BusinessWire

LiveRamp Announces Fourth Quarter and Fiscal Year Results

Total Q4 Revenue Up 35% — Subscription Revenue Up 28%

Repurchases $103 Million of Stock Since December 31, 2019

Strong Balance Sheet

SAN FRANCISCO--(BUSINESS WIRE)--LiveRamp® (NYSE: RAMP), the leading global data connectivity platform, today announced its financial results for the fourth quarter and fiscal year ended March 31, 2020.



Fourth Quarter Financial Highlights

  • Total revenue was $106 million, up 35% compared to the prior year period.
  • Subscription revenue was $84 million, up 28% and contributed 79% of total revenue.
  • Marketplace & Other revenue was $22 million, up 71%.
  • GAAP gross profit was $69 million, up 70% compared to the prior year period. GAAP gross margin of 65% expanded 13 percentage points. Non-GAAP gross profit was $75 million, up 59% compared to the prior year period. Non-GAAP gross margin of 71% expanded 11 percentage points.
  • GAAP operating loss was $41 million compared to a GAAP operating loss of $82 million in the prior year period. Non-GAAP operating loss was $16 million compared to a non-GAAP operating loss of $22 million in the prior year period.
  • GAAP loss per share from continuing operations was $0.07, and non-GAAP loss per share from continuing operations was $0.05.
  • GAAP and non-GAAP operating results include an incremental $3.5 million bad debt charge largely as a result of current economic conditions.
  • Net cash provided by operating activities was roughly break-even compared to net cash provided by operating activities of $38 million during the fourth quarter of fiscal 2019. Prior year cash flow from operating activities included a $55 million cash tax benefit associated with the sale of the Acxiom Marketing Solutions (AMS) business.
  • As of May 20, 2020, LiveRamp has repurchased 3.1 million shares for $103 million under the current stock repurchase program since December 31, 2019. Since August 2011, the Company has returned over $1.17 billion in capital to shareholders.

Fiscal Year Financial Highlights

  • Total revenue was $381 million, up 33% compared to the prior year.
  • Subscription revenue was $306 million, up 29% and contributed 80% of total revenue.
  • Marketplace & Other revenue was $75 million, up 53%.
  • GAAP gross profit was $228 million, up 38% compared to the prior year. GAAP gross margin of 60% expanded 2 percentage points. Non-GAAP gross profit was $253 million, up 34% compared to the prior year. Non-GAAP gross margin of 67% expanded 1 percentage point.
  • GAAP operating loss was $181 million compared to a GAAP operating loss of $198 million in the prior year. Non-GAAP operating loss was $64 million compared to a non-GAAP operating loss of $54 million in the prior year.
  • GAAP loss per share from continuing operations was $1.85, and non-GAAP loss per share from continuing operations was $0.55.
  • Net cash used in operating activities was $29 million compared to net cash used in operating activities of $2 million during the prior year. Prior year cash flow from operating activities included a $55 million cash tax benefit associated with the sale of the Acxiom Marketing Solutions (AMS) business.
  • Cash and cash equivalents totaled $718 million with no debt at quarter end as compared to $767 million at December 31, 2019.

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

“During this unprecedented time, we remain focused on the health and well-being of our employees and partners who continue to serve our global network of customers,” said LiveRamp CEO Scott Howe. “Now more than ever, it is important for brands to remain close to their customers and to demonstrate that their marketing investments are driving real results and returns. LiveRamp plays a critical role in enabling enterprise marketers to spend smarter. Our product suite, and in particular the Authenticated Traffic Solution® (or ATS), Safe Haven® and Advanced TV products, ensure every marketing dollar spent is addressable, accountable and measurable.”

“I would also like to take this opportunity to thank the entire LiveRamp team for the resiliency and exceptionalism they have demonstrated during this period,” added Howe. “In times of adversity, the true character of a team emerges, and I could not be more proud to lead this incredible group of people.”

COVID-19 Business Update

“LiveRamp, along with most companies, is being impacted by the COVID-19 crisis. That said, we are fortunate to be operating from a position of strength,” said LiveRamp President and CFO Warren Jenson. “In addition to our robust balance sheet, we have great customers, dedicated employees, a subscription business model and products that benefit from the secular wave toward outcome-based marketing and advertising. However, we are watching and monitoring our business closely, and in particular, usage trends and our Data Marketplace.”

