Document

“This was another outstanding quarter, fueled by record bookings and accelerating top-line growth,” said LiveRamp President and CFO Warren Jenson. “Our forward growth metrics remain strong: ARR exiting Q2 was up 40% year-over-year, and our Marketplace business grew by more than 80%. Added together, our business continues to demonstrate its strength and durability. In addition, the acquisition of Data Plus Math is already paying dividends. LiveRamp TV was up more than 70% year-over-year.”


	Q2 Fiscal 2020									Q2 Fiscal 2019
	Results									Results
	GAAP			Non-GAAP			GAAP			Non-GAAP
Subscription revenue	$	72		$	—		$	55		$	—
YoY change %	31		%				30		%
Marketplace & other revenue	$	18		$	—		$	10		$	—
YoY change %	83		%				(15)		%
Total revenue	$	90		$	—		$	65		$	—
YoY change %	39		%				20		%

Gross profit	$	49		$	56		$	40		$	45
% Gross margin	54		%	63		%	62		%	69		%
YoY change, pts	(8 pts)			(6pts)			7 pts			1 pt

Operating loss	$	(50)		$	(20)		$	(38)		$	(14)
% Operating margin	(56)		%	(22)		%	(59)		%	(22)		%
YoY change, pts	3 pts			–pts			12 pts			(2) pts

Net loss¹	$	(40)		$	(15)		$	(41)		$	(11)
YoY change %	nm			nm			nm			nm
Loss per share¹	$	(59.00)		$	(0.23)		$	(0.53)		$	(0.14)
YoY change %	nm			nm			nm			nm

Shares to Calculate EPS	67.7			67.7			77.4			77.4
YoY change %	(13)		%
Net operating cash flow	$	(29)		$	—		$	(27)		$	—
YoY change %	nm			—			nm
Free cash flow to equity	$	—		$	(31)		$	—		$	(32)
YoY change %	—			nm			—			nm

¹From continuing operations, does not include AMS results.
Totals may not sum due to rounding.

•LiveRamp announced new partnerships with MediaMath and Rubicon Project to enable marketers to buy publisher inventory with LiveRamp's IdentityLink™ graph as part of its Authenticated Traffic Solution (ATS) and IdentityLink in the bidstream efforts. These integrations allow people-based identity to be efficiently passed in real-time and enable marketers to connect with their customers using a consistent, omnichannel view of the consumer that is not reliant on third-party cookies.

LiveRamp provides the identity platform leveraged by brands and their partners to deliver innovative products and exceptional experiences. LiveRamp’s IdentityLink™ connects people, data, and devices across the digital and physical world, powering the people-based marketing revolution and allowing consumers to safely connect with the brands and products they love. For more information, visit www.LiveRamp.com.

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.

Among the factors that may cause actual results and expectations to differ from anticipated results and expectations expressed in forward-looking statements relate to 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 within a rapidly changing industry including digital advertising, 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 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.



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

	For the three months ended September 30,
					$	%
	2019		2018		Variance	Variance

Revenues	90,143		64,812		25,331	39.1	%
Cost of revenue	41,460		24,466		16,994	69.5	%
Gross profit	48,683		40,346		8,337	20.7	%
% Gross margin	54.0	%	62.3	%

Operating expenses:
Research and development	26,445		16,940		9,505	56.1	%
Sales and marketing	45,204		35,940		9,264	25.8	%
General and administrative	27,262		25,176		2,086	8.3	%
Gains, losses and other items, net	45		489		(444)	NA
Total operating expenses	98,956		78,545		20,411	26.0	%

Loss from operations	(50,273)		(38,199)		(12,074)	(31.6)	%
% Margin	(55.8)	%	(58.9)	%




Total other income (expense)	4,780		(281)		5,061	1,801.1	%

Loss from continuing operations before income taxes	(45,493)		(38,480)		(7,013)	(18.2)	%
Income taxes (benefit)	(5,291)		2,700		(7,991)	(296.0)	%
Net loss from continuing operations	(40,202)		(41,180)		978	2.4	%
Earnings from discontinued operations, net of tax	—		61,803		(61,803)	(100.0)	%

