STOCKHOLDERS' EQUITY:

12 Months Ended

Mar. 31, 2020

Equity [Abstract]

STOCKHOLDERS' EQUITY:

STOCKHOLDERS' EQUITY:

The Company has authorized 200 million shares of $0.10 par value common stock and 1 million shares of $1.00 par value preferred stock.  The board of directors of the Company may designate the relative rights and preferences of the preferred stock when and if issued.  Such rights and preferences could include liquidation preferences, redemption rights, voting rights and dividends, and the shares could be issued in multiple series with different rights and preferences.  The Company currently has no plans for the issuance of any shares of preferred stock.

On August 29, 2011, the board of directors adopted a common stock repurchase program.  That program was subsequently modified and expanded, most recently on October 25, 2018.  On that date, the board of directors authorized a $500 million increase to the existing common stock repurchase program. Under the modified common stock repurchase program, the Company may purchase up to $1.0 billion of its common stock through the period ending December 31, 2020.  During the fiscal year ended March 31, 2020, the Company repurchased 4.4 million shares of its common stock for $182.2 million under the stock repurchase program.  During the fiscal year ended March 31, 2019, the Company repurchased 2.4 million shares of its common stock for $74.4 million under the stock repurchase program.  During the fiscal year ended March 31, 2018, the Company repurchased 3.3 million shares of its common stock for $88.9 million.  Through March 31, 2020, the Company has repurchased 26.9 million shares of its stock for $631.2 million, leaving remaining capacity of $368.8 million under the stock repurchase program. 

On October 25, 2018, the board of directors authorized a Dutch auction tender offer to purchase shares of its outstanding common stock at an initial aggregate purchase price not to exceed $500 million, plus up to 2% of the Company's outstanding shares of common stock in accordance with the rules and regulations of the SEC. On December 13, 2018, the Company accepted for purchase 11.2 million shares of its common stock at a price of $44.50 per share, for an aggregate cost of $503.4 million, including fees and expenses. These shares represented approximately 14.2% of the shares outstanding.

The Company paid no dividends on its common stock for any of the years reported.

Stock-based Compensation Plans

The Company has stock option and equity compensation plans for which a total of 42.3 million shares of the Company’s common stock have been reserved for issuance since the inception of the plans. At March 31, 2020, there were a total of 9.3 million shares available for future grants under the plans.

During the fiscal year ended March 31, 2019, the Board voted to amend the Amended and Restated 2005 Equity Compensation Plan to increase the number of shares available under the plan from 32.9 million shares at March 31, 2018 to 37.9 million shares at March 31, 2019, bringing the total number of shares reserved for issuance since inception of all plans from 34.5 million shares at March 31, 2018 to 42.3 million shares beginning in the quarter ended September 30, 2018. The amendment received shareholder approval at the September 20, 2018 annual shareholders' meeting.

Stock-based Compensation Expense

The Company's stock-based compensation activity for the twelve months ended March 31, 2020, by award type, was (dollars in millions):

	Year ended March 31,
	2020		2019		2018
Stock options	$	3.7	$	3.3	$	5.0
Restricted stock units	55.5		67.0		29.1
Arbor acquisition consideration holdback	2.6		15.3		15.3
DPM acquisition consideration holdback	6.2		—		—
PDP assumed performance plan	20.3		15.8		2.0
Other non-employee stock-based compensation	1.1		1.3		1.0
Total non-cash stock-based compensation included in the consolidated statements of operations	89.4		102.7		52.9
Less expense related to liability-based equity awards	(24.2)		(14.2)		(1.7)
Stock-based compensation of discontinued operations	—		62.8		10.3
Total non-cash stock-based compensation included in the consolidated statements of equity	$	65.2	$	151.3	$	61.5

The effect of stock-based compensation expense on income, by financial statement line item, was (dollars in millions):