LiveRamp has taken proactive steps to keep its employees safe and global customer base serviced during these unprecedented times:

  • In early March, LiveRamp, in coordination with local government guidance, began implementing its Pandemic Plan for staged movement to work from home in order to protect its workforce. The vast majority of LiveRamp’s global employees have seamlessly transitioned to working remotely.
  • Given the SaaS nature of its model, LiveRamp does not depend on any on-premise components or personnel for the products and services it provides. LiveRamp is, however, dependent on its cloud infrastructure and the ability for its workforce to work remotely. To date, service to customers and partners has continued uninterrupted.
  • LiveRamp’s balance sheet remains exceptionally strong, with over $700 million of cash and no debt at year-end. The company is carefully managing working capital, tightening its hiring practices and reducing costs where appropriate.
  • The company increased its reserves for bad debts during the fourth quarter by approximately $3.5 million in response to increased future collection risk associated with certain customer segments.

GAAP and Non-GAAP Results

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

 

Q4 Fiscal 2020

 

Full Year Fiscal 2020

 

Results

 

Results

 

GAAP

Non-GAAP

 

GAAP

Non-GAAP

Subscription revenue

$84

 

$306

YoY change %

28%

 

 

29%

 

Marketplace & other revenue

$22

 

$75

YoY change %

71%

 

 

53%

 

Total revenue

$106

 

$381

YoY change %

35%

 

 

33%

 

 

 

 

 

 

 

Gross profit

$69

$75

 

$228

$253

% Gross margin

65%

71%

 

60%

67%

YoY change, pts

13pts

11pts

 

2pts

1pts

 

 

 

 

 

 

Operating loss

($41)

($16)

 

($181)

($64)

% Operating margin

(39%)

(15%)

 

(48%)

(17%)

YoY change, pts

66pts

14pts

 

22pts

2pts

 

 

 

 

 

 

Net loss from continuing operations

($5)

($3)

 

($125)

($37)

YoY change %

nm

nm

 

nm

nm

Loss per share from continuing operations

($0.07)

($0.05)

 

($1.85)

($0.55)

YoY change %

nm

nm

 

nm

nm

 

 

 

 

 

 

Shares to Calculate EPS

67.0

67.0

 

67.8

67.8

YoY change %

(2%)

(2%)

 

(10%)

(10)%

Net operating cash flow

($0)

 

($29)

YoY change %

nm

 

nm

 

Free cash flow to equity

($2)

 

($40)

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 Metrics & Highlights

  • LiveRamp added 10 net new direct subscription customers during the quarter, bringing its total direct customer count to 780, an increase of 17% year over year. It now serves 22% of the Fortune 500 compared to 19% in the prior year period.
  • LiveRamp has 53 clients whose subscription contracts exceed $1 million in annual revenue, up from 46 in the prior year period.
  • During the fourth quarter, subscription net retention was approximately 110%. Platform net retention was 122% driven by strong Marketplace & Other trends.
  • Current remaining performance obligations (RPO), which is contracted and committed revenue expected to be recognized over the next 12 months, was $221 million, up 29% compared to the fourth quarter of last year.
  • The company recently launched LiveRamp Safe Haven, a new platform that enables secure, permission-enabled data collaboration for brands and their partners. Two of the top five largest U.S. retailers are implementing Safe Haven, and to date, more than 35 companies world-wide are using this technology in their workflows.
  • LiveRamp addressability solutions, including ATS, continue to experience strong global adoption. There are currently 18 supply-side platforms (SSPs) live or committed to implementing IdentityLink™ in the bidstream, including OpenX, Index Exchange, Pubmatic, Rubicon Project and TripleLift. In addition, there are 35 demand-side platforms (DSPs) live or committed to bid on IdentityLink, including Amobee, Criteo, dataxu, and MediaMath. Lastly, to date, LiveRamp has signed on more than 45 publishers globally for ATS, spanning the US, UK, France, Spain, Italy, and Japan.