Net earnings (loss)	(40,202)		20,623		(60,825)	(294.9)	%

Basic earnings (loss) per share:
Continuing operations	(0.59)		(0.53)		(0.06)	(11.7)	%
Discontinued operations	—		0.80		(0.80)	(100.0)	%
Net earnings (loss)	(0.59)		0.27		(0.86)	(323.1)	%

Diluted earnings (loss) per share:
Continuing operations	(0.59)		(0.53)		(0.06)	(11.7)	%
Discontinued operations	—		0.80		(0.80)	(100.0)	%
Net earnings (loss)	(0.59)		0.27		(0.86)	(323.1)	%

Basic weighted average shares	67,684		77,448
Diluted weighted average shares	67,684		77,448



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

	For the six months ended September 30,
					$	%
	2019		2018		Variance	Variance

Revenues	172,654		127,283		45,371	35.6	%
Cost of revenue	77,886		48,120		29,766	61.9	%
Gross profit	94,768		79,163		15,605	19.7	%
% Gross margin	54.9	%	62.2	%

Operating expenses:
Research and development	50,167		33,910		16,257	47.9	%
Sales and marketing	88,348		69,263		19,085	27.6	%
General and administrative	52,580		43,301		9,279	21.4	%
Gains, losses and other items, net	2,321		490		1,831	373.7	%
Total operating expenses	193,416		146,964		46,452	31.6	%

Loss from operations	(98,648)		(67,801)		(30,847)	(45.5)	%
% Margin	(57.1)	%	(53.3)	%
Other income (expense):
Interest expense	—		—		—	—	%
Other, net	10,662		75		10,587	14,116.0	%
Total other income	10,662		75		10,587	14,116.0	%

Loss from continuing operations before income taxes	(87,986)		(67,726)		(20,260)	(29.9)	%
Income taxes (benefit)	(5,644)		1,272		(6,916)	(543.7)	%
Net loss from continuing operations	(82,342)		(68,998)		(13,344)	(19.3)	%
Earnings from discontinued operations, net of tax	—		86,606		(86,606)	(100.0)	%

Net earnings (loss)	(82,342)		17,608		(99,950)	(567.6)	%

Basic earnings (loss) per share:
Continuing operations	(1.21)		(0.89)		(0.31)	(34.9)	%
Discontinued operations	—		1.12		(1.12)	(100.0)	%
Net earnings (loss)	(1.21)		0.23		(1.43)	(628.6)	%

Diluted earnings (loss) per share:
Continuing operations	(1.21)		(0.89)		(0.31)	(34.9)	%
Discontinued operations	—		1.12		(1.12)	(100.0)	%
Net earnings (loss)	(1.21)		0.23		(1.43)	(628.6)	%

Basic weighted average shares	68,295		77,192
Diluted weighted average shares	68,295		77,192



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 September 30,						For the six months ended September 30,
	2019		2018		2019		2018

Loss from continuing operations before income taxes	(45,493)		(38,480)		(87,986)		(67,726)
Income taxes (benefit)	(5,291)		2,700		(5,644)		1,272
Net loss from continuing operations	(40,202)		(41,180)		(82,342)		(68,998)
Earnings from discontinued operations, net of tax	—		61,803		—		86,606
Net earnings (loss)	$	(40,202)	$	20,623	$	(82,342)	$	17,608

Earnings (loss) per share:
Basic	(0.59)		0.27		(1.21)		0.23
Diluted	(0.59)		0.27		(1.21)		0.23

Excluded items:
Purchased intangible asset amortization (cost of revenue)	$	5,369	$	3,548	$	8,492	$	9,518
Non-cash stock compensation (cost of revenue and operating expenses)	23,354		17,667		41,984		35,465
Accelerated depreciation (cost of revenue and operating expenses	1,663		—		3,569		—
Restructuring and merger charges (gains, losses, and other)	45		489		2,321		490
Separation and transformation costs (general and administrative)	—		2,122		—		2,122
Total excluded items, continuing operations	30,431		23,826		56,366		47,595

