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

Third Quarter Financial Highlights

Total revenue was $120 million, up 17% compared to the prior year period.

Subscription revenue was $93 million, up 15% compared to the prior year period and contributed 78% of total revenue.

Marketplace & Other revenue was $26 million, up 27% compared to the prior year period.

GAAP gross profit was $83 million, up 29% compared to the prior year period. GAAP gross margin of 69% expanded 6 percentage points. Non-GAAP gross profit was $88 million, up 24% compared to the prior year period. Non-GAAP gross margin of 73% expanded 4 percentage points.

GAAP operating loss was $16 million compared to a GAAP operating loss of $41 million in the prior year period. Non-GAAP operating income was $12 million compared to a non-GAAP operating loss of $6 million in the prior year period.

GAAP loss per share was $0.18, and non-GAAP earnings per share was $0.14.

Net cash generated from operating activities was $15 million compared to net cash generated from operating activities of $16 million in the prior year period.

Cash and cash equivalents totaled $663 million with no debt at quarter end.

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

“With LiveRamp, brands don’t have to compromise data security and privacy for data utility – they can have both,” said LiveRamp CEO Scott Howe. “The past quarter has really validated the important role we play in helping our customers and partners safely and securely use data to deliver better customer experiences and ultimately drive growth across their enterprises. The explosive global adoption of our Authenticated Traffic Solution (or ATS) and new innovation like Safe Haven demonstrate the value we are creating for our customers.”

“Our record Q3 performance highlights the strength and leverage of our model,” added LiveRamp President and CFO Warren Jenson. “We delivered our first double-digit non-GAAP operating margin in the Company’s history, and we were again cash flow positive. We now expect to be profitable on a non-GAAP basis for the full year.”

GAAP and Non-GAAP Results

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

	Q3 Fiscal 2021		Q3 Fiscal 2020
	Results		Results
	GAAP	Non-GAAP	GAAP	Non-GAAP
Subscription revenue	$93	—	$82	—
YoY change %	15%		25%
Marketplace & other revenue	$26	—	$21	—
YoY change %	27%		38%
Total revenue	$120	—	$102	—
YoY change %	17%		28%

Gross profit	$83	$88	$64	$71
% Gross margin	69%	73%	63%	69%
YoY change, pts	6 pts	4 pts	6 pts	5 pts

Operating income (loss)	($16)	$12	($41)	($6)
% Operating margin	(13%)	10%	(41%)	(5%)
YoY change, pts	27 pts	16 pts	20 pts	8 pts

Net income (loss)	($12)	$10	($38)	($2)
YoY change %	nm	nm	nm	nm
Earnings (loss) per share	($0.18)	$0.14	($0.56)	($0.03)
YoY change %	nm	nm	nm	nm

Shares to Calculate EPS	66.5	69.8	67.5	67.5
YoY change %	(1%)	(0%)	(0%)	(0%)
Net operating cash flow	$15	—	$16	—
YoY change %	(7%)	—	nm
Free cash flow to equity	—	$14	—	$13
YoY change %	—	8%	—	nm

Totals may not sum due to rounding.

A detailed discussion of our non-GAAP financial measures and a reconciliation between GAAP and non-GAAP results is provided in the schedules to this press release.

Additional Business Highlights & Metrics

The Authenticated Traffic Solution (ATS), continues to experience strong global adoption. There are currently more than 25 supply-side platforms (SSPs) live or committed to implementing ATS. In addition, there are over 45 demand-side platforms (DSPs) live or committed to bid on the LiveRamp identifier, including The Trade Desk, Amobee, Criteo, dataxu, and MediaMath. Lastly, to date, more than 325 publishers globally have adopted ATS, including 65% of the U.S. Comscore 50.

During the third quarter, subscription net retention was 105% and platform net retention was 110%.

Current remaining performance obligations (RPO), which is contracted and committed revenue expected to be recognized over the next 12 months, was $231 million, up 15% compared to the third quarter of last year.

LiveRamp has 65 clients whose subscription contracts exceed $1 million in annual revenue, up 30% compared to the prior year period.

LiveRamp’s direct subscription customer count at quarter end was 810, up from 770 a year ago.

In a separate press release issued today, LiveRamp announced it has entered into a definitive agreement to acquire DataFleets, a cloud data platform that enables data silos to be unified without moving data or compromising privacy. To learn more about LiveRamp’s acquisition of DataFleets, please see the full blog post here.