	Year ended March 31,
	2020		2019		2018
Cost of revenue	$	3.8	$	4.7	$	2.7
Research and development	23.3		28.2		15.6
Sales and marketing	38.0		44.0		23.4
General and administrative	24.4		25.8		11.2
Total non-cash stock-based compensation included in the consolidated statements of operations	$	89.4	$	102.7	$	52.9

In March 2019, the Company accelerated the vesting of certain time-vesting restricted stock units that would have otherwise vested over the next six months to take advantage of significant cash tax savings opportunities. This resulted in the release of restricted stock units covering approximately 0.5 million shares of common stock. The Company recognized $19.8 million of compensation costs related to the accelerated vesting and release of these units, which is included in loss from operations in the consolidated statement of operations. Of the $19.8 million compensation costs, $14.3 million represented incremental compensation cost and $5.5 million represented accelerated original grant date fair value compensation cost.

The following table provides the expected future expense for all of the Company's outstanding equity awards at March 31, 2020, by award type (dollars in millions).

	For the years ending
	2021		2022		2023		2024		Total
Stock options	$	2.3	$	1.1	$	0.4	$	—	$	3.8
Restricted stock units	51.7		39.3		25.3		6.2		122.5
DPM acquisition consideration holdback	8.3		8.2		2.1		—		18.6
PDP assumed performance plan	18.1		9.1		—		—		27.2
	$	80.4	$	57.7	$	27.8	$	6.2	$	172.1

Stock Option Activity of Continuing Operations

In fiscal 2020, in connection with the acquisition of DPM, the Company replaced all outstanding stock options held by DPM associates immediately prior to the acquisition with options to acquire shares of LiveRamp common stock having substantially the same terms and conditions as were applicable under the original options. In total, the Company issued 162,481 replacement options at a weighted-average exercise price of $1.64 per share. The acquisition-date fair value of the replacement stock options was $7.4 million and was determined using a binomial lattice model with the following assumptions: dividend yield of 0.0% since LiveRamp is currently not paying dividends and there are no plans to pay dividends; risk-free interest rates from 1.86% to 1.96%, based on the rate of U.S. Treasury securities with a term equal to the remaining term of each option; remaining terms of each option from 7.33 years to 9.55 years; expected volatility of 45.00% considering the implied volatility of publicly traded LiveRamp options and historical volatility of LiveRamp stock.

Of the total replacement options issued, 48,619 were fully vested and required no post-combination employee service. The remaining replacement options had components of both pre-combination and post-combination service requirements. As a result, $2.3 million of the acquisition-date fair value of the replacement options was calculated and identified as consideration transferred in the DPM acquisition. The remaining $5.1 million acquisition-date fair value is considered future compensation costs and will be recognized as stock-based compensation cost over the remaining service period.

Stock option activity for the twelve months ended March 31, 2020 was: 

				Weighted-average
		Weighted-average		remaining	Aggregate
	Number of	exercise price		contractual term	Intrinsic value
	shares	per share		(in years)	(in thousands)
Outstanding at March 31, 2019	1,374,430	$	14.81
DPM replacement stock options issued	162,481	$	1.64
Exercised	(177,459)	$	6.13		$	6,666
Forfeited or canceled	(8,794)	$	4.82
Outstanding at March 31, 2020	1,350,658	$	14.43	3.6	$	24,972
Exercisable at March 31, 2020	1,262,493	$	15.32	3.3	$	22,226

The aggregate intrinsic value for options exercised in fiscal 2020, 2019, and 2018 was $6.7 million, $35.3 million, and $6.5 million, respectively.  The aggregate intrinsic value at period end represents the total pre-tax intrinsic value (the difference between LiveRamp’s closing stock price on the last trading day of the period and the exercise price for each in-the-money option) that would have been received by the option holders had they exercised their options on March 31, 2020.  This amount changes based upon changes in the fair market value of LiveRamp’s common stock.