Loss from continuing operations before income taxes and excluding items	(15,062)		(14,654)		(31,620)		(20,131)
Income taxes (benefit) (2)	190		(3,790)		(26)		(4,868)
Non-GAAP net loss from continuing operations	(15,252)		(10,864)		(31,594)		(15,263)

Non-GAAP loss per share from continuing operations:
Basic	$	(0.23)	(0.14)		(0.46)		(0.20)
Diluted	$	(0.23)	(0.14)		(0.46)		(0.20)

Basic weighted average shares	67,684		77,448		68,295		77,192
Diluted weighted average shares	67,684		77,448		68,295		77,192

(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 LOSS FROM OPERATIONS (1)
(Unaudited)
(Dollars in thousands)

	For the three months ended September 30,			For the six months ended September 30,
	2019	2018	2019	2018

Loss from continuing operations	(50,273)	(38,199)	(98,648)	(67,801)

Excluded items:
Purchased intangible asset amortization (cost of revenue)	5,369	3,548	8,492	9,518
Non-cash stock compensation (cost of revenue and operating expenses)	23,354	17,667	41,984	35,465
Accelerated depreciation (cost of revenue and operating expenses	1,663	—	3,569	—
Restructuring and merger charges (gains, losses, and other)	45	489	2,321	490
Separation and transformation costs (general and administrative)	—	2,122	—	2,122
Total excluded items	30,431	23,826	56,366	47,595

Loss from continuing operations before excluded items	(19,842)	(14,373)	(42,282)	(20,206)



LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
RECONCILIATION OF ADJUSTED EBITDA (1)
(Unaudited)
(Dollars in thousands)

	For the three months ended September 30,			For the six months ended September 30,
	2019	2018	2019	2018

Net loss from continuing operations	(40,202)	(41,180)	(82,342)	(68,998)

Income taxes (benefit)	(5,291)	2,700	(5,644)	1,272

Other income (expense)	(4,780)	281	(10,662)	(75)

Loss from operations	(50,273)	(38,199)	(98,648)	(67,801)

Depreciation and amortization	10,977	7,010	19,854	16,540

EBITDA	(39,296)	(31,189)	(78,794)	(51,261)


Other adjustments:
Non-cash stock compensation (cost of revenue and operating expenses)	23,354	17,667	41,984	35,465
Restructuring and merger charges (gains, losses, and other)	45	489	2,321	490
Separation and transformation costs (general and administrative)	—	2,122	—	2,122

Other adjustments	23,399	20,278	44,305	38,077

Adjusted EBITDA	(15,897)	(10,911)	(34,489)	(13,184)

(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)

	September 30,	March 31,	$	%
	2019	2019	Variance	Variance
Assets
Current assets:
Cash and cash equivalents	777,443	1,061,473	(284,030)	(26.8)	%
Restricted cash	14,815	—	14,815	100.0	%
Trade accounts receivable, net	88,150	78,563	9,587	12.2	%
Refundable income taxes	15,676	7,890	7,786	98.7	%
Other current assets	51,055	44,150	6,905	15.6	%
Total current assets	947,139	1,192,076	(244,937)	(20.5)	%

Property and equipment	64,440	64,852	(412)	(0.6)	%
Less - accumulated depreciation and amortization	43,278	38,809	4,469	11.5	%
Property and equipment, net	21,162	26,043	(4,881)	(18.7)	%

Software, net of accumulated amortization	27,413	6,861	20,552	299.5	%
Goodwill	297,477	204,656	92821	45.4	%
Deferred income taxes	35	35	—	—	%
Deferred commissions, net	11,347	10,741	606	5.6	%
Other assets, net	58,657	32,499	26,158	80.5	%
	1,363,230	1,472,911	(109,681)	(7.4)	%

Liabilities and Stockholders' Equity
Current liabilities:
Trade accounts payable	31,721	31,203	518	1.7	%
Accrued payroll and related expenses	16,716	18,715	(1,999)	(10.7)	%
Other accrued expenses	55,724	40,916	14,808	36.2	%
Acquisition escrow payable	14,815	—	14,815	100.0	%
Deferred revenue	4,447	4,284	163	3.8	%
Total current liabilities	123,423	95,118	28,305	29.8	%