Financial Outlook

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

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

Revenue of approximately $116 million, an increase of approximately 10% year-over-year
GAAP operating loss of approximately $31 million
Non-GAAP operating income of up to $1 million

For fiscal 2021, LiveRamp expects to report:

Revenue of approximately $440 million, an increase of approximately 16% year-over-year
GAAP operating loss of approximately $101 million
Non-GAAP operating income of up to $16 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 our suppliers, customers and partners; the Company’s dependence upon customer renewals; new customer additions and upsell within our subscription business; our reliance upon partners, including data suppliers; competition; and attracting and retaining talent. Additional risks relate to maintaining our culture and our ability to innovate and evolve while working remotely and within a rapidly changing industry, while also avoiding disruption from acquisition and divestiture activities. Our international operations are also subject to risks that may harm the Company’s business. The risk of a significant breach of the confidentiality of the information or the security of our or our customers’, suppliers’, or other partners’ computer systems could be detrimental to our business, reputation and results of operations. Other business risks include unfavorable publicity and negative public perception about our industry; interruptions or delays in service from data center hosting vendors we rely upon; and our dependence on the continued availability of third-party data hosting and transmission services. Our clients’ ability to use data on our platform could be restricted if the industry’s use of third-party cookies and tracking technology declines due to technology platform changes, regulation or increased user controls. Changes in regulations relating to information collection and use represents a risk, as well as changes in tax laws and regulations that are applied to our customers which could cause enterprise software budget tightening. In addition, third parties may claim that we are infringing their intellectual property or may infringe our intellectual property which could result in competitive injury and / or the incurrence of significant costs and draining of our resources.

For a discussion of these and other risks and uncertainties, please refer to LiveRamp’s Annual Report on Form 10-K for our fiscal year 2020 ended March 31, 2020, and LiveRamp's Quarterly Reports on Form 10-Q issued in fiscal year 2021.

The financial information set forth in this press release reflects estimates based on information available at this time.

LiveRamp assumes no obligation and does not currently intend to update these forward-looking statements.

To automatically receive LiveRamp financial news by email, please visit www.LiveRamp.com and subscribe to email alerts.

LiveRamp^Ⓡ, IdentityLink^TM, Abilitec^Ⓡ, Safe Haven^Ⓡ and all other LiveRamp marks contained herein are trademarks or service marks of LiveRamp, Inc. All other marks are the property of their respective owners.

LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except per share amounts)


	For the Three Months Ended
	December 31,
				$		%
	2020	2019		Variance		Variance

Revenues	119,753	102,217		17,536		17.2	%

Cost of revenue	37,085	37,966		(881	)	(2.3	%)
Gross profit	82,668	64,251		18,417		28.7	%
% Gross margin	69.0%	62.9	%

Operating expenses:
Research and development	30,608	27,403		3,205		11.7	%
Sales and marketing	43,904	51,993		(8,089	)	(15.6	%)
General and administrative	23,943	26,107		(2,164	)	(8.3	%)
Gains, losses and other items, net	(6)	233		(239	)	(102.6	%)
Total operating expenses	98,449	105,736		(7,287	)	(6.9	%)

Loss from operations	(15,781)	(41,485	)	25,704		62.0	%
% Margin	-13.2%	-40.6	%

Total other income (expense)	(86)	3,158		(3,244	)	(102.7	%)

Loss from operations before income taxes	(15,867)	(38,327	)	22,460		58.6	%

Income taxes (benefit)	(4,142)	(287	)	(3,855	)	(1343.2	%)

Net loss	(11,725)	(38,040	)	26,315		69.2	%

Basic loss per share	(0.18)	(0.56	)	0.39		68.7	%

Diluted loss per share:	(0.18)	(0.56	)	0.39		68.7	%

Basic weighted average shares	66,523	67,473

Diluted weighted average shares	66,523	67,473

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,
					$		%
	2020		2019		Variance		Variance

Revenues	323,851		274,871		48,980		17.8	%

Cost of revenue	106,447		115,852		(9,405	)	(8.1	%)
Gross profit	217,404		159,019		58,385		36.7	%
% Gross margin	67.1	%	57.9	%

Operating expenses:
Research and development	88,632		77,570		11,062		14.3	%
Sales and marketing	124,236		140,341		(16,105	)	(11.5	%)
General and administrative	71,806		78,687		(6,881	)	(8.7	%)
Gains, losses and other items, net	1,370		2,554		(1,184	)	(46.4	%)
Total operating expenses	286,044		299,152		(13,108	)	(4.4	%)

