LiveRamp Announces Third Quarter Results

LiveRamp (NYSE: RAMP), the leading data collaboration platform, today announced its financial results for the quarter ended December 31, 2022.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20230207005323/en/

Q3 Financial Highlights¹

• Total revenue was $159 million, up 13%.
• Subscription revenue was $126 million, up 14%, and accounted for 80% of total revenue.
• Marketplace & Other revenue was $32 million, up 9%.
• GAAP gross profit was $115 million, up 13%. GAAP gross margin of 73% was unchanged. Non-GAAP gross profit was $121 million, up 12%. Non-GAAP gross margin of 76% contracted by 1 percentage point.
• GAAP operating loss was $24 million compared to $14 million. Non-GAAP operating income was $26 million compared to $15 million. Non-GAAP operating margin of 16% expanded by 6 percentage points.
• GAAP loss per share was $0.46 and non-GAAP earnings per share were $0.28.
• Net cash provided by operating activities was $16 million compared to $25 million.
• In the quarter, the Company repurchased approximately 2.3 million shares for $50 million under its share repurchase program. Fiscal year to date, the Company has repurchased approximately 6.1 million shares for $150 million. Since inception of the program in August 2011, the Company has returned approximately $1.4 billion in capital to shareholders.
• On December 20, 2022 the Company’s Board of Directors approved an extension of the share repurchase program by two years to December 31, 2024 and a $100 million increase in the authorization. There is currently $218 million available under the authorization.

__________
¹ Unless otherwise indicated, all comparisons are to the prior year period.

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

"We continue winning with the world's largest brand marketers, reinforcing that we are essential infrastructure for the advertising ecosystem," said LiveRamp CEO Scott Howe. "Our identity and collaboration products, with connections to over 2,000 publishers, uniquely support all of their marketing activities."

“We delivered solid third quarter results, with top-line growth and strong free cash flow,” added President and CFO Warren Jenson. “Looking to FY24, we expect to deliver another year of strong operating profit growth and to return a substantial portion of free cash flow to shareowners through share repurchases.”

GAAP and Non-GAAP Results

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

		Q3 Fiscal 2023				Q3 Fiscal 2022
		Results				Results
		GAAP		Non-GAAP		GAAP		Non-GAAP
Subscription revenue		$126		—		$111		—
YoY change %		14%				19%
Marketplace & Other revenue		$32		—		$29		—
YoY change %		9%				12%
Total revenue		$159		—		$141		—
YoY change %		13%				17%
Gross profit		$115		$121		$102		$108
% Gross margin		73%		76%		73%		77%
YoY change, pts		0 pts		(1) pts		4 pts		3 pts
Operating income (loss)		($24)		$26		($14)		$15
% Operating margin		(15%)		16%		(10%)		10%
YoY change, pts		(5) pts		6 pts		3 pts		0 pts
Net earnings (loss)		($30)		$19		($15)		$10
Earnings (loss) per share		($0.46)		$0.28		($0.23)		$0.14
Shares to calculate EPS		64.8		65.4		68.2		69.9
YoY change %		(5%)		(7%)		3%		0%
Net operating cash flow		$16		—		$25		—
Free cash flow to equity		—		$16		—		$24
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 attached to this press release.