Deferred income taxes	1,500	39	1,461	3,746.2	%
Other liabilities	51,949	46,922	5027	10.7	%

Stockholders' equity:
Common stock	14,310	14,187	123	0.9	%
Additional paid-in capital	1,460,120	1,406,813	53,307	3.8	%
Retained earnings	1,587,263	1,669,605	(82,342)	(4.9)	%
Accumulated other comprehensive income	6,619	7,801	(1,182)	(15.2)	%
Treasury stock, at cost	(1,881,954)	(1,767,574)	(114,380)	6.5	%
Total stockholders' equity	1,186,358	1,330,832	(144,474)	(10.9)	%
	1,363,230	1,472,911	(109,681)	(7.4)	%



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

	For the three months ended September 30,
	2019	2018

Cash flows from operating activities:
Net earnings (loss)	(40,202)	20,623
Earnings from discontinued operations, net of tax	—	(61,803)
Non-cash operating activities:
Depreciation and amortization	10,977	7,010
Loss (gain) on disposal or impairment of assets	(225)	490
Provision for doubtful accounts	1,468	1,095
Deferred income taxes	(5,090)	14,136
Non-cash stock compensation expense	23,354	17,667
Changes in operating assets and liabilities:
Accounts receivable	(7,807)	(1,797)
Deferred commissions	(780)	(1,049)
Other assets	(7,497)	1,838
Accounts payable and other liabilities	3,009	(8,880)
Income taxes	(6,926)	(14,518)
Deferred revenue	968	(1,942)
Net cash used in operating activities	(28,751)	(27,130)
Cash flows from investing activities:
Capitalized software	—	(423)
Capital expenditures	(2,641)	(1,323)
Proceeds from sale of assets	517	—
Cash paid in acquisition, net of cash received	(100,886)	—
Net cash used in investing activities	(103,010)	(1,746)
Cash flows from financing activities:
Payments of debt	—	(2,701)
Proceeds related to the issuance of common stock under stock and employee benefit plans	1,032	4,005
Shares repurchased for tax withholdings upon vesting of stock-based awards	(1,814)	(4,580)
Acquisition of treasury stock	(80,374)	—
Net cash used in financing activities	(81,156)	(3,276)


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

	For the three months ended September 30,
	2019	2018
Cash flows from discontinued operations:
From operating activities	—	34,135
From investing activities	—	(7,929)
Effect of exchange rate changes on cash	—	(5)
Net cash provided by discontinued operations	—	26,201
Effect of exchange rate changes on cash	(302)	(557)

Net change in cash, cash equivalents and restricted cash	(213,219)	(6,508)
Cash, cash equivalents and restricted cash at beginning of period	1,005,477	93,555
Cash, cash equivalents and restricted cash at end of period	792,258	87,047

Supplemental cash flow information:
Cash paid (received) during the period for:
Income taxes	6,042	(741)



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

	For the six months ended September 30,
	2019	2018

Cash flows from operating activities:
Net earnings (loss)	(82,342)	17,608
Earnings from discontinued operations	—	(86,606)
Non-cash operating activities:
Depreciation and amortization	19,854	16,540
Loss (gain) on disposal or impairment of assets	(140)	475
Provision for doubtful accounts	2,430	631
Deferred income taxes	(5,083)	12,444
Non-cash stock compensation expense	41,984	35,465
Changes in operating assets and liabilities:
Accounts receivable	(11,258)	(2,649)
Deferred commissions	(606)	(2,047)
Other assets	(3,897)	1,264
Accounts payable and other liabilities	2,821	(4,604)
Income taxes	(7,789)	(16,416)
Deferred revenue	(133)	(1,515)
Net cash used in operating activities	(44,159)	(29,410)
Cash flows from investing activities:
Capitalized software	—	(1,322)
Capital expenditures	(7,529)	(2,035)
Proceeds from sale of assets	517	—
Cash paid in acquisition, net of cash received	(105,365)	—
Payments for investments	—	(2,500)
Net cash used in investing activities	(112,377)	(5,857)
Cash flows from financing activities:
Payments of debt	—	(3,293)
Fees from debt refinancing	—	(300)
Proceeds related to the issuance of common stock under stock and employee benefit plans	2,092	8,121
Shares repurchased for tax withholdings upon vesting of stock-based awards	(13,907)	(14,624)
Acquisition of treasury stock	(100,473)	(45,766)
Net cash used in financing activities	(112,288)	(55,862)