Loss from operations	(68,640	)	(140,133	)	71,493		51.0	%
% Margin	-21.2	%	-51.0	%

Total other income	152		13,820		(13,668	)	(98.9	%)

Loss from operations before income taxes	(68,488	)	(126,313	)	57,825		45.8	%

Income taxes (benefit)	(11,067	)	(5,931	)	(5,136	)	(86.6	%)

Net loss	(57,421	)	(120,382	)	62,961		52.3	%

Basic loss per share	(0.87	)	(1.77	)	0.90		50.9	%

Diluted loss per share:	(0.87	)	(1.77	)	0.90		50.9	%

Basic weighted average shares	66,034		68,021

Diluted weighted average shares	66,034		68,021

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,
	2020		2019		2020		2019


Loss from operations before income taxes	(15,867	)	(38,327	)	(68,488	)	(126,313	)

Income taxes (benefit)	(4,142	)	(287	)	(11,067	)	(5,931	)

Net loss	(11,725	)	(38,040	)	(57,421	)	(120,382	)

Loss per share:
Basic	(0.18	)	(0.56	)	(0.87	)	(1.77	)

Diluted	(0.18	)	(0.56	)	(0.87	)	(1.77	)

Excluded items:
Purchased intangible asset amortization (cost of revenue)	4,213		5,369		13,869		13,861
Non-cash stock compensation (cost of revenue and operating expenses)	23,894		30,295		64,583		72,279
Accelerated depreciation (cost of revenue and operating expenses)	-		-		-		3,569
Transformation costs (general and administrative)	-		-		3,863		-
Restructuring and merger charges (gains, losses, and other)	(6	)	233		1,370		2,554

Total excluded items	28,101		35,897		83,685		92,263

Income (loss) from operations before income taxes
and excluding items	12,234		(2,430	)	15,197		(34,050	)

Income taxes (benefit) (2)	2,347		(227	)	1,990		(253	)

Non-GAAP net earnings (loss)	9,887		(2,203	)	13,207		(33,797	)

Non-GAAP earnings (loss) per share:
Basic	0.15		(0.03	)	0.20		(0.50	)

Diluted	0.14		(0.03	)	0.19		(0.50	)

Basic weighted average shares	66,523		67,473		66,034		68,021

Diluted weighted average shares	69,775		67,473		68,639		68,021

(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,
	2020		2019		2020		2019


Loss from operations	(15,781	)	(41,485	)	(68,640	)	(140,133	)

Excluded items:
Purchased intangible asset amortization (cost of revenue)	4,213		5,369		13,869		13,861
Non-cash stock compensation (cost of revenue and operating expenses)	23,894		30,295		64,583		72,279
Accelerated depreciation (cost of revenue and operating expenses)	-		-		-		3,569
Transformation costs (general and administrative)	-		-		3,863		-
Restructuring and merger charges (gains, losses, and other)	(6	)	233		1,370		2,554

Total excluded items	28,101		35,897		83,685		92,263

Income (loss) from operations before excluded items	12,320		(5,588	)	15,045		(47,870	)

(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,
	2020		2019		2020		2019


Net loss	(11,725	)	(38,040	)	(57,421	)	(120,382	)

Income taxes (benefit)	(4,142	)	(287	)	(11,067	)	(5,931	)

Other expense (income)	86		(3,158	)	(152	)	(13,820	)

Loss from operations	(15,781	)	(41,485	)	(68,640	)	(140,133	)

Depreciation and amortization	6,509		8,104		21,464		27,958

EBITDA	(9,272	)	(33,381	)	(47,176	)	(112,175	)

Other adjustments:
Non-cash stock compensation (cost of revenue and operating expenses)	23,894		30,295		64,583		72,279
Transformation costs (general and administrative)	-		-		3,863		-
Restructuring and merger charges (gains, losses, and other)	(6	)	233		1,370		2,554

Other adjustments	23,888		30,528		69,816		74,833

Adjusted EBITDA	14,616		(2,853	)	22,640		(37,342	)