Additional Business Highlights & Metrics

• The Company’s Authenticated Traffic Solution (ATS) has reached global scale. There are currently more than 160 supply-side platforms (SSPs) and demand-side platforms (DSPs) live or committed to bid on RampID and ATS, including The Trade Desk, Xandr, Amobee, Criteo, Roku Oneview, and MediaMath. Further, in March 2022, LiveRamp announced an expanded partnership with The Trade Desk to power European Unified ID (EUID) via its ATS infrastructure.
• To date, over 2,000 publishers, representing more than 12,000 deployed domains, have integrated ATS worldwide, including Amazon Publisher Services, Microsoft, Hearst, CafeMedia, Leaf Group, Prisma Media and Burda.
• At its November 2022 re:Invent conference, Amazon Web Services (AWS) named LiveRamp as a key industry partner for its new Marketing and Advertising Initiative and forthcoming AWS Clean Rooms service launch. LiveRamp published its new embedded identity resolution solutions in the AWS Marketplace in December 2022 ahead of the AWS Clean Rooms release in January 2023. Support for AWS Clean Rooms gives customers a collaborative approach to more effective media measurement and planning. As part of LiveRamp’s continued work with AWS, this latest integration reinforces our commitment to help clients improve their customer intelligence through accurate and secure data collaboration in cloud environments.
• Recently, LiveRamp and Pinterest announced a new partnership to pilot clean rooms for select advertising partners using LiveRamp’s data collaboration technology, Safe Haven. Grocery retailer Albertsons will be the first advertiser to use the new solution to support its retail media network. LiveRamp’s Safe Haven platform provides a protected environment where brands can join select first-party data with Pinterest platform data without having to share or reveal customers’ personal identifiable information. This data sharing will enable enhanced measurement of advertising campaigns, such as closed-loop attribution, without compromising data protection.
• LiveRamp has 910 direct subscription customers, up from 890 in the prior year period.
• LiveRamp has 94 customers whose subscription contracts exceed $1 million in annual revenue, up from 86 in the prior year period.
• During the third quarter, subscription net retention was 101% and platform net retention was 102%.
• Current remaining performance obligations (CRPO), which is contracted and committed revenue expected to be recognized over the next 12 months, was $324 million, up 12% compared to the prior year period.

Financial Outlook

LiveRamp’s non-GAAP operating income guidance excludes the impact of non-cash stock compensation, purchased intangible asset amortization, and restructuring and related charges.

For the fourth quarter of fiscal 2023, LiveRamp expects to report:

• Revenue of between $147 million and $152 million, an increase of between 4% and 7% year-over-year
• GAAP operating loss of between $26 million and $23 million
• Non-GAAP operating income of between $13 million and $16 million

For fiscal 2023, LiveRamp updates its guidance and expects to report:

• Revenue of between $595 million and $600 million, an increase of approximately 13% year-over-year
• GAAP operating loss of between $105 million and $102 million
• Non-GAAP operating income of between $60 million and $63 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 data collaboration platform trusted by forward-looking global companies to connect customer data from anywhere to everywhere. The category-defining pioneer with decades of expertise in online-offline identity resolution, LiveRamp is setting the new standard for a 360° customer view in the modern data stack through secure, privacy-first collaboration within companies, across companies, and between companies and their media and marketing partners to personalize and improve the customer journey. 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 for fiscal 2023, fiscal 2024 and beyond, 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 the ongoing COVID-19 pandemic, rising interest rates, cost increases and general inflationary pressure and the associated impacts 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 include maintaining our culture and our ability to innovate and evolve while operating in a hybrid work environment, with some employees working remotely at least some of the time within a rapidly changing industry, while also avoiding disruption from reductions in our current workforce as well as disruptions resulting from acquisition and divestiture activities. Our international operations are also subject to risks, including war and civil unrest, 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, or the risk that our current insurance coverage may not be adequate for such a breach, that an insurer might deny coverage for a claim or that such insurance will continue to be available to us on commercially reasonable terms, or at all, 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 2022 ended March 31, 2022, and LiveRamp's Quarterly Reports on Form 10-Q issued in fiscal year 2023.

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.