A summary of stock options outstanding and exercisable as of March 31, 2020 was:

					Options outstanding				Options exercisable
Range of						Weighted-average	Weighted-average			Weighted-average
exercise price					Options	remaining	exercise price		Options	exercise price
per share					outstanding	contractual life	per share		exercisable	per share
$	0.61	—	$	9.99	233,296	5.4 years	$	1.60	145,131	$	1.51
$	10.00	—	$	19.99	709,672	2.6 years	$	14.69	709,672	$	14.69
$	20.00	—	$	24.99	407,690	4.3 years	$	21.31	407,690	$	21.31
					1,350,658	3.6 years	$	14.43	1,262,493	$	15.32

Performance Stock Option Unit Activity of Continuing Operations

Performance stock option unit activity for the twelve months ended March 31, 2020 was:

				Weighted-average
		Weighted-average		remaining	Aggregate
	Number	exercise price		contractual term	intrinsic value
	of shares	per share		(in years)	(in thousands)
Outstanding at March 31, 2019	130,154	$	21.44
Forfeited or canceled	(130,154)	$	21.44
Outstanding at March 31, 2020	—	$	—		$	—
Exercisable at March 31, 2020	—	$	—	—	$	—

The performance stock option units outstanding at March 31, 2019 reached maturity of the relevant performance period at March 31, 2019.  The units attained a 0% attainment level, resulting in cancellation of the units in the current fiscal year.

Fiscal 2019 Restricted Stock Unit Activity Related to Disposition of AMS

Performance-based Restricted Stock Unit Conversions

In conjunction with the disposition of AMS, the Company converted its outstanding TSR-based performance restricted stock units ("PSUs") to time-vesting restricted stock units ("RSUs"). On the conversion date, the performance period was truncated and attainment measured, resulting in conversion of the PSUs to RSUs

at a 200% conversion rate. Each converted RSU held by an AMS associate was vested immediately. The remaining converted RSUs will cliff vest on the same date as the original PSU performance period maturity date.

Share activity related to these conversions was:

		Continuing Operations	Discontinued Operations	Total Continuing and Discontinued Operations
TSR-based performance restricted stock units converted to time-based restricted stock units, by fiscal year granted:	Original Performance Maturity Date:
Fiscal 2017 PSU	3/31/2019	(168,378)	(46,218)	(214,596)
Fiscal 2018 PSU	3/31/2020	(148,963)	(36,815)	(185,778)
Fiscal 2019 PSU	3/31/2021	(186,539)	(30,188)	(216,727)
Totals		(503,880)	(113,221)	(617,101)
Time-based restricted stock units converted from TSR-based performance restricted stock units	RSU Cliff Vest Date (Continuing Ops Only):
Fiscal 2017 PSU	3/31/2019	336,756	92,436	429,192
Fiscal 2018 PSU	3/31/2020	297,926	73,630	371,556
Fiscal 2019 PSU	3/31/2021	373,078	60,376	433,454
Totals		1,007,760	226,442	1,234,202

The Company recognized both incremental and accelerated compensation costs in the consolidated statement of operations related to the PSU conversions. The impact on compensation costs was (dollars in thousands):

	Continuing Operations		Discontinued Operations		Total Continuing and Discontinued Operations
Incremental compensation costs	$	7,179	$	1,599	$	8,778
Accelerated compensation costs of original grant date fair value related to immediate vesting of converted PSUs of AMS associates	$	—	$	1,607	$	1,607

AMS Restricted Stock Unit Accelerations

In conjunction with the disposition of AMS, the Company accelerated the vesting of substantially all outstanding time-vesting restricted stock units of AMS associates to the date of disposition, including converted PSU shares, resulting in the release of restricted stock units covering 1,187,344 shares of common stock. The Company recognized $54.0 million of compensation costs related to the accelerated vesting and release of these units, which is included in net earnings from discontinued operations, net of tax in the consolidated statement of operations. Of the $54.0 million compensation costs, $27.0 million represented incremental compensation cost and $27.0 million represented accelerated original grant date fair value compensation cost.