(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,		$		%
	2020		2020		Variance		Variance
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	663,401		717,811		(54,410	)	(7.6	%)
Restricted cash	-		14,815		(14,815	)	n/a
Trade accounts receivable, net	115,858		92,761		23,097		24.9	%
Refundable income taxes	47,709		38,340		9,369		24.4	%
Other current assets	31,685		32,666		(981	)	(3.0	%)

Total current assets	858,653		896,393		(37,740	)	(4.2	%)

Property and equipment	44,076		44,786		(710	)	(1.6	%)
Less - accumulated depreciation and amortization	30,555		25,465		5,090		20.0	%

Property and equipment, net	13,521		19,321		(5,800	)	(30.0	%)

Intangible assets, net	32,577		45,200		(12,623	)	(27.9	%)
Goodwill	301,321		297,796		3,525		1.2	%
Deferred commissions, net	21,096		16,014		5,082		31.7	%
Other assets, net	32,332		27,165		5,167		19.0	%

	1,259,500		1,301,889		(42,389	)	(3.3	%)

Liabilities and Stockholders' Equity
Current liabilities:
Trade accounts payable	44,464		42,204		2,260		5.4	%
Accrued payroll and related expenses	28,599		28,791		(192	)	(0.7	%)
Other accrued expenses	72,480		68,991		3,489		5.1	%
Acquisition escrow payable	-		14,815		(14,815	)	n/a
Deferred revenue	11,789		6,581		5,208		79.1	%

Total current liabilities	157,332		161,382		(4,050	)	(2.5	%)

Other liabilities	43,667		52,995		(9,328	)	(17.6	%)

Stockholders' equity:
Preferred stock	-		-		-		n/a
Common stock	14,647		14,394		253		1.8	%
Additional paid-in capital	1,574,347		1,496,565		77,782		5.2	%
Retained earnings	1,487,673		1,545,094		(57,421	)	(3.7	%)
Accumulated other comprehensive income	7,814		5,745		2,069		36.0	%
Treasury stock, at cost	(2,025,980	)	(1,974,286	)	(51,694	)	(2.6	%)
Total stockholders' equity	1,058,501		1,087,512		(29,011	)	(2.7	%)

	1,259,500		1,301,889		(42,389	)	(3.3	%)

LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)

	For the Three Months Ended
	December 31,
	2020		2019

Cash flows from operating activities:
Net loss	(11,725	)	(38,040	)
Non-cash operating activities:
Depreciation and amortization	6,509		8,104
Loss (gain) on disposal or impairment of assets	1		-
Provision for doubtful accounts	824		1,253
Deferred income taxes	485		6,548
Non-cash stock compensation expense	23,894		30,295
Changes in operating assets and liabilities:
Accounts receivable	(17,062	)	(593	)
Deferred commissions	(1,637	)	(2,104	)
Other assets	(192	)	6,301
Accounts payable and other liabilities	13,824		9,776
Income taxes	(5,399	)	(5,634	)
Deferred revenue	5,168		(102	)
Net cash provided by operating activities	14,690		15,804
Cash flows from investing activities:
Capital expenditures	(678	)	(2,773	)
Purchases of investments	(3,000	)	-
Purchases of strategic investments	(327	)	-
Cash paid in acquisition, net of cash received	(14,815	)	-
Net cash used in investing activities	(18,820	)	(2,773	)
Cash flows from financing activities:
Proceeds related to the issuance of common stock under stock and employee benefit plans	5,115		1,313
Shares repurchased for tax withholdings upon vesting of stock-based awards	(3,627	)	(4,150	)
Acquisition of treasury stock	-		(20,715	)
Net cash provided by (used in) financing activities	1,488		(23,552	)
Effect of exchange rate changes on cash	537		278

Net change in cash, cash equivalents, and restricted cash	(2,105	)	(10,243	)
Cash, cash equivalents, and restricted cash at beginning of period	665,506		792,258
Cash, cash equivalents, and restricted cash at end of period	663,401		782,015

Supplemental cash flow information:
Cash paid during the period for:
Income taxes	771		19

LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)

