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LiveRamp Announces First Quarter Results

·16 min read

Total Revenue Up 19% and Subscription Revenue Up 20%

GAAP Gross Margin of 71% and Non-GAAP Gross Margin of 75%

LiveRamp Repurchases $80 Million of Stock Fiscal Year to Date

SAN FRANCISCO, August 04, 2022--(BUSINESS WIRE)--LiveRamp® (NYSE: RAMP), the leading global data enablement platform, today announced its financial results for the quarter ended June 30, 2022.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20220804005830/en/

Financial Highlights

  • Total revenue was $142 million, up 19% compared to the prior year period.

  • Subscription revenue was $116 million, up 20% compared to the prior year period and contributed 81% of total revenue.

  • Marketplace & Other revenue was $27 million, up 18% compared to the prior year period.

  • GAAP gross profit was $101 million, up 19% compared to the prior year period. GAAP gross margin of 71% remained flat compared to the prior year period. Non-GAAP gross profit was $107 million, up 19% compared to the prior year period. Non-GAAP gross margin of 75% contracted 1 percentage point compared to the prior year period.

  • GAAP operating loss was $26 million compared to a GAAP operating loss of $18 million in the prior year period. Non-GAAP operating income was $4 million compared to non-GAAP operating income of $7 million in the prior year period.

  • GAAP loss per share was $0.40, and non-GAAP earnings per share were $0.05.

  • Net cash used in operating activities was $33 million compared to $17 million in the prior year period.

  • Fiscal year to date, LiveRamp has repurchased approximately 2.8 million shares for $80 million under the Company’s current share repurchase program. Since inception of the program in August 2011, the Company has returned approximately $1.3 billion in capital to shareholders.

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

"We delivered a solid first quarter, highlighted by 19% revenue growth and continued profitability," said LiveRamp CEO Scott Howe. "Against an uncertain macro backdrop, data-driven marketing and customer experience is more critical than ever and adoption of our Safe Haven® platform continues to expand. Subscription net retention was 113% and we ended the quarter with 90 customers paying $1 million or more in annual revenue, an increase of 29% compared to prior year."

GAAP and Non-GAAP Results

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

Q1 Fiscal 2023

Q1 Fiscal 2022

Results

Results

GAAP

Non-GAAP

GAAP

Non-GAAP

Subscription revenue

$116

$97

YoY change %

20%

16%

Marketplace & other revenue

$27

$23

YoY change %

18%

36%

Total revenue

$142

$119

YoY change %

19%

20%

Gross profit

$101

$107

$85

$90

% Gross margin

71%

75%

71%

76%

YoY change, pts

(1) pts

6 pts

4 pts

Operating income (loss)

($26)

$4

($18)

$7

% Operating margin

(18%)

3%

(15%)

6%

YoY change, pts

(3) pts

(3) pts

11 pts

4 pts

Net earnings (loss)

($27)

$3

$17

$7

Earnings (loss) per share

($0.40)

$0.05

$0.25

$0.09

Shares to Calculate EPS

68.4

69.2

69.6

69.6

YoY change %

(2%)

(1%)

3%

3%

Net operating cash flow

($33)

($17)

Free cash flow to equity

($35)

($18)

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 Company’s Authenticated Traffic Solution (ATS) has reached global scale. There are currently more than 125 supply-side platforms (SSPs) and demand-side platforms (DSPs) live or committed to bid on RampID™ and ATS, including The Trade Desk, Amobee, Criteo, dataxu, 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 1,500 publishers, representing more than 11,500 deployed domains, have integrated ATS worldwide, including Amazon Publisher Services, Microsoft, CafeMedia, Leaf Group, Prisma Media and Burda.

  • LiveRamp added 5 net new direct subscription customers in the first quarter. Customer count at quarter end was 910, up from 855 a year ago.

  • LiveRamp has 90 customers whose subscription contracts exceed $1 million in annual revenue, up 29% compared to the prior year period.

  • During the first quarter, subscription net retention was 113% and platform net retention was 113%.