ERAMP

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
		December 31,
								$		%
		2022			2021			Variance		Variance
Revenues		158,615			140,604			18,011		12.8	%
Cost of revenue		43,287			38,557			4,730		12.3	%
Gross profit		115,328			102,047			13,281		13.0	%
% Gross margin		72.7	%		72.6	%
Operating expenses:
Research and development		43,175			41,870			1,305		3.1	%
Sales and marketing		47,702			46,324			1,378		3.0	%
General and administrative		36,657			27,639			9,018		32.6	%
Gains, losses and other items, net		11,743			-			11,743		n/a
Total operating expenses		139,277			115,833			23,444		20.2	%
Loss from operations		(23,949	)		(13,786	)		(10,163	)	(73.7	%)
% Margin		-15.1	%		-9.8	%
Total other expense, net		(736	)		(241	)		(495	)	(205.4	%)
Loss from continuing operations before income taxes		(24,685	)		(14,027	)		(10,658	)	(76.0	%)
Income tax expense		5,835			1,348			4,487		332.9	%
Net loss from continuing operations		(30,520	)		(15,375	)		(15,145	)	(98.5	%)
Earnings from discontinued operations, net of tax		836			-			836		n/a
Net loss		(29,684	)		(15,375	)		(14,309	)	(93.1	%)
Basic earnings (loss) per share:
Continuing operations		(0.47	)		(0.23	)		(0.25	)	(108.9	%)
Discontinued operations		0.01			-			0.01		n/a
Basic loss per share		(0.46	)		(0.23	)		(0.23	)	(103.2	%)
Diluted earnings (loss) per share:
Continuing operations		(0.47	)		(0.23	)		(0.25	)	(108.9	%)
Discontinued operations		0.01			-			0.01		n/a
Diluted loss per share:		(0.46	)		(0.23	)		(0.23	)	(103.2	%)
Basic weighted average shares		64,784			68,190
Diluted weighted average shares		64,784			68,190

LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except per share amounts)
		For the Nine Months Ended
		December 31,
								$		%
		2022			2021			Variance		Variance
Revenues		447,957			386,932			61,025		15.8	%
Cost of revenue		126,612			107,951			18,661		17.3	%
Gross profit		321,345			278,981			42,364		15.2	%
% Gross margin		71.7	%		72.1	%
Operating expenses:
Research and development		136,975			112,434			24,541		21.8	%
Sales and marketing		144,931			127,812			17,119		13.4	%
General and administrative		92,519			75,008			17,511		23.3	%
Gains, losses and other items, net		25,593			1,296			24,297		1874.8	%
Total operating expenses		400,018			316,550			83,468		26.4	%
Loss from operations		(78,673	)		(37,569	)		(41,104	)	(109.4	%)
% Margin		-17.6	%		-9.7	%
Total other income, net		2,211			30,510			(28,299	)	(92.8	%)
Loss from continuing operations before income taxes		(76,462	)		(7,059	)		(69,403	)	(983.2	%)
Income tax expense (benefit)		11,712			(2,618	)		14,330		547.4	%
Net loss from continuing operations		(88,174	)		(4,441	)		(83,733	)	(1885.5	%)
Earnings from discontinued operations, net of tax		836			-			836		n/a
Net loss		(87,338	)		(4,441	)		(82,897	)	(1866.6	%)
Basic earnings (loss) per share:
Continuing operations		(1.32	)		(0.07	)		(1.26	)	(1927.9	%)
Discontinued operations		0.01			-			0.01		n/a
Basic earnings (loss) per share		(1.31	)		(0.07	)		(1.24	)	(1908.6	%)
Diluted earnings (loss) per share:
Continuing operations		(1.32	)		(0.07	)		(1.26	)	(1927.9	%)
Discontinued operations		0.01			-			0.01		n/a
Diluted earnings (loss) per share:		(1.31	)		(0.07	)		(1.24	)	(1908.6	%)
Basic weighted average shares		66,761			68,187
Diluted weighted average shares		66,761			68,187

LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP EPS (1)
(Unaudited)
(Dollars in thousands, except per share amounts)
		For the Three Months Ended						For the Nine Months Ended
		December 31,						December 31,
		2022			2021			2022			2021
Loss from continuing operations before income taxes		(24,685	)		(14,027	)		(76,462	)		(7,059	)
Income tax expense (benefit)		5,835			1,348			11,712			(2,618	)
Net loss from continuing operations		(30,520	)		(15,375	)		(88,174	)		(4,441	)
Earnings from discontinued operations, net of tax		836			-			836			-
Net loss		(29,684	)		(15,375	)		(87,338	)		(4,441	)
Loss per share:
Basic		(0.46	)		(0.23	)		(1.31	)		(0.07	)
Diluted		(0.46	)		(0.23	)		(1.31	)		(0.07	)
Excluded items:
Purchased intangible asset amortization (cost of revenue)		4,209			4,647			13,489			13,904
Non-cash stock compensation (cost of revenue and operating expenses)		29,624			23,758			81,142			61,475
Transformation costs (general and administrative)		4,112			-			5,362			-
Restructuring and merger charges (gains, losses, and other)		11,743			-			25,593			1,296
Gain on retained profits interest (other income)		-			(183	)		-			(30,235	)
Total excluded items, continuing operations		49,688			28,222			125,586			46,440
Income from continuing operations before income taxes and excluding items		25,003			14,195			49,124			39,381
Income tax expense (2)		6,468			4,271			12,262			5,124
Non-GAAP net earnings from continuing operations		18,535			9,924			36,862			34,257
Non-GAAP earnings per share from continuing operations:
Basic		0.29			0.15			0.55			0.50
Diluted		0.28			0.14			0.55			0.49
Basic weighted average shares		64,784			68,190			66,761			68,187
Diluted weighted average shares		65,356			69,938			67,373			69,626