Board of Directors Update

LiveRamp also announced today that William T. Dillard II is retiring from the LiveRamp Board of Directors when his current term ends at the next annual meeting of shareholders, expected to be held in August 2020. Mr. Dillard has been a trusted advisor during the company’s evolution.

“Bill’s guidance has been invaluable to LiveRamp, and I want to personally thank him for his decades of service to the company. Bill has brought a strong customer perspective plus a wealth of executive experience to LiveRamp. He was instrumental in transforming the company into a category-creating software business. Both the board and the leadership team are deeply appreciative of Bill’s long service to LiveRamp,” said Scott Howe.

Financial Outlook

Given uncertainties related to the rapidly changing global economic environment, LiveRamp is providing first quarter guidance only.

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

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

  • Revenue of approximately $88 million, an increase of approximately 7% year-over-year.
  • GAAP operating loss from continuing operations of up to $47 million.
  • Non-GAAP operating loss of up to $12 million.

Conference Call

LiveRamp will hold a conference call at 1:30 p.m. PT today to further discuss this information. Interested parties are invited to listen to the call which will be broadcast via the Internet and can be found on LiveRamp’s investor site. A slide presentation will be referenced during the call and can be accessed here.

About LiveRamp

LiveRamp is the leading data connectivity platform for the safe and effective use of data. Powered by core identity capabilities and an unparalleled network, LiveRamp enables companies and their partners to better connect, control, and activate data to transform customer experiences and generate more valuable business outcomes. LiveRamp’s fully interoperable and neutral infrastructure delivers end-to-end addressability for the world’s top brands, agencies, and publishers. For more information, visit www.LiveRamp.com.

Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, as amended (the “PSLRA”). These statements, which are not statements of historical fact, may contain estimates, assumptions, projections and/or expectations regarding the Company’s financial position, results of operations, market position, product development, growth opportunities, economic conditions, and other similar forecasts and statements of expectation. Forward-looking statements are often identified by words or phrases such as “anticipate,” “estimate,” “plan,” “expect,” “believe,” “intend,” “foresee,” or the negative of these terms or other similar variations thereof.

These forward-looking statements are not guarantees of future performance and are subject to a number of factors and uncertainties that could cause the Company’s actual results and experiences to differ materially from the anticipated results and expectations expressed in the forward-looking statements.

Among the factors that may cause actual results and expectations to differ from anticipated results and expectations expressed in forward-looking statements are uncertainties related to COVID-19 and the associated impact on suppliers and customers; 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 2019 ended March 31, 2019, and LiveRamp's Quarterly Reports on Form 10-Q issued in fiscal year 2020.

The financial information set forth in this press release reflects estimates based on information available at this time. These amounts could differ from actual reported amounts stated in LiveRamp’s Annual Report on Form 10-K for the period ended March 31, 2020, which LiveRamp expects to file by end of May 2020.

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, IdentityLinkTM, 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
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except per share amounts)
 
For the Three Months Ended
March 31,

 

 

 

 

$

%

2020

 

2019

 

Variance

Variance

 
Revenues

105,701

 

78,316

 

 

27,385

 

35.0

%

 
Cost of revenue

36,852

 

37,760

 

 

(908

)

(2.4

%)

Gross profit

68,849

 

40,556

 

 

28,293

 

69.8

%

% Gross margin

65.1

%

51.8

%

 
Operating expenses:
Research and development

28,411

 

31,318

 

 

(2,907

)

(9.3

%)

Sales and marketing

48,564

 

49,223

 

 

(659

)

(1.3

%)

General and administrative

30,216

 

27,749

 

 

2,467

 

8.9

%

Gains, losses and other items, net

2,447

 

14,400

 

 

(11,953

)

(83.0

%)

Total operating expenses

109,638

 

122,690

 

 

(13,052

)

(10.6

%)

 
Loss from operations

(40,789

)

(82,134

)

 

41,345

 

50.3

%

% Margin

-38.6

%

-104.9

%

 
Total other income

1,565

 

8,311

 

 

(6,746

)

(81.2

%)

 
Loss from continuing operations before income taxes

(39,224

)

(73,823

)

 

34,599

 