  • Current remaining performance obligations (CRPO), which is contracted and committed revenue expected to be recognized over the next 12 months, was $295 million, up 15% 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 charges.

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

  • Revenue of approximately $144 million, an increase of 13% year-over-year

  • GAAP operating loss of approximately $38 million

  • Non-GAAP operating income of approximately $8 million

For fiscal 2023, LiveRamp expects to report:

  • Revenue of between $590 million and $600 million, an increase of between 12% and 13% year-over-year

  • GAAP operating loss of approximately $103 million

  • Non-GAAP operating income of approximately $39 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 for fiscal 2023 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 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, 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.

LiveRamp, RampID™, 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

June 30,

$

%

2022

2021

Variance

Variance

Revenues

142,243

119,038

23,205

19.5

%

Cost of revenue

41,021

34,315

6,706

19.5

%

Gross profit

101,222

84,723

16,499

19.5

%

% Gross margin

71.2

%

71.2

%

Operating expenses:

Research and development

47,661

34,776

12,885

37.1

%

Sales and marketing

51,280

41,979

9,301

22.2

%

General and administrative

27,144

24,291

2,853

11.7

%

Gains, losses and other items, net

739

1,278

(539

)

(42.2

%)

Total operating expenses

126,824

102,324

24,500

23.9

%

Loss from operations

(25,602

)

(17,601

)

(8,001

)

(45.5

%)

% Margin

-18.0

%

-14.8

%

Total other income, net

699

30,601

(29,902

)

(97.7

%)

Income (loss) before income taxes

(24,903

)

13,000

(37,903

)

(291.6

%)

Income tax expense (benefit)

2,315

(4,365

)

6,680

153.0

%

Net earnings (loss)

(27,218

)

17,365

(44,583

)

(256.7

%)

Basic earnings (loss) per share

(0.40

)

0.25

(0.65

)

(256.6

%)

Diluted earnings (loss) per share:

(0.40

)

0.25

(0.65

)

(259.5

%)

Basic weighted average shares

68,403

68,328

Diluted weighted average shares

68,403

69,605

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

June 30,

2022

2021

Income (loss) before income taxes

(24,903

)

13,000

Income tax expense (benefit)

2,315

(4,365

)

Net earnings (loss)

(27,218

)

17,365

Earnings (loss per share):

Basic

(0.40

)

0.25

Diluted

(0.40

)

0.25

Excluded items:

Purchased intangible asset amortization (cost of revenue)

4,643

4,645

Non-cash stock compensation (cost of revenue and operating expenses)

24,225

18,496

Restructuring and merger charges (gains, losses, and other)

739

1,278

Gain on retained profits interest (other income)

-

(30,052

)

Total excluded items

29,607

(5,633

)

Income before income taxes and excluding items

4,704

7,367

Income taxes (2)

1,237

865

Non-GAAP net earnings

3,467

6,502

Non-GAAP earnings per share:

Basic

0.05

0.10

Diluted

0.05

0.09

Basic weighted average shares

68,403

68,328

Diluted weighted average shares

69,195

69,605

(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

June 30,

2022

2021

Loss from operations

(25,602

)

(17,601

)

Excluded items:

Purchased intangible asset amortization (cost of revenue)

4,643

4,645

Non-cash stock compensation (cost of revenue and operating expenses)

24,225

18,496

Restructuring and merger charges (gains, losses, and other)

739

1,278

Total excluded items

29,607

24,419

Income from operations before excluded items

4,005

6,818

(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

June 30,

2022

2021

Net earnings (loss)

(27,218

)

17,365

Income tax expense (benefit)

2,315

(4,365

)

Other income

(699

)

(30,601

)

Loss from operations

(25,602

)

(17,601

)

Depreciation and amortization

5,741

6,585

EBITDA

(19,861

)

(11,016

)

Other adjustments:

Non-cash stock compensation (cost of revenue and operating expenses)

24,225

18,496

Restructuring and merger charges (gains, losses, and other)