Restricted Stock Unit Activity of Continuing Operations

Time-vesting restricted stock units -

During the twelve months ended March 31, 2020, the Company granted time-vesting restricted stock units covering 1,697,506 shares of common stock and having a fair value at the date of grant of $85.6 million. All of the restricted stock units granted in the current period vest over four years. Grant date fair value of these units is equal to the quoted market price for the shares on the date of grant. Included in the restricted stock units granted in the current fiscal year were units related to the DPM acquisition. Following the closing of the DPM acquisition, the Company granted new awards of restricted stock units covering 155,346 shares of common stock to select employees to induce them to accept employment with the Company (the "DPM inducement awards"). The DPM inducement awards had a grant date fair value of $7.3 million.

During fiscal 2019, the Company granted time-vesting restricted stock units covering 1,939,746 shares of common stock with a fair value at the date of grant of $69.5 million. Of the restricted stock units granted in the current period, 1,856,444 vest over four years and 83,302 vest over one year.

During fiscal 2018, the Company granted time-vesting restricted stock units covering 1,386,448 shares of common stock with a fair value at the date of grant of $36.2 million. Of the restricted stock units granted in fiscal 2018, 1,089,379 vest over four years, 106,571 vest over three years, 174,368 vest over two years, and 16,130 vest over one year.

Time-vesting restricted stock unit activity for the twelve months ended March 31, 2020 was:

		Weighted-average
		fair value per		Weighted-average
	Number	share at grant		remaining contractual
	of shares	date		term (in years)
Outstanding at March 31, 2019	3,054,750	$	30.91	2.47
Granted	1,697,506	$	50.44
Vested	(963,532)	$	27.73
Forfeited or canceled	(437,086)	$	38.82
Outstanding at March 31, 2020	3,351,638	$	40.68	2.51

The total fair value of time-vesting restricted stock units vested for the twelve months ended March 31, 2020, 2019 and 2018 was $59.8 million, $93.1 million, and $24.1 million, respectively and is measured as the quoted market price of the Company's common stock on the vesting date for the number of shares vested.

Performance-based restricted stock units -

During the twelve months ended March 31, 2020, the Company granted performance-based restricted stock units covering 202,818 shares of common stock having a fair value at the date of grant of $12.3 million. The grants were made under two separate performance plans. Under the first performance plan, units covering 60,844 shares of common stock were granted having a fair value at the date of grant of $4.4 million, determined using a Monte Carlo simulation model.  The units vest subject to attainment of market conditions established by the compensation committee of the board of directors (“compensation committee”) and continuous employment through the vesting date.  The 60,844 units may vest in a number of shares from 0% to 200% of the award, based on the total shareholder return of LiveRamp common stock compared to total shareholder return of the Russell 2000 market index for the period from April 1, 2019 to March 31, 2022. Under the second performance plan, units covering 141,974 shares of common stock were granted having a fair value at the date of grant of $7.9 million equal to the quoted market price for the shares on the date of grant. The units vest subject to attainment of performance criteria established by the compensation committee of the board of directors. 82,494 units may vest in a number of shares from 0% to 200% of the award, based on attainment of the Company's three-year revenue compound annual growth rate target for the period from April 1, 2019 to March 31, 2022. The remaining 59,480 units will vest in three equal annual increments in a number of shares from 0% to 200% of the award, based on attainment of the year-over-year revenue growth targets for the annual period from April 1, 2019 to March 31, 2020. The 59,480 units reached maturity of the relevant performance period at March 31, 2020.  These units are expected to vest at an approximate 164.36% attainment level, resulting in release of approximately 97,761 shares of stock vesting in three equal annual increments.