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

	For the six months ended September 30,
	2019	2018

Cash flows from discontinued operations:
From operating activities	—	54,316
From investing activities	—	(14,502)
Effect of exchange rate changes on cash	—	(172)
Net cash provided by discontinued operations	—	39,642
Effect of exchange rate changes on cash	(391)	(1,484)

Net change in cash, cash equivalents and restricted cash	(269,215)	(52,971)
Cash, cash equivalents and restricted cash at beginning of period	1,061,473	140,018
Cash, cash equivalents and restricted cash at end of period	792,258	87,047

Supplemental cash flow information:
Cash paid during the period for:
Income taxes	6,152	115



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


		6/30/2018	9/30/2018		12/31/2018		3/31/2019		FY2019				6/30/2019	9/30/2019		FY2020

Net Cash Provided by (Used in) Operating Activities of Continuing Operations			$	(2,280)	$	(27,130)	$	(10,922)	$	38,354	$	(1,978)		$	(15,408)	$	(28,751)	$	(44,159)

Less (plus):
	Capitalized software	(899)	(423)		—		—		(1,322)				—	—		—
	Capital expenditures	(712)	(1,323)		(1,938)		(3,347)		(7,320)				(4,888)	(2,641)		(7,529)
	Required debt payments	(592)	(2,701)		—		—		(3,293)				—	—		—

Free Cash Flow to Equity			$	(4,483)	$	(31,577)	$	(12,860)	$	35,007	$	(13,913)		$	(20,296)	$	(31,392)	$	(51,688)

(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
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except per share amounts)
																									Q2 FY20 to Q2 FY19
	6/30/2018			9/30/2018			12/31/2018			3/31/2019			FY2019			6/30/2019			9/30/2019			FY2020			%			$

Revenues	$	62,471		$	64,812		$	80,021		$	78,316		$	285,620		$	82,511		$	90,143		$	172,654		$	0.405		$	25,331
Cost of revenue	23,654			24,466			34,838			37,760			120,718			36,426			41,460			77,886			71.8		%	16,994
Gross profit	38,817			40,346			45,183			40,556			164,902			46,085			48,683			94,768			21.5		%	8,337
% Gross margin	62.1		%	62.3		%	56.5		%	51.8		%	57.7		%	55.9		%	54.0		%	54.9		%

Operating expenses
Research and development	16,970			16,940			20,469			31,318			85,697			23,722			26,445			50,167			56.0		%	9,505
Sales and marketing	33,323			35,940			40,054			49,223			158,540			43,144			45,204			88,348			27.8		%	9,264
General and administrative	18,125			25,176			27,828			27,749			98,878			25,318			27,262			52,580			11.5		%	2,086
Gains, losses and other items, net	1			489			5,043			14,400			19,933			2,276			45			2,321			(44400.0)		%	(444)
Total operating expenses	68,419			78,545			93,394			122,690			363,048			94,460			98,956			193,416			29.8		%	20,411

Loss from operations	(29,602)			(38,199)			(48,211)			(82,134)			(198,146)			(48,375)			(50,273)			(98,648)			(40.8)		%	-12,074
% Margin	(47.4)		%	(58.9)		%	(60.2)		%	(104.9)		%	(69.4)		%	(58.6)		%	(55.8)		%	(57.1)		%

Total other income (expense)	356			(281)			10,404			8,311			18,790			5,882			4,780			10,662			1421.6		%	5,061
Loss from continuing operations before income taxes	(29,246)			(38,480)			(37,807)			(73,823)			(179,356)			(42,493)			(45,493)			(87,986)			(24.0)		%	(7,013)