	For the Nine Months Ended
	December 31,
	2020		2019

Cash flows from operating activities:
Net loss	(57,421	)	(120,382	)
Non-cash operating activities:
Depreciation and amortization	21,464		27,958
Loss (gain) on disposal or impairment of assets	334		(140	)
Provision for doubtful accounts	3,346		3,683
Deferred income taxes	-		1,465
Non-cash stock compensation expense	64,583		72,279
Changes in operating assets and liabilities:
Accounts receivable	(26,646	)	(11,851	)
Deferred commissions	(5,082	)	(2,710	)
Other assets	7,511		2,404
Accounts payable and other liabilities	(6,847	)	12,597
Income taxes	(8,982	)	(13,423	)
Deferred revenue	5,067		(235	)
Net cash used in operating activities	(2,673	)	(28,355	)
Cash flows from investing activities:
Capital expenditures	(1,806	)	(10,302	)
Proceeds from sales of property and equipment	-		517
Purchases of investments	(3,000	)	-
Purchases of strategic investments	(2,200	)	-
Cash paid in acquisition, net of cash received	(17,748	)	(105,365	)
Net cash used in investing activities	(24,754	)	(115,150	)
Cash flows from financing activities:
Proceeds related to the issuance of common stock under stock and employee benefit plans	8,676		3,405
Shares repurchased for tax withholdings upon vesting of stock-based awards	(9,382	)	(18,057	)
Acquisition of treasury stock	(42,312	)	(121,188	)
Net cash used in financing activities	(43,018	)	(135,840	)
Effect of exchange rate changes on cash	1,220		(113	)

Net change in cash, cash equivalents, and restricted cash	(69,225	)	(279,458	)
Cash, cash equivalents, and restricted cash at beginning of period	732,626		1,061,473
Cash, cash equivalents, and restricted cash at end of period	663,401		782,015

Supplemental cash flow information:
Cash paid (received) during the period for:
Income taxes	(2,092	)	6,171

LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
CALCULATION OF FREE CASH FLOW TO EQUITY (1)
(Unaudited)
(Dollars in thousands)


		06/30/19		09/30/19		12/31/19		03/31/20		FY2020		06/30/20		09/30/20		12/31/20		FY2021

Net Cash Provided by (Used in) Operating Activities		(15,408	)	(28,751	)	15,804		(220	)	(28,575	)	(23,612	)	6,249		14,690		(2,673	)

Less:
	Capital expenditures	(4,888	)	(2,641	)	(2,773	)	(1,409	)	(11,711	)	(832	)	(296	)	(678	)	(1,806	)

Free Cash Flow to Equity		(20,296	)	(31,392	)	13,031		(1,629	)	(40,286	)	(24,444	)	5,953		14,012		(4,479	)

(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)

																				Q3 FY21 to Q3 FY20
		06/30/19		09/30/19		12/31/19		03/31/20		FY2020		06/30/20		09/30/20		12/31/20		FY2021		%		$
	Revenues	82,511		90,143		102,217		105,701		380,572		99,437		104,661		119,753		323,851		17.2	%	17,536

	Cost of revenue	36,426		41,460		37,966		36,852		152,704		34,465		34,897		37,085		106,447		(2.3	%)	(881	)
	Gross profit	46,085		48,683		64,251		68,849		227,868		64,972		69,764		82,668		217,404		28.7	%	18,417
	% Gross margin	55.9	%	54.0	%	62.9	%	65.1	%	59.9	%	65.3	%	66.7	%	69.0	%	67.1	%

	Operating expenses
	Research and development	23,722		26,445		27,403		28,411		105,981		26,989		31,035		30,608		88,632		11.7	%	3,205
	Sales and marketing	43,144		45,204		51,993		48,564		188,905		38,627		41,705		43,904		124,236		(15.6	%)	(8,089	)
	General and administrative	25,318		27,262		26,107		30,216		108,903		23,368		24,495		23,943		71,806		(8.3	%)	(2,164	)
	Gains, losses and other items, net	2,276		45		233		2,447		5,001		1,995		(619	)	(6	)	1,370		(102.6	%)	(239	)
	Total operating expenses	94,460		98,956		105,736		109,638		408,790		90,979		96,616		98,449		286,044		(6.9	%)	(7,287	)

	Loss from operations	(48,375	)	(50,273	)	(41,485	)	(40,789	)	(180,922	)	(26,007	)	(26,852	)	(15,781	)	(68,640	)	62.0	%	25,704
	% Margin	-58.6	%	-55.8	%	-40.6	%	-38.6	%	-47.5	%	-26.2	%	-25.7	%	-13.2	%	-21.2	%

	Total other income (expense)	5,882		4,780		3,158		1,565		15,385		463		(225	)	(86	)	152		(102.7	%)	(3,244	)