During fiscal 2019, the Company granted performance-based restricted stock units, in two separate plans, covering 534,438 shares of common stock having a fair value at the date of grant of $22.0 million. Under the first performance plan, units covering 186,539 shares of common stock were granted having a fair value at the date of grant of $5.8 million, determined using a Monte Carlo simulation model.  The units vest subject to attainment of market conditions established by the compensation committee and continuous employment through the vesting date.  The 186,539 units may vest in a number of shares from 25% to 200% of the award, based on the total shareholder return of LiveRamp common stock compared to total shareholder return of a group of peer companies established by the compensation committee for the period from April 1, 2018 to March 31, 2021. All of these awards were converted to RSUs at the time of the AMS disposition. Under the second performance plan, units covering 347,899 shares of common stock were granted having a fair value at the date of grant of $16.2 million equal to the quoted market price for the shares on the date of grant. The units vest subject to attainment of performance criteria established by the compensation committee for the period October 1, 2018 to September 30, 2022. The units may vest in a number of shares from zero to 200% of the award, based on the attainment of revenue growth and margin targets. Vesting will be evaluated and performance measured on a quarterly basis beginning with the period ending June 30, 2020.

During fiscal 2018, the Company granted performance-based restricted stock units covering 389,065 shares of common stock having a fair value at the date of grant of $10.1 million.  Of the performance-based restricted stock units granted in fiscal 2018, 184,931 units - having a fair value at the date of grant of $5.1 million, determined using a Monte Carlo simulation model - vest subject to attainment of performance criteria established by the compensation committee and continuous employment through the vesting date.  The 184,931 units may vest in a number of shares from zero to 200% of the award, based on the total shareholder return of LiveRamp common stock compared to TSR established by the compensation committee for the period from April 1, 2017 to March 31, 2020. All of these awards were converted to RSUs at the time of the AMS disposition.

Of the performance-based restricted stock units granted in fiscal 2018, 87,184 units - having a fair value at the date of grant of $2.1 million, based on the quoted market price for the shares on the date of grant - vest over two years, each being subject to attainment of performance criteria established by the compensation committee and continuous employment through the vesting date. These units vested at 50.2% attainment in fiscal 2019 resulting in release of 43,768 shares of stock and cancellation of remaining units.

The remaining 116,950 performance-based restricted stock units granted in fiscal 2018 - having a fair value at the date of grant of $2.9 million, based on the quoted market price for the shares on the date of grant - vest in three equal tranches, each being subject to attainment of performance criteria established by the compensation committee and continuous employment through the vesting date. Each of the three tranches may vest in a number of shares, from zero to 300% of the initial award, based on the attainment of certain revenue growth and operating

margin targets for the years ending March 31, 2018, 2019, and 2020, respectively. The first tranche vested at 53.3% attainment in fiscal 2019 resulting in release of 17,562 shares of stock. The second tranche vested at 0% attainment in fiscal 2020 resulting in cancellation of the tranche two units. The 18,275 units outstanding at March 31, 2020, reached maturity of the relevant performance period at March 31, 2020.  Those units are expected to vest at an approximate 0% attainment level, resulting in cancellation of the units.

Non-vested performance-based restricted stock unit activity for the twelve months ended March 31, 2020 was:

		Weighted-average
		fair value per		Weighted-average
	Number	share at grant		remaining contractual
	of shares	date		term (in years)
Outstanding at March 31, 2019	394,188	$	43.88	3.23
Granted	202,818	$	60.65
Forfeited or canceled	(51,560)	$	34.42
Outstanding at March 31, 2020	545,446	$	51.01	2.24

During fiscal 2019, 61,330 performance-based restricted stock units vested. Of the units vested, 43,768 relate to 50.2% attainment on a fiscal 2018 plan, and 17,562 relate to 53.3% attainment on a fiscal 2018 plan. During fiscal 2018, 580,133 performance-based restricted stock units vested.  The total fair value of performance-based restricted stock units vested in fiscal 2019 and 2018 was $2.2 million and $14.1 million, respectively and is measured as the quoted market price of the Company’s common stock on the vesting date for the number of shares vested.

Stock-based Compensation Expense Related to Discontinued Operations

Total stock-based compensation expense related to discontinued operations for fiscal 2019 and 2018 was $62.8 million and $10.3 million, respectively and is included in non-cash stock-based compensation in the consolidated statements of equity.