Income taxes (benefit)	(1,428)			2,700			(22,546)			(24,135)			(45,409)			(353)			(5,291)			(5,644)			(559.6)		%	(7,991)

Net loss from continuing operations	(27,818)			(41,180)			(15,261)			(49,688)			(133,947)			(42,140)			(40,202)			(82,342)			3.5		%	978


LIVERAMP HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Continued)
(Unaudited)
(Dollars in thousands, except per share amounts)
																	Q2 FY20 to Q2 FY19
	6/30/2018		9/30/2018		12/31/2018		3/31/2019		FY2019		6/30/2019		9/30/2019		FY2020		%			$

Earnings from discontinued operations, net of tax	24,803		61,803		1,071,661		4,227		1,162,494		—		0		0		(249.2)		%	(61,803)

Net earnings (loss)	$	(3,015)	$	20,623	$	1,056,400	$	(45,461)	$	1,028,547	$	(42,140)	$	(40,202)	$	(82,342)	$	(20)		$	(60,825)

Diluted earnings (loss) per share	$	(0.04)	$	0.27	$	13.65	$	(0.67)	$	13.71	$	(0.61)	$	(0.59)	$	(1.21)	$	(22)		$	(1)

Diluted loss per share continuing operations	$	(0.36)	$	(0.53)	$	(0.20)	$	(0.73)	$	(1.79)	$	(0.61)	$	(0.59)	$	(1.21)	$	—		$	—

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



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

	6/30/2018		9/30/2018		12/31/2018		3/31/2019		FY2019		6/30/2019		9/30/2019		FY2020

Loss from continuing operations before income taxes	$	(29,246)	$	(38,480)	$	(37,807)	$	(73,823)	$	(179,356)	$	(42,493)	$	(45,493)	$	(87,986)
Income taxes (benefit)	(1,428)		2,700		(22,546)		(24,135)		(45,409)		(353)		(5,291)		(5,644)
Net loss from continuing operations	(27,818)		(41,180)		(15,261)		(49,688)		(133,947)		(42,140)		(40,202)		(82,342)

Earnings from discontinued operations, net of tax	24,803		61,803		1,071,661		4,227		1,162,494		—		—		—

Net earnings (loss)	$	(3,015)	$	20,623	$	1,056,400	$	(45,461)	$	1,028,547	$	(42,140)	$	(40,202)	$	(82,342)

Earnings (loss) per share:
Basic	$	(0.04)	$	0.27	$	13.65	$	(0.67)	$	13.71	$	(0.61)	$	(0.59)	$	(1.21)
Diluted	$	(0.04)	$	0.27	$	13.65	$	(0.67)	$	13.71	$	(0.61)	$	(0.59)	$	(1.21)

Excluded items:
Purchased intangible asset amortization (cost of revenue)	$	5,970	$	3,548	$	3,359	$	2,981	$	15,858	$	3,123	$	5,369	$	8,492
Non-cash stock compensation (cost of revenue and operating expenses)	17,798		17,667		26,082		41,175		102,722		18,630		23,354		41,984
Accelerated depreciation (cost of revenue and operating expenses)	—		—		1,959		1,853		3,812		1,906		1,663		3,569
Restructuring and merger charges (gains, losses, and other)	1		489		5,043		14,400		19,933		2,276		45		2,321
Separation and transformation costs (general and administrative)	—		2,122		700		(705)		2,117		—		—		—
Total excluded items, continuing operations	$	23,769	$	23,826	$	37,143	$	59,704	$	144,442	$	25,935	$	30,431	$	56,366


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

	6/30/2018		9/30/2018		12/31/2018		3/31/2019		FY2019		6/30/2019		9/30/2019		FY2020

Loss from continuing operations before income taxes and excluding items	(5,477)		(14,654)		(664)		(14,119)		(34,914)		(16,558)		(15,062)		(31,620)
Income taxes (benefit)	(1,078)		(3,790)		(2,941)		(5,155)		(12,964)		(216)		190		(26)
Non-GAAP net earnings (loss) from continuing operations	$	(4,399)	$	(10,864)	$	2,277	$	(8,964)	$	(21,950)	$	(16,342)	$	(15,252)	$	(31,594)