	Loss from continuing operations before income taxes	(42,493	)	(45,493	)	(38,327	)	(39,224	)	(165,537	)	(25,544	)	(27,077	)	(15,867	)	(68,488	)	58.6	%	22,460

	Income taxes (benefit)	(353	)	(5,291	)	(287	)	(34,345	)	(40,276	)	(3,816	)	(3,109	)	(4,142	)	(11,067	)	(1343.2	%)	(3,855	)

	Net loss from continuing operations	(42,140	)	(40,202	)	(38,040	)	(4,879	)	(125,261	)	(21,728	)	(23,968	)	(11,725	)	(57,421	)	69.2	%	26,315

	Earnings from discontinued operations, net of tax	-		-		-		750		750		-		-		-		-		n/a		-

	Net loss	(42,140	)	(40,202	)	(38,040	)	(4,129	)	(124,511	)	(21,728	)	(23,968	)	(11,725	)	(57,421	)	69.2	%	26,315

	Diluted loss per share	(0.61	)	(0.59	)	(0.56	)	(0.06	)	(1.84	)	(0.33	)	(0.36	)	(0.18	)	(0.87	)	68.7	%	0.39

	Diluted loss per share continuing operations	(0.61	)	(0.59	)	(0.56	)	(0.07	)	(1.85	)	(0.33	)	(0.36	)	(0.18	)	(0.87	)	68.7	%	0.39

	Some loss per share amounts may not add due to rounding.

	Basic shares	68,906		67,684		67,473		66,977		67,760		65,570		66,010		66,523		66,034
	Diluted shares	68,906		67,684		67,473		66,977		67,760		65,570		66,010		66,523		66,034

LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP EPS (1)
(Unaudited)
(Dollars in thousands, except per share amounts)



	06/30/19		09/30/19		12/31/19		03/31/20		FY2020		06/30/20		09/30/20		12/31/20		FY2021


Loss from continuing operations before income taxes	(42,493	)	(45,493	)	(38,327	)	(39,224	)	(165,537	)	(25,544	)	(27,077	)	(15,867	)	(68,488	)
Income taxes (benefit)	(353	)	(5,291	)	(287	)	(34,345	)	(40,276	)	(3,816	)	(3,109	)	(4,142	)	(11,067	)
Net loss from continuing operations	(42,140	)	(40,202	)	(38,040	)	(4,879	)	(125,261	)	(21,728	)	(23,968	)	(11,725	)	(57,421	)

Earnings from discontinued operations, net of tax	-		-		-		750		750		-		-		-		-

Net loss	(42,140	)	(40,202	)	(38,040	)	(4,129	)	(124,511	)	(21,728	)	(23,968	)	(11,725	)	(57,421	)

Loss per share:
Basic	(0.61	)	(0.59	)	(0.56	)	(0.06	)	(1.84	)	(0.33	)	(0.36	)	(0.18	)	(0.87	)
Diluted	(0.61	)	(0.59	)	(0.56	)	(0.06	)	(1.84	)	(0.33	)	(0.36	)	(0.18	)	(0.87	)

Excluded items:
Purchased intangible asset amortization (cost of revenue)	3,123		5,369		5,369		5,181		19,042		5,306		4,350		4,213		13,869
Non-cash stock compensation (cost of revenue and operating expenses)	18,630		23,354		30,295		17,168		89,447		16,485		24,204		23,894		64,583
Accelerated depreciation (cost of revenue and operating expenses)	1,906		1,663		-		-		3,569		-		-		-		-
Restructuring and merger charges (gains, losses, and other)	2,276		45		233		2,447		5,001		1,995		(619	)	(6	)	1,370
Transformation costs (general and administrative)	-		-		-		-		-		3,605		258		-		3,863
Total excluded items, continuing operations	25,935		30,431		35,897		24,796		117,059		27,391		28,193		28,101		83,685

Income (loss) from continuing operations before income taxes
and excluding items	(16,558	)	(15,062	)	(2,430	)	(14,428	)	(48,478	)	1,847		1,116		12,234		15,197
Income taxes (benefit)	(216	)	190		(227	)	(11,199	)	(11,452	)	934		(1,291	)	2,347		1,990
Non-GAAP net earnings (loss) from continuing operations	(16,342	)	(15,252	)	(2,203	)	(3,229	)	(37,026	)	913		2,407		9,887		13,207