46.9

%

 
Income taxes (benefit)

(34,345

)

(24,135

)

 

(10,210

)

(42.3

%)

 
Net loss from continuing operations

(4,879

)

(49,688

)

 

44,809

 

90.2

%

 
Earnings from discontinued operations, net of tax

750

 

4,227

 

 

(3,477

)

(82.3

%)

 
Net loss

(4,129

)

(45,461

)

 

41,332

 

90.9

%

 
Basic earnings (loss) per share:
Continuing operations

(0.07

)

(0.73

)

 

0.66

 

90.0

%

Discontinued operations

0.01

 

0.06

 

 

(0.05

)

(82.3

%)

Net loss

(0.06

)

(0.67

)

 

0.60

 

90.7

%

 
Diluted earnings (loss) per share:
Continuing operations

(0.07

)

(0.73

)

 

0.66

 

90.0

%

Discontinued operations

0.01

 

0.06

 

 

(0.05

)

(82.3

%)

Net loss

(0.06

)

(0.67

)

 

0.60

 

90.7

%

 
Basic weighted average shares

66,977

 

68,299

 

Diluted weighted average shares

66,977

 

68,299

 

LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except per share amounts)
 
For the Twelve Months Ended
March 31,

 

 

 

 

$

%

2020

 

2019

 

Variance

Variance

 
Revenues

380,572

 

285,620

 

94,952

 

33.2

%

 
Cost of revenue

152,704

 

120,718

 

31,986

 

26.5

%

Gross profit

227,868

 

164,902

 

62,966

 

38.2

%

% Gross margin

59.9

%

57.7

%

 
Operating expenses:
Research and development

105,981

 

85,697

 

20,284

 

23.7

%

Sales and marketing

188,905

 

158,540

 

30,365

 

19.2

%

General and administrative

108,903

 

98,878

 

10,025

 

10.1

%

Gains, losses and other items, net

5,001

 

19,933

 

(14,932

)

(74.9

%)

Total operating expenses

408,790

 

363,048

 

45,742

 

12.6

%

 
Loss from operations

(180,922

)

(198,146

)

17,224

 

8.7

%

% Margin

-47.5

%

-69.4

%

 
Total other income

15,385

 

18,790

 

(3,405

)

(18.1

%)

 
Loss from continuing operations before income taxes

(165,537

)

(179,356

)

13,819

 

7.7

%

 
Income taxes (benefit)

(40,276

)

(45,409

)

5,133

 

11.3

%

 
Net loss from continuing operations

(125,261

)

(133,947

)

8,686

 

6.5

%

 
Earnings from discontinued operations, net of tax

750

 

1,162,494

 

(1,161,744

)

(99.9

%)

 
Net earnings (loss)

(124,511

)

1,028,547

 

(1,153,058

)

(112.1

%)

 
Basic earnings (loss) per share:
Continuing operations

(1.85

)

(1.79

)

(0.06

)

(3.6

%)

Discontinued operations

0.01

 

15.50

 

(15.49

)

(99.9

%)

Net earnings (loss)

(1.84

)

13.71

 

(15.55

)

(113.4

%)

 
Diluted earnings (loss) per share:
Continuing operations

(1.85

)

(1.79

)

(0.06

)

(3.6

%)

Discontinued operations

0.01

 

15.50

 

(15.49

)

(99.9

%)

Net earnings (loss)

(1.84

)

13.71

 

(15.55

)

(113.4

%)

 
Basic weighted average shares

67,760

 

75,020

 

Diluted weighted average shares

67,760

 

75,020

 

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 Twelve Months Ended

March 31,

 

March 31,

2020

 

2019

 

2020

 

2019

 
 
Loss from continuing operations before income taxes

(39,224

)

(73,823

)

(165,537

)

(179,356

)

 
Income taxes (benefit)

(34,345

)

(24,135

)

(40,276

)

(45,409

)

 
Net loss from continuing operations

(4,879

)

(49,688

)

(125,261

)

(133,947

)

 
Earnings from discontinued operations, net of tax

750

 

4,227

 

750

 

1,162,494

 

 
Net earnings (loss)

(4,129

)

(45,461

)