Consideration Holdback

As part of the Company's acquisition of DPM in the current fiscal year, $24.7 million of the acquisition consideration otherwise payable with respect to shares of DPM common stock held by certain key employees was subject to holdback by the Company pursuant to agreements with those employees (each, a "Holdback Agreement"). The Holdback Agreement specifies that the consideration holdback will vest in three equal annual increments on the anniversary of the closing date. Vesting is subject to the DPM key employees' continued employment through each annual vesting date and will be settled in shares of Company common stock. Through March 31, 2020, the Company has recognized a total of $6.2 million related to the DPM consideration holdback. At March 31, 2020, the recognized, but unpaid, balance related to the DPM consideration holdback in other accrued expenses in the consolidated balance sheet was $6.2 million.

As part of the Company’s acquisition of Arbor in fiscal 2017, $38.3 million of the acquisition consideration otherwise payable with respect to shares of restricted Arbor common stock held by certain key employees was subject to holdback by the Company pursuant to agreements with those employees (each, a “Holdback Agreement”). The Holdback Agreement specifies the payment of the consideration in monthly installments using LiveRamp shares over a thirty-month period, ending in the quarter ended June 30, 2019. As of June 30, 2019, the Company had met its full obligation for the consideration holdback due to the Arbor key employees. Through March 31, 2020, the Company had recognized a total of $38.3 million expense related to the Arbor Holdback Agreements.

PDP Assumed Performance Plan

In connection with the fiscal 2018 acquisition of PDP (see Note 5 - Acquisitions), the Company assumed the outstanding performance compensation plan under the PDP 2018 Equity Compensation Plan ("PDP PSU plan"). During the second quarter of fiscal 2020, the year-one performance payout under the plan was finalized resulting in a $19.7 million payout to the plan participants. On the settlement date, a total of 465,389 shares of Company common stock was delivered to the PDP PSU plan participants to settle the year-one performance payout obligation, of which 393,306 shares represented the liability-classified portion of the award.

The performance compensation paid under the PDP PSU plan is being recorded as non-cash stock-based compensation as it is attributable to post-combination service. The non-cash stock-based compensation expense is being recognized over the requisite service and performance period based on expected attainment. 90% of the performance compensation is settleable in a number of shares calculated using a variable 20-day stock price factor, determined in future periods, and is classified as a liability-based equity award. As of each reporting date, 90% of any recognized, but unpaid portions of the performance compensation plan are recorded in other accrued expenses in the consolidated balance sheets. The remaining 10% of the performance compensation is classified as an equity-classified equity award. During the fourth quarter of fiscal 2020, the Company converted the outstanding PDP PSU plan to a time-vesting restricted stock plan ("PDP RSU plan") at a 100.0% performance conversion rate. The PDP RSUs will vest over three annual increments beginning on March 31, 2020. As a result of the award modification, the Company will recognize $0.6 million of incremental compensation costs related to the equity-classified portion of the award in the consolidated statement of operations.

Through March 31, 2020, the Company has recognized a total of $37.8 million related to the PDP non-cash stock-based compensation plan. At March 31, 2020, the recognized, but unpaid, balance related to the PDP non-cash stock-based compensation plan in other accrued expenses in the consolidated balance sheet was $16.3 million.

Qualified Employee Stock Purchase Plan

In addition to the stock-based plans, the Company maintains a qualified employee stock purchase plan (“ESPP”) that permits substantially all employees to purchase shares of common stock at a discount from the market price. At March 31, 2020, there were approximately 0.5 million shares available for issuance under the ESPP.

During the combined fiscal years of 2020, 2019, and 2018, 264,996 shares were purchased under the plan. The total expense to the Company, representing the discount to the market price, for fiscal 2020, 2019, and 2018 was approximately $0.5 million, $0.4 million, and $0.2 million, respectively.

Accumulated Other Comprehensive Income

Accumulated other comprehensive income accumulated balances of $5.7 million and $7.8 million at March 31, 2020 and March 31, 2019, respectively, reflect accumulated foreign currency translation adjustments.