Non-GAAP earnings (loss) per share from continuing operations:
Basic	(0.24	)	(0.23	)	(0.03	)	(0.05	)	(0.55	)	0.01		0.04		0.15		0.20
Diluted	(0.24	)	(0.23	)	(0.03	)	(0.05	)	(0.55	)	0.01		0.03		0.14		0.20

Basic weighted average shares	68,906		67,684		67,473		66,977		67,760		65,570		66,010		66,523		66,034
Diluted weighted average shares	68,906		67,684		67,473		66,977		67,760		67,337		68,804		69,775		68,639

Some totals may not add due to rounding

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

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


	06/30/19		09/30/19		12/31/19		03/31/20		FY2020		06/30/20		09/30/20		12/31/20		FY2021

Expenses:
Cost of revenue	36,426		41,460		37,966		36,852		152,704		34,465		34,897		37,085		106,447
Research and development	23,722		26,445		27,403		28,411		105,981		26,989		31,035		30,608		88,632
Sales and marketing	43,144		45,204		51,993		48,564		188,905		38,627		41,705		43,904		124,236
General and administrative	25,318		27,262		26,107		30,216		108,903		23,368		24,495		23,943		71,806
Gains, losses and other items, net	2,276		45		233		2,447		5,001		1,995		(619	)	(6	)	1,370

Gross profit:	46,085		48,683		64,251		68,849		227,868		64,972		69,764		82,668		217,404
% Gross margin	55.9	%	54.0	%	62.9	%	65.1	%	59.9	%	65.3	%	66.7	%	69.0	%	67.1	%

Excluded items:
Purchased intangible asset amortization (cost of revenue)	3,123		5,369		5,369		5,181		19,042		5,306		4,350		4,213		13,869
Non-cash stock compensation (cost of revenue)	755		1,060		1,028		926		3,769		775		913		988		2,676
Non-cash stock compensation (research and development)	4,451		6,346		6,462		6,001		23,260		5,886		7,713		7,376		20,975
Non-cash stock compensation (sales and marketing)	8,920		9,758		15,670		3,678		38,026		7,123		9,233		9,212		25,568
Non-cash stock compensation (general and administrative)	4,504		6,190		7,135		6,563		24,392		2,701		6,345		6,318		15,364
Accelerated depreciation (cost of revenue)	1,487		1,245		-		-		2,732		-		-		-		-
Accelerated depreciation (general and administrative)	419		418		-		-		837		-		-		-		-
Restructuring and merger charges (gains, losses, and other)	2,276		45		233		2,447		5,001		1,995		(619	)	(6	)	1,370
Transformation costs (general and administrative)	-		-		-		-		-		3,605		258		-		3,863
Total excluded items	25,935		30,431		35,897		24,796		117,059		27,391		28,193		28,101		83,685

Expenses, excluding items:
Cost of revenue	31,061		33,786		31,569		30,745		127,161		28,384		29,634		31,884		89,902
Research and development	19,271		20,099		20,941		22,410		82,721		21,103		23,322		23,232		67,657
Sales and marketing	34,224		35,446		36,323		44,886		150,879		31,504		32,472		34,692		98,668
General and administrative	20,395		20,654		18,972		23,653		83,674		17,062		17,892		17,625		52,579
Gains, losses and other items, net	-		-		-		-		-		-		-		-		-

Gross profit, excluding items:	51,450		56,357		70,648		74,956		253,411		71,053		75,027		87,869		233,949
% Gross margin	62.4	%	62.5	%	69.1	%	70.9	%	66.6	%	71.5	%	71.7	%	73.4	%	72.2	%

(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, 2021			March 31, 2021

GAAP loss from operations		(31,000	)		(101,000	)

Excluded items:
Purchased intangible asset amortization		4,000			18,000
Non-cash stock compensation		24,000			89,000
Transformation costs		-			4,000
Restructuring and merger charges		4,000			6,000
Total excluded items		32,000			117,000

Non-GAAP income from operations	$	1,000		$	16,000

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

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

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

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

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

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

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

Accelerated depreciation: In the prior year we excluded depreciation costs associated with the reduced useful life of certain IT equipment in connection with the Company's migration to a cloud-based data center solution. This migration was part of our AMS separation strategy. These costs are excluded from our non-GAAP results because of the short-term nature of the incremental expenses and such amounts are not used by us to assess the core profitability of our business operations.

Our non-GAAP financial schedules are:

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

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

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

LiveRamp Announces Third Quarter Results