(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 Nine Months Ended
		December 31,						December 31,
		2022			2021			2022			2021
Loss from continuing operations		(23,949	)		(13,786	)		(78,673	)		(37,569	)
Excluded items:
Purchased intangible asset amortization (cost of revenue)		4,209			4,647			13,489			13,904
Non-cash stock compensation (cost of revenue and operating expenses)		29,624			23,758			81,142			61,475
Transformation costs (general and administrative)		4,112			-			5,362			-
Restructuring and merger charges (gains, losses, and other)		11,743			-			25,593			1,296
Total excluded items		49,688			28,405			125,586			76,675
Income from continuing operations before excluded items		25,739			14,619			46,913			39,106

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

LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
RECONCILIATION OF ADJUSTED EBITDA (1)
(Unaudited)
(Dollars in thousands)
		For the Three Months Ended						For the Nine Months Ended
		December 31,						December 31,
		2022			2021			2022			2021
Net loss from continuing operations		(30,520	)		(15,375	)		(88,174	)		(4,441	)
Income tax expense (benefit)		5,835			1,348			11,712			(2,618	)
Other expense (income)		736			241			(2,211	)		(30,510	)
Loss from operations		(23,949	)		(13,786	)		(78,673	)		(37,569	)
Depreciation and amortization		5,131			5,827			16,561			18,231
EBITDA		(18,818	)		(7,959	)		(62,112	)		(19,338	)
Other adjustments:
Non-cash stock compensation (cost of revenue and operating expenses)		29,624			23,758			81,142			61,475
Transformation costs (general and administrative)		4,112			-			5,362			-
Restructuring and merger charges (gains, losses, and other)		11,743			-			25,593			1,296
Other adjustments		45,479			23,758			112,097			62,771
Adjusted EBITDA		26,661			15,799			49,985			43,433

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

LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
		December 31,			March 31,			$		%
		2022			2022			Variance		Variance
Assets
Current assets:
Cash and cash equivalents		453,516			600,162			(146,646	)	(24.4	%)
Trade accounts receivable, net		173,409			148,343			25,066		16.9	%
Refundable income taxes, net		27,097			30,354			(3,257	)	(10.7	%)
Other current assets		42,172			36,975			5,197		14.1	%
Total current assets		696,194			815,834			(119,640	)	(14.7	%)
Property and equipment		42,954			45,001			(2,047	)	(4.5	%)
Less - accumulated depreciation and amortization		34,145			33,470			675		2.0	%
Property and equipment, net		8,809			11,531			(2,722	)	(23.6	%)
Intangible assets, net		13,203			26,718			(13,515	)	(50.6	%)
Goodwill		363,129			363,845			(716	)	(0.2	%)
Deferred commissions, net		32,717			30,594			2,123		6.9	%
Other assets, net		52,431			85,214			(32,783	)	(38.5	%)
		1,166,483			1,333,736			(167,253	)	(12.5	%)
Liabilities and Stockholders' Equity
Current liabilities:
Trade accounts payable		83,938			83,197			741		0.9	%
Accrued payroll and related expenses		33,250			39,188			(5,938	)	(15.2	%)
Other accrued expenses		42,394			46,067			(3,673	)	(8.0	%)
Deferred revenue		16,195			16,114			81		0.5	%
Total current liabilities		175,777			184,566			(8,789	)	(4.8	%)
Other liabilities		79,097			86,110			(7,013	)	(8.1	%)
Stockholders' equity:
Preferred stock		-			-			-		n/a
Common stock		15,205			14,984			221		1.5	%
Additional paid-in capital		1,810,383			1,721,118			89,265		5.2	%
Retained earnings		1,333,655			1,420,993			(87,338	)	(6.1	%)
Accumulated other comprehensive income		4,182			5,730			(1,548	)	(27.0	%)
Treasury stock, at cost		(2,251,816	)		(2,099,765	)		(152,051	)	(7.2	%)
Total stockholders' equity		911,609			1,063,060			(151,451	)	(14.2	%)
		1,166,483			1,333,736			(167,253	)	(12.5	%)

LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
		For the Three Months Ended
		December 31,
		2022			2021
Cash flows from operating activities:
Net loss		(29,684	)		(15,375	)
Earnings from discontinued operations, net of tax		(836	)		-
Non-cash operating activities:
Depreciation and amortization		5,131			5,827
Loss on disposal or impairment of assets		4,124			-
Lease impairments		5,940			-
Gain on distribution from retained profits interest		-			(183	)
Provision for doubtful accounts		613			1,845
Deferred income taxes		(14	)		315
Non-cash stock compensation expense		29,624			23,758
Changes in operating assets and liabilities:
Accounts receivable		(15,722	)		(27,803	)
Deferred commissions		(1,203	)		(1,495	)
Other assets		(7,372	)		(1,331	)
Accounts payable and other liabilities		20,168			34,358
Income taxes		5,454			1,630
Deferred revenue		(453	)		3,927
Net cash provided by operating activities		15,770			25,473
Cash flows from investing activities:
Capital expenditures		(179	)		(1,316	)
Purchases of investments		(3,000	)		-
Proceeds from sales of investments		3,000			-
Purchases of strategic investments		(500	)		-
Distribution from retained profits interest		-			184
Cash paid in acquisition, net of cash received		-			(2,008	)
Net cash used in investing activities		(679	)		(3,140	)
Cash flows from financing activities:
Proceeds related to the issuance of common stock under stock and employee benefit plans		1,664			1,905
Shares repurchased for tax withholdings upon vesting of stock-based awards		(764	)		(1,674	)
Acquisition of treasury stock		(49,906	)		(5,147	)
Net cash used in financing activities		(49,006	)		(4,916	)
Cash flows from discontinued operations:
From operating activities		836			-
Net cash provided by discontinued operations		836			-
Effect of exchange rate changes on cash		993			(48	)
Net change in cash and cash equivalents		(32,086	)		17,369
Cash and cash equivalents at beginning of period		485,602			544,321
Cash and cash equivalents at end of period		453,516			561,690
Supplemental cash flow information:
Cash paid (received) during the period for:
Income taxes		(751	)		(246	)
Operating lease assets obtained in exchange for operating lease liabilities		-			17,211
Purchases of property, plant, & equipment, net remaining unpaid at end of period		77			353

LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
		For the Nine Months Ended
		December 31,
		2022			2021
Cash flows from operating activities:
Net loss		(87,338	)		(4,441	)
Earnings from discontinued operations, net of tax		(836	)		-
Non-cash operating activities:
Depreciation and amortization		16,561			18,231
Loss on disposal or impairment of assets		4,121			142
Lease impairments		18,165			-
Gain on sale of strategic investments		(194	)		-
Gain on distribution from retained profits interest		-			(30,235	)
Provision for doubtful accounts		1,728			3,127
Deferred income taxes		204			(456	)
Non-cash stock compensation expense		81,142			61,475
Changes in operating assets and liabilities:
Accounts receivable		(27,171	)		(45,876	)
Deferred commissions		(2,123	)		(6,864	)
Other assets		1,588			22,077
Accounts payable and other liabilities		(9,309	)		(2,471	)
Income taxes		6,967			998
Deferred revenue		271			3,426
Net cash provided by operating activities		3,776			19,133
Cash flows from investing activities:
Capital expenditures		(4,593	)		(2,619	)
Purchases of investments		(3,000	)		-
Proceeds from sales of investments		3,000			-
Purchases of strategic investments		(500	)		-
Proceeds from sales of strategic investments		400			-
Distribution from retained profits interest		-			31,184
Cash paid in acquisition, net of cash received		-			(10,376	)
Net cash provided by (used in) investing activities		(4,693	)		18,189
Cash flows from financing activities:
Proceeds related to the issuance of common stock under stock and employee benefit plans		6,255			6,183
Shares repurchased for tax withholdings upon vesting of stock-based awards		(2,054	)		(14,216	)
Acquisition of treasury stock		(149,997	)		(49,224	)
Net cash used in financing activities		(145,796	)		(57,257	)
Cash flows from discontinued operations:
From operating activities		836			-
Net cash provided by discontinued operations		836			-
Effect of exchange rate changes on cash		(769	)		(62	)
Net change in cash and cash equivalents		(146,646	)		(19,997	)
Cash and cash equivalents at beginning of period		600,162			581,687
Cash and cash equivalents at end of period		453,516			561,690
Supplemental cash flow information:
Cash paid (received) during the period for:
Income taxes		3,418			(2,815	)
Operating lease assets obtained in exchange for operating lease liabilities		-			52,902
Purchases of property, plant, & equipment, net remaining unpaid at end of period		77			353

LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
CALCULATION OF FREE CASH FLOW TO EQUITY (1)
(Unaudited)
(Dollars in thousands)
		06/30/21			09/30/21			12/31/21			03/31/22			FY2022			06/30/22			09/30/22			12/31/22			FY2023
Net Cash Provided by (Used in) Operating Activities-Continuing Operations		(17,241	)		10,901			25,473			58,944			78,077			(33,369	)		21,375			15,770			3,776
Less:
Capital expenditures		(427	)		(876	)		(1,316	)		(1,880	)		(4,499	)		(1,741	)		(2,673	)		(179	)		(4,593	)
Free Cash Flow to Equity		(17,668	)		10,025			24,157			57,064			73,578			(35,110	)		18,702			15,591			(817	)

(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)
																													FY23 to FY22
		06/30/21			09/30/21			12/31/21			03/31/22			FY2022			06/30/22			09/30/22			12/31/22			FY2023			%			$
Revenues		119,038			127,290			140,604			141,725			528,657			142,243			147,099			158,615			447,957			14.1	%		18,011
Cost of revenue		34,315			35,079			38,557			39,476			147,427			41,021			42,304			43,287			126,612			13.5	%		4,730
Gross profit		84,723			92,211			102,047			102,249			381,230			101,222			104,795			115,328			321,345			13.6	%		12,584
% Gross margin		71.2	%		72.4	%		72.6	%		72.1	%		72.1	%		71.2	%		71.2	%		72.7	%		71.7	%
Operating expenses
Research and development		34,776			35,788			41,870			45,501			157,935			47,661			46,139			43,175			136,975			3.6	%		1,305
Sales and marketing		41,979			39,509			46,324			54,951			182,763			51,280			45,949			47,702			144,931			3.5	%		1,378
General and administrative		24,291			23,078			27,639			29,583			104,591			27,144			28,718			36,657			92,519			39.1	%		9,018
Gains, losses and other items, net		1,278			18			-			183			1,479			739			13,111			11,743			25,593			n/a			11,743
Total operating expenses		102,324			98,393			115,833			130,218			446,768			126,824			133,917			139,277			400,018			23.8	%		23,444
Loss from operations		(17,601	)		(6,182	)		(13,786	)		(27,969	)		(65,538	)		(25,602	)		(29,122	)		(23,949	)		(78,673	)		(164.4	%)		(10,163	)
% Margin		-14.8	%		-4.9	%		-9.8	%		-19.7	%		-12.4	%		-18.0	%		-19.8	%		-15.1	%		-17.6	%
Total other income (expense), net		30,601			150			(241	)		(47	)		30,463			699			2,248			(736	)		2,211			(330.0	%)		(495	)
Loss from continuing operations before income taxes		13,000			(6,032	)		(14,027	)		(28,016	)		(35,075	)		(24,903	)		(26,874	)		(24,685	)		(76,462	)		(176.7	%)		(10,658	)
Income taxes expense (benefit)		(4,365	)		399			1,348			1,376			(1,242	)		2,315			3,562			5,835			11,712			1124.6	%		4,487
Net loss from continuing operations		17,365			(6,431	)		(15,375	)		(29,392	)		(33,833	)		(27,218	)		(30,436	)		(30,520	)		(88,174	)		(160.6	%)		(54,341	)
Earnings from discontinued operations, net of tax		-			-			-			-			-			-			-			836			836			n/a			836
Net earnings (loss)		17,365			(6,431	)		(15,375	)		(29,392	)		(33,833	)		(27,218	)		(30,436	)		(29,684	)		(87,338	)		(222.5	%)		(14,309	)
Diluted earnings (loss) per share		0.25			(0.09	)		(0.23	)		(0.43	)		(0.50	)		(0.40	)		(0.45	)		(0.46	)		(1.31	)		(246.2	%)		(0.23	)
Some earnings (loss) per share amounts may not add due to rounding.
Basic shares		68,328			68,042			68,190			68,283			68,211			68,403			67,096			64,784			66,761
Diluted shares		69,605			69,333			69,938			69,354			69,560			69,195			67,568			65,356			67,373

LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP EPS (1)
(Unaudited)
(Dollars in thousands, except per share amounts)
		06/30/21			09/30/21			12/31/21			03/31/22			FY2022			06/30/22			09/30/22			12/31/22			FY 2023
Loss from continuing operations before income taxes		13,000			(6,032	)		(14,027	)		(28,016	)		(35,075	)		(24,903	)		(26,874	)		(24,685	)		(76,462	)
Income taxes (benefit)		(4,365	)		399			1,348			1,376			(1,242	)		2,315			3,562			5,835			11,712
Net loss from continuing operations		17,365			(6,431	)		(15,375	)		(29,392	)		(33,833	)		(27,218	)		(30,436	)		(30,520	)		(88,174	)
Earnings from discontinued operations, net of tax		-			-			-			-			-			-			-			836			836
Net earnings (loss)		17,365			(6,431	)		(15,375	)		(29,392	)		(33,833	)		(27,218	)		(30,436	)		(29,684	)		(87,338	)
Earnings (loss) per share:
Basic		0.25			(0.09	)		(0.23	)		(0.43	)		(0.50	)		(0.40	)		(0.45	)		(0.46	)		(1.31	)
Diluted		0.25			(0.09	)		(0.23	)		(0.43	)		(0.50	)		(0.40	)		(0.45	)		(0.46	)		(1.30	)
Excluded items:
Purchased intangible asset amortization (cost of revenue)		4,645			4,612			4,647			4,807			18,711			4,643			4,637			4,209			13,489
Non-cash stock compensation (cost of revenue and operating expenses)		18,496			19,221			23,758			25,782			87,257			24,225			27,293			29,624			81,142
Restructuring and merger charges (gains, losses, and other)		1,278			18			-			183			1,479			739			13,111			11,743			25,593
Transformation costs (general and administrative)		-			-			-			-			-			-			1,250			4,112			5,362
Gain on retained profits interest (other income)		(30,052	)		-			(183	)		-			(30,235	)		-			-			-			-
Total excluded items from continuing operations		(5,633	)		23,851			28,222			30,772			77,212			29,607			46,291			49,688			125,586
Loss from continuing operations before income taxes and excluding items		7,367			17,819			14,195			2,756			42,137			4,704			19,417			25,003			49,124
Income taxes expense (benefit)		865			(12	)		4,271			3,391			8,515			1,237			4,557			6,468			12,262
Non-GAAP net earnings (loss) from continuing operations		6,502			17,831			9,924			(635	)		33,622			3,467			14,860			18,535			36,862
Non-GAAP earnings (loss) per share from continuing operations:
Basic		0.10			0.26			0.15			(0.01	)		0.49			0.05			0.22			0.29			0.55
Diluted		0.09			0.26			0.14			(0.01	)		0.48			0.05			0.22			0.28			0.55
Basic weighted average shares		68,328			68,042			68,190			68,283			68,211			68,403			67,096			64,784			66,761
Diluted weighted average shares		69,605			69,333			69,938			68,283			69,560			69,195			67,568			65,356			67,373
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)
		06/30/21			09/30/21			12/31/21			03/31/22			FY2022			06/30/22			09/30/22			12/31/22			FY2023
Expenses, continuing operations:
Cost of revenue		34,315			35,079			38,557			39,476			147,427			41,021			42,304			43,287			126,612
Research and development		34,776			35,788			41,870			45,501			157,935			47,661			46,139			43,175			136,975
Sales and marketing		41,979			39,509			46,324			54,951			182,763			51,280			45,949			47,702			144,931
General and administrative		24,291			23,078			27,639			29,583			104,591			27,144			28,718			36,657			92,519
Gains, losses and other items, net		1,278			18			-			183			1,479			739			13,111			11,743			25,593
Gross profit, continuing operations:		84,723			92,211			102,047			102,249			381,230			101,222			104,795			115,328			321,345
