Summary
LiveRamp reported first quarter fiscal 2021 results for the period ended June 30, 2020. Revenue was $99.4 million, up 20.5% from the prior-year quarter. Gross profit was $65.0 million, up 41.0% from the prior-year quarter, and gross margin expanded 9.5 percentage points to 65.3%. The company continued to narrow its losses. Operating loss was $26.0 million, an improvement of 46.2% from the prior-year quarter. Net loss was $21.7 million, a 48.4% improvement. Diluted loss per share was $0.33, an improvement of $0.28. On a non-GAAP basis, LiveRamp posted operating income of $1 million compared with a non-GAAP operating loss of $22 million in the prior-year quarter. That was the first quarterly non-GAAP operating profit. Non-GAAP gross profit was $71 million, up 38%, and non-GAAP gross margin was 71%, up 9 percentage points. Non-GAAP earnings per share was $0.01.
Operational momentum was visible in addressability products. ATS publisher adoption more than tripled during the quarter. LiveRamp now works with over 125 publishers globally, including 60% of the US Comscore 20 and 50% of the US Comscore 50. There are 20 supply-side platforms live or committed to implementing IdentityLink in the bidstream and 40 demand-side platforms live or committed to bid on IdentityLink. Subscription net retention was approximately 109%, and platform net retention was 111%. The company had 60 clients whose subscription contracts exceed $1 million in annual revenue, up from 45 in the prior-year period. Direct subscription customer count at quarter end was 780, an increase of 13% year over year. LiveRamp serves 22% of the Fortune 500 compared to 20% in the prior-year period. Advanced TV revenue rose over 50% in the quarter, and Safe Haven bookings, annual recurring revenue and revenue all rose over 100%. In early July, LiveRamp acquired Acuity Data, a team of retail and consumer packaged goods experts, for immaterial consideration.
Cash generation remained under pressure. Operating cash flow was negative $23.6 million, down 53.2% from the prior-year quarter. Capital expenditures were $0.8 million, down 83.0% from the prior-year quarter. Deferred revenue was $5.9 million, up 87.3% from the prior-year quarter. Remaining performance obligations were $339.1 million, up 6.2% from the prior-year quarter. The company repurchased 1.3 million shares for $42.3 million under its stock repurchase program. The non-GAAP adjustments for the quarter included non-cash stock compensation, purchased intangible asset amortization, restructuring and merger charges, and transformation costs. These adjustments turned the GAAP operating loss into the small non-GAAP operating profit.
For the second quarter of fiscal 2021, management provided guidance only for the quarter because of macroeconomic uncertainties. The company expects revenue growth of approximately 11% year over year and a non-GAAP operating loss of up to $7 million. It also guides to a GAAP operating loss but provides a reconciliation that excludes non-cash stock compensation, purchased intangible asset amortization, business transformation costs and restructuring charges. The quarter showed some COVID-19 effects. Revenue faced short-term service concessions related to the pandemic, and certain concessions may extend into subsequent periods. Management said the pandemic had some favorable impacts on results, such as reduced travel, entertainment and promotional costs, but there is no assurance those will recur. Other risks include dependence on customer renewals, new customer additions and upsell; reliance on partners and data suppliers; competition; attracting and retaining talent; maintaining culture while working remotely; acquisition and divestiture disruption; international operations; a significant security breach; unfavorable publicity; interruptions from data center hosting vendors; reliance on third-party data hosting; restrictions on client data use if third-party cookies and tracking technology decline; and changes in regulations and tax laws. Management believes existing available cash will be sufficient to meet working capital and capital expenditure requirements for the foreseeable future.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2021 | Q4 FY2020 | QoQ | Q1 FY2020 | YoY |
|---|---|---|---|---|---|
| Revenue | $99.4M | $105.7M | -5.9% | $82.5M | +20.5% |
| Gross profit | $65.0M | $68.8M | -5.6% | $46.1M | +41.0% |
| Gross margin | 65.3% | 65.1% | +0.2 pp | 55.9% | +9.5 pp |
| Research & development | $27.0M | $28.4M | -5.0% | $23.7M | +13.8% |
| Sales & marketing | $38.6M | $48.6M | -20.5% | $43.1M | -10.5% |
| General & administrative | $23.4M | $30.2M | -22.7% | $25.3M | -7.7% |
| Total operating expenses | $91.0M | $109.6M | -17.0% | $94.5M | -3.7% |
| Operating income (loss) | -$26.0M | -$40.8M | +36.2% | -$48.4M | +46.2% |
| Operating margin | -26.1% | -38.6% | +12.4 pp | -58.6% | +32.5 pp |
| Net income (loss) | -$21.7M | — | — | — | — |
| Net margin | -21.9% | — | — | — | — |
| Diluted EPS | -$0.33 | -$0.06 | -$0.27 | -$0.61 | +$0.28 |
| Net retention rate | 109.0% | 110.0% | -1.0 pp | 108.0% | +1.0 pp |
Risks
The COVID-19 pandemic has caused global economic uncertainty and may lead customers, especially in transportation, travel and hospitality, retail, and energy, to reduce advertising spending or delay advertising initiatives. Revenues for the quarter ended June 30, 2020 were negatively impacted by $1.4 million from short-term service concessions tied to COVID-19, and the company expects certain concessions to extend into subsequent periods.
LiveRamp depends on customer renewals, new customer additions, and increased revenue from existing customers for subscription revenue through IdentityLink. Existing customers have no obligation to renew, and renewal rates may decline due to pricing changes, competitor pricing, M&A affecting the customer base, or reduced customer spending; subscription declines may not be reflected until future quarters.
Operating cash flow was down $8.2 million, or 53.2%, to negative $23.6 million for the quarter ended June 30, 2020, and days sales outstanding were 88 days at June 30, 2020 compared to 80 days at March 31, 2020. Management is evaluating potential negative COVID-19 effects on customers' ability to pay accounts receivable, which increased $3.7 million to $96.5 million at June 30, 2020.
As the market matures and new competitors introduce alternative approaches, LiveRamp may be forced to reduce prices or may be unable to renew or enter customer agreements on historical terms. COVID-19 has also increased pressure for pricing discounts and competition from changes in competitors' terms and pricing.
The shift to a remote workplace for nearly all employees may increase cyberattacks and security challenges and depends on continued internet connectivity. A degradation in connectivity or a security incident could disrupt employee productivity and operations.
COVID-19 precautions have temporarily closed most offices, restricted non-essential travel, shifted events to virtual-only formats, and may delay hiring and onboarding. The company may incur unrecovered event costs and expenses to support remote work, with no assurance favorable cost impacts will recur.
The pandemic has caused significant global market volatility, interest rate and foreign currency volatility, and highly volatile trading prices for LiveRamp and other technology companies. This volatility may continue for the duration of the pandemic and beyond.
SaaS KPIs
All quarters →Non-GAAP Operating Margin
Platform Net Retention
Subscription Net Retention
Customers > $1M ARR
Free Cash Flow to Equity
Non-GAAP Gross Margin
Adjusted EBITDA
Direct Subscription Customer Count
Summary, forecast, risks and KPIs are extracted from LiveRamp Holdings, Inc.'s SEC filings for Q1 FY2021 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 2, 2026.