739

1,278

Other adjustments

24,964

19,774

Adjusted EBITDA

5,103

8,758

(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)

June 30,

March 31,

$

%

2022

2022

Variance

Variance

Assets

Current assets:

Cash and cash equivalents

508,254

600,162

(91,908

)

(15.3

%)

Trade accounts receivable, net

154,575

148,343

6,232

4.2

%

Refundable income taxes

28,970

30,354

(1,384

)

(4.6

%)

Other current assets

33,055

36,975

(3,920

)

(10.6

%)

Total current assets

724,854

815,834

(90,980

)

(11.2

%)

Property and equipment

47,270

45,001

2,269

5.0

%

Less - accumulated depreciation and amortization

34,226

33,470

756

2.3

%

Property and equipment, net

13,044

11,531

1,513

13.1

%

Intangible assets, net

22,050

26,718

(4,668

)

(17.5

%)

Goodwill

363,013

363,845

(832

)

(0.2

%)

Deferred commissions, net

30,963

30,594

369

1.2

%

Other assets, net

80,337

85,214

(4,877

)

(5.7

%)

1,234,261

1,333,736

(99,475

)

(7.5

%)

Liabilities and Stockholders' Equity

Current liabilities:

Trade accounts payable

66,809

83,197

(16,388

)

(19.7

%)

Accrued payroll and related expenses

19,556

39,188

(19,632

)

(50.1

%)

Other accrued expenses

41,918

46,067

(4,149

)

(9.0

%)

Deferred revenue

14,762

16,114

(1,352

)

(8.4

%)

Total current liabilities

143,045

184,566

(41,521

)

(22.5

%)

Other liabilities

85,469

86,110

(641

)

(0.7

%)

Stockholders' equity:

Preferred stock

-

-

-

n/a

Common stock

15,103

14,984

119

0.8

%

Additional paid-in capital

1,753,468

1,721,118

32,350

1.9

%

Retained earnings

1,393,775

1,420,993

(27,218

)

(1.9

%)

Accumulated other comprehensive income

3,801

5,730

(1,929

)

(33.7

%)

Treasury stock, at cost

(2,160,400

)

(2,099,765

)

(60,635

)

(2.9

%)

Total stockholders' equity

1,005,747

1,063,060

(57,313

)

(5.4

%)

1,234,261

1,333,736

(99,475

)

(7.5

%)

LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(Dollars in thousands)

For the Three Months Ended

June 30,

2022

2021

Cash flows from operating activities:

Net earnings (loss)

(27,218

)

17,365

Non-cash operating activities:

Depreciation and amortization

5,741

6,585

Loss (gain) on disposal or impairment of assets

(5

)

113

Gain on distribution from retained profits interest

-

(30,052

)

Provision for doubtful accounts

997

955

Deferred income taxes

187

(912

)

Non-cash stock compensation expense

24,225

18,496

Changes in operating assets and liabilities:

Accounts receivable

(7,733

)

(7,049

)

Deferred commissions

(369

)

(3,383

)

Other assets

4,352

19,336

Accounts payable and other liabilities

(34,557

)

(37,276

)

Income taxes

2,131

(1,000

)

Deferred revenue

(1,120

)

(419

)

Net cash used in operating activities

(33,369

)

(17,241

)

Cash flows from investing activities:

Capital expenditures

(1,741

)

(427

)

Distribution from retained profits interest

-

31,000

Cash paid in acquisition, net of cash received

-

(8,368

)

Net cash provided by (used in) investing activities

(1,741

)

22,205

Cash flows from financing activities:

Proceeds related to the issuance of common stock under stock and employee benefit plans

4,589

3,281

Shares repurchased for tax withholdings upon vesting of stock-based awards

(582

)

(11,361

)

Acquisition of treasury stock

(60,053

)

(29,077

)

Net cash used in financing activities

(56,046

)

(37,157

)

Effect of exchange rate changes on cash

(752

)

261

Net change in cash and cash equivalents

(91,908

)

(31,932

)

Cash and cash equivalents at beginning of period

600,162

581,687