(124,511

)

1,028,547

 

 
Earnings (loss) per share:
Basic

(0.06

)

(0.67

)

(1.84

)

13.71

 

Diluted

(0.06

)

(0.67

)

(1.84

)

13.71

 

 
Excluded items:
Purchased intangible asset amortization (cost of revenue)

5,181

 

2,981

 

19,042

 

15,858

 

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

17,168

 

41,175

 

89,447

 

102,722

 

Accelerated depreciation (cost of revenue and operating expenses)

-

 

1,853

 

3,569

 

3,812

 

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

2,447

 

14,400

 

5,001

 

19,933

 

Separation and transformation costs (general and administrative)

-

 

(705

)

-

 

2,117

 

 
Total excluded items, continuing operations

24,796

 

59,704

 

117,059

 

144,442

 

 
Loss from continuing operations before income taxes and excluding items

(14,428

)

(14,119

)

(48,478

)

(34,914

)

 
Income taxes (benefit) (2)

(11,199

)

(5,155

)

(11,452

)

(12,964

)

 
Non-GAAP net loss from continuing operations

(3,229

)

(8,964

)

(37,026

)

(21,950

)

 
Non-GAAP loss per share from continuing operations:
Basic

(0.05

)

(0.13

)

(0.55

)

(0.29

)

Diluted

(0.05

)

(0.13

)

(0.55

)

(0.29

)

 
Basic weighted average shares

66,977

 

68,299

 

67,760

 

75,020

 

Diluted weighted average shares

66,977

 

68,299

 

67,760

 

75,020

 

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

 

(2) Income taxes were calculated using an effective non-GAAP tax rate of 77.6% and 36.5% in the fourth quarter of fiscal 2020 and 2019, respectively, and 23.6% and 37.1% for the twelve months ended March 31, 2020 and 2019, respectively. The difference between our GAAP and non-GAAP tax rates were primarily due to the net tax effects of the excluded items.

LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP LOSS FROM OPERATIONS (1)
(Unaudited)
(Dollars in thousands)
 

For the Three Months Ended

 

For the Twelve Months Ended

March 31,

 

March 31,

2020

 

2019

 

2020

 

2019

 
 
Loss from continuing operations

(40,789

)

(82,134

)

(180,922

)

(198,146

)

 
Excluded items:
Purchased intangible asset amortization (cost of revenue)

5,181

 

2,981

 

19,042

 

15,858

 

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

17,168

 

41,175

 

89,447

 

102,722

 

Accelerated depreciation (cost of revenue and operating expenses)

-

 

1,853

 

3,569

 

3,812

 

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

2,447

 

14,400

 

5,001

 

19,933

 

Separation and transformation costs (general and administrative)

-

 

(705

)

-

 

2,117

 

 
Total excluded items

24,796

 

59,704

 

117,059

 

144,442

 

 
Loss from continuing operations before excluded items

(15,993

)

(22,430

)

(63,863

)

(53,704

)

(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 Twelve Months Ended
March 31, March 31,

2020

 

2019

 

2020

 

2019

 
 
Net loss from continuing operations

(4,879

)

(49,688

)

(125,261

)

(133,947

)

 
Income taxes (benefit)

(34,345

)

(24,135

)

(40,276

)

(45,409

)

 
Other income

(1,565

)

(8,311

)

(15,385

)

(18,790

)

 
Loss from operations

(40,789

)

(82,134

)

(180,922

)

(198,146

)

 
Depreciation and amortization

7,943

 

8,508

 

35,901

 

33,782

 

 
EBITDA

(32,846

)

(73,626

)

(145,021

)

(164,364

)

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

17,168

 

41,175

 

89,447

 

102,722

 

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

2,447

 

14,400

 

5,001

 

19,933

 

Separation and transformation costs (general and administrative)

-

 

(705

)

-

 

2,117

 

 
Other adjustments

19,615

 

54,870

 

94,448

 

124,772

 

 
Adjusted EBITDA

(13,231

)

(18,756

)

(50,573

)

(39,592

)


Contacts

LiveRamp Investor Relations
Lauren Dillard
Investor.Relations@LiveRamp.com
ERAMP


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