% Gross margin		71.2	%		72.4	%		72.6	%		72.1	%		72.1	%		71.2	%		71.2	%		72.7	%		71.7	%
Excluded items:
Purchased intangible asset amortization (cost of revenue)		4,645			4,612			4,647			4,807			18,711			4,643			4,637			4,209			13,489
Non-cash stock compensation (cost of revenue)		790			948			1,168			1,205			4,111			1,163			1,293			1,208			3,664
Non-cash stock compensation (research and development)		5,348			7,184			9,264			10,316			32,112			11,656			12,360			10,654			34,670
Non-cash stock compensation (sales and marketing)		6,793			6,749			7,329			7,715			28,586			5,884			6,116			5,871			17,871
Non-cash stock compensation (general and administrative)		5,565			4,340			5,997			6,546			22,448			5,522			7,524			11,891			24,937
Restructuring and merger charges (gains, losses, and other)		1,278			18			-			183			1,479			739			13,111			11,743			25,593
Transformation costs (general and administrative)		-			-			-			-			-			-			1,250			4,112			5,362
Gain on retained profits interest (other income)		(30,052	)		-			(183	)		-			(30,235	)		-			-			-			-
Total excluded items		(5,633	)		23,851			28,222			30,772			77,212			29,607			46,291			49,688			125,586
Expenses, continued operations excluding items:
Cost of revenue		28,880			29,519			32,742			33,464			124,605			35,215			36,374			37,870			109,459
Research and development		29,428			28,604			32,606			35,185			125,823			36,005			33,779			32,521			102,305
Sales and marketing		35,186			32,760			38,995			47,236			154,177			45,396			39,833			41,831			127,060
General and administrative		18,726			18,738			21,642			23,037			82,143			21,622			19,944			20,654			62,220
Gains, losses and other items, net		-			-			-			-			-			-			-			-			-
Gross profit, continued operations excluding items:		90,158			97,771			107,862			108,261			404,052			107,028			110,725			120,745			338,498
% Gross margin		75.7	%		76.8	%		76.7	%		76.4	%		76.4	%		75.2	%		75.3	%		76.1	%		75.6	%

(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								For the year ending
		March 31, 2023								March 31, 2023
		Low				High				Low				High
GAAP loss from operations			(26,000	)			(23,000	)			(105,000	)			(102,000	)
Excluded items:
Purchased intangible asset amortization			3,000				3,000				17,000				17,000
Non-cash stock compensation			22,000				22,000				103,000				103,000
Restructuring costs			10,000				10,000				36,000				36,000
Transformation costs			4,000				4,000				9,000				9,000
Total excluded items			39,000				39,000				165,000				165,000
Non-GAAP income from operations		$	13,000			$	16,000			$	60,000			$	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

Q3 FISCAL 2023 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 employees 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. In the first and second quarters of fiscal 2021 in response to the potential COVID-19 pandemic impact on our business and again during fiscal 2023 in response to macroeconomic conditions, 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.

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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20230207005323/en/

The LiveRamp Holdings Stock at the time of publication of the news with a fall of -0,37 % to 27,15USD on NYSE stock exchange (07. Februar 2023, 21:48 Uhr).