Non-GAAP earnings (loss) per share from continuing operations:
Basic	$	(0.06)	$	(0.14)	$	0.03	$	(0.13)	$	(0.29)	$	(0.24)	$	(0.23)	$	(0.46)
Diluted	$	(0.06)	$	(0.14)	$	0.03	$	(0.13)	$	(0.29)	$	(0.24)	$	(0.23)	$	(0.46)

Basic weighted average shares	76,935		77,448		77,398		68,299		75,020		68,906		67,684		68,295
Diluted weighted average shares	76,935		77,448		77,398		68,299		75,020		68,906		67,684		68,295


Some totals may not add due to rounding



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

	6/30/2018		9/30/2018		12/31/2018		3/31/2019		FY2019		6/30/2019		9/30/2019		FY2020
Expenses, continuing operations:
Cost of revenue	$	23,654	$	24,466	$	34,838	$	37,760	$	120,718	$	36,426	$	41,460	$	77,886
Research and development	16,970		16,940		20,469		31,318		85,697		23,722		26,445		50,167
Sales and marketing	33,323		35,940		40,054		49,223		158,540		43,144		45,204		88,348
General and administrative	18,125		25,176		27,828		27,749		98,878		25,318		27,262		52,580
Gains, losses and other items, net	1		489		5,043		14,400		19,933		2,276		45		2,321

Excluded items:
Purchased intangible asset amortization (cost of revenue)	5,970		3,548		3,359		2,981		15,858		3,123		5,369		8,492
Non-cash stock compensation (cost of revenue)	712		782		1,052		2,163		4,709		755		1,060		1,815
Non-cash stock compensation (research and development)	4,341		3,745		5,945		14,193		28,224		4,451		6,346		10,797
Non-cash stock compensation (sales and marketing)	9,920		9,854		9,460		14,736		43,970		8,920		9,758		18,678
Non-cash stock compensation (general and administrative)	2,824		3,286		9,625		10,083		25,818		4,504		6,190		10,694
Accelerated depreciation (cost of revenue)	—		—		1,527		1,445		2,972		1,487		1,245		2,732
Accelerated depreciation (general and administrative)	—		—		432		408		840		419		418		837
Restructuring and merger charges (gains, losses, and other)	1		489		5,043		14,400		19,933		2,276		45		2,321
Separation and transformation costs (general and administrative)	—		2,122		700		(705)		2,117		—		—		—
Total excluded items	$	23,768	$	23,826	$	37,143	$	59,704	$	144,441	$	25,935	$	30,431	$	56,366


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

	6/30/2018		9/30/2018		12/31/2018		3/31/2019		FY2019		6/30/2019		9/30/2019		FY2020

Expenses, continued operations excluding items:
Cost of revenue	$	16,972	$	20,136	$	28,900	$	31,171	$	97,179	$	31,061	$	33,786	$	64,847
Research and development	12,629		13,195		14,524		17,125		57,473		19,271		20,099		39,370
Sales and marketing	23,403		26,086		30,594		34,487		114,570		34,224		35,446		69,670
General and administrative	15,301		19,768		17,071		17,963		70,103		20,395		20,654		41,049
Gains, losses and other items, net	—		—		—		—		—		—		—		—


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, 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 LOSS GUIDANCE (1)
(Unaudited)
(Dollars in thousands)

	For the year ending
	March 31, 2020
	Low Range	High Range

Revenues	376,000	381,000

GAAP loss from operations	(180,000)	(175,000)

Excluded items:
Purchased intangible asset amortization	19,000	19,000
Accelerated depreciation	4,000	4,000
Non-cash stock compensation	87,000	87,000
Gains, losses and other items, net	2,000	2,000
Total excluded items	112,000	112,000

Non-GAAP loss from operations	(68,000)	(63,000)

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

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.

•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.

•Separation and transformation costs: In the prior year, 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. Our criteria for excluding separation and 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 believe excluding these items from our non-GAAP financial measures is useful for investors and provides meaningful supplemental information.

•Accelerated depreciation: In the current year we are excluding 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 is 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.

•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.