	%	-38.6	%	-47.5	%		-26.2	%	-25.7	%	-25.9	%
	Total other income (expense)		5,882		4,780		3,158		1,565		15,385			463		(225	)	238			(85.1	%)	(5,005	)
	Loss from continuing operations before income taxes		(42,493	)	(45,493	)	(38,327	)	(39,224	)	(165,537	)		(25,544	)	(27,077	)	(52,621	)		43.3	%	18,416
	Income taxes (benefit)		(353	)	(5,291	)	(287	)	(34,345	)	(40,276	)		(3,816	)	(3,109	)	(6,925	)		618.1	%	2,182
	Net loss from continuing operations		(42,140	)	(40,202	)	(38,040	)	(4,879	)	(125,261	)		(21,728	)	(23,968	)	(45,696	)		38.5	%	16,234
	Earnings from discontinued operations, net of tax		-		-		-		750		750			-		-		-			n/a		-
	Net loss		(42,140	)	(40,202	)	(38,040	)	(4,129	)	(124,511	)		(21,728	)	(23,968	)	(45,696	)		38.5	%	16,234
	Diluted loss per share		(0.61	)	(0.59	)	(0.56	)	(0.06	)	(1.84	)		(0.33	)	(0.36	)	(0.69	)		37.8	%	0.23
	Diluted loss per share continuing operations		(0.61	)	(0.59	)	(0.56	)	(0.07	)	(1.85	)		(0.33	)	(0.36	)	(0.69	)		37.8	%	0.23
	Some loss per share amounts may not add due to rounding.
	Basic shares		68,906		67,684		67,473		66,977		67,760			65,570		66,010		65,790
	Diluted shares		68,906		67,684		67,473		66,977		67,760			65,570		66,010		65,790

LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP EPS (1)
(Unaudited)
(Dollars in thousands, except per share amounts)
		06/30/19		09/30/19		12/31/19		03/31/20		FY2020			06/30/20		09/30/20		FY2021
Loss from continuing operations before income taxes		(42,493	)	(45,493	)	(38,327	)	(39,224	)	(165,537	)		(25,544	)	(27,077	)	(52,621	)
Income taxes (benefit)		(353	)	(5,291	)	(287	)	(34,345	)	(40,276	)		(3,816	)	(3,109	)	(6,925	)
Net loss from continuing operations		(42,140	)	(40,202	)	(38,040	)	(4,879	)	(125,261	)		(21,728	)	(23,968	)	(45,696	)
Earnings from discontinued operations, net of tax		-		-		-		750		750			-		-		-
Net loss		(42,140	)	(40,202	)	(38,040	)	(4,129	)	(124,511	)		(21,728	)	(23,968	)	(45,696	)
Loss per share:
Basic		(0.61	)	(0.59	)	(0.56	)	(0.06	)	(1.84	)		(0.33	)	(0.36	)	(0.69	)
Diluted		(0.61	)	(0.59	)	(0.56	)	(0.06	)	(1.84	)		(0.33	)	(0.36	)	(0.69	)
Excluded items:
Purchased intangible asset amortization (cost of revenue)		3,123		5,369		5,369		5,181		19,042			5,306		4,350		9,656
Non-cash stock compensation (cost of revenue and operating expenses)		18,630		23,354		30,295		17,168		89,447			16,485		24,204		40,689
Accelerated depreciation (cost of revenue and operating expenses)		1,906		1,663		-		-		3,569			-		-		-
Restructuring and merger charges (gains, losses, and other)		2,276		45		233		2,447		5,001			1,995		(619	)	1,376
Transformation costs (general and administrative)		-		-		-		-		-			3,605		258		3,863
Total excluded items, continuing operations		25,935		30,431		35,897		24,796		117,059			27,391		28,193		55,584
Income (loss) from continuing operations before income taxes and excluding items		(16,558	)	(15,062	)	(2,430	)	(14,428	)	(48,478	)		1,847		1,116		2,963
Income taxes (benefit)		(216	)	190		(227	)	(11,199	)	(11,452	)		934		(1,291	)	(357	)
Non-GAAP net earnings (loss) from continuing operations		(16,342	)	(15,252	)	(2,203	)	(3,229	)	(37,026	)		913		2,407		3,320
Non-GAAP earnings (loss) per share from continuing operations:
Basic		(0.24	)	(0.23	)	(0.03	)	(0.05	)	(0.55	)		0.01		0.04		0.05
Diluted		(0.24	)	(0.23	)	(0.03	)	(0.05	)	(0.55	)		0.01		0.03		0.05
Basic weighted average shares		68,906		67,684		67,473		66,977		67,760			65,570		66,010		65,790
Diluted weighted average shares		68,906		67,684		67,473		66,977		67,760			67,337		68,804		68,071
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)
		06/30/19		09/30/19		12/31/19		03/31/20		FY2020			06/30/20			09/30/20			FY2021
Expenses:
Cost of revenue		36,426		41,460		37,966		36,852		152,704			34,465			34,897			69,362
Research and development		23,722		26,445		27,403		28,411		105,981			26,989			31,035			58,024
Sales and marketing		43,144		45,204		51,993		48,564		188,905			38,627			41,705			80,332
General and administrative		25,318		27,262		26,107		30,216		108,903			23,368			24,495			47,863
Gains, losses and other items, net		2,276		45		233		2,447		5,001			1,995			(619	)		1,376
Gross profit:		46,085		48,683		64,251		68,849		227,868			64,972			69,764			134,736
% Gross margin		55.9	%	54.0	%	62.9	%	65.1	%	59.9	%		65.3	%		66.7	%		66.0	%
Excluded items:
Purchased intangible asset amortization (cost of revenue)		3,123		5,369		5,369		5,181		19,042			5,306			4,350			9,656
Non-cash stock compensation (cost of revenue)		755		1,060		1,028		926		3,769			775			913			1,688
Non-cash stock compensation (research and development)		4,451		6,346		6,462		6,001		23,260			5,886			7,713			13,599
Non-cash stock compensation (sales and marketing)		8,920		9,758		15,670		3,678		38,026			7,123			9,233			16,356
Non-cash stock compensation (general and administrative)		4,504		6,190		7,135		6,563		24,392			2,701			6,345			9,046
Accelerated depreciation (cost of revenue)		1,487		1,245		-		-		2,732			-			-			-
Accelerated depreciation (general and administrative)		419		418		-		-		837			-			-			-
Restructuring and merger charges (gains, losses, and other)		2,276		45		233		2,447		5,001			1,995			(619	)		1,376
Transformation costs (general and administrative)		-		-		-		-		-			3,605			258			3,863
Total excluded items		25,935		30,431		35,897		24,796		117,059			27,391			28,193			55,584
Expenses, excluding items:
Cost of revenue		31,061		33,786		31,569		30,745		127,161			28,384			29,634			58,018
Research and development		19,271		20,099		20,941		22,410		82,721			21,103			23,322			44,425
Sales and marketing		34,224		35,446		36,323		44,886		150,879			31,504			32,472			63,976
General and administrative		20,395		20,654		18,972		23,653		83,674			17,062			17,892			34,954
Gains, losses and other items, net		-		-		-		-		-			-			-			-
Gross profit, excluding items:		51,450		56,357		70,648		74,956		253,411			71,053			75,027			146,080
% Gross margin		62.4	%	62.5	%	69.1	%	70.9	%	66.6	%		71.5	%		71.7	%		71.6	%

(1) This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our condensed consolidated financial statements prepared in accordance with GAAP. For a detailed explanation of the adjustments made to comparable GAAP measures, the reasons why management uses these measures, the usefulness of these measures and the material limitations on the usefulness of these measures, please see Appendix A.

LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP OPERATING INCOME (LOSS) GUIDANCE (1)
(Unaudited)
(Dollars in thousands)
		For the quarter ending
		December 31, 2020
GAAP loss from operations		(25,000	)
Excluded items:
Purchased intangible asset amortization		4,000
Non-cash stock compensation		25,000
Total excluded items		29,000
Non-GAAP income from operations		$ 4,000

(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 2021 FINANCIAL RESULTS
EXPLANATION OF NON-GAAP MEASURES AND OTHER KEY METRICS

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

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

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

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

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

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

Accelerated depreciation: In the prior year we excluded 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 was 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.

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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